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GLOBAL
OFFERING
Stock Code : 2715
(A joint stock company incorporated in the People’s Republic of China with limited liability)
南京埃斯頓自動化股份有限公司
ESTUN AUTOMATION CO., LTD
Sole Sponsor, Sponsor-Overall Coordinator, Joint Global Coordinator,
Joint Bookrunner and Joint Lead Manager
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers


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IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
ESTUN AUTOMATION 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
: 96,780,000 H Shares (subject to the
Over-allotment Option)
Number of Hong Kong Offer Shares : 9,678,000 H Shares (subject to
reallocation)
Number of International Offer Shares : 87,102,000 H Shares (subject to
reallocation and the Over-allotment
Option)
Maximum Offer Price : HK$17.00 per H Share, plus brokerage
of 1.0%, SFC transaction levy of
0.0027%, Stock Exchange trading fee
of 0.00565% and AFRC transaction
levy of 0.00015% (payable in full on
application in Hong Kong dollars and
subject to refund)
Nominal Value : RMB1.00 per H Share
Stock Code : 2715
Sole Sponsor, Sponsor-Overall Coordinator, Joint Global Coordinator,
Joint Bookrunner and Joint Lead Manager
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
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 howsoever arising from or in re liance upon the whole or any part of the contents
of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in the section headed “Appendix VII — Documents Delivered to the Registrar of Companies in Hong Kong and on Display”
in this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up and Miscella neous Provisions) Ordinance (Chapter 32
of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus or any other
documents referred to above.
The Offer Price is expected to be determined by agreement between us and the Sponsor-Overall Coordinator (for itself and on behalf of the Underwriters ) on the Price Determination Date, which is
expected to be on or before Thursday, March 5, 2026 (Hong Kong time) and, in any event, not later than 12:00 noon on Thursday, March 5, 2026 (Hong Kong time ). The Offer Price will be not more
than HK$17.00 per Offer Share and is currently expected to be not less than HK$15.36 per Offer Share, unless otherwise announced. If, for any reason, th e Offer Price is not agreed between us and
the Sponsor-Overall Coordinator (for itself and on behalf of the Underwriters) by 12:00 noon on Thursday, March 5, 2026 (Hong Kong time), the Global Of fering will not proceed and will lapse.
Applicants for Hong Kong Offer Shares are required to pay, on application, the maximum Offer Price of HK$17.00 for each Hong Kong Offer Share together w ith brokerage of 1.0%, SFC transaction
levy of 0.0027%, Stock Exchange trading fee of 0.00565% and AFRC transaction levy of 0.00015%.
The Sponsor-Overall Coordinator (for itself and on behalf of the Underwriters) may, where considered appropriate and with our consent, reduce the nu mber of Offer Shares being offered under the Global
Offering and/or the indicative Offer Price range below that stated in this prospectus at any time on or prior to the morning of the last day for lodging ap plications under the Hong Kong Public Offering.
In such a case, notices of the reduction in the number of Hong Kong Offer Shares and/or the indicative Offer Price range will be published on the websites of the Stock Exchange at www.hkexnews.hk
and on the website of our Company at www.estun.com as soon as practicable but in any event not later than the morning of the day which is the last day for lodging applications under the Hong Kong
Public Offering. See sections headed “Structure and Conditions of the Global Offering” and “How to Apply for the Hong Kong Offer Shares” in this prospe ctus for more details.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Sponsor-Overall Coordina tor (for itself and on behalf of the Hong Kong
Underwriters) if certain grounds for termination arise prior to 8:00 a.m. on the Listing Date. Such grounds are set out in “Underwriting” in this prosp ectus.
Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, includin g the risk factors set out in “Risk Factors.”
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States and may not be offe red, sold, pledged or transferred within the
United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. The Offer Shares are being offered and sold only outside
the United States in offshore transactions in reliance on 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 website of the Stock Exchange at www.hkexnews.hk and our website at www.estun.com. If you re quire a printed copy of this
prospectus, you may download and print from the website addresses above.
IMPORTANT
February 27, 2026


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IMPORTANT NOTICE TO INVESTORS:
FULL Y ELECTRONIC APPLICA TION 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.estun.com. 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.
IMPORTANT
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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.
Y our application through the White Form eIPO service or the HKSCC EIPO
channel must be made for a minimum of 200 Hong Kong Offer Shares and in multiples
of that number of Hong Kong Offer Shares as set out in the table below. No application
for any other number of Hong Kong Offer Shares will be considered and such an
application is liable to be rejected.
If you are applying through the White Form eIPO service, you may refer to the
table below for the amount payable for the number of H Shares you have selected. Y ou
must pay the respective maximum amount payable on application in full upon
application for Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, your broker or custodian
may require you to pre-fund your application in such amount as determined by the broker
or custodian, based on the applicable laws and regulations in Hong Kong. Y ou are
responsible for complying with any such pre-funding requirement imposed by your
broker or custodian with respect to the Hong Kong Offer Shares you applied for.
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$
200 3,434.29 3,000 51,514.34 40,000 686,857.80 500,000 8,585,722.50
400 6,868.57 4,000 68,685.78 50,000 858,572.26 600,000 10,302,867.00
600 10,302.88 5,000 85,857.23 60,000 1,030,286.70 700,000 12,020,011.50
800 13,737.16 6,000 103,028.66 70,000 1,202,001.16 800,000 13,737,156.00
1,000 17,171.45 7,000 120,200.11 80,000 1,373,715.60 900,000 15,454,300.50
1,200 20,605.73 8,000 137,371.55 90,000 1,545,430.06 1,000,000 17,171,445.00
1,400 24,040.02 9,000 154,543.00 100,000 1,717,144.50 1,500,000 25,757,167.50
1,600 27,474.31 10,000 171,714.46 200,000 3,434,289.00 2,000,000 34,342,890.00
1,800 30,908.61 20,000 343,428.90 300,000 5,151,433.50 3,000,000 51,514,335.00
2,000 34,342.89 30,000 515,143.36 400,000 6,868,578.00 4,839,000
(1) 83,092,622.35
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of the brokerage, the SFC transaction levy, the Stock Exchange
trading fee and the 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 to the expected timetable of the Hong Kong Public Offering,
we will issue an announcement on the respective websites of the Company at
www.estun.com and the Stock Exchange at www.hkexnews.hk.
The Hong Kong Public Offering commences .......................... .9:00 a.m. on
Friday, February 27, 2026
Latest time to complete electronic applications under
White Form eIPO service through the designated
website at www.eipo.com.hk (2) .................................. 1 1:30 a.m. on
Wednesday, March 4, 2026
Application lists for the Hong Kong Public Offering open (3) .............. 1 1:45 a.m. on
Wednesday, March 4, 2026
Latest time to (a) complete payment for 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
Wednesday, March 4, 2026
If you are instructing your broker or custodian who is a HKSCC Participant to submit
electronic application instructions on your behalf through HKSCC’s FINI system in
accordance with your instruction to apply for the Hong Kong Offer Shares, 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 for the Hong Kong Public Offering close
(3) ............ .12:00 noon on
Wednesday, March 4, 2026
Expected Price Determination Date (5) ......................o no r before 12:00 noon
Thursday, March 5, 2026
Announcement of the final Offer Price, the level of indications
of interest in the International Offering, the level of applications
in the Hong Kong Public Offering and the basis of allocation
of the Hong Kong Offer Shares to be published on the website
of the Stock Exchange at www.hkexnews.hk and the
website of the Company at www.estun.com (6) at or before (7) ............ 1 1:00 a.m. on
Friday, March 6, 2026
EXPECTED TIMETABLE (1)
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The results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety of
channels, including:
 in the announcement to be published on our
website at www.estun.com and the website of
the Stock Exchange at www.hkexnews.hk ..................... n o later than
11:00 p.m. on
Friday, March 6, 2026
 from the designated results of allocations
website at www.iporesults.com.hk
(alternatively: www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function ....................... .from 11:00 p.m. on
Friday, March 6, 2026
to 12:00 midnight on
Thursday, March 12, 2026
 from the allocation results telephone enquiry
by calling +852 2862 8555 between 9:00 a.m. and
6:00 p.m. on ................................ Monday, March 9, 2026 to
Thursday, March 12, 2026
H Share certificates in respect of wholly or partially successful
applications to be dispatched or deposited
into CCASS on or before
(8) .............................. Friday, March 6, 2026
White Form e-Refund payment instructions/refund cheques
in respect of wholly or partially successful applications if
the final Offer Price is less than the maximum Offer Price
per Offer Share initially paid on application (if applicable)
or wholly or partially unsuccessful applications to be
dispatched/collected on or before
(9) ...................... Monday, March 9, 2026
Dealings in the H Shares on the Stock Exchange
expected to commence at ....................................... .9:00 a.m. on
Monday, March 9, 2026
EXPECTED TIMETABLE (1)
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Notes:
(1) All times and dates refer to Hong Kong local times and dates unless otherwise stated.
(2) Y ou will not be permitted to submit your application under the White Form eIPO service through the
designated website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you
have already submitted your application and obtained an application reference number from the designated
website at or prior to 11:30 a.m., you will be permitted to continue the application process by completing
payment of application monies until 12:00 noon on the last day for submitting applications, when the
application lists close.
(3) If there is/are a “black” rainstorm warning signal, 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 Wednesday,
March 4, 2026, the application lists will not open or close on that day. For further information, please refer
to the section headed “How to Apply for the Hong Kong Offer Shares — E. Bad Weather Arrangements” in
this prospectus.
(4) If you instruct your broker or custodian who is a HKSCC Participant to give electronic application
instructions to apply for the Hong Kong Offer Shares on your behalf, you should contact your broker or
custodian for the latest time for giving such instructions which may be different from the latest time as stated
above.
(5) The Price Determination Date is expected to be on or before Thursday, March 5, 2026. If, for any reason, the
Offer Price is not agreed between the Sponsor-Overall Coordinator (for itself and on behalf of the
Underwriters) and our Company on or before 12:00 noon on Thursday, March 5, 2026, the Global Offering will
not proceed and will lapse.
(6) No temporary documents of title will be issued in respect of the Offer Shares. H Share certificates will only
become valid evidence of title at 8:00 a.m. on the Listing Date, which is expected to be on or around Monday,
March 9, 2026, provided that the Global Offering becomes unconditional in all respects on or before then.
Investors who trade H Shares on the basis of publicly available allocation details prior to the receipt of H Share
certificates or prior to the H Share certificates becoming valid do so entirely at their own risks.
(7) None of the websites or any of the information contained on the websites forms part of this prospectus.
(8) White Form e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially
unsuccessful applications and in respect of wholly or partially successful applications pursuant to the Hong
Kong Public Offering if the final Offer Price is less than the maximum Offer Price payable per Offer Share
on application. Part of the applicant’s identification document numbers, or, if the application is made by joint
applicants, part of the identification document numbers of the first-named applicant, provided by the
applicant(s) may be printed on the refund check, if any. Such data would also be transferred to a third party
for refund purposes. Banks may require verification of an applicant’s identification document numbers before
encashment of the refund cheques. Inaccurate completion of an applicant’s identification document numbers
may invalidate or delay encashment of the refund cheques.
(9) Applicants being individuals who are eligible for personal collection may not authorize any other person to
collect on their behalf. If you are a corporate applicant which is eligible for personal collection, your
authorized representative must bear a letter of authorization from your corporation stamped with your
corporation’s chop. Both individuals and authorized representatives must produce evidence of identity
acceptable to our H Share Registrar at the time of collection.
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 H Share
Certificates and Refund of Application Monies” for details.
Applicants who apply for the Hong Kong Offer Shares by giving electronic application instructions to HKSCC
via HKSCC’s FINI system should refer to “How to Apply for the Hong Kong Offer Shares — A. Application
for Hong Kong Offer Shares — 2. Application Channels” for details.
Applicants who have applied through the White Form eIPO service and paid their applications monies
through single bank accounts may have refund monies (if any) despatched to the bank account in the form of
White Form e-Refund payment instructions. Applicants who have applied through the White Form eIPO
service and paid their application monies through multiple bank accounts may have refund monies (if any)
despatched to the address as specified in their application instructions in the form of refund cheques by
ordinary post at their own risk.
Further information is set out in the section headed “How to Apply for the Hong Kong Offer Shares — D.
Despatch/Collection of H Share Certificates and Refund of Application Monies.”
EXPECTED TIMETABLE (1)
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The above expected timetable is a summary only. Y ou should see “Structure and
Conditions of the Global Offering” and “How to Apply for the Hong Kong Offer Shares” for
details of the structure of the Global Offering, including the conditions of the Global Offering,
and the procedures for application for the Hong Kong Offer Shares.
If the Global Offering does not become unconditional or is terminated in accordance with
its terms, the Global Offering will not proceed. In such a case, our Company will make an
announcement as soon as practicable thereafter.
EXPECTED TIMETABLE (1)
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IMPORTANT NOTICE TO INVESTORS
We have issued this prospectus solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares, and it does not constitute an offer to sell or
a solicitation of an offer to buy any security other than the Hong Kong Offer Shares
offered by this prospectus pursuant to the Hong Kong Public Offering. This prospectus
may not be used for the purpose of, and does not constitute, an offer or invitation in any
other jurisdiction or in any other circumstances. We have taken no action to permit a
public offering of the Offer Shares in any jurisdiction other than Hong Kong, and we have
taken no action to permit the distribution of this prospectus in any jurisdiction other than
Hong Kong. The distribution of this prospectus and the offering and sale of the Offer
Shares in other jurisdictions are subject to restrictions 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 only rely 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, Sole Sponsor, Sponsor-Overall Coordinator, Overall Coordinators, Joint Global
Coordinators, Joint Bookrunners, Joint Lead Managers, Capital Market Intermediaries,
any of the Underwriters, any of our or their respective directors, advisors, officers,
employees, agents or representatives, or any other person or party involved in the Global
Offering.
Page
Expected Timetable ................................................. i v
Contents ......................................................... viii
Summary ......................................................... 1
Definitions ........................................................ 2 8
Glossary ......................................................... 4 0
Forward-Looking Statements ......................................... 4 8
Risk Factors ...................................................... 5 0
Waivers from Strict Compliance with the Listing Rules and Exemption from
Compliance with the Companies (Winding up and Miscellaneous Provisions)
Ordinance ...................................................... 8 6
Information about this Prospectus and the Global Offering ................ 1 0 4
Directors and Parties Involved in the Global Offering ..................... 1 0 8
CONTENTS
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Corporate Information .............................................. 1 1 8
Industry Overview ................................................. 1 2 0
Regulatory Overview ................................................ 1 3 8
History, Development and Corporate Structure .......................... 1 7 1
Business .......................................................... 1 8 2
Relationship with Our Controlling Shareholders Group .................... 2 6 5
Directors and Senior Management ..................................... 2 6 9
Connected Transactions .............................................. 2 8 4
Substantial Shareholders ............................................ 2 9 8
Share Capital ..................................................... 3 0 0
Financial Information ............................................... 3 0 3
Cornerstone Investors ............................................... 3 8 1
Future Plans and Use of Proceeds ..................................... 3 8 9
Underwriting ...................................................... 3 9 7
Structure and Conditions of the Global Offering ......................... 4 1 0
How to Apply for the Hong Kong Offer Shares .......................... 4 2 1
Appendix I – Accountants’ Report .............................. I - 1
Appendix IA – Profit Estimate .................................. IA-1
Appendix II – Unaudited Pro Forma Financial Information ........... II-1
Appendix III – Taxation and Foreign Exchange ..................... III-1
Appendix IV – Summary of Principal Legal and Regulatory Provisions . . IV-1
Appendix V – Summary of the Articles of Association ............... V - 1
Appendix VI – Statutory and General Information .................. VI-1
Appendix VII – Documents Delivered to the Registrar of Companies in
Hong Kong and on Display ....................... VII-1
CONTENTS
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This summary aims to give you an overview of the information contained in this
prospectus. As this is a summary, it does not contain all the information that may be
important to you. You should read the entire prospectus including the financial statements
and accompanying notes, before you decide to invest in the Offer Shares. There are risks
associated with any investment. Some of the particular risks in investing in the Offer
Shares are set out in the section headed “Risk Factors” in this prospectus. You should
read that section carefully in full before you decide to invest in the Offer Shares.
OVERVIEW
Who We Are
We are a leading industrial robotics company in China. We had ranked first among
domestic manufacturers in China’s industrial robotic solutions market for years, in terms of
industrial robot shipment volume, according to Frost & Sullivan. According to the same source,
we achieved a historic breakthrough in the first half of 2025, with the shipment volume of
industrial robots surpassing foreign brands within the domestic market, making us the first
domestic manufacturer to rank at the top of the industrial robotic solutions market in China.
We are also among the top industrial robotics companies in terms of revenue, ranking sixth in
both the global market and China’s market in terms of revenue in 2024 among all
manufacturers, with a market share of 1.7% and 2.0%, respectively.
We offer (i) industrial robots and intelligent manufacturing systems and (ii) core
automation components and motion control systems, primarily to customers engaging in
various manufacturing sectors, such as automotive, construction machinery and heavy industry,
and lithium battery.
Our industrial robots and intelligent manufacturing systems provide automation solutions
that significantly enhance productivity, safety, and reliability in industrial settings. Our
industrial robot portfolio spans both general-purpose and application-specific models, capable
of independently executing repetitive, physically demanding, or hazardous tasks with high
precision. Building on this foundation, we also offer industrial robot workstations, which are
production units centered around robots and equipped with controllers and other auxiliary
devices to efficiently perform specific manufacturing steps such as welding, machining, or
assembly. Beyond standalone robots and workstations, our intelligent manufacturing systems
integrate our proprietary robots and core components with peripheral and auxiliary equipment
into turnkey production lines. These systems link multiple processes, ranging from machining
and assembly to testing and packaging, into workflows that minimize human intervention and
enable large-scale, continuous output from raw materials to finished products.
Our core automation components and motion control systems form the backbone of
intelligent manufacturing, covering motion control systems, servo systems, and motion control
solutions. Motion control systems act as the “brain and nerves” of industrial equipment,
enabling precise coordination of complex movements across industries such as electronics,
semiconductors, and packaging. Servo systems serve as the “muscles” of machinery, ensuring
fast, accurate, and stable motion in applications ranging from precision machining to
automotive and metal fabrication. Our motion control solutions integrate our motion control
systems, servo systems, electro-hydraulic systems, and industry-specific software into a
complete package tailored to particular industries, equipment, and application scenarios.
SUMMARY
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Below are our achievements over the years:
No. 1 Nationally
for years among domestic
manufacturers in terms of
shipment volume of
industrial robots(1)
No. 1 Nationally
in the first half of 2025 among
both domestic and foreign manu-
facturers in terms of shipment
volume of industrial robots (1)
No. 1 Globally
in 2024 in terms of the shipment
volume of robots
for sheet metal bending(1)
75
service sites globally(2)
Seven
manufacturing bases globally(3)
approximately
30%
revenue contributed by non-do-
mestic market throughout
the Track Record Period(4)
700kg ultra-heavy-duty
industrial robot(5)
First-of-its-Kind
Champion Enterprise in a
Niche Manufacturing
industrial robot for
photovoltaic stringing(5)
Sector
cETLus Certification
and TÜV Rheinland CE
Functional Safety
Certificate(6)
First Chinese Robotics
Manufacturer
R&D expenditure as a
percentage of our total
revenue(7)
9%+
1,029
R&D personnel(8)
Four MIIT projects
Three MOST projects
One NDRC projects(9)
LEADING
POSITION
GLOBAL
PRESENCE OUR PRODUCTS OUR R&D
Notes:
(1) Source: Frost & Sullivan.
(2) As of September 30, 2025. See “Business — Our Customers — Our Customer Service and Product Returns”
for details.
(3) As of September 30, 2025. See “Business – Manufacturing – Manufacturing Facilities” for details.
(4) Revenue contributed by overseas markets amounted to RMB1,312.2 million, RMB1,594.4 million,
RMB1,369.6 million, RMB1,139.3 million and RMB1,117.7 million in 2022, 2023, 2024 and the first nine
months of 2024 and 2025, respectively, accounting for 33.8%, 34.3%, 34.2%, 33.8% and 29.4% of our total
revenue for the same periods. For the purposes of this prospectus only, overseas markets include regions other
than the Chinese Mainland.
(5) Our 700kg ultra-heavy-duty industrial robot is included in the Catalog of Nationally Recognized First-of-its-
Kind Innovative Products (̨(ࢁ)ኬͦ፽(2024وwhile our industrial robot for
photovoltaic stringing has earned us the recognition of Champion Enterprise in a Niche Manufacturing Sector
(Άุ). Both recognitions were awarded by the Ministry of Industry and Information
Technology of the PRC (ʷ௅) (the “ MIIT ”).
(6) The cETLus certification indicates compliance with U.S. and Canadian electrical safety standards, while the
TÜV Rheinland CE Functional Safety Certificate demonstrates conformity with international functional safety
standards under the CE framework. We received both certifications in 2024.
(7) Our research and development expenditure (including our research and development expenses and investment
in R&D activities which was capitalized) amounted to RMB401.6 million, RMB504.1 million, RMB502.9
million, RMB349.6 million and RMB354.2 million in 2022, 2023, 2024 and the first nine months of 2024 and
2025, respectively, accounting for 10.3%, 10.8%, 12.5%, 10.4% and 9.3% of the total revenue for the same
periods, respectively.
(8) We had 1,029 R&D personnel as of September 30, 2025.
(9) During the Track Record Period, we led or participated in four projects supervised by the MIIT, three projects
supervised by the (Ministry of Science and Technology of the PRC (ኪҦஔ௅) and one
project supervised by the National Development and Reform Commission of the PRC (࢕
ึ).
SUMMARY
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OUR BUSINESS MILESTONES
Our leading market positions are echoed by the following milestones:
 Our history can be traced back to 1993.
 In 2001, we launched our first servo drive system, a device that receives motion
commands from the controller and regulates the power supplied to the servo motor,
enabling precise control of motion and output, laying the foundation for indigenous
motion-control technology.
 In 2010, we introduced our first industrial robot model.
 In 2015, our Shares became listed on the Shenzhen Stock Exchange (Stock Code:
002747.SZ).
 In 2017, we expanded into the high-end motion control industry with the acquisition
of Trio, a manufacturer based in the U.K specializing in motion controllers.
 In 2018, we commenced operations of our Nanjing robotic industrial park, featuring
China’s first intelligent production line where robots build robots.
 In 2020, we expanded into the global premium arc welding sector with the
acquisition of Cloos, a Germany-based company specializing in welding robotics
with an established international presence.
 In 2021, our shipment volume of industrial robots exceeded 10,000 units for the first
time.
 In 2024, we had ranked first among domestic manufacturers in China’s industrial
robotic solutions market for years, in terms of industrial robot shipment volume,
according to Frost & Sullivan.
 In 2025, we completed the construction of our manufacturing base in Poland,
marking a significant milestone in our effort to achieve global leadership in the
industrial robotic solutions market.
SUMMARY
–3–


--- page 14 ---
OUR PRODUCTS
ESTUN MotorsTRIO MotorsESTUN DriveTRIO Drive
Ultra-
heavy-
duty
SCARA
Variable Frequency
Drive
Bus-based
controller
General-purpose
controller IO Module HMI
Application
Scenarios Comprehensive Industrial
Automation Solutions
General-purpose
Industrial Robots
ElectronicsLithium
BatteryAutomotive Metal
Processing Packaging General
Industry
Automation Industrial Robots +
AI Digitalization Platform
Execution/
Sensing
Control
Drive
Heavy-
duty
Medium-
duty
Light-
duty
Cleanroom
Arc
welding
StampingPalletizing
Bending
High-
IP-rated
Photovoltaics
We mainly engage in the R&D, manufacturing and sales of industrial robots, intelligent
manufacturing systems and industrial robot workstations, along with core automation
components, motion control systems and motion control solutions. Our offerings span from
core automation components and motion control systems to complete robotic units and turnkey
production lines. This vertically integrated model ensures coordination across the value chain,
enhances product reliability and accelerates innovation cycles. Supported by our R&D
capabilities and ongoing investment in proprietary technologies, we are positioned to
contribute to the advancement of intelligent manufacturing and to provide automation solutions
that adapt to our customers’ needs.
The following table sets forth a breakdown of our revenue by business line for the periods
indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Industrial robots and
intelligent
manufacturing systems /H11182,838,648 73.1 3,594,821 77.3 3,029,103 75.6 2,600,585 77.2 3,138,297 82.5
– Industrial robots /H1118/H1118/H1118/H1118/H1118924,589 23.8 1,446,121 31.1 1,232,580 30.7 1,049,293 31.1 1,397,913 36.7
– Intelligent manufacturing
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118582,627 15.0 610,469 13.1 747,022 18.7 697,331 20.7 927,016 24.4
– Industrial robot
workstations /H1118/H1118/H1118/H1118/H1118/H11181,331,432 34.3 1,538,231 33.1 1,049,501 26.2 853,961 25.4 813,368 21.4
SUMMARY
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--- page 15 ---
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Core automation
components and motion
control systems /H1118/H1118/H1118/H1118/H11181,025,480 26.4 1,040,015 22.3 976,276 24.3 767,066 22.7 622,495 17.4
– Motion control systems /H1118 117,808 3.0 137,676 3.0 100,342 2.5 78,802 2.3 78,455 2.1
– Servo systems /H1118/H1118/H1118/H1118/H1118/H1118314,579 8.1 267,512 5.8 241,241 6.0 186,297 5.5 137,330 3.6
– Motion control solutions 593,093 15.3 634,827 13.5 634,693 15.8 501,967 14.9 446,710 11.7
Rentals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,651 0.5 17,113 0.4 3,393 0.1 2,623 0.1 2,778 0.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,880,779 100.0 4,651,949 100.0 4,008,772 100.0 3,370,274 100.0 3,803,570 100.0
Brand Portfolio
To support our international growth and meet the diverse needs of customers across
industries and regions, we have adopted a multi-brand strategy that leverages the strengths and
market positioning of each brand in our portfolio. This approach not only allows us to offer
highly specialized solutions but also enhances our ability to compete in a dynamic international
landscape: (i) “Estun”. We have been operating under the “Estun” brand since our
establishment and continuously strengthened its visibility and recognition in the industrial
robotic solutions market. “Estun” serves as the cornerstone of our business, offering a broad
lineup of robot models and selected core automation components and motion control systems;
(ii) “Cloos”. Acquired in 2020, “Cloos” significantly expands our capabilities in the industrial
welding sector, in particular, the technologies supporting medium-plate and thick-plate
welding process. Leveraging the brand’s established market presence, we continue to
strengthen our position in the welding automation market by delivering advanced robotic
systems and turnkey welding solutions; (iii) “Trio”. Acquired in 2017, “Trio” is a brand with
established international presence in motion control. By combining Trio’s advanced motion
controllers with our servo drive technologies, we have evolved from a core component
manufacturer into a provider of integrated motion control solutions. This enables us to deliver
more complex and high-value solutions tailored to top-tier customers across various industries;
and (iv) “M.A.i”. Acquired in 2017, “M.A.i” focuses on intelligent manufacturing systems and
strengthens our presence in smart manufacturing. It incorporates technologies aligned with
Germany’s Industry 4.0 standards, an initiative that promotes the digital transformation of
manufacturing through cyber-physical systems, real-time data and smart automation.
SUMMARY
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--- page 16 ---
Industrial Robots and Intelligent Manufacturing Systems
Industrial Robots
Industrial robots are programmable machines with multiple axes or degrees of freedom,
capable of independently performing repetitive, physically demanding, or hazardous tasks,
effectively replacing manual labor in industrial settings. Our industrial robot product matrix
has evolved into a full-fledged portfolio, structured around two major categories, including
general-purpose models and application-specific models.
The following table summarizes the industrial robots we currently offer:
Product line Payload
Number
of models
we offer
Major Downstream
Applications
General-purpose
industrial robots /H1118/H1118
The SCARA
Series (1)
3kg-50kg 12 Electronics, automotive,
lithium battery
Light-duty robots 4kg-35kg 16 Electronics, automotive,
metal processing,
photovoltaic
Medium-duty
robots
35kg-100kg 5 Automotive, metal
processing,
photovoltaic
Heavy-duty
robots
100kg-280kg 9 Automotive, lithium
battery, metal
processing,
construction materials
Ultra-heavy-duty
robots
280kg-1,000kg 8 Automotive, lithium
battery, metal
processing
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 50
Application-specific
industrial robots /H1118/H1118
Arc welding
robots
4kg-15kg 21 Automotive (including
electric vehicle), steel
structure, shipping
building
High-IP-rated
robots
(2)
30kg-170kg 9 Die casting, refractory
materials, grinding,
metallurgy
Cleanroom robots 7kg-10kg 6 Semiconductors, food
processing,
pharmaceuticals, flat
panel glass, precision
electronics
Palletizing robots 60kg-500kg 5 Packaging and logistics,
chemical industry,
food and beverage
industry
SUMMARY
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--- page 17 ---
Product line Payload
Number
of models
we offer
Major Downstream
Applications
Bending robots 45kg-130kg 3 Sheet metal
Stamping robots 15kg-150kg 2 Automotive, metal
processing
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 46
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 96
Notes:
(1) Representing selective compliance assembly robot arm (SCARA), a four-axis robot product line known
for high-speed, horizontal motion in pick-and-place and soldering applications.
(2) Representing robots featuring enhanced protection against dust and water, allowing them to operate
reliably in demanding industrial conditions.
General-Purpose Industrial Robots
Our general-purpose industrial robots include 12 four-axis models under the SCARA
Series, and 38 six-axis models. The SCARA Series is designed to provide stable performance
for smoother motion control and consistent speed, achieving a standard cycle time of 0.38
seconds to 0.43 seconds. With high-precision repeat positioning accuracy, they ensure
consistently accurate operations. Our six-axis general-purpose industrial robots are structured
in tiers based on payload, offering broad applicability across diverse industry verticals. We
possess technological advantages in the field of heavy-duty and ultra-heavy-duty industrial
robots, with expertise in structural design, precision motion control, and system stability under
extreme operating conditions.
Application-specific Industrial Robots
Our portfolio of application-specific industrial robots consists of 46 models tailored to
meet specialized industry demands. Designed with four-axis or six-axis configurations and
payloads of 4kg-500kg, these robots are built to perform consistently across a variety of
industrial scenarios where standard automation solutions may fall short.
Process-Specific Software Packages
Our process-specific software packages are specialized application software that enable
robots to perform specific industrial tasks, such as arc welding, spot welding, palletizing and
bending, with high precision and efficiency. They include pre-programmed logic, sensor
integration, quality control routines and task-specific operator interfaces that directly enhance
a robot’s ability to execute complex operations in real-world production environments.
SUMMARY
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--- page 18 ---
Intelligent Manufacturing Systems
Our intelligent manufacturing systems combine our proprietary industrial robots and core
components into turnkey product lines to complete specific tasks with minimal human
intervention. These systems are adaptable across a wide range of industries, including new
energy, automotive, die casting and electrical systems. Whether for battery module and pack
assembly, aluminum part casting, or electronic component integration, our manufacturing
systems can be customized to meet diverse process requirements and production goals.
Our intelligent manufacturing systems offer three core advantages: (i) synchronized
control featuring high-speed and high-precision; (ii) functionalities supported by the
integration of multiple technologies; and (iii) cost and efficiency optimization.
Industrial Robot Workstations
Our industrial robot workstations typically consist of one or more robots, a worktable, a
control system, and peripheral supporting equipment. They are execution units responsible for
carrying out a specific step in the manufacturing process. Our industrial robot workstations
focus on the execution of a specific operation, and are widely used in applications such as
welding, palletizing, grinding and polishing.
Core Automation Components and Motion Control Systems
Our core automation components and motion control systems deliver the foundational
technologies powering intelligent manufacturing. It centers around three major product lines:
(i) motion control systems, (ii) servo systems, and (iii) motion control solutions. We also
manufacture drive-control systems for our own industrial robots. These offerings enable
high-precision, high-speed and adaptable industrial automation across various application
scenarios.
For details, see “Business — Our Products.”
COMPETITIVE STRENGTHS
We believe the following strengths have contributed to our success and differentiated us
from our competitors:
 A leading industrial robotics company in China with a strong presence in global
niche markets;
 Establishing a multi-tiered R&D system to drive innovation and deep industry
integration through independent forward engineering;
 Accelerating global expansion to build sustainable international competitiveness;
SUMMARY
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--- page 19 ---
 Full industry chain capabilities covering “core components + fully assembled robot
+ solutions” to meet one-stop service needs;
 “V ertical + horizontal” robotics-based solutions empowering all industries:
collaborating with China’s emerging industry leaders to usher in the era of extreme
manufacturing;
 Harnessing data and application advantages to accelerate the adoption of robotics-
based AI across industrial scenarios; and
 An experienced management team with global perspective.
For details, see “Business — Competitive Strengths.”
OUR STRATEGIES
With the goal of building a world-renowned brand for Chinese robotics, we are committed
to developing a deeply integrated global network that spans R&D, manufacturing, delivery, and
service. By advancing the integration of robotics and AI technologies, we aim to expand the
application scope of industrial robots and unlock new market opportunities. Leveraging our full
value chain advantages in the industrial robotics sector, we plan to build factories centered
around robotics and develop open platforms to foster a collaborative and innovative robotics
ecosystem:
 From China to the world: building a global brand for Chinese robotics;
 Unlocking growth opportunities through integration between robotics and AI
technologies and business model innovation, and accelerating the deployment of
embodied Intelligence in industrial scenarios;
 Expanding intelligent factory solutions for discrete manufacturing through robotic
automation and industrial control software; and
 Building an open platform and a collaborative robotics ecosystem.
For details, see “Business — Our Strategies.”
CORE TECHNOLOGIES
We constantly redefine intelligent manufacturing by combining robot hardware with a
comprehensive digital ecosystem. Our expertise ranges from mechanical designs engineered
for optimal payload and precision to software solutions that enable remote monitoring,
predictive maintenance, and real-time process tuning. Leveraging an in-house control
architecture alongside a scalable IIoT framework, we guarantee each robot delivers stable and
reliable performance while equipping customers with actionable data insights.
SUMMARY
–9–


--- page 20 ---
Our General-Purpose Motion Control Technology
Advanced Servo Systems
We are committed to independently developing advanced servo systems, with full-stack
capabilities across the design and manufacturing of core components, including encoders,
servo motors, and servo drives. Our servo motors adopt a multi-objective design approach that
emphasizes on reliability, high power density, high overload capacity, low torque ripple, which
ensures smooth and stable torque output for precise motion control, and energy efficiency.
General-Purpose Motion Controller Technology
Our general-purpose motion controllers benefit from advancements in computer hardware
and system technologies, as well as strong support from a mature domestic software and
hardware supply chain.
Our Robotic Technologies
Heavy-Duty Robot Dual-Drive Technology
We pioneered a “dual-motor & dual-reducer” architecture, replacing a single imported
high-power reducer with two synchronized mid-power domestic reducers. Instead of relying on
a single high-performance reducer, our innovative parallel-drive design uses two synchronized
drives to achieve a 1,000kg payload through precise torque distribution and motion
coordination. By adopting such an architecture, we can significantly reduce reliance on
importing high-power reducers from overseas suppliers, which are often associated with high
costs, extended lead times and uncertainties arising from evolving geopolitical dynamics.
Robot Functional Safety Technology
Navigating the complex landscape of international safety regulations, we became the first
Chinese robotics manufacturer to achieve TÜV Rheinland certification under ISO 10218, as
confirmed by Frost & Sullivan. Our system architecture meets the most demanding criteria,
executing emergency stops and limiting motion-path deviations, ensuring that every unit
complies with the strictest global benchmarks.
Core Robot Controller Technology
In the “brain” of the robot, our “next-generation” controller achieves a level of
performance comparable to foreign brand systems in both dynamic precision and collaborative
efficiency. Built on an industrial high-level language, and an open and modular architecture,
it integrates refined dynamics algorithms, vibration suppression, and flexible model calibration
to boost cycle speed and positioning accuracy.
SUMMARY
–1 0–


--- page 21 ---
Our Digital Platform Technologies
To break through the efficiency bottlenecks of traditional industrial maintenance and
unlock the full value of equipment data, we have built a dual-track service model centered on
our E-Noesis and E-Care platforms. E-Noesis platform is our digital cloud platform. As our
intelligence hub, E-Noesis platform harnesses big data and digital-twin technology to manage
robots throughout their lifecycle. By unifying operational metrics, process parameters and
digital information, it dissolves shop-floor data silos. E-Care platform is our remote
maintenance platform that combines IoT connectivity and cloud computing to deliver
end-to-end remote support across a machine’s entire lifecycle.
Our AI Technologies
Our Architecture for Robotics-based AI
We have developed a flexible control system that allows our robots to work with AI. It
can run on local computers, near the machines for fast response, or in the cloud for large-scale
AI training. Using a virtual controller engine, engineers can simulate and fine-tune robot
actions digitally before applying them in the real world, which reduces costly trial-and-error
and speeds up deployment.
AI Combined with Robotics
By embedding machine vision, multi-modal sensing, voice recognition, and
reinforcement learning, our robots can perceive environments, adapt in real time, and improve
continuously. This makes them more intelligent, easier to operate, and capable of handling
complex, variable tasks.
Expanding Industrial Applications
Leveraging our large installed base and industrial knowledge graph, we provide
teaching-free, vision-based systems and no-code programming tools that lower adoption
barriers. These innovations expand automation into industries previously difficult to serve,
driving the transition to intelligent manufacturing.
For details, see “Business — Core Technologies.”
MANUFACTURING
We have established a robust and scalable production system designed to ensure full
control over key components and maintain operational independence. By integrating advanced
supply chain management practices across quality, delivery, cost and logistics, we consistently
deliver high-quality products with speed and cost-efficiency. Depending on product delivery
requirements, we adopt a hybrid production strategy combining make-to-order and make-to-
stock models to ensure timely fulfillment and operational flexibility.
For details, see “Business — Manufacturing.”
SUMMARY
–1 1–


--- page 22 ---
OUR SUPPLIERS
We source key components and equipment critical to our production. Our procurement
primarily includes electronic control systems, reducers, motors and other electronic devices.
For the years ended December 31, 2022, 2023 and 2024 and the nine months ended
September 30, 2025, the aggregate purchases from our top five suppliers in each period during
the Track Record Period amounted to RMB385.9 million, RMB554.5 million, RMB516.2
million and RMB343.9 million, which accounted for 15.0%, 19.2%, 18.3% and 19.0% of our
total purchases, respectively. For the same periods, purchases from our largest supplier in each
period during the Track Record Period amounted to RMB119.2 million, RMB160.0 million,
RMB198.5 million and RMB156.7 million, which accounted for 4.6%, 5.5%, 7.0% and 8.6%
of our total purchases, respectively. For details, see “Business — Our Suppliers.”
OUR CUSTOMERS
Our customers mainly comprise (i) customers from our direct sales channel, including
manufacturers in automotive, photovoltaic, lithium battery, electronics, metal processing and
construction materials, and (ii) our distributors.
For the years ended December 31, 2022, 2023 and 2024 and the nine months ended
September 30, 2025, the aggregate revenue generated from our five largest customers in each
period during the Track Record Period amounted to RMB637.1 million, RMB915.3 million,
RMB1,006.8 million and RMB1,413.8 million, respectively, which accounted for 16.4%,
19.7%, 25.1% and 37.2% of our total revenue, respectively. For the same periods, revenue from
the largest customer amounted to RMB213.8 million, RMB376.1 million, RMB376.6 million
and RMB685.0 million, respectively, which accounted for 5.5%, 8.1%, 9.4% and 18.0% of our
total revenue, respectively.
SALES AND MARKETING
As of September 30, 2025, our global sales force stands at 763 professionals, strategically
deployed across both domestic and international markets. This team drives our revenue engine
through a balanced and proactive strategy.
We employ a dual-track sales strategy combining direct sales and a distribution network.
Our direct sales team, working closely with our technical and process engineering departments,
spearheads customer engagement for complex needs. We collaborate deeply with the client,
leveraging our portfolio of modular products to craft tailored and systematic solutions. Once
our technical solution gains approval, our sales team delivers a competitive commercial offer
backed by robust cost control, securing the order and initiating project execution.
We cooperate with distributors to enhance our market reach and operational efficiency. By
partnering with distributors, we are able to leverage their deep knowledge of local markets,
established customer networks and sales expertise, factors that are critical for achieving
SUMMARY
–1 2–


--- page 23 ---
broader geographical penetration. This strategy allows us to scale effectively without bearing
the substantial costs typically associated with building and managing a large direct sales force.
According to Frost & Sullivan, this approach aligns with industry practices commonly adopted
by companies focused on the R&D and commercialization of robotic technologies. While we
maintain a strong direct sales capability, our distributor partnerships are particularly valuable
in promoting standard automation components and control systems, enabling us to serve a
wider customer base through their localized resources and relationships.
For details, see “Business — Sales and Marketing.”
RISK FACTORS
Our business and the Global Offering involve certain risks, including (i) risks relating to
our industry and business; (ii) risks relating to financial, accounting and tax matters; (iii) risks
relating to our operations; (iv) risks relating to doing business in the jurisdictions where we
operate; and (v) risks relating to the Global Offering. Some of the major risks we face include,
but not limited to:
 The demand in the end markets of our industry is constantly changing. If we are
unable to respond effectively to these changes, our business, results of operations
and financial condition will be materially and adversely affected;
 Our global operations expose us to risks and complexities across multiple
jurisdictions;
 We may not be able to successfully compete in the global industrial robotic solutions
market;
 Developments in alternative technologies and products may adversely affect the
demand for our industrial robotics products; and
 Our investments and acquisitions may not achieve the intended benefits and may
expose us to various operational, financial, and regulatory risks.
COMPETITION
The global industrial robotic solutions market has experienced rapid growth. The market
size of the global industrial robotic solutions market, in terms of revenue, increased from
USD14.7 billion in 2020 to USD25.4 billion in 2024, representing a CAGR of 14.6%. Driven
by increasing labor costs, technological innovation and higher requirements on the
sustainability and stability of manufacturing, the global industrial robotic solutions market is
estimated to further increase, reaching USD51.8 billion by 2029, representing a CAGR of
15.4% between 2024 and 2029. See “Industry Overview” for details.
SUMMARY
–1 3–


--- page 24 ---
SUMMARY OF KEY FINANCIAL INFORMATION
Summary of the Consolidated Statements of Profit or Loss
The following table sets forth key items of our consolidated statements of profit or loss
for the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,880,779 4,651,949 4,008,772 3,370,274 3,803,570
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,604,561) (3,196,854) (2,874,742) (2,364,083) (2,732,855)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,276,218 1,455,095 1,134,030 1,006,191 1,070,715
Other net income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,982 139,150 123,035 107,798 63,208
Selling expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(292,807) (399,331) (445,689) (324,136) (308,396)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(416,562) (466,358) (550,149) (381,748) (330,369)
Research and development expenses /H1118/H1118(307,580) (388,468) (442,233) (306,610) (318,511)
(Provision for)/reversal of impairment
loss on trade receivables and contract
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(34,888) (29,579) (62,689) (21,603) 4,813
Impairment loss on intangible assets
and goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (360,467) – –
Profit/(loss) from operations /H1118/H1118/H1118/H1118/H1118/H1118361,363 310,509 (604,162) 79,892 181,460
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(93,990) (130,538) (154,193) (103,909) (119,487)
Share of profits less losses of
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,765) (12,434) (17,169) (12,875) (2,143)
Profit/(loss) before taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118263,608 167,537 (775,524) (36,892) 59,830
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(80,049) (33,910) (42,161) (25,267) (30,130)
Profit/(loss) for the year/period /H1118/H1118/H1118/H1118183,559 133,627 (817,685) (62,159) 29,700
Attributable to:
Equity shareholders of the Company /H1118/H1118 166,780 135,672 (810,929) (67,119) 25,372
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,779 (2,045) (6,756) 4,960 4,328
Fluctuations in our net profit/loss from 2022 to 2024 were driven by a lower gross profit
margin and increased operational expenses. The rise in selling, administrative, and research
and development expenses was principally due to strategic investments in our workforce,
underscoring our commitment to long-term growth by attracting and retaining top talent. In
2024, we recognized a loss for the year of RMB817.7 million, which was attributable to
decreased revenue and gross profit margin, impairment losses on intangible assets and goodwill
and increased operating expenses. The impairment losses on intangible assets and goodwill
SUMMARY
–1 4–


--- page 25 ---
recorded for the year ended December 31, 2024 were primarily attributable to four subsidiaries:
(i) Prex, (ii) Trio Motion, (iii) Carl Cloos, and (iv) Y angzhou Shuguang. The industries in
which these subsidiaries’ customers operate primarily include construction machinery, heavy
industry, traditional automotive industry and packaging industry. In 2024, these industries were
affected by a combination of cyclical factors, such as a slowdown in global economic growth
that constrained capital expenditure, softer activity in the real estate sector, and reduced
demand in the traditional automotive sector due to the accelerating transition to new energy
vehicles, which in turn led to reduced order intake. As a result, the performance of these
subsidiaries fell short of expectations. For details, see “Financial Information — Discussion of
certain key items from our consolidated statements of financial position — Goodwill.” In the
first nine months of 2025, we returned to profitability with profit for the period of RMB29.7
million, a significant improvement over the loss for the period of RMB62.2 million in the same
period of 2024, driven by improved operational efficiency. For details, see “Business —
Deteriorating Financial Performance.”
For other details of our consolidated statements of profit or loss, see “Financial
Information — Description of Key Items of Consolidated Statements of Profit or Loss.”
Summary of the Consolidated Statements of Financial Position
The following table sets forth the selected information from our consolidated statements
of financial position as of the dates indicated, which have been extracted from our audited
consolidated financial statements included in Appendix I to this prospectus:
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Total non-current assets /H1118/H1118/H11183,766,909 4,388,762 4,077,144 4,278,810
Total current assets /H1118/H1118/H1118/H1118/H1118/H11184,483,734 5,692,737 6,063,755 5,854,623
Total current liabilities /H1118/H1118/H1118/H11183,317,857 5,024,593 6,012,332 6,025,315
Net current
assets/(liabilities) /H1118/H1118/H1118/H1118/H1118/H11181,165,877 668,144 51,423 (170,692)
Total assets less current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,932,786 5,056,906 4,128,567 4,108,118
Total non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,862,880 2,234,892 2,235,865 2,124,369
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,069,906 2,822,014 1,892,702 1,983,749
We recorded net current liabilities of RMB170.7 million as of September 30, 2025, as
compared to net current assets of RMB51.4 million as of December 31, 2024, primarily due to
(i) a decrease in inventories of RMB274.8 million mainly due to deceases in finished goods and
goods delivered to customers; (ii) a decrease in financial assets measured at FVPL of
SUMMARY
–1 5–


--- page 26 ---
RMB218.8 million due to redemption of wealth management products to repay our bank loans
and the disposal of our equity interest in Y angzhou Shuguang; and (iii) an increase in trade and
other payables of RMB102.9 million mainly resulting from longer credit terms granted to us
by our suppliers, which were partially offset by (i) an increase in trade and other receivables
of RMB254.9 million, primarily driven by higher trade volumes with certain automotive
customers who had relatively long payment cycles, and (ii) a decrease in bank loans and other
borrowings of RMB117.6 million.
Our net current assets decreased from RMB668.1 million as of December 31, 2023, to
RMB51.4 million as of December 31, 2024, primarily as a result of our loss for the year of
RMB817.7 million in 2024, which led to increased reliance on external financing and working
capital support. Specifically, such decrease was mainly driven by (i) an increase in bank loans
and other borrowings of RMB524.8 million to support our working capital needs; (ii) an
increase in trade and other payables of RMB256.1 million, primarily because we successfully
secured more favorable payment terms with certain suppliers by leveraging our economies of
scale; and (iii) an increase in contract liabilities of RMB207.5 million, because of increased
prepayments from customers, partially offset by an increase in inventories of RMB380.8
million.
Our net current assets decreased from RMB1,165.9 million as of December 31, 2022, to
RMB668.1 million as of December 31, 2023, primarily due to (i) an increase in bank loans and
other borrowings of RMB951.3 million to finance our acquisition of remaining equity interests
in certain subsidiaries and our investment in construction projects to enhance our
manufacturing capabilities; (ii) an increase in trade and other payables of RMB716.8 million,
primarily due to increased credit-based purchases, enabled by our enhanced bargaining power
stemming from economies of scale; and (iii) a decrease in financial assets measured at FVPL
of RMB142.3 million, primarily because we gradually reduced our investments in wealth
management products to prioritize liquidity and meet our working capital needs, partially
offset by (i) an increase in trade and other receivables of RMB534.0 million, primarily due to
our growing sales; and (ii) an increase in cash and cash equivalents of RMB527.9 million.
Our net assets increased from RMB1,892.7 million as of December 31, 2024 to
RMB1,983.7 million as of September 30, 2025, primarily driven by the recognition of a profit
for the period of RMB29.7 million and other comprehensive income of RMB112.4 million,
partially offset by the decrease in non-controlling interests of RMB62.6 million during the nine
months ended 30 September 2025 due to the disposal of Y angzhou Shuguang.
Our net assets decreased from RMB2,822.0 million as of December 31, 2023, to
RMB1,892.7 million as of December 31, 2024, primarily driven by (i) the recognition of a loss
for the year of RMB817.7 million and other comprehensive income of RMB57.6 million, (ii)
dividends approved in respect of the previous year of RMB52.0 million, and (iii) appropriation
of dividends to non-controlling shareholders of subsidiaries of RMB21.6 million, partially
offset by equity-settled share-based transactions, which were related to our adoption of an
employee share reward scheme in 2022, amounting to RMB10.5 million.
SUMMARY
–1 6–


--- page 27 ---
Our net assets decreased from RMB3,069.9 million as of December 31, 2022 to
RMB2,822.0 million as of December 31, 2023, primarily attributable to (i) our acquisition of
non-controlling interests of RMB401.2 million, mainly relating to our investment in M.A.i and
Carl Cloos, and (ii) dividends approved in respect of the previous year of RMB26.0 million,
partially offset by the recognition of a profit for the year of RMB133.6 million and other
comprehensive income of RMB29.0 million, and equity-settled share-based transactions of
RMB19.4 million.
Our Inventory/Trade and Bill Receivables/Trade and Bill Payables Turnover Days
Our inventory turnover days remained relatively stable at 138 and 141 days in 2022 and
2023, respectively. Our inventory turnover days further increased to 194 days in 2024,
primarily driven by our proactive strategy of maintaining higher inventory levels of certain
general-purpose models to promptly meet the needs of our key account customers and ensure
operational readiness. Our inventory turnover days decreased to 158 days in the first nine
months of 2025, primarily because we strengthened our make-to-order production model and
enhanced the management of finished goods inventory.
Our trade and bill receivables turnover days increased from 135 days in 2022 to 160 days
in 2023, and further to 215 days in 2024, as the growth in trade and bill receivables outpaced
the increase in revenue, which was primarily attributable to (i) our decision to offer more
favorable credit terms to key account customers as part of our strategy to enhance market
penetration; and (ii) the prolonged payment cycles of certain customers, particularly those in
the photovoltaic industry. Our trade and bill receivables turnover days decreased to 180 days
in the first nine months of 2025, primarily attributable to our enhanced measures in payment
collection and proactive approach in shortening payment cycles of certain customers.
Our trade and bill payables turnover days increased from 136 days in 2022 to 177 days
in 2023, and further to 248 days in 2024, primarily driven by a rise in credit-based purchases
and our ability to secure more favorable payment terms from suppliers, facilitated by our
strengthened bargaining power resulting from economies of scale. Our trade and bill payables
turnover days decreased to 212 days in the first nine months of 2025, mainly due to our
proactive approach in accelerating the payment process with our suppliers to ensure our
procurement can timely support our manufacturing process and to support the sustainable
development of our supply chain.
Our Financial Ratios
The following table sets forth certain of our key financial ratios as of the dates or for the
periods indicated:
Y ear ended/As of December 31,
Nine months ended/
As of September 30,
2022 2023 2024 2024 2025
Gross profit margin (1) /H1118/H1118/H1118/H111832.9% 31.3% 28.3% 29.9% 28.2%
Current ratio (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.35 1.13 1.01 N/A 0.97
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.01 0.87 0.72 N/A 0.73
Debt-to-equity ratio (4) /H1118/H1118/H1118/H11180.96 1.51 2.54 N/A 2.28
Cash conversion cycle (5) /H1118/H1118 137 124 161 N/A 126
SUMMARY
–1 7–


--- page 28 ---
Notes:
(1) Gross profit margin equals gross profit divided by total revenue for the period.
(2) Current ratio is calculated based on total current assets divided by total current liabilities as of the dates
indicated.
(3) Quick ratio is calculated based on total current assets less inventories divided by total current liabilities
as of the dates indicated.
(4) Debt-to-equity ratio is calculated as indebtedness divided by total equity as of the same date.
Indebtedness represents bank loans and other borrowings, as well as lease liabilities. The increases in
our debt-to-equity ratio throughout the Track Record Period were primarily due to additional borrowings
raised to fund our capital expenditures and acquisitions of non-controlling interests in certain
subsidiaries.
(5) Cash conversion cycle is calculated using the inventory turnover days in each period plus the trade and
bill receivables turnover days in the respective period minus the trade and bill payables turnover days
in the respective period.
For details, see “Financial Information — Key Financial Ratios.”
Summary of the Consolidated Statements of Cash Flows
The following table sets forth our consolidated statements of cash flows for the periods
indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Net cash generated from/(used in)
operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,482 714 (104,035) (531,056) 300,061
Net cash (used in)/generated from
investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(262,041) (678,175) (192,494) (230,765) 23,967
Net cash generated from/(used in)
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118253,870 1,200,946 288,729 610,868 (399,429)
Net increase/(decrease) in cash and
cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,311 523,485 (7,800) (150,953) (75,401)
Cash and cash equivalents at
the beginning of year/period /H1118/H1118/H1118/H1118/H1118/H1118652,937 668,322 1,196,253 1,196,253 1,181,104
Effect for foreign exchange rate
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,074 4,446 (7,349) 191 16,263
Cash and cash equivalents at
the end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118668,322 1,196,253 1,181,104 1,045,491 1,121,966
SUMMARY
–1 8–


--- page 29 ---
Net cash generated from operating activities in the nine months ended September 30,
2025 amounted to RMB300.1 million, primarily comprising a profit before taxation of
RMB59.8 million, adjusted for certain non-cash and non-operating items. These adjustments
primarily included (i) finance costs of RMB119.5 million, (ii) depreciation of property, plant
and equipment of RMB77.4 million; and (iii) amortisation of intangible assets of RMB46.8
million. The amount was further adjusted by changes in working capital, which primarily
included: (i) a decrease in inventories of RMB248.2 million; and (ii) an increase in trade and
other payables of RMB61.3 million, partially offset by (i) an increase in trade and other
receivables of RMB277.8 million.
Net cash used in operating activities in 2024 amounted to RMB104.0 million, primarily
comprising a loss before taxation of RMB775.5 million, adjusted for certain non-cash and
non-operating items. These adjustments primarily included (i) impairment loss on intangible
assets and goodwill of RMB360.5 million; (ii) finance costs of RMB154.2 million; and (iii)
depreciation of property, plant and equipment of RMB93.5 million. The amount was further
adjusted by changes in working capital, which primarily included: (i) an increase in trade and
other payables of RMB200.1 million; and (ii) an increase in contract liabilities of RMB197.7
million, partially offset by (i) an increase in inventories of RMB395.2 million; and (ii) an
increase in trade and other receivables of RMB173.3 million.
Net cash generated from operating activities in 2023 was RMB714 thousand, primarily
consisting of profit before taxation of RMB167.5 million, adjusted for certain non-cash and
non-operating items. These adjustments primarily included: (i) finance costs of RMB130.5
million; (ii) depreciation of property, plant and equipment of RMB71.4 million; and (iii)
amortization of intangible assets of RMB43.7 million. The amount was further adjusted by
changes in working capital, which primarily included: (i) an increase in trade and other
receivables of RMB654.2 million; and (ii) an increase in inventories of RMB235.4 million,
partially offset by an increase in trade and other payables of RMB533.4 million.
Net cash generated from operating activities in 2022 totaled RMB17.5 million, primarily
consisting of profit before taxation of RMB263.6 million, adjusted for certain non-cash and
non-operating items. These adjustments primarily included: (i) finance costs of RMB94.0
million; (ii) depreciation of property, plant and equipment of RMB62.7 million; and (iii)
realised and unrealised gains on other financial assets measured at FVPL of RMB52.8 million.
The amount was further adjusted by changes in working capital, which primarily included: (i)
an increase in trade and other receivables of RMB786.9 million; and (ii) an increase in
inventories of RMB376.5 million, partially offset by an increase in trade and other payables of
RMB747.2 million.
For details, see “Financial Information — Liquidity and Capital Resources.”
SUMMARY
–1 9–


--- page 30 ---
Deteriorating Financial Performance in 2024 and Measures for Sustainable Development
The Company’s demand is driven by customers’ capital expenditure, which fluctuates
with macroeconomic conditions. Unlike consumables, its products are purchased as part of
discrete investment projects, making results sensitive to the manufacturing investment cycle.
In 2024, we faced a challenging global economic downturn and a broad-based reduction in
investment activity across most of the downstream sectors to which we primarily sells,
including construction machinery, heavy industry and photovoltaics. These factors were the
primary contributors to the deterioration of our financial results in 2024, including declines in
revenue, as well as a net loss and net operating cash outflow.
We have taken measures to improve our financial performance, including measures to
boost revenue growth, manage our cost of sales and improve operational efficiency. In the first
nine months of 2025, our business gradually recovered from the temporary downturn in 2024.
Our revenue increased by 12.9% from RMB3,370.3 million to RMB3,803.6 million, and gross
profit increased by 6.4% from RMB1,006.2 million to RMB1,070.7 million, from the first nine
months of 2024 to the first nine months of 2025. We recorded profit for the period of RMB29.7
million in the first nine months of 2025, as compared to loss for the period of RMB62.2 million
in the first nine months of 2024.
For details, see “Business — Deteriorating Financial Performance.”
OUR CONTROLLING SHAREHOLDERS GROUP
The Controlling Shareholders Group, including Mr. Wu, Mr. Wu Kan (son of Mr. Wu),
Ms. Liu Fang (ٹspouse of Mr. Wu) and Nanjing Primest. As of the Latest Practicable
Date, the Controlling Shareholders Group was able to exercise approximately 42.15% voting
rights in our Company, comprising of (i) 110,996,700 Shares (representing approximately
12.74% of the issued Share capital of our Company) held directly by Mr. Wu, (ii) 254,894,742
Shares (representing approximately 29.26% of the issued Share capital of our Company) held
by Nanjing Primest, which is a limited liability company established under the laws of the PRC
and is held as to 96.89%, 3.00% and 0.11% by Mr. Wu, Mr. Wu Kan and Ms. Liu Fang,
respectively and (iii) 1,263,033 Shares (representing approximately 0.15% of the issued Share
capital of our Company) held directly by Mr. Wu Kan.
Immediately upon completion of the Global Offering (assuming the Over-allotment
Option is not exercised and options granted under the 2025 Share Option Scheme are not
exercised), the Controlling Shareholders Group will be entitled to exercise approximately
37.94% voting rights in our Company. Therefore, the Controlling Shareholders Group will
continue to be our Controlling Shareholders Group for the purpose of the Listing Rules.
SUMMARY
–2 0–


--- page 31 ---
LISTING ON THE SHENZHEN STOCK EXCHANGE
Since 2015, our Company has been listed on the Shenzhen Stock Exchange. As of the
Latest Practicable Date, our Directors confirmed that we had no instances of material
non-compliance with the rules of the Shenzhen Stock Exchange and other applicable securities
laws and regulations of the PRC in any material respects, and, to the best knowledge of our
Directors having made all reasonable enquiries, there was no material matter that should be
brought to the investors’ attention in relation to our compliance record on the Shenzhen Stock
Exchange. Our PRC Legal Advisor is of the view that the confirmation of our Directors above
with regard to our compliance records is accurate and reasonable. Based on the independent
due diligence conducted by the Sole Sponsor, nothing has come to the Sole Sponsor’s attention
that would cause them to disagree with our Directors’ confirmation with regard to the
compliance records of the Company on the Shenzhen Stock Exchange.
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
on the basis that, among other things, we satisfy the market capitalization/revenue test under
Rule 8.05(3) of the Listing Rules with reference to: (i) our revenue of RMB4,008.8 million
(equivalent to approximately HK$4,515.1 million) in the financial year ended December 31,
2024 which exceeds HK$500 million, and (ii) our expected market capitalization at the time
of Listing, which, based on the Offer Price of HK$16.18 per Offer Share, being the midpoint
of the indicative price range stated in this prospectus, exceeds HK$4 billion.
PROFIT ESTIMATE FOR THE YEAR ENDED DECEMBER 31, 2025
Our Directors have prepared the estimate of the consolidated profit attributable to equity
shareholders of our Company for the year ended December 31, 2025 (the “ Profit Estimate ”)
on the basis of the audited consolidated results of our Group for the nine months ended
September 30, 2025 and the unaudited consolidated results based on the management accounts
of the Group for the two months ended November 30, 2025, and an estimate of the consolidated
results of our Group for the remaining one month ended December 31, 2025. The Profit
Estimate has been prepared on the basis of the accounting policies consistent in all material
respects with those currently adopted by our Group as summarized in the Accountants’ Report
as set out in Appendix I to this prospectus. See “Appendix IA — Profit Estimate” in this
prospectus for further details.
Estimated consolidated profit attributable to
equity shareholders of the Company for the
year ended December 31, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Not less than
RMB35.0 million
SUMMARY
–2 1–


--- page 32 ---
GLOBAL OFFERING STATISTICS
The statistics in the following table are based on the assumptions that (i) the Global
Offering has been completed and 96,780,000 H Shares are newly issued in the Global Offering,
(ii) the Over-allotment Option for the Global Offering is not exercised, and (iii) 967,798,453
Shares are issued and outstanding following the completion of the Global Offering:
Based on an Offer
Price of HK$15.36
per Offer Share
Based on an Offer
Price of HK$17.00
per Offer Share
Market capitalization (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$25,304
million
HK$25,462
million
– Market capitalization of our A Shares (2) /H1118/H1118/H1118/H1118
HK$23,817
million
HK$23,817
million
– Market capitalization of our H Shares (3) /H1118/H1118/H1118/H1118
HK$1,487
million
HK$1,645
million
Unaudited pro forma adjusted consolidated net
tangible assets attributable to equity
shareholders of our Company per Share
(4) /H1118/H1118
HK$1.86
(RMB1.65)
HK$2.02
(RMB1.79)
Notes:
(1) The calculation of market capitalization is based on the average closing price of the A Shares of
RMB24.28 per Share for the five business days immediately preceding the Latest Practicable Date and
the total number of 967,798,453 Shares in issue immediately following completion of the Global
Offering, and without taking into account any Shares that may be issued upon exercise of the
Over-allotment Option or options granted under the 2025 Share Option Scheme.
(2) The calculation of market capitalization of our A Shares is based on the average closing price of the A
Shares of RMB24.28 per Share for the five business days immediately preceding the Latest Practicable
Date and the total number of 871,018,453 A Shares in issue as of the Latest Practicable Date.
(3) The calculation of market capitalization of our H Shares is based on 96,780,000 H Shares expected to
be issued in the Global Offering, assuming the Over-allotment Option is not exercised.
(4) The unaudited pro forma adjusted consolidated net tangible assets attributable to equity shareholders of
our Company per Share is arrived at after the above adjustments and on the basis that a total of
963,798,453 shares (excluding the 4,000,000 treasury shares as disclosed in Note 31(d) to the
Accountants’ Report as set out in Appendix I to this prospectus) in issue assuming that the Global
Offering had been completed on September 30, 2025 without taking into account of any shares which
may be issued upon the exercise of the Over-allotment Option and any shares to be issued pursuant to
the share option scheme and share reward scheme. No adjustment has been made to reflect any trading
result or other transactions of our Group entered into subsequent to September 30, 2025, including but
not limited to the disposal of remaining 48% equity interest in Y angzhou Shuguang completed in
November 2025. Had such disposal been completed on September 30, 2025, the unaudited pro forma
adjusted consolidated net tangible assets attributable to equity shareholders of our Company would have
increased by approximately RMB11.5 million and the unaudited pro forma adjusted consolidated net
tangible assets attributable to equity shareholders of our Company per Share would have been increased
by RMB0.01 or HK$0.02.
SUMMARY
–2 2–


--- page 33 ---
For the calculation of the unaudited pro forma adjusted consolidated net tangible assets
per Share, see “Unaudited Pro Forma Statement of Adjusted Net Tangible Assets” in Appendix
II to this prospectus.
DIVIDENDS AND DIVIDEND POLICY
During the Track Record Period, our dividends paid to equity shareholders of our
Company were RMB25.8 million, RMB26.0 million, RMB52.0 million and nil in 2022, 2023,
2024 and the first nine months of 2025, respectively, representing dividend payout ratios,
calculated based on dividends paid to equity shareholders of our Company in 2023, 2024 and
the first nine months of 2025 divided by profit or loss for the year/period attributable to equity
shareholders of our Company for 2022, 2023 and 2024 in a given period and multiplied by
100%, of 15.6%, 38.3% and nil, respectively. On April 29, 2023, our Board of Directors
approved our “Shareholder Return Plan for the Next Three Y ears (2023-2025)” (the
“Shareholder Return Plan ”). According to our Shareholder Return Plan, and subject to
relevant PRC laws and applicable regulations, and our Articles of Association, after making up
for any losses (if any), allocating statutory reserve funds, and allocating discretionary reserve
funds (if necessary), from the year of 2023 to 2025, except for special circumstances, we target
to distribute cash dividends to our Shareholders no less than 20% of our distributable profit for
the year if our Company is profitable for the year and has a positive cumulative undistributed
profit. The aforementioned special circumstances include: (i) the issuance of accountants’
report with a qualified opinion by the Company’s reporting accountants, or (ii) the occurrence
of significant investments or capital expenditure events, representing any investments or asset
acquisitions with cumulative expenditures reaching or exceeding RMB50.0 million or 30% of
our net assets based on the audited financial statements from the latest financial year. We
cannot assure you that we will be able to distribute dividends of the above amount or any
amount, or at all, in any year. The declaration and payment of dividends may also be limited
by legal restrictions and by loan or other agreements that we have entered into or may enter
into in the future. See “Risk Factors — Risks Relating to the Global Offering — 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.”
According to applicable PRC laws and regulations, including the PRC Company Law
() and the No. 3 Guideline for the Supervision of Listed Companies
– Cash Dividend Distribution of Listed Companies (2025 Revision) (ˏୋ3
໮–ߎ2025)), our Articles of Association and our dividend policy,
subject to the fulfillment of the conditions for cash dividends, the annual cash dividends of our
Company shall account for no less than 20% of the profits realized by our Company in that year
(calculated in accordance with PRC GAAP) which are available for distribution and
attributable to the shareholders. Future profit distributions may be carried out in the form of
cash dividends or stock dividends, or a combination of cash dividends and stock dividends.
Any proposed distribution of dividends is subject to the discretion of our Board and the
approval at our Shareholders’ meetings. Our Board may recommend a distribution of dividends
in the future after taking into account our results of operations, financial condition, operating
requirements, capital requirements, shareholders’ interests and any other conditions that our
Board may deem relevant. According to PRC Company Law and our dividend policy, where the
SUMMARY
–2 3–


--- page 34 ---
accumulative amount of the company’s statutory reserve is not sufficient to cover losses from
the previous year, the current year’s profits shall first be used to make up for the losses before
the statutory reserve is accrued according as legally required; after a company has made up its
losses, the residual after-tax profits and accrued reserve shall be distributed by the company (in
the case of a joint stock limited company) in proportion to the shares held by its shareholders,
except as otherwise provided for in the company’s articles of association. Therefore, our PRC
Legal Advisors are of the view that we can pay dividend despite accumulated losses except
when the accumulative amount of our statutory reserve is not sufficient to cover accumulated
losses, in which case the current year’s profits shall first be used to make up for the losses.
FUTURE PLANS AND USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$1,486.0 million, after deducting underwriting commissions, fees and estimated expenses
payable by us in connection with the Global Offering, assuming no Over-allotment Option is
exercised, and an Offer Price of HK$16.18 per H Share, being the midpoint of the indicative
price range stated in this prospectus.
In line with our strategies, we currently intend to apply these net proceeds for the
following purposes, subject to changes in light of our evolving business needs and changing
market conditions: (i) approximately 25.0% of the net proceeds, or approximately HK$371.5
million, will be allocated to the expansion of our global production capabilities; (ii)
approximately 25.0% of the net proceeds, or approximately HK$371.5 million, will be
allocated to the selective pursuit of strategic alliances, investments, and acquisition
opportunities, both domestically and internationally, within the upstream and downstream
segments of the industrial robotics industry; (iii) approximately 20.0% of the net proceeds, or
approximately HK$297.2 million, will be invested in R&D initiatives to advance next-
generation industrial robotics technologies, aiming to reinforce our market leadership; (iv)
approximately 10.0% of the net proceeds, or approximately HK$148.6 million, will be used for
strengthening our global service capabilities and developing a organization-wide digitized
management system; (v) approximately 10.0% of the net proceeds, or approximately HK$148.6
million, will be used to partially repay existing loans; and (vi) the remaining approximately
10.0% of the net proceeds, or approximately HK$148.6 million, will be used for working
capital and general corporate purposes.
For details, see “Future Plans and Use of Proceeds.”
LISTING EXPENSES
Assuming that the Over-allotment Option is not exercised and an Offer Price of HK$16.18
per Offer Share (being the mid-point of the indicative Price Range stated in this prospectus),
the aggregate commissions and fees, together with the Stock Exchange listing fee, AFRC
transaction levy, SFC transaction levy and Stock Exchange trading fee, legal and other
professional fees, printing and other expenses relating to the Listing and the Global Offering,
which are payable by us, are estimated to amount in aggregate to approximately HK$79.9
million (assuming the Over-allotment Option is not exercised), accounting for 5.1% of the
gross proceeds from the Global Offering.
SUMMARY
–2 4–


--- page 35 ---
During the Track Record Period, we incurred listing expenses of RMB17.5 million
(equivalent to HK$19.7 million), of which RMB1.1 million (equivalent to HK$1.2 million) was
recognized as administrative expenses in the consolidated statements of profit or loss and
RMB16.4 million (equivalent to HK$18.5 million) was directly attributable to the issuance of
Offer Shares which is expected to be charged against equity upon the Listing. We expect to
incur additional listing expenses of approximately RMB53.4 million (equivalent to HK$60.1
million), of which RMB1.9 million (equivalent to HK$2.1 million) is expected to be expensed
through the statement of profit or loss and approximately RMB51.5 million (equivalent to
HK$58.0 million) is expected to be recognized directly as a deduction from equity upon the
Listing. By nature, our listing expenses are composed of (i) underwriting-related expenses of
approximately HK$41.1 million, and (ii) non-underwriting-related expenses of approximately
HK$38.8 million, which consist of fees and expenses of legal advisors and Reporting
Accountants of approximately HK$29.8 million, and other fees and expenses of approximately
HK$9.0 million.
LEGAL PROCEEDINGS AND COMPLIANCE
We may, from time to time, be subject to legal proceedings, disputes and claims that arise
in the ordinary course of business, which primarily include contractual disputes and
employment matters. As of the Latest Practicable Date, we were not a party to any ongoing
material litigation, arbitration or administrative proceedings, and we were not aware of any
claims or proceedings contemplated by the government authorities or third parties which would
materially and adversely affect our business. Our Directors are not involved in any actual or
threatened material claims or litigation.
During the Track Record Period and up to the Latest Practicable Date, we were not
imposed any material administrative penalties. We did not experience any material or systemic
non-compliance incidents, which, taken as a whole, are likely to have a material and adverse
effect on our business, financial condition or results of operations.
For details, see “Business — Legal Proceedings and Compliance.”
IMPACT OF THE COVID-19 PANDEMIC
The COVID-19 pandemic, which began in early 2020 continued to spread worldwide
through 2022 including in regions where we have business operations. To contain the spread
of COVID-19 in our offices and production facilities and safeguard employee well-being, we
implemented mitigation measures, including remote-work arrangements, social-distancing and
mask-wearing protocols. Our supply chain, daily operations and financial results were not
materially adversely affected during the Track Record Period. As the COVID-19 pandemic has
subsided, we do not expect further material adverse impact on our business or financial
performance, although we will continue to monitor developments. See “Risk factors — Risks
related to our operations — Our business growth and results of operations may be affected by
changes in global and regional macroeconomic conditions, natural disasters, health epidemics
and pandemics, and social disruption and other outbreaks.”
SUMMARY
–2 5–


--- page 36 ---
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 has been no material changes to our business model and the general economic
and regulatory environment in which we operate, there has been no material adverse change in
our financial or trading position or prospects since September 30, 2025, being the end date of
our latest consolidated financial statements as set out in the Accountants’ Report in Appendix
I to this prospectus.
RECENT DEVELOPMENT
Business Updates
Following the end of the Track Record Period, our ultra-heavy-duty robots have achieved
a payload capacity of up to 1,200kg by leveraging our proprietary heavy-duty dual-drive
robotic technology. In addition, our servo systems have been included in the preferred supplier
list of one of our five largest customers during the Track Record Period, demonstrating the
growing market acceptance of our products. In addition, we introduced the iER Series robots
with an updated software system, improving coordination between hardware and software and
supporting high-precision operation.
Proposed Restructuring of Our Minority Interest in Nanjing Technical Equipment
In November 2024 and May 2025, we respectively entered into an agreement and a
supplemental agreement with Nanjing Chemical Fibre Co., Ltd. (ʮ̡)
(stock code: 600889.SH) (“ Nanjing Chemical Fibre ”), pursuant to which we agreed to
transfer approximately 3% equity interest in Nanjing Technical Equipment Manufacture Co.,
Ltd. (ʮ̡)( “ Nanjing Technical Equipment ”) held by our Group
in exchange for approximately 1.89% equity interest in Nanjing Chemical Fibre (the
“Proposed Transaction ”), which forms part of the asset restructuring of Nanjing Chemical
Fibre. Nanjing Chemical Fibre and its ultimate beneficial owner (being State-owned Assets
Supervision and Administration Commission of Nanjing Municipal Government (ԯ̹ɛ͏
ึ) are Independent Third Parties. The Proposed Transaction has
been approved by the Shanghai Stock Exchange. Registration with the CSRC was subsequently
completed on February 13, 2026, and such registration remains valid for 12 months.
Completion of the Proposed Transaction is subject to the issuance of shares by Nanjing
Chemical Fibre to our Group. Nanjing Chemical Fibre has announced that it intends to
complete the Proposed Transaction within the validity period of the CSRC registration.
However, as of the Latest Practicable Date, no detailed timetable for completing the Propsed
Transaction has been disclosed.
Nanjing Technical Equipment had been one of our suppliers of ball screws prior to our
investment. In 2022, we acquired 3% equity interest in Nanjing Technical Equipment, as we
recognized its growth potential based on our understanding of its business. We believe this
SUMMARY
–2 6–


--- page 37 ---
investment has further strengthened our cooperation with Nanjing Technical Equipment. Upon
completion of the Proposed Transaction, we will hold shares in Nanjing Chemical Fibre, a
company listed on the Shanghai Stock Exchange, thereby enhancing the liquidity of our
investment. Our Directors consider that the Proposed Transaction has been entered into on
normal commercial terms, which are fair and reasonable and in the interests of the Company
and the Shareholders as a whole.
We have applied to the Stock Exchange for, and the Stock Exchange has granted a waiver
from strict compliance with Rules 4.04(2) and 4.04(4) of the Listing Rules in respect of the
Proposed Transaction. See “Waivers from Strict Compliance with the Listing Rules and
Exemption from Compliance with the Companies (Winding up and Miscellaneous Provisions)
Ordinance — Waiver in relation to Post-Track Record Period Acquisition.”
Disposal of Y angzhou Shuguang
In June 2025, Nanjing Dingkong, one of our subsidiaries, partially disposed of its equity
interests held in Y angzhou Shuguang. As a result, Y angzhou Shuguang ceased to be
consolidated into our Group’s consolidated financial statements. On October 20, 2025, Nanjing
Dingkong and Shuguang Lanfengqi entered into a framework agreement to dispose of their
respective equity interest in Y angzhou Shuguang. As of the Latest Practicable Date, the
above-mentioned two equity transfers had been completed, and Nanjing Dingkong ceased to
hold any equity interest of Y angzhou Shuguang. For details, see “History, Development and
Corporate Structure — Major Share Capital Changes and Development of Our Company —
Disposal of Y angzhou Shuguang Optoelectronics Automation Co., Ltd. ( ౮ψᏣΈΈཥІછϞ
ப΂ʮ̡).”
Recent Trade Policies
In light of recent geopolitical developments and heightened U.S.-China trade tensions, we
have carefully reviewed the potential impact of such factors on our operations and financial
performance. During the Track Record Period, our revenue derived from the U.S. was
insignificant, and products sold in the U.S. were primarily manufactured in Europe rather than
exported directly from Chinese Mainland. While certain products incorporated a limited
amount of U.S.-origin electronic components and we utilized a small number of U.S.-origin
equipment, our International Sanctions Legal Advisers have advised that these circumstances
should not give rise to material risks under U.S. export control laws, as our products sold
globally do not contain more than a de minimis level of controlled U.S. content nor fall within
the scope of the Export Administration Regulations as foreign direct products of U.S.
technologies. Our Directors are of the view that recent geopolitical developments and
U.S.-China trade tensions have not had a material adverse effect on our operations or financial
performance. Notwithstanding the immaterial contribution of the U.S. market, we remain
committed to strengthening our market penetration in China and expanding our presence in
Europe, including through the establishment of local manufacturing facilities, with a view to
further mitigating potential risks.
SUMMARY
–2 7–


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In this prospectus, unless the context otherwise requires, the following terms and
expressions shall have the meanings set out below.
“A Share(s)” ordinary share(s) issued by our Company, with a nominal
value of RMB1.00 each, which is/are subscribed for or
credited as paid in Renminbi and is/are listed for trading
on the Shenzhen Stock Exchange
“A Shareholder(s)” holder(s) of the A Share(s)
“Accountants’ Report” the accountants’ report from KPMG, the text of which is
set out in Appendix I to this prospectus
“affiliate(s)” 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” the Accounting and Financial Reporting Council of Hong
Kong
“Articles” or “Articles of
Association”
the articles of association adopted by our Company with
effect upon the Listing Date and as amended from time to
time, a summary of which is set out in Appendix V to this
prospectus
“associate(s)” has the meaning ascribed thereto under the Listing Rules
“Audit Committee” the audit committee of the Board
“Board” or “Board of Directors” the board of Directors
“business day” a day on which banks in Hong Kong are generally open
for normal business to the public and which is not a
Saturday, Sunday or public holiday in Hong Kong
“CAGR” compound annual growth rate
“Capital Market
Intermediary(ies)”
the capital market intermediary(ies) as named in the
section headed “Directors and Parties Involved in the
Global Offering” in this prospectus
DEFINITIONS
–2 8–


--- page 39 ---
“Carl Cloos (China)” Carl Cloos Robotics Technology (China) Co., Ltd. ( ̔ဧ
Ҧ(ʕ਷)ʮ̡), a limited liability
company established in the PRC on June 10, 2020 and a
subsidiary of our Company
“Carl Cloos” Carl Cloos Schweißtechnik GmbH ( ᅃ਷дኁ౶ʮ̡), a
limited liability company registered in Germany on June
30, 1977 and a subsidiary of our Company
“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC
“Chairman” chairman of the Board
“China,” “Chinese Mainland” or
“the PRC”
the People’s Republic of China, unless the context
requires otherwise, excluding, for the purposes of this
prospectus only, the regions of Hong Kong, Macau and
Taiwan of the People’s Republic of China
“Cloos Welding” Cloos Welding Technology (Beijing) Co., Ltd. ̔ဧдኁ
౶ଔટҦሊ(̏ԯ)ʮ̡, a limited liability company
incorporated in PRC on October 26, 2009 and a
subsidiary of our Company
“close associate(s)” has the meaning ascribed thereto under the Listing Rules
“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”, “our Company” or
“the Company”
ESTUN AUTOMA TION CO., LTD (ٰ
ʮ̡) (formerly known as Nanjing Estun Digital
Technology Co., Ltd. (ʮ̡)), a
limited liability company incorporated in the PRC on
February 26, 2002 and was converted into a joint stock
company with limited liability on July 5, 2011, the A
Shares of which are listed on the Shenzhen Stock
Exchange (stock code: 002747.SZ)
DEFINITIONS
–2 9–


--- page 40 ---
“Company Law” the Company Law of the People’s Republic of China ( ʕ
), as amended, supplemented or
otherwise modified from time to time
“Compliance Advisor” Maxa Capital Limited
“connected person(s)” has the meaning ascribed thereto under the Listing Rules
“connected transaction(s)” has the meaning ascribed thereto under the Listing Rules
“Controlling Shareholder(s)” or
“Controlling Shareholders
Group”
has the meaning ascribed thereto under the Listing Rules
and unless the context requires otherwise, refers to Mr.
Wu, Mr. Wu Kan ( юԹ) (son of Mr. Wu), Ms. Liu Fang
(ٹspouse of Mr. Wu) and Nanjing Primest
“Corporate Governance Code” the Corporate Governance Code as set out in Appendix
C1 to the Listing Rules
“CSDC” China Securities Depository and Clearing Corporation
Limited (ப΂ʮ̡)
“CSRC” China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ
ึ)
“Director(s)” or “our Director(s)” the director(s) of our Company
“EIT” enterprise income tax
“EIT Law” the PRC Enterprise Income Tax Law ( ʕശɛ͏΍ձ਷
), as amended, supplemented or
otherwise modified from time to time
“Employee Incentive Scheme” the 2025 Restricted Share Scheme and the 2025 Share
Option Scheme
“ESG Committee” the environmental, social and governance (ESG)
committee of the Board
“Estun Intelligent” Nanjing Estun Intelligent System Engineering Co., Ltd.
(ʮ̡), a limited liability
company established in the PRC on February 2, 2007 and
a subsidiary of our Company
DEFINITIONS
–3 0–


--- page 41 ---
“Estun Intelligent (Jiangsu)” Estun Intelligent Technology (Jiangsu) Co. Ltd. (౶཭
Ҧ(Ϫᘽ)ʮ̡), a limited liability company
established in the PRC on July 19, 2022 and a subsidiary
of our Company
“Estun Robot” Nanjing Estun Robot Engineering Co., Ltd. (౶཭
ʮ̡), a limited liability company
established in the PRC on September 5, 2011 and a
subsidiary of our Company
“Estun Software” Nanjing Estun Software Technology Co., Ltd. (౶
ʮ̡), a limited liability company
established in the PRC on November 27, 2013 and a
subsidiary of our Company
“Extreme Conditions” extreme conditions caused by a super typhoon or other
natural disaster of a substantial scale seriously affect the
working public’s ability to resume work or brings safety
concern for a prolonged period as announced by the
government of Hong Kong
“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
“Frost & Sullivan” or “Industry
Consultant”
Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., a
global market research and consulting company, which is
an Independent Third Party
“Frost & Sullivan Report” the industry report commissioned by us and
independently prepared by Frost & Sullivan, summary of
which is set forth in the section headed “Industry
Overview” in this prospectus
“General Rules of HKSCC” General Rules of HKSCC published by the Stock
Exchange and as amended from time to time
“Global Offering” the Hong Kong Public Offering and the International
Offering
“Group”, “our Group”, “our”,
“we”, or “us”
the Company and all of its subsidiaries, or any one of
them as the context may require
DEFINITIONS
–3 1–


--- page 42 ---
“Guide” The Guide for New Listing Applicants, as published by
the Stock Exchange on November 29, 2023 and effective
on January 1, 2024, as amended or supplemented or
otherwise modified from time to time
“H Share(s)” ordinary share(s) in the share capital of our Company
with a nominal value of RMB1.00 each, which are to be
subscribed for and traded in Hong Kong dollars and to be
listed on the Stock Exchange
“H Share Registrar” Computershare Hong Kong Investor Services Limited
“H Shareholder(s)” holder(s) of the H Share(s)
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“HKSCC EIPO” the application for the Hong Kong Offer Shares to be
issued in the name of HKSCC Nominees and deposited
directly into CCASS to be credited to your designated
HKSCC Participant’s stock account through causing
HKSCC Nominees to apply on your behalf, including by
instructing your broker or custodian who is a HKSCC
Participant to give electronic application instructions via
HKSCC’s FINI System to apply for the Hong Kong Offer
Shares on your behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary
of HKSCC
“HKSCC Operational
Procedures”
the operational procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operation and functions of the Systems, as from time to
time in force
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the
PRC
DEFINITIONS
–3 2–


--- page 43 ---
“Hong Kong dollars” or “HK$” Hong Kong dollars and cents respectively, the lawful
currency of Hong Kong
“Hong Kong Offer Shares” the 9,678,000 H Shares initially offered by our Company
for subscription at the Offer Price pursuant to the Hong
Kong Public Offering (subject to reallocation as
described in “Structure and Conditions of the Global
Offering”)
“Hong Kong Public Offering” the offer of the Hong Kong Offer Shares for subscription
by the public in Hong Kong (subject to reallocation as
described in the section headed “Structure and
Conditions of the Global Offering”) at the Offer Price
(plus brokerage, SFC transaction levies, Stock Exchange
trading fees and AFRC transaction levy), on and subject
to the terms and conditions described in this prospectus
and as further described in “Structure and Conditions of
the Global Offering — The Hong Kong Public Offering”
“Hong Kong Stock Exchange” or
“Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listed
in “Underwriting — Hong Kong Underwriters” in this
prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated February 26, 2026
relating to the Hong Kong Public Offering and entered
into by and among our Company, the Sponsor-Overall
Coordinator, and the Hong Kong Underwriters, as further
described in “Underwriting — Underwriting
Arrangements and Expenses”
“IAS” International Accounting Standards
“IFRS” IFRS Accounting Standards issued by the International
Accounting Standards Board
“International Sanctions Legal
Advisers”
Ashurst Horitsu Jimusho Gaikokuho Kyodo Jigyo, our
legal advisers as to International Sanctions in connection
with the Listing
DEFINITIONS
–3 3–


--- page 44 ---
“Independent Third Party(ies)” any person(s) or entity(ies) who, to the best of our
Directors’ knowledge, information and belief having
made all reasonable enquiries, is/are not a connected
person of our Company within the meaning of the Listing
Rules
“International Offer Shares” the 87,102,000 H Shares initially offered by our
Company for subscription pursuant to the International
Offering together with, where relevant, any additional H
Shares which may be issued by our Company pursuant to
the exercise of the Over-allotment Option (subject to
reallocation as described in “Structure and Conditions of
the Global Offering”)
“International Offering” the offer of the International Offer Shares by the
International Underwriters at the Offer Price to persons
outside the United States in offshore transactions in
accordance with Regulation S, as further described in
“Structure and Conditions of the Global Offering”
“International Underwriters” the group of international underwriters that is expected to
enter into the International Underwriting Agreement to
underwrite the International Offering
“International Underwriting
Agreement”
the underwriting agreement expected to be entered into
on or around the Price Determination Date by, among
others, our Company, the Sponsor-Overall Coordinator
and the International Underwriters in respect of the
International Offering, as further described in
“Underwriting — Underwriting Arrangements and
Expenses — The International Offering”
“Joint Bookrunners” the Joint Bookrunners as named in “Directors and Parties
Involved in the Global Offering”
“Joint Global Coordinators” the Joint Global Coordinators as named in “Directors and
Parties Involved in the Global Offering”
“Joint Lead Managers” the Joint Lead Managers as named in “Directors and
Parties Involved in the Global Offering”
“Latest Practicable Date” February 20, 2026, being the latest practicable date for
the purpose of ascertaining certain information contained
in this prospectus prior to its publication
DEFINITIONS
–3 4–


--- page 45 ---
“Listing” listing of the H Shares on the Main Board of the Stock
Exchange
“Listing Committee” the Listing Committee of the Stock Exchange
“Listing Date” the date, expected to be on or around Monday, March 9,
2026, on which our H Shares of the Company are listed
and from which dealings therein are permitted to take
place on the Stock Exchange
“Listing Rules” or
“Hong Kong Listing Rules”
the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, as amended,
supplemented or otherwise modified from time to time
“Main Board” the stock market (excluding the option market) operated
by the Hong Kong Stock Exchange which is independent
from and operated in parallel with the GEM of the Hong
Kong Stock Exchange
“MIIT” Ministry of Industry and Information Technology of the
PRC (ʷ௅)
“MOF” or “Ministry of Finance” Ministry of Finance of the PRC (௅)
“MOFCOM” Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷ਠਕ
௅)
“MOST” Ministry of Science and Technology of the PRC ( ʕശɛ
ኪҦஔ௅)
“Mr. Wu” Mr. Wu Bo (تan executive Director, the chairman of
the Board, the chief strategic officer of our Company, and
one of our Controlling Shareholders
“Nanjing Primest” Nanjing Primest Technology Co., Ltd. (߅
ʮ̡), one of our Controlling Shareholders
“NDRC” the National Development and Reform Commission of
the PRC (ึ)
“Nomination Committee” the nomination committee of our Board
“NPC” the National People’s Congress of the PRC ( ʕശɛ͏΍
ɽึ)
DEFINITIONS
–3 5–


--- page 46 ---
“Offer Price” the final price per H Share in Hong Kong dollars
(exclusive of brokerage fee of 1%, SFC transaction levy
of 0.0027%, Stock Exchange trading fee of 0.00565%
and AFRC transaction levy of 0.00015%) of not less than
HK$15.36 and expected to be not more than HK$17.00,
at which Hong Kong Offer Shares are to be subscribed, to
be determined in the manner further described in
“Structure and Conditions of the Global Offering —
Pricing and Allocation”
“Offer Share(s)” the Hong Kong Offer Shares and the International Offer
Shares, together with, where relevant, any additional H
Shares which may be issued by our Company pursuant to
the exercise of the Over-allotment Option
“Overall Coordinators” the overall coordinators as named in “Directors and
Parties Involved in the Global Offering”
“Over-allotment Option” the option expected to be granted by our Company to the
International Underwriters, exercisable by the Sponsor-
Overall Coordinator (on behalf of the International
Underwriters) pursuant to the International Underwriting
Agreement, pursuant to which our Company may be
required to allot and issue up to an aggregate of
14,517,000 additional H Shares at the Offer Price to,
cover over-allocations in the International Offering, if
any, further details of which are described in “Structure
and Conditions of the Global Offering”
“Overseas Listing Trial
Measures”
The Trial Measures for the Administration on
Overseas Securities Offering and Listing by Domestic
Companies ( ྤʫΆุྤ̮೯БᗇՎձɪ̹၍ଣ༊Б፬
) promulgated by the CSRC on February 17, 2023,
which became effective on March 31, 2023, as amended,
supplemented or otherwise modified from time to time
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ), the central
bank of the PRC
“PRC Government” the central government of the PRC and all governmental
subdivisions (including provincial, municipal and other
regional or local government entities) and
instrumentalities thereof or, where the context requires,
any of them
DEFINITIONS
–3 6–


--- page 47 ---
“PRC Legal Advisors” Zhong Lun Law Firm, our legal advisor as to PRC laws
“Price Determination Agreement” the agreement to be entered into by the Sponsor-Overall
Coordinator (for itself and on behalf of the Underwriters)
and our Company on the Price Determination Date to
record and fix the Offer Price
“Price Determination Date” the date, expected to be on or around Thursday, March 5,
2026 (Hong Kong time) on which the Offer Price is
determined, or such later time as the Sponsor-Overall
Coordinator (for itself and on behalf of the Underwriters)
and our Company may agree, but in any event no later
than 12:00 noon on Thursday, March 5, 2026
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration and Appraisal
Committee”
the remuneration and appraisal committee of our Board
“Reporting Accountants” KPMG, Certified Public Accountants, Hong Kong
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“SAFE” the State Administration of Foreign Exchange of the PRC
(̮ි၍ଣ҅)
“SA T” the State Administration of Taxation of the PRC ( ʕശɛ
೼ਕᐼ҅)
“Securities and Futures
Commission” or “SFC”
the Securities and Futures Commission of Hong Kong
“Securities Law” the Securities Law of the PRC ( ʕശɛ͏΍ձ਷ᗇՎ
), as amended, supplemented or otherwise modified
from time to time
“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Share(s)” ordinary share(s) in the capital of our Company with a
nominal value of RMB1.00 each, including both A Shares
and H Shares
DEFINITIONS
–3 7–


--- page 48 ---
“Shareholder(s)” holder(s) of the Share(s)
“Shenzhen-Hong Kong Stock
Connect”
a securities trading and clearing links program developed
by the Hong Kong Stock Exchange, Shenzhen Stock
Exchange, HKSCC and CSDC for the establishment of
mutual market access between Hong Kong and Shenzhen
“Sole Sponsor” Huatai Financial Holdings (Hong Kong) Limited
“Southbound Trading Link” the entrustment of China securities houses by China
investors to trade shares listed on the Stock Exchange
within a stipulated range via filing by the securities
trading service companies established by the Shanghai
Stock Exchange and Shenzhen Stock Exchange with the
Stock Exchange
“Sponsor-Overall Coordinator” Huatai Financial Holdings (Hong Kong) Limited
“sq.m.” square meters
“Stabilizing Manager” Huatai Financial Holdings (Hong Kong) Limited
“State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫)
“subsidiary(ies)” has the meaning ascribed thereto under the Listing Rules
“substantial shareholder(s)” has the meaning ascribed thereto under the Listing Rules
“Takeovers Code” the Code on Takeovers and Mergers and Share Buybacks
published by the SFC, as amended, supplemented or
otherwise modified from time to time
“Track Record Period” the three years ended December 31, 2024 and the nine
months ended September 30, 2025
“Trio Motion” Trio Motion Ltd, a limited liability company established
in United Kingdom on September 16, 2013 and a
subsidiary of our Company
“United Kingdom” or “U.K.” the United Kingdom of Great Britain and Northern
Ireland
“United States” or “U.S.” the United States of America, its territories, its
possessions and all areas subject to its jurisdiction
DEFINITIONS
–3 8–


--- page 49 ---
“U.S. dollars”, “US$” or “USD” United States dollars, the lawful currency of the United
States
“U.S. Securities Act” the U.S. Securities Act of 1933, as amended,
supplemented or otherwise modified from time to time,
and the rules and regulations promulgated thereunder
“V A T” value-added tax
“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
“2025 Share Option Scheme” the A Share option scheme adopted by our Company
pursuant to resolutions passed by our Shareholders on
June 20, 2025, the principal terms of which are set out in
“Statutory and General Information — Employee
Incentive Schemes” in Appendix VI to this prospectus
“2025 Restricted Share Scheme” the A Share option scheme adopted by our Company
pursuant to resolutions passed by our Shareholders on
June 20, 2025, the principal terms of which are set out in
“Statutory and General Information — Employee
Incentive Schemes” in Appendix VI to this prospectus
“%” percent
Certain amounts and percentage figures included in this prospectus have been subject to
rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures preceding them. Any discrepancies in any table or chart between the
total shown and the sum of the amounts listed are due to rounding.
For ease of reference, the names of the PRC established companies or entities, laws or
regulations have been included in this prospectus in both the Chinese and English languages;
in the event of any inconsistency, the Chinese versions shall prevail.
DEFINITIONS
–3 9–


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This glossary of technical terms contains terms used in this prospectus as they relate
to our business. As such, these terms and their meanings may not always correspond to
standard industry meaning or usage of these terms.
“accuracy” the degree to which the robot’s end-effect or reaches a
commanded position, either as a single point or along a
predefined trajectory
“AC servo drive system” a system consisting of an AC servo drive and motor,
enabling precise control of position, speed, and torque for
connected mechanical components
“AI” artificial intelligence
“API” application programming interface, a type of software
interface offering a service to other pieces of software
“application-specific industrial
robots”
robots designed for dedicated industrial scenarios such as
casting, bending, stamping, and welding, with tailored
performance and configurations
“arc tracking” a welding technique that uses sensors to dynamically
follow the path of the weld seam during operation
“arc welding” a welding process utilizing an electric arc’s high heat to
melt electrodes and workpieces, fusing metal joints
“background operations” functions that a robot controller can perform in parallel
with main tasks, improving multitasking efficiency
“bending robot” a type of robot specialized for precise sheet metal
bending in automated press brake systems
“bus-sharing” a control system feature that allows multiple servo drives
to share a common communication bus and power source,
enhancing efficiency
“bushar welding” the process of welding conductive bars (busbars) to
connect battery cells or modules, ensuring reliable
electrical connections within the battery assembly
GLOSSARY
–4 0–


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“CAD” computer-aided design, software used to create precise
2D or 3D drawings of mechanical parts, often directly
imported into bending or stamping automation solutions
“CE” Conformité Européenne, a certification mark indicating
that a product complies with European Union health,
safety, and environmental protection standards, allowing
it to be sold within the European Union
“cETLus” a certification mark indicating that a product meets
electrical safety standards in the United States and
Canada, ensuring safe and reliable operation under
normal conditions
“cleanroom robot” a robot designed to operate in environments with
stringent cleanliness standards, such as semiconductor or
pharmaceutical manufacturing
“CNC” computer numerical control, the computerized
automation of machine tools, where machine tools are
directly operated using data stored in digital media
“control cabinet” an enclosure housing the electronic and power
components that control robot operations
“core robot controller” the central processing unit of a robot system that handles
motion control, task execution, and system integration
“digital twin simulation” a virtual model that mirrors real-world production
systems for simulation, debugging, and performance
optimization
“DIP” dual in-line package, a common type of electronic
component packaging used in through-hole assembly
processes
“dual-drive technology” a heavy-duty robot configuration using two motors and
two reducers in parallel to replace a single high-torque
reducer, improving cost and supply resilience
“dual-voltage brake control” a system that controls the motor brake using two voltage
levels to achieve precise and safe stopping
GLOSSARY
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“edge computing” local data processing at the machine level using
embedded systems, enabling real-time decisions without
relying on centralized servers
“edge-side AI” artificial intelligence processing performed directly on
the local controller, in conjunction with cloud-based AI,
enabling flexible, extensible, and intelligent control
“electro-hydraulic servo
system”
a closed-loop control system converting electrical energy
into hydraulic energy via servo valves or proportional
valves and hydraulic pumps, with feedback from sensors
to ensure precise motion trajectory and state regulation
for metal forming machinery
“energy feedback system” a regenerative braking mechanism that captures and
reuses energy from deceleration phases in servo systems
“EtherCA T” a high-performance industrial Ethernet protocol used for
real-time automation and motion control
“EtherNet” a standard communication protocol for industrial
networks, used for real-time machine communication
“E-Care platform” a remote maintenance platform combining IoT
connectivity and cloud-based diagnostics to support
predictive servicing
“E-Noesis platform” a cloud-based digital operations platform that provides
performance insights, predictive analytics, and intelligent
programming tools
“four-quadrant active rectification
at the power end”
a technique that allows power to flow in both directions,
enabling the motor to drive and regenerate energy
efficiently
“forward engineering” a structured process of designing and developing
products from initial concepts to finalized designs
“full closed-loop control” a servo control method where feedback sensors
continuously adjust output to maintain high precision
“functional safety” safety features and system designs that ensure a robot
reacts predictably and safely in hazardous conditions, in
compliance with international standards
GLOSSARY
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“general-purpose industrial
robot”
a robot designed for versatile tasks across various
industries, with models classified by payload range
“High-IP-rated robots” a robot product line featuring enhanced protection against
dust and water, allowing them to operate reliably in
demanding industrial conditions
“high-performance motion
controller”
a control unit capable of managing large-scale, high-
speed multi-axis movement with microsecond-level
response times
“high-precision palletizing” automated stacking or arranging of items with strict
positioning tolerances, often using robotic arms
“heavy-duty industrial robot” a robot engineered to handle payloads above 100kg,
suitable for material handling, die-casting, and stamping
applications
“ICT” in-circuit testing, an automated test method for validating
the electrical performance of circuit boards before final
assembly
“IIoT” industrial internet of things, a connected network of
sensors, controllers, and machines that exchange data to
optimize industrial processes
“intelligent manufacturing
system”
an automated production unit integrating smart industrial
robots and auxiliary equipment to minimize manual
intervention and enhance efficiency
“IPD” integrated product development, a structured, stage-based
product development methodology emphasizing cross-
functional collaboration and speed to market
“industrial robot” a programmable, multi-joint automation machine
replacing human labor in hazardous or repetitive tasks;
smart industrial robot refers to models with sensory
feedback for autonomous decision-making
“integrated robot drive-control
unit”
a compact hardware module that combines both motion
control and power drive functions in one integrated
system
GLOSSARY
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--- page 54 ---
“IP67” an ingress protection rating indicating dust-tight sealing
and water immersion resistance up to 1 meter for 30
minutes
“laser seam positioning” a vision-based technique using laser sensors to locate and
track welding seams with sub-millimeter accuracy
“Lighthouse Factory” a manufacturing facility recognized by the World
Economic Forum for adopting advanced intelligent
manufacturing technologies
“lightweight robot” a compact and agile robot, often with four or six axes,
designed for applications in tight spaces and with low
payload requirements
“MINI Series” a six-axis lightweight robot product line optimized for
precision and IP67-level environmental protection
“modular architecture” a design principle that enables flexible robot
configuration by combining standardized functional
modules
“motion controller” a device that sends precise commands to servo systems to
control speed, position, and movement paths
“motion control system” a system comprising a motion controller generating
trajectory commands and a servo control system
executing commands to drive motion tasks
“motion PLC” motion programmable logic controller, a hybrid
controller combining motion control with logic
processing, compatible with industrial programming
languages
“multi-layer/multi-pass
welding”
a welding technique involving sequential layers or passes
to achieve strong and thick joints, especially in heavy
steel components
“nozzle searching” an arc welding feature where the robot automatically
locates the torch nozzle to ensure accurate welding
alignment
GLOSSARY
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--- page 55 ---
“OCV” open circuit voltage, a diagnostic test that measures the
voltage of an electrical cell or module without applying a
load, commonly used in battery assembly
“payload” the maximum weight a robot can carry at its end effector
without compromising performance or safety
“PCBA” printed circuit board assembly, the final assembled circuit
board with all components mounted and tested, ready for
integration into devices
“PC-based controller” a motion controller built on an industrial-grade personal
computer, integrating control and computing functions in
a compact unit
“predictive maintenance” a proactive servicing method that uses sensors and data
analysis to detect and prevent failures before they occur
“process software package” specialized software installed on robots to support
specific tasks such as arc welding, palletizing, or bending
with embedded logic and sensor integration
“protective epoxy resin potting” encasing electronic components in epoxy resin to protect
them from moisture, dust, and mechanical stress during
operation
“radiation fin” heat-dissipating components attached to devices or
electronic parts to efficiently release heat into the
surrounding environment
“regenerative braking
technology”
a system that recovers energy generated during braking
and feeds it back into the system, helping to reduce total
energy consumption
“repeat positioning accuracy” the ability of a robot to return to a previously taught
position with minimal deviation, measured in millimeters
“SCARA Series” Selective Compliance Assembly Robot Arm, a four-axis
robot product line known for high-speed, horizontal
motion in pick-and-place and soldering applications
“servo drive” a device that receives motion commands from the
controller and regulates the power sent to the servo motor
GLOSSARY
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“servo system” a system consisting of a servo drive and motor, enabling
precise control of position, speed, and torque for
connected mechanical components
“SMT” surface-mount technology, a method for placing and
soldering miniature electronic components directly onto
the surface of a PCB
“SPI” solder paste inspection, an optical inspection method
used after solder paste is applied to a PCB, ensuring
correct deposition before SMT placement
“spot welding” a resistance welding method for joining two metal
surfaces at localized points using heat generated from
electric current
“stamping robot” a robot built for automated press operations, capable of
handling large sheets and operating at high strokes per
minute
“torch-cleaning station” an automated station that cleans welding torches during
operation to maintain weld quality and extend equipment
life
“torque ripple” fluctuations in the torque output of a motor
“trajectory repeatability” a measure of how closely a robot can repeat the same path
over multiple cycles
“turnkey production line” a fully integrated manufacturing solution delivered ready
for operation, including robots, controls, and auxiliary
equipment
“TÜV” Technischer Überwachungsverein, German organizations
known as Technical Inspection Associations, which
provide product testing, inspection, and certification
services to ensure compliance with safety, quality, and
regulatory standards
“UL” Underwriters Laboratories, a global safety certification
company based in the United States that develops
standards and provides testing and certification services
to ensure products meet rigorous safety requirements
GLOSSARY
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“ultra-heavy-duty robot” an industrial robot with a payload exceeding 280kg, used
for applications like die-casting or large-scale material
handling
“Welding Automation System” an independent production system combining welding
robots and peripheral equipment for welding tasks
“welding robot” a programmable, multi-axis automation machine with a
welding or cutting torch at its end-effector, performing
welding, cutting, or thermal spraying
GLOSSARY
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We have included in this prospectus forward-looking statements. Statements that are
not historical facts, including statements about our intentions, beliefs, expectations or
predictions for the future, are forward-looking statements.
This prospectus contains forward-looking statements and information relating to us and
our subsidiaries that are based on the intentions, beliefs, expectations or predictions of our
management as well as assumptions made by and information currently available to our
management. When used in this prospectus, the words “aim,” “anticipate,” “believe,” “could,”
“expect,” “going forward,” “intend,” “may,” “ought to,” “plan,” “project,” “seek,” “should,”
“will,” “would,” “vision,” “aspire,” “target,” “schedules,” and the negative of these words and
other similar expressions, as they relate to us or our management, are intended to identify
forward-looking statements. Such statements reflect the current views of our management with
respect to future events, operations, liquidity and capital resources, some of which may not
materialize or may change. These statements are subject to certain risks, uncertainties and
assumptions, including the risk factors as described in this prospectus, some of which are
beyond our control and may cause our actual results, performance or achievements, or industry
results, to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Y ou are strongly cautioned that
reliance on any forward-looking statements involves known and unknown risks and
uncertainties. The risks and uncertainties facing us which could affect the accuracy of
forward-looking statements include, but are not limited to, the following:
 our operations and business prospects;
 our ability to maintain relationships with, and the actions and developments
affecting, our major customers and suppliers;
 future developments, trends and conditions in the industries and markets in which
we operate or plan to operate;
 general economic, political and business conditions in the markets in which we
operate;
 changes to the regulatory environment in the industries and markets in which we
operate;
 our ability to maintain our market leading position;
 the actions and developments of our competitors;
 our ability to effectively contain costs and optimize pricing;
FORW ARD-LOOKING STATEMENTS
–4 8–


--- page 59 ---
 the ability of third parties to perform in accordance with contractual terms and
specifications;
 our ability to retain senior management and key personnel and recruit qualified staff;
 our business strategies and plans to achieve these strategies, including our product
and geographic expansion plans;
 our ability to defend our intellectual property rights and protect confidentiality;
 the effectiveness of our quality control systems;
 change or volatility in interest rates, foreign exchange rates, equity prices, trading
volumes, commodity prices and overall market trends, including those pertaining to
the PRC and the industry and markets in which we operate;
 capital market developments; and
 all other risks and uncertainties described in the section headed “Risk Factors” in
this prospectus.
By their nature, certain disclosures relating to these and other risks are only estimates and
should one or more of these uncertainties or risks, among others, materialize, actual results
may vary materially from those estimated, anticipated or projected, as well as from historical
results. Specifically but without limitation, sales could decrease, costs could increase, capital
costs could increase, capital investment could be delayed and anticipated improvements in
performance might not be fully realized.
Subject to the requirements of applicable laws, rules and regulations, we do not have any
and undertake no obligation to update or otherwise revise the forward-looking statements in
this prospectus, whether as a result of new information, future events or otherwise. As a result
of these and other risks, uncertainties and assumptions, the forward-looking events and
circumstances discussed in this prospectus might not occur in the way we expect or at all.
Accordingly, you should not place undue reliance on any forward-looking information. All
forward-looking statements in this prospectus are qualified by reference to the cautionary
statements in this section as well as the risks and uncertainties discussed in the section headed
“Risk Factors” in this prospectus.
In this prospectus, statements of or references to our intentions or those of our Directors
are made as of the date of this prospectus. Any such information may change in light of future
developments.
FORW ARD-LOOKING STATEMENTS
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An investment in our H Shares involves various risks. You should carefully consider
all the information in this prospectus and in particular the risks and uncertainties
described below before making an investment in our H Shares.
The occurrence of any of the following events could materially and adversely affect
our business performance, financial condition, results of operations or prospects. If any
of these events occur, the trading price of our H Shares could decline and you may lose
all or part of your investment. You should seek professional advice from your relevant
advisers regarding your prospective investment in the context of your particular
circumstances.
RISKS RELATING TO OUR INDUSTRY AND BUSINESS
The demand in the end markets of our industry is constantly changing. If we are unable
to respond effectively to these changes, our business, results of operations and financial
condition will be materially and adversely affected.
Our business primarily focuses on R&D, manufacturing and sales of industrial robots and
intelligent manufacturing systems, along with core automation components and motion control
systems. Our industrial robots and intelligent manufacturing systems are widely used across
industries such as automotive, photovoltaics, lithium battery, construction materials and
electronics. The core automation components and motion control systems serve as key
automation enablers for a wide range of intelligent equipment, including but not limited to
CNC metal forming machines, robots, photovoltaic and lithium battery equipment, electronics
and packaging machinery.
Demand for our products is closely linked to capital expenditure cycles and business
performance in downstream industries such as construction machinery, heavy industry,
automotive, new energy and electronics. For example, when customers in these sectors reduce
or delay their investment in production capacity, their procurement of industrial robots and
intelligent manufacturing systems may slow down. During the Track Record Period, our
financial results deteriorated due to the downturn in our downstream industries, particularly
construction machinery and heavy industry, and photovoltaics. See “Business — Deteriorating
Financial Performance” for details. In addition, rapid technological changes, intensified market
competition, fluctuations in the supply and pricing of key components, as well as broader
macroeconomic conditions such as interest rate movements or trade tensions, can all directly
influence customer purchasing decisions and the pace of industrial robotics adoption. If the
market for industrial robotics products does not develop as we expected or develops more
slowly than we expected, our business, results of operations and financial condition will be
adversely affected.
RISK FACTORS
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Our global operations expose us to risks and complexities across multiple jurisdictions.
Our revenue generated from overseas markets were RMB1,312.2 million, RMB1,594.4
million, RMB1,369.6 million, RMB1,139.3 million and RMB1,117.7 million in 2022, 2023,
2024 and the first nine months of 2024 and 2025, respectively, accounting for 33.8%, 34.3%,
34.2%, 33.8% and 29.4% of our total revenue for the same periods, respectively. We expect to
continue leveraging our global footprint as part of our long-term strategy, which may subject
us to a range of risks associated with diverse macroeconomic, political, regulatory and social
environments. In each of these jurisdictions, we may face challenges such as navigating
differing legal systems, adapting to regulatory and industry standards, and complying with
complex and evolving local requirements. In particular, fluctuations in exchange rates, customs
regulations, trade policies, labor laws, and changes in foreign investment controls could
adversely affect our operational efficiency and cost structure.
Additionally, managing geographically dispersed teams across different time zones,
languages and cultures increases the complexity of coordinating our operations and
maintaining consistent quality and compliance standards. Political instability, geopolitical
tensions, or other disruptions, such as labor unrest or supply chain interruptions, in any of the
regions where we operate could also impair our ability to manufacture, distribute or deliver
products in a timely and cost-effective manner. If we are unable to effectively address and
manage these international operational risks, our business, financial condition, and results of
operations could be materially and adversely affected.
We may not be able to successfully compete in the global industrial robotic solutions
market.
The global industrial robotic solutions market is competitive. We primarily compete with
other companies that focus on the R&D, manufacturing and sales of industrial robotics
products. If we do not have or in the future obtain more financial resources, leading
technological capabilities and broader customer base than our competitors, we may not be able
to more quickly and effectively respond to new or changing opportunities, technologies,
regulatory requirements or customer demand than our competitors.
We may also face competition with new entrants, who may offer more affordable and/or
advanced products, and thus increase the level of competition in the future. Increased
competition could result in lower sales volume, price reductions, shrunk profit margins or loss
of market share. Further, we may be required to make substantial additional investments in
R&D, sales and marketing, talents recruitment and retention, and acquisition of technologies
complementary to, or necessary for, our current and future products in order to respond to such
competitive threats, and we cannot assure you that such investments will be effective. If we are
unable to compete successfully, or if competing successfully requires us to take costly actions
in response to the actions of our competitors, our business, results of operations and financial
condition may be materially and adversely affected.
RISK FACTORS
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Developments in alternative technologies and products may adversely affect the demand
for our industrial robotics products.
The industrial robotic solutions market is evolving at a rapid pace, driven by advances in
sensor technology, artificial intelligence and next-generation control architectures. Our
industrial robots, engineered for high-precision, high-efficiency tasks such as welding,
assembly, material handling and flexible sorting, must continually integrate cutting-edge
sensors and control algorithms to maintain safety, accuracy, and throughput in demanding
factory environments. Should we fail to anticipate or invest sufficiently in these innovations,
or if our R&D efforts do not yield commercially viable enhancements on a timely basis, our
products could quickly fall behind competing offerings. Moreover, alternative automation
technologies, such as fully automated systems that don’t rely on traditional robotic arms, like
autonomous mobile robots, could emerge. These alternatives may offer similar or even better
performance, faster deployment, or lower operational costs. For example, an autonomous
mobile robot could transport materials around a factory floor without the need for fixed robotic
arms or extensive infrastructure. Such advancements could make our solutions less attractive
to customers, or in some cases, obsolete for certain tasks. If we are unable to adapt our product
roadmap to meet shifting customer preferences or compete effectively against innovators with
better resources, we could experience reduced market share, diminished revenue growth,
increased R&D costs to catch up, and potential loss of key technical talent. Any of these
outcomes would have a material and adverse effect on our business, results of operations,
financial condition, and long-term prospects.
Our investments and acquisitions may not achieve the intended benefits and may expose
us to various operational, financial, and regulatory risks.
We have made, and may continue to make, strategic investments and acquisitions to
expand our capabilities, access new technologies, enhance our product portfolio, or enter new
markets within the industrial robotic solutions industry. See “Future Plans and Use of
Proceeds.” These transactions are subject to various risks and uncertainties, and there can be
no assurance that they will generate the expected benefits or returns.
The success of any such transaction depends on numerous factors, including the target’s
ability to meet performance expectations, integration of personnel, systems and operations,
alignment of strategic goals, and realization of anticipated synergies. We may encounter
difficulties in business integration, incur unanticipated costs, or fail to achieve the intended
business objectives, such as accelerating innovation, improving market position, or securing
supply chains. These challenges could divert management attention and resources from our
existing business operations.
In addition, many acquisitions or strategic investments may require regulatory approvals
or compliance with applicable laws and regulations, including those in the PRC. These
requirements may increase the complexity and cost of transactions and could result in delays
RISK FACTORS
–5 2–


--- page 63 ---
or failure to consummate certain deals. We may also be exposed to unknown or contingent
liabilities of acquired businesses, including those arising from historical legal proceedings,
contractual obligations, or regulatory non-compliance, for which we may not be fully
indemnified, if at all.
Acquisitions and investments may also involve significant capital outlays, the issuance of
equity securities that could dilute existing shareholders, or the assumption of debt, any of
which could adversely impact our financial position. Any failure to realize the anticipated
benefits from investments and acquisitions could materially and adversely affect our business,
financial condition, and results of operations. In the event acquired assets or businesses
underperform or market conditions deteriorate, we may be required to recognize impairment
charges related to goodwill or other intangible assets. See “— Risks Relating to Financial,
Accounting and Tax Matters — Investments, acquisitions and divestures may affect our
financial results. We may not be able to achieve our anticipated benefits and synergistic effects
from such investments and acquisitions.”
We face risks associated with our supply chain, including procurement disruptions, price
volatility, and quality control issues, which may materially and adversely affect our
business, results of operations and financial condition.
We source key components and equipment critical to our production. Our procurement
primarily includes reducers, valve blocks, large non-standard fabricated components, as well
as tooling and fixture equipment. Our costs of raw materials and components were
RMB2,180.8 million, RMB2,719.6 million, RMB2,347.7 million, RMB1,963.0 million and
RMB2,279.8 million in 2022, 2023, 2024 and the first nine months of 2024 and 2025,
respectively, accounting for 83.7%, 85.1%, 81.7%, 83.0% and 83.4% of our total cost of sales
for the same periods, respectively. Our supply chain is exposed to numerous risks, including
supply shortages, extended lead times, price volatility, and quality inconsistencies, all of which
may adversely impact our ability to meet production schedules, control costs, and deliver
products to our customers as expected.
The prices and availability of the materials and parts we procure are influenced by various
factors beyond our control, such as fluctuations in commodity prices, shifts in supply and
demand dynamics, inflation, logistics costs, changes in environmental or trade regulations, and
geopolitical instability. For example, disruptions in upstream supply chains or sudden surges
in demand for critical components, such as semiconductors, industrial-grade metals, or
automation sensors, could significantly raise our procurement costs and delay production
timelines. We may not be able to fully pass on these cost increases to our customers, which
could negatively affect our margins and profitability. Our supply chain may also be subject to
geopolitical risks. For example, we might import certain electronic components from the
United States. Although these products are not currently subject to trade restrictions or export
controls imposed by the U.S. or other jurisdictions, we cannot guarantee that such risks will
not arise in the future.
RISK FACTORS
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In addition, we depend on the performance and compliance of our suppliers. Any failure
by our suppliers to meet our technical specifications, quality standards, delivery schedules, or
compliance expectations, such as adherence to environmental and labor regulations, could
result in production delays, increased rework or warranty costs, reputational damage, or even
regulatory penalties. If any of our key suppliers experience financial distress, legal challenges,
or operational disruptions, or if we are unable to maintain or replace such relationships on
acceptable terms, our operations could be significantly affected.
We may face risks if there are quality issues with our products.
Our industrial robotic products are integral to the precision, safety, and efficiency of
modern manufacturing operations. Given their critical role in high-stakes industrial
environments, product reliability and safety are paramount to our business. During the Track
Record Period, no significant product quality or safety incidents were reported. Nevertheless,
the complexity of industrial robotics products, coupled with extended product lifespans and
reliance on interconnected components, introduces inherent challenges in ensuring flawless
long-term performance. Despite rigorous testing, undetected defects in hardware, software, or
parts supplied by third parties could compromise system functionality, disrupt the operations
of our customers, or pose safety hazards. Such issues may result in reputational damage, loss
of customer trust, order cancellations, or costly recalls. In severe cases, defective products
could trigger legal claims from affected parties, particularly if malfunctions lead to workplace
injuries or production downtime.
In addition, the quality of parts, components and/or products manufactured by our
suppliers that we incorporate into our industrial robotics products is beyond our control. We
cannot assure you that the parts, components and/or products we procure from them are safe
and free of defects or can meet the relevant quality standards. Resource actions may prove
delayed, insufficient, or unenforceable due to supplier financial instability or contractual
limitations. We primarily depend on the quality control procedures of our suppliers. In the
event of any quality issues, we could be subject to complaints and product liability claims and
we may not be able to seek indemnification from them. If we engage in legal proceedings
against our suppliers, such proceedings may be time-consuming and costly regardless of the
outcomes. Any of the foregoing incidents may materially and adversely affect our business,
results of operations and financial condition.
Our expansion into new products and solutions or industry verticals may not be successful
and may expose us to additional risks.
As part of our growth strategy, we have been and may continue to develop and introduce
new products and solutions, as well as explore applications of our products and solutions into
various industry verticals. While such initiatives are intended to enhance our market position,
address evolving customer needs, and capture new growth opportunities, they also subject us
to a range of risks and uncertainties. We may lack sufficient experience, capabilities, or market
insights in certain new areas, which could hinder our ability to effectively compete or adapt to
specific customer preferences, technological requirements, or supply chain dynamics. There
can be no assurance that our new products, services, or business lines will be successfully
launched, gain market acceptance, or achieve the intended business or financial performance.
We may fail to accurately anticipate market conditions or underestimate the intensity of
competition from existing or more established players in these areas.
RISK FACTORS
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Moreover, expansion into new markets or industry verticals often involves increased
R&D investment, operational complexity, and heightened demands on our internal resources
and management bandwidth. We may also face difficulty in hiring and retaining qualified
personnel with the relevant expertise or in scaling our risk management, compliance, and IT
systems in time to support such growth. We may further be subject to unfamiliar regulatory
requirements or approval processes specific to new products, services, or markets, and failure
to comply or adapt in a timely manner could adversely affect our expansion efforts.
Additionally, our innovations may be imitated by competitors, limiting the commercial
viability or lifecycle of our new offerings.
If we are unable to successfully manage the risks and challenges associated with
launching new products or entering new verticals, we may not achieve the expected returns on
our investments, which could materially and adversely affect our business prospects, results of
operations and financial condition.
If we fail to attract new customers and/or retain existing customers, our business, results
of operations and financial condition may be adversely affected.
Our success in the industrial robotic solutions industry relies heavily on our ability to
retain long-term relationships with existing customers while continually expanding our
customer base. The majority of our top five largest customers in each period during the Track
Record Period had commenced their cooperation with us prior to or at the beginning of our
Track Record Period. See “Business — Our Customers — Our Five Largest Customers” for
details. Many of our customers evaluate our products and solutions based on their specific
operational needs. As such, there is no assurance that satisfied customers will place repeat
orders or remain loyal to our brand. Our ability to maintain and grow our customer base
depends on multiple factors, including (i) the performance, reliability, and cost-effectiveness
of our automation solutions, (ii) the adaptability of our offerings to evolving industry demands,
(iii) the strength and responsiveness of our technical support, and (iv) our capacity to
demonstrate continuous innovation through product upgrades and system optimization.
Additionally, intensified market competition, particularly from companies with longer
operating histories and deeper customer ties, may erode our market share or limit our ability
to command favorable pricing.
Further, changes in the macroeconomic or industry-specific environment, such as
downturns in key sectors we serve, such as automotive, electronics, lithium battery, or
photovoltaic, shifts in customer procurement priorities, or delays in capital expenditure by our
customers, could negatively affect order volume or customer renewal decisions. Should we fail
to provide compelling value propositions, retain high customer satisfaction, or effectively
penetrate new market segments, our revenue growth and profitability could be significantly
impacted.
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We face operational, capacity and safety risks related to our production facilities, which
may adversely affect our business and results of operations.
Our production facilities are critical to the manufacture of our industrial robotics products
and the execution of our business strategy. See “Business — Manufacturing” for details of our
production facilities. However, we are exposed to various operational and safety risks in our
production processes that may disrupt our operations or impair our ability to meet customer
demands. These risks include, among others: (i) accidents, equipment failures or management
errors during production; (ii) shortages or disruptions of essential utilities such as electricity,
water, gas or telecommunications; (iii) natural disasters such as floods, earthquakes, fires, or
typhoons; (iv) public health emergencies or epidemics; and (v) social unrest, labor disputes or
shortages of skilled workers. The occurrence of any such events could result in the temporary
shutdown or reduced output of our facilities, damage to equipment, environmental liabilities,
bodily injury, reputational harm, or legal claims, any of which could materially and adversely
affect our operations, financial performance and customer relationships.
We may not always be able to accurately predict demand or align our production capacity
accordingly. Overcapacity may result in underutilized resources and pressure on profit
margins, while under-capacity may limit our ability to fulfill customer orders or achieve
business growth. We have undertaken and may continue to pursue production capacity
expansion plans, including the construction or conversion of production lines or facilities to
support new product models, technological upgrades or geographic diversification. Such
projects are subject to risks including delays, cost overruns, regulatory hurdles, or failure to
meet quality or process requirements. Our ability to complete these expansions as scheduled
and within budget is critical to maintaining our competitive edge and fulfilling projected
growth.
Furthermore, our production activities are subject to stringent legal and regulatory
requirements concerning occupational safety, environmental protection and health standards.
Non-compliance with such regulations or incidents causing harm to people, property or the
environment may lead to government enforcement actions, fines, production suspensions, or
reputational damage. In addition, our insurance coverage may not be adequate to fully offset
the losses incurred. Any prolonged or substantial interruption to our production capacity could
materially and adversely affect our business, results of operations, financial condition and
prospects.
We may not be able to adequately protect our intellectual property rights or prevent
third-party infringements, which could adversely affect our business, competitiveness and
financial condition.
Our ability to maintain a competitive edge in the industrial robotic solutions industry
depends significantly on our intellectual property portfolio, including patents, trademarks,
copyrights, proprietary technologies, know-how, domain names and other intellectual property
rights. See “Business — Intellectual Property” for details of our intellectual property portfolio.
We rely on a combination of intellectual property laws, contractual protections and internal
policies to safeguard our rights. However, these measures may not always be effective or
sufficient.
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Our intellectual property may be challenged, invalidated, circumvented or
misappropriated by others. We cannot assure you that our patent applications will be granted,
or that any registered rights will offer adequate protection or remain enforceable in all
jurisdictions. The level of protection afforded to intellectual property varies significantly
across different regions, and some countries may not offer the same degree of enforcement as
others. We may encounter infringement or misappropriation of our intellectual property by
third parties, including competitors copying our designs, technologies, or software without
authorization. Brand imitation and counterfeiting may also damage our reputation, particularly
as our products gain recognition in the market. Enforcement actions initiated by us to address
intellectual property infringements may be time-consuming, costly, and subject to uncertain
outcomes. In some cases, our legal actions may not result in a favorable judgment, and we
could even risk losing rights if our patents or trademarks are challenged and found to be invalid
or unenforceable.
In addition, we may be subject to allegations or legal claims from third parties asserting
that our products or technologies infringe their intellectual property rights. We could be
required to defend ourselves in litigation, pay damages, or cease the manufacture and sale of
certain products. We may also be obligated to indemnify customers, business partners or other
stakeholders in the event their use of our products results in infringement claims. We cannot
guarantee that all third-party components or technologies we use are free from infringement
issues. If any products provided by suppliers are found to infringe third-party rights, we may
be exposed to litigation, reputational damage, or be unable to recover associated costs.
Although we enter into employment agreements with confidentiality, non-compete
covenants and intellectual property ownership clauses, we cannot assure that these agreements
will not be breached, that we will have adequate remedies for any breach in time or at all, or
that our proprietary technology, know-how or other intellectual property will not otherwise
become known to third parties. Similarly, if we recruit employees who breached
confidentiality, and/or non-compete covenants with their prior employers, we may become
subject to claims that such employees have improperly used or disclosed trade secrets or other
proprietary information in violation of their confidentiality, and/or non-compete covenants in
a way that unduly benefits us.
If we are unable to adequately protect our intellectual property rights, or if we are found
to infringe the intellectual property rights of others, our brand, competitive position, business
operations and financial condition could be materially and adversely affected.
Our insurance coverage may not be sufficient to cover all losses, which may increase our
costs of operation.
Our current insurance includes, among others, property insurance and cargo
transportation insurance. See “Business — Insurance.” We do not, however, carry insurance for
certain risks that we believe are not insurable under industry norm, or which are not on
commercially acceptable terms, if at all, such as those caused by war, tsunami, various
environmental pollution, acts of terrorism, labor strikes and civil unrest. Accordingly, there can
be no assurance that our insurance coverage is sufficient to prevent us from any loss or that we
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will be able to successfully claim our losses under our current insurance policies on a timely
basis, or at all. Any damage to our properties, such as fixed assets and inventories, that are not
covered by insurance may result in substantial losses for us. Nevertheless, we would remain
obliged for any bank borrowings or other financial obligations related to these damaged
properties. If we incur any loss that is not covered by our insurance policies, or the
compensated amount is significantly less than our actual loss, our business, financial condition
and results of operations could be adversely affected.
RISKS RELATING TO FINANCIAL, ACCOUNTING AND TAX MATTERS
We incurred net loss in 2024. Our operating history may not be a reliable predictor of our
prospects and future results of operations.
While we recorded profit for the year of RMB183.6 million and RMB133.6 million in
2022 and 2023, respectively, we incurred net loss for the year of RMB817.7 million in 2024.
We returned to profit for the period of RMB29.7 million in the first nine months of 2025, as
compared to loss for the period of RMB62.2 million in the same period of 2024. See “Financial
Information — Description of Key Items of Consolidated Statements of Profit or Loss” for
reasons of fluctuations in our profit or loss for the year. To improve our gross profit and gross
profit margin, we plan to enhance pricing controls and allocate more resources to higher-value
orders in order to maintain margin stability. In parallel, we will actively expand our presence
in overseas markets and accelerate the development of new products to strengthen product
differentiation and competitiveness. By fast-tracking the global rollout of high-quality,
high-barrier industrial robotics products, we aim to build a more resilient and profitable
product portfolio. Additionally, we will implement initiatives in managing our cost and
enhancing efficiency, such as optimizing our supply chain, increasing the adoption of
domestically sourced raw material alternatives, and applying lean manufacturing practices.
Nevertheless, there can be no assurance that these efforts will successfully lead us to achieve
profitability in the future.
We have recorded net operation cash outflow in the past, and our liquidity, financial
condition and prospects may be adversely affected if we continue to record net operation
cash outflow in the future.
We recorded net cash used in operating activities of RMB104.0 million in 2024. We
cannot assure you that we will always be able to generate positive cash flows from operating
activities in the future. If we continue to record net operating cash outflows in the future, our
working capital may be constrained, which may adversely affect our financial performance.
Our future liquidity primarily depends on our ability to achieve positive cash flows from our
operating activities and adequate external financing such as offering and issuing securities, or
other sources such as external debt, which may not be available on terms favorable or
commercially reasonable to us or at all. If we fail to obtain sufficient funding in a timely
manner and on reasonable terms, such as conditions, restrictive covenants or interest rates, or
at all, our ability to meet our payment obligations may be significantly affected and may not
be able to expand our business.
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Investments, acquisitions and divestitures may affect our financial results. We may not be
able to achieve our anticipated benefits and synergistic effects from such investments and
acquisitions.
Our financial results could be adversely affected by our investments or acquisitions. We
have in the past acquired or invested in assets, technologies or businesses that are
complementary to our existing business. We expect to continue to evaluate and consider a wide
array of potential strategic transactions as part of our overall business strategy, including
potential acquisitions of businesses, technologies, services, products and other assets, as well
as strategic investments, joint ventures and alliances.
The investments and acquired assets or businesses may not generate the financial results
we expect. They could result in occurrence of significant investments and goodwill impairment
charges. Goodwill arising on the acquisition of businesses is measured at cost less accumulated
impairment losses and is tested annually for impairment. As of December 31, 2022, 2023 and
2024 and September 30, 2025, we recorded goodwill of RMB1,485.7 million, RMB1,485.7
million, RMB1,104.1 million and RMB1,044.6 million, respectively. We measure goodwill for
impairment annually. There are inherent uncertainties relating to the factors in relation to the
assessment of goodwill impairment that might adversely affect our business operation, or under
circumstances where we might fail to sustain the growth as well as the gross profit margin we
have estimated. For details regarding our accounting treatment of goodwill, see “Financial
Information — Material Accounting Policies and Critical Accounting Judgements and
Estimates — Material Accounting Policies — Goodwill.” In 2024, we incurred impairment
losses on goodwill of RMB344.9 million. Our impairment losses on goodwill were primarily
due to the underperformance of certain subsidiaries, driven by reduced demand from specific
downstream sectors, including heavy industry. This decline reflected an industry-wide
slowdown, leading to revenue of these subsidiaries falling short of expectations and negatively
affecting our projected future cash flows. See “Financial Information — Description of Key
Items of Consolidated Statements of Profit or Loss — Impairment Losses on Intangible Assets
and Goodwill.” We cannot assure you that we will not recognize impairment charges in the
future. If we need to recognize material impairment of goodwill, our net profit in the
corresponding period might be substantially affected. In addition, any impairment on goodwill
may negatively affect our financial position and limit our ability to pursue financing activities,
as it could weaken key financial ratios.
We may be required to record a significant charge to earnings if our intangible assets or
other long-term assets become impaired.
Under IFRS, long-term equity investments, investment properties measured using the cost
model, fixed assets, construction in progress, right-of-use assets and intangible assets with
finite useful lives are tested for impairment if there is any indication that the assets may be
impaired at the balance sheet date. If the result of the impairment test indicates that the
recoverable amount of an asset is less than its carrying amount, a provision for impairment and
an impairment loss are recognized for the amount by which the asset’s carrying amount exceeds
its recoverable amount. Factors that may be considered a change in circumstances indicating
that the carrying amount of our intangible assets may not be recoverable include a decline in
market price of such assets, slower growth rates or other adverse changes in our industry and
the macroeconomic conditions, and if such assets become idle or obsolete.
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We may need to record a significant charge to earnings in our financial statements during
the period in which we determine that our intangible assets or other long-term assets have been
impaired. Any such charge would adversely impact our results of operations. As of December
31, 2022, 2023 and 2024 and September 30, 2025, the net carrying amount of our intangible
assets was RMB455.1 million, RMB553.4 million, RMB560.5 million and RMB560.5 million,
respectively. We recognized impairment losses on intangible assets of RMB15.6 million in
2024.
We may be subject to credit risk related to delay in payment and defaults of customers,
which would adversely affect our liquidity and financial condition.
Our trade receivables primarily arise from contracts with customers. The credit terms we
grant customers vary depending on the type of product, typically up to six months. The balance
of our trade receivables was RMB1,329.1 million, RMB1,707.2 million, RMB1,921.5 million
and RMB2,103.1 million, as of December 31, 2022, 2023 and 2024 and September 30, 2025,
respectively, which represented our maximum exposure as of the respective dates to credit risk
in relation to trade receivables. We recognized loss allowance of trade receivables of RMB79.7
million, RMB109.7 million, RMB144.9 million and RMB127.8 million as of December 31,
2022, 2023 and 2024 and September 30, 2025, respectively. The collection of amounts due
from our customers may not be timely. This might result in slow turnover of our trade and bill
receivables and restrict our working capital resources. The turnover days of our trade and bill
receivables were 135 days, 160 days, 215 days and 180 days in 2022, 2023, 2024 and the first
nine months of 2025, respectively. See “Financial Information — Discussion of Certain Key
Items from Our Consolidated Statements of Financial Position — Trade and Other
Receivables.” If we fail to receive payments from our customers on a timely basis, our cash
flow and financial position could be adversely affected. In addition, disputes that arise due to
default in payment by customers may also be time-consuming and costly for us in the event we
decide to claim such payments, and we may not be successful, in which case our liquidity,
results of operations and financial performance may be adversely affected.
If we fail to manage our inventory effectively, our results of operations, financial
condition and liquidity may be materially and adversely affected.
Our inventories primarily include (i) raw materials, (ii) work in progress, (iii) finished
goods, (iv) goods in transit, (v) goods delivered to customers, and (vi) contract costs. As of
December 31, 2022, 2023 and 2024 and September 30, 2025, the balances of our inventories
amounted to RMB1,130.5 million, RMB1,340.2 million, RMB1,721.0 million and
RMB1,446.2 million, respectively. Our inventory turnover days were 138 days, 141 days, 194
days and 158 days in 2022, 2023, 2024 and the first nine months of 2025, respectively. The
increase in our inventory turnover days from 2023 to 2024 was primarily driven by our
proactive strategy of maintaining higher inventory levels of certain general-purpose models to
promptly meet the needs of our key account customers and ensure operational readiness. The
decrease in our inventory turnover days from 2024 to the first nine months of 2025 was mainly
due to our enhanced management of finished goods inventory. However, we may not be able
to effectively manage our inventory level or to identify any excessive build-up or insufficient
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stock of inventory in our global operations. We may misjudge market demand. Inventory levels
in excess of customer demand may result in inventory write-downs or write-offs, and the sale
of excess inventory at discounted prices could impair the image of our brands and harm our
gross margin. As of December 31, 2022, 2023 and 2024 and September 30, 2025, our
write-down of inventories amounted to RMB58.1 million, RMB74.3 million, RMB112.5
million and RMB104.5 million, respectively. See “Financial Information — Discussion of
Certain Key Items from Our Consolidated Statements of Financial Position — Inventories.”
However, if we underestimate the demand for our products, insufficient stock could result in
delays in the shipment of our products, thereby impacting our ability to generate sales and
causing damages to our reputation and relationships with our customers. Therefore, failure to
maintain optimal inventory levels could increase our inventory holding costs or cause us to lose
sales, either of which could adversely impact our business, financial condition and results of
operations.
We had a prolonged cash conversion cycle during the Track Record Period, and our cash
flow may fluctuate due to our mismanagement of inventory and/or customers’ payment
practices.
During the Track Record Period, our suppliers generally granted us credit periods ranging
from three to six months upon receipt of the V A T invoices. In addition, to promptly meet the
needs of our key account customers and ensure operational readiness, we adopted a strategy of
maintaining higher inventory levels of certain general-purpose models. As significant
expenditures are required upfront for raw materials, components, and other production-related
costs, we typically incur net operating cash outflows during the initial stages of the production
cycle, and it is uncertain when such operating cash flows will transition from net outflows to
cumulative net inflows due to variations in the payment schedules of our customers. During the
Track Record Period, our cash conversion cycle, a metric measuring the efficiency of our
working capital management, was 137 days, 124 days, 161 days and 126 days in 2022, 2023,
2024 and the nine months ended September 30, 2025. Given that our cash conversion cycle is
relatively long, if we fail to effectively manage our inventory levels or if there are delays in
customers’ payment schedules compared to expectations, we may not have sufficient and
timely cash inflows to cover our financial obligations. We rely on the prompt settlement of
invoices to meet our payment obligations to suppliers. If there is a significant timing mismatch
between the receipt of payments from our customers and the payment of procurement costs,
and we are unable to effectively manage fluctuations in our operating cash flow, our operating
cash flow position and, in turn, our business, results of operations, and financial condition,
could be materially and adversely affected.
Failure to obtain or maintain any of the government grants could adversely affect our
business, results of operations, financial condition and prospects.
During the Track Record Period, government grants recognized under other income
primarily represent operating subsidies and the amortization of government grants related to
capital expenditures. The government grants we recognized as other income were RMB39.7
million, RMB41.1 million, RMB38.9 million, RMB31.0 million and RMB17.8 million in 2022,
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2023, 2024 and the first nine months of 2024 and 2025, respectively. The PRC governmental
authorities may decide to reduce or cancel such government grants or require us to repay part
or all of the government grants we previously received, which could adversely affect our
business, results of operations and financial condition. As these government grants are
provided typically on a one-off basis, there is no guarantee that we will continue receiving or
benefiting from them in the future. In addition, we may not be able to successfully or timely
obtain the government grants that may become available to us in the future, and such failure
could adversely affect our business, results of operations and financial condition.
We are exposed to changes in the fair value of our financial assets measured at fair value.
Fluctuations in their values would affect our results of operations and financial condition.
Our financial assets measured at FVPL comprise investments that are not held for trading,
including investments in unlisted equity securities and unlisted units in investment funds, as
well as investments in wealth management products. As of December 31, 2022, 2023 and 2024
and September 30, 2025, the carrying amount of our financial assets measured at FVPL was
RMB840.3 million, RMB727.4 million, RMB602.6 million and RMB391.3 million,
respectively. Our financial assets measured at FVOCI comprise investments in unlisted equity
securities. We also recorded financial assets measured at FVOCI of RMB134.5 million,
RMB141.4 million, RMB180.2 million and RMB173.3 million as of December 31, 2022, 2023
and 2024 and September 30, 2025, respectively. Fair values of financial assets at FVPL and
financial assets at FVOCI are determined based on quoted prices in active markets, other
market-observable inputs, or unobservable inputs using valuation techniques. See Notes 17 and
18 to the Accountants’ Report as set out in Appendix I to this prospectus.
For financial assets measured at FVPL and FVOCI, factors beyond our control can
significantly influence and cause adverse changes to the market-observable inputs that we use
and thereby affect the fair value of such financial assets. These factors include, but are not
limited to, general economic conditions, changes in market interest rates, stability of the capital
markets, shifts in our creditworthiness and other market-driven variables. Any of factors could
cause the fair values to fluctuate or our estimates to vary from actual results, which could
materially and adversely affect our results of operation and financial condition. Additionally,
judgment and estimation are required in establishing the relevant valuation techniques where
market-observable data for certain financial assets are not readily available, which inherently
involves a certain degree of uncertainty. Changes in assumptions relating to our valuation could
result in material adjustments to the fair value of such financial assets, which may have a
material adverse effect on our financial position and results of operations.
Our future capital expenditure on property, plant and equipment may result in an
increase in our depreciation expenses and may affect our profitability.
We have recorded a significant amount of property, plant and equipment. As of December
31, 2022, 2023 and 2024 and September 30, 2025, the carrying amount of our property, plant
and equipment amounted to RMB916.2 million, RMB1,321.8 million, RMB1,513.3 million and
RMB1,554.7 million, respectively. Our depreciation of property, plant and equipment were
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RMB62.7 million, RMB71.4 million, RMB93.5 million and RMB77.4 million in 2022, 2023,
2024 and the first nine months of 2025, respectively. As part of our business strategies to
enhance our production capabilities, we plan to expand our manufacturing capacities in both
China and overseas, and our investment is expected to cover land acquisition, the construction
of new facilities, and the procurement of advanced production equipment. See “Future Plans
and Use of Proceeds” for details. We expect these investments will result in additional annual
depreciation charges, which may have a material adverse effect on our financial position and
results of operations.
Our interest-bearing indebtedness exposes us to interest rate risk and our level of
indebtedness may prevent us from meeting relevant obligations under our indebtedness,
which may adversely affect our ability to raise additional capital to fund operations.
During the Track Record Period, we had certain borrowings to finance our business
operations and capital expenditures. We expect that we may continue to do so in the future and
our liquidity risk may increase. As of December 31, 2022, 2023 and 2024 and September 30,
2025, our bank loans and other borrowings were RMB2,883.4 million, RMB4,214.6 million,
RMB4,722.0 million and RMB4,436.7 million, respectively. The effective interest rates on our
bank loans ranged from 0.0% to 6.43% during the Track Record Period. Certain bank loans
during this period were linked to LIBOR, and fluctuations in LIBOR caused the interest rates
on these loans to decrease to zero. See “Financial Information — Indebtedness and Contingent
Liabilities — Bank Loans and Other Borrowings.”
We are exposed to interest rate risk resulting from interest rate fluctuations for our
long-term debt obligations with a floating interest rate. Rising interest rates could increase
interest expenses relating to our outstanding floating-rate borrowings, which could materially
and adversely affect our business, results of operations, financial condition and prospects.
High indebtedness levels could necessitate a greater allocation of our cash flow towards
principal and interest repayments, limiting funds available for working capital and strategic
initiatives. Additionally, it may constrain our flexibility in adapting to industry changes or
pursuing new opportunities, restrict access to further financing, and heighten our exposure to
interest rate fluctuations and unforeseen adverse events. Additionally, restrictive covenants in
the indebtedness may further limit our capacity to raise additional debt or equity financing,
potentially leading to defaults that could accelerate repayment obligations, jeopardizing our
financial stability. If we fail to manage our indebtedness properly, our business, results of
operations and financial condition may be materially and adversely impacted.
Our loan agreements may have included arrangements that impose material and adverse
effects on our financial condition, results of operations, cash flows and business prospects.
We enter into loan agreements to finance our business activities including acquisitions.
See “Financial Information — Indebtedness and Contingent Liabilities — Bank Loans and
Other Borrowings” for the details of our bank borrowings. Our loan agreements may contain
financial and other covenants that require us to maintain certain financial ratios or impose
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certain restrictions on the disposition of our assets or the conduct of our business. In addition,
the utilization of the remaining balance of these secured banking facilities is subject to certain
conditions, including time limits and certain financial performance requirements. Furthermore,
such loan agreements also include, and our future loan agreements may include, certain
restrictive covenants whereby we may be required to obtain approval from our lenders to,
among other things, incur additional debt, pledge assets, undertake guarantee obligations and
dispose of or sell assets. If we are not granted such approvals, we may not be able to obtain
additional financing or conduct certain other business activities that may be viewed as
favorable to us, and we cannot assure you that our financial resources will be adequate to
support our operations, and our financial condition, results of operations, cash flows and
business prospects may be materially and adversely affected. During the Track Record Period
and up to the Latest Practicable Date, we have complied with the major covenants in our loan
agreements.
We are subject to risk in our interests in associates and if our associates do not perform
as expected or do not generate sufficient revenue in any financial period, our financial
condition or results of operations could be materially and adversely affected.
During the Track Record Period, we invested in certain associates, which were accounted
for using the equity method. As of December 31, 2022, 2023 and 2024 and September 30, 2025,
the balances of our interests in associates were RMB52.6 million, RMB85.3 million, RMB46.3
million and RMB263.9 million, respectively. If our associates do not perform as expected or
do not generate sufficient revenue in any financial period, our return of interests in our
associates, and our financial condition or results of operations, could be materially and
adversely affected.
Our interests in associates are subject to a variety of factors that may adversely affect
their performance, many of which are beyond our control. These include general economic
conditions that may reduce demand or increase operational challenges, fluctuations in interest
rates that can impact borrowing costs and profitability, and the availability of financing which
may affect the associates’ ability to maintain or grow their operations. In addition, supply and
demand imbalances in relevant markets may lead to volatility or business disruptions. Even if
our associates report profits under equity accounting, there is no assurance that these will
translate into actual cash flow for us, especially in the absence of declared dividends.
Furthermore, strategic misalignment or financial difficulties faced by other shareholders in
these associates may also negatively impact our investment.
We may require additional capital to support our business growth, and failure to obtain
such financing on acceptable terms or at all could adversely affect our operations and
financial condition.
We may require additional capital resources in the future to support the continued
development of our business, particularly in connection with expanding our manufacturing
capabilities, investing in R&D, upgrading our technological infrastructure, entering new
markets, or pursuing strategic acquisitions and partnerships. Our need for additional capital
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could arise from factors beyond our control or not currently anticipated, including changes in
market conditions, regulatory developments, or competitive pressures. If our available
resources are insufficient to satisfy our capital requirements, we may need to seek additional
financing through public or private offerings of equity or debt securities, bank loans, or other
sources. There can be no assurance that we will be able to obtain such financing on favorable
terms or at all. If we are unable to raise the necessary funds, we may be forced to delay, reduce
or eliminate certain aspects of our operations, including planned expansion, technology
upgrades or other strategic initiatives. Such outcomes could materially and adversely affect our
business, financial condition and results of operations.
In addition, any issuance of additional equity or equity-linked securities could dilute the
ownership interests of our existing Shareholders. Further, if we incur additional indebtedness,
we may become subject to restrictive covenants that limit our operational flexibility, including
our ability to pay dividends, incur additional debt, or make certain investments and
acquisitions. Increased debt obligations could also result in higher interest payments and
financial risk. Accordingly, our ability to secure future financing as needed will be crucial to
maintaining and growing our competitive position in the industrial robotics industry.
Fluctuations in exchange rates may result in foreign currency exchange losses and may
have a material adverse effect on your investment.
As we operate a part of our business in certain countries and regions outside of Chinese
Mainland, and have debts and cash denominated in foreign currencies, we are exposed to risks
associated with foreign currency exchange fluctuations. Certain of our income from overseas
sales is denominated in foreign currencies such as USD and EUR. In managing the foreign
exchange risks, we may engage in foreign exchange hedging transactions with financial
institutions to mitigate and manage exchange rate risks. These transactions may include
forward foreign exchange contracts, foreign exchange swaps, currency swaps, foreign
exchange options and other foreign exchange derivative instruments. We may maintain or
further enhance our hedging policies in the future. However, the effectiveness of these hedging
measures may be limited, and we may not be able to adequately cover our foreign exchange
exposure or at all. We recorded net foreign exchange losses of RMB2.5 million and RMB7.0
million in 2023 and the first nine months of 2025. It is difficult for us to predict how external
factors may impact the exchange rate of RMB to USD, EUR or other foreign currencies in the
future. Further appreciation of RMB against foreign currencies may affect our overseas
operations.
On the other hand, if we decide to convert our RMB into Hong Kong dollars for dividends
payment on our H Shares or for other business purposes, any depreciation of RMB against the
Hong Kong dollar would have a negative effect on the value of, and any dividends payable on,
our H Shares.
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RISKS RELATING TO OUR OPERATIONS
Our ability to maintain a skilled and stable workforce is critical to our innovation,
competitiveness, and operational success.
Our business relies heavily on a team of experienced engineers, technical specialists, and
industry-savvy managers who possess deep expertise in industrial robotic technologies. These
individuals play a central role in driving product development, managing complex deployment
processes, and delivering high-value solutions to our customers. The demand for such
specialized talent is high and continues to intensify across the industry.
We face ongoing competition from both domestic and international companies seeking to
recruit from a limited pool of qualified professionals. In addition, the rapid pace of
technological advancement in our sector requires continual upskilling and adaptability, making
retention and ongoing development of talent both a strategic priority and a risk.
Our efforts in motivating our employees and building an inclusive corporate culture may
not always suffice to retain key personnel or attract new talent at the pace required by our
growth trajectory. Any significant attrition, particularly within our R&D, product development,
or technical support teams, could delay project timelines, impact product quality, or reduce our
ability to respond swiftly to market demands. Such disruptions could materially and adversely
affect our business operations, innovation pipeline, and financial results.
We rely on a balanced direct sales and distribution strategy to drive growth, and any
failure to manage these channels effectively could adversely and materially impact our
business and results of operations.
Our sales network includes both direct sales channels and distributors, each playing a
critical role in expanding market coverage, supporting customer relationships, and driving the
adoption of our industrial robotic solutions. See “Business — Sales and Marketing” for details.
The effectiveness of this multi-channel approach depends on our ability to maintain productive
relationships with existing distributors, onboard qualified new partners, and ensure consistent
performance across our sales channels.
Distributors are instrumental in penetrating diverse markets, but they may vary in their
ability to market, install, and support our products. There were 62, 75, 102 and 103 distributors
who contributed to our revenue in 2022, 2023, 2024 and the first nine months of 2025,
respectively. If any distributor fails to perform, reduces its purchase volume, violates
contractual terms, or fails to align with our brand standards, it may disrupt our market
presence, harm our reputation, or lead to inventory accumulation. At the same time, we operate
direct sales channels that require close customer engagement and tailored solution design.
Failure to maintain strong relationships with direct customers or to manage potential channel
conflicts between direct sales and distributors, such as price competition or customer overlap,
may undermine the efficiency of our sales organization.
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As we continue to scale, we may face challenges in harmonizing incentives, avoiding
internal competition, and adapting to evolving customer preferences or regulatory changes.
Any misalignment or inefficiency in our channel strategy could adversely affect our sales
performance, financial condition, and long-term growth prospects.
Environmental, social, and governance matters may impact our business and reputation.
In addition to the importance of their financial performance, companies are increasingly
being evaluated by their performance on a variety of environmental, social, and governance
(“ESG”) matters, which are considered to contribute to the long-term sustainability of their
companies’ performance. A variety of organizations measure the performance of companies on
ESG topics, and the results of these assessments are widely publicized. In addition, investment
in funds that specialize in companies that perform well in such assessments are increasingly
popular, and major institutional investors have publicly emphasized the importance of ESG
measures to their investment decisions. Topics taken into account in such assessments include,
among others, the Company’s efforts and impacts, including impacts associated with suppliers
or other partners, on climate change, ethics and compliance with law, diversity, and the role of
the Board in supervising various sustainability issues.
In light of investors’ increasing focus on ESG matters, there can be no assurance that we
will manage such issues successfully, or that we will successfully meet society’s expectations
as to our proper role. Any failure or perceived failure by us in this regard could have a material
adverse effect on our reputation and on our operation results, including the sustainability of our
business over time.
Changes in international trade and investment policies, and escalations of tensions in
international relations could materially and adversely impact our business and operating
results.
As we continue to expand our global footprint, our business operations and financial
performance may be influenced by international trade and investment policies, export controls,
and economic or trade sanctions. Countries impose, modify, and remove tariffs and other trade
restrictions in response to a diverse array of factors, including global and national economic
and political conditions, which make it difficult to predict future developments regarding
tariffs and other trade restrictions. Notably, in April 2025, the U.S. government adopted a
two-tier tariff structure, and several countries or jurisdictions, including China, also announced
higher tariff rates on U.S. goods entering their borders. As of the Latest Practicable Date, China
and the U.S. had agreed a truce to lower import taxes on goods being traded between the two
countries. However, it is possible that additional trade policy measures, including new tariffs,
import/export restrictions, or technology controls, may be implemented. Any such
developments could create additional challenges for companies with a global presence like
ours.
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Throughout the Track Record Period, we generated an insignificant portion of revenue
from the U.S. However, we have not exported any products directly from Chinese Mainland to
the U.S., and products sold in the U.S. are usually manufactured in Europe. During the Track
Record Period, some of our products incorporate a low level of U.S.-origin electronics. We also
used few U.S.-branded manufacturing equipment, which have fallen into disuse since 2024.
That said, our International Sanctions Legal Advisers have advised that our sales activities
during the Track Record Period should not give rise to material risks under U.S. export
controls, because the Group’s products sold worldwide do not incorporate more than a de
minimis level of controlled U.S. items, nor are they subject to the Export Administration
Regulations by virtue of being foreign direct products of U.S. technologies. Therefore, our
Directors believe that recent geopolitical developments and U.S.-China trade tensions have not
had a material impact on our operational or financial performance.
While the U.S. market does not constitute a significant portion of our overall financial
performance, and we do not expect any material change in the near future, we have
implemented measures to mitigate the impact of U.S. tariffs. In particular, we have increased
local value-added activities in the U.S. to lower the proportion of imported components subject
to tariffs. In addition, we have refined our customs declaration procedures to ensure that tariff
assessments apply only to specific components covered by the relevant tariff codes, rather than
to the entire product. At the same time, we are actively expanding our presence in the European
market, such as by establishing local manufacturing facilities, to better manage and mitigate
potential impacts from U.S.-China trade tensions.
In October 2025, MOFCOM announced in Announcement No.61 of 2025( 2025 ϋୋ61
໮ʮѓ) and Announcement No. 62 of 2025 ( 2025 ϋୋ62໮ʮѓ) (the
“Announcements ”), stipulating that export licenses will be required for the export of
Chinese-origin rare earth materials and technologies used in rare earth mining and processing.
Specifically, according to the Announcements, export license applications intended for or
potentially used for military or terrorist final purposes will, in principle, not be approved. In
addition, export license applications for rare earth materials used in certain highly advanced
technologies, including logic chips at 14 nanometers or below, storage chips with 256 layers
or more, and production equipment, testing equipment, and materials for the aforementioned
semiconductors, will be subject to case-by-case review. Moreover, the MOFCOM has stated
that all compliant export license applications intended for civilian purposes will be approved.
On October 30, 2025, China agreed to suspend the implementation of the Announcements for
one year. We use rare earth elements in our in-house production processes conducted in
Chinese Mainland. A limited number of components imported from overseas, including from
the U.S., may contain certain rare earth elements. However, we have already identified readily
available substitutes for these components in the event of supply disruption. Accordingly, we
believe that the recent developments in China’s export control measures on rare earths are not
expected to have a material adverse impact on our production or procurement.
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The U.S. and other jurisdictions or organizations, including the EU, the UK, the UN and
Canada, have, through executive orders, legislations or other governmental means,
implemented measures that impose economic and trade sanctions against certain countries or
regions or against targeted industry sectors, groups of companies or persons and/or
organizations within such countries or regions. The extent and scope of such sanctions may
escalate. These restrictions or regulations, and similar or more expansive restrictions or
regulations that may be imposed by the U.S. or other jurisdictions in the future, may materially
and adversely affect our ability to acquire technologies, raw materials, or components that may
be critical to our business operations. Any uncertainties or changes in current or future
restrictions or regulations could adversely affect our reputation and business.
The potential introduction of additional or expanded restrictions by relevant jurisdictions
could materially and adversely affect our business operations. For example, on October 28,
2024, the U.S. Department of the Treasury issued a final rule on outbound investment, or the
“Outbound Rule,” which came into effect on January 2, 2025. The Outbound Rule imposes
investment prohibition and notification requirements for certain types of outbound investments
made by U.S. persons in certain entities associated with a country of concern who are involved
in specified activities in certain sensitive sectors, collectively defined as “Covered Foreign
Persons.” The Outbound Rule identifies three sensitive sectors: semiconductors and
microelectronics, quantum information technologies and artificial intelligence. As advised by
our International Sanctions Legal Advisers, we are likely to be deemed a “Covered Foreign
Person” due to our business activities, specifically those related to the development of AI
systems intended to be integrated in industrial robots. That said, based on the advice of our
International Sanctions Legal Advisers as to the Outbound Rule, a U.S. person’s investment
into us, including the purchase of H Shares through the Global Offering, should not constitute
a prohibited transaction. This is due to the fact that our AI systems are not developed for the
prohibited end uses (i.e., military, government intelligence or mass-suveillance), nor do they
meet the computing power thresholds. U.S. persons would be required to notify the U.S.
Department of Treasury of their participation in the Global Offering. Following the completion
of the Global Offering, it is expected that U.S. persons will be able to invest in our H Shares
based on the publicly traded securities exception under the Outbound Rule as long as the
investment made does not afford a U.S. person certain rights that are not standard minority
shareholder protections. However, the Outbound Rule nonetheless may increase the
compliance burden of U.S. investors and may cause certain U.S. investors to adopt a more
cautious approach in their investments, affecting the investor sentiment towards us, and
therefore negatively impacting our ability to raise capital. Additionally, the trading price of our
H Shares may be materially and adversely affected. Moreover, the relevant laws, regulations,
and policies continue to evolve and we cannot rule out potential amendments to the Outbound
Rule that further restrict U.S. person investment. If our ability to raise such capital is
significantly and negatively affected, it could materially and adversely impact our business,
financial condition and prospects.
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Our business growth and results of operations may be affected by changes in global and
regional macroeconomic conditions, natural disasters, health epidemics and pandemics,
and social disruption and other outbreaks.
Uncertainties about global economic conditions and regulatory changes and other factors
including fluctuation of interest rates, inflation level, unemployment, labor and healthcare
costs, access to credit, consumer confidence and other macroeconomic factors may pose risks
and materially and adversely affect demand for our products. In addition, natural disasters such
as floods, earthquakes, sandstorms, snowstorms, fire or drought, the outbreak of a widespread
health epidemic or any severe epidemic disease such as SARS, Ebola or Zika, acts of war,
terrorism or other force majeure events beyond our control may disrupt our R&D,
manufacturing, marketing activities and other business operations, all of which could adversely
affect our business, results of operations, financial condition and prospects.
Failure to comply with PRC laws and regulations in relation to social insurance premium
and housing provident funds may subject us to penalties and have an adverse impact on
our financial conditions and results of operations.
PRC laws and regulations require us to participate in various employee benefit plans,
including social insurance, unemployment insurance, medical insurance, maternity insurance,
work-related injury insurance and the housing provident fund. According to the 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 in amounts equal to certain percentages of salaries, including bonuses and
allowances, of employees up to the maximum amounts specified by the local governments.
During the Track Record Period, we did not fully comply with the rules and regulations
in relation to social insurance and housing provident fund, which may subject us to liabilities
and/or penalties. We did not make full social insurance and housing provident fund
contributions for certain of our employees as required by relevant laws and regulations, and
certain of our subsidiaries engaged third-party agents to social insurance and housing provident
fund for some of their employees, which are not in strict compliance with the applicable laws
and regulations. During the Track Record Period and up to the Latest Practicable Date, we were
not imposed any administrative penalties as a result of our non-compliance with PRC laws and
regulations in relation to social insurance and housing provident fund. Our PRC Legal Advisors
are of the view that the likelihood of us being subject to centralized collection of the
outstanding historical social insurance and housing provident fund contributions and any
material penalties due to the failure to provide such contributions in full amount for our
employees is remote, according to the applicable regulatory policies, provided no claims or
complaints are filed against us by our employees and no significant changes in existing laws,
regulations, policies, or implementation or supervision requirements of the relevant
government authorities.
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We cannot assure you that the relevant government authorities will not impose new
requirements on us according to laws, regulations or local policies published by the relevant
government authorities in the future, such as ordering us to make supplemental social insurance
and housing provident fund contributions, imposing late fees or fines on us or ordering us to
take other measures, any of which may materially and adversely affect our business, financial
condition and results of operations.
Failure to comply with PRC property-related laws and regulations regarding certain of
our leased properties may adversely affect our business, financial condition and results of
operations.
As of the Latest Practicable Date, our 88 lease agreements failed to be registered with the
relevant PRC government authorities. As advised by our PRC Legal Advisors, failure to
register an executed lease agreement will not affect its validity. However, we may be subject
to a fine of no less than RMB1,000 and not exceeding RMB10,000 for each unregistered lease
agreement if the relevant PRC government authorities require us to rectify and we fail to do
so within the prescribed time period. See “Business — Property” for details.
We may be subject to legal proceedings or disputes that could result in significant costs,
divert management attention, and harm our reputation and financial performance.
In the ordinary course of our operations in the industrial robotic solutions industry, we
may from time to time be involved in legal proceedings, contractual disputes, claims, or
regulatory investigations initiated by customers, suppliers, employees, competitors, or
government authorities. These proceedings may include, but are not limited to, allegations of
product defects, contractual breaches, employment issues, or intellectual property disputes.
The outcome of any legal or administrative proceeding can be inherently uncertain and may not
always be resolved in our favor.
Even unfounded or immaterial claims may require significant resources to defend and
could result in costly settlements, fines, or operational restrictions. In some cases, litigation
may result in changes to our business practices, product offerings, or licensing arrangements.
Furthermore, any unfavorable judgment or protracted legal dispute could divert management’s
attention, disrupt operations, and damage our reputation with customers and business partners.
Additionally, we may, at times, need to initiate legal actions to enforce our rights.
However, the effectiveness of such efforts may be limited by the complexity and
unpredictability of the legal and regulatory systems, particularly in jurisdictions where we have
limited operational history or where enforcement may be inconsistent. If any material litigation
or regulatory proceeding were to arise or escalate, the impact on our financial condition,
operating results, and public perception could be significant.
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Our ability to build and protect our brand and reputation is critical to our growth, and
any harm to our brand or reputation could adversely affect our business, financial
condition, and prospects.
In the industrial robotic solutions industry, brand recognition and trust play a crucial role
in customer decision-making, especially given the critical nature of industrial robotic solutions
and the significant investment typically involved. Our future growth and competitive
positioning depend substantially on our ability to develop and maintain a reputable,
differentiated brand that is associated with technological reliability, innovation, and quality
service. However, we are a relatively young company compared to certain industry players
with significantly longer operating histories, broader market recognition, and more established
brand equity. These incumbents may be perceived as more stable or credible partners by
customers, especially in conservative or highly regulated sectors, making it more challenging
for us to win new contracts or retain clients in competitive tenders.
Our brand and reputation are also inherently vulnerable to factors that are difficult to
predict or control. Any negative publicity, whether arising from actual or perceived issues
related to our products, services, customer experience, leadership team, or business partners,
could quickly erode customer confidence. For instance, product malfunctions, delays in
delivery, or safety incidents could result in unfavorable comparisons with competitors,
undermine our credibility, and reduce customer willingness to engage with us. In today’s
digital environment, reputational damage can be amplified rapidly through social media and
online platforms. Even baseless claims, unfair competitor tactics, or isolated incidents can
disproportionately impact stakeholder perceptions. Additionally, reputational harm suffered by
suppliers, distributors, or other third parties associated with our brand may reflect poorly on
us, regardless of our direct involvement.
We invest in branding, marketing, customer engagement, and after-sales support to
strengthen our market position, but there is no assurance these efforts will be successful or
sufficient. If we fail to maintain and grow our brand reputation, it could limit our ability to
attract customers, form strategic partnerships, recruit top talent, and ultimately, affect our
business performance and long-term prospects.
If our current and future infrastructure, internal systems, operational processes, and
control measures are unable to support our continuous business expansion, our business
and prospects may be materially and adversely affected.
Our business has been growing in recent years. As we expand our product portfolio,
customer base and geographical coverage, we will need to work with a larger number of
suppliers and partners efficiently. We also need to continuously enhance and upgrade our
infrastructure and technology, optimize our supplier management, refine our reporting systems
and operational procedures, expand our employee base, train and incentivize our employees,
and improve our internal control. All these efforts will require significant managerial, financial
and human resources. We cannot assure you that such efforts will be successful. We cannot
assure you that our current and future infrastructure, internal systems, operational procedures
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and internal control measures will be adequate and successful to support our expanding
business or that our strategies and new business initiatives will be executed successfully. In
addition, changes and developments taking place in industries that we operate in may also
require us to re-evaluate our business model and adopt material changes to our long-term
strategies and business plans. Our failure to adapt to these changes and developments and
innovate may have a material adverse effect on our business, financial condition and results of
operations. Even if we adapt to these changes and developments and innovate, we may
nevertheless fail to realize the anticipated benefits of changes due to these measures, or our
profitability may be harmed as a result.
Our compliance and risk management systems may not be sufficient to protect us from
credit, market, liquidity, operation and other risks.
Given our global business operations, we must comply with a broad range of legal and
regulatory requirements in multiple jurisdictions and local operational business processes. We
have established compliance and risk management systems that support our operational
business processes to comply with laws and regulations. However, there can be no assurance
that our compliance and risk management systems are adequate to address all applicable risks
in every jurisdiction. Similarly, we can provide no assurance that such internal controls and
systems of joint ventures and other business partners can be aligned with our own, and we may
have to rely on their internal controls and systems for the compliance of their business
practices.
In addition, the policies we have put in place to prevent direct or indirect acts of
corruption, bribery, anti-competitive behavior, money laundering, breaches of sanctions, fraud,
deception, tax evasion and other criminal or improper conduct may be insufficient to prevent
such non-compliance.
The occurrence of any of these risks may result in reputational damages and material
adverse legal consequences, including without limited to suspension or revocation of our
relevant licenses related to business operation, revocation of qualifications of our management
or employees, the imposition of fines or sanctions and penalties on us or the members of our
management or employees and could lead to the assertion of damages claims by third parties
or to other detrimental legal consequences, including civil and criminal penalties. If any of
these risks were to materialize, this could also have a material adverse effect on our business,
financial condition and results of operations, reputation or prospects.
Our operations rely on IT systems and networks, and any IT system failures, network
disruptions or cybersecurity breaches may affect our business.
We rely extensively on IT systems, some of which are supported by third-party vendors,
to manage and operate our business. If these systems malfunction, cease or experience
interruptions in normal operations, experience security breaches or do not provide the
anticipated benefits, our ability to manage our operations could be impaired, which could have
an adverse impact on our operations and financial condition. If the software installed on the
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computers used by us and our employees is not properly authorized or licensed, we may be
subject to claims or litigations from software vendors. We may be subject to IT system failures
or network disruptions caused by natural disasters, accidents, power disruptions, telecom
failures, acts of terrorism or war, computer viruses, physical or electronic break-ins or other
events. We have business continuity and disaster recovery ability, which may not be sufficient
for managing operational disruptions resulting from circumstances beyond our control.
Our IT systems may be subject to computer viruses, malicious codes, unauthorized
access, phishing and other cyberattacks. We continue to assess potential threats and adopt
proper measures to address these threats. However, because the techniques used in these
cyberattacks change frequently and may be difficult to detect for periods of time, we may face
difficulties in implementing adequate preventative measures. To date, we have seen no material
impact on our business or operations from these attacks. However, we cannot guarantee that
our efforts will prevent attacks or breakdowns to our or our third-party providers’ databases or
systems. If the IT systems, networks or service providers we rely upon fail to function properly
and we do not effectively address these failures on a timely basis, we may be exposed to
business harm as well as litigation and regulatory action, including administrative fines, which
could adversely affect our business and financial condition.
RISKS RELATING TO DOING BUSINESS IN THE JURISDICTIONS WHERE WE
OPERATE
Changes in economic, political and social conditions, as well as government policies, laws
and regulations, and industry practice guidelines in the countries where the Company
operates could have an adverse effect on our business, financial condition and results of
operations.
Our business, financial condition and results of operations may be influenced by the
economic, regulatory, political and social conditions in the country where we operate.
Governments have implemented, and may continue to introduce, among others, various
policies and measures to encourage economic growth and guide the allocation of resources.
The industrial robotic solutions industry in general is affected by macro-economic factors,
including international, national, regional and local economic conditions, trade relationships,
employment levels, customer demand and discretionary spending. Any changes in these factors
may have a material and adverse effect on our business, financial condition and results of
operations.
Differences embedded in the legal systems of certain geographic markets where we
operate could affect our business, financial condition and results of operations.
The legal systems of the geographic markets where we operate vary significantly from
jurisdiction to jurisdiction. Some jurisdictions have a civil law system based on written statutes
and others are based on common law. Unlike the common law system, prior court decisions
under the civil law system may be cited for reference but have limited precedential value.
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The legal systems of some geographic markets where we operate are consistently
evolving. Laws and regulations that have recently been enacted may not sufficiently cover all
aspects of economic activities in such markets. In particular, the interpretation and enforcement
of these laws and regulations are subject to future implementations, and the application of some
of these laws and regulations to our businesses still needs further clarification. Since local
administrative and court authorities are authorized to interpret and implement statutory
provisions and contractual terms, it may be difficult to evaluate the outcome of administrative
and court proceedings and the level of legal protection we have in many of the geographic
markets where we operate. Local courts may have discretion to reject enforcement of foreign
awards or arbitration awards, which may affect our judgment on the relevance of legal
requirements and our ability to enforce our contractual rights or claims.
Furthermore, many of the legal systems in the geographic markets where we operate are
based in part on their respective government policies and internal interpretations, some of
which may have retroactive effects. As a result, we may not be aware of our violation of certain
policies or rules until sometime after the violation. In addition, administrative and court
proceedings in certain of our geographic markets may be protracted, resulting in substantial
costs and diversion of resources and management attention depending on the complexity of the
cases.
Scrutiny and regulations of the industries in which we operate may further increase, and
we may be required to devote additional legal and other resources to addressing these
regulations. Developments in current laws or regulations or the imposition of new laws and
regulations in our geographic markets may affect the growth of our industries and affect our
business, financial condition and results of operations.
Filing with the CSRC may be required in connection with our capital raising activities,
and we cannot predict whether we will be able to complete such filing.
On February 17, 2023, the CSRC released the Overseas Listing Trial Measures and five
relevant guidelines, which became effective on March 31, 2023. The Overseas Listing Trial
Measures require, among others, that PRC domestic companies that seek to initially offer and
list securities in overseas markets, either directly or indirectly, file the required documents with
the CSRC within three business days after its application for overseas listing is submitted. For
details, see “Regulatory Overview — Laws and Regulations Relating to Overseas Listings.”
We are required to comply with the filing procedures of the CSRC within a specific time
limit as required by the Overseas Listing Trial Measures, the failure of which may restrict our
ability to complete the proposed Listing. We may be subject to approval, filing or other
requirements by other PRC government authorities under the PRC laws in the future. Any
failure to complete the relevant procedures may have an adverse effect on our capital raising
activities.
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Our business is subject to a variety of laws, rules, policies and other obligations regarding
data protection domestically and aboard. Any losses or unauthorized access to or
unauthorized releases of confidential information and personal data could subject us to
significant reputational, financial, legal and operational consequences.
Our business involves the utilization and storage of confidential information, including
but not limited to personal information with respect to our employees. We are subject to laws
relating to the collection, use, retention, protection and transfer of personal information
domestically and aboard. In many cases, these laws apply not only to third-party transactions,
but also may restrict transfers of personal information between us and our overseas
subsidiaries. Several jurisdictions have passed laws in this area, and other jurisdictions are
considering imposing additional restrictions. These laws continue to develop and may vary
from jurisdiction to jurisdiction. Complying with emerging and changing overseas
requirements may cause us to incur substantial costs or require us to change our business
practices. Non-compliance could result in significant penalties or legal liability. Any failure by
us to comply with other domestic and foreign privacy-related or data protection laws and
regulations could result in proceedings against us by governmental entities or others, which
may lead to reputational impacts and significant legal liabilities.
We have implemented systems and processes intended to secure our information
technology systems and prevent unauthorized access to or loss of sensitive data, including
through the use of encryption and authentication technologies. As with all companies, these
security measures may not be sufficient for all eventualities and may be vulnerable to hacking,
employee error, malfeasance, system error, faulty password management or other non-
compliant incidents.
We are subject to the currency exchange regulatory system.
The conversion of RMB into foreign currencies should be in compliance with relevant
laws and regulations. We receive the vast majority of our revenue in Renminbi. Shortages in
the availability of foreign currency may restrict our ability to remit sufficient foreign currency,
or otherwise satisfy our foreign currency denominated obligations. Under the existing PRC
foreign exchange regulations, payments of current account items, including profit distributions,
interest payments and trade and service-related foreign exchange transactions, can be made in
foreign currencies without prior SAFE approval by complying with certain procedural
requirements. However, approval from or registration with competent government authorities
is required where RMB is to be converted into foreign currency and remitted out of China to
pay capital expenses such as the repayment of loans denominated in foreign currencies. The
PRC government may restrict access to foreign currencies for current account transactions in
the future. If the foreign exchange control system prevents us from obtaining sufficient foreign
currencies to satisfy our foreign currency demand, we may not be able to pay dividends in
foreign currencies to our Shareholders. Further, we cannot assure you that new regulations will
not be promulgated in the future that would have the effect of further restricting the remittance
of RMB into or out of China.
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Y ou may experience difficulties in effecting service of the legal process upon us and our
management and seeking recognition and enforcement of judgments against them across
jurisdictions.
The legal systems across different jurisdictions vary significantly. Therefore, the effecting
service of legal process and the process of recognizing and enforcing any judgments may be
different across jurisdictions and are subject to treaties or arrangements providing for the
recognition and enforcement of judgments made by courts of other jurisdictions. As a result,
investors may experience difficulties to effect service of process and/or recognize and enforce
any judgments for disputes brought in other jurisdictions.
We are a company incorporated under the laws of the PRC, and the majority of our assets
are located in the PRC. Substantially all of our Directors and senior management reside within
the PRC, and the assets of our Directors and senior management are likely to be located within
China. As a result, it may be difficult for you to effect service of process within Hong Kong,
the United States or elsewhere outside the Chinese Mainland upon us or these persons, or to
bring an action in Hong Kong against us or these individuals. Moreover, the PRC has not
entered into treaties with certain other jurisdictions that provide for the reciprocal recognition
and enforcement of judicial rulings and awards.
An original action may only be brought in the PRC against us or our Directors and senior
management if the actions are not required to be arbitrated by the PRC laws and upon
satisfaction of the conditions for commencing a cause of action pursuant to the civil procedure
laws in the PRC.
Investors of our H Shares may become subject to PRC taxation on dividends received
from us and gains from the disposition of our H Shares.
Individual holders of H Shares who are not residents of Chinese Mainland and whose
names appear on the register of members of H Shares (the “ Non-PRC Resident Individual
Holders ”), are subject to PRC individual income tax on dividends received from us. Pursuant
to the Circular on Questions Concerning the Collection of Individual Income Tax Following the
Repeal of Guo Shui Fa [1993] No. 045 (਷೼೯[1993]045੻೼
) dated June 28, 2011 and issued by the STA, the tax rate applicable to
dividends paid to Non-PRC Resident Individual Holders of H Shares varies from 5% to 20%
(usually 10%), depending on whether there is any applicable tax treaty between the PRC and
the jurisdiction in which the Non-PRC Resident Individual Holder of H Shares resides, as well
as the tax arrangement between the Chinese Mainland and Hong Kong. Non-PRC Resident
Individual Holders who reside in jurisdictions that have not entered into tax treaties with the
PRC are subject to a 20% withholding tax on dividends received from us. Meanwhile, under
the Individual Income Tax Law of the PRC () and its
implementation regulations, Non-PRC Resident Individual Holders of H Shares are subject to
individual income tax at a rate of 20% on gains realized upon the sale or other disposition of
H Shares.
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However, pursuant to the Circular Declaring that Individual Income Tax Continues to be
Exempted over Income of Individuals from Transfer of Shares (੻ᘱᚃ
) issued by the MOF and the STA on March 30, 1998, gains of
individuals derived from the transfer of listed shares of enterprises may be exempt from
individual income tax. Any collection of such tax in the future may materially and adversely
affect the value of such individual holders’ investments in H Shares.
Under the Enterprise Income Tax Law of the PRC ()
(the “EIT Law”) and its implementation regulations, a non-PRC resident enterprise is generally
subject to enterprise income tax at a rate of 10% with respect to its PRC-sourced income,
including dividends derived from a PRC company and gains derived from the disposition of
equity interests in a PRC company. This rate may be reduced under applicable double tax treaty
or arrangement between the PRC and the jurisdiction in which the non-PRC resident enterprise
resides. Pursuant to the Circular on Questions Concerning Withholding of Enterprise Income
Tax for Dividends Distributed by Resident Enterprises in the PRC to Non-resident Enterprises
Holding H-shares of the Enterprises (͏ΆุΣྤ̮Hٰ
) promulgated by the STA on November 6, 2008, we
intend to withhold tax at 10% from dividends payable to non-PRC resident enterprise holders
of H Shares (including HKSCC Nominees). Non-PRC resident enterprises that are entitled to
a reduced withholding rate under an applicable tax treaty or arrangement could apply to the
PRC tax authority for a refund of the excessive amount withheld, and payment of such refund
will be subject to the approval from the PRC tax authority. There is room for discretion as to
the interpretation and implementation of the EIT Law and its implementation rules by the PRC
tax authorities, regarding whether and how enterprise income tax on gains derived upon the
sale or other disposition of H Shares will be collected from non-PRC resident enterprise
holders of H Shares. If such tax is collected, the value of such non-PRC resident enterprise
holders’ investments in H Shares may be materially and adversely affected
Our offshore subsidiaries may be treated as a resident enterprise for PRC tax purposes.
Under the EIT Law and the Regulation on the Implementation of the Enterprise Income
Tax Law of the PRC (ૢԷ), enterprises established
under the laws of jurisdictions outside of Chinese Mainland with “ de facto management
bodies” located in Chinese Mainland may be considered PRC resident enterprises for tax
purposes and may be subject to the PRC EIT at the rate of 25% on their global income. In
addition, the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated
Enterprises as PRC Resident Enterprises on the Basis of De Facto Management Bodies (਷
ஷ
) (Guo Shui Fa [2009] No. 82) (the “ Circular 82 ”), specifies that certain Chinese-
controlled offshore incorporated enterprises, defined as enterprises incorporated by enterprises
or enterprise groups within Chinese Mainland as major controlling shareholders under the laws
of foreign countries (regions) will be classified as resident enterprises if all of the following
conditions are met: (i) senior management personnel and departments that are responsible for
daily production, operation and management are located mainly within Chinese Mainland; (ii)
financial and personnel decisions are subject to determination or approval by bodies or persons
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in Chinese Mainland; (iii) primary properties, accounting books, company seal, and minutes of
board meetings and shareholders’ meetings are located or kept within Chinese Mainland; and
(iv) at least half of the directors with voting rights or senior management reside within Chinese
Mainland. The SA T has subsequently provided further guidance on the implementation of
Circular 82.
As our Company is a PRC enterprise, our offshore subsidiaries may be questioned by the
competent regulatory authorities, and if our offshore subsidiaries are deemed PRC resident
enterprises, the competent regulatory authorities may request EIT at 25% on such our offshore
subsidiaries’ global income, except that the dividends they receive from our Chinese Mainland
subsidiaries, if any, 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.” Nonetheless, it remains subject to future interpretation as to 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 affect our cash
flows and profitability.
We could be subject to changes in our tax rates, the adoption of new tax legislation or
exposure to additional tax liabilities.
The EIT Law imposes a tax rate of 25% on business enterprises. Our Company and some
of our subsidiaries are entitled to preferential tax treatment. For example, several of our
subsidiaries in Chinese Mainland have been qualified as high-tech enterprises or engaged in
policy-encouraged businesses. Accordingly, they were entitled to a preferential income tax rate
of 15% during the Track Record Period. For details, see “Financial Information — Description
of Key Items of Consolidated Statements of Profit or Loss — Income Tax.” To the extent there
are any changes in the laws and regulations governing preferential tax treatment or increases
in our effective tax rate due to any other reasons, our tax liability would increase
correspondingly. In addition, the PRC government may amend or restate regulations on
income, withholding, value-added, and other taxes. Non-compliance with the tax laws and
regulations in Chinese Mainland may also result in penalties or fines imposed by relevant tax
authorities. Adjustments or changes to tax laws and regulations in Chinese Mainland and tax
penalties or fines could affect our businesses, financial condition and results of operations.
We also operate in countries and regions overseas and are subject to various taxes. Due
to the fact that the tax environment can be different in different jurisdictions and that the
regulations regarding various taxes, including but not limited to corporate income tax, are
complex, our overseas operations may expose us to risks associated with the overseas tax
policy changes. Due to economic and political conditions, tax rates in various jurisdictions may
be subject to significant change. Our effective tax rates could be affected by changes in the mix
of earnings in countries with differing statutory tax rates, changes in the valuation of deferred
tax assets and liabilities, or changes in tax laws or their interpretation. Dealing with such
regulatory complexities and changes may require us to invest more managerial and financial
resources, which in turn could affect our results of operations.
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We are also subject to the examination of our tax returns and other tax matters by local
and overseas tax authorities and governmental authorities. We regularly assess the likelihood
of an adverse outcome resulting from these examinations to determine the adequacy of our
provision for taxes. There can be no assurance as to the outcome of these examinations. If our
effective tax rates were to increase, or if the ultimate determination of our taxes payable is for
an amount in excess of amounts previously accrued, our financial condition, operating results
and cash flows could be adversely affected.
Payment of dividends is subject to restrictions under PRC law.
Under PRC law, dividends may be paid only out of distributable profits. Distributable
profits are defined as our profits after taxes as determined under PRC GAAP less any recovery
of accumulated losses and appropriations to statutory and other reserves that we are required
to make. As a result, we may not have sufficient, if any, distributable profits to enable us to
make dividend distributions to our Shareholders in the future, including periods for which our
financial statements indicate that our operations have been profitable. Any distributable profits
not distributed in a given year are retained and available for distribution in subsequent years.
Moreover, because the calculation of distributable profits under PRC GAAP is different
from the calculation under 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 flow and our ability to make dividend distributions to our Shareholders in the
future, including those periods in which our financial statements indicate that our operations
have been profitable.
RISKS RELATING TO THE GLOBAL OFFERING
We will be concurrently subject to listing and regulatory requirements of Chinese
Mainland and Hong Kong.
As our A Shares are listed on the Shenzhen Stock Exchange and our H Shares will be
listed on the Main Board of the Stock Exchange, we will be required to comply with the listing
rules (where applicable) and other regulatory regimes of both jurisdictions, unless an
exemption is available or a waiver has been obtained. Accordingly, we may incur additional
costs and resources in continuously complying with all sets of listing rules in the two
jurisdictions.
The characteristics of the A share and H share markets may differ.
Following the Global Offering, our A Shares will continue to be traded on the Main Board
of the Shenzhen Stock Exchange and our H Shares will be traded on the Main Board of the
Stock Exchange. Under current laws and regulations of China, without the approval from the
relevant regulatory authorities, our H Shares and A Shares are neither interchangeable nor
RISK FACTORS
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fungible, and there is no direct trading or settlement between the H Share and A Share markets.
With different trading characteristics, the H Share and A Share markets have different trading
volumes, liquidity and investor bases, as well as different levels of retail and institutional
investor participation. As a result, the trading performance of our H Shares and A Shares may
not be comparable. Nonetheless, 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 H Share
and A Share markets, the historical prices of our A Shares may not be indicative of the
performance of our H Shares. Y ou should therefore not place undue reliance on the trading
history of our A Shares when evaluating the investment decision in our H Shares.
Enforcement of certain share pledges by our Controlling Shareholder in case of default
under the relevant facilities could materially and adversely affect the prevailing market
price of our Shares, and could have a negative impact on our business, operation and
financial results.
As of the Latest Practicable Date, to secure the obligations under financial loans provided
by a financial institution to Nanjing Primest’s subsidiary, Nanjing Primest pledged 11,000,000
A Shares in our Company in favour of lending financial institution (the “ Share Pledge ”). See
“Substantial Shareholders.” As of the Latest Practicable Date, our Controlling Shareholders
Group, including Mr. Wu, Mr. Wu Kan (son of Mr. Wu), Ms. Liu Fang (ٹspouse of Mr.
Wu) and Nanjing Primest, was able to exercise approximately 42.15% voting rights in our
Company and will be beneficially interested in approximately 37.94% of the issued share
capital of our Company immediately upon the completion of the Global Offering (assuming
that the Over-allotment Option is not exercised). In the unlikely event of default by Nanjing
Primest under the Share Pledge and if there is no alternative source of funding available to
Nanjing Primest to repay relevant amounts, the Share Pledge may be enforced, which will have
a material adverse impact on our shareholding structure. The above may also result in sales or
a perception of the likelihood of sales of our Shares in the market which could have a material
and adverse effect on the market price of our Shares.
There has been no prior public market for our H Shares, and an active trading market for
our H Shares may not develop or be sustained.
Prior to the Global Offering, there was no public market for our H Shares. We cannot
assure you that a public market for our H Shares with adequate liquidity and trading volume
will develop and be sustained following the completion of the Global Offering. In addition, the
Offer Price of our H Shares is the result of negotiations between the Sponsor- Overall
Coordinator (for itself and on behalf of the Underwriters) and us, and may not be an indication
of the market price at which our H Shares will be traded following the completion of the Global
Offering. If an active public market for our H Shares does not develop following the
completion of the Global Offering, the market price and liquidity of our H Shares may be
materially and adversely affected.
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As the Offer Price of our H Shares is higher than the consolidated net tangible assets per
Share immediately prior to the Global Offering, purchasers of our H Shares in the Global
Offering may experience an immediate dilution.
Our existing Shareholders will receive an increase in the pro forma adjusted consolidated
net tangible asset value per Share of their H Shares. Purchasers of our H Shares in the Global
Offering will experience an immediate dilution.
There can be no assurance that if we were to immediately liquidate after the Global
Offering, any assets will be distributed to Shareholders after the creditors’ claims. To expand
our business, we may consider offering and issuing additional H Shares in the future.
Purchasers of Offer Shares may experience dilution in the net tangible assets value per Share
of their H Shares if we issue additional H Shares in the future at a price which is lower than
the net tangible assets value per Share at that time.
The price and trading volume of our H Shares may be volatile, which could lead to
substantial losses to investors.
The price and trading volume of our H Shares may be subject to significant volatility in
response to various factors beyond our control, including the general market conditions of the
securities in Hong Kong and elsewhere in the world. The Stock Exchange and other securities
markets have, from time to time, experienced significant price and trading volume volatility
that are not related to the operating performance of any particular company. The business and
performance and the market price of the shares of other companies engaging in similar business
may also affect the price and trading volume of our H Shares. In addition to market and
industry factors, the price and trading volume of our H Shares may be highly volatile for
specific business reasons, such as fluctuations in our revenue, earnings, cash flows,
investments, expenditures, relationships with our business partners, movements or activities of
key personnel, actions taken by competitors or regulatory developments. Moreover, shares of
other companies listed on the Stock Exchange have experienced price volatility in the past, and
it is possible that our H Shares may be subject to changes in price not directly related to our
business performance.
Future sales or perceived sales of our H Shares in the public market could have a material
adverse effect on the market price of our H Shares and our ability to raise additional
capital in the future, or may result in dilution of your shareholding.
The market price of our H Shares and our ability to raise equity capital in the future at
a time and price that we deem appropriate could be negatively impacted as a result of future
sales of our H Shares or other securities relating to our H Shares in the public market by our
Shareholders, or the issuance of new shares or other securities, or the perception that such sales
or issuances may occur. In addition, our Shareholders may experience dilution in their holdings
if we issue more securities in the future. Furthermore, we may issue shares pursuant to any
existing or future share option incentive schemes, which would further dilute our Shareholders’
interests in our Company. For example, on December 28, 2023 and April 19, 2024, Estun
RISK FACTORS
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Intelligent, one of our subsidiaries, entered into two share purchase agreements with external
investors and our Company, among others, pursuant to which Estun Intelligent issued shares
with redemption rights, liquidity preferences and anti-dilution rights to the external investors
for a total cash consideration of RMB380.0 million and RMB35.0 million respectively. Under
the share purchase agreements, the external investors have the option to exit their investment
by September 30, 2027, which can be achieved either through a qualified IPO of Estun
Intelligent or by requiring our Company to conduct a private placement of new shares to
purchase their equity interests in Estun Intelligent. For further details, please refer to
“Financial Information — Indebtedness and Contingent Liabilities — Indebtedness.” New
shares or equity-linked securities issued by us may also confer rights and privileges that take
priority over those conferred by the H Shares. Market sale of Shares by such Shareholders and
the availability of these Shares for future sale may have a negative impact on the market price
of our H Shares.
In addition, while investors subscribing shares in the Global Offering are not subject to
any restrictions on the disposal of the H Shares they subscribed, they may have existing
arrangements or agreement to dispose part or all of the H Shares they hold immediately or
within certain period upon completion of the Global Offering for legal and regulatory, business
and market, or other reasons. Such disposal may occur within a short period or any time or
period after the Listing Date. Any sale of the H Shares subscribed by such investors pursuant
to such arrangement or agreement could adversely affect the market price of our H Shares and
any sizeable sale could have a material and adverse effect on the market price of our H Shares
and could cause substantial volatility in the trading volume of our 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.
We have declared dividends in the past. However, there is no assurance that dividends of
any amount will be declared or distributed by us in any year in the future. Under the applicable
laws and regulations of Chinese Mainland, the payment of dividends may be subject to certain
limitations, and the calculation of our profit under the accounting standards for business
enterprises may differ in certain respects from the calculation under IFRS. The declaration,
payment and amount of any future dividends are subject to the discretion of our Board of
Directors, after taking into account various factors, including but not limited to our results of
operations, financial condition, cash flows, capital expenditure requirements, market
conditions, our strategic plans and prospects for business development, regulatory restrictions
on the payment of dividends and other factors as our Board of Directors may deem relevant,
and subject to the approval at Shareholders’ meeting. Any declaration and payment as well as
the amount of dividends will be subject to our constitutional documents and the applicable laws
and regulations of Chinese Mainland. For details, see “Financial Information — Dividends and
Dividend Policy.” No dividend shall be declared or payable except out of our profits and
reserves lawfully available for distribution. Our historical dividends should not be taken as
indicative of our dividend policy in the future.
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 Main Board of the Shenzhen Stock Exchange.
As our A Shares are listed on the Main Board of the Shenzhen Stock Exchange, we have
been subject to periodic reporting and other information disclosure requirements in Chinese
Mainland. As a result, from time to time, we publicly release information relating to us on the
Main Board of the Shenzhen Stock Exchange or other media outlets designated by the CSRC.
However, the information announced by us in connection with our A Shares listing is based on
regulatory requirements of the securities authorities, industry standards and market practices in
Chinese Mainland, which are different from those applicable to the Global Offering. The
presentation of financial and operational information for the Track Record Period disclosed on
the Main Board of the Shenzhen Stock Exchange or other media outlets may not be directly
comparable to the financial and operational information contained in this prospectus. As a
result, prospective investors in our H Shares should be 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
our 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 with respect to the Global Offering.
Y ou should read the entire prospectus carefully and should not rely on any information
contained in press articles or other media regarding us, our H Shares or the Global
Offering.
Prior or subsequent to the publication of this prospectus, there may have been or be press
and media coverage regarding us and the Global Offering. We have not authorized the
disclosure of any such information in the press or media. Financial information, financial
projections, valuation and other information about us contained in such unauthorized press or
media coverage may not truly reflect what is disclosed in the prospectus or the actual
circumstances. We do not accept any responsibility for such unauthorized press or media
coverage, or for the accuracy or completeness of any such information. We make no
representation as to the appropriateness, accuracy, completeness or reliability of any such
information. To the extent any such information appearing in the press and media is
inconsistent with, or conflict with, the information contained in this prospectus, we disclaim
responsibility for them. Accordingly, prospective investors are cautioned to make their
decisions on the basis of the information contained in this prospectus only and should not rely
on any other information.
The information in this prospectus derived from official government sources has not been
independently verified.
Certain facts, forecasts and other statistics in this prospectus relating to China and global
economy and the industrial robotics products in China and overseas markets are derived from
various sources including official government publications, industry associations or the
Industry Report, which we believe are reliable. The information derived from official
RISK FACTORS
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government sources has not been independently verified by us, the Sole Sponsor, the
Sponsor-Overall Coordinator, the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries any of the
Underwriters, any of our and their respective directors, supervisors, officers, representatives,
employees or advisers, or any other persons or parties involved in the Global Offering, and no
representation is given as to its completeness, accuracy or fairness. Accordingly, the
information from official government sources contained herein may not be accurate and should
not be unduly relied upon.
Forward-looking statements contained in this prospectus are subject to risks and
uncertainties.
This prospectus contains certain statements and information that are forward-looking and
uses forward-looking terminology such as “anticipate,” “believe,” “could,” “going forward,”
“intend,” “plan,” “project,” “seek,” “expect,” “may,” “ought to,” “should,” “would” or “will”
and similar expressions. Y ou are cautioned that reliance on any forward-looking statement
involves risks and uncertainties and that any or all of those assumptions could prove to be
inaccurate and as a result, the forward-looking statements based on those assumptions could
also be incorrect. In light of these and other risks and uncertainties, the inclusion of
forward-looking statements in this prospectus should not be regarded as representations or
warranties by us that our plans and objectives will be achieved, and these forward-looking
statements should be considered in light of various important factors, including those set forth
in this section. Subject to the requirements of the Listing Rules, we do not intend publicly to
update or otherwise revise the forward-looking statements in this prospectus, whether as a
result of new information, future events or otherwise. Accordingly, you should not place undue
reliance on any forward-looking information. All forward-looking statements in this prospectus
are qualified by reference to this cautionary statement.
RISK FACTORS
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In preparation for the Global Offering, our Company has sought and has been granted the
following waivers from strict compliance with the relevant provisions of the Listing Rules and
the following exemptions from strict compliance with the Companies (Winding Up &
Miscellaneous Provisions) Ordinance:
W AIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rules 8.12 and 19A.15 of the Listing Rules, we must have a sufficient
management presence in Hong Kong. This normally means that at least two of our executive
Directors must be ordinarily resident in Hong Kong.
Our headquarters are based in the PRC, and most of our business operations are managed
and conducted outside of Hong Kong. As our executive Directors play very important roles in
our business operation, it is in our best interest for them to be based in the places where our
Group has significant operations. We consider it practicably difficult and commercially
unreasonable for us to arrange for two executive Directors to be ordinarily reside in Hong
Kong, either by means of relocation of our executive Directors to Hong Kong or appointment
additional executive Directors. Therefore, we do not have, and in the foreseeable future will
not have, sufficient management presence in Hong Kong for the purpose of satisfying the
requirements under Rules 8.12 and 19A.15 of the Listing Rules.
Accordingly, we have applied to the Hong Kong Stock Exchange for, and the Hong Kong
Stock Exchange has granted us, a waiver from strict compliance with the requirements under
Rules 8.12 and 19A.15 of the Listing Rules, provided that our Company implements the
following arrangements:
(a) we have appointed Mr. WU Kan ( юԹ) and Ms. POON Pui Man Hera ( ᆙ⪺͏)a s
our authorized representatives (the “ Authorized Representatives ”) pursuant to
Rule 3.05 of the Listing Rules. The Authorized Representatives will act as our
Company’s principal channel of communication with the Hong Kong Stock
Exchange. The Authorized Representatives will be readily contactable by phone,
facsimile and email to promptly deal with enquiries from the Hong Kong Stock
Exchange, and will also be available to meet with the Hong Kong Stock Exchange
to discuss any matter within a reasonable period of time upon request of the Hong
Kong Stock Exchange;
(b) when the Hong Kong Stock Exchange wishes to contact our Directors on any matter,
each of the Authorized Representatives will have all necessary means to contact all
of our Directors (including our independent non-executive Directors) promptly at all
times. Our Company will also inform the Hong Kong Stock Exchange promptly in
respect of any changes in the Authorized Representatives. We have provided the
Hong Kong Stock Exchange with the contact details (i.e. mobile phone number,
office phone number and email address) of all Directors to facilitate communication
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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with the Hong Kong Stock Exchange; all Directors who do not ordinarily reside in
Hong Kong possess or can apply for valid travel documents to visit Hong Kong and
can meet with the Hong Kong Stock Exchange within a reasonable period upon the
request of the Hong Kong Stock Exchange;
(c) we have appointed Maxa Capital Limited as our compliance adviser (the
“Compliance Adviser ”) upon Listing pursuant to Rule 3A.19 of the Listing Rules
for a period commencing on the Listing Date and ending on the date on which we
comply with Rule 13.46 of the Listing Rules in respect of our financial results for
the first full financial year commencing after the Listing Date. The Compliance
Adviser will have access at all times to the Authorized Representatives, our
Directors and our senior management as prescribed by Rule 3A.23 of the Listing
Rules, who will act as the additional channel of communication with the Hong Kong
Stock Exchange when the Authorized Representatives are not available; and
(d) meetings between the Hong Kong Stock Exchange and our Directors can be arranged
through the Authorized Representatives or the Compliance Adviser, or directly with
our Directors within a reasonable time frame.
W AIVER IN RESPECT OF APPOINTMENT OF JOINT COMPANY SECRETARY
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, we must appoint a company
secretary who, by virtue of his/her academic or professional qualifications or relevant
experience, is, in the opinion of the Hong Kong Stock Exchange, capable of discharging the
functions of the company secretary. Note 1 to Rule 3.28 of the Listing Rules provides that the
Hong Kong 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); and
(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 further provides that the Hong Kong Stock
Exchange considers the following factors in assessing the “relevant experience” of the
individual:
(a) length of employment with the issuer and other issuers and the roles he/she played;
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(b) familiarity with the Listing Rules and other relevant laws and regulations including
the SFO, the Companies Ordinance, the Companies (Winding Up and Miscellaneous
Provisions) Ordinance and the Takeovers Code;
(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.
Pursuant to Chapter 3.10 of the Guide, the Stock Exchange will consider a waiver
application by an issuer in relation to Rules 3.28 and 8.17 of the Listing Rules based on the
specific facts and circumstances. Factors that will be considered by the Stock Exchange
include:
(a) whether the issuer has principal business activities primarily outside Hong Kong;
(b) whether the issuer was able to demonstrate the need to appoint a person who does
not have the Acceptable Qualification (as defined under Rule 3.28(1) of the Listing
Rules) nor Relevant Experience (as defined under Rule 3.28(2) of the Listing Rules)
as a company secretary; and
(c) why the directors consider the individual to be suitable to act as the issuer’s
company secretary.
Further, pursuant to Chapter 3.10 of the Guide, such waiver, if granted, will be for a fixed
period of time (the “ Waiver Period ”) and on the following conditions:
(a) the proposed company secretary must be assisted by a person who possesses the
qualifications or experience as required under Rule 3.28 of the Listing Rules and is
appointed as a joint company secretary throughout the Waiver Period; and
(b) the waiver can be revoked if there are material breaches of the Listing Rules by the
issuer.
Our Company has appointed Ms. XIAO Tingting ( ӽణణ)( “ Ms. Xiao ”), who joined our
Group in April 2022 and is our secretary to the Board, as one of our joint company secretaries.
She has extensive experience in corporate management matters but presently does not possess
any of the qualifications under Rules 3.28 and 8.17 of the Listing Rules. While Ms. Xiao may
not be able to solely fulfill the requirements of the Listing Rules, our Directors consider Ms.
Xiao a suitable individual to act as a joint company secretary and believe that such appointment
would be in the best interests of our Company and of the corporate governance of our Group
due to her thorough understanding of the internal administration and business operation of our
Group. Accordingly, we have appointed Ms. POON Pui Man Hera ( ᆙ⪺͏)( “ Ms. Poon ”), a
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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solicitor as defined in the Legal Practitioners Ordinance (Chapter 159 of the Laws of Hong
Kong), and therefore meets the qualification requirements under Note 1 to Rule 3.28 of the
Listing Rules and is in compliance with Rule 8.17 of the Listing Rules, to act as the other joint
company secretary and to provide assistance to Ms. Xiao for an initial period of three years
from the Listing Date to enable Ms. Xiao to acquire the “relevant experience” under Note 2 to
Rule 3.28 of the Listing Rules so as to fully comply with the requirements set forth under Rules
3.28 and 8.17 of the Listing Rules. For more details of Ms. Xiao and Ms. Poon’s biographical
information, please refer to the section headed “Directors and Senior Management — Joint
Company Secretaries.”
Given Ms. Poon’s professional qualification and experience, she will be able to explain
to both Ms. Xiao and us the relevant requirements under the Listing Rules and other applicable
Hong Kong laws and regulations. Ms. Poon will also assist Ms. Xiao in organizing Board
meetings and Shareholders’ meetings of our Company as well as other matters of our Company
which are incidental to the duties of a company secretary. Ms. Poon is expected to work closely
with Ms. Xiao and will maintain regular contact with Ms. Xiao. In addition, Ms. Xiao will
comply with the annual professional training requirement under Rule 3.29 of the Listing Rules
to enhance her knowledge of the Listing Rules during the three-year period from the Listing
Date. She will also be assisted by our compliance adviser and our legal advisor as to the Hong
Kong laws on matters in relation to our ongoing compliance with the Listing Rules and the
applicable laws and regulations.
Since Ms. Xiao does not possess the formal qualifications required of a company
secretary under Rule 3.28 of the Listing Rules, we have applied to the Hong Kong Stock
Exchange for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance
with the requirements under Rules 3.28 and 8.17 of the Listing Rules such Ms. Xiao may be
appointed as a joint company secretary of our Company. The waiver is valid for an initial
period of three years from the Listing Date on the conditions that (a) Ms. Xiao must be assisted
by Ms. Poon who possesses the qualifications and experience required under Rule 3.28 of the
Listing Rules; (b) before the end of the three-year period, our Company must demonstrate and
seek the Stock Exchange’s confirmation that Ms. Xiao (i.e. the proposed company secretary not
fulfilling the requirement under Rule 3.28), having had the benefit of Ms. Poon’s (i.e. the
qualified person) assistance during the three-year period, has attained the relevant experience
under note 2 to Rule 3.28 and is capable of discharging the functions of a company secretary
so that a further waiver would not be necessary; and (c) the waiver will be revoked immediately
if and when Ms. Poon ceases to provide assistance to Ms. Xiao as a joint company secretary
or if there are material breaches of the Listing Rules by our Company.
Before the expiration of the initial three-year period, the qualifications of Ms. Xiao will
be re-evaluated to determine whether the requirements as stipulated in Rules 3.28 and 8.17 of
the Listing Rules can be satisfied and whether the need for ongoing assistance will continue.
We will liaise with the Hong Kong Stock Exchange to enable it to assess whether Ms. Xiao,
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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having benefited from the assistance of Ms. Poon for the preceding three years, will have
acquired the skills necessary to carry out the duties of a company secretary and the relevant
experience within the meaning of Note 2 to Rule 3.28 of the Listing Rules so that a further
waiver will not be necessary.
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
the issuer may only subscribe for or purchase any securities for which listing is sought which
are being marketed by or on behalf of the issuer either in his or its own name or through
nominees if the conditions in Rules 10.03(1) and (2) of the Listing Rules are fulfilled. It is
provided in Rule 10.03(1) of the Listing Rules that no securities may be offered to existing
shareholders on a preferential basis and no preferential treatment may be given to them in the
allocation of the securities; and in Rule 10.03(2) that the minimum prescribed percentage of
public shareholders required by Rule 8.08(1) must be achieved.
Paragraph 1C of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to the existing shareholders of the applicant or their close associates, whether in their
own names or through nominees, in the Global Offering unless the conditions set out in Rules
10.03 and 10.04 of the Listing Rules are fulfilled. Chapter 4.15 of the Guide for New Listing
Applicants provides that the Stock Exchange will consider giving consent and granting waiver
from Rule 10.04 of the Listing Rules to an applicant’s existing shareholders or their close
associates to participate in an initial public offering if any actual or perceived preferential
treatment arising from their ability to influence the applicant during the allocation process can
be addressed.
Prior to the Listing, our Company’s share capital comprises entirely A Shares listed on the
Shenzhen Stock Exchange. We have a large and widely dispersed public A Share shareholder
base.
We have applied to the Stock Exchange for, and the Stock Exchange has granted to us,
a waiver from strict compliance with the requirements under Rule 10.04 and consent under
Paragraph 1C 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 total number of A Shares in issue of 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 “ Existing Minority Shareholders ”), subject to the conditions as follows:
(i) each Existing Minority Shareholder to whom our Company may allocate the H
Shares in the International Offering holds less than 5% of the total number of A
Shares in issue of our Company before Listing;
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(ii) each Existing Minority 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;
(iii) none of the Existing Minority Shareholders have the right to appoint a Director
and/or have any other special rights;
(iv) allocation to the Existing Minority Shareholders or their close associates will not
affect our ability to satisfy the public float requirement as prescribed by the Stock
Exchange under Rule 8.08 and Rule 19A.13A(2) of the Listing Rules or otherwise
approved by the Stock Exchange;
(v) the Sole Sponsor confirms to the Stock Exchange in writing that based on (i) its
discussions with our Company and the Sponsor-Overall Coordinator; and (ii) the
confirmations provided to the Stock Exchange by our Company and the Sponsor-
Overall Coordinator (confirmations (vi) and (vii) mentioned below), and to the best
of its knowledge and belief, it has no reason to believe that any of the Existing
Minority Shareholders or their close associates received any preferential treatment,
or is in a position to exert influence on the Company to obtain actual or perceived
preferential treatment in the allocation either as a cornerstone investor or as a place
by virtue of their relationship with our Company other than the preferential
treatment of assured entitlement under a cornerstone investment following the
principles set out in Chapter 4.15 of the Guide, and details of the allocation to the
Existing Minority Shareholders holding more than 1% of the issued share capital of
the Company immediately prior to the completion of the Global Offering will be
disclosed in this prospectus and/or the allotment results announcement, as the case
may be;
(vi) our Company will confirm to the Stock Exchange in writing that:
(a) in the case of participation as cornerstone investors, no preferential treatment
has been, nor will be, given to the Existing Minority Shareholders or their
close associates by virtue of their relationship with our Company, other than
the preferential treatment of assured entitlement under a cornerstone
investment following the principles set out in Chapter 4.15 of the Guide, nor
is the Existing Minority Shareholder in a position to exert influence on the
Company to obtain actual or perceived preferential treatment, and the Existing
Minority Shareholders or their close associates’ cornerstone investment
agreements do not contain any material terms which are more favorable to the
Existing Minority Shareholders or their close associates than those in other
cornerstone investment agreements; or
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(b) in the case of participation as placees, no preferential treatment has been, nor
will be, given to the Existing Minority Shareholders or their close associates,
nor is the Existing Minority Shareholder in a position to exert influence on the
Company to obtain actual or perceived preferential treatment, by virtue of their
relationship with our Company in any allocation in the placing tranche;
(vii) in the case of participation as placees, the Sponsor-Overall Coordinator will confirm
to the Stock Exchange that, to the best of its knowledge and belief, no preferential
treatment has been, nor will be, given to the Existing Minority Shareholders or their
close associates by virtue of their relationship with our Company in any allocation
in the placing tranche.
CONTINUING CONNECTED TRANSACTIONS
We have entered into certain transactions which will constitute continuing connected
transactions of our Company under the Listing Rules following the completion of the Global
Offering. We have applied to the Stock Exchange for, and the Stock Exchange has granted, a
waiver from strict compliance with the announcement requirements under the Listing Rules.
For further details in this respect, see the section headed “Connected Transactions.”
W AIVER IN RESPECT OF THE 2025 SHARE OPTION SCHEME
The Listing Rules and the Companies (Winding Up and Miscellaneous Provisions)
Ordinance prescribes certain disclosure requirements in relation to the share options granted by
our Company (the “ Share Options Disclosure Requirements ”):
(a) Rule 17.02(1)(b) of the Listing Rules stipulates that all the terms of a scheme must
be clearly set out in the prospectus. Our Company is also required to disclose in the
prospectus full details of all outstanding options and their potential dilution effect
on the shareholdings upon listing as well as the impact on the earnings per share
arising from the exercise of such outstanding options;
(b) Paragraph 27 of the Appendix D1A of the Listing Rules requires our Company to set
out in the prospectus particulars of any capital of any member of our Group which
is under option, or agreed conditionally or unconditionally to be put under option,
including the consideration for which the option was or will be granted and the price
and duration of the option, and the name and address of the grantee; and
(c) Paragraph 10 of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance requires our Company to set out in the
prospectus, among other things, details of the number, description and amount of
any shares in or debentures of our Company which any person has, or is entitled to
be given, an option to subscribe for, together with the certain particulars of the
option, namely the period during which it is exercisable, the price to be paid for
shares or debentures subscribed for under it, the consideration (if any) given or to
be given for it or for the right to it and the names and addresses of the persons to
whom it was given.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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As of the Latest Practicable Date, our Company granted outstanding options under the
2025 Share Option Scheme to 128 grantees, all of which are employees of our Group, to
subscribe for an aggregate of 3,320,000 A Shares, representing approximately 0.34% of the
total issued share capital immediately upon completion of the Global Offering (assuming the
Over-allotment Option is not exercised and the options granted under the 2025 Share Option
Scheme are not exercised), on the terms set out in the paragraph headed “Statutory and General
Information — Further Information about our Directors and Substantial Shareholders — 4.
Employee Incentive Schemes — (a) 2025 Share Option Scheme” in the Appendix VI to this
prospectus.
Our Company has applied to (i) the Stock Exchange for a waiver from strict compliance
with the requirements under Rule 17.02(1)(b) of and paragraph 27 of Appendix D1A to the
Listing Rules; and (ii) to the SFC for a certificate of exemption under section 342A of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance exempting our Company
from strict compliance with paragraph 10(d) of Part I of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance, on the ground that strict compliance
with the above requirements would be unduly burdensome for our Company and the waiver and
the exemption would not prejudice the interest of the investing public for the following
reasons:
(a) given that 128 grantees are involved in the 2025 Share Option Scheme, the strict
compliance with the Share Option Disclosure Requirement in setting out full details
of all the grantees under the 2025 Share Option Scheme in this prospectus would be
costly and unduly burdensome for our Company because strict compliance with the
Share Option Disclosure Requirements to disclose names, addresses, and
entitlements on an individual basis for the 128 grantees involved will require
substantial number of pages of additional disclosure that does not provide any
material information to the investing public and would significantly increase the
cost and timing for information compilation, prospectus preparation and seeking
consent from each grantee to disclose his/her personal information (including
residential address);
(b) as of the Latest Practicable Date, 128 grantees, who are core technology and key
personnels of our Company, are granted options to subscribe for an aggregate of
3,320,000 A Shares, representing approximately 0.34% of the total issued share
capital immediately upon completion of the Global Offering (assuming the
Over-allotment Option is not exercised and the options granted under the 2025 Share
Option Scheme are not exercised);
(c) the grant and exercise in full of the options under the 2025 Share Option Scheme
will not cause any material adverse impact on the financial position of our Group;
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(d) lack of full compliance with the above disclosure requirements would not prevent
our Company from providing its potential investors with information for them to
make an informed assessment of the activities, assets, liabilities, financial position,
management and prospects of our Group; and
(e) material information relating to the options under the 2025 Share Option Scheme
will be disclosed in this prospectus, including the total number of A Shares subject
to the 2025 Share Option Scheme, the exercise price per A Share, the potential
dilution effect on shareholding, and impact on earnings per A Share upon full
exercise of the options granted under the 2025 Share Option Scheme. Our Directors
consider that the information that is reasonably necessary for the potential investors
to make an informed assessment of our Group in their investment decision making
process has been included in this prospectus.
The Stock Exchange has granted us a waiver from strict compliance with the relevant
requirements under the Listing Rules on the conditions that:
(a) full details of the options under the 2025 Share Option Scheme granted to each of
the Directors, senior management or connected persons of our Company (if any) will
be disclosed in the paragraph headed “Statutory and General Information — Further
Information about our Directors and Substantial Shareholders — 4. Employee
Incentive Schemes — (a) 2025 Share Option Scheme” in Appendix VI to this
prospectus on an individual basis as required under the applicable Share Option
Disclosure Requirements;
(b) for the remaining grantees, disclosure will be made, on an aggregate basis, of (i) the
aggregate number of grantees and the number of A Shares underlying the options
granted to them under the 2025 Share Option Scheme, (ii) the consideration (if any)
paid for the grant of the options under the 2025 Share Option Scheme, and (iii) the
exercise period and the exercise price for the options granted under the 2025 Share
Option Scheme;
(c) there will be disclosure in the paragraph head “Statutory and General Information —
Further Information about our Directors and Substantial Shareholders — 4.
Employee Incentive Schemes — (a) 2025 Share Option Scheme” in Appendix VI to
this prospectus for the aggregate number of A Shares underlying the options under
the 2025 Share Option Scheme and the percentage of our Company’s total issued
share capital represented by such number of A Shares as at the Latest Practicable
Date;
(d) the dilutive effect and impact on earnings per Share upon full exercise of the options
under the 2025 Share Option Scheme immediately following the completion of the
Global Offering (assuming the Over-allotment Option is not exercised and no further
shares are issued under the 2025 Share Option Scheme) will be disclosed in the
paragraph headed “Statutory and General Information — Further Information about
our Directors and Substantial Shareholders — 4. Employee Incentive Schemes —
(a) 2025 Share Option Scheme” in Appendix VI to this prospectus;
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(e) a summary of the principal terms of the 2025 Share Option Scheme will be disclosed
in the paragraph headed “Statutory and General Information — Further Information
about our Directors and Substantial Shareholders — 4. Employee Incentive Schemes
— (a) 2025 Share Option Scheme” in Appendix VI to this prospectus;
(f) the particulars of the waiver and the exemption will be disclosed in this prospectus;
(g) a full list of all the grantees under the 2025 Share Option Scheme, containing all the
particulars as required under the applicable Share Option Disclosure Requirements
be made available for public inspection in accordance with Appendix VII to this
prospectus;
(h) further information relating to the grantees who have been granted options and
awards is provided to the Stock Exchange; and
(i) the grant of a certificate of exemption under the Companies (Winding Up and
Miscellaneous Provisions) Ordinance from the SFC exempting our Company from
the disclosure requirements under paragraph 10(d) of Part I of the Third Schedule
to the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
The SFC has granted us the certificate of exemption under section 342A of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance from strict compliance with paragraph
10(d) of Part I of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance subject to the conditions that:
(a) full details of the options granted by the Company under the 2025 Share Option
Scheme to each of the Directors, senior management, connected person of the
Company are disclosed in “Statutory and General Information — Further
Information about our Directors and Substantial Shareholders — 4. Employee
Incentive Scheme — (a) 2025 Share Option Scheme” in Appendix VI to the
prospectus, such details to include all the particulars required under paragraph 10 of
Part I of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance;
(b) in respect of the options granted by the Company under the 2025 Share Option
Scheme to grantees other than those set out in (a) above, disclosure is made, on an
aggregate basis, categorized into lots based on the number of Shares underlying each
individual grantee, being: 1 to 10,000 A Shares, 10,001 to 20,000 A Shares, 20,001
to 30,000 A Shares, 30,001 to 40,000 A shares and 40,001 A Shares or above. For
each lot of A Shares under each of the 2025 Share Option Scheme, the following
details are disclosed in the prospectus: (1) aggregate number of grantees and number
of A Shares subject to the options, (2) the consideration paid for the grant of the
options and (3) the exercise period and the exercise price for the options;
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
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(c) a full list of all the grantees (including the persons referred to in (a) above) who have
been granted options to subscribe for A Shares under the 2025 Share Option Scheme,
containing all the details as required in paragraph 10 of Part I of the Third Schedule
to the Companies (Winding Up and Miscellaneous Provisions) Ordinance, be made
available for public inspection in accordance with the section headed “Documents
Delivered to the Registrar of Companies in Hong Kong and on Display” in Appendix
VII to the prospectus; and
(d) the particulars of the exemption are disclosed in the prospectus and the Company’s
prospectus will be issued on or before February 27, 2026.
Further details of the 2025 Share Option Scheme are set forth in the paragraph headed
“Statutory and General Information — Further Information about our Directors and Substantial
Shareholders — 4. Employee Incentive Schemes — (a) 2025 Share Option Scheme” in
Appendix VI to this prospectus.
W AIVER FROM STRICT COMPLIANCE WITH RULE 4.04(1) OF THE LISTING
RULES AND EXEMPTION FROM STRICT COMPLIANCE WITH SECTION 342(1)(B)
IN RELATION TO PARAGRAPH 27 OF PART I AND PARAGRAPH 31 OF PART II OF
THE THIRD SCHEDULE TO THE COMPANIES (WINDING UP AND
MISCELLANEOUS PROVISIONS) ORDINANCE
Rule 4.04(1) of the Listing Rules requires this prospectus to include, among other things,
details of the financial results of the company for the financial year immediately preceding the
issue of this prospectus, being the year ended December 31, 2025 or such shorter period as may
be acceptable to the Stock Exchange.
Section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance requires, subject to section 342A(1) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, all prospectuses to state the matters specified in Part I
of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance
and set out the reports specified in Part II of the Third Schedule to the Companies (Winding
Up and Miscellaneous Provisions) Ordinance.
According to paragraph 27 of Part I of the Third Schedule to the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, a company is required to include in the prospectus
a statement as to the gross trading income or sales turnover (as may be appropriate) of the
company during each of the three financial years immediately preceding the issue of the
prospectus as well as an explanation of the method used for the computation of such income
or turnover and a reasonable breakdown of the more important trading activities.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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According to paragraph 31 of Part II of the Third Schedule to the Companies (Winding
Up and Miscellaneous Provisions) Ordinance, a company is required to include in the
prospectus a report by auditors of the listing applicant with respect to profits and losses in
respect of each of the three financial years immediately preceding the issue of the prospectus
and assets and liabilities of the listing applicant at the last date to which the financial
statements of the listing applicant were prepared. Pursuant to section 342A(1) of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance, the SFC may, subject to
such conditions (if any) as the SFC thinks fit, issue a certificate of exemption from compliance
with the relevant requirements under Companies (Winding Up and Miscellaneous Provisions)
Ordinance if, having regard to the circumstances, the SFC considers that the exemption will not
prejudice the interest of the investing public and compliance with any or all of such
requirements would be irrelevant or unduly burdensome, or is otherwise unnecessary or
inappropriate.
Chapter 1.1A of the Guide for New Listing Applicants has provided the conditions for
granting a waiver from strict compliance with Rule 4.04(1) of the Listing Rules.
The Accountants’ Report for each of the three years ended December 31, 2024 and the
nine months ended September 30, 2025 has been prepared and is set out in Appendix I to this
prospectus.
Pursuant to the relevant requirements set out above, our Company is required to include
three full years of audited accounts for the three years ended December 31, 2025 in this
prospectus. As such, an application has been made to the Stock Exchange for a waiver from
strict compliance with Rule 4.04(1) of the Listing Rules, and such waiver has been granted by
the Stock Exchange on the conditions that:
(a) this prospectus will be issued on or before February 27, 2026 and the Company’s
Shares will be listed on or before March 31, 2026, i.e. three months after the latest
financial year-end;
(b) in accordance with Chapter 1.1A of the Guide for New Listing Applicants, a profit
estimate for the financial year ended December 31, 2025 has been included in this
prospectus, in compliance with Rules 11.17 to 11.19 of the Listing Rules and a
Directors’ statement that there is no material and adverse change to the financial and
trading positions or prospects of our Company, with specific reference to the trading
results from October 1, 2025 to December 31, 2025; and
(c) our Company obtains a certificate of exemption from the SFC on strict compliance
with paragraph 27 of Part I and paragraph 31 of Part II of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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An application has also been made to the SFC for a certificate of exemption from strict
compliance with the requirements under section 342(1)(b) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance in relation to paragraph 27 of Part I and paragraph 31 of
Part II of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance and a certificate of exemption has been granted by the SFC under section 342A(1)
of the Companies (Winding Up and Miscellaneous Provisions) Ordinance on the conditions
that:
(a) the particulars of the exemption are disclosed in this prospectus; and
(b) the Prospectus will be issued on or before February 27, 2026 and the Company’s H
Shares will be listed on the Stock Exchange on or before March 31, 2026, i.e. three
months after the latest financial year-end.
The applications to Stock Exchange for a waiver from strict compliance with Rule 4.04(1)
of the Listing Rules and to the SFC for a certificate of exemption from strict compliance with
the requirements under section 342(1)(b) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance in relation to paragraph 27 of Part I and paragraph 31 of Part II of the
Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance have
been made on the grounds, among others, that strict compliance with the above requirements
would be unduly burdensome and the waiver and exemption would not prejudice the interests
of the investing public as:
(a) there would not be sufficient time for our Company and the reporting accountants
of our Company (the “ Reporting Accountants ”) to finalize the audited financial
statements for the year ended December 31, 2025 for inclusion in this prospectus.
If the financial information for the year ended December 31, 2025 is required to be
audited, our Company and the Reporting Accountants would have to carry out
substantial volume of work to prepare, update and finalize the Accountants’ Report
and this prospectus, and the relevant sections of this prospectus will need to be
updated to cover such additional period. This would involve additional time and
costs since substantial work is required to be carried out for audit purposes. It would
be unduly burdensome for the audited results for the year ended December 31, 2025
to be finalized in a short period of time. Our Directors consider that the benefits of
such work to the existing and prospective shareholders of our Company may not
justify the additional work and expenses involved and the delay of the listing
timetable;
(b) our Directors and the Sole Sponsor confirm, after performing sufficient due
diligence work up to the date of this prospectus, that there has been no material
adverse change to the financial and trading positions or prospects of the Group since
October 1, 2025 (immediately following the date of the latest audited statement of
financial position in the Accountants’ Report as set out in Appendix I to this
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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prospectus) up to the date of this prospectus, and there has been no event since
October 1, 2025 which would materially affect the information contained in the
Accountants’ Report as set out in Appendix I to this prospectus, the financial
information section, the profit estimate as set out in Appendix IA to this prospectus
and information regarding the Company’s recent development subsequent to the
Track Record Period and up to the date of this prospectus;
(c) our Company and the Sole Sponsor are of the view that the Accountants’ Report
covering the three years ended December 31, 2024 and the nine months ended
September 30, 2025, together with the profit estimate for the year ended
December 31, 2025 (in compliance with Rules 11.17 to 11.19 of the Listing Rules)
included in this prospectus have already provided the potential investors with
adequate and reasonably up-to-date information in the circumstances to form a view
on the track record and earnings trend of our Company; and our Directors confirm
that all information which is necessary for the investing public to make an informed
assessment of the activities, assets and liabilities, financial position, trading
position, management and prospects has been included in this prospectus. Therefore,
the waiver and exemption would not prejudice the interests of the investing public;
and
(d) our Company will comply with the requirements under Rules 13.46(2) and 13.49(1)
of the Listing Rules in respect of the publication of our annual results and annual
report. Our Company currently expects to issue our annual results and annual report
for the financial year ended December 31, 2025 on or before March 31, 2026 and
April 30, 2026, respectively. In this regard, our Directors consider that the
Shareholders, the investing public as well as potential investors of our Company will
be kept informed of the financial results of our Group for the financial year ended
December 31, 2025.
W AIVER IN RELATION TO POST-TRACK RECORD PERIOD ACQUISITION
Rules 4.04(2) and 4.04(4) of the Listing Rules require that the new applicant include in
its accountants’ report the results and balance sheet of any business or subsidiary acquired,
agreed or proposed to be acquired, since the date to which its latest audited accounts have been
made up, in respect of each of the three financial years immediately preceding the issue of this
Prospectus.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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Pursuant to note (4) of Rule 4.04(4) of the Listing Rules, the Stock Exchange may
consider an application for a waiver of Rules 4.04(2) and 4.04(4) of the Listing Rules taking
into account the following factors:
(a) that all the percentage ratios (as defined under Rule 14.04(9) of the Listing Rules)
are less than 5% by reference to the most recent audited financial year of the new
applicant’s trading record period;
(b) if the acquisition will be financed by the proceeds raised from a public offer, the new
applicant has obtained a certificate of exemption from the SFC in respect of the
relevant requirements under paragraphs 32 and 33 of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance; and
(c) (i) where a new applicant’s principal activities involve the acquisition of equity
securities (the Stock Exchange may require further information where
securities acquired are unlisted), the new applicant is not able to exercise any
control, and does not have any significant influence over the underlying
company or business to which Rule 4.04(2) and 4.04(4) of the Listing Rules
relate, and has disclosed in its listing document the reasons for the acquisition
and a confirmation that the counterparties and their respective ultimate
beneficial owners are independent of the new applicant and its connected
persons. In this regard, “control” means the ability to exercise or control the
exercise of 30% (or any amount specified in the Hong Kong Code on
Takeovers and Mergers as the level for triggering a mandatory general offer)
or more of the voting power at general meeting, or being in a position to
control the composition of a majority of the board of directors of the
underlying company or business; or
(ii) with respect to an acquisition of a business (including acquisition of an
associated company and any equity interest in a company other than in the
circumstances covered under sub-paragraph (i) above) or a subsidiary by a new
applicant, the historical financial information of such business or subsidiary is
unavailable, and it would be unduly burdensome for the new applicant to
obtain or prepare such financial information; and the new applicant has
disclosed in its listing document information required for the announcement
for a discloseable transaction under Rules 14.58 and 14.60 of the Listing Rules
on each acquisition. In this regard, “unduly burdensome” will be assessed
based on each new applicant’s specific facts and circumstances (e.g. why the
financial information of the acquisition target is not available and whether the
new applicant or its controlling shareholder has sufficient control or influence
over the seller to gain access to the acquisition target’s books and records for
the purpose of complying with the disclosure requirements under Rules 4.04(2)
and 4.04(4) of the Listing Rules).
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
– 100 –


--- page 111 ---
Background
Acquisition of 1.89% equity interest in Nanjing Chemical Fibre Co., Ltd (ࠢ
ʮ̡) (“Nanjing Chemical Fibre”)
In November 2024 and May 2025, we respectively entered into an agreement and a
supplemental agreement with Nanjing Chemical Fibre, pursuant to which we agreed to transfer
approximately 3% equity interest in Nanjing Technical Equipment Manufacture Co., Ltd. (ی
ʮ̡)(“Nanjing Technical Equipment”) held by our Group in
exchange for 10,547,105 A shares of Nanjing Chemical Fibre, representing approximately
1.89% of its total issued share capital immediately after the completion of the proposed
transaction (the “Proposed Transaction”), which forms part of the asset restructuring of
Nanjing Chemical Fibre. The Proposed Transaction will not be financed by the proceed raised
from the Global Offering. The aforementioned share consideration was determined based on
arm’s length negotiation. The completion of the Proposed Transaction is subject to (i) the
approval by the Shanghai Stock Exchange and (ii) registration with the CSRC. The Proposed
Transaction has been approved by the Shanghai Stock Exchange. Registration with the CSRC
was subsequently completed on February 13, 2026, and such registration remains valid for 12
months. Completion of the Proposed Transaction is subject to the issuance of shares by Nanjing
Chemical Fibre to our Group. Nanjing Chemical Fibre has announced that it intends to
complete the Proposed Transaction within the validity period of the CSRC registration.
However, as of the Latest Practicable Date, no detailed timetable for completing the Propsed
Transaction has been disclosed.
Further, Nanjing Chemical Fibre is a company incorporated in the PRC and listed on the
Shanghai Stock Exchange (stock code: 600889.SH), which is primarily engaged in the
production and sales of viscose staple fiber, Lyocell fiber, PET structural core materials and
landscape water supply services, an Independent Third Party. Nanjing Chemical Fibre is
ultimately controlled by State-owned Assets Supervision and Administration Commission of
Nanjing Municipal Government (ึ), which is an
Independent Third Party. Upon completion of the Proposed Transaction, Nanjing Chemical
Fibre will not be accounted as our subsidiary and therefore its financial statements will not be
consolidated into our Group’s consolidated financial statements.
According to the unaudited management accounts of the Nanjing Chemical Fibre, its total
assets as of September 30, 2025 was approximately RMB1,253.6 million. Further, according
to the audited financial statements of Nanjing Chemical Fibre for the year ended December 31,
2024, its revenue was approximately RMB662.5 million and net loss before tax was
approximately RMB482.8 million.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
– 101 –


--- page 112 ---
Reasons and Benefits
Nanjing Technical Equipment had been one of our suppliers of ball screws prior to our
investment. In 2022, we acquired 3% equity interest in Nanjing Technical Equipment, as we
recognized its growth potential based on our understanding of its business. We believe this
investment has further strengthened our cooperation with Nanjing Technical Equipment. Upon
completion of the Proposed Transaction, we will hold shares in Nanjing Chemical Fibre, a
company listed on the Shanghai Stock Exchange, thereby enhancing the liquidity of our
investment. Our Directors considered that the Proposed Transaction is on normal commercial
terms, fair and reasonable and in the interest of our Company and the Shareholders as a whole.
Conditions to the waiver granted by the Stock Exchange
We have applied to the Stock Exchange for, and the Stock Exchange has granted a waiver
from strict compliance with Rules 4.04(2) and 4.04(4) of the Listing Rules in respect of the
Proposed Transaction on the following grounds:
(a) Immateriality
Under Rule 14.04(9) of the Listing Rules, all the applicable percentage ratios under Rule
14.07 of the Listing Rules in relation to the Proposed Transaction are below 5% by reference
to the most recent audited financial year of the Track Record Period. We consider the Proposed
Transaction to be immaterial in the context of our Company’s operations as a whole and
therefore a waiver from strict compliance with Rules 4.04(2) and 4.04(4) of the Listing Rules
will not affect potential investors’ assessment of our business and future prospects when
considering an investment in our Company.
(b) Acquisition of minority interests only and absence of control for Nanjing Chemical
Fibre
We will not be able to control a majority of the board of directors nor the daily
management of Nanjing Chemical Fibre and therefore it will not be treated as our subsidiary
upon completion of the Proposed Transaction. As a result, its financial information will not be
consolidated into our Group.
(c) Impracticality and undue burden
As we have not controlled and will not control Nanjing Chemical Fibre, we are unable to
provide our reporting accountants with full access to their financial record, provide them
opportunities to fully familiarize with the Nanjing Chemical Fibre’s accounting policies or to
gather and compile the necessary financial information and supporting documents to prepare
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
– 102 –


--- page 113 ---
the financial information required under the Listing Rules. As such, it would be impracticable
and unduly burdensome for us to disclose the financial information of Nanjing Chemical Fibre
in strict compliance with Rules 4.04(2) and 4.04(4) of the Listing Rules.
(d) Alternative disclosure in this Prospectus
We have provided alternative information in this Prospectus in connection with the
Proposed Transaction required for the announcement for a discloseable transaction under
Chapter 14 of the Listing Rules including, among other things, (i) the reasons for the Proposed
Transaction, (ii) description of the principal business of the Nanjing Chemical Fibre, (iii)
descriptions of the counterparty and its ultimate beneficial owner of the Proposed Transaction
and a confirmation that they are Independent Third Parties, (iv) the considerations for the
Proposed Transaction and how they were or expected to be satisfied, (v) basis on which the
considerations for the Proposed Transaction were determined, and (vi) key financial
information of the Nanjing Chemical Fibre.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
– 103 –


--- page 114 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules
(Cap 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 in
this prospectus misleading.
CSRC FILING
We have obtained a filing notice dated December 9, 2025 from the CSRC for the Global
Offering and the making of the application to list the H Shares on the Stock Exchange. In
granting such filing notice, the CSRC accepts no responsibility for the financial soundness of
us or for the accuracy of any of the statements made or opinions expressed in this Prospectus.
No other approvals under the PRC laws and regulations are required to be obtained for the
listing of the H Shares on the Stock Exchange.
INFORMATION ON THE GLOBAL OFFERING
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 9,678,000 Offer Shares and the International Offering of initially
87,102,000 Offer Shares (subject to, in each case, reallocation on the basis referred to under
the section headed “Structure and Conditions of the Global Offering” in this prospectus and,
in case of the International Offering, to any exercise of the Over-allotment Option).
The 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 Sole Sponsor, the Sponsor-Overall Coordinator, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers,
the Capital Market Intermediaries, the Underwriters, any of their respective directors, officers,
employees, advisers, agents or representatives, or any other persons or parties involved in the
Global Offering. Neither the delivery of this prospectus nor any subscription or acquisition
made under it shall, under any circumstances, create any implication that there has been no
change or development in our affairs since the date of this prospectus or that the information
in this prospectus is correct as of any date subsequent to the date of this prospectus.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
– 104 –


--- page 115 ---
See “Structure and Conditions of the Global Offering” for details of the structure of the
Global Offering, including its conditions and the arrangements relating to the Over-allotment
Option and stabilization.
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.”
RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to, or be deemed by his/her acquisition of Hong Kong Offer Shares to, confirm
that he/she is aware of the restrictions on the offer and sale of the Hong Kong Offer Shares
described in this prospectus.
No action has been taken to permit a public offering of the Offer Shares or the distribution
of this prospectus in any jurisdiction other than Hong Kong. Accordingly, without limitation
to the following, this prospectus may not be used for the purpose of, and does not constitute,
an offer or invitation in any jurisdiction or in any circumstances in which such an offer or
invitation is not authorized or to any person to whom it is unlawful to make such an offer or
invitation for subscription. 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. In particular, the Offer Shares have not been offered and sold, and will not be
offered and sold, directly or indirectly, in the PRC or the United States.
APPLICATION FOR LISTING OF THE H SHARES ON THE HONG KONG STOCK
EXCHANGE
We have applied to the Hong Kong Stock Exchange for the granting of listing of, and
permission to deal in, our H Shares to be issued pursuant to the Global Offering (including any
H Shares which may be issued pursuant to the exercise of the Over-allotment Option).
Dealings in the H Shares on the Hong Kong Stock Exchange are expected to commence
on Monday, March 9, 2026. Save for our A Shares listed on the Shenzhen Stock Exchange as
disclosed in this prospectus, no part of our Shares or loan capital is listed on or dealt in on any
other stock exchange, and no such listing or permission to list is being or proposed to be sought
as of the Latest Practicable Date.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
– 105 –


--- page 116 ---
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any application will be invalid if the listing of,
and permission to deal in, the H Shares on the Hong Kong Stock Exchange is refused before
the expiration of three weeks from the date of the closing of the application lists, or such longer
period (not exceeding six weeks) as may, within the said three weeks, be notified to our
Company by or on behalf of the Hong Kong Stock Exchange.
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
Hong Kong Stock Exchange and compliance with the stock admission requirements of
HKSCC, the H Shares will be accepted as eligible securities by HKSCC for deposit, clearance
and settlement in CCASS with effect from the date of commencement of dealings in the H
Shares on the Hong Kong Stock Exchange or on any other date as determined by HKSCC.
Settlement of transactions between participants of the Hong Kong 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 the 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 stockbrokers or other professional advisors
for details of the settlement arrangements as such arrangements may affect their rights and
interests.
COMMENCEMENT OF DEALING IN THE H SHARES
Assuming that the Hong Kong Public Offering becomes unconditional in Hong Kong at
or before 8:00 a.m. in Hong Kong on Monday, March 9, 2026, it is expected that dealings in
the Shares on the Stock Exchange are expected to commence 9:00 a.m. on Monday, March 9,
2026. The H Shares will be traded in board lots of 200 H Shares each. The stock code of the
H Shares will be 2715.
H SHARE REGISTER AND HONG KONG STAMP DUTY
All of the Offer Shares will be registered on our register of members of H Share to be
maintained by our H Share Registrar in Hong Kong. Our principal register of members will be
maintained by us at our headquarters in the PRC.
Dealings in the H Shares registered on the H Share register of members of our Company
in Hong Kong will be subject to Hong Kong stamp duty.
DIVIDENDS PAYABLE TO HOLDERS OF H SHARES
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, by ordinary post, at the Shareholders’ risk, to the registered address of each Shareholder
of our Company.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
– 106 –


--- page 117 ---
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 disposal of,
and/or dealing in the H Shares or exercising rights attached to them. None of us, the Sole
Sponsor, the Sponsor-Overall Coordinator, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries, the Underwriters, any of their respective directors, officers, employees,
partners, agents, advisors 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, purchasing, holding, disposition of, or dealing in, the H Shares or
exercising any rights attached to them.
EXCHANGE RATE CONVERSION
Solely for your convenience, this prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars.
Unless indicated otherwise, (i) the translations between Renminbi and U.S. dollars were
made at the rate of RMB6.9398 to US$1.00, being the PBOC rate prevailing on the Latest
Practicable Date, (ii) the translations between Hong Kong dollars and Renminbi were made at
the rate of RMB0.88787 to HK$1.00, being the PBOC rate prevailing on the Latest Practicable
Date; and (iii) the translations between U.S. dollars and Hong Kong dollars were made at the
rate of HK$7.8162 to US$1.00.
No representation is made that the amounts denominated in one currency could actually
be converted into the amounts denominated in another currency at the rates indicated or at all.
LANGUAGE
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, the English translation of the names of the PRC entities,
enterprises, nationals, facilities, regulations in Chinese included in this prospectus is for
identification purposes only. To the extent there is any inconsistency between the Chinese
names of the PRC entities, enterprises, nationals, facilities, regulations and their English
translations, the Chinese names shall prevail. In addition, if there is any inconsistency between
the names of any of the entities mentioned in the English version of this prospectus which are
not in the English language and their English translations, the names in their respective original
language shall prevail.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Any discrepancies between totals and sums of amounts listed in any
table, chart or elsewhere in this prospectus are due to rounding.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
– 107 –


--- page 118 ---
DIRECTORS
Name Address Nationality
Executive Directors
M r .W UB o(تRoom 1003, Building 4
No. 6 Hanfu Street
Xuanwu District
Nanjing City
Jiangsu Province
PRC
Chinese
Mr. WU Kan ( юԹ) Room 1003, Building 4
No. 6 Hanfu Street
Xuanwu District
Nanjing City
Jiangsu Province
PRC
Chinese
Mr. ZHU Chunhua (ശ) Room 303, Building 1
No. 45 Liyuan Road
Chunxi Town
Gaochun District
Nanjing City
Jiangsu Province
PRC
Chinese
Mr. ZHOU Ailin (؍No. 83, Hubei Road
Gulou District
Nanjing City
Jiangsu Province
PRC
Chinese
Mr. HE Lingjun (ࠏGuli Gou, Xinmin Village
Xinqiao Town
Songjiang District
Shanghai
PRC
Chinese
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 108 –


--- page 119 ---
Name Address Nationality
Non-executive Director
Ms. CHEN Yinlan ( ௓ვᚆ) Room 203, Building 55
Cuiping Tsinghua Garden
Moling Street
Jiangning District
Nanjing City
Jiangsu Province
PRC
Chinese
Independent non-executive Directors
Dr. TANG Wencheng ( ಷ˖ϓ) Room 608
Building 6, New Building
No. 2 Wenchang Street
Xuanwu District
Nanjing City
Jiangsu Province
PRC
Chinese
Dr. HAN Xiaofang (ٹNo. 14 Hongmiao Lane
Gulou District
Nanjing City
Jiangsu Province
PRC
Chinese
Mr. LIN Jinjun (ڲږ؍29A, Block 1, Phrase 4
Residence Bel-Air
Island South
Hong Kong
Chinese
For further information regarding our Directors, see “Directors and Senior Management.”
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 109 –


--- page 120 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Sole Sponsor and Sponsor-Overall
Coordinator
Huatai Financial Holdings
(Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
Overall Coordinators Huatai Financial Holdings
(Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
GF Securities (Hong Kong) Brokerage
Limited
27/F, GF Tower
81 Lockhart Road
Wan Chai
Hong Kong
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong
Joint Global Coordinators Huatai Financial Holdings
(Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
GF Securities (Hong Kong) Brokerage
Limited
27/F, GF Tower
81 Lockhart Road
Wan Chai
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 0–


--- page 121 ---
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
Joint Bookrunners Huatai Financial Holdings
(Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
GF Securities (Hong Kong) Brokerage
Limited
27/F, GF Tower
81 Lockhart Road
Wan Chai
Hong Kong
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 111 –


--- page 122 ---
ICBC International Securities Limited
37/F ICBC Tower
3 Garden Road
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
Futu Securities International
(Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
TradeGo Markets Limited
Room 3405, West Tower, Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
Huaan Securities (Hong Kong)
Brokerage Limited
8/F Li Po Chun Chambers
189 Des V oeux Road Central
Sheung Wan
Hong Kong
Joint Lead Managers Huatai Financial Holdings
(Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 2–


--- page 123 ---
GF Securities (Hong Kong) Brokerage
Limited
27/F, GF Tower
81 Lockhart Road
Wan Chai
Hong Kong
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
ICBC International Securities Limited
37/F ICBC Tower
3 Garden Road
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
Futu Securities International
(Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 3–


--- page 124 ---
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
TradeGo Markets Limited
Room 3405, West Tower, Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
Huaan Securities (Hong Kong)
Brokerage Limited
8/F Li Po Chun Chambers
189 Des V oeux Road Central
Sheung Wan
Hong Kong
Capital Market Intermediaries Huatai Financial Holdings
(Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
GF Securities (Hong Kong) Brokerage
Limited
27/F, GF Tower
81 Lockhart Road
Wan Chai
Hong Kong
CMB International Capital Limited
45th Floor, Champion Tower
3 Garden Road
Central
Hong Kong
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 4–


--- page 125 ---
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
ICBC International Securities Limited
37/F ICBC Tower
3 Garden Road
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
Futu Securities International
(Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
TradeGo Markets Limited
Room 3405, West Tower, Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 5–


--- page 126 ---
Huaan Securities (Hong Kong)
Brokerage Limited
8/F Li Po Chun Chambers
189 Des V oeux Road Central
Sheung Wan
Hong Kong
Legal Advisors to our Company As to Hong Kong Laws
Zhong Lun Law Firm LLP
4/F, Jardine House
1 Connaught Place
Central
Hong Kong
As to PRC Laws
Zhong Lun Law Firm
22-31/F, South Tower of CP Center
20 Jin He East Avenue
Chaoyang District
Beijing
PRC
As to International Sanctions in connection
with the Listing
Ashurst Horitsu Jimusho Gaikokuho
Kyodo Jigyo
30th Floor
Shiroyama Trust Tower
4-3-l Toranomon
Minato-ku
Tokyo 105-6030
Legal Advisors to the Sole Sponsor and
Underwriters
As to Hong Kong Laws
Tian Yuan Law Firm LLP
Suites 3304-3309, 33/F
Jardine House
1 Connaught Place
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 6–


--- page 127 ---
As to PRC Laws
Commerce & Finance Law Offices
12-15th Floor
China World Office 2
No. 1 Jianguomenwai Avenue
Chaoyang District
Beijing
PRC
Auditor and Reporting Accountants KPMG
Certified Public Accountants
Public Interest Entity Auditor registered in
accordance with the Accounting and
Financial Reporting Council Ordinance
8th Floor, Prince’s Building
10 Chater Road
Central
Hong Kong
Industry Consultant Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
2504-2505 Wheelock Square
1717 Nanjing West Road
Shanghai 200040
PRC
Receiving Banks Industrial and Commercial Bank of China
(Asia) Limited
33/F., ICBC Tower
3 Garden Road
Central
Hong Kong
Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
CMB Wing Lung Bank Limited
45 Des V oeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 7–


--- page 128 ---
Registered Office No. 1888 Jiyin Avenue
Jiangning, Nanjing
Jiangsu Province
PRC
Headquarters and Principal Place of
Business in the PRC
No. 1888 Jiyin Avenue
Jiangning, Nanjing
Jiangsu Province
PRC
Principal Place of Business in Hong Kong 4/F, Jardine House
1 Connaught Place
Central
Hong Kong
Company’s Website www.estun.com
(the information contained on the website
does not form part of this prospectus)
Joint Company Secretaries Ms. XIAO Tingting ( ӽణణ)
No. 1888 Jiyin Avenue
Jiangning, Nanjing
Jiangsu Province
PRC
Ms. POON Pui Man Hera ( ᆙ⪺͏)
4/F, Jardine House
1 Connaught Place
Central
Hong Kong
Authorized Representatives Mr. WU Kan ( юԹ)
No. 1888 Jiyin Avenue
Jiangning, Nanjing
Jiangsu Province
PRC
Ms. POON Pui Man Hera ( ᆙ⪺͏)
4/F, Jardine House
1 Connaught Place
Central
Hong Kong
CORPORATE INFORMATION
–1 1 8–


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Audit Committee Dr. HAN Xiaofang (ٹ)Chairman)
Dr. TANG Wencheng ( ಷ˖ϓ)
Mr. LIN Jinjun (ڲږ؍)
Nomination Committee Dr. TANG Wencheng ( ಷ˖ϓ) (Chairman)
Dr. HAN Xiaofang (ٹ)
Mr. WU Kan ( юԹ)
Remuneration and Appraisal Committee Mr. LIN Jinjun (ڲږ؍)Chairman)
Dr. HAN Xiaofang (ٹ)
Ms. CHEN Yinlan ( ௓ვᚆ)
Strategic Committee M r .W UB o(ت)Chairman)
Mr. WU Kan ( юԹ)
Mr. ZHU Chunhua (ശ)
Mr. ZHOU Ailin (؍)
Dr. TANG Wencheng ( ಷ˖ϓ)
ESG Committee M r .W UB o(ت)Chairman)
Dr. TANG Wencheng ( ಷ˖ϓ)
Mr. HE Lingjun (ࠏ)
Compliance Advisor Maxa Capital Limited
Unit 2602, 26/F, Golden Centre
188 Dex V oeus Road Central
Sheung Wan
Hong Kong
H Share Registrar Computershare Hong Kong Investor
Services Limited
Shops 1712-1716, 17th Floor,
Hopewell Centre
183 Queen’s Road East
Wan Chai
Hong Kong
Principal Bank(s) Industrial and Commercial Bank of
China Nanjing Jiangning Economic
Development Zone Sub-branch
No. 99-1 Jiangjun Avenue
Jiangning District, Nanjing City
Jiangsu Province
PRC
Bank of China Nanjing Jiangning
Economic Development Zone Sub-branch
No. 11, Shengtai Road
Jiangning Economic Development Zone
Nanjing City, Jiangsu Province
PRC
CORPORATE INFORMATION
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The information and statistics presented in this section and other sections of this
prospectus, unless otherwise indicated, were extracted from different official government
publications and other publications, and from the industry report prepared by Frost &
Sullivan, an independent market research and consulting company that was
commissioned by us, in connection with the Global Offering. The information from
official government sources has not been independently verified by us, the Sole Sponsor,
the Sponsor-Overall Coordinator, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries, any of the Underwriters, any of their respective directors and advisers,
or any other persons or parties involved in the Global Offering, and no representation is
given as to its accuracy.
OVERVIEW OF THE GLOBAL INDUSTRIAL AUTOMATION MARKET
Industrial automation refers to the deployment of advanced control systems, information
technologies, and robotics to execute tasks traditionally performed by human workers. With
significant technological advancements in recent years, industrial automation has enhanced
productivity and quality across manufacturing and other industrial applications, while also
significantly improving safety by reducing reliance on manual labor. Nowadays, industrial
automation is widely adopted across various industries globally, with a global market size of
USD509.6 billion in 2024, in terms of revenue. The global industrial automation market is
expected to grow at a robust pace in the foreseeable future, driven by increasing adoption in
sectors such as the automotive, electronics, PV and power battery industry, where the
complexity of manufacturing processes creates a strong demand for automation. The need for
greater precision, efficiency, and scalability in such high-complexity industries is anticipated
to significantly fuel the expansion of the industrial automation market in the future. The global
industrial automation market is anticipated to reach USD724.7 billion in 2029, at a CAGR of
7.3% from 2024 to 2029.
Benefiting from a strong industrial foundation and a wide range of application scenarios,
the industrial automation market in China represents a key segment of the global market. With
a market size of USD45.9 billion in 2024, the industrial automation market in China accounted
for 9.0% of the global market. In the future, factors such as an aging population, persistent
labor shortages, advancements in industrial robotic technologies, and government-led
industrial upgrading initiatives are expected to drive the industrial automation market in China
at a faster growth rate compared to the global average. The size of the industrial automation
market in China is expected to reach USD83.3 billion in 2029 at a CAGR of 12.7% from 2024
to 2029, increasing its share to 11.5% of the global market in 2029.
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The significant market size and high growth potential within China present considerable
opportunities for domestic industrial automation companies that are rooted in the market. With
a deeper understanding of the local market dynamics and the specific needs of companies in
China, domestic industrial automation companies are well-positioned to lead the future
development of global industrial automation technologies and applications.
OVERVIEW OF THE GLOBAL INDUSTRIAL ROBOTIC SOLUTIONS MARKET
An industrial robot is an automatically controlled, reprogrammable multipurpose
manipulator, programmable in three or more axes, which can be either fixed in place or fixed
to a mobile platform for use in automation applications in an industrial environment. Industrial
robots, based on their application scenarios, are typically categorized into general-purpose and
application-specific industrial robots.
Industrial robots serve as a cornerstone of modern industrial automation, functioning as
automatically controlled, reprogrammable, and highly adaptable robotic arms capable of
operating across three or more axes. The flexibility of industrial robots enables them to be
deployed across a wide range of automation applications in industrial environments. Designed
for high-precision and high-efficiency operations, industrial robots excel at tasks requiring
exceptional accuracy and speed. With advanced control systems, they can perform diverse
functions, progressively replacing manual labor in tasks that are repetitive, hazardous, or
demand consistent precision.
Industrial robot solutions refer to automated production systems consisting of industrial
robots, intelligent control systems and ancillary equipment. Providers of industrial robotic
solutions design, develop, and manufacture robotic systems, incorporating peripheral
equipment and intelligent control technologies to fulfill specific operational requirements.
Such tailored industrial robotic solutions assist customers in addressing their unique process
needs across various industries, enhancing efficiency, precision and productivity. The
Company’s industrial robots and intelligent manufacturing systems business falls into the
industrial robotic solutions industry.
Value Chain of the Global Industrial Robotic Solutions Market
The value chain of the global industrial robotic solutions market consists of three key
segments. The upstream segment involves the research, development and manufacturing of
core automation components and motion control systems, such as motion control systems,
servo systems, precision reducers, and sensors. The midstream segment centers on the
production and integration of industrial robots, with solution providers offering customized
programming and auxiliary equipment to address specific client requirements. In the
downstream segment, industrial robotic solutions are deployed across diverse industries,
including automotive, electronics, metal and machinery, photovoltaics, power battery and
others. The following table sets forth details of these industry participants.
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Value Chain of the Global Industrial Robotic Solutions Market
Upstream
 Downstream
Midstream
Research, development and manufacturing of
core automation components and motion control systems Production and integration of industrial robots
A few industrial robotic solution providers, including our
Company, are able to achieving integration across the
upstream and midstream segments.
• Industrial robotic solution providers
/head2right 1) Whole machine manufacturing: Procure
 a variety of raw materials and components
 from the upstream to integrate and
 manufacture the industrial robot bodies.
/head2right 2) System integration: Combine the
 industrial robot with intelligent control system
 and ancillary equipment to create an automated
 production system for enterprise customers in
 different application areas.
End-market application fields
Automotive
Electronics
Metal and machinery
Photovoltaics
Power battery
Others
Motion control system
Servo system
Precision reducer
Sensor
Others
Source: Frost & Sullivan
V ertical integration has emerged as a significant trend in the industrial robotic solutions
market in recent years. Several industrial robotic solution providers that traditionally focused
on the midstream segment are leveraging their expertise and gradually expanding into the
upstream by bringing the R&D and production of core automation components and motion
control systems in-house. By developing these components internally, solution providers gain
better control over both production costs and the design of core components, enabling them to
deliver more integrated and customized solutions that closely meet the specific process
requirements of their customers. Such vertical integration enhances the overall value-added of
industrial robotic solutions, potentially capturing higher market premiums and expanding
profit margins. Moreover, the expertise gained through R&D and production of core
automation components and motion control systems enhances their technological capabilities,
providing distinctive competitive advantages in the market.
Market Size of the Global Industrial Robotic Solutions Market
Driven by rapid technological advancements and expanding application areas, the global
industrial robotic solutions market has experienced significant growth in recent years. The
market size in terms of revenue, increased from USD14.7 billion in 2020 to USD25.4 billion
in 2024, representing a CAGR of 14.6% from 2020 to 2024, and is expected to maintain its
strong growth rate in the future, with revenue expected to reach USD51.8 billion by 2029, at
a CAGR of 15.4% from 2024 to 2029.
China has emerged as a key driver of global market growth. The industrial robotic
solutions market in China has witnessed remarkable expansion in recent years, driven by
several converging factors, including the vast manufacturing infrastructure in China, increasing
demand for industrial upgrades, and policy support. In particular, over the years, the Chinese
government has issued a series of favorable policies to promote the development of the
industry. For example, the “14th Five-Y ear Plan” for the Development of Smart Manufacturing
(“ɤ̬ʞ”஝ྌ), jointly released by eight departments including the
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Ministry of Industry and Information Technology, proposed to accelerate innovation and
realize technological breakthroughs in industrial robots, CNC machine tools and other smart
equipment. As another example, the “14th Five-Y ear Plan” for the Development of the Robot
Industry ( “ɤ̬ʞ”஝ྌ), jointly released by the Ministry of Industry and
Information Technology and the National Development and Reform Commission and other
departments, proposed to double the density of robots in China’s manufacturing industry by
2025, and to develop a number of leading enterprises with international competitiveness. From
2020 to 2024, market size of the industrial robotic solutions market in China increased from
USD6.9 billion to USD12.7 billion, at a CAGR of 16.5%. This growth trend is expected to
continue, with the market size of the industrial robotic solutions market in China expected to
reach USD28.8 billion by 2029, achieving a CAGR of 17.8% from 2024 to 2029.
In parallel, the rapid growth of industrial robotic solutions manufacturers in China has
driven significant advancements in the R&D of core technologies and components of industrial
robotics. Localized production has significantly lowered production costs, establishing a clear
competitive advantage. Combined with technical breakthroughs, these cost efficiencies have
enabled domestic industrial robot manufacturers to meet the full spectrum of market demand,
steadily challenging and, in some cases, displacing the long-standing dominance of foreign
brands. While international solution providers continue to benefit from strong brand
recognition mainly due to their first-mover advantages in the development of core automation
components and industrial robots, domestic companies are increasingly playing a pivotal role
in the global industrial robotic solutions market. Their deep understanding of domestic needs,
ability to offer flexible and customized services, and continuously improving technological
capabilities position them as emerging leaders in the global industrial automation sector. The
rapid growth of the industrial robotic solutions market in China is expected to foster the
emergence of internationally competitive industrial automation giants.
Market Size of the Global Industrial Robotic Solutions Market by
Revenue, Categorized by Region (USD billion, 2020-2029E)
CAGR 2020-2024 2024-2029E
Total 14.6% 15.4%
China 16.5% 17.8%
North America 14.0% 9.6%
South America 33.1% 30.3%
Europe 16.2% 14.5%
Asia (excluding China) 7.8% 8.7%
Others 8.4% 7.0%
3.4 4.5 4.8 4.6 4.6 5.0 5.4 5.9 6.4 6.92.6 3.3 3.8 4.8 4.8 5.4 6.2 7.2 8.2 9.5
2.0
2.6
2.2 2.5 2.7 2.9
3.1
3.5
6.9
7.5 9.0 10.8 12.7
14.9
17.5
20.5
24.3
28.8
0.3
2020
0.4
0.3
2021
0.4
0.4
2022
0.5
0.4
2023
0.4
2024
0.4
2025E
0.4
2026E
0.4
2027E
0.5
2028E
0.5
2029E
14.7
17.4
20.1
23.0
25.4
29.0
33.4
38.5
0.2
51.8
1.7 1.8 0.7
44.5
1.2 1.5
1.5
1.3
0.9
China
North America
South America
Europe
Asia (excluding China)
Others
Source: International Federation of Robotics, Chinese Institute of Electronics, Frost & Sullivan
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Shipment Volume of the Global Industrial Robots
Global industrial robot shipments have experienced substantial growth, increasing from
390.0 thousand units in 2020 to 541.0 thousand units in 2024, representing a CAGR of 8.5%.
In 2023 and 2024, global industrial robot shipments decreased by 2.1% and 0.1% year-on-year,
respectively, due to general decline in demand for automation equipment across various
industries. China’s market has been a primary driver of the expansion of global industrial robot
shipments. China’s industrial robot shipments surged from 171.5 thousand units in 2020 to
294.2 thousand units in 2024. This remarkable growth elevated China’s share of global
industrial robot shipments from 44.0% in 2020 to 54.4% in 2024.
The global industrial robot market is expected to continue its growth trend in the future,
with shipments anticipated to reach 919.5 thousand units by 2029, representing a CAGR of
11.2% from 2024 to 2029. China is forecast to further solidify its leading position, with its
industrial robot shipments predicted to reach 590.4 thousand units in 2029. This would further
increase China’s proportion of global industrial robot, to 64.2%, and demonstrate an
accelerated CAGR of 14.9% from 2024 to 2029. The rapid expansion of the market in China
and its increasing dominance provide significant opportunities for local industrial robotic
solution providers, positioning them to excel in fierce international competition and potentially
evolve into globally influential industry leaders.
Shipment Volume of the Global Industrial Robots, Categorized by Region
(Thousand units, 2020-2029E)
CAGR 2020-2024 2024-2029E
Total 8.5% 11.2%
China 14.4% 14.9%
North America 9.2% 3.2%
South America 19.5% 12.4%
Europe 5.6% 8.2%
Asia (excluding China) -1.9% 4.5%
Others 0.0% 3.2%
102.5 128.6 121.9 98.8 94.8 97.2 100.6 105.1 110.6 118.3
66.0 82.0 85.0 92.0 82.0 88.1 95.5 104.7 112.7 121.433.2
41.0 44.2 42.2 47.1 48.4 48.4 48.8 52.0 55.2171.5
256.4 282.1 283.2 294.2 323.6
364.1
418.7
492.0
590.4
11.0
2020
11.0
7.1
2021
11.8
8.0
2022
12.8
12.3
2023
11.9
11.0
2024
14.6
11.3
2025E
16.6
11.7
5.9
18.2
12.1
2027E
19.8
12.5
2028E
21.4
12.9
2029E
390.0
526.1 553.0 541.3 541.0
583.2
636.9
707.6
799.6
919.5
2026E
China
North America
South America
Europe
Asia (excluding China)
Others
Source: International Federation of Robotics, Chinese Institute of Electronics, Frost & Sullivan
The automotive, electronics, photovoltaics, and power battery sectors are among the key
industries that have driven, or are expected to continue driving, the expansion of global
industrial robot shipment volumes. The global shipment volume of industrial robots under
automotive, electronics, photovoltaics, and power battery increased from 84.0 thousand units,
110.0 thousand units, 7.8 thousand units, and 16.3 thousand units in 2020, respectively, to
136.9 thousand units, 124.4 thousand units, 25.4 thousand units, and 31.9 thousand units in
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2024, respectively. Driven by the increasing adoption of intelligent technologies in the
automotive industry and the accelerated iteration of electronics products, manufacturing
enterprises are placing greater emphasis on production efficiency and precision. As a result,
industrial robot shipments in these sectors are expected to continue their upward trend. It is
expected that by 2029, global shipment volume of industrial robots for automotive and
electronics sectors will reach 275.9 thousand units and 248.3 thousand units, respectively, with
a CAGR of 15.0% and 14.8% from 2024 to 2029, respectively.
Shipment Volume of the Global Industrial Robots, Categorized by
Downstream Application (Thousand units, 2020-2029E)
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
96.9 120.7 97.1 96.1 111.0 116.5 120.9 123.8 127.1 131.4
44.0
68.4 66.1 76.9 75.7 80.5 86.6 94.8 105.5 119.5
110.0
142.7 156.9 125.9 124.4 137.1 152.9 176.9 207.9
248.3
84.0
117.3 136.1 135.5 136.9 151.6 172.0
390.0
526.1 553.0 541.3 583.2
636.9
707.6
799.6
919.5
541.0
Automotive
Electronics
Metal and machinery
Plastic and chemical products
Food
Photovoltaics
Power battery
Others
CAGR 2020-2024 2024-2029E
Total 8.5% 11.2%
Automotive
Electronics
Metal and machinery
Plastic and chemical products
Food
Photovoltaics
Power battery
Others
13.0%
3.1%
14.5%
3.3%
4.1%
34.3%
18.3%
3.5%
15.0%
14.8%
9.6%
8.3%
9.4%
4.3%
13.0%
3.4%
198.1
231.9
275.9
22.132.2
31.319.228.8
28.8
19.0
7.8
15.9 25.512.0
16.3
15.4 25.0
11.625.0
15.1 23.5
16.541.7
14.7 22.4
33.036.8
14.1 21.6
25.431.9
17.7 26.2
58.850.415.2 22.7
24.535.1 38.9
24.2
43.2 26.9
Source: International Federation of Robotics, Chinese Institute of Electronics, Frost & Sullivan
Market Drivers of the Global Industrial Robotic Solutions Market
 Rising labor costs: The accelerating global population aging trend results in a decline in
the working-age population, severely challenging global manufacturing with labor
shortages and rising costs. This demographic pressure compels enterprises to accelerate
industrial upgrading. Consequently, more manufacturers are adopting higher levels of
automation. Industrial robotic solutions are able to execute repetitive, high-precision
tasks uninterruptedly, boosting efficiency, shortening production cycles, and ensuring
consistent quality. This directly addresses rising labor costs, recruitment issues, and
manual errors, enabling high-quality mass production while optimizing labor structures.
This sustained demand fuels the expansion of the global industrial robotic solutions
market.
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 Technological advancement and innovation: The integration of emerging technologies
into industrial robotic solutions makes them more intelligent, flexible, and efficient,
significantly broadening their range of applications and potential uses. This further drives
the increasing demand for industrial robotic solutions from manufacturing enterprises.
For instance, AI and machine learning technologies can optimize production processes
and enable predictive maintenance, while IoT and big data analytics facilitate equipment
interconnection and data-driven decision-making. Furthermore, the application of
embodied AI in industrial robots is becoming increasingly sophisticated. The
technological advancement and innovation significantly boosts the versatility and
adaptability of industrial robots. The continuous development of these frontier
technologies will drive further expansion of the industrial robotic solutions market.
 Ongoing focus and investment in production safety and stability: In increasingly complex
industrial production environments, ensuring sustained production safety and reliability
has become a key priority for enterprises. Industrial robotic solutions play a critical role
in mitigating the risk of production accidents, protecting worker safety, and maintaining
the continuity and stability of production processes. Furthermore, their capability to
function in extreme or hazardous environments protects workers from high-risk
situations, offering enterprises a more dependable and secure foundation for production
assurance.
Development Trends of the Global Industrial Robotic Solutions Market
 Technology innovation: To meet diverse applications and flexible production needs,
future industrial robots will evolve towards greater intelligence and modularity. Improved
operational convenience through intuitive interfaces and simplified programming will
lower user entry barriers. Modular design will facilitate rapid configuration and
maintenance. In particular, AI is anticipated to be extensively integrated into industrial
robots, enabling advancements such as computer vision, force control, and machine
learning capabilities.
 Vertical integration throughout the value chain: Facing intensified competition and
growing customer demands for customization, efficiency, and cost control, industrial
robotic solution providers are increasingly pursuing vertical integration across the value
chain. This involves actively expanding into upstream operations by internally conducting
research, development, and production of core automation components. Concurrently,
they are enhancing downstream system integration capabilities, offering in-depth,
differentiated customized services for specific sectors such as power batteries,
photovoltaics, automotive, electronics, semiconductors, and construction. This
comprehensive vertical integration enables providers to deliver more cost-effective and
technically advantageous industrial robotic solutions, better satisfying complex customer
needs and strengthening their market share and competitiveness.
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 Horizontal and vertical expansion of downstream application areas: Industrial robotic
solution providers are pursuing dual growth strategies to drive business development and
adapt to evolving market demands. On one hand, they actively promote the horizontal
deep application of their products within established industries such as automotive
manufacturing and electronics assembly. By offering high-speed, high-precision robotic
systems and comprehensive lifecycle services, these providers address the demands of
manufacturing enterprises in these sectors for greater production efficiency and improved
product quality. On the other hand, industrial robotic solution providers are pursuing
vertical expansion into emerging industries, driven by increasing demand for automation
across new application fields. They are developing customized solutions tailored to the
unique processes of these industries.
For industrial robotic solution providers, horizontal expansion into downstream
application fields creates new market opportunities by penetrating industries with
traditionally low levels of robot adoption or automation. V ertical expansion, on the other
hand, focuses on increasing value per client by transitioning from offering individual
automation units to delivering more comprehensive production line or factory-level
automation solutions. Together, these horizontal and vertical expansion strategies enable
industrial robotic solution providers to continuously uncover new growth opportunities,
ensuring sustainable business development in a rapidly evolving market landscape.
 Global deployment: Industrial robotic solution providers are establishing global
production facilities, supply chains, and strengthening service, R&D, and delivery
capabilities worldwide. By leveraging regional advantages, they aim to enhance
operational efficiency, boost international brand influence, and expand market share.
Notably, industrial robotic solution providers in China are becoming pivotal in this
globalization. Driven by a maturing domestic market and accumulated expertise, they are
actively expanding overseas, leveraging their validated technologies and cost advantages.
By establishing international R&D centers, production bases, and service networks,
companies originating in China can meet global client needs, access cutting-edge
technologies, and gain international market experience to further upgrade their domestic
offerings.
Competitive Landscape of the Global Industrial Robotic Solutions Market
The global industrial robotic solutions market is intensely competitive and relatively
fragmented. As of December 31, 2024, there were over 3,000 industrial robotic solution
providers worldwide, with the top 10 players collectively accounting for 34.2% of the market
share in terms of revenue.
In the global industrial robotic solutions market, international providers hold a significant
market share due to their long-established brand reputation and first-mover advantage. As
Chinese providers continue to develop their technologies, their market share in the global
industrial robotic solutions market has been gradually increasing.
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International providers, leveraging their first-mover advantage, strong brand recognition,
and extensive technological expertise in core components, has hold a significant market
position in applications demanding high precision and reliability, such as automotive
manufacturing. Their primary strengths are stable product performance, a mature ecosystem,
and comprehensive global service networks. In contrast, while Chinese providers face technical
gaps with international providers in core components such as servo systems and reducers, they
have made significant strides in a wider range of applications due to their deep understanding
of the domestic market, localized services with rapid responses, and more cost-effective
solutions. The advantages of Chinese suppliers lie in their ability to flexibly meet customer-
specific needs and their strong cost control capabilities, which gives them a competitive edge
against international providers in price competition.
In terms of revenue in 2024, our Company ranked first in global industrial robotic
solutions market among domestic providers, and ranked sixth in global industrial robotic
solutions market among all providers globally. The following table sets forth the ranking and
market share of our Company in the global industrial robotic solutions market in terms of
revenue.
Ranking of Global Industrial Robotic Solution Providers,
in terms of Revenue in 2024
Among Chinese providers Among all providers globally
Ranking Providers
Revenue
(RMB billion,
2024)
Market
share
(%, 2024) Providers
Revenue
(RMB billion,
2024)
Market
Share
(%, 2024)
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Company 3.0 1.7% Company F (6) 16.5 9.3%
2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Company A (1) 1.3 0.8% Company G (7) 11.3 6.3%
3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Company B (2) 1.2 0.7% Company H (8) 10.7 6.0%
4 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Company C (3) 1.2 0.6% Company I (9) 8.5 4.8%
5 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Company D (4) 0.8 0.4% Company J (10) 4.1 2.3%
6 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Company E (5) 0.7 0.4% Our Company 3.0 1.7%
Source: Public fillings, websites of market players, expert interview, Frost & Sullivan
Notes:
(1) Company A is a public company founded in 2007 and listed on the Shanghai Stock Exchange, headquartered
in Anhui, China, committed to providing research and development, production and sales business of core
components, industrial robots and system integration.
(2) Company B is a public company founded in 2000 and listed on the Shenzhen Stock Exchange, headquartered
in Shenyang, China, committed to providing business related to the robot industry chain, including robot core
components, robot production and robot system solutions.
(3) Company C is a public company founded in 2003 and listed on the Shenzhen Stock Exchange, headquartered
in Shenzhen, China, committed to providing frequency converter, servo system, industrial robot, industrial
vision and other industrial automation products and solutions.
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(4) Company D is a public company founded in 2007 and listed on the Shenzhen Stock Exchange, headquartered
in Guangdong, China, dedicated to the provision of industrial robots and automation application systems,
injection molding machines, ancillary equipment and other products and services.
(5) Company E is a public company founded in 1995 and listed on the Shenzhen Stock Exchange, headquartered
in Shanghai, China. It focuses on robotics products and systems business, including servo systems, robotics
system integration, etc.
(6) Company F is a public company founded in 1972 and listed on the Tokyo Stock Exchange, headquartered in
Japan. It focuses on the research, development and manufacture of CNC systems, industrial robots and other
industrial automation equipment.
(7) Company G is a public company founded in 1915 and listed on the Tokyo Stock Exchange, Osaka Stock
Exchange and Fukuoka Stock Exchange, headquartered in Japan. It focuses on development and production of
servo motors, inverters, industrial robots and other industrial automation equipment.
(8) Company H is a public company founded in 1988 and listed on the SIX Swiss Exchange, Stockholm Stock
Exchange, New Y ork Stock Exchange, London Stock Exchange and Frankfurt Stock Exchange, headquartered
in Switzerland, committed to providing products and services related to electrification and automation.
(9) Company I is a public company founded in 1898 and listed on the Frankfurt Stock Exchange, headquartered
in Germany. It is a wholly-owned subsidiary of a technology group and is committed to developing and
producing industrial robots and helping corporate customers to realize factory automation.
(10) Company J is a public company founded in 1878 and listed on the Tokyo Stock Exchange, headquartered in
Japan. It focuses on the production of construction machinery, industrial equipment and marine hydraulic
machinery.
In terms of shipment volume of industrial robots in 2024, our Company ranked second in
the industrial robotic solutions market in China, with a market share of 9.5%. Based on the
shipment volume of industrial robots in the first half of 2025, our Company ranked first in the
industrial robotic solutions market in China. The following table sets forth the ranking and
market share of our company in the industrial robotic solutions market in China in terms of
shipment volume of industrial robots.
Ranking of Industrial Robotic Solution Providers in China, in terms of Shipment Volume
of Industrial Robots, in 2024 and the six months ended June 30, 2025
2024 Six Months Ended June 30, 2025
Ranking Providers
Shipment
Volume of
Industrial Robots
(Thousand units,
2024)
Market
Share
(%, 2024) Providers
Shipment
Volume of
Industrial Robots
(Thousand units,
2025H1)
1 /H1118/H1118/H1118/H1118/H1118/H1118Company F 32.0 10.9% Our Company 16.4
2 /H1118/H1118/H1118/H1118/H1118/H1118Our Company 28.1 9.5% Company F 15.6
3 /H1118/H1118/H1118/H1118/H1118/H1118Company C 26.0 8.8% Company I 15.4
4 /H1118/H1118/H1118/H1118/H1118/H1118Company I 24.0 8.2% Company C 13.3
5 /H1118/H1118/H1118/H1118/H1118/H1118Company H 17.0 5.8% Company H 10.2
Source: Public fillings, websites of market players, expert interview, Frost & Sullivan
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In terms of shipment volume of industrial robots in 2024, the Company ranked fifth in
global industrial robotic solutions market among all providers globally, with a market share of
5.5%. The following table sets forth the ranking and market share of our Company in the global
industrial robotic solutions market in terms of shipment volume of industrial robots.
Ranking of Global Industrial Robotic Solution Providers,
in terms of Shipment Volume of Industrial Robots in 2024
Ranking Providers
Shipment Volume of
Industrial Robots
(Thousand units, 2024)
Market Share
(%, 2024)
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company F 100.0 18.5%
2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company I 51.0 9.4%
3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company H 50.0 9.2%
4 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company G 48.0 8.9%
5 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Company 30.0 5.5%
Source: Public fillings, websites of market players, expert interview, Frost & Sullivan
Our Company’s industrial robot products have a wide range of applications in different
downstream segments, among which our Company is an industry leader in sheet metal bending,
photovoltaic, power battery and other fields. In terms of the shipment volume of industrial
robots under the field of photovoltaic and sheet metal bending in 2024, our Company ranked
first in the global industrial robotic solutions market, with a market share of 11.0% in
photovoltaic and 7.8% in sheet metal bending. In terms of the shipment volume of industrial
robots under the field of power battery industry in 2024, our Company ranked first in the
industrial robotic solutions market in China with a market share of 16.9%, and ranked second
in the global industrial robotic solutions market with a market share of 12.7%. In terms of the
shipment volume of industrial robots under the field of arc welding industry in 2024, our
Company ranked fourth in the industrial robotic solutions market in China with a market share
of 7.9%, and ranked fifth in the global industrial robotic solutions market with a market share
of 5.3%.
Key Success Factors and Entry Barriers of the Global Industrial Robotic Solutions
Market
 Full-stack service capabilities: Leading industrial robotic solution providers are
increasingly adopting a strategy of vertical integration, focusing not only on the
production of robotic bodies but also on the upstream R&D of critical components. From
a cost structure perspective, key upstream components, such as reducers, servo systems,
and controllers, account for approximately 65% to 75% of the total cost of an industrial
robot. V ertical integration of the upstream segment of the industrial robot industry chain
enables industrial robotic solution providers to better control costs, accelerate product
development cycles, and reduce reliance on external suppliers. Simultaneously, these
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industry leaders are expanding their downstream system integration capabilities to offer
tailored, differentiated solutions for high-demand sectors such as power batteries,
photovoltaics, automotive manufacturing, and electronics. The complexity and resource
intensity of this approach create substantial barriers to entry for new competitors, who
often lack the specialized expertise, cohesive organizational capabilities, and established
market reputation necessary to develop and deliver a comprehensive service ecosystem.
 Technological innovation: The industrial robotic solutions market is characterized by its
highly technology-intensive nature and significant technical barriers. The development of
industrial robotic solutions requires extensive experience and technological
accumulations in a various of fields, including microelectronics, automation control, and
mechatronics. Moreover, the wide range of downstream application industries demands
that manufacturers possess extensive cross-sector experience and a deep understanding of
customer-specific processing technologies to address diverse and highly specialized
needs. As industrial robots continue to evolve toward greater precision and intelligence,
their varied applications require tailored engineering solutions and process-specific
adjustments. For example, in the semiconductor industry, to ensure production accuracy
and yield, industrial robots must achieve repeatability accuracy of 0.01mm or better,
supported by customized end-effectors and advanced vibration suppression algorithms to
prevent microscopic damage to fragile materials. Similarly, in the power battery industry,
industrial robots are required to perform high-speed and high-precision laser welding and
stacking operations, with welding speeds reaching up to 50mm per second. This requires
industrial robot solution providers to develop specialized vision-guided systems and
adaptive control software to ensure the sealing and safety of battery packs. Such
capabilities necessitate substantial, long-term investment in research and development,
along with continuous technological innovation. Consequently, the high level of expertise
and resource commitment required creates a significant barrier to entry, making it
exceedingly challenging for new entrants to rapidly establish competitiveness in this
market.
 Customer base: Corporate customers in the industrial robotic solutions market demand
stringent reliability, technical strength, and proven project experience from suppliers.
They prioritize established providers with long-term cooperation and strong brand
reputations. Leading solution providers thus enjoy significant customer stickiness,
cultivated through years of industry standing and stable relationships. For new entrants,
breaking into these well-established relationships and earning the trust of major
customers requires significant marketing investment and considerable time. This
challenge extends beyond showcasing technical capabilities; it also necessitates the
establishment of robust pre-sales and after-sales support systems, as well as the
development of a track record of consistent customer achievements and proven
operational success. Consequently, the ability to secure and maintain a stable customer
base represents a critical barrier to entry in this market.
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 Local service capabilities: The implementation and operation of industrial robotic
solutions require highly tailored and professional localized support, including prompt
technical assistance, timely equipment maintenance, environment-specific optimization,
and adherence to local regulatory requirements. Leading global solution providers
leverage extensive worldwide service networks, experienced local teams, and a deep
understanding of regional market dynamics to establish production capabilities, supply
chains, and strong brand recognition. For example, leading industrial robotic solution
providers typically respond to customer service requests within two hours and dispatch
local technicians to the site within 48 hours to provide onsite-support. In contrast, new
market entrants often face significant challenges during their early stages, as they
typically lack the substantial capital investment and in-depth knowledge of diverse
overseas business environments required to develop efficient and professional localized
service systems. These limitations present significant obstacles to their ability to achieve
rapid global expansion and establish a robust international presence.
 Brand recognition: Industrial robotic solutions play a critical role in ensuring the stability
and reliability of downstream customers’ products and production processes. As a result,
the industry reputation of solution providers becomes essential considerations in
long-term supplier selection. A strong brand signifies product reliability, technological
innovation, quality assurance, robust technical support, and strict adherence to industry
standards. Customers tend to favor established market leaders with well-recognized and
trusted brands. For new entrants, overcoming the dominance of established brands and
building recognition and trust requires a prolonged period of sustained effort, including
continuous product innovation and the consistent delivery of high-quality services. This
process of reputation-building constitutes a significant and well-defined brand barrier to
entry within the market.
Cost Analysis of Industrial Robots
The rapid development of industrial robots is closely related to the development of their
major components. Main raw material and components of industrial robots include reducers,
servo motors, controllers and other core automation components. The selection and
performance of these major components directly affect the competitiveness of industrial robots
in terms of intelligence level, operational efficiency, endurance, safety performance and other
dimensions.
The cost structure of industrial robot has undergone significant technology-driven
evolution, demonstrating a clear trend where mechanical components experience continuous
cost reduction while intelligent components gain increasing value.
In 2020, import-dependent reducers dominated the cost structure with a 36% share. Servo
systems with high technical barriers accounted for 22% of total costs, comprising 15% for
servo motors and 7% for servo drives. And controllers and structural components constituted
21% and 9%, respectively.
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In 2024, accelerated domestic substitution and scaling effects reduced the reducer share
to 32%. Within servo systems, motor costs declined to 12%, while drives increased slightly to
8%. The structural component share rose to 11% due to growing lightweight requirements in
industrial robot design.
In 2029, harmonic technology breakthroughs combined with humanoid robot mass
production are expected to further decrease reducer costs to 23%. Continuous servo system
upgrades are expected to adjust motor and drive shares to 10% and 7%, respectively.
Meanwhile, controller costs are expected to rise significantly to 25%, while structural
components is expected to increase to 14%, reflecting sustained technological advances in
sensing systems and innovative materials.
In the future, with the gradual maturity of cutting-edge technologies, such as harmonic
drive technology, and the expansion of production scale, it is expected that the cost share of
reducers will be further reduced. Concurrently, advancements in sensing technologies and
material innovations will likely drive continuous growth in the proportion of intelligent
components such as controllers. The industrial robot industry will benefit from deepening
localization initiatives, and proprietary technological breakthroughs, increasing the self-
sufficiency rate of critical components and will be widely applied in more industries with an
optimized cost structure.
Cost Analysis of Industrial Robots, 2020, 2024, 2029E
ControllerServo MotorReducer Servo Driver Structural Component Others
32.0%
12.0%
8.0%
23.0%
11.0%
14.0%
36.0%
15.0%7.0%
21.0%
9.0%
12.0% 23.0%
10.0%
7.0%
25.0%
14.0%
21.0%
2020 2024 2029E
OVERVIEW OF THE GLOBAL CORE AUTOMATION COMPONENTS AND MOTION
CONTROL SYSTEM SOLUTIONS MARKET
Core automation components and motion control system solution refer to integrated
intelligent control unit solution that include core control and functional components such as
motion control systems, servo systems, and numerical control (“ NC”) systems. These solutions
aim to provide customers with high-performance motion control and one-stop after-sales
service capabilities for various application scenarios. Core automation components and motion
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control system solutions encompass a complete product matrix, spanning from the information
layer, control layer, and drive layer to the execution layer. Centered around motion control
systems, servo systems, and NC system products, core automation components and motion
control system solutions are primarily used in the automation control of intelligent equipment,
including metal forming NC machine tools, industrial robots, photovoltaic manufacturing
equipment, power battery manufacturing equipment, electronics manufacturing equipment,
packaging machinery, and semiconductor manufacturing equipment. The Company’s core
automation components and motion control systems business falls into the core automation
components and motion control system solutions industry.
Market Size of the Global Core Automation Components and Motion Control System
Solutions Market
The market size of global core automation components and motion control system
solutions market, in terms of revenue, has grown from USD58.8 billion in 2020 to USD77.5
billion in 2024, with a CAGR of 7.1% during this period. In particular, the market size of core
automation components and motion control system solutions market in China expanded from
USD23.5 billion in 2020 to USD34.1 billion in 2024, increasing its share of the global market
from 40.0% in 2020 to 44.0% in 2024. In the future, the market size of global core automation
components and motion control system solutions market will further expand and is expected to
reach USD110.5 billion in 2029, representing a CAGR of 7.3% from 2024 to 2029. The market
size of core automation components and motion control system solutions market in China is
expected to increase to USD56.9 billion in 2029 at a CAGR of 10.8% from 2024 to 2029, and
the proportion of the global market is expected to reach 51.5% in 2029.
Market Size of the Global Core Automation Components and
Motion Control System Solutions Market, in terms of Revenue
(USD billion, 2020-2029E)
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
58.8 62.6 66.7
72.3 77.5
83.2
89.0
95.4
102.5
110.5
CAGR
Total
2020-2024
7.1%
2024-2029E
7.3%
Source: Frost & Sullivan
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Market Drivers of the Global Core Automation Components and Motion Control System
Solutions Market
 Growing demand for industrial automation upgrades and intelligent manufacturing: As
the global economy continues to grow, end-consumer demand for greater product
diversity and customization is rising. This trend increases the complexity of
manufacturing processes, technological challenges, and production requirements,
prompting traditional manufacturing enterprises to accelerate their transition toward
automation and intelligence. On the one hand, manufacturers are exhibiting a strong
demand for core automation components and motion control system solution to enhance
production efficiency, lower operational costs, improve product quality, and respond to
increasingly complex market dynamics. On the other hand, the widespread adoption of
intelligent manufacturing concepts is driving enterprises to adopt advanced technologies.
This imperative for upgrading is evident not only in emerging industries but also in the
transformation of traditional manufacturing sectors, fueling continuous and robust growth
momentum in the core automation components and motion control system solutions
market.
 Demand for automation value chain collaboration: Amid intensifying market competition
and growing emphasis on supply chain resilience, an increasing number of enterprise
clients in downstream sectors of the core automation components and motion control
system solutions market, such as industrial robot manufacturers, are shifting toward
self-developed core automation components and motion control system solutions. By
independently developing these solutions, enterprises can gain better control over product
manufacturing costs, optimize their supply chain configurations, and improve their
responsiveness to market fluctuations. Through in-house research and development of
core technologies, these enterprises can customize and develop core automation
components and motion control system solutions that align more closely with specific
application scenarios, offer greater ease of operation, and exhibit high compatibility with
their product features and customer requirements.
 Growing demand from downstream industries: Downstream industries such as industrial
robots, electronics, and semiconductor manufacturing equipment are experiencing rapid
growth and continuous technological advancements. These industries are increasingly
demanding higher levels of production efficiency, precision, and automation, directly
stimulating the need for high-performance motion control and numerical control systems
from related manufacturing enterprises. The rapid development of these downstream
industries is creating vast opportunities and sustained growth momentum for the core
automation components and motion control system solutions market, as manufacturers
seek to meet their evolving requirements for advanced automation technologies.
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Development Trends of the Global Core Automation Components and Motion Control
System Solutions Market
 Digital factory transformation: In the future, an increasing number of core automation
component and system solution providers are expected to evolve into digital factory
system solution providers. These companies will leverage their technological and product
expertise in areas such as control, drives, sensing, and develop comprehensive digital
factory architectures tailored to needs of customers. This transformation is focused on
delivering one-stop, full-lifecycle solutions, encompassing all stages from design to
production, as well as management and maintenance. The ultimate objective is to enable
clients to achieve comprehensive optimization and intelligent upgrades of their
production processes. These providers strive to deliver holistic factory solutions,
integrating automation planning with operational models, supply chain management, and
manufacturing management.
 Industry Customization and Integrated Development: Traditional general-purpose core
automation components and motion control system solutions often fall short in addressing
the emerging, highly individualized production demands of various industries. As a result,
customized core automation components and motion control system solutions are
increasingly gaining recognition and preference among clients. These solutions are
specifically designed to accommodate unique mechanical structures, ensure user-friendly
operation, and effectively resolve compatibility challenges across multiple automated
devices. Simultaneously, an increasing number of core automation component and system
solution providers are prioritizing integrated development to enable the efficient
operation of multiple control units. By seamlessly combining products such as motion
control systems, execution systems, and frequency converters, these providers aim to
deliver comprehensive system solutions. This integrated approach seeks to streamline
control systems, reduce operational costs, minimize data redundancy, and ultimately
provide clients with more stable and efficient automation control capabilities to support
their long-term development objectives.
Competitive Landscape of the Global Core Automation Components and Motion Control
System Solutions Market
The global core automation components and motion control system solutions market is
relatively fragmented. In 2024, more than 6,000 manufacturers operated in this space
worldwide. The majority of these market participants focus on providing products within
specific niche segments, with only a limited number possessing the comprehensive capabilities
to deliver a full range of products and services across the entire value chain.
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SOURCE OF INFORMATION
We commissioned Frost & Sullivan, an independent global consulting firm that offers
industry research and market strategies and provides growth consulting and corporate training
to conduct a detailed research on and analysis of the global industrial robotic solutions market
and the global core automation components and motion control system solutions market. We
have agreed to pay a fee of RMB480,000 to Frost & Sullivan in connection with the preparation
of the Frost & Sullivan Report. We have extracted certain information from the Frost &
Sullivan Report in this section, as well as in “Summary,” “Business,” “Financial Information,”
and elsewhere in this prospectus to provide our potential investors with a more comprehensive
presentation of the industries where we operate. During the preparation of the Frost & Sullivan
Report, Frost & Sullivan performed both primary and secondary research, and obtained
knowledge, statistics, information, and industry insights on the industry trends of the target
research markets. Primary research involved discussing the status of the market with leading
industry participants and industry experts. Secondary research involved reviewing company
reports, independent research reports and data based on Frost & Sullivan’s own database. Frost
& Sullivan has independently verified the information, but the accuracy of the conclusions of
its review largely relies on the accuracy of the information collected. Frost & Sullivan’s
research may be affected by the accuracy of assumptions used and the choice of primary and
secondary sources.
The Frost & Sullivan Report was compiled based on the following assumptions: (i) the
economy of Chinese Mainland and the global economy are likely to maintain steady growth in
the near future; and (ii) the social, economic, and political environment of Chinese Mainland
and the world is likely to remain stable from 2024 to 2029.
Our Directors confirm that, after making reasonable enquiries, there is no adverse change
in the market information since the date of the Frost & Sullivan Report that may qualify,
contradict or have a material impact on the information.
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The PRC regulations that have a significant impact on our business operations are set out
below:
REGULATIONS AND POLICIES RELATING TO THE INDUSTRIAL ROBOTICS
INDUSTRY
The Implementation Measures for Standardized Management of the Industrial Robotics
Industry () (“Measures for Standardized Management”
()) were issued by the Ministry of Industry and Information Technology (MIIT)
in July 2017 and came into effect in August 2017. The latest revised version of the Measures
for Standardized Management took effect on August 1, 2024. According to the Measures for
Standardized Management, the MIIT adopts announcement-based management for industrial
robot enterprises that meet the Standard Conditions of the Industrial Robotics Industry ( ʈ
ุዚኜɛБุ஝ᇍૢ΁) (“Standard Conditions” ( ஝ᇍૢ΁)). Enterprises may
voluntarily apply. The MIIT reviews the application materials submitted by enterprises who
apply for inclusion in the announcement, publicly discloses and officially publishes a list of
industrial robot enterprises that meet the Standard Conditions, conducts supervision and
inspections of these enterprises, and make adjustments to or revoke announcements as
necessary.
The Standard Conditions were issued by the MIIT in December 2016, with the latest
revised version taking effect in August 2024. The Standard Conditions specified requirements
across several key areas, including basic requirements, technological capabilities and
production conditions, quality requirements, personnel competence, sales and after-sales
service, safety management, social responsibility, and regulatory compliance.
The Guidelines on Establishment of National Standards Systems for Intelligent
Manufacturing (2024) (یܸ2024و)) were issued by the
MIIT and the Standardization Administration of China in April 2025. The guidelines call for
the unwavering implementation of the strategies for building China into a manufacturing and
cyber power, the strengthening of standards as a foundation and guide, and the coordinated
advancement of both domestic and international standardization efforts. The guidelines also
emphasize the continuous improvement of top-level design for intelligent manufacturing
standards, supporting the development of a modern industrial system with high-quality
intelligent manufacturing standards, accelerating the development of new quality productive
forces, promoting high-quality and new-type industrialization, and driving the transformation
and upgrading of the manufacturing sector towards high-end, intelligent, and sustainable
development.
The Guiding Catalogue for Industrial Structural Adjustment (2024 Edition) ( ପุഐ࿴
ኬͦ፽(2024 ϋ͉)) promulgated by the NDRC in December 2023 mentioned that, the
industries to be encouraged include intelligent manufacturing, which includes “robotics and
integrated systems”, including but not limited to professional and specialized robotics and
integrated systems, high-precision speed reducers, high-performance servo systems, intelligent
controllers, and intelligent integrated joints and other key components for robotics.
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The Guiding Opinions on the Innovative Development of Humanoid Robots ( ɛҖዚኜ
ኬจԈ) were issued by the MIIT in October 2023. This document calls for
promoting high-quality development of the humanoid robotics industry, fostering new quality
productive forces, and enabling high-level support for new industrialization. It also sets the
substantial enhancement of technological innovation capabilities in humanoid robotics and the
establishment of a secure and reliable industrial and supply chain system by 2027 as key
development goals.
The 14th Five-Y ear Plan for the Development of the Robotics Industry ( “ɤ̬ʞ”ዚኜ
஝ྌ) was issued in December 2021 by the MIIT, the National Development and
Reform Commission (NDRC), the Ministry of Science and Technology, the Ministry of Public
Security, the Ministry of Civil Affairs, the Ministry of Housing and Urban-Rural Development,
the Ministry of Agriculture and Rural Affairs, the National Health Commission, the Ministry
of Emergency Management, the People’s Bank of China, the State Administration for Market
Regulation (SAMR), the former China Banking and Insurance Regulatory Commission, the
China Securities Regulatory Commission (CSRC), the State Administration of Science,
Technology and Industry for National Defense, and the National Mine Safety Administration.
The plan clearly sets out the goal of accelerating the high-quality development of the robotics
industry. It envisions that by 2025, China will become a global hub for technological
innovation in robotics, a center for high-end manufacturing, and a leader in integrated
applications; and by 2035, China’s overall strength in the robotics industry is expected to reach
a globally leading level, with robotics becoming an integral part of economic development,
daily life, and social governance.
The 14th Five-Y ear Plan for the Development of Intelligent Manufacturing ( “ɤ̬ʞ”
஝ྌ) was issued in December 2021 by the MIIT, the NDRC, the Ministry of
Education, the Ministry of Science and Technology, the Ministry of Finance (MOF), the
Ministry of Human Resources and Social Security, the SAMR, and the State-owned Assets
Supervision and Administration Commission of the State Council (SASAC). The plan calls for
the vigorous development of intelligent manufacturing equipment and the strengthening of
collaborative innovation among industry, academia, and research institutes to address
weaknesses and gaps in key areas such as sensing, control, decision-making, and execution,
with the aim of achieving breakthroughs in critical “bottleneck” components and devices.
The 14th Five-Y ear Plan for Economic and Social Development and Long-range
Objectives Through the Y ear 2035 of the People’s Republic of China ( ʕശɛ͏΍ձ਷਷͏
ʞϋ஝ྌձ2035) was issued by the State Council
in March 2021. The plan calls for the in-depth implementation of intelligent manufacturing
projects to advance the manufacturing sector towards high-end and intelligent development;
fostering advanced manufacturing clusters and promoting innovation-driven development in
industries such as robotics; the in-depth implementation of special programs to enhance the
core competitiveness of the manufacturing sector and support technological transformation;
encouraging enterprises to adopt advanced and applicable technologies, upgrade equipment,
and scale up the application of new products; and the development of intelligent manufacturing
demonstration factories and the improvement of the intelligent manufacturing standards
system.
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The State Council’s Guiding Opinions on Deepening the Integration of the “Internet +
Advanced Manufacturing” to Develop the Industrial Internet (2018–2020) (ଉʷ
“ʝᑌၣ+΋ආႡிุ”ኬจԈ(2018-2020 ϋ)) were issued in November
2017 by the State Council. The document calls for focusing on key areas such as CNC machine
tools, industrial robots, and large-scale power equipment to achieve integrated innovation in
intelligent control, smart sensing, industrial-grade chips, and network communication modules,
and to develop a new generation of intelligent equipment featuring networking, computing, and
optimization capabilities.
The New Generation Artificial Intelligence Development Plan (஝
ྌ) was issued by the State Council in July 2017. The plan calls for the development of
intelligent industrial robots and intelligent service robots to achieve large-scale deployment
and entry into international markets; overcoming technical challenges related to core
components and specialized sensors of intelligent robots; and improving standards for
hardware interfaces, software Interface protocols and safe operation for intelligent robots.
The Made in China 2025 ( ʕ਷Ⴁி2025 ) was released in May 2015 by the State
Council, which includes the “Intelligent Manufacturing Program ( ౽ঐႡிʈ೻)” as top two
of the nine key strategic projects. In the area of intelligent manufacturing, it clearly prioritizes
breakthroughs in high-end CNC machine tools, industrial robots, additive manufacturing
equipment, new types of sensors, and intelligent instruments.
The Guiding Opinions on Promoting the Development of the Industrial Robotics Industry
(ኬจԈ) were issued in December 2013 by the MIIT.
The document calls for the development of industrial robot system integration technologies
that meet user needs, host machine design technologies, and key component manufacturing
technologies; achieving breakthroughs in a number of core technologies and critical
components; improving the reliability and stability of widely used mainstream products; and
promoting large-scale demonstration applications of industrial robots in key areas of industrial
manufacturing.
LA WS AND REGULATIONS RELATING TO INTELLECTUAL PROPERTY RIGHTS
Patent
The Patent Law of the PRC () (the “Patent Law”) is revised
by the SCNPC on October 17, 2020 and came into effect on June 1, 2021. According to the
Patent Law, when the invention or utility model patent is granted, unless otherwise stipulated
in the Patent Law, without the approval of the patent owner, no entity or person shall
implement the relevant patent, that is, manufacture, use, offer to sell, sell or import the
patented products for business purposes, or use the patented method, or use, offer to sell, sell
or import the products directly obtained with the patented method. Upon the grant of a design
patent, no entity or person shall, without the approval of the patent owner, implement the
relevant patent, that is, manufacture, offer to sell, sell or import the design patent products for
business purposes. Implementing the patent without the approval of the patent owner
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constitutes the infringement of patent rights. Any dispute in connection with such issues shall
be resolved by the relevant parties through negotiation. If the relevant parties refuse to
negotiate or the negotiation fails, the patent owner or the relevant stakeholders may file a
lawsuit in the people’s court or turn to the patent administration authorities for handling. The
amount of compensation for patent infringement shall be determined based on either the actual
losses suffered by the patent owner due to the infringement or the profits obtained by the
infringer therefrom. Where it is difficult to determine the losses of the patent owner or the
gains derived by the infringer, the compensation amount shall be determined reasonably with
reference to a multiple of the royalties of such patent. For willful infringement of patent rights
under serious circumstances, the amount of compensation may be determined at not less than
one time and not more than five times the amount calculated using the above methods.
Pursuant to the Rules for Implementation of the Patent Law of the PRC ( ʕശɛ͏΍
), which was amended by the State Council on December 11, 2023 and
became effective on January 20, 2024, where the entity to which a patent right is granted does
not agree with the inventor or the designer on, or to specify in its legitimately enacted company
rules the way and the amount of reward, the entity shall reward the inventor or designer within
3 months from the date of the announcement of the patent right grant. The minimum reward
for an invention patent shall not be less than RMB4,000; and the minimum reward for a utility
model or design patent shall not be less than RMB1,500.
Trademark
According to the Trademark Law of the PRC () (the
“Trademark Law”) revised by the SCNPC on April 23, 2019 and came into effect on November
1, 2019, the registered trademark has a validity period of 10 years starting from the registration
date. The trademark registrant enjoys the exclusive right to use the trademark. Any dispute in
connection with the activities infringing the registered trademark set out in Article 57 of the
Trademark Law shall be resolved by the relevant parties through negotiation. If the relevant
parties refuse to negotiate or the negotiation fails, the trademark registrant or the relevant
stakeholders may file lawsuits in the people’s court or turn to the industrial and commercial
administrative department for handling. The amount of compensation for trademark
infringement shall be determined based on the actual losses suffered by the trademark owner
due to the infringement. Where the actual losses are difficult to determine, the amount may be
determined based on the profits obtained by the infringer from the infringement. Where it is
difficult to determine the losses of the trademark owner or the profits derived by the infringer,
the compensation shall be determined reasonably with reference to a multiple of the royalties
of such trademark. For malicious infringement of the exclusive trademark right under serious
circumstances, the amount of compensation may be determined at not less than one time and
not more than five times the amount calculated using the above methods. The compensation
shall also cover the reasonable expenses incurred by the trademark owner in stopping the
infringement.
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Copyright
Copyright (including software copyright) is mainly protected by the Copyright Law of the
PRC () as promulgated on September 7, 1990 and last amended
on November 11, 2020 by the SCNPC and the Implementing Rules of the Copyright Law of the
PRC (ૢԷ) as promulgated on August 2, 2002 and last
amended on January 30, 2013 by the State Council. Such law and rules prescribe that Chinese
citizens, legal persons or other organizations enjoy copyright protection over their works,
whether published or not, in the domain of literature, art and science.
In addition, Internet activities, products disseminated over the Internet and software
products also enjoy copyright. Pursuant to the Measures for the Registration of Computer
Software Copyright () promulgated by the National Copyright
Administration of the PRC (ᛆ҅) (the “NCA”) on February 20, 2002
and the Regulation on Protection of Computer Software (ᚐૢԷ)
promulgated by the State Council on June 4, 1991 and last amended by the State Council on
January 30, 2013, the NCA is mainly responsible for the registration and management of
software copyright in China; the Copyright Protection Center of China (ᚐʕː)
(the “ CPCC ”) is recognised as the software registration organisation. The CPCC shall grant
certificates of registration to computer software copyright applicants in compliance with the
regulations of the Measures for the Registration of Computer Software Copyright (ၑዚழ
) and the Regulation on Protection of Computer Software (ၑዚழ΁
ᚐૢԷ).
Domain names
In accordance with the Measures for the Administration of Internet Domain Names ( ʝ
) which was issued by the MIIT on August 24, 2017 and came into effect
on November 1, 2017, the MIIT is responsible for the supervision and administration of domain
name services in the PRC. Communication administrative bureaus at provincial levels shall
conduct supervision and administration of the domain name services within their respective
administrative jurisdictions. Domain name registration services shall, in principle, be subject
to the principle of “first apply, first register”. A domain name registrar shall, in the process of
providing domain name registration services, ask the applicant for which the registration is
made to provide authentic, accurate and complete identity information on the holder of the
domain name, along with other relevant registration details.
LA WS AND REGULATIONS RELATING TO PRODUCT LIABILITY
Pursuant to the Product Quality Law of the PRC ()
promulgated on February 22, 1993 and most recently amended December 29, 2018 by the
SCNPC, the sellers shall be responsible for the repair, replacement or return of the product sold
if: (1) the product sold does not possess the properties for use that it should possess, and no
prior and clear indication is given of such a situation; (2) the product sold does not conform
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to the applied product standard as carried on the product or its packaging; or (3) the product
sold does not conform to the quality indicated by such means as product description or physical
sample. If a consumer incurs losses as a result of the purchased product, the seller shall
compensate for such losses.
According to the Civil Code, if products are identified as defective after they have been
put into circulation, the manufacturers or the sellers shall take remedial measures such as
issuing warnings, alerts, calls and recall of products in a timely manner. In the event of damage
arising from a defective product or the failure to take timely remedial actions, the infringed
party may seek compensation from either the manufacturer or seller of such product. If the
defect is caused by the seller, the manufacturer shall be entitled to seek reimbursement from
the seller upon compensation of the victim. If the product was produced or sold with known
defects, causing deaths or severe adverse health issues, the infringed party has the right to
claim punitive damages in addition to compensatory damages.
LA WS AND REGULATIONS RELATING TO PRODUCTION SAFETY
The Work Safety Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷τΌ͛ପ
) (the “Work Safety Law”), promulgated by the SCNPC on June 29, 2002, was most
recently revised on June 10, 2021 and came into effect on September 1, 2021. Under the Work
Safety Law, China enforces a liability and accountability mechanism for production safety
accidents. Entities engaged in production and business operations must comply with national
or industry work safety standards established in accordance with the law, and provide working
conditions that meet the requirements of applicable laws, administrative regulations, and
national or industry standards. Entities engaged in production and business operations are
required to post prominent safety warning signs at workplaces and on facilities or equipment
that involve significant hazards. The design, manufacturing, installation, use, inspection,
maintenance, modification, and decommissioning of safety equipment must comply with
national or industry standards.
LA WS AND REGULATIONS RELATING TO ENVIRONMENTAL PROTECTION
Pursuant to the Environmental Impact Assessment Law of the People’s Republic of China
() amended by the Standing Committee of the NPC and
came into effect on December 29, 2018, the Regulations on the Environmental Protection of
Construction Projects (ᚐ၍ଣૢԷ) amended by the State Council on July
16, 2017 and came into effect on October 1, 2017, and the Interim Measures for the Acceptance
Examination of Environmental Protection Facilities of Construction Projects (ணධͦംʈ
) promulgated by the former Ministry of Environmental Protection
and came into effect on November 20, 2017, enterprises planning for construction projects
shall provide environmental impact reports, environmental impact statements and
environmental impact registration forms relating to such projects. The environmental impact
reports and environmental impact statements must be approved by the competent
environmental protection authority prior to the commencement of any construction work, and
the environmental impact registration forms must be filed with the said authority. Unless
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otherwise provided by laws and regulations, enterprises that are required to submit an
environmental impact report and an environmental impact statement shall be solely responsible
for the examination and acceptance of the environmental protection facilities upon the
completion of the construction project. Construction projects shall not be officially put into
production or use until their associated environmental protection facilities have passed
acceptance inspections. The relevant regulatory authorities have the power to carry out random
inspections and supervise the implementation of these facilities.
Enterprises and other producers that discharge pollutants shall take measures to prevent
and control the environmental pollution and harm caused by the waste gas, waste water, waste
residue and dust generated during production, construction or other activities. Enterprises and
other producers and operators that discharge pollutants shall establish an environmental
protection responsibility system and specify the responsibilities of the persons in charge of the
units and the relevant personnel. Facilities for the prevention and control of pollution in a
construction project shall be designed, constructed and put into operation simultaneously with
the main work. The pollution prevention facilities shall comply with the requirements of the
approved environmental impact assessment documents, and shall not be dismantled or left idle
without authorization.
According to the Catalog of Classified Management of Pollutant Discharge Permits for
Stationary Pollution Sources (2019) (๕રϮ஢̙ʱᗳ၍ଣΤ፽(2019و))
promulgated by the Ministry of Ecology and Environment came into effect on December 20,
2019, key management, simplified management and registration management of pollutant
discharge permits are implemented based on factors such as the amount of pollutants generated,
the amount of pollutants discharged and the degree of impact on the environment. The pollutant
discharging entity subject to registration management does not need to apply for the pollutant
discharge permit, but shall fill in the pollutant discharge registration form on the national
pollutant discharge permit management information platform.
According to the Guidelines for the Registration of Pollutant Discharge for Stationary
Pollution Sources (Trial Implementation) (یܸ(༊Б)) issued by
the Ministry of Ecology and Environment and came into effect on January 6, 2020, enterprises
that do not need to apply for a pollutant discharge permit in accordance with the law shall carry
out pollutant discharge registration in accordance with the relevant provisions.
LA WS AND REGULATIONS RELATING TO FIRE SECURITY
According to the Fire Prevention Law of the PRC (), or the
Fire Prevention Law, promulgated by the NPC on April 29, 1998 and last amended on April 29,
2021, and the Interim Provisions on Design Inspection and Acceptance of Fire Protection of
Construction Projects () promulgated by the
Ministry of Housing and Urban-Rural Development of the PRC on April 1, 2020, amended on
August 21, 2023 and took effect on October 30, 2023, the competent housing and urban-rural
development authority replaced fire prevention and rescue departments to monitor and
administer the fire protection as-built acceptance check and filing. Upon completion of
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construction of a development project which is required to apply for fire safety inspection and
acceptance as stipulated by the housing and urban-rural development authority, the developer
shall apply to the housing and urban-rural development authority for fire safety inspection and
acceptance. For other development projects, the developer shall complete filing formalities
with the housing and urban-rural development authority following the inspection and
acceptance, the housing and urban-rural development department shall conduct spot check.
Pursuant to the Fire Prevention Law, the construction project that fails to complete as-built
acceptance check on fire prevention shall be ordered by the relevant government authorities to
close and shall be fined not less than RMB30,000 but not more than RMB300,000. The
construction project that fails to complete fire safety filing shall be ordered to rectify and be
subject to a fine of up to RMB5,000.
LA WS AND REGULATIONS RELATING TO LABOR AND SOCIAL SECURITY
Labor Law and Labor Contract Law
According to the Labor Law of the PRC () taking effect on
January 1, 1995 and revised on December 29, 2018 and the Labor Contract Law of the People’s
Republic of China ()(the “Labor Contract Law”) taking effect
on January 1, 2008 and revised on December 28, 2012, the labor contract shall be signed when
the employer establishes labor relationship with the employee. Labor contracts, divided into
fixed-term labor contracts, non-fixed-term labor contracts and labor contracts which expire
upon completion of agreed assignments, shall be signed in written after negotiation and
agreement. The wage shall not be less than the local minimum wage standard. The employer
and the worker shall fully perform the obligations in accordance with the labor contract.
Pursuant to the Labor Contract Law, more stringent requirements are imposed on the use
of temporary personnel (known in China as “dispatched workers”). Dispatched workers shall
enjoy the right to equal pay for equal work as full-time employees. Employing entities are
permitted to use dispatched workers only for temporary, auxiliary, or substitute positions.
According to the Interim Provisions on Labor Dispatch () issued by the
Ministry of Human Resources and Social Security and effective from March 1, 2014, the
number of dispatched workers employed by an entity shall not exceed 10% of its total
workforce. If the violation is not rectified within the prescribed period, the employing entity
may be fined not less than RMB5,000 and not more than RMB10,000 for each dispatched
worker exceeding the 10% limit.
Social Insurance and Housing Provident Fund
Under PRC laws, rules and regulations, including the PRC Social Insurance Law ( ʕ
)(the “Social Insurance Law”) promulgated by the SCNPC in
October 2010, which became effective in July 2011 and amended in December 2018, the
Interim Measures on the Collection and Payment of Social Security Funds (ᎈ൬ᅄᖮ
ᅲБૢԷ) promulgated in January 1999 and amended in March 2019, the Regulations on
Work Injury Insurance (ᎈૢԷ) issued by PRC State Council in April 2003 and
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amended in December 2010, the Regulations on Unemployment Insurance (ᎈૢԷ)
promulgated by PRC State Council in January 1999 and the Regulations on the Administration
of Housing Accumulation Funds (၍ଣૢԷ) (or referred to the “Regulations
on Housing Fund”) released by PRC State Council in April 1999 and last amended in March
2019, employers are required to contribute, on behalf of their employees, to a number of social
security funds and implement certain employee benefit plans, including funds for basic pension
insurance, unemployment insurance, basic medical insurance, occupational injury insurance,
maternity leave insurance and housing accumulation funds. These payments are made to local
administrative authorities and any employer who fails to contribute may be fined and ordered
to pay the deficit amount. According to the PRC Social Insurance Law, an employer that fails
to make social insurance contributions may be ordered to rectify the non-compliance and pay
the required contributions within a stipulated deadline and be subject to a late fee of 0.05% per
day, as the case may be. If the employer still fails to rectify the failure to make social insurance
contributions within the deadline, it may be subject to a fine ranging from one to three times
the amount overdue. According to the Regulations on Housing Fund, an enterprise that fails to
make housing fund contributions may be ordered to rectify the noncompliance and pay the
required contributions within a stipulated deadline; otherwise, an application may be made to
a local court for compulsory enforcement.
REGULATIONS RELATING TO REAL ESTATE
According to the Land Administration Law of the PRC ()
promulgated by the SCNPC on June 25, 1986, last amended on August 26, 2019 with effect
from January 1, 2020, lands owned by the state might be transferred or allotted to construction
entities or individuals in accordance with the law.
According to the Civil Code, the creation, alteration, alienation, or extinguishment of a
real property right that is required by laws to be registered becomes effective at the time when
it is recorded in the register of immovable property. Real property ownership certificate is the
proof of a right holder’s entitlement to the real right in the immovable property.
Pursuant to the Interim Regulation on Real Property Registration ( ʔਗପ೮াᅲБૢ
Է), promulgated on November 24, 2014, last amended on March 10, 2024, and effective as
of May 1, 2024, and the Implementing Rules of the Interim Regulations on Real Estate
Registration (), promulgated on January 1, 2016, latest
amended on May 9, 2024, and effective as of May 21, 2024, the state implements a uniform
real estate registration system and the registration of real estate shall be strictly administered
and carried out in a stable and continuous manner that provides convenience for people. Real
estate registration is administered by the real estate registration authority of the local people’s
government at the county level or above.
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LA WS AND REGULATIONS RELATING TO THE LEASING OF PROPERTY
Pursuant to the Administrative Measures for the Leasing of Commodity Housing (ۜ
) issued by the Ministry of Housing and Urban-Rural Development of the
PRC (ண௅) on December 1, 2010 and taking effect on February
1, 2011, within 30 days after the execution of the housing lease contract, parties to the leasing
of housing shall handle the registration and filing procedure of the leasing of housing at the
departments in charge of construction (real estate) of the governments in the municipality
directly under the People’s Governments of centrally administered municipalities,
municipalities or counties where the leased housing is located. In the event that parties to the
leasing of housing fail to handle the registration and filing procedure of the leasing of housing,
the department in charge of construction (real estate) of the people’s government in the
municipality directly under the People’s Governments of centrally administered municipalities,
municipalities or counties shall order rectification within a time limit. If rectification is not
made by an individual within the time limit, a fine of less than RMB1,000 shall be imposed.
If rectification is not made by an entity within the time limit, a fine of more than RMB1,000
but less than RMB10,000 shall be imposed.
Furthermore, under any of the following circumstances, the properties shall not be let out:
(1) illegal buildings; (2) buildings which do not comply with mandatory project construction
standards such as safety, disaster prevention, etc.; (3) change of nature of property use which
violates the provisions; or (4) any other circumstances for which leasing is prohibited as
stipulated by laws and regulations. Persons who violate the provisions above shall be ordered
by the development (real estate) department of the People’s Governments of centrally
administered municipalities, municipalities or counties to make correction within a stipulated
period; where there is no illegal income, a fine of not more than RMB5,000 may be imposed;
where there is an illegal income, a fine ranging from one to three times the amount of illegal
income may be imposed, subject to a maximum of RMB30,000.
According to the Civil Code, the lessee may sublease the leased premises to a third party,
subject to the consent of the lessor. Where the lessee subleases the premises, the lease contract
between the lessee and the lessor remains valid. The lessor is entitled to terminate the lease
contract if the lessee subleases the premises without the consent of the lessor. In addition, if
the lessor transfers the premises, the lease contract between the lessee and the lessor will still
remain valid. Where the mortgaged property has been leased and the possession thereof has
been transferred before the creation of mortgage, the original lease relations shall not be
affected by the mortgage.
LA WS AND REGULATIONS RELATING TO ANTI-UNFAIR COMPETITION
Anti-Monopoly Law
The Anti-Monopoly Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷ˀᕹᓙ
) (the “Anti-Monopoly Law”) which was promulgated by the SCNPC on August 30, 2007
with effect from August 1, 2008, as revised on June 24, 2022 with effect from August 1, 2022,
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applies to the monopolistic practices in domestic economic activities in China as well as the
monopolistic practices outside China which have exclusion or restriction effects on domestic
market competition. The monopolistic practices under the Anti-Monopoly Law include
monopoly agreement reached by operators, abuse of market dominating position by operators
and the concentration of operators which has an effect of eliminating or restricting competition.
The anti-monopoly enforcement agencies of the State Council may, according to work
requirements, delegate relevant anti-monopoly enforcement tasks to the corresponding
agencies of the people’s governments of provinces, autonomous regions and centrally-
administered municipalities pursuant to the provisions of Anti-Monopoly Law. Operators who
violate the Anti-Monopoly Law may be ordered by the enforcement agencies to stop the illegal
act, be imposed a fine or be subject to other restrictive measures.
Anti-unfair Competition Law
According to the Anti-Unfair Competition Law of the PRC ( ʕശɛ͏΍ձ਷ˀʔ͍຅
) (the “Anti-Unfair Competition Law”) which was promulgated by the SCNPC on
September 2, 1993 and last amended on April 23, 2019, operators shall comply with the
principle of voluntariness, equality, fairness, integrity and abide by laws and business ethics in
production and business operations. Under the Anti-Unfair Competition Law, unfair
competition refers to an operator who disrupts the market competition order and damages the
legitimate rights and interests of other operators or consumers in violation of the Anti-Unfair
Competition Law in their production and business operations. Operators who violate the
Anti-Unfair Competition Law shall bear corresponding civil, administrative or criminal
responsibilities depending on the specific circumstances.
LA WS AND REGULATIONS RELATING TO FOREIGN EXCHANGE
The principal law governing foreign currency exchange in China is the Foreign Exchange
Administration Regulations of the PRC ( ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ) (the “Forex
Regulations”) which was promulgated by the State Council on January 29, 1996, effective on
April 1, 1996 and last amended on August 1, 2008. Pursuant to the Forex Regulations,
Renminbi is generally freely convertible for payments of current account items, such as trade
and service related foreign exchange transactions and dividend payments, but not freely
convertible for capital account items, such as direct investment, loan or investment in securities
outside the PRC unless prior approval of the SAFE or the competent local counterparts is
obtained.
Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration of
Overseas Listing (Hui Fa [2014] No. 54) ((ි೯
[2014]54 ໮)) issued by the SAFE and became effective on December 26, 2014, a domestic
company shall, within 15 business days from the date of the end of its overseas listing issuance,
register the overseas listing with the foreign exchange authority at the place of its
incorporation.
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According to the Circular of the SAFE on Reforming and Regulating Policies for the
Administration over Foreign Exchange Settlement of Capital Accounts (̮ි၍ଣ҅ᗫ
), the foreign exchange receipts under capital
accounts of domestic institutions are subject to discretionary foreign exchange settlement
policies. The foreign exchange receipts under capital accounts (including foreign exchange
capital, foreign debts, and repatriated funds raised through overseas listing) subject to
discretionary foreign exchange settlement as expressly prescribed in the relevant policies may
be settled with banks according to the actual need of the domestic institutions for business
operation. The discretionary exchange settlement ratio of foreign exchange receipts under the
capital account of domestic entities is tentatively set as 100%. The SAFE may adjust the above
proportion in due time based on international balance of payments. While voluntary settlement
of foreign exchange receipts under the capital account is implemented, domestic institutions
may still opt to use their foreign exchange income in accordance with the payment-based
settlement system. A bank shall, in handling each transaction of foreign exchange settlement
for a domestic institution according to the principle of payment-based settlement, review the
authenticity and compliance of the use of the funds settled in the previous foreign exchange
settlement (including discretionary settlement and payment-based settlement) of such domestic
institution. Domestic institutions’ foreign exchange receipts under the capital account and the
Renminbi funds obtained from the settlement thereof shall not, directly or indirectly, be used
for expenditure beyond the enterprise’s business scope or expenditure prohibited by laws and
regulations of the state. Unless otherwise specified, the funds shall not, directly or indirectly,
be used for investments in securities or other investments or wealth management other than
banks’ principal-secured products. The funds shall not be used for the granting of loans to
non-affiliated enterprises, except where it is expressly permitted in the business scope. The
funds shall not be used for the construction and purchase of residential real estate for purposes
other than self-use (except for real estate enterprises).
According to the Circular on Optimizing Administration of Foreign Exchange to Support
the Development of Foreign-related Business by the SAFE (Ꮄʷ̮ි၍
) issued by the SAFE on April 10, 2020, eligible enterprises are
allowed to make domestic payments by using receipts under their capital accounts, such as
their capital funds, foreign credits and the income from overseas listing, with no need to
provide the evidentiary materials concerning authenticity on a transaction-by-transaction basis
to banks in advance, provided that their capital use shall be authentic and in line with
provisions, and conform to the prevailing administrative regulations on the use of receipts
under capital accounts. Local foreign exchange authorities shall strengthen monitoring analysis
and in-process and post regulation.
LA WS AND REGULATIONS RELATING TO TAXATION
Income tax
According to the Enterprise Income Tax Law of the PRC (੻೼
), which was promulgated by the SCNPC on March 16, 2007 with effect from January 1,
2008 and last amended on December 29, 2018, and the Regulations on the Implementation of
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the Enterprise Income Tax Law of the PRC (ૢԷ),
which was promulgated by the State Council on December 6, 2007 with effect from January
1, 2008 and amended on December 6, 2024, all domestic enterprises in China (including
foreign-invested enterprises) shall be subject to enterprise income tax (EIT) at the uniform tax
rate of 25%, except for the high-tech enterprises provided by the State, which will be subject
to enterprise income tax at the reduced rate of 15%, or the qualified small low-profit
enterprises, which will enjoy the reduced EIT rate of 20%.
Enterprises that are recognized as high-tech enterprises in accordance with the
Administrative Measures on Accreditation of High-tech Enterprises (၍ଣ
) are entitled to enjoy the preferential EIT rate of 15%. The validity period of the
high-tech enterprise qualification shall be three years from the date of issuance of the
certificate of high-tech enterprise.
According to the Announcement on EIT Policies for Promoting High-quality
Development of Integrated Circuit Industry and Software Industry (ආණϓཥ༩ପุ
ʮѓ), which was promulgated by the Ministry of
Finance of the PRC (௅) (the “MOF”), the SA T, the NDRC and the MIIT
on December 11, 2020 and came into effect on January 1, 2021, the qualified integrated circuit
design, equipment, materials, packaging, testing and software enterprises enjoy the EIT
exemption for the first two years starting from the first profit-making year of the enterprise,
and a half-rate reduction of the EIT of 25% from the third to the fifth year (that is 12.5%). Key
integrated circuit design enterprises and software enterprises encouraged by the State, starting
from the first profit-making year of the enterprise, enjoy the EIT exemption for the first five
years, and are subject to a reduced EIT rate of 10% in subsequent years.
According to the Circular of the Ministry of Finance and the State Administration of
Taxation on Implementing the Inclusive Tax Deduction and Exemption Policies for Micro and
Small Enterprises (ஷ
), during the period from January 1, 2019 to December 31, 2021, the annual taxable
income of small low-profit enterprises that is not more than RMB1 million shall be included
in its taxable income at the reduced rate of 25% with the applicable EIT rate of 20%. According
to the Announcement on Implementation of Preferential Income Tax Policies for Micro and
Small Enterprises and Individually-owned Businesses (੻
ʮѓ) and the Announcement of the State Taxation Administration on
Matters Concerning the Implementation of Preferential Income Tax Policies
Supporting the Development of Small Low-Profit Enterprises and Individually-owned
Businesses (ഄϞ
ʮѓ), during the period from January 1, 2021 to December 31, 2022, the annual
taxable income of a small low-profit enterprise that is not more than RMB1 million shall be
included in its taxable income at the reduced rate of 12.5%, with the applicable EIT rate of
20%. According to the Announcement of the MOF and the SA T on the Preferential Income Tax
Policies for Micro and Small Enterprises and Individually-owned Businesses (࢕
ʮѓ) and the Announcement of the
MOF and the SA T on the Relevant Tax and Fee Policies for Further Supporting the
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Development of Micro and Small Enterprises and Individually-owned Businesses (௅e
ʮѓ), during the
period from January 1, 2023 to December 31, 2027, the portion of annual taxable income of
a small low-profit enterprise not exceeding RMB1 million shall be included in its taxable
income at the reduced rate of 25%, with the applicable EIT rate of 20%.
Value-added tax (“V AT”)
The Provisional Regulations on V A T of the PRC (೼ᅲБૢԷ),
which was promulgated on December 13, 1993 with effect from January 1, 1994 and last
amended on November 19, 2017, and the Detailed Rules for Implementing the Provisional
Regulations on V A T of the PRC (), which was
promulgated on December 25, 1993 with effect from the same date and last amended on
October 28, 2011 with effect from November 1, 2011, set out that entities and individuals
engaging in sale of goods or processing, repair and assembly services (the “labor services”),
sale of services, intangible assets, real properties and importation of goods in the PRC shall be
taxpayers of V A T, and shall pay V A T pursuant to these regulations. The tax rate for taxpayers
engaging in sale of goods, labor services, lease of tangible movables or importation of goods
shall be 17%, unless otherwise stipulated. The tax rate for taxpayers engaging in the sale of
transport services, postal services, basic telecommunications services, construction services, or
real property leasing services, the sale of real properties, the transfer of land use rights, the sale
or importation of certain goods shall be 11%. The tax rate for taxpayers engaging in the sale
of services and intangible assets shall be 6%, unless otherwise stipulated. The tax rate for
taxpayers engaging in exportation of goods shall be zero, unless otherwise stipulated by the
State Council. According to the Notice of the MOF and the SA T on Adjusting V A T Rates ( ৌ
) issued on April 4, 2018 and effective on
May 1, 2018, the rates of 17% and 11% applicable to the taxpayers who engage in V A T taxable
sales activities or importation of goods are adjusted to 16% and 10%, respectively. According
to the Announcement on Relevant Policies for Deepening V A T Reform (೼ҷ
ʮѓ) issued by the MOF, the SA T and the General Administration of Customs
of the PRC ( ʕശɛ͏΍ձ਷ऎᗫᐼ໇) on March 20, 2019 with effect from April 1, 2019, the
V A T rates are adjusted to 13% and 9%, respectively.
In addition, according to the Announcement on Clarifying the V alue-Added Tax
Exemption Policy for Small-Scale Taxpayers (݁
ʮѓ) promulgated by the MOF and the SA T on March 31, 2021, from April 1, 2021 to
December 31, 2022, small-scale V A T taxpayers with monthly sales of less than RMB150,000
(inclusive) are exempted from V A T. Pursuant to the Announcement of the Ministry of Finance
and the State Taxation Administration on Exempting Small-Scale V A T Taxpayers from V A T
(ʮѓ), from April 1, 2022 to
December 31, 2022, a small-scale V A T taxpayer’s taxable sales income to which the V A T rate
of 3% applies shall be exempted from V A T, and the V A T on its items subject to prepayment of
V A T at the rate of 3% shall be suspended. Pursuant to the Announcement of the Ministry of
Finance and the State Taxation Administration on Clarifying the Policy of Reducing and
Exempting V alue-added Tax for Small-scale V A T Taxpayers (ᆽᄣ
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ʮѓ) and the Announcement of the Ministry of
Finance and the State Taxation Administration on the Policy of Reducing and Exempting
V alue-added Tax for Small-scale V A T Taxpayers (೼ʃ஝ᅼॶ೼
ʮѓ), from January 1, 2023 to December 31, 2027, small-scale V A T
payers with monthly revenue below RMB100,000 (inclusive) shall be exempted from V A T; a
small-scale V A T taxpayer’s taxable sales income to which the V A T rate of 3% applies shall be
subject to V A T at the reduced rate of 1%; and the V A T on its items subject to prepayment of
V A T at the rate of 3% shall be prepaid at the reduced rate of 1%.
REGULATION RELATING TO IMPORTATION AND EXPORTATION OF GOODS
According to the Foreign Trade Law of the PRC ()
promulgated by the SCNPC on May 12, 1994 and last amended on December 30, 2022, the
competent department for foreign trade under the State Council is in charge of foreign trade
throughout the country. This department shall work with other relevant departments under the
State Council to formulate, adjust and issue a catalogue of goods and technologies that are
restricted or prohibited from import and export. The competent department for foreign trade
under the State Council, or together with other relevant departments under the State Council,
may, with the approval of the State Council, make temporary decisions to restrict or prohibit
the import and export of specific goods and technologies not included in the aforesaid
catalogue to the extent permitted by laws.
According to the Notice on Matters Concerning the Recordation of the Consignees and
Consignors of Imported and Exported Goods (ஷ
) issued by the General Administration of Customs of the PRC on January 3, 2023 and
came into force on the same day, and the Provisions on the Recordation of Customs Declaration
Entities of the PRC () promulgated on
November 19, 2021 and came into force on January 1, 2022, starting from January 3, 2023,
where a consignee or consignor of imported or exported goods or a customs declaration
enterprise applies for filing, it shall obtain the qualification of market entities but is not
required to obtain the filing with the foreign trade operator.
LA WS AND REGULATIONS RELATING TO FOREIGN INVESTMENT
The PRC Company Law
The Company Law of the PRC (“Company Law” or “PRC Company Law”) was
promulgated by the SCNPC on December 29, 1993, came into effect on July 1, 1994, revised
on December 25, 1999, August 28, 2004, October 27, 2005, December 28, 2013, and December
29, 2023, respectively, and the latest revision of which was implemented on July 1, 2024.
Under the PRC Company Law, companies are generally classified into limited liability
companies and joint stock limited companies. The PRC Company Law also applies to
foreign-invested enterprises.
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Foreign Investment Law
The Foreign Investment Law of the PRC () (the “Foreign
Investment Law”) promulgated by the NPC came into effect on January 1, 2020. Since then,
the Law of the PRC on Sino-Foreign Equity Joint V entures ( ʕശɛ͏΍ձ਷ʕ̮Υ༟຾ᐄ
) and the Law of the PRC on Wholly Foreign-Owned Enterprise ( ʕശɛ͏΍ձ਷
) and the Law of the PRC on Sino-Foreign Cooperative Joint V entures ( ʕശ
) had been abolished, and the Foreign Investment Law has
become the basic law regulating foreign-invested enterprises which are wholly or partially
invested by foreign investors. The organization form, institutional framework and standard of
conduct of foreign-invested enterprises shall also be subject to the provisions of the PRC
Company Law and other laws. The PRC government will implement the management system
of pre-entry national treatment and the Negative List for foreign investment and has abolished
the original approval and filing administration system for the establishment and change of
foreign-invested enterprises. Pre-entry national treatment refers to the treatment accorded to
foreign investors and their investments at the stage of investment entry which is no less
favorable than the treatment accorded to domestic investors and their investments. Negative
List refers to a special administrative measure for the entry of foreign investment in specific
sectors as imposed by the PRC. The PRC accords national treatment to foreign investment
outside of the Negative List. The current Negative List is the Special Management Measures
(Negative List) for the Access of Foreign Investment (2024) (݄(ࠋ
૶ఊ) (2024و)) (the “Negative List”) issued by the NDRC and the Ministry of
Commerce of the PRC ( ʕശɛ͏΍ձ਷ਠਕ௅) (the “MOFCOM”) on September 6, 2024 with
effect from November 1, 2024. The Negative List lists the special management measures for
foreign investment access for the regulated industries, such as equity requirements and senior
management requirements. Our business did not fall under the Negative List.
While strengthening investment promotion and protection, the Foreign Investment Law
further regulates foreign investment management and proposes the establishment of a foreign
investment information reporting system that replaces the original foreign investment
enterprise approval and filing system of the MOFCOM. The foreign investment information
reporting is subject to the Foreign Investment Information Reporting Method (ࢹڦ
), which is jointly developed and implemented by the MOFCOM and the SAMR on
January 1, 2020. According to the Foreign Investment Information Reporting Method, foreign
investors who directly or indirectly carry out investment activities in China shall submit
investment information to the competent commercial department through the enterprise
registration system and the National Enterprise Credit Information Publicity System (Ά
ʮͪӻ୕); the reporting methods include initial reports, change reports,
cancellation reports, and annual reports.
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LA WS AND REGULATIONS RELATING TO INFORMATION SECURITY AND DATA
PROTECTION
On November 7, 2016, the SCNPC promulgated the Cybersecurity Law of the PRC ( ʕ
) (the “Cybersecurity Law”), which came into effect on June 1,
2017. The Cybersecurity Law requires the network operators to fulfill certain functions related
to network security protection and to strengthen the management of network information.
On April 13, 2020, thirteen PRC governmental and regulatory authorities, including the
Cyberspace Administration of China, promulgated the Measures for Cybersecurity Review
(), which was last amended on December 18, 2021, and came into effect
on February 15, 2022. The Measures for Cybersecurity Review specifies that, the
Cybersecurity Review Office may initiate a cybersecurity review if any network products and
services, data processing activities or overseas listing of companies affect or may affect
national security.
On September 24, 2024, the State Council promulgated the Regulations on Network Data
Security Management ( ၣഖᅰኽτΌ၍ଣૢԷ), which came into effect on January 1,
2025. This regulation clarifies the general provisions on network data security management,
and also further supplements and refines the specific requirements on personal information
protection, important data security management, cross-border security management of network
data, and obligations of network platform.The Regulations on Network Data Security
Management applies to network data handling activities and the supervision and administration
of security thereof carried out within the territory of the People’s Republic of China. As our
operation does not involve network data handling activities, the Regulations on Network Data
Security Management would not have material adverse impacts on our operational and
financial performance.
LA WS AND REGULATIONS RELATING TO OVERSEAS INVESTMENT
Pursuant to the Measures for the Administration of Overseas Investment ( ྤ̮ҳ༟၍
) which was issued by the MOFCOM on September 6, 2014 with effect from October
16, 2014, the MOFCOM and the commerce departments at provincial levels shall conduct
filing or confirmation management depending on different circumstances of overseas
investments of enterprises. Overseas investments of enterprises involving any sensitive country
or region, or any sensitive industry shall be subject to confirmation management. Overseas
investments of enterprises under other circumstances shall be subject to filing management.
Pursuant to the Measures for the Administration of Overseas Investment of Enterprises
() which was issued by the NDRC on December 26, 2017 and
became effective on March 1, 2018, an enterprise in the territory of the PRC (the “Investor”)
carrying out overseas investments shall undergo formalities including the examination or filing
for an overseas investment project (the “Project(s)”), report the relevant information, and
cooperate in supervisory inspection. Sensitive projects conducted by Investors directly or
through overseas enterprises controlled by them shall be subject to confirmation management.
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Non-sensitive projects conducted by Investors directly, namely, non-sensitive projects
involving Investors’ direct contribution of assets, equity or provision of financing or
guarantees, shall be subject to filing management. The aforementioned sensitive projects
include projects involving a sensitive country or region or a sensitive industry. The Catalogue
of Sensitive Sectors for Outbound Investment (2018) ( ྤ̮ҳ༟ઽชБุͦ፽(2018و))
promulgated by the NDRC became effective on March 1, 2018, which listed out the sensitive
industries in detail.
According to the Circular on Promulgating the Administrative Provisions on Foreign
Exchange of the Outbound Direct Investments of Domestic Institutions (೯бྤʫዚ࿴
) promulgated by the SAFE on July 13, 2009 with effect
from August 1, 2009 and the Circular on Issues Relating to Further Simplifying the Direct
Investment-related Foreign Exchange Administration (ટҳ༟̮ි၍ଣϞ
) promulgated by the SAFE on February 13, 2015 with effect from June 1,
2015, which was partially repealed on December 30, 2019, Chinese enterprise that has been
permitted to make outbound investments shall go through foreign exchange registration
procedures for outbound direct investments at local banks where such enterprise was
incorporated.
The Company had incorporated several overseas subsidiaries, and such investments are
subject to regulations on overseas investment of PRC.
LA WS AND REGULATIONS RELATING TO OVERSEAS LISTINGS
On July 6, 2021, certain PRC regulatory authorities issued the Opinions on Strictly
Cracking Down on Illegal Securities Activities in Accordance with the Law (੽ᘌ
จԈ), which further emphasized to strengthen cross-border regulatory
cooperation, to improve relevant laws and regulations on data security, cross-border data
transmission, and confidential information management, and provided that efforts will be made
to revise the regulations on strengthening the confidentiality and archives management related
to overseas securities offerings and listings, to implement the primary responsibility on
information security of companies listed in overseas market, and to strengthen the standardized
management of cross-border information provision mechanisms and procedures.
On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas
Securities Offering and Listing by Domestic Companies ( ྤʫΆุྤ̮೯БᗇՎձɪ̹၍ଣ
) (the “Trial Measures”) and five supporting guidelines, which came in to effect on
March 31, 2023. Pursuant to the Trial Measures, PRC domestic enterprises that directly or
indirectly offer or list their securities in an overseas market, which include (1) any PRC
enterprise limited by shares; and (2) any offshore enterprise that conducts its business
operations primarily in China and contemplates to offer or list its securities in an overseas
market based on its onshore equities, assets or similar interests, are required to file with the
CSRC within three working days after its application for overseas listing is submitted.
Subsequent securities offerings of an issuer on the same overseas market where it has
previously offered and listed securities shall be filed with the CSRC within three working days
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after the offering is completed. Subsequent securities issuances and listings conducted by the
issuer in other overseas markets shall be filed as initial public offering. Failure to complete the
filing under the Trial Measures may subject a PRC domestic enterprise to rectification ordered
by the CSRC, warning, and fine of RMB1 million to RMB10 million.
Moreover, upon the occurrence of any of the material events specified below after an
issuer has offered and listed securities in an overseas market, the issuer shall submit a report
thereof to CSRC within three working days after the occurrence and public disclosure of the
event: (i) change of control; (ii) investigations or sanctions imposed by overseas securities
regulatory agencies or other relevant competent authorities; (iii) change of listing status or
transfer of listing segment; (iv) voluntary or mandatory delisting. Where an issuer’s main
business undergoes material changes after overseas offering and listing, and is therefore
beyond the scope of business stated in the filing documents, such issuer shall submit to the
CSRC an ad hoc report and a relevant legal opinion issued by a domestic law firm within three
working days after occurrence of the changes.
According to the Trial Measures, the PRC domestic companies that seek to offer and list
securities in overseas markets, either in direct or indirect means, are required to fulfill the
filing procedure with the CSRC and report relevant information. The Trial Measures provides
that an overseas listing or offering is explicitly prohibited, if any of the following applies: (i)
such securities offering or listing is explicitly prohibited by provisions in PRC laws,
administrative regulations or relevant state rules; (ii) an overseas offering or listing may
endanger national security as reviewed and determined by competent authorities under the
State Council in accordance with laws; (iii) the domestic company intending to be listed or
offer securities in overseas markets, or its controlling shareholder(s) and the actual controller,
have committed crimes such as corruption, bribery, embezzlement, misappropriation of
property or undermining the order of the socialist market economy during the latest three years;
(iv) the domestic company intending to be listed or offer securities in overseas markets is
currently under investigations for suspicion of criminal offenses or major violations of laws
and regulations, 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(s) or
by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual
controller.
On February 24, 2023, the CSRC and other relevant government authorities promulgated
the Provisions on Strengthening the Confidentiality and Archives Administration of Overseas
Securities Issuance and Listing by Domestic Enterprises (̋੶ྤʫΆุྤ̮೯БᗇՎձ
) (the “Provisions on Confidentiality”), which became
effective on March 31, 2023. Pursuant to the Provisions on Confidentiality, where a domestic
enterprise provides or publicly discloses to the relevant securities companies, securities service
institutions, overseas regulatory authorities and other entities and individuals, or provides or
publicly discloses through its overseas listing subjects, documents and materials involving
state secrets and working secrets of state organs, it shall report the same 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. Domestic
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enterprises providing accounting archives or copies thereof to entities and individuals
concerned such as securities companies, securities service institutions and overseas regulatory
authorities shall perform the corresponding procedures pursuant to the relevant provisions of
the State. The working papers formed within the territory of the PRC by the securities
companies and securities service institutions that provide corresponding services for the
overseas issuance and listing of domestic enterprises shall be kept within the territory of the
PRC, and those that need to leave the PRC shall go through the examination and approval
formalities in accordance with the relevant provisions of the State.
LA WS AND REGULATIONS OF GERMANY
Below is an overview of the laws and regulations materially relevant to our business in
Germany.
PRODUCT SAFETY AND OCCUPATIONAL HEALTH & SAFETY
In addition to civil and liability law obligations, compliance with extensive public-law
requirements in connection with the manufacturing, integration, and placing on the market of
technical products must be ensured. These requirements derive primarily from product safety
(Produktsicherung ) and occupational health & safety ( Arbeitssicherung ) legislation. Their
purpose is to protect end users, employees, and the general public from the technical hazards
associated with industrial machinery and systems — in particular welding equipment, robotics,
and automation systems.
Product Safety
The central legal framework is the German Product Safety Act ( Produktsicherheitsgesetz
— ProdSG ). Under this law, manufacturers, importers, and distributors may only place
products on the German market that do not endanger safety or health when used as intended
or in a reasonably foreseeable way. A conformity assessment is required and typically
culminates in affixing the CE marking and preparing technical documentation, which must
include a risk assessment, operating and maintenance instructions, as well as safety and
disposal guidance. Where safety-relevant defects are identified, recall and information duties
toward market surveillance authorities and end users arise.
In the case of machinery, the ProdSG is supplemented by the 9th Ordinance to the ProdSG
(Machinery Regulation), implementing the provisions of the EU Machinery Directive. Among
other things, it requires compliance with essential safety and health protection requirements in
design, control, and operation; a risk assessment in accordance with DIN EN ISO 12100; the
implementation of functional safety measures (e.g., emergency stop devices, light barriers);
and the provision of German-language operating instructions. Beginning in 2027, the
Machinery Directive will be replaced by the EU Machinery Regulation (Regulation (EU)
2023/1230), which will introduce broader obligations — especially in software, cyber security,
and AI functionality.
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Compliance with these requirements is mandatory, whether delivering individual
components or fully integrated plant solutions.
Occupational Health & Safety
In addition to product safety, employer duties under occupational health & safety laws
(Arbeitsschutz ) must be observed, specifically the German Occupational Health & Safety Act
(Arbeitsschutzgesetz — ArbSchG ) and related ordinances. Employers must assess all work
equipment and processes for potential hazards, implement appropriate technical,
organizational, or personal protective measures, document these measures, and provide regular
employee training sessions.
Particular care must be taken when using welding equipment, robotics, and automated
systems. Employers must evaluate risks linked to mechanical hazards, thermal exposure,
electrical dangers, and the radiation effects of arc welding. Hence, the safety-conscious design
of products and the clear and complete provision of user information is essential from an
occupational safety standpoint.
PRODUCT LIABILITY ACT
Product liability law ( Produkthaftungsgesetz ) becomes relevant in particular where
defective products cause damage. The German Product Liability Act ( Produkthaftungsgesetz —
ProdHaftG ) applies where a defective product results in damage to life, body, health, or private
property of a consumer. The Act primarily concerns manufacturers, distributors, and importers
of movable goods, even where such goods are incorporated into other products — for example,
a control unit within a welding system. The German Product Liability Act is based on the EU
Product Liability Directive (85/374/EEC) and establishes a strict (no-fault) liability regime.
This means that liability arises irrespective of any individual fault or negligence on the part of
the manufacturer.
According to Section 1 para. (1) ProdHaftG, a manufacturer is liable if, as a result of a
product defect, a person is killed or injured, or an object of private property is damaged,
provided the damage exceeds EUR500. The decisive factor is solely that a defective product
has been placed on the market; misconduct or negligence on the part of the manufacturer is not
required.
Pursuant to Section 3 ProdHaftG, a product is considered defective if it does not provide
the safety that one is entitled to expect, taking all circumstances into account. The law
distinguishes between different types of defects:
 A design defect ( Konstruktionsfehler ) exists when the product is dangerous due to
its design;
 A manufacturing defect ( Fabrikationsfehler ) arises when the product deviates from
its intended specification during the manufacturing process;
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 An instruction defect ( Instruktionsfehler ) occurs when necessary safety instructions
are missing or insufficient — for example, in the case of a welding device that lacks
adequate warnings regarding overheating and, as a result, causes a fire. In such
cases, product liability may arise even if the materials and manufacturing process
were flawless.
Pursuant to Section 1 para. (2) ProdHaftG, the manufacturer may only be exonerated from
liability under narrowly defined conditions. Such exculpation is possible if:
 the defect could not have been detected according to the state of scientific and
technical knowledge at the time the product was placed on the market (so-called
development risk),
 the product was not placed on the market by the company, or
 the defect was due to mandatory legal provisions.
With respect to limitation periods, Section 12 ProdHaftG provides for a standard
limitation period of three years from knowledge of the damage and the liable party, and an
absolute limitation period of ten years from the date the product was first placed on the market.
According to Section 10 ProdHaftG, the maximum liability is capped at EUR85 million per
incident.
Overall, the Product Liability Act represents a significant legal risk for manufacturers and
providers of technical products, as it ensures comprehensive consumer protection and imposes
liability regardless of fault.
PROVISIONS OF THE GERMAN CIVIL CODE (BGB) AND RELATED
REGULATIONS
Provisions on the Sale of Goods (Kaufrecht) (Sections 433 et seq. BGB) and on Contracts
for Work and Services (Werkvertragsrecht) (Sections 631 et seq. BGB)
In addition to the special statutory provisions, the general contractual obligations under
the German Civil Code ( Bürgerliches Gesetzbuch — BGB ) apply in commercial transactions.
These provisions are regularly relevant in the context of the supply of technical products and
the performance of related services.
In particular, the law of sales of goods ( Kaufrecht ) (Sections 433 et seq . BGB) and the
law on contracts for work and services ( Werkvertragsrecht ) (Sections 631 et seq . BGB) are
applicable. These provisions establish primary and secondary contractual obligations and
provide the purchaser or client with specific legal remedies in the event of a breach of contract.
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The law of sales of goods ( Kaufrecht ) becomes (in particular) relevant whenever a
product — such as a welding unit, a robotic component, or a complete control system — is sold
to a customer. In such cases, Section 433 para. (1) BGB obliges the seller to deliver the product
free of material and legal defects and to transfer ownership to the buyer. The decisive provision
for assessing whether a defect ( Mangel ) exists is Section 434 BGB, under which a product is
deemed defective if it lacks the agreed quality, is unfit for the presumed or usual use, or does
not exhibit the quality normally expected in items of the same kind. If such a material or legal
defect is present, the buyer is entitled under Section 437 BGB to a range of legal remedies,
including subsequent performance ( Nacherfüllung ) (repair or replacement) ( Nachbesserung
oder Ersatzlieferung ), withdrawal from the contract ( Rücktritt vom Vertrag ), reduction of the
purchase price ( Minderung ), or — subject to additional conditions — damages
(Schadenersatz ).
In business-to-business transactions (B2B), warranty rights may generally be modified or
excluded — for instance, through general terms and conditions or individually negotiated
contractual clauses. However, any exclusion of liability in the case of fraudulent concealment
of a defect ( arglistigem Verschweigen ) remains invalid pursuant to Section 444 BGB.
In addition to the law of sales of goods ( Kaufrecht ), the law of contracts for work and
services ( Werkvertragsrecht ) typically applies to project-related services — for example, the
integration of automation solutions, the commissioning of production lines, or the
customization of control systems. Pursuant to Section 631 BGB, the contractor is obliged to
produce a specific result (e.g. a fully functioning and operational production facility). The
delivered work must be free from material and legal defects in accordance with Section 633
BGB. In the event of defects, the customer is entitled to remedies pursuant to Sections 634 et
seq. BGB, including supplementary performance ( Nacherfüllung ), self-remedy with
reimbursement of expenses (Selbstvornahme mit Aufwendungsersatz) , contract rescission
(Rücktritt vom Vertrag ) or price reduction (Minderung) , as well as damages (Schadenersatz) ,
provided the statutory conditions are met.
In practice, many technical delivery agreements are of a hybrid nature. The legal
qualification of such contracts as sales, service, or mixed-purpose contracts depends on the
focus of the contractual obligations. If, in addition to the delivery of key components,
implementation, installation, and commissioning are also owed, such contracts are typically
regarded as combined sales and service contracts, to which both the sales law and the law
governing contracts for work and services apply.
The aforementioned BGB provisions therefore form the contractual foundation for civil
liability in cases of defective delivery or inadequate performance of services and supplement
— in part overlapping — the strict liability under the Product Liability Act ( ProdHaftG ).
In this context, it should be noted that the principle of freedom of contract ( Prinzip der
Vertragsfreiheit — Privatautonomie) constitutes a fundamental element of private autonomy in
Germany. This includes, in particular, the freedom to enter into or refuse contracts at one’s
discretion (freedom to contract) as well as the ability to freely determine the content of a
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contract (freedom of content), provided that such arrangements do not contravene statutory
prohibitions, mandatory legal provisions, or public policy ( guten Sitten ). Limitations arise in
particular from mandatory consumer protection laws, competition law, and the statutory control
of standard terms and conditions ( Allgemeine Geschäftsbedingungen ) (Sections 305 et seq .
BGB). In B2B transactions, contractual freedom ( Gestaltungsfreiheit ) is generally interpreted
more broadly, allowing contractual modifications or exclusions of liability, scope of services,
or warranty rights, unless these violate statutory prohibitions ( gesetzliche Verbote ) or the rules
on fraudulent concealment ( arglistiges Verhalten ) (Section 444 BGB).
Transport and Freight Regulations
In addition to the aforementioned civil and public law requirements, it should also be
noted that transport-related provisions under freight and forwarding law may be applicable —
particularly in connection with the domestic and cross-border delivery of machinery, systems,
or components. In this regard, the relevant legal basis is found in Sections 407 et seq .o ft h e
German Commercial Code ( Handelsgesetzbuch — HGB ) concerning contracts of carriage
(Frachtvertrag ) and Sections 453 et seq. HGB concerning forwarding contracts
(Speditionsvertrag ). These provisions apply where a company acts either as the consignor or
carrier itself, or is contractually involved in the organization of transport services.
Freight law governs, in particular, the duties and liabilities of the carrier with respect to
the proper execution of the transport, including liability for any loss or damage to the goods.
In the case of forwarding agents, additional provisions apply, such as those concerning the duty
of due selection and documentation obligations. Where goods are transported across borders,
applicable international conventions must also be considered, including, for example, the CMR
Convention for road freight and the Montreal Convention for air freight.
In addition, freight law is especially relevant when complex installations are transported,
assembled, or delivered to customer sites for commissioning as part of supply agreements.
Freight law considerations may also arise in the context of returns or repairs of machinery,
particularly in cases involving defect rectification or warranty claims. In such scenarios, it is
essential to determine who bears the transport risk, which delivery terms (e.g. Incoterms) have
been agreed upon, and whether there is an obligation for the supplier or the customer to procure
transport insurance. In these cases, familiarity with and adherence to the applicable freight law
provisions is as critical as their proper contractual integration into the underlying delivery
relationships.
EXPORT CONTROL
In addition to the aforementioned civil and public law requirements, it must also be noted
that certain products — particularly those with potential military applications — are subject to
special foreign trade law licensing requirements.
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The export of so-called dual-use goods (i.e. products that can be used for both civilian and
military purposes), military equipment, and items subject to embargo or sanctions regimes is
subject to specific control procedures.
The export control procedure essentially comprises several sequential steps. First, the
exporting company must assess whether the item to be exported is subject to export control.
This involves a classification of the item based on the relevant control lists as well as an
examination of whether the destination country is subject to embargo restrictions or whether
the recipient is listed on a national or European sanctions list.
If this assessment results in a licensing requirement, the exporter is generally required to
obtain what is known as an end-use certificate ( Endverbleibserklärung — EVE) from the
foreign recipient. In this certificate, the recipient confirms, among other things, that the item
will be used solely for the declared purpose, will not be transferred to third parties, and will
not be re-exported to a sanctioned country.
Following this, the exporter must apply for an export license from the Federal Office for
Economic Affairs and Export Control ( Bundesamt für Wirtschaft und Ausfuhrkontrolle —
BAF A). BAFA is the competent German authority for export control matters and operates under
the Federal Ministry for Economic Affairs and Climate Action. It assesses export applications
based on foreign, security, and economic policy considerations and issues export licenses if all
legal requirements are met.
The export license application must be accompanied by a technical description of the
goods, the relevant commercial documents, and the end-use certificate. BAFA may review the
application independently or in cooperation with other authorities such as the Federal Foreign
Office, the Federal Ministry of Defence, or the intelligence services. Depending on the
outcome of the review, the license may be granted (potentially with conditions) or denied,
particularly in the case of security concerns or violations of embargo regulations.
Irrespective of the licensing requirement, any export with a value exceeding EUR1,000
must also be registered electronically via the A TLAS customs system. The export license
number issued by BAFA must be indicated. Before the actual export takes place, a final
inspection is carried out by the customs authorities. If no valid license is available, the export
may be prohibited. Furthermore, administrative sanctions, fines, or criminal penalties may be
imposed in accordance with Sections 17 et seq. of the German Foreign Trade and Payments Act
(Außenwirtschaftsgesetz — AWG ).
In addition to complying with the above regulations, companies are obliged to implement
suitable internal measures to ensure compliance with export control requirements. These
measures include, in particular, the implementation of an effective Internal Compliance
Program, regular screening of business partners against relevant sanctions lists, and complete
documentation of all export-relevant transactions.
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LA WS AND REGULATIONS OF UK
The following is an overview of key regulatory areas that may be applicable to our
business, reflecting current legislation in England and Wales (including retained EU law).
ENVIRONMENTAL REGULATIONS
Our manufacturing operations may be subject to UK environmental laws aimed at
protecting land, air, and water. Under the Environmental Protection Act 1990 and related
regulations, the Company has legal responsibility to manage and dispose of waste safely,
ensuring that any hazardous waste from its processes causes no harm or damage to people or
the environment. This duty includes properly handling chemicals, electronic waste, and
industrial by-products.
The Environmental Permitting (England and Wales) Regulations 2016 establish a
consolidated system requiring certain industrial activities with potential pollution risks to
obtain environmental permits. We may be required to comply with any permitting requirements
applicable to its facilities — for example, controlling emissions, discharge of effluents, or safe
storage of hazardous materials — and adhere to permit conditions designed to prevent
environmental harm.
As a producer of electrical equipment, we are also regulated under the UK’s Waste
Electrical and Electronic Equipment (WEEE) Regulations 2013, which promote the safe
recycling of electronics. Companies producing electrical equipment must register each year as
a producer of electrical and electronic equipment (EEE).
FREIGHT AND TRANSPORTATION
Under UK law, transport and forwarding arrangements are governed by common law
principles and specific statutes rather than a unified code. Contracts of carriage for goods are
subject to general contract law and mode-specific legislation such as the Carriage of Goods by
Road Act 1965 (incorporating the CMR Convention for international road freight). These
provisions apply whenever the company acts as a consignor or a carrier of its products, or
otherwise organises transport services through third parties (as a forwarding agent).
Freight regulations dictate the key duties and liabilities of carriers, chiefly the obligation
to safely deliver goods and the carrier’s liability for any loss or damage in transit (subject to
contractual or statutory liability limits). In the case of freight forwarders, additional obligations
include a duty of due care in selecting carriers and fulfilling documentation requirements for
shipments. For cross-border deliveries, the applicable international conventions (such as CMR
for road transport and Montreal for air cargo) take precedence.
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PRODUCT LIABILITY AND CONSUMER PROTECTION
Product liability in the UK is governed by general tort and contract common law
principles as well as statute. Our products are subject to the Consumer Protection Act 1987
(CPA), which implemented the EU Product Liability Directive.
In addition, statute also regulates contracts related to the supply of goods and services.
The Sale of Goods Act 1979 (SGA 1979) governs contracts for the sale of goods and applies
to both business-to-business and business-to-consumer transactions, though many consumer-
facing provisions have since been superseded by the Consumer Rights Act 2015, which (along
with its associated regulations) sets out a comprehensive regime governing business-to-
consumer transactions.
MANUFACTURING AND PRODUCT SAFETY STANDARDS
Our products may be required to comply with a range of industry-specific product safety
regulations and standards before they can be sold in the UK. Notably, the design and
manufacture of industrial controllers may fall under the scope of the Supply of Machinery
(Safety) Regulations 2008. These regulations require that machinery and related products
(including safety components and partly completed machinery) meet essential health and safety
requirements (EHSRs) and are safe by design. We undertake conformity assessments to ensure
that products satisfy all relevant EHSRs, which cover risks such as mechanical hazards,
electrical safety, and ergonomic design.
The Electrical Equipment (Safety) Regulations 2016 (the UK implementation of the
European Union’s Low V oltage Directive) impose obligations if our products operate within
certain voltage ranges. These regulations ensure that electrical products are properly insulated,
constructed to good engineering practice, and safe for users. Similarly, the Electromagnetic
Compatibility Regulations 2016 require that electronic controllers do not emit excessive
electromagnetic interference and are immune to disturbance, so they do not disrupt other
equipment and function reliably in their intended environment.
EMPLOYMENT AND LABOR LA WS
We are an employer in the UK and must observe the full spectrum of employment and
labour laws that protect employees’ rights and govern the employment relationship. The
foundational statute is the Employment Rights Act 1996. The law stipulates minimum notice
periods for termination, rights to statutory redundancy pay if applicable, and protections
against unfair dismissal.
The National Minimum Wage Act 1998 requires us to pay employees at least the statutory
minimum wage rate appropriate to their age and status. In addition, employers are responsible
for enrolling eligible workers in a pension scheme under the automatic enrollment rules of the
Pensions Act 2008 and for adhering to laws on statutory sick pay and family leave pay.
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The Equality Act 2010 protects employees and job applicants from discrimination on the
basis of specific protected characteristics, which include sex, race, age, disability, religion or
belief, sexual orientation, marital status, pregnancy/maternity, and gender reassignment. This
means our decisions on hiring, pay, promotions, training, and terminations must not unlawfully
discriminate (whether directly or indirectly), harass, or victimise individuals.
HEALTH AND SAFETY OBLIGATIONS
We have a legal duty to maintain a safe and healthy work environment for its employees
and any other persons who may be affected by its operations (such as contractors or visitors).
The cornerstone of UK occupational safety law is the Health and Safety at Work etc. Act 1974
(HSW A), which requires employers to ensure the health and safety of all employees and anyone
affected by their work, so far as is reasonably practicable. In practical terms, this general duty
means business management must take all reasonably practicable steps to identify workplace
hazards and mitigate risks to prevent accidents and injuries. This includes providing safe
systems of work, proper plant and equipment that is well-maintained, training workers in safe
operating procedures, and supervising work activities. Employees, in turn, are required by the
HSW A to co-operate with safety measures and to take reasonable care for their own health and
safety and that of others.
To supplement the broad duties of the HSW A, various more specific regulations set out
detailed health and safety obligations. One key regulation is the Management of Health and
Safety at Work Regulations 1999, which requires employers to perform suitable and sufficient
risk assessments of their workplace hazards and to implement preventive measures.
SANCTIONS AND TRADE CONTROLS
UK sanctions are in force under the Sanctions and Anti-Money Laundering Act 2018,
which is implemented through regulations setting out the specific measures under each UK
sanctions regime. UK sanctions measures have also been extended by the UK on a
regime-by-regime basis to apply to and in the UK Overseas Territories (without requiring
enactment of any further legislation by them), including the Cayman Islands as of January 1,
2021.
Exporters are additionally subject to the UK’s export control laws. The UK controls the
export (and in some cases, domestic transfer or brokering) of certain sensitive goods,
technology, and software for reasons of national security and international compliance. The
Export Control Order 2008, along with retained EU dual-use regulations, form the backbone
of UK export controls. Certain products that we sell or manufacture may be classified as
‘dual-use’ goods, and therefore would be subject to UK export control laws. Dual use goods
would require an export licence from the UK’s Export Control Joint Unit (ECJU) before
shipping such items outside the UK. Export licenses can be individual (for specific shipments)
or open/general licences covering certain destinations. The UK implements import restrictions
and customs duties on certain goods (for example, anti-dumping duties or prohibitions on
goods from specific regions under sanctions).
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LA WS AND REGULATIONS OF POLAND
Below is an overview of the laws and regulations materially relevant to our business in
Poland.
PURCHASE LA W
Purchase law provisions are relevant to the procurement of raw materials, components,
and equipment, as well as to the sale of finished products. The legal framework for the sale of
goods in Poland is primarily governed by the Polish Civil Code ( Kodeks cywilny , hereinafter
also referred to as the “Civil Code”), specifically in Articles 535 to 602, which regulate the
general provisions on sales contracts ( umowa sprzedaz ˙y). Under the provisions of the Civil
Code, the seller is liable for ensuring that the item is free from physical and legal defects at
the time of delivery.
Physical defects (wady fizyczne) occur when goods lack agreed or standard properties, are
incomplete, or fail to meet legal requirements; legal defects (wady prawne) arise when goods
are owned or encumbered by third parties. If the item is defective, the buyer has the right to
exercise statutory warranty claims ( re˛kojmia za wady) pursuant to Articles 556 et seq. of the
Civil Code. These rights include demanding repair, replacement, price reduction, or, in serious
cases, withdrawal from the contract. In B2B contracts, these statutory warranty rights may be
limited or excluded by mutual agreement. In consumer sales, such limitations are prohibited
under Polish and EU consumer protection law. In addition to the statutory warranty, sellers or
manufacturers may also offer voluntary guarantees.
PRODUCT LIABILITY AND PRODUCT SAFETY
Product liability and product safety provisions define the manufacturer’s responsibility to
ensure products are safe, defect-free, and compliant with legal standards. Manufacturers
operating in Poland are subject to a dual regulatory framework that governs both the safety of
products placed on the market and the civil liability for damage caused by defective products.
Product Liability
The liability of producers and suppliers for damage caused by defective products is
regulated pursuant to Articles 449
1 to 449 11 of the Polish Civil Code ( Kodeks cywilny ). A
producer (including a manufacturer of finished goods, components, or raw materials) is strictly
liable for damage caused by a product defect, regardless of fault or negligence (strict liability,
Article 449
1 § 1 of the Civil Code). Damages covered include personal injury and property
damage, provided that the damaged property is normally intended for private use. Liability also
extends to importers and distributors if the actual producer cannot be identified, or if the
product was imported from outside the EU and no EU-based manufacturer assumes
responsibility.
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General Product Safety
The general product safety framework in Poland is primarily governed by Act of 12
December 2003 on General Product Safety ( ustawa z dnia 12 grudnia 2003 r. o ogólnym
bezpieczen´stwie produktów ). Under this framework, producers are obligated to ensure that only
safe products are introduced to the market. A product is considered safe if, under normal or
reasonably foreseeable conditions of use, it does not pose a risk to health or safety.
Furthermore, producers must provide clear instructions for assembly, installation, and use.
They are also responsible for conducting risk assessments and safety testing, as well as
implementing traceability and recall systems where appropriate.
CE Marking and Sector-Specific Safety Regulations
Industrial products are also subject to sector-specific EU harmonization rules, particularly
the Machinery Directive 2006/42/EC, transposed into Polish law under the Ordinance of the
Minister of Economy of 21 October 2008 on Essential Requirements for Machinery
(rozporza¸dzenie Ministra Gospodarki z dnia 21 paz ´dziernika 2008 r. w sprawie zasadniczych
wymagan´ dla maszyn ).
These laws require that: (i) machinery must meet essential health and safety requirements
before being placed on the EU market, (ii) products shall bear the CE marking to demonstrate
conformity with applicable directives, and (iii) manufacturers must draw up and retain a
Declaration of Conformity and technical documentation for inspection by authorities.
Failure to comply with CE marking obligations, safety requirements, or market
surveillance rules may lead to administrative penalties (e.g. withdrawal orders or fines), civil
liability under the Polish Civil Code, criminal sanctions in serious cases of negligence
endangering health or life.
ENVIRONMENTAL LA W
Environmental law provisions define the manufacturer’s responsibility to conduct
operations in compliance with regulations on resource use, emissions, and waste management.
The legal framework for environmental protection in Poland is primarily governed by the Act
of 27 April 2001 – Environmental Protection Law ( ustawa z dnia 27 kwietnia 2001 r. – Prawo
ochrony s´rodowiska ), hereinafter referred to as the “Environmental Protection Law”. Under
Article 6 of the Environmental Protection Law, all businesses conducting activities that may
affect the environment are subject to the principle of precaution and prevention. Operators are
required to undertake necessary measures to prevent environmental damage and limit
emissions to air, water, and soil. Environmental protection must also be ensured through
sustainable resource use and reduction of pollution at source.
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Industrial facilities may require specific environmental permits, depending on the type
and scale of the activity. Facilities that emit noise or generate vibrations must comply with
applicable limits set pursuant to Articles 112–117 of the Environmental Protection Law.
Operators are also obligated to conduct environmental impact assessments (EIA) for certain
projects under the Act on Providing Information on the Environment and Environmental
Protection of 3 October 2008.
In the event of environmental damage, operators may be subject to civil liability for
environmental harm, as regulated by Articles 323–325 of the Environmental Protection Law.
In cases of severe negligence or intentional conduct, criminal sanctions may also apply under
the Criminal Code or special environmental legislation.
Hazardous and industrial waste is regulated under the Waste Act of 14 December 2012
(ustawa z dnia 14 grudnia 2012 r. o odpadach ), which imposes obligations on classification,
labelling, safe transport, and documentation of waste. Waste producers must maintain records
and submit periodic reports via the BDO system pursuant to Articles 66–92 of the Act.
LABOUR AND EMPLOYMENT LA W
Labour and employment law provisions define the employer’s obligations regarding
working conditions, employee rights, and compliance with workplace regulations. Employment
relationships in Poland are governed primarily by the Polish Labour Code ( Kodeks pracy,
hereinafter referred to as the “Labour Code”), which serves as the principal legal act regulating
individual and collective labour rights, working conditions, and employer obligations.
Employment Contracts and Types
Under Article 25 of the Labour Code, employment relationships shall be based on an
employment contract, concluded in writing, and specifying key terms such as position,
remuneration, working time, and location. Any work arrangement meeting the criteria of
subordination, regular remuneration, and personal execution shall be treated as an employment
contract, regardless of title.
Working Time and Rest
The standard working time is 8 hours per day and 40 hours per week, within a 5-day work
week (Article 129 of the Labour Code). V arious working time systems (e.g. shift work,
equivalent schedules) are permitted under certain conditions. Employees are entitled to daily
(11 hours) and weekly (35 hours) rest, paid annual leave (20 or 26 days), public holidays, sick
and parental leave.
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Termination and Severance
Termination of an employment contract must follow statutory rules. For indefinite-term
contracts, notice periods range from 2 weeks to 3 months, depending on length of service
(Article 36 of the Labour Code). Termination shall be justified and provided in writing.
Employees may be entitled to severance pay under the Act of 13 March 2003 on the
Specific Principles for Terminating Employment Relationships with Employees for Reasons
not Related to the Employees Concerned ( ustawa z dnia 13 marca 2003 r. o szczególnych
zasadach rozwia ¸zywania z pracownikami stosunków pracy z przyczyn niedotycza ¸cych
pracowników ) or internal policies. Dismissals of protected groups (e.g. pregnant women, trade
union members) are restricted or prohibited.
Remuneration and Social Insurance
Employers must pay at least the annually set statutory minimum wage and register
employees with Social Insurance Institution ( Zakład Ubezpieczen´ Społecznyc h, commonly
known as ZUS).
Workplace Regulations and Policies
Employers with more than 50 employees must adopt internal work regulations ( regulamin
pracy ) and remuneration regulations ( regulamin wynagradzania ) setting forth company-
specific rules regarding working time, wages, discipline, and other employment conditions.
Employee Representation
Employees may be represented by trade unions, works councils, or employee
representatives, depending on the size and structure of the enterprise. Employers must consult
employee representatives in certain matters, such as group layoffs, working time systems, or
collective redundancies.
OCCUPATIONAL HEALTH AND SAFETY
Occupational health and safety provisions set out the employer’s obligations to ensure
safe, hygienic, and compliant working conditions, protecting employees from workplace
hazards and risks. Occupational health and safety (OHS) in Poland is primarily governed by the
Labour Code ( Kodeks pracy ) and executive regulations issued by the Council of Ministers and
relevant ministries.
Workplaces and equipment must comply with minimum safety standards set out in the
Ordinance of the Minister of Labour and Social Policy of 26 September 1997 on General
Health and Safety Rules ( rozporza¸dzenie Ministra Pracy i Polityki Socjalnej z dnia 26 wrzes ´nia
1997 r. w sprawie ogólnych przepisów bezpieczen ´stwa i higieny pracy ). This regulation defines
requirements related to lighting, ventilation, noise levels, temperature, ergonomics, fire
protection, and the safe use of machines and tools.
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Employees shall be trained in health and safety before commencing work and periodically
thereafter, depending on the type of work and occupational exposure. Medical examinations
must confirm fitness for duty, especially in positions involving physical, technical, or
hazardous work. If a workplace accident or suspected occupational disease occurs, the
employer must immediately investigate the circumstances and prepare formal documentation,
including an accident report. Workers injured in the course of employment are entitled to
compensation, rehabilitation, and sick leave under social insurance law.
Non-compliance with OHS obligations may result in civil liability for damages and, in
severe or wilfully negligent cases, criminal liability pursuant to Articles 220 and 221 of the
Polish Criminal Code ( Kodeks karny ), which penalize the exposure of workers to danger or
failure to meet health and safety obligations.
SPECIAL ECONOMIC ZONES AND THE POLISH INVESTMENT ZONE
As the production facility in Poland is located in a Special Economic Zone ( Specjalna
Strefa Ekonomiczna , hereinafter “SEZ”), the rules on the Polish Investment Zone ( Polska
Strefa Inwestycji , PSI) are directly relevant to investment incentives, tax exemptions, and
compliance requirements.
SEZs were originally established as designated areas offering preferential conditions for
business activity. Since the entry into force of the Act of 10 May 2018 on Supporting New
Investments ( ustawa z dnia 10 maja 2018 r. o wspieraniu nowych inwestycji ), the PSI has
replaced the SEZ system, extending similar incentives across entire country. Although the term
“SEZ” is still commonly used, new support decisions are now issued exclusively under the PSI
regime.
Principles of the PSI Regime
Under the PSI regime, regional state aid is granted in compliance with EU law, primarily
in the form of CIT/PIT exemptions for eligible new investments (e.g. new facilities,
expansions, diversification). Aid intensity ranges from 10% to 50% of eligible costs, depending
on location and company size, and support is provided for 10–15 years.
Decision on Support
To benefit from support under the Polish Investment Zone scheme, the investor must
obtain a decision on support ( decyzja o wsparciu ) issued by the minister competent for the
economy. The decision is defining eligible activities, maximum aid, deadlines, and compliance
criteria.
Monitoring and Compliance
Beneficiaries are monitored by SEZ administrators and tax authorities and must maintain
the investment and jobs for the retention period (commonly 3–5 years). Failure to comply with
conditions may result in revocation or limitation of aid, including repayment of benefits
received.
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OVERVIEW
Our history can be traced back to March 1993 when one of our former subsidiary Nanjing
Estun Industrial Automation Co., Ltd. (ʮ̡) was established. Our
Company was founded on February 26, 2002 by Mr. Wu and was converted into a joint stock
company with limited liability from a limited liability company in July 2011. We are a leading
industrial robotics company in China.
Since March 2015, our A Shares have been listed on the Shenzhen Stock Exchange (stock
code: 002747.SZ). As of the Latest Practicable Date, our total issued share capital was
RMB871,018,453, comprising 871,018,453 A Shares, of which approximately 42.15% was
controlled by Mr. Wu, Ms. Liu Fang (ٹMr. Wu Kan ( юԹ) and Nanjing Primest, being
our Controlling Shareholders Group.
KEY CORPORATE AND BUSINESS DEVELOPMENT MILESTONES
The following is a summary of our Group’s key corporate and business development
milestones:
Y ear Event
2001 /H1118/H1118/H1118/H1118/H1118/H1118We launched our first servo drive system, laying the foundation for indigenous
motion-control technology.
2002 /H1118/H1118/H1118/H1118/H1118/H1118Our company was established.
2010 /H1118/H1118/H1118/H1118/H1118/H1118We introduced our first industrial robot model.
2011 /H1118/H1118/H1118/H1118/H1118/H1118We converted into a joint stock company with limited liability.
2015 /H1118/H1118/H1118/H1118/H1118/H1118Our Company’s A Shares were listed on the Shenzhen Stock Exchange (stock
code: 002747.SZ).
2017 /H1118/H1118/H1118/H1118/H1118/H1118We expanded into the high-end motion control industry with the acquisition of
Trio Motion, a manufacturer based in the U.K specializing in motion
controllers.
2018 /H1118/H1118/H1118/H1118/H1118/H1118We commenced operations of our Nanjing robotic industrial park, featuring
China’s first intelligent production line in which robots build robots.
2020 /H1118/H1118/H1118/H1118/H1118/H1118We expanded into the global premium arc-welding sector with the acquisition
of Cloos, a Germany-based company specializing in welding robotics with an
established international presence.
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Y ear Event
2021 /H1118/H1118/H1118/H1118/H1118/H1118Our annual shipment volume of industrial robots exceeded 10,000 units for the
first time.
2024 /H1118/H1118/H1118/H1118/H1118/H1118We had ranked first among domestic manufacturers in China’s industrial
robotic solutions market for years, in terms of industrial robot shipment
volume, according to Frost & Sullivan.
2025 /H1118/H1118/H1118/H1118/H1118/H1118We completed the construction of our manufacturing base in Poland,
accelerating our advancement toward global leadership in the industrial robotic
solutions market.
MAJOR SUBSIDIARIES
As of the Latest Practicable Date, the following entities were our major subsidiaries
(6)
which had made a material contribution to our results of operation during the Track Record
Period:
Name of subsidiary
Place of
incorporation
Date of
Incorporation
Equity interest
attributable to
our Group
Principal business
activities
Carl Cloos /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Germany June 30, 1977 100% (2) Manufacturing and sales of
machinery, electrical
appliances, equipment,
and related consumable
materials and spare parts
Shanghai Prex Mfg. Co.,
Ltd. ( ɪऎ౷ഺд౶Іਗ
ʮ̡) /H1118/H1118/H1118/H1118
PRC August 12, 2002 100% Design, manufacturing, and
sales of peripheral
automation equipment for
the casting machines
Estun Intelligent /H1118/H1118/H1118/H1118/H1118/H1118PRC February 2, 2007 100% Design of intelligent system
engineering
Cloos Welding /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC October 26,
2009
100%
(2) Manufacturing and sales of
welding machines and
related products
Estun Robot /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC September 5,
2011
100% Manufacturing of robots
and industrial robot
turnkey systems related
products
Trio Motion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118United Kingdom September 28,
1987
100%
(3) Design of automation
control equipment
Estun Software /H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC November 27,
2013
100% Development and sale of
software
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Name of subsidiary
Place of
incorporation
Date of
Incorporation
Equity interest
attributable to
our Group
Principal business
activities
Estun Guangdong Robotics
Co., Ltd. (౶཭(؇)ዚ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC June 29, 2018 100% Sales and manufacturing of
industrial robots
Carl Cloos (China) /H1118/H1118/H1118/H1118/H1118PRC June 10, 2020 100% Import and export of goods
Nanjing Cloos Robotics
Intelligent Technology
Co., Ltd. (ԯдኁ౶ዚ
ʮ̡) /H1118
PRC December 24,
2020
100% Development and sale of
artificial intelligence
application software
Estun Intelligent (Jiangsu) /H1118PRC July 19, 2022 53.73%
(1) Sales and manufacturing of
industrial automation
control system devices
M.A.i GmbH & Co.KG /H1118/H1118/H1118Germany October 4, 1999 100%
(4) Provision of automated
assembly and testing
production lines based on
robotic applications
Cloos Kaynak Teknik
Sanayi Limited Sirteki /H1118/H1118
Turkey March 31, 2009 100%
(5) Production, marketing, and
trade of machinery,
mechanisms and tools,
and services primarily in
the area of welding
techniques
Note:
(1) For the information of the minority shareholders, see notes under “— Our Shareholding and Corporate
Structure.”
(2) Carl Cloos was established on June 30, 1977. Since 1919, the Cloos group has driven innovation in mechanical
technology, pioneering advancements from manual welding equipment to robotic automation systems within
welding technology and automation. On April 27, 2020, Cloos Holdings GmbH (a wholly-owned subsidiary
of the Company), acquired Carl Cloos GmbH, together with its subsidiaries including Cloos Welding.
(3) Trio Motion was established on September 28, 1987 and acquired by Dynacon Industrial Limited, a
wholly-owned subsidiary of the Company, on March 23, 2017.
(4) M.A.i GmbH & Co.KG was established on October 4, 1999 and acquired by the Company on October 17, 2017.
(5) Cloos Kaynak Teknik Sanayi Limited Sirteki was established on March 31, 2009 and acquired by Carl Cloos,
a wholly-owned subsidiary of the Company, on April 27, 2020.
(6) Y angzhou Shuguang Optoelectronics Automation Co., Ltd. (ப΂ʮ̡), being one of
our major subsidiaries during the Track Record Period, had been deconsolidated on June 25, 2025. For details,
see “— Major Share Capital Changes and Development of our Company” in this section.
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MAJOR SHARE CAPITAL CHANGES AND DEVELOPMENT OF OUR COMPANY
Early Development of our Company
In February 2002, our Company was founded by Mr. Wu, focusing on research and
development of electromechanical products.
Upon the completion of several rounds of share transfers and capital injections, on May
20, 2011, the registered share capital of our Company reached US$12,350,000, with Nanjing
Primest, Estun Holdings Co., Ltd. (ʮ̡)( “ Estun Holdings ”) and Estun
Investment Co., Ltd. (ʮ̡)( “ Estun Investment ”) holding 55%, 25% and
20% of the equity interests in our Company, respectively.
Conversion into Joint Stock Company with Limited Liability
In July 2011, our Company was converted from a limited liability company to a joint
stock company with limited liability, with Nanjing Primest, Estun Holdings and Estun
Investment, being our promoters.
Listing on the Shenzhen Stock Exchange
In March 2015, our A Shares were listed on the Shenzhen Stock Exchange (stock code:
002747.SZ).
We offered a total of 30,000,000 A Shares under the A-Shares listing, representing
approximately 25% of our enlarged share capital immediately following the completion of the
A-Shares listing. Upon completion of the A-Shares listing, Mr. Wu directly and indirectly
controlled approximately 75% of our Company’s then share capital.
Bonus issues in 2016 and 2017
In 2016 and 2017, the Company completed the following bonus issues to the then existing
Shareholders by way of conversion of capital reserve:
Completion Date Bonus ratio
May 24, 2016 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 new A shares for every 10 existing A shares
June 7, 2017 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 new A shares for every 10 existing A shares
Non-Public Issuance of A Shares in 2016 and 2021
In 2016 and 2021, the Company completed the following non-public issuance of A shares:
Completion Date Number of A Shares issues Number of Investors
September 8, 2016 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,736,135 A Shares Six investors
July 7, 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,392,857 A Shares Seven investors
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To the best knowledge of our Directors, the investors to the aforementioned non-public
issuance of A Shares were Independent Third Parties.
Repurchase of Shares Relating to Employee Incentive Schemes
Other than the major shareholding changes in the Company as disclosed, the Company
also from time to time repurchased A Shares for the employee incentive purposes.
Disposal of Y angzhou Shuguang Optoelectronics Automation Co., Ltd. ( ౮ψᏣΈΈཥІછ
ப΂ʮ̡) (“Y angzhou Shuguang”)
On June 23, 2025, Nanjing Dingkong Electromechanical Technology Co., Ltd. (ԯཻછ
ʮ̡)( “ Nanjing Dingkong ”) (one of our subsidiaries) entered into a share
transfer agreement with Shuguang Lanfengqi (Nanjing) Technology Limited Partnership ( ᏣΈ
઼(ԯ)ҦΥྫΆุ(Υྫ)( “ Shuguang Lanfengqi ”), pursuant to which Nanjing
Dingkong agreed to transfer its 20% equity interest in Y angzhou Shuguang to Shuguang
Lanfengqi at a consideration of RMB94 million. The relevant consideration was determined
with reference to a valuation report issued by an independent valuer and will be settled by two
installments. The first installment in the amount of RMB47.94 million was settled on June 25,
2025 (the “ First Installment ”) and the second installment representing the remaining balance
will be settled on or before May 31, 2026 or such other date as may be mutually agreed in
writing by the parties.
Shuguang Lanfengqi is a limited partnership registered on June 11, 2025, with Mr. Jiang
Xingke (߅as its general partner and several management personnel of Y angzhou
Shuguang as limited partners, who are all Independent Third Parties. Pursuant to the share
transfer agreement, the transfer is completed upon the settlement of the First Installment.
Therefore, upon completion of the transfer on June 25, 2025, Y angzhou Shuguang was ceased
to be consolidated into our Group’s consolidated financial statements.
Further, on October 20, 2025, Nanjing Dingkong and Shuguang Lanfengqi entered into a
share transfer agreement, pursuant to which Nanjing Dingkong and Shuguang Lanfengqi
agreed to transfer 48% and 14% equity interest in Y angzhou Shuguang to Wuxi Xinhongye
Wire & Cable Technology Co., Ltd. (ʮ̡)( “ Wuxi
Xinhongye ”), respectively, at a consideration of RMB244.8 million and RMB71.4 million,
respectively. The relevant considerations were determined with reference to a valuation report
issued by an independent valuer and will be settled by four installments. As of the Latest
Practicable Date, the first and second installments were settled. Pursuant to the share transfer
agreement, the transfer is completed upon the settlement of the first installment. Further, the
industrial and commercial registration change of the share transfer was completed on
November 4, 2025.
Wuxi Xinhongye is a limited liability company established on February 2004 and all its
shareholders are Independent Third Parties. Upon completion of the aforementioned proposed
share transfers, Nanjing Dingkong will no longer be interested in any equity interest of
Y angzhou Shuguang.
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Y angzhou Shuguang is primarily engaged in the research and production of specialized
automated equipment for laser instruments, mechanical microelectronic control systems and
optoelectronic instruments. However, (i) in order to continuously optimize the Group’s
resource allocation and industrial layout on its core businesses and targeted markets, (ii) the
fact that the targeted market of Y angzhou Shuguang differs significantly from the core
businesses of the Company and therefore resulting in weak operational synergy, and (iii) to
further incentivize the sustainable independent development of Y angzhou Shuguang, the Group
decided to cease to engage in the specialized automated equipment sector and to dispose
Y angzhou Shuguang. Furthermore, revenue and profitability of Y angzhou Shuguang in 2024
fell short of forecast due to weaker demand from its downstream sectors, particularly the
construction machinery and heavy industry segments. Y angzhou Shuguang primarily produces
core automation components and motion control systems, which are ultimately applied in
motors, transformers and drive-control systems within these industries. In 2024, customers in
these sectors tightened their capital expenditure budgets and implemented more stringent
project approval and procurement processes, reflecting broader market and business
environment considerations. This led to longer decision-making cycles, delays in product
delivery, and a reduction in order intake. This underperformance resulted in the recognition of
an impairment loss on goodwill of RMB57.7 million. For detailed analysis of the impairment
test, see “Financial Information — Discussion of Certain Key Items from Our Consolidated
Statements of Financial Position — Goodwill — Impairment Tests for Goodwill.” As advised
by our PRC Legal Advisor, our Directors confirmed that, during the Track Record Period and
up to the Latest Practicable Date, the company had no material compliance violations and was
not involved in any material legal proceedings.
Before the disposal of Y angzhou Shuguang on June 25, 2025, Y angzhou Shuguang
contributed (i) less than 3.0% of the total revenue of the Group, (ii) less than 5.0% of the total
gross profit of the Group, for each year ended December 31, 2022, 2023, 2024, respectively.
Further, Y angzhou Shuguang contributed less than 20.0% of the profit attributable to equity
shareholders of the Group for the years ended December 31, 2022 and 2023.
MAJOR ACQUISITIONS, DISPOSALS AND MERGERS
We did not carry out any major acquisitions, disposals or mergers during the Track Record
Period and up to the Latest Practicable Date.
EMPLOYEE INCENTIVE SCHEMES
Since our A Share listing, we adopted several employee share incentive plans to attract
and retain talents and to motivate our employees. Under these share incentive plans, a total of
6,727,400 restricted A Shares awards were granted, of which 2,361,880 were vested and
remained restricted. As of the Latest Practicable Date, no outstanding restricted A Shares
remained to be granted or vested under these share incentive plans.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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In June 2025, the Shareholders adopted the 2025 Share Option Scheme and the 2025
Restricted Share Scheme pursuant to which the Company can grant up to 7,500,000 A Shares,
which comprise 3,500,000 A Shares options and 4,000,000 restricted A Shares awards, to our
employees.
Under the 2025 Share Option Scheme and the 2025 Restricted Share Scheme, the options
and share awards have a vesting period of at least 12 months since the date of grant. As of the
Latest Practicable Date, (i) 128 employees have been granted options under the 2025 Share
Option Scheme in respect of an aggregate 3,320,000 A Shares and (ii) 140 employees have
been granted share awards under the 2025 Restricted Share Scheme in respect of an aggregate
of 4,000,000 A shares. As of the Latest Practicable Date, all the outstanding options under the
2025 Share Option Scheme have been granted. No further options will be granted under the
2025 Share Option Scheme between the Latest Practicable Date and the Listing Date, and any
time thereafter.
For details of the 2025 Share Option Scheme and the 2025 Restricted Share Scheme, see
the section headed “Further Information about Our Directors and Substantial Shareholders —
4. Employee Incentive Scheme” in Appendix VI to this prospectus.
OUR CONTROLLING SHAREHOLDERS GROUP
As of the Latest Practicable Date, the Controlling Shareholders Group was able to
exercise approximately 42.15% voting rights in our Company. For details regarding the
Controlling Shareholders, see “— Relationship with our Controlling Shareholders Group.”
OUR LISTING ON THE SHENZHEN STOCK EXCHANGE AND REASONS FOR THE
PROPOSED LISTING ON THE HONG KONG STOCK EXCHANGE
Since 2015, our Company has been listed on the Shenzhen Stock Exchange. As of the
Latest Practicable Date, our Directors confirmed that during the Track Record Period and up
to the Latest Practicable Date, we had no instances of material non-compliance with the rules
of the Shenzhen Stock Exchange and other applicable securities laws and regulations of the
PRC in any material respects, and, to the best knowledge of our Directors having made all
reasonable enquiries, there was no material matter that should be brought to the investors’
attention in relation to our compliance record on the Shenzhen Stock Exchange. Our PRC Legal
Advisor is of the view that the confirmation of our Directors above with regard to our
compliance records is accurate and reasonable. Based on the independent due diligence
conducted by the Sole Sponsor, nothing has come to the Sole Sponsor’s attention that would
cause them to disagree with our Directors’ confirmation with regard to the compliance records
of the Company on the Shenzhen Stock Exchange.
Our Company seeks to be listed on the Hong Kong Stock Exchange in order to provide
further capital for the development and expansion of our business, provide an additional
fundraising platform for our Company should the need arise, further strengthen our business
profile and market position in the industry, and better attract overseas investors and talents. See
“Business — Our Strategies” and “Future Plans and Use of Proceeds” for more details.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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PUBLIC FLOA T AND FREE FLOA T
Satisfaction of the Public Float Requirement
Rule 8.08(1) (as amended and replaced by Rule 19A.13A) of the Listing Rules provides
that, where a new applicant is a PRC issuer with other listed shares at the time of listing, this
will normally mean that the portion of H shares for which listing is sought that are held by the
public, at the time of listing, must (a) represent at least 10% of the issuer’s total number of
issued shares in the class to which H shares belong (excluding treasury shares); or (b) have an
expected market value of not less than HK$3,000,000,000.
Our A Shares are listed on the Shenzhen Stock Exchange. The total number of the H
Shares to be issued pursuant to the Global Offering represents approximately 10.00% of the
total issued share capital of our Company (before any exercise of the Over-allotment Option
and options granted under the 2025 Share Option Scheme). To the best knowledge of the
Company, since all H Shares will be counted towards the public float for the purpose of Rule
8.08(1) of the Listing Rules upon completion of the Global Offering, the Company will satisfy
the public float requirement under Rule 8.08(1) (as amended and replaced by Rule 19A.13A)
of the Listing Rules.
Satisfaction of the Free Float Requirement
Rule 8.08A (as amended and replaced by Rule 19A.13C) of the Listing Rules provides
that, where a new applicant is a PRC issuer with other listed shares at the time of listing, this
will normally mean that the portion of H shares for which listing is sought that are held by the
public and not subject to any disposal restrictions (whether under contract, the Listing Rules,
applicable laws or otherwise), at the time of listing, must: (a) represent at least 5% of the total
number of issued shares in the class to which H shares belong at the time of listing (excluding
treasury shares), with an expected market value at the time of listing of not less than
HK$50,000,000; or (b) have an expected market value at the time of listing of not less than
HK$600,000,000.
To the best knowledge of the Company, the Company will satisfy the free float
requirement under Rule 8.08A (as amended and replaced by Rule 19A.13C) of the Listing
Rules.
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OUR SHAREHOLDING AND CORPORATE STRUCTURE
The following chart depicts our simplified corporate and shareholding structure immediately prior to the Global Offering:
Mr. Wu(1) Mr. Wu(1) Mr. Wu Kan(1)
Nanjing Primest(1)
Our Company
96.89% 3.00% 0.11%
0.15%29.26%12.74%
Ms. Liu Fang(1) Mr. Wu Kan(1)
57.85%
Other A
Shareholders
Estun
Intelligent
(Jiangsu)(2)
53.73%
Shanghai
Prex Mfg.
Co., Ltd.
95%(3)
5%(3)
Estun
Robot
100%
Trio
Motion
100%
Estun
Software
100%
Estun
Guangdong
Robotics
Co., Ltd.(2)
100%
M.A.i
GmbH &
Co.KG
100%
Carl
Cloos
100%
Other
subsidiaries(4)
Estun
Intelligent
100%100% 100%
Cloos
Welding
Carl Cloos
(China)
Nanjing
Cloos
Robotics
Intelligent
Technology
Co., Ltd.
100%100%
Cloos
Kaynak
Teknik
Sanayi
Limited
Sirteki
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Notes:
(1) Our Controlling Shareholders Group.
(2) As of the Latest Practicable Date, the remaining 46.27% interest in Estun Intelligent (Jiangsu) is held by General Technology High-End Equipment Industrial Equity Investment
(Tongxiang) Partnership Enterprise (Limited Partnership) (ᛆҳ༟(ඊ)ΥྫΆุ(Υྫ)), National Manufacturing Transformation and Upgrading
Fund Co., Ltd. (ʮ̡), China State-owned Enterprise Mixed-ownership Reform Fund Co., Ltd. (ʮ̡)
and Dong Chunyu (ڠ݆all are Independent Third Party, as to 21.62%, 19.46%, 3.78%, and 1.41%, respectively.
(3) As of the Latest Practicable Date, Shanghai Prex Mfg. Co., Ltd. is held 95% directly by Estun Intelligent (Jiangsu) and 5% indirectly by Estun Robot s through Nanjing Prex
Collaborative Enterprise Management Partnership (Limited Partnership) (ԯ౷ഺд౶՘ΝΆุ၍ଣΥྫΆุ(Υྫ), an employee incentive holding platform.
(4) Other subsidiaries include (i) onshore and offshore and (ii) wholly-owned and non-wholly owned subsidiaries of our Company.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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The following chart depicts our simplified corporate and shareholding structure immediately following the completion of the Global Offering
(assuming the Over-allotment Option is not exercised and options granted under the 2025 Share Option Scheme are not exercised):
Our Company
0.13%26.34%11.47% 52.06% 10.00%
Mr. Wu(1) Mr. Wu(1) Mr. Wu Kan(1)
Nanjing Primest(1)
96.89% 3.00% 0.11%
Ms. Liu Fang(1) Mr. Wu Kan(1)
Other A
Shareholders
H
Shareholders
Estun
Intelligent
(Jiangsu)(2)
53.73%
Estun
Robot
100%
Trio
Motion
100%
Estun
Software
100%
Estun
Guangdong
Robotics
Co., Ltd.(2)
100%
Carl Cloos
(China)
Nanjing
Cloos
Robotics
Intelligent
Technology
Co., Ltd.
M.A.i
GmbH &
Co.KG
100%
Other
subsidiaries(4)
Estun
Intelligent
100%
Shanghai
Prex Mfg.
Co., Ltd.
95%(3)100%100%
Carl
Cloos
100%
Cloos
Welding
Cloos
Kaynak
Teknik
Sanayi
Limited
Sirteki
100%100%
5%(3)
Notes (1) to (4): Please refer to the details on the preceding page.
(5) The calculation is based on the total number of 871,018,453 A Shares in issue as of the Latest Practicable Date and 96,780,000 H Shares (assuming the Over-allotment Option
is not exercised and options granted under the 2025 Share Option Scheme are not exercised) in issue upon Listing.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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OVERVIEW
Who We Are
We are a leading industrial robotics company in China. We had ranked first among
domestic manufacturers in China’s industrial robotic solutions market for years, in terms of
industrial robot shipment volume, according to Frost & Sullivan. According to the same source,
we achieved a historic breakthrough in the first half of 2025, with the shipment volume of
industrial robots surpassing foreign brands within the domestic market, making us the first
domestic manufacturer to rank at the top of the industrial robotic solutions market in China.
We are also among the top industrial robotics companies in terms of revenue, ranking sixth in
both the global market and China’s market in terms of revenue in 2024 among all
manufacturers, with a market share of 1.7% and 2.0%, respectively.
We are dedicated to the belief that automation benefits all: smarter manufacturing,
superior quality, better living, and a greener world. Guided by this purpose, we work to
advance innovation and sustainability, all in pursuit of our aspiration: for a better life. With our
independent R&D and in-house production capabilities of core automation components and
motion control systems, we have assisted customers in industries such as automotive, lithium
batteries, photovoltaics, electronics, metal processing, engineering machinery, packaging
logistics, and construction materials and furniture in achieving automation, digitization, and
intelligent transformation, providing comprehensive manufacturing automation solutions
covering the entire lifecycle of production for our customers.
Targeting the vast global automation market centered around industrial robots, we have
formulated a development strategy that progresses from following to surpassing. Rooted in
China, we will continue to invest in research and innovation, leveraging China’s domestic
industrial chain advantages to provide reliable, efficient, and widely applicable industrial
robots for the global market to meet our goal of becoming a world-leading robotics company.
We are actively advancing the integration of AI and robotics, steadily evolving from a Chinese
industrial robot leader toward a prominent player in intelligent robotics.
Through strategic acquisitions worldwide and proprietary core technologies, we have
established competitive advantages in industrial robotics characterized by our multi-brand
portfolio synergy, comprehensive application coverage and global market penetration. As of
September 30, 2025, we operated 75 service sites worldwide and seven manufacturing bases
across our key domestic and foreign markets. Our locally embedded teams ensure rapid
customer response, while our global footprint guarantees consistent quality assurance and cost
efficiencies. Our products and services are applied across a global customer network.
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Below are our achievements over the years:
No. 1 Nationally
for years among domestic
manufacturers in terms of
shipment volume of
industrial robots(1)
No. 1 Nationally
in the first half of 2025 among
both domestic and foreign manu-
facturers in terms of shipment
volume of industrial robots (1)
No. 1 Globally
in 2024 in terms of the shipment
volume of robots
for sheet metal bending(1)
75
service sites globally(2)
Seven
manufacturing bases globally(3)
approximately
30%
revenue contributed by non-do-
mestic market throughout
the Track Record Period(4)
700kg ultra-heavy-duty
industrial robot(5)
First-of-its-Kind
Champion Enterprise in a
Niche Manufacturing
industrial robot for
photovoltaic stringing(5)
Sector
cETLus Certification
and TÜV Rheinland CE
Functional Safety
Certificate(6)
First Chinese Robotics
Manufacturer
R&D expenditure as a
percentage of our total
revenue(7)
9%+
1,029
R&D personnel(8)
Four MIIT projects
Three MOST projects
One NDRC projects(9)
LEADING
POSITION
GLOBAL
PRESENCE OUR PRODUCTS OUR R&D
Notes:
(1) Source: Frost & Sullivan.
(2) As of September 30, 2025. See “— Our Customers — Our Customer Service and Product Returns” for details.
(3) As of September 30, 2025. See “– Manufacturing – Manufacturing Facilities” for details.
(4) Revenue contributed by overseas markets amounted to RMB1,312.2 million, RMB1,594.4 million,
RMB1,369.6 million, RMB1,139.3 million and RMB1,117.7 million in 2022, 2023, 2024 and the first nine
months of 2024 and 2025, respectively, accounting for 33.8%, 34.3%, 34.2%, 33.8% and 29.4% of our total
revenue for the same periods. For the purposes of this prospectus only, overseas markets include regions other
than the Chinese Mainland.
(5) Our 700kg ultra-heavy-duty industrial robot is included in the Catalog of Nationally Recognized First-of-its-
Kind Innovative Products (̨(ࢁ)ኬͦ፽(2024وwhile our industrial robot for
photovoltaic stringing has earned us the recognition of Champion Enterprise in a Niche Manufacturing Sector
(Άุ). Both recognitions were awarded by the Ministry of Industry and Information
Technology of the PRC (ʷ௅) (the “ MIIT ”).
(6) The cETLus certification indicates compliance with U.S. and Canadian electrical safety standards, while the
TÜV Rheinland CE Functional Safety Certificate demonstrates conformity with international functional safety
standards under the CE framework. We received both certifications in 2024.
(7) Our research and development expenditure (including our research and development expenses and investment
in R&D activities which was capitalized) amounted to RMB401.6 million, RMB504.1 million, RMB502.9
million, RMB349.6 million and RMB354.2 million in 2022, 2023, 2024 and the first nine months of 2024 and
2025, respectively, accounting for 10.3%, 10.8%, 12.5%, 10.4% and 9.3% of our total revenue for the same
periods, respectively.
(8) We had 1,029 R&D personnel as of September 30, 2025.
(9) During the Track Record Period, we led or participated in four projects supervised by the MIIT, three projects
supervised by the MOST (ኪҦஔ௅) and one project supervised by the NDRC ( ʕശɛ͏΍
ึ).
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OUR BUSINESS MILESTONES
Our leading market positions are echoed by the following milestones:
 Our history can be traced back to 1993.
 In 2001, we launched our first servo drive system, a device that receives motion
commands from the controller and regulates the power supplied to the servo motor,
enabling precise control of motion and output, laying the foundation for indigenous
motion-control technology.
 In 2010, we introduced our first industrial robot model.
 In 2015, our Shares became listed on the Shenzhen Stock Exchange (Stock Code:
002747.SZ).
 In 2017, we expanded into the high-end motion control industry with the acquisition
of Trio, a manufacturer based in the U.K specializing in motion controllers.
 In 2018, we commenced operations of our Nanjing robotic industrial park, featuring
China’s first intelligent production line where robots build robots.
 In 2020, we expanded into the global premium arc-welding sector with the
acquisition of Cloos, a Germany-based company specializing in welding robotics
with an established international presence.
 In 2021, our shipment volume of industrial robots exceeded 10,000 units for the first
time.
 In 2024, we had ranked first among domestic manufacturers in China’s industrial
robotic solutions market for years, in terms of industrial robot shipment volume,
according to Frost & Sullivan.
 In 2025, we completed the construction of our manufacturing base in Poland,
marking a significant milestone in our effort to achieve global leadership in the
industrial robotic solutions market.
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OUR MARKET OPPORTUNITIES
According to Frost & Sullivan, global industrial robot shipments reached 541,000 units
in 2024 and are expected to grow at a CAGR of 11.2%, reaching 919,500 units by 2029. The
Chinese market is projected to maintain its dominant position during this period, with
shipments expected to grow at a CAGR of 14.9% to 590,400 units by 2029. In 2024, our share
in the global industrial robotic solutions market in terms of shipment volume of industrial
robots was 5.5%, while in the Chinese market, our share reached 9.5%, indicating significant
potential for further growth. The accelerated global advancement of industrial automation,
along with the continued transition toward intelligent and sustainable manufacturing, is
creating significant growth opportunities for the industrial robotics sector:
 Technological Advancement and Innovation. With the adoption of emerging
technologies, industrial robotic solutions are becoming more intelligent, agile, and
efficient. This evolution has expanded their application scenarios of industrial
robots and has driven a surge in demand in the manufacturing sector. Technologies
such as AI, IoT and big data analytics not only optimize production and maintenance
but also enable interconnected systems and smart decision-making. As AI
technologies continue to evolve, it is expected to significantly expand the
applicability of industrial robots, enabling workforce automation initiatives of
“robot-for-labor” in fields where they were previously unsuitable.
 From Volume Growth to Quality Breakthroughs. Chinese industrial robotics
manufacturers are leveraging technological innovation and cost efficiency to
challenge the long-standing dominance of foreign brands. According to Frost &
Sullivan, the market size of the industrial robotic solutions market in China
contributed more than half of the global industrial robotic solutions market in terms
of the shipment volume of industrial robots in 2024. Despite the strong growth in
volume, Chinese-made industrial robots remain underrepresented in the high-end
segment, while significant growth potential are still untapped. Continued investment
in R&D is enabling us to move up the value chain, accelerate the substitution of
foreign brands, and gradually closing the pricing gap between international brands
and us in the domestic market. At the same time, we are expanding into high-value
segment traditionally dominated by global players, unlocking significant upside in
product profitability and contributing to the advancement of China’s high-end
intelligent manufacturing.
 Enabling the Global Expansion of Chinese Enterprises. As Chinese
manufacturers continue to expand their global footprint, smart manufacturing
solutions from China are well-positioned for global deployment. As core
components of smart manufacturing, our industrial robots offer overseas Chinese
enterprises automation solutions that improve efficiency, lower labor costs and
enhance product quality, empowering them to compete more effectively on the
global stage. In parallel, growing recognition of Chinese industrial robot brands
among international customers is expected to drive rising demand for Chinese-made
industrial robots.
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What We Offer
We possess independent research and in-house production capabilities across the entire
industry chain, encompassing “core components + fully assembled robots + solutions.” Our
main products include industrial robots and intelligent manufacturing systems, along with core
automation components and motion control systems.
ESTUN MotorsTRIO MotorsESTUN DriveTRIO Drive
Ultra-
heavy-
duty
SCARA
Variable Frequency
Drive
Bus-based
controller
General-purpose
controller IO Module HMI
Application
Scenarios Comprehensive Industrial
Automation Solutions
General-purpose
Industrial Robots
ElectronicsLithium
BatteryAutomotive Metal
Processing Packaging General
Industry
Automation Industrial Robots +
AI Digitalization Platform
Execution/
Sensing
Control
Drive
Heavy-
duty
Medium-
duty
Light-
duty
Cleanroom
Arc
welding
StampingPalletizing
Bending
High-
IP-rated
Photovoltaics
 Industrial Robots and Intelligent Manufacturing Systems
Our industrial robot portfolio comprises 96 models with payloads ranging from 3kg to
1,000kg. It covers a full spectrum of general-purpose robots and application-specific robots
with advanced process capabilities, meeting diverse manufacturing needs, from lightweight to
heavy-duty and from high-speed to high-precision. We embed process-specific software
packages that equip our robots for tasks such as bending, arc welding, spot welding, stamping,
die casting, polishing, gluing, assembly and flexible sorting. We offer more than 20 types of
workstation solutions and customized smart production lines, delivering holistic robotics-based
intelligent manufacturing solutions.
While developing robotic solutions, we also created a dual digital platform that integrates
remote maintenance and intelligent management to promote the digital operation of factories.
The E-Care Platform utilizes IoT and cloud technology to achieve real-time diagnostics, remote
troubleshooting, and over-the-air updates, significantly enhancing service efficiency. The
E-Noesis platform serves as a digital intelligence hub, leveraging big data, digital twins, and
artificial intelligence to provide digital functions such as process quality detection and
optimization, fault warning analysis, and remote operations, making device parameters,
process parameters, production capacity, and quality data transparent. This offers users a core
competitive advantage in digitalization. The two platforms work in synergy to transform data
into strategic assets, helping to enhance productivity, cost efficiency, and operational
excellence.
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 Core Automation Components and Motion Control Systems
We also provide customers with motion control and servo systems, featuring a range of
general-purpose controllers and servo systems. Our products also include motion control
solutions built upon our servo systems and control systems. Additionally, we develop dedicated
controllers, purpose-built servo drives and integrated drive-control units, designed specifically
for our industrial robots. We offer complete solutions for high-performance motion control for
process-specific equipment, general automation devices, and automated production lines. Our
product architecture covers every layer of automation control, encompassing information
processing, control systems, drive technologies, and execution, forming a robust technology
matrix capable of supporting a wide range of industrial scenarios.
See “— Our Products” for details.
Our Customers and Marketing
We serve a diverse customer base across both traditional and emerging manufacturing
sectors. In conventional industries like construction machinery, packaging and logistics, and
construction material and furniture, we champion the workforce automation initiative of
“robot-for-labor”, deploying robots to take on repetitive, high-intensity or hazardous tasks and
freeing human workers for higher-value roles. In emerging fields, we develop intelligent
manufacturing systems centered around our industrial robots. From automotive and lithium
battery production to photovoltaics, electronics and metal processing, we empower customers
to achieve automated, digital and smart manufacturing transformation. Our solutions span the
entire factory lifecycle, enabling comprehensive upgrades in productivity and efficiency.
Among the members of the Global Lighthouse Network selected by the World Economic
Forum, we have contributed to the development of several benchmark facilities, including three
Lighthouse Factories in the lithium battery sector, the world’s first photovoltaic Lighthouse
Factory, the first coal mining equipment Lighthouse Factory and one Lighthouse Factory in the
construction machinery industry. These facilities have earned widespread recognition for their
exceptional achievements in digitalization, production efficiency and sustainability.
digitalization, production efficiency and sustainability. Our involvement in these Lighthouse
projects demonstrates our ability to deliver solutions that drive the digital, intelligent and green
transformation of manufacturing for an extensive customer base.
We have built a marketing system that combines strategic customers, industry benchmark
customers, and regional customers. We continue to enhance the leading role of strategic and
industry benchmark customers while exploring more application scenarios to increase market
share. Meanwhile, we are deepening our regional marketing efforts through strategic
geographic deployment. In addition, we have built a streamlined customer acquisition network
through distributors, leveraging local resource advantages to drive market penetration. This
enables us to reach both emerging markets and long-tail customers. Together, these efforts form
a dual-engine growth model of “deep engagement with strategic clients + broad coverage of
emerging markets”, driving the synergistic expansion of both customer value and brand
influence.
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Our R&D Capabilities
We are committed to a long-term strategy that prioritizes technological innovation as a
key driver of commercial success. We consistently invest approximately 10% of our revenue
into high-level R&D to fuel innovation and development. Our research and innovation system
continues to strengthen through a solid talent base, accelerated transformation of R&D
outcomes, a focus on domestic substitution, and strategic investments in cutting-edge
technologies, all of which serve as new engines for high-quality growth. As of September 30,
2025, we had established R&D centers in China, Germany, and the United Kingdom,
employing 1,029 R&D personnel, accounting for 30.9% of our total workforce. As of the Latest
Practicable Date, we held 619 registered patents, including 250 invention patents, and 469
software copyrights. During the Track Record Period, we participated in four projects
sponsored by MIIT, three national key R&D projects under MOST, one industrial revitalization
initiative by NDRC, and several provincial-level R&D projects. Leveraging our strong
technological innovation and efficient commercialization capabilities, our 700kg ultra-heavy-
duty industrial robot has been included in the Catalog of Nationally Recognized First-of-its-
Kind Innovative Products (̨(ࢁ)ኬͦ፽(2024وwhile our
industrial robot for photovoltaic stringing has earned us the recognition of Champion
Enterprise in a Niche Manufacturing Sector (Άุ) by MIIT. We are also
recognized as one of the country’s Top 10 Robotics Benchmark Enterprises (ʕ਷ዚኜɛ
TOP10) by MIIT.
OUR ESG INITIATIVES
In 2024, we were awarded the “AA” ESG rating by the Wind Index. We incorporate
requirements on environmental sustainability across the entire value chain, from product
design and R&D to supply chain management, manufacturing and quality control, treating the
development of green, efficient and energy-saving products and solutions as a key driver of
business growth. We are committed to fostering a fair, safe, healthy and inclusive workplace
for all employees, and actively contribute to community development and public welfare. In
addition, our strong corporate governance framework underpins our long-term commitment to
sustainable development. See “— Environmental, Social and Corporate Governance” for
details of our ESG initiatives.
COMPETITIVE STRENGTHS
A Leading Industrial Robotics Company in China with a Strong Presence in Global Niche
Markets
We are a key contributor to the rise of China’s industrial automation sector. Founded in
1993, we have grown rapidly over the past three decades and built a strong competitive edge
through technological innovation and brand recognition. As a pioneer of “Intelligent
Manufacturing in China,” we are rising in the global industrial automation landscape.
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According to Frost & Sullivan, we ranked first among domestic manufacturers in China’s
industrial robotic solutions market for years, in terms of industrial robot shipment volume. In
the first half of 2025, we became the first domestic manufacturers to surpass foreign brands and
secure the No. 1 position in terms of industrial robot shipment volume in the same market. As
of September 30, 2025, our cumulative shipment volume of industrial robots in the past five
years and nine months exceeded 105,000 units.
With keen industry insights and strategic foresights, we have proactively entered and have
achieved rapid breakthroughs in emerging sectors such as photovoltaics and power batteries.
By leveraging early-mover advantages, we have successfully outpaced overseas competitors.
According to Frost & Sullivan, We ranked first in the global industrial robotic solutions market
in 2024 by shipment volume of industrial robots for sheet metal bending and industrial robots
used in photovoltaic sector, respectively, with a market share of 7.8% in sheet metal bending
and 11.0% in photovoltaic.
We have delivered robotic products to customers across multiple industries and complex
scenarios. These authentic and diverse use cases have allowed us to accumulate extensive of
data and practical insights, continuously driving product optimization and functional
innovation. Our products have been validated in large-scale, rigorous environments, enhancing
their performance and reliability, and earning widespread recognition from customers. We have
established long-term strategic partnerships with several leading industry players, becoming a
trusted provider of robotic automation solutions. As robotics continue to expand into new
sectors, we will further unlock the value of data, deepen the integration of AI and robotics
technologies, and push the boundaries of intelligent manufacturing.
Establishing a Multi-Tiered R&D System to Drive Innovation and Deep Industry
Integration through Independent Forward Engineering
We remain committed to our strategic R&D goal of moving “from following to leading,”
upholding a systems-level forward approach to innovation. Anchored in Nanjing and supported
by R&D hubs in Germany, the U.K. and other countries, our R&D team brings together top
industry experts and professionals worldwide. Our talent structure consists of three core teams:
automation innovation, senior technical specialists and academic experts. Our core R&D team
primarily composed of professionals with Ph.D. and Master’s degree from leading domestic
and international institutions. We also maintain close collaborations with renowned research
institutions and universities in China, ensuring that our innovations are grounded in both
theoretical depth and technological advancement.
We have established a unified and platform-based R&D system across our Group. We are
driven by innovation that are responsive to customer demand and possess the technological
expertise, pioneering strong capabilities in robotic design, motion control and servo systems,
and industrial digitalization. Through modular design, high-performance servo drives and
“next-generation” controllers, we harness the capabilities of each core component. At the same
time, our industrial digital platforms unlock the full potential of our products, enabling us to
meet growing customer demand for turnkey solutions. See “— Core Technologies.”
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We prioritize the commercialization of R&D outcomes and follow a tightly integrated
product development model that aligns customer needs with product design, development and
commercial rollout. We operate a laboratory accredited by China National Accreditation
Service for Conformity Assessment (ึ), officially recognized for
conducting reliable tests in accordance with national and international standards. In addition,
we maintain a certified energy-efficient laboratory and collaborate with internationally
recognized certification institutions such as TÜV and UL, both of which are internationally
recognized certification body that provides testing and certification services for product safety,
functional safety, and performance. These strengths enable us to bridge the gap between
laboratory innovations and industrial applications. Through strategic acquisitions, external
collaboration and in-house R&D, we have built differentiated core technologies that form our
competitive edge:
 Stronger Performance, Greater Advancement: We have developed proprietary
core technologies in general-purpose motion control systems and robot controllers.
Our self-developed “next-generation” controller (NGC) features an advanced
industrial-grade programming language and a modular open architecture. It is
designed to provide high usability, efficiency and scalability while meeting the
stringent standards for real-time performance, reliability and safety. This laid the
groundwork for us to develop a dedicated robot control operating system that
incorporates dynamic algorithms, vibration suppression techniques and calibration
across all key parameters for flexible applications, significantly improving both
speed and precision. For the first time, the performance of our products with respect
to dynamic accuracy and collaborative efficiency has matched that of high-end
imported products, marking a critical step in reducing China’s reliance on foreign
robot control technologies. We have fully leveraged the underlying technologies
gained through the acquisition of Trio to upgrade our proprietary motion controllers
and algorithms, launching a next-generation general-purpose motion controller, with
enhanced computing power, improve system coordination and communication
performance. The technologies we acquired from Trio primarily include: (i) task
scheduling for efficient management of multiple operations, (ii) flexible
programming support offering users various ways to control motion tasks, and (iii)
a motion engine capable of single-axis, multi-axis, and grouped-axis motion.
 Lower Energy Consumption, Greener Operation: We are committed to
developing energy-efficient technologies spanning lightweight robot body designs,
servo bus-sharing, which allows multiple servo drives to share a common
communication bus and power source, optimized motor cooling, dual-voltage brake
control that ensures precise and safe stopping using two voltage levels, advanced
servo algorithms, controller sleep modes, and four-quadrant active rectification at
the power end a technique that enables energy to flow in both directions for driving
and regenerating purposes. Our systems also incorporate energy feedback which
returns energy generated during braking back to the system, improved power factor
to enhance the efficiency of electrical power use and bus voltage optimization, our
systems deliver high-speed performance with reduced energy use and a more
compact form factor.
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 More Intelligent and Open: We have developed an open robotic platform powered
by Julia, a high-performance programming language known for its real-time
capabilities. This system bridges the needs of operational technology and
information technology, with open interfaces across path planning, motion control
and bus communication. Customers can customize their own control systems, while
edge-side AI integrates, which performs intelligent processing directly on the local
controller rather than solely in the cloud, with cloud-based AI, transforming the
controller into a flexible, extensible and intelligent system, offering customers
endless possibilities for innovation.
 Higher Standards, Safer Systems: We are deeply committed to advancing
functional safety in robotics. Leveraging both in-house technologies and external
resources, we became the first company in China to obtain CE machinery directive
and functional safety certification for six-axis industrial robots from TÜV
Rheinland. We also received cETLus certification, laying a strong foundation for our
expansion into high-end markets in Europe and North America.
 Unified Platform, Greater Integration: We have developed next-generation
platform designed to meet the evolving needs of intelligent manufacturing. By
combining capabilities across general-purpose motion control, robot control, servo
control, and PLC control, a single controller can now simultaneously manage
multiple robots, motion axes and sensor vision, pioneering a new approach to
equipment and production line control.
Accelerating Global Expansion to Build Sustainable International Competitiveness
We are strengthening our international competitiveness through a comprehensive global
layout covering products and brands, marketing and services, manufacturing and R&D. This
approach enhances our core capabilities, mitigates operational risks and builds resilience to
navigate business cycles. In 2022, 2023, 2024 and the first nine months of 2024 and 2025, our
revenue from overseas markets accounted for 33.8%, 34.3%, 34.2%, 33.8% and 29.4% of our
total revenue, respectively. The gross margin of our overseas business remained above 30%
throughout the Track Record Period, reflecting stable profitability and strong growth potential.
Globalization of Products and Brands
We have gradually built a global product and brand portfolio through both organic growth
and strategic acquisitions. On the one hand, we steadily advance the Estun brand in
international markets to improve recognition and acceptance of our products among overseas
customers. In June 2025, we showcased our cutting-edge technologies and solutions at
AUTOMA TICA in Munich, Germany, one of the world’s premier trade fairs for industrial
automation and robotics. Highlights included our 1ms real-time control technology (ERI),
which breaks barriers in high-end applications, and our dynamic collaborative safety solutions,
which are reshaping traditional production models. Our latest innovations drew attention from
the market, marking a pivotal shift for Chinese robotics, from being a participant in global
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competition to helping define the rules of the game. On the other, we have acquired leading
players such as Trio, Cloos, and M.A.i., integrating their strengths to rapidly scale our global
product offering in the field of industrial automation. We also adapt our product development
and manufacturing process to align with the technical standards and customer requirements of
diverse markets. As a reflection of our commitment to excellence and adherence to stringent
standards, we have earned multiple internationally recognized certifications across various
regions, such as CE, UL, cETLus, and TÜV CE, demonstrating recognition from authorities
worldwide for our high-quality standards. Through sustained overseas sales, we are gradually
building a solid customer base and expanding our global brand presence.
Localized Marketing and Service Network
As of September 30, 2025, we had established 75 service sites worldwide and employed
1,090 overseas staff, with operations spanning major manufacturing and developed regions
across Europe, the Americas and Asia. We view Europe as a strategic starting point in our
journey toward becoming a global leader in industrial robotics. To that end, we have
established subsidiaries and built localized teams in several European countries, with team
members possessing extensive experience in the robotics industry. In other overseas markets,
our localized teams possess a deep understanding of local market dynamics and cultural
contexts, enabling them to accurately identify customer needs and respond efficiently. By
combining accessibility, insight and agility, we provide 24/7 support and consistently deliver
service that exceeds customer expectations worldwide.
Globally Coordinated Manufacturing
We have established a global manufacturing network anchored in China and supported by
key overseas manufacturing bases. As of September 30, 2025, we operated seven
manufacturing bases worldwide. Among these, five domestic manufacturing bases follow a
“Local for Global” model, leveraging China’s efficient supply chain to provide high-
performance, cost-effective and accessible automation solutions to customers worldwide. At
the same time, we have set up and operated manufacturing bases in Europe, to stay close to
European markets and offer flexible and responsive local production that enhances our global
delivery efficiency.
Integrated Global R&D System
We have R&D centers in China, Germany and the U.K., forming a collaborative
innovation network. Aligned with global industry trends and remained responsive to regional
market demands, we are able to focus precisely on key areas of technological advancement.
Our overseas teams bring technical expertise, providing the theoretical frameworks that guide
innovation, while our domestic teams excel in responsiveness and rapid iteration. By
combining these strengths, we have significantly improved R&D efficiency, continuously
delivering forward-looking and practical innovations that support our customers with globally
competitive solutions.
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Full Industry Chain Capabilities Covering “Core Components + Fully Assembled Robot
+ Solutions” to Meet One-Stop Service Needs
We endeavour to establish a self-sufficient value chain that encompasses core
components, fully assembled robot to intelligent manufacturing solutions. This approach
allows us to offer cohesive, robot-centered automation solutions that cover the entire lifecycle
of industrial automation.
A Comprehensive Robot Product Portfolio Covering All Scenarios and Payloads
We have developed a product portfolio of 96 industrial robots, covering payloads from
3kg to 1,000kg, balancing general-purpose flexibility with application-specific precision. On
the one hand, our general-purpose and lightweight robots serve a wide range of typical
scenarios with diverse demands for payload, installation space and operational intensity.
Particularly in the heavy-duty and ultra-heavy-duty segment, we offer a full lineup of robots
with features such as downward reach, enhanced protection, ultra-long arm reach and
multi-scenario adaptability. Our 700kg ultra-heavy-duty robot was included in the Catalog of
Nationally Recognized First-of-its-Kind Innovative Products (̨(ࢁ)ɽҦஔༀ௪પᄿᏐ͜
ኬͦ፽(2024وmarking a breakthrough as the country’s first high-performance ultra-
heavy-duty robot. To overcome the critical bottlenecks in heavy-duty transmission
technologies, we innovatively adopted a “dual-motor + dual-reducer” architecture and
successfully launched a 1,000kg payload robot, significantly enhancing China’s core
competitiveness in heavy-duty robotics.
On the other hand, we also address sector-specific challenges by offering specialized
robots for protection, bending, palletizing, stamping and welding. These are designed to tackle
the unique technical difficulties in complex operating environments. For instance, our
self-developed fifth-generation photovoltaics stringing robot, with a 2010mm ultra-long arm,
integrated high-precision vision-control system and proprietary process-specific software
package for stringing, was recognized as Champion Enterprise in a Niche Manufacturing
Sector (Άุ). It enables one-click format switching and leads the world in
production efficiency. In the field of welding, we offer a complete ecosystem of technologies,
from process, to software to hardware, providing high-quality welding solutions for complex
materials, including medium-thick plates, ultra-thick plates, dissimilar metals and specialty
alloys. We achieved full deployment of arc welding robots, welding power sources and
teachless programming software. We also ranked first among domestic manufacturers in
industrial robotic solutions market in China in terms of shipment volume of arc welding robot
in 2024, with a market share of 7.9%, according to Frost & Sullivan. Looking forward, we aim
to reshape welding automation through real-time programming, teachless welding, additive
welding and ultra-high-speed arc welding technologies.
Additionally, supported by our proprietary robot controller, dedicated servo systems and
mechanical design platform developed through forward engineering, a structured process of
designing and developing products from initial concepts to finalized designs, we have
established a closed-loop product iteration capability. Keeping pace with AI advancements, we
continue to innovate in high-value and embodied intelligence robot products to meet the
diverse and high-end demands of the global market.
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Mastery of Core Automation Components and Motion Control Systems to Deliver Integrated
High-Performance Solutions
We are a pioneer in the development of motion control systems and servo systems in
China. Our motion control products include PC-based controllers, high-performance motion
controllers and motion programmable logic controllers (PLCs). Leveraging in-house R&D and
the strategic acquisition of Trio, we have developed technologies such as high-precision
synchronized control and advanced motion algorithms. Our servo portfolio includes high-end,
general-purpose and industry-specific servo systems, all certified to international standards
such as UL, CE and RoHS, meeting the global market’s strict safety and reliability demands.
By systematically integrating motion control, servo systems and other key automation
components such as inverters, I/O modules and sensors, we deliver highly tailored, fast-to-
deploy and cost-effective control solutions. This enables customers to build efficient and stable
automation systems with minimal effort.
AI Powered Digital Platform for Building Lifecycle Industrial Robot Solutions
Our mastery of automation components and motion technologies also allows us to
customize industrial robots based on specific industry needs, offering optimal automation
solutions across customers’ full manufacturing lifecycle.
We were an early mover in introducing advanced German intelligent manufacturing
technologies and Industry 4.0 concepts, an initiative that promotes the digital transformation
of manufacturing through cyber-physical systems, realtime data, and smart automation, helping
upgrade robotics system integration toward mid-to-high-end applications. Backed by well-
established technologies and years of industry experience, and informed by experience with
customer needs, we have delivered benchmark smart manufacturing production lines and
factories across both emerging and traditional industries.
Our proprietary E-Noesis industrial internet platform, together with intelligent gateways
and supported by edge and cloud computing, enables millisecond-level data collection and
processing. It provides a real-time and system-wide view of equipment and production line
status. The E-Noesis platform leverages big data and digital twin technology to enable
full-lifecycle management of robots. The platform’s built-in digital knowledge models support
functions such as online quality management, yield rate analysis and prediction, and
production alerts, empowering customers with data-driven decision-making and significantly
enhancing production management and operational efficiency. The platform’s built-in AI
programming assistant allows users to issue “conversational” commands in place of complex
coding, significantly lowering the barriers to robot integration and debugging, and enabling
truly zero-code industrial robot operation. The AI maintenance assistant supports natural
language queries for fault diagnosis, maintenance procedures, and operational knowledge. It
also unifies semantic indexing and enables in-depth queries and responses across
heterogeneous data sources such as blueprints, manuals, and historical work orders.
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The E-care platform combines IoT connectivity with cloud computing to deeply integrate
OT and IT systems. By breaking down data silos, it provides end-to-end remote support for
equipment, effectively improving fault resolution efficiency and reducing unplanned
downtime. Its integrated over-the-air updates and continuous sensor monitoring dramatically
shorten response times. With E-care, the costly traditional model of on-site service is being
fundamentally transformed.
“Vertical + Horizontal” Robotics-based Solutions Empowering All Industries:
Collaborating with China’s Emerging Industry Leaders to Usher in the Era of Extreme
Manufacturing
We are committed to delivering complete robotics-based intelligent manufacturing
solutions that drive transformation across a wide range of industries. From automotive, lithium
battery, photovoltaics, and metal processing to electronics, construction machinery,
construction materials, and packaging and logistics, we are helping to accelerate the shift
toward digital, intelligent and green manufacturing.
We are at the forefront of the global transition to a zero-carbon future. Through
cutting-edge technological innovation and deep industrial know-how, we are enabling
emerging industries to undergo smart manufacturing transformations. In the power battery
sector, we are the pioneer behind the ultra-high-speed lithium battery production lines.
Leveraging the combined strengths of motion controllers, servo systems, industrial robots,
machine vision and digital technologies, we deliver comprehensive intelligent solutions across
the entire battery manufacturing chain, including cell production, module assembly and PACK,
the assembly process that integrates multiple cells and modules into a complete battery pack.
These solutions help lithium battery manufacturers build lean, efficient and highly flexible
production lines, pushing the boundaries of productivity. In photovoltaics, we bring our
expertise across every critical stage, from polysilicon and wafer production to solar cell
fabrication and module encapsulation. We offer high-value and customized solutions for
challenging processes, helping customers overcome application bottlenecks. As of the Latest
Practicable Date, the shipment volume of our application-specific Estun robots for
photovoltaics manufacturing exceeded 15,000 units, advancing the global photovoltaic
industry through Chinese industrial robotics innovation.
Guided by our mission of smarter manufacturing , we are extending our intelligent
manufacturing solutions to transform diverse industries. In automotive manufacturing, we are
breaking the dominance of the world’s four major industrial robotics brands and expanding into
the full spectrum of intelligent manufacturing, from parts processing to complete vehicle
production. Our projects have set new benchmarks across the industry. Notably, we delivered
fully domestic and heavy-duty robotic press line for automotive exterior panels, filling a
critical gap in high-end stamping equipment. In the metal processing sector, we offer a
comprehensive solution suite covering the entire production flow, from die casting, decoiling,
and leveling to stamping, bending, welding and grinding. We pioneered dedicated intelligent
bending robot, significantly enhancing the efficiency of the bending process. We ranked first
in the global industrial robotic solutions market in 2024 by shipment volume of industrial
robots for sheet metal bending, with a market share of 7.8%, according to Frost & Sullivan.
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Harnessing Data and Application Advantages to Accelerate the Adoption of Robotics-
based AI Across Industrial Scenarios
As AI continues to rapidly penetrate the physical world, industrial settings have emerged
as the largest application domain for the integration of robotics and AI. Empowered by
advanced AI technologies, our industrial robots now incorporate large language models,
multimodal sensing, machine vision, voice interaction, deep learning, and reinforcement
learning algorithms. These capabilities endow our robots with enhanced adaptability and
self-evolution, enabling them to better respond to dynamic environments and carry out
increasingly complex tasks involving multiple variables and intricate workflows. This deep
integration not only optimizes existing use cases and enhances intelligence levels, making
robots easier to use, but also unlocks new application scenarios across various industries,
continuously expanding the boundaries of industrial robotics.
Our Foundational Architecture for Robotics-based + AI Integration
We have developed an AI-ready control system architecture that emphasizes openness,
compatibility, and scalability, providing a robust foundation for industrial intelligent
applications. Built on a distributed framework, the system offers flexible deployment options,
local, edge, or cloud-based, depending on the AI model and scenario, giving customers greater
control over computing resources and data security. Cloud services handle global management,
big data analysis, and complex decision-making. Intelligent gateways process real-time local
data, run AI inference, and make local decisions to reduce cloud workload. Local deployments
can also be equipped with AI extension cards to enhance specific industrial tasks, such as
visual inspection and path planning.
The architecture is equipped with our virtual controller engine of robot control system
and AI-driven parameter tuning, enabling high-precision visual simulation and AI model
training in virtual environments. This allows motion planning and algorithm iteration to be
completed efficiently before physical testing, greatly reducing debugging time and cost.
We have also developed an open and universal control interface called EstunRobot
Real-Time Interface (ERI), designed for advanced robotic applications. ERI connects
seamlessly with large AI models and the ecosystem of robot operation system. It allows users
to control robot movements in real time through external systems and to generate high-
frequency, high-precision data streams. This supports advanced process control and AI-
integrated development.
This architecture allows our industrial robots to integrate with AI more efficiently and
flexibly, enabling faster deployment and iteration in real-world industrial environments.
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Unlocking More Industrial Scenarios with Robotics-based AI Technologies
The fusion of robotics and AI relies not only on advancements in control systems,
mechanical design, and cutting-edge AI technologies, but also on a deep reservoir of process
data and refined use-case experience. With a large installed base of robots in the market, we’ve
built a solid foundation in the industry. By accumulating extensive on-site experience and
building a comprehensive AI knowledge base, covering data collection, AI-driven operations,
AI programming, and AI-based tuning, we have developed a rich industrial knowledge graph
and a collaborative data system. These resources give us a significant head start in truly
integrating robotics and AI. Set forth below are examples of how we integrate robotics with AI
in real-life industrial context.
 Teaching-free intelligent welding system . We have developed a 3D vision-based
teaching-free welding system that combines robotic control, vision sensing, and
image processing. With real-time reinforcement learning and welding-specific AI
models, the system automatically detects welding seams, plans welding paths, and
adjusts deviations in real time. It predicts welding quality by analyzing multimodal
data, helping reduce downtime and maintenance costs. The system is suitable for
small-batch, high-flexibility, and complex-shape applications such as welding,
grinding, and assembly.
 Intelligent truck loading system . Using machine vision and reinforcement learning,
this system can automatically recognize cargo type, size, weight, and stacking
needs, and adjust loading plans accordingly. It plans optimal paths for stable
stacking, efficient space use, and obstacle avoidance, improving both speed and
safety in truck loading.
 3D vision unpacking robot . By integrating 3D vision and AI algorithms, this robot
can handle complex stacks of boxes or soft bags of different shapes and sizes. It
adjusts its arm movements in real time, plans optimal gripping paths, and avoids
collisions, increasing the efficiency and reliability of material handling.
Looking ahead, our robotics-based AI technologies will continue to penetrate deeper into
industrial scenarios, driving intelligent automation and accelerating real-world adoption.
An Experienced Management Team with Global Perspective
Our management team brings strategic foresight and strong execution capabilities,
consistently guiding us through key phases of growth with a clear vision of globalization. With
a deep understanding of industry dynamics, our management team have led us in expanding
into international markets through in-house innovation, strategic acquisitions and integration,
driving Chinese-made industrial robots on the world stage.
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Our overseas management team comprises seasoned professionals from leading global
robotics companies, with core team members possessing extensive experience in the robotics
industry. With extensive experience in the global markets, especially in Europe, they possess
deep insights into local business environments, industry practices and customer preferences.
Their ability to quickly identify and act on market opportunities has led a solid foundation for
our global business expansion and brand development, driving us toward greater breakthroughs
on the international stage.
OUR STRATEGIES
With the goal of building a world-renowned brand for Chinese robotics, we are committed
to developing a deeply integrated global network that spans R&D, manufacturing, delivery, and
service. By advancing the integration of robotics and AI technologies, we aim to expand the
application scope of industrial robots and unlock new market opportunities. Leveraging our full
value chain advantages in the industrial robotics sector, we plan to build factories centered
around robotics and develop open platforms to foster a collaborative and innovative robotics
ecosystem.
From China to the World: Building a Global Brand for Chinese Robotics
With a bold ambition to build a global brand for Chinese robotics, we aim to penetrate
into the trillion-RMB industrial robotic solutions market traditionally dominated by the world’s
four major robotics brands. Our strategic focus is on key regions such as Europe, recognized
for their central role in shaping global industry trends. By deepening our presence in these
markets, we are accelerating our transition from a domestic leader to a top-tier global player.
Our strategy is built on the integration of China’s robust industrial ecosystem with
localized service in overseas markets. Leveraging China’s manufacturing scale and engineering
talent pool, we are advancing our international expansion by establishing experienced
management teams in Europe and setting up localized manufacturing bases in key markets. At
the same time, we are establishing global delivery centers and expanding our sales and service
network, creating a global matrix of R&D, delivery, and service network that reflects the
entrepreneurial spirit of Chinese enterprises while ensuring competitiveness in cost control,
response speed and supply chain resilience.
We place strong emphasis on maintaining independent control over core technologies,
with a focus on continuous enhancement of precision, speed, stability and protection standards.
Our R&D will focus on (i) developing open-source, application-driven industrial robot control
platforms; (ii) integrating embodied AI into industrial robots; (iii) advancing precision motion
control and high power-density motor technologies; (iv) enhancing the safety of our robots,
including safety-critical components and technologies to enable safe human-robot interaction;
and (v) building digital-twin capabilities and industrial software platforms. By advancing our
proprietary core components and motion control algorithms to break through barriers to entry
into the high-end market, transforming our role from technology follower to standard setter.
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To further strengthen our global brand presence, we are actively engaging top-tier
overseas customers and building landmark reference cases with demonstrable value. These
efforts aim to enhance Estun’s global brand recognition and establish a reputation for trusted
technology, reliable service and long-term partnership.
Our growth strategy combines organic development with targeted acquisitions to
accelerate globalization. Leveraging our extensive experience in cross-border M&A, we will
continue to drive deep integration across manufacturing, supply chains, market channels and
technology platforms, creating a proven model for international expansion in the advanced
manufacturing sector and laying a solid foundation for long-term global success.
We plan to strengthen our global service capabilities and implement a globally integrated
digital management system to increase brand visibility and reinforce our competitive position
in international markets. We will prioritize enhancing international sales coverage and
expanding our after-sales service infrastructure, with a strategic focus on Europe, South
America and Southeast Asia. In parallel, we will design and roll out a unified digital
management platform across regions to standardize processes, enhance operational visibility
and support scalable growth.
We will also invest in expanding production capacity to support our global expansion. On
the one hand, we plan to commission new facilities in China to expand and upgrade production
for our industrial robots and intelligent manufacturing systems. The new facilities are intended
to add incremental capacity, remove critical bottlenecks and improve operating efficiency.
Consistent with our Local for Global production model, we will continue to leverage supply
chain advantages in China to deliver cost competitive products and solutions to customers
worldwide. On the other hand, we intend to further expand our overseas manufacturing
footprint, with a particular focus on Europe. Our planned European production facility
underscores our commitment to the region and our intention to expand operations in one of our
key markets.
Unlocking Growth Opportunities through Integration between Robotics and AI
Technologies and Business Model Innovation, and Accelerating the Deployment of
Embodied Intelligence in Industrial Scenarios
We are exploring robotics applications in untapped fields where traditional industrial
robotics manufacturers have limited reach. By driving “robot-for-labor” and
“robot-for-equipment” substitution, we aim to accelerate the adoption of robots in new
scenarios and redefine global competitive landscape in industrial automation. As the
organization chairing the first Jiangsu Provincial Embodied Intelligence Robotics Industry
Alliance, we are committed to accelerating the advancement of industrial robots from
mid-level to high-level intelligence. In response to the rising wave of embodied intelligence,
we have taken the lead in developing industrial robots that combine AI technologies with a
dual-arm structure. By integrating key technologies such as multimodal perception, visual
intelligence, large language models, and reinforcement learning, we aim to endow robots with
the coordination and dexterity of human hands. We continue to explore deeply applicable
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industrial scenarios, driving the boundaries of intelligent manufacturing through practical
innovation and execution. We are also pioneering robot-based models that replace standalone
machines with autonomous processing, real-time process adjustment and multi-unit
collaboration, unlocking vast new growth opportunities and reshaping productivity paradigms.
We are also advancing robotics-based AI solutions that combine ease of use, high
performance and safety to meet customer demands. By focusing on real-world applications and
practical value, we are conducting integrated R&D in robotics, AI and big data. With years of
experience in industrial robotics and a wealth of application scenarios and datasets, we are
uniquely positioned to lead the training of AI-powered robots, developing intelligent systems
capable of sensing, decision-making, and autonomous execution.
Expanding Intelligent Factory Solutions for Discrete Manufacturing through Robotic
Automation and Industrial Control Software
Leveraging our deep technical expertise and business insights in robotics and factory
automation, we aim to develop tailored solutions that address the unique needs of various
sectors. For example, we can customize command names and user interfaces in the software to
improve ease of use and adaptability for specific applications. For a particular lithium battery
customer, we provided software-level customization, including dedicated commands and
interface settings, to support the mixing of battery powder. While enabling robot-centric
factory automation, we also empower customers to achieve fully unmanned and intelligent
operations through our industrial software platform, driving holistic improvements in
production efficiency, product quality, and operational sustainability. Our comprehensive
solution will span all layers of industrial automation, including execution, sensing, drive,
control, and edge layers, and seamlessly connect with the top-tier information layer. This
enables full-spectrum automation, digitalization, and intelligent transformation across a wide
range of industrial scenarios. We intend to provide solutions that range from basic automation
to cutting-edge intelligent systems, delivering a seamless integration of information technology
and operational technology. Our industrial software platform incorporates functions such as
design simulation, virtual commissioning, process planning, and production management. With
robust capabilities in programming, monitoring, and control, it supports end-to-end
development, deployment, and operation, from raw materials to finished products, and from
individual equipment to entire production lines. Beyond improving efficiency, cost-
effectiveness, and quality, our platform enables a fundamental reconfiguration of
manufacturing logic, organizational structure, and governance. We expect it to empower the
transition from process-driven to data-driven manufacturing, from automation to intelligence,
and from manual control to human-machine collaboration, ultimately helping each discrete
manufacturing subsector to achieve its optimal intelligent operating model.
Building an Open Platform and a Collaborative Robotics Ecosystem
To build a thriving industrial ecosystem and enhance customer stickiness, we plan to
establish a layered open platform centered around robotics, with a focus on developing
application-oriented industrial robot control systems. The layered open platform will not open
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source our motion control firmware and low-level instruction firmware. Instead, it will provide
open access to the software development kit for instruction development and the motion
control application programming interfaces to support customers in extending applications. For
example, based on the motion control firmware and low-level instruction firmware we provide,
customers can develop specialized commands and force control algorithms for polishing
according to their specific application needs. Leveraging the scalability of our platform-based
approach, we aim to accelerate hardware design, optimize operating systems, and refine control
architectures to create a robust robotics industry value chain. This will strengthen our
symbiotic relationships with system integrators and end users, moving beyond standalone
products offering to deliver shared value through optimal resource allocation and collaborative
innovation.
We will provide platform-based products built on a robot-centric foundation, supporting
customers’ needs for customizable robotics solutions. We are dedicated to developing advanced
programming languages to enhance the adaptability and functionality of programmable logic
controllers (PLCs) and industrial PCs. We will open application programming interfaces (APIs)
and developer toolchains to facilitate secondary application development, modular
encapsulation, IP protection, and personalized interface design for our partners. We will
explore advanced robotic application scenarios while continuously optimizing the industrial-
grade real-time control interface solution, enhanced real-time interface (ERI). Seamlessly
integrating with AI large models and the robot operating system ecosystem, the ERI empowers
users to drive robot actions in real time through external systems, delivering high-speed,
high-precision process data streams to meet the complex development needs of advanced
process control and AI-integrated deployments. To further improve cross-platform
compatibility, we will create more intuitive environments for programming and human-
machine interaction, offering full-stack development support from low-level control to
high-level applications. Emphasizing ease of use and openness, we are building a data-driven,
collaboration-powered, platform-enabled robotics ecosystem. Concurrently, we are building an
open ecosystem platform to onboard external developers and social resources for collaborative
robotics innovation.
OUR PRODUCTS
We mainly engage in the R&D, manufacturing and sales of industrial robots and
intelligent manufacturing systems, along with core automation components and motion control
systems, which form integral parts of our industrial robots and intelligent manufacturing
systems. Specifically, Within the core automation components and motion control systems
segment, our motion control systems, in combination with servo systems, can drive the
movements of our industrial robots, or constitute motion control solutions for various
automation equipment. Our industrial robots, together with certain peripheral equipment, are
assembled into industrial robot workstations to perform specific production tasks. Built on
these, our intelligent manufacturing systems integrate our industrial robots and/or industrial
robot workstations, and core automation components and motion control systems to deliver
comprehensive automation solutions.
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This vertically integrated model ensures coordination across the value chain, enhances
product reliability and accelerates innovation cycles. Supported by our R&D capabilities and
ongoing investment in proprietary technologies, we are positioned to contribute to the
advancement of intelligent manufacturing and to provide automation solutions that adapt to our
customers’ needs.
The following table sets forth a breakdown of our revenue by business line for the periods
indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Industrial robots and
intelligent
manufacturing
systems /H1118/H1118/H1118/H1118/H1118/H1118/H11182,838,648 73.1 3,594,821 77.3 3,029,103 75.6 2,600,585 77.2 3,138,297 82.5
– Industrial robots /H1118/H1118924,589 23.8 1,446,121 31.1 1,232,580 30.7 1,049,293 31.1 1,397,913 36.7
– Intelligent
manufacturing
systems /H1118/H1118/H1118/H1118/H1118/H1118582,627 15.0 610,469 13.1 747,022 18.7 697,331 20.7 927,016 24.4
– Industrial robot
workstations /H1118/H1118/H1118/H11181,331,432 34.3 1,538,231 33.1 1,049,501 26.2 853,961 25.4 813,368 21.4
Core automation
components and
motion control
systems /H1118/H1118/H1118/H1118/H1118/H1118/H11181,025,480 26.4 1,040,015 22.3 976,276 24.3 767,066 22.7 662,495 17.4
– Motion control
systems /H1118/H1118/H1118/H1118/H1118/H1118117,808 3.0 137,676 3.0 100,342 2.5 78,802 2.3 78,455 2.1
– Servo systems /H1118/H1118/H1118314,579 8.1 267,512 5.8 241,241 6.0 186,297 5.5 137,330 3.6
– Motion control
solutions /H1118/H1118/H1118/H1118/H1118/H1118593,093 15.3 634,827 13.5 634,693 15.8 501,967 14.9 446,710 11.7
Rentals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,651 0.5 17,113 0.4 3,393 0.1 2,623 0.1 2,778 0.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,880,779 100.0 4,651,949 100.0 4,008,772 100.0 3,370,274 100.0 3,803,570 100.0
Brand Portfolio
To support our international growth and meet the diverse needs of customers across
industries and regions, we have adopted a multi-brand strategy that leverages the strengths and
market positioning of each brand in our portfolio. This approach not only allows us to offer
highly specialized solutions but also enhances our ability to compete in a dynamic international
landscape.
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 “Estun” . We have been operating under the “Estun” brand since our establishment
and continuously strengthened its visibility and recognition in the industrial robotic
solutions market. “Estun” serves as the cornerstone of our business, offering a broad
lineup of robot models and selected core automation components and motion control
systems.
 “Cloos” . Acquired in 2020, “Cloos” significantly expands our capabilities in the
industrial welding sector, in particular, the technologies supporting medium-plate
and thick-plate welding process. Leveraging the brand’s established market
presence, we continue to strengthen our position in the welding automation market
by delivering advanced robotic systems and turnkey welding solutions.
 “Trio”. Acquired in 2017, “Trio” is a brand with established international presence
in motion control. By combining Trio’s advanced motion controllers with our servo
drive technologies, we have evolved from a core component manufacturer into a
provider of integrated motion control solutions. This enables us to deliver more
complex and high-value solutions tailored to top-tier customers across various
industries.
 “M.A.i”. Acquired in 2017, “M.A.i” focuses on intelligent manufacturing systems
and strengthens our presence in smart manufacturing. It incorporates technologies
aligned with Germany’s Industry 4.0 standards, an initiative that promotes the
digital transformation of manufacturing through cyber-physical systems, real-time
data and smart automation.
Industrial Robots and Intelligent Manufacturing Systems
Our industrial robots and intelligent manufacturing systems deliver a complete suite of
automation solutions, including (i) industrial robots, which are programmable machines with
multiple axes or degrees of freedom, capable of independently performing repetitive,
physically demanding, or hazardous tasks, effectively replacing manual labor in industrial
settings, (ii) intelligent manufacturing systems, which refer to turnkey product lines built
around these robots, combined with the necessary peripheral and auxiliary equipment to
complete specific workflows (iii) industrial robot workstations, which refer to relatively
independent production unit centered around industrial robots, equipped with auxiliary devices
such as controller, welding power source, positioners, end-effectors, tooling fixtures, sensors,
conveyors, and safety systems to automatically perform a specific task. These systems are
designed to minimize human intervention and significantly boost production efficiency and
reliability. Our revenue generated from sales of industrial robots and intelligent manufacturing
systems was RMB2,838.6 million, RMB3,594.8 million, RMB3,029.1 million, RMB2,600.6
million and RMB3,138.3 million in 2022, 2023, 2024 and the first nine months of 2024 and
2025, respectively, accounting for 73.1%, 77.3%, 75.6%, 77.2% and 82.5% of our total revenue
for the same periods.
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The market for industrial robotic solutions is characterized by remarkable scale and
sustained growth. From 2020 to 2024, the market size of the global industrial robotic solutions
market in terms of revenue increased from USD14.7 billion to USD25.4 billion at a CAGR of
14.6%, according to Frost & Sullivan. Projections indicate substantial expansion, reaching
USD51.8 billion by 2029, reflecting a CAGR of 15.4% between 2024 and 2029, according to
the same source. We have secured a solid market presence, with rankings and market share
across core product lines and application scenarios, according to Frost & Sullivan:
 We ranked first in the global industrial robotic solutions market in 2024 by shipment
volume of industrial robots for sheet metal bending and industrial robots used in
photovoltaic sector, respectively, with a market share of 7.8% and 11.0%,
respectively.
 We ranked first in the industrial robotic solutions market in China in 2024 by
shipment volume of industrial robots used in the power battery sector, with a market
share of 16.9%.
 We ranked fifth in the global industrial robotic solutions market in 2024 by shipment
volume of arc welding robots, with a market share of 5.3%.
Industrial Robots
Our industrial robot product matrix has evolved into a full-fledged portfolio, structured
around two major categories, including general-purpose models and application-specific
models.
The following table summarizes the industrial robots we currently offer:
Product line Payload
Number
of models
we offer
Major Downstream
Applications
General-purpose
industrial robots /H1118/H1118
The SCARA
Series (1)
3kg-50kg 12 Electronics, automotive,
lithium battery
Light-duty robots 4kg-35kg 16 Electronics, automotive,
metal processing,
photovoltaic
Medium-duty
robots
35kg-100kg 5 Automotive, metal
processing,
photovoltaic
Heavy-duty
robots
100kg-280kg 9 Automotive, lithium
battery, metal
processing,
construction materials
Ultra-heavy-duty
robots
280kg-1,000kg 8 Automotive, lithium
battery, metal
processing
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 50
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Product line Payload
Number
of models
we offer
Major Downstream
Applications
Application-specific
industrial robots /H1118/H1118
Arc welding
robots
4kg-15kg 21 Automotive (including
electric vehicle), steel
structure, shipping
building
High-IP-rated
robots
(2)
30kg-170kg 9 Die casting, refractory
materials, grinding,
metallurgy
Cleanroom robots 7kg-10kg 6 Semiconductors, food
processing,
pharmaceuticals, flat
panel glass, precision
electronics
Palletizing robots 60kg-500kg 5 Packaging and logistics,
chemical industry,
food and beverage
industry
Bending robots 45kg-130kg 3 Sheet metal
Stamping robots 15kg-150kg 2 Automotive, metal
processing
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 46
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 96
Notes:
(1) Representing selective compliance assembly robot arm (SCARA), a four-axis robot product line known
for high-speed, horizontal motion in pick-and-place and soldering applications.
(2) Representing robots featuring enhanced protection against dust and water, allowing them to operate
reliably in demanding industrial conditions.
This product matrix allows us to achieve economies of scale through standardized
offerings, while also addressing industry-specific challenges with dedicated and high-
performance solutions. We determine and define each model based on a comprehensive
assessment of factors such as product positioning, key parameters, performance characteristics,
and application scenarios. Among these 96 models, we offer both general-purpose models
suitable for multiple industries and application-specific models designed for specific processes
or sectors. For example, to meet the high-temperature, high-humidity, and highly corrosive
conditions of the die-casting industry, we redesigned the ER220-3100 general-purpose robot to
create a new high-IP-rated model. Modifications include sealed wrist joints, heat- and
corrosion-resistant coatings, and a linear soft-floating software function tailored for die-casting
operations. The resulting ER220-3100-P and related models can operate reliably under the
harsh conditions of the die-casting industry. We also make certain product adjustments to meet
the specific requirements of individual customers. Such modifications do not constitute new
models, as they do not involve any substantive changes to the functions or design of the
products. For example, some customers request customized colors for their robots to align with
their factory color schemes, which does not result in the creation of a new model.
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General-Purpose Industrial Robots
Our general-purpose industrial robots include 12 four-axis models under the SCARA
Series, and 38 six-axis models.
The SCARA Series is designed to provide stable performance for smoother motion control
and consistent speed, achieving a standard cycle time of 0.38 seconds to 0.43 seconds. With
high-precision repeat positioning accuracy, they ensure consistently accurate operations.
Dedicated motors and customized reducers boost efficiency, delivering cycle time
improvements. Models with 20kg-50kg payloads use a multi-link structure for significantly
improved end-tool stability. They are paired with our third-generation control cabinet, which
significantly reduces robots’ size and uses less cabling, enhancing system reliability.
Our six-axis general-purpose industrial robots are structured in tiers based on payload,
offering broad applicability across diverse industry verticals. We possess technological
advantages in the field of heavy-duty and ultra-heavy-duty industrial robots, with expertise in
structural design, precision motion control, and system stability under extreme operating
conditions. In 2024, our 700kg ultra-heavy-duty robot was included in the Catalog of
Nationally Recognized First-of-its-Kind Innovative Products (̨(ࢁ)ɽҦஔༀ௪પᄿᏐ͜
ኬͦ፽(2024وissued by MIIT, marking a significant breakthrough for high-
performance heavy-duty industrial robots in China. In addition, we have successfully launched
a high-capacity 1,000kg payload robot in 2025.
The image below illustrates our portfolio of general-purpose industrial robots.
MINI
Light-duty robot
Heavy-duty robot Ultra-heavy-duty robot
Medium-duty robot
SCARA SeriesSeries
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Our general-purpose industrial robots possess the following features:
 Comprehensive payload range . Our lineup of general-purpose industrial robots
spans light to ultra-heavy-duty, with payloads up to 1,000kg and maximum reach of
3.7 meters, offering a comprehensive portfolio that meets the payload and reach
requirements of the vast majority of industrial automation scenarios, such as
high-speed tabbing and stringing of photovoltaic modules, spot welding for
automotive body-in-white, metal grinding and polishing, and large integrated
die-cast components.
 High precision and stability . Engineered for high-precision performance in dynamic
manufacturing environments, our general-purpose industrial robots offer repeat
positioning accuracy (ܓof ±0.03mm to ±0.08mm and point absolute
accuracy (ܓof ±0.2 mm to ±0.5mm. They also demonstrate excellent
dynamic stability, with a stabilization time of less than 0.2 seconds in a 0.4mm
deviation range. This level of precision and stability ensures robots perform
complex tasks consistently and accurately, crucial for applications requiring strict
motion control and reliable positioning.
 Proprietary robot control systems. Our general-purpose industrial robots are
powered by a self-developed control system designed through a forward engineering
approach. This “next-generation” controller integrates core technologies, hardware,
software architecture, and control algorithms in a highly coordinated manner,
enabling easy functional scalability and continuous performance upgrades. By
combining this system with optimized robot body design, we unlock the full
potential of the robot’s capabilities, delivering fast cycle times, high precision, and
strong stability.
 Advanced functional safety . Safety is a key feature of our general-purpose industrial
robots. Designed to meet rigorous industry standards, our robots comply with the
PLd Category 3 standard as defined by ISO 13849-1, signifying high risk reduction
through redundant and reliable control architectures. Advanced safety features
include continuous monitoring of position, speed and designated safety zones,
enhancing protection for operators and equipment in complex and high-risk
environments.
Application-specific Industrial Robots
Our portfolio of application-specific industrial robots consists of 46 models tailored to
meet specialized industry demands. Designed with four-axis or six-axis configurations and
payloads of 4kg-500kg, these robots are built to perform consistently across a variety of
industrial scenarios where standard automation solutions may fall short.
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The image below illustrates our portfolio of application-specific industrial robots.
High-IP-rated robotBending robot Palletizing robot
Stamping robot
Arc welding robot
Cleanroom robot
Our application-specific industrial robots are purpose-built, with design and functionality
driven by real-world production needs. Whether for stamping, welding, or other high-intensity
operations, each robot integrates mechanical innovation, control systems and application-
specific intelligence to deliver targeted performance and long-term reliability.
Our bending robot features an optimized axis-length configuration tailored to meet the
requirements of bending sheet metals of various sizes and angles. It is equipped with a
comprehensive process-specific software package that supports both input/output (I/O) and
Ethernet communication, allowing for flexible connectivity and simplified wiring.
Additionally, the system comes with offline programming software that enables the verification
and debugging of new processes in advance, enhancing efficiency and reducing on-site
commissioning time.
For demanding welding, our arc welding robots offer optional thick-plate functions,
which enables the robots to handle welding of medium- to thick-gauge metal plates commonly
used in heavy industry. These functions include arc tracking, nozzle searching and multi-
layer/multi-pass welding. Our multi-function welding systems support advanced processes like
variable pulse, rapid deep fusion and speed pulse welding. Integrated torch-cleaning stations
enable automatic cleaning during operation, supporting safer, more efficient and user-friendly
welding workflows.
In 2022, 2023, 2024, and the first nine months of 2024 and 2025, we sold 11,852 units,
18,952 units, 22,304 units, 18,248 units and 24,884 units of industrial robots, respectively. The
sustained growth in the sales volume of our industrial robots was primarily driven by (i)
increasing market recognition and acceptance of our products, reflecting their reliability and
performance across diverse applications, and (ii) our proactive efforts to expand market share,
strengthen customer relationships, and build a solid and diversified customer base, thereby
laying the foundation for long-term, sustainable growth.
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Process-Specific Software Packages
Our process-specific software packages are specialized application software that enable
robots to perform specific industrial tasks, such as arc welding, spot welding, palletizing and
bending, with high precision and efficiency. They include pre-programmed logic, sensor
integration, quality control routines and task-specific operator interfaces that directly enhance
a robot’s ability to execute complex operations in real-world production environments.
Embedding these packages directly into our robots strengthens our standard products’
technological edge while enabling precise solutions for key industries, serving as a powerful
driver for industrial upgrading.
Take arc welding as an example. Arc welding faces challenges such as inconsistent part
positioning, weld seam variation and frequent arc initiation failures, especially in large or
irregular structures like steel frameworks or rail transit components. Our arc welding software
package tackles these issues with an intelligent system developed from over a numerous on-site
cases. It eliminates manual calibration by combining a teaching-free API with multi-sensor
fusion, including laser seam positioning, arc tracking and contact-based positioning. These
technologies work together to automatically locate the weld path and adjust for deviations in
real time. To ensure weld quality, the system implements comprehensive fault-handling:
detecting arc initiation failures, arc loss, arc reignition welding, reignition with path retrace
and torch anti-collision protection, reducing downtime and repair costs. This software package
is highly compatible with major welding machine brands and supports techniques like laser
welding and multi-pattern weaving, making it suitable for both basic and high-end welding
tasks.
Our software packages are primarily sold as an integrated component of our industrial
robotics solutions. These packages are bundled with the robots based on the customer’s
intended application and delivered as part of a fully integrated system. For instance, if a
customer orders a robot for arc welding, the corresponding arc welding software package is
pre-installed and configured in the robot prior to shipment. Typically, we charge customers a
comprehensive bundled price that covers both hardware and software packages. In certain
cases, such as offline bending programming, we offer software packages as optional add-ons
with separate pricing to provide greater transparency into the pricing structure of our industrial
robotic solutions. This approach allows customers to better understand the relative value we
deliver through hardware and software components. However, despite being listed as optional,
customers have consistently opted for the bundled pricing.
Additionally, our software packages can also be sold as standalone products to customers
seeking to update their existing industrial robotics systems or to incorporate additional
functionalities. We generated revenue from selling software packages as standalone products
of RMB44.2 thousand, RMB71.2 thousand, RMB113.1 thousand, and RMB511.6 thousand in
2022, 2023, 2024 and the nine months ended September 30, 2025, respectively.
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In the future, we intend to continue offering software packages as an integrated part of
our robotic solutions while also exploring opportunities to sell software packages as standalone
products to diversify our revenue streams. Furthermore, we plan to develop and offer additional
process-specific software packages as standalone products to better address the diverse needs
of our customers.
Intelligent Manufacturing Systems
Our intelligent manufacturing systems combine our proprietary industrial robots and core
components into turnkey product lines to complete specific tasks with minimal human
intervention. They normally cover a complete manufacturing process. Their core lies in linking
multiple manufacturing steps, such as machining, assembly, testing, and packaging, to achieve
large-scale output from raw materials to finished products. These systems are adaptable across
a wide range of industries, including new energy, automotive, die casting and electrical
systems. Whether for battery module and pack assembly, aluminum part casting, or electronic
component integration, our manufacturing systems can be customized to meet diverse process
requirements and production goals.
Our intelligent manufacturing systems offer three core advantages:
 Synchronized control featuring high-speed and high-precision . We utilize high-end
multi-axis motion controllers to achieve a repeatability of positioning of ±0.05mm,
meaning the robot can return to a previously taught position with a maximum
deviation of only 0.05 mm. Our system can maintain a maximum synchronization
cycle time of 1.0 millisecond utilizing the EtherCA T communication protocol.
Paired with fast-response servo systems, our intelligent manufacturing systems
enable smooth acceleration and deceleration, reducing vibration and boosting
production efficiency.
 Functionalities supported by the integration of multiple technologies . Our systems
leverage machine vision for closed-loop control, achieving a positioning accuracy of
±0.1mm and a recognition rates of over 99%. For instance, vision-guided welding
tracks seam deviations as small as 0.1mm, and by combining vision and force
control, it prevents battery housing from being deformed during busbar welding. We
also implement digital twin simulation and virtual commissioning testing line to cut
on-site debugging time significantly. Predictive maintenance via built-in sensors and
edge computing further minimizes downtime.
 Cost and efficiency optimization . Core components of our intelligent manufacturing
systems include industrial robots, motion controllers and servo systems. We achieve
cost efficiency by manufacturing those core components in-house. Our localized
supply chain ensures rapid maintenance support within eight hours. Energy-efficient
robots and servo drives incorporate regenerative braking technology, which recovers
energy generated during braking and feeds it back into the system, also help cut total
energy consumption.
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In 2022, 2023, 2024, and the first nine months of 2024 and 2025, we completed 156, 154,
147, 113 and 122 orders of intelligent manufacturing systems, respectively.
Industrial Robot Workstations
Our industrial robot workstations typically consist of one or more robots, a worktable, a
control system, and peripheral supporting equipment. They are execution units responsible for
carrying out a specific step in the manufacturing process. Their focus lies in the execution of
a specific operation.
Our industrial robot workstations are widely used in applications such as welding,
palletizing, grinding and polishing. In 2022, 2023, 2024, and the first nine months of 2024 and
2025, we completed 344, 324, 266, 224 and 191 orders of industrial robot workstations,
respectively. The number of orders of industrial robot workstations declined notably in 2024,
primarily because industrial robot workstations are primarily used for medium- and thick-plate
welding, a process that is widely applied in the construction and machinery and heavy industry
sector. In 2024, however, this industry sector experienced a downturn.
Core Automation Components and Motion Control Systems
Our core automation components and motion control systems deliver the foundational
technologies powering intelligent manufacturing. It centers around three major product lines:
(i) motion control systems, (ii) servo systems, and (iii) motion control solutions. We also
manufacture drive-control systems for our own industrial robots. These offerings enable
high-precision, high-speed and adaptable industrial automation across various application
scenarios. Our revenue generated from sales of core automation components and motion
control systems was RMB1,025.5 million, RMB1,040.0 million, RMB976.3 million,
RMB767.1 million and RMB662.5 million in 2022, 2023, 2024 and the first nine months of
2024 and 2025, respectively, accounting for 26.4%, 22.3%, 24.3%, 22.7% and 17.4% of our
total revenue for the same periods, respectively.
The image below illustrates our product portfolio of motion control systems and servo
systems.
motion PLCs
PC-based controllers
 high-performance motion controllers
Motion
control
systems
high-end servo systems
general-purpose servo systems
 industry-specific servo systems
Servo
systems
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Motion Control Systems
Our motion control systems act as the “brain and nerves” of intelligent machinery,
enabling precise coordination of complex industrial movements. Motion control systems are
the core components of intelligent manufacturing systems. While intelligent manufacturing
systems aim to provide customers with comprehensive automated production line solutions,
motion control systems are precisely the core links that undertake key execution and precise
regulation functions. Widely used in electronics, lithium battery, semiconductor, packaging,
photovoltaics and general manufacturing, we offer three main types of motion control products,
including (i) PC-based controllers, (ii) high-performance motion controllers and (iii) motion
programmable logic controllers (“ PLCs ”).
PC-based controllers are built on industrial-grade personal computers (PC), combining
computing power and motion control in one compact, fanless and low-power unit. These
controllers can ensure ultra-fast data sharing between vision and motion control, maintaining
operation even if the PC crashes.
Our high-performance motion controllers support up to 128 axes with fast response times
down to 125 microseconds. Featuring flexible EtherNet or EtherCA T communication, they
deliver significantly enhanced read/write speeds and payload.
Our motion PLCs combine motion control and logic processing in a slim design. They
support multiple international programming standards, user-friendly features like tag-based
communication and Chinese-language variables, and comply with major global safety
certifications such as CE and UL. These controllers enable both high-speed operation and easy
integration into complex automation systems.
In 2022, 2023, 2024, and the first nine months of 2024 and 2025, we sold 8,859 units,
8,574 units, 9,237 units, 6,656 units and 5,517 units of motion control systems, respectively.
Servo Systems
A servo system acts like the “muscles” of a machine, controlling mechanical movement
to ensure it is fast, precise and smooth. Whether placing tiny components or carving metal
parts, servo systems guarantee accuracy and stability. Our servo systems are widely used in
semiconductor, precision machinery, printing, automotive, woodworking and metal fabrication.
We offer a full range of servo systems, including (i) high-end servo systems, (ii)
general-purpose servo systems and (iii) industry-specific servo systems, meeting diverse
industry needs. Our high-end servo systems are designed for demanding applications needing
high speed, precision, reliability and intelligence. They support advanced features like full
closed-loop control, energy-saving bus-sharing, smart diagnostics, long cable compatibility
and environmental durability. Our general-purpose servo systems feature flexible control
modes, strong overload capacity and intelligent tuning, making them easy to use and adaptable
across various setups. We also provide industry-specific servo systems, available in multiple
formats, from compact single-axis drives to integrated all-in-one units, supporting a wide range
of communication protocols such as EtherNet, ProfiNet and CAN.
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In 2022, 2023, 2024, and the first nine months of 2024 and 2025, we sold 123,238 units,
117,482 units, 120,951 units, 91,813 units and 85,767 units of servo systems, respectively.
Motion Control Solutions
Our motion control solutions integrate our motion control systems, servo systems,
electro-hydraulic systems, and industry-specific software into a complete package tailored to
particular industries, equipment, and application scenarios. Through these solutions, customers
can enhance the precision, efficiency, quality, and level of automation of their equipment and
production lines.
In 2022, 2023, 2024, and the first nine months of 2024 and 2025, we sold 33,387 units,
40,597 units, 40,934 units, 31,211 units and 33,822 units of motion control solutions,
respectively. The sustained growth in the sales volume of our motion control solutions was
primarily driven by (i) increasing market recognition and acceptance of our products, reflecting
their reliability and performance across diverse applications, and (ii) our proactive efforts to
expand market share, strengthen customer relationships, and build a solid and diversified
customer base.
Robot Drive-Control System
Our robot drive-control system is developed for our own industrial robots. Building this
critical system in-house ensures a stable and secure supply chain while keeping costs under
control.
The system includes three major components, namely (i) robot controllers, (ii) robot servo
systems and (iii) integrated robot drive-control unit. Robot controllers offer high flexibility
through advanced programming capabilities and an extensive function library for easy
customization. They support real-time multitasking, background operations and multi-robot
coordination, enabling seamless control from single robots to complex multi-axis systems.
Controllers also support user-defined commands, encrypted packaging and deeper integration
for our partners. Robot servo system is known for its high speed, compact design, strong
overload resistance and built-in protection, delivering power and safety in a small footprint.
Our integrated robot drive-control unit combines precise motion control and energy-efficiency
in one compact package. Supporting synchronized multi-axis control, intelligent tuning and
diagnostics, it maintains high integration and a space-saving design.
Rental Income
During the Track Record Period, we leased out certain office buildings that were not
planned for immediate self-use. This approach allowed us to optimize the utilization of our
existing resources, including properties, thereby minimizing idle or underutilized assets.
Simultaneously, it enabled us to diversify our revenue streams and generate an additional
source of income. In 2022, 2023, 2024 and the first nine months of 2024 and 2025, our rental
income amounted to RMB16.7 million, RMB17.1 million, RMB3.4 million, RMB2.6 million
and RMB2.8 million, respectively, accounting for 0.5%, 0.4%, 0.1%, 0.1% and 0.1% of our
total revenue for the same periods.
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CORE TECHNOLOGIES
We constantly redefine intelligent manufacturing by combining robot hardware with a
comprehensive digital ecosystem. Our expertise ranges from mechanical designs engineered
for optimal payload and precision to software solutions that enable remote monitoring,
predictive maintenance, and real-time process tuning. Leveraging an in-house control
architecture alongside a scalable IIoT framework, we guarantee each robot delivers stable and
reliable performance while equipping customers with actionable data insights.
Our General-Purpose Motion Control Technology
Advanced Servo Systems
We are committed to independently developing advanced servo systems, with full-stack
capabilities across the design and manufacturing of core components, including encoders,
servo motors, and servo drives. Our servo motors adopt a multi-objective design approach that
emphasizes reliability, high power density, high overload capacity, low torque ripple, which
ensures smooth and stable torque output for precise motion control, and energy efficiency. The
servo systems feature high bandwidth and rigidity, rapid dynamic response, precise tracking,
and intelligent auto-tuning capabilities, delivering overall performance on par with top-tier
international brands. We pioneered the development of domestic AC servo systems, breaking
the long-standing monopoly of foreign brands.
General-Purpose Motion Controller Technology
Our general-purpose motion controllers benefit from advancements in computer hardware
and system technologies, as well as strong support from a mature domestic software and
hardware supply chain. Building on Trio’s 30 years of deep expertise in motion control, we
integrate optimal system solutions and fully unlock the potential of our technologies to
maximize performance.
Our Robotic Technologies
Heavy-Duty Robot Dual-Drive Technology
RV reducers are high-precision gearboxes commonly used in industrial robots to reduce
motor speed and increase torque, enabling smooth and accurate joint movement. They are
essential components for heavy-duty robots, as they provide the high torque, precision and
durability needed to handle large loads with stable and accurate motion control. Domestic
robotics companies struggled with the high cost of RV reducers, and long lead times of more
than six months. This dependency stifled the development of domestic heavy-duty robots and
exposed manufacturers to severe supply chain risks. To break this stranglehold, we pioneered
a “dual-motor & dual-reducer” architecture, replacing a single imported high-power reducer
with two synchronized mid-power domestic reducers. Instead of relying on a single
high-performance reducer, our innovative parallel-drive design uses two synchronized drives
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to achieve a 1,000kg payload through precise torque distribution and motion coordination. By
adopting such an architecture, we can significantly reduce reliance on importing high-power
reducers from overseas suppliers, which are often associated with high costs, extended lead
times and uncertainties arising from evolving geopolitical dynamics.
Robot Functional Safety Technology
Navigating the complex landscape of international safety regulations, we became the first
Chinese robotics manufacturer to achieve TÜV Rheinland certification under ISO 10218, as
confirmed by Frost & Sullivan. Our system architecture meets the most demanding criteria,
executing emergency stops and limiting motion-path deviations, ensuring that every unit
complies with the strictest global benchmarks. This milestone has unlocked access to high-end
markets in the automotive and medical sectors, where safety tolerances admit no compromise.
More than a certification, it represents a strategic gateway that empowers Chinese
manufacturers to export advanced robotic solutions, eliminating previous regulatory barriers.
Core Robot Controller Technology
In the “brain” of the robot, our “next-generation” controller achieves a level of
performance comparable to foreign brand systems in both dynamic precision and collaborative
efficiency. Built on an industrial high-level language, and an open and modular architecture,
it integrates refined dynamics algorithms, vibration suppression, and flexible model calibration
to boost cycle speed and positioning accuracy. A single controller can synchronize four robots
at once, setting a new domestic benchmark. Already powering our full robot lineup, this
controller breaks the long-standing dependence on foreign control systems and paves the way
for truly home-grown, mission-critical automation.
Our Digital Platform Technologies
To break through the efficiency bottlenecks of traditional industrial maintenance and
unlock the full value of equipment data, we have built a dual-track service model centered on
our E-Noesis and E-Care platforms. While the performance of our industrial robots does not
depend on connection to these platforms, access to E-Noesis and E-Care platforms enables both
our engineers and those of our customers to monitor robot status, diagnose issues, and respond
to alarms in real time through a cloud-based interface. Customers may choose to purchase these
platform services as an optional add-on at the time of robot purchase. Once selected, the
service fees are bundled together with the sales price of robots as a package.
E-Noesis Platform
E-Noesis platform is our digital cloud platform. As our intelligence hub, E-Noesis
platform harnesses big data and digital-twin technology to manage robots throughout their
lifecycle. By unifying operational metrics, process parameters and digital information, it
dissolves shop-floor data silos. Interactive dashboards surface equipment utilization rate,
energy consumption and other key indicators, guiding production scheduling and strategic
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planning with actionable insights. Deep integration between operational technology and
information technology drives the leap from basic automation to full digitization, while
embedded AI tools for solution selection, programming assistance and a growing process
library lower the learning curve and foster smooth collaboration with simulation and
maintenance systems. Built on a modern cloud-based architecture, E-Noesis platform is
designed to support a broad user base, including end users, distributors, and technical
personnel. This platform brings together key capabilities such as IoT-enabled robot monitoring,
workstation-level manufacturing execution, a process knowledge base, and AI-driven tools for
accessing product information and assisting with robot programming — delivering end-to-end
digital lifecycle management for industrial robots.
For operations and maintenance, E-Noesis platform offers a full suite of advanced
features, including real-time health monitoring, fault diagnostics, remote servicing, log
management, data acquisition, and over-the-air (OTA) updates. These tools enable users to
monitor robot performance in real time and efficiently address issues as they arise, supporting
everything from routine checks to complex troubleshooting.
Case study: welding workshop operations with E-Noesis platform
Even with traditional information systems, production often faces delayed anomaly
detection, long downtime, high material waste, and fragmented data that limits decision-
making. Monitoring relies on manual inspections, fault resolution is slow, and workshop
operations require on-site checks. By implementing E-Noesis platform, customers can monitor
robot performance and production line efficiency in real time, optimize scheduling, and
precisely track material consumption. Real-time alerts and trend analysis enable early detection
of potential equipment issues, supporting preventive maintenance and reducing unplanned
downtime. Digital twin technology provides full workshop visibility remotely, while historical
and real-time data generates measurable performance indicators, supporting lean production
and continuous improvement.
As of the Latest Practicable Date, 11,446 of our industrial robots interfaced with our
E-Noesis platform.
E-Care Platform
E-Care platform is our remote maintenance platform that combines IoT connectivity and
cloud computing to deliver end-to-end remote support across a machine’s entire lifecycle.
Engineers can diagnose alarms in real time, perform deep log analysis, troubleshoot faults
remotely, and access equipment without on-site inspection. Integrated over-the-air updates and
continuous sensor monitoring dramatically shorten response times. In practice, E-Care
platform has boosted fault-resolution efficiency by 60% and cut unplanned downtime losses by
over 30%, fundamentally overturning the high-cost, on-site service model.
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Together, the E-Noesis platform and E-Care platform not only address the urgent need for
faster and more efficient maintenance but also transform data into strategic assets, delivering
threefold value for our customers: enhanced productivity, optimized costs, and elevated
operational management.
Our AI Technologies
Our Architecture for Robotics-based AI
We have designed a control system architecture to ensure robots can integrate with AI
technologies smoothly. The architecture is built on a distributed framework, which means it can
be deployed in different ways depending on customer needs, whether on local servers, at the
edge of the network for low-latency control, or in the cloud for large-scale AI model training.
This flexibility gives customers control over both performance and data security.
At the core of this system is a virtual controller engine, which allows engineers to
simulate robot behavior in a digital environment before moving to the physical machine. Paired
with AI-driven parameter tuning, customers can run visual simulations, train AI models, and
adjust robot settings virtually. This significantly reduces the need for time-consuming and
costly trial-and-error debugging on the factory floor, while also enabling faster iteration and
deployment.
AI Combined with Robotics
AI technologies are deeply embedded in our industrial robots. By integrating large
language models, multimodal sensors, machine vision, voice recognition, and advanced
learning algorithms, our robots can do more than follow pre-set instructions. They can
recognize different environments, adapt their behavior, and continuously improve their
performance through learning.
For example, a robot equipped with machine vision and reinforcement learning can learn
to handle parts of varying sizes and shapes without human intervention. V oice interaction
allows operators to give quick instructions without programming, while multimodal sensing
enables the robot to understand its surroundings through sight, sound, and touch. Together,
these features make robots more intelligent, easier to operate, and capable of performing
complex tasks that involve multiple variables and steps, such as assembling irregular
components or adjusting to real-time changes in a production line.
Expanding Industrial Applications
As we already have a large installed base of robots in the market, we’ve accumulated a
wealth of operational data and real-world case experience. This forms the backbone of our
industrial knowledge graph, a structured system that connects process data, AI-driven
operations, programming know-how, and tuning experience. By leveraging this knowledge
graph, our robots can handle new applications more effectively and customers can benefit from
best practices that have been proven across industries.
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To further simplify usage of our industrial robots, we have developed a vision-based,
teaching-free intelligent system. This system eliminates the need for step-by-step manual
programming. Instead, robots use computer vision to understand tasks and AI to learn the right
actions in real time. Combined with no-code programming tools, reinforcement learning, and
large-scale vertical AI models, this makes robots suitable for highly flexible and challenging
tasks — such as welding irregular joints, grinding parts of varying shapes, or assembling
small-batch customized products.
These innovations open the door to wider adoption of robotics in industries where
automation was previously too difficult or costly to implement. Looking forward, our
robotics-based AI technologies will continue to drive the shift from traditional automation to
intelligent automation, enabling faster, smarter, and more scalable deployment across
manufacturing and beyond.
RESEARCH AND DEVELOPMENT
R&D Resources
We are committed to building a world-class R&D team that supports our long-term
growth and technological leadership. Centered in Nanjing, our R&D operations integrate
global resources from Germany, the United Kingdom, the United States and other innovation
hubs. As of September 30, 2025, we had a total of 1,029 R&D personnel, bring together a
balanced mix of experience, enthusiasm and creativity.
Our in-house R&D team is led by our Product Competitiveness Center (ɢʕː),
which oversees three core divisions: the Institute of Technology (Ӻ৫), the R&D Center
(೯ʕː), and Individual Product Lines (ᇞ). The Institute of Technology is responsible
for our mid-to-long-term technology roadmap and the forward-looking advancement of our
core capabilities. The R&D Center focuses on short-to-mid-term technology planning and
execution, ensuring continuous enhancements to product competitiveness. Our Individual
Product Line teams are tasked with product-level innovation and development, particularly in
the fields of industrial robotics, motion control and sheet metal fabrication, aligning closely
with market demand and operational implementation.
Beyond internal efforts, we actively collaborate with leading academic institutions and
research organizations, both in China and abroad, to stay at the forefront of technological
advancement. These partnerships not only enhance our access to cutting-edge knowledge but
also expand the scope and depth of our innovation ecosystem. We usually collaborate with
these institutions on a project basis. The key terms of our R&D collaboration agreements
typically include:
 Term. The term of the R&D collaboration agreements typically ranges from a few
months to 25 months, depending on the nature of R&D activities involved.
 Payment . We generally make payments in installments based on the achievement of
specific R&D milestones.
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 Intellectual Property . In most cases, we and our partners jointly own the intellectual
properties developed through collaborations. However, we typically retain the
exclusive right to commercialize such intellectual property and are not obligated to
share profits or pay fees to our partners. For certain R&D outcomes that are
considered critical and commercially significant, we specify in the agreements that
we hold exclusive ownership of the relevant intellectual property rights.
 Confidentiality . Both parties are obligated to maintain the confidentiality of
information related to the outsourced R&D activities.
We continue to invest substantial capital in R&D and innovation. Our research and
development expenses were RMB307.6 million, RMB388.5 million, RMB442.2 million,
RMB306.6 million and RMB318.5 million in 2022, 2023, 2024 and the first nine months of
2024 and 2025, respectively, and our investment in R&D activities which was capitalized
amounted to RMB94.0 million, RMB115.6 million, RMB60.7 million, RMB43.0 million and
RMB35.7 million for the same periods. Our total R&D expenditure (including both expenses
and capitalized investment) accounted for approximately 10.3%, 10.8%, 12.5%, 10.4% and
9.3% of our total revenue in 2022, 2023, 2024 and the first nine months of 2024 and 2025,
respectively.
R&D Philosophy and Process
We pursue an innovation-led R&D strategy focused on independent development,
supported by selective external collaboration. Guided by the principle of “core technology
independence” and “application-driven innovation,” we emphasize both technological depth
and industry relevance.
Our development process follows a streamlined and platform-based approach built on the
Integrated Product Development (IPD) methodology. This process consists of six stages,
namely initiation, concept, planning, development, validation, and release, designed to ensure
alignment across departments from idea to market. In early phases, cross-functional teams
jointly assess product feasibility, supply chain risks, and manufacturing requirements. As
development progresses, we refine product specifications, build and test prototypes, and
incorporate supplier and production feedback in real time. Final stages focus on scaling up for
mass production, verifying quality and consistency and continuously improving the product
based on market feedback. This end-to-end process, supported by collaborative mechanisms
and digital tools, enables us to manage complexity, reduce time-to-market, and maintain high
standards in quality and innovation.
R&D Accomplishments and Roadmap
Our R&D capabilities have been widely recognized by both government authorities and
industry associations. Notably, we were awarded the First Prize for Scientific and
Technological Progress by the Chinese Association of Automation (ҦආӉ
ᆤɓഃᆤ) in 2023. We also received the Second Prize for Industrial Technological Progress
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(ҦආӉᆤɚഃᆤ) from the China Machinery Industry Federation and the Chinese
Mechanical Engineering Society in both 2022 and 2023. In addition, we have received multiple
awards from provincial governments in China in recognition of our achievements in science
and technology, reflecting the broad recognition of our innovation capacity. During the Track
Record Period, we led or participated in four projects supervised by MIIT, three projects
supervised by MOST and one project supervised by NDRC. In addition, over the years, we
have built a portfolio of intellectual property rights and core technologies, which serve as
strong technical moats and lay a solid foundation for the Company’s long-term
competitiveness. See “— Core Technologies” and “— Intellectual Property” and for details.
Looking ahead, we intend to focus our R&D efforts on high-speed and high-precision
motion control, intelligent robotics algorithms and the development of industry-specific
software kits. We will also continue to advance the application of industrial robots and motion
control technologies in high-growth downstream sectors such as new energy vehicles (NEV)
and semiconductors. For example, continuous stamping of large outer panels in NEV
production requires extreme precision from industrial robots to effectively manage material
deformation and prevent surface defects. In semiconductor manufacturing, wafer handling
demands nanometer-level vibration suppression and ultra-clean environments, placing
stringent requirements on automation and control systems. We believe these technical
challenges, coupled with increasing domestic substitution trends, present a unique opportunity
for us to deepen our technological leadership.
INTELLECTUAL PROPERTY
We regard our intellectual property, spanning patents, software copyrights, trademarks,
trade secrets and proprietary technologies, as a core strategic asset and a key driver of our
long-term competitiveness. Our ability to innovate, differentiate our offerings, and sustain
business growth relies heavily on effectively securing, managing, and enforcing our
intellectual property rights. We are recognized as a National Key Enterprise for Intellectual
Property Strength (ᗆପᛆᎴැΆุ) by China National Intellectual Property
Administration, in acknowledgment of our intellectual property capabilities and systematic IP
management.
As of the Latest Practicable Date, we had (i) 619 registered patents; (ii) 80 registered
trademarks; (iii) 25 registered domain names; and (iv) 469 registered copyrights in China. We
also register and manage key intellectual property rights in overseas jurisdictions in order to
safeguard our rights and support overseas business activities.
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We attach great importance to the protection and management of our intellectual property,
which is critical to maintaining our technological edge and business competitiveness. In
addition to relying on relevant laws and regulations, we have established a comprehensive
internal intellectual property protection framework to mitigate risks of unauthorized use and
infringement by third parties:
 Robust Internal Safeguards . We have established a comprehensive set of internal
measures designed to protect our proprietary information. These include codes of
conduct for employees, tiered access permissions, clearly defined user roles and
stringent control over third-party system entry.
 Employee Responsibility Framework . All team members are required to sign
legally binding agreements that uphold confidentiality, intellectual property
integrity and post-employment restrictions. These obligations are emphasized
through ongoing education and awareness programs, ensuring employees remain
vigilant in protecting sensitive company assets.
 Binding Third-Party Agreements . Our contracts with external stakeholders,
including customers, suppliers, and partners, clearly articulates confidentiality
obligations, defined ownership of intellectual property rights, and enforceable
remedies for breaches, fostering mutual trust and legal clarity.
 Strategic IP Portfolio Management. We actively invest in securing intellectual
property rights for our key innovations. By aligning legal and technical teams, we
ensure timely and targeted patent applications across jurisdictions. This forward-
looking approach strengthens our global IP footprint, deters infringement, and
amplifies the commercial value of our proprietary technologies.
Despite our precautions, however, third parties may obtain and use our intellectual
property without our consent. See “Risk Factors — Risks Relating to Our Industry and
Business — We may not be able to adequately protect our intellectual property rights or prevent
third-party infringements, which could adversely affect our business, competitiveness and
financial condition.” During the Track Record Period and up until the Latest Practicable Date,
we were not involved in any legal proceedings in relation to infringement of any intellectual
property rights which would have any material adverse impacts on our business, financial
condition and results of operations.
MANUFACTURING
We have established a robust and scalable production system designed to ensure full
control over key components and maintain operational independence. By integrating advanced
supply chain management practices across quality, delivery, cost and logistics, we consistently
deliver high-quality products with speed and cost-efficiency. Depending on product delivery
requirements, we adopt a hybrid production strategy combining make-to-order and make-to-
stock models to ensure timely fulfillment and operational flexibility.
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Manufacturing Process
Our production process primarily includes the production of (i) standardized products,
comprising industrial robots, motors and other electronic devices, and (ii) customized products,
referring to our intelligent manufacturing systems.
Standardized Products
Industrial robots
The production of industrial robots involves a complex and highly coordinated sequence
of steps to ensure quality, functionality, and durability. The diagram below outlines the full
manufacturing workflow, from raw material inspection to final packaging.
Preparing the
machine for
storage and shipment
Packaging &
Warehousing
Ensuring accuracy and
functionality
Calibration &
Absolute
Accuracy Test
Allowing the machine to
stabilize and relieve
pressure
System Test
Testing the machine’s
ability to withstand
pressure
High V olume
Isolation Test
Adding necessary
fluids and
electrical connections
Oil Filling &
Wiring
Material
Control
Ensuring quality and
availability of materials
Creating individual
parts
for assembly
Components
Manufacturing
Assembling all
parts into
a functional machine
Complete
Machine
Assembly
Verifying the
machine’s
airtight seal
Air Leakage
Test
Applying
protective and
aesthetic coatings
Body
Painting
The process begins with careful inspection and control of materials to ensure only
high-quality inputs move forward. These materials are then shaped and crafted into essential
parts, which are later brought together to form a complete machine. Once assembled, the
machine is checked for any leaks or sealing issues before receiving its outer coatings for
protection and appearance. It’s then fitted with fluids and wiring needed for operation.
Afterward, it undergoes testing to confirm it can endure high-pressure conditions. A
stabilization period follows, allowing the system to settle and safely release built-up pressure.
Final adjustments and checks are made to verify performance and accuracy. At the end of this
cycle, the machine is safely stored and prepared for delivery, ready to serve in its designated
industrial role.
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Motors
Motor manufacturing constitutes a methodical integration of precision assembly
processes and multi-stage quality verification. The diagram below illustrates key steps from
core component preparation covering rotor and stator fabrication, integrated assembly
involving alignment and joining operations, and final validation through electrical and
mechanical testing.
Cleaning Core-to-shaft
Press-fitting
Magnet
Bonding Magnetizing Rotor
Wrapping
Dynamic
Balancing
Rotor
Assembly
Coil winding Coil end
joining
Laser
Welding
PCB
soldering Testing
Heating Shrink fit of Housing
Wiring and Terminal Assembly
Testing
Potting
Rotor & Stator
Assembly
Brake wiring
Soldering
Geometric Tolerance &
safety compliance
Inspection
Encode
Installation
Encode
calibration
Firmware Programming
&Phase Alignment
Loading Test
Running and
Runout test
Air leakage
Test
Shaft Key
assembly
Appearance
Inspection
Packing
The motor production flow initiates with core component fabrication, where rotor
processing includes ultrasonic cleaning of shaft parts, magnet attachment using structural
adhesives, magnetization, surface winding for reinforcement and dynamic balancing
adjustment. Simultaneously, stator manufacturing involves winding wires onto segmented iron
cores with insulation placement, temporary fixturing, and seamless welding or weld-free
joining. The assembly phase progresses through rotor-stator alignment via servo pressing,
housing integration through thermal shrink-fitting techniques, printed circuit board (PCB)
soldering for circuit formation and encoder installation with calibration. Final validation
encompasses dielectric strength testing, geometric tolerance verification, runout and
airtightness assessment, and protective epoxy resin potting, a process of encasing electronic
components in epoxy resin to safeguard them against moisture, dust, and mechanical stress
during operation. Quality monitoring for abnormal noise, electrical performance deviations,
and current irregularities is systematically implemented across all stages prior to final visual
inspection and packaging.
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Electronic Devices
The production of electronic devices progresses systematically from component-level
processing to final functional verification, ensuring reliability through embedded quality
checks at critical stages. The diagram below illustrates our production process of electronic
devices.
Solder Paste
Inspection
Surface Mount
Technology Placement Reflow Soldering
Automated
Optical Inspection
(AOI)
Outer Case
Assembly
Functional
Testing Burn-in Test Functional
Testing
Packaging/
Shipping
Solder Paste
Printing
PCBA Assembly
Radiation Fin
Assembly In-Circuit Testing De-paneling Wave Soldering DIP
The production flow starts with solder paste application onto printed circuit boards,
followed immediately by solder paste inspection to verify deposition quality. Surface-mount
technology placement then positions microelectronic components onto the boards before
reflow soldering thermally bonds these elements. Subsequent through-hole assembly involves
dual in-line package (DIP) insertion and wave soldering for robust electrical connections.
Individual boards are separated via de-paneling, then subjected to in-circuit testing to validate
electrical integrity. The process advances to mechanical integration through radiation fin
assembly, a process of attaching heat-dissipating fins to a component to improve cooling, and
final printed circuit board assembly (PCBA) consolidation. Outer case assembly encloses the
functional units, succeeded by an initial functional test to confirm baseline operation. Burn-in
testing stresses the devices under sustained operational loads, followed by a secondary
functional test to verify post-stress performance. Conforming units proceed to protective
packaging for distribution.
Customized Intelligent Manufacturing Systems
The manufacturing process of our customized intelligent manufacturing systems consists
of six main stages, which typically takes three to six months from start to finish. The key
manufacturing steps for our intelligent manufacturing systems consist of mechanical design,
component fabrication, on-site assembly and integration, system commissioning and
validation, controlled disassembly and packaging for transport, and final installation and
commissioning at the customer’s facility.
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Manufacturing Facilities
Existing Manufacturing Capabilities
As of the Latest Practicable Date, we operated seven major manufacturing bases
worldwide, details of which are set out below.
Name of manufacturing bases
Location of
manufacturing
bases Product type Site area
Land/
Property
right
(sq.m.)
Jiyin Avenue Manufacturing Base /H1118/H1118/H1118Nanjing, Jiangsu
Province, the
PRC
Industrial robots 120,220.17 Self-owned
Shuige Road Manufacturing Base /H1118/H1118/H1118Nanjing, Jiangsu
Province, the
PRC
Core automation
components and
motion control
systems
43,332.48 Self-owned
Y anhu Road Manufacturing Base /H1118/H1118/H1118/H1118Nanjing, Jiangsu
Province, the
PRC
Machining of robot
castings
22,946.2 Self-owned
Gaochun Manufacturing Base /H1118/H1118/H1118/H1118/H1118/H1118Nanjing, Jiangsu
Province, the
PRC
Intelligent
manufacturing
systems
99,096.57 Self-owned
Jingmen Manufacturing Base /H1118/H1118/H1118/H1118/H1118/H1118Jingmen, Hubei
Province, the
PRC
Industrial robots
and intelligent
manufacturing
systems
105,332.9 Self-owned
Haiger Manufacturing Base /H1118/H1118/H1118/H1118/H1118/H1118/H1118Haiger, Germany Welding robots
and welding
automation
systems
55,575 Self-owned
Kronach Manufacturing Base /H1118/H1118/H1118/H1118/H1118/H1118Kronach, Germany Intelligent
manufacturing
systems
13,284.16 Leased
We believe that our global and vertically integrated manufacturing layout enhances our
ability to serve diverse customer needs, supports localized service delivery, and enables us to
scale production in alignment with market demand.
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The following table sets forth the production capacity and capacity utilization rate of our manufacturing bases for the periods indicated.
Production capacity Production volume
Production capacity
utilization rate (1)
For the year ended
December 31,
For the
nine months
ended
September 30,
For the year ended
December 31,
For the
nine months
ended
September 30,
For the year ended
December 31,
For the
nine months
ended
September 30,
Business line 2022 2023 2024 2025 2022 2023 2024 2025 2022 2023 2024 2025
(units in thousand) (units in thousand) (%)
Industrial robots and intelligent
manufacturing systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815.8 23.9 32.5 25.7 13.9 22.8 28.7 21.2 87.6 95.3 88.3 82.8
Core automation components and motion
control systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118306.9 361.7 396.5 296.8 252.3 294.2 324.5 243.0 82.2 81.3 81.9 81.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118322.7 385.6 429.0 322.5 266.1 316.9 353.2 264.2 82.5 82.2 82.3 81.9
Note:
(1) Utilization rate is calculated by dividing production volume by designed production capacity, multiplied by 100%.
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Future Manufacturing Capabilities
We are able to expand our manufacturing capacity as we see fit to support long-term
growth. In Europe, we are building a new facility in Poland, which is expected to enhance our
local manufacturing capabilities and better serve the regional market.
Location of
manufacturing
bases Product type
Designed annual
production
capacity
Expected
commissioning
time
Estimated capital
commitments Source of funding
Blonie, Poland /H1118/H1118Industrial robots
and welding
automation
systems
15,000 units June, 2026 EUR30.0 million Internal financial
resources and the
proceeds from
the Global
Offering
We may face a number of challenges in utilizing the aforementioned manufacturing bases,
which are inevitably subject to risks associated with our business operations and market
conditions from time to time and may be adjusted accordingly for our best interests. See “Risk
Factors — Risks Relating to Our Industry and Business — We face operational, capacity and
safety risks related to our production facilities, which may adversely affect our business and
results of operations.”
OUR SUPPLIERS
Our Supply Chain Management
We source key components and equipment critical to our production. In 2022, 2023, 2024
and the first nine months of 2024 and 2025, our costs of raw materials and components were
RMB2,180.8 million, RMB2,719.6 million, RMB2,347.7 million, RMB1,963.0 million and
RMB2,279.8 million, respectively, accounting for 83.7%, 85.1%, 81.7%, 83.0% and 83.4% of
cost of sales for the same periods, respectively. We procure a broad range of raw materials and
components, with no single category representing a significant proportion of our total costs of
raw materials and components. Our procurement primarily includes electronic control systems,
reducers, motors and other electronic devices, and costs for procuring these raw materials
amounted to RMB639.4 million, RMB822.5 million, RMB832.2 million, RMB622.7 million
and RMB618.9 million in 2022, 2023, 2024 and the first nine months of 2024 and 2025,
respectively. Furthermore, we procure large, non-standard fabricated components for
integration into our intelligent manufacturing systems to support various functionalities. To
meet the diverse and specific requirements of our customers, we frequently utilize non-
standard fabricated components, which are customized to enable the integration of various
functionalities into our intelligent manufacturing systems. For example, in intelligent
manufacturing systems supplied to customers in the new energy sector, we procure specialized
dosing furnaces. These furnaces are integrated into the systems to facilitate the precise
dispensing of molten materials in controlled quantities, ensuring the systems fulfill the unique
production needs of this sector.
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We work with a broad base of high-quality suppliers. While we have established
procurement channels with certain overseas suppliers, our supplier base remains primarily
concentrated in Chinese Mainland. We also source certain components from overseas. For
example, we import certain electronic parts from the United States. To mitigate potential
supply chain risks stemming from geopolitical tensions, we continuously assess and adapt our
supply chain strategy, actively test alternative products, and accelerate the localization and
domestic substitution of imported materials to enhance autonomy and ensure greater supply
chain resilience. Our supplier relationships are managed through a full lifecycle approach
encompassing four key stages: qualification, evaluation & rating, tiered management, and
replacement. Supplier qualification follows a multi-stage vetting process. Initial sample
approval must be succeeded by trial production period. Only suppliers demonstrating
consistent quality and reliable delivery performance throughout this trial phase are granted
formal approved status. Ongoing supplier performance is actively monitored through monthly
evaluations. These assessments result in performance ratings that determine supplier tier
levels. We maintain a dynamic supplier base. Those receive consistently low ratings face
reduced order volumes and are systematically phased out. During the Track Record Period and
up to the Latest Practicable Date, we did not experience any significant return of supplies that
did not meet our requirements, nor did we suffer any significant losses or damages caused by
defective supplies.
We also maintain active communications with our suppliers to avoid potential supply
disruptions. During the Track Record Period and up to the Latest Practicable Date, we did not
experience any material shortages or delays in procuring supplies. In addition, we strategically
enter into long-term collaboration agreements with major suppliers to secure their favorable
pricing. During the Track Record Period and up to the Latest Practicable Date, we did not
experience any significant fluctuations in the prices of our purchases which had a material
adverse effect on our results of operations.
Underpinning our entire procurement strategy is a commitment to responsible sourcing.
We integrate ESG factors into both our supplier qualification criteria and ongoing management
processes. This commitment drives our promotion of green procurement initiatives. We
actively collaborate with our suppliers to uphold shared social responsibilities, working
collectively to build a sustainable and responsible supply chain ecosystem. See “—
Environmental, Social and Corporate Governance” for details.
Our purchases from the five largest suppliers in each period during the Track Record
Period accounted for 15.0%, 19.2%, 18.3% and 19.0% of our total purchases in 2022, 2023,
2024 and the first nine months of 2025, respectively. For the same periods, purchases from our
largest supplier in each period during the Track Record Period accounted for 4.6%, 5.5%, 7.0%
and 8.6% of our total purchases, respectively. All of our five largest suppliers in each period
during the Track Record Period are Independent Third Parties. To the best of the knowledge of
our Directors, none of our Directors, their respective associates or any shareholder who owns
more than 5% of our issued share capital had any interest in any of our five largest suppliers
in each period during the Track Record Period.
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Procurement Agreements
We typically enter into framework procurement agreements with our suppliers, stipulating
general terms of cooperation, and we execute procurement through specific orders under these
agreements. Below are the typically key terms of our framework procurement agreements:
 Term. We typically enter into agreements with our suppliers with a term of one to
three years.
 Orders . Each order sets out the product type, price, specifications, quantity, delivery
schedule, and payment terms.
 Supply stability . Suppliers undertake not to discontinue the production or sale of
contracted products without our prior written consent. Should they intend to cease
production or sales, they are required to provide at least six months’ advance notice
and fulfill all outstanding orders unconditionally.
 Pricing . Suppliers represent and warrant that the prices offered to us are no less
favorable than those extended to any third parties under similar conditions.
 Credit terms . We are generally granted credit terms of up to four months.
 Inspection and returns . We conduct product inspections within a designated
timeframe after delivery. We reserve the right to return the products that fail to meet
agreed quality standards. In such cases, the supplier is obligated to provide
appropriate remedies, including return and/or replacement.
 Warranty and compliance . Unless otherwise specified in an order, the warranty
period is typically no less than 12 months. For imported items, suppliers must ensure
full compliance with all applicable import and export control laws and regulations.
 Termination . The framework procurement agreements are generally terminated upon
expiration of the agreed term but may be terminated earlier under certain specified
conditions.
OUR CUSTOMERS
During the Track Record Period, we generated revenue primarily from the sales of
industrial robots and intelligent manufacturing systems, and core automation components and
motion control systems. We have built a broad customer base both in China and overseas. See
“Financial Information — Description of Key Items of Consolidated Statements of Profit or
Loss — Revenue — Revenue by Geographical Region” for a breakdown of our revenue by
domestic and overseas market. Our customers mainly comprise (i) customers from our direct
sales channel, including manufacturers in automotive, photovoltaic, lithium battery,
electronics, metal processing and construction materials, and (ii) our distributors.
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Our Five Largest Customers
The following tables set forth certain information of our five largest customers (on a
grouped basis) in each period during the Track Record Period.
Nine months ended September 30, 2025
Customer
Major
products/services
provided by us Payment method Credit term Revenue
As a
percentage
of our total
revenue
Length of
relationship
with us
(RMB’000) (%)
Customer A (1) /H1118/H1118Industrial robotics
products
Commercial bills 30 to 180
days
684,963 18.0 Since 2022
Customer B (2) /H1118/H1118Intelligent
manufacturing
systems and
industrial robotics
products
Bank bills 30 to 120
days
510,377 13.4 Since 2021
Customer K
(11)/H1118/H1118Intelligent
manufacturing
systems
Wire transfer 60 days 90,440 2.4 More than
10 years
Customer M
(13) /H1118Intelligent
manufacturing
systems and
industrial robotics
products
Wire transfer 30 to 180
days
68,124 1.8 Since 2021
Customer F /H1118/H1118/H1118Industrial robotics
products and core
automation
components
Wire transfer and
bank bills
60 to 120
days
59,900 1.6 Since 2021
1,413,804 37.2
Y ear Ended December 31, 2024
Customer
Major
products/services
provided by us Payment method Credit term Revenue
As a
percentage
of our total
revenue
Length of
relationship
with us
(RMB’000) (%)
Customer A (1) /H1118/H1118Industrial robotics
products
Commercial bills 30 to 180
days
376,600 9.4 Since 2022
Customer B (2) /H1118/H1118Intelligent
manufacturing
systems and
industrial robotics
products
Bank bills 90 - 120
days
310,524 7.7 Since 2021
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Customer
Major
products/services
provided by us Payment method Credit term Revenue
As a
percentage
of our total
revenue
Length of
relationship
with us
(RMB’000) (%)
Customer C (3) /H1118/H1118Intelligent
manufacturing
systems
Wire transfer 90 days 164,103 4.1 More than 10
years
Customer D
(4) /H1118/H1118Core automation
components
Wire transfer and
bank bills
90 days 97,246 2.4 More than 10
years
Customer E (5) /H1118/H1118Welding robots and
solutions
Wire transfer 60 days for
welding
solutions
30 days for
welding
robots
58,376 1.5 More than 10
years
1,006,849 25.1
Y ear Ended December 31, 2023
Customer
Major
products/services
provided by us Payment method Credit term Revenue
As a
percentage
of our total
revenue
Length of
relationship
with us
(RMB’000) (%)
Customer A (1) /H1118/H1118Industrial robotics
products
Commercial bills 30 to 180
days
376,122 8.1 Since 2022
Customer B (2) /H1118/H1118Intelligent
manufacturing
systems and
industrial robotics
products
Wire transfer and
bank bills
90 days 150,219 3.2 Since 2021
Customer F
(6) /H1118/H1118Industrial robotics
products and core
automation
components
Wire transfer and
bank bills
60 to 150
days
148,725 3.2 Since 2021
Customer G
(7) /H1118/H1118Industrial robotics
products
Wire transfer and
bank bills
120 to 180
days
120,926 2.6 Since 2017
Customer H (8) /H1118/H1118Welding robots and
solutions
Bank bills 60 days 119,309 2.6 Since 2022
915,301 19.7
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Y ear Ended December 31, 2022
Customer
Major
products/services
provided by us Payment method Credit term Revenue
As a
percentage
of our total
revenue
Length of
relationship
with us
(RMB’000) (%)
Customer B (2) /H1118/H1118Intelligent
manufacturing
systems and
industrial robotics
products
Wire transfer and
bank bills
45 days 213,823 5.5 Since 2021
Customer A
(1) /H1118/H1118Industrial robotics
products
Commercial bills 60 days to
180 days
160,144 4.1 Since 2022
Customer I (9) /H1118/H1118Welding robots and
solutions
Wire transfer 90 days 96,284 2.5 Since 2018
Customer G (7) /H1118/H1118Industrial robotics
products
Wire transfer and
bank bills
90 to 180
days
83,459 2.2 Since 2017
Customer D (4) /H1118/H1118Core automation
components
Wire transfer and
bank bills
30 to 90 days 83,432 2.1 More than 10
years
637,142 16.4
Notes:
(1) Founded in 1995 and headquartered in Guangdong Province, China, Customer A primarily engaged in the
manufacturing of new energy passenger vehicles with a registered capital of RMB3,039.1 million, and is a
company listed on the Stock Exchange and the Shenzhen Stock Exchange.
(2) Founded in 2011 and headquartered in Fujian Province, China, Customer B primarily engaged in the
manufacturing of lithium battery with a registered capital of RMB4,403.4 million, and is a company listed on
the Stock Exchange and the Shenzhen Stock Exchange.
(3) Founded in 2005 and headquartered in France, Customer C primarily engaged in the design, development,
production, and sales of automotive components, systems, and modules, and is a world-leading automotive
parts supplier, providing components to major global automakers.
(4) Founded in 2000 and headquartered in Jiangsu Province, China, Customer D primarily engaged in the
manufacturing of metal forming machine tools with a registered capital of RMB549.8 million, and is a
company listed on the Shenzhen Stock Exchange.
(5) Founded in 1981 and headquartered in Germany, Customer E primarily engaged in the manufacturing of
welding equipment and welding consumables.
(6) Founded in 2020 and headquartered in Jiangsu Province, China, Customer F engaged in the manufacturing of
electronics process products with a registered capital of RMB10.0 million.
(7) Founded in 1993 and headquartered in Hubei Province, China, Customer G engaged in the manufacturing of
automation equipment with a registered capital of RMB5.0 million and is a company listed on the Shenzhen
Stock Exchange.
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(8) Founded in 1997 and headquartered in Shandong Province, China, Customer H engaged in coal mining and
washing with a registered capital of RMB10.0 billion, and is a company listed on the Stock Exchange and the
Shanghai Stock Exchange.
(9) Founded in 2004 and headquartered in Liaoning Province, China, Customer I engaged in the manufacturing of
specialized equipment with a registered capital of RMB2,918.1 million, and is a subsidiary of a company listed
on the Stock Exchange.
(10) Founded in 2013 and headquartered in Romania, Customer J primarily engaged in the design and
manufacturing of powertrain and electrification solutions for the automotive industry, and is a subsidiary of
company listed on the NASDAQ.
(11) Founded in 1953 and headquartered in the United States, Customer K primarily engaged in the manufacturing
a diverse range of electronic components, such as microswitches, automotive switches and rocker switches.
(12) Founded in 2022 and headquartered in Bulgaria, Customer L primarily engaged in precision engineering and
industrial solutions for the automotive and machinery industries.
(13) Founded in 1980 and headquartered in Shanxi Province, China, Customer M primarily engaged in the design
and manufacturing of heavy machinery.
In the first nine months of 2025, our revenue generated from the five largest customers
accounted for 37.2% of our total revenue. The increase in customer concentration in the first
nine months of 2025 was mainly due to the structure of the industrial robotics industry and
market dynamics. Downstream demand is highly concentrated in capital-intensive sectors such
as automotive, electronics and lithium batteries. Leading enterprises, including Customer A
and Customer B, have increased capital expenditure to accelerate capacity expansion and
technological upgrades, resulting in higher procurement volumes. These customers also tend to
secure supply stability by working closely with leading suppliers like us, which contributed to
the rise in sales concentration. In addition, competition and customer stickiness played a role.
While foreign manufacturers dominate the high-end market, we have strengthened our position
in the mid-range segment through competitive pricing and responsive technical support. Major
customers place high value on service quality and responsiveness, requiring additional
resources to maintain these relationships. Our strategy of focusing on large, financially
resilient customers resulted in and may continue to drive higher customer concentration.
However, despite the increasingly higher customer concentration, we consciously monitor
our customer concentration level and aim to mitigate relevant risks by (i) expanding into other
industries and overseas markets to diversify our customer base and reduce reliance on any
single industry or customer, (ii) upgrading our products to diversify our application scenarios,
and (iii) collaborating with channel partners to reach small and medium-sized enterprises,
while our global presence in regions such as Europe and Southeast Asia helps smooth regional
market fluctuations.
We hold 15% equity interest in Customer F. See Note 34 to the Accountants’ Report in
Appendix I to this prospectus for more details. Other than the above, all of our five largest
customers in each period during the Track Record Period are Independent Third Parties. To the
best of the knowledge of our Directors, none of our Directors, their respective associates or any
shareholder who owns more than 5% of our issued share capital had any interest in any of our
five largest customers in each period during the Track Record Period.
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Our Customer Service and Product Returns
Our product delivery and customer service operations are led by our Global Delivery and
Service Center (ਕʕː). To support timely and localized assistance, we operate
75 service sites worldwide as of September 30, 2025, enabling us to respond efficiently to
customer needs across different regions.
Our customer service is underpinned by a comprehensive service management framework
that covers the entire product lifecycle, providing 24/7 technical support across the pre-sale,
in-sale and post-sale stages. This framework defines the scope of services, quality standards,
and response time benchmarks for each phase, ensuring consistency, traceability, and
standardized service delivery. In 2024, we further enhanced our after-sales service practices by
updating our internal After-Sales Service Management Manual , which introduced refined
procedural guidelines and standardized service protocols. As part of this initiative, we
developed approximately 200 detailed standard operating procedures (SOPs) to address
common troubleshooting scenarios across core system areas including vision systems, servo
systems, arc welding, spot welding and general applications.
We have implemented a structured and tiered complaint-handling mechanism designed to
ensure timely and effective resolution. Once a customer issue is reported, it is promptly logged
into our system and assigned to a technical engineer within two hours. Remote resolution is
prioritized. However, if on-site support is required, we guarantee technician dispatch within 24
hours. Our service team includes junior and mid-level engineers, with issues escalated to
expert-level teams when necessary. All service activities are documented in our CRM system
to maintain complete traceability. Upon resolution, the service case is formally closed. We then
categorize customer feedback into nine key issue types, such as operational, quality, or
usage-related problems, and conduct root cause analysis through the relevant departments.
These insights feed into continuous improvements across our R&D and manufacturing
processes.
During the Track Record Period and up to the Latest Practicable Date, the amounts of our
product returns and exchanges were insignificant. During the Track Record Period and up to
the Latest Practicable Date, we did not have any material product recalls due to quality issues,
nor did we experience any material complaints or product liability or other legal claims from
our customers due to quality issues of the products that we sell.
Overlapping of Customers and Suppliers
Certain of our five largest customers in each period of the Track Record Period also acted
as our suppliers, including:
 Customer D, as one of our five largest customers in 2022 and 2024, from which we
purchased core automation components. We integrate the core automation components
with our own products.
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 Customer F, as one of our five largest customers in 2023 and one of our distributors, from
which we purchased cabinet enclosure. We utilize these cabinet enclosure to house the
automation components we produced.
 Customer M, as one of our five largest customers in the nine months ended September 30,
2025, from which we purchased hydraulic power unit. We incorporate the hydraulic
power units into our own products.
The following table sets forth the breakdown of our revenue generated from and purchase
amount paid to our five largest customers in each period during the Track Record Period, which
were also our suppliers during the Track Record Period, for the periods indicated:
Transaction nature Y ear ended December 31
Nine months ended
September 30,
As customer As supplier 2022 2023 2024 2025
Revenue Purchases Revenue Purchases Revenue Purchases Revenue Purchases
RMB’000
Customer D /H1118/H1118/H1118/H1118Industrial robotics
products
Core automation
components
83,431.7 370.5 81,439.8 1,319.0 97,246.3 100.0 57,352.1 –
Customer F /H1118/H1118/H1118/H1118Industrial robotics
products
Cabinet enclosure 58,408.1 1,484.4 148,725.3 989.9 55,032.5 1,846.6 59,899.5 927.7
Customer M /H1118/H1118/H1118/H1118Intelligent
manufacturing
systems and
industrial
robotics
products
Hydraulic power
unit
29,203.5 – 41,106.2 764.5 – 662.6 68,123.9 464.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 171,043.3 1,854.9 271,271.3 3,073.4 152,278.8 2,609.2 185,375.5 1,392.6
In addition, four of our five largest suppliers in each period during the Track Record
Period also procured robotic software and components from us, contributing revenue of
RMB8.5 million, RMB44.2 thousand, RMB6.3 thousand and RMB54.8 thousand in 2022,
2023, 2024 and the first nine months of 2025, respectively.
According to Frost & Sullivan, this arrangement is common in the industrial robotic
solutions market. Market participants maintain dual roles as both customers and suppliers due
to the high degree of supply chain integration and technical complementarity. On one hand,
industrial robotic solution providers frequently procure core automation components from their
downstream customers to ensure system compatibility for complex, customized integration
projects. Conversely, these customers procure industrial robotics products to enhance their own
production automation. This arrangement optimizes resource allocation, reflecting the deep
strategic synergy inherent in the industry’s value chain.
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SALES AND MARKETING
As of September 30, 2025, our global sales force stands at 763 professionals, strategically
deployed across both domestic and overseas markets. This team drives our revenue engine
through a balanced and proactive strategy.
Our most significant customer acquisition driver is our annual market insights initiatives.
Each year, we conduct comprehensive industry and market analyses to identify future growth
opportunities. For instance, we analyze industry trends and recent developments to determine
which downstream sectors are likely to experience growth in the coming year and, more
specifically, which companies are most likely to require our industrial robotics solutions.
Based on these insights, we develop targeted business development plans and proactively
engage with potential customers to promote our products and explore business opportunities.
This approach enables us to enhance the efficiency and effectiveness of our customer
engagement efforts. In addition, we also rely on referrals from our existing customers and
actively participate in industry associations, trade shows, and technical conferences to promote
our products and expand our customer base.
We are firmly committed to conducting our marketing activities responsibly and ethically.
This commitment is embedded in our processes through a dedicated marketing compliance
framework, clear ethical guidelines to prevent misrepresentation or unfair comparisons,
rigorous review and approval of all marketing materials and regular training programs for all
sales personnel on ethical standards and best practices.
We employ a dual-track sales strategy combining direct sales and a distribution network.
For customers in key downstream industries with strong demand for automation and high
customization requirements, we generally adopt a direct sales model to address their needs
directly, thereby consolidating and expanding our market share among such customers and in
major downstream industries. In addition, we leverage the long-tail effect of distributors to
reach smaller-scale customers or those in lower-tier markets, which enhances the efficiency of
our business development efforts. The following table sets forth a breakdown of our revenue
by customer nature for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Direct sales /H1118/H1118/H1118/H1118/H1118/H11183,616,692 93.2 4,263,094 91.6 3,716,275 92.7 3,129,412 92.9 3,437,024 90.4
Distributor sales /H1118/H1118/H1118/H1118264,087 6.8 388,855 8.4 292,497 7.3 240,862 7.1 366,546 9.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,880,779 100.0 4,651,949 100.0 4,008,772 100.0 3,370,274 100.0 3,803,570 100.0
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Direct Sales
Our direct sales team, working closely with our technical and process engineering
departments, spearheads customer engagement for complex needs. We collaborate deeply with
the client, leveraging our portfolio of modular products to craft tailored and systematic
solutions. Once our technical solution gains approval, our sales team delivers a competitive
commercial offer backed by robust cost control, securing the order and initiating project
execution. Below is a summary of the key terms of our direct sales contracts with customers:
 Term. Sales contracts for our products are typically one-off transaction agreements.
 Delivery of products . We are responsible for delivering products to designated
locations by the deadlines specified in the sales contracts.
 Product return and repair policies . We generally allow direct sales customers to
enjoy free repair services or exchange products if the brand, model or quality does
not meet the agreed specifications.
 Payment and credit terms . Customers are typically required to pay a significant
portion of the total purchase price prior to the delivery of products. The remaining
balance is settled upon product acceptance, expect that a small portion of the total
purchase price is retained as warranty assurance and settled within one month upon
expiration of the warranty period, which is generally one year. We may generally
grant credit terms of up to six months for customers with good credit record.
 Training . We may be required to provide training and operational support to
customers.
 Termination . Our customers are entitled to terminate the sales contracts if our
products fail to be accepted due to issues attributable to us, such as product defects
and delayed delivery.
Distributors
We cooperate with distributors to enhance our market reach and operational efficiency.
Distributors are defined as entities that have resold our products at any point in time. In
addition, our distributors provide a range of customer services, including pre-sale evaluation,
installation and commissioning during the sale process, and after-sales maintenance and
support. For product quality issues beyond routine after-sales services, end users may report
directly to us. By partnering with distributors, we are able to leverage their deep knowledge of
local markets, established customer networks and sales expertise, factors that are critical for
achieving broader geographical penetration. This strategy allows us to scale effectively without
bearing the substantial costs typically associated with building and managing a large direct
sales force. According to Frost & Sullivan, this approach aligns with industry practices
commonly adopted by companies focused on the R&D and commercialization of robotic
technologies. While we maintain a strong direct sales capability, our distributor partnerships
are particularly valuable in promoting standard automation components and control systems,
enabling us to serve a wider customer base through their localized resources and relationships.
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Distributor Movement
The following table sets forth the movement in the number of our distributors who had
revenue contributions during the periods indicated:
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
Number of distributors in the
preceding period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848 62 75 102
Addition of new distributors /H1118 18 19 32 17
Decrease in number of
distributors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118465 1 6
Number of distributors in the
current period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862 75 102 103
Note:
(1) The number of distributors is determined based on those who contributed revenue. Addition refers to
distributors who had revenue contribution in the current period but not in the immediately proceeding
period, while decrease refers to distributors who had revenue contribution in the immediately preceding
period but not in the current period.
During the Track Record Period, our additions of new distributors primarily reflected our
proactive efforts in expanding our distribution network. At the same time, some distributors
initiated cooperation with us based on their recognition of our brand visibility and product
competitiveness. As the purchases of our distributors generally reflect the changing demands
from the end users, distributors who had revenue contribution in the immediately preceding
period may have no revenue contribution in the following period. In addition, we may
occasionally terminate distribution relationships for (i) repeated failure by distributors to meet
sales targets, (ii) breaches of sales contracts by few distributors, such as non-compliance with
our internal policy on distributor management, and (iii) strategic shifts by certain distributors
who chose to pursue other business opportunities.
Key Terms of Our Distribution Agreements
Below is a summary of the key terms of our framework agreements with distributors:
 Term. The duration of distribution agreements is typically 12 months.
 Scope of distribution. Distributors are generally authorized to sell our products only
within a designated geographic area. If they receive orders from outside their
authorized territory, they are required to redirect such orders to us. Additionally,
distributors must obtain our prior written consent before engaging with specific end
users.
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 Sales target. We set sales targets for our distributors and evaluate their performance
on a regular basis. If a distributor fails to meet its target for two consecutive
quarters, we reserve the right to either terminate the distribution agreement or adjust
our sales price. We offer incentives to selected distributors who demonstrated
outstanding sales performance.
 Retail price. We typically do not include retail prices in our distribution agreements.
Distributors are obligated to maintain an orderly market for our products within their
designated geographic area and are prohibited from engaging in price-based
competition.
 Exclusivity. Distributors are restricted from selling similar products manufactured
by other domestic companies.
 Limitations on return or exchange. We generally do not accept returns from our
distributors, except in cases of quality defects or transportation damages.
 Warranty. We typically provide a warranty period of 15 months.
 Payment and credit terms. We typically require our distributors to settle the
substantial portion of the total order value prior to product delivery. The remaining
balance is typically due and payable following their acceptance of our products.
 Termination. We are entitled to terminate the distribution agreements if our
distributors breach the distribution agreements or our management policy over
distributors.
Our Management of Distributors
We cooperate with our distributors based on a straightforward buyer-seller model. Even
so, while the distributor model helps us improve sales efficiency and expand market coverage,
we do not rely solely on distributors to engage with end users. We maintain visibility of all
end-user information, and our sales team maintains direct and open communication channels
with these customers to ensure that their needs, feedback, or complaints are effectively
conveyed to us. Our distributors are not allowed to engage sub-distributors without our prior
written consent. During the Track Record Period and up to the Latest Practicable Date, we did
not have any sub-distributors.
We select our distributors based several factors, including business experience, customer
base, team composition and market development capabilities. Annual performance targets are
then established, and distributors are classified into different tiers accordingly. Each tier
corresponds to differentiated levels of marketing support, incentive programs and technical
assistance. Throughout the term of the distribution agreement, a distributor’s tier may be
adjusted, either upward or downward, based on their actual performance.
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We monitor our distributors’ inventory levels through on-site visits and regular
communication with them to ensure they are well-positioned to meet customer demand
promptly, while keeping the risk of channel stuffing low. Given the nature of industrial robots
and our other products, which are highly specialized and technology-driven rather than
mass-market consumer goods, sales are primarily order-based rather than volume-driven. This
significantly reduces the likelihood of excess inventory accumulation across our distribution
network. Furthermore, we generally do not accept product returns from distributors except in
cases involving quality issues identified before product acceptance. This policy encourages
distributors to place orders based on realistic sales forecasts rather than speculative or inflated
volumes.
In addition, we implement a series of strict measures to manage cannibalization risks,
including: (i) requiring distributors to operate strictly within their designated geographic areas
or authorized sales channels. They are prohibited from making quotations or sales to customers
outside their assigned scope without our prior approval, and may not appoint sub-distributors
or engage in cross-channel sales without our written consent; (ii) obligating distributors to
comply with our market conduct policies, including refraining from engaging in price-based
competition that disrupts market order; and (iii) imposing penalties for violations of our
management policies, which may include warnings, price adjustments, revocation of credit
terms or distribution rights, and, if necessary, termination of the partnership.
To the best of our knowledge, as of the Latest Practicable Date, except for (i) Nanjing
Y uanshi Control System Co., Ltd. (ʮ̡)( “ Nanjing Yuanshi ”), in
which we held 15% equity interest, (ii) Shenzhen Meisitoo Technology Co., Ltd. (౶
ʮ̡), in which we held 16.67% equity interest, and (iii) ROBCON TM.S.R.L, in
which we held 40.11% equity interest, all of our distributors were independent third parties and
none of our distributors were controlled by our former or current employees. Nanjing Y uanshi
is Customer F, one of our five largest customers in 2023 and for the first nine months of 2025.
See “— Our Customers — Our Five Largest Customers” for details.
QUALITY CONTROL
We are recognized by MIIT as a Designated Compliant Enterprise in the Industrial
Robots Sector (ʈุዚኜɛБุ஝ᇍΆุ). Furthermore, in 2024, we were awarded the Jiangsu
Province AAA Quality Credit Rating (͜AAA ॴΆุ) by the local counterparts
of SAMR and NDRC in Jiangsu Province, and successfully renewed our ISO 9001:2015
Quality Management System certification. Our comprehensive quality control system spans the
entire product lifecycle, addressing product quality, process quality, and personnel competency
across five key stages: development, raw material selection, manufacturing, sales and service
and non-conformance management.
During development, we follow the IPD process, identifying and mitigating quality risks
from initial planning and conducting rigorous technical reviews at key milestones with
cross-functional experts. For raw materials, we execute refined internal procedures for supplier
quality management, including quality improvement programs and updated agreements
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requiring suppliers to ensure dimensional and performance compliance for critical components
prior to delivery. In manufacturing, we manage quality holistically by identifying critical
control points across personnel, equipment, materials, methods, environment, and
measurement systems; we conduct regular process audits and have increased inspection
checkpoints to detect issues earlier and ensure thorough corrective action. Our responsive
customer service framework handles complaints through immediate investigation, root cause
analysis, and coordinated cross-departmental corrective measures. Concurrently, we
strengthened non-conformance management by updating protocols and implementing a
“quality alert” mechanism to prevent the use or transfer of defective or suspect items.
To further enhance quality control, we leverage integrated digital systems across key
stages. Raw material inspection plans and results are recorded in our SAP system, providing
real-time metrics such as parts per million (PPM) and batch pass rates, while supplier
performance is managed via our Supplier Relationship Management (SRM) system. In
production, our Manufacturing Execution System (MES) enables traceability of key materials,
real-time process monitoring, automatic data capture, and anomaly visualization, directly
supporting our zero-defect philosophy. For customer service, our Customer Relationship
Management (CRM) system ensures end-to-end tracking of feedback, enhancing both
responsiveness and improvement efficiency. Collectively, these digital tools provide effective
quality oversight and drive continuous improvement throughout our operations.
PRICING
We determine the pricing of our products primarily based on prevailing market
conditions. We generally adopt a market-based pricing strategy while taking into account
factors such as historical transaction terms, customer expectations, and competitive dynamics.
As a leading domestic brand in the robotics industry, we maintain a certain level of pricing
power, particularly in product categories where we hold technological or market advantages.
For major customers with substantial procurement volumes or long-term relationships, we may
adjust pricing strategies on a case-by-case basis to reflect business history, anticipated order
size, or specific commercial negotiations.
During the Track Record Period, we implemented a penetration pricing strategy under
which our sales personnel, within predefined approval limits, could grant tier-based discounts
to our list prices to accelerate market entry and strengthen customer retention. While this
policy temporarily reduced our average selling prices and put pressure on gross margin, we
drove volume growth through scale and executed cost-reduction initiatives, including supply
chain optimization, increased localization of raw materials, and lean manufacturing. As a
result, the adverse impact of price reductions was largely offset.
W AREHOUSING, LOGISTICS AND INVENTORY MANAGEMENT
We have established a proprietary warehousing system supported by our self-developed
Warehouse Management System (WMS). Comprehensive procedures govern the entire process,
from material receipt and inventory storage to manufacturing returns and finished product
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delivery, ensuring standardization at every stage. These protocols are regularly reviewed,
updated and disseminated company-wide via internal platforms. Staff training enforces strict
compliance, including standardized procedures for anomaly inspection, handling and reporting.
Additionally, we partner with qualified logistics providers to guarantee safe, punctual, and
reliable product distribution.
Our inventory management system enables precise tracking of material storage locations,
enhancing operational efficiency and enabling full traceability. Each step, from material receipt
to final delivery, undergoes meticulous verification. We conduct regular cycle counts and
annual comprehensive stock takes to maintain inventory accuracy and transparency. Slow-
moving inventory is proactively analyzed with timely mitigation plans developed. Dedicated
personnel with clearly segregated duties perform periodic reconciliations between physical
stock and system records. This framework of checks and balances effectively mitigates risks
of theft, misappropriation, damage, or significant loss, ensuring no material weaknesses exist
in our production and warehousing controls. As of December 31, 2022, 2023 and 2024 and
September 30, 2025, our inventories amounted to RMB1,130.5 million, RMB1,340.2 million,
RMB1,721.0 million and RMB1,446.2 million, respectively. See “Financial Information —
Discussion of Certain Key Items from Our Consolidated Statements of Financial Positions —
Inventories.”
PROPERTY
We own and lease certain properties primarily to be used as manufacturing bases,
warehouses and offices. As of September 30, 2025, we did not have any assets with a carrying
amount that equaled or exceeded 15% of our consolidated total assets as of that same date.
Owned Land and Properties
As of the Latest Practicable Date, we had rights to use seven parcels of land in China with
a GFA of approximately 424,238.46 sq.m. in aggregate. As of the Latest Practicable Date, our
rights to use such construction land were lawful and valid, and there were no disputes or
potential disputes over the ownership of such land. We primarily utilize these parcels of land
for the construction of our manufacturing bases, premises for R&D activities and office
buildings.
As of the Latest Practicable Date, we owned eight properties in China with a GFA of
approximately 180,634.96 sq.m. in aggregate. We have obtained title certificates for these
properties. As confirmed by our PRC Legal Advisors, we legally and validly own the
aforementioned properties, with no existing or potential ownership disputes. We also owned
one property in the U.S. with a GFA of approximately 15,434 square feet.
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Leased Properties
As of the Latest Practicable Date, we leased 88 properties with a GFA of approximately
11,486.09 sq.m. in China, which had been used mainly as office and staff dormitory. The lease
agreements for these properties had not been registered with the relevant PRC authorities,
primarily because landlords failed to cooperate to complete the lease registration. Given there
are sufficient alternative premises in the market if we need to relocate, our Directors are of the
view that such defects did not have any factual impact and would not have any potential impact
on our ability to use such properties. As advised by our PRC Legal Advisors, failure to register
an executed lease agreement will not affect its legality, validity or enforceability. However, we
may be subject to a fine of no less than RMB1,000 and not exceeding RMB10,000 for each
unregistered lease agreement if the relevant PRC government authorities require us to rectify
and we fail to do so within the prescribed time period. We estimate that the penalties we may
be subject to for these unregistered lease agreements will be immaterial. Therefore, we believe
that the failure to register these lease agreements will not have any material adverse impact on
our financial condition or results of operations. We will actively liaise with the respective
lessors to complete the registration of all such lease agreements, if possible. See “Risk Factors
— Risks Relating to Our Operations — Failure to comply with PRC property-related laws and
regulations regarding certain of our leased properties may adversely affect our business,
financial condition and results of operations.” As of the Latest Practicable Date, our Company
and our major subsidiaries also leased three properties in Germany and Turkey, which had been
used mainly as manufacturing bases and office buildings.
LEGAL PROCEEDINGS AND COMPLIANCE
Legal Proceedings
We may, from time to time, be subject to legal proceedings, disputes and claims that arise
in the ordinary course of business, which primarily include contractual disputes and
employment matters. As of the Latest Practicable Date, we were not a party to any ongoing
material litigation, arbitration or administrative proceedings, and we were not aware of any
claims or proceedings contemplated by the government authorities or third parties which would
materially and adversely affect our business. Our Directors are not involved in any actual or
threatened material claims or litigation.
Compliance
During the Track Record Period and up to the Latest Practicable Date, we were not
imposed any material administrative penalties. We did not experience any material or systemic
non-compliance incidents, which, taken as a whole, are likely to have a material and adverse
effect on our business, financial condition or results of operations.
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COMPETITION
From 2020 to 2024, the market size of the global industrial robotic solutions market
increased from USD14.7 billion to USD25.4 billion at a CAGR of 14.6%, according to Frost
& Sullivan. Projections indicate substantial expansion, reaching USD51.8 billion by 2029,
reflecting a CAGR of 15.4% between 2024 and 2029, according to the same source. According
to Frost & Sullivan, the global industrial robotic solutions market is intensely competitive and
relatively fragmented. As of December 31, 2024, there were over 3,000 industrial robotic
solution providers worldwide, with the top 10 players collectively accounting for 34.2% of the
market share in terms of revenue. Within this highly competitive landscape, we ranked sixth
among all manufacturers globally in terms of revenue in 2024. In the global industrial robotic
solutions market, international solution providers continue to benefit from strong brand
recognition, primarily due to their first-mover advantages in the development of industrial
robots and core automation components. However, domestic companies are increasingly
playing a pivotal role. Leveraging technical breakthroughs and cost efficiencies, domestic
industrial robot manufacturers are now capable of addressing the full spectrum of market
demand, steadily challenging and, in some cases, displacing the long-standing dominance of
foreign brands. See “Industry Overview” for details.
INFORMATION SECURITY AND DATA PRIV ACY
There has been regulatory development in relation to cybersecurity and data privacy and
protection in recent years. On June 10, 2021, the PRC Data Security Law (ʕശɛ͏΍ձ਷
) was adopted by the Standing Committee of the National People’s Congress ( Ό
ึ) and became effective on September 1, 2021. On August 20, 2021,
the PRC Personal Information Protection Law () (the
“PIPL ”) was adopted by the Standing Committee of the National People’s Congress and
became effective on November 1, 2021. On December 28, 2021, the Cyberspace
Administration of China (܃the “ CAC”), together with
certain other PRC government authorities, promulgated the revised Measures for Cybersecurity
Review (), which became effective on February 15, 2022. See
“Regulatory Overview — Laws and Regulations Relating to Information Security and Data
Protection.”
We have designed and implemented comprehensive internal policies on protecting data
privacy and security to ensure data and information security, and ensure compliance with all
applicable PRC laws and regulations. Our internal control measures mainly include: (i)
establishing detailed rules governing the management of data, electronic files, and computer
equipment, (ii) assigning system access to employees based on the individual’s job
responsibilities. Any addition, removal, or change of access must be reviewed and approved by
both the requesting department and the IT department, (iii) tracking employee operations
through designated software, with particular focus on employees who handle sensitive data,
and (iv) entering contracts which include explicit data protection clauses with our suppliers to
ensure that third parties comply with our data security requirements. As advised by our PRC
Legal Advisors, during the Track Record Period: (i) we have not obtained, collected, stored,
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and/or own any personal data except the necessary data collected from our employees during
our operations; (ii) we have obtained information regarding our corporate customers, such as
their name, address and contact details, and operational data in relation to our products, subject
to our customers’ specific authorization. We gathered such operational data through E-Noesis
platform and stored them in cloud-based storage systems; (iii) we have complied with all the
applicable laws and regulations in relation to information security and data privacy. Our
operations do not involve cross-border data transfer. However, as the laws and regulations in
the data security, cybersecurity and privacy protection are still developing, we cannot assure
you that we can always timely adapt to all the aspects of such laws and regulations. See “Risk
Factors — Risks Relating to Doing Business in the Jurisdictions where We Operate — Our
business is subject to a variety of laws, rules, policies and other obligations regarding data
protection domestically and aboard. Any losses or unauthorized access to or unauthorized
releases of confidential information and personal data could subject us to significant
reputational, financial, legal and operational consequences.”
A W ARDS AND ACHIEVEMENTS
The following table sets out some awards that we received and certain achievements we
made:
Name of Award and achievements Awarding Entity Y ear
Advanced Collectives of the National
Industrial and Information Technology
System (ʷӻ୕΋ආණ᜗)
Ministry of Human Resources and Social
Security and MIIT (ღ௅
ʷ௅)
2025
700kg ultra-heavy-duty industrial robot
included in the Catalog of Nationally
Recognized First-of-its-Kind Innovative
Products (̨(ࢁ)ɽҦஔༀ௪પᄿᏐ͜
ኬͦ፽(2024و))
MIIT 2024
Designated Compliant Enterprise in the
Industrial Robots Sector ( ʈุዚኜɛБุ
஝ᇍΆุ)
MIIT 2024
Selection and Cultivation List of Top
Enterprises in the Robotics Industry ( ዚኜ
ɛБุTOPΆุ፮፯੃ԃΤఊ)
China Machinery Industry Federation ( ʕ਷
ዚ૛ʈุᑌΥึ)
2024
Champion Enterprise in a Niche
Manufacturing Sector (Ά
ุ)
MIIT 2024
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Name of Award and achievements Awarding Entity Y ear
High and New Technology Enterprise ( ৷อ
ҦஔΆุ)
Jiangsu Provincial Department of Science
and Technology, Jiangsu Provincial
Department of Finance, and Jiangsu
Provincial Taxation Bureau (ኪҦ
೼ਕ҅)
2023
First Prize for Scientific and Technological
Progress by the Chinese Association of
Automation (ҦආӉᆤɓ
ഃᆤ)
Chinese Association of Automation ( ʕ਷І
ਗʷኪึ)
2023
National Smart Manufacturing Demonstration
Factory (౽ঐႡிͪᇍʈᅀ)
MIIT 2023
Second Prize for Industrial Technological
Progress (ҦආӉᆤɚഃᆤ)
China Machinery Industry Federation and the
Chinese Mechanical Engineering Society
(ʕ਷ዚ૛ʈุᑌΥึeʕ਷ዚ૛ʈ೻ኪึ)
2022 and
2023
National “Specialized, Refined, Differential
and Innovative” Little Giant Enterprise ( ਷
ॴਖ਼ၚतอʃ̶ɛΆุ)
MIIT 2022
National Key Enterprise for Intellectual
Property Strength (ᗆପᛆᎴැΆ
ุ)
National Intellectual Property Administration
(ᗆପᛆ҅)
2019
Nationally Recognized Green Manufacturing
Factory (ॴၠЍႡிʈᅀ)
MIIT 2019
Sino-German Smart Manufacturing Factory
(ʕᅃ౽ঐႡிʈᅀ)
MIIT 2017
ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE (THE “ESG”)
ESG Management Framework
We are committed to environmental protection and promoting corporate social
responsibility and enhancing corporate governance for sustainable development.
We have built a layered governance structure in relation to our ESG matters. Our Board
is the highest decision-making authority in reviewing and approving our ESG targets, internal
manuals, annual reports. Our ESG committee under the Board regularly reviews the overall
ESG performance, ensuring a comprehensive assessment of our Company’s adherence to
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sustainable practices. In collaboration with our management, our ESG committee evaluates our
Company’s ESG performance by referencing industry leaders and peers of comparable sizes,
providing a benchmark for continuous improvement. Furthermore, our ESG committee reports
the annual ESG report to our Board, highlighting key insights and recommendations.
Additionally, our ESG management team closely monitor the cooperation between different
business divisions, ensuring that operations and practices align with relevant ESG visions,
approaches, strategies, and initiatives. To foster effective communication, we supervise the
establishment of communication methods among divisions to facilitate the exchange of
ESG-related issues. Moreover, our ESG working group, comprising staff from key positions,
are responsible for implementing ESG policies and monitoring our ESG metrics during daily
operations. Through this layered governance structure and various communication channels,
including Board meetings, special reports, and other relevant means, our Board receives
regular updates on our Company’s ESG performance, vision, and strategies. We hold regular
meetings to ensure our Board’s awareness of ESG developments. Our Board takes a role in
monitoring and tracking the plans, budgets, and expenditures related to ESG measures and
initiatives.
In 2022, 2023 and 2024, and the nine months ended September 30, 2025, our expenses
of compliance with the applicable environmental protection laws and regulations, including our
investments to enhance environmental compliance and occupational health and safety, was
approximately RMB1.5 million, RMB0.4 million, RMB0.4 million and RMB1.3 million,
respectively.
Material ESG Topics
Material ESG topics serve as key focal points for the management of our sustainable
development. Following stakeholder engagement principles, we regularly conduct importance
assessments by consulting both internal and external stakeholders to determine our material
topic matrix.
Environment
Climate Change
We plan to achieve carbon neutrality in our core operations by 2050. We incorporate the
results of our assessment of climate-related risks and opportunities into the implementation of
both mitigation and adaptation strategies, integrating climate-related risks into our future
strategic development planning. By improving energy efficiency, increasing the use of
renewable energy, and promoting low-carbon products and solutions, we are accelerating our
progress toward achieving the “dual carbon” goals.
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We remain focused on the research and development of low-carbon technologies and
products, positioning businesses that support the new energy industry, industrial automation,
and energy efficiency enhancement as key strategic priorities. At the same time, we closely
monitor emerging fields and new demands arising from the transition to a low-carbon economy,
in order to meet growing market needs and actively seize opportunities in clean technologies.
The following table sets forth a breakdown of our greenhouse gas emissions during the
Track Record Period.
Y ear ended December 31,
Nine months
ended
September 30,
Unit 2022 2023 2024 2025
Direct emissions
(Scope 1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118tCO2e 875.33 842.00 882.05 632.96
Indirect emissions
(Scope 2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118tCO2e 7,712.43 8,721.85 8,994.82 6,547.29
Total GHG
emissions /H1118/H1118/H1118/H1118/H1118/H1118/H1118tCO2e 8,587.76 9,563.85 9,876.87 7,180.25
During the Track Record Period, our greenhouse gas emissions increased primarily in line
with our business expansion. However, our direct emissions were higher in 2022 than in 2023,
primarily because our manufacturing processes consumed more natural gas in 2022. Following
process refinements and energy-efficiency measures, our natural gas consumption and related
emissions decreased in 2023.
Energy Management
We have established a comprehensive energy management system certified to the ISO
50001 standard. This system encompasses all energy management activities related to the
design, development, and production of our core products, including AC servo drive systems,
permanent magnet AC servo motors and electro-hydraulic servo systems. It also covers the
machining of industrial robot components, the assembly of industrial robot units and the
production of electrical control cabinets for machinery. To actively monitor and optimize
energy usage, we employ smart meters to track and analyze electricity consumption across all
production stages. Furthermore, we have implemented an intelligent energy monitoring and
management platform. This centralized digital system enables systematic oversight of energy
consumption, strengthens the balanced allocation and optimized scheduling of energy
resources, enhances overall energy management efficiency, and ultimately reduces our
comprehensive energy consumption.
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Waste Management
We have established internal management policies for wastewater, air emissions, solid
waste and other types of waste generated during production operations. Our wastewater
discharges mainly consist of industrial wastewater and domestic sewage, which are treated to
meet discharge standards through on-site wastewater treatment facilities and municipal
wastewater plants. Our air emissions are treated through air pollution control facilities to meet
emission standards before discharge. For general industrial solid waste and hazardous waste,
we engage qualified disposal agencies for harmless disposal or comprehensive utilization, or
after classification and collection, commission downstream suppliers for harmless disposal or
comprehensive utilization.
The table below sets forth our energy consumption and emissions during the periods
indicated:
Y ear ended December 31,
Nine months
ended
September 30,
Unit 2022 2023 2024 2025
Total exhaust
discharge /H1118/H1118/H1118/H1118/H1118/H1118/H1118
cubic
meters 294,632,000 260,137,100 206,422,800 156,245,820
Total amount of
hazardous waste /H1118/H1118ton 85.38 97.44 136.46 90.988
Total wastewater
generated /H1118/H1118/H1118/H1118/H1118/H1118/H1118ton 64,368 92,408 96,461 65,654
During the Track Record Period, the total volume of hazardous waste and wastewater
generated increased primarily in line with our business expansion. By contrast, our exhaust
discharge declined during the Track Record Period, reflecting the deployment of intelligent
monitoring systems and the implementation of production process improvements.
Social Responsibility
Supply Chain management
We continually reinforce our sustainable supply chain management capabilities by
integrating sustainability into our supply chain management system. This involves actively
implementing environmental and social responsibility risk management for suppliers,
promoting carbon emission reduction throughout the supply chain, and supporting the
sustainable development transition of the industry. We incorporate ESG-related metrics,
including but not limited to low-carbon and social responsibility indicators, into supplier
performance evaluations as additional scoring factors. Once any material ESG-related
controversy is identified and verified, we will terminate the cooperation.
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We work hand in hand with our suppliers on quality improvement initiatives. For issues
such as non-compliant failure rates and unstable quality processes among certain suppliers, we
organize dedicated technical and management teams to provide technical support and carry out
improvement actions together with the suppliers. This approach effectively ensures the quality
of products across the supply chain while enhancing the suppliers’ quality management
capabilities.
Occupational Health, Safety and Care
Compliance with laws and regulations pertaining to employee health and safety is a
priority for our operations. To mitigate risks and ensure the well-being of our employees, we
have developed comprehensive internal policies and measures on occupational health and
safety. These include safety management plans and inspection schedules to identify and address
potential hazards. During the Track Record Period, we had maintained a strong safety record
with no significant accidents reported, and we were not aware of any material claims related
to health and occupational safety.
We are committed to abiding by all applicable regulatory requirements, preventing and
reducing hazards and risks that may harm the health of our employees, and ensuring the health
and safety of our employees and surrounding communities. Strictly complying with the Law of
the People’ s Republic of China on Prevention and Control of Occupational Diseases (ʕശ
) and the applicable laws and regulations in overseas locations of
operation, we have continuously strengthened the occupational health protection of employees,
and systematically sorted out the occupational health management system documents.
We conduct regular information sessions on occupational health and safety awareness for
employees, including equipment safety, safety regulations, construction safety, and incident
case studies. Meanwhile, through themed posters, health knowledge training, and contests, we
continue to improve safety awareness of our employees.
We uphold a culture of equality, diversity, innovation, and zero tolerance for
discrimination, fostering a transparent and trusting environment that values honesty and
inclusiveness.
Community Relations Management
We support rural revitalization by promoting consumption-driven assistance, purchasing
high-quality agricultural products from rural areas to help increase farmers’ income and
contribute to the revitalization of the countryside. We are also committed to public welfare and
charity, encouraging and supporting our employees to participate in various volunteer service
activities, spreading positive energy to society through practical actions within our capacity.
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Corporate Governance
Anti-corruption and Anti-bribery
We uphold strong business ethics by continuously optimizing our anti-corruption
framework, ensuring accessible reporting channels, and enforcing whistleblower protection.
Meanwhile, we firmly oppose unfair competition and monopolistic practices, working to
maintain a fair, transparent, and trustworthy business environment. Our multiple-level business
ethics governance system includes: management by the supervision headquarters, and
execution by several functional departments such as human resources headquarters, finance
headquarters, legal affairs headquarters and audit headquarters. Meanwhile, we have issued the
Business Partner Integrity Cooperation Management Measures, outlining integrity standards
for suppliers, distributors, service providers, agents, and consulting firms to ensure ethical and
compliant business development.
LICENSES, APPROV ALS AND PERMITS
We are subject to regular inspections, reviews and audits and are required to maintain or
renew the permits, licenses and certifications necessary for our operations. During the Track
Record Period and up to the Latest Practicable Date, we had obtained all necessary licenses,
approvals, and permits from the competent government departments and regulatory authorities
that are material for our business operations in the jurisdictions where we operate.
The following table sets forth a list of our material licenses, approvals and certificates.
No. Holder (1)
Name of License,
Approval and Permit Expiration Date
1. /H1118/H1118Our Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Pollution Discharge
Registration
Certificate
October 7, 2029
2. /H1118/H1118Estun Robot /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118December 10, 2029
3. /H1118/H1118Our Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Permits for Urban
Sewage
Discharge into
Drainage Network
December 22, 2029/
November 3, 2029
4. /H1118/H1118Our Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Import and Export
Goods Consignor/
Consignee
December 31, 2099
5. /H1118/H1118Carl Cloos (China) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118December 31, 2099
6. /H1118/H1118Estun Guangdong Robotics
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
December 31, 2099
7. /H1118/H1118Estun Intelligent (Jiangsu) /H1118/H1118/H1118/H1118 December 31, 2099
8. /H1118/H1118Estun Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118December 31, 2099
9. /H1118/H1118Estun Software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Software Enterprise
Certificate
August 25, 2025
(2)
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Notes:
(1) The table lists the relevant licenses, approvals, and permits held by our major subsidiaries. Certain other
subsidiaries within our Group may also hold the same or similar licenses, approvals, and permits. Except
as disclosed in the table, we do not possess any other material licenses, approvals, or permits that are
set to expire in 2025.
(2) We are currently in the process of renewing the Software Enterprise Certificate and do not anticipate any
obstacles in completing the renewal.
INSURANCE
We believe we have adequate insurance coverage in connection with our business
operations by putting in place all the mandatory insurance policies required by PRC laws and
regulations, such as product liability insurance. As required by PRC laws and regulations, our
employee-related insurance includes pension insurance, maternity insurance, unemployment
insurance, work-related injury insurance and medical insurance. During the Track Record
Period, we did not make any material insurance claim in relation to our business. See also
“Risk Factors — Risks Relating to Our Industry and Business — Our insurance coverage may
not be sufficient to cover all losses, which may increase our costs of operation.”
EMPLOYEES
As of September 30, 2025, we had 3,335 employees in total across our global operations.
2,245 employees were based in the PRC, representing 67.3% of our total employees as of the
same date, while the remaining 1,090 employees were based overseas, mainly including
Germany, Poland, the United Kingdom and the United States. The following table sets forth a
breakdown of our employees by function as of the same date.
Function
Number of
employees
% of total
employees
Production and procurement /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,058 31.7%
Research and development /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,029 30.9%
Sales and marketing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118763 22.9%
General administration and management /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344 10.3%
Finance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885 2.5%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856 1.7%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,335 100.0%
Our success deeply rests with our ability to attract, retain and motivate qualified talents,
and we believe that our high-quality talent pool is one of our core strengths and competitive
advantages. We recruit with high standards and rigorous procedures and through various
methods, including campus recruitment, online recruitment, internal referral, and third-party
recruiters, to select the best-fit personnel for the corresponding positions in response to our
various talent demands.
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Sharing success with employees and empowering them to grow is one of the core
elements of our corporate culture. We always strive to provide employees with comprehensive
social benefits, a safe working environment and diverse career development opportunities.
Meanwhile, we strictly abide by the laws, regulations and standards on workplace safety in
relevant countries and regions, and are committed to creating a safe and healthy working
environment for employees, and ensuring the safety and physical and mental health of
employees by implementing a highly efficient management system. We have maintained a good
relationship and expect to maintain an amicable relationship in the future with our employees.
We have established a labor union, an elected employee representative body, in accordance
with the applicable British law. During the Track Record Period and up to the Latest
Practicable Date, there were no material strikes which had an adverse impact on our operations
and no material disputes between the Group and our employees.
In addition to full-time employees, we also collaborate with labor dispatch service
providers. As of September 30, 2025, there were 238 personnel under labor dispatch
arrangements. They were mainly assigned to production areas such as motor assembly,
electrical cabinet assembly, machining, and final robot assembly. The roles they typically filled
included shop-floor workers, warehouse staff, and quality inspectors.
We typically enter into labor dispatch agreements with the relevant service providers with
a term of 12 months. The labor dispatch agreements include terms on (i) the job description of
dispatched personnels, which mainly refers to repetitive labor assignments during the course
of manufacturing, (ii) the responsibilities of labor dispatch service providers, which mainly
include interviewing and recruiting dispatched personnel, entering into agreements with them,
paying wages to and contributing to social insurance and housing provident funds for them, our
responsibilities, including specifying work scope of dispatched personnel, providing them with
requisite trainings and maintaining a safe working environment in accordance with applicable
laws and regulations. We settle with the relevant service providers on a monthly basis
according to the labor dispatch agreements. As advised by our PRC Legal Advisors, during the
Track Record Period and up to the Latest Practicable Date, our labor dispatch agreements were
in compliance with applicable laws and regulations on the following basis: (i) neither we nor
our PRC Legal Advisors were aware of any applicable PRC laws or regulations prohibiting our
engagement of labor dispatch service providers, (ii) the relevant labor dispatch service
providers have obtained necessary licenses and permits to conduct labor dispatch business, (iii)
we had complied with all applicable laws and regulations in relation to labor dispatch, such as
the Interim Provisions on Labor Dispatch , and (iv) we had not been subject to any
administrative penalties for violations of applicable laws and regulations in relation to labor
dispatch during the Track Record Period and up to the Latest Practicable Date.
RISK MANAGEMENT AND INTERNAL CONTROL
To monitor and reduce the impact of risks relevant to our business operations, improve
our corporate governance and ensure compliance with the applicable laws and regulations, we
have established internal budget management procedures and special risks management
measures. We have adopted a series of internal policies, guidelines and procedures to
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strengthen corporate governance and mitigate risks. For example, based on our actual business
needs and in compliance with applicable laws and regulations, we may engage in foreign
exchange hedging transactions with financial institutions to mitigate and manage exchange rate
risks. These transactions may include forward foreign exchange contracts, foreign exchange
swaps, currency swaps, foreign exchange options and other foreign exchange derivative
instruments. Our Group is committed to building and maintaining a strong culture of
compliance among all employees. During the Track Record Period and up to the Latest
Practicable Date, we did not engage in any significant hedging activity.
The internal control evaluation is led by our Board of Directors and its audit committee,
with the audit department playing a central role in coordinating a cross-functional evaluation
team. To ensure the robustness of the internal control evaluation, the team applies a variety of
assessment methods, including individual interviews, questionnaires, focused discussions,
walkthrough tests, statistical sampling and comparative analysis. These methods are employed
to comprehensively gather evidence concerning the design and operating effectiveness of
internal controls, and to identify both design flaws and operational deficiencies where
applicable.
Furthermore, we have implemented enhanced internal controls to strengthen operational
efficiency, financial reliability, and regulatory compliance. Going forward, we will continue to
regularly review and improve our internal policies, measures and procedures to ensure
continuous alignment with evolving operational requirements, regulatory development and
industry best practices.
DETERIORATING FINANCIAL PERFORMANCE
Our Financial Performance in 2024
The demand for our products is significantly influenced by customers’ capital expenditure
budgets, which are closely linked to macroeconomic conditions. Our offerings are mainly
capital equipment used to build, expand and/or upgrade production lines across multiple end
markets. Unlike low-cost consumables that are replenished continuously during routine
operations, our products are purchased episodically, typically as part of discrete capital
expenditure projects.
When macro conditions improve, leading to higher capacity utilization and fixed-asset
investment, customers typically increase their capital spending, which supports more orders,
higher revenue and sometimes improved gross profit margin. In downturns, customers tend to
defer or scale back capital projects, lengthen purchasing cycles and, in some cases, seek price
concessions, which can weigh on our sales, profit margins and cash collections. As a result, our
operating results are closely correlated with prevailing macroeconomic conditions and may
fluctuate with changes in the manufacturing investment cycle.
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In 2024, we faced a challenging global economic downturn and a broad-based reduction
in investment activity across most of the downstream sectors to which we primarily sells,
including construction machinery, heavy industry and photovoltaics. These factors were the
primary contributors to the deterioration of our financial results in 2024, including declines in
revenue, as well as a net loss and net operating cash outflow.
In particular:
 Decreased revenue . Our revenue decreased by 13.8% from RMB4,651.9 million in
2023 to RMB4,008.8 million in 2024. As noted above, our revenue from
construction machinery and heavy industry customers decreased by 29.1%, from
RMB2,051.9 million in 2023 to RMB1,454.0 million in 2024, while revenue from
photovoltaic customers decreased by 46.9% from RMB454.2 million in 2023 to
RMB241.0 million in 2024. In aggregate, these declines accounted for a reduction
of RMB811.1 million in our total revenue.
Industry-level declines were also reflected in our revenue across our business lines.
Revenue from sales of industrial robots decreased by 14.8% to RMB1,232.6 million
in 2024 from RMB1,446.1 million in 2023, primarily due to lower demand from
customers in the photovoltaic industry. Revenue from industrial robot workstations
decreased by 31.8% to RMB1,049.5 million in 2024 from RMB1,538.2 million in
2023. This primarily reflected less industrial robot workstations sold to customers
in Europe and to construction machinery and heavy industry customers in China,
resulting from economic weakness in Europe and reduced investment activity in
China’s construction machinery and heavy industry markets. For similar reasons,
revenue from core automation components and motion control systems also declined
in 2024.
Amid this industry-wide downturn, we strategically adjusted prices across products
and business lines. While this increased near-term pricing pressure and compressed
margins, higher sales volumes in 2024 indicate that the strategy supported market
share gains, as reflected in our ranking in the first half of 2025, and is building
momentum for long-term growth. By offering favorable pricing terms to select key
account customers in the automotive and lithium battery sectors, we increased our
market penetration, which drove higher revenue from these sectors and supported
our operating results.
 Decreased gross profit margin. Our gross profit margin declined from 31.3% in
2023 to 28.3% in 2024, reflecting margin contraction across all business lines. As
noted above, the macroeconomic slowdown reduced demand, intensified industry
competition and, in turn, increased pricing pressure on us. The contraction in our
gross profit margin primarily reflected the aforesaid proactive pricing actions taken
to navigate the downturn and defend volumes.
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 Net loss. We recorded a loss for the year of RMB817.7 million in 2024, primarily
due to a decline in gross profit resulting from decreased revenue and gross profit
margin. In addition, higher operating expenses also contributed to the net loss,
including:
(i) impairment losses on intangible assets and goodwill of RMB360.5 million,
resulting from the underperformance of certain subsidiaries because of demand
weakened in specific downstream sectors, as mentioned above. The
subsidiaries involved include (i) Prex, which we acquired in 2016, and
currently our wholly- owned subsidiary, (ii) Trio Motion, which we acquired in
2017, and currently our wholly-owned subsidiary, (iii) Carl Cloos, which we
acquired in 2020, and currently our wholly-owned subsidiary and (iv)
Y angzhou Shuguang, which we acquired in 2017. In particular, we recognized
an impairment loss on goodwill of RMB57.7 million in relation to Y angzhou
Shuguang in 2024. As of the Latest Practicable Date, we had disposed of all of
our 68% equity interest in Y angzhou Shuguang. For further details on this
transaction, please refer to the section “History, Development and Corporate
Structure — Major Share Capital Changes and Development of our Company.”
As of the Latest Practicable Date, we do not expect to incur other impairment
losses on the goodwill of the above subsidiaries for the year ending December
31, 2025 in accordance with IAS 36, Impairment of assets , primarily because
(i) the recent financial performance of Trio Motion and Carl Cloos has
improved, supporting or increasing their recoverable amounts, and no specific
indicators of impairment have been identified, (ii) there is no remaining
goodwill balance for Prex, as the goodwill previously allocated to Prex was
fully written off in prior impairment losses, and (iii) we have fully disposed of
our equity interests in Y angzhou Shuguang;
(ii) an increase of RMB83.8 million in administrative expenses, mainly due to a
rise of RMB62.4 million in staff costs, which was primarily attributable to (i)
the expansion of our increased headcounts to support our business growth,
especially our expansion overseas, and (ii) higher employee compensation,
reflecting intensified market competition for experienced management
professionals;
(iii) an increase of RMB53.8 million in research and development expenses,
primarily resulting from a RMB43.8 million rise in staff costs. The increase in
staff costs was mainly attributable to the adjusted compensation levels to
remain competitive in attracting and retaining qualified personnel. These
measures were implemented in line with our strategy to strengthen our R&D
capabilities and enhance our ability to respond to new market developments
and technological iterations. Our R&D efforts during the year were directed
toward (a) enhancing the competitiveness of core automation components
based on customer requirements, (b) building application technology platforms
and back-end capabilities to significantly strengthen solution offerings, (c)
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leveraging new digital and information technology platforms to deliver
additional value-added services to customers, and (d) developing robotic
products tailored to emerging industries and high-barrier sectors, focusing on
high-end applications to create more advanced, efficient manufacturing
equipment and intelligent production lines; and
(iv) an increase of RMB46.4 million in selling expenses, mainly from a RMB47.9
million rise in staff costs in line with the expansion and enhancement of our
sales and marketing teams to support business growth and our strategic
expansion into overseas markets. The increase in staff costs was mainly
attributable to the recruitment of additional sales and marketing personnel,
particularly those with international market development experience, as well as
adjustments in compensation and incentive schemes to enhance employee
motivation and retention.
 Net operating cash outflows. Our net cash used in operating activities in 2024 was
primarily attributable to decreased gross profit. Meanwhile, the cash conversion
cycle, which reflects how efficiently a company turns inventory into sales and then
into cash relative to how long it defers payment to suppliers, increased to 161 days
in 2024 from 124 days in 2023, further contributing to operating cash outflows. As
of December 31, 2024, several major components of our inventories, including
finished goods, work-in-progress, goods delivered to customers and contract costs
all increased as compared to December 31, 2023. The rise in finished goods was
mainly attributable to inventory buildup for existing orders to ensure timely
delivery. The increase in work-in-progress and contract costs was primarily driven
by higher material and labor inputs resulting from increased outstanding orders. In
addition, the increase in goods delivered to customers, for which revenue had not yet
been recognized, further contributed to the higher inventory balance, thereby
leading to an increase in inventory and inventory turnover days. Our trade and bill
receivables increased in 2024, as the growth in trade and bill receivables outpaced
the increase in revenue, which was primarily attributable to (i) our decision to offer
more favorable credit terms to key account customers as part of our strategy to
enhance market penetration; and (ii) the prolonged payment cycles of certain
customers, particularly those in the photovoltaic industry.
We recorded net cash generated from operating activities of RMB300.1 million for
the first nine months of 2025, as compared to net cash used in operating activities
of RMB531.1 million in the same period of 2024, attributable to our net profit of
RMB29.7 million for the nine months ended September 30, 2025 and our improved
cash conversion cycle.
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Measures for Revenue Growth
In the first nine months of 2025, our business gradually recovered from the temporary
downturn in 2024. Our revenue increased by 12.9% from RMB3,370.3 million in the first nine
months of 2024 to RMB3,803.6 million in the first nine months of 2025.
To further improve our financial performance, we have taken and will continue to
implement the following measures:
 Capturing the growth of emerging downstream industries . As noted above, our
operating results are closely linked to prevailing macroeconomic conditions. To
diversify our revenue base and mitigate cyclicality, we intend to expand sales to
customers in end markets with more favorable demand outlooks, particularly the
automotive, lithium battery and electronics sectors, to support future growth. We
achieved this progress by broadening the application scope of our industrial robots
to better meet the industry production requirements. This strategy began to gain
traction in the first nine months of 2025. Our revenue generated from the
automotive, lithium battery, and electronics industries each experienced an increase
of RMB430.4 million, RMB197.5 million, and RMB66.4 million from the first nine
months of 2024 to the first nine months of 2025, respectively.
Industries that experienced significant revenue declines in 2024 included
construction machinery and heavy industry, and photovoltaic sectors. Revenue from
construction machinery and heavy industry reached RMB1,156.4 million in the first
nine months of 2025, broadly stabilizing compared with RMB1,197.7 million in the
same period of 2024. The photovoltaic sector remains in a downturn. However, we
have proactively prepared for this scenario by diversifying into new end markets. As
a result, the photovoltaic sector now accounts for less than 5% of total revenue for
the first nine months of 2025, and our volatility is expected to have a limited impact
on our future business.
Our downstream sectors have their own periodicity. We closely follow industry
trends and identifies the downstream industries that are experiencing upward cycle.
According to Frost & Sullivan, industries surrounding new energy vehicles (NEV)
expanded notably in recent years due to various governmental policies in favor of
NEV and clean energy. Accordingly, we strategically retain and acquire orders from
automotive and lithium battery industries, especially strengthen relationships with
key account customers in these sectors. As a result, our revenue increase in the first
nine months of 2025 was mainly driven by increases in revenue generated from
emerging industry verticals, including automotive, lithium battery and electronics
industries.
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 Driving revenue growth of core automation components and motion control
systems. Our core automation components and motion control systems are applied
across a wide range of downstream industries. In the first nine months of 2025,
demand in sectors such as photovoltaic, textile and other traditional sectors
weakened, leading to intensified competition and a decline in sales from these
product lines. To drive revenue growth, we have taken measures including:
(i) further optimizing our customer mix by strengthening partnerships with
leading industry players, expanding cooperation along their value chains, and
providing differentiated product portfolios tailored to their application needs,
so as to increase the contribution of such customers to overall sales;
(ii) reinforcing partnerships with distributors through closer collaboration in
business, technical solutions and financing support, jointly serving end-users,
and identifying new market opportunities to enhance their motivation and
effectiveness;
(iii) enhancing solution competitiveness based on application scenarios, offering
integrated product portfolios that leverage the strengths of our servo systems,
motion control systems and motion control solutions to improve customer
stickiness and pricing power; and
(iv) advancing product platform design to achieve scale effect, reducing costs,
improving usability and shortening commissioning time, thereby enhancing
overall competitiveness.
 Diversifying Service Offerings. We are proactively adapting to market shifts by
transitioning from a product-centric approach to a solutions-led model and
expanding the application scope of our industrial robots. By deeply understanding
customer needs in different industries and developing tailored solutions, we aim to
reduce the substitutability of our products and strengthen customer loyalty. We have
already built comprehensive solution portfolios in sectors such as lithium battery,
automotive and electronics. For example, in the automotive industry, we provide
end-to-end intelligent manufacturing solutions spanning both vehicle assembly and
component production, covering processes such as spot welding, arc welding,
gluing, riveting and material handling, which has supported rapid revenue growth in
this sector. Another example is the manufacturing of lithium batteries, where our
products and solutions span key processes from cell production to module PACK
assembly. Our SCARA Series robots, together with motion control solutions for
die-cutting and winding machines, enable cells to enter the module PACK stage with
high yield rates. In the module PACK stage, our welding robots and heavy-duty
robots support automated module assembly, reducing labor costs and ensuring
consistent product quality. Furthermore, our E-Noesis platform offers real-time
visibility into equipment performance and production data across the lithium battery
intelligent manufacturing system.
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We are developing a new generation of products designed to broaden the application
coverage. These products feature teaching-free welding and polishing, as well as
vision-guided random bin picking, enabled by the integration of motion control,
machine vision, and AI-based programming. To support these intelligent
applications, we introduced the “next-generation” controller, built on an open and
flexible architecture, which simplifies robot operation, enables multi-robot
collaboration, and enhances system integration with external axes and sensors. With
improved ease of use, teaching-free functionality and safety, these robots are
particularly suited for steel structurewelding, surface polishing, gluing and laser
welding, areas where automation adoption remains limited. By simplifying
deployment and improving adaptability, our next-generation robots are expected to
accelerate the replication of successful use cases and drive broader market adoption.
To further expand our market presence, we are enhancing both channel and regional
sales capabilities. On one hand, we are empowering distributors with business,
technical and financial support to jointly serve end-users and capture new market
opportunities, thereby deepening penetration among small and mid-sized customers.
On the other hand, we are strengthening cooperation with leading industry players
and expanding our role across their value chains, thereby increasing the contribution
of strategic customers to overall sales.
We are also advancing a “products plus services” strategy to build a full-lifecycle
customer support system. This includes (i) establishing expert service teams and a
data-driven digital service platform to deliver value-added services, (ii) improving
our global service network to ensure timely and efficient support worldwide, (iii)
providing technical training programs and online learning resources to enhance
customer skills, and (iv) building a more comprehensive after-sales system with
fast-response mechanisms, optimized spare parts management, remote technical
support and continuous quality evaluation. These initiatives are designed to improve
customer satisfaction and stickiness, while creating a differentiated and sustainable
competitive advantage.
 Strengthening the industry leading position . According to Frost & Sullivan, we
ranked sixth globally and in China in terms of revenue among all industrial robotics
manufacturers in 2024. However, despite our leading market position, our market
shares were only 1.7% globally and 2.0% in China, as the market for industrial
robots remains highly fragmented. According to Frost & Sullivan, the market size of
the global industrial robotic solutions market in terms of revenue increased from
USD14.7 billion in 2020 to USD25.4 billion in 2024, representing a CAGR of 14.6%
from 2020 to 2024, and is expected to maintain its strong growth rate in the future,
with revenue expected to reach USD51.8 billion by 2029, at a CAGR of 15.4% from
2024 to 2029. We had ranked first among domestic manufacturers in China’s
industrial robotic solutions market for years, in terms of industrial robot shipment
volume, according to Frost & Sullivan. This leading position, in our opinion,
provides us with a unique advantage in capturing the growth potential of this market.
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The localization rate of industrial robots in the Chinese market continues to rise,
providing a solid foundation for us to further expand our market share. According
to Frost & Sullivan, the domestic segment accounts for 29.0%, 32%, 36%, 45% and
50% of the total industrial robot market in China in terms of the shipment volumes
of industrial robot in 2020, 2021, 2022, 2023 and 2024, respectively, showing a
rising trend in the localization rate of industrial robots in the Chinese markets. In the
first nine months of 2025, the domestic segment accounts for 53% of the total
industrial robot market in China in terms of the shipment volumes of industrial
robot, and our shipment volume of industrial robots surpassed foreign brands within
the domestic market, demonstrating our capability in capturing the opportunities
driven by the trend of localization, according to the same source.
 Enhancing global presence . Our revenue generated from overseas markets
remained relatively stable from RMB1,139.3 million in the nine months ended
September 30, 2024 to RMB1,117.7 million in the nine months ended September 30,
2025. We intend to focus on the European market, as it represents a high level of
industrialization and adoption of robotic automation solutions. We currently operate
two manufacturing bases in Europe, with a third under construction, which are
expected to further strengthen our regional capabilities. Our revenue generated from
the European market remained relatively stable at RMB909.3 million in the first
nine months of 2024 and RMB894.2 million in the first nine months of 2025.
Measures for Managing Cost and Improving Operational Efficiency
We intend to improve gross profit margin through three key initiatives:
 We expect our gross profit margin to improve driven by stronger pricing discipline,
improved bargaining power and differentiated pricing strategies across key
industries and applications. We set prices with reference to application complexity,
competitive conditions and target profit margins, while maintaining firm control
over discounts to reflect the strategic value of our products. Our bargaining position
has improved as we gained greater control over core technologies and reduced
reliance on imported components, which has strengthened product competitiveness
and lowered costs. These advances have supported deeper penetration among
leading customers in high-growth sectors such as lithium battery and automotive
manufacturing, where precision, reliability and efficiency requirements allow for
premium pricing. Expanded production capacity has also enhanced scale efficiency,
giving us greater flexibility to price based on value rather than volume.
We continue to adopt differentiated pricing strategies that reflect the added value of
our offerings, including process-specific software packages and services delivered
through our digital platforms. In the market for industrial robotic solutions applied
in the automotive sector, which has long been dominated by foreign manufacturers,
we have steadily increased our market share by offering comprehensive, cost-
effective and customized automation solutions. Our solutions cover the full
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production process, including stamping, welding, drilling, die casting, polishing,
coating and smart material handling. By developing automotive-specific welding
process software packages, we help leading automakers improve production
efficiency. These capabilities, combined with our strong price-performance
advantage and localized support, have enabled us to gain greater penetration among
major customers in the automotive sector.
 We plan to expand our portfolio of industrial robots that can achieve higher price
premiums by focusing on products with stronger performance, higher precision and
greater integration capability. For example, our heavy-duty and ultra-heavy-duty
robots generally command higher price premiums relative to light-duty and
medium-duty models, as these products incorporate more advanced technologies and
face less market competition. In 2024, our 700 kg ultra-heavy-duty robot was
included in the Catalog of Nationally Recognized First-of-its-Kind Innovative
Products (2024) issued by the MIIT, underscoring its technological innovation and
differentiated value. Our R&D efforts will emphasize developing proprietary control
software and motion algorithms that improve speed, stability and accuracy, and
enable our robots to handle more complex manufacturing processes. Products with
higher technological sophistication and integration depth typically command better
pricing and profitability. We are also strengthening compliance with international
safety and certification standards to meet the requirements of overseas markets,
which will contribute to higher overall gross profit margins. In addition, our large
installed base of industrial robots provides substantial opportunities in the after-
sales market, including equipment maintenance, upgrades, and the sale of process-
specific software packages. These recurring service revenues will enhance the
profitability and resilience of our overall offering mix; and
 We will optimize our global operations under a “local-for-global” model to capture
regional advantages, improve margins, and strengthen our competitiveness. First, we
will enhance research and development localization by establishing overseas R&D
centers and integrating local expertise with China’s cost-efficient manufacturing
base, thereby combining advanced international technologies with China’s scale
advantages. Second, we will advance production and supply chain localization by
setting up overseas manufacturing facilities while continuing to leverage China’s
mature supply chain ecosystem. This approach will allow us to integrate leading
global suppliers, secure stable access to critical components such as servo systems
and controllers, and lower production costs. We manage our production activities in
an integrated manner across both domestic and overseas manufacturing bases to
enhance resource allocation and operational efficiency. Centralized management
allows us to optimize production planning, procurement, and supply chain
coordination on a global scale, enabling flexible deployment of capacity across
different sites. We also export components produced in-house in China to our
overseas manufacturing facilities to further enhance cost efficiency and supply chain
integration. Third, we will expand our global market presence and service
capabilities by operating overseas subsidiaries and service networks that deliver
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differentiated products and tailored solutions for specific regional industries, such as
automotive manufacturing in Europe and electronics contract manufacturing in
Southeast Asia. We operate under a centralized human-resources framework and
deploy personnel across our global manufacturing operations as needed to make full
use of our existing workforce. Together, these initiatives are expected to reduce
logistics and tariff costs, shorten lead times and enhance overall profitability.
We continue to strengthen operational discipline and data-driven management across our
business.
 In sales and marketing, we are leveraging digital tools and analytics to improve the
efficiency of customer acquisition and retention. Actions include (i) optimizing the
go-to-market model and workforce mix through greater use of channel partners; (ii)
instituting a pre-approval regime and tighter monitoring of travel and business
entertainment expenses; and (iii) reinforcing KPI-based performance management
with specific targets for gross margin, cash collections and adherence to expense
budgets. We have implemented a company-wide customer relationship management
(CRM) system integrated with our enterprise resource planning (ERP) platform to
digitalize the lead-to-cash process, covering the entire cycle from lead generation
and opportunity management to order fulfillment and payment collection. Sales
activities are now recorded and managed through the CRM system, enabling
data-driven tracking and analysis that improve conversion and win rates. The system
also streamlines the transition from quotation to contract and automates order
creation, significantly enhancing processing efficiency. Integrated with our banking
system, the CRM enables automatic payment reconciliation and bookkeeping in
ERP , improving financial efficiency and internal control. We have also introduced an
expense control system linked to a leading domestic travel platform, which embeds
real-time budget management into the approval workflow. Expense requests are
automatically checked against available budgets, and employees can book travel
directly within their pre-approved limits through the platform. The system provides
us with centralized settlement and payment, eliminating manual reimbursement,
improving efficiency, and reducing compliance risks.
 In business administration, we are tightening control over key overhead categories,
with a particular focus on office expenses, by adopting paperless processes. Key
initiatives include: (i) deploying digital management and expense systems to
automate tracking, analysis and early-warning alert; (ii) streamlining approval
workflows through a tiered authorization matrix that assigns approval rights based
on the type of expense, including travel and business entertainment, and on the
transaction amount; and (iii) further enhancing transparency and oversight through
periodic internal audits.
BUSINESS
– 263 –


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These measures began to yield results in the first nine months of 2025. For the nine
months ended September 30, 2025, our selling expenses and administrative expenses, as a
percentage of revenue, were 8.1% and 8.7%, respectively, significantly reduced from 9.6% and
11.3% for the nine months ended September 30, 2024, respectively.
In addition, we are implementing lean management of its R&D process, measures of
which include reducing material waste and monitoring R&D-related travel expenses. For
example, our R&D teams now compare multiple design options early in the development
process and use advanced simulation software to validate key parameters. This approach
ensures higher accuracy in the initial design, reduces the number of prototypes of printed
circuit board and physical iterations, lowers material waste, and significantly shortens the
overall development timeline. Consequently, research and development expenses as a
percentage of revenue decreased from 9.1% for the nine months ended September 30, 2024 to
8.4% for the same period in 2025, indicating our elevated R&D efficiency.
BUSINESS
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THE CONTROLLING SHAREHOLDERS GROUP
The Controlling Shareholders Group includes Mr. Wu, Mr. Wu Kan ( юԹ) (son of Mr.
Wu), Ms. Liu Fang (ٹspouse of Mr. Wu) and Nanjing Primest. Mr. Wu and Ms. Liu Fang
are spouses and parents of Mr. Wu Kan. Accordingly, Mr. Wu, Ms. Liu Fang and Mr. Wu Kan
are regarded as the Controlling Shareholders Group of our Company on the basis of (i) their
family relationships of being close associates (spouse) and family members (parents and son)
of each other; and (ii) Mr. Wu, Ms. Liu Fang and Mr. Wu Kan hold part of their shareholding
interests collectively in our Company indirectly via a common investment holding company
(namely Nanjing Primest) and therefore be presumed to be a group of Controlling
Shareholders.
As of the Latest Practicable Date, the Controlling Shareholders Group was able to
exercise approximately 42.15% voting rights in our Company, comprising (i) 110,996,700
Shares (representing approximately 12.74% of the issued Share capital of our Company) held
directly by Mr. Wu, (ii) 254,894,742 Shares (representing approximately 29.26% of the issued
Share capital of our Company) held by Nanjing Primest, which is a limited liability company
established under the laws of the PRC and is held as to 96.89%, 3.00% and 0.11% by Mr. Wu,
Mr. Wu Kan and Ms. Liu Fang, respectively, and (iii) 1,263,033 Shares (representing
approximately 0.15% of the issued Share capital of our Company) held directly by Mr. Wu
Kan.
Immediately upon completion of the Global Offering (assuming the Over-allotment
Option is not exercised and options granted under the 2025 Share Option Scheme are not
exercised), the Controlling Shareholders Group will be entitled to exercise approximately
35.83% voting rights in our Company. Therefore, the Controlling Shareholders Group will
continue to be our Controlling Shareholders Group for the purpose of the Listing Rules.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS GROUP
Our Directors consider that we are capable of carrying on our business independently of
our Controlling Shareholders Group and their close associates after the Listing, taking into
consideration of the factors below.
Management Independence
Our Board comprises nine Directors, including five executive Directors, one non-
executive Director and three independent non-executive Directors. Save and except for Mr.
Wu, none of our Directors or members of our senior management serves as director or member
of senior management in our Controlling Shareholders Group and their close associates (other
than members of our Group).
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS GROUP
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We believe that our Board as a whole, together with our senior management, is able to
perform the managerial role in our Group independently from our Controlling Shareholders
Group for the following considerations:
(a) each of our Directors is aware of his/her fiduciary duties as a Director which require,
among others, that he/she acts for the benefit of and in the best interests of our
Company and not allow any conflict between his/her duties as a Director and his/her
personal interests;
(b) our daily management and operation decisions are made by all our executive
Directors and senior management, all of whom have substantial experience in the
industry in which we are engaged and will be able to make business decisions that
are in the best interest of our Group. For details of the industry experience of our
senior management, see “Directors and Senior Management” in this prospectus;
(c) we have appointed three independent non-executive Directors, comprising one-third
of the total members of our Board, who have sufficient knowledge, experience and
competence with a view to bringing independent judgment to the decision-making
process of our Board;
(d) in the event that there is a potential conflict of interest arising out of any transaction
to be entered into between our Group and a Director and/or his/her associate, he/she
shall abstain from voting and shall not be counted towards the quorum for the
voting; and
(e) we have adopted a series of corporate governance measures to manage conflicts of
interest, if any, between our Group and our Controlling Shareholders Group which
would support our independent management. For further details, please refer to the
paragraph headed “— Corporate Governance Measures” in this section.
In light of the above, our Directors believe that our Company has sufficient and effective
control mechanisms to ensure that our Directors perform their respective duties properly and
safeguard the interests of our Company and our Shareholders as a whole.
Operational Independence
We have full rights to make all decisions on, and to carry out, our own business operations
independently. We have our own departments specializing in these respective areas which have
been in operation and are expected to continue to operate independently from our Controlling
Shareholders Group and their close associates. We hold all the requisite licenses, intellectual
property rights and qualifications that are material to carry on our principal business. We also
have independent access to suppliers and customers and have sufficient capital, facilities and
employees to operate our business independently from our Controlling Shareholders Group and
their close associates.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS GROUP
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--- page 277 ---
Based on the above, our Directors believe that we will be able to operate independently
from our Controlling Shareholders Group and their close associates.
Financial Independence
We have an independent financial system. We make financial decisions according to our
own business needs and neither our Controlling Shareholders Group nor their close associates
intervene with our use of funds. We have established an independent finance department with
a team of financial staff and an independent audit, accounting and financial management
system.
In addition, we have been and are capable of obtaining financing from third parties
without relying on any guarantee or security provided by our Controlling Shareholders Group
or their close associates. As of the Latest Practicable Date, there was no loan, advance or
guarantee provided by our Controlling Shareholders or their close associates.
Based on the above, our Directors believe that we are capable of carrying on our business
independently of and do not place undue reliance on our Controlling Shareholders Group and
their close associates after the Listing.
CORPORATE GOVERNANCE MEASURES
Our Directors recognize the importance of good corporate governance in protecting our
Shareholders’ interests. We have adopted the following measures to safeguard good corporate
governance standards and to avoid potential conflict of interests between our Group and our
Controlling Shareholders Group:
(a) where a Shareholders’ meeting is to be held for considering proposed transactions
in which our Controlling Shareholders Group or any of their associates has a
material interest, our Controlling Shareholders Group or their associate will not vote
on the relevant resolutions and shall not be counted in the quorum for the voting;
(b) our Company has established internal control mechanisms to identify connected
transactions. Upon the Listing, if our Company enters into connected transactions
with our Controlling Shareholders Group or any of their associates, our Company
will comply with the applicable Listing Rules;
(c) our Board consists of a balanced composition of executive Directors and
independent non-executive Directors, with independent non-executive Directors
representing not less than one-third of our Board to ensure that our Board is able to
effectively exercise independent judgment in its decision-making process and
provide independent advice to our Shareholders. Our independent non-executive
Directors individually and collectively possess the requisite knowledge and
experience to perform their duties. They will review whether there is any conflict of
interests between our Group and our Controlling Shareholders Group and provide
impartial and professional advice to protect the interests of our minority
Shareholders;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS GROUP
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--- page 278 ---
(d) where our Directors reasonably request the advice of independent professionals,
such as financial advisers, the appointment of such independent professionals will
be made at our Company’s expenses; and
(e) we have appointed Maxa Capital Limited as our compliance adviser to provide
advice and guidance to us in respect of compliance with the applicable laws and the
Listing Rules, including various requirements relating to corporate governance.
Based on the above, our Directors believe that sufficient corporate governance measures
have been put in place to manage conflicts of interest that may arise between our Group and
our Controlling Shareholders Group and to protect our Shareholders’ interests as a whole after
the Listing.
INTEREST IN COMPETING BUSINESS OF OUR CONTROLLING SHAREHOLDERS
GROUP AND THE DIRECTORS
None of the members of our Controlling Shareholders Group or our Directors was, as of
the Latest Practicable Date, interested in or engaged in any business, other than our Company,
which, materially competes or is likely to materially compete, either directly or indirectly, with
our Group’s businesses and which requires disclosure pursuant to Rule 8.10 of the Listing
Rules.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS GROUP
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BOARD OF DIRECTORS
Our Board currently consists of nine Directors, comprising five executive Directors, one
non-executive Director and three independent non-executive Directors, namely:
Name Age Position(s)
Date of
appointment
as Director
Date of
joining our
Group Role and responsibilities
Relationship
with other
Directors
and senior
management
Mr. WU Bo
(ت)H1118/H1118/H1118/H1118/H1118/H1118
71 Executive Director,
chairman of the
Board and chief
strategic officer
June 27,
2011
February
2002
Responsible for convening and
presiding over meetings,
making decisions on major
issues
Father of Mr. WU
Kan
Mr. WU Kan
(юԹ) /H1118/H1118/H1118/H1118/H1118/H1118
41 Executive Director,
vice chairman of the
Board and general
manager
July 9, 2020 October 2013 Responsible for the overall
management, overall
strategic planning, and
business development of our
Company
Son of Mr. WU
Mr. ZHU Chunhua
(ശ) /H1118/H1118/H1118/H1118
55 Executive Director and
deputy general
manager
July 12, 2017 August 2011 Responsible for daily
operation of the Company
None
Mr. ZHOU Ailin
(؍)H1118/H1118/H1118/H1118
52 Executive Director and
deputy general
manager
July 9, 2020 May 2006 Responsible for daily
operation of the Company
None
Mr. HE Lingjun
(ࠏ)H1118/H1118/H1118/H1118
52 Executive Director,
deputy general
manager and
financial director
June 29,
2022
May 2021 Responsible for financial
management and corporate
governance of the Company
None
Ms. CHEN Yinlan
(௓ვᚆ) /H1118/H1118/H1118/H1118
45 Non-executive Director July 19, 2023 October 2004 Responsible for providing
strategic advice on the
management and corporate
governance of the Company
None
Dr. TANG
Wencheng
(ಷ˖ϓ) /H1118/H1118/H1118/H1118
66 Independent non-
executive Director
July 9, 2020 July 2020 Primarily responsible for
providing independent
advice and judgment to our
Board
None
Dr. HAN Xiaofang
(ٹ)H1118/H1118/H1118/H1118
41 Independent non-
executive Director
June 20,
2025
June 2025 Primarily responsible for
providing independent
advice and judgment to our
Board
None
Mr. LIN Jinjun
(ڲږ؍)H1118/H1118/H1118/H1118
40 Independent non-
executive Director
June 20,
2025
June 2025 Primarily responsible for
providing independent
advice and judgment to our
Board
None
DIRECTORS AND SENIOR MANAGEMENT
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The following sets forth the biographies of our Directors:
EXECUTIVE DIRECTORS
M r .W UB o(ت)aged 71, is the founder of our Group, an executive Director, the
chairman of the Board and chief strategic officer. He was appointed as a Director of our
Company on June 27, 2011 and is primarily responsible for convening and presiding over
meetings, making decisions on major issues.
Mr. Wu is a sophisticated and resourceful veteran with nearly 40 years of industry
experience. He gained in-depth understanding of the industry where our Group operates and
acquired rich management experience from his previous work experience and the management
and development of our business. Prior to the establishment of the Group, Mr. Wu served as
a teacher at Nanjing Forestry University (ุɽኪ) in the PRC from April 1980 to August
1984. From March 1987 to July 1993, Mr. Wu gained in-depth industry experience for working
as an officer at Jiangsu Machinery and Equipment Import and Export Corporation (ዚ
૛ண௪ආ̈ɹʮ̡). Mr. Wu established Nanjing Estun Industrial Automation Co., Ltd (ԯ
ʮ̡), one of our former subsidiary, in March 1993 and served as the
executive director.
Mr. Wu also holds directorships and senior management positions in a number of our
major subsidiaries, including but not limited to Nanjing Estun Software Technology Co., Ltd.
(ʮ̡).
Mr. Wu obtained his bachelor’s degree in mechanical manufacturing engineering and
master’s degree in mechanical manufacturing from Southeast University (ɽኪ) (formerly
known as Nanjing Institute of Technology (ԯʈኪ৫)) in the PRC in January 1980 and July
1987, respectively.
Mr. WU Kan ( юԹ), aged 41, is an executive Director, vice chairman of the Board and
general manager of our Company. He was appointed as a Director of our Company on July 9,
2020 and is primarily responsible for formulating the overall strategy and overseeing the
implementation of the strategy and the operation and management of our Group.
Prior to joining of the Group, Mr. Wu Kan worked as an experienced associate at
PricewaterhouseCoopers LLP from June 2010 to June 2013.
Mr. Wu Kan also holds directorships and senior management positions in a number of our
major subsidiaries, including but not limited to, Estun Robot and Nanjing Dingpai
Electromechanical Technology Co., Ltd. (ʮ̡).
Mr. Wu Kan obtained his bachelor’s degree in automation and control engineering from
Southeast University (ɽኪ) in the PRC in June 2005. Mr. Wu Kan obtained his master’s
degree in business administration from University of Missouri ( ੗ᘽԢɽኪ) in the United
States in December 2007.
DIRECTORS AND SENIOR MANAGEMENT
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Mr. ZHU Chunhua (ശ), aged 55, is an executive Director and the deputy general
manager of our Company. He was appointed as a Director of our Company on July 12, 2017
and is primarily responsible for daily operation of the Company.
Prior to joining of the Group, Mr. Zhu Chunhua served as the chief engineer, director of
the science and technology department and the head of design office of Jiangsu Gaochun
Textile Machinery Company Limited (ʮ̡) from September 1991 to
May 2007.
Mr. Zhu Chunhua also holds directorships and senior management positions in a number
of major subsidiaries, including but not limited to Estun Intelligent Technology (Jiangsu) Co.,
Ltd. (Ҧ(Ϫᘽ)ʮ̡) and Nanjing Estun Intelligent System Engineering Co.,
Ltd. (ʮ̡).
Mr. Zhu Chunhua obtained his bachelor’s degree in mechanical engineering from
Southeast University (ɽኪ) in the PRC in July 1991. Mr. Zhu was certified as senior
mechanical engineer by the Department of Human Resources and Social Security of Jiangsu
Province in November 2006.
Mr. ZHOU Ailin (؍)aged 52, is an executive Director and the deputy general
manager of our Company. He was appointed as a Director of our Company on July 9, 2022 and
he is primarily responsible for the daily operation of the Company.
Prior to joining of the Group, Mr. Zhou worked as the operation director of Jiangsu
Hongtu High Technology Company Limited (ʮ̡) from March 2000
to May 2006, a company specializing on the research, production and sales of including but not
limited to computer network equipment and telecommunication equipment. Mr. Zhou joined
our Group in May 2006. From May 2006 to December 2013, Mr. Zhou served as the sales
general manager and the deputy general manager of our Company.
Mr. Zhou also holds directorships and senior management positions in a number of our
major subsidiaries, including but not limited to Nanjing Dingkong Electromechanical
Technology Co., Ltd. (ʮ̡).
Mr. Zhou obtained his bachelor’s degree in physics from Wuhan University (ဏɽኪ)i n
the PRC in July 1996.
Mr. HE Lingjun (ࠏ)aged 52, is an executive Director, a deputy general manager
and financial director of our Company. He was appointed as a Director of our Company on June
29, 2022 and he is primarily responsible for the financial management and corporate
governance of the Company.
Prior to joining of the Group, Mr. He worked at KPMG Huazhen LLP from September
2002 to August 2011 with his last position as a senior manager. He then served as the financial
director of Nanjing Develop Advanced Manufacturing Co., Ltd. (΅Ϟ
DIRECTORS AND SENIOR MANAGEMENT
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--- page 282 ---
ʮ̡), a company listed on the Shanghai Stock Exchange (stock code: 688377.SH) from
August 2011 to May 2021. From April 2017 to October 2018, Mr. He served as a special
assistant to the president of Shanghai PHICOMM Data Communication Technology Co., Ltd.
(ʮ̡), a company specializing in the research and development,
manufacturing, marketing, and sales of software and hardware IP networking and
communication products.
Mr. He obtained his bachelor’s degree in naval architecture and ocean engineering from
Harbin Engineering University (ဧᏵʈ೻ɽኪ) in the PRC in July 1996. Mr. He obtained his
master’s degree in business administration from Shanghai Jiao Tong University ( ɪऎʹஷɽ
ኪ) in the PRC in December 2020. Mr. He has obtained his PRC legal professional qualification
certificate in March 2014. Further, Mr. He has obtained his Certified Public Accountant
(non-practicing) certificate and Certified V aluer (non-practicing) certificate both issued by the
Ministry of Finance in August 2000 and September 2000, respectively.
NON-EXECUTIVE DIRECTOR
Ms. CHEN Yinlan ( ௓ვᚆ), aged 45, is a non-executive Director of our Company. She
was appointed as a Director of our Company on July 19, 2023 and she is primarily responsible
for providing strategic advice on the management and corporate governance of the Company.
Ms. Chen joined our Group in October 2004. From October 2004 to December 2022, she
successively served as the manufacturing manager, deputy general manager of the supply chain
management, procurement manager, and strategic procurement manager. In July 2023, she was
promoted to serve as the assistant to the president and director of our Company, respectively.
Ms. Chen obtained her bachelor’s degree in electrical engineering and automation from
China University of Mining and Technology ( ʕ਷ᘤุɽኪ) in the PRC in July 2002.
INDEPENDENT NON-EXECUTIVE DIRECTORS
Dr. TANG Wencheng ( ಷ˖ϓ), aged 66, was appointed as our independent non-
executive Director on July 9, 2020 and is primarily responsible for providing independent
opinion and judgement to our Board.
Since February 1982, Dr. Tang has been teaching at Southeast University (ɽኪ)i n
the PRC and was promoted to professorship in May 1998. He has also been serving as the vice
president of Sanjiang University ( ɧϪኪ৫) in the PRC since December 31, 2024 and since
May 13, 2024 as an independent director of Jiangsu Pacific Precision Forging Co., Ltd. ( Ϫᘽ
ʮ̡), a company listed on the Shenzhen Stock Exchange (stock
code: 300258. SZ). He was an independent director of Nanjing Dashu Intelligence Technology
Co., Ltd (ʮ̡) (NEEQ: 430607) from January 18, 2022 to January
10, 2023.
DIRECTORS AND SENIOR MANAGEMENT
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Dr. Tang obtained his bachelor’s degree in mechanical manufacturing processes and
equipment and master’s degree in mechanical manufacturing from Southeast University (ی؇
ɽኪ) (formerly known as Nanjing Institute of Technology (ԯʈኪ৫)) in the PRC in July
1982 and January 1987, respectively. He obtained his doctoral degree in engineering in
mechanical design & manufacturing and automation from Southeast University (ɽኪ)i n
the PRC in April 2003.
Dr. HAN Xiaofang (ٹ)aged 41, was appointed as our independent non-executive
Director on June 20, 2025 and is primarily responsible for providing independent opinion and
judgement to our Board.
Dr. Han has been serving as an associate professor of accounting at Nanjing University
of Finance and Economics (ԯৌ຾ɽኪ) in the PRC since August 2013, focusing her
research primarily on accounting theory and practice. She has led or participated in several
national and provincial research projects and has published multiple articles in authoritative
journals, covering topics ranging from, including but not limited to, adverse audit opinions
relating to internal control, and to the effect of board size in fraud-affected companies on audit
quality.
Also, Dr. Han has been serving as an independent director and the chairlady of the audit
committee of Jiamei Food Packaging (Chuzhou) Co., Ltd. (̍ༀ(⑜ψ)ʮ̡),
a company listed on the Shenzhen Stock Exchange (stock code: 002969.SZ) since December
2023. Dr. Han is responsible for monitoring the company’s operations, financials, governance
and internal controls, while reviewing transactions, fund flows, and investment progress. Dr.
Han has therefore gained substantial practical knowledge and extensive experience in
supervising financial reporting, internal control and other accounting-related matters of listed
issuer, and has acquired the accounting or related financial management expertise required
under Rule 3.10(2) of the Listing Rules. Nevertheless, Dr. Han satisfies the independent
directors requirement under the Shenzhen Stock Exchange Main Board Listing Rules with her
academic title of associate professor of accounting at Nanjing University of Finance and
Economics (ԯৌ຾ɽኪ) and her master’s degree and doctoral degree in management
(accounting) from Y unan University of Finance and Economics (ৌ຾ɽኪ) and Dongbei
University of Finance and Economics (̏ৌ຾ɽኪ), respectively.
Dr. Han obtained her bachelor’s degree in marketing from Anhui University of
Technology ( τᏏʈุɽኪ) in the PRC in July 2005. Subsequently, Dr. Han obtained her
master’s degree in accounting and doctoral degree in management (accounting) from Y unan
University of Finance and Economics (ৌ຾ɽኪ) and Dongbei University of Finance and
Economics (̏ৌ຾ɽኪ) in the PRC in July 2007 and July 2010, respectively. Dr. Han was
a member of the Enterprise Accounting Standards Committee of the Chinese Accounting
Society (ࡰwhich is dedicated to professional
consultation of PRC GAAP , including discussions on their implementation and updates.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 284 ---
Mr. LIN Jinjun (ڲږ؍)aged 40, was appointed as our independent non-executive
director on June 20, 2025 and is primarily responsible for providing independent opinion and
judgement to our Board.
Mr. Lin worked at Barclays Plc from May 2014 to December 2020. Mr. Lin served as a
Director of the Asia Pacific Industrial Group within the Investment Banking Division at HSBC
Group Plc from September 2021 to April 2024. Since August 2024, Mr. Lin has been serving
as the Head of Corporate Development and M&A at BMTS Technology GmbH & Co. KG ( ௹
Ҧ(ɪऎ)ப΂ʮ̡), a global tier one supplier of automotive turbocharger systems. At
the same time, Mr. Lin also has been serving as the adviser to the board of director of Shineon
Innovation Technology Co., Ltd. (Έ (̏ԯ)ʮ̡), a leading global LED
package and module solution provider for lighting and display market since August 2024.
Mr. Lin obtained his bachelor’s degree in mathematics, operations research, and statistics
economics from University of Warwick in the United Kingdom in June 2007.
General
Save as disclosed in this section and the paragraph headed “Further Information about
Our Directors and Substantial Shareholders” in Appendix VI to this prospectus, each of our
Directors confirms that:
(1) he/she has obtained the legal advice referred to under Rule 3.09D of the Listing
Rules in June 2025, and understand his/her obligations as a director of a listed issuer
under the Listing Rules;
(2) he/she does not have any existing or proposed service contract with our Group other
than contracts expiring or determinable by the relevant member of our Group within
one year without payment of compensation (other than statutory compensation);
(3) he/she has no interest in the Shares within the meaning of Part XV of the SFO;
(4) he/she has not been a director of any other publicly listed company during the three
years prior to the Latest Practicable Date and as of the Latest Practicable Date;
(5) other than being a Director and/or member of our Company’s senior management,
he/she does not have any relationship with any other Directors, senior management
or substantial shareholders of our Company; and
(6) he/she has not completed his/her respective education programs as disclosed in this
section by way of attendance of long distance learning or online courses.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 285 ---
Each of our independent non-executive Directors has confirmed:
(1) his/her independence after taking into consideration each of the factors referred to
under Rules 3.13(1) to 3.13(8) of the Listing Rules;
(2) that he/she does not have any past or present financial or other interest in the
business of our Company or our subsidiaries, or any connection with any core
connected person of our Company; and
(3) that there are no other factors which may affect his/her independence at the time of
his/her appointment as our independent non-executive Director.
Save as disclosed herein, to the best knowledge, information and belief of our Directors
having made all reasonable inquiries, there was no other matter with respect to the appointment
of our Directors that needs to be brought to the attention of the Shareholders and there was no
information relating to our Directors that is required to be disclosed pursuant to Rule
13.51(2)(h) to (v) of the Listing Rules as of the Latest Practicable Date.
SENIOR MANAGEMENT
Our senior management is responsible for the day-to-day management and operation of
our business. The table below sets forth certain information in respect of the senior
management of our Company:
Name Age Position(s)
Date of
appointment
as senior
management
Date of
joining our
Group Role and responsibilities
Relationship
with Directors
and other senior
management
Mr. WU Bo
(ت)H1118/H1118/H1118/H1118/H1118/H1118
71 Executive Director,
chairman of the
Board and chief
strategic officer
December
31, 2021
February
2002
Responsible for convening and
presiding over meetings,
making decisions on major
issues
Father of Mr. WU
Kan
Mr. WU Kan
(юԹ) /H1118/H1118/H1118/H1118/H1118/H1118
41 Executive Director,
vice chairman of the
Board and general
manager
December
30, 2020
October 2013 Responsible for the overall
management, overall
strategic planning, and
business development of our
Company
Son of Mr. WU
Bo
Mr. ZHU Chunhua
(ശ) /H1118/H1118/H1118/H1118
55 Executive Director and
deputy general
manager
July 12, 2017 August 2011 Responsible for daily
operation of the Company
None
Mr. ZHOU Ailin
(؍)H1118/H1118/H1118/H1118
52 Executive Director and
deputy general
manager
July 9, 2020 May 2006 Responsible for daily
operation of the Company
None
DIRECTORS AND SENIOR MANAGEMENT
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--- page 286 ---
Name Age Position(s)
Date of
appointment
as senior
management
Date of
joining our
Group Role and responsibilities
Relationship
with Directors
and other senior
management
Mr. HE Lingjun
(ࠏ)H1118/H1118/H1118/H1118
52 Executive Director,
deputy general
manager and
financial director
August 13,
2021
May 2021 Responsible for financial
management and corporate
governance of the Company
None
Mr. ZHU
Zhangxing
(ϡᅶጳ) /H1118/H1118/H1118/H1118
48 Deputy general
manager
April 28,
2024
November
2022
Responsible for the overseas
business
None
Mr. YIN
Chenggang
(ँϓ፻) /H1118/H1118/H1118/H1118
43 Deputy general
manager
April 28,
2024
March 2007 Responsible for assisting the
general manager with the
daily operation of the
Company
None
Ms. XIAO
Tingting
(ӽణణ) /H1118/H1118/H1118/H1118
34 Secretary of the Board January 23,
2025
April 2022 Responsible for the
information disclosure and
investor relations affairs of
the Company
None
The following sets forth the biographies of our senior management:
For details of Mr. WU Bo (تMr. WU Kan ( юԹ), Mr. ZHU Chunhua (ശ), Mr.
ZHOU Ailin (؍and Mr. HE Lingjun (ࠏsee “— Board of Directors — Executive
Directors” in this section for details.
Mr. ZHU Zhangxing ( ϡᅶጳ), aged 48, served as the deputy general manager of our
Company.
Prior to joining our Group, Mr. Zhu Zhangxing worked at Lucent Technologies, a
company specializing in telecommunication industry, as a senior software engineer from
August 2003 to September 2006. From August 2009 to April 2016, Mr. Zhu served as the
director of Munich Private Equity Partners. From April 2016 to December 2019, he worked as
the Managing Director of investment department and was later promoted to partner position in
January 2020, at China Renaissance Capital Investment ( ਫ਼ᅃҳ༟). Mr. Zhu Zhangxing joined
our Group in November 2022 and was promoted to deputy general manager in April 2024.
Mr. Zhu Zhangxing obtained his bachelor’s degree in measurement & control technology
and instrumentation from Southeast University (ɽኪ) in the PRC in June 2000. He then
obtained his master’s degree in measurement & control technology and instrumentation from
Southeast University (ɽኪ) in the PRC in April 2003, and in information and
communication systems from Hamburg University of Technology ( ဏఝʈุɽኪ)i nt h e
Germany in June 2009, respectively.
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Mr. YIN Chenggang ( ँϓ፻), aged 43, served as the deputy general manager of our
Company.
Mr. Yin joined our Group in March 2007. From March 2007 to May 2023, he successively
served as an assistant to general manager, general manager of the business unit. In April 2024,
he was promoted to serve as the deputy general manager of our Company.
Mr. Yin obtained his bachelor’s degree in mechanical design from Jilin University (؍
ɽኪ) in the PRC in July 2004. He obtained his master’s degree in mechanical related
profession from Nanjing Agricultural University (ԯุ༵ɽኪ) in the PRC in July 2008.
Ms. XIAO Tingting ( ӽణణ), aged 34, served as the secretary to the Board of our
Company.
Prior to joining our Group, Ms. Xiao worked at the Anhui Branch of Pan-China Certified
Public Accountants (Special General Partnership) (ה(౷ஷΥྫ)) from
September 2012 to April 2014. From June 2014 to September 2015, Ms. Xiao worked at
Tianheng Certified Public Accountants (Special General Partnership) (ה(ࣿ
౷ஷΥྫ)). From October 2015 to May 2016, she worked at the securities department of
Changjiang Securities Co., Ltd. (ʮ̡), where she was responsible for
promoting institutional business cooperation. From June 2016 to August 2017, she served as
a senior investment manager at Nanjing Jizhi Xiexin Investment Management Co., Ltd. (ԯ
ʮ̡) where she was responsible for investment consultation. From
September 2017 to April 2022, Ms. Xiao worked as the investment director at Jiangsu Xinhua
Fengyu Capital Management Co., Ltd. (ʮ̡). Ms. Xiao joined our
Group on April 2022 and was promoted to the head of securities and investment department,
securities affairs representatives and the secretary to the Board in January 2023, July 2023 and
January 2025, respectively.
Ms. Xiao obtained her bachelor’s degree in financial engineering from Shandong
University of Finance and Economics (ৌ຾ɽኪ) in the PRC in July 2012. Ms. Xiao
obtained her master’s degree in business administration from Southeast University (ɽኪ)
in the PRC on December 2020. Ms. Xiao was accredited as a non-practicing certified public
accountant from The Chinese Institute of Certified Public Accountants in December 2015. In
September 2022, she obtained the secretary of the board of directors qualifications ( ໨ԫึ।
ࣸgranted by the Shenzhen Stock Exchange.
General
Save as disclosed in this section and the paragraph headed “Further Information about
Our Directors and Substantial Shareholders” in Appendix VI to this prospectus, each of our
senior management members confirms that:
(1) he/she does not hold and has not held any other positions in our Group and any other
members of our Group as of the Latest Practicable Date;
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(2) other than being a Director and/or member of our Company’s senior management,
he/she does not have any relationship with any Directors, other members of senior
management or substantial shareholders of our Company as of the Latest Practicable
Date;
(3) he/she does not hold and has not held any other directorships in public companies
the securities of which are listed on any securities market in Hong Kong or overseas
in the three years prior to the Latest Practicable Date and as of the Latest Practicable
Date; and
(4) he/she has not completed his/her respective education programs as disclosed in this
section by way of attendance of long distance learning or online courses.
JOINT COMPANY SECRETARIES
Ms. XIAO Tingting ( ӽణణ), see “— Senior Management” in this section for details.
Ms. POON Pui Man Hera ( ᆙ⪺͏) of Zhong Lun Law Firm LLP , an external service
provider, has been appointed as one of our joint company secretaries of our Company with
effect upon Listing. She is a solicitor qualified to practice in Hong Kong. Ms. Poon is currently
an associate of Zhong Lun Law Firm LLP , specialising in corporate finance work including
initial public offerings and post-listing compliance matters. Ms. Poon received her Juris Doctor
degree and Postgraduate Certificate in Laws from The Chinese University of Hong Kong in
July 2019 and August 2020, respectively.
COMPLIANCE ADVISER
We have appointed Maxa Capital Limited as our compliance adviser pursuant to Rule
3A.19 of the Listing Rules. Pursuant to Rule 3A.23 of the Listing Rules, the compliance
adviser will advise us on the following circumstances:
 before the publication of any announcements, circulars or financial reports;
 where a transaction, which might be a notifiable or connected transaction under
Chapters 14 and 14A of the Listing Rules is contemplated, including share issues
and share repurchases;
 where we propose to use the proceeds of the Global Offering in a manner different
from that detailed in this prospectus or where our business activities, developments
or results deviate from any forecast, estimate or other information in this prospectus;
and
 where the Stock Exchange makes an inquiry of us regarding unusual price
movement and trading volume or other issues under Rule 13.10 of the Listing Rules.
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Pursuant to Rule 3A.24 of the Listing Rules, Maxa Capital Limited will, in a timely
manner, inform us of any amendment or supplement to the Listing Rules and new or amended
laws and regulations in Hong Kong applicable to us.
The terms of the appointment shall commence on the Listing Date and end on the date
which we distribute our annual report of our financial results for the first full financial year
commencing after the Listing Date.
BOARD COMMITTEES
We have established the following committees on our Board: an audit committee, a
remuneration and appraisal committee, a nomination committee, a strategy committee and an
ESG committee. The committees operate in accordance with the terms of reference established
by our Board.
Audit Committee
We have established an audit committee with written terms of reference in compliance
with Rule 3.21 of the Listing Rules and paragraph D.3 of part 2 of the Corporate Governance
Code as set out in Appendix C1 to the Listing Rules (the “ Corporate Governance Code ”). The
Audit Committee consists of Dr. Han Xiaofang, Dr. Tang Wencheng and Mr. Lin Jinjun, with
Dr. Han Xiaofang being the chairlady of the committee. Dr. Han Xiaofang holds the
appropriate accounting or related financial management expertise as required under Rules
3.10(2) and 3.21 of the Listing Rules.
The primary duties of the Audit Committee are to assist our Board in providing an
independent view of the effectiveness of our financial reporting process, internal control and
risk management systems, overseeing the audit process, and performing other duties and
responsibilities as assigned by our Board, which includes amongst other things:
 proposing to our Board the appointment and replacement of external audit firms;
 supervising the implementation of our internal audit system;
 liaising between our internal audit department and external auditors;
 reviewing our financial information and related disclosures; and
 other duties conferred by our Board.
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Remuneration and Appraisal Committee
We have established a remuneration and appraisal committee with written terms of
reference in compliance with Rule 3.25 of the Listing Rules and paragraph E.1 of part 2 of the
Corporate Governance Code. The remuneration and appraisal committee consists of Mr. Lin
Jinjun, Dr. Han Xiaofang and Ms. Chen Yinlan, with Mr. Lin Jinjun being the chairperson of
the committee.
The primary duties of the remuneration and appraisal committee are to develop
remuneration and appraisal policies of our Directors, evaluate the performance, make
recommendations on the remuneration packages of our Directors and senior management and
evaluate and make recommendations on employee benefits, which include amongst other
things:
 establishing, reviewing and making recommendations to our Board on our policy
and structure concerning remuneration and appraisal of Directors and senior
management and on the establishment of a formal and transparent procedure for
developing policy on such remuneration and appraisal;
 determining the terms of the specific remuneration package of each Director and
members of senior management;
 reviewing and approving performance-based remuneration by reference to corporate
goals and objectives resolved by our Directors from time to time;
 reviewing and/or approving matters relating to share schemes under Chapter 17 of
the Listing Rules; and
 other duties conferred by our Board.
Nomination Committee
We have established a nomination committee with written terms of reference in
compliance with paragraph B.3 of part 2 of the Corporate Governance Code. The Nomination
Committee consists of Dr. Tang Wencheng, Dr. Han Xiaofang and Mr. Wu Kan, with Dr. Tang
Wencheng being the chairperson of the committee.
The primary duties of the Nomination Committee are to make recommendations to our
Board in relation to the appointment and removal of Directors which includes, amongst other
things:
 reviewing the structure, size and composition of our Board on a regular basis,
assisting our Board in maintaining a board skills matrix, and making
recommendations to our Board regarding any proposed changes;
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 identifying, selecting or making recommendations to our Board on the selection of
individuals nominated for directorships;
 assessing the independence of independent non-executive Directors;
 making recommendations to our Board on relevant matters relating to the
appointment, re-appointment and removal of our Directors;
 supporting our Company’s regular evaluation of our Board’s performance; and
 other duties conferred by our Board.
Strategy Committee
Our Board has established a strategy committee (the “ Strategy Committee ”) with written
terms of reference. The primary duties of the Strategy Committee are to research on making
recommendations to our Board on our long-term development strategies, major decisions, and
environmental, social and governance matters. The Strategy Committee comprises Mr. Wu Bo,
Mr. Wu Kan, Mr. Zhu Chunhua, Mr. Zhou Ailin and Dr. Tang Wencheng, with Mr. Wu Bo as
the chairperson.
ESG Committee
Our Company has established the environmental, social and governance committee (the
“ESG Committee ”) which consists of Mr. Wu Bo, Dr. Tang Wencheng and Mr. He Lingjun and
is chaired by Mr. Wu Bo. For the main duties of the ESG Committee, please refer to the section
headed “Business — Environmental, Social and Corporate Governance — Corporate
Governance” in this prospectus.
CORPORATE GOVERNANCE
Our Company is committed to achieving high standards of corporate governance with a
view to safeguarding the interests of our Shareholders. To accomplish this, our Company
intends to comply with the corporate governance requirements under the Corporate
Governance Code after the Listing.
Board Diversity
We seek to achieve board diversity through the consideration of a number of factors,
including but not limited to gender, age, cultural and educational background, ethnicity,
professional experience, skills, knowledge and length of service. We have adopted a board
diversity policy (the “ Board Diversity Policy ”) to enhance the effectiveness of our Board and
to maintain a high standard of corporate governance. Pursuant to the Board Diversity Policy,
in reviewing and assessing suitable candidates to serve as a Director, the Nomination
Committee will consider a range of diversity perspectives with reference to our Company’s
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business model and specific needs, including but not limited to gender, age, language, cultural
and educational background, professional qualifications, skills, knowledge, industry, regional
experience and length of service. Furthermore, the Nomination Committee is responsible for
reviewing the diversity of our Board, reviewing the Board Diversity Policy from time to time,
developing and reviewing measurable objectives for implementing the Board Diversity Policy,
and monitoring the progress on achieving these measurable objectives in order to ensure that
the Board Diversity Policy remains effective.
Our Directors have a balanced mixed of knowledge and skills, including but not limited
to overall business management, finance and accounting and research and development. They
obtained degrees in various majors including mechanical manufacturing engineering,
automation, physics, marketing and statistic economics. Furthermore, our Board has a
relatively wide range of ages, ranging from 40 years old to 71 years old, and consists of seven
male members and two female members. Our Company has reviewed the membership,
structure and composition of our Board, and is of the opinion that the structure of our Board
is reasonable, and the experience and skills of the Directors in various aspects and fields can
enable our Company to maintain a high standard of operation.
Our Company will, among others, (i) disclose the biographical details of each Director
and (ii) report on the implementation of the Board Diversity Policy (including whether we have
achieved board diversity) in its annual corporate governance report. In particular, our Company
will take opportunities to increase the proportion of female members of our Board when
selecting and recommending suitable candidates for Board appointments to help enhance
gender diversity in accordance with stakeholder expectations and recommended best practices.
Our Company also intends to promote gender diversity when recruiting staff at the mid to
senior level so that our Company will have a pipeline of female senior management and
potential successors to our Board. We believe that such merit-based selection process with
reference to our Board Diversity Policy and the nature of our business will be in the best
interests of our Group and our Shareholders as a whole.
COMPETITION
Each of our Directors confirms that as of the Latest Practicable Date, he/she did not have
any interest in a business which materially competes or is likely to materially compete, directly
or indirectly, with our business, and requires disclosure under Rule 8.10 of the Listing Rules.
COMPENSATION OF DIRECTORS
We offer our Directors remuneration the form of directors’ fees, salaries, allowance and
other benefits, discretionary bonuses, retirement scheme contribution and share-based
compensation. Our Directors’ remuneration is determined with reference to the relevant
Director’s experience and qualifications, level of responsibility, performance and the time
devoted to our business, and the prevailing market conditions. Our independent non-executive
Directors receive emolument based on their responsibilities.
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The aggregate amounts of remuneration (including directors’ fees, salaries, allowance and
other benefits, discretionary bonuses, retirement scheme contributions) which were paid or
payable to our Directors for the financial years ended December 31, 2022, 2023, 2024 and the
nine months ended September 30, 2025 were RMB6.5 million, RMB6.5 million, RMB6.2
million and RMB4.3 million, respectively.
It is estimated that the aggregate amount of remuneration (including salaries, allowances,
benefits in kind, performance related bonuses, retirement scheme contributions, and share-
based compensation) payable to our Directors for the financial year ending December 31, 2026
would be approximately RMB7.68 million under arrangements in force as of the date of this
prospectus.
For the financial years ended December 31, 2022, 2023, 2024 and the nine months ended
September 30, 2025, there were nil, nil, 1 and nil Director among the five highest paid
individuals, respectively. The aggregate amounts of remuneration (including salaries,
allowances, benefits in kind, performance related bonuses, retirement scheme contributions,
and share-based compensation) which were paid or payable by our Group to our five highest
paid individuals (excluding Director) for the financial years ended December 31, 2022, 2023,
2024 and the nine months ended September 30, 2025 were RMB10.4 million, RMB12.0
million, RMB9.2 million and RMB8.9 million, respectively.
During the Track Record Period, (i) no remuneration was paid to our Directors or the five
highest paid individuals as an inducement to join, or upon joining our Group, (ii) no
compensation was paid to, or receivable by, our Directors, past Directors, or the five highest
paid individuals for the loss of office as a director of any member of our Group or any other
office in connection with the management of the affairs of any member of our Group, and (iii)
none of our Directors waived or agreed to waive any emoluments.
Except as disclosed above, no other payment has been paid, or is payable, by our Group
to our Directors or the five highest paid individuals of our Group during the Track Record
Period.
For additional information on remuneration of Directors during the Track Record Period
as well as information on the five highest paid individuals, see Notes 8 and 9 to the
Accountants’ Report.
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Upon Listing, certain transactions between us and our connected persons will constitute
continuing connected transactions under Chapter 14A of the Listing Rules.
OUR CONNECTED PERSON
We have entered into certain transactions in the ordinary and normal course of our
business with the following connected person, which will constitute continuing connected
transactions upon the completion of the Listing:
Connected persons Connected relationship
Nanjing Primest /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118One of our Controlling Shareholders
Estun (Nanjing) Medical
Technology Co., Ltd.
(౶཭(ԯ)ࠢ
ʮ̡)
(“Estun Medical ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
As of the Latest Practicable Date, Mr. Wu, one of our
Controlling Shareholders, our executive Director and chief
strategic officer, indirectly exercised approximately 61.71%
of the voting rights in Estun Medical through Nanjing
Primest. Accordingly, Estun Medical is an associate of Mr.
Wu and will become our connected person upon completion
of the Listing.
Nanjing Estun Codroid
Technology Co., Ltd.
(ࠢ
ʮ̡)
(“Estun Codroid ”) /H1118/H1118/H1118/H1118/H1118/H1118
As of the Latest Practicable Date, Mr. Wu, one of our
Controlling Shareholders, our executive Director and chief
strategic officer, indirectly exercised approximately 39.07%
of the voting rights in Estun Codroid through Nanjing
Primest. Accordingly, Estun Codroid is an associate of Mr.
Wu and will become our connected person upon completion
of the Listing.
Lianyungang Sikesi Robotic
Technology Co., Ltd.
(Ҧ
ʮ̡)
(“Lianyungang Sikesi ”) /H1118/H1118
As of the Latest Practicable Date, Mr. Feng Hutian (͞)
(“Mr. Feng ”), being a former independent director of our
Company in the last 12 months, directly and indirectly
exercised over 30% of the voting rights in aggregate in
Lianyungang Sikesi. Accordingly, Lianyungang Sikesi is an
associate of Mr. Feng and will become our connected person
upon completion of the Listing.
Mr. Feng tendered his resignation on May 28, 2025 to devote
more time on pursuing his own personal startup ventures.
Further, based on the independent due diligence work
conducted, the Sole Sponsor confirms that there was no other
matter with respect to the resignation of Mr. Feng that needs
to be brought to the attention of the Stock Exchange.
Estun Future Technology
Research Institute Co., Ltd,
(Ӻ
ʮ̡)
(“Estun Future ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
As of the Latest Practicable Date, Estun Future is a wholly-
owned subsidiary of Nanjing Primest, one of our Controlling
Shareholder. Accordingly, Estun Future is an associate of
Estun Primest and will become our connected person upon
completion of the Listing.
CONNECTED TRANSACTIONS
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SUMMARY OF OUR CONNECTED TRANSACTIONS
Nature of the transaction Counterparty
Category of
the connected
transaction
Applicable
Listing Rules Waiver sought
1. Procurement of Mechanical
Material Framework
Agreement
Estun Medical Fully exempt 14A.76(1)(a) N/A
2. Property Leasing
Framework Agreement I
Nanjing
Primest
Fully exempt 14A.76(1)(a) N/A
3. Property Leasing
Framework Agreement II
Estun Medical Fully exempt 14A.76(1)(a) N/A
4. Property Leasing
Framework Agreement III
Estun Codroid Fully exempt 14A.76(1)(a) N/A
5. Property Leasing
Framework Agreement IV
Estun Future Fully exempt 14A.76(1)(a) N/A
6. Procurement of Intelligent
Components Framework
Agreement
Estun Codroid Partially
exempt
14A.76(2)
14A.105
Announcement
7. Procurement of Mechanical
Material Framework
Agreement
Lianyungang
Sikesi
Partially
exempt
14A.76(2)
14A.105
Announcement
8. Provision of Automatic
Core Component
Framework Agreement I
Estun Medical Partially
exempt
14A.76(2)
14A.105
Announcement
9. Provision of Automatic
Core Component
Framework Agreement II
Estun Codroid Partially
exempt
14A.76(2)
14A.105
Announcement
FULLY-EXEMPT CONTINUING CONNECTED TRANSACTIONS
1. Procurement of Mechanical Material Framework Agreement
The Company has entered into a framework agreement with Estun Medical on January 28,
2026 (the “ Procurement of Mechanical Material Framework Agreement ”), pursuant to
which the Company agreed to procure basic mechanical materials, including, among others,
materials including motor shaft and the material processing services, from Estun Medical as the
Company may require from time to time.
The pricing of the materials and processing service from Estun Medical is to be
determined by the Company and Estun Medical on normal commercial terms, negotiated on
arm’s length basis, with reference to, among others, the costs, quantities and quality of the
mechanical materials from Estun Medical, the prevailing market conditions and the principle
of fairness.
CONNECTED TRANSACTIONS
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The initial term of the Procurement of Mechanical Material Framework Agreement will
commence on the Listing and effective for three years, subject to renewal upon the mutual
consent of both parties and compliance with the requirements of the Listing Rules and
applicable laws and regulations. The transactions contemplated under the Procurement of
Mechanical Material Framework Agreement have been conducted in the ordinary and usual
course of business and on normal commercial terms or better. As all of the applicable
percentage ratios calculated under Chapter 14A of the Listing Rules will be less than 0.1%, the
Procurement of Mechanical Material Framework Agreement will be fully exempt from the
reporting, annual review, announcement and independent Shareholders’ approval requirements
under Chapter 14A of the Listing Rules pursuant to Rule 14A.76(1) of the Listing Rules.
2. Property Leasing Framework Agreement I
The Company has entered into a framework agreement with Nanjing Primest on January
28, 2026 (the “ Property Leasing Framework Agreement I ”), pursuant to which the Company
agreed to lease one property to Nanjing Primest. The rental fees payable by Nanjing Primest
is determined by the Company and Nanjing Primest on normal commercial terms, negotiated
on arm’s length basis, with reference to, among others, (i) the area leased, geographic location
and condition of surrounding area; (ii) the prevailing market rent in respect of the property of
the same or similar nature in the same region; and (iii) the estimated changes in the prevailing
market rent in the future.
The initial term of the Property Leasing Framework Agreement I will commence on the
Listing and effective for three years, subject to renewal upon the mutual consent of both parties
and compliance with the requirements of the Listing Rules and applicable laws and regulations.
The transactions contemplated under the Property Leasing Framework Agreement I have been
conducted in the ordinary and usual course of business and on normal commercial terms or
better. As all of the applicable percentage ratios calculated under Chapter 14A of the Listing
Rules will be less than 0.1%, the Property Leasing Framework Agreement I will be fully
exempt from the reporting, annual review, announcement and independent Shareholders’
approval requirements under Chapter 14A of the Listing Rules pursuant to Rule 14A.76(1) of
the Listing Rules.
3. Property Leasing Framework Agreement II
The Company has entered into a framework agreement with Estun Medical on January 28,
2026 (the “ Property Leasing Framework Agreement II ”), pursuant to which the Company
agreed to lease one property to Estun Medical. The rental fees payable by Estun Medical is
determined by the Company and Estun Medical on normal commercial terms, negotiated on
arm’s length basis, with reference to, among others, (i) the area leased, geographic location and
condition of surrounding area; (ii) the prevailing market rent in respect of the property of the
same or similar nature in the same region; and (iii) the estimated changes in the prevailing
market rent in the future.
CONNECTED TRANSACTIONS
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The initial term of the Property Leasing Framework Agreement II will commence on the
Listing and effective for three years, subject to renewal upon the mutual consent of both parties
and compliance with the requirements of the Listing Rules and applicable laws and regulations.
The transactions contemplated under the Property Leasing Framework Agreement II have been
conducted in the ordinary and usual course of business and on normal commercial terms or
better. As all of the applicable percentage ratios calculated under Chapter 14A of the Listing
Rules will be less than 0.1%, the Property Leasing Framework Agreement II will be fully
exempt from the reporting, annual review, announcement and independent Shareholders’
approval requirements under Chapter 14A of the Listing Rules pursuant to Rule 14A.76(1) of
the Listing Rules.
4. Property Leasing Framework Agreement III
The Company has entered into a framework agreement with Estun Codroid on January 28,
2026 (the “ Property Leasing Framework Agreement III ”), pursuant to which the Company
agreed to lease one property to Estun Codroid. The rental fees payable by Estun Codroid is
determined by the Company and Estun Codroid on normal commercial terms, negotiated on
arm’s length basis, with reference to, among others, (i) the area leased, geographic location and
condition of surrounding area; (ii) the prevailing market rent in respect of the property of the
same or similar nature in the same region; and (iii) the estimated changes in the prevailing
market rent in the future.
The initial term of the Property Leasing Framework Agreement III will commence on the
Listing and effective for three years, subject to renewal upon the mutual consent of both parties
and compliance with the requirements of the Listing Rules and applicable laws and regulations.
The transactions contemplated under the Property Leasing Framework Agreement III have been
conducted in the ordinary and usual course of business and on normal commercial terms or
better. As all of the applicable percentage ratios calculated under Chapter 14A of the Listing
Rules will be less than 0.1%, the Property Leasing Framework Agreement III will be fully
exempt from the reporting, annual review, announcement and independent Shareholders’
approval requirements under Chapter 14A of the Listing Rules pursuant to Rule 14A.76(1) of
the Listing Rules.
5. Property Leasing Framework Agreement IV
The Company has entered into a framework agreement with Estun Future on January 28,
2026 (the “ Property Leasing Framework Agreement IV ”), pursuant to which the Company
agreed to lease one property to Estun Future. The rental fees payable by Estun Future is
determined by the Company and Estun Future on normal commercial terms, negotiated on
arm’s length basis, with reference to, among others, (i) the area leased, geographic location and
condition of surrounding area; (ii) the prevailing market rent in respect of the property of the
same or similar nature in the same region; and (iii) the estimated changes in the prevailing
market rent in the future.
CONNECTED TRANSACTIONS
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The initial term of the Property Leasing Framework Agreement IV will commence on the
Listing and effective for three years, subject to renewal upon the mutual consent of both parties
and compliance with the requirements of the Listing Rules and applicable laws and regulations.
The transactions contemplated under the Property Leasing Framework Agreement IV have been
conducted in the ordinary and usual course of business and on normal commercial terms or
better. As all of the applicable percentage ratios calculated under Chapter 14A of the Listing
Rules will be less than 0.1%, the Property Leasing Framework Agreement IV will be fully
exempt from the reporting, annual review, announcement and independent Shareholders’
approval requirements under Chapter 14A of the Listing Rules pursuant to Rule 14A.76(1) of
the Listing Rules.
Further, since the continuing connected transactions contemplated under the Property
Leasing Framework Agreement I, II, III and IV are similar in nature and taking into account
the association of Mr. Wu and Estun Primest, one of our Controlling Shareholders, such
transactions should be aggregated pursuant to Rule 14A.81 of the Listing Rules. Given that the
transactions contemplated under the Property Leasing Framework Agreement I, II, III and IV
have been conducted in the ordinary and usual course of business and on normal commercial
terms or better, and as the highest applicable percentage ratio calculated after the aggregation
is less than 0.1%, the transactions contemplated under the Property Leasing Framework
Agreement I, II, III and IV will be fully exempt from the reporting, annual review,
announcement and independent Shareholders’ approval requirements under Chapter 14A of the
Listing Rules pursuant to Rule 14A.76(1) of the Listing Rules.
PARTIALLY-EXEMPT CONTINUING CONNECTED TRANSACTIONS
1. Procurement of Intelligent Components Framework Agreement
Principal Terms
On January 28, 2026, our Company, for itself and on behalf of its subsidiaries, entered
into a framework agreement (the “ Procurement of Intelligent Components Framework
Agreement ”) with Estun Codroid, pursuant to which, our Group will procure from Estun
Codroid products including intelligent core components and joint modules.
The initial term of the Procurement of Intelligent Components Framework Agreement will
commence on the Listing and effective for one year. Both parties or their respective
subsidiaries will enter into separate underlying agreements which will set out the specific terms
and conditions according to the principles provided in the Procurement of Intelligent
Components Framework Agreement.
Reasons for the Transaction
Our Group has been purchasing such materials from Estun Codroid during the Track
Record Period in the ordinary and usual course of our business. Our Group and Estun Codroid
has therefore established a stable business relationship, and Estun Codroid has acquired a
comprehensive understanding of our business and operational requirements of the materials
and processing service that we need.
CONNECTED TRANSACTIONS
– 288 –


--- page 299 ---
Therefore, we believe it is in the best interest of the Group and our Shareholders as a
whole to continue to procure such materials from Estun Codroid which is capable of fulfilling
our demands with a stable and high-quality supply of intelligent core components and joint
modules on terms which are similar to or better than those offered by Independent Third
Parties.
Consideration and Pricing Policies
The fee charged by Estun Codroid for the materials to be supplied to our Group pursuant
to the Procurement of Intelligent Components Framework Agreement shall be determined by
commercial negotiation between the parties according to the principles of fairness and
reasonableness, taking into account various factors including but not limited to the type of
materials, transaction volume and the prices for the procurement of materials of similar nature,
type and quantity by our Group to other Independent Third Parties in the market.
Historical Amounts
For the years ended December 31, 2022, 2023, 2024 and the nine months ended
September 30, 2025, the historical transaction amounts with respect to our procurement of the
materials and processing service from Estun Codroid were approximately RMB0, RMB0,
RMB7.7 million and RMB12.7 million, respectively. The fluctuation to the historical
transaction amount was primarily due to the fact that Estun Codroid was established in July
2022 and our Group only commenced to procure intelligent core components and joint modules
from Estun Codroid in 2024.
Annual Caps
We expect the maximum aggregate amount payable by our Group to Estun Codroid under
the Procurement of Intelligent Components Framework Agreement for the year ending
December 31, 2026 to be as follows:
For the year ending December 31,
2026
(RMB’000)
22,000
The proposed annual cap, which is higher than the historical transaction amounts, is
determined based on:
(i) the historical amounts of the transactions between the Group and Estun Codroid
during the Track Record Period in respect of the supply of intelligent core
components and joint modules; and
CONNECTED TRANSACTIONS
– 289 –


--- page 300 ---
(ii) the expected increase in the demand of our Group for the intelligent core
components and joint modules, considering our plan and effort to enhance our
production volume.
Listing Rules Implications
As the highest applicable percentage ratio of the transactions under the Procurement of
Intelligent Components Framework Agreement for the year ending December 31, 2026,
calculated for the purpose of Chapter 14A of the Listing Rules is higher than 0.1% but below
5% on an annual basis, such transactions will, upon Listing, constitute continuing connected
transactions of our Company subject to the annual reporting requirement under Rules 14A.49
and 14A.71 of the Listing Rules and the announcement requirement under Rule 14A.35 of the
Listing Rules but exempt from the independent Shareholders’ approval requirements under
Rule 14A.36 of the Listing Rules.
2. Procurement of Mechanical Material Framework Agreement
Principal Terms
On January 28, 2026, our Company, for itself and on behalf of its subsidiaries, entered
into a framework agreement (the “ Procurement of Mechanical Material Framework
Agreement ”) with Lianyungang Sikesi, pursuant to which, our Group will procure from
Lianyungang Sikesi mechanical materials including ball screw spline.
The initial term of the Procurement of Mechanical Material Framework Agreement will
commence on the Listing and end on December 31, 2026. Both parties or their respective
subsidiaries will enter into separate underlying agreements which will set out the specific terms
and conditions according to the principles provided in the Procurement of Mechanical Material
Framework Agreement.
Reasons for the Transaction
Our Group has been purchasing such materials from Lianyungang Sikesi during the Track
Record Period in the ordinary and usual course of our business. Our Group and Lianyungang
Sikesi have therefore established a long-term and stable business relationship, and
Lianyungang Sikesi has acquired a comprehensive understanding of our business and
operational requirements of the materials and processing service that we need.
Therefore, we believe it is in the best interest of the Group and our Shareholders as a
whole to continue to procure such materials from Lianyungang Sikesi which is capable of
fulfilling our demands with a stable and high-quality supply of materials and processing
service on terms which are similar to or better than those offered by Independent Third Parties.
CONNECTED TRANSACTIONS
– 290 –


--- page 301 ---
Consideration and Pricing Policies
The fee charged by Lianyungang Sikesi for the materials to be supplied to our Group
pursuant to the Procurement of Mechanical Material Framework Agreement shall be
determined by commercial negotiation between the parties according to the principles of
fairness and reasonableness, taking into account various factors including but not limited to the
type of materials, transaction volume and the prices for the procurement of materials of similar
nature, type and quantity by our Group to other Independent Third Parties in the market.
Historical Amounts
For the years ended December 31, 2022, 2023, 2024 and the nine months ended
September 30, 2025, the historical transaction amounts with respect to our procurement of the
materials and processing service from Lianyungang Sikesi were approximately RMB0,
RMB1.2 million, RMB6.7 million and RMB6.2 million, respectively. The fluctuation to the
historical transaction amount was primarily due to the fact that the mechanical materials
involved were originally imported materials where our Group had decided to substitute the
mechanical materials to domestic production since 2023 gradually so as to lower our
production cost.
Annual Caps
We expect the maximum aggregate amount payable by our Group to Lianyungang Sikesi
under the Procurement of Mechanical Material Framework Agreement for the years ending
December 31, 2026
(1) to be as follows:
For the year ending December 31,
2026
(RMB’000)
16,000
The proposed annual caps, which are higher than the historical transaction amounts, are
determined based on:
(i) the historical amounts of the transactions between the Group and Lianyungang
Sikesi during the Track Record Period in respect of the supply of the mechanical
materials; and
(ii) the expected increase in the demand of our Group for the mechanical materials due
to the fact that the Group is gradually substitute the procurement of mechanical
materials to domestic production.
Note:
(1) Lianyungang Sikesi becomes our connected person only because Mr. Feng, being a former independent
director of our Company in the last 12 months, directly exercised over 30% of the voting rights in
Lianyungang Sikesi. Since Mr. Feng will no longer be our connected person after the twelve-months
period, the transaction between Lianyungang Sikesi and our Company will no longer constitute a
connected transaction and therefore annual cap for the year ending December 31, 2027 and 2028 are not
included in this prospectus.
CONNECTED TRANSACTIONS
– 291 –


--- page 302 ---
Listing Rules Implications
As the percentage ratio of the transactions under the Procurement of Mechanical Material
Framework Agreement for the year ending December 31, 2026 calculated for the purpose of
Chapter 14A of the Listing Rules is higher than 0.1% but below 5% on an annual basis, such
transactions will, upon Listing, constitute continuing connected transactions of our Company
subject to the annual reporting requirement under Rules 14A.49 and 14A.71 of the Listing
Rules and the announcement requirement under Rule 14A.35 of the Listing Rules but exempt
from the independent Shareholders’ approval requirements under Rule 14A.36 of the Listing
Rules.
3. Provision of Automatic Core Component Framework Agreement I
Principal Terms
On January 28, 2026, our Company, for itself and on behalf of its subsidiaries, entered
into a framework agreement (the “ Provision of Automatic Core Component Framework
Agreement I ”) with Estun Medical, pursuant to which, our Group will provide automatic core
components (including motor shaft and motor rotor) to Estun Medical.
The initial term of the Provision of Automatic Core Component Framework Agreement I
will commence on the Listing and effective for three years. Both parties or their respective
subsidiaries will enter into separate underlying agreements which will set out the specific terms
and conditions according to the principles provided in the Provision of Automatic Core
Component Framework Agreement I.
Reasons for the Transaction
Our Group has been providing automatic core components to Estun Medical during the
Track Record Period in the ordinary and usual course of our business. Our Group and Estun
Medical has therefore established a long-term and stable business relationship. We are not and
will not be bound to collaborate with Estun Medical, and we will only manufacture and provide
the required products to Estun Medical if we consider it is in the interests of our Company and
Shareholders as a whole. Such collaboration with Estun Medical not only brings our Group
additional sales but also the opportunities to expand our reach and further promote our
offerings, we therefore consider the Provision of Automatic Core Component Framework
Agreement I to be consistent with the business and commercial objectives of our Company.
Consideration and Pricing Policies
The fee to be charged on Estun Medical for the automatic core component to be procured
from our Group pursuant to the Provision of Automatic Core Component Framework
Agreement I shall be determined by commercial negotiation between the parties according to
the principles of fairness and reasonableness, taking into account various factors including but
not limited to the type of materials, transaction volume and the prices for the procurement of
materials of similar nature, type and quantity by our Group to other Independent Third Parties
in the market.
CONNECTED TRANSACTIONS
– 292 –


--- page 303 ---
Historical Amounts
For the years ended December 31, 2022, 2023, 2024 and the nine months ended
September 30, 2025, the historical transaction amounts with respect to us providing the
materials and processing service to Estun Medical were approximately RMB3.6 million,
RMB6.2 million, RMB2.3 million and RMB0.4 million, respectively. The fluctuation to the
historical transaction amount was primarily due to the fact that in 2023, apart from the
provision of automatic core components to Estun Medical, our Group had also provided certain
technical service to Estun Medical.
Annual Caps
We expect the maximum aggregate amount payable by Estun Medical to our Group under
the Provision of Automatic Core Component Framework Agreement I for the years ending
December 31, 2026, 2027 and 2028 to be as follows:
For the year ending December 31,
2026 2027 2028
(RMB’000) (RMB’000) (RMB’000)
1,000 1,000 1,000
The proposed annual caps are determined based on:
(i) the historical amounts of the transactions between the Group and Estun Medical
during the Track Record Period in respect of the provision of automatic core
components; and
(ii) the expected decrease in demand of Estun Medical on such automatic core
components after taking into consideration the actual transaction amount as of
September 30, 2025.
Listing Rules Implications
Since the continuing connected transactions contemplated under the Provision of
Automatic Core Component Framework Agreemen tI&I I (see below) are similar in nature and
taking into account the association of Mr. Wu, one of our Controlling Shareholders, our
executive Director and chief strategic officer, such transactions should be aggregated pursuant
to Rule 14A.81 of the Listing Rules.
As the highest applicable percentage ratio of the transactions under the Provision of
Automatic Core Component Framework Agreement I and II for the years ending December 31,
2026, 2027 and 2028 calculated for the purpose of Chapter 14A of the Listing Rules is higher
than 0.1% but below 5% on an annual basis, such transactions will, upon Listing, constitute
continuing connected transactions of our Company subject to the annual reporting requirement
under Rules 14A.49 and 14A.71 of the Listing Rules and the announcement requirement under
Rule 14A.35 of the Listing Rules but exempt from the independent Shareholders’ approval
requirements under Rule 14A.36 of the Listing Rules.
CONNECTED TRANSACTIONS
– 293 –


--- page 304 ---
4. Provision of Automatic Core Component Framework Agreement II
Principal Terms
On January 28, 2026, our Company, for itself and on behalf of its subsidiaries, entered
into a framework agreement (the “ Provision of Automatic Core Component Framework
Agreement II ”) with Estun Codroid, pursuant to which, our Group will provide automatic core
components to Estun Codroid.
The initial term of the Provision of Automatic Core Component Framework Agreement II
will commence on the Listing and effective for three years. Both parties or their respective
subsidiaries will enter into separate underlying agreements which will set out the specific terms
and conditions according to the principles provided in the Provision of Automatic Core
Component Framework Agreement II.
Reasons for the Transaction
Our Group has been providing automatic core components to Estun Codroid during the
Track Record Period in the ordinary and usual course of our business. Our Group and Estun
Codroid has therefore established a long-term and stable business relationship. We are not and
will not be bound to collaborate with Estun Codroid, and we will only manufacture and provide
the required products to Estun Codroid if we consider it is in the interests of our Company and
Shareholders as a whole. Such collaboration with Estun Codroid not only brings our Group
additional sales but also the opportunities to expand our reach and further promote our
offerings, we therefore consider the Provision of Automatic Core Component Framework
Agreement II to be consistent with the business and commercial objectives of our Company.
Consideration and Pricing Policies
The fee to be charged on Estun Codroid for the automatic core component to be procured
from our Group pursuant to the Provision of Automatic Core Component Framework
Agreement II shall be determined by commercial negotiation between the parties according to
the principles of fairness and reasonableness, taking into account various factors including but
not limited to the type of materials, transaction volume and the prices for the procurement of
materials of similar nature, type and quantity by our Group to other Independent Third Parties
in the market.
Historical Amounts
For the years ended December 31, 2022, 2023, 2024 and nine months ended September
30, 2025, the historical transaction amounts with respect to us providing the materials and
processing service to Estun Codroid were approximately RMB0, RMB0.2 million, RMB3.5
million and RMB3.3 million, respectively. The fluctuation to the historical transaction amount
was primarily due to the fact that Estun Codroid was established in July 2022 and our Group
only commenced to provide automatic core component to Estun Codroid in 2023 and the scale
of business cooperation gradually increase as per the development of Estun Codroid.
CONNECTED TRANSACTIONS
– 294 –


--- page 305 ---
Annual Caps
We expect the maximum aggregate amount payable by Estun Codroid to our Group under
the Provision of Automatic Core Component Framework Agreement II for the years ending
December 31, 2026, 2027 and 2028 to be as follows:
For the year ending December 31,
2026 2027 2028
(RMB’000) (RMB’000) (RMB’000)
4,000 3,000 3,000
The proposed annual caps, which are slightly higher than the historical transaction
amounts, are determined based on:
(i) the historical amounts of the transactions between the Group and Estun Codroid
during the Track Record Period in respect of the provision of automatic core
components; and
(ii) the expected gradual decrease in demand of Estun Codroid on automatic core
components due to the diversification of suppliers basis by Estun Codriod.
Listing Rules Implications
Since the continuing connected transactions contemplated under the Provision of
Automatic Core Component Framework Agreemen tI&I Ia r e similar in nature and taking into
account the association of Mr. Wu, one of our Controlling Shareholders, our executive Director
and chief strategic officer, such transactions should be aggregated pursuant to Rule 14A.81 of
the Listing Rules.
As the highest applicable percentage ratio of the transactions under the Provision of
Automatic Core Component Framework Agreement I and II for the years ending December 31,
2026, 2027 and 2028 calculated for the purpose of Chapter 14A of the Listing Rules is higher
than 0.1% but below 5% on an annual basis, such transactions will, upon Listing, constitute
continuing connected transactions of our Company subject to the annual reporting requirement
under Rules 14A.49 and 14A.71 of the Listing Rules and the announcement requirement under
Rule 14A.35 of the Listing Rules but exempt from the independent Shareholders’ approval
requirements under Rule 14A.36 of the Listing Rules.
CONNECTED TRANSACTIONS
– 295 –


--- page 306 ---
INTERNAL CONTROL PROCEDURES ADOPTED BY THE COMPANY IN RESPECT
OF THE IMPLEMENTATION OF CONTINUING CONNECTED TRANSACTION
FRAMEWORK AGREEMENTS
Our Group adopts the following internal control measures to ensure that the transactions
will be carried out in accordance with the terms of the aforementioned framework agreements,
including the pricing policies, and in compliance with all the applicable requirements under the
Listing Rules:
 we have adopted a connected transactions management policy for the purpose of
ensuring that connected transactions under the framework agreement will be
conducted in a fair manner, on normal commercial terms and in the interests of our
Company and our Shareholders as a whole;
 prior to the execution of the underlying agreements under the Procurement of
Intelligent Components Framework Agreement, Procurement of Mechanical
Material Framework Agreement, Provision of Automatic Core Component
Framework Agreement I and Provision of Automatic Core Component Framework
Agreement II (the “ Partially Exempted Framework Agreements ”), the operation
department of the relevant business sector of our Group will compare the terms of
the proposed transactions (including pricing and other contractual terms) with those
similar transactions entered with Independent Third Parties or the terms offered to
or by Independent Third Parties (as the case may be) to ensure that the terms of
agreements under the Partially Exempted Framework Agreements shall be no less
favourable to our Group than terms between our Group and the Independent Third
Parties;
 the finance team of our Group shall regularly examine the pricing of the transactions
under the Partially Exempted Framework Agreements to ensure that those
transactions are conducted in accordance with the pricing terms therein;
 the internal control team of our Group shall periodically review the pricing of the
transactions under the Partially Exempted Framework Agreements against the prices
negotiated between our Group and Independent Third Parties for similar products,
to ensure that the terms of the agreements under the Partially Exempted Framework
Agreements are not less favourable to our Group than terms between our Group and
the Independent Third Parties;
 the finance and business teams of our Group shall periodically monitor the
transaction amount under the Partially Exempted Framework Agreements and, when
it is expected that the transaction amount might exceed the annual cap, promptly
report in accordance with our Group’s connected transactions management policy to
ensure that the Company complies with all the applicable requirements under the
Listing Rules, including to revise the relevant annual cap when appropriate;
CONNECTED TRANSACTIONS
– 296 –


--- page 307 ---
 the legal team of our Group has reviewed the terms of the Partially Exempted
Framework Agreements and shall in case of any proposed change to the major terms
of the transactions, ensure that the Company complies with all the applicable
requirements under the Listing Rules, including but not limited to publishing an
announcement; and
 our Independent Non-executive Directors and auditors will conduct annual review
of the continuing connected transactions under the framework agreements and
provide annual confirmations in accordance with Rules 14A.55 and 14A.56 of the
Listing Rules.
W AIVER
In respect of the transactions as contemplated under the Partially Exempted Framework
Agreements as described above, we have applied for, and the Stock Exchange has granted us,
a waiver from strict compliance with the announcement requirements under the Listing Rules
pursuant to Rule 14A.105 of the Listing Rules.
DIRECTORS’ CONFIRMATION
Our Directors (including Independent Non-executive Directors) are of the view that: (i)
the continuing connected transactions set out above have been and will be entered into our
ordinary and usual course of business on normal commercial terms or better, on terms that are
fair and reasonable, and in the interests of our Company and our Shareholders as a whole, and
(ii) the proposed annual caps for these transactions are fair and reasonable and in the interests
of our Company and the Shareholders as a whole.
SPONSOR’S CONFIRMATION
The Sponsor has (i) reviewed the relevant documents and information provided by the
Company in relation to the above partially-exempt continuing connected transactions; (ii)
obtained necessary representations and confirmations from the Company and Directors, and
(iii) participated in the due diligence and discussions with the management of the Group.
Based on the above, the Sponsor is of the view that the aforesaid partially-exempt
continuing connected transactions, for which a waiver has been sought, has been entered into
in the ordinary and usual course of our business on normal commercial terms or better terms,
are fair and reasonable and in the interests of the Company and its Shareholders as a whole,
and that the proposed annual caps in respect of the partially-exempt continuing connected
transactions are fair and reasonable and in the interests of the Company and our Shareholders
as a whole.
CONNECTED TRANSACTIONS
– 297 –


--- page 308 ---
So far as our Directors are aware, immediately following the completion of the Global
Offering without taking into account any H Shares which may be issued pursuant to the
exercise of the Over-allotment Option and any A Shares to be issued upon exercise under the
2025 Share Option Scheme, the following persons will have an interest or short position in the
Shares or the underlying Shares which would fall to be disclosed to our Company and the Hong
Kong Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or, 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:
Name of
Shareholder
Nature of
interest
Description
of Shares
Number of
Shares
Approximate
percentage of
shareholding in the
relevant type of
Shares immediately
prior to the
Global Offering (1)
Approximate
percentage of
shareholding in the
total share capital
of our Company
immediately
after the
Global Offering (2)
Mr. Wu /H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial
Owner
A Shares 110,996,700 12.74% 11.47%
Interest in
Controlled
Corporation
A Shares 254,894,742
(3) 29.26% 26.34%
Nanjing Primest /H1118/H1118Beneficial
Owner
A Shares 254,894,742 (3) 29.26% 26.34%
Ms. Liu Fang /H1118/H1118/H1118Spousal interest A Shares 365,891,442 42.01% 37.81%
Notes:
(1) The calculation is based on the total number of 871,018,453 A Shares in issue as of the Latest Practicable Date.
(2) The calculation is based on the total number of 967,798,453 Shares in issue immediately following the
completion of the Global Offering, without taking into account any Shares which may be issued pursuant to
the exercise of the Over-allotment Option and options granted under the 2025 Share Option Scheme.
(3) Pursuant to a financing arrangement dated May 21, 2025, a financial institution lent a loan amounting to
RMB50 million to Nanjing Primest at an annual interest rate of 3.0% and Nanjing Primest pledged 11,000,000
A Shares in our Company to the lending financial institution as security (the “ Share Charge ”). The major
terms and material covenants of the financing arrangement are listed out as follows:
Term and maturity date: /H1118/H1118/H1118/H1118/H1118/H1118From May 30, 2025 to May 14, 2026
Loan amount and interest rate: /H1118RMB50 million at an annual interest rate of 3.0%
Interest payment: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Interests shall be paid in five installments on June 21, 2025, September
21, 2025, December 21, 2025, March 21, 2026, and May 14, 2026,
respectively
Enforcement of security: /H1118/H1118/H1118/H1118/H1118The Share Charge is enforceable upon the occurrence of events of
default
Release of the Share Charge: /H1118/H1118/H1118The Share Pledge will be released upon the repayment of the loan
SUBSTANTIAL SHAREHOLDERS
– 298 –


--- page 309 ---
Events of default: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(i) Nanjing Primest fails to repay the loan amount or extends the loan
term on the maturity date;
(ii) Nanjing Primest fails to pay the interests by installment on the
agreed interest payment dates;
(iii) Nanjing Primest fails to make early redemption or take agreed-
upon measures (such as providing additional pledge) if requested
by the lender when the pledge ratio falls below the liquidation
threshold as agreed; or
(iv) Nanjing Primest breached the covenants in the financing
arrangements, including but not limited to the representations and
warranties made by Nanjing Primest.
Nanjing Primest has genuine funding requirements from time to time. Pledging A Shares held by Nanjing
Primest is a typical kind of collateral to support its external financing. The aforementioned loan that Nanjing
Primest secured by share pledges in respect of the A Shares it holds are subject to pledge ratio requirements
that normally would only be triggered by a material depression in value of our A Shares. Nevertheless, Nanjing
Primest can choose to repay a portion of the relevant outstanding loans and/or provide additional margin funds
to avoid having to pledge additional Shares in respect of such loan. Nanjing Primest will only pledge additional
Shares to the extent permissible under the Hong Kong Listing Rules and further announcement(s) will be made
by the Company as and when appropriate and required under the Hong Kong Listing Rules.
To the best knowledge of our Directors having made all reasonable enquiries, there has not been any adverse
credit records against Nanjing Primest in respect of any breach of repayment obligations under its
indebtedness.
For details of the substantial Shareholders who will be, directly and/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 meeting of any other member of our Group, please refer
to the section headed “Appendix VI — Statutory and General Information — Further
Information about our Directors and Substantial Shareholders — 1. Disclosure of Interests —
(b) Interests of the Substantial Shareholders.”
Save as disclosed herein, our Directors are not aware of any persons who will,
immediately following completion of the Global Offering (assuming the Over-allotment Option
is not exercised and options granted under the 2025 Share Option Scheme are not exercised),
without taking into account the Offer Shares that may be taken up under the Global Offering,
have interests or short positions in Shares or underlying Shares which would fall to be
disclosed 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.
SUBSTANTIAL SHAREHOLDERS
– 299 –


--- page 310 ---
This section presents certain information regarding our share capital prior to and upon the
completion of the Global Offering.
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, the registered share capital of our Company was
RMB871,018,453 comprising 871,018,453 A Shares with a nominal value of RMB1.00 each,
which are all listed on the Shenzhen Stock Exchange.
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately upon completion of the Global Offering, assuming the Over-allotment
Option is not exercised and no A shares are issued pursuant to the exercise of options under
the 2025 Share Option Scheme, the share capital of our Company will be as follows:
Description of Shares Number of Shares
Approximate
percentage of the
total issued share
capital
(%)
A Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118871,018,453 90%
H Shares to be issued pursuant to
the Global Offering /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111896,780,000 10%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118967,798,453 100%
Immediately upon completion of the Global Offering, assuming the Over-allotment
Option is fully exercised and no A shares are issued pursuant to the exercise of options under
the 2025 Share Option Scheme, the share capital of our Company will be as follows:
Description of Shares Number of Shares
Approximate
percentage of the
total issued share
capital
(%)
A Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118871,018,453 88.67%
H Shares to be issued pursuant to
the Global Offering /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111,297,000 11.33%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118982,315,453 100%
SHARE CAPITAL
– 300 –


--- page 311 ---
OUR SHARE
Our H Shares in issue upon completion of the Global Offering, and our A Shares, are
ordinary Shares in our share capital and are considered as one class of Shares. Shenzhen-Hong
Kong Stock Connect has established a stock connect mechanism between Chinese Mainland
and Hong Kong. Our A Shares can be subscribed for and traded by Chinese Mainland investors,
qualified foreign institutional investors or qualified foreign strategic investors and must be
traded in Renminbi. As our A Shares are eligible securities under Shenzhen-Hong Kong Stock
Connect, they can also be subscribed for and traded by Hong Kong and other overseas investors
pursuant to the rules and limits of Shenzhen-Hong Kong Stock Connect. Our H Shares can be
subscribed for or traded by Hong Kong and other overseas investors and qualified domestic
institutional investors. If our H Shares are eligible securities under the Southbound Trading
Link, they can also be subscribed for and traded by Chinese Mainland investors in accordance
with the rules and limits of Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong
Stock Connect.
RANKING
Our H Shares and our A Shares are regarded as one class of Shares under our Articles of
Association and will rank pari passu with each other in all other respects and, in particular, will
rank equally for all dividends or distributions declared, paid or made after the date of this
document. All dividends in respect of our H Shares are to be paid by us in Hong Kong dollars
whereas all dividends in respect of our A Shares are to be paid by us in Renminbi. In addition
to cash, dividends may also be distributed in the form of Shares.
NO CONVERSION OF OUR A SHARES INTO H SHARES FOR LISTING AND
TRADING ON THE HONG KONG STOCK EXCHANGE
Our A Shares and our H Shares are generally neither interchangeable nor fungible, and the
market prices of our A Shares and our H Shares may be different after the Global Offering. The
Guidelines on Application for “Full Circulation” of Domestic Unlisted Shares of H-share
Companies ( H΅͡ሗ“ஷ”ˏ) announced by the CSRC are
not applicable to companies dual listed in the PRC and on the Hong Kong Stock Exchange. As
of the Latest Practicable Date, there were no relevant rules or guidelines from the CSRC
providing that A Shareholders may convert A shares held by them into H shares for listed and
traded on the Hong Kong Stock Exchange.
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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 Hong Kong Stock Exchange. Such approval was obtained at the
Shareholders’ general meeting of our Company held on June 20, 2025 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 15% of the total
number of issued Shares as enlarged by the H Shares to be issued pursuant to the Global
Offering and before the exercise of the Over-allotment Option. The number of H Shares to be
issued pursuant to the exercise of the Over-allotment Option shall not exceed 15% of the total
number of H Shares to be offered initially pursuant to the Global Offering.
(2) Method of offering
The method of offering shall be by way of a public offer for subscription in Hong Kong
and an international offering to institutional and professional investors.
(3) Target investors
The H Shares shall be issued to overseas professional organizations, institutions,
individual investors, the public and other eligible investors.
(4) Price determination basis
The issue price of the H Shares will be determined after due consideration of, among
others, the interests of existing Shareholders, the acceptance of investors and the risks related
to the offering 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.
(5) Validity period
The approval is valid for 24 months from the date of passing of the resolutions at the
Shareholders’ general meeting of our Company held on June 20, 2025.
CIRCUMSTANCES UNDER WHICH GENERAL MEETING IS REQUIRED
For details of circumstances under which our Shareholders’ general meeting is required,
please refer to the sections headed “Appendix IV — Summary of Principal Legal and
Regulatory Provisions” and “Appendix V — Summary of the Articles of Association”.
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The following discussion and our analysis should be read in conjunction with our
consolidated financial statements included in the Accountants’ Report in Appendix I,
together with the accompanying notes. Our consolidated financial statements have been
prepared in accordance with IFRS Accounting Standards.
The following discussion and analysis contain forward-looking statements that
reflect our current views with respect to future events and financial performance. These
statements are based on our assumptions and analysis in light of our experience and
perception of historical trends, current conditions and expected future developments, as
well as other factors we believe are appropriate under the circumstances. However,
whether actual outcomes and developments will meet our expectations and predictions
depends on a number of risks and uncertainties. In evaluating our business, you should
carefully consider the information provided in this Prospectus, including but not limited
to the sections headed “Risk Factors” and “Business.”
For the purposes of this section, unless the context otherwise requires, references to
the years of 2022, 2023 and 2024 refer to the years ended December 31 of such years.
OVERVIEW
We are a leading industrial robotics company in China. We had ranked first among
domestic manufacturers in China’s industrial robotic solutions market for years, in terms of
industrial robot shipment volume, according to Frost & Sullivan. This trajectory culminated in
a historic milestone in the first nine months of 2025, when we became the first domestic
manufacturer to secure the top market position in China in terms of industrial robot shipment
volume, according to the same source. We are also among the top industrial robotics companies
in terms of revenue, ranking sixth in both the global market and China’s market in terms of
revenue in 2024 among all manufacturers, with a market share of 1.7% and 2.0%, respectively.
Through strategic acquisitions worldwide, proprietary core technologies and efficient
commercialization capabilities, we have established competitive advantages in industrial
robotics characterized by our multi-brand portfolio synergy, comprehensive application
coverage and global market penetration. We provide a comprehensive product portfolio,
including fully assembled industrial robots and intelligent manufacturing systems that embody
cutting-edge innovation, as well as core automation components and motion control systems
that serve as essential pillars of industrial robotics. During the Track Record Period, our
revenue amounted to RMB3,880.8 million, RMB4,651.9 million, RMB4,008.8 million,
RMB3,370.3 million and RMB3,803.6 million in 2022, 2023, 2024 and the first nine months
of 2024 and 2025, respectively.
BASIS OF PRESENTATION
Our financial information during the Track Record Period has been prepared in
accordance with IFRS Accounting Standards.
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Our financial information during the Track Record Period has been prepared under the
historical cost convention, except for financial assets measured at fair value through other
comprehensive income (“ FVOCI ”), financial assets measured at fair value through profit or
loss (“ FVPL ”) and derivative financial instruments, which have been measured at fair value.
We have adopted all applicable new and revised IFRS to the Track Record Period, except
for any new standards or interpretations that are not yet effective for the Track Record Period.
See Note 1 to the Accountants’ Report included in Appendix I to this prospectus.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business and results of operations are affected by the general factors that impact our
total addressable market, including, among others, overall economic growth in China and
globally, technological advancement and competitive landscape in the industry in which we
operate, geopolitical relations, regulatory oversight and government policies. Changes in any
of these general factors could affect the demand for our products and our results of operations.
In addition to the general factors mentioned above, we believe our results of operations
are more directly affected by the following specific factors:
Demand for industrial robots and intelligent manufacturing systems
We are a leading industrial robotics company in China, serving a diverse customer base
across both traditional industries and emerging high-growth sectors. During the Track Record
Period, our customers spanned traditional industries such as construction machinery, packaging
and logistics, and construction materials and furniture, as well as emerging sectors including
automotive manufacturing, lithium-battery production, and photovoltaics (“ PV”). As of the
Latest Practicable Date, our product portfolio comprised 96 models, encompassing a full range
of general-purpose and application-specific robots with advanced process capabilities,
enabling us to meet the varied demands of these industries. In the first half of 2025, we became
the first domestic manufacturer to secure the top market position in China in terms of industrial
robot shipment volume, according to Frost & Sullivan. Consequently, our revenue growth is
closely tied to the global demand for industrial robots and intelligent manufacturing systems.
The global industrial robotic solutions market represents substantial growth potential.
Driven by accelerated advancements in industrial automation and the ongoing transition toward
intelligent and sustainable manufacturing practices, the market size of the global industrial
robotic solutions market, in terms of revenue, is expected to grow at a CAGR of 15.4% from
USD25.4 billion in 2024 to USD51.8 billion in 2029. For further details on the market size and
development trends, see “Industry Overview — Overview of the Global Industrial Robotic
Solutions Market.” As a leading industrial robotics company in China with an established
presence in global markets, we are well-positioned to capitalize on this robust market growth
and achieve sustained long-term revenue expansion.
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In addition, our financial performance is positively correlated with the growth of
downstream sectors, as these industries drive demand for industrial robotic solutions through
their expanding investments and purchasing activities. Through our ongoing investment in core
technologies and our extensive product portfolio designed to address a broad range of
application scenarios and payload requirements, we can effectively serve a wide spectrum of
industries and rapidly adapt to the diverse needs of customers across various sectors. This
flexibility strengthens our business resilience against economic cycles and mitigates risks
associated with fluctuations in specific downstream industries. In the event of fluctuations in
demand from certain sectors, we are able to swiftly pivot toward emerging markets with
substantial growth potential.
Continuous Advancement of Core Technologies
The industrial robotics industry is experiencing a notable shift toward intelligentization,
where the seamless combination of robotic hardware with advanced digital ecosystems has
emerged as a critical success factor, according to Frost & Sullivan. Companies equipped with
cutting-edge technologies in these domains are well-positioned to gain competitive advantages.
Core technologies underpinning industrial robot production and solutions typically include
robot controller technologies, motion control technologies and robot functional safety
technologies. The continuous development and accumulation of these core technologies play a
pivotal role in enhancing product functionality and differentiation. We have cultivated a
comprehensive suite of core technologies, ranging from precision-engineered mechanical
designs optimized for payload and accuracy to state-of-the-art software platforms that support
remote monitoring, predictive maintenance, and real-time process optimization. Over the
years, we have built a substantial portfolio of intellectual property rights and proprietary
technologies, which serve as formidable technical barriers to entry and form the foundation of
our long-term competitiveness in the industrial robotic solutions market.
Our ability to maintain leadership and drive innovation in the industrial robotics industry
is inherently tied to our investments in emerging technologies. Recognizing the critical
importance of research and development, we have allocated and will continue to allocate
significant resources to R&D activities. In 2022, 2023, 2024 and the first nine months of 2024
and 2025, our R&D expenditures (including our research and development expenses and
investment in R&D activities which was capitalized) amounted to RMB401.6 million,
RMB504.1 million, RMB502.9 million, RMB349.6 million and RMB354.2 million,
respectively. Guided by the principles of “core technology independence” and “application-
driven innovation,” we are committed to pursuing advancements that balance technological
depth with industry relevance.
In the future, our R&D efforts will concentrate on high-speed, high-precision motion
control systems, intelligent robotics algorithms, and the development of industry-specific
software toolkits. In addition, we plan to further our R&D efforts for industrial robots
specifically designed to operate under harsh working conditions. We also plan to expand the
application of industrial robotics and motion control technologies to high-growth downstream
sectors such as automotive and semiconductors. These sectors present technical challenges and
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are witnessing increasing trends toward import substitution, creating a substantial opportunity
for us to reinforce our technological leadership and capture additional market share. We believe
these initiatives, if successfully executed, will have a direct and positive impact on both our
revenue growth and gross profit margins. However, despite our track record of maintaining
technological leadership, there is no guarantee that our R&D initiatives will achieve the desired
results. Any failure to meet our R&D objectives could materially and adversely affect our
financial position and operating results. For details, see “Risk Factors — Risks Relating to Our
Industry and Business — Developments in alternative technologies and products may
adversely affect the demand for our industrial robotics products.”
Strengthening Our Global Market Presence
In the past, the global industrial robotic solutions market was largely dominated by
international brands. However, in recent years, industrial robotics companies from China,
including our Company, have emerged as a significant force in the global market. According
to Frost & Sullivan, the industrial robotic solutions market in China contributed more than half
of the global industrial robotic solutions market in terms of the shipment volume of industrial
robots in 2024, and the proportion is expected to reach 64.2% by 2029. Recognizing this
favorable market trend, we have strategically allocated greater resources toward expanding our
overseas sales efforts over the past few years. In 2022, 2023, 2024 and the first nine months
of 2024 and 2025, our revenue generated from overseas markets amounted to RMB1,312.2
million, RMB1,594.4 million, RMB1,369.6 million, RMB1,139.3 million and RMB1,117.7
million, respectively, accounting for 33.8%, 34.3%, 34.2%, 33.8% and 29.4% of our total
revenue for the same periods. While our revenue from overseas markets declined in 2024,
primarily due to a weaker performance in the construction machinery sector compared to 2023,
expanding our global market share remains a cornerstone of our growth strategy and a critical
driver of our financial performance.
The global industrial robotic solutions market remains highly competitive, with both
established international brands and emerging regional players actively competing for market
share. Competitors differentiate themselves across several key factors, including technology
innovation, product reliability, pricing strategies, and the ability to provide localized solutions
tailored to specific customer needs. Many international brands leverage their longstanding
reputations and extensive global distribution networks to maintain their positions, while
emerging players increasingly rely on technological innovation and operational agility to cater
to the evolving demands of local markets. As the market evolves, our ability to navigate these
competitive pressures and differentiate our products remains critical to sustaining our revenue
growth and expanding our global market presence.
In this regard, we have invested in subsidiaries and associates in markets with high
growth potential, enabling us to deepen our understanding of local markets and better align our
product strengths with evolving customer demands. We also implement a multi-brand strategy
to harness the unique strengths of each brand in our portfolio. Estun serves as the cornerstone
of our product offerings, covering a comprehensive range of industrial robots along with
selected core automation components. Trio is dedicated to motion control systems, delivering
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precision and performance for demanding applications. Cloos focuses on welding industrial
robots and end-to-end welding solutions, while M.A.i specializes in intelligent manufacturing
systems, enabling smart and integrated production processes. We believe this strategic
alignment of our brands allows us to address diverse customer needs more effectively,
enhancing customer loyalty and supporting sustainable revenue growth across multiple
markets.
Ability to Successfully Integrate Acquired Businesses
Strategic acquisitions are a core component of our long-term growth strategy, enabling us
to integrate emerging technologies, diversify our product offerings, and strengthen our
competitive positioning. Through the acquisition of businesses with proven track records and
strong positions within their respective market segments, we aim to enhance our capabilities
across the entire value chain and establish comprehensive service capabilities. These
acquisitions allow us to incorporate technologies from the acquired businesses, generating
synergies that strengthen our overall competitive advantages. We acquired M.A.i, a German
company focused on intelligent manufacturing systems, in 2017, to strengthen our presence in
smart manufacturing. In 2017, we acquired Trio, a manufacturer based in the U.K specializing
in motion controllers. By leveraging Trio’s extensive expertise and know-how in motion
control, we expanded our product portfolio in motion control systems and accelerated the
development of other core automation components. Similarly, in 2020, we entered the global
premium arc-welding market by acquiring Cloos, a Germany-based company specializing in
welding robotics with an established international presence. This acquisition enabled us to
combine Cloos’ strong global brand awareness with our supply chain efficiency in China,
allowing us to penetrate the premium arc-welding sector and significantly strengthen the global
presence of our Group.
As a result of these acquisitions, we have recognized goodwill amounting to RMB1,485.7
million, RMB1,485.7 million, RMB1,104.1 million and RMB1,044.6 million as of December
31, 2022, 2023 and 2024 and September 30, 2025, respectively. We have made significant
progress in consolidating our acquired businesses, which has accelerated our global expansion
and strengthened our ability to build sustainable international competitiveness. While these
efforts have enabled us to expand our global brand presence through sustained overseas sales,
we are subject to risks associated with such acquisitions, some of which are beyond our
control, such as the recognition of impairment losses on goodwill. We recorded impairment
losses on goodwill of RMB344.9 million in 2024, which was primarily attributable to the
underperformance of certain subsidiaries driven by reduced demand from specific downstream
sectors, including heavy industry. This emphasizes the importance of our ability to effectively
integrate acquired businesses and achieve the anticipated synergies.
To address these challenges, we have established a disciplined approach to mergers and
acquisitions and post-acquisition integration. We thoroughly analyze the strengths of each
acquired business and strategically leverage their distinct advantages. By doing so, we enhance
our overall operational efficiency and market competitiveness globally. Our commitment to
disciplined capital allocation and effective post-acquisition integration reflects our focus on
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mitigating risks while achieving sustainable growth. For the risks associate with our acquired
business, see “Risk Factors — Risks Relating to Our Industry and Business — Our investments
and acquisitions may not achieve the intended benefits and may expose us to various
operational, financial, and regulatory risks.”
Enhancing and Optimizing Our Global Sales and Service Capabilities
We have built an extensive global sales and service network that integrates direct sales
channels with a distribution network, enabling us to deliver comprehensive and localized
support to end users across a wide range of regions. By consistently expanding and refining this
network, we enhance our ability to reach customers effectively, strengthen long-term
relationships, and drive sustainable growth in sales and market presence.
As of September 30, 2025, our global sales force comprised 763 professionals globally.
Our global sales teams not only ensure efficient and high-quality service delivery but also serve
as a vital link to the market, offering direct, actionable insights into customer needs and
evolving industry trends. These insights empower us to stay responsive to market dynamics and
continuously refine our strategies to maintain a competitive edge. To support timely and
localized assistance, we operate 75 service sites worldwide as of September 30, 2025, enabling
us to respond efficiently to customer needs across different regions.
Looking forward, we remain focused on further strengthening and expanding our global
sales and service capabilities. We will embrace localized service models and continue to
leverage China’s robust ecosystems. Supported by strong domestic manufacturing capabilities
and huge population of engineers, we are establishing global delivery centers and expanding
our global sales and service network, creating a global matrix of R&D, delivery, and service
network. In parallel, we will continue to invest in our multi-brand strategy to address diverse
customer segments more effectively and raise the global profile of our Group. Together, these
initiatives position us to achieve sustainable growth and reinforce our leadership in the
industrial robotics industry.
Ability to Maintain and Improve Cost and Operating Efficiency
Our ability to achieve and maintain profitability depends on our capability to manage
costs and expenses effectively while enhancing operating efficiency. In particular, improving
our operating leverage and optimizing cost structures are critical to our financial performance.
In 2022, 2023, 2024 and the first nine months of 2024 and 2025, our cost of sales amounted
to RMB2,604.6 million, RMB3,196.9 million, RMB2,874.7 million, RMB2,364.1 million and
RMB2,732.9 million, respectively. In particular, our costs of raw materials and components
amounted to RMB2,180.8 million, RMB2,719.6 million, RMB2,347.7 million, RMB1,963.0
million and RMB2,279.8 million, respectively, in 2022, 2023, 2024 and the first nine months
of 2024 and 2025, accounting for 83.7%, 85.1%, 81.7%, 83.0% and 83.4% of our total cost of
sales in the same periods. Key raw materials and components used in the manufacturing of our
products include reducers, valve blocks, large non-standard fabricated components as well as
tooling and fixture equipment.
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Effectively controlling the costs of raw materials and components, particularly as we
scale up production volumes, has had and will continue to have a significant impact on our
financial results. We have gradually transitioned certain materials previously outsourced to
in-house production for cost reduction purposes. We expect that, in the future, the absolute
value of cost of sales will increase in line with the revenue growth. However, we aim to
increase our gross profit margin by continuously optimizing the design of our solutions and
products to improve cost efficiency. In addition, we intend to implement a range of cost
optimization and efficiency enhancement initiatives, including strategic adjustments to pricing,
supply chain optimization, increased localization of components, and the adoption of lean
manufacturing practices. These initiatives aim to strengthen our operational resilience and
improve financial performance.
In addition to cost control, our ability to streamline operations across our business will
play a key role in enhancing overall operating efficiency. Effective management of operating
expenses is critical to achieving optimal efficiency and sustaining our profitability. As our
business continues to grow and scale, we expect to benefit from significant operating leverage,
enabling us to realize structural cost savings. Moreover, the ongoing growth of our business
and the expansion of our market share are expected to further enhance our economies of scale,
contributing to long-term financial sustainability and improved operational efficiency.
MATERIAL ACCOUNTING POLICIES AND CRITICAL ACCOUNTING
JUDGEMENTS AND ESTIMATES
Some of our accounting policies require us to apply estimates and assumptions as well as
complex judgments relating to accounting items. The estimates and assumptions we use and the
judgments we make in applying our accounting policies have a significant impact on our
financial position and results of operations. Our management will continually evaluate such
estimates, assumptions and judgments based on experience and other factors, including the
expectation of future events that are believed to be reasonable under the circumstances. There
has not been any material deviation between our management’s estimates or assumptions and
actual results, and we have not made any material changes to these estimates or assumptions
during the Track Record Period. We do not expect any material changes in these estimates and
assumptions in the foreseeable future.
Set forth below are discussions of the accounting policies that we believe are of critical
importance to us or involve the most significant estimates, assumptions and judgments used in
the preparation of our financial statements. Other material accounting policies, estimates,
assumptions and judgments, which are important for understanding our financial position and
results of operations, are set forth in detail in Notes 2 and 3 to the Accountants’ Report in
Appendix I to this prospectus.
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Material Accounting Policies
Revenue and other income
Income is classified by our Group as revenue when it arises from the sale of goods, the
provision of services, or the use by others of our Group’s assets under leases in the ordinary
course of our Group’s business.
Further details of our Group’s revenue and other income recognition policies are as
follows:
Revenue from contracts with customers
Our Group is the principal for our revenue transactions and recognizes revenue on a gross
basis, including the sale of electronic products that are sourced externally. In determining
whether our Group acts as a principal or as an agent, we consider whether our Group obtains
control of the products before they are transferred to the customers. Control refers to our
Group’s ability to direct the use of and obtain substantially all of the remaining benefits from
the products.
Revenue is recognized when control over a product or service is transferred to the
customer at the amount of promised consideration to which our Group is expected to be
entitled, excluding those amounts collected on behalf of third parties, such as value-added tax
or other sales taxes.
(a) Sale of products
Generally, revenue from the sale of products is recognized when the customer takes
possession of and accepts the products. Revenue arising from the sale of certain intelligent
manufacturing systems and a corresponding contract asset, is recognized progressively over
time during the process using the cost-to-cost method. Under the cost-to-cost method, revenue
is recognized based on the proportion of the actual costs incurred relative to the estimated total
costs to provide a faithful depiction of the transfer of those products.
(b) Product-related technical services
Revenue from technical services is recognized at a point in time when the service is
provided and accepted by the customer.
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Revenue from other sources and other income
(a) Rental income from operating leases
Rental income from operating leases is recognized in profit or loss on a straight-line basis
over the term of the lease. Lease incentives granted are recognized as an integral part of the
total rental income over the term of the lease. V ariable lease payments that do not depend on
an index or a rate are recognized as income in the accounting period in which they are earned.
(b) Dividends
Dividend income is recognized in profit or loss on the date on which our Group’s right
to receive payment is established.
(c) Interest income
Interest income is recognized using the effective interest method. The “effective interest
rate” is the rate that exactly discounts estimated future cash receipts through the expected life
of the financial asset to the gross carrying amount of the financial asset. In calculating interest
income, the effective interest rate is applied to the gross carrying amount of the asset (when
the asset is not credit-impaired). However, for financial assets that have become credit-
impaired subsequent to initial recognition, interest income is calculated by applying the
effective interest rate to the amortized cost of the financial asset. If the asset is no longer
credit-impaired, then the calculation of interest income reverts to the gross basis.
(d) Government grant
Government grants are recognized in the consolidated statements of financial position
initially when there is reasonable assurance that they will be received and that our Group will
comply with the conditions attached to them.
Grants that compensate our Group for expenses incurred are recognized as income in
profit or loss on a systematic basis in the same periods in which the expenses are incurred.
Grants that compensate our Group for the cost of an asset are presented in the
consolidated statements of financial position by setting up the grants as deferred income and
consequently are effectively recognized as income in profit or loss on a systematic basis over
the useful life of the asset.
Goodwill
Goodwill arising on the acquisition of businesses is measured at cost less accumulated
impairment losses and is tested annually for impairment.
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Credit losses and impairment of assets
Credit losses from financial instruments, contract assets and lease receivables
Our Group recognizes a loss allowance for expected credit losses (“ECL”) on (i) financial
assets measured at amortized cost (including cash and cash equivalents, trade receivables and
other receivables, including those loans to associates that are held for the collection of
contractual cash flows which represent sole payments of principal and interest); (ii) contract
assets; and (iii) lease receivables.
(a) Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Generally, credit losses are
measured as the present value of all expected cash shortfalls between the contractual cash
flows and expected amounts.
The expected cash shortfalls are discounted using the following discount rates if the effect
is material: (i) fixed-rate financial assets, trade and other receivables and contract assets:
effective interest rate determined at initial recognition or an approximation thereof; (ii)
variable-rate financial assets: current effective interest rate; and (iii) lease receivables:
discounted rate used in the measurement of the lease receivable.
The maximum period considered when estimating ECLs is the maximum contractual
period over which our Group is exposed to credit risk.
ECLs are measured on either of the following basis: (i) 12-month ECLs: these are the
portions of ECLs that result from default events that are possible within the 12 months after
the reporting date (or a shorter period if the expected life of the instrument is less than 12
months); and (ii) lifetime ECLs: these are the ECLs that result from all possible default events
over the expected lives of the items to which the ECL model applies.
Loss allowances for trade receivables and contract assets are always measured at an
amount equal to lifetime ECLs.
(b) Significant increases in credit risk
When determining whether the credit risk of a financial instrument has increased
significantly since initial recognition and when measuring ECLs, our Group considers
reasonable and supportable information that is relevant and available without undue cost or
effort. This includes both quantitative and qualitative information and analysis, based on our
Group’s historical experience and informed credit assessment, that includes forward-looking
information.
Our Group assumes that the credit risk on a financial asset has increased significantly if
it is more than 30 days past due.
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In particular, the following information is taken into account when assessing whether
credit risk has increased significantly since initial recognition: (i) the debtor is unlikely to pay
its credit obligations to our Group in full, without recourse by us to actions such as realizing
security (if any is held); or (ii) the financial assets are 90 days past due.
ECLs are remeasured at each reporting date to reflect changes in the financial
instrument’s credit risk since initial recognition. Any change in the ECL amount is recognized
as an impairment gain or loss in profit or loss. Our Group recognizes an impairment gain or
loss for all financial instruments with a corresponding adjustment to their carrying amount
through a loss allowance account, except for investments in non-equity securities that are
measured at FVOCI (recycling), for which the loss allowance is recognized in OCI and
accumulated in the fair value reserve (recycling) does not reduce the carrying amount of the
financial asset in the consolidated statements of financial position.
(c) Credit-impaired financial assets
At each reporting date, our Group assesses whether a financial asset is credit-impaired.
A financial asset is credit-impaired when one or more events that have a detrimental impact on
the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable
events: (i) significant financial difficulties of the debtor; (ii) a breach of contract, such as a
default or being more than 90 days past due; (iii) the restructuring of a loan or advance by our
Group on terms that our Group would not consider otherwise a breach of contract, such as a
default or being more than 90 days past due; (iv) it is probable that the debtor will enter
bankruptcy or other financial reorganization; or (v) the disappearance of an active market for
a security because of financial difficulties of the issuer.
(d) Write-off policy
The gross carrying amount of a financial asset, lease receivable, or contract asset is
written off to the extent that there is no realistic prospect of recovery. This is generally the case
when our Group determines that the debtor does not have assets or sources of income that could
generate sufficient cash flows to repay the amounts subject to the write-off.
Subsequent recoveries of an asset that was previously written off are recognized as a
reversal of impairment in profit or loss in the period in which the recovery occurs.
Impairment of other non-current assets
At each reporting date, our Group reviews the carrying amounts of its non-financial assets
(other than inventories and other contract costs, contract assets and deferred tax assets) to
determine whether there is any indication of impairment. If any such indication exists, then the
asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.
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For impairment testing, assets are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of
other assets or cash-generating units (“CGU”). Goodwill arising from a business combination
is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the
combination.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair
value less costs of disposal. V alue in use is based on the estimated future cash flows,
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 or CGU.
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its
recoverable amount.
Impairment losses are recognized in profit or loss. They are allocated first to reduce the
carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying
amounts of the other assets in the CGU on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment
loss is reversed only to the extent that the resulting carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if no
impairment loss had been recognized.
Inventories and other contract costs
Inventories
Inventories are measured at the lower of cost and net realizable value.
Cost is calculated using the weighted average cost formula and comprises all costs of
purchase, costs of conversion and other costs incurred in bringing the inventories to their
present location and condition.
Net realizable value is the estimated selling price in the ordinary course of business less
the estimated costs of completion and the estimated costs necessary to make the sale.
Other contract costs
Other contract costs are either the incremental costs of obtaining a contract with a
customer or the costs to fulfil a contract with a customer, which are not capitalized as
inventory, property, plant and equipment, or intangible assets.
Incremental costs of obtaining a contract, such as sales commissions, are capitalized if the
costs relate to revenue that will be recognized in a future reporting period and the costs are
expected to be recovered. Other costs of obtaining a contract are expensed when incurred.
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Costs to fulfil a contract are capitalized if the costs relate directly to an existing contract
or a specifically identifiable anticipated contract, generate or enhance resources that will be
used to provide goods or services in the future and are expected to be recovered. Otherwise,
costs of fulfilling a contract, which are not capitalized as inventory, property, plant and
equipment, or intangible assets, are expensed as incurred.
Capitalized contract costs are stated at cost less accumulated amortization and impairment
losses. Amortization of capitalized contract costs is recognized in profit or loss when the
revenue to which the asset relates is recognized.
Trade and other receivables
A receivable is recognized when our Group has an unconditional right to receive
consideration and only the passage of time is required before payment of that consideration is
due.
Trade receivables that do not contain a significant financing component are initially
measured at their transaction price. Trade receivables that constrain a significant financing
component and other receivables are initially measured at fair value plus transaction costs. All
receivables are subsequently stated at amortized cost.
Income tax
Income tax comprises current tax and deferred tax. It is recognized in profit or loss except
to the extent that it relates to a business combination, or items recognized directly in equity or
in other comprehensive income.
Current tax comprises the estimated tax payable or receivable on the taxable income or
loss for the year/period and any adjustments to the tax payable or receivable in respect of
previous years. The amount of current tax payable or receivable is the best estimate of the tax
amount expected to be paid or received that reflects any uncertainty related to income taxes.
It is measured using tax rates enacted or substantively enacted at the reporting date. Current
tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax is recognized in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. Deferred tax is not recognized for: (i) temporary differences on the initial
recognition of assets or liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit or loss and does not give rise to equal taxable and
deductible temporary differences; (ii) temporary differences related to investment in
subsidiaries and associates to the extent that our Group is able to control the timing of the
reversal of the temporary differences and it is probable that they will not reverse in the
foreseeable future; and (iii) taxable temporary differences arising on the initial recognition of
goodwill.
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Our Group recognized deferred tax assets and deferred tax liabilities separately in relation
to its lease liabilities and right-of-use assets.
Deferred tax assets are recognized for unused tax losses, unused tax credits and
deductible temporary differences to the extent that it is probable that future taxable profits will
be available against which they can be used. Future taxable profits are determined based on the
reversal of relevant taxable temporary differences. If the amount of taxable temporary
differences is insufficient to recognize a deferred tax asset in full, then future taxable profits,
adjusted for reversals of existing temporary differences, are considered, based on the business
plans for individual subsidiaries in our Group. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realized; such reductions are reversed when the probability of future taxable
profits improves.
The measurement of deferred tax reflects the tax consequences that would follow from the
manner in which our Group expects, at the reporting date, to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
Critical Accounting Judgments and Estimates
Impairment of goodwill
Our Group determines whether goodwill is impaired at least on an annual basis. This
requires an estimation of the value in use of the CGUs to which the goodwill is allocated.
Estimating the value in use requires our 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.
Net realizable value of inventories
The net realizable value of inventories is the estimated selling price in the ordinary course
of business less the estimated costs of completion and the estimated costs necessary to make
the sale. Special consideration is given to estimate the selling price of those technically
obsolete and/or slow-moving inventory items.
Management reassesses these estimations at the end of the reporting period to ensure
inventory is shown at the lower of cost and net realizable value.
Deferred tax assets
Deferred tax assets are recognized for unused tax losses to the extent that it is probable
that taxable profit will be available against which losses can be utilized. Significant
management judgement 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.
FINANCIAL INFORMATION
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DESCRIPTION OF KEY ITEMS OF CONSOLIDATED STATEMENTS OF PROFIT OR
LOSS
The following table sets forth key items of our consolidated statements of profit or loss
for the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,880,779 4,651,949 4,008,772 3,370,274 3,803,570
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,604,561) (3,196,854) (2,874,742) (2,364,083) (2,732,855)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,276,218 1,455,095 1,134,030 1,006,191 1,070,715
Other net income /H1118/H1118/H1118/H1118/H1118/H1118136,982 139,150 123,035 107,798 63,208
Selling expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(292,807) (399,331) (445,689) (324,136) (308,396)
Administrative expenses /H1118/H1118(416,562) (466,358) (550,149) (381,748) (330,369)
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(307,580) (388,468) (442,233) (306,610) (318,511)
(Provision for)/reversal of
impairment loss on trade
receivables and contract
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(34,888) (29,579) (62,689) (21,603) 4,813
Impairment loss on
intangible assets and
goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (360,467) – –
Profit/(loss) from
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118361,363 310,509 (604,162) 79,892 181,460
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(93,990) (130,538) (154,193) (103,909) (119,487)
Share of profits less losses
of associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,765) (12,434) (17,169) (12,875) (2,143)
Profit/(loss) before
taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118263,608 167,537 (775,524) (36,892) 59,830
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(80,049) (33,910) (42,161) (25,267) (30,130)
Profit/(loss) for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118183,559 133,627 (817,685) (62,159) 29,700
Attributable to:
Equity shareholders of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118166,780 135,672 (810,929) (67,119) 25,372
Non-controlling interests /H1118/H1118 16,779 (2,045) (6,756) 4,960 4,328
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Non-IFRS Financial Measures
To supplement our consolidated financial statements of profit or loss that are presented
in accordance with IFRS, we also use EBITDA (non-IFRS measure) and adjusted EBITDA
(non-IFRS measure) as additional financial measures, which are not required by, or presented
in accordance with IFRS. We define EBITDA (non-IFRS measure) as profit before taxation
adjusted by adding back (i) finance costs, and (ii) depreciation and amortization, and deducting
interest income from bank deposits. We believe that these non-IFRS measures facilitate
comparisons of operating performance from period to period by eliminating potential impacts
of certain non-operating items.
We believe that these non-IFRS measures provide useful information to investors and
others in understanding and evaluating our results of operations in the same manner as they
help our management. However, our presentation of EBITDA (non-IFRS measure) and
adjusted EBITDA (non-IFRS measure) may not be comparable to similarly titled measures
presented by other companies. The use of such non-IFRS measures have limitations as an
analytical tool, and you should not consider it in isolation from, or as substitute for analysis
of, our results of operations or financial condition as reported under IFRS.
The following table sets forth a reconciliation of our EBITDA (non-IFRS measure) and
adjusted EBITDA (non-IFRS measure) and to profit or loss for the period in respect of the
periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Profit/(loss) before
taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118263,608 167,537 (775,524) (36,892) 59,830
Adjusted for:
Add:
– Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,990 130,538 154,193 103,909 119,487
– Depreciation and
amortization
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118133,617 151,000 199,054 139,642 151,795
Less:
– Interest income from
bank deposits (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,040) (9,807) (15,493) (11,910) (9,702)
EBITDA (non-IFRS
measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118480,175 439,268 (437,770) 194,749 321,410
FINANCIAL INFORMATION
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Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Adjusted for:
Add:
Equity-settled share-based
payment expenses
(3) /H1118/H1118/H1118/H111810,253 6,502 10,451 11,384 14,450
Impairment loss on
intangible assets and
goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 360,467 – –
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1,128
Adjusted EBITDA
(non-IFRS measure) /H1118/H1118/H1118490,428 445,770 (66,852) 206,133 336,988
Notes:
(1) Representing depreciation of property, plant and equipment, right-of-use assets and investment property and
amortization of intangible assets and long-term deferred expenses.
(2) Representing interest income from bank deposits recorded as our other net income. See “— Other Net Income”
for details.
(3) Representing share-based payment relating to our share option scheme and share reward scheme. See Note 27
to the Accountants’ Report in Appendix I to this prospectus for details.
Revenue
Revenue by Business Line
During the Track Record Period, a significant portion of our revenue was generated from
sales of (i) industrial robots and intelligent manufacturing systems, and (ii) core automation
components and motion control systems. Additionally, we derived a small portion of our
revenue from the rental of certain office buildings.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our revenue by business line for the periods
indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Industrial robots
and intelligent
manufacturing
systems /H1118/H1118/H1118/H1118/H11182,838,648 73.1 3,594,821 77.3 3,029,103 75.6 2,600,585 77.2 3,138,297 82.5
– Industrial robots 924,589 23.8 1,446,121 31.1 1,232,580 30.7 1,049,293 31.1 1,397,913 36.7
– Intelligent
manufacturing
systems /H1118/H1118/H1118/H1118/H1118582,627 15.0 610,469 13.1 747,022 18.7 697,331 20.7 927,016 24.4
– Industrial robot
workstations /H1118/H11181,331,432 34.3 1,538,231 33.1 1,049,501 26.2 853,961 25.4 813,368 21.4
Core automation
components
and motion
control
systems /H1118/H1118/H1118/H1118/H11181,025,480 26.4 1,040,015 22.3 976,276 24.3 767,066 22.7 662,495 17.4
– Motion control
systems /H1118/H1118/H1118/H1118/H1118117,808 3.0 137,676 3.0 100,342 2.5 78,802 2.3 78,455 2.1
– Servo systems /H1118 314,579 8.1 267,512 5.8 241,241 6.0 186,297 5.5 137,330 3.6
– Motion control
solutions /H1118/H1118/H1118/H1118593,093 15.3 634,827 13.5 634,693 15.8 501,967 14.9 446,710 11.7
Rentals /H1118/H1118/H1118/H1118/H1118/H1118/H111816,651 0.5 17,113 0.4 3,393 0.1 2,623 0.1 2,778 0.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,880,779 100.0 4,651,949 100.0 4,008,772 100.0 3,370,274 100.0 3,803,570 100.0
Revenue from sales of industrial robots and intelligent manufacturing systems
We offer a comprehensive portfolio of industrial robots and intelligent manufacturing
systems that cater to a wide range of application scenarios. Over the years, sales of industrial
robots and intelligent manufacturing systems have emerged as a cornerstone of our revenue. In
2022, 2023, 2024 and the first nine months of 2024 and 2025, our revenue from sales of
industrial robots and intelligent manufacturing systems amounted to RMB2,838.6 million,
RMB3,594.8 million, RMB3,029.1 million, RMB2,600.6 million and RMB3,138.3 million,
respectively, representing 73.1%, 77.3%, 75.6%, 77.2% and 82.5% of our total revenue for the
same periods.
FINANCIAL INFORMATION
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Our revenue from sales of industrial robots and intelligent manufacturing systems grew
by 26.6% from 2022 to 2023, primarily because we reinforced our focus on strategic key
accounts by forming dedicated sales team aimed at engaging top-tier customers with
substantial demand. This strategic approach enabled us to successfully gain more market share.
In particular, (i) we captured additional opportunities in the photovoltaic industry and
automotive industry by continuously expanding the application scenarios of our industrial
robots, (ii) the rapid growth of the lithium battery industry drove higher sales of our intelligent
manufacturing systems, and (iii) increased capital investment in the construction machinery
and heavy industry sectors contributed to revenue growth of our industrial robot workstations.
Our revenue from sales of industrial robots and intelligent manufacturing systems
declined by 15.7% from 2023 to 2024, mainly due to reduced demand from customers in
certain downstream sectors, driven by a broader industry-wide slowdown affecting these
market segments. In particular, (i) the decrease in revenue from our industrial robots was
partially due to weaker demand in the photovoltaic industry, despite the growing demand from
emerging industries, such as automotive and electronics, and (ii) reduced capital investment in
the heavy industry sector led to lower sales of industrial robot workstations. By contrast,
revenue from our intelligent manufacturing systems increased in 2024 compared with 2023,
mainly as a result of orders secured from certain key account customers in the lithium battery
industry.
Our revenue from sales of industrial robots and intelligent manufacturing systems grew
by 20.7% from the first nine months of 2024 to the first nine months of 2025, mainly
attributable to recovered demand in the downstream sectors, in particular the automotive
industry. The increase was mainly driven by changes in industry dynamics. In 2025, the new
energy vehicle, lithium battery and electronics sectors recorded relatively fast growth and
higher levels of capital investment, which supported rising demand for our industrial robots
and intelligent manufacturing systems. We had adjusted our human resource allocation in 2024
in light of these industry trends, which enabled us to respond to customer needs in these sectors
in a timely manner and contributed to our revenue growth. In particular, we allocated more
experienced personnel to serve key account customers in the lithium battery industry, and
assigned over 20 seasoned international sales professionals to support our overseas business.
Revenue from sales of core automation components and motion control systems
Our core automation components and motion control systems deliver the foundational
technologies powering intelligent manufacturing. Our revenue generated from sales of core
automation components and motion control systems was RMB1,025.5 million, RMB1,040.0
million, RMB976.3 million, RMB767.1 million and RMB662.5 million in 2022, 2023, 2024
and the first nine months of 2024 and 2025, respectively, accounting for 26.4%, 22.3%, 24.3%,
22.7% and 17.4% of our total revenue for the same periods.
Revenue from sales of core automation components and motion control systems remained
relatively stable between 2022 and 2023 but declined by 6.1% from 2023 to 2024, which was
mainly due to a decrease of RMB26.3 million in revenue generated from our servo systems.
FINANCIAL INFORMATION
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The downstream industries for servo systems used in specialty equipment experienced
downturns, which led to longer project approval processes and extended procurement decision
cycles, causing delays in our product delivery. Revenue from sales of core automation
components and motion control systems further declined by 13.6% from the first nine months
of 2024 to the first nine months of 2025, primarily due to (i) a decrease of RMB55.3 million
in revenue generated from our motion control solutions, which was mainly attributable to
weaker demand from downstream industries such as sheet metal stamping, as certain cup and
tumbler manufacturers reduced their capacity expansion in 2024 amid slowing overseas market
demand, and (ii) a decrease in revenue of RMB49.0 million generated from our servo systems,
primarily as we prioritized serving key account customers with stable demand, and refrained
from taking low-margin orders to maintain profitability.
Rental income
In 2022, 2023, 2024 and the first nine months of 2024 and 2025, our rental income
amounted to RMB16.7 million, RMB17.1 million, RMB3.4 million, RMB2.6 million and
RMB2.8 million, respectively, accounting for 0.5%, 0.4%, 0.1%, 0.1% and 0.1% of our total
revenue for the same periods.
Our rental income remained relatively stable at RMB16.7 million in 2022 and RMB17.1
million in 2023. However, our rental income declined by 80.1% from 2023 to 2024, primarily
as certain office buildings were converted to self-use upon the expiration of their lease in 2024.
Our rental income remained relatively stable at RMB2.6 million in the first nine months of
2024 and RMB2.8 million in the first nine months of 2025.
Revenue by Geographical Region
During the Track Record Period, we sold our products across the globe. Revenue
generated from overseas markets has become an increasingly significant component of our
overall revenue.
The following table sets forth a breakdown of our revenue by geographical areas for the
periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Chinese
Mainland /H1118/H1118/H1118/H11182,568,537 66.2 3,057,584 65.7 2,639,208 65.8 2,230,952 66.2 2,685,844 70.6
Overseas /H1118/H1118/H1118/H1118/H1118/H11181,312,242 33.8 1,594,365 34.3 1,369,564 34.2 1,139,322 33.8 1,117,726 29.4
Europe /H1118/H1118/H1118/H1118/H1118/H1118/H11181,113,759 28.7 1,214,182 26.1 1,069,833 26.7 909,301 27.0 894,202 23.5
Germany /H1118/H1118/H1118/H1118/H1118562,042 14.5 563,256 12.1 493,676 12.3 444,756 13.2 466,747 12.3
FINANCIAL INFORMATION
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--- page 333 ---
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Czech Republic /H1118 118,946 3.1 129,626 2.8 122,603 3.1 89,422 2.7 69,593 1.8
Turkey /H1118/H1118/H1118/H1118/H1118/H111853,447 1.4 97,028 2.1 130,111 3.2 109,540 3.3 54,803 1.4
Other European
nations /H1118/H1118/H1118/H1118379,324 9.7 424,272 9.1 323,443 8.1 265,583 7.8 303,059 8.0
North America /H1118/H1118165,716 4.3 297,064 6.4 227,822 5.7 167,816 5.0 182,342 4.8
U.S. /H1118/H1118/H1118/H1118/H1118/H1118/H1118144,614 3.7 296,579 6.4 226,621 5.7 154,951 4.6 179,852 4.7
Other North
American
nations /H1118/H1118/H1118/H111821,102 0.6 485 0.0 1,201 0.0 12,865 0.4 2,490 0.1
Asia (excluding
Chinese
Mainland) /H1118/H1118/H1118/H111825,482 0.7 77,264 1.7 63,639 1.6 55,785 1.6 25,259 0.7
Others /H1118/H1118/H1118/H1118/H1118/H1118/H11187,285 0.1 5,855 0.1 8,270 0.2 6,420 0.2 15,923 0.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,880,779 100.0 4,651,949 100.0 4,008,772 100.0 3,370,274 100.0 3,803,570 100.0
Note:
(1) The geographic location is classified based on the location of our customers, based on our knowledge.
Revenue generated in Chinese Mainland
Our revenue generated in Chinese Mainland increased by 19.0% from RMB2,568.5
million in 2022 to RMB3,057.6 million in 2023, primarily because (i) we reinforced our focus
on strategic key accounts by forming dedicated sales team aimed at engaging top-tier
customers with substantial demand for industrial robots and intelligent manufacturing systems.
This strategic approach enabled us to successfully gain more market share, and (ii) we
experienced heightened demand from customers in the photovoltaic industry, which can be
attributed to the rapid development and evolution of the photovoltaic industry during this
period.
Our revenue generated in Chinese Mainland decreased by 13.7% from RMB3,057.6
million in 2023 to RMB2,639.2 million in 2024, primarily due to (i) our strategic pricing
adjustments in response to increasingly intense market competition; and (ii) reduced demand
from customers in the PV sector, driven by a slowdown of the PV industry. Such decreases
were partially offset by growing demand from emerging industries, such as automotive and
electronics.
FINANCIAL INFORMATION
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Our revenue generated in Chinese Mainland increased by 20.4% from RMB2,231.0
million in the first nine months of 2024 to RMB2,685.8 million in the first nine months of
2025, mainly we intensified our sales efforts in emerging industries such as automotive and
lithium batteries, which led to higher sales to customers in these sectors. At the same time, we
capitalized on the recovery of the domestic downstream market, which drove stronger demand
for industrial robots and intelligent manufacturing systems.
Revenue generated from overseas markets
Our revenue generated from overseas markets increased by 21.5% from RMB1,312.2
million in 2022 to RMB1,594.4 million in 2023, primarily reflecting (i) an increase of
RMB131.3 million in revenue generated from North American market and (ii) an increase of
RMB100.4 million in revenue generated from European market, both driven by higher demand
in the construction machinery industry.
Our revenue generated from overseas markets decreased by 14.1% from RMB1,594.4
million in 2023 to RMB1,369.6 million in 2024, primarily reflecting (i) a decrease of
RMB144.3 million in revenue generated from European market and (ii) a decrease of RMB69.2
million in revenue generated from North American market, both due to weaker performance in
the construction machinery sector. The subdued investment sentiment in the construction
machinery sector reduced purchases of our products, significantly impacting our revenue in
2024.
Our revenue generated from overseas markets modestly remained relatively stable at
RMB1,139.3 million in the first nine months of 2024 and RMB1,117.7 million in the first nine
months of 2025, respectively.
Revenue by Customer Nature
The following table sets forth a breakdown of our revenue by customer nature for the
periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Direct sales /H1118/H1118/H1118/H11183,616,692 93.2 4,263,094 91.6 3,716,275 92.7 3,129,412 92.9 3,437,024 90.4
Distributor sales /H1118/H1118264,087 6.8 388,855 8.4 292,497 7.3 240,862 7.1 366,546 9.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,880,779 100.0 4,651,949 100.0 4,008,772 100.0 3,370,274 100.0 3,803,570 100.0
FINANCIAL INFORMATION
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During the Track Record Period, we sold the majority of our products directly to
customers through our proprietary sales network. Direct sales to customers accounted for
93.2%, 91.6%, 92.7%, 92.9% and 90.4% of our total revenue in 2022, 2023, 2024 and the first
nine months of 2024 and 2025, respectively. We also leveraged our distribution network to
expand sales coverage and reach a broader base of end users. Revenue generated from sales to
distributors accounted for 6.8%, 8.4%, 7.3%, 7.1% and 9.6% of our total revenue in 2022,
2023, 2024 and the first nine months of 2024 and 2025, respectively. See “Business — Sales
and Marketing — Distributors” for details.
Revenue by Industry V ertical
The following table sets forth a breakdown of our revenue by industrial vertical for the
periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Automotive /H1118/H1118/H1118/H1118745,252 19.2 892,272 19.2 938,911 23.4 814,976 24.2 1,245,411 32.7
Construction
machinery and
heavy industry /H11181,799,675 46.4 2,051,946 44.1 1,454,034 36.3 1,197,732 35.5 1,156,360 30.4
Lithium battery /H1118/H1118101,692 2.6 226,181 4.9 357,458 8.9 314,799 9.3 512,298 13.5
Metalworking /H1118/H1118/H1118620,329 16.0 662,435 14.2 635,801 15.9 521,933 15.5 390,555 10.3
Photovoltaic /H1118/H1118/H1118/H1118266,834 6.9 454,188 9.8 241,033 6.0 224,534 6.7 100,518 2.6
Electronics /H1118/H1118/H1118/H1118/H1118127,198 3.3 144,519 3.1 196,166 4.9 151,098 4.5 217,487 5.7
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118219,799 5.6 220,408 4.7 185,369 4.6 145,202 4.3 180,941 4.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,880,779 100.0 4,651,949 100.0 4,008,772 100.0 3,370,274 100.0 3,803,570 100.0
Note:
(1) The industry vertical is classified based on the business nature of our customers, based on our knowledge.
During the Track Record Period, revenue from automotive, construction machinery and
heavy industry, and metal working industries together accounted for the vast majority of our
total revenue. Revenue from automotive industry recorded notable increase throughout the
Track Record Period, driven by our strategic efforts to capture opportunities in this emerging
sector, with a particular focus on establishing relationships with customers engaged in the
manufacturing of NEVs. Revenue from the construction machinery and heavy industry and
metalworking industries increased from 2022 to 2023, as we reinforced our focus on strategic
key accounts by forming dedicated sales teams targeting top-tier customers with substantial
demand for industrial robots and intelligent manufacturing systems. However, revenue from
these two industry verticals declined from 2023 to 2024, and further decreased from the first
nine months of 2024 to the first nine months of 2025, primarily due to weakened investment
sentiment in the construction and real estate industries, which dampened demand in the
construction machinery and metalworking sectors and, in turn, reduced purchases of our
products.
FINANCIAL INFORMATION
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Revenue from PV industry increased from 2022 to 2023, we seized more opportunities by
continuously expanding the application scenarios of our industrial robots, which allowed us to
further increase our market share in this sector. Revenue from PV industry declined from 2023
to 2024, and further declined from the first nine months of 2024 to the first nine months of
2025 due to reduced demand from major customers in the PV sectors, driven by a slowdown
of the PV industry.
Revenue from lithium battery and electronics industries increased both in absolute
amount and as a percentage of our total revenue throughout the Track Record Period, as we
placed more efforts in capturing opportunities in these two emerging sectors.
Cost of Sales
Cost of Sales by Nature
Our cost of sales primarily consists of (i) costs of raw materials and components, (ii) staff
costs, and (iii) others, which mainly include depreciation and amortization, utilities and
logistics costs. During the Track Record Period, key raw materials and components of our
products included reducers, valve blocks, large non-standard fabricated components, as well as
tooling and fixture equipment. The following table sets forth a breakdown of our cost of sales
by nature for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Costs of raw
materials and
components /H1118/H1118/H11182,180,834 83.7 2,719,628 85.1 2,347,672 81.7 1,963,020 83.0 2,279,843 83.4
Staff costs /H1118/H1118/H1118/H1118/H1118295,817 11.4 329,304 10.3 348,484 12.1 278,753 11.8 288,673 10.6
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118127,910 4.9 147,922 4.6 178,586 6.2 122,310 5.2 164,339 6.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,604,561 100.0 3,196,854 100.0 2,874,742 100.0 2,364,083 100.0 2,732,855 100.0
Our cost of sales increased by 22.7% from RMB2,604.6 million in 2022 to RMB3,196.9
million in 2023, primarily attributable to (i) an RMB538.8 million increase in costs of raw
materials and components, driven by higher procurement volumes in 2023 to support elevated
production demand, (ii) an RMB33.5 million increase in staff costs, and (iii) an RMB20.0
million rise in other cost of sales, mainly reflecting higher depreciation and amortization
expenses resulting from the completion of new manufacturing facilities. In 2023, we completed
the expansion of our manufacturing facilities for industrial robots and intelligent
manufacturing systems in Jingmen, Hubei Province, as well as our manufacturing facility for
industrial robots in Nanjing, Jiangsu Province.
FINANCIAL INFORMATION
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--- page 337 ---
Our cost of sales decreased by 10.1% from RMB3,196.9 million in 2023 to RMB2,874.7
million in 2024, primarily due to an RMB372.0 million reduction in costs of raw materials and
components, which generally aligned with the decline in our revenue.
Our cost of sales increased by 15.6% from RMB2,364.1 million in the first nine months
of 2024 to RMB2,732.9 million in the first nine months of 2025, primarily due to (i) an
RMB316.8 million increase in costs of raw materials and components, driven by higher
procurement volumes in the first nine months of 2025 to support elevated production demand,
and (ii) an RMB42.0 million increase in other costs, which was also in line with our revenue
growth.
Cost of Sales by Business Line
The following table sets forth a breakdown of our cost of sales by business line for the
periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Industrial robots
and intelligent
manufacturing
systems /H1118/H1118/H1118/H1118/H11181,937,693 74.4 2,506,638 78.4 2,193,657 76.3 1,850,729 78.3 2,265,999 83.0
– Industrial robots 656,343 25.2 1,033,377 32.3 950,455 33.0 799,929 33.8 1,026,769 37.6
– Intelligent
manufacturing
systems /H1118/H1118/H1118/H1118/H1118432,843 16.6 450,528 14.1 562,549 19.6 511,783 21.7 725,657 26.6
– Industrial robot
workstations /H1118/H1118848,507 32.6 1,022,733 32.0 680,653 23.7 539,017 22.8 513,573 18.8
Core automation
components
and motion
control
systems /H1118/H1118/H1118/H1118/H1118666,163 25.6 688,279 21.5 680,048 23.7 512,482 21.7 465,560 17.0
– Motion control
systems /H1118/H1118/H1118/H1118/H111883,508 3.2 92,830 2.9 71,769 2.5 47,389 2.0 50,083 1.8
– Servo systems /H1118 199,770 7.7 171,425 5.3 166,524 5.8 123,502 5.2 89,814 3.3
– Motion control
solutions /H1118/H1118/H1118/H1118382,885 14.7 424,024 13.3 441,755 15.4 341,591 14.5 325,663 11.9
Rentals /H1118/H1118/H1118/H1118/H1118/H1118/H1118705 0.0 1,937 0.1 1,037 0.0 872 0.0 1,296 0.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,604,561 100.0 3,196,854 100.0 2,874,742 100.0 2,364,083 100.0 2,732,855 100.0
FINANCIAL INFORMATION
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--- page 338 ---
Our cost of sales for industrial robots and intelligent manufacturing systems increased by
29.4% from RMB1,937.7 million in 2022 to RMB2,506.6 million in 2023, primarily driven by
higher demand from customers in specific downstream sectors, such as PV . Our cost of sales
for industrial robots and intelligent manufacturing systems decreased by 12.5% from
RMB2,506.6 million in 2023 to RMB2,193.7 million in 2024, primarily in line with the
decrease in revenue. Our cost of sales for industrial robots and intelligent manufacturing
systems increased by 22.4% from RMB1,850.7 million in the first nine months of 2024 to
RMB2,266.0 million in the first nine months of 2025, primarily attributable to increased
demand in the domestic market, in particular the automotive sector.
Our cost of sales attributable to core automation components and motion control systems
increased by 3.3%, from RMB666.2 million in 2022 to RMB688.3 million in 2023, but
decreased to RMB680.0 million in 2024, and further decreased by 9.2% from RMB512.5
million in the first nine months of 2024 to RMB465.6 million in the first nine months of 2025,
primarily reflecting fluctuations in revenue.
Our cost of sales attributable to rental primarily consisted of depreciation costs related to
leased properties.
Gross Profit and Gross Profit Margin
In 2022, 2023, 2024 and the first nine months of 2024 and 2025, our gross profit was
RMB1,276.2 million, RMB1,455.1 million, RMB1,134.0 million, RMB1,006.2 million and
RMB1,070.7 million, respectively. Gross profit margin represents gross profit divided by
revenue, expressed as a percentage. In 2022, 2023, 2024 and the first nine months of 2024 and
2025, our gross profit margin was 32.9%, 31.3%, 28.3%, 29.9% and 28.2%, respectively.
Gross Profit and Gross Profit Margin by Business Line
The following table sets forth a breakdown of our gross profit and gross profit margin by
business line for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Industrial robots and
intelligent
manufacturing
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118900,955 31.7 1,088,183 30.3 835,446 27.6 749,856 28.8 872,298 27.8
– Industrial robots /H1118/H1118/H1118268,246 29.0 412,744 28.5 282,125 22.9 249,364 23.8 371,144 26.5
– Intelligent
manufacturing
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118149,784 25.7 159,941 26.2 184,473 24.7 185,548 26.6 201,359 21.7
– Industrial robot
workstations /H1118/H1118/H1118/H1118482,925 36.3 515,498 33.5 368,848 35.1 314,944 36.9 299,795 36.9
FINANCIAL INFORMATION
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--- page 339 ---
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Core automation
components and
motion control
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118359,317 35.0 351,736 33.8 296,228 30.3 254,584 33.2 196,935 29.7
– Motion control
systems /H1118/H1118/H1118/H1118/H1118/H1118/H111834,300 29.1 44,846 32.6 28,573 28.5 31,413 39.9 28,372 36.2
– Servo systems /H1118/H1118/H1118/H1118114,809 36.5 96,087 35.9 74,717 31.0 62,795 33.7 47,516 34.6
– Motion control
solutions /H1118/H1118/H1118/H1118/H1118/H1118210,208 35.4 210,803 33.2 192,938 30.4 160,376 31.9 121,047 27.1
Rentals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,946 95.8 15,176 88.7 2,356 69.4 1,751 66.8 1,482 53.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,276,218 32.9 1,455,095 31.3 1,134,030 28.3 1,006,191 29.9 1,070,715 28.2
Our gross profit increased by 14.0% from RMB1,276.2 million in 2022 to RMB1,455.1
million in 2023, primarily driven by an RMB187.2 million increase in gross profit from sales
of industrial robots and intelligent manufacturing systems, partially offset by an RMB7.6
million decline in gross profit from sales of core automation components and motion control
systems. The gross profit margin of our industrial robots and intelligent manufacturing systems
decreased from 31.7% in 2022 to 30.3% in 2023, mainly due to decreased gross profit margins
of our industrial robots and industrial robot workstations, attributable to downward price
adjustments to acquire orders from key account customers. The gross profit margin of core
automation components and motion control systems decreased from 35.0% in 2022 to 33.8%
in 2023, mainly due to decreased gross profit margin of our motion control solutions,
attributable to higher costs of raw materials. These materials were largely procured in 2022,
when elevated logistics costs led to relatively higher prices. Our overall gross profit margin
declined from 32.9% in 2022 to 31.3% in 2023, primarily due to decreased gross profit margins
of our major product lines as mentioned above, and higher depreciation and amortization
expenses from completed facility expansion.
Our gross profit decreased by 22.1% from RMB1,455.1 million in 2023 to RMB1,134.0
million in 2024, primarily driven by (i) an RMB252.7 million decrease in gross profit from
sales of industrial robots and intelligent manufacturing systems; (ii) an RMB55.5 million
decrease in gross profit from sales of core automation components and motion control systems;
and (iii) an RMB12.8 million decrease in gross profit attributable to rentals. The gross profit
margin of our industrial robots and intelligent manufacturing systems decreased from 30.3% in
2023 to 27.6% in 2024, mainly due to intensified market competition. As we implemented our
key account customer strategy and sought to increase our market share in high-barrier
application areas of industrial robots and intelligent manufacturing systems, such as the
automotive and lithium battery industries, which were previously dominated by foreign
manufacturers, we lowered our average selling prices to stay competitive and protect our
market share, which in turn led to a decrease in gross profit margin. The gross profit margin
of core automation components and motion control systems decreased from 33.8% in 2023 to
30.3% in 2024, mainly due to decreased gross profit margin of our servo systems, attributable
to the decreased gross profit margins of certain products used for special equipment that are
FINANCIAL INFORMATION
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--- page 340 ---
needed in construction machinery and heavy industry. Our overall gross profit margin declined
from 31.3% in 2023 to 28.3% in 2024, primarily due to (i) decreased gross profit margins of
our major product lines as mentioned above, and (ii) increased depreciation and amortization
expenses following the completion of new manufacturing facilities.
Our gross profit increased by 6.4% from RMB1,006.2 million in the first nine months of
2024 to RMB1,070.7 million in the first nine months of 2025, primarily driven by an
RMB122.4 million increase in gross profit from sales of industrial robots and intelligent
manufacturing systems partially offset by a decrease of RMB57.6 million in gross profit from
sales of core automation components and motion control systems. The gross profit margin of
our industrial robots and intelligent manufacturing systems decreased from 28.8% in the first
nine months of 2024 to 27.8% in the first nine months of 2025, primarily attributable to a
decrease in the gross profit margin of intelligent manufacturing systems, resulting from
downward price adjustments for intelligent manufacturing systems serving the lithium battery
sector, as we offered favorable pricing terms to select key account customers in the lithium
battery sectors to increase our market penetration. The gross profit margin of our core
automation components and motion control systems decreased from 33.2% in the first nine
months of 2024 to 29.7% in the first nine months of 2025, mainly due to decreased gross profit
margin of motion control solutions, driven by the appreciation of the Euro, which increased the
cost of imported components, as well as higher R&D and market development expenses for
motion control solutions in the sheet metal segment, as we continue to advance our proprietary
solutions. Such decrease was partially offset by the increased gross profit margins of motion
control systems and servo systems, as we focused on certain high-quality customers, allocated
more resources to high-value orders while foregoing low-margin ones, strengthened our
research into application scenarios to deliver integrated solutions with better profitability, and
optimized our product portfolio by offering more competitive motion control systems and servo
systems. Our overall gross profit margin declined from 29.9% in the first nine months of 2024
to 28.2% in the first nine months of 2025, primarily due to decreased gross profit margins of
our major product lines as mentioned above.
See “— Period-to-Period Comparison of Results of Operations” for more details.
Gross Profit and Gross Profit Margin by Geographical Region
The following table sets forth a breakdown of our gross profit and gross profit margin by
geographical region for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Chinese Mainland /H1118878,226 34.2 970,354 31.7 690,561 26.2 569,543 25.5 670,440 25.0
Overseas /H1118/H1118/H1118/H1118/H1118/H1118/H1118397,992 30.3 484,741 30.4 443,469 32.4 436,648 38.3 400,275 35.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,276,218 32.9 1,455,095 31.3 1,134,030 28.3 1,006,191 29.9 1,070,715 28.2
FINANCIAL INFORMATION
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--- page 341 ---
During the Track Record Period, the fluctuations in our gross profit from the Chinese
Mainland and overseas markets primarily reflected the changes in revenue generated from their
respective markets.
Our gross profit margin from the Chinese Mainland decreased from 34.2% in 2022 to
31.7% in 2023 and further to 26.2% in 2024. In the first nine months of 2025, our gross profit
margin from the Chinese Mainland continue to decrease to 25.0% as compared to 25.5% in the
first nine months of 2024. The continued decrease in our gross profit margin from the Chinese
Mainland was primarily due to (i) our strategic price adjustments implemented to attract key
account customers with significant demands; and (ii) the rise in depreciation and amortization
expenses resulting from the completion of manufacturing facility expansion.
Our gross profit margin from overseas markets remained relatively stable at 30.3% in
2022 and 30.4% in 2023. Our gross profit margin from overseas markets increased to 32.4%
in 2024, primarily attributable to the higher proportion of revenue generate from industrial
robots and intelligent manufacturing systems manufactured in China and sold overseas. These
products carry higher margins given their relatively lower costs and higher selling prices. Our
gross profit margin from overseas markets decreased from 38.3% in the first nine months of
2024 to 35.8% in the first nine months of 2025, primarily due to the contribution of certain
higher-margin intelligent manufacturing systems in the first nine months of 2024, which
elevated the gross profit margin for that period.
Other Net Income
Our other net income primarily comprises (i) value-added tax (“ VAT”) super deductions
and refunds, (ii) government grants, which mainly include operating subsidies and the
amortization of government grants related to capital expenditures, (iii) realized and unrealized
gains or losses on other financial assets measured at FVPL, reflecting the fair value changes
of our investments in unlisted securities and funds, (iv) net gains from the disposal of an
associate, as we partially disposed of the equity interest we held in certain associates in 2024,
(v) realized and unrealized gains from investments in wealth management products, (vi)
interest income from bank deposits, (vii) net losses from the disposal of subsidiaries, resulting
from our disposal of equity interests in certain overseas subsidiaries in 2022, (viii) net foreign
exchange gains or losses, (ix) net losses or gains on disposal of property, plant and equipment,
and (x) other miscellaneous gains and losses.
The following table sets forth a breakdown of our other net income for the periods
indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
V A T super deduction and
refund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,296 15.5 40,601 29.2 47,628 38.7 34,015 31.6 27,049 42.8
Government grants /H1118/H1118/H1118/H1118/H1118/H111839,737 29.0 41,078 29.5 38,850 31.5 31,008 28.8 17,761 28.1
FINANCIAL INFORMATION
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--- page 342 ---
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Realized and unrealized
gains/(losses) on other
financial assets measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,828 38.6 30,718 22.1 (22,787) (18.5) – – 12,878 20.4
Net gains on disposal of
interests in associates /H1118/H1118/H1118/H1118– – – – 15,948 13.0 14,781 13.7 976 1.5
Realized and unrealized gains
on wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,284 13.4 23,008 16.5 15,602 12.7 7,190 6.7 10,239 16.2
Interest income from bank
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,040 8.1 9,807 7.0 15,493 12.6 11,910 11.0 9,702 15.3
Net loss on disposal of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,316) (10.5) (69) 0.0 – – – – (3,765) (6.0)
Net foreign exchange
gains/(losses) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,205 6.7 (2,480) (1.8) 7,971 6.5 2,935 2.7 (6,962) (11.0)
Net (losses)/gains on disposal
of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(171) (0.1) 1,000 0.7 (501) (0.4) 3,801 3.5 (788) (1.2)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(921) (0.7) (4,513) (3.2) 4,831 3.9 2,158 2.0 (3,882) (6.1)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,982 100.0 139,150 100.0 123,035 100.0 107,798 100.0 63,208 100.0
Our other net income increased by 1.6% from RMB137.0 million in 2022 to RMB139.2
million in 2023, primarily driven by (i) an RMB19.3 million increase in V A T super deductions
and refunds. V A T super deductions and refunds represent extra percentages of input V A T on top
of standard deductions enjoyed by our software-focused subsidiaries under applicable policies
in China and cash refund of overpaid V A T. Such increase was mainly due to the growth in
revenue from our software-focused PRC subsidiaries, which are eligible for such deductions
and refunds; and (ii) a decrease in net loss on disposal of subsidiaries of RMB14.2 million,
partially offset by a decrease in realized and unrealized gain or loss on other financial assets
measured at FVPL of RMB22.1 million, primarily reflecting changes in the fair value of our
investments in unlisted securities and funds. Our other net income decreased by 11.6% from
RMB139.2 million in 2023 to RMB123.0 million in 2024, primarily reflecting changes in the
fair value of our investments in unlisted securities and funds. Our other net income decreased
by 41.4% from RMB107.8 million in the first nine months of 2024 to RMB63.2 million in the
first nine months of 2025, primarily driven by (i) an RMB13.8 million decrease in net gains
on disposal of interests in associates arising from our disposal of equity interest in certain
associate; and (ii) an RMB13.2 million decrease in government grants; partially offset by an
RMB12.9 million increase in realized and unrealized gains on other financial assets measured
at FVPL.
FINANCIAL INFORMATION
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Selling Expenses
Our selling expenses primarily comprise (i) staff costs for our sales personnel, (ii) travel
expenses incurred by our sales personnel, (iii) advertising and exhibition expenses, primarily
related to our participation in global industrial exhibitions to promote our products, (iv)
business entertainment expenses, (v) intermediary service fees, (vi) packaging expenses, (vii)
depreciation, (viii) office expenses and rent, and (ix) other expenses, primarily including
consumables related to selling activities.
The following table sets forth a breakdown of our selling expenses for the periods
indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118182,067 62.2 218,729 54.8 266,665 59.8 210,155 64.8 200,026 64.9
Travel expenses /H1118/H1118/H1118/H1118/H1118/H111839,842 13.6 67,778 17.0 90,728 20.4 51,951 16.0 37,321 12.1
Advertising and
exhibition expenses /H1118/H111815,778 5.4 30,904 7.7 24,344 5.5 16,825 5.2 21,498 7.0
Business entertainment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,552 3.3 11,750 2.9 17,730 4.0 10,021 3.1 7,988 2.6
Intermediary service fees /H1118 27,893 9.5 41,639 10.4 14,108 3.2 13,355 4.1 22,540 7.3
Packaging expenses /H1118/H1118/H1118/H11182,961 1.0 4,230 1.1 2,807 0.6 2,330 0.7 1,281 0.4
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,039 0.3 1,052 0.3 2,620 0.6 2,320 0.7 3,176 1.0
Office expenses and rent /H1118 2,675 0.9 1,434 0.4 1,091 0.2 818 0.3 2,560 0.8
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,000 3.8 21,815 5.4 25,596 5.7 16,361 5.1 12,007 3.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118292,807 100.0 399,331 100.0 445,689 100.0 324,136 100.0 308,397 100.0
Our selling expenses increased by 36.4%, from RMB292.8 million in 2022 to RMB399.3
million in 2023, primarily attributable to (i) a rise of RMB36.7 million in staff costs, mainly
driven by the expansion of our sales teams, (ii) an increase of RMB27.9 million in travel
expenses, primarily due to our heightened marketing and sales activities aimed at leveraging
industry growth, and (iii) an increase of RMB15.1 million in advertising and exhibition
expenses, as we participated in more exhibitions to promote our products.
Our selling expenses further increased by 11.6%, from RMB399.3 million in 2023 to
RMB445.7 million in 2024, primarily due to (i) an increase of RMB47.9 million in staff costs,
mainly driven by the expansion of our sales team to support business growth, and (ii) an
increase of RMB23.0 million in travel expenses, largely attributable to increased travel by sales
personnel for market expansion, partially offset by (i) a decrease of RMB27.5 million in
intermediary service fees, mainly due to a decreased in sales in 2024, and (ii) a decline of
RMB6.6 million in advertising and exhibition expenses, primarily reflecting our refined
marketing strategies.
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Our selling expenses remained relatively stable at RMB324.1 million in the first nine
months of 2024 and RMB308.4 million in the first nine months of 2025.
Administrative Expenses
Our administrative expenses primarily consist of (i) staff costs for our administrative
personnel, (ii) depreciation and amortization, (iii) impairment losses on financial assets, (iv)
professional and consulting fees, primarily include fees paid for strategic business management
advisory, (v) travel expenses, (vi) office expenses, (vii) impairment losses/(gains) on other
receivables, (viii) taxes and surcharges, primarily consisting of property tax, urban
maintenance and construction tax, and education tax and surcharges, (ix) insurance premiums,
(x) repair and maintenance expenses, (xi) business development expenses, (xii) bank charges,
and (xiii) other expenses, mainly comprising recruitment and hiring expenses,
telecommunications expenses, and impairment losses relating to contractual obligations.
The following table sets forth a breakdown of our administrative expenses for the periods
indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118216,214 51.9 222,846 47.8 285,243 51.9 188,811 49.5 180,781 54.7
Depreciation and
amortization /H1118/H1118/H1118/H1118/H1118/H1118/H111863,679 15.3 73,858 15.8 73,735 13.4 50,274 13.2 43,787 13.3
Professional and
consulting fees /H1118/H1118/H1118/H1118/H111830,379 7.3 43,822 9.4 48,676 8.8 35,296 9.2 27,199 8.2
Travel expenses /H1118/H1118/H1118/H1118/H1118/H111816,434 4.0 18,191 3.9 23,566 4.3 19,101 5.0 15,241 4.6
Office expenses /H1118/H1118/H1118/H1118/H1118/H111813,056 3.1 19,888 4.3 19,653 3.6 14,019 3.7 7,937 2.4
Impairment losses/(gains)
on other receivables /H1118/H111812,629 3.0 (2,702) (0.6) 1,848 0.3 298 0.1 (979) (0.3)
Taxes and surcharges /H1118/H1118/H111811,340 2.7 14,009 3.0 14,279 2.6 12,428 3.3 11,468 3.5
Insurance premiums /H1118/H1118/H1118/H11185,401 1.3 9,676 2.1 10,597 1.9 7,897 2.1 6,738 2.0
Repair and maintenance
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,811 1.6 5,881 1.3 9,638 1.8 5,908 1.5 5,817 1.8
Business development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,480 0.6 4,572 1.0 5,980 1.1 4,130 1.1 3,362 1.0
Bank charges /H1118/H1118/H1118/H1118/H1118/H1118/H11189,262 2.2 9,871 2.1 5,741 1.0 2,234 0.6 3,422 1.0
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,877 7.0 46,446 9.9 51,193 9.3 41,352 10.7 25,596 7.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118416.562 100.0 466,358 100.0 550,149 100.0 381,748 100.0 330,369 100.0
FINANCIAL INFORMATION
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Our administrative expenses increased by 12.0% from RMB416.6 million in 2022 to
RMB466.4 million in 2023, primarily attributable to (i) an increase of RMB13.4 million in
professional and consulting fees, mainly due to our engagement of a third-party consulting firm
to provide services aimed at formulating development strategies and enhancing our operational
efficiency, and (ii) an increase of RMB10.2 million in depreciation and amortization, primarily
attributable to the completion of our new office buildings.
Our administrative expenses grew by 18.0% from RMB466.4 million in 2023 to
RMB550.1 million in 2024, primarily driven by (i) a rise of RMB62.4 million in staff costs,
mainly due to the expansion of our administrative team and an increase in average salaries, and
(ii) an increase of RMB4.6 million in impairment losses on financial assets, primarily due to
extended payment cycles from certain major customers, which led to aged trade receivables
and a corresponding increase in credit losses.
Our administrative expenses decreased by 13.5% from RMB381.7 million in the first nine
months of 2024 to RMB330.4 million in the first nine months of 2025, primarily attributable
to (i) a decrease of RMB15.8 million in other administrative expenses due to decreased
procurement expenses, recruitment expenses and short-term rental expenses, resulting from our
enhanced measures in improving administrative efficiency, (ii) a decrease of RMB8.1 million
in professional and consulting fees, (iii) a decrease of RMB8.0 million in staff costs due to
streamlined structure of our administrative team, and (iv) a decrease of RMB6.5 million in
depreciation and amortization resulting from (a) the disposal of obsolete electronic devices and
aged equipment, and (b) variations in the departments utilizing the assets, which led to the
reclassification of certain assets.
Research and Development Expenses
Our research and development expenses primarily consist of (i) staff costs for our R&D
personnel, (ii) depreciation and amortization, (iii) material expenses, representing expenses for
materials utilized in and testing conducted for our R&D activities, (iv) travel expenses, and (v)
other expenses, mainly comprising technical service fees, utilities, intellectual property-related
expenses and rental expenses.
The following table sets forth a breakdown of our research and development expenses for
the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118235,403 76.5 304,137 78.3 347,894 78.7 244,713 79.8 253,561 79.6
Depreciation and
amortization /H1118/H1118/H1118/H1118/H1118/H1118/H111832,263 10.5 31,276 8.1 49,091 11.1 37,276 12.2 41,057 12.9
Material expenses /H1118/H1118/H1118/H1118/H111827,077 8.8 33,212 8.5 14,160 3.2 11,331 3.7 8,995 2.8
Travel expenses /H1118/H1118/H1118/H1118/H1118/H11186,270 2.0 9,078 2.3 12,224 2.7 6,453 2.1 8,778 2.8
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,567 2.2 10,765 2.8 18,864 4.3 6,837 2.2 6,120 1.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118307,580 100.0 388,468 100.0 442,233 100.0 306,610 100.0 318,511 100.0
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Our research and development expenses grew by 26.3% from RMB307.6 million in 2022
to RMB388.5 million in 2023, primarily driven by (i) an increase of RMB68.7 million in staff
costs, reflecting our continued investment in expanding the research and development team and
offering competitive salaries to attract top talent, and (ii) an increase of RMB6.1 million in
material expenses, primarily due to our sustained investment in research and development
initiatives.
Our research and development expenses further increased by 13.8% from RMB388.5
million in 2023 to RMB442.2 million in 2024, mainly attributable to (i) a rise of RMB43.8
million in staff costs, reflecting our continued investment in expanding the research and
development team and offering competitive salaries to attract top talent, and (ii) an increase of
RMB17.8 million in depreciation and amortization, primarily due to increased capitalized R&D
costs, reflecting our ongoing commitment to investing in advancement of core technologies.
Our research and development expenses increased moderately by 3.9% from RMB306.6
million in the first nine months of 2024 to RMB318.5 million in the first nine months of 2025,
primarily driven by a rise of RMB8.8 million in staff costs, reflecting our continued investment
in expanding the research and development team and offering competitive salaries to attract top
talent.
(Provision for)/Reversal of Impairment Loss on Trade Receivables and Contract Assets
Provision for or reversal of impairment loss on trade receivables and contract assets
represents the provision for, or the reversal of, the loss in the estimated amounts owing from
trade receivables and contract assets that might be uncollectible. We recorded provision for
impairment loss on trade and contract assets of RMB34.9 million, RMB29.6 million, RMB62.7
million, RMB21.6 million in 2022, 2023, 2024 and the first nine months in 2024, respectively,
while recording a reversal of impairment loss on trade receivables and contract assets of
RMB4.8 million for the nine months ended September 30, 2025. The notable increase in our
provision for impairment loss on trade receivables and contract assets from 2023 to 2024 was
primarily driven by the increased revenue contribution from certain key account customers,
whose payment cycles are generally longer. Revenue from a key account customer in the
automotive sector increased significantly in 2024. As this customer generally operates with a
longer payment cycle, the corresponding growth in the balance of trade receivables led to a
higher provision for expected credit losses, which was in line with the increase in the balance
of trade receivables. In addition, the photovoltaic industry experienced a notable decline in
market demand, which slowed collections from certain customers and led to higher provisions
based on the aging of receivables. To address this issue, we have implemented a series of
measures, including establishing a dedicated team to closely monitor monthly collections,
conducting direct collection follow-ups, and managing the risks associated with newly signed
contracts. For details on the provisions we made for trade receivables, see “— Discussion of
Certain Key Items from Our Consolidated Statements of Financial Position — Trade and Other
Receivables.”
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Impairment Losses on Intangible Assets and Goodwill
In 2024, we recorded impairment losses on intangible assets and goodwill totaling
RMB360.5 million, including (i) impairment losses on intangible assets of RMB15.6 million;
and (ii) impairment losses on goodwill of RMB344.9 million. Our impairment losses on
intangible assets and goodwill were primarily due to the underperformance of certain
subsidiaries, driven by reduced demand from specific downstream sectors, including heavy
industry. Such financial underperformance of subsidiaries also reflected an industry-wide
slowdown in the industrial robotics sector in 2024, leading to revenue of these subsidiaries
falling short of expectations and negatively affecting our projected future cash flows.
See “— Discussion of Certain Key Items from Our Consolidated Statements of Financial
Position — Goodwill” for details on the impairment test for goodwill.
Finance Costs
Our finance costs primarily comprise interest expense on (i) interest expenses on bank
loans and other borrowings, (ii) interest on discounted bills, (iii) interest on defined benefit
plans, relating to the actuarial valuation of pension obligations in certain jurisdictions, and (iv)
interest on lease liabilities. The following table sets forth a breakdown of our finance costs for
the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Interest on bank loans
and other
borrowings /H1118/H1118/H1118/H1118/H111871,793 76.4 109,823 84.1 125,983 81.7 88,315 85.0 110,528 92.5
Interest on discounted
bills /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,256 18.3 11,901 9.1 19,281 12.5 13,974 13.4 – –
Interest on defined
benefit plans /H1118/H1118/H1118/H11182,712 2.9 6,752 5.2 7,063 4.6 – – 5,245 4.4
Interest on lease
liabilities /H1118/H1118/H1118/H1118/H1118/H11182,229 2.4 2,062 1.6 1,866 1.2 1,620 1.6 3,714 3.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,990 100.0 130,538 100.0 154,193 100.0 103,909 100.0 119,487 100.0
Share of Profits less Losses of Associates
Our share of profits less losses of associates amounted to RMB3.8 million, RMB12.4
million, RMB17.2 million, RMB12.9 million and RMB2.1 million in 2022, 2023, 2024 and the
first nine months of 2024 and 2025, respectively. Our share of profits less losses of associates
FINANCIAL INFORMATION
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rose from 2022 to 2024 as certain of our associates were still in their early-stage of
development, with substantial R&D investments driving negative profitability. Our share of
profits less losses of associates declined from the first nine months of 2024 to the first nine
months of 2025, as we disposed partial equity interests in certain associate which recorded net
losses in late 2024.
Income Tax
Pursuant to the EIT Law, we and our subsidiaries that operate in Chinese Mainland are
subject to the statutory EIT at a rate of 25%. During the Track Record Period, our Company
and certain PRC subsidiaries of our Group qualified as High and New Technology Enterprises
(“HNTE ”) and were eligible for a reduced corporate income tax rate of 15% in accordance with
applicable tax regulations. HNTE status is subject to reassessment and renewal every three
years.
Pursuant to the rules and regulations of Germany, Cloos Holding GmbH and Carl Cloos
were subject to an average income tax rate of 28.25% during the Track Record Period. This rate
consisted of 15.00% for corporate income tax, 0.825% for solidarity surcharge, and 12.425%
for trade income tax. Similarly, M.A.i GmbH & Co. KG was subject to an average income tax
rate of 27.91% during the same period, comprising 15.00% for corporate income tax, 0.825%
for solidarity surcharge, and 12.08% for trade income tax.
Taxation of other subsidiaries is charged at the prevailing rates applicable in their
respective countries or jurisdictions and is calculated on a stand-alone basis.
We incurred income tax of RMB80.0 million, RMB33.9 million, RMB42.2 million,
RMB25.3 million and RMB30.1 million in 2022, 2023, 2024 and the first nine months of 2024
and 2025, respectively. In 2024, while our Group recorded a loss before taxation, we incurred
income tax primarily due to (i) taxable profit recorded by certain subsidiaries; and (ii) the
reversal of previously recognized deferred tax assets.
As of the Latest Practicable Date, we paid all relevant taxes that were due and applicable
to us and had no disputes or unresolved tax issues with relevant tax authorities.
Profit/(loss) for the Y ear/Period
As a result of the foregoing, we recorded a profit for the year of RMB183.6 million and
RMB133.6 million in 2022 and 2023, respectively. In 2024, we recorded a loss for the year of
RMB817.7 million.
We recorded a loss for the period of RMB62.2 million in the first nine months of 2024,
while recording a profit for the period of RMB29.7 million in the first nine months of 2025.
FINANCIAL INFORMATION
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PERIOD-TO-PERIOD COMPARISON OF RESULTS OF OPERATIONS
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30,
2024
Revenue
Revenue by Business Line
Our revenue increased by 12.9% from RMB3,370.3 million in the first nine months of
2024 to RMB3,803.6 million in the first nine months of 2025. This increase was primarily
driven by an increase of RMB537.7 million in revenue from sales of industrial robots and
intelligent manufacturing systems, partially offset by a decrease of RMB104.6 million in
revenue from sales of core automation components and motion control systems.
Our revenue from sales of industrial robots and intelligent manufacturing systems grew
by 20.7% from the first nine months of 2024 to the first nine months of 2025, primarily
attributable to the recovery of the domestic market, resulting in an increase in the sales volume
of our general-purpose industrial robots. The gradual rebound in the demand of downstream
industries created more business opportunities, leading to higher order intake.
Our revenue from sales of core automation components and motion control systems
declined by 13.6% from the first nine months of 2024 to the first nine months of 2025,
primarily due to intensified market competition.
Our rental income remained relatively stable at RMB2.6 million and RMB2.8 million in
the first nine months of 2024 and 2025, respectively.
Revenue by Geographic Region
Our revenue generated in Chinese Mainland increased by 20.4% from RMB2,231.0
million in the first nine months of 2024 to RMB2,685.8 million in the first nine months of
2025, primarily attributable to the upturn in demand from downstream industries in the
domestic market.
Our revenue from overseas markets remained relatively stable at RMB1,139.3 million in
the first nine months of 2024 and RMB1,117.7 million in the first nine months of 2025,
respectively.
Cost of Sales
Cost of Sales by Nature
Our cost of sales increased by 15.6% from RMB2,364.1 million in the first nine months
of 2024 to RMB2,732.9 million in the first nine months of 2025, primarily due to (i) an
increase of RMB316.8 million in costs of raw materials and components, which is generally in
FINANCIAL INFORMATION
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--- page 350 ---
line with our revenue growth. As downstream demand in domestic market elevated, we
increased our procurement to support higher production demand, and (ii) an increase of
RMB42.0 million in other costs, which was also in line with our revenue growth.
Cost of Sales by Business Line
Our cost of sales for industrial robots and intelligent manufacturing systems increased by
22.4%, from RMB1,850.7 million in the first nine months of 2024 to RMB2,266.0 million in
the first nine months of 2025, which is in line with the increase in revenue. As demand for
industrial robots and intelligent manufacturing systems recovered in the downstream market,
particularly in the automotive sector, our cost of sales increased accordingly.
Our cost of sales for core automation components and motion control systems decreased
by 9.2% from RMB512.5 million in the first nine months of 2024 to RMB465.6 million in the
first nine months of 2025, which is in line with decrease in revenue.
Gross Profit and Gross Profit Margin
Our gross profit increased by 6.4% from RMB1,006.2 million in the first nine months of
2024 to RMB1,070.7 million in the first nine months of 2025, primarily driven by an
RMB122.4 million increase in gross profit from sales of industrial robots and intelligent
manufacturing systems, partially offset by (i) a RMB57.7 million decrease in gross profit from
sales of core automation components and motion control systems, and (ii) a RMB0.3 million
decrease in gross profit attributable to rentals. Our gross profit margin decreased from 29.9%
in the first nine months of 2024 to 28.2% in the first nine months of 2025, respectively.
Our gross profit attributable to sales of industrial robots and intelligent manufacturing
systems increased by 16.3% from RMB749.9 million in the first nine months of 2024 to
RMB872.3 million in the first nine months of 2025, primarily reflecting the increase in
revenue. The gross profit margin of this segment decreased from 28.8% in the first nine months
of 2024 to 27.8% in the first nine months of 2025, primarily because the increase in the revenue
generated from industrial robots outpaced that of industrial robot workstations. Since the gross
profit margin of industrial robots is significantly lower than that of industrial robot
workstations, the shift in revenue mix leads to overall contraction in the gross profit margin of
this segment.
Our gross profit attributable to sales of core automation components and motion control
systems decreased by 22.6% from RMB254.6 million in the first nine months of 2024 to
RMB196.9 million in the first nine months of 2025. The gross profit margin for this business
line also declined from 33.2% in the first nine months of 2024 to 29.7% in the first nine months
of 2025. This was primarily attributable to decrease in the gross profit margin of motion control
solutions, mainly due to downward price adjustment resulting from intensified market
competition.
FINANCIAL INFORMATION
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Other Net Income
Our other net income decreased by 41.4% from RMB107.8 million in the first nine
months of 2024 to RMB63.2 million in the first nine months of 2025, primarily driven by (i)
a decrease of RMB13.8 million in net gains on disposal of interests in associates resulting from
our disposal of equity interest in certain associate, (ii) an RMB13.2 million decrease in
government grants, which was mainly due to a one-off subsidy received by one of our
subsidiaries from the local government in the first nine months of 2024, and (iii) an RMB9.9
million increase in net foreign exchange losses, and (iv) an RMB7.0 million decrease in V A T
super deduction and refund, partially offset by an increase in realized and unrealized gains on
other financial assets measured at FVPL of RMB12.9 million, resulting from changes in the fair
value of our investments in unlisted securities and funds.
Selling Expenses
Our selling expenses remained relatively stable at RMB324.1 million and RMB308.4
million in the first nine months of 2024 and 2025, respectively.
Administrative Expenses
Our administrative expenses decreased by 13.5% from RMB381.7 million in the first nine
months of 2024 to RMB330.4 million in the first nine months of 2025, primarily attributable
to (i) a decrease of RMB15.8 million in other administrative expenses due to decreased
procurement expenses, recruitment expenses and short-term rental expenses, resulting from our
enhanced measures in improving administrative efficiency, (ii) a decrease of RMB8.1 million
in professional and consulting fees, (iii) a decrease of RMB8.0 million in staff costs due to
streamlined structure of our administrative team to improve our operational efficiency, and (iv)
a decrease of RMB6.5 million in depreciation and amortization resulting from (a) the disposal
of obsolete electronic devices and aged equipment, and (b) variations in the departments
utilizing the assets, which led to the reclassification of certain assets.
Research and Development Expenses
Our research and development expenses increased moderately by 3.9% from RMB306.6
million in the first nine months of 2024 to RMB318.5 million in the first nine months of 2025,
primarily driven by a rise of RMB8.8 million in staff costs, reflecting our continued investment
in expanding the research and development team and offering competitive salaries to attract top
talent, partially offset by a decrease in material expenses resulting from the implementation of
lean management of our R&D process and elevated R&D efficiency, leading to reduced
material waste during our R&D process.
FINANCIAL INFORMATION
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Finance Costs
Our financial costs increased by 15.0% from RMB103.9 million in the first nine months
of 2024 to RMB119.5 million in the first nine months of 2025, primarily due to an increase of
RMB22.2 million in interest on bank loans and other borrowings, driven by primarily
attributable to an increase in bank loan balances, driven by additional bank loans secured to
support our working capital needs, which led to an increase in interest expenses.
Share of Profits less Losses of Associates
Our share of profits less losses of associates decreased by 83.7% from RMB12.9 million
in the first nine months of 2024 to RMB2.1 million in the first nine months of 2025. This was
mainly due to the partial disposal of equity interests in certain associates that had incurred net
losses in late 2024. As a result of such disposal, our share of profits less losses of associates
decreased in the first nine months of 2025.
Income Tax
Our income tax increased by 19.0% from RMB25.3 million in the first nine months of
2024 to RMB30.1 million in the first nine months of 2025, primarily attributable to increased
taxable profit recorded by certain subsidiaries.
Our effective income tax rate, being income tax as a percentage of profit/(loss) before
taxation, was negative 68.5% in the first nine months of 2024 and 50.4% in the first nine
months of 2025, respectively.
Profit/(loss) for the Period
As a result of the foregoing, we record a loss for the period of RMB62.2 million in the
first nine months of 2024, compared to a profit for the period of RMB29.7 million in the first
nine months of 2025. Our net loss margin was 1.8% in the first nine months of 2024, while we
reported a net profit margin of 0.8% in the first nine months of 2025.
Y ear Ended December 31, 2024 Compared to Y ear Ended December 31, 2023
Revenue
Revenue by Business Line
Our revenue decreased by 13.8% from RMB4,651.9 million in 2023 to RMB4,008.8
million in 2024. This decline was primarily driven by: (i) a decrease of RMB565.7 million in
revenue from sales of industrial robots and intelligent manufacturing systems, (ii) a decrease
of RMB63.7 million in revenue from sales of core automation components and motion control
systems, and (iii) a decrease of RMB13.7 million in rental income.
FINANCIAL INFORMATION
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Our revenue from sales of industrial robots and intelligent manufacturing systems
declined by 15.7% from 2023 to 2024, primarily due to reduced demand from major customers
in certain downstream sectors, such as PV and heavy industry sectors, driven by a broader
industry-wide slowdown affecting these market segments, partially offset by growing demand
from emerging industries, such as automotive and electronics.
Our revenue from sales of core automation components and motion control systems
declined by 6.1% from 2023 to 2024, primarily due to intensified market competition.
Our rental income declined by 80.1% from 2023 to 2024, as certain office buildings were
converted to self-use upon the expiration of their lease in 2024.
Revenue by Geographic Region
Our revenue generated in Chinese Mainland decreased by 13.7% from RMB3,057.6
million in 2023 to RMB2,639.2 million in 2024, primarily due to (i) our strategic adjustments
in response to increasingly intense market competition; and (ii) reduced demand from major
customers in the PV sectors, driven by a slowdown of the PV industry. Such decreases were
partially offset by growing demand from emerging industries, such as automotive and
electronics.
Our revenue generated from overseas markets decreased by 14.1% from RMB1,594.4
million in 2023 to RMB1,369.6 million in 2024, primarily due to weaker performance in the
construction machinery sector. The subdued investment sentiment in the construction
machinery sector reduced purchases of our products, significantly impacting our revenue in
2024.
Cost of Sales
Cost of Sales by Nature
Our cost of sales decreased by 10.1% from RMB3,196.9 million in 2023 to RMB2,874.7
million in 2024, primarily due to an RMB372.0 million reduction in costs of raw materials and
components, which generally aligned with the decline in our revenue.
Cost of Sales by Business Line
Our cost of sales for industrial robots and intelligent manufacturing systems decreased by
12.5% from RMB2,506.6 million in 2023 to RMB2,193.7 million in 2024, primarily in line
with the decrease in revenue.
Our cost of sales for core automation components and motion control systems decreased
from RMB688.3 million in 2023 to RMB680.0 million in 2024, primarily in line with the
decrease in revenue.
FINANCIAL INFORMATION
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Gross Profit and Gross Profit Margin
Our gross profit decreased by 22.1% from RMB1,455.1 million in 2023 to RMB1,134.0
million in 2024, primarily driven by (i) an RMB252.7 million decrease in gross profit from
sales of industrial robots and intelligent manufacturing systems, (ii) an RMB55.5 million
decrease in gross profit from sales of core automation components and motion control systems,
and (iii) an RMB12.8 million decrease in gross profit attributable to rentals. Our gross profit
margin declined from 31.3% in 2023 to 28.3% in 2024, reflecting margin contraction in the
segment of industrial robots and intelligent manufacturing systems, as well as core automation
components and motion control systems.
Our gross profit attributable to sales of industrial robots and intelligent manufacturing
systems decreased by 23.2% from RMB1,088.2 million in 2023 to RMB835.4 million in 2024,
primarily reflecting the decline in revenue. The gross profit margin of this segment declined
from 30.3% in 2023 to 27.6% in 2024, mainly due to (i) our strategic decision to adjust the
selling prices of certain models to address intensified market competition, and (ii) an increase
in depreciation and amortization costs resulting from the completion of new manufacturing
facilities.
Our gross profit attributable to sales of core automation components and motion control
systems declined by 15.8% from RMB351.7 million in 2023 to RMB296.2 million in 2024. The
gross profit margin for this business line also decreased from 33.8% in 2023 to 30.3% in 2024.
This was primarily attributable to our strategic pricing adjustments for certain models in
response to intensified market competition.
Other Net Income
Our other net income decreased by 11.6% from RMB139.2 million in 2023 to RMB123.0
million in 2024, primarily reflecting changes in the fair value of our investments in unlisted
securities and funds.
Selling Expenses
Our selling expenses increased by 11.6%, from RMB399.3 million in 2023 to RMB445.7
million in 2024, primarily due to (i) an increase of RMB47.9 million in staff costs, mainly
driven by the expansion of our sales team to support business growth, and (ii) an increase of
RMB23.0 million in travel expenses, largely attributable to increased travel by sales personnel
for market expansion, partially offset by (i) a decrease of RMB27.5 million in intermediary
service fees, mainly due to a decreased in sales in 2024, and (ii) a decline of RMB6.6 million
in advertising and exhibition expenses, primarily reflecting our refined marketing strategies.
Administrative Expenses
Our administrative expenses grew by 18.0% from RMB466.4 million in 2023 to
RMB550.1 million in 2024, primarily driven by a rise of RMB62.4 million in staff costs,
mainly due to the expansion of our administrative team and an increase in average salaries.
FINANCIAL INFORMATION
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Research and Development Expenses
Our research and development expenses further increased by 13.8% from RMB388.5
million in 2023 to RMB442.2 million in 2024, mainly attributable to (i) a rise of RMB43.8
million in staff costs, reflecting our continued investment in expanding the research and
development team and offering competitive salaries to attract top talent, and (ii) an increase of
RMB17.8 million in depreciation and amortization, primarily due to increased capitalized R&D
costs, reflecting our ongoing commitment to investing in advancement of core technologies.
Impairment Losses on Intangible Assets and Goodwill
In 2024, we recognized impairment losses on intangible assets and goodwill amounting
to RMB360.5 million, including (i) impairment losses on intangible assets of RMB15.6
million; and (ii) impairment losses on goodwill of RMB344.9 million, whereas no such
impairment losses were recorded in 2023. Our impairment losses on intangible assets and
goodwill were primarily due to the underperformance of certain subsidiaries, driven by reduced
demand from specific downstream sectors, including heavy industry. Such financial
underperformance of subsidiaries also reflected an industry-wide slowdown in the industrial
robotics sector in 2024, leading to revenue of these subsidiaries falling short of expectations
and negatively affecting our projected future cash flows. See “— Discussion of Certain Key
Items from Our Consolidated Statements of Financial Position — Goodwill” for details on the
impairment test for goodwill.
Finance Costs
Our finance costs increased by 18.2% from RMB130.5 million in 2023 to RMB154.2
million in 2024, primarily due to (i) an increase of RMB16.2 million in interest on bank loans
and other borrowings, primarily attributable to an increase in bank loan balances, driven by
additional bank loans secured to support our working capital needs, which led to an increase
in interest expenses; and (ii) an increase of RMB7.4 million in interest on discounted bills,
primarily attributable to greater utilization of financing instruments, such as notes and letters
of credit, through discounting.
Share of Profits less Losses of Associates
Our share of profits less losses of associates increased by 38.7% from RMB12.4 million
in 2023 to RMB17.2 million in 2024, primarily because certain of our associates were still in
their early-stage of development, with substantial R&D investments driving negative
profitability.
Income Tax
Our income tax increased by 24.5% from RMB33.9 million in 2023 to RMB42.2 million
in 2024, primarily attributable to increased taxable profit recorded by certain subsidiaries.
FINANCIAL INFORMATION
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Our effective income tax rate, being income tax as a percentage of profit/(loss) for the
period, was 20.2% in 2023 and negative 5.4% in 2024, respectively.
Profit/(loss) for the Y ear
As a result of the foregoing, we recorded a profit for the year of RMB133.6 million in
2023, compared to a loss for the year of RMB817.7 million in 2024. Our net profit margin was
2.9% in 2023, while we reported a net loss margin of 20.4% in 2024.
Y ear Ended December 31, 2023 Compared to Y ear Ended December 31, 2022
Revenue
Revenue by Business Line
Our revenue increased by 19.9% from RMB3,880.8 million in 2022 to RMB4,651.9
million in 2023. This increase was primarily driven by: (i) an RMB756.2 million increase in
revenue from sales of industrial robots and intelligent manufacturing systems; and (ii) an
RMB14.5 million increase in revenue from sales of core automation components and motion
control systems.
Our revenue from sales of industrial robots and intelligent manufacturing systems grew
by 26.6% from 2022 to 2023, primarily because (i) we reinforced our focus on strategic key
accounts by forming dedicated sales team aimed at engaging top-tier customers with
substantial demand. This strategic approach enabled us to successfully gain more market share;
and (ii) we seized more opportunities in PV industry by continuously expanding the application
scenarios of our industrial robots, which allowed us to further increase our market share in this
sector.
Revenue from sales of core automation components and motion control systems remained
relatively stable at RMB1,025.5 million in 2022 and RMB1,040.0 million in 2023.
Our rental income remained relatively stable at RMB16.7 million in 2022 and RMB17.1
million in 2023.
Revenue by Geographic Region
Our revenue generated in Chinese Mainland increased by 19.0% from RMB2,568.5
million in 2022 to RMB3,057.6 million in 2023, primarily because (i) we reinforced our focus
on strategic key accounts by forming dedicated sales team aimed at engaging top-tier
customers with substantial demand for industrial robots and intelligent manufacturing systems.
This strategic approach enabled us to successfully gain more market share; and (ii) we
experienced heightened demand from customers in the PV industry, which can be attributed to
the rapid development and evolution of the PV industry during this period.
FINANCIAL INFORMATION
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Our revenue generated from overseas markets increased by 21.5% from RMB1,312.2
million in 2022 to RMB1,594.4 million in 2023, primarily driven by higher demand in the
construction machinery market.
Cost of Sales
Cost of Sales by Nature
Our cost of sales increased by 22.7% from RMB2,604.6 million in 2022 to RMB3,196.9
million in 2023, primarily attributable to (i) an RMB538.8 million increase in costs of raw
materials and components, driven by higher procurement volumes in 2023 to support elevated
production demand, (ii) an RMB33.5 million increase in staff costs, driven primarily by the
expansion of the production team, and (iii) an RMB20.0 million rise in other cost of sales,
mainly reflecting higher depreciation and amortization expenses resulting from the completion
of new manufacturing facilities. In 2023, we completed the expansion of our manufacturing
facilities for industrial robots and intelligent manufacturing systems in Jingmen, Hubei
Province, as well as our manufacturing facility for industrial robots in Nanjing, Jiangsu
Province.
Cost of Sales by Business Line
Our cost of sales for industrial robots and intelligent manufacturing systems increased by
29.4%, from RMB1,937.7 million in 2022 to RMB2,506.6 million in 2023, primarily driven by
higher demand from customers in specific downstream sectors, such as PV .
Our cost of sales attributable to core automation components and motion control systems
increased by 3.3%, from RMB666.2 million in 2022 to RMB688.3 million in 2023, primarily
consistent with growth in revenue.
Gross Profit and Gross Profit Margin
Our gross profit increased by 14.0% from RMB1,276.2 million in 2022 to RMB1,455.1
million in 2023, primarily driven by an RMB187.2 million increase in gross profit from sales
of industrial robots and intelligent manufacturing systems, partially offset by an RMB7.6
million decline in gross profit from sales of core automation components and motion control
systems. Our gross profit margin declined from 32.9% in 2022 to 31.3% in 2023, reflecting
margin contraction in the segment of industrial robots and intelligent manufacturing systems,
as well as core automation components and motion control systems.
Our gross profit attributable to sales of industrial robots and intelligent manufacturing
systems increased by 20.8% from RMB901.0 million in 2022 to RMB1,088.2 million in 2023,
primarily in line with revenue growth. However, the gross profit margin for this segment
declined from 31.7% in 2022 to 30.3% in 2023, primarily due to our strategic price adjustments
implemented to attract key account customers with significant demands.
FINANCIAL INFORMATION
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Our gross profit attributable to sales of core automation components and motion control
systems declined by 2.1% from RMB359.3 million in 2022 to RMB351.7 million in 2023 and
the gross profit margin for this business line decreased from 35.0% to 33.8% during the same
period, primarily attributable to our strategic decision to increase the volume of orders for
certain products with moderate profit margins in 2023, with the objective of expanding our
customer base as part of our broader strategy to enhance market penetration.
Other Net Income
Our other net income increased by 1.6% from RMB137.0 million in 2022 to RMB139.2
million in 2023, primarily driven by (i) an RMB19.3 million increase in V A T super deductions
and refunds, which was mainly due to the growth in revenue from our software-focused PRC
subsidiaries, which benefited from V A T deductions under favorable government policies in the
PRC; and (ii) a decrease in net loss on disposal of subsidiaries of RMB14.2 million, partially
offset by a decrease in realized and unrealized gain or loss on other financial assets measured
at FVPL of RMB22.1 million, primarily reflecting changes in the fair value of our investments
in unlisted securities and funds.
Selling expenses
Our selling expenses increased by 36.4%, from RMB292.8 million in 2022 to RMB399.3
million in 2023, primarily attributable to (i) a rise of RMB36.7 million in staff costs, mainly
driven by the expansion of our sales teams, (ii) an increase of RMB27.9 million in travel
expenses, primarily due to our heightened marketing and sales activities aimed at leveraging
industry growth, and (iii) an increase of RMB15.1 million in advertising and exhibition
expenses, as we participated in more exhibitions to promote our products.
Administrative Expenses
Our administrative expenses increased by 12.0% from RMB416.6 million in 2022 to
RMB466.4 million in 2023, primarily attributable to (i) an increase of RMB13.4 million in
professional and consulting fees, mainly due to our engagement of a third-party consulting firm
to provide services aimed at formulating development strategies and enhancing our operational
efficiency; and (ii) an increase of RMB10.2 million in depreciation and amortization expenses,
primarily attributable to the completion of our new office buildings.
Research and Development Expenses
Our research and development expenses grew by 26.3% from RMB307.6 million in 2022
to RMB388.5 million in 2023, primarily driven by (i) an increase of RMB68.7 million in staff
costs, reflecting our continued investment in expanding the research and development team and
offering competitive salaries to attract top talent, and (ii) an increase of RMB6.1 million in
material expenses, primarily due to our sustained investment in research and development
initiatives.
FINANCIAL INFORMATION
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Finance Costs
Our finance costs increased by 38.8% from RMB94.0 million in 2022 to RMB130.5
million in 2023, primarily due to an increase of RMB38.0 million in interest on bank loans and
other borrowings, mainly due to higher bank borrowings to support our working capital needs.
Share of Profits less Losses of Associates
Our share of profits less losses of associates increased significantly from RMB3.8 million
in 2022 to RMB12.4 million in 2023, primarily because certain of our associates were still in
their early-stage of development, with substantial R&D investments driving negative
profitability.
Income Tax
Our income tax decreased by 57.6% from RMB80.0 million in 2022 to RMB33.9 million
in 2023, primarily attributable to our decreased profit before taxation.
Our effective income tax rate, being income tax as a percentage of profit/(loss) for the
period, was 30.4% and 20.2% in 2023 and 2024, respectively.
Profit/(loss) for the Y ear
As a result of the foregoing, our profit for the year decreased by 27.2% from RMB183.6
million in 2022 to RMB133.6 million in 2023. Our net profit margin was 4.7% and 2.9% in
2022 and 2023, respectively.
DISCUSSION OF CERTAIN KEY ITEMS FROM OUR CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
The following table sets forth our consolidated statements of financial position as of the
dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current Assets
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118916,167 1,321,846 1,513,277 1,554,716
Investment property /H1118/H1118/H1118/H1118/H1118/H1118– – – 52,826
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118226,767 241,468 267,756 247,906
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118455,064 553,358 560,502 560,509
FINANCIAL INFORMATION
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As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,485,681 1,485,681 1,104,079 1,044,588
Interests in associates /H1118/H1118/H1118/H111852,565 85,324 46,308 263,858
Financial assets measured
at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,480 141,440 180,208 173,261
Financial assets measured
at fair value through
profit or loss (“ FVPL ”) /H1118 262,214 291,572 213,732 221,182
Trade and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,117 61,454 18,652 28,967
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118175,854 206,619 172,630 130,997
Total non-current assets /H1118/H11183,766,909 4,388,762 4,077,144 4,278,810
Current Assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,130,490 1,340,221 1,721,045 1,446,241
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118121,414 203,712 168,646 229,697
Trade and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,920,889 2,454,865 2,557,475 2,812,345
Income tax recoverable /H1118/H1118/H111814,532 30,724 30,740 22,947
Financial assets measured
at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118578,115 435,820 388,913 170,136
Restricted bank deposits /H1118/H1118 49,972 31,142 15,832 51,291
Cash and cash equivalents /H1118 668,322 1,196,253 1,181,104 1,121,966
Total current assets /H1118/H1118/H1118/H1118/H11184,483,734 5,692,737 6,063,755 5,854,623
Current Liabilities
Trade and other payables /H1118/H11181,582,591 2,299,421 2,555,557 2,658,426
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118249,105 297,507 505,014 520,383
Bank loans and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,453,271 2,404,602 2,929,370 2,811,806
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,517 12,522 20,120 17,864
Income tax payable /H1118/H1118/H1118/H1118/H1118/H111819,373 10,541 2,271 16,836
Total current liabilities /H1118/H11183,317,857 5,024,593 6,012,332 6,025,315
Net Current
Assets/(Liabilities) /H1118/H1118/H1118/H1118/H11181,165,877 668,144 51,423 (170,692)
Total assets less current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,932,786 5,056,906 4,128,567 4,108,118
FINANCIAL INFORMATION
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As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current Liabilities
Bank loans and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,430,092 1,809,984 1,792,601 1,624,891
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,772 43,005 67,300 64,265
Defined benefit plan
obligations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190,619 198,964 201,582 236,510
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,726 49,775 68,055 97,765
Provisions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,156 37,716 37,144 65,752
Deferred tax liabilities /H1118/H1118/H1118/H111882,077 93,086 66,795 32,703
Other non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,438 2,362 2,388 2,483
Total non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,862,880 2,234,892 2,235,865 2,124,369
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,069,906 2,822,014 1,892,702 1,983,749
Property, Plant and Equipment and Investment Property
Our property, plant and equipment consist of (i) freehold land; (ii) plant and buildings;
(iii) machinery and equipment; (iv) motor vehicles; (v) office equipment and others; and (vi)
construction in progress.
The carrying amount of our property, plant and equipment increased from RMB916.2
million as of December 31, 2022, to RMB1,321.8 million as of December 31, 2023, then to
RMB1,513.3 million as of December 31, 2024, and further to RMB1,554.7 million as of
September 30, 2025. This growth was primarily attributable to increases in the net carrying
amount of construction in progress, mainly resulting from our ongoing investments in
manufacturing facilities, reflecting our efforts to enhance production capabilities and
technological innovation. In 2022, we commenced the construction of our manufacturing
facility for industrial robots in Nanjing, Jiangsu Province. In 2023, we initiated the
development of our manufacturing premises in Foshan, Guangdong Province for industrial
robots. As of the Latest Practicable Date, we have completed the construction of these
manufacturing facilities. In 2024, we began the construction of our production plant in Poland
for industrial robots and welding automation systems, and we had completed the phase I
construction as of the Latest Practicable Date.
Our investment property represents the premises we held for leasing purposes. The carry
amount of our investment property was RMB52.8 million as of September 30, 2025. Our
Directors assessed if there is any indication of impairment for property, plant and equipment
and investment property at the end of each reporting period, and, where any such indication
FINANCIAL INFORMATION
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exists, determined the recoverable amount of these assets, which are the higher of their fair
value less costs of disposal and their value in use. Based on our assessment, we did not make
any impairment for property, plant and equipment and investment property in 2022, 2023, 2024
and the nine months ended September 30, 2025.
See “Business — Manufacturing — Manufacturing Facilities” and Note 11 to the
Accountants’ Report set out in Appendix I to this prospectus for more details.
Right-of-use Assets
Our right-of-use assets represent our rights to utilize underlying assets over the lease
term. These assets primarily include leasehold land, plant and buildings, as well as machinery
and equipment, which are utilized in our operations. We recognize right-of-use assets at the
lease commencement date, which is the date when the underlying asset is available for use. The
right-of-use assets are initially measured at cost, which comprises the initial amount of the
lease liability, any lease payments made at or before the commencement date, initial direct
costs incurred, and an estimate of costs to dismantle, remove, or restore the underlying asset
or site, less any lease incentives received. The right-of-use assets are subsequently stated at
cost, less accumulated depreciation and any impairment losses. Depreciation is calculated on
a straight-line basis over the shorter of the lease term and the estimated useful life of the asset.
For details of the accounting policy of right-of-use assets, see Note 2(i) to the Accountants’
Report set out in Appendix I to this prospectus.
The carrying amount of our right-of-use assets increased from RMB226.8 million as of
December 31, 2022 to RMB241.5 million as of December 31, 2023, and further to RMB267.8
million as of December 31, 2024, respectively. The continuous increase in the carrying amount
of our right-of-use assets was primarily attributable to the addition of leasehold land to support
our operations in China. The carrying amount of our right-of-use assets remained relatively
stable at RMB247.9 million as of September 30, 2025.
Our Directors assessed if there is any indication of impairment for right-of-use assets at
the end of each reporting period, and, where any such indication exists, determined the
recoverable amount of these assets, which are the higher of their fair value less costs of
disposal and their value in use. Based on our assessment, we did not make any impairment for
right-of-use assets in 2022, 2023, 2024 and the nine months ended September 30, 2025.
See Note 12 to the Accountants’ Report set out in Appendix I to this prospectus for more
details.
Intangible Assets
Our intangible assets represent (i) software, (ii) non-patented technologies, (iii)
concessions, (iv) patented technologies, (v) trademarks, and (vi) development costs.
FINANCIAL INFORMATION
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The net carrying amount of our intangible assets increased from RMB455.1 million as of
December 31, 2022, to RMB553.4 million as of December 31, 2023, and further to RMB560.5
million as of December 31, 2024, primarily due to continuous additions in capitalized
development costs, reflecting our consistent investment in R&D. The net carrying amount of
our intangible assets remained stable at RMB560.5 million as of September 30, 2025.
Our Directors assessed indications of impairment for intangible assets at each reporting
date in accordance with IAS 36.
Impairment tests for non-patented technologies
Impairment losses of RMB15.6 million, in respect of certain non-patented technologies
which were iterated and that could not generate future economic benefits, were provided
against for impairment for the year ended December 31, 2024. These non-patented
technologies were fully impaired.
Impairment tests for development costs
Development costs related to certain robotic R&D projects of Carl Cloos amounted to
RMB28.0 million, RMB24.5 million and RMB22.1 million as of December 31, 2022, 2023 and
2024, respectively. These development costs form part of CGU of Carl Cloos, the impairment
tests of which is disclosed in “— Goodwill.” See Note 14 to the Accountants’ Report set out
in Appendix I of this prospectus for details.
The remaining development costs related to other certain robotic R&D projects amounted
to RMB79.8 million, RMB34.5 million and RMB26.7 million as of December 31, 2022, 2023
and 2024, respectively. The recoverable amounts of these development costs are determined
based on excess earnings method. The key assumption used in the impairment tests is pre-tax
discount rate. The pre-tax discount rate was 26.18%, 26.12% and 26.02% as of December 31,
2022, 2023 and 2024, respectively, and the recoverable amount of such development costs is
estimated to exceed its carrying amount by approximately RMB16.6 million, RMB10.0
million, RMB13.4 million as of the same dates. If the pre-tax discount rate increased by 6.01%,
5.52% and 9.69% as of December 31, 2022, 2023 and 2024, respectively, the estimated
recoverable amount will be equal to the carrying amount. Based on the sensitivity analysis
above, our Directors concluded that a reasonably possible change in key parameters would not
cause the carrying amount of development costs to exceed its recoverable amount as of
December 31, 2022, 2023 and 2024.
Impairment tests for trademarks with indefinite useful lives
Trademarks with indefinite useful lives are related to Carl Cloos as of December 31,
2022, 2023 and 2024, and accordingly form part of the CGU of Carl Cloos. The impairment
tests of these trademarks with indefinite useful lives is disclosed in “— Goodwill.” See Note
14 to the Accountants’ Report set out in Appendix I of this prospectus for details.
We did not perform quantitative impairment test for above intangible assets not yet
available for use or with indefinite useful lives as of September 30, 2025, since our accounting
policy is to perform impairment test annually at year end, or more frequently if events or
changes in circumstances indicate that they might be impaired in accordance with IAS 36,
Impairment of assets . We did not identify any indication that the intangible assets not yet
available for use or with indefinite useful live would be impaired as of September 30, 2025.
FINANCIAL INFORMATION
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See Note 13 to the Accountants’ Report set out in Appendix I to this prospectus for more
details.
Goodwill
Goodwill arising on the acquisition of businesses is measured at cost, net of accumulated
impairment losses. We assess whether goodwill is impaired at least once annually. Impairment
testing involves estimating the value in use of the cash-generating units (“ CGU”) to which
goodwill has been allocated. This process requires us to estimate future cash flows expected
to be derived from the cash-generating units and to apply an appropriate discount rate to
determine the present value of those cash flows.
As of December 31, 2022 and December 31, 2023, the carrying amount of goodwill
remained unchanged at RMB1,485.7 million. However, as of December 31, 2024, goodwill
decreased to RMB1,104.1 million, primarily because we recognized impairment losses on
goodwill amounting to RMB344.9 million in 2024. This was primarily due to the
underperformance of certain subsidiaries, driven by reduced demand from specific downstream
sectors, including heavy industry. Such financial underperformance of subsidiaries also
reflected an industry-wide slowdown in the industrial robotics sector in 2024, leading to
revenue of these subsidiaries falling short of expectations and negatively affecting our
projected future cash flows. As of September 30, 2025, the carrying amount of goodwill further
decreased to RMB1,044.6 million, resulting from our disposal of Y angzhou Shuguang in June
2025. For further details, see “History — Major Share Capital Changes and Development of
Our Company — Disposal of Y angzhou Shuguang Optoelectronics Automation Co., Ltd. ( ౮ψ
ப΂ʮ̡)( “ Y angzhou Shuguang ”).”
Impairment Tests for Goodwill
The carrying amount of goodwill is allocated to our Group’s CGU, including (i) Carl
Cloos; (ii) Y angzhou Shuguang; (iii) Trio Motion; (iv) M.A.i GmbH & Co. KG (“ M.A.i ”); (v)
Estun Intelligent; (vi) Shanghai Prex Mfg. Co., Ltd., (“ Prex ”); and (vii) unit without
significant goodwill. The following sets forth details of the carrying amount of goodwill
allocated to groups of CGUs as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carl Cloos /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,015,207 1,015,207 767,461 857,182
Y angzhou Shuguang /H1118/H1118/H1118/H1118/H1118/H1118215,289 215,289 157,625 –
Trio Motion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,048 95,048 66,381 73,790
M.A.i /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,909 63,909 63,909 64,913
Estun Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,324 41,324 41,324 41,324
Prex /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,904 54,904 – –
Unit without significant
goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 7,379 7,379
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,485,681 1,485,681 1,104,079 1,044,588
FINANCIAL INFORMATION
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The recoverable amounts of the respective CGUs are determined based on value-in-use
calculation. We engaged independent professional valuers to assist with the calculations. These
calculations use cash flow projections based on financial budgets approved by management
covering a five-year period. Cash flows beyond the five-year period are extrapolated using an
estimated terminal growth rate of 0%. The discount rates used are pre-tax and reflect specific
risks relating to the relevant industry, the CGUs themselves and the macro-environment. The
key assumptions used in estimating the recoverable amount are as follows:
As of December 31,
2022 2023 2024
%%%
Annual revenue growth rate during
the forecast period
Carl Cloos /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.50-8.00 5.00-6.00 4.95-27.14
Y angzhou Shuguang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.00-16.01 4.13-12.85 3.19-41.35
Trio Motion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.26-10.11 2.00-8.33 3.00-9.79
M.A.i /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.15-4.46 1.00-4.43 3.00
Estun Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.00-5.00 3.00 2.00
Prex /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.00-8.00 4.00-14.94 9.10-32.48
Pre-tax discount rate
Carl Cloos /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813.70 11.40 11.25
Y angzhou Shuguang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814.06 12.41 12.69
Trio Motion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816.89 15.25 16.94
M.A.i /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813.86 12.79 12.82
Estun Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811.80 10.39 13.08
Prex /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811.50 11.14 13.22
As of December 31, 2022 and 2023, the recoverable amount of Carl Cloos was estimated
to exceed its carrying amount by approximately RMB374.1 million and RMB154.2 million,
respectively. As of December 31, 2024, the recoverable amount of Carl Cloos was RMB203.6
million lower than its carrying amount, primarily because revenue and profitability of Carl
Cloos fell short of forecast due to weaker demand from the construction machinery and heavy
industry sectors. Carl Cloos’s products are primarily used in power generation machinery, coal
mining equipment and shipbuilding steel structures. In 2024, investment in the construction
machinery and heavy industry sector declined due to a slowdown in global economic growth,
prompting customers to exercise greater caution in capital expenditure and leading to reduced
order intake for Carl Cloos. Accordingly, an impairment loss fully allocated to CGU of
RMB203.6 million was recognized in profit or loss for the year ended December 31, 2024.
As of December 31, 2022 and 2023, the recoverable amount of Y angzhou Shuguang was
estimated to exceed its carrying amount by approximately RMB1.3 million and RMB6.8
million, respectively. As of December 31, 2024, the recoverable amount of Y angzhou
Shuguang attributable to our Group was RMB84.8 million lower than its carrying amount
primarily because revenue and profitability of Y angzhou Shuguang fell short of forecast due to
FINANCIAL INFORMATION
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--- page 366 ---
weaker demand from downstream sectors, particularly the construction machinery and heavy
industry segments. Y angzhou Shuguang primarily produces core automation components and
motion control systems, which are ultimately applied in motors, transformers and drive-control
systems within these industries. In 2024, customers in these sectors tightened their capital
expenditure budgets and implemented more stringent project approval and procurement
processes, reflecting broader market and business environment considerations. This led to
longer decision-making cycles, delays in product delivery, and a reduction in order intake.
Accordingly, an impairment loss fully allocated to CGU attributable to our Group of RMB57.7
million was recognized in profit or loss for the year ended December 31, 2024.
As of December 31, 2022 and 2023, the recoverable amount of Trio Motion was estimated
to exceed its carrying amount by approximately RMB1.9 million and RMB2.4 million,
respectively. As of December 31, 2024, the recoverable amount of Trio Motion was RMB28.7
million lower than its carrying amount primarily because revenue and profitability of Trio
Motion fell short of forecast. Trio serves downstream customers across several industry
segments, primarily including packaging, logistics, machine tools and semiconductors. From
2023 to 2024, Trio expanded its sales team as part of its strategy to develop new sales channels
in the South Asian market. While overall revenue remained stable during this period, the newly
established sales team has yet to fully ramp up and translate these their efforts into the
anticipated business results, leading to higher selling expenses and, consequently, profitability
falling short of expectations. Accordingly, an impairment loss fully allocated to CGU of
RMB28.7 million was recognized in profit or loss for the year ended December 31, 2024.
As of December 31, 2022, 2023 and 2024, the recoverable amount of M.A.i was estimated
to exceed its carrying amount by approximately RMB3.4 million, RMB5.9 million and
RMB3.9 million, respectively.
As of December 31, 2022, 2023 and 2024, the recoverable amount of Estun Intelligent
was estimated to exceed its carrying amount by approximately RMB5.3 million, RMB8.2
million and RMB10.0 million, respectively.
As of December 31, 2022 and 2023, the recoverable amount of Prex was estimated to
exceed its carrying amount by approximately RMB1.2 million and RMB4.2 million,
respectively. As of December 31, 2024, the recoverable amount of Prex was RMB54.9 million
lower than its carrying amount, primarily because Prex’s revenue fell short of forecast,
primarily due to changes in the downstream traditional automotive sector. The industry in
which Prex operates, namely peripheral equipment for die casting machines, is closely linked
to traditional automotive manufacturing. As competition intensified due to the accelerating
transition to new energy vehicles, many traditional automakers tightened cost controls and
adjusted their capacity planning, which softened demand for such equipment. During the same
period, as we commenced cooperation with certain new customers, we encountered difficulties
in coordination across various stages of product delivery, which led to delays from the original
schedule. As a result, the recoverable amount of those projects was lower than their carrying
amount. Accordingly, an impairment loss fully allocated to CGU of RMB54.9 million was
recognized in profit or loss for the year ended December 31, 2024.
FINANCIAL INFORMATION
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--- page 367 ---
We did not perform quantitative impairment test for above goodwill as of September 30,
2025, since our accounting policy is to perform impairment test annually at year end, or more
frequently if events or changes in circumstances indicate that they might be impaired in
accordance with IAS 36, Impairment of assets . We did not identify any indication that the
goodwill would be impaired as of September 30, 2025.
See Note 14 to the Accountants’ Report set out in Appendix I to this prospectus for more
details.
Interests in Associates
Our interests in associates increased from RMB52.6 million as of December 31, 2022 to
RMB85.3 million in 2023, primarily because we increased investments in certain associates.
Our interests in associates decreased to RMB46.3 million as of December 31, 2024, primarily
reflecting the adjustments to our equity interests in certain associates. Our interests in
associates substantially increased from RMB46.3 million as of December 31, 2024 to
RMB263.9 million as of September 30, 2025, primarily resulting from our disposal of partial
equity interests in Y angzhou Shuguang in June 2025. Upon completion of such disposal,
Y angzhou Shuangguang ceased to be our subsidiary and was regarded as an associate of our
Company.
Inventories
Our inventories comprise (i) raw materials, (ii) work in progress, (iii) finished goods, (iv)
goods in transit, (v) goods delivered to customers, and (vi) contract costs. During the Track
Record Period, our raw materials primarily consisted of reducers, valve blocks, large
non-standard fabricated components, as well as tooling and fixture equipment. Work in
progress refers to partially completed products and intelligent manufacturing systems that are
still in the process of production. Finished goods include products ready for transit at our
production plants. Goods delivered to customers are those that have not yet been accepted
through the inspection process. Contract costs refer to direct costs we incurred to satisfy a
contract and deliver the promised products. Under IFRS 15, we capitalize costs to fulfill a
contract when such costs (i) relate directly to an existing contract or a specifically identifiable
anticipated contract, (ii) generate or enhance resources that will be used in satisfying
performance obligations in the future, and (iii) are expected to be recoverable. The following
table sets forth a breakdown of our inventories as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118629,826 495,149 416,411 437,161
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,039 326,774 474,491 498,584
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118245,408 401,586 575,067 431,056
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,929 1,592
Goods delivered to customers /H1118 57,317 46,222 133,434 30,473
1,070,590 1,269,731 1,602,232 1,398,866
Contract costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118117,979 144,767 231,259 151,894
Write-down of inventories /H1118/H1118/H1118/H1118(58,079) (74,277) (112,546) (104,519)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,130,490 1,340,221 1,721,045 1,446,241
FINANCIAL INFORMATION
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Our inventories increased by 18.6% from RMB1,130.5 million as of December 31, 2022,
to RMB1,340.2 million as of December 31, 2023, primarily reflecting (i) an increase of
RMB188.7 million in work in progress, primarily because we gradually transitioned certain
materials previously outsourced to in-house production for cost reduction purposes, and (ii) an
increase of RMB156.2 million in finished goods, as we stocked certain general-purpose models
to ensure a rapid response to needs of our key account customers. Our inventories further
increased by 28.4% to RMB1,721.0 million as of December 31, 2024, primarily reflecting (i)
an increase of RMB173.5 million in finished goods, as we stocked certain general-purpose
models to ensure a rapid response to needs of our key account customers; and (ii) an increase
of RMB147.7 million in work in progress, mainly due to our increased orders for intelligent
manufacturing systems in 2024, which are characterized by extended production cycles,
leading to a temporary buildup of work-in-progress inventory. Our inventories decreased by
16.0% to RMB1,446.2 million as of September 30, 2025, primarily reflecting a decrease of
RMB144.0 million in finished goods in response to rising market demand.
We make provisions to write down our inventories to their net realizable value if their
expected net realizable value is lower than their costs. Inventories are measured at the lower
of cost and net realizable value. Net realizable value is the estimated selling price in the
ordinary course of business, less the estimated costs of completion and the estimated costs
necessary to make the sale, including selling expenses and any applicable taxes. In addition,
we assess inventory based on its aging and make corresponding provisions for write-downs
when inventory items exceed certain time thresholds. As of December 31, 2022, 2023, and
2024 and September 30, 2025, our write-down of inventories amounted to RMB58.1 million,
RMB74.3 million, RMB112.5 million and RMB104.5 million, respectively. The fluctuations in
our write-down of inventories during the Track Record Period was primarily in line with the
fluctuations of our inventories. Our Directors are of the view that, during the Track Record
Period, the provisions made to write down our inventories were sufficient.
The following table sets forth an aging analysis of our inventories as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118995,772 1,111,973 1,465,494 1,091,548
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884,039 150,820 159,090 260,718
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,431 53,923 72,564 76,058
More than 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,249 23,503 23,896 17,917
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,130,490 1,340,221 1,721,045 1,446,241
FINANCIAL INFORMATION
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The following table sets forth the number of our inventory turnover days for the periods
indicated:
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
Inventory turnover days (1) /H1118/H1118 138 141 194 158
Note:
(1) Calculated as the average of the opening and closing inventory balances for the period, divided by the
cost of sales for the relevant period, multiplied by 365 days for the years ended December 31, 2022,
2023 and 2024, or 273 days for the nine months ended September 30, 2025.
Our inventory turnover days remained relatively stable at 138 days and 141 days in 2022
and 2023, respectively. Our inventory turnover days further increased to 194 days in 2024,
primarily driven by our proactive strategy of maintaining higher inventory levels of certain
general-purpose models to promptly meet the needs of our key account customers and ensure
operational readiness. Our inventory turnover days decreased to 158 days in the first nine
months of 2025, primarily because we strengthened our make-to-order production model and
enhanced the management of finished goods inventory.
As of December 31, 2025, approximately RMB353.2 million, or 22.8% of our inventories
as of September 30, 2025, had been subsequently recognized as cost of sales. The slow
recognition of inventories after September 30, 2025 was primarily because certain products
required a relatively long period of commissioning and validation before fulfillment, during
which they had not yet met the conditions for revenue recognition. In addition, we kept
inventories of certain raw materials to meet regular demand and provide a buffer for potential
excess demand. We will continue to optimize our inventory management, including procuring
raw materials in accordance with production plans and regularly monitoring inventory levels
to ensure an appropriate inventory position.
Contract Assets
Our contract assets are recognized when we recognize revenue before being
unconditionally entitled to considerations under the terms in the contracts. Our contract assets
increased from RMB121.4 million as of December 31, 2022 to RMB203.7 million as of
December 31, 2023, primarily because we proactively accelerated the settlement progress in
our European subsidiaries at the end of 2022 in response to geopolitical tensions, which
resulted in a relatively low contract asset balance as of December 31, 2022. In 2023, the
settlement process normalized, leading to a higher year-end balance. Our contract assets
decreased to RMB168.6 million as of December 31, 2024, primarily due to the completion of
certain overseas projects in 2024. Our contract assets increased to RMB229.7 million as of
September 30, 2025, primarily attributable to higher prepayment from customers, driven by the
growth of orders.
FINANCIAL INFORMATION
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As of December 31, 2025, approximately RMB67.9 million, or 29.0% of our contract
assets as of September 30, 2025, had been subsequently recognized as revenue.
Trade and Other Receivables
Our trade and other receivables primarily consist of (i) trade receivables, which primarily
represent outstanding amounts due from our customers and distributors for products sold in the
ordinary course of our business; (ii) bills receivable, primarily relating to the bank and
commercial bills received from customers and distributors; (iii) bills receivable, measured at
FVOCI; (iv) amounts due from related parties; (v) value-added tax recoverable; (vi)
prepayments to third-party suppliers for the procurement of raw materials or components; and
(vii) other receivables, mainly related to advance to employees and deposits.
Our trading terms with customers are predominantly on credit, with the credit period
generally up to six months. Trade receivables are typically settled in accordance with the terms
stipulated in the respective contracts.
The following table sets forth a breakdown of our trade and other receivables as of the
dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,329,064 1,707,171 1,921,485 2,103,101
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118(79,737) (109,701) (144,928) (127,750)
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118208,959 54,852 146,969 68,773
Net trade and bill
receivables measured at
amortized cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,458,286 1,652,322 1,923,526 2,044,124
Bills receivable, measured
at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118296,140 671,921 483,536 557,580
Amounts due from related
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100 864 825 8,616
V alue-added tax
recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,884 38,307 65,256 43,165
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,658 57,693 44,387 51,278
Listing expenses to be
capitalized /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 16,434
FINANCIAL INFORMATION
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As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Receivables arising from
disposal of interests in
subsidiaries and associates – – – 46,060
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,821 33,758 39,945 45,088
Total trade and other
receivables – current /H1118/H1118/H11181,920,889 2,454,865 2,557,475 2,812,345
Non-current
Long-term deferred
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,214 23,923 9,048 6,650
Prepayment for the purchase
of property, plant and
equipment and intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,800 37,531 9,604 22,317
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,103 – – –
Total trade and other
receivables –
non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,117 61,454 18,652 28,967
The current portion of trade and other receivables increased from RMB1,920.9 million as
of December 31, 2022, to RMB2,454.9 million as of December 31, 2023, primarily attributable
to our growing sales. The current portion of trade and other receivables further increased to
RMB2,557.5 million as of December 31, 2024, and further increased to RMB2,812.3 million
as of September 30, 2025, primarily due to (i) higher trade volumes with certain automotive
customers who had relatively long payment cycles, and (ii) extended payment cycles of
customers in the PV industry due to a market downturn.
We assess the recoverability of trade and other receivables on a forward-looking basis by
estimating expected credit losses (“ ECL”s). Our Directors estimate that the credit risk of trade
receivables from certain customers (who have, among others, significant financial difficulties,
enter bankruptcy or other financial reorganization) are high. The measurement of ECLs on
those trade receivables with high credit risk are assessed on an individual basis. Our evaluation
of other trade receivables incorporates historical settlement patterns, current credit conditions,
and forward-looking information to account for changes in credit risk since initial recognition.
Trade and other receivables are reviewed periodically, and impairment losses are recognized
through a loss allowance account when necessary. Our Directors are of the view that there’s
no material recoverability issue for trade receivables and sufficient provision has been made
for ECLs.
FINANCIAL INFORMATION
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The following table sets forth an aging analysis of our trade receivables and bills
receivable, based on past due information and net of loss allowance, as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,676,521 2,235,568 2,039,229 2,367,118
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,505 121,019 420,725 252,131
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,318 36,010 58,158 93,780
More than 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,819 41,347 33,878 16,425
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118(79,737) (109,701) (144,928) (127,750)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,754,426 2,324,243 2,407,062 2,601,704
The following table sets forth the number of our trade and bill receivables turnover days
for the periods indicated:
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
Trade and bill receivables
turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135 160 215 180
Note:
(1) Calculated as the average of the opening and closing balances of trade and bill receivables for the
period, net of loss allowance, divided by revenue for the relevant period, multiplied by 365 days for the
years ended December 31, 2022, 2023 and 2024, or 273 days for the nine months ended September 30,
2025.
Our trade and bill receivables turnover days increased from 135 days in 2022 to 160 days
in 2023, and further to 215 days in 2024, as the growth in trade and bill receivables outpaced
the increase in revenue, which was primarily attributable to (i) our decision to offer more
favorable credit terms to key account customers as part of our strategy to enhance market
penetration; and (ii) the prolonged payment cycles of certain customers, particularly those in
the photovoltaic industry. Our trade and bill receivables turnover days decreased to 180 days
in the first nine months of 2025, primarily attributable to our enhanced measures in payment
collection and proactive approach in shortening payment cycles of certain customers.
As of December 31, 2025, approximately RMB818.0 million, or 38.9% of our trade
receivables as of September 30, 2025, had been settled. The delayed settlement of trade
receivables is primarily due to (i) the granting of extended credit terms to certain key
customers, (ii) lengthy payment processes of some customers, (iii) customers’ tendency to
FINANCIAL INFORMATION
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arrange payments at the end of each quarter. We have established a dedicated department to
continuously monitor and track the collection of trade receivables. For customers with overdue
payments, we promptly analyze the reasons for the delay and takes appropriate measures to
facilitate collection.
Financial Assets Measured at FVPL
Our non-current financial assets measured at FVPL comprise investments that are not held
for trading, including investments in unlisted equity securities and unlisted units in investment
funds. The carrying amount of our non-current financial assets measured at FVPL increased
from RMB262.2 million as of December 31, 2022, to RMB291.6 million as of December 31,
2023, primarily due to an increase in the fair value of our fund investments and unlisted equity
securities. However, our non-current financial assets measured at FVPL decreased to
RMB213.7 million as of December 31, 2024, primarily driven by (i) the recovery of our
investments in an industrial fund; and (ii) a decline in the fair value of our fund investments
and unlisted equity securities. The carrying amount of our non-current financial assets
measured at FVPL remained relatively stable at RMB221.2 million as of September 30, 2025.
Our current financial assets measured at FVPL primarily consist of investments in wealth
management products, with a small portion representing the current portion of our fund
investments.
As part of our cash management policy, we purchase wealth management products to
better utilize our idle cash without interfering with our business operations or capital
expenditures. During the Track Record Period, we purchased structured deposits issued by
reputable commercial banks in the PRC, with a floating return being paid together with the
principal on the maturity date, which were recognized as financial assets measured at FVPL.
To monitor and control the investment risks associated with our investment in wealth
management products, we have adopted a comprehensive set of internal policies and
guidelines. All investment proposals for the purchase of wealth management products must be
submitted for approval by our financial director. We base our investment decisions on our
financial position and risk appetite, taking into account factors such as investment duration,
expected returns, and risk assessment. Our wealth management investments are primarily
concentrated in low- to medium-risk financial products provided by reputable banks and
securities institutions. We strictly avoid investments in stocks, stock derivatives, or unsecured
bonds. Following our Listing, any investments in financial assets measured at FVPL,
particularly our purchases of wealth management products, will need to comply with the
requirements of Chapter 14 of the Listing Rules. Depending on the applicable percentage ratios
(as defined under the Listing Rules) associated with these investments, such transactions may
trigger obligations for reporting, announcements, issuance of circulars to shareholders, or may
even require shareholders’ approval.
FINANCIAL INFORMATION
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The carrying amount of our current financial assets measured at FVPL decreased from
RMB578.1 million as of December 31, 2022, to RMB435.8 million as of December 31, 2023,
then to RMB388.9 million as of December 31, 2024, and further to RMB170.1 million as of
September 30, 2025, primarily because we gradually reduced our investments in wealth
management products to prioritize liquidity and meet our working capital needs.
Cash and Cash Equivalents
Our cash and cash equivalents primarily consist of our current bank deposits which are
not subject to any restrictions. Our cash and cash equivalents amounted to RMB668.3 million,
RMB1,196.3 million, RMB1,181.1 million and RMB1,122.0 million as of December 31, 2022,
2023 and 2024 and September 30, 2025, respectively.
Trade and Other Payables
Our trade and other payables primarily include (i) trade payables, representing balances
due to our suppliers; (ii) bills payable, representing debt instruments issued by us to suppliers;
(iii) accrued payrolls; (iv) payables for property, plant and equipment; (v) other tax payables
such as V A T and property tax; and (vi) other payables and accruals, mainly representing unpaid
expense reimbursements, short-term advances, deposits and guarantees. During the Track
Record Period, our suppliers generally granted us credit periods ranging from three to six
months upon receipt of the V A T invoices.
The following table sets forth a breakdown of our trade and other payables as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118819,913 1,132,316 1,439,547 1,622,787
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118460,208 690,988 648,994 524,156
Accrued payrolls /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100,598 108,677 79,987 94,606
Payables for property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,522 162,861 119,108 113,653
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,922 44,919 36,439 48,791
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,428 159,660 231,482 254,433
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,582,591 2,299,421 2,555,557 2,658,426
Our trade and other payables increased from RMB1,582.6 million as of December 31,
2022, to RMB2,299.4 million as of December 31, 2023. Specifically, during this period: (i)
trade payables increased from RMB819.9 million to RMB1,132.3 million, primarily due to
FINANCIAL INFORMATION
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increased credit-based purchases, enabled by our enhanced bargaining power stemming from
economies of scale, (ii) bills payable rose from RMB460.2 million to RMB691.0 million,
mainly due to higher procurement volumes, (iii) other tax payables decreased from RMB67.9
million to RMB44.9 million, and (iv) other payables and accruals grew from RMB115.4
million to RMB159.7 million, driven by a rise in commercial acceptance bills that had been
endorsed and transferred but had not yet matured during the reporting period.
Our trade and other payables further increased from RMB2,299.4 million as of December
31, 2023, to RMB2,555.6 million as of December 31, 2024. Specifically, during this period: (i)
trade payables rose from RMB1,132.3 million to RMB1,439.5 million, primarily because we
successfully secured more favorable payment terms with certain suppliers by leveraging our
economies of scale, (ii) bills payable decreased from RMB691.0 million to RMB649.0 million,
reflecting the maturity and settlement of bills payable; (iii) other tax payables declined from
RMB44.9 million to RMB36.4 million, as starting from early 2024, we benefited from an
additional tax deduction policy, which allowed for retrospective application to input V A T from
2023; and (iv) other payables and accruals increased from RMB159.7 million to RMB231.5
million, driven by a rise in commercial acceptance bills that had been endorsed and transferred
but had not yet matured during the reporting period.
Our trade and other payables further increased from RMB2,555.6 million as of
December 31, 2024 to RMB2,658.4 million as of September 30, 2025. Specifically, during this
period: (i) trade payables increased from RMB1,439.5 million to RMB1,622.8 million,
primarily due to increased credit-based purchases, enabled by our enhanced bargaining power
stemming from economies of scale, and (ii) other payables and accruals increased from
RMB231.5 million to RMB254.4 million, mainly due to amounts received by us in connection
with our restricted share award scheme, which were subject to repurchase obligations.
The following table sets forth an aging analysis of our trade and bill payables, based on
the invoice date, as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,240,833 1,780,738 2,016,275 2,105,858
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,158 24,156 58,975 34,296
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,308 10,347 4,385 4,860
More than three years /H1118/H1118/H1118/H1118/H11189,822 8,063 8,906 1,929
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,280,121 1,823,304 2,088,541 2,146,943
FINANCIAL INFORMATION
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The following table sets forth the number of our trade and bill payables turnover days for
the periods indicated:
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
Trade and bill payables
turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136 177 248 212
Note:
(1) Calculated as the average of the opening and closing balances of trade and bill payables for the period
divided by the cost of sales for the relevant period, multiplied by 365 days for the years ended December
31, 2022, 2023 and 2024, or 273 days for the nine months ended September 30, 2025.
Our trade and bill payables turnover days increased from 136 days in 2022 to 177 days
in 2023, and further to 248 days in 2024, primarily driven by a rise in credit-based purchases
and our ability to secure more favorable payment terms from suppliers, facilitated by our
strengthened bargaining power resulting from economies of scale. Our trade and bill payables
turnover days decreased to 212 days in the first nine months of 2025, mainly due to our
proactive approach in accelerating the payment process with our suppliers to ensure our
procurement can timely support our manufacturing process and to support the sustainable
development of our supply chain.
As of December 31, 2025, approximately RMB744.0 million, or 45.8% of our trade
payables as of September 30, 2025, had been settled.
Contract Liabilities
Our contract liabilities primarily represent prepayments received from certain customers
for the sale of products.
The balance of our contract liabilities increased from RMB249.1 million as of December
31, 2022, to RMB297.5 million as of December 31, 2023, then to RMB505.0 million as of
December 31, 2024, and further to RMB520.4 million in the first nine months of 2025,
primarily because of increased prepayments from customers.
As of December 31, 2025, RMB109.9 million, or 21.1% of our contract liabilities as of
September 30, 2025, had been subsequently recognized as revenue.
FINANCIAL INFORMATION
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NET CURRENT ASSETS/(LIABILITIES)
The following table sets forth our current assets, current liabilities and net current
assets/(liabilities) as of the dates indicated:
As of December 31,
As of
September 30,
As of
December 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current Assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,130,490 1,340,221 1,721,045 1,446,241 1,451,353
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118121,414 203,712 168,646 229,697 211,417
Trade and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,920,889 2,454,865 2,557,475 2,812,345 2,769,405
Income tax recoverable /H1118 14,532 30,724 30,740 22,947 14,333
Financial assets
measured at FVPL /H1118/H1118/H1118578,115 435,820 388,913 170,136 82,223
Restricted bank
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,972 31,142 15,832 51,291 22,211
Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118668,322 1,196,253 1,181,104 1,121,966 872,596
Total current assets /H1118/H1118/H11184,483,734 5,692,737 6,063,755 5,854,623 5,423,538
Current Liabilities
Trade and other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,582,591 2,299,421 2,555,557 2,658,426 2,603,666
Contract liabilities /H1118/H1118/H1118/H1118249,105 297,507 505,014 520,383 582,126
Bank loans and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,453,271 2,404,602 2,929,370 2,811,806 2,044,440
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H111813,517 12,522 20,120 17,864 17,129
Income tax payable /H1118/H1118/H111819,373 10,541 2,271 16,836 9,804
Total current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,317,857 5,024,593 6,012,332 6,025,315 5,257,165
Net Current
Assets/(Liabilities) /H1118/H11181,165,877 668,144 51,423 (170,692) 166,373
We recorded net current assets of RMB166.4 million as of December 31, 2025, as
compared to net current liabilities of RMB170.7 million as of September 30, 2025, primarily
due to (i) a decrease in bank loans and borrowings of RMB767.4 million, and (ii) a decrease
in trade and other payables of RMB54.8 million, partially offset by a decrease in cash and cash
equivalents of RMB249.4 million.
FINANCIAL INFORMATION
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We recorded net current liabilities of RMB170.7 million as of September 30, 2025, as
compared to net current assets of RMB51.4 million as of December 31, 2024, primarily due to
(i) a decrease in inventories of RMB274.8 million mainly due to deceases in finished goods and
goods delivered to customers; (ii) a decrease in financial assets measured at FVPL of
RMB218.8 million due to redemption of wealth management products to repay our bank loans
and the disposal of our equity interest in Y angzhou Shuguang; and (iii) an increase in trade and
other payables of RMB102.9 million mainly resulting from longer credit terms granted to us
by our suppliers, which were partially offset by (i) an increase in trade and other receivables
of RMB254.9 million, primarily driven by higher trade volumes with certain automotive
customers who had relatively long payment cycles, and (ii) a decrease in bank loans and other
borrowings of RMB117.6 million.
Our net current assets decreased from RMB668.1 million as of December 31, 2023, to
RMB51.4 million as of December 31, 2024, primarily as a result of our loss for the year of
RMB817.7 million in 2024, which led to increased reliance on external financing and working
capital support. Specifically, such decrease was mainly driven by (i) an increase in bank loans
and other borrowings of RMB524.8 million to support our working capital needs; (ii) an
increase in trade and other payables of RMB256.1 million, primarily because we successfully
secured more favorable payment terms with certain suppliers by leveraging our economies of
scale; and (iii) an increase in contract liabilities of RMB207.5 million, because of increased
prepayments from customers, partially offset by an increase in inventories of RMB380.8
million.
Our net current assets decreased from RMB1,165.9 million as of December 31, 2022, to
RMB668.1 million as of December 31, 2023, primarily due to (i) an increase in bank loans and
other borrowings of RMB951.3 million to finance our acquisition of remaining equity interests
in certain subsidiaries and our investment in construction projects to enhance our
manufacturing capabilities; (ii) an increase in trade and other payables of RMB716.8 million,
primarily due to increased credit-based purchases, enabled by our enhanced bargaining power
stemming from economies of scale; and (iii) a decrease in financial assets measured at FVPL
of RMB142.3 million, primarily because we gradually reduced our investments in wealth
management products to prioritize liquidity and meet our working capital needs, partially
offset by (i) an increase in trade and other receivables of RMB534.0 million, primarily due to
our growing sales; and (ii) an increase in cash and cash equivalents of RMB527.9 million.
LIQUIDITY AND CAPITAL RESOURCES
During the Track Record Period, we financed our capital expenditure and working capital
requirements mainly through cash generated from operating activities and bank and other
borrowings. As of December 31, 2022, 2023 and 2024 and September 30, 2025, we had cash
and cash equivalents of RMB668.3 million, RMB1,196.3 million, RMB1,181.1 million and
RMB1,122.0 million, respectively.
FINANCIAL INFORMATION
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Cash Flows
The following table sets forth our cash flows for the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Net cash generated
from/(used in) operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,482 714 (104,035) (531,056) 300,061
Net cash (used in)/generated
from investing activities /H1118/H1118/H1118(262,041) (678,175) (192,494) (230,765) 23,967
Net cash generated
from/(used in) financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118253,870 1,200,946 288,729 610,868 (399,429)
Net increase/(decrease)
in cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,311 523,485 (7,800) (150,953) (75,401)
Cash and cash equivalents
at the beginning of the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118652,937 668,322 1,196,253 1,196,253 1,181,104
Effect for foreign exchange
rate changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,074 4,446 (7,349) 191 16,263
Cash and cash equivalents
at the end of the period /H1118/H1118668,322 1,196,253 1,181,104 1,045,491 1,121,966
Net Cash Generated from/(Used in) Operating Activities
We recorded net cash used in operating activities in 2024 and the first nine months of
2025. For details, see “Business — Deteriorating Financial Performance — Our Financial
Performance in 2024.” To improve our net operating cash outflows position, we have
implemented the following measures: (i) enhancing payment collection and proactively
shortening the payment cycles of certain customers to reduce trade and bill turnover days; (ii)
strengthening our make-to-order production model and improving the management of finished
goods inventory to reduce inventory turnover days; and (iii) implementing initiatives to
increase gross profit and control operational expenses, as detailed in “Business —
Deteriorating Financial Performance — Measures for Managing Cost and Improving
Operational Efficiency.”
FINANCIAL INFORMATION
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Net cash generated from operating activities in the first nine months of 2025 was
RMB300.1 million, primarily consisting of a profit before taxation of RMB59.8 million,
adjusted for certain non-cash and non-operating items. These adjustments primarily included:
(i) financial costs of RMB119.5 million; (ii) depreciation of property, plant and equipment of
RMB77.4 million; and (iii) amortisation of intangible assets of RMB46.8 million. The amount
was further adjusted by changes in working capital, which primarily included: (i) a decrease
in inventories of RMB248.2 million; and (ii) an increase in trade and other payables of
RMB61.3 million, partially offset by an increase in trade and other receivables of RMB277.8
million.
Net cash used in operating activities in 2024 amounted to RMB104.0 million, primarily
comprising a loss before taxation of RMB775.5 million, adjusted for certain non-cash and
non-operating items. These adjustments primarily included (i) impairment losses on intangible
assets and goodwill of RMB360.5 million; (ii) finance costs of RMB154.2 million; and (iii)
depreciation of property, plant and equipment of RMB93.5 million. The amount was further
adjusted by changes in working capital, which primarily included: (i) an increase in trade and
other payables of RMB200.1 million; and (ii) an increase in contract liabilities of RMB197.7
million, partially offset by (i) an increase in inventories of RMB395.2 million; and (ii) an
increase in trade and other receivables of RMB173.3 million.
Net cash generated from operating activities in 2023 was RMB714 thousand, primarily
consisting of profit before taxation of RMB167.5 million, adjusted for certain non-cash and
non-operating items. These adjustments primarily included: (i) finance costs of RMB130.5
million; (ii) depreciation of property, plant and equipment of RMB71.4 million; and (iii)
amortization of intangible assets of RMB43.7 million. The amount was further adjusted by
changes in working capital, which primarily included: (i) an increase in trade and other
receivables of RMB654.2 million; and (ii) an increase in inventories of RMB235.4 million,
partially offset by an increase in trade and other payables of RMB533.4 million.
Net cash generated from operating activities in 2022 totaled RMB17.5 million, primarily
consisting of profit before taxation of RMB263.6 million, adjusted for certain non-cash and
non-operating items. These adjustments primarily included: (i) finance costs of RMB94.0
million; (ii) depreciation of property, plant and equipment of RMB62.7 million; and (iii)
realised and unrealised gains on other financial assets measured at FVPL of RMB52.8 million.
The amount was further adjusted by changes in working capital, which primarily included: (i)
an increase in trade and other receivables of RMB786.9 million; and (ii) an increase in
inventories of RMB376.5 million, partially offset by an increase in trade and other payables of
RMB747.2 million.
Net Cash (Used in)/Generated from Investing Activities
Our net cash generated from investing activities in the first nine months of 2025 was
RMB24.0 million, primarily attributable to (i) proceeds from redemption of wealth
management products of RMB1,857.8 million; (ii) net proceeds from disposal of interests in
FINANCIAL INFORMATION
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subsidiaries of RMB25.1 million; and (iii) deposits of disposal of interests in associates
received of RMB23.2 million, partially offset by payment for purchase of wealth management
products of RMB1,699.0 million.
Our net cash used in investing activities in 2024 was RMB192.5 million, primarily
attributable to (i) payments for the purchase of wealth management products amounting to
RMB1,773.2 million; and (ii) payments for purchase of property, plant and equipment,
intangible assets, and right-of-use assets of RMB281.9 million, partially offset by proceeds
from the redemption of wealth management products of RMB1,803.7 million.
Our net cash used in investing activities in 2023 amounted to RMB678.2 million,
primarily due to (i) payments for the purchase of wealth management products of RMB1,300.1
million; (ii) payments for the acquisition of non-controlling interest of RMB401.2 million; and
(iii) payments for purchase of property, plant and equipment, intangible assets and right-of-use
assets of RMB300.4 million, partially offset by proceeds from the redemption of wealth
management products of RMB1,436.9 million.
Our net cash used in investing activities in 2022 was RMB262.0 million, primarily driven
by (i) payments for the purchase of wealth management products of RMB718.3 million; and
(ii) payments for the acquisition of property, plant and equipment, intangible assets, and
right-of-use assets of RMB189.1 million, partially offset by proceeds from the redemption of
wealth management products of RMB737.2 million.
Net Cash Generated from/(Used in) Financing Activities
Our net cash used in financing activities in the first nine months of 2025 was RMB399.4
million, primarily attributable to repayment of bank loans of RMB2,467.4 million, partially
offset by proceeds from bank loans of RMB2,154.5 million.
Net cash generated from financing activities in 2024 was RMB288.7 million, primarily
comprising proceeds from bank loans of RMB3,515.5 million, partially offset by repayments
of bank loans amounting to RMB3,046.3 million.
Net cash generated from financing activities in 2023 totaled RMB1,200.9 million,
primarily consisting of proceeds from bank loans of RMB4,310.3 million, partially offset by
repayments of bank loans of RMB3,212.8 million.
Net cash generated from financing activities in 2022 amounted to RMB253.9 million,
primarily attributable to proceeds from bank loans of RMB1,956.0 million, partially offset by
repayments of bank loans of RMB1,444.6 million.
FINANCIAL INFORMATION
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WORKING CAPITAL SUFFICIENCY
During the Track Record Period, we met our working capital requirements mainly from
cash generated from operations and bank borrowings. As of December 31, 2025, we had
unutilized committed credit facilities of RMB2,981.6 million.
Taking into account the financial resources available to us, including our cash balances
and existing credit facilities, net cash inflow from operating activities, the estimated net
proceeds from the Global Offering, our Directors are of the view that we have sufficient
working capital to meet our present requirements and requirements for the next 12 months from
the date of this prospectus.
INDEBTEDNESS AND CONTINGENT LIABILITIES
Indebtedness
During the Track Record Period, our indebtedness primarily consisted of (i) bank loans
and other borrowings and (ii) lease liabilities.
The following table sets forth a breakdown of our indebtedness as of the dates indicated:
As of December 31,
As of
September 30,
As of
December 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current
Bank loans and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,453,271 2,404,602 2,929,370 2,811,806 2,044,440
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H111813,517 12,522 20,120 17,864 17,129
1,466,788 2,417,124 2,949,490 2,829,670 2,061,569
Non-current
Bank loans and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,430,092 1,809,984 1,792,601 1,624,891 1,680,011
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H111854,772 43,005 67,300 64,265 72,457
1,484,864 1,852,989 1,859,901 1,689,156 1,752,468
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,951,652 4,270,113 4,809,391 4,518,826 3,814,037
FINANCIAL INFORMATION
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Bank Loans and Other Borrowings
The following table sets forth a breakdown of our bank loans and other borrowings as of
the dates indicated:
As of December 31,
As of
September 30,
As of
December 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current
Short-term bank loans /H1118/H1118814,276 1,514,007 1,838,959 1,307,000 946,073
Current portion of long-
term bank loans /H1118/H1118/H1118/H1118517,883 879,483 1,090,411 1,504,806 1,098,367
Loans from the
controlling
shareholder
(1) /H1118/H1118/H1118/H1118/H1118/H1118121,112 11,112 – – –
1,453,271 2,404,602 2,929,370 2,811,806 2,044,440
Non-current
Non-current portion of
long-term bank loans /H1118 1,430,092 1,429,984 1,353,442 1,167,057 1,215,952
Redemption
liabilities (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 380,000 439,159 457,834 464,059
1,430,092 1,809,984 1,792,601 1,624,891 1,680,011
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,883,363 4,214,586 4,721,971 4,436,697 3,724,451
Notes:
(1) On April 24, 2020, we entered into a loan framework agreement with Nanjing Primest, one of our
Controlling Shareholders. Under the terms of the agreement, we were granted a revolving loan facility
of up to RMB270 million from Nanjing Primest and its ultimate beneficial owner, Mr. WU. The loan
carried an annualized interest rate of 2.175% and was valid for a three-year period. We fully repaid the
loan in 2023, prior to the agreement’s maturity.
(2) On December 28, 2023 and April 19, 2024, Estun Intelligent entered into two share purchase agreements
with external investors and our Company, among others, pursuant to which Estun Intelligent issued
shares with redemption rights, liquidity preferences and anti-dilution rights to the external investors for
a total cash consideration of RMB380.0 million and RMB35.0 million respectively.
Under the share purchase agreements, the external investors have the option to exit their investment by
September 30, 2027, which can be achieved either through a qualified IPO of Estun Intelligent or by
requiring our Company to conduct a private placement of new shares to purchase their equity interests
in Estun Intelligent (referred to as the “Asset Securitization”). The choice of exit method rests with the
external investors. Furthermore, they may exercise their put option to require our Company to
repurchase all or part of their equity interests in Estun Intelligent under any of the following
circumstances: (i) Estun Intelligent fails to complete the Asset Securitization by September 30, 2027;
(ii) Estun Intelligent, our Company, or Mr. Wu Bo breaches any terms, commitments, representations,
or warranties under the share purchase agreements, and such breaches are deemed by the external
FINANCIAL INFORMATION
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investors to have material adverse effect on Estun Intelligent; (iii) without the prior consent of the
external investors, substantial deviations occur in Estun Intelligent’s business operations, such as
changes to its core business; (iv) the ultimate controlling party of Estun Intelligent or our Company
changes; or (v) other events arise that pose a serious risk to the safety of the external investors’
investment.
If any of the above circumstances arise, our Company shall redeem the issued shares at a price equal
to the greater of: (i) the original consideration plus simple interest at 6% per annum; or (ii) the fair value
of the relevant equity interests in Estun Intelligent. In accordance with our accounting policies, the
issued shares were initially recognized at fair value and are subsequently measured at amortized cost,
accruing interest at 6% per annum.
As of December 31, 2022, 2023 and 2024, September 30, 2025 and December 31, 2025,
we had borrowings of RMB2,883.4 million, RMB4,214.6 million, RMB4,722.0 million,
RMB4,436.7 million and RMB3,724.5 million, respectively, primarily comprising secured and
unsecured bank loans obtained mainly to supplement our working capital. The majority of our
borrowings are denominated in Renminbi. To a lesser extent, we also have borrowings
denominated in Euro. The effective interest rates on our bank loans ranged from 0.0% to 6.43%
during the Track Record Period. Certain bank loans during this period were linked to LIBOR,
and fluctuations in LIBOR caused the interest rates on these loans to decrease to zero.
During the Track Record Period, one of our Controlling Shareholders, Nanjing Primest,
provided guarantees for certain of our bank facilities. As of December 31, 2022, 2023 and 2024
and September 30, 2025, the outstanding balances of bank borrowings secured by guarantees
from Nanjing Primest amounted to RMB654.4 million, RMB388.1 million, RMB354.7 million
and RMB208.4 million, respectively. On October 27, 2025, we had repaid the outstanding
balances of above bank loans, and the guarantees provided by Nanjing Primest were released
accordingly. As of the Latest Practicable Date, there was no loan, advance or guarantee
provided by our Controlling Shareholders or their close associates.
Except for our indebtedness as disclosed in this prospectus, we did not have any material
mortgages, charges, debentures, loan capital, debt securities, loans, bank loans or other similar
indebtedness, finance lease or hire purchase commitments, liabilities under acceptances (other
than normal trade bills), or acceptance credits, which were either guaranteed or unguaranteed,
secured or unsecured during the Track Record Period and up to the Latest Practicable Date. Our
Directors confirm that, as of December 31, 2025, the agreements governing our borrowings did
not include any covenants that would have a material adverse effect on our ability to secure
additional borrowings or issue debt or equity securities in the future. Furthermore, our
Directors confirm that we did not experience any material defaults in respect of trade and other
payables, bank or other borrowings, nor did we breach any covenants, including covenants
regarding our financial ratios, during the Track Record Period and up to the Latest Practicable
Date.
Additionally, our Directors confirm that, during the Track Record Period and up to the
Latest Practicable Date, we encountered no difficulties in obtaining credit facilities, nor did we
experience any withdrawal of facilities or requests for early repayment. As of December 31,
FINANCIAL INFORMATION
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2025, being the most recent practicable date for determining our indebtedness, we had
unutilized bank facilities amounting to RMB2,981.6 million. Our Directors further confirm that
there has been no material change in our indebtedness since December 31, 2025 and up to the
date of this prospectus.
Lease Liabilities
As of December 31, 2022, 2023 and 2024, September 30, 2025 and December 31, 2025,
our total lease liabilities (comprising both current and non-current portions) amounted to
RMB68.3 million, RMB55.5 million, RMB87.4 million, RMB82.1 million and RMB89.6
million, respectively.
Our lease liabilities decreased from RMB68.3 million as of December 31, 2022, to
RMB55.5 million as of December 31, 2023, primarily because we transitioned a portion of our
production operations from leased properties in Shanghai to our self-owned manufacturing
premises in Nanjing. Subsequently, our lease liabilities increased to RMB87.4 million as of
December 31, 2024, primarily attributable to an expansion in lease arrangements for our
overseas subsidiaries. Our lease liabilities remained relatively stable at RMB82.1 million as of
September 30, 2025 and RMB89.6 million as of December 31, 2025.
Contingent Liabilities
We did not have any material contingent liabilities as of December 31, 2022, 2023 and
2024, September 30, 2025 and December 31, 2025, respectively.
OFF-BALANCE SHEET ARRANGEMENTS
During the Track Record Period and up to the Latest Practicable Date, we did not have
any material off-balance sheet commitments or arrangements.
CAPITAL EXPENDITURES AND COMMITMENTS
Capital Expenditures
Our capital expenditures during the Track Record Period primarily consisted of
expenditures related to the purchase of property, plant and equipment, right-of-use assets, and
intangible assets. The payment for the purchase of property, plant and equipment, right-of-use
assets, and intangible assets amounted to RMB189.1 million, RMB300.4 million, RMB281.9
million, RMB216.9 million and RMB171.6 million for the years ended December 31, 2022,
2023 and 2024 and the nine months ended September 30, 2024 and 2025, respectively.
We plan to continue making capital expenditures to support the anticipated growth of our
business and the implementation of our expansion plan. For further details, see “Future Plans
and Use of Proceeds — Use of Proceeds.” We intend to finance our future capital expenditures
through financial resources available to us, including cash generated from our business
operations, the net proceeds from the global offering, and available bank and other borrowings.
FINANCIAL INFORMATION
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Capital Commitments
Our capital commitments mainly represent purchases of property, plant and equipment,
intangible assets and other long-term assets for which we have contracted for but have not yet
paid. Our capital commitments decreased from RMB578.5 million as of December 31, 2022 to
RMB299.0 million as of December 31, 2023, then to RMB208.8 million as of December 31,
2024, and further to RMB96.1 million as of September 30, 2025, primarily due to the
completion of our major construction projects.
MATERIAL RELATED PARTY TRANSACTIONS
During the Track Record Period, we engaged in certain related party transactions from
time to time. These transactions primarily comprised our purchases of raw materials and sales
of industrial robots and core automation components, as well as the provision of services. Our
Directors believe that our transactions with related parties during the Track Record Period were
conducted in the ordinary and usual course of business and on an arm’s length basis, and they
did not distinct our results of operations or make our historical results not reflective of our
future performance.
Additionally, one of our Controlling Shareholders, Nanjing Primest, provided guarantees
for certain of our bank facilities during the Track Record Period. We also obtained a loan from
Nanjing Primest, which was fully repaid in 2023. Furthermore, we had other borrowings
arising from obligations to repurchase shares from certain external shareholders of one of our
subsidiaries.
See “— Indebtedness and Contingent Liabilities — Bank Loans and Other Borrowings”
and Note 24 to the Accountants’ Report in Appendix I to this prospectus for more details.
KEY FINANCIAL RATIOS
The following table sets forth certain of our key financial ratios as of the dates or for the
periods indicated:
Y ear ended/As of December 31,
Nine months ended/
As of September 30,
2022 2023 2024 2024 2025
Gross profit margin (1) /H1118/H1118/H1118/H111832.9% 31.3% 28.3% 29.9% 28.2%
Current ratio (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.35 1.13 1.01 N/A 0.97
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.01 0.87 0.72 N/A 0.73
Debt-to-equity ratio (4) /H1118/H1118/H1118/H11180.96 1.51 2.54 N/A 2.28
Cash conversion cycle (5) /H1118/H1118 137 124 161 N/A 126
FINANCIAL INFORMATION
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Notes:
(1) Gross profit margin equals gross profit divided by total revenue for the period.
(2) Current ratio is calculated based on total current assets divided by total current liabilities as of the dates
indicated.
(3) Quick ratio is calculated based on total current assets less inventories divided by total current liabilities
as of the dates indicated.
(4) Debt-to-equity ratio is calculated as indebtedness divided by total equity as of the same date.
Indebtedness represents bank loans and other borrowings, as well as lease liabilities. The increases in
our debt-to-equity ratio throughout the Track Record Period were primarily due to additional borrowings
raised to fund our capital expenditures and acquisitions of non-controlling interests in certain
subsidiaries.
(5) Cash conversion cycle is calculated using the inventory turnover days in each period plus the trade and
bill receivables turnover days in the respective period minus the trade and bill payables turnover days
in the respective period.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to a variety of market risks, including credit risk, liquidity risk, interest
rate risk and currency risk in the normal course of our business. We manage and monitor these
exposures to ensure appropriate measures are implemented in a timely and effective manner.
For details of the risks to which we are exposed, see Note 32 to the Accountants’ Report set
out in Appendix I to this prospectus.
DIVIDENDS AND DIVIDEND POLICY
During the Track Record Period, dividends paid to equity shareholders of our Company
were RMB25.8 million, RMB26.0 million, RMB52.0 million and nil in 2022, 2023, 2024 and
the first nine months of 2025, respectively, representing dividend payout ratios, calculated
based on dividends paid to equity shareholders of our Company in 2023, 2024 and the first nine
months of 2025 divided by profit or loss for the year/period attributable to equity shareholders
of our Company for 2022, 2023 and 2024 in a given period and multiplied by 100%, of 15.6%,
38.3% and nil, respectively. On April 29, 2023, our Board of Directors approved our
“Shareholder Return Plan for the Next Three Y ears (2023-2025)” (the “ Shareholder Return
Plan ”). According to our Shareholder Return Plan, and subject to relevant PRC laws and
applicable regulations, and our Articles of Association, after making up for any losses (if any),
allocating statutory reserve funds, and allocating discretionary reserve funds (if necessary),
from the year of 2023 to 2025, except for special circumstances, we target to distribute cash
dividends to our Shareholders no less than 20% of our distributable profit for the year if our
Company is profitable for the year and has a positive cumulative undistributed profit. The
aforementioned special circumstances include: (i) the issuance of accountants’ report with a
qualified opinion by the Company’s reporting accountants, or (ii) the occurrence of significant
investments or capital expenditure events, representing any investments or asset acquisitions
with cumulative expenditures reaching or exceeding RMB50.0 million or 30% of our net assets
based on the audited financial statements from the latest financial year. We cannot assure you
FINANCIAL INFORMATION
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that we will be able to distribute dividends of the above amount or any amount, or at all, in any
year. The declaration and payment of dividends may also be limited by legal restrictions and
by loan or other agreements that we have entered into or may enter into in the future. See “Risk
Factors — Risks Relating to the Global Offering — 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.”
According to applicable PRC laws and regulations, including the PRC Company Law
() and the No. 3 Guideline for the Supervision of Listed Companies
— Cash Dividend Distribution of Listed Companies (2025 Revision) (ˏୋ
3໮—ߎ2025)), our Articles of Association and our dividend policy,
subject to the fulfillment of the conditions for cash dividends, the annual cash dividends of our
Company shall account for no less than 20% of the profits realized by our Company in that year
(calculated in accordance with PRC GAAP) which are available for distribution and
attributable to the shareholders. Future profit distributions may be carried out in the form of
cash dividends or stock dividends, or a combination of cash dividends and stock dividends.
Any proposed distribution of dividends is subject to the discretion of our Board and the
approval at our Shareholders’ meetings. Our Board may recommend a distribution of dividends
in the future after taking into account our results of operations, financial condition, operating
requirements, capital requirements, shareholders’ interests and any other conditions that our
Board may deem relevant. According to PRC Company Law and our dividend policy, where the
accumulative amount of the company’s statutory reserve is not sufficient to cover losses from
the previous year, the current year’s profits shall first be used to make up for the losses before
the statutory reserve is accrued according as legally required; after a company has made up its
losses, the residual after-tax profits and accrued reserve shall be distributed by the company (in
the case of a joint stock limited company) in proportion to the shares held by its shareholders,
except as otherwise provided for in the company’s articles of association. Therefore, our PRC
Legal Advisors are of the view that we can pay dividend despite accumulated losses except
when the accumulative amount of our statutory reserve is not sufficient to cover accumulated
losses, in which case the current year’s profits shall first be used to make up for the losses.
DISTRIBUTABLE RESERVE
As of September 30, 2025, we did not have any distributable reserves.
LISTING EXPENSES
Assuming that the Over-allotment Option is not exercised and an Offer Price of HK$16.18
per Offer Share (being the mid-point of the indicative Price Range stated in this prospectus),
the aggregate commissions and fees, together with the Stock Exchange listing fee, AFRC
transaction levy, SFC transaction levy and Stock Exchange trading fee, legal and other
professional fees, printing and other expenses relating to the Listing and the Global Offering,
which are payable by us, are estimated to amount in aggregate to approximately HK$79.9
million (assuming the Over-allotment Option is not exercised), accounting for 5.1% of the
gross proceeds from the Global Offering.
FINANCIAL INFORMATION
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During the Track Record Period, we incurred listing expenses of RMB17.5 million
(equivalent to HK$19.7 million), of which RMB1.1 million (equivalent to HK$1.2 million) was
recognized as administrative expenses in the consolidated statements of profit or loss and
RMB16.4 million (equivalent to HK$18.5 million) was directly attributable to the issuance of
Offer Shares which is expected to be charged against equity upon the Listing. We expect to
incur additional listing expenses of approximately RMB53.4 million (equivalent to HK$60.1
million), of which RMB1.9 million (equivalent to HK$2.1 million) is expected to be expensed
through the statement of profit or loss and approximately RMB51.5 million (equivalent to
HK$58.0 million) is expected to be recognized directly as a deduction from equity upon the
Listing. By nature, our listing expenses are composed of (i) underwriting-related expenses of
approximately HK$41.1 million, and (ii) non-underwriting-related expenses of approximately
HK$38.8 million, which consist of fees and expenses of legal advisors and Reporting
Accountants of approximately HK$29.8 million, and other fees and expenses of approximately
HK$9.0 million.
UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted net tangible assets prepared in
accordance with Rule 4.29 of the Listing Rules is set out to show the effect of the Global
Offering on our net tangible assets as of September 30, 2025, as if the Global Offering had
taken place on that date. The unaudited pro forma statement of adjusted net tangible assets has
been prepared for illustrative purposes only and, because of its hypothetical nature, it may not
give a true picture of our net tangible assets had the Global Offering been completed as of
September 30, 2025 or at any future date. The unaudited pro forma statement of adjusted net
tangible assets is based on the unaudited consolidated total net tangible assets of our Group
attributable to the owners of the Company as of September 30, 2025 derived from the
Accountants’ Report set out in Appendix I to this prospectus, and adjusted as follows:
Consolidated
net tangible
assets
attributable
to equity
shareholders
of the
Company
as of
September 30,
2025 (1)
Estimated net
proceeds from
the Global
Offering (2)(4)
Unaudited
pro forma
adjusted net
tangible assets
attributable
to the equity
shareholders
of our
Company (3)
Unaudited pro forma adjusted
net tangible assets
attributable to the equity
shareholders of our Company
per Share
RMB’000 RMB’000 RMB’000 RMB (3) HK$(4)
Based on an
Offer Price of
HK$15.36 per
Offer Share /H1118/H1118 340,252 1,251,747 1,591,999 1.65 1.86
Based on an
Offer Price of
HK$17.00 per
Offer Share /H1118/H1118 340,252 1,389,275 1,729,527 1.79 2.02
FINANCIAL INFORMATION
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Notes:
(1) The consolidated net tangible assets attributable to equity shareholders of our Company as of
September 30, 2025 is arriving after (i) deducting goodwill of RMB1,044,588,000 and intangible assets
of RMB560,509,000; and (ii) adjusting the share of intangible assets attributable to non-controlling
interests of RMB4,557,000, from the consolidated total equity attributable to equity shareholders of our
Company of RMB1,940,792,000 as of September 30, 2025, which is extracted from the Accountants’
Report as set out in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offering are based on the expected issuance of 96,780,000
Offer Shares and the indicative Offer Prices of HK$15.36 and HK$17.00 per Offer Share, respectively,
being the lower end price and higher end price of the stated Offer Price range, after deduction of the
estimated underwriting fees and other related expenses payable by our Group, (excluding the listing
expenses charged to profit or loss during the Track Record Period of RMB1,128,000) and does not take
into account of any shares which may be issued upon the exercise of the Over-allotment Option and any
shares to be issued pursuant to the share option scheme and share reward scheme.
(3) The unaudited pro forma adjusted consolidated net tangible assets attributable to equity shareholders of
our Company per Share is arrived at after the above adjustments and on the basis that a total of
963,798,453 shares (excluding the 4,000,000 treasury shares as disclosed in Note 31(d) to the
Accountants’ Report as set out in Appendix I to this prospectus) in issue assuming that the Global
Offering had been completed on September 30, 2025 without taking into account of any shares which
may be issued upon the exercise of the Over-allotment Option and any shares to be issued pursuant to
the share option scheme and share reward scheme.
(4) For illustrative purpose, the estimated net proceeds from the Global Offering is converted from the Hong
Kong dollar into Renminbi and the unaudited pro forma adjusted net tangible assets attributable to
equity shareholders of our Company per Share is converted from Renminbi into Hong Kong dollar at
a rate of HK$1 equals to RMB0.88787, being the PBOC rate prevailing on the Latest Practicable Date.
No representation is made that the Hong Kong Dollars amounts have been, could have been or may be
converted into Renminbi, or vice versa, at that rate.
(5) No adjustment has been made to the unaudited pro forma statement of adjusted net tangible assets to
reflect any trading results or other transactions of our Group entered into subsequent to September 30,
2025, including but not limited to the disposal of remaining 48% equity interest in Y angzhou Shuguang
completed in November 2025 as disclosed in Note 35 to the Accountants’ Report as set out in Appendix
I to this prospectus. Had such disposal been completed on September 30, 2025, the unaudited pro forma
adjusted consolidated net tangible assets attributable to equity shareholders of our Company would have
increased by approximately RMB11.5 million and the unaudited pro forma adjusted consolidated net
tangible assets attributable to equity shareholders of our Company per Share would have been increased
by RMB0.01 or HK$0.02.
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 has been no material changes to our business model and the general economic
and regulatory environment in which we operate, there has been no material adverse change in
our financial or trading position or prospects since September 30, 2025, being the end date of
our latest consolidated financial statements as set out in the Accountants’ Report in Appendix
I to this prospectus.
DISCLOSURE REQUIRED UNDER THE LISTING RULES
Our Directors 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 in Chapter 13 of
the Listing Rules upon the Listing of the Shares on the Stock Exchange.
FINANCIAL INFORMATION
– 380 –


--- page 391 ---
THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a “ Cornerstone
Investment Agreement ”, and together 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 such number of Offer Shares (rounded down to the nearest whole board lot of
200 H Shares) that may be purchased for an aggregate amount of approximately US$66.91
million (or approximately HK$523.00 million, calculated based on an exchange rate of
US$1.00 to HK$7.8162) exclusive of brokerage fee, the SFC transaction levy, the AFRC
transaction levy and the Stock Exchange trading fee) (the “ Cornerstone Placing ”).
Based on the Offer Price of HK$17.00 per Offer Share, being the high-end of the
indicative Offer Price range set out in this prospectus, the total number of Offer Shares to be
subscribed for by the Cornerstone Investors would be 30,763,600. The table below reflects the
shareholding percentage immediately after the completion of the Global Offering.
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Approximate % of
the Offer Shares
Approximate % of
the total issued
share capital
Approximate % of
the Offer Shares
Approximate % of
the total issued
share capital
31.79% 3.18% 27.64% 3.13%
Based on the Offer Price of HK$16.18 per Offer Share, being the mid-point of the
indicative Offer Price range set out in this prospectus, the total number of Offer Shares to be
subscribed for by the Cornerstone Investors would be 32,322,600. The table below reflects the
shareholding percentage immediately after the completion of the Global Offering.
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Approximate % of
the Offer Shares
Approximate % of
the total issued
share capital
Approximate % of
the Offer Shares
Approximate % of
the total issued
share capital
33.40% 3.34% 29.04% 3.29%
Based on the Offer Price of HK$15.36 per Offer Share, being the low-end of the
indicative Offer Price range set out in this prospectus, the total number of Offer Shares to be
subscribed for by the Cornerstone Investors would be 34,048,600. The table below reflects the
shareholding percentage immediately after the completion of the Global Offering.
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Approximate % of
the Offer Shares
Approximate % of
the total issued
share capital
Approximate % of
the Offer Shares
Approximate % of
the total issued
share capital
35.18% 3.52% 30.59% 3.47%
CORNERSTONE INVESTORS
– 381 –


--- page 392 ---
We believe that the Cornerstone Placing demonstrates our Cornerstone Investors’
confidence in our Company and its business prospect, and that leveraging on the Cornerstone
Investors’ investment or industry experience, the Cornerstone Placing will help to raise the
profile of our Company. Our Company became acquainted with each of the Cornerstone
Investors in its ordinary course of operation through our Group’s business network or through
introduction by our Company’s Overall Coordinators.
The Cornerstone Placing will form part of the International Offering, and, save as
otherwise obtained consent from the Stock Exchange, 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 respects with the fully paid H Shares in issue following
the Global Offering of the Company and will be counted towards the public float of our
Company under Rule 8.08 (as amended and replaced by Rule 19A.13A) of the Listing Rules.
Immediately following the completion of the Global Offering, (i) the Cornerstone Investors or
their close associates will not, by virtue of their cornerstone investments, have any Board
representation in our Company; (ii) none of the Cornerstone Investors and their close
associates will become a substantial Shareholder of our Company; and (iii) the equity interests
in our Company being beneficially owned by the three largest public Shareholders will be less
than 50% for the purpose of Rule 8.08(3) of the Listing Rules. 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. 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 Listing, 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 Applicants.
To the best knowledge of our Company, each of the Cornerstone Investors is (i) not
accustomed to take instructions from our Company or any of our Directors, supervisors, chief
executive, our Controlling Shareholders, substantial Shareholders or existing Shareholders or
any of its subsidiaries or their respective close associates in relation to the acquisition,
disposal, voting or other disposition of the Shares registered in their name or otherwise held
by them; (ii) not financed by our Company or any of our Directors, supervisors, chief executive
of our Company, our Controlling Shareholders, substantial Shareholders, existing Shareholders
or any of its subsidiaries or their respective close associates; and (iii) independent of the other
Cornerstone Investors, our Group, our connected persons and their respective associates, and
is not an existing Shareholder or a close associate of our Group.
To the best knowledge of the Company and Sponsor-Overall Coordinator, and based on
the indicative interest of investment of the Cornerstone Investors and/or their close associates
as of the date of this prospectus, certain Cornerstone Investors and/or their close associates
may participate in the International Offering as placees and subscribe for further Offer Shares
in the Global Offering. The Company will seek the Stock Exchange’s consent and/or waiver to
allow the Cornerstone Investors and/or their close associates to participate in the International
Offering as placees pursuant to Chapter 4.15 of the Guide for New Listing Applicants. Whether
such Cornerstone Investors and/or their close associates will place orders in the International
Offering are uncertain and will be subject to the final investment decisions of such investors
and the terms and conditions of the Global Offering.
CORNERSTONE INVESTORS
– 382 –


--- page 393 ---
As confirmed by each of the Cornerstone Investors, each of the Cornerstone Investors is
independent from each other and make independent investment decisions, and their
subscription under the Cornerstone Placing would be financed by its own internal financial
resources and/or the financial resources of its controlling shareholders and their close
associates or the assets managed for its investors (in the case of Cornerstone Investors which
are funds or investment managers) and it has sufficient funds to settle its respective investment
under the Cornerstone Placing. Save for disclosed in this section, none of the Cornerstone
Investors or their shareholder(s) 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) is
required for the relevant Cornerstone Placing.
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.
Some of the Cornerstone Investors have agreed that our Company and the Sponsor-Overall
Coordinator in their sole discretion may defer the delivery of all or part of the Offer Shares
such Cornerstone Investors will subscribe to on a date later than the Listing Date. Where
delayed delivery takes place, each of such Cornerstone Investors that may be affected by such
delayed delivery has agreed that it shall nevertheless pay for the relevant Offer Shares before
the Listing. As such, there will not be any deferred settlement in payment by the Cornerstone
Investors.
The total number of Offer Shares to be subscribed by the Cornerstone Investors may be
affected by reallocation of the Offer Shares between the International Offering and the Hong
Kong Public Offering. If the total demand for H shares in the Hong Kong Public Offering falls
within the circumstance as set out in the section headed “Structure and Conditions of the
Global Offering — The Hong Kong Public Offering — Reallocation” in this prospectus, our
Company and Sponsor-Overall Coordinator have the absolute discretion, but not obliged, to
deduct the number of Offer Shares to be subscribed by the Cornerstone Investors on a pro rata
basis under the Hong Kong Public Offering pursuant to Practice Note 18 of the Listing Rules.
Details of the actual number of Offer Shares to be allocated to the Cornerstone Investors will
be disclosed in the allotment results announcement of our Company to be published on or
around March 6, 2026.
THE CORNERSTONE INVESTORS
The table below sets forth details of the Cornerstone Placing:
Assuming an Offer Price of HK$15.36 per H Share (being
the low end of the Offer Price range)
Assuming the Over-
allotment Option is not
exercised
Assuming the Over-
allotment Option is
exercised in full
Cornerstone Investor
Subscription
amount (1)
Number of
Offer
Shares (2)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
(US$ in
millions)
Harvest Oriental /H1118/H1118/H111820.00 10,177,200 10.52% 1.05% 9.14% 1.04%
CORNERSTONE INVESTORS
– 383 –


--- page 394 ---
Assuming an Offer Price of HK$15.36 per H Share (being
the low end of the Offer Price range)
Assuming the Over-
allotment Option is not
exercised
Assuming the Over-
allotment Option is
exercised in full
Cornerstone Investor
Subscription
amount (1)
Number of
Offer
Shares (2)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
(US$ in
millions)
Hengtong Optic-
electric
International /H1118/H1118/H1118/H111815.00 7,633,000 7.89% 0.79% 6.86% 0.78%
Dream’ee HK Fund /H1118 10.24 5,208,200 5.38% 0.54% 4.68% 0.53%
Deep Source /H1118/H1118/H1118/H1118/H1118/H111810.00 5,088,600 5.26% 0.53% 4.57% 0.52%
Haitian Huayuan /H1118/H1118/H11184.88 2,481,400 2.56% 0.26% 2.23% 0.25%
New Fortune /H1118/H1118/H1118/H1118/H1118/H11183.80 1,933,600 2.00% 0.20% 1.74% 0.20%
Qianhai Hezhong
Investment /H1118/H1118/H1118/H1118/H11183.00 1,526,600 1.58% 0.16% 1.37% 0.16%
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866.91 34,048,600 35.18% 3.52% 30.59% 3.47%
Assuming an Offer Price of HK$16.18 per H Share (being
the midpoint of the Offer Price range)
Assuming the Over-
allotment Option is not
exercised
Assuming the Over-
allotment Option is
exercised in full
Cornerstone Investor
Subscription
amount (1)
Number of
Offer
Shares (2)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
(US$ in
millions)
Harvest Oriental /H1118/H1118/H111820.00 9,661,400 9.98% 1.00% 8.68% 0.98%
Hengtong Optic-
electric
International /H1118/H1118/H1118/H111815.00 7,246,000 7.49% 0.75% 6.51% 0.74%
Dream’ee HK Fund /H1118 10.24 4,944,200 5.11% 0.51% 4.44% 0.50%
Deep Source /H1118/H1118/H1118/H1118/H1118/H111810.00 4,830,600 4.99% 0.50% 4.34% 0.49%
Haitian Huayuan /H1118/H1118/H11184.88 2,355,600 2.43% 0.24% 2.12% 0.24%
New Fortune /H1118/H1118/H1118/H1118/H1118/H11183.80 1,835,600 1.90% 0.19% 1.65% 0.19%
Qianhai Hezhong
Investment /H1118/H1118/H1118/H1118/H11183.00 1,449,200 1.50% 0.15% 1.30% 0.15%
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866.91 32,322,600 33.40% 3.34% 29.04% 3.29%
CORNERSTONE INVESTORS
– 384 –


--- page 395 ---
Assuming an Offer Price of HK$17.00 per H Share (being
the high end of the Offer Price range)
Assuming the Over-
allotment Option is not
exercised
Assuming the Over-
allotment Option is
exercised in full
Cornerstone Investor
Subscription
amount (1)
Number of
Offer
Shares (2)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
(US$ in
millions)
Harvest Oriental /H1118/H1118/H111820.00 9,195,400 9.50% 0.95% 8.26% 0.94%
Hengtong Optic-
electric
International /H1118/H1118/H1118/H111815.00 6,896,600 7.13% 0.71% 6.20% 0.70%
Dream’ee HK Fund /H1118 10.24 4,705,800 4.86% 0.49% 4.23% 0.48%
Deep Source /H1118/H1118/H1118/H1118/H1118/H111810.00 4,597,600 4.75% 0.48% 4.13% 0.47%
Haitian Huayuan /H1118/H1118/H11184.88 2,242,000 2.32% 0.23% 2.01% 0.23%
New Fortune /H1118/H1118/H1118/H1118/H1118/H11183.80 1,747,000 1.81% 0.18% 1.57% 0.18%
Qianhai Hezhong
Investment /H1118/H1118/H1118/H1118/H11183.00 1,379,200 1.43% 0.14% 1.24% 0.14%
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866.91 30,763,600 31.79% 3.18% 27.64% 3.13%
Notes:
(1) Exclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC
transaction levy, and to be converted to Hong Kong dollars based on the exchange rate as disclosed in
this prospectus.
(2) Subject to rounding down to the nearest whole board lot of 200 Offer Shares. Calculated based on the
exchange rate set out in the section headed “Information about this Prospectus and the Global Offering
— Exchange Rate Conversion”.
The information about our Cornerstone Investors set forth below has been provided by the
Cornerstone Investors in connection with the Cornerstone Placing.
Harvest International Premium Value (Secondary Market) Fund SPC acting on behalf of
and for the account of Harvest Oriental SP
Harvest Oriental SP (“ Harvest Oriental ”) is a fund launched in October 2024. Harvest
International Premium V alue (Secondary Market) Fund SPC acting on behalf of and for the
account of Harvest Oriental is a segregated portfolio company established in the Cayman
Islands and is an Independent Third Party. 91% of the management shares of Harvest
International Premium V alue (Secondary Market) Fund SPC are held by Harvest Global
Investments Limited (“ HGI”) and 9% of the management shares are held by Harvest Global
Capital Investments Limited (“ HGCI ”). Incorporated in Hong Kong in 2008, HGI is a
wholly-owned subsidiary of Harvest Fund Management Co., Ltd. (“ HFM”). HFM is owned as
to 40% by China CREDIT Trust Co., Ltd. (ப΂ʮ̡), 30% by Lixin Investment
Co., Ltd. (ப΂ʮ̡) and 30% by DWS Investments Singapore Limited, all of
CORNERSTONE INVESTORS
– 385 –


--- page 396 ---
which are Independent Third Parties. Other than China CREDIT Trust Co., Ltd. (ৄϞ
ப΂ʮ̡), which is held as to 32.92% by The People’s Insurance Company (Group) of China
Limited (ʮ̡) (stock code: 1339) where the Ministry of Finance
of the People’s Republic of China owns 60.84% of its total issued shares, none of HFM’s
shareholders above has any ultimate beneficial owner holding 30% or more interest therein.
HGCI, the fund manager of Harvest Oriental on a discretionary basis, is a company
incorporated in Hong Kong in 2011 and licensed to carry out type 1 (dealing in securities), type
4 (advising on securities) and type 9 (asset management) regulated activities under the SFO in
Hong Kong by the SFC. HGCI is principally engaged in asset management and investment
advisory business. Chen Di, an Independent Third Party, is the beneficial owner who holds the
largest portion of the ultimate beneficial ownership of HGCI. There are four participating
shareholders of Harvest Oriental, and no single participating shareholder holds 30% or more
interest therein.
Hengtong Optic-electric International
Hengtong Optic-electric International Co., Limited (ʮ̡)( “Hengtong
Optic-electric International ”) is a limited company incorporated in Hong Kong on June 3,
2013, which is primarily engaged in the trading of fiber optic cables, power cables, power
supply materials and accessories, etc. Hengtong Optic-electric International is wholly owned
by Hengtong Optic-electric Co., Ltd (ʮ̡)( “ Hengtong
Optic-electric ”), a company listed on Shanghai Stock Exchange (stock code: 600487), which
is held as to approximately 24.07% by Hengtong Group Company Limited (ʮ̡)
(“Hengtong Group ”). Hengtong Group is owned as to 73% by Mr. Cui Genliang and 27% by
Mr. Cui Wei, respectively. In addition, Mr. Cui Wei directly held approximately 3.86% in
Hengtong Optic-electric. Hengtong Optic-electric is ultimately controlled by Mr. Cui Genliang( ੦
Ԅ) and Mr. Cui Wei ( ੦ᙯ), both are Independent Third Parties. Save for the above,
Hengtong Optic-electric Co., Ltd has no single ultimate beneficial owner holding 30% or more
interests.
Dream’ee HK Fund
Dream’ee (Hong Kong) Open-ended Fund Company – Dream’ee JuneBeast Fund is a
sub-fund (the “ Sub-fund ”) of Dream’ee (Hong Kong) Open-ended Fund Company (“ Dream’ee
HK Fund ”). Dream’ee HK Fund acting on behalf of and for the account of the Sub-fund is a
private open-ended fund company incorporated in Hong Kong in August 2025 as an umbrella
fund governed by the SFO, primarily engaged in equity investment. 100% of the management
shares of Dream’ee HK Fund are held by Dream’ee (Hong Kong) Capital Limited (֝(ಥ)
ʮ̡)( “ Dream’ee Capital ”), which is the investment manager of Dream’ee HK
Fund. Dream’ee Capital is a limited company incorporated in Hong Kong in February 2024
wholly owned by Mr. Lan Kun and licensed by the SFC to conduct Type 9 (Asset Management)
regulated activities in Hong Kong. Mr. Lan Kun is an Independent Third Party. As of the Latest
Practicable Date, Ms. Zhang Jingruo (߰an Independent Third Party, holds
approximately 56.85% interest, and no other investor holds 30% or more of the interest in the
Sub-fund that will participate in the Global Offering.
CORNERSTONE INVESTORS
– 386 –


--- page 397 ---
Deep Source
Deep Source Holdings Limited (ʮ̡)( “ Deep Source ”) (HKEX: 990) and
its subsidiaries are principally engaged in (i) distribution, trading and processing of bulk
commodities and related products in Hong Kong, Singapore and the PRC; and (ii) provision of
securities and derivatives financial services, margin financing and fund management in Hong
Kong and Singapore. It is owned as to approximately 58.9% by Mr. Y ou Zhenhua. Other than
Mr. Y ou Zhenhua, Deep Source has no single ultimate beneficial owner holding 30% or more
interests.
Haitian Huayuan
Haitian Huayuan (Singapore) Pte. Ltd. (“ Haitian Huayuan ”) is a private company
limited by shares and incorporated in Singapore on June 3, 2019, which is primarily engaged
in wholesale of machinery and equipment and manufacture and repair of plastic processing
machinery. Haitian Huayuan is wholly owned by Haitian International Holdings Limited
(“Haitian International ”), a company listed on the Stock Exchange (stock code: 1882). As of
the Latest Practicable Date, Haitian International is owned as follows: (i) approximately
18.35% is held by Premier Capital Management Pte. Ltd., which is owned as to 60% by Mr.
Zhang Jianming and 40% by Mr. Zhang Jingzhang; (ii) approximately 14.73% is held by
Cambridge Management Consultants (PTC) Ltd., which is also owned as to 60% by Mr. Zhang
Jianming and 40% by Mr. Zhang Jingzhang; (iii) approximately 0.23% is indirectly held by Mr.
Zhang Jianming through an entity wholly owned by him; and (iv) approximately 0.03% is
indirectly held by Mr. Zhang Jingzhang through an entity wholly owned by him. Each of Mr.
Zhang Jianming and Mr. Zhang Jingzhang is Independent Third Parties. Save for the above,
Haitian International has no single ultimate beneficial owner holding 30% or more interest.
New Fortune
New Fortune Holdings Group Limited (ʮ̡)( “ New Fortune ”) is an
investment holding company incorporated in British Virgin Islands on November 17, 2016 and
is wholly owned by Net-A-Go Technology Company Limited (ʮ̡), a company
listed on the Stock Exchange (stock code: 1483) (“ Net-A-Go Tech ”). As of the Latest
Practicable Date, Net-A-Go Tech is ultimately beneficially owned as to approximately 28.83%
by Mr. Sang Kangqiao, an Independent Third Party. Net-A-Go Tech has no single ultimate
beneficial owner holding 30% or more interests.
Qianhai Hezhong Investment
Qianhai Hezhong Investment Holding Limited (ʮ̡)( “ Qianhai
Hezhong Investment ”) is a company incorporated in British Virgin Islands on July 10, 2017,
which is primarily engaged in investment and management. Qianhai Hezhong Investment is
wholly owned by Mr. Tan Xiaolong ( ᗈʃᎲ), an Independent Third Party. Mr. Tan Xiaolong
has rich experience in equity investment.
CORNERSTONE INVESTORS
– 387 –


--- page 398 ---
CLOSING CONDITIONS
The obligation of each Cornerstone Investor to subscribe for the Offer Shares under the
respective Cornerstone Investment Agreement is subject to, among other things and as
applicable, the following closing conditions:
(a) the Underwriting Agreements for the Hong Kong Public Offering and the
International Offering 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 Underwriting Agreements, and neither of the aforesaid
Underwriting Agreements having been terminated;
(b) the Offer Price having been agreed upon between our Company and the Sponsor-
Overall Coordinator (for itself and on behalf of the underwriters of the Global
Offering);
(c) the Listing Committee of the Stock Exchange having granted the approval for the
listing of, and permission to deal in, the H Shares (including the H Shares subscribed
for by the Cornerstone Investors) as well as other applicable waivers and approvals,
and such approval, permission or waiver having not been revoked prior to the
commencement of dealings in the H Shares on the Stock Exchange;
(d) no laws shall have been enacted or promulgated by any governmental authority
which prohibits the consummation of the transactions contemplated in the Global
Offering or in the respective 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 acknowledgements, representations, warranties, undertakings and
confirmations of relevant Cornerstone Investor under the respective Cornerstone
Investment Agreement are accurate and true in all respects and not misleading (at the
date of the respective Cornerstone Investment Agreement, the Listing date and the
Delayed Delivery Date (if applicable)) and that there is no breach of the Cornerstone
Investment Agreement on the part of the relevant Cornerstone Investor.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each Cornerstone Investor has agreed that it will not, and will cause its affiliates not to,
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, in any way, any of the Offer Shares
or any interest in any company or entity holding such Offer Shares that they have purchased
pursuant to the relevant Cornerstone Investment Agreement, save for certain limited
circumstances, such as transfers to any of its wholly-owned subsidiaries who will be bound by
the same obligations of such Cornerstone Investors, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
– 388 –


--- page 399 ---
FUTURE PLANS
See “Business — Our Strategies” for a detailed description of our future plans.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$1,486.0 million, after deducting underwriting commissions, fees and estimated expenses
payable by us in connection with the Global Offering, assuming no Over-allotment Option is
exercised, and an Offer Price of HK$16.18 per H Share, being the midpoint of the indicative
price range stated in this prospectus.
In line with our strategies, we currently intend to apply these net proceeds for the
following purposes, subject to changes in light of our evolving business needs and changing
market conditions:
 approximately 25.0% of the net proceeds, or approximately HK$371.5 million, will
be allocated to the expansion of our global production capabilities, including the
following:
(i) approximately 20.0% of the net proceeds, or approximately HK$297.2 million,
will be allocated to the expansion of our manufacturing capacity in Nanjing,
China, aiming to meet the increasing market demand for our products and to
build capacity reserves in anticipation of potential production bottlenecks. To
address tightening capacity and support expected demand, we plan to
commission new facilities to expand and upgrade production for our industrial
robots and intelligent manufacturing systems. Our capacity utilization rate was
82.8% for the production of our industrial robots and intelligent manufacturing
systems and 81.8% for the production of core automation components and
motion control systems for the nine months ended September 30, 2025. The
new facilities are intended to add incremental capacity, remove critical
bottlenecks and improve operating efficiency. Consistent with our “Local for
Global” production model, we will continue to leverage supply chain
advantages in China to deliver cost competitive products and solutions to
customers worldwide.
The investment will cover primarily land acquisition, the construction of new
facilities, the upgrade of existing equipment and the procurement of advanced
production equipment. The new facilities are expected to be equipped with
cutting-edge automated assembly lines, high-precision machining equipment,
and auxiliary tools that will enable us to achieve greater production efficiency
and scalability. Upon completion and full ramp up, we expect the facility to
increase our annual production capacity by approximately 50,000 units.
FUTURE PLANS AND USE OF PROCEEDS
– 389 –


--- page 400 ---
We expect to commence the overall planning and site selection for new
manufacturing bases in 2026, followed by investment in land acquisition. We
expect to complete the construction of the new facilities by 2030, subject to the
progress of planning and subsequent implementation;
(ii) approximately 5.0% of the net proceeds, or approximately HK$74.3 million,
will be used for the construction of overseas manufacturing plants in Poland
and the associated procurement of equipment. These facilities will specialize in
the production of industrial robots and intelligent manufacturing systems. Our
planned European production facility underscores our commitment to the
region and our intention to expand operations in one of our key markets.
Europe imposes rigorous product quality and safety standards. Locating
industrial robot manufacturing in Europe is expected to facilitate compliance
with applicable local regulatory requirements. Proximity to customers should
also shorten logistics lead times, reduce transportation costs and inventory
buffers, and enhance our ability to respond quickly to customer needs.
Establishment of the facility remains subject to customary approvals, permits
and project execution.
We intend to invest in automated assembly lines, inventory automation
systems, coordinate measuring machines, and digital software to optimize the
productivity of our overseas manufacturing facilities. We expect to complete
construction of our European manufacturing facilities by 2026. Upon full ramp
up, these facilities are designed for an aggregate annual nameplate capacity of
approximately 15,000 units.
With respect to our overseas manufacturing plants, we had completed the phase
I construction of our production facility in Poland as of the Latest Practicable
Date. We will proceed with the phase II expansion of our production facility in
Poland, including equipment installation, with commissioning and start-up
targeted for mid-2026, subject to receipt of required permits and approvals.
 approximately 25.0% of the net proceeds, or approximately HK$371.5 million, will
be allocated to the selective pursuit of strategic alliances, investments, and
acquisition opportunities, both domestically and internationally, within the upstream
and downstream segments of the industrial robotics industry. Specifically, we will
target opportunities engaged in the research, development, and production of core
robotic components and products, industrial software, and embodied intelligence
products, among others.
With respect to strategic alliances, we plan to use a portion of the proceeds to
establish cooperations with industry partners through the formation of joint ventures
or the signing of strategic cooperation agreements. These alliances are intended to
leverage the respective strengths of both parties in areas such as technology, talent,
supply chain, brand, and market resources, enabling synergy and complementarity
FUTURE PLANS AND USE OF PROCEEDS
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across the industrial robotics value chain. Our potential partners include upstream
enterprises in the industrial robotics industry, such as manufacturers of reducers,
sensors, and industrial software, as well as leading downstream customers in sectors
such as automotive and lithium battery manufacturing. The proceeds will be used
primarily to fund the establishment and operation of joint ventures, and to provide
sufficient working capital for the implementation of cooperative projects under
strategic cooperation agreements, ensuring the effective execution and
commercialization of the alliances.
In assessing such opportunities, we will prioritize targets with leading market
positions, established track records, comprehensive product portfolios, and distinct
competitive advantages within their respective market segments. Subject to case by
case exceptions, we will take the following criteria into consideration: (i) minimum
annual revenue of RMB50.0 million; (ii) profitability on a net income or EBITDA
basis, or a credible path to profitability within a defined period; (iii) at least two
years of operating history; (iv) a moderate leverage profile and a sound balance
sheet; (v) sustained investment in R&D with demonstrable technology assets and
intellectual property; and (vi) valuation aligned with sector benchmarks. We intend
to focus on Europe, China and other Asian markets with strong industrial bases, and
on sales channel partners in select emerging markets. According to the F&S Report,
a sufficient number of potential targets meet these parameters.
We apply a disciplined, multi-stage process to evaluate opportunities, beginning
with screening and assessment, followed by comprehensive due diligence with
external advisers. Findings are reviewed through internal procedures. We prioritize
targets with leading positions, solid track records, complementary portfolios,
defensible advantages, and strong brands.
These initiatives are intended to strengthen our end-to-end R&D and manufacturing
capabilities, as well as our ability to drive integrated hardware-software
development. As of the Latest Practicable Date, we had not identified any specific
investment or acquisition targets, nor had we entered into any definitive investment
or acquisition agreements.
We plan to initiate a global screening for potential acquisition targets in 2026,
following the Listing of our Company. Any potential transaction will be subject to
rigorous due diligence, valuation discipline, board approval, financing availability
and required regulatory clearances, and there can be no assurance that any
acquisition will be completed. Subject to market conditions, financing availability
and required approvals, we aim to complete and integrate acquisitions as soon as
practicable.
 approximately 20.0% of the net proceeds, or approximately HK$297.2 million, will
be invested in R&D initiatives to advance next-generation industrial robotics
technologies, aiming to reinforce our market leadership. In particular:
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 approximately 6.0% of the net proceeds, or approximately HK$89.2 million,
will be allocated to the development of open-source, application-driven
industrial robot control systems. Our R&D efforts will focus on advancing
hardware design, optimizing operating systems, and refining control system
architecture. We aim to develop a next-generation open and modular control
system featuring a unified hardware platform and operating system
architecture that supports containerized deployment, enhanced cybersecurity,
and flexible extension through AI and communication modules. In parallel, we
will conduct preliminary research and design for a user portal software
framework, including developer tools and programming environments, and
develop process-specific software packages for representative industrial
scenarios such as automotive and arc welding. We will concentrate on
developing advanced programming languages for controllers, as well as hybrid
programming parsers and motion-planning technologies applicable to both
robotic and general motion control. We also plan to enhance the adaptability
and functionality of programmable logic controllers and industrial PCs,
improve cross-platform compatibility, and create a more user-friendly
programming environment and human-machine interaction. The control
platforms are designed for integration into our industrial robots, controllers
and related products, enhancing performance, functionality and human-
machine interaction. These efforts will underpin the development of next-
generation robotic control systems and general motion control solutions,
delivering open, modular products to customers across the value chain;
Subject to development progress, customer feedback and resource availability,
we plan to advance our next-generation industrial robot control systems
through three stages between 2026 and 2028: finalizing the core system
architecture, delivering a prototype, and completing validation and preparation
for pilot and staged commercialization.
 approximately 4.3% of the net proceeds, or approximately HK$63.9 million,
will be used for integrating embodied AI technologies into industrial robots.
Our efforts will prioritize integrating embodied AI technologies, such as
general-purpose perception, interaction technologies, reinforcement learning,
training algorithms, and AI content generation, into our existing motion control
platform for industrial robots. The embodied AI technologies are intended to
upgrade our existing products by enhancing intelligence, ease of use and the
human-machine interface. We are also developing a dual-arm robotic system
architecture based on a unified multi-robot controller, as well as an end-to-end
embodied intelligence simulation system to support training, testing and
optimization in virtual environments. These systems will form the technical
foundation for embodied AI robots tailored to industrial applications, enabling
continuous iteration, simulation-driven learning, and rapid functional
deployment. We believe these improvements will increase the suitability of our
robots for established applications and unlock use cases that are currently not
addressable. We aim to enhance the versatility of industrial robots, enabling
them to address more complex applications while unlocking new opportunities
across diverse industrial scenarios;
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Between 2026 and 2028, subject to technical validation and customer input, we
plan to advance our embodied AI robotics program from dual-arm system
architecture and end-to-end simulation, through industrial prototypes, to a
general-purpose platform configurable for diverse scenarios with flexible
software and hardware options.
 approximately 3.7% of the net proceeds, or approximately HK$55.0 million,
will be allocated to the development of precision motion control and high
power-density motor technologies. Our R&D will focus on high-performance
motion control algorithms, achieving key technical benchmarks in precision
motion control, as well as the design of high-power-density motors and the
application of advanced magnetic materials. Our precision motion control
technology is designed to improve control-algorithm performance, enabling
our controllers to address higher-end, higher-precision and higher-speed
applications, including systems with greater axis counts and complex
kinematics. We believe these enhancements will broaden the addressable
market for our motion controllers and enhance their commercial prospects. Our
high power-density motor technology is intended to advance our robotic
platforms by enabling simpler mechanical architectures and more precise
drivetrains, while delivering higher payload capacity and faster cycle times at
comparable size and weight. We believe that integrating this technology into
our robots will expand applicable use cases and strengthen the
commercialization potential of our robotic systems;
In 2026 we will finalize the technical roadmap and validate key control
methods, including deep flux weakening. In 2027 we will productize the core
algorithms and establish a component series. In 2028 we will add AI-based
tuning, integrate the platform into our robots and expand to a family of robot
products.
 approximately 3.3% of the net proceeds, or approximately HK$49.0 million,
will be used for enhancing the safety profile of our robotics, including the
development of safety-critical components and technologies to ensure safe
interaction between humans and robots. We will also dedicate efforts to
developing high-standard industrial robots and core automation components to
advance our presence in overseas markets and promote our products globally.
The development of this technology will mark a milestone in our independent
mastery of safety technologies across components, finished products and
integrated solutions. We expect this capability to enable us to introduce
products that comply with overseas regulatory regimes, including in the
European Union, thereby broadening our addressable market and commercial
reach; and
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In 2026 we expect to obtain safety concept approval and complete functional
validation and verification at the prototype level and at full system integration.
In 2027 we plan to productize the platform and begin ramp up starting in the
second quarter.
 approximately 2.7% of the net proceeds, or approximately HK$40.1 million,
will be allocated to the development of digital-twin and industrial software
platforms. Our R&D efforts will focus on advancing digital-twin technologies
and cloud-based platforms for remote monitoring, fault prediction, and
production line management. These platforms will support factory automation
by enabling robot offline programming, rapid validation of robotic solutions,
and simulation and debugging of automated production lines. We intend to
offer this software as a standalone product to end users. In addition to the direct
revenue opportunity from software sales, we believe its adoption will reduce
engineering labor and commissioning costs for equipment makers and
integrators and improve project success rates, delivering measurable value to
customers. The software is also expected to lower maintenance costs for end
users through remote monitoring, fault prediction and early-warning
diagnostics, materially reducing the likelihood of unplanned downtime.
In 2026 we expect to launch the first generation system, deliver core functional
prototypes and release version 1.0 of our offline programming and simulation
software. In 2027 we plan to release version 1.0 of our industrial digital cloud
platform to enable data collection, visualization and remote operations. In
2028 we expect to complete the first customer deliveries of the offline
programming and simulation suite and to validate digital twins for small scale
workstations.
Our planned use of net proceeds prioritizes investment in R&D and aligns with
our historical R&D spending profile. In 2022, 2023, 2024 and the first nine
months of 2025, our R&D expenditures (including our research and
development expenses and investment in R&D activities which was
capitalized) amounted to RMB401.6 million, RMB504.1 million, RMB502.9
million, and RMB354.2 million, respectively. The table below presents our
current estimate of the portion of net proceeds to be allocated to R&D
initiatives, subject to adjustment based on market conditions and our
operational needs.
Estimated
Allocation of
Net Proceeds
(HKD in million)
Staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118218.0
R&D equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837.1
R&D materials and consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118297.2
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To execute our R&D roadmap and support future growth, we plan to expand
our R&D department by approximately 450 professionals across five
functional groups: (i) 200 in software and AI, (ii) 130 in hardware,
mechatronics and sensing, (iii) 70 in quality assurance, (iv) 20 in
manufacturing process engineering, and (v) 30 in safety and general functions.
The actual number and timing of hires may vary based on business needs and
talent availability. Based on our historical R&D spending and the scope of
these initiatives, we expect our R&D funding requirements to exceed the net
proceeds from the Global Offering. We plan to finance the shortfall with future
operating cash flows and, as needed, external financing.
 approximately 10.0% of the net proceeds, or approximately HK$148.6 million, will
be used for strengthening our global service capabilities and developing a
organization-wide digitized management system, with the goal of increasing our
global brand recognition and strengthening our core competitiveness in the
international market. In particular,
(i) approximately 7.0% of the net proceeds, or approximately HK$104.0 million,
will be allocated to enhancing our international sales capabilities and
strengthening our after-sales service infrastructure. Our efforts will be
strategically focused on key regions such as Europe, South America, and
Southeast Asia. We plan to build a service network in these key regions to
support local deployment and after sales service starting from 2026. We also
plan to expand our partner ecosystem to provide complementary coverage and
capabilities. We aim to expand global service capabilities by establishing local
operations and actively collaborating with local partners, such as channel
service providers. We plan to allocate our net proceeds primarily in (i)
recruiting and onboarding highly skilled talent; (ii) leasing or purchasing office
space; (iii) investing in office infrastructure and other essential equipment; (iv)
paying service fees to local partners for sales and marketing support; and
(ii) approximately 3.0% of the net proceeds, or approximately HK$44.6 million,
will be allocated to the development and implementation of a globally
integrated digitized management system. We expect to complete the
establishment of a global digital shared services center by 2026, encompassing
finance, business operations and R&D platforms. In 2027, as needed, we plan
to implement modular management platforms. This initiative is designed to
foster a seamless connection between our domestic and international
operations, enabling operational transparency across our global network. For
example, we plan to deploy advanced enterprise management systems, such as
enterprise resource planning systems, customer relationship management
systems, and product lifecycle management systems, within our overseas
subsidiaries and branches to synchronize with our domestic operations,
ensuring a unified, efficient, and secure global network. Furthermore, this
initiative will allow us to standardize workflows, streamline decision-making
processes, and optimize resource allocation at both the local and global levels.
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 Approximately 10.0% of the net proceeds, or approximately HK$148.6 million, will
be used to partially repay existing loans, including: (i) a bank loan obtained to fund
the acquisition of a subsidiary, with a principal amount of RMB119.0 million,
bearing interest at the 5-year Loan Prime Rate plus 13 basis points, subject to annual
adjustment, with RMB59.0 million maturing on October 20, 2026, and the remaining
balance maturing on April 20, 2027; and (ii) bank loans secured to supplement our
working capital, with a total principal amount of RMB29.25 million, bearing
interests at a fixed rate of 2.4% or the 1-year Loan Prime Rate minus 50 to 85 basis
points, and maturing between May 20, 2026, and September 27, 2026.
 the remaining approximately 10.0% of the net proceeds, or approximately HK$148.6
million, will be used for working capital and general corporate purposes.
If the Over-allotment Option is not exercised, the net proceeds that we will receive will
be approximately HK$1,486.0 million, assuming an Offer Price of HK$16.18 per H Share
(being the midpoint of the indicative price range). If the Offer Price is set at HK$17.00 per H
Share, being the high end of the indicative price range, the net proceeds from the Global
Offering will increase to approximately HK$1,563.5 million. If the Offer Price is set at
HK$15.36 per H Share, being the low end of the indicative price range, the net proceeds from
the Global Offering will decrease to approximately HK$1,408.6 million. The above allocation
of the net proceeds from the Global Offering will be adjusted on a pro rata basis in the event
that the Offer Price is fixed at a higher or lower level compared to the midpoint of the
indicative price range stated in this prospectus.
If the Over-allotment Option is exercised in full, the net proceeds that we will receive will
be approximately HK$1,715.2 million, assuming an Offer Price of HK$16.18 per H Share
(being the midpoint of the indicative price range). If the Offer Price is set at HK$17.00 per H
Share, being the high end of the indicative price range, the net proceeds from the Global
Offering will increase to approximately HK$1,804.3 million. If the Offer Price is set at
HK$15.36 per H Share, being the low end of the indicative price range, the net proceeds from
the Global Offering will decrease to approximately HK$1,626.2 million. In the event that the
Over-allotment Option is exercised in full, we intend to apply the additional net proceeds to
the above purpose in the proportions stated above.
To the extent that our net proceeds are not sufficient to fund the purposes set out above,
we intend to fund the balance through a variety of means, including cash generated from
operations, bank loans and other borrowings. To the extent that the net proceeds are not
immediately applied to the above purposes and to the extent permitted by the relevant law and
regulations, the unused net proceeds will only be held 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).
We will make an appropriate announcement if there is any change to the above proposed use
of proceeds.
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--- page 407 ---
HONG KONG UNDERWRITERS
Huatai Financial Holdings (Hong Kong) Limited
GF Securities (Hong Kong) Brokerage Limited
CMB International Capital Limited
BOCOM International Securities Limited
ABCI Securities Company Limited
ICBC International Securities Limited
BOCI Asia Limited
Futu Securities International (Hong Kong) Limited
Livermore Holdings Limited
TradeGo Markets Limited
Huaan Securities (Hong Kong) Brokerage 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. Our Company expects the International Offering to be fully underwritten by
the International Underwriters. If, for any reason, the Offer Price is not agreed between the
Sponsor-overall Coordinator (for itself and on behalf of the Underwriters) and our Company,
the Global Offering will not proceed and will lapse.
The Global Offering comprises the Hong Kong Public Offering of initially 9,678,000
Hong Kong Offer Shares and the International Offering of initially 87,102,000 International
Offer Shares, subject, in each case, to reallocation on the basis as described in “Structure and
Conditions of the Global Offering” in this prospectus.
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
The Hong Kong Underwriting Agreement was entered into on February 26, 2026. As
described in the Hong Kong Underwriting Agreement, we are offering the Hong Kong Offer
Shares for subscription on and subject to the terms and conditions of this prospectus and the
Hong Kong Underwriting Agreement at the Offer Price.
Subject to (a) the Listing Committee granting the listing of, and permission to deal in, our
H Shares in issue and to be issued pursuant to the Global Offering as mentioned herein
(including any additional H Shares which may be issued pursuant to the exercise of the
Over-allotment Option) and the listing and permission not having been revoked and (b) certain
other conditions set out in the Hong Kong Underwriting Agreement, the Hong Kong
Underwriters have agreed severally (but not jointly) to subscribe or procure subscribers for
UNDERWRITING
– 397 –


--- page 408 ---
their applicable proportion of the Hong Kong Offer Shares which are now being offered but are
not taken up under the Hong Kong Public Offering on and subject to the terms and conditions
of this prospectus and the Hong Kong Underwriting Agreement.
The Hong Kong Underwriting Agreement is conditional upon and subject to, 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 Sponsor-Overall Coordinator (for itself and on behalf of the Hong Kong
Underwriters), in its sole and absolute discretion, shall have the right by giving a written notice
to our Company to terminate the Hong Kong Underwriting Agreement with immediate effect
if, any of the following events shall occur prior to 8:00 a.m. on the Listing Date:
(a) there develops, occurs, exists or comes into force:
(i) any new law or regulation or any change or development involving a
prospective change in existing law or regulation, or any change or development
involving a prospective change in the interpretation or application thereof by
any court or other competent authority in or affecting Hong Kong, the PRC, the
United States, the United Kingdom, the European Union (or any member
thereof), or other jurisdictions relevant to the Company (each a “ Relevant
Jurisdiction ” and collectively, the “ Relevant Jurisdictions ”);
(ii) any change or development involving a prospective change, or any event or
series of events likely to result in a change or prospective change, in local,
national, regional or international financial, political, military, industrial,
economic, fiscal, regulatory, currency, credit or market conditions or
sentiments, equity securities 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) or
currency exchange rate or controls in or affecting any Relevant Jurisdictions;
(iii) any event or series of events in the nature of force majeure including, without
limitation, acts of government, declaration of a regional, national or
international emergency or war, calamity, crisis, economic sanctions, strikes,
other industrial actions, lock outs, fire, explosion, flooding, tsunami,
earthquake, volcanic eruption, civil commotion, riots, public disorder,
paralysis in government operations, acts of war, acts of God, epidemic,
pandemic, outbreak or escalation of infectious disease, (including without
limitation COVID-19, SARS, MERS, H5N1, H1N1, swine or avian influenza
or such related/mutated forms), accident or interruption or delay in
transportation in or affecting any of the Relevant Jurisdictions, or without
limiting the foregoing, any local, national, regional or international outbreak or
UNDERWRITING
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--- page 409 ---
escalation of hostilities (whether or not war is or has been declared), 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;
(iv) the imposition or declaration of (A) any moratorium, suspension or limitation
(including without limitation, any imposition of or requirement for any
minimum or maximum price limit or price range) on trading in shares or
securities generally on the Stock Exchange, the Shanghai Stock Exchange, the
Shenzhen Stock Exchange, the Singapore Stock Exchange, the New Y ork Stock
Exchange, the NASDAQ Global Market or the London Stock Exchange; (B)
any moratorium, suspension or limitation (including without limitation, any
imposition of or requirement for any minimum or maximum price limit or price
range) in or on trading in any securities of the Company listed or quoted on a
stock exchange or an over-the-counter market or (C) any 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 in those places or jurisdictions;
(v) other than with the prior written consent of the Sole Sponsor, the issue or
requirement to issue by the Company of a supplement or amendment to the
Prospectus, the Offering Circular, the CSRC Filings 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 and/or the CSRC;
(vi) any (A) change or prospective change in taxation, exchange controls, currency
exchange rates or foreign investment regulations (including, without
limitation, a devaluation of the Hong Kong 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 the implementation of any
exchange control in any of the Relevant Jurisdictions, or (B) any change or
prospective change in taxation in any Relevant Jurisdiction adversely affecting
an investment in the H Shares;
(vii) the commencement by any Governmental Authority or other regulatory or
political body or organization of any public action or investigation against a
Director or an announcement by any such Governmental Authority or
regulatory or political body or organization that it intends to take any such
action;
UNDERWRITING
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--- page 410 ---
(viii) the imposition of sanctions or export controls in whatever form directly on or
relevant to any Group Companies or Controlling Shareholders or the
withdrawal of trading privileges which existed on the date of the Hong Kong
Underwriting Agreement, in whatever form, directly by, or on, any Relevant
Jurisdiction, provided that such sanctions, export controls or withdrawal of
trading privileges will or are expected to result in material adverse effect
directly relating to the Global Offering;
(ix) any material adverse change or development or event involving a prospective
material adverse change in the Group’s assets, liabilities, profits, losses,
performance, financial condition, business, earnings, trading position or
prospects, or any change in capital stock or long-term debt of the Group, or any
loss or interference with the assets, operations or business of the Group,
provided that such change, development or event directly results in a material
adverse effect on the Global Offering or the Company’s ability to perform its
obligations under the Hong Kong Underwriting Agreement, which (in any such
case) is not set out in the prospectus; or any event, act or omission which gives
rise or is reasonably likely to give rise to any liability of the Company pursuant
to the indemnities in the Hong Kong Underwriting Agreement;
(x) any demand by creditors for repayment of indebtedness or an order or petition
is presented for the winding-up or liquidation of any member of the Group, or
any member of the Group makes any composition or arrangement with its
creditors or enters into a scheme of arrangement or any resolution is passed for
the winding-up of any member of the Group or a provisional liquidator,
receiver or manager is appointed over all or part of the assets or undertaking
of any member of the Group or anything analogous thereto occurs in respect
of any member of the Group;
(xi) any non-compliance of the prospectus, the CSRC Filings (or any other
documents used in connection with the contemplated offering, allotment, issue,
subscription or sale of any of the Offer Shares) or any aspect of the Global
Offering with the Listing Rules, the CSRC Rules or any other applicable law;
(xii) any change or prospective change, or a materialization of, any of the risks set
out in the section headed “Risk Factors” in the prospectus;
(xiii) any litigation or claim instigated, or any litigation or claim being threatened
against any member of the Group or any Director in any Relevant Jurisdiction;
(xiv) any contravention by the Company or any Director of the Listing Rules or
applicable laws;
UNDERWRITING
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--- page 411 ---
which, in any such case individually or in the aggregate, in the absolute opinion of the
Sponsor-Overall Coordinator (for itself and on behalf of the Hong Kong Underwriters):
(I) has or will or may have a Material Adverse Effect (as defined in the Hong Kong
Underwriting Agreement); (II) has or will or may have a material adverse effect on the
success of the Global Offering and/or make it impracticable or inadvisable 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; (III) has or will or may
have a material adverse effect on the level of applications under the Hong Kong Public
Offering or the level of interest under the International Offering; (IV) make, will or may
make it impracticable or inadvisable to proceed with the Hong Kong Public Offering
and/or the Global Offering, to market the Global Offering or the delivery of Shares on the
Listing Date; or (V) 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
(b) there has come to the notice of any the Sole Sponsor and the Sponsor-Overall
Coordinator (for itself and on behalf of the Hong Kong Underwriters):
(i) that any statement contained in any of the Offering Documents (as defined in
the Hong Kong Underwriting Agreement), the CSRC Filings and/or any
notices, announcements, advertisements, communications or other documents
issued or used by or on behalf of the Company in connection with the Hong
Kong Public Offering (including any supplement or amendment thereto) was,
when it was issued, or has become untrue, incorrect, inaccurate in any material
respect or misleading;
(ii) that any estimate, forecast, expression of opinion, intention or expectation
contained in any of the Offering Documents(as defined in the Hong Kong
Underwriting Agreement), the CSRC Filings and/or any notices,
announcements, advertisements, communications or other documents issued or
used by or on behalf of the Company in connection with the Hong Kong Public
Offering (including any supplement or amendment thereto) was, when it was
issued, or has become materially unfair, or misleading in any respect or based
on untrue, dishonest or unreasonable assumptions with reference to the facts
and circumstances then subsisting;
(iii) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of the prospectus, constitute a material
omission therefrom;
(iv) it becomes necessary for the Company to issue a supplement to the prospectus
or the CSRC Filings (or to any other documents used in connection with the
Global Offering) pursuant to the Companies Ordinance or the Companies
(Winding Up and Miscellaneous Provisions) Ordinance, the Listing Rules, the
CSRC Rules or any requirement or request of the Stock Exchange, the SFC
and/or the CSRC, unless consented by the Sponsor-Overall Coordinator (for
itself and on behalf of the Hong Kong Underwriters);
UNDERWRITING
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--- page 412 ---
(v) any breach of, or any event rendering untrue or incorrect in any material
respect, any of the Warranties given by the Company in the Hong Kong
Underwriting Agreement (except those already qualified by materiality);
(vi) any material breach of any of the obligations of the Company to the Hong
Kong Underwriting Agreement or the International Underwriting Agreement
(to the extent they are party to such agreement);
(vii) a Material Adverse Effect (as defined in the Hong Kong Underwriting
Agreement);
(viii) that (A) any Director or member of senior management of the Company named
in the prospectus seeks to retire, or is removed or vacated from office, or (B)
any certificate given by the Company or any of its respective officers to the
Sponsor-Overall Coordinator under or in connection with the Hong Kong
Underwriting Agreement or the Global Offering is false or misleading in any
respect, or (C) any Director or any member of senior management of the
Company named in the prospectus charged with an indictable offence or is
being prohibited by operation of law or otherwise disqualified from taking part
in the management of a company;
(ix) the Company withdraws the prospectus (and/or any other documents used in
connection with the subscription of the Offer Shares pursuant to the Global
Offering) or the Global Offering;
(x) the approval by the Listing Committee of the listing of, and permission to deal
in, the H Shares is refused or not granted, other than subject to customary
conditions, on or before the date of the listing, or if granted, the approval is
subsequently withdrawn, qualified (other than by customary conditions) or
withheld;
(xi) any expert named in the prospectus (other than the Sole Sponsor) has
withdrawn its respective consent to the issue of the 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;
(xii) any prohibition on the Company for whatever reason from offering, allotting,
issuing or selling any of the Offer Shares pursuant to the terms of the Global
Offering;
(xiii) 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
UNDERWRITING
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--- page 413 ---
(xiv) (i) a material portion of the orders placed or confirmed in the bookbuilding
process or (ii) any investment commitment made-by any cornerstone investors
under the Cornerstone Investment Agreements signed with such cornerstone
investors, have been withdrawn, terminated or cancelled, or with respect to
which the payment of the relevant orders and/or investment commitment has
not been received or settled in the stipulated time and manner or otherwise,
then the Sponsor-Overall Coordinator (for itself and on behalf of the Hong Kong
Underwriters) may, in its sole and absolute discretion and upon giving notice in writing
to the Company, terminate the Hong Kong Underwriting Agreement with immediate
effect.
Undertakings to the Stock Exchange Pursuant to the Listing Rules
Undertakings by our Company
Pursuant to Rule 10.08 of the Listing Rules, we have undertaken to the Stock Exchange
that, no further Shares or securities convertible into our equity securities (whether or not of a
class already listed) may be issued by us or form the subject of any agreement to such an issue
within six months from the Listing Date (whether or not such issue of Shares or our securities
will be completed within six months from the Listing Date) except for: (a) any capitalization
issue, capital reduction or consolidation or sub-division of Shares; or (b) issue of Shares or
securities pursuant to the Global Offering and the Over-allotment Option; or (c) any other
applicable circumstances provided under Rule 10.08 of the Listing Rules.
Undertakings by the Controlling Shareholders
Pursuant to Rule 10.07(1) of the Listing Rules, each of the Controlling Shareholders has
undertaken to the Stock Exchange and our Company that, he/she/it will not, and will procure
the registered holder(s) controlled by the Controlling Shareholders will not:
(a) in the period commencing on the date of the prospectus and ending on the date
which is six months from the Listing Date (the “ First Six-month Period ”), dispose
of, nor enter into any agreement to dispose of or otherwise create any options, rights,
interests or encumbrances in respect of, any of the Shares of the Company in respect
of which he/she/it is shown in the prospectus to be the beneficial owner (the
“Relevant Securities ”).
(b) in the period of six months commencing on the date on which the period referred to
in paragraph (a) above expires, dispose of, nor enter into any agreement to dispose
of or otherwise create any options, rights, interests, or encumbrances in respect of,
any of the Shares referred to in paragraph (a) above if, immediately following such
disposal or upon the exercise or enforcement of such options, rights, interests or
encumbrances, he/she/it would cease to be a controlling shareholder of our
Company (as defined in the Listing Rules).
UNDERWRITING
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Note 2 to Rule 10.07(2) of the Listing Rules provides that the foregoing shall not prevent
the Controlling Shareholders from using securities of the Company beneficially owned by them
as security (including a charge or a pledge) in favor of an authorized institution (as defined in
the Banking Ordinance (Chapter 155 of the Laws of Hong Kong)) for a bona fide commercial
loan. For the avoidance of doubt, the lock-up under the above undertakings shall not apply to
the existing pledge of A Shares by the Controlling Shareholders prior to Listing.
Pursuant to Note (3) to Rule 10.07(2) of the Listing Rules, the Controlling Shareholders
have undertaken to the Stock Exchange, the Sole Sponsor and our Company that, within the
period commencing on the date by reference to which disclosure of their shareholding in our
Company is made in this prospectus and ending on the date which is 12 months from the
Listing Date, they will:
(a) when any of them pledges or charges any Relevant Securities in favour of an
authorized institution (as defined in the Banking Ordinance (Chapter 155 of the
Laws of Hong Kong)) for a bona fide commercial loan in accordance with Note (2)
to Rule 10.07(2) of the Listing Rules, immediately inform our Company in writing
of such pledge or charge together with the number of the Relevant Securities so
pledged or charged; and
(b) when any of them receives indications, either verbal or written, from the pledgee or
charge that any of the pledged or charged securities will be disposed of, immediately
inform our Company in writing of such indications.
Our Company will inform the Stock Exchange as soon as we have been informed of the
matters referred to in paragraphs (a) and (b) above (if any) by the Controlling Shareholders and
disclose such matters by way of an announcement which is published in accordance with Rule
2.07C of the Listing Rules as soon as possible.
Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertakings by our Company
Pursuant to the Hong Kong Underwriting Agreement, the Company has undertaken to the
Sole Sponsor, the Sponsor-Overall Coordinator, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries and the Hong Kong Underwriters that except pursuant to the Global Offering
(including pursuant to the Over-allotment Option), at any time after the date of the Hong Kong
Underwriting Agreement up to and including the date falling six months after the Listing Date
(the “ First Six Month Period ”), it will not and will use its best endeavours to procure each
other member of the Group not to, without the prior written consent of the Sole Sponsor and
the Sponsor-Overall Coordinator (for itself and on behalf of the Hong Kong Underwriters) and
unless in compliance with the requirements of the Listing Rules:
(a) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree
to allot, issue or sell, assign, mortgage, charge, pledge, assign, 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
UNDERWRITING
– 404 –


--- page 415 ---
transfer or dispose of or create any claim, mortgage, charge, pledge, lien or other
security interest or any option, restriction, right of first refusal, equitable right,
power of sale, hypothecation, retention of title, right of pre-emption or other
third-party claim, right, interest or preference or any other encumbrance of any kind
or an agreement, arrangement or obligation to create any of the foregoing (the
“Encumbrance ”) over, or agree to transfer or dispose of or create an Encumbrance
over, either directly or indirectly, conditionally or unconditionally, any legal or
beneficial interest in any Shares or other equity securities of the Company, or any
interests in any of the foregoing (including, without limitation, any securities that
are convertible into or exercisable or exchangeable for or that represent the right to
receive, or any warrants or other rights to purchase any Shares or other equity
securities of the Company, as applicable), or deposit any Shares or other equity
securities of the Company, as applicable, with a depositary in connection with the
issue of depositary receipts;
(b) 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
Shares or any other equity securities of the Company, or any interest therein
(including, but not limited to, any equity securities that are convertible into or
exercisable or exchangeable for, or that represent the right to receive, or any
warrants or other rights to purchase, any Shares);
(c) enter into any transaction with the same economic effect as any transaction
described in (a) or (b) above; or
(d) offer to or agree to do any of the foregoing or announce 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 equity securities, in cash or otherwise (whether or not the issue of such
share capital or other equity securities will be completed within the First Six Month Period).
The Company further agreed that, in the event the Company is allowed to enter into any of the
transactions described in (a), (b) or (c) above or offers to or agrees to or announces any
intention to effect any such transaction during the period of six months commencing on the
date on which the First Six Month Period expires (the “ Second Six Month Period ”), it will
take all reasonable steps to ensure that such an issue or disposal will not, and no other act of
the Company will, create a disorderly or false market for any H Shares or other equity
securities of the Company.
The Company has agreed and undertaken to the Sole Sponsor, the Sponsor-Overall
Coordinator, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers, the Capital Market Intermediaries and the Hong Kong Underwriters
that it will comply with the minimum public float requirements specified in the Listing Rules
or any waiver granted and not revoked by the Stock Exchange (the “ Minimum Public Float
Requirement ”), and it will not effect any purchase of the H Shares, or agree to do so, which
may reduce the holdings of the H Shares held by the public (as defined in Rule 8.24 of the
Listing Rules) to below the Minimum Public Float Requirement on or before the date falling
six months after the Listing Date without first having obtained the prior written consent of the
Sponsor-Overall Coordinator (for itself and on behalf of the Hong Kong Underwriters) (which
consents shall not be unreasonably withheld, delayed or rejected).
UNDERWRITING
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--- page 416 ---
Hong Kong Underwriters’ Interests in our Company
Save for their respective obligations under the Hong Kong Underwriting Agreement, as
of the Latest Practicable Date, none of the Hong Kong Underwriters was interested, legally or
beneficially, directly or indirectly, in any H Shares or any securities of any member of our
Group or had any right or option (whether legally enforceable or not) to subscribe for or to
nominate persons to subscribe for securities in our Company.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of our H Shares as a result of fulfilling their
respective obligations under the Hong Kong Underwriting Agreement.
The International Offering
In connection with the International Offering, it is expected that the Company will enter
into the International Underwriting Agreement with the Sponsor-Overall Coordinator and the
International Underwriters. Under the International Underwriting Agreement, the International
Underwriters would, subject to certain conditions set out therein, severally and not jointly,
agree to purchase the International Offer Shares being offered pursuant to the International
Offering or procure subscribers or purchasers for such International Offer Shares.
It is expected that the International Underwriting Agreement may be terminated on
similar ground as the Hong Kong Underwriting Agreement. Potential investors shall be
reminded that in the event that the International Underwriting Agreement is not entered into,
the Global Offering will not proceed.
Over-allotment Option
The Company is expected to grant the Over-allotment Option to the International
Underwriters, exercisable by the Sponsor-Overall Coordinator (for itself and on behalf of the
International Underwriters) at any time from the Listing Date until 30 days after the last day
for lodging applications under the Hong Kong Public Offering, pursuant to which the Company
may be required to issue up to an aggregate of 14,517,000 additional Offer Shares, representing
no more than 15% of the number of Offer Shares initially being offered under the Global
Offering, at the Offer Price to solely cover over-allocations in the International Offering, if any.
We will delay delivery of the Offer Shares allocated to certain investors under the International
Offering in order to cover over-allocation of the Offer Shares before exercise of the
Over-allotment Option. See “Structure and Conditions of the Global Offering — Over-
allotment Option.”
Commission and Expenses
The Capital Market Intermediaries will receive an underwriting commission of 1.6% of
the aggregate Offer Price of all the Offer Shares (including any Offer Shares to be issued
pursuant to the exercise of the Over-allotment Option), out of which they will pay any
sub-underwriting commissions and other fees.
UNDERWRITING
– 406 –


--- page 417 ---
The Capital Market Intermediaries may receive a discretionary incentive fee of up to
0.8% of the aggregate Offer Price of all the Offer Shares to be issued by our Company under
the Global Offering (including any Offer Shares to be issued pursuant to the exercise of the
Over-allotment Option).
Assuming full payment of the discretionary incentive fee, the fixed fees and the
discretionary fees payable to the Underwriters represent approximately 66.67% and 33.33%,
respectively, of the aggregate fees payable to the Capital Market Intermediaries in total in
connection with the Global Offering.
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.
The aggregate underwriting commissions and fees together with the Stock Exchange
listing fees, the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction
levy, legal and other professional fees and printing and all other expenses relating to the Global
Offering are estimated to be approximately HK$79.9 million (assuming (i) an indicative offer
price of HK$16.18 per Offer Share (which is the mid-point of the Offer Price range), (ii) the
full payment of the discretionary incentive fee, and (iii) no exercise of the Over-allotment
Option) and will be paid by our Company.
Indemnity
The Company has agreed to indemnify the Sole Sponsor, the Sponsor-Overall
Coordinator, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers, the Capital Market Intermediaries and the Hong Kong Underwriters
for certain losses which they may suffer, including losses incurred from its performance of its
obligations under the Hong Kong Underwriting Agreement and any breach by the Company of
the Hong Kong Underwriting Agreement.
Sole Sponsor’s Fee
A fee of US$450,000 is payable by the Company as sponsor fees to the Sole Sponsor.
SOLE SPONSOR’S INDEPENDENCE
The Sole Sponsor satisfies the independence criteria set out in Rule 3A.07 of the Listing
Rules.
ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offering and the International Offering
(together, the “ Syndicate Members ”) and their affiliates may each individually undertake a
variety of activities (as further described below) which do not form part of the underwriting or
stabilizing process.
UNDERWRITING
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--- page 418 ---
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, fund management, trading, hedging, investing
and other activities for their own account and for the account 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 transactions with those buyers and sellers in a principal capacity, securities
investment and trading in the H Shares, and entering into over the counter or listed derivative
transactions or listed and unlisted securities transactions (including issuing securities such as
derivative warrants listed on a stock exchange) which have as their underlying assets, assets
including the H Shares. Those activities may require hedging activity by those entities
involving, directly or indirectly, the buying and selling of the H Shares. All such activity could
occur in Hong Kong and elsewhere in the world and may result in the Syndicate Members and
their affiliates holding long and/or short positions in the H Shares, in baskets of securities or
indices including the H Shares, in units of funds that may purchase the H Shares, or in
derivatives related to any of the foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities
having the H Shares as their underlying securities, whether on the Stock Exchange or on any
other stock exchange, the rules of the Stock Exchange may require the issuer of those securities
(or one of its affiliates or agents) to act as a market maker or liquidity provider in the security,
and this will also result in hedging activity in the H Shares in most cases.
All such activities may occur both during and after the end of the stabilizing period
described in the section headed “Structure and Conditions of the Global Offering” in this
prospectus. Such activities may affect the market price or value of the H Shares, the liquidity
or trading volume in the H Shares and the volatility of the price of the H Shares, and the extent
to which this occurs from day to day cannot be estimated.
It should be noted that when engaging in any of these activities, the Syndicate Members
will be subject to certain restrictions, including the followings:
(a) the Syndicate Members and their respective affiliates (other than the Stabilizing
Manager or any person acting for it) must not, in connection with the distribution of
the Offer Shares, effect any transactions (including issuing or entering into any
option or other derivative transactions relating to the Offer Shares), whether in the
open market or otherwise, with a view to stabilizing or maintaining the market price
of any of the Offer Shares at levels other than those which might otherwise prevail
in the open market; and
(b) the Syndicate Members and their respective affiliates 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.
UNDERWRITING
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--- page 419 ---
Certain of the Syndicate Members or their respective affiliates have provided from time
to time, and expect to provide in the future, investment banking and other services to the
Company and each of their affiliates for which such Syndicate Members or their respective
affiliates have received or will receive customary fees and commissions.
In addition, the Syndicate Members or their respective affiliates may provide financing to
investors to finance their subscriptions of Offer Shares in the Global Offering.
UNDERWRITING
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--- page 420 ---
THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering. The Global Offering comprises:
(a) the Hong Kong Public Offering of 9,678,000 H Shares (subject to adjustment as
mentioned below) in Hong Kong as described below in the section headed “The
Hong Kong Public Offering”; and
(b) the International Offering of an aggregate of 87,102,000 H Shares (subject to
adjustment and the Over-allotment Option as mentioned below) outside the United
States in offshore transactions in accordance with Regulation S.
Investors may apply for Hong Kong Offer Shares under the Hong Kong Public Offering
or apply for or indicate an interest for International Offer Shares under the International
Offering, but may not do both.
The Offer Shares will represent approximately 10.00% of the enlarged issued share
capital of the Company immediately after completion of the Global Offering, assuming the
Over-allotment Option is not exercised and no A shares are issued pursuant to the exercise of
the 2025 Share Option Scheme. If the Over-allotment Option is exercised in full, the Offer
Shares will represent approximately 11.33% of the enlarged issued share capital of the
Company immediately after the completion of the Global Offering.
References in this prospectus to applications, application monies or the procedure for
application relate solely to the Hong Kong Public Offering.
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares Initially Offered
We are initially offering 9,678,000 Shares for subscription by the public in Hong Kong
at the Offer Price, representing 10% of the total number of Offer Shares initially available
under the Global Offering. 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 1.00% of the Company’s enlarged issued share capital immediately after
completion of the Global Offering (assuming that the Over-allotment Option is not exercised
and options granted under the 2025 Share Option Scheme are not exercised).
The Hong Kong Public Offering is open to members of the public in Hong Kong as well
as to institutional and professional investors. Professional investors generally include brokers,
dealers, companies (including fund managers) whose ordinary business involves dealing in
shares and other securities and corporate entities which regularly invest in shares and other
securities.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 421 ---
Completion of the Hong Kong Public Offering is subject to the conditions as set out in
“— Conditions of the Global Offering.”
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 that he and any person(s) for
whose benefit he is making the application has not applied for or taken up, or indicated an
interest for, and will not apply for or take up, or indicate an interest for, any International Offer
Shares under the International Offering, and such applicant’s application under the
International Offering is liable to be rejected if the said undertaking and/or confirmation is
breached and/or untrue (as the case may be).
The listing of the H Shares on the Stock Exchange is sponsored by the Sole Sponsor.
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the maximum Offer Price of HK$17.00 per Hong Kong Offer
Share in addition to the brokerage, the SFC transaction levy, the AFRC transaction levy and the
Stock Exchange trading fee payable on each Hong Kong Offer Share. If the Offer Price, as
finally determined in the manner described in “— Pricing and Allocation” below, is less than
the maximum Offer Price of HK$17.00 per Offer Share, appropriate refund payments
(including the brokerage, the SFC transaction levy, the AFRC transaction levy and the Stock
Exchange trading fee attributable to the surplus application monies) will be made to successful
applicants, without interest. For further details, see “How to Apply for the Hong Kong Offer
Shares” in this prospectus.
THE INTERNATIONAL OFFERING
The International Offering will consist of an initial offering of 87,102,000 Offer Shares,
representing 90% of the total number of Offer Shares initially available under the Global
Offering and approximately 9.00% of the Company’s enlarged issued share capital immediately
after completion of the Global Offering (assuming that the Over-allotment Option is not
exercised and options granted under the 2025 Share Option Scheme are not exercised).
The Stabilizing Manager or its affiliates or any person acting for it may over-allocate up
to and not more than an aggregate of 14,517,000 additional Offer Shares, which is 15% of the
Offer Shares initially available under the Global Offering, and cover such over-allocations by
(among other methods) exercising the Over-allotment Option in full or in part or by using
Shares purchased by the Stabilizing Manager, its affiliates or any person acting for it in the
secondary market at prices that do not exceed the Offer Price or a combination of these means.
The Sponsor-Overall Coordinator (for itself and on behalf of the Underwriters) may
require any investor who has been offered Offer Shares under the International Offering and
who has made an application under the Hong Kong Public Offering, to provide sufficient
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
–4 1 1–


--- page 422 ---
information to the Sponsor-Overall Coordinator so as to allow it to identify the relevant
applications under the Hong Kong Public Offering and to ensure that they are excluded from
any application of Offer Shares under the International Offering.
Any investor who has been offered Offer Shares and has made an application under the
Hong Kong Public Offering shall provide sufficient information to the Sponsor-Overall
Coordinator so as to allow it to identify the relevant applications under the Hong Kong Public
Offering and to ensure that such investor will not apply for any Offer Shares under the Hong
Kong Public Offering.
OVER-ALLOTMENT OPTION
In connection with the Global Offering, the Company is expected to grant the
Over-allotment Option to the International Underwriters, exercisable by the Sponsor-Overall
Coordinator on behalf of the International Underwriters.
Pursuant to the Over-allotment Option, the International Underwriters have the right,
exercisable by the Sponsor-Overall Coordinator (for itself and on behalf of the International
Underwriters) at any time from the date of the International Underwriting Agreement until 30
days after the last day for lodging applications under the Hong Kong Public Offering, to require
the Company to issue up to an aggregate of 14,517,000 additional Offer Shares, representing
15% of the Offer Shares initially available under the Global Offering, at the Offer Price under
the International Offering, to solely cover over-allocations in the International Offering, if any.
We will delay delivery of the Offer Shares allocated to certain investors under the International
Offering in order to cover over-allocation of the Offer Shares before exercise of the
Over-allotment Option.
If the Over-allotment Option is exercised in full, the additional Offer Shares will
represent approximately 1.48% of our enlarged issued share capital immediately following the
completion of the Global Offering and the exercise of the Over-allotment Option. In the event
that the Over-allotment Option is exercised, an announcement will be made.
STABILIZATION
Stabilization is a practice used by underwriters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the newly
issued securities in the secondary market, during a specified period of time, to retard and, if
possible, prevent a decline in the market price of the securities below the offer price. Such
transactions may be effected in all jurisdictions where it is permissible to do so, in each case
in compliance with all applicable laws and regulatory requirements, including those of Hong
Kong. In Hong Kong, the price at which stabilization is effected is not permitted to exceed the
offer price.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 423 ---
In connection with the Global Offering, the Stabilizing Manager, its affiliates or any
person acting for it, on behalf of the Underwriters, may over-allocate or effect transactions with
a view to stabilizing or supporting the market price of our H Shares at a level higher than that
which might otherwise prevail for a limited period after the Listing Date. Any market
purchases of our H Shares will be effected in compliance with all applicable laws and
regulatory requirements. However, the Stabilizing Manager has been or will be appointed as
Stabilizing Manager for the purposes of the Global Offering in accordance with the Securities
and Futures (Price Stabilizing) Rules, as amended, under the SFO and hence, there is no
obligation on the Stabilizing Manager, its affiliates or any persons acting for it, to conduct any
such stabilizing action. Such stabilizing action, if commenced, will be conducted at the
absolute discretion of the Stabilizing Manager, its affiliates or any person acting for it and may
be discontinued at any time, and is required to be brought to an end after a limited period.
Stabilization actions permitted in Hong Kong pursuant to the Securities and Futures
(Price Stabilizing) Rules, as amended, include (i) over-allocating for the purpose of preventing
or minimizing any reduction in the market price of our H Shares, (ii) selling or agreeing to sell
our H Shares so as to establish a short position in them for the purpose of preventing or
minimizing any reduction in the market price of our H Shares, (iii) purchasing or subscribing
for, or agreeing to purchase or subscribe for, our H Shares pursuant to the Over-allotment
Option in order to close out any position established under (i) or (ii) above, (iv) purchasing,
or agreeing to purchase, any of our Offer Shares for the sole purpose of preventing or
minimizing any reduction in the market price of our H Shares, (v) selling or agreeing to sell
any H Shares in order to liquidate any position established as a result of those purchases and
(vi) offering or attempting to do anything as described in (ii), (iii), (iv) or (v).
Specifically, prospective applicants for and investors in the Offer Shares should note that:
 the Stabilizing Manager, its affiliates or any person acting for it, may, in connection
with the stabilizing action, maintain a long position in our H Shares;
 there is no certainty as to the extent to which and the time or period for which the
Stabilizing Manager, its affiliates or any person acting for it, will maintain such a
long position;
 liquidation of any such long position by the Stabilizing Manager, its affiliates or any
person acting for it and selling in the open market, may have an adverse impact on
the market price of our H Shares;
 no stabilizing action can be taken to support the price of our H Shares for longer
than the stabilization period which will begin on the Listing Date, and is expected
to expire on Friday, April 3, 2026, being the 30th day after the last date for lodging
applications under the Hong Kong Public Offering. After this date, when no further
stabilizing action may be taken, demand for our H Shares, and therefore the price of
our H Shares, could fall;
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 424 ---
 the price of our H Shares cannot be assured to stay at or above the Offer Price by
the taking of any stabilizing action; and
 stabilizing bids or transactions effected in the course of the stabilizing action may
be made at any price at or below the Offer Price and can, therefore, be done at a
price below the price paid by applicants for, or investors in, acquiring the Offer
Shares.
In order to effect stabilization actions, the Stabilizing Manager may arrange cover of up
to an aggregate of 14,517,000 H Shares (representing up to 15% of the total number of Offer
Shares initially available under the Global Offering) or through delayed delivery arrangements
with investors who have been allocated Offer Shares in the International Offering. The delayed
delivery arrangements (if specifically agreed by an investor) relate only to the delay in the
delivery of the Offer Shares to such investor and the Offer Price for the Offer Shares allocated
to such investor will be fully paid before the Listing Date. Both the size of such cover and the
extent to which the Over-allotment Option can be exercised will depend on whether
arrangements can be made with investors such that a sufficient number of H Shares can be
delivered on a delayed basis. If no investor in the International Offering agrees to the delayed
delivery arrangements, no stabilizing actions will be undertaken by the Stabilizing Manager
and the Over-allotment Option will not be exercised.
Our Company will ensure or procure that an announcement in compliance with the
Securities and Futures (Price Stabilizing) Rules will be made within seven days of the
expiration of the stabilization period.
Over-allocation
Following any over-allocation of H Shares in connection with the Global Offering, the
Stabilizing Manager (or any person acting for it) may cover such over-allocations by, among
others, exercising the Over-allotment Option in full or in part, using H Shares purchased by the
Stabilizing Manager (or any person acting for it) in the secondary market at prices that do not
exceed the Offer Price or a combination of these means.
PRICING AND ALLOCATION
Pricing
Pricing for the Offer Shares for the purpose of the various offerings under the Global
Offering will be fixed on the Price Determination Date, which is expected to be on or before
Thursday, March 5, 2026, by agreement between the Sponsor-Overall Coordinator (for itself
and on behalf of the Underwriters) and the Company and the number of Offer Shares to be
allocated under the various offerings will be determined shortly thereafter.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 414 –


--- page 425 ---
The Offer Price per Hong Kong Offer Share under the Hong Kong Public Offering will
be identical to the Offer Price per International Offer Share under the International Offering
based on the Hong Kong dollar price per International Offer Share under the International
Offering, as determined by the Sponsor-Overall Coordinator (for itself and on behalf of the
Hong Kong Underwriters) and the Company. The Offer Price per Hong Kong Offer Share under
the Hong Kong Public Offering will be fixed at the Hong Kong dollar amount which, when
increased by the brokerage of 1.0%, SFC transaction levy of 0.0027%, AFRC transaction levy
of 0.00015% and Stock Exchange trading fee of 0.00565%, payable thereon, is (subject to any
necessary rounding) effectively equivalent to the Hong Kong dollar price per International
Offer Share under the International Offering. The SFC transaction levy, the AFRC transaction
levy and the Stock Exchange trading fee otherwise payable by investors in the International
Offering on International Offer Shares purchased by them will be paid by us.
The Offer Price will not be more than HK$17.00 per Offer Share and is expected to be
not less than HK$15.36 per Offer Share unless otherwise announced, as further explained
below, on the morning of the last day for lodging applications under the Hong Kong Public
Offering. Prospective investors should be aware that the Offer Price to be determined on the
Price Determination Date may be, but is not expected to be, lower than the indicative Offer
Price range stated in this prospectus.
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 Sponsor-Overall Coordinator (for itself and on behalf of the Underwriters) may,
where considered appropriate, based on the level of interest expressed by prospective
professional, institutional and other investors during the book-building process, and with the
consent of the Company, reduce the number of Offer Shares or the indicative Offer Price range
below that stated in this prospectus at any time on or prior to the morning of the last day for
lodging applications under the Hong Kong Public Offering. In such a case, the Company will,
as soon as practicable following the decision to make such reduction, and in any event not later
than the morning of the last day for lodging applications under the Hong Kong Public Offering,
cause there to be published on the website of the Company ( www.estun.com ) and the website
of the Stock Exchange ( www.hkexnews.hk ) notices of the reduction in the number of Offer
Shares or the indicative Offer Price range. The Company will also, as soon as practicable
following the decision to make such change, issue a supplemental prospectus updating
investors of the change in the number of Offer Shares being offered under the Global Offering
and/or the Offer Price. The Global Offering must first be canceled and subsequently relaunched
on FINI pursuant to the supplemental prospectus. Upon the issue of such a notice and
supplemental prospectus, the revised number of Offer Shares and/or the Offer Price range will
be final and conclusive and the Offer Price, if agreed upon by the Sponsor-Overall Coordinator
(for itself and on behalf of the Underwriters) and the Company, will be fixed within such
revised Offer Price range.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 415 –


--- page 426 ---
Before submitting applications for the Hong Kong Offer Shares, applicants should have
regard to the possibility that any announcement of a reduction in the number of Offer Shares
or the indicative Offer Price range may not be made until the day which is the last day for
lodging applications under the Hong Kong Public Offering. Such notice will also include such
information as agreed with the Stock Exchange which may change materially as a result of any
such reduction. In the absence of any such notice of reduction published as described in this
paragraph, the number of Offer Shares will not be reduced and/or the Offer Price, if agreed
upon with the Company and the Sponsor-Overall Coordinator (for itself and on behalf of the
Underwriters), will under no circumstances be set outside the Offer Price range as stated in this
prospectus.
Announcement of Final Pricing of the Offer Shares
The Offer Price for H Shares under the Global Offering is expected to be announced on
Friday, March 6, 2026. The level of indications of interest in the Global Offering, the level of
applications and the basis of allotment of Hong Kong Offer Shares available under the Hong
Kong Public Offering, are expected to be announced on Friday, March 6, 2026 on the website
of the Company ( www.estun.com ) and the website of the Stock Exchange
(www.hkexnews.hk ).
Allocation
Allocation under the Hong Kong Public Offering
Allocation of Hong Kong Offer Shares to investors under the Hong Kong Public Offering
will be based solely on the level of valid applications received under the Hong Kong Public
Offering. The basis of allocation may vary, depending on the number of Hong Kong Offer
Shares validly applied for by applicants. Such allocation could, where appropriate, consist of
balloting, which would mean that some applicants may receive a higher allocation than others
who have applied for the same number of Hong Kong Offer Shares, and those applicants who
are not successful in the ballot may not receive any Hong Kong Offer Shares.
The total number of Hong Kong Offer Shares available under the Hong Kong Public
Offering (subject to the reallocation of the Offer Shares between the Hong Kong Public
Offering and the International Offering referred to below) is to be divided equally into two
pools (to the nearest board lot) for allocation purposes (with any odd board lots being allocated
to pool A): pool A and pool B. The Hong Kong Offer Shares in pool A will be allocated on an
equitable basis to applicants who have applied for Hong Kong Offer Shares with an aggregate
subscription price of HK$5 million (excluding the brokerage, the SFC transaction levy, the
AFRC transaction levy and the Stock Exchange trading fee payable) or less. The Hong Kong
Offer Shares in pool B will be allocated on an equitable basis to applicants who have applied
for Hong Kong Offer Shares with an aggregate subscription price of more than HK$5 million
(excluding the brokerage, the SFC transaction levy, the AFRC transaction levy and the Stock
Exchange trading fee payable) and up to the total value of pool B.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 416 –


--- page 427 ---
Investors should be aware that applications in pool A and applications in pool B may
receive different allocation ratios. If 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 that other pool and be allocated accordingly. For the purpose of this
paragraph only, the “price” for Hong Kong Offer Shares means the price payable on application
therefor (without regard to the Offer Price as finally determined). Applicants can only 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 and any application for more than 4,839,000 Offer
Shares, being the number of Hong Kong Offer Shares initially allocated to each pool and
representing 50% of the 9,678,000 Hong Kong Offer Shares initially available under the Hong
Kong Public Offering, are to be rejected.
Allocation under the International Offering
The International Offering will include selective marketing of International Offer Shares
to institutional and professional investors and other investors anticipated to have a sizeable
demand for such International Offer Shares in Hong Kong and other jurisdictions outside the
United States in offshore transactions in reliance on Regulation S. Professional investors
generally include brokers, dealers, companies (including fund managers) whose ordinary
business involves dealing in shares and other securities and corporate entities which regularly
invest in shares and other securities. Allocation of International Offer Shares pursuant to the
International Offering will be effected in accordance with the “book-building” process
described in “— Pricing and Allocation” above and based on a number of factors, including the
level and timing of demand, the total size of the relevant investor’s invested assets or equity
assets in the relevant sector and whether or not it is expected that the relevant investor is likely
to hold or sell its H Shares, after the Listing. Such allocation is intended to result in a
distribution of our H Shares on a basis which would lead to the establishment of a solid
professional and institutional shareholder base for the benefit of the Company and its
Shareholders as a whole.
The Sponsor-Overall Coordinator (for itself and on behalf of the Underwriters) may
require any investor who has been offered 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 Sponsor-Overall Coordinator so as to allow it to identify the
relevant application under the Hong Kong Public Offering and to ensure that it is excluded
from any application of Offer Shares under the Hong Kong Public Offering.
Reallocation
The Sponsor-Overall Coordinator may allocate Offer Shares from the International
Offering to the Hong Kong Public Offering to satisfy valid applications under the Hong Kong
Public Offering.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 428 ---
The Sponsor-Overall Coordinator may in their sole discretion reallocate Offer Shares
from the International Offering to the Hong Kong Public Offering to satisfy valid applications
under the Hong Kong Public Offering. In particular, if (i) the International Offering is not fully
subscribed and the Hong Kong Public Offering is fully subscribed or oversubscribed where
initial allocation to Hong Kong Public Offering is less than 15%; or (ii) the International
Offering is fully subscribed or oversubscribed and the Hong Kong Public Offering is fully
subscribed or oversubscribed where initial allocation to Hong Kong Public Offering is less than
15%, the Sponsor-Overall Coordinator has the authority to reallocate International Offer
Shares originally included in the International Offering to the Hong Kong Public Offering in
such number as they deem appropriate, provided that in accordance with Chapter 4.14 of the
Guide, the number of International Offer Shares reallocated to the Hong Kong Public Offering
should not exceed 4,839,000 Shares, increasing the total number of Offer Shares available
under the Hong Kong Public Offering to 14,517,000 Shares, representing approximately 15%
of the number of the Offer Shares initially available under the Global Offering and the final
Offer Price shall be fixed at the bottom end of the indicative price range (i.e. HK$15.36 per
Offer Share).
In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering
will be allocated between pool A and pool B and the number of Offer Shares allocated to the
International Offering will be correspondingly reduced in such manner as the Sponsor-Overall
Coordinator deems appropriate.
If the Hong Kong Public Offering is not fully subscribed, the Sponsor-Overall
Coordinator has the authority to reallocate all or any unsubscribed Hong Kong Offer Shares to
the International Offering, in such proportions as the Sponsor-Overall Coordinator deem
appropriate.
However, if neither the Hong Kong Public Offering nor the International Offering is fully
subscribed, the Global Offering will not proceed unless the Underwriters would subscribe for
or procure subscribers to subscribe for respective applicable proportions of the Offer Shares
being offered which are not taken up under the Global Offering on the terms and conditions of
this prospectus and the Underwriting Agreements.
Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and the
International Offering follows the provision of Paragraph 4.2(b) of Practice Note 18 of the
Listing Rules, no mandatory clawback or reallocation mechanism is required to increase the
number of Offer Shares under the Hong Kong Public Offering to a certain percentage of the
total number of Offer Shares offered under the Global Offering.
Details of any reallocation of Offer Shares between the Hong Kong Public Offering and
the International Offering will be disclosed in the results announcement of the Global Offering,
which is expected to be published on Friday, March 6, 2026.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 418 –


--- page 429 ---
UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms and conditions of the Hong Kong Underwriting Agreement and is subject to,
among other things, the Sponsor-Overall Coordinator (for itself and on behalf of the
Underwriters) and our Company agreeing on the Offer Price.
Our Company expects to enter into the International Underwriting Agreement relating to
the International Offering on or around the Price Determination Date.
These underwriting arrangements, including the Underwriting Agreements, are
summarized in “Underwriting” in this prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares will be conditional on:
(a) the Listing Committee granting approval for the listing of, and permission to deal in,
the H Shares to be issued pursuant to the Global Offering (including H Shares that
may be issued pursuant to the exercise of the Over-allotment Option) and the
approval for such listing and permission not subsequently having been revoked prior
to the Listing Date;
(b) the Offer Price being duly agreed between the Sponsor-Overall Coordinator (for
itself and on behalf of the Hong Kong Underwriters) and the Company on or before
the Price Determination Date;
(c) the execution and delivery of the International Underwriting Agreement on or before
the Price Determination Date; and
(d) the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting
Agreement and the obligations of the International Underwriters under the
International Underwriting Agreement becoming and remaining unconditional and
not having been terminated in accordance with the terms of the respective
agreements,
in each case on or before the dates and times specified in the Hong Kong Underwriting
Agreement or the International Underwriting Agreement (unless and to the extent such
conditions are validly waived on or before such dates and times) and in any event not later than
the date which is 30 days after the date of this prospectus.
If, for any reason, the Offer Price is not agreed between the Sponsor-Overall Coordinator
(for itself and on behalf of the Hong Kong Underwriters) and the Company on or before the
Thursday, March 5, 2026 on Price Determination Date, the Global Offering will not proceed
and will lapse.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 419 –


--- page 430 ---
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 their respective terms.
If the above conditions are not fulfilled or waived prior to the times and dates specified,
the Global Offering will lapse and the Stock Exchange will be notified immediately. Notice of
the lapse of the Hong Kong Public Offering will be published on the website of the Company
(www.estun.com ) and the website of the Stock Exchange ( www.hkexnews.hk ) on the next day
following such lapse. In such eventuality, all application monies will be returned, without
interest, on the terms set out in the section headed “How to Apply for the Hong Kong Offer
Shares — D. Despatch/Collection of H 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) (as amended).
DEALING ARRANGEMENT
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00
a.m. in Hong Kong on Monday, March 9, 2026, it is expected that dealings in our H Shares on
the Stock Exchange will commence at 9:00 a.m. on Monday, March 9, 2026. Our H Shares will
be traded in board lots of 200 H Shares each. The stock code of the H Shares is 2715.
H Share certificates issued in respect of the Offer Shares will only become valid evidence
of title at 8:00 a.m. on Monday, March 9, 2026 provided that (i) the Global Offering has
become unconditional in all respects and (ii) the right of termination as described in the section
headed “Underwriting — Underwriting Arrangements and Expenses — Hong Kong Public
Offering — Grounds for Termination” in this prospectus has not been exercised. Investors who
trade H Shares prior to the receipt of H Share certificates or prior to the H Share certificates
becoming valid evidence of title do so entirely at their own risk.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
– 420 –


--- page 431 ---
IMPORTANT NOTICE TO INVESTORS OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing Information”
section, and our website at www.estun.com .
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
 are 18 years of age or older;
 have a Hong Kong address (for the White Form eIPO service only); and
 are outside the United States (within the meaning of Regulation S) or are a person
described in paragraph (h)(3) of Rule 902 of Regulation S.
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange to our Company, 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 of our Company;
 are a Director or chief executive of our Company and/or a director or chief executive
of any of its subsidiaries;
 are a close associate (as defined in the Listing Rules) of any of the above persons;
 are a connected person (as defined in the Listing Rules) of our Company or will
become a connected person of our Company immediately upon the completion of the
Global Offering; or
 have been allocated or have applied for or indicated an interest in any International
Offer Shares or otherwise participate in the International Offering.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
– 421 –


--- page 432 ---
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Friday, February
27, 2026 and end at 12:00 noon on Wednesday, March 4, 2026 (Hong Kong time).
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application Channel Platform Target Investors Application Time
White Form eIPO
service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
www.eipo.com.hk Investors who would like
to receive a physical H
Share certificate. Hong
Kong Offer Shares
successfully applied for
will be allotted and
issued in your own
name.
From 9:00 a.m. on Friday,
February 27, 2026 to
11:30 a.m. on
Wednesday, March 4,
2026, Hong Kong time.
The latest time for
completing full payment
of application monies
will be 12:00 noon on
Wednesday, March 4,
2026, Hong Kong time.
HKSCC EIPO channel /H1118/H1118Y our broker or custodian
who is a HKSCC
Participant will submit
electronic application
instructions on your
behalf through
HKSCC’s FINI system
in accordance with your
instruction
Investors who would not
like to receive a
physical H Share
certificate. Hong Kong
Offer Shares
successfully applied for
will be allotted and
issued in the name of
HKSCC Nominees,
deposited directly into
CCASS and credited to
your designated
HKSCC Participant’s
stock account.
Contact your broker or
custodian for the
earliest and latest time
for giving such
instructions, as this may
vary by broker or
custodian.
The White Form eIPO service and the HKSCC EIPO channel are facilities subject to
capacity limitations and potential service interruptions and you are advised not to wait until the
last day of the application period to apply for Hong Kong Offer Shares.
For those applying through the White Form eIPO service, once you complete payment
in respect of any application instructions given by you or for your benefit through the White
Form eIPO service to make an application for Hong Kong Offer Shares, an actual application
shall be deemed to have been made. If you are a person for whose benefit the electronic
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
– 422 –


--- page 433 ---
application instructions are given, you shall be deemed to have declared that only one set of
electronic application instructions has been given for your benefit. If you are an agent for
another person, you shall be deemed to have declared that you have only given one set of
electronic application instructions for the benefit of the person for whom you are an agent
and that you are duly authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under the White Form eIPO
service more than once and obtaining different payment reference numbers without effecting
full payment in respect of a particular reference number will not constitute an actual
application.
If you apply through the White Form eIPO service, you are deemed to have authorized
the White Form eIPO Service Provider to apply on the terms and conditions in this
prospectus, as supplemented and amended by the terms and conditions of the White Form
eIPO service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on your
behalf through the HKSCC EIPO channel, you (and, if you are joint applicants, each of you
jointly and severally) are deemed to have instructed and authorized HKSCC to cause HKSCC
Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong Kong
Offer Shares on your behalf and to do on your behalf all the things stated in this prospectus
and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be deemed
to have been made for any application instructions given by you or for your benefit to HKSCC
(in which case an application will be made by HKSCC Nominees on your behalf) provided such
application instruction has not been withdrawn or otherwise invalidated before the closing time
of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken by
HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any
breach of the terms and conditions of this prospectus.
3. Information Required to Apply
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 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
 Full name(s) 2 as shown on your
identity document
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
– 423 –


--- page 434 ---
For Individual/Joint Applicants For Corporate Applicants
 Identity document’s issuing country
or jurisdiction /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order of
priority: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
 Identity document type, with order of
priority:
i. HKID card; or /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118i. LEI registration document; or
ii. National identification
document; or /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
ii. Certificate of incorporation; or
iii. Passport; and /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118iii. Business registration certificate;
or
 Identity document number /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118iv. Other equivalent document; and
 Identity document number
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. The number of joint applicants may not exceed four. If you are a firm, the applicant must be in
the individual members’ names.
2. The applicant’s full name as shown on their identity document must be used 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
Hong Kong Offer Shares. Similarly for corporate applicants, a LEI number must be used if an entity has
a LEI certificate.
3. If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will
be required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID
of the asset management company or the individual fund, as appropriate, which has opened a trading
account with the broker will be required, as above.
4. The maximum number of joint account holders on FINI is capped at 4 in accordance with market
practice. The maximum number is subject to change, if the Company’s Articles of Association and
applicable company law prescribe a lower cap.
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.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
– 424 –


--- page 435 ---
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 Sponsor-Overall Coordinator, as our agent, have discretion to
consider whether to accept it on any conditions we think fit, including evidence of the
attorney’s authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118200 H Shares
Permitted number of Hong Kong
Offer Shares for application
and amount payable on
application/successful
allotment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hong Kong Offer Shares are available for
application in specified board lot sizes only.
Please refer to the amount payable associated with
each specified board lot size in the table below.
The maximum Offer Price is HK$17.00 per H
Share. If you are applying through the HKSCC
EIPO channel, your broker or custodian may
require you to pre-fund your application in such
amount as determined by the broker or custodian,
based on the applicable laws and regulations in
Hong Kong. Y ou are responsible for complying
with any such pre-funding requirement imposed
by your broker or custodian with respect to the
Hong Kong Offer Shares you applied for.
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By instructing your broker or custodian to apply
for the Hong Kong Offer Shares on your behalf
through the HKSCC EIPO channel, you (and, if
you are joint applicants, each of you jointly and
severally) are deemed to have instructed and
authorized HKSCC to cause HKSCC Nominees
(acting as nominee for the relevant HKSCC
Participants) to arrange payment of the final Offer
Price, brokerage, SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction
levy by debiting the relevant nominee bank
account at the Designated Bank for your broker or
custodian.
If you are applying through the White Form
eIPO service, you may refer to the table below for
the amount payable for the number of H Shares
you have selected. Y ou must pay the respective
maximum amount payable on application in full
upon application for Hong Kong Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
200 3,434.29 3,000 51,514.34 40,000 686,857.80 500,000 8,585,722.50
400 6,868.57 4,000 68,685.78 50,000 858,572.26 600,000 10,302,867.00
600 10,302.88 5,000 85,857.23 60,000 1,030,286.70 700,000 12,020,011.50
800 13,737.16 6,000 103,028.66 70,000 1,202,001.16 800,000 13,737,156.00
1,000 17,171.45 7,000 120,200.11 80,000 1,373,715.60 900,000 15,454,300.50
1,200 20,605.73 8,000 137,371.55 90,000 1,545,430.06 1,000,000 17,171,445.00
1,400 24,040.02 9,000 154,543.00 100,000 1,717,144.50 1,500,000 25,757,167.50
1,600 27,474.31 10,000 171,714.46 200,000 3,434,289.00 2,000,000 34,342,890.00
1,800 30,908.61 20,000 343,428.90 300,000 5,151,433.50 3,000,000 51,514,335.00
2,000 34,342.89 30,000 515,143.36 400,000 6,868,578.00 4,839,000
(1) 83,092,622.35
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of the brokerage, the SFC transaction levy, the Stock Exchange trading fee
and the 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).
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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.” If you are suspected of submitting or cause
to submit more than one application, all of your applications will be rejected.
Multiple applications made either through (i) the White Form eIPO service, (ii) HKSCC
EIPO channel, or (iii) both channels concurrently are prohibited and will be rejected. If you
have made an application through the White Form eIPO service or HKSCC EIPO channel,
you or the person(s) for whose benefit you have made the application shall not apply further
for any Offer Shares in the Global Offering.
6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the following
things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorise us and/or the
Sponsor-Overall Coordinator, as our agents, to execute any documents for you and
to do on your behalf all things necessary to register any Hong Kong Offer Shares
allocated to you in your name or in the name of HKSCC Nominees as required by
the Articles of Association, and (if you are applying through the HKSCC EIPO
channel) to deposit the allotted Hong Kong Offer Shares directly into CCASS for the
credit of your designated HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the White Form
eIPO service (or as the case may be, the agreement you entered into with your
broker or custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong
Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
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(v) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
(vi) agree that the Relevant Persons, the H Share Registrar and HKSCC will not be liable
for any information and representations not in this prospectus and any supplement
to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit
you have made the application to us, the Relevant Persons, the H Share Registrar,
HKSCC, HKSCC Nominees, the Stock Exchange, the SFC and any other statutory
regulatory or governmental bodies or otherwise as required by laws, rules or
regulations, for the purposes under the paragraph headed “— G. Personal Data —
3. Purposes” and “— G. Personal Data — 4. Transfer of personal data”;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees’ application) has been
accepted) that you will not rescind it because of an innocent misrepresentation;
(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”;
(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”;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it
and the resulting contract will be governed by and construed in accordance with the
laws of Hong Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any
place outside Hong Kong that apply to your application and that neither we nor the
Relevant Persons will breach any law inside and/or outside Hong Kong as a result
of the acceptance of your offer to purchase, or any action arising from your rights
and obligations under the terms and conditions contained in this prospectus;
(xiii) on firm that (a) your application or HKSCC Nominees’ application on your behalf
is not financed directly or indirectly by the Company, any of the directors, or chief
executives, substantial Shareholder(s) or existing shareholder(s) of the Company or
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 439 ---
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, or 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 Sponsor-Overall Coordinator will rely
on your declarations and representations in deciding whether or not to allocate any
Hong Kong Offer Shares to you and that you may be prosecuted for making a false
declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated
to you under the application;
(xvii) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(xviii) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirectly or through the application channel of
the White Form eIPO Service Provider or by any one as your agent or by any other
person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as agent
for that person by giving electronic application instructions to HKSCC and the
White Form eIPO Service Provider and (2) you have due authority to give
electronic application instructions on behalf of that other person as its agent.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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B. PUBLICATION OF RESULTS
1. Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through the White Form eIPO service or HKSCC EIPO channel:
Website /H1118/H1118/H1118/H1118The designated results of allocation at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ) with
a “search by ID Number” function.
24 hours, from 11:00 p.m. on Friday, March
6, 2026 to 12:00 midnight on Thursday,
March 12, 2026 (Hong Kong 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.estun.com which will provide links
to the above mentioned websites of the H
Share Registrar.
No later than 11:00 p.m. on Friday, March
6, 2026 (Hong Kong time)
Telephone /H1118/H1118/H1118+852 2862 8555 — the allocation results
telephone enquiry line provided by the H
Share Registrar.
between 9:00 a.m. and 6:00 p.m., from
Monday, March 9, 2026 to Thursday,
March 12, 2026 (Hong Kong time) on a
business day
For those applying through HKSCC EIPO channel, you may also check with your broker
or custodian from 6:00 p.m. on Thursday, March 5, 2026 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Thursday, March 5, 2026 (Hong Kong time) on a 24-hour basis and should report any
discrepancies on allotments to HKSCC as soon as practicable.
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2. Allocation Announcement
We expect to announce the results of the final Offer Price, the level of indications of
interest in the International Offering, the level of applications in the Hong Kong Public
Offering and the basis of allocations of Hong Kong Offer Shares on the Stock Exchange’s
website at www.hkexnews.hk and our website at www.estun.com by no later than 11:00 p.m.
on Friday, March 6, 2026 (Hong Kong 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 Sponsor-Overall Coordinator, 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. Application for Hong Kong Offer Shares — 5. Multiple
Applications Prohibited” on what constitutes multiple applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 442 ---
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Sponsor-Overall Coordinator believe that by accepting your application,
it or we would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the Receiving
Bank will collect the portion of these funds required to settle each HKSCC Participant’s actual
Hong Kong Offer Share allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in
settling payment for your allotted shares, HKSCC will contact the defaulting HKSCC
Participant and its Designated Bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Offer Shares will be reallocated to the Global Offering. Hong Kong Offer Shares
applied for by you through the broker or custodian may be affected to the extent of the
settlement failure. In the extreme case, you will not be allocated any Hong Kong Offer Shares
due to the money settlement failure by such HKSCC Participant. None of us, the Relevant
Persons, the H Share Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are
not allocated to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one H Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the H Share certificates will be deposited into CCASS as
described below).
No temporary document of title will be issued in respect of the H Shares. No receipt will
be issued for sums paid on application.
H Share certificates will only become valid evidence of title at 8:00 a.m. on Monday,
March 9, 2026 (Hong Kong time), provided that the Global Offering has become unconditional
and the right of termination described in the section headed “Underwriting” in this prospectus
has not been exercised. Investors who trade H Shares prior to the receipt of H Share certificates
or the H Share certificates becoming valid do so entirely at their own risk.
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The right is reserved to retain any H Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of H
Share certificate 1 /H1118/H1118/H1118/H1118
Collection in person from H Share
Registrar, Computershare Hong
Kong Investor Services Limited at
Shops 1712-1716, 17th Floor,
Hopewell Centre, 183 Queen’s
Road East, Wan Chai, Hong Kong.
H Share certificate(s) will be issued
in the name of HKSCC Nominees,
deposited into CCASS and credited
to your designated HKSCC
Participant’s stock account.
For physical share
certificates of
1,000,000 or
more Offer Shares
issued under your
own name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Time: 9:00 a.m. to 1:00 p.m. on
Monday, March 9, 2026
(Hong Kong time)
No action by you is required.
If you are an individual, you must not
authorise any other person to
collect for you. If you are a
corporate applicant, your
authorised representative must bear
a letter of authorization from your
corporation stamped with your
corporation’s chop.
Both individuals and authorised
representatives must produce, at
the time of collection, evidence of
identity acceptable to the H Share
Registrar.
Note: If you do not collect your H
Share certificate(s) personally
within the time above, it/they will
be sent to the address specified in
your application instructions by
ordinary post at your own risk.
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--- page 444 ---
White Form eIPO service HKSCC EIPO channel
For physical share
certificates of less
than 1,000,000 Offer
Shares issued under
your own name /H1118/H1118/H1118/H1118
Y our H Share certificate(s) will be
sent to the address specified in
your application instructions by
ordinary post at your own risk.
Time: Friday, March 6, 2026
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Monday, March 9, 2026 Subject to the arrangement between
you and your broker or custodian.
Responsible party /H1118/H1118/H1118/H1118/H1118H Share Registrar Y our broker or custodian
Application monies paid
through single bank
account /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
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 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Refund cheque(s) will be despatched
to the address as specified in your
application instructions by ordinary
post at your own risk.
Note:
1. Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning
and/or an “extreme conditions” announcement issued after a super typhoon in force in Hong Kong on
the business day before the Listing Date rendering it impossible for the relevant H Share certificates to
be dispatched to HKSCC in a timely manner, the Company shall procure the H Share Registrar to
arrange for delivery of the supporting documents and H Share certificates in accordance with the
contingency arrangements as agreed between them. See “— E. Bad Weather Arrangements.”
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--- page 445 ---
E. BAD WEATHER ARRANGEMENTS
1. The Opening and Closing of the Application Lists
The application lists will not open or close on Wednesday, March 4, 2026 if, there is:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 Extreme Conditions, (collectively, “ Bad Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Wednesday, March
4, 2026.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on
the next business day which does not have Bad Weather Signals in force at any time between
9:00 a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in the section headed “Expected Timetable” in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.estun.com of the revised timetable.
If a Bad Weather Signal is hoisted on Friday, March 6, 2026, the H Share Registrar will
make appropriate arrangements for the delivery of the H Share certificates to the CCASS
Depository’s service counter so that they would be available for trading on Monday, March 9,
2026.
If a Bad Weather Signal is hoisted on Friday, March 6, 2026, for physical share
certificates of less than 1,000,000 Offer Shares issued under your own name, the despatch of
physical H Share certificates will be made by ordinary post when the post office re-opens after
the Bad Weather Signal is lowered or cancelled (e.g. in the afternoon of Friday, March 6, 2026
or on Monday, March 9, 2026).
If a Bad Weather Signal is hoisted on Monday, March 9, 2026, for physical share
certificates of 1,000,000 or more Offer Shares issued under your own name, physical H Share
certificates will be available for collection in person at the H Share Registrar’s office after the
Bad Weather Signal is lowered or cancelled (e.g. in the afternoon of Monday, March 9, 2026
or on Tuesday, March 10, 2026).
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share
certificates.
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F. ADMISSION OF THE H SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the H
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement
in CCASS with effect from the date of commencement of dealings in the H Shares or any other
date HKSCC chooses. Settlement of transactions between Exchange Participants is required to
take place in CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS.
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.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the H Share Registrar, the receiving banks and the
Relevant Persons about you in the same way as it applies to personal data about applicants
other than HKSCC Nominees. This personal data may include client identifier(s) and your
identification information. By giving application instructions to HKSCC, you acknowledge
that you have read, understood and agree to all of the terms of the Personal Information
Collection Statement below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Offer Shares, of the policies and practices of the Company and the H Share
Registrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486
of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure
that personal data supplied to the Company or its agents and the H Share Registrar is accurate
and up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer
Shares into or out of their names or in procuring the services of the H Share Registrar.
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Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of the
Company or the H Share Registrar to effect transfers or otherwise render their services. It may
also prevent or delay registration or transfers of Hong Kong Offer Shares which you have
successfully applied for and/or the despatch of H Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the H Share Registrar immediately of any inaccuracies in the personal data
supplied.
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for
the following purposes:
 processing your application and refund cheque and White Form e-Refund payment
instruction(s), where applicable, verification of compliance with the terms and
application procedures set out in this prospectus and announcing results of
allocation of Hong Kong Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the H
Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the Shares and identifying any
duplicate applications for the Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the Shares, such as dividends, rights
issues, bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the H Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the H Shares and/or regulators and/or any other purposes to which
applicants and holders of the H Shares may from time to time agree.
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4. Transfer of personal data
Personal data held by the Company and the H Share Registrar relating to the applicants
for and holders of Hong Kong Offer Shares will be kept confidential but the Company and the
H Share Registrar may, to the extent necessary for achieving any of the above purposes,
disclose, obtain or transfer (whether within or outside Hong Kong) the personal data to, from
or with any of the following:
 the Company’s appointed agents such as financial advisers, receiving banks and
overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar, in each case for the purposes of providing its
services or facilities or performing its functions in accordance with its rules or
procedures and operating FINI and CCASS (including where applicants for the
Hong Kong Offer Shares request a deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the H
Share Registrar in connection with their respective business operation;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, including for the
purpose of the Stock Exchange’s administration of the Listing Rules and the SFC’s
performance of its statutory functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their bankers, solicitors, accountants or brokers
etc.
5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants and
holders of Hong Kong Offer Shares for as long as necessary to fulfil the purposes for which
the personal data were collected. Personal data which is no longer required will be destroyed
or dealt with in accordance with the Personal Data (Privacy) Ordinance (Chapter 486 of the
Laws of Hong Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether
the Company or the H Share Registrar hold their personal data, to obtain a copy of that data,
and to correct any data that is inaccurate. The Company and the H Share Registrar have the
right to charge a reasonable fee for the processing of such requests. All requests for access to
data or correction of data should be addressed to the Company and the H Share Registrar, at
their registered address disclosed in the section headed “Corporate information” in this
prospectus or as notified from time to time, for the attention of the company secretary, or the
H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
– 438 –


--- page 449 ---
The following is the text of a report set out on pages I-1 to I-93, received from the
Company’ s reporting accountants, KPMG, Certified Public Accountants, Hong Kong, for the
purpose of incorporation in this prospectus.
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF ESTUN AUTOMATION CO., LTDʮ̡AND
HUATAI FINANCIAL HOLDINGS (HONG KONG) LIMITED
Introduction
We report on the historical financial information of ESTUN AUTOMA TION CO., LTDی
ʮ̡ (the “Company”) and its subsidiaries (together, the “Group”) set
out on pages I-4 to I-93, which comprises 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 30 September 2025, and the consolidated statements of profit or loss, the
consolidated statements of profit or loss and other comprehensive income, the consolidated
statements of changes in equity and the consolidated statements of cash flows, for each of the
years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025
(the “Track Record Period”), and material accounting policy information and other explanatory
information (together, the “Historical Financial Information”). The Historical Financial
Information set out on pages I-4 to I-93 forms an integral part of this report, which has been
prepared for inclusion in the prospectus of the Company dated 27 February 2026 (the
“Prospectus”) in connection with the initial listing of H shares of the Company on the Main
Board of The Stock Exchange of Hong Kong Limited.
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of the Historical
Financial Information that gives a true and fair view in accordance with the basis of preparation
and presentation set out in Note 1 to the Historical Financial Information, and for such internal
control as the directors of the Company determine is necessary to enable the preparation of the
Historical Financial Information that is free from material misstatement, whether due to fraud
or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 “Accountants’ Reports on Historical
Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified
Public Accountants (the “HKICPA”). This standard requires that we comply with ethical
standards and plan and perform our work to obtain reasonable assurance about whether the
Historical Financial Information is free from material misstatement.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 450 ---
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 and presentation set out in Note 1 to the Historical Financial
Information in order to design procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our
work also included evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purpose of the
accountants’ report, a true and fair view of the Company’s and the Group’s financial position
as at 31 December 2022, 2023 and 2024 and 30 September 2025, and of the Group’s financial
performance and cash flows for the Track Record Period in accordance with the basis of
preparation and presentation set out in Note 1 to the Historical Financial Information.
Review of stub period corresponding financial information
We have reviewed the stub period corresponding financial information of the Group
which comprises the consolidated statement of profit or loss, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the nine months ended 30 September 2024 and
other explanatory information (the “Stub Period Corresponding Financial Information”). The
directors of the Company are responsible for the preparation and presentation of the Stub
Period Corresponding Financial Information in accordance with the basis of preparation and
presentation set out in Note 1 to the Historical Financial Information. Our responsibility is to
express a conclusion on the Stub Period Corresponding Financial Information based on our
review. We conducted our review in accordance with Hong Kong Standard on Review
Engagements 2410 “Review of Interim Financial Information Performed by the Independent
Auditor of the Entity” as issued by the HKICPA. A review consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and applying analytical
and other review procedures. A review is substantially less in scope than an audit conducted
in accordance with Hong Kong Standards on Auditing and consequently does not enable us to
obtain assurance that we would become aware of all significant matters that might be identified
in an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing has
come to our attention that causes us to believe that the Stub Period Corresponding Financial
Information, for the purpose of the accountants’ report, is not prepared, in all material respects,
in accordance with the basis of preparation and presentation set out in Note 1 to the Historical
Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 451 ---
Report on matters under the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited and the Companies (Winding Up and Miscellaneous
Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to Note 31(b) to the Historical Financial Information which contains information
about the dividends paid by the Company in respect of the Track Record Period.
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
27 February 2026
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 452 ---
HISTORICAL FINANCIAL INFORMATION
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The consolidated financial statements of the Group for the Track Record Period, on which
the Historical Financial Information is based, were audited by KPMG under separate terms of
engagement with the Company in accordance with Hong Kong Standards on Auditing issued
by the HKICPA (the “Underlying Financial Statements”).
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 453 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 3,880,779 4,651,949 4,008,772 3,370,274 3,803,570
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,604,561) (3,196,854) (2,874,742) (2,364,083) (2,732,855)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,276,218 1,455,095 1,134,030 1,006,191 1,070,715
Other net income /H1118/H1118/H1118/H1118/H11185 136,982 139,150 123,035 107,798 63,208
Selling expenses /H1118/H1118/H1118/H1118/H1118/H1118 (292,807) (399,331) (445,689) (324,136) (308,396)
Administrative expenses /H1118 (416,562) (466,358) (550,149) (381,748) (330,369)
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(307,580) (388,468) (442,233) (306,610) (318,511)
(Provision for)/reversal of
impairment loss on
trade receivables and
contract assets /H1118/H1118/H1118/H1118/H11186(c) (34,888) (29,579) (62,689) (21,603) 4,813
Impairment loss on
intangible assets and
goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(c) – – (360,467) – –
Profit/(loss) from
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118361,363 310,509 (604,162) 79,892 181,460
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(a) (93,990) (130,538) (154,193) (103,909) (119,487)
Share of profits less
losses of associates /H1118/H1118/H1118 (3,765) (12,434) (17,169) (12,875) (2,143)
Profit/(loss) before
taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 263,608 167,537 (775,524) (36,892) 59,830
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 (80,049) (33,910) (42,161) (25,267) (30,130)
Profit/(loss) for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118 183,559 133,627 (817,685) (62,159) 29,700
Attributable to:
Equity shareholders of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118166,780 135,672 (810,929) (67,119) 25,372
Non-controlling interests /H1118 16,779 (2,045) (6,756) 4,960 4,328
Profit/(loss) for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118 183,559 133,627 (817,685) (62,159) 29,700
Earnings/(loss) per
share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810
Basic and diluted (RMB) /H1118 0.19 0.16 (0.94) (0.08) 0.03
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 454 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit/(loss) for the year/period /H1118/H1118 183,559 133,627 (817,685) (62,159) 29,700----- ----- ----- ----- -----
Other comprehensive income for
the year/period (after tax and
reclassification adjustments)
Item that will not be reclassified to
profit or loss:
Equity investments at fair value
through other comprehensive
income (“FVOCI”) – net
movement in fair value
reserves (non-recycling) /H1118/H1118/H1118/H11184,676 5,849 21,297 – (16,166)
Items that are or may be
reclassified subsequently to
profit or loss:
Remeasurement of net defined
benefit plan obligations of
overseas entities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,307 3,367 (8,403) – (10,239)
Exchange differences on
translation of financial
statements of overseas entities /H1118 (9,397) 19,741 (70,476) 840 138,843
Other comprehensive income for
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,586 28,957 (57,582) 840 112,438-----
----- ----- ----- -----
Total comprehensive income for
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,145 162,584 (875,267) (61,319) 142,138
Attributable to:
Equity shareholders of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118218,075 164,449 (868,511) (66,279) 137,810
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H111824,070 (1,865) (6,756) 4,960 4,328
Total comprehensive income for
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,145 162,584 (875,267) (61,319) 142,138
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 455 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
As at
30 September
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H111811 916,167 1,321,846 1,513,277 1,554,716
Investment property /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 – – – 52,826
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 226,767 241,468 267,756 247,906
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 455,064 553,358 560,502 560,509
Goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 1,485,681 1,485,681 1,104,079 1,044,588
Interests in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 52,565 85,324 46,308 263,858
Financial assets measured at FVOCI /H1118 17 134,480 141,440 180,208 173,261
Financial assets measured at fair
value through profit or loss
(“FVPL”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 262,214 291,572 213,732 221,182
Trade and other receivables /H1118/H1118/H1118/H1118/H1118/H111821 58,117 61,454 18,652 28,967
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828(b) 175,854 206,619 172,630 130,997
3,766,909 4,388,762 4,077,144 4,278,810------- ------- ------- -------
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 1,130,490 1,340,221 1,721,045 1,446,241
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820(a) 121,414 203,712 168,646 229,697
Trade and other receivables /H1118/H1118/H1118/H1118/H1118/H111821 1,920,889 2,454,865 2,557,475 2,812,345
Income tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828(a) 14,532 30,724 30,740 22,947
Financial assets measured at FVPL /H1118/H1118 18 578,115 435,820 388,913 170,136
Restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(a) 49,972 31,142 15,832 51,291
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H111822(a) 668,322 1,196,253 1,181,104 1,121,966
4,483,734 5,692,737 6,063,755 5,854,623------- ------- ------- -------
Current liabilities
Trade and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 1,582,591 2,299,421 2,555,557 2,658,426
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820(b) 249,105 297,507 505,014 520,383
Bank loans and other borrowings /H1118/H1118/H111824 1,453,271 2,404,602 2,929,370 2,811,806
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 13,517 12,522 20,120 17,864
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828(a) 19,373 10,541 2,271 16,836
3,317,857 5,024,593 6,012,332 6,025,315-------
------- ------- -------
Net current assets/(liabilities) /H1118/H1118/H1118/H1118 1,165,877 668,144 51,423 (170,692)------- ------- ------- -------
Total assets less current liabilities /H1118 4,932,786 5,056,906 4,128,567 4,108,118------- ------- ------- -------
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 456 ---
As at 31 December
As at
30 September
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current liabilities
Bank loans and other borrowings /H1118/H1118/H111824 1,430,092 1,809,984 1,792,601 1,624,891
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 54,772 43,005 67,300 64,265
Defined benefit plan obligations /H1118/H1118/H111826 190,619 198,964 201,582 236,510
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 59,726 49,775 68,055 97,765
Provisions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 34,156 37,716 37,144 65,752
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828(b) 82,077 93,086 66,795 32,703
Other non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118 11,438 2,362 2,388 2,483
1,862,880 2,234,892 2,235,865 2,124,369------- ------- ------- -------
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,069,906 2,822,014 1,892,702 1,983,749
CAPITAL AND RESERVES
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(c) 869,115 869,531 869,531 871,018
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,904,847 1,829,081 919,001 1,069,774
Total equity attributable to equity
shareholders of the Company /H1118/H1118/H1118 2,773,962 2,698,612 1,788,532 1,940,792
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118 295,944 123,402 104,170 42,957
TOTAL EQUITY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,069,906 2,822,014 1,892,702 1,983,749
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 457 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
As at
30 September
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H111811 488,856 723,682 738,595 650,801
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 105,284 93,136 80,987 71,876
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 191,135 234,682 245,093 242,266
Interests in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,153 45,237 5,933 3,959
Interests in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 1,764,388 2,093,535 2,700,959 2,779,803
Financial assets measured at FVOCI /H1118 17 56,228 63,188 101,955 123,252
Financial assets measured at FVPL /H1118/H1118 18 252,215 278,417 200,578 208,028
Trade and other receivables /H1118/H1118/H1118/H1118/H1118/H111821 7,271 8,768 3,105 10,060
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894,978 124,149 65,776 44,095
2,972,508 3,664,794 4,142,981 4,134,140------- ------- ------- -------
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 182,430 183,769 161,647 132,076
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,283 – 706
Trade and other receivables /H1118/H1118/H1118/H1118/H1118/H111821 1,924,893 2,130,319 2,188,073 1,740,915
Income tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 5 2 01– –
Financial assets measured at FVPL /H1118/H1118 18 578,115 322,572 183,645 10,007
Restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(a) 28,910 4,979 5,046 12,654
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H111822(a) 187,492 385,448 555,138 478,478
2,902,360 3,029,371 3,093,549 2,374,836------- ------- ------- -------
Current liabilities
Trade and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 1,553,144 1,728,844 1,844,094 1,087,498
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,305 12,058 2,256 2,114
Bank loans and other borrowings /H1118/H1118/H111824 659,602 1,065,080 1,599,283 2,056,859
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,140 10,821 13,923 8,112
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,017 – – –
2,279,208 2,816,803 3,459,556 3,154,583------- ------- ------- -------
Net current assets/(liabilities) /H1118/H1118/H1118/H1118 623,152 212,568 (366,007) (779,747)------- ------- ------- -------
Total assets less current liabilities /H1118 3,595,660 3,877,362 3,776,974 3,354,393------- ------- ------- -------
Non-current liabilities
Bank loans and other borrowings /H1118/H1118/H111824 1,109,000 1,332,175 1,310,057 964,740
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,101 11,281 – –
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,076 31,985 53,281 50,507
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,947 18,694 19,462 –
Other non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118 9,103 – – –
1,193,227 1,394,135 1,382,800 1,015,247------- ------- ------- -------
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,402,433 2,483,227 2,394,174 2,339,146
CAPITAL AND RESERVES
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(c) 869,115 869,531 869,531 871,018
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,533,318 1,613,696 1,524,643 1,468,128
TOTAL EQUITY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,402,433 2,483,227 2,394,174 2,339,146
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 458 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity shareholders of the Company
Note
Share
capital
Treasury
shares
Share
premium
PRC
statutory
reserves
Share-based
payment
reserve
Other
reserve
Retained
earnings Sub-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
Balance at 1 January 2022 /H1118/H1118/H1118/H1118 868,638 (107,674) 1,231,951 52,137 36,512 8,764 498,974 2,589,302 292,031 2,881,333
Changes in equity for 2022:
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –– 166,780 166,780 16,779 183,559
Other comprehensive income /H1118/H1118/H1118/H1118 –––– – 51,295 – 51,295 7,291 58,586
Total comprehensive income /H1118/H1118/H1118 –––– – 51,295 166,780 218,075 24,070 242,145
Purchase of own shares /H1118/H1118/H1118/H1118/H1118/H1118/H111831(d) – (31,141) – – – – – (31,141) – (31,141)
Equity-settled share-based
transactions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 477 69,529 (56,732) – 10,253 – – 23,527 – 23,527
Disposal of financial assets
measured at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– – (6,033) 6,033 – – –
Appropriation to statutory
reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(e) – – – 17,303 – – (17,303) – – –
Capital contribution from non-
controlling shareholders of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –––– 1,800 1,800
Appropriation of dividends to
non-controlling shareholders of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –––– (21,957) (21,957)
Dividends approved in respect of
the previous year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(b) –––– –– (25,801) (25,801) – (25,801)
Balance at 31 December 2022 /H1118/H1118/H1118 869,115 (69,286) 1,175,219 69,440 46,765 54,026 628,683 2,773,962 295,944 3,069,906
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 459 ---
Attributable to equity shareholders of the Company
Note
Share
capital
Treasury
shares
Share
premium
PRC
statutory
reserves
Share-based
payment
reserve
Other
reserve
Retained
earnings Sub-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
Balance at 1 January 2023 /H1118/H1118/H1118/H1118 869,115 (69,286) 1,175,219 69,440 46,765 54,026 628,683 2,773,962 295,944 3,069,906
Changes in equity for 2023:
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –– 135,672 135,672 (2,045) 133,627
Other comprehensive income /H1118/H1118/H1118/H1118 –––– – 28,777 – 28,777 180 28,957
Total comprehensive income /H1118/H1118/H1118 –––– – 28,777 135,672 164,449 (1,865) 162,584
Equity-settled share-based
transactions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 416 9,195 3,252 – 6,502 – – 19,365 – 19,365
Disposal of financial assets
measured at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– – 4 5 0 (450) – – –
Appropriation to statutory
reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(e) – – – 8,159 – – (8,159) – – –
Capital contribution from non-
controlling shareholders of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –––– 6,004 6,004
Appropriation of dividends to non-
controlling shareholders of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –––– (8,660) (8,660)
Dividends approved in respect of
the previous year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(b) –––– –– (26,014) (26,014) – (26,014)
Acquisition of non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(e) – – (233,150) – – – – (233,150) (168,021) (401,171)
Balance at 31 December 2023 /H1118/H1118/H1118 869,531 (60,091) 945,321 77,599 53,267 83,253 729,732 2,698,612 123,402 2,822,014
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 460 ---
Attributable to equity shareholders of the Company
Note
Share
capital
Treasury
shares
Share
premium
PRC
statutory
reserves
Share-based
payment
reserve
Other
reserve
Retained
earnings/
(accumulated
losses) Sub-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
Balance at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118 869,531 (60,091) 945,321 77,599 53,267 83,253 729,732 2,698,612 123,402 2,822,014
Changes in equity for 2024:
Loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –– (810,929) (810,929) (6,756) (817,685)
Other comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– – (57,582) – (57,582) – (57,582)
Total comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118 –––– – (57,582) (810,929) (868,511) (6,756) (875,267)
Equity-settled share-based transactions /H1118/H1118 27 –––– 10,451 – – 10,451 – 10,451
Disposal of financial assets measured at
FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– – 1,600 (1,600) – – –
Acquisition of a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– –– –– 2,878 2,878
Capital contribution from non-controlling
shareholders of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118 –––– –– –– 6,246 6,246
Appropriation of dividends to non-
controlling shareholders of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –– –– (21,600) (21,600)
Dividends approved in respect of the
previous year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(b) –––– –– (52,020) (52,020) – (52,020)
Balance at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118 869,531 (60,091) 945,321 77,599 63,718 27,271 (134,817) 1,788,532 104,170 1,892,702
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 461 ---
Attributable to equity shareholders of the Company
Note
Share
capital
Treasury
shares
Share
premium
PRC
statutory
reserves
Share-based
payment
reserve
Other
reserve
Accumulated
losses Sub-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
Balance at 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118 869,531 (60,091) 945,321 77,599 63,718 27,271 (134,817) 1,788,532 104,170 1,892,702
Changes in equity for 2025:
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –– 25,372 25,372 4,328 29,700
Other comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– – 1 12,438 – 112,438 – 112,438
Total comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118 –––– – 1 12,438 25,372 137,810 4,328 142,138
Equity-settled share-based transactions /H1118/H1118 27 4,000 (41,080) 37,080 – 14,450 – – 14,450 – 14,450
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(d) (2,513) 60,091 (57,578) – – – – – – –
Disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 –––– –– –– (62,631) (62,631)
Appropriation of dividends to
non-controlling shareholders of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –– –– (3,360) (3,360)
Capital contribution from non-controlling
shareholders of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118 –––– –– –– 4 5 0 4 5 0
Balance at 30 September 2025 /H1118/H1118/H1118/H1118/H1118 871,018 (41,080) 924,823 77,599 78,168 139,709 (109,445) 1,940,792 42,957 1,983,749
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 462 ---
Attributable to equity shareholders of the Company
(Unaudited) Note
Share
capital
Treasury
shares
Share
premium
PRC
statutory
reserves
Share-based
payment
reserve
Other
reserve
Retained
earnings Sub-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
Balance at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118 869,531 (60,091) 945,321 77,599 53,267 83,253 729,732 2,698,612 123,402 2,822,014
Changes in equity for 2024:
(Loss)/profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– –– (67,119) (67,119) 4,960 (62,159)
Other comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– – 8 4 0 – 8 4 0 – 8 4 0
Total comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– – 8 4 0 (67,119) (66,279) 4,960 (61,319)
Equity-settled share-based transactions /H1118/H1118 27 –––– 1 1,384 – – 11,384 – 11,384
Capital contribution from non-controlling
shareholders of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118 –––– –– –– 1,417 1,417
Appropriation of dividends to
non-controlling shareholders of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –– –– (21,600) (21,600)
Dividends approved in respect of the
previous year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(b) –––– –– (52,020) (52,020) – (52,020)
Balance at 30 September 2024 /H1118/H1118/H1118/H1118/H1118 869,531 (60,091) 945,321 77,599 64,651 84,093 610,593 2,591,697 108,179 2,699,876
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 463 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Operating activities
Cash generated
from/(used in)
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(b) 83,752 74,997 (53,932) (494,500) 325,794
Income tax paid /H1118/H1118/H1118/H1118/H1118/H111828(a) (66,270) (74,283) (50,103) (36,556) (25,733)
Net cash generated
from/(used in)
operating activities /H1118/H1118 17,482 714 (104,035) (531,056) 300,061------- ------- ------- ------- -------
Investing activities
Payment for purchase of
property, plant and
equipment, intangible
assets and right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(189,117) (300,394) (281,881) (216,871) (171,622)
Payment for development
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(94,044) (115,649) (60,684) (42,953) (35,703)
Proceeds from disposal of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,617 1,740 13,281 5,334 1,723
Net proceeds from
disposal of interests in
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118 41,25 3––– 25,057
Net proceeds from
disposal of interests in
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – 24,000 12,000 13,440
Deposits of disposal of
interests in associates
received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– 23,226
Proceeds from disposal of
financial assets
measured at FVPL /H1118/H1118/H1118 – – 75,000 – –
Payment for acquisition of
a subsidiary, net of cash
acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – (4,991) (2,500) –
Payment for purchase of
financial assets
measured at FVPL /H1118/H1118/H1118 (87,098) (30,000) – – –
APPENDIX I ACCOUNTANTS’ REPORT
– I-15 –


--- page 464 ---
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Payment for purchase of
financial assets
measured at FVOCI /H1118/H1118/H1118 (3,450) – – – (6,500)
Payment for purchase of
wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(718,291) (1,300,105) (1,773,172) (1,156,198) (1,698,980)
Payment for acquisition of
non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – (401,171) – – –
Proceeds from redemption
of wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118737,226 1,436,927 1,803,679 1,162,917 1,857,776
Interest received /H1118/H1118/H1118/H1118/H1118/H1118 17,845 21,279 11,602 7,454 9,702
Dividends received from
financial assets
measured at FVPL /H1118/H1118/H1118 – 8,517 52 52 5,428
Dividends received from
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,018 681 620 – 420
Net cash (used in)/
generated from
investing activities /H1118/H1118/H1118 (262,041) (678,175) (192,494) (230,765) 23,967------- ------- ------- ------- -------
Financing activities
Proceeds from bank
loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(c) 1,956,047 4,310,347 3,515,466 2,947,817 2,154,458
Repayment of bank loans /H1118 22(c) (1,444,596) (3,212,755) (3,046,284) (2,193,315) (2,467,357)
Interest paid for bank
loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(c) (66,908) (120,209) (124,406) (70,804) (96,068)
Proceeds from other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(c) – 380,000 35,000 35,000 –
Payment for capital
element of lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(c) (12,288) (9,206) (16,188) (12,390) (11,844)
Payment for interest
element of lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(c) (2,229) (2,062) (1,866) (1,552) (3,714)
Repayments of
borrowings from the
controlling shareholder /H1118 22(c) (109,416) (110,000) (11,112) (11,112) –
APPENDIX I ACCOUNTANTS’ REPORT
– I-16 –


--- page 465 ---
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Contribution from non-
controlling shareholders
of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118 1,800 6,004 6,246 1,417 450
Proceeds from issuance of
restricted shares units /H1118/H1118 –––– 41,080
Payment for purchase of
own shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(d) (31,141) ––––
Payment for listing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– (16,434)
Dividends paid to equity
shareholders of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(25,801) (26,014) (52,020) (52,020) –
Dividends paid to non-
controlling shareholders
of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118 (21,957) (8,660) (21,600) – –
Net changes in restricted
bank deposits /H1118/H1118/H1118/H1118/H1118/H1118 10,359 (6,499) 5,493 (32,173) –
Net cash generated
from/(used in)
financing activities /H1118/H1118/H1118 253,870 1,200,946 288,729 610,868 (399,429)-------
------- ------- ------- -------
Net increase/(decrease)
in cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118 9,311 523,485 (7,800) (150,953) (75,401)
Cash and cash
equivalents at the
beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118 652,937 668,322 1,196,253 1,196,253 1,181,104
Effect of foreign
exchange rate
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,074 4,446 (7,349) 191 16,263
Cash and cash
equivalents at the end
of the year/period /H1118/H1118/H111822(a) 668,322 1,196,253 1,181,104 1,045,491 1,121,966
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-17 –


--- page 466 ---
NOTES TO THE HISTORICAL FINANCIAL INFORMATION
(Expressed in Renminbi unless otherwise indicated)
1 BASIS OF PREPARATION AND PRESENTATION OF HISTORICAL FINANCIAL INFORMATION
ESTUN AUTOMA TION CO., LTD (the “Company”) was established in Nanjing, Jiangsu Province, the
People’s Republic of China (the “PRC”) on 26 February 2002 as a limited liability company. The Company was
converted from a limited liability company Nanjing Estun Digital Technology Co., Ltd. (ࠢ
ʮ̡) into a joint stock limited liability company ESTUN AUTOMA TION CO., LTD (ʮ
̡) under the PRC Company Law on 5 July 2011. The Company’s A shares have been listed on the Shenzhen Stock
Exchange under the stock code 002747 since 20 March 2015.
During the Track Record Period, the Company and its subsidiaries (together, the “Group”) are principally
engaged in the manufacturing and sale of core automation components, motion control systems, industrial robots and
intelligent manufacturing systems.
The financial statement of the Company and the subsidiaries of the Group for which there are statutory
requirements were prepared in accordance with the relevant accounting rules and regulations applicable to entities
in the countries in which they were incorporated and/or established. The statutory financial statements of the
Company for the years ended 31 December 2022, 2023 and 2024 were prepared in accordance with the Accounting
Standards for Business Enterprises issued by the Ministry of Finance of the PRC and audited by Zhonghui Certified
Public Accountants LLP . (ה(౷ஷΥྫ)).
The Historical Financial Information has been prepared assuming the Group will continue as a going concern
notwithstanding that the Group recorded net current liabilities of RMB170,692,000 as at 30 September 2025. The
directors of the Company are satisfied that the Group will have sufficient financial resources to meet its financial
obligations as they fall due and to sustain its operations for the foreseeable future after reviewing the Group’s cash
flow projection, taking into account the expected working capital requirements covering at least the next twelve
months from 30 September 2025. Accordingly, the directors of the Company consider it is appropriate to prepare the
Historical Financial Information on a going concern basis.
The Historical Financial Information has been prepared in accordance with all applicable IFRS Accounting
Standards as issued by the International Accounting Standards Board (“IASB”). Further details of the material
accounting policy information are set out in Note 2.
The IASB has issued a number of new and revised IFRS Accounting Standards. For the purpose of preparing
the Historical Financial Information, the Group has adopted all applicable new and revised IFRS Accounting
Standards to the Track Record Period, except for any new standards or interpretations that are not yet effective for
the Track Record Period. The revised and new accounting standards and interpretations issued but not yet effective
for the Track Record Period are set out in Note 37.
The Historical Financial Information also complies with the applicable disclosure provisions of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
The accounting policies set out below have been applied consistently to all periods presented in the Historical
Financial Information.
The Stub Period Corresponding Financial Information has been prepared in accordance with the same basis of
preparation and presentation adopted in respect of the Historical Financial Information.
The Historical Financial Information and Stub Period Corresponding Financial Information are presented in
Renminbi (“RMB”) and all values are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
2 MATERIAL ACCOUNTING POLICIES
(a) Basis of measurement
The measurement basis used in the preparation of the Historical Financial Information is the historical cost
basis except that the financial assets measured at fair value through profit or loss (“FVPL”) and the financial assets
measured at FVOCI are stated at their fair value as explained in Note 2(f).
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(b) Use of estimates and judgements
The preparation of Historical Financial Information in conformity with IFRS Accounting Standards requires
management to make judgements, estimates and assumptions that affect the application of policies and reported
amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under the circumstances, the results of which
form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRS Accounting Standards that have significant effect
on the Historical Financial Information and major sources of estimation uncertainty are discussed in Note 3.
(c) Subsidiaries and non-controlling interests
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements
from the date on which control commences until the date on which control ceases.
Intra-group balances and transactions, and any unrealised income and expenses (except for foreign currency
transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealised losses resulting from
intra-group transactions are eliminated in the same way as unrealised gains, but only to the extent that there is no
evidence of impairment.
For each business combination, the Group can elect to measure any non-controlling interests (“NCI”) either
at fair value or at the NCI’s proportionate share of the subsidiary’s net identifiable assets. NCI are presented in the
consolidated statements of financial position within equity, separately from equity attributable to the equity
shareholders of the Company. NCI in the results of the Group are presented on the face of the consolidated statements
of profit or loss and the consolidated statements of profit or loss and other comprehensive income as an allocation
of the total profit or loss and total comprehensive income for the year between NCI and the equity shareholders of
the Company.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as
equity transactions.
When the Group loses control of a subsidiary, it derecognises the assets and liabilities of the subsidiary, and
any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest
retained in that former subsidiary is measured at fair value when control is lost.
In the Company’s statements of financial position, an investment in a subsidiary is stated at cost less
impairment losses (see Note 2(k)(ii)), unless it is classified as held for sale (or included in a disposal group classified
as held for sale).
(d) Associates
An associate is an entity in which the Group or the Company has significant influence, but not control or joint
control, over the financial and operating policies.
An investment in an associate is accounted for using the equity method, unless it is classified as held for sale
(or included in a disposal group classified as held for sale). It is initially recognised at cost, which includes
transaction costs. Subsequently, the consolidated financial statements include the Group’s share of the profit or loss
and other comprehensive income (“OCI”) of those investees, until the date on which significant influence ceases.
When the Group’s share of losses exceeds its interest in the associate, the Group’s interest is reduced to nil
and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of the investee. For this purpose, the Group’s interest is the carrying amount
of the investment under the equity method, together with any other long-term interests that in substance form part
of the Group’s net investment in the associate, after applying the ECL model to such other long-term interests where
applicable (see Note 2(k)(i)).
APPENDIX I ACCOUNTANTS’ REPORT
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Unrealised gains arising from transactions with equity-accounted investees are eliminated against the
investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent there is no evidence of impairment.
In the Company’s statements of financial position, an investment in an associate is stated at cost less
impairment losses (see Note 2(k)(ii)), unless it is classified as held for sale (or included in a disposal group classified
as held for sale).
(e) Goodwill
Goodwill arising on acquisition of businesses is measured at cost less accumulated impairment losses and is
tested annually for impairment (see Note 2(k)(ii)).
(f) Other investments in securities
The Group’s policies for investments in securities, other than investments in subsidiaries and associates, are
set out below.
Investments in securities are recognised/derecognised on the date the Group commits to purchase/sell the
investment. The investments are initially stated at fair value plus directly attributable transaction costs, except for
those investments measured at FVPL for which transaction costs are recognised directly in profit or loss. For an
explanation of how the Group determines fair value of financial instruments, see Note 32(e). These investments are
subsequently accounted for as follows, depending on their classification.
(i) Non-equity investments
Non-equity investments are classified into one of the following measurement categories:
– amortised cost, if the investment is held for the collection of contractual cash flows which represent
solely payments of principal and interest. Expected credit losses, interest income calculated using the
effective interest method (see Note 2(v)(ii)(c)), foreign exchange gains and losses are recognised in
profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
– FVOCI — recycling, if the contractual cash flows of the investment comprise solely payments of
principal and interest and the investment is held within a business model whose objective is achieved
by both the collection of contractual cash flows and sale. Expected credit losses, interest income
(calculated using the effective interest method) and foreign exchange gains and losses are recognised in
profit or loss and computed in the same manner as if the financial asset was measured at amortised cost.
The difference between the fair value and the amortised cost is recognised in OCI. When the investment
is derecognised, the amount accumulated in OCI is recycled from equity to profit or loss.
– FVPL if the investment does not meet the criteria for being measured at amortised cost or FVOCI
(recycling). Changes in the fair value of the investment (including interest) are recognised in profit or
loss.
(ii) Equity investments
An investment in equity securities is classified as FVPL, unless the investment is not held for trading purposes
and on initial recognition the Group makes an irrevocable election to designate the investment at FVOCI
(non-recycling) such that subsequent changes in fair value are recognised in OCI. Such elections are made on an
instrument-by-instrument basis, but may only be made if the investment meets the definition of equity from the
issuer’s perspective. If such election is made for a particular investment, at the time of disposal, the amount
accumulated in the fair value reserve (non-recycling) is transferred to retained earnings and not recycled through
profit or loss. Dividends from an investment in equity securities, irrespective of whether classified as at FVPL or
FVOCI, are recognised in profit or loss as other income (see Note 2(v)(ii)(b)).
(g) Investment property
Investment property are stated at cost less accumulated depreciation and impairment losses (see Note 2(k)(ii)).
Depreciation is calculated to write off the cost of investment property, less their estimated residual value, using the
straight-line method over their estimated useful lives as follows:
Plant and buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840 years
APPENDIX I ACCOUNTANTS’ REPORT
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Any gain or loss on disposal of investment property is recognised in profit or loss. Rental income from
investment properties is recognised in accordance with Note 2(v)(ii)(a).
(h) Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses (see Note
2(k)(ii)). The cost of property, plant and equipment comprises its purchase price and any directly attributable costs
of bringing the asset to working condition and location for its intended use. Subsequent expenditure relating to an
item of property, plant and equipment that has already been recognised is added to the carrying amount of the asset
when it is probable that the future economic benefits, in excess of the original assessed standard of performance of
the existing asset, will flow to the Group. All other subsequent expenditure is recognised as an expense in profit or
loss in the period in which it is incurred.
Construction in progress represents buildings and various machinery, plant and equipment under construction
and pending installation, and is stated at cost less impairment losses (see Note 2(k)(ii)). Cost comprises direct costs
of construction as well as interest charges during the periods of construction.
Construction in progress is transferred to property, plant and equipment when the asset is substantially ready
for its intended use. No depreciation is provided in respect of construction in progress.
Gains or losses arising from the retirement or disposal of an item of property, plant and equipment are
determined as the difference between the net disposal proceeds and the carrying amount of the item and are
recognised in profit or loss on the date of retirement or disposal.
Depreciation is calculated to write off the cost of items of property (freehold land excluded), plant and
equipment, less their estimated residual value, if any, using the straight-line method over their estimated useful lives
as follows:
Freehold land /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118not depreciated
Plant and buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820-40 years
Machinery and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185-10 years
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185-10 years
Office equipment and others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-10 years
Where parts of an item of property, plant and equipment have different useful lives, the cost of the item is
allocated on a reasonable basis between the parts and each part is depreciated separately. Both the useful life of an
asset and its residual value, if any, are reviewed annually.
(i) Intangible assets (other than goodwill)
Expenditure on research activities is recognised in profit or loss as incurred. Development expenditure is
capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially
feasible, future economic benefits are probable and the Group intends to and has sufficient resources to complete
development and to use or sell the resulting asset. Otherwise, it is recognised in profit or loss as incurred. Capitalised
development expenditure is subsequently measured at cost less accumulated amortisation and any accumulated
impairment losses.
Other intangible assets, including software, non-patented technologies, concessions and patented technologies,
that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and
any impairment losses (see Note 2(k)(ii)).
Expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using
the straight-line method over their estimated useful lives, if any, and is generally recognised in profit or loss. The
estimated useful lives are as follows:
Amortisation period Basis of determination
(years)
Software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182-10 years Expected years of economic benefits
Non-patented technologies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185-10 years Expected years of economic benefits
Concessions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-10 years Expected years of economic benefits
Patented technologies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 years Expected years of economic benefits
APPENDIX I ACCOUNTANTS’ REPORT
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Amortisation methods, useful lives and residual values are reviewed annually and adjusted if appropriate.
Intangible assets, including trademarks that are acquired by the Group, are not amortised while their useful
lives are assessed to be indefinite. Any conclusion that the useful life of an intangible asset is indefinite is reviewed
annually to determine whether events and circumstances continue to support the indefinite useful life assessment for
that asset. If they do not, the change in the useful life assessment from indefinite to finite is accounted for
prospectively from the date of change and in accordance with the policy for amortisation of intangible assets with
finite lives as set out above.
(j) Leased assets
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. This is the case if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. Control is conveyed where the customer has both the right to direct the use of the identified asset and
to obtain substantially all of the economic benefits from that use.
(i) As a lessee
Where the contract contains lease component(s) and non-lease component(s), the Group has elected not to
separate non-lease components and accounts for each lease component and any associated non-lease components as
a single lease component for all leases.
At the lease commencement date, the Group recognises a right-of-use asset and a lease liability, except for
leases that have a short lease term of 12 months or less, and leases of low-value items such as laptops and office
furniture. When the Group enters into a lease in respect of a low-value item, the Group decides whether to capitalise
the lease on a lease-by-lease basis. If not capitalised, the associated lease payments are recognised in profit or loss
on a systematic basis over the lease term.
Where the lease is capitalised, the lease liability is initially recognised at the present value of the lease
payments payable over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot
be readily determined, using a relevant incremental borrowing rate. After initial recognition, the lease liability is
measured at amortised cost and interest expense is recognised using the effective interest method. V ariable lease
payments that do not depend on an index or rate are not included in the measurement of the lease liability, and are
charged to profit or loss as incurred.
The right-of-use asset recognised when a lease is capitalised is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore
the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is
subsequently stated at cost less accumulated depreciation and impairment losses (see Note 2(k)(ii)).
Refundable rental deposits are accounted for separately from the right-of-use assets in accordance with the
accounting policy applicable to investments in non-equity securities carried at amortised cost (see Notes 2(f)(i),
2(v)(ii)(c) and 2(k)(i)). Any excess of the nominal value over the initial fair value of the deposits is accounted for
as additional lease payments made and is included in the cost of right-of-use assets.
The lease liability is remeasured when there is a change in future lease payments arising from a change in an
index or rate, or there is a change in the Group’s estimate of the amount expected to be payable under a residual value
guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination
option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
The lease liability is also remeasured when there is a lease modification, which means a change in the scope
of a lease or the consideration for a lease that is not originally provided for in the lease contract, if such modification
is not accounted for as a separate lease. In this case, the lease liability is remeasured based on the revised lease
payments and lease term using a revised discount rate at the effective date of the modification.
In the consolidated statements of financial position, the current portion of long-term lease liabilities is
determined as the present value of contractual payments that are due to be settled within twelve months after the
reporting period.
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(ii) As a lessor
The Group determines at lease inception whether each lease is a finance lease or an operating lease. A lease
is classified as a finance lease if it transfers substantially all the risks and rewards incidental to the ownership of an
underlying assets to the lessee. Otherwise, the lease is classified as an operating lease.
When a contract contains lease and non-lease components, the Group allocates the consideration in the contract
to each component on a relative stand-alone selling price basis. The rental income from operating leases is recognised
in accordance with Note 2(v)(ii)(a).
When the Group is an intermediate lessor, the sub-leases are classified as a finance lease or as an operating
lease with reference to the right-of-use asset arising from the head lease. If the head lease is a short-term lease to
which the Group applies the exemption described in Note 2(j)(i), then the Group classifies the sub-lease as an
operating lease.
(k) Credit losses and impairment of assets
(i) Credit losses from financial instruments, contract assets and lease receivables
The Group recognises a loss allowance for expected credit losses (“ECL”s) on:
– financial assets measured at amortised cost (including cash and cash equivalents, trade receivables and
other receivables, including those loans to associates that are held for the collection of contractual cash
flows which represent solely payments of principal and interest);
– contract assets (see Note 2(m)); and
– lease receivables.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Generally, credit losses are measured as the
present value of all expected cash shortfalls between the contractual cash flows and expected amounts.
The expected cash shortfalls are discounted using the following rates if the effect is material:
– fixed-rate financial assets, trade and other receivables and contract assets: effective interest rate
determined at initial recognition or an approximation thereof;
– variable-rate financial assets: current effective interest rate;
– lease receivables: discount rate used in the measurement of the lease receivable.
The maximum period considered when estimating ECLs is the maximum contractual period over which
the Group is exposed to credit risk.
ECLs are measured on either of the following bases:
– 12-month ECLs: these are the portion of ECLs that result from default events that are possible
within the 12 months after the reporting date (or a shorter period if the expected life of the
instrument is less than 12 months); and
– lifetime ECLs: these are the ECLs that result from all possible default events over the expected
lives of the items to which the ECL model applies.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to
lifetime ECLs.
APPENDIX I ACCOUNTANTS’ REPORT
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Significant increases in credit risk
When determining whether the credit risk of a financial instrument has increased significantly since
initial recognition and when measuring ECLs, the Group considers reasonable and supportable information that
is relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on the Group’s historical experience and informed credit assessment, that
includes forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than
30 days past due.
The Group considers a financial asset to be in default when:
In particular, the following information is taken into account when assessing whether credit risk has
increased significantly since initial recognition:
– the debtor is unlikely to pay its credit obligations to the Group in full, without recourse by the
Group to actions such as realising security (if any is held); or
– the financial asset is 90 days past due.
ECLs are remeasured at each reporting date to reflect changes in the financial instrument’s credit risk
since initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit
or loss. The Group recognises an impairment gain or loss for all financial instruments with a corresponding
adjustment to their carrying amount through a loss allowance account, except for investments in non-equity
securities that are measured at FVOCI (recycling), for which the loss allowance is recognised in OCI and
accumulated in the fair value reserve (recycling) does not reduce the carrying amount of the financial asset in
the consolidated statements of financial position.
Credit-impaired financial assets
At each reporting date, the Group assesses whether a financial asset is credit-impaired. A financial asset
is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows
of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable events:
– significant financial difficulties of the debtor;
– a breach of contract, such as a default or being more than 90 days past due;
– the restructuring of a loan or advance by the Group on terms that the Group would not consider
otherwise;
– it is probable that the debtor will enter bankruptcy or other financial reorganisation; or
– the disappearance of an active market for a security because of financial difficulties of the issuer.
Write-off policy
The gross carrying amount of a financial asset, lease receivable or contract asset is written off to the
extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that
the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the
amounts subject to the write-off.
Subsequent recoveries of an asset that was previously written off are recognised as a reversal of
impairment in profit or loss in the period in which the recovery occurs.
APPENDIX I ACCOUNTANTS’ REPORT
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(ii) Impairment of other non-current assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than
inventories and other contract costs, contract assets and deferred tax assets) to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill
is tested annually for impairment.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units
(”CGU”s). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected
to benefit from the synergies of the combination.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of
disposal. V alue in use is based on the estimated future cash flows, 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
or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of
any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro
rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only
to the extent that the resulting carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(l) Inventories and other contract costs
(i) Inventories
Inventories are measured at the lower of cost and net realisable value.
Cost is calculated using the weighted average cost formula and comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs
of completion and the estimated costs necessary to make the sale.
(ii) Other contract costs
Other contract costs are either the incremental costs of obtaining a contract with a customer or the costs to
fulfil a contract with a customer which are not capitalised as inventory (see Note 2(l)(i)), property, plant and
equipment (see Note 2(h)) or intangible assets (see Note 2(i)).
Incremental costs of obtaining a contract, e.g. sales commissions, are capitalised if the costs relate to revenue
which will be recognised in a future reporting period and the costs are expected to be recovered. Other costs of
obtaining a contract are expensed when incurred.
Costs to fulfil a contract are capitalised if the costs relate directly to an existing contract or to a specifically
identifiable anticipated contract; generate or enhance resources that will be used to provide goods or services in the
future; and are expected to be recovered. Otherwise, costs of fulfilling a contract, which are not capitalised as
inventory, property, plant and equipment or intangible assets, are expensed as incurred.
Capitalised contract costs are stated at cost less accumulated amortisation and impairment losses. Amortisation
of capitalised contract costs is recognised in profit or loss when the revenue to which the asset relates is recognised
(see Note 2(v)(i)).
APPENDIX I ACCOUNTANTS’ REPORT
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(m) Contract assets and contract liabilities
A contract asset is recognised when the Group recognises revenue (see Note 2(v)(i)) before being
unconditionally entitled to the consideration under the terms in the contract. Contract assets are assessed for ECLs
(see Note 2(k)(i)) and are reclassified to receivables when the right to the consideration becomes unconditional (see
Note 2(n)).
A contract liability is recognised when the customer pays non-refundable consideration before the Group
recognises the related revenue (see Note 2(v)(i)). A contract liability is also recognised if the Group has an
unconditional right to receive non-refundable consideration before the Group recognises the related revenue. In such
latter cases, a corresponding receivable is also recognised (see Note 2(n)).
When the contract includes a significant financing component, the contract balance includes interest accrued
under the effective interest method (see Note 2(v)(ii)).
(n) Trade and other receivables
A receivable is recognised when the Group has an unconditional right to receive consideration and only the
passage of time is required before payment of that consideration is due.
Trade receivables that do not contain a significant financing component are initially measured at their
transaction price. Trade receivables that contain a significant financing component and other receivables are initially
measured at fair value plus transactions costs. All receivables are subsequently stated at amortised cost (see Note
2(k)(i)).
(o) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial
institutions, and other short-term, highly liquid investments that are readily convertible into known amounts of cash
and which are subject to an insignificant risk of changes in value, having been within three months of maturity at
acquisition. Cash and cash equivalents are assessed for ECL (see Note 2(k)(i)).
(p) Trade and other payables
Trade and other payables are initially recognised at fair value. Subsequent to initial recognition, trade and other
payables are stated at amortised cost unless the effect of discounting would be immaterial, in which case they are
stated at invoice amounts.
(q) Redemption liabilities
The Group’s contractual obligations to purchase its own shares for cash upon the occurrence of events that are
beyond the control of the Group and the holders give rise to financial liabilities. The redemption liability is initially
measured at the present value of the redemption amount and subsequently measured at amortised cost with interest
included in profit or loss.
The Group derecognises the redemption liabilities when, and only when, the Group’s redemption obligations
are discharged, cancelled, or have expired. When the redemption liabilities expire without exercise, the carrying
amount of redemption liabilities are reclassified to equity.
At the end of each reporting period, redemption liabilities are presented under “Bank loans and other
borrowings”.
(r) Interest-bearing borrowings
Interest-bearing borrowings are measured initially at fair value less transaction costs. Subsequently, these
borrowings are stated at amortised cost using the effective interest method. Interest expense is recognised in
accordance with Note 2(x).
APPENDIX I ACCOUNTANTS’ REPORT
– I-26 –


--- page 475 ---
(s) Employee benefits
(i) Short-term employee benefits and contributions to defined contribution retirement plans
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the
amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result
of past service provided by the employee and the obligation can be estimated reliably.
Obligations for contributions to defined contribution retirement plans are expensed as the related service is
provided.
(ii) Defined benefit plan obligations
The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by
estimating the amount of future benefit that employees have earned in the current and prior periods and discounting
that amount.
The calculation of defined benefit obligation is performed by a qualified actuary using the projected unit credit
method. When the calculation results in a benefit to the Group, the recognised asset is limited to the present value
of economic benefits available in the form of any future refunds from the plan or reductions in future contributions
to the plan.
Remeasurements arising from defined benefit retirement plans, which comprise actuarial gains and losses, the
return on plan assets (excluding interest) and the effect of any asset ceiling (excluding interest), are recognised
immediately in OCI. Net interest expense for the period is determined by applying the discount rate used to measure
the defined benefit obligation at the beginning of the reporting period to the then net defined benefit liability, taking
into account any changes in the net defined benefit liability during the period. Net interest expense and other
expenses related to defined benefit plans are recognised in profit or loss.
(iii) Share-based payments
The grant-date fair value of equity-settled share-based payments granted to employees is measured using the
binomial lattice model. The amount is generally recognised as an expense, with a corresponding increase in equity,
over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of
awards for which the related service conditions are expected to be met, such that the amount ultimately recognised
is based on the number of awards that meet the related service conditions at the vesting date. The equity amount is
recognised in the capital reserve until either the option is exercised (when it is included in the amount recognised
in share capital for the shares issued) or the option expires (when it is released directly to retained profits).
(iv) Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those
benefits and when the Group recognises costs for a restructuring.
(t) Income tax
Income tax expense comprises current tax and deferred tax. It is recognised in profit or loss except to the extent
that it relates to a business combination, or items recognised directly in equity or in OCI.
Current tax comprises the estimated tax payable or receivable on the taxable income or loss for the year and
any adjustments to the tax payable or receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or received that reflects any uncertainty related
to income taxes. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also
includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 476 ---
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised
for:
– temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences;
– temporary differences related to investment in subsidiaries and associates to the extent that the Group
is able to control the timing of the reversal of the temporary differences and it is probable that they will
not reverse in the foreseeable future; and
– taxable temporary differences arising on the initial recognition of goodwill.
The Group recognised deferred tax assets and deferred tax liabilities separately in relation to its lease liabilities
and right-of-use assets.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount
of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits,
adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual
subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability
of future taxable profits improves.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which
the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
(u) Provisions and contingent liabilities
Generally provisions are determined by discounting the expected future cash flows at a pretax rate that reflects
current market assessment of the time value of money and the risks specific to the liability.
A provision for warranties is recognised when the underlying products or services are sold, based on historical
warranty data and a weighting of possible outcomes against their associated probabilities.
A provision for onerous contracts is measured at the present value of the lower of the expected cost of
terminating the contract and the expected net cost of continuing with the contract, which is determined based on the
incremental costs of fulfilling the obligation under that contract and an allocation of other costs directly related to
fulfilling that contract. Before a provision is established, the Group recognises any impairment loss on the assets
associated with that contract (see Note 2(k)(ii)).
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic
benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence
of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic
benefits is remote.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another
party, a separate asset is recognised for any expected reimbursement that would be virtually certain. The amount
recognised for the reimbursement is limited to the carrying amount of the provision.
(v) Revenue and other income
Income is classified by the Group as revenue when it arises from the sale of goods, the provision of services
or the use by others of the Group’s assets under leases in the ordinary course of the Group’s business.
APPENDIX I ACCOUNTANTS’ REPORT
– I-28 –


--- page 477 ---
Further details of the Group’s revenue and other income recognition policies are as follows:
(i) Revenue from contracts with customers
The Group is the principal for its revenue transactions and recognises revenue on a gross basis, including the
sale of electronic products that are sourced externally. In determining whether the Group acts as a principal or as an
agent, it considers whether it obtains control of the products before they are transferred to the customers. Control
refers to the Group’s ability to direct the use of and obtain substantially all of the remaining benefits from the
products.
Revenue is recognised when control over a product or service is transferred to the customer at the amount of
promised consideration to which the Group is expected to be entitled, excluding those amounts collected on behalf
of third parties such as value added tax or other sales taxes.
(a) Sale of products
Generally, revenue from the sale of products is recognised when the customer takes possession of and
accepts the products. Revenue arising from the sale of certain intelligent manufacturing systems, and a
corresponding contract asset (see Note 2(m)), are recognised progressively over time during the process using
the cost-to-cost method. Under the cost-to-cost method, revenue is recognised based on the proportion of the
actual costs incurred relative to the estimated total costs to provide a faithful depiction of the transfer of those
products.
(b) Product related technical services
Revenue from technical services is recognised at a point in time when the service is provided and
accepted by the customer.
(ii) Revenue from other sources and other income
(a) Rental income from operating leases
Rental income from operating leases is recognised in profit or loss on a straight-line basis over the term
of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term
of the lease. V ariable lease payments that do not depend on an index or a rate are recognised as income in the
accounting period in which they are earned.
(b) Dividends
Dividend income is recognised in profit or loss on the date on which the Group’s right to receive
payment is established.
(c) Interest income
Interest income is recognised using the effective interest method. The “effective interest rate” is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross
carrying amount of the financial asset. In calculating interest income, the effective interest rate is applied to
the gross carrying amount of the asset (when the asset is not credit-impaired). However, for financial assets
that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying
the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired,
then the calculation of interest income reverts to the gross basis.
(d) Government grants
Government grants are recognised in the consolidated statements of financial position initially when
there is reasonable assurance that they will be received and that the Group will comply with the conditions
attaching to them.
Grants that compensate the Group for expenses incurred are recognised as income in profit or loss on
a systematic basis in the same periods in which the expenses are incurred.
APPENDIX I ACCOUNTANTS’ REPORT
– I-29 –


--- page 478 ---
Grants that compensate the Group for the cost of an asset are presented in the consolidated statements
of financial position by setting up the grants as deferred income and consequently are effectively recognised
as income in profit or loss on a systematic basis over the useful life of the asset.
(w) Translation of foreign currencies
Transactions in foreign currencies are translated into the respective functional currencies of group companies
at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated into the functional currency at the exchange rate when the fair value was determined.
Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at
the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or
loss.
However, foreign currency differences arising from the translation of an investment in equity securities
designated as at FVOCI are recognised in OCI.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition, are translated into Renminbi at the exchange rates at the reporting date. The income and expenses of
foreign operations are translated into Renminbi at the exchange rates at the dates of the transactions.
Foreign currency differences are recognised in OCI and accumulated in the exchange reserve, except to the
extent that the translation difference is allocated to NCI.
When a foreign operation is disposed of in its entirety or partially such that control, significant influence or
joint control is lost, the cumulative amount in the exchange reserve related to that foreign operation is reclassified
to profit or loss as part of the gain or loss on disposal. On disposal of a subsidiary that includes a foreign operation,
the cumulative amount of the exchange differences relating to that foreign operation that have been attributed to the
NCI shall be derecognised, but shall not be reclassified to profit or loss. If the Group disposes of part of its interest
in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to NCI. When
the Group disposes of only part of an associate or joint venture while retaining significant influence or joint control,
the relevant proportion of the cumulative amount is reclassified to profit or loss.
(x) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset which
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the
cost of that asset. Other borrowing costs are expensed in the period in which they are incurred.
(y) Related parties
(a) A person, or a close member of that person’s family, is related to the Group if that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or the Group’s parent.
(b) An entity is related to the Group if any of the following conditions applies:
(i) The entity and the Group are members of the same group (which means that each parent,
subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of
a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 479 ---
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the Group or
an entity related to the Group.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of which it is a part, provides key management personnel
services to the Group or to the Group’s parent.
Close members of the family of a person are those family members who may be expected to influence, or be
influenced by, that person in their dealings with the entity.
(z) Segment reporting
Operating segments, and the amounts of each segment item reported in the financial statements, are identified
from the financial information provided regularly to the Group’s most senior executive management for the purposes
of allocating resources to, and assessing the performance of, the Group’s various lines of business and geographical
locations.
Individually material operating segments are not aggregated for financial reporting purposes unless the
segments have similar economic characteristics and are similar in respect of the nature of products and services, the
nature of production processes, the type or class of customers, the methods used to distribute the products or provide
the services, and the nature of the regulatory environment. Operating segments which are not individually material
may be aggregated if they share a majority of these criteria.
3 ACCOUNTING JUDGEMENTS AND ESTIMATES
Notes 14, 27 and 32(e) contain information about the assumptions and their risk factors relating to goodwill
impairment, fair value of equity-settled share-based transactions and financial instruments. Other significant sources
of estimation uncertainty are as follows:
(a) Impairment of non-financial assets
If circumstances indicate that the carrying value of an asset may not be recoverable, the asset may be
considered “impaired”, and an impairment loss may be recognised in profit or loss. The carrying amounts of assets
are reviewed periodically in order to assess whether the recoverable amounts have declined below the carrying
amounts. These assets are tested for impairment whenever events or changes in circumstances indicate that their
recorded carrying amounts may not be recoverable. When such a decline has occurred, the carrying amount is reduced
to recoverable amount.
The recoverable amount is the greater of the fair value less costs to sell and the value in use. In determining
the value in use, expected cash flows generated by the asset are discounted to their present value, which requires
significant judgement relating to the expected future cash flows from the asset or cash-generating unit and choose
a suitable discount rate. The Group uses all readily available information in determining an amount that is a
reasonable approximation of recoverable amount, including estimates based on reasonable and supportable
assumptions and projections.
(b) Net realisable value of inventories
Net realisable value of inventories is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale. Special consideration is given to
estimate the selling price of those technically obsolete and/or slow-moving inventory items.
Management reassesses these estimations at the end of reporting period to ensure inventory is shown at the
lower of cost and net realisable value.
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 480 ---
(c) Deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will
be available against which the losses can be utilised. Significant management judgement is required to determine the
amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits
together with future tax planning strategies.
4 REVENUE AND SEGMENT REPORTING
(a) Revenue
The principal activities of the Group are mainly engaged in the manufacturing of core automation components,
motion control systems, industrial robots and intelligent manufacturing systems.
(i) Disaggregation of revenue
Disaggregation of revenue from contracts with customers by major products or service lines is as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue from contracts
with customers within
the scope of IFRS 15
Disaggregated by major
products or service
lines
– Industrial robots and
intelligent manufacturing
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,838,648 3,594,821 3,029,103 2,600,585 3,138,297
– Core automation
components and motion
control systems /H1118/H1118/H1118/H1118/H1118/H11181,025,480 1,040,015 976,276 767,066 662,495
Revenue from other
sources
– Rentals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,651 17,113 3,393 2,623 2,778
3,880,779 4,651,949 4,008,772 3,370,274 3,803,570
Disaggregation of revenue from contracts with customers by the timing of revenue recognition is as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Over time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118563,078 823,131 690,255 477,668 426,095
Point in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,301,050 3,811,705 3,315,124 2,889,983 3,374,697
3,864,128 4,634,836 4,005,379 3,367,651 3,800,792
Disaggregation of revenue from contracts with customers by geographic markets is disclosed in Note 4(b).
The Group’s customer base is diversified and includes nil, nil, nil, nil (unaudited) and two customers with
whom transactions have exceeded 10% of the Group’s revenues for the years ended 31 December 2022, 2023 and
2024 and for the nine months ended 30 September 2024 and 2025. During the nine months ended 30 September 2025,
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 481 ---
revenues from sales of products to each of these two customers, including sales to entities which are known to the
Group to be under common control with these customers, amounted to approximately RMB684,963,000 and
RMB510,377,000, respectively. Details of concentrations of credit risk arising from the customers are set out in Note
32(a).
(ii) Revenue expected to be recognised in the future arising from contracts with customers in existence at the
reporting date
The Group has applied the practical expedient in paragraph 121(a) of IFRS 15 to its sales contracts for goods
such that information about revenue expected to be recognised in the future is not disclosed in respect of revenue that
the Group will be entitled to when it satisfies the remaining performance obligations under the contracts for sales of
goods that had an expected duration of one year or less.
(b) Segment reporting
Operating segments are identified on the basis of internal reports that the Group’s most senior executive
management reviews regularly in allocating resources to segments and in assessing their performances.
The Group’s most senior executive management makes resources allocation decisions based on internal
management functions and assess the Group’s business performance as one integrated business instead of by separate
business lines or geographical regions. Accordingly, the Group has only one operating segment and therefore, no
segment information is presented.
(i) Geographical information
The following table sets out information about the geographical location of (i) the Group’s revenue from
external customers; and (ii) the Group’s property, plant and equipment, investment property, right-of-use assets,
intangible assets, goodwill and interests in associates (“specified non-current assets”). The revenue is generated from
Chinese Mainland and overseas markets, such as Europe, North America, and Asia during the Track Record Period,
and the geographic location of revenue is based on the geographic location of customers. The geographical location
of the specified non-current assets is based on the physical location of the assets, in the case of property, plant and
equipment, investment property and right-of-use assets, the location of the operations to which they are allocated, in
the case of intangible assets and goodwill, and the location of operations, in the case of interests in associates.
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue by geographical
region
Chinese Mainland /H1118/H1118/H1118/H1118/H1118/H11182,568,537 3,057,584 2,639,208 2,230,952 2,685,844
Overseas /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,312,242 1,594,365 1,369,564 1,139,322 1,117,726
3,880,779 4,651,949 4,008,772 3,370,274 3,803,570
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Specified non-current assets
Chinese Mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,522,827 1,973,947 1,948,199 1,940,927
Overseas /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,613,417 1,713,730 1,543,723 1,783,476
3,136,244 3,687,677 3,491,922 3,724,403
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 482 ---
5 OTHER NET INCOME
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest income from bank
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,040 9,807 15,493 11,910 9,702
Government grants (Note) /H1118 39,737 41,078 38,850 31,008 17,761
V alue-added tax super
deduction and refund /H1118/H1118/H111821,296 40,601 47,628 34,015 27,049
Realised and unrealised
gains on wealth
management products /H1118/H1118 18,284 23,008 15,602 7,190 10,239
Realised and unrealised
gains/(losses) on other
financial assets
measured at FVPL /H1118/H1118/H1118/H111852,828 30,718 (22,787) – 12,878
Net (losses)/gains on
disposal of property,
plant and equipment /H1118/H1118/H1118 (171) 1,000 (501) 3,801 (788)
Net gains on disposal of
interests in associates /H1118/H1118 – – 15,948 14,781 976
Net losses on disposal of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,316) (69) – – (3,765)
Net foreign exchange
gains/(losses) /H1118/H1118/H1118/H1118/H1118/H1118/H11189,205 (2,480) 7,971 2,935 (6,962)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(921) (4,513) 4,831 2,158 (3,882)
136,982 139,150 123,035 107,798 63,208
Note: Government grants mainly represent operating subsidies and amortisation of government grants for
capital expenditure including development and construction of property, plant and equipment.
6 PROFIT/(LOSS) BEFORE TAXATION
Profit/(loss) before taxation is arrived at after charging/(crediting):
(a) Finance costs
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on bank loans and
other borrowings /H1118/H1118/H1118/H1118/H111871,793 109,823 125,983 88,315 110,528
Interest on discounted
bills /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,256 11,901 19,281 13,974 –
Interest on lease liabilities /H1118 2,229 2,062 1,866 1,620 3,714
Interest on defined benefit
plans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,712 6,752 7,063 – 5,245
93,990 130,538 154,193 103,909 119,487
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 483 ---
(b) Staff costs
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Contributions to defined
contribution retirement
plans (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,878 77,921 81,977 46,399 60,592
Expenses recognised in
respect of defined
benefit plans (Note 26) /H1118 7,173 9,205 9,440 – 6,794
Equity-settled share-based
payment expenses /H1118/H1118/H1118/H111810,253 6,502 10,451 11,384 14,450
Salaries, wages and other
benefits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118749,070 898,567 966,544 746,824 696,023
831,374 992,195 1,068,412 804,607 777,859
Note: Employees of the Group are required to participate in a defined contribution retirement plan
administered and operated by the local municipal government. The Group contributes funds which are
calculated on certain percentages of the employee salary as agreed by the local municipal government
to the scheme to fund the retirement benefits of the employees.
(c) Other items
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Amortisation cost of intangible
assets (Note 13) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,999 43,686 63,961 46,519 46,781
Amortisation cost of long-term
deferred expenses /H1118/H1118/H1118/H1118/H1118/H1118/H111814,320 16,407 17,727 4,115 7,572
Depreciation charge
– property, plant and
equipment (Note 11) /H1118/H1118/H1118/H1118/H111862,679 71,449 93,469 73,221 77,369
– right-of-use assets (Note 12) /H1118 18,619 19,458 23,897 15,787 19,571
– investment property /H1118/H1118/H1118/H1118/H1118/H1118–––– 5 0 2
81,298 90,907 117,366 89,008 97,442
Provision for/(reversal of)
impairment loss on financial
assets
– trade receivables and
contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,888 29,579 62,689 21,603 (4,813)
– other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,629 (2,702) 1,848 (1,002) (275)
47,517 26,877 64,537 20,601 (5,088)
Impairment loss on non-
financial assets
– intangible assets (Note 13) /H1118/H1118 – – 15,603 – –
– goodwill (Note 14) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 344,864 – –
– – 360,467 – –
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1,128
Research and development
expenses (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118307,580 388,468 442,233 306,610 318,511
Cost of inventories (ii) /H1118/H1118/H1118/H1118/H11182,604,561 3,196,854 2,874,742 2,364,083 2,732,855
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 484 ---
Notes:
(i) During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September
2024 and 2025, research and development expenses include staff costs, depreciation and amortisation
expenses of RMB267,876,000, RMB335,501,000, RMB396,985,000, RMB279,124,000 (unaudited) and
RMB289,327,000, respectively, which amounts are also included in the respective total amounts
disclosed separately above or in Note 6(b) for each of these types of expenses.
(ii) During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September
2024 and 2025, cost of inventories includes staff costs, depreciation and amortisation expenses, which
amounts are also included in the respective total amounts disclosed separately above or in Note 6(b) for
each of these types of expenses.
7 INCOME TAX IN THE CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
(a) Taxation in the consolidated statements of profit or loss represents:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current tax:
Provision for the year/period /H1118/H1118 50,044 59,891 35,686 28,065 14,357
Deferred tax:
Origination and reversal of
temporary differences
(Note 28(b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,005 (25,981) 6,475 (2,798) 15,773
80,049 33,910 42,161 25,267 30,130
(b) Reconciliation between tax expense and accounting profit/(loss) at applicable tax rates:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit/(loss) before
taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118263,608 167,537 (775,524) (36,892) 59,830
National tax on
profit/(loss) before
taxation, calculated at
the rates applicable to
profits in the countries
or jurisdictions
concerned (Note) /H1118/H1118/H1118/H1118/H111850,762 40,965 (63,988) (1,105) 13,459
Effect of adjustment to
income tax of prior
periods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,882 (480) 11,268 1,162 (821)
Tax effect of non-taxable
gain or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,731 2,281 (7,107)
Tax effect of non-
deductible expenses /H1118/H1118/H1118 7,202 2,611 3,309 2,862 3,691
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 485 ---
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Tax effect of tax losses
and temporary
differences not
recognised and effect of
using deductible losses
for which deferred tax
assets were previously
not recognised /H1118/H1118/H1118/H1118/H1118/H1118/H11185,325 27,370 135,301 43,992 55,766
Tax effect of super
deduction for research
and development costs /H1118/H1118 (28,058) (40,284) (46,058) (22,685) (33,892)
Tax effect of taxable
income arising from
business combination
under common control /H1118/H1118 43,965 2,590 – (1,240) (966)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,029) 1,138 (402) – –
Actual tax expense /H1118/H1118/H1118/H1118/H111880,049 33,910 42,161 25,267 30,130
Notes:
(i) According to the Corporate Income Tax Law of China, the Group’s subsidiaries in Chinese Mainland are
subject to statutory income tax rate of 25%, except for those which are entitled to a preferential tax rate
applicable to advanced and new technology enterprises of 15%.
(ii) Pursuant to the rules and regulations of Germany, Cloos Holding GmbH and Carl Cloos Schweißtechnik
GmbH (“Carl Cloos”) are subject to the German Income Tax at a rate of 28.25% at an average during
the Track Record Period (15.00% for corporate income tax, 0.825% for solidarity surcharge and
12.425% for trade income tax), while M.A.i GmbH & Co. KG (“M.A.i”) is subject to the German
Income Tax at a rate of 27.90% at an average during the Track Record Period (15.00% for corporate
income tax, 0.825% for solidarity surcharge and 12.075% for trade income tax).
(iii) Taxation of other subsidiaries are charged at the prevailing rates of respectively in the relevant countries
or jurisdictions and are calculated on a stand-alone basis.
8 DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS
Directors’ and Supervisors’ emoluments as recorded in the financial statements are set out below:
Y ear ended 31 December 2022
Directors’
fees
Salaries,
allowances
and other
benefits
Discretionary
bonuses
Retirement
scheme
contributions Sub-Total
Share-based
payment (iii) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive
directors
Mr. Wu Bo /H1118/H1118/H1118/H1118/H1118–––––––
Mr. Wu Kan /H1118/H1118/H1118/H1118– 927 144 42 1,113 – 1,113
Mr. Zhu Chunhua /H1118 – 773 144 42 959 120 1,079
Mr. Zhou Ailin /H1118/H1118 – 771 144 42 957 120 1,077
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 486 ---
Y ear ended 31 December 2022
Directors’
fees
Salaries,
allowances
and other
benefits
Discretionary
bonuses
Retirement
scheme
contributions Sub-Total
Share-based
payment (iii) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Ms. Y uan Qin
(resigned on
29 April 2022) /H1118 – 246 131 14 391 – 391
Mr. He Lingjun
(appointed on
7 July 2022) /H1118/H1118 – 1,162 – 42 1,204 179 1,383
Mr. Qian Wei /H1118/H1118/H1118 – 895 178 65 1,138 60 1,198
Independent
non-executive
directors
Mr. Li Xiang /H1118/H1118/H1118 1 0 0––– 1 0 0– 1 0 0
Mr. Feng Hutian /H1118 1 0 0––– 1 0 0– 1 0 0
Dr. Tang
Wencheng /H1118/H1118/H1118/H11181 0 0––– 1 0 0– 1 0 0
Supervisors
Ms. Wang Jiamin
(resigned on
18 April 2022) /H1118 –4 33 6 38 2 –8 2
Mr. Sang Zhimin
(appointed
18 April 2022) /H1118 – 151 13 17 181 – 181
Ms. Gu Xiaoxia /H1118/H1118 – 222 31 20 273 – 273
Ms. Cheng
Xiujuan /H1118/H1118/H1118/H1118/H1118– 150 12 16 178 – 178
300 5,340 833 303 6,776 479 7,255
Y ear ended 31 December 2023
Directors’
fees
Salaries,
allowances
and other
benefits
Discretionary
bonuses
Retirement
scheme
contributions Sub-Total
Share-based
payment (iii) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive
directors
Mr. Wu Bo /H1118/H1118/H1118/H1118/H1118–––––––
Mr. Wu Kan /H1118/H1118/H1118/H1118– 923 196 46 1,165 – 1,165
Mr. Zhu Chunhua /H1118 – 784 144 46 974 155 1,129
Mr. Zhou Ailin /H1118/H1118 – 783 144 46 973 155 1,128
Mr. He Lingjun /H1118/H1118 – 1,166 210 46 1,422 233 1,655
Mr. Qian Wei
(resigned on
19 July 2023) /H1118/H1118 – 491 185 35 711 45 756
Ms. Chen Yinlan
(appointed on
19 July 2023) /H1118/H1118 – 189 51 16 256 98 354
Independent
non-executive
directors
Mr. Feng Hutian /H1118 1 0 0––– 1 0 0– 1 0 0
Dr. Tang
Wencheng /H1118/H1118/H1118/H11181 0 0––– 1 0 0– 1 0 0
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 487 ---
Y ear ended 31 December 2023
Directors’
fees
Salaries,
allowances
and other
benefits
Discretionary
bonuses
Retirement
scheme
contributions Sub-Total
Share-based
payment (iii) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Mr. Li Xiang
(resigned on
19 July 2023) /H1118/H1118 5 0––– 5 0– 5 0
Mr. Chen Heng
(appointed on
19 July 2023) /H1118/H1118 5 0––– 5 0– 5 0
Supervisors
Ms. Gu Xiaoxia /H1118/H1118 – 252 102 22 376 – 376
Ms. Cheng
Xiujuan /H1118/H1118/H1118/H1118/H1118– 174 13 18 205 – 205
Mr. Sang Zhimin /H1118 – 207 21 25 253 – 253
300 4,969 1,066 300 6,635 686 7,321
Y ear ended 31 December 2024
Directors’
fees
Salaries,
allowances
and other
benefits
Discretionary
bonuses
Retirement
scheme
contributions Sub-Total
Share-based
payment (iii) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive
directors
Mr. Wu Bo /H1118/H1118/H1118/H1118/H1118–––––––
Mr. Wu Kan /H1118/H1118/H1118/H1118– 922 228 47 1,197 – 1,197
Mr. Zhu Chunhua /H1118 – 768 124 47 939 155 1,094
Mr. Zhou Ailin /H1118/H1118 – 766 186 47 999 155 1,154
Mr. He Lingjun /H1118/H1118 – 1,163 293 47 1,503 233 1,736
Ms. Chen Yinlan /H1118 – 457 106 38 601 98 699
Independent
non-executive
directors
Mr. Feng Hutian /H1118 1 0 0––– 1 0 0– 1 0 0
Dr. Tang
Wencheng /H1118/H1118/H1118/H11181 0 0––– 1 0 0– 1 0 0
Mr. Chen Heng /H1118/H1118 1 0 0––– 1 0 0– 1 0 0
Supervisors
Ms. Gu Xiaoxia /H1118/H1118 – 267 101 28 396 – 396
Ms. Cheng
Xiujuan /H1118/H1118/H1118/H1118/H1118– 173 14 19 206 – 206
Mr. Sang Zhimin /H1118 – 194 31 25 250 – 250
300 4,710 1,083 298 6,391 641 7,032
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 488 ---
Nine months ended 30 September 2024
Directors’
fees
Salaries,
allowances
and other
benefits
Discretionary
bonuses
Retirement
scheme
contributions Sub-Total
Share-based
payment (iii) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Executive
directors
Mr. Wu Bo /H1118/H1118/H1118/H1118/H1118–––––––
Mr. Wu Kan /H1118/H1118/H1118/H1118– 691 171 35 897 – 897
Mr. Zhu Chunhua /H1118 – 575 93 35 703 117 820
Mr. Zhou Ailin /H1118/H1118 – 574 140 35 749 117 866
Mr. He Lingjun /H1118/H1118 – 872 219 35 1,126 175 1,301
Ms. Chen Yinlan /H1118 – 342 79 29 450 73 523
Independent
non-executive
directors
Mr. Feng Hutian /H1118 7 5––– 7 5– 7 5
Mr. Tang
Wencheng /H1118/H1118/H1118/H11187 5––– 7 5– 7 5
Mr. Chen Heng /H1118/H1118 7 5––– 7 5– 7 5
Supervisors
Ms. Gu Xiaoxia /H1118/H1118 – 200 75 21 296 – 296
Ms. Cheng
Xiujuan /H1118/H1118/H1118/H1118/H1118– 130 11 14 155 – 155
Mr. Sang Zhimin /H1118 – 145 23 19 187 – 187
225 3,529 811 223 4,788 482 5,270
Nine months ended 30 September 2025
Directors’
fees
Salaries,
allowances
and other
benefits
Discretionary
bonuses
Retirement
scheme
contributions Sub-Total
Share-based
payment (iii) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive
directors
Mr. Wu Bo /H1118/H1118/H1118/H1118/H1118–––––––
Mr. Wu Kan /H1118/H1118/H1118/H1118– 691 – 35 726 – 726
Mr. Zhu Chunhua /H1118 – 639 – 35 674 186 860
Mr. Zhou Ailin /H1118/H1118 – 574 – 35 609 186 795
Mr. He Lingjun /H1118/H1118 – 873 – 35 908 245 1,153
Non-executive
directors
Ms. Chen
Yinlan (i) /H1118/H1118/H1118/H1118– 351 – 29 380 143 523
Independent
non-executive
directors
Mr. Feng Hutian
(resigned on
20 June 2025) /H1118 5 0––– 5 0– 5 0
Mr. Tang
Wencheng /H1118/H1118/H1118/H11188 8––– 8 8– 8 8
Mr. Chen Heng
(resigned on
20 June 2025) /H1118 5 0––– 5 0– 5 0
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 489 ---
Nine months ended 30 September 2025
Directors’
fees
Salaries,
allowances
and other
benefits
Discretionary
bonuses
Retirement
scheme
contributions Sub-Total
Share-based
payment (iii) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Ms. Han Xiaofang
(appointed on
20 June 2025) /H1118 3 8––– 3 8– 3 8
Mr. Lin Jinjun
(appointed on
20 June 2025) /H1118 3 8––– 3 8– 3 8
Supervisors
Ms. Gu
Xiaoxia (ii) /H1118/H1118/H1118 – 128 31 14 173 – 173
Ms. Cheng
Xiujuan (ii) /H1118/H1118/H1118 – 85 2 10 97 – 97
Mr. Sang
Zhimin (ii) /H1118/H1118/H1118 – 9 38 1 3 1 1 4– 1 1 4
264 3,434 41 206 3,945 760 4,705
Notes:
(i) Ms. Chen Yinlan was appointed as an executive director on 19 July 2023 and became a non-executive director
of the Company on 20 June 2025.
(ii) The board of directors of the Company set up the audit committee on 20 June 2025 to exercise the duties of
supervisors under the Company Law of the PRC. Accordingly, Ms. Gu Xiaoxia, Ms. Cheng Xiujuan and
Mr. Sang Zhimin resigned as supervisors of the Company on 20 June 2025.
(iii) These represent the estimated value of share-based payment granted to the directors under the Company’s
share-based payment scheme as set out in Note 27. The value of these share-based payment is measured
according to the Group’s accounting policies for share-based payment transactions as set out in Note 2(s)(iii)
and, in accordance with that policy, includes adjustments to reverse amounts accrued in previous years where
grants of equity instruments are forfeited prior to vesting. The details of these benefits in kind, including the
principal terms and number of share-based payment granted, are disclosed in Note 27.
During the Track Record Period, no director or chief executive has waived or agreed to waive any emoluments
and no amounts were paid or payable by the Group to the directors and the chief executive as an inducement to join
or upon joining the Group or as compensation for loss of any office in connection with the management of the affairs
of any member of the Group.
9 INDIVIDUALS WITH HIGHEST EMOLUMENTS
Of the five individuals with the highest emoluments, nil, nil, 1, 1 (unaudited), nil are directors during the years
ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2024 and 2025, respectively,
whose emoluments are disclosed in Note 8. The aggregate of the emoluments in respect of the remaining individuals
are as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries and other
emoluments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,798 11,436 8,745 6,687 8,112
Share-based payments /H1118/H1118/H1118 360 233 233 175 566
Retirement scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118226 311 259 198 245
10,384 11,980 9,237 7,060 8,923
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 490 ---
The emoluments of the 5, 5, 4, 4 (unaudited) and 5 individuals with the highest emoluments are within the
following bands:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
(unaudited)
Hong Kong Dollar
(“HKD”)
Nil – HKD1,000,000 /H1118/H1118/H1118/H1118 –––––
HKD1,000,001 –
HKD1,500,000 /H1118/H1118/H1118/H1118/H1118/H1118––––2
HKD1,500,001 –
HKD2,000,000 /H1118/H1118/H1118/H1118/H1118/H111821–21
HKD2,000,001 –
HKD2,500,000 /H1118/H1118/H1118/H1118/H1118/H111822222
HKD2,500,001 –
HKD3,000,000 /H1118/H1118/H1118/H1118/H1118/H1118––2––
HKD3,000,001 –
HKD3,500,000 /H1118/H1118/H1118/H1118/H1118/H1118–1–––
HKD3,500,001 –
HKD4,000,000 /H1118/H1118/H1118/H1118/H1118/H1118–1–––
HKD4,000,001 –
HKD4,500,000 /H1118/H1118/H1118/H1118/H1118/H11181––––
10 EARNINGS/(LOSS) PER SHARE
(a) Basic earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to the equity shareholders
of the Company by the weighted average number of ordinary shares in issue for the Track Record Period as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit/(loss) for the
year/period attributable
to equity shareholders of
the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118166,780 135,672 (810,929) (67,119) 25,372
Effect of the restricted
share units /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(63) ––––
166,717 135,672 (810,929) (67,119) 25,372
Weighted average number of ordinary shares:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
’000 ’000 ’000 ’000 ’000
(unaudited)
Issued ordinary shares at
the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118868,638 869,115 869,531 869,531 869,531
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 491 ---
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
’000 ’000 ’000 ’000 ’000
(unaudited)
Effect of treasury shares at
the beginning of the
year/period (Note 31(d)) /H1118 (12,360) (4,622) (2,513) (2,513) (2,513)
Effect of shares
repurchased during the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(860) ––––
Effect of shares issued
under share reward
scheme (Note 27) /H1118/H1118/H1118/H1118/H11183,615 1,15 5–––
Effect of shares issued
under share option
scheme (Note 27) /H1118/H1118/H1118/H1118/H11184 2 9 3 2 1–––
Weighted average number
of ordinary shares at the
end of the year/period /H1118/H1118 859,462 865,969 867,018 867,018 867,018
(b) Diluted loss per share
For the years ended 31 December 2024 and the nine months ended 30 September 2024 and 2025, the restricted
shares and share options (Note 27) were not included in the calculation of diluted loss per share because their
inclusion would have been anti-dilutive. The Company does not have other potential ordinary shares and therefore
the amount of diluted loss per share is the same as basic loss per share.
For the years ended 31 December 2022 and 2023, the diluted earnings per share is calculated by dividing the
above profit attributable to the equity shareholders of the Company by the weighted average number of ordinary
shares after adjusting the effect of dilutive potential ordinary shares in respect of the Company’s equity-settled
share-based payment schemes for the Track Record Period as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
’000 ’000 ’000 ’000 ’000
(unaudited)
Weighted average number
of ordinary shares at the
end of the year/period /H1118/H1118 859,462 865,969 867,018 867,018 867,018
Effect of deemed issue of
shares under the
Company’s share reward
schemes (Note 27) /H1118/H1118/H1118/H11182,984 82 3–––
Effect of deemed issue of
shares under the
Company’s share option
scheme (Note 27) /H1118/H1118/H1118/H1118/H11187 5 8 1 6 7–––
Weighted average number
of ordinary shares at the
end of the year/period
(diluted) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118863,204 866,959 867,018 867,018 867,018
APPENDIX I ACCOUNTANTS’ REPORT
– I-43 –


--- page 492 ---
11 PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTY
The Group
Freehold
land
Plant and
buildings
Machinery
and
equipment
Motor
vehicles
Office
equipment
and others
Construction
in progress Sub-total
Investment
property Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 /H1118/H1118/H111837,059 664,920 363,541 19,238 155,137 46,806 1,286,701 – 1,286,701
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,585 51,951 1,092 15,558 121,262 194,448 – 194,448
Transferred from
construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118– 37,630 21,220 – 945 (59,795) – – –
Transferred to
intangible assets /H1118/H1118/H1118 – – – – – (3,512) (3,512) – (3,512)
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,830) (16) (11,594) (1,135) (3,234) (1,113) (18,922) – (18,922)
Disposal of
subsidiaries /H1118/H1118/H1118/H1118/H1118– (14,461) (18,481) – (10,492) – (43,434) – (43,434)
Exchange adjustments /H1118 679 6,026 2,829 299 2,832 214 12,879 – 12,879
At 31 December 2022
and 1 January 2023 /H1118 35,908 698,684 409,466 19,494 160,746 103,862 1,428,160 – 1,428,160
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 46,744 51,270 1,536 19,277 349,205 468,032 – 468,032
Transferred from
construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118– 234,653 36,776 – 5,153 (276,582) – – –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,471) (1,144) (1,543) (10,071) (1,234) (15,463) – (15,463)
Exchange adjustments /H1118 1,570 11,560 4,389 655 7,467 1,783 27,424 – 27,424
At 31 December 2023
and 1 January 2024 /H1118 37,478 990,170 500,757 20,142 182,572 177,034 1,908,153 – 1,908,153
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 58,563 63,224 1,284 22,107 169,691 314,869 – 314,869
Transferred from
construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118– 271,249 24,232 – 794 (296,275) – – –
Transferred to
intangible assets /H1118/H1118/H1118 – – – – – (5,317) (5,317) – (5,317)
Acquisition of a
subsidiary /H1118/H1118/H1118/H1118/H1118– – 62 296 60 – 418 – 418
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (15,045) (12,050) (1,002) (12,149) (1,234) (41,480) – (41,480)
Exchange adjustments /H1118 (1,120) (11,381) (4,137) (483) (5,646) (1,718) (24,485) – (24,485)
At 31 December 2024
and 1 January 2025 /H1118 36,358 1,293,556 572,088 20,237 187,738 42,181 2,152,158 – 2,152,158
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 15,888 19,441 1,308 8,946 139,959 185,542 – 185,542
Transferred from
construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118– 11,012 6,904 – 602 (18,518) – – –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (96) (8,568) (1,852) (2,227) – (12,743) – (12,743)
Disposal of
subsidiaries /H1118/H1118/H1118/H1118/H1118– (37,964) (4,469) (794) (6,412) (166) (49,805) – (49,805)
Transferred to
investment property /H1118 – (53,640) – – – – (53,640) 53,640 –
Exchange adjustments /H1118 2,803 22,366 6,933 (435) 14,379 1,329 47,375 – 47,375
At 30 September 2025 /H1118 39,161 1,251,122 592,329 18,464 203,026 164,785 2,268,887 53,640 2,322,527- - - - ----- - ---- ---- ----- - - - - - ---- - - - - -----
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 493 ---
Freehold
land
Plant and
buildings
Machinery
and
equipment
Motor
vehicles
Office
equipment
and others
Construction
in progress Sub-total
Investment
property Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Accumulated
depreciation:
At 1 January 2022 /H1118/H1118/H1118 – (172,806) (187,000) (16,154) (113,319) – (489,279) – (489,279)
Charge for the year /H1118/H1118 – (16,023) (32,096) (617) (13,943) – (62,679) – (62,679)
Written back on
disposals /H1118/H1118/H1118/H1118/H1118/H1118– 16 7,019 727 2,513 – 10,275 – 10,275
Disposal of
subsidiaries /H1118/H1118/H1118/H1118/H1118– 11,511 16,536 – 8,336 – 36,383 – 36,383
Exchange adjustments /H1118 – (2,907) (1,336) (254) (2,196) – (6,693) – (6,693)
At 31 December 2022
and 1 January 2023 /H1118 – (180,209) (196,877) (16,298) (118,609) – (511,993) – (511,993)
Charge for the year /H1118/H1118 – (19,855) (34,303) (790) (16,501) – (71,449) – (71,449)
Written back on
disposals /H1118/H1118/H1118/H1118/H1118/H1118– 1,365 970 1,382 9,662 – 13,379 – 13,379
Exchange adjustments /H1118 – (5,608) (4,035) (565) (6,036) – (16,244) – (16,244)
At 31 December 2023
and 1 January 2024 /H1118 – (204,307) (234,245) (16,271) (131,484) – (586,307) – (586,307)
Charge for the year /H1118/H1118 – (28,546) (45,262) (925) (18,736) – (93,469) – (93,469)
Written back on
disposals /H1118/H1118/H1118/H1118/H1118/H1118– 7,348 7,318 1,005 10,793 – 26,464 – 26,464
Acquisition of a
subsidiary /H1118/H1118/H1118/H1118/H1118– – (58) (196) (48) – (302) – (302)
Exchange adjustments /H1118 – 4,768 3,289 415 6,261 – 14,733 – 14,733
At 31 December 2024
and 1 January 2025 /H1118 – (220,737) (268,958) (15,972) (133,214) – (638,881) – (638,881)
Charge for the period /H1118 – (25,110) (38,968) (2,393) (10,898) – (77,369) (502) (77,871)
Written back on
disposals /H1118/H1118/H1118/H1118/H1118/H1118– – 6,325 1,423 1,703 – 9,451 – 9,451
Disposal of
subsidiaries /H1118/H1118/H1118/H1118/H1118– 11,369 3,806 550 4,394 – 20,119 – 20,119
Transferred to
investment property /H1118 – 312 – – – – 312 (312) –
Exchange adjustments /H1118 – (10,108) (6,682) (227) (10,786) – (27,803) – (27,803)
At 30 September 2025 /H1118 – (244,274) (304,477) (16,619) (148,801) – (714,171) (814) (714,985)---- ----- ----- ---- ----- ---- ----- ---- -----
Net book value:
At 31 December 2022 /H1118 35,908 518,475 212,589 3,196 42,137 103,862 916,167 – 916,167
At 31 December 2023 /H1118 37,478 785,863 266,512 3,871 51,088 177,034 1,321,846 – 1,321,846
At 31 December 2024 /H1118 36,358 1,072,819 303,130 4,265 54,524 42,181 1,513,277 – 1,513,277
At 30 September 2025 /H1118 39,161 1,006,848 287,852 1,845 54,225 164,785 1,554,716 52,826 1,607,542
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 494 ---
The Company
Plant and
buildings
Machinery
and equipment
Motor
vehicles
Office
equipment
and others
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118274,046 205,540 1,763 15,720 21,452 518,521
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,086 27,300 699 3,663 71,067 105,815
Transferred from construction
in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,121 3,379 – 945 (41,445) –
Transferred to intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (3,302) (3,302)
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2,617) – (131) (907) (3,655)
At 31 December 2022 and
1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118314,253 233,602 2,462 20,197 46,865 617,379
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,885 49,549 659 1,763 193,166 269,022
Transferred from construction
in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118195,405 28,848 – – (224,253) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (282) (18) – (8) (308)
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118533,543 311,717 3,103 21,960 15,770 886,093
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,109 42,753 – 1,646 11,270 64,778
Transferred from construction
in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,579 20,821 – 75 (24,475) –
Transferred to intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (947) (947)
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2,577) – (3,442) (87) (6,106)
At 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118546,231 372,714 3,103 20,239 1,531 943,818
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,258 8,830 – 542 8,768 25,398
Transferred from construction
in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,094 891 – – (1,985) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (138,753) (493) (237) – (139,483)
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118554,583 243,682 2,610 20,544 8,314 829,733------ ------ ----- ------ ------ -------Accumulated depreciation:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,374) (69,940) (1,458) (10,562) – (100,334)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,832) (22,117) (98) (2,171) – (29,218)
Written back on disposals /H1118/H1118/H1118 – 910 – 119 – 1,029
At 31 December 2022 and
1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(23,206) (91,147) (1,556) (12,614) – (128,523)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,357) (23,098) (255) (2,428) – (34,138)
Written back on disposals /H1118/H1118/H1118 – 234 16 – – 250
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(31,563) (114,011) (1,795) (15,042) – (162,411)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,403) (31,327) (304) (2,510) – (47,544)
Written back on disposals /H1118/H1118/H1118 – 1,637 – 3,095 – 4,732
At 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(44,966) (143,701) (2,099) (14,457) – (205,223)
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118(10,230) (19,589) (228) (1,467) – (31,514)
Written back on disposals /H1118/H1118/H1118 – 57,154 444 207 – 57,805
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118(55,196) (106,136) (1,883) (15,717) – (178,932)------ ------ ----- ------ ------ ------Net book value:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118291,047 142,455 906 7,583 46,865 488,856
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118501,980 197,706 1,308 6,918 15,770 723,682
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118501,265 229,013 1,004 5,782 1,531 738,595
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118499,387 137,546 727 4,827 8,314 650,801
Note: The Group was in the process of applying for the ownership certificates for certain buildings with an aggregate
carrying value of RMB267,527,000, RMB216,574,000 and RMB284,147,000 and RMB237,777,000
respectively as at 31 December 2022, 2023 and 2024 and 30 September 2025. The directors of the Company
are of the opinion that the Group is entitled to legally and validly occupy and use of these buildings.
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 495 ---
12 RIGHT-OF-USE ASSETS
The Group
Leasehold land
Plant and
buildings
Machinery and
equipment Total
RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118175,672 67,177 28,511 271,360
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,086 – 5,977 24,063
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,570) – (1,570)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,076 568 2,644
At 31 December 2022 and 1 January 2023 /H1118 193,758 67,683 35,056 296,497
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,338 4,013 1,771 37,122
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (8,889) (1,945) (10,834)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,437 1,491 5,928
At 31 December 2023 and 1 January 2024 /H1118 225,096 67,244 36,373 328,713
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 39,995 11,476 51,471
Acquisition of a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 953 – 953
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (3,694) (1,523) (5,217)
At 31 December 2024 and 1 January 2025 /H1118 225,096 104,498 46,326 375,920
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 10,600 3,604 14,231
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (24,743) (3,176) (27,919)
Disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,775) – – (10,775)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 10,007 4,720 14,727
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118214,348 100,362 51,474 366,184------ ------ ------ ------
Accumulated depreciation:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28,916) (10,603) (11,713) (51,232)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,675) (8,490) (6,454) (18,619)
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 494 – 494
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (586) 213 (373)
At 31 December 2022 and 1 January 2023 /H1118 (32,591) (19,185) (17,954) (69,730)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,855) (9,192) (5,411) (19,458)
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,657 697 4,354
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (661) (1,750) (2,411)
At 31 December 2023 and 1 January 2024 /H1118 (37,446) (25,381) (24,418) (87,245)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,912) (11,485) (7,500) (23,897)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,548 1,430 2,978
At 31 December 2024 and 1 January 2025 /H1118 (42,358) (35,318) (30,488) (108,164)
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,606) (9,737) (6,228) (19,571)
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 11,108 1,277 12,385
Disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,006 – – 3,006
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (3,180) (2,754) (5,934)
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(42,958) (37,127) (38,193) (118,278)------ ------ ------ ------
Net book value:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118161,167 48,498 17,102 226,767
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118187,650 41,863 11,955 241,468
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118182,738 69,180 15,838 267,756
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118171,390 63,235 13,281 247,906
APPENDIX I ACCOUNTANTS’ REPORT
– I-47 –


--- page 496 ---
The Company
Leasehold land Plant and buildings Total
RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022, 31 December 2022, 31 December
2023, 31 December 2024 and 30 September 2025 /H1118/H1118/H1118 87,537 51,988 139,525------ ------ ------
Accumulated depreciation:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,695) (10,398) (22,093)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,750) (10,398) (12,148)
At 31 December 2022 and 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,445) (20,796) (34,241)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,750) (10,398) (12,148)
At 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,195) (31,194) (46,389)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,751) (10,398) (12,149)
At 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(16,946) (41,592) (58,538)
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,313) (7,798) (9,111)
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,259) (49,390) (67,649)------ ------ ------
Net book value:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874,092 31,192 105,284
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,342 20,794 93,136
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,591 10,396 80,987
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,278 2,598 71,876
The analysis of expense items in relation to leases recognised in profit or loss of the Group is as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Depreciation charge of
right-of-use assets by
class of underlying
asset:
Leasehold land /H1118/H1118/H1118/H1118/H1118/H11183,675 4,855 4,912 3,684 3,606
Plant and buildings /H1118/H1118/H1118/H11188,490 9,192 11,485 7,717 9,737
Machinery and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,454 5,411 7,500 4,386 6,228
18,619 19,458 23,897 15,787 19,571
Interest on lease liabilities /H1118 2,229 2,062 1,866 1,620 3,714
Expense relating to short-
term leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,531 26,296 15,966 7,510 6,764
Details of total cash outflows for leases and the maturity analysis of lease liabilities are set out in Notes 22(d)
and 25, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 497 ---
13 INTANGIBLE ASSETS
The Group
Software
Non-
patented
technologies Concessions
Patented
technologies Trademarks
Development
costs Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,563 263,745 4,246 29,630 63,728 65,614 499,526
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,757 – 451 330 – 94,044 114,582
Addition through internal
development /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 51,82 4––– (51,824) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,040) – (468) – – – (1,508)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118(3,786) (563) 11 9––– (4,230)
At 31 December 2022 and
1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,494 315,006 4,348 29,960 63,728 107,834 608,370
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,28 1–––– 1 15,649 139,930
Addition through internal
development /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 164,50 9––– (164,509) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(315) ––––– (315)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H11181,336 2,526 25 6––– 4 , 1 1 8
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118112,796 482,041 4,604 29,960 63,728 58,974 752,103
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,261 – 115 – – 60,684 85,060
Addition through internal
development /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 70,93 4––– (70,934) –
Transferred from construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,31 7––––– 5,317
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,217) ––––– (1,217)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118(2,614) (3,217) (198) – – – (6,029)
At 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,543 549,758 4,521 29,960 63,728 48,724 835,234
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,974 282 626 – – 35,703 41,585
Addition through internal
development /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,93 3––– (1,933) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(48) ––––– (48)
Disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118(1,354) (1,825) – (9,638) – – (12,817)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H11188,547 3,413 486 – – 892 13,338
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118150,662 553,561 5,633 20,322 63,728 83,386 877,292----- - ----- - - - - ----- - - - - ----- - -----
Accumulated amortisation and
impairment:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(51,670) (55,760) (3,627) (7,670) – – (118,727)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,423) (19,145) (465) (2,966) – – (37,999)
Written back on disposals /H1118/H1118/H1118/H11188 3 0– 1 0 2––– 9 3 2
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H11182,649 (54) (107) – – – 2,488
At 31 December 2022 and
1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(63,614) (74,959) (4,097) (10,636) – – (153,306)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,373) (33,336) (74) (2,903) – – (43,686)
Written back on disposals /H1118/H1118/H1118/H11182 9 7––––– 2 9 7
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118(1,621) (186) (243) – – – (2,050)
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(72,311) (108,481) (4,414) (13,539) – – (198,745)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,566) (49,135) (203) (3,057) – – (63,961)
Impairment loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (15,603) –––– (15,603)
Written back on disposals /H1118/H1118/H1118/H11181,21 7––––– 1,217
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H11181,420 748 19 2––– 2,360
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 498 ---
Software
Non-
patented
technologies Concessions
Patented
technologies Trademarks
Development
costs Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(81,240) (172,471) (4,425) (16,596) – – (274,732)
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118(5,391) (39,199) (154) (2,037) – – (46,781)
Written back on disposals /H1118/H1118/H1118/H1118 4 8––––– 4 8
Disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118587 1,034 – 7,309 – – 8,930
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118(2,512) (1,260) (476) – – – (4,248)
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118(88,508) (211,896) (5,055) (11,324) – – (316,783)
----- ------ ---- ----- ---- ----- ------
Net book value:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H111823,880 240,047 251 19,324 63,728 107,834 455,064
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H111840,485 373,560 190 16,421 63,728 58,974 553,358
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H111857,303 377,287 96 13,364 63,728 48,724 560,502
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H111862,154 341,665 578 8,998 63,728 83,386 560,509
The Company
Software
Non-patented
technologies
Development
costs Total
RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,719 85,138 45,744 153,601
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,229 – 57,940 75,169
Addition through internal development /H1118/H1118/H1118 – 29,201 (29,201) –
At 31 December 2022 and 1 January 2023 /H1118 39,948 114,339 74,483 228,770
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,171 – 60,398 61,569
Addition through internal development /H1118/H1118/H1118 – 113,789 (113,789) –
At 31 December 2023 and 1 January 2024 /H1118 41,119 228,128 21,092 290,339
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,121 – 33,692 45,813
Addition through internal development /H1118/H1118/H1118 – 34,351 (34,351) –
At 31 December 2024 and 1 January 2025 /H1118 53,240 262,479 20,433 336,152
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,038 – 18,542 20,580
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,278 262,479 38,975 356,732------ ------ ------ ------
Accumulated amortisation and
impairment:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,008) (5,891) – (23,899)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,175) (1,561) – (13,736)
At 31 December 2022 and 1 January 2023 /H1118 (30,183) (7,452) – (37,635)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,036) (13,986) – (18,022)
At 31 December 2023 and 1 January 2024 /H1118 (34,219) (21,438) – (55,657)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,504) (24,657) – (29,161)
Impairment loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (6,241) – (6,241)
At 31 December 2024 and 1 January 2025 /H1118 (38,723) (52,336) – (91,059)
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,182) (19,225) – (23,407)
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(42,905) (71,561) – (114,466)------ ------ ------ ------
Net book value:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,765 106,887 74,483 191,135
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,900 206,690 21,092 234,682
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,517 210,143 20,433 245,093
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,373 190,918 38,975 242,266
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 499 ---
Impairment tests for non-patented technologies
Impairment losses of RMB15,603,000, in respect of certain non-patented technologies which were iterated and
that could not generate future economic benefits, were provided against for impairment for the year ended
31 December 2024. These non-patented technologies were fully impaired.
Impairment tests for development costs
As at 31 December 2022, 2023 and 2024, development costs related to certain Carl Cloos robotic R&D projects
of RMB28,048,000, RMB24,505,000 and RMB22,072,000 respectively, form part of the CGU of Carl Cloos. The
impairment tests for such development costs are disclosed in Note 14.
As at 31 December 2022, 2023 and 2024, the remaining development costs of RMB79,786,000,
RMB34,469,000 and RMB26,652,000 respectively, are related to other certain robotic R&D projects, and the
impairment tests of which are disclosed below.
The recoverable amounts of those development costs not related to CGU of Carl Cloos are determined based
on excess earnings method. The key assumption used in the impairment tests is pre-tax discount rate. As at 31
December 2022, 2023 and 2024, the pre-tax discount rate is 26.18%, 26.12% and 26.02%, and the recoverable amount
of development costs is estimated to exceed its carrying amount by approximately RMB16,562,000, RMB9,958,000,
and RMB13,421,000, respectively.
If the pre-tax discount rate increased by 6.01%, 5.52% and 9.69%, respectively, as at 31 December 2022, 2023
and 2024, the estimated recoverable amount will be equal to the carrying amount. Based on the sensitivity analysis
above, the Group concluded that a reasonably possible change in key parameters would not cause the carrying amount
of development costs to exceed its recoverable amount as at 31 December 2022, 2023 and 2024.
Impairment tests for trademarks with indefinite useful lives
As at 31 December 2022, 2023 and 2024, trademarks with indefinite useful lives are related to Carl Cloos and
accordingly form part of the CGU of Carl Cloos. The impairment tests for such trademarks are disclosed in Note 14.
The Group did not perform quantitative impairment test for above intangible assets not yet available for use
or with indefinite useful lives as at 30 September 2025, since the Group’s accounting policy is to perform impairment
test annually at 31 December, or more frequently if events or changes in circumstances indicate that they might be
impaired in accordance with IAS 36, Impairment of assets . The Group did not identify any indication that the
intangible assets not yet available for use or with indefinite useful live would be impaired as at 30 September 2025.
14 GOODWILL
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,485,681 1,485,681 1,448,943 1,347,086
Accumulated impairment losses /H1118/H1118/H1118 – – (344,864) (302,498)
1,485,681 1,485,681 1,104,079 1,044,588
Goodwill was mainly arisen from the Group’s following acquisitions:
On 20 July 2016, the Company acquired Shanghai Prex Mfg. Co., Ltd. (ʮ̡)
(“Prex”).
On 8 August 2016, the Company acquired Nanjing Estun Intelligent System Engineering Co., Ltd. (౶
ʮ̡) (“Estun Intelligent”).
On 23 March 2017, the Company acquired Trio Motion Ltd (“Trio Motion”).
On 17 October 2017, the Company acquired M.A.i.
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 500 ---
On 12 December 2017, the Company acquired Y angzhou Shuguang Optoelectronics Automation Co., Ltd. ( ౮
ப΂ʮ̡) (“Y angzhou Shuguang”).
On 31 October 2019, the Company’s controlling shareholder Nanjing Primest Technology Co., Ltd. (ݼ
ʮ̡) (“Nanjing Primest”) acquired Carl Cloos. On 27 April 2020, the Company acquired Carl Cloos
from the controlling shareholder under common control.
On 1 July 2024, the Company acquired Chongqing Estun Intelligent Equipment Technology Co., Ltd. (ᅅ
ʮ̡, previously namedʮ̡).
Goodwill was recognised as the positive balance between the Company’s share of the fair value of the
identifiable net assets and the acquisition cost.
Impairment tests for cash-generating units containing goodwill
Goodwill is allocated to the Group’s CGUs identified by unit as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carl Cloos /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,015,207 1,015,207 767,461 857,182
Y angzhou Shuguang (Notes 15&16) /H1118 215,289 215,289 157,625 –
Trio Motion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,048 95,048 66,381 73,790
M.A.i /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,909 63,909 63,909 64,913
Estun Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,324 41,324 41,324 41,324
Prex /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,904 54,904 – –
Unit without significant goodwill /H1118/H1118 – – 7,379 7,379
1,485,681 1,485,681 1,104,079 1,044,588
Impairment tests
The recoverable amounts of the respective CGUs are determined based on value-in-use (“VIU”) calculation.
The Group engaged independent professional valuers to assist with the calculations. These calculations use cash flow
projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the
five-year period are extrapolated using an estimated terminal growth rate of 0%. The discount rates used are pre-tax
and reflect specific risks relating to the relevant industry, the CGUs themselves and macro-environment. The key
assumptions used in estimating the recoverable amount are as follows:
As at 31 December
2022 2023 2024
Annual revenue growth rate during the
forecast period
Carl Cloos /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.50%-8.00% 5.00%-6.00% 4.95% -27.14%
Y angzhou Shuguang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.00%-16.01% 4.13%-12.85% 3.19%-41.35%
Trio Motion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.26%-10.11% 2.00%-8.33% 3.00% -9.79%
M.A.i /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.15%-4.46% 1.00%-4.43% 3.00%
Estun Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.00%-5.00% 3.00% 2.00%
Prex /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.00%-8.00% 4.00%-14.94% 9.10%-32.48%
Pre-tax discount rate
Carl Cloos /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813.70% 11.40% 11.25%
Y angzhou Shuguang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814.06% 12.41% 12.69%
Trio Motion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816.89% 15.25% 16.94%
M.A.i /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813.86% 12.79% 12.82%
Estun Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811.80% 10.39% 13.08%
Prex /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811.50% 11.14% 13.22%
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 501 ---
At 31 December 2022 and 2023, the recoverable amount of Carl Cloos is estimated to exceed its carrying
amount by approximately RMB374,078,000 and RMB154,221,000, respectively. At 31 December 2024, the
recoverable amount of Carl Cloos was RMB203,628,000 lower than its carrying amount. Accordingly, an impairment
loss fully allocated to CGU of RMB203,628,000 has been recognised in profit or loss for the year ended 31 December
2024.
At 31 December 2022 and 2023, the recoverable amount of Y angzhou Shuguang is estimated to exceed its
carrying amount by approximately RMB1,313,000 and RMB6,826,000, respectively. At 31 December 2024, the
recoverable amount of Y angzhou Shuguang was RMB84,801,000 lower than its carrying amount. Accordingly, an
impairment loss fully allocated to CGU attributable to the Company of RMB57,664,000 has been recognised in profit
or loss for the year ended 31 December 2024.
At 31 December 2022 and 2023, the recoverable amount of Trio Motion is estimated to exceed its carrying
amount by approximately RMB1,946,000 and RMB2,438,000, respectively. At 31 December 2024, the recoverable
amount of Trio Motion was RMB28,667,000 lower than its carrying amount. Accordingly, an impairment loss fully
allocated to CGU of RMB28,667,000 has been recognised in profit or loss for the year ended 31 December 2024.
At 31 December 2022, 2023 and 2024, the recoverable amount of M.A.i is estimated to exceed its carrying
amount by approximately RMB3,449,000, RMB5,899,000, RMB3,933,000, respectively.
At 31 December 2022, 2023 and 2024, the recoverable amount of Estun Intelligent is estimated to exceed its
carrying amount by approximately RMB5,254,000, RMB8,247,000, RMB10,002,000, respectively.
At 31 December 2022 and 2023, the recoverable amount of Prex is estimated to exceed its carrying amount
by approximately RMB1,217,000 and RMB4,154,000, respectively. At 31 December 2024, the recoverable amount
of Prex is RMB54,905,000 lower than its carrying amount. Accordingly, an impairment loss fully allocated to CGU
of RMB54,905,000 has been recognised in profit or loss for the year ended 31 December 2024.
Management has identified that a reasonably possible change in key assumptions could not cause the carrying
amount to exceed the recoverable amount for CGUs with significant goodwill. The following table shows the amount
that these three assumptions would need to be individually for the estimated recoverable amount to be equal to the
carrying amount:
Change required for carrying amount to equal recoverable amount (in percentage point).
As at 31 December
2022 2023 2024
Decrease percentage in annual revenue growth
rate during forecast period
Carl Cloos /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.04% 1.90% Nil
Y angzhou Shuguang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.27% 1.54% Nil
Trio Motion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.17% 1.49% Nil
M.A.i /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.31% 1.44% 1.00%
Estun Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.08% 0.30% 8.00%
Prex /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.48% 1.00% Nil
Increase in pre-tax discount rate
Carl Cloos /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.89% 0.47% Nil
Y angzhou Shuguang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.01% 0.18% Nil
Trio Motion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.20% 0.22% Nil
M.A.i /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.23% 0.30% 0.19%
Estun Intelligent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.29% 0.90% 1.46%
Prex /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.14% 0.33% Nil
The recoverable amount of M.A.i and Estun Intelligent based on the value-in-use calculations was higher than
the carrying amount as at 31 December 2022, 2023 and 2024. Accordingly, no impairment loss for goodwill was
recognised in the consolidated statements of profit or loss and other comprehensive income. Also, based on the
sensitivity analysis above, the Group concluded that a reasonably possible change in key parameters would not cause
the carrying amount of M.A.i and Estun Intelligent to exceed its recoverable amount as at 31 December 2022, 2023
and 2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-53 –


--- page 502 ---
The recoverable amount of Carl Cloos, Y angzhou Shuguang, Trio Motion and Prex based on the value-in-use
calculations was higher than the carrying amount as at 31 December 2022 and 2023. At 31 December 2024, the
recoverable amount of above CGUs was lower than its carrying amount and impairment loss for goodwill was
recognised in the consolidated statements of profit or loss and other comprehensive income. Based on the sensitivity
analysis above, the Group concluded that a reasonably possible change in key parameters would not cause the
carrying amount of above CGUs to exceed its recoverable amount as at 31 December 2024.
The Group did not perform quantitative impairment test for above goodwill as at 30 September 2025, since the
Group’s accounting policy is to perform impairment test annually at 31 December, or more frequently if events or
changes in circumstances indicate that they might be impaired in accordance with IAS 36, Impairment of assets . The
Group did not identify any indication that the goodwill would be impaired as at 30 September 2025.
15 INTERESTS IN ASSOCIATES
Aggregate information of associates that are individually material:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Associates
– immaterial associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,565 85,324 46,308 30,511
– material associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 233,347
52,565 85,324 46,308 263,858
All the associates are accounted for using the equity method in the consolidated financial statements.
On 23 June 2025, the Group entered into a share transfer agreement with Shuguang Lanfengqi (Nanjing)
Technology Limited Partnership (઼(ԯ)ҦΥྫΆุ(Υྫ)) (“Shuguang Lanfengqi”), pursuant to
which the Group agreed to transfer its 20% equity interest in Y angzhou Shuguang to Shuguang Lanfengqi at a total
cash consideration of RMB94 million. Upon completion of the transfer on 25 June 2025, the Group held 48% equity
interest in Y angzhou Shuguang. Accordingly, the Group lost control of Y angzhou Shuguang and it became an
associate of the Group since then. As at 30 September 2025, Y angzhou Shuguang was the only particular material
associate of the Group, and was unlisted corporate entity whose quoted market price is not available:
Proportion of ownership interest
as at 30 September 2025
Name of associate
Form of
business
structure
Place of
incorporation
and business
Particulars of
issued and
paid up capital
Group’s
effective
interest
Held by the
Company
H e l db ya
subsidiary Principal activity
RMB’000
Y angzhou Shuguang /H1118/H1118Incorporated Chinese
Mainland
37,500 48.00% – 48.00% Engaged in
instrument
and meter
manufacturing
Summarised financial information of the material associate, adjusted for any differences in accounting
policies, and reconciled to the carrying amounts in the consolidated financial statements, are disclosed below:
As at/nine months ended
30 September 2025
RMB’000
Gross amounts of the associates
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118250,172
Non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,997
Current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,828
APPENDIX I ACCOUNTANTS’ REPORT
– I-54 –


--- page 503 ---
As at/nine months ended
30 September 2025
RMB’000
Non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118879
Equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118225,462
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,466
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,720
Other comprehensive income for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Total comprehensive income for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,720
Dividend received from the associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Reconciled to the Group’s interests in the associates
Gross amounts of net assets of the associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118225,462
Group’s effective interest /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848%
Group’s share of net assets of the associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,222
Goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,125
Carrying amount in the consolidated financial statements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118233,347
Aggregate information of associates that are not individually material:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Aggregate carrying amount of
individually immaterial
associates in the consolidated
financial statements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,565 85,324 46,308 48,250 30,511
Aggregate amounts of the
Group’s share of those
associates
Loss for the year/period /H1118/H1118/H1118/H1118/H1118(3,765) (12,434) (17,169) (12,875) (2,143)
Other comprehensive income
for the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Total comprehensive income
for the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,765) (12,434) (17,169) (12,875) (2,143)
16 INVESTMENTS IN SUBSIDIARIES
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Investments in subsidiaries /H1118/H1118/H1118/H1118/H1118/H11181,764,388 2,093,535 2,700,959 2,779,803
APPENDIX I ACCOUNTANTS’ REPORT
– I-55 –


--- page 504 ---
The following list contains only the particulars of subsidiaries which principally and significantly affected the
results, assets or liabilities of the Group. The class of shares held is ordinary unless otherwise stated.
Company name
Place and date of
incorporation/
acquisition and
business
Particulars of
registered and
paid-in capital Effective interest held by the Group Principal activities Name of auditors
As at 31 December
As at
30 September
2022 2023 2024 2025
Carl Cloos
Schweißtechnik
GmbH /H1118/H1118/H1118/H1118/H1118
Germany
31 October 2019
EUR10,800,000 89% 100% 100% 100% Manufacturing and sales
of machinery,
electrical appliances,
equipment, and
related consumable
materials and spare
parts
2022 & 2023:
BDO AG
Wirtschaftsprüfungsge-
sellschaft
2024:
Baker Tilly GmbH &
Co. KG
Wirtschaftsprüfung-
sgesellschaft
Shanghai Prex Mfg.
Co., Ltd. ( ɪऎ౷
ഺд౶Іਗண௪
ʮ̡)
(Note) /H1118/H1118/H1118/H1118/H1118
Chinese Mainland
20 July 2016
RMB5,330,000 100% 99% 97% 97% Design, manufacturing,
and sales of
peripheral automation
equipment for the
casting machines
2022 & 2023 & 2024:
Zhonghui Certified
Public Accountants
LLP Jiangsu Branch
(ה
(౷ஷΥྫ)Ϫᘽʱ
ה)Note)
Nanjing Estun
Intelligent
System
Engineering Co.,
Ltd. (౶཭
౽ঐӻ୕ʈ೻Ϟ
ʮ̡) (Note) /H1118
Chinese Mainland
8 August 2016
RMB100,000,000 100% 99% 97% 97% Design of intelligent
system engineering
2022 & 2023 & 2024:
Zhonghui Certified
Public Accountants
LLP Jiangsu Branch
(ה
(౷ஷΥྫ)Ϫᘽʱ
ה)Note)
Cloos Welding
Technology
(Beijing) Co.,
Ltd. ( ̔ဧдኁ౶
ଔટҦஔ(̏ԯ)Ϟ
ʮ̡) (Note) /H1118/H1118
Chinese Mainland
31 October 2019
RMB64,865,030 89% 100% 100% 100% Manufacturing and sales
of welding machines
and related products
2022 & 2023 & 2024:
Zhonghui Certified
Public Accountants
LLP Jiangsu Branch
(ה
(౷ஷΥྫ)Ϫᘽʱ
ה)Note)
Nanjing Estun
Robot
Engineering Co.,
Ltd. (౶཭
ࠢ
ʮ̡) (Note) /H1118/H1118
Chinese Mainland
5 September 2011
RMB450,000,000 100% 100% 100% 100% Manufacturing of robots
and industrial robot
turnkey systems
related products
2022 & 2023 & 2024:
Zhonghui Certified
Public Accountants
LLP Jiangsu Branch
(ה
(౷ஷΥྫ)Ϫᘽʱ
ה)Note)
Trio Motion Ltd
/H1118/H1118United Kingdom
23 March 2017
RMB92,500 100% 100% 100% 100% Design of automation
control equipment
2022 & 2023 & 2024:
Azets Audit Services
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 505 ---
Company name
Place and date of
incorporation/
acquisition and
business
Particulars of
registered and
paid-in capital Effective interest held by the Group Principal activities Name of auditors
As at 31 December
As at
30 September
2022 2023 2024 2025
Nanjing Estun
Software
Technology Co.,
Ltd. (౶཭
ʮ
̡) (Note) /H1118/H1118/H1118
Chinese Mainland
27 November
2013
RMB5,000,000 100% 100% 100% 100% Development and sale
of software
2022 & 2023 & 2024:
Zhonghui Certified
Public Accountants
LLP Jiangsu Branch
(ה
(౷ஷΥྫ)Ϫᘽʱ
ה)Note)
Estun Guangdong
Robotics Co.,
Ltd.
(౶཭(؇)ዚ
ʮ̡)
(Note) /H1118/H1118/H1118/H1118/H1118
Chinese Mainland
29 June 2018
RMB50,000,000 100% 100% 100% 100% Sales and manufacturing
of industrial robots
2022 & 2023 & 2024:
Zhonghui Certified
Public Accountants
LLP Jiangsu Branch
(ה
(౷ஷΥྫ)Ϫᘽʱ
ה)Note)
Carl Cloos Robotics
Technology
(China) Co., Ltd.
(̔ဧдኁ౶ዚኜ
Ҧ(ʕ਷)ࠢ
ʮ̡) (Note) /H1118/H1118/H1118
Chinese Mainland
10 June 2020
USD14,350,000 89% 100% 100% 100% Import and export of
goods
2022 & 2023 & 2024:
Zhonghui Certified
Public Accountants
LLP Jiangsu Branch
(ה
(౷ஷΥྫ)Ϫᘽʱ
ה)Note)
Nanjing Cloos
Robotics
Intelligent
Technology Co.,
Ltd. (ԯдኁ౶
Ҧ
ʮ̡) (Note) /H1118
Chinese Mainland
24 December
2020
RMB1,000,000 89% 100% 100% 100% Development and sale
of artificial
intelligence
application software
2022 & 2023 & 2024:
Nanjing Derong
Certified Public
Accountants (General
Partnership)࢙
ה(౷ஷΥ
ྫ)(Note)
Estun Intelligent
Technology
(Jiangsu) Co.,
Ltd. (౶཭౽ঐ
Ҧ(Ϫᘽ)ʮ
̡
) (“Estun
Intelligent
(Jiangsu)”)
(Note) /H1118/H1118/H1118/H1118/H1118
Chinese Mainland
19 July 2022
RMB362,713,194 100% 99% 97% 97% Sales and manufacturing
of industrial
automation control
system devices
2022 & 2023 & 2024:
Zhonghui Certified
Public Accountants
LLP Jiangsu Branch
(ה
(౷ஷΥྫ)Ϫᘽʱ
ה)Note)
M.A.i GmbH & Co.
KG/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Germany
17 October 2017
RMB213,800 50% 100% 100% 100% Provision of automated
assembly and testing
production lines based
on robotic
applications
2022 & 2023 & 2024:
HD Bayern Audit AG
APPENDIX I ACCOUNTANTS’ REPORT
– I-57 –


--- page 506 ---
Company name
Place and date of
incorporation/
acquisition and
business
Particulars of
registered and
paid-in capital Effective interest held by the Group Principal activities Name of auditors
As at 31 December
As at
30 September
2022 2023 2024 2025
Cloos Kaynak
Teknik Sanayi
Limited Sirteki /H1118
Turkey
31 October 2019
RMB102,216 89% 100% 100% 100% Production, marketing,
and trade of
machinery,
mechanisms and
tools, and services
primarily in the area
of welding techniques
N/A
Note: These entities are limited liability companies established in the PRC. The official names of these entities are
in Chinese. The English translation of these names is for identification purpose only.
All companies now comprising the Group have adopted 31 December as their financial year end date.
On 25 June 2025, the Group lost control of Y angzhou Shuguang and its subsidiaries and Y angzhou Shuguang
became an associate of the Group since then.
Aggregate of assets and liabilities at the date of disposal over which control was lost:
RMB’000
Property, plant and equipment (Note 11) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,686
Right-of-use assets (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,769
Intangible assets (Note 13) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,887
Trade and other receivables, non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118298
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118208
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,178
Trade and other receivables, current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,289
Financial assets measured at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,220
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,883
Trade and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(66,378)
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(354)
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(251)
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(879)
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,985)
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118235,571
Less: non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(62,631)
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118172,940
Gains on disposal of interests in subsidiaries:
RMB’000
Cash consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894,000
The fair value of 48% equity interest in Y angzhou Shuguang
the Group held (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118232,800
Less: net assets disposed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(172,940)
Less: goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(157,625)
Net loss on disposal of interests in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,765)
APPENDIX I ACCOUNTANTS’ REPORT
– I-58 –


--- page 507 ---
Analysis of net cash in respect of the disposal of interests in subsidiaries is as follows:
RMB’000
Cash consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894,000
Less: cash and cash equivalents disposed of /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(22,883)
Less: receivables arising from disposal of interests in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(46,060)
Proceeds received for disposal of interests in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,057
17 FINANCIAL ASSETS MEASURED AT FAIR V ALUE THROUGH OTHER COMPREHENSIVE
INCOME
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Investment in unlisted equity
securities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,480 141,440 180,208 173,261
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Investment in unlisted equity
securities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,228 63,188 101,955 123,252
The unlisted equity securities are shares in the enterprises, which mainly engaged in relevant industries of the
Group. The Group designated these investments at FVOCI (non-recycling), as these investments are held for strategic
purposes. No dividends were received on these investments during the Track Record Period.
18 FINANCIAL ASSETS MEASURED AT FAIR V ALUE THROUGH PROFIT OR LOSS
The Group
As at 31 December
As at 30
September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets measured at
FVPL
Non-current assets
Investments not held for trading:
– Unlisted equity securities /H1118/H1118/H1118/H1118/H1118/H1118142,739 163,074 146,762 159,640
– Unlisted units in investment
funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,475 128,498 66,970 61,542
262,214 291,572 213,732 221,182
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 508 ---
As at 31 December
As at 30
September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current assets
– Unlisted units in investment
funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 20,000 – –
– Wealth management products /H1118/H1118/H1118/H1118578,115 415,820 388,913 170,136
578,115 435,820 388,913 170,136
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets measured at
FVPL
Non-current assets
Investments not held for trading:
– Unlisted equity securities /H1118/H1118/H1118/H1118/H1118/H1118132,740 149,919 133,608 156,486
– Unlisted units in investment
funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,475 128,498 66,970 51,542
252,215 278,417 200,578 208,028
Current assets
– Unlisted units in investment
funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 20,000 – –
– Wealth management products /H1118/H1118/H1118/H1118578,115 302,572 183,645 10,007
578,115 322,572 183,645 10,007
19 INVENTORIES
(a) Inventories in the consolidated statements of financial position comprise:
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118629,826 495,149 416,411 437,161
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,039 326,774 474,491 498,584
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118245,408 401,586 575,067 431,056
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,929 1,592
Goods delivered to customers /H1118/H1118/H1118/H1118/H111857,317 46,222 133,434 30,473
1,070,590 1,269,731 1,602,332 1,398,866
Contract costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118117,979 144,767 231,259 151,894
Write-down of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118(58,079) (74,277) (112,546) (104,519)
1,130,490 1,340,221 1,721,045 1,446,241
APPENDIX I ACCOUNTANTS’ REPORT
– I-60 –


--- page 509 ---
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,771 93,279 94,448 63,875
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,441 11,957 11,185 12,938
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,552 47,562 56,184 51,568
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,019 –
Goods delivered to customers /H1118/H1118/H1118/H1118/H111811,666 30,971 5,877 10,533
182,430 183,769 168,713 138,914
Write-down of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (7,066) (6,838)
182,430 183,769 161,647 132,076
(b) The analysis of the amount of inventories recognised as an expense and included in profit or loss is as
follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Carrying amount of
inventories sold /H1118/H1118/H1118/H1118/H1118/H11182,586,679 3,179,683 2,833,279 2,364,083 2,740,270
Write-down of inventories /H1118 17,882 17,171 41,463 – –
Reversal of write-down of
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (7,415)
2,604,561 3,196,854 2,874,742 2,364,083 2,732,855
Net realisable value of inventories is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and the estimated costs necessary to make the sale. These estimates are based on the
current market condition and historical experience of selling products of similar nature. It could change significantly
as a result of competitor actions in response to changes in market conditions.
20 CONTRACT ASSETS AND CONTRACT LIABILITIES
(a) Contract assets
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Gross carrying amount
Outstanding warranties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,268 96,135 98,834 118,906
Completed and unbilled contract /H1118/H1118/H1118 20,636 111,816 73,821 115,529
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,490) (4,239) (4,009) (4,738)
121,414 203,712 168,646 229,697
APPENDIX I ACCOUNTANTS’ REPORT
– I-61 –


--- page 510 ---
(b) Contract liabilities
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Prepayments received from
customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118249,105 297,507 505,014 520,383
Movements in contract liabilities
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Balance at the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118211,002 249,105 297,507 505,014
Decrease in contract liabilities as a
result of recognising revenue
during the year/period that was
included in the contract liabilities
at the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(211,002) (249,105) (272,933) (494,427)
Increase in contract liabilities as a
result of receiving advance
payments during the year/period /H1118/H1118 249,105 297,507 480,440 509,796
Balance at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118249,105 297,507 505,014 520,383
21 TRADE AND OTHER RECEIV ABLES
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current assets
Trade receivables
– Third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,231,938 1,554,315 1,825,407 2,025,015
– Related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897,126 152,856 96,078 78,086
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(79,737) (109,701) (144,928) (127,750)
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118208,959 54,852 146,969 68,773
Net trade and bills receivables
measured at amortised cost /H1118/H1118/H1118/H11181,458,286 1,652,322 1,923,526 2,044,124
Bills receivable, measured at
FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118296,140 671,921 483,536 557,580
Amounts due from related parties /H1118/H1118 100 864 825 8,616
V alue-added tax recoverable /H1118/H1118/H1118/H1118/H1118/H11189,884 38,307 65,256 43,165
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,658 57,693 44,387 51,278
Listing expenses to be capitalised /H1118/H1118 – – – 16,434
Receivables arising from disposal of
interests in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 46,060
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,821 33,758 39,945 45,088
1,920,889 2,454,865 2,557,475 2,812,345
APPENDIX I ACCOUNTANTS’ REPORT
– I-62 –


--- page 511 ---
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Long-term deferred expenses /H1118/H1118/H1118/H1118/H111836,214 23,923 9,048 6,650
Prepayments for purchase of
property, plant and equipment and
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,800 37,531 9,604 22,317
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,10 3–––
58,117 61,454 18,652 28,967
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current assets
Trade receivables
– Third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224,926 217,072 214,445 217,016
– Related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,998 13,412 16,382 15,928
– Subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,773 22,034 30,633 30,221
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,478) (7,391) (12,652) (8,947)
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,060 12,324 24,044 34,563
Net trade and bills receivables
measured at amortised cost /H1118/H1118/H1118/H1118340,279 257,451 272,852 288,781
Bills receivable, measured at
FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118116,292 299,648 271,325 227,959
Amounts due from subsidiaries /H1118/H1118/H1118/H1118842,373 1,291,410 1,561,569 1,192,268
Dividends receivable due from
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,000 260,000 50,000 –
V alue-added tax recoverable /H1118/H1118/H1118/H1118/H1118/H11183,593 4,516 3,914 630
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118477,987 12,422 18,247 5,006
Listing expenses to be capitalised /H1118/H1118 – – – 16,434
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,369 4,872 10,166 9,837
1,924,893 2,130,319 2,188,073 1,740,915
Non-current assets
Long-term deferred expenses /H1118/H1118/H1118/H1118/H1118446 275 882 1,772
Prepayments for purchase of
property, plant and equipment and
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,825 8,493 2,223 8,288
7,271 8,768 3,105 10,060
APPENDIX I ACCOUNTANTS’ REPORT
– I-63 –


--- page 512 ---
All of the current portion of trade and other receivables are expected to be recovered or recognised as expense
within one year.
Ageing analysis:
As at the end of each reporting period, the ageing analysis of the Group’s trade receivables and bills receivable,
based on the revenue recognition date, is as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,676,521 2,235,568 2,039,229 2,367,118
More than 1 year but within
2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,505 121,019 420,725 252,131
More than 2 years but within
3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,318 36,010 58,158 93,780
More than 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,819 41,347 33,878 16,425
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(79,737) (109,701) (144,928) (127,750)
1,754,426 2,324,243 2,407,062 2,601,704
22 CASH AND CASH EQUIV ALENTS AND OTHER CASH FLOW INFORMATION
(a) Cash and cash equivalents comprise:
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash at bank /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118718,294 1,227,395 1,196,936 1,173,257
Less: restricted bank deposits
(Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(49,972) (31,142) (15,832) (51,291)
Cash and cash equivalents in the
consolidated statements of
financial position and the
consolidated statements of cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118668,322 1,196,253 1,181,104 1,121,966
Note: Restricted bank deposits of RMB49,972,000, RMB31,142,000, RMB15,832,000 and RMB51,291,000 as
at 31 December 2022, 2023 and 2024 and 30 September 2025 were mainly pledged for bills payable.
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash at bank /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118216,402 390,427 560,184 491,132
Less: restricted bank deposits /H1118/H1118/H1118/H1118/H1118(28,910) (4,979) (5,046) (12,654)
187,492 385,448 555,138 478,478
APPENDIX I ACCOUNTANTS’ REPORT
– I-64 –


--- page 513 ---
(b) Reconciliation of profit/(loss) before taxation to cash generated from operations:
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit/(loss) before taxation /H1118/H1118/H1118/H1118 263,608 167,537 (775,524) (36,892) 59,830
Adjustments for:
Depreciation of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(c) 62,679 71,449 93,469 73,221 77,369
Depreciation of investment
property /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 5 0 2
Depreciation of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(c) 18,619 19,458 23,897 15,787 19,571
Amortisation of intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(c) 37,999 43,686 63,961 46,519 46,781
Amortisation of long-term
deferred expenses /H1118/H1118/H1118/H1118/H1118/H1118/H111814,320 16,407 17,727 4,115 7,572
Provision for/(reversal of)
impairment loss on trade
and other receivables and
contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(c) 47,517 26,877 64,537 20,601 (5,088)
Provision for write-down of
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819(b) 17,882 17,171 41,463 – –
Reversal of write-down of
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819(b) –––– (7,415)
Impairment loss on intangible
assets and goodwill /H1118/H1118/H1118/H1118/H1118/H11186(c) – – 360,467 – –
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(a) 93,990 130,538 154,193 103,909 119,487
Interest income from bank
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (11,040) (9,807) (15,493) (11,910) (9,702)
Share of profits less losses of
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 3,765 12,434 17,169 12,875 2,143
Realised and unrealised gains
on wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (18,284) (23,008) (15,602) (7,190) (10,239)
Realised and unrealised
(gains)/losses on other
financial assets measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (52,828) (30,718) 22,787 – (12,878)
Net losses/(gains) on disposal
of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 171 (1,000) 501 (3,801) 788
Net gains on disposal of
interests in associates /H1118/H1118/H1118/H1118/H11185 – – (15,948) (14,781) (976)
Net losses on disposal of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 14,316 69 – – 3,765
Equity-settled share-based
payment expenses /H1118/H1118/H1118/H1118/H1118/H1118/H11186(b) 10,253 6,502 10,451 11,384 14,450
Net foreign exchange
(gains)/losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,118) 2,233 (2,992) (2,935) 6,962
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,955 (5,840) 3,960 7,244 3,504
Changes in working capital:
(Increase)/decrease in
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(376,547) (235,443) (395,183) 52,884 248,215
Increase in trade and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(786,940) (654,215) (173,259) (346,398) (277,824)
APPENDIX I ACCOUNTANTS’ REPORT
– I-65 –


--- page 514 ---
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
(Increase)/decrease in contract
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(23,974) (84,046) 40,261 (20,525) (61,781)
(Increase)/decrease in
restricted bank deposits /H1118/H1118/H1118 (8,296) 29,321 9,771 (32,173) (35,459)
Increase/(decrease) in trade
and other payables /H1118/H1118/H1118/H1118/H1118/H1118747,209 533,381 200,068 (360,902) 61,297
Increase in contract liabilities /H1118 38,103 48,402 197,679 4,533 15,723
Increase/(decrease) in
provisions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,743 3,560 (572) (3,972) 28,608
(Decrease)/increase in deferred
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,350) (9,951) 18,280 (6,093) 30,589
Cash generated from/(used in)
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883,752 74,997 (53,932) (494,500) 325,794
(c) Reconciliation of liabilities arising from financing activities:
The table below details changes in the Group’s liabilities from financing activities, including both cash and
non-cash changes. Liabilities arising from financing activities are liabilities for which cash flows were, or future cash
flows will be, classified in the Group’s consolidated statements of cash flows as cash flows from financing activities.
Bank loans and
other borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
(Note 24) (Note 25)
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,460,341 74,956 2,535,297-------- ------ --------
Changes from financing cash flows:
Proceeds from new bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,956,047 – 1,956,047
Repayment of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,444,596) – (1,444,596)
Repayments of borrowings from the controlling
shareholder /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(109,416) – (109,416)
Capital element and interest element of lease
rentals paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (12,288) (12,288)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(66,908) (2,229) (69,137)
Total changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118335,127 (14,517) 320,610-------- ------ --------
Other changes:
Increase in lease liabilities from entering into
new leases during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,977 5,977
Proceeds from early termination of lease
agreements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,570) (1,570)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,102 1,214 17,316
Interest expenses (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,793 2,229 74,022
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,895 7,850 95,745-------- ----- --------
At 31 December 2022 and 1 January 2023 /H1118/H1118/H11182,883,363 68,289 2,951,652
APPENDIX I ACCOUNTANTS’ REPORT
– I-66 –


--- page 515 ---
Bank loans and
other borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
(Note 24) (Note 25)
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,883,363 68,289 2,951,652-------- ------ --------
Changes from financing cash flows:
Proceeds from new bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,310,347 – 4,310,347
Repayment of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,212,755) – (3,212,755)
Repayments of borrowings from the controlling
shareholder /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(110,000) – (110,000)
Proceeds from other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118380,000 – 380,000
Capital element and interest element of lease
rentals paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (9,206) (9,206)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(120,209) (2,062) (122,271)
Total changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H11181,247,383 (11,268) 1,236,115-------- ------ --------
Other changes:
Increase in lease liabilities from entering into
new leases during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,784 5,784
Proceeds from early termination of lease
agreements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (10,833) (10,833)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(25,983) 1,493 (24,490)
Interest expenses (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,823 2,062 111,885
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883,840 (1,494) 82,346-------- ----- --------
At 31 December 2023 and 1 January 2024 /H1118/H1118/H11184,214,586 55,527 4,270,113
Bank loans and
other borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
(Note 24) (Note 25)
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,214,586 55,527 4,270,113-------- ------ --------
Changes from financing cash flows:
Proceeds from new bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,515,466 – 3,515,466
Repayment of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,046,284) – (3,046,284)
Repayments of borrowings from controlling
shareholder /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,112) – (11,112)
Proceeds from other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,000 – 35,000
Capital element and interest element of lease
rentals paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (16,188) (16,188)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(124,406) (1,866) (126,272)
Total changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118368,664 (18,054) 350,610-------- ------ --------
Other changes:
Increase in lease liabilities from entering into
new leases during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 51,471 51,471
Acquisition of a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,040 1,040
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,738 (4,430) 8,308
Interest expenses (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,983 1,866 127,849
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,721 49,947 188,668-------- ----- --------
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,721,971 87,420 4,809,391-------- ------ --------
APPENDIX I ACCOUNTANTS’ REPORT
– I-67 –


--- page 516 ---
Bank loans and
other borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
(Note 24) (Note 25)
At 1 January 2024 (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,214,586 55,527 4,270,113
Changes from financing cash flows:
Proceeds from new bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,947,817 – 2,947,817
Repayment of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,193,315) – (2,193,315)
Repayments of borrowings from controlling
shareholder /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,112) – (11,112)
Proceeds from other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,000 – 35,000
Capital element and interest element of lease
rentals paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (12,390) (12,390)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(70,804) (1,552) (72,356)
Total changes from financing cash flows /H1118/H1118/H1118/H1118/H1118707,586 (13,942) 693,644-------- ------ --------
Other changes:
Increase in lease liabilities from entering into
new leases during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6,444 6,444
Acquisition of a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,040 1,040
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,119) 390 (1,729)
Interest expenses (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888,315 1,620 89,935
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886,196 9,494 95,690--------
----- --------
At 30 September 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,008,368 51,079 5,059,447
Bank loans and
other borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
(Note 24) (Note 25)
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,721,971 87,420 4,809,391-------- ------ --------
Changes from financing cash flows:
Proceeds from new bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,154,458 – 2,154,458
Repayment of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,467,357) – (2,467,357)
Capital element and interest element of lease
rentals paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (11,844) (11,844)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(96,068) (3,714) (99,782)
Total changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118(408,967) (15,558) (424,525)-------- ------ --------
Other changes:
Increase in lease liabilities from entering into
new leases during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 14,204 14,204
Decrease in lease liabilities from termination of
lease agreements during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (14,919) (14,919)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,165 7,268 20,433
Interest expenses (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,528 3,714 114,242
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,693 10,267 133,960-------- ----- --------
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,436,697 82,129 4,518,826
APPENDIX I ACCOUNTANTS’ REPORT
– I-68 –


--- page 517 ---
(d) Total cash out flow for leases:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Within operating cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,628 6,725 6,503 7,510 6,764
Within financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,517 11,268 18,054 13,942 15,558
19,145 17,993 24,557 21,452 22,322
These amounts relate to the following:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Lease rentals settled /H1118/H1118/H1118/H111819,145 17,993 24,557 21,452 22,322
23 TRADE AND OTHER PAYABLES
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118819,913 1,132,316 1,439,547 1,622,787
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118460,208 690,988 648,994 524,156
Accrued payrolls /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100,598 108,677 79,987 94,606
Payables for property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,522 162,861 119,108 113,653
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,922 44,919 36,439 48,791
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118115,428 159,660 231,482 254,433
1,582,591 2,299,421 2,555,557 2,658,426
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118338,320 335,867 335,627 336,732
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118668,949 1,148,838 1,111,198 345,045
Amounts due to subsidiaries /H1118/H1118/H1118/H1118/H1118487,595 102,203 278,207 257,773
Accrued payrolls /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,603 8,765 7,331 6,072
Payables for property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,519 90,699 66,593 48,250
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,605 2,423 1,790 5,436
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H111837,553 40,049 43,348 88,190
1,553,144 1,728,844 1,844,094 1,087,498
All trade and other payables are expected to be settled within one year or are repayable on demand.
APPENDIX I ACCOUNTANTS’ REPORT
– I-69 –


--- page 518 ---
As at the end of each reporting period, the ageing analysis of the Group’s trade payables and bills payable
based on the invoice date, is as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,240,833 1,780,738 2,016,275 2,105,858
Over 1 year but within 2 years /H1118/H1118/H1118/H111826,158 24,156 58,975 34,296
Over 2 years but within 3 years /H1118/H1118/H1118 3,308 10,347 4,385 4,860
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,822 8,063 8,906 1,929
1,280,121 1,823,304 2,088,541 2,146,943
24 BANK LOANS AND OTHER BORROWINGS
(a) The analysis of the carrying amount of bank loans and other borrowings is as follows:
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current liabilities
– Short-term bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118814,276 1,514,007 1,838,959 1,307,000
– Current portion of long-term bank
loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118517,883 879,483 1,090,411 1,504,806
– Loans from the controlling
shareholder (Note 34) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118121,112 11,112 – –
1,453,271 2,404,602 2,929,370 2,811,806
Non-current liabilities
– Non-current portion of long-term
bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,430,092 1,429,984 1,353,442 1,167,057
– Redemption liabilities (Note) /H1118/H1118/H1118/H1118 – 380,000 439,159 457,834
1,430,092 1,809,984 1,792,601 1,624,891
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current liabilities
– Short-term bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210,893 410,336 635,568 712,600
– Current portion of long-term bank
loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118327,597 643,632 963,715 1,344,259
– Loans from the controlling
shareholder /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118121,112 11,112 – –
659,602 1,065,080 1,599,283 2,056,859
Non-current liabilities
– Non-current portion of long-term
bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,109,000 1,332,175 1,310,057 964,740
APPENDIX I ACCOUNTANTS’ REPORT
– I-70 –


--- page 519 ---
Note: On 28 December 2023 and 19 April 2024, the Company’s subsidiary Estun Intelligent (Jiangsu) entered
into share purchase agreements with external investors and the Company, pursuant to which Estun
Intelligent (Jiangsu) issued shares with redemption rights, liquidity preference and anti-dilution rights
to the external investors for a total cash consideration of RMB380,000,000 and RMB35,000,000
respectively. The issued shares shall be redeemable by the Company if the trigger event stipulated in the
agreements does not occur before 30 September 2027, at a price equal to the higher amount of 1) the
original consideration plus a simple interest of 6% per annum or 2) the fair value of relevant equity
interests in Estun Intelligent (Jiangsu).
In accordance with the Group’s accounting policy set out in Note 2(q), the issued shares are initially
recognised at fair value and subsequently measured at amortised cost, bearing an interest of 6% per
annum.
(b) The analysis of the repayment schedule of the Group’s bank loans and other borrowings is as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year or on demand /H1118/H1118/H1118/H1118/H11181,453,271 2,404,602 2,929,370 2,811,806------- ------- ------- -------
After 1 year but within 2 years /H1118/H1118/H1118/H11181,023,101 1,050,337 1,053,234 978,381
After 2 years but within 5 years /H1118/H1118/H1118406,991 759,647 739,367 646,510
1,430,092 1,809,984 1,792,601 1,624,891------- ------- ------- -------
2,883,363 4,214,586 4,721,971 4,436,697
The bank loans and other borrowings were secured by certain assets of the Group. An analysis of the carrying
value of these assets is as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Property, plant and equipment /H1118/H1118/H1118/H111855,499 61,815 141,442 137,306
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,345 47,127 9,751 7,960
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 83,901 10,000
As at 31 December 2022, 2023 and 2024 and 30 September 2025, the Company issued guarantees to certain
subsidiaries in respect of bank loans of RMB698,250,000, RMB391,479,000, RMB521,120,000 and
RMB264,377,500 respectively.
25 LEASE LIABILITIES
At the end of each reporting period, the lease liabilities were repayable as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,517 12,522 20,120 17,864----- ----- ----- -----
After 1 year but within 2 years /H1118/H1118/H1118/H111813,517 12,531 9,709 13,559
After 2 years but within 5 years /H1118/H1118/H1118 23,481 14,784 28,863 36,374
After 5 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,774 15,690 28,728 14,332
54,772 43,005 67,300 64,265----- ----- ----- -----
68,289 55,527 87,420 82,129
APPENDIX I ACCOUNTANTS’ REPORT
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26 DEFINED BENEFIT PLANS
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Defined benefit plans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190,619 198,964 201,582 236,510
The Group contributes to defined benefit retirement plans for its employees in certain overseas subsidiaries.
Certain retired employees were entitled to receive an annual pension payment upon retirement. The pension benefit
obligations vary from different regions due to the different future salary increase rate, discount rate, mortality rate
etc. Besides, the pension benefit obligations are also influenced by retirement age and plan assets the Group
purchased.
The plans expose the Group to actuarial risks, such as interest rate risk, investment risk and longevity risk.
Information about the plans is disclosed below.
(a) The amounts recognised in the consolidated statements of financial position are as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Present value of defined benefit
obligations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190,619 198,964 201,582 236,510
A portion of the above liability is expected to be settled after more than one year. However, it is not practicable
to segregate this amount from the amounts payable in the next twelve months, as future contributions will also relate
to future services rendered and future changes in actuarial assumptions and market conditions.
(b) Movements in the present value of the defined benefit obligations
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year/period /H1118 270,216 190,619 198,964 201,582
Remeasurements effect recognised in
other comprehensive income
– Actuarial (losses)/gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118(86,153) (4,340) 10,843 15,115
– Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,412 11,124 (8,688) 19,923
(79,741) 6,784 2,155 35,038
Benefits paid by the plans /H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,029) (7,644) (8,977) (6,904)
Current service cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,461 2,453 2,377 1,549
Interest cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,712 6,752 7,063 5,245
At the end of the year/period /H1118/H1118/H1118/H1118/H1118190,619 198,964 201,582 236,510
As at 31 December 2022, 2023 and 2024 and 30 September 2025, the weighted average duration of the defined
benefit obligations is 15 years, 14 years, 14 years and 14 years, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
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(c) Significant actuarial assumptions are as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
Discount rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.50% 3.70% 3.30% 4.00%
Future salary increases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.00% 2.00% 2.00% 2.00%
Retirement benefits increases /H1118/H1118/H1118/H1118/H11181.00% 1.00% 1.00% 1.00%-2.00%
Mortality rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182018
G Heubeck
2018
G Heubeck
2018
G Heubeck
2018
G Heubeck
27 EQUITY SETTLED SHARE-BASED TRANSACTIONS
(a) Share options
The Company had 1,396,000 share options outstanding as at 1 January 2022.
The Company adopted an employee share option scheme on 7 April 2023, pursuant to which, the Company
granted 9,039,000 share options to employees at a price of RMB21.48 per share. Share options will be vested in three
batches in a 36-month period subject to fulfilment of the performance of the Company and the individuals.
The Company adopted an employee share option scheme on 8 July 2025, pursuant to which, the Company
granted 3,320,000 share options to employees at an exercise price of RMB20.53 per share. Share options will be
vested in three batches in a 36-month period subject to fulfilment of the performance of the Company and the
individuals.
(i) The movement of the number of share options are as follows:
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
’000 ’000 ’000 ’000
At the beginning of the year/period /H1118 1,396 614 9,039 –
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 9,039 – 3,320
V ested /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(639) (547) – –
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(143) (67) (9,039) –
At the end of the year/period /H1118/H1118/H1118/H1118/H1118614 9,039 – 3,320
During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025, the
weighted average share price at the date of exercise for shares options exercised during the year/period was
RMB6.58, RMB6.58, nil and RMB20.53 respectively.
The options outstanding as at 31 December 2022 and 2023 and 30 September 2025 had an exercise price of
RMB6.58, RMB6.58 and RMB20.53 respectively and a weighted average remaining contractual life of 0.4 years, 1.5
years and 2.3 years.
(ii) Fair value of share options
The fair value of services received in return for share options granted is measured by reference to the fair value
of such equity instruments on the grant date, of which the estimation is measured based on the Black-Scholes model
with the following assumptions:
Granted during the year ended
31 December 2023
Granted during the
nine months ended
30 September 2025
Risk-free interest rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.50%/2.10%/2.75% 1.50%/2.10%/2.75%
Expected volatility /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821.49%/19.62%/21.00% 29.29%/25.16%/22.58%
Expected dividend yield /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180% 0%
APPENDIX I ACCOUNTANTS’ REPORT
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During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025, total
expenses recognised in the consolidated statements of profit or loss for share options were RMB1,252,000,
RMB440,000, nil and RMB1,949,000 respectively.
(b) Restricted share units
The Company had 4,400,000 restricted shares units (“RSUs”) as at 1 January 2022.
The fair value of services received in return for RSUs granted is measured by reference to the fair value of
such equity instruments on the grant date, of which the estimation is measured based on the Black-Scholes model.
The Company adopted an employee restricted share units scheme on 8 July 2025, pursuant to which, the
Company granted 4,000,000 RSUs to employees at a price of RMB10.27 per share. Restricted share units will be
vested in three batches in a 36-month period subject to fulfilment of the performance of the Company and the
individuals.
(i) The movement of the number of RSUs are as follows:
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
’000 ’000 ’000 ’000
At the beginning of the year/period /H1118 4,400 2,108 – –
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 4,000
V ested /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,130) (1,977) – –
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(162) (131) – –
At the end of the year/period /H1118/H1118/H1118/H1118/H11182,108 – – 4,000
During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025, total
expenses recognised in the consolidated statements of profit or loss for the RSUs were RMB956,000, RMB(37,000),
nil and RMB4,663,000 respectively.
(c) 2022 Employee Share Purchase Plan (“2022 ESPP”)
On 25 August 2022, the Company adopted 2022 ESPP , pursuant to which, the Company has set up a special
securities account under China Securities Depository and Clearing Corporation Limited and transferred 6,727,400
ordinary shares to the account. Qualified employees under 2022 ESPP purchased the shares at a price of RMB1.00
per share. Each share unit will be vested in two batches in a 56-month period subject to fulfilment of the performance
of the Company and the individuals.
On 28 April 2024, the Company further purchased 4,139,000 own shares and transferred to the account under
2022 ESPP .
(i) The movement of the number of shares are as follows:
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
’000 ’000 ’000 ’000
At the beginning of the year/period /H1118 – 6,727 6,727 6,727
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,727 – 4,139 –
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (4,139) (3,773)
At the end of the year/period /H1118/H1118/H1118/H1118/H11186,727 6,727 6,727 2,954
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 523 ---
(ii) Fair value of shares granted
The fair value of services received in return for the shares granted is measured by reference to the fair value
of such equity instruments on the grant date, of which the estimation is measured based on the Black-Scholes model
with the following assumptions:
Granted during the year ended 31 December
Granted during
the nine months
ended
30 September
2022 2023 2024 2025
Risk-free interest rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.50%/2.10% – 1.50%/2.10% –
Expected volatility /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858.41%/59.30% – 58.41%/59.30% –
Expected dividend yield /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.29% – 0.29% –
During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025, total
expenses recognised in the consolidated statements of profit or loss for 2022 ESPP were RMB8,045,000,
RMB6,099,000, RMB10,451,000 and RMB7,838,000 respectively.
28 INCOME TAX IN THE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(a) Current taxation in the consolidated statements of financial position represents:
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year/period /H1118 14,334 4,841 (20,183) (28,469)
Provisions for income tax for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,777 49,259 41,817 48,342
Income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(66,270) (74,283) (50,103) (25,733)
Disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (251)
At the end of the year/period /H1118/H1118/H1118/H1118/H11184,841 (20,183) (28,469) (6,111)
Reconciliation to the consolidated statements of financial position
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,373 10,541 2,271 16,836
Income tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,532) (30,724) (30,740) (22,947)
4,841 (20,183) (28,469) (6,111)
APPENDIX I ACCOUNTANTS’ REPORT
– I-75 –


--- page 524 ---
(b) Deferred tax assets and liabilities recognised
(i) Movement of each component of deferred tax assets and liabilities
The components of deferred tax (assets)/liabilities recognised in the consolidated statements of financial
position and the movements during the Track Record Period are as follows:
Impairment
loss
Unrealised
profits
Deductible
tax losses
Expected
credit loss
allowance
Defined
benefit
plan
obligations
Equity
settled
share-based
transactions
Depreciation
of property,
plant and
equipment
Government
grants
Fair value
change of
financial
assets
Tax impact
of revenue
recognised
over time
Fair value
adjustment in
relation to
acquisition of
subsidiaries Others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January
2022 /H1118/H1118/H1118/H111859 9,651 107,761 10,054 43,644 18,288 3,104 10,652 (3,050) (10,258) (44,617) 11,138 156,426
Credited/(charged)
to profit or
loss /H1118/H1118/H1118/H1118/H1118843 (652) (9,883) 3,898 (420) (4,286) (1,253) (1,207) (10,046) (2,503) 4,823 (9,319) (30,005)
Credited/(charged)
to reserves /H1118/H1118 –––– (24,722) (6,818) 70 – (851) (323) – – (32,644)
At 31 December
2022 and
1 January
2023 /H1118/H1118/H1118/H1118902 8,999 97,878 13,952 18,502 7,184 1,921 9,445 (13,947) (13,084) (39,794) 1,819 93,777
Credited/(charged)
to profit or
loss /H1118/H1118/H1118/H1118/H1118506 2,560 33,432 (2,074) 4,748 (7,858) (1,820) (3,135) (5,064) (8,250) 3,652 9,284 25,981
Credited/(charged)
to reserves /H1118/H1118 –––– (4,843) 674 61 – (1,112) (1,005) – – (6,225)
At 31 December
2023 and
1 January
2024 /H1118/H1118/H1118/H11181,408 11,559 131,310 11,878 18,407 – 162 6,310 (20,123) (22,339) (36,142) 11,103 113,533
Credited/(charged)
to profit or
loss /H1118/H1118/H1118/H1118/H11183,829 436 (46,664) 3,761 (1,325) – 10,688 3,189 4,196 11,828 1,780 1,807 (6,475)
Credited/(charged)
to reserves /H1118/H1118 –––– 3,313 – (239) – (4,041) (256) – – (1,223)
At 31 December
2024 and
1 January
2025 /H1118/H1118/H1118/H11185,237 11,995 84,646 15,639 20,395 – 10,611 9,499 (19,968) (10,767) (34,362) 12,910 105,835
Credited/(charged)
to profit or
loss /H1118/H1118/H1118/H1118/H1118224 3,722 (13,438) (164) 530 – 5,175 (572) (5,610) (9,412) 1,131 2,641 (15,773)
Credited/(charged)
to reserves /H1118/H1118 – (2,354) 743 120 6,655 – (1,546) – 2,219 (1,642) 720 1,540 6,455
Disposal of
subsidiaries /H1118/H1118 (220) –––– – 1 1 0 (132) 34 – 1,985 – 1,777
At 30 September
2025 /H1118/H1118/H1118/H11185,241 13,363 71,951 15,595 27,580 – 14,350 8,795 (23,325) (21,821) (30,526) 17,091 98,294
APPENDIX I ACCOUNTANTS’ REPORT
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(ii) Reconciliation to the consolidated statements of financial position
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax asset in the
consolidated statements of
financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118175,854 206,619 172,630 130,997
Net deferred tax liability in the
consolidated statements of
financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(82,077) (93,086) (66,795) (32,703)
93,777 113,533 105,835 98,294
(c) Deferred tax assets not recognised
The Group has not recognised deferred tax assets in respect of the items below, which were incurred by certain
subsidiaries that were not likely to generate taxable:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Deductible temporary differences /H1118/H1118 3,753 114,153 149,679 161,371
Deductible tax losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,036 127,148 812,564 855,524
23,789 241,301 962,243 1,016,895
29 DEFERRED INCOME
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year/period /H1118 66,076 59,726 49,775 68,055
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,570 3,793 34,280 38,907
Disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (879)
Credited to profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(17,920) (13,744) (16,000) (8,318)
At the end of the year/period /H1118/H1118/H1118/H1118/H111859,726 49,775 68,055 97,765
Deferred income mainly represents government grants relating to property, plant and equipment, which are
recognised as income on a straight-line basis over the expected useful life of relevant assets.
APPENDIX I ACCOUNTANTS’ REPORT
– I-77 –


--- page 526 ---
30 PROVISIONS
Product warranties
and claims
Unfavourable
customer contracts Total
RMB’000 RMB’000 RMB’000
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,102 3,311 27,413
Additional provisions made /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,992 527 3,519
Provisions utilised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(332) (115) (447)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,929 742 3,671
At 31 December 2022 and 1 January 2023 /H1118/H1118/H1118/H1118/H111829,691 4,465 34,156
Additional provisions made /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,978 106 8,084
Provisions utilised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,648) – (3,648)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(588) (288) (876)
At 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H111833,433 4,283 37,716
Additional provisions made /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,554 – 11,554
Provisions utilised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,133) (4,283) (16,416)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,290 – 4,290
At 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H111837,144 – 37,144
Additional provisions made /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,155 – 36,155
Provisions utilised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,593) – (11,593)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,046 – 4,046
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,752 – 65,752
31 CAPITAL, RESERVES AND DIVIDENDS
(a) Movements in components of equity
The reconciliation between the opening and closing balances of each component of the Group’s consolidated
equity is set out in the consolidated statements of changes in equity. Details of the changes in the Company’s
individual components of equity between the beginning and the end of the year are set out below:
Share
capital
Treasury
shares
Share
premium
PRC
statutory
reserves
Share-
based
payment
reserve
Other
reserve
Retained
earnings Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118868,638 (107,674) 1,231,199 50,777 36,512 23,466 155,223 2,258,141
Changes in equity for
2022:
Profit for the year /H1118/H1118/H1118/H1118–––––– 173,031 173,031
Other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 4,676 – 4,676
Total comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 4,676 173,031 177,707
Purchase of own shares /H1118 – (31,141) ––––– (31,141)
Equity-settled share-
based transactions /H1118/H1118/H1118477 69,529 (56,732) – 10,253 – – 23,527
Transfer of other
comprehensive income
to retained earnings /H1118/H1118 ––––– (6,033) 6,033 –
Appropriation to
statutory reserves /H1118/H1118/H1118/H1118– – – 17,303 – – (17,303) –
Dividends approved in
respect of the previous
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– (25,801) (25,801)------
------ ------- ----- ----- ----- ------ -------
Balance at 31 December
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118869,115 (69,286) 1,174,467 68,080 46,765 22,109 291,183 2,402,433
APPENDIX I ACCOUNTANTS’ REPORT
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Share
capital
Treasury
shares
Share
premium
PRC
statutory
reserves
Share-
based
payment
reserve
Other
reserve
Retained
earnings Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118869,115 (69,286) 1,174,467 68,080 46,765 22,109 291,183 2,402,433
Changes in equity for
2023:
Profit for the year /H1118/H1118/H1118/H1118–––––– 81,594 81,594
Other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 5,849 – 5,849
Total comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 5,849 81,594 87,443
Equity-settled share-
based transactions /H1118/H1118/H1118416 9,195 3,252 – 6,502 – – 19,365
Transfer of other
comprehensive income
to retained earnings /H1118/H1118 ––––– 4 5 0 (450) –
Appropriation to
statutory reserves /H1118/H1118/H1118/H1118– – – 8,159 – – (8,159) –
Dividends approved in
respect of the previous
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– (26,014) (26,014)------
----- ------- ----- ----- ----- ------ -------
Balance at 31 December
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118869,531 (60,091) 1,177,719 76,239 53,267 28,408 338,154 2,483,227
Share
capital
Treasury
shares
Share
premium
PRC
statutory
reserves
Share-
based
payment
reserve
Other
reserve
Retained
earnings Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118869,531 (60,091) 1,177,719 76,239 53,267 28,408 338,154 2,483,227
Changes in equity for
2024:
Loss for the year /H1118/H1118/H1118/H1118/H1118–––––– (68,779) (68,779)
Other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 21,295 – 21,295
Total comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 21,295 (68,779) (47,484)
Purchase of own shares /H1118 ––––––––
Equity-settled share-
based transactions /H1118/H1118/H1118 –––– 10,451 – – 10,451
Transfer of other
comprehensive income
to retained earnings /H1118/H1118 ––––– 1,600 (1,600) –
Dividends approved in
respect of the previous
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– (52,020) (52,020)------
----- ------- ----- ----- ----- ------ -------
Balance at 31 December
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118869,531 (60,091) 1,177,719 76,239 63,718 51,303 215,755 2,394,174
APPENDIX I ACCOUNTANTS’ REPORT
– I-79 –


--- page 528 ---
Share
capital
Treasury
shares
Share
premium
PRC
statutory
reserves
Share-
based
payment
reserve
Other
reserve
Retained
earnings Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118869,531 (60,091) 1,177,719 76,239 63,718 51,303 215,755 2,394,174
Changes in equity for
2025:
Loss for the period /H1118/H1118/H1118/H1118–––––– (82,056) (82,056)
Other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 12,578 – 12,578
Total comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 12,578 (82,056) (69,478)
Equity-settled share-
based transactions /H1118/H1118/H11184,000 (41,080) 37,080 – 14,450 – – 14,450
Cancellation of shares
(Note 31(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,513) 60,091 (57,578) –––––------ ----- ------- ----- ----- ----- ------ -------
Balance at
30 September 2025 /H1118/H1118871,018 (41,080) 1,157,221 76,239 78,168 63,881 133,699 2,339,146
(b) Dividends
During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025, the
Company declared dividends of RMB25,801,000, RMB26,014,000, RMB52,020,000 and nil, respectively to its
shareholders.
(c) Issued share capital
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Ordinary shares of RMB1 each,
issued and fully paid:
At the beginning of the year/period /H1118 868,638 869,115 869,531 869,531
Issue of ordinary shares for
settlement equity-settled
share-based transactions /H1118/H1118/H1118/H1118/H1118/H1118/H1118639 547 – –
Issue of RSUs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 4,000
Cancellation of unvested restricted
shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(162) (131) – –
Cancellation of shares (Note) /H1118/H1118/H1118/H1118 – – – (2,513)
At the end of the year/period /H1118/H1118/H1118/H1118/H1118869,115 869,531 869,531 871,018
Note: As approved by the resolution of shareholders on 15 January 2025, the Company decided to cancel the
remaining 2,513,000 repurchased shares for the purpose of equity settled share-based transactions. Such
cancellation was completed on 6 March 2025.
APPENDIX I ACCOUNTANTS’ REPORT
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(d) Treasury shares
No. of Treasury shares Treasury shares
’000 RMB’000
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,360 (107,674)
Issue of shares granted under 2022 ESPP (Note 27(c)) /H1118/H1118/H1118/H1118/H1118 (6,727) 59,633
Cancellation of unvested restricted shares (Note 31(c)) /H1118/H1118/H1118/H1118/H1118 (162) 451
V ested restricted shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,130) 9,445
Purchase of own shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,281 (31,141)
At 31 December 2022 and 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,622 (69,286)
Cancellation of unvested restricted shares (Note 31(c)) /H1118/H1118/H1118/H1118/H1118 (131) 514
V ested restricted shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,978) 8,681
At 31 December 2023, 1 January 2024 and 31 December
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,513 (60,091)
Cancellation of shares (Note 31(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,513) 60,091
Issue of RSUs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,000 (41,080)
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,000 (41,080)
The treasury shares are used for restricted share incentive plans or equity excitation.
(e) Nature and purposes of reserves
(i) Share premium
The share premium represents the excess of capital injections made by the equity shareholders over the par
value of the shares issued.
During the year ended 31 December 2023, the Group acquired additional equity interests in certain subsidiaries
from the respective non-controlling interests and further increased its ownership in these subsidiaries while the Group
retains the control. The acquisition of non-controlling interests resulted in a decrease in share premium of
RMB233,150,000, being the difference between the cash consideration paid to non-controlling interests and the
carrying amount of non-controlling interests acquired on the date of acquisition.
During the nine months ended 30 September 2025, the Company cancelled its certain share capital. The
cancellation of share capital resulted in a decrease in share premium of RMB57,578,000, being the difference
between share capital and treasury shares.
(ii) PRC statutory reserve
According to the PRC Company Law, the Company’s PRC subsidiaries are required to transfer 10% of their
profit after taxation, as determined under the PRC accounting regulations, to statutory reserve until the reserve
balance reaches 50% of the registered capital. For the purpose of calculating the transfer to reserve, the profit after
taxation shall be the amount determined based on the statutory financial statements prepared in accordance with PRC
accounting standards. The transfer to this reserve must be made before distribution of dividend to shareholders.
Statutory reserve fund can be used to cover previous years’ losses, if any, and may be converted into share
capital by the issue of new shares to shareholders in proportion to their existing shareholdings or by increasing the
par value of the shares currently held by them, provided that the balance after such issue is not less than 25% of the
registered capital.
(iii) Share-based payment reserve
The share-based payment reserve represents the portion of the grant date fair value of the restricted shares of
the Company, granted to the employees of the Group that has been recognised in accordance with the accounting
policy adopted for share-based payments in Note 2(s)(iii).
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 530 ---
(iv) Other reserve
Other reserve mainly includes:
(a) fair value reserve (non-recycling) comprises the cumulative net change in the fair value of financial
assets measured at FVOCI that are held at the end of the reporting.
(b) fair value reserve which comprises remeasurements arising from defined benefit retirement plans
obligations including comprise actuarial gains and losses and any change in the effect of the asset
ceiling (excluding amounts included in net interest on the net defined benefit liability (asset)).
(c) The exchange reserve comprises all foreign exchange differences arising from the translation of the
financial statements of foreign operations.
(f) Capital management
The Group’s primary objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, by
pricing products and services commensurately with the level of risk and by securing access to finance at a reasonable
cost.
The Group actively and regularly reviews and manages its capital structure to maintain a balance between the
higher shareholder returns that might be possible with higher levels of borrowings and the advantages and security
afforded by a sound capital position, and makes adjustments to the capital structure in light of changes in economic
conditions.
The Group’s overall strategy remains unchanged throughout the Track Record Period. The Group monitors its
capital structure with reference to its debt position. The Group’s strategy is to maintain the equity and debt in a
balanced position and ensure there are adequate working capital to service its debt obligations. The Group’s debt to
asset ratio, being the Group’s total liabilities over its total assets, as at 31 December 2022, 2023 and 2024 and 30
September 2025 was 62.8%, 72.0%, 81.3% and 80.4% respectively.
32 FINANCIAL RISK MANAGEMENT AND FAIR V ALUES OF FINANCIAL INSTRUMENTS
Exposure to credit, liquidity, interest rate and currency risks arises in the normal course of the Group’s
business.
The Group’s exposure to these risks and the financial risk management policies and practices used by the
Group to manage these risks are described below.
(a) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a
financial loss to the Group. The Group’s credit risk is primarily attributable to accounts trade receivables, contract
assets or other financial assets including the risk that receivables will be collected late or not at all if a customer or
another contractual party does not fulfill its contractual obligations. The Group’s exposure to credit risk arising from
cash and cash equivalents, restricted bank deposits and bills receivable is limited because the counterparties are banks
and financial institutions with high credit standing, which the Group considers to represent low credit risk.
The Group does not provide any guarantees which would expose the Group to credit risk.
Trade receivables and contract assets
The Group has established a credit risk management policy under which individual credit evaluations
are performed on all customers requiring credit over a certain amount. These evaluations focus on the
customer’s past history of making payments when due and current ability to pay, and take into account
information specific to the customer as well as pertaining to the economic environment in which the customer
operates. Normally, the Group does not obtain collateral from customers.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 531 ---
The Group has no significant concentration of credit risk in industries or countries in which the
customers operate. Significant concentrations of credit risk primarily arise when the Group has significant
exposure to individual customers. As at 31 December 2022, 2023 and 2024 and 30 September 2025, 6.8%,
9.4%, 18.8% and 28.4% of the total trade receivables was due from the Group’s largest customer, and 26.5%,
34.1%, 35.6% and 46.3% of the total trade receivables, respectively, was due from the Group’s five largest
customers.
The Group measures loss allowances for trade receivables and contract assets at an amount equal to
lifetime ECLs, which is assessed for impairment both on an individual basis and on a collective group basis
based on different credit risk characteristics. Trade receivables and contract assets are categorised as follows
for assessment purpose:
 Grou p 1 – individual: receivables from the counterparties with special consideration
 Grou p 2 – collective: other trade receivables and contract assets
As at 31 December 2022, 2023 and 2024 and 30 September 2025, the gross carrying amount of trade
receivables and contract assets in these categories are as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Group 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,995 50,432 63,113 47,321
Group 2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,425,973 1,864,690 2,031,027 2,290,215
1,452,968 1,915,122 2,094,140 2,337,536
The loss allowance of Group 1 as at 31 December 2022, 2023 and 2024 and 30 September 2025 was as
follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,995 50,432 63,113 47,321
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118(20,461) (42,884) (52,299) (36,646)
6,534 7,548 10,814 10,675
The directors of the Company estimate that the credit risk of trade receivables from certain customers
are high. The measurement of ECL on those trade receivables with high credit risk is assessed on an individual
basis. The loss allowance of receivables from the counterparties in Group 1 are based on the expected
recoverable amount.
The loss allowance of Group 2 as at 31 December 2022, 2023 and 2024 and 30 September 2025 was
determined as follows:
As at 31 December 2022
Average expected
loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.89% 1,284,413 24,219
More than 1 year but within 2 years /H1118/H1118/H1118/H1118 8.37% 87,334 7,308
More than 2 years but within 3 years /H1118/H1118/H1118/H1118 29.17% 22,389 6,530
More than 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874.47% 31,837 23,709
1,425,973 61,766
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 532 ---
As at 31 December 2023
Average expected
loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.97% 1,691,077 33,344
More than 1 year but within 2 years /H1118/H1118/H1118/H1118 8.94% 121,734 10,877
More than 2 years but within 3 years /H1118/H1118/H1118/H1118 28.79% 26,817 7,720
More than 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876.27% 25,062 19,115
1,864,690 71,056
As at 31 December 2024
Average expected
loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.97% 1,547,268 30,518
More than 1 year but within 2 years /H1118/H1118/H1118/H1118 9.42% 409,651 38,601
More than 2 years but within 3 years /H1118/H1118/H1118/H1118 26.34% 56,386 14,850
More than 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871.49% 17,722 12,669
2,031,027 96,638
As at 30 September 2025
Average expected
loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.05% 1,958,544 40,175
More than 1 year but within 2 years /H1118/H1118/H1118/H1118 10.00% 236,476 23,648
More than 2 years but within 3 years /H1118/H1118/H1118/H1118 30.00% 86,505 25,952
More than 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869.82% 8,690 6,067
2,290,215 95,842
Expected loss rates are based on actual loss experience over the past years. These rates are adjusted to
reflect differences between economic conditions during the period over which the historic data has been
collected, current conditions and the Group’s view of economic conditions over the expected lives of the
receivables.
Movement in the loss allowance account in respect of trade receivables and contract assets for the years
ended 2022, 2023 and 2024 and 30 September 2025 is as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Balance at the beginning of
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,893 82,227 113,940 148,937
Impairment losses recognised /H1118 34,888 29,579 62,689 (4,813)
Amounts written off /H1118/H1118/H1118/H1118/H1118/H1118(14,283) (3,852) (27,109) (13,227)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(271) 5,986 (583) 1,591
Balance at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,227 113,940 148,937 132,488
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 533 ---
(b) Liquidity risk
Individual operating entities within the Group are responsible for their own cash management, including the
short-term investment of cash surpluses and the raising of loans to cover expected cash demands, subject to approval
by the parent company’s board when the borrowings exceed certain predetermined levels of authority. The Group’s
policy is to regularly monitor its liquidity requirements and its compliance with lending covenants, to ensure that it
maintains sufficient reserves of cash and readily realisable marketable securities and adequate committed lines of
funding from major financial institutions to meet its liquidity requirements in the short and longer term.
The following tables show the remaining contractual maturities at the end of each reporting period of the
Group’s financial liabilities, which are based on contractual undiscounted cash flows (including interest payments
computed using contracted rates or, if floating, based on rates current as at 31 December 2022, 2023 and 2024 and
30 September 2025) and the earliest date the Group can be required to pay.
As at 31 December 2022
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but
less than
5 years
More than
5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Bank loans and
other borrowings /H1118 1,473,181 1,071,077 410,910 – 2,955,168 2,883,363
Trade and other
payables /H1118/H1118/H1118/H1118/H1118/H11181,582,59 1––– 1,582,591 1,582,591
Lease liabilities /H1118/H1118/H111814,146 14,146 24,573 18,600 71,465 68,289
3,069,918 1,085,223 435,483 18,600 4,609,224 4,534,243
As at 31 December 2023
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but
less than
5 years
More than
5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Bank loans and
other borrowings /H1118 2,429,697 1,104,627 797,545 – 4,331,869 4,214,586
Trade and other
payables /H1118/H1118/H1118/H1118/H1118/H11182,299,42 1––– 2,299,421 2,299,421
Lease liabilities /H1118/H1118/H111813,104 13,114 15,471 16,420 58,109 55,527
4,742,222 1,117,741 813,016 16,420 6,689,399 6,569,534
As at 31 December 2024
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but
less than
5 years
More than
5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Bank loans and
other borrowings /H1118 2,973,556 1,100,445 763,211 – 4,837,212 4,721,971
Trade and other
payables /H1118/H1118/H1118/H1118/H1118/H11182,555,55 7––– 2,555,557 2,555,557
Lease liabilities /H1118/H1118/H111821,056 10,160 30,205 30,064 91,485 87,420
5,550,169 1,110,605 793,416 30,064 7,484,254 7,364,948
APPENDIX I ACCOUNTANTS’ REPORT
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As at 30 September 2025
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but
less than
5 years
More than
5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Bank loans and
other borrowings /H1118 2,842,115 949,026 737,144 – 4,528,285 4,436,697
Trade and other
payables /H1118/H1118/H1118/H1118/H1118/H11182,658,42 6––– 2,658,426 2,658,426
Lease liabilities /H1118/H1118/H111822,620 16,866 34,341 26,019 99,846 82,129
5,523,161 965,892 771,485 26,019 7,286,557 7,177,252
(c) Interest rate risk
Interest-bearing financial instruments at variable rates and at fixed rates expose the Group to fair value interest
risk and cash flow interest rate risk, respectively. The Group determines the appropriate weightings of the fixed and
floating rate interest-bearing instruments based on the current market conditions and performs regular reviews and
monitoring to achieve an appropriate mix of fixed and floating rate exposure. The fair value interest rate risk and cash
flow interest rate risk that the Group exposed to are not significant.
(i) Interest rate profile
The following table details the interest rate profile of the Group’s bank loans, other borrowings and lease
liabilities as at 31 December 2022, 2023 and 2024 and 30 September 2025:
As at 31 December 2022 As at 31 December 2023 As at 31 December 2024 As at 30 September 2025
Effective
interest rates Amount
Effective
interest rates Amount
Effective
interest rates Amount
Effective
interest rates Amount
% RMB’000 % RMB’000 % RMB’000 % RMB’000
Fixed rate
instruments:
Bank loans and
other borrowings /H1118
0.94%-
3.85% 1,819,363
0.94%-
6.00% 2,647,296
0.94%-
6.00% 2,822,033
1.15%-
6.00% 2,191,805
Lease liabilities /H1118/H1118
4.25%-
4.65% 68,289
4.25%-
5.38% 55,527
4.25%-
5.38% 87,420
4.25%-
4.65% 82,129
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H11181,887,652 2,702,823 2,909,453 2,273,934------- ------- ------- -------
Variable rate
instruments:
Bank loans and
other borrowings /H1118
3.00%-
4.78% 1,064,000
2.70%-
4.3% 1,567,290
2.40%-
4.19% 1,899,938
2.15%-
6.43% 2,244,892
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H11181,064,000 1,567,290 1,899,938 2,244,892------- ------- ------- -------
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,951,652 4,270,113 4,809,391 4,518,826
(ii) Sensitivity analysis
As at 31 December 2022, 2023 and 2024 and 30 September 2025, it is estimated that a general
increase/decrease of 100 basis points in interest rates, with all other variable held constant, would have
decreased/increased the Group’s profit/(loss) after tax and retained profits by approximately RMB9,046,000,
RMB13,323,000, RMB16,147,000 and RMB19,024,000 in response to the general increase/decrease in interest rates.
The sensitivity analysis above indicates the instantaneous change in the Group’s profit after tax and retained
profits that would arise assuming that the change in interest rates had occurred at the end of each reporting period
and had been applied to re-measure those financial instruments held by the Group which expose the Group to fair
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 535 ---
value interest rate risk at the end of each reporting period. In respect of the exposure to cash flow interest rate risk
arising from floating rate non-derivative instruments held by the Group at the end of each reporting period, the impact
on the Group’s profit after tax and retained profits is estimated as an annualised impact on interest expense or income
of such a change in interest rates.
(d) Currency risk
As at 31 December 2022, 2023 and 2024 and 30 September 2025, the Group is not exposed to significant
foreign currency risk since financial assets and liabilities denominated in currencies other than the functional
currencies of the Company and its subsidiaries are not significant.
(e) Fair value measurement
(i) Financial assets measured at fair value
Fair value hierarchy
The following table presents the fair value of the Group’s financial instruments measured at the end of
each reporting period on a recurring basis, categorised into the three-level fair value hierarchy as defined in
IFRS 13, Fair value measurement . The level into which a fair value measurement is classified is determined
with reference to the observability and significance of the inputs used in the valuation technique as follows:
 Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted
prices in active markets for identical assets or liabilities at the
measurement date.
 Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which
fail to meet Level 1, and not using significant unobservable inputs.
Unobservable inputs are inputs for which market data are not available.
 Level 3 valuations: Fair value measured using significant unobservable inputs.
Analysis on fair value measurement of financial instruments are as follows:
As at 31 December 2022
Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
Fair value measured on a
recurring basis
Financial assets measured at
FVPL
– Wealth management products /H1118/H1118 – 578,115 – 578,115
– Unlisted equity securities /H1118/H1118/H1118/H1118 – 10,000 132,739 142,739
– Unlisted units in investment
funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 119,475 119,475
Financial assets measured at
FVOCI
– Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 296,140 – 296,140
– Unlisted equity securities /H1118/H1118/H1118/H1118 – 19,905 114,575 134,480
APPENDIX I ACCOUNTANTS’ REPORT
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As at 31 December 2023
Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
Fair value measured on a
recurring basis
Financial assets measured at
FVPL
– Wealth management products /H1118/H1118 – 415,820 – 415,820
– Unlisted equity securities /H1118/H1118/H1118/H1118 – 13,155 149,919 163,074
– Unlisted units in investment
funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 20,000 128,498 148,498
Financial assets measured at
FVOCI
– Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 671,921 – 671,921
– Unlisted equity instruments /H1118/H1118/H1118 – 19,905 121,535 141,440
As at 31 December 2024
Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
Fair value measured on a
recurring basis
Financial assets measured at
FVPL
– Wealth management products /H1118/H1118 – 388,913 – 388,913
– Unlisted equity securities /H1118/H1118/H1118/H1118 – 13,155 133,607 146,762
– Unlisted units in investment
funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 66,970 66,970
Financial assets measured at
FVOCI
– Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 483,536 – 483,536
– Unlisted equity securities /H1118/H1118/H1118/H1118 – 19,905 160,303 180,208
As at 30 September 2025
Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
Fair value measured on a
recurring basis
Financial assets measured at
FVPL
– Wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 170,136 – 170,136
– Unlisted equity securities /H1118/H1118 – 13,155 146,485 159,640
– Unlisted units in investment
funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 61,542 61,542
Financial assets measured at
FVOCI
– Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 557,580 – 557,580
– Unlisted equity securities /H1118/H1118 – 21,505 151,756 173,261
During the years ended December 2022, 2023 and 2024 and the nine months ended 30 September 2025,
there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3. The Group’s policy
is to recognise transfers between levels of fair value hierarchy as at the end of each reporting period in which
they occur.
APPENDIX I ACCOUNTANTS’ REPORT
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Valuation techniques and inputs used in Level 2 fair value measurements
The fair values of the bills receivable 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 have been assessed to be approximate to their carrying amounts.
The fair value of certain unlisted equity securities and unlisted units in investment funds is determined
using comparable transactions adjusted approach or market approach adjusted for changing trend of medium
market multiples of comparable companies or medium market multiples of comparable companies. The fair
value measurement is positively correlated to the changing trend of medium market multiples of comparable
companies or medium market multiples of comparable companies.
Information about Level 3 fair value measurements
Valuation techniques Significant unobservable inputs
Unlisted equity securities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Comparable transactions
adjusted approach/market
approach (Note i)
Changing trend of medium
market multiples of
comparable companies/
medium market multiples
of comparable companies
Unlisted units in investment funds /H1118/H1118/H1118/H1118/H1118/H1118Net asset value (Note ii) Net asset value of
underlying investments
Notes:
(i) The fair value of certain unlisted equity securities is determined using comparable transactions adjusted
approach or market approach adjusted for changing trend of medium market multiples of comparable
companies or medium market multiples of comparable companies. The fair value measurement is
positively correlated to the changing trend of medium market multiples of comparable companies or
medium market multiples of comparable companies. As at 31 December 2022, 2023 and 2024 and 30
September 2025, it is estimated that with all other variables held constant, an increase/decrease in
change of medium market multiples of comparable companies or medium market multiples of
comparable companies by 5% would have increased/decreased the Group’s profit for the year/period by
RMB5,641,000, RMB6,372,000, RMB5,678,000 and RMB6,226,000 and increased/decreased the
Group’s other comprehensive income for the year/period by RMB5,456,000, RMB5,752,000,
RMB7,400,000 and RMB6,821,000.
(ii) The fair value of unlisted units in investment funds is determined referencing net asset value of
underlying investments. The fair value measurement is positively correlated to net asset value of
underlying investments. As at 31 December 2022, 2023 and 2024 and 30 September 2025, it is estimated
that with all other variables held constant, an increase/decrease in net asset value of underlying
investments by 5% would have increased/decreased the Group’s profit for the year/period by
RMB5,078,000, RMB5,461,000, RMB2,846,000 and RMB2,616,000.
APPENDIX I ACCOUNTANTS’ REPORT
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The following table shows a reconciliation from the beginning balances to the ending balances for fair
value measurement in Level 3 of the fair value hierarchy:
Financial assets
measured at
FVOCI
Financial assets
measured at FVPL Total
RMB’000 RMB’000 RMB’000
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,554 56,500 167,054
Net unrealised gains during the year /H1118/H1118/H1118/H1118 743 47,828 48,571
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,450 154,386 157,836
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(172) (6,500) (6,672)
At 31 December 2022 and 1 January 2023 /H1118 114,575 252,214 366,789
Net unrealised gains during the year /H1118/H1118/H1118/H1118 7,410 24,720 32,130
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 10,000 10,000
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(450) (8,517) (8,967)
At 31 December 2023 and 1 January 2024 /H1118 121,535 278,417 399,952
Net unrealised gains/(losses) during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,338 (24,450) 888
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,430 – 13,430
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (53,390) (53,390)
At 31 December 2024 and 1 January 2025 /H1118 160,303 200,577 360,880
Net unrealised (losses)/gains during the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,547) 12,878 (2,669)
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,000 – 7,000
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (5,428) (5,428)
At 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118151,756 208,027 359,783
(ii) Fair value of financial assets and liabilities carried at other than fair value
The carrying amounts of the Group’s financial instruments carried at amortised cost were not materially
different from their fair values as at 31 December 2022, 2023 and 2024 and 30 September 2025.
33 COMMITMENTS
Capital commitments of the Group outstanding as at 31 December 2022, 2023 and 2024 and 30 September
2025 not provided for in the financial statements were as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contracted for acquisition of
property, plant and equipment,
intangible assets and other
long-term assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118578,484 298,968 208,800 96,143
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 539 ---
34 MATERIAL RELATED PARTY TRANSACTIONS
(a) Key management personnel remuneration
Remuneration for key management personnel of the Group, including amounts paid to the Company’s directors
and supervisors as disclosed in Note 8 and certain of the highest paid employees as disclosed in Note 9, is as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Short-term employee
benefit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,473 6,335 8,085 5,898 6,383
Share-based payment /H1118/H1118/H1118/H1118479 686 874 578 1,213
Contributions to defined
contribution
retirement plans /H1118/H1118/H1118/H1118/H1118/H1118303 300 371 267 324
7,255 7,321 9,330 6,743 7,920
Total remuneration is included in “staff costs” (see Note 6(b)).
(b) Name and relationship with related parties
Name of related parties Relationship
Nanjing Primest /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Controlling shareholder
Estun (Nanjing) Medical Technology Co., Ltd.
(“Estun Nanjing Medical”) (౶཭(ԯ)ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Fellow subsidiary (associate
before
26 December 2024)
Changzhou Estun Medical Technology Co., Ltd.
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Fellow subsidiary
Nanjing Estun Future Technology Research Institute Co., Ltd.
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Fellow subsidiary
Nanjing Estun Codroid Technology Co., Ltd.
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Fellow subsidiary (associate
during the Track Record
Period)
Nanjing Jianruijie Software Development Co., Ltd.
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate
Nanjing Y uanshi Control System Co., Ltd.
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate
Shiyan Intelligent Technology (Guangzhou) Co., Ltd.
(Ҧ(ᄿψ)ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate
Shandong Haida Robot Technology Co., Ltd.
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate
Xiamen Fengyuan Robotics Co., Ltd. (ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118Associate before 24 March
2025
Shenzhen Meisitu Technology Co., Ltd. (ʮ̡) /H1118/H1118/H1118Associate
Zhejiang Qicheng Intelligent Technology Co., Ltd.
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate before 31 March
2025
Y angzhou Shuguang Optoelectronics Automation Co., Ltd.
(ப΂ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate since 25 June
2025
JSTN PTE. LTD. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Associate
JSTN (MALAYSIA) SDN. BHD. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Associate
APPENDIX I ACCOUNTANTS’ REPORT
– I-91 –


--- page 540 ---
(c) Guarantees issued by a related party
Certain bank facilities granted to the Group were guaranteed by the controlling shareholder Nanjing Primest.
An analysis of the carrying value of bank loans under guarantee is as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank loans (Note 24) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118654,447 388,058 354,720 208,378
The outstanding balances of above bank loans were repaid on 27 October 2025 by the Group and the guarantees
were released accordingly.
(d) Other significant related party transactions
During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2024 and
2025, the Group had following material transactions with related parties:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Purchase of goods
– Associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,440 7,804 5,588 3,671 5,881
– Fellow subsidiaries /H1118/H1118/H1118 42 28 7,979 2,553 12,862
Sale of goods and
rendering of services
– Associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,743 158,988 62,799 52,179 73,694
– Fellow subsidiaries /H1118/H1118/H1118 3,629 6,443 5,762 3,090 3,745
Rental income
– Fellow subsidiaries /H1118/H1118/H1118 571 667 2,505 1,888 2,393
Repayments of loans
– Controlling shareholder /H1118 107,696 110,000 11,112 11,112 –
(e) Significant related party balances
As at 31 December 2022, 2023 and 2024 and 30 September 2025, the Group had following material balances
with related parties:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade related
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897,126 152,856 96,078 78,086
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,453 9,434 15,254 19,426
Non-trade related
Loans from the controlling
shareholder /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118121,112 11,112 – –
APPENDIX I ACCOUNTANTS’ REPORT
– I-92 –


--- page 541 ---
35 SUBSEQUENT EVENTS
On 20 October 2025, the Group entered into a share transfer agreement, pursuant to which the Group agreed
to transfer the remaining 48% equity interest in Y angzhou Shuguang, a material associate of the Group, to Wuxi
Xinhongye Wire & Cable Technology Co., Ltd. (ʮ̡), at a consideration of RMB244.8
million. The transfer was completed on 3 November 2025.
36 ULTIMATE CONTROLLING PARTY
As at the date of this report, the Directors consider the ultimate controlling party of the Group to be Mr. Wu
Bo, Mr. Wu Kan (son of Mr. Wu Bo) and Ms. Liu Fang (spouse of Mr. Wu Bo).
37 POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED
BUT NOT YET EFFECTIVE FOR THE TRACK RECORD PERIOD
Up to the date of issue of this report, the IASB has issued a number of new or amended standards, which are
not yet effective for the Track Record Period and which have not been adopted in preparing the Historical Financial
Information. These developments include the following which may be relevant to the Group.
Effective for accounting
periods beginning on or after
Amendments to IFRS 9 and IFRS 7, Contracts Referencing Nature-dependent
Electricity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1 January 2026
Amendments to IFRS 9 and IFRS 7: Amendments to the classification and
measurement of financial instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1 January 2026
Annual Improvements to IFRS Accounting Standards – V olume 11 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 January 2026
IFRS 18, Presentation and disclosure in financial statements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 January 2027
IFRS 19, Subsidiaries without public accountability: disclosures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 January 2027
Amendments to IFRS 10 and IAS 28, Sale or contribution of assets between
an investor and its associate or joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
To be determined
The Group is in the process of making an assessment of what the impact of these developments is expected
to be in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a
significant impact on the consolidated financial statements except for the following:
IFRS 18, Presentation and Disclosure in Financial Statements
IFRS 18 will replace IAS 1 Presentation of financial statements and aims to improve the transparency and
comparability of information about an entity’s financial statements. IFRS 18 is effective for annual reporting periods
beginning on or after 1 January 2027 and is to be applied retrospectively.
Among other changes, under IFRS 18, entities are required to classify all income and expenses into five
categories in the statement of profit or loss, namely the operating, investing, financing, discontinued operations and
income tax categories. Entities are also required to provide specific disclosures about management-defined
performance measures in a single note in the financial statements.
The Group does not plan to early adopt IFRS 18. IFRS 18 will impact the presentation of financial statements
and is not expected to have significant impact on the financial performance and financial position of the Group.
SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company and its subsidiaries
comprising the Group in respect of any period subsequent to 30 September 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-93 –


--- page 542 ---
The estimated consolidated profit attributable to equity shareholders of our Company for
the year ended December 31, 2025 is set out in “Summary — Profit Estimate for the year ended
December 31, 2025” in this prospectus.
A. BASES
Our Directors have prepared the estimate of the consolidated profit attributable to equity
shareholders of our Company for the year ended December 31, 2025 (the “ Profit Estimate ”)
on the basis of the audited consolidated results of our Group for the nine months ended
September 30, 2025 and the unaudited consolidated results based on the management accounts
of the Group for the two months ended November 30, 2025, and an estimate of the consolidated
results of the Group for the remaining one month ended December 31, 2025.
The Profit Estimate has been prepared on the basis of the accounting policies consistent
in all material respects with those currently adopted by our Group as summarized in the
Accountants’ Report as set out in Appendix I to this prospectus.
B. PROFIT ESTIMATE FOR THE YEAR ENDED DECEMBER 31, 2025
On the basis set out in “— A. Bases,” and in the absence of unforeseen circumstances, we
estimate that our unaudited consolidated profit attributable to equity shareholders of our
Company for the year ended December 31, 2025 is as follows:
Estimated consolidated profit attributable to equity
shareholders of our Company for the year ended
December 31, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Not less than RMB35.0
million
APPENDIX IA PROFIT ESTIMATE
– IA-1 –


--- page 543 ---
C. LETTER FROM THE REPORTING ACCOUNTANTS
The following is the text of a letter, prepared for the purpose of inclusion in this document,
from the reporting accountants, KPMG, Certified Public Accountants, Hong Kong, in relation
to the Group’ s profit estimate.
The Directors
ESTUN AUTOMA TION CO., LTDʮ̡
Huatai Financial Holdings (Hong Kong) Limited
Dear Sirs,
ESTUN AUTOMA TION CO., LTDʮ̡ (“the Company ”)
Profit Estimate for Y ear Ended 31 December 2025
We refer to the estimate of the consolidated profit attributable to equity shareholders of
the Company for the year ended 31 December 2025 (“the Profit Estimate ”) set forth in the
section headed “Summary — Profit Estimate for the year ended December 31, 2025” in the
prospectus of the Company dated 27 February 2026 (“the Prospectus ”).
Directors’ Responsibilities
The Profit Estimate has been prepared by the directors of the Company based on the
audited consolidated results of the Company and its subsidiaries (collectively referred to as
“the Group ”) for the nine months ended 30 September 2025 and the unaudited consolidated
results based on the management accounts of the Group for the two months ended 30 November
2025, and an estimate of the consolidated results of the Group for the remaining one month
ended 31 December 2025.
The Company’s directors are solely responsible for the Profit Estimate.
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 Hong Kong Institute of Certified Public
Accountants (“ HKICPA ”), which is founded on fundamental principles of integrity,
objectivity, professional competence and due care, confidentiality and professional behaviour.
APPENDIX IA PROFIT ESTIMATE
– IA-2 –


--- page 544 ---
Our firm applies Hong Kong Standard on Quality Management (HKSQM) 1 “Quality
Management for Firms that Perform Audits or Reviews of Financial Statements, or Other
Assurance or Related Services Engagements”, which requires the firm to design, implement
and operate a system of quality management including policies or procedures regarding
compliance with ethical requirements, professional standards and applicable legal and
regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion on the accounting policies and calculations of
the Profit Estimate based on our procedures. We conducted our engagement in accordance with
Hong Kong Standard on Investment Circular Reporting Engagements 500 “Reporting on Profit
Forecasts, Statements of Sufficiency of Working Capital and Statements of Indebtedness” and
with reference to Hong Kong Standard on Assurance Engagements 3000 (Revised) “Assurance
Engagements Other Than Audits or Reviews of Historical Financial Information” issued by the
HKICPA. Those standards require that we plan and perform our work to obtain reasonable
assurance as to whether, so far as the accounting policies and calculations are concerned, the
Company’s directors have properly compiled the Profit Estimate in accordance with the bases
adopted by the directors and as to whether the Profit Estimate is presented on a basis consistent
in all material respects with the accounting policies normally adopted by the Group. Our work
is substantially less in scope than an audit conducted in accordance with Hong Kong Standards
on Auditing issued by the HKICPA. Accordingly, we do not express an audit opinion.
Opinion
In our opinion, so far as the accounting policies and calculations are concerned, the Profit
Estimate has been properly compiled in accordance with the bases adopted by the directors as
set out in Appendix IA of the Prospectus and is presented on a basis consistent in all material
respects with the accounting policies normally adopted by the Group as set out in our
accountants’ report dated 27 February 2026, the text of which is set out in Appendix I of the
Prospectus.
Y ours faithfully,
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
27 February 2026
APPENDIX IA PROFIT ESTIMATE
– IA-3 –


--- page 545 ---
D. LETTER FROM THE SOLE SPONSOR ON PROFIT ESTIMATE
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
February 27, 2026
The Directors
ESTUN AUTOMATION CO., LTD
Dear Sirs and Madams,
We refer to the estimate of the consolidated profits attributable to the equity shareholders
of ESTUN AUTOMA TION CO., LTD (the “ Company ”, together with its subsidiaries,
collectively referred to as the “ Group ”) for the year ending December 31, 2025 (the “ Profit
Estimate ”), for which the directors of the Company (the “ Directors ”) are solely responsible,
as set forth in the section headed “Summary — Profit estimate for the year ending December
31, 2025” in the prospectus of the Company dated February 27, 2026 (the “ Prospectus ”).
The Profit Estimate has been prepared by the Directors based on the audited consolidated
results of the Group for the nine months ended September 30, 2025 and the unaudited
consolidated results based on the management accounts of the Group for the two months ended
November 30, 2025, and an estimate of the consolidated results of the Group for the remaining
one month ended December 31, 2025.
We have discussed with you the basis and assumptions made by the Directors as set out
in Appendix IA to the Prospectus, upon which the Profit Estimate has been made. We have also
considered the letter dated February 27, 2026 addressed to you and us from the Company’s
reporting accountants, KPMG, regarding the accounting policies and calculations upon which
the Profit Estimate has been made.
On the basis of the information comprising the Profit Estimate and on the basis of the
accounting policies and calculations adopted by you and reviewed by KPMG, we are of the
opinion that the Profit Estimate, for which you as the Directors are solely responsible, has been
made after due and careful enquiry.
For and on behalf of
Huatai Financial Holdings (Hong Kong) Limited
APPENDIX IA PROFIT ESTIMATE
– IA-4 –


--- page 546 ---
The following information does not form part of the Accountants’ Report from KPMG,
Certified Public Accountants, Hong Kong, the Company’s reporting accountants, as set out in
Appendix I to this prospectus, and is included for illustrative information purposes only. The
unaudited pro forma financial information should be read in conjunction with the section
headed “Financial Information” and the Accountants’ Report set out in Appendix I to this
prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE
ASSETS
The following unaudited pro forma statement of adjusted net tangible assets of the Group
prepared in accordance with Rule 4.29 of the Listing Rules is to illustrate the effect of the
Global Offering on the consolidated net tangible assets of the Group attributable to equity
shareholders of the Company as if the Global Offering had been completed on 30 September
2025.
The unaudited pro forma statement of adjusted 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 financial position of the Group had the Global Offering been completed as at 30
September 2025 or any future date.
Consolidated net
tangible assets
attributable to
equity shareholders
of the Company as
of 30 September
2025 (1)
Estimated net
proceeds from the
Global Offering (2)(4)
Unaudited pro
forma adjusted
consolidated net
tangible assets
attributable to
equity shareholders
of the Company
Unaudited pro forma adjusted
consolidated net tangible assets
attributable to equity
shareholders of the Company
per Share
RMB’000 RMB’000 RMB’000 RMB (3) HK$(4)
Based on an Offer
Price of HK$15.36
per Offer Share /H1118/H1118/H1118 340,252 1,251,747 1,591,999 1.65 1.86
Based on an Offer
Price of HK$17.00
per Offer Share /H1118/H1118/H1118 340,252 1,389,275 1,729,527 1.79 2.02
Notes:
(1) The consolidated net tangible assets attributable to equity shareholders of the Company as of 30
September 2025 is arriving after (i) deducting goodwill of RMB1,044,588,000 and intangible assets of
RMB560,509,000 and (ii) adjusting the share of intangible assets attributable to non-controlling
interests of RMB4,557,000, from the consolidated total equity attributable to equity shareholders of the
Company of RMB1,940,792,000 as of 30 September 2025, which is extracted from the Accountants’
Report as set out in Appendix I to this prospectus.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 547 ---
(2) The estimated net proceeds from the Global Offering are based on the expected issuance of 96,780,000
Offer Shares and the indicative Offer Prices of HK$15.36 and HK$17.00 per Offer Share, respectively,
being the lower end price and higher end price of the stated Offer Price range, after deduction of the
estimated underwriting fees and other related expenses payable by the Group, (excluding the listing
expenses charged to profit or loss during the Track Record Period of RMB1,128,000) and does not take
into account of any shares which may be issued upon the exercise of the Over-allotment Option and any
shares to be issued pursuant to the share option scheme and share reward scheme.
(3) The unaudited pro forma adjusted consolidated net tangible assets attributable to equity shareholders of
the Company per Share is arrived at after the above adjustments and on the basis that a total of
963,798,453 shares (excluding the 4,000,000 treasury shares as disclosed in Note 31(d) to the
Accountants’ Report as set out in Appendix I to this prospectus) in issue assuming that the Global
Offering had been completed on 30 September 2025 without taking into account of any shares which
may be issued upon the exercise of the Over-allotment Option and any shares to be issued pursuant to
the share option scheme and share reward scheme.
(4) For illustrative purpose, the estimated net proceeds from the Global Offering is converted from the Hong
Kong dollar into Renminbi and the unaudited pro forma adjusted net tangible assets attributable to
equity shareholders of the Company per Share is converted from Renminbi into Hong Kong dollar at a
rate of HK$1 = RMB0.88787, being the PBOC rate prevailing on the Latest Practicable Date. No
representation is made that the Hong Kong Dollars amounts have been, could have been or may be
converted into Renminbi, or vice versa, at that rate.
(5) No adjustment has been made to the unaudited pro forma statement of adjusted net tangible assets to
reflect any trading results or other transactions of the Group entered into subsequent to 30 September
2025, including but not limited to the disposal of remaining 48% equity interest in Y angzhou Shuguang
completed in November 2025 as disclosed in Note 35 to the Accountants’ Report as set out in Appendix
I to this prospectus. Had such disposal been completed on 30 September 2025, the unaudited pro forma
adjusted consolidated net tangible assets attributable to equity shareholders of the Company would have
increased by approximately RMB11,453,000 and the unaudited pro forma adjusted consolidated net
tangible assets attributable to equity shareholders of the Company per Share would have been increased
by RMB0.01 or HK$0.02.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 548 ---
B. REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of a report received from the reporting accountants, KPMG,
Certified Public Accountants, Hong Kong, in respect of the Group’ s pro forma financial
information for the purpose in this prospectus.
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
To the Directors of ESTUN AUTOMATION CO., LTDʮ̡
We have completed our assurance engagement to report on the compilation of pro forma
financial information of ESTUN AUTOMA TION CO., LTDʮ̡
(the “Company”) and its subsidiaries (collectively the “Group”) by the directors of the
Company (the “Directors”) for illustrative purposes only. The unaudited pro forma financial
information consists of the unaudited pro forma statement of adjusted net tangible assets as at
30 September 2025 and related notes as set out in Part A of Appendix II to this prospectus dated
27 February 2026 (the “Prospectus”) issued by the Company. The applicable criteria on the
basis of which the Directors have compiled the pro forma financial information are described
in Part A of Appendix II to this prospectus.
The pro forma financial information has been compiled by the Directors to illustrate the
impact of the proposed offering of the ordinary shares of the Company (the “Global Offering”)
on the Group’s financial position as at 30 September 2025 as if the Global Offering had taken
place at 30 September 2025. As part of this process, information about the Group’s financial
position as at 30 September 2025 has been extracted by the Directors from the Group’s
historical financial information included in the Accountants’ Report as set out in Appendix I
to this prospectus.
Directors’ Responsibilities 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 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment
Circulars” (“AG 7”) issued by the Hong Kong Institute of Certified Public Accountants
(“HKICPA”).
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behaviour.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 549 ---
Our firm applies Hong Kong Standard on Quality Management 1 “Quality Management
for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or
Related Services Engagements”, which requires the firm to design, implement and operate a
system of quality management including policies or procedures regarding compliance with
ethical requirements, professional standards and applicable legal and regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the pro forma financial information and to report our opinion to you. We do
not accept any responsibility for any reports previously given by us on any financial
information used in the compilation of the pro forma financial information beyond that owed
to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements (“HKSAE”) 3420 “Assurance Engagements to Report on the Compilation of Pro
Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard
requires that the reporting accountants plan and perform procedures to obtain reasonable
assurance about whether the Directors have compiled the pro forma financial information in
accordance with paragraph 4.29 of the Listing Rules, and with reference to AG 7 issued by the
HKICPA.
For purpose of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical 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 pro forma financial information included in an investment circular is
solely to illustrate the impact of a significant event or transaction on unadjusted financial
information of the Group as if the event had occurred or the transaction had been undertaken
at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any
assurance that the actual outcome of events or transactions as at 30 September 2025 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 event or transaction, and to obtain sufficient
appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the pro forma financial information reflects the proper application of those
adjustments to the unadjusted financial information.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 550 ---
The procedures selected depend on the reporting accountants’ judgement, having regard
to the reporting accountants’ understanding of the nature of the Group, the event or transaction
in respect of which the pro forma financial information has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating the overall presentation of the pro forma
financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Our procedures on the pro forma financial information have not been carried out in
accordance with attestation standards or other standards and practices generally accepted in the
United States of America, auditing standards of the Public Company Accounting Oversight
Board (United States) or any overseas standards and accordingly should not be relied upon as
if they had been carried out in accordance with those standards and practices.
We make no comments regarding the reasonableness of the amount of net proceeds from
the issuance of the Company’s shares, the application of those net proceeds, or whether such
use will actually take place as described in the section headed “Future Plans and Use of
Proceeds” in this prospectus.
Opinion
In our opinion:
(a) the pro forma financial information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group, and
(c) the adjustments are appropriate for the purposes of the pro forma financial
information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
27 February 2026
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 551 ---
TAXATION OF SECURITY HOLDERS
The taxation of income and capital gains of holders of H Shares is subject to the laws and
practices of the PRC and of jurisdictions in which holders of H Shares are resident or other tax
provisions. The following summary of certain relevant taxation provisions is based on current
laws and practices, is subject to change and does not constitute legal or tax advice. The
discussion does not deal with all possible tax consequences relating to investment in the H
Shares, nor does it take into account the specific circumstances of any particular investor, some
of which may be subject to special regulation. Accordingly, you should consult your own tax
adviser regarding the tax consequences of investment in the H Shares. The discussion is based
upon laws and relevant interpretations in effect as at the Latest Practicable Date, all of which
are subject to change and may have retrospective effect.
The following discussion does not address any aspects of PRC or Hong Kong taxation
other than income tax, capital appreciation and profit tax, business tax/value-added tax, stamp
duty and estate duty. Prospective investors are urged to consult their financial advisers
regarding the PRC, Hong Kong and other tax consequences of owning and disposing of H
Shares.
The PRC Taxation
Taxation on dividends
Individual investors
According to the Individual Income Tax Law of the PRC (੻೼
) (hereinafter referred to as the “Individual Income Tax Law”) that was promulgated on
September 10, 1980 and amended on August 31, 2018 by the Standing Committee of the 13th
NPC, and came into effect on January 1, 2019, and the Implementation Provisions of the
Individual Income Tax Law of the PRC (ૢԷ), that
were 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 are generally subject to a
withholding tax at a flat rate of 20%. In addition, 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 for Dividends and
Bonuses of Listed Companies (й
) issued by the Ministry of Finance (the “MOF”), the
State Taxation Administration (the “SA T”) and the China Securities Regulatory Commission
(the “CSRC”) on September 7, 2015, where an individual acquires stocks of a listed company
from public offering or from the stock transfer market and holds the stocks for more than one
year, the income from dividends is exempt from individual income tax; if the individual holds
the stocks less than one month (one month inclusive), the income from dividends is fully
taxable; if the individual holds the stocks for one month to one year (one year inclusive), 50%
of the income from dividends is taxable; The aforesaid income is subject to an individual
income tax at a flat rate of 20%. In fact, the withholding tax rate for dividends of non-resident
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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individuals may be lower than 20% under certain circumstances. However, according to the
Circular of the MOF and the SA T on Issues Concerning Individual Income Tax Policies ( ৌ
), the income received by
individual foreigners from dividends and bonuses of a foreign-invested enterprise is exempt
from individual income tax for the time being. On February 3, 2013, the State Council
approved and promulgated the Notice of the State Council on Approving and Relaying the
Several Opinions of the National Development and Reform Commission and Other
Departments on Deepening Reform of the Income Distribution System (ҷ
). On February 8, 2013, the General
Office of the State Council promulgated the Notice of the General Office of the State Council
on Deepening the Division of Key Work for Income Distribution System Reform ( ਷ਕ৫፬
). According to these two documents,
the PRC government is planning to cancel foreign individuals’ tax exemption for dividends
obtained from foreign-invested enterprises, and the MOF and the SA T should be responsible
for making and implementing details of such plan. However, relevant implementation rules or
regulations have not been promulgated by the MOF and the SA T. According to the Notice of
the SA T on Issues Concerning Taxation and Administration of Individual Income Tax After the
Repeal of the Document (Guo Shui Fa [1993] No. 45) (਷೼೯[1993]045
) issued by the SA T on June 28, 2011,
domestic non-foreign-invested enterprises issuing shares in Hong Kong may, when distributing
dividends to overseas resident individuals in the jurisdiction of the tax treaty, normally
withhold individual income tax at the rate of 10%. For the individual holders of H Shares
receiving dividends who are citizens of countries that have entered into a tax treaty with the
PRC with tax rates lower than 10%, the non-foreign-invested enterprise whose shares are listed
in Hong Kong may apply on behalf of such holders for enjoying the lower preferential tax
treatments, and, upon approval by the tax authorities, the excessive withholding amount will
be refunded. For the individual holders of H Shares receiving dividends who are citizens of
countries that have entered into a tax treaty with the PRC with tax rates higher than 10% but
lower than 20%, the non-foreign-invested enterprise is required to withhold the tax at the
agreed rate under the agreements, and no application procedures will be necessary. For the
individual holders of H Shares receiving dividends who are citizens of countries without
taxation treaties with the PRC or are under other situations, the non-foreign-invested enterprise
is required to withhold the individual income tax at a rate of 20%.
Pursuant to the Arrangement between the Mainland of China and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to Taxes on Income (ᅄ೼
τર) signed on August 21, 2006, the Chinese government may impose tax
on dividends paid by a Chinese company to a resident of the Hong Kong Special
Administrative Region (including natural person and legal entity), but such tax will not exceed
10% of the total dividends payable by the Chinese company. If a Hong Kong resident directly
holds 25% or more of the equity interest in a Chinese company, such tax will not exceed 5%
of the total dividends payable by the Chinese company. The Fifth Protocol to the Arrangement
between the Mainland of China and the Hong Kong Special Administrative Region for the
Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 553 ---
Income (֛
ࣣeffective on December 6, 2019 stipulates that the arrangements or transactions made for the
primary purpose of obtaining the above-mentioned tax benefits are not subject to the
above-mentioned provisions.
Corporate investors
According to the Enterprise Income Tax Law that was amended and came into effect on
December 29, 2018, and the Implementation Provisions of the Enterprise Income Tax Law of
the PRC (ૢԷ) that were amended and came into effect
on April 23, 2019, where a non-resident enterprise has not set up any institutions or
establishments in China, or it has done so, but its income generated in China is irrelevant to
the said institutions or establishments, it shall pay tax on the portion of its income generated
in China (including dividends received from a PRC resident enterprise whose shares are issued
and listed in Hong Kong) and the enterprise income tax rate is generally 10%. The aforesaid
income tax payable by a non-resident enterprise must be withheld at source. The payer of the
income is the withholding obligator. The withholding tax may be reduced or eliminated under
an applicable treaty for the avoidance of double taxation.
The Notice of the SA T on the Issues Concerning Withholding the Enterprise Income Tax
on the Dividends Distributed by PRC Resident Enterprises to Overseas H-share Holders Which
Are Non-resident Enterprises (͏ΆุΣྤ̮H؇ٰ
) that was promulgated by the SA T and came
into effect on November 6, 2008, further clarifies that with regard to dividends distributed from
profits generated after January 1, 2008, PRC resident enterprises must withhold and pay
enterprise income tax at a tax rate of 10% on dividends distributed to H-share non-PRC
resident enterprise shareholders. The Reply of the Imposition of Enterprise Income Tax on
B-share and Other Dividends of Non-resident Enterprises (͏Άุ՟੻Bୃ
ҭᔧ) that was promulgated by the SA T on July 24, 2009, further
provides that any PRC resident enterprise listed on any overseas stock exchange must withhold
enterprise income tax at a rate of 10% on dividends distributed to non-PRC resident enterprise
shareholders. The above-mentioned tax rate may be further adjusted pursuant to the tax treaty
or agreement that China has concluded with the relevant jurisdiction, where applicable.
Pursuant to the Arrangement between the Mainland of China and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Income (ᅄ೼
τર) signed on August 21, 2006, the Chinese government may impose tax
on dividends paid by a Chinese company to a Hong Kong resident (including natural person
and legal entity), but such tax shall not exceed 10% of the total dividends payable by the
Chinese company. If a Hong Kong resident directly holds 25% or more of the equity interest
in a Chinese company, such tax shall not exceed 5% of the total dividends payable by the
Chinese company. The Fifth Protocol to the Arrangement between the Mainland of China and
the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with Respect to Taxes on Income (׵
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 554 ---
ࣣ֛effective on December 6, 2019
stipulates that the arrangements or transactions made for the primary purpose of obtaining the
above-mentioned tax benefits are not subject to the above-mentioned provisions. The
application of the dividend clause of tax agreements shall be subject to the PRC tax laws and
regulations, such as the Notice of the SA T on the Issues Concerning the Application of the
Dividend Clauses of Tax Agreements (ٙ
).
Tax treaties
Non-PRC resident investors residing in countries that have entered into agreements for
the avoidance of double taxation with China or residing in Hong Kong or Macau Special
Administrative Region are entitled to preferential tax rates on dividends received by such
investors from the Chinese companies. China has entered into arrangements for the avoidance
of double taxation with Hong Kong and Macau Special Administrative Region, respectively,
and has entered into treaties for the avoidance of double taxation with certain other countries,
including but not limited to Australia, Canada, France, Germany, Japan, Malaysia, the
Netherlands, Singapore, the United Kingdom and the United States. A non-PRC resident
enterprise entitled to a preferential tax rate under a relevant income tax treaty or arrangement
may apply to China tax authorities for a refund of the difference between the amount of tax
withheld and the amount of tax calculated according to the agreement rate.
Pursuant to the Administrative Measures on Entitlement of Non-resident Taxpayers to
Preferential Treatment under Tax Agreements (),
which was promulgated by the SA T on October 14, 2019 and became effective on January 1,
2020, non-resident taxpayers are entitled to preferential treatment under the tax agreements
through self-determination, self-declaration and keeping and documenting relevant information
for inspection. Where a non-resident taxpayer self-assesses and concludes that it satisfies the
criteria for claiming treaty benefits, it may enjoy treaty benefits at the time of tax declaration
or at the time of withholding declaration through a withholding agent, simultaneously gather
and retain the relevant materials pursuant to the regulations for future inspection, and be
subject to subsequent administration by tax authorities.
Taxes on income from transfer of equity
VAT and local surcharges
Pursuant to the Circular on Comprehensively Promoting the Pilot Programme of the
Collection of V A T in Lieu of Business Tax (પකᐄุ೼ҷᅄ
) (the “ Circular 36 ”), promulgated by the MOF and the SA T on March 23,
2016 and as amended on July 11, 2017, December 25, 2017 and March 20, 2019 respectively,
the entities and individuals that sell services, intangible assets or real estates within the
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-4 –


--- page 555 ---
territory of the PRC are value-added taxpayers, and shall pay value-added tax instead of
business tax. Circular 36 also provides that transfer of financial products, including transfer of
the ownership of marketable securities, shall be subject to value-added tax at a rate of 6% on
the taxable income.
Meanwhile, the taxpayers of value-added tax are also subject to urban maintenance and
construction tax, education surcharge and local education surcharge.
Income tax
Individual investors
According to the Individual Income Tax Law and its implementation regulations,
individuals shall pay the individual income tax at the rate of 20% on their income from the sale
of equity in PRC resident enterprises. Pursuant to the Circular of the Declaring that Individual
Income Tax Continues to Be Exempted over Income of Individuals from Transfer of Shares
()
(hereinafter referred to as “Circular 61”) that was promulgated by the MOF and the SA T on
March 30, 1998, from January 1, 1997, income of individuals from the transfer of shares of
listed companies remain exempt from individual income tax. According to the Announcement
about the Catalogue of Preferential Individual Income Tax Policies with Continued Effect
(ʮѓ) promulgated
by the MOF and the SA T on December 29, 2018, the Circular 61 will remain effective.
According to the Circular on Relevant Issues Concerning the Collection of Individual
Income Tax over the Income Received by Individuals from Transfer of Listed Shares Subject
to Sales Limitation ()
promulgated by the MOF, the SA T and the CSRC on December 31, 2009, individuals’ income
from transferring at Shanghai Stock Exchange or Shenzhen Stock Exchange the shares of a
listed company acquired from the public offerings of the company or from the transfer market
shall continuously be exempt from the individual income tax, except for the relevant shares
which are subject to sales restriction as defined in the Supplementary Circular on Relevant
Issues Concerning the Collection of Individual Income Tax over the Income Received by
Individuals from Transfer of Listed Shares Subject to Sales Limitation (ɛᔷᜫɪ̹
) jointly issued by the three
aforementioned authorities on November 10, 2010.
As at the Latest Practicable Date, the aforesaid provision has not expressly provided that
individual income tax shall be collected from non-resident individuals on the sale of shares of
PRC-resident enterprises listed on overseas stock exchanges (for example, the Stock
Exchange).
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 556 ---
Corporate investors
According to the EIT Law and its implementation regulations, where a non-PRC resident
enterprise has not set up any institutions or establishments in China, or it has done so but its
income generated in China is irrelevant to the said institutions or establishments, it shall pay
tax on the portion of its income generated in China (including gains from the disposal of shares
of PRC resident enterprises) and the enterprise income tax rate is generally 10%. Such income
tax may be reduced or eliminated under applicable tax treaties or arrangements.
Stamp duty
In accordance with the Stamp Tax Law of the PRC () that
was promulgated on June 10, 2021 and came into effect on July 1, 2022, the entities and
individuals that conclude taxable certificates, or conduct securities transactions within the
territory of the PRC shall be taxpayers of stamp tax, and shall pay stamp tax in accordance with
the provisions of this law. Where entities or individuals, outside the territory of the PRC,
conclude taxable certificates that are used within the territory of the PRC, they shall pay stamp
tax in accordance with the provisions of this law.
Estate duty
As at the date of this prospectus, China currently has not imposed any estate tax.
Hong Kong Taxation
Tax on dividends
Under the current practice of the Inland Revenue Department of Hong Kong, no tax is
payable in Hong Kong in respect of dividends paid by the Company.
Capital gains and profit tax
No tax is imposed in Hong Kong in respect of capital gains from the sale of H Shares.
However, trading gains from the sale of the H Shares by persons carrying on a trade, profession
or business in Hong Kong, where such gains are derived from or arise in Hong Kong from such
trade, profession or business will be subject to Hong Kong profits tax, which is currently
imposed at the maximum rate of 16.5% on corporations and at the maximum rate of 15% on
unincorporated businesses. Certain categories of taxpayers (for example, financial institutions,
insurance companies and securities dealers) are likely to be regarded as deriving trading gains
rather than capital gains unless these taxpayers can prove that the investment securities are held
for long-term investment purposes.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 557 ---
Trading gains from sales of the H Shares effected on the Hong Kong Stock Exchange will
be considered to be derived from or arise in Hong Kong. Liability for Hong Kong profits tax
would thus arise in respect of trading gains from sales of H Shares effected on the Hong Kong
Stock Exchange realized by persons carrying on a business of trading or dealing in securities
in Hong Kong.
Stamp duty
Hong Kong stamp duty, currently charged at the ad valorem rate of 0.1% on the higher
of the consideration for or the market value of the H Shares, will be payable by the purchaser
on every purchase and by the seller on every sale of any Hong Kong securities, including H
Shares (in other words, a total of 0.2% is currently payable on a typical sale and purchase
transaction involving H Shares). In addition, a fixed stamp duty of HK$5.00 is currently
payable on any instrument of transfer of H Shares. Where one of the parties is a resident
outside Hong Kong and does not pay the ad valorem duty due by it, the duty not paid will be
assessed on the instrument of transfer (if any) and will be payable by the transferee. If no stamp
duty is paid on or before the due date, a penalty of up to 10 times the duty payable may be
imposed.
Estate duty
The Revenue (Abolition of Estate Duty) Ordinance 2005 abolished estate duty in respect
of deaths occurring on or after February 11, 2006.
PRINCIPAL TAXATION OF OUR GROUP IN THE PRC
Enterprise income tax
According to the EIT Law, the EIT rate in China is 25% and is in line with the rate
applicable to foreign-invested enterprises and foreign enterprises.
According to the Notice on the Implementation of Inclusive Tax Deduction and
Exemption Policies for Micro and Small Enterprises (ʃฆΆุ
) that was promulgated by the MOF and the SA T on January 17,
2019, for the period from January 1, 2019 to December 31, 2021, the annual taxable income
of a small low-profit enterprise that is not more than RMB1 million shall be included in its
taxable income at the reduced rate of 25%, with the applicable enterprise income tax rate of
20%; and the annual taxable income that is not less than RMB1 million and not more than
RMB3 million shall be included in its taxable income at the reduced rate of 50%, with the
applicable enterprise income tax rate of 20%.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 558 ---
According to the Administrative Measures for Recognition of High and New-Technology
Enterprises () that was promulgated by the Ministry of
Science and Technology of the PRC (ኪҦஔ௅), the MOF and the SA T on
April 14, 2008, amended on January 29, 2016 and came into effect on January 1, 2016, high
and new-tech enterprises can apply for a preferential enterprise income tax rate of 15% in
accordance with the EIT Law.
Value-added tax
Pursuant to the Provisional Regulations on V A T of the PRC (೼ᅲ
БૢԷ) that were amended and came into effect on November 19, 2017, all entities and
individuals engaged in sales of goods, provision of processing, repairs and replacement
services, or import of goods within the territory of China are subject to V A T. For taxpayers
selling or importing goods, except as otherwise provided in the above regulations, the general
tax rate is 17%.
Pursuant to the Circular 36 that promulgated by the MOF and the SA T on March 23, 2016
and came into effect on May 1, 2016, upon approval of the State Council, the pilot programme
of replacing business tax with V A T will be promoted nationwide from May 1, 2016. All
taxpayers of business tax in the construction industry, the real estate industry, the financial
industry, and the living service industry are included in the scope of the pilot programme. The
payment of business tax will be replaced by the payment of V A T. Pursuant to the Measures for
the Implementation of the Pilot Programme of Replacing Business Tax with V A T ( ᐄุ೼ҷ
) that was issued and came into effect at the same time with the
aforementioned notice, the tax rates applied to taxpayers for selling services, intangible assets
or real estates shall be 17%, 11%, 6% and zero, respectively.
Pursuant to the Notice on Adjusting V A T Rates () that
was promulgated by the MOF and the SA T on April 4, 2018 and came into effect on May 1,
2018, for taxpayers engaging in taxable sales or import of goods, the previously applicable
V A T rates of 17% and 11% are adjusted to 16% and 10%, respectively.
Pursuant to the Announcement on Relevant Policies for Deepening the V A T Reform ( ᗫ
ʮѓ) that was promulgated by the MOF, the SA T and General
Administration of Customs of the PRC ( ʕശɛ͏΍ձ਷ऎᗫᐼ໇) on March 20, 2019 and
came into effect on April 1, 2019, for taxpayers engaging in taxable sales or import of goods,
the previously applicable V A T rates of 16% and 10% are adjusted to 13% and 9%, respectively.
In addition, according to the Announcement on Clarifying the V A T Exemption Policy for
Small-scale V A T Taxpayers (ʮѓ)
promulgated by the MOF and the SA T on March 31, 2021, small-scale V A T taxpayers with
monthly sales less than RMB150,000 (inclusive) are exempt from V A T from April 1, 2021 to
December 31, 2022.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-8 –


--- page 559 ---
Foreign Exchange Control in the PRC
The lawful currency of the PRC is Renminbi, which is currently subject to foreign
exchange control and cannot be freely converted into foreign currency. The SAFE, with the
authorization of the PBOC, is empowered with the functions of administering all matters
relating to foreign exchange, including the enforcement of foreign exchange control
regulations.
The principal regulations governing foreign currency exchange in the PRC are the
Foreign Exchange Control Regulations which was promulgated by the State Council on
January 29, 1996, became effective on April 1, 1996 and was subsequently amended on January
14, 1997 and August 5, 2008 and the Regulations on the Administration of Settlement, Sale and
Payment of Foreign Exchange () which was promulgated by
the PBOC on June 20, 1996 and became effective on July 1, 1996. Pursuant to these regulations
and other PRC rules and regulations on currency conversion, Renminbi is generally freely
convertible for payments of current account items, such as trade and service-related foreign
exchange transactions and dividend payments, but not freely convertible for capital account
items, such as direct investment, loan or investment in securities outside China unless prior
approval of the SAFE or its local counterparts is obtained.
According to the relevant laws and regulations in the PRC, PRC enterprises (including
foreign investment enterprises) which need foreign exchange for current item transactions may,
without the approval of the foreign exchange administrative authorities, effect payment
through foreign exchange accounts opened at financial institutions that carries business of
foreign exchange settlement and sale by presenting valid documentation. Foreign investment
enterprises which need foreign exchange for the distribution of profits to their shareholders and
PRC enterprises which, in accordance with regulations, are required to pay dividends to their
shareholders in foreign exchange may, on the strength of resolutions of the Board of Directors
or the shareholders’ general meetings on the distribution of profits, effect payment from foreign
exchange accounts or with the purchased foreign exchange at designated foreign exchange
banks.
On December 26, 2014, the SAFE issued the Notice of the State Administration of
Foreign Exchange on Issues Concerning the Foreign Exchange Administration of Overseas
Listing (), pursuant to which a
domestic company shall, within 15 working days upon the end of its overseas public offering,
handle registration formalities for overseas listing with the foreign exchange authority at its
place of registration with the required materials. Funds raised by a domestic company through
overseas listing may be transferred back or deposited overseas, and the use of such funds shall
be consistent with those contents mentioned in publicly disclosed documents such as the
prospectus.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-9 –


--- page 560 ---
On February 13, 2015, the SAFE issued the Notice of on Further Simplifying and
Improving Policies for the Foreign Exchange Administration of Direct Investment (̮
), which came into effect on
June 1, 2015. The notice has cancelled the approval of foreign exchange registration under
domestic direct investment and the approval of foreign exchange registration under overseas
direct investment. Instead, banks shall directly examine and handle foreign exchange
registration under domestic direct investment and foreign exchange registration under overseas
direct investment, and the SAFE and its local offices shall indirectly regulate the foreign
exchange registration of direct investment through banks.
According to the Circular of the SAFE on the Policies for Reforming and Standardizing
Management of Foreign Exchange Settlement under the Capital Account (̮ි၍ଣ҅ᗫ
) issued by the SAFE on June 9, 2016, the
foreign exchange receipts under capital accounts of domestic institutions are subject to
discretionary settlement policies. The foreign exchange receipts under capital accounts
(including foreign exchange capital, foreign debts, and repatriated funds raised through
overseas listing) subject to discretionary settlement as expressly prescribed in the relevant
policies may be settled with banks according to the actual need of the domestic institutions for
business operation. Domestic institutions may, at their discretion, settle up to 100% of foreign
exchange receipts under capital accounts for the time being. The SAFE may adjust the above
proportion in due time according to international balance of payments.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-10 –


--- page 561 ---
THE PRC LEGAL SYSTEM
The PRC legal system is composed of the constitution, laws, administrative regulations,
local regulations, separate rules, rules and regulations of departments of the State Council,
rules and regulations of local governments, autonomy regulations, separate rules of
autonomous regions and international treaties of which the PRC government is a signatory.
Court judgements do not constitute binding precedents, although they may be used for the
purpose of judicial reference and guidance.
Pursuant to the Constitution of the PRC () (hereinafter referred
to as the “Constitution”, which was promulgated on December 4, 1982 and last amended and
came into effect on March 11, 2018) and the Legislation Law of the PRC ( ʕശɛ͏΍ձ਷
), which was adopted on July 1, 2000 and last amended on March 13, 2023 and came
into effect on March 15, 2023 (hereinafter referred to as the “Legislation Law”), the NPC and
the Standing Committee of the NPC (the “SCNPC”) are empowered to exercise the legislative
power of the State. The NPC has the power to formulate and amend the basic laws of criminal
and civil matters, State institutions and others. The SCNPC is empowered to formulate and
amend laws other than those required to be enacted by the NPC and to supplement and amend
any parts of laws enacted by the NPC during its adjournment, provided that such supplements
and amendments shall not be in conflict with the principles of such laws.
The State Council is the highest administrative organ of the State, and enacts
administrative regulations under the Constitution and laws.
People’s congresses of provinces, autonomous regions and municipalities directly under
the central government and their respective standing committees may formulate local
regulations based on the specific circumstances and requirements of the local administrations,
provided that such local regulations shall not be in conflict with the constitution, laws, and
administrative regulations.
The ministries, commissions, the PBOC, National Audit Office of the PRC ( ʕശɛ͏΍
໇) and the State Committee of Supervisory of the PRC (္࿀։
ึ) with administrative functions may formulate rules and regulations within the scope of
their authority based on the laws and the administrative regulations, decisions and rulings of
the State Council. In order to implement the laws, administrative regulations and decisions and
rulings of the State Council, provisions of rules and regulations within the jurisdiction are
formulated.
People’s congresses of cities with districts and their standing committees may enact local
regulations based on the specific circumstances and actual needs which shall come into effect
upon approval from the respective standing committees of the people’s congresses of the
provinces and autonomous regions, provided that such local regulations shall not be in conflict
with the constitution, laws, and administrative regulations.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-1 –


--- page 562 ---
People’s congresses of autonomous regions may enact autonomy regulations and separate
rules in the light of the political, economic and cultural characteristics of the local nationalities,
which shall come into effect upon approval by the SCNPC. Adaptations of provisions of laws
and administrative regulations may be introduced to the autonomy regulations and separate
rules so long as they do not contravene the basic principles of the laws or administrative
regulations, and no adaptations shall be made to the specific provisions on national
autonomous areas in the constitutions, national region autonomy law and other relevant laws
and administrative regulations.
People’s governments of provinces, autonomous regions and municipalities directly under
the central government may formulate rules according to laws, administrative regulations and
relevant local regulations.
The Constitution, enacted by the NPC, is basis of the PRC legal system and has supreme
legal authority, and no laws, administrative regulations, local regulations, autonomous
regulations or separate regulations may contravene the Constitution. The hierarchy of laws is
higher than that of administrative regulations, local regulations, and rules. The hierarchy of
administrative regulations is higher than that of local regulations and rules. The hierarchy of
local regulations is higher than that of the rules of the local governments at or below the
corresponding level. The hierarchy of the rules enacted by the people’s governments of the
provinces or autonomous regions is higher than that of the rules enacted by the people’s
governments of cities and autonomous prefectures with districts within the administrative areas
of the provinces and the autonomous regions.
The NPC has the power to alter or annul any inappropriate laws enacted by its Standing
Committee, and to annul any autonomous regulations or separate regulations which have been
approved by its Standing Committee but which contravene the Constitution or the Legislation
Law. The SCNPC has the power to annul any local regulation that contravenes the Constitution,
laws or administrative regulations, and to annul any autonomous regulation or separate
regulation which has been approved by the standing committees of the NPC of the relevant
provinces, autonomous regions or municipalities directly under the central government but
contravene the Constitution and the Legislation Law. The State Council has the power to alter
or annul any inappropriate ministerial rules and rules of local governments. The people’s
congress of provinces, autonomous regions or municipalities directly under the central
government have the power to alter or annul any inappropriate local regulations enacted or
approved by their respective standing committees. The people’s governments of provinces and
autonomous regions have the power to alter or annul any inappropriate rules enacted by the
people’s governments at the lower level.
According to the Constitution, the authority of the interpretation of laws shall be vested
to the SCNPC. According to the Decision of the SCNPC Regarding the Strengthening of
Interpretation of Laws (Ӕᙄ)
passed on June 10, 1981, interpretation on the application of laws and decrees in court trails
and the procuratorial work of the procuratorates shall be given by the Supreme People’s Court
and the Supreme People’s Procuratorate of the PRC ( ʕശɛ͏΍ձ਷௰৷ɛ͏Ꮸ࿀৫),
respectively. Interpretation of the laws and decrees unrelated to trials and procuratorial work
shall be given by the State Council and the competent ministries and commissions.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-2 –


--- page 563 ---
In the case that clarification or additional provisions shall be made for the local
regulations, the standing committees of the people’s congresses of provinces, autonomous
regions and municipalities directly under the central government which enacted such
regulations shall give the interpretation or formulate the additional provisions. Interpretation
on the application of local regulations shall be given by the competent departments under the
people’s government of the respective provinces, autonomous regions and municipalities
directly under the central government.
THE PRC JUDICIAL SYSTEM
Under the Constitution and the Law of the PRC of Organisation of the People’s Courts
() which was enacted on July 5, 1979, implemented on
January 1, 1980 and last amended on October 26, 2018 and took effect on January 1, 2019, the
judicial system in PRC is made up of the Supreme People’s Court, the local people’s courts,
military courts and other special people’s courts.
The local people’s courts are comprised of the basic people’s courts, the intermediate
people’s courts and the higher people’s courts. The basic people’s courts may be organised into
civil, criminal, and economic tribunals. The intermediate people’s courts may be organised into
divisions similar to those of the basic people’s courts, and may be further organised into other
special divisions. The people’s courts at lower levels are subject to the supervision of the
people’s courts at higher levels. The Supreme People’s Court is the highest judicial organ of
the PRC and it has the power to supervise the administration of justice by the local people’s
courts at all levels and all special people’s courts. The people’s procuratorates also have the
right to exercise legal supervision over the trial activities of people’s courts at same or lower
levels.
The people’s courts adopt a “second instance as final” appellate system in the trail of the
cases. A party to the case concerned may appeal against the judgement and ruling of the first
instance by the local people’s courts to the people’s courts at the next higher level in
accordance with the legal procedures. The people’s procuratorates may appeal to the people’s
court at the next higher level in accordance with the legal procedures. In the absence of any
appeal by any parties to the case concerned or any appeal by the people’s procuratorates within
the stipulated period, the judgement and ruling of the first instance by the local people’s courts
shall be final and legally binding. Judgements and rulings of the second instance of the
intermediate people’s courts, the higher people’s courts and Supreme People’s Court and the
judgements and rulings of the first instance of the Supreme People’s Court shall be the final
judgements and rulings. If, however, the Supreme People’s Court finds some definite errors in
a legally effective judgement, 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 judgement,
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 judgement,
ruling or conciliation statement, and considers that 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. For death penalties, except those judged by the Supreme People’s Court in
accordance with the law, requests shall be submitted to the Supreme People’s Court for
approval.
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The Civil Procedure Law of the PRC () (hereinafter
referred to as the “PRC Civil Procedure Law”), which was enacted on April 9, 1991 and last
amended on September 1, 2023 and became effective on January 1, 2024, sets forth the criteria
for instituting a civil case, the jurisdiction of the people’s courts, the procedures to be followed
for conducting a civil action and the procedures for enforcement of a civil judgement or order.
All parties to a civil action conducted within the PRC must comply with the PRC Civil
Procedure Law. Generally, a civil case is initially heard by the people’s court located in the
defendant’s place of domicile. The parties to a contract may, by an express agreement, select
a competent court where civil actions may be brought, provided that the competent court has
jurisdiction over the plaintiff’s or the defendant’s place of residence, the place of execution of
the contract or the place of performance of the contract, or the object of the action or locations
which have substantial connections with the dispute. However, such selection cannot violate
the stipulations of hierarchical jurisdiction and exclusive jurisdiction in any case.
A foreign individual, a stateless person, a foreign enterprise or a foreign organisation is
given the equal litigation rights and obligations as a citizen, a legal person or other
organisations in the PRC when initiating actions or defending against litigations at a PRC
court. Should foreign courts impose restrictions on the litigation rights of the citizens, legal
persons or other organisations in the PRC, the PRC courts shall impose reciprocal restrictions
on the litigation rights of citizens, enterprises and organisations in that country. A foreign
individual, a stateless person, a foreign enterprise or a foreign organisation must engage a PRC
lawyer in case he or it needs to engage a lawyer for the purpose of initiating actions or
defending against litigations at a PRC court. 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. All parties to a civil
action shall perform the legally effective judgements and rulings. If any party to a civil action
refuses to abide by a judgement or ruling made by a people’s court or an award made by an
arbitration tribunal in the PRC, the other party may apply to the people’s court for the
enforcement of the same within two years subject to application for postponed enforcement or
revocation. If a party fails to satisfy within the stipulated period a judgement which the court
has granted an enforcement approval, the court may, upon the application of the other party,
mandatorily enforce the judgement on the party.
A party seeking to enforce a judgement or order of a people’s court against a party who
is not located within the PRC and does not own any property in the PRC, may apply to a foreign
court with proper jurisdiction for recognition and enforcement of the judgement or order. In the
case of an application or request for recognition and enforcement of a legally effective
judgement or order of a foreign court, the people’s court shall, after having examined it in
accordance with the international treaties entered into or acceded to by the PRC or with the
principle of reciprocity and having arrived at the conclusion that it does not contravene the
primary principles of the laws of the PRC nor violates its sovereignty, security or social and
public interests, recognise the validity of the judgement or order, and, if required, issue a writ
of enforcement and enforce it in accordance with the relevant regulations. If the application or
request contravenes the primary principles of the laws of the PRC or violates its sovereignty,
security or social and public interests, the people’s court shall not recognise and enforce it.
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THE PRC COMPANY LA W, TRIAL MEASURES FOR ADMINISTRATION AND
GUIDELINES FOR THE ARTICLES OF ASSOCIATION
A joint stock limited company incorporated in the PRC seeking a listing on The Stock
Exchange of Hong Kong Limited (the “Stock Exchange”) is mainly subject to the following
laws and regulations of the PRC:
The PRC Company Law () (hereinafter referred to as the
“Company Law ()”) was adopted by the Fifth Standing Committee Meeting of the
Eighth NPC on December 29, 1993 and came into effect on July 1, 1994, and was amended on
December 25, 1999, August 28, 2004, October 27, 2005, December 28, 2013 and October 26,
2018 with last amendment made on December 29, 2023, and came into effect on July 1, 2024.
The Trial Measures for Administration promulgated by the CSRC on February 17, 2023
and effective on March 31, 2023, are applicable to the overseas securities offering and listing
by domestic enterprises.
The Guidelines for the Articles of Association of Listed Companies (“Guidelines for the
Articles of Association”) issued by the CSRC on December 16, 1997, which was last amended
on March 28, 2025 and became effective on the same date, provides guidance on the articles
of association. Accordingly, the contents of the Guidelines are set out in the Company’s
Articles of Association, and the summary of which is set out in the section headed “Appendix
V — Summary of the Articles of Association” of this prospectus.
Set out below is a summary of the major provisions of the Company Law, Trial Measures
for Administration and Guidelines for the Articles of Association which are applicable to the
Company.
General Provisions
“A joint stock limited company” means is a corporate legal person incorporated under the
Company Law. The liability of its shareholders is limited to the extent of the shares held by
them and the liability of a company is limited to the full value of all the property owned by
it.
A company must conduct its business in accordance with laws as well as public and
commercial ethics. A company may invest in other limited liability companies. The liabilities
of the company to such invested companies are limited to the amount invested. Unless
otherwise provided by laws, a company cannot be the capital contributor who has the joint
liabilities associated with the debts of the invested enterprises.
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Incorporation
A joint stock limited company may be incorporated by promotion or subscription. A joint
stock limited company may be incorporated by a minimum of one but not more than 200
promoters, and at least half of the promoters must have residence within the PRC.
The promoters shall convene an inaugural meeting of the company established by means
of stock floatation within 30 days after the share capital has been paid-up, and shall notified
all subscribers the date of the meeting or make an announcement in this regard 15 days before
the meeting. The inaugural meeting may be held only the presence of promoters and
subscribers holding more than 50% of the total number of shares. Powers to be exercised at the
inaugural meeting include but not limited to the adoption of articles of association and the
election of members of the Board of Directors and the Supervisory Committee of a company.
The aforesaid matters shall be resolved by more than 50% of the votes to be casted by
subscribers presented 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 joint stock limited
company. A company is formally established and has the status of a legal person after the
business license has been issued by the relevant registration authority.
Registered Capital
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 for Administration stipulates that fund raising and dividend
distributions of a domestic enterprise may be made in foreign currencies or RMB. According
to the Trial Measures for Administration, shareholders holding domestic unlisted shares of a
domestic enterprise directly listed overseas and are applying for the conversion of the domestic
unlisted shares held by them into overseas listed shares and to be listed for trading at overseas
stock exchanges, shall comply with the relevant requirements of the CSRC, and file with the
CSRC through a domestic enterprise. The term “domestic unlisted shares” mentioned in the
previous paragraph refers to shares that have been issued by domestic enterprises but are not
listed or traded on any domestic stock exchange. Domestic unlisted shares should be registered
and held centrally at domestic securities registration and clearing institutions. The registration
and settlement arrangements for overseas listed shares shall be subject to the regulations of the
overseas listing jurisdiction.
Under the Company Law, a joint stock limited company shall maintain a register of
shareholders, stating the following matters: (1) the name and domicile of a shareholder; (2)
class and number of shares subscribed for by each shareholder; (3) the serial number of the
shares if the shares are issued in paper form; and (4) the date on which each shareholder
acquired the shares.
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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. If no par value stock is issued, the proceeds from the issuance of the
new stocks shall be included into the registered capital. Additionally, if a company intends to
make public offering of shares, it is required to complete the registration with the securities
regulatory authority of the State Council and announce its prospectus.
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 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; and
(v) When a company reduces its registered capital, it shall register the change with a
company registration authority in accordance with the law.
When a company reduces its registered capital, it must reduce the amount of capital
contribution or shares in proportion to the capital contribution or shares held by the
shareholders, unless otherwise prescribed by any law, or agreed upon by all the shareholders
of a limited liability company, or as specified in the articles of association of a joint stock
limited company.
Repurchase of shares
Under the Company Law, a company shall not acquire its own shares. Except for any
following circumstances:
(i) reducing the registered capital;
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(ii) merging with other company that holds the shares of the company;
(iii) using the shares for employee stocks plan or equity incentives;
(iv) with respect to shareholders voting against any resolution adopted at the
shareholders’ general meeting on the merger or division of the company, the right to
demand the company to acquire the shares held by them;
(v) using the shares for the conversion of convertible corporate bonds issued by the
listed company; and
(vi) as required for maintenance of the corporate value and shareholders’ rights and
interests of a listed company.
The purchase of shares of a company for reasons specified in the case of (i) to (ii) above
shall be subject to the resolution of the shareholders’ general meeting; the purchase of shares
of a company for reasons specified in the case of (iii), (v) and (vi) above shall be subject to
the resolution of the Board meeting attended by more than two-thirds of the directors in
accordance with the provisions of the Articles of Association or the authorization from the
shareholders’ general meeting.
Following the purchase of a company’s shares by a company in accordance with the above
provisions, such shares shall be canceled within 10 days from the date of buy-back in the case
of item (i) above; such shares shall be transferred or canceled within six months in the case of
items (ii) and (iv) above; the total numbers of share of the company held by a company shall
not exceed 10% of the total issued shares of a company, and shall be transferred or canceled
within three years in the case of items (iii), (v) and (vi) above.
Transfer of Shares
Shares held by a shareholder may be transferred according to the law. Under the Company
Law, a shareholder should effect a transfer of his shares on lawfully established securities
exchange or by any other means as required by the State Council. The stocks shall be
transferred by endorsement of shareholders or by other means stipulated by laws or
administrative regulations. After the transfer, a company shall record the name and address of
the transferee in the register of shareholders. No changes of registration in the share register
provided in the foregoing requirement shall be effected during a period of 20 days prior to the
convening of shareholder’s general meeting or 5 days prior to the record date for a company’s
distribution of dividends. However, if any law provides otherwise for the registration of
changes in the register of members of a listed company, such provisions shall prevail.
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Under the Company Law, shares issued by a company prior to the listed shares shall not
be transferred within one year from the date on which the shares of a company are listed on
a securities exchange. Directors, supervisors and senior management of a company shall
declare to a company their shareholdings in a company and any changes of such shareholdings,
and the shares transferred each year during their term of office as determined when they
assume the posts shall not exceed 25% of the total shares they hold in a company. Shares of
a company held by its directors, supervisors and senior management shall not be transferred
within one year from the date of a company’s listing on a securities exchange, nor within six
months after their resignation from their positions with a company.
Shareholders
Under the Company Law and the Guidelines for the Articles of Association, the rights of
a shareholder of ordinary shares of a company include:
(i) to receive dividends and other forms of distributions in proportion to their
shareholdings;
(ii) to request, convene, preside over, attend or appoint a proxy to participate in the
shareholders’ general meeting in accordance with the law, and exercise the
corresponding voting rights;
(iii) to supervise and manage a company’s business, and to present proposals or to raise
inquiries;
(iv) to transfer, grant or pledge shares held by them in accordance with laws,
administrative regulations and the provisions of the Articles of Association;
(v) to inspect the Articles of Association, register of members, stubs of corporate bonds,
minutes of general meetings, resolutions of the Board, resolutions of the
Supervisory Committee, financial and accounting reports;
(vi) in the event of the winding-up or liquidation of a company, to participate in the
distribution of remaining property of a company in proportion to the number of
shares held;
(vii) to require the company to purchase its shares in the event that a shareholder
disagrees with the resolution on merger or division of the company approved at a
shareholders’ general meeting; and
(viii) other rights as stipulated by laws, administrative regulations, departmental rules and
the Articles of Association.
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The obligations of a shareholder of ordinary shares of a company include:
(i) to comply with the Articles of Association;
(ii) to pay subscription money according to the number of shares subscribed and the
method of subscription;
(iii) not to abuse their shareholders’ rights to damage the interests of a company or other
shareholders; not to abuse the independent legal person status of a company and the
limited liability of shareholders to damage the interests of the creditors of a
company; and
(iv) other obligations conferred by laws, administrative regulations and the Articles of
Association.
Shareholder’s General Meetings
Under the Company Law, the shareholders’ general meeting of a joint stock limited
company is made up of all shareholders. The shareholders’ general meeting is the organ of
authority of a company, which exercises the following functions and powers:
(i) to elect and replace directors and supervisors and to decide on matters relating to the
remuneration of directors and supervisors;
(ii) to examine and approve reports of the Board of Directors;
(iii) to examine and approve reports of the Supervisory Committee;
(iv) to examine and approve a company’s profit distribution plans and loss recovery
plans;
(v) to resolve on the increase or reduction of a company’s registered capital;
(vi) to resolve on the issuance of corporate bonds;
(vii) to resolve on the merger, division, dissolution, liquidation or change of corporate
form of a company;
(viii) to amend the a company’s Articles of Association; and
(ix) other functions and powers specified in provision of the Articles of Association.
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Under the Company Law, annual shareholders’ general meetings are required to be held
once every year. An extraordinary shareholders’ general meeting is required to be held within
two months after the occurrence of any of the following circumstances:
(i) the number of directors is less than the number stipulated in the company Law or
less than two-thirds of the number specified in the Articles of Association;
(ii) when the unrecovered losses of a company amount to one-third of the total paid-up
share capital;
(iii) shareholders individually or jointly holding 10% or more of the company’s shares
request;
(iv) when deemed necessary by the Board of Directors;
(v) the Supervisory Committee proposes to convene the meeting; and
(vi) other circumstances as stipulated in the Articles of Association.
Shareholders’ general meetings 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 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 not performing his
duties, a director nominated by more than half of directors shall preside over the meeting.
Where the Board of Directors is incapable of performing or is not performing its duties
to convene the shareholders’ general meeting, the Supervisory Committee shall convene and
preside over shareholders’ general meeting in a timely manner. If the Supervisory Committee
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.
Notice of shareholders’ general meeting shall state the time and venue of and matters to
be considered at the meeting and shall be given to all shareholders 20 days before the meeting.
A notice of extraordinary general meeting shall be given to all shareholders 15 days prior to
the meeting.
Under the Company Law, a shareholder may entrust a proxy to attend a shareholders’
general meeting. The proxy shall present a written power of attorney issued by the shareholder
to a company and shall exercise his voting rights within the scope of authorization. There is
no specific provision in the Company Law regarding the number of shareholders constituting
a quorum in a shareholders’ general meeting.
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Under the Company Law, shareholders present at a shareholders’ general meeting have
one vote for each share they hold, while shares held by a company are not entitled to any voting
rights.
The cumulative voting system may be adopted for the election of directors and
supervisors at the shareholders’ general meeting in accordance with the provisions of the
Articles of Association or the resolutions of the shareholders’ general meeting. Under the
accumulative voting system, each share shall have the same number of voting rights as the
number of directors or supervisors to be elected at the shareholders’ general meeting, and
shareholders may consolidate their voting rights when casting a vote.
Under the Company Law, 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.
Directors
Under the Company Law, a joint stock limited company shall have a Board of Directors,
which shall consist of more than three members. The term of office of a director shall be
stipulated in the Articles of Association, but each term of office shall not exceed three years.
Directors may serve consecutive terms if re-elected.
Meetings of the Board of Directors shall be convened at least twice a year. All directors
and supervisors shall be noticed 10 days before the meeting for every meeting. The Board
exercises the following functions and powers:
(i) to convene shareholder’s general meetings and report its work to the shareholder’s
general meetings;
(ii) to implement the resolutions of the shareholder’s general meeting;
(iii) to decide on a company’s business plans and investment plans;
(iv) to formulate a company’s annual financial budget and final accounts;
(v) to formulate a company’s profit distribution plan and loss recovery plan;
(vi) to formulate proposals for the increase or reduction of a company’s registered
capital and the issue of corporate bonds;
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(vii) to formulate plans for merger, division, dissolution or change of corporate form of
a company;
(viii) to decide on the internal management structure of a company;
(ix) to decide on the appointment or dismissal of the manager of a company and their
remuneration;
(x) to decide on the appointment or dismissal of the deputy manager and financial
officer of a company based on the nomination of the manager and as well as their
remuneration;
(xi) to formulate a company’s basic management system;
(xii) other functions and powers specified in the Articles of Association or granted by the
shareholders’ general meeting.
Under the Company Law, a person may not serve as a director of a company if he is:
(i) a person without capacity or with restricted capacity;
(ii) a person who has been sentenced to criminal punishment due to corruption, bribery,
infringement of property, misappropriation of property or destruction of the socialist
market economic order; or a person who has been deprived of his political rights due
to a crime, where less than five years have elapsed since the date of completion of
the sentence; if he/she is pronounced for suspension of sentence, a two-year period
has not elapsed since the expiration of the suspension period;
(iii) a person who was a director, factory manager or manager of a company or enterprise
which 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 insolvency and liquidation of such company
or enterprise;
(iv) a person who was a legal representative of a company or an enterprise which had its
business license revoked due to violation of the law and had been closed down by
order, and who was personally liable, where less than three years have elapsed since
the date of the revocation of the business license of the company or enterprise or the
order for closure; and
(v) a person being listed as a dishonest person subject to enforcement by the people’s
court due to his/her failure to pay off a relatively large amount of due debts.
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The Board of Directors shall have one chairman, who shall be elected by more than half
of all the directors. The chairman shall exercise the following functions and powers (including
but not limited to):
(i) to preside over shareholders’ general meetings and convene and preside over board
meetings;
(ii) to cause and check the implementation of the resolutions of the Board of Directors;
and
(iii) to exercise functions and powers conferred by the Board of Directors.
Supervisors
Under the Company Law, a joint stock limited company shall have a supervisory
committee composed of not less than three members. The supervisory committee shall
comprise shareholder representatives and an appropriate proportion of the company’s
employee representatives, of which the proportion of employee representatives shall not be less
than one-third and the specific proportion shall be stipulated in the Articles of Association.
Employee representatives of the Supervisory Committee shall be democratically elected by the
company’s employees at the employee representative assembly, employee general meeting or
otherwise. Directors or senior management of the company may not act concurrently as
supervisors.
The Supervisory Committee exercises the following functions and powers:
(i) to examine the company’s financial affairs;
(ii) to supervise the directors and senior management in their performance of their
duties and to propose the removal of directors and senior management who have
violated laws, administrative regulations, the Articles of Association or resolutions
of shareholders’ general meetings;
(iii) to demand rectification by a director or senior management when the acts of such
persons are harmful to the company’s interest;
(iv) to propose the convening of extraordinary general meetings, and to convene and
preside over shareholders’ general meetings when the Board of Directors fails to
perform the duty of convening and presiding over shareholders’ general meetings
under the Company Law;
(v) to submit proposals to the shareholders’ general meeting;
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(vi) to initiate legal proceedings against directors and senior management in accordance
with the Company Law; and
(vii) other functions and powers specified in the Articles of Association.
Managers 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 accountable to the Board of Directors and
may exercise the following functions and powers:
(i) to be in charge of the production, operation and management of the company and to
organize the implementation of the resolutions of the Board of Directors;
(ii) to organize the implementation of the company’s annual business plans and
investment plans;
(iii) to formulate plans for the establishment of the company’s internal management
structure;
(iv) to draft the company’s basic management system;
(v) to formulate the basic rules and regulations of the company;
(vi) to propose the appointment or dismissal of the company’s deputy manager and
financial controller;
(vii) to appoint or dismiss management personnel other than those required to be
appointed or dismissed by the Board of Directors; and
(viii) to exercise other functions and powers conferred by the Articles of Association and
the Board of Directors.
According to the Company Law, senior management shall refer to the manager, deputy
manager, financial controller, secretary of the Board of Directors and other personnel as
stipulated in the Articles of Association of the company.
Finance and Accounting
Under the Company Law, a company shall establish its financial and accounting systems
according to laws, administrative regulations and the regulations of the financial department of
the State Council. At the end of each fiscal year, the company shall prepare a financial and
accounting reports which shall be audited by an accounting firm in accordance with the law.
The financial and accounting reports shall be prepared in accordance with the laws,
administrative regulations and the regulations of the financial department of the State Council.
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A joint stock limited company shall make its financial and accounting reports available
at the company for inspection by the shareholders 20 days before the convening of an annual
general meeting of shareholders. A joint stock limited company issuing its shares in public
must publish its financial and accounting reports.
When distributing each year’s after-tax profits, the company shall set aside 10% of its
profits into its statutory reserve fund. The Company can no longer withdraw statutory reserve
fund if it has accumulated to more than 50% of the registered capital. If the statutory reserve
fund of the company is insufficient to make up for the losses of the previous years, the current
year profits shall be used to make up for the losses before making allocations to the statutory
reserve in accordance with the preceding paragraph. After the company has made an allocation
to the statutory reserve fund from its after-tax profit, it may also make an allocation to the
discretionary reserve fund from its after-tax profit upon a resolution of the general meeting or
the shareholders’ general meeting.
A joint stock limited company may distribute profits in proportion to the number of shares
held by its shareholders, except for profit distributions that are not in proportion to the number
of shares held in accordance with the provisions of the Articles of Association of the joint stock
limited company.
The premium over the nominal value of the shares of a joint stock limited company from
the issue of shares and other incomes required by the financial department of the State Council
to be treated as the capital reserve fund shall be accounted for as the capital reserve fund of
the company.
The reserve fund of the company shall be used to make up losses of the company, expand
the production and operation of the company or increase the capital of the company. Where the
reserve fund of a company is used for making up losses, the discretionary reserve and statutory
reserve shall be firstly used. If losses still cannot be made up, the capital reserve can be used
according to the relevant provisions. When the statutory reserve fund is converted to increase
registered capital, the balance of the statutory reserve shall not be less than 25% of the
registered capital before such conversion.
The company shall not keep accounts other than those provided by law.
Appointment and Dismissal of Accounting Firms
Pursuant to the Company Law, the appointment 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 shareholders’ 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.
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Profit Distribution
Where a company distributes profits to shareholders in violation of the provisions of the
Company Law, the shareholders shall refund the profits distributed to the company, and the
shareholders, directors, supervisors, and senior management personnel who are responsible for
causing losses to the company shall bear compensation liability.
Dissolution and Liquidation
According to the Company Law, a company shall be dissolved for the following reasons:
(i) the term of business stipulated in the Articles of Association has expired or other
events of dissolution specified in the Articles of Association have occurred;
(ii) the shareholders’ general meeting or the shareholders’ general meeting resolves to
dissolve the company;
(iii) dissolution is necessary due to a merger or division of the company;
(iv) the business license is revoked, or the business license is ordered to be closed or
revoked in accordance with laws; and
(v) where the company encounters serious difficulties in its operation and management
and its continuance shall cause a significant loss in the interest of shareholders, and
where this cannot be resolved through other means, shareholders who hold more
than 10% of the total shareholders’ voting rights of the company may present a
petition to a people’s court for the dissolution of the company with the support of
the judgment.
If any of the situations as mentioned in the preceding paragraph arises, the company shall
publicize the situations through the National Enterprise Credit Information Publicity System
within ten days.
Where the company is dissolved in accordance with sub-paragraph (i), (ii) above, it may
carry on its existence by amending its Articles of Association or upon a resolution of the
shareholders’ general meeting, which must be approved by more than two-thirds of the voting
rights held by the shareholders present at the shareholders’ general meeting. Where the
company is dissolved pursuant to sub-paragraphs (i), (ii), (iv) or (v) above, a liquidation
committee shall be established and the liquidation shall commence within 15 days after the
occurrence of an event of dissolution. The liquidation committee shall be composed of
directors, unless it is otherwise provided for in the Company’s Articles of Association or it is
otherwise elected by the shareholders’ general meeting. If a liquidation committee is not
established or fails to carry out the liquidation after its formation within the stipulated period
to conduct liquidation, any interested party may apply to the people’s court to appoint relevant
personnel to form a liquidation committee to conduct liquidation. The people’s court should
accept such application and form a liquidation committee to conduct liquidation in a timely
manner.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-17 –


--- page 578 ---
The liquidation committee shall exercise the following functions and powers during the
liquidation period:
(i) to liquidate the company’s property and respectively prepare balance sheet and list
of property;
(ii) to notify creditors by notice or public announcement;
(iii) to deal with the outstanding business of the company involved in the liquidation;
(iv) to pay all outstanding taxes and taxes arising in the course of liquidation;
(v) to liquidate claims and debts;
(vi) to deal with the remaining property of the company after paying off debts; and
(vii) to participate in civil litigations on behalf of the company.
The remaining property of the company after payment of liquidation expenses,
employees’ wages, social insurance premiums and statutory compensation, payment of
outstanding taxes, and settlement of the company’s debts shall be distributed to the joint stock
companies in proportion to the shares held by the shareholders.
During the liquidation period, the company shall continue to exist but shall not carry out
any business activities unrelated to the liquidation. The company’s assets shall not be
distributed to the shareholders before the liquidation in accordance with the preceding
paragraph.
Liquidation Committee
If the liquidation committee, having thoroughly examined the company’s property and
having prepared a balance sheet and an inventory of assets, discovers that the company’s assets
are insufficient to pay its debts in full, it shall file an application to a people’s court for
bankruptcy liquidation. After the people’s court accepts the application for bankruptcy, the
liquidation committee shall hand over the affairs of the liquidation to the bankruptcy
administrator designated by the people’s court.
Upon completion of the liquidation, the liquidation committee shall prepare a liquidation
report to be submitted to the shareholders’ general meeting or the people’s court for
confirmation, and submit to the company registration authority to apply for cancelation of the
company’s registration.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-18 –


--- page 579 ---
Members of the liquidation committee performing their duties of liquidation are obliged
to 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.
Overseas Listing
According to the Trial Measures for Administration, a PRC domestic company seeking an
overseas listing shall submit an application to the CSRC in accordance with the administrative
filing procedures as required by the Trial Measures for Administration.
THE PRC SECURITIES LA W AND REGULATIONS
The PRC has promulgated a number of regulations that relate to the issuance and trading
of our shares and disclosure of information. In October 1992, the State Council established the
Securities Committee of the State Council (ึ) and the CSRC. The Securities
Committee of the State Council is responsible for coordinating the drafting of securities
regulations, formulating securities-related policies, planning the development of securities
markets, directing, coordinating and supervising all securities-related institutions in the PRC
and administering the CSRC. The CSRC is the regulatory organ of the Securities Committee
of the State Council and is responsible for the drafting of regulatory provisions governing
securities markets, supervising securities companies, regulating public offerings of securities
by PRC companies in the PRC or overseas, regulating the trading of securities, compiling
securities-related statistics and undertaking relevant research and analysis. On March 29, 1998,
the State Council consolidated the aforementioned two departments and reformed the CSRC.
On April 22, 1993, the Provisional Regulations Concerning the Issuance and Trading of
Shares (၍ଣᅲБૢԷ) were promulgated by the State Council to govern
the application and approval procedures for public offerings of equity securities, trading in
equity securities, the acquisition of listed companies, deposit, settling and transfer of listed
equity securities, as well as 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 Foreign Shares of Joint Stock Limited Companies ( ਷
). These regulations principally govern the
issuance, subscription, trading and declaration of dividends of domestic listed foreign shares
and disclosure of information of joint stock limited companies having domestic listed foreign
shares.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-19 –


--- page 580 ---
The PRC Securities Law took effect on July 1, 1999 and was revised as at August 28,
2004, October 27, 2005, June 29, 2013, August 31, 2014 and December 28, 2019, respectively.
It was the first national securities law in the PRC, and is divided into 14 chapters and 226
articles regulating, among other matters, the issuance and trading of securities, takeovers of
listed companies, securities exchanges, securities companies and the duties and responsibilities
of the State Council’s securities regulatory authorities. The PRC Securities Law
comprehensively regulates activities in the PRC securities market. Article 224 of the PRC
Securities Law provides that domestic enterprises must comply with the relevant regulations of
the State Council to, directly or indirectly, issue securities or lists its securities to be traded
outside the PRC. Currently, the issuance and trading of foreign issued shares (including H
share) are principally governed by the rules and regulations promulgated by the State Council
and the CSRC.
ARBITRATION AND ENFORCEMENT OF ARBITRAL A W ARDS
The Arbitration Law of the PRC () (the “Arbitration Law”)
was passed on August 31, 1994, became effective on September 1, 1995 and was amended on
August 27, 2009 and September 1, 2017. It is applicable to contract disputes and other property
disputes between natural persons, legal persons and other organizations where the parties have
entered into a written agreement to refer the matter to arbitration before an arbitration
committee constituted in accordance with the Arbitration Law. Under the Arbitration Law, an
arbitration committee may, before the promulgation by the PRC Arbitration Association ( ʕ਷
΀൒՘ึ) of arbitration regulations, formulate interim arbitration rules in accordance with the
Arbitration Law and the Civil Procedure Law. Where the parties have by agreement provided
arbitration as the method for dispute resolution, the people’s court will refuse to handle the
case, unless the arbitration agreement is null and void.
Under the Arbitration Law and the Civil Procedure Law, an arbitral award made by the
arbitration body shall be final and conclusive 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. The people’s court shall enforce the arbitral award upon receipt of the
application. A people’s court may refuse to enforce an arbitral award made by an arbitration
tribunal after verification by collegial bench formed by the people’s court if there is any
procedural irregularity (including but not limited to irregularity in the composition of the
arbitration tribunal or arbitration proceedings, the jurisdiction of the arbitration commission,
or the making of an award on matters beyond the scope of the arbitration agreement).
A party seeking to enforce an arbitral award of PRC Arbitration Tribunal against a party
who, or whose property, is not within the PRC, may apply to a foreign court with jurisdiction
over the case for enforcement. Similarly, an arbitral award made by a foreign arbitration body
may be recognized and enforced by the PRC courts in accordance with the principles of
reciprocity or any international treaty concluded or participated in by the PRC. The PRC
acceded to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards
(, the “New Y ork Convention”) adopted on June 10, 1958
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-20 –


--- page 581 ---
pursuant to a resolution passed by the SCNPC on December 2, 1986. The New Y ork
Convention provides that all arbitral awards made in a state which is a party to the New Y ork
Convention shall be recognized and enforced by other parties to the New Y ork Convention,
subject to their right to refuse enforcement under certain circumstances, including where the
enforcement of the arbitral award is against the public policy of the State to which the
arbitration for enforcement is made. At the time of the PRC’s accession to the New Y ork
Convention, the SCNPC declared that (i) the New Y ork Convention will only be applied to the
recognition and enforcement of arbitral awards made in the territories of other parties based on
the principle of reciprocity; and (ii) the New Y ork Convention will only be applied to disputes
deemed under PRC laws to be arising from contractual or non-contractual mercantile legal
relations.
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 became 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) (Articles 1 and
4 became effective on November 27, 2020, and Articles 2 and 3 became effective on May 19,
2021) promulgated on November 26, 2020, the courts of Hong Kong agree to enforce the
awards made pursuant to the Arbitration Law by the arbitral authorities in the Mainland (the
list to be supplied by the Legislative Affairs Office of the State Council (܃)
through the Hong Kong and Macao Affairs Office of the State Council ( ਷ਕ৫ಥዦԫਕ፬ʮ
܃and the people’s courts of the Mainland agree to enforce the awards made in the Hong
Kong pursuant to the Arbitration Ordinance of the Hong Kong. If the people’s courts of the
Chinese Mainland find that the enforcement of awards made by the Hong Kong arbitral bodies
in the Chinese Mainland will be against public interests of the Mainland, or the courts of Hong
Kong decide that the enforcement of the arbitral awards in Hong Kong will be against public
policies of Hong Kong, the awards may not be enforced.
JUDICIAL JUDGEMENT AND ENFORCEMENT
According to the Arrangement on Mutual Recognition and Enforcement of Judgments in
Civil and Commercial Matters by the Courts of the Chinese Mainland and of the Hong Kong
Special Administrative Region (ʝႩ̙ձ
τર) promulgated on January 25, 2024 and implemented on January
29, 2024 by the Supreme People’s Court, parties involved may apply to the courts of the
Chinese Mainland or the Hong Kong Special Administrative Region for the recognition and
enforcement of valid judgments rendered by the people’s courts of the Chinese Mainland and
the courts of the Hong Kong Special Administrative Region in civil and commercial matters or
in civil damages awards arising from criminal cases, in accordance with this Arrangement.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-21 –


--- page 582 ---
This appendix is mainly to outline the Articles of Association of the Company for
prospective investors. Since this section contains only a summary, it may not include all
information that is important to prospective investors.
GENERAL
The Company is a joint-stock limited company with perpetual succession.
A shareholder shall be liable for the Company in proportion to the shares it has subscribed
from the Company, while the Company shall be liable for the debts of the Company with all
its properties.
Since the effective date of the Articles of Association of the Company, such Articles will
become legal documents to regulate the organization and behaviors of the Company, the rights
and obligations of shareholders and the Company and their relationship between the Company
and shareholders, or between shareholders, which will also have binding effects on the
Company, its shareholders, directors, and executives. Pursuant to the above, a shareholder may
file a lawsuit to another shareholder, a shareholder may file a lawsuit to a director or executive
of the Company, a shareholder may file a lawsuit to the Company, while the Company may file
a lawsuit to a shareholder, director or executive.
BUSINESS SCOPE
As lawfully registered, the Company’s business scope includes: production, development
and servicing of various electrical-mechanical integrated products, automatic control, motion
control, drive unit, computer applied software, servo hydraulic control and system integration;
sale of self-made products; autonomous and proxy operation of the import and export of
various goods and technologies. (Subject to approval) General projects: manufacturing of
industrial robots; research and development of intelligent robots; development of AI applied
software; industrial Internet information service; manufacturing of electronic components
(autonomous operation according to business license, except for the projects subject to
approval).
SHARES
Issuance of Shares
The shares of the Company will be issued in open, fair and just manner, with equal rights
for each share of the same class. For the same class of shares issued in the same time, each
share is issued in the same conditions and price; and each subscriber has paid the same price
for each share subscribed.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-1 –


--- page 583 ---
Share Increase/Decrease and Repurchase
Upon the demand of operation and development, under laws and regulations, with
resolution of general meeting of shareholders, the Company may increase share capital by
means of:
(1) issuing shares to unspecific objects;
(2) issuing shares to specific objects;
(3) distributing bonus shares to existing shareholders;
(4) converting provident fund into share capital;
(5) other means pursuant to laws, administrative regulations, CSRC rules and the
securities regulatory rules of the place where the Company’s shares are listed.
The Company shall not repurchase its own shares, unless in any of the following events:
(1) decrease of its registered capital;
(2) merger with another firm holding its shares;
(3) use of company shares in staff shareholding scheme or equity incentives;
(4) Shareholders disagree with the resolution of merger or spin-off at general meeting,
and require the Company to repurchase its shares;
(5) conversion of company shares into convertible bonds of the Company;
(6) required to maintain the company value and shareholder’s interests.
The Company may repurchase its shares by public centralized trading, or other means
recognized by laws, administrative regulations, CSRC rules and other securities regulatory
rules of the place where the Company’s shares are listed. To repurchase its shares in event (3),
(5) or (6) above, the Company shall repurchase by public centralized trading.
To repurchase its shares in event (1) or (2) above, the Company shall obtain a resolution
at general meeting; to repurchase in event (3), (5) or (6) above, the Company shall, as required
above or approved by general meeting, obtain a resolution of Board meeting at which more
than 2/3 directors are present.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-2 –


--- page 584 ---
Upon repurchase in event (1) above, the shares shall be deregistered within 10 days from
repurchase; in event (2) or (4) above, the shares shall be transferred or deregistered within 6
months; in event (3), (5) or (6), the shares held by the Company shall not exceed 10% of its
shares issued, and such shares shall be transferred or deregistered within 3 years, unless
otherwise required by laws, administrative regulations, departmental rules and the securities
regulatory rules of the place where the Company’s shares are listed concerning share
repurchase.
Transfer of Shares
Company shares shall be transferred lawfully.
All H shares shall be transferred in general or common form or any other written transfer
instrument in the format acceptable to the Board (including the Standard Form of Transfer
defined by HKEX from time to time, or Transfer Form); such transfer instrument can only be
effective with signature or company seal (if the transferor or transferee is a firm). The transfer
instrument may be signed by signature or photocopy, if the transferor or transferee is a
recognized clearing house defined by relevant provisions effective from time to time under HK
laws (“Recognized Clearing House”) or its agent. All transfer instruments shall be deposited
with the legal address of the Company or other address designated from time to time by the
Board.
The Company cannot accept any of its shares is subject to pledge.
The shares issued publicly by the Company before issuance of its A shares shall not be
transferred within 1 year from the date of listing of its A shares on Shenzhen Stock Exchange.
A director or executive of the Company shall declare its holding of Company shares and
the change to the Company, and during its term of office the number of shares transferred every
year shall not exceed 25% of the total Company shares of the same class it holds; such shares
shall not be transferred within 1 year from the listing of Company shares. A director or
executive shall not transfer any of Company shares it holds within half a year from its leaving
the Company.
When a director or executive holding more than 5% shares of the Company sells out the
Company shares or other equity securities it holds within 6 months from buy in, or buys back
within 6 months from sellout, the proceeds shall be recovered by the Board, in the ownership
of the Company. However, the exceptions include an underwriter who retains more than 5%
shares of the Company after initial public offering, and other events defined by CSRC. There
may be other provisions according to laws, administrative regulations, departmental rules and
the securities regulatory rules of the place where the Company’s shares are listed.
The shares or other equity securities held by above director, executive or individual
shareholder shall include the shares or other equity securities held by its spouse, parents or
children or held by them using other’s account.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-3 –


--- page 585 ---
If the Board fails to perform according to above provisions, shareholders may require the
Board to perform within 30 days. If the Board fails to perform before deadline, shareholders
may file to the people’s court in the name of shareholders, for the benefit of the Company.
If the Board fails to perform according to above provisions, the director who is
responsible for such failure shall be jointly and severally liable at law.
SHAREHOLDERS AND GENERAL MEETING
General Provisions on Shareholders
The Company shall establish a register of shares based on the vouchers provided by the
securities registering and clearing institution, and the register shall serve as sufficient evidence
to prove the shareholders hold the shares of the Company.
The original of H shares register is deposited in Hong Kong, available to shareholders for
search, provided that the Company may suspend registration of shareholders under applicable
laws, regulations and local listing rules. Any shareholder named in the H shares register or any
person requiring to be named in the H shares register, who has lost its shares, may apply to the
Company for reissuing shares to cover the lost shares. A holder of overseas listed shares, who
has lost its shares, may apply for reissuing shares according to the laws, stock exchange rules
or other requirements of the place where the original of such overseas shares register is
deposited.
A shareholder has the rights and obligations according to the class of shares it holds; the
shareholders hold the same class of shares have the equal rights and obligations.
The Company shall sign a securities registration and service agreement with the securities
registering and clearing institution, to regularly check significant shareholders information and
significant shareholders shareholding change (including equity pledge), and timely understand
the Company’s shareholding structure.
When the Company intends to hold a general meeting, distribute dividends, settle
accounts or engage in other business that requires to identify shareholders, the caller of Board
meeting or general meeting shall determine the date of shares registration. The shareholders
named in the shares register after closing of the registration date shall be entitled shareholders.
A shareholder of the Company is entitled to:
(1) obtain dividends and other forms of profit distribution in proportion to its
shareholding;
(2) lawfully require to hold, call on, chair, participate or appoint its representative to
participate and vote at general meeting;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-4 –


--- page 586 ---
(3) supervise the operation of the Company, give advice or inquiry;
(4) transfer, gift or pledge the Company shares it holds under laws, regulations and the
Articles of Association;
(5) check or replicate the Articles of Association, shares register, general meeting
minutes, Board meeting resolutions, financial and accounting reports, and the books
of accounts and accounting vouchers accessible to eligible shareholders;
(6) enjoy distribution of remaining properties of the Company according to its
shareholding when the Company is terminated or liquidated;
(7) (being the shareholder who disagrees with the resolution of merger or spin-off at
general meeting) require the Company to repurchase its shares;
(8) other rights under the laws, administrative regulations, departmental rules, the
securities regulatory rules of the place where the Company’s shares are listed or the
Articles of Association.
A shareholder requiring to check or replicate some material of the Company shall comply
with the Company Law, the Securities Law, and other laws, administrative regulations,
departmental rules and the securities regulatory rules of the place where the Company’s shares
are listed, and shall file a written request to the Company, specifying its purpose, and provide
documents in writing to prove the number and class of shares it holds. After verification of the
shareholder’s identity and purpose, the Company may provide the required material to the
shareholder under relevant laws, administrative regulations, departmental rules, the securities
regulatory rules of the place where the Company’s shares are listed and the Articles of
Association.
A shareholder may require local people’s court to invalidate any resolution at general
meeting or Board meeting that breaks the laws and administrative regulations.
If the calling process or voting manner of general meeting or Board meeting breaks the
laws, administrative regulations or Articles of Association, or the content of a resolution breaks
the Articles of Association, then the shareholder may require local people’s court to withdraw
such meeting or resolution within 60 days from the date of resolution, unless there is only
slight flaw in the calling process or voting manner, without substantial influence on the
resolution.
For any dispute on the effectiveness of general meeting resolution, the Board, the
shareholders and other parties shall timely file a litigation to the local people’s court. Before
the local court decides or determines to withdraw the resolution, the parties shall perform the
resolution. The Company, its directors and executives shall perform their duties practically, to
ensure normal operation of the Company.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-5 –


--- page 587 ---
If the local court decides or determines on some issue, the Company shall perform its
obligation of information disclosure under the laws, administrative regulations, the CSRC rules
and stock exchange rules, fully describing the influence, and shall actively cooperate in the
performance after the decision or determination becomes effective. For correction of previous
issue, the Company shall timely handle and perform its obligation of information disclosure.
The resolution at general meeting or Board meeting is ineffective in any of the following
events:
(1) the resolution is made without holding of general meeting or Board meeting;
(2) there is no voting on the motion to be resolved at general meeting or Board meeting;
(3) the number of representatives present at meeting or the number of voting rights
represented by them falls short of that required by the Company Law, the securities
regulatory rules of the place where the Company’s shares are listed or the Articles
of Association;
(4) the number of representatives present at meeting voting for the resolution or the
number of voting rights represented by them falls short of that required by the
Company Law, the securities regulatory rules of the place where the Company’s
shares are listed or the Articles of Association.
If a director or executive on duty, who is not a member of Audit Committee, breaks the
laws, administrative regulations or the Articles of Association, causing loss to the Company,
then the shareholder who holds more than 1% shares of the Company singly or in aggregate
for more than 180 consecutive days may require in writing the Audit Committee to file a
litigation to the local court; if a member of Audit Committee on duty breaks the laws,
administrative regulations or the Articles of Association, causing loss to the Company, then the
foregoing shareholder may require in writing the Board of Directors to file a litigation to the
local court.
The foregoing shareholder may directly file a litigation to the local court in its own name
for the benefit of the Company, if the Audit Committee or the Board refuses to file a litigation
after receiving the request in writing from the foregoing shareholder or fails to file a litigation
within 30 days after receiving the request, or if in emergency the failure to immediately file
a litigation may cause irreparable damages to the Company’s interests.
If other persons infringe on the Company’s legitimate rights and benefits, causing loss to
the Company, then the shareholder holding over 1% shares of the Company singly or in
aggregate for more than 180 consecutive days may file a litigation to local court according to
above two paragraphs.
If a director, supervisor or executive of a wholly owned subsidiary of the Company on
duty breaks the laws, administrative regulations or the Articles of Association, causing loss to
the Company, or if other persons infringe on the wholly owned subsidiary’s legitimate rights
and benefits, causing loss to such subsidiary, then the shareholder holding over 1% shares of
the Company singly or in aggregate for more than 180 consecutive days may require in writing
the Board of Supervisors or the Board of Directors of such subsidiary to file a litigation or file
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-6 –


--- page 588 ---
a litigation directly in its own name, under Section 189.1 to 189.3 of the Company Law. If there
is no Board of Supervisors or Supervisor in the wholly owned subsidiary with Audit
Committee, the foregoing provisions shall prevail.
If a director or executive breaks the laws, administrative regulations or the Articles of
Association, against the interests of shareholders, then shareholders may file a litigation to
local court.
A shareholder of the Company shall:
(1) obey the laws, administrative regulations, departmental rules, the securities
regulatory rules of the place where the Company’s shares are listed and the Articles
of Association;
(2) contribute to the share capital according to the number of shares subscribed and the
method of subscription;
(3) not withdraw from share capital, unless otherwise required by the laws,
administrative regulations, departmental rules and the securities regulatory rules of
the place where the Company’s shares are listed;
(4) not misuse the shareholder’s rights to harm the Company or other shareholders’
interests; not misuse the Company’s legal person status and the shareholder’s
limited liability to harm the interests of the Company’s creditors;
(5) other obligations under the laws, administrative regulations, departmental rules, the
securities regulatory rules of the place where the Company’s shares are listed and
the Articles of Association.
If the misuse of shareholder’s rights causes loss to the Company or other shareholders,
then the misusing shareholder shall be duly liable for compensation. If the misuse of
Company’s legal person status and shareholder’s limited liability to evade debts seriously
damages the interests of the Company’s creditors, then the misusing shareholder shall be
jointly and severally liable for Company debts.
Controlling Shareholder and Beneficial Owner
The controlling shareholder or beneficial owner of the Company shall exercise its rights,
perform its obligations and maintain the listed company’s interests, under the laws, regulations,
the CSRC rules, the SZSE rules and other local listing rules.
The controlling shareholder or beneficial owner of the Company shall:
(1) lawfully exercise shareholder’s rights, not misuse control or utilize the connection
to harm the Company or other shareholder’s legitimate rights and benefits;
(2) strictly perform its public statements and various commitments, not alter or exempt
bilaterally;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-7 –


--- page 589 ---
(3) strictly perform its obligation of information disclosure as required, actively
cooperate with the Company in disclosure, and timely notify the Company of any
material event that has occurred or is going to occur;
(4) not occupy the Company’s funds in any manner;
(5) not force, direct or require the Company and related personnel to provide guarantee
illegally;
(6) not profiteer from the Company’s nonpublic material information, not in any form
divulge any nonpublic material information relating to the Company, and not engage
in insider trading, short-term trading, market manipulation or other illegal business;
(7) not harm the Company or other shareholder’s legitimate rights and benefits through
unfair connected transaction, profit distribution, assets reorganization, external
investment among others;
(8) ensure the assets integrity, staff independence, financial independence, institutional
independence and business independence of the Company, and shall not influence
the independence of the Company in any form;
(9) otherwise required by the laws, administrative regulations, the CSRC rules, the
SZSE rules, the securities regulatory rules of the place where the Company’s shares
are listed and the Articles of Association.
The controlling shareholder or beneficial owner of the Company who does not act as
director but does actually perform company duties shall perform the obligation of sincerity and
the obligation of diligence as director contained in the Articles of Association.
The controlling shareholder or beneficial owner of the Company who has instructed a
director or executive to harm the Company or other shareholder’s interests shall be jointly and
severally liable with such director or executive.
The controlling shareholder or beneficial owner who pledges the Company shares in its
hands or in its beneficial ownership shall maintain the stability of Company control and
operation.
The controlling shareholder or beneficial owner who transfers the Company shares in its
hands shall comply with its commitments to restricted shares transfer and the restrictive
provisions for share transfer under the laws, administrative regulations, the CSRC rules, the
SZSE rules and the securities regulatory rules of the place where the Company’s shares are
listed.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-8 –


--- page 590 ---
General Provisions for General Meeting
The general meeting is composed of entire shareholders. The general meeting as the
authority of the Company has the power to:
(1) elect and replace a director who is not representative of employees, and determine
the director’s remuneration;
(2) consider and approve the Board’s report;
(3) consider and approve the Company’s profit distribution plan and loss makeup plan;
(4) resolve on the Company’s increase or decrease of registered capital;
(5) resolve on the issuance of Company bonds;
(6) resolve on the merger, spin-off, dissolution, liquidation or change of nature of the
Company;
(7) modify the Articles of Association of the Company;
(8) resolve on the engagement, disengagement of the CPA firm;
(9) consider and approve the transaction issue under Section 47, the guarantee issue
under Section 48, and the financial subsidy issue under Section 49 of the Articles of
Association;
(10) consider the fact that the Company’s purchase or sale of material assets within one
year exceeds 30% of its latest audited total assets;
(11) consider any connected transaction between the Company and the connected party
in the value of more than RMB30 million and accounting for more than 5% of the
absolute value of the latest audited net assets (except the Company obtains cash gifts
or provides guarantee);
(12) consider and approve the change of fundraising purpose;
(13) consider the equity incentive plan and staff shareholding plan;
(14) consider other issues to be decided by general meeting under the laws,
administrative regulations, departmental rules, securities regulatory rules of the
place where the Company’s shares are listed or the Articles of Association.
The general meeting may authorize the Board of Directors to resolve on the issuance of
Company bonds.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-9 –


--- page 591 ---
General meeting shall include annual general meeting and extraordinary general meeting.
The Company shall hold 1 annual general meeting per year, within 6 months after the ending
of previous financial year.
The Company shall hold extraordinary general meeting within 2 months in any of the
following events:
(1) the number of directors falls short of 2/3 of the quorum under the Articles of
Association;
(2) the uncompensated loss amounts to 1/3 of the Company’s paid-in capital;
(3) the shareholder holding more than 10% shares of the Company singly or in
aggregate requires;
(4) the Board believes it’s necessary;
(5) the Audit Committee proposes a holding of meeting;
(6) otherwise under the laws, administrative regulations, departmental rules, securities
regulatory rules of the place where the Company’s shares are listed or the Articles
of Association.
The general meeting will be held on site. Otherwise, it may be held online by
telecommunication at the same time. The Company will offer shareholders the access to online
voting, so the shareholders can take part in general meeting more conveniently.
Call for General Meeting
The Board of Directors shall timely call a general meeting within specific time.
With consent of a majority of independent directors, the independent directors may
propose an extraordinary general meeting to the Board. In face of such proposal, the Board
shall give a reply in writing within 10 days, saying yes or no, under the laws, regulations and
the Articles of Association.
Saying yes, the Board will issue a notice of general meeting within 5 days from the
resolution of Board; saying no, the Board will issue a statement to specify the reason.
The Audit Committee may propose in writing an extraordinary general meeting to the
Board. In face of such proposal, the Board shall give a reply in writing within 10 days, saying
yes or no, under the laws, administrative regulations and the Articles of Association.
Saying yes, the Board will issue a notice of general meeting within 5 days from the
resolution of Board. Any difference from original proposal shall be with the consent of Audit
Committee.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-10 –


--- page 592 ---
Saying no or failing to reply within 10 days from proposal shall be deemed as the Board’s
inability to perform or failure to perform its duties to call a general meeting, then the Audit
Committee may call and chair a general meeting on its own.
The shareholder holding more than 10% shares of the Company singly or in aggregate
may request in writing an extraordinary general meeting to the Board. In face of such request,
the Board shall give a reply in writing within 10 days, saying yes or no, under the laws,
administrative regulations and the Articles of Association.
Saying yes, the Board will issue a notice of general meeting within 5 days from the
resolution of Board. Any difference from original request shall be with the consent of relevant
shareholders.
The Board saying no or failing to reply within 10 days from request, the shareholder
holding more than 10% shares of the Company singly or in aggregate may request in writing
an extraordinary general meeting to the Audit Committee.
Saying yes, the Audit Committee will issue a notice of general meeting within 5 days
from the request. Any difference from original request shall be with the consent of relevant
shareholders.
Audit Committee failing to issue a notice of general meeting within specific time shall be
deemed as its failure to call or chair a general meeting, then the shareholder holding more than
10% shares of the Company singly or in aggregate for over 90 consecutive days may call and
chair a general meeting on its own.
If the Audit Committee or the shareholder decides to call a general meeting on its own,
it shall send a notice in writing to the Board, while filing to Shenzhen Stock Exchange.
Before the decision is announced, the percentage of shareholders calling general meeting
shall not be lower than 10%.
When issuing the notice of general meeting or announcing the decision, the Audit
Committee or the calling shareholders shall submit relevant certificates to Shenzhen Stock
Exchange.
For a general meeting called by the Audit Committee or shareholders on its/their own, the
Board and its secretary shall cooperate. The Board shall offer the shares register at the date of
share registration.
The Company shall be liable for all the costs required for a general meeting called by the
Audit Committee or shareholders on its/their own.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-11 –


--- page 593 ---
Proposal and Notice of General Meeting
When the Company intends to hold a general meeting, the Board, the Audit Committee
or the shareholder holding more than 1% shares of the Company singly or in aggregate may
propose to the Company. The shareholder holding more than 1% shares of the Company singly
or in aggregate may propose temporarily to the caller of meeting 10 days prior to the holding
of general meeting. The caller shall issue an additional notice of general meeting within 2 days
from proposal, announcing the content of such temporary proposal, and submit the proposal to
general meeting for review, except such proposal breaks the laws, administrative regulations
or the Articles of Association or falls out of the terms of reference of the general meeting.
Otherwise, after the caller issues the notice of general meeting, the proposal specified in the
notice shall not be modified nor shall new proposal be added. Any proposal not specified in the
notice or not meeting the Articles of Association shall not be subject to voting or resolution.
The caller shall send a notice by announcing to all shareholders 21 days prior to the
holding of annual general meeting, or 15 days prior to the holding of extraordinary general
meeting.
A notice of general meeting shall include:
(1) time, place and period of meeting;
(2) matters and proposals to be submitted to the meeting;
(3) explicit wording: every ordinary shareholders may attend the general meeting, and
appoint its proxy in writing for presence and voting, and such proxy is not
necessarily a shareholder of the Company;
(4) the date of shares registration for the shareholders who may attend the general
meeting;
(5) contact person’s name and telephone number;
(6) time and process of online voting or otherwise.
After notice is issued, the site of meeting shall not be changed without a justifiable
reason. To change the site of meeting, the caller shall issue a notice specifying the reason 2
business days before the meeting.
Holding of General Meeting
All ordinary shareholders named in the shares register on the date of shares registration
or their proxies may attend the general meeting, and exercise their voting rights under the laws,
administrative regulations, departmental rules, securities regulatory rules of the place where
the Company’s shares are listed and the Articles of Association. A shareholder may attend and
vote by person or by proxy at the general meeting.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-12 –


--- page 594 ---
If the general meeting requires directors and executives to be present, then directors and
executives shall be present and take inquiries from shareholders.
The general meeting is chaired by the chairman of Board. When the chairman is unable
or fails to perform its duties, then vice chairman shall chair the general meeting. When the vice
chairman is unable or fails to perform its duties, then a majority of directors shall jointly elect
a director to chair the general meeting. If the Audit Committee calls a general meeting on its
own, then the caller shall chair the general meeting. When the caller is unable or fails to
perform its duties, a majority of members of the Audit Committee shall jointly elect a member
of the Audit Committee to chair the general meeting. The general meeting called by a
shareholder on its own shall be chaired by the caller or its proxy. When holding a general
meeting, if the chair of meeting breaks the proceeding rules and makes the general meeting
unable to continue, then with consent of present shareholders representing a majority of voting
rights, the general meeting may elect one person to chair the meeting and continue the meeting.
The Company develops the Proceeding Rules of General Meeting, to specify the call,
holding and voting process of general meeting, including notice, registration, consideration of
motion, voting, count of votes, declaration of voting results, formation of resolution, meeting
minutes and its signing and announcement, as well as the principles how the Board is
authorized, with details of authorization. The Proceeding Rules of General Meeting shall serve
as attachment to the Articles of Association, as contemplated by the Board and approved by the
general meeting.
Voting and Resolution of General Meeting
Resolutions at general meeting include ordinary resolution and special resolution. To
make an ordinary resolution at general meeting, a simple majority of voting rights represented
by the shareholders present at general meeting shall vote for relevant motion. To make a special
resolution, at least 2/3 voting rights represented by the shareholders present at general meeting
shall vote for relevant motion.
Ordinary resolution may concern:
(1) Board’s work report;
(2) Board’s profit distribution plan and loss compensation plan;
(3) Board member’s appointment, dismissal, remuneration and payment;
(4) other matters of ordinary resolution under the laws, administrative regulations,
departmental rules, securities regulatory rules of the place where the Company’s
shares are listed or the Articles of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-13 –


--- page 595 ---
Special resolution may concern:
(1) modification of the Articles of Association and attachments like the Proceeding
Rules of General Meeting and the Proceeding Rules of Board of Directors;
(2) increase/decrease of registered capital;
(3) merger, spin-off, dissolution, change of nature or liquidation of the Company;
(4) listing of a subsidiary by division;
(5) purchase or sale of material assets or provision of guarantee for others within 12
consecutive months in the aggregate amount exceeding 30% of the Company’s latest
audited total assets;
(6) issuance of shares, convertible bonds, preferred shares and other kinds of securities
recognized by the CSRC;
(7) repurchase of shares for decreasing the registered capital;
(8) material assets reorganization;
(9) equity incentive scheme;
(10) resolution at general meeting to withdraw the shares listing in Shenzhen Stock
Exchange and/or Hong Kong Stock Exchange, and decision of no more exchange
trading, or application for trading or transfer at other exchange site;
(11) other matters considered by ordinary resolution of general meeting to have material
influence on the Company, which should be solved in special resolution of general
meeting;
(12) other matters to be solved in special resolution under the laws, administrative
regulations, departmental rules, securities regulatory rules of the place where the
Company’s shares are listed, the Articles of Association, or the Proceeding Rules of
General Meeting.
To adopt the motion (4) or (10) above, at least 2/3 voting rights represented by the
shareholders present at general meeting should vote for it, but also at least 2/3 voting rights
represented by the directors, executives of the Company present at general meeting and other
shareholders holding more than 5% shares of the Company singly or in aggregate should vote
for it.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-14 –


--- page 596 ---
A shareholder may exercise its voting rights according to the number of voting shares it
represents, one vote for one share, except for preferred shareholder. At the time of voting, a
shareholder (or its proxy) with two or more votes needs not to totally vote for, against or
abstain.
When the general meeting is considering a material issue that may influence the interests
of minority shareholders, the votes should be counted separately for minority shareholders. The
results of separate voting should be publicized in time.
The Company shares held by the Company have no voting rights, and these shares are not
included in the total number of voting shares present at general meeting.
If a shareholder buys in voting shares in breach of Section 63.1 to 63.2 of Securities Law
of the PRC, then the shareholder shall not exercise the voting rights represented by such shares
within 36 months from buy-in, and such shares are not included in the total number of voting
shares present at general meeting.
The Board, independent directors, the shareholder holding more than 1% voting shares or
the investor protection organization established under the laws, regulations or the CSRC rules
may openly collect voting rights from shareholders. The collection of voting rights shall fully
disclose the intent of voting to target shareholders. To do so, voting intent or other information
shall be fully disclosed to subject shareholders. Paid collection or disguised form of paid
collection is prohibited. Except for statutory conditions, the Company shall not pose minimum
shareholding limit during the collection.
When general meeting is considering a connected transaction, connected shareholders
shall not vote, and the number of voting shares represented by them shall not be included in
the effective total votes; the announcement of general meeting resolution shall fully disclose
the voting of non-connected shareholders. Connected shareholders shall actively apply for
evasion. When a connected shareholder does not apply for evasion actively, other knowing
shareholders may require it to evade. When general meeting is considering a connected
transaction, the chair of meeting shall announce the list of connected shareholders, specifying
whether they take part in the voting or not, and announce the total number of voting shares
represented by non-connected parties and the percentage in total shares of the Company, before
voting.
To elect more than 2 directors, the general meeting shall practise the cumulative voting
mechanism. In addition, the general meeting shall vote on all motions one by one, and for
different motions on the same matter, shall vote in time sequence. The general meeting will not
suspend or withhold the voting on a motion, except the general meeting is suspended or unable
to resolve in force majeure or other special reasons.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-15 –


--- page 597 ---
In considering a motion, the general meeting will not modify the motion. A modified
motion shall be deemed as a new motion, and shall not submitted to the same general meeting
for voting. One vote may be cast either on site or on line, or otherwise as alternative. If a vote
is cast repeatedly, then the first cast shall prevail.
DIRECTORS AND BOARD OF DIRECTORS
General Provisions for Directors
A director as elected or replaced by general meeting may be dismissed by general meeting
before expiry of tenure. A director may take office for a tenure of not more than 3 years, and
may be reelected as director upon expiration.
A director’s tenure starts from the date it takes office to the expiration of current Board.
If a director expires but there is not a reelection in time, then before a new director takes office,
the former director shall continue its duties as director under the laws, administrative
regulations, departmental rules and the Articles of Association.
A director may also be executive of the Company, but the number of directors acting as
executives and employee representatives shall not be more than 1/2 of entire directors of the
Company.
A director shall comply with the laws, regulations, local listing rules and the Articles of
Association, with obligation of royalty to the Company, and shall take measures to evade
interest conflict with the Company, without profiteering from its powers.
A director with the obligation of loyalty to the Company shall:
(1) not misappropriate the Company’s properties or funds;
(2) not deposit the Company’s funds in bank account created in its own name or in
other’s name;
(3) not bribe or take other illegal income on duty;
(4) not contract or trade with the Company directly or indirectly, before reporting to and
obtaining a resolution at the Board or general meeting;
(5) not leverage on its duties to seek for the Company’s business opportunities on its
own or other’s account, except reporting to and obtaining a resolution at Board or
general meeting, or that the Company cannot take such business opportunities under
the laws, administrative regulations or the Articles of Association;
(6) not operate similar business with the Company for itself or for others, before
reporting to and obtaining a resolution at Board or general meeting;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-16 –


--- page 598 ---
(7) not occupy other’s commission for trading with the Company;
(8) not disclose the Company’s secret without permission;
(9) not use its connection to damage the Company’s interests;
(10) other obligations of loyalty under the laws, administrative regulations, departmental
rules, securities regulatory rules of the place where the Company’s shares are listed
and the Articles of Association.
A director’s income breaking this provision shall be owned by the Company; if such
breach has caused loss to the Company, said director shall be liable for compensation.
A director shall comply with the laws, regulations, local listing rules and the Articles of
Association, with the obligation of loyalty to the Company, and shall take reasonable care of
the best interests of the Company on duty.
A director with the obligation of diligence to the Company shall:
(1) prudently, carefully, and diligently exercise the rights vested by the Company, to
ensure the Company’s business operations comply with national laws, regulations
and various economic policies, and its business activities do not fall out of the
business scope listed in the business license;
(2) treat all shareholders fairly;
(3) understand the Company’s operation and management timely;
(4) sign written confirmation on the Company’s regular reports, to ensure the truth,
accuracy and integrity of information disclosed by the Company. If the director fails
to guarantee the truth, accuracy, integrity of or disagrees with the securities issuing
documents and regular reports, then the director shall give its opinions in the written
confirmation, specifying its reason;
(5) provide relevant conditions and materials as be to the Audit Committee, without
precluding the Audit Committee from exercising its powers;
(6) others under the laws, administrative regulations, departmental rules, securities
regulatory rules of the place where the Company’s shares are listed and the Articles
of Association.
If a director fails to attend by person for two consecutive times, without appointing
another director to attend the Board meeting by proxy, then such failure shall be deemed as
inability to perform duties, and the Board shall recommend replacing such director to the
general meeting.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-17 –


--- page 599 ---
A director may resign before expiry of tenure, by submitting a report of resignation in
writing to the Company. The resignation is effective on the day the report is received by the
Company, and the Company will disclose related conditions within 2 business days.
Upon resignation or expiration, a director shall hand over to the Board, and its obligations
of royalty to the Company and shareholders shall not necessarily cease after the termination of
tenure and shall remain effective within 12 months from such resignation or expiration. A
director’s liabilities incurred on duty during its tenure shall not be relieved or terminated by
its leaving the Company.
If a director on duty causes damage to others, the Company shall be liable for
compensation; a director who is willful or guilty of gross negligence shall also be liable for
compensation. A director on duty breaking the laws, administrative regulations, departmental
rules, securities regulatory rules of the place where the Company’s shares are listed or the
Articles of Association, causing loss to the Company, shall be liable for compensation.
Board of Directors
The Company sets up the Board of Directors, composed of 9 directors, including 1
chairman, 1 vice chairman, 3 independent directors and 1 employee director. Chairman and
vice chairman are elected by voting from a majority of directors at the Board meeting.
Directors may include executive directors, non-executive directors and independent directors.
A non-executive director means a directors not acting as manager in the Company.
The Board may:
(1) call a general meeting, and report to general meeting;
(2) carry out a resolution of general meeting;
(3) decide the Company’s operating and investment plans;
(4) develop the Company’s profit distribution and loss compensation plans;
(5) develop the Company capital in/decrease, bond/securities issuing and listing plans;
(6) contemplate the Company’s plans of significant acquisition, shares repurchase or
merger, spin-off, dissolution and change of nature;
(7) within the authority of general meeting, decide the Company’s external investment,
assets purchase/sale, assets pledge, external guarantee, entrusted wealth
management, connected transaction and external donation etc.;
(8) decide the Company’s internal management setup;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-18 –


--- page 600 ---
(9) engage or dismiss the Company’s general manager, Board secretary and other
executives, and determine their remuneration and reward/punishment; based on
GM’s nomination, decide to engage or dismiss the Company’s deputy GM, CFO or
other executives, and determine their remuneration and reward/punishment;
(10) develop the Company’s fundamental management system;
(11) develop the modification of the Articles of Association;
(12) manage the Company’s information disclosure;
(13) propose engagement or replacement of CPA firm to general meeting;
(14) listen to deputy GM’s work briefing and check deputy GM’s work;
(15) consider and approve any contemplated transaction in the value of more than
RMB300,000 between the Company and connected natural person; consider and
approve any connected transaction between the Company and the connected entity
(or other organization) in the value of more than RMB3 million and accounting for
more than 0.5% of the absolute value of the latest audited net assets of the Company;
(16) consider other guarantee than those to be approved by general meeting;
(17) others powers vested by the laws, administrative regulations, departmental rules,
securities regulatory rules of the place where the Company’s shares are listed, the
Articles of Association or the general meeting.
Any matter beyond the authority of general meeting shall be submitted to the Board for
consideration.
When the Board is considering a guarantee issue, a resolution is effective only with
consent of more than 2/3 directors present at the meeting.
Statutory powers of the Board shall be exercised by the Board collectively, without
authorizing other person to exercise, and shall not be altered or divested by the Articles of
Association, general meeting resolution or other means.
Chairman may:
(1) chair a general meeting, call and chair a Board meeting;
(2) urge and inspect the performance of Board resolution;
(3) sign relevant documents on behalf of the Company, sign important Board
documents;
(4) others within the authority of Board.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-19 –


--- page 601 ---
Vice chairman shall assist the chairman. When the chairman is unable or fails to perform
its duties, the vice chairman shall perform the duties; when the vice chairman is unable or fails
to perform the duties, a majority of directors shall elect one director from them to perform the
duties.
The Board will hold at least 4 meetings per year, to be called by chairman with a 14-day
prior notice in writing to entire directors.
The shareholders representing more than 1/10 voting rights, more than 1/3 directors or the
Audit Committee may propose extraordinary meeting to Board. The chairman shall call and
chair the Board meeting within 10 days after receiving the proposal.
The quorum of Board meeting is a majority of directors. Unless otherwise provided by
laws, regulations and the Articles of Association, a Board resolution is effective only when a
majority of directors vote for it. To vote at Board meeting, one director may only cast one vote.
A director shall attend the Board meeting by person; if a director fails to attend for a
justifiable reason, it may appoint another director as its proxy to attend, while the letter of
appointment shall specify the proxy’s name, proxy matter, scope of authority and effective
period, with the proxy’s signature or seal. The proxy director shall exercise director’s rights
within the authority. A director’s failure to attend a Board meeting by person or by proxy shall
be deemed as its waiver of voting rights at the meeting. An independent director shall not
appoint a non-independent director to vote by proxy. In considering the connected affairs, a
non-connected director shall not appoint a connected director to attend the meeting by proxy.
Independent Directors
An independent director as member of the Board, with the obligations of royalty and
diligence to the Company and entire shareholders, shall prudently:
(1) take part in Board decision making and give clear opinions on discussions;
(2) supervise potential conflict of significant interests between the Company and its
controlling shareholder, beneficial owner, directors and executives, and protect the
legitimate rights and benefits of minority shareholders;
(3) provide professional and objective suggestions on the Company’s operation and
development, improve the Board’s decision-making level;
(4) others under 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
– V-20 –


--- page 602 ---
An independent director may specially:
(1) engage an intermediary to audit, advise or verify the Company’s specific affairs
independently;
(2) propose extraordinary general meeting to the Board;
(3) propose Board meeting;
(4) lawfully collect voting rights from shareholders openly;
(5) give independent opinions on the event that may damage the rights and benefits of
the Company or minority shareholders;
(6) others under the laws, administrative regulations, departmental rules, securities
regulatory rules of the place where the Company’s shares are listed and the Articles
of Association.
An independent director to exercise its powers (1) to (3) above shall obtain the consent
from a majority of independent directors.
Committees under the Board
The Board sets up the Audit Committee, to exercise the duties of supervisors under the
Company Law of the PRC.
Audit Committee has 3 members, being directors not acting as executives of the
Company, including 3 independent directors, and the caller shall be an independent director
who is a professional of accounting.
Audit Committee shall review the Company’s financial information and disclosure,
supervise and evaluate internal/external audit and internal control. With consent from a
majority of members of Audit Committee, the following matters shall be submitted to the
Board for consideration:
(1) disclosure of financial information and internal control appraisal reports contained
in the financial/accounting reports and regular reports;
(2) engagement or dismissal of CPA firm as auditors of the listed company;
(3) engagement or dismissal of CFO of the listed company;
(4) change of accounting policies, accounting estimates or correction of significant
accounting errors for other reason than change of accounting standards;
(5) others under the laws, administrative regulations, the CSRC rules, the 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
– V-21 –


--- page 603 ---
The Board sets up Strategy, Nomination, Remuneration & Examination and ESG among
other professional committees, to perform duties in line with the securities regulatory rules of
the place where the Company’s shares are listed, the Articles of Association and the authority
of Board. A proposal of professional committee shall be submitted to the Board for
consideration. The working procedures of professional committees shall be developed by the
Board.
In Nomination Committee and Remuneration & Examination Committee, a majority of
members shall be independent directors, and the caller shall be an independent director.
Nomination Committee shall have at least one director whose gender is different with the rest.
Nomination Committee shall contemplate the directors/executives selection standards and
procedures, select and review the candidates and their eligibility, and give advice to the Board
concerning:
(1) nomination or appointment or dismissal of directors;
(2) engagement or dismissal or executives;
(3) others under the laws, administrative regulations, the CSRC rules, the securities
regulatory rules of the place where the Company’s shares are listed and the Articles
of Association.
Remuneration & Examination Committee shall develop the directors/executives’
examination standards and examine them, develop and screen directors/executives’
remuneration determining mechanism, decision-making process, payment and recourse
arrangement and other remuneration policies and schemes, and give advice to the Board
concerning:
(1) remuneration of directors or executives;
(2) development or change of equity incentive scheme, staff shareholding scheme,
benefits of incentives, and conditions for exercise of rights;
(3) director or executive’s shareholding scheme in the subsidiary to be divided;
(4) others under the laws, administrative regulations, the CSRC rules, the securities
regulatory rules of the place where the Company’s shares are listed and the Articles
of Association.
Strategy Committee shall research and recommend on the Company’s long term
development strategy and material investment decision. Strategy Committee shall mainly:
(1) understand domestic and international economic development trend, industrial
development trend, national and industrial policy orientation; research and
recommend on the Company’s long term development strategy planning and
development direction;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-22 –


--- page 604 ---
(2) evaluate the Company’s strategic planning, development objectives. operating plans
and implementing process;
(3) research and recommend on the material investment plans to be considered by the
Board under the Articles of Association;
(4) research and recommend on the material capital running plans to be considered by
the Board under the Articles of Association;
(5) research and recommend on other material events influencing the Company’s
development;
(6) check the implementation of above matters;
(7) others within the authority of Board.
ESG Committee shall monitor and guide the Company’s ESG effective performance, and
improve the Company’s ESG development. ESG Committee shall mainly:
(1) pay attention to the Company’s ESG laws, regulations and policies, research and
recommend on the Company’s ESG work direction;
(2) research and develop the Company’s ESG strategic planning, management structure,
system and implementing rules;
(3) identify and monitor the ESG risks and opportunities with great influence on the
Company’s operation, and guide the management team to take appropriate
countermeasures against the ESG risks and opportunities;
(4) instruct, supervise and check the Company’s ESG implementation, evaluate the
Company’s overall ESG performance and give suggestions;
(5) consider the Company’s ESG reports and other ESG related material events;
(6) others within the authority of Board.
Executives
The Company has 1 general manager (GM), to be engaged or dismissed by the Board. The
Company has deputy general managers, to be engaged or dismissed by the Board.
The director’s obligations of loyalty and diligence under the Articles of Association are
also applicable to executives.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-23 –


--- page 605 ---
GM reports to Board, and may:
(1) chair the Company’s operation and management, organize and implement Board
resolution, and report to the Board;
(2) organize and implement the Company’s annual operating and investment plans;
(3) contemplate the Company’s internal management setup plan;
(4) contemplate the Company’s fundamental management system;
(5) develop the Company’s specific rules;
(6) propose engagement or dismissal of deputy GM or CFO to the Board;
(7) decide to engage or dismiss responsible managers other than those to be engaged or
dismissed by the Board;
(8) other powers vested by the Articles of Association or the Board.
CFO reports to the Board and assists the GM. CFO is directly responsible for preparing
financial reports, processing with accounting policies, disclosing financial information and
other financial issues. CFO as executive shall strengthen control over the Company’s financial
process, regularly check the Company’s monetary funds and assets restriction, and monitor the
transactions and current funds flow between the Company and its controlling shareholder,
beneficial owner and other connected parties. CFO shall monitor the Company’s funds in/out
and balance fluctuations, take active measures against balance abnormality, and timely report
to the Board.
CFO shall ensure the Company’s financial independence, not affected by the controlling
shareholder or beneficial owner. CFO shall clearly refuse the controlling shareholder,
beneficial owner or its connected person’s order to occupy, transfer funds, assets or other
resources among other misappropriation of company interests, and timely report such refusal
to the Board.
Deputy GM reports to GM, and perform its duties within the designated business scope.
The Company has a Board secretary to prepare for general meeting and Board meeting,
keep documents safe, manage shareholders’ information of the Company, and cope with
information disclosure etc. Board secretary as executive, in order to perform its duties, may
attend relevant meeting, search relevant documents, and understand the Company’s finance and
operation. Board and other executives shall support the secretary. Any entity or individual
person shall not intervene with secretary’s normal performance of duties. Secretary shall
comply with 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
– V-24 –


--- page 606 ---
FINANCIAL AND ACCOUNTING POLICIES, PROFIT DISTRIBUTION AND
AUDITING
Financial and Accounting Policies
The Company shall establish its financial and accounting system in accordance with laws,
administrative regulations and requirements of competent authorities of the State.
Within 4 months of the end of each accounting year, the Company shall submit and
disclose its annual report to the branch of the CSRC and the stock exchange where its shares
are listed. Within 2 months of the end of the first half of each accounting year, the Company
shall submit and disclose its interim report to the branch of the CSRC and the stock exchange
where its shares are listed. The aforementioned annual and interim reports shall be prepared in
accordance with the relevant laws, administrative regulations, the CSRC, and the requirements
of the stock exchange where the Company’s shares are listed.
The Company shall not establish separate accounting books other than the statutory
accounting books. The Company funds shall not be deposited in any accounts opened in the
name of an individual.
When distributing profits after taxation of the year, the Company shall set aside 10% of
its profits for the Company’s statutory reserve until the fund has reached 50% or more of the
Company’s registered capital.
If the Company’s statutory common reserve is insufficient to make up losses for previous
years, the Company shall use its profits for the current year to make up such losses before
making the allocation to its statutory common reserve in accordance with the preceding
paragraph. After making the allocation from its after-tax profits to its statutory common
reserve, the Company may, subject to a resolution of the Shareholders’ general meeting, make
an allocation from its after-tax profits to the discretionary common reserve. After the Company
has made up its losses and made allocations to its common reserves, the remaining after-tax
profits of the Company shall be distributed in proportion to the shareholdings of its
shareholders, except for otherwise provided by the Articles of Association.
If the Shareholders’ general meeting breaches the Company Law by distributing profits
to shareholders, the shareholders shall return to the Company the profits that were distributed
in breach of the said provisions. Shareholders, responsible directors and senior managements
who have caused losses to the Company shall be liable for compensation. No profit shall be
distributed in respect of the shares in the Company held by itself.
The reserve of the Company shall be applied to make up for the Company’s losses,
expanding its business operations or increasing its capital. When the reserve is used to make
up the Company’s losses, the discretionary reserve and statutory reserve shall be first used; if
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-25 –


--- page 607 ---
the losses can still not be covered, the capital reserve may be used according to provisions.
When converting the statutory reserve fund into registered capital, the balance of such reserve
fund shall not be less than 25% of the registered capital of the Company before the conversion.
The Company shall adopt a continuous and steady profit distribution policy. The
Company’s profit distribution shall focus on providing investors with reasonable investment
return as well as maintaining the sustainable development of the Company.
The Company may distribute dividends in cash, in shares or in a combination of both cash
and shares. The Company shall actively promote the distribution of dividends in cash. Cash
dividends have a priority order in the profit distribution methods compared with stock
dividends. Under the relevant laws, regulations, and the Articles of Association, the Company
shall distribute no less than 20% of the distributable profits realized each year in cash. The
Company shall primarily adopt a cash dividend distribution policy, which stipulates: provided
that the Company maintains sustainable operations and long-term development and achieves
profitability in the current year with a positive accumulated undistributed profit balance, the
auditing firm shall issue an unqualified audit report for the Company’s financial statements of
that year (interim profit distributions shall comply with relevant regulations), without any
major investment plan or other significant cash expenditures (a “major investment plan or
significant cash expenditure” refers to cumulative expenditures for external investments or
asset acquisitions planned within the next 12 months reaching or exceeding 30% of the
Company’s latest audited net assets and exceeding RMB50 million), and the Company shall
distribute cash dividends after legally allocating statutory reserves and surplus reserves.
Should the Company experience rapid revenue growth and the Board determine that the price
of the shares of the Company does not correspond to the scale of the Company’s share capital,
the Company may propose and implement a share dividend distribution plan in addition to
meeting the aforementioned cash dividend distribution requirements.
The Company makes profit distribution once a year in principle; the Board of the
Company may propose distribution of interim dividends based on the scale of profit, cash flows
status, stage of development and capital requirements of the Company.
If the shareholders of the Company fraudulently dispose of the Company’s funds, the
Company shall deduct the distribution of cash profits from the shareholders in order to repay
the amount of disposed funds.
Internal Audit
The Company maintains an internal audit system, which specifies the leadership system,
responsibilities and authorities, staffing, funding security, use of audit results, and
accountability in relation to internal audit work. The Company’s internal audit system and the
responsibilities of audit personnel shall be implemented upon approval by the Board and
publicly disclosed. The internal audit department shall conduct oversight and inspections of the
Company’s affairs such as business activities, risk management, internal controls and financial
information.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-26 –


--- page 608 ---
Appointment of Accounting Firm
The Company shall appoint an accounting firm meeting the requirements of the Securities
Law and the securities regulatory rules of the place where the shares of the Company are listed
to audit the financial statements and verify the net assets of, and provide other counseling
services to, the Company. The accounting firm shall have a term of office of one 1 year and
may serve consecutive terms upon reappointment by the Company. The engagement and
dismissal of an accounting firm by the Company shall be decided by the Shareholders’ general
meeting. The Board shall not appoint an accounting firm before the shareholders’ meeting
makes a decision. The Company guarantees to the accounting firm appointed, to supply true
and complete accounting proof, accounting books, financial accounting report and other
accounting information. It cannot refuse to provide or hide information, or provide false
information.
The auditing fee of the accounting firm or the method of determining audit fee shall be
determined by the Shareholders’ general meeting. In the event of termination of the
appointment or non-renewal of appointment of an accounting firm, the Company shall notify
the accounting firm 30 days in advance; when the shareholders’ meeting votes on termination
of appointment of an accounting firm, the accounting firm shall be allowed to make its
representation.
Where the accounting firm proposes to resign, it shall explain to the Shareholders’ general
meeting whether there has been any impropriety on the part of the Company.
Notices and Announcements
Notices of the Company shall be sent via the following methods:
(1) by hand;
(2) by email;
(3) by announcement;
(4) other forms as stipulated in the securities regulatory rules of the place where the
Company’s shares are listed and the Articles of Association.
Where a notice is served by way of announcement, after the publication of such
announcement, all related persons shall be deemed to have received the relevant notice.
The notice for the Shareholders’ general meeting of the Company shall be issued by way
of announcement. The notice for a meeting of the Board shall be delivered by personal
delivery, fax, email, or other notification methods.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-27 –


--- page 609 ---
MERGER, DIVISION, CAPITAL INCREASE, CAPITAL REDUCTION, DISSOLUTION
AND LIQUIDATION
Merger, Division, Capital Increase and Capital Reduction
In the event of a merger of the Company, the parties to the merger shall enter into a
merger agreement and prepare a balance sheet and an inventory of assets. The Company shall
notify its creditors within a period of 10 days from the date of the resolution approving the
merger and publish an announcement of the same within 30 days from that date through
designated media and at Hong Kong Stock Exchange’s HKExnews website
(www.hkexnews.hk ). The creditors may request the Company to settle debts or provide
guarantees in respect thereof within 30 days of the receipt of the above notice or within 45 days
after the announcement is published if such notice is not received.
In the event of a division, the Company’s assets shall be divided accordingly. In the event
of a division, the Company shall prepare a balance sheet and an inventory of assets. The
Company shall notify its creditors within a period of 10 days from the date of the resolution
approving the division and publish an announcement of the same within 30 days from that date
through designated media or the National Enterprise Credit Information Publicity System.
Debts prior to the division shall be jointly and separately borne by the companies after such
division, unless otherwise agreed in writing by the Company and creditors on debt settlement
prior to such division.
In the case of a reduction of its registered capital, the Company shall prepare a balance
sheet and an inventory of assets. The Company shall notify its creditors within 10 days from
the date of the Company’s resolution for reduction of registered capital, and publish an
announcement of the same within 30 days from that date through designated media or the
National Enterprise Credit Information Publicity System. The creditors may request the
Company to settle debts or provide guarantees in respect thereof within 30 days of the receipt
of the above notice or within 45 days after the announcement is published if such notice is not
received. Where the Company reduces its registered capital, the amount of capital contribution
or shares shall be reduced correspondingly in proportion to the shares held by its shareholders,
unless otherwise provided by law or the Articles of Association.
When the Company issues new shares for the purpose of increasing its registered capital,
shareholders shall not be entitled to pre-emptive subscription rights, unless otherwise provided
for in the Articles of Association, or unless the resolution of the Shareholders’ general meeting
determines that shareholders shall be entitled to pre-emptive subscription rights.
Dissolution and Liquidation
The Company shall be dissolved according to the following reasons:
(1) the term of business stipulated in the Articles of Association has expired or other
events of dissolution specified in the Articles of Association have occurred;
(2) the Shareholders’ general meeting resolves to dissolve the Company;
(3) dissolution is necessary due to a merger or division of the Company;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-28 –


--- page 610 ---
(4) the business license is revoked, or the business is ordered to close down or is
revoked;
(5) where the Company encounters serious difficulties in its operation and management
and its continuance shall cause a significant loss to the interest of shareholders, and
where this cannot be resolved through other means, shareholders who hold 10% or
more of the voting rights of the Company may present a petition to the People’s
Court for dissolution of the Company.
Should the Company encounter any of the dissolution causes specified in the
aforementioned provisions, it shall publicize the cause(s) for dissolution through the National
Enterprise Credit Information Publicity System within 10 days.
If the Company is dissolved as a result of the provisions of items (1), (2), (4) and (5)
above, it shall be liquidated. The Directors shall be the obligors of liquidation of the Company
and shall form a liquidation committee to carry out liquidation within 15 days from the date
on which the cause of dissolution arises. The liquidation committee shall consist of the
Directors, unless it is otherwise required by the Articles of Association or the Shareholders’
general meeting resolves to elect another person.
The liquidation committee shall exercise the following functions and powers during the
liquidation period:
(1) to sort out the Company’s assets and prepare a balance sheet and an inventory of
assets respectively;
(2) to notify the creditors and publish announcements;
(3) to deal with and settle the outstanding business of the Company;
(4) to pay all outstanding taxes and taxes arising in the course of liquidation;
(5) to settle claims and debts;
(6) to allot the remaining assets of the Company after its debts have been paid off;
(7) to participation in civil lawsuits on behalf of the Company.
The liquidation committee shall notify creditors within 10 days after its establishment and
shall publish an announcement of the same within 60 days through designated media or the
National Enterprise Credit Information Publicity System. A creditor shall lodge his/her claim
with the liquidation committee within 30 days of the receipt of the above notice or within 45
days after the announcement is published if such notice is not received. When declaring their
claims, the creditors shall explain the matters related to their claims and provide supporting
materials. The liquidation committee shall register the creditor’s claims. During the period of
declaration of claims, the liquidation committee shall not settle any debts to creditors.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-29 –


--- page 611 ---
Upon liquidation of the Company’s property and the preparation of the balance sheet and
inventory of assets, the liquidation committee shall draw up a liquidation plan and submit it to
the Shareholders’ general meeting or the People’s Court for verification. The remaining assets
of the Company after payment of liquidation expenses, wages, social insurance expenses and
statutory compensation of employees, outstanding taxes and the Company’s debts shall be
distributed to shareholders in proportion to their shareholdings. During the liquidation period,
the Company shall continue to exist but shall not carry out any business activities unrelated to
the liquidation. The assets of the Company shall not be distributed to the shareholders before
the settlements are made in accordance with the preceding paragraph.
Upon completion of the liquidation, the liquidation committee shall prepare a liquidation
report to be submitted to the Shareholders’ general meeting or the People’s Court for
verification. The liquidation committee shall also file with the registration authority to apply
for the deregistration of the Company.
The members of the liquidation committee shall fulfill the liquidation duties and have
obligations of loyalty and diligence. Where the member of the liquidation committee neglect
to perform the liquidation duties and causes any loss to the Company, he/she shall be liable to
make compensation; where any members of the liquidation committee cause any loss to any
creditor with intention or due to gross negligence, he/she shall be liable to make compensation.
Amendment to the Articles of Association
The Company shall amend the Articles of Association in any of the following
circumstances:
(1) there is discrepancy between the provisions of the Articles of Association and the
revised laws and administrative regulations, following amendments to provisions of
the Company Law, or relevant laws, administrative regulations, department rules
and the securities regulatory rules of the place where the Company’s shares are
listed;
(2) the conditions of the Company have changed, and such change is not covered in the
Articles of Association;
(3) the Shareholders’ general meeting has resolved to amend the Articles of Association.
The amendments to the Articles of Association adopted by a resolution of the
Shareholders’ general meeting shall be submitted to competent authorities for approval if so
required. For any change in business registration, application shall be made for such change
according to laws.
The Board shall amend the Articles of Association in accordance with the resolution on
the amendments passed at the Shareholders’ general meeting and the opinions of the competent
authorities. The amendments to the Articles of Association, if required to be disclosed under
laws and regulations, shall be announced in accordance therewith.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-30 –


--- page 612 ---
FURTHER INFORMATION ABOUT OUR COMPANY
1. Incorporation of Our Company
Our Company was established as a limited liability company in the PRC on February 26,
2002 and converted into a joint stock company with limited liability in June 2011 under the
laws of the PRC and completed the listing of our A Shares on the Shenzhen Stock Exchange
(stock code: 002747.SZ) in March 2015. As of the Latest Practicable Date, the registered share
capital of our Company was RMB871,018,453.
Our Company has established a place of business in Hong Kong at 4/F, Jardine House, 1
Connaught Place, Central, Hong Kong and has registered as a non-Hong Kong company in
Hong Kong under Part 16 of the Companies Ordinance on June 24, 2025. Ms. Poon Pui Man
Hera ( ᆙ⪺͏), the joint company secretary of our Company, has been appointed as our
authorized representative for the acceptance of service of process in Hong Kong whose
correspondence address is the same as our place of business in Hong Kong.
As our Company was established in the PRC, its operations are subject to the relevant
laws and regulations of Chinese Mainland. A summary of the relevant aspects of laws and
regulations of Chinese Mainland and the Article of Association is set out in Appendices IV and
V to this prospectus, respectively.
2. Changes in Share Capital of Our Company
When our Company was converted into a joint stock liability company with limited
liability under the PRC Company Law, our initial registered capital was RMB90,000,000,
divided into 90,000,000 shares with a nominal value of RMB1.00 each.
Upon completion of our Company’s A Share listing in March 2015, the registered capital
of our Company increased from RMB90,000,000 to RMB120,000,000.
For further details on the historical change of share capital of our Company, see “History,
Development and Corporate Structure” in this prospectus. Save as disclosed above, there has
been no alteration in our share capital within two years immediately preceding the date of this
prospectus.
3. Resolutions of the Shareholders
Pursuant to the extraordinary general meeting of our Shareholders held on June 20 2025,
the following resolutions, among others, were passed by our Shareholders:
(a) the issue by our Company of H Shares of nominal value of RMB1.00 each and such
H Shares be listed on the Hong Kong Stock Exchange be issued;
(b) the number of H Shares to be issued shall not be more than 15% of the total issued
share capital of our Company as enlarged by the Global Offering, and the grant to
the underwriters (or their representatives) of the Over-allotment Option of not more
than 15% of the number of H Shares issued pursuant to the Global Offering;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-1 –


--- page 613 ---
(c) subject to the completion of the Global Offering, the adoption of the Articles of
Association which shall become effective on the Listing Date, and the authorization
to the Board to amend the Articles of Association in accordance with the
requirements of the relevant laws and regulations and the Listing Rules; and
(d) authorization of our Board and its authorized person to handle all relevant matters
relating to, among other things, the issue and listing of the H Shares.
FURTHER INFORMATION ABOUT THE BUSINESS OF OUR COMPANY
1. Summary of Material Contracts
We have entered into the following contracts (not being contracts entered into in the
ordinary course of business) within the two years immediately preceding the date of this
prospectus that are or may be material:
(a) an agreement for issuance of shares and payment of cash to acquire assets (ٰ
ᒅ൯༟ପ՘ᙄdated November 15, 2024 (the “ Asset Purchase
Agreement ”) entered into between our Company and Nanjing Chemical Fibre Co.,
Ltd. (ʮ̡)( “ Nanjing Chemical Fibre ”), pursuant to which our
Company agreed to, among others, transfer its 3.00% equity interest in Nanjing
Technical Equipment Manufacture Co., Ltd. (ʮ̡)t o
acquire A shares of Nanjing Chemical Fibre;
(b) a supplemental agreement to the Asset Purchase Agreement dated May 12, 2025
entered into between our Company and Nanjing Chemical Fibre, pursuant to which
Nanjing Chemical Fibre agreed to transfer 10,547,105 A shares of Nanjing Chemical
Fibre to our Company;
(c) a cornerstone investment agreement dated February 25, 2026 entered into among our
Company, Harvest International Premium V alue (Secondary Market) Fund SPC
acting on behalf of and for the account of Harvest Oriental SP , and Huatai Financial
Holdings (Hong Kong) Limited, with respect to a subscription of H Shares at the
Offer Price in the aggregate amount of the Hong Kong dollars equivalent of US$20
million (exclusive of the brokerage, AFRC transaction levy, SFC transaction levy
and Stock Exchange trading fee in respect of such number of H Shares);
(d) a cornerstone investment agreement dated February 25, 2026 entered into among our
Company, Hengtong Optic-electric International Co., Limited (ʮ
̡), and Huatai Financial Holdings (Hong Kong) Limited, with respect to a
subscription of H Shares at the Offer Price in the aggregate amount of the Hong
Kong dollars equivalent of US$15 million (exclusive of the brokerage, AFRC
transaction levy, SFC transaction levy and Stock Exchange trading fee in respect of
such number of H Shares);
(e) a cornerstone investment agreement dated February 25, 2026 entered into among our
Company, Dream’ee (Hong Kong) Open-ended Fund Company, and Huatai
Financial Holdings (Hong Kong) Limited, with respect to a subscription of H Shares
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-2 –


--- page 614 ---
at the Offer Price in the aggregate amount of HK$80 million (exclusive of the
brokerage, AFRC transaction levy, SFC transaction levy and Stock Exchange trading
fee in respect of such number of H Shares);
(f) a cornerstone investment agreement dated February 25, 2026 entered into among our
Company, Deep Source Holdings Limited (ʮ̡), and Huatai
Financial Holdings (Hong Kong) Limited, with respect to a subscription of H Shares
at the Offer Price in the aggregate amount of the Hong Kong dollars equivalent of
US$10 million (exclusive of the brokerage, AFRC transaction levy, SFC transaction
levy and Stock Exchange trading fee in respect of such number of H Shares);
(g) a cornerstone investment agreement dated February 25, 2026 entered into among our
Company, Haitian Huayuan (Singapore) Pte. Ltd., and Huatai Financial Holdings
(Hong Kong) Limited, with respect to a subscription of H Shares at the Offer Price
in the aggregate amount of HK$38.5 million (inclusive of the brokerage, AFRC
transaction levy, SFC transaction levy and Stock Exchange trading fee in respect of
such number of H Shares);
(h) a cornerstone investment agreement dated February 25, 2026 entered into among our
Company, New Fortune Holdings Group Limited (ʮ̡), and
Huatai Financial Holdings (Hong Kong) Limited, with respect to a subscription of
H Shares at the Offer Price in the aggregate amount of HK$30 million (inclusive of
the brokerage, AFRC transaction levy, SFC transaction levy and Stock Exchange
trading fee in respect of such number of H Shares);
(i) a cornerstone investment agreement dated February 25, 2026 entered into among our
Company, Qianhai Hezhong Investment Holding Limited (ʮ
̡), and Huatai Financial Holdings (Hong Kong) Limited, with respect to a
subscription of H Shares at the Offer Price in the aggregate amount of the Hong
Kong dollars equivalent of US$3 million (exclusive of the brokerage, AFRC
transaction levy, SFC transaction levy and Stock Exchange trading fee in respect of
such number of H Shares); and
(j) the Hong Kong Underwriting Agreement.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-3 –


--- page 615 ---
2. Intellectual Property Rights
Trademarks
As of the Latest Practicable Date, we have registered the following trademarks, which we
considered to be material to our business:
No. Trademark Class
Registration
Number
Registered
Owner
Date of
Registration
Place of
Registration
1 /H1118/H1118
 9 43925953 Our Company January 21, 2021 PRC
2 /H1118/H1118
 7 43913754 Our Company March 21, 2021 PRC
3 /H1118/H1118
 7 27348980 Our Company November 7, 2019 PRC
4 /H1118/H1118
 7 26718595 Our Company October 28, 2019 PRC
5 /H1118/H1118
 7 11190446 Our Company November 28,
2023
PRC
6 /H1118/H1118
 9 8538861 Our Company September 21,
2021
PRC
7 /H1118/H1118
 9 8538842 Our Company August 14, 2021 PRC
8 /H1118/H1118
 7 5189674 Our Company March 28, 2019 PRC
9 /H1118/H1118
 7 3202392 Our Company January 21, 2024 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-4 –


--- page 616 ---
No. Trademark Class
Registration
Number
Registered
Owner
Date of
Registration
Place of
Registration
10 /H1118/H1118
 7 6788952 Shanghai Prex
Mfg. Co., Ltd.
September 28,
2022
PRC
11 /H1118/H1118
 7 49113837 Jiangsu Hangding
Intelligent
Equipment Co.,
Ltd.
June 7, 2021 PRC
12 /H1118/H1118
7 33388832 Jiangsu Hangding
Intelligent
Equipment Co.,
Ltd.
June 7, 2019 PRC
13 /H1118/H1118
7 33378379 Jiangsu Hangding
Intelligent
Equipment Co.,
Ltd.
May 7, 2020 PRC
14 /H1118/H1118
7 37810116 Chongqing Tizhuo
Intelligent
Equipment
Technology Co.,
Ltd.
June 7, 2020 PRC
15 /H1118/H1118
1 76012385 Carl Cloos
Robotics
Technology
(China) Co.,
Ltd.
September 7,
2024
PRC
16 /H1118/H1118
1, 6, 7, 9, 10,
42, 44
306933510 Our Company June 17, 2025 Hong Kong
17 /H1118/H1118
 1, 6, 7, 9, 10,
42, 44
306933510 Our Company June 17, 2025 Hong Kong
18 /H1118/H1118
 1, 6, 7, 9, 10,
42, 44
306933510 Our Company June 17, 2025 Hong Kong
19 /H1118/H1118
 7, 9 306933574 Our Company June 17, 2025 Hong Kong
20 /H1118/H1118
 7, 9 306933574 Our Company June 17, 2025 Hong Kong
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-5 –


--- page 617 ---
Patents
As of the Latest Practicable Date, we have registered the following patents which we
consider to be material to our business:
No. Patent Description Patentee
Place of
registration Class of Patent Patent Number
1 /H1118/H1118/H1118A multi-axis robot system
motion planning method,
electronic device and
medium ( ɓ၇εൿዚኜɛӻ
eཥɿண௪
ʿʧሯ)
Our Company and
Estun Robot
PRC Invention patent ZL2023110524731
2 /H1118/H1118/H1118Motor and transmission
mechanism fault prediction
system based on motion
control system architecture
(ཥ
ღཫ಻ӻ
୕)
Our Company PRC Invention patent ZL2022106206125
3 /H1118/H1118/H1118A vision-based robot-guided
assembly robot method
(ዚኜɛˏኬ
ج)
Our Company and
Estun Robot
PRC Invention patent ZL2021114251310
4 /H1118/H1118/H1118An emergency stop safety
system for industrial robots
(৾τΌӻ
୕)
Our Company PRC Utility model
patent
ZL2021218146427
5 /H1118/H1118/H1118A hybrid space-based
transition trajectory
planning method for
industrial robots (׵
ʈุዚኜɛཀನ
ج)
Our Company and
Estun Robot
PRC Invention patent ZL2020109782029
6 /H1118/H1118/H1118A control method for stopping
the slide at top dead center
in mechanical presses ( ɓ၇
ٙ
ج)
Our Company PRC Invention patent ZL2019113885472
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-6 –


--- page 618 ---
No. Patent Description Patentee
Place of
registration Class of Patent Patent Number
7 /H1118/H1118/H1118Robot collision detection
device and collision
detection method ( ɓ၇ዚኜ
ɛຠᅜᏨ಻ༀໄʿຠᅜᏨ಻
ج)
Our Company PRC Invention patent ZL2019113949879
8 /H1118/H1118/H1118Tooth-shoe separated
permanent magnet motor
stator core, permanent
magnet motor and assembly
method ( ኉ཀྵʱᕎό͑ှཥ
e͑ှཥዚʿଡ଼
ج)
Our Company PRC Invention patent ZL2019110821746
9 /H1118/H1118/H1118A permanent magnet brake for
permanent magnet motors
and permanent magnet
brake motor (͑ှ
͑ှՓਗኜʿ͑ှՓ
ਗཥዚ)
Our Company PRC Invention patent ZL2019107674633
10/H1118/H1118/H1118Vibration suppression method
for servo motor and load
multi-stage transmission
systems (ࠋ
ਗҵՓ
ج)
Our Company PRC Invention patent ZL2018106063093
11/H1118/H1118/H1118Real-time online prediction
method for dynamic
junction temperature of
semiconductor power
devices ( ̒ኬ᜗̌ଟኜ΁ਗ
ج)
Our Company PRC Invention patent ZL2017112736202
12/H1118/H1118/H1118A safe torque off (STO)
circuit and system ( ɓ၇τ
Όᔷॉᗫᓙཥ༩ʿӻ୕)
Our Company PRC Invention patent ZL2017102646816
13/H1118/H1118/H1118A fault detection method for
joint reducers in heavy-duty
industrial robots (༱
ღ
ج)
Hebei University of
Technology,
Estun Robot and
Hangzhou
Xinkong
Automation
Technology Co.,
Ltd.
PRC Invention patent ZL2024111246831
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-7 –


--- page 619 ---
No. Patent Description Patentee
Place of
registration Class of Patent Patent Number
14/H1118/H1118/H1118Heavy-duty robot reducer fault
diagnosis method, diagnosis
system, equipment and
medium (༱ዚኜɛಯ஺ኜ
eൢᓙӻ୕e
ண௪ʿʧሯ)
Hebei University of
Technology,
Estun Robot and
Hangzhou
Xinkong
Automation
Technology Co.,
Ltd.
PRC Invention patent ZL2024111243689
15/H1118/H1118/H1118A predictive monitoring and
maintenance method for
heavy-duty industrial robot
joints (༱ʈุዚኜɛ
ج)
Hebei University of
Technology,
Estun Robot and
Hangzhou
Xinkong
Automation
Technology Co.,
Ltd.
PRC Invention patent ZL2024 111107947
16/H1118/H1118/H1118Robotic arm trajectory
accuracy improvement
method, equipment, product
and medium (ࠐ
eண௪eପ
ձʧሯ)
Estun Robot PRC Invention patent ZL202310636554X
17/H1118/H1118/H1118Six-axis industrial robot ( ʬᗫ
ືʈุዚኜɛ)
Estun Robot PRC Design patent ZL2023301962831
18/H1118/H1118/H1118A vision-based robot collision
warning method (׵
ج)
Our Company and
Estun Robot
PRC Invention patent ZL2022111010868
19/H1118/H1118/H1118A vibration suppression
method for the stopping
process of industrial robots
(ݬ
ج)
Our Company and
Estun Robot
PRC Invention patent ZL2020108351105
20/H1118/H1118/H1118A speed planning method for
bending robot synchronous
following in bending
applications (ұ
஺
ج)
Estun Robot PRC Invention patent ZL2019113885260
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-8 –


--- page 620 ---
No. Patent Description Patentee
Place of
registration Class of Patent Patent Number
21/H1118/H1118/H1118A method for monitoring area
boundary motion planning
of industrial robots ( ɓ၇ʈ
༶ਗ
ج)
Estun Robot PRC Invention patent ZL2019107829988
22/H1118/H1118/H1118An industrial robot collision
detection method ( ɓ၇ʈุ
ج)
Estun Robot PRC Invention patent ZL2019106533055
23/H1118/H1118/H1118Motor rotor structure and
high-performance servo
motor ( ɓ၇ཥዚᔷɿഐ࿴ʿ
ཥዚ)
Estun Robot PRC Invention patent ZL2023103583754
24/H1118/H1118/H1118A special differential signal
encoder breakage quick
detection circuit for robots
(໮ᇜ
ᇁኜᓙᇞҞ஺Ꮸ಻ཥ༩)
Estun Robot PRC Invention patent ZL2017110647628
25/H1118/H1118/H1118A hollow small arm and wrist
structure for low-load
industrial robots (ࠋ
ʃᑑձഡ
௅ഐ࿴)
Estun Robot PRC Invention patent ZL2014100371444
26/H1118/H1118/H1118A force/torque sensor-less soft
floating control method for
robotic arms ( ɓ၇ೌɢ/ɢॉ
ෂชኜዚ૛ᑑழओਗછՓ˙
ج)
Our Company and
Estun Robot
PRC Invention patent ZL2020115158066
27/H1118/H1118/H1118A weaving trajectory planning
method for welding robots
(༦
ج)
Our Company and
Estun Robot
PRC Invention patent ZL2020109112120
28/H1118/H1118/H1118A vibration suppression
method for the stopping
process of industrial robots
(ݬ
ج)
Our Company and
Estun Robot
PRC Invention patent ZL2020108351105
29/H1118/H1118/H1118A weaving trajectory planning
method for welding robots
(༦
ج)
Our Company and
Estun Robot
PRC Invention patent ZL2020109112120
30/H1118/H1118/H1118An automatic mesh cloth
pasting equipment ( ɓ၇І
̺ண௪)
Estun Robot PRC Invention patent ZL2017106596765
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-9 –


--- page 621 ---
Copyrights
As of the Latest Practicable Date, we have registered the following Copyrights which we
consider to be material to our business:
No. Copyright Registered owner Registration number
Place of
registration
1 /H1118/H1118/H1118ESTUN robot integrated drive and
control system software (౶཭ዚ
ኜɛᚨછɓ᜗છՓӻ୕ழ΁)
Our Company 2024SR1204067 PRC
2 /H1118/H1118/H1118ESTUN robot controller software
based on real-time Linux system
(ࣛLinuxዚኜ
ɛછՓኜழ΁)
Our Company 2022SR1367471 PRC
3 /H1118/H1118/H1118ESTUN bending machine electro-
hydraulic servo hybrid drive pump
control system software (౶཭ұ
છӻ୕છ
Փழ΁)
Our Company 2015SR208398 PRC
4 /H1118/H1118/H1118ESTUN intelligent module heating
control software (౶཭౽ঐᅼଡ଼
̋ᆠછՓழ΁)
Estun Intelligent
(Jiangsu)
2024SR0941967 PRC
5 /H1118/H1118/H1118ESTUN automation intelligent system
super wire pulling software (౶
ᇞழ΁)
Estun Intelligent
(Jiangsu)
2024SR1346523 PRC
6 /H1118/H1118/H1118An intelligent control software for
automated wire gluing (ᇞІ
ਗʷ෩ᇭ౽ঐછՓழ΁)
Estun Intelligent
(Jiangsu)
2024SR1909071 PRC
7 /H1118/H1118/H1118ESTUN robot laser welding
application software (౶཭ዚኜɛ
ዧΈଔટᏐ͜ழ΁)
Estun Intelligent
(Jiangsu)
2024SR1110085 PRC
8 /H1118/H1118/H1118ESTUN robot arc welding application
integrated system control software
(ଔᏐ͜ණϓӻ୕છ
Փழ΁)
Estun Intelligent
(Jiangsu)
2024SR1083080 PRC
9 /H1118/H1118/H1118ESTUN bending robot dedicated
offline programming software (ࡾ
౶཭ұᛃዚኜɛਖ਼͜ᕎᇞᇜ೻ழ΁)
Estun Intelligent
(Jiangsu)
2024SR1083075 PRC
10 /H1118/H1118ESTUN palletizing robot motion
control software (౶཭ᇁ᪓ዚኜ
ɛ༶ਗછՓழ΁)
Our Company and
Estun Intelligent
(Jiangsu)
2024SR0890315 PRC
11 /H1118/H1118ESTUN heavy-duty robot control
system software (༱ዚኜ
ɛછՓӻ୕ழ΁)
Estun Intelligent
(Jiangsu)
2024SR0724832 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-10 –


--- page 622 ---
No. Copyright Registered owner Registration number
Place of
registration
12 /H1118/H1118ESTUN stamping-specific robot
application software (౶཭ላᏀਖ਼
͜ዚኜɛᏐ͜ழ΁)
Estun Intelligent
(Jiangsu)
2024SR0352901 PRC
13 /H1118/H1118ESTUN robot digital twin software
(౶཭ዚኜɛᅰοᛀ͛ழ΁)
Estun Intelligent
(Jiangsu)
2023SR1468421 PRC
14 /H1118/H1118Operation and maintenance edge
computing software (standard
edition) (ၑழ΁(ᅺ
و))
Estun Intelligent
(Jiangsu)
2023SR0616824 PRC
15 /H1118/H1118ESTUN small and medium-load robot
control system software (౶཭ʕ
༱ዚኜɛછՓӻ୕ழ΁)
Estun Intelligent
(Jiangsu)
2021SR1530658 PRC
16 /H1118/H1118ESTUN industrial robot
end-effector identification software
(౶཭ʈุዚኜɛ͋၌ʈՈ፫ᗆழ
΁)
Estun Intelligent
(Jiangsu)
2021SR0590107 PRC
17 /H1118/H1118ESTUN robot spot welding
application software (౶཭ዚኜɛ
ᓃଔᏐ͜ழ΁)
Estun Intelligent
(Jiangsu)
2017SR730076 PRC
18 /H1118/H1118ESTUN robot vision system software
(౶཭ዚኜɛൖᙂӻ୕ழ΁)
Estun Intelligent
(Jiangsu)
2016SR209494 PRC
19 /H1118/H1118ESTUN SCARA robot motion control
software (౶཭SCARA ዚኜɛ༶
ਗછՓழ΁)
Our Company and
Estun Intelligent
(Jiangsu)
2012SR119766 PRC
20 /H1118/H1118Teaching-free welding system
(еͪ઺ଔટӻ୕)
Carl Cloos (China) 2025SR0052254 PRC
21 /H1118/H1118ESTUN intelligent sorting system
software (౶཭౽ঐʱౝӻ୕ழ
΁)
Estun Intelligent 2025SR0052235 PRC
22 /H1118/H1118An intelligent control software for
robot 3D vision palletizing
(ɓ၇ዚኜɛ3Dൖᙂᇁ᪓౽ঐછՓழ
΁)
Estun Intelligent 2025SR0052159 PRC
23 /H1118/H1118QE arc welding professional software
(QEଔਖ਼ุழ΁)
Nanjing Cloos
Robotics
Automation
Technology Co.,
Ltd.
2023SR1686114 PRC
24 /H1118/H1118QP arc welding upgrade software (QP
ଔʺॴழ΁)
Nanjing Cloos
Robotics
Automation
Technology Co.,
Ltd.
2023SR1686147 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-11 –


--- page 623 ---
No. Copyright Registered owner Registration number
Place of
registration
25 /H1118/H1118ESTUN corrugated plate rolling
machine CNC system (७
ዚᅰછӻ୕)
Estun Software 2025SR0024687 PRC
26 /H1118/H1118ESTUN multi-function torsion axis
bending machine CNC system (ࡾ
౶཭ε̌ঐҩൿұᛃዚᅰછӻ୕)
Estun Software 2025SR0024500 PRC
27 /H1118/H1118ESTUN servo press CNC system (ࡾ
Ꮐɢዚᅰછӻ୕)
Estun Software 2025SR0025405 PRC
28 /H1118/H1118ESTUN industrial robot cloud
monitoring software (౶཭ʈุዚ
ኜɛථ၌္಻ழ΁)
Estun Software 2024SR1038151 PRC
29 /H1118/H1118ESTUN robot cloud service software
(ਕழ΁)
Estun Software 2024SR0891384 PRC
30 /H1118/H1118ESTUN motion control automation
testing software (౶཭༶ਗછՓІ
ਗʷ಻༊ழ΁)
Estun Software 2023SR1686316 PRC
FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
1. Disclosure of Interests
(a) Interests of our Directors, and the chief executive of our Company
Save as disclosed below, immediately following completion of the Global Offering
(assuming the Over-allotment Option is not exercised and options granted under the 2025 Share
Option Scheme are not exercised), so far as our Directors are aware, none of our Director and
chief executive has any interest or short positions in our Shares, underlying Shares or
debentures of our Company or any associated corporations (within the meaning of Part XV of
the SFO) which will have to be notified to our Company and the Hong Kong Stock Exchange
pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions
which they are taken or deemed to have under such provisions of the SFO), or which will be
required, pursuant to section 352 of the SFO, to be entered in the register referred to therein,
or which will be required to be notified to our Company and the Hong Kong Stock Exchange
pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers
contained in the Listing Rules.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-12 –


--- page 624 ---
Name Position Nature of Interest
Number and class
of Shares held
Approximate
percentage
of
shareholding
in the
relevant
class of
Shares
immediately
prior to the
Global
Offering (1)
Approximate
percentage
of
shareholding
in the total
share capital
of our
Company
after the
Global
Offering (2)
Mr. Wu /H1118/H1118/H1118/H1118/H1118Executive Director,
chairman of the
Board and chief
strategic officer
Beneficial Owner 110,996,700 12.74% 11.47%
Interest in
Controlled
Corporation
254,894,742 29.26% 26.34%
Mr. Wu Kan /H1118/H1118Executive Director,
vice chairman of
the Board and
general manager
Beneficial Owner 1,263,033 0.15% 0.13%
Mr. Zhu
Chunhua /H1118/H1118/H1118
Executive Director
and deputy
general manager
Beneficial owner 68,600 0.008% 0.007%
Others
(2) 40,000 0.005% 0.004%
Mr. Zhou
Ailin /H1118/H1118/H1118/H1118/H1118
Executive Director
and deputy
general manager
Beneficial owner 164,500 0.02% 0.017%
Others
(2) 40,000 0.005% 0.004%
Mr. He
Lingjun /H1118/H1118/H1118
Executive Director,
deputy general
manager and
financial director
Beneficial owner
(2) 180,000 0.02% 0.019%
Others (2) 60,000 0.007% 0.006%
Ms. Chen
Yinlan /H1118/H1118/H1118/H1118
Non-executive
Director
Beneficial owner 58,000 0.007% 0.006%
Others (2) 25,160 0.003% 0.003%
Note(s):
(1) The calculation is based on the total number of 871,018,453 A Shares in issue as of the Latest Practicable Date.
(2) The calculation is based on the total number of 871,018,453 A Shares in issue as of the Latest Practicable Date
and 96,780,000 H Shares (assuming the Over-allotment Option is not exercise and options granted under the
2025 Share Option Scheme are not exercised upon Listing).
(3) Each of Mr. Zhu Chunhua, Mr. Zhou Ailin, Mr. He Lingjun and Ms. Chen Yinlan was a grantee under the
existing A share employee incentive scheme adopted in 2022. The underlying A shares are fully vested and will
be unlocked in April 2026.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-13 –


--- page 625 ---
(b) Interests of the Substantial Shareholders
For the information on the persons who will, immediately following the completion of the
Global Offering, have interests or short positions in our Shares or underlying Shares which
would be required to be disclosed to our Company and the Hong Kong Stock Exchange under
the provisions of Divisions 2 and 3 of Part XV of the SFO, please refer to the section headed
“Substantial Shareholders.”
2. Service Contracts
We have entered into a contract with each of our Directors in respect of, among other
things, compliance with relevant laws and regulations, the Articles of Association and
applicable provisions on arbitration.
Each of our Directors has entered into a service contract with our Company. The principal
particulars of these service contracts comprise (a) a term of three years commencing from the
date of appointment; and (b) termination provisions in accordance with their respective terms.
Our Directors may be re-appointed subject to Shareholders’ approval.
Save as disclosed above, none of our Directors has or is proposed to have entered into any
service contract with any member of our Group (excluding contracts expiring or determinable
by any member of our Group within one year without payment of compensation other than
statutory compensation).
3. Remuneration of Directors and Supervisors
Save as disclosed in the section headed “Directors and Senior Management” and
“Appendix I — Accountants’ Report — Notes to The Historical Financial Information — 8.
Directors’ and Supervisors’ Emoluments”, for the years ended December 31, 2022, 2023, 2024
and the nine months ended September 30, 2025, none of our Directors received other
remunerations of benefits in kind from us.
4. Employee Incentive Scheme
The following is a summary of the principal terms of the Employee Incentive Schemes,
namely the 2025 Share Option Scheme and the 2025 Restricted Share Scheme, and the details
regarding the outstanding options granted under the 2025 Share Option Scheme. Since no
further options or awards will be granted by our Company pursuant to the Employee Incentive
Schemes after the Listing, the provisions of Chapter 17 of the Listing Rules do not apply to the
terms of the Employee Incentive Schemes.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-14 –


--- page 626 ---
(a) 2025 Share Option Scheme
(i) Purpose
The purpose of the 2025 Share Option Scheme is to further enhance the Company’s
long-term incentive mechanism, attract and retain outstanding talent, and fully mobilize the
enthusiasm of the Company’s key staff. The scheme aims to effectively align the interests of
shareholders, the Company, and the key staff members, ensuring that all parties focus on the
Company’s long-term development.
(ii) Source of the 2025 Share Option Scheme
Option granted pursuant to the 2025 Share Option Scheme is funded by A Shares to be
allotted and issued by our Company.
(iii) Participants
The participants of the 2025 Share Option Scheme are core management personnel (i.e.,
directors and senior management), key technical staff and any other personnel that the Board
consider to be appropriate and necessary to incentivize.
The scope of eligible participants excludes Directors, members of senior management,
shareholders who individually or collectively hold 5% or more of the shares of our Company
and their respective spouse, parents and children.
(iv) Scheme limit
The total number of underlying A shares which may be issued upon the exercise of all
outstanding options granted under the 2025 Share Option Scheme shall be 3,500,000 A Shares.
The aforementioned scheme limit shall be adjusted in the event of any alteration in the capital
structure of our Company whilst any option remains exercisable, to proportionally reflect any
capitalization of profits or reserves, bonus issue, rights issue, sub-division, consolidation of
shares, dividend distribution, etc. of our Company.
(v) Maximum entitlement of a grantee
Any grant of the options to any grantees in respect of all the options granted to such
person under all validly subsisting share incentive schemes of the Company in aggregate shall
not exceed 1% of the shares in issue.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-15 –


--- page 627 ---
(vi) Duration of the 2025 Share Option Scheme
The 2025 Share Option Scheme shall be valid and effective for the period of time
commencing from the date of grant of options, i.e. June 20, 2025 (the “ Effective Date ”) and
expiring on the day when all options granted to the eligible participants under the 2025 Share
Option Scheme are exercised or cancelled, which shall in any event be no later than the date
which is 48 months after the Effective Date.
(vii) Transferability of options
The options granted under the 2025 Share Option Scheme shall not be transferred or used
as guarantee or for repayment of debts.
(viii) Outstanding options granted under the 2025 Share Option Scheme
As of the Latest Practicable Date, a total of 128 grantees have been granted outstanding
options under the 2025 Share Option Scheme to subscribe for 3,320,000 A Shares in aggregate,
representing 0.34% of the total issued shares immediately after the completion of the Global
Offering (assuming the Over-allotment Option is not exercised and the options granted under
the 2025 Share Option Scheme are not exercised). All the outstanding options under the 2025
Share Option Scheme were granted on June 20, 2025 and our Company will not grant any
further options under the 2025 Share Option Scheme between the Latest Practicable Date and
the Listing Date and any time after the Listing.
No consideration was payable for the grant of the options. Assuming full vesting and
exercise of all outstanding options under the 2025 Share Option Scheme, the shareholding of
our shareholders immediately following completion of the Global Offering (assuming the
Over-allotment Option is not exercised) will be diluted by a maximum of approximately
0.32%.
As our Group incurred losses for the year ended December 31, 2024, the dilutive potential
Shares, namely the options under the 2025 Share Option Scheme, were not included in the
calculation of diluted loss per share as their inclusion would be anti-dilutive. Accordingly,
diluted loss per share for the year ended December 31, 2024 was the same as basic loss per
share for the corresponding period.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-16 –


--- page 628 ---
As of the Latest Practicable Date, no option was granted to any Director, senior
management or connected persons of the Company. The table below sets out the details of
outstanding options granted to the 128 grantees.
Range of
outstanding
A Shares for
Options granted
Total
number of
grantees
Total
number of
outstanding
A Shares for
Options
granted
Exercise
price
Date of
grant
Approximate
percentage of
enlarged issued
share capital of
our Company
immediately after
the completion of
the Global
Offering
(1)
Vesting
schedule
Exercise
period
1 – 10,000 /H1118/H1118/H1118/H1118/H111800 See Note 2
below
June 20,
2025
0.00% See Note 3
below
See Note 4
below
10,001 – 20,000 /H1118/H1118 18 360,000 0.04%
20,001 – 30,000 /H1118/H1118 109 2,910,000 0.30%
30,001 – 40,000 /H1118/H1118 0 0 0.00%
40,001 or above /H1118/H1118 1 50,000 0.0052%
Notes:
(1) The calculation is based on the total number of 871,018,453 A Shares in issue as of the Latest Practicable Date
and 96,780,000 H Shares (assuming the Over-allotment Option is not exercise) in issue upon Listing.
(2) The exercise price is RMB20.53.
(3) The options will be vested in three batches, namely 30%, 30% and 40% on (i) 12-24 months, (ii) 24-36 months
and (iii) 36-48 months, respectively, commencing from the grant date of the 2025 Share Option Scheme, i.e.,
June 20, 2025.
(4) The options will be exercised in three batches upon vesting, namely 30%, 30% and 40% on (i) 12-24 months,
(ii) 24-36 months and (iii) 36-48 months, respectively, commencing from the grant date of the 2025 Share
Option Scheme, i.e., June 20, 2025.
We have applied to the Stock Exchange and SFC, respectively for (i) a waiver from strict
compliance with the disclosure requirements under Rule 17.02(1)(b) of, and paragraph 27 of
Appendix D1A to, the Listing Rules; and (ii) a certificate of exemption under Section 342A of
the Companies (Winding Up and Miscellaneous Provisions) Ordinance exempting the
Company from strict compliance with the disclosure requirements under paragraph 10(d) of
Part I of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance. See “Waivers from Strict Compliance with the Hong Kong Listing Rules and
Exemption from Compliance with the Companies (Winding Up and Miscellaneous Provisions)
Ordinance — Waiver in respect of the 2025 Share Option Scheme.”
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-17 –


--- page 629 ---
(b) 2025 Restricted Share Scheme
(i) Purpose
The purpose of the 2025 Restricted Share Scheme is to improve our Group’s corporate
governance structure and incentivize our Group’s management and key employees to achieve
a sustained and long-term development of our Group. The 2025 Restricted Share Scheme is
implemented to attract, retain and motivate management and key employees of our Group, and
to promote the success of our Group’s business by providing them with appropriate incentives
based on fulfilling certain performance goals.
(ii) Administration
The 2025 Restricted Share Scheme is executed by the Board subject to the authorization
by the Shareholders.
(iii) Eligibility and Participation
The participants of the 2025 Restricted Share Scheme are core management personnel
(i.e., directors and senior management), key technical staff and any other personnel that the
Board consider to be appropriate and necessary to incentivize.
The scope of eligible participants excludes Directors, members of senior management,
shareholders who individually or collectively hold 5% or more of the shares of our Company
and their respective spouse, parents and children.
(iv) Source and Maximum Number of Shares
The shares underlying the 2025 Restricted Share Scheme shall be A Shares to be allotted
and issued by our Company.
(v) Maximum entitlement of Participants
Any grant of the awards to any grantees in respect of all the awards granted to such person
under all validly subsisting share incentive schemes of the Company in aggregate shall not
exceed 1% of the shares in issue.
(vi) Terms of the Scheme
The 2025 Restricted Share Scheme shall be valid and effective for the period of time
commencing from the date of grant of awards, i.e. June 20, 2025 (the “ Effective Date ”) and
expiring on the day when all awards granted under the 2025 Restricted Share Scheme are
unlocked or repurchased, which shall in any event be no later than the date which is 48 months
after the 2025 Scheme Effective Date.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-18 –


--- page 630 ---
(vii) Performance Targets and Lock-up
Subject to fulfillment of the performance targets, the awards held by the participants shall
be unlocked in three installments in the proportion of 30%, 30% and 40%, commencing from
12 months, 24 months and 36 months, respectively, after the date of grant.
(viii) Details of the Awards granted
As of the Latest Practicable Date, the aggregate number of A Shares granted under the
2025 Restricted Share Scheme was 4,000,000, representing approximately 0.46% of the issued
share capital of our Company as at the Latest Practicable Date and approximately 0.41% of the
total issued share capital of our Company immediately following the completion of the Global
Offering (assuming the Over-allotment Option is not exercised and the options granted under
the 2025 Share Option Scheme are not exercised). As of the Latest Practicable Date, none of
the granted restricted A Shares were released from the lock-up.
5. Disclaimers
Save as disclosed in this prospectus:
(a) none of our Directors or any of the parties listed in “Other Information — 5.
Qualifications of Experts” of this Appendix is:
(i) interested in our promotion, or in any assets which have been, within two years
immediately preceding the date of this prospectus, acquired or disposed of by
or leased to us, or are proposed to be acquired or disposed of by or leased to
any member of our Company; or
(ii) materially interested in any contract or arrangement subsisting at the date of
this prospectus which is significant in relation to our business;
(b) save in connection with the Hong Kong Underwriting Agreement and the
International Underwriting Agreement, none of the parties listed in “Other
Information — 5. Qualifications of Experts” of this Appendix:
(c) none of our Directors is a director or employee of a company that has an interest in
the share capital of our Company which, once the H Shares are listed on the Hong
Kong Stock Exchange, would have to be disclosed pursuant to Divisions 2 and 3 of
Part XV of the SFO; and
(d) so far as is known to our Directors, none of our Directors or their respective close
associates (as defined under the Listing Rules) or Shareholders who owns more than
5% of the issued shares of our Company has any interests in the five largest
customers of the continuing operation or the five largest suppliers of the continuing
operation of our Group.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-19 –


--- page 631 ---
OTHER INFORMATION
1. Estate duty
Our Directors have been advised that no material liability for estate duty is likely to
impose on our Company or any of our subsidiaries under the laws of the PRC.
2. Litigation
As of the Latest Practicable Date, no member of our Group was involved in any litigation,
arbitration or claim of material importance, and, so far as we are aware, no litigation,
arbitration or claim of material importance is pending or threatened against any member of our
Group, which would have a material adverse effect on our financial condition or results of
operations, taken as a whole.
3. Sole Sponsor
The Sole Sponsor has made an application on behalf of our Company to the Hong Kong
Stock Exchange for the listing of, and permission to deal in, our H Shares. All necessary
arrangements have been made to enable the securities to be admitted into CCASS.
The Sole Sponsor satisfies the independence criteria applicable to sponsor set out in Rule
3A.07 of the Listing Rules, and the Sole Sponsor will receive a fee of US$450,000 to act as
the sponsor to our Company in connection with the Global Offering.
4. Preliminary expenses
As of the Latest Practicable Date, our Company has not incurred material preliminary
expenses.
5. Qualifications of Experts
The qualifications of the experts (as defined under the Listing Rules and the Companies
(Winding Up and Miscellaneous Provisions) Ordinance) who have given opinions and/or
advice in this prospectus are as follows:
Name Qualifications
Huatai Financial Holdings
(Hong Kong) Limited /H1118/H1118/H1118/H1118/H1118
A corporation licensed to conduct type 1 (dealing in
securities), type 2 (dealing in futures contracts), type 3
(leveraged foreign exchange trading), type 4 (advising on
securities), type 6 (advising on corporate finance), type 7
(providing automated trading services) and type 9 (asset
management) of the regulated activities under the SFO
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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Name Qualifications
Zhong Lun Law Firm /H1118/H1118/H1118/H1118/H1118/H1118PRC legal advisor
KPMG /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Certified Public Accountants
Public Interest Entity Auditor registered in accordance with
the Accounting and Financial Reporting Council Ordinance
Frost & Sullivan (Beijing)
Inc., Shanghai Branch Co. /H1118
Independent industry consultant
Ashurst Horitsu Jimusho
Gaikokuho Kyodo Jigyo /H1118/H1118
International Sanctions Legal Advisers
6. Consents
Each of the experts as referred to in the paragraph headed “5. Qualifications of Experts”
of this Appendix has given and has not withdrawn its respective written consents to the issue
of this prospectus with the inclusion of certificates, letters, opinions or reports and the
references to its name included herein in the form and context in which it respectively
included.
7. Taxation of Holders of H Shares
(1) Hong Kong
The sale, purchase and transfer of H Shares are subject to Hong Kong stamp duty. The
current rate charged on each of the purchaser and seller is 0.1% of the consideration or, if
higher, the fair value of the H Shares being sold or transferred. For further details in relation
to taxation, please refer to the section headed “Appendix III — Taxation and Foreign
Exchange” to this prospectus.
(2) Consultation with professional advisers
Potential investors in the Global Offering are urged to consult their professional tax
advisers if they are in any doubt as to the taxation implications of subscribing for, purchasing,
holding or disposing of or dealing in our H Shares (or exercising rights attached to them). None
of our Company, our Directors, the Sole Sponsor, the Sponsor-Overall Coordinator, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers,
the Capital Market Intermediaries, 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 H Shares.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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8. No Material Adverse Change
Except as otherwise disclosed in this prospectus, our Directors confirm that, as of the date
of this prospectus, there has been no material adverse change in the financial or trading
position of our Company since December 31, 2024 (being the date to which the latest
condensed consolidated financial statements of our Company were prepared).
9. Promoters
Save as disclosed in this prospectus, within the two years preceding the date of this
prospectus, no cash, securities or other benefit has been paid, allotted or given or is proposed
to be paid, allotted or given to any promoter in connection with the Global Offering and the
related transactions described in this prospectus.
10. Restrictions on Repurchase
For details, please refer to the sections headed “Appendix IV — Summary of Principal
Legal and Regulatory Provisions” and “Appendix V — Summary of the Articles of
Association” to this prospectus.
11. Binding Effect
This prospectus shall have the effect, if an application is made in pursuance of it, of
rendering all persons concerned bound by all of the provisions (other than the penal provisions)
of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance so far as applicable.
12. Bilingual Prospectus
The English and Chinese language versions of this prospectus are being published
separately, in reliance upon the exemption provided under section 4 of the Companies
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice
(Chapter 32L of the Laws of Hong Kong).
13. Miscellaneous
Save as otherwise disclosed in this prospectus:
(a) within the two years preceding the date of this prospectus, (i) our Company has not
issued nor agreed to issue any share or loan capital fully or partly paid either for
cash or for a consideration other than cash; and (ii) no commission, discount,
brokerage or other special term has been granted in connection with the issue or sale
of any shares of our Company;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-22 –


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(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) our Company has not issued nor agreed to issue any founder shares, management
shares or deferred shares;
(d) our Company has no outstanding convertible debt securities or debentures;
(e) there is no arrangement under which future dividends are waived or agreed to be
waived;
(f) there has been no interruption in our business which may have or have had a
significant effect on the financial position in the last 12 months;
(g) save for our A Shares which are listed on the Shenzhen Stock Exchange, our
Company is not presently listed on any stock exchange or traded on any trading
system; and
(h) our Company is a joint stock limited company and is subject to the PRC Company
Law.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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A. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG
KONG
The documents attached to a copy of this prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were:
(i) a copy of each of the material contracts referred to in the paragraph headed
“Appendix VI — Statutory and General Information — Further Information about
the Business of our Company — 1. Summary of Material Contracts” in this
prospectus; and
(ii) the written consents referred to in the paragraph headed “Appendix VI — Statutory
and General Information — Other information — 6. Consents” in this prospectus.
B. DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of our
Company at www.estun.com and on the website of the Stock Exchange at www.hkexnews.com
up to and including the date which is 14 days from the date of this prospectus:
(a) the Articles of Association;
(b) the accountants’ report from KPMG, the text of which is set out in Appendix I to this
prospectus;
(c) the audited consolidated financial statements of our Group for the financial years
ended December 31, 2022, 2023, 2024 and the nine months ended September 30,
2025;
(d) the letters from KPMG and the Sole Sponsor relating to the profit estimate of our
Group for the year ended December 31, 2025, the text of which is set out in
Appendix IA to this prospectus;
(e) the report from KPMG on the unaudited pro forma financial information of our
Group, the text of which is set out in Appendix II to this prospectus;
(f) the industry report issued by Frost & Sullivan (Beijing) Inc., Shanghai Branch Co.
referred to in the section headed “Industry Overview”;
(g) the PRC legal opinions issued by Zhong Lun Law Firm, our PRC Legal Advisor, in
respect of, among other things, certain general corporate matters and property
interests of our Group under the PRC laws;
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND ON DISPLAY
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(h) the legal memorandum issued by Ashurst Horitsu Jimusho Gaikokuho Kyodo Jigyo,
our legal advisers as to International Sanctions in connection with the Listing, in
respect of International Sanctions and U.S. Outbound Investment Rule;
(i) the service contracts between each of the Directors and the Company referred to in
“Appendix VI — Statutory and General Information — Further Information About
Our Directors and Substantial Shareholders — 2. Service Contracts”;
(j) the material contracts referred to in “Appendix VI — Statutory and General
Information — Further Information About Our Business — 1. Summary of Material
Contracts”;
(k) the written consents referred to in “Appendix VI — Statutory and General
Information — Other Information — 6. Consents”; and
(l) the terms of the 2025 Share Option Scheme and 2025 Restricted Share Scheme.
C. DOCUMENT A V AILABLE FOR INSPECTION
A copy of a full list of grantees under the 2025 Share Option Scheme, containing all the
particulars as required under the Listing Rules and the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, will be available for inspection at the office of Zhong
Lun Law Firm LLP at 4/F, Jardine House, 1 Connaught Place, Central, Hong Kong, during
normal business hours up to and including the date which is 14 days from the date of this
prospectus.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND ON DISPLAY
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南京埃斯頓自動化股份有限公司
ESTUN AUTOMATION CO., LTD
