--- page 1 ---
瀚天天成電子科技 （廈門） 股份有限公司
Epiworld International Co., Ltd.
Stock Code : 2726
(A joint stock company incorporated in the People’s Republic of China with limited liability)
GLOBAL OFFERING
Sole Sponsor, Sponsor-Overall Coordinator, Overall Coordinator,
Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Joint Global Coordinators, Joint Bookrunners, Joint Lead Managers
Joint Bookrunners and Joint Lead Managers


--- page 2 ---
IMPORTANT: If you are in any doubt about any of the contents of this Prospectus, you should obtain independent professional advice.
Epiworld International Co., Ltd.
Ҧ (ژ) 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
: 21,492,050 H Shares
Number of Hong Kong Offer Shares : 2,149,250 H Shares (subject to
reallocation)
Number of International Offer Shares : 19,342,800 H Shares (subject to
reallocation)
Offer Price : HK$76.26 per H Share, plus brokerage
of 1.0%, SFC transaction levy of
0.0027%, AFRC transaction levy of
0.00015% and Stock Exchange trading
fee of 0.00565% (payable in full on
application in Hong Kong dollars,
subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 2726
Sole Sponsor, Sponsor-Overall Coordinator, Overall Coordinator,
Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Joint Global Coordinators, Joint Bookrunners, Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of this
Prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arisin g from or in reliance upon the whole or any part
of the contents of this Prospectus.
A copy of this Prospectus, having attached thereto the documents specified in the section headed “Documents Delivered to the Registrar of Companies i n Hong Kong and Available on Display” in
Appendix VI to this Prospectus, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up a nd Miscellaneous Provisions)
Ordinance, Chapter 32 of the Laws of Hong Kong. The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no res ponsibility as to the contents
of this Prospectus or any other documents referred to above.
The Offer Price will be HK$76.26 per Offer Share, unless otherwise announced. Applicants for the Hong Kong Offer Shares may be required to pay (subject to application channels), on application,
the Offer Price of HK$76.26 for each Hong Kong Offer Share together with brokerage fee of 1.0%, SFC transaction levy of 0.0027%, the AFRC transaction le vy of 0.00015% and Hong Kong Stock
Exchange trading fee of 0.00565%.
The Sponsor-Overall Coordinator, on behalf of the Underwriters, may, where considered appropriate and with the Company’s consent, reduce the numbe r of Hong Kong Offer Shares and/or the Offer
Price which is 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 Offerin g. In such a case, an announcement will
be published on the website of our Company at http://www.epiworld.com.cn/ and on the website of the Hong Kong Stock Exchange at www.hkexnews.hk and the offer will be canceled and
relaunched at the revised number of Offer Shares and/or the revised Offer Price in accordance with the requirements under Rule 11.13 of the Listing Rul es (which include the issue of a supplemental
or a new prospectus (as appropriate)) as soon as practicable following the decision to make such reduction, and in any event not later than the morning o f the day which is the last day for lodging
applications under the Hong Kong Public Offering. Further details are set forth in the sections headed “Structure of the Global Offering” and “How to A pply for Hong Kong Offer Shares” in this
Prospectus.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Sponsor-Overall Coordina tor (on behalf of the Underwriters) if certain
events occur prior to 8:00 a.m. on the Listing Date. Please refer to the section headed “Underwriting” in this Prospectus.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States, and may not be of fered, sold, pledged or transferred within
the United States or to, or for the account or benefit of U.S. persons (as defined in Regulation S), except in transactions exempt from, or not subject to , the registration requirements of the U.S.
Securities Act. The Offer Shares may be offered, sold or delivered outside the United States to non-U.S. persons in offshore transactions in accordan ce with Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this Prospectus to the p ublic in relation to the Hong Kong Public
Offering. This Prospectus is available at the website of the Stock Exchange at www.hkexnews.hk and our website at http://www.epiworld.com.cn/ . If you require a printed copy of this
Prospectus, you may download and print from the website addresses above.
IMPORTANT
March 20, 2026


--- page 3 ---
IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering. We will not provide printed copies of this prospectus in relation to
the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “ HKEXnews > New Listings > New Listing
Information ” section, and our website at http://www.epiworld.com.cn/. Y ou may
download and print from these website addresses if you want a printed copy of this
prospectus.
The Company 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 prospectus as registered with the Registrar of Companies
in Hong Kong pursuant to Section 342C of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance.
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 an HKSCC Participant to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer Shares on your
behalf.
We will not provide any physical channels to accept any application for the Hong
Kong Offer Shares by the public. The contents of the electronic version of this
prospectus are identical to the printed prospectus as registered with the Registrar of
Companies in Hong Kong pursuant to Section 342C of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance.
If you are an intermediary, broker or agent , please remind your customers, clients
or principals, as applicable, that this prospectus is available online at the website
addresses stated above.
Please refer to the section headed “How to Apply for Hong Kong Offer Shares” in
this prospectus for further details on the procedures through which you can apply for the
Hong Kong Offer Shares electronically.
IMPORTANT
–i i–


--- page 4 ---
Y our application through the White Form eIPO service or the HKSCC EIPO
channel must be made for a minimum of 50 Hong Kong Offer Shares and in multiples
of that number of Hong Kong Offer Shares as set out in the table below.
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 Hong Kong Offer Share you have
selected. Y ou must pay the respective amount payable on application in full upon
application for Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, 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.
Epiworld International Co., Ltd.
(HK$76.26 per Hong Kong Offer Share)
NUMBER OF HONG KONG OFFER SHARES THAT MAY BE APPLIED FOR
AND PAYMENTS
No.
of Hong
Kong Offer
Shares
applied for
Amount
payable (2) on
application
No.
of Hong
Kong Offer
Shares
applied for
Amount
payable (2) on
application
No.
of Hong
Kong Offer
Shares
applied for
Amount
payable (2) on
application
No.
of Hong
Kong Offer
Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
50 3,851.46 700 53,920.36 5,000 385,145.41 200,000 15,405,816.42
100 7,702.91 800 61,623.27 6,000 462,174.49 300,000 23,108,724.64
150 11,554.37 900 69,326.17 7,000 539,203.57 400,000 30,811,632.85
200 15,405.81 1,000 77,029.08 8,000 616,232.66 500,000 38,514,541.06
250 19,257.27 1,500 115,543.62 9,000 693,261.74 600,000 46,217,449.25
300 23,108.72 2,000 154,058.17 10,000 770,290.82 700,000 53,920,357.46
350 26,960.18 2,500 192,572.71 20,000 1,540,581.64 800,000 61,623,265.68
400 30,811.63 3,000 231,087.25 30,000 2,310,872.46 900,000 69,326,173.89
450 34,663.09 3,500 269,601.79 40,000 3,081,163.29 1,074,600
(1) 82,775,451.62
500 38,514.54 4,000 308,116.33 50,000 3,851,454.10
600 46,217.46 4,500 346,630.87 100,000 7,702,908.21
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee
and AFRC transaction levy. If your application is successful, brokerage will be paid to the Exchange
Participants (as defined in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading
fee and AFRC transaction levy are paid to the Stock Exchange (in the case of the SFC transaction levy,
collected by the Stock Exchange on behalf of the SFC; and in the case of the AFRC transaction levy,
collected by the Stock Exchange on behalf of the AFRC).
No application for any other number of Hong Kong Offer Shares will be considered
and such an application is liable to be rejected.
IMPORTANT
– iii –


--- page 5 ---
If there is any change in the following expected timetable of the Hong Kong Public
Offering, we will issue an announcement in Hong Kong on the websites of the Stock
Exchange at www.hkexnews.hk and our Company at http://www.epiworld.com.cn/ .
Hong Kong Public Offering commences .............................. .9:00 a.m. on
Friday, March 20, 2026
Latest time for completing electronic applications
under White Form eIPO service through the
designated website www.eipo.com.hk (2) ............................ 1 1:30 a.m. on
Wednesday, March 25, 2026
Application lists of the Hong Kong Public
Offering open (3) .............................................. 1 1:45 a.m. on
Wednesday, March 25, 2026
Latest time to (a) completing payments of
White Form eIPO applications by effecting internet
banking transfer(s) and (b) giving electronic
application instructions to HKSCC (4) ............................ .12:00 noon on
Wednesday, March 25, 2026
If you are instructing your broker or custodian who is a HKSCC Participant and will
submit electronic application instruction on your behalf through HKSCC’s FINI system in
accordance with your instruction, you are advised to contact your broker or custodian for the
earliest and latest time for giving such instructions, as this may vary by broker or custodian.
Application lists of the Hong Kong Public
Offering close
(3) ............................................. .12:00 noon on
Wednesday, March 25, 2026
Announcement of 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 websites
of our Company at http://www.epiworld.com.cn/
(5) and
the Stock Exchange at www.hkexnews.hk ..........................n o later than
11:00 p.m. on
Friday, March 27, 2026
EXPECTED TIMETABLE (1)
–i v–


--- page 6 ---
Results of allocations in the Hong Kong Public Offering
(with successful applicants’ identification document
numbers or Hong Kong business registration numbers,
where appropriate) to be available through a variety of
channels, including:
 in the announcement to be posted on our website
and the website of the Stock Exchange at
http://www.epiworld.com.cn/ and www.hkexnews.hk
respectively ............................................n o later than
11:00 p.m. on
Friday, March 27, 2026
 from the designated results of allocations website
at www.eipo.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function from ........................ 1 1:00 p.m. on
Friday, March 27, 2026 to
12:00 midnight on
Thursday, April 2, 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 30, 2026,
Tuesday, March 31, 2026,
Wednesday, April 1, 2026 and
Thursday, April 2, 2026
H Share certificates in respect of wholly or partially
successful applications to be dispatched or deposited
into CCASS on or before
(6) ............................. Friday, March 27, 2026
White Form e-Refund payment instructions/refund
cheques to be dispatched on or before (7) .................. Monday, March 30, 2026
Dealings in the H Shares on the Main Board of the
Stock Exchange to commence at .................................. .9:00 a.m. on
Monday, March 30, 2026
EXPECTED TIMETABLE (1)
–v–


--- page 7 ---
Notes:
(1) All dates and times refer to Hong Kong local dates and times, except as otherwise stated.
(2) Y ou will not be permitted to submit your application under the White Form eIPO service through the
designated website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you
have already submitted your application and obtained an application reference number from the designated
website prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment
of the 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 Wednesday, March
25, 2026, the application lists will not open and close on that day. See the section headed “How to Apply for
Hong Kong Offer Shares — E. Severe Weather Arrangements”.
(4) Applicants who apply for Hong Kong Offer Shares by instructing broker/custodian to give electronic
application instructions to HKSCC via HKSCC’s FINI system should refer to the section headed “How to
Apply for Hong Kong Offer Shares — A. Applications for Hong Kong Offer Shares — 2. Application
Channels”.
(5) None of the websites or any of the information contained on the websites forms part of this prospectus.
(6) The H Share certificates will only become valid evidence of title at 8:00 a.m. on the Listing Date provided that
the Global Offering has become unconditional and the right of termination described in “Underwriting —
Underwriting Arrangements and Expenses — Hong Kong Public Offering — Grounds for Termination” has not
been exercised. Investors who trade the H Shares on the basis of publicly available allocation details prior to
the receipt of H Share certificates or prior to the H Share certificates becoming valid evidence of title do so
entirely at their own risk.
(7) White Form e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering. Part of the applicant’s Hong Kong
identity card number or passport number, or, if the application is made by joint applicants, part of the Hong
Kong identity card number or passport number of the first-named applicant, provided by the applicant(s) may
be printed on the refund check, if any. Such data would also be transferred to a third party for refund purposes.
Banks may require verification of an applicant’s Hong Kong identity card number or passport number before
encashment of the refund check. Inaccurate completion of an applicant’s Hong Kong identity card number or
passport number may invalidate or delay encashment of the refund check.
Applicants being individuals who are eligible for personal collection may not authorize any other person to
collect on their behalf. Individuals 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
“How to Apply for Hong Kong Offer Shares — D. Dispatch/Collection of H Share Certificates and Refund of
Application Monies” 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) dispatched 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)
dispatched to the address as specified in their application instructions in the form of refund checks by ordinary
post at their own risk.
Further information is set out in the paragraph headed “How to Apply for Hong Kong Offer Shares — D.
Dispatch/Collection of H Share Certificates and Refund of Application Monies”.
EXPECTED TIMETABLE (1)
–v i–


--- page 8 ---
The above expected timetable is a summary only. For details of the structure of the Global
Offering, including its conditions, and the procedures for applications for Hong Kong Offer
Shares, see “Structure of the Global Offering” and “How to Apply for Hong Kong Offer
Shares”, respectively.
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)
– vii –


--- page 9 ---
IMPORTANT NOTICE TO PROSPECTIVE INVESTORS
This Prospectus is issued by us solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the Hong Kong Offer Shares offered
by this Prospectus pursuant to the Hong Kong Public Offering. This Prospectus may not
be used for the purpose of making, and does not constitute, an offer or invitation in any
other jurisdiction or in any other circumstances. No action has been taken to permit a
public offering of the Hong Kong Offer Shares in any jurisdiction other than Hong Kong
and no action has been taken to permit the distribution of this Prospectus in any
jurisdiction other than Hong Kong. The distribution of this Prospectus for purposes of a
public offering and the offering and sale of the Hong Kong Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under
the applicable securities laws of such jurisdictions pursuant to registration with or
authorization by the relevant securities regulatory authorities or an exemption therefrom.
You should rely only on the information contained in this Prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this Prospectus. 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 contained nor made
in this Prospectus must not be relied on by you as having been authorized 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 or their respective directors, officers,
employees, agents, or representatives of any of them or any other parties involved in the
Global Offering.
Page
EXPECTED TIMETABLE ........................................... i v
CONTENTS ....................................................... viii
SUMMARY ....................................................... 1
DEFINITIONS ..................................................... 2 5
GLOSSARY OF TECHNICAL TERMS ................................. 3 8
FORW ARD-LOOKING STATEMENTS ................................. 4 2
RISK FACTORS ................................................... 4 4
CONTENTS
– viii –


--- page 10 ---
W AIVERS AND EXEMPTION ........................................ 7 2
INFORMATION ABOUT THIS PROSPECTUS AND
THE GLOBAL OFFERING ........................................ 8 0
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN
THE GLOBAL OFFERING ........................................ 8 4
CORPORATE INFORMATION ....................................... 8 9
INDUSTRY OVERVIEW ............................................ 9 1
REGULATORY OVERVIEW ......................................... 1 0 5
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE ............ 1 1 8
BUSINESS ........................................................ 1 3 1
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT ............. 1 8 7
RELATIONSHIP WITH THE SINGLE LARGEST SHAREHOLDER ......... 2 0 1
SHARE CAPITAL .................................................. 2 0 3
SUBSTANTIAL SHAREHOLDERS .................................... 2 0 5
CORNERSTONE INVESTOR ......................................... 2 0 6
FINANCIAL INFORMATION ........................................ 2 0 9
FUTURE PLANS AND USE OF PROCEEDS ............................ 2 5 8
UNDERWRITING ................................................. 2 6 2
STRUCTURE OF THE GLOBAL OFFERING ........................... 2 7 1
HOW TO APPLY FOR HONG KONG OFFER SHARES ................... 2 7 7
APPENDIX I ACCOUNTANT’S REPORT .......................... I - 1
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION . II-1
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL
INFORMATION FOR THE YEAR ENDED
DECEMBER 31, 2025 .............................. III-1
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION .......... I V - 1
APPENDIX V STATUTORY AND GENERAL INFORMATION .......... V - 1
APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND
A V AILABLE ON DISPLAY ......................... VI-1
CONTENTS
–i x–


--- page 11 ---
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 and is qualified in its entirety by, and should be read in conjunction with, the full text
of this Prospectus. You should read the entire Prospectus before you decide to invest in the
Offer Shares.
There are risks associated with any investment. Some of the particular risks of investing
in the Offer Shares are set out in the section headed “Risk Factors” in this Prospectus. You
should read that section carefully before you decide to invest in the Offer Shares.
V arious expressions used in this section are defined in the sections headed “Definitions”
and “Glossary of Technical Terms” in this Prospectus.
OVERVIEW
We are a global leader in the silicon carbide (SiC) epitaxy industry. We have been primarily
engaged in the research and development, mass production and sales of SiC epitaxial wafers,
components used in the manufacturing of SiC semiconductor devices. Our customers utilize our SiC
epitaxial wafers to manufacture their power devices for a wide range of downstream applications
including EVs, charging infrastructure, renewable energy, ESS, among others. According to CIC,
since 2023, we have been the world’s largest SiC epitaxial foundry by annual sales volume, with
a market share exceeding 30% in 2024.
Commercial Success
599,700
SiC epitaxial wafers delivered during the Track
Record Period
4/5    8/10
Choice of world’s top power
device providers4
Net Profits
of RMB127.5m, RMB107.5m, and RMB165.1m
in 2022, 2023 and 2024, respectively5
Market Leadership
Largest
World’s largest SiC epitaxial foundry1
First
in the commercialization of 8-inch SiC
epitaxial wafer in the open market2
Leader
of setting industry standards3
Notes:
1. According to CIC, since 2023, we have been the world’s largest SiC epitaxial foundry by annual sales volume.
2. We were the first in the world to achieve large-scale commercial supply of 8-inch SiC epitaxial wafers, according to
CIC.
3. We led the writing and establishment of the world’s first and only Semiconductor Equipment and Materials
International (SEMI) industry standard for SiC epitaxy.
4. Four of the world’s top five SiC power device providers and eight of the top ten power device providers, by volume,
are our customers, according to CIC.
5. In addition, we recorded net profits of RMB118.4 million and RMB21.1 million for the nine months ended September
30, 2024 and 2025, respectively; and adjusted net profits (Non-IFRS measure) of RMB171.9 million, RMB383.8
million, RMB323.5 million, RMB263.4 million and RMB163.3 million in 2022, 2023 and 2024 and for the nine
months ended September 30, 2024 and 2025, respectively.
6. We operate within a specialized segment of the broader global power semiconductor market. Given the complexity,
vast scale, and diverse range of participants in the global power semiconductor value chain, our share of the overall
market remains relatively limited.
SUMMARY
–1–


--- page 12 ---
We had revenue of RMB440.7 million, RMB1,142.5 million, RMB974.3 million, RMB808.3
million and RMB535.1 million in 2022, 2023 and 2024 and for the nine months ended September
30, 2024 and 2025, respectively. From 2023 to 2025, the semiconductor industry witnessed a
sequential inventory adjustment across its downstream applications. According to CIC, this process
started in the consumer electronics segment in 2022 before impacting semiconductors power
devices, particularly in automotive, in 2023. Given the intricate industry chain, this de-stocking
wave gradually moved upstream to our segment of the value chain, leading to a decline in our sales
and revenue. Semiconductor inventory cycles, typically lasting three to four years, are primarily
driven by shifts in downstream demand, capacity expansion cycles, and macroeconomic factors.
The current adjustment is anticipated to end in the second half of 2026 and is seen as a cyclical
adjustment during the semiconductor industry cycle instead of a structural market deterioration.
According to CIC, the recent cyclical fluctuations have been driven primarily by adjustments in
downstream supply and demand as well the impact from the transition from 4-inch to 6-inch and
8-inch wafers. Against this industry backdrop, we have faced pricing pressure, as our product
pricing is influenced by downward industry-wide prices since 2023, resulted in a decrease in our
revenue from 2023 to 2024. However, from a long-term perspective, demand for SiC and SiC
epitaxial wafers remains on a solid growth trajectory, driven by strong potential in sectors including
EVs, charging infrastructure, renewable energy, ESS, as well as emerging applications such as home
appliances, AI computing power and data centers, smart grids, and eVTOL. As the world’s largest
SiC epitaxial foundry by annual sales volume since 2023, we believe that we are well-positioned
to capture the future growth. Our business is underpinned by competitive advantages, including
technological expertise, cost efficiency, stable supply chain and customer loyalty, which allow us
to navigate industry cycles resiliently. We are prepared to capture future growth and solidify our
financial performance as the global SiC epitaxial market regains momentum.
Our deep knowledge of SiC epitaxy technology enables us to stay at the frontline of the SiC
epitaxy industry and provide high quality and reliable products to our customers. We were the first
in the world to achieve large-scale commercial supply of 8-inch SiC epitaxial wafers and the first
in China to commercialize and mass-produce 3-inch, 4-inch, 6-inch, and 8-inch SiC epitaxial
wafers. We led the writing and establishment of the world’s first and only Semiconductor
Equipment and Materials International (SEMI) industry standard for SiC epitaxy. In 2024, our
cumulative sales, combining sales under Turnkey and Consign models, exceeded 164,000 SiC
epitaxial wafers. During the Track Record Period, we have delivered a total of over 599,700 SiC
epitaxial wafers.
During the Track Record Period, we had 134 customers. Our customers included four of the
world’s top five SiC power device providers and eight of the top ten power device providers,
according to CIC. SiC power devices fabricated using our epitaxial wafers exhibit stable
performance in high-temperature and high-power use. Our customers utilize our SiC epitaxy wafers
to manufacture their products, typically power devices, for a wide range of downstream industrial
applications, such as EVs, charging infrastructure, renewable energy, ESS, as well as emerging
applications such as home appliances, AI computing power and data centers, smart grids, and
eVTOL. For example, our products can be adopted in EVs to enable smaller, lighter and more
power-efficient devices such as 800V powertrains, particularly in inverters and converters. This
application allows high-voltage operations with minimal energy loss for EVs, which translate into
longer range, faster charging and reduced cooling demands. During the Track Record Period, we
acquired new customers primarily through active market engagement efforts, including
participation in industry exhibitions and academic conferences, as well as through customer
referrals. Our technical expertise, large production capacity, systematic quality assurance
procedure, consistent delivery, and reliable customer services have earned us long-term recognition
and loyalty from customers. These qualities not only strengthen customer retention but also provide
us with unique growth opportunities.
SUMMARY
–2–


--- page 13 ---
Our founder, Dr. Zhao Jianhui, is a renowned scientist with over 35 years of dedicated R&D
experience in SiC technology development. He is the first scientist elected as an IEEE Fellow based
on significant contributions to the R&D and application of SiC technologies. The expertise of Dr.
Zhao and our R&D team formed the core of our technological competitiveness. We successfully
developed a proprietary platform for SiC epitaxy, covering the entire epitaxial growth process,
including pre-growth preparation, epitaxial growth, cleaning, and inspection.
Among SiC epitaxial foundries worldwide, we achieved reliable performance in terms of
product quality, yield rates and consistency. According to CIC, our products lead the industry in key
performance metrics for SiC epitaxial products, including epitaxial thickness, doping concentration,
epitaxial defect and yield rates. For example, for our Consign service provided to a leading global
SiC device manufacturer, the yield rate of our epitaxial wafer products reached 99%. Our success
is also demonstrated by our profitability and cash flow in the Track Record Period. In 2024, our
revenue, adjusted net profit (Non-IFRS measure) and operating cash flow reached RMB974.3
million, RMB323.5 million and RMB640.6 million, respectively. Since 2024, our financial
performance deteriorated due to market competition driving down our selling prices, together with
reduced customer demand as a result of a market downturn experienced by our downstream
customers.
OUR MARKET OPPORTUNITIES
Amid the global wave of energy revolution, electricity is rapidly replacing traditional fossil
fuels, emerging as the driver for electrification and growth in industrial automotive and renewable
energy sectors. In this transformative shift, SiC power devices serve as the “intelligent heart” of
various power systems utilizing electricity, according to CIC.
The SiC industry is inherently evolving toward a highly specialized division of labor, because
of its total addressable market potential and the need for technological excellence and operational
efficiency. As the sector expands, companies are increasingly focusing on their core competencies
within the value chain, fostering a collaborative ecosystem characterized by specialization. In terms
of revenue in the open market, the five largest SiC epitaxial foundries obtained 93.4% of the global
market share in 2024, a concentration significantly outpacing the substrate segment and the power
device segment, where the top five players in each segment hold a market share of approximately
80%, according to CIC. We, as a global leader in the SiC epitaxy industry, are uniquely positioned
to capitalize on this inevitable development. By leveraging our advanced technology, scale
advantages, and established reputation in third-party epitaxial wafer supply, we are strategically
equipped to capture emerging market opportunities, strengthen client partnerships, and solidify our
market share in the rapidly advancing SiC era.
According to CIC, SiC power device market size has reached US$2.6 billion in 2024 and is
expected to grow at a CAGR of 39.9% between 2024 and 2029, reaching US$13.6 billion by 2029.
This positions SiC as a core material for the upcoming energy revolution and the rise of intelligent
industry. See “Business — Overview — Industry tailwinds and our opportunities” for further
details. In the extensive global semiconductor market, traditional silicon materials still dominate
while emerging materials such as SiC gradually earning their market presence. As an enterprise
focus on the next-generation materials, we obtained approximately 0.1% of the total semiconductor
market share in 2024, according to CIC.
SUMMARY
–3–


--- page 14 ---
OUR PRODUCTS AND BUSINESS MODELS
Overview
We have been primarily engaged in the research and development, mass production and sales
of SiC epitaxial wafers. SiC epitaxial wafers offer a multitude of advantages over traditional Si
wafers, including but not limited to enhanced temperature stability, higher breakdown voltage, and
superior thermal conductivity. These unique properties make SiC wafers a key enabler of various
applications. Our customers utilize our SiC epitaxy wafers to manufacture their products, typically
power devices, for a wide range of downstream industrial applications, such as EVs, charging
infrastructure, renewable energy, and ESS.
To address the different needs of our customers, we offer Turnkey and Consign business
models, both of which enable our customers to rely on our cumulative expertise in the production
of SiC epitaxial wafers. For details, see “Business — Our Products and Business Models — Our
Business Models.”
Our Technologies
SiC epitaxial wafer is a critical component of the SiC value chain, where its quality is of
paramount importance for downstream applications. The manufacturing process of SiC power
devices differs from that of traditional Si power devices. SiC power devices cannot be fabricated
directly on the SiC substrate; instead, a high-quality single-crystal epitaxial layer must first be
grown on the supportive substrate, and various devices are then manufactured on this epitaxial
layer.
According to CIC, the production of SiC epitaxial wafers is still facing several hurdles: (i)
defect control, (ii) uniformity and consistency, and (iii) high costs.
To address these industry challenges and provide high quality products that our customers are
looking for, we have developed targeted proprietary technologies, such as 8-inch SiC epitaxial
wafer production technology, basal plane dislocations (BPD)-free epitaxial growth technology,
high-concentration uniformity epitaxial growth technology, low defect density epitaxial growth
technology, and thick-film epitaxial growth technology. For more details, see “Business —
Research and Development — Our Technologies and R&D Process.”
These innovative technologies have enabled us to produce SiC epitaxial wafers with high
uniformity and low defect density. Additionally, we have developed proprietary multi-layer
epitaxial technology to satisfy customers’ customized needs. Our product quality has earned
recognition globally, including “Perfect Quality Award” from one of the top five global SiC power
device manufacturers.
Our Products — SiC epitaxial wafers
We offer various sizes of SiC epitaxial wafers, including 4-inch, 6-inch and 8-inch. SiC wafers
are typically categorized by size, primarily because the size directly impacts manufacturing
efficiency, yield, and production scalability, with larger wafers typically delivering lower cost.
During the Track Record Period, 6-inch SiC epitaxial wafers made up the majority of our sales. We
also have a first-mover advantage as the first company in the world to mass-produce and
commercially supply 8-inch SiC epitaxial wafers in the open market, according to CIC. Although
6-inch wafers currently dominate the market and is expected to grow continuously, the market size
for 8-inch SiC wafers is expected to expand significantly. We continue to invest in the R&D and
production of both 6-inch to 8-inch wafers, and expect 8-inch wafers to account for a growing share
of our sales. The following photo shows samples of our SiC epitaxial wafers.
SUMMARY
–4–


--- page 15 ---
The following table sets forth a breakdown of our sales volume of SiC epitaxial wafers by
sizes for the years and periods indicated.
Y ear Ended December 31,
Nine Months Ended
September 30,
2022 2023 2024 2024 2025
Sales
volume %
Sales
volume %
Sales
volume %
Sales
volume %
Sales
volume %
(pieces of wafers, except for percentages)
Sales volume
3-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– –– –– –– 2 0 . 0
4-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,733 4.4 610 0.3 383 0.2 318 0.2 1,328 0.9
6-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881,633 95.6 199,708 99.6 156,584 95.2 126,648 95.2 137,184 91.9
8-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 285 0.1 7,466 4.5 6,057 4.6 10,788 7.2
Total sales volume /H1118/H111885,366 100.0 200,603 100.0 164,433 100.0 133,023 100.0 149,302 100.0
For a detailed discussion, see “Business — Our Products and Business Models — Our
Products — SiC Epitaxial Wafers.”
We price our SiC epitaxial wafers based on a number of factors, including (i) the sizes and
structures (thickness and doping types) of wafers; (ii) product specifications; (iii) purchase volume
and (iv) prevailing market condition and competitive landscape. We regularly adjust our pricing
strategies to maintain competitiveness. For customized products, such as specially doped or
uniquely thick epitaxial wafers, prices are typically higher.
Our Business Models
We have two kinds of business models, namely Turnkey and Consign, based on whether we
purchase substrates on our own or use the substrates provided by our customers, as illustrated by
the following chart.
SUMMARY
–5–


--- page 16 ---
Customers
Substrate
Suppliers
Turnkey
Consign
EpiWorld purchase
 substrates and other
auxiliary raw materials
EpiWorld’s epitaxial
growth process,
including incoming
inspection, epitaxial
growth, cleaning and
inspection
SiC epitaxial
wafers
Customers supply
substrates and
EpiWorld purchase other
auxiliary raw materials
Turnkey
Under the Turnkey model, we purchase the raw material including substrates ourselves and
upon the completion of production process, deliver the final products, SiC epitaxial wafers, to our
customers. The price of our wafer products thereby takes into account the full costs of substrates
as well as our production costs. When dealing with customers with large and recurring purchase
orders, prices are typically negotiated based on production volume, prevailing market conditions
and length of relationships. Through the Turnkey model, we could provide an integrated and
convenient solution to our customers, allowing them to rely on our established quality control
process.
Consign
Under the Consign model, our customers supply us with the substrates. We would purchase
other auxiliary raw materials, grow the SiC epitaxy and deliver the final epitaxial wafers to our
customers. We charge the customers for the auxiliary raw materials and the foundry services for
growing SiC epitaxy on substrates. The base processing fee depends on the size, doping type, and
thickness of the epitaxial wafer and the additional service fees include charges for special process
requirements, and other services. For large-volume orders, we from time to time apply tiered pricing
where the larger the order quantity, the lower the unit process fee. Our pricing strategy enhances
customer loyalty and increases long-term collaboration opportunities.
Our manufacturing capacity and flexible business model allow us to adapt to such customized
requests swiftly. The following table sets forth a breakdown of our sales volume of SiC epitaxial
wafers by types of service for the years and periods indicated.
Y ear Ended December 31,
Nine Months Ended
September 30,
2022 2023 2024 2024 2025
Sales
volume %
Sales
volume %
Sales
volume %
Sales
volume %
Sales
volume %
(pieces of wafers, except for percentages)
Sales volume
Turnkey /H1118/H1118/H1118/H1118/H1118/H1118/H111831,339 36.7 96,428 48.1 122,283 74.4 92,006 69.2 137,763 92.3
Consign /H1118/H1118/H1118/H1118/H1118/H1118/H111854,027 63.3 104,175 51.9 42,150 25.6 41,017 30.8 11,539 7.7
Total sales volume /H1118/H111885,366 100.0 200,603 100.0 164,433 100.0 133,023 100.0 149,302 100.0
SUMMARY
–6–


--- page 17 ---
During the Track Record Period, our sales volumes under the Turnkey model increased,
primarily due to our supply chain management capabilities. In particular, we were able to source
substrates with quality and cost-effectiveness. Our leading market position and our expanding
presence in China enhance our supplier bargaining power, enabling us to source substrates more
cost-effectively. This contributed to a 27% year-over-year increase in sales volume for our Turnkey
services in 2024 compared to 2023 and enabled us to remain profitable throughout the Track Record
Period. Our stable, integrated offering under the Turnkey model helps customers reduce supply
chain management costs, shorten lead times, and avoid issues such as raw substrate shortages or
inventory backlogs. For our customers, our competitiveness is rooted in our cost-effective substrate
supplies, dedicated focus on the epitaxy technologies, as well as broad and comprehensive customer
base both domestically and internationally, reflecting the wide market acceptance of our products.
The following table sets forth a breakdown of our average selling price by product and by type
of services during the Track Record Period.
Y ears Ended December 31,
Nine Months
Ended
September 30,
2022 2023 2024 2025
(RMB)
Turnkey /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,863 8,791 6,866 3,508
3-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,770
4-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,140 3,647 4,493 3,027
6-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,360 8,787 6,433 3,209
8-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 21,000 13,620 7,072
Consign /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,898 2,810 2,873 2,073
4-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,854 27,418 2,856 1,789
6-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,891 2,810 2,873 2,032
8-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,862
The average selling price of 8-inch wafers decreased from RMB21,000 to RMB13,620 from
2023 to 2024 and further to RMB7,072 for the nine months ended September 30, 2025. Such
decrease was primarily attributable to lower substrate costs. Additionally, during the initial
introduction of 8-inch wafers, some products were provided as trial samples free of charge, which
temporarily lowered the average selling price. However, the mainstream price for 8-inch wafers
remains robust, at above US$1,000 per wafer. Sales of 8-inch wafers will continue to support our
profitability. The increase in the average selling price of 4-inch wafers from 2022 to 2023 was
mainly due to customers’ customization requirements. These 4-inch wafers were characterized by
ultra-thick films and high voltage ratings, making the manufacturing process highly complex.
OUR COMPETITIVE STRENGTHS
We believe that the following strengths have contributed to our success and differentiated us
from our competitors:
 We are a global leader in the SiC epitaxy industry;
 We possess strong R&D capabilities driving technological advancement in the SiC
epitaxy industry;
 We have industry-leading production capacity that can be expanded in a disciplined
manner to meet the rapidly growing demand from downstream customers;
 We have established a large customer base by hyper focusing on SiC epitaxy; and
SUMMARY
–7–


--- page 18 ---
 We are led by a dedicated and seasoned leadership team with strategic foresight.
For details, see “Business — Our Competitive Strengths.”
OUR GROWTH STRATEGIES
We plan to execute the following strategies to drive our future growth:
 Sustained investment in R&D to strengthen and enhance our technological leadership;
 Expand production capacity with discipline to capture market opportunities;
 Dual growth engine — penetrate domestic and overseas markets and execute a
globalized strategy;
 Enhance and upgrade existing product portfolio to deliver solutions with superior
performance and enhanced cost efficiency; and
 Attract top talents to enhance our multi-dimensional talent pool.
For details, see “Business — Our Growth Strategies.”
CUSTOMERS AND SUPPLIERS
We provide SiC epitaxial wafers to power device companies, which then fabricate the wafers
into devices for their customers. During the Track Record period, we had served 134 customers. Our
customers are primarily global leaders of semiconductor power devices. Our sales to the five largest
customers in each period during the Track Record Period were RMB381.5 million, RMB938.0
million, RMB790.6 million and RMB331.0 million, respectively, and accounted for 86.5%, 82.1%,
81.2% and 61.9% of the total revenue for the respective periods. Our sales to the largest customer
in each period during the Track Record Period were RMB246.6 million, RMB614.6 million,
RMB393.6 million and RMB163.0 million, respectively, and accounted for 56.0%, 53.8%, 40.4%
and 30.5% of our total revenue for the respective periods. As of the Latest Practicable Date, none
of our Directors, their close associates or any of our Shareholders (who or which to the knowledge
of the Directors owned 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.
Our purchase from the five largest suppliers in each period during the Track Record Period
were RMB430.3 million, RMB1,342.8 million, RMB376.5 million and RMB220.5 million,
respectively, and accounted for 65.4%, 72.1%, 83.3% and 79.1% of the total cost of revenues for
the respective periods. Our purchase from the largest supplier in each period during the Track
Record Period were RMB215.3 million, RMB718.7 million, RMB129.4 million and RMB79.2
million, respectively, and accounted for 32.7%, 38.6%, 28.6% and 28.4% of the total cost of
revenues for the respective periods. As of the Latest Practicable Date, none of our Directors,
Supervisors, their close associates or any of our Shareholders (who or which to the knowledge of
the Directors owned more than 5% of our issued share capital) had any interest in any of our five
largest suppliers in each year/period during the Track Record Period. To the best of our knowledge,
during the Track Record Period and up to the Latest Practicable Date, each of our top five suppliers
are independent from each other.
SUMMARY
–8–


--- page 19 ---
RISK FACTORS
Our business and the Global Offering involve certain risks as set out in “Risk Factors.” Y ou
should read that section in its entirety carefully before you decide to invest in our H Shares. Some
of the major risks we face include:
 Our business growth and prospects are affected by our ability to continuously innovate
and upgrade our technologies and production processes and to penetrate new markets;
 We face substantial competition;
 The price of our products and our profit margin may be materially and adversely affected
as the overall production capacity continues to increase in the future;
 Our performance is subject to the development and condition of our downstream
industries that adopt our products. Any slowdown in the growth of these downstream
industries could adversely affect our business, financial condition and results of
operations;
 A fluctuation in prices of raw materials or shortage in supply may disrupt our supply
chain, increase our production costs, delay deliveries of our products to customers and
affect our market price, which would further affect our business, financial condition and
results of operations;
 Any material adverse change to the operation, financial performance or financial
condition of our major suppliers may result in material adverse impact on their business
relationship with us;
 Our business, financial condition and results of operations may be materially and
adversely affected by geopolitical tensions, international trade policies, international
export controls and economic sanctions; and
 If we are unable to offer high-quality products, it may reduce the market adoption of our
products, damage our reputation or expose us to product liability and other claims.
OUR SINGLE LARGEST SHAREHOLDER
Immediately following the completion of the Global Offering, Dr. Zhao will control 27.39%
of our total issued share capital and he will be our Single Largest Shareholder upon Listing. For
more details, see “Relationship with the Single Largest Shareholder.”
OUR PRE-IPO INVESTORS
We have undergone multiple rounds of Pre-IPO Investments. For further details of the identity
and background of the Pre-IPO Investors and the principal terms of the Pre-IPO Investments, see
“History, Development and Corporate Structure — Pre-IPO Investments.”
PREVIOUS A SHARE LISTING ATTEMPT
We submitted our A share listing application to the Shanghai Stock Exchange in December
2023. In January 2024, we received our first comment letter from the CSRC with common
comments including but not limited to shareholding changes of the Company, key products and
market competitiveness, top customers and suppliers, financial performance, employee share
incentive scheme, related party transactions and corporate governance. Considering the time
required for completing the A-share listing applications, the Company’s fundraising demand for
business expansion, and financing opportunities in the second half of 2024, based on our latest
SUMMARY
–9–


--- page 20 ---
corporate development strategies, we withdrew our A share listing application in June 2024. We
have not submitted our responses to the CSRC comment letter before the withdrawal of our A share
listing application. Considering a listing on the Stock Exchange would (a) provide our Company
with an international platform to promote our market awareness worldwide, (b) gain access to
international capital and optimize our capital structure, and (c) further raise our market profile and
help us to attract international talents, we commenced our H share listing application preparation.
Our Directors confirm that, to their best knowledge, there are no other material matters relating to
the A share listing attempt that would affect the Company’s suitability for listing on the Stock
Exchange and are necessary to be disclosed in this Prospectus for investors to form an informed
assessment of our Company. Considering the independent due diligence conducted by the Sole
Sponsor, nothing relating to the A share listing attempt has come to the attention of the Sole Sponsor
which would materially and adversely affect the Company’s suitability for the Listing.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
Summary of Consolidated Statements of Profit or Loss
The table below sets forth our consolidated statements of profit or loss for the years and
periods indicated derived from the Accountant’s Report included in Appendix I to this Prospectus:
Y ears Ended December 31,
Nine Months Ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118440,691 1,142,502 974,316 808,250 535,063
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(243,754) (697,103) (642,007) (522,542) (397,982)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118196,937 445,399 332,309 285,708 137,081
Other income and other
gains, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,534 63,451 168,402 107,583 132,621
Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,866) (48,776) (5,513) (6,770) (8,224)
Administrative and other
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(48,136) (162,749) (175,575) (147,142) (155,126)
Research and development
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(43,829) (101,786) (79,992) (62,096) (50,374)
(Impairment loss)/reversal
of impairment loss on
financial assets, net /H1118/H1118/H1118(901) 149 (1,253) (200) (2,116)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(20,281) (32,535) (30,197) (21,595) (9,636)
Profit before taxation /H1118/H1118/H1118103,458 163,153 208,181 155,488 44,226
Income tax
credit/(expense) /H1118/H1118/H1118/H1118/H1118/H111824,085 (55,648) (43,114) (37,075) (23,081)
Profit for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127,543 107,505 165,067 118,413 21,145
For accounting treatment and details of pre-IPO investments, see Note 30 to the Accountants’
Report.
SUMMARY
–1 0–


--- page 21 ---
Non-IFRS Measure
To supplement our consolidated financial statements presented in accordance with IFRSs, we
use adjusted net profit (Non-IFRS measure) for the year/period as additional financial measure,
which is not required by, or presented in accordance with IFRSs. We believe that the non-IFRS
measure facilitates comparisons of operating performance from period to period and company to
company and provides useful information to investors and others in understanding and evaluating
our operating performance in the same manner as it helps our management. However, our
presentation of adjusted net profit (Non-IFRS measure) for the years/periods may not be
comparable to similarly titled measure presented by other companies. The use of the non-IFRS
measure has limitations as an analytical tool, and investors should not consider it in isolation from,
or as substitute for analysis of, our results of operations or financial condition as reported under
IFRSs.
We define adjusted net profit (Non-IFRS measure) for the year/period as profit for the
year/period adjusted by adding back (i) equity-settled share-based payment expenses, which are
non-cash in nature, (ii) interest expenses for redemption right, which will be converted into equity
of the Company upon the Listing, and (iii) listing expense, which are related to the Global Offering.
The following table reconciles our adjusted net profit (Non-IFRS measures) for the
year/period presented in accordance with IFRSs, namely profit for the year:
Y ears Ended December 31,
Nine Months Ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Profit for the year/period /H1118/H1118127,543 107,505 165,067 118,413 21,145
Adjustment by adding back:
Equity-settled share-based
payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,575 256,210 154,249 141,163 124,484
Interest expenses for
redemption right /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,825 14,387 1,334 1,000 344
Listing expense for previous
listing application /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,678 2,853 2,853 –
Listing expense for the
Listing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 17,368
Adjusted net profit (Non-
IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118171,943 383,780 323,503 263,429 163,341
Adjusted Net Profit (Non-IFRS measure)
We had adjusted net profit (Non-IFRS measure) of RMB171.9 million, RMB383.8 million,
RMB323.5 million, RMB263.4 million and RMB163.3 million in 2022, 2023 and 2024 and for the
nine months ended September 30, 2024 and 2025, respectively. Our adjusted net profit (Non-IFRS
measure) is adjusted by adding back equity-settled share-based payment to profit for the
year/period.
Revenue
We generate revenue from sales of SiC epitaxial wafers through Turnkey and Consign models.
The key difference between the two models is the source of the substrates: we procure substrates
under the Turnkey model and our customers supply substrates to us under the Consign model. Our
revenue mainly consists of sales from SiC epitaxial wafers by type of services from Turnkey service
and Consign service. See “Business — Our Products and Business Models — Our Business Models”
for details of our Turnkey and Consign services.
SUMMARY
–1 1–


--- page 22 ---
The following table sets forth a breakdown of our revenue by product/type of service for the
years and periods indicated, in absolute amounts and as percentages of revenue.
Y ears Ended December 31, Nine Months Ended September 30,
2022 2023 2024 2024 2025
(RMB in thousands, except for percentages)
(unaudited)
Turnkey
3-inch /H1118/H1118/H1118/H1118/H1118––––––––4 0 . 0
4-inch /H1118/H1118/H1118/H1118/H111818,961 4.3 2,217 0.2 1,671 0.2 1,348 0.2 9 0.0
6-inch /H1118/H1118/H1118/H1118/H1118258,802 58.7 839,477 73.5 736,223 75.6 593,814 73.5 407,702 76.2
8-inch /H1118/H1118/H1118/H1118/H1118– – 5,985 0.5 101,683 10.4 83,981 10.4 75,689 14.1
Subtotal /H1118/H1118/H1118/H1118277,763 63.0 847,679 74.2 839,577 86.2 679,143 84.0 483,403 90.3
Consign
4-inch /H1118/H1118/H1118/H1118/H1118522 0.1 55 0.0 31 0.0 8 0.0 2,370 0.4
6-inch /H1118/H1118/H1118/H1118/H1118156,047 35.4 292,695 25.6 121,072 12.4 118,092 14.6 20,579 3.8
8-inch /H1118/H1118/H1118/H1118/H1118–––––––– 2 4 6 0 . 0
Subtotal /H1118/H1118/H1118/H1118156,569 35.5 292,750 25.6 121,103 12.4 118,100 14.6 23,194 4.3
Others (1) /H1118/H1118/H1118/H1118/H11186,359 1.4 2,073 0.2 13,636 1.4 11,007 1.4 28,466 5.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118440,691 100.0 1,142,502 100.0 974,316 100.0 808,250 100.0 535,063 100.0
Note:
(1) Others mainly include sales of SiC substrate.
Our revenue decreased from RMB808.3 million for the nine months ended September 30,
2024 to RMB535.1 million for the same period in 2025, primarily due to the decrease in our revenue
from Turnkey service. Our revenue decreased by RMB168.2 million, or 14.7%, from RMB1,142.5
million in 2023 to RMB974.3 million in 2024, primarily due to the revenue from our Consign
service decreased, caused by the decrease in our sales volume under Consign model. Our revenue
increased by RMB701.8 million, or 159.3%, from RMB440.7 million in 2022 to RMB1,142.5
million in 2023, primarily driven by the growing demand for SiC power devices, fueled by the
global rise in EV , ultrafast charging facilities, and other downstream applications. Additionally, the
realization of our expanded production capacity contributed to the increase in our sales volume.
By type of service, revenue from Turnkey service decreased from RMB679.1 million for the
nine months ended September 30, 2024 to RMB483.4 million for the same period in 2025, primarily
due to our competitive pricing strategy in response to the general downward pricing trend across
the industry. As the decrease in raw material prices provided more spaces for us to adjust our prices
downward while maintaining profitability, we proactively passed savings to our customers, thereby
strengthening client loyalty and securing market share in a competitive environment. Our sales
volume from Turnkey service increased from 92,006 pieces for the nine months ended September
30, 2024 to 137,763 pieces for the same period in 2025. The revenue generated from Consign
service decreased from RMB118.1 million for the nine months ended September 30, 2024 to
RMB23.2 million for the same period in 2025, primarily due to the decrease in our sales volume
under Consign service as certain of our major customers experienced fluctuations in their business
operations and reduced their procurement volume, combined with our competitive pricing strategy.
Our sales volume from Consign service decreased from 41,107 pieces for the nine months ended
September 30, 2024 to 11,539 pieces for the same period in 2025. As of the Latest Practicable Date,
we have no plans to phase out our Consign service despite the decline in its revenue and sales
volume.
SUMMARY
–1 2–


--- page 23 ---
Our revenue from Turnkey service slightly decreased from RMB847.7 million in 2023 to
RMB839.6 million in 2024, primarily due to we offered competitive price adjustment in resulted of
the decrease in the price of key raw material, including substrate, partially offset by our increased
sale volume from Turnkey service from 96,428 pieces in 2023 to 122,283 pieces in 2024. The
revenue generated from Consign service decreased from RMB292.8 million in 2023 to RMB121.1
million in 2024, primarily due to the decrease in our sales volume under Consign model and our
competitive pricing strategy. The sales volume under Consign service decreased from 104,175
wafers in 2023 to 42,150 wafers in 2024, due to certain customer from Consign service reduced
their demand driven by large amount of purchase in previous year.
Our revenue from Turnkey service increased from RMB277.8 million in 2022 to RMB847.7
million in 2023, primarily due to an increase in sales volume for Turnkey service from 31,339
wafers in 2022 to 96,428 wafers in 2023. The revenue generated from sales from Consign service
increased from RMB156.6 million in 2022 to RMB292.8 million in 2023, primarily due to an
increase in sales volume for Consign service from 54,027 wafers in 2022 to 104,175 wafers in 2023.
Revenue by Region
During the Track Record Period, we derived revenues from sales to customers in various
regions, mainly Asia and Europe. Our revenue from Asia and Europe markets accounted for 96.4%,
93.5%, 96.6%, 96.4% and 97.2% of our total revenue in 2022, 2023 and 2024 and for the nine
months ended September 30, 2024 and 2025, respectively. In addition, the revenue from Greater
China amounted to RMB167.7 million, RMB307.2 million, RMB207.7 million, RMB161.3 million
and RMB340.0 million in 2022, 2023 and 2024 and for the nine months ended September 30, 2024
and 2025, respectively. We record revenue from our customers by region based on the customer’s
registered address or place of incorporation.
By region, revenue from Asia decreased from RMB544.0 million for the nine months ended
September 30, 2024 to RMB455.9 million for the same period in 2025, primarily due to the
continued downward price trend. The revenue from Europe decreased from RMB235.0 million for
the nine months ended September 30, 2024 to RMB64.2 million for the same period in 2025,
primarily due to the fluctuation in production demand of some customers. The revenue from Asia
decreased from RMB745.2 million in 2023 to RMB672.4 million in 2024, primarily due to we
offered competitive price adjustment in resulted of the decrease in the price of key raw material,
including substrate, partially offset by our increased sale volume in Asia. The revenue from Europe
decreased from RMB323.3 million in 2023 to RMB268.9 million in 2024, primarily due to
decreased sales volume in such region in 2024. The revenue from Asia increased from RMB275.5
million in 2022 to RMB745.2 million in 2023, and revenue from Europe increased from RMB149.3
million in 2022 to RMB323.3 million in 2023, primarily driven by the growth of SiC power device
demands across the regions.
The following table sets forth a breakdown of revenue by region, based on the locations of our
direct contracting customers, for the years and periods indicated, in absolute amount and as
percentage of total revenues.
Y ears Ended December 31, Nine Months Ended September 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(in thousands, except for percentages)
(unaudited)
Revenue by region
Asia (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118275,470 62.5 745,221 65.2 672,429 69.0 543,971 67.3 455,961 85.2
Greater China /H1118/H1118/H1118/H1118167,703 38.1 307,249 26.9 207,656 21.3 161,343 20.0 340,026 63.5
Europe (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,339 33.9 323,343 28.3 268,943 27.6 235,014 29.1 64,160 12.0
North America (3) /H1118/H1118/H1118/H111814,083 3.2 73,938 6.5 32,944 3.4 29,265 3.6 14,942 2.8
Others (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,799 0.4 – – – – – – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118440,691 100.0 1,142,502 100.0 974,316 100.0 808,250 100.0 535,063 100.0
SUMMARY
–1 3–


--- page 24 ---
Notes:
(1) Asia primarily comprises Greater China, South Korea and Japan.
(2) Europe primarily comprises Austria, Switzerland and the U.K.
(3) North America primarily comprises the U.S.
(4) Other primarily comprises Australia.
Government Grants
During the Track Record Period, besides profits from operations, we had government grants
of RMB13.5 million, RMB47.4 million, RMB111.9 million, RMB95.7 million and RMB103.0
million in 2022, 2023 and 2024 and for the nine months ended September 30, 2024 and 2025,
respectively, which were a major and increasing contributor to our profit for the year/period during
the Track Record Period. For the nine months ended September 30, 2025, our net profit was
primarily attributable to the one-off government grants of RMB103.0 million, and we would have
incurred loss for the period without the grants. Majority of our government grants were one-off in
nature, although the actual grants can be by allotments and subject to certain conditions, such as our
financial performance, capital investments and local tax contributions. For details, see “Financial
Information — Description of Key Components of Consolidated Statements of Profit or Loss —
Other Income and Other Gains, Net.”
Profit for the Y ear/Period
Our profit for the year decreased from RMB127.5 million in 2022 to RMB107.5 million in
2023, and then increased to RMB165.1 million in 2024. The lower net profit in 2023 was primarily
due to increased in share-based payment for employees in 2023. The higher net profit in 2024 was
primarily due to the one-off government grants we received in 2024. Our profit for the period
decreased from RMB118.4 million in the nine months ended September 30, 2024 to RMB21.1
million in the nine months ended September 30, 2025, primarily due to decreased in the profit and
total comprehensive income for the period in 2025.
Summary of Consolidated Balance Sheets
The table below sets forth selected information from our consolidated balance sheets as of the
dates indicated, which has been extracted from the Accountant’s Report included in Appendix I to
this Prospectus:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118956,390 2,043,223 2,054,279 1,958,168
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118497,208 1,030,375 2,448,665 2,408,456
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,453,598 3,073,598 4,502,944 4,366,624
Non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118271,013 1,048,943 1,084,318 1,020,199
Current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118599,083 560,488 605,142 368,961
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118870,096 1,609,431 1,689,460 1,389,160
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118583,502 1,464,167 2,813,484 2,977,464
SUMMARY
–1 4–


--- page 25 ---
Our net asset increased from RMB2,813.5 million as of December 31, 2024 to RMB2,977.5
million as of September 30, 2025, primarily due to our recognition of equity-settled share-based
payments of RMB124.5 million, profit and comprehensive income for the period of RMB21.1
million, and derecognition due to termination of redemption rights of RMB18.4 million for the nine
months ended September 30, 2025.
Our net asset increased from RMB1,464.2 million as of December 31, 2023 to RMB2,813.5
million as of December 31, 2024, primarily due to our share issued of RMB1,030.0 million, profit
and comprehensive income of the year of RMB165.1 million and recognition of equity-settled
share-based payment of RMB154.2 million in 2024.
Our net asset increased from RMB583.5 million as of December 31, 2022 to RMB1,464.2
million as of December 31, 2023, primarily due to our share issued of RMB280.0 million,
recognition of equity-settled share-based payment of RMB256.2 million and profit and
comprehensive income of the year of RMB107.5 million in 2023.
The following table sets forth our current assets and current liabilities as of the dates
indicated:
As of December 31,
As of
September 30
As of
January 31,
2022 2023 2024 2025 2026
(RMB in thousands)
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,404 351,086 247,640 270,945 306,378
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118106,796 78,666 129,645 268,964 383,550
Prepayments, deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,527 7,992 7,468 21,169 40,456
V alue-added tax (V A T) recoverable /H1118 8,564 22,488 33,259 14,591 1,918
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118500 20,622 – – 608,920
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118274,417 549,521 2,030,653 1,832,787 1,211,486
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118497,208 1,030,375 2,448,665 2,408,456 2,552,709
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H111854,863 32,912 71,883 154,964 213,138
Other payables and accruals /H1118/H1118/H1118/H1118/H1118182,077 191,731 145,089 109,489 141,954
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,757 3,730 6,795 736 378
Derivative financial instruments /H1118/H1118/H1118 – – – 2,140 3,303
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344 261 67 66 67
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118142,405 315,181 303,536 65,025 6,401
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213,637 16,673 18,007 – –
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 59,765 36,541 36,571
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118599,083 560,488 605,142 368,961 401,811
Net current (liabilities)/assets /H1118/H1118/H1118(101,875) 469,887 1,843,523 2,039,495 2,150,898
Our net current assets increased from RMB2,039.5 million as of September 30, 2025 to
RMB2,086.8 million as of January 31, 2026, primarily due to (i) an increase of trade and bills
receivables of RMB114.6 million, (ii) an increase in inventories of RMB35.4 million, and (iii) an
decrease in current borrowings of RMB58.6 million; partially offset by (i) a increase in trade and
bills payables of RMB58.2 million, and (ii) an increase of other payables and accruals of RMB32.5
million.
Our net current assets increased from RMB1,843.5 million as of December 31, 2024 to
RMB2,039.5 million as of September 30, 2025, primarily due to (i) a decrease of borrowings of
RMB238.5 million, (ii) a decrease of income tax payable of RMB23.2 million, (iii) a decrease of
other payables and accruals of RMB35.6 million, (iv) a decrease of redemption liabilities of
SUMMARY
–1 5–


--- page 26 ---
RMB18.0 million, and (v) an increase of prepayments, deposits and other receivables of RMB13.7
million; partially offset by (i) a decrease of cash and cash equivalents of RMB197.9 million, (ii) a
decrease of inventories of RMB23.3 million, and (iii) an increase of trade and bills payables of
RMB83.1 million.
Our net current assets increased from RMB469.9 million as of December 31, 2023 to
RMB1,843.5 million as of December 31, 2024, primarily due to (i) an increase of cash and cash
equivalents of RMB1,481.2 million in relation to share issuance of RMB1,030.0 million from
certain shareholders, (ii) an increase of trade and bills receivables of RMB51.0 million, (iii) a
decrease of borrowings of RMB11.6 million, and (iv) an increase of V A T recoverable of RMB10.8
million, partially offset by (i) a decrease of inventories of RMB103.4 million, (ii) an increase of tax
payable of RMB59.8 million, and (iii) a decrease of time deposits of RMB20.6 million.
Our net current liabilities of RMB101.9 million as of December 31, 2022 changed to net
current assets of RMB469.9 million as of December 31, 2023, primarily due to (i) an increase of
cash and cash equivalents of RMB275.1 million, (ii) an increase of inventories of RMB259.7
million, and (iii) a decrease in redemption liabilities of RMB197.0 million; partially offset by (i)
an increase of borrowings of RMB172.8 million, (ii) a decrease of trade and bills payables of
RMB22.0 million, and (iii) a decrease of trade and bills receivables of RMB28.1 million.
Summary of Consolidated Statement of Cash Flow
The following table presents our consolidated cash flow data for the years and periods
indicated.
Y ear Ended December 31,
Nine Months Ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Net cash generated from
operating activities /H1118/H1118/H1118/H1118/H1118/H1118169,985 415,175 640,638 470,931 176,241
Net cash used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(505,270) (1,140,458) (144,332) (144,539) (21,462)
Net cash generated
from/(used in) financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118459,072 1,000,387 984,826 289,564 (352,645)
Net increase/(decrease) in
cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,787 275,104 1,481,132 615,956 (197,866)
Cash and cash equivalents at
beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118150,630 274,417 549,521 549,521 2,030,653
Cash and cash equivalents
at end
of the year/period /H1118/H1118/H1118/H1118/H1118/H1118274,417 549,521 2,030,653 1,165,477 1,832,787
During the Track Record Period and as of the Latest Practicable Date, our principal sources
of liquidity have been cash generated from operating activities and borrowings from banks.
SUMMARY
–1 6–


--- page 27 ---
KEY FINANCIAL RATIOS
The following table sets forth some of our key financial ratios for the dates indicated.
As of/Y ears Ended December 31,
As of/
Nine Months
Ended
September 30,
2022 2023 2024 2025
Gross profit margin (1) /H1118/H1118/H1118/H1118/H1118/H1118/H111844.7% 39.0% 34.1% 25.6%
Current ratio (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.8 1.8 4.0 6.5
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.7 1.2 3.6 5.8
Debt-to-asset ratio (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859.9% 52.4% 37.5% 31.8%
Notes:
(1) Gross profit margin is calculated using gross profit for the year/period divided by revenue for the year/period
and multiplied by 100%.
(2) Current ratio equals current assets divided by current liabilities as of the relevant year/period end.
(3) Quick ratio equals current assets excluding inventories divided by current liabilities as of the relevant
year/period end.
(4) Debt-to-Asset Ratio equals total liabilities divided by total assets multiplied by 100%.
Gross Profit Margin
Our gross profit margin decreased from 44.7% in 2022 to 39.0% in 2023, 34.1% in 2024 and
further to 25.6% for the nine months ended September 30, 2025, primarily due to the changes in the
offering mix and proportion of different service categories among each period. See “Financial
Information — Discussion of Results of Operations” for more details on our gross profit margin.
For a more comprehensive discussion of the factors affecting our key financial ratios during
the Track Record Period, see “Financial Information — Discussion of Results of Operations.”
FINANCIAL STRATEGIES
We had the following financial strategies to continue to grow our business and tackle potential
market fluctuations:
Expand Our Customer Base and Drive Revenue Growth
To maintain our sustained profitable growth in the long term, we intend to take the following
measures to drive revenue growth:
 Continue to strengthen and enhance our technologies. We intend to continue to address
the evolving needs of end customers. Through targeted R&D efforts, we aim to enhance
product performance and overcome technical bottlenecks. Specifically, we have been
pursuing advancements and improvements in technologies such as composite substrate
epitaxy, trench filling epitaxy, multi-layer epitaxy and ultra-thick epitaxy to further
improve the quality of our products and enhance their market competitiveness. The table
below sets forth the details about our certain ongoing R&D projects.
SUMMARY
–1 7–


--- page 28 ---
Projects Targets
1 /H1118/H1118SiC trench epitaxial refiling process Develop trench epitaxial refiling
technology to enable void-free SiC
epitaxy in trenches with a certain
depth-to-width ratio
2 /H1118/H1118High-quality SiC thick-film
homoepitaxial technology
Develop high-quality thick-film
epitaxial technologies to improve the
performance of our epitaxial wafers
in various aspects such as thickness
variation, doping concentration,
doping uniformity and surface defect
density
3 /H1118/H1118High-quality 6-inch multi-layer SiC
epitaxy technology
Develop high-quality 6-inch multi-
layer epitaxy technology and achieve
multiple epitaxial layers per wafer
with controlled interface transition
sharpness
4 /H1118/H1118High-uniformity 8-inch SiC epitaxial
wafer
Refine 8-inch epitaxial growth
technologies to improve the
performance of our epitaxial wafers
in various aspects, such as all-point
thickness tolerance, thickness
uniformity, all-point doping tolerance,
doping uniformity and surface defect
density
 Strategic focus on 8-inch SiC epitaxial wafers. We seek to strengthen our leadership in
the 8-inch SiC epitaxial wafer market, recognizing its growing importance in the
industry. We were the first in the world to achieve large-scale commercial supply of
8-inch SiC epitaxial wafers. Our sales volume for 8-inch SiC epitaxial wafers increased
from 285 pieces in 2023 to 7,466 pieces in 2024 and further increased from 6,057 pieces
for the nine months ended September 30, 2024 to 10,788 pieces for the same period in
2025. This growth reflects the industry’s accelerating adoption of 8-inch wafers, driven
by their clear advantages: 1.8 times increase in wafer area, a reduction in edge die ratio
from 14% to 7%, and a 90% boost in the number of bare dies per wafer. To meet the
market’s growing demand for 8-inch SiC epitaxial wafers, we are strategically allocating
additional manufacturing capacity to expand production of 8-inch SiC epitaxial wafers.
This approach not only positions us to capture greater market share but also enables us
to reduce fixed unit costs, further enhancing our competitiveness in the market. Our
Directors are of the view that, having achieved the commercialization capabilities for
8-inch SiC epitaxial wafers, we are able to leverage our first-mover advantage to mass
produce 8-inch SiC epitaxial wafers, meet the growing market demand and turn around
our financial performance to enhance profitability in the future.
 Continuously expanding market share for 6-inch SiC epitaxial wafers. Our sales volume
for 6-inch SiC epitaxial wafers increased from 81,633 pieces in 2022 to 199,708 pieces
in 2023, primarily due to the growth of downstream applications and demands from our
customers. Our sales volume for 6-inch SiC epitaxial wafers decreased from 199,708
pieces in 2023 to 156,584 pieces in 2024, primarily due to the larger stocking of our
downstream customers in 2023. Our sales volume for 6-inch SiC epitaxial wafers
increased from 126,648 pieces for the nine months ended September 30, 2024 to 137,184
pieces for the same period in 2025. According to CIC, this inventory adjustment cycle,
SUMMARY
–1 8–


--- page 29 ---
expected to conclude by the second half of 2026, reflects a cyclical rebalancing of
supply and demand as well as impact from the transition from 4-inch to 6-inch and
8-inch wafers rather than a structural decline in the market. From a long-term
perspective, the demand for SiC and SiC epitaxial wafer is expected to maintain strong
growth, driven by the significant potential of downstream industries. According to CIC,
the sales value generated by 6-inch epitaxial wafers is expected to increase from US$0.8
billion in 2024 to US$1.3 billion by 2029, with a CAGR of 9.4% from 2024 to 2029. To
strengthen our position in the 6-inch SiC epitaxial wafer market, we are actively
pursuing multiple strategic initiatives. These include implementing targeted marketing
efforts. In particular, we intend to strengthen our sales outreach by deploying a dedicated
field engagement team to build deeper relationships with key accounts and prospects. In
parallel, we plan to actively participate in leading industry exhibitions and academic
forums, both domestically and globally, to expand our market presence, capture
emerging opportunities, and strengthen customer relationships. These efforts will enable
us to better understand evolving market demands, identify new opportunities, and
solidify our position with existing customers, which will eventually lead to better sales
and operation results.
 Implement targeted market expansion plan to reach new customers. We seek to expand
our market presence through targeted strategies in order to connect with a broader
customer base. In the domestic market, our focus is on steadily growing our customer
base, deepening strategic partnerships with key accounts, developing innovative
downstream industry applications, and delivering increasingly competitive products as
we scale efficiently. In the international market, we aim to strengthen relationships with
global industry leaders by elevating product and service quality, ultimately bolstering
customer loyalty, and to offer agile, tailored solutions that maintain our competitive
edge. This dual approach could allow us to reach a broader customer pool both
domestically and internationally.
 Collaborate closely with downstream customers in joint R&D projects. By partnering
with customers on customized early-stage R&D projects, we seek to strengthen our
customer relationships and foster loyalty. This approach not only aligns our R&D focus
with customer-specific needs but also positions us as a trusted partner, enhancing
customer loyalty and long-term revenue potential. The table below sets forth the details
about our certain future R&D plans.
Projects Targets
1 /H1118/H1118SiC superjunction device epitaxial
technology
Develop and refine trench etching and
epitaxial refiling process.
2 /H1118/H11188-inch SiC epitaxial wafers with low
defect density
Develop SiC epitaxial growth
technologies with lower defect
density for 8-inch wafers.
 Explore new downstream market applications. Tapping into industries that have yet to
adopt SiC materials on a large scale, such as home appliances, AI computing power and
data centers, smart grids, energy storage and eVTOL, presents significant growth
opportunities. By tapping into these emerging markets, we could expand downstream
market applications, unlocking new revenue streams.
 Actively participate in promoting SiC and drive the adoption of SiC materials. We intend
to actively participate in market education initiatives to accelerate the adoption of SiC
materials in various use scenarios. Through publishing industry white papers and
standards, hosting technical seminars, attending industry exhibition and advocating the
advantages of SiC, we seek to raise awareness, shape industry standards, and drive the
SUMMARY
–1 9–


--- page 30 ---
market’s transition toward SiC solutions, fueling future growth. During the Track Record
Period, our efforts on participating industry exhibitions and initiatives in the
development of industry standards bolstered our industry recognition. This heightened
visibility strengthened our brand authority and played a role in translating market
interest into tangible business opportunities, supporting our order conversion efforts.
Looking ahead, we remain committed to sustaining and expanding these efforts. By
continuing to showcase our expertise through high-impact exhibitions and contributing
to the development of forward-looking industry standards, we aim to accelerate the
widespread adoption of SiC materials. This approach can help us to solidify our position
and drive scalable growth, enabling us to capture new market segments and expand our
business footprint strategically.
Improve Operational Efficiency and Enhance Operating Leverage
We aim to improve operating efficiency in every key aspect of our business. We expect to
improve our operational efficiency by implementing the following:
 Optimizing raw material costs. Our raw material costs amounted to RMB180.0 million,
RMB495.0 million, RMB411.3 million, RMB327.3 million and RMB214.2 million in
2022, 2023 and 2024 and for the nine months ended September 30, 2024 and 2025,
representing for 73.9%, 71.0%, 64.1%, 62.6% and 53.8%, respectively, of our total cost
of sales in the same periods. By periodically tracking market changes, we could monitor
and record raw material price fluctuations, timely recognize price trends and flexibly
adjust procurement plan in advance. We plan to continue to strengthen collaborations
with upstream suppliers to secure more favorable terms and develop a more cost-
effective raw material procurement strategy. Furthermore, improved process efficiency
and production yield rate also mitigate raw material expenditure on each wafer, and we
intend to implement targeted initiatives to integrate cost saving strategies with our
enhancing product quality and supply chain stability.
 Order-based production and inventory optimization. We plan to continue our order-
based production strategy, focusing on optimizing raw material stocking mechanisms to
enhance turnover efficiency and minimize inventory backlogs. By aligning production
closely with demand, we aim to streamline operations, reduce excess inventory, and
establish an efficient supply chain. For example, we intend to coordinate our upstream
suppliers for shorter procurement cycles, so as to increase storage flexibility and reduce
inventory backlogs. We also plan to categorize our inventories to realize refined
management. For critical materials with high value and low quantity, we intend to
implement frequent stocktaking and stringent management policy. For low-value bulk
materials, we intend to simplify the management procedure and maintain necessary
secure inventory level.
 Enhancing operational efficiency through advanced production line automation. We
plan to prioritize production line automation upgrades to enhance per capita output and
reduce unit labour costs, driving operational efficiency and improving utilization rates.
For example, in the manual labor-dependent processes of precise substrate loading and
epitaxial wafer unloading, we plan to utilize an integrated multi-axis robotic system with
vision positioning to achieve highly precise automated operations. Higher level of
automation can reduce our unit cost and improve production efficiency. We believe these
efforts establish a scalable automation model for future production expansion, while
supporting our long-term operational efficiency.
Based on the foregoing, our Directors believe that the aforementioned measures will be
effective and sustainable in improving our operating and financial performance. Considering the
independent due diligence conducted by the Sole Sponsor, nothing has come to the attention of the
Sole Sponsor which would cause them to cast reasonable doubt on the Company’s view above.
SUMMARY
–2 0–


--- page 31 ---
WORKING CAPITAL
Taking into account the financial resources available to us, including anticipated cash flow
from our operating activities, existing cash and cash equivalents, available bank facilities and the
estimated net proceeds from the Global Offering, our Directors believe that we have sufficient
working capital for our present requirements and for the next 12 months from the date of this
Prospectus.
We intend to finance our future working capital requirements and capital expenditures
primarily from cash expected to be generated from operating activities, bank facilities and funds
raised from financing activities, including the net proceeds we will receive from the Global
Offering.
GLOBAL OFFERING STATISTICS
All statistics in the following table are based on the assumptions that (i) the Global Offering
has been completed and 21,492,050 Offer Shares are issued pursuant to the Global Offering; and
(ii) 425,584,810 Shares are issued and outstanding following the completion of the Global Offering.
Based on an Offer
Price of HK$76.26
per Offer Share
Market capitalization of our Shares (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$32,455.1
million
Unaudited pro forma adjusted consolidated
net tangible assets per Offer Share (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$11.37
Notes:
(1) The calculation of the market capitalization of our Shares is based on 425,584,810 Shares expected to be in
issue immediately after completion of the Global Offering.
(2) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the Company per
Share as of September 30, 2025 has been arrived at after adjustments referred to in “Unaudited Pro Forma
Financial Information” in Appendix II to this Prospectus.
DIVIDENDS
During the Track Record Period, no dividends have been declared and paid by us.
As of the Latest Practicable Date, we did not have a formal dividend policy or a fixed dividend
distribution ratio. PRC laws require that dividends be paid only out of our distributable profits.
Distributable profits are our after-tax profits, less appropriations to statutory and other reserves that
we are required to make. Pursuant to our Articles of Association, our Board may declare dividends
in the future after taking into account our results of operations, financial conditions, cash
requirements and availability, and other factors as it may deem relevant at such time. Any
declaration and payment as well as the amount of dividends will be subject to our constitutional
documents, applicable PRC laws and approval by our Shareholders.
LEGAL PROCEEDINGS AND COMPLIANCE
During the Track Record Period and up to the Latest Practicable Date, we had not been
involved in any actual or pending legal, arbitration or administrative proceedings (including any
bankruptcy or receivership proceedings) that we believe would have a material adverse effect on our
business, results of operations, financial condition or reputation and compliance.
SUMMARY
–2 1–


--- page 32 ---
According to our PRC Legal Adviser, the business operations we engaged in had been carried
out in compliance with applicable PRC laws and regulations in all material respects during the
Track Record Period and up to the Latest Practicable Date.
FUTURE PLANS AND USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$1,560.1 million, after deducting underwriting commissions, fees and estimated expenses
payable by us in connection with the Global Offering, based on an Offer Price of HK$76.26 per
Offer Share.
In line with our strategies, we intend to use the net proceeds for the following purposes,
subject to changes with respect to our evolving business needs and changing market conditions:
 approximately 71% of the net proceeds, or HK$1,107.7 million, will be used to expand
our production capacity of the SiC epitaxial wafers in a disciplined and prudent manner
over the next five years, in response to the growing market demands;
 approximately 19% of the net proceeds, or HK$296.4 million, will be used in the R&D
of SiC epitaxial wafers to enhance our technical capabilities and solidify our technical
advantages; and
 approximately 10% of the net proceeds, or HK$156.0 million, will be used as working
capital and for general corporate purposes.
For details, please see “Future Plans and Use of Proceeds.”
LISTING EXPENSES
Our listing expenses mainly include (i) underwriting-related expenses, such as underwriting
fees and commissions, and (ii) non-underwriting-related expenses, comprising professional fees
paid to our legal advisors, consultants and Reporting Accountants for their services rendered in
relation to the Listing and the Global Offering, and other fees and expenses. Based on the Offer
Price of HK$76.26, the total listing expenses (including underwriting commissions) payable by our
Company are estimated to be approximately HK$78.9 million (equivalent to approximately
RMB72.0 million), of which HK$31.4 million had been and is expected to be charged to our
consolidated statements of profit or loss and HK$47.5 million is expected to be charged against
equity upon the Listing. These listing expenses mainly comprise professional fees paid and payable
to the professional parties, and commissions payable to the Underwriters, for their services rendered
in relation to the Listing and the Global Offering. During the Track Record Period, we had
recognized listing expenses in relation to the Listing of approximately RMB17.4 million to our
consolidated statements of profit or loss and had prepaid listing expenses and deferred issue costs
of RMB6.2 million to our consolidated statement of financial position. During the Track Record
Period, we also recognized an additional amount of RMB8.5 million expenses in relation to our
prior A share listing application, accounting for an aggregate of RMB25.9 million listing-related
expenses.
We estimate that additional listing expenses of RMB48.4 million (including underwriting
commissions of RMB37.4 million, based on an Offer Price of HK$76.26 per Offer Share),
accounting for 2.95% of our gross proceeds, will be further incurred by our Group, of which
RMB11.3 million is expected to be charged to our consolidated statements of profit or loss and
RMB37.1 million is expected to be charged against equity upon the Listing.
SUMMARY
–2 2–


--- page 33 ---
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
In December 2025, we announced the world’s first launch of 12-inch SiC epitaxial wafers.
With their larger diameter, the 12-inch wafers can significantly increase the number of chips
(devices) produced per wafer under the same manufacturing processes, reducing the unit
manufacturing cost of SiC chips.
We expect a significant decrease in net profit for the year ending December 31, 2025 and net
loss in the fourth quarter of 2025, despite our continued efforts in expanding customer base,
enhancing the competitiveness of our products, and improving gross margin. The decrease in our
net profit is attributable to a number of factors including: (i) average selling prices of SiC epitaxial
wafers are lower in 2025 as compared to 2024 and if the inventory de-stocking of downstream
industry of SiC industry persists, which may continue to exert pricing pressure on us, we may
continue to experience significant decrease in our net profit; (ii) share-based payment expenses
remained and will remain an ongoing expense from 2025 to 2029, as we provide long-term incentive
programs to employees to motivate and retain talent; and (iii) we incurred larger amount of listing
expenses in 2025, whereas the listing expenses in 2024 were relatively minimal. We expect to
continue to be adversely affected if the depressing industry trend persists in the near future, while
in the long-term, we have implemented a range of measures to enhance our profitability. For details
on our concrete plan to expand our revenue, see “Financial Information — Financial Strategies.”
Our Directors confirm that, as of the date of the Prospectus, there has been no material adverse
change in our financial or trading position, indebtedness, mortgage, contingent liabilities,
guarantees or prospects since September 30, 2025, the end of the period reported on the
Accountant’s Report included in Appendix I to this Prospectus; and there has been no event since
September 30, 2025 which would materially affect the information presented in the Accountant’s
Report set out in Appendix I to this Prospectus.
The unaudited financial information as of and for the year ended December 31, 2025 have
been agreed with the Reporting Accountants following their review under Practice Note 730
“Guidance for Auditors Regarding Preliminary Announcements of Annual Results” issued by the
Hong Kong Institute of Certified Public Accountants. Our unaudited financial information for the
year ended December 31, 2025 is set out in Appendix III to this Prospectus.
IMPACT OF THE TARIFFS
On November 1, 2025, the U.S. government released a fact sheet that documents the latest
actions to be taken by the U.S. and Chinese governments to relax tariff and other trade controls as
a result of a trade and economic deal reached between the two sides. The U.S. will, among other
measures, lower the tariffs on Chinese imports by removing 10 percentage points of the cumulative
rate, effective November 10, 2025, and will maintain its suspension of heightened reciprocal tariffs
on Chinese imports until November 10, 2026. The U.S. will further extend the expiration of certain
Section 301 tariff exclusions, currently due to expire on November 29, 2025, until November 10,
2026. The U.S. also will suspend for one year, starting on November 10, 2025, the implementation
of the interim final rule titled Expansion of End-User Controls to Cover Affiliates of Certain Listed
Entities. These are all measures to relax tariff and other trade controls, and therefore the Directors
and legal adviser engaged in connection with the foregoing matters are of the view that these recent
regulatory developments do not have any material adverse impact on the Group’s business
operations and financial performance. Our Directors will continue to monitor developments
regarding relevant tariffs.
For a detailed discussion of tariffs applicable to us and the related risks, see “Risk Factors —
Risks Relating to Our Business and Industry — Our business, financial condition and results of
operations may be materially and adversely affected by geopolitical tensions, international trade
policies, international export controls and economic sanctions” and “Regulatory Overview — Latest
Outlook on U.S. Tariff.”
SUMMARY
–2 3–


--- page 34 ---
UPDATES ON FINANCIAL INFORMATION
Save as disclosed in the section headed “Financial Information” and the Accountants’ Report
included in Appendix I to this Prospectus, our Directors confirm that, as of the date of this
Prospectus, there has been no material adverse change in our financial or trading position,
indebtedness, mortgage, contingent liabilities, guarantees or prospects of our Group since
September 30, 2025, the end of the period reported on in the Accountants’ Report set out in
Appendix I to this Prospectus.
The unaudited financial information as of and for the year ended December 31, 2025 have
been agreed with the Reporting Accountants following their review under Practice Note 730
“Guidance for Auditors Regarding Preliminary Announcements of Annual Results” issued by the
Hong Kong Institute of Certified Public Accountants. Our unaudited financial information for the
year ended December 31, 2025 is set out in Appendix III to this Prospectus.
SUMMARY
–2 4–


--- page 35 ---
In this Prospectus, unless the context otherwise requires, the following terms and
expressions shall have the meanings set out below. Certain other terms are explained in
“Glossary of Technical Terms”.
“Accountants’ Report” the accountants’ report of our Company prepared by BDO
Limited, 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 of our Company, as amended from
time to time, which shall become effective upon the Listing
Date, a summary of which is set out in Appendix IV to this
Prospectus
“associate(s)” has the meaning ascribed thereto under the Listing Rules
“Audit Committee” the audit committee of the Board
“Board” or “our Board” the board of Directors
“Business Day” a day on which banks in Hong Kong are generally open to
the public for normal business and which is not a Saturday,
Sunday or public holiday in Hong Kong
“Capital Market Intermediary(ies)”,
“capital market
intermediary(ies)”
or “CMI(s)”
the capital market intermediaries participating in the Global
Offering, with the meaning ascribed thereto under the
Listing Rules
“CCASS” the Central Clearing and Settlement System established and
operated by HKSCC
“Chantou Juxiang Xinhan” Xiamen Chantou Juxiang Xinhan Technology Investment
Partnership Enterprise (Limited Partnership) (ڃ
Ҧҳ༟ΥྫΆุ(Υྫ)), a limited partnership
established in the PRC on December 20, 2024
“China”, “mainland China”,
or “PRC”
the People’s Republic of China, which, for the purposes of
this Prospectus and for geographical reference only,
excludes Hong Kong, the Macao Special Administrative
Region of the People’s Republic of China, and Taiwan
Region
DEFINITIONS
–2 5–


--- page 36 ---
“China Resources
Microelectronics”
China Resources Microelectronics Holdings Company
Limited (ʮ̡), a limited liability
company established in the PRC on June 30, 2017
“CIC” China Insights Industry Consultancy Limited, an
independent professional market research and consulting
company, which is an Independent Third Party
“CIC Report” an independent market research report commissioned by us
and prepared by CIC for the purposes of this Prospectus
“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”
Epiworld International Co., Ltd. (Ҧ(ژ)ٰ
ʮ̡), formerly known as Hantian Tiancheng Electronics
Technology (Xiamen) Co., Ltd. (Ҧ(ژ)ࠢ
ʮ̡) and Hantian Taicheng Electronics Technology (Xiamen)
Co., Ltd. (Ҧ(ژ)ʮ̡), a limited
liability company established in the PRC on March 31, 2011 and
converted into a joint stock company with limited liability on
May 25, 2023
“Compliance Adviser” Rainbow Capital (HK) 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
“core connected person(s)” has the meaning ascribed thereto under the Listing Rules
“Corporate Governance Code” the Corporate Governance Code set out in Appendix C1 to
the Listing Rules
“CSDCC” China Securities Depository and Clearing Corporation
Limited (ப΂ʮ̡)
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ
ึ)
“Dangfeng Technology” Xiamen Dangfeng Technology Co., Ltd. (ҦϞ
ʮ̡), a limited liability company established in the PRC
on November 21, 2014
DEFINITIONS
–2 6–


--- page 37 ---
“Director(s)” or “our Director(s)” the director(s) of our Company
“Dongzheng Ruikun” Zhuji Dongzheng Ruikun Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆุ(Ϟ
Υྫ)), a limited partnership established in the PRC on
October 30, 2020
“Dr. Zhao” Dr. Zhao Jianhui (ሾ), our founder, chairman of the
Board, an executive Director and our Single Largest
Shareholder
“EIT” the PRC enterprise income tax
“EIT Law” the PRC Enterprise Income Tax Law ( ʕശɛ͏΍ձ਷Ά
)
“Epiworld Core” Xiamen Hantian Nuclear Core Enterprise Management
Partnership (Limited Partnership) (Άุ၍ଣ
ΥྫΆุ(Υྫ)), formerly known as Xiamen Hantian
Nuclear Core Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)),
a limited partnership established in the PRC on December 2,
2020, details of which are set out in “History, Development
and Corporate Structure — Employee Shareholding
Platform” in this Prospectus
“Epiworld Hong Kong” EPINOV A LIMITED, a private limited company
incorporated in Hong Kong on December 10, 2025, and a
wholly owned subsidiary of the Company
“Epiworld Malaysia” EPICENTER SDN. BHD., a limited liability company
established in Malaysia, and an indirectly wholly owned
subsidiary of the Company
“Epiworld Materials” Epiworld Semiconductor Materials (Xiamen) Co., Ltd. ( ᖍ
ࣘ(ژ)ʮ̡), a limited liability
company established in the PRC on May 31, 2024, and a
wholly owned subsidiary of the Company
“Epiworld Singapore” APEXIV INTERNA TIONAL PTE. LTD., a limited liability
company established in Singapore, and a wholly owned
subsidiary of the Company
“Exchange Participant” a person (a) who, in accordance with the Listing Rules, may
trade on or through the Hong Kong Stock Exchange; and (b)
whose name is entered in a list, register or roll kept by the
Hong Kong Stock Exchange as a person who may trade on
or through the Hong Kong Stock Exchange
“Extreme Conditions” extreme conditions as announced by the government of
Hong Kong in the case where a super typhoon or other
natural disaster of a substantial scale seriously affects the
working public’s ability to resume work or brings safety
concern for a prolonged period
DEFINITIONS
–2 7–


--- page 38 ---
“FINI” “Fast Interface for New Issuance”, the 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 the Listing
“General Rules of HKSCC” the General Rules of HKSCC as may be amended or
modified from time to time and where the context so
permits, shall include the HKSCC Operational Procedures
“Global Coordinators” the global coordinators as named in the section headed
“Directors, Supervisors and Parties Involved in the Global
Offering” in this Prospectus
“Global Offering” the Hong Kong Public Offering and the International
Offering
“Greater China” the People’s Republic of China, which, for the purposes of
this Prospectus and for geographical reference only,
includes Hong Kong, the Macao Special Administrative
Region of the People’s Republic of China, and Taiwan
Region
“Group”, “our Group”, “our”,
“we”, or “us”
our Company and its subsidiaries, or any one of them as the
context may require, and where the context requires, the
businesses operated by our Company and/or its subsidiaries
and their predecessors (if any)
“Guide for New Listing
Applicants”
the Guide for New Listing Applicants issued by the Hong
Kong Stock Exchange, as amended, supplemented or
otherwise modified from time to time
“Hainan Zhentai” Hainan Zhentai V enture Capital Partnership (Limited
Partnership) (ጲइ௴ุҳ༟ΥྫΆุ(Υྫ))
formerly known as Hainan Zhentai V enture Capital
Investment Fund Partnership (Limited Partnership) (ጲ
ΥྫΆุ(Υྫ)) and Hangzhou
Zhentai Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), a
limited partnership established in the PRC on May 14, 2020
“H Share(s)” listed 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 Hong Kong Stock Exchange
“H Share Registrar” Computershare Hong Kong Investor Services Limited
“Hefei Tiancheng” Hefei Chantou Tiancheng Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆุ(Ϟ
Υྫ)), a limited partnership established in the PRC on
December 22, 2022
DEFINITIONS
–2 8–


--- page 39 ---
“HK$”, “HKD” or “Hong Kong
dollars”
Hong Kong dollar(s), the lawful currency of Hong Kong
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC EIPO ” the application for 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 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 CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as in force from
time to time
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the PRC
“Hong Kong Offer Shares” 2,149,250 H Shares (subject to reallocation as described in
the section headed “Structure of the Global Offering” in this
Prospectus) initially offered by our Company for
subscription at the Offer Price pursuant to the Hong Kong
Public Offering
“Hong Kong Public Offering” the offering of the Hong Kong Offer Shares for subscription
by the public in Hong Kong at the Offer Price (plus
brokerage, SFC transaction levy, AFRC transaction levy and
Stock Exchange trading fee), on and subject to the terms and
conditions described in “Structure of the Global Offering —
The Hong Kong Public Offering” in this Prospectus
“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
DEFINITIONS
–2 9–


--- page 40 ---
“Hong Kong Takeovers Code” or
“Takeovers Code”
the Codes on Takeovers and Mergers and Share Buy-backs
issued by the SFC, as amended, supplemented or otherwise
modified from time to time
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listed in
the section headed “Underwriting — The Hong Kong
Underwriters” in this Prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated March 19, 2026 relating
to the Hong Kong Public Offering entered into by, among
others, our Company, the Sponsor-Overall Coordinator and
the Hong Kong Underwriters, as further described in the
section headed “Underwriting — Underwriting
Arrangements and Expenses — The Hong Kong Public
Offering — Hong Kong Underwriting Agreement” in this
Prospectus
“Huajin Mingjiade” Ningbo Huajin Mingjiade V enture Capital Partnership
(Limited Partnership) (ശᎀთྗᅃ௴ุҳ༟ΥྫΆุ(Ϟ
Υྫ)), a limited partnership established in the PRC on
April 13, 2023
“Huajin Y uxing” Ningbo Huajin Y uxing V enture Capital Partnership (Limited
Partnership) (ശᎀ๬ጳ௴ุҳ༟ΥྫΆุ(Υྫ)),
a limited partnership established in the PRC on April 10,
2023
“Huangshan Saifu” Huangshan Saifu Tourism Culture Industry Development
Fund (Limited Partnership) (ਿ
ږ(Υྫ)), a limited partnership established in the PRC
on January 5, 2018
“Hubble Technology” Hubble Technology V enture Capital Co., Ltd. (Ҧ௴
ʮ̡)), formerly known as Hubble Technology
Investment Co., Ltd. (ʮ̡), a limited
liability company established in the PRC on 23 April 2019
“Huiyou Chuangjia” Shenzhen Huiyou Chuangjia V enture Investment
Partnership (L.P .) (Limited Partnership) ( ଉέ̹౉ʾ௴ྗ௴
ุҳ༟ΥྫΆุ(Υྫ)), a limited partnership
established in the PRC on May 31, 2017
“Huzhou Runxu” Huzhou Runxu Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), a
limited partnership established in the PRC on December 24,
2021
“ICBC Investment” ICBC Financial Asset Investment Co., Ltd. (ፄ༟ପ
ʮ̡), a company with limited liability established
in the PRC on September 26, 2017
DEFINITIONS
–3 0–


--- page 41 ---
“IFRSs” the International Financial Reporting Standards, which
include standards, amendments and interpretations
promulgated by IASB and the International Accounting
Standards (IAS) and interpretations issued by the
International Accounting Standards Committee (IASC)
“IIT Law” the Individual Income Tax Law of the PRC ( ʕശɛ͏΍
)
“Independent Third Party(ies)” any person(s) or entity(ies) who is not a connected person of
the Company within the meaning of the Listing Rules
“International Offer Shares” the 19,342,800 H Shares offered by our Company pursuant
to the International Offering (subject to reallocation as
described in the section headed “Structure of the Global
Offering” in this Prospectus)
“International Offering” the conditional placing of the International Offer Shares by
the International Underwriters at the Offer Price outside the
United States in offshore transactions in reliance on
Regulation S, in each case on and subject to the terms and
conditions of the International Underwriting Agreement, as
further described in the section headed “Structure of the
Global Offering — The International Offering” in this
Prospectus
“International Underwriters” the group of international underwriters who are expected to
enter into the International Underwriting Agreement to
underwrite the International Offering
“International Underwriting
Agreement”
the underwriting agreement relating to the International
Offering expected to be entered into on or about March 26,
2026 by our Company and the International Underwriters, as
further described in the section headed “Underwriting —
Underwriting Arrangements and Expenses — The
International Offering” in this Prospectus
“Jiadong Wuyuan” Xiamen Jiadong Wuyuan Investment Partnership (Limited
Partnership) (৫ҳ༟ΥྫΆุ(Υྫ)), a
limited partnership established in the PRC on September 28,
2022
“Jiangyin Yinrun” Jiangyin Yinrun Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), a
limited partnership established in the PRC on November 25,
2022
“Joint Bookrunners” the joint bookrunners as named in the section headed
“Directors, Supervisors and Parties Involved in the Global
Offering” in this Prospectus
DEFINITIONS
–3 1–


--- page 42 ---
“Joint Lead Managers” the joint lead managers as named in the section headed
“Directors, Supervisors and Parties Involved in the Global
Offering” in this Prospectus
“Latest Practicable Date” March 10, 2026, being the latest practicable date for the
purpose of ascertaining certain information contained in this
Prospectus prior to its publication
“Liaoning Haitong” Liaoning Haitong New Kinetic Energy Equity Investment
Fund Partnership (Limited Partnership) (ٰ
ΥྫΆุ(Υྫ)), a limited partnership
established in the PRC on January 20, 2020
“Listing” listing of the H Shares on the Main Board of the Hong Kong
Stock Exchange
“Listing Committee” the listing committee of the Hong Kong Stock Exchange
“Listing Date” the date, expected to be on or about Monday, March 30,
2026, on which our H Shares are to be listed and from which
dealings therein are permitted to take place on the Hong
Kong Stock Exchange
“Listing Rules” the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited, as amended,
supplemented or otherwise modified from time to time
“Main Board” the stock exchange (excluding the option market) operated
by the Hong Kong Stock Exchange which is independent
from and operates in parallel with the GEM of the Hong
Kong Stock Exchange
“MOF” the Ministry of Finance of the PRC (݁
௅)
“MOFCOM” the Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷ਠਕ
௅)
“NDRC” the National Development and Reform Commission of the
PRC (ึ)
“Ningbo Fuchi” Ningbo Fuchi Enterprise Management Consulting
Partnership (Limited Partnership) (బϫΆุ၍ଣፔ༔
ΥྫΆุ(Υྫ)), a limited partnership established in
the PRC on December 19, 2018
“Ningbo Fuwurong” Ningbo Fuwurong Wuxiali Equity Investment Fund
Partnership (Limited Partnership) (ᛆ
ΥྫΆุ(Υྫ)), a limited partnership
established in the PRC on October 8, 2022
DEFINITIONS
–3 2–


--- page 43 ---
“Ningbo Qiaowang” Ningbo Meishan Bonded Port Zone Qiaowang Equity
Investment Partnership (Limited Partnership) (ڭ
ᛆҳ༟ΥྫΆุ(Υྫ)), a limited
partnerships established in the PRC on June 15, 2017
“Nomination Committee” the nomination committee of the Board
“NPC” the National People’s Congress of the PRC ( ʕശɛ͏΍ձ
ɽึ)
“Offer Price” HK$76.26, being the price per Offer Share (exclusive of
brokerage of 1%, SFC transaction levy of 0.0027%, Hong
Kong Stock Exchange trading fee of 0.00565% and AFRC
transaction levy of 0.00015%) at which the Offer Shares are
to be subscribed for and issued pursuant to the Global
Offering as described in the section headed “Structure of the
Global Offering” in this Prospectus
“Offer Share(s)” the Hong Kong Offer Shares and the International Offer
Shares
“Overall Coordinators” the overall coordinators as named in the section headed
“Directors, Supervisors and Parties Involved in the Global
Offering” in this Prospectus
“Overseas Listing Trial Measures” the Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Companies and five
supporting guidelines ( ྤʫΆุྤ̮೯БᗇՎձɪ̹၍
ˏ) promulgated by the CSRC
on February 17, 2023 which became effective on March 31,
2023
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ), the central
bank of the PRC
“PRC Company Law” the Company Law of the PRC (جas
amended, supplemented or otherwise modified from time to
time
“PRC GAAP” generally accepted accounting principles of the PRC
“PRC Legal Adviser” Jingtian & Gongcheng, the PRC legal adviser to our
Company in connection with the Global Offering
“PRC Securities Law” the Securities Law of the PRC (جas
amended, supplemented or otherwise modified from time to
time
“Pre-IPO Investment(s)” the investment(s) in our Group undertaken by the Pre-IPO
Investors prior to this initial public offering, details of
which are set out in “History, Development and Corporate
Structure” in this Prospectus
DEFINITIONS
–3 3–


--- page 44 ---
“Pre-IPO Investor(s)” the investor(s) making investments in our Group prior to
this initial public offering as set out in “History,
Development and Corporate Structure” in this Prospectus
“Prospectus” this prospectus being issued in connection with the Hong
Kong Public Offering
“Puyuan Pengyuan” Puyuan Pengyuan (Xiamen) Investment Partnership
(Limited Partnership) (ᘄჃ(ژ)ҳ༟ΥྫΆุ(ࠢ
Υྫ)) formerly known as Puyuan (Xiamen) Investment
Partnership (Limited Partnership) (ࡡ(ژ)ҳ༟ΥྫΆุ
(Υྫ)), a limited partnership established in the PRC on
April 25, 2018
“Qingda Runyu” Xiamen Qingda Runyu V enture Capital Partnership (Limited
Partnership) (̹૶ɽᆗ͗௴ุҳ༟ΥྫΆุ (Υ
ྫ)), a limited partnership established in the PRC on January
12, 2022
“Qingda Xinsheng” Xiamen Qingda Xinsheng V enture Capital Partnership
(Limited Partnership) (ସ௴ุҳ༟ΥྫΆุ(Ϟ
Υྫ)), a limited partnership established in the PRC on
August 1, 2022
“Qingyue Jingfu” Xiamen Qingyue Jingfu Investment Partnership (Limited
Partnership) (ԯ၅ҳ༟ΥྫΆุ(Υྫ)), a
limited liability partnership established in the PRC on
October 31, 2022
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration Committee” the remuneration committee of the Board
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“SAFE” the State Administration of Foreign Exchange of the PRC
(̮ි၍ଣ҅)
“Saifu Jinzuan” Xiamen Saifu Jinzuan Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆุ(Ϟ
Υྫ)), a limited partnership established in the PRC on
May 22, 2017
“SAMR” the State Administration for Market Regulation of the PRC
(̹ఙ္ຖ၍ଣᐼ҅)
“SA T” the State Taxation Administration of the PRC ( ʕശɛ͏΍
೼ਕᐼ҅)
“SFC” the Securities and Futures Commission of Hong Kong
DEFINITIONS
–3 4–


--- page 45 ---
“SFO” or “Securities and Futures
Ordinance”
the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Shanghai Minshenshi” Shanghai Minshenshi Management Consulting Partnership
(Limited Partnership) ( ɪऎઽ͡ྼ၍ଣፔ༔ΥྫΆุ(ࠢ
Υྫ)), a limited partnership established in the PRC on May
9, 2023
“Shanghai Tianli” Shanghai Tianli Enterprise Management Center (Limited
Partnership) ( ɪऎ˂ᓿΆุ၍ଣʕː(Υྫ)), a limited
partnership established in the PRC on August 30, 2019
“Shanghai Zhezhong” Shanghai Zhezhong Group Co., Ltd. (΅Ϟ
ʮ̡), formerly known as Shanghai Zhezhong
Construction Co., Ltd. (ʮ̡) and
Shanghai Zhezhong Large-scale Pipe Pile Co., Ltd. ( ɪऎᬜ
ʮ̡) (stock code: 002346.sz), a company
listed on the Shenzhen Stock Exchange
“Share(s)” ordinary share(s) in the capital of our Company with a
nominal value of RMB1.00 each, including H Shares and
Unlisted Shares
“Shareholder(s)” holder(s) of the Share(s)
“Single Largest Shareholder” refers to Dr. Zhao Jianhui (ሾ)
“Sole Sponsor” and
“Sponsor-Overall Coordinator”
the sole sponsor and sponsor-overall coordinator as named
in the section headed “Directors, Supervisors and Parties
Involved in the Global Offering” in this Prospectus
“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
“Supervisor(s)” supervisor(s) of the Company
“Supervisory Committee” the committee of the Supervisors
“Torch Capital” Xiamen Torch Group V enture Capital Co., Ltd. (ණ
ʮ̡), a limited liability company
established in the PRC on April 5, 2004
“Track Record Period” the period comprising the three financial years ended
December 31, 2022, 2023 and 2024, and the nine months
ended September 30, 2025
“treasury shares” has the meaning ascribed thereto under the Listing Rules
DEFINITIONS
–3 5–


--- page 46 ---
“U.S. dollars”, “US$” or “USD” United States dollars, the lawful currency of the United
States
“U.S. persons” U.S. persons as defined in Regulation S
“U.S. Securities Act” the U.S. Securities Act of 1933, as amended, supplemented
or otherwise modified from time to time
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and/or the
International Underwriting Agreement, as the context may
require
“United States” or “U.S.” the United States of America, its territories and possessions,
any State of the United States, and the District of Columbia
“Unlisted Share(s)” ordinary share(s) issued by our Company, with a nominal
value of RMB1.00 each, which is/are not listed on any stock
exchange
“V A T” value-added tax
“Wangrui Hancheng” Xiamen Wangrui Hancheng Enterprise Management
Partnership (Limited Partnership) (ૐြᖍϓΆุ၍ଣ
ΥྫΆุ(Υྫ)), a limited partnership established in
the PRC on July 10, 2025
“White Form eIPO ” the application process for Hong Kong Offer Shares with
applications issued in the applicant’s own name
and submitted online through the designated website
of the White Form eIPO Service Provider at
www.eipo.com.hk
“White Form eIPO Service
Provider”
Computershare Hong Kong Investor Services Limited
“Xiamen Chantou Gongrong” Xiamen Chantou Gongrong Emerging Industry Equity
Investment Fund Partnership (Limited Partnership)
(ΥྫΆุ(Υྫ)),
a limited partnership established in the PRC on December
16, 2024.
“Xiamen Gongrong Industry” Xiamen Gongrong Industry Investment Emerging Industry
Equity Investment Fund Partnership (Limited Partnership)
(ΥྫΆุ(Υྫ)),
a limited partnership established in the PRC on December
16, 2024
DEFINITIONS
–3 6–


--- page 47 ---
“Xiamen Hi-Tech Investment” Xiamen Hi-tech Innovation Angel Investment Co.,
Ltd. (ʮ̡), a limited
liability company established in the PRC on March 11, 2013
“Xiamen Hongyuan” Xiamen Zhongnan Hongyuan Equity Investment Fund
Partnership (L.P .) (ΥྫΆุ(Ϟ
Υྫ)), a limited partnership established in the PRC on
April 13, 2017
“Xiamen Hongxing” Xiamen Hongxing Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), a
limited partnership established in the PRC on June 4, 2019
“Xiamen Jushenghua” Xiamen Jushenghua V enture Capital Partnership (Limited
Partnership) (ସശ௴ุҳ༟ΥྫΆุ(Υྫ)), a
limited partnership established in the PRC on September 5,
2019
“Xiamen Spark” South China (Xiamen) Spark V enture Capital (˦
ᛆҳ༟ΥྫΆุ(Υྫ)), a limited partnership
established in the PRC on July 9, 2018
“Xike Zhongheng” Xiamen Xike Zhongheng Investment Partnership (Limited
Partnership) (଺㛬ҳ༟ΥྫΆุ(Υྫ)), a
limited partnership established in the PRC on January 7,
2013
“Xincheng Zhongchuang” Xiamen Xincheng Zhongchuang Investment Partnership
Enterprise (Limited Partnership) (ϓ଺௴ҳ༟ΥྫΆ
ุ(Υྫ)), a limited partnership established in the PRC
on July 24, 2017
“%” per cent
DEFINITIONS
–3 7–


--- page 48 ---
This glossary contains definitions of certain technical terms used in this Prospectus in
connection with us and our business. These may not correspond to standard industry
definitions and may not be comparable to similarly terms adopted by other companies.
“AC” alternating current
“BPD” basal plane dislocation, a type of crystal defect in SiC and
other semiconductor materials, where a slip or disruption
occurs along the basal plane of the crystal structure, creating
a localized region of structural imperfection
“BPD conversion” a technology that converts BPDs existing in the substrate
into electrically benign threading edge dislocations (TEDs)
during specific SiC epitaxial growth
“CAGR” compound annual growth rate
“CIM system” computer integrated manufacturing system, a system used to
integrate and control the entire production process
“CVD” chemical vapor deposition, a process in which gaseous
chemicals react on a heated wafer surface to form solid film
“C/Si ratio” the proportion of carbon to silicon atoms in the gas mixture
used during epitaxial growth of SiC layers that affects
crystal quality, defect levels and doping in SiC epitaxy
“DC-DC converters” an electronic circuit that converts a source of direct current
(DC) from one voltage level to another
“doping” the intentional introduction of impurities into the
semiconductor material to modify its electrical properties
“EAP” equipment automation program system, acts as the interface
between manufacturing systems (MES) and production
equipment (such as CVD reactors), ensuring precise and
automated wafer processing
“epitaxial foundry” An epitaxial foundry is a company that specializes in
manufacturing epitaxial wafers and providing epitaxial
wafer growth services for external customers, which does
not include those who produce epitaxial wafers for large-
scale self-use
“epitaxial growth” a process of crystal growth or material deposition where
new crystalline layers are formed with well-defined
orientations on a substrate enhancing the performance of
semiconductor devices
GLOSSARY OF TECHNICAL TERMS
–3 8–


--- page 49 ---
“ERP system” enterprise resource planning system, a system that
organizations use to manage and integrate various business
processes
“ESS” energy storage system, which stores energy for use at a later
time, helping to balance supply and demand in energy
systems
“EV” electric vehicle, a type of vehicle that is powered entirely or
partially by electricity
“eVTOL” electric vertical take-off and landing, a technology that
enables flying vehicle to take off and land vertically and
powered by electricity
“FDC” fault detection and classification, a critical real-time
monitoring and analytics platform that tracks equipment
sensor data (such as temperature, pressure, radio frequency
power) to detect process deviations, classify fault types,
preventing wafer scrap and improving yield
“foundry” a manufacturer specializing in the production and
manufacture of chips in the field of integrated circuits
“frequency” the rate at which a power electronic device, such as a switch
or rectifier, operates. It is a crucial factor influencing the
performance and efficiency of power systems
“GaAs” Gallium Arsenide, a compound made from gallium and
arsenic used in electronics and optoelectronics
“GaN” Gallium Nitride, a compound made from gallium and
nitrogen used in electronics
“IDM” integrated device manufacturer
“IA TF16949” international technical specification of automotive industry
quality management system, which is prepared by
International Automotive Task Force (IA TF)
“inch” the standard unit of measurement used to denote the
diameter of substrates. In the semiconductor industry, the
common sizes for substrates include 3-inch (76.2mm),
4-inch (100mm), 6-inch (150mm) and 8-inch (200mm)
“integrated circuit” integrated circuit, a small unit or package which is made as
a single indivisible structure (such as a chip) and is
electrically equivalent to a conventional circuit of many
separate components
“inverter” a power electronic device that converts direct current
electricity into alternating current electricity
GLOSSARY OF TECHNICAL TERMS
–3 9–


--- page 50 ---
“maximum available production
capacity”
the maximum available operational capacity of
manufacturing equipment calculated based on the maximum
hourly capacity and working hours in a given year. The
maximum available production capacity is subject to the
timing of completion of installation and tuning of each piece
of our reactors in that year
“MES” manufacturing execution system, a system used in
manufacturing to track and document the transformation of
raw materials to finished goods
“OBC” on board charger, a power electronics device on EVs, which
converts alternating current (AC) power from external
sources, such as residential outlets, into DC power to charge
the vehicle’s battery pack
“PMS” predictive maintenance system, a system that uses time
series historical and failure data to predict the future
potential health of equipment and anticipate problems in
advance
“power density” the amount of power processed per unit volume or unit area
“power device(s)” a type of semiconductor component that is used as a switch
or rectifier in power electronics, and serves as the core
component of power supplies
“production capacity” the theoretical output of manufacturing equipment under
optimal conditions
“RMS” recipe management system, a system used to manage the
relationships and processes related to production recipes
“R&D” research and development
“SiC” silicon carbide, a compound semiconductor made of silicon
and carbon, known for its high thermal conductivity, wide
bandgap, and exceptional hardness
“SiC epitaxial wafer” a silicon carbide (SiC) wafer that has been produced using
an epitaxial growth process. In this process, a thin layer of
SiC is deposited on a substrate, typically made of the same
material (SiC)
“SPC” statistical process control
“sq.m.” square meter(s)
“substrate” a semiconductor material used to support the epilayer
“UPS” uninterruptible power supply, a backup battery system that
provides emergency power
GLOSSARY OF TECHNICAL TERMS
–4 0–


--- page 51 ---
“wafer” a thin slice of semiconductor material, used in the
manufacture of integrated circuits and other microelectronic
devices
“WMS” warehouse management system, a system used to manage
and control daily warehouse operations
“4H-SiC” specific polytype of silicon carbide (SiC) characterized by
its hexagonal crystal structure. The “4H” designation
indicates that the crystal structure has four Si-C bilayers in
a specific repeating sequence, which gives it distinct
electrical, thermal, and mechanical properties
GLOSSARY OF TECHNICAL TERMS
–4 1–


--- page 52 ---
We have included in this Prospectus forward-looking statements. Statements that are not
historical facts, including but not limited to statements about our intentions, beliefs, expectations
or predictions for the future, are forward-looking statements. When used in this Prospectus, the
words “aim”, “anticipate”, “believe”, “could”, “expect”, “going forward”, “intend”, “ought to”,
“project”, “seek”, “should”, “will”, “would”, “vision”, “aspire”, “target”, “schedule”, 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 relationship with, and the actions and developments affecting, our
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 position;
 the actions and developments of our competitors;
 our ability to effectively contain costs and optimize pricing;
 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;
 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; and
 capital market developments.
FORW ARD-LOOKING STATEMENTS
–4 2–


--- page 53 ---
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 or
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, statements of or references to our intentions or those of our Directors were
made as of the date of this Prospectus. Any such information may change in light of future
developments.
FORW ARD-LOOKING STATEMENTS
–4 3–


--- page 54 ---
An investment in our H Shares involves significant risks. You should carefully consider
all of the information in this Prospectus, including the risks and uncertainties described
below, as well as our financial statements and the related notes, and the “Financial
Information” section, before deciding to invest in our H Shares. The following is a description
of what we consider to be our material risks. Any of the following risks could have a material
adverse effect on our business, financial condition, results of operations and growth
prospects. In any such case, the market price of our H Shares could decline, and you may lose
all or part of your investment. Additional risks and uncertainties not presently known to us
or that we currently deem immaterial may also impair our business operations.
These factors are contingencies that may or may not occur , and we are not in a position
to express a view on the likelihood of any such contingency occurring. The information given
is as of the Latest Practicable Date unless otherwise stated, will not be updated after the date
hereof, and is subject to the cautionary statements in “Forward-looking Statements” in this
Prospectus.
RISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our business growth and prospects are affected by our ability to continuously innovate and
upgrade our technologies and production processes and to penetrate new markets.
Our future success significantly depends on our ability to continue to innovate and upgrade
our technologies and production processes. Product design, development, innovation and upgrade
is often a complex, time-consuming and costly process involving significant investment in R&D
with no assurance of return on investment. The technological advancement in the downstream
industries has been accelerating continuously, and the downstream market is constantly proposing
higher requirements and demands for upgraded technologies and processes. There can be no
assurance that we will be able to develop and introduce new and upgraded products in a timely or
efficient manner or that new and upgraded products, if developed, will achieve market acceptance
and generate sufficient revenue to offset costs incurred for such development and further achieve
profitability. Failure to timely innovate and upgrade our technologies and production processes
could materially delay our development of new and enhanced products, which could result in loss
of competitiveness and market share.
Our growth is also dependent on the ability of us to identify and penetrate new markets where
we have limited experience yet require significant investments, resources and technological
advancements in order to compete effectively. Our success in these markets is subject to a number
of factors such as marketing and selling efforts, competitiveness of our existing and new products,
customer preference and acceptance of our products and end products in which our products are
used, and competitive landscape. There can be no assurance that we will achieve success in these
markets and that the markets we serve and/or target based on our business strategy will grow in the
future.
We face substantial competition.
We expect that the competition among providers of different SiC epitaxial wafer products may
increase in the future and we face intense technological and pricing competition in the markets in
which we operate. The introduction of new products, technologies and production processes by our
competitors, the market acceptance of products based on our new or alternative technologies and
production processes, or our failure to anticipate or timely develop new or enhanced products,
technologies or production processes in response to changing market demand, whether due to
technological shifts or otherwise, could result in a decrease of customers and reduced
competitiveness. For example, in the early stage of our research and development of 8-inch SiC
epitaxial wafers, we experienced relatively long development cycles and high levels of uncertainty.
RISK FACTORS
–4 4–


--- page 55 ---
This was primarily due to our limited familiarity with the epitaxial equipment and substrates at the
time, which necessitated systematic evaluation and optimization of the production process. Certain
competitors that possess more sufficient financial, technical and management resources to develop
and market products may compete favorably against our products, and business integration among
our competitors may allow them to compete more effectively. In the event that we are unable to
overcome pricing pressure or achieve cost efficiencies, or match the technological, product, support
or manufacturing advancements of our competitors, we may lose our current market share and
experience decreases in sales volume, thereby adversely affecting our business, financial condition
and results of operations.
The price of our products and our profit margin may be materially and adversely affected as
the overall production capacity continues to increase in the future.
The global SiC epitaxial wafer industry is experiencing significant capacity expansion,
coupled with rapid technology advancements. The selling price of our epitaxial wafer products may
be adversely affected by the increasing production capacity and there is a downward trend in the
selling price of our epitaxial wafer products. We consider costs of raw materials and manufacturing
costs, technical specifications (such as complexity and yield rate), sales volume, and industry
prevailing prices of SiC epitaxial wafer when pricing our products and services. In the event where
prevailing industry prices are clearly declining, it is unlikely that we can maintain independent
pricing, which means that we will need to adjust our average selling prices accordingly, thereby
adversely affecting our financial performance. We cannot predict that if the production capacity of
epitaxial wafer products will continue to grow rapidly in China and worldwide and to what extent
that the technological development may reduce costs of production and accelerate the capacity
expansion. During the Track Record Period, the average selling price of our SiC epitaxial wafers
experienced downward pressure. Specifically, the average price of 6-inch SiC epitaxial wafers
declined year by year during the Track Record Period, while the average price of 4-inch wafers
initially declined before subsequently rising. These pricing pressures we experienced during the
Track Record Period adversely affected our financial performance. If, in the future, supply of
epitaxial wafer products significantly outpaces demand, we may experience further price reduction,
which could adversely affect our profitability and results of operations.
Our performance is subject to the development and condition of our downstream industries
that adopt our products. Any slowdown in the growth of these downstream industries could
adversely affect our business, financial condition and results of operations.
Our performance is subject to the fluctuations of demands from downstream industries. Our
SiC epitaxial wafer products are primarily offered to downstream customers operating across
various industries. Our customers utilize our SiC epitaxy wafers to manufacture their products,
typically power devices, for a wide range of downstream industrial applications, such as EVs,
charging infrastructure, renewable energy, ESS, as well as emerging applications such as home
appliances, AI computing power and data centers, smart grids, and eVTOL. Demand for our
products largely depends on growth within the markets for the end products, which is impacted by
factors beyond our control. These factors include, among others:
 a decline in demand for, or negative perception of, or publicity about, products of
downstream industries;
 a downturn in general economic conditions in the PRC and worldwide;
 regulatory restrictions, trade disputes, industry-specific quotas, tariffs, non-tariff
barriers and taxes that may have the effect of limiting exports of the downstream
industries from the PRC;
 the inability of our customers to dedicate necessary resources to promote and
commercialize their products;
RISK FACTORS
–4 5–


--- page 56 ---
 the inability of our customers to adapt to changing technological demands;
 the failure of our customers’ end products in which our products are used to meet
evolving industry requirements or achieve market acceptance;
 delays and project cancellations as a result of design flaws in the products developed by
our customers;
 increased costs associated with potential disruptions to our customers’ supply chain and
other manufacturing and production operations;
 the deterioration of our customers’ financial condition; and
 the effects of catastrophic and other disruptive events at our customers’ offices or
facilities including natural disasters, telecommunications failures, cyber-attacks,
terrorist attacks, pandemics, epidemics or other outbreaks of infectious disease, breaches
of security or loss of critical data.
In the event that any of the above events occur, the end product markets may not maintain
stable growth and the demand for our products may be reduced. Therefore, our business, financial
condition, results of operations and prospects could be materially and adversely affected.
A fluctuation in prices of raw materials or shortage in supply may disrupt our supply chain,
increase our production costs, delay deliveries of our products to customers and affect our
market price, which would further affect our business, financial condition and results of
operations.
We depend on our suppliers to provide a variety of materials necessary for the manufacturing
of our SiC epitaxial wafers including conductive SiC substrates and other accessory materials such
as graphite components, chemicals, packaging materials and special gases. In particular, a
fluctuation in raw material costs may disrupt our supply chain and increase our production costs.
Our raw material costs amounted to RMB180.0 million, RMB495.0 million, RMB411.3 million,
RMB327.3 million and RMB214.2 million in 2022, 2023 and 2024 and for the nine months ended
September 30, 2024 and 2025, representing for 73.9%, 71.0%, 64.1%, 62.6% and 53.8%,
respectively, of our total cost of sales in the same periods. During the Track Record Period, we
experienced a high single-digit percentage increase in average purchase price of raw material costs
from 2022 to 2023, because certain orders required higher proportion of substrates with higher
prices, despite that we benefited from the raw material price decline ever after. Such increase was
partially offset by the improved yield rate of substrates. Going forward, in case of material changes
in raw material costs, we may need to consider adjusting our pricing policy for our products, which
could affect the sales volume of such products, thereby materially and adversely affecting our
operational performance and financial condition.
Our production volume and production costs depend on our ability to source key raw materials
at competitive prices. However, the raw materials we use are subject to price volatility caused by
external factors, such as commodity price fluctuations, changes in supply and demand, logistics and
processing costs, our bargaining power with suppliers, inflation and governmental regulations and
policies. Any fluctuation in prices of raw materials or shortage or delay in the supply of our raw
materials could result in occasional price adjustments of our products or cause delays in our
production and delivery to customers. We cannot guarantee we will not in the future experience
price fluctuations and supply shortages of raw materials. In such event, we may be required to seek
alternate sources of supply and there is no guarantee that we will be able to find alternate sources
of supply in a timely manner and with reasonable price, or at all. If we are unable to keep up with
demand for our products due to the failure to supply the raw materials we need, our customers may
reduce, delay or cancel their orders and our business could be adversely affected.
RISK FACTORS
–4 6–


--- page 57 ---
Any material adverse change to the operation, financial performance or financial condition of
our major suppliers may result in material adverse impact on their business relationship with
us.
We primarily purchase raw materials from raw material production companies, and equipment
and machinery from equipment supply companies. During the Track Record Period, we made
purchases primarily from a limited number of our key strategic suppliers. In particular, our purchase
from the five largest suppliers in each period during the Track Record Period were RMB430.3
million, RMB1,342.8 million, RMB376.5 million and RMB220.5 million, respectively, and
accounted for 65.4%, 72.1%, 83.3% and 79.1% of the total cost of revenues for the respective
years/periods. See “Business — Procurement and Supply Chain Management — Top Five
Suppliers.”
Our reliance on these major suppliers subjects us to the concentration and counterparty risk
from these suppliers. We cannot assure you that we will be able to maintain relationships with our
major suppliers in the future. Any decrease in purchases from, or loss of, one or more of our major
suppliers would have negative impacts on our results of operations and financial condition.
Moreover, we cannot guarantee that our major suppliers will not have a change of business scope
or business model or will continue to maintain their market position and reputation. Any material
adverse change to the operation, financial performance or financial condition of our major suppliers
may result in material adverse impact on their business with us. For example, if our major suppliers
cease to sell their products, or if the supply is disrupted or delayed, there can be no assurance that
we will be able to find new suppliers with similar supply capacity on comparable commercial terms
within a reasonable period of time, or at all. Should any of these occur, our business, financial
condition, results of operations and profitability may be adversely affected.
Our business, financial condition and results of operations may be materially and adversely
affected by geopolitical tensions, international trade policies, international export controls
and economic sanctions.
International trade frictions have been escalating continuously in recent years. Certain foreign
jurisdictions have imposed or may impose export controls, economic sanctions or other trade-
related measures in various forms, such as heavy tariffs or harsh trade conditions, against certain
countries, individuals and legal entities, which, from time to time, prohibit or restrict export and
import activities to a certain extent. The United States and other jurisdictions or organization,
including the European Union, the United Nations, the United Kingdom and Australia, have,
through executive order, passing of legislation or other governmental means, implemented measures
that impose economic sanctions against such countries or against targeted industry sectors, groups
of companies or persons, and/or organization within such countries.
These uncertainties may be further exacerbated by shifting policy stances, new tariffs, trade
restrictions, or changes to regulatory frameworks, particularly in environments where trade policy
is frequently used as a tool of foreign policy and subject to sudden reversals. In particular, ongoing
tensions between the U.S. and China have been characterized by frequent tariff actions, retaliatory
measures, and abrupt policy changes that have affected global trade flows and supply chains. For
instance, there have been changes in international trade policies and rising political tensions,
particularly between the U.S. and China. The U.S. government has made statements and taken
certain actions that may lead to potential changes to U.S. and international trade policies towards
China. Starting from February 2025, the U.S. government imposed a series of tariff increases on
imports from China. In response to the multiple rounds of tariff increases by the U.S. government,
China also announced several rounds of retaliatory tariffs on goods imported from the U.S. For
example, the United States government imposed a 20% tariff to address the fentanyl issue, and,
temporarily, a 125% reciprocal tariff on Chinese-origin goods. In May 2025, following a meeting
between U.S. and Chinese officials in Geneva, the U.S. government suspended the heightened
retaliatory “reciprocal” tariffs on China for 90 days, reducing such “reciprocal” rate to 10%, which
was extended for 90 days by mutual agreement in August, 2025. On November 1, 2025, the U.S.
and China announced their agreement to relax certain tariff and other trade controls. The United
States has lowered the tariffs on Chinese imports imposed to curb fentanyl flows by removing 10
RISK FACTORS
–4 7–


--- page 58 ---
percentage points of the cumulative rate of 20%, effective November 10, 2025, and continued its
suspension of heightened reciprocal tariffs on Chinese imports until November 10, 2026. In
addition, the U.S. Commerce Department has recently initiated multiple investigations under
section 232 of the Trade Expansion Act (19 U.S.C. 1862) to determine whether imports of certain
products impair U.S. national security. These include investigations on imports of semiconductors,
critical minerals, and their derivative articles. Depending on the outcome of this investigation, it is
possible that the United States will impose additional tariffs or other affecting our customers who
export goods to the United States. Additionally, prolonged trade disputes may affect global
economic conditions and supply chains, potentially impacting our business and growth prospects.
International trade policies and international export controls and economic sanctions laws and
regulations are constantly evolving, and new persons and entities are regularly added to the list of
Sanctioned Targets. Further, new requirements or restrictions could come into effect which might
increase the scrutiny on our business or result in one or more of our business activities being
deemed to have violated sanctions. We cannot provide any assurance that our future business will
be free of sanctions risk, or our business will conform to the expectations and requirements of the
authorities of U.S. or any other jurisdictions. On August 9, 2023, the Biden administration released
an executive order and an advanced notice of proposed rule-making (the “ ANPRM ”) providing a
conceptual framework for outbound investment controls focused on China, including Hong Kong
and Macau. Further to this ANPRM, on June 21, 2024, the U.S. Department of the Treasury issued
a proposed rule on outbound U.S. investments involving China that generally follows the ANPRM.
On October 28, 2024, the U.S. Department of the Treasury issued a final rule to implement the
executive order of August 9, 2023 (the “ Final Rule ”). The Final Rule is effective on January 2,
2025. The Final Rule imposes investment prohibition and notification requirements on U.S. Persons
for a wide range of investments in entities associated with China (including Hong Kong and Macau)
that are engaged in activities relating to three sectors: (i) semiconductors and microelectronics, (ii)
quantum information technologies, and (iii) artificial intelligence systems, collectively defined as
“Covered Foreign Persons.” U.S. persons subject to the Final Rule are prohibited from making, or
required to report, certain investments in Covered Foreign Persons, which are defined as “covered
transactions,” and include acquisitions of equity interests that are not yet offer, certain debt
financing, joint ventures, and certain investments as a limited partner in a non-U.S. person pooled
investment fund. The Final Rule excludes some investments from the scope of covered transactions,
including those in publicly traded securities. The Final Rule is aimed at exerting greater U.S.
government oversight over U.S. direct and indirect investments involving China, and may introduce
new hurdles and uncertainties for cross-border collaborations, investments, and funding
opportunities of China-based issuers including us. As advised by a legal adviser engaged by us in
connection with the foregoing matters, we do not believe we would be defined as a Covered Foreign
Person under the Final Rule, because we do not engage in a “covered activity” (as defined in the
Final Rule) or otherwise meet the definition of Covered Foreign Persons provided in the Final Rule.
A “covered activity” as defined by the Final Rule, 31 C.F.R. 850.208 means any of the activities
referred to in the definition of notifiable transaction in §850.217 or prohibited transaction in
§850.224. Of relevance to the semiconductor sector, “covered activities” include the design,
fabrication or packaging of integrated circuits (ICs), as well as the development or production of
certain front-end fabrication equipment.
We primarily engage in the research and development, mass production, and sales of silicon
carbide (SiC) epitaxial wafers and offers 4-inch, 6-inch, and 8-inch SiC epitaxial wafers to a wide
range of customers. A SiC epitaxial wafer is a SiC substrate wafer with a thin crystalline layer of
SiC grown on top using epitaxy, often with tailored electrical characteristics. This SiC epitaxial
wafer serves as the foundation structure for fabricating SiC semiconductor devices. An IC is a set
of electronic circuits comprising various electronic components and their electrical
interconnections. Fabrication of ICs generally means fully processing (i.e., doping, etching,
metalization, and packaging) wafers into functioning chips such as logic ICs (e.g., CPUs, GPUs),
memory ICs (e.g., DRAM, NAND), or analog or radio frequency ICs. In stark contrast, SiC
epitaxial wafer production is a materials manufacturing step, before any semiconductor device or
IC fabrication. The output is a raw or semi-processed material, not a circuit. Importantly, SiC
epitaxial wafer does not involve photolithography, doping, etching, or metalization needed to create
electrical circuits. It does not produce any logic gates, memory cells, or analog circuits. SiC
RISK FACTORS
–4 8–


--- page 59 ---
epitaxial wafers are important materials for manufacturing SiC semiconductor devices, offering
superior efficiency and thermal conductivity compared to traditional silicon wafers. However, a SiC
epitaxial wafer itself is not an IC as it lacks electrical interconnections. Accordingly, based on our
understanding and as advised by our legal advisor, the R&D and production of SiC epitaxial wafers
is not considered as a design, fabrication, or packaging of ICs. Therefore, the Company’s business
does not fall within the scope of a “covered activity.” However, there is no assurance that the U.S.
Department of the Treasury will take the same view as ours. If we were to be deemed a “covered
foreign person,” and if U.S. persons engaged in a “covered transaction” (each as defined under the
Final Rule) that involves the acquisition of our equity interests, such U.S. persons may need to make
a notification pursuant to the Final Rule. In addition, even though U.S. persons’ acquisitions of
certain offer securities (such as our H shares) will be exempted from the scope of covered
transactions under the Final Rule, the Final Rule could still limit our ability to raise capital or
contingent equity capital from U.S. investors after this offering given that relevant laws,
regulations, and policies continue to evolve and we cannot rule out the possibility of being deemed
a Covered Foreign Person in the future due to different views taken by the U.S. Department of the
Treasury, potential amendments to the Final Rule or the introduction of similar regulations such as
draft Comprehensive Outbound Investment National Security Act of 2024. If our ability to raise
such capital is significantly and negatively affected, it could be detrimental to our business,
financial condition and prospects.
We are subject to the risks associated with sanctions and export controls laws and regulations,
international trade policies, and developing domestic and foreign laws and regulations, and
our business, financial condition and results of operations could be adversely affected.
Our operations may be negatively affected by trade policies, sanctions and export controls
regulations administered by the government authorities in the countries in and with which we
operate, including, but not limited to, regulation of economic and labor conditions, increased duties,
taxes and other costs. In addition to trade policy measures, the United States and certain other
governments have imposed sanctions and export controls measures that directly or indirectly affect
China-based technology companies. These types of laws and regulations may be subject to frequent
changes, and their implementation, interpretation and enforcement involve substantial uncertainties,
which may be heightened by potential national security concerns or other factors that are out of our
control. Similar or more expansive restrictions may be imposed by different jurisdictions in the
future. We will need to maintain heightened internal control and risk management policies to ensure
sound compliance with such restrictions, which requires significant resources and efforts.
Furthermore, such potential restrictions may materially and adversely affect our and our partners’
abilities to acquire technologies, systems, devices or components that may be critical to business
operations. Any of these developments could affect us, our customers and/or suppliers or economic
conditions generally, any of which could adversely affect our business and financial condition.
Likewise, potential national security and foreign policy concerns may prompt governments to
impose trade or other restrictions, which could make it more difficult to sell our products in, or
restrict our access to, certain markets. In this regard, various trade, export controls, and economic
sanctions laws and regulations may affect our businesses. For instance, in recent years, the United
States has expanded sanctions and export controls restrictions on China through the Export
Administration Regulations (the “ EAR”), administered by the Bureau of Industry and Security of
the United States Department of Commerce (the “ BIS”). In addition to the United States, Japan, the
Netherlands and various other governments are also imposing controls, licensing requirements and
restrictions applicable to exports to China. These types of restrictions could impact our ability to
supply customers of affected countries, territories and entities and could restrict our ability to obtain
components and technologies we incorporate in or use to develop our products. Moreover, in August
2022, the United States enacted the Creating Helpful Incentives to Produce Semiconductors and
Science Act of 2022 (the “ CHIPS Act ”). The CHIPS Act aims to strengthen U.S. domestic
semiconductor manufacturing, design and research, fortify the economy and national security, and
to help the United States compete economically against China.
RISK FACTORS
–4 9–


--- page 60 ---
With respect to U.S. export controls, in October 2022, BIS issued an interim final rule (the
“BIS October 2022 IFR ”) aimed at restricting China’s ability to obtain advanced computing
integrated circuits, develop and maintain supercomputers, and manufacture advanced
semiconductors. In October 2023, BIS issued another interim final rule (the “ BIS October 2023
IFR”) that updated and expanded U.S. export controls imposed by the BIS October 2022 IFR
(collectively, the “ BIS 2022/23 IFRs ”). Among other measures, the BIS 2022/23 IFRs add to the
Commerce Control List (which is a list of commodities, software, and technologies that are subject
to the EAR’s more restrictive controls) certain advanced and high-performance computing
integrated circuits and computer commodities that contain these integrated circuits, and impose new
or expanded license requirements for items subject to the EAR destined for an end-use in the
development or production of supercomputers, certain types of advanced node integrated circuits
and advanced, or semiconductor manufacturing equipment in certain jurisdictions, including China.
We neither purchase nor sell any products that were added to the restricted items list governed by
the BIS 2022/23 IFRs which mainly includes certain advanced and high-performance computing
integrated circuits and computer commodities that contain these integrated circuits. We do not need
these items for manufacturing our products and our products do not contain any items covered by
the BIS 2022/23 IFRs.
In addition to the restrictions introduced by the BIS 2022/23 IFRs, BIS maintains lists of
persons that are subject to enhanced export control restrictions. One such list, the Entity List,
includes a list of foreign persons on which certain trade restrictions are imposed, including
business, research institutions, government and private organizations, individuals and other types of
legal persons. Where a foreign person is included on the Entity List, the export, re-export and/or
transfer (in-country) of items which are subject to the EAR generally is prohibited unless the
specified license requirements are met. The United States in recent years has placed an increasing
number of entities, including a number of entities in China, on the Entity List and other restricted
or prohibited parties lists. Given the sudden and unpredictable nature of these determinations, it is
difficult to predict developments in this area and we have no ability to influence such
determinations.
During the Track Record Period, we had received items subject to the EAR that are classified
as EAR99 or an ECCN subject only to anti-terrorism (“ AT”) control. No license is generally
required for exporting EAR99 to most destinations except to certain embargoed destinations (e.g.,
Cuba, Iran, North Korea, and the Crimea, Donetsk, and Luhansk regions of the Ukraine) or where
there may be additional license requirements, such as for prohibited end use/end user restrictions
(e.g., parties on the Entity List). We confirm that we do not transfer any EAR99 items to such
embargoed destinations or prohibited end users. In addition, China is not a country subject to A T
control and we confirm that we do not transfer any A T-controlled items subject to the EAR to any
third parties. In light of the above, based on consultation with our legal adviser, while the export
of EAR99 items and items classified under an ECCN subject only to is subject to U.S. export
controls, we are eligible to receive the above-described items subject to the EAR without a license.
During the Track Record Period, we did not have any business operations in or with entities
and individuals in any countries or regions subject to comprehensive embargoes administered by the
U.S. Department of the Treasury, Office of Foreign Assets Control (“ OFAC”). Also, we did not
have any business relationships with parties on any sanction lists, including those maintained by
OFAC or another U.S. government agency and other major jurisdictions, such as China, European
Union and United Kingdom. In addition, no member of our Group is on any sanctions list mentioned
above. Therefore, based on consultation with our legal adviser, we are of the view that we are not
subject to sanctions.
On December 23, 2024, the U.S. Trade Representative (“ USTR ”) self-initiated a Section 301
investigation of China’s acts, policies, and practices related to targeting of the semiconductor
industry for dominance. The investigation would initially assess whether the impact of the PRC’s
acts, policies, and practices on the production of SiC substrates (or other wafers used as inputs into
semiconductor fabrication) contribute to any unreasonableness or discrimination or burden or
RISK FACTORS
–5 0–


--- page 61 ---
restriction on U.S. commerce. On December 29, 2025, USTR published a Federal Register notice
announcing its affirmative determination that, effective December 23, 2025, “China’s acts, policies
and practices are actionable under Section 301... and that the appropriate responsive action includes
taking tariff action now on semiconductors from China.” Based on its findings, USTR determined
under Section 301(c) that responsive action is appropriate, including additional tariffs on
semiconductors from China. However, the action will have a delayed effect, with a 0% additional
tariff rate at the outset followed by an increase in 18 months on June 23, 2027, “to a rate to be
announced not fewer than 30 days prior to that date.” These tariffs will be in addition to the existing
50% tariffs on semiconductors under USTR’s separate Section 301 action in response to China’s
technology transfer policies. The additional tariffs, effective June 23, 2027, will apply to the
products and HTS subheadings listed in the Notice of Action, which covers the Company’s
products. Due to the delayed effect date, our products are not currently affected by these tariffs.
Aside from the above, based on consultation with our legal advisers, we are not aware of any
other international trade policies that have a material impact on the business of our Company.
However, as the Entity List and other sanctions and export controls laws and regulations continue
to expand and evolve, future sanctions and export controls may materially affect or target some of
our significant customers or suppliers, raw materials or key components or technologies necessary
for our operations, in which event our business may be affected if we fail to promptly secure
alternative customers or sources of supply on terms acceptable to us despite our effort to be
law-abiding and rule compliant. Neither we nor our suppliers rely on particular materials
imported/originated from the U.S. Nonetheless, we had procured certain materials from the U.S.,
amounting to RMB65.0 million, RMB124.7 million, RMB0.5 million and RMB0.4 million in 2022,
2023 and 2024 and for the nine months ended September 30, 2025, respectively, accounting for
9.9%, 6.7%, 0.1% and 0.1% of our total purchase for the respective years/periods. These export
controls could adversely affect us and/or our supply chain, business partners, or customers, and our
business, financial condition, and results of operations may be significantly affected by the
continued international trade and political tensions. The CHIPS Act prohibits funding recipients
from expanding semiconductor manufacturing in China and countries defined by U.S. law as posing
a national security threat to the U.S. These restrictions would apply to any new facility, unless the
facility produces legacy semiconductors predominately for that country’s market. As such, the
procurement by us of U.S.-origin materials for use in manufacturing our SiC epitaxial wafers is not
subject to the CHIPS Act. In addition, since the materials we procure that are subject to the EAR
are all classified as either (i) EAR99 or (ii) in an ECCN subject only to anti-terrorism controls
(which do not apply to China), the export of these items to us by our suppliers does not require a
license from the BIS.
If new sanctions and export controls measures were to include a complete or more restrictive
ban on products sales to certain entities, it could impact not only our ability to continue supplying
our products to affected customers, but could also negatively affect our customers’ demand for our
products, and could even lead to changes in supply chains of our products, to the extent they involve
the use of items subject to the EAR or other applicable regulations. We do not rely on materials
imported or originated from the U.S. in manufacturing our products. To the best of our knowledge,
our suppliers do not rely on materials imported or originated from the U.S. Nonetheless, as our
products become more technologically advanced, there is also a greater likelihood of sanctions and
export controls regulations restricting our ability to obtain the components or technologies
necessary to produce them or otherwise to export or transfer our products. Even if our products are
not directly targeted by these types of sanctions and export controls, we may nonetheless face
higher costs and expenses in our supply chain due to new sanctions and export controls measures
as our customers and business partners may be negatively affected by sanctions and export controls
measures directed at China. Any failure to comply with applicable sanctions or export controls rules
may expose us to negative legal and business consequences, including civil or criminal penalties,
and government investigations, which could be detrimental to our reputation and cooperations with
our customers and suppliers despite our effort to be law-abiding and rule compliant.
RISK FACTORS
–5 1–


--- page 62 ---
Moreover, in response to Russia’s conflict with Ukraine, the United States, the European
Union, and various other jurisdictions have imposed far-reaching sanctions and export controls
restrictions on Russia and many Russian entities and individuals such that sales to or other business
in Russia or with such restricted entities or individuals are subject to heightened regulatory risks.
These measures, as well as other economic and trade sanctions measures maintained by the United
States, the European Union, and other jurisdictions, may prohibit or restrict our ability to, directly
or indirectly, conduct activities or dealings in or with certain targeted countries and territories or
involving certain targeted persons, or otherwise affect our business. New measures imposed by the
United States, the European Union, or others could restrict certain of our operations and adversely
affect our business, results of operations, and financial condition.
If we are unable to offer high-quality products, it may reduce the market adoption of our
products, damage our reputation or expose us to product liability and other claims.
Our customers generally have stringent requirements for quality, performance and reliability
that our products must meet. Due to the complex product development and production process, we
cannot ensure that our products do not contain undetected defects or failures. If our products have
defects or fail to meet customers’ quality requirements, we may need to bear corresponding
compensation liabilities and may suffer adverse impacts on our business performance and financial
conditions. We could experience lost revenue, increased costs, including warranty expenses and
costs associated with after-sales services, cancellations or rescheduling of orders or shipments, and
product returns or discounts. They may also result in claims against us by our customers or others,
and subject us to liabilities and damages. Our reputation or brand may be damaged, and our
customers may be reluctant to buy our products, which could adversely affect our ability to retain
existing customers and attract new customers and could adversely affect our business, financial
condition and results of operations.
Taking into account our revenue decreased from RMB1,142.5 million in 2023 to RMB974.3
million in 2024 and from RMB808.3 million for the nine months ended September 30, 2024 to
RMB535.1 million for the same period in 2025, our historical growth may not be indicative of
our future performance, and we may not be able to manage our growth or execute our business
strategies effectively.
In 2022, 2023 and 2024 and for the nine months ended September 30, 2024 and 2025, our
revenue was RMB440.7 million, RMB1,142.5 million, RMB974.3 million, RMB808.3 million and
RMB535.1 million, respectively. However, we cannot assure you that our future revenue will
continue to increase or that we will continue to be profitable, taking into account our revenue
decreased from RMB1,142.5 million in 2023 to RMB974.3 million in 2024, and from RMB808.3
million for the nine months ended September 30, 2024 to RMB535.1 million for the same period
in 2025. We anticipate that our cost of sales and operating expenses will further increase in the
foreseeable future as we continue to grow our business, expand geographically, invest and innovate
our technology infrastructure, and further broaden our product and service offerings. Our revenue,
expenses and profitability may vary from period to period due to various factors beyond our control,
including the general economic growth, development of SiC epitaxial wafer industry, changes in
laws, regulations and rules applicable to us, the expansion and performances of our existing
business, our ability to control cost, competitive landscape and customer preference. Even if we
recorded adjusted net profits (Non-IFRS measure) of RMB171.9 million, RMB383.8 million,
RMB323.5 million, RMB263.4 million and RMB163.3 million, respectively, for the years ended
December 31, 2022, 2023 and 2024 and for the nine months ended September 30, 2024 and 2025,
we cannot assure you that we may continue to achieve profitability in the future. Accordingly,
investors should not rely on our historical results as an indication of our future financial or
operating performance.
RISK FACTORS
–5 2–


--- page 63 ---
In addition, we plan to invest substantial financial, management and operational resources to
sustain our growth. However, we cannot assure you that we will be able to obtain these resources
consistently in the future. For instance, we may not be able to obtain additional internal and external
capital to support our business growth on commercially acceptable terms or at all, or to retain and
attract sufficient number of competent staff to support our business development. In such event, we
may not execute our business strategies and maintain our growth.
We may not grow our business as planned.
Our growth depends on a number of factors beyond our control. Any unexpected
circumstances could disrupt our business operations and divert our attention to original business
plans. Such unpredictability inherent in the business operation is common in our industry. There is
no assurance that we may grow our business as planned and become profitable. Even if we realized
profits in the past, there can be no assurance that we can maintain profitability in subsequent
periods. Our failure to become or remain profitable could impair our ability to raise capital, expand
our business and continue our operations, which may adversely and materially affect our financial
condition and results of operations.
Our business depends on reliable and adequate transportation provided by third parties.
Disruptions to the transportation could disrupt our deliveries and adversely affect our
business, financial condition and results of operations.
Our products are delivered through third-party service providers. We had not experienced any
material disruption of transportation or deliveries during the Track Record Period and up to the
Latest Practicable Date. However, we are unable to control the process of transportation, and it may
be disrupted by a number of factors, such as traffic accidents, border control, natural disasters and
bad weather conditions. If access to and from our production bases are significantly damaged, cut
off, suspended for repair or maintenance for an extended period of time, the delivery of our products
would be significantly affected, and we may fail to deliver our products on time and breach our
sales contracts. Any difficulties experienced by us in transporting our products may reduce demand
for our products and cause our customers to select suppliers closer to their operations and who are
able to supply products with quality considerably similar to ours or to demand significant lower
prices for our products. Any such adverse development could have a material adverse effect on our
business, financial condition and results of operations.
A significant portion of our revenue was derived from our major customers in each
year/period comprising the Track Record Period. Any decrease in sales from, or loss of major
customers may have negative impacts on our results of operations.
Our sales to the five largest customers in each year/period during the Track Record Period
were RMB381.5 million, RMB938.0 million, RMB790.6 million and RMB331.0 million,
respectively, and accounted for 86.5%, 82.1%, 81.2% and 61.9% of the total revenue for the
respective years/periods. See “Business — Sales and Marketing — Customers — Top Five
Customers.” In particular, Customer A was one of our five largest customers in 2022, 2023 and
2024. Our revenue generated from Customer A amounted to RMB246.6 million, RMB614.6 million,
RMB104.4 million, and nil in each year/period during the Track Record Period, respectively,
accounting for 56.0%, 53.8%, 10.7% and nil of our total revenue for the respective year/period.
There can be no assurance that we will be able to develop new customers or maintain or increase
collaboration with our existing customers. Given the significant revenue contribution by our major
customers, any decrease in sales from, or loss of, one or more of our major customers may harm
our business, financial condition and results of operations.
RISK FACTORS
–5 3–


--- page 64 ---
Any disruption to the operation of our production bases could restrict our ordinary business
operations and materially and adversely affect our financial condition and results of
operations.
As of the Latest Practicable Date, we had one production base in Xiamen. See “Business —
Production — Production Facilities.” The current and future operation of our production bases may
be disrupted by natural disasters, such as floods, earthquakes, typhoons, and other events such as
fires, mechanical breakdowns, telecommunications failures, loss of licenses, certifications and
permits, changes in governmental planning for the underlying land, and the regulatory development,
many of which are beyond our control. As our production process and safety-critical operations
require substantial amounts of electricity, therefore any power outage, disruption or shortage in
power supply could have a materially adverse impact on our production.
As part of our production operations, we are engaged in certain inherently risky and hazardous
activities, including, among other things, use of special equipment and management of special
gases. Therefore, we are subject to risks associated with these activities, including gas leakages,
equipment failures, industrial accidents, fires and explosions. These accidents can result in personal
injuries and fatalities, damage to or destruction of properties or production facilities, and pollution
and other environmental damages. Any of these consequences could disrupt the operation of our
production bases and result in legal liability, and thus materially and adversely affect our financial
condition and results of operations.
Failure to successfully execute capacity expansion plans and our equipment maintenance and
upgrades or to effectively utilize our production bases may have a material adverse effect on
our business, financial condition and results of operations.
Our growth prospects and future profitability depend on, among other things, our ability to
upgrade the production capability and increase production capacity, either generally or with respect
to demand from customers for particular products. To successfully upgrade our production
capability and expand production capacity, we need to make cost-effective and efficient upgrade
and expansion plans, expand and construct new facilities, maintain and purchase production
equipment, and hire and train professionals necessary to operate such facilities or equipment, all of
which may be affected by several factors including, but not limited to, the following:
 availability of working capital for constructing facilities or purchasing equipment;
 delays in completion of construction and shortages or delays in the delivery of
equipment;
 difficulties or delays which may arise in installing the equipment; and
 implementation of new production processes.
We cannot guarantee that our upgrade or expansion plan, if implemented, will be operationally
or financially successful and substantiated by sufficient market demand for or profit margin of our
products. If we are unable to implement the upgrade or expansion plan cost-effectively and
efficiently, our business and profitability may be adversely affected.
In addition, if we do not receive sufficient orders from our customers to effectively utilize our
production bases, we may be subject to low utilization rates of production capacity or over-capacity
for our production bases, which may hurt our profitability and results of operations. Furthermore,
if market demand declines in the future, we may not be able to recoup the costs incurred for
construction of any new production bases or expansion of any existing facilities and maintenance
of expanded production capacity. Further, our Company has entered, and may in the future enter,
into agreements for our expansion plans. Any delay or cancellation of our expansion plan or any
failure to fulfill related commitments could also subject us to penalties or disputes with various
counterparties. As a result, our business, financial condition, results of operations and prospects
may be materially and adversely affected.
RISK FACTORS
–5 4–


--- page 65 ---
Our business depends on our ability to protect our proprietary know-how and intellectual
property rights.
We rely primarily on a combination of our patents, trade secrets, trademarks, the
confidentiality agreements signed by the employees, and confidentiality agreements signed with
third parties to protect our intellectual property rights. We had not experience any material
infringement of intellectual property rights or know-how or misappropriation of patents or other
intellectual property rights during the Track Record Period and up to the Latest Practicable Date.
However, we still face various risks about our intellectual property rights. There is no assurance that
we are able to successfully apply and be granted new intellectual property rights in a timely and
cost-effective manner in the future, as such applications are expensive and time consuming. See
“Business — Intellectual Property.” In addition, our trade secrets may be leaked or otherwise
become available to, or be independently discovered by, our competitors. Unauthorized parties may
be able to obtain and use information that we regard as proprietary. Under such circumstances, to
protect our intellectual property rights and maintain our competitive advantages, we may initiate
legal proceedings against parties who we believe are infringing our intellectual property rights.
Legal proceedings are often costly and may divert management attention and resources away from
our business. In certain situations, we may have to initiate such legal proceedings in foreign
jurisdictions, in which case we are subject to additional risks related to the result of the proceedings,
the amount of damages that we can recover, and the enforcement process. Accordingly, we may not
be able to effectively protect or enforce our intellectual property rights in all relevant jurisdictions,
which may have a material adverse effect on our business, financial condition and results of
operations.
We also seek to protect our proprietary technology, including technology that may not be
patented or patentable, in part by confidentiality agreements and, if applicable, inventors’ rights
agreements with our collaborators, advisors, employees and consultants. We cannot assure you that
these agreements will always be entered into or will not be breached or that we will have adequate
remedies for any breach.
We may fail to maintain and predict inventory levels in line with demand for our products,
which could cause us to face the risk of obsolescence for our inventories.
Our inventories consist of raw materials, work-in-progress and finished goods. We have taken
measures to optimize our inventory level and conduct regular inventory check to reduce the risk of
inventory obsolescence. See “Business — Procurement and Supply Chain Management — Supply
Chain and Inventory Management.” As of December 31, 2022, 2023 and 2024 and September 30,
2025, we had inventories of RMB91.4 million, RMB351.1 million, RMB247.6 million and
RMB270.9 million, respectively. We provided provision against inventories by estimating the net
realizable value based on the estimated selling price of such inventories in the ordinary course of
business. We made provision for inventories as our inventories may be damaged, obsolete in whole
or in part, or the net realizable value of inventories is lower than their cost, resulting in failure to
recover the cost of inventories. For the same periods, our inventory turnover days were 106 days,
116 days, 170 days and 178 days, respectively. See “Financial Information — Discussion of
Selected Items from the Consolidated Balance Sheets — Assets — Inventories.”
We primarily adopt a production volume-based procurement model, and reserve raw materials
as appropriate. However, we cannot guarantee that we will be able to maintain proper inventory
levels for our raw materials, work-in-progress and finished goods. We maintain our inventory levels
based on our internal forecasts of customers’ demand. If our forecast demand is higher than actual
demand, we may be exposed to increased inventory risks due to the accumulation of excess
inventory of our raw materials, work-in-progress or finished goods. Excess inventory levels may
increase our inventory holding costs, risk of inventory obsolescence or write-offs. Therefore, our
business, financial condition and results of operations may be materially and adversely affected.
RISK FACTORS
–5 5–


--- page 66 ---
Our business depends substantially on the continued services and efforts of our experienced
management and research and development personnel, and our operations may be severely
disrupted if we lost their service.
Our future performance depends on the service and contribution of our experienced
management to oversee and execute our business plans, identify and pursue new opportunities and
product innovations. We also rely on our experienced management team to ensure smooth business
operations, including maintenance of customers and supplier relationships, and management of our
operations. Any loss of service of our management can significantly delay or prevent us from
achieving our strategic business objectives, and adversely affect our business, financial condition
and results of operations. From time to time, there may be changes in our management team,
resulting from the hiring or departure of executives, which could also disrupt our business. Hiring
suitable replacements and integrating them into our existing teams also require a significant amount
of time, training and resources, and may impact our existing corporate culture.
Additionally, competition for highly skilled personnel is often intense, and we may incur
significant costs to attract and retain highly skilled personnel in our research and development team.
A stable and experienced R&D team is crucial for our product development, technological
innovation, production efficiency and product quality improvement. Our future success depends, to
a significant extent, on our ability to attract, train and retain qualified personnel, particularly skilled
engineers with expertise in the R&D and production of SiC epitaxial wafers. However, we cannot
assure you that we will be able to develop or retain qualified staff or other highly skilled employees
that we need in order to achieve our strategic objectives.
Our brand is integral to our success. If we fail to effectively maintain, promote and enhance
our brand, our business and competitive advantage may be harmed.
We believe that maintaining, promoting and enhancing our brand is critical to maintaining and
expanding our business. Maintaining, promoting and enhancing our brand depends largely on our
ability to continue to provide high quality products, which we cannot assure you we will do
successfully in the future. Any issue caused by quality, performance, reliability and stability of our
products as well as pricing may harm our reputation and brand. It is possible that our new products
may not be recognized by our downstream customers. Additionally, if our downstream customers
have negative experience using our products, such an encounter may affect our brand and reputation
within the industry.
The successful promotion of our brand will also depend on the effectiveness of our marketing
efforts. We incurred marketing expenses in the past and may continue to allocate resources on
marketing. We cannot guarantee that our marketing efforts will be successful, or that they will yield
significant benefits that justify the costs. Any such failure may result in our declining market
recognition and position, and adversely affect our business, financial condition and results of
operations.
Our SiC epitaxial wafer products may be subject to warranty, indemnity and/or product
liability claims, which could result in significant costs and damage to our business, reputation
and downstream customer relationships, market acceptance of our products, financial
condition, results of operations and prospects.
SiC epitaxial wafer products are highly complex and may contain defects that affect their
quality or performance. If any of our products contain defects, we may be required to incur
additional development and remediation costs pursuant to warranty and indemnification provisions
in our contracts and purchase orders, which may divert our technical and other resources from other
product development efforts. During the Track Record Period, we had not experienced any refund,
and had two, 15, 218 and 1,288 pieces of product replacements for our customers, corresponding
to revenue of RMB22.0 thousand, RMB0.1 million, RMB2.0 million and RMB5.5 million in 2022,
2023, and 2024 and for the nine months ended September 30, 2025, respectively, accounting for nil,
RISK FACTORS
–5 6–


--- page 67 ---
nil, 0.2% and 1.0% of our total revenue in each year/period. The increase for the nine months ended
September 30, 2025 was primarily due to changes of specifications of certain customer orders, and
the cost of which was not borne by the Company. Our downstream customers and any third party
that use our products may bring claims against us for indemnification and damages resulting from
the defects of our products, which may be significant in certain cases. Any product liability claim,
whether or not determined in our favor, could result in significant expense, divert the efforts of our
technical and management personnel, and harm our business. In addition, if any of our products
contain defects, or have reliability, quality or compatibility problems not capable of being resolved,
our reputation may be harmed, which could adversely affect our operating results.
If we fail to develop new products that address customer preferences and achieve market
acceptance in a timely and cost-effective manner, our results of operations could be adversely
affected.
Our products are primarily based on the SiC epitaxial wafer technologies, and our future
success depends on the successful expansion of our SiC epitaxial wafer product portfolio and
customer base. Our customers are constantly seeking new products with more features and
functionality at lower cost, and our success relies heavily on our ability to continue to develop and
provide our customers with new and innovative products and improvements of existing products.
In order to gain market share and remain at the forefront of the SiC epitaxial wafer industry, we
must constantly introduce new and innovative products and respond to new and evolving customer
demands.
The success of a new product depends on a variety of specific implementation factors,
including:
 timely development of new technologies and adaption to changes in existing
technologies;
 timely and cost-effective processing and mass production to accommodate new product
designs, while ensuring functionality, performance and reliability;
 effective marketing, sales and services to gain market share; and
 strong and sustainable market demand.
Product design, development, innovation and iteration is often a complex, time-consuming
and costly process involving significant investment in R&D with no assurance of return on
investment. In 2022, 2023 and 2024 and for the nine months ended September 30, 2024 and 2025,
we had R&D expenses of RMB43.8 million, RMB101.8 million, RMB80.0 million, RMB62.1
million and RMB50.4 million, respectively. The SiC epitaxial wafer industry is highly competitive,
characterized by rapidly changing technologies and technological obsolescence. We may invest
significant resources in R&D activities and incur significant R&D expenses in the future to achieve
technological breakthroughs, as well as maintain our technological leadership and the
competitiveness of our products and solutions. There can be no assurance that we will be able to
develop and introduce new and enhanced products in a timely or efficient manner or that we will
continue to achieve technological breakthroughs and successfully commercialize such
breakthroughs through our R&D activities. Failure to timely develop new technologies or to react
quickly to changes in existing technologies could materially delay our development of new and
enhanced products, which could result in product obsolescence, decreased revenue, and/or a loss of
market share to competitors. Our investments in R&D activities may not generate sufficient revenue
to offset liabilities assumed and expenses associated with these investments.
RISK FACTORS
–5 7–


--- page 68 ---
Security breaches and other disruptions could compromise our confidential and proprietary
information, which could cause our business and reputation to suffer.
We collect and process data primarily related to the transactions with our enterprise
customers. See “Business — Data Privacy and Information Technology Systems.” The secure
maintenance of such information is critical. Despite our security measures, our information
technology and infrastructure may be vulnerable to breaches by hackers, employee error,
malfeasance or other disruptions such as natural disasters, power outage or telecommunication
failures. We had not experience any material security breaches during the Track Record Period and
up to the Latest Practicable Date. However, any such breach could compromise our networks, and
the confidential and proprietary information stored therein, possibly resulting in legal and
regulatory actions, disruption of operations and customer services, and otherwise harming our
business, reputation and future operations.
We have granted, and may continue to grant, restricted share units or other types of awards
under our share incentive plans, which may result in increased share-based payment
compensation. Those share-based awards may also adversely impact our results of operations
and be dilutive to your shareholding.
We adopted the pre-IPO share incentive scheme to enhance our ability to attract and retain
outstanding individuals and to encourage them to acquire a proprietary interest in the growth and
performance of us. We incurred share-based payment compensation of RMB28.6 million,
RMB256.2 million, RMB154.2 million, RMB141.2 million and RMB124.5 million in 2022, 2023
and 2024 and for the nine months ended September 30, 2024 and 2025, respectively.
We believe share-based awards as part of an overall compensation package are important to
attracting and retaining key personnel and employees, and we plan to continue to grant share-based
payment compensation to employees in the future. Based on our existing share-based compensation
plan, we will incur share-based compensation expenses from 2025 to 2029. The share-based
compensation expenses are expected to amount to RMB166.0 million from 2025 to 2028 per year,
and RMB78 million in 2029. The actual share-based compensation expenses we recognize may
exceed the estimated amounts, as we will continue granting share options to employees to retain and
attract talents. As a result, our share-based payment compensations may remain in foreseeable years
from 2025 to 2029, which may have an adverse effect on our results of operations and financial
condition and dilute your shareholding.
We may be exposed to credit risk arising from our trade receivables. Failure to collect our
trade receivables in a timely manner or at all could have a material and adverse impact on our
business, financial condition, liquidity and prospects.
During the Track Record Period, our trade receivables primarily represent receivables from
customers for sales of SiC epitaxial wafer products. As of December 31, 2022, 2023 and 2024 and
September 30, 2025, our trade and bills receivables amounted to RMB106.8 million, RMB78.7
million, RMB129.6 million and RMB269.0 million, respectively. The credit period granted to our
customers was generally 30 days to 90 days from the date of billing. We generally recovered trade
receivables within four months. See “Financial Information — Discussion of Selected Items from
the Consolidated Balance Sheets — Assets — Trade and Bills Receivables” in this Prospectus.
We cannot assure you that we will be able to collect all or any of our trade receivables on time,
or at all. Our customers may face unexpected circumstance. For example, our trade and bills
receivables turnover days increased from 29.6 days in 2023 to 39.0 days in 2024 and further to
102.0 days for the nine months ended September 30, 2025, attributable to the delay in payment by
certain customers due to their worsened operational performance. As a result, we may not be able
to receive such customers’ payment of outstanding debts in full, or at all, and may be exposed to
credit risk. The occurrence of such event would materially and adversely affect our financial
condition and results of operations.
RISK FACTORS
–5 8–


--- page 69 ---
Fluctuations in foreign currencies may adversely affect our business, financial condition and
results of operations.
The exchange rate of Renminbi against the Hong Kong dollar, U.S. dollar and other foreign
currencies fluctuates and is affected by, among other things, changes in international political and
economic conditions, as well as supply and demand in the local market. There is no assurance that,
under a certain exchange rate, we will have sufficient foreign exchange to meet our foreign
exchange requirements and obligations. It is difficult to predict how market forces or government
policies may impact the exchange rate between Renminbi and the Hong Kong dollar, U.S. dollar or
other currencies in the future.
As a substantial portion of our revenue derived from overseas markets during the Track
Record Period and our overseas sales were typically settled in U.S. dollar, any appreciation of the
Renminbi may result in a decrease in the value of U.S. dollar amount, which may adversely affect
our financial condition.
Furthermore, the proceeds from the Global Offering will be received in Hong Kong dollars.
As a result, any appreciation of Renminbi against the Hong Kong dollar or any other foreign
currency may result in a decrease in the value of our proceeds from the Global Offering.
Conversely, any depreciation of the Renminbi may adversely affect the value of, and any dividends
payable on, our H Shares in foreign currency. In addition, there are limited instruments available
for us to reduce our foreign currency risk exposure at reasonable costs. Any of these factors could
materially and adversely affect our business, financial condition and results of operations.
Expiration of, or changes to, certain government incentives, government grants and
preferential tax treatments which we are entitled to could adversely affect our financial
condition and results of operations.
During the Track Record Period, we recorded government grants of RMB13.5 million,
RMB47.4 million, RMB111.9 million, RMB95.7 million and RMB103.0 million in our consolidated
statements of profit or loss and other comprehensive income for the years ended December 31,
2022, 2023 and 2024 and for the nine months ended September 30, 2024 and 2025, respectively,
which represent incentive policies for business and R&D activities.
In addition, we benefited from preferential tax treatments from the PRC regulatory authorities
during the Track Record Period. Our Company was qualified as High and New Technology
Enterprise and was entitled to a preferential income tax rate of 15% for a certain period of time.
According to the Circular on Improving the Policy on Extra Super-deduction of R&D Expenses
() promulgated by the STA, the MOF and the
MOST, effective from January 1, 2016 onwards, enterprises carrying out R&D activities are entitled
to claim super-deduction of R&D expenses amounting to 50% of its research and development
expenses in determining its tax assessable profits for the year. The super-deduction ratio of R&D
expenses increased from 50% to 75%, effective from January 1, 2018 to December 31, 2020,
according to the new tax incentives policy, the Notice of Increasing the Ratio of the Super-
deduction of R&D Expenses () promulgated
by the STA, the MOF and the MOST in September 2018. The applicable period of this policy was
subsequently extended to December 31, 2023, pursuant to the Announcement of the MOF and the
STA on Extending the Implementation Period of Some Preferential Tax Policies (௅೼ਕᐼ
ʮѓ) issued on March 15, 2021. The ratio of the
super-deduction of R&D expenses has been further increased to 100% for enterprises entitled to
75% super-deduction of R&D expenses during the period from October 1, 2022 to June 30, 2023,
and such enterprises are allowed to deduct the full amount of equipment and appliances newly
purchased during the period from October 1, 2022 to June 30, 2023 from the taxable income amount
on a one-off basis in the current year, according to the Announcement on Increasing Super-
deduction in Support of Scientific and Technological Innovation (ϔ
ʮѓ) promulgated by the STA, the MOF and the MOST in September 2022. According
RISK FACTORS
–5 9–


--- page 70 ---
to the Announcement of the MOF and the STA on Further Improving the Pre-tax Deduction Policy
for R&D Expenses (2023) (ʮѓ
(2023) ), where R&D expenses actually incurred by an enterprise when it conducts any R&D
activity have not been included in the current profit and loss, from January 1, 2023 onwards, 100%
of the amount of R&D expenses actually incurred in this year shall be deducted from the amount
of taxable income in this year, and where intangible assets have been formed, 200% of the costs of
the intangible assets shall be amortized before tax. We have claimed super-deduction of R&D
expenses upon above mentioned regulations in ascertaining our tax assessable profits for the Track
Record Period. We cannot assure that we will continue to receive government grants at the same
level or at all, or that we will continue to enjoy the current preferential tax treatments, in which case
our business, financial condition and results of operations may be materially and adversely affected.
We may not be able to obtain additional funding on acceptable terms or at all, which may
affect our ability to expand our business or meet unforeseen contingencies.
To grow our business and remain competitive, we may require additional capital from time to
time for our daily operations and business expansion. Our ability to obtain additional capital is
subject to a variety of uncertainties, including:
 our profitability, overall financial condition and results of operations;
 our market position and competitiveness in the SiC epitaxial wafer industry;
 general market conditions for capital-raising activities by our competitors in China; and
 economic, political and other conditions internationally.
We may be unable to obtain additional capital in a timely manner or on acceptable terms, or
at all. In addition, our future capital or other business needs could require us to sell additional equity
securities or incur additional indebtedness. The sale of additional equity or equity-linked securities
could dilute our Shareholders’ shareholding interest. The additional indebtedness and related
interest expenses could lead to increased debt service obligations and restrict our operations or our
ability to pay dividends to our Shareholders due to certain operating and financing covenants.
We may be subject to claims by third parties for intellectual property infringement.
We depend to a large extent on our ability to effectively develop and maintain intellectual
property rights relating to our business without infringing the intellectual property rights of third
parties. Our products may use patents, copyrights, trademarks or other proprietary rights owned by
other third parties. We cannot assure you that our competitors and other third parties will not bring
legal claims against us for infringing on their patents, copyrights, trademarks or other intellectual
property rights, whether such claims have merits or otherwise. The intellectual property laws in
China, which cover the validity, enforceability and scope of protection of intellectual property
rights, may be subject to revision and development in the future, and litigation is becoming a more
commonly pursued method for resolving commercial disputes. Given the foregoing and the
increasing competition in the market, we are exposed to a higher litigation risk. We may also be
subject to claims from our management’s or employees’ former employers alleging violations of
non-compete agreements, confidentiality obligations, or infringement of intellectual property
rights. There can be no assurance that such former employers will not initiate legal proceedings
against us, regardless of merit, particularly as our personnel had significant industry experience.
Any intellectual property lawsuits against us, whether successful or not, may harm our brand and
reputation.
RISK FACTORS
–6 0–


--- page 71 ---
Defending against intellectual property claims is costly and can impose a significant burden
on our management and resources. There is no guarantee that we can obtain favorable judgments
in all legal cases. If we are found to be liable for infringement upon intellectual property rights of
certain third parties, we may be required to pay damages or cease using certain technologies or
content that are critical to our products. Any resulting liabilities or expenses or any changes to our
products that we have to make to limit future liabilities may have a material adverse effect on our
business, financial condition and results of operations.
We may not have sufficient insurance coverage to cover our potential liability or losses.
We face various risks in connection with our business and may lack adequate insurance
coverage or have no relevant insurance coverage. During the Track Record Period, we provided
mandatory social insurance for our employees as required by PRC social insurance regulations, such
as pension insurance, unemployment insurance, work injury insurance and medical insurance. We
also plan to purchase property insurance and employer’s liability insurance that we believe are
customary for businesses of our size and type and in line with standard commercial practice in
China. See “Business — Insurance.” Our current insurance coverage may not be sufficient to
prevent us from suffering any loss and there is no certainty that we will be able to successfully claim
our losses under our current insurance policy on a timely basis, or at all. Any uninsured occurrence
including, among others, business disruption, material litigation, natural disaster or significant
damages to our uninsured equipment or facilities may result in substantial costs and the diversion
of resources. If we were held liable for uninsured losses or amounts and claims for insured losses
exceeding the limits of our insurance coverage, our business, financial condition, results of
operations and prospects may be materially and adversely affected.
We are subject to changing laws, regulations and social trends regarding environmental, social
and governance risks, which may increase our operational costs and our risk of non-
compliance despite our effort to be law-abiding and rule compliant. Compliance with evolving
regulations may also cause delays in our production.
We are or will be subject to rules and regulations by various governing bodies, including, for
example, once we have become a public company, the Stock Exchange and the SFC, which are
charged with the protection of investors and the oversight of companies whose securities are
publicly traded, as well as the various regulatory authorities in China, and to new and evolving
regulatory measures under applicable laws. We may also be subject to the changing social trends
on the concerns regarding environmental, social and governance risks. As we are committed to
being law-abiding and rule compliant, our efforts to comply with new and changing laws,
regulations and social trends have resulted in, and are likely to continue to result in, increased
general and administrative expenses and a diversion of management time and attention from
revenue-generating activities to compliance activities.
Our production process produces pollutants such as waste gas, wastewater, noise and solid
waste. The discharge of waste gas and other pollutants from our manufacturing operations into the
environment may give rise to liabilities that may require us to incur costs to remedy such discharge.
Should the governments impose stricter environmental protection standards and regulations in the
future, we cannot assure you that we will be able to comply with such standards and regulations at
reasonable costs, or at all. Any failure or any claim that we have failed to comply with these
regulations could cause delays in our production and capacity expansion and affect our public
image, either of which could harm our business.
Moreover, as these laws, regulations and standards may be further adjusted and optimized in
the future, their enforcement in practice may evolve over time as new guidance becomes available.
This evolution may result in continuing uncertainty for compliance and additional costs necessitated
by ongoing updates to our disclosure and governance practices. Any failure to address and comply
with these laws and regulations and any subsequent changes could subject us to substantial fines or
other liabilities or require us to suspend or adversely modify our operations. Despite our effort to
be law-abiding and rule compliant, we cannot assure you that we will always be in full compliance
with existing or future laws and regulations, or that we will be able to obtain or renew all necessary
licenses.
RISK FACTORS
–6 1–


--- page 72 ---
We have limited control over the operations of our channel partners. Our business may be
negatively affected due to risks relating to the acts of our channel partners and their potential
breach of agreements with us.
We engage with channel partners for a small percentage of our sale in Asian markets.
According to CIC, facilitating transactions through channel partners are widely adopted and are
industry norm in the relevant regions. The channel partners are primarily engaged to complement
our sales team and to facilitate transactions in accordance with the distribution trading practice of
the region where our end customers are located. By leveraging their local market expertise,
established networks, and logistical capabilities, the channel partners help us accelerate our market
entry and reduce operational complexities. Channel partners provide valuable insights into regional
regulations, customer preferences, and competitive landscapes, enabling us to focus on core
competencies while ensuring efficient market penetration and scalable growth. This strategic
partnership mitigates risks, enhances cost efficiency, and strengthens our ability to deliver
satisfactory customer service in diverse international markets. In December 31, 2022, 2023 and
2024 and September 30, 2025, we had three, three, three and three channel partners, respectively.
In 2022, 2023 and 2024 and for the nine months ended September 30, 2025, revenue from our
channel partners amounted to RMB96.1 million, RMB126.7 million, RMB72.0 million and
RMB32.1 million, respectively, representing 21.8%, 11.1%, 7.4% and 6.0% of the total revenue for
the respective periods. During the Track Record Period and up to the Latest Practicable Date, we
have no material unresolved disputes or lawsuits with our channel partners.
Furthermore, there can be no assurance that we will be successful in detecting any
non-compliance of our channel partners with the cooperation agreements. We may be exposed to the
risks of fraud or other misconduct committed by our channel partners. Fraud or other misconduct
by our channel partners may involve engaging in unauthorized misrepresentation to our customers,
misappropriating third party’s intellectual property and other proprietary rights and engaging in
bribery or other unlawful payments. In any such event, we could, as a result, be subject to claims
brought by our customers or third parties for fraud or other is conduct committed by such channel
partner, which could result in potential substantial financial liability and diversion of our
managerial and financial resources regardless of whether the claim has merits. In such event, our
business, financial condition and results of operations may be adversely affected.
Despite our effort to be law-abiding and rule compliant, we may still fail to obtain or
continuously maintain or renew approvals, licenses or permits applicable to our business
operation due to various reasons. Any such failure may have a material and adverse impact
on our business, financial condition and results of operations.
In accordance with the laws and regulations in the jurisdictions in which we operate, we are
required to maintain various approvals, licenses and permits in order to operate our business.
Despite our commitment to being law-abiding and compliant with regulations, there remains a
potential risk of failing to obtain, maintain, or renew the approvals, licenses, or permits necessary
for our business operations. If we fail to maintain compliance with such laws and regulations, or
otherwise fail to obtain or maintain any of the required approvals, licenses or permits or make or
complete the necessary filings in any of the jurisdiction where we operate our business, our
operations may be adversely affected.
In addition, in the event that we are required to renew our existing licenses or permits or
acquire new ones, whether as a result of the promulgation of new laws and regulations or otherwise,
we cannot assure you that we will be able to meet the requisite conditions and requirements, or
obtain all requisite approvals, licenses and permits in a timely manner or at a reasonable cost. If we
are unable to obtain, or experience material delays in obtaining necessary approvals, licenses and
permits, it may have a material and adverse impact on our business, financial condition and results
of operations.
RISK FACTORS
–6 2–


--- page 73 ---
We are subject to risks relating to litigation and disputes, which could adversely affect our
business, financial condition, results of operations and prospects.
We may be subject to disputes or claims of various types brought by our competitors,
employees, suppliers, customers, business partners or governmental entities against us relating to
contractual disputes, labor disputes, intellectual property infringements or disputes involving
misconducts of our employees. Such disputes and claims may evolve into litigations and damage
our reputation, thereby adversely affecting our customer base. We had not experience any material
incidents of employee fraud or related misconducts during the Track Record Period and up to the
Latest Practicable Date. However, we cannot guarantee that we will not be subject to legal
proceedings in the ordinary course of business. Litigation is distractive and expensive as it may
cause us to incur legal fees, allocate a significant portion of our resources and divert management
team’s attention from our day-to-day operations, any of which could adversely affect our business.
In the event of an adverse judgement against us, we may need to spend a significant amount to settle
claims or pay damages, which could have a material and adverse effect on our business, financial
condition, results of operations and prospects.
We are subject to anti-corruption, anti-money laundering, anti-bribery and other relevant laws
and regulations in the jurisdictions where we operate. We may be subject to investigations and
proceedings by governmental authorities for alleged infringements of these laws if our compliance
processes or internal control systems are not conducted or are not operating properly. These
proceedings may result in fines or other liabilities and could have a material adverse effect on our
reputation, business, financial conditions and results of operations. If any of our subsidiaries,
employees or other persons engage in fraudulent, corrupt or other unfair business practices or
otherwise violate applicable laws, regulations or internal controls, we could become subject to one
or more enforcement actions or otherwise be found to be in violation of such laws, which may result
in penalties, fines and sanctions and in turn adversely affect our reputation, business, financial
condition and results of operations. Given the uncertainty, complexity and scope of many of these
litigation matters, their outcome generally cannot be predicted with a reasonable degree of certainty.
Therefore, our provision for such matters may be inadequate. Moreover, even if we eventually
prevail in these matters, we could incur significant legal fees or suffer significant reputational harm,
which could have a material and adverse effect on our prospects and future growth, including our
ability to attract new business partners and customers, expand our relationships with governmental
regulators and industry groups and recruit and retain employees and agents.
We, our shareholders, affiliates, Directors, Supervisors, senior management and employees
may be involved in legal or other proceedings from time to time and may face reputational
risks and significant liabilities as a result.
We, our shareholders, affiliates, Directors, Supervisors, senior management and employees
may be involved from time to time in disputes with various parties, including but not limited to our
customers, suppliers, competitors, employees, former shareholders, device providers, insurers and
banks. For example, in January 2025, Tang Xiuhao ( ಷӸႴ), our former shareholder and an
Independent Third Party, brought a legal action against Dr. Zhao, among others, alleging and
requesting the court to confirm that the subscription of Dr. Zhao for the 50% equity interest of the
Company upon its establishment in 2011 was inaccurate capital contribution ( ̈༟ʔྼ). Tang
Xiuhao was not a shareholder or investor of the Company upon the establishment of the Company
and when the aforesaid contribution was made. Further, Tang Xiuhao and his affiliate had divested
all his investment in the Company in 2018 and had no other relationship with the Company ever
since. On June 9, 2025, Dr. Zhao won the case in the first instance ( ɓᄲ) and the claims of Tang
Xiuhao were dismissed in their entirety, and Tang Xiuhao disagreed with the judgment and filed an
appeal. As confirmed by our PRC Legal Adviser, Dr. Zhao’s then capital contribution has fulfilled
the necessary procedures and registration requirement and has complied with the then laws and
regulations in the PRC. Therefore, there is no inaccurate capital contribution from Dr. Zhao.
RISK FACTORS
–6 3–


--- page 74 ---
Any disputes involving us, our shareholders, affiliates, Directors, Supervisors, senior
management and employees may lead to legal or other proceedings, including threatened
proceedings, which may result in damages to our reputation, substantial costs and diversion of our
resources and management’s attention. In addition, we may encounter additional compliance issues
in the course of our operations, which may subject us to administrative proceedings and unfavorable
results, and result in liabilities and delays relating to our production or product launch schedules.
We cannot assure you as to the outcome of such legal proceedings, and any negative outcome may
materially and adversely affect our business, financial condition and results of operations.
Our Single Largest Shareholder has substantial influence over our Group and his interests
may not be aligned with the interests of our other Shareholders.
Our Single Largest Shareholder has significant influence in determining the outcome of any
corporate transaction or other matter submitted to the Shareholders for approval, including but not
limited to mergers, privatizations, consolidations and the sale of all, or substantially all, of our
assets, election of directors, and other significant corporate actions. Immediately following the
completion of the Global Offering, Dr. Zhao will remain as the Single Largest Shareholder of our
Group. The interests of our Single Largest Shareholder might differ from the interests of our other
Shareholders. In the event that our Single Largest Shareholder causes us to pursue businesses that
conflict with the interests of our other Shareholders, our other Shareholders could be disadvantaged,
and their interests could be damaged. Any conflict of interest between our Single Largest
Shareholder and our other Shareholders may also materially and adversely affect our operations
such as the decision and implementation of our business plans, which may in turn affect our
business and results of operations.
We may be subject to natural disasters, health epidemic, acts of war, terrorism or other factors
beyond our control.
Natural disasters, such as floods, earthquakes, sandstorms, snowstorms, fires or floods,
outbreaks of a widespread health epidemic or pandemic such as COVID-19, or other events such
as acts of war, terrorism, environmental accidents, power outages or communication interruptions
may result in loss of lives, injury, destruction of assets and may materially and adversely affect our
business. Our operations could also be disrupted if any of our employees or employees of our
business partners were suspected of having any of the epidemic or pandemic illnesses, since this
could require us or them to quarantine some or all of such employees or disinfect the facilities used
for our operations. Any of these factors and other factors beyond our control could have an adverse
effect on the overall business sentiment and environment, cause uncertainties in the regions where
we conduct business, cause our business to suffer in ways that we cannot predict and materially and
adversely affect our business, financial condition and results of operations.
Our technology infrastructure may experience unexpected system failure, interruption,
inadequacy, security breaches or cyber-attacks.
Our technology infrastructure may encounter disruptions or other outages caused by problems
or defects in our own technologies and systems, such as malfunctions in software or network
overload. Our technology infrastructure may be vulnerable to damage or interruption caused by
telecommunication failures, power loss, human error, cyber-attacks or other accidents. There is no
assurance that we can respond to such interruptions in a timely manner, or at all. Furthermore, our
technology infrastructure is also vulnerable to damages from fires, floods, earthquakes and other
natural disasters, power loss and telecommunication failures. Any network interruption or
inadequacy that causes interruptions to our operations, or failure to maintain the network and server
or solve such problems in a timely manner, could reduce our customer and user satisfaction, which
in turn could adversely affect our reputation, business and financial condition.
RISK FACTORS
–6 4–


--- page 75 ---
RISKS RELATED TO CONDUCTING BUSINESS IN JURISDICTIONS WHERE WE
OPERATE
Changes in China’s or global economic, political or social conditions or government policies
in the countries and regions where we operate could have a material and adverse effect on our
business and operations.
Substantially all of our operations are located in China. Accordingly, our business, financial
condition, results of operations and prospects may be influenced to a significant degree by
economic and social conditions in China generally and by continued economic growth in China as
a whole.
The Chinese economy has experienced significant growth over the past decades, and the PRC
regulatory authorities has implemented various measures to encourage economic growth. Some of
these measures may benefit the overall Chinese economy but may not have the same effect on us.
Any economic downturn, whether actual or perceived, further decrease in economic growth rates or
an otherwise uncertain economic outlook in our geographic markets or any other market in which
we may operate could affect our business, financial condition and results of operations.
In addition, the global economic and social conditions are evolving rapidly and are subject to
uncertainties. For example, health epidemics have caused significant downward pressure for the
global economy. Geopolitical tension and conflicts, energy crisis, inflation risk, interest rate
increases, instability in the financial system, and the adjusting of monetary policy by the U.S.
Federal Reserve impose new challenges and uncertainties on the global economy. It is unclear
whether these challenges and uncertainties will be contained or resolved, and what effects they may
have on the global economic conditions in the long term. Furthermore, sanctions and export control
measures are unilaterally imposed by the U.S. or other jurisdictions from time to time. These
measures may have a significant impact on the targeted countries, markets and/or entities. Chinese
companies may be affected by such sanctions or export control measures. We may also be exposed
to risks in dealing with business partners subject to sanctions or export controls. As a result, we
could be required to incur additional costs to comply with these complicated regulations and
measures and could face penalties for any violation, even if inadvertent.
Y ou may experience difficulties in effecting service of legal process and enforcing judgments
against us and our management.
We are a company incorporated under the laws of the PRC and substantially all of our
business, assets and operations are located in China. In addition, the majority of our Directors,
Supervisors and executive officers reside in China. As a result of cross-jurisdiction enforcement of
judgments or cross-jurisdiction initiation of proceedings, it may not be possible for you to directly
effect service of process upon us or such Directors, Supervisors or executive officers who reside in
China, including with respect to matters arising under U.S. federal securities laws or applicable
state securities laws. Pursuant to Arrangements for Reciprocal Recognition and Enforcement of
Judgments in Civil and Commercial Cases between Courts of the Mainland and Hong Kong Special
Administrative Region (τ
ર) effective on January 29, 2024, promulgated by the Supreme People’s Court, a party with an
enforceable final court judgment rendered by any designated people’s court of Mainland China or
any designated Hong Kong Special Administrative Region court with respect to any civil and
commercial cases excluding certain types of which, may apply for recognition and enforcement of
the judgment in the relevant people’s court of Mainland China or Hong Kong Special
Administrative Region court.
China has not entered into a treaty for the reciprocal recognition and enforcement of court
judgments with the United States, the United Kingdom, Japan and many other countries. In
addition, Hong Kong, China has no arrangement with the United States for reciprocal enforcement
of judgments. In accordance with the Civil Procedure Law of the PRC and other applicable laws,
RISK FACTORS
–6 5–


--- page 76 ---
regulations, and interpretations, a court judgment obtained in the United States and any of the other
jurisdictions mentioned above may be recognized and enforced in Mainland China or Hong Kong
in consideration of the treaties providing for the reciprocal enforcement of judgments of courts
between China and the country where the judgment was made.
We are a PRC enterprise and we are subject to PRC tax on our global income, and any gains
on the sales of our H Shares by investors and dividends paid to investors on our H Shares may
be subject to PRC tax.
Non-PRC resident individuals and non-PRC resident enterprises are subject to different tax
obligations with respect to dividends received from us or gains realized upon the sale or other
disposition of our H Shares in accordance with applicable PRC tax laws, rules and regulations.
Pursuant to the PRC Individual Income Tax Law (),
non-PRC resident individuals are subject to a 20% PRC individual income tax on their dividend
income derived from China and we are required to withhold such tax from our dividend payments.
If there is an applicable tax treaty to avoid double taxation and taxation evasion between China and
the jurisdiction where the foreign individual resides, the applicable tax rate shall be determined in
accordance with such tax treaty. Considering that the applicable tax rate on dividends is usually
10% according to tax treaties or tax agreements, and that the number of stockholders is large for
a listed company, to simplify the tax administration, generally a domestic non-foreign-investment
enterprise with shares listed in Hong Kong can withhold dividend income tax at a rate of 10%. It
shall be determined in accordance with the relevant laws and regulations in force at the time as to
whether gains realized by non-PRC resident individuals on dispositions of H Shares are subject to
the PRC individual income tax.
Pursuant to the PRC Enterprise Income Tax Law () and
other applicable PRC tax rules and regulations, non-PRC resident enterprises that do not have
establishments or premises in the PRC, or have establishments or premises in the PRC but their
income is not related to such establishments or premises are subject to a 10% PRC enterprise
income tax rate on dividend income received from a PRC company and gains realized upon the sale
or other dispositions of equity interest in a PRC company. The 10% tax rate is subject to reduction
under any special arrangements or applicable treaties between China and the jurisdiction where the
nonresident enterprise domiciles. In accordance with applicable regulations, we intend to withhold
tax at a rate of 10% from dividends paid to non-PRC resident enterprise holders of our H Shares
(including HKSCC Nominees). Non-PRC resident enterprises that are entitled to be taxed at a
reduced rate under an applicable income tax treaty will be required to apply to the PRC tax
authorities for a refund of any amount withheld in excess of the applicable treaty rate, and payment
of such refund will be subject to the PRC tax authorities’ verification.
It shall be determined in accordance with the relevant laws and regulations in force at the time
as to the further interpretation and implementation of the PRC EIT Law and other applicable PRC
tax rules and regulations by the PRC tax authorities, including whether and how non-PRC resident
holders of our H Shares are subject to personal income tax or enterprise income tax on gains
realized upon the sale or other dispositions of their H shares. In addition, the value of your
investment in our H Shares may be materially affected by unfavorable changes in the applicable tax
rates currently stipulated by the PRC tax authorities.
Payment of dividends is subject to restrictions under PRC laws.
Under the PRC laws, dividends may be paid only out of distributable profits. Our distributable
profits represent our distributable net profits less appropriations to statutory surplus reserve, general
reserve, and discretionary surplus reserve (as approved by our Shareholders’ meeting), each such
appropriation based on the unconsolidated net profit determined under PRC GAAP . Our
distributable net profit referred to above represents the lowest of (i) our net profit attributable to our
equity holders for a period plus distributable profits or net of accumulated losses, if any, at the
RISK FACTORS
–6 6–


--- page 77 ---
beginning of such period, as determined under PRC GAAP , and (ii) our net profit attributable to our
equity holders for the period plus distributable profits or net of accumulated losses, if any, at the
beginning of such period, as determined under IFRS. As a result, we may not have sufficient
distributable profits, if any, to make dividend distributions to our Shareholders in the future,
including in respect of periods where we register an accounting profit. Any distributable profits that
are not distributed in a given year are retained and available for distribution in subsequent years.
We are subject to PRC regulatory authorities’ regulations on currency conversion and risks
relating to fluctuations in exchange rates.
Given the nature of our business, we regularly deal in multiple currencies and are therefore
exposed to significant foreign exchange risk. We receive a lot of our revenues in Renminbi, the
exchange of which is subject to the applicable regulatory requirements. A portion of these revenues
must be converted into other currencies in order to meet our foreign currency obligations. For
example, we need to obtain foreign currency to make payments of declared dividends, if any, on our
H Shares.
Under the PRC’s existing foreign exchange regulations, by complying with certain procedural
requirements, following completion of the Global Offering, we will be able to undertake current
account foreign exchange transactions, including payment of dividends without prior approval from
the SAFE. However, in the future, the PRC regulatory authorities may, at its discretion in
accordance with law, take measures to restrict access to foreign currencies for capital account and
current account transactions under certain circumstances. In this case, we may not be able to pay
dividends in foreign currencies to holders of our H Shares.
The value of the Renminbi against the U.S. dollar and other currencies fluctuates and is
affected by, among other things, changes in China’s international economic conditions and the PRC
regulatory authority’s fiscal and currency policies. Since 1994, the conversion of Renminbi into
foreign currencies, including Hong Kong and U.S. dollars, has been based on rates published by the
PBOC, which are set daily based on the previous business day’s inter-bank foreign exchange market
rates and current exchange rates on the world financial markets.
Any appreciation of the Renminbi against the U.S. dollar or any other foreign currencies may
result in the decrease in the value of our foreign currency-denominated assets. Conversely, any
devaluation of the Renminbi may adversely affect the value of, and any dividends payable on, our
H Shares in foreign currency terms. Furthermore, we are also currently required to obtain the
approval of the SAFE before converting significant sums of foreign currencies into Renminbi. All
of these factors could materially and adversely affect our financial condition and results of
operations.
The civil law system in China differs from common law systems.
The legal system in China is a civil law system based on written statutes. Unlike common law
systems, it is a system in which decided legal cases have limited precedential value. The laws and
regulations in China are subject to further revisions or interpretations from time to time. New laws,
regulations, guidelines and interpretations that are promulgated in the future may affect the rights
and obligations of the parties involved. Therefore, you should reasonably expect the legal
protections you are entitled to under legal system in China. We cannot assure you that we will
always be in full compliance with existing or future laws and regulations, or that we will be able
to obtain or renew all necessary licenses.
RISK FACTORS
–6 7–


--- page 78 ---
Any failure to make adequate contributions to various employee benefit plans as required by
PRC regulations may subject us to penalties.
Companies operating in China are required to participate in various employee benefit plans,
including pension insurance, unemployment insurance, medical insurance, work-related injury
insurance, maternity insurance and housing provident fund and contribute to the amounts equal to
certain percentage of salaries, including bonuses and allowances, of their employees up to a
maximum amount specified by the local regulatory authorities from time to time at locations where
they operate their business.
During the Track Record Period and as of the Latest Practicable Date, we have not received
any order or notice from the local authorities regarding the shortfall in payments and contributions
of social insurance and housing provident funds, and according to our PRC Legal Adviser, the risk
of us being subject to administrative penalties is remote. However, we cannot assure you that we
will not be subject to any order from the relevant government authorities in the future that requires
us to pay the outstanding amount or imposes late fees or fines on us. We cannot assure you that we
will always be in full compliance with existing or future laws and regulations, or that we will be
able to obtain or renew all necessary licenses. We may also incur additional costs to stay compliant
with evolving laws and regulations. Any such development could adversely affect our business,
financial condition, results of operations and prospects.
RISKS RELATED TO THE GLOBAL OFFERING
There has been no previous public market for our H Shares, and the liquidity and market
price of our H Shares may be volatile.
Prior to the Global Offering, there has been no public market for our H Shares. The H Share
Offer Price is the result of negotiations between us and the Sponsor-Overall Coordinator on behalf
of the Underwriters and may differ significantly from the market price for our H Shares following
the Global Offering. We have applied for the listing of, and permission to deal in, our H Shares on
the Hong Kong Stock Exchange. A listing on the Hong Kong Stock Exchange, however, does not
guarantee that an active and liquid trading market for our H Shares will develop, or if it does
develop, will be sustained following the Global Offering or that the market price of our H Shares
will not decline following the Global Offering.
Furthermore, the price and trading volume of our H Shares may be volatile. The following
factors may affect the volume and price at which our H Shares will trade:
 actual or anticipated fluctuations in our revenues and results of operations;
 news regarding the recruitment or loss of key personnel by ourselves or our competitors;
 announcements of competitive developments, acquisitions or strategic alliances in our
industry;
 changes in earnings estimates or recommendations by financial analysts;
 potential litigation or regulatory investigations;
 general market conditions or other developments affecting us or our industry;
 the operating and stock price performance of other companies, other industries and other
events or factors beyond our control; and
 the release of lock-up or other transfer restrictions on our outstanding H Shares, or sales
or perceived sales of additional H Shares by us or other Shareholders.
RISK FACTORS
–6 8–


--- page 79 ---
Moreover, the securities market has from time to time experienced significant price and
volume fluctuations that were unrelated, or not directly related, to the operating performance of the
underlying companies. These broad market and industry fluctuations may have a material and
adverse effect on the market price and trading volume of our H Shares.
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. In particular, the business and performance and
the market price of the shares of other companies engaging in similar business may 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, regulatory developments,
relationships with our suppliers, movements or activities of key personnel, or actions taken by
competitors. Moreover, shares of other companies listed on the Hong Kong Stock Exchange with
significant operations and assets in China 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 performance
but related to the overall economic conditions in Hong Kong, the PRC or elsewhere in the world.
We cannot assure you that the trading price and volume of our H Shares will remain stable or
appreciate over time, and investors may experience substantial losses. In addition, the volatility in
the trading price and volume of our H Shares may also negatively impact our ability to raise capital
in the future through the issuance of additional equity securities.
Substantial future sales or the expectation of substantial sales of our H Shares in the public
market following the Global Offering could materially and adversely affect the price of our H
Shares.
Although our Single Largest Shareholder is subject to restrictions on their sales of H Shares
within 12 months from the Listing Date as described in “Underwriting” in this Prospectus, future
sales of a significant number of our H Shares by our Single Largest Shareholder or other existing
shareholders in the public market after the Global Offering, or the perception that these sales could
occur, could cause the market price of our H Shares to decline and could materially impair our
future ability to raise capital through offerings of our H Shares. We cannot assure you that our
Single Largest Shareholder, or other existing shareholders will not dispose of H Shares held by them
or that we will not issue H Shares pursuant to the general mandate to issue shares granted to our
Directors, upon the expiration of restrictions set out above. We cannot predict the effect, if any, that
any future sales of Shares by our Single Largest Shareholder or other existing Shareholders, or the
Shares available for sale by our Single Largest Shareholder or other existing Shareholders, or the
issuance of Shares by our Company may have on the market price of the H Shares. Sale or issuance
of a substantial number of Shares by our Single Largest Shareholder or us, or the market perception
that such sale or issuance may occur, could materially and adversely affect the prevailing market
price of the H Shares.
We may need additional capital, and the sale or issue of additional H Shares or other equity
securities could result in additional dilution to our Shareholders.
Notwithstanding our current cash and cash equivalents and the net proceeds from the Global
Offering, we may require additional cash resources to finance our continued growth or other future
developments. We cannot assure you that financing will be available in the amounts or on terms
acceptable to us, if at all. If we fail to raise additional funds, we may need to sell additional equity
securities, which could result in additional dilution to our Shareholders.
RISK FACTORS
–6 9–


--- page 80 ---
We may not be able to pay dividends in the foreseeable future after the Global Offering.
We may not be able to pay any cash dividends in the foreseeable future. Therefore, you should
not rely on an investment in our H Shares as a source for any future dividend income.
Our ability to pay dividends will depend on various factors, including whether we are able to
generate sufficient earnings. Distribution of dividends shall be decided by our Board of Directors
at their discretion and will be subject to the corporate approval processes. A decision to declare or
to pay dividends and the amount thereof depend on various factors, including but not limited to our
results of operations, cash flows and financial position, operating and capital expenditure
requirements, distributable profits as determined under PRC GAAP or IFRS, our Articles of
Association and other constitutional documents, the PRC Company Law and any other applicable
PRC laws and regulations, market conditions, our strategy and projection for our business,
contractual restrictions and obligations, taxation, regulatory restrictions and any other factors from
time to time deemed by our Board of Directors as relevant to the declaration or suspension of
dividends. As a result, there can be no assurance whether, when and in what form we will pay
dividends in the future. Subject to any of the above constraints, we may not be able to pay dividends
in accordance with our dividend policy. See “Financial Information — Dividend.”
Certain facts, forecast and statistics derived from external sources contained in this
Prospectus may not be reliable and the market opportunity estimates may not be accurate.
We have derived certain facts and other statistics in this Prospectus, particularly those relating
to the general economy and the industry in which we operate, from information provided by various
public sources, industry associations, independent research institutes and other third-party sources,
including a report prepared by CIC that we commissioned. We have not independently verified any
information or statistics sourced exclusively from official government channels. While we have
taken reasonable care in the reproduction of the information, we cannot assure you as to the
accuracy and reliability of such facts and statistics. Y ou should consider carefully how much weight
or importance you should attach to or place on such facts or statistics.
Market opportunity estimates included in this Prospectus, including our ability to capture a
meaningful share of the relevant markets, are subject to significant uncertainty and are based on
assumptions and estimates that may not prove to be accurate. The variables that go into the
calculation of our market opportunity are subject to change over time, and there is no guarantee that
our market opportunity estimates will materialize in customers using our products and services as
anticipated. Any expansion in our market depends on a number of factors, including the cost,
performance, and perceived value associated with our business and those of our competitors. Even
if the market in which we compete meets the size estimates and growth forecasted in this
Prospectus, our business could fail to grow at similar rates, if at all. Our growth is subject to many
factors, including our success in implementing our business strategy, which is inherently subject to
certain risks and uncertainties.
Forward-looking statements contained in this Prospectus are subject to risks and
uncertainties.
This Prospectus contains certain statements and information that are forward-looking and uses
forward-looking terminology such as “believe,” “expect,” “estimate,” “predict,” “aim,” “intend,”
“will,” “may,” “plan,” “consider,” “anticipate,” “seek,” “should,” “could,” “would,” “continue,”
and other 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
RISK FACTORS
–7 0–


--- page 81 ---
forward-looking statements in this Prospectus, whether as a result of new information, future events
or otherwise. Accordingly, you should not place undue reliance on any forward-looking
information. All forward-looking statements in this Prospectus are qualified by reference to this
cautionary statement.
Investors should read the entire Prospectus carefully and should not consider any particular
statements in this Prospectus or in published media reports without carefully considering the
risks and other information contained in this Prospectus.
The Global Offering is being made solely on the basis of the information and representations
contained in this Prospectus, which are true and accurate to the best of our knowledge and belief.
Any information not contained in this Prospectus should not be relied upon in making an investment
decision with respect to the securities being offered.
Prior to the publication of this Prospectus, there has been coverage in the media regarding us
and the Global Offering, which may have contained among other things, certain financial
information, projections, valuations and other forward-looking information about us and the Global
Offering. Investors should be aware that information and opinions published by third-party sources
may have been based on outdated, incomplete, or inaccurate information. These sources may also
have conflicts of interest, and their opinions may not be independent or objective. The media’s
coverage of our company and the Global Offering may be influenced by a wide range of factors,
including the bias of individual journalists, the preferences of media outlets, and the demands of
advertisers.
We have not authorized the disclosure of any such information in the press or media and do
not accept any responsibility for the accuracy or completeness of such media coverage or
forward-looking statements. We make no representation as to the appropriateness, accuracy,
completeness or reliability of any information disseminated in the media. We disclaim any
information in the media to the extent that such information is inconsistent or conflicts with the
information contained in this Prospectus. Accordingly, prospective investors are cautioned to make
their investment decisions on the basis of the information contained in this Prospectus only and
should not rely on any other information.
RISK FACTORS
–7 1–


--- page 82 ---
In preparation for the Listing, we have sought the following waivers from strict compliance
with the relevant provisions of the Listing Rules.
W AIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
According to Rule 8.12 of the Listing Rules, a new applicant for a primary listing on the Stock
Exchange 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. Rule 19A.15 of the
Listing Rules further provides that the requirement in Rule 8.12 of the Listing Rules may be waived
by having regard to, among other considerations, our arrangements for maintaining regular
communication with the Stock Exchange.
We do not have a sufficient management presence in Hong Kong for the purposes of satisfying
the requirements under Rules 8.12 and 19A.15 of the Listing Rules. Our headquarters, senior
management, business operations and assets are primarily based outside of Hong Kong. Our
executive Directors ordinarily reside in the PRC and, given that they play very important roles in
our Company’s business operations, it is in our best interests for them to continue to be based where
our Group has significant operations; it would not be beneficial to or appropriate for our Group, and
therefore not in the best interests of our Company or the Shareholders as a whole, to relocate any
of our existing executive Directors to Hong Kong or appoint additional executive Directors
ordinarily resident in Hong Kong.
Therefore, 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 Rules 8.12 and 19A.15 of the Listing
Rules. We will ensure that there is regular and effective communication between us and the Stock
Exchange based on, among others, the following conditions:
(i) pursuant to Rule 3.05 of the Listing Rules, we have appointed and will continue to
maintain two authorized representatives, who will act as our principal channel of
communication with the Stock Exchange and ensure that our Company complies with the
Listing Rules at all times. The two authorized representatives appointed are Dr. Zhao and
Ms. Wong Wai Y ee, Ella (the “ Authorized Representatives ”). Ms. Wong Wai Y ee, Ella
is situated and based in Hong Kong, and will be available to meet with the Stock
Exchange in Hong Kong within a reasonable time frame upon the request of the Stock
Exchange. Both of the Authorized Representatives will be readily contactable by
telephone and email to deal promptly with enquiries from the Stock Exchange. Our
Company has provided contact details of the two Authorized Representatives to the
Stock Exchange and will inform the Stock Exchange promptly in respect of any change
in the Authorized Representatives;
(ii) both Authorized Representatives have the means to contact all Directors (including the
independent non-executive Directors) promptly at all times as and when the Stock
Exchange wishes to contact our Directors on any matters. Our Company has
implemented a policy whereby (i) each Director has provided their respective valid
phone numbers or other means of communication to the Authorized Representatives; (ii)
in the event that a Director expects to travel or is otherwise out of office, he/she will
endeavor to provide his/her phone number of the place of his/her accommodation to the
Authorized Representatives or maintain an open line of communication via his/her
mobile phone; and (iii) each Director has provided his/her mobile phone number, office
phone number, email address and, where available, fax number to the Stock Exchange
and will inform the Stock Exchange promptly if there are any changes to the contact
details of the Directors;
W AIVERS AND EXEMPTION
–7 2–


--- page 83 ---
(iii) pursuant to Rule 3.20 of the Listing Rules, each Director has provided his/her contact
information to the Stock Exchange and to the Authorized Representatives. This will
ensure that the Stock Exchange and the Authorized Representatives should have means
for contacting all Directors promptly at all times as and when required;
(iv) all our Directors who are not ordinarily resident in Hong Kong have confirmed that they
possess or can apply for valid travel documents to visit Hong Kong and will be able to
meet with relevant members of the Stock Exchange in Hong Kong upon reasonable
notice, when required;
(v) pursuant to Rule 3A.19 of the Listing Rules, we have retained the services of Rainbow
Capital (HK) Limited as our Compliance Adviser upon Listing 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 act as an additional
channel of communication with the Stock Exchange and will be available to respond to
enquiries from the Stock Exchange. The contact details of the Compliance Adviser have
been provided to the Stock Exchange;
(vi) our Authorized Representatives, Directors and other officers of our Company will
promptly provide such information and assistance as the Compliance Adviser may
reasonably require in connection with the performance of the Compliance Adviser’s
duties as set forth in Chapter 3A of the Listing Rules. There will be adequate and
efficient means of communication between our Company, Authorized Representatives,
Directors and other officers of our Company and the Compliance Adviser, and, to the
extent reasonably practicable and legally permissible, we will keep the Compliance
Adviser informed of all communications and dealings between the Stock Exchange and
us. Meetings between the Stock Exchange and our Directors may be arranged through
our Authorized Representatives or the Compliance Adviser, or directly with our
Directors within a reasonable time frame. We will inform the Stock Exchange as soon
as practicable in respect of any change of Authorized Representatives and/or the
Compliance Adviser;
(vii) we will appoint other professional advisers (including legal advisers in Hong Kong)
after the Listing to assist us in dealing with any questions which may be raised by the
Stock Exchange and to ensure that there will be prompt and effective communication
with the Stock Exchange; and
(viii) our Company has designated staff members as the communication officers at our
headquarters after the Listing who will be responsible for maintaining day-to-day
communication with the Authorized Representatives and our Company’s professional
advisers in Hong Kong, including our legal advisers in Hong Kong and the Compliance
Adviser, to keep abreast of any correspondence with and/or enquiries from the Stock
Exchange and report to our executive Directors to further facilitate communication
between the Stock Exchange and our Company.
W AIVERS AND EXEMPTION
–7 3–


--- page 84 ---
W AIVER IN RESPECT OF STRICT COMPLIANCE WITH RULE 4.04(1) OF THE LISTING
RULES AND EXEMPTION FROM STRICT COMPLIANCE WITH SECTION 342(1) 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
Pursuant to Rule 4.04(1) of the Listing Rules, the accountants’ report contained in the
prospectus must include, inter alia , the results of the listing applicant and its subsidiaries in respect
of each of the three financial years immediately preceding the issue of the prospectus or such
shorter period as may be acceptable to the Stock Exchange.
Pursuant to Rule 13.49(1) of the Listing Rules, issuers shall publish their preliminary financial
results no later than three months after the end of each financial year.
Pursuant to section 342(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, a prospectus shall include 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.
Pursuant to paragraph 27 of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, a listing applicant is required to include in its prospectus a
statement as to its gross trading income or sales turnover (as may be appropriate) 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 between the more important trading activities.
Pursuant to paragraph 31 of Part II of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, a listing applicant is required to include in its prospectus a
report by its auditors with respect to profits and losses in respect of each of the three financial years
immediately preceding the issue of the prospectus.
Pursuant to section 342A(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, the SFC may issue, subject to such conditions (if any) as it thinks fit, a certificate of
exemption from compliance with the relevant requirements under the Companies (Winding Up and
Miscellaneous Provisions) Ordinance if, having regard to the circumstances, the SFC considers that
the exemption will not prejudice the interests 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.
Pursuant to paragraph 19 of Chapter 1.1A of the Guide for New Listing Applicants published
by the Stock Exchange, in view of the shortened deadline for releasing preliminary results
announcements and to enable potential investors to have adequate and timely information, where an
applicant issues its listing document in the third month after the latest year end, the Stock Exchange
has provided the conditions for granting a waiver from strict compliance with Rule 4.04(1) of the
Listing Rules as follows: (i) the applicant must list on the Stock Exchange within three months after
the latest year end; (ii) the applicant must obtain a certificate of exemption from the SFC on
compliance with the requirements under the Companies (Winding Up and Miscellaneous
Provisions) Ordinance; (iii) the financial information for the latest financial year and a commentary
on the results for that financial year must be included in the listing document. The financial
information to be included in the listing document must (a) follow the same content requirements
as for a preliminary results announcement under Rule 13.49 of the Listing Rules, and (b) be agreed
with the reporting accountants following their review under Practice Note 730 “Guidance for
Auditors Regarding Preliminary Announcements of Annual Results” issued by the Hong Kong
Institute of Certified Public Accountants; and (iv) the Company will not be in breach of its
constitutional documents or laws and regulations of the PRC or other regulatory requirements
regarding its obligation to publish preliminary results announcements.
W AIVERS AND EXEMPTION
–7 4–


--- page 85 ---
The Accountants’ Report for each of the three years ended December 31, 2022, 2023 and 2024
and the nine months ended September 30, 2025 has been prepared and is set out in Appendix I to
this Prospectus, but does not include the consolidated results of the Group in respect of the full year
immediately preceding the proposed date of issue of this Prospectus, being the full year ended
December 31, 2025, as required pursuant to the relevant requirements set out above. Strict
compliance with such requirements would be unduly burdensome, and a waiver and exemption
therefrom would not prejudice the interests of the investing public for the following reasons:
(a) there would not be sufficient time for our Company and the reporting accountants of our
Company 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 a substantial amount of audit-related work to
prepare, update and finalize the Accountants’ Report and this Prospectus, and the
relevant sections of this Prospectus would need to be updated to cover the additional
period, incurring additional time and costs. Our Directors consider that the benefits to
existing and prospective Shareholders may not justify the additional work and expenses
involved and the delay to the Listing timetable;
(b) the Company has included in this Prospectus (i) the Accountants’ Report covering the
three years ended December 31, 2022, 2023 and 2024 and the nine months ended
September 30, 2025, (ii) the unaudited preliminary financial information of the Group
for the year ended December 31, 2025 and a commentary on the results for the year,
which has been agreed with the reporting accountants following their review under
Practice Note 730 “Guidance for Auditors Regarding Preliminary Announcements of
Annual Results” issued by the Hong Kong Institute of Certified Public Accountants, and
such disclosure is no less than the content requirements for a preliminary results
announcement under Rule 13.49 of the Listing Rules, and (iii) the information regarding
the recent development of our Group subsequent to the Track Record Period and up to
the Latest Practicable Date;
(c) our Directors and the Sole Sponsor herein confirm that, after performing all reasonable
due diligence work which they consider appropriate up to the date of this Prospectus,
there has been no material adverse change to the financial and trading positions or
prospects of our Group since October 1, 2025 (immediately following the date of the
latest audited statement of financial position in the Accountants’ Report set out in
Appendix I to this Prospectus) up to the date of this Prospectus and there has been no
event which would materially affect the information shown in the Accountants’ Report
as set out in Appendix I to this Prospectus, the section headed “Financial Information”,
the unaudited preliminary financial information for the year ended December 31, 2025
as set out in Appendix III to this Prospectus and information regarding our Company’s
recent developments subsequent to the Track Record Period and up to the date of this
Prospectus;
(d) our Company is of the view that the Accountants’ Report covering the three years ended
December 31, 2022, 2023 and 2024 and the nine months ended September 30, 2025, the
unaudited pro forma financial information as set out in Appendix II to this Prospectus,
the unaudited preliminary financial information for the year ended December 31, 2025
as set out in Appendix III to this Prospectus, together with other disclosure in this
Prospectus, have already provided the potential investors with adequate and reasonably
necessary information in the circumstances to form a view on the track record of our
Company. 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 of our Group are
included in this Prospectus. Therefore, the waiver and exemption would not prejudice
the interests of the investing public;
W AIVERS AND EXEMPTION
–7 5–


--- page 86 ---
(e) our Company will not be in breach of its Articles of Association or laws and regulations
of the PRC or other regulatory requirements as a result of not publishing its preliminary
results announcement for the year ended December 31, 2025 in accordance with Rule
13.49(1) of the Listing Rules. Pursuant to the Note to Rule 13.49(1) of the Listing Rules,
our Company will publish an announcement after Listing and no later than March 31,
2026 stating that the relevant financial information has been included in this Prospectus;
and
(f) our Company will comply with the requirements under Rule 13.49(1) of the Listing
Rules in respect of the publication of our annual report. Our Company currently expects
to issue our annual report for the financial year ended December 31, 2025 on or before
April 30, 2026. 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.
As such, an application has been made to the Stock Exchange for, and the Stock Exchange has
granted us, a waiver from strict compliance with Rule 4.04(1) of the Listing Rules, on the conditions
that: (i) this Prospectus will be issued on or before March 20, 2026 and the Company’s H Shares
will be listed on or before March 31, 2026, i.e. three months after the latest financial year end; (ii)
our Company obtains from the SFC a certificate of exemption from strict compliance with the
requirements under section 342(1) 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;
(iii) the preliminary unaudited financial information for the year ended December 31, 2025 and a
commentary on the results for the year shall be included in this Prospectus; and (iv) our Company
will not be in breach of our constitutional documents or laws and regulations of the PRC or other
regulatory requirements regarding its obligation to publish preliminary results announcements.
An application has also been made to the SFC for, and the SFC has granted us, a certificate
of exemption under section 342A of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance from strict compliance with the requirements under paragraph 27 of Part I and paragraph
31 of Part II of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance on the conditions that: (i) the particulars of the exemption are set out in this Prospectus;
and (ii) this Prospectus will be issued on or before March 20, 2026 and the Company’s H Shares
will be listed on or before March 31, 2026, i.e. three months after the latest financial year end.
W AIVER AND CONSENT IN RELATION TO THE SUBSCRIPTION FOR H SHARES BY
CLOSE ASSOCIATES OF MINORITY EXISTING SHAREHOLDERS AS CORNERSTONE
INVESTOR
Rule 2.03(2) of the Listing Rules provides that the issue and marketing of securities should
be conducted in a fair and orderly manner.
Rule 10.04 of the Listing Rules provides that a person who is an existing shareholder of the
issuer may only subscribe for or purchase any securities for which listing is sought which are being
marketed by or on behalf of a new applicant either in his or its own name or through nominees if
the conditions in Rules 10.03(1) and (2) of the Listing Rules are fulfilled.
The conditions in Rules 10.03(1) and (2) of the Listing Rules are that (i) no securities are
offered to the existing shareholders on a preferential basis and no preferential treatment is given to
them in the allocation of the securities; and (ii) the minimum prescribed percentage of public
shareholders required by Rule 8.08(1) of the Listing Rules is achieved.
Paragraph 1C(2) of Appendix F1 to the Listing Rules provides that, without the prior written
consent of the Stock Exchange, no allocations will be permitted to directors or existing shareholders
of the applicant or their close associates, whether in their own names or through nominees unless
the conditions set out in Rules 10.03 and 10.04 of the Listing Rules are fulfilled.
W AIVERS AND EXEMPTION
–7 6–


--- page 87 ---
Paragraph 13 of Chapter 4.15 of the Guide for New Listing Applicants sets out the Existing
Shareholders Conditions (as defined under Chapter 4.15 of the Guide for New Listing Applicants)
for the Stock Exchange to consider granting a consent and waiver for placing to existing
shareholders or their close associates.
Xiamen Advanced Intelligent Manufacturing Industry Investment Limited (΋ආ౽ிପุ
ʮ̡)( “ Xiamen Advanced Intelligent ”) is a company incorporated in Hong Kong and is
wholly owned by Xiamen Advanced Manufacturing Equity Investment Fund Partnership (Limited
Partnership) (ΥྫΆุ(Υྫ)) (“ Xiamen Advanced
Manufacturing Fund ”), a limited partnership established in the PRC on June 19, 2024. Xiamen
Advanced Manufacturing Fund is managed and held as to 0.1% and 0.0125% by its respective
general partners, (i) Xiamen Haiyi Investment Co., Ltd. (ʮ̡), a wholly-owned
subsidiary of CCRE Group Co., Ltd. (ʮ̡)( “ CCRE ”), which is ultimately
wholly owned and controlled by the State-owned Assets Supervision and Administration
Commission of Xiamen Municipal People’s Government (ࡰ
ึ)( “ Xiamen SASAC ”) and (ii) Golden Brics (Xiamen) Equity Investment Fund Co., Ltd. (ጌ
(ژ)ʮ̡), which is held as to 51% by Fujian Pingtan Golden Brics Think Tank
Investment Consulting Co., Ltd. (ʮ̡), and 49% by CCRE.
Xiamen Xinyi Technology Industry Co., Ltd. (ʮ̡)( “ Xinyi Technology ”),
CCRE and Xiamen Torch Industry Equity Investment Management Co., Ltd. (ᛆҳ
ʮ̡)( “ Torch Industry ”) are limited partners of Xiamen Advanced Manufacturing
Fund, holding 62.50%, 24.88% and 5.00% limited partnership interests, respectively. CCRE holds
60% equity interest in Xinyi Technology. Accordingly, Xinyi Technology is a subsidiary under the
control of CCRE and is thus ultimately controlled by Xiamen SASAC. Torch Industry is indirectly
wholly owned by Xiamen SASAC.
Xiamen Hi-Tech Investment and Torch Capital, each an existing Shareholder of the Company,
are both wholly owned subsidiaries of Xiamen Torch Group Co., Ltd. (ʮ̡),
which is wholly owned by Xiamen SASAC.
Chantou Juxiang Xinhan, Xiamen Gongrong Industry and Xiamen Chantou Gongrong are
existing Shareholders of the Company. The general partner of Chantou Juxiang Xinhan is Xiamen
Production Investment Xinyuan Technology Investment Co., Ltd. (ʮ
̡)(“Xinyuan Technology ”), a company wholly owned by Xiamen Industrial Investment Co., Ltd.
(ʮ̡)(“Xiamen Chantou ”) which is indirectly wholly owned by Xiamen
Municipal Finance Bureau (҅). Xinyuan Technology is the general partner of Xiamen
Gongrong Industry and Xiamen Chantou Gongrong.
Qingda Runyu and Qingda Xinsheng are existing Shareholders of the Company. The general
partner of Qingda Runyu is Xiamen Qingda Haixia Private Equity Fund Management Co., Ltd. ( ข
ʮ̡)( “Xiamen Qingda ”), which is ultimately controlled by Xiamen
Huli District Finance Bureau (҅). The general partner of Qingda Xinsheng is
Xiamen Qingda Xincheng Investment Partnership (Limited Partnership) (ϓҳ༟Υྫ
Άุ(Υྫ)), whose general partner is Xiamen Qingda.
Therefore, Xiamen Advanced Intelligent, a cornerstone investor of the Company, is the close
associate of Xiamen Hi-Tech Investment, Torch Capital, Chantou Juxiang Xinhan, Xiamen
Gongrong Industry, Xiamen Chantou Gongrong, Qingda Runyu and Qingda Xinsheng (the
“Minority Existing Shareholders ”).
For the avoidance of doubt, ICBC Financial Asset Investment Co., Ltd. (ፄ༟ପҳ༟Ϟ
ʮ̡)( “ ICBC Investment ”), which is also an existing Shareholder of the Company, is not
considered a close associate of the Minority Existing Shareholders for the purpose of this waiver
application although ICBC Capital Management Co., Ltd. (ʮ̡)( “
ICBC CM ”),
a subsidiary of ICBC Investment, holds joint investments in Xiamen Gongrong Industry and
Xiamen Chantou Gongrong (“ Joint Investment Vehicles ”).
W AIVERS AND EXEMPTION
–7 7–


--- page 88 ---
The direct shareholdings in the Company held by ICBC Investment shall not be aggregated
with the direct shareholdings of the Minority Existing Shareholders when considering this waiver
application for the cornerstone investor subscription and the calculation of the relevant Minority
Existing Shareholders’ shareholdings on the following basis:
Independent Institutional Nature: ICBC Investment is a large-scale, professional financial
asset investment institution operating at a national level. Its investment philosophy and operational
mandate differ fundamentally from those of local state-owned asset administrators, such as Xiamen
SASAC or the Xiamen Municipal Finance Bureau, whose primary objectives are inherently tied to
regional economic and industrial development. Xiamen SASAC and the Xiamen Municipal Finance
Bureau have no jurisdiction or authority over ICBC Investment or its investments.
Absence of Acting in Concert Arrangement: There is no formal or informal agreement,
arrangement, or understanding between ICBC Investment and the Minority Existing Shareholders
to act in concert to consolidate control over the Company. The historical joint investments made
through the Joint Investment V ehicles are entirely ordinary-course, arm’s-length commercial
investments aimed at maximizing investment returns. Overlapping joint investments in third-party
entities do not legally constitute a concert party relationship in respect of the Company, and ICBC
Investment has no commercial rationale or intention to act in concert with the Xiamen State-owned
Entities regarding the Company’s voting, management, or operations.
Strict Operational and Financial Segregation: The corporate governance and decision-
making mechanisms for investing in the Company are fundamentally separate between ICBC
Investment and ICBC CM. ICBC Investment evaluated and executed its direct investment in the
Company utilizing its proprietary funds through its own internal investment committee. In contrast,
ICBC CM’s investment decisions regarding the Joint Investment V ehicles are governed by a
separate investment committee utilizing capital raised specifically for that joint investment
structure. There is no cross-conditional approval or operational and management overlap between
their decision-making procedures.
Independent Sourcing of the Cornerstone Investor: The introduction and securing of the
proposed cornerstone investor, Xiamen Advanced Intelligent, was achieved through the personal
business network and independent, arm’s-length negotiations of Dr. Zhao, the Company’s founder
and chairman. ICBC Investment and its subsidiaries had no involvement in introducing, facilitating,
or negotiating with the proposed cornerstone investor’s participation in the Global Offering.
We have applied to the Stock Exchange for, and the Stock Exchange has granted, a waiver
from strict compliance with Rule 10.04 of the Listing Rules and a written consent under paragraph
1C(2) of Appendix F1 to the Listing Rules for the subscription of H Shares by Xiamen Advanced
Intelligent as a cornerstone investor, on the following grounds which are consistent with the
Existing Shareholder Conditions:
(a) the Minority Existing Shareholders are interested in less than 5% of the Company’s
voting rights prior to the completion of the Global Offering;
(b) each of the Minority Existing Shareholders and its close associates are not, and will not
be, core connected persons (as defined under the Listing Rules) of the Company or any
close associate (as defined under the Listing Rules) of any such core connected person
immediately prior to or following the Global Offering;
(c) each of the Minority Existing Shareholders has no right to appoint Directors (which, for
the avoidance of doubt, does not include the director nomination right of a Shareholder
under the Articles of Association) and does not have other special rights upon the
Listing;
W AIVERS AND EXEMPTION
–7 8–


--- page 89 ---
(d) the allocation to such close associate of Minority Existing Shareholders will not affect
the Company’s ability to satisfy the public float requirement of Rule 8.08 (as amended
by 19A.13A(1)) of the Listing Rules;
(e) the relevant information in respect of the allocation to each of the Minority Existing
Shareholders and/or its close associates will be disclosed in this Prospectus and the
allotment results announcement;
(f) the Sole Sponsor confirms to the Stock Exchange in writing that based on (i) their
discussions with the Company and the Overall Coordinators; and (ii) the confirmations
provided to the Stock Exchange by the Company and the Overall Coordinators
(confirmations (g) and (h) mentioned below), and to the best of their knowledge and
belief, it has no reason to believe that any of the Minority Existing Shareholders or its
close associates received any preferential treatment in the allocation as a cornerstone
investor by virtue of its relationship with the 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 for New Listing Applicants, and details of the
allocation will be disclosed in this Prospectus and/or the allotment results
announcement, as the case may be;
(g) the Company confirms to the Stock Exchange in writing that no preferential treatment
has been, nor will be, given to any of the Minority Existing Shareholders or its close
associates by virtue of its relationship with the 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 for New Listing Applicants; and
(h) the Overall Coordinators confirm, to the best of their knowledge and belief, to the Stock
Exchange in writing that no preferential treatment has been, nor will be, given to any of
the Minority Existing Shareholders or its close associates by virtue of its relationship
with the 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 for
New Listing Applicants, and details of the allocation will be disclosed in this Prospectus
and/or the allotment results announcement, as the case may be.
For further information about the cornerstone investment of the close associate of the Minority
Existing Shareholders, please refer to the section headed “Cornerstone Investor” in this Prospectus.
W AIVERS AND EXEMPTION
–7 9–


--- page 90 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This Prospectus, for which our Directors (including any proposed Director who is named as
such in this Prospectus) collectively and individually accept full responsibility, includes particulars
given in compliance with the Listing Rules, the Companies (Winding Up and Miscellaneous
Provisions) Ordinance and the Securities and Futures (Stock Market Listing) Rules (Chapter 571V
of the Laws of Hong Kong) for the purpose of giving information to the public with regard to our
Group. Our Directors, having made all reasonable inquiries, confirm that to the best of their
knowledge and belief, the information contained in this Prospectus is accurate and complete in all
material respects and not misleading or deceptive, and there are no other matters the omission of
which would make any statement herein or this Prospectus misleading.
CSRC FILING
The CSRC has issued the filing notice on January 30, 2026 confirming our completion of the
PRC filing procedures pursuant to the new filing regime introduced by the Overseas Listing Trial
Measures for the Global Offering, the conversion of certain Unlisted Shares into H Shares and the
application for listing of the H Shares on the Hong Kong Stock Exchange.
INFORMATION ON THE GLOBAL OFFERING
This Prospectus is published solely in connection with the Hong Kong Public Offering. For
applications under the Hong Kong Public Offering, this Prospectus contains the terms and
conditions of the Hong Kong Public Offering. The Global Offering comprises the Hong Kong
Public Offering of initially 2,149,250 H Shares and the International Offering of initially
19,342,800 H Shares (subject, in each case, to reallocation on the basis as set out in the section
headed “Structure of the Global Offering” in this Prospectus).
The listing of the Offer Shares on the Hong Kong Stock Exchange is sponsored by the Sole
Sponsor. Pursuant to the Hong Kong Underwriting Agreement, the Hong Kong Public Offering is
underwritten by the Hong Kong Underwriters on a conditional basis, with one of the conditions
being that the Offer Price is agreed between the Sponsor-Overall Coordinator (for itself and on
behalf of the Hong Kong Underwriters) and us. The International Offering is managed by the
Sponsor-Overall Coordinator and is underwritten by the International Underwriters. For details of
the Underwriters and the underwriting arrangements, see the section headed “Underwriting” in this
Prospectus.
The Hong Kong Offer Shares are offered solely on the basis of the information contained and
representations made in this Prospectus and on the terms and subject to the conditions set out
herein. 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 our or their affiliates or 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 in our affairs since the date
of this Prospectus or that the information in this Prospectus is correct as of any subsequent time.
For details of the structure of the Global Offering, including its conditions, see “Structure of
the Global Offering” in this Prospectus.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–8 0–


--- page 91 ---
INFORMATION ON THE CONVERSION OF UNLISTED SHARES INTO H SHARES
Our Company has applied for the conversion of an aggregate of 97,431,581 Unlisted Shares
held by the existing Shareholders into H Shares. For details, see the sections headed “History,
Development and Corporate Structure” and “Share Capital” in this Prospectus. Such H Shares to be
converted from Unlisted Shares are restricted from trading for a period of one year after the Listing.
The relevant filing procedure in relation to the conversion of Unlisted Shares into H Shares
has been completed on January 30, 2026.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for the Hong Kong Offer Shares are set out in the section headed
“How to Apply for Hong Kong Offer Shares” in this Prospectus.
RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES
Each person acquiring the H Shares under the Hong Kong Public Offering will be required to,
or be deemed by his/her acquisition of the 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 H Shares outside Hong Kong or
the distribution of this Prospectus in any jurisdiction other than Hong Kong. Accordingly, and
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 or sold, and will not be offered or sold, directly
or indirectly, in the PRC.
UNDERWRITING
The Listing is sponsored by the Sole Sponsor and the Global Offering is managed by the
Sponsor-Overall Coordinator. The Hong Kong Public Offering is fully underwritten by the Hong
Kong Underwriters subject to the terms and conditions of the Hong Kong Underwriting Agreement.
The International Offering is expected to be fully underwritten by the International Underwriters.
For further details on the Underwriters and the underwriting arrangements, please refer to the
section headed “Underwriting” in this Prospectus.
APPLICATION FOR LISTING OF THE H SHARES ON THE STOCK EXCHANGE
We have applied to the Stock Exchange for the listing of, and permission to deal in, our H
Shares to be issued pursuant to the Global Offering and the H Shares to be converted from Unlisted
Shares. Dealings in the H Shares on the Stock Exchange are expected to commence on Monday,
March 30, 2026. Except as otherwise disclosed in this Prospectus, no part of our Shares is listed on
or dealt in on any other stock exchange, and no such listing or permission to list is being or
proposed to be sought in the near future.
The H Shares will be traded in board lots of 50 H Shares. The stock code of the H Shares is
2726.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–8 1–


--- page 92 ---
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any application will be invalid if the listing of, and
permission to deal in, the H Shares on the Stock Exchange is refused before the expiration of three
weeks from the date of the closing of the application lists, or such longer period (not exceeding six
weeks) as may, within the said three weeks, be notified to our Company by or on behalf of the Stock
Exchange.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of listing of, and permission to deal in, the H Shares on the Stock
Exchange and our compliance with the stock admission requirements of HKSCC, the H Shares will
be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with
effect from the Listing Date or any other date as determined by HKSCC. Settlement of transactions
between participants of the Stock Exchange is required to take place in CCASS on the second
settlement day after any trading day. All activities under CCASS are subject to the General Rules
of HKSCC and the HKSCC Operational Procedures in effect from time to time. All necessary
arrangements have been made for the H Shares to be admitted in to CCASS. Investors should seek
the advice of their stockbrokers or other professional advisers for the details of the settlement
arrangements as such arrangements may affect their rights and interests.
REGISTER OF MEMBERS AND STAMP DUTY
All H Shares issued pursuant to applications made in the Global Offering and converted from
Unlisted Shares will be registered on our H Share register to be maintained in Hong Kong by our
H Share Registrar, Computershare Hong Kong Investor Services Limited. Our principal register of
members will be maintained by us at our headquarters in the PRC.
Dealings in the H Shares registered in our H Share register will be subject to Hong Kong
stamp duty. Hong Kong stamp duty is charged to each of the seller and purchaser at the ad valorem
rate of 0.1% on the higher of the consideration for or the market value of the H Shares transferred.
In other words, a total of 0.2% will be payable on a typical sale and purchase transaction of the H
Shares. In addition, a fixed stamp duty of HK$5.00 is currently payable on each instrument of
transfer of H Shares.
REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
We have instructed our H Share Registrar, and our H Share Registrar has agreed, not to
register the subscription, purchase or transfer of any H Shares in the name of any particular holder
unless and until such holder delivers a signed form to our H Share Registrar in respect of those H
Shares bearing statements to the effect that the holder:
 agrees with us and each of our Shareholders, and we agree with each Shareholder, to
observe and comply with the PRC Company Law, the Overseas Listing Trial Measures
and our Articles of Association;
 agrees with us, each of our Shareholders, Directors, Supervisors, managers and officers,
and we, acting for ourselves and for each of our Directors, Supervisors, managers and
officers agree with each of our Shareholders, to refer all differences and claims arising
from our Articles of Association or any rights or obligations conferred or imposed by the
PRC Company Law or other relevant laws and administrative regulations concerning our
affairs to arbitration, and any reference to arbitration shall be deemed to authorize the
arbitration tribunal to conduct hearings in open session and to publish its award, which
arbitration shall be final and conclusive;
 agrees with us and each of our Shareholders that the H Shares are freely transferable by
the holders thereof; and
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–8 2–


--- page 93 ---
 authorizes us to enter into a contract on his or her behalf with each of our Directors,
Supervisors, managers and officers whereby such Directors, Supervisors, managers and
officers undertake to observe and comply with their obligations to our Shareholders as
stipulated in our Articles of Association. Persons applying for or purchasing H Shares
under the Global Offering are deemed, by their making an application or purchase, to
have represented that they are not associates of any of our Directors, Supervisors or
existing Shareholder or a nominee of any of the foregoing.
DIVIDENDS PAYABLE TO HOLDERS OF H SHARES
Unless determined otherwise by our Company, dividends payable in Hong Kong dollars in
respect of our H Shares will be paid to the Shareholders as recorded on the H Share register of our
Company in Hong Kong and sent by ordinary post, at the Shareholders’ risk, to the registered
address of each Shareholder.
PROFESSIONAL TAX ADVICE RECOMMENDED
Y ou should consult your professional advisers if you are in any doubt as to the taxation
implications of subscribing for, purchasing, holding, disposal of, or dealing in, or the exercise of
any rights in relation to, our H Shares. None of 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 our or their
affiliates or any of their respective directors, officers, employees, advisers, agents or
representatives, or any other persons or parties involved in the Global Offering accepts
responsibility for any tax effects on, or liabilities of, any person resulting from the subscription,
purchase, holding, disposal of, or dealing in, or the exercise of any rights in relation to, our H
Shares.
LANGUAGE
If there is any inconsistency between the English version of this Prospectus and its Chinese
translation, the English version of this Prospectus shall prevail unless otherwise stated. For ease of
reference, the names of the Chinese laws and regulations, government authorities, institutions,
natural persons or other entities (including certain of our subsidiaries) have been included in this
Prospectus in both the Chinese and English languages. In the event of any inconsistency, the
Chinese version shall prevail.
ROUNDING
Certain amounts and percentage figures included in this Prospectus have been subject to
rounding adjustments, or have been rounded to one or two decimal places. Accordingly, figures
shown as totals in certain tables may not be an arithmetic aggregation of the figure preceding them.
Any discrepancies in any table, chart or elsewhere between totals and sums of amounts listed
therein are due to rounding.
CURRENCY TRANSLATION
Solely for your convenience, this Prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars at specified rates.
Unless otherwise specified, the translation of Renminbi into Hong Kong dollars, of Renminbi
into U.S. dollars and of Hong Kong dollars into U.S. dollars, and vice versa, in this Prospectus was
made at the following rates:
RMB1.00 to HK$1.1338
US$1.00 to RMB6.8982
US$1.00 to HK$7.8212
No representation is made that any amounts in Renminbi, Hong Kong dollars or U.S. dollars
can be or could have been at the relevant dates converted at the above rates or any other rates or
at all.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–8 3–


--- page 94 ---
DIRECTORS
Name Address Nationality
Executive Directors
Dr. Zhao Jianhui (ሾ) Room 508
No. 198-1, East 2nd Road
Tongxiang High-tech City
Torch Hi-tech Zone
Xiamen, Fujian
PRC
American
Ms. Pan Menghan ( ᆙྫྷ⊦) Room 508
No. 198-1, East 2nd Road
Tongxiang High-tech City
Torch Hi-tech Zone
Xiamen, Fujian
PRC
American
Ms. Bai Liting ( ͣᘆణ) Room 503, No. 12, Huxin Erli
V anke Huxin Island
Huli District
Xiamen, Fujian
PRC
Chinese
Non-Executive Directors
Mr. Fang Wei ( ˙ਃ) Room 1301, No. 1, Lane 2088
Wanhangdu Road
Changning District
Shanghai
PRC
Chinese
Mr. Su Ping ( ᘽ̻) Room 202
No. 62, Baizanzhou Road
Siming District
Xiamen, Fujian
PRC
Chinese
Ms. Xie Jieping ( ᑽᆎ̻) Room 1103
No. 11 Huizhan North Lane
Siming District
Xiamen, Fujian
PRC
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 4–


--- page 95 ---
Independent Non-Executive Directors
Dr. Kang Junyong (ۇڲRoom 601
No. 3-2, Tuqiang Road
Siming District
Xiamen, Fujian
PRC
Chinese
Dr. Liao Yi ( ࿋අ) Flat F, 7/F
Tower 5, Metro Town
8 King Ling Road
Tseung Kwan O
New Territories
Hong Kong
Chinese
Dr. Su Xinlong ( ᘽอᎲ) Room 101, No. 25
Xiada Haibin East Area
Siming District
Xiamen, Fujian
PRC
Chinese
SUPERVISORS
Name Address Nationality
Mr. Li Kaixi ( ҽ௱Ҏ) Room 1601, 3B
Jindi Fengshang
Xindian Town
Xiang’an District
Xiamen, Fujian
PRC
Chinese
Mr. Qian Weining ( ፺ሊྐྵ) Room 1804, No. 2
Xiangfu Qili
Xiang’an District
Xiamen, Fujian
PRC
Chinese
Mr. Wu Guoyi ( ю਷χ) Room 16G, No. 38
Caoxi North Road
Xuhui District
Shanghai
PRC
Chinese
For further details on our Directors and Supervisors, see the section headed “Directors,
Supervisors and Senior Management” in this Prospectus.
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 5–


--- page 96 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Sole Sponsor, Sponsor-Overall Coordinator,
Overall Coordinator, Joint Global
Coordinator, Joint Bookrunner,
Joint Lead Manager and
Capital Market Intermediary
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Overall Coordinators, Joint Global
Coordinators, Joint Bookrunners,
Joint Lead Managers and
Capital Market Intermediaries
ICBC International Securities Limited
37/F, ICBC Tower
3 Garden Road
Hong Kong
Orient Securities (Hong Kong) Limited
28th and 29th Floor
100 Queen’s Road Central
Hong Kong
Joint Global Coordinator, Joint Bookrunner
and Capital Market Intermediary
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Joint Lead Manager and Capital Market
Intermediary
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Joint Global Coordinators, Joint
Bookrunners, Joint Lead Managers and
Capital Market Intermediaries
China Sunrise Securities (International)
Limited
Room 1501 & 1503, YF Life Centre
38 Gloucester Road
Wan Chai
Hong Kong
Futu Securities International (Hong Kong)
Limited
Unit C1-2, 34/F, United Centre
95 Queensway
Admiralty
Hong Kong
CCB International Capital Limited
12/F, CCB Tower, 3 Connaught Road Central
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 6–


--- page 97 ---
Joint Bookrunners, Joint Lead Managers
and Capital Market Intermediaries
Daokou Securities Limited
Suite 1406, 14/F, Great Eagle Centre
23 Harbour Road
Wanchai
Hong Kong
China Industrial Securities International
Capital Limited
32/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong
Fuze Securities (International) Limited
Room 1004, 10/F, OfficePlus@Sheung Wan
No. 93-103 Wing Lok Street
Sheung Wan
Hong Kong
Kingston Securities Limited
72/F, The Center, 99 Queen’s Road Central
Central
Hong Kong
Yuen Meta (International) Securities
Limited
2601, 26/F, Wanchai Central Building
89 Lockhart Road
Wanchai
Hong Kong
Legal Advisers to our Company As to Hong Kong and U.S. laws
Davis Polk & Wardwell
10/F, The Hong Kong Club Building
3A Chater Road
Central
Hong Kong
As to PRC laws
Jingtian & Gongcheng
34/F, Tower 3
China Central Place
77 Jianguo Road
Beijing
PRC
As to U.S. export control and sanctions laws
Pillsbury Winthrop Shaw Pittman LLP
1200 Seventeenth Street, NW
Washington, DC 20036
United States
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 7–


--- page 98 ---
Legal Advisers to the Sole Sponsor
and the Underwriters
As to Hong Kong and U.S. laws
Latham & Watkins LLP
18th Floor, One Exchange Square
8 Connaught Road, Central
Hong Kong
As to PRC laws
DeHeng Law Offices
12th Floor, Tower B
Focus Place No. 19
Finance Street
Beijing
PRC
Reporting Accountants and Auditor BDO Limited
Certified Public Accountants
6th Floor
61 East Nanjing Road
New Huangpu Financial Tower
Shanghai
PRC
25th Floor, Wing On Centre
111 Connaught Road, Central
Hong Kong
Industry Consultant China Insights Industry Consultancy
Limited
10/F, Block B, Jing’an International Center
No. 88 Puji Road, Jing’an District
Shanghai
PRC
Compliance Adviser Rainbow Capital (HK) Limited
Office No. 710, 7/F
Wing On House
71 Des V oeux Road Central
Hong Kong
Receiving Bank Industrial and Commercial Bank of China
(Asia) Limited
33/F, ICBC Tower
3 Garden Road
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 8–


--- page 99 ---
Registered Office, Headquarters and
Principal Place of Business in the PRC
No. 198-1, East 2nd Road
Tongxiang High-tech City
Torch Hi-tech Zone
Xiamen, Fujian
PRC
Principal Place of Business in Hong Kong Room 1915, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Company’s Website http://www.epiworld.com.cn/
(information contained on this website does
not form part of this Prospectus)
Company Secretary Ms. Wong Wai Y ee, Ella
(Chartered Secretary, Chartered
Governance Professional and fellow of both
The Hong Kong Chartered Governance
Institute and The Chartered Governance
Institute in the United Kingdom)
Room 1915, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Authorized Representatives Dr. Zhao Jianhui (ሾ)
Room 508
No. 198-1, East 2nd Road
Tongxiang High-tech City
Torch Hi-tech Zone
Xiamen, Fujian
PRC
Ms. Wong Wai Y ee, Ella
Room 1915, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Audit Committee Dr. Su Xinlong ( ᘽอᎲ) (Chairman)
Dr. Liao Yi ( ࿋අ)
Mr. Su Ping ( ᘽ̻)
Nomination Committee Dr. Liao Yi ( ࿋අ) (Chairman)
Dr. Kang Junyong (ۇڲ)
Ms. Pan Menghan ( ᆙྫྷ⊦)
CORPORATE INFORMATION
–8 9–


--- page 100 ---
Remuneration Committee Dr. Kang Junyong (ۇڲ)Chairman)
Dr. Liao Yi ( ࿋අ)
Dr. Su Xinlong ( ᘽอᎲ)
Strategy Committee Dr. Zhao Jianhui (ሾ) (Chairman)
Dr. Kang Junyong (ۇڲ)
Dr. Su Xinlong ( ᘽอᎲ)
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 Industrial and Commercial Bank of China
Limited, Xiamen Siming Branch
No. 270, Lujiang Road
Siming District
Xiamen, Fujian
PRC
CORPORATE INFORMATION
–9 0–


--- page 101 ---
The information and statistics set out in this section and other sections of this
Prospectus were extracted from the report prepared by CIC, which was commissioned by us,
and from various official government publications and other publicly available publications.
We engaged CIC to prepare the CIC Report, an independent industry report, in connection
with the Global Offering. The information from official government sources has not been
independently verified by us or any other parties involved in the Global Offering, or any of
our or their respective directors, senior management, representatives, advisers or any other
persons involved in the Global Offering, and no representation is given as to its accuracy.
INDUSTRY OVERVIEW OF GLOBAL POWER SEMICONDUCTOR DEVICES AND SIC
POWER SEMICONDUCTOR DEVICES
Overview of SiC Power Semiconductors
Power semiconductors, also known as power electronic devices, are essential components in
electronic systems for electrical energy conversion and circuit control. They enable precise voltage
and frequency modulation, as well as efficient conversion between AC and DC power. By regulating
energy flow and ensuring system stability through inversion, conversion, power amplification,
power switching, and circuit protection, these devices serve as the “heart” of power electronics.
Based on materials used, power semiconductors are categorized into two primary types, the
traditional silicon semiconductors and the wide-bandgap semiconductors. The former includes
semiconductors formed by elements such as silicon (Si), while the latter consists of compounds like
silicon carbide (SiC) and gallium nitride (GaN).
Traditional silicon semiconductor devices face inherent physical limitations that prevent them
from meeting the high-performance requirements of emerging applications such as AI computing
power and data centers, smart grids, and energy storage systems. In contrast, wide-bandgap
semiconductors, represented by SiC and GaN, exhibit significant performance advantages from the
material to the device level. SiC power semiconductor devices stand out with strong performance
characteristics, including superior breakdown voltage, thermal conductivity, electron saturation
velocity, and radiation resistance. Compared to GaN, SiC offers greater versatility in medium- and
high-voltage applications, dominating the market for applications above 600V and boasting a larger
market size. In recent years, SiC power semiconductor devices have become widely adopted in
various industries and are expected to play a pivotal role in the ongoing transformation of the power
semiconductor industry.
Comparative Analysis of Major Semiconductor Materials
Thermal Conductivity (W/cm/g120℃)
Si GaAs SiC GaN
High Thermal
Resistance
High Voltage
Resistance
High Radiation
Resistance
High Switching
Performance
Melting Point
(103 ℃)
High Temperature
Operation
Electric Breakdown Field
(MV/cm)
Electron Saturation Velocity
(107 cm/s)
Bandgap
(eV)
INDUSTRY OVERVIEW
–9 1–


--- page 102 ---
Application Scenarios of SiC Power Semiconductors
3.3V~36V
100kW
10MW
10W
1MW
80V 150V 1,200V >10,000V
650V
100W
10kW
1kW
SiC
GaN
Si
SiC/GaN
Voltage Capability (V)
Railway
Transportation
Commercial
PV
800V EV
(OBC, DC-DC)
Charging
Infrastructure
400V EV
(OBC, DC-DC)
AI Computing Power
& Data Centers
eVTOL
ESS
Electric
Vessels
Smart
Grid
Wind
Industrial Motor
Drive
Industrial Power
Supply
Residential
PV
Low-Voltage: DC-DC
Converters, Smartphone,
PMICs, Point-of-load
Switching Power (W)
Source: CIC
Silicon (Si) dominates low-voltage applications like DC-DC converters, smartphones, PMICs,
and point-of-load systems due to its cost-effectiveness and reliability. It efficiently manages power
conversion in consumer electronics and mobile devices. Gallium Nitride (GaN), with its high
electron mobility, is increasingly used in AI computing, data centers, and 400V EVs, offering
enhanced efficiency and performance in high-frequency, power-conversion applications. Silicon
Carbide (SiC) is key to high-power, high-efficiency applications such as 800V EVs, industrial
power supplies, charging infrastructure, industrial motor drives, and electric vessels. SiC’s superior
thermal and electrical properties also make it ideal for smart grids, which require high voltage
handling and high switching power to manage complex energy flows, integrate renewable sources,
and improve grid resilience. Its usage extends to sectors like railway transportation, wind energy,
commercial PV , eVTOL, ESS, and more, where high voltage and thermal stability are critical.
Production Process of SiC Power Semiconductor Devices
SiC is currently the most mature wide-bandgap semiconductor material in terms of crystal
growth technology and device manufacturing.
The production process of SiC power semiconductor devices involves the following steps. SiC
powder undergoes crystal growth, cutting, grinding, and wafer polishing to produce SiC substrates,
on which single-crystal epitaxial materials are subsequently grown. The wafers undergo a series of
complex processes, including lithography, cleaning, etching, deposition, thinning, packaging, and
testing, to eventually form SiC power semiconductor devices.
Production Process from SiC Raw Materials to SiC Power Semiconductor Devices
Single crystal
growth
SiC Powder SiC Boule SiC
Substrate
Dies-on-
WaferBare-die
SiC Epitaxial
Wafer
SiC Power
Semiconductor Device
Packaging and
testing
Lithography, cleaning,
etching, deposition...Thinning...
Cutting, grinding,
polishing
Epitaxial
growth
Source: CIC
INDUSTRY OVERVIEW
–9 2–


--- page 103 ---
Industry Chain of SiC Power Semiconductor Device Industry
The upstream segment of the industry chain involves the preparation of SiC substrates and SiC
epitaxial wafers. As the key material in the industry chain, the quality of SiC epitaxial wafers is
crucial, and the value of the epitaxial layer manufacturing accounts for about 25% of the entire
value chain of SiC power devices. Unlike traditional silicon power semiconductor devices, SiC
power semiconductor devices cannot be directly fabricated on SiC substrates; instead, they require
the deposition of high-quality epitaxial layers on the substrates. Due to the high technical barriers
in producing high-quality SiC epitaxial wafers, their supply is relatively limited. With global
demand for SiC power semiconductor devices continues to grow, high-quality epitaxial wafers will
play an increasingly important role in the industry chain.
The midstream segment consists of SiC power semiconductor devices’ design, manufacturing,
packaging, and testing. SiC power semiconductor device manufacturers use SiC epitaxial wafers as
the base material to fabricate SiC semiconductor devices through a complex manufacturing process.
Device manufacturers are generally divided into three types: IDM, fabless, and foundry. IDM
integrates the design, manufacturing, packaging and testing of SiC power semiconductors and other
industrial chains. Fabless is only responsible for the design and sales of SiC power semiconductors,
while foundry is only responsible for manufacturing, packaging and testing.
The downstream segment involves applications such as EVs, charging infrastructure,
renewable energy, ESS, as well as emerging industries such as home appliances, AI computing
power and data centers, smart grids, eVTOL.
Industry Chain of SiC Power Semiconductor Device Industry
Upstream Midstream Downstream
SiC Raw Materials ApplicationsSiC Power Semiconductor Devices
Substrate Provider
Epitaxial Wafer
Provider
Design Manufacturing Packaging &
Testing
Device manufacturers can choose to procure substrates
and conduct in-house epitaxy processes or to acquire
pre-fabricated epitaxial wafers from external suppliers.
Device Manufacturers
Electric Vehicles (EVs)
Charging Infrastructure
Renewable Energy
Energy Storage Systems (ESS)
Emerging Industries(1)
Others(2)
SiC substrate
SiC epitaxial
wafer
SiC substrate
Source: CIC
Notes:
(1) Emerging industries include home appliances, AI computing power and data centers, smart grids and eVTOL.
(2) Others include industrial power supply, UPS, railway transportation, etc.
Impact of Tariffs on the SiC Power Semiconductor Device Industry
As of the Latest Practicable Date, many semiconductor products from China are subject to, at
a minimum, a 80% tariff rate, inclusive of a 50% tariff under Section 301 of the Trade Act of 1974
(the “ Section 301 Tariff ”), a 20% Fentanyl-related tariff under the International Economic
Emergency Powers Act (“ IEEPA”), which was lowered to 10% as of November 1, 2025, and a 10%
reciprocal tariff, also imposed pursuant to IEEPA. Both IEEPA-based tariffs were ruled unlawful as
of February 20, 2026. For a detailed discussion of tariffs applicable to us and the related risks, see
“Risk Factors — Risks Relating to Our Business and Industry — Our business, financial condition
and results of operations may be materially and adversely affected by geopolitical tensions,
international trade policies, international export controls and economic sanctions” and “Regulatory
Overview — Latest Outlook on U.S. Tariff.” Nonetheless, even if the U.S. tariff on Chinese exports
to the U.S. normalizes, Chinese power device manufacturers are well-positioned for global growth.
Chinese power device manufacturers are closing the technology gap through continuous R&D
INDUSTRY OVERVIEW
–9 3–


--- page 104 ---
investments, and obtain increasing market share in the global SiC power semiconductor device
industry in recent years, gradually forming a self-sufficient supply pattern in the future. The
continuously expanding market share of Chinese power device manufacturers within the global SiC
power semiconductor device industry is fundamentally underpinned by the comprehensive
competitive advantage built upon performance parity, synergistic ecosystem, inherent cost
advantages, and high customer stickiness. Chinese SiC power device companies have, through
multiple technological iterations, achieved international mainstream performance standards.
Building on this, a synergistic promotional framework has been established in China among device
manufacturers, end-user applications, and government policy. Device manufacturers deliver
cost-effective products, while end-users in sectors such as NEVs actively conduct domestic
adaptation and validation. This is further accelerated by government support through policy
guidance and resource allocation, significantly speeding up the adoption of domestic SiC power
chip applications. Enhanced synergies across all segments of the industry effectively amortize costs
across the entire chain, from upstream substrate preparation to midstream device manufacturing and
downstream packaging and testing, including production, logistics, and supporting services,
offering lower prices for equivalent performance in the global market and enabling the cultivation
of customer stickiness.
Market Size of Global SiC Power Semiconductor Device Industry
The global SiC power semiconductor device market has grown remarkably from 2020 to 2024,
with sales value increasing from US$0.6 billion in 2020 to US$2.6 billion in 2024 at a CAGR of
45.4%. By 2029, the global sales value of the SiC power semiconductor device industry is projected
to reach US$13.6 billion, with a CAGR of 39.9% from 2024 to 2029. The penetration rate of global
SiC power semiconductor devices out of the global power semiconductor market increased from
1.3% in 2020 to 4.9% in 2024, and is expected to reach 17.1% by 2029.
SiC power semiconductor devices are widely used in EVs, charging infrastructure, renewable
energy, ESS and emerging industries. The EVs sector represents the most extensive application
within this group. In 2024, SiC power semiconductor devices used in EVs accounted for 74.4% of
the global market. The charging infrastructure sector followed, with a market share of 7.8% in 2024.
The renewable energy and ESS sectors also show growth momentum, with expected CAGRs of
28.7% and 44.1% between 2024 and 2029, respectively. Emerging industries are expected to grow
SiC power semiconductor device value at a CAGR of 56.4% from 2024 to 2029.
Market Size of Global SiC Power Semiconductor Device Industry,
in Terms of Sales Value, by Application Area, 2020-2029E
CAGR
2020-2024
USD Billion
2024-2029E
EV 54.4%
65.8%
34.9%
64.3%
30.9%
1.9%
39.6%
Charging Infrastructure
Renewable Energy
ESS
Emerging Industries*
Others**
Total 45.4% 39.9%
44.1%
28.7%
44.1%
56.4%
28.8%
*Note: Emerging Industries include home appliances, AI computing power and
 data centers, smart grids, and eVTOL.
**Note: Others include, industrial power supply, UPS, railway transportation, etc.
0
2
4
6
8
10
12
14
Penetration rate of
SiC out of global power
semiconductors
0.6
2020
1.51.0
2.4 2.6 2.9
3.8
6.0
10.3
13.6
1.10.1
0.1
0.0
0.1
0.1
0.0
0.1
0.1
0.1
0.0
0.1
0.1
0.0
0.1
0.1
0.2
0.1
0.1
0.2
0.1
0.0
0.1
0.0
0.0
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
1.3% 2.1% 3.1% 4.7% 4.9% 5.2% 6.4% 9.4% 14.6% 17.1%
0.1
0.1 0.20.2
1.7 1.9 2.1
2.8
4.4
7.6
10.0
0.20.2 0.20.2 0.20.2 0.30.3
0.30.3
0.50.5 0.20.2 0.70.7
0.90.9 0.60.6
1.01.0
0.30.3
1.21.2
0.30.3 0.70.7 0.20.2 0.20.2 0.20.2 0.30.3
0.50.5
0.10.10.10.1 0.10.1 0.30.3 0.40.4 0.40.4
Source: MarkLines, CAAM, CCP A, CPIA, BNEF , InfoLink, Omdia, Yole, CIC
INDUSTRY OVERVIEW
–9 4–


--- page 105 ---
Market Drivers of Global SiC Power Semiconductor Device Industry
Driven by the rapid development of downstream applications and the continuous pursuit of
higher performance and energy-efficient power devices, the penetration rate of global SiC power
semiconductor devices is expected to increase significantly, fueling rapid market growth. The
following are key downstream drivers:
 Application in Electric Vehicles (EVs): With increasing battery capacity, driving
range, declining costs, maturation and convenience of charging infrastructure, and
growing consumer environmental awareness, the penetration rate of EVs is expected to
continue rising. Global EV sales are projected to reach 48.1 million by 2029, with a
CAGR of 21.2% from 2024 to 2029. More specifically, China, as the largest segmented
market, has witnessed a rapid growth of EV market, increasing from 3.3 million to 12.6
million, with a CAGR of 79.8% from 2024 to 2029. The EV penetration rate in China
reached 44.4% in 2024 and is expected to reach 82.0% in 2029, facilitating a continued
growth of SiC power device market. Compared to silicon power semiconductor devices,
SiC power semiconductor devices offer significant advantages, including lower
conduction resistance, smaller chip size, higher operating frequency, and superior
high-temperature tolerance. The upgrade of high-voltage architecture to 800V and above
further accelerates of penetration of SiC power devices. For example, SiC MOSFET and
Si MOSFET of the same specifications show that the former reduces the conduction
resistance to 1/100 of the latter, decreases the size to 1/10, and extends the driving range
of electric vehicles by 5-10%. As a result, they are widely used in key components such
as power converters, main drive inverters, onboard chargers, battery chargers,
bidirectional DC/DC converters (high voltage), and motor drives.
 Application in Charging Infrastructure: With the accelerated advancement of global
charging infrastructure, particularly the widespread adoption and upgrading of fast and
ultra-fast chargers, the penetration rate of SiC power semiconductor devices in the
charging sector is expected to continue rising. As EV electrical systems transition from
400V to 800V architectures, the power level and power density of power modules of
chargers are also increasing to 40kW/50kW and above to meet the demands of
higher-voltage EVs. Compared to traditional silicon power semiconductor devices, SiC
power semiconductor devices can enhance the output power of chargers by nearly 30%
and reduce power losses by approximately 50%. Additionally, the significantly lower
on-resistance of SiC materials ensures that chargers can provide a wider and higher
output voltage range, catering to the charging needs of various EV battery types. With
anticipated cost reductions, the global penetration rate of SiC in the charging
infrastructure sector is projected to reach over 30% by 2029.
 Application in Renewable Energy: SiC power semiconductor devices are used in
photovoltaic system components such as microinverters and DC/DC converters,
significantly improving system performance by enhancing energy conversion efficiency
and reducing energy loss. Global photovoltaic newly installed capacity is expected to
grow at a CAGR of 15.4% from 2024 to 2029. This will drive the sales value of SiC
power semiconductor devices in this sector to grow at a CAGR of 28.7% from 2024 to
2029.
 Application in Energy Storage Systems (ESS): SiC technology has led the
advancement of energy storage converters toward higher capacity and modular designs.
With the rising global demand for ESS from industrial, commercial, and residential
users, energy storage batteries have become one of the most vital components of power
systems. New installed capacity for global electrochemical energy storage is projected
to grow at a CAGR of 33.4% from 2024 to 2029, propelling the expansion of the SiC
power semiconductor device market.
INDUSTRY OVERVIEW
–9 5–


--- page 106 ---
 Application in Emerging Industries: In AI computing power and data centers, SiC
power semiconductor devices have higher energy conversion efficiency than traditional
silicon power semiconductor devices under the same output power conditions, allowing
data center to reduce the number of power modules and lowering operational costs. From
2024 to 2029, the global computing power capacity is expected to grow at a CAGR of
65.0%, and global electricity consumption of data centers is projected to exceed 2,676
TWh by 2029. In smart grids, SiC technology is essential for advancing solid-state
transformers and flexible AC/DC transmission systems, due to its superior thermal
management and electronic properties enhancing grid efficiency and stability. It is
projected that from 2024 to 2029, the sales value of SiC power semiconductor devices
in the smart grid sector will grow at a CAGR of 51.0%. SiC power semiconductor
devices also hold significant potential in home appliances. The high efficiency and
compact size of these devices enable energy savings and improved performance in home
appliances, aligning with global trends toward energy efficiency and sustainability. In
the case of eVTOL, SiC’s high thermal stability and power density support lightweight,
reliable powertrains and extended flight durations.
Market Trends of Global SiC Power Semiconductor Device Industry
 Increasing Penetration in Existing Fields and Expansion into Emerging Applications.
With advancements in manufacturing technology and cost reductions, the global demand for
SiC power semiconductor devices continues to grow, and their application scenario is
expanding rapidly. On one hand, SiC power semiconductor devices are accelerating their
penetration into application scenarios such as EVs, charging infrastructure, renewable energy,
and ESS. In the EVs sector, SiC devices significantly enhance the efficiency of motor drive
systems, extend vehicle mileage range, and reduce charging time. In the renewable energy and
ESS sector, the high energy conversion efficiency of SiC devices reduces system losses and
improves the overall efficiency of photovoltaic power generation and energy storage systems.
On the other hand, as the cost of SiC power semiconductor devices decreases and the
performance improves, SiC power semiconductor devices also hold immense potential in
emerging applications such as home appliances, AI computing power and data centers, smart
grids, and low-altitude economy applications.
 Technological Advancements Broaden the Voltage Range of Applications. SiC power
semiconductor devices have been used in the medium-low voltage (600V to 1,700V) fields
and some low voltage applications, such as home appliances, as well. In the future, with the
improvement of cost-effectiveness and the advancement of SiC material technology, SiC
power semiconductors are expected to realize widespread use in low-voltage applications and
expand to medium-high voltage and ultra-high voltage applications. For example, traditional
power grids are transitioning toward smart grids. Power electronic transformers (PET), as core
components of smart grids, also demand ultra-high voltage and high-power devices.
Competitive Overview of Global Semiconductor Providers
The extensive global market of semiconductors is concentrated, with top 10 providers
obtaining over 70% of the market share. Currently, traditional silicon materials still dominate while
emerging materials such as SiC gradually earning their market presence. As an enterprise focus on
the next-generation materials, we obtained approximately 0.1% of the total semiconductor market
share in 2024, according to CIC.
INDUSTRY OVERVIEW OF GLOBAL SIC EPITAXIAL W AFERS
Definition of SiC Epitaxial Wafers
SiC epitaxial wafers are single-crystal SiC thin films grown on the substrate surface, with
their doping type, doping concentration, and thickness can be precisely controlled to meet the
design requirements of the devices.
INDUSTRY OVERVIEW
–9 6–


--- page 107 ---
Since single-crystal substrates prepared by the sublimation method cannot achieve precise
control over doping concentration and effectively reduce crystal defects, it is necessary to grow a
high-quality epitaxial layer on the substrate for device fabrication. Therefore, epitaxial growth
technology is essential in the production of SiC devices, and the quality of the epitaxial layer
drastically impacts device performance.
Business Model for SiC Epitaxial Wafer Manufacturers
Depending on whether SiC epitaxial wafer manufacturers procure substrate materials
themselves or not, their business model can be divided into two types:
 Turnkey: SiC epitaxial wafer manufacturers purchase substrates based on customer
order requirements, create the product, and deliver epitaxial wafer products. The price
and payment settlement are determined based on the full cost, including substrates and
other raw materials.
 Consign: The customer provides the substrate materials, while the SiC epitaxial wafer
manufacturers procure other auxiliary materials. After completing production and
delivering the products, the manufacturers charge the customer for epitaxial wafer
foundry services.
Market Size of Global SiC Epitaxial Wafer Industry
The sales value of the global SiC epitaxial wafer market has grown from US$0.4 billion in
2020 to US$1.2 billion in 2024, with a CAGR of 34.7%. By 2029, the market size is expected to
reach US$5.8 billion, with a CAGR of 38.2% from 2024 to 2029.
EVs are the largest application area for SiC epitaxial wafers. By 2029, the global sales value
of SiC epitaxial wafers used in EVs is projected to reach US$3.9 billion, with a CAGR of 37.9%
from 2024 to 2029. Charging infrastructure is expected to grow at a CAGR of 43.4% from 2024 to
2029 in terms of SiC power semiconductor device sales value. The renewable energy and ESS
sectors also show strong momentum, with CAGRs in the forecasted period reaching 33.7% and
43.1%, respectively. Emerging industries have high growth potential, and global sales value from
SiC epitaxial wafers for them is expected to grow at a CAGR of 54.5%.
Market Size of Global SiC Epitaxial Wafer Industry
(1),
in Terms of Sales Value, by Application Area, 2020-2029E
CAGR
2020-2024
USD Billion
2024-2029E
EV 35.9%
56.2%
40.9%
49.4%
26.6%
7.1%
37.9%
Charging Infrastructure
Renewable Energy
ESS
Emerging Industries*
Others**
Total 34.7% 38.2%
43.4%
33.7%
43.1%
54.5%
10.6%
*Note: Emerging Industries include home appliances, AI computing power and data centers,
 smart grids, and eVTOL.
**Note: Others include, industrial power supply, UPS, railway transportation, etc.
0
2
4
6
2020
0.4
0.8
0.5
1.1 1.2 1.3
1.6
2.6
4.4
5.8
0.5
0.02
0.01
0.03
0.03
0.03
0.01
0.07
0.1
0.04
0.02
0.1
0.05
0.02
0.1
0.06
0.03
0.1 0.1
0.1
0.03
0.00
0.02
0.03
0.02
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
0.10.1 0.10.1
0.8 0.8 0.9
1.1
1.8
3.0
3.9
0.10.1 0.10.1 0.10.1 0.20.2
0.20.2
0.30.3
0.10.1
0.30.3
0.60.6 0.40.4
0.10.1
0.40.4
0.80.8
0.10.1
0.30.3
0.10.10.00.0 0.10.1 0.10.1 0.1 0.1 0.1 0.1
0.20.2 0.40.4 0.10.1 0.10.1 0.20.2
INDUSTRY OVERVIEW
–9 7–


--- page 108 ---
Source: MarkLines, CAAM, CCP A, CPIA, BNEF , InfoLink, Omdia, Yole, CIC
Note:
(1) The market size accounts for epitaxial wafers traded in both open market and captive market. Captive market refers
to device manufacturers with epitaxial wafer production capabilities manufacturing epitaxial wafers for internal use.
The global SiC epitaxial wafer market has seen significant changes, especially in the sales
value generated by 6-inch epitaxial wafers. From 2020 to 2024, the sales value generated by 6-inch
epitaxial wafers has increased from US$0.3 billion to US$0.8 billion, with a CAGR of 29.5%. It is
expected to further increase to US$1.3 billion by 2029, with a CAGR of 9.4% from 2024 to 2029.
Conversely, the sales value generated by 4-inch epitaxial wafers has experienced a decline with the
popularity of 6-inch epitaxial wafers, decreasing from US$49.6 million in 2020 to US$20.0 million
in 2024 and further to an expected US$7.2 million by 2029.
With the maturation of technology and continuous cost reductions, the penetration rate of
8-inch SiC epitaxial wafer will increase substantially. By 2029, the sales value generated by 8-inch
epitaxial wafers is expected to reach US$4.5 billion, with a CAGR of 71.9% from 2024 to 2029.
Market Size of Global SiC Epitaxial Wafer Industry
(1),
in Terms of Sales Value, by Wafer Size, 2020-2029E
CAGR
2020-2024
USD Billion
2024-2029E
4-inch -20.3%
29.5%
186.3%
-18.4%
6-inch
8-inch
Total
9.4%
71.9%
34.7% 38.2%
2020
1.3%
14.1%0.4
2021 2022 2023 2024 2025E 2026E 2027E 2028E
2029E
0
2
4
6
84.6%84.6%
84.8%85.1%
85.0% 72.3% 58.1%
40.8%
47.2%
39.4%
29.1%
22.5%
77.4%
70.7%
60.2%
52.1%3.3%
11.6%0.5 0.8
1.1 1.2 1.3
1.6
2.6
4.4
5.8
7.1%
8.1%
11.1%
3.9% 1.7%
26.0%
1.1%
0.7%
0.4%
0.2%
0.1%
Source: Omdia, Yole, CIC
Note:
(1) The market size accounts for epitaxial wafers traded in both open market and captive market. Captive market refers
to device manufacturers with epitaxial wafer production capabilities manufacturing epitaxial wafers for internal use.
From 2020 to 2024, the sales volume of global SiC epitaxial wafers has increased from 241.9
thousand pieces to 989.9 thousand pieces. Driven by technological advancements and efficiency
benefits, the sales volume of global SiC epitaxial wafers is expected to further increase to 5,959.4
thousand pieces by 2029.
The sales volume of 6-inch SiC epitaxial wafers has increased to 822.8 thousand pieces in
2024, with a CAGR of 44.6% from 2020 to 2024. It is expected that by 2029, the sales volume of
6-inch SiC epitaxial wafers will reach 2,160.5 thousand pieces, with a CAGR of 21.3% from 2024
to 2029. On the other hand, the sales volume of 4-inch SiC epitaxial wafers dropped to 29.9
thousand pieces in 2024, and it is forecasted to shrink to 14.0 thousand pieces by 2029.
As the technology matures further, the commercialization of 8-inch SiC epitaxial wafers is
accelerating. The sales volume of 8-inch SiC epitaxial wafers has exhibited the most remarkable
growth, increasing from only 0.9 thousand pieces in 2020 to 137.1 thousand pieces in 2024, with
a CAGR of 254.6%. By 2029, it is expected to increase to 3,784.8 thousand pieces, with a CAGR
of 94.2% from 2024 to 2029.
INDUSTRY OVERVIEW
–9 8–


--- page 109 ---
Market Size of Global SiC Epitaxial Wafer Industry (1),
in Terms of Sales Volume, by Wafer Size, 2020-2029E
CAGR
2020-2024
Thousand unit
2024-2029E
4-inch -13.3%
44.6%
254.6%
-14.1%
6-inch
8-inch
Total
21.3%
94.2%
42.2% 43.2%
2020
0.9
52.9241.9
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
0
2,000
4,000
6,000
188.2188.2 465.3306.7
706.9
822.8
920.6
315.1
1,120.4
1,576.0
2,105.4
2,160.5
3,784.8
2,522.3
1,188.0
601.23.9
69.8380.4 555.1
793.9
989.9
1,258.5
1,740.5
2,782.1
4,645.9
5,959.4
14.1
75.7
38.1
48.9 29.9
137.1137.1
18.918.9
22.822.8
18.218.2
18.218.2
14.014.0
Source: Omdia, Yole, CIC
Note:
(1) The market size accounts for epitaxial wafers traded in both open market and captive market. Captive market refers
to device manufacturers with epitaxial wafer production capabilities manufacturing epitaxial wafers for internal use.
Price Trends of Global SiC Epitaxial Wafer Industry
The price of global SiC epitaxial wafers declined between 2020 and 2024 due to decreasing
cost of raw materials, cost optimization due to mass production capability of 6-inch SiC wafer and
expanded production capacity. With the accelerated iteration of SiC epitaxial wafer products and
rises in demand due to the swift development of downstream applications, the price decline for SiC
epitaxial wafers of the same size is expected to narrow gradually. More specifically, the price of
6-inch epitaxial wafers is expected to stabilize in 2026 and the expanded production capacity
mainly focus on 8-inch SiC epitaxial wafer in recent years, which will not lead to oversupply due
to the limited production capacity at present and the increasing downstream demand for 8-inch SiC
products with advanced technology. The 8-inch SiC products were first introduced in NEV sector
and is expected to expand to other industries.
The price of 6-inch SiC epitaxial wafer was approximately RMB7.3 thousand per piece in
2024 and is expected to drop to RMB4.4 thousand per piece in 2029, mainly due to price reduction
of SiC substrate.
With the ongoing advancements in the substrate supply chain, domestic manufacturers are
now capable of providing alternatives to imported substrates. The increased supply, cost advantages
of domestically manufactured substrates and technological developments in producing more
cost-effective substrates have collectively contributed to a decline in raw material prices. The global
average selling price of SiC substrates has shown a consistent decline from RMB6.4 thousand in
2020 to RMB4.5 thousand in 2024, reflecting improved production efficiencies and increasing
market competition. The downward trend is expected to continue in the future with the initial
application of 8-inch SiC wafer. The average selling price of SiC substrate is expected to have a
slight increase due to the substrate iteration from 6-inch to 8-inch. To mitigate the decline in the
price of SiC epitaxial wafers across the industry, our Company intends to upgrade our capacity,
maintain and stabilize our price level by providing high-quality epitaxial wafers to high-end
industry applications. Furthermore, leveraging our large production scale, we are able to maintain
our costs at a competitive level and flexibly adjust our pricing strategy to grow our market share.
INDUSTRY OVERVIEW
–9 9–


--- page 110 ---
Global SiC Epitaxial Wafers Price Trends in the Open Market (1), 2020-2029E
7.1
6.4
6.6
6.0
6.4
5.9
6.3
5.8 4.5
4.2
3.8
3.1
2.5
3.5 3.4
2.3 2.2
3.4 3.5
2.2
11.4
10.4
10.0 9.8
7.3
5.8
4.9 4.6 4.4 4.4
0
3
6
9
12
2020
RMB in thousand/piece
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
6-inch SiC substrate
6-inch SiC epitaxial wafer
ASP of SiC substrate
Source: Omdia, CIC
Market Drivers of Global SiC Epitaxial Wafer Industry
 Increasing Downstream Application Demands. With the global push towards renewable
energy and electrification, SiC power semiconductor devices are becoming crucial for
enabling high-efficiency systems due to their superior thermal performance, high breakdown
voltages, low energy consumption during switching, and ability to boost overall system
efficiency. Key industries such as EVs, renewable energy and ESS are increasingly adopting
SiC power semiconductor devices to meet higher demands for performance and energy
efficiency where China plays a significant role, accounting for over 70% of global EV unit
sales and charging infrastructure shipments, and over 90% of photovoltaic production capacity
in the global market in 2024. Such strong vertical market presence inherently buffers Chinese
SiC epitaxial suppliers against global tariff fluctuations. Furthermore, the expansion into
emerging application areas, such as home appliances, AI arithmetic and data centers, smart
grids, and eVTOL, is driving the growth of the SiC power semiconductor devices market. The
global SiC power semiconductor devices market is expected to continue growing rapidly at a
CAGR of 39.9% from 2024 to 2029. SiC epitaxial wafers, as core materials, will see their
demand grow in direct response to the increasing market demand for high-performance SiC
power semiconductor devices.
 Technological Advancements and Manufacturing Expansion. Innovations in epitaxial
growth techniques, defect reduction, and uniformity improvement are improving the quality
and yield of SiC epitaxial wafers, making them more cost-effective and reliable. With the
maturation of 6-inch SiC epitaxial wafer manufacturing processes and the reduction in
production costs, along with breakthroughs in 8-inch SiC epitaxial wafer mass production and
the acceleration of their commercialization, the market size of SiC epitaxial wafers is
experiencing rapid growth.
 Supportive Government Policies. Favorable policies, laws and regulations supporting the
development of the SiC epitaxial wafer industry have been continuously issued by
governments worldwide. In September 2023, the European Union enacted the European Chip
Act, investing over 43 billion euros to boost the European semiconductor industry. The U.S.
also issued the CHIPS and Science Act in 2022, enhancing the R&D and manufacturing
capability through tax preference and fiscal subsidy. Meanwhile, the government of China has
launched a series of favorable policies as well. In July and August 2023, the Ministry of
Industry and Information Technology issued the Implementation Opinions on Reliability
Improvement of Manufacturing Industry and Action Program for Stable Growth in the
INDUSTRY OVERVIEW
– 100 –


--- page 111 ---
Electronic Information Manufacturing Industry for 2023-2024 , which emphasized the need to
establish industry standards and enhance the reliability of wide-bandgap power semiconductor
devices, including SiC power semiconductor devices. In February 2023, the State Council of
the People’s Republic of China released the Outline for Building a Quality-Strong Country ,
explicitly advocating for the development of domestic material quality, stability, and
applicability through technological research and development. SiC epitaxial wafers, as the key
material of broadband semiconductors, fall under national industry policy and receive funding
to support their development in key areas.
Market Trends of Global SiC Epitaxial Wafer Industry
 Enhanced Specialization in Epitaxial Wafer Manufacturing. The SiC epitaxial wafer
market is seeing a growing number of foundries focusing exclusively on epitaxial wafer
manufacturing. Similar to tradition silicon industry, which has formed clear division of labor
after years of consolidation, the trend towards a highly specialized division of labor is driven
by the need for high-quality, application-specific wafers tailored to the requirements of
downstream industries. Chinese suppliers hold a significant 30% market share of the global
SiC substrate market, with other major SiC substrate suppliers located in Korea and the U.S.
This diversified upstream supply chain effectively protects the epitaxial market from potential
tariff fluctuations. Specialized foundries can provide high quality products through value
chain collaboration to satisfy various demand of downstream applications.
 The Development of 8-inch SiC Epitaxial Technology is Accelerating. For chips of the
same specifications, larger wafers reduce the proportion of edge chips and increase the
number of bare dies produced per wafer, significantly improving wafer utilization and
lowering the unit cost of chips. Taking a die with a size of 32 square millimeters as an
example, expanding the SiC epitaxial wafer from 6-inch to 8-inch can increase the wafer area
by 1.8 times, reduce the edge die ratio from 14% to 7%, and boost the number of bare dies
by 90%. Due to the mature production processes and lower costs, 6-inch SiC epitaxial wafers
will continue to have an increasing demand and hold an important position in a medium-to-
long period. As the manufacturing processes for 8-inch SiC epitaxial wafers mature and
quality improve, their adoption is expected to accelerate.
 Expanding to Wider Voltage Range Applications. With the increasing demand for
high-power, high-voltage SiC power semiconductor devices in fields such as smart grids, rail
transportation, and large-scale energy storage systems, the application scenarios for SiC
epitaxial wafers are expanding into medium-high voltage and ultra-high voltage domains.
Meanwhile, some low-voltage applications, such as home appliances, have transferred to use
SiC for higher efficiency. In the future, SiC epitaxial wafers will increasingly focus on
meeting the requirements of these devices, driving their adoption in wider voltage range
applications.
 Rapid Development of Innovative Epitaxy Growth Technologies. The continuous
improvement of epitaxy growth technology ensures to follow the pace with the changes of
demand in various downstream applications, including higher performance requirement and
more product types. SiC superjunction devices are the next-generation high-performance
power devices. Trench filling epitaxial technology is a critical manufacturing process for the
super junction devices. This technique involves etching trenches and refilling trenches using
epitaxial process, and will promote the R&D and industrialization process of SiC
superjunction devices. In addition, composite substrate may be the one of the low-cost
solutions for SiC power devices in the future, so the development of epitaxial technology
suitable for composite substrates are of great importance for the commercial promotion of
composite substrates. This technology will reduce the cost of SiC power devices and expand
the market application of SiC power devices.
INDUSTRY OVERVIEW
– 101 –


--- page 112 ---
 Declining Unit Production Costs. Driven by technology advancements, economies of scale
and supply chain optimization, the unit production cost keeps declining. The technology
advancements, especially defect control technology, enhanced the yield rates and production
efficiency. Meanwhile, the maturation of the supply chain has led to a reduction in the prices
of raw materials and equipment. Combined with the benefits of economies of scale, the unit
production cost further decreases.
COMPETITIVE OVERVIEW OF GLOBAL SIC EPITAXIAL W AFER PROVIDERS
Competitive Landscape of Global SiC epitaxial wafer providers and SiC Epitaxial Foundries
SiC epitaxial wafer providers in the open market can be categorized into two groups, epitaxial
foundries and device manufacturers with in-house epitaxy production capability. Epitaxial foundries
focus on providing SiC epitaxial wafer and are not involved in SiC power device manufacturing,
having more capital investment on SiC epitaxial wafer and accounting for 72.7% of the SiC
epitaxial wafer open market. While device manufacturers with in-house epitaxy production
capability are able to manufacture both wafers and devices. Both epitaxial foundries and device
manufacturers with in-house epitaxy production capability in the SiC industry should continuously
engage in research and innovation and accumulate extensive know-how to meet the diverse
demands of downstream customers.
The Company is a global leader among SiC epitaxial foundries and has established a strong
footprint in the global market (including China), where the Company obtained 31.6% and 29.2% of
the global market share in terms of sales volume and revenue, respectively, ranking first worldwide
in 2024, according to CIC. Meanwhile, the Company’s sales in the China domestic market
amounted to revenue of RMB0.2 billion in 2024, ranking third in terms of SiC epitaxial wafer
revenues generated in China, according to CIC. The ranking of the top five global SiC epitaxial
foundries in open market is presented in the table below:
Ranking of Top Five Global SiC Epitaxial Foundries,
in Terms of Sales Volume in open market, 2024
(1)
Ranking Company Name
SiC Epitaxial Wafer Sales
Volume(2) Market Share
(6-inch equivalent, in thousand)
1 /H1118/H1118/H1118/H1118/H1118/H1118The Company 170 31.6%
2 /H1118/H1118/H1118/H1118/H1118/H1118Company A 105 19.4%
3 /H1118/H1118/H1118/H1118/H1118/H1118Company B 96 17.8%
4 /H1118/H1118/H1118/H1118/H1118/H1118Company C 83 15.4%
5 /H1118/H1118/H1118/H1118/H1118/H1118Company D 37 6.9%
Source: Expert interviews, Annual reports, CIC
Notes:
(1) The market total of the ranking is the sum of the sales volume of SiC epitaxial foundries.
Company A, established in 1939, headquartered in Tokyo, Japan and listed on the Tokyo Stock Exchange (TYO:
4004), specializes in advanced semiconductor materials, electronic components, and high-performance chemicals.
Company B, established in 2000, headquartered in Hebei, China, is a private company specializing in research and
production of SiC epitaxial wafers, with products covering multiple specifications and models of SiC epitaxial wafers
and GaN epitaxial wafers.
Company C, established in 2009, headquartered in Guangdong, China, is a private company specializing in the R&D,
and production of SiC semiconductor materials, with applications covering PV , EVs, charging stations, energy
storage, and rail transit.
INDUSTRY OVERVIEW
– 102 –


--- page 113 ---
Company D, established in 2019, headquartered in Zhejiang, China, is a sub-subsidiary of a state-owned company
which holds 19 listed subsidiaries, specializing in developing and manufacturing SiC materials and GaN epitaxial
wafers.
(2) The sales volume of SiC epitaxial foundries has been converted to 6-inch equivalent and includes both Turnkey and
Consign models, excluding those for internal use. The conversion rate to 6-inch equivalent is based on the volume
of dies cut from an SiC epitaxial wafer. More specifically, an 8- inch SiC epitaxial wafer is equivalent to
approximately 1.8 pieces of 6-inch SiC epitaxial wafer.
Ranking of Top Five Global SiC Epitaxial Foundries
in terms of revenues in open market, 2024
Ranking Company Name SiC Epiwafer Revenue Market Share
(in billions of RMB)
1 /H1118/H1118/H1118/H1118/H1118/H1118The Company 1.0 29.2%
2 /H1118/H1118/H1118/H1118/H1118/H1118Company A 0.9 26.3%
3 /H1118/H1118/H1118/H1118/H1118/H1118Company C 0.6 17.5%
4 /H1118/H1118/H1118/H1118/H1118/H1118Company B 0.5 14.6%
5 /H1118/H1118/H1118/H1118/H1118/H1118Company D 0.2 5.8%
Source: Expert interviews, Annual reports, CIC
Ranking of Top Five Global SiC Expitaxial Foundries,
in terms of revenues in open market in China, 2024
Ranking Company Name SiC Epiwafer Revenue Market share
(in billions of RMB) (%)
1 /H1118/H1118/H1118/H1118/H1118/H1118Company C 0.6 36.8%
2 /H1118/H1118/H1118/H1118/H1118/H1118Company B 0.4 24.5%
3 /H1118/H1118/H1118/H1118/H1118/H1118The Company 0.2 12.7%
4 /H1118/H1118/H1118/H1118/H1118/H1118Company D 0.2 12.3%
5 /H1118/H1118/H1118/H1118/H1118/H1118Company E 0.1 6.1%
Source: Expert interviews, Annual reports, CIC
Note: Company E, established in 2019, headquartered in Jiangsu, is a private company providing various semiconductor
epitaxial foundry services.
Entry Barriers and Key Success Factors in the Global SiC Epitaxial Wafer Industry
 Advanced Technological Capabilities. Companies in the global SiC epitaxial wafer industry
must possess advanced technological expertise, including defect control technology,
uniformity control technology, etc., which enables them to produce innovative products to
meet various demand of downstream applications. For new entrants, achieving such a level of
technological proficiency requires substantial and continuous investment in research and
development, thereby forming a significant technological barrier to entry.
 Advantages in Large-Size and Mass Production Capacity. Producing in large sizes and
large-scale helps secure economies of scale, improve production efficiencies, and lower
per-unit costs. This robust production capacity creates a formidable barrier to entry for new
market entrants, as it demands stringent production control and substantial investment in
manufacturing infrastructure.
INDUSTRY OVERVIEW
– 103 –


--- page 114 ---
 Extensive Industry Experience and Knowledge Accumulation. SiC epitaxial wafer
manufacturing is a technology-intensive process, requiring long-term R&D and
experimentation to obtain industry know-how. Deep-rooted industry experience enables
companies to foresee market trends, optimize production processes, and mitigate risks
effectively. This expertise is invaluable for driving continuous improvement and innovation.
 Solid Customer Base and Collaborative Supply Chain: Through long-term cooperation
with leading global customers, SiC epitaxial foundries can accumulate rich industry
experience and deep insight into future trends in downstream industries, satisfying the
differentiated needs. The high cost to switch suppliers, including product evaluation, testing
and certification, has created a strong customer stickiness. Especially for application areas
with strict requirements, such as EV , etc., the verification process may take several years,
forming an invisible customer barrier as well.
 Assurance of High-quality Products. Achieving high-quality and high-consistency products
helps companies obtain a competitive edge, especially for automotive-grade wafers. To ensure
consistent high-quality SiC epitaxial wafer products, businesses must obtain industry
know-how and strictly enforce quality management processes.
 Significant Capital Investment in Production and R&D. The SiC epitaxial wafer industry
is capital-intensive, demanding substantial upfront investments for large-scale production
facility construction. To achieve cost advantages and enhance market competitiveness,
companies must allocate significant capital for upgrading production lines from 6-inch to
8-inch wafers. Meanwhile, continuous R&D investment is essential to advance epitaxial
growth technologies, such as reducing defect densities and improving uniformity.
SOURCES AND RELIABILITY OF INFORMATION
We commissioned CIC, a market research and consulting company founded in Hong Kong and
engaged in the provision of professional consulting services across multiple industries, to conduct
an analysis and report of the global and China’s SiC power semiconductor device industries and
epitaxial wafer industries market. We have agreed to pay a fee of RMB0.6 million to CIC in
connection with the preparation of the CIC Report. We have extracted certain information from the
CIC Report in this section, as well as in the sections headed “Summary”, “Risk Factors”,
“Business”, “Financial Information” and elsewhere in this Prospectus to provide our potential
investors with a more comprehensive understanding of the industry in which we operate. Except as
otherwise stated, all data and forecasts in this section come from the CIC Report.
The information and data collected by CIC have been analyzed, assessed and validated using
CIC’s in-house analysis models and techniques. Primary research was conducted via interviews
with key industry experts and leading industry participants. Secondary research involved analyzing
data from various publicly available data sources and various industry associations.
The market forecasts in the CIC Report are based on the following key assumptions: (1) the
global social, economic environment is expected to remain stable during the forecast period; (2)
related key industry-driving factors are likely to continue to drive the growth of the global and
China’s SiC power semiconductor device industries and epitaxial wafer industries market, such as
technological advancements, supporting policies and increasing downstream demand, during the
forecast period and (3) there will be no extreme force majeure or unforeseen industry regulations
during the forecast period, which may have a drastic or fundamental impact on the market.
Our Directors confirm that, to the best of their knowledge, after making reasonable inquiries,
there is no material and adverse change in the market information since the date of the CIC Report,
which may qualify, contradict or have an impact on the information in this section.
INDUSTRY OVERVIEW
– 104 –


--- page 115 ---
Information disclosed in this section is relevant PRC laws and regulations (the “ PRC
Laws ”) in effect which have a significant impact on the operation of our Group in the PRC
as of the date of this Prospectus, which are subject to change in the future, but it does not
include a detailed analysis of PRC Laws related to our business activities and operations in
the PRC, or serve as all PRC Laws applicable to our operations in the PRC.
LA WS AND REGULATIONS RELATING TO COMPANY AND FOREIGN INVESTMENT
The establishment, operation and management of corporate entities in the PRC are governed
by the Company Law of the PRC () (the “ Company Law ”), which was
promulgated by the Standing Committee of the National People’s Congress of the PRC (the
“SCNPC ”) on December 29, 1993, last amended on December 29, 2023 and implemented on July
1, 2024. Foreign invested entities are also subject to the Company Law unless otherwise provided
by the Foreign Investment Laws (as defined below). The Company Law generally governs two types
of companies, namely limited liability companies and joint stock limited companies. Both types of
companies have the status of legal persons, and the liability of shareholders of a limited liability
company or a joint stock limited company is limited to the amount of registered capital they have
contributed. The Company Law shall also apply to foreign invested companies in form of limited
liability company or joint stock limited company.
Foreign invested entities in the PRC are also subject to the foreign investment laws and
regulations including the Foreign Investment Law of the PRC ()
(the “ Foreign Investment Law ”), which was promulgated by the NPC and became effective on
January 1, 2020, and the Regulations on Implementing the Foreign Investment Law of the PRC
(ૢԷ), which were promulgated by the State Council on
December 26, 2019, and became effective on January 1, 2020. According to the Foreign Investment
Law, the PRC adopts a system of national treatment which includes a negative list with respect to
foreign investment administration. The negative list will be issued by, amended, or released upon
approval by the State Council, from time to time.
On September 6, 2024, the NDRC and the MOFCOM jointly issued the Special Administrative
Measures for Access of Foreign Investment (Negative List) (2024 Edition) (ɝतй၍
݄(૶ఊ)(2024و)) (the “ Negative List ”), which came into effect on November 1,
2024. The Negative List uniformly sets forth the ownership requirements, requirements for senior
executives, and other special administrative measures for the access of foreign investment. Fields
not on the Negative List shall be administered under the principle of equal treatment for both
domestic and foreign investment. As of the Latest Practicable Date, our business does not fall within
the scope of the Negative List.
On October 26, 2022, the MOFCOM and the NDRC promulgated the Catalog of Industries for
Encouraging Foreign Investment (2022 V ersion) ( ོᎸ̮ਠҳ༟ପุͦ፽(2022و)) (the
“Encouraging Catalog ”), which came into effect on January 1, 2023. The Encouraging Catalog
lists the industries that encourage foreign investment.
Pursuant to the Measures for the Reporting of Foreign Investment Information ( ̮ਠҳ༟
), which was jointly promulgated by the MOFCOM and the State Administration for
Market Regulation on December 30, 2019 and became effective on January 1, 2020, where a foreign
investor carries out investment activities in PRC directly or indirectly, the foreign investor or the
foreign-invested enterprise shall submit the investment information in a timely manner to the
competent commerce department.
REGULATORY OVERVIEW
– 105 –


--- page 116 ---
LA WS AND REGULATIONS RELATING TO CUSTOMS
According to the Customs Law of the PRC () promulgated by the
SCNPC on January 22, 1987, last amended and implemented on April 29, 2021, unless otherwise
provided for, the declaration of imported or exported goods may be made by the consignors or
consignees, or the entrusted customs declaration enterprises. The consignee of imported goods and
the consignor of exported goods shall make an accurate declaration and submit the import or export
license and relevant papers to the Customs office for examination.
Pursuant to the Administrative Provisions on Record-Filing of Customs Declaration Entities
of the PRC () promulgated by the General
Administration of Customs (the “ GAC”) on November 19, 2021 and effective on January 1, 2022,
the consignees or consignors of imported or exported goods as well as the customs declaration
enterprises engaged in customs declaration shall carry out the record-filing procedures with the
relevant customs administrative department.
According to the Foreign Trade Law of the PRC ()
promulgated by the SCNPC on May 12, 1994 and last amended on December 30, 2022 and the
Notice by the Department of Enterprise Management and Audit-Based Control of Matters
Concerning the Recordation of the Consignees and Consignors of Imported and Exported Goods
() issued by the GAC on
January 3, 2023, a consignee or consignor of imported or exported goods who applies for filing shall
be qualified as a market entity and is not required to be filed as a foreign trade business operator.
LA WS AND REGULATIONS RELATING TO INTERNATIONAL TRADE AND
INVESTMENT
In recent years, the United States has expanded sanctions and export controls restrictions on
China through the Export Administration Regulations (the “EAR”), administered by the Bureau of
Industry and Security of the United States Department of Commerce (the “BIS”). In addition to the
United States, some other governments, including the Netherlands, are also imposing controls,
licensing requirements and restrictions applicable to exports to China. These types of restrictions
could impact our ability to supply customers of affected countries, territories and entities and could
restrict our ability to obtain components and technologies we incorporate in or use to develop our
products. Moreover, in August 2022, the United States enacted the Creating Helpful Incentives to
Produce Semiconductors and Science Act of 2022 (the “CHIPS Act”). The CHIPS Act aims to
strengthen U.S. domestic semiconductor manufacturing, design and research, fortify the economy
and national security, and to help the United States compete economically against China.
With respect to U.S. export controls, in October 2022, BIS issued an interim final rule (the
“BIS October 2022 IFR”) aimed at restricting China’s ability to obtain advanced computing
integrated circuits, develop and maintain supercomputers, and manufacture advanced
semiconductors. In October 2023, BIS issued another interim final rule (the “BIS October 2023
IFR”) that updated and expanded U.S. export controls imposed by the BIS October 2022 IFR
(collectively, the “BIS 2022/23 IFRs”). Among other measures, the BIS 2022/23 IFRs add to the
Commerce Control List (which is a list of commodities, software, and technologies that are subject
to the EAR’s more restrictive controls) certain advanced and high-performance computing
integrated circuits and computer commodities that contain these integrated circuits, and impose new
or expanded license requirements for items subject to the EAR destined for an end-use in the
development or production of supercomputers, certain types of advanced node integrated circuits
and advanced, or semiconductor manufacturing equipment in certain jurisdictions, including China.
In addition to the restrictions introduced by the BIS 2022/23 IFRs, BIS maintains lists of
persons that are subject to enhanced export control restrictions. One such list, the Entity List,
includes a list of foreign persons on which certain trade restrictions are imposed, including
business, research institutions, government and private organizations, individuals and other types of
REGULATORY OVERVIEW
– 106 –


--- page 117 ---
legal persons. Where a foreign person is included on the Entity List, the export, re-export and/or
transfer (in-country) of items which are subject to the EAR generally is prohibited unless the
specified license requirements are met. The United States in recent years has placed an increasing
number of entities, including a number of entities in China, on the Entity List and other restricted
or prohibited parties lists. For impact on the SiC power semiconductor device industry chain, see
“Industry Overview — Industry Overview of Global Power Semiconductor Devices and SiC Power
Semiconductor Devices — Industry Chain of SiC Power Semiconductor Device Industry.”
On August 9, 2023, the Biden administration released an executive order and an advanced
notice of proposed rule-making (the “ANPRM”) providing a conceptual framework for outbound
investment controls focused on China, including Hong Kong and Macau. Further to this ANPRM,
on June 21, 2024, the U.S. Department of the Treasury issued a proposed rule on outbound U.S.
investments involving China that generally follows the ANPRM. On October 28, 2024, the U.S.
Department of the Treasury issued a final rule to implement the executive order of August 9, 2023
(the “Final Rule”). The Final Rule is effective on January 2, 2025. The Final Rule imposes
investment prohibition and notification requirements on U.S. Persons for a wide range of
investments in entities associated with China (including Hong Kong and Macau) that are engaged
in activities relating to three sectors: (i) semiconductors and microelectronics, (ii) quantum
information technologies, and (iii) artificial intelligence systems, collectively defined as “Covered
Foreign Persons.” U.S. persons subject to the Final Rule are prohibited from making, or required
to report, certain investments in Covered Foreign Persons, which are defined as “covered
transactions,” and include acquisitions of equity interests that are not yet offer, certain debt
financing, joint ventures, and certain investments as a limited partner in a non-U.S. person pooled
investment fund. The Final Rule excludes some investments from the scope of covered transactions,
including those in publicly traded securities. The Final Rule is aimed at exerting greater U.S.
government oversight over U.S. direct and indirect investments involving China, and may introduce
new hurdles and uncertainties for cross-border collaborations, investments, and funding
opportunities of China-based issuers including us.
LA WS AND REGULATIONS RELATING TO FIRE SECURITY
Pursuant to the Fire Protection Law of the PRC () promulgated by
the SCNPC on April 29, 1998, last amended and implemented on April 29, 2021, for special
construction projects stipulated by the Ministry of Housing and Urban-Rural Development of the
State Council, the developer shall submit the fire safety design documents to the housing and
urban-rural development authority for examination, while for construction projects other than those
special development projects, the developer shall, at the time of applying for the construction
permit or approval for work commencement report, provide the fire safety design drawings and
technical materials which satisfy the construction needs. According to the Interim Regulations on
Administration of Examination and Acceptance of Fire Control Design of Construction Projects
() promulgated on April 1, 2020 and amended on
August 21, 2023, an examination system for fire prevention design and acceptance only applies to
special construction projects, and for other projects, a record-filing and spot check system would
be applied.
LA WS AND REGULATIONS RELATING TO ENVIRONMENTAL PROTECTION
Pursuant to the Environmental Protection Law of the PRC ()
(the “ Environmental Protection Law ”), which was promulgated by SCNPC on December 26,
1989, amended on April 24, 2014 and became effective on January 1, 2015, enterprises, institutions
and other manufacturing operators shall prevent and reduce environmental pollution and ecological
damage, and shall be liable for damages caused by them pursuant to the law. According to the
Environmental Protection Law, construction projects that have environmental impact shall be
subject to environmental impact assessment.
REGULATORY OVERVIEW
– 107 –


--- page 118 ---
Environment Impact Assessment
On October 28, 2002, the SCNPC promulgated the Environmental Impact Assessment Law of
the PRC () (the “ Environmental Impact Assessment Law ”),
which was latest amended on December 29, 2018. According to the Environmental Impact
Assessment Law, the State implements classified management of environmental impact assessments
for construction projects based on the degree of environmental impact of such projects.
Pursuant to the Interim Measures for Environmental Protection Acceptance of Completed
Construction Projects () effective as of November 20,
2017 and the Regulations on the Administration Construction Project Environmental Protection
(ᚐ၍ଣૢԷ), which was revised on July 16, 2017 and implemented on
October 1, 2017, after the completion of a construction project for which an environmental impact
report or an environmental impact report form is required, the construction entity shall, according
to standards and procedures prescribed by the environmental protection administrative authorities,
conduct environmental protection completion acceptance check and compile an acceptance check
report. A construction project for which an environmental impact report or an environmental impact
report form is required shall not be put into production or use until the environmental protection
completion acceptance check has been passed.
According to the Environmental Impact Assessment Law, where a construction entity
commenced construction prior to submission of the environmental impact report and environmental
impact statement of the construction project or prior to resubmission of the environmental impact
report and environmental impact statement, the ecological environment authorities at the county
level or above shall order it to stop the construction, impose a fine of not less than 1% but not more
than 5% of the overall investment amount for such construction project according to the seriousness
and consequences of such violations, and order it to restore to the original status; and the
person-in-charge and responsible personnel of the construction project shall be liable to
administrative sanctions in accordance with laws.
Pollutant Discharge Permit
Pursuant to the Law on the Prevention and Control of Environmental Pollution Caused by
Solid Waste of the PRC (), which was promulgated
by the SCNPC in 1995 and was latest amended on April 29, 2020, entities generating hazardous
waste shall store, utilise and dispose hazardous waste according to the relevant requirements of the
state and environmental protection standards, and shall not dump or pile up hazardous waste
without authorisation. Furthermore, it is forbidden to entrust hazardous waste to entities without a
permit for disposal, or else the competent ecological and environmental authorities shall order it to
make rectification, impose fines, confiscate illegal gains, and in serious circumstance, order it to
suspend business or close down upon the approval of government authorities.
Pursuant to the provisions of the Regulation on the Administration of Permitting of Pollutant
Discharges ( રϮ஢̙၍ଣૢԷ) promulgated on January 24, 2021 and implemented on March
1, 2021, as well as the Measures for Pollutant Discharge Permitting Administration ( રϮ஢̙၍
) promulgated on January 10, 2018, last amended and implemented on July 1, 2024, the
administration on pollutant discharge units is divided into key management and simplified
management pursuant to the amount of pollutant caused and discharged and the impact on the
environment. Their review, decision and information disclosure of pollutant discharge licenses shall
be handled through the national pollutant discharge license management information platform. The
pollutant discharge license is valid for 5 years and the discharging units should apply for renewal
60 days before the expiry for continues pollutant discharge. In case of violations of the regulations
regarding pollutant discharge permits, the environmental protection authorities have the right to
order to make corrections, restrict production, suspend production for rectification, and suspend
business and close down, and impose a fine. If a crime is constituted, it shall be investigated for
criminal liabilities in accordance with the law.
REGULATORY OVERVIEW
– 108 –


--- page 119 ---
According to the Catalog of Classified Administration of Pollutant Discharge License for
Stationary Pollution Sources (2019 V ersion) (๕રϮ஢̙ʱᗳ၍ଣΤ፽(2019و) )
issued by the Ministry of Ecology and Environment on December 20, 2019, key management,
simplified management and registration management of pollutant discharge permits are
implemented according to factors such as the amount of pollutants generated, the amount of
emissions, the degree of impact on the environment, etc., and only pollutant discharge entities that
implement registration management do not need to apply for a pollutant discharge permit.
According to the Regulation on Urban Drainage and Sewage Treatment (ᕄર˥ၾϮ˥ஈ
ଣૢԷ), which was promulgated by the State Council on October 2, 2013, and implemented on
January 1, 2014, as well as the Measures for the Administration of Permits for Discharging Urban
Sewage into the Drainage Pipeline (), which was
promulgated by the Ministry of Housing and Urban-Rural Development on January 22, 2015, and
last amended and implemented on February 1, 2023, enterprises, institutions and individually-
owned businesses engaging in industry, construction, food and beverage, medical service and other
activities which discharge sewage into urban drainage facilities shall apply to the competent urban
drainage authorities for a permit for sewage discharge into the drainage pipe network (Drainage
Permit). Discharging sewage into urban drainage facilities without obtaining a Drainage Permit
shall be ordered by the relevant urban drainage authority to suspend illegal activities, take remedial
measures within a time limit, re-apply the Drainage Permit, and may impose a fine of less than
RMB500,000.
LA WS AND REGULATIONS ON PRODUCT QUALITY
According to the Product Quality Law of the PRC () (the
“Product Quality Law ”) promulgated on February 22, 1993 and amended on July 8, 2000, August
27, 2009 and December 29, 2018 by the SCNPC, producers and sellers shall establish a sound
internal product quality control system, strictly adhere to a job responsibility system in relation to
quality standards and quality liabilities, and implement corresponding examination and inspection
measures. The forgery or imitation of quality marks such as certification marks is prohibited;
falsifying the place of origin of product, and falsifying or imitating the name or address of another
factory is prohibited; adulteration of, or mixing of improper elements with products under
manufacturing or on sale, passing off the sham as the genuine or passing off the inferior as the
superior is prohibited. Any manufacturer or seller who violates the Product Quality Law may be
subject to (i) administrative penalties, including suspension of production or sale, ordered
correction of illegal activities, confiscation of products subject to illegal production or sale,
imposition of fines, confiscation of illegal gains and, in severe cases, revocation of business license;
and (ii) criminal liabilities if the illegal activity constitutes a crime.
LA WS AND REGULATIONS ON WORK SAFETY
According to the Work Safety Law of the PRC (), which was
promulgated by the SCNPC on June 29, 2002 and was latest amended in June 10, 2021, entities that
engage in production and business operation activities in PRC shall set up and perfect the
responsibility system for work safety, improve the conditions for work safety, strengthen the
education and training on work safety for employees, provide articles of labor protection that meet
the national standards or industrial standards for their employees, and perform the obligations
related to work safety as stipulated by the Work Safety Law of the PRC and other laws and
regulations.
HAZARDOUS CHEMICALS
The Regulation on the Safety Administration of Hazardous Chemicals (τΌ၍
ଣૢԷ), which was promulgated by the State Council and latest amended in 2013, stipulates that
enterprises using hazardous chemicals shall, in accordance with the types and hazard characteristics
of the used hazardous chemicals as well as the amount and mode of use, establish and perfect the
REGULATORY OVERVIEW
– 109 –


--- page 120 ---
safety administration regulations and safety operating rules for the use of hazardous chemicals so
as to guarantee the safe use of hazardous chemicals, and shall comply with the provisions of laws
and regulations regarding the storage hazardous chemicals. Enterprise fails to comply with such
regulatory requirements shall be ordered to rectify, to suspend business operations, be imposed
fines, or even has its permits or business license be revoked by the relevant government authorities.
LA WS AND REGULATIONS ON LAND, PLANNING AND PROJECT CONSTRUCTION
Land
According to the Land Administration Law of the PRC ()
promulgated by the SCNPC on June 25, 1986 and latest amended on August 26, 2019, and the
Regulations for the Implementation of the Land Administration Law of the PRC ( ʕശɛ͏΍ձ
ૢԷ) promulgated by the State Council on December 27, 1998 and latest
revised on July 2, 2021, the land in the PRC is either State-owned or collectively owned. Except
for land which is legally owned by the State or has been expropriated as State-owned according to
law, all of the land is collectively owned. The State-owned land use rights may be used by third
parties through grant, allocation, lease, capital contribution and other forms. Third parties who have
obtained the State-owned land use rights may legally use, profit from and dispose of the
State-owned land use rights within the statutory term of use and scope of planned uses.
Planning
According to the Urban and Rural Planning Law of the PRC (ඊ஝ྌ
) promulgated by the SCNPC on October 28, 2007 and latest amended on April 23, 2019, if the
construction of buildings, structures, roads, pipelines and other projects is carried out in the planned
area of a city or a town, the construction entity or individual shall apply to the competent authority
of urban and rural planning of the people’s government of the city or county or the people’s
government of the town as determined by the people’s government of the province, autonomous
region or municipality directly under the Central Government for a construction project planning
permit.
Project Construction
According to the Construction Law of the PRC () promulgated by
the SCNPC on November 1, 1997 and amended on April 23, 2019, prior to the commencement of
construction work, the construction entity shall apply to the competent construction administrative
authority of the people’s government at or above the county level where the project is located for
a construction permit in accordance with the relevant provisions of the State, except for small-scale
projects under the quota as determined by the construction administrative authority under the State
Council. A construction project shall be delivered for use only after it has passed the acceptance
examination. A construction project shall not be delivered for use without conducting or passing the
acceptance examination.
LA WS AND REGULATIONS RELATING TO INTELLECTUAL PROPERTY RIGHTS
Trademarks
Pursuant to the Trademark Law of the PRC () promulgated by the
SCNPC on August 23, 1982, last amended on April 23, 2019 and implemented on November 1,
2019, and the Implementation Provisions of the Trademark Law of the PRC ( ʕശɛ͏΍ձ਷ਠ
ૢԷ) promulgated by the State Council on August 3, 2002, last amended on April 29,
2014 and implemented on May 1, 2014, registered trademarks in the PRC include commodity
trademarks, service trademarks, collective trademarks and certification trademarks. The Trademark
REGULATORY OVERVIEW
–1 1 0–


--- page 121 ---
Office of China National Intellectual Property Administration handles trademark registrations and
grants a term of ten years to registered trademarks, and another ten years if requested upon expiry
of the first or any renewed ten-year term.
Patents
According to the Patent Law of the PRC () promulgated by the
SCNPC on March 12, 1984, and latest amended on October 17, 2020 and came into effect on June
1, 2021 and the Implementation Rules of the Patent Law of the PRC (ྼ
), promulgated by the State Council and latest amended on December 11, 2023 and came
into effect on January 20, 2024, there are three types of patents in the PRC, which are invention
patents, utility model patents and design patents. The protection period of a patent right for
invention patents shall be 20 years, the protection period of a patent right for utility model patents
shall be 10 years, and the protection period of design patent right is 15 years, both commencing
from the filing date.
Software Registration
Pursuant to the Regulation on Computer Software Protection (ᚐૢԷ)
promulgated on June 4, 1991 by the State Council and last amended on January 30, 2013 and the
Measures for the Registration of Computer Software Copyright ()
promulgated on April 6, 1992 and last amended by the National Copyright Administration on July
1, 2004, the National Copyright Administration is mainly responsible for the registration and
management of software copyright in China and recognizes the China Copyright Protection Center
as the software registration organization. The China Copyright Protection Center 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 and the
Regulation on Computers Software Protection.
Domain Names
Pursuant to the Administrative Measures of Internet Domain Names ( ʝᑌၣਹΤ၍ଣ፬
) promulgated on August 24, 2017 and implemented on November 1, 2017 by the Ministry of
Industry and Information Technology, the Ministry of Industry and Information Technology is the
major regulatory body for national domain name services. The principle of “first-to-file” is adopted
for domain name services The applicant of domain name registration shall provide the agency of
domain name registration with the true, accurate and complete information about the domain name
holder’s identity for the registration purpose. Upon completion of the domain name registration, the
applicant will become the holder of such registered domain names.
LA WS AND REGULATIONS RELATING TO FOREIGN EXCHANGE
According to the Regulations on Foreign Exchange Administration of the PRC ( ʕശɛ͏
΍ձ਷̮ි၍ଣૢԷ) promulgated by the State Council on January 29, 1996, last amended and
implemented on August 5, 2008, RMB is freely convertible into other currencies for current
accounts such as trade-related income and expenses and payments of interest and dividends. While
for capital items such as direct equity investment, loan and divestment, the conversion of RMB into
other currencies and the remittance of the converted foreign currencies outside China shall be
subject to prior approval of the SAFE or its local branches.
Pursuant to the Circular of the SAFE on Further Improving and Adjusting Foreign Exchange
Administration Policies for Direct Investment (ટҳ༟
), which was issued by the SAFE on February 13, 2015, implemented on
June 1, 2015 and partially abolished on December 30, 2019, banks shall, on behalf of SAFE,
directly examine and handle foreign exchange registration under domestic direct investment and
overseas direct investment, and SAFE and its branches shall exercise indirect supervision over
foreign exchange registration of direct investment through banks.
REGULATORY OVERVIEW
– 111 –


--- page 122 ---
The Circular of the SAFE on Reforming the Management Approach Regarding the Settlement
of Foreign Exchange Capital of Foreign-invested Enterprises (̮ਠҳ༟
) (the “ Circular 19 ”), issued by the SAFE on March 30,
2015, last amended and became effective on March 23, 2023, allows foreign-invested enterprises
to make equity investments by using RMB fund converted from foreign exchange capital. Under the
Circular 19, the foreign exchange capital in the capital account of foreign-invested enterprises upon
the confirmation of rights and interests of monetary contribution by the local foreign exchange
bureau (or the book-entry registration of monetary contribution by the banks) can be settled at the
banks based on the actual operation needs of the enterprises. The proportion of discretionary
settlement of foreign exchange capital of foreign-invested enterprises is currently 100%. SAFE can
adjust such proportion in due time based on the circumstances of the international balance of
payments. Furthermore, the Circular 19 and the Circular of the SAFE on Reforming and Regulating
Policies on the Management of the Settlement of Foreign Exchange of Capital Accounts (̮
) (the “ Circular 16 ”) which was issued
by the SAFE on June 9, 2016, last amended and implemented on December 4, 2023, stipulate that
foreign-invested enterprises shall not use the RMB funds obtained from foreign exchange capital for
payment outside of the business scope of the enterprises, investment in securities or financial
schemes other than wealth management products and structured deposits with risk rating results not
higher than Level 2, granting loans to non-connected enterprises or constructing or purchasing real
estate that is not for self-use.
The Circular of the SAFE on Further Promoting the Facilitation of Cross-border Trade and
Investment () which was issued
by the SAFE on October 23, 2019, last amended and implemented on December 4, 2023, cancelled
restrictions on the domestic equity investment by non-investment foreign-invested enterprises with
their capital funds. The non-investment foreign-invested enterprises shall be allowed to use capital
funds for domestic equity investment in accordance with the laws under the premise of not violating
the Negative List and the authenticity and compliance of their domestic invested projects.
According to the Circular of the SAFE on Optimizing Administration of Foreign Exchange to
Support the Development of Foreign-related Business (ऒ
) issued by the SAFE on April 10, 2020, eligible enterprises are allowed to
make domestic payments by using their income under capital accounts, such as capital funds,
foreign debts and the proceeds from overseas listing, without submitting the evidentiary materials
concerning authenticity of such capital for banks in advance; provided that their capital use is
authentic and in line with provisions, and in compliance with the prevailing administrative
regulations on the use of income under capital accounts. The bank in charge shall conduct spot
checks in accordance with the relevant requirements.
Pursuant to the Circular of the SAFE on Relevant Issues Concerning the Administration of
Foreign Exchange for Overseas Listing (ஷ
) issued by the SAFE on December 26, 2014 and as amended by the Circular 16, the domestic
companies shall register the overseas listing with the foreign exchange control bureau located at its
registered address in 15 working days after completion of the overseas listing and issuance. The
funds raised by the domestic companies through overseas listing may be repatriated to China or
deposited overseas, provided that the intended use of the fund shall be consistent with the contents
of the document and other public disclosure documents.
LA WS AND REGULATIONS RELATING TO TAX
Enterprise Income Tax
Pursuant to the EIT Law promulgated by the SCNPC on March 16, 2007 and last amended and
implemented on December 29, 2018, and the Regulations on the Implementation of the Enterprise
Income Tax Law of the PRC (ૢԷ) (the “ Regulations on
the EIT Law ”) promulgated by the State Council on December 6, 2007, last amended on December
REGULATORY OVERVIEW
–1 1 2–


--- page 123 ---
6, 2024, and implemented on January 20, 2025, a domestic enterprise which is established within
the PRC in accordance with the laws or established in accordance with any laws of foreign countries
(regions) but with an actual management entity within the PRC shall be regarded as a resident
enterprise. A resident enterprise shall be subject to an EIT of 25% of any income generated within
or outside the PRC. A preferential EIT rate shall be applicable to any key industry or project which
is supported or encouraged by the State. High and new technology enterprises which are supported
by the State may enjoy a reduced EIT rate of 15%.
VAT
Pursuant to the Provisional Regulations on the V A T of the PRC (೼ᅲ
БૢԷ) promulgated by the State Council, last amended and implemented on November 19,
2017, and the Detailed Implementing Rules of the Provisional Regulations on the V A T of the PRC
() promulgated by the MOF on December 15, 1993,
last amended on October 28, 2011 and implemented on November 1, 2011 (collectively, the “ VAT
Law”), all taxpayers selling goods, providing processing, repairing or replacement services, sales
of services, intangible assets and immovable assets and importing goods within the PRC shall pay
the V A T. Unless provided otherwise, for general the V A T taxpayers selling services and intangible
assets, the V A T is 6%.
The Notice of the MOF and the STA on Adjusting the V A T (ሜ
), which was promulgated by the MOF and the STA on April 4, 2018 and
came into effect on May 1, 2018, adjusts the applicable rate of the V A T and stipulates that for a
taxpayer who engages in a taxable sales activity for the V A T purpose or importation of goods, the
previous applicable tax rates of 17.0% and 11.0% would be adjusted to 16.0% and 10.0%,
respectively.
According to the Announcement on Relevant Policies for Deepening the V A T Reform ( ᗫ
ʮѓ) promulgated by the MOF and the STA and the GAC on
March 20,2019 and effective from April 1, 2019, the V A T rates of 16% and 10% on sales, imported
goods shall be adjusted to 13% and 9%, respectively.
Tax on Dividends
Individual Investors
According to the Individual Income Tax Law of the PRC ()
(the “ IIT Law ”), which was latest amended on August 31, 2018 and its implementation rules, for
individual income including interest, dividend and bonus, individual income tax with applicable
proportional tax rate of 20% shall be paid. Unless otherwise provided by the competent financial
and taxation authorities under the State Council, all the interest, dividend and bonus are deemed as
derived from the PRC whether the payment place is in the PRC. According to the Circular on
Certain Issues Concerning the Policies of Individual Income Tax (ഄਪᕚ
) promulgated on May 13, 1994, overseas individuals are exempted from the individual
income tax for dividends or bonuses received from foreign-invested enterprises.
Enterprise Investors
The principal laws, rules and regulations governing dividend distributions by foreign-invested
enterprises in the PRC are the Company Law and the Foreign Investment Law and its Implementing
Regulations. Under these requirements, foreign-invested enterprises may pay dividends only out of
their accumulated profit, if any, as determined in accordance with PRC accounting standards and
regulations. When the PRC Company distributes the after-tax profits of the current year, it shall
allocate 10% of the profits into the statutory reserve fund. If the accumulated amount of the
statutory reserve fund reaches 50% of the registered capital, the Company is released from the
obligation of withholding statutory reserve fund. Where the statutory common reserve fund of the
REGULATORY OVERVIEW
–1 1 3–


--- page 124 ---
company is not sufficient to recover its losses in the previous years, the profits of the current year
shall be used to make up the loss before the withdrawal of the statutory common reserve fund in
accordance with the above provisions. After making allocation to the statutory provident fund of the
Company from its after-tax profits, the Company may, subject to resolutions adopted at the general
meeting, also allocate funds from the after-tax profits to the discretionary provident fund. The
residual after-tax profits after a company has made up its losses and accrued reserve can be
distributed by the company in proportion to the shares held by its shareholders, except as otherwise
provided for in the company’s articles of association. The company shall not distribute any profits
in respect of the shares held by it.
In accordance with the EIT Law and its implementation rules, a uniform enterprise income tax
rate of 25% is imposed on all resident enterprises in China, including foreign-invested enterprises;
a non-PRC resident enterprise is generally subject to enterprise income tax at a rate of 10% on
PRC-sourced income (including dividends received from a PRC resident enterprise that issues
shares in Hong Kong), if it does not have an establishment or premise in the PRC or has an
establishment or premise in the PRC but its PRC-sourced income has no real connection with such
establishment or premise. The aforesaid income tax payable for non-PRC resident enterprises is
deducted at source, where the payer of the income is required to withhold the income tax from the
amount to be paid to the non-resident enterprise when such payment is made or due.
The Circular on Issues relating to the Withholding of Enterprise Income Tax by PRC Resident
Enterprises on Dividends Paid to Overseas Non-PRC Resident Enterprise Shareholders of H Shares
(͏ΆุΣྤ̮ Hஷ
), which was issued by the SA T on November 6, 2008, further clarifies that a PRC resident
enterprise must withhold enterprise income tax at a rate of 10% on the dividends distributed to
overseas non-PRC resident enterprise shareholders of H Shares in 2008 and any subsequent year.
In addition, the Response to Questions on Levying Enterprise Income Tax on Dividends Derived by
Non-PRC Resident Enterprise from Holding Stock such as B Shares (͏
Άุ՟੻Bҭూ), which was issued by the SA T on July 24,
2009, further provides that any PRC resident enterprise whose shares are listed on overseas stock
exchanges must withhold and remit enterprise income tax at a rate of 10% on dividends distributed
to overseas non-PRC resident enterprise shareholders of H Shares in 2008 and any subsequent year.
Such tax rates may be further modified pursuant to the tax treaty or agreement that China has
entered into with a relevant country or area, where applicable.
Pursuant to the Arrangement between the Mainland and the Hong Kong Special
Administrative Region on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
(τર), which was signed on
August 21, 2006, the PRC regulatory authorities may levy taxes on the dividends paid by a Chinese
company to Hong Kong residents (including natural persons and legal entities) in an amount not
exceeding 10% of 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, then such tax shall not
exceed 5% of the total dividends payable by the Chinese company. The Fifth Protocol of the
Arrangement between the Mainland of China and the Hong Kong Special Administrative Region on
the Avoidance of Double Taxation and the Prevention of Fiscal Evasion (ਜ
ࣣ֛which came into effect on December
6, 2019, added a criterion for the qualification of entitlement to enjoy treaty benefits. Although
there may be other provisions under the Arrangement, the treaty benefits under the criteria shall not
be granted in the circumstance where the main purposes for the arrangement or transactions which
will bring any direct or indirect benefits under this Arrangement, after taking into account all
relevant facts and conditions, are reasonably deemed to be obtaining such benefits, except when the
grant of such benefits under such circumstance is consistent with relevant objective and goal under
the Arrangement. The application of the dividend clause of tax agreements is subject to the statutory
requirements of PRC tax law documents, such as the Notice of the SA T on the Issues Concerning
the Enforcement of the Dividend Clauses of Tax Treaties (ࢹٰ֛
).
REGULATORY OVERVIEW
–1 1 4–


--- page 125 ---
Non-PRC resident investors residing in jurisdictions which have entered into treaties or
adjustments for the avoidance of double taxation with the PRC might be entitled to a reduction of
the PRC enterprise income tax imposed on the dividends received from PRC companies. The PRC
currently has entered into avoidance of double taxation treaties or arrangements with Hong Kong,
Macau, and a number of countries and regions including Australia, Canada, France, Germany,
Japan, Malaysia, the Netherlands, Singapore, the United Kingdom and the United States. Non-PRC
resident enterprises entitled to preferential tax rates in accordance with the relevant taxation treaties
or arrangements are required to apply to the PRC tax authorities for a refund of the enterprise
income tax in excess of the agreed tax rate, and the refund application is subject to approval by the
PRC tax authorities.
TARIFF LA WS AND REGULATIONS RELATING TO EMPLOYMENT AND SOCIAL
SECURITY
Labour Contract
Pursuant to the Labour Law of the PRC () promulgated by the
SCNPC on July 5, 1994 and last amended and implemented on December 29, 2018, the Labour
Contract Law of the PRC () promulgated by the SCNPC on June
29, 2007, last amended on December 28, 2012 and implemented on July 1, 2013 and the
Implementation Regulations of the Labour Contract Law of the PRC ( ʕശɛ͏΍ձ਷௶ਗΥΝ
ૢԷ) promulgated and implemented by the State Council on September 18, 2008, an
employer shall establish and improve labour rules and regulations according to the laws, and shall
strictly comply with the national standards, provide relevant training to its employees, protect their
labour rights and perform its labour obligations. If an employer establishes labour relationship with
an employee, they should enter into a written labour contract. Labour contracts shall be categorised
into fixed-term labour contract, unfixed-term labour contract and labour contract for the completion
of certain work assignments. The wages payable by an employer to its employees shall not be less
than local minimum wage. In addition, an employer must establish and improve the labour safety
and health system, stringently implement national protocols and standards on labour safety and
health, conduct labour safety and health education for employees, so as to prevent accidents in the
labour process and reduce occupational hazards.
Social Insurance
According to the Social Insurance Law of the PRC (),
promulgated by the SCNPC on October 28, 2010 and last amended and implemented on December
29, 2018, and the Provisional Regulations on Collection and Payment of Social Insurance Premiums
(ᎈ൬ᅄᖮᅲБૢԷ), promulgated by the State Council on January 22, 1999 and last
amended and implemented on March 24, 2019, an employer is required to make contributions to
social insurance schemes for its employees, including basic pension insurance, basic medical
insurance, unemployment insurance, maternity insurance and work-related injury insurance. If the
employer fails to make social insurance contributions in full and on time, the social insurance
authorities may demand the employer make payments or supplementary payments for the unpaid
social insurance premium within a prescribed time limit together with a 0.05% surcharge of the
unpaid social insurance premium from the due date. If the payment is not made within such time
limit, the relevant administrative authorities will impose a fine ranging from one to three times the
total outstanding amount.
Housing Provident Fund
According to the Regulations on the Administration of Housing Provident Fund (ʮጐ
၍ଣૢԷ) promulgated by the State Council on April 3, 1994 and last amended and
implemented on March 24, 2019, employers are required to make contributions to housing
provident funds for their employees. Any entity fails to make payment of housing provident fund
REGULATORY OVERVIEW
–1 1 5–


--- page 126 ---
within the time limit or has shortfall in payment of housing provident fund will be ordered to make
the payment or makeup the shortfall within the prescribed time limit, otherwise, the housing
provident management center is entitled to apply for compulsory enforcement with the People’s
Court.
LA WS AND REGULATIONS RELATING TO OVERSEAS LISTING
On February 17, 2023, with the approval of the State Council, the CSRC promulgated the Trial
Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies
() (the “ Trial Measures ”) and five relevant
guidelines, which came into force on March 31, 2023. According to the Trial Measures, (i) PRC
domestic companies that seek to offer or list securities overseas, both directly and indirectly, should
fulfill the filing procedure and submit relevant information to the CSRC; if a domestic company
fails to complete the filing procedure or conceals any material fact or falsifies any major content
in its filing documents, it may be subject to administrative penalties, such as order to rectify,
warnings and fines, and its controlling shareholders, de facto controllers, the person directly in
charge and other directly liable persons may also be subject to administrative penalties, such as
warnings and fines; (ii) direct overseas offering and listing by domestic companies refers to the
overseas offering and listing of the companies limited by shares registered and established in the
PRC; and (iii) any companies limited by shares registered and established in the PRC are required
to file with the CSRC within three business days after their application document of overseas listing
is submitted. Failure to complete the filing under the Trial Measures may subject a PRC domestic
company to a rectification order issued by the CSRC, warnings, and a fine of RMB1 million to
RMB10 million.
Besides, domestic companies seeking to overseas offering and listing shall strictly comply
with the laws, administrative regulations and relevant provisions of the PRC regulatory authorities
on foreign investment, State-owned asset management, industry regulation, overseas investment,
cybersecurity, data security, etc., shall not disrupt domestic market order, and shall not harm
national interests, public interests and the legitimate rights and interests of domestic investors. A
domestic company that conducts overseas offering and listing shall (i) formulate its articles of
association, improve its internal control system and standardize its corporate governance, financial
affairs and accounting activities in accordance with the PRC Company Law, the PRC Accounting
Law and other PRC laws, administrative regulations and applicable provisions; (ii) abide by the
legal system of the PRC on confidentiality and take necessary measures to fulfil its confidentiality
responsibility, shall not divulge any state secret or the work secrets of state organs, and shall also
comply with laws, administrative regulations and the relevant provisions of the PRC if it is involved
in the overseas provision of personal information and important data. In addition, the Trial
Measures also list out the circumstances where overseas offering and listing is explicitly prohibited,
including: (i) such securities offering and listing is explicitly prohibited by specific PRC laws and
regulations; (ii) that constitutes a threat to or endangers national security; (iii) the PRC domestic
company, or its controlling shareholder(s) and de facto controller(s), have committed relevant
crimes such as corruption, bribery, misappropriation of property or undermining the order of the
socialist market economy during the last three years; (iv) the domestic company is currently under
investigations for alleged 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 the equity
held by the controlling shareholder(s) or by other shareholder(s) that are controlled by the
controlling shareholder(s) and/or de facto controller(s).
The CSRC and other three relevant government authorities jointly promulgated the Provisions
on Strengthening the Confidentiality and Archives Administration of Overseas Securities Offering
and Listing by Domestic Companies (၍
) (the “ Provision on Confidentiality ”) on February 24, 2023, and came into effect
on March 31, 2023. Pursuant to the Provision on Confidentiality, when a domestic company
provides or publicly discloses the documents and materials involving state secrets and working
secrets of state organs to the relevant securities companies, securities service institutions, overseas
REGULATORY OVERVIEW
–1 1 6–


--- page 127 ---
regulatory authorities and other entities and individuals, or provides or publicly discloses such the
documents and materials through its overseas listing subjects, it shall report to the competent
department with the examination and approval authority for approval, and file with the same level
secrecy administration department. Domestic companies providing accounting archives or copies
thereof to entities and individuals such as securities companies, securities service institutions and
overseas regulatory authorities shall perform the relevant procedures according to relevant
regulations. The working papers formed within the territory of the PRC by the securities companies
and securities service institutions that provide related services for the overseas offering and listing
of domestic enterprises shall be kept within the territory of the PRC. Cross-border transferring of
such working papers shall go through the examination and approval formalities in accordance with
the relevant regulations.
LA WS AND REGULATIONS RELATING TO FULL CIRCULATION OF H SHARES
On November 14, 2019, CSRC promulgated the Guidance for the Application for the “Full
Circulation” of the Domestic Unlisted Shares of H-share Companies ( H΅͡
ሗ“ஷ”ˏ) (the “ Guidance ”), which came into effect on the same day and further
amended on August 10, 2023. According to the Guidance, shareholders of domestic unlisted shares
may determine by themselves through consultation the amount and proportion of shares, for which
an application will be filed for circulation, provided that the requirements laid down in the relevant
laws and regulations and set out in the policies for state-owned asset administration, foreign
investment and industry regulation are met, and the corresponding H-share listed company may be
entrusted to file with the CSRC. An unlisted domestic joint stock company may file with the CSRC
for “full circulation” at the time of its initial public offering and listing overseas. After domestic
unlisted shares are listed and circulated on the Stock Exchange, they may not be transferred back
to China.
LATEST OUTLOOK ON U.S. TARIFF
As of the Latest Practicable Date, many semiconductor products from China are subject to, at
a minimum, a 80% tariff rate, inclusive of a 50% tariff under Section 301 of the Trade Act of 1974
(the “ Section 301 Tariff ”), a 20% Fentanyl-related tariff under the International Economic
Emergency Powers Act (“ IEEPA”), which was lowered to 10% as of November 1, 2025, and a 10%
reciprocal tariff, also imposed pursuant to IEEPA. The U.S. Department of Commerce is currently
conducting a separate investigation on imports of semiconductors and semiconductor derivative
articles, which may result in the imposition of additional duties on semiconductor imports. Due to
the volatility and uncertainty of the Trump administration’s tariff policies, it is difficult for us to
predict the magnitude and impact of any changes in U.S. tariffs on the SiC power semiconductor
device industry chain. Nonetheless, the continuously expanding market share of Chinese power
device manufacturers within the SiC power semiconductor device industry chain is fundamentally
underpinned by the comprehensive competitive advantage built upon performance parity,
synergistic ecosystem, inherent cost advantages, and high customer stickiness.
REGULATORY OVERVIEW
–1 1 7–


--- page 128 ---
OVERVIEW
Tracing back to 2011, our Company was founded by Dr. Zhao, a renowned scientist in the
SiC-related field. Under the leadership of Dr. Zhao, after more than a decade of development, we
have now become a global leader in the silicon carbide (SiC) epitaxy industry. According to CIC,
since 2023, we have been the world’s largest SiC epitaxial foundry by annual sales volume. In 2024,
our market share in the global SiC epitaxy wafer market exceeded 30%.
MILESTONES
The following is a summary of our key business development milestones since the
commencement of our business:
Time Milestone
2011 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Company was established in Xiamen, Fujian
2012 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We began to supply 4-inch SiC epitaxial wafers to global customers
2014 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We began to supply 6-inch SiC epitaxial wafers to global customers
2015 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We developed BPD-free technology
2016 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We developed the technology to suppress stacking faults (IGSFs) in
SiC epitaxy
2019 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our new 6-inch SiC epitaxy production site started operation
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We achieved a revenue exceeding RMB100 million and became
profitable
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We recorded a revenue exceeding RMB400 million and net profit
exceeding RMB100 million
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We became the world’s largest SiC epitaxial foundry by annual sales
volume
We led the writing and establishment of the world’s first and only SEMI
standard for SiC epitaxy, titled SEMI M092-0423 Specification for
4H-SiC Homo-epitaxial Wafer
We began to supply 8-inch SiC epitaxial wafers to global customers
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We completed our pre-ipo financing with funds raised of more than
RMB1 billion
OUR MAJOR SUBSIDIARY
On May 31, 2024, Epiworld Materials was established in the PRC with limited liability and
has been primarily engaged in the production process and sales of silicon carbide (4H-SiC) epitaxial
wafers. There has been no change of shareholding in Epiworld Materials since its establishment and
up to the date of this Prospectus.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 1 8–


--- page 129 ---
MAJOR SHAREHOLDING CHANGES IN THE COMPANY
On March 31, 2011, our Company was established as a limited liability company in the PRC
with an initial registered capital of RMB142,180,000, which was full paid up by May 2011. Upon
establishment, our Company was owned by Dr. Zhao as to 50% and Xiamen Taicheng Group Co.,
Ltd. (ʮ̡), an Independent Third Party, as to the remaining 50%. Dr. Zhao
subscribed his shares in the Company by way of injection of the technology relating to Bipolar
Junction Transistor into the Company. By October 2013, shares of our Company were held by Dr.
Zhao, Mr. Tang Xiuhao ( ಷӸႴ), an Independent Third Party, Xike Zhongheng and Mr. Li Qinghua
(ҽᅅശ) as to 46.47%, 33.5%, 15.89% and 4.14%, respectively. Mr. Li Qinghua ( ҽᅅശ)i so u r
former Director and a cousin of Dr. Zhao, and Xike Zhongheng is our substantial shareholder under
the Listing Rules. In March 2015, Mr. Tang Xiuhao transferred all his Shares in the Company to his
son, Mr. Tang Ganlin ( ಷ͚ᎌ). In April 2018, due to personal financing demand, Mr. Tang Ganlin
ceased to be a Shareholder of the Company by way of transferring all his Shares in the Company
to other then existing Shareholders of the Company. For details, please refer to “— Pre-IPO
Investments — Overview” below.
As one of our early stage business partners and in view of our business prospects, Mr. Zhang
Minghua (ശ), an Independent Third Party, acquired 1.97% of the total issued share capital of
our Company in December 2014 at a total consideration of RMB10 million by way of capital
injection. In recognition of his long-term commitment to our business cooperation, Dr. Zhao
transferred 0.25% of the shares in the share capital of our Company to Mr. Zhang Minghua at nil
consideration in January 2020. As of the date of this Prospectus, Mr. Zhang Minhua holds 1.4886%
of the shares in the share capital of our Company. In May 2016, Mr. Chen Yinfei (࠭ࠪour
former Director, acquired 2.56% of the shares in the share capital of our Company at a consideration
of RMB20 million by way of capital injection. In addition, Mr. Li Qinghua ( ҽᅅശ) further invested
in our Company by way of equity transfer from one of our Pre-IPO Investors at a consideration of
RMB113.52 million in January 2021 and his shareholding in our Company was increased to 7.69%
by then.
After years of development, on May 25, 2023, our Company was converted into a joint stock
company with limited liability and our registered share capital was increased to RMB360 million.
Before and after the conversion, we completed several rounds of Pre-IPO Investments through
capital injection and equity transfers between our Pre-IPO Investors. For details, please refer to “—
Pre-IPO Investments” below.
ACQUISITIONS, MERGERS AND DISPOSALS
Throughout the Track Record Period and up to the Latest Practicable Date, we did not conduct
any acquisitions, mergers or disposals.
EMPLOYEE SHAREHOLDING PLATFORM
In recognition of the contributions of our employees and to incentivize them to further
promote our development, Epiworld Core was established as our employee shareholding platform
in the PRC in December 2020. As of the Latest Practicable Date, all of the share awards under the
platform have been granted and vested, and as a result, the grantees held the partnership interest in
our employee shareholding platform, subject to terms and conditions of our share incentive scheme.
As of the Latest Practicable Date, there is no outstanding options or share awards under our share
incentive scheme.
There are 23 limited partners in Epiworld Core as of the Latest Practicable Date and Mr. Chen
Zhenhe (ձ), who is interested in Epiworld Core as to approximately 1.50% and the
brother-in-law of Dr. Zhao, has been the general partner of Epiworld Core since its establishment.
As of the Latest Practicable Date, Dr. Feng Gan ( ඹ଑), Dr. Sun Y ongqiang (͑੶), Mr. Peng
Xinghua ( ుጳശ) and Dr. Hong Tu (ྡ), all being members of our senior management, are
interested in Epiworld Core as limited partners as to approximately 53.23%, 7.51%, 5.01% and
3.13%, respectively. In addition, Mr. Qian Weining ( ፺ሊྐྵ) and Mr. Li Kaixi ( ҽ௱Ҏ), being our
Supervisors, are interested in Epiworld Core as limited partners as to approximately 3.01% and
2.25%, respectively. Save as disclosed in this section headed “Employee Shareholding Platform”,
there are no connected persons who are interested in Epiworld Core.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
–1 1 9–


--- page 130 ---
PRE-IPO INVESTMENTS
Overview
We have undergone the following rounds of Pre-IPO Investments, details of which are set forth below.
Name of Shareholder Date of agreement
Date of last payment
of consideration
Total
consideration
Cost per
Share (1)
Discount to the
Offer Price (2)
(RMB) (RMB)
Dangfeng Technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118October 30, 2014 December 3, 2014 10,010,000 2.10 96.88%
December 10, 2015 December 17, 2015 40,000,000 2.10 96.88%
Xiamen Hi-Tech Investment (15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118October 30, 2014 November 13, 2014 5,000,000 2.10 96.88%
December 28, 2020 (3) October 13, 2020 8,771,000 3.68 94.53%
Torch Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118January 5, 2015 January 30, 2015 10,000,000 2.10 96.88%
Hainan Zhentai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118February 2, 2016 February 3, 2016 32,500,000 2.10 96.88%
Xike Zhongheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118April 26, 2018 (4) June 29, 2018 24,800,000 1.58 97.65%
April 24, 2020 May 15, 2020 12,280,000 3.68 94.53%
Puyuan Pengyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118April 26, 2018 (5) July 6, 2018 15,000,000 1.53 97.73%
Xincheng Zhongchuang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118April 26, 2018 (6) October 24, 2018 15,000,000 1.53 97.73%
December 2, 2019 December 2, 2019 7,000,000 1.53 97.73%
April 24, 2020 May 18, 2020 4,297,386 3.68 94.53%
January 4, 2022
(7) January 14, 2022 34,300,000 36.00 46.48%
Ningbo Fuchi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118January 5, 2019 February 15, 2019 35,000,000 3.68 94.53%
Huangshan Saifu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118September 9, 2019 September 12, 2019 40,000,000 3.68 94.53%
Saifu Jinzuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118September 9, 2019 September 12, 2019 10,000,000 3.68 94.53%
Xiamen Jushenghua /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118September 25, 2019 September 27, 2019 25,000,000 3.68 94.53%
Shanghai Tianli /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118September 25, 2019 September 25, 2019 13,234,727 3.68 94.53%
December 2, 2019 December 13, 2019 11,760,378 3.68 94.53%
Huiyou Chuangjia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118January 20, 2020 February 24, 2020 20,000,000 3.68 94.53%
Xiamen Hongyuan, Xiamen Spark and
Xiamen Hongxing (15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
May 26, 2020 (8) April 28, 2020 89,898,498 4.91 92.70%
China Resources Microelectronics /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118July 19, 2020 July 29, 2020 40,000,000 3.68 94.53%
Hubble Technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118October 24, 2020 November 12, 2020 60,000,000 3.68 94.53%
Ningbo Qiaowang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118December 27, 2021 (9) December 30, 2021 60,250,000 25.30 62.39%
Liaoning Haitong and Shanghai Zhezhong /H1118/H1118/H1118/H1118/H1118December 22, 2021 December 23, 2021 100,000,000 31.79 52.74%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 120 –


--- page 131 ---
Name of Shareholder Date of agreement
Date of last payment
of consideration
Total
consideration
Cost per
Share (1)
Discount to the
Offer Price (2)
(RMB) (RMB)
Qingda Runyu (15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118March 16, 2022 January 20, 2022 50,000,000 38.99 42.03%
Qingda Xinsheng, Huzhou Runxu, Ningbo
Fuwurong, Jiadong Wuyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
November 2, 2022 November 28, 2022 102,300,000 41.99 37.57%
Hefei Tiancheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118December 28, 2022 December 29, 2022 100,000,000 55.56 17.40%
Shanghai Minshenshi, Huajin Mingjiade, Huajin
Y uxing, Jiangyin Yinrun, Dongzheng Ruikun /H1118/H1118
June 2023 (11) June 28, 2023 180,000,000 64.78 and
71.38
3.69% and
–
Chantou Juxiang Xinhan, ICBC Investment,
Xiamen Gongrong Industry
and Xiamen Chantou Gongrong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
December 2024
(12) December 31, 2024 1,030,000,000 64.78 3.69%
Qingyue Jingfu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118April 28, 2025 (13) April 28, 2025 39,480,294 49.69 26.12%
Wangrui Hancheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118July 2025 (14) August 13, 2025 120,000,000 49.49 26.42%
Notes:
(1) The cost per Share paid by the Pre-IPO Investors was calculated based on the amount of investment made by the relevant Pre-IPO Investors and the numb er of Shares held by them
immediately before the completion of the Global Offering.
(2) The discount to the Offer Price is calculated based on the fixed Offer Price and the exchange rates as set out in this Prospectus.
(3) The shares were transferred from Xiamen High Tech Entrepreneurship Center Co., Ltd. (ʮ̡), an Independent Third Party.
(4) Tang Ganlin, Wu Jinhe (ئand Chen Yinfei transferred 3.8966%, 0.3143% and 0.9482% equity interests they held in the Company at a consideration of RMB16,712,088,
RMB2,013,588 and RMB6,074,324, respectively, to Xike Zhongheng. Wu Jinhe is one of our Independent Third Parties.
(5) Tang Ganlin, Wu Jinhe and Chen Yinfei transferred 2.2669%, 0.2357% and 0.7111% equity interests they held in the Company at a consideration of RMB8 ,934,066, RMB1,510,191 and
RMB4,555,743, respectively, to Puyuan Pengyuan.
(6) Tang Ganlin, Wu Jinhe and Chen Yinfei transferred 2.2669%, 0.2357% and 0.7111% equity interests they held in the Company at a consideration of RMB8 ,934,066, RMB1,510,191 and
RMB4,555,743, respectively, to Xincheng Zhongchuang.
(7) The shares were transferred from Xiamen Hi-Tech Investment, an Independent Third Party.
(8) The shares were transferred from Longyan Xinsida Technology Co., Ltd. (ʮ̡), an Independent Third Party.
(9) The shares were transferred from Torch Capital, an Independent Third Party.
(10) The increase in the cost per Share was attributed to the increase in the valuation of the Company as a result of a number of milestones in our business development achieved during the
period, in particular (i) we became profitable in 2021, (ii) we recorded a revenue exceeding RMB400 million and net profit exceeding RMB100 million in 2022, and (iii) the supply of
8-inch SiC epitaxial wafers to global customers in 2023.
(11) June 6, 2023 for Shanghai Minshenshi, June 7, 2023 for Huajin Mingjiade and Huajin Y uxing, June 9, 2023 for Jiangyin Yinrun and June 19, 2023 for Don gzheng Ruikun.
(12) December 24, 2024 for Chantou Juxiang Xinhan and ICBC Investment; December 30, 2024 for Xiamen Gonrong Industry and Xiamen Chantou Gongrong
(13) The shares were transferred from Huangshan Saifu and Saifu Jinzuan.
(14) The shares were transferred from Dr. Zhao.
(15) The last payments of consideration for Xiamen Hi-Tech Investment, Xiamen Hongyuan, Xiamen Spark, Xiamen Hongxing and Qingda Runyu were made bef ore the date of the relevant
agreements in order to secure these Pre-IPO Investors’ allocation in the relevant financing rounds.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 121 –


--- page 132 ---
Other Principal Terms of the Pre-IPO Investments
Basis of determination of the valuation
and consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The considerations for each round of the Pre-IPO
Investments were determined based on arm’s length
negotiations amongst the Pre-IPO Investors and our
Group, as applicable after taking into consideration of
the timing of the investments, our valuation when the
investment agreement was entered into, the operation of
our business, the financial performance of our Group,
and the prospects of our business.
Lock-up period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Pursuant to PRC Company Law, Shares issued by our
Company prior to the Global Offering (including those
held by the Pre-IPO Investors) will be subject to a
lock-up period of one year from the Listing Date.
Use of proceeds from the Pre-IPO
Investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
We have utilized the proceeds from the Pre-IPO
Investments for the principal business of our Group,
including but not limited to research and development
activities, the growth and expansion of our Company’s
business and general working capital purposes. As of
the Latest Practicable Date, all of the funds raised from
the Pre-IPO Investments have been utilized. In respect
of the funds raised in December 2024, over 95% of the
funds had been utilized as of the Latest Practicable Date
with appropriately RMB332 million spent on our daily
operation and RMB650 million on repaying bank loans
we borrowed before for our business expansion.
Strategic benefits to our Company
brought by the Pre-IPO Investors /H1118/H1118/H1118
At the time of the relevant Pre-IPO Investments, our
Directors were of the view that our Group could benefit
from the additional funds provided by the Pre-IPO
Investments in our Group and the knowledge and
experience of the Pre-IPO Investors in the
semiconductor industry. The Pre-IPO Investments
demonstrated the Pre-IPO Investors’ confidence in the
operation and development of our Group.
Special Rights of the Pre-IPO Investors
The Pre-IPO Investors were granted certain special rights, including but not limited to
redemption rights, information rights, inspection rights, pre-emptive rights, and anti-dilution rights.
In particular, the Company had granted redemption rights to Mr. Zhang Minghua, Mr. Chen Yinfei,
Mr. Wu Jinhe, Xiamen Hi-Tech Investment, Torch Capital and Dangfeng Technology. Based on the
supplemental agreement dated October 31, 2023 entered into between the Company and certain
Shareholders, all special rights granted to the Shareholders at the time other than Dangfeng
Technology, including their redemption rights, were terminated and will not be reinstated for any
reason or circumstance. In addition, special rights granted to Dangfeng Technology, including
redemption rights, were terminated pursuant to a confirmation letter issued by Dangfeng
Technology in April 2025 and a resolution passed by the Shareholders in March 2025. On April 2,
2025, the Company also entered into a supplemental agreement with the remaining Shareholders
pursuant to which their special rights will be terminated upon Listing. These Shareholders were not
entitled to redemption rights before the date of such supplemental agreement.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 122 –


--- page 133 ---
For details of the accounting treatment of the special rights granted to the Pre-IPO Investors
during the Track Record Period, please refer to note 31 to Appendix I.
Sole Sponsor’s Confirmation
On the basis that (i) the consideration for the Pre-IPO Investment was settled more than 28
clear days before the first filing of the listing application by our Company with the Stock Exchange
or 120 clear days before the commencement of dealings in the H Shares on the Stock Exchange, and
(ii) the existing special rights granted to the Pre-IPO Investors as disclosed in “— Special Rights
of the Pre-IPO Investors” will be terminated upon the Listing, the Sole Sponsor confirms that the
Pre-IPO Investments are in compliance with the Pre-IPO Investment Guidance in Chapter 4.2 of the
Guide for New Listing Applicants issued by the Stock Exchange.
Information of the Pre-IPO Investors
Set forth below are details for each of our Pre-IPO Investors with a shareholding of more than
1% as of the date of this Prospectus. To the best knowledge of our Company and save as disclosed
in this section headed “Information of the Pre-IPO Investors”, all of our Pre-IPO Investors are
Independent Third Parties.
Xike Zhongheng
Xike Zhongheng is a limited partnership established in the PRC on January 7, 2013,
principally engaged in the investments in high-tech industries. The general partner of Xike
Zhongheng is Mr. Su Ping ( ᘽ̻), our non-executive Director, who holds 27.53% of the partnership
interests therein as the ultimate beneficial owner.
There are 20 limited partners in Xike Zhongheng, amongst which i) Ms. Bai Liting ( ͣᘆణ),
our executive Director, ii) Su Ning ( ᘽྐྵ), the sister of Mr. Su Ping ( ᘽ̻), and iii) Qiu Rui (ጶ),
the sister-in-law of Mr. Su Ping, respectively hold 3.78%, 13.24% and 0.59% of partnership
interests therein. None of the other limited partners of Xike Zhongheng hold 30% or more
partnership interests therein, and all of them are individual investors and Independent Third Parties.
Xincheng Zhongchuang
Xincheng Zhongchuang is a limited partnership established in the PRC on July 24, 2017. The
general partner of Xincheng Zhongchuang is Xu Xiyun ( ஢Ҏථ), the spouse of Li Qinghua ( ҽᅅ
ശ). Ms. Xu is also the largest ultimate beneficial owner in Xincheng Zhongchuang, holding 22.19%
of partnership interests therein. There are 19 limited partners in Xincheng Zhongchuang who are
mostly individual investors, amongst which, Ms. Bai Liting ( ͣᘆణ), our executive Director and
Qian Leidan ( ፺ཤʗ), the spouse of the sister of Mr. Su Ping ( ᘽ̻), our non-executive Director,
is respectively interested in 13.21% and 6.31% of partnership interests therein. Save as disclosed
above, the aforementioned entities and individuals are all Independent Third Parties.
Hubble Technology
Hubble Technology, formerly known as Hubble Technology Investment Co., Ltd. (Ҧ
ʮ̡) is a limited liability company established in the PRC on April 23, 2019. Hubble
Technology is a venture capital institution wholly-owned by Huawei Investment & Holding Co.,
Ltd. (ʮ̡), a company focusing on investments in technology and information
technology application innovation.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 123 –


--- page 134 ---
Xiamen Hongyuan, Xiamen Spark and Xiamen Hongxing
Xiamen Hongyuan, Xiamen Spark and Xiamen Hongxing are all limited partnerships
established in the PRC on April 13, 2017, July 9, 2018, and June 4, 2019, respectively. They are
all managed by Shenzhen Zhongnan Hongyuan Private Equity V enture Capital Fund Management
Co., Ltd. (ʮ̡)( “ Shenzhen Hongyuan ”) who holds
2.37%, 9.57% and 1% of partnership interests in Xiamen Hongyuan, Xiamen Spark and Xiamen
Hongxing, respectively. Except for Huang Weimiao (ߴwho holds 98% of partnership
interests in Xiamen Hongxing, none of the other ultimate beneficial owners of each of Xiamen
Hongyuan, Xiamen Spark or Xiamen Hongxing holds more than 20% of partnership interests
therein. Shenzhen Hongyuan is indirectly owned as to 83.33% by Xiamen Zhongnan Hongyuan
Investment Partnership (Limited Partnership) (̾Ⴣҳ༟ΥྫΆุ(Υྫ)) who is in
turn managed and owned as to 60% by Huang Weimiao as its general partner and largest ultimate
beneficial owner. All of the aforementioned entities and individuals are Independent Third Parties.
Hainan Zhentai
Hainan Zhentai is a limited partnership established in the PRC on May 14, 2020. The general
partner is Lin Jianxin (อ) who also holds 99.97% of partnership interests therein. The
remaining 0.03% is held by Zhu Y uejin ( ϡᚔආ). Both Lin Jianxin and Zhu Y uejin are Independent
Third Parties.
China Resources Microelectronics
China Resources Microelectronics is a company ultimately controlled by China Resources
Microelectronics Limited (ʮ̡), a company listed on the Shanghai Stock
Exchange (stock code: 688396.sh, also formerly listed on the Stock Exchange, stock code:
0597.hk). It is mainly engaged in producing and distributing open foundries, integrated circuits,
discrete devices, and other related products.
Huangshan Saifu
Huangshan Saifu is a limited partnership established in the PRC on January 5, 2018. Its
general partner is Huangshan Saifu Fund Management Co., Ltd. (ப΂ʮ̡).
Huangshan Saifu is an investment fund focusing on technology, culture and tourism and innovative
platform and ultimately controlled by Mr. Andrew Y . Y an ( ᎅ⇴) who is the representative of the
managing partner of Tianjin Saifu Shengyuan Investment Management Center (Limited Partnership)
(ᒄబସʩҳ༟၍ଣʕː(Υྫ)). Mr. Andrew Y . Y an ( ᎅ⇴) is an Independent Third Party.
The remaining partnership interests are held by three other limited partners, including i) Shenzhen
Jinsheng Shuoheng V enture Capital Center (L.P .) (᳅၂㛬௴ุҳ༟ʕː(Υྫ)) a private
equity investment company ultimately controlled by Mr. Li Y e ( ҽዊ), an Independent Third Party,
as to 40%, ii) Bank of China Asset Management Co., Ltd (ʮ̡), a company
controlled by Bank of China Limited, a company listed on the Shanghai Stock Exchange and the
Stock Exchange (stock code: 601988.sh and 03988.hk), as to 35% and iii) Huangshan Tourism
Development Co., Ltd. (ʮ̡) (stock code: 600054.sh), a company listed on
the Shanghai Stock Exchange and ultimately controlled by Huangshan City Local Financial
Supervision and Administration Bureau (ፄ္ຖ၍ଣ҅) as to 24%.
Puyuan Pengyuan
Puyuan Pengyuan is a limited partnership established in the PRC on April 25, 2018. The
general partner is Hong Boya (௹ඩ). Besides from Lin Canhuang (ᐆ๯) who holds 50.10% of
partnership interests therein, none of the other seven partners holds more than 25% of partnership
interests in Puyuan Pengyuan. All of Hong Boya (௹ඩ) and the partners are Independent Third
Parties.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 124 –


--- page 135 ---
Ningbo Fuchi
Ningbo Fuchi is a limited partnership established in the PRC on December 19, 2018. Its
general partner is Zhang Lingyi (ᖵ) and there are five limited partners in Ningbo Fuchi with
Chen Y ufan (௓ρɭ) holding 53.71% partnership interests. None of the other limited partners holds
more than 25% of the partnership interests in Ningbo Fuchi. Zhang Lingyi and all limited partners
are our Independent Third Parties.
Xiamen Jushenghua
Xiamen Jushenghua is a limited partnership established in the PRC on September 5, 2019. Its
general partner is Lin Chaojun (ڲwho holds 75.44% of partnership interests therein. The
other two limited partners of Xiamen Jushenghua are Luo Chunquan (ݰ݆and Zheng Zhenkuan
(ᄱ), who hold 23.33% and 1.23% partnership interests respectively. The aforesaid individuals
are all Independent Third Parties.
Shanghai Tianli
Shanghai Tianli is a limited partnership established in the PRC on August 30, 2019, and is
principally engaged in investment focusing on semi-conductor sector. Shanghai Tianli’s general
partner and largest ultimate beneficial owner is Lianyungang Carbon Silicon No. 1 V enture Capital
Partnership Enterprise (Limited Partnership) ( ஹථಥ၁ᾼɓ໮௴ุҳ༟ΥྫΆุ(Υྫ))
(“Lianyungang Carbon Silicon ”) which holds 47.28% of partnership interests therein. The other
two limited partners in Shanghai Tianli are Chongqing Carbon Silicon No. 2 Enterprise
Management Center (Limited Partnership) (ᅅ၁ᾼɚ໮Άุ၍ଣʕː(Υྫ)) (“ Chongqing
Carbon Silicon ”) and Gongqingcheng Tianxing Xinfei V enture Capital Partnership (Limited
Partnership (௴ุҳ༟ΥྫΆุ(Υྫ)) (“ Gongqingcheng Tianxing ”), which
hold 44.68% and 8.03% partnership interests respectively. Both Lianyungang Carbon Silicon and
Chongqing Carbon Silicon are managed by Shanghai Hongjing Private Equity Fund Management
Co., Ltd. (ʮ̡), which is ultimately controlled by Chen Junhua (ࠏ
ശ), an Independent Third Party. Gongqingcheng Tianxing is managed by Shanghai Tianxing Weishi
Private Equity Fund Management Company Limited (ʮ̡), which
is controlled by Bai Ge ( ͣˑ), an Independent Third Party. All of the ultimate beneficial owners
of each of Lianyungang Carbon Silicon, Chongqing Carbon Silicon and Gongqingcheng Tianxing
are individuals who are our Independent Third Parties.
Huiyou Chuangjia
Huiyou Chuangjia is a limited partnership established in the PRC on May 31, 2017. Its general
partner is Shenzhen Huiyou Private Equity Fund Management Co., Ltd (ږ
ʮ̡), a limited liability company controlled by Y ang Longzhong (׀Mr. Y ang is
also the second largest ultimate beneficial owner in Huiyou Chuangjia, holding 28.41% of
partnership interests therein. The largest limited partner of Huiyou Chuangjia is Yingfu Taike
National Emerging Industry V enture Investment Guidance Fund (L.P .) (อጳପุ௴ุ
ږ(Υྫ)) which holds 31.82% of partnership interests and is under the control of
Yingfu Taike V enture Capital Company Limited (ʮ̡), a private equity
investment company with assets under management of more than RMB7 billion. All of the
aforementioned entities, individuals and other ultimate beneficial owners of Huiyou Chuangjia are
all Independent Third Parties.
Dangfeng Technology
Dangfeng Technology is a limited liability company established in the PRC on November 21,
2014 and is owned as to 64.05% by Xiamen Dangfeng Investment Management Co., Ltd. (̹
ʮ̡), which is in turn owned as to 55% by Wang Y ucai ( ˮԃʑ) and as to 45%
Mr. Wang Y aoyi ( ˮᘴᖵ), both being our Independent Third Parties. None of the other ultimate
beneficial owners of Dangfeng Technology is interested in it as to more than 20%, who are also our
Independent Third Parties.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 125 –


--- page 136 ---
Xiamen Hi-Tech Investment and Torch Capital
Xiamen Hi-Tech Investment and Torch Capital are companies established in the PRC on
March 11, 2013 and April 5, 2004, respectively. Xiamen Hi-Tech Investment is wholly owned by
Xiamen High Tech Entrepreneurship Center Co., Ltd. (ʮ̡). Xiamen
High Tech Entrepreneurship Center Co., Ltd. (ʮ̡) and Torch Capital
are both wholly owned by Xiamen Torch Group Co., Ltd. (ʮ̡).
Chantou Juxiang Xinhan, Xiamen Gongrong Industry, Xiamen Chantou Gongrong and ICBC
Investment
Chantou Juxiang Xinhan, Xiamen Gongrong Industry and Xiamen Chantou Gongrong are
limited partnerships established in the PRC on December 20, 2024, December 16, 2024, and
December 16, 2024 respectively. The general partner of Chantou Juxiang Xinhan is Xiamen
Production Investment Xinyuan Technology Investment Co., Ltd. (ʮ
̡)( “Xinyuan Technology ”), a company wholly owned by Xiamen Industrial Investment Co., Ltd.
(ʮ̡)( “ Xiamen Chantou ”) which is indirectly wholly owned by Xiamen
Municipal Finance Bureau (҅). Except for Xiamen Chantou, Xiamen Xiang’an
Investment Promotion Group Co., Ltd. (ʮ̡) and Xiamen Torch Industry
Equity Investment Management Co., Ltd. (ʮ̡) each holding
27.78% of partnership interests in Chantou Juxiang Xinhan and Fujian Leading Industrial Equity
Investment Fund Partnership (Limited Partnership) (ΥྫΆุ(Υ
ྫ)) holding 16.67% of partnership interests in Chantou Juxiang Xinhan, none of the limited
partners holds more than 30% of partnership interests in Chantou Juxiang Xinhan. The general
partners of Xiamen Gongrong Industry and Xiamen Chantou Gongrong are Xinyuan Technology
and ICBC Capital Management Co., Ltd. (ʮ̡), a company wholly owned by
ICBC Investment, who is also one of our Pre-IPO Investor. None of the limited partners is interested
in Xiamen Gongrong Industry as to more than 30% and all of them are Independent Third Parties
which are state-owned entities or under the control of ICBC Investment. ICBC Investment is
interested in Xiamen Chantou Gongrong as to 69.95% as a limited partner and all of the other
limited partners of Xiamen Chantou Gongrong are Independent Third Parties which are state-owned
entities or under the control of ICBC Investment.
ICBC Investment is a company with limited liability established in the PRC. It is wholly
owned by Industrial and Commercial Bank of China Limited (ʮ̡), a
company listed on the Shanghai Stock Exchange (stock code: 601398.sh) and also on the Stock
Exchange (Stock code: 01398.hk).
LISTING ATTEMPT
We submitted our A share listing application to the Shanghai Stock Exchange in December
2023. In January 2024, we received our first comment letter from the Shanghai Stock Exchange
with common comments including but not limited to shareholding changes of the Company, key
products and market competitiveness, top customers and suppliers, financial performance,
employee share incentive scheme, related party transactions and corporate governance. Considering
the time required for completing the vetting process of the A-share listing applications, the
Company’s fundraising demand for business expansion, and financing opportunities in the second
half of 2024, based on our latest corporate development strategies, we withdrew our A share listing
application in June 2024. We have not submitted our responses to the CSRC comment letter before
the withdrawal of our A share listing application. Considering a listing on the Stock Exchange
would (a) provide our Company with an international platform to promote our market awareness
worldwide, (b) gain access to international capital and optimize our capital structure, and (c) further
raise our market profile and help us to attract international talents, we commenced our H share
listing application preparation. Our Directors confirm that, to their best knowledge, there are no
other material matters relating to the A share listing attempt that would affect the Company’s
suitability for listing on the Stock Exchange and are necessary to be disclosed in this Prospectus for
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 126 –


--- page 137 ---
investors to form an informed assessment of our Company. Considering the independent due
diligence conducted by the Sole Sponsor, nothing relating to the A share listing attempt has come
to the attention of the Sole Sponsor which would materially and adversely affect the Company’s
suitability for the Listing.
CAPITALIZATION
Our Company has applied for H-share full circulation to convert certain Unlisted Shares into
H Shares after the Listing. The conversion of Unlisted Shares into H Shares will involve an
aggregate of 97,431,581 Unlisted Shares, representing approximately 24.11% of the total issued
share capital of the Company as of the Latest Practicable Date.
The table below is a summary of the capitalization of our Company as of the date of this
Prospectus and upon completion of the Global Offering (assuming the conversion of Unlisted
Shares into H Shares):
Name of Shareholder
Number of
Unlisted
Shares
held upon
completion of
the Global
Offering
Number of
H Shares
held upon
completion of
the Global
Offering
Number of
Shares held
in total
Approximate
percentage of
shareholding in
the Company as
of the Latest
Practicable
Date
Approximate
percentage of
shareholding in
the Company
upon
completion of
the Global
Offering
Dr. Zhao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886,814,160 29,746,239 116,560,399 28.84% 27.39%
Xike Zhongheng (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,562,018 14,187,340 56,749,358 14.04% 13.33%
Li Qinghua ( ҽᅅശ) /H1118/H1118/H1118/H1118/H1118/H1118/H111820,264,927 6,754,976 27,019,903 6.69% 6.35%
Xincheng Zhongchuang (1) /H1118/H1118/H1118/H111812,377,935 4,125,979 16,503,914 4.08% 3.88%
Hubble Technology (1) /H1118/H1118/H1118/H1118/H1118/H1118/H111812,219,262 4,073,088 16,292,350 4.03% 3.83%
Xiamen Hongyuan (1) /H1118/H1118/H1118/H1118/H1118/H1118/H111812,079,770 4,026,590 16,106,360 3.99% 3.78%
Xiamen Spark (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,526,023 508,674 2,034,697 0.50% 0.48%
Xiamen Hongxing (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118112,926 37,642 150,568 0.04% 0.04%
Epiworld Core /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,976,666 3,992,222 15,968,888 3.95% 3.75%
Hainan Zhentai (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,611,208 3,870,403 15,481,611 3.83% 3.64%
China Resources
Microelectronics (1) /H1118/H1118/H1118/H1118/H1118/H1118/H11188,146,174 2,715,392 10,861,566 2.69% 2.55%
Huangshan Saifu (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,510,574 2,715,392 10,225,966 2.53% 2.40%
Puyuan Pengyuan (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,355,644 2,451,882 9,807,526 2.43% 2.30%
Chen Yinfei (࠭ࠪ)H1118/H1118/H1118/H1118/H1118/H1118/H11187,145,359 2,381,787 9,527,146 2.36% 2.24%
Ningbo Fuchi (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,127,903 2,375,968 9,503,871 2.35% 2.23%
Xiamen Jushenghua (1) /H1118/H1118/H1118/H1118/H1118/H11185,091,359 1,697,120 6,788,479 1.68% 1.60%
Shanghai Tianli (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,090,362 1,696,788 6,787,150 1.68% 1.59%
Zhang Minghua (ശ) /H1118/H1118/H1118/H11184,511,411 1,503,804 6,015,215 1.49% 1.41%
Huiyou Chuangjia (1) /H1118/H1118/H1118/H1118/H1118/H1118/H11184,073,087 1,357,696 5,430,783 1.34% 1.28%
Dangfeng Technology (1) /H1118/H1118/H1118/H1118/H11183,576,252 1,192,084 4,768,336 1.18% 1.12%
Xiamen Hi-Tech Investment (1) /H1118 3,810,858 0 3,810,858 0.94% 0.90%
Torch Capital (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,786,404 595,468 2,381,872 0.59% 0.56%
Chantou Juxiang Xinhan (1) /H1118/H1118/H11182,431,409 347,342 2,778,751 0.69% 0.65%
Xiamen Gongrong Industry (1) /H1118/H11182,778,751 308,750 3,087,501 0.76% 0.73%
Xiamen Chantou Gongrong (1) /H1118/H11182,778,751 308,750 3,087,501 0.76% 0.73%
ICBC Investment (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,252,190 694,688 6,946,878 1.72% 1.63%
Wangrui Hancheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,424,557 0 2,424,557 0.60% 0.57%
Ningbo Qiaowang (2)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,786,276 595,425 2,381,701 0.59% 0.56%
Jiangyin Yinrun (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118735,552 245,184 980,736 0.24% 0.23%
Huzhou Runxu (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118359,054 119,685 478,739 0.12% 0.11%
Saifu Jinzuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,877,643 678,848 2,556,491 0.63% 0.60%
Liaoning Haitong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,415,590 471,863 1,887,453 0.47% 0.44%
Hefei Tiancheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,350,000 450,000 1,800,000 0.45% 0.42%
Qingda Runyu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118961,876 320,625 1,282,501 0.32% 0.30%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 127 –


--- page 138 ---
Name of Shareholder
Number of
Unlisted
Shares
held upon
completion of
the Global
Offering
Number of
H Shares
held upon
completion of
the Global
Offering
Number of
Shares held
in total
Approximate
percentage of
shareholding in
the Company as
of the Latest
Practicable
Date
Approximate
percentage of
shareholding in
the Company
upon
completion of
the Global
Offering
Qingda Xinsheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118753,835 251,279 1,005,114 0.25% 0.24%
Shanghai Zhezhong /H1118/H1118/H1118/H1118/H1118/H1118/H11181,132,472 125,830 1,258,302 0.31% 0.30%
Dongzheng Ruikun /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118630,472 210,158 840,630 0.21% 0.20%
Qingyue Jingfu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118794,500 0 794,500 0.20% 0.19%
Ningbo Fuwurong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118476,357 0 476,357 0.12% 0.11%
Jiadong Wuyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118357,268 119,089 476,357 0.12% 0.11%
Shanghai Minshenshi /H1118/H1118/H1118/H1118/H1118/H1118347,344 115,781 463,125 0.11% 0.11%
Huajin Mingjiade (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,500 30,875 154,375 0.04% 0.04%
Huajin Y uxing (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,500 30,875 154,375 0.04% 0.04%
Other public Shareholders /H1118/H1118/H1118/H1118– 21,492,050 21,492,050 – 5.05%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118306,661,179 118,923,631 425,584,810 100% 100%
Notes:
(1) Please see “— Pre-IPO Investments — Information of the Pre-IPO Investors” in this section for details.
(2) Ningbo Qiaowang, Huzhou Runxu and Jiangyin Yinrun are all managed by Yinrun (Shanghai) Private Equity Fund
Management Co., Ltd. ( ვᆗ(ɪऎ)ʮ̡).
(3) Huajin Mingjiade and Huajin Y uxing are both managed by Ningbo Huajin Weiran Private Equity Fund Management
Co., Ltd. (ʮ̡).
PUBLIC FLOAT
Following the conversion of Unlisted Shares into H Shares and upon completion of the Global
Offering, (i) Dr. Zhao, our Single Largest Shareholder and executive Director, (ii) Xike Zhongheng,
our substantial shareholder, and (iii) Li Qinghua and Xincheng Zhongchuang, will be deemed as our
core connected persons and a total of 216,833,574 Shares held by them, representing 50.95% of our
total issued Shares, will not be counted towards the public float. Save as disclosed above, all of the
H Shares to be held by our existing Shareholders upon the completion of the Global Offering and
the conversion of Unlisted Shares into H Shares will be counted towards the public float. For
details, please refer to the section heade d “ — Capitalization” above.
To the best knowledge of our Directors, upon the completion of the Global Offering and the
conversion of Unlisted Shares into H Shares, 42,617,047 H Shares are expected to be held by our
existing Shareholders who are not our core connected persons, which will be counted towards the
public float.
Immediately following the completion of the Global Offering and based on the Offer Price,
the expected market capitalization of the class of shares to which the H Shares belong at the time
of Listing will be over HK$30,000,000,000 and pursuant to Rule 8.08 (as amended and replaced by
Rule 19A.13A), the minimum number of H Shares held by the public at the time of Listing as a
percentage of the total number of shares in the class to which H Shares belong will be the higher
of: (i) the percentage that would result in the expected market value of such securities held by the
public to be HK$4,500,000,000 at the time of Listing, and (ii) 10%. Based on the Offer Price, the
minimum prescribed percentage of H Shares must be held by the public at the time of Listing will
be 13.87%. Based on the above, it is expected that immediately following completion of the Global
Offering, the total number of listed H Shares held by the public represents approximately 15.06%
of our total issued Shares upon Listing. Therefore, our Company will be able to meet the minimum
public float requirements under Rule 8.08 (as amended and replaced by Rule 19A.13A) of the
Listing Rules.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 128 –


--- page 139 ---
FREE FLOAT
Rule 19A.13C of the Listing Rules provides that, where a new applicant is a PRC issuer with
no 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 10% 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.
Pursuant to PRC Company Law, all of the Shares issued by our Company prior to the Global
Offering will be subject to a lock-up period of one year from the Listing Date. Therefore, all Shares
held by our existing Shareholders upon the Listing shall not be counted towards the free float. In
addition, the cornerstone investor has agreed to a lock-up period of 18 months following the Listing
Date. As such, H Shares held by the cornerstone investor upon the Listing shall not be counted
towards the free float of the H Shares of the Company at the time of Listing. Based on the Offer
Price and assuming the maximum allocation of Offer Shares of 50% to the cornerstone placing
tranche permissible under the Listing Rules, the portion of H Shares for which Listing is sought that
is 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 (a) represents 2.69% of the total number
of issued shares in the class to which H Shares belong at the time of Listing (excluding treasury
shares), and (b) have an expected market value at the time of Listing of HK$871,922,523.
Therefore, our Company can satisfy the free float requirement under Rule 19A.13C of the Listing
Rules.
SHAREHOLDING AND CORPORATE STRUCTURE IMMEDIATELY PRIOR TO THE
COMPLETION OF THE GLOBAL OFFERING
The following chart sets forth our Group’s simplified shareholding and corporate structure
immediately prior to the completion of the Global Offering:
28.84%
Dr. Zhao
14.04% 3.95% 53.16%
Other Pre-IPO InvestorsEpiworld Core(1)
100% 100% 100%
100%
Our Company
Epiworld MaterialsEpiworld Hong Kong Epiworld Singapore
Epiworld Malaysia
Xike Zhongheng
Note:
(1) Please see “— Employee Shareholding Platform” in this section for details.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 129 –


--- page 140 ---
SHAREHOLDING AND CORPORATE STRUCTURE IMMEDIATELY AFTER THE
COMPLETION OF THE GLOBAL OFFERING
The following chart sets forth our Group’s simplified shareholding and corporate structure
immediately after the completion of the Global Offering:
Dr. Zhao Other Public Shareholders
27.39% 13.33% 3.75% 50.48% 5.05%
Other Pre-IPO InvestorsEpiworld Core(1)Xike Zhongheng
100% 100% 100%
100%
Our Company
Epiworld MaterialsEpiworld Hong Kong Epiworld Singapore
Epiworld Malaysia
Note:
(1) Please see notes under “— Shareholding and Corporate Structure Immediately Prior to the Completion of the Global
Offering” in this section for details.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 130 –


--- page 141 ---
OVERVIEW
Who we are
We are a global leader in the silicon carbide (SiC) epitaxy industry. According to CIC, since
2023, we have been the world’s largest SiC epitaxial foundry by annual sales volume, with a market
share exceeding 30% in 2024.
Commercial Success
599,700
SiC epitaxial wafers delivered during the Track
Record Period
4/5    8/10
Choice of world’s top power
device providers4
Net Profits
of RMB127.5m, RMB107.5m, and RMB165.1m
in 2022, 2023 and 2024, respectively5
Market Leadership
Largest
World’s largest SiC epitaxial foundry1
First
in the commercialization of 8-inch SiC
epitaxial wafer in the open market2
Leader
of setting industry standards3
Notes:
1. According to CIC, since 2023, we have been the world’s largest SiC epitaxial foundry by annual sales volume.
2. We were the first in the world to achieve large-scale commercial supply of 8-inch SiC epitaxial wafers, according to
CIC.
3. We led the writing and establishment of the world’s first and only Semiconductor Equipment and Materials
International (SEMI) industry standard for SiC epitaxy.
4. Four of the world’s top five SiC power device providers and eight of the top ten power device providers, by volume,
are our customers, according to CIC.
5. In addition, we recorded net profits of RMB118.4 million and RMB21.1 million for the nine months ended September
30, 2024 and 2025, respectively; and adjusted net profits (Non-IFRS measure) of RMB171.9 million, RMB383.8
million, RMB323.5 million, RMB263.4 million and RMB163.3 million in 2022, 2023 and 2024 and for the nine
months ended September 30, 2024 and 2025, respectively.
6. We operate within a specialized segment of the broader global power semiconductor market. Given the complexity,
vast scale, and diverse range of participants in the global power semiconductor value chain, our share of the overall
market remains relatively limited.
Our deep knowledge of SiC epitaxy technology enables us to stay at the frontline of the SiC
epitaxy industry and provide high quality and reliable products to our customers. We were the first
in the world to achieve large-scale commercial supply of 8-inch SiC epitaxial wafers and the first
in China to commercialize and mass-produce 3-inch, 4-inch, 6-inch, and 8-inch SiC epitaxial
wafers. We led the writing and establishment of the world’s first and only Semiconductor
Equipment and Materials International (SEMI) industry standard for SiC epitaxy. In 2024, our
cumulative sales, combining sales under Turnkey and Consign models, exceeded 164,000 SiC
epitaxial wafers. During the Track Record Period, we have delivered a total of over 599,700 SiC
epitaxial wafers.
During the Track Record Period, we had 134 customers. Our customers included four of the
world’s top five SiC power device providers and eight of the top ten power device providers,
according to CIC. SiC power devices fabricated using our epitaxial wafers exhibit stable
performance in high-temperature and high-power use. Our customers utilize our SiC epitaxy wafers
to manufacture their products, typically power devices, for a wide range of downstream industrial
applications, such as EVs, charging infrastructure, renewable energy, ESS, as well as emerging
applications such as home appliances, AI computing power and data centers, smart grids, and
eVTOL. For example, our products can be adopted in EVs to enable smaller, lighter and more
power-efficient devices such as 800V powertrains, particularly in inverters and converters. This
BUSINESS
– 131 –


--- page 142 ---
application allows high-voltage operations with minimal energy loss for EVs, which translate into
longer range, faster charging and reduced cooling demands. During the Track Record Period, we
acquired new customers primarily through active market engagement efforts, including
participation in industry exhibitions and academic conferences, as well as through customer
referrals. Our technical expertise, large production capacity, reliable quality control procedure,
consistent delivery, and reliable customer services have earned us long-term recognition and loyalty
from customers. These qualities not only strengthen customer retention but also provide us with
unique growth opportunities.
Our founder, Dr. Zhao Jianhui, is a renowned scientist with over 35 years of dedicated R&D
experience in SiC technology development. He is the first scientist elected as an IEEE Fellow based
on significant contributions to the R&D and application of SiC technologies. The expertise of Dr.
Zhao and our R&D team formed the core of our technological competitiveness. We successfully
developed a proprietary platform for SiC epitaxy, covering the entire epitaxial growth process,
including pre-growth preparation, epitaxial growth, cleaning, and inspection.
Among SiC epitaxial foundries worldwide, we achieved reliable performance in terms of
product quality, yield rates and consistency. According to CIC, our products lead the industry in key
performance metrics for SiC epitaxial products, including epitaxial thickness, doping concentration,
epitaxial defect and yield rates. For example, for our Consign service provided to a leading global
SiC device manufacturer, the yield rate of our epitaxial wafer products reached 99%. Our success
is also demonstrated by our profitability and cash flow in the Track Record Period. In 2024, our
revenue, adjusted net profit (Non-IFRS measure) and operating cash flow reached RMB974.3
million, RMB323.5 million and RMB640.6 million, respectively. Since 2024, our financial
performance has been adversely affected by competitive market pressures that reduced our selling
prices, coupled with weakened demand due to a downturn in our downstream customers’ markets.
Industry tailwinds and our opportunities
Amid the global wave of energy revolution, electricity is rapidly replacing traditional fossil
fuels, emerging as the driver for electrification and growth in industrial automotive and renewable
energy sectors. In this transformative shift, SiC serves as the “intelligent heart” of various power
systems utilizing electricity, according to CIC. This is because SiC is a wide-bandgap material with
distinct advantages, including high thermal conductivity, high breakdown field strength, and high
electron saturation velocity. These properties make SiC capable of high efficiency, high speed and
stable power control and processing over a wide temperature range. SiC is replacing silicon (Si) as
the dominant material for power semiconductor devices, poised to lead innovation in the coming
decades, according to CIC.
The SiC industry is inherently evolving toward a highly specialized division of labor, because
of its total addressable market potential and the need for technological excellence and operational
efficiency. As the sector expands, companies are increasingly focusing on their core competencies
within the value chain, fostering a collaborative ecosystem characterized by specialization. In terms
of revenue in the open market, the five largest SiC epitaxial foundries obtained 93.4% of the global
market share in 2024, a concentration significantly outpacing the substrate segment and the power
device segment, where the top five players in each segment hold a market share of approximately
80%, according to CIC. Within this landscape, the SiC epitaxial foundry markets are poised for
significant growth, as power device providers are prioritizing partnerships with third party SiC
epitaxial foundries over in-house production, and such trend is becoming more evident since 2021,
according to CIC. The SiC epitaxial industry features a high industry ceiling, necessitating focused
and specialized competitiveness, as evidenced by the silicon industry where material manufacturing
has concentrated among the top companies. The high concentration in the SiC epitaxial foundry
markets reflects the superior technical complexity and the critical role across the industry value
chain, structurally supporting extensive commercial prospects. While silicon power devices can be
manufactured without epitaxy, SiC power devices must be produced with epitaxial layer, enhancing
our value in the supply chain and competitive edge. We, as a global leader in the SiC epitaxy
industry, are uniquely positioned to capitalize on this inevitable development. By leveraging our
advanced technology, scale advantages, and established reputation in third-party epitaxial wafer
supply, we are strategically equipped to capture emerging market opportunities, strengthen client
partnerships, and solidify our market share in the rapidly advancing SiC era.
BUSINESS
– 132 –


--- page 143 ---
According to CIC, SiC power device market size has reached US$2.6 billion in 2024 and is
expected to grow at a CAGR of 39.9% between 2024 and 2029, reaching US$13.6 billion by 2029.
This positions SiC as a core material for the upcoming energy revolution and the rise of intelligent
industry.
SiC epitaxial wafer is a critical component of the SiC value chain, where its quality is of
paramount importance for downstream applications. The manufacturing process of SiC power
devices differs from that of traditional Si power devices. SiC power devices cannot be fabricated
directly on the SiC substrate; instead, a high-quality single-crystal epitaxial layer must first be
grown on the supportive substrate, and various devices are then manufactured on this epitaxial
layer. By precisely controlling parameters such as epitaxial layer thickness, doping concentration,
and defect density, the quality of the epitaxial wafer can be optimized, improving the yield,
performance, and reliability of end devices. In addition, unlike substrates that typically follow
unified standards, SiC epitaxy requires customization to meet the specific requirements of end-use
applications. The parameters of the delivered epitaxial products must be tailored based on the
specifications of the target devices, including various performance parameters such as voltage and
switching frequency.
However, according to CIC, the production of SiC epitaxial wafers is still facing several
hurdles:
 Defect Control : The epitaxial growth process generates critical defects such as
triangular defects and particle-induced defects. Additionally, existing defects in the
substrate can propagate into the epitaxial layer, if not properly controlled or eliminated,
reducing device yield.
 Uniformity and Consistency : Controlling the thickness and doping uniformity of
large-diameter wafers is difficult, leading to inconsistencies in device performance.
 High Costs : Epitaxial growth requires expensive equipment, costly consumables and
complex processes, making it one of the most costly segments in the value chain and a
key bottleneck for cost reduction.
To address these industry challenges and provide high quality products to our customers, we
have developed targeted proprietary technologies. For details, see “— Our Technologies and R&D
process.”
These innovative technologies have enabled us to produce SiC epitaxial wafers with high
uniformity and low defect density. Additionally, we have developed proprietary multi-layer
epitaxial technology to satisfy customers’ customized needs. Our reliable product quality has
earned recognition globally, including “Perfect Quality Award” from one of the top five global SiC
power device manufacturers.
The SiC epitaxy industry is characterized by recurring businesses and high customer
stickiness due to its stringent requirements, including high technological barriers and reliability
standards, strong demand for uniformity and consistency, long certification cycles, and the
requirements for stable and continuous supply. As a result, industry participants particularly favor
long-term partnerships. For example, according to CIC, the supplier certification cycle in the
automotive industry generally exceeds two years. For over 14 years, we have laser-focused on SiC
epitaxy, leveraging our technological expertise and strict quality control to serve a global customer
base of SiC power device manufacturers. With stable and reliable delivery of high quality wafers,
we have become a trustworthy partner for industry giants and built core competitiveness in the SiC
epitaxy sector.
BUSINESS
– 133 –


--- page 144 ---
Our technological expertise and comprehensive product portfolio
We have established an industry-leading SiC epitaxial growth technology platform. Through
14 years of dedicated R&D, we have mastered a number of know-hows by tuning and optimizing
key parameters of the epitaxial growth process, including growth temperature, reaction pressure,
gas flow rate, C/Si ratio, among others. These advancements have enabled us to modify substrates
of various qualities to achieve high quality surface conditions for optimized epitaxial growth,
minimize defects introduced during epitaxial growth, and enhance the uniformity of epitaxial layer
thickness and doping concentration. As a result, we have achieved stable and scalable production
of high-quality SiC epitaxial wafers.
We have been accumulating technological know-hows that enabled us to design and modify
the key features of epitaxial equipment, which is critical for us to maintain and improve our
competitive edge. Drawing on years of experience and expertise, we have developed a deep
understanding of SiC epitaxial growth systems, including reaction chambers, heating systems, gas
delivery systems, and wafer transfer modules. By optimizing the epitaxy equipment, we achieve
large-scale, stable, long-duration, and high-quality epitaxial wafer production. We are equipped
with a Class 100 cleanroom and advanced wafer inspection equipments. Every product undergoes
100% inspection, ensuring full control over all parameters and delivering consistent quality to our
customers.
Our products cover an extensive range of voltage applications. By offering epitaxial wafers
with various thicknesses and doping concentration, we can support SiC power devices operating
within a voltage range of 300V to 30,000V . According to CIC, in terms of sales volume, our SiC
epitaxial wafers hold a leading position in the industry across the product range corresponding to
mainstream SiC power devices.
We have made significant investments in research and development, with RMB276.0 million
of R&D expenses during the Track Record Period. We have undertaken and participated in multiple
projects focused on SiC-related technological research and production. Furthermore, we have
established collaborative R&D partnerships with leading universities, research institutions, and
enterprises.
Our achievements and financial performance
According to CIC, we have been the world’s largest SiC epitaxial foundry by annual sales
volume since 2023, commanding a market share exceeding 30% in 2024. In 2022, 2023, and 2024,
we achieved annual cumulative sales of 85,366, 200,603 and 164,433 SiC epitaxial wafers,
respectively, through our Turnkey and Consign business models. During the Track Record Period,
our cumulative sales have exceeded 599,700 wafers. Notably, in 2024, our 8-inch SiC epitaxial
wafer sales exceeded 7,400 wafers, a figure that, according to CIC, places us as a frontrunner
globally.
During the Track Record Period, we experienced fluctuations in our revenue since 2024,
amounting to RMB440.7 million, RMB1,142.5 million, RMB 974.3 million, RMB808.3 million and
RMB535.1 million in 2022, 2023 and 2024 and for the nine months ended September 30, 2024 and
2025, respectively. Nonetheless, we have consistently maintained profitability, with net profits of
RMB127.5 million, RMB107.5 million, RMB165.1 million, RMB118.4 million and RMB21.1
million in 2022, 2023, and 2024 and for the nine months ended September 30, 2024 and 2025,
respectively. Our adjusted net profits (Non-IFRS measure) for 2022, 2023 and 2024 and nine
months ended September 30, 2024 and 2025 were RMB171.9 million, RMB383.8 million,
RMB323.5 million, RMB263.4 million and RMB163.3 million, respectively.
BUSINESS
– 134 –


--- page 145 ---
As of September 30, 2025, we held RMB1.8 billion in cash and cash equivalents. Our net
operating cash flow has shown consistent annual growth during the Track Record Period, with
cumulative net operating cash flows of over RMB1.4 billion. In 2022, 2023, and 2024 and for the
nine months ended September 30, 2024 and 2025, our operating cash flows were RMB170.0
million, RMB415.2 million, RMB640.6 million, RMB470.9 million and RMB176.2 million,
respectively. Our strong cash reserve and cash generation provide a solid foundation for the
expansion of our core business and ongoing technological innovation while enhancing our ability
to withstand global macroeconomic and short-term market fluctuations.
OUR COMPETITIVE STRENGTHS
We are a global leader in the SiC epitaxy industry
According to CIC, we have been the world’s largest SiC epitaxial foundry by annual sales
volume since 2023. In 2024, our market share in the global SiC epitaxy wafer market exceeded
30%. We led the writing and establishment of the world’s first and only international SEMI standard
for SiC epitaxy — SEMI M092-0423 Specification for 4H-SiC Homo-epitaxial Wafer.
Focusing on R&D and production of SiC epitaxial materials, we have leveraged our
substantial first-mover advantage to solidify our leadership in the SiC epitaxial wafer field. Our
R&D efforts focused on optimizing technologies for large-size wafers, thick films, high uniformity
in thickness and doping concentration, and low defect density. These initiatives continuously
enhance our core competitiveness and our position as a global industry leader.
Our production efficiency, yield rate, and product quality metrics are among the best in the
industry. According to CIC, our product yield rate reaches over 99%, outperforming industry peers.
Through years of innovation and technological development, we have established ourselves as a
reliable supplier to the world’s leading power device manufacturers, even amidst fierce competition
with domestic and international peers. Our SiC epitaxial wafers feature tighter tolerances in
thickness and doping concentration, greater uniformity in these parameters, and higher yields. As
a result, our key technical specifications of both N-type and P-type SiC epitaxial wafers were able
to achieve market-leading performance metrics.
We possess strong R&D capabilities driving technological advancement in the SiC epitaxy
industry
We have been committed to advancing SiC epitaxial technology. We have established a
comprehensive SiC epitaxy platform, covering the entire process, including pre-growth preparation,
epitaxial growth, cleaning, and inspection.
Our R&D team is spearheaded by four leading scientists in the SiC field, and all have served
in the Company for over 11 years. As of the Latest Practicable Date, we have led the establishment
of one international standard, one national standard, one industry standard, and eight group
standards, reflecting our leadership in the SiC field.
We are exploring advanced and innovative epitaxial growth technologies and addressing key
industry challenges such as high-voltage epitaxial wafer preparation, process optimization for
multi-wafer epitaxial growth equipment, defect control, multi-layer epitaxial growth and trench
filling epitaxial growth. For example, in multi-wafer CVD equipment, we have optimized processes
including in situ etching, buffer layers, and epitaxial layer growth to reduce defect density. By
studying the patterns of doping concentration and thickness variations within a single PM
(preventive maintenance) cycle, as well as the changes in process windows after replacing furnace
components, we have developed precise process adjustment strategies and rapid recovery methods
for each PM cycle. These advancements have enabled large-scale and reliable production of
high-quality, high-efficiency multi-wafer CVD equipment.
BUSINESS
– 135 –


--- page 146 ---
We have industry-leading production capacity that can be expanded in a disciplined manner
to meet the rapidly growing demand from downstream customers
According to CIC, we have industry-leading production capacity that could be scaled in a
disciplined manner. We focus on the production of 6-inch and 8-inch SiC epitaxial wafers, with the
monthly production capacity of our installed equipment exceeding 50,000 wafers as of Latest
Practicable Date. Our capacity closely tracks on customer demand and production schedule. Our
scalable production capability allows us to accelerate market penetration, reduce costs, and enhance
overall competitiveness through economies of scale.
We are able to maintain stable supply of the equipment and substrates required to expand
capacity via our strategic collaborations with our suppliers. We have established long-term
partnerships with domestic and international equipment suppliers, actively participating in
equipment tuning and providing improvement feedback, ensuring a stable supply of market-leading
epitaxial equipment. Additionally, with our validations and endorsements of their products, we have
made it possible for multiple 6-inch and 8-inch substrate suppliers to enter the supply chains of
major domestic and international power device manufacturers. Because of the unique value we
could bring to our suppliers and customers, we have fostered strong, long-term relationships with
both our suppliers and downstream power device manufacturers.
We have established a large customer base by hyper focusing on SiC epitaxy
According to CIC, similarly to the traditional Si industry, which has formed clear division of
labour after years of consolidation, the trend towards a highly specialized division of labor for the
SiC industry is inevitable. The traditional Si industry, after years of evolution, has developed into
a highly specialized and segmented structure with efficiency. We believe the trend of specialization
will continue and further enhance production efficiency in the SiC material industry. We, based on
strategic considerations of technological path and resource allocation, solely focus on the core
epitaxial wafer segment. This approach allows us to effectively avoid competition risks with
downstream customers through value chain collaboration, enabling us to establish a differentiated
path of growth.
We have established a global business network and customer base. During the Track Record
Period, we had 134 customers. In China, our products are welcomed by various industry champions.
Globally, we supply SiC epitaxial wafer products to leaders in semiconductor power devices. Four
of the world’s top five SiC power device providers and eight of the top ten power device providers
are our customers. We are also among the earliest SiC epitaxial foundries in China to obtain
automotive-grade certification IA TF 16949. For over seven years, we have been consistently
supplying 6-inch SiC epitaxial wafers to automotive product manufacturers.
We are led by a dedicated and seasoned leadership team with strategic foresight
Our management team brings extensive industry expertise and a deep understanding of SiC
technology and its applications. Our founder and chairman, Dr. Zhao, has over 35 years of
experience in SiC industry, who is the only SiC epitaxial foundry founder solely committed in
epitaxial wafer manufacturing in China, among all the founders of epitaxial foundries with volume.
He is the first scientist to be elected as an IEEE Fellow for significant contributions to the R&D
and application of SiC semiconductors.
Our core management team is composed of multidisciplinary industry leaders with expertise
in technology R&D, operations and management. They are capable of driving the formulation and
execution of business strategies, full-cycle project management, technology development, capacity
planning, market penetration, supply chain management, and customer value enhancement. Their
expertise lays a solid foundation for our long-term, high-growth trajectory. Driven by a strong
entrepreneurial spirit and a strong sense of mission, our team is committed to transforming the SiC
industry. We are dedicated to R&D and achieving large-scale commercialization of large-size,
thick-film, highly uniform, and low-defect-density SiC epitaxial wafers.
BUSINESS
– 136 –


--- page 147 ---
OUR GROWTH STRATEGIES
Our mission is to use SiC products to benefit humanity and empower a greener future. We
remain committed to innovation, focusing on advancing R&D of SiC epitaxial wafers. We aim to
provide top-quality SiC epitaxial products to global customers and to establish us as a world-class
SiC giant known for technological leadership, operational excellence, and customer satisfaction.
Sustained investment in R&D to strengthen and enhance our technological leadership
We consider R&D as a critical strategic initiative for our future growth. Our focus on the SiC
epitaxy field is unwavering as we continue to address the evolving needs of end customers. Our
customers utilize our SiC epitaxy wafers to manufacture their products, typically power devices, for
a wide range of downstream industrial applications, such as EVs, charging infrastructure, renewable
energy, ESS, as well as emerging applications such as home appliances, AI computing power and
data centers, smart grids, and eVTOL. For example, our products can be adopted in EVs to enable
smaller, lighter and more power-efficient devices such as 800V powertrains, particularly in
inverters and converters. This application allows high-voltage operations with minimal energy loss
for EVs, which translate into longer range, faster charging and reduced cooling demands. Through
targeted R&D efforts, we aim to enhance product performance and overcome technical bottlenecks.
Specifically, we have been pursuing advancements and improvements in technologies such as
composite substrate epitaxy, trench filling epitaxy, multi-layer epitaxy and ultra-thick epitaxy.
These continuous efforts could not only drive our R&D but also could further optimize our cost
structure. We will continue to focus on developing large-size, high-concentration uniformity, and
low-defect-density SiC epitaxial wafers, aiming to deliver high-performance wafers that facilitate
the adoption of SiC in downstream applications.
In particular, we plan to utilize our technological strengths to collaborate closely with
downstream customers in joint R&D projects, maximizing synergies with industry participants. By
maintaining close relationship with customers and understanding their needs, we are well-
positioned to seize opportunities in the rapidly evolving SiC industry. This alignment allows us to
ensure that our product development efforts are in sync with the strategic goals of our customers,
creating shared value. For instance, according to CIC, we were the first company in China to
develop trench filling epitaxy technology for superjunction applications. We have also collaborated
with our customers to advance composite substrate epitaxy technology and consistently delivered
commercialized products. Our multi-layer epitaxy technology has led to consistent, high-volume
sales with one of the top five global SiC power device manufacturers. These innovations not only
reinforced our position as a technological leader but also established us as a key R&D hub for our
downstream partners. Moving forward, we will continue to deepen our collaboration with critical
downstream partners to develop new technologies and establish ourselves as a pioneer in the
industry.
Expand production capacity with discipline to capture market opportunities
We aim to optimize our production capacity in a timely manner based on market conditions,
allowing us to swiftly seize market opportunities while maintaining disciplined capacity expansion.
We are the first in the world to achieve the commercial large-scale supply of 8-inch SiC epitaxial
wafers, having made several breakthroughs in 8-inch SiC epitaxy technology. An increasing number
of 8-inch SiC device manufactures are emerging. Our leadership in 8-inch epitaxy products
positions us to capture an expanding and substantial market share. As of September 30, 2025, we
have established partnerships with 24 companies worldwide for our 8-inch products.
To prepare for the anticipated market demand for 8-inch SiC epitaxial wafers, we plan to
steadily expand our production capacity. This measured expansion will further solidify our
leadership in the 8-inch SiC epitaxy market and allow us to seize emerging opportunities in the
rapidly developing SiC industry. In particular, we are currently assessing market conditions and
customer needs to determine the optimal timing for expanding our SiC epitaxy production capacity
overseas. This approach would enable us to better meet the demand of our international customers
for diversified supply chain, ensuring that we remain a reliable partner in the global market.
BUSINESS
– 137 –


--- page 148 ---
Dual growth engine — penetrate domestic and overseas markets and execute a globalized
strategy
We are committed to sustaining growth in both domestic and overseas markets and enhancing
our market leadership. Through technological innovation and satisfactory customer service, we aim
to further strengthen our collaborations with downstream customers. By aligning with customer
needs, we will support their technology upgrades and market breakthroughs. To enhance customer
satisfaction and loyalty, we plan to establish technical service centers in key regions. These centers
will provide comprehensive, full-lifecycle support, from product development to after-sales service,
ensuring that our customers receive seamless assistance.
With 14 years of experience in R&D, mass production and building customer relationships, we
have been a leading SiC epitaxial foundry recognized by global industry leaders. We will continue
to expand our global sales network for SiC epitaxial wafers, foster partnerships with overseas
collaborators, and work closely with top global SiC power device manufacturers to promote the
application of our products and technologies globally.
By continuously enhancing our R&D and innovation capabilities, we seek to strengthen
customer engagement and loyalty, solidify our competitive edge in the global SiC epitaxy market,
and inject momentum into the fast development of the SiC industry.
Enhance and upgrade existing product portfolio to deliver solutions with superior
performance and enhanced cost efficiency
To grasp market opportunities and drive innovation, we will closely monitor the iterations of
downstream application scenarios and industry development, ensuring timely upgrades of our
existing product portfolio. Specifically, we will adapt to the evolving needs of downstream
customers by improving and optimizing our current product specifications. This includes
developing SiC epitaxial wafers with larger sizes, increased thickness, improved uniformity, and
fewer defects, providing customers with a product portfolio featured enhanced performance and
high reliability.
In addition, we will continue to refine the manufacturing processes and scale up production
with discipline. By building production facilities for SiC epitaxial wafers with high levels of
automation and optimally designed spatial layouts, we seek to further optimize the cost structure of
production. Ultimately, our goal is to deliver highly competitive and cost-effective epitaxial wafers
to our customers.
Attract top talents to enhance our multi-dimensional talent pool
In the technology-driven SiC epitaxy industry, building a strong and professional R&D team
is the key for maintaining a technological edge. To this end, we seek to align the career development
plans of core R&D personnel with the Company’s long-term goals. By leveraging diverse
recruitment channels, we seek to bring accomplished graduates and research talents to our R&D
team. We are committed to fostering a professional, innovative R&D team with a global perspective,
providing reliable talent support for continuous innovation and market expansion in the SiC epitaxy
industry.
In addition, for our strategic goals, we plan to prioritize the recruitment of key talent for R&D,
production, quality control, and management functions. Our aim is to build a highly efficient and
collaborative professional team that strengthens internal coordination and ensures the smooth
operation of all departments.
By cultivating an efficient, professional, and stable workforce, we seek to enhance the
Company’s overall competitiveness, laying a solid foundation for sustainable development and
enabling us to thrive in a dynamic market landscape.
BUSINESS
– 138 –


--- page 149 ---
OUR PRODUCTS AND BUSINESS MODELS
Overview
We are a global leader in providing silicon carbide (SiC) epitaxial wafers, the centerpiece
materials for semiconductors with wide-bandgap. We have been primarily engaged in the research
and development, mass production and sales of SiC epitaxial wafers. SiC epitaxial wafers offer a
multitude of advantages over traditional Si wafers, including but not limited to enhanced
temperature stability, higher breakdown voltage, and superior thermal conductivity. These unique
properties make SiC wafers a key enabler of various applications.
According to CIC, we are the first company in China to mass-produce and commercialize a
comprehensive set of various sizes of SiC epitaxial wafers, including 3-inch, 4-inch, 6-inch and
8-inch SiC epitaxial wafers. During the Track Record Period, we have delivered an aggregate of
over 599,700 of SiC epitaxial wafers, making us one of the largest SiC epitaxial foundries globally,
according to CIC. As of the Latest Practicable Date, we supply SiC epitaxial wafers to eight out of
the ten largest power device manufacturers globally. To address the different needs of our
customers, we offer Turnkey and Consign business models, both of which enable our customers to
rely on our cumulative expertise in the production of SiC epitaxial wafers. For details, see “— Our
Business Models.”
SiC epitaxial wafers are critical for manufacturing high-performance semiconductor devices,
offering superior efficiency and thermal conductivity compared to traditional Si wafers. Our
customers utilize our SiC epitaxy wafers to manufacture their products, typically power devices, for
a wide range of downstream industrial applications, such as EVs, charging infrastructure, renewable
energy, ESS, as well as emerging applications such as home appliances, AI computing power and
data centers, smart grids, and eVTOL. For example, our products can be adopted in EVs to enable
smaller, lighter and more power-efficient devices such as 800V powertrains, particularly in
inverters and converters. This application allows high-voltage operations with minimal energy loss
for EVs, which translate into longer range, faster charging and reduced cooling demands. For
details, see “Industry Overview.”
Our Products — SiC epitaxial wafers
According to CIC, we held the largest SiC epitaxial wafers production capacity worldwide. On
the semiconductor supply chain, SiC epitaxial wafers is the cornerstone for bridging innovative raw
material with high-performance devices. The SiC industry chain consists of substrates, epitaxy,
devices, and applications. Epitaxial wafers grow on substrates and serve as the material platform for
devices to be manufactured. The epitaxial layer is a thin layer of SiC crystal grown on a SiC
substrate. The following graphic illustrates the key segments of the SiC supply chain.
SiC Substrate
(Conductive) Power Devices
Industrial Applications,
Consumer Electronics,
EVs, among others.
Upstream Midstream Downstream
EpitaxySubstrate Devices Applications
Design, Manufacturing,
Packaging and Testing
SiC Supply Chain
SiC Homoepitaxy
BUSINESS
– 139 –


--- page 150 ---
The quality of the epitaxial layers — its thickness, doping concentration and defect density —
determines the performance, efficiency and reliability of SiC power devices. As a result, SiC
epitaxial wafers require highly specialized process to achieve the precise structure needed for
semiconductor devices to operate at high voltages, frequencies and temperatures. We have utilized
the high-temperature chemical vapor deposition (CVD) method to produce SiC epitaxial wafers
with consistent and high quality that could meet the demanding technical requirements of
high-performance devices.
The following photo shows samples of our SiC epitaxial wafers.
We offer various sizes of SiC epitaxial wafers, including 4-inch, 6-inch and 8-inch. SiC wafers
are typically categorized by size, primarily because the size directly impacts manufacturing
efficiency, yield, and production scalability, with larger wafers typically delivering lower cost.
During the Track Record Period, 6-inch SiC epitaxial wafers made up the majority of our sales. We
also have a first-mover advantage as the first company in the world to mass-produce and
commercially supply 8-inch SiC epitaxial wafers in the open market, according to CIC. Although
6-inch wafers currently dominate the market and is expected to grow continuously, the market size
for 8-inch SiC wafers is expected to expand significantly. We continue to invest in the R&D and
production of both 6-inch to 8-inch wafers, and expect 8-inch wafers to account for a growing share
of our sales.
The following table sets forth a breakdown of our sales volume of SiC epitaxial wafers by
sizes for the years and periods indicated.
Y ear Ended December 31,
Nine Months Ended
September 30,
2022 2023 2024 2024 2025
Sales
volume %
Sales
volume %
Sales
volume %
Sales
volume %
Sales
volume %
(pieces of wafers, except for percentages)
Sales volume
3-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– –– –– –– 2 0 . 0
4-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,733 4.4 610 0.3 383 0.2 318 0.2 1,328 0.9
6-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881,633 95.6 199,708 99.6 156,584 95.2 126,648 95.2 137,184 91.9
8-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 285 0.1 7,466 4.5 6,057 4.6 10,788 7.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885,366 100.0 200,603 100.0 164,433 100.0 133.023 100.0 149,302 100.0
BUSINESS
– 140 –


--- page 151 ---
Our sales volume for 4-inch SiC epitaxial wafers decreased from 3,733 pieces in 2022, to 610
pieces in 2023 and further to 383 pieces in 2024. These declines were primarily due to the
generational upgrades from 4-inch to 6-inch and 8-inch. Nonetheless, our customers have diverse
product portfolios and end-use applications, and the demand for 4-inch wafers remains. Our 4-inch
wafers were characterized by ultra-thick films and high voltage ratings. These 4-inch wafers
continue to play an important role to our customers, as they are proven to be stable, reliable, and
effective for certain power devices and industrial systems. Our sales volume of 4-inch wafers
increased from 318 pieces for the nine months ended September 30, 2024 to 1,328 pieces for the
same period in 2025 in accordance with specific demands of our customers. Our sales volume for
6-inch SiC epitaxial wafers increased from 81,633 pieces in 2022 to 199,708 pieces in 2023,
primarily due to the growth of downstream applications and demands for 6-inch wafers. Our sale
volume for 6-inch SiC epitaxial wafers decreased from 199,708 pieces in 2023 to 156,584 pieces
in 2024, primarily due to larger stocking of our downstream customers in 2023. Our sales volume
for 6-inch SiC epitaxial wafers increased from 126,648 pieces for the nine months ended September
30, 2024 to 137,184 pieces for the same period in 2025. We officially launched 8-inch SiC epitaxial
wafers in May 2023 and our sales volume for 8-inch SiC epitaxial wafers increased from 285 pieces
in 2023 to 7,466 pieces in 2024. Our sales volume of 8-inch wafers further increased from 6,057
pieces for the nine months ended September 30, 2024 to 10,788 pieces for the same period in 2025.
These increases were primarily due to the iterations and upgrades of products, reflecting customers
who previously purchased 4-inch or 6-inch products are adopting 8-inch products.
In general, demand for our SiC epitaxial wafers intensifies during the second half of a
calendar year, surpassing the first half. This is primarily due to periodic fluctuations in demand for
downstream products of SiC epitaxial wafers, which tend to be stronger in the second half of the
calendar year. For example, the automotive industry typically sees higher sales volumes as
companies push to meet their annual targets, including EVs. This, in turn, leads to inventory
depletion and increased procurement of raw materials, including our SiC epitaxial wafers. Similarly,
the photovoltaic and energy storage sectors also experience heightened demand in the second half
of the year, as manufacturers are more inclined to start power station construction projects, and
governments may introduce more favorable policies during this period.
We price our SiC epitaxial wafers based on a number of factors, including (i) the sizes and
structures (thickness and doping types) of wafers; (ii) product specifications; (iii) purchase volume
and (iv) prevailing market condition and competitive landscape. We regularly adjust our pricing
strategies to maintain competitiveness. For customized products, such as specially doped or
uniquely thick epitaxial wafers, prices are typically higher. To mitigate the downward price
pressure, we intend to maintain and stabilize our price level by providing high-quality epitaxial
wafers to high-end industry applications. Furthermore, leveraging our large production scale, we are
able to maintain our costs at a competitive level and flexibly adjust our pricing strategy to enlarge
our market share.
Our Business Models
We have two kinds of business models, namely Turnkey and Consign, based on whether we
purchase substrates on our own or use the substrates provided by our customers, as illustrated by
the following chart.
BUSINESS
– 141 –


--- page 152 ---
Customers
Substrate
Suppliers
Turnkey
Consign
EpiWorld purchase
 substrates and other
auxiliary raw materials
EpiWorld’s epitaxial
growth process,
including incoming
inspection, epitaxial
growth, cleaning and
inspection
SiC epitaxial
wafers
Customers supply
substrates and
EpiWorld purchase other
auxiliary raw materials
Our customers have the option to choose between the two models or any combination thereof
based on their own capabilities and demands. We primarily serve SiC power device foundries and
integrated device manufacturers without in-house epitaxy capabilities under our Turnkey model.
Direct procurement of epitaxial wafers from us allows them to benefit from a stable, hassle-free,
and cost-effective supply of high-quality epitaxial wafers. As the industry value chain continues to
mature, epitaxial wafer providers like our Company are expected to maintain a competitive edge in
both technology and production capacity, allowing downstream manufacturers to rely on external
supply of epitaxial wafers and reducing the need for in-house investment in front-end processes
such as epitaxy. On the other hand, customers with in-house epitaxy capabilities, such as global
leading power semiconductor manufacturers, typically choose Consign or a combination of Consign
and Turnkey, as they were able to secure substrates supply themselves. These customers mainly
possess extensive experience and technological know-how in the manufacturing of SiC power
devices and modules, along with substantial production capacities and global leading market shares.
To ensure a stable supply of epitaxial wafers, they generally allocate a certain portion of their
capacity to internal epitaxy production.
Turnkey
Under the Turnkey model, we purchase the raw material including substrates ourselves and
upon the completion of production process, deliver the final products, SiC epitaxial wafers, to our
customers. The price of our wafer products thereby takes into account the full costs of substrates
as well as our production costs. When dealing with customers with large and recurring purchase
orders, prices are typically negotiated based on production volume, prevailing market conditions
and length of relationships. Through the Turnkey model, we could provide a integrated and
convenient solution to our customers, allowing them to rely on our established quality control
process.
The following are the salient terms of our contract with customers under the Turnkey model.
 Product specification: Our contract sets forth the model, requirement, quantity, price
and other specifications of the epitaxial wafers ordered by our customers. We are
responsible to deliver products conforming to these requirements.
BUSINESS
– 142 –


--- page 153 ---
 Payment: Our contract typically includes a concrete payment arrangement for our
customers, such as credit term, payment schedule and method.
 Delivery: We are responsible to deliver the products to the place designated by our
customers within the agreed delivery period, and we are responsible for the cost of
packaging and shipping.
 Warranty: We are responsible to replace non-conforming products if any within the
agreed warranty period.
 Termination: Our customers and us are entitled to terminate the contract upon mutual
agreement or fundamental breach of the other party.
Consign
Under the Consign model, our customers supply us with the substrates. We would purchase
other auxiliary raw materials, grow the SiC epitaxy and deliver the final epitaxial wafers to our
customers. We charge the customers for the auxiliary raw materials and the foundry services for
growing SiC epitaxy on substrates. The base processing fee depends on the size, doping type, and
thickness of the epitaxial wafer and the additional service fees include charges for special process
requirements, and other services. For large-volume orders, we from time to time apply tiered pricing
where the larger the order quantity, the lower the unit process fee. Our pricing strategy enhances
customer loyalty and increases long-term collaboration opportunities.
During the Track Record Period, we had five major overlapping customers and suppliers. The
overlapping customers and suppliers primarily provided to us SiC substrates under our Consign
model. For details, see “— Procurement and Supply Chain Management — Overlapping of
Customers and Suppliers.”
Our contract with customers under the Consign model is generally similar to those under the
Turnkey model, apart from the main difference of the provision of substrates. Under the Consign
model, our customers are generally responsible to provide and deliver the substrates to us for
production. Upon receipt, we inspect the quality and proceed with the manufacturing process
according to the contract specifications.
Our customers have the options to choose from our Turnkey model and Consign model, or
simultaneously cooperate with us under both models as they see fit. Our manufacturing capacity and
flexible business model allow us to adapt to such customized requests swiftly. The following table
sets forth a breakdown of our sales volume of SiC epitaxial wafers by types of service for the years
and periods indicated.
Y ear Ended December 31,
Nine Months Ended
September 30,
2022 2023 2024 2024 2025
Sales
volume %
Sales
volume %
Sales
volume %
Sales
volume %
Sales
volume %
(pieces of wafers, except for percentages)
Sales volume
Turnkey /H1118/H1118/H1118/H1118/H1118/H1118/H111831,339 36.7 96,428 48.1 122,283 74.4 92,006 69.2 137,763 92.3
Consign /H1118/H1118/H1118/H1118/H1118/H1118/H111854,027 63.3 104,175 51.9 42,150 25.6 41,017 30.8 11,539 7.7
Total sales volume /H1118/H111885,366 100.0 200,603 100.0 164,433 100.0 133,023 100.0 149,302 100.0
BUSINESS
– 143 –


--- page 154 ---
The sales volume under Turnkey service increased from 31,339 wafers in 2022 to 96,428
pieces in 2023 and further to 122,283 pieces in 2024, and increased from 92,006 pieces for the nine
months ended September 30, 2024 to 137,763 pieces for the same period in 2025, primarily due to
the growth of downstream applications and demands from our customers. Our Turnkey model
witnessed a solid growth in 2024, primarily because the yield rate of domestic substrates notably
improved compared to earlier years, and customers no longer have to specifically designate
substrates for consign services. In addition, our scaled procurement under Turnkey model
effectively reduced the substrate procurement costs in comparison with fragmented sourcing by
customer themselves. As a result, the Turnkey model has overtaken the Consign model to become
our primary source of revenue since 2024. Sales volume for Consign service increased from 54,027
wafers in 2022 to 104,175 wafers in 2023, primarily due to the growth of downstream applications
and demands from our customers. The sales volume under Consign service decreased from 104,175
wafers in 2023 to 42,150 wafers in 2024, and decreased from 41,017 pieces for the nine months
ended September 30, 2024 to 11,539 pieces for the same period in 2025, due to reduced demand
from certain customers under the Consign service, caused by their large purchases in the previous
year combined with fluctuations in their business operations. As of the Latest Practicable Date, we
have no plans to phase out our Consign service despite the decline in its revenue and sales volume.
The following table sets forth a breakdown of our average selling price by product and by type
of services during the Track Record Period.
Y ears Ended December 31,
Nine Months
Ended
September 30,
2022 2023 2024 2025
(RMB)
Turnkey /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,863 8,791 6,866 3,508
3-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,770
4-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,140 3,647 4,493 3,027
6-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,360 8,787 6,433 3,209
8-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 21,000 13,620 7,072
Consign /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,898 2,810 2,873 2,073
4-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,854 27,418 2,856 1,789
6-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,891 2,810 2,873 2,032
8-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,862
The average selling price of 8-inch wafers decreased from RMB21,000 to RMB13,620 from
2023 to 2024 and further to RMB7,072 for the nine months ended September 30, 2025. Such
decrease was primarily attributable to lower substrate costs. Additionally, during the initial
introduction of 8-inch wafers, some products were provided as trial samples free of charge, which
temporarily lowered the average selling price. However, the mainstream price for 8-inch wafers
remains robust, at above US$1,000. Sales of 8-inch wafers will continue to support our profitability.
The increase in the average selling price of 4-inch wafers from 2022 to 2023 was mainly due to
customers’ customization requirements. These 4-inch wafers were characterized by ultra-thick films
and high voltage ratings, making the manufacturing process highly complex.
BUSINESS
– 144 –


--- page 155 ---
The following table sets forth the number of customers we served under our Turnkey and
Consign models for the years indicated.
Y ear Ended December 31,
Nine Months Ended
September 30,
2022 2023 2024 2024 2025
Turnkey /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849 58 47 40 99
Consign /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 1 1 087 1 6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860 68 55 47 115
Under both Turnkey and Consign models, we provide finished and ready-to-use SiC epitaxial
wafers to our customers, and the price is calculated based on the volume of wafers ordered. Thus,
we enter into similar contracts with our customers under both models. However, due to the
difference in the materials and services involved, we typically charge a higher unit price under our
Turnkey model. During the Track Record Period, our sales volumes under the Turnkey model
increased, primarily due to our supply chain management capabilities. In particular, we were able
to source cost-effective substrates with reliable quality, benefiting from our long-term strategic
collaboration with suppliers, rooted in our large-scale production to secure capacity and favorable
prices in advance. Our continuous effort in joint technology development with upstream suppliers
also provides us with supplies of higher quality and yield rate. Our stable, convenient offering under
the Turnkey model helps customers reduce supply chain management costs, shorten lead times, and
avoid issues such as raw substrate shortages or inventory backlogs. The number of our customers
under Turnkey model increased from 40 for the nine months ended September 30, 2024 to 99 for
the same period in 2025, primarily due to our efficiency and qualify of delivery, ability to source
and manage supply chain as well as our business development efforts. For our customers, our
competitiveness is also rooted in our dedicated focus on the epitaxy technologies that positions us
as industry leader under international standards, as well as broad and comprehensive customer base
both domestically and internationally, reflecting the wide market acceptance of our products. In
2024, in terms of sales volume in open market, our market share among foundries in the global SiC
epitaxy wafer market exceeded 30%, according to CIC, denoting our solid competitiveness for our
customers.
RESEARCH AND DEVELOPMENT
We have committed to the R&D of advanced technologies such as low defect density epitaxial
growth, high uniformity epitaxial growth, thick-film epitaxial growth and n/p-type epitaxial growth.
Additionally, we are currently tackling key industry challenges, including the preparation of
ultra-thick epitaxial wafers, development and optimization of deep-trench-filling epitaxial growth,
development and optimization of epitaxial growth process on composite substrates, process
optimization for multi-wafer epitaxial growth equipment, among others.
We believe that our research and development capabilities are a core competitive strength and
have led to our leading position in the industry. As of September 30, 2025, we have 106 full
time-equivalent research and development employees. In 2022, 2023 and 2024 and for the nine
months ended September 30, 2024 and 2025, we had R&D expenses of RMB43.8 million,
RMB101.8 million, RMB80.0 million, RMB62.1 million and RMB50.4 million, respectively. We
are a semiconductor materials company and are characterized by high capital intensity and complex
manufacturing processes. Therefore, our R&D expenses are generally moderate as compared with
design or equipment companies within the semiconductor materials industry. During the Track
Record Period, our R&D expenses as a percentage of total revenue experienced a slight decline.
Nevertheless, we believe that we can maintain our industry competitiveness by continuously
enhancing R&D efficiency and optimizing our innovation strategy. We emphasize effective resource
allocation and strategic prioritization to drive meaningful innovation. Our efficient R&D model
enables us to achieve product iterations and introduce innovative products without requiring
substantial R&D expenses. By emphasizing efficiency and leveraging our industry expertise, we are
able to deliver new products while maintaining stable and streamlined R&D expenses. For instance,
in December 2025, we achieved a significant milestone with the world’s first launch of 12-inch SiC
epitaxial wafers, demonstrating our continued ability to deliver innovative products and sustain our
competitive edge.
BUSINESS
– 145 –


--- page 156 ---
Our research and development team published 16 articles on the epitaxial growth of SiC. We
have led the drafting of multiple major standards on SiC epitaxial wafers, as set forth below:
Name of Standard Standard No. Issuing Authority
Role in Formulation
of Standards
Date of
Implementation
Category of
Standard
Specification for 4H-SiC
homo-epitaxial wafer /H1118
SEMI M92-0423 Semi Standards
Committee
Primary author 2023.04 International
standard
SiC epitaxial wafers /H1118/H1118/H1118GB/T43885-2024 National Standardization
Administration under
State Administration
for Market Regulation
Unit involved in
drafting
2024.11.1 National
standard
Acceptance specification
for SiC epitaxial wafer
of high voltage power
devices in the grid
system /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
DL/T 2301-2021 National Energy
Administration
Unit involved in
drafting
2021.10.26 Industry
standard
8-inch SiC wafer
reference marking and
dimensions /H1118/H1118/H1118/H1118/H1118/H1118
T/CASAS 025-2023 China Advanced
Semiconductor
Industry Innovation
Alliance
Unit involved in
drafting
2023.6.19 Group standard
Test method for minority
carrier lifetime in SiC
– microwave
photoconductive /H1118/H1118/H1118/H1118
T/CASAS 026-2023 China Advanced
Semiconductor
Industry Innovation
Alliance
Unit involved in
drafting
2023.6.19 Group standard
Test method for the
content of metal
elements on the
surface of SiC
wafer-inductively
coupled plasma
mass spectrometry /H1118/H1118/H1118
T/CASAS 032-2023 China Advanced
Semiconductor
Industry Innovation
Alliance
Unit involved in
drafting
2023.6.19 Group standard
Specification for SiC
homo-epitaxial wafers
for power devices /H1118/H1118/H1118
T/CW A 1003-2018 Association of China
Wide Bandgap Power
Semiconductor
Industry
Primary author 2019.01.01 Group standard
The terminology for
defects in 4H-SiC
substrates and
epilayers /H1118/H1118/H1118/H1118/H1118/H1118/H1118
T/CASA 004.1-2018 China Advanced
Semiconductor
Industry Innovation
Alliance
Unit involved in
drafting
2018.11.20 Group standard
The metallographs
collection for defects
in 4H-SiC substrates
and epilayers /H1118/H1118/H1118/H1118/H1118
T/CASA 004.2-2018 China Advanced
Semiconductor
Industry Innovation
Alliance
Unit involved in
drafting
2018.11.20 Group standard
SiC epitaxial layers –
determination of
carrier concentration –
mercury probe
capacitance-voltages
method /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
T/IAWBS003-2017 Innovation Association
of Wide Bandgap
Semiconductor
Technology
Primary author 2017.12.31 Group standard
Method of surface
defects for SiC
epitaxial wafers /H1118/H1118/H1118/H1118
T/IAWBS002-2017 Innovation Association
of Wide Bandgap
Semiconductor
Technology
Unit involved in
drafting
2017.12.31 Group standard
BUSINESS
– 146 –


--- page 157 ---
Our research and development efforts focus on:
 Improving qualities of 6-inch and 8-inch SiC epitaxial wafers. Optimize growth
processes to reduce epitaxial defects and improve uniformity in doping concentration
and thickness.
 Development and optimization of thick film epitaxial technology. Develop and refine
thick-film epitaxial growth processes to address challenges such as long growth times,
high defect density, and poor uniformity in doping concentration and thickness.
 Evaluation of new epitaxial equipment and development of the epitaxial technology
applicable to the equipment. Evaluate and validate new epitaxial growth equipment, and
develop epitaxial growth processes tailored to the equipment to enable mass production
capabilities.
 Development and optimization of deep trench filling epitaxial growth. Develop and
optimize trench filling epitaxial processes to establish a technological foundation for the
fabrication of SiC superjunction devices.
 Development and optimization of epitaxial growth processes on composite substrates.
Develop and optimize epitaxial growth technologies for composite substrates to meet the
epitaxial requirements of new types of substrates.
 R&D of epitaxial growth technology of ultra-wide bandgap materials for novel power
devices. This aligns with the evolving trends in the power device industry and aims to
advance the state of ultra-wide bandgap epitaxial materials.
Our Technologies and R&D Process
We have established a comprehensive R&D management system which typically involves four
stages. First, our R&D team will submit a project initiation application based on industry
development and market demand, as well as our existing production technology and long-term
development strategy. A review committee will then review the application and conduct a meeting
evaluation. After the project initiation application passes the review, a project team will be formed
to prepare the project plan. Second, the project team carries out preliminary research and
preparation work based on the project plan and formulates the overall technical solution. Third, the
project team will engage in sample verification and batch verification processes. They first conduct
small-batch trial production to test and verify the stability of the product process. Then the team
proceeds to trial production of specific batches, collects test data, and verifies the feasibility of
large-scale production. During this stage, the project team would also develop standardized process
workflows and quality control standards. Finally, a project acceptance report will be drafted after
the project achieves its R&D goals. Upon approval of the report, the project is handed over to other
departments and intellectual property registration and management procedures will kick in if
necessary.
BUSINESS
– 147 –


--- page 158 ---
The below chart illustrates the phases of our R&D project development process.
Project Initiation
Application
Intellectual
Property Registration
and Management
Project Initiation
Review
Project Acceptance
and Handover
Project Research
Batch
Verification
Sample
Verification
Process
Development
YES
We have developed a series of proprietary technologies through our R&D efforts, enabling the
successful mass production and commercialization of 6-inch and 8-inch SiC epitaxial wafers. These
technologies are the result of our innovations in both design and manufacturing processes. The
following chart sets forth some of our technology highlights.
Core Technology Highlights
8-inch SiC epitaxial wafer
production technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118
As epiwafer sizes increase, larger surface areas
exacerbate temperature and gas flow inconsistencies
on the epiwafer. It becomes more challenging to
achieve high epitaxial uniformity and low defect
density. Through the development and optimization
of 8-inch epitaxial growth processes: temperature,
pressure, gas flow distribution, growth rate, C/Si
ratio, among others, we have successfully addressed
the above issues. As a result, the quality of our
8-inch epitaxial wafers has reached internationally
advanced level.
BPD-free epitaxial growth
technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Basal Plane Dislocations (BPD) are defects that occur
in the basal plane of a crystalline material.
According to the mechanism of BPD conversion,
the BPD-free epitaxial growth technology is
developed by optimizing parameters such as growth
temperature, reaction pressure, precursor flow rates,
among others. Using this technology, the rate of
BPD conversion to TED, a type of dislocation that
does not affect device performance, is over 99.9%
in the epitaxial growth process. The number of
BPD defects is near zero in our epitaxial wafers.
High-concentration uniformity
epitaxial growth technology /H1118/H1118/H1118
Through precise adjustments of surface thermal field
and flow field, and optimization of epitaxial
parameters such as C/Si ratio which indicates the
proportion of carbon to silicon atoms in the gas
mixture used during epitaxial growth of SiC layers,
flow distribution, doping content, among others, we
have greatly improved the uniformity of doping
concentration of epiwafers.
BUSINESS
– 148 –


--- page 159 ---
Core Technology Highlights
Low defect density epitaxial
growth technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
By developing pre-etching and buffer layer
technologies for epitaxial growth, we have
effectively minimized the propagation of substrate
defects into the epitaxial layer and successfully
suppressed the formation of epitaxial growth
defects. Using this technology, the quality of
epiwafers has been greatly improved.
Thick-film epitaxial growth
technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
By increasing the growth rate and optimizing the
process parameters, we have developed this
technology that can achieve an epitaxial layer
thickness of over 200 micrometers with only five
triangular defects and a low and controlled doping
concentration with high uniformity. This is crucial
for enabling the fabrication of ultra-high-voltage
SiC power devices such as Insulated Gate Bipolar
Transistors (IGBTs) and thyristors.
INTELLECTUAL PROPERTY
Since our inception, we have internally developed a variety of intellectual property rights. As
of the Latest Practicable Date, we have 40 granted patents, including 15 invention related patents,
as well as 20 trademarks in China. See “Appendix V — Statutory and General Information —
Further Information About Our Business — Intellectual Property Rights” for details of our material
intellectual property rights.
The below table sets forth details of our key invention patents as of the Latest Practicable
Date.
Patent Name Registration No. Intended Use(s) Functions
Authorization
Date
Expiry
Date
A Semiconductor Wafer
Compatibility Testing
Stage and Method of Use
Thereof /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
ZL201310431685.0 Testing of SiC
epitaxial wafers
Improve testing
capability
20160629 20330922
A Self-Purification System
for a Sealed Reaction
Chamber /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
ZL201510018754.4 Growth of SiC
epitaxial wafers
Improve the
quality of
epitaxial wafers
20171013 20350114
A Method for Analyzing
Defects in Transparent
Materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
ZL201610351566.8 Testing of SiC
epitaxial wafers
Improve testing
capability
20181127 20360524
A Control Method for
Growth of SiC Epitaxial
and SiC Epitaxial Wafers /H1118
ZL202011344467.X Growth of SiC
epitaxial wafers
Improve the
quality of
epitaxial wafers
20211008 20401126
A Method for Improving
Growth Quality of SiC
Epitaxial Film /H1118/H1118/H1118/H1118/H1118/H1118/H1118
ZL202011420249.X Growth of SiC
epitaxial wafers
Improve the
quality of
epitaxial wafers
20210810 20401208
A Method for Reducing
Growth Defects in SiC
Epitaxial Wafers and a SiC
Substrate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
ZL202011581436.6 Growth of SiC
epitaxial wafers
Improve the
quality of
epitaxial wafers
20211123 20401228
BUSINESS
– 149 –


--- page 160 ---
Patent Name Registration No. Intended Use(s) Functions
Authorization
Date
Expiry
Date
A Non-Destructive Testing
Method for Thickness
Measurement of
Semiconductor Doping
Layers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
ZL202110423512.9 Testing of SiC
epitaxial wafers
Improve testing
capability
20220218 20410420
A Control Method for
Growth of SiC Epitaxial /H1118/H1118
ZL202110813657.X Growth of SiC
epitaxial wafers
Improve the
quality of
epitaxial wafers
20220823 20410719
SiC Step Flow Low-Speed
Growth Method for
Chemical Potential
Regulation Growth
Monomer under Non-
Equilibrium Condition /H1118/H1118/H1118
ZL202110933959.0 Growth of SiC
epitaxial wafers
Improve the
quality of
epitaxial wafers
20230214 20410813
A Method for Reducing
Surface Defects of SiC
Epitaxial Film /H1118/H1118/H1118/H1118/H1118/H1118/H1118
ZL202310896143.4 Growth of SiC
epitaxial wafers
Improve the
quality of
epitaxial wafers
20231010 20430721
A Method for Detecting
Thickness of SiC Epitaxial
Layer in Real Time /H1118/H1118/H1118/H1118
ZL202211725302.6 Growth of SiC
epitaxial wafers
Improve the
quality of
epitaxial wafers
20231020 20421230
A Method for Reducing
Growth Defects in SiC
Epitaxial Wafers and a
SiC Substrate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
ZL202111074030.3 Growth of SiC
epitaxial wafers
Improve the
quality of
epitaxial wafers
20240813 20401228
A Method for Detecting
Micropipe Defects in a
SiC Substrate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
ZL202311866853.9 A method of
testing SiC
substrate
Improve testing
capability
20250128 20431229
A process for n-type doped
SiC epitaxial growth /H1118/H1118/H1118/H1118
ZL202311354763.1 Growth of SiC
epitaxial wafers
Improve the
quality of
epitaxial wafers
20250516 20431019
A method for reducing bump
defects on the SiC
epitaxial film surface /H1118/H1118/H1118/H1118
ZL202411925059.1 Growth of SiC
epitaxial wafers
Improve the
quality of
epitaxial wafers
20250808 20441225
Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy
or otherwise obtain and use our technology. See “Risk Factors — Risks Related to Our Business and
Industry — Our business depends on our ability to protect our proprietary know-how and
intellectual property rights.”
During the Track Record Period and up to the Latest Practicable Date, we did not have any
material disputes or any other pending legal proceedings regarding intellectual property rights with
third parties.
PRODUCTION
Through years of persistent technological innovation, we have mastered the entire epitaxial
growth process, including pre-treatment, epitaxial growth, cleaning, and inspection. By optimizing
various parameters of the epitaxial growth process, such as temperature, reaction pressure, gas flow
rate, and C/Si ratio, we have developed procedures to reduce defects caused by substrate raw
materials and epitaxial growth itself, while enhanced the uniformity of epitaxial layer thickness and
concentration, and achieved high yield rates of our SiC epitaxial wafer products.
BUSINESS
– 150 –


--- page 161 ---
Production Process
Our production process consists of seven steps, which is illustrated by the following diagram.
Raw Material
Inspection/Storage
Substrate Pre-treatment
Buffer Layer Growth
Epitaxial Layer Growth
Substrate
Defect Inspection
N-type SiC epitaxy is doped with nitrogen
P-type SiC epitaxy is doped with aluminum
Appearance inspection
Epitaxial layer
concentration inspection
Epitaxial layer thickness inspection
Surface roughness inspection of epitaxial layer
Epitaxial layer defect inspection (cleaning is required before this inspection)
Epitaxial layer flatness inspection
Flatness Inspection
Appearance Inspection
Substrate,
Gas
Usage
Epitaxial Growth
Epitaxial Inspection
Cleaning, Drying
Packaging and Storage
Set forth below are details of each key production step:
1. Raw material inspection : We inspect parameters such as defects, flatness, and
appearance of each substrate, and only those that meet the standards are approved for
storage.
2. Substrate pre-treatment : The substrate undergoes in-situ etching treatment using
hydrogen chloride or hydrogen prior to epitaxial growth. This process improves the
surface quality of the substrate, eliminates certain substrate defects, and creates a solid
foundation for subsequent epitaxial growth.
3. Buffer layer growth : By introducing different gaseous chemical materials into the
epitaxy reactor, chemical reactions occur on the surface of the SiC substrate under high
temperature and low pressure, resulting in the deposition of a solid-state homo-epitaxial
single-crystal thin film on the substrate surface.
4. Epitaxial layer growth : Based on doping types, gaseous chemical materials of varying
concentrations are introduced into the epitaxy reactor to undergo chemical reactions on
the surface of the SiC substrate under high temperature and low pressure. This process
deposits a solid-state homo-epitaxial SiC single-crystal thin film on the buffer layer.
5. Epitaxial inspection : Upon the completion of epitaxial layer growth, we inspect
parameters such as epitaxial layer thickness, concentration, defects, roughness, and
flatness. Once the inspection results meet customer requirements, the epitaxial wafer
proceeds to the cleaning and drying processes.
6. Pre-storage cleaning and drying : SiC epitaxial wafers that pass inspection undergo
multiple rounds of cleaning with chemical mixed solutions and deionized (DI) water.
After drying, they are processed for storage.
7. Packaging and storage : Qualified SiC epitaxial wafers are packaged and stored.
BUSINESS
– 151 –


--- page 162 ---
Production Equipment and Machinery
During the Track Record Period, our core production equipment includes epitaxial growth
equipment, epitaxial inspection equipment, and cleaning equipment. Our epitaxial growth
equipment primarily sourced from global industry leader. As of December 31, 2022, 2023 and 2024
and September 30, 2025, we had 13, 19, 24 and 26 suppliers for core production equipment,
respectively. All of our equipment undergoes regular maintenance and servicing in accordance with
established standards, ensuring optimal operational performance. During the Track Record Period,
no major operational failures have occurred as a result of equipment or facility malfunctions.
Depreciation rates are determined based on the asset category, estimated useful life, and expected
residual value. The depreciation period for our major equipment ranges from three to ten years.
We purchased high-quality core manufacturing equipment and established a fully integrated
SiC epitaxial production line:
Sophisticated Epitaxy Equipment. In the selection of critical epitaxial production equipment,
we have primarily procured epitaxial growth reactors manufactured in Europe, including both
single-wafer and multi-wafer epitaxial reactors. These reactors are suitable for high-end product
development, customized production, and large-scale production, with technical parameters leading
the industry.
Advanced Inspection Systems. We have procured industry-leading automated high-precision
inspection equipment, enabling 100% measurement and control of all critical epitaxial parameters:
thickness and doping concentration, defect density, surface roughness, wafer flatness and metallic
contamination.
Fully Automated Cleaning Systems. We implemented “dry-in/dry-out” automated wafer
cleaning systems with real-time online process monitoring of both cleaning capacity and cleaning
effectiveness to ensure cleanliness of finished products.
Currently, our SiC epitaxial production line is certified by IA TF 16949. Our current
configuration of epitaxial production, inspection and cleaning equipment has exceeded a monthly
production capacity of 50,000 SiC epitaxial wafers as of the Latest Practicable Date, creating
synergistic advantages of “high precision—high capacity—high yield” to provide global power
device customers with high-quality products and services.
Production Facilities
We currently maintain one production base in Xiamen, China. During the Track Record
Period, our production volume reached 88.0 thousand pieces in 2022, 223.0 thousand pieces in
2023, 145.1 thousand pieces in 2024, and 132.0 thousand pieces for the nine months ended
September 30, 2025. The table below sets forth details of our production base as of September 30,
2025.
Production Base Location
Gross
Floor Area Primary Products
(sq.m.)
Xiamen production base /H1118/H1118/H1118/H1118No. 196 and No. 198 Shitou
East Second Rd,
Xiang’an District,
Xiamen 361101, China
135,804.7 4-inch, 6-inch and
8-inch SiC epitaxial
wafers
Set forth below are the maximum available production capacity, production volume and
utilization rates of our production base for the years/periods indicated. We are currently expanding
our production base in Xiamen.
BUSINESS
– 152 –


--- page 163 ---
Y ear ended December 31, Nine Months Ended September 30,
2022 2023 2024 2025
Maximum
available
production
capacity (1)
Production
Volume(2)
Utilization
Rate
Maximum
available
production
capacity (1)
Production
Volume(2)
Utilization
Rate
Maximum
available
production
capacity (1)
Production
Volume(2)
Utilization
Rate
Maximum
available
production
capacity (1)
Production
Volume(2)
Utilization
Rate
Xiamen
production
base /H1118/H1118
99.0
thousands
88.0
thousands 88.9%
235.5
thousands
220.6
thousands 93.7%
258.6
thousands
145.1
thousands 56.1%
(3)
307.0
thousands
132.0
thousands 43.0% (4)
Notes:
(1) In pieces of wafers. Maximum available production capacity in a period is calculated as the number of reactors in
operations multiplied by the maximum number of epitaxial wafers produced by each reactor per day, multiplied by
the number of days in the relevant period (i.e. 365 days for a fiscal year and 273 days for nine months ended
September 30). However, the number of actual operating reactors may be affected by time of equipment installation
and tuning.
(2) In pieces of wafers. Production volume refers to the actual epitaxial wafer output in a given period.
(3) Our utilization rate of 56.1% in 2024 was primarily due to expansion of our production capacity and our customers’
adjustments of their inventory levels. We are adaptive to changing market conditions and focused on operational
efficiency in 2024. We remain committed to monitoring market dynamics closely and responding strategically for
future growth.
(4) Expansion of production capacity contributed to the decline of our utilization rate for the period as compared to the
year of 2024. We are strategically expanding our capacity and we plan to do so in a disciplined and prudent manner.
We operate in an industry with rapid growth. According to CIC, the industry we operate in is expected to grow at a
CAGR of 38.2% from 2024 to 2029. Therefore, our current capacity may soon become insufficient to meet rising
demand. In addition, expanding early can position the Company to capture a larger market share, stay ahead of the
production lead time, benefit from economies of sale, and reduce per-unit costs in the long run. Moreover, we are
upgrading our product lines, including introducing new 8-inch production lines, to improve our competitiveness.
SALES AND MARKETING
During the Track Record Period, our SiC epitaxial wafer products were sold worldwide,
including Asia, Europe, North America, and others. The table below sets forth the breakdown of our
revenue by geographic region, based on the locations of our direct contracting customers, for the
years and periods indicated:
Y ears Ended December 31, Nine Months Ended September 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(in thousands, except for percentages)
(unaudited)
Revenue by region
Asia (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118275,470 62.5 745,220 65.2 672,429 69.0 543,971 67.3 455,961 85.2
Greater China /H1118/H1118/H1118/H1118167,703 38.1 307,249 26.9 207,656 21.3 161,343 20.0 340,026 63.5
Europe (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,339 33.9 323,343 28.3 268,943 27.6 235,014 29.1 64,160 12.0
North America (3) /H1118/H1118/H1118/H111814,083 3.2 73,938 6.5 32,944 3.4 29,265 3.6 14,942 2.8
Others (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,800 0.4 – – – – – – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118440,691 100.0 1,142,502 100.0 974,316 100.0 808,250 100.0 535,063 100.0
Notes:
(1) Asia primarily comprises Greater China, South Korea and Japan.
(2) Europe primarily comprises Austria, Switzerland and the U.K.
BUSINESS
– 153 –


--- page 164 ---
(3) North America primarily comprises the U.S.
(4) Others primarily comprises Australia.
During the Track Record Period, our sales were primarily from sales of SiC epitaxial wafers.
The following sets forth the salient terms of our standard direct sales agreement:
 Product specifications. We specify the products, packaging, brand, quantity, and
logistics of shipment in our agreements with customers.
 Pricing. We sell our products to customers at mutually agreed price levels.
We engage with channel partners for a small percentage of our sale in Asian markets.
According to CIC, facilitating transactions through channel partners are widely adopted and are
industry norm in the relevant regions. The channel partners are primarily engaged to complement
our sales team and to facilitate transactions in accordance with the distribution trading practice of
the region where our end customers are located. By leveraging their local market expertise,
established networks, and logistical capabilities, the channel partners help us to accelerate our
market entry and reduce operational complexities. Channel partners provide valuable insights into
regional regulations, customer preferences, and competitive landscapes, enabling us to focus on
core competencies while ensuring efficient market penetration and scalable growth. This strategic
partnership mitigates risks, enhances cost efficiency, and strengthens our ability to deliver
satisfactory customer service in diverse international markets. In December 31, 2022, 2023 and
2024 and for the nine months ended September 30, 2025, we had three, three, three and three
channel partners, respectively. In 2022, 2023 and 2024 and for the nine months ended September
30, 2025, revenue from our channel partners amounted to RMB96.1 million, RMB126.7 million,
RMB72.0 million and RMB32.1 million, respectively, representing 21.8%, 11.1%, 7.4% and 6.0%
of the total revenue for the respective periods. During the Track Record Period, to the best of our
Directors’ knowledge, all of our channel partners were Independent Third Parties. We do not work
with sub-channel partners during the Track Record Period. During the Track Record Period and up
to the Latest Practicable Date, we have no material unresolved disputes or lawsuits with our channel
partners.
Marketing
We have an experienced and highly trained sales and marketing team, who proactively identify
market opportunities and tailor sales strategies. Due to the highly specialized nature of the industry,
we often participate in trade shows and industry forums to enhance the awareness of our brand and
promote our new and existing products.
Our Channel Partners
We engage independent third-party channel partners to sell our SiC epitaxial wafers to certain
regions and markets in Asia, including Taiwan, Japan and South Korea. We believe our channel
partners help us effectively execute our marketing strategies specifically tailored to each
geographical location with their local customer base and regional market insights. We and our
channel partners constitute a seller and buyer relationship, under which we do not pay commissions
or make other payments to our channel suppliers. Accordingly, we recognize revenue when our
products are delivered to and accepted by the channel partners. We categorize our sales to channel
partners under our Turnkey/Consign models according to the choice and arrangement of our channel
partners where both models coexist.
During the Track Record Period, we had three, three, three and three channel partners in 2022,
2023 and 2024 and for the nine months ended September 30, 2025, respectively. We generated a
minor portion of revenue from our channel partners of RMB96.1 million, RMB126.7 million,
RMB72.0 million and RMB32.1 million in 2022, 2023 and 2024 and for the nine months ended
BUSINESS
– 154 –


--- page 165 ---
September 30, 2025, respectively, accounting for 21.8%, 11.1%, 7.4% and 6.0% of our total revenue
for the same years/periods, respectively. Our channel partners primarily engage in the trading and
sales of semiconductor components and relevant services. We started our business relationship with
the channel partners through targeted marketing activities in certain regions by identifying these
regional sales network and actively reaching out to seek opportunities of collaboration.
Channel Partner A served five end customers during the Track Record Period, including a
semiconductor component manufacturer listed on the Taiwan Stock Exchange, which generated
revenue of RMB87.9 million, RMB102.1 million, RMB25.4 million, and RMB10.7 million in 2022,
2023 and 2024 and for the nine months ended September 30, 2025, respectively, accounting for
93.3%, 90.8%, 47.3% and 45.9% of the total revenue generated from Channel Partner A for the same
years/periods, and 20.0%, 8.9%, 2.6% and 2.0% of our total revenue for the same years/periods.
Channel Partner B served 11 end customers during the Track Record Period, including a
semiconductor device and storage solution provider headquartered in Japan, which generated
revenue of RMB0.2 million, RMB9.6 million, RMB5.6 million and nil in 2022, 2023 and 2024 and
for the nine months ended September 30, 2025, respectively, accounting for 9.4%, 74.6%, 62.9%
and nil of the total revenue generated from Channel Partner B for the same years/periods, and
0.04%, 0.8%, 0.6% and nil of our total revenue for the same years/periods. Channel Partner C
served three end customers during the Track Record Period, including a semiconductor device
manufacturer listed in the Korea Exchange and London Stock Exchange, which generated revenue
of nil, nil, RMB6.2 million and RMB7.7 million in 2022, 2023 and 2024 and for the nine months
ended September 30, 2025, respectively, accounting for nil, nil, 65.8% and 99.9% of the total
revenue generated from Channel Partner C for the same years/periods, and nil, nil, 0.6% and 1.4%
of our total revenue for the same years/periods. To our knowledge, the following table sets forth
certain details of the operations of our channel partners during the Track Record Period.
Channel
Partner Background
Number of
End
Customers
Background of End
Customers
Y ears of
Relationship Revenue
%o f
Total
Revenue
(RMB in
millions) %
Channel
Partner A /H1118
A company that engages in
the agency businesses of
semiconductor supply
chain, headquartered in
Taiwan and incorporated
in 2004
5 primarily Taiwan
companies that
primarily engage in
the sales and
production of
semiconductor
components
9 years 2022 94.3 21.4
2023 112.5 9.8
2024 53.7 5.5
Nine months
ended
September 30,
2025
23.3 5.1
Channel
Partner B /H1118
A company that engages in
the agency businesses of
wafers and
semiconductor
manufacturing
equipment,
headquartered in Japan
and incorporated in 1998
11 primarily Japanese
companies that
primarily engage in
the sales and
production of
semiconductor and
storage devices
12 years 2022 1.7 0.4
2023 12.9 1.1
2024 8.8 0.9
Nine months
ended
September 30,
2025
1.0 0.2
Channel
Partner C /H1118
A company that engages in
the sales of wafers and
semiconductor materials,
headquartered in South
Korea and incorporated
in 2004
3 primarily South Korean
companies that
primarily engage in
the sales and
production of SiC
devices used in
energy, industrial
application and EVs
5 years 2022 0.1 0.0
2023 1.4 0.1
2024 9.4 1.0
Nine months
ended
September 30,
2025
7.7 1.7
BUSINESS
– 155 –


--- page 166 ---
We typically enter into a framework agreement with our channel partners for the sales of our
solutions. The following sets forth the salient terms of our standard agreement:
 Duration : typically one year, subject to renewal by mutual agreement;
 Geographical region : within the agreed areas, typically the region that our channel
partner has coverage and expertise;
 Risk allocation : all significant risks, including inventory risks, are transferred to our
channel partners upon delivery and acceptance, and we retain no ownership control over
the products sold to our channel partners;
 Credit terms : we generally offer a 30-90 day credit terms upon delivery and acceptance
to our channel partners;
 Product returns and warranty : our channel partners can only claim for return our
products due to our shipping error or quality issues, and we typically provide a warranty
period of one year;
 Product supply : orders only become effective after our confirmation and we should
subsequently respond within reasonable time with sufficient product supply; and
 Pricing restriction : our partners shall strictly adhere to our advised prevailing product
sales price range provided by us.
A director of Channel Partner B is a family member of one of our shareholders who owns
1.49% equity interest in our Company as of the Latest Practicable Date. Save for such relationship,
to the best of our knowledge, all of our other channel partners are independent third parties without
other past or present relationships between the channel partners and our Company, Directors,
shareholders, senior management, or any of their respective associates during the Track Record
Period and up to the Latest Practicable Date.
Customers
We provide SiC epitaxial wafers to power device companies, which then fabricate the wafers
into devices for their customers. During the Track Record period, we had served 134 customers. Our
customers are primarily global leaders of semiconductor power devices.
Top Five Customers
During the Track Record Period, we generally became acquainted with our top five customers
through targeted marketing activities. We locate leading downstream customers with potential to
develop technology synergy and long-term collaboration through public information, and our
management actively reaches out to seek opportunities of cooperation. We do not set compulsory
target volumes for our customers and allow them to adjust their purchase plans according to actual
demands. Our sales to the five largest customers in each year/period during the Track Record Period
were RMB381.5 million, RMB938.0 million, RMB790.6 million and RMB331.0 million,
respectively, and accounted for 86.5%, 82.1%, 81.2% and 61.9% of the total revenue for the
respective years/periods. Our sales to the largest customer in each year/period during the Track
Record Period were RMB246.6 million, RMB614.6 million, RMB393.6 million and RMB163.0
million, respectively, and accounted for 56.0%, 53.8%, 40.4% and 30.5% of our total revenue for
the respective years/periods. According to CIC, given the stringent technical requirements and the
critical need for supply chain stability across the downstream semiconductor sectors, power device
industry are dominated by limited leading players, which constitute the majority of our customer
base. As a result, we maintain deep collaborations with these leading players, leading to our
relatively high customer concentration. The fluctuation in revenue generated from our five largest
BUSINESS
– 156 –


--- page 167 ---
customers during the Track Record Period was primarily attributable to volatile macroeconomic
conditions and the cyclical nature of the semiconductor industry. As a result, our customers adjusted
their procurement plans against the fluctuation in downstream industries, such as automotive and
industry applications, which further impacted our revenue. In particular, the revenue generated from
Customer A, Customer B, Customer F, Customer G and Customer H significantly increased from
2022 to 2023, primarily due to wider adoption of downstream applications of SiC power devices,
such as EVs and smart grid, as well as our increased production capacity, which enabled us to
provide sufficient supply and fulfill large-scale orders. The revenue generated from Customer F and
Customer I significantly increased from 2023 to 2024, primarily due to successful product
validation and strong recognition from these customers, reflecting their confidence in our product
quality, service, and reliable delivery based on our previous cooperation. Revenue from Customer
A decreased from RMB614.6 million in 2023 to RMB104.4 million in 2024, and further to nil for
the nine months ended September 30, 2025. We believe the decrease in the sales to Customer A is
a combined effect of a large inventory backlog carried over from previous years, Customer A’s
product cycles and its evolving business focuses. At the same time, as it is headquartered in the
U.S., we cannot exclude the possibility that evolving tariff and geopolitical conditions adversely
affected its purchase decisions. For more analysis on the impact of geopolitical tension, see “Risk
Factors — Risks Related to Our Business and Industry — Our business, financial condition and
results of operations may be materially and adversely affected by geopolitical tensions,
international trade policies, international export controls and economic sanctions.” On the basis that
revenue generated from the United States only accounted for a minority of our total revenue during
the Track Record Period, and considering our continuous effort to expand our customer base, such
events would not have a material adverse effect on our overall financial condition or results of
operations.
Our customers generally have a relatively long certification and validation cycle for their
selected raw material suppliers due to the high safety requirements of the production of their
semiconductor products, particularly for automotive-grade products, thereby creating a high entry
barrier for potential competitors. Nonetheless, considering the broad-based yet relatively
fragmented nature of domestic customer demand and our effort to extend our customer base, as well
as the current inventory level of certain of our largest customers, we expect the proportion of
revenue from our top five customers to decline, reducing our reliance on their revenue contribution.
In particular, the domestic market is characterized by demand arising from a wide range of
industries and applications, resulting in a large but relatively fragmented customer base with diverse
needs. This structure is primarily due to the broad downstream applications of SiC products and the
unique attributes of the industry, which stand in contrast to the global market’s high concentration
among a few dominant providers. To grow our customer base in the domestic market, we have
implemented a systematic customer expansion strategy focused on deepening regional coverage,
refining market segmentation, and establishing dedicated teams to address specific industry
requirements. By enhancing the competitiveness of our products and solutions, and tailoring our
offerings to the needs of both large enterprises and emerging players, we are able to lower barriers
to entry for new customers and effectively serve under-penetrated market segments. Furthermore,
in light of the elevated inventory levels currently held by some of our major customers and reduced
demands from some of these customers, we are strategically prioritizing the acquisition of new
customers and the development of high-growth market segments. This proactive approach to
expanding into emerging markets and diversifying our customer base is expected to mitigate
customer concentration risks and support sustainable growth going forward. Considering the
ongoing geopolitical tension and broad market slowdown, we plan to mitigate the risk of
deterioration of our relationships with top customers through a series of comprehensive strategies,
including actively expanding our customer base, deepening cooperation with existing key customers
to enhance business stickiness, continuously investing in innovation to strengthen our core
competitiveness, and establishing comprehensive risk monitoring and contingency mechanisms.
BUSINESS
– 157 –


--- page 168 ---
Rank Customers
Type of Products
Purchased Background
Approximate
Y ears of Business
Relationship Revenue
%o fO u r
Total
Revenue
(RMB in
millions) %
For the year ended December 31, 2022
1 /H1118/H1118/H1118/H1118Customer A SiC epitaxial wafers
(Turnkey &
Consign)
A company that provides
intelligent power and
intelligent sensing solutions,
headquartered in Arizona,
U.S., incorporated in 1999
and listed on the Nasdaq
Stock Exchange
8 years 246.6 56.0
2 /H1118/H1118/H1118/H1118Customer B SiC epitaxial wafers
(Turnkey &
Consign)
A company that engages in
the agency of
semiconductor supply chain,
headquartered in Taiwan
and, incorporated in 2004
9 years 94.3 21.4
3 /H1118/H1118/H1118/H1118Customer C SiC epitaxial wafers
(Turnkey &
Consign)
A company that provides turn-
key chip solutions focusing
on SiC power
semiconductor applications,
headquartered in Shanghai
and incorporated in 2017
6 years 15.4 3.5
4 /H1118/H1118/H1118/H1118Customer D SiC epitaxial wafers
(Turnkey)
A company that provides
automotive integrated
circuit chips, headquartered
in Shanghai and
incorporated in 2017
5 years 14.6 3.3
5 /H1118/H1118/H1118/H1118Customer E SiC epitaxial wafers
(Turnkey)
A company that engages in
the development and
management of
microelectronics business,
headquartered in Jiangsu,
incorporated in 2002 and
listed in STAR Market
8 years 10.6 2.4
For the year ended December 31, 2023
1 /H1118/H1118/H1118/H1118Customer A SiC epitaxial wafers
(Turnkey &
Consign)
A company that provides
intelligent power and
intelligent sensing solutions,
headquartered in Arizona,
U.S., incorporated in 1999
and listed in the Nasdaq
Stock Exchange
8 years 614.6 53.8
2 /H1118/H1118/H1118/H1118Customer B SiC epitaxial wafers
(Turnkey &
Consign)
A company that engages in
the agency of
semiconductor supply chain,
headquartered in Taiwan
and incorporated in 2004
9 years 112.5 9.8
BUSINESS
– 158 –


--- page 169 ---
Rank Customers
Type of Products
Purchased Background
Approximate
Y ears of Business
Relationship Revenue
%o fO u r
Total
Revenue
(RMB in
millions) %
3 /H1118/H1118/H1118/H1118Customer F SiC epitaxial wafers
(Turnkey &
Consign)
A company that provides
power system and IoT
solutions, headquartered in
Neubiberg, Germany,
incorporated in 1999 and
listed on the Frankfurt
Stock Exchange
3 years 94.2 8.2
4 /H1118/H1118/H1118/H1118Customer G SiC epitaxial wafers
(Consign)
A company that provides SiC
power solutions and
materials, headquartered in
North Carolina, U.S.,
incorporated in 1987 and
listed on the New Y ork
Stock Exchange
3 years 62.7 5.5
5 /H1118/H1118/H1118/H1118Customer H SiC epitaxial wafers
(Turnkey)
A company that provides
electrified railway
equipment and systems,
headquartered in Hunan,
incorporated in 2005 and
listed on the Hong Kong
Stock Exchange and STAR
Market
9 years 54.0 4.7
For the year ended December 31, 2024
1 /H1118/H1118/H1118/H1118Customer I SiC epitaxial wafers
(Turnkey)
A company that provides
integrated circuit and
semiconductor devices,
headquartered in Kyoto,
Japan, incorporated in 1958
and listed on the Tokyo
Stock Exchange
2 years 393.6 40.4
2 /H1118/H1118/H1118/H1118Customer F SiC epitaxial wafers
(Turnkey &
Consign)
A company that provides
power system and IoT
solutions, headquartered in
Neubiberg, Germany,
incorporated in 1999 and
listed on the Frankfurt
Stock Exchange
3 years 201.5 20.7
3 /H1118/H1118/H1118/H1118Customer A SiC epitaxial wafers
(Turnkey &
Consign)
A company that provides
intelligent power and
intelligent sensing solutions,
headquartered in Arizona,
U.S., incorporated in 1999
and listed on the Nasdaq
Stock Exchange
8 years 104.4 10.7
4 /H1118/H1118/H1118/H1118Customer B SiC epitaxial wafers
(Turnkey &
Consign)
A company that engages in
the agency of
semiconductor supply chain,
headquartered in Taiwan
and incorporated in 2004
9 years 53.7 5.5
BUSINESS
– 159 –


--- page 170 ---
Rank Customers
Type of Products
Purchased Background
Approximate
Y ears of Business
Relationship Revenue
%o fO u r
Total
Revenue
(RMB in
millions) %
5 /H1118/H1118/H1118/H1118Customer J SiC epitaxial wafers
(Turnkey &
Consign)
A company that provides
semiconductor devices and
sensors, headquartered in
Zhejiang, incorporated in
1997 and listed on the
Shanghai Stock Exchange
4 years 37.4 3.8
For the nine months ended September 30, 2025
1 /H1118/H1118/H1118/H1118Customer I SiC epitaxial wafers
(Turnkey)
A company that provides
integrated circuit and
semiconductor devices,
headquartered in Kyoto,
Japan, incorporated in 1958
and listed on the Tokyo
Stock Exchange
2 years 163.0 30.5
2 /H1118/H1118/H1118/H1118Customer F SiC epitaxial wafers
(Turnkey &
Consign)
A company that provides
power system and IoT
solutions, headquartered in
Neubiberg, Germany,
incorporated in 1999 and
listed on the Frankfurt
Stock Exchange
3 years 62.7 11.7
3 /H1118/H1118/H1118/H1118Customer B SiC epitaxial wafers
(Turnkey &
Consign)
A company that engages in
the agency of
semiconductor supply chain,
headquartered in Taiwan
and incorporated in 2004
9 years 41.1 7.7
4 /H1118/H1118/H1118/H1118Customer K SiC epitaxial wafers
(Turnkey)
A company that provides
automotive-grade and
industrial controlling SiC
devices, headquartered in
Guangdong, incorporated in
2021
3 years 38.3 7.2
5 /H1118/H1118/H1118/H1118Customer C SiC epitaxial wafers
(Turnkey &
Consign)
A company that provides
turnkey chip solutions
focusing on SiC power
semiconductor applications,
headquartered in Shanghai
and incorporated in 2017
6 years 25.9 4.8
As of the Latest Practicable Date, none of our Directors, Supervisors, their close associates
or any of our Shareholders (who or which to the knowledge of the Directors owned more than 5%
of our issued share capital) had any interest in any of our five largest customers in each year during
the Track Record Period. As of the Latest Practicable Date, Customer E owns 2.69% equity interest
in our Company. Save for Customer E, to the best of our knowledge, all of our five largest
customers in each year during the Track Record Period are independent third parties without other
past or present relationships between them and our Company, Directors, shareholders, senior
management, or any of their respective associates during the Track Record Period and up to the
Latest Practicable Date.
BUSINESS
– 160 –


--- page 171 ---
Sales To The Five Largest Customers
Our sales to the five largest customers in each period during the Track Record Period were
RMB381.5 million, RMB938.0 million, RMB790.6 million and RMB331.0 million, respectively,
and accounted for 86.5%, 82.1%, 81.2% and 61.9% of the total revenue for the respective periods.
Our sales to the largest customer in each period during the Track Record Period were RMB246.6
million, RMB614.6 million, RMB393.6 million and RMB163.0 million, respectively, and accounted
for 56.0%, 53.8%, 40.4% and 30.5% of our total revenue for the respective periods. We actively
nurture our relationships with top customers by continuously innovating and enhancing our product
and service offerings. We regularly engage in dialogue with our customers to understand their
evolving needs, provide customized solutions, and continuously advance our products to meet their
technical requirements. For risks related to customer concentration, please see “Risk Factors —
Risks Related to Our Business and Industry — A significant portion of our revenue was derived
from our major customers in each year/period comprising the Track Record Period. Any decrease
in sales from, or loss of major customers may have negative impacts on our results of operations.”
We believe our relationships with our top five customers are robust and unlikely to experience
any material adverse change or termination, primarily due to our integrated collaboration model that
engenders customer stickiness and imposes high switching costs. As our production is embedded
into our customers’ production workflows and accommodates their customized specifications,
replacing us would necessitate an operational overhaul, which involves substantial process
restructuring, extensive personnel retraining, and complex system reintegration, leading to
excessive business risk. This stickiness is further reinforced by our joint R&D initiatives and
regular technical alignment with our customers where our product roadmap is synchronized with
their evolving needs, making us an indispensable partner in their innovation cycle rather than a mere
vendor. Moreover, backed by long-term framework agreements and a history of high renewal rates,
our position is protected by significant industry barriers and stringent demands of the end-market
ecosystem. The industry sectors our customers serve typically require high product stability and
consistency, necessitating lengthy certification processes for their suppliers. As our major
customers are established stable suppliers to these end-users, they are reluctant to replace us once
qualified to maintaining the product quality consistency required by the end-customers. According
to CIC, our downstream semiconductor industry demands a rigorous validation cycle of at least one
to two years for new suppliers, meaning any attempt to switch would result in prohibitive
time-to-market delays and substantial validation costs that effectively lock in our partnership.
We believe that we have built long-standing, strategic partnerships with our top five
customers, upheld by our product quality and service standards. Our products and services are
integrated into customers’ operations, resulting in significant switching costs and operational risks
for customers seeking to replace us.
PROCUREMENT AND SUPPLY CHAIN MANAGEMENT
We primarily procure raw materials (such as substrates, gases, accessories, and other
materials) and epitaxial growth equipment from qualified suppliers. To meet production needs while
maintaining reasonable inventory levels, we have established a comprehensive procurement
management system and procedures.
We rely on market feedback and forecasted orders to plan in advance for procurements of key
raw materials and submit purchase requests accordingly. We select suppliers from the list of
qualified suppliers and finalizes purchase orders through inquiry, price comparison, and
negotiation. Our procurement contracts typically specify product specifications and pricings,
requirements for packaging and product quality, delivery and payment terms, agreement on product
inspection and warranty, term for contract termination, confidentiality, dispute resolution, among
others. We mainly source our primary raw materials in the PRC, with 95% domestic procurement
of raw materials in 2024.
BUSINESS
– 161 –


--- page 172 ---
The following sets forth the salient terms of our arrangements with our suppliers:
 Product specifications. We specify the technical specifications of products, packaging,
brand, quantity, and price in purchase agreements with our suppliers.
 Durations. The duration of the supply agreements typically spans a period of from one
month (for a single purchase order) to five years (for framework supply agreements).
 Payment, credit term and delivery. The suppliers are typically responsible for the
delivery of products to our designated location specified in each purchase order. In terms
of payment, we are generally granted by our suppliers a credit term of 60 days.
 Quality guarantee. In the event of a quality issue arising during the warranty period, the
supplier is obliged to either attend the site or provide a response and resolution within
specified periods (ranging from five hours for raw materials to three days for equipment)
upon receipt of our notification.
 Termination. We are entitled to terminate the purchase order when the supplier fails to
perform and does not make timely corrections after receiving our notice.
During the Track Record Period and up to the Latest Practicable Date, we did not have any
material disputes with our suppliers.
Top Five Suppliers
Our purchase from the five largest suppliers in each year/period during the Track Record
Period were RMB430.3 million, RMB1,342.8 million, RMB376.5 million and RMB220.5 million,
respectively, and accounted for 65.4%, 72.1%, 83.3% and 79.1% of the total cost of revenues for
the respective years/periods. Our purchase from the largest supplier in each year/period during the
Track Record Period were RMB215.3 million, RMB718.7 million, RMB129.4 million and
RMB79.2 million, respectively, and accounted for 32.7%, 38.6%, 28.6% and 28.4% of the total cost
of revenues for the respective years/periods. According to CIC, given the technical barrier of SiC
substrate manufacturing and the limited number of suppliers that are able to deliver substrates with
quality and stability, it is industry norm for foundries like us to have relatively high supplier
concentration. During the Track Record Period, we generally entered into long-term agreements
with our important substrate suppliers to secure necessary supply, which stipulate annual target
purchase volumes. We expect the proportion of purchase from our five largest suppliers to remain
relatively stable in the next few years. Nonetheless, our purchase from Supplier D decreased from
RMB718.7 million in 2023 to RMB37.7 million in 2024, and further decreased for the nine months
ended September 30, 2025, primarily because we adopted domestic equipment with better cost
efficiency and comparable performance, which will further benefit our production efficiency.
As of the Latest Practicable Date, none of our Directors, Supervisors, their close associates
or any of our Shareholders (who or which to the knowledge of the Directors owned more than 5%
of our issued share capital) had any interest in any of our five largest suppliers in each year during
the Track Record Period. To the best of our knowledge, during the Track Record Period and up to
the Latest Practicable Date, each of our top five suppliers are independent from each other. As of
the Latest Practicable Date, nothing has caused us to believe that our relationship with our major
suppliers will materially deteriorate, and we do not anticipate facing material supply issues in the
near future on the basis of our long-term stable strategic collaboration with our suppliers rooted in
our centralized procurement policy. However, we cannot assure you that our business relationships
with major suppliers will not change in a way that adversely affect us. For details, see “Risk Factors
— Any material adverse change to the operation, financial performance or financial condition of our
major suppliers may result in material adverse impact on their business relationship with us.” To
mitigate the risk of any deterioration, we will continue to solidify our strategic collaboration with
suppliers and implement a comprehensive supply chain risk alert system. We plan to actively
BUSINESS
– 162 –


--- page 173 ---
strengthen our supplier management procedures, implement stringent quality control policies,
monitor our suppliers’ comprehensive performance and maintain stable supplier relationship. In
addition, considering the rapid development of our upstream industries such as manufacturing of
substrates, which led to additional choices of suppliers with qualities, we believe that we are able
to identify new suppliers with similar supply capacity on comparable commercial terms within a
reasonable period of time in case that our relationship with existing suppliers materially and
adversely changed.
Rank Suppliers
Type of
Products/
Services
Provided Background
Approximate
Y ears of
Business
Relationship
Credit
Terms
Purchase
Amount
%o fO u r
Total
Purchase
(RMB in
millions) %
For the year ended December 31, 2022
1 /H1118/H1118/H1118/H1118Supplier D Equipment and
consumables
A company that provides
semiconductor equipment
and SMT solutions,
headquartered in
Netherlands, incorporated in
1968 and listed on Euronext
9 years installment
payment
215.3 32.7
2 /H1118/H1118/H1118/H1118Supplier H Equipment A company that provides
semiconductor equipment
and industry gases,
headquartered in Shanghai
and incorporated in 2010
4 years installment
payment
72.4 11.0
3 /H1118/H1118/H1118/H1118Supplier A Substrates A company that engages in the
development, manufacture
and sales of SiC single
crystal substrate materials,
headquartered in Shandong,
incorporated in 2010 and
listed in the STAR Market
12 years 30 days 58.2 8.9
4 /H1118/H1118/H1118/H1118Supplier G Equipment A company that provides
semiconductor equipment,
headquartered in Taiwan,
incorporated in 1979 and
listed on the Taiwan Stock
Exchange
10 years installment
payment
52.2 7.9
5 /H1118/H1118/H1118/H1118Supplier F Substrates A company that provides metal
products, chemical products
and machinery accessories,
headquartered in
Guangdong, incorporated in
1996, whose parent is listed
in the Tokyo Stock
Exchange
7 years 30 days 32.3 4.9
For the year ended December 31, 2023
1 /H1118/H1118/H1118/H1118Supplier D Equipment and
consumables
A company that provides
semiconductor equipment
and SMT solutions,
headquartered in
Netherlands, incorporated in
1968 and listed on Euronext
9 years installment
payment
718.7 38.6
BUSINESS
– 163 –


--- page 174 ---
Rank Suppliers
Type of
Products/
Services
Provided Background
Approximate
Y ears of
Business
Relationship
Credit
Terms
Purchase
Amount
%o fO u r
Total
Purchase
(RMB in
millions) %
2 /H1118/H1118/H1118/H1118Supplier A Substrates A company that engages in the
development, manufacture
and sales of SiC single
crystal substrate materials,
headquartered in Shandong,
incorporated in 2010 and
listed in the STAR Market
12 years 30 days 213.1 11.4
3 /H1118/H1118/H1118/H1118Supplier C Substrates and
others
A company that provides
electronic materials and
devices and information
system solutions,
headquartered in Beijing and
incorporated in 2002, who
has subsidiaries listed on the
Shenzhen Stock Exchange
and the Shanghai Stock
Exchange
4 years 60 days 201.3 10.8
4 /H1118/H1118/H1118/H1118Supplier F Substrates A company that provides metal
products, chemical products
and machinery accessories,
headquartered in Guangdong
and incorporated in 1996,
whose parent is listed on the
Tokyo Stock Exchange
7 years 30 days 116.0 6.2
5 /H1118/H1118/H1118/H1118Supplier G Equipment A company that provides
semiconductor equipment,
headquartered in Taiwan,
incorporated in 1979 and
listed on the Taiwan Stock
Exchange
10 years installment
payment
93.7 5.0
For the year ended December 31, 2024
1 /H1118/H1118/H1118/H1118Supplier A Substrates A company that engages in the
development, manufacture
and sales of SiC single
crystal substrate materials,
headquartered in Shandong,
incorporated in 2010 and
listed in the STAR Market
12 years 30 days 129.4 28.6
2 /H1118/H1118/H1118/H1118Supplier B Equipment,
substrates
and
consumables
A company that provides
semiconductor equipment
and substrate materials,
headquartered in Zhejiang,
incorporated in 2006 and
listed on the Shenzhen Stock
Exchange
3 years Equipment:
installment
payment;
Others:
30/60
days
105.5 23.4
BUSINESS
– 164 –


--- page 175 ---
Rank Suppliers
Type of
Products/
Services
Provided Background
Approximate
Y ears of
Business
Relationship
Credit
Terms
Purchase
Amount
%o fO u r
Total
Purchase
(RMB in
millions) %
3 /H1118/H1118/H1118/H1118Supplier C Substrates and
others
A company that provides
electronic materials and
devices and information
system solutions,
headquartered in Beijing and
incorporated in 2002, who
has subsidiaries listed on the
Shenzhen Stock Exchange
and the Shanghai Stock
Exchange
4 years 60 days 88.6 19.6
4 /H1118/H1118/H1118/H1118Supplier D Equipment and
consumables
A company that provides
semiconductor equipment
and SMT solutions,
headquartered in
Netherlands, incorporated in
1968 and listed on Euronext
9 years installment
payment
37.7 8.3
5 /H1118/H1118/H1118/H1118Supplier E Gases A company that develops and
provides industry gases,
headquartered in Jiangsu and
incorporated in 2002, whose
parent is listed on the
Taiwan Stock Exchange
13 years 30 days 15.4 3.4
For the nine months ended September 30, 2025
1 /H1118/H1118/H1118/H1118Supplier A Substrates A company that engages in the
development, manufacture
and sales of SiC single
crystal substrate materials,
headquartered in Shandong,
incorporated in 2010 and
listed in the STAR Market
12 years 30 days 79.2 28.4
2 /H1118/H1118/H1118/H1118Supplier B Equipment,
substrates
and
consumables
A company that provides
semiconductor equipment
and substrate materials,
headquartered in Zhejiang,
incorporated in 2006 and
listed on the Shenzhen Stock
Exchange
3 years Equipment:
upon
installment;
Others:
30/60
days
62.9 22.6
3 /H1118/H1118/H1118/H1118Supplier J Substrates A company SiC semiconductor
materials, headquartered in
Shanxi and incorporated in
2018
3 years 60 days 50.3 18.0
4 /H1118/H1118/H1118/H1118Supplier K Substrates A company that develops SiC
single crystal materials,
headquartered in Guangdong
and incorporated in 2018
2 years 60 days 15.2 5.4
5 /H1118/H1118/H1118/H1118Supplier L Substrates A company that develops SiC
single crystal substrates,
headquartered in Hebei and
incorporated in 2012
3 years 60 days 12.9 4.6
BUSINESS
– 165 –


--- page 176 ---
Supply Chain and Inventory Management
We believe that we have effectively managed our supply chain during the Track Record Period
and up to the Latest Practicable Date. During the Track Record Period, we did not encounter any
material supply chain issues, enabling us to continuously deliver our SiC epitaxial wafer products
to our customers.
We have adopted a rigorous supplier selection process that involves supplier qualification
review, material validation, quality system audit, and risk assessment. Only after passing the
evaluation can suppliers be included in our “qualified supplier list”, thereby ensuring the stability
and reliability of the supply chain. Our inventories mainly include raw materials, finished goods,
work-in-progress (WIP), goods dispatched, and processing materials for our Consigned services.
We are actively pursuing the following supply chain and inventory management strategies:
 Long-term agreements and bulk purchasing: We flexibly adjust our supply chain and
inventory management strategies based on market supply and demand conditions. Under
the circumstances of supply shortage, we typically enter into long-term agreements with
suppliers to lock in prices and supply quantities, and reduce costs through bulk
purchasing. In contrast, we do not enter into long-term agreements with suppliers to lock
in prices and supply quantities when supply exceeds demand.
 Supply chain diversification: We actively seek to expand supplier channels to reduce
reliance on a single supplier and enhance the stability of the supply chain. Furthermore,
we are promoting domestic substitution for our core production equipment such as
epitaxial growth equipment, epitaxial inspection equipment, and cleaning equipment,
thereby reducing dependence on imported equipment.
 Inventory management optimization: We utilize advanced inventory management
systems to monitor inventory levels, ensuring stock remains within a reasonable range
and avoiding overstocking or shortages.
 Market forecasting and flexible adjustments: We regularly adjust procurement plans
based on market forecasts to ensure timely responses to demand fluctuations.
We believe that our operation is not dependent on any particular supplier. During the Track
Record Period, we maintained multiple suppliers to avoid over-reliance on any of suppliers and we
believe there is no significant difficulty to find suitable substitutes for our suppliers.
During the Track Record Period, our inventory levels fluctuated, reflecting our strategic
decision to stock and destock raw materials to effectively accommodate changing market
conditions. In order to mitigate the risk of supply chain shortage and ensure our delivery of our own
products to our customers in time, we proactively built up our strategic inventories. For the years
ended December 31, 2022, 2023 and 2024 and the nine months ended September 30, 2025, our
inventory turnover days were 106.7 days, 115.8 days, 170.2 days and 178.4 days, respectively. Our
enhanced inventory management measures have enabled us to effectively monitor and manage our
inventory levels. In accordance with these policies, we generally conduct a semi-annual review and
record corresponding impairment provisions, resulting in an increase in write-downs at mid-year.
Concurrently, we have further optimized our inventory structure by prioritizing the depletion of
aged stock. Our inventory aged over one year has decreased significantly compared to early 2025,
and the current scale of impairment has improved notably. At the second half of 2025, driven by a
substantial increase in sales orders, we strategically increased our reserves of raw materials and
finished goods to fulfill current orders and anticipate future sales demand. See “Financial
Information — Discussion of Selected Items from the Consolidated Balance Sheets — Assets —
Inventories.”
BUSINESS
– 166 –


--- page 177 ---
Overlapping of Customers and Suppliers
During the Track Record Period, we had five major overlapping customers and suppliers. The
total revenue we generated from the overlapping customers and suppliers amounted to RMB357.9
million, RMB791.2 million, RMB180.5 million and RMB68.2 million in 2022, 2023 and 2024 and
for the nine months ended September 30, 2025, respectively, and the purchases from the
overlapping customers and suppliers amounted to RMB11.2 million, RMB16.6 million, nil and
RMB0.1 million in the corresponding years/periods, respectively. Such overlapping was primarily
caused by our Consign model, under which our customers supply substrates to us for epitaxial
growth. We will then sell the epitaxial wafers to such customers. See “— Our Products and Business
Models — Our Business Models — Consign.” Our Directors have confirmed that none of our sales
to and purchases from our overlapping customer and supplier during the Track Record Period was
inter-conditional, inter-related or otherwise considered as one transaction. We negotiate the
transactions with our overlapping customer and supplier on an arm’s-length basis with reasonable
and fair pricing terms.
QUALITY CONTROL
We have established a comprehensive set of quality control and assurance procedures to
monitor our operations to ensure compliance with the regulatory requirements and quality
requirements during the entire development, manufacturing, delivery and services processes. We
strictly adhere to the requirements of the IA TF 16949 management system, implementing rigorous
quality control measures and establishing a comprehensive customer feedback and complaint
handling process to promptly and effectively address customer concerns. We have mainly
implemented the following procedures for quality control.
 Raw Material Inspection and Selection: we have established a strict certification
process for selecting qualified suppliers and a comprehensive evaluation and
introduction process for new raw materials. Additionally, we implemented rigorous
material inspection standards. For critical raw materials that have the significant impact
on the quality of our final products such as substrates, we would inspect all of the
substrates to ensure their quality.
 Production Process Monitoring: we have set up key quality control points throughout
the production process to enable on-site inspections and monitoring so that we could
identify potential issues promptly. Critical parameters and data are recorded in real-time
for subsequent analysis and traceability.
 Product Inspection and Testing: we have implemented a set of product quality
inspection standard, along with nonconforming product and abnormality management
standards. We utilize advanced inspection equipment to ensure the accuracy and
reliability of testing. Every product undergoes 100% inspection to guarantee the quality
of outgoing shipments.
 Employee Skill Training: all of our employees undergo rigorous training and pass
competency assessments. Additionally, we regularly organize professional skills and
quality awareness training to continuously improve employees’ quality consciousness
and technical proficiency.
 Quality Records and Management: we maintain a quality record system to ensure data
integrity and traceability. We conduct statistical analysis of quality data to identify
potential issues for improvement timely, fostering continuous enhancement of product
quality.
BUSINESS
– 167 –


--- page 178 ---
Our SiC epitaxial wafer products exhibit stable physical properties and typically do not have
a fixed shelf life. If it is determined that the delivered product fails to meet the technical
specifications outlined in the agreement with the customer due to quality issues, we offer return or
replacement support. In principle, there is no time limit on after-sales service, ensuring maximum
effort to maintain strong customer relationships.
During the Track Record Period, we have not experienced significant product returns,
replacements, or customer complaints.
DATA PRIV ACY AND INFORMATION TECHNOLOGY SYSTEMS
As our customers are power device companies rather than individual consumers, we do not
collect personal information from third parties for our research and development purposes. In the
course of our research and development, we process data in compliance with the applicable legal
requirements and cooperate with qualified partners responsible for desensitizing data and
anonymizing personal information to ensure the data security. See “Risk Factors — Risks Related
to Our Business and Industry — Security breaches and other disruptions could compromise our
confidential and proprietary information, which could cause our business and reputation to suffer.”
for further details describing the data privacy risks associated with our operations.
We enforce IT and data securities compliance measures through the implementation of the
Information Security Management Procedure. For technical information, we ensure data security
and business continuity by adopting practices such as data encryption, regular audits, and the
development of data backup and recovery plans, while regularly identifying and addressing
potential risks. For customer data management, we implement commercial information protection
measures and access control mechanisms to effectively safeguard customer data.
During the Track Record Period and up to the Latest Practicable Date, we have not received
any claim from any third party against us on the ground of infringement of such party’s right to data
and privacy protection as provided by any applicable laws and regulations in the PRC. See “Risk
Factors — Risks Related to Our Business and Industry — We may be subject to claims by third
parties for intellectual property infringement.”
Through continuous improvement of our information systems, we have extended the
construction of these systems to cover research and development, sales, production, quality, supply
chain, and other operational departments. This ensures strong support for the Company’s rapid
growth and swift response to market changes. Below are our key information systems.
 ERP System. We deploy ERP system as an integrated platform for financial, sales,
procurement, and production processes, ensuring smooth collaboration among the core
business departments that form the foundation of the Company’s operations.
 Manufacturing Operations Management System. We deploy Manufacturing Operations
Management system which includes multiple modules such as MES (Manufacturing
Execution System), WMS (Warehouse Management System), and PMS (Predictive
Maintenance System). Through real-time data collection and transmission, we ensure
effective control over the production process, timely delivery of production tasks,
real-time monitoring of process yield rates, and strong assurance of product quality.
 CIM System. The CIM system we have deployed encompasses subsystems such as EAP
(Equipment Automation Program), FDC (Fault Detection and Classification), SPC
(Statistical Process Control), and RMS (Recipe Management System). These
subsystems, in conjunction with the manufacturing operations system, efficiently
manage automated production equipment. By predicting equipment failures through data
BUSINESS
– 168 –


--- page 179 ---
analysis, coordinating production tasks with equipment control, and minimizing manual
intervention in the production process, we have significantly enhanced production
efficiency and product quality.
 HR System. We use HR system to manage the Company’s organizational structure,
employee attendance, recruitment, training, and performance, ensuring scientific and
efficient overall management of the Company’s human resources.
 OA System. We use OA system to implement the Company’s management system and
process, so that various departments can carry out compliance and efficient cross-
department and cross-team collaboration in daily collaboration, which greatly improves
the overall operational efficiency of the Company.
During the Track Record Period and up to the Latest Practicable Date, we did not experience
significant IT system failures or outages that adversely affected our business operations.
COMPETITION
The SiC epitaxy industry in which we operate is highly competitive and rapidly evolving with
technological innovations, changes in customer demands and preferences, frequent introduction of
new products and application fields. We face intense competition with other leading players in
various aspects of our business, including product design, manufacture and consumer experience.
See “Industry Overview.” See “Risk Factors — Risks Related to Our Business and Industry — We
face substantial competition.”
We believe that we have established our competitive moat. We possess extensive R&D
expertise and large-scale production experience, and we continue refining our SiC foundry
technology to deliver top-tier SiC epitaxial wafers. Furthermore, we have established stable
collaborations with leading semiconductor companies and reputable suppliers, which allows us to
consistently strengthen our market share.
EMPLOYEES
As of December 31, 2022, 2023 and 2024 and September 30, 2025, we employed an aggregate
of 402, 833, 592 and 532 full-time employees, respectively. The number of our full-time employees
increased from 402 as of December 31, 2022 to 833 as of December 31, 2023, primarily because
we experienced continuous business expansion and capacity ramp-up, leading to an increase in our
business scale and staff. The number of our full-time employees subsequently decreased to 592 as
of December 31, 2024 and 532 as of September 30, 2025, primarily attributable to our ongoing
efforts in digitalization and automation, as well as the introduction of more efficient equipment,
leading to significant improvements in overall work efficiency. These efforts reduced demand for
staff and labor, especially for production related functions. The following table sets forth a
breakdown of the number of our employees as of December 31, 2022, 2023, and 2024, respectively,
by work function.
As of December 31,
As of
September 30,
2022 2023 2024 2025
Research and Development /H1118/H1118/H1118/H111867 141 124 106
Production /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118289 627 400 356
Sales and Marketing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877 1 11 3
General and Administrative /H1118/H1118/H1118/H111839 58 57 57
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118402 833 592 532
BUSINESS
– 169 –


--- page 180 ---
Substantially all of our employees are based in the PRC. Our success depends on our ability
to attract, retain and motivate qualified personnel, and we have adopted high standards and strict
procedures in our recruitment, including campus recruitment, online recruitment and internal
referral. We recruit employees based on their educational background, relevant experience in
similar positions and professional qualifications, as well as our expansion strategy and job
vacancies. We offer competitive compensation for our employees. In addition, we provide bonus
regularly to employees who make contributions to our technological innovation. Also, for those
with outstanding work performance, we reward them with higher compensation or promotion. We
also enhance the development of corporate culture and employee engagement by organizing various
activities and trainings to enrich employee’s professional skills, boost morale, and improve the work
environment.
We entered into confidentiality and non-compete agreements with all employees. These
agreements stipulate that employees must maintain lifelong confidentiality regarding the
Company’s trade secrets and that intellectual property created by employees during their tenure
belongs to the Company. We also enforce non-compete clause with employees with access to the
Company’s core technologies and trade secrets. Under this clause, employees are prohibited from
joining competing companies operating in the SiC industry chain for a period of two years after
their departure. During this non-compete period, the Company provides monthly compensation.
As required by PRC laws and regulations, we participate in various employee social security
schemes organized by municipal and provincial government, including pension, maternity
insurance, unemployment insurance, work-related injury insurance, health insurance and housing
provident fund.
We believe that we maintain a good working relationship with our employees, and we have
not experienced any significant labor disputes or any difficulty in recruiting staff for our operations
during the Track Record Period and up to the Latest Practicable Date.
INSURANCE
Pursuant to PRC regulations, we provide social insurance including pension insurance,
unemployment insurance, work-related injury insurance, maternity insurance and medical insurance
for our employees based in China. We also purchase supplemental employer’s liability insurance to
cover generic risks that may arise from our ordinary course of business and property insurance to
safeguard our property and mitigate risks of various accidental losses. Our Directors consider our
insurance policy as a whole is in line with the general market practice and complies with the
relevant rules and regulation in China. See “Risk Factors — Risks Related to Our Business and
Industry — We may not have sufficient insurance coverage to cover our potential liability or
losses.”
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
We are committed to fostering sustainable practices, promoting social responsibility, and
maintaining strong governance standards, reflecting our dedication to Environmental, Social, and
Governance (“ESG”) principles. We have established environmental and occupational health and
safety management systems, as well as a production safety system. We have developed a
comprehensive set of policies and procedures covering aspects including environmental protection,
production safety, employee welfare, and anti-corruption efforts.
As our clients increasingly emphasize the importance of ESG management, many of them
have integrated ESG-related criteria into the compliance audits of our production operations. The
audit processes include online reviews, completion of ESG checklists, and CSR checklists. During
compliance audits conducted by our clients, the ESG-related evaluation typically encompasses
areas including environmental management, greenhouse gas emissions, energy use, ethical business
practices, legal compliance, labor rights, human rights, and occupational health and safety. There
BUSINESS
– 170 –


--- page 181 ---
has not been any material adverse findings from our customer compliance audits on our Group as
of the Latest Practicable Date. Our operations and facilities comply with extensive environmental,
health, and safety laws and regulations. These include the management of hazardous materials and
the disposal of hazardous and harmful waste produced by our facilities. We also actively reduce
energy consumption and waste generation by upgrading production processes. We are committed to
creating a positive work environment for all employees. We place significant emphasis on employee
safety and welfare. We regularly conduct relevant skills training for our employees to enhance
workplace safety. We have introduced independent directors into our board to oversee the effective
implementation of our corporate governance initiatives.
ESG Governance
We are fully aware of our responsibilities to promote corporate social responsibility and
integrating it into all major aspects of our business operations. We are committed to complying with
ESG reporting requirements and we strive to carry out our business in a manner that protects the
environment and the health and safety of our employees and we plan to establish a committee
specifically tasked with the implementation of ESG-related measures. To effectively manage ESG
issues, we plan to establish a set of ESG policies, in accordance with the standards of Appendix C2
to the Listing Rules, which outlined, among others, (i) the appropriate risk governance on ESG
matters, including climate-related risks and opportunities, (ii) ESG strategy formation procedures,
(iii) ESG risk management and monitoring, (iv) the identification of key performance indicator
(“KPI”) and (v) the relevant measurements and mitigating measures. Our Board of Directors will
be responsible for ESG decision-making, governance and supervision. This includes, among others,
(i) the formulation and revision of ESG strategies, framework and policies; (ii) the assessment,
management and control of ESG risks; (iii) the review of ESG objectives and evaluation of the
implementation of ESG objectives; (iv) the examination of the ESG management systems and
reports; and (v) the provision of oversight and guidance on ESG matters. Our Board of Directors
serves as the highest governance body concerning ESG matters. We have dedicated personnel
responsible for identifying applicable laws, regulations, and industry standards. Their focus
encompasses a range of ESG risks, including environmental protection, production safety, employee
welfare, anti-corruption, and community engagement. We have adopted a comprehensive set of ESG
policies in accordance with the standards set forth by the Listing Rules. This includes, but is not
limited to, our “Corporate Environmental, Social, and Governance Management Manual” and
“Corporate Social Responsibility Management Policy.” We have also established an “Environmental
and Occupational Health and Safety Management System,” which is certified under the ISO 45001
standard.
Through regular ESG-related training, we seek to promote and provide guidance on
ESG-related knowledge to all employees and the management. The Board will supervise the
preparation of our ESG reports and conduct a thorough review of these reports. We plan to develop
a set of ESG strategies. These procedures include formulating plans that clearly define the measures
to be taken, responsible personnel, timelines and the metrics for evaluating goal achievement, as
well as inspections conducted from time to time to promptly correct any issues identified and report
on the implementation status of the plans. In addition, we are committed to transparency in our ESG
performance. Our ESG goals and metrics will be disclosed in the annual ESG reports, providing
stakeholders with information on our progress and performance.
ESG Risk Identification, Assessment and Management and Opportunities
We regularly assess ESG-related risks and our Board remains well-informed of the major risks
faced by the Company and the current status of risk management, enabling it to make effective risk
control decisions and to consider and approve the risk assessment of major decisions and solutions
to major risks, all while maintaining effective control over various operations and matters within
an acceptable level of risk tolerance. Regarding the materiality assessment process and factors, we
place great emphasis on the control of ESG risks and the enhancement of our governance framework
and management mechanisms. Specifically:
BUSINESS
– 171 –


--- page 182 ---
 We take a comprehensive approach to consider the interests of various stakeholders,
including employees, investors, customers, suppliers, and community members. We are
committed to creating a safe, equal, and respectful working environment for our
employees, implementing standardized safety production practices, and conducting
regular safety education and training. We actively respond to ESG-related concerns from
investors and customers, incorporate ESG factors into the evaluation and assessment of
suppliers, and fulfill our social responsibilities.
 We continuously monitor and assess environmental and climate-related risks that may
affect our business, strategy, and financial performance.
 Upholding the principles of sustainable development, we actively fulfill our
environmental responsibilities. Through our comprehensive environmental management
system, stringent pollution control measures, and ongoing investment in environmental
protection, we have achieved significant results in environmental governance. This
includes effective waste management, control of emissions, risk management related to
environmental factors, and greenhouse gas emissions management. We have designated
personnel responsible for collecting and analyzing pollutant emission indicators during
production processes and tracking improvement outcomes.
 In addressing climate change, we have implemented a series of initiatives aimed at
optimizing our energy structure, enhancing energy efficiency, promoting green office
practices, and strengthening our carbon footprint management.
The following section sets out our assessment of actual and potential ESG-related risks:
Environmental Risks
Natural disasters, public health emergencies, or other unforeseen events pose risks to our
operations. These events could disrupt production and supply chains, leading to potential financial
losses and operational downtime. See “Risk Factors — Risks Related to Our Business and Industry
— We may be subject to natural disasters, health epidemic, acts of war, terrorism or other factors
beyond our control.” Water resources, particularly ultrapure water, are critical for the production of
SiC epitaxial wafers, and any shortages could severely hinder our production capabilities.
Additionally, the implementation of more stringent waste disposal requirements may increase the
likelihood of environmental pollution and regulatory violations, which could result in hefty fines
and reputational damage.
Climate-Related Risks
Our production facilities are exposed to physical risks from extreme weather events such as
typhoons and heavy rains. These extreme weather conditions can cause power outages, flooding,
and other disruptions, which could lead to safety issues, forced suspension of research and
production activities, and increased operating costs. The impact on our production capabilities
could be significant, potentially causing delays and financial losses.
In addition, guided by the principles of the Task Force on Climate-related Financial
Disclosures (TCFD), we assess climate-related risks over short-term (0-3 years), medium-term
(3-10 years), and long-term (10+ years) periods to inform our planning.
Short-term physical risks, driven by climate change, include extreme weather events like
typhoons, heavy rainfall, flooding, and rising temperatures, pose threats to our production facilities,
supply chain stability, and operational continuity. Over the medium term, rising sea levels and
extended heatwaves may require costly upgrades or relocation of facilities, with energy costs
potentially increasing due to higher cooling demands. Looking further ahead, long-term climate
shifts could disrupt raw material availability, particularly for water-intensive processes, potentially
BUSINESS
– 172 –


--- page 183 ---
reducing production capacity by 10-15% by 2040 if not addressed. Transition risks, stemming from
the global move toward a low-carbon economy, present additional challenges through changing
regulations, investor expectations, and customer preferences.
In the coming years, new ESG-related rules, such as carbon taxes, could increase annual
operating costs with non-compliance risking fines and production delays. Over the medium term,
heightened investor focus on ESG performance could raise our cost of capital by 1-2% if we fall
short of sustainability standards, while shifting consumer demand toward sustainable products may
lead to a revenue drop by 2030 if we fail to adapt. In the long term, achieving carbon neutrality to
meet net-zero goals may require heavy investment to transform production processes, with the risk
of obsolete infrastructure. We actively track national and global regulatory changes, compare our
ESG performance to industry peers, try to stay ahead of these challenges.
Growing scrutiny of our ESG performance by regulators, investors, and customers may expose
us to transition risk. The ongoing implementation of ESG-related regulations is elevating the
expectations for corporate practices and disclosures in areas such as emissions and resource
utilization. Investors are increasingly prioritizing ESG principles, incorporating corporate ESG
performance into their decision-making processes. Meanwhile, our customers are becoming more
aware of ESG impact, favoring products that incorporate sustainable elements in their design and
production. See “Risk Factors — Risks Related to Our Business and Industry — We are subject to
changing laws, regulations and social trends regarding environmental, social and governance risks,
which may increase our operational costs and our risk of non-compliance despite our effort to be
law-abiding and rule compliant. Compliance with evolving regulations may also cause delays in our
production.”
Regulatory Risks
Compliance with PRC laws and regulations related to environmental, safety, and occupational
health matters presents social risks. Maintaining strict compliance is essential to avoid legal issues
and ensure the safety and well-being of our employees and communities. Failure to fully adhere to
these regulations can lead to substantial fines or other liabilities, and adversely affect our business,
financial condition, and operating results. See “Risk Factors — Risks Related to Our Business and
Industry — We are subject to changing laws, regulations and social trends regarding environmental,
social and governance risks, which may increase our operational costs and our risk of non-
compliance despite our effort to be law-abiding and rule compliant. Compliance with evolving
regulations may also cause delays in our production.”
Goals and Measures
To mitigate the identified risks, we have established quantitative targets and implemented
various measures aimed at reducing the environmental, social, and climate-related impacts on our
business. Our quantitative targets for 2030 include a 5.0% reduction in energy consumption and in
water consumption per wafer compared to 2024.
We plan to establish internal procedures and collaborate with third parties to monitor changes
in ESG-related laws and regulations, assess their applicability, and ensure our adherence to the
relevant requirements. We have incorporated environmental criteria into our supplier selection
process to ensure alignment with our policy on energy saving, emission reduction and clean
production. During the Track Record Period and up to the Latest Practicable Date, we were not
subject to any penalties for non-compliance with relevant regulations on environmental, social and
governance.
BUSINESS
– 173 –


--- page 184 ---
Environmental Protection
Our business operations comply with the Law of the People’s Republic of China on the
Prevention and Control of Air Pollution, the Law of the People’s Republic of China on the
Prevention and Control of Environmental Pollution by Solid Waste, the Law of the People’s
Republic of China on Energy Conservation and various present laws and regulations on
environmental protection promulgated by the PRC regulatory authorities which have material
effects on our operations.
We have adopted an environmental evaluation and control policy as the foundational
document for our environmental management, guiding our internal environmental management
practices and signifying our commitment to external stakeholders. We plan to formulate additional
internal policies to facilitate environmental protection practices in our everyday operations.
Unless otherwise specified, the scope of our report on environmental protection performance
indicators covers the Company and our wholly-owned subsidiary, Epiworld Materials.
We pay close attention to resource consumption, greenhouse gas emissions and waste disposal
in our operations, and we actively seek to optimize our business and production processes to
manage the environmental and climate-related risks.
 Resource consumption. We primarily utilize resources such as energy, water, paper, and
packaging materials in our daily operations. We actively promote energy saving and
consumption reduction to reduce resource usage. The following table sets forth a
breakdown of the consumption of energy, water, paper, and packaging materials during
the years indicated:
Y ears Ended December 31,
2022 2023 2024
Energy consumption (MWh) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,456.86 44,031.40 43,390.16
Energy consumption intensity
(MWh per employee) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838.54 52.86 73.29
Water consumption (m3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,636.77 288,091.67 300,221.00
Water consumption intensity
(m3 per employee) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118233.34 345.84 507.13
Paper consumption (tonne) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.0011 0.0013 0.0016
Paper consumption intensity
(tonne per employee) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.57 1.58 2.74
Packaging materials (tonne) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.11 14.29 13.29
Packaging materials intensity
(tonne per employee) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.01 0.02 0.02
 Greenhouse gas emission. Our Scope 1 emission represents direct GHG emissions
generated from the use of gasoline from the Company’s vehicles. Our Scope 2 emission
represents indirect GHG emissions generated from the use of purchased electricity. Our
Scope 3 emission represents other indirect GHG emissions generated from paper
disposal, business air travels, water consumption and sewage treatment. Committed to
reducing environmental impact through better service provision, product selection, and
usage, we have adopted systematic polices on the management of GHG emissions, in
accordance with relevant laws and regulations as well as our business operation. For
Scope 1, we implement policies of effective resource use by exploring opportunities of
less fuel consumption in any manufacturing process. For example, we encourage our
employees to actively participate in energy conservation, resource recycling, and other
initiatives to promote sustainable development. For Scope 2, we have energy
BUSINESS
– 174 –


--- page 185 ---
conservation guidance to reduce related emissions. For example, we recommend turning
off office lights when not in use and maximize the use of natural light whenever
possible. We also encourage our employees to set computers and monitors to enter
power-saving or sleep mode and unplug electrical appliances when not in use. For Scope
3, we are committed to actively promoting sustainability principles in each aspect of our
operations, including supply chain management and our daily activities to contribute to
the sustainable development of our industry. We actively promote the best environmental
management practices within the industry, sharing experiences and achievements with
peers. The following table below sets forth a breakdown of our Scope 1, Scope 2, and
Scope 3 emissions for the years indicated:
Y ears Ended December 31,
2022 2023 2024
Total GHG emission (tonne of CO 2
equivalent) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,054.71 46,931.67 63,570.63
Scope 1 (tonne of CO 2 equivalent) /H1118/H1118/H1118201.82 700.68 463.30
Scope 2 (tonne of CO 2 equivalent) /H1118/H1118/H111810,040.33 26,859.74 26,463.92
Scope 3 (tonne of CO 2 equivalent) /H1118/H1118/H1118812.55 19,371.25 36,643.41
Total GHG emission intensity (tonne
of CO 2 equivalent per employee) /H1118/H1118/H111825.89 56.34 107.38
 Waste disposal. The wastes generated in our daily operations include air emissions,
hazardous waste and non-hazardous waste. Our air emissions comprise mobile fuel
emitted from our vehicles in 2023 and 2024. Our hazardous waste includes lubricant oil,
HW49, and HW13, all of which are handled by incineration. Our non-hazardous waste
includes industrial waste such as construction waste, material and facility equipment
packaging, and others. Our non-hazardous waste is collected and transported by vendors
and ultimately incinerated. To ensure that our waste disposals are compliant with
relevant laws and regulations, we engaged third-party testing agencies to conduct
evaluation. The following table sets forth a breakdown of the wastes generated during
the years indicated:
Y ears Ended December 31,
2022 2023 2024
Air emissions
Nitrogen oxides (kg) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–(1) 1.27 1.72
Sulphur oxides (kg) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–(1) 0.25 0.34
Particulate matter (kg) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–(1) 0.09 0.13
Hazardous waste (tonne) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.91 457.81 696.69
Hazardous waste intensity
(tonne per employee) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.02 0.55 1.17
Non-hazardous waste (tonne) /H1118/H1118/H1118/H1118/H1118/H1118/H1118–(2) 66.68 29.80
Non-hazardous waste intensity (tonne
per employee) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–(2) 0.08 0.05
Notes:
(1) There are no records available for air emissions in 2022 as we did not retain data for mobile fuel used
during that year.
(2) There are no records available for non-hazardous waste in 2022.
BUSINESS
– 175 –


--- page 186 ---
Metrics and Targets
We employ a set of metrics, targets and measures to assess and manage the environmental
risks impacting our business. These efforts are aimed at reducing the consumption of energy and
water, thereby mitigating the environmental footprint of our operations.
Metric Target Timeline Measures
Energy consumption
and density /H1118/H1118/H1118/H1118
We aim to reduce
energy consumption
by 5.0% per wafer
compared to 2024
levels.
By December 31,
2030.
To achieve this target, we plan to develop
internal policies and systems to
standardize our use of energy.
Furthermore, we have adopted energy
saving measures such as maintaining
optimal air conditioning temperatures,
advocating the rational use of lifts, and
promoting the use of energy-efficient
appliances. We also require employees to
switch off lights and electronic devices
when they leave, and continuously carry
out campaigns and activities on energy-
saving skills, energy saving behaviors
and other topics related to environmental
protection for the purposing of
encouraging employees to jointly create
a green office environment.
Water consumption
and density /H1118/H1118/H1118/H1118
We aim to reduce water
consumption by
5.0% per wafer
compared to 2024
levels.
By December 31,
2030.
To achieve this target, we have
implemented water saving projects and
relied upon storage systems to recycle
and reuse water. We have also
formulated internal policies and systems
to utilize and manage water resource in a
sustainable manner. Additionally, we
require employees to close faucets after
use, and we have put up water saving
reminder labels to raise our employees’
water saving awareness.
GHG emission /H1118/H1118/H1118/H1118We aim to reduce GHG
emission by 10% in
Scope 2 compared to
2024 levels.
By December 31,
2030.
To achieve this target, we have formulated
formal emission reduction policies
related to utilizing green electricity
sources and upgrading certain lighting
facilities in our plants to reduce energy
consumption.
Waste disposal /H1118/H1118/H1118We aim to reduce
non-hazardous waste
disposal by 10%
compared to 2024
levels.
By December 31,
2030.
To achieve this target, we plan to
implement strategies to reduce waste
generation during our business activities,
such as increasing material recycling
rates and promoting low-carbon disposal
methods.
BUSINESS
– 176 –


--- page 187 ---
Social Responsibility
Employment and Care
We are committed to creating a diverse, equal and positive work environment and
development platform for our employees. Our workforce comprised 402, 833, 592 and 532
dedicated employees as of December 31, 2022, 2023 and 2024 and September 30, 2025,
respectively. For further details on employment, see “— Employees”.
We strictly comply with the Labor Law of the PRC, the Labor Contract Law of the PRC and
the Provisions on Prohibition of the Use of Child Labor and other pertinent laws and regulations.
We established comprehensive policies, including the (i) Employee Manual, (ii) New Hire
Management Policy, (iii) Business Code of Conduct, and (iv) Whistle-blower Protection
Management Policy, to guarantee that our employment practices are both lawful and compliant.
We are guided by the principles of openness, fairness and justice and provide equal
opportunities to all employees and job seekers. We hire employees based on their merits, following
the principles of lawfulness, fairness, equality, voluntariness, consensus, honesty and credibility.
We have established a series of key employment policies, including the “Employee Handbook,”
“Recruitment Management Regulations,” and “Corporate Social Responsibility Management,” to
ensure that all employees receive equitable treatment in areas such as hiring, compensation, training
opportunities, promotions, terminations, and retirement. We strictly prohibit discrimination based
on ethnicity, race, nationality, religion, gender, age, or any other status. We have implemented the
“Training Management Procedure,” which outlines requirements for employee onboarding, pre-job
training, and on-the-job training. This ensures that employees receive comprehensive training to
acquire the skills necessary for their roles. Additionally, our “Employee Promotion Management
Regulations” clearly define the promotion criteria for various job levels, providing employees with
a transparent career development pathway. The company is certified under the ISO 45001 standard.
We diligently comply with legal and regulatory requirements related to occupational health,
including regular health check-ups and assessments of occupational hazards. We adhere to
safety-related laws and regulations and have established safety management documents such as the
“Hazard Identification, Evaluation, and Control Procedure” and the “Environmental and
Occupational Health Safety Monitoring Plan,” which facilitate regular assessments of our safety
risk status. We have developed the “Employee Handbook” and “Employee Termination
Management Regulations” to standardize the termination process, ensuring compliance with
labor-related laws and regulations. Furthermore, we have established the “Employee Incentive and
Satisfaction Management Procedure,” which includes mechanisms for employee feedback. We also
provide an open channel for feedback and complaints through the “Employee V oice” feedback
hotline and email. During the Track Record Period and up to the Latest Practicable Date, there were
no incidents in violation of the Company’s policies or relevant laws and regulations pertaining to
child labor, forced labor, labor trafficking or employee discrimination.
The table below presents the composition of our workforce.
Y ears Ended December 31,
2022 2023 2024
(%) (%) (%)
Total Number /H1118/H1118/H1118 402 100.0 833 100.0 592 100.0
By Gender /H1118/H1118/H1118/H1118/H1118/H1118Male 288 71.6 621 74.6 421 71.1
Female 114 28.4 212 25.5 171 28.9
By Age Group /H1118/H1118/H1118Below 30 240 59.7 628 75.4 407 68.8
30 – 50 154 38.3 199 23.9 179 30.2
Over 50 8 2.0 6 0.7 6 1.0
BUSINESS
– 177 –


--- page 188 ---
Y ears Ended December 31,
2022 2023 2024
(%) (%) (%)
By Geographical
Region /H1118/H1118/H1118/H1118/H1118/H1118/H1118China 399 99.3 830 99.6 588 99.3
Malaysia ––––1 0 . 2
Australia 1 0.3 1 0.1 1 0.2
United States 2 0.5 2 0.2 2 0.3
By Employment
Type /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Senior
Management 8 2.0 7 0.8 7 1.2
Middle
Management 48 11.9 71 8.5 70 11.8
General Staff 346 86.1 755 90.6 515 87.0
Development and Training
Recognizing that the cultivation and expression of our employees’ personal values are integral
to our overall value, we provide a comprehensive training system and development channels for our
employees.
To support professional development, we provide our employees with onboarding training and
on-the-job training. The onboarding training for employees includes explaining professional
knowledge, internal policies and procedures, and company culture and values. The on-the-job
training is provided based on the specific work requirements. At the same time, we also provide
relevant leadership training for managers at different levels to help managers improve their team
management skills and continue to move towards better management positions.
Occupational Health and Safety
We are committed to providing and maintaining a healthy and safe workplace for our
employees. The Company has obtained ISO45001:2018 for Occupational Health and Safety
Management System. To mitigate the risks in the workplace that may endanger the health of
employees or damage the property of the Company, we have formulated safety management of
hazardous chemicals and pollution prevention and control strategies. We are in the process of
developing additional procedures to establish operating standards and emergency response
protocols.
We have implemented measures and policies include, but are not limited to, the Environmental
Health and Safety Management Manual, the Potential Hazard Identification and Management
Measures, the Operator Safety Procedures Related to SiC Epitaxy Production Operations and
various types of procedural documents and management measures that outline our operating
standards, emergency response protocols, safety management of hazardous chemicals and control
strategies.
We regularly provide EHS training to our employees in accordance with our internal policies
to ensure adherence to relevant laws and regulations. We also remind our employees to take safety
precautions and enhance their safety awareness on a daily basis. During the Track Record Period
and up to the Latest Practicable Date, we did not experience any work-related fatalities or material
work-related injuries or incur penalties arising from any material non-compliance with work-related
safety laws and regulations. During the Track Record Period and up to the Latest Practicable Date,
our rate of material workplace injuries was 0.0%.
BUSINESS
– 178 –


--- page 189 ---
Supply Chain Management
We have established procedures related to supplier selection and management, which include
a rigorous supplier vetting and approval process, as well as detailed protocols for ongoing
monitoring and review of our suppliers, to mitigate risks relating to our supply chain and build a
more environmentally friendly supply chain. To support our climate-related objectives, we actively
engage our supply chain by communicating our environmental goals and policies. We encourage
suppliers to collaborate in achieving these targets by providing relevant data, such as greenhouse
gas (GHG) emissions and details of their energy-saving and carbon reduction initiatives. This
approach enables us to assess and mitigate climate-related risks across the supply chain, ensuring
alignment with our sustainability strategy. We have adopted a rigorous supplier selection process
that involves supplier qualification review, material validation, quality system audit, and risk
assessment. Our supplier selection process stringently governs the entry criteria for suppliers and
conduct regular assessments and evaluations of supplier qualifications to ensure compliance with
our environmental and social responsibility requirements. Only after passing the evaluation can
suppliers be included in our “qualified supplier list”, thereby ensuring the stability and reliability
of the supply chain.
After the selection process, we have also established a systematic supply chain management
framework to assess the comprehensive performance of our suppliers, focusing on their
commitments to corporate social responsibility, environmental safety and health, and hazardous
substance control. Our approach is guided by policies such as the “Supplier Development
Management Process” and the “Code of Business Conduct.” We conduct multidimensional
evaluations and scoring of suppliers based on several criteria, including internal management
structure, strict entry standards, execution of supplier integrity agreements and confidentiality
agreements, and continuous compliance and regular assessments. Our evaluations cover various
aspects, including supply capacity and risk levels. Based on the results of these risk assessments,
we develop supplier audit plans to conduct audits and performance evaluations.
Product Liability
We have established a comprehensive set of quality control and assurance procedures to
monitor our operations to ensure compliance with the regulatory requirements and quality
requirements during the entire development, manufacturing, delivery and services processes. For
details on product liability, please see “— Quality Control.”
Anti-corruption
We attach great importance to business ethics and integrity, and have formulated a series of
policies such as the Employee Integrity and Self-Discipline Management Measures and the
Business Code of Conduct. In addition, all employees are required to sign the Integrity and
Self-Discipline Guarantee upon joining the Company. We also conduct occasional training,
meetings and presentations regarding anti-corruption.
To prevent and detect fraud, we established internal control mechanisms that include hotlines,
emails and offline options, are open to employees at all levels and any external parties in society
who have direct or indirect economic relations with the Company. All submissions are investigated
in accordance with an approved investigation plan. The internal audit department will fully protect
the confidentiality of the whistle-blowers, and the information of all whistle-blowers will be kept
strictly confidential. Furthermore, we require our suppliers to enter into integrity agreements and
to promise in writing to comply with the requirements of ethical conduct stipulated in the
agreement.
As of the Latest Practicable Date, we were not involved in any legal proceedings in relation
to corruption, bribery or fraud.
BUSINESS
– 179 –


--- page 190 ---
PROPERTIES
Our principal executive office is located in Xiamen, China. We own and occupy certain land
parcels and buildings in the PRC for our business operations. These owned properties are used for
non-property activities as defined under Rule 5.01(2) of the Listing Rules. As of the Latest
Practicable Date, we owned two land parcels with a total site area of 96,721.6 sq.m., seven
properties with a total gross floor area of 42,777.5 sq.m. in the PRC, and one construction-in-
progress with an expected gross floor area of approximately 93,027.0 sq.m in the PRC. These
properties are primarily used as our manufacturing facilities, warehouses and offices to support our
business operations. The Company has two major construction projects, Phase I and Phase II, of
which Phase I has completed construction and property ownership registration procedures, and
Phase II is under construction. According to our PRC Legal Adviser, we have obtained all material
licenses, permits and certificates with respect to land and properties as required by relevant PRC
laws and regulations.
According to section 6(2) of the Companies (Exemption of Companies and Prospectuses from
Compliance with Provisions) Notice, this Prospectus is exempted from compliance with the
requirements of section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance in relation to paragraph 34(2) of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, which requires a valuation report with respect to all our
interests in land or buildings, for the reason that, as of the Latest Practicable Date, none of the
properties owned or occupied by us had a carrying amount of 15% or more of our consolidated total
assets.
As of the Latest Practicable Date, we currently do not lease any properties from third parties.
LICENSES, APPROV ALS AND PERMITS
The following table sets forth the details of the material licenses and permits necessary for the
business operations in which we engaged in China.
License/Permit
Entity Holding the
License/Permit Grant Date Expiration Date
Enterprise Intellectual
Property Management
System Certification /H1118/H1118/H1118
The Company 2025.07.01 2028.07.07
High and New Technology
Enterprise /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Company 2023.12.07 2026.12.06
Environmental
Management System
Certification /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Company 2025.11.20 2028.12.16
Occupational Health and
Safety Management
System Certification /H1118/H1118/H1118
The Company 2025.11.20 2028.12.12
ISO Quality Management
System Certification /H1118/H1118/H1118
The Company 2025.10.13 2028.12.16
IA TF Quality Management
System Certification /H1118/H1118/H1118
The Company 2025.10.09 2028.10.08
Receipt on Customs Import
and Export Consignor
and Consignee
Registration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Company 2011.11.14 –
(1)
BUSINESS
– 180 –


--- page 191 ---
License/Permit
Entity Holding the
License/Permit Grant Date Expiration Date
Permit for the Discharge
of Urban Sewage into
Drainage Network /H1118/H1118/H1118/H1118/H1118
The Company 198#: 2023.11.29
196#: 2025.02.26
198#: 2028.11.28
196#: 2030.02.25
Registration Form of
Pollution Discharge for
Fixed Pollution Sources
and Receipt on the
Registration of Pollution
Discharge for Fixed
Pollution Sources /H1118/H1118/H1118/H1118/H1118
The Company 198#: 2024.01.29
196#: 2024.01.17
198#: 2029.01.28
196#: 2029.01.16
Note:
(1): The customs registration receipt for consignees and consignors of imported and exported goods that the
Company obtained remains effective for long term and does not have an expiration date as of the Latest
Practicable Date.
During the Track Record Period and up to the Latest Practicable Date, we had obtained all
material licenses, permits, approvals and certificates necessary to conduct our actual business
operations from the relevant government authorities in the PRC, and such licenses, permits,
approvals and certificates remained in full effect.
IMPACT OF TRADE RESTRICTIONS AND TARIFFS
Since February 2025, the U.S. administration has cumulatively imposed additional 145%
tariffs on Chinese imports. On April 11, 2025, China responded by increasing tariffs on U.S. goods
to 125%. On May 12, 2025, China and the U.S. announced that an agreement has been reached,
under which the U.S. would reduce the tariff on Chinese imports to 30% from its current 145%,
while Chinese duties on U.S. imports will fall to 10% from 125% for the next 90 days, which was
extended for 90 days by mutual agreement on August 11, 2025. On October 10, 2025, U.S. president
Donald Trump said the U.S. would impose new tariffs of 100% on imports from China starting
November 1, 2025. On November 1, 2025, the U.S. government released a fact sheet that documents
the latest actions to be taken by the U.S. and Chinese governments to relax tariff and other trade
controls as a result of a trade and economic deal reached between the two sides. The U.S. will,
among other measures, lower the tariffs on Chinese imports by removing 10 percentage points of
the cumulative rate, effective November 10, 2025, and will maintain its suspension of heightened
reciprocal tariffs on Chinese imports until November 10, 2026. The U.S. will further extend the
expiration of certain Section 301 tariff exclusions, currently due to expire on November 29, 2025,
until November 10, 2026. The U.S. also will suspend for one year, starting on November 10, 2025,
the implementation of the interim final rule titled Expansion of End-User Controls to Cover
Affiliates of Certain Listed Entities. These are all measures to relax tariff and other trade controls,
and therefore the Directors and legal adviser engaged in connection with the foregoing matters are
of the view that these recent regulatory developments do not have any material adverse impact on
the Group’s business operations and financial performance. Our Directors will continue to monitor
developments regarding relevant tariffs.
We do not rely on any U.S.-originated technologies or raw materials for our operations. In
addition, substrate is our primary raw material. With the ongoing advancements in the substrate
supply chain, domestic manufacturers are now capable of providing alternatives to imported
substrates. The increased supply, cost advantages of domestic manufactured substrates and
technological developments in producing more cost-effective substrates have led to an overall
decline in raw material prices. We have established stable procurement arrangements with domestic
substrate suppliers, which has reduced raw material costs and enabled us to offer competitive prices.
BUSINESS
– 181 –


--- page 192 ---
During the Track Record Period, revenue generated from North America accounted for 3.2%,
6.5%, 3.4%, 3.6% and 2.8% of our total revenue in 2022, 2023 and 2024 and for the nine months
ended September 30, 2024 and 2025, respectively. We do not expect our sales to the U.S. to increase
significantly and does not have plan to devote significant resources to expand our sales in the U.S.
Given our limited export and import activities in connection with the U.S. during the Track
Record Period and up to the Latest Practicable Date and the latest agreement between the U.S. and
China on lowering tariff rates for the 90 days aftermath, our Directors believe that the recent tariffs
have had no material or immediate direct or indirect impact on our supply chain, production,
operations and financial performance during the Track Record Period and up to the Latest
Practicable Date. Furthermore, as we currently do not target nor plan to shift our strategic focus to
the U.S. market and the U.S. market is not expected to account for a significant portion of our
revenue, our Directors are of the view that the recent tariffs will not have any material adverse
impact, directly or indirectly, on our operations and financial performance in the near to mid term.
We have reviewed and analyzed our engineering data and data on our use and transfer of items
to their parties, and we understand that the items we export from the U.S. or transfer to third parties
are all classified as either EAR99 or in an ECCN subject only to anti-terrorism controls, and we
understand that we do not transfer any anti-terrorism controlled items subject to the EAR to any
third parties. In addition, (i) we manufacture our products in the PRC without any presence in the
U.S.; (ii) we do not incorporate or bundle any U.S.-origin items into our end products; and (iii) we
do not sell or transfer hardware, software or technology (technical data) to destinations that subject
to comprehensive embargo by the U.S. government. Based on these factors, we conclude the U.S.
export control have had no material or immediate direct or indirect impact on our operations and
financial performance during the Track Record Period and up to the Latest Practicable Date. Our
Directors are also of the view that the restrictions imposed by the EAR, including the BIS 2022/23
IFRs, have not had any material adverse impact on our operations or financial performance as of
the Latest Practicable Date.
That said, we acknowledge that tariffs have historically contributed to increased trade and
political tensions, particularly between the U.S. and China, as well as with other trading partners.
Such tensions may negatively affect trade volume, cross-border investment, technological
exchange, and other international economic activities. In turn, this could have a material adverse
impact on global economic conditions and the stability of financial and capital markets. Heightened
geopolitical uncertainty and the risk of further escalation may also discourage investment in
securities issued by China-based companies, including ours, and weigh on the broader
macroeconomic environment. See “Risk Factors — Risks Relating to Our Business and Industry —
Our business, financial condition and results of operations may be materially and adversely affected
by geopolitical tensions, international trade policies, international export controls and economic
sanctions.”
LEGAL PROCEEDINGS AND COMPLIANCE
During the Track Record Period and up to the Latest Practicable Date, we had not been
involved in any actual or pending legal, arbitration or administrative proceedings (including any
bankruptcy or receivership proceedings) that we believe would have a material adverse effect on our
business, results of operations, financial condition or reputation and compliance.
We, our shareholders, affiliates, Directors, Supervisors, senior management and employees
may be involved from time to time in disputes with various parties, including but not limited to our
customers, suppliers, competitors, employees, former shareholders, device providers, insurers and
banks. For example, in January 2025, Tang Xiuhao ( ಷӸႴ), our former shareholder and an
Independent Third Party, brought a legal action against Dr. Zhao as defendant and our Company as
a third party, among others, alleging and requesting the court to confirm that the subscription of Dr.
Zhao for the 50% equity interest of the Company upon its establishment in 2011 was inaccurate
capital contribution ( ̈༟ʔྼ) over the transfer of the bipolar junction transistor (“BJT”)
technology. BJT is a current-controlled device. SiC BJTs, in particular, are distinguished by their
BUSINESS
– 182 –


--- page 193 ---
ability to operate reliably at high voltages exceeding 10 kV . At the inception, the Company utilized
certain underlying technologies associated with developing SiC BJTs, including those related to
requirements for substrate and epitaxial quality, epitaxial structure design, and advanced substrate
and epitaxial processing, when building its platform for SiC epitaxial growth, covering from
pre-growth substrate treatment and epitaxial deposition to post-growth cleaning and inspection. The
technology was self developed by Dr. Zhao without the use of, or reliance upon, resources
belonging to his former employer or associated with his prior positions. Accordingly, the risk of any
potential intellectual property infringement claims arising from BJT is considered extremely
remote. Furthermore, we did not utilize the BJT technology in our production during the Track
Record Period. Tang Xiuhao was not a shareholder or investor of the Company upon the
establishment of the Company and when the aforesaid contribution was made. Further, Tang Xiuhao
and his affiliate had divested all his investment in the Company in 2018 and had no other
relationship with the Company ever since. On June 9, 2025, Dr. Zhao won the case in the first
instance ( ɓᄲ) and the claims of Tang Xiuhao were dismissed in their entirety, and Tang Xiuhao
disagreed with the judgment and filed an appeal. As confirmed by our PRC Legal Adviser, Dr.
Zhao’s then capital contribution has fulfilled the necessary procedures and registration requirement
and has complied with the then laws and regulations in the PRC. The case has been concluded with
a final judgment on appeal on October 22, 2025. The Fujian Higher People’s Court upheld the
original judgment and dismissed all of Tang Xiuhao’s claims. As confirmed by our PRC Legal
Adviser, as of the date of the Prospectus, the judgment of the Fujian Higher People’s Court is the
final judgment of the aforementioned lawsuit.
In January 2024, Tang Xiuhao brought a legal action against Dr. Zhao and Li Qinghua as
defendant, alleging and requesting the court to terminate the equity proxy between Tang Xiuhao and
Dr. Zhao and Li Qinghua, and request Dr. Zhao and Li Qinghua to jointly return the portion of the
equity held in proxy to Tang Xiuhao. On May 24, 2024, Dr. Zhao won the case in the first instance
and the claims of Tang Xiuhao were dismissed in their entirety, and Tang Xiuhao disagreed with the
judgment and filed an appeal. The case has been concluded with a final judgment on appeal on
March 3, 2025. The Xiamen Intermediate People’s Court upheld the original judgment and
dismissed all of Tang Xiuhao’s claims.
Mr. Tang filed the application for retrial on August 6, 2025 and initiated a trial supervision
procedure to request the court to review instances of judicial misconduct during the trial process.
As confirmed by our PRC Legal Advisor, as of the Latest Practicable Date, this procedure does not
affect the conclusion of the case or the validity of the final judgment. The Company has not yet
received any notice from the court that a retrial has been approved or commenced. As a result, as
confirmed by our PRC Legal Adviser, as of the Latest Practicable Date, the aforementioned
application for a retrial has not yet been approved by the court and there are no other pending
litigation or arbitration proceedings in respect of Dr. Zhao’s shareholding, and the Company’s
equity structure is clear.
Further, even though Dr. Zhao is a U.S. citizen, the U.S. Final Rule would not apply to his
investment unless the investee is a “covered foreign person.” Our legal adviser engaged in
connection with the foregoing matters is of the view that we are not a “covered foreign person”
based on the Final Rule because we do not engage in a “covered activity” as defined by the Final
Rule. The term “covered foreign person” is defined under the Final Rule to include (i) a “person
of a country of concern” that engages in a “covered activity” as well as (ii) a person that holds
ownership or governance over a person identified in such “person of a country of concern”, if that
person derives more than 50% of revenue, net income, capital expenditures, or operating expenses
from that entity. The term “covered activities” means, in the context of a particular transaction, any
activities covered by the prohibited transactions and notifiable transactions as specified under the
Final Rule. Prohibited transactions include (i) an exhaustive list of covered transactions involving
certain electronic design automation software, fabrication or advanced packaging equipment,
advanced packaging technology, and the design and fabrication of certain integrated circuits and
high-end or supercomputing applications; (ii) covered transactions involving AI systems designed
exclusively for or intended to be used for military, government intelligence or mass surveillance end
uses or that meet certain technical specifications; and (iii) covered transactions related to the
BUSINESS
– 183 –


--- page 194 ---
development of quantum computers and production of critical components, the development or
production of certain quantum sensing platforms, and the development or production of quantum
networking and quantum communication systems. Notifiable transactions include (i) covered
transactions involving the design, fabrication and packaging of integrated circuits not covered by
the prohibited transactions; and (ii) covered transactions involving AI systems intended by the
covered foreign person to be used for cybersecurity applications, digital forensics tools, penetration
testing tools, control of robotic systems or that meet certain technical specifications. Dr. Zhao will
not cease to be our single largest shareholder due to the Final Rule, and the suitability of Dr. Zhao
to act as our Director under Rules 3.08 and 3.09 will not be affected either.
According to our PRC Legal Adviser, the business operations we engaged in had been carried
out in compliance with applicable PRC laws and regulations in all material respects during the
Track Record Period and up to the Latest Practicable Date.
RISK MANAGEMENT AND INTERNAL CONTROL
We have established and currently maintain risk management and internal control systems
consisting of policies and procedures that we consider to be appropriate for our business operations.
We are dedicated to continuously improving these systems. We have adopted and implemented risk
management policies in various aspects of our business operations. Our Board of Directors is
responsible for the establishment of our internal control systems, while our senior management
monitors the daily implementation of the internal control procedures and measures.
Operational Risk Management
Operational risk includes risk of direct or indirect financial loss resulting from incomplete or
problematic internal processes, personnel mistakes, IT system failures or external events, and we
have adopted a series of internal procedures to address such risk. Our administration, information
technology, human resources, and finance departments are collectively responsible to ensure the
compliance of our operations with internal procedures. In the event of a major adverse event, the
matter will be escalated to our senior management to take appropriate measures.
Compliance Risk Management
We have designed and adopted strict internal procedures to ensure the compliance of our
business operations with the relevant rules and regulations. In accordance with such procedures, we
have designated personnel carefully reviews the contracts we enter into with customers, suppliers
and partners and examines related documents, including necessary due diligence materials and
licenses and permits obtained by the other party to fulfill its obligations under the relevant contract.
In addition, we regularly review and monitor changes in relevant laws and regulations as well as
the regulatory environment to ensure compliance in our business operations. We also have an
internal audit department that continuously supervises compliance efforts within departments and
reports to our senior management.
Intellectual Property Risk Management
As a technology-focused company, we may face claims related to intellectual property rights.
To ensure proper management of our intellectual property, we have various internal policies and
established an internal intellectual property management system:
 We have developed and enacted systematic internal policies and procedures for the
management of intellectual property rights, including the management of intellectual
property acquisition, maintenance, implementation, licensing and transfer, as well as the
requirements and job responsibilities for positions related to intellectual property
management.
BUSINESS
– 184 –


--- page 195 ---
 To safeguard against potential infringements on both our intellectual property rights and
those of others, we have designated personnel responsible for intellectual property
management, conducts thorough searches and analyses of our R&D outcomes upon the
completion of scientific research projects and technology development, which includes
the determination of any possible infringements and preparing detailed inspection
reports to ensure compliance and prevent infringement. In addition, our employees are
required to adhere to strict confidentiality obligations and sign confidentiality
agreements and non-compete agreements.
Investment Risk Management
We invest in or acquire businesses that are complementary to our business and in line with our
overall growth strategies, such as businesses that can expand our service offerings and strengthen
our technological capabilities. We evaluate and screen investment opportunities based on our
growth strategies and we engage in comprehensive due diligence process to assess the risks of
potential projects.
Information Security and Data Privacy Risk Management
Sufficient maintenance, storage and protection of our data and other related information are
critical to our success. We have implemented relevant internal procedures and controls to ensure
that our data is protected and that leakage and loss of such data are avoided. To ensure information
security, we have implemented a suite of IT security policies and procedures to govern various
aspects of data handling, including information security, IT device management and system
maintenance, and network and database management. We have also developed strict internal control
and data accessing mechanisms and detailed approval and operation procedures regarding data
storage and processing.
During the Track Record Period and up to the Latest Practicable Date, we have not become
aware of any material information leakage or loss of our data and we did not experience any
material system failure in our IT infrastructure.
Anti-corruption Risk Management
Anti-corruption risk refers to the risk of use of cheating, bribery or other illegal measures for
(i) the pursuit of improper personal benefits at the expense of our Company’s economic interests
and (ii) the pursuit of improper interests of the Company. We have implemented thorough
anti-corruption policies and a whistleblower mechanism for reporting misconduct anonymously,
either for the pursuit of improper personal benefits or improper interests of the Company. Our
internal audit department provides regular reports to the Audit Committee of the Board. Violations
of these policies result in appropriate disciplinary action, and we provide internal training to all
employees while keeping our customers and suppliers informed of our anti-corruption policies and
practices.
Audit Committee Experience and Qualification and Board Oversight
To ensure the effectiveness of our risk management policies, we have established an Audit
Committee to review and supervise our financial reporting process and internal control system on
an ongoing basis to ensure that our internal control system is effective in identifying, managing and
mitigating risks involved in our business operations. Any major issues identified will be reported
to the Audit Committee and the Board annually.
BUSINESS
– 185 –


--- page 196 ---
A W ARDS AND RECOGNITIONS
Award/Recognition Award Authority Award Y ear
Strategic Cooperation Award
(኷ଫΥЪᆤ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Zhuzhou CRRC Times
Semiconductor Co., Ltd.
2024
Fujian Provincial-Level
Manufacturing Industry Single
Champion Enterprises (޲޲ܔ
Άุ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Fujian Provincial Department of
Industry and Information
Technology
2024
Fujian Provincial Advantageous
Products and Technologies in the
Field of Industry and Information
Technology (First Batch) (޲ܔ
ձҦஔ
(ୋɓҭ)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Fujian Provincial Department of
Industry and Information
Technology
2023
Outstanding Quality Award
(ሯᆤ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Zhuzhou CRRC Times
Semiconductor Co., Ltd.
2022
State Grid Smart Grid Research
Institute Award for Progress in
Science and Technology ( ਷ၣ౽
ҦආӉᆤ) /H1118/H1118/H1118/H1118/H1118/H1118
State Grid Smart Grid Research
Institute
2021
Perfect Quality Award
(ሯᆤ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Customer A 2020
BUSINESS
– 186 –


--- page 197 ---
BOARD OF DIRECTORS
Our Board comprises nine Directors, including three executive Directors, three non-executive
Directors and three independent non-executive Directors. Pursuant to the Articles of Association,
our Directors are elected and appointed by our Shareholders at a Shareholders’ meeting for a term
of three years, which is renewable upon re-election and re-appointment.
The following table sets out key information about our Directors.
Name Age Position/Title
Time of
Joining our
Group
Date of
Appointment
as a
Director Responsibilities
Executive Directors
Dr. Zhao Jianhui
(ሾ) /H1118/H1118/H1118/H1118/H1118/H1118
66 Executive Director
and chairperson
of the Board
March 2011 March 31,
2011
Responsible for the
Company’s overall
strategic planning and
operational decisions
Ms. Pan Menghan
(ᆙྫྷ⊦) /H1118/H1118/H1118/H1118/H1118/H1118
62 Executive Director March 2011 March 31,
2011
Responsible for assisting
in overseeing the
day-to-day operation
of the Company
Ms. Bai Liting
(ͣᘆణ) /H1118/H1118/H1118/H1118/H1118/H1118
64 Executive Director March 2022 July 5, 2022 Responsible for the
human resources
matters of the
Company
Non-executive Directors
Mr. Fang Wei
(˙ਃ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
50 Non-executive
Director
March 2025 March 30,
2025
Participating in the
formulation of our
Company’s corporate
and business strategies
Mr. Su Ping
(ᘽ̻) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
65 Non-executive
Director
June 2011 October 18,
2013
Participating in the
formulation of our
Company’s corporate
and business strategies
Ms. Xie Jieping
(ᑽᆎ̻) /H1118/H1118/H1118/H1118/H1118/H1118
52 Non-executive
Director
March 2025 March 30,
2025
Participating in the
formulation of our
Company’s corporate
and business strategies
Independent Non-executive Directors
Dr. Kang Junyong
(ۇڲ)H1118/H1118/H1118/H1118/H1118/H1118
65 Independent
non-executive
Director
May 2023 May 12,
2023
Responsible for
providing independent
opinion and judgment
to the Board
Dr. Liao Yi
(࿋අ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
40 Independent
non-executive
Director
March 2025 March 30,
2025
Responsible for
providing independent
opinion and judgment
to the Board
Dr. Su Xinlong
(ᘽอᎲ) /H1118/H1118/H1118/H1118/H1118/H1118
61 Independent
non-executive
Director
May 2023 May 12,
2023
Responsible for
providing independent
opinion and judgment
to the Board
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 187 –


--- page 198 ---
Executive Directors
Dr. Zhao Jianhui (ሾ), aged 66, is our founder, executive Director and chairman of the
Board mainly responsible for the Company’s overall strategic planning and operational decisions.
Dr. Zhao is a renowned scientist with over 35 years of dedicated R&D experiences in SiC
technology development. He is the first scientist elected as an IEEE Fellow based on significant
contributions to the R&D and application of SiC technologies. After he founded the Company in
2011, he has been serving as our Director and also our chairman of the Board from 2011 to 2012
and since 2014. He has been a chair professor at Xiamen University (ɽኪ) in the PRC since
December 2021. Between 1988 and 2021, Dr. Zhao served in Rutgers University in the United
States.
Dr. Zhao obtained a bachelor of science degree in physics from Xiamen University (ɽ
ኪ) in the PRC in July 1982. He received a doctorate degree in electrical and computer engineering
from Carnegie Mellon University in May 1988.
Ms. Pan Menghan ( ᆙྫྷ⊦) (former name: Pan Menghan (⊦)), aged 62, is our executive
Director mainly responsible for assisting in overseeing the day-to-day operation of the Company.
Ms. Pan has over 26 years of experience in the telecommunications and engineering sectors.
Before joining the Group, she served at a manufacturing company in the United States until around
2010. Prior to that, Ms. Pan worked as a staff member in projects and business for various computer
and manufacturing companies in the United States until around early 2000s. Following Ms. Pan’s
graduation, in mid 1980s until around 1989, Ms. Pan worked in the technical department of Xinhua
News Agency.
Ms. Pan obtained her bachelor’s degree in radio technology communication from Chengdu
Institute of Radio Engineering ( ϓேཥৃʈ೻ኪ৫) (currently known as University of Electronic
Science and Technology of China (Ҧɽኪ)) in the PRC in July 1984. She received a master’s
degree in electrical engineering in October 1993 from New Jersey Institute of Technology.
Ms. Bai Liting ( ͣᘆణ), aged 64, is our executive Director mainly responsible for the human
resources matters of the Company.
Ms. Bai joined our Company in March 2022 and has been serving as our deputy director of
administration and human resources. Prior to joining our Company, she served as the vice chair of
the risk control committee at Xiamen Lianfa (Group) Forever Co., Ltd. (ʮ̡) from
May 2016 to January 2019 after serving as its assistant to the general manager and deputy general
manager from February 2003 to May 2016. Prior to that, Ms. Bai was the department manager and
assistant general manager at Xiamen Lianfa (Group) ETOP Co., Ltd. (ʮ̡) from
February 2001 to January 2003.
Ms. Bai obtained her bachelor’s degree in radio technology from Fuzhou University ( ၅ψɽ
ኪ) in the PRC in October 1982.
Non-executive Directors
Mr. Fang Wei ( ˙ਃ), aged 50 is our non-executive Director mainly responsible for
participating in the formulation of our Company’s corporate and business strategies.
Mr. Fang has over 25 years of experience in wireless product engineering and corporate
management. Prior to joining our Company, he has been working in Huawei Technologies Co., Ltd.
(ʮ̡) since February 1999 where he successively held various positions, last serving
as the fifth track board director.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 188 –


--- page 199 ---
Mr. Fang has served as a director taking non-executive role at companies invested by Huawei,
including JoulWatt Technology Co., Ltd. (ʮ̡, stock code: 688141.sh)
since May 2024, SICC Co., Ltd. (ʮ̡, stock code: 688234.sh) since
February 2024 and Suzhou Oriental Semiconductor Company Limited (ʮ
̡, stock code: 688261.sh) since December 2023, all being companies listed on the Shanghai Stock
Exchange.
Mr. Fang obtained his bachelor’s degree in communication engineering in July 1996 and his
master’s degree in communication and information systems in March 1999, both from Shanghai Jiao
Tong University ( ɪऎʹஷɽኪ) in the PRC.
Mr. Su Ping ( ᘽ̻), aged 65, is our non-executive Director mainly responsible for
participating in the formulation of our Company’s corporate and business strategies.
Mr. Su joined our Group in June 2011 as a supervisor until October 2013, and has served as
a Director since October 2013. From June 2018 to May 2023, he was the vice chairperson of the
Company. Prior to joining our Company, he served as the general manager of Xiamen Lianfa
(Group) Forever Co., Ltd. (ʮ̡) from August 1998 to March 2021.
Mr. Su obtained his bachelor of science degree in physics from the department of physics at
Xiamen University (ɽኪ) in the PRC in July 1982.
Ms. Xie Jieping ( ᑽᆎ̻), aged 52, is our non-executive Director mainly responsible for
participating in the formulation of our Company’s corporate and business strategies.
Ms. Xie has served as the general manager of Xiamen Industrial Investment Co., Ltd. (ژ
ʮ̡) from May 2024 until now. Ms. Xie also served as the manager of the fund
management department and deputy general manager from April 2013 to February 2015 and general
manager responsible for daily operations from February 2015 to May 2024 in Xiamen V enture
Capital Co., Ltd. (ʮ̡). Ms. Xie served as the managing partner, chief
financial officer, and deputy general manager of Xiamen Taikun Investment Co., Ltd. (इտҳ
ʮ̡) from January 2005 to July 2012. From June 2001 to December 2004, she has served
as the director of the finance department, assistant to the chairman, and chief financial officer of
Xiamen Weidiya Technology Co. Ltd (ʮ̡). From August 1993 to June 2002,
she successively served as deputy director of the negotiation department, deputy director of the
credit department, deputy director and director of the funds department in Xiamen International
Bank Co., Ltd. (ʮ̡).
Ms. Xie also holds multiple positions in various companies currently, including:
 a director at Xiamen Sky Semiconductor Technology Co., Ltd. (ҦϞ
ʮ̡) from December 2024 until now;
 a director at Xiamen Tianma Display Technology Co., Ltd. (ʮ
̡) from November 2024 until now;
 a director at Xiamen Shilan Jihong Semiconductor Co., Ltd. (ࠢ
ʮ̡) from September 2024 until now;
 a non-executive director of CALB Group Co., Ltd. (ʮ̡)
(stock code: 3931.hk), a company listed on the Stock Exchange since December 31,
2024;
 a director of Xiamen Industrial Investment Co., Ltd. (ʮ̡) from
March 2024 until now;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 189 –


--- page 200 ---
 a director at Xiamen Y axon Zhilian Technology Co., Ltd. (ࠢ
ʮ̡) from June 2023 until now;
 a director of Xiamen Tianma Optoelectronics Co., Ltd. (ʮ̡) from
May 2022 until now; and
 a director of Xiamen V enture Capital Co., Ltd. (ʮ̡) from March
2015 until now.
In addition, Ms. Xie currently serves as the president of the Xiamen Entrepreneurship and
Investment Association (̹௴ุၾҳ༟՘ึ). She served as the director of the Private Equity
Fund Self-discipline and Supervision Committee of the Securities, Futures and Fund Association of
Xiamen (ึ) from April 2017 to December
2024. With many years of experience in the financial industry and industrial and equity investment
fund sectors, she was recognised as a “High-Level Financial Specialist in Xiamen” (̹৷ᄴϣ
ፄɛʑ) in 2021.
Ms. Xie obtained her bachelor’s degree in economics in July 1993 and master’s degree in
business administration in June 2006 from Xiamen University (ɽኪ) in the PRC.
Ms. Xie also notified the Board that she has served as director of UCAR (Xiamen) Information
Technology Co., Ltd. ( ग़ψᎴԓ(ژ)ʮ̡)( “ UCAR ”) since May 2019. UCAR was
incorporated on March 14, 2019 in Xiamen City, Fujian Province, People’s Republic of China,
primarily as an investment platform to hold shares in Beijing Borgward Auto Co., Ltd. ( ̏ԯᘒӜ
ʮ̡)( “ Borgward Auto ”). UCAR participated in the financing of Borgward Auto in
2019. However, due to its own failure of business operation and financing, UCAR was unable to
settle all considerations due to Borgward Auto pursuant to the financing agreements. Therefore,
Borgward Auto initiated a lawsuit against UCAR to request for repayment of all outstanding amount
under the financing agreements. On October 31, 2023, it was apparent that UCAR lacked the
capacity to discharge the debts due with its failure to repay all the defaulted debts due and inability
to settle them even after compulsory enforcement by the People’s Court. As such, the bankruptcy
liquidation application of Borgward Auto against UCAR was ruled to be accepted by the
Intermediate People’s Court of Xiamen City, Fujian Province (the “ Court ”). Borgward Auto had
ordinary claims of RMB1,121,280,281.68 and subordinated claims of RMB17,614,380 against
UCAR confirmed by a ruling of the Court on May 6, 2024. On the same day, due to the insufficiency
of UCAR’s property to cover bankruptcy expenses, the court declared bankruptcy of UCAR and
terminated its bankruptcy proceedings. Ms. Xie confirmed that (i) she was neither the applicant nor
the respondent in the bankruptcy proceedings of UCAR; (ii) she was not aware of any actual or
potential claim that had been or would be brought against her as a result of the bankruptcy; and (iii)
there was no financial impact of the bankruptcy on her.
Considering the independent due diligence conducted by the Sole Sponsor, nothing has come
to the attention of the Sole Sponsor which would cause them to cast reasonable doubt on the
competence and suitability of Ms. Xie as a non-executive Director under Rules 3.08 and 3.09.
Independent Non-executive Directors
Dr. Kang Junyong (ۇڲ)aged 65, is our independent non-executive Director mainly
responsible for providing independent opinion and judgment to the Board.
Dr. Kang has over 26 years of experience in the research of semiconductor sectors. He has
been a professor since 1999 in the department of physics at Xiamen University (ɽኪ)i nt h e
PRC, where he also successively served as an associate professor from December 1995 to December
1999, a lecturer from 1993 to 1995 and an assistant professor from 1987 to 1989.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 190 –


--- page 201 ---
Dr. Kang has also served as a director taking non-executive role in various companies,
including as an independent director of Xiamen Guangpu Electronics Co., Ltd. (΅
ʮ̡), a company listed on the Shenzhen Stock Exchange (stock code: 300632.sz), from July
2024 until now, and as an independent director of SANAN Optoelectronics Co., Ltd. (ٰ
ʮ̡), a company listed on the Shanghai Stock Exchange (stock code: 600703.sh), from
December 2019 until December 2025.
Dr. Kang obtained a bachelor’s degree in radio physics in July 1982 and a master’s degree in
semiconductor physics and device physics in August 1987, both from Xiamen University (ɽ
ኪ) in the PRC. In December 1993, he was awarded a doctorate degree in science from Xiamen
University. He also completed the 18th University-Wide Training Session on Safe Handling of
X-rays organized by the Atomic Energy and Engineering Committee of Tohoku University in May
2022.
Dr. Liao Yi ( ࿋අ), aged 40, is our independent non-executive Director mainly responsible for
providing independent opinion and judgment to the Board.
Since September 2019, Dr. Liao has served as the associate professor at the Department of
Management at The Hang Seng University of Hong Kong (ಥ㛬͛ɽኪ), after serving as an
assistant professor since 2015. Previously, from 2013 to 2015, Dr. Liao was an assistant professor
at Macau University of Science and Technology (Ҧɽኪ).
Dr. Liao obtained her bachelor’s degree in information management and information system
in Nanjing University (ԯɽኪ) in the PRC in June 2007, and her master’s degree in business in
Lingnan University (ɽኪ) in October 2009, and she obtained a doctorate degree in
management in the University of Hong Kong in November 2013.
Dr. Su Xinlong ( ᘽอᎲ), aged 61, is our independent non-executive mainly responsible for
providing independent opinion and judgment to the Board.
Dr. Su has over 30 years of experience in the fields of accounting and finance education. He
has been working as a full-time reappointed professor at Xiamen University (ɽኪ) in the PRC
since May 2024 after working as a professor at the university’s accounting department from August
2008 to May 2024. Prior to that, Dr. Su served as an associate professor at the same department from
December 2002 to July 2008. In addition to his academic roles, Dr. Su was a certified public
accountant in the PRC from September 1994.
Dr. Su has been an independent director at Annto Logistics Supply Chain Technology Co., Ltd
(ʮ̡) and Xiamen Keytop Communication & Technology Company
Limited (ʮ̡) since August 2023 and March 2021, respectively. He
also held several other directorships and senior management positions, including serving as an
independent director of Shanghai Chuangxing Resource Development Group Co., Ltd. ( ɪऎ௴ጳ༟
ʮ̡,“ Shanghai Chuangxing ”), a company listed on the Shanghai Stock
Exchange (stock code: 600193.sh) from April 1999 to May 2005 and as the deputy general manager
from June 2005 to April 2007. He served as a supervisor at Shanghai Chuangxing, a company listed
on the Shanghai Stock Exchange, from May 2007 to July 2015. He previously held the position of
independent director at Sensteed Hi-Tech Group (ʮ̡) (formerly known as
Yinyi Co., Ltd. (ʮ̡)) (stock code: 000981.sz), a company listed on the Shenzhen
Stock Exchange, from July 2019 to December 2021.
Dr. Su obtained his bachelor’s degree and master’s degree in accounting in July 1985 and July
1996, both from Xiamen University (ɽኪ) in the PRC. He then received a doctorate degree in
management from Wuhan University of Technology (ဏଣʈɽኪ) in the PRC in December 2008.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 191 –


--- page 202 ---
In August 2015, the CSRC issued an administrative penalty decision to Shanghai Chuangxing
and Dr. Su, among others, as to the inaccuracy and incompleteness of a connected transaction
announcement issued by Shanghai Chuangxing in 2012, when Dr. Su was its supervisor. In the
course of assessing the aforementioned connected transaction, Shanghai Chuangxin failed to engage
a qualified assets valuer as required under applicable laws and regulations. It also failed to disclose
the full name and certain contents of the assets valuation report and whether the report was prepared
solely for the purpose of the connected transaction, which resulted in the inaccuracy and
incompleteness of the connected transaction disclosure, and material recent development regarding
market price of the underlying assets relevant to the connected transaction after the valuation date,
which rendered the valuation report fail to provide fair value of the assets to the board. Pursuant
to the administrative penalty decision, Dr. Su was imposed a warning and a penalty of RMB50,000,
which he has fully paid up. As of the Latest Practicable Date and to our best knowledge, this
incident has been concluded and there has not been any further regulatory request to or action
against Dr. Su from the Shanghai Stock Exchange, the CSRC or other competent authorities as to
this incident. Considering (i) such incident has been concluded long before the commencement of
the Track Record Period, (ii) Dr. Su was not involved in the decision-making and execution of the
relevant transaction, (iii) Dr. Su has completed relevant trainings and reviewed rectification
measures after receiving the decision letter, and (iv) there was no dishonesty, fraud or integrity-
related issues from Dr. Su, the Company is of the view that such incident would not affect the
suitability of Dr. Su as a Director of the Company under Rules 3.08 and 3.09 of the Listing Rules.
Save as disclosed above, there were no other disciplinary actions against Dr. Su as of the date of
this Prospectus. Considering the independent due diligence conducted by the Sole Sponsor, nothing
has come to the attention of the Sole Sponsor which would cause them to cast reasonable doubt on
the competence and suitability of Dr. Su as an independent non-executive Director under Rules
3.08, 3.09 and 3.10(2).
Dr. Su has been and remains responsible for the following areas in his capacity as a professor
of accounting, an independent director of listed or unlisted companies, through which the Directors
are of the view that he has gained the appropriate accounting and financial management expertise
required under Rule 3.10(2) of the Listing Rules:
 lecturing on and teaching accounting related courses at Xiamen University;
 working as a certified public accountant for years with involvement of audit work of
public companies;
 being the author of numerous papers in the fields of accounting and auditing, and related
textbooks and monographs;
 acting as an independent director in several listed or unlisted companies mentioned
above, involved in their financial management, internal control and corporate
governance matter, including in annual budget meetings, periodic financial reviews,
annual financial audits and reporting, as well as reviewing and analysing audited
financial statements; and
 working closely with the listed companies in the preparation of their financial
statements, valuation analysis, participation in pricing and negotiation of transaction
terms and other related financial documents in advance of their publication.
SUPERVISORY COMMITTEE
The Supervisory Committee comprises three members. Our Supervisors serve a term of three
years and may be re-elected for successive reappointments. The functions and duties of the
Supervisory Committee include supervising the performance of duty of the Board and the senior
management of our Company and overseeing the financial conditions of our Company.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 192 –


--- page 203 ---
The following table sets out key information about our Supervisors:
Name Age Position/Title
Time of
Joining our
Group
Date of
Appointment
as a
Supervisor Responsibilities
Mr. Li Kaixi
(ҽ௱Ҏ) /H1118/H1118/H1118/H1118/H1118/H1118
33 Employee
representative
Supervisor
July 2014 May 12,
2023
Responsible for
monitoring the
performance of the
Directors and senior
management
Mr. Qian Weining
(፺ሊྐྵ) /H1118/H1118/H1118/H1118/H1118/H1118
38 Supervisor July 2013 May 12,
2023
Responsible for
monitoring the
performance of the
Directors and senior
management
Mr. Wu Guoyi
(ю਷χ) /H1118/H1118/H1118/H1118/H1118/H1118
48 Chairman of the
Supervisory
Committee
October 2022 October 21,
2022
Responsible for
monitoring the
performance of the
Directors and senior
management
Mr. Li Kaixi ( ҽ௱Ҏ), aged 33, has served as our employee representative Supervisor since
May 2023. Since May 2024, Mr. Li has been a supervisor at Epiworld Materials.
Mr. Li began his career in our Company as a process engineer from July 2014 to February
2017. He then successively served as a supervisor from February 2017 to March 2019, a deputy
manager from March 2019 to June 2021 and a manager since June 2021 at the production
department of our Company. He is responsible for product planning, delivery and marketing
throughout the product lifecycle.
Mr. Li obtained his bachelor’s degree in science from Nanjing University of Information
Science &Technology (ʈ೻ɽኪ) in the PRC in June 2014.
Mr. Qian Weining ( ፺ሊྐྵ), aged 38, has served as our Supervisor since May 2023. Mr. Qian
is primarily responsible for monitoring the performance of the Directors and senior management.
Mr. Qian joined us in July 2013 and has since served as the manager of the research and
development department at our technology center. He is responsible for overseeing the development
of new technologies, products, or processes within our Group.
Mr. Qian obtained his bachelor’s degree in applied physics from Taiyuan University of
Science and Technology (Ҧɽኪ) in the PRC in July 2010. He obtained his master’s degree
in microelectronic and solid state electronics in South China Normal University (ᇍɽኪ)i n
the PRC in June 2013.
Mr. Wu Guoyi ( ю਷χ), aged 48, is the chairman of our Supervisory Committee. Mr. Wu is
primarily responsible for monitoring the performance of the Directors and senior management.
Mr. Wu joined us in October 2022. He has held various positions at China Resources
Microelectronics Limited (ʮ̡)( “ CRMC ”), a company listed on the Shanghai
Stock Exchange (stock code: 688396.sh, also formerly listed on the Stock Exchange under stock
code: 0597.hk before it was privatized in November 2011), including its director from November
2021 to present, its chief financial officer from September 2021 to present, and its board secretary
from May 2019 to present. Apart from the abovementioned positions, he held the position of
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 193 –


--- page 204 ---
director of the strategic development department at CRMC. Prior to that, from October 2011 to
December 2013, he was the assistant director of the strategic development department at CRMC.
He served as a senior business development manager in the strategic development department at
CRMC from November 2009 to October 2011. He began his tenure at CRMC as a senior manager
at CRMC from September 2008 to November 2009.
Mr. Wu has been serving as the director of several subsidiaries of CRMC from January 2021
to now. Since September 2021, he has been the supervisor at China Resources Microelectronics.
Mr. Wu obtained his bachelor’s degree in economics from Shanghai University of Finance and
Economics ( ɪऎৌ຾ɽኪ) in the PRC in July 2000.
SENIOR MANAGEMENT
The following table sets out key information about our senior management.
Name Age Position/Title
Time of Joining
our Group
Date of
Appointment as
Senior
Management Responsibilities
Dr. Feng Gan
(ඹ଑) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
50 General Manager September 2011 July 17, 2016 Responsible for the
overall day-to-day
management of the
Company
Dr. Hong Tu
(ྡ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
40 Board Secretary April 2023 April 1, 2023 Responsible for the
equity financing and
listing preparation
works of our Company
Mr. Peng Xinghua
(ుጳശ) /H1118/H1118/H1118/H1118/H1118/H1118
42 Financial Controller July 2020 July 8, 2020 Responsible for
overseeing the finance
and accounting matters
and financial reporting
of our Group
Dr. Sun Y ongqiang
(͑੶) /H1118/H1118/H1118/H1118/H1118/H1118
40 Deputy General
Manager
October 2011 December 13,
2019
Responsible for the
management of
the Company’s
manufacturing
operations and
supply chain
Dr. Feng Gan ( ඹ଑), aged 50, has served as the general manager of our Company since July
2016 and since May 2024, he has also been the general manager of Epiworld Materials. He is
primarily responsible for the overall day-to-day management of the Company. Dr. Feng joined us
in September 2011 as our vice president of R&D.
Dr. Feng has over 20 years of experience in the fields of research and development in
semiconductor technology. Prior to joining our Group, Dr. Feng was a program-specific researcher
at Kyoto University from April 2007 to September 2011. He served as a part-time lecturer at Kyoto
Institute of Technology from May 2004 to March 2007 and worked at Paul-Drude-Institute for Solid
State Electronics as an academic from September 2003 to March 2004.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 194 –


--- page 205 ---
Dr. Feng obtained his bachelor’s degree in metal materials and heat treatment in June 1997
and his master’s degree in materials in March 2000, both from Nanjing University of Science and
Technology (ԯଣʈɽኪ) in the PRC. He obtained his doctorate degree in materials science and
chemistry from the Institute of Semiconductors, Chinese Academy of Sciences (ኪ৫̒ኬ᜗
הin the PRC in August 2003.
Dr. Hong Tu (ྡ), aged 40, has been our board secretary since April 2023. He is primarily
responsible for the equity financing and listing preparation works of our Company.
Dr. Hong has nearly 10 years of experience in financing. From October 2013 to March 2023,
Dr. Hong served at China Minsheng Bank Corp., Ltd. (ʮ̡,“ CMBC ”), a
company listed on the Stock Exchange (stock code: 1988.hk), with positions held including staff
member of the investment banking department of the headquarter of CMBC, the deputy general
manager of the investment banking department of its Quanzhou branch, the general manager of the
investment banking department of its Quanzhou branch, the general manager of the small and
medium enterprise finance team of its Beijing branch and the deputy president of its Beijing
Zhongguancun branch.
Dr. Hong obtained his bachelor’s degree in physics, master’s degree in physics and doctorate
degree in finance from Xiamen University (ɽኪ) in the PRC in July 2006, June 2009 and
September 2013, respectively.
Mr. Peng Xinghua ( ుጳശ), aged 42, has served as the financial controller of our Company
since July 2020. He is primarily responsible for overseeing the finance and accounting matters and
financial reporting of our Group. He joined us in July 2020 as our chief financial officer and board
secretary.
Mr. Peng has over 17 years of experience in finance and accounting. From May 2015 to
February 2020, he served as the financial director at Xiamen Changelight Co., Ltd. (৻๫Έཥ
ʮ̡) (stock code: 300102.sz), a company listed on the Shenzhen Stock Exchange. Before
that, he joined the company in 2008 and held various positions until February 2020, including
deputy manager, manager of the finance department, deputy director of finance, and head of
finance.
Mr. Peng obtained his bachelor’s degree in management from Changchun Institute of
Technology (ʈ೻ኪ৫) in the PRC in June 2006. He then obtained a bachelor’s degree in
engineering from the same institution in July 2006.
Dr. Sun Y ongqiang (͑੶), aged 40, has served as the deputy general manager of our
Company since December 2019. He is primarily responsible for the management of our Company’s
manufacturing operations and supply chain. He joined us in October 2011 as the deputy manager
of the production department.
Prior to joining our group, Dr. Sun worked as a technician in a technical position at the 55th
Research Institute of China Electronics Technology Group Corporation from July 2010 to
September 2011.
Dr. Sun obtained his bachelor’s degree in materials science in July 2007 and a master’s degree
in materials science and chemistry in June 2010, both from Sichuan University ( ̬ʇɽኪ)i nt h e
PRC. He obtained his doctorate degree in microelectronics and solid state electronics in Xiamen
University (ɽኪ) in the PRC in December 2019.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 195 –


--- page 206 ---
INTERESTS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
Save as disclosed above, none of the Directors, Supervisors or members of senior management
of our Company has been a director of any public company the securities of which are listed on any
securities market in Hong Kong or overseas in the three years immediately preceding the date of
this Prospectus.
Ms. Pan is the spouse of Dr. Zhao. Save as disclosed above, none of the Directors, Supervisors
or members of the senior management of our Company is related to any other Directors, Supervisors
and members of the senior management of our Company.
Save as disclosed in the biographies of our Directors, Supervisors and members of our senior
management above, to the best knowledge, information and belief of our Directors and Supervisors
having made all reasonable inquiries, there was no other matter with respect to the appointment of
our Directors or Supervisors that needs to be brought to the attention of the Shareholders and there
was no information relating to our Directors or Supervisors 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.
COMPANY SECRETARY
Ms. Wong Wai Y ee, Ella (“ Ms. Wong ”) was appointed as a company secretary of the Company
in March 2025. Ms. Wong is a director of Company Secretarial Services of Vistra Group. Ms. Wong
has over 20 years of experience in the corporate secretarial field and has been providing
professional corporate services to Hong Kong listed companies as well as multinational, private and
offshore companies.
Ms. Wong is a Chartered Secretary, a Chartered Governance Professional and a Fellow of both
The Hong Kong Chartered Governance Institute (formerly known as (The Hong Kong Institute of
Chartered Secretaries) (“HKCGI”) and The Chartered Governance Institute (formerly known as The
Institute of Chartered Secretaries and Administrators) in the United Kingdom. Ms. Wong is a holder
of the Practitioner’s Endorsement from HKCGI. Ms. Wong obtained her bachelor’s degree in
Economics from The University of Hong Kong and a Postgraduate Diploma in Corporate
Administration from the City University of Hong Kong.
BOARD COMMITTEES
Our Board delegates certain responsibilities to various committees. In accordance with the
relevant PRC laws and regulations and the Corporate Governance Code, our Company has formed
four Board committees, namely the Audit Committee, the Nomination Committee, the
Remuneration Committee and the Strategy Committee.
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 the Corporate Governance Code. The Audit
Committee consists of 3 Directors, namely Dr. Su Xinlong ( ᘽอᎲ), Dr. Liao Yi ( ࿋අ) and Mr. Su
Ping ( ᘽ̻). Dr. Su Xinlong ( ᘽอᎲ) who has “appropriate accounting or related financial
management expertise” pursuant to the note of Rule 3.10(2) of the Listing Rules, serves as the
chairman of the Audit Committee. The primary duties of the Audit Committee include, but not
limited to, the following:
 proposing the appointment or change of external auditors to our Board, and monitoring
the independence of external auditors and evaluating their performance;
 examining the financial information of our Company and reviewing financial reports and
statements of our Company;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 196 –


--- page 207 ---
 examining the financial reporting system, the risk management and internal control
system of our Company, overseeing their rationality, efficiency and implementation and
making recommendations to our Board; and
 dealing with other matters that are authorized by our Board.
Nomination Committee
We have established a Nomination Committee with written terms of reference in compliance
with paragraph B.3 of the Corporate Governance Code. The Nomination Committee consists of 3
Directors, namely Dr. Liao Yi ( ࿋අ), Dr. Kang Junyong (ۇڲand Ms. Pan Menghan ( ᆙྫྷ⊦).
Dr. Liao Yi ( ࿋අ) serves as the chairman of the Nomination Committee. The primary duties of the
Nomination Committee include, but not limited to, the following:
 conducting extensive search and providing to our Board suitable candidates for our
Directors, chief executive officer and other members of the senior management;
 reviewing the structure, size and composition of our Board at least annually, assist the
Board in maintaining a board skills matrix and making recommendations on any
proposed changes to our Board;
 researching and developing standards and procedures for the election of our Board
members, chief executive officer and members of the senior management, and making
recommendations to our Board;
 supporting the Company’s regular evaluation of the Board’s performance; and
 dealing with other matters that are authorized by our Board.
Remuneration Committee
We have established a Remuneration Committee with written terms of reference in compliance
with paragraph E.1 of the Corporate Governance Code. The Remuneration Committee consists of
3 Directors, namely Dr. Kang Junyong (ۇڲDr. Liao Yi ( ࿋අ) and Dr. Su Xinlong ( ᘽอᎲ).
Dr. Kang Junyong (ۇڲserves as the chairman of the Remuneration Committee. The primary
duties of the Remuneration Committee include, but not limited to, the following:
 making recommendations to the Board on the Company’s policy and structure for all
Directors’ and senior managements remuneration and on the establishment of a formal
and transparent procedure for developing remuneration policy;
 monitoring the implementation of remuneration system of our Company;
 making recommendations on the remuneration packages of our Directors and senior
management; and
 dealing with other matters that are authorized by our Board.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 197 –


--- page 208 ---
Strategy Committee
The Strategy Committee of our Company consists of three Directors, namely Dr. Zhao, Dr.
Kang Junyong (ۇڲand Dr. Su Xinlong ( ᘽอᎲ). Dr. Zhao serves as the chairman of the
Strategy Committee. The primary duties of the Strategy Committee include, but not limited to, the
following:
 conducting regular review and making recommendations on our Company’s business
objectives and medium-term and long-term development strategies in light of our
Company’s operating;
 reviewing and making recommendations on major investment and financing plans,
subject to the approval of our Board pursuant to the Articles of Association;
 reviewing and making recommendations on major transactions subject to approval of our
Board pursuant to the Articles of Association;
 reviewing and making recommendations on matters materially affecting the
development of our Company;
 examining the implementation of the above matters and report to the Board; and
 dealing with other matters that are authorized by our Board.
CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Listing Rules
Each of our Directors confirms that as of the Latest Practicable Date, he or she did not have
any interest in a business which competes or is likely to compete, either directly or indirectly, with
our Company’s business which would require disclosure under Rule 8.10 of the Listing Rules.
Rule 3.09D of the Listing Rules
Each of our Directors confirms that he or she (i) has obtained the legal advice referred to under
Rule 3.09D of the Listing Rules in March 2025, and (ii) understands his or her obligations as a
director of a listed issuer under the Listing Rules.
Rule 3.13 of the Listing Rules
Each of the independent non-executive Directors has confirmed (i) his or her independence as
regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules, (ii) he or she has
no past or present financial or other interest in the business of the Company or its subsidiaries or
any connection with any core connected person of the Company under the Listing Rules as of the
Latest Practicable Date, and (iii) that there are no other factors that may affect his or her
independence at the time of his or her appointment.
COMPENSATION OF DIRECTORS AND SUPERVISORS
Our Directors and Supervisors receive compensation in the form of fees, salaries, allowances,
discretionary bonuses, share-based compensation, retirement benefit scheme contributions and
other benefits in kind.
For the years ended December 31, 2022, 2023 and 2024 and the nine months ended September
30, 2025, the aggregate amount of remuneration paid or payable to our Directors amounted to
RMB30,530,000, RMB13,538,000, RMB23,895,000, and RMB17,810,000, respectively.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 198 –


--- page 209 ---
For the years ended December 31, 2022, 2023 and 2024 and the nine months ended September
30, 2025, the aggregate amount of remuneration paid or payable to our Supervisors amounted to
RMB73,000, RMB6,067,000, RMB8,799,000, and RMB7,032,000, respectively.
Under the current compensation arrangement, we estimate the total compensation before
taxation to be accrued to our Directors and our Supervisors for the year ending December 31, 2026
to be approximately RMB32,706,000.
The total emoluments for the remaining individuals among the five highest paid individuals
amounted to RMB2,101,000, RMB148,367,000, RMB111,391,000 and RMB87,038,000 for the
years ended December 31, 2022, 2023 and 2024, and the nine months ended September 30, 2025,
respectively.
During the Track Record Period, no remuneration was paid by our Company to, or receivable
by, our Directors, Supervisors or the five highest paid individuals as an inducement to join or upon
joining our Company or as compensation for loss of office in connection with the management
positions of our Company or any of our subsidiaries.
During the Track Record Period, none of our Directors or Supervisors waived any
remuneration. Save as disclosed in this section headed “Compensation of Directors and
Supervisors”, no other payments have been paid, or are payable, by our Company or any of our
subsidiaries to our Directors, Supervisors or the five highest paid individuals during the Track
Record Period.
CORPORATE GOVERNANCE
Our Company aims to achieve high standards of corporate governance which are crucial to our
development and safeguard the interests of our Shareholders. To accomplish this, we expect to
comply with the Corporate Governance Code set out in Appendix C1 to the Listing Rules and the
Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to
the Listing Rules after the Listing.
BOARD DIVERSITY POLICY
In order to enhance the effectiveness of our Board and to maintain the high standard of
corporate governance, we have adopted the board diversity policy which sets out the objective and
approach to achieve and maintain diversity of our Board. Pursuant to the board diversity policy, we
seek to achieve board diversity through the consideration of a number of factors when selecting the
candidates to our Board, including but not limited to gender, skills, age, professional experience,
knowledge, cultural and educational background, and length of service. The ultimate decision of the
appointment will be based on merit and the contribution which the selected candidates will bring
to our Board.
Our Directors have a balanced mix of knowledge and skills, including overall management
and strategic development, finance, accounting and corporate governance in addition to industry
experience. We have three independent non-executive Directors with different industry
backgrounds, representing one-third of the members of our Board. Our Company has evaluated the
structure, size 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 operations.
Besides, we particularly recognize the importance of gender diversity. We have taken, and will
continue to take, steps to promote gender diversity at all levels of our Company, including but
without limitation to our Board and senior management levels. Going forward, we will continue to
work to enhance gender diversity of our Board when selecting and recommending suitable
candidates for Board appointments. Our Company also intends to promote gender diversity at the
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 199 –


--- page 210 ---
mid to senior level so that our Company can maintain a balanced gender ratio at different levels.
Taking into account our existing business model and specific needs as well as the different
background of our Directors, the composition of our Board satisfies our board diversity policy.
Our Nomination Committee is responsible for ensuring the diversity of our Board members.
After the Listing, our Nomination Committee will examine the board diversity policy from time to
time to ensure its continued effectiveness and we will disclose in our corporate governance report
about the implementation of the board diversity policy on an annual basis. Our Board currently
consists four female Directors and five male Directors. Going forward, we will continue to work on
gender diversity of our Board when selecting and recommending suitable candidates for Board
appointments and will maintain at least one female Director on the Board. To develop a pipeline of
potential female successors to the Board, our Company will (i) ensure that there is gender diversity
when recruiting staff at mid to senior levels, and (ii) engage more resources in training female staff
with the aim of promoting them to be members of our senior management or the Board.
COMPLIANCE ADVISER
We have appointed Rainbow Capital (HK) Limited as our Compliance Adviser pursuant to
Rules 3A.19 and 3A.23 of the Listing Rules. The Compliance Adviser will provide us with guidance
and advice as to compliance with the Listing Rules and other applicable laws, rules, codes and
guidelines. Pursuant to Rule 3A.23 of the Listing Rules, the Compliance Adviser will advise our
Company in certain circumstances including:
(a) before the publication of any regulatory announcement, circular or financial report;
(b) where a transaction, which might be a notifiable or connected transaction, is
contemplated, including share issues, sales or transfers of treasury shares and share
repurchases;
(c) where we propose to use the proceeds from 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
(d) where the Stock Exchange makes an inquiry to our Company regarding unusual
movements in the price or trading volume of its listed securities or any other matters in
accordance with Rule 13.10 of the Listing Rules.
Pursuant to Rule 3A.24 of the Listing Rules, the Compliance Adviser will, on a timely basis,
inform our Company of any amendment or supplement to the Listing Rules that are announced by
the Stock Exchange. The Compliance Adviser will also inform our Company of any new or amended
law, regulation or code in Hong Kong applicable to us, and advise us on the applicable requirements
under the Listing Rules and laws and regulations.
The term of the appointment will commence on the Listing Date and is expected to end on the
date on which our Company complies with Rule 13.46 of the Listing Rules in respect of our
financial results for the first full financial year commencing after the Listing.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
– 200 –


--- page 211 ---
OUR SINGLE LARGEST SHAREHOLDER
Immediately following the completion of the Global Offering, Dr. Zhao will control 27.39%
of our total issued share capital and he will be our Single Largest Shareholder upon Listing.
RULE 8.10 OF THE LISTING RULES
As of the Latest Practicable Date, none of our Single Largest Shareholder or Directors had any
interest in any business which competes or is likely to compete, either directly or indirectly, with
our Company’s business which would require disclosure under Rule 8.10 of the Listing Rules.
INDEPENDENCE OF OUR BUSINESS
Having considered the following factors, our Directors are satisfied that we are able to carry
out our business independently from our Single Largest Shareholder and his close associates upon
and after the Listing.
Operational Independence
Our Company has full rights to make all decisions on, and to carry out, our own business
operations independently. We hold our own operation resources including but not limited to
customers and suppliers, as well as our own registered patents which can be used for producing our
products. We have a team of senior management to operate the business independently from our
Single Largest Shareholder and his close associates. We also have access to third parties
independently from, and not connected with, our Single Largest Shareholders for sources of
suppliers, customers and business partners. Based on the above, our Directors believe that we are
operationally independent from our Single Largest Shareholder and their his close associates.
Management Independence
Our management and operational decisions are made by the Board in a collective manner. The
Board comprises nine Directors, including three executive Directors, three non-executive Directors
and three independent non-executive Directors.
Our Directors have relevant experience to ensure the proper functioning of the Board. We
further believe that our Directors and members of the senior management are able to perform their
roles in our Company in managing our business independently from Single Largest Shareholder and
his close associates for the following reasons:
(a) our independent non-executive Directors have extensive experience in different areas.
We believe that they will be able to exercise their independent judgment and will be able
to provide impartial opinions in the decision-making process of our Board to protect the
interests of our Shareholders;
(b) each of our Directors is aware of his or her fiduciary duties as a director, which requires,
among other things, that he or she acts for our Company’s best interests and he or she
must not allow any conflict between his or her duties as a Director and his or her
personal interests; and
(c) where a Board meeting or Shareholders’ meeting is held to consider a proposed
transaction in which our Directors or Single Largest Shareholder or any of his close
associates have a material interest, the relevant Directors or our Single Largest
Shareholder and his close associates shall abstain from voting on the relevant resolutions
and shall not be counted towards the quorum for the voting.
RELATIONSHIP WITH THE SINGLE LARGEST SHAREHOLDER
– 201 –


--- page 212 ---
Financial Independence
We have a finance department independent from our Single Largest Shareholder and his close
associates. We have also established an independent financial system to make the decisions based
on our own business needs. In addition, we are capable of obtaining financing from third parties
without relying on any guarantee or security provided by our Single Largest Shareholder and his
close associates. During the Track Record Period and as of the Latest Practicable Date, we had
received the Pre-IPO Investments from third party investors independently. For details of the
Pre-IPO Investments, see “History, Development and Corporate Structure” of this Prospectus. As of
the Latest Practicable Date, there were no loans, advances and balances due to or from our Single
Largest Shareholder or his close associates, nor were there any pledges and guarantees provided by
and to our Single Largest Shareholder or his respective close associates.
CORPORATE GOVERNANCE MEASURES
Our Directors believe that there are adequate corporate governance measures in place to
manage the potential conflict of interests between our Single Largest Shareholder and our Group
and to safeguard the interests of our Shareholders taken as a whole for the following reasons:
 where a Shareholders’ meeting is to be held for considering proposed transactions in
which our Single Largest Shareholder or any of his close associates has a material
interest, our Single Largest Shareholder will not vote on the resolutions and shall not be
counted in the quorum in the voting;
 our Group has established internal control mechanisms to identify connected
transactions. Upon the Listing, if any transaction is proposed between our Group and our
Single Largest Shareholder and his associates, we will comply with the requirements of
the Articles of Association and the Listing Rules, including, where appropriate, the
reporting, annual review by the independent non-executive Directors, announcement and
independent shareholders’ approval;
 our Board consists of a balanced composition of executive Directors and independent
non-executive Directors, with independent non-executive Directors representing more
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
Single Largest Shareholder and provide impartial and professional advice to protect the
interests of our minority Shareholders;
 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
 we have appointed Rainbow Capital (HK) Limited as our Compliance Adviser, who will
provide advice and guidance to us in respect of compliance with the applicable laws and
the Listing Rules including various requirements relating to directors’ duties and
corporate governance, and inform us on a timely basis of any amendment or supplement
to the Listing Rules or applicable laws and regulations in Hong Kong.
Based on the above, our Directors are satisfied that sufficient corporate governance measures
have been put in place to manage conflicts of interest that may arise between our Company and our
Single Largest Shareholder, and to protect our minority Shareholders’ interests after the Listing.
RELATIONSHIP WITH THE SINGLE LARGEST SHAREHOLDER
– 202 –


--- page 213 ---
This section presents certain information regarding our share capital before and upon
completion of the Global Offering.
BEFORE THE COMPLETION OF THE GLOBAL OFFERING
As of the Latest Practicable Date, the issued share capital of our Company was
RMB404,092,760 comprising 404,092,760 Unlisted Shares with a nominal value of RMB1.00 each.
UPON THE COMPLETION OF THE GLOBAL OFFERING
Immediately following the completion of the Global Offering and the conversion of certain
Unlisted Shares into H Shares, the issued share capital of our Company will be as follows:
Description of Shares Number of Shares
Approximate
Percentage of
the Total Share
Capital of our
Company
(%)
Unlisted Shares in issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118306,661,179 72.06
H Shares to be converted from Unlisted Shares /H1118/H1118/H1118/H111897,431,581 22.89
H Shares to be issued under the Global Offering /H1118/H1118/H111821,492,050 5.05
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/H1118425,584,810 100.00
RANKING
Upon completion of the Global Offering, we would have only one class of Shares. H Shares
and Unlisted Shares are all ordinary Shares in the share capital of our Company. However, except
for certain qualified domestic institutional investors in the PRC, qualified PRC investors under the
Shanghai — Hong Kong Stock Connect or the Shenzhen — Hong Kong Stock Connect and other
persons who are entitled to hold our H Shares pursuant to relevant PRC laws and regulations or
upon approvals of any competent authorities, H Shares generally cannot be subscribed for by or
traded between legal or natural persons of the PRC. Unlisted Shares and H Shares 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 Prospectus. All dividends in respect of the
H Shares are to be paid by us in Renminbi, Hong Kong dollars or in the form of H Shares.
CONVERSION OF OUR UNLISTED SHARES INTO H SHARES
According to the regulations issued by the CSRC, the holders of our Unlisted Shares may, at
their own option, authorize the Company to apply to the CSRC for conversion of their respective
Unlisted Shares to H Shares, and such converted Shares may be listed and traded on an overseas
stock exchange provided that the required filings with the securities regulatory authorities of the
State Council for the conversion, listing and trading of such converted Shares have been completed.
Additionally, such conversion, trading and listing shall meet any requirement of internal approval
process and in all respects comply with the regulations prescribed by the securities regulatory
authorities of the State Council and the regulations, requirements and procedures prescribed by the
relevant overseas stock exchange. Save as disclosed in the section headed “History, Development
and Corporate Structure — Capitalization” and to the best knowledge of our Directors, we are not
aware of the intention of such existing Shareholders to convert their Unlisted Shares.
SHARE CAPITAL
– 203 –


--- page 214 ---
If any of the Unlisted Shares are to be converted, listed and traded as H Shares on the Stock
Exchange, the filings with the relevant PRC regulatory authorities, including the CSRC, and the
approval of the Stock Exchange are necessary for such conversion. Based on the procedures for the
conversion of Unlisted Shares into H Shares as set forth below, we will apply for the listing of all
or any portion of the Unlisted Shares on the Stock Exchange as H Shares in advance of any
proposed conversion after the Global Offering to ensure that the conversion process can be
completed promptly upon notice to the Stock Exchange and delivery of Shares for entry on the H
Share register. As the listing of additional Shares after the Listing on the Stock Exchange is
ordinarily considered by the Stock Exchange to be a purely administrative matter, it does not require
such prior application for listing at the time of our listing in Hong Kong. No class Shareholder
voting is required for the conversion of such Shares or the listing and trading of such converted
Shares on an overseas stock exchange. Any application for listing of the converted shares on the
Stock Exchange after our initial listing is subject to prior notification by way of announcement to
inform our Shareholders and the public of any proposed conversion.
After all the requisite filings have been completed and approvals have been obtained, the
relevant Unlisted Shares will be withdrawn from the Unlisted Share register, and our Company will
re-register such Shares on the H Share register maintained in Hong Kong and instruct the H Share
Registrar to issue H Share certificates. Registration on the H Share register of our Company will
be on the conditions that (i) the H Share Registrar lodges with the Stock Exchange a letter
confirming the entry of the relevant H Shares on the H Share register and the due dispatch of H
Share certificates; and (ii) the admission of the H Shares to be traded on the Stock Exchange
complies with the Listing Rules and the General Rules of HKSCC and the HKSCC Operational
Procedures in force from time to time.
Until the converted Shares are re-registered on the H Share register of our Company, such
Shares would not be listed as H Shares. For details of our existing Shareholders’ proposed
conversion of Unlisted Shares into H Shares, see “History, Development and Corporate Structure
— Capitalization” in this Prospectus.
RESTRICTIONS OF SHARE TRANSFER
Pursuant to the PRC Company Law, our Shares issued prior to the Listing shall not be
transferred within one year from the Listing Date.
Shares transferred by our Directors, Supervisors and members of the senior management each
year during their term of office shall not exceed 25% of their total respective shareholdings in our
Company unless otherwise permitted by applicable laws and regulations. The Shares that the
aforementioned persons hold in our Company cannot be transferred within half a year after they
leave their positions as Directors, Supervisors and members of the senior management in our
Company.
SHAREHOLDERS’ GENERAL MEETING
For details of circumstances under which our Shareholders’ general meeting is required, see
“Appendix IV — Summary of Articles of Association” in this Prospectus.
SHARE CAPITAL
– 204 –


--- page 215 ---
So far as our Directors are aware, immediately following the completion of the Global
Offering and the conversion of our Unlisted Shares to H Shares, the following persons will have an
interest and/or short position in the Shares or the underlying Shares which would fall to be disclosed
to us and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or,
will be, directly or indirectly interested in 10% or more of the nominal value of any class of our
share capital carrying rights to vote in all circumstances at general meetings of our Company:
Name of Shareholder
Nature
of interest
As of the Latest Practicable Date Immediately following the Global Offering
Number of Shares
Approximate
percentage of
shareholding in
our total
share capital Number of Shares
Approximate
percentage of
shareholding in
the Unlisted
Shares/
H Shares
Approximate
percentage of
shareholding in
our total
share capital
(%) (%)
Dr. Zhao /H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial
owner
116,560,399 28.84% 86,814,160
Unlisted
Shares (L)
28.31% 20.40%
29,746,239
H Shares (L)
25.01% 6.99%
Mr. Li Qinghua (1) /H1118/H1118Beneficial
owner and
interest as
spouse
43,523,817 10.77% 32,642,862
Unlisted
Shares (L)
10.64% 7.67%
10,880,955
H Shares (L)
9.15% 2.56%
Ms. Xu Xiyun
(1) /H1118/H1118Interest in
controlled
corporation
and interest
as spouse
43,523,817 10.77% 32,642,862
Unlisted
Shares (L)
10.64% 7.67%
10,880,955
H Shares (L)
9.15% 2.56%
Mr. Su Ping
(ᘽ̻)
(2) /H1118/H1118/H1118/H1118/H1118/H1118
Interest in
controlled
corporation
56,749,358 14.04% 42,562,018
Unlisted
Shares (L)
13.88% 10.00%
14,187,340
H Shares (L)
11.93% 3.33%
Xike Zhongheng
(2) /H1118/H1118Beneficial
owner
56,749,358 14.04% 42,562,018
Unlisted
Shares (L)
13.88% 10.00%
14,187,340
H Shares (L)
11.93% 3.33%
Notes:
(1) Xincheng Zhongchuang is managed by Ms. Xu Xiyun, the spouse of Mr. Li Qinghua. As such, Mr. Li Qinghua is
deemed to be interested in the Shares held by Xincheng Zhongchuang under the SFO, and Ms. Xu Xiyun is deemed
to be interested in the Shares held by Mr. Li Qinghua under the SFO.
(2) Xike Zhongheng is one of our Pre-IPO Investors and a limited partnership established in the PRC, managed by its
general partner, Mr. Su Ping ( ᘽ̻). As such, Mr. Su Ping ( ᘽ̻) is deemed to be interested in the Shares held by Xike
Zhongheng under the SFO.
Save as disclosed above and the section headed “Appendix V — Statutory and General
Information — Further Information about our Directors, Supervisors, Senior Management and
Substantial Shareholders — Interests of the substantial shareholders in the Shares” in this
Prospectus, our Directors are not aware of any person who will, immediately following completion
of the Global Offering, have any interest and/or short position in the Shares or underlying Shares
of our Company which will be required to be disclosed to our Company and the Stock Exchange
pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who are, 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 meeting of the Company or any other member of our
Group. Our Directors are not aware of any arrangement which may at a subsequent date result in
a change of control of our Company.
SUBSTANTIAL SHAREHOLDERS
– 205 –


--- page 216 ---
THE CORNERSTONE PLACING
We have entered into a cornerstone investment agreement (the “ Cornerstone Investment
Agreement ”) with the cornerstone investor (the “ Cornerstone Investor ”) as set out below,
pursuant to which the Cornerstone Investor has agreed to, subject to certain conditions, cause its
designated entities to subscribe at the Offer Price for a certain number of Offer Shares (rounded
down to nearest whole board lot of 50 H Shares) that may be purchased for an aggregate amount
of US$99.1 million (approximately HK$774.8 million, inclusive of brokerage, SFC transaction
levy, AFRC transaction levy and Stock Exchange trading fee) (the “ Cornerstone Placing ”). The
calculations in this section, which are based on the exchange rate as disclosed in the section headed
“Information about this Prospectus and the Global Offering”, are for illustration purposes.
Based on the Offer Price of HK$76.26 per H Share, the total number of Offer Shares to be
subscribed by the Cornerstone Investor would be 10,058,500 Offer Shares, representing
approximately (i) 46.80% of the H Shares offered pursuant to the Global Offering; and (ii) 2.36%
of our total issued share capital immediately upon completion of the Global Offering.
Our Company is of the view that, (i) the Cornerstone Placing will ensure a reasonable size of
solid commitment at the beginning of the marketing period of the Global Offering and will provide
confidence to the market, and (ii) leveraging on the investment experience of the Cornerstone
Investor, the Cornerstone Placing will help to raise the profile of our Company and signify that such
investor has confidence in our business and prospects. Our Company became acquainted with the
Cornerstone Investor in its ordinary course of operations through the business network of our
Group.
To the best knowledge of our Company, the Cornerstone Investor is a close associate of its
existing minority Shareholders. The Stock Exchange has granted a waiver from strict compliance
with the requirements under Rule 10.04 of the Listing Rules and consent under paragraph 1C of
Appendix F1 to the Listing Rules to permit Offer Shares in the International Offering to be placed
to our existing minority Shareholder and/or its close associates. For further details, please see the
section headed “Waivers and Exemption”. Save as disclosed above, (i) the Cornerstone Investor and
its ultimate beneficial owner is an Independent Third Party and is independent of the Group, its
connected persons and their respective close associates; (ii) the Cornerstone Investor is not
accustomed to taking instructions from our Company, the Directors, the Supervisors, chief
executives, substantial Shareholders, existing Shareholders or any of their respective subsidiaries or
their respective close associates in relation to the acquisition, disposal, voting or other disposition
of the Offer Shares; (iii) none of the subscription of the relevant Offer Shares by the Cornerstone
Investor is financed by our Company, the Directors, the Supervisors, chief executives, substantial
Shareholders, existing Shareholders or any of their respective subsidiaries or their respective close
associates; (iv) the Cornerstone Investor will be utilizing its internal resources as its source of
funding for the subscription of the Offer Shares; and (v) no approval from another stock exchange
is required for the Cornerstone Investor’s investment in our Company as described in this section.
The Cornerstone Placing will form part of the International Offering and the Cornerstone
Investor will not subscribe for any Offer Shares under the Global Offering (other than pursuant to
the Cornerstone Investment Agreement). The Offer Shares to be subscribed by the Cornerstone
Investor will rank pari passu in all respect with the fully paid Shares in issue.
Other than a guaranteed allocation of the relevant Offer Shares at the Offer Price, the
Cornerstone Investor does not have any preferential rights in the Cornerstone Investment
Agreement compared with other public Shareholders. As confirmed by the Cornerstone Investor,
there are no side arrangements between our Company and the Cornerstone Investor or any benefit,
direct or indirect, conferred on the Cornerstone Investor by virtue of or in relation to the Listing.
The total number of Offer Shares to be subscribed by the Cornerstone Investor may be affected
by reallocation of the Offer Shares between the International Offering and the Hong Kong Public
Offering in the event of over-subscription under the Hong Kong Public Offering as described in the
CORNERSTONE INVESTOR
– 206 –


--- page 217 ---
paragraph headed “Structure of the Global Offering — The Hong Kong Public Offering —
Reallocation” in this Prospectus. The number of Offer Shares to be acquired by the Cornerstone
Investor may be reduced on a pro rata basis in accordance with the terms of the Cornerstone
Investment Agreement to satisfy the short fall, after taking into account the requirements under
Appendix F1 to the Listing Rules.There will be no deferred settlement of the investment amount for
the Offer Shares to be subscribed by the Cornerstone Investor pursuant to the Cornerstone
Investment Agreement.
Details of the actual number of Offer Shares to be allocated to the Cornerstone Investor will
be disclosed in the allotment results announcement of our Company to be published on or around
March 27, 2026.
OUR CORNERSTONE INVESTOR
The tables below set forth the aggregate number of Offer Shares, and the corresponding
percentages to the Offer Shares and our Company’s total issued share capital under the Cornerstone
Placing based on the Offer Price:
Name Investment Amount (1)
Number of
Offer Shares
(rounded
down to
nearest
whole board
lot of 50
H Shares)
Approximate
% of total
number of
Offer Shares
Approximate
%o fH
Shares in
issue
immediately
following the
completion
of the
Global
Offering
Approximate
% of total
Shares in
issue
immediately
following the
completion
of the
Global
Offering
Xiamen Advanced
Manufacturing
(as defined
below) /H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$774,797,022.30 10,058,500 46.80% 8.46% 2.36%
Note:
(1) The investment amount includes brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange trading
fee, and is calculated based on the exchange rate set out in the section headed “Information about this Prospectus and
the Global Offering” in this Prospectus. The number of Offer Shares to be subscribed by the Cornerstone Investor is
subject to the exchange rate to be determined in accordance with the Cornerstone Investment Agreements, if
applicable.
The following information about the Cornerstone Investor was provided to our Company by
the Cornerstone Investor in relation to the Cornerstone Placing.
Xiamen Advanced Manufacturing Fund
Xiamen Advanced Intelligent Manufacturing Industry Investment Limited (΋ආ౽ிପุ
ʮ̡) is a company incorporated in Hong Kong and is wholly owned by Xiamen Advanced
Manufacturing Equity Investment Fund Partnership (Limited Partnership) (ᛆҳ
ΥྫΆุ(Υྫ), “ Xiamen Advanced Manufacturing Fund ”), a limited partnership
established in the PRC on June 19, 2024. Xiamen Advanced Manufacturing Fund is managed and
held as to 0.1% and 0.0125% by its respective general partners, (i) Xiamen Haiyi Investment Co.,
Ltd. (ʮ̡), a wholly-owned subsidiary of CCRE Group Co., Ltd. (ऎᑈණ
ʮ̡)( “ CCRE ”), which is ultimately wholly owned and controlled by the State-owned
Assets Supervision and Administration Commission of Xiamen Municipal People’s Government ( ข
ึ)( “ Xiamen SASAC ”) and (ii) Golden Brics (Xiamen)
Equity Investment Fund Co., Ltd. (ጌ(ژ)ʮ̡), which is held as to 51% by
Fujian Pingtan Golden Brics Think Tank Investment Consulting Co., Ltd. (ҳ
ʮ̡), an Independent Third Party, and 49% by CCRE. Xiamen Advanced
CORNERSTONE INVESTOR
– 207 –


--- page 218 ---
Manufacturing Fund has five limited partners, namely Xiamen Xinyi Technology Industry Co., Ltd.
(ʮ̡), CCRE, Xiamen Jimei Industrial Investment Group Co., Ltd. (ණ
ʮ̡), Xiamen Torch Industry Equity Investment Management Co., Ltd. (ژ
ʮ̡), and Xiamen Industrial Investment Co., Ltd. (̹ପุҳ༟Ϟ
ʮ̡), holding 62.50%, 24.88%, 7.50%, 5.00% and 0.01% interests in the partnership,
respectively, and they are wholly owned by government bodies in Xiamen including Xiamen
SASAC, Xiamen Municipal Finance Bureau (҅) and Xiamen Jimei District Bureau of
Finance (҅).
CLOSING CONDITIONS
The obligation of the Cornerstone Investor to subscribe for the Offer Shares under the
Cornerstone Investment Agreement is subject to, among other things, the following closing
conditions:
(i) the Underwriting Agreements 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 Underwriting
Agreements having been terminated;
(ii) the Offer Price having been agreed according to the underwriting agreements in
connection with the Global Offering;
(iii) the Listing Committee having granted the listing of, and permission to deal in, the H
Shares (including the H Shares subscribed for by the Cornerstone Investor 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;
(iv) no laws shall have been enacted or promulgated by any governmental authority which
prohibits the consummation of the transactions contemplated in the Global Offering or
the Cornerstone Investment Agreement and there shall be no orders or injunctions from
a court of competent jurisdiction in effect precluding or prohibiting consummation of
such transactions; and
(v) the respective representations, warranties, acknowledgments, undertakings and
confirmations of the relevant Cornerstone Investor under the Cornerstone Investment
Agreement are (as of the date of the Cornerstone Investment Agreement) and will be (as
of the Listing Date) accurate and true in all respects or material respects (as the case may
be) and not misleading or not misleading in any material respect (as the case may be)
and that there is no material breach of the Cornerstone Investment Agreement on the part
of the relevant Cornerstone Investor.
RESTRICTIONS ON THE CORNERSTONE INVESTOR
The Cornerstone Investor has agreed that it will not, whether directly or indirectly, at any time
during the period of 18 months from and including the Listing Date (the “ Lock-up Period ”),
dispose of any of the Offer Shares it has purchased pursuant to the Cornerstone Investment
Agreement, save for certain limited circumstances, such as transfers to any of its wholly-owned
subsidiaries which will be bound by the same obligations of such Cornerstone Investor, including
the Lock-up Period restriction.
CORNERSTONE INVESTOR
– 208 –


--- page 219 ---
You should read the following discussion and analysis in conjunction with our
consolidated financial information including the notes thereto, included in the Accountant’ s
Report set out in Appendix I to this Prospectus, together with the respective accompanying
notes. Our consolidated financial information has been prepared in accordance with IFRSs,
which may differ in material aspects from generally accepted accounting principles in other
jurisdictions.
The following discussion and analysis contain forward-looking statements that reflect
our current views with respect to future events and financial performance that involve risks
and uncertainties. These statements are based on assumptions and analysis made by us in
light of our experience and perception of historical events, current conditions and expected
future developments, as well as other factors we believe are appropriate under the
circumstances. However , whether actual outcomes and developments will meet our
expectations and predictions depends on a number of risks and uncertainties, many of which
we cannot control or foresee. In evaluating our business, you should carefully consider all of
the information provided in this Prospectus, including the sections headed “Risk Factors”
and “Business.”
For the purpose of this section, unless the context otherwise requires, references to
2022, 2023 and 2024 refer to our financial years ended December 31 of such years. Unless
the context otherwise requires, financial information described in this section is described on
a consolidated basis.
OVERVIEW
We are a global leader in the silicon carbide (SiC) epitaxy industry. According to CIC, since
2023, we have been the world’s largest SiC epitaxial foundry by annual sales volume, with a market
share exceeding 30% in 2024.
We are committed to developing SiC epitaxy technology for manufacturing high-quality SiC
epitaxial wafers, enabling us to capture market share with our reliable product quality and stable
production capacity. We were the first in the world to achieve large-scale commercial supply of
8-inch SiC epitaxial wafers and the first in China to commercialize and mass-produce 3-inch,
4-inch, 6-inch, and 8-inch SiC epitaxial wafers. We led the writing and establishment of the world’s
first and only Semiconductor Equipment and Materials International (SEMI) industry standard for
SiC epitaxy. In 2024, our cumulative sales combining sales under Turnkey and Consign models
exceeded 164,000 SiC epitaxial wafers. During the Track Record Period, we have delivered a total
of over 599,700 SiC epitaxial wafers.
Among SiC epitaxial foundries worldwide, we achieved reliable performance in terms of
product quality, yield rates and consistency. According to CIC, our products lead the industry in key
performance metrics for SiC epitaxial products, including epitaxial thickness, doping concentration,
epitaxial defect and yield rates. For example, for our Consign service provided to a leading global
SiC device manufacturer, our SiC epitaxial wafer products reached a yield rate of 99%. Our success
is also demonstrated by our profitability and cash flow in the Track Record Period. In 2024, our
revenue, adjusted net profit (Non-IFRS measure) and operating cash flow reached RMB974.3
million, RMB323.5 million and RMB640.6 million, respectively. In the early stage of our
operations, we primarily focused on the R&D of SiC epitaxial wafers, with substantial R&D
investments and relatively low yield rates, resulting in an overall loss-making status. We also made
substantial investments in production assets while primarily manufacturing on 4-inch SiC epitaxial
wafers, which catered to a relatively limited market segment. During this period, we had not yet
achieved mass production or large-scale sales, resulting in relatively low gross margins. Since 2020,
however, market demand for 6-inch SiC epitaxial wafers has grown significantly. In response, we
FINANCIAL INFORMATION
– 209 –


--- page 220 ---
have strategically expanded our production capacity to capture a larger share of the expanding
6-inch wafer market. We had incurred accumulated losses of RMB129.2 million as of January 1,
2022, but recorded net profits of RMB127.5 million, RMB107.5 million, RMB165.1 million,
RMB118.4 million and RMB21.1 million in 2022, 2023 and 2024 and for the nine months ended
September 30, 2024 and 2025, respectively. The primary reasons for our turnaround from losses to
profitability during the Track Record Period were the significant growth in market demand for our
SiC epitaxial products, primarily driven by the increasing adoption of silicon carbide in new energy
vehicles, which substantially increased our operating revenue, as well as rising demand from our
customers.
The sales volume and revenue of our epitaxial wafers we achieved during the Track Record
Period was mainly due to (i) the widespread adoption of global automotive electrification,
photovoltaic power generation, and smart grid applications in recent years, as SiC devices
leveraging their excellent physical properties have seen continuous growth in market size and
penetration, driving increased demand for epitaxial wafers; and (ii) our leading process technology,
high-quality products, comprehensive delivery management, and after-sales services, through which
we have gradually accumulated key customer resources from leading domestic and international
SiC power device manufacturers, maintaining long-term and strong cooperative relationships that
support sustainable revenue growth.
We offer and generate revenue from sales of SiC epitaxial wafers through Turnkey and
Consign models. The key difference between the two models is the source of the substrates: we
procure substrates under the Turnkey model and our customers supply substrates to us under the
Consign model. Both services enable our customers to rely on our cumulative expertise in the
production of SiC epitaxial wafers. During the Track Record Period, the average selling price of our
SiC epitaxial wafers products showed an overall trend of decline. Specifically, the average price of
6-inch SiC epitaxial wafers declined year by year during the Track Record Period, while the average
price of 4-inch wafers initially declined before subsequently rising. For 6-inch epitaxial wafers, the
decline in average selling price was primarily due to lower raw material costs, which reduced unit
production expenses and reflected broader industry trends.
During the Track Record Period, our revenue reached RMB440.7 million, RMB1,142.5
million, RMB974.3 million, RMB808.3 million and RMB535.1 million in 2022, 2023 and 2024 and
for the nine months ended September 30, 2024 and 2025, respectively. Gross profit for the same
period was RMB196.9 million, RMB445.4 million, RMB332.3 million, RMB285.7 million and
RMB137.1 million, with gross profit margins of 44.7%, 39.0%, 34.1%, 35.3% and 25.6%,
respectively. Net profit was RMB127.5 million, RMB107.5 million, RMB165.1 million, RMB118.4
million and RMB21.1 million, while adjusted net profit (Non-IFRS measure) was RMB171.9
million, RMB383.8 million, RMB323.5 million, RMB263.4 million and RMB163.3 million,
respectively. Since 2024, our financial performance has been adversely affected by competitive
market pressures that reduced our selling prices, coupled with weakened demand due to a downturn
in our downstream customers’ markets.
During the Track Record Period, our total assets grew steadily from 2022 to 2024 on an annual
basis. Our total assets were RMB1,453.6 million, RMB3,073.6 million, RMB4,502.9 million and
RMB4,366.6 million as of December 31, 2022, 2023 and 2024 and September 30, 2025, while total
liabilities were RMB870.1 million, RMB1,609.4 million, RMB1,689.5 million and RMB1,389.2
million, respectively. Our net assets were RMB583.5 million, RMB1,464.2 million, RMB2,813.5
million and RMB2,977.5 million as of December 31, 2022, 2023 and 2024 and September 30, 2025.
During the Track Record Period, our net cash flow generated from operating activities showed
strong performance and growth from 2022 to 2024 on an annual basis, amounting to RMB170.0
million, RMB415.2 million, RMB640.6 million, RMB470.9 million and RMB176.2 million in 2022,
2023 and 2024 and for the nine months ended September 30, 2024 and 2025, respectively. Our net
cash flow used in investing activities was RMB505.3 million, RMB1,140.5 million, RMB144.3
million, RMB144.5 million and RMB21.5 million in 2022, 2023 and 2024 and for the nine months
FINANCIAL INFORMATION
– 210 –


--- page 221 ---
ended September 30, 2024 and 2025, respectively. Our net cash flow generated from financing
activities was RMB459.1 million, RMB1,000.4 million, RMB984.8 million and RMB289.6 million
in 2022, 2023 and 2024 and for the nine months ended September 30, 2024, and net cash flow used
in financing activities was RMB352.6 million for the nine months ended September 30, 2025. As
a result, cash and cash equivalents as of December 31, 2022, 2023 and 2024 and September 30, 2024
and 2025 amounted to RMB274.4 million, RMB549.5 million, RMB2,030.7 million, RMB1,165.5
million and RMB1,832.8 million, respectively.
BASIS OF PRESENTATION AND PREPARATION
The consolidated financial statements of the Group for the Track Record Period, on which the
Historical Financial Information is based, have been prepared in accordance with the accounting
policies which conform with IFRS Accounting standards (“ IFRSs ”) issued by International
Accounting Standards Board (“ IASB ”) and were audited by BDO Limited in accordance with Hong
Kong Standards on Auditing issued by the HKICPA (the “ Underlying Financial Statements ”). For
details of the basis of preparation, see Note 2 to the Accountant’s Report included in Appendix I
to this Prospectus.
The preparation of the Historical Financial Information in conformity with IFRSs requires the
use of certain critical accounting estimates. It also requires management to exercise its judgment in
the process of applying the Group’s accounting policies. The areas involving a higher degree of
judgment or complexity, or areas where assumptions and estimates are significant to the Historical
Financial Information are disclosed in Note 5 to the Accountant’s Report included in Appendix I to
this Prospectus.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
The growth and future success of our business depend on many factors. While each of these
factors presents significant opportunities for our business, they also pose challenges that we must
successfully address in order to sustain our growth and improve our results of operations. Our
business, results of operations and financial performance are principally affected by the following
factors:
The Market Demand from Key Industries and Our Product Offerings
Currently, SiC epitaxial wafer offered in the market can be classified as 3-inch, 4-inch, 6-inch
and 8-inch in terms of its size. According to CIC, we were the first in the world to achieve
large-scale commercial supply of 8-inch SiC epitaxial wafers and the first in China to mass-produce
and commercialize a comprehensive set of 3-inch, 4-inch, 6-inch, and 8-inch SiC epitaxial wafers.
Driven by technological developments in processing power, miniaturization and energy
efficiency, as well as increasing demand from downstream industries, the SiC device market size
witnessed overall growth from 2019 to 2024. Our revenue increased from RMB440.7 million in
2022 to RMB974.3 million in 2024, mainly driven by the increased market demand.
Our Ability to Offer Competitive Products and Enrich Product Offerings
Our products are primarily based on the SiC epitaxy technologies, and our future success
depends on the successful upgrade and expansion of our SiC epitaxy wafer product portfolio.
According to CIC, since 2023, we have been the world’s largest SiC epitaxial foundry by annual
sales volume, commanding a market share exceeding 30% in 2024. We believe our competitive
product offerings are the backbone of our industry leading position and commercial success.
FINANCIAL INFORMATION
–2 1 1–


--- page 222 ---
Our customers are constantly seeking products with better performance, and our success relies
heavily on our ability to continue to develop and provide our customers with innovative products
and improve existing products. During the Track Record Period, our SiC epitaxial wafer products
are primarily sold to leading SiC power device companies with various end applications. Our
continued success depends significantly on our ability to offer competitive products and enrich
product offerings to cater to customers’ evolving demands.
Changes in Market Prices of Raw Materials and SiC Epitaxial Wafer Products and Our
Manufacturing Costs
During the Track Record Period, raw material costs were the largest component of our cost of
sales. Our raw material costs amounted to RMB180.0 million, RMB495.0 million, RMB411.3
million, RMB327.3 million and RMB214.2 million, respectively, in 2022, 2023 and 2024 and for
the nine months ended September 30, 2024 and 2025, representing for 73.9%, 71.0%, 64.1%, 62.6%
and 53.8%, respectively, of our total cost of sales in the same periods. Our production costs and
profit margin depend on our ability to source key raw materials at competitive prices. We procure
a variety of raw materials necessary for the manufacturing of our SiC epitaxial wafers, including
conductive SiC substrates and other accessory materials such as graphite components, chemicals,
packaging materials and special gases. Any fluctuation in prices of raw materials or availability of
raw materials could affect our pricing, production costs and, in turn the gross profit margin of our
products. If we fail to price our products at a level that achieve desired margin while still remaining
competitive in the market, our performance and results of operation will be adversely affected.
Changes in Overseas Demand and Trade Policies
Our business is subject to changes in customer demand from our overseas customers and trade
policies such as tariffs or harsh trade conditions or other trade-related measures in various forms
against certain countries. Sales to overseas markets, contributed a substantial portion of our revenue
during the Track Record Period. Our revenue generated outside Greater China was amounted to
RMB273.0 million, RMB835.3 million, RMB766.7 million, RMB646.9 million and RMB195.0
million, respectively, in 2022, 2023 and 2024 and for the nine months ended September 30, 2024
and 2025, accounting for 61.9%, 73.1%, 78.7%, 80.0% and 36.5% of our total revenue for the
respective periods.
Changes in international trade policies can significantly impact our export activities.
Adjustments in tariffs, quotas, and trade agreements may either facilitate or hinder our access to
overseas markets. We must stay informed about these policy shifts to adapt our strategies
accordingly, ensuring compliance and optimizing our competitive advantage in the global
marketplace. Accordingly, our revenue and results of operations may be affected. We cannot fully
predict or control the implications of any change in international trade policies and the resulting
impact on our industry and the global economy. See “Risk Factors — Risks Related to Our Business
and Industry — Our business, financial condition and results of operations may be materially and
adversely affected by geopolitical tensions, international trade policies, international export
controls and economic sanctions.”
CRITICAL ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES
The preparation of the historical financial information requires the use of accounting estimates
which, by definition, will seldom equal the actual results. Management also needs to exercise
judgment in applying our accounting policies. Estimates and judgments are continually evaluated.
They are based on historical experience and other factors, including expectations of future events
that may have a financial impact on us and that are believed to be reasonable under the
circumstances. For details on such estimates and judgments, see Note 3 to the Accountant’s Report
included in Appendix I to this Prospectus. For accounting treatment and details of Pre-IPO
Investments, see Note 30 to the Accountants’ Report.
FINANCIAL INFORMATION
– 212 –


--- page 223 ---
Our management has identified below the accounting policies, estimates and judgments that
they believe are critical to the preparation of our financial statements:
Revenue Recognition
Revenue from Contracts with Customers
Revenue from contracts with customers is recognized when control of goods or services is
transferred to the customers at an amount that reflects the consideration to which we expect to be
entitled in exchange for those goods or services, excluding those amounts collected on behalf of
third parties. Revenue excludes value added tax or other sales taxes and is after deduction of any
trade discounts.
Depending on the terms of the contract and the laws that apply to the contract, control of the
goods or service may be transferred over time or at a point in time. Control of the goods or service
is transferred over time if our performance:
 provides all of the benefits received and consumed simultaneously by the customer;
 creates or enhances an asset that the customer controls as we perform; or
 does not create an asset with an alternative use to us and we have an enforceable right
to payment for performance completed to date.
If control of the goods or services transfers over time, revenue is recognized over the period
of the contract by reference to the progress towards complete satisfaction of that performance
obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control
of the goods or service.
Contracts with customers may include multiple performance obligations. For such
arrangements, we allocate revenue to each performance obligation based on its relative standalone
selling price. We generally determine standalone selling prices based on the prices charged to
customers. If the standalone selling price is not directly observable, it is estimated using expected
cost plus a margin or adjusted market assessment approach, depending on the availability of
observable information.
When the contract contains a financing component which provides the customer a significant
benefit of financing the transfer of goods or services to the customer for more than one year,
revenue is measured at the present value of the amounts receivable, discounted using the discount
rate that would be reflected in a separate financing transaction between us and the customer at
contract inception. Where the contract contains a financing component which provides a significant
financing benefit to us, revenue recognized under that contract includes the interest expense
accreted on the contract liability under the effective interest method. For contracts where the period
between the payment and the transfer of the promised goods or services is one year or less, the
transaction price is not adjusted for the effects of a significant financing component, using the
practical expedient in IFRS 15.
Contract liabilities represent advanced consideration received from customers.
The determination of whether revenue shall be reported on a gross or net basis is based on an
assessment of whether we are acting as the principal or an agent in the transactions. If we provide
significant integration service to the hardware and is responsible for the overall management of the
contract, we are the principal in the transaction and recognizes revenue in the gross amount of
consideration to which it is entitled from the customer. We report the amount received from the
customers and the amounts paid to the suppliers related to these transactions on a net basis if we
are not primarily obligated in a transaction, does not generally bear the inventory risk and does not
have the ability to establish the price.
FINANCIAL INFORMATION
– 213 –


--- page 224 ---
Other Income
Interest income is recognized using the effective interest method for debt instruments
measured subsequently at amortized cost and at FVOCI, and is calculated by applying the effective
interest rate to the gross carrying amount of the debt instruments when the asset is not
credit-impaired. For debt instruments that have become credit-impaired, interest income is
calculated by applying the effective interest rate to the amortized cost of the financial asset.
Share-based Payments
We operate share award schemes for the purpose of providing incentives and rewards to
eligible participants who contribute to the success of our operations. Employees (including
directors) of us receive remuneration in the form of share-based payments, whereby employees
render services as consideration for equity instruments (“equity-settled transactions”). The cost of
equity-settled transactions with employees is measured by reference to the fair value at the date on
which they are granted. Further details are included in Note 36 to the historical financial
information of the Accountant’s Report included in Appendix I of this Prospectus.
The cost of equity-settled transactions is recognized in employee benefit expense, together
with a corresponding increase in equity, over the period in which the performance and/or service
conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at the
end of each of the Track Record Period until the vesting date reflects the extent to which the vesting
periods has expired and our best estimate of the number of equity instruments that will ultimately
vest. The charge or credit to profit or loss for a period represents the movement in the cumulative
expense recognized as at the beginning and end of that periods.
Service and non-market performance conditions are not taken into account when determining
the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part
of our best estimate of the number of equity instruments that will ultimately vest. Market
performance conditions are reflected within the grant date fair value. Any other conditions attached
to an award, but without an associated service requirement, are considered to be non-vesting
conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an
immediate expensing of an award unless there are also service and/or performance conditions.
For awards that do not ultimately vest because non-market performance and/or service
conditions have not been met, no expense is recognized. Where awards include a market or
non-vesting condition, the transactions are treated as vesting irrespective of whether the market or
non-vesting condition is satisfied, provided that all other performance and/or service conditions are
satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is
recognized as if the terms had not been modified, if the original terms of the award are met. In
addition, an expense is recognized for any modification that increases the total fair value of the
share-based payments, or is otherwise beneficial to the employee as measured at the date of
modification. Where an equity-settled award is canceled, it is treated as if it had vested on the date
of cancelation, and any expense not yet recognized for the award is recognized immediately. This
includes any award where non-vesting conditions within the control of either us or the employee are
not met. However, if a new award is substituted for the canceled award and is designated as a
replacement award on the date that it is granted, the canceled and new awards are treated as if they
were a modification of the original award, as described in the previous paragraph.
FINANCIAL INFORMATION
– 214 –


--- page 225 ---
Impairment of Assets (other than Financial Assets)
At the end of each reporting period, the Company reviews the carrying amounts of the
following assets to determine whether there is any indication that those assets have suffered an
impairment loss or an impairment loss previously recognized no longer exists or may have
decreased:
 Property, plant and equipment, including right-of-use assets;
 Investments in subsidiary; and
 Intangible assets.
Where an asset does not generate cash inflows largely independent of those from other assets,
the recoverable amount is determined for the smallest group of assets that generates cash inflows
independently as cash generating units (CGUs). As a result, some assets are tested individually for
impairment and some are tested at CGU level. Corporate assets are allocated to individual CGUs
when a reasonable and consistent basis of allocation can be identified, or otherwise they are
allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis can
be identified.
If the recoverable amount, which equals to the greater of the fair value less costs of disposal
and value-in-use, of an asset is estimated to be less than its carrying amount, the carrying amount
of the asset is reduced to its recoverable amount. An impairment loss is recognized as an expense
immediately, unless the relevant asset is carried at a revalued amount under another IFRS rule, in
which case the impairment loss is treated as a revaluation decrease under that IFRS rule.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased
to the revised estimate of its recoverable amount, to the extent that the increased carrying amount
does not exceed the carrying amount that would have been determined had no impairment loss been
recognized for the asset in prior years. In respect of assets other than goodwill, reversal of an
impairment loss is recognized in profit or loss immediately, unless the relevant asset is carried at
a revalued amount under another IFRS, in which case the reversal of the impairment loss is treated
as a revaluation increase under that IFRS. An impairment loss in respect of goodwill is not reversed.
V alue-in-use is based on the estimated future cash flows expected to be derived from the asset
or CGU, 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.
Impairment of Financial Assets
The measurement of the expected credit losses (ECLs) allowance for financial assets
measured at amortized cost is an area that requires the use of significant assumptions about future
economic conditions and credit behavior, such as the likelihood of customers defaulting and the
resulting losses. A number of significant judgments, including determining the criteria for
significant increase in credit risk, are also required in applying the accounting requirements for
measuring ECLs. Details about the judgments and assumptions used in measuring ECLs is set out
in Note 4.10(b) and Note 42(b) to the Accountant’s Report included in Appendix I. Changes to these
estimates and assumptions can result in significant changes to the timing and amount of ECLs to
be recognized.
FINANCIAL INFORMATION
– 215 –


--- page 226 ---
Financial Liabilities and Equity
Classification as Debt or Equity
Debt and equity instruments are classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangements and the definitions of a financial
liability and an equity instrument.
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity
after deducting all of its liabilities. Equity instruments issued by the Group are recognized at the
proceeds received, net of direct issue costs.
Financial Liabilities
We classify our financial liabilities at amortized cost. Financial liabilities at amortized cost are
initially measured at fair value, net of directly attributable costs incurred.
Financial liabilities at amortized cost including trade and bills payables and other payables
and accruals are initially recognized at fair value, net of transaction costs incurred, and
subsequently measured at amortized cost, using the effective interest method. The related interest
expense is recognized as described in Note 4.15 in Appendix I.
Gains or losses are recognized in profit or loss when the liabilities are de-recognized as well
as through the amortization process.
SUMMARY OF OUR CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
The table below sets forth our consolidated statements of profit or loss for the years and
periods indicated derived from the Accountant’s Report included in Appendix I to this Prospectus:
Y ears Ended December 31,
Nine Months Ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118440,691 1,142,502 974,316 808,250 535,063
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(243,754) (697,103) (642,007) (522,542) (397,982)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118196,937 445,399 332,309 285,708 137,081
Other income and other
gains, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,534 63,451 168,402 107,583 132,621
Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,866) (48,776) (5,513) (6,770) (8,224)
Administrative and other
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(48,136) (162,749) (175,575) (147,142) (155,126)
Research and development
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(43,829) (101,786) (79,992) (62,096) (50,374)
(Impairment loss)/reversal
of impairment loss on
financial assets, net /H1118/H1118/H1118(901) 149 (1,253) (200) (2,116)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(20,281) (32,535) (30,197) (21,595) (9,636)
Profit before taxation /H1118/H1118/H1118103,458 163,153 208,181 155,488 44,226
FINANCIAL INFORMATION
– 216 –


--- page 227 ---
Y ears Ended December 31,
Nine Months Ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Income tax
credit/(expense) /H1118/H1118/H1118/H1118/H1118/H111824,085 (55,648) (43,114) (37,075) (23,081)
Profit for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127,543 107,505 165,067 118,413 21,145
For accounting treatment and details of Pre-IPO Investments, see Note 32 to the Accountants’
Report.
NON-IFRS MEASURE
To supplement our consolidated financial statements presented in accordance with IFRSs, we
use adjusted net profit (Non-IFRS measure) for the period as additional financial measure, which
is not required by, or presented in accordance with IFRSs. We believe that the non-IFRS measure
facilitates comparisons of operating performance from period to period and company to company
and provides useful information to investors and others in understanding and evaluating our
operating performance in the same manner as it helps our management. However, our presentation
of adjusted net profit (Non-IFRS measure) for the periods may not be comparable to similarly titled
measure presented by other companies. The use of the non-IFRS measure has limitations as an
analytical tool, and investors should not consider it in isolation from, or as substitute for analysis
of, our results of operations or financial condition as reported under IFRSs.
We define adjusted net profit (Non-IFRS measure) for the period as profit for the period
adjusted by adding back (i) equity-settled share-based payment expenses, which are non-cash in
nature, (ii) interest expenses for redemption right, which will be converted into equity of the
Company upon the Listing, and (iii) listing expense, which are related to the Global Offering.
The following table reconciles our adjusted net profit (Non-IFRS measures) for the
year/period presented in accordance with IFRSs, namely profit for the period:
Y ears Ended December 31,
Nine Months Ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118127,543 107,505 165,067 118,413 21,145
Adjustment by adding back:
Equity-settled share-based
payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,575 256,210 154,249 141,163 124,484
Interest expenses for
redemption right /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,825 14,387 1,334 1,000 344
Listing expense for previous
listing application /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,678 2,853 2,853 –
Listing expense for the
Listing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 17,368
Adjusted net profit (Non-
IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118171,943 383,780 323,503 263,429 163,341
FINANCIAL INFORMATION
– 217 –


--- page 228 ---
Adjusted net profit (Non-IFRS measure)
We had adjusted net profit (Non-IFRS measure) of RMB171.9 million, RMB383.8 million,
RMB323.5 million, RMB263.4 million and RMB163.3 million in 2022, 2023 and 2024 and for the
nine months ended September 30, 2024 and 2025, respectively. Our adjusted net profit (Non-IFRS
measure) is adjusted by adding back equity-settled share-based payment to profit for the
year/period.
DESCRIPTION OF KEY COMPONENTS OF CONSOLIDATED STATEMENTS OF PROFIT
OR LOSS
Revenue
We generate revenue from sales of SiC epitaxial wafers through Turnkey and Consign models.
The key difference between the two models is the source of the substrates: we procure substrates
under the Turnkey model and our customers supply substrates to us under the Consign model. Both
services enable our customers to rely on our cumulative expertise in the production of SiC epitaxial
wafers. See “Business — Our Products and Business Models” for details of our Turnkey and
Consign services. We apply consistent revenue recognition policies between Turnkey and Consign
services under which we recognize revenue at the point of delivery to customers. During the Track
Record Period, the revenue generated from Turnkey service amounted to RMB277.8 million,
RMB847.7 million, RMB839.6 million, RMB679.1 million and RMB483.4 million accounting for
63.0%, 74.2%, 86.2%, 84.0% and 90.3% in 2022, 2023 and 2024 and for the nine months ended
September 30, 2024 and 2025 of total revenue during the same periods, respectively. The revenue
generated from Consign service amounted to RMB156.6 million, RMB292.8 million, RMB121.1
million, RMB118.1 million and RMB23.2 million in 2022, 2023 and 2024 and for the nine months
ended September 30, 2024 and 2025, accounting for 35.5%, 25.6%, 12.4%, 14.6% and 4.3% of total
revenue during the same periods, respectively.
The following table sets forth a breakdown of our revenue by product/type of service for the
years and periods indicated, in absolute amounts and as percentages of revenue.
Y ears Ended December 31, Nine Months Ended September 30,
2022 2023 2024 2024 2025
(RMB in thousands, except for percentages)
(unaudited)
Turnkey
3-inch /H1118/H1118/H1118/H1118/H1118––––––––4 0 . 0
4-inch /H1118/H1118/H1118/H1118/H111818,961 4.3 2,217 0.2 1,671 0.2 1,348 0.2 9 0.0
6-inch /H1118/H1118/H1118/H1118/H1118258,802 58.7 839,477 73.5 736,223 75.6 593,814 73.5 407,702 76.2
8-inch /H1118/H1118/H1118/H1118/H1118– – 5,985 0.5 101,683 10.4 83,981 10.4 75,689 14.1
Subtotal /H1118/H1118/H1118/H1118277,763 63.0 847,679 74.2 839,577 86.2 679,143 84.0 483,403 90.3
Consign
4-inch /H1118/H1118/H1118/H1118/H1118522 0.1 55 0.0 31 0.0 8 0.0 2,370 0.4
6-inch /H1118/H1118/H1118/H1118/H1118156,047 35.4 292,695 25.6 121,072 12.4 118,092 14.6 20,579 3.8
8-inch /H1118/H1118/H1118/H1118/H1118–––––––– 2 4 6 0 . 0
Subtotal /H1118/H1118/H1118/H1118156,569 35.5 292,750 25.6 121,103 12.4 118,100 14.6 23,194 4.3
Others (1) /H1118/H1118/H1118/H1118/H11186,359 1.4 2,073 0.2 13,636 1.4 11,007 1.4 28,466 5.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118440,691 100.0 1,142,502 100.0 974,316 100.0 808,250 100.0 535,063 100.0
Note:
(1) Others mainly include sales of SiC substrate.
FINANCIAL INFORMATION
– 218 –


--- page 229 ---
Revenue by Region
During the Track Record Period, we derived revenues from sales to customers in various
regions, mainly Asia and Europe. Our revenue from Asia and Europe markets accounted for 96.4%,
93.5%, 96.6%, 96.4% and 97.2% of our total revenue in 2022, 2023 and 2024 and for the nine
months ended September 30, 2024 and 2025, respectively. In addition, the revenue from Greater
China amounted to RMB167.7 million, RMB307.2 million, RMB207.7 million, RMB161.3 million
and RMB340.0 million in 2022, 2023 and 2024 and for the nine months ended September 30, 2024
and 2025, respectively. We record revenue from our customers by region based on the customer’s
registered address or place of incorporation.
The following table sets forth a breakdown of revenue by region, based on the locations of our
direct contracting customers, for the years and periods indicated, in absolute amount and as
percentage of total revenues.
Y ears Ended December 31, Nine Months Ended September 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(in thousands, except for percentages)
(unaudited)
Revenue by region
Asia (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118275,470 62.5 745,221 65.2 672,429 69.0 543,971 67.3 455,961 85.2
Greater China /H1118/H1118/H1118/H1118167,703 38.1 307,249 26.9 207,656 21.3 161,343 20.0 340,026 63.5
Europe (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,339 33.9 323,343 28.3 268,943 27.6 235,014 29.1 64,160 12.0
North America (3) /H1118/H1118/H1118/H111814,083 3.2 73,938 6.5 32,944 3.4 29,265 3.6 14,942 2.8
Others (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,799 0.4 – – – – – – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118440,691 100.0 1,142,502 100.0 974,316 100.0 808,250 100.0 535,063 100.0
Notes:
(1) Asia primarily comprises Greater China, South Korea and Japan.
(2) Europe primarily comprises Austria, Switzerland and the U.K.
(3) North America primarily comprises the U.S.
(4) Other primarily comprises Australia.
Cost of Sales
Our cost of sales primarily include (i) raw materials, which mainly include conductive SiC
substrates, graphite components, gases, chemicals and packaging materials, (ii) labor costs, which
mainly include salaries and benefits, and (iii) share-based payment for our production personnel,
(iv) depreciation of our production plant and equipment, utility expenses and parts and
consumables, and (v) others.
Our cost of sales increased from RMB243.8 million in 2022 to RMB697.1 million in 2023,
primarily due to the expansion of production capacity, a significant increase in sales volume during
the same period and increased share-based payment for our employees. In 2023, we also recognized
a substantial share-based payment, which included a portion of a one-time recognized share-based
payment to attract and retain talents and for them to share and contribute to our growth. The
employee share-based payments consist of two parts: the portion without a service period is
recognized as a one-time expense in 2023, allocated to costs, selling expenses, or administrative
expenses based on the employee’s department; the portion with a service period is amortized over
the service period and allocated to the corresponding costs or expenses for each year.
FINANCIAL INFORMATION
– 219 –


--- page 230 ---
Our cost of sales decreased from RMB697.1 million in 2023 to RMB642.0 million in 2024,
primarily due to a significant reduction in share-based payment expenses. This was because the
one-time recognized share-based payment in 2023 was not present in 2024. Additionally,
depreciation increased significantly as buildings and production equipment in our production site
were gradually capitalized.
Our cost of sales decreased from RMB522.5 million for the nine months ended September 30,
2024 to RMB398.0 million for the same period in 2025, primarily due to the decrease in the costs
of raw materials, in line with the fluctuation of our revenues. This was partially offset by the
increase in our depreciation, primarily due to the completion of our certain construction projects,
which started to record depreciation. In addition, share-based payment expenses were higher for the
nine months ended September 30, 2024 than for the year ended December 31, 2024, as a partial
reversal was recorded in the fourth quarter of 2024 following management’s reassessment of certain
sales targets under the incentive plan.
The following table sets forth a breakdown of cost of sales by nature for the years and periods
indicated. See “— Discussion of Results of Operations” for year-over-year discussions of the
changes of our cost of sales.
Y ears Ended December 31, Nine Months Ended September 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(in thousands, except for percentages)
(unaudited)
Raw material /H1118/H1118/H1118/H1118/H1118/H1118180,013 73.9 494,960 71.0 411,273 64.1 327,301 62.6 214,202 53.8
Labor cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,747 10.5 53,683 7.7 57,673 9.0 51,941 9.9 36,725 9.2
Share-based payment /H1118/H1118 – 0.0 57,816 8.3 3,521 0.5 6,845 1.3 4,088 1.1
Depreciation /H1118/H1118/H1118/H1118/H1118/H111822,171 9.1 57,546 8.3 134,805 21.0 112,634 21.6 115,589 29.0
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,934 6.5 28,546 4.1 33,665 5.2 25,340 4.8 25,018 6.3
Less:
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(111) (0.0) 4,552 0.6 1,070 0.2 (1,518) (0.2) 2,360 0.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118243,754 100.0 697,103 100.0 642,007 100.0 522,543 100.0 397,982 100.0
Note:
(1) Others mainly include tax expenses related to operations, energy cost and testing costs.
Gross Profit and Gross Profit Margin
The following table sets forth the gross profit and gross profit margins of the Group during
the Track Record Period.
Y ears 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 in thousands, except for percentages)
(unaudited)
Turnkey /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,808 35.9 301,809 35.6 278,571 33.2 230,333 33.9 143,183 29.6
Consign /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897,331 62.2 151,734 51.8 58,868 48.6 61,049 51.7 2,483 10.7
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(201) (3.2) (8,143) (329.9) (5,130) (37.6) (5,674) (51.6) (8,585) (30.2)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118196,937 44.7 445,399 39.0 332,309 34.1 285,708 35.3 137,081 25.6
Note:
(1) Others primarily represent sales of substrates.
FINANCIAL INFORMATION
– 220 –


--- page 231 ---
Our gross profit represents our revenue less our cost of sales, and our gross margin represents
gross profit divided by our revenue, expressed as a percentage. As a result of the foregoing, in 2022,
2023 and 2024 and for the nine months ended September 30, 2024 and 2025, our gross profit was
RMB196.9 million, RMB445.4 million, RMB332.3 million, RMB285.7 million and RMB137.1
million, respectively. Our overall gross profit margin was 44.7%, 39.0%, 34.1%, 35.3% and 25.6%
for the same periods, respectively.
Our gross profit fluctuated during the Track Record Period, primarily due to changes in
revenue. Our revenue increased by RMB701.8 million, from RMB440.7 million in 2022 to
RMB1,142.5 million in 2023, which is mainly driven by the rapid growth of market demand. This
drove a concurrent expansion in the gross profit of both Turnkey and Consign models. Our gross
profit of Turnkey model increased by RMB747.9 million from 2022 to 2023, and our gross profit
of Consign model increased by RMB195.4 million during the same period. However, our gross
profit margin decreased from 44.7% in 2022 to 39.0% in 2023, primarily due to an increase in share
based payments for core personnel in 2023.
Subsequently, our gross profit decreased from RMB445.4 million in 2023 to RMB332.3
million in 2024. This was mainly due to a reduction in gross profit from Consign service, which fell
from RMB151.7 million in 2023 to RMB58.9 million in 2024. Additionally, our gross profit margin
declined from 39.0% in 2023 to 34.1% in 2024, primarily because (i) the gross profit margin of our
Consign service decreased from 51.8% to 48.6%, mainly due to the downward price pressure across
the industry, and (ii) the proportion of revenue from our Turnkey increased, which has a relatively
lower gross profit margin due to our revenue from and costs by Turnkey model both incorporate the
price of the substrates. As we procure substrates under the Turnkey model, fluctuations in substrate
prices could impact our margins. In addition, an increase in depreciation expenses contributed to
higher costs in 2024.
Our gross profit decreased from RMB285.7 million for the nine months ended September 30,
2024 to RMB137.1 million for the same period in 2025. This was mainly due to the decrease in
gross profit from our Turnkey service from RMB230.3 million for the nine months ended September
30, 2024 to RMB143.2 million for the same period in 2025, primarily due to our competitive pricing
strategies, which were supported by the decline in raw material costs, including substrates.
Additionally, gross profit from our Consign service decreased from RMB61.0 million for the nine
months ended September 30, 2024 to RMB2.5 million for the same period in 2025, primarily due
to the decrease in revenue, which was in turn because certain of our major customers experienced
fluctuations in their business operations and reduced their procurement. Our gross profit margin
decreased from 35.3% for the nine months ended September 30, 2024 to 25.6% for the same period
in 2025, primarily due to our competitive pricing strategies and the decrease in the proportion of
our Consign service, which inherently has a higher profit margin, combined with the write-down of
inventories we recorded in the first quarter of 2025.
During the Track Record Period, a significant portion of our gross profit was attributed to our
6-inch SiC epitaxial wafers, in line with its relatively high sales volume. Our gross profit margin
of 6-inch SiC epitaxial wafers under Turnkey model generally ranges from 30% to 35%, while our
gross profit margin of 6-inch SiC epitaxial wafers under Consign model was approximately 50%
during the Track Record Period. We experienced a decrease in gross profit margin of 6-inch SiC
epitaxial wafers under Consign model for the nine months ended September 30, 2025, primarily due
to the limited sales volume in that period, in combination with a decline in pricing.
Other Income and Other Gains, net
Other income and other gains, net primarily consist of (i) government grants, (ii) bank interest
income from our time deposits, (iii) gain on disposal of property, plant and equipment, (iv)
exchange gains/(losses), and (v) others.
FINANCIAL INFORMATION
– 221 –


--- page 232 ---
Our government grants primarily consist of (i) asset-related grants and (ii) income-related
grants. Asset-related grants refer to grants obtained by us for the purpose of purchasing,
constructing, or otherwise forming long-term assets. The specific criterion for classifying a grant
as asset-related is that it is used for the acquisition or formation of long-term assets. In 2022, 2023
and 2024 and for the nine months ended September 30, 2024 and 2025, our asset-related grants
amounted to RMB7.3 million, RMB16.9 million, RMB23.9 million, RMB17.7 million and
RMB24.1 million, respectively, which was then invested in our assets to support our business
operation. Income-related grants are typically designed to compensate for expenses or losses, with
the aim of encouraging research and development activities, as well as supporting business
operations and growth. In 2022, 2023 and 2024 and for the nine months ended September 30, 2024
and 2025, our income-related grants amounted to RMB6.2 million, RMB30.4 million, RMB88.0
million, RMB78.0 million and RMB78.9 million, respectively, which was then used for various
expenses in our ordinary and usual course of business.
Majority of our government grants are one-off in nature, although the actual grants can be by
allotments. According to our agreements with the relevant government authority, the government
grants were subject to certain conditions such as the Company’s financial performance, capital
investments and local tax contributions. There was no unfulfilled condition to receive government
grants at the end of each period. Our government grants increased by RMB33.8 million from 2022
to 2023, RMB64.5 million from 2023 to 2024, and RMB7.3 million from the nine months ended
September 30, 2024 to the same period in 2025. For the nine months ended September 30, 2025,
our net profit was primarily attributable to the one-off government grants of RMB103.0 million, and
we would have incurred loss for the period without the grants. According to CIC, it is common
industry practice for governments to provide similar grants to other companies in the SiC or SiC
epitaxial wafer industry.
The following table sets forth a breakdown of our other income and other gains, net for the
years/periods indicated.
Y ears Ended December 31, Nine Months Ended September 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(unaudited)
(in thousands, except for percentages)
Other income and
other gains, net
Government grants /H1118/H1118/H111813,508 62.7 47,350 74.6 111,894 66.5 95,719 89.0 103,035 77.6
Bank interest income /H1118/H11183,480 16.2 12,103 19.1 39,950 23.7 26,363 24.5 48,889 36.9
Gain/(loss) on disposal
of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H111826 0.1 3,487 5.5 20 0.0 20 0.0 (5) 0.0
Fair value loss on
derivatives financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118– – – – – – – – (2,140) (1.6)
Exchange gain/(loss) /H1118/H11184,433 20.6 463 0.7 16,482 9.8 (14,570) (13.5) (17,203) (13.0)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887 0.4 48 0.1 56 0.0 51 0.0 45 0.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,534 100.0 63,451 100.0 168,402 100.0 107,583 100.0 132,621 100.0
FINANCIAL INFORMATION
– 222 –


--- page 233 ---
Selling and Distribution Expenses
Our selling and distribution expenses primarily include share-based payments, employee
expenses, travel expenses, sample costs and others. We recognized share-based payment of
RMB46.2 million, RMB1.6 million, RMB4.2 million and RMB2.2 million in 2023 and 2024 and for
the nine months ended September 30, 2024 and 2025, respectively, accounting for 94.8%, 29.8%,
61.7% and 27.3% in 2023 and 2024 and for the nine months ended September 30, 2024 and 2025
of total sales and distribution expenses, respectively. The relatively large amount in 2023 was
primarily due to the amortization of share-based compensation expenses for key sales personnel in
2023. In addition, share-based payment expenses were higher for the nine months ended September
30, 2024 than for the year ended December 31, 2024, as a partial reversal was recorded in the fourth
quarter of 2024 following management’s reassessment of certain sales targets under the incentive
plan. In 2022, 2023 and 2024 and for the nine months ended September 30, 2024 and 2025, our
selling and distribution expenses were RMB1.9 million, RMB48.8 million, RMB5.5 million,
RMB6.8 million and RMB8.2 million, respectively, representing 0.4%, 4.3%, 0.6%, 0.8% and 1.5%
of our revenue, respectively.
The following table sets forth a breakdown of our selling and distribution expenses, in
absolute amounts and as a percentage of total selling and distribution expenses, for the years and
periods indicated.
Y ears Ended December 31, Nine Months Ended September 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(in thousands, except for percentages)
(unaudited)
Selling and distribution
expenses
Share-based payments /H1118 – – 46,219 94.8 1,642 29.8 4,174 61.7 2,248 27.3
Employee expenses /H1118/H1118/H11181,614 86.5 1,778 3.6 2,174 39.4 1,477 21.8 2,157 26.2
Travel expenses /H1118/H1118/H1118/H1118/H111854 2.9 328 0.7 505 9.2 249 3.7 721 8.8
Sample costs /H1118/H1118/H1118/H1118/H1118/H111891 4.9 346 0.7 735 13.3 693 10.2 2,646 32.2
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107 5.7 105 0.2 457 8.3 177 2.6 452 5.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,866 100.0 48,776 100.0 5,513 100.0 6,770 100.0 8,224 100.0
Note:
(1) Others mainly include promotional expenses and hospitality expenses.
Administrative and Other Expenses
Our administrative and other expenses primarily include share-based payments, employee
costs, depreciation and amortization, consulting fees and others. In 2022, 2023 and 2024 and for the
nine months ended September 30, 2024 and 2025, we recognized share-based payments of
RMB28.6 million, RMB124.3 million, RMB141.4 million, RMB121.7 million and RMB111.4
million, respectively, accounting for 59.4%, 76.3%, 80.6%, 82.7% and 71.8% of total administrative
and other expenses, respectively. The increase subsequent to 2023 was primarily due to the
amortization of share-based compensation expenses for key management personnel. In 2022, 2023
and 2024 and for the nine months ended September 30, 2024 and 2025, our administrative and other
expenses were RMB48.1 million, RMB162.7 million, RMB175.6 million, RMB147.1 million and
RMB155.1 million, respectively, representing 10.9%, 14.2%, 18.0%, 18.2% and 29.0% of our
revenue, respectively.
FINANCIAL INFORMATION
– 223 –


--- page 234 ---
The following table sets forth a breakdown of administrative and other expenses, in absolute
amounts and as a percentage of total administrative and other expenses, for the years and periods
indicated.
Y ears Ended December 31, Nine Months Ended September 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(in thousands, except for percentages)
(unaudited)
Administrative and
other expenses
Share-based payments /H1118/H111828,575 59.4 124,253 76.3 141,400 80.6 121,651 82.7 111,437 71.8
Employee costs /H1118/H1118/H1118/H1118/H111810,756 22.3 15,562 9.6 16,730 9.5 11,893 8.1 11,424 7.4
Depreciation and
amortization /H1118/H1118/H1118/H1118/H1118/H11181,892 3.9 3,683 2.3 4,301 2.4 3,202 2.2 6,678 4.3
Consulting fees /H1118/H1118/H1118/H1118/H11182,337 4.9 9,531 5.9 6,613 3.8 5,649 3.8 20,357 13.1
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,576 9.5 9,720 5.9 6,531 3.7 4,747 3.2 5,230 3.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,136 100.0 162,749 100.0 175,575 100.0 147,142 100.0 155,126 100.0
Note:
(1) Others mainly consist of office expenses.
Research and Development Expenses
Our research and development expenses primarily included research material costs consist of
substrates and gases, employee expenses, depreciation and amortization, share-based payments and
others. In 2023, 2024 and for the nine months ended September 30, 2024 and 2025, we recognized
share-based payments of RMB27.9 million, RMB7.7 million, RMB8.5 million and RMB6.7 million,
respectively, accounting for 27.4%, 9.6%, 13.7% and 13.3% of total research and development
expenses in same periods, primarily due to the amortization of share-based compensation expenses
for key R&D personnel in 2023. In addition, share-based payment expenses were higher for the nine
months ended September 30, 2024 than for the year ended December 31, 2024, as a partial reversal
was recorded in the fourth quarter of 2024 following management’s reassessment of certain sales
targets under the incentive plan. In 2022, 2023 and 2024 and for the nine months ended September
30, 2024 and 2025, our research and development expenses were RMB43.8 million, RMB101.8
million, RMB80.0 million, RMB62.1 million and RMB50.4 million, respectively, representing
9.9%, 8.9%, 8.2%, 7.7% and 9.4% of our revenue, respectively.
The following table sets forth a breakdown of research and development expenses, in absolute
amounts and as a percentage of total research and development expenses, for the years and periods
indicated.
Y ears Ended December 31, Nine Months Ended September 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(in thousands, except for percentages)
(unaudited)
R&D expenses
Research material costs 26,301 60.0 39,039 38.0 33,600 42.0 26,348 42.4 17,748 35.2
Share-based payments /H1118/H1118 – – 27,925 27.4 7,685 9.6 8,493 13.7 6,711 13.3
Employee expenses /H1118/H1118/H11188,127 18.5 14,191 13.9 15,627 19.5 10,880 17.5 11,442 22.7
FINANCIAL INFORMATION
– 224 –


--- page 235 ---
Y ears Ended December 31, Nine Months Ended September 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(in thousands, except for percentages)
(unaudited)
Depreciation and
amortization /H1118/H1118/H1118/H1118/H11186,498 14.9 14,188 13.9 15,795 19.8 11,254 18.1 9,856 19.6
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,903 6.6 6,443 6.3 7,285 9.1 5,121 8.2 4,617 9.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,829 100.0 101,786 100.0 79,992 100.0 62,096 100.0 50,374 100.0
Note:
(1) Others mainly include testing expense from R&D activities.
Finance Costs
Finance costs primarily included interest on bank borrowings, interest on lease liabilities and
others. The following table sets forth a breakdown of finance costs, for the years and periods
indicated.
Y ears Ended December 31,
Nine Months Ended
September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Interest on bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,600 18,168 30,135 21,410 9,919
Interest on lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 1 8221
Interests associated with
the redemption
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,825 14,387 1,334 1,000 344
20,434 32,573 31,471 22,412 10,264
Less: Finance costs
capitalized /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(153) (38) (1,274) (817) (628)
20,281 32,535 30,197 21,595 9,636
Income Tax Credits/(Expenses)
We recorded income tax credits of RMB24.1 million in 2022, income tax expenses of
RMB55.6 million, RMB43.1 million, RMB37.1 million and RMB23.1 million in 2023 and 2024 and
for the nine months ended September 30, 2024 and 2025. In 2022, we achieved profitability and
anticipated that future taxable income could be utilized to offset prior losses. As a result, deferred
tax assets related to prior years’ losses were recognized through an one-time adjustment, leading to
negative income tax expenses for the year/period. The increase in income tax expenses in 2023 was
primarily driven by a substantial growth in adjusted net profit (Non-IFRS measure). Conversely, the
decrease in income tax expenses in 2024 and for the nine months ended September 30, 2025 was
attributed to a decline in adjusted net profit (Non-IFRS measure).
FINANCIAL INFORMATION
– 225 –


--- page 236 ---
Government Grants
During the Track Record Period, besides profits from operations, we had government grants
of RMB13.5 million, RMB47.4 million, RMB111.9 million, RMB95.7 million and RMB103.0
million in 2022, 2023 and 2024 and for the nine months ended September 30, 2024 and 2025,
respectively, which were a major and increasing contributor to our profit for the year/period during
the Track Record Period.
Profit for the Y ear/Period
We recorded profit of RMB127.5 million, RMB107.5 million, RMB165.1 million, RMB118.4
million and RMB21.1 million in 2022, 2023 and 2024 and for the nine months ended September 30,
2024 and 2025, respectively.
TAXATION
PRC
According to the Enterprise Income Tax Law of the People’s Republic of China (“EIT Law”),
companies established in China are generally subject to an enterprise income tax rate of 25%, unless
otherwise specified. Under the EIT Law, our subsidiary is subject to a tax rate of 25%. In
accordance with the EIT Law and relevant regulations, enterprises that qualify as “High and New
Technology Enterprises” are eligible for a preferential enterprise income tax rate of 15% along with
other related tax benefits. We obtained the High and New Technology Enterprise Certificate in both
2020 and 2023, each valid for three years. Therefore, during the Track Record Period, it calculated
and paid enterprise income tax at the preferential rate of 15% and enjoyed other related tax
incentives. Preferential tax treatments and incentives granted to us by PRC regulatory authorities
are subject to review and may be adjusted or revoked at any time in the future.
Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise
established outside of the PRC with a “de facto management body” within the PRC is considered
a resident enterprise and will be subject to the enterprise income tax on its global income at the rate
of 25%. In April 2009, the SA T, issued a circular, known as Circular 82, which provides certain
specific criteria for determining whether the “de facto management body” of a PRC-controlled
enterprise that is incorporated offshore is located in China. Although this circular only applies to
offshore enterprises controlled by PRC resident enterprises or PRC resident enterprise groups, not
those controlled by PRC resident individuals or foreigners like us, the criteria set forth in the
circular may reflect the SA T’s general position on how the “de facto management body” test should
be applied in determining the tax resident status of all offshore enterprises. According to Circular
82, an offshore incorporated enterprise controlled by a PRC resident enterprise or a PRC resident
enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto
management body” in China and will be subject to PRC enterprise income tax on its global income
only if all of the following conditions are met: (i) the primary location of the day-to-day operational
management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource
matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the
enterprise’s primary assets, accounting books and records, company seals, and board and
shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board
members or senior executives habitually reside in the PRC.
We believe none of our entities outside of China is a PRC resident enterprise for PRC tax
purposes. However, if the PRC tax authorities determine that any of our subsidiaries outside of
China is a PRC resident enterprise for PRC enterprise income tax purposes, then such subsidiary
could be subject to PRC tax at a rate of 25% on our or the subsidiary’s worldwide income. In
addition, such subsidiary will also be subject to PRC enterprise income tax reporting obligations.
FINANCIAL INFORMATION
– 226 –


--- page 237 ---
DISCUSSION OF RESULTS OF OPERATIONS
Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30,
2024
Revenue
Our revenue decreased from RMB808.3 million for the nine months ended September 30,
2024 to RMB535.1 million for the same period in 2025, primarily due to the decrease in our revenue
from Turnkey service.
By type of service, revenue from Turnkey service decreased from RMB679.1 million for the
nine months ended September 30, 2024 to RMB483.4 million for the same period in 2025, primarily
due to our competitive pricing strategies, in response to the general downward pricing trend across
the industry. As the decrease in raw material prices provided more spaces for us to adjust our prices
downward while maintaining profitability, we proactively passed savings to our customers, thereby
strengthening client loyalty and securing market share in a competitive environment. Our sales
volume from Turnkey service increased from 92,006 pieces for the nine months ended September
30, 2024 to 137,763 pieces for the same period in 2025. The revenue generated from Consign
service decreased from RMB118.1 million for the nine months ended September 30, 2024 to
RMB23.2 million for the same period in 2025, primarily due to the decrease in our sales volume
under Consign service as certain of our major customers experienced fluctuations in their business
operations and reduced their procurement volume, combined with our competitive pricing strategy.
Our sales volume from Consign service decreased from 41,017 pieces for the nine months ended
September 30, 2024 to 11,539 pieces for the same period in 2025. As of the Latest Practicable Date,
we have no plans to phase out our Consign service despite the decline in its revenue and sales
volume. As the production process of epitaxial wafers under the two service types are mainly the
same, we plan to continue to offer Turnkey and/or Consign services according to our customers’
demand.
By region, revenue from Asia decreased from RMB544.0 million for the nine months ended
September 30, 2024 to RMB456.0 million for the same period in 2025, primarily due to the
continued downward price trend. The revenue from Europe decreased from RMB235.0 million for
the nine months ended September 30, 2024 to RMB64.2 million for the same period in 2025,
primarily due to the decreased demand caused by lower production of some clients.
Cost of Sales
Our cost of sales decreased from RMB522.5 million for the nine months ended September 30,
2024 to RMB398.0 million for the same period in 2025, primarily due to the decrease in the costs
of our raw materials of RMB113.1 million, reflecting the decreases in the price of our key raw
materials and sales volume. Additionally, our labor cost decreased by RMB15.2 million, primarily
due to the decrease in our personnel as we strengthened our automation capabilities. Decline in cost
of sales was partially offset by the increase in depreciation of RMB3.0 million, primarily due to the
completion of our certain construction projects, which started to record depreciation.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit decreased by RMB148.6 million, or 52.0%, from
RMB285.7 million for the nine months ended September 30, 2024 to RMB137.1 million for the
same period in 2025. Our gross profit margin decreased from 35.3% for the nine months ended
September 30, 2024 to 25.6% for the same period in 2025, primarily due to changes in offering mix,
reflecting the decreased proportion of sales under our Consign service (which has higher margin)
combined with the increased proportion of our other revenue, which was mainly generated from the
sales of our stored inventories.
FINANCIAL INFORMATION
– 227 –


--- page 238 ---
Other Income and Other Gains, Net
Our other income and other gains, net, significantly increased from RMB107.6 million for the
nine months ended September 30, 2024 to RMB132.6 million for the same period in 2025, primarily
due to the increase of (i) government grants of RMB7.3 million based on incentive policies to
support our business growth and R&D activities; and (ii) bank interest income of RMB22.5 million
as a result of our increased bank deposits from our financing activities and operational cash inflow.
Our increases in other income and other gains were partially offset by the increase of foreign
exchange loss of RMB2.6 million due to the decrease in the USD/RMB exchange rate.
Selling and Distribution Expenses
Our selling and distribution expenses increased by RMB1.4 million, or 21.5%, from RMB6.8
million for the nine months ended September 30, 2024 to RMB8.2 million for the same period in
2025, primarily attributable to the increase in sample costs as a result of our active marketing and
business development activities, as well as the increase in employee expenses due to the increased
selling and distribution personnel.
Administrative and Other Expenses
Our administrative and other expenses increased by RMB8.0 million, or 5.4%, from
RMB147.1 million for the nine months ended September 30, 2024 to RMB155.1 million for the
same period in 2025, primarily due to the listing expenses we incurred in early 2025, partially offset
by the decrease in our share-based payments as a result of the write-off of share-based payments
in accordance with conditions of our share-based compensation plan.
Research and Development Expenses
Our research and development expenses decreased by RMB11.7 million, or 18.9%, from
RMB62.1 million for the nine months ended September 30, 2024 to RMB50.4 million for the same
period in 2025, primarily due to the decrease in material costs resulted from price reduction of
materials we use.
(Impairment Loss)/Reversal of Impairment Loss on Financial Assets, Net
Our net impairment loss on financial assets significantly increased by RMB1.9 million from
RMB0.2 million for the nine months ended September 30, 2024 to RMB2.1 million for the nine
months ended September 30, 2025, primarily due to the increase in impairment loss on trade and
bills receivables as a result of a higher balance of our trade and bills receivables as of September
30, 2025.
Finance Costs
Our finance costs decreased by RMB12.0 million, or 55.4%, from RMB21.6 million for the
nine months ended September 30, 2024 to RMB9.6 million for the same period in 2025, primarily
due to our repayment of borrowings from our equity financing activities and operational cash
inflow.
Income Tax Expense
Our income tax expense decreased from RMB37.1 million for the nine months ended
September 30, 2024 to RMB23.1 million for the nine months ended September 30, 2025, primarily
due to the decrease in our adjusted net profit (Non-IFRS measure) for the same periods.
FINANCIAL INFORMATION
– 228 –


--- page 239 ---
Profit for the Period
As a result of the foregoing, the recorded profit of the period decreased from RMB118.4
million for the nine months ended September 30, 2024 to RMB21.1 million for the same period in
2025.
Y ear Ended December 31, 2024 Compared with Y ear Ended December 31, 2023
Revenue
Our revenue decreased by RMB168.2 million, or 14.7%, from RMB1,142.5 million in 2023
to RMB974.3 million in 2024, primarily due to the revenue from our Consign service decreased.
By type of service, revenue from Turnkey service slightly decreased from RMB847.7 million
in 2023 to RMB839.6 million in 2024, primarily due to we offered competitive price as the price
of key raw materials, including substrates, decreased, and the impact on our revenue due to such
decreases in selling price was partially offset by our increased sales volume from Turnkey service,
which increased from 96,428 pieces in 2023 to 122,283 pieces in 2024. The revenue generated from
Consign service decreased from RMB292.8 million in 2023 to RMB121.1 million in 2024, primarily
due to the decrease in our sales volume under Consign model and our competitive pricing strategy.
The sales volume under Consign service decreased from 104,175 wafers in 2023 to 42,150 wafers
in 2024, primarily due to reduced demand from certain customers under the Consign service,
primarily due to a large inventory backlog carried over from the previous year.
By region, revenue from Asia decreased from RMB745.2 million in 2023 to RMB672.4
million in 2024, primarily due to lowered sales price, which was partially offset by increased sale
volume from Turnkey service. The revenue from Europe decreased from RMB323.3 million in 2023
to RMB268.9 million in 2024, primarily due to decreased sales volume in 2024.
Cost of Sales
Our cost of sales decreased by RMB55.1 million, or 7.9%, from RMB697.1 million in 2023
to RMB642 million in 2024, primarily due to the share-based payment for our employees
categorized as the cost of sales decreased by RMB54.3 million, from RMB57.8 million in 2023 to
RMB3.5 million in 2024. Additionally, the decrease in substrate prices led to a reduction in raw
material costs, while an increase in depreciation expenses contributed to higher costs.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit decreased by RMB113.1 million, or 25.4%, from
RMB445.4 million in 2023 to RMB332.3 million in 2024. Our gross profit margin decreased from
39.0% in 2023 to 34.1% in 2024, primarily due to the increased proportion of sales under our
Turnkey service, which had a lower gross margin compared to the Consign service. This was
because substrate costs were included in the Turnkey service, and substrate costs accounted for a
relatively higher proportion of total costs, resulting in a lower gross margin for this type of service.
FINANCIAL INFORMATION
– 229 –


--- page 240 ---
Other Income and Other Gains, Net
Our other income and other gains, net, significantly increased from RMB63.5 million in 2023
to RMB168.4 million in 2024, primarily due to the increase of (i) government grants of RMB64.5
million based on incentive policies to support our business and R&D activities; (ii) bank interest
income of RMB27.8 million resulted from the increase of our short-term deposits with preferred
interest rates; and (iii) net exchange gain of RMB16.0 million resulted from exchange rate
fluctuations.
Selling and Distribution Expenses
Our selling and distribution expenses decreased by RMB43.3 million, or 88.7%, from
RMB48.8 million in 2023 to RMB5.5 million in 2024, primarily due to the decrease in share-based
payments for our employees, and increased employee costs associated with marketing activities.
Administrative and Other Expenses
Our administrative and other expenses increased by RMB12.9 million, or 7.9%, from
RMB162.7 million in 2023 to RMB175.6 million in 2024, primarily due to the increase in
share-based payments for our employees, partially offset by decreased consulting fees.
Research and Development Expenses
Our research and development expenses decreased by RMB21.8 million, or 21.4%, from
RMB101.8 million in 2023 to RMB80 million in 2024, primarily due to the decrease in share-based
payments for our employees, and decreased research material costs.
(Impairment Loss)/Reversal of Impairment Loss on Financial Assets, Net
We record impairment loss on financial assets, net, of RMB1.3 million in 2024, compared to
reversal of impairment loss on financial assets, net, of RMB0.1 million in 2023, primarily due to
the reversal of the provision for impairment of receivables and bills receivable of RMB0.1 million
in 2023 and the provision for receivables and bills receivable of RMB1.2 million in 2024.
Finance Costs
Our finance costs decreased by RMB2.3 million, or 7.2%, from RMB32.5 million in 2023 to
RMB30.2 million in 2024, primarily due to the decrease of our interests associated with the
redemption liabilities as the termination of redemption rights.
Income Tax Expense
We record income tax expense of RMB43.1 million in 2024, compared to income tax expense
of RMB55.6 million in 2023, primarily due to the decreased in adjusted net profit (Non-IFRS
measure) for the year.
Profit for the Y ear
As a result of the foregoing, the recorded profit of the year increased by RMB57.6 million,
or 53.5%, from RMB107.5 million in 2023 to RMB165.1 million in 2024.
FINANCIAL INFORMATION
– 230 –


--- page 241 ---
Y ear Ended December 31, 2023 Compared with Y ear Ended December 31, 2022
Revenue
Our revenue increased by RMB701.8 million, or 159.3%, from RMB440.7 million in 2022 to
RMB1,142.5 million in 2023, primarily driven by the growing demand for SiC power devices,
fueled by the global rise in EV , ultrafast charging facilities, and other downstream applications.
Additionally, the realization of our expanded production capacity contributed to an increase in our
sales volume.
Our revenue from Turnkey service increased from RMB277.8 million in 2022 to RMB847.7
million in 2023, primarily due to an increase in sales volume for Turnkey service from 31,339
wafers in 2022 to 96,428 wafers in 2023. The revenue generated from sales from Consign service
increased from RMB156.6 million in 2022 to RMB292.8 million in 2023, primarily due to an
increase in sales volume for Consign service from 54,027 wafers in 2022 to 104,175 wafers in 2023.
Our revenue from Asia increased from RMB275.5 million in 2022 to RMB745.2 million in
2023, and revenue from Europe increased from RMB149.3 million in 2022 to RMB323.3 million
in 2023, primarily driven by the growth of SiC power device demands across the regions.
Cost of Sales
Our cost of sales significantly increased from RMB243.8 million in 2022 to RMB697.1
million in 2023, primarily due to (i) the share-based payments we made to our employees in 2023;
and (ii) the increase in our costs of raw materials, which was driven by the growth of our sales
volume due to higher customer demand, which is partially offset by decrease in the price of our raw
materials. Due to diversification of raw material sources, the expansion of supplier production
capacity, and improvements in production yield, the prices of our raw materials, such as substrates
and graphite components have decreased in 2023.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit increased by RMB248.5 million from RMB196.9
million in 2022 to RMB445.4 million in 2023. Our gross profit margin decreased from 44.7% in
2022 to 39.0% in 2023, primarily due to the increase in share-based payments for our employees
in 2023.
Other Income and Other Gains, Net
Our other income and other gains, net, significantly increased by RMB42.0 million from
RMB21.5 million in 2022 to RMB63.5 million in 2023, primarily due to increase of (i) government
grants of RMB33.8 million based on incentive policies for business and R&D activities; and (ii)
bank interest income of RMB8.6 million resulted from increases of our short-term deposits and
applicable interest rates.
Selling and Distribution Expenses
Our selling and distribution expenses significantly increased by RMB46.9 million from
RMB1.9 million in 2022 to RMB48.8 million in 2023, primarily attributable to the increase in
share-based payments for employees, and increased employee costs driven by rapid business
expansion and sales growth.
Administrative and Other Expenses
Our administrative and other expenses significantly increased by RMB114.7 million from
RMB48.1 million in 2022 to RMB162.8 million in 2023, primarily attributable to the increase in
share-based payments for employees, and increased employee costs associated with business
expansion.
FINANCIAL INFORMATION
– 231 –


--- page 242 ---
Research and Development Expenses
Our research and development expenses significantly increased by RMB58.0 million from
RMB43.8 million in 2022 to RMB101.8 million in 2023, primarily due to the increase in the
share-based payments for employees, and increased research material costs reflecting our additional
efforts in R&D.
(Impairment Loss)/Reversal of Impairment Loss on Financial Assets, Net
We record reversal of impairment loss on financial assets, net, of RMB0.1 million in 2023,
compared to impairment loss on financial assets, net, of RMB0.9 million in 2022, primarily due to
our impairment loss on trade and bills receivables of RMB0.9 million in 2022 turned into reversal
of impairment loss on trade and bills receivables of RMB0.1 million in 2023.
Finance Costs
Our finance costs increased from RMB20.3 million in 2022 to RMB32.5 million in 2023,
primarily due to the increase of interest on bank borrowings of RMB13.6 million resulted from
larger bank borrowing base.
Income Tax Credits/(Expenses)
We record income tax expenses of RMB55.6 million in 2023, compared to income tax credits
of RMB24.1 million in 2022, primarily due to deferred tax expenses caused by share-based
payments and the increased adjusted net profit (Non-IFRS measure).
Profit for the Y ear
As a result of the foregoing, the recorded profit of the year decreased by RMB20.0 million,
or 15.7%, from RMB127.5 million in 2022 to RMB107.5 million in 2023.
DISCUSSION OF SELECTED ITEMS FROM THE CONSOLIDATED BALANCE SHEETS
The table below sets forth selected information from our consolidated balance sheets as of the
dates indicated, which has been extracted from the Accountant’s Report included in Appendix I to
this Prospectus:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118956,390 2,043,223 2,054,279 1,958,168
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118497,208 1,030,375 2,448,665 2,408,456
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,453,598 3,073,598 4,502,944 4,366,624
Non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118271,013 1,048,943 1,084,318 1,020,199
Current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118599,083 560,488 605,142 368,961
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118870,096 1,609,431 1,689,460 1,389,160
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118583,502 1,464,167 2,813,484 2,977,464
For accounting treatment and details of Pre-IPO Investments, see Note 32 to the Accountants’
Report.
FINANCIAL INFORMATION
– 232 –


--- page 243 ---
Current Assets and Current Liabilities
The following table sets forth our current assets and current liabilities as of the dates
indicated:
As of December 31,
As of
September 30,
As of
January 31,
2022 2023 2024 2025 2026
(RMB in thousands)
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,404 351,086 247,640 270,945 306,378
Trade and bills receivables /H1118/H1118/H1118/H1118106,796 78,666 129,645 268,964 383,550
Prepayments, deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,527 7,992 7,468 21,169 40,456
V alue-added tax (V A T)
recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,564 22,488 33,259 14,591 1,918
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118500 20,622 – – 608,920
Cash and cash equivalents /H1118/H1118/H1118/H1118274,417 549,521 2,030,653 1,832,787 1,211,486
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118497,208 1,030,375 2,448,665 2,408,456 2,552,709
Trade and bills payables /H1118/H1118/H1118/H1118/H111854,863 32,912 71,883 154,964 213,138
Other payables and accruals /H1118/H1118/H1118182,077 191,731 145,089 109,489 141,954
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,757 3,730 6,795 736 378
Derivative financial instruments – – – 2,140 3,303
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344 261 67 66 67
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118142,405 315,181 303,536 65,025 6,401
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118213,637 16,673 18,007 – –
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 59,765 36,541 36,571
Total current liabilities /H1118/H1118/H1118/H1118/H1118599,083 560,488 605,142 368,961 401,811
Net current (liabilities)/assets /H1118 (101,875) 469,887 1,843,523 2,039,495 2,150,898
Our net current assets increased from RMB2,039.5 million as of September 30, 2025 to
RMB2,086.8 million as of January 31, 2026, primarily due to (i) an increase of trade and bills
receivables of RMB114.6 million, (ii) an increase in inventories of RMB35.4 million, and (iii) an
decrease in current borrowings of RMB58.6 million; partially offset by (i) an increase in trade and
bills payables of RMB58.2 million, and (ii) an increase of other payables and accruals of RMB32.5
million.
Our net current assets increased from RMB1,843.5 million as of December 31, 2024 to
RMB2,039.5 million as of September 30, 2025, primarily due to (i) a decrease of borrowings of
RMB238.5 million, (ii) an increase of trade and bills receivables of RMB139.3 million, (iii) a
decrease of other payables and accruals of RMB35.6 million, (iv) an increase of inventories of
RMB23.3 million, and (v) a decrease of income tax payable of RMB23.2 million; partially offset
by (i) a decrease of cash and cash equivalents of RMB197.9 million, and (ii) an increase of trade
and bills payables of RMB83.1 million.
Our net current assets increased from RMB469.9 million as of December 31, 2023 to
RMB1,843.5 million as of December 31, 2024, primarily due to (i) an increase of cash and cash
equivalents of RMB1,481.2 million in relation to share issuance of RMB1,030.0 million from
certain shareholders, (ii) an increase of trade and bills receivables of RMB51.0 million, (iii) a
decrease of borrowings of RMB11.6 million, and (iv) an increase of V A T recoverable of RMB10.8
million, partially offset by (i) a decrease of inventories of RMB103.4 million, (ii) an increase of tax
payable of RMB59.8 million, and (iii) a decrease of time deposits of RMB20.6 million.
FINANCIAL INFORMATION
– 233 –


--- page 244 ---
Our net current liabilities of RMB101.9 million as of December 31, 2022 changed into net
current assets of RMB469.9 million as of December 31, 2023, primarily due to (i) a decrease of
redemption liabilities of RMB197.0 million, (ii) an increase of cash and cash equivalents of
RMB275.1 million, and (iii) an increase of inventories of RMB259.7 million, partially offset by (i)
an increase of borrowings of RMB172.8 million, (ii) a decrease of trade and bills payables of
RMB22.0 million, and (iii) a decrease of trade and bills receivables of RMB28.1 million.
Assets
Property, Plant and Equipment
Our property, plant and equipment primarily consist of machinery, buildings, leasehold land,
computer equipment, furniture, fixtures and office equipment, motor vehicle and construction-in-
progress. The following table sets forth the breakdown of our property, plant and equipment in net
value as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Property, plant and
equipment
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118397,314 1,082,265 1,143,075 1,340,422
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118139,267 308,772 290,226 427,275
Leasehold land /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,641 36,853 36,065 35,474
Computer equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,040 6,003 5,614 5,818
Furniture, fixtures and office
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,864 11,761 9,865 8,008
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 302 235 185
Construction-in-progress /H1118/H1118/H1118/H1118/H1118289,692 591,275 562,486 125,828
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118873,818 2,037,231 2,047,566 1,943,010
Our property, plant and equipment increased from RMB873.8 million as of December 31,
2022 to RMB2,037.2 million as of December 31, 2023, primarily due to the expansion of our
production capacity, in resulting of (i) the increase of our machinery of RMB685.0 million, (ii) the
increase of our constructions-in-progress of RMB301.6 million, and (iii) the increase of our
buildings of RMB169.5 million. Our property, plant and equipment further increased to
RMB2,047.6 million as of December 31, 2024, primarily due to the increase of our machinery of
RMB60.8 million and was partially offset by the decrease of our constructions-in-progress of
RMB28.8 million. Our property, plant and equipment subsequently decreased to RMB1,943.0
million as of September 30, 2025, primarily due to the decrease of our constructions-in-progress
resulted from the completion of our certain construction projects and turned into buildings and
machinery, partially offset by the corresponding increase in depreciation.
FINANCIAL INFORMATION
– 234 –


--- page 245 ---
Inventories
Our inventories comprise of raw materials, finished goods and work in progress. Our raw
materials mainly include substrates and other accessory materials, graphite components and gases.
The following table sets forth the carrying amount of our inventories as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Inventories
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,601 258,868 196,416 202,902
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,932 96,517 46,255 61,342
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,449 831 11,169 15,261
Write-down of inventories to
net realizable value /H1118/H1118/H1118/H1118/H1118/H1118/H1118(578) (5,130) (6,200) (8,560)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,404 351,086 247,640 270,945
Our inventories increased from RMB91.4 million as of December 31, 2022 to RMB351.1
million as of December 31, 2023, primarily due to the increase of raw materials of RMB197.3
million reflecting our strategic stock of raw materials as of December 31, 2023 to prepare ourselves
for sales growth, and the increase of finished goods of RMB72.6 million. Our inventories decreased
from RMB351.1 million as of December 31, 2023 to RMB247.6 million as of December 31, 2024,
primarily due to the decrease of raw materials of RMB62.5 million and the decrease of finished
goods of RMB50.3 million. Our inventories increased from RMB247.6 million as of December 31,
2024 to RMB270.9 million as of September 30, 2025, primarily due to the increase of finished
goods of RMB15.1 million.
The following table sets forth the aging analysis of our inventory after deduction of provision
as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Inventories
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884,821 333,023 103,453 175,529
1-2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,164 14,386 134,649 44,454
2-3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118265 2,634 8,240 46,102
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,154 1,043 1,298 4,860
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,404 351,086 247,640 270,945
FINANCIAL INFORMATION
– 235 –


--- page 246 ---
Our raw materials include substrates and equipment accessories. Among them, equipment
accessories are primarily used for non-routine consumption, being utilized only for maintenance
and replacement when equipment so required. As a result, these items may have a longer aging
period and are not subject to warranty or usage period limitations. The following table sets forth the
aging analysis of our raw materials in gross value as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Raw materials
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,517 243,015 55,436 113,403
1-2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,508 13,677 132,468 40,173
2-3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 2,087 7,830 45,499
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118565 89 682 3,828
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,601 258,868 196,416 202,902
The following table sets forth the aging analysis of our finished goods in gross value as of the
dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Finished goods
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,887 93,149 40,708 51,947
4-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 92 470 683
6-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,887 92,874 37,460 46,189
8-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 185 2,778 5,075
1-2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,679 1,699 2,809 6,050
4-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118560 10 69 395
6-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,120 1,688 2,741 5,048
8-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 6 0 7
2-3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118267 579 1,594 1,340
4-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118267 493 – 78
6-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 86 1,594 1,262
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,099 1,090 1,144 2,005
4-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,099 1,090 1,108 604
6-inch /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 35 1,401
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,932 96,517 46,255 61,342
During the Track Record Period, the relatively low proportion of inventory over one to two
years in 2022 and 2023 was mainly due to the increased sales volume from both of our Turnkey and
Consign services in 2022 and 2023. In 2024, the inventory aged over one to two years increased
significantly, primarily due to we purchased a batch of 6-inch substrates to prepare ourselves for
rapid demand growth. For the nine months ended September 30, 2025, the inventory aged over one
years to two years significantly decreased, primarily due to our disposal of previously stored raw
materials to maintain a healthy inventory level.
As of September 30, 2025, the inventories that aged over three years amounted to RMB4.9
million, representing 1.8% of total inventories, which is insignificant.
FINANCIAL INFORMATION
– 236 –


--- page 247 ---
We believe we have a comprehensive and adequate system in place for identifying and
accounting for inventory risks and impairment provisions. We regularly review our inventories to
identify items with low sales or usage value and make impairment provisions accordingly. We
further assess inventories based on the lower of cost or net realizable value to make any additional
impairment provisions.
We plan to further enhance the refined management of inventory to mitigate the downward
price pressure, including raw materials and finished goods. We plan to designate specialized
personnel to closely monitor the level of inventory and make order-oriented procurement plan
accordingly to avoid excessive storage and enhance the utilization efficiency. We also plan to
enhance the management of supply chain to ensure timely and qualified raw material supply. We
comprehensively considers various factors, including, among others, the complexity and structure
of the products, the purchase volume and the raw material used, to determine the prices so as to
balance profitability and competitiveness.
Specifically, we manage inventory through a dual focus on raw materials and finished goods.
In raw material management: (i) inventory levels serve as a key procurement benchmark,
maintaining sufficient stock while collaborating with qualified suppliers to ensure supply
reliability; (ii) the production management control team analyze and set production schedules based
on sales orders, considering material requirements, supplier lead times, and current inventory to
formulate precise purchasing plans approved by production departments; (iii) make strategical
reserves for critical materials to mitigate supply risks through combined annual contracts and spot
orders, enabling flexible resource allocation. With respect to finished goods management, we have:
(i) a “production-to-order” model, which aligns manufacturing and procurement with customer
demand; (ii) a sophisticated warehousing system implements strict zoning for quality-controlled
storage segregation, supported by real-time digital tracking; (iii) dedicated inventory monitoring
system, which includes age-based classification and differentiated disposition strategies to maintain
industry-appropriate turnover rates; and (iv) cross-functional teams to accelerate substandard
product resolution through technical improvements, discounted sales, and rework processes, with
specialized tracking mechanisms.
We provided provision against inventories by estimating the net realizable value based on the
estimated selling price of such inventories in the ordinary course of business. The work in progress
are primarily associated with products that have relatively lengthy production processes and cycles,
indicating a potential for conversion. Among raw materials, spare parts are mainly used for the
maintenance and upgrading of production equipment and are deemed durable consumables and also
exhibit a longer conversion period and conversion potential. There are no recoverability issues for
inventories aged over one year and we have made sufficient provision taking into account of our
inventory utilization.
The following table sets forth the turnover days of our inventory for the periods indicated:
Y ear Ended December 31,
Nine Months
Ended
September 30,
2022 2023 2024 2025
Inventory turnover days (1) /H1118/H1118/H1118/H1118106.7 115.8 170.2 178.4
Note:
(1) Inventory turnover days for a year/period equals the average of the gross value of the opening and closing
inventories balance divided by cost of sales for the relevant period and multiplied by the number of days in
the relevant year/period (i.e. 365 days for a fiscal year and 273 days for nine months ended September 30).
FINANCIAL INFORMATION
– 237 –


--- page 248 ---
Our turnover days increased from 106.7 days in 2022 to 115.8 days in 2023, and further to
170.2 days in 2024, primarily due to our strategic decision to stockpile raw materials at late 2023
in anticipation of future sales volume and customer demand, and the technical calculation of
inventory turnover days was affected largely by the opening inventories balance. Our inventories
dropped substantially towards the year end of 2024. Our turnover days slightly increased from 170.2
days in 2024 to 178.4 days for the nine months ended September 30, 2025, primarily because our
cost of sales for the nine months ended September 30, 2025 experienced a relatively significant
decline as compared to 2024, in line with the fluctuations in our revenue, and an increase in the
closing balance of our inventories as of September 30, 2025, leading to higher turnover days.
As of January 31, 2026, RMB85.5 million, or approximately 30.6%, of our inventory balance
as of September 30, 2025, had been sold or utilized.
Trade and Bills Receivables
Trade and bills receivables are amounts due for goods sold in the ordinary course of business.
For instance, we granted credit terms to certain customers during the Track Record Period. Such
credit terms typically range from 30 days to 90 days. We seek to maintain strict control over our
outstanding receivables. Our finance department is responsible for minimizing credit risks. Overdue
balances are reviewed regularly by senior management. In view of the aforementioned, there is no
significant concentration of credit risks.
Our trade and bills receivables decreased from RMB106.8 million as of December 31, 2022
to RMB78.7 million as of December 31, 2023, due to adjusted production plan and our enhanced
collection efforts during the year-end period of 2023. Our trade and bills receivables increased from
RMB78.7 million as of December 31, 2023 to RMB129.6 million as of December 31, 2024,
primarily due to the increase of our sale orders in fourth quarter of 2024 compared to the same
period in 2023. Our trade and bills receivables increased from RMB129.6 million as of December
31, 2024 to RMB269.0 million as of September 30, 2025, primarily because our revenue in the third
quarter of 2025 was higher than the fourth quarter of 2024, which accounted for the majority
balance of trade and bills receivables for the respective reporting dates. The following table sets
forth our trade and bills receivables as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Trade and bills receivables
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118106,342 76,868 130,135 273,206
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,801 3,000 1,905 257
Less: impairment loss
allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,347) (1,202) (2,395) (4,499)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118106,796 78,666 129,645 268,964
FINANCIAL INFORMATION
– 238 –


--- page 249 ---
The credit period granted to our customers was generally 30 days to 90 days from the date of
billing. Sales that occurred before year end (December 31 of such year) and were still within such
30 to 90 day credit period on year end (December 31 of such year) will technically be recorded as
receivables on December 31 of such year. The increased balance for trade and bill receivables of
over three months subsequent to 2023 was primarily due to we had increased unpaid sales being
recorded as trade and bill receivables due to certain customer applied for longer settlement
arrangement. The following table sets forth an aging analysis of our trade receivables as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Trade and bills receivables
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,654 77,461 123,752 249,558
3 months to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118949 634 1,151 17,327
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17 4,635 2,079
1-2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,193 148 14 –
2-3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 406 93 –
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118106,796 78,666 129,645 268,964
The following table sets forth the turnover days of our trade and bills receivables for the
years/periods indicated:
Y ear Ended December 31,
Nine Months
Ended
September 30,
2022 2023 2024 2025
Trade and bills receivable
turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861.2 29.6 39.0 102.0
Note:
(1) Trade receivable turnover days for a year/period equals the average of the gross value of the opening and
closing trade and other receivable balance divided by revenue for the relevant period and multiplied by the
number of days in the relevant year/period (i.e. 365 days for a fiscal year and 273 days for nine months ended
September 30).
In 2022, 2023 and 2024 and for the nine months ended September 30, 2025, our trade and bills
receivable turnover days were 61.2 days, 29.6 days, 39.0 days and 102.0 days, respectively. The
increase in trade and bills receivable turnover days for the nine months ended September 30, 2025.
This was primarily because our sales increased during the third quarter, and the settlement process
for these recent orders were not yet completed as of September 30, 2025, leading to a high closing
balance and a consequent increase in turnover days.
As of January 31, 2026, RMB140.7 million, or approximately 51.5% of our trade receivables
as of September 30, 2025 had been settled. As of January 31, 2026, RMB0.3 million, or
approximately 100.0% of our bills receivables as of September 30, 2025 had been settled.
FINANCIAL INFORMATION
– 239 –


--- page 250 ---
Prepayments, Deposits and Other Receivables
Our prepayments, deposits and other receivables comprise of (i) prepayments, (ii) deposits
and other receivables and (iii) consulting fees and offset by reversal of (impairment loss) allowance.
The following table sets forth a breakdown of our prepayments, deposits and other receivables as
of the years/periods indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Prepayments, deposits and
other receivables
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,374 6,287 5,238 4,075
Deposits and other receivables /H1118 1,214 1,131 2,347 10,961
Prepaid listing expenses and
deferred issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 631 – 6,262
Less: Reversal of (impairment
loss) allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(61) (57) (117) (129)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,527 7,992 7,468 21,169
Our prepayments, deposits and other receivables decreased from RMB15.5 million as of
December 31, 2022 to RMB8.0 million as of December 31, 2023, and further to RMB7.5 million
as of December 31, 2024, primarily due to decrease in prepayment based on our adjusted raw
material procurement methods from overseas suppliers. Our prepayments, deposits and other
receivables increased significantly from RMB7.5 million as of December 31, 2024 to RMB21.2
million as of September 30, 2025, primarily due to the increase in our deposits and other receivables
mainly attributable to the increase of interest on quarterly settled deposits and receivable subsidies.
As of January 31, 2026, RMB2.8 million, or approximately 68.3% of our prepayments as of
September 30, 2025 had been settled. As of January 31, 2026, RMB5.6 million, or approximately
51.7% of our deposits and other receivables as of September 30, 2025 had been settled.
V alue-added Tax (VAT) Recoverable
Our value-added tax recoverable primarily representing deductible V A T amount. Our
value-added tax recoverable amounted to RMB8.6 million as of December 31, 2022, RMB22.5
million as of December 31, 2023, RMB33.3 million as of December 31, 2024 and RMB14.6 million
as of September 30, 2025. As of January 31, 2026, RMB14.6 million, or approximately 100.0% of
our value-added tax recoverable as of September 30, 2025 our had been settled.
Liabilities
Trade and Bills Payables
Our trade and bills payables are short-term in nature and hence, the carrying amount of trade
and bills payables are considered to approximate to their fair value. We typically have 30 to 90 days
credit term from our suppliers. Our trade and bills payables increased from RMB32.9 million in
2023 to RMB71.9 million in 2024, due to our purchase of a batch of 6-inch substrates to prepare
ourselves for demand growth. Our trade and bills payables further increased to RMB155.0 million
as of September 30, 2025, primarily due to our purchase of domestic substrates in accordance to our
customers’ demand.
FINANCIAL INFORMATION
– 240 –


--- page 251 ---
The following table sets forth our trade and bills payables as of the years/periods indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Trade and bills payables
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,962 32,912 46,781 147,859
Bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,901 – 25,102 7,105
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,863 32,912 71,883 154,964
The following table sets forth an aging analysis of our trade and bills payables as of the
years/periods indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Trade and bills payables
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,626 32,670 71,538 154,072
1-2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5 104 548
Over 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118237 237 241 344
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,863 32,912 71,883 154,964
The following table sets forth the turnover days of our trade and bill payables for the
years/periods indicated:
Y ear Ended December 31,
Nine Months
Ended
September 30,
2022 2023 2024 2025
Trade and bills payables
turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847.7 23.0 29.8 78.0
Note:
(1) Trade and bill payable turnover days for a period equals the average of the gross value of the opening and
closing trade and bill payable balance divided by revenue for the relevant period and multiplied by the number
of days in the relevant period (i.e. 365 days for a fiscal year and 273 days for nine months ended September
30).
In 2022, 2023 and 2024 and for the nine months ended September 30, 2025, our trade and bills
payables turnover days were 47.7 days, 23.0 days, 29.8 days and 78.0 days, respectively. The
increase of our turnover days for the nine months ended September 30, 2025 was primarily due to
the longer credit terms granted by our suppliers.
As of January 31, 2026, RMB143.1 million, or approximately 96.8% of our trade payables as
of September 30, 2025 had been settled. As of January 31, 2026, RMB7.1 million, or approximately
100.0% of our bills payables as of September 30, 2025 had been settled.
FINANCIAL INFORMATION
– 241 –


--- page 252 ---
Other Payables and Accruals
Our other payables and accruals primarily represent (i) amount due to shareholders arose from
certain shareholders making investments in the Company, with the capital increase being completed
and officially registered in the following year, (ii) construction payables, (iii) other payables, (iv)
other tax payables and (v) accruals, primarily representing the accrued employee compensation. As
of December 31, 2022, 2023 and 2024 and September 30, 2025, all other payables and accruals were
non-interest bearing, unsecured and repayable on demand. The following table sets forth our other
payables and accruals as of the years/periods indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in thousands)
Other payables and accruals
Amount due to shareholders /H1118/H1118100,000 – – –
Construction payables /H1118/H1118/H1118/H1118/H1118/H111872,676 177,155 130,159 92,137
Accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,343 11,264 11,415 6,561
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,289 2,177 2,458 7,759
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118769 1,135 1,057 3,032
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118182,077 191,731 145,089 109,489
Our other payables and accruals increased from RMB182.1 million as of December 31, 2022
to RMB191.7 million as of December 31, 2023, primarily due to an increase in construction
payables of RMB104.5 million in relation to our production site expansions and partially offset by
a decrease in amount due to our certain shareholders of RMB100.0 million. Our other payables and
accruals decreased from RMB191.7 million as of December 31, 2023 to RMB145.1 million as of
December 31, 2024 and further to RMB109.5 million as of September 30, 2025, primarily due to
the decrease in construction payables, which was in line with our expansion progress.
As of January 31, 2026, RMB47.6 million, or approximately 43.5% of our other payables and
accruals as of September 30, 2025 had been settled.
Contract Liabilities
Our contract liabilities primarily represent the advance consideration received from our
customers. Our contract liabilities amounted to RMB5.8 million as of December 31, 2022, RMB3.7
million as of December 31, 2023, RMB6.8 million as of December 31, 2024 and RMB0.7 million
as of September 30, 2025. As of January 31, 2026, RMB0.7 million, or approximately 100.0% of
contract liabilities outstanding as of September 30, 2025 had been subsequently settled.
Derivative Financial Instruments
Our derivative financial instruments represent the fair values of our forward foreign exchange
contracts within one year. We recorded nil, nil, nil and RMB2.1 million as of December 31, 2022,
2023 and 2024 and September 30, 2025, respectively.
Redemption Liabilities
We recorded redemption liabilities of RMB213.6 million, RMB16.7 million, RMB18.0 million
and nil as of December 31, 2022, 2023 and 2024 and September 30, 2025, respectively, in relation
to the redemption rights of our certain Pre-IPO Investors. As of September 30, 2025, all of our
redemption rights had been terminated. For details, see Note 31 of the Accountants’ Report in
Appendix I to this Prospectus.
FINANCIAL INFORMATION
– 242 –


--- page 253 ---
LIQUIDITY AND CAPITAL RESOURCES
The following table presents our consolidated cash flow data for the years/periods indicated.
Y ear Ended December 31,
Nine Months
Ended September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Net cash generated from
operating activities /H1118/H1118/H1118/H1118/H1118/H1118169,985 415,175 640,638 470,931 176,241
Net cash used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(505,270) (1,140,458) (144,332) (144,539) (21,462)
Net cash generated
from/(used in) financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118459,072 1,000,387 984,826 289,564 (352,645)
Net increase/(decrease) in
cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,787 275,104 1,481,132 615,956 (197,866)
Cash and cash equivalents at
beginning of the year /H1118/H1118/H1118/H1118150,630 274,417 549,521 549,521 2,030,653
Cash and cash equivalents
at end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118274,417 549,521 2,030,653 1,165,477 1,832,787
During the Track Record Period and as of the Latest Practicable Date, our principal sources
of liquidity have been cash generated from operating activities and borrowings from banks.
Net Cash Generated from Operating Activities
For the nine months ended September 30, 2025, our net cash generated from operating
activities was RMB176.2 million, which was primarily attributable to our profit before tax of
RMB44.2 million, adjusted by non-cash items, primarily including (i) depreciation of property,
plant and equipment of RMB129.0 million, and (ii) equity-settled share-based payments of
RMB124.5 million; partially offset by interest income of RMB48.9 million. This amount was
further adjusted by changes in working capital, primarily including (i) an increase in trade and bills
payables of RMB83.1 million, and (ii) an increase in deferred revenue of RMB51.3 million;
partially offset by (i) an increase in trade and bills receivables of RMB141.4 million, and (ii) an
increase in inventories of RMB25.7 million.
In 2024, our net cash generated from operating activities was RMB640.6 million, which was
primarily attributable to our profit before tax of RMB208.2 million, adjusted by non-cash items,
primarily including (i) equity-settled share-based payments of RMB154.2 million, (ii) depreciation
of property, plant and equipment of RMB144.7 million, and (iii) finance costs of RMB30.2 million,
partially offset by interest income of RMB40.0 million. This amount was further adjusted by
changes in working capital, primarily including (i) a decrease in inventories of RMB102.4 million,
(ii) an increase in deferred income of RMB55.2 million, and (iii) a decrease in prepayments,
deposits and other receivables of RMB50.0 million; partially offset by (i) an increase in trade and
bill receivables of RMB52.2 million, and (ii) a decrease in other payables and accruals of RMB46.6
million.
FINANCIAL INFORMATION
– 243 –


--- page 254 ---
In 2023, our net cash generated from operating activities was RMB415.2 million, which was
primarily attributable to our profit before tax of RMB163.2 million, adjusted by non-cash items,
primarily including (i) equity-settled share-based payments of RMB256.2 million, (ii) depreciation
of property, plant and equipment of RMB95.9 million, (iii) finance costs of RMB32.5 million;
partially offset by interest income of RMB12.1 million. The amount was further adjusted by
changes in working capital, primarily including (i) an increase in inventories of RMB264.2 million,
(ii) an increase in other payables and accruals of RMB109.7 and (iii) an increase in deferred income
of RMB105.3 million.
In 2022, our net cash generated from operating activities was RMB170.0 million, which was
primarily attributable to our profit before tax of RMB103.5 million, adjusted by non-cash items,
primarily including (i) depreciation of property, plant and equipment of RMB30.6 million, and (ii)
equity-settled share-based payments of RMB28.6 million, partially offset by interest income of
RMB3.5 million. The amount was further adjusted by changes in working capital, primarily
including (i) an increase in trade and bills receivables of RMB66.7 million, (ii) an increase in
prepayments, deposits and other receivables of RMB43.1 million, and (iii) an increase in
inventories of RMB40.2 million.
Net Cash Used in Investing Activities
For the nine months ended September 30, 2025, our net cash used in investing activities was
RMB21.5 million, primarily attributable to purchase of property, plant and equipment of RMB69.8
million; partially offset by interest received of RMB48.9 million.
In 2024, our net cash used in investing activities was RMB144.3 million, primarily
attributable to purchase of property, plant and equipment of RMB204.7 million; partially offset by
(i) interest received of RMB40.0 million; and (ii) withdrawal of term deposits of RMB20.6 million.
In 2023, our net cash used in investing activities was RMB1,140.5 million, primarily
attributable to purchase of property, plant and equipment of RMB1,157.4 million, partially offset
by (i) interest received of RMB12.1 million; and (ii) proceeds from disposal of property, plant and
equipment of RMB6.0 million.
In 2022, our net cash used in investing activities was RMB505.3 million, primarily
attributable to purchase of property, plant and equipment of RMB533.7 million, partially offset by
withdrawal of term deposits of RMB24.6 million.
Net Cash Generated from/(Used in) Financing Activities
For the nine months ended September 30, 2025, our net cash used in financing activities was
RMB352.6 million, primarily attributable to (i) repayments of bank borrowings of RMB403.3
million, and (ii) interest paid of RMB9.9 million; partially offset by proceeds from bank borrowings
of RMB60.7 million.
In 2024, our net cash generated from financing activities was RMB984.8 million, primarily
attributable to (i) proceeds from share issues of RMB1,030.0 million, and (ii) proceeds from bank
borrowings of RMB744.8 million and partially offset by (i) repayments of bank borrowings of
RMB759.7 million, and (ii) interest paid of RMB30.1 million.
In 2023, our net cash generated from financing activities was RMB1,000.4 million, primarily
attributable to (i) proceeds from bank borrowings of RMB1,021.7 million, and (ii) proceeds from
share issues of RMB205.6 million and partially offset by (i) repayments of bank borrowings of
RMB207.9 million, and (ii) interest paid of RMB18.2 million.
FINANCIAL INFORMATION
– 244 –


--- page 255 ---
In 2022, our net cash generated from financing activities was RMB459.1 million, primarily
attributable to (i) proceeds from bank borrowings of RMB295.2 million; (ii) proceeds from share
issues of RMB152.3 million and (iii) proceed from a shareholder of RMB100.0 million and partially
offset by (i) repayments of bank borrowings of RMB83.3 million, and (ii) interest paid of RMB4.6
million.
WORKING CAPITAL
Taking into account the financial resources available to us, including anticipated cash flow
from our operating activities, existing cash and cash equivalents, available bank facilities and the
estimated net proceeds from the Global Offering, our Directors believe that we have sufficient
working capital for our present requirements and for the next 12 months from the date of this
Prospectus.
We intend to finance our future working capital requirements and capital expenditures
primarily from cash expected to be generated from operating activities, bank facilities and funds
raised from financing activities, including the net proceeds we will receive from the Global
Offering.
INDEBTEDNESS
The following table sets forth a breakdown of our financial indebtedness as of the dates
indicated.
Y ear Ended December 31,
As of
September 30,
As of
January 31,
2022 2023 2024 2025 2026
(RMB in thousands)
(unaudited)
Current
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118213,637 16,673 18,007 – –
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118142,405 315,181 303,536 65,025 6,401
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344 261 67 66 67
Non-Current
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170,783 811,811 808,594 704,513 800,095
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118527,169 1,143,926 1,130,204 769,604 806,563
Our borrowings amounted to RMB313.2 million, RMB1,127.0 million, RMB1,112.1 million,
RMB769.5 million, and RMB806.5 million as of December 31, 2022, 2023 and 2024, September 30,
2025, and January 31, 2026, respectively. For the interest rate profile of our interest-bearing bank
borrowings during the Track Record Period, see Note 28 to the Accountant’s Report in Appendix
I to this Prospectus. As of December 31, 2022, 2023 and 2024, September 30, 2025, and January
31, 2026, RMB52.3 million, RMB628.7 million, RMB555.2 million, RMB504.7 million and
RMB528.7 million of our borrowings were secured. We had unsecured borrowings of RMB260.9
million, RMB498.3 million, RMB556.9 million, RMB264.9 million and RMB277.7 million as of
December 31, 2022, 2023 and 2024, September 30, 2025, and January 31, 2026, respectively.
As of January 31, 2026, we had bank facilities of RMB1,017.1 million which remained
unutilized.
Our Directors confirm that as of the Latest Practicable Date, there was no material covenant
and undertakings on any of our outstanding debt, guarantees, pledge of key assets or other
contingent obligations and there was no breach of any covenant during the Track Record Period and
up to the Latest Practicable Date. Our Directors further confirm that we did not experience any
difficulty in obtaining bank loans and other borrowings, default in payment of trade and non-trade
payables, bank loans and other borrowings or breach of covenants during the Track Record Period
and up to the date of this Prospectus.
FINANCIAL INFORMATION
– 245 –


--- page 256 ---
Lease liabilities
Lease liabilities represent the present value of outstanding lease payments under our lease
agreements. Except as discussed above, we had no outstanding indebtedness or any loan capital
issued and outstanding or agreed to be issued, bank overdrafts, loans or similar indebtedness,
liabilities under acceptances (other than normal trade bills), acceptance credits, debentures,
mortgages, charges, finance lease or hire purchase commitments, guarantees or other contingent
liabilities or any covenant in connection therewith as of January 31, 2026 being our indebtedness
statement date. After due and careful consideration, our Directors confirm that there had been no
material change in our indebtedness since January 31, 2026 and up to the Latest Practicable Date.
CAPITAL EXPENDITURES
The following table sets forth our capital expenditures for the years/periods indicated.
Y ear Ended December 31,
Nine Months
Ended September 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Purchase of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118533,701 1,157,361 204,695 191,151 69,806
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118533,701 1,157,361 204,695 191,151 69,806
Our capital expenditures were RMB533.7 million, RMB1,157.4 million, RMB204.7 million
and RMB69.8 million, respectively, in 2022, 2023 and 2024 and for the nine months ended
September 30, 2025, primarily attributable to capital expenditures on payment of property, plant and
equipment. We intend to fund our future capital expenditures with financial resources available to
us, including our existing cash balance, cash generated from our operation activities, our available
banking facilities and proceeds from the Global Offering. We will continue to make capital
expenditures to meet the expected growth of our business. See “Future Plans and Use of Proceeds
— Use of Proceeds.”
CONTRACTUAL OBLIGATIONS
Capital Expenditure Related Commitments
Our capital commitments are related to capital expenditure on construction-in-progress and
office equipment to be incurred but not yet recorded as liabilities. Our capital expenditure
contracted for but not yet incurred as of December 31, 2022, 2023 and 2024 and September 30, 2025
was RMB847.8 million, RMB88.6 million, RMB90.4 million and RMB72.4 million, respectively.
We expect to satisfy our capital commitments using cash from operations, net proceeds to be
received from the Global Offering and bank borrowings available to us.
OFF-BALANCE SHEET ARRANGEMENTS
As of the Latest Practicable Date, we did not have any material off-balance sheet
commitments or arrangements.
CONTINGENT LIABILITIES
As of December 31, 2022, 2023 and 2024 and September 30, 2025, we did not have any
contingent liabilities. Our Directors confirm that there has been no material change in our
contingent liabilities as of the Latest Practicable Date.
FINANCIAL INFORMATION
– 246 –


--- page 257 ---
RELATED PARTY TRANSACTIONS
We enter into transactions with our related parties from time to time. Our Directors are of the
view that each of the related party transactions was conducted in the ordinary course of business
on an arm’s-length basis and with normal commercial terms between the relevant parties. Our
Directors are also of the view that our related party transactions during the Track Record Period
would not distort our track record results or cause our historical results to become non-reflective
of our future performance.
As of December 31, 2022, 2023 and 2024 and September 30, 2025, our outstanding balances
was RMB1.9 million, RMB3.7 million, RMB9.0 million and RMB0.5 million with related parties
of trade nature which mainly include trade and bills receivables.
KEY FINANCIAL RATIOS
The following table sets forth some of our key financial ratios for the dates indicated.
As of and Y ears Ended December 31,
As of and Nine
Months Ended
September 30,
2022 2023 2024 2025
Gross profit margin (1) /H1118/H1118/H1118/H1118/H111844.7% 39.0% 34.1% 25.6%
Current ratio (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.8 1.8 4.0 6.5
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.7 1.2 3.6 5.8
Debt-to-asset ratio (4) /H1118/H1118/H1118/H1118/H1118/H111859.9% 52.4% 37.5% 31.8%
Notes:
(1) Gross profit margin is calculated using gross profit for the year/period divided by revenue for the year/period
and multiplied by 100%.
(2) Current ratio equals current assets divided by current liabilities as of the relevant year/period end.
(3) Quick ratio equals current assets excluding inventories divided by current liabilities as of the relevant
year/period end.
(4) Debt-to-Asset Ratio equals total liabilities divided by total assets multiplied by 100%.
Gross Profit Margin
Our gross profit margin decreased from 44.7% in 2022 to 39.0% in 2023, 34.1% in 2024 and
further to 25.6% for the nine months ended September 30, 2025, primarily due to the changes in the
offering mix and proportion of different categories of our services among each period. See “—
Discussion of Results of Operations” in this section for more details on our gross profit margin.
Current Ratio and Quick Ratio
Our current ratio increased from 0.8 as of December 31, 2022, to 1.8 as of December 31, 2023,
while our quick ratio increased from 0.7 as of December 31, 2022, to 1.2 as of December 31, 2023.
This was primarily due to an increase in inventory of RMB259.7 million, an increase in cash and
cash equivalents of RMB275.1 million at the year end of 2023, a decrease of redemption liabilities
of RMB197.0 million partially offset by an increase in loans due within one year of RMB172.8
million.
FINANCIAL INFORMATION
– 247 –


--- page 258 ---
Our current ratio further increased from 1.8 as of December 31, 2023, to 4.0 as of December
31, 2024, while our quick ratio rose from 1.2 as of December 31, 2023, to 3.6 as of December 31,
2024. This was mainly due to an increase of RMB1,481.1 million in cash and cash equivalents for
the ending balance of 2024 compared to 2023.
Our current ratio further increased from 4.0 as of December 31, 2024 to 6.5 as of September
30, 2025, while our quick ratio increased from 3.6 as of December 31, 2024 to 5.8 as of September
30, 2025. This was primarily due to a decrease of borrowings of RMB342.6 million.
Debt-to-asset Ratio
Our debt-to-asset ratio decreased from 59.9% as of December 31, 2022 to 52.4% as of
December 31, 2023, primarily because (i) the bank loans increased by RMB813.8 million from
RMB313.2 million in 2022 to RMB1,127.0 million in 2023; (ii) deferred income increased by
RMB105.4 million from RMB100.2 million in 2022 to RMB205.6 million in 2023; (iii) property,
plant, and equipment increased by RMB1,163.4 million from RMB873.8 million in 2022 to
RMB2,037.2 million in 2023; (iv) inventory increased by RMB259.7 million from RMB91.4
million in 2022 to RMB351.1 million in 2023; and (v) cash and cash equivalents increased by
RMB275.1 million from RMB274.4 million in 2022 to RMB549.5 million in 2023.
Our debt-to-asset ratio decreased from 52.4% as of December 31, 2023 to 37.5% as of
December 31, 2024, primarily because (i) taxes payable increased by RMB59.8 million from nil in
2023 to RMB59.8 million in 2024; (ii) deferred income increased by RMB55.3 million from
RMB205.5 million in 2023 to RMB260.8 million in 2024; (iii) cash and cash equivalents increased
by RMB1,481.1 million from RMB549.5 million in 2023 to RMB2,030.7 million in 2024.
Our debt-to-asset ratio decreased from 37.5% as of December 31, 2024 to 31.8% as of
September 30, 2025, primarily because (i) borrowings decreased by RMB342.6 million from
RMB1,112.1 million as of December 31, 2024 to RMB769.6 million as of September 30, 2025, (ii)
income tax payable decreased by RMB23.2 million from RMB59.8 million as of December 31, 2024
to RMB36.5 million as of September 30, 2025, (iii) other payables and accruals decreased by
RMB35.6 million from RMB145.1 million as of December 31, 2024 to RMB109.5 million as of
September 30, 2025, (iv) prepayments, deposits and other receivables increased by RMB13.7
million from RMB7.5 million as of December 31, 2024 to RMB21.2 million as of September 30,
2025, and (v) trade and bills receivables increased by RMB139.3 million from RMB129.6 million
as of December 31, 2024 to RMB269.0 million as of September 30, 2025.
For a more comprehensive discussion of the factors affecting our key financial ratios during
the Track Record Period, see “— Discussion of Results of Operations.”
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Our activities expose us to a variety of financial risks, primarily the interest risk, credit risk,
liquidity risk, equity price risk and foreign currency risk. Our overall risk management program
focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects
on our financial performance.
Market Risk
Foreign Exchange Risk
We provide products and services to overseas customers primarily priced in USD, while the
raw materials, machinery, equipment, or services we purchase from overseas suppliers are primarily
denominated in EUR and USD. As a result, we hold foreign currency-denominated assets and
liabilities. Our functional currency is RMB. Any appreciation of RMB against USD or other foreign
currencies could lead to a decrease in the value of our foreign currency-denominated assets,
FINANCIAL INFORMATION
– 248 –


--- page 259 ---
resulting in losses, while foreign currency-denominated liabilities would decrease, resulting in
gains. Conversely, any depreciation of RMB against USD or other foreign currencies would
increase the value of foreign currency-denominated assets, resulting in gains, while foreign
currency-denominated liabilities would increase, resulting in losses. We are exposed to foreign
currency risks on both revenue and cost components. These exposures arise from transactions
denominated in currencies other than the functional currency of the respective group entities.
Additionally, we face foreign currency risks associated with assets and liabilities, which are from
balances recorded in currencies differing from the functional currency of the relevant group entities.
As of September 30, 2025, we had monetary assets of RMB1.3 billion denominated in USD. If RMB
appreciates by 5% against USD, we will experience foreign exchange loss of approximately
RMB66.8 million. For more details about the impact of our asset denominated under foreign
currency, see Note 42 to the Accountant’s Report included in Appendix I to this Prospectus.
Our management actively monitors foreign currency exposures by closely tracking
fluctuations in foreign exchange rates. To mitigate these risks, we require group entities to manage
their foreign exchange risks relative to their respective functional currencies. For further details, see
Note 42(d) to the Accountant’s Report in Appendix I to this Prospectus. Our primary foreign
currency-denominated assets included USD deposits and USD accounts receivable, while our
primary foreign currency-denominated liabilities included EUR payables and USD payables. For
details, see “Risk Factors — Risks Related to Our Business and Industry — We are subject to PRC
Regulatory Authorities’ regulations on currency conversion and risks relating to fluctuations in
exchange rates.”
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates. Our interest rate risk arises primarily from
cash at bank and time deposits except for fixed deposits. Our interest-bearing financial instruments
at fixed interest rates as of December 31, 2022, 2023 and 2024 are fixed deposits and the change
of market interest rate does not expose us to fair value interest risk. Our Directors consider that our
exposure to interest rate risk is not significant. For further details, see Note 42 to the Accountant’s
Report in Appendix I to this Prospectus.
Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations
resulting in a financial loss to us. Our credit risk is primarily attributable to trade and bills
receivables, deposits and other receivables. Our exposure to credit risk is influenced mainly by the
individual characteristics of each customer. In respect of trade and bills receivables, deposits and
other receivables, credit evaluations are performed on all debtors. 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 customers as well as pertaining to the economic environment in
which the customers operate. Ongoing credit evaluation is performed on the financial condition of
trade customers and, where appropriate, credit guarantee insurance cover is purchased. Trade and
bills receivables are due from the date of billing. Normally, the Group does not obtain collateral
from customers. For further details, see Note 42 to the Accountant’s Report in Appendix I to this
Prospectus.
Liquidity Risk
We aim to maintain sufficient cash and cash equivalents for our business development and
expansion. We have built an appropriate liquidity risk management framework for the management
of our short, medium and long-term funding and liquidity management requirements. We manage
liquidity risk by maintaining adequate reserves. For further details, see Note 42 to the Accountant’s
Report in Appendix I to this Prospectus.
FINANCIAL INFORMATION
– 249 –


--- page 260 ---
DIVIDEND
During the Track Record Period, no dividends have been declared and paid by us.
As of the Latest Practicable Date, we did not have a formal dividend policy or a fixed dividend
distribution ratio. PRC laws require that dividends be paid only out of our distributable profits.
Distributable profits are our after-tax profits, less appropriations to statutory and other reserves that
we are required to make. Pursuant to our Articles of Association, our Board may declare dividends
in the future after taking into account our results of operations, financial conditions, cash
requirements and availability, and other factors as it may deem relevant at such time. Any
declaration and payment as well as the amount of dividends will be subject to our constitutional
documents, applicable PRC laws and approval by our Shareholders.
LISTING EXPENSES
Our listing expenses mainly include (i) underwriting-related expenses, such as underwriting
fees and commissions, and (ii) non-underwriting-related expenses, comprising professional fees
paid to our legal advisors, consultants and Reporting Accountants for their services rendered in
relation to the Listing and the Global Offering, and other fees and expenses. Based on the Offer
Price of HK$76.26, the total listing expenses (including underwriting commissions) payable by our
Company are estimated to be approximately HK$78.9 million (equivalent to approximately
RMB72.0 million), of which HK$31.4 million had been and is expected to be charged to our
consolidated statements of profit or loss and HK$47.5 million is expected to be charged against
equity upon the Listing. These listing expenses mainly comprise professional fees paid and payable
to the professional parties, and commissions payable to the Underwriters, for their services rendered
in relation to the Listing and the Global Offering. During the Track Record Period, we had
recognized listing expenses in relation to the Listing of approximately RMB17.4 million to our
consolidated statements of profit or loss and had prepaid listing expenses and deferred issue costs
of RMB6.2 million to our consolidated statement of financial position. During the Track Record
Period, we also recognized an additional amount of RMB8.5 million expenses in relation to our
prior A share listing application, which accounts for an aggregate of RMB25.9 million listing-
related expenses.
We estimate that an additional listing expenses of RMB48.4 million (including underwriting
commissions of RMB37.4 million, based on an Offer Price of HK$76.26 per Offer Share),
accounting for 2.95% of our gross proceeds, will be further incurred by our Group, of which
RMB11.3 million is expected to be charged to our consolidated statements of profit or loss and
RMB37.1 million is expected to be charged against equity upon the Listing.
UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets of
the Group attributable to owners of the Company prepared in accordance with paragraph 4.29 of the
Listing Rules is for illustrative purpose only, and is set forth here to illustrate the effect of the
Global Offering on the consolidated net tangible assets of the Group attributable to owners of the
Company as of September 30, 2025 as if the Global Offering had taken place on September 30,
2025.
This unaudited pro forma statement of adjusted consolidated net tangible assets of the Group
attributable to owners of the Company has been prepared for illustrative purposes only and, because
of its hypothetical nature, it may not give a true picture of the consolidated financial position or
results of the Group as of September 30, 2025 or at any future dates following the Global Offering.
It is prepared based on the audited consolidated net assets of the Group attributable to owners of
the Company as of September 30, 2025 as set out in the Accountant’s Report on historical financial
information of the Group, the text of which is set out in Appendix I to this Prospectus, and adjusted
as described below.
FINANCIAL INFORMATION
– 250 –


--- page 261 ---
Consolidated net
tangible assets of
the Group
attributable to
owners of the
Company as of
September 30,
2025
Estimated
net proceeds
from the
Global Offering
Unaudited
pro forma adjusted
consolidated net
tangible assets of
the Group
attributable to
owners of the
Company as of
September 30,
2025
Unaudited
pro forma adjusted
consolidated net
tangible assets of
the Group
attributable
to owners of the
Company as of
September 30, 2025
per Share
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Note 2) (Note 3)
Based on Offer Price of
HK$76.26 per H Share /H1118/H1118/H11182,975,646 1,441,768 4,417,414 10.38 11.37
Notes:
(1) The consolidated net tangible assets of the Group attributable to owners of the Company as of September 30,
2025 is extracted from the Accountants’ Report set out in Appendix I to this Prospectus, which is based on the
audited consolidated net assets of our Group attributable to owners of the Company as of September 30, 2025
of approximately RMB2,977,464,000 with an adjustment for intangible assets as of September 30, 2025 of
approximately RMB1,818,000.
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$76.26 per Offer
Share, after deduction of the estimated underwriting fees and other related expenses paid or payable by the
Company, excluding the listing expenses that have been charged to profit or loss during the Track Record
Period.
(3) The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the
Company as of September 30, 2025 per Share is calculated based on a total of 425,584,810 Shares in issue
immediately following the completion of the Global Offering.
(4) For the purpose of this unaudited pro forma statement of adjusted consolidated net tangible assets, the
translation of Renminbi amounts into Hong Kong dollars has been made at a rate of RMB0.9130 to HK$1.00
as at September 30, 2025. No representation is made that Renminbi amounts have been, could have been or
could be converted to Hong Kong dollars, or vice versa, at that rate.
(5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of the Group
attributable to owners of the Company as of September 30, 2025 to reflect any trading or other transactions
of the Group entered into subsequent to September 30, 2025.
Please refer to “Appendix II — Unaudited Pro Forma Financial Information” for further
details.
FINANCIAL STRATEGIES
We had revenue of RMB440.7 million, RMB1,142.5 million, RMB974.3 million, RMB808.3
million and RMB535.1 million in 2022, 2023 and 2024 and for the nine months ended September
30, 2024 and 2025, respectively. From 2023, the semiconductor industry entered a new inventory
cycle for the entire industry, leading to a sequential inventory adjustment across its downstream
applications. According to CIC, this process started in the consumer electronics segment in 2022
before impacting semiconductors power devices, particularly in automotive, in 2023. Given the
intricate industry chain, this de-stocking wave gradually moved upstream to our segment of the
value chain, leading to a decline in our sales and revenue.
FINANCIAL INFORMATION
– 251 –


--- page 262 ---
The semiconductor industry is inherently cyclical, shaped by inventory dynamics,
technological transitions, and other macroeconomic factors, and typically progresses from shifts in
downstream demand to capacity expansion, oversupply, inventory correction, and subsequent
demand recovery. This pattern is reflected across product generations, with different products
concurrently positioned in the growth, maturity, or decline stages of the product life cycle.
According to CIC, recent fluctuations have been driven primarily by downstream demand
adjustments and the transition from 4-inch to 6-inch and further to 8-inch wafers. As 4-inch SiC
epitaxial wafers ceased to be the mainstream size, prices declined and subsequently stabilized as the
technology matured and volumes contracted. Following a period of intensive price competition,
6-inch SiC epitaxial wafers entered the maturity phase, and supply-demand conditions became more
balanced. Meanwhile, beginning in 2024, 8-inch SiC epitaxial wafers entered a rapid growth phase.
This occurred against a backdrop of broader industry weakness characterized by slower demand
growth and elevated inventories.
The current adjustment is expected to conclude in the second half of 2026 and is regarded as
a cyclical correction rather than a structural deterioration. The market size projections for 2024 to
2029 indicate an improving trajectory, supported by rising vehicle demand and emerging industries,
such as home appliances, AI computing power and data centers, smart grids, and eVTOL. By 2029,
the global sales value of SiC epitaxial wafers used in EVs is projected to reach US$3.9 billion, with
a CAGR of 37.9% from 2024 to 2029. Emerging industries have high growth potential, and global
sales value from SiC epitaxial wafers for them is expected to grow at a CAGR of 54.5%.
Given the relatively higher average selling prices of 8-inch wafers, initial adoption has been
concentrated among customers in automotive-grade and industrial applications that can support the
associated cost structure. We expect the cost of 8-inch wafers to decline over the foreseeable future,
at which point their use is likely to broaden into the same downstream industries served by our
6-inch wafers, including consumer electronics. According to CIC, the sales volume of 8-inch SiC
epitaxial wafers has exhibited the most remarkable growth, increasing from only 0.9 thousand
pieces in 2020 to 137.1 thousand pieces in 2024, with a CAGR of 254.6%. By 2029, it is expected
to increase to 3,784.8 thousand pieces, with a CAGR of 94.2% from 2024 to 2029. Over the long
term, demand for SiC and SiC epitaxial wafers is expected to remain robust, supported by the
recovery of downstream demand, the gradual absorption of excess inventory, and secular growth
drivers across EVs, charging infrastructure, renewable energy, and energy storage systems, as well
as emerging applications including home appliances, AI compute and data centers, smart grids, and
eVTOL.
Against this industry backdrop, since 2023, we have faced pricing pressure, as our product
pricing is influenced by downward industry-wide prices, resulted in a decrease in our revenue from
2023 to 2024. As the world’s largest SiC epitaxial foundry by annual sales volume since 2023, we
are well-positioned to capture the future growth. Our business is underpinned by core competitive
advantages, including technological expertise, cost efficiency, gross margin leadership, stable
supply chain and strong customer loyalty, which allow us to navigate industry cycles resiliently. We
are prepared to capture future growth and solidify our financial performance when the global SiC
epitaxial market regains momentum.
We had the following financial strategies to continue to grow our business and tackle potential
market fluctuations:
Expand Our Customer Base and Drive Revenue Growth
To maintain our sustained profitable growth in the long term, we intend to take the following
measures to drive revenue growth:
 Continue to strengthen and enhance our technologies. We intend to continue to address
the evolving needs of end customers. Through targeted R&D efforts, we aim to enhance
product performance and overcome technical bottlenecks. Specifically, we have been
FINANCIAL INFORMATION
– 252 –


--- page 263 ---
pursuing advancements and improvements in technologies such as composite substrate
epitaxy, trench filling epitaxy, multi-layer epitaxy and ultra-thick epitaxy to further
improve the quality of our products and enhance their market competitiveness. The table
below sets forth the details about our certain ongoing R&D projects.
Projects Targets
1 /H1118/H1118SiC trench epitaxial refiling process Develop trench epitaxial refiling
technology to enable void-free SiC
epitaxy in trenches with a certain
depth-to-width ratio
2 /H1118/H1118High-quality SiC thick-film
homoepitaxial technology
Develop high-quality thick-film
epitaxial technologies to improve the
performance of our epitaxial wafers
in various aspects such as thickness
variation, doping concentration,
doping uniformity and surface defect
density
3 /H1118/H1118High-quality 6-inch multi-layer SiC
epitaxy technology
Develop high-quality 6-inch multi-
layer epitaxy technology and achieve
multiple epitaxial layers per wafer
with controlled interface transition
sharpness
4 /H1118/H1118High-uniformity 8-inch SiC epitaxial
wafer
Refine 8-inch epitaxial growth
technologies to improve the
performance of our epitaxial wafers
in various aspects, such as all-point
thickness tolerance, thickness
uniformity, all-point doping tolerance,
doping uniformity and surface defect
density
 Strategic focus on 8-inch SiC epitaxial wafers. We seek to strengthen our leadership in
the 8-inch SiC epitaxial wafer market, recognizing its growing importance in the
industry. We were the first in the world to achieve large-scale commercial supply of
8-inch SiC epitaxial wafers. Our sales volume for 8-inch SiC epitaxial wafers increased
from 285 pieces in 2023 to 7,466 pieces in 2024 and further increased from 6,057 pieces
for the nine months ended September 30, 2024 to 10,788 pieces for the same period in
2025. This growth reflects the industry’s accelerating adoption of 8-inch wafers, driven
by their clear advantages: 1.8 times larger wafer area compared to 6-inch, a reduction in
edge die ratio from 14% to 7%, and a 90% boost in the number of bare dies per wafer.
To meet the market’s growing demand for 8-inch SiC epitaxial wafers, we are
strategically allocating additional manufacturing capacity to expand production of
8-inch SiC epitaxial wafers. This approach not only positions us to capture greater
market share but also enables us to reduce fixed unit costs, further enhancing our
competitiveness in the market. Our Directors are of the view that, having achieved the
commercialization capabilities for 8-inch SiC epitaxial wafers, we are able to leverage
our first-mover advantage to mass produce 8-inch SiC epitaxial wafers, meet the
growing market demand and turn around our financial performance to enhance
profitability in the future.
FINANCIAL INFORMATION
– 253 –


--- page 264 ---
 Continuously expanding market share for 6-inch SiC epitaxial wafers. Our sales volume
for 6-inch SiC epitaxial wafers increased from 81,633 pieces in 2022 to 199,708 pieces
in 2023, primarily due to the growth of downstream applications and demands from our
customers. Our sales volume for 6-inch SiC epitaxial wafers decreased from 199,708
pieces in 2023 to 156,584 pieces in 2024, primarily due to the larger stocking of our
downstream customers in 2023. Our sales volume for 6-inch SiC epitaxial wafers
increased from 126,648 pieces for the nine months ended September 30, 2024 to 137,184
pieces for the same period in 2025. According to CIC, this inventory adjustment cycle,
expected to conclude by the second half of 2026, reflects a cyclical rebalancing of
supply and demand as well as impact from the transition from 4-inch to 6-inch and
8-inch wafers rather than a structural decline in the market. From a long-term
perspective, the demand for SiC and SiC epitaxial wafer is expected to maintain strong
growth, driven by the recovery of previous downstream demand along with gradual
absorption of excessive inventory, combined with the significant potential of
downstream industries. According to CIC, the sales value generated by 6-inch epitaxial
wafers is expected to increase from US$0.8 billion in 2024 to US$1.3 billion by 2029,
with a CAGR of 9.4% from 2024 to 2029. To strengthen our position in the 6-inch SiC
epitaxial wafer market, we are actively pursuing multiple strategic initiatives. These
include implementing targeted marketing efforts. In particular, we intend to strengthen
our sales outreach by deploying a dedicated field engagement team to build deeper
relationships with key accounts and prospects. In parallel, we plan to actively participate
in leading industry exhibitions and academic forums, both domestically and globally, to
expand our market presence, capture emerging opportunities, and strengthen customer
relationships. These efforts will enable us to better understand evolving market
demands, identify new opportunities, and solidify our position with existing customers,
which will eventually lead to better sales and operation results.
According to the CIC, that the adjustment cycle is expected to conclude in the second
half of 2026, for the following reasons:
➢ The Cumulative Lag of Demand Recovery Through the V alue Chain: The recovery
signal starts with end-device sales (e.g., NEVs), but its impact on upstream
semiconductor manufacturers (e.g., SiC epitaxial wafer foundries) occurs with a
significant lag. The 8.1% year-over-year growth in NEV sales in the first half of
2025 needs to work through existing component inventories at OEM and Tier-1
supplier levels first before translating into new orders for wafer producers. This
multi-stage inventory digestion process inherently delays the upstream recovery by
several quarters, pushing the full rebound into 2026.
➢ The Critical Mass of “Native-SiC” V ehicle Platforms Ramping Production: Many
OEMs have designed new EV platforms around SiC’s benefits (efficiency,
endurance, and faster charging, among others). These models, slated for mass
production in late 2025 and 2026, are not just using SiC as an option; they are
structural, non-negotiable demand drivers. As these hit their production stride, they
will generate a steep, relatively inelastic, and sustained surge in demand for SiC
devices, which the supply chain must ramp to meet. The second half of 2026 is a
timeline for this demand wave to fully propagate upstream. Before 2024, most of
the EV models use silicon-based IGBT devices, which has reached the physical
limitation and cannot support for 800V and higher architecture. As the price of SiC
power devices decline and the wide adoption of 800V electrical architecture in
2025, the use of SiC power device becomes a necessity, bringing high demand to
SiC power devices and epitaxial wafers as well.
FINANCIAL INFORMATION
– 254 –


--- page 265 ---
➢ The Achievement of a Key Cost-Competitiveness Threshold: By late 2026, the
combined effects of greater manufacturing scale and technological advancements
(including the transition to 8-inch wafers) are projected to lower SiC device costs
to a point where its value proposition becomes the preferred option for mainstream
automotive and industrial applications, not just premium segments. This cost-down
inflection point will significantly accelerate adoption, finally clearing oversupply.
➢ The Synergy of AI and Energy Transition Demand: The recent AI boom primarily
benefits high-performance computing chips and servers. However, AI’s energy
demand is immense. By 2026, the need for power management and energy
efficiency from AI data centers and the supporting grid will become a major
secondary demand source for SiC. This creates a synergistic demand pull from both
transformative applications (AI/computing) and transformative electrification
(NEVs/energy), promoting a recovery that is broad-based and resilient.
➢ The Natural Duration of Historical Semiconductor Cycles: Historical evidence
suggests major semiconductor inventory cycles typically last three to four years.
The downturn began in earnest in 2023. A conclusion in the second half of 2026
would align with an approximately 3.5-year cycle duration, which is consistent
with the time required for the market to rationalize capacity, innovate on cost, and
for new demand drivers to mature.
 Implement targeted market expansion plan to reach new customers. We seek to expand
our market presence through targeted strategies in order to connect with a broader
customer base. In the domestic market, our focus is on steadily growing our customer
base, deepening strategic partnerships with key accounts, developing innovative
downstream industry applications, and delivering increasingly competitive products as
we scale efficiently. In the international market, we aim to strengthen relationships with
global industry leaders by elevating product and service quality, ultimately bolstering
customer loyalty, and to offer agile, tailored solutions that maintain our competitive
edge. This dual approach could allow us to reach a broader customer pool both
domestically and internationally.
 Collaborate closely with downstream customers in joint R&D projects. By partnering
with customers on customized early-stage R&D projects, we seek to strengthen our
customer relationships and foster loyalty. This approach not only aligns our R&D focus
with customer-specific needs but also positions us as a trusted partner, enhancing
customer loyalty and long-term revenue potential. The table below sets forth the details
about our certain future R&D plans.
Projects Targets
1 /H1118/H1118SiC superjunction device epitaxial
technology
Develop and refine trench etching and
epitaxial refiling process.
2 /H1118/H11188-inch SiC epitaxial wafers with low
defect density
Develop SiC epitaxial growth
technologies with lower defect
density for 8-inch wafers.
 Explore new downstream market applications. Tapping into industries that have yet to
adopt SiC materials on a large scale, such as home appliances, AI computing power and
data centers, smart grids, energy storage and eVTOL, presents significant growth
opportunities. By tapping into these emerging markets, we could expand downstream
market applications, unlocking new revenue streams.
FINANCIAL INFORMATION
– 255 –


--- page 266 ---
 Actively participate in promoting SiC and drive the adoption of SiC materials. We intend
to actively participate in market education initiatives to accelerate the adoption of SiC
materials in various use scenarios. Through publishing industry white papers and
standards, hosting technical seminars, attending industry exhibition and advocating the
advantages of SiC, we seek to raise awareness, shape industry standards, and drive the
market’s transition toward SiC solutions, fueling future growth. During the Track Record
Period, our efforts on participating industry exhibitions and initiatives in the
development of industry standards bolstered our industry recognition. This heightened
visibility strengthened our brand authority and played a role in translating market
interest into tangible business opportunities, supporting our order conversion efforts.
Looking ahead, we remain committed to sustaining and expanding these efforts. By
continuing to showcase our expertise through high-impact exhibitions and contributing
to the development of forward-looking industry standards, we aim to accelerate the
widespread adoption of SiC materials. This approach can help us to solidify our position
and drive scalable growth, enabling us to capture new market segments and expand our
business footprint strategically.
Improve Operational Efficiency and Enhance Operating Leverage
We aim to improve operating efficiency in every key aspect of our business. We expect to
improve our operational efficiency by implementing the following:
 Optimizing raw material costs. Our raw material costs amounted to RMB180.0 million,
RMB495.0 million, RMB411.3 million, RMB327.3 million and RMB214.2 million,
respectively, in 2022, 2023 and 2024 and for the nine months ended September 30, 2024
and 2025, representing for 73.9%, 71.0%, 64.1%, 62.6% and 53.8%, respectively, of our
total cost of sales in the same periods. By periodically tracking market changes, we
could monitor and record raw material price fluctuations, timely recognize price trends
and flexibly adjust procurement plan in advance. We plan to continue to strengthen
collaborations with upstream suppliers to secure more favorable terms and develop a
more cost-effective raw material procurement strategy. Furthermore, improved process
efficiency and production yield rate also mitigate raw material expenditure on each
wafer, and we intend to implement targeted initiatives to integrate cost saving strategies
with our enhancing product quality and supply chain stability.
 Order-based production and inventory optimization. We plan to continue our order-
based production strategy, focusing on optimizing raw material stocking mechanisms to
enhance turnover efficiency and minimize inventory backlogs. By aligning production
closely with demand, we aim to streamline operations, reduce excess inventory, and
establish an efficient supply chain. For example, we intend to coordinate our upstream
suppliers for shorter procurement cycles, so as to increase storage flexibility and reduce
inventory backlogs. We also plan to categorize our inventories to realize refined
management. For critical materials with high value and low quantity, we intend to
implement frequent stocktaking and stringent management policy. For low-value bulk
materials, we intend to simplify the management procedure and maintain necessary
secure inventory level.
 Enhancing operational efficiency through advanced production line automation. We
plan to prioritize production line automation upgrades to enhance per capita output and
reduce unit labour costs, driving operational efficiency and improving utilization rates.
For example, in the labor-intensive processes of precise substrate placement and
epitaxial wafer retrieval, we are utilizing an integrated multi-axis robotic system with
vision positioning to achieve highly precise automated operations. Higher level of
automation can reduce our unit cost and improve production efficiency. We believe these
efforts establish a scalable automation model for future production expansion, while
supporting our long-term operational efficiency.
FINANCIAL INFORMATION
– 256 –


--- page 267 ---
Based on the foregoing, our Directors believe that the aforementioned measures will be
effective and sustainable in improving our operating and financial performance. Considering the
independent due diligence conducted by the Sole Sponsor, nothing has come to the attention of the
Sole Sponsor which would cause them to cast reasonable doubt on the Company’s view above.
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that, as of the date of the Prospectus, there has been no material adverse
change in our financial or trading position, indebtedness, mortgage, contingent liabilities,
guarantees or prospects since September 30, 2025, the end of the period reported on the
Accountant’s Report included in Appendix I to this Prospectus; and there has been no event since
September 30, 2025 which would materially affect the information presented in the Accountant’s
Report set out in Appendix I to this Prospectus.
DISCLOSURE REQUIRED UNDER THE LISTING RULES
We confirm that, as of the Latest Practicable Date, there were no circumstances that would
give rise to disclosure required under Rules 13.13 to 13.19 of the Listing Rules.
FINANCIAL INFORMATION
– 257 –


--- page 268 ---
FUTURE PLANS
Please see “Business — Our Growth 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$1,560.1 million, after deducting underwriting commissions, fees and estimated expenses
payable by us in connection with the Global Offering, based on an Offer Price of HK$76.26 per
Offer Share.
In line with our strategies, we intend to use the net proceeds for the following purposes,
subject to changes with respect to our evolving business needs and changing market conditions:
 Approximately 71% of the net proceeds, or HK$1,107.7 million, will be used to expand
our production capacity of the SiC epitaxial wafers in a disciplined and prudent manner
over the next five years, in response to the growing market demands. In particular, we
plan to scale up our production of 8-inch SiC epitaxial wafers in a market-driven manner
to align with the anticipated expansion of the market in the coming years. We intend to
adopt a measured approach to forecasting market demand, enabling flexible capacity
expansion while continuously adjusting our plans in response to actual market
conditions.
According to CIC, the global sales volume of 8-inch SiC epitaxial wafers is expected to
increase from 0.1 million pieces in 2024 to 3.8 million pieces by 2029, representing a
CAGR of 94.2%. According to public information, the world’s top five SiC chip
manufacturers have collectively launched investments of over US$25 billion in 8-inch
SiC power device production lines, with each expected to create a demand of over two
million 8-inch epitaxial wafers upon full production. In 2024, in terms of sales volume
in open market, our market share among foundries in the global SiC epitaxy wafer
market exceeded 30%, according to CIC. Supported by our leading market position,
R&D capabilities and established customer base, we are well positioned to capture the
market growth potentials. To this regard, our extensive customer base, including eight
of the world’s top ten SiC power device giants, provides us with significant growth
opportunities for 8-inch SiC epitaxial wafers. We have earned their deep trust through
our extensive technical expertise, large-scale production capabilities, stable quality
assurance, consistent delivery, and reliable after-sales service.
In addition, we actively engage in marketing through exhibitions and industry forums.
Combined with our stable supply capabilities and leading technical advantages in 8-inch
SiC epitaxial wafers, this has positioned us as a go-to supplier for new manufacturers
entering the 8-inch SiC power device market. As of September 30, 2025, we had
established 8-inch product partnerships with 18 companies globally, including three of
the top ten industry giants.
Further, to better capture the market potentials, we have also formulated a timely
strategy to nurture more overseas collaboration and partnership. We plan to continue and
deepen our collaboration with leading global SiC power device manufacturers in key
regions across the world, expanding our global footprint.
To strengthen our competitiveness in the market growth, we plan to continuously invest
in the research and development of 8-inch SiC epitaxial wafers. Our current and future
projects include the development of high-uniformity 8-inch SiC epitaxial wafer, 8-inch
SiC epitaxial wafers with low defect density, and high-quality automotive-grade 8-inch
SiC MOS epitaxial wafers.
FUTURE PLANS AND USE OF PROCEEDS
– 258 –


--- page 269 ---
We plan to expand our production capacity of 8-inch SiC epitaxial wafers to capitalize
on market opportunities and optimize the utilization of our manufacturing capacity. We
had utilization rate of 88.9%, 93.7%, 56.1% and 43.0% in 2022, 2023, 2024 and the nine
months ended September 30, 2025. Despite such fluctuation in utilization rate, given the
typical lead time from investment to capacity ramp-up in SiC epitaxial wafer production
and market demand may rise within a short time, we consider it strategically necessary
to expand our capacity in advance to prepare ourselves for the future market
opportunities. In addition, we also expect to reduce unit production costs through
capacity expansion, enhance our competitiveness and improve our long-term
profitability through the economy of scale. In connection with such plans, we will
purchase and upgrade equipment and machinery for production and recruit
manufacturing personnel. We expect our enlarged production capacity of 8-inch wafers
for about ten times from current 40.0 thousand pieces per year to reach 463.0 thousand
pieces per year in 2029, and the utilization rate of the Xiamen production base is
expected to reach over 70% in 2029 after the completion of the upgrades and recruitment
of staff. We expect such investment will lead to the increase in our capital expenditure,
depreciation and staff costs, while contributing to an improvement in our profit margin
in the long term. In particular:
/H18537Approximately 50% of the net proceeds, or HK$780.0 million, will be used for the
procurement and upgrade of our equipment and machinery to expand our
production capacity of the SiC epitaxial wafers. We plan to utilize such net
proceeds with expected allocations of approximately HK$110.5 million, HK$135.5
million, HK$159.3 million, HK$177.1 million and HK$197.6 million, respectively,
in each year over the next five years. In particular, among others, we plan to
procure and upgrade furnaces and production machinery of HK$75.4 million,
HK$95.9 million, HK$113.2 million, HK$127.2 million and HK$144.4 million,
respectively, in each year over the next five years. We also plan to procure
inspection, cleaning and other equipment of HK$35.1 million, HK$39.6 million,
HK$46.1 million, HK$49.9 million and HK$53.2 million, respectively, in each
year over the next five years.
We develop production expansion plans primarily based on (i) the anticipated
demands for our SiC epitaxial wafers, (ii) the current and anticipated prices for our
SiC epitaxial wafers, (iii) the utilization of the existing production base and the
feasibility of its expansion, (iv) the estimated cost of expansion, and (v) our
estimated capital resources.
/H18537Approximately 15% of the net proceeds, or HK$234.0 million, will be used to
complete and improve the construction of our existing production base to support
the expanded capacity of our production base. We plan to utilize such net proceeds
with expected allocations of approximately HK$30.5 million, HK$132.8 million,
HK$21.3 million, HK$27.1 million and HK$22.3 million, respectively, in each
year over the next five years. In particular, in the first year, we plan to launch the
initial phase of our equipment automation and gas recycling projects, alongside the
construction of our new high- and low-voltage power distribution systems, which
are expected to be completed in two years with a total estimated investment of
HK$30.5 million. In the second year, we plan to complete the construction of a new
plant and cleanroom facilities at our Xiamen production base with an estimated
investment of HK$81.9 million. We also intend to procure the initial supporting
production systems for the new plant, including gas delivery system, ultrapure
water system, chiller, air compressing system, chemical supply system, wastewater
treatment system and UPS systems, with an estimated investment of HK$25.7
million. In addition, we plan to upgrade our power supply system at our Xiamen
production base by initiating a two-year construction of a 110kV substation with
an estimated investment of HK$25.2 million. From the third to the fifth year, we
plan to expand the supporting production systems in line with our capacity
FUTURE PLANS AND USE OF PROCEEDS
– 259 –


--- page 270 ---
ramp-up and complete the automation upgrades of all our production equipment,
with the estimated annual investment of HK$21.3 million, HK$27.1 million and
HK$22.3 million, respectively.
/H18537Approximately 6% of the net proceeds, or HK$93.6 million, will be used in the
recruitment of our production-related personnel. We plan to recruit approximately
500 manufacturing personnel at our production base to support the expansion of
our production. In particular, we plan to recruit approximately 76, 114, 107, 106
and 97 new personnel, respectively, in each year over the next five years. Our
current operational headcount suffices a monthly production output of
approximately 25,000 SiC epitaxial wafers, with the majority being 6-inch wafers.
Looking ahead, to fully utilize the designed capacity of our production site, we
anticipate a need for additional personnel to support two key strategic objectives:
(i) our continued expansion of our 8-inch wafer manufacturing capacity to meet
growing market demand for next-generation power devices; and (ii) our focus on
increasing the capacity utilization rate of our existing 6-inch production lines to
maximize output and efficiency. To ensure smooth and uninterrupted production
during this dual-path growth, an increase in workforce is necessary even after
considering workforce reductions that we expect to achieve through planned
upgrades of our automation systems.
 Approximately 19% of the net proceeds, or HK$296.4 million, will be used in the R&D
of SiC epitaxial wafers to enhance our technical capabilities and solidify our technical
advantages. We plan to further invest in key technologies, focusing on our 6-inch and
8-inch high-quality SiC epitaxial wafer production technology, such as high-
concentration uniform epitaxial growth, thick and ultra-thick film epitaxial growth,
composite substrate epitaxial growth, trench refilling epitaxial technology and multi-
layer epitaxial growth. As technological advancements enhance the competitiveness of
our products, we expect these investments to increase our research and development
expenses while also improving our profit margins.
/H18537Approximately 10% of the net proceeds, or HK$156.0 million, will be used for the
development of our technology and R&D center, including the procurement of
equipment and machinery. We expect to complete the upgrade of our technology
and R&D center in the first year, and procure new R&D equipment and machinery
of HK$57.4 million, HK$32.6 million, HK$24.0 million, HK$16.2 million and
HK$18.6 million, respectively, in each year over the next five years.
/H18537Approximately 7% of the net proceeds, or HK$109.2 million, will be used to
purchase R&D materials and other development expenses including, among others,
substrates, R&D consumables, special gases, equipment spare components and
chemical materials. We expect to utilize approximately HK$15.0 million, HK$17.9
million, HK$21.7 million, HK$25.6 million and HK$29.0 million, respectively, in
each year over the next five years.
/H18537Approximately 2% of the net proceeds, or HK$31.2 million, will be used in the
recruitment of our research and development staff. We plan to recruit
approximately 75 new employees to support our increasing research and
development efforts and we expect to recruit 27, 21, 13, 10 and four new personnel
in each year over the next five years, respectively.
 Approximately 10% of the net proceeds, or HK$156.0 million, will be used as working
capital and for general corporate purposes.
FUTURE PLANS AND USE OF PROCEEDS
– 260 –


--- page 271 ---
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 available on hands, bank loans
and other borrowings.
If the net proceeds of the Global Offering are not immediately used for the purposes described
above, to the extent permitted by the relevant laws and regulations, we will only deposit the net
proceeds into short-term interest bearing accounts at licensed commercial banks and/or other
authorized financial institutions as defined under the Securities and Futures Ordinance or applicable
laws and regulations in other jurisdictions, including announce such changes on a timely basis. We
will comply with all disclosure requirements under the Listing Rules if there is any change to the
above proposed use of proceeds.
FUTURE PLANS AND USE OF PROCEEDS
– 261 –


--- page 272 ---
HONG KONG UNDERWRITERS
China International Capital Corporation Hong Kong Securities Limited
ICBC International Securities Limited
Orient Securities (Hong Kong) Limited
ABCI Securities Company Limited
China Sunrise Securities (International) Limited
Futu Securities International (Hong Kong) Limited
CCB International Capital Limited
Daokou Securities Limited
China Industrial Securities International Capital Limited
Fuze Securities (International) Limited
Kingston Securities Limited
Y uen Meta (International) Securities Limited
UNDERWRITING
This prospectus is published solely in connection with the Hong Kong Public Offering. The
Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a conditional
basis. The International Offering is expected to be fully underwritten by the International
Underwriters. 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 2,149,250 Hong
Kong Offer Shares and the International Offering of initially 19,342,800 International Offer Shares,
subject, in each case, to reallocation on the basis as described in the section headed “Structure of
the Global Offering”.
UNDERWRITING ARRANGEMENTS AND EXPENSES
The Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company is offering the Hong Kong
Offer Shares for subscription on the terms and conditions set out in this prospectus and the Hong
Kong Underwriting Agreement at the Offer Price.
Subject to (a) the Stock Exchange granting approval for the listing of, and permission to deal
in, the H Shares to be issued pursuant to the Global Offering (including the H Shares to be converted
from Unlisted Shares) as mentioned herein on the Main Board of the Stock Exchange and such
approval not subsequently having been revoked prior to the commencement of trading of the H
Shares on the Stock Exchange and (b) certain other conditions set out in the Hong Kong
Underwriting Agreement, the Hong Kong Underwriters have agreed severally but not jointly to
procure subscribers for, or themselves to subscribe for, their respective applicable proportions of the
Hong Kong Offer Shares being offered which are not taken up under the Hong Kong Public Offering
on the terms and conditions set out in this prospectus and the Hong Kong Underwriting Agreement.
The Hong Kong Underwriting Agreement is conditional on, among other things, the
International Underwriting Agreement having been executed and becoming unconditional and not
having been terminated in accordance with its terms.
UNDERWRITING
– 262 –


--- page 273 ---
Grounds for Termination
If any of the events set out below occurs at any time prior to 8:00 a.m. on the Listing Date,
the Sole Sponsor in its absolute discretion may, by giving notice to our Company, terminate the
Hong Kong Underwriting Agreement with immediate effect:
(a) there develops, occurs, exists or comes into force:
(i) any new law or regulation or any change or development involving a prospective
change or any event or series of events or circumstances likely to result in a change
or a development involving a prospective change in existing laws or regulations,
or the interpretation or application thereof by any court or any competent authority
in or affecting Hong Kong, the Cayman Islands, the PRC, the United States, the
United Kingdom, the European Union (or any member thereof), Japan, Singapore,
or other jurisdictions relevant to the Group or the Global Offering (each a
“Relevant Jurisdiction ” and collectively, the “ Relevant Jurisdictions ”); or
(ii) any change or development involving a prospective change, or any event or series
of events or circumstances likely to result in a change or prospective change, in
any local, national, regional or international financial, political, military,
industrial, economic, fiscal, legal, regulatory, currency, credit or market conditions
or sentiments, taxation, equity securities or currency exchange rate or controls or
any monetary or trading settlement system, or foreign investment regulations
(including, without limitation, a devaluation of the Hong Kong dollar, United
States dollar or Renminbi against any foreign currencies, a change in the system
under which the value of the Hong Kong dollar is linked to that of the United States
dollar or the Renminbi is linked to any foreign currency or currencies) or other
financial markets (including, without limitation, conditions and sentiments in stock
and bond markets, money and foreign exchange markets, the inter-bank markets
and credit markets) in or affecting any Relevant Jurisdictions, or affecting an
investment in the Offer Shares; or
(iii) any event or series of events, or circumstances in the nature of force majeure
(including, without limitation, any acts of government, declaration of a regional,
national or international emergency or war, calamity, crisis, economic sanctions,
strikes, labor disputes, other industrial actions, lock-outs, fire, explosion, flooding,
tsunami, earthquake, volcanic eruption, civil commotion, riots, rebellion, public
disorder, paralysis in government operations, acts of war, epidemic, pandemic,
outbreak or escalation, mutation or aggravation of diseases, accident or
interruption or delay in transportation, local, national, regional or international
outbreak or escalation of hostilities (whether or not war is or has been declared),
act of God or act of terrorism (whether or not responsibility has been claimed)) in
or affecting any of the Relevant Jurisdictions; or
(iv) the imposition or declaration of any moratorium, suspension or limitation
(including without limitation, any imposition of or requirement for any minimum
or maximum price limit or price range) on (i) the trading in shares or securities
generally on the Stock Exchange, the Shanghai Stock Exchange, the Shenzhen
Stock Exchange, the Tokyo Stock Exchange, the Singapore Stock Exchange, the
New Y ork Stock Exchange, the NASDAQ Global Market or the London Stock
Exchange; or (ii) the trading in any securities of the Company listed or quoted on
a stock exchange or an over-the-counter market; or
UNDERWRITING
– 263 –


--- page 274 ---
(v) the imposition or declaration of any general moratorium on banking activities in or
affecting any of the Relevant Jurisdictions or any disruption in commercial
banking or foreign exchange trading or securities settlement or clearing services,
procedures or matters in or affecting any of the Relevant Jurisdictions; or
(vi) other than with the prior written consent of the Sponsor-Overall Coordinator, the
issue or requirement to issue by the Company of a supplement or amendment to the
Prospectus or other documents in connection with the offer and sale of the Offer
Shares pursuant to the Companies (Winding up and Miscellaneous Provisions)
Ordinance or the Listing Rules or upon any requirement or request of the Stock
Exchange and/or the SFC; or
(vii) the commencement by any Authority or other regulatory or political body or
organization of any public action or investigation against a member of the Group
or a director or a senior management member of any member of the Group or
announcing an intention to take any such action; or
(viii) the imposition of sanctions or export controls in whatever form, directly or
indirectly, on any member of the Group or the Single Largest Shareholder or by or
on any Relevant Jurisdiction, or the withdrawal of trading privileges which existed
on the date of the Hong Kong Underwriting Agreement, in whatever form, directly
or indirectly, by, or for, any Relevant Jurisdiction; or
(ix) any valid demand by creditors for payment or repayment of indebtedness of any
member of the Group or in respect of which any member of the Group is liable
prior to its stated maturity; or
(x) any non-compliance of the Prospectus (or any other documents used in connection
with the contemplated offering, allotment, issue, subscription or sale of any of the
Offer Shares), the CSRC filings or any aspect of the Global Offering with the
Listing Rules or any other applicable laws; or
(xi) any litigation, dispute, legal action or claim or regulatory or administrative
investigation or action being threatened, instigated or announced against any
member of the Group or the Single Largest Shareholder or any Director or senior
management members as named in the Prospectus; or
(xii) any contravention by any member of the Group or any Director of the Listing Rules
or applicable laws; or
(xiii) any change or prospective change, or a materialization of, any of the risks set out
in the section headed “Risk Factors” in the Prospectus,
which, in any such case individually or in the aggregate, in the sole and absolute opinion
of the Sole Sponsor and 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, whether directly or indirectly, on
the assets, liabilities, business, general affairs, management, prospects,
shareholders’ equity, profits, losses, results of operations, position or condition,
financial or otherwise, or performance of the Company or the Group as a whole;
(ii) has or will or may have a material adverse effect on the success of the Global
Offering or the level of applications under the Hong Kong Public Offering or the
level of indications of interest under the International Offering; or
UNDERWRITING
– 264 –


--- page 275 ---
(iii) makes or will make or may make it impracticable, inadvisable, inexpedient or
incapable for any material part of the Hong Kong Underwriting Agreement, the
Hong Kong Public Offering or the Global Offering to be performed or
implemented as envisaged, or for the Hong Kong Public Offering and/or the Global
Offering to proceed, or to market the Global Offering, or the delivery or
distribution of the Offer Shares on the terms and in the manner contemplated by
the offering documents; or
(iv) has or will or may have the effect of making any part of the Hong Kong
Underwriting Agreement (including underwriting) incapable of performance in
accordance with its terms or 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 the Sole Sponsor and the Sponsor-Overall Coordinator
(for itself and on behalf of the Hong Kong Underwriters) that:
(i) any statement contained in any of the offering documents, 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) (the “ Global
Offering Documents ”) was, when it was issued, or has become untrue, incorrect,
inaccurate in any material respect or misleading; or that any estimate, forecast,
expression of opinion, intention or expectation contained in any such documents,
was, when it was issued, or has become unfair or misleading in any respect or
based on untrue, dishonest or unreasonable assumptions or given in bad faith; or
(ii) 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 or misstatement in any Global Offering Document; or
(iii) any breach of, or any event or circumstance rendering untrue or incorrect or
misleading in any respect, any of the representations, warranties and undertakings
given by the Company or the Single Largest Shareholder in the Hong Kong
Underwriting Agreement or the International Underwriting Agreement; or
(iv) any event, act or omission which gives rise or is likely to give rise to any liability
of any of the indemnifying parties pursuant to the indemnities in the Hong Kong
Underwriting Agreement; or
(v) any breach of any of the obligations or undertakings imposed upon the Company
or any member of the Single Largest Shareholder or any cornerstone investor (as
applicable) to the Hong Kong Underwriting Agreement, the International
Underwriting Agreement or the Cornerstone Investment Agreement(s); or
(vi) there is any change or development involving a prospective change, constituting or
having a material adverse effect; or
(vii) that the chairman of the Board, any Director or any member of senior management
of the Company named in the Prospectus seeks to retire, or is removed from office
or vacating his/her office; or
(viii) any Director or any member of senior management of the Company named in the
Prospectus is being charged with an indictable offence or prohibited by operation
of law or otherwise disqualified from taking part in the management or taking
directorship of a company; or
UNDERWRITING
– 265 –


--- page 276 ---
(ix) the Company withdraws the Prospectus (and/or any other documents used in
connection with the subscription or sale of any of the Offer Shares pursuant to the
Global Offering) or the Global Offering; or
(x) that the approval by the Listing Committee of the listing of, and permission to deal
in, the H Shares in issue and to be issued pursuant to the Global Offering is refused
or not granted, other than subject to customary conditions, on or before the Listing
Date, or if granted, the approval is subsequently withdrawn, cancelled, qualified
(other than by customary conditions), revoked or withheld; or
(xi) any person (other than any of the Sole Sponsor) has withdrawn its 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; or
(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; or
(xiii) any person (other than the Sole Sponsor and the Sponsor-Overall Coordinator) has
withdrawn or sought to withdraw its consent to being named in any of the offering
documents or to the issue of any of the offering documents; or
(xiv) 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; or
(xv) (A) the notice of acceptance of the CSRC filings issued by the CSRC and/or the
results of the CSRC filings published on the website of the CSRC is rejected,
withdrawn, revoked or invalidated; or (B) other than with the prior written consent
of the Sponsor-Overall Coordinator, the issue or requirement to issue by the
Company of a supplement or amendment to the CSRC filings pursuant to the CSRC
rules or upon any requirement or request of the CSRC; or (C) any non-compliance
of the CSRC filings with the CSRC rules or any other applicable laws; or
(xvi) that (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 Agreement(s) 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.
UNDERWRITING
– 266 –


--- page 277 ---
Undertaking to the Stock Exchange pursuant to the Listing Rules
Undertaking by our Company
Pursuant to Rule 10.08 of the Listing Rules, our Company has undertaken to the Stock
Exchange that no further Shares or securities convertible into equity securities of our Company
(whether or not of a class already listed) may be issued or sold or transferred out of treasury or form
the subject of any agreement to such an issue, or sale or transfer out of treasury within six months
from the Listing Date (whether or not such issue of Shares or securities, or sale or transfer of
treasury shares will be completed within six months from the Listing Date), except (a) pursuant to
the Global Offering, or (b) under any of the circumstances provided under Rule 10.08 of the Listing
Rules.
Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertaking by our Company
Pursuant to the Hong Kong Underwriting Agreement, the Company has undertaken to each of
the Sole Sponsor, the Sponsor-Overall Coordinator, the Overall Coordinators, the Joint Global
Coordinators, the CMIs, the Joint Bookrunners, the Joint Lead Managers and the Hong Kong
Underwriters that except pursuant to the Global Offering, at any time after the date of Hong Kong
Underwriting Agreement up to and including the date falling six months after the Listing Date (the
“First Six Month Period” ), the Company will not, without the prior written consent of the Sole
Sponsor and the Sponsor-Overall Coordinator (for itself and on behalf of the Hong Kong
Underwriters) (such consent not to be unreasonably withheld) 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, hypothecate, lend, grant or sell any
option, warrant, contract or right to subscribe for or purchase, grant or purchase any
option, warrant, contract or right to allot, issue or sell, or otherwise transfer or dispose
of or create an encumbrance over, or agree to transfer or dispose of or create an
encumbrance over, either directly or indirectly, conditionally or unconditionally, or
repurchase, any legal or beneficial interest in the share capital or any other securities of
the Company or any interest in any of the foregoing (including, without limitation, any
securities convertible into or exchangeable or exercisable for or that represent the right
to receive, or any warrants or other rights to purchase any share capital or other
securities of the Company, as applicable), or deposit any share capital or other securities
of the Company, as applicable, with a depositary in connection with the issue of
depositary receipts; or
(b) enter into any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership (legal or beneficial) of the H Shares or
any other securities of the Company, or any interest in any of the foregoing (including,
without limitation, any securities convertible into or exchangeable or exercisable for or
that represent the right to receive, or any warrants or other rights to purchase, any H
Shares); or
(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 specified in (a), (b) or (c) or announce any
intention to do so,
UNDERWRITING
– 267 –


--- page 278 ---
in each case, whether any of the foregoing transactions is to be settled by delivery of share
capital or such other securities, in cash or otherwise (whether or not the issue of such share
capital or other securities will be completed within the First Six Month Period). The Company
further agrees 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 securities of the Company.
The Single Largest Shareholder undertakes to each of the Sole Sponsor, the Sponsor-Overall
Coordinator, the Overall Coordinators, the Joint Global Coordinators, the CMIs, the Joint
Bookrunners, the Joint Lead Managers and the Hong Kong Underwriters that he shall procure the
Company to comply with such undertakings.
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 our Company or had any right or option
(whether legally enforceable or not) to subscribe for or purchase, or to nominate persons to
subscribe for or purchase, any H Shares or any securities of our Company.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the H Shares as a result of fulfilling their
respective obligations under the Underwriting Agreements.
The International Offering
International Underwriting Agreement
In connection with the International Offering, our Company and the Single Largest
Shareholder expect to enter into the International Underwriting Agreement with the Sponsor-
Overall Coordinator, the Overall Coordinators and the International Underwriters. Under the
International Underwriting Agreement, the International Underwriters would, subject to certain
conditions set out therein, agree severally but not jointly to procure subscribers for, or themselves
to subscribe for, their respective applicable proportions of the International Offer Shares initially
being offered pursuant to the International Offering. It is expected that the International
Underwriting Agreement may be terminated on similar grounds to the Hong Kong Underwriting
Agreement. Potential investors should note that in the event that the International Underwriting
Agreement is not entered into or terminated, the Global Offering will not proceed. See “Structure
of the Global Offering — The International Offering” in this prospectus.
Commissions and Expenses
The Underwriters and the Capital Market Intermediaries will receive an underwriting
commission of 2.5% of the aggregate Offer Price of all the Offer Shares (the “ Fixed Fee ”), out of
which they will pay any sub-underwriting commissions and other fees.
Our Company may, at our sole and absolute discretion, pay to one or more Underwriters or
the Capital Market Intermediaries an incentive fee of up to 1.25% of the aggregate Offer Price of
all the Offer Shares (the “ Discretionary Fee ”). The ratio of the Fixed Fee and the Discretionary Fee
payable to all Underwriters is therefore approximately 66.7:33.3.
UNDERWRITING
– 268 –


--- page 279 ---
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 commissions and fees, together with the listing fees, SFC transaction levy, the
Stock Exchange trading fee and AFRC transaction levy, legal and other professional fees, printing
and other expenses payable by us relating to the Global Offering are estimated to amount to
approximately HK$78.9 million in total.
Sole Sponsor’s Fee
An amount of US$500,000 is payable by our Company as sponsor fee to the Sole Sponsor.
Indemnity
The Company has agreed to indemnify, among others, 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 or incur, including losses arising from their performance of
their obligations under the Hong Kong Underwriting Agreement and any breach by any of our
Company and the Single Largest Shareholder of the Hong Kong Underwriting Agreement.
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.
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, loan financing, brokerage, funds management, trading, hedging, investing
and other activities for their own account and for the account of others. In the ordinary course of
their various business activities, the Syndicate Members and their respective affiliates may
purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans,
commodities, currencies, credit default swaps and other financial instruments for their own account
and for the accounts of their customers. Such investment and trading activities may involve or relate
to assets, securities, co-investments and/or instruments of or with our Company and/or persons and
entities with relationships with our Company and may also include swaps and other financial
instruments entered into for hedging purposes in connection with our Company’s loans and other
debt.
In relation to the H Shares, the activities of the Syndicate Members and their affiliates could
include acting as agent for buyers and sellers of the H Shares, entering into transactions with those
buyers and sellers in a principal capacity, including as a lender to initial purchasers of the H Shares
(which financing may be secured by the H Shares) in the Global Offering, proprietary trading in the
H Shares, and entering into over the counter or listed derivative transactions or listed or unlisted
securities transactions (including issuing securities such as derivative warrants listed on a stock
exchange) which have as their underlying assets, assets including the H Shares. Such transactions
may be carried out as bilateral agreements or trades with selected counterparties. Those activities
may require hedging activity by those entities involving, directly or indirectly, the buying and
selling of the H Shares, which may have a negative impact on the trading price of the H Shares. All
such activities could occur in Hong Kong and elsewhere in the world and may result in the
Syndicate Members and their affiliates holding long and/or short positions in the H Shares, in
baskets of securities or indices including the H Shares, in units of funds that may purchase the H
Shares, or in derivatives related to any of the foregoing.
UNDERWRITING
– 269 –


--- page 280 ---
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.
No stabilizing manager will be appointed, and it is anticipated that no stabilization activities
will be carried out in relation to the Global Offering. 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 following:
(a) the Syndicate Members must not, in connection with the distribution of the Offer Shares,
effect any transactions (including issuing or entering into any option or other derivative
transactions relating to the Offer Shares), whether in the open market or otherwise, with
a view to stabilizing or maintaining the market price of any of the Offer Shares at levels
other than those which might otherwise prevail in the open market; and
(b) the Syndicate Members must comply with all applicable laws and regulations, including
the market misconduct provisions of the SFO, including the provisions prohibiting
insider dealing, false trading, price rigging and stock market manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time to
time, and expect to provide in the future, investment banking, loan financing and other services to
our Company and each of its 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.
SOLE SPONSOR’S INDEPENDENCE
The Sole Sponsor satisfies the independence criteria set out in Rule 3A.07 of the Listing
Rules.
UNDERWRITING
– 270 –


--- page 281 ---
THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part of the
Global Offering. China International Capital Corporation Hong Kong Securities Limited is the Sole
Sponsor and the Sponsor-Overall Coordinator of the Global Offering.
The Listing of the H Shares on the Stock Exchange is sponsored by the Sole Sponsor. The Sole
Sponsor has made an application on behalf of our Company to the Stock Exchange for the listing
of, and permission to deal in, the H Shares to be issued as mentioned in this prospectus.
21,492,050 Offer Shares (subject to reallocation) will initially be made available under the
Global Offering comprising:
(a) the Hong Kong Public Offering of initially 2,149,250 H Shares (subject to reallocation)
in Hong Kong as described in “— The Hong Kong Public Offering” in this section
below; and
(b) the International Offering of initially 19,342,800 H Shares (subject to reallocation)
outside the United States (including to professional and institutional investors within
Hong Kong) in offshore transactions in reliance on Regulation S, as described in “— The
International Offering” in this section below.
Investors may either:
(a) apply for Hong Kong Offer Shares under the Hong Kong Public Offering; or
(b) 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 5.05% of the enlarged issue share capital of our
Company immediately after completion of the Global Offering.
References in this prospectus to applications, application monies or the procedure for
applications relate solely to the Hong Kong Public Offering.
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares Initially Offered
Subject to reallocation as mentioned below, our Company is initially offering 2,149,250
H Shares (subject to reallocation) for subscription by the public in Hong Kong at the Offer Price,
representing approximately 10.0% of the total number of Offer Shares initially available under the
Global Offering. Subject to reallocation as mentioned below, the number of Offer Shares initially
offered under the Hong Kong Public Offering, subject to any reallocation of Offer Shares between
the International Offering and the Hong Kong Public Offering, will represent approximately 0.51%
of the enlarged issued share capital of our Company immediately following the completion of the
Global Offering.
The Hong Kong Public Offering is open to members of the public in Hong Kong as well as
to institutional and professional investors. Professional investors generally include brokers, dealers,
companies (including fund managers) whose ordinary business involves dealing in shares and other
securities and corporate entities that regularly invest in shares and other securities.
Completion of the Hong Kong Public Offering is subject to the conditions set out in “—
Conditions of the Global Offering” in this section below.
STRUCTURE OF THE GLOBAL OFFERING
– 271 –


--- page 282 ---
Allocation
Allocation of 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 could mean that
some applicants may receive a higher allocation than others who have applied for the same number
of Hong Kong Offer Shares, and those applicants who are not successful in the ballot may not
receive any Hong Kong Offer Shares.
For allocation purposes only, the total number of Hong Kong Offer Shares available under the
Hong Kong Public Offering (after taking into account any reallocation referred to below) will be
divided into two pools: pool A and pool B (with any odd lot being allocated to pool A). Pool A will
initially comprise 1,074,650 Hong Kong Offer Shares and pool B will initially comprise 1,074,600
Hong Kong Offer Shares, both of which are available on a fair basis to successful applicants. 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 price of HK$5 million (excluding the
brokerage, the AFRC transaction levy, the SFC 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 price of more than
HK$5 million (excluding the brokerage, the AFRC transaction levy, the SFC transaction levy and
the Stock Exchange trading fee payable) and up to the total value in pool B.
Investors should be aware that applications in pool A and applications in pool B may receive
different allocation ratios. If any Hong Kong Offer Shares in one (but not both) of the pools are
unsubscribed, such unsubscribed 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 the immediately
preceding 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 and not from both
pools. Multiple or suspected multiple applications under the Hong Kong Public Offering and any
application for more than 1,074,600 Hong Kong Offer Shares (being approximately 50% of the total
number of Offer Shares initially available under the Hong Kong Public Offering) is liable to be
rejected.
Reallocation
The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the discretion
of the Sponsor-Overall Coordinator. Subject to the allocation cap described in the subsequent
paragraph, the Sponsor-Overall Coordinator may in its 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 addition, if the Hong Kong Public Offering is not fully subscribed,
the Sponsor-Overall Coordinator will have the discretion (but shall not be under any obligation) to
reallocate to the International Offering all or any unsubscribed Hong Kong Offer Shares in such
amounts as they deem appropriate.
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 in its sole discretion considers appropriate.
In the event of reallocation of Offer Shares between the International Offering and the Hong
Kong Public Offering in the circumstances where (a) the International Offer Shares are fully
subscribed or oversubscribed and the Hong Kong Offer Shares are fully subscribed or
oversubscribed irrespective of the number of times, or (b) the International Offer Shares are
STRUCTURE OF THE GLOBAL OFFERING
– 272 –


--- page 283 ---
undersubscribed and the Hong Kong Offer Shares are fully subscribed or oversubscribed
irrespective of the number of times, then up to 1,074,550 Offer Shares may be reallocated from the
International Offering to the Hong Kong Public Offering, so that the total number of Offer Shares
available for subscription under the Hong Kong Public Offering will increase up to 3,223,800 Offer
Shares, representing approximately 15% of the number of Offer Shares initially available under the
Global Offering in accordance with Chapter 4.14 of the Guide for New Listing Applicants.
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.
Applications
Each applicant under the Hong Kong Public Offering will be required to give an undertaking
and confirmation in the application submitted by him that he and any person(s) for whose benefit
he is making the application has not applied for or taken up, or indicated an interest for, and will
not apply for or taken up, or indicated an interest for, any International Offer Shares under the
International Offering. Such applicant’s application is liable under the International Offering to be
rejected if such undertaking and/or confirmation is/are breached and/or untrue (as the case may be).
Applicants under the Hong Kong Public Offering are required to pay, on application (subject
to application channel), the Offer Price of HK$76.26 per Offer Share in addition to the brokerage,
the AFRC transaction levy, the SFC transaction levy and the Stock Exchange trading fee payable
on each Offer Share, amounting to a total of HK$3,851.46 for one board lot of 50 Shares. See “How
to Apply for Hong Kong Offer Shares” for further details.
THE INTERNATIONAL OFFERING
Number of International Offer Shares initially offered
The International Offering will consist of an offering of initially 19,342,800 H Shares being
offered by our Company and representing 90.0% of the total number of Offer Shares initially
available under the Global Offering (subject to reallocation). The number of Offer Shares initially
offered under the International Offering, subject to any reallocation of Offer Shares between the
International Offering and the Hong Kong Public Offering, will represent approximately 4.54% of
the total Shares in issue immediately following the completion of the Global Offering.
Allocation
The International Offering will include selective marketing of H Shares to institutional and
professional investors and other investors anticipated to have a sizeable demand for such Offer
Shares in Hong Kong and other jurisdictions outside the United States in reliance on Regulation S.
Professional investors generally include brokers, dealers, companies (including fund managers)
whose ordinary business involves dealing in shares and other securities and corporate entities that
regularly invest in shares and other securities. Allocation of Offer Shares pursuant to the
International Offering will be effected in accordance with the “book-building” process described in
the paragraph headed “— Pricing and Allocation” in this section below 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 buy further H Shares and/or hold or sell its H Shares after the Listing. Such
allocation is intended to result in a distribution of the H Shares on a basis which would lead to the
establishment of a solid professional and institutional shareholder base to the benefit of our
Company and the Shareholders as a whole.
STRUCTURE OF THE GLOBAL OFFERING
– 273 –


--- page 284 ---
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 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 allocation of Offer Shares
under the International Offering.
Reallocation
The total number of Offer Shares to be issued pursuant to the International Offering may
change as a result of the reallocation arrangement described in the paragraph headed “— The Hong
Kong Public Offering — Reallocation” in this section above, and/or any reallocation of
unsubscribed Offer Shares originally included in the Hong Kong Public Offering.
PRICING AND ALLOCATION
The Offer Price will be HK$76.26 per Offer Share, unless otherwise announced, as further
explained below. Applicants under the Hong Kong Public Offering must pay, on application,
the Offer Price of HK$76.26 per Offer Share plus brokerage of 1.0%, AFRC transaction levy
of 0.00015%, SFC transaction levy of 0.0027% and Stock Exchange trading fee of 0.00565%,
amounting to a total of HK$3,851.46 for one board lot of 50 Shares.
The International Underwriters will be soliciting from prospective investors indications
of interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Offering they would be prepared to acquire either at different prices or at a
particular price. This process, known as “book-building”, is expected to continue up to, and to
cease on or about, 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
it deems appropriate, based on the level of interest expressed by prospective institutional,
professional and other investors during the book-building process in respect of the International
Offering, and with the consent of the Company, reduce the number of Offer Shares offered and/or
the Offer Price 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 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
to be published on the websites of our Company and the Stock Exchange at
http://www.epiworld.com.cn/ and www.hkexnews.hk , respectively, notices of the reduction of the
Offer Shares and/or the Offer Price. Supplemental listing prospectus will also be issued by the
Company in the event of a reduction in the number of Offer Shares or the Offer Price. Such
supplemental listing prospectus will also include confirmation or revision, as appropriate, of the
working capital statement and the Global Offering statistics as currently set out in this prospectus,
and any other financial information which may change as a result of any such reduction. The Global
Offering must first be cancelled and subsequently relaunched on FINI pursuant to the supplemental
prospectus. Upon the issue of such a notice and a supplemental prospectus or a new prospectus, the
revised number of Offer Shares and/or the Offer Price will be final and conclusive. In the absence
of any such supplemental or new prospectus so published, the number of Offer Shares will not be
reduced and the Offer Price will be HK$76.26 per Offer Share. Before submitting applications for
the Hong Kong Offer Shares, applicants should have regard to the possibility that any
announcement of a reduction in the number of Offer Shares and/or the Offer Price may not be made
until the last day for lodging applications under the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
– 274 –


--- page 285 ---
If there is any change to the offer size due to change in the number of Offer Shares initially
offered under the Global Offering (other than pursuant to the reallocation mechanism as disclosed
in this prospectus), or if there is any change to the Offer Price as stated in this prospectus, or if our
Company becomes aware that there has been a significant change affecting any matter contained in
this prospectus or a significant new matter has arisen, the inclusion of information in respect of
which would have been required to be in this prospectus if it had arisen before this prospectus was
issued, after the issue of this prospectus and before the commencement of dealings in our H Shares
as prescribed under Rule 11.13 of the Listing Rules, the Company is required to cancel the Global
Offering, issue a supplemental or new prospectus and relaunch the offering on FINI pursuant to the
supplemental or new prospectus.
In the event of a reduction in the number of Offer Shares, the Sponsor-Overall Coordinator
may also at its discretion reallocate the number of Offer Shares to be offered under the Hong Kong
Public Offering and the International Offering, provided that the number of Offer Shares offered
under the Hong Kong Public Offering shall not be less than 10% of the Offer Shares available under
the Global Offering.
The indication of the level of interest in the International Offering, the level of applications
in the Hong Kong Public Offering, the basis of allocation of the Hong Kong Offer Shares and the
results of allocations in the Hong Kong Public Offering are expected to be made available through
a variety of channels in the manner described in the section headed “How to Apply for Hong Kong
Offer Shares — B. Publication of Results” in this prospectus.
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 Thursday, March 26, 2026.
These underwriting arrangements, including the Underwriting Agreements, are summarized in
“Underwriting”.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares will be conditional on:
(a) the Stock Exchange granting approval for the listing of, and permission to deal in, the
H Shares to be issued pursuant to the Global Offering (including the H Shares to be
converted from Unlisted Shares) as mentioned herein on the Main Board of the Stock
Exchange and such approval not subsequently having been revoked prior to the
commencement of trading of the H Shares on the Stock Exchange;
(b) the execution and delivery of the International Underwriting Agreement on or about
Thursday, March 26, 2026; and
(c) 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 respective Underwriting Agreements
(unless and to the extent such conditions are validly waived on or before such dates and times).
STRUCTURE OF THE GLOBAL OFFERING
– 275 –


--- page 286 ---
The consummation of each of the Hong Kong Public Offering and the International Offering
is conditional upon, among other things, the other offering becoming unconditional and not having
been terminated in accordance with its terms.
If the above conditions are not fulfilled or waived prior to the dates and times specified, the
Global Offering will lapse and the Stock Exchange will be notified immediately. Notice of the lapse
of the Hong Kong Public Offering will be published by our Company on the websites of our
Company and the Stock Exchange at http://www.epiworld.com.cn/ and www.hkexnews.hk ,
respectively, on the next day following such lapse. In such a situation, all application monies will
be returned, without interest, on the terms set out in the section headed “How to Apply for Hong
Kong Offer Shares — D. Despatch/Collection of H Share Certificates and Refund of Application
Monies”. In the meantime, all application monies will be held in separate bank account(s) with the
receiving bank or other bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter 155
of the Laws of Hong Kong).
H Share certificates for the Offer Shares will only become valid evidence of title at 8:00 a.m.
on Monday, March 30, 2026, provided that the Global Offering has become unconditional in all
respects at or before that time.
DEALINGS IN THE H SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m.
in Hong Kong on Monday, March 30, 2026, it is expected that dealings in the H Shares on the Hong
Kong Stock Exchange will commence at 9:00 a.m. on Monday, March 30, 2026.
The H Shares will be traded in board lots of 50 Shares each and the stock code of the H Shares
will be 2726.
STRUCTURE OF THE GLOBAL OFFERING
– 276 –


--- page 287 ---
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. We will not provide any printed copies of this prospectus to the public in
relation to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk
under the “ HKEXnews > New Listings > New Listing Information ” section, and our website
at http://www.epiworld.com.cn/ . If you require a printed copy of this prospectus, you may
download and print from the website addresses above.
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.
Set out below are procedures through which you can apply for the Hong Kong Offer
Shares electronically. We will not provide any physical channels to accept any application for
the Hong Kong Offer Shares by the public.
If you are an intermediary , broker or agent , please remind your customers, clients or
principals, as applicable, that this prospectus is available online at the website addresses
above.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you are
applying for:
 are 18 years of age or older; and
 have a Hong Kong address ( for the White Form eIPO service only ).
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the person(s)
for whose benefit you are applying for:
 are an existing Shareholder or close associates; or
 are a Director or a Supervisor or chief executive of our Company or any of his/her close
associates.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 277 –


--- page 288 ---
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 am on Friday, March 20, 2026
and end at 12:00 noon on Wednesday, March 25, 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
www.eipo.com.hk Applicants 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,
March 20, 2026 to 11:30
a.m. on Wednesday,
March 25, 2026. The
latest time for completing
full payment of
application monies will be
12:00 noon on Wednesday,
March 25, 2026.
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118
Y our broker or
custodian who is a
HKSCC Participant
will submit electronic
application
instruction on your
behalf through
HKSCC’s FINI
system in accordance
with your instruction.
Applicants who would not
like to receive a physical
H Share certificate.
Hong Kong Offer Shares
successfully applied for
will be allotted and issued
in the name of HKSCC
Nominees, deposited
directly into CCASS and
credited to your
designated HKSCC
Participant’s stock
account.
Contact your broker or
custodian for the earliest
and latest time for giving
such instructions, as this
may vary by broker or
custodian .
The White Form eIPO service and the HKSCC EIPO channel are facilities subject to
capacity limitations and potential service interruptions and you are advised not to wait until the last
day of the application period to apply for Hong Kong Offer Shares.
For those applying through the White Form eIPO service, once you complete payment in
respect of any application instructions given by you or for your benefit through the White Form
eIPO service to make an application for Hong Kong Offer Shares, an actual application shall be
deemed to have been made. If you are a person for whose benefit the electronic application
instructions are given, you shall be deemed to have declared that only one set of electronic
application instructions has been given for your benefit. If you are an agent for another person,
you shall be deemed to have declared that you have only given one set of electronic application
instructions for the benefit of the person for whom you are an agent and that you are duly
authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under the White Form eIPO
service more than once and obtaining different application reference numbers without effecting full
payment in respect of a particular reference number will not constitute an actual application.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 278 –


--- page 289 ---
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
 Identity document’s issuing country or
jurisdiction
 Identity document type, with order of
priority:
i. HKID card; or
ii. National identification document;
or
iii. Passport; and
 Identity document number
 Full name(s)
2 as shown on your
identity document
 Identity document’s issuing country or
jurisdiction
 Identity document type, with order of
priority:
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration certificate;
or
iv. Other equivalent document; and
 Identity document number
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 279 –


--- page 290 ---
Notes:
1. If you are applying through the White Form eIPO service, you are required to provide a valid e-mail address,
a contact telephone number and a Hong Kong address. Y ou are also required to declare that the identity
information provided by you follows the requirements as described in Note 2 below. In particular, where you
cannot provide a HKID number, you must confirm that you do not hold a HKID card.
2. The applicant’s full name as shown on their identity document must be used and the surname, given name,
middle and other names (if any) must be input in the same order as shown on the identity document. If an
applicant’s identity document contains both an English and Chinese name, both English and Chinese names
must be used. Otherwise, either English or Chinese names will be accepted. The order of priority of the
applicant’s identity document type must be strictly followed and where an individual applicant has a valid
HKID card (including both Hong Kong Residents and Hong Kong Permanent Residents), the HKID number
must be used when making an application to subscribe for 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.
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity document),
the identity document’s issuing country or jurisdiction, the identity document type; and (ii), the identity
document number, for each of the beneficial owners or, in the case(s) of joint beneficial owners, for each joint
beneficial owner. If you do not include this information, the application will be treated as being made for your
benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated as
being for your benefit and you should provide the required information in your application as stated above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any other
stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which carries
no right to participate beyond a specified amount in a distribution of either profits or capital).
For those applying through HKSCC EIPO channel, and making an application under a power
of attorney, we and the 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 280 –


--- page 291 ---
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: 50 H Shares
Permitted number of Hong Kong
Offer Shares for application and
amount payable on
application/successful allotment /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 Offer Price is HK$76.26 per 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 Public
Offer Shares you applied for.
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
Shares you have selected. Y ou must pay the
respective maximum amount payable on
application in full upon application for Hong
Kong Offer Shares.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 281 –


--- page 292 ---
Epiworld International Co., Ltd.
(HK$76.26 per Hong Kong Offer Share)
NUMBER OF HONG KONG OFFER SHARES THAT MAY BE APPLIED FOR AND
PAYMENTS
No.
of Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No.
of Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No.
of Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No.
of Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
50 3,851.46 700 53,920.36 5,000 385,145.41 200,000 15,405,816.42
100 7,702.91 800 61,623.27 6,000 462,174.49 300,000 23,108,724.64
150 11,554.37 900 69,326.17 7,000 539,203.57 400,000 30,811,632.85
200 15,405.81 1,000 77,029.08 8,000 616,232.66 500,000 38,514,541.06
250 19,257.27 1,500 115,543.62 9,000 693,261.74 600,000 46,217,449.25
300 23,108.72 2,000 154,058.17 10,000 770,290.82 700,000 53,920,357.46
350 26,960.18 2,500 192,572.71 20,000 1,540,581.64 800,000 61,623,265.68
400 30,811.63 3,000 231,087.25 30,000 2,310,872.46 900,000 69,326,173.89
450 34,663.09 3,500 269,601.79 40,000 3,081,163.29 1,074,600
(1) 82,775,451.62
500 38,514.54 4,000 308,116.33 50,000 3,851,454.10
600 46,217.46 4,500 346,630.87 100,000 7,702,908.21
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as
defined in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy are paid to the Stock Exchange (in the case of the SFC transaction levy, collected by the Stock
Exchange on behalf of the SFC; and in the case of the AFRC transaction levy, collected by the Stock Exchange
on behalf of the AFRC).
5. Multiple Applications Prohibited
Y ou or your joint applicant(s) shall not make more than one application for your own benefit,
except where you are a nominee and provide the information of the underlying investor in your
application as required under the paragraph headed “— A. Application for Hong Kong Offer Shares
— 3. Information Required to Apply” in this section. If you are suspected of submitting or cause
to submit more than one application, all of your applications will be rejected.
Multiple applications made either through (i) the White Form eIPO service, (ii) HKSCC
EIPO channel, or (iii) both channels concurrently are prohibited and will be rejected. If you have
made an application through the White Form eIPO service or HKSCC EIPO channel, you or the
person(s) for whose benefit you have made the application shall not apply for any International
Offer Shares.
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 agent, 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;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 282 –


--- page 293 ---
II. confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the White Form
eIPO service (or as the case may be, the agreement you entered into with your broker
or custodian), and agree to be bound by them;
III. (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong Offer
Shares;
IV . confirm that you are aware of the restrictions on offers and sales of shares set out in this
prospectus and they do not apply to you, or the person(s) for whose benefit you have
made the application;
V . confirm that you have read this prospectus and any supplement to it and have relied only
on the information and representations contained therein in making your application (or
as the case may be, causing your application to be made) and will not rely on any other
information or representations;
VI. agree that our Company, the Sole Sponsor, the Sponsor-Overall Coordinator, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead
Managers, the Underwriters, the Capital Market Intermediaries, any of their respective
directors, supervisors, officers, employees, partners, agents, advisers and any other
parties involved in the Global Offering (the “ Relevant Persons ”), the H Share Registrar
and HKSCC will not be liable for any information and representations not in this
prospectus and any supplement to it;
VII. agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit you
have made the application to us, the Relevant Persons, the H Share Registrar, HKSCC,
HKSCC Nominees, the Stock Exchange, the SFC and any other statutory regulatory or
governmental bodies or otherwise as required by laws, rules or regulations, for the
purposes under the paragraph headed “— G. Personal Data — 3. Purposes and 4.
Transfer of personal data” in this section;
VIII. agree (without prejudice to any other rights which you may have once your application
(or as the case may be, HKSCC Nominees’ application) has been accepted) that you will
not rescind it because of an innocent misrepresentation;
IX. agree that subject to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, any application made by you or HKSCC Nominees on your
behalf cannot be revoked once it is accepted, which will be evidenced by the notification
of the result of the ballot by the H Share Registrar by way of publication of the results
at the time and in the manner as specified in the paragraph headed “— B. Publication
of Results” in this section;
X. confirm that you are aware of the situations specified in the paragraph headed “— C.
Circumstances in which you will not be allocated Hong Kong Offer Shares” in this
section;
XI. agree that your application or HKSCC Nominees’ application, any acceptance of it and
the resulting contract will be governed by and construed in accordance with the laws of
Hong Kong;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 283 –


--- page 294 ---
XII. agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any place
outside Hong Kong that apply to your application and that neither we nor the Relevant
Persons will breach any law inside and/or outside Hong Kong as a result of the
acceptance of your offer to purchase, or any action arising from your rights and
obligations under the terms and conditions contained in this prospectus;
XIII. confirm that (a) your application or HKSCC Nominees’ application on your behalf is not
financed directly or indirectly by our Company, any of the directors, chief executives,
substantial Shareholder(s) or existing shareholder(s) of our Company or any of their
respective close associates; and (b) you are not accustomed or will not be accustomed
to taking instructions from our Company, any of the directors, chief executives,
substantial shareholder(s) or existing shareholder(s) of our Company or any of its
subsidiaries or any of their respective close associates in relation to the acquisition,
disposal, voting or other disposition of the H Shares registered in your name or
otherwise held by you;
XIV . warrant that the information you have provided is true and accurate;
XV . confirm that you understand that we and the 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 H Share
Registrar or by any one as your agent or by any other person; and
XIX. (if you are making the application as an agent for the benefit of another person) warrant
that (1) no other application has been or will be made by you as agent for or for the
benefit of that person or by that person or by any other person as agent for that person
by giving electronic application instructions to HKSCC and (2) you have due authority
to give electronic application instructions on behalf of that other person as its agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 284 –


--- page 295 ---
B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares through:
Platform Date/Time
Applying through White Form eIPO service or HKSCC EIPO channel:
Website /H1118/H1118/H1118/H1118/H1118The designated results of allocation at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ) with a
“search by ID” function.
24 hours, from 11:00 p.m.
Friday, March 27, 2026
to 12:00 midnight on
Thursday, April 2, 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 provider at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ).
The Stock Exchange’s website at
www.hkexnews.hk and our website at
http://www.epiworld.com.cn/ which will
provide links to the above mentioned
websites of the H Share Registrar.
no later than 11:00 p.m. on
Friday, March 27, 2026
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., on Monday,
March 30, 2026,
Tuesday, March 31,
2026, Wednesday, April
1, 2026 and Thursday,
April 2, 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 26, 2026 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Thursday, March 26, 2026 (Hong Kong time) on a 24-hour basis and should report any
discrepancies on allotments to HKSCC as soon as practicable.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 285 –


--- page 296 ---
Allocation Announcement
We expect to announce the results of 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 http://www.epiworld.com.cn/ by no later than 11:00 p.m. on Friday, March 27, 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 H Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that longer
period within three weeks of the closing date of the application lists.
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to the
paragraph headed “— A. Applications for Hong Kong Offer Shares — 5. Multiple
Applications Prohibited ” in this section on what constitutes multiple applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Sponsor-Overall Coordinator believe that by accepting your application, it or
we would violate applicable securities or other laws, rules or regulations.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 286 –


--- page 297 ---
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 International Offering. Hong Kong Offer Shares
applied for by you through the broker or custodian may be affected to the extent of the settlement
failure. In the extreme case, you will not be allocated any Hong Kong Offer Shares due to the money
settlement failure by such HKSCC Participant. None of us, the Relevant Persons, the H Share
Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are not allocated to you due
to the money settlement failure.
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
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
30, 2026, (Hong Kong time), provided that the Global Offer has become unconditional and the right
of termination described in the section headed “Underwriting” has not been exercised. Investors
who trade Shares prior to the receipt of H Share certificates or the H Share certificates becoming
valid do so entirely at their own risk.
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
For H Share certificates of
equal or over 1,000,000
Hong Kong Offer Shares
issued under your own
name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/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
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 287 –


--- page 298 ---
White Form eIPO service HKSCC EIPO channel
Time: from 9:00 a.m. to 1:00
p.m. on Monday, March 30,
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
For H Share certificates of
less than 1,000,000 Hong
Kong Offer Shares issued
under your own name /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 27,
2026
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Monday, March 30, 2026 Subject to the arrangement
between you and your
broker or custodian
Responsible party /H1118/H1118/H1118/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/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
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 288 –


--- page 299 ---
Except in the event of any Bad Weather Signals (as defined below) in force in Hong Kong on
the business day before the Listing Date rendering it impossible for the relevant share certificates
to be despatched to HKSCC in a timely manner, our Company shall procure the H Share Registrar
to arrange for delivery of the supporting documents and share certificates in accordance with the
contingency arrangements as agreed between them. Y ou may refer to “— E. Severe Weather
Arrangements” in this section.
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Wednesday, March 25, 2026 if, there is/are:
 a No. 8 typhoon warning signal or above;
 a black rainstorm warning signal; 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 25,
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
http://www.epiworld.com.cn/ of the revised timetable.
If a Bad Weather Signal is hoisted on Friday, March 27, 2026, the H Share Registrar will make
appropriate arrangements for the delivery of the share certificates to the CCASS Depository’s
service counter so that they would be available for trading on Monday, March 30, 2026.
If a Bad Weather Signal is hoisted on Friday, March 27, 2026:
 for physical H share certificates of less than 1,000,000 offer shares issued under your
own name, despatch will be made by ordinary post when the post office re-opens after
the Bad Weather Signal is lowered or cancelled (e.g. in the afternoon of Friday, March
27, 2026 or on Monday, March 30, 2026).
If a Bad Weather Signal is hoisted on Monday, March 30, 2026:
 for physical H share certificates of equal or over 1,000,000 offer shares issued under
your own name, you may pick them up from the H Share Registrar’s office after the Bad
Weather Signal is lowered or cancelled (e.g. in the afternoon of Monday, March 30, 2026
or on Tuesday, March 31, 2026).
Prospective investors should be aware that if they choose to receive physical share
certificates issued in their own name, there may be a delay in receiving the share certificates.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 289 –


--- page 300 ---
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 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.
Y ou should seek the advice of your broker or other professional adviser 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 our 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 our 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 our Company or its agents and the H Share Registrar is accurate and
up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer Shares into
or out of their names or in procuring the services of the H Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of our
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 our Company
and the H Share Registrar immediately of any inaccuracies in the personal data supplied.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 290 –


--- page 301 ---
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 our Company;
 verifying identities of applicants for and holders of the H Shares and identifying any
duplicate applications for the H Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the H Shares, such as dividends, rights
issues, bonus issues, etc.;
 distributing communications from our Group;
 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 our
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the H Shares and/or regulators and/or any other purposes to which applicants
and holders of the H Shares may from time to time agree.
4. Transfer of personal data
Personal data held by our Company and the H Share Registrar relating to the applicants for
and holders of Hong Kong Offer Shares will be kept confidential but our 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:
 our 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 our Company or the
H Share Registrar in connection with their respective business operation;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 291 –


--- page 302 ---
 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
Our 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 our
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. Our 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 our 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 our Company secretary, or the H Share Registrar for the attention of the
privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 292 –


--- page 303 ---
The following is the text of a report set out on pages I-1 to I-73, received from the
Company’ s reporting accountants, BDO Limited, Certified Public Accountants, Hong Kong, for
the purpose of incorporation in the Prospectus. It is prepared and addressed to the directors
of the Company and to the Sole Sponsor pursuant to the requirements of 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.
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF EPIWORLD INTERNATIONAL CO., LTD. AND CHINA
INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LIMITED
INTRODUCTION
We report on the historical financial information of Epiworld International Co., Ltd. (the
“Company ”) and its subsidiaries (together the “ Group ”) set out on pages I-4 to I-73, which
comprises the consolidated statements of financial position as at December 31, 2022, 2023,
2024 and September 30, 2025 and the statements of financial position of the Company as at
December 31, 2022, 2023, 2024 and September 30, 2025, 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 of the Group for each of the years ended December
31, 2022, 2023 and 2024 and the nine months ended September 30, 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-73 forms an integral part of this report, which has been prepared for
inclusion in the prospectus of the Company dated March 20, 2026 (the “ Prospectus ”) in
connection with the initial listing of shares of the Company on the Main Board of The Stock
Exchange of Hong Kong Limited (the “ Stock Exchange ”).
DIRECTORS’ RESPONSIBILITY FOR THE HISTORICAL FINANCIAL
INFORMATION
The directors of the Company are responsible for the preparation of the Historical
Financial Information that gives a true and fair view in accordance with the basis of preparation
set out in Note 2 to the Historical Financial Information, and for such internal control as the
directors determine is necessary to enable the preparation of Historical Financial Information
that is free from material misstatement, whether due to fraud or error.
APPENDIX I ACCOUNTANT’S REPORT
– I-1 –


--- page 304 ---
REPORTING ACCOUNTANTS’ RESPONSIBILITY
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 “Accountants’ Reports on Historical
Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified
Public Accountants (“ HKICPA ”). This standard requires that we comply with ethical standards
and plan and perform our work to obtain reasonable assurance about whether the Historical
Financial Information is free from material misstatement.
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgment, 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 Historical Financial Information that gives a true and fair view in accordance
with the basis of preparation set out in Note 2 to the Historical Financial Information in order
to design procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Our work also
included evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of
the Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
OPINION
In our opinion, the Historical Financial Information gives, for the purposes of the
accountants’ report, a true and fair view of the Group’s financial position as at December 31,
2022, 2023, 2024 and September 30, 2025, the Company’s financial position as at December
31, 2022, 2023, 2024 and September 30, 2025, and of the Group’s financial performance and
cash flows for the Track Record Period in accordance with the basis of preparation set out in
Note 2 to the Historical Financial Information.
REVIEW OF STUB PERIOD COMPARATIVE HISTORICAL FINANCIAL
INFORMATION
We have reviewed the stub period comparative historical financial information of the
Group which comprises 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 September 30, 2024 and other explanatory information
(together the “Stub Period Comparative Historical Financial Information” ). The directors
of the Company are responsible for the preparation and presentation of the Stub Period
Comparative Historical Financial Information in accordance with the basis of preparation set
APPENDIX I ACCOUNTANT’S REPORT
– I-2 –


--- page 305 ---
out in Note 2 to the Historical Financial Information. Our responsibility is to express a
conclusion on the Stub Period Comparative Historical Financial Information based on our
review. We conducted our review in accordance with Hong Kong Standard on Review
Engagements 2410 “Review of Interim Financial Information Performed by the Independent
Auditor of the Entity” issued by the HKICPA. A review consists of making inquiries, primarily
of persons responsible for financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an audit conducted in
accordance with Hong Kong Standards on Auditing and consequently does not enable us to
obtain assurance that we would become aware of all significant matters that might be identified
in an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing has
come to our attention that causes us to believe that the Stub Period Comparative Historical
Financial Information, for the purposes of the accountants’ report, is not prepared, in all
material respects, in accordance with the basis of preparation set out in Note 2 to the Historical
Financial Information.
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 and the Stub Period Comparative
Historical Financial Information, no adjustments to the Underlying Financial Statements as
defined on page I-4 have been made.
Dividends
We refer to Note 12 to the Historical Financial Information which contains information
about dividends declared and paid by the Company in respect of the Track Record Period.
BDO Limited
Certified Public Accountants
Lee, Alfred
Practising Certificate No. P04960
Hong Kong
March 20, 2026
APPENDIX I ACCOUNTANT’S REPORT
– I-3 –


--- page 306 ---
HISTORICAL FINANCIAL INFORMATION OF THE GROUP
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountant’s report.
The consolidated financial statements of the Group for the Track Record Period, on which
the Historical Financial Information is based, have been prepared in accordance with the
accounting policies which conform with International Financial Reporting Standards and
International Accounting Standards as issued by the International Accounting Standards Board
(“IASB ”) and Interpretations (collectively “ IFRS Accounting Standards ”) and were audited
by BDO Limited in accordance with Hong Kong Standards on Auditing issued by the HKICPA
(the “ Underlying Financial Statements ”).
The Historical Financial Information is presented in Renminbi (“ RMB”) and all values
are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANT’S REPORT
– I-4 –


--- page 307 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Y ear ended December 31,
Nine months
ended September 30,
Notes 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/H11187 440,691 1,142,502 974,316 808,250 535,063
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(243,754) (697,103) (642,007) (522,542) (397,982)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118196,937 445,399 332,309 285,708 137,081
Other income and other
gains and losses, net /H1118/H1118/H11188 21,534 63,451 168,402 107,583 132,621
Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,866) (48,776) (5,513) (6,770) (8,224)
Administrative and other
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(48,136) (162,749) (175,575) (147,142) (155,126)
Research and development
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(43,829) (101,786) (79,992) (62,096) (50,374)
(Impairment loss)/reversal
of impairment loss on
financial assets, net /H1118/H1118/H1118/H111810 (901) 149 (1,253) (200) (2,116)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 (20,281) (32,535) (30,197) (21,595) (9,636)
PROFIT BEFORE TAX /H111810 103,458 163,153 208,181 155,488 44,226
Income tax credit/
(expense) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 24,085 (55,648) (43,114) (37,075) (23,081)
PROFIT AND TOTAL
COMPREHENSIVE
INCOME FOR THE
YEAR/PERIOD /H1118/H1118/H1118/H1118/H1118/H1118127,543 107,505 165,067 118,413 21,145
Earnings per share
(RMB) attributable to
owners of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Basic and diluted /H1118/H1118/H1118/H1118/H1118/H1118/H111813 0.40 0.32 0.43 0.31 0.05
APPENDIX I ACCOUNTANT’S REPORT
– I-5 –


--- page 308 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at December 31,
As at
September 30,
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
ASSETS AND LIABILITIES
Non-current assets
Property, plant and equipment /H1118/H1118/H111815 873,818 2,037,231 2,047,566 1,943,010
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 343 371 77 110
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 76 918 2,075 1,818
Prepayments for acquisition of
property, plant and equipment /H1118 35,982 1,936 1,582 8,745
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 20,122 – – –
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 24,085 – 49 2,206
Other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H11181,964 2,767 2,930 2,279
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118956,390 2,043,223 2,054,279 1,958,168
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 91,404 351,086 247,640 270,945
Trade and bills receivables /H1118/H1118/H1118/H1118/H111821 106,796 78,666 129,645 268,964
Prepayments, deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 15,527 7,992 7,468 21,169
V alue-added tax (“V A T”)
recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,564 22,488 33,259 14,591
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 500 20,622 – –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H111823 274,417 549,521 2,030,653 1,832,787
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118497,208 1,030,375 2,448,665 2,408,456
Current liabilities
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H111824 54,863 32,912 71,883 154,964
Other payables and accruals /H1118/H1118/H1118/H111825 182,077 191,731 145,089 109,489
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 5,757 3,730 6,795 736
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 344 261 67 66
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 142,405 315,181 303,536 65,025
Derivative financial instruments /H111830 – – – 2,140
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 213,637 16,673 18,007 –
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 59,765 36,541
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118599,083 560,488 605,142 368,961
Net current (liabilities)/assets /H1118/H1118 (101,875) 469,887 1,843,523 2,039,495
TOTAL ASSETS LESS
CURRENT LIABILITIES /H1118/H1118/H1118
854,515 2,513,110 3,897,802 3,997,663
Non-current liabilities
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 170,783 811,811 808,594 704,513
Deferred revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 100,230 205,569 260,764 312,029
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 – 31,563 14,960 3,657
Total non-current liabilities /H1118/H1118/H1118271,013 1,048,943 1,084,318 1,020,199
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118583,502 1,464,167 2,813,484 2,977,464
EQUITY
Equity attributable to owners
of the Company
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 214,845 388,192 404,093 404,093
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 368,657 1,075,975 2,409,391 2,573,371
TOTAL EQUITY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118583,502 1,464,167 2,813,484 2,977,464
APPENDIX I ACCOUNTANT’S REPORT
– I-6 –


--- page 309 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at December 31,
As at
September 30,
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
ASSETS AND LIABILITIES
Non-current assets
Property, plant and equipment /H1118/H1118/H111815 873,818 2,037,231 1,837,431 1,750,561
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 343 371 – –
Investments in subsidiaries /H1118/H1118/H1118/H1118/H111817 – – 50,000 50,000
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 76 918 2,075 1,818
Prepayments for acquisition of
property, plant and equipment /H1118 35,982 1,936 1,582 8,745
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 20,122 – – –
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 24,085 – – –
Other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H11181,964 2,767 2,930 2,279
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118956,390 2,043,223 1,894,018 1,813,403
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 91,404 351,086 229,534 203,628
Trade and bills receivables /H1118/H1118/H1118/H1118/H111821 106,796 78,666 64,568 67,418
Prepayments, deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 15,527 7,992 7,354 21,059
V A T recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,564 22,488 2,031 –
Amount due from a subsidiary /H1118/H111834 – – 210,709 421,229
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 500 20,622 – –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H111823 274,417 549,521 2,022,075 1,705,055
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118497,208 1,030,375 2,536,271 2,418,389
Current liabilities
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H111824 54,863 32,912 36,870 30,688
Other payables and accruals /H1118/H1118/H1118/H111825 182,077 191,731 142,919 107,621
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 5,757 3,730 6,371 23
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 344 261 – –
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 142,405 315,181 267,548 65,025
Derivative financial instruments /H1118 ––– 4 7 0
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 213,637 16,673 18,007 –
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 59,765 33,455
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118599,083 560,488 531,480 237,282
Net current (liabilities)/assets /H1118/H1118 (101,875) 469,887 2,004,791 2,181,107
TOTAL ASSETS LESS
CURRENT LIABILITIES /H1118/H1118/H1118854,515 2,513,110 3,898,809 3,994,510
Non-current liabilities
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 170,783 811,811 808,594 704,513
Deferred revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 100,230 205,569 260,764 312,029
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 – 31,563 14,960 3,673
Total non-current liabilities /H1118/H1118/H1118271,013 1,048,943 1,084,318 1,020,215
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118583,502 1,464,167 2,814,491 2,974,295
EQUITY
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 214,845 388,192 404,093 404,093
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 368,657 1,075,975 2,410,398 2,570,202
TOTAL EQUITY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118583,502 1,464,167 2,814,491 2,974,295
APPENDIX I ACCOUNTANT’S REPORT
– I-7 –


--- page 310 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to owners of the Company
Share
capital
Capital
reserve*
Other
reserve*
Statutory
reserve*
Share-based
payment
reserve*
(Accumulated
losses)/
retained
earnings* Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 32) (Note 33(a)) (Note 33(e)) (Note 33(b)) (Note 33(d)) (Note 33(c))
Balance at January 1,
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210,727 291,368 (121,133) – – (205,880) 175,082
Profit and total
comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 127,543 127,543
Shares issued
(Note 32(a)) /H1118/H1118/H1118/H1118/H1118/H11184,118 248,18 4––– – 252,302
Transfer to statutory
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,417 – (1,417) –
Recognition of
equity-settled
share-based payments
(Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 28,57 5––– – 28,575
Balance at December 31,
2022 and January 1,
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118214,845 568,127 (121,133) 1,417 – (79,754) 583,502
Profit and total
comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 107,505 107,505
Shares issued
(Note 32(b)) /H1118/H1118/H1118/H1118/H1118/H11183,672 276,32 8––– – 280,000
Issue of restricted share
units (“RSUs”)
(Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,59 9–––– – 25,599
Capitalization issue
(Note 32(c)) /H1118/H1118/H1118/H1118/H1118/H1118144,076 (144,076) – – – – –
Conversion into a joint
stock limited liability
company (Note 32(c)) /H1118 – 90,060 – (1,417) – (88,643) –
Transfer of statutory
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 5,168 – (5,168) –
Derecognition due to
termination of
redemption rights
(Note 31) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 211,351 – – – 211,351
Recognition of
equity-settled
share-based payments
(Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 156,974 – – 99,236 – 256,210
Balance at December 31,
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118388,192 947,413 90,218 5,168 99,236 (66,060) 1,464,167
* These reserve accounts comprise the consolidated reserves as at December 31, 2022, 2023, 2024 and as at
September 30, 2025 in the consolidated statements of financial position.
APPENDIX I ACCOUNTANT’S REPORT
– I-8 –


--- page 311 ---
Attributable to owners of the Company
Share
capital
Capital
reserve*
Other
reserve*
Statutory
reserve*
Share-based
payment
reserve*
(Accumulated
losses)/
retained
earnings* Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 32) (Note 33(a)) (Note 33(e)) (Note 33(b)) (Note 33(d)) (Note 33(c))
Balance at January 1,
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118388,192 947,413 90,218 5,168 99,236 (66,060) 1,464,167
Profit and total
comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 165,067 165,067
Shares issued
(Note 32(d)) /H1118/H1118/H1118/H1118/H1118/H111815,901 1,014,10 0––– – 1,030,001
Transfer to statutory
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 16,173 – (16,173) –
Recognition of equity-
settled share-based
payments
(Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 154,249 – 154,249
Balance at December 31,
2024 and January 1,
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118404,093 1,961,513 90,218 21,341 253,485 82,834 2,813,484
Profit and total
comprehensive income
for the period /H1118/H1118/H1118/H1118/H1118/H1118––––– 21,145 21,145
Transfer to statutory
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,158 – (2,158) –
Derecognition due to
termination of
redemption rights
(Note 31) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 18,351 – – – 18,351
Recognition of
equity-settled
share-based payments
(Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 124,484 – 124,484
Balance at
September 30, 2025 /H1118/H1118404,093 1,961,513 108,569 23,499 377,969 101,821 2,977,464
Balance at January 1,
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118388,192 947,413 90,218 5,168 99,236 (66,060) 1,464,167
Profit and total
comprehensive income
for the period /H1118/H1118/H1118/H1118/H1118/H1118– –––– 1 18,413 118,413
Transfer to statutory
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 11,943 – (11,943) –
Recognition of
equity-settled
share-based payments
(Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 141,163 – 141,163
Balance at
September 30, 2024
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118388,192 947,413 90,218 17,111 240,399 40,410 1,723,743
* These reserve accounts comprise the consolidated reserves as at December 31, 2022, 2023, 2024 and as at
September 30, 2025 in the consolidated statements of financial position.
APPENDIX I ACCOUNTANT’S REPORT
– I-9 –


--- page 312 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
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)
Cash flows from operating
activities
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,458 163,153 208,181 155,488 44,226
Adjustments for:
Depreciation of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,592 95,923 144,715 103,186 128,933
Depreciation of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486 719 276 243 99
Amortization of intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856 350 743 492 837
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,281 32,535 30,197 21,595 9,636
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,480) (12,103) (39,950) (26,363) (48,889)
(Reversal of)/write-down of
inventories to net realizable
value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(111) 4,552 1,070 (1,518) 2,360
(Gain)/loss on disposal of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(26) (3,487) (20) (20) 5
Fair value loss on derivative
financial instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 2,140
Loss on lease termination /H1118/H1118/H1118/H1118/H1118––11–
Impairment loss/(reversal of
impairment loss) on financial
assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118901 (149) 1,253 200 2,116
Equity-settled share-based
payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,575 256,210 154,249 141,163 124,484
Operating profit before
working capital changes /H1118/H1118/H1118/H1118180,732 537,703 500,715 394,467 265,947
(Increase)/decrease in
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(40,184) (264,234) 102,376 86,153 (25,665)
(Increase)/decrease in trade and
bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(66,749) 28,280 (52,232) (87,637) (141,423)
(Increase)/decrease in
prepayments, deposits and
other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(43,094) (63,702) 49,962 70,645 (13,062)
Decrease/(increase) in V A T
recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,250 (13,924) (10,771) (11,810) 18,668
Increase/(decrease) in trade and
bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,076 (21,951) 38,971 91,778 83,081
APPENDIX I ACCOUNTANT’S REPORT
– I-10 –


--- page 313 ---
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)
Increase/(decrease) in other
payables and accruals /H1118/H1118/H1118/H1118/H1118/H111844,629 109,691 (46,643) (56,974) 3,254
Increase/(decrease) in contract
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,911 (2,027) 3,065 6,338 (6,059)
Increase/(decrease) in deferred
revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,414 105,339 55,195 (22,029) 51,265
Cash from operation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118169,985 415,175 640,638 470,931 236,006
Income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (59,765)
Net cash from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118169,985 415,175 640,638 470,931 176,241
Cash flows from investing
activities
Purchase of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(533,701) (1,157,361) (204,695) (191,151) (69,806)
Proceeds from disposal of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118400 5,992 1,691 – 35
Purchase of intangible assets /H1118/H1118 – (1,192) (1,900) (373) (580)
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,480 12,103 39,950 26,363 48,889
Withdrawal of term deposits /H1118/H1118/H111824,551 – 20,622 20,622 –
Net cash used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(505,270) (1,140,458) (144,332) (144,539) (21,462)
Cash flows from financing
activities
Proceeds from bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118295,151 1,021,745 744,826 595,350 60,730
Proceed from a shareholder /H1118/H1118/H1118100,00 0––––
Repayments of bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(83,286) (207,941) (759,688) (284,198) (403,322)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,600) (18,168) (30,135) (21,410) (9,919)
Repayments of principal
portion of lease liabilities /H1118/H1118/H1118(486) (830) (176) (176) (133)
Repayments of interest portion
of lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9) (18) (2) (2) (1)
Proceeds from shares issued /H1118/H1118/H1118152,302 205,599 1,030,001 – –
Net cash generated from/(used
in) financing activities /H1118/H1118/H1118/H1118/H1118459,072 1,000,387 984,826 289,564 (352,645)
APPENDIX I ACCOUNTANT’S REPORT
– I-11 –


--- page 314 ---
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 increase/(decrease) in
cash and cash equivalents /H1118/H1118123,787 275,104 1,481,132 615,956 (197,866)
Cash and cash equivalents at
the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118150,630 274,417 549,521 549,521 2,030,653
Cash and cash equivalents at
the end of the year/period,
representing cash and bank
balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118274,417 549,521 2,030,653 1,165,477 1,832,787
APPENDIX I ACCOUNTANT’S REPORT
– I-12 –


--- page 315 ---
NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. GENERAL INFORMATION
Epiworld International Co., Ltd. (the “ Company ”) is a limited liability company incorporated in the People’s
Republic of China (the “ PRC”) on March 31, 2011. The registered office address and principal place of business of
the Company is located at No. 198-1 Shitou Dong’er Road., Tongxiang High-tech Park, Xiamen Torch Development
Zone for High Technology Industries, Xiamen 361101, Fujian, the PRC.
The Company and its subsidiaries (collectively referred as the “ Group ”) are principally engaged in the
manufacturing and sale of silicon carbide (“SiC”) epitaxial wafers under Turnkey service and provision of processing
services for SiC epitaxial wafers under Consign service in the PRC.
Dr. Zhao Jianhui (ሾ) is the largest shareholder of the Company.
Particulars of the Company’s subsidiaries at the date of this report are as follows:
Name of subsidiaries Note
Date and
place of
incorporation/
establishment
Place of
operation
Issued and fully paid
capital/registered
capital
Percentage of equity
attributable to the
Company
Principal
activities
Direct Indirect
Epiworld
International
Material Co.,
Ltd. (“ Epiworld
Material ”)* ᖍ˂
ࣘ
(ژ)ʮ̡
1 May 31,
2024, the
PRC
The PRC Registered
capital of
RMB50,000,000
100.00% – Engaged in
production
process
and sales
of silicon
carbide
(4H-SiC)
epitaxial
wafers
Apexiv
International
Pte. Ltd. /H1118/H1118/H1118/H1118/H1118/H1118
2 June 10,
2025,
Singapore
Singapore Registered
capital of
Singapore
dollar (“S$”)
10,000
100.00% – Inactive
Epicenter Sdn.
Bhd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2 June 23,
2025,
Malaysia
Malaysia Registered
capital of
S$10,000,000
– 100.00% Inactive
(1) The statutory financial statements for the year ended December 31, 2024 were audited by BDO China Shu Lun
Pan Certified Public Accountants LLP in the PRC. No statutory financial statements have been prepared for
this entity for the nine months ended September 30, 2025.
(2) No audited statutory financial statements were prepared for these entities during the Track Record Period.
(3) The subsidiaries had not issued any debt securities for the year ended December 31, 2024 and for the nine
months ended September 30, 2025.
* The English translation of terms or names in Chinese which are marked with “*” is for identification purposes
only. In the event of any inconsistency, the Chinese terms or names shall prevail.
For the purpose of the Historical Financial Information of this report, the directors of the Company have
prepared the Underlying Financial Statements in accordance with the basis of preparation set out in Note 2 below and
accounting policies set out in Note 4 below which conform with IFRS Accounting Standards.
The Historical Financial Information has been prepared from the Underlying Financial Statements, with no
adjustments made thereon.
APPENDIX I ACCOUNTANT’S REPORT
– I-13 –


--- page 316 ---
2. BASIS OF PREPARATION
2.1 Statement of compliance
The Historical Financial Information has been prepared based on accounting policies set out in Note 4 which
confirm with IFRS Accounting Standards. In addition, the Historical Financial Information include applicable
disclosures required by the Rules Governing the Listing of Securities on The Stock Exchange of the Hong Kong
Limited (the “ Stock Exchange ”) and by the Hong Kong Companies Ordinance.
For the purpose of preparing and presenting the Historical Financial Information, all relevant standards,
amendments and interpretations that are effective during the years ended December 31, 2022, 2023, 2024 and nine
months ended September 30, 2025 (the “ Track Record Period ”) have been adopted by the Group consistently
throughout the Track Record Period.
The preparation of the Historical Financial Information in conformity with IFRS Accounting Standards
requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the
process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity,
or areas where assumptions and estimates are significant to the Historical Financial Information are disclosed in Note
5 below.
2.2 Basis of measurement
The Historical Financial Information has been prepared on the historical cost basis except for certain financial
instruments, which are measured at fair values as explained in the accounting policies set out below.
2.3 Functional and presentation currency
The Historical Financial Information is presented in Renminbi (“ RMB”), which is the same as the functional
currency of the Company.
3. NEW OR AMENDMENTS TO STANDANDS ISSUED BUT NOT YET EFFECTIVE
The following new or amendments to standards, have been issued, but are not yet effective and have not been
early adopted by the Group.
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Amendments to the Classification and Measurement
of Financial Instruments
1
Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10
and IAS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Annual Improvements to IFRS Accounting
Standards – V olume 11 1
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Contracts Referencing Nature-dependent Electricity 1
Amendments to IAS 21 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Translation to a Hyperinflationary Presentation
Currency 2
IFRS 18 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Presentation and Disclosure in Financial
Statements 2
IFRS 19 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Subsidiaries without Public Accountability:
Disclosures 2
Amendments to IFRS 10 and IAS 28 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Sales or Contribution of Assets between an
Investors and its Associate or Joint V enture 3
1 Effective for annual periods beginning on or after January 1, 2026
2 Effective for annual periods beginning on or after January 1, 2027
3 Effective date to be determined by the IASB
APPENDIX I ACCOUNTANT’S REPORT
– I-14 –


--- page 317 ---
IFRS 18 Presentation and Disclosures in Financial Statements
IFRS 18 Presentation and Disclosure in Financial Statements, which was issued by the IASB in April 2024
supersedes IAS 1 and will result in major consequential amendments to IFRS Accounting Standards including IAS
8 Basis of Preparation of Financial Statements (renamed from Accounting Policies, Changes in Accounting Estimates
and Errors). Even though IFRS 18 will not have any effect on the recognition and measurement of items in the
Historical Financial Information, it is expected to have a significant effect on the presentation and disclosure of
certain items. These changes include categorization and sub-totals in the consolidated statements of profit or loss and
other comprehensive income, aggregation/disaggregation and labelling of information, and disclosure of
management-defined performance measures. The Group is currently evaluating the full impact of IFRS 18 on its
financial statement presentation and disclosures. The application of the new standard is not expected to have material
impact on the financial performance and financial position of the Group but is expected to affect the disclosures in
the future financial statements.
The directors of the Company do not anticipate that the adoption of other new or amendments to standards will
have any material impact on the Group’s financial performance, financial position and cash flows in future periods.
4. ACCOUNTING POLICIES
4.1 Basis of consolidation
All intra-group transactions, balances and unrealized gains on transactions have been eliminated in full on
consolidation. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Adjustments are made to the financial statements of subsidiary where necessary to ensure
consistency with the policies adopted by the Group.
4.2 Subsidiaries
A subsidiary is an investee over which the Company is able to exercise control. The Company controls an
investee if all three of the following elements are present: power over the investee, exposure, or rights, to variable
returns from the investee, and the ability to use its power to affect those variable returns. Control is reassessed
whenever facts and circumstances indicate that there may be a change in any of these elements of control.
In the Company’s statements of financial position, investments in subsidiaries are stated at cost less
impairment loss, if any. The results of subsidiaries are accounted for by the Company on the basis of dividend
received and receivable.
4.3 Revenue and other income
(a) Revenue from contracts with customers
Revenue from contracts with customers is recognized when control of goods or services is transferred to the
customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those
goods or services, excluding those amounts collected on behalf of third parties. Revenue excludes value added tax
or other sales taxes and is after deduction of any trade discounts.
Depending on the terms of the contract and the laws that apply to the contract, control of the goods or service
may be transferred over time or at a point in time. Control of the goods or service is transferred over time if the
Group’s performance:
 provides all of the benefits received and consumed simultaneously by the customer;
 creates or enhances an asset that the customer controls as the Group performs; or
 does not create an asset with an alternative use to the Group and the Group has an enforceable right to
payment for performance completed to date.
If control of the goods or services transfers over time, revenue is recognized over the period of the contract
by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is
recognized at a point in time when the customer obtains control of the goods or service.
APPENDIX I ACCOUNTANT’S REPORT
– I-15 –


--- page 318 ---
Contracts with customers may include multiple performance obligations. For such arrangements, the Group
allocates revenue to each performance obligation based on its relative standalone selling price. The Group generally
determines standalone selling prices based on the prices charged to customers. If the standalone selling price is not
directly observable, it is estimated using expected cost plus a margin or adjusted market assessment approach,
depending on the availability of observable information.
When the contract contains a financing component which provides the customer a significant benefit of
financing the transfer of goods or services to the customer for more than one year, revenue is measured at the present
value of the amounts receivable, discounted using the discount rate that would be reflected in a separate financing
transaction between the Group and the customer at contract inception. Where the contract contains a financing
component which provides a significant financing benefit to the Group, revenue recognized under that contract
includes the interest expense accreted on the contract liability under the effective interest method. For contracts
where the period between the payment and the transfer of the promised goods or services is one year or less, the
transaction price is not adjusted for the effects of a significant financing component, using the practical expedient
in IFRS 15.
Revenue is recognized at a point in time when the goods are delivered to the customers.
Contract liabilities represent advanced consideration received from customers.
The determination of whether revenue shall be reported on a gross or net basis is based on an assessment of
whether the Group is acting as the principal or an agent in the transactions. If the Group is responsible for the overall
management of the contract, the Group is the principal in the transaction and recognizes revenue in the gross amount
of consideration to which it is entitled from the customer. The Group reports the amount received from the customers
and the amounts paid to the suppliers related to these transactions on a net basis if the Group is not primarily
obligated in a transaction, does not generally bear the inventory risk and does not have the ability to establish the
price.
(b) Other income
Interest income is recognized using the effective interest method for debt instruments measured subsequently
at amortized cost and at FVOCI (see Note 4.10 for definition), and is calculated by applying the effective interest
rate to the gross carrying amount of the debt instruments when the asset is not credit-impaired. For debt instruments
that have become credit-impaired, interest income is calculated by applying the effective interest rate to the amortized
cost of the financial asset.
4.4 Property, plant and equipment
Property, plant and equipment, other than construction-in-progress, are stated at cost less accumulated
depreciation and any accumulated impairment losses.
The cost of property, plant and equipment includes its purchase price and the costs directly attributable to the
acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other costs such
as repairs and maintenance are recognized as an expense in profit or loss during the financial period in which they
are incurred.
Property, plant and equipment are depreciated so as to write off their costs net of estimated residual values over
their estimated useful lives on straight-line method. The useful lives, residual value and depreciation method are
reviewed, and adjusted if appropriate, at the end of each reporting period. The useful lives are as follows:
Leasehold 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/H1118Over the lease term
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/H111840 years
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/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
Computer equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-5 years
Furniture, fixtures and office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-5 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/H11185 years
APPENDIX I ACCOUNTANT’S REPORT
– I-16 –


--- page 319 ---
Construction-in-progress is stated at cost less any impairment losses. Cost comprises direct costs of
construction as well as borrowing costs capitalized during the periods of construction and installation. Capitalization
of these costs ceases and the construction in progress is transferred to the appropriate classes of property, plant and
equipment when substantially all the activities necessary to prepare the assets for their intended use are completed.
No depreciation is provided for in respect of construction in progress until it is completed and ready for its intended
use.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
An asset is written down immediately to its recoverable amount if its carrying amount is higher than the asset’s
estimated recoverable amount.
The gain or loss on disposal of an item of property, plant and equipment is the difference between the net sale
proceeds and its carrying amount, and is recognized in profit or loss on disposal.
4.5 Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined on weighted average
basis. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs
of completion and costs necessary to make the sale.
4.6 Leases
All leases are required to be capitalized in the consolidated statements of financial position/statements of
financial position as right-of-use assets and lease liabilities, but accounting policy choices exist for an entity to
choose not to capitalize (i) leases for which the underlying asset is of low-value; and/or (ii) leases which are
short-term leases. The Group has elected not to recognize right-of-use assets and lease liabilities for low-value assets
and leases for which at the commencement date have a lease term of 12 months or less and do not contain purchase
option. The lease payments associated with those leases have been expensed on straight-line basis over the lease term.
Accounting as a lessee
Right-of-use asset
The right-of-use asset is recognized at cost and comprises: (i) the amount of the initial measurement of the
lease liability (see below for the accounting policy to account for lease liability); (ii) any lease payments made at or
before the commencement date, less any lease incentives received; (iii) any initial direct costs incurred by the lessee;
and (iv) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset to the
condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories.
The Group measures the right-of-use assets applying a cost model. Under the cost model, the Group measures the
right-to-use at cost, less any accumulated depreciation and any impairment losses, and adjusted for any
remeasurement of lease liabilities. Right-of-use assets are depreciated over the shorter of its estimated useful life and
the lease term on a straight-line basis.
Lease liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the lessee’s incremental borrowing rate. Generally, the Group uses incremental borrowing rate as the
discount rate. The Group determines incremental borrowing rate by obtaining interest rates from various external
financing sources and makes certain adjustments to reflect the terms of the lease and type of the leased asset. After
initial recognition, lease liability is measured at amortized cost under the effective interest method and interest
expense is recognized as described in Note 4.15. Lease liabilities are presented as a separate line item in the
consolidated statements of financial position and statements of financial position.
APPENDIX I ACCOUNTANT’S REPORT
– I-17 –


--- page 320 ---
4.7 Intangible assets and research and development costs
Intangible assets
Intangible assets acquired separately are initially recognized at cost. Subsequently, intangible assets with
indefinite useful lives are carried at cost less any accumulated impairment losses. Intangible assets with finite useful
lives are carried at cost less accumulated amortization and accumulated impairment losses.
The amortization expense is recognized in profit or loss. The useful lives and amortization method are
reviewed, and adjusted if appropriate, at the end of each reporting period. Amortization is provided on a straight-line
basis over their useful lives as follows:
Computer software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 years
Intangible assets are tested for impairment as described in Note 4.8.
Research and development costs
Costs associated with research activities are expensed in profit or loss as they occur. Costs that directly
attributable to the development activities are recognized as intangible assets provided they meet the following
recognition requirements:
(i) demonstration of technical feasibilities of the prospective product internal use or sale;
(ii) sufficient technical, financial and other resources are available for completion;
(iii) there is intention to complete the intangible asset and use or sell it;
(iv) the Group’s ability to use or sell the intangible asset is demonstrated;
(v) the intangible asset will generate probable economic benefits through internal use or sale; and
(vi) the expenditure attributable to the intangible asset can be reliably measured.
Capitalized development costs are amortized over the periods the Group expects to benefit from using or
selling the products developed.
Development expenditure not satisfying the above criteria and expenditure on the research phase of internal
projects are expensed as incurred.
4.8 Impairment of assets (other than financial assets)
At the end of each reporting period, the Group reviews the carrying amounts of the following assets to
determine whether there is any indication that those assets have suffered an impairment loss or an impairment loss
previously recognized no longer exists or may have decreased:
 Property, plant and equipment, including right-of-use assets;
 Investments in subsidiaries; and
 Intangible assets.
Where an asset does not generate cash inflows largely independent of those from other assets, the recoverable
amount is determined for the smallest group of assets that generates cash inflows independently (i.e. cash generating
units (“ CGUs ”)). As a result, some assets are tested individually for impairment and some are tested at CGU level.
Corporate assets are allocated to individual CGUs when a reasonable and consistent basis of allocation can be
identified, or otherwise they are allocated to the smallest group of CGUs for which a reasonable and consistent
allocation basis can be identified.
APPENDIX I ACCOUNTANT’S REPORT
– I-18 –


--- page 321 ---
If the recoverable amount (i.e. the greater of the fair value less costs of disposal and value-in-use) of an asset
is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount.
An impairment loss is recognized as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised
estimate of its recoverable amount, to the extent that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognized for the asset in prior years.
Reversal of an impairment loss is recognized in profit or loss immediately.
V alue-in-use is based on the estimated future cash flows expected to be derived from the asset or CGU,
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.
4.9 Cash and cash equivalents
Cash and cash equivalents include cash on hand and short-term deposits as well as short-term highly liquid
investments with original maturities of three months or less that are readily convertible into known amounts of cash
and which are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of
meeting short-term cash commitments rather than for investment or other purposes.
4.10 Financial instruments
(a) Financial assets
A financial asset (unless it is a trade receivable without a significant financing component) is initially
measured at fair value plus, for an item not at fair value through profit or loss, transaction costs that are directly
attributable to its acquisition or issue. A trade receivable without a significant financing component is initially
measured at the transaction price.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset
and the cash flow characteristics of the asset. There are two measurement categories into which the Group classifies
its debt instruments:
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortized cost. Financial assets at amortized cost are
subsequently measured using the effective interest method. Interest income, foreign exchange gains and losses and
impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
Fair value through other comprehensive income (“ FVOCI ”): Assets that are held for collection of contractual
cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal
and interest, are measured at FVOCI. Debt investments at FVOCI are subsequently measured at fair value. Interest
income calculated using the effective interest method, foreign exchange gains and losses and impairment are
recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On
derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.
(b) Impairment loss on financial assets
The Group recognizes loss allowances for expected credit losses (“ ECLs”) on trade and bills receivables and
financial assets measured at amortized cost. The ECLs are measured on either of the following bases: (1) 12-months
ECLs: these are the ECLs that result from possible default events within the 12 months after the reporting date; and
(2) lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial
instrument. The maximum period considered when estimating ECLs is the maximum contractual period over which
the Group is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the difference between
all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the
Group expects to receive. The shortfall is then discounted at an approximation to the assets’ original effective interest
rate.
APPENDIX I ACCOUNTANT’S REPORT
– I-19 –


--- page 322 ---
The Group measures loss allowances for trade and bills receivables using IFRS 9 simplified approach and has
calculated ECLs based on lifetime ECLs individually or collectively using a provision matrix with appropriate
groupings. Provision matrix are based on the Group’s historical credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic environment and an assessment of both the current as well as the
forecast direction of conditions at the reporting date, including time value of money where appropriate.
For other debt financial assets, the ECLs are based on the 12-month ECLs. However, when there has been a
significant increase in credit risk since origination, the allowance will be based on the lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating 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 analysis, based
on the Group’s historical experience and informed credit assessment and including 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 the debtor is unlikely to pay its credit
obligations to the Group in full, without recourse by the Group to action such as realizing security (if any is held);
or the financial asset is more than 90 days past due.
Depending on the nature of the financial instruments, the assessment of a significant increase in credit risk is
performed on either an individual basis or a collective basis. When the assessment is performed on a collective basis,
the financial instruments are grouped based on shared credit risk characteristics, such as past due status and credit
risk ratings.
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated
future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes
observable data about the following events:
 significant financial difficulty of the issuer or the borrower;
 the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial
difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise
consider;
 it is becoming probable that the borrower will enter bankruptcy or other financial reorganization; or
 a breach of contract, such as a default or past due event.
The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a
corresponding adjustment to their carrying amount through a loss allowance account except for debt instrument
measured at FVOCI, which shall be recognized in other comprehensive income.
The Group writes off a financial asset when there is information indicating that the counterparty is in severe
financial difficulty and there is no realistic prospect of recovery, for example, when the counterparty has been placed
under liquidation or has entered into bankruptcy proceedings. Financial assets written off may still be subject to
enforcement activities under the Group’s recovery procedures, taking into account legal advice where appropriate.
Any recoveries made are recognized in profit or loss.
(c) Financial liabilities and equity
Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities. Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue
costs.
APPENDIX I ACCOUNTANT’S REPORT
– I-20 –


--- page 323 ---
Financial liabilities
The Group classifies its financial liabilities at amortized cost or at fair value through profit or loss (“ FVPL ”).
Financial liabilities at amortized cost
Financial liabilities at amortized cost including trade and bills payables and other payables and accruals are
initially recognized at fair value, net of transaction costs incurred, and subsequently measured at amortized cost,
using the effective interest method. The related interest expense is recognized as described in Note 4.15.
Gains or losses are recognized in profit or loss when the liabilities are derecognized as well as through the
amortization process.
Financial liabilities at FVPL
Financial liabilities are classified as at FVPL when the financial liability is held for trading. A financial
liability is held for trading if:
 it has been acquired principally for the purpose of repurchasing it in the near term; or
 on initial recognition it is part of a portfolio of identified financial instruments that the Group manages
together and has a recent actual pattern of short-term profit-taking; or
 it is a derivative, except for a derivative that is a financial guarantee contract or a designated and
effective hedging instrument.
(d) Derivative financial instruments
All derivative financial instruments are initially recognised at fair value on the date on which the contract is
entered into and are subsequently re-measured at fair value. Derivatives are classified as current assets when the fair
value is positive and as current liabilities when the fair value is negative. Any gains or losses arising from changes
in the fair value of derivatives are recorded in the consolidated statements of profit or loss and other comprehensive
income.
4.11 Foreign currency translation
Transactions entered into by the group entities in currencies other than their functional currency are recorded
at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the
rates ruling at the end of each reporting period. Non-monetary items that are measured in terms of historical cost in
a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary items,
are recognized in profit or loss in the period in which they arise. Exchange differences arising on the retranslation
of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising
on the retranslation of non-monetary items in respect of which gains and losses are recognized in other
comprehensive income, in which case, the exchange differences are also recognized in other comprehensive income.
4.12 Income tax
Income taxes for the period comprise current tax and deferred tax. Income taxes are recognized in profit or
loss, except when they relate to items recognized in other comprehensive income or directly in equity in which case
the taxes are also recognized in other comprehensive income or when they relate to items recognized directly in
equity in which case the taxes are also recognized directly in equity.
Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or
disallowable for income tax purposes and is calculated using tax rates that have been enacted or substantively enacted
at the end of each reporting period. 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 tax.
APPENDIX I ACCOUNTANT’S REPORT
– I-21 –


--- page 324 ---
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the corresponding amounts used for tax purposes. Deferred tax
liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are recognized to the
extent that it is probable that taxable profits will be available against which deductible temporary differences can be
utilized. Deferred tax is measured at the tax rates appropriate to the expected manner in which the carrying amount
of the asset or liability is realized or settled and that have been enacted or substantively enacted at the end of each
reporting period, and reflects any uncertainty related to income taxes.
Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiary,
except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income tax levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
The carrying amount of deferred tax assets is reviewed at reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered.
4.13 Employee benefits
(a) Defined contribution retirement plan
Pursuant to the relevant regulations of the PRC government, the Group participates in a central pension scheme
operated by the local municipal government, whereby the Group is required to contribute a certain percentage of the
basic salaries of its employees to the scheme to fund their retirement benefits. The local municipal government
undertakes to assume the retirement benefits obligations of all existing and future retired employees of the Group.
The only obligation of the Group with respect to the scheme is to pay the ongoing required contributions under the
scheme. Contributions under the scheme are charged to profit or loss as incurred. There are no provisions under the
scheme whereby forfeited contributions may be used to reduce future contributions.
(b) Short-term employee benefits
Short-term employee benefits are employee benefits (other than termination benefits) that are expected to be
settled wholly before twelve months after the end of the annual reporting period in which the employees render the
related service. Short-term employee benefits are recognized in the period when the employees render the related
service.
(c) Termination benefits
Termination benefits are recognized on the earlier of when the Group can no longer withdraw the offer of those
benefits and when the Group recognizes restructuring costs involving the payment of termination benefits.
4.14 Provisions and contingent liabilities
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past
event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable
estimate of the amount of the obligation can be made. Where the time value of money is material, provisions are
stated at the present value of the expenditure expected to settle the obligation.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic
benefit is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence
of one or more future uncertain events not wholly within the control of the Group are also disclosed as contingent
liabilities unless the probability of outflow of economic benefits is remote.
APPENDIX I ACCOUNTANT’S REPORT
– I-22 –


--- page 325 ---
4.15 Borrowings costs
Borrowing costs attributable directly to the acquisition, construction or production of qualifying assets which
require a substantial period of time to be ready for their intended use or sale, are capitalized as part of the cost of
those assets, until such time as the assets are substantially ready for their intended use or sale. Income earned on
temporary investments of specific borrowings pending their expenditure on qualifying assets is deducted from
borrowing costs eligible for capitalization. All other borrowing costs are recognized in profit or loss in the period in
which they are incurred.
4.16 Government grants
Government grants are not recognized until there is reasonable assurance that the Group will comply with the
conditions attaching to them and that the grants will be received.
Government grants that are receivable as compensation for expenses or losses already incurred or for the
purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or
loss in the period in which they become receivable.
Other government grants related to assets are initially recognized as deferred revenue if there is reasonable
assurance that they will be received and the Group will comply with the conditions associated with the grant. Grants
related to the acquisition of assets are recognized in profit or loss as other income on a systematic basis over the
useful life of the asset.
4.17 Share-based payments
The Group operates share award schemes for the purpose of providing incentives and rewards to eligible
participants who contribute to the success of the Group’s operations. Employees (including directors) of the Group
receive remuneration in the form of share-based payments, whereby employees render services as consideration for
equity instruments (“equity-settled transactions”). The cost of equity-settled transactions with employees is measured
by reference to the fair value at the date on which they are granted. Further details are included in Note 38.
The cost of equity-settled transactions is recognized in employee cost, together with a corresponding increase
in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense
recognized for equity-settled transactions at the end of each of the reporting period until the vesting date reflects the
extent to which the vesting periods has expired and the Group’s best estimate of the number of equity instruments
that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in the cumulative
expense recognized as at the beginning and end of that periods.
Service and non-market performance conditions are not taken into account when determining the grant date
fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate
of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the
grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are
considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead
to an immediate expensing of an award unless there are also service and/or performance conditions.
For awards that do not ultimately vest because non-market performance and/or service conditions have not
been met, no expense is recognized. Where awards include a market or non-vesting condition, the transactions are
treated as vesting irrespective of whether the market or non-vesting condition is satisfied, provided that all other
performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognized as if the
terms had not been modified, if the original terms of the award are met. In addition, an expense is recognized for any
modification that increases the total fair value of the share-based payments, or is otherwise beneficial to the employee
as measured at the date of modification. Where an equity-settled award is canceled, it is treated as if it had vested
on the date of cancelation, and any expense not yet recognized for the award is recognized immediately. This includes
any award where non-vesting conditions within the control of either the Group or the employee are not met. However,
if a new award is substituted for the canceled award and is designated as a replacement award on the date that it is
granted, the canceled and new awards are treated as if they were a modification of the original award, as described
in the previous paragraph.
APPENDIX I ACCOUNTANT’S REPORT
– I-23 –


--- page 326 ---
4.18 Redemption liabilities
A contract that contains an obligation to purchase the Group’s equity instruments for cash or another financial
asset gives rise to a financial liability for the redemption amount, even if the Group’s obligations to purchase are
conditional on the counterparty exercising a right to redeem. The redemption liability is initially measured at the
present value of the redemption amount and subsequently measured at amortised cost, with interest expense being
included in the finance costs. As the Company does not have the right at the end of the reporting period to defer
settlement of the liability for at least twelve months after the reporting period, the amounts are classified as current
liabilities.
The carrying amount of the redemption liability will be reclassified to equity upon a termination of the
counterparty’s redemption right.
5. CRITICAL ACCOUNTING JUDGEMENT AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, which are described in Note 4, the directors of the
Company are required to make judgments, estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates, judgments and associated assumptions are
based on historical experience and other factors that are considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting
estimates are recognized 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 revision affects both current and future periods.
The following are key assumptions concerning the future, and other key sources of estimation uncertainty at
the end of each reporting period that may have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
Impairment of financial assets
The measurement of the ECLs allowance for financial assets measured at amortized cost is an area that requires
the use of significant assumptions about future economic conditions and credit behaviour (e.g. the likelihood of
debtors defaulting and the resulting losses). A number of significant judgments, including determining the criteria for
significant increase in credit risk, are also required in applying the accounting requirements for measuring ECLs.
Details about the judgments and assumptions used in measuring ECLs is set out in Note 4.10(b) and Note 42(b).
Changes to these estimates and assumptions can result in significant changes to the amount of ECLs to be recognized.
Current taxes and deferred taxes
There are certain transactions and calculations for which the ultimate tax determination is uncertain during the
ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were
initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period
in which such determination is made.
The Group recognizes deferred tax assets based on estimates temporary difference and tax that is probable to
generate sufficient taxable profits in the foreseeable future against which the deductible losses will be utilized. The
recognition of deferred tax assets mainly involves management’s judgments and estimations about the timing and the
amount of taxable profits of the group entities which have deductible temporary difference and tax losses.
Recognition of equity-settled share-based payments
The Group recognizes share-based payment expense for equity-settled employee awards based on the fair value
of the Company’s shares at the grant date, adjusted for estimated forfeitures. Most awards are subject to service
conditions (e.g., continued employment over a specified period) and performance conditions (e.g., achievement of
Group’s profit targets and individual performance metrics). Significant judgment is required to estimate the number
of awards expected to vest particularly due to subjective factors such as:
– likelihood of meeting profit targets;
– individual performance evaluations; and
– expected staff turnover rates.
APPENDIX I ACCOUNTANT’S REPORT
– I-24 –


--- page 327 ---
At each reporting date, the Group assesses the probability of meeting performance conditions by reviewing
internal forecasts, macroeconomic factors, and grantees’ performance. Forfeiture assumptions are also updated using
historical staff turnover data, though these trends may change over time.
These estimates are inherently uncertain, particularly for awards with longer vesting periods, and changes in
assumptions could materially affect the expense to be recognized. Specifically, higher probability of meeting
performance conditions and lower staff turnover would result in additional expenses being recognized as more awards
are expected to vest and lower probability of meeting performance conditions and higher staff turnover would result
in less expenses being recognized as fewer awards are expected to vest.
Impairment assessment of property, plant and equipment
Property, plant and equipment are stated at costs less accumulated depreciation and accumulated impairment
losses, if any. In determining whether an asset is impaired, the Group has to exercise judgement and make estimation,
particularly in assessing: (i) whether an event has occurred or any indicators that may affect the asset value; (ii)
whether the carrying value of an asset can be supported by the recoverable amount, in the case of value in use, the
net present value of future cash flows which are estimated based upon the continued use of the asset; and (iii) the
appropriate key assumptions to be applied in estimating the recoverable amounts including cash flow projections and
an appropriate discount rate. When it is not possible to estimate the recoverable amount of an individual asset
(including right-of-use assets), the Group estimates the recoverable amount of the CGU to which the assets belong.
Changing the assumptions and estimates, including the discount rates or the growth rate in the cash flow projections,
could materially affect the recoverable amounts.
Allowance for obsolete and slow-moving inventories
At the end of the reporting period, management assessed the provision of estimation for obsolete and
slow-moving inventories due to a change in products sold and market trends in recent years and the latest experience
of selling merchandise of a similar nature. The Group makes provision of allowances for inventories based on an
assessment of the net realizable value of inventories. Allowances are applied to inventories where events or changes
in circumstances indicate that the net realizable value is lower than the cost of inventories. The identification of the
net realizable value and the slow-moving and obsolete inventories requires the use of judgement and estimates on the
conditions and usefulness of the inventories.
Fair value measurement of financial liability
At the end of the reporting period, the Group’s financial liability is measured at fair value with fair value being
determined based on significant unobservable inputs using valuation techniques. Judgements and estimation are
required in establishing the relevant valuation techniques and the relevant inputs thereof. Changes in assumptions
relating to these factors could result in adjustments to the fair value of the liability. Note 30 and 41 provide detailed
information about the valuation technique, inputs and key assumptions used in the determination of the fair value of
the liability.
6. SEGMENT INFORMATION
(a) Operating segment information
The Group has identified its operating segments and prepared segment information based on the regular
internal financial information reported to the directors of the Company, being chief operating decision maker, for
their decisions about resources allocation to the Group’s business components and for their review of these
components’ performance.
During the Track Record Period, the Group is principally engaged in the manufacturing and sale of SiC
epitaxial wafers under Turnkey service and provision of processing services for SiC epitaxial wafers under Consign
service in the PRC. Information reported to the directors of the Company for the purpose of resources allocation and
performance assessment focuses on the operating results of the business. Therefore, the chief operating decision
maker of the Company regards that there is only one operating segment which is used to make strategic decisions.
No other discrete financial information is provided other than the Group’s results and financial position as a whole.
Accordingly, only entity-wide disclosures, major customers and geographical information are presented.
APPENDIX I ACCOUNTANT’S REPORT
– I-25 –


--- page 328 ---
(b) Geographical information
The Group is domiciled in the PRC, which is the location of the Group’s principal office. All of the Group’s
revenue from external customers are originated from PRC. These revenues from external customers are further
divided into the following geographical areas:
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 by region
Asia – Greater China /H1118/H1118/H1118/H1118167,703 307,249 207,656 161,343 340,026
Asia – Other than Greater
China /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107,767 437,972 464,773 382,628 115,935
Europe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,339 323,343 268,943 235,014 64,160
North America /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,083 73,938 32,944 29,265 14,942
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,79 9––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118440,691 1,142,502 974,316 808,250 535,063
The Group’s revenue information above is based on the delivery destinations of the Group’s products and
services requested by the customers. The geographical location of non-current assets is based on the physical location
of the assets. As at December 31, 2022, 2023 and 2024 and September 30, 2025 all of the Group’s non-current assets
were located in the PRC.
(c) Information about major customers
Revenue from major customers, each of them accounting for 10% or more of the Group’s revenue for each of
the years/periods during the Track Record Period, is set out below:
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)
Customer I /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* * 393,592 317,437 162,966
Customer F /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* * 201,486 168,937 62,749
Customer A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118246,589 614,623 104,411 104,411 *
Customer B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894,249 ****
* The corresponding revenue is not disclosed as it did not contribute over 10% of the total revenue of the
Group during that year/period.
APPENDIX I ACCOUNTANT’S REPORT
– I-26 –


--- page 329 ---
7. REVENUE
Revenue primarily represents the revenue from Turnkey service and Consign service.
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
Turnkey service /H1118/H1118/H1118/H1118/H1118/H1118/H1118277,763 847,679 839,577 679,143 482,338
Consign service /H1118/H1118/H1118/H1118/H1118/H1118/H1118156,569 292,750 121,103 118,100 24,791
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,359 2,073 13,636 11,007 27,934
440,691 1,142,502 974,316 808,250 535,063
All revenue is recognized at a point in time when the goods are delivered to the customers. All contracts are
for periods of one year or less. As permitted under IFRS 15, the transaction price allocated to these unsatisfied (or
partially unsatisfied) performance obligations is not disclosed.
The following table provides information about trade and bills receivable and contract liabilities from contracts
with customers.
As at
January 1, As at December 31,
As at
September 30,
2022 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables
(Note 21) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,948 106,796 78,666 129,645 268,964
Contract liabilities
(Note 26) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118846 5,757 3,730 6,795 736
8. OTHER INCOME AND OTHER GAINS AND LOSSES, NET
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)
Bank interest income /H1118/H1118/H1118/H11183,480 12,103 39,950 26,363 48,889
Government grants (Note) /H1118 13,508 47,350 111,894 95,719 103,035
Fair value loss on
derivatives financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (2,140)
Gain/(loss) on disposal of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 3,487 20 20 (5)
Exchange gain/(loss), net /H1118 4,433 463 16,482 (14,570) (17,203)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887 48 56 51 45
21,534 63,451 168,402 107,583 132,621
Note: These government grants mainly comprised of subsidies received/receivable for subsidizing the Group’s
business. There was no unfulfilled condition to receive government grants at the end of each reporting
period.
APPENDIX I ACCOUNTANT’S REPORT
– I-27 –


--- page 330 ---
9. FINANCE COSTS
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
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,600 18,168 30,135 21,410 9,919
Interest on lease liabilities /H1118 9 1 8221
Interests associated with
redemption liabilities /H1118/H111815,825 14,387 1,334 1,000 344
20,434 32,573 31,471 22,412 10,264
Less: Finance costs
capitalized /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(153) (38) (1,274) (817) (628)
20,281 32,535 30,197 21,595 9,636
10. PROFIT BEFORE TAX
Profit before tax is arrived at after charging/(crediting) the following:
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)
Cost of inventories recognized
as expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118243,865 692,551 640,937 524,060 395,622
Auditors’ remuneration /H1118/H1118/H1118/H1118/H1118/H1118189 2,500 943 – –
Depreciation of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,592 95,923 144,715 103,186 128,933
Depreciation of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486 719 276 243 99
Amortization of intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856 350 743 492 837
Employee costs (including
directors’ emoluments
(Note 14)):
– Salaries and wages /H1118/H1118/H1118/H1118/H1118/H111841,631 83,376 71,734 51,472 49,145
– Retirement scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,346 5,684 5,537 3,898 4,058
– Equity-settled share-based
payments (Note (a)) /H1118/H1118/H1118/H1118/H111828,575 256,210 154,249 141,163 124,484
73,552 345,270 231,520 196,533 177,687
(Reversal of)/write-down of
inventories to net realizable
value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(111) 4,552 1,070 (1,518) 2,360
Listing expenses
– Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 17,368
– PRC (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,678 2,853 2,853 –
Impairment loss/(reversal of
impairment loss) on financial
assets, net (Note 42(b)) :
– Trade and bills receivables /H1118 934 (145) 1,193 179 2,104
– Deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(33) (4) 60 21 12
901 (149) 1,253 200 2,116
Note: Listing expenses in PRC include expenses related to previous listing exercise attempt.
APPENDIX I ACCOUNTANT’S REPORT
– I-28 –


--- page 331 ---
Note (a): Equity-settled share-based payments are included in the following items:
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)
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 57,813 3,522 6,845 4,088
Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 46,219 1,642 4,174 2,248
Administrative and other
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,575 124,253 141,400 121,651 111,437
Research and development
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 27,925 7,685 8,493 6,711
11. INCOME TAX CREDIT/(EXPENSE)
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)
Current year/period – PRC
corporate income tax /H1118/H1118/H1118 – – (59,766) (39,399) (36,541)
Deferred tax (Note 19) /H1118/H1118/H111824,085 (55,648) 16,652 2,324 13,460
24,085 (55,648) (43,114) (37,075) (23,081)
The Group is subject to income tax on an entity basis on assessable profits arising in or derived from the tax
jurisdictions in which members of the Group are domiciled and operated.
Pursuant to the income tax rules and regulations of the PRC, the provision for PRC corporate income tax of
the group entities is calculated based on the statutory tax rate of 25% during the Track Record Period, except for the
Company which is registered as a High and New-Tech Enterprise pursuant to the PRC tax regulations and entitled
to a preferential tax rate of 15% for the Track Record Period.
The income tax (credit)/expense for the Track Record Period can be reconciled to the profit before tax per the
consolidated statements of profit or loss and other comprehensive income as follows:
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 before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,458 163,153 208,181 155,488 44,226
Tax calculated at applicable tax
rates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,519 24,473 30,995 23,279 7,483
Tax effect of expenses not
deductible for tax purpose /H1118/H1118/H11186,665 41,609 22,436 21,503 18,683
Tax incentives for research and
development costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,638) (10,434) (10,317) (7,707) (3,085)
Tax effect of previously
unrecognized tax losses now
recognized as deferred tax
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(40,631) ––––
Income tax (credit)/expense /H1118/H1118/H1118(24,085) 55,648 43,114 37,075 23,081
APPENDIX I ACCOUNTANT’S REPORT
– I-29 –


--- page 332 ---
12. DIVIDENDS
No dividend were declared and paid during the years ended December 31, 2022, 2023 and 2024 and the nine
months ended September 30, 2025.
13. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the
Company is based on the following data:
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)
Earnings for the year
attributable to ordinary
equity shareholders of
the Company
Profit for the year attributable
to all equity shareholders of
the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127,543 107,505 165,067 118,413 21,145
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
’000 ’000 ’000 ’000 ’000
(Unaudited)
Weighted average number of
shares
Weighted average number of
ordinary shares in issue /H1118/H1118/H1118/H1118357,522 374,444 388,236 388,192 404,093
Effect of ordinary shares with
redemption rights /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(40,860) (34,828) (4,768) (4,768) (1,554)
Weighted average number of
ordinary shares in issue, for
the purposes of basic and
diluted earnings per share /H1118/H1118/H1118316,662 339,616 383,468 383,424 402,539
During the Track Record Period, ordinary shares with redemption rights (Note 31) were not included in the
calculation of diluted earnings per share, as their inclusion would have been anti-dilutive. Accordingly, diluted
earnings per share are the same as the basic earnings per share as the Company had no dilutive potential ordinary
shares in existence for the Track Record Period.
The Company converted into a joint stock company with limited liability and issued 360,000,000 shares with
the par value of RMB1 each in May 2023. For the purpose of computing basic earnings per share, the weighted
average number of ordinary shares deemed to be in issue before the Company’s conversion into a joint stock company
was determined assuming the conversion into joint stock company had occurred on 1 January 2022. Please refer to
Note 32(c) for details.
APPENDIX I ACCOUNTANT’S REPORT
– I-30 –


--- page 333 ---
14. DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS AND FIVE HIGHEST PAID INDIVIDUALS
(a) Directors’ and supervisors’ emoluments
Details of directors’ and supervisors’ remuneration during the Track Record Period are as follows:
Fees
Salaries,
allowances
and bonus
Retirement
scheme
contributions
Equity-settled
share-based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended December 31, 2022
Executive directors
Dr. Zhao Jianhui (ሾ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,314 – – 1,314
Ms. Pan Menghan ( ᆙྫྷ⊦) /H1118/H1118/H1118/H1118/H1118/H1118– 420 – – 420
Ms. Bai Liting ( ͣᘆణ) (a) /H1118/H1118/H1118/H1118/H1118/H1118– 221 – 28,575 28,796
Mr. Guo Zhiyan (ܗ)a) /H1118/H1118/H1118/H1118/H1118–––––
Mr. Kuang Guangjian ( ΗΈ਺) (b) /H1118/H1118 –––––
Mr. Chen Yinfei (࠭ࠪ)b) /H1118/H1118/H1118/H1118/H1118–––––
Mr. Li Qinghua ( ҽᅅശ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Xie Xuejun (ࠏ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
– 1,955 – 28,575 30,530
Non-executive director
Mr. Su Ping ( ᘽ̻) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Supervisors
Mr. Wu Guoyi ( ю਷χ) (d) /H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhang Jie ( ੵઠ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Ms Zhang Zhilin ( ੵʘ೙) (d) /H1118/H1118/H1118/H1118/H1118– 7 03– 7 3
– 7 03– 7 3
Fees
Salaries,
allowances
and bonus
Retirement
scheme
contributions
Equity-settled
share-based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended December 31, 2023
Executive directors
Dr. Zhao Jianhui (ሾ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,322 – 11,469 12,791
Ms. Pan Menghan ( ᆙྫྷ⊦) /H1118/H1118/H1118/H1118/H1118/H1118– 426 – – 426
Ms. Bai liting ( ͣᘆణ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 120 – – 120
Mr. Guo Zhiyan (ܗ)H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Li Qinghua ( ҽᅅശ) (c) /H1118/H1118/H1118/H1118/H1118–––––
Mr. Xie Xuejun (ࠏ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
– 1,868 – 11,469 13,337
Independent non-executive directors
Mr. Li Guoan ( ҽ਷τ) (e) /H1118/H1118/H1118/H1118/H1118/H1118/H11186 7––– 6 7
Dr. Kang Junyong (ۇڲ)e) /H1118/H1118/H1118/H11186 7––– 6 7
Dr. Su Xinlong ( ᘽอᎲ) (e) /H1118/H1118/H1118/H1118/H1118/H11186 7––– 6 7
2 0 1––– 2 0 1
Non-executive director
Mr. Su Ping ( ᘽ̻) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Supervisors
Mr. Wu Guoyi ( ю਷χ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhang Jie ( ੵઠ) (f) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Ms. Zhang Zhilin ( ੵʘ೙) (d)(f) /H1118/H1118/H1118– 1 0 97– 1 1 6
Mr. Qian Weining ( ፺ሊྐྵ) (g) /H1118/H1118/H1118/H1118– 399 20 2,969 3,388
Mr. Li Kaixi ( ҽ௱Ҏ) (g) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 317 19 2,227 2,563
– 825 46 5,196 6,067
APPENDIX I ACCOUNTANT’S REPORT
– I-31 –


--- page 334 ---
Fees
Salaries,
allowances
and bonus
Retirement
scheme
contributions
Equity-settled
share-based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended December 31, 2024
Executive directors
Dr. Zhao Jianhui (ሾ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,322 – 21,747 23,069
Ms. Pan Menghan ( ᆙྫྷ⊦) /H1118/H1118/H1118/H1118/H1118/H1118– 406 – – 406
Ms. Bai liting ( ͣᘆణ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 120 – – 120
Mr. Guo Zhiyan (ܗ)H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Xie Xuejun (ࠏ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
– 1,848 – 21,747 23,595
Independent non-executive directors
Mr. Li Guoan ( ҽ਷τ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 0 0––– 1 0 0
Dr. Kang Junyong (ۇڲ)H1118/H1118/H1118/H1118/H1118/H11181 0 0––– 1 0 0
Dr. Su Xinlong ( ᘽอᎲ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 0 0––– 1 0 0
3 0 0––– 3 0 0
Non-executive director
Mr. Su Ping ( ᘽ̻) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Supervisors
Mr. Wu Guoyi ( ю਷χ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Qian Weining ( ፺ሊྐྵ) /H1118/H1118/H1118/H1118/H1118/H1118– 381 21 4,663 5,065
Mr. Li Kaixi ( ҽ௱Ҏ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 296 21 3,417 3,734
– 677 42 8,080 8,799
Fees
Salaries,
allowances
and bonus
Retirement
scheme
contributions
Equity-settled
share-based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Nine months ended September 30,
2024
Executive directors
Dr. Zhao Jianhui (ሾ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 985 – 16,310 17,295
Ms. Pan Menghan ( ᆙྫྷ⊦) /H1118/H1118/H1118/H1118/H1118/H1118– 366 – – 366
Ms. Bai liting ( ͣᘆణ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 9 0–– 9 0
Mr. Guo Zhiyan (ܗ)H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Xie Xuejun (ࠏ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
– 1,441 – 16,310 17,751
Independent non-executive directors
Mr. Li Guoan ( ҽ਷τ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 5––– 7 5
Dr. Kang Junyong (ۇڲ)H1118/H1118/H1118/H1118/H1118/H11187 5––– 7 5
Dr. Su Xinlong ( ᘽอᎲ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 5––– 7 5
2 2 5––– 2 2 5
Non-executive director
Mr. Su Ping ( ᘽ̻) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Supervisors
Mr. Wu Guoyi ( ю਷χ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Qian Weining ( ፺ሊྐྵ) /H1118/H1118/H1118/H1118/H1118/H1118– 267 14 3,748 4,029
Mr. Li Kaixi ( ҽ௱Ҏ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 212 14 2,771 2,997
– 479 28 6,519 7,026
APPENDIX I ACCOUNTANT’S REPORT
– I-32 –


--- page 335 ---
Fees
Salaries,
allowances
and bonus
Retirement
scheme
contributions
Equity-settled
share-based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Nine months ended September 30,
2025
Executive directors
Dr. Zhao Jianhui (ሾ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 900 – 16,310 17,210
Ms. Pan Menghan ( ᆙྫྷ⊦) /H1118/H1118/H1118/H1118/H1118/H1118– 290 – – 290
Ms. Bai liting ( ͣᘆణ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 9 0–– 9 0
Mr. Guo Zhiyan (ܗ)h) /H1118/H1118/H1118/H1118/H1118–––––
Mr. Xie Xuejun (ࠏ)h) /H1118/H1118/H1118/H1118/H1118–––––
– 1,280 – 16,310 17,590
Independent non-executive directors
Mr. Li Guoan ( ҽ਷τ) (i) /H1118/H1118/H1118/H1118/H1118/H1118/H11182 0––– 2 0
Dr. Kang Junyong (ۇڲ)H1118/H1118/H1118/H1118/H1118/H11187 5––– 7 5
Dr. Su Xinlong ( ᘽอᎲ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 5––– 7 5
Dr. Liao Yi ( ࿋අ) (j) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 0––– 5 0
2 2 0––– 2 2 0
Non-executive directors
Mr. Su Ping ( ᘽ̻) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Fang Wei ( ˙ਃ) (k) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Ms. Xie Jieping ( ᑽᆎ̻) (k) /H1118/H1118/H1118/H1118/H1118–––––
–––––
Supervisors
Mr. Wu Guoyi ( ю਷χ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Qian Weining ( ፺ሊྐྵ) /H1118/H1118/H1118/H1118/H1118/H1118– 270 17 3,748 4,035
Mr. Li Kaixi ( ҽ௱Ҏ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 209 17 2,771 2,997
– 479 34 6,519 7,032
Notes:
(a) Ms. Bai and Mr. Guo were appointed as executive directors in July 2022.
(b) Mr. Kuang and Mr. Chen resigned as executive directors in July 2022.
(c) Mr. Li resigned as executive director in May 2023.
(d) Mr. Wu and Ms. Zhang were appointed as supervisors in October 2022.
(e) Mr. Li, Dr. Kang and Dr. Su were appointed as independent non-executive directors in May 2023.
(f) Mr. Zhang and Ms. Zhang resigned as supervisors in May 2023.
(g) Mr. Qian and Mr. Li were appointed as supervisors in May 2023.
(h) Mr. Guo and Mr. Xie resigned as executive directors in March 2025.
(i) Mr. Li resigned as independent non-executive director in March 2025.
(j) Dr. Liao was appointed as independent non-executive director in March 2025.
(k) Mr. Fang and Ms. Xie were appointed as non-executive directors in March 2025.
APPENDIX I ACCOUNTANT’S REPORT
– I-33 –


--- page 336 ---
(l) No emoluments were paid by the Group to any directors or supervisors as an inducement to join or upon
joining the Group or as compensation for loss or termination of their office during the Track Record
Period.
(m) The executive directors’ emoluments shown above were for their services in connection with the
management of the affairs of the Group and the Company. The non-executive directors’ and the
independent non-executive directors’ emoluments shown above were for their services as directors of
the Company.
(b) Five highest paid individuals
Of the five individuals with the highest emoluments in the Group, included three, zero, two, one and two
directors and supervisors of the Company for each of the years ended December 31, 2022, 2023 and 2024 and nine
months ended September 30, 2024 (unaudited) and 2025 respectively, whose emoluments are disclosed above. The
emoluments of the remaining two, five, three, four, three individuals for each of the years ended December 31, 2022,
2023 and 2024 and nine months ended September 30, 2024 (unaudited) and 2025 respectively, whose emoluments
are analyzed below:
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)
Salaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,030 2,748 2,104 1,691 1,442
Allowance and other
benefits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Discretionary bonuses /H1118/H1118/H1118 –––––
Retirement scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871 134 97 89 84
Equity-settled share-based
payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 145,485 109,190 96,773 85,512
2,101 148,367 111,391 98,553 87,038
The number of the highest paid individuals other than directors and supervisors fell within the following
emolument bands:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
No. of
individuals
No. of
individuals
No. of
individuals
No. of
individuals
No. of
individuals
(Unaudited)
Nil to HKD1,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181––––
HKD1,000,001 to HKD1,500,000 /H1118/H1118/H1118/H1118/H1118/H11181––––
HKD5,000,001 to HKD5,500,000 /H1118/H1118/H1118/H1118/H1118/H1118–––1–
HKD6,500,001 to HKD7,000,000 /H1118/H1118/H1118/H1118/H1118/H1118––––1
HKD7,500,001 to HKD8,000,000 /H1118/H1118/H1118/H1118/H1118/H1118––1––
HKD8,000,001 to HKD8,500,000 /H1118/H1118/H1118/H1118/H1118/H1118–––1–
HKD11,000,001 to HKD11,500,000 /H1118/H1118/H1118/H1118/H1118––––1
HKD12,000,001 to HKD12,500,000 /H1118/H1118/H1118/H1118–––1–
HKD15,000,001 to HKD15,500,000 /H1118/H1118/H1118/H1118––1––
HKD25,000,001 to HKD25,500,000 /H1118/H1118/H1118/H1118/H1118–1–––
HKD25,500,001 to HKD26,000,000 /H1118/H1118/H1118/H1118/H1118–1–––
HKD26,000,001 to HKD26,500,000 /H1118/H1118/H1118/H1118/H1118–1–––
HKD27,500,001 to HKD28,000,000 /H1118/H1118/H1118/H1118–1–––
HKD59,500,001 to HKD60,000,000 /H1118/H1118/H1118/H1118–1–––
HKD77,000,001 to HKD77,500,000 /H1118/H1118/H1118/H1118/H1118––––1
HKD82,500,001 to HKD83,000,000 /H1118/H1118/H1118/H1118–––1–
HKD99,000,001 to HKD99,500,000 /H1118/H1118/H1118/H1118––1––
25343
During the Track Record Period, no emoluments were paid by the Group to any director or supervisor or any
of the five highest paid individuals as an inducement to join or upon joining the Group, or as compensation for loss
of office. There were no arrangements under which a director or supervisor waived or agreed to waive any emolument
during the Track Record Period.
APPENDIX I ACCOUNTANT’S REPORT
– I-34 –


--- page 337 ---
15. PROPERTY, PLANT AND EQUIPMENT
The Group
Leasehold
land Buildings Machinery
Computer
equipment
Furniture,
fixtures and
office
equipment
Motor
vehicles
Construction
-in-progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At January 1, 2022 /H1118/H1118/H1118/H111812,525 68,510 165,236 1,809 3,361 – 149,215 400,656
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,883 ––––– 548,627 575,510
Transferred upon completion /H1118 – 81,602 318,168 3,480 4,900 – (408,150) –
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – (1,118) – (342) – – (1,460)
At December 31, 2022 and
January 1, 2023 /H1118/H1118/H1118/H1118/H111839,408 150,112 482,286 5,289 7,919 – 289,692 974,706
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 1,261,841 1,261,841
Transferred upon completion /H1118 – 179,735 769,233 3,014 7,924 352 (960,258) –
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – (38,316) (5) (732) – – (39,053)
At December 31, 2023 and
January 1, 2024 /H1118/H1118/H1118/H1118/H111839,408 329,847 1,213,203 8,298 15,111 352 591,275 2,197,494
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1 7– 156,704 156,721
Transferred upon completion /H1118 – 1,185 182,258 1,121 929 – (185,493) –
Disposals/written off /H1118/H1118/H1118/H1118/H1118– (1,669) – – (16) – – (1,685)
At December 31, 2024 and
January 1, 2025 /H1118/H1118/H1118/H1118/H111839,408 329,363 1,395,461 9,419 16,041 352 562,486 2,352,530
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 2––65– 24,374 24,417
Transferred upon completion /H1118 – 153,914 305,385 1,435 298 – (461,032) –
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – – (200) – – – (200)
At September 30, 2025 /H1118/H1118/H111839,440 483,277 1,700,846 10,660 16,344 352 125,828 2,376,747
Accumulated depreciation:
At January 1, 2022 /H1118/H1118/H1118/H1118/H11181,294 5,939 61,968 676 1,505 – – 71,382
Charge for the year /H1118/H1118/H1118/H1118/H1118473 4,906 23,758 573 882 – – 30,592
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – (754) – (332) – – (1,086)
At December 31, 2022 and
January 1, 2023 /H1118/H1118/H1118/H1118/H11181,767 10,845 84,972 1,249 2,055 – – 100,888
Charge for the year /H1118/H1118/H1118/H1118/H1118788 10,230 81,835 1,050 1,970 50 – 95,923
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – (35,869) (4) (675) – – (36,548)
At December 31, 2023 and
January 1, 2024 /H1118/H1118/H1118/H1118/H11182,555 21,075 130,938 2,295 3,350 50 – 160,263
Charge for the year /H1118/H1118/H1118/H1118/H1118788 18,062 121,448 1,510 2,840 67 – 144,715
Disposals/written off /H1118/H1118/H1118/H1118/H1118–––– (14) – – (14)
At December 31, 2024 and
January 1, 2025 /H1118/H1118/H1118/H1118/H11183,343 39,137 252,386 3,805 6,176 117 – 304,964
Charge for the period /H1118/H1118/H1118/H1118623 16,865 108,038 1,197 2,160 50 – 128,933
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – – (160) – – – (160)
At September 30, 2025 /H1118/H1118/H11183,966 56,002 360,424 4,842 8,336 167 – 433,737
Net carrying amount:
At December 31, 2022 /H1118/H1118/H111837,641 139,267 397,314 4,040 5,864 – 289,692 873,818
At December 31, 2023 /H1118/H1118/H111836,853 308,772 1,082,265 6,003 11,761 302 591,275 2,037,231
At December 31, 2024 /H1118/H1118/H111836,065 290,226 1,143,075 5,614 9,865 235 562,486 2,047,566
At September 30, 2025 /H1118/H1118/H111835,474 427,275 1,340,422 5,818 8,008 185 125,828 1,943,010
APPENDIX I ACCOUNTANT’S REPORT
– I-35 –


--- page 338 ---
The Company
Leasehold
land Buildings Machinery
Computer
equipment
Furniture,
fixtures and
office
equipment
Motor
vehicles
Construction
-in-progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At January 1, 2022 /H1118/H1118/H1118/H111812,525 68,510 165,236 1,809 3,361 – 149,215 400,656
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,883 ––––– 548,627 575,510
Transferred upon completion /H1118 – 81,602 318,168 3,480 4,900 – (408,150) –
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – (1,118) – (342) – – (1,460)
At December 31, 2022 and
January 1, 2023 /H1118/H1118/H1118/H1118/H111839,408 150,112 482,286 5,289 7,919 – 289,692 974,706
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 1,261,841 1,261,841
Transferred upon completion /H1118 – 179,735 769,233 3,014 7,924 352 (960,258) –
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – (38,316) (5) (732) – – (39,053)
At December 31, 2023 and
January 1, 2024 /H1118/H1118/H1118/H1118/H111839,408 329,847 1,213,203 8,298 15,111 352 591,275 2,197,494
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 156,704 156,704
Transferred upon completion /H1118 – 1,185 182,258 1,121 929 – (185,493) –
Disposals/written off /H1118/H1118/H1118/H1118/H1118– (1,669) (245,738) (594) (1,454) – – (249,455)
At December 31, 2024 and
January 1, 2025 /H1118/H1118/H1118/H1118/H111839,408 329,363 1,149,723 8,825 14,586 352 562,486 2,104,743
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 2––––– 24,274 24,306
Transferred upon completion /H1118 – 153,914 305,385 1,435 298 – (461,032) –
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – – (158) – – – (158)
At September 30, 2025 /H1118/H1118/H111839,440 483,277 1,455,108 10,102 14,884 352 125,728 2,128,891
Accumulated depreciation:
At January 1, 2022 /H1118/H1118/H1118/H1118/H11181,294 5,939 61,968 676 1,505 – – 71,382
Charge for the year /H1118/H1118/H1118/H1118/H1118473 4,906 23,758 573 882 – – 30,592
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – (754) – (332) – – (1,086)
At December 31, 2022 and
January 1, 2023 /H1118/H1118/H1118/H1118/H11181,767 10,845 84,972 1,249 2,055 – – 100,888
Charge for the year /H1118/H1118/H1118/H1118/H1118788 10,230 81,835 1,050 1,970 50 – 95,923
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – (35,869) (4) (675) – – (36,548)
At December 31, 2023 and
January 1, 2024 /H1118/H1118/H1118/H1118/H11182,555 21,075 130,938 2,295 3,350 50 – 160,263
Charge for the year /H1118/H1118/H1118/H1118/H1118788 18,062 111,739 1,465 2,731 67 – 134,852
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – (27,121) (212) (470) – – (27,803)
At December 31, 2024 and
January 1, 2025 /H1118/H1118/H1118/H1118/H11183,343 39,137 215,556 3,548 5,611 117 – 267,312
Charge for the period /H1118/H1118/H1118/H1118623 16,865 90,541 1,120 1,966 50 – 111,165
Disposals/written off /H1118/H1118/H1118/H1118/H1118– – – (147) – – – (147)
At September 30, 2025 /H1118/H1118/H11183,966 56,002 306,097 4,521 7,577 167 – 378,330
Net carrying amount:
At December 31, 2022 /H1118/H1118/H111837,641 139,267 397,314 4,040 5,864 – 289,692 873,818
At December 31, 2023 /H1118/H1118/H111836,853 308,772 1,082,265 6,003 11,761 302 591,275 2,037,231
At December 31, 2024 /H1118/H1118/H111836,065 290,226 934,167 5,277 8,975 235 562,486 1,837,431
At September 30, 2025 /H1118/H1118/H111835,474 427,275 1,149,011 5,581 7,307 185 125,728 1,750,561
APPENDIX I ACCOUNTANT’S REPORT
– I-36 –


--- page 339 ---
16. RIGHT-OF-USE ASSETS
The Group
The analysis of the net book value of right-of-use assets by class of underlying assets as at the end of each
reporting period is as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Staff quarters and warehouse /H1118/H1118/H1118/H1118/H1118343 371 77 110
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)
Additions to right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118412 795 133 133 132
Depreciation charge of
right-of-use assets by
class of underlying
assets:
– Staff quarters and
warehouse /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486 719 276 243 99
The Company
The analysis of the net book value of right-of-use assets by class of underlying assets as at the end of each
reporting period is as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Staff quarters /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118343 371 – –
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)
Additions to right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 1 2 7 9 5–––
Depreciation charge of
right-of-use assets by
class of underlying
assets:
– Staff quarters /H1118/H1118/H1118/H1118/H1118/H1118486 719 221 221 –
APPENDIX I ACCOUNTANT’S REPORT
– I-37 –


--- page 340 ---
17. INVESTMENTS IN SUBSIDIARIES
The Company
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Unlisted investments, at cost /H1118/H1118/H1118/H1118/H1118– – 50,000 50,000
The particulars of the directly and indirectly held subsidiaries of the Company are set out in Note 1.
18. INTANGIBLE ASSETS
The Group and the Company
Computer software
RMB’000
Cost:
At January 1, 2022, December 31, 2022, and January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118256
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,192
At December 31, 2023 and January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,448
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,900
At December 31, 2024 and January 1, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,348
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118580
At September 30, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,928
Accumulated amortization:
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856
At December 31, 2022 and January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118350
At December 31, 2023 and January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118530
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118743
At December 31, 2024 and January 1, 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/H11181,273
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118837
At September 30, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,110
Net carrying value:
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118918
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,075
At September 30, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,818
APPENDIX I ACCOUNTANT’S REPORT
– I-38 –


--- page 341 ---
19. DEFERRED TAX
Deferred tax recognized and movements during the Track Record Period are as follows:
The Group
Impairment
losses on
financial
assets
Unused
tax losses Inventories
Fair value on
derivative
financial
instruments
Property,
plant and
equipment
and right-of-
use assets
Government
grants
received not
yet recognized
as income Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118––––– ––
Credited/(charged) to profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118211 54,995 87 – (46,243) 15,035 24,085
At December 31, 2022 and
January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118211 54,995 87 – (46,243) 15,035 24,085
Credited/(charged) to profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(22) (45,345) 683 – (26,764) 15,800 (55,648)
At December 31, 2023 and
January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118189 9,650 770 – (73,007) 30,835 (31,563)
Credited/(charged) to profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118251 (9,428) 178 – 17,371 8,280 16,652
At December 31, 2024
January 1, 2025 /H1118/H1118/H1118/H1118/H1118/H1118440 222 948 – (55,636) 39,115 (14,911)
Credited/(charged) to profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118553 (222) 1,299 488 3,652 7,690 13,460
At September 30, 2025 /H1118/H1118/H1118/H1118993 – 2,247 488 (51,984) 46,805 (1,451)
The following is the analysis of the deferred tax balances for the financial reporting purposes:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,085 – 49 2,206
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (31,563) (14,960) (3,657)
24,085 (31,563) (14,911) (1,451)
Deferred income tax assets are recognized for deductible temporary differences and unused tax losses to the
extent that the realization of the related tax benefits through future taxable profits is probable. The Group has tax
losses arising in China that will expire in five or ten years for offsetting against future taxable profits.
The amounts and expiration dates of the tax losses carried forward as at December 31, 2022, 2023, 2024 and
September 30, 2025 are listed below:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
2027 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,70 7–––
2028 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,27 8–––
2029 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 889 –
2030 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,39 2–––
2031 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,73 6–––
2032 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118291,518 64,331 – –
366,631 64,331 889 –
As at December 31, 2022, 2023, 2024 and as at September 30, 2025, the Group had cumulative tax losses
amounting RMB366,631,000, RMB64,331,000, RMB889,000 and Nil that can be carried forward against future
taxable income.
APPENDIX I ACCOUNTANT’S REPORT
– I-39 –


--- page 342 ---
The Company
Impairment
losses on
financial
assets
Unused
tax losses Inventories
Fair value on
derivative
financial
instruments
Property,
plant and
equipment
and right-of-
use assets
Government
grants
received not
yet recognized
as income Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118––––– ––
Credited/(charged) to profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118211 54,995 87 – (46,243) 15,035 24,085
At December 31, 2022 and
January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118211 54,995 87 – (46,243) 15,035 24,085
Credited/(charged) to profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(22) (45,345) 683 – (26,764) 15,800 (55,648)
At December 31, 2023 and
January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118189 9,650 770 – (73,007) 30,835 (31,563)
Credited/(charged) to profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118464 (9,650) 136 – 17,373 8,280 16,603
At December 31, 2024
January 1, 2025 /H1118/H1118/H1118/H1118/H1118/H1118653 – 906 – (55,634) 39,115 (14,960)
Credited/(charged) to profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(119) – (15) 70 3,661 7,690 11,287
At September 30, 2025 /H1118/H1118/H1118/H1118534 – 891 70 (51,973) 46,805 (3,673)
The following is the analysis of the deferred tax balances for the financial reporting purposes:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,08 5–––
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (31,563) (14,960) (3,673)
24,085 (31,563) (14,960) (3,673)
Deferred income tax assets are recognized for deductible temporary differences and unused tax losses to the
extent that the realization of the related tax benefits through future taxable profits is probable. The Company has tax
losses arising in China that will expire in ten years for offsetting against future taxable profits.
The amounts and expiration dates of the tax losses carried forward as at December 31, 2022, 2023 and 2024
and as at September 30, 2025 are listed below:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
2027 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,70 7–––
2028 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,27 8–––
2029 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
2030 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,39 2–––
2031 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,73 6–––
2032 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118291,518 64,331 – –
366,631 64,331 – –
As at December 31, 2022 and 2023, the Company had cumulative tax losses amounting RMB366,631,000 and
RMB64,331,000 that can be carried forward against future taxable income.
APPENDIX I ACCOUNTANT’S REPORT
– I-40 –


--- page 343 ---
20. INVENTORIES
The Group
As at December 31,
As at
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/H1118/H111861,601 258,868 196,416 202,902
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,932 96,517 46,255 61,342
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,449 831 11,169 15,261
91,982 356,216 253,840 279,505
Write-down of inventories to net
realizable value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(578) (5,130) (6,200) (8,560)
91,404 351,086 247,640 270,945
Movements on the write-down of inventories to net realizable value are as follows:
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At January 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(689) (578) (5,130) (6,200)
Reversal/(charge) for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111 (4,552) (1,070) (2,360)
At December 31/September 30 /H1118/H1118/H1118(578) (5,130) (6,200) (8,560)
The Company
As at December 31,
As at
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/H1118/H111861,601 258,868 182,413 167,158
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,932 96,517 43,192 35,225
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,449 831 9,964 7,179
91,982 356,216 235,569 209,562
Write-down of inventories to net
realizable value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(578) (5,130) (6,035) (5,934)
91,404 351,086 229,534 203,628
Movements on the write-down of inventories to net realizable value are as follows:
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At January 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(689) (578) (5,130) (6,035)
Reversal/(charge) for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111 (4,552) (905) 101
At December 31/September 30 /H1118/H1118/H1118(578) (5,130) (6,035) (5,934)
APPENDIX I ACCOUNTANT’S REPORT
– I-41 –


--- page 344 ---
21. TRADE AND BILLS RECEIV ABLES
The Group
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118106,342 76,868 130,135 273,206
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,801 3,000 1,905 257
108,143 79,868 132,040 273,463
Less: impairment loss allowance /H1118/H1118/H1118(1,347) (1,202) (2,395) (4,499)
106,796 78,666 129,645 268,964
An aging analysis of trade and bills receivables, net of impairment losses, as at the end of each reporting
period, based on the invoice dates, is as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,654 77,461 123,752 249,558
3 months to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118949 634 1,151 17,327
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17 4,635 2,079
1 year to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,193 148 14 –
2 years to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 406 93 –
106,796 78,666 129,645 268,964
The Group recognized impairment loss based on the accounting policy stated in Note 4.10(b). Trade and bills
receivables are generally due within 30 to 90 days from the date of billing.
Further details on the Group’s credit policy and credit risk analysis arising from trade and bills receivables are
set out in Note 42(b).
The Company
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118106,342 76,868 65,413 68,691
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,801 3,000 902 257
108,143 79,868 66,315 68,948
Less: impairment loss allowance /H1118/H1118/H1118(1,347) (1,202) (1,747) (1,530)
106,796 78,666 64,568 67,418
APPENDIX I ACCOUNTANT’S REPORT
– I-42 –


--- page 345 ---
An aging analysis of trade and bills receivables, net of impairment losses, as at the end of each reporting
period, based on the invoice dates, is as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,654 77,461 58,675 62,505
3 months to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118949 634 1,151 4,857
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17 4,635 56
1 year to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,193 148 14 –
2 years to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 406 93 –
106,796 78,666 64,568 67,418
The Company recognized impairment loss based on the accounting policy stated in Note 4.10(b). Trade and
bills receivables are generally due within 30 to 90 days from the date of billing.
Further details on the Company’s credit policy and credit risk analysis arising from trade and bills receivables
are set out in Note 42(b).
22. PREPAYMENTS, DEPOSITS AND OTHER RECEIV ABLES
The Group
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current portion
Deposits and other receivables /H1118/H1118/H1118/H11181,214 1,131 2,347 10,961
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,374 6,287 5,238 4,075
Prepaid listing expenses and
deferred issue costs
– Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 6,262
– PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6 3 1––
15,588 8,049 7,585 21,298
Less: Impairment loss allowance /H1118/H1118/H1118(61) (57) (117) (129)
15,527 7,992 7,468 21,169
The Company
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current portion
Deposits and other receivables /H1118/H1118/H1118/H11181,214 1,131 2,227 10,838
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,374 6,287 5,238 4,074
Prepaid listing expenses and
deferred issue costs
– Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 6,262
– PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6 3 1––
15,588 8,049 7,465 21,174
Less: Impairment loss allowance /H1118/H1118/H1118(61) (57) (111) (115)
15,527 7,992 7,354 21,059
APPENDIX I ACCOUNTANT’S REPORT
– I-43 –


--- page 346 ---
The Group and the Company recognized impairment loss based on the accounting policy stated in Note
4.10(b). Further details on the Group and the Company’s credit risk analysis arising from deposits and other
receivables are set out in Note 42(b).
23. CASH AND CASH EQUIV ALENTS AND TERM DEPOSITS
The Group
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118274,417 549,521 2,030,653 1,832,787
Current portion
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118500 20,622 – –
Non-current portion
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,12 2–––
The Group’s cash and cash equivalents comprise cash on hand, bank deposits carrying interest at floating rates
based on daily bank deposit rates and short-term bank deposits carrying interests at prevailing market interest rate.
Term deposits with original maturity over three months comprise bank deposits carrying interest at fixed rate or
floating rates at prevailing market interest rate. The directors of the Company consider that the carrying value of the
deposits at the end of each reporting period approximates to their fair values.
As at the end of each reporting period, all of the Group’s cash at banks and on hands and term deposits with
original maturity over three months are denominated in RMB and USD and placed in the PRC. RMB is not a freely
convertible currency. Under the PRC’s Foreign Exchange Control Regulations and Administration of Settlement and
Sales and Payment of Foreign Exchange Regulations, the Group is permitted to exchange RMB for foreign currencies
through banks that are authorized to conduct foreign exchange business.
The Company
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118274,417 549,521 2,022,075 1,705,055
Current portion
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118500 20,622 – –
Non-current portion
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,12 2–––
The Company’s cash and cash equivalents comprise cash on hand, bank deposits carrying interest at floating
rates based on daily bank deposit rates and short-term bank deposits carrying interests at prevailing market interest
rate. Term deposits with original maturity over three months comprise bank deposits carrying interest at fixed rate
or floating rates at prevailing market interest rate. The directors of the Company consider that the carrying value of
the deposits at the end of each reporting period approximates to their fair values.
As at the end of each reporting period, all of the Company’s cash at banks and on hands and term deposits with
original maturity over three months are denominated in RMB and USD and placed in the PRC. RMB is not a freely
convertible currency. Under the PRC’s Foreign Exchange Control Regulations and Administration of Settlement and
Sales and Payment of Foreign Exchange Regulations, the Company is permitted to exchange RMB for foreign
currencies through banks that are authorized to conduct foreign exchange business.
APPENDIX I ACCOUNTANT’S REPORT
– I-44 –


--- page 347 ---
24. TRADE AND BILLS PAYABLES
The Group
As at December 31,
As at
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/H1118/H1118/H1118/H1118/H111847,962 32,912 46,781 147,859
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,901 – 25,102 7,105
54,863 32,912 71,883 154,964
A credit period is 30 days to 90 days, if applicable, from the date of billing is generally granted by the Group’s
trade suppliers. Based on the receipt of services and goods, which normally coincided with the invoice dates, the
aging analysis of the Group’s trade and bills payables as at the end of each reporting period is as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,626 32,670 71,538 154,072
1-2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5 104 548
Over 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118237 237 241 344
54,863 32,912 71,883 154,964
The Group’s trade and bills payables are short-term in nature and hence, the carrying amount of trade and bills
payables are considered to approximate to their fair value.
The Company
As at December 31,
As at
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/H1118/H1118/H1118/H1118/H111847,962 32,912 11,768 23,583
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,901 – 25,102 7,105
54,863 32,912 36,870 30,688
A credit period is 30 days to 90 days, if applicable, from the date of billing is generally granted by the
Company’s trade suppliers. Based on the receipt of services and goods, which normally coincided with the invoice
dates, the aging analysis of the Company’s trade and bills payables as at the end of each reporting period is as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,626 32,670 36,525 29,811
1-2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5 104 533
Over 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118237 237 241 344
54,863 32,912 36,870 30,688
The Company’s trade and bills payables are short-term in nature and hence, the carrying amount of trade and
bills payables are considered to approximate to their fair value.
APPENDIX I ACCOUNTANT’S REPORT
– I-45 –


--- page 348 ---
25. OTHER PAYABLES AND ACCRUALS
The Group
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Amount due to shareholder (note a) /H1118 100,000 – – –
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118769 1,135 1,057 3,032
Construction payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,676 177,155 130,159 92,137
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,289 2,177 2,458 7,759
Accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,343 11,264 11,415 6,561
182,077 191,731 145,089 109,489
As at December 31, 2022, 2023 and 2024 and as at September 30, 2025, other payables and accruals were
non-interest bearing, unsecured and repayable on demand.
Note:
(a) It is of a non-trade nature. It represented the cash proceeds received from a new shareholder as at
December 31, 2022, due to the incomplete registration of new shares. The balance was recognized as
share capital and capital reserve in 2023 upon the completion of the registration of new shares.
The Company
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Amount due to shareholder (note a) /H1118 100,000 – – –
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118769 1,135 1,034 2,795
Construction payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,676 177,155 130,143 91,940
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,289 2,177 2,296 7,604
Accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,343 11,264 9,446 5,282
182,077 191,731 142,919 107,621
As at December 31, 2022, 2023 and 2024 and as at September 30, 2025, other payables and accruals were
non-interest bearing, unsecured and repayable on demand.
Note:
(a) It is of a non-trade nature. It represented the cash proceeds received from a new shareholder as at
December 31, 2022, due to the incomplete registration of new shares. The balance was recognized as
share capital and capital reserve in 2023 upon the completion of the registration of new shares.
APPENDIX I ACCOUNTANT’S REPORT
– I-46 –


--- page 349 ---
26. CONTRACT LIABILITIES
(a) Contract liabilities
The Group
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contract liabilities arising from
Turnkey service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,757 3,730 6,795 736
The contract liabilities represented the advance consideration received from customers. The Group receives
payment from customers based on billing schedule as established in contracts.
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 recognized that was
included in the contract
liabilities balance at the
beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118846 5,757 3,730 3,730 6,795
The Company
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contract liabilities arising from
Turnkey service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,757 3,730 6,371 23
The contract liabilities represented the advance consideration received from customers. The Company receives
payment from customers based on billing schedule as established in contracts.
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 recognized that was
included in the contract
liabilities balance at the
beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118846 5,757 3,730 3,730 6,371
APPENDIX I ACCOUNTANT’S REPORT
– I-47 –


--- page 350 ---
27. LEASE LIABILITIES
The Group
The Group lease properties to operate its business. These leases are typically made for fixed terms of 2 years.
Lease terms are negotiated on an individual basis and contain different payments and conditions. These lease
agreements do not impose any covenants, but leased assets may not be used as security for borrowing purpose.
The Group also lease properties with term of less than one year. These leases are short-term and the Group has
elected not to recognize right-of-use assets and lease liabilities for these leases.
The Group’s present value of future lease payments of the leases is analyzed as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344 261 67 66
The Group’s movement of the lease liabilities is analyzed as follows:
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)
At the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118554 344 261 261 67
Addition of new leases /H1118/H1118/H1118/H1118412 795 133 133 132
Lease payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(495) (848) (178) (178) (134)
Interest element of lease
payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 1 8221
Termination of lease /H1118/H1118/H1118/H1118/H1118/H1118(136) (48) (151) (151) –
At the end of the year/period /H1118 344 261 67 67 66
The Group had total financing cash outflows for leases of RMB495,000, RMB848,000, RMB178,000,
RMB178,000 and RMB134,000 for the years ended December 31, 2022, 2023 and 2024 and nine months ended
September 30, 2024 and 2025, respectively.
The Group’s future lease payments of the Group’s leases (excluding short-term leases) were scheduled to repay
as follows:
Future lease
payments
Future interest
expenses Present value
RMB’000 RMB’000 RMB’000
As at December 31, 2022
– within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118350 (6) 344
As at December 31, 2023
– within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118263 (2) 261
As at December 31, 2024
– within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867 – 67
As at September 30, 2025
– within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866 – 66
APPENDIX I ACCOUNTANT’S REPORT
– I-48 –


--- page 351 ---
The Company
The Company lease properties to operate its business. These leases are typically made for fixed terms of 2
years. Lease terms are negotiated on an individual basis and contain different payments and conditions. These lease
agreements do not impose any covenants, but leased assets may not be used as security for borrowing purpose.
The Company also lease properties with term of less than one year. These leases are short-term and the
Company has elected not to recognize right-of-use assets and lease liabilities for these leases.
The Company’s present value of future lease payments of the leases is analyzed as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344 261 – –
The Company’s movement of the lease liabilities is analyzed as follows:
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)
At the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118554 344 261 261 –
Addition of new leases /H1118/H1118/H1118/H11184 1 2 7 9 5–––
Lease payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(495) (848) (112) (112) –
Interest element of lease
payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 1 822–
Termination of lease /H1118/H1118/H1118/H1118/H1118/H1118(136) (48) (151) (151) –
At the end of the year/period /H1118 3 4 4 2 6 1–––
The Company had total financing cash outflows for leases of RMB495,000, RMB848,000, RMB112,000,
RMB112,000 and nil for the years ended December 31, 2022, 2023 and 2024 and nine months ended September 30,
2024 and 2025, respectively.
The Company’s future lease payments of the Company’s leases (excluding short-term leases) were scheduled
to repay as follows:
Future lease
payments
Future interest
expenses Present value
RMB’000 RMB’000 RMB’000
As at December 31, 2022
– within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118350 (6) 344
As at December 31, 2023
– within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118263 (2) 261
As at December 31, 2024
– within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
As at September 30, 2025
– within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
APPENDIX I ACCOUNTANT’S REPORT
– I-49 –


--- page 352 ---
28. BORROWINGS
The Group
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current portion
Borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118118,031 245,376 247,500 34,721
Borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,374 69,805 56,036 30,304
142,405 315,181 303,536 65,025
Non-current portion
Borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118142,901 252,955 309,408 230,147
Borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,882 558,856 499,186 474,366
170,783 811,811 808,594 704,513
313,188 1,126,992 1,112,130 769,538
As at December 31, 2022, 2023 and 2024 and as at September 30, 2025, the borrowings bear interest rates
ranging from 2.34% to 4%, the effective interest rates ranging from 1.42% to 2.9%. None of the borrowings contains
a repayment-on-demand clause. The Group has complied with the relevant covenants at each test date on or before
the end of the reporting period and classified the related bank borrowings balances as non-current. The secured
borrowings were pledged by property, plant and equipment of RMB91,836,000, RMB675,199,000, RMB579,099,000
and RMB545,908,000 as at 31 December 2022, 2023, 2024 and September 30, 2025, respectively, and by bills
receivable of RMBnil, RMB3,000,000, RMBnil and RMB257,000 as at 31 December 2022, 2023 and 2024 and as at
September 30, 2025, respectively.
The Company
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current portion
Borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118118,031 245,376 211,512 34,721
Borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,374 69,805 56,036 30,304
142,405 315,181 267,548 65,025
Non-current portion
Borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118142,901 252,955 309,408 230,147
Borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,882 558,856 499,186 474,366
170,783 811,811 808,594 704,513
313,188 1,126,992 1,076,142 769,538
As at December 31, 2022, 2023 and 2024 and as at September 30, 2025, the borrowings bear interest rates
ranging from 2.34% to 4%, the effective interest rates ranging from 1.42% to 2.89%. None of the borrowings contains
a repayment-on-demand clause. The Company has complied with the relevant covenants at each test date on or before
the end of the reporting period and classified the related bank borrowings balances as non-current. The secured
borrowings were pledged by property, plant and equipment of RMB91,836,000, RMB675,199,000, RMB548,210,000
and RMB517,620,000 as at 31 December 2022, 2023, 2024 and as at September 30, 2025, respectively, and by bills
receivable of RMBnil, RMB3,000,000, RMBnil and RMB257,000 as at 31 December 2022, 2023 and 2024 and as at
September 30, 2025, respectively.
APPENDIX I ACCOUNTANT’S REPORT
– I-50 –


--- page 353 ---
29. DEFERRED REVENUE
The Group and the Company
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year/period /H1118 60,816 100,230 205,569 260,764
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,922 152,689 167,089 154,300
Credited to profit or loss (note 8) /H1118/H1118 (13,508) (47,350) (111,894) (103,035)
At the end of the year/period /H1118/H1118/H1118/H1118/H1118100,230 205,569 260,764 312,029
Deferred revenue consists of deferred government grants mainly for construction of certain property, plant and
equipment. The grants from local government were conditional and the conditions would be fulfilled upon the
completion of construction of certain property, plant and equipment of the Group. The grants will be recognized as
income in profit or loss on a systematic basis over the estimated useful lives of the property, plant and equipment.
30. DERIV ATIVES FINANCIAL INSTRUMENTS
The Group
The Group recognises all derivative financial instruments on the consolidated statements of financial position
at fair value with changes in fair value recognized in the consolidated statements of profit or loss and other
comprehensive income in the years/periods of the change. The Group’s derivative financial instrument includes
forward foreign exchange contracts.
As at December 31, 2022, 2023 and 2024 and as at September 30, 2025, the Group’s derivative financial
instruments mature within one year. The fair values of derivative financial instruments included in the consolidated
statements of financial position as current liabilities are as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current liabilities
Forward foreign exchange contracts
– within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,140
31. REDEMPTION LIABILITIES
The Group and the Company
The movements of the redemption liabilities during the Track Record Period are set out as below:
Redemption liabilities
RMB’000
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118197,812
Interest expenses associated with redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,825
At December 31, 2022 and at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213,637
Derecognition due to termination of redemption rights /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(211,351)
Interest expenses associated with redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,387
At December 31, 2023 and at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,673
Interest expenses associated with redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,334
At December 31, 2024 and at January 1, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,007
Interest expenses associated with redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344
Derecognition due to termination of redemption rights /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,351)
At September 30, 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
APPENDIX I ACCOUNTANT’S REPORT
– I-51 –


--- page 354 ---
Prior to the Track Record Period, the Company entered into respective shareholders’ and share subscription
agreements (collectively, the “Pre-IPO Investors Agreements) with various pre-IPO investors (collectively, the
“Pre-IPO Investors”) and issued ordinary shares. Pursuant to the Pre-IPO Investors Agreements, the Pre-IPO
Investors were granted by the Company with redemption rights.
The redemption rights that existed during the Track Record Period are limited to instances where the Company
and its original shareholder maliciously breach the clause in the Pre-IPO Investors Agreements and fail to rectify the
breach in a timely manner. If such breaches occurred and remained unrectified, the Pre-IPO Investors were entitled
to exercise the right to put back the ordinary shares they had acquired from the Company. The Company has
confirmed that there have been no breaches of the Pre-IPO Investors Agreements during the Track Record Period, and
all but one redemption rights were formally terminated pursuant to supplemental agreements executed in October
2023 and the remaining one redemption rights was formally terminated pursuant to supplemental agreement executed
in April 2025.
The redemption amount is the sum of 100% of the issue price, compound interest of eight percent per annum
calculated on a 365-day per year basis from the date of the Pre-IPO Investors Agreements.
32. SHARE CAPITAL
The Company
A summary of movements in the Company’s share capital is as follows:
Number of shares
in issue Share capital
Issued RMB’000
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210,727,295 210,727
Shares issued (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,117,451 4,118
At December 31, 2022 and at January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118214,844,746 214,845
Shares issued (b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,672,863 3,672
Issue of RSUs (Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,598,888 25,599
Capitalization issue (c) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118144,075,632 144,076
At December 31, 2023 and at January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118388,192,129 388,192
Shares issued (d) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,900,631 15,901
At December 31, 2024, January 1, 2025 and at
September 30, 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/H1118404,092,760 404,093
Notes:
(a) During the year ended December 31, 2022, the Company entered into various capital injection
agreements with the following investors and pursuant to which a total capital of RMB252,302,000 was
injected into the Company with RMB4,118,000 and RMB248,184,000 credited to the Company’s share
capital and capital reserve, respectively.
(i) In March 2022, Xiamen Qingda Runyu V enture Capital Partnership (Limited Partnership) (ژ
̹૶ɽᆗ͗௴ุҳ༟ΥྫΆุ(Υྫ)), the Company and the largest shareholder of the
Company entered into a capital injection agreement pursuant to which the investor subscribed for
the Company’s new share capital of RMB769,000 at a cash consideration of RMB50,001,000, in
which the excess amount of RMB49,232,000 was credited to the capital reserve.
(ii) In December 2021, Liaoning Haitong New Kinetic Energy Equity Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)), Shanghai Zhezhong
Group Co., Ltd. (ʮ̡), the Company and the largest shareholder of the
Company entered into a capital injection agreement pursuant to which the investors subscribed
APPENDIX I ACCOUNTANT’S REPORT
– I-52 –


--- page 355 ---
for the Company’s new share capital of RMB1,132,000 and RMB755,000, respectively, at cash
consideration of RMB60,000,000 and RMB40,000,000, respectively, in which the excess amounts
of RMB58,868,000 and RMB39,245,000, respectively, were credited to the capital reserve. The
shares were issued in 2022.
(iii) In November 2022, Xiamen Qingda Xinsheng V enture Capital Partnership (Limited Partnership)
(ସ௴ุҳ༟ΥྫΆุ(Υྫ)), Huzhou Runxu Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), Ningbo Fuwurong Wuxiali
Equity Investment Fund Partnership (Limited Partnership) (Υྫ
Άุ(Υྫ)), Xiamen Jiadong Property Institute Investment Partnership (Limited
Partnership) (৫ҳ༟ΥྫΆุ(Υྫ)), the Company and the largest shareholder
of the Company entered into a capital injection agreement pursuant to which the investors
subscribed for the Company’s new share capital of RMB603,000, RMB287,000, RMB286,000
and RMB286,000, respectively, at cash consideration of RMB42,200,000, RMB20,101,000,
RMB20,000,000 and RMB20,000,000, respectively, in which the excess amounts of
RMB41,597,000, RMB19,814,000, RMB19,714,000 and RMB19,714,000, respectively, were
credited to the capital reserve.
(b) During the year ended December 31, 2023, the Company entered into various capital injection and share
subscription agreements with the following investors and pursuant to which a total capital of
RMB280,000,000 was injected into the Company with RMB3,672,000 and RMB276,328,000 credited
to the Company’s share capital and capital reserve, respectively.
(i) In December 2022, Hefei Chantou Tiancheng Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), the Company and the largest
shareholder of the Company entered into a capital injection agreement pursuant to which the
investor subscribed for the Company’s new share capital of RMB1,080,000 at a cash
consideration of RMB100,000,000, in which the excess amount of RMB98,920,000 was credited
to the capital reserve. The shares were issued in 2023.
(ii) In June 2023, Ningbo Huajinming Jiade V enture Capital Partnership (Limited Partnership) (ت
ശᎀთྗᅃ௴ุҳ༟ΥྫΆุ(Υྫ)) and the Company entered into a capital injection
agreement pursuant to which the investor subscribed for the Company’s new share capital of
RMB154,000 at a cash consideration of RMB10,000,000, in which the excess amount of
RMB9,846,000 was credited to the capital reserve.
(iii) In June 2023, Ningbo Huajin Y uxing V enture Capital Partnership (Limited Partnership) (ശ
ᎀ๬ጳ௴ุҳ༟ΥྫΆุ(Υྫ)) and the Company entered into a capital injection agreement
pursuant to which the investor subscribed for the Company’s new share capital of RMB154,000
at a cash consideration of RMB10,000,000, in which the excess amount of RMB9,846,000 was
credited to the capital reserve.
(iv) In June 2023, Jiangyin Yinrun Equity Investment Partnership (Limited Partnership) (ٰ
ᛆҳ༟ΥྫΆุ(Υྫ)) and the Company entered into a capital injection agreement pursuant
to which the investor subscribed for the Company’s new share capital of RMB981,000 at a cash
consideration of RMB70,000,000, in which the excess amount of RMB69,019,000 was credited
to the capital reserve.
(v) In June 2023, Shanghai Minshenshi Management Consulting Partnership (Limited Partnership) ɪ
ऎઽ͡ྼ၍ଣፔ༔ΥྫΆุ(Υྫ) and the Company entered into a capital injection
agreement pursuant to which the investor subscribed for the Company’s new share capital of
RMB463,000 at a cash consideration of RMB30,000,000, in which the excess amount of
RMB29,537,000 was credited to the capital reserve.
(vi) In June 2023, Zhuji Dongzheng Ruikun Equity Investment Partnership (Limited Partnership) ( መ
ᛆҳ༟ΥྫΆุ(Υྫ)) and the Company entered into a capital injection
agreement pursuant to which the investor subscribed for the Company’s new share capital of
RMB840,000 at a cash consideration of RMB60,000,000, in which the excess amount of
RMB59,160,000 was credited to the capital reserve.
APPENDIX I ACCOUNTANT’S REPORT
– I-53 –


--- page 356 ---
(c) Pursuant to the shareholders’ meeting on April 23, 2023 and the promoters’ agreement dated April 26,
2023, the then existing shareholders of the Company agreed to convert the Company into a joint stock
limited liability company with a share capital of RMB360,000,000. The capitalisation issue of
RMB144,076,000 represents the increase in the Company’s registered capital from RMB215,925,000,
which is the registered capital before the conversion, which included the registered capital of
RMB214,845,000 as at January 1, 2023 and an additional RMB1,080,000 from a share issue completed
in January 2023 stated in Note 32(b)(i), to the target registered capital of RMB360,000,000 upon
conversion. Pursuant to the promoters’ agreement, the net asset value of the Company as of February
28, 2023 amounted to approximately RMB941,508,000, of which (i) RMB360,000,000 was converted
into 360,000,000 shares of RMB1.0 par value each, which were subscribed by and issued to the then
shareholders of the Company in proportion to their respective equity interest in the Company; and (ii)
the remaining amount of approximately RMB581,508,000 was converted into capital reserve of the
Company. Concurrently, the balances of statutory reserve and retained earnings as of February 28, 2023,
amounting to RMB1,417,000 and RMB88,643,000, respectively, were transferred to capital reserve as
part of the conversion process to align with the capital structure requirements of a joint stock company.
Upon the completion of registration with the relevant government bureau in May 2023, the Company
was converted into a joint stock company with limited liability.
(d) During the year ended December 31, 2024, the Company entered into a capital injection agreement with
the following investors and pursuant to which a total capital of RMB1,030,001,000 was injected into the
Company with RMB15,901,000 and RMB1,014,100,000 credited to the Company’s share capital and
capital reserve, respectively.
In December 2024, Xiamen Chantou Juxiang Xinhan Technology Investment Partnership Enterprise
(Limited Partnership) (Ҧҳ༟ΥྫΆุ(Υྫ)), ICBC Financial Asset
Investment Co., Ltd. (ʮ̡), Xiamen Gongrong Industry Investment Emerging
Industry Equity Investment Fund Partnership (Limited Partnership) (ᛆҳ༟ਿ
ΥྫΆุ(Υྫ)), Xiamen Chantou Gongrong Emerging Industry Equity Investment Fund
Partnership Enterprise (Limited Partnership) (ΥྫΆุ(Υ
ྫ)) and the Company entered into a capital injection agreement pursuant to which the investors
subscribed for the Company’s new share capital of RMB2,779,000, RMB6,947,000, RMB3,087,000 and
RMB3,088,000, respectively, at cash consideration of RMB180,000,000, RMB450,000,000,
RMB200,000,000 and RMB200,001,000, respectively, in which the excess amounts of
RMB177,221,000, RMB443,053,000, RMB196,913,000 and RMB196,913,000, respectively, were
credited to the capital reserve.
33. RESERVES
The Group and the Company
The Group’s reserves and the movements therein for the years ended December 31, 2022, 2023 and 2024, and
nine months ended September 30, 2024 (unaudited) and 2025 are presented in the consolidated statements of changes
in equity and the summary to the Company’s reserve as set out below, respectively.
Summary to the Company’s reserve is as follows:
Capital
reserve*
Statutory
reserve*
Other
reserve*
Share-based
payment
reserve*
(Accumulated
losses)/
retained
earnings* Total reserve
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 33(a)) (Note 33(b)) (Note 33(e)) (Note 33(d)) (Note 33(c))
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118291,368 – (121,133) – (205,880) (35,645)
Profit and total comprehensive
income for the year /H1118/H1118/H1118/H1118/H1118/H1118–––– 127,543 127,543
Shares issued (Note 32(a)) /H1118/H1118/H1118248,184 – – – – 248,184
Transfer to statutory reserve /H1118/H1118 – 1,417 – – (1,417) –
Recognition of equity-settled
share-based payments
(Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,575 – – – – 28,575
APPENDIX I ACCOUNTANT’S REPORT
– I-54 –


--- page 357 ---
Capital
reserve*
Statutory
reserve*
Other
reserve*
Share-based
payment
reserve*
(Accumulated
losses)/
retained
earnings* Total reserve
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 33(a)) (Note 33(b)) (Note 33(e)) (Note 33(d)) (Note 33(c))
Balance at December 31, 2022
and January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118568,127 1,417 (121,133) – (79,754) 368,657
Profit and total comprehensive
income for the year /H1118/H1118/H1118/H1118/H1118/H1118–––– 107,505 107,505
Shares issued (Note 32(b)) /H1118/H1118/H1118276,328 – – – – 276,328
Capitalization issue
(Note 32(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(144,076) – – – – (144,076)
Derecognition due to
termination of redemption
rights (Note 31) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 211,351 – – 211,351
Conversion into a joint stock
limited liability company
(Note 32(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890,060 (1,417) – – (88,643) –
Transfer to statutory reserve /H1118/H1118 – 5,168 – – (5,168) –
Recognition of equity-settled
share-based payments
(Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118156,974 – – 99,236 – 256,210
Balance at December 31, 2023
and January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118947,413 5,168 90,218 99,236 (66,060) 1,075,975
Profit and total comprehensive
income for the year /H1118/H1118/H1118/H1118/H1118/H1118–––– 166,074 166,074
Shares issued (Note 32(b)) /H1118/H1118/H11181,014,100 – – – – 1,014,100
Transfer to statutory reserve /H1118/H1118 – 16,173 – – (16,173) –
Recognition of equity-settled
share-based payments
(Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 154,249 – 154,249
Balance at December 31, 2024
and January 1, 2025 /H1118/H1118/H1118/H1118/H1118/H11181,961,513 21,341 90,218 253,485 83,841 2,410,398
Profit and total comprehensive
income for the period /H1118/H1118/H1118/H1118–––– 16,969 16,969
Transfer to statutory reserve /H1118/H1118 – 1,739 – – (1,739) –
Derecognition due to
termination of redemption
rights (Note 31) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 18,351 – – 18,351
Recognition of equity-settled
share-based payments
(Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 124,484 – 124,484
Balance at September 30,
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,961,513 23,080 108,569 377,969 99,071 2,570,202
Balance at January 1, 2024 /H1118/H1118/H1118947,413 5,168 90,218 99,236 (66,060) 1,075,975
Profit and total comprehensive
income for the period /H1118/H1118/H1118/H1118–––– 1 18,868 118,868
Transfer to statutory reserve /H1118/H1118 – 11,987 – – (11,987) –
Recognition of equity-settled
share-based payments
(Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 141,163 – 141,163
Balance at September 30, 2024
(Unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118947,413 17,155 90,218 240,399 40,821 1,336,006
* These reserve accounts comprise the reserves as at December 31, 2022, 2023, 2024 and as at September
30, 2025 in the Company’s statements of financial position.
APPENDIX I ACCOUNTANT’S REPORT
– I-55 –


--- page 358 ---
(a) Capital reserve
The capital reserve represents the excess of capital contributions from the equity holders of the Company over
the share capital.
(b) Statutory reserve
In accordance with the PRC Company Law and the articles of association of the entities established in the PRC,
PRC group entities are required to appropriate 10% of their net profits after tax, as determined under the generally
accepted accounting principles of the PRC, to the statutory reserve until the reserve balance reaches 50% of their
respective registered capital. Subject to certain restrictions set out in the relevant PRC regulations and in the articles
of association of the group entities, the statutory reserve may be used either to offset losses, or to be converted to
increase share capital provided that the balance after such conversion is not less than 25% of the registered capital
of the group entities. The reserve cannot be used for purposes other than those for which it is created and is not
distributable as cash dividends.
(c) (Accumulated losses)/retained earnings
Cumulative net profit and loss recognized in profit or loss.
(d) Share-based payment reserve
The equity-settled share-based payment reserve comprises the fair value of equity-settled share-based payment
granted (Note 38).
(e) Other reserve
The other reserve comprises the amounts in relation to the recognition of the redemption liabilities as set out
in Note 31.
34. AMOUNT DUE FROM A SUBSIDIARY
As at December 31, 2022, 2023 and 2024 and as at September 30, 2025, the balance is unsecured, interest-free
and repayable on demand.
35. NOTES SUPPORTING TO CONSOLIDATED STATEMENTS OF CASH FLOWS
The table below shows the details about the changes in the Group’s liabilities arising from financing activities.
Liabilities arising from financing activities are those for which each cash flows were, or future cash flows will be,
classified in the Group’s consolidated statements of cash flows from financing activities.
Redemption
liabilities Borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118197,812 101,323 554 299,689
Changes from financing cash
flows:
Proceeds from bank borrowings /H1118/H1118/H1118 – 295,151 – 295,151
Repayments of bank borrowings /H1118/H1118/H1118 – (83,286) – (83,286)
Repayment of lease liabilities /H1118/H1118/H1118/H1118/H1118– – (486) (486)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,600) (9) (4,609)
Total changes from financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 207,265 (495) 206,770
Other changes:
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 412 412
Lease termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (136) (136)
Interest expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,825 4,600 9 20,434
15,825 4,600 285 20,710
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213,637 313,188 344 527,169
APPENDIX I ACCOUNTANT’S REPORT
– I-56 –


--- page 359 ---
Redemption
liabilities Borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
At January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213,637 313,188 344 527,169
Changes from financing cash
flows:
Proceeds from bank borrowings /H1118/H1118/H1118 – 1,021,745 – 1,021,745
Repayments of bank borrowings /H1118/H1118/H1118 – (207,941) – (207,941)
Repayment of lease liabilities /H1118/H1118/H1118/H1118/H1118– – (830) (830)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (18,168) (18) (18,186)
Total changes from financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 795,636 (848) 794,788
Other changes:
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 795 795
Derecognition due to termination of
redemption rights /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(211,351) – – (211,351)
Lease termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (48) (48)
Interest expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,387 18,168 18 32,573
(196,964) 18,168 765 (178,031)
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,673 1,126,992 261 1,143,926
Redemption
liabilities Borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
At January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,673 1,126,992 261 1,143,926
Changes from financing cash
flows:
Proceeds from bank borrowings /H1118/H1118/H1118 – 744,826 – 744,826
Repayments of bank borrowings /H1118/H1118/H1118 – (759,688) – (759,688)
Repayment of lease liabilities /H1118/H1118/H1118/H1118/H1118– – (176) (176)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (30,135) (2) (30,137)
Total changes from financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (44,997) (178) (45,175)
Other changes:
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 133 133
Lease termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (151) (151)
Interest expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,334 30,135 2 31,471
1,334 30,135 (16) 31,453
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,007 1,112,130 67 1,130,204
Redemption
liabilities Borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
At January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,673 1,126,992 261 1,143,926
Changes from financing cash
flows:
Proceeds from bank borrowings /H1118/H1118/H1118 – 595,350 – 595,350
Repayments of bank borrowings /H1118/H1118/H1118 – (284,198) – (284,198)
Repayment of lease liabilities /H1118/H1118/H1118/H1118/H1118– – (176) (176)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (21,410) (2) (21,412)
Total changes from financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 289,742 (178) 289,564
APPENDIX I ACCOUNTANT’S REPORT
– I-57 –


--- page 360 ---
Redemption
liabilities Borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
Other changes:
New lease /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 133 133
Lease termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (151) (151)
Interest expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,000 21,410 2 22,412
1,000 21,410 (16) 22,394
At September 30, 2024 (Unaudited) /H1118 17,673 1,438,144 67 1,455,884
Redemption
liabilities Borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
At January 1, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,007 1,112,130 67 1,130,204
Changes from financing cash
flows:
Proceeds from bank borrowings /H1118/H1118/H1118 – 60,730 – 60,730
Repayments of bank borrowings /H1118/H1118/H1118 – (403,322) – (403,322)
Repayment of lease liabilities /H1118/H1118/H1118/H1118/H1118– – (133) (133)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (9,919) (1) (9,920)
Total changes from financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (352,511) (134) (352,645)
Other changes:
New lease /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 132 132
Derecognition due to termination of
redemption rights /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,351) – – (18,351)
Interest expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344 9,919 1 10,264
(18,007) 9,919 133 (7,955)
At September 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 769,538 66 769,604
36. CAPITAL COMMITMENTS
The Group
As at December 31, 2022, 2023 and 2024 and as at September 30, 2025, the Group had outstanding capital
commitments as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contracted, but not provided for:
– Construction-in-progress /H1118/H1118/H1118/H1118/H1118847,726 88,246 90,277 71,903
– Office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111 324 157 462
847,837 88,570 90,434 72,365
APPENDIX I ACCOUNTANT’S REPORT
– I-58 –


--- page 361 ---
The Company
As at December 31, 2022, 2023 and 2024 and as at September 30, 2025, the Company had outstanding capital
commitments as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Authorised but not contracted for:
– Unpaid share capital of
subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 5 5
Contracted, but not provided for:
– Construction-in-progress /H1118/H1118/H1118/H1118/H1118847,726 88,246 90,277 71,903
– Office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111 324 157 462
847,837 88,570 90,434 72,420
37. RELATED PARTY TRANSACTIONS
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party,
or exercise significant influence over the other party in making financial and operating decisions. Parties are also
considered to be related if they are subject to common control or common significant influence.
(a) The directors of the Company are of the view that the following parties/companies were related parties that
had transactions or balances with the Group:
Name of related parties Relationship with the Group
Ҧ(ɪऎ)ʮ̡/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company subject to common significant influence
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company subject to common significant influence
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company subject to common significant influence
(b) The Group entered into the following related party transactions with related companies during the Track
Record Period:
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)
Related companies
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,408 20,729 25,841 14,805 22,997
The terms of the related party transactions carried out during the Track Record Period were mutually agreed
by the Group and the related companies.
(c) Balance with related parties
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,186 238 –
ʮ̡/H1118/H1118/H1118/H1118/H11181,897 541 8,762 451
All of the above related party balances are of trade nature.
APPENDIX I ACCOUNTANT’S REPORT
– I-59 –


--- page 362 ---
(d) Compensation of key management personnel of the Group
The compensation of key management personnel of the Group during the Track Record Period represented the
directors’ emoluments as disclosed in Note 14(a) to the Historical Financial Information.
38. SHARE-BASED PAYMENTS
In December 2022, one of the then shareholders of the Company sold its shares to one of the employees of
the Company, who is also the director of the Company, at a price below the fair value of the shares which was
primarily established with reference to a recent equity transaction of the Company close to the transaction date. The
share-based payment expenses of RMB28,575,000, which was the difference between the transaction price and the
fair value, was charged to profit or loss of the Group during the year ended December 31, 2022.
On June 21, 2023, the Group granted 25,598,888 RSUs of the Company to 24 eligible employees at a
subscription price of RMB1 per unit. According to the RSU scheme and employees’ agreements, the vesting periods
for 2,230,000 shares, 1,443,000 shares and 21,925,888 shares granted are nil, 3 years and 6 years, respectively, from
the grant date. The shares with vesting period are subject to the Company’s financial performance and individual
performance assessment. The fair values of the shares of RMB70.38 per share granted were primarily established with
reference to recent equity transaction of the Company close to the grant date.
On December 18, 2023, there is a modification of terms of RSUs, in which vesting period of all RSUs is 6
years, out of which 1,443,000 shares are subject to the Company’s financial performance and individual performance
assessment.
The fair values of the RSUs granted on June 21, 2023 and modified on December 18, 2023 were
RMB1,801,650,000 and RMB1,801,650,000, respectively. During the years ended December 31, 2023 and 2024 and
nine months ended September 30, 2024 and September 30, 2025, the Group recognized share-based payment
expenses of RMB256,210,000, RMB154,249,000, RMB141,163,000 and RMB124,484,000, respectively.
39. CAPITAL MANAGEMENT POLICIES AND PROCEDURES
The Group manages its capital to ensure that the entities in the Group will be able to continue as a going
concern while maximizing the return to shareholders through the optimization of the debt and equity balance.
The capital structure of the Group consists of debts which include total liabilities (which includes trade and
bills payables, other payables and accruals, income tax payables, borrowings, lease liabilities, derivative financial
liabilities, redemption liabilities and deferred tax liabilities) and total equity.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. The gearing
ratio is calculated as total liabilities divided by total equity. The gearing ratio were as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118764,109 1,400,132 1,421,901 1,076,395
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118583,502 1,464,167 2,813,484 2,977,464
Gearing ratio /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118131% 96% 51% 36%
APPENDIX I ACCOUNTANT’S REPORT
– I-60 –


--- page 363 ---
40. SUMMARY OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES BY CATEGORY
The Group
The following table shows the carrying amounts of financial assets and liabilities of the Group:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets
Financial assets at amortized cost:
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,995 75,666 127,740 268,707
Deposits and other receivables /H1118/H1118/H11181,153 1,074 2,230 10,832
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,622 20,622 – –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118274,417 549,521 2,030,653 1,832,787
401,187 646,883 2,160,623 2,112,326
Financial assets at FVOCI:
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,801 3,000 1,905 257
Financial liabilities
Financial liabilities measured at
amortized cost:
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H111854,863 32,912 71,883 154,964
Other payables and accruals,
excluding other tax payables /H1118/H1118180,788 189,554 142,631 101,730
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344 261 67 66
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213,637 16,673 18,007 –
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118313,188 1,126,992 1,112,130 769,538
762,820 1,366,392 1,344,718 1,026,298
Financial liabilities at FVPL:
Derivative financial instruments /H1118/H1118 – – – 2,140
The Company
The following table shows the carrying amounts of financial assets and liabilities of the Company:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets
Financial assets at amortized cost:
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,995 75,666 63,666 67,161
Deposits and other receivables /H1118/H1118/H11181,153 1,074 2,116 10,723
Amount due from a subsidiary /H1118/H1118/H1118 – – 210,709 421,229
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,622 20,622 – –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118274,417 549,521 2,022,075 1,705,055
401,187 646,883 2,298,566 2,204,168
Financial assets at FVOCI:
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,801 3,000 902 257
APPENDIX I ACCOUNTANT’S REPORT
– I-61 –


--- page 364 ---
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial liabilities
Financial liabilities measured at
amortized cost:
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H111854,863 32,912 36,870 30,688
Other payables and accruals,
excluding other tax payables /H1118/H1118180,788 189,554 140,623 100,017
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344 261 – –
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213,637 16,673 18,007 –
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118313,188 1,126,992 1,076,142 769,538
762,820 1,366,392 1,271,642 900,243
Financial liabilities at FVPL:
Derivative financial instruments /H1118/H1118 ––– 4 7 0
41. FINANCIAL INSTRUMENTS MEASURED AT FAIR V ALUE
The fair value hierarchy of financial instruments measured at fair value is provided below.
The Group
Level 2
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial liabilities
Derivative financial instruments
(fair value through profit or loss) /H1118 – – – 2,140
There were no transfers between levels during the period.
The valuation techniques and significant unobservable inputs used in determining the fair value measurement
of level 2 and level 3 financial instruments, as well as the inter-relationship between key unobservable inputs and
fair value, are set out in the table below.
Financial instrument Valuation techniques used
Significant unobservable
inputs (Level 3 only)
Inter-relationship between
key unobservable inputs
and fair value
(Level 3 only)
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Market approach
Execution value
quoted by banks
with reference to
the expected return
of the underlying
assets
Not applicable. Not applicable.
APPENDIX I ACCOUNTANT’S REPORT
– I-62 –


--- page 365 ---
42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Group’s financial instruments in the normal course of the Group’s business are
interest rate risk, credit risk, liquidity risk, equity price risk and foreign currency risk. These risks are limited by the
Group’s financial management policies and practices described below. Generally, the Group introduces conservative
strategies on its risk management. The Group has not used any derivatives and other instruments for hedging purposes
nor does it hold or issue derivative financial instruments for trading purposes.
(a) Interest rate risk
The Group’s interest-bearing financial instruments at variable rates as at December 31, 2022, 2023 and 2024
and as at September 30, 2025 are the cash at bank and term deposits except for fixed deposits, and the cash flow
interest risk arising from the change of market interest rate on these balances of relatively short maturity is not
considered significant. The Group’s interest-bearing financial instruments at fixed interest rates as at December 31,
2022, 2023 and 2024 and as at September 30, 2025 are fixed deposits, redemption liabilities and borrowings and the
change of market interest rate does not expose the Group to fair value interest risk. The directors of the Company
consider that the Group’s exposure to interest rate risk is not significant and no sensitivity analysis of interest rate
risk is presented.
(b) Credit risk
The Group’s credit risk is primarily attributable to its trade and bills receivables, deposits and other
receivables. Management has a credit policy in place and the exposures to these credit risks are monitored on an
ongoing basis.
In respect of trade and bills receivables, deposits and other receivables, credit evaluations are performed on
all debtors. 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 customers as well as pertaining to the economic environment
in which the customers operate. Ongoing credit evaluation is performed on the financial condition of trade customers
and, where appropriate, credit guarantee insurance cover is purchased. Trade and bills receivables are due from the
date of billing. Normally, the Group does not obtain collateral from customers.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The default risk of the industry and country in which customers operate also has an influence on credit risk but to
a lesser extent. Concentrations of credit risk are managed by customer/counterparty and by geographical region. The
Group had certain concentrations of credit risks as 68%, 0%, 26% and 12% of total trade receivables are due from
largest customer as at December 31, 2022, 2023, 2024 and September 30, 2025. The directors carry a periodic review
of the creditworthiness of these customers and consider that the exposure to such credit risk is minimal. Further
quantitative data in respect of the Group’s exposure to credit risk arising from trade receivables are disclosed in Note
42(b)(i). Other than above, the Group does not have any other significant concentration of credit risk.
The Group
(i) Trade and bills receivables
The Group measures loss allowances for trade and bills receivables at an amount equal to lifetime ECLs
individually and collectively using a provision matrix. As the Group’s historical credit loss experience does not
indicate significantly different loss patterns for different customer bases, the loss allowance based on past due status
is not further distinguished between the Group’s different customer bases. The bills receivable as at December 31,
2022, 2023, 2024 and as at September 30, 2025 were not yet past due. No loss allowance under the ECL model was
recognized, as the credit risk on the bills receivable was considered insignificant.
APPENDIX I ACCOUNTANT’S REPORT
– I-63 –


--- page 366 ---
The following table provides information about the Group’s exposure to credit risk and ECLs for trade
receivables as at the end of each reporting period:
Current
1t o3
months
3t o6
months
6 months
to 1 year
1t o2
years
2t o3
years
Over 3
years
Individually
assessed Total
At December 31, 2022
Expected loss rate (%) /H1118/H1118/H1118/H11181% 1% 1% N/A 20% N/A N/A N/A
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,613 9,051 213 – 1,465 – – – 106,342
Loss allowance (RMB’000) /H1118/H1118(956) (96) (2) – (293) – – – (1,347)
At December 31, 2023
Expected loss rate (%) /H1118/H1118/H1118/H11181% 1% N/A 5% 20% 50% N/A N/A
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,587 4,265 – 18 213 785 – – 76,868
Loss allowance (RMB’000) /H1118/H1118(716) (49) – (1) (43) (393) – – (1,202)
At December 31, 2024
Expected loss rate (%) /H1118/H1118/H1118/H11181% 1% 1% N/A 20% 50% 100% N/A
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,878 54,459 2,782 – 18 213 785 – 130,135
Loss allowance (RMB’000) /H1118/H1118(719) (752) (28) – (4) (107) (785) – (2,395)
At September 30, 2025
Expected loss rate (%) /H1118/H1118/H1118/H11181% 1% 1% 34.0% N/A 100% 100% N/A
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118219,538 37,367 14,505 780 – 231 785 – 273,206
Loss allowance (RMB’000) /H1118/H1118(2,698) (374) (145) (266) – (231) (785) – (4,499)
Expected loss rates are based on actual loss experience over the past 6 years. These rates are adjusted to reflect
differences between economic conditions during the Track Record Period over which the historical data has been
collected, current conditions and the Group’s view of economic conditions over the expected lives of the receivables.
Movements in the loss allowance for impairment of trade receivables are as follows:
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)
At the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118413 1,347 1,202 1,202 2,395
Provision/(reversal of
provision) for loss
allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118934 (145) 1,193 179 2,104
At the end of the year/period /H1118 1,347 1,202 2,395 1,381 4,499
Changes in loss allowance for impairment of trade receivables during the Track Record Period were mainly
contributed by the followings:
– For the years ended December 31, 2022, 2023 and 2024 and nine months ended September 30, 2024
(unaudited) and 2025, increase/(decrease) in the ending balances of trade receivables resulted in an
increase/(decrease) in loss allowance of and RMB934,000, RMB(145,000), RMB1,193,000,
RMB179,000 and RMB2,104,000, respectively.
APPENDIX I ACCOUNTANT’S REPORT
– I-64 –


--- page 367 ---
(ii) Deposits and other receivables
In respect of deposits and other receivables, the Group has applied the general approach prescribed by IFRS
9, by measuring loss allowance at an amount equal to 12-month ECLs or lifetime ECLs for deposits and other
receivables. To measure the ECLs, deposits and other receivables have been grouped based on shared credit risk
characteristics, ECLs are estimated based on historical credit loss experience, adjusted for factors that are specific
to the debtors and general economic conditions.
As at the end of each reporting period, all deposits and other receivables are measured at an amount equal to
12-month ECLs. However, when there has been a significant increase in credit risk since origination, the allowance
will be based on the lifetime ECLs. The following table provides information about the Group’s exposure to credit
risk and ECLs for deposits and other receivables:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Gross carrying amount
– Deposits and other receivables /H1118/H1118/H11181,214 1,131 2,347 10,961
Loss allowance
– Deposits and other receivables /H1118/H1118/H1118 61 57 117 129
Movements in the loss allowance account for impairment of deposits and other receivables are as follows:
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)
At the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894 61 57 57 117
(Reversal of provision)/
provision for loss
allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(33) (4) 60 21 12
At the end of the year/period /H1118 61 57 117 78 129
Changes in loss allowance for impairment of deposits and other receivables during the Track Record Period
were mainly contributed by the followings:
– For the years ended December 31, 2022, 2023 and 2024 and nine months ended September 30, 2024
(unaudited) and 2025, (decrease)/increase in the ending balances of deposits and other receivables
resulted in a (decrease)/increase in loss allowance of RMB(33,000), RMB(4,000), RMB60,000,
RMB21,000 and RMB12,000, respectively.
(iii) Cash and cash equivalents and term deposits
In respect of the Group’s cash and cash equivalents and term deposits, the directors of the Company consider
the probability of default is low on these balances since the counterparties are financial institutions with high credit
ratings or with good reputation.
APPENDIX I ACCOUNTANT’S REPORT
– I-65 –


--- page 368 ---
The Company
(i) Trade and bills receivables
The Company measures loss allowances for trade and bills receivables at an amount equal to lifetime ECLs
individually and collectively using a provision matrix. As the Company’s historical credit loss experience does not
indicate significantly different loss patterns for different customer bases, the loss allowance based on past due status
is not further distinguished between the Company’s different customer bases. The bills receivable as at December 31,
2022, 2023, 2024 and as at September 30, 2025 were not yet past due. No loss allowance under the ECL model was
recognized, as the credit risk on the bills receivable was considered insignificant.
The following table provides information about the Company’s exposure to credit risk and ECLs for trade
receivables as at the end of each reporting period:
Current
1t o3
months
3t o6
months
6 months
to 1 year
1t o2
years
2t o3
years
Over 3
years
Individually
assessed Total
At December 31, 2022
Expected loss rate (%) /H1118/H1118/H1118/H11181% 1% 1% N/A 20% N/A N/A N/A
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,613 9,051 213 – 1,465 – – – 106,342
Loss allowance (RMB’000) /H1118 (956) (96) (2) – (293) – – – (1,347)
At December 31, 2023
Expected loss rate (%) /H1118/H1118/H1118/H11181% 1% N/A 5% 20% 50% N/A N/A
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,587 4,265 – 18 213 785 – – 76,868
Loss allowance (RMB’000) /H1118 (716) (49) – (1) (43) (393) – – (1,202)
At December 31, 2024
Expected loss rate (%) /H1118/H1118/H1118/H11181% 1% 1% N/A 20% 50% 100% N/A
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,307 39,372 2,718 – 18 213 785 – 65,413
Loss allowance (RMB’000) /H1118 (323) (501) (27) – (4) (107) (785) – (1,747)
At September 30, 2025
Expected loss rate (%) /H1118/H1118/H1118/H11181% 1% 1% N/A N/A 100% 100% N/A
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,048 9,199 1,428 – – 231 785 – 68,691
Loss allowance (RMB’000) /H1118 (408) (92) (14) – – (231) (785) – (1,530)
Expected loss rates are based on actual loss experience over the past 6 years. These rates are adjusted to reflect
differences between economic conditions during the Track Record Period over which the historical data has been
collected, current conditions and the Company’s view of economic conditions over the expected lives of the
receivables.
Movements in the loss allowance for impairment of trade receivables are as follows:
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)
At the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118413 1,347 1,202 1,202 1,747
Provision/(reversal of
provision) for loss
allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118934 (145) 545 168 (217)
At the end of the year/period /H1118 1,347 1,202 1,747 1,370 1,530
APPENDIX I ACCOUNTANT’S REPORT
– I-66 –


--- page 369 ---
Changes in loss allowance for impairment of trade receivables during the Track Record Period were mainly
contributed by the followings:
– For the years ended December 31, 2022, 2023 and 2024 and nine months ended September 30, 2024
(unaudited) and 2025, increase/(decrease) in the ending balances of trade receivables resulted in an
increase/(decrease) in loss allowance of and RMB934,000, RMB(145,000), RMB545,000, RMB168,000
and RMB(217,000), respectively.
(ii) Deposits and other receivables
In respect of deposits and other receivables, the Company has applied the general approach prescribed by IFRS
9, by measuring loss allowance at an amount equal to 12-month ECLs or lifetime ECLs for deposits and other
receivables. To measure the ECLs, deposits and other receivables have been grouped based on shared credit risk
characteristics, ECLs are estimated based on historical credit loss experience, adjusted for factors that are specific
to the debtors and general economic conditions.
As at the end of each reporting period, all deposits and other receivables are measured at an amount equal to
12-month ECLs. However, when there has been a significant increase in credit risk since origination, the allowance
will be based on the lifetime ECLs. The following table provides information about the Company’s exposure to credit
risk and ECLs for deposits and other receivables:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Gross carrying amount
– Deposits and other receivables /H1118/H1118/H11181,214 1,131 2,227 10,838
Loss allowance
– Deposits and other receivables /H1118/H1118/H1118 61 57 111 115
Movements in the loss allowance for impairment of deposits and other receivables are as follows:
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)
At the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894 61 57 57 111
(Reversal of provision)/
provision for loss
allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(33) (4) 54 21 4
At the end of the year/period /H1118 61 57 111 78 115
Changes in loss allowance for impairment of deposits and other receivables during the Track Record Period
were mainly contributed by the followings:
– For the years ended December 31, 2022, 2023 and 2024 and nine months ended September 30, 2024
(unaudited) and 2025, (decrease)/increase in the ending balances of deposits and other receivables
resulted in a (decrease)/increase in loss allowance of RMB(33,000), RMB(4,000), RMB54,000,
RMB21,000 and RMB4,000, respectively.
(iii) Cash and cash equivalents and term deposits
In respect of the Company’s cash and cash equivalents and term deposits, the directors of the Company
consider the probability of default is low on these balances since the counterparties are financial institutions with high
credit ratings or with good reputation.
APPENDIX I ACCOUNTANT’S REPORT
– I-67 –


--- page 370 ---
(iv) Amount due from subsidiary
The amount due from subsidiary is mainly trade nature. The Company measures loss allowances for amount
due from subsidiary at an amount equal to lifetime ECLs individually and collectively using a provision matrix. As
the Company’s historical credit loss experience does not indicate significantly different loss patterns for different
customer bases, the loss allowance based on past due status is not further distinguished between the Company’s
different customer bases.
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Gross carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 213,201 423,142
Loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,492 1,913
Movements in the loss allowance for impairment of amount due from subsidiary is as follows:
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)
At the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 2,492
Provision/(reversal of
provision) for loss
allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,492 445 (579)
At the end of the year/period /H1118 – – 2,492 445 1,913
Changes in loss allowance for impairment of amount due from subsidiary during the Track Record Period were
mainly contributed by the followings:
– For the years ended December 31, 2022, 2023 and 2024 and nine months ended September 30, 2024
(unaudited) and 2025, (decrease)/increase in the ending balances of amount due from subsidiary resulted
in a (decrease)/increase in loss allowance of nil, nil and RMB2,492,000, RMB445,000 and
RMB(579,000), respectively.
(c) Liquidity risk
Ultimate responsibility for liquidity risk management rests with the directors of the Company, which has built
an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term
funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves.
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial
liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the
earliest date on which the Group can be required to pay. The tables include both interest and principal cash flows.
To the extent that interest flows are at floating rate, the undiscounted amounts are derived from current interest rate
at the end of each reporting period.
APPENDIX I ACCOUNTANT’S REPORT
– I-68 –


--- page 371 ---
The Group
Carrying
amount
Total
contractual
undiscounted
cash flows
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
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2022
Trade and bills payables /H1118/H1118/H1118/H1118/H111854,863 54,863 54,86 3–––
Other payables and accruals /H1118/H1118180,788 180,788 180,788 – – –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 4 4 3 5 0 3 5 0–––
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118213,637 213,637 213,637 – – –
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118313,188 334,822 151,178 76,246 107,398 –
762,820 784,460 600,816 76,246 107,398 –
Carrying
amount
Total
contractual
undiscounted
cash flows
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
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2023
Trade and bills payables /H1118/H1118/H1118/H1118/H111832,912 32,912 32,912 – – –
Other payables and accruals /H1118/H1118/H1118189,554 189,554 189,554 – – –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 6 1 2 6 3 2 6 3–––
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H111816,673 16,673 16,673 – – –
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,126,992 1,240,896 349,062 246,995 385,872 258,967
1,366,392 1,480,298 588,464 246,995 385,872 258,967
Carrying
amount
Total
contractual
undiscounted
cash flows
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
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2024
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H111871,883 71,883 71,883 – – –
Other payables and accruals /H1118/H1118/H1118142,631 142,631 142,631 – – –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867 67 67 – – –
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111818,007 18,007 18,007 – – –
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,112,130 1,244,892 335,835 163,592 465,163 280,302
1,344,718 1,477,480 568,423 163,592 465,163 280,302
Carrying
amount
Total
contractual
undiscounted
cash flows
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
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at September 30, 2025
Trade and bills payables /H1118/H1118/H1118/H1118/H1118154,964 154,964 154,964 – – –
Other payables and accruals /H1118/H1118101,730 101,730 101,730 – – –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 6 6 6 6 6–––
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,140 2,140 2,14 0–––
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118769,538 877,765 91,075 95,710 613,309 77,671
1,028,438 1,136,665 349,975 95,710 613,309 77,671
APPENDIX I ACCOUNTANT’S REPORT
– I-69 –


--- page 372 ---
The Company
Carrying
amount
Total
contractual
undiscounted
cash flows
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
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2022
Trade and bills payables /H1118/H1118/H1118/H1118/H111854,863 54,863 54,86 3–––
Other payables and accruals /H1118/H1118180,788 180,788 180,788 – – –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 4 4 3 5 0 3 5 0–––
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118213,637 213,637 213,637 – – –
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118313,188 334,822 151,178 76,246 107,398 –
762,820 784,460 600,816 76,246 107,398 –
Carrying
amount
Total
contractual
undiscounted
cash flows
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
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2023
Trade and bills payables /H1118/H1118/H1118/H1118/H111832,912 32,912 32,912 – – –
Other payables and accruals /H1118/H1118/H1118189,554 189,554 189,554 – – –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 6 1 2 6 3 2 6 3–––
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H111816,673 16,673 16,673 – – –
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,126,992 1,240,896 349,062 246,995 385,872 258,967
1,366,392 1,480,298 588,464 246,995 385,872 258,967
Carrying
amount
Total
contractual
undiscounted
cash flows
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
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2024
Trade and bills payables /H1118/H1118/H1118/H1118/H111836,870 36,870 36,870 – – –
Other payables and accruals /H1118/H1118/H1118140,623 140,623 140,623 – – –
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H111818,007 18,007 18,007 – – –
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,076,142 1,208,904 299,847 163,592 465,163 280,302
1,271,642 1,404,404 495,347 163,592 465,163 280,302
Carrying
amount
Total
contractual
undiscounted
cash flows
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
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at September 30, 2025
Trade and bills payables /H1118/H1118/H1118/H1118/H111830,688 30,688 30,68 8–––
Other payables and accruals /H1118/H1118/H1118100,017 100,017 100,017 – – –
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 7 0 4 7 0 4 7 0–––
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118769,538 877,765 91,075 95,710 613,309 77,671
900,713 1,008,940 222,250 95,710 613,309 77,671
APPENDIX I ACCOUNTANT’S REPORT
– I-70 –


--- page 373 ---
(d) Foreign currency risk
The Group
Foreign currency risk refers to the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates.
The Group has foreign currency exposures. Such exposures arise from the balances of assets and liabilities in
currencies other than the group entities’ functional currency. The carrying amounts of the foreign currency
denominated monetary assets and liabilities at the end of the reporting period are as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Assets
EURO (“EUR”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,985 344 – –
United state dollars (“USD”) /H1118/H1118/H1118/H1118/H11188,626 427,236 1,155,815 1,336,922
17,611 427,580 1,155,815 1,336,922
Liabilities
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,322 48,969 41,768 31,505
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,402 7,908 1,748 –
54,724 56,877 43,516 31,505
Management monitors foreign currency exposure by closely monitoring the movements of foreign currency
rates. Management has set up a policy to require the group entities to manage their foreign exchange risk against their
respective functional currency.
The following table indicates the approximate change in the Group’s profit before tax in response to reasonably
possible changes in the foreign exchange rates to which the Group has significant exposure at the end of the reporting
period. A positive number below indicates an increase in profit before tax where the RMB strengthens against the
relevant currency. For a weakening of the RMB against the relevant currency, there would be an equal and opposite
impact on the profit before tax, and the balances below would be negative. The 5% change in foreign exchange rate
is used when reporting foreign currency risk internally to key management personnel and represents management’s
best assessment of the possible changes in foreign exchange rates.
The following sensitivity analysis has been determined based on the assumed percentage changes in foreign
exchange rates taking place at the beginning of the reporting year/period and held constant throughout the
year/period.
As at December 31, As at September 30,
2022 2023 2024 2025
Increase/(decrease) in
profit before tax
Increase/(decrease) in
profit before tax
Increase/(decrease) in
profit before tax
Increase/(decrease) in
profit before tax
EUR USD EUR USD EUR USD EUR USD
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Changes in exchange rate:
RMB appreciates by 5%
against the foreign
currencies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118867 989 2,431 (20,966) 2,088 (57,703) 1,575 (66,846)
RMB depreciates by 5%
against the foreign
currencies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(867) (989) (2,431) 20,966 (2,088) 57,703 (1,575) 66,846
APPENDIX I ACCOUNTANT’S REPORT
– I-71 –


--- page 374 ---
The Company
Foreign currency risk refers to the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates.
The Company has foreign currency exposures. Such exposures arise from the balances of assets and liabilities
in currencies other than the Company’s functional currency. The carrying amounts of the foreign currency
denominated monetary assets and liabilities at the end of the reporting period are as follows:
As at December 31,
As at
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Assets
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,985 344 – –
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,626 427,236 1,102,345 1,120,533
17,611 427,580 1,102,345 1,120,533
Liabilities
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,322 48,969 41,768 31,505
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,402 7,908 1,748 –
54,724 56,877 43,516 31,505
Management monitors foreign currency exposure by closely monitoring the movements of foreign currency
rates. Management has set up a policy to require the Company to manage their foreign exchange risk against their
respective functional currency.
The following table indicates the approximate change in the Company’s profit before tax in response to
reasonably possible changes in the foreign exchange rates to which the Company has significant exposure at the end
of the reporting period. A positive number below indicates an increase in profit before tax where the RMB strengthens
against the relevant currency. For a weakening of the RMB against the relevant currency, there would be an equal
and opposite impact on the profit before tax, and the balances below would be negative. The 5% change in foreign
exchange rate is used when reporting foreign currency risk internally to key management personnel and represents
management’s best assessment of the possible changes in foreign exchange rates.
The following sensitivity analysis has been determined based on the assumed percentage changes in foreign
exchange rates taking place at the beginning of the reporting year/period and held constant throughout the
year/period.
As at December 31, As at September 30,
2022 2023 2024 2025
Increase/(decrease) in
profit before tax
Increase/(decrease) in
profit before tax
Increase/(decrease) in
profit before tax
Increase/(decrease) in
profit before tax
EUR USD EUR USD EUR USD EUR USD
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Changes in exchange rate:
RMB appreciates by 5%
against the foreign
currencies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118867 989 2,431 (20,966) 2,088 (55,030) 1,575 (56,027)
RMB depreciates by 5%
against the foreign
currencies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(867) (989) (2,431) 20,966 (2,088) 55,030 (1,575) 56,027
APPENDIX I ACCOUNTANT’S REPORT
– I-72 –


--- page 375 ---
43. CONTINGENCIES
During the years ended December 31, 2022, 2023, 2024 and nine months ended September 30, 2025, there were
ongoing disputes and legal proceeding between Xiamen Dangfeng Technology Co., Ltd. (“ Dangfeng Technology ”),
one of the shareholders of the Company, and Zhu Xiaomin ( ϡወს), an independent third party, as to the
shareholding of Dangfeng Technology in the Company. Zhu Xiaomin brought a legal action against Dangfeng
Technology and the Company, pursuant to which he alleged that Dangfeng Technology held certain shares in the
Company on trust for him, representing approximately 0.12% of the total issued share capital. As of December 31,
2024, such legal action was still ongoing and has not yet been settled. The court dismissed Zhu Xiaomin’s claims in
the first instance in April 2025 and Zhu Xiaomin filed an appeal in May 2025. Considering (i) as confirmed by the
PRC legal adviser of the Company, the Company will not be subject to cash or share payment obligations as a result
of such legal proceeding, and (ii) the shares in dispute only account for 0.12% of the total issued share capital, which
have no control or influence in the daily operation of the Company, the directors of the Company are of the view that
the dispute will not have a material adverse impact on the financial position and operation of the Group. Subsequent
to the filing of the appeal in May 2025, the Xiamen Intermediate People’s Court conducted a hearing in June 2025
and issued a final judgment in July 2025. The Court rejected Zhu Xiaomin’s request to be registered as a formal
shareholder of the Company on its official register.
As of September 30, 2025, there were no significant contingency items for the Group and the Company.
44. SUBSEQUENT EVENT
There was no material event subsequent to the Track Record Period to be disclosed.
45. SUBSEQUENT FINANCIAL INFORMATION
No audited financial statements have been prepared by the Group and the Company or any of the companies
comprising the Group in respect of any period subsequent to September 30, 2025.
APPENDIX I ACCOUNTANT’S REPORT
– I-73 –


--- page 376 ---
(A) UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets
of the Group attributable to owners of the Company prepared in accordance with paragraph
4.29 of the Listing Rules is for illustrative purpose only, and is set forth here to illustrate the
effect of the Global Offering on the consolidated net tangible assets of the Group attributable
to owners of the Company as of September 30, 2025 as if the Global Offering had taken place
on September 30, 2025.
This unaudited pro forma statement of adjusted consolidated net tangible assets of the
Group attributable to owners of the Company has been prepared for illustrative purposes only
and, because of its hypothetical nature, it may not give a true picture of the consolidated
financial position or results of the Group as of September 30, 2025 or at any future dates
following the Global Offering. It is prepared based on the audited consolidated net assets of
the Group attributable to owners of the Company as of September 30, 2025 as set out in the
Accountants’ Report on historical financial information of the Group, the text of which is set
out in Appendix I to this Prospectus, and adjusted as described below.
Consolidated net
tangible assets of
the Group
attributable to
owners of the
Company as of
September 30,
2025
Estimated
net proceeds
from the
Global Offering
Unaudited
pro forma adjusted
consolidated net
tangible assets of
the Group
attributable to
owners of the
Company as of
September 30,
2025
Unaudited
pro forma adjusted
consolidated net
tangible assets of
the Group
attributable
to owners of the
Company as of
September 30, 2025
per Share
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Note 2) (Note 3)
Based on Offer Price of
HK$76.26 per H Share /H1118/H1118/H11182,975,646 1,441,768 4,417,414 10.38 11.37
Notes:
(1) The consolidated net tangible assets of the Group attributable to owners of the Company as of September 30,
2025 is extracted from the Accountants’ Report set out in Appendix I to this Prospectus, which is based on the
audited consolidated net assets of our Group attributable to owners of the Company as of September 30, 2025
of approximately RMB2,977,464,000 with an adjustment for intangible assets as of September 30, 2025 of
approximately RMB1,818,000.
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$76.26 per Offer
Share, after deduction of the estimated underwriting fees and other related expenses paid or payable by the
Company, excluding the listing expenses that have been charged to profit or loss during the Track Record
Period.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 377 ---
(3) The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the
Company as of September 30, 2025 per Share is calculated based on a total of 425,584,810 Shares in issue
immediately following the completion of the Global Offering.
(4) For the purpose of this unaudited pro forma statement of adjusted consolidated net tangible assets, the
translation of Renminbi amounts into Hong Kong dollars has been made at a rate of RMB0.9130 to HK$1.00
as at September 30, 2025. No representation is made that Renminbi amounts have been, could have been or
could be converted to Hong Kong dollars, or vice versa, at that rate.
(5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of the Group
attributable to owners of the Company as of September 30, 2025 to reflect any trading or other transactions
of the Group entered into subsequent to September 30, 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 378 ---
(B) REPORT FROM REPORTING ACCOUNTANTS ON THE UNAUDITED PRO
FORMA FINANCIAL INFORMATION
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
To the directors of Epiworld International Co., Ltd
We have completed our assurance engagement to report on the compilation of unaudited
pro forma financial information of Epiworld International Limited (the “ Company ”) and its
subsidiaries (collectively the “ Group ”) by the directors of the Company (the “ Directors ”) for
illustrative purposes only. The unaudited pro forma financial information consists of the
unaudited pro forma statement of adjusted consolidated net tangible assets as at September 30,
2025 and related notes as set out on pages II-1 to II-2 of Appendix II to the Company’s
prospectus dated March 20, 2026 (the “ Prospectus ”) in connection with the proposed initial
public offering of the Company’s shares on the Main Board of The Stock Exchange of Hong
Kong Limited (the “ Global Offering ”). The applicable criteria on the basis of which the
Directors have compiled the unaudited pro forma financial information are described on pages
II-1 to II-2 of Appendix II of the Prospectus.
The unaudited pro forma financial information has been compiled by the Directors to
illustrate the impact of the Global Offering on the Group’s consolidated financial position as
at September 30, 2025 as if the Global Offering had taken place at September 30, 2025. As part
of this process, information about the Group’s consolidated financial position has been
extracted by the Directors from the Group’s historical financial information for nine months
ended September 30, 2025, on which an accountants’ report set out in Appendix I to the
Prospectus has been published.
Directors’ Responsibility for the Unaudited Pro Forma Financial Information
The Directors are responsible for compiling the unaudited pro forma financial
information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and with reference to
Accounting Guideline 7 Preparation of Pro Forma Financial Information for Inclusion in
Investment Circulars (“ AG 7 ”) issued by the Hong Kong Institute of Certified Public
Accountants (the “ HKICPA ”).
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 379 ---
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the “Code of
Ethics for Professional Accountants” issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behavior.
Our firm applies Hong Kong Standard on Quality Management (HKSQM) 1, Quality
Management for Firms that Perform Audits or Reviews of Financial Statements, or Other
Assurance or Related Services Engagements issued by the HKICPA, which requires the firm
to design, implement and operate a system of quality management including policies or
procedures regarding compliance with ethical requirements, professional standards and
applicable legal and regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the unaudited pro forma financial information and to report our opinion to
you. We do not accept any responsibility for any reports previously given by us on any
financial information used in the compilation of the unaudited pro forma financial information
beyond that owed to those to whom those reports were addressed by us at the dates of their
issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420, Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus, issued by the HKICPA. This standard requires
that the reporting accountants plan and perform procedures to obtain reasonable assurance
about whether the directors of the Company have compiled the unaudited pro forma financial
information in accordance with paragraph 4.29 of the Listing Rules and with reference to AG
7 issued by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the unaudited pro
forma financial information, nor have we, in the course of this engagement, performed an audit
or review of the financial information used in compiling the unaudited pro forma financial
information.
The purpose of unaudited pro forma financial information included in a prospectus is
solely to illustrate the impact of a significant event or transaction on unadjusted financial
information of the 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 the Global Offering at September 30, 2025 would have
been as presented.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 380 ---
A reasonable assurance engagement to report on whether the unaudited pro forma
financial information has been properly compiled on the basis of the applicable criteria
involves performing procedures to assess whether the applicable criteria used by the directors
in the compilation of the unaudited pro forma financial information provide a reasonable basis
for presenting the significant effects directly attributable to the event or transaction, and to
obtain sufficient appropriate evidence about whether:
 the related unaudited pro forma adjustments give appropriate effect to those criteria;
and
 the unaudited pro forma financial information reflects the proper application of
those adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgement, having regard
to the reporting accountants’ understanding of the nature of the entity, the event or transaction
in respect of which the unaudited pro forma financial information has been compiled, and other
relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the unaudited pro
forma financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion:
(a) the unaudited pro forma financial information has been properly compiled by the
Directors on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the unaudited pro forma financial
information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
BDO Limited
Certified Public Accountants
Hong Kong
March 20, 2026
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 381 ---
The following is the preliminary financial information of our Group as of and for the year
ended December 31, 2025 (the “ 2025 Preliminary Financial Information ”), together with
comparative financial information as of and for the year ended December 31, 2024 and a
discussion of changes in our financial condition and results of operations between the two
periods. The 2025 Preliminary Financial Information has been prepared based on the
unaudited consolidated financial statements of the Group prepared in accordance with IFRS
Accounting Standards. The 2025 Preliminary Financial Information does not constitute the
audited consolidated financial statements of the Group for the year ended December 31, 2025
(the “ 2025 Consolidated Financial Statements ”). The 2025 Preliminary Financial
Information was not audited. Investors should bear in mind that the 2025 Preliminary
Financial Information in this appendix may be subject to adjustments.
BUSINESS REVIEW AND OUTLOOK
We are a global leader in the SiC epitaxy industry. According to CIC, since 2023, we have
been the world’s largest SiC epitaxial foundry by annual sales volume, with a market share
exceeding 30% in 2024.
Our deep knowledge of SiC epitaxy technology enables us to stay at the frontline of the
SiC epitaxy industry and provide high quality and reliable products to our customers. We were
the first in the world to achieve large-scale commercial supply of 8-inch SiC epitaxial wafers
and the first in China to commercialize and mass-produce 3-inch, 4-inch, 6-inch, and 8-inch
SiC epitaxial wafers. We led the writing and establishment of the world’s first and only
Semiconductor Equipment and Materials International (SEMI) industry standard for SiC
epitaxy. In 2024, our cumulative sales, combining sales under Turnkey and Consign models,
exceeded 164,000 SiC epitaxial wafers. During the Track Record Period, we have delivered a
total of over 599,700 SiC epitaxial wafers.
During the Track Record Period, we had 134 customers. Our customers included four of
the world’s top five SiC power device providers and eight of the top ten power device
providers, according to CIC. SiC power devices fabricated using our epitaxial wafers exhibit
stable performance in high-temperature and high-power use. Our customers utilize our SiC
epitaxy wafers to manufacture their products, typically power devices, for a wide range of
downstream industrial applications, such as EVs, charging infrastructure, renewable energy,
ESS, as well as emerging applications such as home appliances, AI computing power and data
centers, smart grids, and eVTOL. For example, our products can be adopted in EVs to enable
smaller, lighter and more power-efficient devices such as 800V powertrains, particularly in
inverters and converters. This application allows high-voltage operations with minimal energy
loss for EVs, which translate into longer range, faster charging and reduced cooling demands.
During the Track Record Period, we acquired new customers primarily through active market
engagement efforts, including participation in industry exhibitions and academic conferences,
as well as through customer referrals. Our technical expertise, large production capacity,
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-1 –


--- page 382 ---
reliable quality control procedure, consistent delivery, and reliable customer services have
earned us long-term recognition and loyalty from customers. These qualities not only
strengthen customer retention but also provide us with unique growth opportunities.
Since December 31, 2025 and up to the date of this Prospectus, to the best of our
knowledge, (i) there has been no material adverse change in our financial or operational
position; and (ii) there has been no material adverse change in our business, the industry in
which we operate and/or market or regulatory environment to which we are subject.
Y ear Ended December 31, 2025 Compared to Y ear Ended December 31, 2024
Revenue
Our revenue decreased by 21.4% from RMB974.3 million in 2024 to RMB765.3 million
in 2025, primarily due to the decrease in our revenue from Turnkey service.
By type of service, revenue from Turnkey service decreased from RMB839.6 million in
2024 to RMB695.9 million in 2025, primarily due to our competitive pricing strategies, in
response to the general downward pricing trend across the industry. Revenue generated from
Consign service decreased from RMB121.1 million in 2024 to RMB27.6 million in 2025,
primarily due to the decrease in our sales volume under Consign service as certain of our major
customers experienced fluctuations in their business operations.
By region, revenue from Asia slightly increased from RMB672.4 million in 2024 to
RMB679.0 million in 2025, primarily due to our robust domestic sales. The revenue from
Europe decreased from RMB268.9 million in 2024 to RMB69.6 million in 2025, primarily due
to weakened demand following production cuts by certain customers.
Cost of Sales
Our cost of sales decreased by 10.4% from RMB642.0 million in 2024 to RMB575.4
million in 2025, primarily attributable to the decrease in the costs of our raw materials,
reflecting the decreases in the price of our key raw materials.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit decreased by 42.9% from RMB332.3 million
in 2024 to RMB189.9 million in 2025, and our gross profit margin decreased from 34.1% in
2024 to 24.8% in 2025, primarily attributable to our strategic adjustments in our pricing and
sales to consolidate our market share, resulting in a lower gross margin profile.
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-2 –


--- page 383 ---
Other Income and Other Gains, Net
Our other income slightly decreased from RMB168.4 million in 2024 to RMB166.0
million in 2025, primarily due to a relatively large amount of net exchange loss.
Selling and Distribution Expenses
Our selling and marketing expenses increased from RMB5.5 million in 2024 to RMB10.8
million in 2025, primarily due to the increase in sample costs as a result of our active marketing
and business development activities, as well as the increase in employee expenses.
Administrative and Other Expenses
Our general and administrative expenses increased by 18.5% from RMB175.6 million in
2024 to RMB208.1 million in 2025, primarily due to the listing expenses we incurred.
Research and Development Expenses
Our R&D expenses slightly decreased from RMB80.0 million in 2024 to RMB74.9
million in 2025, primarily attributable to the decrease in material costs resulted from price
reduction of materials we use.
Impairment Loss on Financial Assets, Net
Our impairment losses on financial assets increased from RMB1.3 million in 2024 to
RMB2.7 million in 2025, primarily attributable to the higher balance of our trade and bills
receivables.
Finance Costs
Our finance costs decreased from RMB30.2 million in 2024 to RMB24.9 million in 2025,
primarily due to our repayment of borrowings.
Income Tax Expenses
Our income tax expenses decreased from RMB43.1 million in 2024 to RMB22.6 million
in 2025, primarily due to the decrease in our taxable profits.
Profit for the Y ear
As a result of the foregoing, the recorded profit of the year narrowed from RMB165.1
million in 2024 to RMB11.9 million in 2025. This significant decrease is primarily because our
average selling prices of SiC epitaxial wafers continued to decrease in 2025 as compared to
2024, squeezing our revenue and gross profit and leading to net loss for the fourth quarter. To
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-3 –


--- page 384 ---
a lesser extent, our share-based payment expenses remained a large amount of ongoing expense
as we provide long-term incentive programs to employees to motivate and retain talent; and we
incurred substantially higher listing expenses in 2025, whereas the listing expenses in 2024
was relatively minimal.
DISCUSSION OF CERTAIN ITEMS IN THE CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
Current Assets/Liabilities
As of December 31,
2024 2025
(RMB in thousands)
(unaudited)
Current assets
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/H1118247,640 305,514
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118129,645 354,589
Prepayments, deposits and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,468 17,514
V alue-added tax (V A T) recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,259 39,446
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 611,677
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/H11182,030,653 1,213,993
Total 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/H11182,448,665 2,542,733
Current liabilities
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,883 163,655
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145,089 109,262
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/H11186,795 186
Derivative financial instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,812
Lease 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/H111867 67
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118303,536 162,451
Redemption 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/H111818,007 –
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/H111859,765 37,271
Total 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/H1118605,142 475,704
Net 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/H11181,843,523 2,067,029
Our net current assets increased from RMB1,843.5 million as of December 31, 2024 to
RMB2,067.0 million as of December 31, 2025 primarily due to (i) the decrease of our
borrowings of RMB141.1 million, and (ii) the increase of our trade and bills receivables of
RMB224.9 million.
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-4 –


--- page 385 ---
ANALYSIS OF SELECTED ITEMS OF CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
Assets
Inventories
Our inventories comprise of raw materials, finished goods and work in progress. Our raw
materials mainly include substrates and other accessory materials, graphite components and
gases. The following table sets forth the carrying amount of our inventories as of the dates
indicated:
As of December 31,
2024 2025
(RMB in thousands)
(unaudited)
Inventories
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118196,416 250,237
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,255 58,660
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,169 16,738
253,840 325,635
Write-down of inventories to net realizable value /H1118 (6,200) (20,121)
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/H1118247,640 305,514
Our inventories increased from RMB247.6 million as of December 31, 2024 to
RMB305.5 million as of December 31, 2025, primarily due to our strategic storage in light of
our sales increase during the second half of 2025.
The following table sets forth the aging analysis of our inventory after deduction of
provision as of the dates indicated:
As of December 31,
2024 2025
(RMB in thousands)
(unaudited)
Inventories
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,453 179,642
1-2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,649 18,688
2-3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,240 102,847
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,298 4,337
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/H1118247,640 305,514
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-5 –


--- page 386 ---
Trade and Bills Receivables
Trade and bills receivables are amounts due for goods sold in the ordinary course of
business.
Our trade and bills receivables increased from RMB129.6 million as of December 31,
2024 to RMB354.6 million as of December 31, 2025, primarily due to our sales increase in the
third and fourth quarter of 2025, leading to a high closing balance of receivables to be settled.
As of December 31,
2024 2025
(RMB in thousands)
(unaudited)
Trade and bills receivables
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130,135 342,473
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,905 17,080
132,040 359,553
Less: impairment loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,395) (4,964)
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/H1118129,645 354,589
The following table sets forth an aging analysis of our trade receivables as of the dates
indicated:
As of December 31,
2024 2025
(RMB in thousands)
(unaudited)
Trade and bills receivables
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,752 234,412
3 months to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,151 107,289
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,635 12,888
1-2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/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 –
2-3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893 –
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/H1118129,645 354,589
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-6 –


--- page 387 ---
Prepayments, Deposits and Other Receivables
Our prepayments, deposits and other receivables comprise of (i) prepayments, (ii)
deposits and other receivables and (iii) consulting fees and offset by impairment loss
allowance. The following table sets forth a breakdown of our prepayments, deposits and other
receivables as of the years indicated:
As of December 31,
2024 2025
(RMB in thousands)
(unaudited)
Prepayments, deposits and other receivables
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,238 4,213
Deposits and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,347 5,805
Prepaid listing expenses and deferred issue costs /H1118 – 7,786
7,585 17,804
Less: Impairment loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(117) (290)
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/H11187,468 17,514
Our prepayments, deposits and other receivables increased from RMB7.5 million as of
December 31, 2024 to RMB17.5 million as of December 31, 2025, primarily due to the prepaid
listing expenses and deferred issue costs in relation to the Listing.
Equity and Liabilities
Trade and Bills Payables
Our trade and bills payables are short-term in nature and hence, the carrying amount of
trade and bills payables are considered to approximate to their fair value. Our trade and bills
payables increased from RMB71.9 million as of December 31, 2024 to RMB163.7 million as
of December 31, 2025, primarily due to our increased procurement scale to accommodate our
sales growth, especially during the second half of 2025.
The following table sets forth our trade and bills payables as of the years indicated:
As of December 31,
2024 2025
(RMB in thousands)
(unaudited)
Trade and bills payables
Trade 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/H111846,781 163,655
Bills 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/H111825,102 –
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/H111871,883 163,655
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-7 –


--- page 388 ---
The following table sets forth an aging analysis of our trade and bills payables as of the
years indicated:
As of December 31,
2024 2025
(RMB in thousands)
(unaudited)
Trade and bills payables
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,538 162,873
1-2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104 437
Over 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241 345
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/H111871,883 163,655
Other Payables and Accruals
Our other payables and accruals primarily represent (i) construction payables, (ii)
accruals, (iii) other tax payables and (iv) other payables, primarily representing the accrued
employee compensation. The following table sets forth our other payables and accruals as of
the years indicated:
As of December 31,
2024 2025
(RMB in thousands)
(unaudited)
Other payables and accruals
Construction payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130,159 93,207
Accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,415 12,647
Other tax 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/H11182,458 2,922
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/H11181,057 486
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/H1118145,089 109,262
Our other payables and accruals decreased from RMB145.1 million as of December 31,
2024 to RMB109.3 million as of December 31, 2025, primarily due to the settlement of our
construction payables.
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-8 –


--- page 389 ---
Borrowings
As of December 31, 2025, we had bank borrowings of RMB886.7 million, among which
RMB528.4 million were pledged by our property, plant and equipment. As of December 31,
2025, the effective interest rate of our borrowings ranged from 2.32% to 2.60%. The interest
should be paid quarterly or semi-annually and the principal should be repaid semi-annually
before 2032. These borrowings are for general business operation purposes.
Dividends
No dividend has been paid or declared by us in 2024 and 2025. No dividend or
distribution has been declared, made or paid by us or any of the subsidiaries in respect of any
period subsequent to December 31, 2025.
INDEBTEDNESS
The following table sets forth a breakdown of our financial indebtedness as of the dates
indicated.
Y ear Ended December 31,
2024 2025
(RMB in thousands)
(unaudited)
Current
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,007 –
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118303,536 162,451
Lease 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/H111867 67
Non-Current
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118808,594 724,210
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,130,204 886,728
Our borrowings amounted to RMB1,130.2 million and RMB886.7 million as of December
31, 2024 and 2025, respectively. As of December 31, 2024 and 2025, RMB555.2 million and
RMB528.4 million of our borrowings were secured. We had unsecured borrowings of
RMB556.9 million and RMB358.3 million as of December 31, 2024 and 2025, respectively.
Except as discussed above, we had no outstanding indebtedness or any loan capital issued
and outstanding or agreed to be issued, bank overdrafts, loans or similar indebtedness,
liabilities under acceptances (other than normal trade bills), acceptance credits, debentures,
mortgages, charges, finance lease or hire purchase commitments, guarantees or other
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-9 –


--- page 390 ---
contingent liabilities or any covenant in connection therewith as of January 31, 2026, being our
indebtedness statement date. After due and careful consideration, our Directors confirm that
there had been no material change in our indebtedness since January 31, 2026 and up to the
Latest Practicable Date.
KEY FINANCIAL RATIO
The following table sets forth some of our key financial ratios for the dates indicated.
As of and Y ears Ended December 31,
2024 2025
(unaudited)
Gross profit margin (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834.1% 24.8%
Current ratio (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.0 5.3
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.6 4.7
Debt-to-asset ratio (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837.5% 33.5%
Notes:
(1) Gross profit margin is calculated using gross profit for the year/period divided by revenue for the
year/period and multiplied by 100%.
(2) Current ratio equals current assets divided by current liabilities as of the relevant year/period end.
(3) Quick ratio equals current assets excluding inventories divided by current liabilities as of the relevant
year/period end.
(4) Debt-to-Asset Ratio equals total liabilities divided by total assets multiplied by 100%.
DISCLOSURE ABOUT MARKET RISK
See “Financial Information — Quantitative and Qualitative Disclosure about Market
Risk” in this Prospectus for further information.
CODE ON CORPORATE GOVERNANCE PRACTICES
Since we were not yet listed on the Stock Exchange during the year ended December 31,
2025, the Corporate Governance Code as set out in Appendix 14 to the Listing Rules was not
applicable to us during such period. After the Listing, we will comply with all the code
provisions set forth in the Corporate Governance Code.
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-10 –


--- page 391 ---
REVIEW OF OUR PRELIMINARY FINANCIAL INFORMATION
The unaudited financial information in respect of our consolidated statement of financial
position, consolidated statement of profit and loss and other comprehensive income and the
related notes thereto for the year ended December 31, 2025 as set out in the 2025 Preliminary
Financial Information above has been agreed by the Reporting Accountants, to the amounts set
out in the Group’s draft consolidated financial statements for the year ended December 31,
2025 following their work under Practice Note 730 (Revised) “Guidance for Auditors
Regarding Preliminary Announcements of Annual Results” issued by the Hong Kong Institute
of Certified Public Accountants (the “HKICPA”). The work performed by the Reporting
Accountants in this respect did not constitute an assurance engagement in accordance with
Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong
Kong Standards on Assurance Engagements issued by the HKICPA and consequently no
opinion or assurance conclusion has been expressed by the Reporting Accountants on the 2025
Preliminary Financial Information.
PURCHASE, SALE OR REDEMPTION OF OUR COMPANY’S SHARES
Since we were not yet listed on the Stock Exchange in during the year ended December
31, 2025, this disclosure requirement is not applicable to us.
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-11 –


--- page 392 ---
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
(Expressed in Renminbi unless otherwise indicated)
Y ear ended December 31,
Notes 2025 2024
RMB’000 RMB’000
(Unaudited)
REVENUE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 765,333 974,316
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(575,423) (642,007)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118189,910 332,309
Other income and other gains and losses, net /H1118/H1118/H1118/H11186 165,969 168,402
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,807) (5,513)
Administrative and other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(208,095) (175,575)
Research and development costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(74,874) (79,992)
Impairment loss on financial assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 (2,742) (1,253)
Finance 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(24,865) (30,197)
PROFIT BEFORE TAX /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 34,496 208,181
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 (22,608) (43,114)
PROFIT AND TOTAL COMPREHENSIVE
INCOME FOR THE YEAR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,888 165,067
Earnings per share (RMB) attributable to
owners of the Company
Basic and diluted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 0.03 0.43
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-12 –


--- page 393 ---
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at December 31,
Notes 2025 2024
RMB’000 RMB’000
(Unaudited)
ASSETS AND LIABILITIES
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,965,325 2,047,566
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877 77
Intangible 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/H11181,414 2,075
Prepayments for acquisition of property, plant 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/H11186,566 1,582
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/H11182,945 49
Other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,801 2,930
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,981,128 2,054,279
Current assets
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/H1118305,514 247,640
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 354,589 129,645
Prepayments, deposits and other receivables /H1118/H1118/H1118/H1118/H111812 17,514 7,468
V alue-added tax (“V A T”) recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,446 33,259
Term deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118611,677 –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,213,993 2,030,653
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,542,733 2,448,665
Current liabilities
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 163,655 71,883
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 109,262 145,089
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/H1118186 6,795
Lease 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/H111867 67
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 162,451 303,536
Derivative financial instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 2,812 –
Redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 – 18,007
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/H111837,271 59,765
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118475,704 605,142
Net 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/H11182,067,029 1,843,523
TOTAL ASSETS LESS 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/H11184,048,157 3,897,802
Non-current liabilities
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 724,210 808,594
Deferred 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/H111816 313,367 260,764
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118877 14,960
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1,038,454 1,084,318
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/H11183,009,703 2,813,484
EQUITY
Equity attributable to owners of the Company
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118404,093 404,093
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,605,610 2,409,391
TOTAL 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/H11183,009,703 2,813,484
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-13 –


--- page 394 ---
NOTES TO THE 2025 PRELIMINARY FINANCIAL INFORMATION
(Expressed in Renminbi unless otherwise indicated)
1. GENERAL INFORMATION
Epiworld International Co., Ltd. (the “ Company ”) is a limited liability company incorporated in the People’s
Republic of China (the “ PRC”) on March 31, 2011. The registered office address and principal place of business of
the Company is located at No. 198-1 Shitou Dong’er Road., Tongxiang High-tech Park, Xiamen Torch Development
Zone for High Technology Industries, Xiamen 361101, Fujian, the PRC.
The Company and its subsidiaries (collectively referred as the “ Group ”) are principally engaged in the
manufacturing and sale of silicon carbide (“ SiC”) epitaxial wafers under Turnkey service and provision of processing
services for SiC epitaxial wafers under Consign service in the PRC.
At the date of the prospectus (the “ Prospectus ”) issued in connection with the initial listing of the Company’s
shares (the “ Listing ”), Dr. Zhao Jianhui (ሾ) is the largest shareholder of the Company (the “ Controlling
Shareholder ”).
2. MATERIAL ACCOUNTING POLICIES
2.1 Statement of compliance
The 2025 Preliminary Financial Information comprises the Company and its subsidiaries. The 2025
Preliminary Financial Information has been prepared in accordance with all applicable IFRS Accounting Standards
issued by the International Accounting Standards Board (“ IASB ”). The 2025 Consolidated Financial Statements also
comply with the disclosure requirements of the Hong Kong Companies Ordinance and the applicable disclosure
provisions of the Rules Governing the Listing of Securities on the Main Board of The Stock Exchange of Hong Kong
Limited (the “ Listing Rules ”).
The 2025 Preliminary Financial Information is presented in Renminbi (“ RMB”) and all amounts have been
rounded to the nearest thousand (“ RMB’000”), unless otherwise stated.
The basis of preparation and presentation of the 2025 Consolidated Financial Statements and a summary of
material accounting policies adopted by the Group in preparing the 2025 Consolidated Financial Statements are set
out in Note 4 to the Accountants’ Report in Appendix I to the Prospectus.
2.2 Basis of measurement
The 2025 Preliminary Financial Information has been prepared on the historical cost basis except for certain
financial instruments, which are measured at fair values as explained in the accounting policies set out in Note 4 to
the Accountants’ Report in Appendix I to the Prospectus.
3. NEW OR AMENDMENTS TO STANDARDS ISSUED BUT NOT YET EFFECTIVE
The following new or amendments to standards, have been issued, but are not yet effective and have not been
early adopted by the Group.
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118/H1118Amendments to the Classification and Measurement of
Financial Instruments
1
Amendments to IFRS 1, IFRS 7, IFRS 9,
IFRS 10 and IAS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Annual Improvements to IFRS Accounting Standards –
V olume 111
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118/H1118Contracts Referencing Nature-dependent Electricity 1
Amendments to IAS 21 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Translation to a Hyperinflationary Presentation Currency 2
IFRS 18 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Presentation and Disclosure in Financial Statements 2
IFRS 19 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Subsidiaries without Public Accountability: Disclosures 2
Amendments to IFRS 10 and IAS 28 /H1118/H1118/H1118/H1118Sales or Contribution of Assets between an Investors and its
Associate or Joint V enture 3
1 Effective for annual periods beginning on or after January 1, 2026
2 Effective for annual periods beginning on or after January 1, 2027
3 Effective date to be determined by the IASB
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-14 –


--- page 395 ---
IFRS 18 Presentation and Disclosures in Financial Statements
IFRS 18 Presentation and Disclosure in Financial Statements, which was issued by the IASB in April 2024
supersedes IAS 1 and will result in major consequential amendments to IFRS Accounting Standards including IAS
8 Basis of Preparation of Financial Statements (renamed from Accounting Policies, Changes in Accounting Estimates
and Errors). Even though IFRS 18 will not have any effect on the recognition and measurement of items in the 2025
Consolidated Financial Statements, it is expected to have a significant effect on the presentation and disclosure of
certain items. These changes include categorization and sub-totals in the consolidated statements of profit or loss and
other comprehensive income, aggregation/disaggregation and labelling of information, and disclosure of
management-defined performance measures. The Group is currently evaluating the full impact of IFRS 18 on its
financial statement presentation and disclosures. The application of the new standard is not expected to have material
impact on the financial performance and financial position of the Group but is expected to affect the disclosures in
the future financial statements.
The directors of the Company do not anticipate that the adoption of other new or amendments to standards will
have any material impact on the Group’s financial performance, financial position and cash flows in future periods.
4. SEGMENT INFORMATION
(a) Operating segment information
The Group has identified its operating segments and prepared segment information based on the regular
internal financial information reported to the directors of the Company, being chief operating decision maker, for
their decisions about resources allocation to the Group’s business components and for their review of these
components’ performance.
During the years ended December 31, 2024 and 2025, the Group is principally engaged in the manufacturing
and sale of SiC epitaxial wafers under Turnkey service and provision of processing services for SiC epitaxial wafers
under Consign service in the PRC. Information reported to the directors of the Company for the purpose of resources
allocation and performance assessment focuses on the operating results of the business. Therefore, the chief operating
decision maker of the Company regards that there is only one operating segment which is used to make strategic
decisions. No other discrete financial information is provided other than the Group’s results and financial position
as a whole. Accordingly, only entity-wide disclosures, major customers and geographical information are presented.
(b) Geographical information
The Group is domiciled in the PRC, which is the location of the Group’s principal office. All of the Group’s
revenue from external customers are originated from PRC. These revenues from external customers are further
divided into the following geographical areas:
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Revenue by region
Asia – Greater China /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118392,472 207,656
Asia – Other than Greater China /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118286,556 464,773
Europe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,568 268,943
North America /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,737 32,944
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/H1118765,333 974,316
The Group’s revenue information above is based on the delivery destinations of the Group’s products and
services requested by the customers. The geographical location of non-current assets is based on the physical location
of the assets. As at December 31, 2024 and 2025 all of the Group’s non-current assets were located in the PRC.
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-15 –


--- page 396 ---
(c) Information about major customers
Revenue from major customers, each of them accounting for 10% or more of the Group’s revenue for the years
ended December 31, 2024 and 2025, are set out below:
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Customer A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118267,610 393,592
Customer B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* 104,411
Customer C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* 201,486
* The corresponding revenue is not disclosed as it did not contribute over 10% of the total revenue of the
Group during that year.
5. REVENUE
Revenue primarily represents the revenue from Turnkey service and Consign service.
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Revenue
Turnkey service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118695,873 839,577
Consign service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,595 121,103
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/H111841,865 13,636
765,333 974,316
All revenue is recognized at a point in time when the goods are delivered to the customers. All contracts are
for periods of one year or less. As permitted under IFRS 15, the transaction price allocated to these unsatisfied (or
partially unsatisfied) performance obligations is not disclosed.
The following table provides information about trade and bills receivable and contract liabilities from contracts
with customers.
As at December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Trade and bills receivables (Note 11) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118354,589 129,645
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/H1118186 6,795
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-16 –


--- page 397 ---
6. OTHER INCOME AND OTHER GAINS AND LOSSES, NET
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Bank interest 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/H111876,534 39,950
Government grants (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,508 111,894
Fair value loss on derivatives financial instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,812) –
(Loss)/gain on disposal of property, plant and equipment /H1118/H1118/H1118/H1118 (5) 20
Exchange (loss)/gain, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(32,395) 16,482
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/H11181,139 56
165,969 168,402
Note: These government grants mainly comprised of subsidies received/receivable for subsidizing the Group’s
business. There was no unfulfilled condition to receive government grants at the end of each reporting
period.
7. PROFIT BEFORE TAX
Profit before tax is arrived at after charging the following:
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Cost of inventories recognized as expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118555,651 640,937
Auditors’ remuneration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118500 943
Depreciation of property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118177,083 144,715
Depreciation of right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118132 276
Amortization of intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,241 743
Employee costs (including directors’ emoluments):
– Salaries and wages /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,916 71,734
– Retirement scheme contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,469 5,537
– Equity-settled share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118165,980 154,249
241,365 231,520
Write-down of inventories to net realizable value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,772 1,070
Listing expenses
– Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,172 –
– PRC (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,853
Impairment loss on financial assets, net:
– Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,569 1,193
– Deposits and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118173 60
2,742 1,253
Note: Listing expenses in PRC include expenses related to previous listing exercise attempt.
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-17 –


--- page 398 ---
8. INCOME TAX EXPENSE
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Current year – PRC corporate income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(39,587) (59,766)
Deferred tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,979 16,652
(22,608) (43,114)
The Group is subject to income tax on an entity basis on assessable profits arising in or derived from the tax
jurisdictions in which members of the Group are domiciled and operated.
PRC corporate income tax
Pursuant to the income tax rules and regulations of the PRC, the provision for PRC corporate income tax of
the group entities is calculated based on the statutory tax rate of 25% during the years ended December 31, 2024 and
2025, except for the Company which is registered as a High and New-Tech Enterprise pursuant to the PRC tax
regulations and entitled to a preferential tax rate of 15% for the years ended December 31, 2024 and 2025.
Hong Kong profits tax
Under the current Hong Kong Inland Revenue Ordinance, the Company’s subsidiaries incorporated in Hong
Kong are subject to a two-tiered profit tax rates regime. Under the two-tiered profits tax rates regime, the first HK$2
million of profits of the qualifying group entity will be taxed at 8.25%, and profits above HK$2 million will be taxed
at 16.5%.
Singapore and Malaysia corporate income tax
Overseas taxation has been calculated at the current rates of taxation prevailing in the jurisdiction in which
the Group operates.
9. DIVIDENDS
No dividend were declared and paid during the years ended December 31, 2024 and 2025.
10. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the
Company is based on the following data:
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Earnings for the year attributable to ordinary equity
shareholders of the Company
Profit for the year attributable to all equity shareholders of
the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,888 165,067
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-18 –


--- page 399 ---
Y ear ended December 31,
2025 2024
’000 ’000
(Unaudited)
Weighted average number of shares
Weighted average number of ordinary shares in issue /H1118/H1118/H1118/H1118/H1118/H1118404,093 388,236
Effect of ordinary shares with redemption rights /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,163) (4,768)
Weighted average number of ordinary shares in issue, for the
purposes of basic and diluted earnings per share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118402,930 383,468
During the years ended December 31, 2024 and 2025, ordinary shares with redemption rights (Note 18) were
not included in the calculation of diluted earnings per share, as their inclusion would have been anti-dilutive.
Accordingly, diluted earnings per share are the same as the basic earnings per share as the Company had no dilutive
potential ordinary shares in existence for the years ended December 31, 2024 and 2025.
11. TRADE AND BILLS RECEIV ABLES
As at December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118342,473 130,135
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,080 1,905
359,553 132,040
Less: impairment loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,964) (2,395)
354,589 129,645
An aging analysis of trade and bills receivables, net of impairment losses, as at the end of each reporting
period, based on the invoice dates, is as follows:
As at December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Trade and bills receivables
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118234,412 123,752
3 months to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107,289 1,151
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,888 4,635
1 year to 2 years /H1118/H1118/H1118/H1118/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 4
2 years to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–9 3
354,589 129,645
The Group recognized impairment loss based on the accounting policy stated in Note 4 to the Accountants’
Report in Appendix I to the Prospectus. Trade and bills receivables are generally due within 30 to 90 days from the
date of billing.
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-19 –


--- page 400 ---
Movements in the loss allowance for impairment of trade receivables are as follows:
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
At the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,395 1,202
Provision for loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,569 1,193
At the end of 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/H1118/H11184,964 2,395
12. PREPAYMENTS, DEPOSITS AND OTHER RECEIV ABLES
As at December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Current portion
Deposits and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,805 2,347
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,213 5,238
Prepaid listing expenses and deferred issue costs
– Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,786 –
17,804 7,585
Less: Impairment loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(290) (117)
17,514 7,468
13. TRADE AND BILLS PAYABLES
As at December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Trade 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/H1118163,655 46,781
Bills 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– 25,102
163,655 71,883
A credit period of 30 days to 90 days from the date of billing is generally granted by the Group’s trade
suppliers. Based on the receipt of services and goods, which normally coincided with the invoice dates, the aging
analysis of the Group’s trade and bills payables as at the end of each reporting period is as follows:
As at December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118162,873 71,538
1-2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118437 104
Over 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118345 241
163,655 71,883
The Group’s trade and bills payables are short-term in nature and hence, the carrying amount of trade and bills
payables are considered to approximate to their fair value.
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-20 –


--- page 401 ---
14. OTHER PAYABLES AND ACCRUALS
As at December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Construction 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/H111893,207 130,159
Other tax 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/H11182,922 2,458
Accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,647 11,415
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/H1118486 1,057
109,262 145,089
As at December 31, 2024 and 2025, other payables and accruals were non-interest bearing, unsecured and
repayable on demand.
15. BORROWINGS
As at December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Current portion
Borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122,586 247,500
Borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,865 56,036
162,451 303,536
Non-current portion
Borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118235,682 309,408
Borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118488,528 499,186
724,210 808,594
886,661 1,112,130
As at December 31, 2024 and 2025, the borrowings bear interest rates ranging from 2.4% to 4.0%, the effective
interest rates ranging from 2.32% to 2.60%. None of the borrowings contains a repayment-on-demand clause. The
Group has complied with the relevant covenants at each test date on or before the end of the reporting period and
classified the related bank borrowings balances as non-current. The secured borrowings were pledged by property,
plant and equipment of RMB579,099,000 and RMB519,472,000 as at December 31, 2024 and 2025, respectively.
16. DEFERRED REVENUE
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
At the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118260,764 205,569
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118176,111 167,089
Credited to profit or loss (Note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(123,508) (111,894)
At the end of 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/H1118/H1118313,367 260,764
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-21 –


--- page 402 ---
Deferred revenue consists of deferred government grants mainly for construction of certain property, plant and
equipment. The grants from local government were conditional and the conditions would be fulfilled upon the
completion of construction of certain property, plant and equipment of the Group. The grants will be recognized as
income in profit or loss on a systematic basis over the estimated useful lives of the property, plant and equipment.
17. DERIV ATIVES FINANCIAL INSTRUMENTS
The Group recognises all derivative financial instruments on the consolidated statements of financial position
at fair value with changes in fair value recognized in the consolidated statement of profit or loss and other
comprehensive income in the years of the change. The Group’s derivative financial instrument includes forward
foreign exchange contracts.
As at December 31, 2024 and 2025, the Group’s derivative financial instruments mature within one year. The
fair values of derivative financial instruments included in the consolidated statement of financial position as current
liabilities are as follows:
As at December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Current liabilities
Forward foreign exchange contracts – within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H11182,812 –
18. REDEMPTION LIABILITIES
The movements of the redemption liabilities during the years ended December 31, 2024 and 2025 are set out
as below:
Redemption liabilities
RMB’000
At January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,673
Interest expenses associated with redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,334
At December 31, 2024 and at January 1, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,007
Interest expenses associated with redemption liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344
Derecognition due to termination of redemption rights /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,351)
At December 31, 2025 (Unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
The Company entered into respective shareholders’ and share subscription agreements (collectively, the
“Pre-IPO Investors Agreements) with various pre-IPO investors (collectively, the “Pre-IPO Investors”) and issued
ordinary shares. Pursuant to the Pre-IPO Investors Agreements, the Pre-IPO Investors were granted by the Company
with redemption rights.
The redemption rights that existed during the years ended 31 December 2024 and 2025 are limited to instances
where the Company and its original shareholder maliciously breach the clause in the Pre-IPO Investors Agreements
and fail to rectify the breach in a timely manner. If such breaches occurred and remained unrectified, the Pre-IPO
Investors were entitled to exercise the right to put back the ordinary shares they had acquired from the Company. The
Company has confirmed that there have been no breaches of the Pre-IPO Investors Agreements during the years ended
December 31, 2024 and 2025, and all but one redemption rights were formally terminated pursuant to supplemental
agreements executed in October 2023 and the remaining one redemption rights was formally terminated pursuant to
supplemental agreement executed in April 2025.
The redemption amount is the sum of 100% of the issue price, compound interest of eight percent per annum
calculated on a 365-day per year basis from the date of the Pre-IPO Investors Agreements.
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-22 –


--- page 403 ---
19. CAPITAL COMMITMENTS
As at December 31, 2024 and 2025, the Group had outstanding capital commitments as follows:
As at December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Contracted, but not provided for:
– Construction-in-progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,739 90,277
– Office 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/H1118825 157
88,564 90,434
20. RELATED PARTY TRANSACTIONS
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party,
or exercise significant influence over the other party in making financial and operating decisions. Parties are also
considered to be related if they are subject to common control or common significant influence.
(a) The directors of the Company are of the view that the following parties/companies were related parties that
had transactions or balances with the Group:
Name of related parties Relationship with the Group
Ҧ(ɪऎ)ʮ̡/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company subject to common significant influence
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company subject to common significant influence
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company subject to common significant influence
(b) The Group entered into the following related party transactions with related companies during the years ended
December 31, 2024 and 2025:
Y ear ended December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Related companies
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/H111825,893 25,841
The terms of the related party transactions carried out during the years ended December 31, 2024 and 2025
were mutually agreed by the Group and the related companies.
(c) Balance with related parties
As at December 31,
2025 2024
RMB’000 RMB’000
(Unaudited)
Trade and bills receivables
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 238
ʮ̡/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,517 8,762
All of the above related party balances are of trade nature.
(d) Compensation of key management personnel of the Group
The compensation of key management personnel of the Group during the years ended December 31, 2024 and
2025 represented the directors’ emoluments.
APPENDIX III UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– III-23 –


--- page 404 ---
SHARES
Issuance of Shares
The capital of the Company is divided into shares. All shares of the Company, according
to the provisions of the Articles of Association, shall be issued as par value shares, with each
share having an equal amount.
The shares of the Company shall take the form of registered share certificates.
The issuance of shares by the Company shall adhere to the principles of openness,
fairness and impartialness, and each share in the same class shall carry the same rights.
For shares issued at the same time and within the same class, the conditions and price per
share must be the same; for the shares subscribed by any entity or individual, the price per
share paid must be the same.
Domestic unlisted shares and overseas listed shares issued by the Company shall rank pari
passu over any distribution by way of dividend (including distributions in cash and in kind) or
any other forms of distribution. The Company shall not exercise any right to freeze or
otherwise damage the rights attached to any shares directly or indirectly held by any person
only on the ground that the said person fails to disclose his/her equity to the Company.
All or part of the Company’s domestic unlisted shares may be converted into overseas
listed shares upon filing with the CSRC and approval by the Hong Kong Stock Exchange, and
the converted overseas listed shares may be listed and traded on overseas stock exchanges. The
listing and trading of the converted shares on an overseas stock exchange shall also comply
with the regulatory procedures, regulations and requirements of the relevant overseas securities
markets.
Increase, Decrease and Repurchase of Shares
The Company may, upon separate resolution by a shareholders’ general meeting, adopt
the following methods to increase its registered capital in accordance with its business and
development needs and pursuant to the laws, regulations and securities regulatory rules of the
place where the shares of the Company are listed:
(I) public offering of shares;
(II) non-public offering of shares;
(III) allotting of bonus shares to existing shareholders;
(IV) conversion of funds in the capital reserve into share capital;
(V) any other means stipulated by laws or administrative regulations or approved by
relevant regulatory authorities.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-1 –


--- page 405 ---
Subject to the laws, regulations and securities regulatory rules of the place where the
shares of the Company are listed, the Board of Directors may decide to issue no more than 50%
of the issued shares within three years under the authorization of the shareholders’ general
meeting. However, capital contributions in the form of non-monetary assets shall be resolved
by the shareholders’ general meeting.
When the Company reduces its registered capital, in principle, shares shall be reduced in
proportion to the shares held by shareholders; however, as otherwise provided by law or
approved by two thirds of the voting rights represented by the shareholders present at the
meeting, the capital contributions may be reduced in a targeted manner by some of the
shareholders or the shareholders may reduce their respective shares in a non-proportional
manner.
The Company shall not acquire its shares, except in any of the following circumstances:
(I) decreasing the registered capital of the Company;
(II) merging with other companies holding shares of the Company;
(III) using shares for employee stock ownership plan or equity incentives;
(IV) acquiring the shares of shareholders who vote against any resolution adopted at the
shareholders’ general meeting on the merger or division of the Company and request
the Company to acquire their shares;
(V) using shares for conversion of corporate bonds issued by the Company which are
convertible into shares;
(VI) acquiring shares in a manner as necessary for maintenance of the Company’s value
and shareholders’ interests;
(VII) acquiring shares in other circumstances as permitted by the securities regulatory
rules of the place where the shares of the Company are listed.
Subject to the relevant securities regulatory rules of the place where the shares of the
Company are listed, the Company may acquire its shares through public centralized trading or
other ways as permitted by the laws, regulations, Hong Kong Listing Rules and relevant
regulatory authorities.
Where the Company acquires its shares under the circumstances prescribed in items (I)
and (II) of paragraph 1 of this article, such acquisition shall be approved by a resolution at a
shareholders’ general meeting. The acquisition by the Company of its own shares under
circumstances as mentioned in items (III), (V) and (VI) of paragraph 1 of this article shall be
proceeded by a public centralized trading method pursuant to the relevant securities regulatory
rules of the place where the shares of the Company are listed and upon approval by a resolution
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-2 –


--- page 406 ---
at a meeting of the Board of Directors attended by more than two thirds of all directors. If it
is otherwise specified in the securities regulatory rules of the place where the shares of the
Company are listed, such rules shall prevail, subject to the Company Law, the Securities Law,
the Guidelines for Articles of Association of Listed Companies and other relevant laws and
regulations.
Subject to the relevant securities regulatory rules of the place where the shares of the
Company are listed, the shares repurchased according to this article under the circumstance
stipulated in item (I) hereof shall be deregistered within 10 days from the date of repurchase
of shares; the shares shall be assigned or deregistered within six months if the repurchase of
shares is made under the circumstances stipulated in either item (II) or item (IV); and the shares
in the Company held in total by the Company after the repurchase of shares under any of the
circumstances stipulated in item (III), item (V) or item (VI) shall not exceed 10% of the
Company’s total outstanding shares, and shall be assigned or deregistered within three years.
If it is otherwise specified in the securities regulatory rules of the place where the shares of the
Company are listed, such rules shall prevail, subject to the Company Law, the Securities Law,
the Guidelines for Articles of Association of Listed Companies and other relevant domestic
laws and regulations.
In acquiring its shares, the Company shall perform its obligation of information
disclosure according to the provisions of the Securities Law and the securities regulatory rules
of the place where the shares of the Company are listed.
The Company or its subsidiaries (including its affiliates) shall not provide gifts, loans,
guarantees or other financial assistance for the acquisition of the Company’s shares by others,
except for the implementation of the Company’s employee stock ownership plan.
In the interest of the Company, the Company may, by resolution of the shareholders’
general meeting or by resolution of the Board of Directors under the authorization of the
shareholders’ general meeting, provide financial assistance for the acquisition of the
Company’s shares by others, provided that the cumulative total amount of financial assistance
shall not exceed 10% of the total amount of the issued share capital. Resolutions made by the
Board of Directors shall require approval from two thirds of all directors.
If the violations of the provisions outlined in the previous two paragraphs result in losses
to the Company, the responsible directors, supervisors, and senior management personnel shall
be held liable for compensation.
Transfer of Shares
Unless otherwise provided by laws, administrative regulations, departmental rules, and
securities regulatory rules of the place where the shares are listed, the shares of the Company
may be transferred according to law.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-3 –


--- page 407 ---
All transfers of H shares shall be effected by an instrument of transfer made in writing
in a general or common form or in such other form acceptable to the Board of Directors
(including the standard transfer format or transfer form prescribed by the Hong Kong Stock
Exchange from time to time). The instrument of transfer can only be signed by hand or affixed
with a seal of the Company (if the Company is the transferor or the transferee). Where the
transferor or transferee is a recognized clearing house as defined by relevant regulations in the
laws of Hong Kong effective from time to time, or any of its agents, the written instrument of
transfer may be signed by hand or by print. All instruments of transfer shall be kept at the legal
address of the Company or other place designated by the Board of Directors from time to time.
Share Register
The Company shall make a share register in accordance with evidentiary documents
provided by the securities registration authorities, which register bears adequate evidence of
shareholders holding shares of the Company. The original of register of holders of H shares
shall be kept in Hong Kong for shareholders’ inspection, but the Company may suspend the
registration of shareholders in accordance with the provisions of applicable laws and
regulations and the securities regulatory rules of the place where the shares of the Company
are listed, e.g., the equivalent provision of Section 632 of the Companies Ordinance. If the
applicable laws, administrative regulations, departmental rules, regulatory documents and
securities regulatory rules of the place where the shares of the Company are listed have special
provisions on the suspension of the registration of changes in the share register, such
provisions shall apply.
If the Company convenes a shareholders’ general meeting, distributes dividends, conducts
liquidation or performs other activities that require determining the identity of the
shareholders, the Board of Directors or the convener of the shareholders’ general meeting shall
determine the date of record, and shareholders registered in the share register after market
closing on the date of record shall be shareholders who enjoy the relevant rights and interests.
SHAREHOLDERS AND SHAREHOLDERS’ GENERAL MEETING
Rights and Obligations of the Shareholders
The shareholders of the Company shall have the following rights:
(I) obtaining dividends and any other form of profit distribution based on the proportion
of shares held by them;
(II) requiring, convening, chairing, attending or appointing a proxy to attend a
shareholders’ general meeting pursuant to the laws and exercising the corresponding
voting rights;
(III) supervising, presenting suggestions on or making inquiries about the business
operations of the Company;
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-4 –


--- page 408 ---
(IV) transferring, gifting or pledging their shares in accordance with laws, administrative
regulations and the Articles of Association;
(V) inspecting and replicating the Articles of Association, share register, minutes of
shareholders’ general meetings, resolutions of meetings of the Board of Directors,
resolutions of meetings of the Board of Supervisors and financial and accounting
reports;
(VI) Participating in the distribution of the Company’s residual assets based on their
shareholding upon termination or liquidation of the Company;
(VII) requiring the Company to repurchase their shares in the event of objection to
resolutions of the shareholders’ general meetings concerning merger or division of
the Company;
(VIII) enjoying other rights stipulated by laws, administrative regulations, departmental
rules and the Articles of Association.
The shareholders of the Company shall have the following obligations:
(I) to abide by laws, administrative regulations and the Articles of Association;
(II) to pay subscription monies according to the number of shares subscribed and the
method of subscription;
(III) not to make divestment unless in the circumstances stipulated by laws and
administrative regulations;
(IV) not to abuse shareholder’s right to prejudice the interests of the Company or other
shareholders; not to abuse the independent status of legal person of the Company or
shareholder’s limited liability to prejudice the interests of the creditors of the
Company;
(V) to assume other obligations as provided by the laws, administrative regulations,
departmental rules, securities regulatory rules of the place where the shares of the
Company are listed and the Articles of Association.
Shareholders who abuse shareholders’ rights and cause damages to the Company and
other shareholders shall be liable for compensation pursuant to the law. Shareholders who
abuse the independent status of legal person of the Company and shareholders’ limited liability
to evade debts and severely infringe upon interests of the Company’s creditors shall assume
joint and several liabilities for the Company’s debts.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-5 –


--- page 409 ---
The controlling shareholder and actual controlling person of the Company shall perform
fiduciary duty to the Company and general public shareholders thereof. The controlling
shareholder shall exercise contributor’s rights in strict accordance with law, shall not damage
the legitimate rights and interests of the Company and general public shareholders by such
means as profit distribution, asset reorganization, external investment, fund appropriation and
loan guarantee and shall not abuse its controlling status to damage the interests of the Company
and general public shareholders.
Proxies of Shareholders
A shareholder may either attend the shareholders’ general meeting(s) in person, or appoint
a proxy to attend, speak and vote on his/her behalf. Such proxy need not be a shareholder of
the Company.
A shareholder who appoints a proxy to attend the shareholders’ general meeting shall
specify the matters delegated and the scope and term of authorization, and the proxy is required
to submit the shareholder’s power of attorney to the Company and exercise the voting rights
within the scope of authorization.
The power of attorney used by shareholders to appoint proxies to attend the shareholders’
general meeting shall contain the following information:
(I) the name of the proxy;
(II) whether or not the proxy has any voting right;
(III) instructions to vote for or against or abstain from voting on each matter under
consideration included in the agenda of the shareholders’ general meeting;
(IV) the date of issue and validity period of the power of attorney;
(V) signature (or seal) of the principal. If the principal is a corporate shareholder, the
corporate seal shall be affixed.
Such a power of attorney shall specify that in default of directives from the shareholder,
the proxy may vote at his/her own discretion.
Where the instrument of proxy is signed by a person authorized by the principal, the
power of attorney or other documents authorizing such person to sign the instrument of proxy
shall be notarized. The notarized power of attorney or other authorization documents, together
with the instrument of proxy, shall be lodged at the address of the Company or at other places
specified in the notice of meeting.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-6 –


--- page 410 ---
Where the principal is a legal person, its legal representative or a person authorized by
the Board of Directors or other decision-making body shall attend the shareholders’ general
meeting of the Company on its behalf.
Powers of Shareholders’ General Meetings and Matters to be Determined
The shareholders’ general meeting is the organ of authority of the Company, and shall
exercise following functions and powers:
(I) to elect and replace directors and supervisors, and to determine the remuneration of
the relevant directors and supervisors;
(II) to consider and approve the reports of the Board of Directors;
(III) to consider and approve the reports of the Board of Supervisors;
(IV) to consider and approve the profit distribution plans and loss recovery plans of the
Company;
(V) to resolve on increase or decrease of the registered capital of the Company;
(VI) To resolve on issuance of bonds of the Company;
(VII) To resolve on the merger, division, dissolution, liquidation or change in corporate
form of the Company;
(VIII) to amend the Articles of Association;
(IX) to resolve on the engagement and dismissal of the accounting firm providing audit
services for the Company;
(X) to consider equity incentive scheme and employee stock ownership plan of the
Company;
(XI) to consider the Company’s proposed investments in other enterprises that exceed the
limits approved by the Board of Directors;
(XII) to consider the Company’s external loans and guarantees (except for entities within
the scope of consolidated financial statements).
External guarantees of the Company (except for entities within the scope of the
consolidated financial statements) shall be considered and approved by the Board of
Directors and then submitted to the shareholders’ general meeting for approval.
External guarantees not approved by the competent decision-making body of the
Company are invalid and the Company shall not bear any legal responsibility.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-7 –


--- page 411 ---
(XIII) to deliberate matters regarding the purchase or sale of material assets by the
Company within one year that exceed 30% of the latest audited total assets of the
Company;
(XIV) to consider and approve matters relating to the modification of raised fund purposes;
(XV) to consider other matters which should be decided by the shareholders’ general
meeting as stipulated by laws, administrative regulations, departmental rules,
securities regulatory rules of the place where the shares of the Company are listed
or the Articles of Association.
When the shareholders’ general meeting considers a connected transaction, the connected
shareholders may provide appropriate representations regarding the transaction but shall not
participate in the voting on the transaction. The number of shares with voting rights they
represent shall not be included in the total number of valid votes. V oting on the connected
transaction shall be carried out by the unconnected shareholders present at the meeting, and a
majority of valid votes in favor of the connected transaction shall constitute approval. If the
transaction involves a resolution to amend the Articles of Association, increase or decrease the
registered capital, or address matters related to the merger, division, dissolution or change in
corporate form of the Company, it requires approval from more than two thirds of the valid
voting rights. The announcement of the resolution of a shareholders’ general meeting shall
fully disclose the votes of the unconnected shareholders.
Shareholders (including proxies) may exercise their voting rights in respect of the number
of shares held by them which carry the right to vote, and each share shall carry one vote, unless
otherwise specified in laws, administrative regulations, departmental rules, regulatory
documents and securities regulatory rules of the place where the shares of the Company are
listed.
When a shareholders’ general meeting deliberates significant matters which have an
impact on the interests of small and medium investors, the votes of small and medium investors
shall be calculated separately. The separate counting results shall be disclosed responsively and
publicly in accordance with relevant laws, regulations and securities regulatory rules of the
place where the shares of the Company are listed.
The shares of the Company held by the Company itself shall have no voting right and
shall not be included in the total number of shares with voting rights of the shareholders who
are present at the shareholders’ general meeting.
When any resolution is to be made at the shareholders’ general meeting, it shall be
adopted by shareholders representing more than half of the voting rights of the shareholders in
presence. However, when the shareholders’ general meeting makes a resolution to modify the
Articles of Association, increase or reduce the registered capital, or address matters relating to
the merger, division, dissolution or change in the corporate form, such a resolution shall be
approved by more than two thirds of the voting rights (excluding treasury shares, if any)
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-8 –


--- page 412 ---
represented by the shareholders present at the shareholders’ general meeting. If the issued share
capital of the Company includes shares of different classes, matters involving amendments to
the Articles of Association, increase or reduction of registered capital and mergers, divisions,
dissolutions or changes in the corporate form of the Company which may affect the rights of
the holders of different classes of shares shall, in addition to being resolved by a special
resolution of a shareholders’ general meeting in accordance with the provisions of this article,
be approved by more than two thirds of the voting rights represented by the shareholders
present at the class shareholders’ general meetings.
Convening, Proposals and Notice of Shareholders’ General Meetings
Shareholders’ general meetings shall be convened by the Board of Directors. Independent
non-executive directors shall be entitled to propose to the Board of Directors to convene an
extraordinary shareholders’ general meeting. Where independent non-executive directors
propose to convene an extraordinary shareholders’ general meeting, the Board of Directors
shall, pursuant to the provisions of laws, administrative regulations, securities regulatory rules
of the place where the shares of the Company are listed and the Articles of Association, issue
a written reply on whether or not to approve the convening of the extraordinary shareholders’
general meeting within 10 days upon the receipt of the proposal. If the Board of Directors
agrees to convene the extraordinary shareholders’ general meeting, it shall serve a notice of
such meeting within five days after such resolution is made. If the Board of Directors does not
agree to convene the extraordinary shareholders’ general meeting, it shall give the reasons and
publish an announcement in respect thereof.
The Board of Supervisors shall be entitled to propose to the Board of Directors to convene
an extraordinary shareholders’ general meeting, and such proposal shall be made in writing to
the Board of Directors. The Board of Directors shall, pursuant to laws, administrative
regulations, securities regulatory rules of the place where the shares of the Company are listed
and the Articles of Association, reply in writing on whether or not to agree on the convening
of the extraordinary shareholders’ general meeting within 10 days after receipt of the proposal.
If the Board of Directors agrees to convene the extraordinary shareholders’ general meeting,
it shall serve a notice of such meeting within five days after such resolution is made. Any
change to the original proposal set forth in the notice shall be subject to approval by the Board
of Supervisors.
On the one-share, one-vote basis, the shareholders holding 10% or more of the Company’s
shares (excluding treasury shares, if any) separately or in aggregate shall have the right to
request the Board of Directors to convene an extraordinary shareholders’ general meeting and
such proposal shall be made to the Board of Directors in writing. The Board of Directors shall,
pursuant to laws, administrative regulations, securities regulatory rules of the place where the
shares of the Company are listed and the Articles of Association, reply in writing on whether
or not to agree on the convening of the extraordinary shareholders’ general meeting within 10
days upon the receipt of the request.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-9 –


--- page 413 ---
Where the Board of Directors agrees to convene the extraordinary shareholders’ general
meeting, it shall serve a notice of such meeting within five days after such resolution is made.
Any change to the original request set forth in the notice shall be subject to approval by the
relevant shareholders.
If the Board of Directors does not agree to convene the extraordinary shareholders’
general meeting or fails to give a written reply within 10 days after receipt of the request, the
shareholders holding more than 10% of the Company’s shares separately or in aggregate shall
have the right to propose to the Board of Supervisors on convening of an extraordinary
shareholders’ general meeting and such proposal shall be made to the Board of Supervisors in
writing.
Where the Board of Supervisors gives consent for convening an extraordinary
shareholders’ general meeting, a notice of such meeting shall be issued within five days upon
the receipt of the request and the changes to the original request set forth in the notice shall
be subject to approval by the relevant shareholders.
Where the Board of Supervisors fails to issue a notice of a shareholders’ general meeting
within the stipulated period, the Board of Supervisors shall be deemed as not convening and
chairing the shareholders’ general meeting, and the shareholders who hold more than 10% of
the Company’s shares individually or jointly for more than 90 consecutive days may proceed
to convene and chair a shareholders’ general meeting on their own initiative.
If the shareholders’ general meeting is convened by the Board of Supervisors or
shareholders on their own, a written notice shall be issued to the Board of Directors, and such
meeting shall be filed with the stock exchange of the place where the shares of the Company
are listed.
The shares held by the convening shareholders prior to the announcement of the
resolution of the shareholders’ general meeting shall not be below 10% of the shares of the
Company.
The Board of Supervisors or convening shareholders shall submit the relevant supporting
materials to the securities regulatory authority of the place where the Company is registered
and the stock exchange of the place where the shares of the Company are listed at the time of
the issuance of notice of the shareholders’ general meeting as well as of the announcement of
the resolutions passed by such meeting.
With regard to the shareholders’ general meeting convened by the Board of Supervisors
or shareholders on its/their own initiative, the Board and the secretary to the Board shall offer
cooperation. The Board of Directors shall provide a share register as of the equity registration
date.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-10 –


--- page 414 ---
Annual shareholders’ general meetings shall be convened once a year within six months
after the end of the preceding fiscal year. In any of the following circumstances, the Board of
Directors shall convene an extraordinary shareholders’ general meeting within two (2) months:
(I) the number of directors falls short of the quorum stipulated in the Company Law or
is less than two thirds of the number specified in the Articles of Association;
(II) the unrecovered losses of the Company amount to one third of the total amount of
its share capital;
(III) when shareholders severally or jointly holding more than 10% shares of the
Company request in writing to hold such meeting; (calculated as per the shares of
the Company held by the shareholder at the date on which such written request is
made by such shareholder)
(IV) when the Board of Directors deems necessary;
(V) when the Board of Supervisors proposes to convene such meeting;
(VI) other circumstances stipulated by laws, administrative regulations, departmental
rules, Listing Rules of the Stock Exchange and the Articles of Association occur.
For a shareholders’ general meeting to be held, a notice shall be given in written form
(including via announcement) to each shareholder 20 days in advance, which shall state the
time and venue of the meeting, and the matters to be deliberated at the meeting. For an
extraordinary shareholders’ general meeting, a notice shall be given in written form (including
via announcement) to each shareholder 15 days in advance, unless all shareholders agree that
the notice of this meeting may be exempted from the time limit or notification rules for notices.
The content of a proposal shall fall within the scope of the shareholders’ general
meeting’s powers, have a clear topic and specific resolution items, and comply with relevant
provisions of laws, administrative regulations, the securities regulatory rules of the place where
the shares of the Company are listed, and the Articles of Association of the Company.
Shareholder(s) severally or jointly holding more than 1% shares of the Company may
submit written provisional proposals to the Board of Directors 10 days before a shareholders’
general meeting is convened. The provisional proposals shall cover specific topics for
discussion and specific issues to be resolved. The Board of Directors shall notify other
shareholders within two days after receiving the proposal, announce the content of the
provisional proposal, and submit the provisional proposal to the shareholders’ general meeting
for deliberation, except where the provisional proposal violates laws, administrative
regulations or the Company’s Articles of Association, or falls outside the scope of the powers
of the shareholders’ general meeting. Regarding the publication of supplementary notices for
shareholders’ general meeting, if there are special provisions in the securities regulatory rules
of the place where the shares of the Company are listed, and provided that they do not violate
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-11 –


--- page 415 ---
applicable domestic laws and regulations such as the Company Law and the Guidelines for
Articles of Association of Listed Companies, such provisions shall prevail. If, in accordance
with the securities regulatory rules of the place where the shares of the Company are listed, the
shareholders’ general meeting needs to be postponed due to the publication of supplementary
notices for the shareholders’ general meeting, the convening of the shareholders’ meeting shall
be postponed in accordance with the securities regulatory rules of the place where the shares
of the Company are listed.
Save as specified in the preceding paragraph, the convener shall not change the proposals
set out in the notice of shareholders’ general meeting or add any new proposal after the said
notice is served via announcement.
The shareholders’ general meeting shall not make resolutions on matters not listed in the
notice or matters that do not comply with relevant provisions of laws, administrative
regulations, the securities regulatory rules of the place where the shares of the Company are
listed, and the Articles of Association of the Company.
The notice of a shareholders’ general meeting shall specify:
(I) the time, venue and duration of the meeting;
(II) the matters and proposals submitted for consideration at the meeting;
(III) a clear statement that all shareholders of ordinary shares (including shareholders of
preferred shares whose voting rights have been restored) are entitled to attend the
shareholders’ general meeting and appoint proxies in writing to attend and vote at
such meeting and that such proxies need not be shareholders of the Company;
(IV) the equity registration date of shareholders entitled to attend the shareholders’
general meeting;
(V) the name and telephone number of the coordinator of the meeting;
(VI) where a shareholders’ general meeting is held via online or other means, the voting
time and voting procedure of such means.
Notices or supplementary notices of shareholders’ general meetings shall adequately and
completely disclose the specific contents of all proposals. Where the opinions of an
independent director are required on the matters to be discussed, such opinions and reasons
thereof shall be disclosed when the notices or supplementary notices of shareholders’ general
meetings are served.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-12 –


--- page 416 ---
The Company allows hybrid shareholders’ general meetings, enabling shareholders to
attend the meetings virtually through technological means. The Company may also allow
shareholders to vote via online or other electronic means, and shall clearly state in the notice
of the shareholders’ general meeting the voting time and voting procedures for the online or
other means. The time to start voting at a shareholders’ general meeting held via online or other
means shall not be earlier than 3:00 PM of the day preceding the date of the onsite
shareholders’ general meeting or later than 9:30 AM of the date of the onsite shareholders’
general meeting, and shall not conclude earlier than 3:00 PM of the date of the onsite
shareholders’ general meeting.
The interval between equity registration date and the date of the meeting shall not be more
than 7 working days. The equity registration date shall not be changed once confirmed.
DIRECTORS AND SENIOR MANAGEMENT
Appointment, Removal and Retirement
A director is elected or replaced by the shareholders’ general meeting, and his/her
positions may be terminated by the shareholders’ general meeting before the expiration of
his/her terms of office. The term of office for directors is three years. Upon the expiration of
a director’s term, they may be re-elected for consecutive terms in accordance with the
securities regulatory rules of the place where the shares of the Company are listed. The Board
of Directors has the power to appoint any person to fill a temporary vacancy on the Board or
to increase the number of directors on the Board. Any person so appointed by the Board to fill
a temporary vacancy or increase the Board’s size shall hold office only until the issuer’s first
annual shareholders’ general meeting following their appointment and shall be eligible for
re-election at that meeting.
If any director violates the laws, administrative regulations, departmental rules, the
securities regulatory rules of the place where the shares of the Company are listed or the
Articles of Association in fulfilling his/her duties, thereby incurring any loss of the Company,
the said director shall be liable for compensation. Any director who has left his office without
authorization or is negligent in performing his duties before his term of office expires and
thereby caused the Company to incur a loss shall be liable for compensation.
Directors shall observe laws, administrative regulations and the Articles of Association,
and fulfill the following obligations of loyalty:
(I) not to abuse their official powers to accept bribes or other unlawful income, and not
to expropriate the Company’s property;
(II) not to embezzle monies of the Company;
(III) not to open in their own names or in others’ names any bank account for the purpose
of depositing any of the Company’s assets or monies;
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-13 –


--- page 417 ---
(IV) not to lend monies of the Company to other persons or provide guarantee for other
persons with the property of the Company counter to the Articles of Association or
without the consent of the shareholders’ general meeting or the Board of Directors;
(V) not to conclude any contract or conduct any transaction with the Company counter
to the Articles of Association or without the consent of the shareholders’ general
meeting;
(VI) without the consent of the shareholders’ general meeting, not to take advantage of
their positions to seek for themselves or others any business opportunities that are
due to the Company, or conduct for themselves or others any businesses similar to
those of the Company;
(VII) not to take as their own any commission for any transaction with the Company;
(VIII) not to disclose the Company’s secrets without authorization, not to leak any
significant information that has not been disclosed, and not to seek illegal gains
taking advantage of insider information; and to fulfill the non-competition
obligations agreed upon with the Company after leaving the Company;
(IX) not to use their connected relations to damage the interests of the Company;
(X) to fulfill other duties of loyalty specified by laws, administrative regulations,
departmental rules, securities regulatory rules of the place where the shares of the
Company are listed and the Articles of Association.
Earnings obtained by directors counter to the provisions above shall belong to the
Company, and the directors shall be liable for compensation for any loss incurred to the
Company.
The provisions on the directors’ obligations of loyalty shall also apply to senior
management members.
Directors shall observe laws, administrative regulations and the Articles of Association,
and fulfill the following duties of diligence:
(I) to exercise the rights conferred by the Company with due discretion, care and
diligence to ensure the business operations of the Company comply with State laws,
administrative regulations and economic policies, and do not go beyond the business
scope specified in the business license of the Company;
(II) to treat all shareholders impartially;
(III) to keep informed of the business operations and management of the Company;
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-14 –


--- page 418 ---
(IV) to sign written opinions on the regular reports of the Company; to ensure the
information disclosed by the Company is true, accurate and complete;
(V) to honestly provide the Board of Supervisors with relevant information and data, and
not to prevent the Board of Supervisors or supervisors from exercising their
functions and powers;
(VI) to fulfill other duties of diligence specified by laws, administrative regulations,
departmental rules, securities regulatory rules of the place where the shares of the
Company are listed and the Articles of Association.
The provisions in (IV), (V) and (VI) on the directors’ duties of diligence shall also apply
to senior management members.
The Company shall have one general manager, several deputy general managers, one
chief financial officer and one secretary to the Board. The general manager, deputy general
managers, chief financial officer and the secretary to the Board are senior management
members of the Company and are appointed or dismissed by the Board. The Board of Directors
of the Company may decide that a member of the Board of Directors concurrently serve as the
manager.
The Company shall have a secretary to the Board to see to the preparations for
shareholders’ general meetings and Board meetings, keeping of documentation and
shareholders’ data, handling of matters relating to information disclosure, etc.
The secretary to the Board shall observe the laws, administrative regulations,
departmental rules and the Articles of Association.
If any member of senior management violates the laws, administrative regulations,
departmental rules or the Articles of Association in fulfilling his/her duties to the Company,
thereby incurring any loss of the Company, the said member shall be liable for compensation.
The senior management of the Company shall faithfully perform their duties and
safeguard the best interests of the Company and all shareholders. If the senior management
members of the Company fail to faithfully perform their duties or violate the duty of
good-faith, causing damage to the interests of the Company and the holders of publicly-traded
shares, they shall bear compensation liability in accordance with the law.
When a director, supervisor or senior management member directly or indirectly enters
into a contract or conducts a transaction with the Company, they shall report the matters related
to the contract-making or transaction to the Board of Directors and obtain the approval of the
Board of Directors through a resolution in accordance with the provisions of the Articles of
Association.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-15 –


--- page 419 ---
The provisions of the preceding paragraph shall apply when a close relative of a director,
supervisor or senior management member, an enterprise directly or indirectly controlled by a
director, supervisor, senior management member or their close relatives, or an affiliated person
having other affiliated relationships with a director, supervisor or senior management member
enters into a contract or conducts a transaction with the Company.
A director, supervisor or senior management member shall not take advantage of their
positions to seek for themselves or for others business opportunities that should belong to the
Company. However, this does not apply in any of the following circumstances:
(I) they have reported the matter to the Board of Directors and obtained the approval
of a board resolution in accordance with the Articles of Association;
(II) the Company is unable to take advantage of such business opportunities according
to laws, administrative regulations or the provisions of the Articles of Association.
A director, supervisor or senior management member shall not operate, either on their
own account or for others, businesses of the same kind as those of the Company where they
serve, unless they report the matter to the Board of Directors and obtain the approval of a board
resolution in accordance with the Articles of Association.
Any income derived by directors, supervisors and senior management members in
violation of the above-mentioned provisions shall belong to the Company.
FINANCIAL AND ACCOUNTING SYSTEMS, PROFIT DISTRIBUTION AND AUDIT
Accounting and Auditing
The Company shall formulate its financial and accounting systems in accordance with
relevant laws, administrative regulations and the provisions of the relevant financial authority
of the State Council.
The Company shall submit and disclose its annual report within four months after the end
of each fiscal year in accordance with relevant regulatory requirements, and submit and
disclose its interim report within three months after the end of the first half of each fiscal year
in accordance with relevant regulatory requirements.
The aforesaid annual reports and interim reports shall be prepared in accordance with
relevant laws, administrative regulations, departmental rules and the securities regulatory rules
of the place where the shares of the Company are listed.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-16 –


--- page 420 ---
Profit Distribution
When the Company distributes the after-tax profits of the current year, it shall allocate
10% of the profits to the Company’s statutory reserve fund. Such allocation may be stopped
when the statutory reserve fund of the Company has accumulated to at least 50% of the
registered capital of the Company.
If the statutory reserve fund of the Company is insufficient to recover the losses of the
preceding year, the profits of the current year shall first be used to recover the said losses
before being allocated to the statutory reserve fund as per the preceding paragraph.
After statutory reserve fund is withdrawn out of the after-tax profits, discretionary reserve
fund may also be withdrawn out of the same as per a resolution made at a shareholders’ general
meeting.
The after-tax profits remaining after recovery of losses and withdrawal of reserve funds
may be distributed to the shareholders in proportion to their shareholding percentages.
The shares of the Company held by the Company shall not be subject to profit
distribution.
The reserve funds of the Company shall be used to make up for the losses, enhance the
operating scale or increase the registered capital of the Company.
When using the reserve funds to make up for the Company’s losses, the Company shall
first use the discretionary reserve fund and the statutory reserve fund. If the losses cannot be
fully made up, the Company may then use the capital reserve fund in accordance with relevant
regulations.
When converting the statutory reserve fund into an increase in the registered capital, the
remaining amount of this reserve fund shall not be less than 25% of the Company’s registered
capital before the conversion.
Merger, Division, Dissolution and Liquidation of the Company
For a merger, the merging parties shall execute a merger agreement and prepare a balance
sheet and an inventory of assets. The Company shall notify all creditors within 10 days after
adoption of the merger resolution and shall make an announcement on a qualified media and
the HKEXnews website ( www.hkexnews.hk ) within 30 days. The creditors may require the
Company to repay debts or provide corresponding guarantees within 30 days after receipt of
the notice or within 45 days after the announcement if the creditors haven’t received the notice.
Upon merger, the credits and liabilities of each of the merged parties shall be assumed by
the surviving party or the newly established company.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-17 –


--- page 421 ---
Where the Company is divided, its properties shall be divided accordingly.
Where the Company is divided, a balance sheet and an inventory of assets shall be
prepared. The Company shall notify all creditors within 10 days after adoption of the division
resolution and shall make an announcement on a qualified media and the HKEXnews website
(www.hkexnews.hk ) within 30 days.
The Company dissolves for the following reasons:
(I) the term of operation specified in the Articles of Association expires or any other
circumstance for dissolution specified in the Articles of Association arises;
(II) 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 according to law, or the Company is ordered to close
or is cancelled;
(V) if the Company gets into serious trouble in operations and management and its
continued existence may incur material losses of the interests of the shareholders,
and no solution can be found through any other channel, the shareholders holding
more than 10% of the total voting rights of the Company may request the people’s
court to dissolve the Company.
If a company is dissolved due to the circumstances stipulated in items (1), (2), (4) or (5)
of Paragraph 1 of Article 229 of the Company Law, it shall be liquidated. Directors are the
liquidation obligors of the Company. They shall form a liquidation team to conduct liquidation
within 15 days from the date when the grounds for dissolution occur.
The Company’s liquidation group is composed of directors, except for those selected by
a resolution of the shareholders’ general meeting.
If the liquidator fails to perform liquidation duties in a timely manner, causing losses to
the Company or creditors, he/she shall be liable for compensation.
The Company shall carry out liquidation in accordance with the provisions of the first
paragraph of the preceding article. If a liquidation group is not established for liquidation
within the specified period or if the liquidation group is established but fails to carry out the
liquidation, interested parties may request the people’s court to designate relevant personnel to
form a liquidation group for the purpose of liquidation. If the Company is dissolved due to the
revocation of its business license, being ordered to close, or being revoked, the department or
company registration authority that made the decision to revoke the business license, order the
closure, or revoke the Company may apply to the people’s court to designate relevant personnel
to form a liquidation group for the purpose of liquidation.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-18 –


--- page 422 ---
The liquidation group shall exercise the following functions and powers during the course
of the liquidation:
(I) to liquidate the Company’s assets and produce a balance sheet and schedule of
assets;
(II) to notify the Company’s creditors by way of notice or public announcement;
(III) to manage and clear the remaining business of the Company;
(IV) to pay outstanding taxes and any tax liability incurred in the course of the
liquidation;
(V) to settle claims and debts;
(VI) to deal with the surplus assets remaining after the Company’s debts have been
repaid; and
(VII) to represent the Company in any civil litigation to which it is a party.
The liquidation group shall, within ten days of its formation, notify the Company’s
creditors of its formation, and shall make a public announcement in qualified media and on the
HKEX website of the Hong Kong Stock Exchange ( www.hkexnews.hk ) within 60 days of its
formation. Any creditor shall, within 30 days of receipt of a notice or within 45 days of the
public announcement in the event that the relevant creditor does not receive a notice, make a
claim to the liquidation group on the debt owed to it/him.
The liquidation group shall, after liquidating the assets of the Company and producing a
balance sheet and schedule of assets, draft a liquidation plan and present it to the shareholders’
general meeting or to the people’s court for confirmation.
Any remaining assets after payment of liquidation expenses, employee wages, social
insurance premiums and statutory indemnity premiums, outstanding taxes and outstanding
debts may be distributed on a prorate basis in accordance with the respective proportion of
stock held by each shareholder.
The Company in liquidation shall continue in existence during the course of the
liquidation but may not conduct any business unconnected with the liquidation. No assets of
the Company may be distributed to any shareholder s prior to repaying debts in accordance
with the provisions.
Where, after liquidating the assets of the Company and formulating a balance sheet and
schedule of assets, the liquidation group finds that the Company’s assets are insufficient to
meet its obligations in full, it shall file a bankruptcy petition with the people’s court.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-19 –


--- page 423 ---
Where the people’s court declares the Company bankrupt by a ruling, the liquidation
group shall hand over administration of the liquidation to the people’s court.
Following completion of the liquidation of the Company, the liquidation group shall draft
a liquidation report and submit it to the shareholders’ general meeting or to the people’s court
for confirmation, submit it to the company registration authority to apply for the cancellation
of the registration of the Company, and publish a public announcement relating to the
termination of the Company.
OTHER SIGNIFICANT PROVISIONS RELATED TO THE COMPANY AND ITS
SHAREHOLDERS
Board of Directors
The Board of Directors shall exercise the following functions and powers:
(I) to convene the shareholders’ general meetings and report to the shareholders’
general meetings on its work;
(II) to execute resolutions of the shareholders’ general meetings;
(III) to determine the Company’s operational plans and investment plans;
(IV) to formulate the Company’s profit distribution plans and loss recovery plans;
(V) to formulate the Company’s plans on the increase or reduction of its registered
capital and on the issuance of corporate bonds;
(VI) to formulate the Company’s plans on the merger, division, dissolution or
transformation of the Company;
(VII) to make decisions on the establishment of the Company’s internal management
departments;
(VIII) to decide on the appointment and dismissal and remunerations of the general
manager and the secretary to the Board of the Company as nominated by the
chairman of the Board of Directors; the deputy general manager, chief financial
officer and other senior management as nominated by the chairman of the Board of
Directors or the general manager after consideration and approval by the nomination
committee;
(IX) to develop the company’s basic management system;
(X) to decide on the Company’s investment in other enterprises within the specified
limits;
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-20 –


--- page 424 ---
(XI) to formulate proposals for amendments to the Articles of Association;
(XII) to manage the Company’s information disclosure matters;
(XIII) to decide on the employment or dismissal of accounting firms responsible for audit
business of the Company;
(XIV) to listen to the work reports of the Company’s managers and review their
performance;
(XV) to consider contracts or transactions entered into directly or indirectly between the
Company and directors, supervisors, senior management and enterprises controlled
by them, or close relatives of directors, supervisors and senior management and
enterprises controlled by those relatives, or other related parties associated with
directors, supervisors, and senior management;
(XVI) to consider matters that are required by laws, administrative regulations,
departmental rules, securities regulatory rules of the place where the shares of the
Company are listed, or the Articles of Association to be determined by the Board of
Directors;
(XVII) to exercise other functions and powers granted by laws, administrative regulations,
departmental rules, securities regulatory rules of the place where the shares of the
Company are listed, or the Articles of Association.
Matters that exceed the scope of authority granted by the shareholders’ general meeting
shall be submitted to the shareholders’ general meeting for consideration.
No meeting of the Board of Directors may be held unless a majority of directors are
present. Any resolution of the Board of Directors shall be adopted by a majority of directors.
Each director shall have one vote in any resolution put to a vote of the Board of Directors.
If a director has a related party relationship with the enterprise or individual involved in
the matters being resolved at the meeting of the Board of Directors, that director shall promptly
report in writing to the Board of Directors. Directors with a related party relationship shall not
exercise their voting rights on that resolution nor act as a proxy for other directors to exercise
voting rights. A meeting of the Board of Directors may be held with the attendance of a
majority of the unrelated directors, and the resolutions made at the meeting of the Board of
Directors must be approved by a majority of the unrelated directors. If the number of unrelated
directors attending the meeting of the Board of Directors is less than three, the matter shall be
submitted to the shareholders’ general meeting for consideration. If there are any additional
restrictions under laws, regulations, or securities regulatory rules of the place where the shares
of the Company are listed regarding directors’ participation in meetings of the Board of
Directors and voting, those provisions shall apply.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-21 –


--- page 425 ---
The chairman of the Board of Directors shall exercise the following functions and powers:
(I) to convene and preside over meetings of the Board of Directors, review the
implementation of meetings of the Board of Directors, and report on work to the
shareholders’ general meeting and the Board of Directors;
(II) to execute resolutions of the shareholders’ general meeting and the Board of
Directors;
(III) to propose the appointment or dismissal of the Company’s general manager,
secretary to the Board and other senior management;
(IV) to decide on the appointment or dismissal of management personnel, except for
those that should be determined by the Board of Directors;
(V) to exercise the powers of the legal representative as specified in the Articles of
Association.
The Board of Directors shall make meeting minutes of the matters discussed at the
meeting, and the directors present shall sign the meeting minutes.
The meeting of the Board of Directors minutes shall be kept as part of the Company’s
archives for a period of not less than 10 years.
The meeting of the Board of Directors minutes shall include the following content:
(I) time and place of the meeting and name of the convener;
(II) name of directors present at the meeting and name of director (agent) appointed to
be present at the meeting of the Board of Directors on behalf of others;
(III) agenda of the meeting;
(IV) key points of the directors’ speeches;
(V) the voting method and results for each resolution (the voting results shall specify the
number of votes for, against, or abstentions);
(VI) any other matters that attending directors believe should be recorded.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-22 –


--- page 426 ---
Special Committees of the Board of Directors
The Board of Directors of the Company shall establish the Audit, Remuneration and
Nomination Committees, and may establish other special committees, such as a Strategy
Committee, as needed. These special committees are accountable to the Board of Directors and
perform their duties in accordance with the Articles of Association and the authority granted
by the Board of Directors. Proposals from the special committees shall be submitted to the
Board of Directors for consideration and decision. All members of the special committees shall
consist solely of directors. In particular, the Audit Committee shall have three or more
members, all of whom shall be non-executive directors. The majority of members in the
Nomination Committee and Remuneration Committee shall be independent non-executive
directors. The Board of Directors shall be responsible for formulating the working rules for its
special committees to regulate their operations. If there are other provisions regarding the
composition of special committees in the securities regulatory rules of the place where the
shares of the Company are listed, those provisions shall prevail.
The Board of Directors of the Company comprises nine Directors, including six
non-independent non-executive directors and three independent non-executive directors, who
are elected by the shareholders’ general meeting. Among the independent non-executive
directors, there should be at least one professional in finance or accounting as defined by the
Listing Rules of the Stock Exchange.
The Board of Directors shall have one chairman and may have a vice-chairman. The
chairman and vice-chairman are elected by a majority vote of all the directors on the Board of
Directors. The chairman of the Board of Directors shall convene and preside over meetings of
the Board of Directors and examine the implementation of resolutions of the Board of
Directors. The vice-chairman shall assist the chairman in his/her work. If the chairman is
unable or fails to perform his/her duties, the vice-chairman shall perform the duties. If the
vice-chairman is unable or fails to perform his/her duties, a director jointly nominated by a
majority of the directors shall perform the duties.
General Manager
The general manager shall serve a term of three years and may be re-elected for
consecutive terms.
The general manager shall be accountable to the Board of Directors and exercise the
following functions and powers:
(I) to be in charge of the Company’s production, operation and management, and to
organize the implementation of the resolutions of the Board of Directors;
(II) to organize the implementation of the Company’s annual business plan and
investment plans;
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-23 –


--- page 427 ---
(III) to draft plans for the establishment of the Company’s internal management structure;
(IV) to draft the Company’s basic management system;
(V) to formulate specific rules and regulations for the Company;
(VI) to propose the appointment or dismissal of the Company’s deputy general manager
and chief financial officer;
(VII) to exercise other functions and powers conferred by the Board of Directors.
The general manager shall attend meetings of the Board of Directors.
The general manager shall formulate working rules of the general manager, which shall
be implemented after being approved by the Board of Directors.
The working rules of the general manager shall contain the following contents:
(I) conditions, procedure and participants of the general manager office’s meeting;
(II) responsibilities and work allocation of the general manager and other senior
management of the Company;
(III) use of funds and assets of the Company, scope of authorization to enter into
contracts and reporting policies regarding the Board of Directors and the Board of
Supervisors; and
(IV) other matters which the Board of Directors deems necessary.
The general manager may resign before expiry of his/her term of office. The specific
procedures and methods for the resignation of the general manager shall be specified in the
employment contract concluded by the general manager and the Company.
The deputy general manager shall assist the general manager in his/her work, be
responsible for related tasks upon entrustment by the general manager, and issue relevant
business documents within the scope of his/her duty. When the general manager is unable to
exercise his/her authority, the deputy general manager may act on behalf of the general
manager as entrusted.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-24 –


--- page 428 ---
Secretary to the Board
The Company shall have a secretary to the Board, who shall be responsible for the
preparation of the shareholders’ general meetings and meetings of the Board of Directors,
preservation of documents and management of the information of the Company’s shareholders,
and handle matters related to information disclosure, etc.
The secretary to the Board shall observe pertinent provisions of laws, administrative
regulations, department rules and the Articles of Association.
Board of Supervisors
The directors, general manager and other senior management shall not act concurrently
as supervisors.
Each supervisor shall serve for a term of three years, which term is renewable upon
reelection upon expiry.
The Company shall have a Board of Supervisors consisting of three members, of whom
two shall be elected by the shareholders’ general meeting, and one shall be an employee
representative of the Company. The employee representative in the Board of Supervisors shall
be elected by the employee representative meeting.
The Board of Supervisors shall have one chairman and may have a vice-chairman. The
chairman and vice-chairman of the Board of Supervisors are elected by a majority vote of all
the supervisors. The chairman of the Board of Supervisors shall convene and preside over
meetings of the Board of Supervisors. If the chairman of the Board of Supervisors is unable
or fails to perform his/her duties, the vice-chairman of the Board of Supervisors shall convene
and preside over meetings of the Board of Supervisors. If the vice-chairman of the Board of
Supervisors is unable or fails to perform his/her duties, a supervisor jointly nominated by a
majority of the supervisors shall convene and preside over meetings of the Board of
Supervisors.
The Board of Supervisors shall exercise the following functions and powers:
(I) to review the Company’s financial position;
(II) to supervise the directors and senior management’s acts in performing duties of the
Company, propose a removal of any director or senior management in violation of
any laws, administrative regulations, the Articles of Association or resolution
adopted at the shareholders’ general meeting;
(III) to demand any director or senior management who acts in a manner which is harmful
to the Company’s interest to rectify such behavior;
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-25 –


--- page 429 ---
(IV) to propose to convene an extraordinary shareholders’ general meeting, and to
convene and preside over shareholders’ general meetings where the Board of
Directors fails to perform its duty to do so as required by the Company Law;
(V) to submit proposals to shareholders’ general meetings;
(VI) to initiate legal proceedings against any director or senior management according to
Article 189 of the Company Law;
Meetings of the Board of Supervisors shall be held at least once every six months. The
Board of Supervisors may propose to convene an extraordinary meeting of the Board of
Supervisors.
AMENDMENT TO THE ARTICLES OF ASSOCIATION OF THE COMPANY
In any of the following circumstances, the Company shall amend the Articles of
Association:
(I) The Articles of Association is contradictory to any provision of the amended version
of the Company Law or other applicable laws or administrative regulations or
securities regulatory rules of the place where the shares of the Company are listed;
(II) There is any change to the Company’s situation and is inconsistent with any matter
recorded in the Articles of Association;
(III) A shareholders’ general meeting adopts a resolution for amendment to the Articles
of Association.
Amendments to the Articles of Association adopted by a resolution of the shareholders’
general meeting which are subject to approvals from relevant competent authority shall be
submitted to the competent authority for approval; if there is any change relating to the
registered particulars of the Company, application shall be made for change in registration in
accordance with the law.
The Board of Directors shall amend the Articles of Association according to the resolution
of the shareholders’ general meeting for amendments hereof and the approval opinions of
relevant competent authority.
If amendments to the Articles of Association need to be disclosed pursuant to laws and
regulations, they shall be disclosed accordingly.
APPENDIX IV SUMMARY OF ARTICLES OF ASSOCIATION
– IV-26 –


--- page 430 ---
FURTHER INFORMATION ABOUT OUR COMPANY
Incorporation of our Company
Our Company was established as a limited liability company in the PRC on March 31,
2011 and was converted into a joint stock limited company on May 25, 2023 under the laws
of the PRC. As of the Latest Practicable Date, the registered share capital of our Company is
RMB404,092,760.
Our registered place of business in Hong Kong is at Room 1915, 19/F, Lee Garden One,
33 Hysan Avenue, Causeway Bay, Hong Kong. We have been registered as a non-Hong Kong
Company under Part 16 of the Companies Ordinance. Ms. Wong Wai Y ee, Ella at Room 1915,
19/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong has been appointed as
our authorized representative for the acceptance of service of process and notices in Hong
Kong.
As our Company was established in the PRC, we are subject to the relevant laws and
regulations of the PRC. A summary of the relevant aspects of laws and regulations of the PRC
and our Articles of Association is set out in “Regulatory Overview” and Appendix IV to this
Prospectus, respectively.
Changes in the Share Capital of our Company
Save as disclosed in the sections headed “History, Development and Corporate Structure
— Pre-IPO Investments” in this Prospectus, there has been no other alteration in the share
capital of our Company during the two years immediately preceding the date of this Prospectus.
Changes in the Share Capital of our Subsidiaries
A summary of the corporate information and the particulars of our subsidiary is set out
in the Accountants’ Report in Appendix I to this Prospectus.
On December 10, 2025, Epiworld Hong Kong was incorporated in Hong Kong as a private
limited company with an initial registered capital of HK$10,000. Save as disclosed above,
there has been no alterations of share capital of our subsidiary within the two years preceding
the date of this Prospectus.
Resolutions of our Shareholders
Pursuant to the extraordinary general meeting of our Shareholders in March 2025, it was
resolved, among others, and the following was approved:
(a) the issue of H Shares with a nominal value of RMB1.00 each and the listing of such
H Shares on the Stock Exchange;
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-1 –


--- page 431 ---
(b) the number of H Shares to be issued pursuant to the Global Offering;
(c) conditional upon the completion of the Global Offering, 97,431,581 Unlisted Shares
held by certain existing Shareholders will be converted into H Shares;
(d) subject to the completion of the Global Offering, the Articles of Association have
been approved and adopted, which shall become effective on the Listing Date, and
our Board has been authorized to amend the Articles of Association to the extent
necessary in accordance with any comments from the relevant regulatory
authorities; and
(e) our Board has been authorized to handle all relevant matters relating to, among other
things, the implementation of issuance of H Shares and the Listing.
FURTHER INFORMATION ABOUT OUR BUSINESS
Summary of Material Contracts
The following contracts (not being contracts entered into in the ordinary course of
business) were entered into by our Group within the two years preceding the date of this
Prospectus and are or may be material:
(a) the cornerstone investment agreement dated March 19, 2026 entered into among the
Company, Xiamen Advanced Manufacturing Equity Investment Fund Partnership
(Limited Partnership) (ΥྫΆุ(Υྫ)), China
International Capital Corporation Hong Kong Securities Limited and ABCI Capital
Limited, pursuant to which Xiamen Advanced Manufacturing Equity Investment
Fund Partnership (Limited Partnership) agreed to subscribe for H Shares at the Offer
Price in the aggregate amount of HK$774,797,022.30; and
(b) the Hong Kong Underwriting Agreement.
Intellectual Property Rights
As of the Latest Practicable Date, our Group has registered, or has applied for the
registration of the following intellectual property rights which were material to our Group’s
business.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-2 –


--- page 432 ---
Trademarks
As of the Latest Practicable Date, we had registered the following trademarks which we
consider to be or may be material to our business:
No. Trademark Registered Owner
Registration
Number
Place of
Registration
1 /H1118/H1118/H1118
 The Company 69365678
69359904
PRC
2 /H1118/H1118/H1118
 The Company 306183090 Hong Kong
3 /H1118/H1118/H1118
 The Company 02319662
02320519
Taiwan
4 /H1118/H1118/H1118
 The Company 1770331 European Union
5 /H1118/H1118/H1118
 The Company 1770331 Australia
6 /H1118/H1118/H1118
 The Company 1770331 Malaysia
7 /H1118/H1118/H1118
 The Company 1770331 Switzerland
8 /H1118/H1118/H1118
 The Company 1770331 Japan
9 /H1118/H1118/H1118
 The Company 1770331 New Zealand
10 /H1118/H1118/H1118
 The Company 1770331 Singapore
11 /H1118/H1118/H1118
 The Company 1770331 United Kingdom
12 /H1118/H1118/H1118
 The Company 1770331 Russia
13 /H1118/H1118/H1118
 The Company 69541459
69367035
PRC
14 /H1118/H1118/H1118
 The Company 306183108 Hong Kong
15 /H1118/H1118/H1118
 The Company 02319663
02320520
Taiwan
16 /H1118/H1118/H1118
 The Company 7683149 United States
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-3 –


--- page 433 ---
No. Trademark Registered Owner
Registration
Number
Place of
Registration
17 /H1118/H1118/H1118
 The Company 1771680 European Union
18 /H1118/H1118/H1118
 The Company 1771680 Australia
19 /H1118/H1118/H1118
 The Company 1771680 Malaysia
20 /H1118/H1118/H1118
 The Company 1771680 Switzerland
21 /H1118/H1118/H1118
 The Company 1771680 Japan
22 /H1118/H1118/H1118
 The Company 1771680 New Zealand
23 /H1118/H1118/H1118
 The Company 1771680 Singapore
24 /H1118/H1118/H1118
 The Company 1771680 United Kingdom
25 /H1118/H1118/H1118
 The Company 1771680 Russia
26 /H1118/H1118/H1118
 The Company 69367847
69372271
PRC
27 /H1118/H1118/H1118
 The Company 306183081 Hong Kong
28 /H1118/H1118/H1118
 The Company 02319661
02320518
Taiwan
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-4 –


--- page 434 ---
No. Trademark Registered Owner
Registration
Number
Place of
Registration
29 /H1118/H1118/H1118
 The Company 7683148 United States
30 /H1118/H1118/H1118
 The Company 1771658 European Union
31 /H1118/H1118/H1118
 The Company 1771658 Australia
32 /H1118/H1118/H1118
 The Company 1771658 Malaysia
33 /H1118/H1118/H1118
 The Company 1771658 Switzerland
34 /H1118/H1118/H1118
 The Company 1771658 Japan
35 /H1118/H1118/H1118
 The Company 1771658 New Zealand
36 /H1118/H1118/H1118
 The Company 1771658 Singapore
37 /H1118/H1118/H1118
 The Company 1771658 United Kingdom
38 /H1118/H1118/H1118
 The Company 1771658 Russia
39 /H1118/H1118/H1118
 The Company 61180379
12043688
61177240
PRC
40 /H1118/H1118/H1118
The Company 1205809 European Union
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-5 –


--- page 435 ---
No. Trademark Registered Owner
Registration
Number
Place of
Registration
41 /H1118/H1118/H1118
 The Company UK00801205809 United Kingdom
42 /H1118/H1118/H1118
 The Company 1205809 Japan
43 /H1118/H1118/H1118
 The Company 4737130 United States
44 /H1118/H1118/H1118
 The Company 61170360
61182586
PRC
As of the Latest Practicable Date, we had applied for the registration of the following
trademarks which we consider to be or may be material to our business:
No. Trademark Owner Place of Registration
1 /H1118/H1118/H1118
 The Company United States
2 /H1118/H1118/H1118
 The Company Republic of Korea
3 /H1118/H1118/H1118
 The Company India
4 /H1118/H1118/H1118
 The Company Canada
5 /H1118/H1118/H1118
 The Company Republic of Korea
6 /H1118/H1118/H1118
 The Company India
7 /H1118/H1118/H1118
 The Company Canada
8 /H1118/H1118/H1118
 The Company Republic of Korea
9 /H1118/H1118/H1118
 The Company India
10/H1118/H1118/H1118
 The Company Canada
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-6 –


--- page 436 ---
Patents
As of the Latest Practicable Date, we are the owner of the following material patents,
details of which are as follows:
No. Patent description Registered Owner
Place of
Registration
1. /H1118/H1118/H1118A Method for Reducing Growth Defects
in SiC Epitaxial Wafers and a SiC
Substrate (ڗ
ֵ)
Company PRC
2. /H1118/H1118/H1118A Control Method for Growth of SiC
Epitaxial (છՓ
ج)
Company PRC
3. /H1118/H1118/H1118SiC Step Flow Low-Speed Growth
Method for Chemical Potential
Regulation Growth Monomer under
Non-Equilibrium Condition (̻ፅૢ
ٙSiCݴ
ج)
Company PRC
4. /H1118/H1118/H1118A Method for Reducing Surface Defects
of SiC Epitaxial Film (Э၁ʷᾼ
ج)
Company PRC
5. /H1118/H1118/H1118A Method for Reducing Growth Defects
in SiC Epitaxial Wafers and a SiC
Substrate (ڗ
ֵ)
Company PRC
Domain Names
As of the Latest Practicable Date, we had registered the following internet domain names
which we consider to be or may be material to our business:
No. Domain Name Registered Owner Expiry Date
1. /H1118/H1118/H1118http://www.epiworld.com.cn/ the Company June 21, 2026
Save as disclosed in this section headed “Intellectual Property Rights”, as of the Latest
Practicable Date, there were no other intellectual property rights which are or may be material
to our business.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-7 –


--- page 437 ---
FURTHER INFORMATION ABOUT OUR DIRECTORS, SUPERVISORS, SENIOR
MANAGEMENT AND SUBSTANTIAL SHAREHOLDERS
Interests of our Directors, Supervisors and chief executive in the Company and our
associated corporations
Save as disclosed in the section headed “Substantial Shareholders” in this Prospectus,
immediately following the completion of the Global Offering, so far as our Directors are aware,
none of our Directors, Supervisors and chief executive has any interests and short positions in
our Shares, underlying Shares or debentures of our Company or any of our associated
corporations (within the meaning of Part XV of the SFO) (i) which will have to be notified to
us and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including
interests and short positions in which they are taken or deemed to have under such provisions
of the SFO), or (ii) which will be required, pursuant to section 352 of the SFO, to be entered
in the register referred to therein, or (iii) which will be required to be notified to us and the
Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed
Issuers contained in the Listing Rules.
Interests of the substantial shareholders in the Shares
Save as disclosed in “Substantial Shareholders” in this Prospectus, immediately following
the completion of the Global Offering, our Directors are not aware of any other person (not
being a Director, Supervisor or chief executive of our Company) who will have an interest or
short position in our Shares or the underlying Shares which would fall to be disclosed to us and
the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who
is, directly or indirectly, interested in 10% or more of the issued voting shares of our Company.
Particulars of Directors’ and Supervisors’ Service Contracts
Each of the Directors and Supervisors has entered into a service contract or a letter of
appointment with our Company.
Save as disclosed in this section, we have not entered into, and do not propose to enter
into any service contracts with any of our Directors or Supervisors in their respective capacities
as Directors or Supervisors (excluding agreements expiring or determinable by any member of
our Group within one year without payment of compensation other than statutory
compensation).
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-8 –


--- page 438 ---
Remuneration of Directors and Supervisors
Save as disclosed in “Directors, Supervisors and Senior Management” and Note 14 to the
Accountants’ Report set out in Appendix I to this Prospectus for the three years ended
December 31, 2024 and the nine months ended September 30, 2025, none of our Directors or
Supervisors received other remunerations of benefits in kind from us.
Disclaimers
(a) save as disclosed in the section headed “Substantial Shareholders” in this Prospectus and
this section, none of our Directors, Supervisors or our chief executive has any interest or
short position in our Shares, underlying Shares or debentures of our Company or any of
our associated corporations (within the meaning of Part XV of the SFO) which will have
to be notified to us and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of
the SFO, 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 us and the Stock
Exchange pursuant to Model Code for Securities Transactions by Directors of Listed
Issuers once the H Shares are listed on the Stock Exchange;
(b) save as disclosed in the section headed “Substantial Shareholders” in this Prospectus,
none of our Directors or Supervisors is aware of any person (not being a Director,
Supervisor or chief executive of our Company) who will, immediately following the
completion of the Global Offering and the conversion of Unlisted Shares into H Shares,
have an interest or short position in our Shares or underlying Shares which would fall to
be disclosed to us under the provisions of Divisions 2 and 3 of Part XV of the SFO or who
is interested, directly or indirectly, in 10% or more of the issued voting shares of any
member of our Group;
(c) none of our Directors, Supervisors, their respective close associates (as defined under the
Listing Rules) or Shareholders who own more than 5% of the number of issued shares of
our Company has any interests in the five largest customers or the five largest suppliers
of our Group for each year/period during the Track Record Period; and
(d) none of our Directors, Supervisors or any of the parties listed in “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 Group; or
ii. materially interested in any contract or arrangement subsisting at the date of this
Prospectus which is significant in relation to our business.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-9 –


--- page 439 ---
OTHER INFORMATION
Estate Duty
Our Directors have been advised that no material liability for estate duty is likely to fall
on our Company or any of our subsidiaries under the laws of the PRC.
Litigation
As of the Latest Practicable Date, we were not engaged in any litigation, arbitration or
claim of material importance and no litigation, arbitration or claim of material importance was
known to our Directors to be pending or threatened by or against any member of our Group,
that would have a material and adverse effect on our Group’s results of operations or financial
conditions, taken as a whole.
Preliminary Expenses
As of the Latest Practicable Date, our Company has not incurred any material preliminary
expenses.
Promoter
The promoters of the Company are shareholders of our Company as of May 25, 2023
immediately before our conversion into a joint stock limited liability company. Within the two
years immediately 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 the promoters in
connection with the Global Offering and the related transactions described in this Prospectus.
Taxation of Holders of H Shares
The sale, purchase and transfer of H Shares registered with our Hong Kong branch
register of members will be subject to Hong Kong stamp duty. The current rate charged on each
of the purchaser and seller is 0.1% of the consideration of or, if higher, of the fair value of our
Shares being sold or transferred.
No Material Adverse Change
Our Directors confirm that there has been no material adverse change in the financial or
trading position or prospects of the Group since September 30, 2025 (being the date to which
the latest consolidated financial statements of our Group were prepared).
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-10 –


--- page 440 ---
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 their opinion and/or
advice in this Prospectus are as follows:
Name Qualification
China International Capital
Corporation Hong Kong Securities
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A corporation licensed to conduct Type 1 (dealing in
securities), Type 2 (dealing in futures contracts),
Type 4 (advising on securities), Type 5 (advising on
futures contracts), and Type 6 (advising on corporate
finance) of the regulated activities as defined under
the SFO
Jingtian & Gongcheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Legal adviser to our Company as to PRC law
BDO Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Certified Public Accountants
Registered Public Interest Entity Auditor
China Insights Industry Consultancy
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Independent industry consultant
Pillsbury Winthrop Shaw Pittman
LLP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
U.S. export control and sanctions counsel
As of the Latest Practicable Date, none of the experts named above had any shareholding
interest in our Company or any of our subsidiaries or the right (whether legally enforceable or
not) to subscribe for or to nominate persons to subscribe for securities in any member of our
Group.
Consents of Experts
Each of the experts as referred to “Qualifications of Experts” of this Appendix has given
and has not withdrawn their respective written consents to the issue of this Prospectus with the
inclusion of their reports and/or letters (as the case may be) and the references to their names
included in the form and context in which they are respective included.
Sole Sponsor’s Independence
The Sole Sponsor satisfies the independence criteria applicable to the sponsor set out in
Rule 3A.07 of the Listing Rules.
Pursuant to the engagement letter entered into between the Company and the Sole
Sponsor, the Sole Sponsor’s fees payable by us to the Sole Sponsor in respect of its services
as sponsor in connection with the Listing on the Stock Exchange is USD500,000.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-11 –


--- page 441 ---
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.
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).
Miscellaneous
(a) except in connection with our A share listing application as disclosed in the section
headed “History, Development and Corporate Structure” in this Prospectus and the
Listing, within the two years preceding the date of this Prospectus: (i) we have not issued
nor agreed to issue any share or loan capital fully or partly paid either for cash or for a
consideration other than cash; and (ii) no commissions, discounts, brokerage fee or other
special terms have been granted in connection with the issue or sale of any shares of our
Company;
(b) no share or loan capital of our Company is under option or is agreed conditionally or
unconditionally to be put under option;
(c) we have not issued nor agreed to issue any founder shares, management shares or deferred
shares;
(d) there are no arrangements under which future dividends are waived or agreed to be
waived;
(e) there are no procedures for the exercise of any right of pre-emption or transferability of
subscription rights;
(f) there are no contracts for hire or hire purchase of plant to or by us for a period of over
one year which are substantial in relation to our business;
(g) there have been no interruptions in our business which may have or have had a significant
effect on our financial position in the last 12 months;
(h) there are no restrictions affecting the remittance of profits or repatriation of capital by us
into Hong Kong from outside Hong Kong;
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-12 –


--- page 442 ---
(i) no part of the equity or debt securities of our Company, if any, is currently listed on or
dealt in on any stock exchange or trading system, and no such listing or permission to list
on any stock exchange other than the Hong Kong Stock Exchange is currently being or
agreed to be sought;
(j) our Company has no outstanding convertible debt securities or debentures;
(k) our Company is a joint stock limited company and is subject to the PRC Company Law;
and
(l) our Company has adopted a code of conduct regarding Directors’ and Supervisors’
securities transactions on terms as required under the Model Code for Securities
Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-13 –


--- page 443 ---
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:
(a) a copy of the material contracts referred to in “Statutory and General Information —
Further Information about our Business — Summary of Material Contracts” in
Appendix V to this Prospectus; and
(b) the written consents referred to in “Statutory and General Information — Other
Information — Consents of Experts” in Appendix V to this Prospectus.
DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be published on the Stock Exchange’s website at
www.hkexnews.hk and the Company’s website at http://www.epiworld.com.cn/ during a
period of 14 days from the date of this Prospectus:
(a) the Articles of Association;
(b) the Accountants’ Report from BDO Limited, the text of which is set out in Appendix
I to this Prospectus;
(c) the audited consolidated financial statements of our Group for the years ended
December 31, 2022, 2023 and 2024 and the nine months ended September 30, 2025;
(d) the report from BDO Limited on the unaudited pro forma financial information of
our Group, the text of which is set out in Appendix II to this Prospectus;
(e) the material contracts referred to in “Appendix V — Statutory and General
Information — Further Information about our Business — Summary of Material
Contracts” in this Prospectus;
(f) the written consents referred to in “Appendix V — Statutory and General
Information — Other Information — Consents of Experts” in this Prospectus;
(g) the service contracts and letters of appointment referred to in “Appendix V —
Statutory and General Information — Further Information about our Directors,
Supervisors, Senior Management and Substantial Shareholders — Particulars of
Directors’ and Supervisors’ Service Contracts” in this Prospectus;
(h) the legal opinions issued by Jingtian & Gongcheng, our PRC Legal Adviser, in
respect of, among other things, the general corporate matters and property interests
of our Group under the PRC law;
(i) the legal memorandum on U.S. outbound investment rule matters issued by Pillsbury
Winthrop Shaw Pittman LLP;
APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY
– VI-1 –


--- page 444 ---
(j) the industry report issued by China Insights Industry Consultancy Limited referred
to in “Industry Overview” in this Prospectus; and
(k) a copy of the following PRC laws, together with unofficial English translations:
(i) the PRC Company Law;
(ii) the PRC Securities Law; and
(iii) the Overseas Listing Trial Measures.
APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY
– VI-2 –


--- page 445 ---
瀚天天成電子科技 （廈門） 股份有限公司瀚天天成電子科技 （廈門） 股份有限公司
Epiworld International Co., Ltd.
Epiworld International Co., Ltd.
