--- page 1 ---
Joint Sponsors, Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Stock Code : 02788
(Incorporated in the Cayman Islands with limited liability)
GLOBAL OFFERING
創新實業集團有限公司
CHUANGXIN INDUSTRIES HOLDINGS LIMITED


--- page 2 ---
If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
Chuangxin Industries Holdings Limited
ʮ̡
(Incorporated in the Cayman Islands with limited liability)
GLOBAL OFFERING
Number of Offer Shares under the
Global Offering
: 500,000,000 Shares (subject to the
Over-allotment Option)
Number of Hong Kong Offer Shares : 50,000,000 Shares (subject to
reallocation)
Number of International Offer Shares : 450,000,000 Shares (subject to
reallocation and the Over-allotment
Option)
Maximum Offer Price : HK$10.99 per Offer Share plus
brokerage of 1.0%, SFC transaction
levy of 0.0027%, AFRC transaction
levy of 0.00015% and the Stock
Exchange trading fee of 0.00565%
(payable in full on application, subject
to refund)
Nominal value : US$0.000005 per Share
Stock code : 02788
Joint Sponsors, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
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 an y loss howsoever
arising from or in reliance upon the whole or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in “Documents Delivered to the Registrar of Companies and Available on Dis play” in
Appendix V to this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up an d
Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission and the Registrar of Companies in Ho ng Kong
take no responsibility as to the contents of this prospectus or any other document referred to above.
The Offer Price is expected to be fixed by agreement between the Overall Coordinators (for themselves and on behalf of the Underwriters) and us on the Pr ice
Determination Date. The Price Determination Date is expected to be on or around Thursday, November 20, 2025 (Hong Kong time) and, in any event, not late r than
12:00 noon on Thursday, November 20, 2025 (Hong Kong time). The Offer Price will be not more than HK$10.99 and is currently expected to be not less than
HK$10.18 per Offer Share. If, for any reason, the Offer Price is not agreed by 12:00 noon on Thursday, November 20, 2025 (Hong Kong time) between the Over all
Coordinators (for themselves and on behalf of the Underwriters) and us, the Global Offering will not proceed and will lapse.
Applicants for Hong Kong Offer Shares are required to pay, on application, the maximum Offer Price of HK$10.99 for each Hong Kong Offer Share together w ith
a brokerage fee of 1.0%, an SFC transaction levy of 0.0027%, an AFRC transaction levy of 0.00015% and the Stock Exchange trading fee of 0.00565%, subjec tt o
refund if the Offer Price as finally determined is less than HK$10.99.
Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, includin g the risk factors
set out in “Risk Factors” in this prospectus. The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to t ermination
by the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) if certain grounds arise prior to 8:00 a.m. on the Listing Date . See
“Underwriting — Underwriting Arrangements and Expenses — Hong Kong Public Offering — Grounds for Termination” of this prospectus.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States and may not be offe red, sold,
pledged or transferred within the United States or to, or for the account or benefit of U.S. persons (as defined in Regulation S) except in transactions exempt from,
or not subject to, the registration requirements under the U.S. Securities Act. The Offer Shares are being offered and sold outside the United States i n offshore
transactions in accordance with Regulation S under the U.S. Securities Act.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this prospectus to the
public in relation to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk and our website at www.innovationigi.com . If you require a printed
copy of this prospectus, you may download and print from the website addresses above.
IMPORTANT
November 14, 2025


--- page 3 ---
IMPORTANT NOTICE TO INVESTORS OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
The Company has adopted a fully electronic application process for the Hong Kong
Public Offering.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “ HKEXnews > New Listings > New Listing Information ”
section, and our website at www.innovationigi.com .
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 through the White Form eIPO service at www.eipo.com.hk ;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC
Nominees to apply on your behalf by instructing your broker or custodian who
is a HKSCC Participant to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer Shares on your
behalf.
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 “How to Apply for Hong Kong Offer Shares” in
this prospectus for further details of the procedures through which you can apply for the
Hong Kong Offer Shares.
IMPORTANT
–i i–


--- page 4 ---
Y our application through the White Form eIPO service or the HKSCC EIPO channel
must be for a minimum of 500 Hong Kong Offer Shares and in one of the numbers set out in
the table.
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 Shares you have selected.
Y ou must pay the respective amount payable on application in full upon application for Hong
Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, your broker or custodian may
require you to pre-fund your application in such amount as determined by the broker or
custodian , based on the applicable laws and regulations in Hong Kong. Y ou are responsible for
complying with any such pre-funding requirement imposed by your broker or custodian with
respect to the Hong Kong Offer Shares you applied for.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
500 5,550.42 8,000 88,806.67 70,000 777,058.39 1,000,000 11,100,834.16
1,000 11,100.84 9,000 99,907.51 80,000 888,066.73 2,000,000 22,201,668.30
1,500 16,651.25 10,000 111,008.34 90,000 999,075.07 3,000,000 33,302,502.46
2,000 22,201.66 15,000 166,512.51 100,000 1,110,083.41 4,000,000 44,403,336.60
2,500 27,752.08 20,000 222,016.68 200,000 2,220,166.84 5,000,000 55,504,170.76
3,000 33,302.50 25,000 277,520.85 300,000 3,330,250.25 6,000,000 66,605,004.90
3,500 38,852.92 30,000 333,025.02 400,000 4,440,333.65 7,000,000 77,705,839.06
4,000 44,403.34 35,000 388,529.20 500,000 5,550,417.08 8,000,000 88,806,673.20
4,500 49,953.75 40,000 444,033.37 600,000 6,660,500.49 9,000,000 99,907,507.36
5,000 55,504.16 45,000 499,537.53 700,000 7,770,583.90 10,000,000 111,008,341.50
6,000 66,605.01 50,000 555,041.71 800,000 8,880,667.32 20,000,000 222,016,683.00
7,000 77,705.85 60,000 666,050.05 900,000 9,990,750.74 25,000,000
(1) 277,520,853.76
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as
defined in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy are paid to the Stock Exchange (in the case of the SFC transaction levy, collected by the Stock
Exchange on behalf of the SFC; and in the case of the AFRC transaction levy, collected by the Stock Exchange
on behalf of the AFRC).
IMPORTANT
– iii –


--- page 5 ---
If there is any change in the following expected timetable, we will issue
an announcement to be published on the websites of the Company at
www.innovationigi.com and the Stock Exchange at www.hkexnews.hk.
Date (1)
Hong Kong Public Offering commences ........................ .9:00 a.m. on Friday,
November 14, 2025
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,
November 19, 2025
Application lists open (3) ................................. 1 1:45 a.m. on Wednesday,
November 19, 2025
Latest time for (a) completing payment for
White Form eIPO applications by effecting
internet banking transfer(s) or PPS payment
transfer(s) and (b) giving electronic application
instructions to HKSCC
(4) ............................ .12:00 noon on Wednesday,
November 19, 2025
If you are instructing your broker or custodian who is a HKSCC Participant to submit
electronic application instruction on your behalf through HKSCC’s FINI system in
accordance with your instruction to apply for the Hong Kong Offer Shares, you are advised to
contact your broker or custodian for the earliest and latest time for giving such instructions,
as this may vary by broker or custodian.
Application lists close
(3) ............................... .12:00 noon on Wednesday,
November 19, 2025
Expected Price Determination Date (5) .....................o no r before 12:00 noon on
Thursday, November 20, 2025
(1) Announcement of the Offer Price, the level of
indication 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 under the Hong Kong Public Offering to be
published of the website of Stock Exchange
at www.hkexnews.hk and the Company’s website
at www.innovationigi.com (6) on or before .................. 1 1:00 p.m. on Friday,
November 21, 2025
EXPECTED TIMETABLE
–i v–


--- page 6 ---
(2) Results of allocations in the Hong Kong
Public Offering (with successful applicants’
identification document or business registration
numbers, where appropriate) to be available
through a variety of channels, including:
 in the announcement to be published on
the website of the Stock Exchange
at www.hkexnews.hk and on the Company’s
website at www.innovationigi.com , at or before ......... 1 1:00 p.m. on Friday,
November 21, 2025
 from the designated results of allocations
website at www.iporesults.com.hk
(alternatively: www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function from .................. 1 1:00 p.m. on Friday,
November 21, 2025 to
12:00 midnight on Thursday,
November 27, 2025
 from the allocation results telephone
enquiry line by calling +852 2862 8555
between 9:00 a.m. and 6:00 p.m. on ............ Monday, November 24, 2025,
Tuesday, November 25, 2025,
Wednesday, November 26, 2025 and
Thursday, November 27, 2025
Share certificates in respect of wholly or partially
successful applications to be dispatched or
deposited into CCASS on or before
(7) ................... Friday, November 21, 2025
White Form e-Refund payment instructions/
refund checks in respect of (i) wholly or partially
successful applications if the final Offer Price
is less than the price payable on application
(if applicable) and (ii) wholly or partially unsuccessful
applications under the Hong Kong Public Offering
to be dispatched on or before
(8)(9) .................... Monday, November 24, 2025
Dealings in the Shares on the Stock Exchange
expected to commence at 9:00 a.m. on ................. Monday, November 24, 2025
EXPECTED TIMETABLE
–v–


--- page 7 ---
Notes:
(1) All times refer to Hong Kong local time, except as otherwise stated.
(2) Y ou will not be permitted to submit your application through the designated website at www.eipo.com.hk after
11:30 a.m. on the last day for submitting applications. If you have already submitted your application and
obtained an application reference number from the designated website at or before 11:30 a.m., you will be
permitted to continue the application process (by completing payment of application monies) until 12:00 noon
on the last day for submitting applications, when the application lists close.
(3) If there is/are a tropical cyclone warning signal number 8 or above, a “black” rainstorm warning and/or
Extreme Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Wednesday,
November 19, 2025 the application lists will not open and close on that day. Please see “How to Apply for
Hong Kong Offer Shares — E. Severe Weather Arrangements.”
(4) Applicants who apply for Hong Kong Offer Shares by instructing your broker or custodian who is a HKSCC
Participant to submit electronic application instruction on your behalf through HKSCC’s FINI system should
see “How to Apply for Hong Kong Offer Shares — A. Application for Hong Kong Offer Shares — 2.
Application Channels.”
(5) The Price Determination Date is expected to be on or before Thursday, November 20, 2025 and, in any event,
not later than 12:00 noon on Thursday, November 20, 2025. If, for any reason, the Offer Price is not agreed
between the Overall Coordinators (for themselves and on behalf of the Underwriters) and us by 12:00 noon
on Thursday, November 20, 2025, the Global Offering will not proceed and will lapse.
(6) None of the website set out in this section or any of the information contained on the website forms part of
this prospectus.
(7) The 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 Shares on the basis of publicly available allocation details or prior to the
receipt of Share certificates or the Share certificates becoming valid do so entirely at their own risk.
(8) White Form e-Refund payment instructions/refund checks will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering and also in respect of wholly or partially
successful applications in the event that the final Offer Price is less than the price payable per Offer Share on
application. Part of the applicant’s identification document number, or, if the application is made by joint
applicants, part of the identification document 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 identification document number before
encashment of the refund check. Inaccurate completion of an applicant’s identification document number may
invalidate or delay encashment of the refund check.
(9) 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 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 in favor
of the applicant (or, in the case of joint applications, the first-named applicant) by ordinary post at their own
risk.
Any uncollected Share certificates and/or refund checks will be dispatched by ordinary post, at the applicants’
risk, to the addresses specified in the relevant applications.
Further information is set out in “How to Apply for Hong Kong Offer Shares — D. Dispatch/Collection of
Share Certificates and Refund of Application Monies.”
EXPECTED TIMETABLE
–v i–


--- page 8 ---
The above expected timetable is a summary only. Y ou should see “Structure of the
Global Offering” and “How to Apply for Hong Kong Offer Shares” for details of the
structure of the Global Offering, including the conditions of the Global Offering and the
procedures for application for the Hong Kong Offer Shares.
If the Global Offering does not become unconditional or is terminated in accordance
with its terms, the Global Offering will not proceed. In such a case, the Company will
make an announcement as soon as practicable thereafter.
EXPECTED TIMETABLE
– vii –


--- page 9 ---
IMPORTANT NOTICE TO INVESTORS
This prospectus is issued by our Company solely in connection with the Hong Kong
Public Offering 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 purposes of,
and does not constitute, an offer or invitation in any other jurisdiction or in any other
circumstances. No action has been taken to permit a public offering of the Offer Shares
or the distribution of this prospectus in any jurisdiction other than Hong Kong.
You should rely only on the information contained in this prospectus to make your
investment decision. Our Company has not authorized anyone to provide you with
information that is different from what is contained in this prospectus. Any information
or representation not made in this prospectus must not be relied on by you as having been
authorized by our Company, the Joint Sponsors, the Overall Coordinators, the
Underwriters, any of their respective directors, officers, representatives or advisors or
any other person involved in the Global Offering.
Page
EXPECTED TIMETABLE ............................................ i v
CONTENTS ....................................................... viii
SUMMARY ....................................................... 1
DEFINITIONS ..................................................... 3 2
GLOSSARY OF TECHNICAL TERMS ................................. 4 5
FORW ARD-LOOKING STATEMENTS ................................. 5 0
RISK FACTORS ................................................... 5 2
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES .... 8 3
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL
OFFERING ...................................................... 8 9
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING ..... 9 4
CORPORATE INFORMATION ....................................... 1 0 3
CONTENTS
– viii –


--- page 10 ---
INDUSTRY OVERVIEW ............................................. 1 0 5
REGULATORY OVERVIEW ......................................... 1 3 2
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE .......... 1 5 6
BUSINESS ........................................................ 1 7 1
CONNECTED TRANSACTIONS ...................................... 2 8 6
DIRECTORS AND SENIOR MANAGEMENT ............................ 2 9 9
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS .......... 3 1 4
SUBSTANTIAL SHAREHOLDERS ..................................... 3 2 8
SHARE CAPITAL .................................................. 3 2 9
FINANCIAL INFORMATION ......................................... 3 3 3
CORNERSTONE INVESTORS ........................................ 4 1 2
FUTURE PLANS AND USE OF PROCEEDS ............................. 4 2 8
UNDERWRITING .................................................. 4 3 3
STRUCTURE OF THE GLOBAL OFFERING ............................ 4 4 8
HOW TO APPLY FOR HONG KONG OFFER SHARES ................... 4 6 2
APPENDIX I ACCOUNTANTS’ REPORT ............................ I - 1
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION . . II-1
APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY
AND CAYMAN COMPANY LA W ..................... III-1
APPENDIX IV STATUTORY AND GENERAL INFORMATION ........... I V - 1
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY .......... V - 1
CONTENTS
–i x–


--- page 11 ---
This summary aims to give you an overview of the information contained in this
prospectus. As it is a summary, it does not contain all the information that may be
important to you. You should read the whole prospectus before you decide to invest in the
Offer Shares. There are risks associated with any investment. Some of the particular risks
in investing in the Offer Shares are set out in the section headed “Risk Factors” in this
prospectus. You should read that section carefully in full before you decide to invest in
the Offer Shares.
OVERVIEW
Today’s Chuangxin Industries
We focus on alumina refining and aluminum smelting within the upstream of the
aluminum industry chain. The aluminum industry chain mainly consists of upstream aluminum
production and downstream aluminum alloy processing. Upstream aluminum production
primarily comprises three stages: bauxite mining, alumina refining and aluminum smelting.
According to CRU, refining and smelting represent the most value-added segments in the
aluminum industry chain, based on added value per ton of aluminum.
Our business mainly comprises the production and sales of electrolytic aluminum as well
as alumina and other related types of products. In 2022, 2023, 2024 and the five months ended
May 31, 2024 and 2025, the revenue from sales of electrolytic aluminum accounted for 95.5%,
90.5%, 85.0%, 89.7% and 76.6% of our total revenue, respectively, and the revenue from sales
of alumina and other related types of products accounted for 2.0%, 7.1%, 12.2%, 7.6% and
21.1% of our total revenue, respectively.
According to CRU, our aluminum smelter in Huolinguole, Inner Mongolia, was the
fourth-largest production base of electrolytic aluminum in terms of production output in 2024
in North China. We were the twelfth-largest electrolytic aluminum producer in terms of
production output in 2024 in China, according to the same source. Our subsidiary, Inner
Mongolia Chuangyuan, was awarded the accolade of “National Green Factory” by China’s
Ministry of Industry and Information Technology (the “ MIIT ”) in 2024.
Since 2012, we have strategically established our presence and dedicated in business
development in Huolinguole, Inner Mongolia and Binzhou, Shandong Province, which are
geographically advantageous in terms of the availability of scarce resources. We benefit from
the low electricity prices enabled by our electricity generation capability and Inner Mongolia’s
abundant power resources. We also benefit from the geographical proximity of our aluminum
smelter to the downstream aluminum consumption base in North and East China and of our
alumina refinery to the import ports and transshipment ports for bauxite. As of December 31,
2024, we had achieved a high rate of self-sufficiency in alumina and electricity supply, which
is strategically and economically critical for the production of electrolytic aluminum and for
maintaining strong results of operations in comparison with some of our peers. In 2022, 2023,
SUMMARY
–1–


--- page 12 ---
2024 and the five months ended May 31, 2024 and 2025, we had an alumina self-sufficiency
rate of approximately 47%, 90%, 84%, 98% and 70%, respectively, and an electricity
self-sufficiency rate of approximately 81%, 81%, 88%, 84% and 87%, respectively. We have
built a self-sufficient, complementary, synergistic and integrated ecosystem across the
electrolytic aluminum industry chain that covers “energy — alumina refining — aluminum
smelting.”
Integrated Ecosystem across the Electrolytic
Aluminum Industry Chain
Alumina
Stable supply of core
materials
Quality customers including global leading
aluminum alloy processors worldwide
Self-sufficient
electricity supply
Electrolytic
aluminum
(liquid aluminum
and aluminum
ingots)
Energy
Construction
Our downstream
Lightweight
automotive
Green energy Transportation Industrial materials3C electronics
Activities undertaken by us
We prioritize sustainable development, with a long-term goal of achieving a green
transition in our operations. We are continuously developing an integrated ecosystem across
the electrolytic aluminum industry chain. We are dedicated to consolidating our cost
advantages and investing in research and development to continuously enhance our
competitiveness and market recognition. To realize our long-term goal of achieving a green
transition, we strive to reduce carbon emissions in the electrolytic aluminum industry chain.
Our Key Milestones
We started our business with the construction planning of our aluminum smelter in
Huolinguole, Inner Mongolia in 2012. We have been focusing on completing our capabilities
across the electrolytic aluminum industry chain and are now an aluminum industry group
covering energy to alumina refining and aluminum smelting.
In December 2017, Phase I of the aluminum smelting project, with a designed production
capacity of 400.0 kt, commenced operations. This marks the beginning of our aluminum
smelting. In December 2018, we constructed a coal-fired thermal power plant with six sets of
electricity generators, each with an installed capacity of 330.0 MW, around our aluminum
smelter. Since then, this power plant has consistently supplied stable electricity for our
electrolytic aluminum production. In February 2019, our alumina refining project commenced
operations at our alumina refinery in Binzhou, Shandong Province, with a designed production
SUMMARY
–2–


--- page 13 ---
capacity of 800.0 kt. This marks the beginning of our efforts to achieve high alumina
self-sufficiency. In October 2020, Phase II of the aluminum smelting project, with a designed
production capacity of 400.0 kt, commenced operations at our aluminum smelter. This further
expands our aluminum smelting capacity. In November 2022, our project of aluminum-based
new material commenced operations at our alumina refinery, containing a production capacity
of 400.0 kt of alumina. This further expands our alumina refining capacity. In July 2023, to
increase our green energy proportion, we started the construction of a green energy power
generation project in Inner Mongolia, constructing a wind power plant with an installed
capacity of 400.0 MW and a solar power plant with an installed capacity of 110.0 MW. The
wind power plant, as of the Latest Practicable Date, had been operational and connected to the
grid. For the solar power plant, as of the same date, the majority of the capacity had been
installed and some had been operational and connected to the grid. We expect the remaining
installed capacity to be operational and connected to the grid by the end of December 2026.
OUR RELATIONSHIP WITH INNOV ATION NEW MATERIAL
Innovation New Material, a company controlled by Mr. Cui, therefore our connected
person, is listed on the Shanghai Stock Exchange (stock code: 600361.SH) and was our largest
customer in 2023, 2024 and the five months ended May 31, 2025. We have mainly been
engaged in the upstream production of electrolytic aluminum in liquid form and aluminum
ingots, and Innovation New Material focuses on the downstream processing of aluminum alloy.
In early 2023, Innovation New Material launched new manufacturing sites near the industry
park of our Company in Inner Mongolia, with an annual production capacity of 1.22 mt, and
we have been providing electrolytic aluminum in liquid form to Innovation New Material since
then. Short-distance transportation of liquid aluminum benefits both us, as an upstream
electrolytic aluminum manufacturer, and Innovation New Material, as a downstream aluminum
alloy processor. This is extremely cost-efficient and therefore it is in the best interests of our
Company, and our shareholders as a whole, to sell the electrolytic aluminum in liquid form to
Innovation New Material. See “Connected Transactions — Non-exempt Continuing Connected
Transactions — Provision of Products and Services Framework Agreement — Reasons for the
Transactions” for details.
Revenue from Innovation New Material in 2022, 2023, 2024 and the five months ended
May 31, 2025 amounted to RMB0.2 million, RMB10,891.8 million, RMB11,608.9 million and
RMB4,315.9 million, respectively, and accounted for 0.0%, 78.8%, 76.6% and 59.8% of our
total revenue for the same respective periods. Our sales of liquid aluminum to Innovation New
Material and its subsidiaries are conducted in the ordinary and usual course of our business,
and our Directors confirm that the terms of such transactions are determined on arm’s-length
terms and are no less favorable to us than terms offered by Independent Third Parties. Our
Directors believe that the sales of the majority of our liquid aluminum to Innovation New
Material and its subsidiaries do not indicate any undue reliance by us on our Controlling
Shareholders and their close associates, and that such sales are beneficial to our Company and
our Shareholders. Despite Innovation New Material being our largest customer in 2023, 2024
and the five months ended May 31, 2025, we have independent access to customers. We sell
to both our connected person, Innovation New Material, and independent third-party
customers, primarily including trading companies and production companies.
SUMMARY
–3–


--- page 14 ---
Our Company co-invested with our Controlling Shareholders’ close associates, namely
Innovation Group and Innovation New Material, in the Saudi Project. Our Directors believe
that the co-investment into the Saudi Project is beneficial to the Company and our Shareholders
as a whole and does not indicate any undue reliance on, or direct competition with, our
Controlling Shareholders’ close associates. See “Relationship with our Controlling
Shareholders — Independence from our Controlling Shareholders — Operational
Independence — Co-investment into the Saudi Project with Innovation Group and Innovation
New Material” for details.
OUR STRENGTHS
We believe that the following strengths contribute to our success:
 Strategic focus on geographical areas with advantages in scarce resources, building
a sustainable competitive edge in resources.
 Distinct advantages in preparing for the transition to green power aluminum.
 A self-sufficient, complementary, synergistic and integrated ecosystem across the
electrolytic aluminum industry chain, ensuring strong risk resilience and steadiness
of raw material supplies.
 Industry-leading cost advantages leading to swiftly unleashed profitability.
 Active implementation of globalization strategies.
 Our chairman’s vision and the management team’s outstanding operational expertise
guide us toward sustainable and steady growth.
See “Business — Our Strengths.”
OUR STRATEGIES
We intend to pursue the following strategies to further grow our business:
 Fully explore wind and solar energy to establish a stable green power aluminum
business.
 Proactively expand into overseas markets and increase overseas production
capacities as a response to the belt and road Initiative (the “BRI”).
 Optimize the energy structure and raw material supply and improve the production
techniques to strengthen our costs advantages.
SUMMARY
–4–


--- page 15 ---
 Complete our capabilities across the aluminum industry chain to resist risks and
maintain steadiness of raw material supplies during cyclical fluctuations.
 Improve environmental and social responsibility performance to maintain
sustainability.
See “Business — Our Strategies.”
OUR PRODUCTS
We provide electrolytic aluminum products as well as alumina and other related types of
products. Our electrolytic aluminum products primarily include liquid aluminum and
aluminum ingots. Aluminum is a silvery-white, ductile and corrosion-resistant metal with a
wide range of applications across various industries, such as 3C electronics, lightweight
automotive, green energy, transportation, industrial materials and construction. According to
CRU, China has the largest electrolytic aluminum market globally, with an industry size of
approximately RMB897 billion in 2024, representing approximately 71% of global industry
size. Our liquid aluminum and aluminum ingots meet the National Standard GB/T 1196-2023
promulgated by the PRC government.
We also provide alumina, a white crystalline substance that serves as a key raw material
in the production of electrolytic aluminum. According to CRU, approximately 94% of alumina
is consumed in aluminum smelting. Our alumina refining achieved an alumina output of
approximately 706.2 kt, 1,546.1 kt, 1,539.9 kt, 665.3 kt and 664.5 kt in 2022, 2023, 2024 and
the five months ended May 31, 2024 and 2025, respectively, with a rate of alumina
self-sufficiency reaching approximately 84% in 2024. Our alumina meets the national
standards promulgated by the PRC government, namely, GB/T 24487-2009 and GB/T
24487-2022. We produce alumina in-house. After meeting the internal demand for alumina in
our aluminum smelting process, we sell alumina externally as one of our major products. In
line with market practice, we also procure high-lithium salt alumina externally for our
aluminum smelting to optimize electrolyte composition, which improves electrolysis efficiency
and extends the lifespan of our electrolyzers. Compared to such high-lithium salt alumina, the
alumina we produce contains relatively low levels of lithium salt, which is comparable with
most alumina commodity in the market, according to CRU.
SUMMARY
–5–


--- page 16 ---
The following table sets forth our revenue breakdown by product for the periods
indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Electrolytic aluminum /H1118/H1118/H111812,881.9 95.5 12,502.3 90.5 12,883.7 85.0 5,276.0 89.7 5,523.2 76.6
– Liquid aluminum /H1118/H1118/H1118/H1118363.2 2.7 10,841.4 78.5 11,579.7 76.4 5,276.0 89.7 4,305.5 59.7
– Aluminum ingots /H1118/H1118/H1118/H111812,518.7 92.8 1,660.9 12.0 1,304.0 8.6 – – 1,217.7 16.9
Alumina and other related
types of products /H1118/H1118/H1118/H1118270.6 2.0 977.4 7.1 1,849.5 12.2 449.5 7.6 1,523.7 21.1
– Alumina /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868.1 0.5 626.6 4.6 1,647.8 10.9 408.4 6.9 1,338.6 18.6
– Other related types of
products (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118202.5 1.5 350.8 2.5 201.7 1.3 41.1 0.7 185.1 2.6
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118337.2 2.5 335.0 2.4 430.0 2.8 157.7 2.7 166.6 2.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,489.7 100.0 13,814.7 100.0 15,163.2 100.0 5,883.2 100.0 7,213.5 100.0
Notes:
(1) Mainly include aluminum hydroxide.
(2) Mainly include scrap and other materials, electricity and steam supply.
The revenue contribution from alumina increased from 0.5% of our total revenue in 2022
to 10.9% of our total revenue in 2024, and increased from 6.9% of our total revenue in the five
months ended May 31, 2024 to 18.6% of our total revenue in the same period of 2025, as we
attached a high importance to a self-sufficient, complementary, synergistic and integrated
ecosystem across the electrolytic aluminum industry chain and strategically increased our
production capacity of alumina products. The revenue contribution from alumina was also
affected by the fluctuations in the average market prices of alumina during the Track Record
Period. During the Track Record Period, the CRU China alumina price was RMB2,936 per ton,
RMB2,906 per ton, RMB4,030 per ton, RMB3,393 per ton and RMB3,517 per ton in 2022,
2023, 2024 and the five months ended May 31, 2024 and 2025, respectively. See “Industry
Overview — Alumina Analysis (Global and China) — Alumina Price Analysis.”
SUMMARY
–6–


--- page 17 ---
Our revenue from aluminum ingots increased significantly, from nil in the five months
ended May 31, 2024 to RMB1,217.7 million in the same period of 2025, primarily due to (i)
an increase in sales of our aluminum ingots to independent third parties. Such customers were
primarily existing customers; and (ii) a decrease in our sales of liquid aluminum to related
parties to reduce the proportion of connected transactions. Our revenue from alumina increased
significantly, from RMB408.4 million in the five months ended May 31, 2024 to RMB1,338.6
million in the same period of 2025, primarily due to our increase in sales of alumina to
independent third parties as we increased our procurement of high-lithium salt alumina
externally for our aluminum smelting to optimize electrolyte composition, which improves
electrolysis efficiency and extends the lifespan of our electrolyzers.
We generate electricity at our power plants for electrolytic aluminum production. We sell
surplus self-generated electricity after meeting the internal demand for electricity, while also
procuring electricity, primarily green electricity, from the grid, to ensure a stable and reliable
power supply that mitigates the potential fluctuations in our self-generated electricity while
increasing our green power usage. In addition, the electricity generated by our Binzhou thermal
power plant is not recorded as electricity generated by our proprietary power plant but as
electricity procured from suppliers. This is mainly because our Binzhou thermal power plant
is connected to the grid and, in accordance with applicable PRC laws and regulations, our
power plant connected to the grid is required to first sell the generated electricity to the grid
before we can subsequently source electricity from the grid for our production needs. See
“Business — Electricity Supply — Our Thermal Power Supply.” The prices at which we sell
our surplus self-generated electricity are primarily benchmarked to the local market prices,
which can be adjusted by the local government authorities.
Steam is produced as a by-product at our power plants during electricity generation and
we also use steam in our production. We sell surplus self-generated steam after meeting the
internal demand for steam, while also procuring a small amount of steam from third parties
during the examination periods of our power plants when steam generation is halted to ensure
continuous production. We determine the pricing at which we sell our surplus self-generated
steam primarily by taking into consideration the cost of sales.
We have obtained the necessary license for selling electricity. See “Business — Licenses,
Permits and Approvals.” As advised by our PRC Legal Advisor, no license or permit is required
for our sales of steam.
OUR PRODUCTION
Our advanced production capabilities, substantial output and sustainable production
practices position us to effectively meet the large-scale demand for our products from
downstream customers. According to CRU, our aluminum smelter in Huolinguole, Inner
Mongolia, was the fourth-largest production base of electrolytic aluminum in terms of
production output in 2024 in North China. We were the twelfth-largest electrolytic aluminum
producer in terms of production output in 2024 in China, according to the same source.
SUMMARY
–7–


--- page 18 ---
Our Production Capabilities
Our aluminum smelter is located in Huolinguole, Inner Mongolia, and our alumina
refinery is located in Binzhou, Shandong Province. According to CRU, the industry average
electrolytic aluminum production per capita in China was between approximately 260 tons and
280 tons. During the Track Record Period, our electrolytic aluminum production per capita was
between approximately 590 tons and 670 tons.
As of the Latest Practicable Date, we had obtained regulatory approvals for (i) production
quota of 788.1 kt per year of electrolytic aluminum, for which the associated production line
had been built and was in use, (ii) production capacity of 1,200 kt per year of alumina, for
which the associated production line had been built and was in use, (iii) production capacity
of 2,980 kt per year of aluminum hydroxide, for which the associated production lines for
1,480 kt had been built and were in use and the other 1,500 kt had commenced pilot production
in December 2024, which had increased to full operation in April 2025, (iv) production
capacity of 2,000 kt per year of alumina calcined from aluminum hydroxide, for which the
associated production line had been constructed as of the date of this prospectus and will begin
pilot production in November 2025, and (v) production capacity of 4,000 kt per year of alumina
calcined from aluminum hydroxide, for which we had no plan to construct the associated
production line as of the same date. Aluminum hydroxide is often produced as an intermediate
in the Bayer process and can be calcined to produce alumina. During the Track Record Period,
our aluminum hydroxide produced was primarily calcined to produce alumina in-house and
was also separately sold to external customers. Our projected total annual production capacity
of alumina, assuming (a) all of the above capacities from (ii) to (iv) are fully operational, and
(b) we calcine aluminum hydroxide to produce alumina as planned, will be at least 3,000 kt.
SUMMARY
–8–


--- page 19 ---
The following table sets forth the details of our production capacity and the relevant metrics of our major products for the periods indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Designed
production
capacity (1)
Actual
production
volume
Capacity
utilization
rate (2)
Regulatory
approvals
for annual
production
quota and
capacity (3)
Designed
production
capacity (1)
Actual
production
volume
Capacity
utilization
rate (2)
Regulatory
approvals
for annual
production
quota and
capacity (3)
Designed
production
capacity (1)
Actual
production
volume
Capacity
utilization
rate (2)
Regulatory
approvals
for annual
production
quota and
capacity (3)
Designed
production
capacity (1)
Actual
production
volume
Capacity
utilization
rate (2)
Regulatory
approvals
for annual
production
quota and
capacity (3)
Designed
production
capacity (1)
Actual
production
volume
Capacity
utilization
rate (2)
Regulatory
approvals
for annual
production
quota and
capacity (3)
(kt) (kt) (%) (kt) (kt) (kt) (%) (kt) (kt) (kt) (%) (kt) (kt) (kt) (%) (kt) (kt) (kt) (%) (kt)
Aluminum smelting /H1118/H1118/H1118/H1118 788.1 744.1 94.4 788.1 788.1 757.9 96.2 788.1 788.1 755.4 95.6 788.1 326.0 315.6 96.8 788.1 326.0 310.7 95.3 788.1
Alumina refining /H1118/H1118/H1118/H1118/H1118800.0 706.2 88.3 800.0 1,200.0 1,546.1 128.8 1,200.0 1,200.0 1,539.9 128.3 7,200.0 518.7 665.3 128.3 1,200.0 515.3 664.5 129.0 7,200.0
Notes:
(1) The designed capacity for the aluminum smelter is the pre-designed production output that may be achieved under normal production conditions and product specifications
specified in the design documents and technical documents. It is calculated based on the assumption that each factory’s main product is produced 24 ho urs a day, 365
days a year and for 151 days for the five months ended May 31, 2024 and 2025. For the alumina refinery, this is calculated based on the assumption that each factory’s
main product is produced 24 hours a day, 347 days a year and for 149 days for the five months ended May 31, 2024 and 2025, deducting the days for the annual
examination of alumina refining equipment, during which production temporarily halts. The annualized designed production volume in the five month s ended May 31,
2025 (namely, the annual designed production capacity in 2025) remained at 788.1 kt and 1,200 kt for aluminum smelting and alumina refining, respecti vely.
(2) The capacity utilization rate is calculated by dividing the actual production volume for the period indicated by the annualized designed product ion capacity for the period
indicated.
(3) Regulatory approval for annual electrolytic aluminum production quota refers to the approved annual cap in production volume for electrolytic a luminum, including liquid
aluminum and aluminum ingots. Regulatory approval for annual alumina production capacity refers to the approved annual cap in production volume for alumina.
SUMMARY
–9–


--- page 20 ---
The designed capacity for both electrolytic aluminum and alumina is identical with the
regulatory approval for annual production quota and capacity in each period, except for those
for alumina in 2024 and the five months ended May 31, 2024 and 2025, because (i) the initial
design of the production sites and production lines factored in policy requirements; and (ii) for
any surplus approved production quota that exceeds our designed production quota, we actively
engaged in the trading thereof for additional capital. See “Financial Information — Period-
to-period Comparison of Results of Operations — Y ear ended December 31, 2023 Compared
with Y ear ended December 31, 2022 — Other Gains.”
The designed capacity for the aluminum smelter is the pre-designed production output
that may be achieved under normal production conditions and product specifications contained
in the design documents and technical documents. The actual production volume of alumina in
2023 and 2024 exceeded the designed production capacity in the respective periods, primarily
because our alumina refining efficiency improved as we renovated and upgraded the
production equipment and improved our operational efficiency through more refined
management. Specifically, we improved certain operational procedures, equipment and
workflow within the production process, thereby optimizing the processes of material
handling, impurity removal and electrolysis, among other things. We did not obtain regulatory
approval for additional production capacity before exceeding the relevant capacity in 2023.
According to PRC laws and regulations, an increase in production capacity of 30.0% or more
is considered a significant change in the constructed project, which necessitates the submission
of a change application to the original regulatory authorities to obtain re-approval. Companies
who commence construction without re-approval may face penalties such as being ordered to
suspend production and fines. As advised by our PRC Legal Advisor, according to PRC laws
and regulations as well as the written confirmations from the relevant competent regulatory
authorities we obtained during the period from October 2024 to January 2025, including Wudi
Development and Reform Commission (҅), Wudi Sub-branch of Binzhou
Municipal Ecological and Environment Bureau ( Ᏽψ̹͛࿒ᐑྤ҅ೌ಑ʱ҅) and Wudi
Emergency Management Bureau (၍ଣ҅), our increase in actual production
capacity in 2023 and 2024 did not exceed 30.0% in the respective periods, which does not
constitute a significant change; furthermore, since it does not constitute non-compliance, no
relevant administrative penalties can be imposed on our Group.
To more effectively control and manage our production capacity utilization, we
continuously monitor our capacity utilization rate and timely obtain regulatory approval for
additional production capacity in anticipation of potential increases in the demand for our
alumina products. In 2024, we secured the regulatory approval for a total of 6,000 kt per year
production capacity of alumina calcined from aluminum hydroxide, among which (i) we started
the construction of the relevant production line with 2,000 kt of designed production capacity
in February 2025 and were in the process of construction as of the Latest Practicable Date, and
(ii) we had no plan for the construction of the remaining 4,000 kt approved production capacity
as of the same date. This 6,000 kt regulatory approval serves to expand our current production
capabilities and control the utilization rate, and also serves as a strategic reserve for our future
alumina production. This strategic reserve is expected to provide us with a competitive edge
by allowing for increased output in response to market demand spikes, without any delay
caused by waiting for new approvals. Furthermore, it supports our long-term planning and
SUMMARY
–1 0–


--- page 21 ---
stability, giving us the flexibility to expand production in a compliant manner. We expect to
complete the construction of the relevant production line with 2,000 kt of designed production
capacity in the fourth quarter of 2025. We expect to commence the pilot production at this
production line by the end of 2025. In view of our expected increase in alumina production
capacity, we plan to further expand the sales of alumina to downstream customers centered
around our alumina refinery in Binzhou, Shandong Province, rather than purchasing additional
electrolytic aluminum quota and consuming the increased alumina output at our aluminum
smelter.
As confirmed by our PRC Legal Advisor, the approval procedures of production capacity
for alumina and alumina calcined aluminum hydroxide are essentially the same. In terms of the
production process, the former allows for the holder of such approval to produce alumina
through the Bayer process all the way from bauxite, while the latter allows for producing
alumina from aluminum hydroxide, an intermediate in the Bayer process. See “Business — Our
Production — Our Production Process — Alumina Products” for details.
ELECTRICITY SUPPLY
The aluminum smelting process requires a continuous and stable electricity supply.
Electricity costs represent a major portion of production costs for all electrolytic aluminum
companies. According to CRU, in 2024, electricity costs accounted for approximately 36% of
the total production costs for aluminum smelting companies in China. Leveraging the abundant
natural resources in Huolinguole, Inner Mongolia, we have established power plants and
electricity generation facilities that utilize thermal power and are in the process of building
power plants and electricity generation facilities that utilize green electricity sources to provide
a stable electricity supply at low cost. Our rate of electricity self-sufficiency was
approximately 88% in 2024, significantly higher than the industry average of approximately
57% in the same period, according to CRU. Our rate of electricity self-sufficiency
was approximately 87% in the five months ended May 31, 2025. We also procure electricity,
including green electricity, from the grid to ensure a stable and reliable power supply that
mitigates the potential fluctuations in our self-generated electricity while increasing our green
power usage.
OUR CUSTOMERS AND SUPPLIERS
During the Track Record Period, our customers mainly consisted of nonferrous metal
processing and manufacturing enterprises and traders. Revenue from our five largest customers
in each year/period during the Track Record Period amounted to RMB5,507.5 million,
RMB12,018.8 million, RMB13,132.6 million and RMB5,751.4 million, respectively, and
accounted for 40.8%, 87.0%, 86.6% and 79.7% of our total revenue for the same respective
periods. Revenue from our largest customer in each year/period during the Track Record Period
amounted to RMB1,598.1 million, RMB10,891.8 million, RMB11,608.9 million and
RMB4,315.9 million, respectively, and accounted for 11.8%, 78.8%, 76.6% and 59.8% of our
total revenue for the same respective periods. See “Relationship with Our Controlling
Shareholders — Independence from Our Controlling Shareholders — Operational
Independence — Sales of Electrolytic Aluminum in Liquid Form to Innovation New Material.”
SUMMARY
–1 1–


--- page 22 ---
During the Track Record Period, our suppliers mainly consisted of suppliers of raw
materials such as bauxite, carbon anodes, coals, alumina and electricity. Purchases from our
five largest suppliers in each year/period during the Track Record Period amounted to
RMB4,349.1 million, RMB3,459.7 million, RMB3,928.4 million and RMB2,503.0 million,
respectively, and accounted for 42.2%, 36.0%, 39.9% and 41.8% of our total purchases for the
same respective periods. Purchases from our largest supplier in each year/period during the
Track Record Period amounted to RMB1,259.7 million, RMB914.0 million, RMB1,069.1
million and RMB984.6 million, respectively, and accounted for 12.2%, 9.5%, 10.9% and
16.4% of our total purchases for the same respective periods.
COMPETITION
We primarily compete with a number of domestic and overseas companies focused on the
aluminum smelting, alumina refining and the sale of electrolytic aluminum and alumina and
other related types of products. According to CRU, the global consumption of electrolytic
aluminum is expected to grow at a CAGR of 1.6% from 2025 to 2028. China’s annual demand
gap for electrolytic aluminum is expected to exceed one mt and last until 2034, primarily due
to an annual electrolytic aluminum production capacity cap of approximately 45 mt imposed
by the MIIT.
Market participants compete based on their operational capabilities, production
infrastructure improvement and access to electricity as well as raw materials. According to
CRU, our aluminum smelter in Huolinguole, Inner Mongolia, was the fourth-largest production
base of electrolytic aluminum in terms of production output in 2024 in North China. We were
the twelfth-largest electrolytic aluminum producer in terms of production output in 2024 in
China, according to the same source. According to CRU, our ability to manage cash costs of
aluminum per ton was among the top 5% of all aluminum smelting companies in China and
competitive on a global scale, ranking among the top 30% in 2024 (comparing our cash
costs to the industry average cash costs in China and on a global scale in 2024). Leveraging
our experience in the electrolytic alumina industry, our preparation for the transition to green
aluminum and our relatively lower cost of electricity compared to the national average, we
believe we are able to continue to seize the potential in the target market through our access
to electricity and raw materials, quality green power aluminum and globalization strategies.
SUMMARY
–1 2–


--- page 23 ---
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
Summary of Consolidated Statements of Results of Operations
The following table sets forth a summary of our results of operations in absolute amounts
and as a percentage of revenue for the periods indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,489.7 100.0 13,814.7 100.0 15,163.2 100.0 5,883.2 100.0 7,213.5 100.0
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,448.6) (84.9) (11,478.4) (83.1) (10,886.7) (71.8) (4,242.9) (72.1) (5,780.9) (80.1)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,041.1 15.1 2,336.3 16.9 4,276.5 28.2 1,640.3 27.9 1,432.7 19.9
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893.5 0.7 97.9 0.7 55.2 0.4 19.8 0.3 22.8 0.3
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(7.5) (0.1) (20.9) (0.1) (11.2) (0.1) (2.5) 0.0 (6.9) (0.1)
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118– – – – (16.4) (0.1) – – (4.7) (0.1)
Other gains and losses /H1118/H1118/H1118206.0 (1) 1.5 5.2 0.0 18.5 0.1 10.8 0.2 6.9 0.1
Selling and marketing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2.8) (0.0) (0.3) (0.0) (0.6) (0.0) (0.1) 0.0 (0.9) 0.0
Administrative expenses /H1118/H1118(218.6) (1.5) (206.0) (1.5) (279.0) (1.9) 101.2 (1.7) (145.6) (2.0)
Impairment (losses) gains
under expected credit loss
model, net of reversal /H1118/H1118 (2.1) (0.0) (0.0) (0.0) 0.4 0.0 0.4 0.0 0.8 0.0
Share of results of joint
ventures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (0.9) (0.0) – – (7.0) (0.1)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,061.9) (7.9) (939.7) (6.8) (761.6) (5.0) (366.5) (6.2) (262.4) (3.6)
Profit before tax /H1118/H1118/H1118/H1118/H1118/H11181,047.7 7.8 1,272.5 9.2 3,280.9 21.6 1,201.1 20.4 1,035.6 14.3
Income tax expenses /H1118/H1118/H1118/H1118(134.8) (1.0) (191.9) (1.4) (651.4) (4.3) (201.6) (3.4) (180.2) (2.5)
Profit and total
comprehensive income
for the year/period /H1118/H1118/H1118912.9 6.8 1,080.6 7.8 2,629.5 17.3 999.4 17.0 855.5 11.9
Profit and total
comprehensive income
for the year/period
attributable to:
Owners of the Company /H1118/H1118881.3 6.5 1,003.5 7.2 2,056.2 13.6 879.9 15.0 756.0 10.5
Non-controlling interests /H1118/H1118 31.6 0.3 77.1 0.6 573.3 3.7 119.5 2.0 99.5 1.4
Note:
(1) In 2022, our other gains and losses primarily consisted of (i) gain on disposal of intangible assets,
mainly representing the gain from the sales of our aluminum production quota; (ii) net gain on disposal
of property, plant and equipment, mainly representing the loss from the disposal of certain production
equipment; and (iii) gain on disposal of derivative financial instruments, mainly the futures products we
held for the purposes of hedging the fluctuations in the market prices of aluminum ingots.
SUMMARY
–1 3–


--- page 24 ---
Non-IFRS Measure
To supplement our consolidated financial statements which are presented in accordance
with IFRS, we also use EBITDA ( Non-IFRS measure ) as an additional financial measure,
which is not required by or presented in accordance with IFRS. We believe that this Non-IFRS
measure facilitate comparisons of operating performance from period to period and company
to company. We believe that this Non-IFRS measure provides useful information to investors
and others in understanding and evaluating our consolidated results of operations in the same
manner as they help our management. However, our presentation of EBITDA ( Non-IFRS
measure ) may not be comparable to similarly titled measures presented by other companies.
The use of such Non-IFRS measure has limitations as an analytical tool, and you should not
consider it in isolation from, or as a substitute for an analysis of, our results of operations or
financial condition as reported under IFRS.
We define EBITDA ( Non-IFRS measure ) as profit and total comprehensive income for the
period adjusted for (i) depreciation of property, plant and equipment, (ii) depreciation of
right-of-use assets, (iii) amortization of intangible assets, (iv) net finance costs, and (v) income
tax expense. The following table reconciles EBITDA ( Non-IFRS measure ) to our profit and
total comprehensive income for the period presented in accordance with IFRS for the periods
indicated:
Y ear ended December 31,
Five months ended
May 31,
2022 2023 2024 2024 2025
(RMB in millions)
(unaudited)
Reconciliation of profit and total
comprehensive income for the
year/period to EBITDA (Non-
IFRS measure)
Profit for the year/period /H1118/H1118/H1118/H1118/H1118/H1118912.9 1,080.6 2,629.5 999.4 855.5
Add:
– Depreciation of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118462.6 546.9 617.1 233.1 323.4
– Depreciation of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118201.8 162.8 71.4 52.5 18.0
– Amortization of intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111875.0 71.3 71.6 29.7 29.8
– Net finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118971.8 890.8 743.1 357.2 260.4
– Income tax expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134.8 191.9 651.4 201.6 180.2
EBITDA (Non-IFRS measure) /H1118/H1118 2,758.9 2,944.3 4,784.1 1,873.5 1,667.4
SUMMARY
–1 4–


--- page 25 ---
Our profit for the period decreased by 14.4%, from RMB999.4 million in the five months
ended May 31, 2024 to RMB855.5 million in the same period of 2025 due to a decrease in gross
profit as a result of the increase in market prices of certain key raw materials. See “Financial
Information — Period-to-period Comparison of Results of Operations — Five Months ended
May 31, 2025 Compared with Five Months ended May 31, 2024.”
Our profit for the period increased significantly from RMB1,080.6 million in 2023 to
RMB2,629.5 million in 2024, mainly attributable to an increase in the gross profit due to (i)
an increase in the ASP of electrolytic aluminum and alumina, driven by an increase in the
average market price; and (ii) a decrease in the price of certain raw materials. See “Financial
Information — Period-to-period Comparison of Results of Operations — Y ear ended December
31, 2024 Compared with Y ear ended December 31, 2023.”
Our profit for the year increased by 18.4% from RMB912.9 million in 2022 to
RMB1,080.6 million in 2023, mainly attributable to an increase in the gross profit due to a
decrease in the market prices of certain key raw materials. See “Financial Information —
Period-to-period Comparison of Results of Operations — Y ear ended December 31, 2023
Compared with Y ear ended December 31, 2022.”
See “Financial Information — Description of Major Components of Our Results of
Operations.”
SUMMARY
–1 5–


--- page 26 ---
The following table sets forth the revenue, sales volume and ASP of our major products for the periods indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1)
(kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton)
Electrolytic aluminum /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118733.1 12,881.9 17,572.3 773.0 12,502.3 16,173.9 752.6 12,883.7 17,119.9 315.4 5,276.0 16,725.6 312.1 5,523.2 17,697.7
– Liquid aluminum /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.0 (4) 363.2 (4) 19,110.5 671.3 10,841.4 16,148.8 679.0 11,579.7 17,053.6 315.4 5,276.0 16,725.6 243.6 (3) 4,305.5 17,675.3
– Aluminum ingots /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118714.1 12,518.7 17,530.1 101.7 1,660.9 16,331.4 73.6 1,304.0 17,717.4 – – – 68.5 1,217.7 17,777.5
Alumina (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118706.3 1,774.9 2,513.0 1,563.7 3,792.9 2,425.6 1,539.6 5,407.8 3,512.5 663.9 1,946.6 2,932.1 660.2 1,939.8 2,938.2
– Sales to independent third parties /H1118/H1118 27.0 68.1 2,522.2 295.4 626.6 2,121.2 444.5 1,647.8 3,707.1 135.9 408.4 3,005.2 460.7 1,338.6 2,905.6
– Intragroup sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118679.3 1,706.8 2,512.7 1,268.3 3,166.3 2,496.5 1,095.1 3,760.0 3,433.6 528.0 1,538.2 2,913.0 199.5 601.2 3,013.2
Notes:
(1) The ASP is calculated by dividing the revenue (excluding value-added tax) by volume in the indicated period.
(2) Including the volume and revenue for intra-Group sales of alumina. In 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, the volume of a lumina we
sold intra-Group amounted to 679.3 kt, 1,268.3 kt, 1,095.1 kt, 528.0 kt and 199.5 kt, respectively, generating revenue of RMB1,706.8 million, RMB3,1 66.3 million,
RMB3,760.0 million, RMB1,538.2 million and RMB601.2 million, respectively.
(3) The volume of our liquid aluminum sold decreased from 315.4 kt in the five months ended May 31, 2024 to 243.6 kt in the same period in 2025, primarily be cause we
proactively increased the production and sales volume of aluminum ingots to independent third parties to further broaden our customer base, therefo re leading to decreased
sales volume of liquid aluminum.
(4) The volume of liquid aluminum in 2022 was low compared to that in the subsequent years/periods, primarily because we sold liquid aluminum in 2022 as an additional
revenue stream and our main business focus was producing and selling aluminum ingots back in 2022. We have been providing a stable supply of liquid alum inum to
Innovation New Material since its commencement of operations in Inner Mongolia in early 2023. See “Relationship With Our Controlling Shareholders — Independence
From Our Controlling Shareholders — Operational Independence.”
SUMMARY
–1 6–


--- page 27 ---
Product Prices during the Track Record Period
We mainly determine the price of our electrolytic aluminum products with reference to
the average price of electrolytic aluminum quoted on the website of Shanghai Metals Market
(᙮ၣ), which, as confirmed by CRU, indicates the market-assessed price of
electrolytic aluminum traded in China typically used by market players. As confirmed by CRU,
benchmarking sales prices of electrolytic aluminum products against the average price of
electrolytic aluminum quoted on the website of Shanghai Metals Market is in line with industry
norm. See “Business — Sales, Marketing and Customer Services — Pricing and Payment” and
“Industry Overview — Electrolytic Aluminum Analysis (Global and China) — Electrolytic
Aluminum Price Analysis.”
During the Track Record Period, the ASP of our products fluctuated in line with the
fluctuations in relevant market prices. Both the global market price of electrolytic aluminum
and the market price of electrolytic aluminum in China decreased in 2023 from 2022, mainly
due to the disruption arising from the Russia-Ukraine war, with Europe experiencing
significant economic headwinds and China experiencing an economic slowdown. The market
prices subsequently increased in 2024 as the global electrolytic aluminum market showed a
deficit of 35 kt, and remained relatively stable in early 2025. Both the global market price of
alumina and the market price of alumina in China remained relatively stable in 2022 and 2023,
and subsequently surged in 2024 due to a global supply deficit mainly attributable to (i) several
alumina production disruption incidents as several refineries in Australia, India and Brazil
faced bauxite and energy supply constraints; (ii) temporary disruption to Guinea bauxite
shipments; and (iii) China’s persistent high demand for alumina. The market prices slightly
decreased in early 2025 due to a shift in market balance from a deficit in 2024 to a surplus in
2025 mainly attributable to (i) the fact that most of the aforementioned disruptions seen in 2024
have been gradually resolved towards the end of 2025 and in early 2025; and (ii) new refinery
capacity is expected to come online in 2025 and 2026. See “Industry Overview — Electrolytic
Aluminum Analysis (Global and China) — Electrolytic Aluminum Price Analysis” and
“Industry Overview — Alumina Analysis (Global and China) — Alumina Price Analysis” for
detailed analyses on the price changes of electrolytic aluminum and alumina. Similar to the
market prices, the ASP of our electrolytic aluminum decreased in 2023 from 2022,
subsequently increased in 2024 and remained relatively stable in early 2025. The ASP of our
alumina remained relatively stable in 2022 and 2023, subsequently surged in 2024 and slightly
decreased in early 2025.
During the Track Record Period, the ASP of our electrolytic aluminum products appeared
to be slightly lower than the SHFE spot price. See “Industry Overview — Electrolytic
Aluminum Analysis (Global and China) — Electrolytic Aluminum Price Analysis” for details.
This discrepancy arises primarily because (i) our ASP excludes the 13% value-added tax, which
is included in the SHFE spot price; and (ii) the SHFE spot price reflects solely aluminum ingot
prices, whereas our ASP represents both aluminum ingots and liquid aluminum sold to
customers. We mainly determine the price of electrolytic aluminum products with reference to
the average price of electrolytic aluminum quoted on the website of Shanghai Metals Market
as discussed above, and make adjustments taking into account the reasonable costs, such as the
SUMMARY
–1 7–


--- page 28 ---
processing and transportation costs. Our liquid aluminum is typically priced lower than our
aluminum ingot products due to the comparatively lower processing and transportation costs
associated with selling liquid aluminum. According to CRU, the price of liquid aluminum is
usually lower than aluminum ingots. This is mainly because liquid aluminum is directly
released from the aluminum smelter without the need for further casting and cooling. In
addition, its transportation range is limited due to the high temperature required during
transportation. In contrast, aluminum ingots undergo processes such as cooling in molds at the
production sites and provide greater market liquidity, justifying a higher price.
The ASP of our liquid aluminum products is higher than that of our aluminum ingot
products in 2022. This is because we only sold a relatively small amount of liquid aluminum
products in 2022, mostly in the first quarter, whereas we sold a relatively large amount of
aluminum ingot products throughout the year. In 2022, the market prices of electrolytic
aluminum generally decreased throughout the year, as confirmed by CRU, resulting in the ASP
of our liquid aluminum products being higher than that of our aluminum ingot products.
Similarly, the ASP of our alumina products sold to independent third parties varied from the
ASP of those sold intragroup in 2022, 2023 and 2024. This variance was primarily because we
only sold a small amount of alumina products to independent third parties at limited times of
2022, 2023 and 2024. The market prices for alumina fluctuated in 2022 and 2023 and surged
in 2024, resulting in the ASP of our alumina products sold to independent third parties differing
from those sold intragroup.
During the Track Record Period, the ASP of our alumina products appeared to be slightly
lower than the average market price of alumina, namely the CRU China alumina price, in
China. See “Industry Overview — Alumina Analysis (Global and China) — Alumina Price
Analysis.” This discrepancy is primarily because (i) our ASP excludes the 13% value-added
tax, which is included in the market average; and (ii) the CRU China alumina price averages
alumina prices in multiple regions, including Henan, Shanxi, Guangxi, Guizhou and Shandong
Provinces. According to CRU, the market prices in each province, including Shandong
Province, where we sold most of our alumina products, differ from the average prices in other
provinces tracked by CRU due to regional differences in production costs, transportation
expenses as well as supply and demand dynamics. Market prices in Shandong Province are
generally slightly lower than those in other provinces monitored by CRU China. This is mainly
because Shandong Province is a key region for alumina production in China, resulting in a
relatively more stable supply, lower transportation expenses due to proximity to alumina
refineries, and lower production costs due to economies of scale.
SUMMARY
–1 8–


--- page 29 ---
Cost of Sales
Our cost of sales was RMB11,448.6 million, RMB11,478.4 million, RMB10,886.7
million, RMB4,242.9 million and RMB5,780.9 million in 2022, 2023, 2024 and the five
months ended May 31, 2024 and 2025, respectively. During the Track Record Period, our cost
of sales primarily comprised (i) the cost of raw materials, mainly representing the procurement
costs for coal, bauxite, carbon anode, alumina and other raw materials; (ii) the cost of
outsourced electricity; (iii) depreciation; and (iv) staff costs.
The following table sets forth a breakdown of our cost of sales by product in absolute
amount and as a percentage of our total cost of sales for the periods indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Electrolytic aluminum /H1118/H111811,144.6 97.3 10,472.6 91.2 9,414.5 86.5 3,829.5 90.3 4,213.1 72.9
Alumina and other
related types of
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118253.6 2.2 916.5 8.0 1,269.9 11.7 342.2 8.1 1,490.6 25.8
Others
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850.4 0.5 89.3 0.8 202.3 1.8 71.2 1.6 77.2 1.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,448.6 100.0 11,478.4 100.0 10,886.7 100.0 4,242.9 100.0 5,780.9 100.0
Note:
(1) Mainly include scrap and other materials, electricity and steam supply.
SUMMARY
–1 9–


--- page 30 ---
The following table sets forth a breakdown of our cost of sales by nature in absolute
amount and as a percentage of the total cost of sales for the periods indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Raw materials (1)
Coal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,122.1 27.3 3,106.9 27.1 2,639.6 24.2 1,071.7 25.3 988.4 17.1
Bauxite /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118907.2 7.9 2,401.4 20.9 2,790.2 25.6 1,066.4 25.1 1,744.4 30.7
Carbon anode /H1118/H1118/H1118/H11182,122.2 18.5 1,680.1 14.6 1,254.5 11.5 534.4 12.6 581.0 10.1
Alumina /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,302.3 20.1 877.4 7.6 783.0 7.2 219.8 5.2 795.7 13.8
Other materials (2) /H1118/H1118/H1118476.0 4.2 770.1 6.7 484.0 4.5 204.8 4.8 214.2 3.7
Electricity
(outsourcing) /H1118/H1118/H1118/H1118/H1118881.3 7.7 918.5 8.0 874.5 8.0 356.9 8.4 365.1 6.3
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118711.6 6.2 735.4 6.4 643.3 5.9 255.0 6.0 336.8 5.8
Staff cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333.4 2.9 309.5 2.7 347.2 3.2 142.4 3.4 148.6 2.6
Others (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118592.5 5.2 679.1 6.0 1,070.4 9.9 391.5 9.2 576.7 9.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,448.6 100.0 11,478.4 100.0 10,886.7 100.0 4,242.9 100.0 5,780.9 100.0
Notes:
(1) Carbon anodes, coal and alumina are raw materials used to produce electrolytic aluminum. Bauxite is
the raw material used to produce alumina.
(2) Mainly include steam, liquid alkali and aluminum fluoride.
(3) Mainly include equipment costs, maintenance costs and environmental protection costs.
Gross Profit and Gross Profit Margin
We had gross profit of RMB2,041.1 million, RMB2,336.3 million, RMB4,276.5 million,
RMB1,640.3 million and RMB1,432.7 million in 2022, 2023, 2024 and the five months ended
May 31, 2024 and 2025, respectively. Our gross profit margin was 15.1%, 16.9%, 28.2%,
27.9% and 19.9% in 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025,
respectively.
SUMMARY
–2 0–


--- page 31 ---
The following table sets forth a breakdown of our gross profit and gross profit margin by
product category for the periods indicated:
Y ear ended December 31, Five months ended May 31,
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
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Electrolytic
aluminum (1) /H1118/H1118/H1118/H11181,737.3 13.5 2,029.7 16.2 3,469.2 26.9 1,446.5 27.4 1,310.1 23.7
– Liquid aluminum /H1118/H111883.5 23.0 1,783.3 16.4 3,149.7 27.2 1,446.5 27.4 1,043.1 24.2
– Aluminum ingots /H1118/H11181,653.8 13.2 246.4 14.8 319.5 24.5 – – 267.0 21.9
Alumina and other
related types of
products /H1118/H1118/H1118/H1118/H1118/H111817.0 6.3 60.9 6.2 579.6 31.3 107.3 23.9 33.1 2.2
– Alumina /H1118/H1118/H1118/H1118/H1118/H1118(0.1) (0.1) 40.7 5.7 511.4 31.0 97.2 23.8 36.6 2.7
– Other related types
of products
(2) /H1118/H1118/H1118/H111817.1 8.4 20.2 7.8 68.2 33.8 10.1 24.6 (3.5) (1.9)
Others (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118286.8 85.1 245.7 73.3 227.7 53.0 86.5 54.9 89.4 53.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,041.1 15.1 2,336.3 16.9 4,276.5 28.2 1,640.3 27.9 1,432.6 19.9
Notes:
(1) The amounts represent the gross profit and gross profit margin corresponding to sales to external
customers for each product. For alumina sold intra-Group, we use it to produce electrolytic aluminum
further sold to customers. Therefore the gross margin corresponding to the intra-Group sales of alumina
was absorbed in the gross profit of the sales of electrolytic aluminum.
(2) Mainly include aluminum hydroxide.
(3) Mainly include scrap and other materials, electricity and steam supply.
Our gross profit decreased from RMB1,640.3 million in the five months ended May 31,
2024 to RMB1,432.7 million in the same period of 2025. Our gross profit margin decreased
from 27.9% in the five months ended May 31, 2024 to 19.9% in the same period of 2025,
primarily due to an increase in the prices of certain raw materials. The CRU China Bauxite
price increased from approximately RMB528 per ton in the five months ended May 31, 2024
to approximately RMB720 per ton in the same period of 2025, according to CRU. The CRU
China Bauxite price has increased in 2025, primarily due to (i) the strong demand for bauxite
in alumina production in China; and (ii) the reliance on bauxite supply from Guinea in China.
The market price of bauxite from Guinea was relatively high, mainly due to (i) the long
shipping distance; (ii) the high quality of bauxite; and (iii) political and economic instability
in Guinea. See “Industry Overview — Bauxite and Other Raw Material Analysis (Global and
China) — Bauxite Price Analysis.”
SUMMARY
–2 1–


--- page 32 ---
Our gross profit increased significantly from RMB2,336.3 million in 2023 to
RMB4,276.5 million in 2024. Our gross profit margin increased significantly from 16.9% in
2023 to 28.2% in 2024, primarily because of (i) an increase in ASP of electrolytic aluminum
and alumina, mainly due to the increase in their average market price, driven by the increase
in market demand. The annual average SHFE cash price of electrolytic aluminum increased
from RMB18,678 per ton in 2023 to RMB19,949 per ton in 2024, according to CRU. The
annual average CRU China alumina price increased from approximately RMB2,906 per ton in
2023 to approximately RMB4,030 per ton in 2024, according to CRU; and (ii) a decrease in
the price of certain raw materials. The annual average of the CRU CFR South China coal price
decreased from RMB801 per ton in 2023 to RMB735 per ton in 2024, according to CRU. The
annual average CRU China carbon anode price decreased from RMB5,156 per ton in 2023 to
RMB4,114 per ton in 2024, according to CRU.
Our gross profit increased by 14.5% from RMB2,041.1 million in 2022 to RMB2,336.3
million in 2023. Our gross profit margin increased from 15.1% to 16.9% in the same period,
primarily benefited from a decrease in the market price of certain key raw materials. The
annual average of the CRU China carbon anode price decreased from RMB6,799 per ton in
2022 to RMB5,156 per ton in 2023, according to CRU. The annual average of the CRU CFR
South China coal price decreased from RMB1,124 per ton in 2022 to RMB801 per ton in 2023,
according to CRU. The caustic soda delivered price decreased from RMB3,645 per ton in 2022
to RMB2,887 per ton in 2023, according to CRU.
Summary of Consolidated Statements of Financial Position
The following table sets forth a summary of selected information from our consolidated
statements of financial position as of the dates indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Total non-current assets /H1118/H1118/H1118/H1118/H111812,071.5 12,312.3 14,535.6 15,762.8
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,418.2 7,241.2 3,784.2 5,180.4
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,489.7 19,553.5 18,319.8 20,943.2
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H111815,705.1 9,881.4 8,738.2 10,902.1
Net current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,286.9) (2,640.2) (4,954.0) (5,721.7)
Total non-current liabilities /H1118/H1118/H11183,855.4 6,223.2 7,255.3 6,859.3
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,560.5 16,104.6 15,993.5 17,761.4
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,929.2 3,448.9 2,326.3 3,181.8
SUMMARY
–2 2–


--- page 33 ---
We had a net current liabilities position during the Track Record Period. This was
primarily due to the capital-intensive nature of our industry, which requires bank and other
borrowings to support our business operation. We have implemented, and will continue to
implement, various measures to improve our net current liabilities position. See “Financial
Information — Liquidity and Capital Resources — Current Assets and Liabilities.”
Our net current liabilities decreased significantly from RMB6,286.9 million as of
December 31, 2022 to RMB2,640.2 million as of December 31, 2023. The decrease was
primarily due to (i) a decrease in bank and other borrowings, mainly as a result of the change
in our borrowing structure. See “Financial Information — Indebtedness — Bank and Other
Borrowings;” and (ii) a decrease in trade, bills and other payables, mainly due to a decrease
in bills payables under note financing arrangements as we reduced the use of financing
arrangements for bill payables. See “Financial Information — Discussion of Selected Items
from the Consolidated Statements of Financial Position — Trade, Bills and Other Payables.”
Our net current liabilities increased from RMB2,640.2 million as of December 31, 2023
to RMB4,954.0 million as of December 31, 2024. The increase was primarily due to a decrease
in amounts due from related parties, mainly due to a decrease in amounts due from Innovation
Group, mainly as a result of the offset of considerations among related parties as part of the
Reorganization, which had been settled as of December 31, 2024. See “Financial Information
— Discussion of Selected Items from the Consolidated Statements of Financial Position —
Amounts Due from Related Parties.” Such a decrease was partially offset by a decrease in
trade, bills and other payables, mainly as a result of a decrease in bills payables under the note
financing arrangement, resulting from the settlement of payables. See “Financial Information
— Discussion of Selected Items from the Consolidated Statements of Financial Position —
Trade, Bills and Other Payables.”
Our net current liabilities increased from RMB4,954.0 million as of December 31, 2024
to RMB5,721.7 million as of May 31, 2025. The increase was primarily due to (i) an increase
in bank and other borrowings. See “— Indebtedness — Bank and Other Borrowings;” and (ii)
an increase in trade, bills and other payables. See “— Discussion of Selected Items from the
Consolidated Statements of Financial Position — Trade, Bills and Other Payables.” Such an
increase was partially offset by an increase in inventories. See “— Discussion of Selected
Items from the Consolidated Statements of Financial Position — Inventories.”
Our net assets increased by 78.8% from RMB1,929.2 million as of December 31, 2022 to
RMB3,448.9 million as of December 31, 2023, corresponding to the increase in our equity in
2023, primarily reflecting (i) our profit and total comprehensive income for the year of
RMB1,080.6 million; and (ii) a capital injection from a non-controlling interest.
Our net assets decreased by 32.5% from RMB3,448.9 million as of December 31, 2023
to RMB2,326.3 million as of December 31, 2024, corresponding to the increase in our equity
in 2024, primarily reflecting the acquisition of equity interest in Inner Mongolia Chuangyuan
of RMB3,032.5 million, partially offset by the profit and total comprehensive income for the
year of RMB2,629.5 million.
SUMMARY
–2 3–


--- page 34 ---
Our net assets increased by 36.8% from RMB2,326.3 million as of December 31, 2024 to
RMB3,181.8 million as of May 31, 2025, corresponding to the increase in our equity in the five
months ended May 31, 2025, primarily reflecting our profit and total comprehensive income
for the period of RMB855.5 million.
Summary of the Consolidated Statements of Cash Flows
The following table sets forth our cash flow for the periods indicated:
Y ear ended December 31,
Five months
ended
May 31,
2022 2023 2024 2025
(RMB in millions)
Net cash flows generated from
operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,869.1 4,554.2 3,461.8 832.9
Net cash flows (used in)/generated
from investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(664.6) 1,632.1 (2,426.5) (1,942.8)
Net cash flows (used in)/generated
from financing activities /H1118/H1118/H1118/H1118/H1118/H1118(1,434.0) (5,761.1) (1,443.0) 1,404.4
Net increase/(decrease) in cash
and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(229.5) 425.2 (407.7) 294.5
Cash and cash equivalents at the
beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118388.4 158.9 584.1 176.4
Cash and cash equivalents at
end of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158.9 584.1 176.4 470.9
See “Financial Information — Liquidity and Capital Resources — Cash Flow.”
KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios for the periods indicated:
Y ear ended December 31,
Five months ended
May 31,
2022 2023 2024 2024 2025
(unaudited)
Gross profit margin (%) (1) /H1118/H1118/H1118/H1118/H1118/H111815.1 16.9 28.2 27.9 19.9
Net profit margin (%) (2) /H1118/H1118/H1118/H1118/H1118/H1118/H11186.8 7.8 17.3 17.3 11.9
EBITDA margin (Non-IFRS
measure) (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.5 21.3 31.6 31.8 23.1
Return on equity (%) (4) /H1118/H1118/H1118/H1118/H1118/H1118/H111862.0 40.2 91.1 34.6 31.1
SUMMARY
–2 4–


--- page 35 ---
Notes:
(1) Gross profit margin equals gross profit for the year or period divided by revenue for the same year or
period and multiplied by 100%. See “Financial Information — Period-to-period Comparison of Results
of Operations — Y ear ended December 31, 2023 Compared with Y ear ended December 31, 2022 —
Gross Profit and Gross Profit Margin”, “Financial Information — Period-to-period Comparison of
Results of Operations — Y ear ended December 31, 2024 Compared with Y ear ended December 31, 2023
— Gross Profit and Gross Profit Margin” and “Financial Information — Period-to-period Comparison
of Results of Operations — Five Months ended May 31, 2025 Compared with Five Months ended May
31, 2024 — Gross Profit and Gross Profit Margin” for a discussion on the changes in gross profit margin
during the Track Record Period.
(2) Net profit margin equals profit or total comprehensive income for the year or period divided by revenue
for the year or period and multiplied by 100%.
(3) EBITDA margin (Non-IFRS measure) equals EBITDA (Non-IFRS measure) for the year or period
divided by revenue for the year or period and multiplied by 100%.
(4) Return on equity equals profit or total comprehensive income for the year or period divided by the
average of the beginning and ending total equity for the year or period and multiplied by 100%.
Our net profit margin remained relatively stable at 6.8% and 7.8% in 2022 and 2023,
respectively. Our EBITDA margin (Non-IFRS measure) remained relatively stable at 20.5%
and 21.3% in 2022 and 2023, respectively.
Our net profit margin increased significantly from 7.8% in 2023 to 17.3% in 2024. Our
EBITDA margin (Non-IFRS measure) increased from 21.3% in 2023 to 31.6% in 2024. The
increases in net profit margin and EBITDA margin (Non-IFRS measure) were primarily due to
an increase in gross profit. See “Financial Information — Period-to-period Comparison of
Results of Operations — Y ear ended December 31, 2024 Compared with Y ear ended December
31, 2023 — Gross Profit and Gross Profit Margin.”
Our net profit margin decreased from 17.3% in the five months ended May 31, 2024 to
11.9% in the same period of 2025. Our EBITDA margin (non-IFRS measure) decreased from
31.8% in the five months ended May 31, 2024 to 23.1% in the same period of 2025. The
decreases in net profit margin and EBITDA margin (non-IFRS measure) were primarily due to
a decrease in gross profit margin. See “— Period-to-period Comparison of Results of
Operations — Five Months ended May 31, 2025 compared with Five Months ended May 31,
2024 — Gross Profit and Gross Profit Margin.”
Our return on equity decreased from 62.0% in 2022 to 40.2% in 2023, primarily due to
an increase in equity in 2023, which was mainly due to the capital injection from a
non-controlling interest into Shandong Chuangyuan of RMB439.0 million. Our return on
equity increased from 40.2% in 2023 to 91.1% in 2024, primarily due to an increase in profit
for the period from RMB1,080.6 million in 2023 to RMB2,629.5 million in 2024, primarily as
a result of an increase in gross profit. See “Financial Information — Period-to-period
Comparison of Results of Operations — Y ear ended December 31, 2024 Compared with Y ear
ended December 31, 2023 — Gross Profit and Gross Profit Margin.” Our return on equity
remained relatively stable at 34.6% in the five months ended May 31, 2024 and 31.1% in the
same period of 2025.
SUMMARY
–2 5–


--- page 36 ---
USE OF PROCEEDS
Assuming that the Over-allotment Option is not exercised, after deducting the
underwriting commissions and other estimated offering expenses payable by us in connection
with the Global Offering, and assuming an Offer Price of HK$10.58 per Share (being the
mid-point of the indicative Offer Price range of HK$10.18 and HK$10.99 per Share), we
estimate that we will receive net proceeds of approximately HK$5,113.2 million from the
Global Offering after deducting the underwriting commissions and other estimated offering
expenses payable by us in connection with the Global Offering. In line with our strategies, we
intend to use our proceeds from the Global Offering for the purposes and in the amounts set
forth below: (i) approximately 50.0% of the net proceeds, or HK$2,556.6 million, is expected
to be used for expanding overseas production capacity, including the construction of an
aluminum smelter and the purchase and installation of production equipment; (ii)
approximately 40.0% of the net proceeds, or HK$2,045.3 million, is expected to be used for
our green energy projects, including the construction of green power plants and the purchase
and installation of equipment; and (iii) approximately 10.0% of the net proceeds, or HK$511.3
million, is expected to be used for working capital and general corporate uses. See “Future
Plans and Use of Proceeds.”
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 Shares.
Some of the major risks we face include:
 Our revenue relies on the market price of electrolytic aluminum and alumina, which
is affected by factors beyond our control.
 We procure key raw materials, including bauxite, coal, carbon anodes and alumina
from suppliers. If we fail to obtain sufficient raw materials that meet our quality
standards, at reasonable prices or at all, or if we fail to maintain relationships with
major suppliers, our business, financial condition and results of operations will be
materially and adversely affected.
 If we encounter shortage in electricity or if our electricity costs significantly
increase, our production process and product supply would be impacted.
 If we fail to properly plan production capacity in accordance with the electrolytic
aluminum quota and alumina production capacity, we may not be able to comply
with relevant regulatory requirements. We may not be able further expand our
production capacity to capture market opportunities due to certain objective factors.
 We may not be able to complete our production expansion and energy
transformation projects as expected.
SUMMARY
–2 6–


--- page 37 ---
 Our success depends on our strong relationships with major customers. A significant
portion of our revenue in 2023 and 2024 and the five months ended May 31, 2025
was derived from a connected person.
 Failure to manage our future growth or profitability effectively may materially and
adversely affect our business operations and prospects.
See “Risk Factors.”
IMPORT TARIFFS IN THE U.S.
In August 2018, the U.S. imposed 25% tariffs on Chinese aluminum products. On March
12, 2025, the U.S. imposed an additional 25% tariff on aluminum products from all countries,
which was subsequently doubled to 50%, effective from June 4, 2025. This series of tariff
increases on aluminum products is expected to have a limited direct impact on China’s
electrolytic aluminum industry because China has a relatively small export of electrolytic
aluminum and aluminum products to the U.S. According to the statistics of the General
Administration of Customs of the People’s Republic of China, China only exported 1.7 kt of
aluminum ingots to the U.S. in 2024, which accounted for less than 0.01% of China’s total
electrolytic aluminum production in the same year. In terms of downstream products, China
exported 260 kt of aluminum products to the U.S. in 2024, accounting for approximately 4%
of China’s total aluminum product export during the same year. See “Industry Overview —
Electrolytic Aluminum Analysis (Global and China) — Competitive Landscape Analysis —
Key development trends in the aluminum industry — Uncertainty on the US tariff.” This series
of tariff increases on aluminum products is expected to have a limited direct impact on our
operations and financial condition because all of our products were sold in the domestic market
during the Track Record Period.
Beginning in February 2025, tariff policies, especially those imposed by the U.S.
government, have been rapidly evolving and subject to further negotiations among countries.
According to CRU, it is estimated that any tariff on imports from China imposed by the U.S.
government might hinder the export of all Chinese products to the U.S. In 2024, China
exported 6.3 mt of aluminum products overseas. However, for aluminum-made components
contained in various downstream end-uses, China’s export values are difficult to measure. In
this case, tariff policies imposed by the U.S. on imports may indirectly affect the global
consumption of all goods made in China, which includes the Chinese aluminum products as
well as products containing aluminum-made components. See “Industry Overview —
Electrolytic Aluminum Analysis (Global and China) — Competitive Landscape Analysis —
Key development trends in the aluminum industry — Uncertainty on the US tariff.” However,
such reduced demand for Chinese aluminum products as well as products containing
aluminum-made components, if any, is unlikely to have a material adverse effect on our
operations or financial condition, because, to the best of our knowledge, substantially all of our
customers’ products were sold in the domestic market during the Track Record Period.
Nonetheless, any further aggressive tariff policies imposed by the U.S. on foreign imports, as
well as unofficial announcements on social media or during public speeches by President
SUMMARY
–2 7–


--- page 38 ---
Trump and other government officials, can influence the growth of the global economy and the
level of consumption, thereby indirectly impacting the overall pricing in the global aluminum
industry. This may create a challenging environment for all the players in the industry,
including us. See “Risk Factors — Our business and financial condition could be adversely
affected by trade tariffs or other trade barriers.” We will continue to closely monitor the latest
policies on tariffs that may be imposed by the US government.
REGULATORY DEVELOPMENTS IN CHINA
In recent years, there have been significant regulatory developments in China that impact
the aluminum industry. To optimize production capacity structure, in January 2018, the MIIT
officially introduced the Scheme of Aluminum Capacity Swap, which keeps China’s total
electrolytic aluminum capacity at the 2017 level of approximately 45 mt per year. Further, in
2024, China’s State Council issued the 2024-2025 Action Plan for Energy Saving and Carbon
Reduction ( 2024-2025), which set the objective to achieve 25% use
of green energy in the electrolytic aluminum industry by 2025.
The above regulatory developments in China aim to expedite the transition of China’s
aluminum industry towards low-cost, environmentally friendly aluminum. In 2024, China had
already reached the annual electrolytic aluminum production capacity of approximately 45 mt,
necessitating that new electrolytic aluminum producers buy aluminum production quotas from
the existing producers. In addition, as all aluminum smelters must use at least 25% green power
by the end of 2025, smelters that have high production costs and use traditional power tend to
sell their quotas to those using green power.
In light of the production capacity cap set by the MIIT and a growing global demand for
electrolytic aluminum, we actively pursue a globalization strategy, aiming to construct an
integrated electrolytic aluminum industry chain project in Saudi Arabia to capture market
opportunities. We plan to build an integrated green energy system with our proprietary power
plants to maximize green power supply, enhance energy efficiency and reduce both electricity
costs and carbon emissions. By the end of 2026, we aim to achieve an over 50% proportion of
green energy utilized, significantly exceeding the 25% requirement for the electrolytic
aluminum industry by 2025 according to China’s 2024-2025 Action Plan for Energy Saving and
Carbon Reduction ( 2024-2025). This strategy allows us to capture the
growing demand for green power aluminum in domestic and overseas markets.
Furthermore, according to the Circular on the Weight of Responsibilities for Renewable
Energy-generated Power Consumption in 2025 and the Relevant Matters (׵2025 ϋ̙Ύ
) promulgated by the General Office of the
NDRC and the Comprehensive Department of the National Energy Administration (the “NEA”)
on July 1, 2025, in order to help achieve peak carbon neutrality and promote the high-quality
development of renewable energy, a new target for the proportion of green power consumption
in the electrolytic aluminum industry has been set. Specifically, the proportion of green power
consumption in the electrolytic aluminum industry in Inner Mongolia in 2025 is expected to be
30.7% and the expected proportion of green power consumption in the electrolytic aluminum
SUMMARY
–2 8–


--- page 39 ---
industry in 2026 is 31.7%. The achievement of the proportion of green electricity consumption
by enterprises in electrolytic aluminum industry shall be calculated based on green certificates
and the proportion of green electricity consumption by enterprises in 2025 will be assessed by
relevant government authorities.
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Our business has continued to expand subsequent to the Track Record Period. In
particular, our sales of alumina increased by 13.4%, from 1,149.3 kt in the nine months ended
September 30, 2024 to 1,303.6 kt in the same period of 2025. In addition, our sales of
electrolytic aluminum remained relatively stable with a slight increase of 1.2% from 576.7 kt
in the nine months ended September 30, 2024 to 583.7 kt in the same period of 2025. Our
confirmed order of aluminum ingots accounted for RMB3,082.0 million in the nine months
ended September 30, 2025. Our confirmed order of alumina accounted for RMB5,156.7 million
in the nine months ended September 30, 2025. Since June 2025 up to the date of this
prospectus, the ASP of our electrolytic aluminum products remained relatively stable, in line
with the trend in the market prices of electrolytic aluminum during the same period. The ASP
of our electrolytic aluminum products in the month of September 2025 was approximately 3%
higher than that in the five months ended May 31, 2025. Since June 2025 up to the date of this
prospectus, the ASP of our alumina products decreased, in line with the industry trend in the
market prices of alumina during the same period. The ASP of our alumina in the month of
September 2025 was approximately 11% lower than that in the five months ended May 31,
2025.
After performing sufficient due diligence work which our Directors consider appropriate
and after due and careful consideration, the Directors confirm that, up to the date of this
prospectus, there had been no material adverse change in our financial or trading position or
prospects since May 31, 2025, being the end date of the periods reported in the Accountants’
Report in Appendix I to this prospectus, and there has been no event since May 31, 2025 that
would materially affect the information as set out in the Accountants’ Report in Appendix I to
this prospectus.
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Cui, through his wholly owned subsidiary,
Bloomsbury Holding, is entitled to control the exercise of 100% voting rights of the issued
Shares of the Company.
Immediately following the completion of the Global Offering (assuming the Over-
allotment Option is not exercised), Mr. Cui, through Bloomsbury Holding, will be entitled to
control the exercise of 75% voting rights of the enlarged issued share capital of our Company.
Therefore, Mr. Cui and Bloomsbury Holding will remain as the Controlling Shareholders of our
Company immediately upon completion of the Global Offering.
SUMMARY
–2 9–


--- page 40 ---
There is clear business delineation between our Group and our Controlling Shareholders’
close associates. See “Relationship with Our Controlling Shareholders”.
We have entered into and are expected to continue to have certain transactions with our
connected persons after the Listing which will constitute our partially exempt and non-exempt
continuing connected transactions under Chapter 14A of Listing Rules upon Listing. See
“Connected Transactions”.
GLOBAL OFFERING STATISTICS
The statistics in the following table are based on the assumptions that: (i) the Global
Offering has been completed and 500,000,000 Shares are issued pursuant to the Global
Offering; and (ii) the Over-allotment Option is not exercised.
Based on the Offer
Price of HK$10.18
per Offer Share
Based on the Offer
Price of HK$10.99
per Offer Share
Market capitalization of our Shares (1) /H1118/H1118/H1118/H1118/H1118/H1118HK$20,360
million
HK$21,980
million
Unaudited pro forma adjusted consolidated
net tangible assets per Share (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$1.82 HK$2.02
Notes:
(1) The calculation of market capitalization is based on 2,000,000,000 Shares expected to be in issue
immediately upon completion of the Global Offering, assuming the Over-allotment Option is not
exercised.
(2) The unaudited pro forma adjusted net tangible assets per Share is arrived at after making the adjustments
referred to in Appendix II to this prospectus.
DIVIDEND
No dividend was declared or paid by our Company in 2022, 2023 and the five months
ended May 31, 2025. In 2024, one of our subsidiaries declared and paid a cash dividend of
RMB330.0 million.
We are an exempted company incorporated under the laws of the Cayman Islands. Under
the Cayman Companies Act and the Articles of Association, our Company may pay a dividend
out of either profit or share premium account, provided that in no circumstances may a
dividend be paid if this would result in our Company being unable to pay its debts as they fall
due in the ordinary course of business. We have no fixed dividend policy, and the declaration
and payment of any dividends in the future will be determined by our Board of Directors in its
discretion. In addition, our Shareholders in a general meeting may approve any declaration of
dividends, which must not exceed the amount recommended by our Board. A decision to
declare or to pay any dividends in the future, and the amount of any such dividends, will
SUMMARY
–3 0–


--- page 41 ---
depend on a number of factors, including our results of operations, cash flows, financial
condition, payments by our subsidiaries of cash dividends to us, business prospects, statutory,
regulatory and contractual restrictions on our declaration and payment of dividends and other
factors that our Board may consider important. We do not have a pre-determined dividend
payout ratio. There can be no assurance that dividends of any amount will be declared or
distributed in any year.
LISTING EXPENSES
Listing expenses consist of professional fees, underwriting commissions and other fees
incurred in connection with the Global Offering. During the Track Record Period, our listing
expenses were nil, nil, RMB16.4 million and RMB4.7 million in 2022, 2023, 2024 and the five
months ended May 31, 2025, respectively. We expect to incur listing expenses of
approximately RMB161.2 million (HK$176.8 million), comprising: (i) underwriting fees of
RMB113.5 million (HK$124.5 million); and (ii) non-underwriting-related expenses of
RMB47.7 million (HK$52.4 million), which are further categorized into: (a) fees and expenses
of legal advisors and accountants of RMB27.6 million (HK$30.2 million); and (b) other fees
and expenses of RMB20.2 million (HK$22.1 million), assuming the Over-allotment Option is
not exercised and based on the Offer Price of HK$10.58 per Offer Share (being the mid-point
of the Offer Price range), approximately RMB32.9 million (HK$36.1 million) of which is
expected to be charged to our consolidated statements of profit or loss, and approximately
RMB128.3 million (HK$140.8 million) of which has been or is expected to be deducted from
equity upon the completion of the Global Offering. The listing expenses are expected to
represent approximately 3.3% of the gross proceeds of the Global Offering, assuming an Offer
Price of HK$10.58 per Offer Share (being the mid-point of the indicative Offer Price range)
and that the Over-allotment Option is not exercised. The listing expenses above are the latest
practicable estimate for reference only, and the actual amount may differ from this estimate.
We do not expect such expenses to have a material adverse impact on our results of operations
in 2025.
SUMMARY
–3 1–


--- page 42 ---
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”.
“%” per cent
“affiliate” with respect to any specified person, any other person,
directly or indirectly, controlling or controlled by or
under direct or indirect common control with such
specified person
“AFRC” the Accounting and Financial Reporting Council of Hong
Kong
“associate(s)” has the meaning ascribed to it under the Listing Rules
“Audit Committee” the audit committee of our Board
“Beijing Chuangyuan” Beijing Chuangyuan Zhixin Trading Co., Ltd. ( ̏ԯ௴๕
ʮ̡), a limited company established under
the laws of the PRC on May 9, 2024, and an indirectly
wholly-owned subsidiary of our Company
“Bloomsbury Holding” Bloomsbury Holding Limited, a limited liability
company incorporated under the laws of BVI on June 28,
2023, which is wholly owned by Mr. Cui
“Board” or “Board of Directors” the board of directors of our Company
“Brentford Management” Brentford Management Pte. Ltd., a limited company
established under the laws of Singapore on September 10,
2024, and a wholly-owned subsidiary of our Company
“Business Day” a day (other than a Saturday, Sunday or public holiday)
on which banks in Hong Kong are generally open for
normal business to the public
“BVI” the British Virgin Islands
“Capital Market Intermediaries” the capital market intermediaries as named in “Directors
and Parties Involved in the Global Offering”
DEFINITIONS
–3 2–


--- page 43 ---
“Cayman Companies Act” the Companies Act (As Revised) of the Cayman Islands,
Cap. 22 (Law 3 of 1961), as amended or supplemented or
otherwise modified from time to time
“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC
“China” or “PRC” the People’s Republic of China, and for the purpose of
this prospectus and for geographical reference only and
except where the context requires, references in this
prospectus to “China” and the “PRC” do not apply to
Hong Kong, Macau and Taiwan
“Chuangyuan Alloy” Inner Mongolia Chuangyuan Alloy Co., Ltd. ( ʫႆ̚௴๕
ʮ̡), a limited company established under the
laws of the PRC on January 28, 2019, and an indirectly
wholly-owned subsidiary of our Company
“Chuangyuan Intelligent Power” Inner Mongolia Chuangyuan Intelligent Power Co., Ltd.
(ʮ̡), a limited company
established under the laws of the PRC on June 4, 2018,
and an indirectly wholly-owned subsidiary of our
Company
“Chuangyuan New Material” Inner Mongolia Chuangyuan New Material Co., Ltd. ( ʫ
ʮ̡), a limited company
established under the laws of the PRC on January 13,
2022, and an indirectly wholly-owned subsidiary of our
Company
“Chuangyuan Resources
Recycling”
Inner Mongolia Chuangyuan Resources Recycling Co.,
Ltd. (ʮ̡), a limited
company established under the laws of the PRC on July
26, 2018, and an indirectly wholly-owned subsidiary of
our Company
“Chuangyuan Supply Chain
Management”
Inner Mongolia Chuangyuan Supply Chain Management
Co., Ltd. (ʮ̡) (formerly
known as Inner Mongolia Industrial Trade Co., Ltd. ( ʫႆ
ʮ̡)), a limited company established
under the laws of the PRC on June 27, 2023, and an
indirectly wholly-owned subsidiary of our Company
DEFINITIONS
–3 3–


--- page 44 ---
“Chuangyuan Wind Power” Inner Mongolia Chuangyuan Wind Power Co., Ltd. ( ʫႆ
ʮ̡), a limited company established
under the laws of the PRC on July 20, 2018, and an
indirectly wholly-owned subsidiary of our Company
“Chuangyuan Xinchuang” Beijing Chuangyuan Xinchuang Metal Materials Design
& Research Co., Ltd. (Ӻ
ʮ̡), a limited company established under the laws
of the PRC on October 23, 2025, and an indirectly
wholly-owned subsidiary of our Company
“close associate(s)” has the meaning ascribed to it 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”
Chuangxin Industries Holdings Limited ( ௴อྼุණྠϞ
ʮ̡), an exempted company incorporated in the
Cayman Islands with limited liability on July 4, 2023
“Compliance Advisor” Gram Capital Limited
“connected person(s)” has the meaning ascribed to it under the Listing Rules
“Connected Transaction Control
Committee”
the connected transaction control committee of our Board
“connected transaction(s)” has the meaning ascribed to it under the Listing Rules
“Controlling Shareholder(s)” has the meaning ascribed to it in the Listing Rules and
unless the context requires otherwise, refers to the group
of controlling shareholders of our Company, namely Mr.
Cui and Bloomsbury Holding, and a Controlling
Shareholder shall mean each or any one of them
“core connected person(s)” has the meaning ascribed to it under the Listing Rules
DEFINITIONS
–3 4–


--- page 45 ---
“Corporate Governance Code” the Corporate Governance Code set out in Appendix C1
to the Listing Rules
“CRU Report” the report commissioned by our Company and
independently prepared by CRU, a summary of which is
set out in “Industry Overview”
“CRU” CRU International Limited, the industry consultant of our
Company
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ
ึ)
“Director(s)” the director(s) of our Company
“EIT Law” Enterprise Income Tax Law of the PRC ( ʕശɛ͏΍ձ
), as amended, supplemented or
otherwise modified from time to time
“Exchange Participant” a person (a) who, in accordance with the Rules of the
Hong Kong Stock Exchange, 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 serious affects the
working public’s ability to resume work or brings safely
concern for a prolonged period
“FINI” “Fast Interface for New Issuance”, an online platform
operated by HKSCC that is mandatory for admission to
trading and, where applicable, the collection and
processing of specified information on subscription in
and settlement for all new listings
“General Rules of HKSCC” the General Rules of HKSCC as may be amended or
modified from time to time and where the context so
permits, shall include the HKSCC Operational
Procedures
DEFINITIONS
–3 5–


--- page 46 ---
“Global Offering” the Hong Kong Public Offering and the International
Offering
“green power” energy that is generated from renewable,
environmentally-friendly sources
“Group”, “our Group”, “we”,
“our” or “us”
our Company and our subsidiaries or, where the context
so requires, in respect of the period before our Company
became the holding company of our present subsidiaries,
the business operated by such subsidiaries or their
predecessors (as the case may be)
“Guide for New Listing
Applicants”
the Guide for New Listing Applicants issued by the Hong
Kong Stock Exchange effective from January 1, 2024 (as
amended, supplemented or otherwise modified from time
to time)
“HK” or “Hong Kong” the Hong Kong Special Administrative Region of the
People’s Republic of China
“HK$” or “Hong Kong dollars”
or “HK dollars” or “Hong
Kong cents”
Hong Kong dollars and cents respectively, the lawful
currency of Hong Kong
“HKSCC EIPO” the application for the Hong Kong Offer Shares to be
issued in the name of HKSCC Nominees and deposited
directly into CCASS to be credited to your designated
HKSCC Participant’s stock account through causing
HKSCC Nominees to apply on your behalf, including by
instructing your broker or custodian who is an HKSCC
Participant to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer
Shares on your behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary
of HKSCC
“HKSCC Operational
Procedures”
the operational procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operations and functions of CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as from time
to time in force
DEFINITIONS
–3 6–


--- page 47 ---
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“Hong Kong Offer Shares” 50,000,000 Shares (subject to reallocation as described in
“Structure of the Global Offering”) 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 Hong Kong Stock Exchange trading
fee), on and subject to the terms and conditions described
in “Structure of the Global Offering — The Hong Kong
Public Offering”
“Hong Kong Share Registrar” Computershare Hong Kong Investor Services Limited
“Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited, a wholly-
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“Hong Kong Takeovers Code”
or “Takeovers Code”
Codes on Takeovers and Mergers and Share Buy-backs
issued by the SFC
“Hong Kong Underwriters” the underwriters listed in “Underwriting — Hong Kong
Underwriters”, being the underwriters of the Hong Kong
Public Offering
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated November 13, 2025,
relating to the Hong Kong Public Offering and entered
into by, among others, Mr. Cui, Bloomsbury Holding
Limited, the Joint Sponsors, the Overall Coordinators,
and the Hong Kong Underwriters and our Company as
further described in the section headed “Underwriting —
Underwriting Arrangements and Expenses” in this
prospectus
DEFINITIONS
–3 7–


--- page 48 ---
“IFRS” International Financial Reporting Standards, which
include standards, amendments and interpretations
promulgated by the International Accounting Standards
Board
“Independent Third Party(ies)” person(s) or company(ies) and their respective ultimate
beneficial owner(s), who/which, to the best of our
Directors’ knowledge, information and belief, having
made all reasonable enquiries, is/are third party(ies)
independent of our Company and our connected persons
as defined under the Listing Rules
“Inner Mongolia Chuangyuan” Inner Mongolia Chuangyuan Metal Co., Ltd. ( ʫႆ̚௴
ʮ̡), a limited company established under
the laws of the PRC on May 10, 2012, and an indirectly
wholly-owned subsidiary of our Company
“Innovation Group” Shandong Innovation Group Co., Ltd. (௴อණྠϞ
ʮ̡), a limited company established under the laws of
the PRC on August 13, 2013, a company held by Mr. Cui
and his associates, namely Y ang Aimei, Geng Hongyu
and Wang Wei as to 71.82%, 11.82%, 8.18% and 8.18%,
respectively, thus our connected person
“Innovation New Material” Innovation New Material Technology Co., Ltd. ( ௴ออ
ʮ̡), a limited company established
under the laws of the PRC on June 7, 1996 and listed on
the Shanghai Stock Exchange (stock code: 600361.SH), a
subsidiary of Innovation Group which is held by
Innovation Group and Mr. Cui as to 32.46% and 15.54%,
respectively, thus our connected person. The other
shareholders of Innovation New Materials include
enterprises, institutions and natural persons, each of them
holding less than 5% of the shares
“International Offer Shares” 450,000,000 Shares (subject to reallocation and the
exercise of the Over-allotment Option as described in
“Structure of the Global Offering”) initially offered by
our Company pursuant to the International Offering
DEFINITIONS
–3 8–


--- page 49 ---
“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, on and subject to the terms and
conditions of the International Underwriting Agreement,
as further described in “Structure of the Global Offering
— The International Offering”
“International Underwriters” the 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
November 20, 2025 by, among others, our Company, the
Overall Coordinators and the International Underwriters,
as further described in “Underwriting — International
Offering”
“Joint Bookrunners” the joint bookrunners as named in “Directors and Parties
Involved in the Global Offering”
“Joint Global Coordinators” the joint global coordinators as named in “Directors and
Parties Involved in the Global Offering”
“Joint Lead Managers” the joint lead managers as named in “Directors and
Parties Involved in the Global Offering”
“Joint Sponsors” the joint sponsors as named in “Directors and Parties
Involved in the Global Offering”
“Kanghong New Material” Inner Mongolia Kanghong New Material Co., Ltd. ( ʫႆ
ʮ̡), a limited company established
under the laws of the PRC on May 25, 2023, and an
indirectly wholly-owned subsidiary of our Company
“Keyou New Energy” Inner Mongolia Chuangyuan Keyou New Energy Co.,
Ltd. (ʮ̡), a limited
company established under the laws of the PRC on
November 11, 2022, and an indirectly wholly-owned
subsidiary of our Company
DEFINITIONS
–3 9–


--- page 50 ---
“Kingston Management” Kingston Management Pte. Ltd., a limited company
established under the laws of Singapore on September 26,
2024, and an indirectly wholly-owned subsidiary of our
Company
“Latest Practicable Date” November 6, 2025, being the latest practicable date prior
to the printing of this prospectus for the purpose of
ascertaining certain information contained in this
prospectus
“Listing Date” the date, expected to be on or about November 24, 2025,
on which the Shares are listed on the Stock Exchange and
from which dealings in the Shares are permitted to
commence on the Stock Exchange
“Listing Rules” the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, as amended or
supplemented from time to time
“Listing” the listing of the Shares on the Main Board of the Stock
Exchange
“M&A Rules” the Provisions on Merger and Acquisition of Domestic
Enterprises by Foreign Investors (Իᒅ
) jointly issued by MOFCOM,
SASAC, SA T, CSRC, SAMR and SAFE, as amended,
supplemented or otherwise modified from time to time
“Macau” the Macau Special Administrative Region of the People’s
Republic of China
“Main Board” the stock market (excluding the option market) operated
by the Stock Exchange which is independent from and
operated in parallel with GEM of the Stock Exchange
“Memorandum” or
“Memorandum of Association”
the first amended and restated articles of association of
our Company (as amended from time to time),
conditionally adopted on November 9, 2025 with effect
from the Listing Date, a summary of which is set out in
Appendix III to this prospectus
“MIIT” Ministry of Industry and Information Technology of the
PRC (ʷ௅)
DEFINITIONS
–4 0–


--- page 51 ---
“MOFCOM” Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷ਠਕ
௅)
“Mr. Cui” Mr. CUI Lixin ( ੦ͭอ), Chairman of the Board, Non-
executive Director, our founder and one of our
Controlling Shareholders
“NDRC” National Development and Reform Commission of the
PRC (ึ)
“Nomination Committee” the nomination committee of our Board
“Offer Price” the final offer price per Offer Share (exclusive of
brokerage, SFC transaction levy, AFRC transaction levy
and Stock Exchange trading fee), expressed in Hong
Kong dollars, at which the Hong Kong Offer Shares are
to be subscribed for pursuant to the Hong Kong Public
Offering and the International Offer Shares are to be
offered pursuant to the International Offering, to be
determined as described in “Structure of the Global
Offering — Pricing and Allocation”
“Offer Share(s)” the Hong Kong Offer Share(s) and/or the International
Offer Share(s), as the context may require
“Ordinary Share(s)” or “Share(s)” ordinary shares in the share capital of our Company with
par value of US$0.000005 each
“Overall Coordinators” the overall coordinators as named in “Directors and
Parties Involved in the Global Offering”
“Over-allotment Option” the option expected to be granted by our Company to the
International Underwriters, exercisable by the Overall
Coordinators (for themselves and on behalf of the
International Underwriters) pursuant to the International
Underwriting Agreement, pursuant to which our
Company may be required to allot and issue up to an
aggregate of 75,000,000 additional Shares at the Offer
Price to, among other things, cover over-allocations in
the International Offering, if any, further details of which
are described in the section headed “Structure of the
Global Offering” in this prospectus
DEFINITIONS
–4 1–


--- page 52 ---
“Phineas Management” Phineas Management Limited, a limited liability
company incorporated under the laws of Hong Kong on
September 15, 2023, and a wholly-owned subsidiary of
our Company
“PRC Legal Advisor” Commerce & Finance Law Offices, the legal advisor to
our Company as the laws of the PRC
“Principal Share Registrar” Campbells Corporate Services Limited
“prospectus” this prospectus being issued in connection with the Hong
Kong Public Offering
“province” a province or, where the context requires, a provincial
level autonomous region or municipality, under the direct
supervision of the central government of the PRC
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration Committee” the remuneration committee of our Board
“Reorganization” the corporate reorganization of our Group in preparation
for the Listing as described in “History, Reorganization
and Corporate Structure”
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“SAFE Circular 37” the Circular on Relevant Issues Concerning Foreign
Exchange Control on Domestic Residents’ Offshore
Investment and Financing and Roundtrip Investment
through Special Purpose V ehicles (͏ஷཀ
೻ҳ༟̮ි၍ଣϞᗫਪᕚ
) issued by SAFE
“SAFE” State Administration of Foreign Exchange of the PRC ( ʕ
ശɛ͏΍ձ਷̮ි၍ଣ҅), the PRC governmental
agency responsible for matters relating to foreign
exchange administration, including local branches, when
applicable
“SAMR” State Administration for Market Regulation of the PRC
(̹ఙ္ຖ၍ଣᐼ҅) (formerly known as State
Administration for Industry and Commerce of the PRC
(၍ଣᐼ҅)
DEFINITIONS
–4 2–


--- page 53 ---
“SAR” Saudi Arabian Riyal, the lawful currency of Saudi Arabia
“SASAC” State-owned Assets Supervision and Administration
Commission of the State Council of the PRC ( ʕ਷਷ਕ৫
ึ)
“SA T” State Administration of Taxation of the PRC (೼
ਕᐼ҅)
“Saudi Project Co-Investors” the investors co-invested with the Company into the
Saudi Project, including Innovation Group, Innovation
New Material and Independent Third Party investors
“SFC” the Securities and Futures Commission of Hong Kong
“SFO” or “Securities and Futures
Ordinance”
the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended or supplemented from
time to time
“Shandong Chuangyuan” Shandong Chuangyuan New Material Technology Co.,
Ltd. (ʮ̡) (formerly known as
Shandong Luyu Bochuang Aluminum Co., Ltd. (ኁ
ʮ̡), a limited company established
under the laws of PRC on November 12, 2018, which is
held by our Group and Innovation Group as to 58.5% and
41.5%, respectively
“Shandong Suotong” Shandong Suotong Innovation Carbon Materials Co., Ltd.
(ʮ̡), in which Innovation
Group holds approximately 22.05%
“Shareholder(s)” holder(s) of Shares
“Singapore” Republic of Singapore
“Sponsor-Overall Coordinators,
Overall Coordinators and Joint
Global Coordinators”
China International Capital Corporation Hong Kong
Securities Limited and Huatai Financial Holdings (Hong
Kong) Limited
“Stabilizing Manager” China International Capital Corporation Hong Kong
Securities Limited
“Stock Exchange” The Stock Exchange of Hong Kong Limited
DEFINITIONS
–4 3–


--- page 54 ---
“subsidiary(ies)” has the meaning ascribed to it in section 15 of the
Companies Ordinance
“substantial shareholder(s)” has the meaning ascribed to it in the Listing Rules
“Track Record Period” the years ended December 31, 2022, 2023 and 2024, and
the five months ended May 31, 2025
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“U.S.“or “United States” the United States of America
“U.S. Securities Act” the United States Securities Act of 1933, as amended,
supplemented or otherwise modified from time to time,
and the rules and regulations promulgated thereunder
“US$”, “USD” or “U.S. dollars” United States dollars, the lawful currency of the United
States
“White Form eIPO” the application for Hong Kong Offer Shares to be issued
in the applicant’s own name by submitting the application
online through the designated website of White Form
eIPO Service Provider at www.eipo.com.hk
“White Form eIPO Service
Provider”
Computershare Hong Kong Investor Services Limited
DEFINITIONS
–4 4–


--- page 55 ---
This glossary of technical terms contains explanations of certain terms used in this
Prospectus in connection with our Group and our business. The meaning of these terms
may not necessarily correspond to standard industry meaning or the usage of these terms.
“alloy” a composite metal formed by fusing two or more metals
and occasionally other materials
“alumina” aluminum oxide, the primary material for electrolytic
aluminum smelting
“alumina refining” the process of extracting aluminum oxide from bauxite
ore
“aluminum alloy” a type of alloy, the major component of which is
aluminum
“aluminum hydroxide” a white crystalline compound formed in the Bayer
process of alumina refining process, can be calcined into
alumina
“aluminum ingots” the standardized solid form of aluminum that has been
cast into a convenient shape for storage, transportation,
and further processing
“aluminum smelting” the electrolytic reduction process required to produce
electrolytic aluminum from alumina
“ASP” average selling price
“bauxite” a mineral, a mixture of hydrated aluminum oxides usually
containing oxides of iron and silicon in varying
quantities, characteristically composed of small, round
concretions
“Bayer process” the principal industrial method for refining bauxite to
produce alumina developed by Carl Josef Bayer
“BRI” or “Belt and Road
Initiative”
the trading policy of the PRC Government aimed at
linking China to the world and to facilitate the trading
between China and its neighbouring Asian and European
countries along the new silk road
GLOSSARY OF TECHNICAL TERMS
–4 5–


--- page 56 ---
“bt” billion tons, a unit of mass equal to 1,000,000,000 metric
tons
“CAGR” compound annual growth rate
“carbon anodes” a broad family of essentially pure carbon materials that
can be tailored to vary widely in their strength, density,
conductivity, pore structure, and crystalline development
“cash cost” the direct costs involved in the smelting process
“caustic soda” a white solid ionic compound consisting of sodium
cations and hydroxide anions, used as the primary
lixiviant for the bauxite slurry dissolution
“CCIC” China Certification & Inspection (Group) Co., Ltd., a
company that provides certification and inspection
services in China
“CFR” Cost and Freight
“China Emissions Trading
Scheme”
a market-based approach to controlling pollution by
providing economic incentives for reducing the
emissions of pollutants
“Class I resource area” the areas with the richest and highest-quality resources
“Class II resource area” the areas with rich and high-quality natural resources
“CNAS” China National Accreditation Service for Conformity
Assessment, the national accreditation body of China
responsible for the accreditation of various types of
organizations
“East China” a region in China mainly consisting of seven provincial
administrative regions, namely Shanghai, Jiangsu,
Zhejiang, Anhui, Fujian, Jiangxi, and Shandong
“EBITDA” Earnings Before Interest, Taxes, Depreciation, and
Amortization
“electricity cost of aluminum
smelting”
the cost of all electricity used for producing electrolytic
aluminum
GLOSSARY OF TECHNICAL TERMS
–4 6–


--- page 57 ---
“electrolytic aluminum labor
productivity per capita”
the production of electrolytic aluminum per worker at an
aluminum smelter, where “worker” includes all personnel
employed at our aluminum smelter
“GB 25465-2010” a Chinese national standard that specifies the discharge
limits, monitoring, and control requirements for water
and air pollutants generated during the production
processes of enterprises in the aluminum industry
“GB/T 1196-2023” a Chinese national standard that specifies the
requirements for aluminum ingots produced by the
alumina-cryolite molten salt electrolysis method
“GB/T 24487-2009” a Chinese national standard that outlines the requirements
for alumina used in various applications, including the
production of aluminum metal through the electrolytic
process. Such standard was superseded by GB/T 24487-
2022 in October 2022
“GB/T 24487-2022” a Chinese national standard that includes revisions and
updates to the technical requirements, classification of
alumina grades, and other specifications
“GB/T24001-2016/
ISO14001:2015”
a Chinese national standard that specifies the
requirements for an environmental management system
that an organization can use to enhance its environmental
performance
“grid” an interconnected network that delivers electricity from
producers to consumers
“Hall-Héroult process” the primary industrial method for smelting aluminum and
involves dissolving alumina in molten cryolite
“industry average electrolytic
aluminum labor productivity
per capita”
the average production of electrolytic aluminum per
worker in aluminum smelters in China, where “worker”
includes all personnel employed by the smelter
“kcal” kilocalorie, a unit of measurement for energy
“kg” the base unit of mass in the international system of units
“km” a unit of length in the international system of units, equal
to one thousand meters
GLOSSARY OF TECHNICAL TERMS
–4 7–


--- page 58 ---
“kt” kilo ton, a unit of mass equal to 1,000 metric tons
“kWh” kilowatt hours, a unit for measuring electrical power,
meaning one kilowatt of power for one hour
“LCOE” levelized cost of energy, a measure used to assess and
compare the cost-effectiveness of different methods of
electricity generation
“LME cash price” the spot price for per tonne of electrolytic aluminum
traded on London Metal Exchange (LME), stated in USD
“mt” million ton, a unit of mass equal to 1,000,000 metric tons
“MW” megawatt
“MWh” megawatt hour, a unit of measurement that describes the
amount of energy produced by one megawatt over the
course of one hour
“North China” a region in China mainly consisting of five provincial
administrative regions, namely Beijing, Tianjin, Hebei,
Shanxi, and Inner Mongolia
“northern port cluster” a series of ports located along the northern coastal region
of China
“perfluorocarbon” or “PFC” man-made chemical compounds of carbon and fluorine
“proportion of green energy
utilized”
the percentage of green energy utilized compared to our
total energy utilized in our proprietary electricity
generation
“rate of alumina self-sufficiency” the percentage of alumina produced in-house which is
consumed at our aluminum smelter, compared to our total
alumina consumption
“rate of electricity
self-sufficiency”
the percentage of electricity generated at our proprietary
power plants compared to our total electricity
consumption
“red mud” the residue left after extracting alumina from bauxite
using the Bayer process, consisting of impurities and
solid waste materials
GLOSSARY OF TECHNICAL TERMS
–4 8–


--- page 59 ---
“SGS” Société Générale de Surveillance, a Swiss multinational
company that provides inspection, verification, testing,
and certification services
“SHFE cash price” the spot price for per ton of electrolytic aluminum future
contract delivered in the immediate month, traded on
Shanghai Future Exchange (SHFE) and stated in RMB
“sq.m.” square meter
“the Saudi Project” the integrated electrolytic aluminum industry chain
project in Saudi Arabia in which we invest
“ton” the metric ton, a unit of weight, with one metric ton equal
to 1,000 kilograms or 2,204.6 pounds
“utilization hours” the total number of hours that a power plant operates at
its full capacity, namely the hours of electricity
generation, over a specific period
“3C electronics” computer, communication and consumer electronics. It
involves the production of electronic devices from the
segments of computers, communication and
entertainment
GLOSSARY OF TECHNICAL TERMS
–4 9–


--- page 60 ---
This prospectus includes forward-looking statements. All statements other than
statements of historical facts contained in this prospectus, including, without limitation, those
regarding our future financial position, our strategy, plans, objectives, goals, targets and future
developments in the markets where we participate or are seeking to participate, and any
statements preceded by, followed by or that include the words “believe,” “expect,” “estimate,”
“predict,” “aim,” “intend,” “will,” “may,” “plan,” “consider,” “anticipate,” “seek,” “should,”
“could,” “would,” “continue,” or similar expressions or the negative thereof, are forward-
looking statements. These forward-looking statements involve known and unknown risks,
uncertainties and other factors, some of which are beyond our control, which 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. These forward-looking statements are based on numerous assumptions regarding
our present and future business strategies and the environment in which we will operate in the
future. Important factors that could cause our actual performance or achievements to differ
materially from those in the forward-looking statements include, among other things, the
following:
 general political and economic conditions, including those related to the PRC;
 our ability to successfully implement our business plans and strategies;
 future developments, trends and conditions in the industry and markets in which we
operate or into which we intend to expand;
 our business operations and prospects;
 our capital expenditure plans;
 the actions and developments of our competitors;
 our financial condition and performance;
 capital market developments;
 our dividend policy;
 any changes in the laws, rules and regulations of the central and local governments
in the PRC and other relevant jurisdictions and the rules, regulations and policies of
the relevant governmental authorities relating to all aspects of our business and our
business plans;
 various business opportunities that we may pursue; and
 changes or volatility in interest rates, foreign exchange rates, equity prices or other
rates or prices, including those pertaining to the PRC and Hong Kong and the
industry and markets in which we operate.
FORW ARD-LOOKING STATEMENTS
–5 0–


--- page 61 ---
Additional factors that could cause actual performance or achievements to differ
materially include, but are not limited to, those discussed in “Risk Factors” and elsewhere in
this prospectus. We caution you not to place undue reliance on these forward-looking
statements, which reflect our management’s view only as of the date of this prospectus. We
undertake no obligation to update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this prospectus might not occur. All
forward-looking statements contained in this prospectus are qualified by reference to the
cautionary statements set out in this section.
FORW ARD-LOOKING STATEMENTS
–5 1–


--- page 62 ---
An investment in our Shares involves significant risks. You should carefully consider
all of the information in this prospectus, including the risks and uncertainties described
below, before making an investment in our 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 and results of operations. In any such
case, the market price of our Shares could decline, and you may lose all or part of your
investment.
These factors are contingencies that may or may not occur , and we are not in a
position to express a view on the likelihood of any such contingency occurring. The
information given is as of the Latest Practicable Date unless otherwise stated, will not
be updated after the date hereof, and is subject to the cautionary statements in the section
headed “Forward-looking Statements” in this prospectus.
RISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our revenue relies on the market price of electrolytic aluminum and alumina, which is
affected by factors beyond our control.
Our business is sensitive to fluctuations in the prices of electrolytic aluminum and
alumina. The prices of electrolytic aluminum and alumina are determined by supply and
demand dynamics in the global market, which are beyond our control. These dynamics are
primarily influenced by factors such as electrolytic aluminum and alumina end market
demands, global mine production, changes in demand and supply of the global electrolytic
aluminum and alumina market and global and PRC economic conditions and industrial
demand. The demand for our electrolytic aluminum and alumina products is driven by their
applications in downstream markets, including 3C electronic products, lightweight automotive,
green energy, transportation, industrial materials and construction industries. The demand in
these end markets depends on our customers’ ability to develop, produce and sell end products,
as well as the acceptance of these products by end customers. In addition, technological
advancements may lead to the replacement of electrolytic aluminum with alternative materials
in downstream industries. Consequently, changes in demand for our electrolytic aluminum and
alumina products are reflected in their market prices. According to CRU, the annual average
of the SHFE cash price of electrolytic aluminum was RMB19,945 per ton, RMB18,678 per ton,
RMB19,949 per ton, RMB19,659 per ton and RMB20,270 per ton in 2022, 2023, 2024 and the
five months ended May 31, 2024 and 2025, respectively, and the annual average of the CRU
China alumina price was RMB2,936 per ton, RMB2,906 per ton, RMB4,030 per ton,
RMB3,393 per ton and RMB3,517 per ton in 2022, 2023, 2024 and the five months ended May
31, 2024 and 2025, respectively. The fluctuation of such prices was mostly due to global
economic conditions and changes in demand and supply of the global electrolytic aluminum
and alumina market. The market demand and supply influenced by global economic conditions
and fluctuations in the market prices of electrolytic aluminum and alumina could affect our
results of operations.
RISK FACTORS
–5 2–


--- page 63 ---
We procure key raw materials, including bauxite, coal, carbon anodes and alumina from
suppliers. If we fail to obtain sufficient raw materials that meet our quality standards, at
reasonable prices or at all, or if we fail to maintain relationships with major suppliers, our
business, financial condition and results of operations will be materially and adversely
affected.
We procure key raw materials, including bauxite, coal, carbon anodes and alumina, from
suppliers. We rely on our suppliers to provide us with adequate raw materials that meet our
standards. Any disruption to the supply of adequate raw materials to meet our needs could
impair our ability to manufacture products as scheduled. Moreover, we expect our demand for
raw materials to increase as we expand our production capacity, and we cannot guarantee that
current suppliers will have the capacity to meet our standards and demand in the future. If our
relationship with key suppliers deteriorates or terminates, or if our key suppliers face
operational difficulties that hinder their ability to provide raw materials on time and of
consistent quality, our ability to deliver products to customers promptly could be impacted. In
such cases, we cannot assure you that we will be able to identify an alternative qualified
supplier in a timely manner or at all, which would materially and adversely affect our business,
financial condition and results of operations.
We did not experience any shortage in the supply of raw materials during the Track
Record Period. However, we cannot guarantee that we will not experience any shortage in the
supply of raw materials in the future. Any shortage in the supply of raw materials in the future
could materially and adversely affect our business, financial condition and results of
operations. In addition, if we fail to obtain sufficient raw materials that meet our quality
standards, we may be unable to find alternative sources of supply at a reasonable price, in a
timely manner, on satisfactory terms or at all. We cannot assure you that there will be no raw
material supply shortage in the future. Such events could materially and adversely affect our
business, financial condition and results of operations.
In addition, the prices of our raw materials may fluctuate. In 2022, 2023, 2024 and the
five months ended May 31, 2024 and 2025, our cost of sales primarily consisted of raw
materials, accounting for 78.0%, 76.9%, 73.0%, 73.0% and 75.4% of our total cost of sales,
respectively. Our cost of sales remained relatively stable at RMB11,448.6 million in 2022 and
RMB11,478.4 million in 2023. Our cost of sales decreased by 5.2% from RMB11,478.4 million
in 2023 to RMB10,886.7 million in 2024, primarily due to a decrease in the cost of raw
materials. Our cost of sales increased by 36.2% from RMB4,242.9 million in the five months
ended May 31, 2024 to RMB5,780.9 million in the five months ended May 31, 2025, generally
reflecting our revenue growth of 22.6% but also reflecting a more significant increase in the
cost of raw materials. If we fail to obtain raw materials at reasonable prices, our cost of sales
will be significantly affected. Such events could materially and adversely affect our business,
financial condition and results of operations. Any increase in the price of raw materials in the
future may be significantly higher than the increase in the market price of our products, and
the increase in the market price of our products may not compensate for the increase in the
prices of raw materials. As a result, our business performance and results of operations could
be materially and adversely affected.
RISK FACTORS
–5 3–


--- page 64 ---
Our gross profit and gross profit margin may fluctuate subject to price volatility of our
products and raw materials.
Our gross profit and gross profit margin are exposed to risks arising from the price
volatility of our products and raw materials. Both our sales prices and our procurement costs
are influenced by market prices of the relevant products and raw materials. See “— Our
revenue relies on the market price of electrolytic aluminum and alumina, which is affected by
factors beyond our control” and “— We procure key raw materials, including bauxite, coal,
carbon anodes and alumina from suppliers. If we fail to obtain sufficient raw materials that
meet our quality standards, at reasonable prices or at all, or if we fail to maintain relationships
with major suppliers, our business, financial condition and results of operations will be
materially and adversely affected.” Fluctuations in these prices do not always move in the same
direction. During the Track Record Period, we have observed varying trends in raw material
and product prices, which impacted our gross margins. For example, the gross profit margin of
our alumina and other related types of products decreased from 23.9% in the five months ended
May 31, 2024 to 2.2% in the same period of 2025, primarily due to (i) the increase in prices
of certain key materials, in particular bauxite, while the increase in prices cannot be passed on
to alumina customers, mainly as a result of the surplus in alumina supply in the market; and
(ii) the decrease in market price of alumina in 2025. See “Financial Information —
Period-to-period Comparison of Results of Operations — Five Months Ended May 31, 2025
compared with Five Months Ended May 31, 2024 — Gross Profit and Gross Profit Margin.”
There is no assurance that we will be able to pass on rising costs to our customers, which could
further squeeze our profitability. If we are unable to effectively manage these pricing
dynamics, our financial performance may be materially and adversely affected.
If we encounter shortage of electricity or if our electricity costs significantly increase, our
production process and product supply would be impacted.
Our business requires a continuous and stable electricity supply. According to CRU, the
industry average of electricity consumption for aluminum smelting was 13,670.0 kWh per ton
in 2024. We have established proprietary power plants and electricity generation facilities that
utilize thermal power and are in the process of building power plants and electricity generation
facilities that utilize green electricity sources to provide a stable electricity supply at low cost.
Our proprietary thermal power plant in Huolinguole supplied approximately 8,188 million
kWh, 8,350 million kWh, 8,959 million kWh, 3,592 million kWh and 3,665 million kWh of
electricity for our aluminum production in 2022, 2023, 2024 and the five months ended May
31, 2024 and 2025, respectively, accounting for 81.3%, 81.4%, 87.8%, 84.2% and 87.4% of our
total electricity consumption for the same periods, respectively. The cost of electricity
consumption of current coal-fired thermal power generation in our Huolinguole aluminum
smelter was RMB0.37 per kWh in 2024 and RMB0.33 per kWh in the five months ended May
31, 2025. We cannot assure you that there will be no interruption to our proprietary power
plants and electricity generation facilities that could result in a major impact on our electricity
supply.
RISK FACTORS
–5 4–


--- page 65 ---
In addition, as we procure coal to generate electricity and our coal procurement comprises
a large proportion of our cost of sales, we may experience increased electricity costs and
impacts in electricity supply if coal prices increase. Our cost of coal amounted to RMB3,122.1
million, RMB3,106.9 million, RMB2,639.6 million, RMB1,071.7 million and RMB988.4
million in 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, respectively,
accounting for 27.3%, 27.1%, 24.2%, 25.3% and 17.1% of our cost of sales in the same periods,
respectively. However, coal prices might increase in the future due to factors that are out of our
control, such as low supply and high market demand for coal. Our cost of electricity
procurement amounted to RMB881.3 million, RMB918.5 million, RMB874.5 million,
RMB356.9 million and RMB365.1 million, in 2022, 2023, 2024 and the five months ended
May 31, 2024 and 2025, respectively, accounting for 7.7%, 8.0%, 8.0%, 8.4% and 6.3% of our
cost of sales in the same periods, respectively. See “Business — Electricity Supply —
Electricity Procurement.” Our electricity suppliers may raise their prices of electricity in the
future. If there is a significant increase in our electricity costs, an insufficient electricity supply
to satisfy our production needs, or any disruption in our relationship with electricity suppliers,
our production process and product supply would be impacted.
If we fail to properly plan production capacity in accordance with the electrolytic
aluminum quota and alumina production capacity, we may not be able to comply with
relevant regulatory requirements. We also may not be able to further expand our
production capacity to capture market opportunities due to certain objective factors.
The electrolytic aluminum industry in China is subject to production quota requirements.
The alumina industry in China is subject to approved production capacity requirements.
Electrolytic aluminum and alumina manufacturers should plan their production in accordance
with their obtained production quota for electrolytic aluminum and approved production
capacity for alumina. Our aluminum smelter is located in Huolinguole, Inner Mongolia, and
our alumina refinery is located in Binzhou, Shandong Province. We have obtained regulatory
approvals for an annual production quota of 788.1 kt of electrolytic aluminum and an approved
production capacity of 1,200 kt of alumina. The average annual capacity utilization rate of our
aluminum smelting was more than 94% and the average annual capacity utilization rate of our
alumina refining was more than 88% in each period of the Track Record Period. See “Business
— Our Production — Our Production Capabilities.” We are required to plan our production in
accordance with our production quota obtained and our approved production capacity. We
cannot guarantee that we will always be able to fulfill the production requirements for
electrolytic aluminum and alumina. Any failure to properly plan our production could result in
overproduction, potentially leading to administrative penalties, such as production suspension
and fines.
In addition, due to objective factors such as production quota requirements in the
electrolytic aluminum industry and the approved production capacity requirement in the
alumina industry in China, we may not be able to expand our production capacity promptly, or
at all, to capture market opportunities, which could affect our growth in revenue and profit.
RISK FACTORS
–5 5–


--- page 66 ---
Any interruption, damage or loss of our production facilities could materially and
adversely affect our business, financial condition and results of operations.
Any interruption, damage or loss of our production facilities resulting from natural
disasters or other factors, such as floods, fire and earthquakes, could be costly and
time-consuming to repair and could disrupt our operations. In such event, we would be forced
to cease our production to repair our production facilities and equipment, which we believe
would be difficult to fully repair in a relatively short period of time given the highly specialized
and large-scale nature of our aluminum product manufacturing business. We may incur
significant additional costs and experience a disruption in the supply of our products in such
a situation.
In addition, our electrolyzers contain liquid aluminum. Should our production facilities
suspend operations for any reason, such liquid aluminum would solidify due to low
temperatures. As a result, it would take extra time and costs to recommence operations. Our
alumina refining equipment is subject to annual examination, necessitating a temporary
production halt until the inspection is complete. The estimated production output of alumina
during our annual examination, calculated based on the actual production output of alumina in
2024, is 35.5 kt, representing approximately 2% of our actual production output of alumina in
2024. Any extended disruption in our operations would have a material adverse impact on our
ability to produce sufficient quantities of products and may require us to incur additional
expenses in order to produce sufficient quantities. Any disruption in our operations may impair
our ability to meet customer demand and cause customers to cancel purchase orders, which
could materially and adversely affect our business, financial condition and results of
operations.
We may not be able to complete our production expansion and energy transformation
projects as expected.
We have expanded, and intend to continue to expand, our operations and complete energy
transformation projects, and such expansion and construction of projects have placed, and will
continue to place, substantial demands on our managerial, operational, financial, technological
and other resources. We invested in an integrated electrolytic aluminum industry chain project
with expected annual production capacity of 500.0 kt in Saudi Arabia. See “History,
Reorganization and Corporate Structure — Major Acquisitions, Disposals and Mergers —
Investment During Track Record Period” and “Business — Our Strengths — Active
Implementation of Globalization Strategies.” In addition, we are constructing wind power
plants and solar power plants totaling a projected installed capacity of 1,750.0 MW. See
“Business — Electricity Supply — Our Green Power Supply.”
However, we might not be able to complete our construction projects as expected. The
success of our expansion projects may depend on factors beyond our control, such as the
progress of construction conducted by the third-party construction companies, local laws and
regulations, government support, including in the form of tax benefits, and customer demand
for our expanded production capacity. For example, we may encounter delay in the
RISK FACTORS
–5 6–


--- page 67 ---
procurement of essential materials or components for the construction projects. We may also
face unforeseen hurdles in obtaining necessary approvals and permits or complying with
environmental regulations. In addition, our financial condition and business operations could
impact our ability to invest in critical infrastructure and technology needed for the construction
of aluminum smelters in overseas markets or wind power and solar power plants. As a result,
there is a risk that we may not be able to complete our production expansion and energy
transformation projects as expected.
Our success depends on our strong relationships with major customers. A significant
portion of our revenue in 2023, 2024 and the five months ended May 31, 2025 was derived
from a connected person.
During the Track Record Period, our customers mainly consisted of nonferrous metal
processing and manufacturing enterprises and traders. Revenue from our largest customer in
2023, 2024 and the five months ended May 31, 2025, Innovation New Material, a company
controlled by Mr. Cui and therefore a connected person of our Company, amounted to
RMB10,891.8 million, RMB11,608.9 million and RMB4,315.9 million, respectively,
accounting for 78.8%, 76.6% and 59.8% of our total revenue for the same respective periods.
See “Relationship with Our Controlling Shareholders — Independence from Our Controlling
Shareholders — Operational Independence — Sales of Electrolytic Aluminum in Liquid Form
to Innovation New Material.” Revenue from our five largest customers in each year/period
during the Track Record Period amounted to RMB5,507.5 million, RMB12,018.8 million,
RMB13,132.6 million and RMB5,751.4 million, respectively, and accounted for 40.8%, 87.0%,
86.6% and 79.7% of our total revenue for the same respective periods. According to CRU,
where upstream and downstream manufacturers within the same group are located in proximity
to each other, they usually prioritize entering into transactions with each other before entering
into transactions with independent third parties. If these customers’ demand for our electrolytic
aluminum products does not increase in line with our business expansion or if such demand
decreases, we will have to look for alternative customers for our electrolytic aluminum
products. However, we may be unable to find alternative customers for our aluminum products
at commercially acceptable prices, on satisfactory terms, in a timely manner or at all, which
would have a material adverse effect on our business, financial condition and results of
operations. We cannot assure you that this relationship will continue in the future without any
disruption. Our business, financial condition and results of operations depend on our ability to
continue working with these customers, obtaining purchase orders and the financial condition
and commercial success of our customers, as well as factors influencing the development of the
electrolytic aluminum industry. Any disruptions in our production, defects in our products or
other issues might affect our relationship with customers, resulting in a deterioration of our
major customer relationships. Any material delay, reduction or cancellation of purchase orders
from our major customers could cause our sales to decline significantly, materially and
adversely affecting our results of operations. We cannot assure you that our customers will
continuously place orders with us in the future or at the same levels as in prior periods. Our
customers may terminate their purchase agreements with us or significantly change, reduce,
delay or cancel their purchase orders at any time.
RISK FACTORS
–5 7–


--- page 68 ---
Our business, financial condition and results of operations also depend on our customers’
success. We cannot assure you that the financial condition and commercial success of our
customers will not deteriorate. We cannot assure you that our major customers will not become
insolvent or unable to pay for the products supplied by us. The occurrence of any of these
events, especially with respect to our major customers, would result in a material adverse effect
on our business, financial condition and results of operations.
Failure to manage our future growth or profitability effectively may materially and
adversely affect our business operations and prospects.
Our historical results of operations and financial performance may not be indicative of
our future performance, and we cannot assure you that our business will be able to maintain
the growth rate we achieved in the past. Our future growth and profitability are dependent upon
factors such as aluminum prices, costs of raw materials and growth of the end-user market for
aluminum. The price of our products and sales of our products are sensitive to fluctuations in
price and demand in the electrolytic aluminum and alumina industry. Our growth may decline
due to a variety of other risks and uncertainties, such as a shortage in the supply of bauxite.
We also face intensive competition in the electrolytic aluminum and alumina industry.
Moreover, expansion in production bases and construction of new projects may increase the
complexity of our operations and place a significant strain on our managerial, operational,
financial and human resources. We cannot assure you that our future growth will align with the
growth in the electrolytic aluminum and alumina industry. We also cannot assure you that we
will be able to effectively manage our growth or to implement all such business systems,
operation procedures and control measures effectively, which could burden our growth and
materially and adversely affect our business operations, financial condition, results of
operations and prospects.
We are exposed to risks related to the stability of the global supply chain.
Supply of bauxite, one of the major raw materials for alumina refining, relies on imports
from overseas. We procured high-quality bauxite primarily from Guinea and Australia with
high aluminum levels and low silica content at competitive prices during the Track Record
Period. Our cost of bauxite was RMB907.2 million, RMB2,401.4 million, RMB2,790.2
million, RMB1,066.4 million and RMB1,774.4 million in 2022, 2023, 2024 and the five
months ended May 31, 2024 and 2025, respectively. See “Financial Information — Description
of Major Components of Our Results of Operations — Cost of Sales.” The cost of bauxite
procurement is sensitive to the stability of the global supply chain, which may lead to
significant cost increases due to adverse weather conditions, international trade restrictions,
international transportation disruption and the political and economic instability in overseas
regions such as Guinea and Australia. For example, our gross profit margin decreased from
27.9% in the five months ended May 31, 2024 to 19.9% in the same period of 2025, primarily
due to an increase in the prices of bauxite. The CRU China Bauxite price increased from
approximately RMB528 per ton in the five months ended May 31, 2024 to approximately
RMB720 per ton in the same period of 2025, according to CRU, partly due to the reliance on
bauxite supply from Guinea in China and the political and economic instability in Guinea. See
RISK FACTORS
–5 8–


--- page 69 ---
“Industry Overview — Bauxite and Other Raw Material Analysis (Global and China) —
Bauxite Price Analysis.” In addition, disruptions in international transportation caused by an
unstable global supply chain may delay the delivery of bauxite to us, which could lead to
delays in our aluminum smelting process and hinder our ability to fulfill customer orders on
schedule. As a result, changes in the stability of the global supply chain may affect our bauxite
procurement, which would have a material adverse effect on our business, financial condition
and results of operations. As of the Latest Practicable Date, we had not experienced any trading
restrictions on bauxite that would have a material impact on our results of operations or
financial condition.
We invested in and will start the construction of, an integrated electrolytic aluminum
industry chain project in Saudi Arabia, with a designed annual production capacity of 500.0 kt
of electrolytic aluminum. See “History, Reorganization and Corporate Structure — Major
Acquisitions, Disposals and Mergers — Investment During Track Record Period.” The project
in Saudi Arabia is subject to international trade relationships, affecting the stability of the
global supply chain. Changes in international trade relationships may cause difficulties in the
import of materials, international transportation disruptions and labor shortages. Any material
adverse changes in the stability of the global supply chain could lead to delays, increased costs
or even the suspension of the projects, which would have a material adverse effect on our
business, financial condition and results of operations.
We may not be successful in executing our business plans and strategies effectively, and
our business, financial condition and results of operations may be materially and
adversely affected.
We may not be successful in executing our business plans and strategies effectively or at
all. Unforeseen factors which could hinder us in the execution of our business plans and
strategies include, among others, unpredictable market developments, increased competition,
changes in the macroeconomy and supply chain disruptions. Unforeseen market changes can
shift demand for our products, making it difficult to forecast sales and adjust our strategies
accordingly. Changes in the macroeconomy can significantly impact the development of
aluminum companies as such changes will affect the prices of raw materials and end-user
markets, which then affect our production costs and demand for our products. In addition,
disruptions in our supply chain, whether due to logistical challenges, natural disasters or
geopolitical factors, can hinder our ability to deliver products on time and maintain operational
efficiency, potentially resulting in customer dissatisfaction, cancelation of orders or breach of
contracts.
RISK FACTORS
–5 9–


--- page 70 ---
We are subject to a variety of risks, including those in relation to the change in power
usage pattern, our comparative advantages, energy and water supply reliability,
government approvals and permits, downstream customer demand, as well as labor and
employment, associated with the Saudi Project.
We intend to expand into overseas markets and increase overseas production capabilities.
Specifically, we intend to allocate 50% of the net proceeds from the Global Offering to the
Saudi Project. See “Business — Our Strategies — Proactively Expand into Overseas Markets
and Increase Overseas Production Capacities as a Response to the Belt and Road Initiative (the
“BRI”)” and “Future Plans and Use of Proceeds.” In particular, our Saudi Project is subject to
several risks that could adversely affect its success and our overall financial performance.
These risks include: (i) change in power usage pattern. We primarily self-generate both green
and thermal power domestically, but will rely on procured electricity from external resources
in Saudi Arabia. This reliance on external power suppliers exposes us to potential price
volatility and supply interruptions not faced in our domestic operations; (ii) impact of
comparative advantage in the region. A key advantage of our operations in China is access to
relatively lower electricity costs. Our Group has an average electricity cost of aluminum
smelting, namely the power process cost under CRU cash cost, of approximately RMB5,439
per ton, RMB5,266 per ton and RMB4,786 per ton of electrolytic aluminum produced in 2022,
2023 and 2024, respectively. This is significantly lower than China’s industry average of
approximately RMB6,153 per ton, RMB6,039 per ton and RMB5,878 per ton during the same
periods, respectively. However, aluminum producers in Saudi Arabia also benefits from low
energy costs, primarily due to its access to abundant oil and gas reserves, according to CRU.
The cost of electricity consumption of current coal-fired thermal power generation in our
Huolinguole aluminum smelter was RMB0.37 per kWh in 2024 and RMB0.33 per kWh in the
five months ended May 31, 2025. The cost of electricity consumption for industries with heavy
energy consumption in Saudi Arabia is approximately 12 Halalah/kWh, equivalent to
approximately 0.032 USD/kWh, according to information published by Saudi Electricity
Company. As a result, we may lose one of the key comparative advantages of our operations
in China, namely our relatively lower electricity costs, in Saudia Arabia as all aluminum
producers in Saudi Arabia can benefit from the local low energy costs; (iii) energy and water
supply reliability. The operations of aluminum projects rely on a stable and consistent supply
of electricity and water. Disruptions to these utilities, whether due to weather-related events or
infrastructure limitations, could significantly impact production. Saudi Arabia faces challenges
related to water scarcity and the reliability of its power grid. Power outages and water
shortages could lead to production delays and increased costs; (iv) government approvals and
permits. The production and trading of electrolytic aluminum require various approvals and
permits from the Saudi government. If we experience delays in obtaining the necessary
approvals and permits from the Saudi government, this could significantly delay or even
prevent the successful operation of the project, impacting our operational and financial
projections; (v) downstream customer demand. The success of aluminum projects depends on
sufficient demand from downstream customers for our electrolytic aluminum products. While
the Saudi Arabian aluminum market is projected to grow, there is a risk that sufficient purchase
commitments may not materialize, impacting the Saudi Project’s financial viability. Securing
offtake agreements with key customers will be crucial, and the failure to do so could adversely
RISK FACTORS
–6 0–


--- page 71 ---
affect the Saudi Project’s revenue; and (vi) labor and employment. If we cannot effectively
recruit and retain a skilled workforce in Saudi Arabia or fail to do so in compliance with
applicable local laws and regulations, we may face operational and legal challenges. These and
other unforeseen challenges could materially and negatively impact the revenue from, the
profitability of and operational success of our Saudi Project. As a result, if we are unable to
navigate these challenges effectively, there could be a significant adverse impact on our
business, financial condition and results of operations.
If disruptions to our transportation network occur or our transportation costs
substantially increase, we may be unable to deliver our products or raw materials in a
timely manner and our operating expenses could increase.
Disruptions to the transportation network may cause delays in delivery of our products
and raw materials, significantly increasing our operating expenses. The transportation network
is subject to disruptions from various sources, such as operational inefficiency, labor disputes,
port strikes, wars and natural disasters, which affect the timely delivery of our products to
customers. Transportation of liquid aluminum is considered hazardous and there are strict
conditions regarding safe handling and may be delayed due to the lack of governmental
approval of transportation routes, unavailability of specially adapted vehicles for transporting
liquid aluminum and adverse weather conditions such as heavy snow. If our delivery time
increases unexpectedly, our ability to deliver our aluminum products on time would be
materially and adversely affected, resulting in delay or loss of revenue. In addition, leakage of
liquid aluminum during transportation can lead to significant environmental damage and pose
significant health risks to humans. Liquid aluminum is sensitive to temperature fluctuation and
inadequate temperature control may lead to changes in material properties. In addition, if fuel
prices increase, our transportation costs would likely increase as well. A prolonged
transportation disruption or a significant increase in the cost of transportation could materially
and adversely affect our business, financial condition and results of operations.
We may not be able to obtain additional capital in the future, on favorable terms or at all.
Our production expansion and energy transformation require significant financial
investment. As we continue to grow our business, our future capital requirements may be
substantial. To meet these needs, we may need to raise additional funds. Our construction and
development plans may change due to evolving circumstances, business development,
unforeseen contingencies or new opportunities, which could result in us not being able to
implement our plans within our budget. If our plans do change, we may need to seek additional
external financing to meet our capital expenditure requirements. This could include
commercial bank borrowings or the issuance of equity or debt securities. If we decide to raise
additional funds through debt, our interest and debt repayment obligations will increase and we
may be subject to additional covenants that could limit our ability to access cash flows from
operations. We cannot assure you that we will be able to raise adequate financing to fund our
future capital requirements on commercially acceptable terms in time, or at all.
RISK FACTORS
–6 1–


--- page 72 ---
Unsatisfactory performance of or defects in our products, or failure to maintain an
effective quality management system, may harm our reputation, lead to product returns
or recalls and materially and adversely affect our business, financial condition and results
of operations.
We value customer experience and are committed to attentive customer service. We
employ a comprehensive system to ensure that our customers receive prompt and effective
assistance. See “Business — Sales, Marketing and Customer Service — Customer Service.”
Unsatisfactory performance of or defects in our products, or failure to maintain an effective
quality management system, may harm our reputation and lead to product returns or recalls.
Product returns and recalls would divert our resources and management’s attention and
materially and adversely affect our results of operations and financial condition. Moreover, the
consequences of unsatisfactory performance of or defects in our products may be severe and
we may be subject to claims for contract breaches or be liable to financial compensations. In
addition, causes of unsatisfactory performance of or defects in, our products, or failure to
maintain a quality control system, may be sophisticated and sometimes beyond our control. If
our product performance fails to meet our customers’ expectations, we may also be subject to
litigation, lose customers, suffer negative publicity, and our business, financial condition and
results of operations could be adversely affected.
We face competition in the electrolytic aluminum industry. If we are unable to compete
effectively, our business, financial condition and results of operations may be materially
and adversely affected.
The industry in which we currently operate is competitive. Companies are competing with
each other with respect to cost control, location of production bases, regulatory compliance,
technology and available capacity. Global aluminum production is highly consolidated.
According to CRU, in 2024, the world’s top five producers supplied approximately 22 mt,
which was equivalent to approximately 30% of global electrolytic aluminum production. The
top 25 producers supplied approximately 51 mt, which was equivalent to approximately 71%
of global electrolytic aluminum production. China had 14 out of the world’s top 25 electrolytic
aluminum producers, who in total contributed approximately 30 mt of electrolytic aluminum
production in 2024. Competition in our industry may intensify as new competitors enter our
existing or new markets. Threats from new entrants could be disruptive to the near-term and
medium-term supply-demand equilibrium. In addition, our competitors may have a longer
operating history and greater financial, technical and other resources, enabling them to achieve
more efficient cost management. As a result, these competitors may be able to devote more
resources to the cost control, promotion and sale of their products. Competition could also have
an adverse impact on the demand for our aluminum products, which in turn affects our growth
and market share. We cannot assure you that we will continue to compete successfully in the
future. If we cannot keep up with other competitors in the market, our business, financial
condition and results of operations may be materially and adversely affected. Furthermore,
other alternatives to our products, such as magnesium alloy, fiberglass and secondary
aluminum, may become more economically attractive as global commodity prices shift. Such
an event could have a material adverse effect on the competitiveness of our business.
RISK FACTORS
–6 2–


--- page 73 ---
We are exposed to changes in current and expected demands of our electrolytic aluminum
and alumina products.
The demands for our electrolytic aluminum and alumina products are driven by their
applications in downstream markets, including 3C electronic products, lightweight automotive,
green energy, transportation, industry materials and construction industries. The prices of
electrolytic aluminum and alumina are determined by factors which are beyond our control. For
example, technological advancements, changes in laws and regulations and overall economic
conditions affect the demand for electrolytic aluminum and alumina. In addition, the demand
in these end markets relies on our customers’ ability to develop, produce and sell end products,
as well as the acceptance of these products by end customers. A decline in demand or activity
within these industries could reduce the purchases made by our customers, affecting our
business, results of operations and financial condition. In addition, failing to anticipate
industry trends in the end markets we serve could have a material and adverse effect on our
future prospects.
Our success relies on key management and other qualified personnel with specialized
skills.
Our success relies on our key management and other qualified personnel, as each of them
possesses specialized management and technical skills as well as experience in the electrolytic
aluminum industry. This includes expertise in finance, strategic business development and
sales and marketing, all of which are vital to our business’s success. If one or more of our key
management and other qualified personnel are unable or unwilling to continue their
employment with us, we may not be able to identify and recruit suitable replacements in a
timely manner. Furthermore, recruiting and retaining capable personnel, particularly
experienced engineers and technicians familiar with our production processes, is important to
maintain the quality of our products and improve our production processes. If we are unable
to retain or attract key management and qualified personnel, our business, financial condition
and results of operations may be materially and adversely affected.
Our performance depends on our relationship with employees. Any material deterioration
in labor relations, shortage of labor or material increase in labor costs may have a
material adverse effect on our business, financial condition and results of operations.
We believe that we have a good working relationship with our employees and have not
experienced any material work stoppages, strikes or other major labor problems during the
Track Record Period. There is no assurance that any of such events will not arise in the future.
Our performance is dependent upon our relationship with employees. To ensure the quality of
our product, we need to implement effective training programs to ensure consistently
high-quality performance by our employees. A deterioration in labor relations may result in a
decrease in employees’ quality of performance, customers’ dissatisfaction with our products
and loss of labor. Our labor costs in 2022, 2023, 2024 and the five months ended May 31, 2024
and 2025 amounted to RMB333.4 million, RMB309.5 million, RMB347.2 million, RMB142.4
million and RMB148.6 million, respectively, accounting for 2.9%, 2.7%, 3.2%, 3.4% and 2.6%
RISK FACTORS
–6 3–


--- page 74 ---
of our total cost of sales for the same respective periods. We may need to divert extra resources
and management’s attention to implement effective training programs for new labor to ensure
consistently high-quality performance and this could increase our labor costs. In addition, if we
cannot consistently provide attractive job opportunities, we may experience a potential
shortage of labor and we may be unable to find skilled employees on time, resulting in potential
delay in our production. As a result, any material deterioration in labor relations, shortage of
labor, or significant increase in labor costs may have a material adverse effect on our business,
financial condition and results of operations.
We recorded net current liabilities during the Track Record Period.
As of December 31, 2022, 2023, 2024 and May 31, 2025 and September 30, 2025, we
recorded net current liabilities of approximately RMB6,286.9 million, RMB2,640.2 million,
RMB4,954.0 million, RMB5,721.7 million and RMB6,774.6 million, respectively. See
“Financial Information — Liquidity and Capital Resources — Current Assets and Liabilities.”
We may record net current liabilities in the future. Having significant net current liabilities
could constrain our operational flexibility and adversely affect our ability to expand our
business and make necessary capital expenditures. There is no assurance that our operations
will generate sufficient cash inflow to finance all our activities and cover all our working
capital requirements. If we do not generate sufficient cash flow from our operations to meet our
present and future financial needs, we may need to rely on additional external financing for
funding. If adequate funds are not available, whether on satisfactory terms or at all, we may
be forced to delay or abandon our development and expansion plans, and our business,
financial condition and results of operations may be adversely affected.
We are subject to the risk of inventory price declines.
Our inventories consisted of raw materials, work-in-progress, finished goods and spare
parts and others. As of December 31, 2022, 2023, 2024 and May 31, 2025, our inventory
amounted to approximately RMB1,761.0 million, RMB1,255.1 million, RMB1,577.7 million
and RMB2,253.3 million, accounting for 18.7%, 17.3%, 41.7% and 43.5% of our current
assets, respectively. However, if market demand decreases unexpectedly, we might have
surplus inventories. We had write-down of inventories of RMB5.4 million in 2022. Due to
fluctuations in our raw materials, work-in-progress, finished goods and spare parts and others,
our inventories may be subject to impairment from time to time, which may materially and
adversely affect our financial condition and results of operations.
We are exposed to risks relating to warehousing and third-party logistics service
providers.
We engaged third-party warehousing and logistics service providers during the Track
Record Period to transport raw materials as well as finished goods by road and combined
sea-rail transportation. See “Business — Procurement and Supply Chain Management —
Warehousing and Logistics.” We had warehousing and logistics expenses of RMB611.6
million, RMB639.6 million, RMB735.2 million, RMB333.0 million and RMB276.7 million in
RISK FACTORS
–6 4–


--- page 75 ---
2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, respectively. A significant
disruption to the operation of the warehouses, whether as a result of natural disasters, public
health incidents, labor shortages, fires or other causes, or any unexpected and adverse changes
in the storage conditions of the warehouses, could disrupt our operations, which may cause
delay in product deliveries or even damage our products, ultimately leading to a loss of sales.
In addition, we may fail to find proper warehousing service providers in a timely manner, on
favorable terms, or at all. In such an event, we may be subject to the risk of increased
warehousing costs or disrupted operations. In addition, our dependence on third-party logistics
service providers could expose us to potential service disruptions or inefficiencies. If these
providers fail to meet their service obligations due to operational issues, financial difficulties
or other unforeseen circumstances, our ability to transport raw materials from suppliers or
deliver products to customers in a timely and cost-effective manner may be impacted, which
could cause a decline in product sales and loss of revenue. We are also subject to the risk of
increased logistics costs. Any of these events could have a material and adverse impact on our
business, financial condition and results of operations.
We may incur impairment losses on our intangible assets which could negatively affect
our financial condition and results of operations.
Our intangible assets primarily consisted of aluminum production quota, power
generation capacity indicators and computer software. We had intangible assets of RMB3,359.8
million, RMB3,288.5 million, RMB3,217.7 million and RMB3,187.9 million as of December
31, 2022, 2023, 2024 and the five months ended May 31, 2025, respectively. During the Track
Record Period, we did not record any impairment loss on our intangible assets. There is no
assurance that we will not incur impairment losses on our intangible assets. Any significant
impairment of our intangible assets could have a material adverse effect on our business,
financial condition and results of operations.
Any negative publicity and allegation involving us may damage our reputation and
adversely affect our business and results of operations.
We highly value our reputation to sustain and grow our business operations. However, we
are exposed to the risk that our employees, customers, suppliers or other business partners may
raise malicious harassment, complaints or allegations against us, our directors, senior
management or employees. Any negative publicity in any form of media following such
complaints or allegations, regardless of whether the court rules in our favor or not, may damage
our reputation. This could materially and adversely impact our business and results of
operations.
RISK FACTORS
–6 5–


--- page 76 ---
If the preferential tax treatments become unavailable, our results of operations and
financial condition may be adversely affected.
We currently benefit from certain preferential tax treatments granted by the PRC
government. During the Track Record Period, one of our subsidiaries was subject to the
applicable preferential income tax rate of 15%. The impact of preferential income tax rates
applicable to subsidiaries amounted to RMB90.8 million, RMB115.9 million, RMB153.7
million, RMB90.4 million and RMB71.6 million in 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, respectively. The tax effect of additional deductions on
environmental protection equipment expenditures amounted to RMB37.2 million, RMB11.6
million, RMB19.1 million, RMB8.0 million and nil in 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, respectively. See Note 11 of the Accountants’ Report in
Appendix I to this prospectus for details of our income tax expense. However, any expiration
or change of these preferential tax treatments could adversely affect our operating results. We
cannot assure you that the PRC policies on preferential tax treatments will remain unchanged
or that the current preferential tax treatments we enjoy will not be canceled. However, we
cannot assure you that we will continue to enjoy similar preferential tax treatment in the future.
If any of our subsidiaries ceases to be entitled to preferential tax treatment, this may lead to
an increase in our income tax expenses, which would adversely affect our results of operations.
If our customers, suppliers, other business partners or current or former employees
engage in illegal, fraudulent, improper or unethical conduct, such as bribery and
corruption, we may be subject to potential liability and negative publicity, and our
reputation as well as our business could be harmed.
We are exposed to the risk that our customers, suppliers, other business partners we have
contracted or current or former employees may engage in illegal, fraudulent, improper or
unethical conduct. Misconduct by these individuals and institutions could include intentional,
reckless and/or negligent conduct that violates the relevant laws and regulations. Such
misconduct could also involve fraud, corruption, bribery, tax evasion and other illegal
practices. There is no assurance that there will be no such misconduct, arising from actions
taken by business partners and current or former employees without our knowledge. We may
not be able to identify and deter misconduct by such foregoing persons, and the precautions we
take to detect and prevent such misconduct may not be effective in controlling unknown or
unmanaged risks or losses or in protecting us from governmental investigations or other actions
or lawsuits stemming from a failure to be in compliance with relevant laws or regulations. If
this occurs, we and/or our relevant business partners and current or former employees may be
subject to investigations, administrative, civil and criminal fines and penalties, collateral
consequences, remedial measures and legal expenses. If we are associated with potential
liabilities and negative publicity resulting from illegal, fraudulent, improper or unethical
conduct, or allegations of such conduct, by our employees and business partners, our brands
and reputation, business and results of operations will be affected.
RISK FACTORS
–6 6–


--- page 77 ---
Our bill discounting transactions during the Track Record Period may be subject to
penalties from the relevant regulatory authorities.
During the Track Record Period, certain of our subsidiaries had bill discounting
transactions with certain non-bank institutions who did not comply with the Discounter’s
Qualification Requirement. We have ceased all our Non-compliant Bill Discounting since
November 21, 2023. See “Business — Legal Proceedings and Compliance Matters —
Non-compliant Bill Discounting.” Although there are no explicit PRC laws and regulations to
impose administrative or criminal liability on us for these transactions that is without the
purpose to obtain funds by fraudulence, we cannot assure you that the relevant regulatory
authorities will not impose penalties on us retrospectively for the previous bill discounting.
Any such penalties could adversely affect our business, financial condition and results of
operations.
We may be subject to complaints, disputes and lawsuits in the ordinary course of our
business.
We may be subject to disputes and lawsuits during our business operation. These
proceedings could result in significant liabilities for us. In addition, we may also receive
complaints from other parties involved in our business operations, such as customers,
suppliers, joint venture parties, employees, logistics service providers, inspection service
providers, construction service providers, research institutes and organizations, bill issuers and
banks. These disputes could lead to legal proceedings against us and could potentially damage
our reputation, give rise to significant liabilities and divert our resources and management’s
attention. Additionally, compliance issues that arise during our operations may subject us to
administrative proceedings, resulting in unfavorable outcomes, liabilities and delays in our
production or product launch schedules. The outcomes of these legal proceedings are uncertain,
and any negative outcome could have a material adverse impact on our business, financial
condition and prospects.
Furthermore, there is a potential risk of product liability claims if our products cause any
damage due to defects. A successful product liability claim against us could require us to pay
significant damages. Defending against product liability claims, whether successful or not, can
be costly and time-consuming. As at the Latest Practicable Date, we had not been exposed to
any significant product liability claims which had material adverse impacts on our business
operations. We do not maintain any product liability insurance. If our products fail to meet the
required specifications or quality standards, our business could be materially and adversely
affected. We cannot assure you that we will not face product liability claims in the future. Such
claims, regardless of their merit, could generate negative publicity and have a material adverse
effect on the marketability of our products, our reputation and, ultimately, our business,
financial condition and results of operations.
RISK FACTORS
–6 7–


--- page 78 ---
We may not be able to protect our intellectual property rights or may be subject to
infringement claims of third parties’ intellectual property rights, which could harm our
ability to compete and our business operation.
Our success depends in part upon our intellectual proprietary rights and know-how.
However, we may not be able to adequately protect such intellectual proprietary rights. In
addition, any attempt to enforce our intellectual property rights, even if successful, could result
in costly and prolonged litigation, divert our management’s attention and adversely affect our
financial performance. Failure to adequately protect our intellectual property may materially
and adversely affect our results of operations as our competitors would be able to utilize such
property without having to incur the costs of developing it, thus potentially reducing our
relative profitability. Also, if we fail to effectively protect our brand name from inappropriate
use by third parties in ways that adversely affect our brand name, our reputation could suffer
damage, which in turn could have a material adverse effect on our business, financial condition
and results of operations. Furthermore, we may be subject to claims that our technology
infringes the intellectual property rights of other parties. Even without merit, such claims could
result in costly and prolonged litigation, divert management’s attention, damage our reputation
and materially and adversely affect our business, financial condition and results of operations.
Our business operation and project construction are subject to various permits, licenses,
approvals and/or qualifications and the loss of or failure to obtain or renew any or all of
these permits, licenses, approvals and/or qualifications may materially and adversely
affect our business, financial condition and results of operations.
To operate our business in the PRC, we need to obtain the necessary permits, licenses,
approvals and qualifications. We are required to obtain regulatory approvals for the annual
production quota or capacity for electrolytic aluminum as well as alumina and other related
types of products. Failure to obtain approval for our production may lead to administrative
penalties or other liabilities pursuant to relevant laws. In addition, we are required to obtain the
necessary approvals and other relevant permits from the relevant regulatory authorities for
project construction.
As of the Latest Practicable Date, two out of six of our thermal electricity generators are
in the process of obtaining such approvals from the relevant regulatory authorities, which
involve obtaining power generation capacity indicators, being included in the national plan and
obtaining project approval. Failure to obtain such approvals may result in administrative
penalties, including being ordered to cease operation of these generators and/or fines. As of the
Latest Practicable Date, we are in the process of obtaining approvals from the relevant
authorities for the acquisition of power generation capacity indicators. If the relevant
regulatory authorities introduce new laws and regulations, we may be required to obtain further
approvals or to meet other additional regulatory requirements. Failure to obtain the relevant
permits, approvals and others may materially and adversely affect our business, financial
condition and results of operations.
RISK FACTORS
–6 8–


--- page 79 ---
Our business and financial condition could be adversely affected by trade tariffs or other
trade barriers.
Recently, the U.S. has imposed tariffs, indicating the potential for further trade barriers.
Beginning in February 2025, a baseline 10% tariff was imposed on all imports from China,
followed by successive adjustments in March and April 2025. As of the date of this prospectus,
under the May 12 Geneva Economic Announcement jointly issued by the U.S. and China,
Chinese imports faced a 30% effective tariff rate down from an earlier peak of 145% in April
2025, with reciprocal tariffs suspended until November 10, 2025. The aforementioned tariff
policies have been rapidly evolving and subject to further negotiations among various
countries. We cannot predict how tariff policies in various countries may further evolve nor
anticipate any potential impacts of subsequent developments in such policies on our business.
In addition, despite little direct impact on the electrolytic aluminum industry in China, the
aggressive tariff policy imposed by the U.S., and even unofficial announcements on social
media or during public speeches by President Trump and other government officials, might
create uncertainty in the downstream market, thereby indirectly reducing the demand for
China’s upstream electrolytic aluminum products. See “Summary — Import Tariffs in the U.S.”
These developments could have a material adverse effect on global economic conditions and
the stability of global financial markets, which may affect our ability to obtain financing and
the cost at which we obtain financing. Any of these factors could have an adverse effect on our
business, financial condition and results of operations.
If we fail to maintain effective internal controls, our business, financial results and
reputation could be materially and adversely affected.
We have put in place a set of internal control and risk management procedures to address
various potential operational, financial, legal and market risks identified in relation to our
operations, including our use of bank bills. See “Business — Risk Management and Internal
Control.” We need to maintain effective internal controls during our business operations. As we
continue to expand, we need to modify and improve our financial and managerial controls,
reporting systems and procedures and other internal controls and compliance procedures to
meet our evolving business needs. If we are unable to improve our internal controls, systems
and procedures, they may become ineffective and adversely affect our business, financial
results and reputation. Our efforts in improving our internal control system may not eliminate
all risks. If we are not successful in discovering and eliminating weaknesses in our internal
controls, our ability to effectively manage our business, financial results and reputation may
be affected.
Failure to pay social insurance and housing provident funds for our employees in
accordance with applicable laws and regulations may subject us to penalties.
Pursuant to the PRC laws and regulations, we are required to participate in the employee
social welfare plan administered by local governments. Such plan consists of pension
insurance, medical insurance, work-related injury insurance, maternity insurance,
unemployment insurance and housing provident fund. The amount we are required to
RISK FACTORS
–6 9–


--- page 80 ---
contribute for each of our employees under such plan should be calculated based on the actual
income of our employees, together with the minimum and maximum level as from time to time
prescribed by national laws and regulations and local authorities. Any failure to make timely
and adequate social welfare contributions for our employees may trigger an order of correction
from competent authorities requiring the employer to make up the full amount of such overdue
social welfare contribution within a specified period of time, and the competent authority may
further impose fines or penalties. During the Track Record Period, we did not pay social
insurance and housing provident fund contributions in full for our employees based on the
actual income of the relevant employees. Furthermore, according to the Interpretation (II) of
the Supreme People’s Court on issues Concerning the Application of Law in the Trial of Labor
Dispute Cases (༆ᙑ(ɚ)) (the “ New
Judicial Interpretation ”), which became effective on September 1, 2025, where the employer
and the employee agree, or the employee promises the employer, that there is no need to make
social insurance contributions, the people’s court shall determine that such agreement or
promise is invalid. See “Business — Legal Proceedings and Compliance Matters — Social
Insurance and Housing Provident Funds” for details. There can be no assurance that the
competent government authorities will not require us to settle the outstanding amount within
the specified time limit or impose late payment penalties on us, which may adversely affect our
financial position and results of operations.
We may not have sufficient insurance to cover our business risks.
Risks associated with our production include damage to production facilities,
environmental pollution, transportation damages and delays, industrial damages and risks
posed by natural disasters, any or all of which may result in losses to us. Our principal
insurance policies primarily include pension insurance, medical insurance, unemployment
insurance, employment injury insurance and employer’s liability insurance, liability insurance
of safe production and vehicle insurance, which we believe cover the major risks in our daily
operations. Our insurance plans align with our needs. We may be unable to obtain or maintain
insurance policies covering risks associated with natural disasters, business interruptions or
environmental damages arising from our production activities. Therefore, if we incur any loss
which is not covered by our insurance policies, or the compensated amount is significantly less
than our actual loss, our financial condition and results of operations could be adversely
affected.
Our performance may suffer from business disruptions associated with information
technology, system implementations or catastrophic losses affecting our IT systems.
Information technology systems are essential to competitiveness and efficient operations.
Our information systems may be vulnerable to damage or interruption from factors beyond our
control, including computer viruses, acts of hacking, vandalism, power outages, fire or other
natural disasters. Any significant failure of our information technology system, or loss or
leakage of confidential information could result in transaction errors, process inefficiencies
and loss of sales, which could further harm our reputation and materially and adversely affect
our business, financial condition and results of operations.
RISK FACTORS
–7 0–


--- page 81 ---
We are subject to national and local environmental, health and safety policies, laws and
regulations. Any material deficiencies in our efforts regarding environment protection
and occupational safety may result in additional costs and damage our reputation.
As part of our normal operations, we discharge pollutants such as dust, sulfur dioxide,
carbon monoxide and other chemicals as a result of our production. Our emissions are mainly
waste water, exhaust gas and solid waste generated from power plants, production bases and
daily activities in residential areas. We are required to comply with national and local
environmental, health and safety policies, laws and regulations. These policies, laws and
regulations may include restrictions or guidelines for companies with high energy consumption
and high emissions, proposed plans for production reductions, or requirements to adopt
energy-efficient machinery and equipment or upgrade existing ones to reduce energy
consumption and carbon emissions. See “Regulatory Overview — PRC Laws, Regulations and
Policy Documents Related to the Electrolytic Aluminum and Alumina Industries — Energy
Conservation and Environmental Protection.” Non-compliance with such laws and regulations
would result in fines or punishments from the governmental authorities against us and damage
our reputation. In addition, we participate in activities that could be risky and hazardous. This
includes working with high-temperature materials and settings, using strong electric currents
and managing dangerous products. Due to these activities, we face various dangers, such as
leaks from hot liquids, equipment breakdowns, industrial incidents, fires and explosions. These
hazards can lead to severe outcomes, including personal injuries or fatalities, damage to
property or production facilities and environmental contamination.
As the PRC government increases its awareness of environmental protection and
occupational safety measures, we expect to be subject to additional requirements in the future.
In addition, we expect that compliance with additional requirements in the future will require
additional capital expenditures and result in higher operating costs, which may materially and
adversely affect our business, financial condition and results of operations. Any failure by us
to comply with the national and local environmental, health and safety polices, laws and
regulations such as those controlling the use of, or adequately restricting the discharge of,
hazardous substances and emissions, limiting the consumption of energy or maintaining
workplace safety, could subject us to potential significant monetary damages, fines or
administrative, civil or criminal liabilities, which could disrupt, limit or even result in the
suspension of our operations.
Any natural disasters, health epidemics and other outbreaks could significantly disrupt
our operations.
Our business could be materially and adversely affected by natural disasters, such as
snowstorms, earthquakes, fires or floods, outbreaks of a widespread health epidemic or
pandemic, or other events such as wars, acts of terrorism, environmental accidents, power
shortages or communication interruptions. These events could cause damage or disruptions to
commerce and the global economy, affecting the aluminum prices and our business, as we are
sensitive to fluctuations in aluminum prices. Such events could make the demand for aluminum
more volatile, make it difficult for us to produce or deliver products to our customers or to
RISK FACTORS
–7 1–


--- page 82 ---
receive raw materials from our suppliers. Our revenue and profitability could be materially
reduced if a natural disaster, health epidemic, pandemic or other outbreak harms the global or
PRC economy in general. In the event of natural disasters, health epidemics and other
outbreaks, we could suffer substantial losses, require long recovery time and experience
expenditure in order to resume operations.
RISKS RELATING TO DOING BUSINESS IN THE JURISDICTIONS WHERE WE
OPERATE
Failure to respond to changes in the economic or social conditions or government policies
in the jurisdictions where we operate, as well as the global economy, could affect our
business, financial condition and results of operations.
A substantial proportion of our business operations are conducted in the PRC. In addition,
we plan to operate our business in Saudi Arabia. See “Business — Our Strategies —
Proactively Expand into Overseas Markets and Increase Overseas Production Capacities as a
Response to the Belt and Road Initiative (the “BRI”).” Accordingly, our business, financial
condition and results of operations are subject to economic and social conditions and
government policies in these markets.
Relevant factors of the global economy that could affect our business include consumer,
corporate and government spending, business investment, level of economic development and
resource allocation. Nevertheless, new laws, rules and regulations relevant to our businesses
may be introduced in the future, or the current applicable regulations may otherwise be
amended or replaced, requiring us to conduct business with additional oversight and regulatory
compliance. In particular, any change in the applicable laws, rules and regulations could
require us to obtain additional licenses, permits, approvals or certificates, increase our
operational expenses or result in the invalidation of licenses, permits, approvals or certificates
we currently have.
Newly promulgated laws and regulations may be subject to further variations in
application, interpretation and implementation. As a result, we may not be aware in a timely
manner that we have violated certain policies and rules. There can be no assurance that we can
adapt to the evolving regulatory environment swiftly enough or in a cost-efficient manner,
failure of which may adversely affect our operations and lead to substantial compliance costs.
Meanwhile, we may need to implement changes in our facilities, equipment, personnel or
services to comply with the latest laws and regulations, and such may increase our capital
expenditures and operating expenses, thereby adversely affecting our business, financial
condition and results of operations.
RISK FACTORS
–7 2–


--- page 83 ---
The approval, filing or other requirements of the CSRC or other PRC government
authorities may be required under PRC laws and we cannot predict whether we will be
able to complete such procedures for our Future Offerings.
On July 6, 2021, PRC government authorities issued Opinions on Strictly Cracking Down
on Illegal Securities Activities in Accordance with the Law (ݺج
จԈ). These opinions enhanced administration and supervision on overseas listing of
China-based companies and proposed to take effective measures in relation to these companies,
such as promoting the construction of relevant regulatory systems to deal with the risks and
incidents faced by PRC-based overseas-listed companies.
On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas
Securities Offering and Listing by Domestic Companies ( ྤʫΆุྤ̮೯БᗇՎձɪ̹၍ଣ
) (the “Trial Measures”) and five supporting guidelines, which came into effect on
March 31, 2023. The Trial Measures require that where a domestic company seeks overseas
securities issuance and listing, the issuer shall file with the CSRC in accordance with the Trial
Measures. If an issuer procures an overseas initial public offering or listing, it shall file with
the CSRC within three business days after submitting application documents for overseas
securities issuance and listing. We will file with CSRC within a specific time limit as required
by the Trial Measures for Overseas Listing. See “Regulatory Overview — Regulations Related
to Overseas Securities Offering and Listing by Domestic Companies” in this prospectus.
However, if we fail to complete the filing procedure or the filing documents submitted contain
any misrepresentation, misleading statement or material omission, our ability to complete the
proposed offering may be restricted. Additionally, we may be subject to orders to rectify,
warnings and fines, and our controlling shareholder, actual controller, the person directly in
charge and other directly responsible persons may also be subject to fines. Any such events
could materially and adversely impact our business and results of operations.
Y ou may have limited recourse in effecting service of legal process or enforcing foreign
judgments against us, our Directors and our senior management.
We are an exempted company incorporated in the Cayman Islands with limited liability,
with substantially all of our assets located in mainland China. In addition, all of our Directors
and senior management currently reside in China. As a result, it may be difficult for our
investors to directly effect service of legal process within Hong Kong or elsewhere outside
China upon us or these persons, or to bring an action in Hong Kong against us or these
individuals. Moreover, China only has treaties with limited number of other jurisdictions that
provide for the reciprocal recognition and enforcement of judicial rulings and awards.
RISK FACTORS
–7 3–


--- page 84 ---
On July 14, 2006, the Supreme People’s Court of the PRC and the Government of the
Hong Kong Special Administrative Region signed an Arrangement on Mutual Recognition and
Enforcement of Judgements in Civil and Commercial Matters by the Courts of the Mainland
China and of the Hong Kong Special Administrative Region Pursuant to Agreed Jurisdiction by
Parties Concerned (ʝႩ̙ձੂБ຅ԫɛ՘ᙄ
τર) (the “2006 Arrangement”). According to such arrangement, a
party with a final judgment rendered by a Hong Kong court requiring payment of money in a
civil and commercial case according to a choice of court agreement in writing may apply for
recognition and enforcement of the judgment in China, and vice versa. However, it is subject
to the parties in the dispute agreeing to enter into a choice of court agreement in writing under
the 2006 Arrangement.
On January 18, 2019, the Supreme People’s Court of China and Hong Kong entered into
the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and
Commercial Matters by the Courts of the Mainland and of the Hong Kong Special
Administrative Region (τ
ર) (the “2019 Arrangement”). The 2019 Arrangement became effective on January 29, 2024
after the Supreme People’s Court promulgated judicial interpretations and relevant procedures
were completed in Hong Kong. The 2019 Arrangement supersedes the 2006 Arrangement and
afford greater clarity and certainty for reciprocal recognition and enforcement of judgments in
civil and commercial matters. The 2006 Arrangement will remain applicable to a “choice of
court agreement in writing” entered into before the 2019 Arrangement taking effect.
Our payment of dividends is subject to restrictions under applicable laws and regulations.
As our Company is a holding company, we rely on dividends from our subsidiaries for
cash requirements, including servicing any debts our Group may incur. Under the laws of the
PRC, dividends may be paid only out of our PRC subsidiaries’ distributable profits.
Distributable profits are defined as profits after taxes as determined under PRC GAAP less any
recovery of accumulated losses and appropriations to statutory and other reserves that we are
required to make. As a result, our PRC subsidiaries may not have sufficient, if any,
distributable profits to distribute dividends or other payments to our Company. Any
distributable profits not distributed in a given period are retained and available for distribution
in subsequent periods. Moreover, because the calculation of distributable profits under PRC
GAAP is different from the calculation under IFRSs in certain respects, our PRC subsidiaries
may not have distributable profits as determined under PRC GAAP , even if they have profits
for that period as determined under IFRSs, or vice versa. Accordingly, we may not receive
sufficient distributions from our subsidiaries. Failure by our subsidiaries to pay dividends to
us could have a material adverse impact on our cash flows and our ability to make dividend
distributions to our Shareholders in the future, including those periods in which our financial
statements indicate that our operations have been profitable.
RISK FACTORS
–7 4–


--- page 85 ---
Fluctuations in the value of the Renminbi and other currencies may have a material
adverse impact on your investment.
Fluctuations in the exchange rate of Renminbi against Hong Kong dollar, U.S. dollar and
other foreign currencies are affected by, among other things, the changes in China’s and
international political and economic conditions. We recorded net foreign exchange losses of
RMB0.1 million, RMB11 thousand, RMB0.3 million, nil and net foreign exchange gains of
RMB0.5 million in 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025,
respectively. The proceeds from the Global Offering will be denominated in Hong Kong
dollars. As a result, any appreciation of Renminbi against U.S. dollar, Hong Kong dollar or any
other foreign currencies may result in a decrease in the value of our foreign currency-
denominated assets and our proceeds from the Global Offering. Conversely, any depreciation
of Renminbi may adversely affect the value of, and any dividends payable on our Shares in
foreign currencies. There are limited instruments available for us to reduce our foreign
currency risk exposure at reasonable cost in China, and we have not utilized, and may not in
the future utilize, any such instrument. All of these factors could materially and adversely
affect our business, financial condition and results of operations, and could reduce the value
of, and dividends payable on, our Shares in foreign currency terms.
The remittance of Renminbi into and out of the PRC and government regulations on
currency conversion may affect our ability to pay dividends and other obligations, and
affect the value of your investment.
The PRC government requires the convertibility of Renminbi into foreign currencies must
be subject to certain regulatory procedures, and under certain circumstances, remittances out
of China are also subject to certain regulatory procedures. We receive all of our revenue in
Renminbi. We may convert a portion of our revenue into other currencies to meet our foreign
currency obligations. Shortages in the availability of foreign currency may affect our ability to
remit sufficient foreign currency or otherwise satisfy our foreign currency-denominated
obligations.
Under the existing PRC foreign exchange regulations, payments of current account items,
including profit distributions, interest payments and trade and service-related foreign exchange
transactions, can be made in foreign currencies without prior SAFE approval by complying
with certain procedural requirements. However, approval from or registration with competent
government authorities is required where Renminbi is to be converted into foreign currency
and remitted out of China to pay capital expenses such as the repayment of loans denominated
in foreign currencies. If we are not able to obtain sufficient foreign currencies to satisfy our
foreign currency demands due to regulatory procedures, we may not be able to pay dividends
in foreign currencies to our Shareholders.
RISK FACTORS
–7 5–


--- page 86 ---
Our operations are subject to PRC tax laws and regulations.
We are subject to periodic examinations on fulfillment of our tax obligation under the
PRC tax laws and regulations by PRC tax authorities. The PRC tax laws and regulations might
be subject to interpretations and adjustments by relevant authorities. We cannot assure you that
future examinations by PRC tax authorities would not result in fines, other penalties or actions
that could have an impact on our future prospects, business, results of operations and financial
condition.
We may be classified as a “PRC resident enterprise” for PRC enterprise income tax
purposes, and our global income might be subject to 25% PRC income tax.
We are an exempted company incorporated in the Cayman Islands with limited liability.
We conduct our business through our PRC subsidiaries. Under the Enterprise Income Tax Law
of the PRC (جthe “EIT Law”), an enterprise established outside
China with “de facto management bodies” within China is considered a “resident enterprise”,
and thus will be treated in a manner similar to a Chinese enterprise for PRC EIT purposes and
be subject to an EIT at the rate of 25% on their global income. The implementing rules of the
EIT Law define “de facto management bodies” as “management bodies that exercise
substantial and overall management and control over the production and operations, personnel,
accounting and properties” of the enterprise.
On April 22, 2009, the SA T released the Notice Regarding the Determination of
Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the
Basis of De Facto Management Bodies (ΆุԱኽྼყ၍ଣዚ࿴ᅺ๟
, “Circular 82”), as amended on December 29, 2017, which
sets out the standards and procedures for determining whether the “de facto management body”
of an enterprise registered outside of China and controlled by Chinese enterprises or Chinese
enterprise groups is located within China. Under Circular 82, a foreign enterprise controlled by
a Chinese enterprise or Chinese enterprise group is considered as a PRC resident enterprise if
all of the conditions apply. The conditions are the following: (i) senior management personnel
and departments that are responsible for daily production, operation and management are
located mainly within China; (ii) financial and personnel decisions are subject to determination
or approval by bodies or persons in China; (iii) key properties, accounting books, the company
seal and minutes of board meetings and shareholders’ meetings are located or kept within
China; and (iv) at least half of the directors with voting rights or senior management reside
within China. The SA T has subsequently provided further guidance on the implementation of
Circular 82.
The tax resident status of an enterprise is subject to determination by the Chinese tax
authorities. As all of the operational management of our Company is currently based in China,
we may be deemed to be “PRC resident enterprises” for the purpose of the EIT Law. In the
circumstance that our Company is determined as a PRC resident enterprise by the Chinese tax
authorities, our global income will be subject to income tax at a uniform rate of 25%.
Nonetheless, it remains subject to future interpretation as to what type of enterprise would be
deemed a “PRC resident enterprise” for such purposes. The EIT on our subsidiaries’ global
income could significantly increase our tax burden and affect our cash flows and profitability.
RISK FACTORS
–7 6–


--- page 87 ---
Y ou may be subject to PRC withholding tax on dividends from us and PRC income tax on
any gain realized on the transfer of our Shares.
Under the EIT Law and its implementation rules, subject to any applicable tax treaty or
similar arrangement between China and your jurisdiction of residence that provides otherwise,
PRC withholding tax at a rate of 10% is normally applicable to dividends from a PRC source
paid to investors that are “non-resident enterprises” which do not have an establishment or
place of business in China, or which have such establishment or place of business but whose
relevant income is not effectively connected with the establishment or place of business. Any
gain realized on the transfer of shares by such investors is generally subject to 10% PRC
income tax if such gain is regarded as income derived from sources within China.
Under the PRC Individual Income Tax law (جand its
implementation rules, dividends from sources within China paid to foreign individual investors
who are not PRC residents are generally subject to a PRC withholding tax at a rate of 20% and
gains from PRC sources realized by such investors on the transfer of shares are generally
subject to PRC income tax at a rate of 20% for individuals. Any PRC tax may be reduced or
exempted under applicable tax treaties or similar arrangements. If we are treated as a PRC
resident enterprise, dividends we pay with respect to our Shares, or the gain realized from the
transfer of our Shares, may be treated as income derived from sources within China and, as a
result, be subject to the PRC income taxes described above. It is unclear whether non-Chinese
Shareholders of our Company would be able to claim the benefits of any tax treaties between
their country of tax residence and China and if we are required under the EIT Law to withhold
Chinese income tax on our dividends payable to our Shareholders, or if our Shareholders are
required to pay Chinese income tax on the transfer of the Shares, the returns on our
Shareholders’ investment in our Shares will be reduced. If PRC income tax is imposed on gains
realized through the transfer of our Shares or on dividends paid to our non-resident investors,
the value of your investment in our Shares may be materially and adversely affected.
Regulation of loans to and direct investments in PRC entities by offshore holding
companies may delay or prevent us from using the proceeds of the Global Offering to
make loans or additional capital contributions to our PRC subsidiaries.
Any loans we provided to our PRC subsidiaries, either as shareholder loans or as an
increase in registered capital are subject to PRC regulations and must be registered with
relevant PRC governmental authorities. In addition, the increasing of capital contributions to
our PRC subsidiaries is subject to the registration with relevant government authorities in
China. As of the Latest Practicable Date, no loans have been provided to our PRC subsidiaries
by offshore holding companies. For future loans provided to our PRC subsidiaries by offshore
holding companies, if any, we may not be able to complete the necessary reporting or
registrations on time, or at all, for future capital contributions or foreign loans to our PRC
subsidiaries. If we fail to complete such reporting or registration, our ability to use the
proceeds of this Offering and to capitalize our PRC operations may be adversely affected,
which could materially and adversely affect our liquidity and our ability to fund and expand
our business.
RISK FACTORS
–7 7–


--- page 88 ---
There is uncertainty with respect to the indirect transfers of equity interests in our
Chinese resident enterprises through transfers made by our Shareholders or our
non-Chinese holding companies.
On February 3, 2015, the SA T promulgated the Public Announcement on Several Issues
Concerning Enterprise Income Tax for Indirect Transfer of Assets by Non-Resident Enterprises
(ʮѓ) (“Circular 7”),
which replaced certain provisions in the Notice on Strengthening the Administration of
Enterprise Income Tax on Equity Transfers of Non-resident Enterprises (̋
ٝCircular 698”). Circular 7 provided
comprehensive guidelines relating to, and also heightened the Chinese tax authorities’ scrutiny
over, indirect transfers by a non-resident enterprise of assets (including equity interests) of a
Chinese resident enterprise (“Chinese Taxable Assets”). For example, Circular 7 specifies that
where a non-resident enterprise transfers Chinese Taxable Assets indirectly by disposing of
equity interests in an overseas holding company directly or indirectly holding such Chinese
Taxable Assets, and such transfer is deemed for the purpose of avoiding EIT payment
obligations and without any other bona fide commercial purpose, the transfer may be
reclassified by the Chinese tax authorities as a direct transfer of Chinese Taxable Assets.
Although Circular 7 contains certain exemptions, it is unclear whether any exemptions
under Circular 7 will be applicable to the transfer of our Shares or to any future acquisition by
us outside of China involving Chinese Taxable Assets, or whether the Chinese tax authorities
will classify such transaction by applying Circular 7. Therefore, the Chinese tax authorities
may deem any transfer of our Shares by our Shareholders that are non-resident enterprises, or
any future acquisitions by us outside of China involving Chinese Taxable Assets, to be subject
to the foregoing regulations, which may subject our Shareholders or us to additional Chinese
tax reporting obligations or tax liabilities.
RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for our Shares, and the liquidity and market price
of our Shares may be volatile.
Prior to completion of the Global Offering, there has been no public market for our
Shares. We have applied to the Stock Exchange for the listing of, and permission to deal in,
our Shares. The liquidity and market price of our Shares may be volatile as we cannot assure
you that an active and liquid trading market for our Shares will be developed or be maintained
after the Global Offering. The market price of our Shares could vary significantly as a result
of a number of factors, some of which are beyond our control. The market price of our Shares
may drop below the Offer Price at any time after completion of the Global Offering. In the
event of a drop in the market price of our Shares, you could lose a substantial part or all of your
investment in our Shares.
RISK FACTORS
–7 8–


--- page 89 ---
The trading price of our Shares may be volatile, which could result in substantial losses
to you.
The trading price of our Shares could fluctuate widely in response to factors beyond our
control, including the general market conditions of securities in Hong Kong and elsewhere in
the world. The business and performance and the market price of the shares of other companies
engaging in similar business may also affect the price and trading volume of our Shares. In
addition to market and industry factors, the price and trading volume of our Shares may be
highly volatile for specific business reasons, such as fluctuations in our revenue, earnings, cash
flows and investments, changes in our pricing policies and expenditures, regulatory
developments, demand for our services, unexpected business interruptions resulting from
natural disasters or power shortages, our ability to obtain or maintain regulatory approval for
our operations, 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 and fluctuations in trading volume in the past, and it is possible that our Shares may
be subject to fluctuations in price and volume not directly related to our performance but
related to the overall political and economic conditions in Hong Kong, the PRC or elsewhere
in the world.
Y ou will incur immediate dilution and may experience further dilution in the future.
The Offer Price is higher than the net tangible asset value per Share immediately prior to
the Global Offering. Therefore, purchasers of the Offer Shares in the Global Offering will
experience an immediate dilution in pro forma consolidated net tangible asset value upon such
purchases. There can be no assurance that if we were to immediately liquidate after the Global
Offering, any assets will be distributed to Shareholders after the payment of creditors’ claims.
To expand our business, we may consider offering and issuing additional Shares in the future.
Purchasers of the Offer Shares may experience dilution in the net tangible asset value per Share
of their Shares if we issue additional Shares in the future at a price which is lower than the net
tangible asset value per Share at that time.
Future issues, offers, or sale of our Shares may adversely affect the prevailing market
price of our Shares and our ability to raise future capital at a favorable time and price.
The market price of our Shares could decline as a result of future sales of a substantial
number of our Shares or other securities relating to our Shares in the public market, or the
issuance of new shares or other securities, or the perception that such sales or issuances may
occur. Future sales, or anticipated sales, of substantial amounts of our securities, including any
future offerings, could also materially and adversely affect our ability to raise capital at a
favorable time and price which we deem appropriate. Moreover, our Shareholders may
experience dilution in their holdings if we issue more securities in the future. New shares or
shares-linked securities issued by us may also confer rights and privileges that take priority
over those conferred by the Shares.
RISK FACTORS
–7 9–


--- page 90 ---
We may be unable to declare dividends on our Shares in the future.
No dividend was declared or paid by our Company in 2022, 2023 and the five months
ended May 31, 2025. In 2024, one of our subsidiaries declared and paid a cash dividend of
RMB330.0 million. Our historical dividends may not be indicative of our future dividend
policy. There can be no assurance that future dividends will be declared or paid. We cannot
guarantee when and in what form dividends will be paid on our Shares following the Global
Offering. Any future determination to pay dividends will be made at the discretion of our Board
of Directors and may be based on a number of factors, including our future operations and
earnings, capital requirements and surplus, general financial condition, contractual restrictions
and other factors that the Board of Directors may deem relevant. We may not have sufficient
or any profits to enable us to make dividend distributions to our Shareholders in the future,
even if our financial statements indicate that our operations have been profitable. For details,
see “Financial Information — Dividends.”
If securities or industry analysts do not publish research reports about our business, or
if they adversely change their recommendations regarding our Shares, the market price
and trading volume of our Shares may decline.
The trading market of our Shares may be influenced by research reports that industry or
securities analysts publish about us or our business. If one or more analysts, who cover us,
downgrade our Shares or publish negative opinions about us, the market price of our Shares
would likely decline regardless of the accuracy of the information. If one or more of these
analysts cease to cover us or fail to regularly publish reports on us, we could lose our visibility
in the financial markets, which, in turn, could cause the market price or trading volume of our
Shares to decline.
Investors may experience difficulties in enforcing Shareholder rights.
We are an exempted company incorporated in the Cayman Islands with limited liability,
and the laws of the Cayman Islands differ in some respects from those of Hong Kong or other
jurisdictions where investors may be located. The rights of our Shareholders to take legal
actions against us and/or our Directors, actions by minority Shareholders and the fiduciary
duties of our Directors to us under Cayman Islands law are to a large extent governed by the
common law of the Cayman Islands. The common law of the Cayman Islands is derived in part
from comparatively limited judicial precedents in the Cayman Islands, and from English
common law, which has persuasive but not binding authority on a court in the Cayman Islands.
The rights of our Shareholders and the fiduciary responsibilities of our Directors under the
Cayman Islands law may not be as clearly established as they would be under statutes or
judicial precedents in Hong Kong, the United States or other jurisdictions where investors may
reside. In particular, the Cayman Islands has a less developed body of securities law than in
Hong Kong. As a result of all the above, our Shareholders may have more difficulty in
exercising their rights in the face of actions taken by our executive officers, Directors or
Controlling Shareholders than they would as shareholders of a Hong Kong company, a United
States company or companies incorporated in other jurisdictions.
RISK FACTORS
–8 0–


--- page 91 ---
Certain facts, forecasts and other statistics contained in this prospectus are derived from
various official government sources.
Certain facts, forecasts and statistics in this prospectus, particularly the section headed
“Industry Overview,” relating to the PRC and global economy and the industry in which we
operate are obtained from official government publications that we believe are reliable. Our
Directors believe that the sources of the information are appropriate and have taken reasonable
care in extracting and reproducing such information. They do not believe that such information
is false or misleading or that any material fact has been omitted that would render such
information false or misleading. The information from official government sources has not
been independently verified by our Group, the Joint Sponsors or any other party involved in
the Global Offering and no representation is given as to its accuracy or completeness. Y ou
should consider how much weight or importance such facts or statistics carry and should not
place undue reliance on them.
Our Controlling Shareholders have a substantial influence over our Company, and their
interests may not be aligned with the interests of our other Shareholders.
Our Controlling Shareholders have substantial influence over our business, including
matters relating to our management, policies and decisions regarding mergers, expansion plans,
consolidations and sales of all or substantially all of our assets, election of Directors and other
significant corporate actions. Immediately following the completion of the Global Offering
(assuming the Over allotment Option is not exercised), our Controlling Shareholders will be
entitled to control the exercise of 75% voting rights of the enlarged issued share capital of our
Company. This concentration of ownership may discourage, delay, or prevent a change in
control of our Company, potentially depriving other shareholders of the opportunity to receive
a premium for their Shares in the event of a sale. It could also potentially lower the price of
our Shares. These circumstances may occur even if opposed by other shareholders.
Additionally, the interests of our Controlling Shareholders may differ from those of our other
shareholders. It is possible that our Controlling Shareholders may use their significant
influence to engage in transactions or make decisions that conflict with the best interests of our
other shareholders.
Forward-looking statements contained in this prospectus are subject to risks and
uncertainties.
This prospectus contains certain statements and information that are “forward-looking”
and uses forward-looking terminology such as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “may,” “ought to,” “should” or “will” or similar terms. Those statements include,
among other things, the discussion of our growth strategy and expectations concerning our
future operations, liquidity and capital resources. Investors in our Shares are cautioned that
reliance on any forward-looking statements 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. The uncertainties in this regard
include, but are not limited to, those identified in this section, many of which are not within
RISK FACTORS
–8 1–


--- page 92 ---
our control. In light of these and other uncertainties, the inclusion of forward-looking
statements in this prospectus should not be regarded as representations by us that our plans or
objectives will be achieved and investors should not place undue reliance on such forward-
looking statements. We do not undertake any obligation to update publicly or release any
revisions of any forward-looking statements, whether as a result of new information, future
events or otherwise. See “Forward-looking Statements.”
Y ou should read the entire prospectus carefully and should not rely on any information
contained in press articles or other media regarding us and the Global Offering.
Y ou are strongly advised to read the entire prospectus carefully and are cautioned against
placing any reliance on the information in any press article or any other media coverage which
contains information not disclosed or not consistent with the information included in this
prospectus.
Prior to the completion of the Global Offering, there may be press and media coverage
regarding our Group and the Global Offering. Our Directors would like to emphasize to
prospective investors that we do not accept any responsibility for the accuracy or completeness
of such information, and such information is not sourced from or authorized by our Directors
or our management team. Our Directors make no representation as to the appropriateness,
accuracy, completeness and reliability of any information or the fairness or appropriateness of
any forecast, view or opinion expressed by the press or other media regarding our Group or our
Shares. In making decisions as to whether to invest in our Shares, prospective investors should
rely only on the financial, operational and other information included in this prospectus. By
applying to purchase our Shares in the Global Offering, you will be deemed to have agreed that
you will not rely on any information other than that contained in this prospectus and the Global
Offering. To the extent that any such information is inconsistent or conflicts with the
information contained in this prospectus, we disclaim responsibility for it and you should not
rely on such information.
RISK FACTORS
–8 2–


--- page 93 ---
In preparation for the Global Offering, we have sought the following waivers from strict
compliance with certain provisions of the Listing Rules.
W AIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rule 8.12 of the Listing Rules, our Company must have sufficient
management presence in Hong Kong, which normally means that at least two executive
Directors must be ordinarily resident in Hong Kong. Given that (i) our core business operations
are principally located, managed and conducted in the PRC and our Company’s head office is
situated in the PRC; (ii) our executive Directors and senior management team principally
reside in the PRC; and (iii) the management and operation of our Company have mainly been
under the supervision of our executive Directors and senior management, who are principally
responsible for the overall management, corporate strategy, planning, business development
and control of the Group’s businesses and it is important for them to remain in close proximity
to the Group’s operation located in the PRC, our Company considers that it would be more
practical for its executive Directors and senior management to remain ordinarily resident in the
PRC where the Group has substantial operations. For the above reasons, we do not have, and
do not contemplate in the foreseeable future that we will have sufficient management presence
in Hong Kong for the purpose of satisfying the requirement under Rule 8.12 of the Listing
Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted us, a waiver from strict compliance with Rule 8.12 of the Listing Rules. We will ensure
that there are adequate and efficient arrangements to achieve regular and effective
communication between us and the Stock Exchange as well as compliance with the Listing
Rules by way of the following arrangements:
1. Authorized representatives: we have appointed Mr. Zhang Jianxiang (“ Mr. Zhang ”),
an executive Director, deputy general manager and joint company secretary of our
Company and Ms. Wong Hoi Ting (“ Ms. Wong ”), our joint company secretary, as
the authorized representatives (the “ Authorized Representatives ”) for the purpose
of Rule 3.05 of the Listing Rules. The Authorized Representatives will act as our
principal channel of communication with the Stock Exchange and would be readily
contactable by phone and email to deal promptly with enquiries from the Stock
Exchange. Mr. Zhang ordinarily resides in the PRC, possesses valid travel
documents, and is able to renew such travel documents when they expire in order to
visit Hong Kong. Ms. Wong ordinarily resides in Hong Kong. Accordingly, the
Authorized Representatives will be able to meet with the relevant members of the
Stock Exchange to discuss any matters in relation to our Company within a
reasonable period of time. See the section headed “Corporate Information” in this
prospectus for more information about our Authorized Representatives.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
–8 3–


--- page 94 ---
2. Directors: to facilitate communication with the Stock Exchange, we have provided
the Authorized Representatives and the Stock Exchange with the contact details of
each of our Directors (i.e. mobile phone number, office phone number, email address
and fax number (as applicable)). In the event that any Director expects to travel or
otherwise be out of office, he or she will provide the phone number of the place of
his/her accommodation to the Authorized Representatives, so that the Authorized
Representatives would be able to contact all our Directors promptly at all times as
and when the Hong Kong Stock Exchange wishes to contact our Directors on any
matters. To the best of our knowledge and information, each Director who is not
ordinarily resident in Hong Kong possesses or can apply for valid travel documents
to visit Hong Kong and can meet with the Stock Exchange within a reasonable
period after requested by the Stock Exchange.
3. Compliance advisor: we have appointed Gram Capital Limited as our Compliance
Advisor (the “ Compliance Advisor ”) in compliance with Rule 3A.19 of the Listing
Rules. The Compliance Advisor will, among other things and in addition to the
Authorized Representatives, provide us with professional advice on continuing
obligations under the Listing Rules and act as additional channel of communication
of our Company with the Stock Exchange during the period from the Listing Date
to the date on which our Company complies with Rule 13.46 of the Listing Rules in
respect of its financial results for the first full financial year immediately after the
Listing. The Compliance Advisor will be available to answer enquiries from the
Stock Exchange and will act as an additional channel of communication with the
Stock Exchange when the Authorized Representatives are not available.
W AIVER IN RESPECT OF JOINT COMPANY SECRETARIES
Rule 8.17 of the Listing Rules provides that our Company must appoint a company
secretary who satisfies the requirements under Rule 3.28 of the Listing Rules.
According to Rule 3.28 of the Listing Rules, our Company must appoint an individual,
who, by virtue of his/her academic or professional qualifications or relevant experience, is, in
the opinion of the Stock Exchange, capable of discharging the functions of company secretary.
Pursuant to Note 1 to Rule 3.28 of the Listing Rules, the Stock Exchange considers the
following academic or professional qualifications to be acceptable:
(a) a Member of The Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister (as defined in the Legal Practitioners Ordinance); and
(c) a certified public accountant (as defined in the Professional Accountants
Ordinance).
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
–8 4–


--- page 95 ---
In addition, pursuant to Note 2 to Rule 3.28 of the Listing Rules, in assessing “relevant
experience,” the Stock Exchange will consider the individual’s:
(a) length of employment with the issuer and other issuers and the roles they played;
(b) familiarity with the Listing Rules and other relevant laws and regulations including
the Securities and Futures Ordinance, Companies Ordinance, Companies (Winding
Up and Miscellaneous Provisions) Ordinance and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement
under Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
Pursuant to the Chapter 3.10 under the Guide for New Listing Applicants published by the
Stock Exchange, the waiver under Rule 3.28 of the Listing Rules will be granted for a fixed
period of time but in any event not exceeding three years from the date of listing (the “ Waiver
Period ”) and on the following conditions: (i) the relevant company secretary must be assisted
by a person who possesses the qualifications or experience as required under Rule 3.28 of the
Listing Rules and is appointed as a joint company secretary throughout the Waiver Period; and
(ii) the waiver can be revoked in the event of a material breach of the Listing Rules by our
Company.
We have appointed Mr. Zhang as one of the joint company secretaries of our Company.
See “Directors and Senior Management — Board of Directors” in this prospectus for further
biographical details of Mr. Zhang.
Mr. Zhang has over 18 years of experience in the metal industry and financial
management but personally does not possess any of the qualifications under Rules 3.28 and
8.17 of the Listing Rules, and may not be able to solely fulfill the requirements of the Listing
Rules. Therefore, our Company has appointed Ms. Wong, an associate of both The Hong Kong
Chartered Governance Institute and The Chartered Governance Institute in the United
Kingdom, who fully meets the requirements under Rules 3.28 and 8.17 of the Listing Rules to
act as one of our joint company secretaries and to provide assistance to Mr. Zhang for an initial
period of three years from the Listing Date to enable Mr. Zhang to acquire the “relevant
experience” under Note 2 to Rule 3.28 of the Listing Rules so as to fully comply with the
requirements set forth under Rules 3.28 and 8.17 of the Listing Rules. See “Directors and
Senior Management — Joint Company Secretaries” in this prospectus for further biographical
details of Ms. Wong.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
–8 5–


--- page 96 ---
The following arrangements have been, or will be, put in place to assist Mr. Zhang in
acquiring the qualifications and experience as the company secretary of our Company required
under Rule 3.28 of the Listing Rules:
(a) Mr. Zhang will comply with the annual professional training requirement under Rule
3.29 of the Listing Rules and attend relevant training courses, including briefings on
the latest changes to the relevant applicable Hong Kong laws and regulations and the
Listing Rules which will be organized by our Company’s Hong Kong legal advisers
on an invitation basis and seminars organized by the Stock Exchange for listed
issuers from time to time;
(b) Ms. Wong will assist Mr. Zhang to enable him to acquire the relevant experience (as
required under Rule 3.28 of the Listing Rules) to discharge the duties and
responsibilities as the company secretary of our Company;
(c) Ms. Wong will communicate regularly with Mr. Zhang on matters relating to
corporate governance, the Listing Rules and any other laws and regulations which
are relevant to our Company and its affairs. Ms. Wong will work closely with, and
provide assistance for, Mr. Zhang in discharging his duties as a company secretary,
including organizing our Company’s Board meetings and Shareholders’ general
meetings; and
(d) Prior to expiry of Mr. Zhang’s initial term of appointment as the company secretary
of our Company, we will evaluate his experience in order to determine if he has
acquired the qualifications required under Rule 3.28 of the Listing Rules, and
whether on-going assistance should be arranged so that Mr. Zhang’s appointment as
the company secretary of our Company continues to satisfy the requirements under
Rules 3.28 and 8.17 of the Listing Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted us, a waiver from strict compliance with Rules 3.28 and 8.17 of the Listing Rules. The
waiver was granted for a three-year period commencing from the Listing Date (the “ Waiver
Period ”), on the condition that Ms. Wong, as a joint company secretary of our Company, will
work closely with, and provide assistance to Mr. Zhang, in the discharge of his duties as a joint
company secretary during the Waiver Period. Such waiver will be revoked immediately if and
when (i) Mr. Zhang ceases to be assisted by a person with qualifications under Rule 3.28 and
8.17 of the Listing Rules, or (ii) if there are material breaches of the Listing Rules by us. We
will liaise with the Stock Exchange before the end of the Waiver Period to enable it to assess
whether Mr. Zhang, having had the benefit of Ms. Wong’s assistance for three years, will have
acquired relevant experience within the meaning of Rule 3.28 of the Listing Rules so that a
further waiver will not be necessary.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
–8 6–


--- page 97 ---
W AIVERS IN RESPECT OF CONTINUING CONNECTED TRANSACTIONS
We have entered into and are expected to continue to have certain transactions after the
Listing which will constitute our partially exempt and non-exempt continuing connected
transactions under Chapter 14A of Listing Rules upon Listing. Accordingly, we have applied
to the Stock Exchange for, and the Stock Exchange has granted us waivers in relation to certain
continuing connected transactions between us and certain connected persons under Chapter
14A of the Listing Rules. See the sections headed “Connected Transactions — Partially Exempt
Continuing Connected Transactions” and “Connected Transactions — Non-exempt Continuing
Connected Transactions” in this prospectus.
CONSENT IN RESPECT OF THE PROPOSED SUBSCRIPTION OF SHARES BY A
CORNERSTONE INVESTOR WHO IS A CONNECTED CLIENT
Paragraph 1C(1) of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to “connected clients” of the overall coordinator(s), any syndicate member(s) (other
than the overall coordinator(s)) or any distributor(s) (other than syndicate member(s))
(collectively, the “ Distributors ”, and each a “ Distributor ”), without the prior written consent
of the Stock Exchange.
Paragraph 1B of the Appendix F1 to the Listing Rules states that “connected client” in
relation to an exchange participant means any client which is a member of the same group of
companies as such exchange participant.
CICC Financial Trading Limited (“ CICC FT ”) has entered into a cornerstone investment
agreement with the Company, China International Capital Corporation Hong Kong Securities
Limited (“ CICCHKS ”) and Huatai Financial Holdings (Hong Kong) Limited. CICC FT and
China International Capital Corporation Limited (“ CICCL ”) will enter into a series of cross
border delta-one OTC swap transactions (the “ OTC Swaps ”) with each other and their ultimate
clients (includingږ,ږandږthe
“CICC FT Ultimate Clients (Greenwoods) ”), respectively, pursuant to which CICC FT will
hold the Offer Shares on a non-discretionary basis to hedge the OTC Swaps, while the
economic risks and returns of the underlying Offer Shares are passed to the CICC FT Ultimate
Clients (Greenwoods). CICC FT, CICCL and CICCHKS, a Joint Sponsor, an Overall
Coordinator and a Underwriter of the Global Offering, are members of the same group of
companies. Accordingly, CICC FT is a connected client of CICCHKS.
We have applied for, and the Stock Exchange has granted, a consent under paragraph
1C(1) of Appendix F1 to the Listing Rules to permit CICC FT (in connected with the OTC
Swaps) to participate in the Global Offering as a cornerstone investor on the following basis
and conditions as set out in Paragraph 6 of Chapter 4.15 of the Guide for New Listing
Applicants:
(a) any Offer Shares to be allocated to CICC FT will be held on behalf of independent
third parties;
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
–8 7–


--- page 98 ---
(b) the cornerstone investment agreement of CICC FT does not contain any material
terms which are more favorable to CICC FT than those in other cornerstone
investment agreements;
(c) no preferential treatment has been, nor will be, given to CICC FT by virtue of its
relationship with CICCHKS, in any allocation of Offer Shares in the International
Offering other than the assured entitlement under the cornerstone investment
agreement;
(d) CICC FT confirms that to the best of its knowledge and belief, it has not received
and will not receive preferential treatment in the allocation of Offer Shares in the
Global Offering as a cornerstone investor by virtue of its relationship with
CICCHKS, other than the assured entitlement under the relevant cornerstone
investment agreement;
(e) each of the Company, the Overall Coordinators and CICC FT has provided the Stock
Exchange with written confirmations in accordance with Chapter 4.15 of the Guide
for New Listing Applicants; and
(f) details of the cornerstone investment and details of the allocations will be disclosed
in “Cornerstone Investors” section of this prospectus and the allotment results
announcement.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
–8 8–


--- page 99 ---
DIRECTORS’ RESPONSIBILITY STATEMENT
This prospectus, for which our Directors (including any proposed Director who is named
as such in this prospectus) collectively and individually accept full responsibility, includes
particulars given in compliance with the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules (Chapter 571V
of the Laws of Hong Kong) and the Listing Rules for the purpose of giving information with
regard to us. The Directors, having made all reasonable enquiries, confirm that to the best of
their knowledge and belief the information contained in this prospectus is accurate and
complete in all material respects and not misleading or deceptive, and there are no other
matters the omission of which would make any statement herein or this prospectus misleading.
CSRC FILING
According to the Trial Administrative Measures of Overseas Securities Offering and
Listing by Domestic Companies (), we are
required to complete the filing procedures with the CSRC in connection with the Listing. We
have submitted the filing to the CSRC on January 15, 2025, which was accepted by the CSRC
on February 21, 2025. The CSRC filing was announced completed on October 17, 2025.
GLOBAL OFFERING
This prospectus is published solely in connection with the Hong Kong Public Offering,
which forms part of the Global Offering. For applicants under the Hong Kong Public Offering,
this prospectus set out the terms and conditions of the Hong Kong Public Offering.
The Hong Kong Offer Shares are offered solely on the basis of the information contained
and representations made in this prospectus and on the terms and subject to the conditions set
out herein and therein. No person is authorized to give any information in connection with the
Global Offering or to make any representation not contained in this prospectus, and any
information or representation not contained in this prospectus must not be relied upon as
having been authorized by our Company, the Joint Sponsors, the Overall Coordinators, the
Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries and any of the Underwriters, any of their respective directors, agents,
employees or advisers or any other party involved in the Global Offering.
The Listing is sponsored by the Joint Sponsors and the Global Offering is managed by the
Overall Coordinators. 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 us and the Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters) agreeing on the Offer Price. The International Offering is expected to be fully
underwritten by the International Underwriters subject to the terms and conditions of the
International Underwriting Agreement, which is expected to be entered into on or around the
Price Determination Date.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–8 9–


--- page 100 ---
The Offer Price is expected to be fixed among the Overall Coordinators (for themselves
and on behalf of the Underwriters) and our Company on the Price Determination Date. The
Price Determination Date is expected to be on or before Thursday, November 20, 2025 and, in
any event, not later than 12:00 noon on Thursday, November 20, 2025 (unless otherwise
determined between the Overall Coordinators (for themselves and on behalf of the
Underwriters) and our Company). If, for any reason, the Offer Price is not agreed among us and
the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters), by
12:00 noon on Thursday, November 20, 2025, the Global Offering will not proceed and will
lapse. For full information about the Underwriters and the underwriting arrangements, see
“Underwriting” in this prospectus.
Neither the delivery of this prospectus nor any offering, sale or delivery made in
connection with the Offer Shares should, under any circumstances, constitute a representation
that there has been no change or development reasonably likely to involve a change in our
affairs since the date of this prospectus or imply that the information contained in this
prospectus is correct as of any date subsequent to the date of this prospectus.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for Hong Kong Offer Shares are set forth in “How to Apply
for Hong Kong Offer Shares” in this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
Details of the structure of the Global Offering, including its conditions, are set forth in
“Structure of the Global Offering” in this prospectus.
OVER-ALLOTMENT OPTION AND STABILIZATION
Details of the arrangements relating to the Over-allotment Option and stabilization are set
forth in “Structure of the Global Offering” in this prospectus. Assuming that the Over-
allotment Option is exercised in full, our Company may be required to allot and issue up to an
aggregate of 75,000,000 additional Shares.
RESTRICTIONS ON OFFERS AND SALE OF THE SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to, or be deemed by his acquisition of the Shares to, confirm that he is aware
of the restrictions on offers of the Offer Shares described in this prospectus.
No action has been taken to permit a public offering of the Offer Shares or the general
distribution of this prospectus in any jurisdiction other than in Hong Kong. Accordingly, this
prospectus may not be used for the purposes of, and does not constitute, an offer or invitation
in any jurisdiction or in any circumstances in which such an offer or invitation is not authorized
or to any person to whom it is unlawful to make such an offer or invitation. The distribution
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 0–


--- page 101 ---
of this prospectus and the offering of the Offer Shares in other jurisdictions are subject to
restrictions and may not be made except as permitted under the applicable securities laws of
such jurisdictions and pursuant to registration with or authorization by the relevant securities
regulatory authorities or an exemption therefrom.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Stock Exchange for the listing of, and permission to deal in, the
Shares in issue and to be issued pursuant to the Global Offering (including any Shares which
may be issued pursuant to the Over-allotment option).
Assuming the Global Offering becomes unconditional at or before 8:00 a.m. on Monday,
November 24, 2025 (Hong Kong time), dealings in the Shares on the Stock Exchange are
expected to commence on Monday, November 24, 2025. The Shares will be traded in board lots
of 500 Shares each. The stock code of the Shares will be 02788. No part of our Shares or loan
capital is listed on or dealt in on any other stock exchange and no such listing or permission
to list is being or proposed to be sought. All the Offer Shares will be registered on the Hong
Kong Share Registrar of our Company in order to enable them to be traded on the Stock
Exchange.
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 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 the
Stock Exchange.
SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, the Shares on the Stock
Exchange and compliance with the stock admission requirements of HKSCC, the Shares will
be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS
with effect from the Listing Date or on any other date as determined by HKSCC. Settlement
of transactions between participants of the Stock Exchange is required to take place in CCASS
on the second settlement day after any trading day. All activities under CCASS are subject to
the General Rules of HKSCC and the HKSCC Operational Procedures in effect from time to
time.
All necessary arrangements have been made for the Shares to be admitted into CCASS.
Investors should seek the advice of their stockbroker or other professional advisor for details
of those settlement arrangements and how such arrangements will affect their rights and
interests.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 1–


--- page 102 ---
REGISTER OF MEMBERS AND STAMP DUTY
Our principal register of members will be maintained by our principal share registrar,
Campbells Corporate Services Limited, in the Cayman Islands, and our Hong Kong register of
members will be maintained by the Hong Kong Share Registrar, Computershare Hong Kong
Investor Services Limited, in Hong Kong. All Offer Shares issued pursuant to applications
made in the Hong Kong Public Offering and the International Offering will be registered on the
Hong Kong register of members of our Company in Hong Kong.
Dealings in the Shares registered in our Hong Kong register will be subject to Hong Kong
stamp duty. The current ad valorem rate of Hong Kong stamp duty of 0.10% on the higher of
the consideration for, or the market value of, the Shares is charged to the purchaser on every
purchase and to the seller on every sale of the Shares. In other words, a total of 0.20% is
currently payable on a typical sale and purchase transaction of the Shares.
PROFESSIONAL TAX ADVICE RECOMMENDED
Professional investors in the Global Offering are recommended to consult their
professional advisers as to the taxation implications of subscribing for, purchasing, holding or
disposing of, and dealing in, our Shares (or exercising rights attaching to them) under the laws
of Hong Kong and the place of their operations, domicile, residence, citizenship or
incorporation. None of the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries, the Underwriters, us, any of our or their respective directors, officers, agents,
employees, advisers or representatives, or any other parties involved in the Global Offering
accepts responsibility for any tax effects on, or liabilities of, any person resulting from the
subscription for, purchasing, holding or disposing of, or dealing in, our Shares (or exercise of
any rights attaching to them).
EXCHANGE RATE CONVERSION
Unless otherwise specified, amounts denominated in RMB or US$ have been translated,
for the purpose of illustration only, into Hong Kong dollars in this prospectus at the following
exchange rates: RMB1.00: HK$1.0971 and US$1.00: HK$7.7745.
No representation is made that any amounts in RMB or US$ were or could have been or
could be converted into Hong Kong dollars at such rates or any other exchange rates on such
date or any other date.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures preceding them.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 2–


--- page 103 ---
LANGUAGE
If there is any inconsistency between this prospectus and its Chinese translation, this
prospectus shall prevail, provided that if there is any inconsistency between the Chinese names
of the entities or enterprises established in the PRC mentioned in this prospectus and their
English translations, the Chinese names shall prevail. The English translations of the Chinese
names of such PRC entities or enterprises marked with “*” are provided for identification
purposes only.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 3–


--- page 104 ---
DIRECTORS
Chairman of the Board and non-executive Director
Mr. Cui Lixin ( ੦ͭอ΋͛) Building 6,
Innovation 4th Industrial Park
Middle section of Y uehe 6th Road
Zouping Economic and Technological
Development Zone
Zouping, Shandong
PRC
Chinese
Executive Directors
Mr. Cao Y ong (΋͛) Room 2105, Unit 3, Building 1
No. 199, Middle Section
of Tianfu Avenue
Chengdu, Sichuan
PRC
Chinese
Mr. Zhang Jianxiang
(ඊ΋͛)
Room 501, Unit 2, Building 6
Innovation International Community
Zouping, Shandong
PRC
Chinese
Ms. Zhang Y ue (ɾɻ) Room 801, Unit 1, Building 8
Innovation International Community
Zouping, Shandong
PRC
Chinese
Mr. Fu Qian ( Ϳᙛ΋͛) Room 1401, Unit 3, Building 22
Zhongnan Century City Community
Guangrao, Dongying, Shandong
PRC
Chinese
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 4–


--- page 105 ---
Independent non-executive Directors
Mr. Liu Y anzhao (΋͛) Room 202, Unit 3, Building 7
Jitai Huabin Jiayuan
No. 509, Huanghe 10th Road
Binzhou, Shandong
PRC
Chinese
Ms. Zheng Juan (ɾɻ) Room 302, Unit 1, Building 5
No. 513, Huanghe 8th Road
Bincheng District
Binzhou, Shandong
PRC
Chinese
Ms. Shen Lingyan (ዲɾɻ) Room 1703, Building 15
Huayuan Zha North Lane
Chaoyang District
Beijing
PRC
Chinese
For further information on our Directors, please refer to the section headed “Directors
and Senior Management” of this prospectus.
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 5–


--- page 106 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
Sponsor-Overall Coordinators and
Overall Coordinators
China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
Joint Global Coordinators China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 6–


--- page 107 ---
UOB Kay Hian (Hong Kong) Limited
6/F Harcourt House
39 Gloucester Road
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
Joint Bookrunners China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
UOB Kay Hian (Hong Kong) Limited
6/F Harcourt House
39 Gloucester Road
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 7–


--- page 108 ---
A VICT Global Asset Management Limited
Units 6704B-06A, Level 67
International Commerce Centre
1 Austin Road West
Tsim Sha Tsui
Hong Kong
South China Securities Limited
28/F, Bank of China Tower
No.1, Garden Road
Central
Hong Kong
Joint Lead Managers China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
UOB Kay Hian (Hong Kong) Limited
6/F Harcourt House
39 Gloucester Road
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 8–


--- page 109 ---
A VICT Global Asset Management Limited
Units 6704B-06A, Level 67
International Commerce Centre
1 Austin Road West
Tsim Sha Tsui
Hong Kong
South China Securities Limited
28/F, Bank of China Tower
No.1, Garden Road
Central
Hong Kong
Futu Securities International (Hong
Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road Central
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
Capital Market Intermediaries China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 9–


--- page 110 ---
UOB Kay Hian (Hong Kong) Limited
6/F Harcourt House
39 Gloucester Road
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Hong Kong
A VICT Global Asset Management Limited
Units 6704B-06A, Level 67
International Commerce Centre
1 Austin Road West
Tsim Sha Tsui
Hong Kong
South China Securities Limited
28/F, Bank of China Tower
No.1, Garden Road
Central
Hong Kong
Futu Securities International (Hong
Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 100 –


--- page 111 ---
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
Legal Advisors to the Company As to Hong Kong and U.S. laws:
Clifford Chance
27/F, Jardine House
One Connaught Place
Central
Hong Kong
As to PRC law:
Commerce & Finance Law Offices
12-15/F, China World Office 2
No. 1 Jianguomenwai Avenue
Beijing
PRC
As to Cayman Islands law:
Campbells
3002-04, 30/F
Gloucester Tower, The Landmark
15 Queen’s Road, Central
Hong Kong
Legal Advisors to the Joint Sponsors and
the Underwriters
As to Hong Kong and U.S. laws:
Freshfields
55th Floor, One Island East
Taikoo Place, Quarry Bay
Hong Kong
As to PRC law:
Jingtian & Gongcheng
34/F, Tower 3, China Central Place
77 Jianguo Road
Chaoyang District, Beijing
PRC
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 101 –


--- page 112 ---
Reporting Accountants Deloitte Touche Tohmatsu
Certified Public Accountants
Registered Public Interest Entity Auditor
35/F, One Pacific Place
88 Queensway
Hong Kong
Industry Consultant CRU International Limited
1st Floor, MidCity Place
71 High Holborn
London, WC1V 6EA
UK
PRC Litigation Counsel Shandong Tianjian Law Firm
No.139 Guangchang East Road
Zouping, Shandong
PRC
Receiving Banks CMB Wing Lung Bank Limited
45 Des V oeux Road Central
Hong Kong
Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
Industrial and Commercial Bank of China
(Asia) Limited
33/F., ICBC Tower
3 Garden Road
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 102 –


--- page 113 ---
Registered Office Floor 4, Willow House
Cricket Square, Grand Cayman KY1-9010
Cayman Islands
Head Office and Principal Place of
Business in China
Zone C
Southwest Industrial Park
Huolinguole, Inner Mongolia
PRC
Principal Place of Business in Hong Kong Room 3601
East, Cheung Kong Center II
10 Harcourt Road
Central
Hong Kong
Company’s Website www.innovationigi.com
(The information on the website does not
form part of this prospectus)
Joint Company Secretaries Mr. Zhang Jianxiang (ඊ΋͛)
Room 501, Unit 2, Building 6
Innovation International Community
Zouping, Shandong
PRC
Ms. Wong Hoi Ting ( ර௱ణɾɻ)
(ACG, HKACG)
31/F, Tower Two, Times Square
1 Matheson Street, Causeway Bay
Hong Kong
Authorized Representatives Mr. Zhang Jianxiang (ඊ΋͛)
Room 501, Unit 2, Building 6
Innovation International Community
Zouping, Shandong
PRC
Ms. Wong Hoi Ting ( ර௱ణɾɻ)
31/F, Tower Two, Times Square
1 Matheson Street, Causeway Bay
Hong Kong
Audit Committee Mr. Liu Y anzhao (Chairman)
Mr. Cui Lixin
Ms. Shen Lingyan
CORPORATE INFORMATION
– 103 –


--- page 114 ---
Nomination Committee Ms. Shen Lingyan (Chairman)
Mr. Cui Lixin
Ms. Zheng Juan
Remuneration Committee Ms. Zheng Juan (Chairman)
Mr. Liu Y anzhao
Ms. Shen Lingyan
Connected Transaction Control
Committee
Mr. Liu Y anzhao (Chairman)
Mr. Zhang Jianxiang
Ms. Zheng Juan
Compliance Advisor Gram Capital Limited
Room 1209, 12/F., Nan Fung Tower
88 Connaught Road Central
Hong Kong
Hong Kong Share Registrar Computershare Hong Kong Investor
Services Limited
Shops 1712-1716, 17th Floor
Hopewell Centre
183 Queen’s Road East
Wanchai
Hong Kong
Cayman Islands Principal Share Registrar
and Transfer Office
Campbells Corporate Services Limited
Floor 4
Willow House
Cricket Square, Grand Cayman
KY1-9010, Cayman Islands
Principal Banks Bank of Jinzhou
Lingyun Branch
No. 27, Section 2, Central Avenue
Linghe District
Jinzhou, Liaoning
PRC
Industrial and Commercial Bank of China
Huolinguole Branch
Zhusihua Avenue
Huolinguole, Inner Mongolia
PRC
CORPORATE INFORMATION
– 104 –


--- page 115 ---
The information set out in this section and other sections of this prospectus,
including certain facts, statistics and data, was extracted from the CRU Report, and from
various official government publications and other publicly available publications. We
have taken reasonable care in extracting and reproducing such information and statistics
and have no reason to believe that any fact has been omitted which would render such
information and statistics false or misleading. We engage CRU to prepare the CRU
Report, an independent industry report, in connection with the Global Offering. Our
Directors confirm that, after making reasonable enquiries and exercising reasonable
care, they are not aware of any adverse change in market information since the date of
the CRU Report which may qualify, contradict or adversely impact the quality of the
information in this section. The information and statistics from official government
sources included here have not been independently verified by the Joint Sponsors, the
Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global Coordinators,
the Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, any
of the Underwriters, any of respective directors, officers or representatives, or any other
person involved in the Global Offering.
INTRODUCTION
Aluminum is the second-largest consumed metal in the world after steel. By property,
aluminum is interchangeable between different product forms and its ingot form is
standardized and exchanged globally.
Aluminum can be divided into electrolytic aluminum (also called primary aluminum) and
secondary aluminum (also called recycled aluminum) by source of production. Electrolytic
aluminum represents most of the aluminum production and consumption, with a consumption
share of approximately 70% globally and approximately 78% in China in 2024. Secondary
aluminum is energy-saving and applicable for most aluminum end-uses. In 2024,
approximately 30% of global aluminum consumption was secondary, while the ratio in China
was slightly lower at approximately 22%. The raw materials used to produce electrolytic
aluminum mainly include bauxite, which is refined into alumina and then electrolyzed into
electrolytic aluminum. Based on the market prices of bauxite, alumina and electrolytic
aluminum in 2024 and the conversion rate of each (roughly 2.5 tons of bauxite is required for
each ton of alumina, and roughly 1.9 tons of alumina is required per ton of aluminum), the
value is spread along the aluminum industry value chain, with 13% in bauxite, 25% in refining
and 62% in smelting. The refining and smelting stages together account for approximately 87%
of the whole value chain. The following diagram sets forth the key stages in the value chain:
Diagram of electrolytic aluminum value chain
Refining Smelting Casting & alloyingRaw material
Aluminum Alloy ProcessAluminum Industry Value Chain
Bauxite Alumina
Green energy
Construction
3C electronic products
Lightweight automotive
Industrial materials
Billets
Extrusion profiles
Wire rods
Foils
Structural parts
Others
End-use areas
Transportation
Aluminum End-use Areas
Flat-rolled products
Liquid
Aluminum
Aluminum
Ingots
Electrolytic
Aluminum
Source: CRU
INDUSTRY OVERVIEW
– 105 –


--- page 116 ---
Bauxite mining
Bauxite ore is the main aluminum-containing ore with abundant reserve. Globally, the
proven bauxite reserves of roughly 30 billion tons are sufficient for over 90 years at the current
rate of extraction. Approximately 90% of the world’s bauxite production is open-cast, making
mining relatively low-cost and straightforward. Bauxite ore typically contains 30% to 60% of
alumina.
Alumina refining
Bauxite ore is processed into alumina at alumina refineries predominantly using the Bayer
process. The Bayer process consists of four stages: dissolution, separation, decomposition and
calcination. This process results in alumina, also known as aluminum oxide, in the form of
white powder. Alumina could be used as the feedstock for electrolytic aluminum smelting and
in various chemical applications. Approximately 94% of alumina is consumed for electrolytic
smelting.
In this industry overview, alumina refers to alumina used in electrolytic aluminum
smelting process only.
Electrolytic aluminum smelting
Alumina is processed into electrolytic aluminum through an electrolytic process. In this
process, the electric current passes through the carbon anode to the cathode, and alumina is fed
into a bath of molten cryolite and dissolved. Upon completion of the smelting process,
electrolytic aluminum could be in the form of ingots or liquid aluminum and then transferred
to the aluminum alloy processing plants.
Aluminum alloying
Electrolytic aluminum is taken to the aluminum alloy processing plants either in liquid or
ingot form. In this stage, impurities are removed from the electrolytic aluminum and sometimes
metals, such as manganese, magnesium, copper and silicon, are added to produce a range of
aluminum alloys, such as billets, extrusion profiles, flat-rolled products, foils, wire rods and
structural parts. In cases where an aluminum alloy processing plant is located close to a
smelter, electrolytic aluminum can be transferred in liquid form from the smelter to aluminum
processing plants directly. In cases where the downstream alloy processing plant is not located
close to any smelter, electrolytic aluminum is sold to the downstream buyers in the ingot form.
In this process, it is common for traders to participate in electrolytic aluminum trading. They
usually buy the aluminum ingots from the electrolytic aluminum producers before re-selling to
downstream buyers.
INDUSTRY OVERVIEW
– 106 –


--- page 117 ---
Aluminum end-use
After being processed into aluminum alloys, aluminum could be widely applied in various
end-use areas, such as 3C electronics products, lightweight automotive, green energy,
transportation, industrial materials and construction.
 3C electronics products: aluminum is extensively used in 3C electronics products,
namely computer, communication and consumer electronics products, for its
lightweight nature, durability and high conductivity. Aluminum’s high thermal
conductivity is ideal for heat sinks, ensuring cooling in electronic devices.
Meanwhile, it serves as the casings and frames for laptops, smartphones and tablets,
offering structural protection.
 Lightweight automotive: aluminum has been widely used in the transport industry,
notably lightweight automotive given its property of high strength and lightweight.
Automotive manufacturers can reduce vehicle weight using aluminum for
components such as the body, chassis and battery houses. In recent years, the
popularity of electrical vehicles (EVs) has boosted the trend of lightweight
automotive.
 Green energy: aluminum’s high conductivity, low power loss and high durability
allow it to transmit power over long distances with little energy loss and high
reliability. Therefore, aluminum is widely used in electrical transmission
components, such as cables, connectors and wiring harnesses. In recent years,
aluminum demand has risen with the increasing need for green energy (notably solar
photovoltaics and wind power), which poses an increasing demand for electrical
transmission. Besides, aluminum is also used as a core structural material in wind
turbines and solar power frames.
 Transportation: aluminum is widely applied in transportation sector such as
aerospace and rail transport. Given its high strength, lightweight and durability,
aluminum is also used as a core structural material in aircraft and train bodies.
 Industrial materials: aluminum serves as a critical industrial material in many
areas. For example, it is used in manufacturing equipment, industrial machinery and
tools due to its machinability. Meanwhile, aluminum is widely used in wires and
cables given its conductivity.
 Construction materials: aluminum has been traditionally used in the construction
sector due to its high malleability, durability and lightweight. It is used in structural
elements such as roofs, bridges and modular construction. The lightweight nature of
aluminum reduces the load on the foundation, especially for high-rise buildings and
long-span structures. It is also used in curtain walls, window frames and doors given
its high strength and corrosion resistance.
INDUSTRY OVERVIEW
– 107 –


--- page 118 ---
 Aluminum applied in other sectors: aluminum could also be widely applied in
other sectors such as packaging products in food, beverage, and pharmaceutical
industries.
ELECTROLYTIC ALUMINUM PRODUCTION SUMMARY (GLOBAL AND CHINA)
Global aluminum production is highly consolidated. In 2024, the world’s top five
producers supplied approximately 22 mt, which was equivalent to approximately 30% of global
electrolytic aluminum production. The top 25 producers supplied approximately 51 mt, which
was equivalent to approximately 71% of global electrolytic aluminum production.
Production and share of top global electrolytic aluminum producers, 2024
2024 cumulative production
(mt)
Share of world’s total supply
(%)
Top 5 producers 22 30
Top 10 producers 34 47
Top 25 producers 51 71
Top 50 producers 64 88
World total 73 100
Source: CRU, Industry sources
Note: “Top producers” are ranked in terms of electrolytic aluminum production
China currently dominates the world’s electrolytic aluminum production. It has 14 out of
the world’s top 25 electrolytic aluminum producers in 2024. These 14 aluminum producers in
total contributed approximately 30 mt in 2024. It is important to note that China’s MIIT
introduced the Scheme of Aluminum Capacity Swap (“ଡ଼ഃ˙ό
(ࡡ[2018]12 ໮)”) as part of the supply-side reform in
aluminum in 2018, stating that any new capacity must be a swap of existing capacity. Hence,
China’s total electrolytic aluminum capacity has been strictly kept at the 2017 level of roughly
45 mt per year. As such, China’s electrolytic aluminum capacity is expected to converge to the
45 mt of annual electrolytic aluminum production capacity cap over the forecast period. With
the cap, China is expected to produce approximately 57% of global electrolytic aluminum in
2028, compared with that of 59% in 2024.
Outside of China , major producers are mainly in India, Russia, the United Arab Emirates
(UAE), Australia, Norway and Canada. India is home to two of the world’s top 25 largest
producers. Russia owns one of the top five largest producers, which largely adopts hydropower
as the source of power. UAE has one aluminum producer which ranks ninth globally in terms
of production. Four Western producers are listed among the world’s top 25 largest producers,
contributing 12% of the global production. Under both environmental and cost pressures,
western producers focus more on the development of decarbonization technologies in the
smelting process, with less emphasis on expanding their existing capacity.
INDUSTRY OVERVIEW
– 108 –


--- page 119 ---
Benefiting from rapid economic development and sufficient raw materials, the Middle
East has the potential to become the next capacity-growing spots. The smelters in the Middle
East are among the most competitive in terms of cost, primarily due to the region’s low
electricity prices. In 2024, four (out of six) operating electrolytic aluminum smelters in the
Middle East had cash costs among the lowest 25% globally. Besides the advantage in electricity
prices, Saudi Arabia’s production is backed by the robust aluminum demand. Under the
state-led Vision 2030 initiatives, Saudi Arabia has announced its ambitious infrastructure
investment pipeline and is projected to spend over USD1 trillion by 2030. This comprehensive
investment will cover a wide range of infrastructure construction, from mining hubs, financial
centers, economic development zones to green energies and public transportation, which all
involve massive aluminum demand in Saudi Arabia.
ELECTROLYTIC ALUMINUM CONSUMPTION SUMMARY (GLOBAL AND CHINA)
Global electrolytic aluminum consumption was 73 mt in 2024, and consumption is highly
associated with the economic scale. In 2024, the largest five economies in total consumed 56
mt of electrolytic aluminum (equivalent to 77%), and the largest ten economies in total
consumed 59 mt (equivalent to 81%) of electrolytic aluminum. Under the vast economic
development, the Middle East and Southeast Asia are regions with substantial growth potential
in aluminum consumption. Between 2025 and 2028, their electrolytic aluminum demands are
forecast to grow at a CAGR of 4.6% and 3.0%, respectively.
Consumption and share of top global electrolytic aluminum consumers, 2024
2024 cumulative consumption
(mt)
Share of world’s total consumption
(%)
Top five economies 56 77
Top ten economies 59 81
World total 73 100
Source: CRU
Note:
1. The top five and ten largest economies are calculated based on 2024 GDP , which includes US, China, Germany,
Japan, India, UK, France, Italy, Brazil and Canada.
China dominates the electrolytic aluminum consumption in 2024 with 45 mt (equivalent
to 62% of global consumption). In recent years, energy transition, lightweight automotive and
electrification have supported the growth of electrolytic aluminum demand in China. CRU
forecasts the transport sector and electrical sector to replace the construction sector as the two
largest end-use sectors for aluminum products by 2028, driven by the following factors:
 Recent developments in EVs support the demand for lightweight automotive. On
average, each EV consumes 0.28 tons of aluminum, 47% more than that of an ICE
(Internal Combustion Engine). China is the world’s largest consumer and producer
of EVs. Its EV production rose from 1.1 million in 2018 to 12.6 million in 2024 and
INDUSTRY OVERVIEW
– 109 –


--- page 120 ---
is forecast to further grow to 19.5 million in 2028. China’s expanding EV production
is expected to add about 1.9 mt of new aluminum demand, supporting growth in the
transport sector. CRU forecasts that the transport sector will consume approximately
11.4 mt of aluminum products in 2028, making it the largest aluminum end-use
sector in China.
 The growing green energy sector is supporting aluminum growth. Aluminum is used
in power cables, solar PVs and wind power equipment. With the global development
of green energy, notably solar and wind power, aluminum demand in the electrical
sector is forecast to grow at a CAGR of approximately 2% from 2025 to 2028
globally. Much of the growth will be in Asia as around 85% of green energy
equipment is manufactured in Asia, including China, and then exported. In addition,
aluminum is forecast to partially substitute copper in power cable production. Both
copper and aluminum are good conductors of electricity, but copper is nearly four
times more expensive than aluminum. With the copper/aluminum pricing ratio
continuing to rise, aluminum is gradually replacing some copper in cables for cost
advantage, adding aluminum’s usage in electrical transition. CRU forecasts that the
electrical sector will consume approximately 10.4 mt of aluminum products in China
in 2028.
China aluminum product demand by end-use proportion (%) and CAGR (%),
2018-2028E
2018 2024 2028E
CAGR
(2018-2024)
CAGR
(2025E-2028E)
Transport 17 19 20 5 3
Electrical 12 18 19 13 2
Construction 31 23 19 (2) (1)
Others
(1) 40 40 42 4 2
Total 100 100 100 4 2
Source: CRU
Note:
(1) Others primarily include foil stock for food, beverage and pharmaceutical packaging; consumer durables such
as 3C electronics, household appliances and kitchenware; and machinery and equipment, where it is
incorporated into components such as frames, housings and heat sinks.
INDUSTRY OVERVIEW
–1 1 0–


--- page 121 ---
BAUXITE AND OTHER RA W MATERIAL ANALYSIS (GLOBAL AND CHINA)
Bauxite market analysis
Bauxite reserve is abundant but highly concentrated. In 2024, about 74% of the world’s
proven reserves are concentrated in six countries, namely Guinea, Australia, Vietnam, Brazil,
Jamaica and Indonesia, among which Guinea and Australia are the world’s two largest bauxite
producers.
Global bauxite reserve and supply, 2024, mt
Guinea Australia Vietnam Brazil Jamaica Indonesia
Rest of
world Total
Reserve 7,400 3,500 3,100 2,700 2,000 2,800 7,500 29,000
Supply 130 104 4 33 6 32 141 450
Source: United States Geological Survey (USGS)
China has a bauxite reserve of 680 mt and produced 61 mt in 2024. At the current ratio
of supply, China’s domestic bauxite reserve could only sustain around 11 years of bauxite
production. Hence China is the world’s largest bauxite importer. Its bauxite import in 2024 was
159 mt and is forecast to reach 192 mt in 2028. West Africa, notably Guinea, is China’s largest
bauxite importing source. Bauxite import from West Africa is forecast to increase from 112 mt
in 2024 to 147 mt in 2028.
China bauxite import by trade partners, 2024 & 2028E, mt
2024 2028E
West Africa 112 147
Australia 40 36
Indonesia 0 0
Rest of world 7 9
Total 159 192
Source: CRU, General Administration of Customs of the People’ s Republic of China (GACC)
Bauxite price analysis
The main benchmark prices for the bauxite contract have traditionally been based on key
production regions, namely the FOB (Free on Board) bauxite prices in Guinea’s Boke, Brazil’s
Trombetas, and Australia’s Weipa. With strong growth in bauxite shipments to China, CIF
(Cost, Insurance and Freight) China, which includes the bauxite cost, insurance, and freight
fee, has become another important benchmark, particularly in the third-party market. CRU
China bauxite price is collected and forecast based on the weighted average price of imported
bauxite reported by the China Custom. The refinery’s actual bauxite purchasing price varies
according to the specific importing country, grade, transporting cost, and other fees.
INDUSTRY OVERVIEW
– 111 –


--- page 122 ---
Bauxite is a type of commodity. Its prices are mostly influenced by market demand and
supply dynamics. However, bauxite resources are unevenly spread geographically. The main
bauxite consumers, such as China, heavily rely on imported bauxite. Imported bauxite
constituted approximately 77% of China’s total bauxite demand in 2024. As such, any
production or transportation disruption led by geopolitical events or supply chain disruption
might lead to fluctuations in bauxite prices.
Bauxite demand is primarily driven by alumina production, which ultimately depends on
the demand in China’s aluminum market. Affected by the public health incident and the
introduction of the 45 mt of annual electrolytic aluminum production capacity cap, China’s
alumina production volume shrank from approximately 72 mt in 2018 to approximately 69 mt
in 2020 due to weak demand for aluminum, leading to a weak demand for bauxite during this
period. As such, CRU China bauxite price declined from RMB400 per ton in 2018 to RMB354
per ton in 2020. Backed by the recovery of China’s alumina market, CRU China bauxite price
has rebounded since 2021 and reached RMB489 per ton in 2023. In June 2023, Indonesia
imposed the bauxite export ban. As such, Guinea and Australia became China’s main bauxite
importers, representing approximately 70% and 25% of China’s total imports in 2024,
respectively. In addition, the soaring alumina prices in 2024 were driven by issues in relation
to raw material supply, including damage to Jamaica’s port conveyor system in the third quarter
of 2024 which disrupted bauxite exports, customs authorities suspending shipments from
Guinea Alumina Corporation and a force majeure on bauxite shipments from Juruti Port, both
in the fourth quarter of 2024. The impact of these disruptions on the supply of bauxite
gradually lessened towards the end of 2024 and early 2025. Meanwhile, in 2024, the bauxite
import demand in China reached over 150 mt, pushing the CRU China bauxite price to
RMB543 per ton.
Although the aforementioned impacts of disruptions on the supply of bauxite were
gradually resolved, CRU China bauxite price is forecast to remain strong, backed by China’s
burgeoning import demand. China’s bauxite demand is forecast to stabilize at approximately
227 mt under the 45 mt of annual electrolytic aluminum production capacity cap, and the
supply is forecast to rely more heavily on imports. As most of the new alumina refineries in
China are using imported bauxite, China’s total bauxite import is expected to increase from
approximately 159 mt in 2024 to approximately 192 mt in 2028, and over 76% of the imports
are expected to come from Guinea. As a result of the increasing use of bauxite imported from
overseas, CRU China bauxite price is forecast to rise significantly to approximately RMB611
per ton in 2028.
INDUSTRY OVERVIEW
–1 1 2–


--- page 123 ---
CRU China Bauxite price, 2018-2028E, RMB/t
2018 2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E
400 398 354
347
445
489
543
631 623 618
611
0
200
400
600
800
Source: CRU, General Administration of Customs of the People’ s Republic of China (GACC)
Note: CRU China bauxite price is based on the CIF China bauxite price plus the 13% value-added tax.
Other raw material analysis
Apart from bauxite, carbon anode and thermal coal are two key raw materials used during
the smelting process.
Carbon anodes are primarily composed of calcined petroleum coke and coal tar pitch.
Calcined petroleum coke, the key feedstock, is a byproduct of crude oil refining, making its
price highly dependent on crude oil fluctuations. Coal tar pitch, used as a binder in anode
production, is influenced by coal availability.
The prices of carbon anodes are largely driven by raw material costs — especially
calcined petroleum coke and coal tar pitch — as well as demand from aluminum smelting. In
2022, soaring energy prices led to the increased costs of these raw materials, pushing CRU
China’s carbon anode price to a peak of RMB6,799 per ton. Subsequently, as new carbon anode
production capacity came online and energy prices declined, prices of carbon anodes dropped
to RMB4,114 per ton in 2024. Looking ahead, prices of carbon anodes are forecast to remain
above RMB4,000 per ton, supported by strong aluminum smelting demand in China as the
industry approaches its 45 mt of annual electrolytic aluminum production capacity cap.
Coal is burned to generate steam for electricity power generation. Electricity costs
constitute approximately 36% of the electrolytic aluminum production cost in 2024. The
industry average electricity self-sufficiency rate was 59.0%, 57.2% and 54.5% in 2022, 2023
and 2024, respectively. In 2024, approximately 57% of electricity in China was generated by
coal. The actual purchase prices of coal vary based on the coal grade and the distance to the
coal resources. Power plants with access to local resources will likely benefit from a lower coal
prices. In this report, CRU CFR (Cost and Freight) South China coal price is used to track
China’s coal price. The coal price is predominantly influenced by the supply-demand dynamic.
The CFR South China coal price plunged from RMB543 per ton in 2018 to RMB373 per ton
INDUSTRY OVERVIEW
–1 1 3–


--- page 124 ---
in 2020, because of a reduced demand during the public health incident. However, a rebound
occurred in 2021, with prices surging to RMB783 per ton amid China’s economic resurgence
and constrained coal supplies. In 2022, there was further upward pressure as the demand for
coal-fired power intensified. Globally, the Russia-Ukraine conflict escalated natural gas prices,
prompting a shift toward coal-based electricity generation. Domestically, a summer drought in
2022 curtailed hydro-power output, further amplifying reliance on coal. Under the ongoing
energy transition, CRU forecasts China’s thermal coal demand to peak in 2025. China’s
coal-fired power generation is forecast to decrease from 5,464 terawatt-hour in 2024 to 5,115
terawatt-hour in 2028, with its share of power generation declining from approximately 57%
to 44% over the same period. Consequently, CRU forecasts the CFR South China coal price to
decrease from RMB735 per ton in 2024 to RMB723 per ton in 2028.
CRU China carbon anode and thermal coal price, 2018-2028E, RMB/t
3,875
3,350 3,020
4,645
6,799
China anode price
5,156
4,114
4,482
4,740
4,737
4,711
0
1000
2000
3000
4000
5000
6000
7000
8000
2018 2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E
543
452
373
783
1,124
CFR South China coal price
801
735
716
717
714
723
0
200
400
600
800
1000
1200
2018 2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E
Source: CRU, General Administration of Customs of the People’ s Republic of China (GACC), Industry sources
Note: CRU uses the CFR (Cost and Freight) South China 5,500 kcal/kg NAR coal as the benchmark to forecast
China’s coal price trend.
ALUMINA ANALYSIS (GLOBAL AND CHINA)
Alumina market analysis
Alumina demand is directly driven by growing downstream electrolytic aluminum
production. Backed by a robust global electrolytic aluminum market, CRU expects global
alumina demand to rise from 142 mt in 2025 to 149 mt in 2028, representing a CAGR of 1.6%.
China is the world’s largest alumina consumer. China’s alumina demand took up 59% of the
global demand in 2024. From the supply side, global production is forecast to increase from
143 mt in 2025 to 150 mt in 2028, representing a CAGR of 1.5%. China is the world’s largest
alumina producer. China’s alumina production took up 60% of the global production in 2024.
China, India and Indonesia are the three largest alumina production drivers, collectively
forecast to account for 95% of the production growth between 2024 and 2028.
INDUSTRY OVERVIEW
–1 1 4–


--- page 125 ---
Between 2018 and 2023, the global alumina market stayed balanced with the supply
slightly higher than the demand. Given the global alumina production disruption in 2024, a
market deficit of over 1 mt occurred in 2024 globally. In the future, the ramp-up of alumina
production will fulfil the current alumina market deficit. Therefore, the global alumina market
is forecast to recover from the current deficit position and stay at a one mt surplus by 2028.
Global alumina demand and supply, 2018-2028E, mt
2018 2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E
125125 123124 126127 131132 134134 137137 140139 142143 145146 147148 149150
Demand Supply
0
40
80
120
160
140
100
60
20
Alumina demand and supply
CAGR (%)
CAGR
(2018-2024)
CAGR
(2025E-2028E)
Global demand 2.0 1.6
Global supply 1.9 1.5
Source: CRU
Under the 45 mt of annual electrolytic aluminum production capacity cap, China’s
alumina demand is forecast to converge mildly to 84 mt in 2028, which is equal to the volume
required for 45 mt of electrolytic aluminum production capacity, and then plateau over the long
term.
China’s alumina production is expected to rise mildly in correspondence. CRU forecasts
China’s alumina production to increase by one mt from 2025 to 2028.
INDUSTRY OVERVIEW
–1 1 5–


--- page 126 ---
China alumina demand and supply 2018-2028E, mt
2018 2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E
71 72 69 68 72 69
75 72
78 77 80 80 83 83 84 85 84 86 84 86 84 86
Demand Supply
0
40
20
60
80
100
90
70
50
30
10
Alumina demand and supply
CAGR (%)
CAGR
(2018-2024)
CAGR
(2025E-2028E)
China demand 2.6 0.3
China supply 2.6 0.4
Source: CRU
Alumina price analysis
Historically, the purchasing price for alumina has been agreed upon as a percentage of
LME aluminum price. However, in recent years, the benchmark for the alumina prices has
gradually transformed to third-party references or indices, such as CRU global alumina price,
also known as API (Alumina Price Index), in the international market. In China, alumina
buyers refer more to the average price collected by domestic authoritative third parties, such
as Aladdiny, Baiinfo and Antaike.
INDUSTRY OVERVIEW
–1 1 6–


--- page 127 ---
CRU global and China alumina price, 2018-2028E, USD/t & RMB/t
473
332
271
330
364
CRU global Alumina Price index
345
503
390 370
390
410
2018
2019
2020
2021
2022
2023
2024
2025E
2026E
2027E
2028E
0
100
200
300
400
500
600
2,936
2,676
2,323
2,776
2,936
CRU China alumina price
2,906
4,030
3,127
2,963
3,123
3,283
2018
2019
2020
2021
2022
2023
2024
2025E
2026E
2027E
2028E
0
1000
2000
3000
4000
5000
Source: CRU, Industry sources
Note: CRU global alumina price is tax-excluded and CRU China alumina price includes the 13% value-added tax.
Alumina is an intermediate product in the aluminum value chain. Its prices are primarily
influenced by raw material availability and aluminum market fundamentals.
In 2018, global alumina production tightened due to sanctions on Rusal, an Alcoa strike
and the shutdown of the Alunorte refinery. Consequently, the CRU Global Alumina Price Index
surged to USD473 per ton. However, between 2019 and 2023, the global alumina production
witnessed surplus as public health crises weakened global demand. This led CRU’s global
alumina prices to stabilize within a relatively low range of USD271 to USD364 per ton. Amid
surging energy costs driven by inflation and recovering aluminum demand, alumina prices
climbed from USD271 per ton in 2020 to USD345 in 2023.
In 2024, alumina prices soared due to a global supply deficit. This was attributable to (i)
several alumina production disruption incidents as several refineries in Australia, India and
Brazil faced bauxite and energy supply constraints. Specifically, an alumina refinery in
Kwinana, Australia closed down in August 2024; an alumina refinery in India experienced
shipment delays in the second quarter of 2024 due to logistical disruptions in India; there was
a force majeure on bauxite shipments from Brazil’s Juruti Port due to a stranded vessel in
November 2024; and there was a force majeure on alumina refineries in Y arwun and
Queensland, Australia in May 2024 due to restricted local gas supply; (ii) temporary disruption
to Guinea bauxite shipments as discussed above; and (iii) China’s persistent high demand for
alumina as its electrolytic aluminum production reached a new high in 2024. By the end of
2024, the CRU Global Alumina Price Index had reached a record high of USD720 per ton, the
highest nominal level in over 35 years of CRU’s price reporting. Simultaneously, CRU China’s
alumina price rose to RMB5,763 per ton. As a result, there was a global alumina deficit of one
mt in 2024, with average alumina prices reaching USD503 per ton globally and RMB4,030 per
ton in China.
INDUSTRY OVERVIEW
–1 1 7–


--- page 128 ---
After 2024, CRU Global and CRU China alumina prices have declined sharply, averaging
USD475 per ton and RMB3,635 per ton for the first four months of 2025, respectively. The
price plunge is due to a shift in market balance from a deficit in 2024 to a surplus in 2025. On
the supply side, (i) most of the temporary alumina production disruptions seen in 2024 have
been resolved in 2025, the temporary disruptions in bauxite shipment have been gradually
resolved and global alumina production was sufficient to cover the resilient demand in 2025;
and (ii) new refinery capacity is expected to come online, in 2025 and 2026, partially because
many market players were drawn by the rising alumina market prices since the end of 2024,
prompting them to establish new alumina refining production lines or expand existing ones in
China and Indonesia. CRU forecasts global alumina production to increase by approximately
4 mt in 2025, versus demand growth of approximately 2 mt. Consequently, the global alumina
market is forecast to enter in a modest surplus in 2025, and alumina prices are forecast to
retreat from 2024 highs, averaging USD390 per ton globally and RMB3,127 per ton in China
by 2025. Alumina prices are primarily determined by market demand and supply, and are
determined only in a limited way by the cost of its raw material, such as bauxite. Therefore,
while bauxite prices increased in 2025, this did not translate into higher alumina prices in
China and globally.
Over the forecast period, alumina prices are expected to remain strong, staying above the
levels in 2020 due to rising bauxite prices and increasing global demand for electrolytic
aluminum. CRU alumina price is forecast to average USD410 per ton globally and RMB3,283
per ton in China by 2028. However, any further production disruptions could trigger another
price surge, as seen in 2024.
Alumina industry size analysis
By industry size, China dominates the global alumina market with a share of 66% in 2024.
From 2018 to 2024, its industry size rose from USD32 billion to USD46 billion, driven by
soaring alumina prices in 2024. In the future, China’s alumina industry size is forecast to
decline to USD39 billion in 2028 with the retreat of alumina prices. China’s share of alumina
industry size is expected to decline from 66% in 2024 to 64% in 2028, led by the plateauing
of China’s alumina demand under the 45 mt of annual electrolytic aluminum production
capacity cap.
Driven by both rises in alumina prices and demand, the global alumina industry size
excluding China is expected to expand from USD20 billion in 2025 to USD22 billion in 2028.
Southeast Asia and India are the two regions leading the global alumina industry growth as a
list of new alumina projects is expected to be commissioned there.
INDUSTRY OVERVIEW
–1 1 8–


--- page 129 ---
Global and China alumina industry size, 2018-2028E, USD Billion
2018 2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E
59
32
41
27
34
24
43
32
49
34
47
33
71
46
56
36
54
34
58
36
61
39
World China
0
40
20
60
70
80
30
10
50
Alumina industry size
CAGR (%)
CAGR
(2018-2024)
CAGR
(2025E-2028E)
China 7 3
Rest of World (2) 4
Total world 3 3
Source: CRU
Note: Global alumina industry size = Global alumina demand * CRU global alumina price; China alumina industry
size = China alumina demand * CRU China alumina price.
ELECTROLYTIC ALUMINUM ANALYSIS (GLOBAL AND CHINA)
Electrolytic aluminum market outlook
Global electrolytic aluminum demand has grown at a 3.4% CAGR during 2013-2024,
primarily driven by demand from Asia, notably China (20 mt growth from China, out of 22 mt
globally). Going forwards, CRU expects global aluminum demand to grow from 74 mt in 2025
to 77 mt in 2028, representing a slower CAGR of 1.6%. China, India, the US and Europe are
expected to be the four largest growing forces, contributing a total of two (out of three) mt
growth in electrolytic aluminum consumption.
At the same time, CRU forecasts the global aluminum production to grow from 74 mt in
2025 to 77 mt in 2028 (1.6% CAGR), with China contributing less than one mt. Outside China,
the production growth is expected to be 3 mt over 2024-2028 and most of this increase will be
from India, Indonesia and the Middle East.
INDUSTRY OVERVIEW
–1 1 9–


--- page 130 ---
Global electrolytic aluminum demand and supply, 2018-2028E, mt
2018 2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E
65 64 65 63 63 65 69 67 69 69 70 71 73 73 74 74 75 75 76 76 77 77
Demand Supply
0
40
20
60
80
100
Share of electrolytic aluminum demand
by country (%) 2024 2028E
China 62 59
US 7 7
India 4 4
Germany 2 2
Rest of world 26 27
Total world 100 100
Source: CRU
Backed by its robust industrialization and modernization process, China experienced
significant electrolytic aluminum consumption growth for the first two decades of this century.
Its consumption rose from 3 mt in 2000 to 45 mt in 2024 at 12.0% CAGR. CRU forecasts
China’s electrolytic aluminum demand to rise mildly from 45 mt in 2024 to close to 46 mt in
2028.
With rising demand, China’s production also increased from 2 mt in 2000 to 43 mt in 2024
at 13.6% CAGR. Under the 45 mt of annual electrolytic aluminum production capacity cap,
China’s supply growth slowed and switched to being a net importer in recent years. Meanwhile,
Inner Mongolia, Y unnan and Xinjiang are overtaking Shandong as China’s largest electrolytic
aluminum production bases, benefiting from their abundant green and affordable power
resources. In the future, the 45 mt to 46 mt consumption compared with the 43 mt to 44 mt
production forecast will mean a sustained deficit of over one to two mt each year.
INDUSTRY OVERVIEW
– 120 –


--- page 131 ---
China electrolytic aluminum demand and supply, 2018-2028E, mt
2018 2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E
36 36 36 35
38 37
40 39 41 40
43 42
45 43 45 43
46 44 46 44 46 44
Demand Supply
0
20
10
30
40
50
Share of electrolytic aluminum production
by province (%) 2024 2028E
Y unnan 12 18
Inner Mongolia 15 17
Xinjiang 14 14
Shandong 17 11
Rest of China 42 40
Total China 100 100
Source: CRU
Electrolytic aluminum price analysis
The London Metal Exchange (“LME”) aluminum cash price is in US dollars per ton of
electrolytic aluminum on LME deliverable in two days. The Shanghai Future Exchange
(“SHFE”) aluminum cash price is in RMB per ton of electrolytic aluminum on SHFE
deliverable in the immediate month.
Given the commodity nature of aluminum, the LME cash price and the SHFE cash price
are highly correlated, except for some deviations led by hedging, logistics and geopolitical
events.
INDUSTRY OVERVIEW
– 121 –


--- page 132 ---
The average price of electrolytic aluminum quoted on the website of Shanghai Metals
Market (᙮ၣ) reflects daily trading prices for electrolytic aluminum, based on surveys
and data collected from consumers, producers and traders across the Chinese market. The
SHFE cash price, on the other hand, tracks the spot prices per ton of electrolytic aluminum
traded on the Shanghai Futures Exchange (SHFE) under future contracts, referring to the spot
price per ton of electrolytic aluminum delivered in the immediate month. As confirmed by
CRU, it is accurate to refer to the SHFE cash price for analysis of the market price, even though
we use the price quoted on the Shanghai Metals Market as an indicator for market price in our
operations for the following reasons: (i) the SHFE cash price is a public price index published
by official resources with authority, namely the Shanghai Futures Exchange; (ii) the Shanghai
Metals Market is only available to paid subscribers and not easily accessible for market
research; (iii) it is in line with industry norms to use the SHFE cash price as an indicator for
the aluminum market price when conducting industry analysis. On the other hand, the price
quoted on the Shanghai Metals Market is the market price indicator typically used by market
players in China; and (iv) the price difference between the two prices is typically limited to
between RMB20 and RMB50 per ton of electrolytic aluminum traded with occasional outliers,
and is unlikely to cause confusion or lead to ineffective analysis.
LME and SHFE price, 2018-2028E, USD & RMB
2,110
1,791
1,704
2,480
2,703
LME cash, USD
2,249
2,419 2,418
2,6052,441
2,755
2018
2019
2020
2021
2022
2023
2024
2025E
2026E
2027E
2028E
0
1,000
2,000
3,000
4,000
2,604
14,197
13,902 14,119
18,936
19,945
SHFE cash, RMB
18,678
19,949 20,050
21,550
20,107
22,913
2018
2019
2020
2021
2022
2023
2024
2025E
2026E
2027E
2028E
0
5,000
10,000
15,000
20,000
25,000
Source: CRU, SHFE, LME
Note: LME price is tax-excluded and SHFE cash price includes the 13% value-added tax.
The aluminum market price presents cyclicity, which is fundamentally driven by changing
market demand and supply dynamics as well as political, economic and environmental
alterations across major aluminum producers and consumers.
INDUSTRY OVERVIEW
– 122 –


--- page 133 ---
The global aluminum market remained bearish between 2013 and 2015, with the LME
price declining from USD1,845 per ton to USD1,661 per ton. The dampening price was
superseded from a persistently weak global demand since 2011 due to the European debt crisis
and the ramping up of new production capacity of Chinese electrolytic aluminum producers.
Following the trough around 2015, the aluminum market entered a period of relative recovery.
In 2018, the global aluminum market revealed a market deficit of over one mt. This brought
SHFE and LME prices to RMB14,197 per ton and USD2,110 per ton in 2018, respectively. The
global health incident during 2020 and 2021 had a profound effect on the aluminum market.
In 2020, the global aluminum market revealed a surplus of two mt due to economic
contractions. This led to a decrease in the LME price to USD1,704, which remained bearish
until mid-2021. In 2021, both SHFE and LME prices soared, given the friction related to the
public health incidents on supply chains and ultra-expansionary monetary policies across the
globe. After 2022, both SHFE and LME prices retreated due to the disruption arising from the
Russia-Ukraine war, with Europe experiencing significant economic headwinds and China
experiencing an economic slowdown. In 2024, both SHFE and LME prices recovered as the
global electrolytic aluminum market revealed a deficit of 35 kt.
Over the forecast period, CRU expects the electrolytic aluminum prices to rise mildly
under a tighter demand-supply balance. From the demand side, the key growth drivers
including energy transition, electrification and lightweight automotive are forecast to paint a
positive outlook, especially for China. From the supply side, China’s 45 mt of annual
electrolytic aluminum production capacity cap and Western producers’ hesitancy to invest in
the new aluminum smelting capacity indicate a relatively slow growth in aluminum production,
which pushes up the electrolytic aluminum prices. Hence, CRU forecasts the SHFE and LME
prices to rise from RMB20,107 per ton and USD2,418 per ton in 2025 to RMB22,913 per ton
and USD2,755 per ton, respectively, in 2028, at a CAGR of 4.5% and 4.4%, respectively.
Alumina and electrolytic aluminum are expected to show different price trends between
2025 and 2028, given their differences in market demand and supply fundamentals. More
specifically, the global alumina market deficit for 2024 is expected to be resolved with the
commissioning of new alumina projects. Over the forecast period, the alumina market is
expected to enter a small surplus of between 200 and 400 kt. As such, the price of alumina is
forecast to decrease from 2024’s high point and stay relatively flat. On the other hand, for
electrolytic aluminum, its global market is forecast to remain in a tight balance position, given
the downstream burgeoning demand, the nearing of the 45 mt production capacity cap set by
the relevant government authorities in China and Western producers’ hesitancy to invest in new
capacity. For China, an electrolytic aluminum market deficit over one mt will be sustained until
2028. As such, the electrolytic aluminum price is forecast to rise mildly.
INDUSTRY OVERVIEW
– 123 –


--- page 134 ---
Electrolytic aluminum industry size analysis
China is currently dominant in the electrolytic aluminum industry and is expected to
maintain this leadership position. China’s industry size is expected to grow from USD125
billion in 2024 to USD148 billion in 2028, representing 71% and 69% of the global industry
size, respectively. The decline in China’s share is mainly due to the slow peaking of China’s
electrolytic aluminum production over the forecast period.
Global and China Electrolytic Aluminum Industry Size, 2018-2028E, USD Billion
2018 2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E
138
77
116
73
107
77
171
118
187
121
158
113
176
125
178
124
183
124
199
136
213
148
World China
0
100
50
150
200
250
Electrolytic aluminum industry size
CAGR (%)
CAGR
(2018-2024)
CAGR
(2025E-2028E)
China 8 6
Rest of World (3) 7
Total world 4 6
Source: CRU
Note: Global electrolytic aluminum industry size = Global electrolytic aluminum demand * LME price; China
electrolytic aluminum industry size = China electrolytic aluminum demand * SHFE price.
Government policies that drive the growth of the market
On March 28, 2025, the MIIT issued the Aluminum Industry High Quality Development
Initiative 2025-2027 (ࣩ2025-2027 ϋ)). In this initiative, the
government outlines key regulatory requirements aimed at promoting high-quality
development in the aluminum industry. For electrolytic aluminum, the initiative confirms that
the current annual electrolytic aluminum production capacity cap of approximately 45 mt will
remain in effect. The renewable energy target for electrolytic aluminum smelting has been
raised from 25% by 2025 to 30% by 2027. New aluminum smelting projects are encouraged
to use electrolysis cell technology with a capacity of 500 kiloamperes and above. According
to CRU, stricter renewable energy requirements will help aluminum smelters move away from
traditional coal-fired areas to regions with green energy sources, such as Inner Mongolia,
INDUSTRY OVERVIEW
– 124 –


--- page 135 ---
Y unnan and Xinjiang. Aluminum smelters that do not meet these renewable energy standards
or fail to adopt the 500 kiloamperes technology may be phased out. The initiative also promotes
the expansion of downstream applications for electrolytic aluminum, encouraging its use as an
alternative to copper, steel and wood in certain applications. This shift is expected to strengthen
China’s overall electrolytic aluminum consumption. Additionally, China encourages aluminum
companies to enhance cooperation with resource-rich countries and increase participation in
the global supply chain.
China’s electrolytic aluminum production cap of 45 Mt is binding, whereas there is no
binding national production quota for alumina. This is because alumina is a midstream
intermediate product with demand directly tied to electrolytic aluminum production, and its
refining process is less value-added than smelting. Instead of a quota, China is optimizing the
alumina industry through strict regulations. Under the Aluminum Industry High-Quality
Development Initiative 2025-2027, new alumina projects must be prudentially constructed,
meeting rigorous standards for raw materials, environmental protection and red mud utilization
rate. For example, new alumina refining capacity will not be allowed in key areas of air
pollution control and the utilization rate of red mud needs to be 15% or above.
Competitive Landscape Analysis
Electrolytic aluminum smelter production ranking
Within CRU’s tracked database, our Group is the twelfth-largest electrolytic aluminum
producer in terms of production output in 2024 in China with a market share of approximately
1.8%. The five largest electrolytic aluminum producers in total produced approximately 20 mt
in 2024, representing approximately 46% of China’s total electrolytic aluminum market share.
Among CRU’s tracked database, our Group has the fourth-largest electrolytic aluminum
production base in North China with a market share of approximately 9.7% (based on
production output in 2024).
Top 5 China electrolytic aluminum producers’
(1) market share (%), 2024
Ranking Producer
Production
(kt)
Market Share
(%)
1 Producer A (2) 5,892 13.7
2 Producer B (3) 5,134 11.9
3 Producer C (4) 3,700 8.6
4 Producer D (5) 2,987 6.9
5 Producer E (6) 2,150 5.0
Source: CRU, industry sources
INDUSTRY OVERVIEW
– 125 –


--- page 136 ---
Notes:
(1) In the CRU database, the electrolytic aluminum producer refers to the electrolytic aluminum production
company.
(2) Producer A is a private vertically integrated aluminum producer established in China. The company mainly
operates in the production of bauxite, alumina, electrolytic aluminum and fabricated products. The company
is publicly listed on the Hong Kong Stock Exchange.
(3) Producer B is a Chinese state-owned vertically integrated aluminum producer established in China. The
company mainly operates in the production of bauxite, alumina, electrolytic aluminum, carbon anode and coal.
The company is publicly listed on the Hong Kong Stock Exchange.
(4) Producer C is a private vertically integrated aluminum producer established in China. The company mainly
operates in the production of alumina, electrolytic aluminum and aluminum products. The company is not
publicly traded on any stock exchange.
(5) Producer D is a Chinese state-owned enterprise specializing in energy. The company mainly operates in
hydropower, thermal power, nuclear power, new energy and aluminum production. Its aluminum segment is
listed on the Shenzhen Stock Exchange.
(6) Producer E is a private diversified company established in China. The company mainly operates in the
agricultural and chemical sectors. The company is not publicly traded on any stock exchange.
Electrolytic aluminum smelter cash cost ranking
CRU models the cash costs of global electrolytic aluminum smelters, including smelters
in China. The average cash cost for an electrolytic smelter is approximately USD2,275 per ton
globally and approximately USD2,460 per ton for China in 2024. According to CRU, our
ability to manage the cash costs of aluminum per ton was among the top 5% of all aluminum
smelting companies in China.
The cash cost is the direct costs involved in the smelting process. CRU cash cost of
producing electrolytic aluminum includes alumina costs, power process cost, labor costs, fuel
process costs, carbon cash costs, maintenance process and other supply costs, bath material
costs, pot relining costs, casthouse cash costs, and carbon emission costs.
Electricity costs and cost of alumina are the two largest cost items for electrolytic
aluminum production cost, accounting for approximately 36% and 46% of total electrolytic
aluminum production costs in China in 2024, respectively. Costs of alumina usually do not vary
significantly due to the nature of the commodity, leaving electricity costs as the biggest
differentiating factor in cost efficiency. Electricity costs depend on both the electricity
consumption of aluminum per ton and the electricity price where the smelter is located. In
2024, our Group reported an electricity consumption of 13,366 kWh per ton of electrolytic
aluminum produced, which was lower than the industry average of 13,670 kWh per ton. In the
five months ended May 31, 2025, our Group reported an electricity consumption of 13,314
kWh per ton of electrolytic aluminum produced. In addition, our Group has benefitted from the
low electricity prices enabled by its electricity generation capability and Inner Mongolia’s
abundant power resources. In 2024, our Group reported a cost of electricity consumption of
current coal-fired thermal power generation of RMB0.37/kWh, which is lower than the national
average of RMB0.43/kWh. In the five months ended May 31, 2025, our Group reported a cost
of electricity consumption of current coal-fired thermal power generation of RMB0.33 per
INDUSTRY OVERVIEW
– 126 –


--- page 137 ---
kWh. Benefitting from the advantages in the efficiency of electricity consumption and the
electricity price, our Group has an average electricity cost of aluminum smelting, namely the
power process cost under CRU cash cost, of approximately RMB5,439 per ton, RMB5,266 per
ton and RMB4,786 per ton of electrolytic aluminum produced in 2022, 2023 and 2024,
respectively. This is significantly lower than China’s industry average of approximately
RMB6,153 per ton, RMB6,039 per ton and RMB5,878 per ton during the same periods,
respectively. Other minor factors contributing to our cash cost control ability include lower
labor costs due to our high labor production efficiency. During the Track Record Period, our
Group’s electrolytic aluminum production per capita was between approximately 590 tons and
670 tons, which was over two times higher than that of the industry average during the same
period. Our Group’s cash cost in 2024 was approximately RMB15,112 per ton, significantly
lower than China’s average of approximately RMB17,700 per ton, according to CRU. Our
Group’s cash cost in the five months ended May 31, 2025 was approximately RMB14,791.7 per
ton.
Entry barrier analysis
In the electrolytic aluminum industry, existing major producers usually get to keep their
competitive position for a relatively long period, as barriers to entry are relatively high,
including the following:
Policy barriers
Constructing a new alumina refinery or electrolytic aluminum smelter requires regulatory
approvals and compliance with industrial policies at both national and municipal levels.
There is no specific quota on China’s total alumina production capacity. Any new refinery
project requires obtaining approvals from the local authorities or the National Development
and Reform Commission (NDRC), depending on the project size. Under the Action Plan for
Energy Saving and Decarbonization (2024-2025) ( 2024-2025(਷೯
[2024]12 ໮)), the Chinese authority emphasizes the need to control new refining capacity for
alumina.
There is a 45 mt cap in China’s annual electrolytic aluminum production capacity for
aluminum smelters. Therefore, new entrants need to either replace or acquire existing capacity.
High capital investment barriers
Alumina refineries and electrolytic aluminum smelters are capital-intensive. CRU
estimates the average unit capital expenditure for China’s recent investment in greenfield
smelter projects is approximately USD1,349 per ton. The costs include infrastructure
construction, associated environmental control systems, as well as the purchase of equipment
and facilities, such as power plants, water treatment systems and steam generation systems. In
addition, compliance with environmental regulations — especially regarding emissions, red
mud waste, and water use disposal — demands costly environment control systems.
INDUSTRY OVERVIEW
– 127 –


--- page 138 ---
Challenges of the aluminum industry
Access to stable raw material challenge
Access to stable bauxite resources is not easy especially for new Chinese refineries as
China has been relying on imports and global markets for bauxite are currently tight. Indonesia
has banned bauxite exports from 2023, which means China’s bauxite imports will rely more on
Guinea and Australia. As Guinea faces political instability and infrastructure backwardness, the
bauxite industry in the country has contended with several challenges in the past. In September
2021, the military coup led to some initial disruptions in mining operations and export logistics
as many large bauxite companies were concerned about the safety of their operations. In
December 2023, the oil terminal explosion in Guinea’s capital Conakry damaged the
transportation networks, which caused delays in shipping bauxite to the international market.
In October 2024, the bauxite export from Global Alumina Corporation was suspended due to
a combination of political and logistical challenges. However, Guinea remains the world’s
largest bauxite producer. In 2024, around 71% of Chinese imported bauxite was from West
Africa, notably Guinea, and this trend is forecast to continue in the future. Australia is China’s
second-largest bauxite importer, accounting for 25% of China’s bauxite import in 2024.
Australia-China bauxite trade might face geopolitical risks such as tense diplomatic relations
between the two countries. These tensions might lead to trade disputes and higher tariffs on
Australian exports to China, including bauxite.
Access to green energy challenge
Access to stable green energy is another challenge at regulatory and market
competitiveness levels. Electricity is one of the largest operational costs in smelting. In 2024,
the Chinese authorities issued the Action Plan for Energy Saving and Decarbonization
(2024-2025). The plan explicitly sets the objective to achieve 25% green energy in the
electrolytic aluminum industry by 2025. In the same year, the authorities officially introduced
the GECs (Green Electricity Certifications). Although the GECs are now non-binding for
aluminum producers, it is possible that in the future aluminum producers who fail to meet the
green energy requirement will need to purchase GECs to validate green energy generation.
Trade-wise, aluminum exports might face trade barriers if they fail to meet the green-carbon
standard imposed by the importing country. Europe’s CBAM (Carbon Border Adjustment
Mechanism) introduces a charge on aluminum imports based on emission level. The official
charging will come into effect in 2026. Other countries such as the US and Japan are also on
the path to similar policies and the world might see more regulations on carbon-related tariffs.
Key development trends in the aluminum industry
Shifting to green aluminum from both production and consumption
As decarbonization becomes a universal consensus, the aluminum industry sees a shift to
green aluminum on both supply and demand sides.
INDUSTRY OVERVIEW
– 128 –


--- page 139 ---
From the supply side, smelters worldwide have started to shift from traditional power to
green power. In recent years, Chinese smelters have been relocated from the traditional
coal-fired areas to areas with green energy. Inner Mongolia, Y unnan, and Xinjiang are the most
popular destinations for Chinese smelters for energy. In addition, it is geographically proximate
to the downstream aluminum consumption base in North and East China for sales of aluminum
ingots. Inner Mongolia is geographically closer to key downstream markets than Xinjiang and
Y unnan, enhancing logistical efficiency for ingot sales. For sales of liquid aluminum, our
Group’s electrolytic aluminum sales benefit from the aluminum industry cluster in
Huolinguole, Inner Mongolia, where several downstream aluminum alloy processors capable
of a combined production of approximately 3 mt serve as potential customers. This demand
significantly exceeds our Group’s annual production capacity of 788.1 kt. Y unnan is rich in
hydropower resources, but hydropower fluctuates seasonally, which becomes problematic for
aluminum smelting during dry seasons. Xinjiang benefits from lower-cost, and stable
coal-based power. Besides, its abundance of wind and solar resources provides the potential for
future green electricity transition. However, Xinjiang is far from major ports and the domestic
end-use markets, resulting in higher transportation costs for raw materials and final products,
which offsets its advantages in power.
At the demand side, consumers’ preferences have also been shifting. Global brands
especially in the automotive, electronics, and consumer goods sectors, are increasing their
demand for green aluminum in their products, which triggers premium for green aluminum
products.
V ertical integration of the aluminum industry
It is common for smelters to integrate upwardly with refineries worldwide. Many large
aluminum producers own both smelters and refineries. For smelters, integration with a refinery
helps guarantee a reliable supply of alumina and minimizes exposure to external supply
disruptions or price volatility. Additionally, it enables more efficient production coordination
between refining and smelting units, improving the producers’ reaction to market changes.
Overseas expansion of the aluminum industry
In recent years, it has become more popular for Chinese aluminum companies to expand
overseas. This is partially driven by China’s 45 mt of annual electrolytic aluminum production
capacity cap, deficit in bauxite resources, and cost advantages in some regions. Investing in
aluminum value chain overseas allows Chinese companies to increase competitiveness by
accessing stable raw material supply, lowering the production cost, or increasing the proximity
to the overseas buyer market. CRU has observed several overseas projects invested by Chinese
companies along the aluminum value chain.
A larger use of liquid aluminum for aluminum alloy
Electrolytic aluminum is produced and sold for downstream alloy uses in either ingot or
liquid forms. Liquid aluminum can be safely transported up to a 50 km radius. In recent years,
it has become more common for smelters to sell liquid aluminum to downstream alloy
processors for economic efficiency.
INDUSTRY OVERVIEW
– 129 –


--- page 140 ---
From the economic efficiency perspective, short-distance transportation of liquid
aluminum benefits both upstream electrolytic aluminum manufacturers and downstream alloy
processors. This is because, as compared to long-distance ingot transportation, use of short
distance transported liquid aluminum (i) saves costs on transportation fees; (ii) reduces loss of
liquid aluminum during transportation; and (iii) saves energy for heating or remelting by
downstream aluminum alloy processors.
In 2024, approximately 72% of electrolytic aluminum in China is sold in liquid form.
Under the Action Plan for Energy Saving and Decarbonization (2024-2025), the Chinese
authority encourages that at least 90% of electrolytic aluminum shall be converted into liquid
aluminum for downstream aluminum alloy. This policy is viewed as non-coercive, and CRU
has not observed any substantial incentives or penalties regarding the policy. Furthermore,
Aluminium Industry High-Quality Development Initiative 2025-2027 encourages the direct use
of liquid aluminum in downstream aluminum alloying.
Uncertainty on the US tariff
In August 2018, the U.S. imposed a 25% tariff on Chinese aluminum products. On March
12, 2025, the U.S. imposed additional 25% tariffs on aluminum products from all countries,
which was subsequently doubled to 50%, effective from June 4, 2025. This series of tariff
increases on aluminum products is expected to have a limited direct impact on China’s
electrolytic aluminum industry because China has a relatively small export of electrolytic
aluminum and aluminum products to the U.S. According to the statistics of the General
Administration of Customs of the People’s Republic of China, China only exported 1.7 kt of
aluminum ingots to the U.S. in 2024, which accounted for less than 0.01% of China’s total
electrolytic aluminum production in the same year. In terms of downstream products, China
exported 260 kt of aluminum products to the U.S. in 2024, accounting for approximately 4%
of China’s total aluminum product export during the same year.
On February 4, 2025, the U.S. imposed 10% tariffs on all Chinese imports. On March 4,
2025, the U.S. further imposed additional 10% tariffs on all Chinese imports. On April 2, 2025,
the U.S. further announced reciprocal tariffs on all its trade partners, including an additional
34% tariff on imports from China. According to the latest announcement, and as confirmed by
CRU, certain imports, including aluminum products, will be excluded from the reciprocal
tariffs scheme. In 2024, China exported 6.3 mt of aluminum products overseas. For
aluminum-made components contained in various downstream end-uses, China’s export values
are difficult to measure. In this case, tariff policies imposed by the U.S. on imports may
indirectly affect the global consumption of all goods made in China, which includes Chinese
aluminum products as well as products containing aluminum-made components. The decreased
demand for any such products containing aluminum-made components may indirectly reduce
the demand for China’s upstream electrolytic aluminum products, the extent of which remains
uncertain.
INDUSTRY OVERVIEW
– 130 –


--- page 141 ---
Nonetheless, any further aggressive tariff policies imposed by the U.S., as well as
unofficial announcements on social media or during public speeches by President Trump and
other government officials, on foreign imports can influence the growth of the global economy
and the level of consumption, thereby indirectly impacting the overall pricing in the global
aluminum industry. This may create a challenging environment for all the players in the
industry.
SOURCE OF INFORMATION
We have commissioned CRU International Limited (“CRU”), through its Chinese division
CRU (Beijing) Consulting Limited, to analyze and report on the current status of, and forecasts
for, the selected industries in which we operate. We agreed to pay CRU a fee of RMB680,000
for the preparation and use of the CRU Report. Unless otherwise indicated, historical values,
estimates or forecasts in this section represent the views of CRU.
CRU offers business intelligence on the global metals, mining and fertilizer industries
through its market analysis, price assessments, consultancies, and events. Since its foundation
in 1969, CRU has consistently invested in primary research and developed robust market
assessment methodologies. CRU is a globally recognized leader in aluminum market research.
Since 1970, CRU has been dedicated to researching the aluminum market by analyzing the
aluminum demand, supply, and prices. CRU’s robust approach and market analysis background
have led to CRU price indices — particularly the CRU Alumina Price Index — being widely
adopted in the physical market by traders, buyers, and sellers. The consulting team of CRU has
served countless globally renowned aluminum market participants with our independent
market studies. It also has extensive experience acting as the industry expert for IPOs,
including in Hong Kong and for aluminum producers. The CRU brand name is associated with
integrity and independence and is well-regarded by the financial community.
In preparing this report CRU has relied on data either developed internally or obtained
from the public domain. CRU regularly develops its market outlooks through its expert
analysis team. Public domain data may include information obtained from sources such as
published corporate annual reports, trade data reported by governments or independent
research publications.
The forecasts made by CRU in this report rely on the following assumptions: (i) the
global social and political climate is not expected to have any major disruptions; (ii) global
economies are expected to maintain steady growth trajectories in the forecast period; and (iii)
each commodity discussed in the CRU Report performs according to general economic
theories.
Our Directors have confirmed, after making reasonable inquiries and exercising
reasonable care, that there is no adverse change in the market information since the date of the
CRU Report which may qualify, contradict or impact the information disclosed in this section.
INDUSTRY OVERVIEW
– 131 –


--- page 142 ---
This section summarizes the principal PRC laws, rules and regulations that are relevant
to our business and operations in China.
PRC LA WS, REGULATIONS AND POLICY DOCUMENTS RELATED TO THE
ELECTROLYTIC ALUMINUM AND ALUMINA INDUSTRIES
Industrial Classification
According to the National Economic Industry Classification ( ਷͏຾᏶Бุʱᗳ)
(GB/T4754-2017) (revised in 2019), the industry in which the Company operates is Aluminum
Smelting (classification code: C3216) under Common Non-ferrous Metal Smelting
(classification code: C321) in Non-ferrous Metal Smelting and Rolling Processing Industry
(classification code: C32).
Industrial Policies
According to the Guiding Catalog for Industrial Structure Adjustments ( ପุഐ࿴ሜ዆
ኬͦ፽(2024 ϋ͉)) (V ersion 2024), which was promulgated and became effective on
December 2, 2005, revised on March 27, 2011, February 16, 2013, October 30, 2019, and
December 27, 2023 and became effective on February 1, 2024 by the National Development
and Reform Commission (the “NDRC”), new construction and expansion of electrolytic
aluminum projects (excluding capacity replacement projects) are under the restricted category.
According to the Standard Conditions for the Aluminum Industry ( ቙Бุ஝ᇍૢ΁)
issued by the Ministry of Industry and Information Technology (the “MIIT”) on February 28,
2020, bauxite mining and the production of alumina, electrolytic aluminum and secondary
aluminum shall comply with the requirements of national and local industrial policies, mineral
resources planning, laws, regulations and policies on environmental protection and energy
conservation, mining laws, regulations and policies, laws, regulations and policies on
production safety, and industry development planning, etc. Alumina and electrolytic aluminum
enterprises shall be filed with the relevant authorities in accordance with the relevant
provisions of the State. Alumina enterprises shall satisfy the external conditions such as
bauxite resources and red mud storage, and electrolytic aluminum enterprises shall ensure the
long-term and stable supply of alumina, power and water resources. Electrolytic aluminum
enterprises are encouraged to realize the integrated development of hydropower aluminum,
coal-aluminum or aluminum power through restructuring.
Energy Conservation and Environmental Protection
According to the Opinions on Accelerating the All-round Green Transformation of
Economic and Social Development (จԈ)
promulgated by the Central Committee of the Communist Party of China and the State Council
on July 31, 2024, China vigorously promotes the Green and Low-carbon Transformation in
such industries as iron and steel, non-ferrous metals, petrochemicals, chemicals, building
materials, papermaking, printing and dyeing, promotes energy-saving, low-carbon and cleaner
REGULATORY OVERVIEW
– 132 –


--- page 143 ---
production technologies and equipment, and promotes the renewal and upgrading of process
flows. We should optimize capacity scale and layout, continuously update binding standards
for land, environment, energy efficiency, water efficiency and carbon emissions, guide the
optimization and upgrading of traditional industries by the improvement of national standards,
and establish and improve the exit mechanism for capacity. We should reasonably raise the
resource and environmental access threshold for new, reconstruction and expansion projects,
and resolutely curb the blind initiation of high energy consumption, high emission and
low-level projects.
According to the Work Plan for Accelerating the Construction of the Dual Control System
for Carbon Emissions () promulgated by the
General Office of the State Council on July 30, 2024, to accelerate the construction of the Dual
Control System for Total Carbon Emissions and Intensity (hereinafter referred to as the “Dual
Control System for Carbon Emissions”). By 2025, the Carbon Emissions Statistics and
Accounting System will be further improved, and a batch of industrial and enterprise Carbon
Emissions Accounting Standards and Product Carbon Footprint Standards will be promulgated
and implemented; by the 15th Five-Y ear Plan period (2026-2030), the Dual Control System for
Carbon Emissions with the intensity control as the focus and the total control as the supplement
shall be implemented. By focusing on the industrial industries of electric power, steel,
non-ferrous metals, building materials, petrochemicals, chemicals and other industries and the
fields of urban and rural construction and transportation, we shall conduct carbon emission
accounting in key industries, focus on electric power, fuel, steel, electrolytic aluminum and
other key products under the principle of urgent needs first, and organize relevant industry
associations, enterprises, scientific research institutions and other entities to formulate and
issue industry standards or group standards for product carbon footprint accounting.
According to the Circular on the Weight of Responsibilities for Renewable Energy-
generated Power Consumption in 2025 and the Relevant Matters (׵2025 ϋ̙Ύ͛ঐ๕ཥ
) promulgated by the General Office of the NDRC and the
Comprehensive Department of the National Energy Administration (the “NEA”) on July 1,
2025, in order to help achieve peak carbon neutrality and promote the high-quality
development of renewable energy, a new target for the proportion of green power consumption
in the electrolytic aluminum industry has been set. Specifically, the proportion of green power
consumption in the electrolytic aluminum industry in Inner Mongolia in 2025 is expected to be
30.7% and the expected proportion of green power consumption in the electrolytic aluminum
industry in 2026 is 31.7%. The achievement of the proportion of green electricity consumption
by enterprises in electrolytic aluminum industry shall be calculated based on green certificates
and the proportion of green electricity consumption by enterprises in 2025 will be assessed by
relevant government authorities.
According to the Special Action Plan for Energy Conservation and Carbon Reduction in
the Electrolytic Aluminum Industry (ྌ) jointly
promulgated by the NDRC, the MIIT, the Ministry of Ecology and Environment (the “MEE”),
the State Administration for Market Regulation (the “SAMR”) and the NEA on July 3, 2024,
by the end of 2025, the capacity above the energy efficiency benchmark level in the
REGULATORY OVERVIEW
– 133 –


--- page 144 ---
Electrolytic Aluminum Industry will reach 30%; the capacity below the energy efficiency
benchmark level will be technically transformed or eliminated; the proportion of renewable
energy utilization in the industry will reach 25% or more, and the output of secondary
aluminum will reach 11.5 million tons. Through the implementation of the transformation for
energy conservation and carbon reduction, the electrolytic aluminum industry will save about
2.5 million tons of standard coal and about 6.5 million tons of carbon dioxide emissions from
2024 to 2025. By 2025, the direct alloying proportion of aluminum will reach more than 90%.
By the end of 2030, the energy consumption and carbon emissions per unit of product in the
electrolytic aluminum industry will be significantly reduced, the use of renewable energy will
be further increased, the supply capacity of high-end aluminum products will be greatly
improved, and the industry will achieve remarkable progress in green and low-carbon
development.
According to the Action Plan for Energy Conservation and Carbon Reduction 2024-2025
(2024-2025) promulgated by the State Council on May 23, 2024, it is
required to optimize the capacity layout of non-ferrous metals and vigorously developing the
secondary metal industry. We should tighten the access of new non-ferrous metal projects.
New, renovated and expanded electrolytic aluminum projects shall reach the energy efficiency
benchmark level and Grade A environmental protection performance, and new, renovated and
expanded alumina projects shall reach the advanced value of mandatory energy consumption
limit standard.
According to the Notice on Issuing the Principles for the Examination and Approval of
Environmental Impact Assessment Documents of Construction Projects in Four Industries:
Integrated Circuit Manufacturing, Lithium Ion Battery and Related Battery Materials
Manufacturing, Electrolytic Aluminum and Cement Manufacturing (Ι೯ණϓཥ༩Ⴁ
ணධͦᐑྤᅂᚤ൙ᄆ˖
) promulgated by the MEE on December 5, 2023, electrolytic aluminum
construction projects must comply with the relevant laws and regulations on ecological and
environmental protection, statutory plans, and the relevant policy requirements for industrial
structure adjustment, regional and industrial carbon peak and carbon neutral targets, and total
control of key pollutants. Electrolytic aluminum projects are encouraged to use green
electricity, aluminum electrolysis, low-temperature electrolytic gas waste heat utilization, new
cathode energy saving and anode protection, aluminum water direct alloying and other
collaborative pollution reduction and carbon reduction technologies. We also encourage the
comprehensive utilization of overhaul residue, aluminum ash residue, carbon residue and waste
tar.
According to the Implementation Plan for Reaching Peak in the Non-ferrous Metal
Industry () jointly promulgated by the MIIT, the NDRC and
the MEE on November 10, 2022, we should adhere to the restriction of the total electrolytic
aluminum capacity, strictly implement the capacity replacement measures, and study the
differentiated electrolytic aluminum capacity reduction replacement policies. We should
increase the proportion of renewable energy use, encourage enterprises to orderly transfer to
renewable energy-rich areas on the premise that the resources and environment are sustainable,
REGULATORY OVERVIEW
– 134 –


--- page 145 ---
and gradually reduce the electrolytic aluminum capacity that uses thermal power. We should
strive to reach 25% and 30% or more of renewable energy in electrolytic aluminum in 2025 and
2030 respectively. Efforts should be made to ensure that the non-ferrous metal industry will
achieve carbon peak before 2030.
According to the Several Opinions on Tightening Energy Efficiency Constraints to
Promote Energy Conservation and Carbon Reduction in Key Areas (Ҽપਗ
ʍจԈ) jointly promulgated by the NDRC, the MIIT, the MEE, the
SAMR and the NEA on October 18, 2021, by 2025, through the implementation of energy
conservation and carbon reduction actions, the capacity of steel, electrolytic aluminum,
cement, plate glass, oil refining, ethylene, synthetic ammonia, calcium carbide and other key
industries and data centers will reach the benchmark level of more than 30% of the capacity,
the overall industry energy efficiency level will be significantly improved, the carbon emission
intensity will be significantly reduced, and the capacity for green and low-carbon development
will be significantly enhanced.
According to the Circular on the Policy of Tiered Electricity Prices for Electricity
Consumed by Electrolytic Aluminum Enterprises (ٙ
) issued by the NDRC and the MIIT on December 13, 2013, and effective as of January
1, 2014, tiered electricity prices shall be implemented for electrolytic aluminum enterprises
and preferential electricity price measures shall be strictly prohibited in order to regulate direct
electricity transactions between electrolytic aluminum enterprises and power generation
enterprises.
According to the Circular on Improving the Tiered Electricity Price Policy for the
Electrolytic Aluminum Industry (), which was
promulgated by the NDRC on August 26, 2021, and became effective on January 1, 2022, it
is required to improve the classification and markup standards for Tiered electricity prices, and
it is strictly prohibited to implement preferential electricity price policies for the Electrolytic
Aluminum Industry.
Capacity Replacement
According to the Action Plan for Energy Conservation and Carbon Reduction 2024-2025
(2024-2025) issued by the State Council on May 23, 2024, capacity
replacement for electrolytic aluminum shall be strictly implemented and new smelting capacity
such as alumina shall be strictly controlled.
According to the Circular on Matters Relating to the Implementation of Capacity
Replacement by Electrolytic Aluminum Enterprises through Merger and Reorganization and
Other Means () issued
by the MIIT on January 1, 2018, for construction projects involving electrolytic process to
produce aluminum liquid and aluminum ingots, the Electrolytic Aluminum capacity
replacement index shall be obtained through the following two methods: 1) through merger and
reorganization, and internal capacity transfer within the enterprise group with the same actual
REGULATORY OVERVIEW
– 135 –


--- page 146 ---
controller; and 2) through capacity quota trading. A capacity replacement plan shall be
formulated, and the equivalent or reduced capacity replacement shall be implemented. The
electrolytic aluminum capacity replacement indicators obtained by enterprises shall be
preferentially used for their existing construction projects that have not completed capacity
replacement. In principle, the indicators shall not be used for other new construction projects
that have not completed capacity replacement for their existing projects.
According to the Guiding Opinions on Creating a Favorable Market Environment to
Promote Adjustment of Structure, Transformation and Increase of Efficiency in Non-ferrous
Metal Industry (ኬจ
Ԉ) promulgated by the General Office of the State Council with effect on June 5, 2016, new
capacity shall be strictly controlled. For necessary new (renovation and expansion) projects of
electrolytic aluminum, the equivalent or reduced capacity replacement plan shall be strictly
implemented and publicized online.
LA WS AND REGULATIONS ON ELECTRIC POWER BUSINESS
Approval and Record-Filing of Power Plant Projects
According to the Renewable Energy Law of the People’s Republic of China ( ʕശɛ͏
) promulgated by the Standing Committee of the National People’s
Congress on February 28, 2005, revised on December 26, 2009, and implemented on April 1,
2010, Renewable Energy includes wind energy, solar energy, water energy and other non-fossil
energy. The State gives priority to the development and utilization of renewable energy in
energy development and promotes the establishment and development of the renewable energy
market by establishing total volume targets for the development and utilization of renewable
energy and taking corresponding measures.
On May 14, 2014, the NDRC promulgated the Administrative Measures on Investment
Projects Subject to Governmental Approval (), which were
implemented on June 14, 2014, and these Measures were superseded by the Administrative
Measures on Approval and Record-filing of Enterprise Investment Projects (ࣨ
) promulgated on March 8, 2017, amended on March 23, 2023 and
effective on May 1, 2023. On October 31, 2014, the State Council promulgated the Catalogue
of Investment Projects Subject to Governmental Approval (2014 V ersion) (ҳ༟
ධͦͦ፽(2014 ϋ͉)), which was superseded by the Catalogue of Investment Projects
Subject to Governmental Approval (2016 V ersion) (ҳ༟ධͦͦ፽(2016 ϋ͉))
(“Approved Catalogue”) promulgated on December 12, 2016. According to the aforesaid
regulations, fixed asset investment projects falling within the Approved Catalogue shall be
submitted to the relevant project approval authorities for approval in accordance with
applicable regulations, while fixed asset investment projects beyond the Approved Catalogue
shall be subject to record-filing. Thermal power stations (including captive power stations)
shall be approved by provincial-level governments, among which coal-fired thermal power
projects shall be approved in accordance with the State’s construction plans developed
according to the overall volume control. Thermal power stations (including captive power
REGULATORY OVERVIEW
– 136 –


--- page 147 ---
stations) shall be approved by local governments, among which extraction condensing
coal-fired thermal power projects shall be approved by provincial-level governments within the
State’s construction plans developed according to the overall volume control. Wind power
stations shall be approved by local governments within the State’s construction plans
developed according to the overall volume control as well as the annual guiding development
scale.
According to the Interim Administrative Measures for Photovoltaic Power
Station Projects () promulgated by the NEA on August 29,
2013, and these Measures were superseded by the Interim Measures for the
Administration of the Development and Construction of Photovoltaic Power ( ΈͿཥ१ක೯
promulgated by the NEA on November 30, 2022), photovoltaic power station
projects are subject to record-filing in accordance with the provisions of the State Council on
the administration of investment projects. The provincial energy authorities shall formulate
annual photovoltaic power station development and construction plans. For projects included
in the annual photovoltaic power station development and construction plans, power grid
enterprises shall timely handle the grid access procedures. Except for exemptions stipulated by
the NEA, photovoltaic power station projects shall obtain electric power business licenses
within 6 months of connection.
According to the Interim Administrative Measures for the Development and Construction
of Wind Power () promulgated and implemented by the NEA
on August 25, 2011, the energy authority of the State Council is responsible for the
administration of national wind power development and construction. The energy authorities
of governments of all provinces (regions and municipalities) shall, under the guidance and
organization of the energy authority of the State Council, be responsible for the administration
of local wind power development and construction in accordance with the relevant provisions
of the State. Wind farm construction plans are the fundamental basis for the construction of
wind farm projects. The energy authority of the State Council is responsible for the preparation
and implementation of the wind farm construction plans nationwide. The energy authorities of
governments at the provincial level shall, according to the requirements of the national wind
farm construction plans and relevant technical specifications, organize the preparation of local
wind farm construction plans and annual development plans, which shall be filed with the
energy authority of the State Council for the record.
According to the Interim Measures for the Administration of Distributed Photovoltaic
Power Generation Projects () promulgated and
implemented by the NEA on November 18, 2013, and these Measures were superseded by the
Administrative Measures of the Development and Construction of Distributed Photovoltaic
Power Generation () by the NEA on January 17, 2025,
it encourages all kinds of power users, investment enterprises, specialized contract energy
service companies and individuals who comply with legal regulations to act as investment
entities and develop, construct and operate distributed photovoltaic power generation projects
in accordance with the law and regulations. The grid connection modes of distributed
photovoltaic power generation include full grid connection, complete self-consumption, and
REGULATORY OVERVIEW
– 137 –


--- page 148 ---
self-consumption with surplus power grid connection. Distributed photovoltaic power
generation projects are subject to filing management. Each province (autonomous region,
municipality directly under the Central Government) shall clearly define the filing authority for
distributed photovoltaic power generation and its corresponding authorities and powers, and
make them public. For distributed photovoltaic power generation projects that utilize
newly-built buildings and their affiliated areas, it is encouraged to consider the installation
requirements in the building’s planning design, construction and other stages, and handle the
planning permission and other procedures together; for those that utilize existing buildings and
their affiliated areas, in accordance with the principle of simplicity and efficiency, the
procedures such as land pre-approval and planning location, planning permission, and
energy-saving assessment can be waived under the condition of meeting the construction
requirements. In addition, in accordance with relevant regulations, distributed photovoltaic
power generation is exempted from the power business license.
Electric Power Business Licensing
According to the Electric Power Law of the People’s Republic of China ( ʕശɛ͏΍
) promulgated by the Standing Committee of the National People’s Congress on
December 28, 1995, revised and entered into force on August 27, 2009, April 24, 2015, and
December 29, 2018, this law governs the construction, production, supply and use of electric
power within the territory of the People’s Republic of China.
According to the Administrative Provisions on Electric Power Business Licenses ( ཥɢ
) promulgated by the former State Electricity Regulatory Commission
(the “SERC”) on October 13, 2005, revised by the NDRC on May 30, 2015 and January 4,
2024, and effective on March 1, 2024, the NEA is responsible for the guidance, supervision and
administration of electric power business licensing, and its local offices are responsible for the
issuance of electric power business licenses and daily supervision and administration. PRC
adopts a market access permission system in the electric power industry. To engage in electric
power business within the territory of the PRC, an electric power business license shall be
obtained in accordance with relevant regulations. Except for the special circumstances as
specified by the NEA, no entity or individual may engage in any electric power business
without obtaining an electric power business license. Public power plants, self-supply power
plants connected to power grids and other enterprises specified by the SERC that engage in
power generation business shall obtain a business license for power generation.
According to the Manual of Questions and Answers on Electric Power Business Licenses
(ཥɢุਕ஢̙ᗇਪഈ˓̅) issued by the Electric Power Business Qualification
Management Center of the NEA in January 2022, self-supply power stations that all the
electricity they generate are for their own use and are not traded online are exempted from
obtaining an electric power business license.
REGULATORY OVERVIEW
– 138 –


--- page 149 ---
Carbon Emission
According to the Interim Regulations on the Administration of Carbon Emission Rights
Trading (၍ଣᅲБૢԷ) promulgated on January 25, 2024, and effective
May 1, 2024, by the State Council, the Administrative Rules for Carbon Emission Rights
Settlement (for Trial Implementation) (ۆ(༊Б)) promulgated on
May 14, 2021, and effective May 14, 2021, by the MEE, and the Administrative Measures for
Carbon Emission Rights Trading (for Trial Implementation) (ج(༊
Б)) promulgated on December 31, 2020, and effective February 1, 2021, by the MEE, the
state is strengthening the control of greenhouse gas emissions, including but not limited to
emissions of PFC, regulating the trading of carbon emission rights and related activities, and
regulating the registration, trading and settlement of national carbon emission rights. Key
greenhouse gas emission entities that have been included in the national market for trading of
carbon emission rights and other entities that conform to relevant regulations of the State may
participate in the trading of carbon emission rights. A greenhouse gas emission entity that
meets the following conditions shall be included in the list of key greenhouse gas emission
entities: being an industry covered by the national market for trading of carbon emission rights
or its annual greenhouse gas emissions reach 26,000 tons of carbon dioxide equivalent. A key
emission entity shall control greenhouse gas emissions, report carbon emission data, clear and
pay carbon emission quotas, disclose the information about its trading and related activities,
and accept the supervision and administration by the competent authorities of ecology and
environment. The competent department of ecology and environment under the State Council
shall, in conjunction with other relevant departments under the State Council and according to
the national targets for control of greenhouse gas emissions and by comprehensively
considering the factors such as economic and social development, industrial restructuring,
stage of industry development, historical emissions and market regulation needs, formulate and
organize the implementation of the plan for the total annual carbon emission quotas and the
allocation thereof. Carbon emission quotas will be allocated free of charge, and free and paid
allocation will be gradually promoted in accordance with the relevant requirements of the
State. Competent departments of ecology and environment of people’s governments at the
provincial level shall, in conjunction with relevant departments at the same level, distribute
carbon emission quotas to key emission entities in their respective administrative regions
according to the plan for the total annual carbon emission quotas and the allocation thereof, and
shall not distribute or adjust carbon emission quotas in violation of the plan for the total annual
carbon emission quotas and the allocation thereof.
According to the Notice on Effectively Carrying out the Work Concerning the Allocation
and Settlement of Quotas for National Carbon Emission Rights Trading in the Power
Generation Industry in 2023 and 2024 (ਂλ2023 e2024ᛆʹ
) promulgated by the MEE on October 15, 2024, the Plan
for the Total Amount and Allocation of Quotas for the Power Generation Industry on National
Carbon Emission Rights Trading applies to the key emission entities (hereinafter referred to as
the “key emission entities”) included in the quota management for the Power Generation
Industry on the national carbon emission rights trading market in 2023 and 2024. Key emission
entities are entities that have the property rights of generating sets and participate, as
REGULATORY OVERVIEW
– 139 –


--- page 150 ---
responsible parties, in the grant, trading and settlement of quotas on the national carbon
emission rights trading market. Carbon emission quotas are the corresponding carbon dioxide
emission quotas for the generating sets owned by key emission entities. All quotas for 2023 and
2024 will be distributed free of charge, and the quota to be issued for a unit will be determined
according to the benchmark method and unit-level exemption mechanism.
Power Generation Capacity Indicators
According to the Opinions on Deepening the Supply-side Structural Reform, Further
Eliminating Backward Coal-fired Power Production Capacity and Promoting the Optimization
and Upgrading of the Coal-fired Power Industry (ආɓӉଇ
จԈ) promulgated by the NDRC and the NEA on
March 7, 2019, all regions are encouraged to further intensify the elimination of backward
coal-fired power production capacity on the basis of the standards for elimination and closure
specified by the State. The elimination and closure of backward coal-fired power units shall be
based on the assurance of the safe and stable supply of electric power and heat. All regions
shall effectively conduct the connection of electric power and heat involved in the shutdown
of coal-fired power units. The capacity indicators of backward coal-fired power units to be
eliminated and shut down during the 13th Five-Y ear Plan period may be used, by way of
trading, in the coal-fired power projects that need to adopt the equivalent replacement
approach. Planning a new coal-fired power project based on the approach of equivalent
capacity replacement requires the owner to implement the shut-down capacity indicator and
prepare equivalent capacity replacement plans. The shut-down capacity indicator may be used
on a coordinated basis across provinces (autonomous regions and municipalities), provided that
the consent of competent authorities in the provinces (autonomous regions and municipalities)
to which the project is transferred is obtained.
According to the Basic Rules for the Operation of the Electric Power Market ( ཥɢ̹
) promulgated on April 25, 2024, and effective as of July 1, 2024 by the
NDRC, the subject matter of capacity trading is the output capacity provided by generating
units, energy storage and so on that can reliably support the maximum load within a certain
period of time in the future. As needed for the construction of new electric power system, it
is imperative to gradually promote the establishment of a market-oriented capacity cost
recovery mechanism, explore the ways of capacity compensation and capacity market to guide
reasonable investment by business entities and ensure long-term capacity adequacy of electric
power system.
Power Grid Dispatching
According to the Administrative Regulations on Power Grid Dispatching (၍
ଣૢԷ) promulgated in June 29, 1993 and revised on January 8, 2011, by the State Council,
power grids shall operate under the principle of unified dispatching and level-by-level
management, and the power administrative department of the State Council oversees power
grid dispatching. No entity or individual may allocate or use electric power and quantity that
exceed the planned amount without the approval of the regulatory authority issuing the power
REGULATORY OVERVIEW
– 140 –


--- page 151 ---
consumption plan. Interconnected power plants or power grids shall be subject to the unified
dispatching of the dispatching organization. Where it is necessary to interconnect power plants
and power grids or power grids, an interconnection agreement shall be signed and strictly
implemented prior to the interconnection under the principle of equality, mutual benefit and
consensus.
REGULATIONS RELATED TO FOREIGN INVESTMENT
On December 29, 1993, the Standing Committee of the National People’s Congress of the
PRC (the “SCNPC”) issued the Company Law of the PRC () (the
“Company Law”), which was latest amended on December 29, 2023 and became effective on
July 1, 2024, regulating the establishment, operation and management of companies in the
PRC, including foreign-invested companies. The foreign-invested companies shall comply
with the Company Law, except where the foreign investment laws stipulate otherwise.
On March 15, 2019, the Second Session of the 13th National People’s Congress adopted
the Foreign Investment Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷̮ਠҳ༟
) or the Foreign Investment Law, which came into effect as of January 1, 2020. Upon its
enactment, the PRC Foreign Investment Law replaced the trio of original laws regulating
foreign investment in China, namely, the Wholly Foreign-owned Enterprise Law ( ̮༟Άุ
), the Sino-foreign Cooperative Joint V enture Law of the PRC ()
and the Sino-foreign Equity Joint V enture Law of the PRC (),
together with their implementation rules and ancillary regulations. The PRC government will
implement the management system of pre-entry national treatment and the Negative List for
foreign investment abolishing the original approval and filing administration system for the
establishment and change of foreign-invested enterprises. Pre-entry national treatment refers to
the treatment accorded to foreign investors and their investments at the stage of investment
entry which is no less favorable than the treatment accorded to domestic investors and their
investments. Negative List refers to a special administrative measure for the entry of foreign
investment in specific sectors as imposed by the PRC. The PRC accords national treatment to
foreign investment outside of the Negative List. The current Negative List is the Special
Management Measures (Negative List) for the Access of Foreign Investment (2024 Revision)
(the “2024 Negative List”,݄(૶ఊ)(2024و)) issued by
the NDRC and the Ministry of Commerce of the PRC (the “MOFCOM”) on September 6, 2024
and came into effect on November 1, 2024, which lists the special management measures for
foreign investment access for industries regulated by the Negative List, such as equity
requirements and senior management requirements. We mainly produce and sell electrolytic
aluminum as well as alumina and other related types of products. As advised by our PRC Legal
Advisor, as of the Latest Practicable Date, our business is not included in the 2024 Negative
List and is not otherwise restricted for foreign investment by PRC laws and regulations.
REGULATORY OVERVIEW
– 141 –


--- page 152 ---
On December 26, 2019, the Implementing Regulation of the Foreign Investment Law of
the PRC (ૢԷ) was promulgated by the State Council
which took effect on January 1, 2020, and replaced the Implementing Rules of the Sino-foreign
Equity Joint V entures Enterprises Law of the PRC (ྼ
ૢԷ), Interim Provisions on the Contract Term of Chinese-foreign Equity Joint V entures
(), Detailed Rules for the Implementation of the Law
of the People’s Republic of China on Wholly Foreign-owned Enterprises ( ʕശɛ͏΍ձ਷
), the Implementing Rules of the Sino-foreign Co-operative Enterprises
Law of the PRC () and the Implementing
Rules of the Wholly Foreign-invested Enterprise Law of the PRC ( ʕശɛ͏΍ձ਷̮ਠҳ༟
ૢԷ). According to the Implementing Regulation of the Foreign Investment Law, the
Foreign Investment Law and its implementing regulation shall prevail in the event of
discrepancy between the Foreign Investment Law and its implementing regulation and the
relevant provisions on foreign investment promulgated prior to January 1, 2020. In addition,
enterprises established prior to the effective date of the Foreign Investment Law shall adjust
its legal form or governance structure to comply with the provisions of the Company Law or
the Partnership Enterprises Law of the PRC (), as applicable,
and complete amendment registration before January 1, 2025.
While strengthening investment promotion and protection, the Foreign Investment Law
further regulates foreign investment management and proposes the establishment of a foreign
investment information reporting system that replaces the original foreign investment
enterprise approval and filing system of the MOFCOM. The foreign investment information
reporting is subject to the Foreign Investment Information Reporting Method (ࢹڦ
) jointly developed by the MOFCOM and the State Administration for Market
Regulation, which promulgated on 30 December 2019 and came into effect on January 1, 2020,
and has repealed the Interim Measures for the Administration of Record-filling on the
Establishment and Changes in Foreign-Invested Enterprises (ࣩ
ج2018ࠈࡌ)). According to the Foreign Investment Information Reporting
Method, the MOFCOM is responsible for coordinating and guiding the reporting of foreign
investment information nationwide. The competent commercial department of the local
people’s government at or above the county level, as well as the relevant agencies of the Pilot
Free Trade Zone and the National Economic and Technological Development Zone, is
responsible for reporting information on foreign investment in the region. Foreign investors
who directly or indirectly carry out investment activities in China shall submit investment
information to the competent commercial department through the enterprise registration system
and the National Enterprise Credit Information Publicity System and the reporting methods
include initial reports, change reports, cancelation reports, and annual reports. Foreign
investors who establish foreign invested enterprises in China or acquire domestic non-foreign-
invested enterprises through equity merger and acquisition shall submit initial reports through
the enterprise registration system when applying for the registration of the establishment of
foreign-invested enterprises or applying for the registration of the change of the acquired
enterprises. If the change in the information of initial reports involves registration or filing of
the change of enterprises, foreign-invested enterprises shall submit change reports through the
enterprise registration system when applying for the registration or filing of change of
REGULATORY OVERVIEW
– 142 –


--- page 153 ---
enterprises. If the change in the information of initial reports does not involve registration or
filing of the change of enterprises, foreign-invested enterprises shall submit change reports
through the enterprise registration system within twenty (20) business days after the change.
Foreign-invested listed companies shall report information on changes in investors and their
shareholdings only when the cumulative change in the foreign investors’ shareholding ratio
exceeds 5% or the foreign parties’ shareholding or relative holding status has changed.
On December 19, 2020, the NDRC and the MOFCOM jointly promulgated the Measures
on the Security Review of Foreign Investment (), effective on
January 18, 2021, setting forth provisions concerning the security review mechanism on
foreign investment, including the types of investments subject to review, the scopes of review
and procedures to review, among others.
REGULATIONS RELATED TO FOREIGN EXCHANGE
On January 29, 1996, the State Council promulgated the Administrative Regulations on
Foreign Exchange of the PRC ( ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ) which became effective on
April 1, 1996 and was latest amended on August 5, 2008. Foreign exchange payments under
current account items shall, pursuant to the administrative provisions of the foreign exchange
control department of the State Council on payments of foreign currencies and purchase of
foreign currencies, be made using self-owned foreign currency or foreign currency purchased
from financial institutions engaging in conversion and sale of foreign currencies by presenting
the valid document. Domestic entities and domestic individuals making overseas direct
investments or engaging in issuance and trading of overseas securities and derivatives shall
process registration formalities pursuant to the provisions of the foreign exchange control
department of the State Council.
According to the Notice on Relevant Issues Concerning the Administration of Foreign
Exchange for Overseas Listing () issued by the
SAFE on December 26, 2014, the domestic companies shall register the overseas listed 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.
On July 4, 2014, the SAFE promulgated the Circular on Relevant Issues Concerning
Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and
Roundtrip Investment through Special Purpose V ehicles (͏ஷཀ
), or the SAFE Circular 37,
which replaced the former circular commonly known as “SAFE Circular 75” promulgated by
SAFE on October 21, 2005. The SAFE Circular 37 requires PRC residents to register with local
branches of SAFE in connection with their direct establishment or indirect control of an
offshore entity, for the purpose of overseas investment and financing, with such PRC residents’
legally owned assets or equity interests in domestic enterprises or offshore assets or interests,
REGULATORY OVERVIEW
– 143 –


--- page 154 ---
referred to in SAFE Circular 37 as a “special purpose vehicle.” Pursuant to the SAFE Circular
37, “control” refers to the act through which a PRC resident obtains the right to carry out
business operation of, to gain proceeds from or to make decisions on a special purpose vehicle
by means of, among others, acquisition, trust, entrusted holding, voting rights, repurchase,
convertible bonds. The SAFE Circular 37 further requires amendment to the registration in the
event of any significant changes with respect to the special purpose vehicle, such as change of
shareholders of the special purpose vehicle, increase or decrease of capital contributed by PRC
individuals, share transfer or exchange, merger, division or other material event. In the event
that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required
SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from
making profit distributions to the offshore parent and from carrying out subsequent
cross-border foreign exchange activities, and the special purpose vehicle may be restricted in
its ability to contribute additional capital into its PRC subsidiaries. Moreover, failure to comply
with the various SAFE registration requirements described above could result in liability under
PRC law for evasion of foreign exchange controls.
According to the Notice of the State Administration of Foreign Exchange on Reforming
the Management Mode of Foreign Exchange Capital Settlement of Foreign Investment
Enterprises (), or
the SAFE Circular 19 issued by the SAFE promulgated on March 30, 2015, coming effective
on June 1, 2015 and partially abolished on December 30, 2019 and partially amended on March
23, 2023, foreign-invested enterprises could settle their foreign exchange capital on a
discretionary basis according to the actual needs of their business operations. Whilst,
foreign-invested enterprises are prohibited to use the foreign exchange capital settled in RMB
(a) for any expenditures beyond the business scope of the foreign-invested enterprises or
forbidden by laws and regulations; (b) for direct or indirect securities investment; (c) to
provide entrusted loans (unless permitted in the business scope), repay loans between
enterprises (including advances by third parties) or repay RMB bank loans that have been
on-lent to a third party; and (d) to purchase real estates not for self-use purposes (save for real
estate enterprises).
On June 9, 2016, SAFE issued the Notice of the State Administration of Foreign
Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management
Policy of Capital Account (ஷ
), or the SAFE Circular 16, which came into effect on the same day and partially amended
on December 4, 2023, and has been effective since then. The SAFE Circular 16 provides that
discretionary foreign exchange settlement applies to foreign exchange capital, foreign debt
offering proceeds and remitted foreign listing proceeds, and the corresponding RMB capital
converted from foreign exchange may be used to extend loans to related parties or repay
inter-company loans (including advances by third parties).
On October 23, 2019, SAFE promulgated the Notice on Further Facilitating Cross-Board
Trade and Investment (),
which came into effect on the same day (except for Article 8.2, which became effective on
January 1, 2020), and partially amended on December 4, 2023 and effective since then. The
REGULATORY OVERVIEW
– 144 –


--- page 155 ---
notice canceled restrictions on domestic equity investments made with capital funds by
non-investing foreign-funded enterprises. In addition, restrictions on the use of funds for
foreign exchange settlement of domestic accounts for the realization of assets have been
removed and restrictions on the use and foreign exchange settlement of foreign investors’
security deposits have been relaxed. Eligible enterprises in the pilot area are also allowed to
use revenues under capital accounts, such as capital funds, foreign debts and overseas listing
revenues for domestic payments without providing materials to the bank in advance for
authenticity verification on an item-by-item basis, while the use of funds should be true, in
compliance with applicable rules and conforming to the current capital revenue management
regulations.
According to the Circular on Optimizing Administration of Foreign Exchange to Support
the Development of Foreign-related Business (ஷ
) issued by the SAFE on April 10, 2020, eligible enterprises are allowed to make domestic
payments by using their capital funds, foreign credits and the income under capital accounts
of 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 compliance
with administrative regulations on the use of income under capital accounts. The bank in
charge shall conduct post spot checking in accordance with the relevant requirements.
REGULATIONS RELATED TO OVERSEAS INVESTMENT
According to the Measures for the Administration of Overseas Investment of Enterprises
() issued by NDRC on December 26, 2017, which came into effect
on March 1, 2018, the PRC implements the approval and filing registration system for
investment projects (including those in the Hong Kong Special Administrative Region, the
Macao Special Administrative Region, and the Taiwan region) by a domestic enterprise
(“Investment Entity”) directly or by way of obtaining overseas ownership, control,
management rights, and other rights and interests through providing financing or guarantees by
the controlled overseas enterprise. The aforementioned approval procedure shall apply to any
sensitive projects carried out by Investment Entity directly or through its controlled overseas
enterprises, and the approval authority is the National Development and Reform Commission.
The scope of filing registration management is non-sensitive projects directly carried out by
Investment Entity, that is, non-sensitive projects involving Investment Entity directly investing
in assets, interests or providing financing and guarantees. Among them, if the Investment
Entity is a centrally managed enterprise (including centrally managed financial enterprise, the
State Council and enterprise directly managed by institutions in the State Council) or the
Investment Entity is a local enterprise but the investment amount out of the PRC reaches
US$300 million or more, the filing authority will be the National Development and Reform
Commission, and if the investor is a local enterprise and the investment amount out of the PRC
is below US$300 million, the filing authority will be the development and reform department
of the provincial government governing the locality where the Investment Entity is registered.
REGULATORY OVERVIEW
– 145 –


--- page 156 ---
According to the provisions of the Measures for the Administration of Overseas
Investment () issued by MOFCOM on March 16, 2009, and was
amended on September 6, 2014, if an enterprise legally established within the territory of the
PRC owns a non-financial enterprise abroad or obtains the ownership, control, operation and
management right and other rights and interests of an existing non-financial enterprise through
new establishment, M&A or other means, the MOFCOM and the provincial competent
departments of commerce shall be responsible for the approval and filing registration,
depending on different circumstances of overseas investment by the enterprise. If an overseas
investment involves countries that have not established diplomatic relations with the PRC,
countries subject to United Nations sanctions, industries involving the export of products and
technologies restricted by the PRC, or industries that may affect the interests of more than one
country (region), the overseas investment shall be subject to administration by approval.
Overseas investment by the enterprise that falls under any other circumstances shall be subject
to administration by filing registration.
REGULATIONS RELATED TO OVERSEAS SECURITIES OFFERING AND LISTING
BY DOMESTIC COMPANIES
According to the Trial Administrative Measures of Overseas Securities Offering and
Listing by Domestic Enterprises () issued by
the China Securities Regulatory Commission (the “CSRC”) on February 17, 2023 and effective
from March 31, 2023 (hereinafter referred to as the “Trial Measures”), where a domestic
company seeks overseas securities issuance and listing, the issuer shall file with the CSRC in
accordance with the Trial Measures. If an issuer procures an overseas initial public offering or
listing, it shall file with the CSRC within three (3) business days after submitting application
documents for overseas securities issuance and listing. We have submitted the filing to the
CSRC on January 15, 2025, which was accepted by the CSRC on February 21, 2025. However,
if we fails to complete the filing procedure or the filing documents submitted contain
misrepresentation, misleading statement or material omission, our ability to complete the
proposed offering may be restricted. Additionally, we may be subject to order to rectify,
warnings and fines, and our controlling shareholder, actual controller, the person directly in
charge and other directly responsible persons may also be subject to fines.
According to the Provisions on Strengthening Confidentiality and Archives
Administration of Overseas Securities Offering and Listing by Domestic Companies (׵
) jointly issued by the
CSRC and other departments on February 24, 2023, and effective on March 31, 2023, in the
overseas offering and listing activities of domestic enterprises, domestic enterprises, and
securities companies and securities service institutions that provide corresponding services
shall strictly comply with the applicable laws and regulations of the People’s Republic of China
and satisfy the requirements of these Provisions, enhance the legal awareness of safeguarding
state secrets and strengthening archives administration, establish and improve the
confidentiality and archives work system, and take necessary measures to fulfill the
confidentiality and archives administration obligations, and shall not divulge state secrets or
work secrets of state organs, or harm the interests of the state or the public. A domestic
REGULATORY OVERVIEW
– 146 –


--- page 157 ---
enterprise that, either directly or through its overseas listed entity, publicly discloses or
provides to relevant securities companies, securities service institutions, overseas regulators,
and other entities and individuals, any documents and materials that involve state secrets or
work secrets of state organs, shall obtain approval from the competent department with the
power of examination and approval according to the law, and report to the administrative
department of confidentiality at the same level for filing. A domestic enterprise that, either
directly or through its overseas listed entity, publicly discloses or provides to relevant
securities companies, securities service institutions, overseas regulators, and other entities and
individuals, other documents, and materials whose divulgence will have an adverse impact on
national security or public interest, shall strictly undergo the relevant procedures in accordance
with the relevant regulations of the state.
REGULATIONS RELATED TO ENTERPRISE INVESTMENT PROJECTS AND
CONSTRUCTION
Regulations on Enterprise Investment Projects
On November 30, 2016, the State Council issued the provisions of the Regulation on the
Administration of the Confirmation and Recordation of Enterprise Investment Projects ( Ά
၍ଣૢԷ), which came into effect on February 1, 2017, the PRC
government implements a pre-approval management on fixed asset investment projects that are
invested and constructed by enterprises in the PRC and that have national security concerns or
relate to major productivity distribution, strategic resource development and major public
interests. The specific project scope, the approval authority and the approval power shall be
implemented in accordance with the catalog of investment projects approved by the
government, and other projects are subject to the filing registration.
Regulations on Land Use Right and Construction
According to Land Administration Law of the PRC ()
promulgated by the SCNPC on June 25, 1986, with the latest amendment on August 26, 2019,
which became effective in January 2020, and Civil Code promulgated by the NPC on May 28,
2020, and came into force on January 1, 2021, any entity that needs land for the purposes of
construction must obtain land use right and must register with local counterparts of Ministry
of Natural Resources. Land use right is established at the time of registration. According to the
Measures for Control and Administration of Grant and Assignment of Right to Use Urban
State-owned Land () promulgated by the
Ministry of Housing and Urban-Rural Development on December 4, 1992 with the amendment
on January 26, 2011, and the PRC Law on Urban and Rural Planning (ඊ
) promulgated by the SCNPC on October 28, 2007 and became effective on January 1,
2008 with the latest amendment on April 23, 2019, the Measures for Administration of
Permission for Commencement of Construction Works ()
promulgated by the Ministry of Housing Construction and Urban-Rural Development with the
latest amendment on March 30, 2021, the Interim Administrative Measures for Archival Filing
on Inspection Upon Completion of Buildings and Municipal Infrastructure (ጘʈ೻ձ
REGULATORY OVERVIEW
– 147 –


--- page 158 ---
) promulgated by the Ministry of Housing and
Urban-Rural Development on April 7, 2000 and most recently amended on October 19, 2009,
and the Regulations on the Quality Management of Construction Engineering (ணʈ೻ሯ
ඎ၍ଣૢԷ) promulgated by the State Council on January 30, 2000 and most recently
amended on April 23, 2019, after obtaining land use right, the owner of land use right must
obtain construction land planning permit, construction works planning permit from the relevant
municipal planning authority, and a construction permit from relevant construction authority in
order to commence construction. After a building is completed, an examination of completion
by the relevant governmental authorities and experts must be organized.
REGULATIONS RELATED TO ENVIRONMENTAL PROTECTION
According to the Environmental Protection Law of the PRC (ᚐ
), promulgated by the SCNPC on December 26, 1989, and latest amended on April 24,
2014, and came into effect on January 1, 2015, the Environmental Impact Assessment Law of
the PRC (), promulgated by the SCNPC on October 28,
2002, and latest amended on December 29, 2018, and the Administrative Regulations on the
Environmental Protection of Construction Project (ᚐ၍ଣૢԷ),
promulgated by the State Council on November 29, 1998, and latest amended on July 16, 2017,
and came into effect on October 1, 2017, for the construction of environment-affected projects,
the environmental impact assessment shall be conducted. For construction projects with
potentially serious environmental impacts, an environment impact report shall be prepared to
provide a comprehensive assessment of their environmental impacts. For construction projects
with potentially mild environmental impacts, an environmental impact statement shall be
prepared to provide an analysis or specialized assessment of their environmental impacts. For
construction projects with very small environmental impacts, no environmental impact
assessment is required. However, an environmental impact registration form shall be
submitted.
The Law of the People’s Republic of China on the Prevention and Control of Atmospheric
Pollution () promulgated by the SCNPC on September 5,
1987, became effective on June 1, 1988, latest amended on October 26, 2018, the Law of the
People’s Republic of China on the Prevention and Control of Water Pollution ( ʕശɛ͏΍
) promulgated by the SCNPC on May 11, 1984, latest amended on June
27, 2017, and became effective on January 1, 2018, the Law of the People’s Republic of China
on Noise Pollution Prevention and Control ()
promulgated by the SCNPC on December 24, 2021, became effective on June 5, 2022, and the
Law of the People’s Republic of China on the Prevention and Control of Environmental
Pollution Caused by Solid Waste () promulgated
by the SCNPC on October 30, 1995, most recently amended on April 29, 2020, and became
effective on September 1, 2020, set out the requirements for the prevention and control of
atmospheric pollution, water pollution, noise pollution and solid waste respectively. The
enterprises which discharge sewage, solid waste, noise, or waste gas shall obtain corresponding
pollutant discharge permit documents in accordance with the aforesaid laws and regulations.
REGULATORY OVERVIEW
– 148 –


--- page 159 ---
According to the Administrative Measures on Pollutant Discharge Permit issued by the
MEE () on April 1, 2024, and which came into effect on July 1, 2024,
enterprises, public institutions and other producers and operators that are subject to the
administration of pollutant discharge permits shall apply for pollutant discharge permit and
discharge pollutants in accordance with the requirements of the pollutant discharge permit; and
those who have not obtained the pollutant discharge permits shall not discharge pollutants.
According to the Classification Management List for Fixed Source Pollution Permits (2019
Edition) (๕રϮ஢̙ʱᗳ၍ଣΤ፽(2019و)) issued by the MEE of the
People’s Republic of China (hereinafter referred to as the “MEE”) and became effective on
December 20, 2019, the State implements the primary management, simplified management
and registration management of pollutant discharge permits based on the quantity of pollutants
generated and discharged, their impacts on the environment and other factors. A pollutant
discharge unit under registration management does not need to apply for a pollutant discharge
license.
On May 30, 2004, the State Council issued Measures for the Administration of Hazardous
Waste Operating Permits (), which were lastly amended on
February 6, 2016, and became effective since then. Any entity that undertakes the business
activities of collection, storage, and disposal of hazardous wastes within the territory of the
People’s Republic of China shall obtain a hazardous waste operating permit in accordance with
the provisions of these Measures. “Hazardous wastes” refer to the wastes included in National
Catalogue of Hazardous Wastes or those determined as dangerous wastes under the national
identification standards and approaches for hazardous wastes.
REGULATIONS RELATED TO FIRE SAFETY
According to the Fire Safety Law of the PRC () promulgated
by the SCNPC on April 29, 1998, last amended and effective on April 29, 2021, and the Interim
Provisions on Administration of Fire Protection Design Review and Acceptance of
Construction Projects () (the “Interim
Provisions”) promulgated by the Ministry of Housing and Urban-Rural Development on April
1, 2020, and last amended on August 21, 2023, the fire protection design or construction of a
construction project must conform to the national fire protection technical standards for project
construction and construction projects shall undergo the fire protection design review and
acceptance system. The special construction projects as defined in the Interim Provisions must
apply to the fire control department for fire protection design review and complete the fire
protection acceptance procedures after the completion of the construction project. The
construction unit of other construction projects must complete the fire protection filing of the
fire protection design and the completion acceptance within five (5) business days after the
completion acceptance of the construction project. If a construction project fails to pass the fire
safety inspection before it is put into use or does not meet the fire safety requirements after the
inspection, it will be ordered to suspend the construction and use of such project, or suspend
production and business, and be imposed a fine.
REGULATORY OVERVIEW
– 149 –


--- page 160 ---
REGULATIONS RELATED TO PRODUCTION SAFETY
The Production Safety Law of the PRC (), promulgated
by the SCNPC on June 29, 2002, and latest amended on June 10, 2021, and which came into
effect on September 1, 2021, is the basic law for governing production safety. It provides that,
any entity whose production safety conditions do not meet the requirements may not engage
in production and business operation activities. The production and business operation entities
shall educate and train employees regarding production safety so as to ensure that the
employees have the necessary knowledge of production safety, are familiar with the relevant
regulations and rules for safe production and the rules for safe operation, master the skills of
safe operation in their own positions, understand the emergency measures, and know their own
rights and duties in terms of production safety. Employees who fail the education and training
programs on production safety may not commence working in their positions. Safety facilities
of new building, rebuilding or expanding project (the “construction project”) shall be designed,
constructed and put into operation simultaneously with the main body of the project.
Investment in safety facilities shall be included in the budget of the construction project.
On January 13, 2004, the State Council issued Regulations on Work Safety Licenses ( τ
Ό͛ପ஢̙ᗇૢԷ), which were amended on July 29, 2014 and became effective since then.
The State applies a work safety licensing system to enterprises engaged in mining,
construction, and the production of dangerous chemicals, fireworks and crackers, and civil
explosives (hereinafter referred to as “enterprises”). No such enterprises may engage in
production activities without work safety licenses.
REGULATIONS RELATED TO PREVENTION AND CONTROL OF OCCUPATIONAL
DISEASES
The Prevention and Control of Occupational Diseases Law of the PRC ( ʕശɛ͏΍ձ
), which was promulgated by the SCNPC on October 27, 2001, and latest
amended on December 29, 2018, (the “Prevention and Control of Occupational Diseases
Law”), is the basic law for the prevention and control of occupational diseases. According to
the Prevention and Control of Occupational Diseases Law, budget for facilities for the
prevention and control of occupational diseases of a construction project shall be included in
the budget of the project and those facilities shall be designed, constructed, and put into
operation simultaneously with the main body of the project. The entity that takes charge of the
project should carry out the assessment of the effectiveness of measures for the prevention and
control of occupational diseases before the final acceptance of the construction project. In
addition, employers shall take required administrative measures to prevent and control
occupational diseases in work. According to the Basic Healthcare and Health Promotion Law
of the People’s Republic of China ()
promulgated by the SCNPC on December 28, 2019, and became effective on June 1, 2020,
employers should control occupational disease hazards and take comprehensive management
measures such as engineering, individual protection and health management to improve the
working environment and labor conditions.
REGULATORY OVERVIEW
– 150 –


--- page 161 ---
REGULATIONS RELATED TO COMMODITY IMPORT AND EXPORT
According to the Foreign Trade Law of the People’s Republic of China ( ʕശɛ͏΍ձ
) promulgated by the SCNPC on May 12, 1994, and lastly amended on
December 30, 2022, and the Notice by the Department of Enterprise Management and
Audit-Based Control of the General Administration of Customs of Matters Concerning the
Recordation of the Consignees and Consignors of Imported and Exported Goods ( Άุ၍ଣ
) promulgated by the General
Administration of Customs of the People’s Republic of China on January 3, 2023, and became
effective on the same date, a consignee or consignor of imported or exported goods who applies
for recordation shall be qualified as a market entity and is not required to be filed as a foreign
trade business operator.
According to the Customs Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷ऎ
) promulgated by the SCNPC on January 22, 1987, and lastly amended on April 29,
2021, the consignee of imported goods, the consignor of exported goods and the owner of
inward and outward articles shall be the obligatory customs duty payer. Unless otherwise
stipulated, all imported and exported goods must be declared and duties on them shall be paid
by the consignees or the consignors or by the representatives entrusted. The consignee or the
consignor of imported or exported goods and the customs declaration enterprise shall undergo
customs declaration formalities at the Customs in accordance with the laws. According to the
Provisions of the People’s Republic of China on the Recordation of Customs Declaration
Entities () promulgated by the General
Administration of Customs on November 19, 2021, and became effective on January 1, 2022,
customs declaration entities refer to consignees or consignors of imported or exported goods
or customs declaration enterprises that have filed for record with the Customs in accordance
with the Provisions. Consignors or consignees of imported or exported goods or customs
declaration enterprises that apply for record-filing shall obtain market entity qualifications.
According to the Regulation of the People’s Republic of China on the Administration of
the Import and Export of Goods (ආ̈ɹ၍ଣૢԷ) promulgated by
the State Council on December 10, 2001, lastly amended on March 10, 2024, and became
effective May 1, 2024, enterprises engaged in the import of goods to the customs territory of
the People’s Republic of China or export of goods from the customs territory of the People’s
Republic of China, shall comply with the Regulation here before. For goods that are prohibited
from importation or exportation, they cannot be imported or exported; for goods that are
subject to import or export restrictions, a license or quota management system shall be
implemented; for goods that are freely imported or exported, there is no restriction.
Currently, China implements a free import policy for bauxite imported from Guinea and
Australia, and has not imposed any licensing quotas or other import restrictions.
REGULATORY OVERVIEW
– 151 –


--- page 162 ---
REGULATIONS RELATED TO INTELLECTUAL PROPERTY
Regulations on Patent
Patents in the PRC are mainly protected by the Patent Law of the PRC ( ʕശɛ͏΍ձ
) (the “Patent Law”), which was 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 ()
(the “Implementation Rules”), promulgated by the State Council on June 15, 2001, and latest
amended on December 11, 2023, and came into effect on January 20, 2024. The Patent Law and
the Implementation Rules provide for three types of patents, namely “invention,” “utility
model” and “design.” “Invention” refers to any new technical solution relating to a product, a
process or improvement thereof; “utility model” refers to any new technical solution relating
to the shape, structure, or their combination, of a product, which is suitable for practical use;
and “design” refers to any new design of the shape, pattern, color or the combination of any
two of them, of a product, which creates an aesthetic feeling and is suitable for industrial
application. The duration of a patent right for “invention” is twenty (20) years; the duration of
a patent right for “utility model” is ten (10) years; and the duration of a patent right for
“design” is fifteen (15) years, all of which duration are from the date of application.
Regulations on Trademarks
Registered trademarks in the PRC are mainly protected by the Trademark Law of the PRC
(), which was promulgated by the SCNPC on August 23, 1982, and
latest amended on April 23, 2019, and came into effect on November 1, 2019, and the
Implementation Rules of the Trademark Law of the PRC (ૢ
Է), which were promulgated by the State Council on August 3, 2002, and latest amended on
April 29, 2014, and came into effect on May 1, 2014. The Trademark Office is responsible for
the registration and administration of trademarks throughout China and grants a term of ten
(10) years to registered trademarks. When it is necessary to continue using the registered
trademark upon expiration of period of validity, a trademark registrant shall make an
application for renewal within twelve (12) months before the expiration in accordance with the
requirements. If such an application cannot be filed within that period, an extension period of
six months may be granted. The period of validity for each renewal of registration shall be ten
(10) years as of the next day of the previous period of validity. If the formalities for renewal
have not been handled upon expiration of period of validity, the registered trademarks will be
deregistered.
REGULATORY OVERVIEW
– 152 –


--- page 163 ---
Regulations on Domain Names
Domain names are regulated under the Administrative Measures on the Internet Domain
Names () issued by the MIIT, on August 24, 2017, and effective from
November 1, 2017. The MIIT is the main regulatory authority responsible for the
administration of the PRC internet domain names. Domain names registrations are handled
through domain name service agencies established under the relevant regulations, and the
applicants become domain name holders upon successful registration.
REGULATIONS RELATED TO EMPLOYMENT AND SOCIAL SECURITIES
Pursuant to the Labor Law of the PRC (), promulgated by the
SCNPC on July 5, 1994, and latest amended on December 29, 2018, and the Labor Contract
Law of the PRC (), promulgated by the SCNPC on June 29,
2007, and latest amended on December 28, 2012, and which came into effect on July 1, 2013,
employers shall execute written labor contracts with full-time employees. All employers shall
comply with local minimum wage standards. Employers shall establish a comprehensive
management system to protect the rights of their employees, including a system governing
occupational health and safety to provide employees with occupational training to prevent
occupational injury, and employers are required to truthfully inform prospective employees of
the job description, working conditions, working location, occupational hazards, and status of
safe production as well as remuneration and other conditions.
According to Social Security Law of the PRC (), which
was promulgated on October 28, 2010, and amended on December 29, 2018, by SCNPC, and
the Interim Regulations on the Collection of Social Insurance (ᎈ൬ᅄᖮᅲБૢԷ)
issued by the State Council on January 22, 1999, and last amended 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 to 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.
According to the Reform Plan of the State Tax and Local Tax Collection Administration
System (), which was promulgated on July 20, 2018,
commencing from January 1, 2019 by CCCPC and General Office of the State Council, all the
social insurance premiums including the premiums of the basic pension insurance,
unemployment insurance, maternity insurance, work injury insurance and basic medical
insurance shall be collected by the tax authorities. According to the Notice on Conducting the
Relevant Work Concerning the Administration of Collection of Social Insurance Premiums in
a Steady, Orderly and Effective Manner (ஷ
REGULATORY OVERVIEW
– 153 –


--- page 164 ---
) promulgated by the General Office of the State Administration of Taxation on September
13, 2018 and the Urgent Notice on Implementing the Spirit of the Executive Meeting
of the State Council in Stabilizing the Collection of Social Security Contributions (஫
) promulgated by the
General Office of the Ministry of Human Resources and Social Security on September 21,
2018, all the local authorities responsible for the collection of social insurance are strictly
forbidden to conduct self-collection of historical unpaid social insurance contributions from
enterprises. The Notice on Implementing Measures to Further Support and Serve the
Development of Private Economy (ஷ
), promulgated by the State Taxation Administration on November 16, 2018, repeats that
tax authorities at all levels may not organize self-collection of arrears of taxpayers including
private enterprises from the previous years. The Notice of General Office of the State Council
on Promulgation of the Comprehensive Plan for the Reduction of Social Insurance Premium
Rate (), promulgated on April
1, 2019, requires steady advancement of the reform of the system of social security collection.
In principle, the basic pension insurance for enterprise employees and other insurance types for
enterprise employees shall be collected temporarily according to the existing collection system
to stabilize the payment method. It also emphasizes that the historical unpaid arrears of the
enterprise shall be properly treated. In the process of reformation of the collection system, it
is not allowed to conduct self-collection of historical unpaid arrears from enterprises, and it is
not allowed to adopt any method of increasing the actual payment burden of small and micro
enterprises to avoid causing difficulties in the production and operation of the enterprises.
According to the Administrative Regulations on Housing Provident Funds (ږ
၍ଣૢԷ), which was promulgated on April 3, 1999, and latest amended on March 24, 2019,
by State Council, employers are required to make contribution to housing provident funds for
their employees. Where an employer fails to pay up housing provident funds, the housing
provident fund administration center may order it to make payment within a prescribed time
limit. If the employer still fails to do so, the housing provident fund administration center may
apply to the court for compulsory enforcement of the unpaid amount.
According to the Interpretation (II) of the Supreme People’s Court on issues Concerning
the Application of Law in the Trial of Labor Dispute Cases (ن
༆ᙑ(ɚ)), which became effective on September 1, 2025, where the
employer and the employee agree, or the employee promises the employer, that there is no need
to make social insurance contributions, the people’s court shall determine that such agreement
or promise is invalid. Where the employer fails to make social insurance contributions in
accordance with the law, and the employee requests to terminate the labor contract and claim
economic compensation in accordance with item (3) of Article 38 of the Labor Contract Law
of the PRC (), the people’s court shall support such claim.
REGULATORY OVERVIEW
– 154 –


--- page 165 ---
REGULATIONS ON TAXATION
Enterprise Income Tax
According to the Law of the PRC on Corporate Income Tax (੻
), (the “CIT Law”), which was promulgated by the SCNPC on March 16, 2007, and was
latest amended on December 29, 2018, and the Regulation on the Implementation of the CIT
Law (ૢԷ), which was promulgated by the State
Council on December 6, 2007, and was latest amended on December 26, 2024 and effective
from January 20, 2025, a uniform 25% enterprise income tax rate is imposed to both foreign
invested enterprises and domestic enterprises, except where tax incentives are granted to
special industries and projects. The enterprise income tax rate is reduced to 20% for qualifying
small low-profit enterprises. The high-tech enterprises that need full support from the PRC’s
government will enjoy a reduced tax rate of 15% for enterprise income tax.
Value-added Tax
Pursuant to the Provisional Regulations of the PRC on V alue-added Tax ( ʕശɛ͏΍
೼ᅲБૢԷ), which was promulgated by the State Council on December 14, 1993
and was latest amended on November 19, 2017, and the Implementation Rules for the
Provisional Regulations the PRC on V alue-added Tax (݄
), which was promulgated by the Ministry of Finance on December 25, 1993 and was
latest amended on October 28, 2011 and effective from November 1, 2011, entities and
individuals engaging in selling goods, providing processing, repairing or replacement services
or importing goods within the territory of the PRC are taxpayers of the value-added tax
(“V A T”).
According to the Notice of the Ministry of Finance and the State Taxation Administration
on the Adjusting V alue-added Tax Rates ()
on April 4, 2018, and effective from May 1, 2018, the V A T rates of 17% and 11% on sales,
imported goods shall be adjusted to 16% and 10%, respectively.
According to the Announcement of the Ministry of Finance, the State Taxation
Administration and the General Administration of Customs on Relevant Policies for Deepening
the V alue-Added Tax Reform (ʮѓ) promulgated 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.
REGULATORY OVERVIEW
– 155 –


--- page 166 ---
OVERVIEW
The history of our Group can be traced back to 2012 when Mr. Cui, our founder and
chairman of the Board, who has extensive experience in the aluminum industry, established
Inner Mongolia Chuangyuan with a focus on production and sales of electrolytic aluminum.
Over the years, we have gradually become an aluminum industry group covering alumina
refining and aluminum smelting, focusing on the high value-added upstream segments of the
aluminum industry chain.
Our Company was incorporated as an exempted company with limited liability in the
Cayman Islands on July 4, 2023 to serve as the holding company of our operating subsidiaries.
See section headed “Major Shareholding Changes of our Group — Reorganization” in this
section for further details.
BUSINESS DEVELOPMENT MILESTONES
The following table summarizes the key milestones in our business development:
Time Milestones
2012 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Inner Mongolia Chuangyuan, our principal operating entity, was
incorporated in Huolinguole, Inner Mongolia, the PRC
2013 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We commenced construction of Phase I of our electrolytic aluminum
smelting facility, with an annual designed production capacity of
400.0 kt, which marks the beginning of our aluminum smelting
We started construction of our self-owned coal-fired thermal power
plant
2017 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Phase I of our electrolytic aluminum smelting facility equipped with
500kA energy-saving aluminum electrolysis cell technology (500kA ቙
ືঐҦஔ), with an annual designed production capacity of
400.0 kt, was put into operation
2019 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We commenced construction of Phase II of our electrolytic aluminum
smelting facility with an annual designed production capacity of
400.0 kt
Our alumina refining facility was put into operation, with an annual
designed production capacity of 800.0 kt
Inner Mongolia Chuangyuan was awarded “Tongliao City Outstanding
Private Enterprise” ( ஷ፱̹ᎴӸ͏ᐄΆุ၈໮)
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 156 –


--- page 167 ---
Time Milestones
We received the First Prize of National Nonferrous Metals Industry
Science and Technology Award (ኪҦஔᆤɓഃᆤ)
granted by National Nonferrous Metals Association (᙮ኪึ)
and National Nonferrous Metals Industry Association (᙮ʈ
ุ՘ึ) for our development and industrialization of limestone-gypsum
based flue gas desulphurization, defluorination and dedusting in
aluminum electrolysis process ( ቙ཥ༆๧ंͩϲͩ—ৰ
ྡྷҦஔක೯ʿପุʷҦஔ)
2020 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We launched Phase II of our electrolytic aluminum smelting facility
equipped with world-class 500kA aluminum electrolytic production
lines
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118We obtained approval for construction of our integrated green energy
system with our proprietary power plants from the Energy
Administration of Inner Mongolia Autonomous Region (ਜ
ঐ๕҅)
We commenced operation of our aluminum-based new material project,
which includes an annual designed alumina production capacity of 400.0
kt, increasing our annual designed alumina production capacity to
1,200.0 kt in total
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Green Aluminum Matrix New Material Research and Development
Center (Ӻක೯ʕː) was accredited as one of the
Inner Mongolia Autonomous Region enterprise research and
development centers for the year 2022 (2022޼
Ӻක೯ʕː) by the Department of Science and Technology of Inner
Mongolia Autonomous Region (ኪҦஔᝂ)
Our electrolytic aluminum solution (૰) received green-power
aluminum certification (ࣣfrom China Green-Metal
Certification Center (൙ᄆʕː)
We commenced construction of our 400MW wind power project and
110MW photovoltaic power project
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Inner Mongolia Chuangyuan was accredited as a Pioneer Water-
conserving Enterprise in the Inner Mongolia Autonomous Region (ط
Άุ) and a Pioneer Green Manufacturing Demonstration
Enterprise in the Inner Mongolia Autonomous Region (ਜॴၠЍႡ
ிͪᇍఊЗ) by the Department of Industry and Information Technology
of Inner Mongolia Autonomous Region (ʷᝂ)
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 157 –


--- page 168 ---
Time Milestones
Our unalloyed aluminum ingots for remelting (အ͜቙፵) received
green-power aluminum certification (ࣣfrom China
Green-Metal Certification Center (൙ᄆ
ʕː)
Shandong Chuangyuan was awarded the title of “Outstanding Enterprise
in the Refined Alumina Sector for the Y ear 2024 (2024ʕ਷ၚ୚ः
ʷ቙БุᎴሯΆุ)” during the 4th China Refined Alumina Sector
Summit Forum 2024 (2024 ϋ(֣)ሞእ)
We commenced the pilot production of our aluminum hydroxide
production facility with an annual designed production capacity of
1,500.0 kt
Inner Mongolia Chuangyuan was accredited as a National Green Factory
(ॴၠЍʈᅀ) by the Ministry of Industry and Information
Technology of the PRC
OUR MAJOR SUBSIDIARIES
We conduct our business principally through the following subsidiaries which made a
material contribution to our results of operations during the Track Record Period:
Name Principal business activities Date of establishment
Place of
establishment
Percentage of
equity interests
held by our
Company
Inner Mongolia
Chuangyuan /H1118/H1118/H1118/H1118/H1118/H1118
Production and sales of
electrolytic aluminum
May 10, 2012 PRC 100%
Shandong
Chuangyuan /H1118/H1118/H1118/H1118/H1118/H1118
Production and sales of
alumina and other
related products
November 12,
2018
PRC 58.5%
Chuangyuan Alloy /H1118/H1118/H1118/H1118Wind power and
photovoltaic power
generation and
production and sales of
aluminum ingots
January 28, 2019 PRC 100%
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 158 –


--- page 169 ---
MAJOR SHAREHOLDING CHANGES OF OUR GROUP
Establishment and major shareholding changes of Inner Mongolia Chuangyuan
Inner Mongolia Chuangyuan was established in the PRC on May 10, 2012. Upon
incorporation, Inner Mongolia Chuangyuan was held by Mr. Cui (through his nominees by
proxy for administrative convenience purpose) and the then director of Inner Mongolia
Chuangyuan, Mr. Liu Y unsheng, (the “ Former Director of the Subsidiary ”) as to 90% and
10% respectively, and the registered capital was increased from RMB10 million to RMB30
million in July 2012. Through a series of internal reorganization from November 2013 to
August 2016, Innovation Group acquired 90% equity interests of Inner Mongolia Chuangyuan.
In December 2016, Inner Mongolia Chuangyuan conducted further capital increase, during
which Innovation Group subscribed all of the increased registered capital of RMB270 million,
and Inner Mongolia Chuangyuan was held by Mr. Cui (through Innovation Group) and the
Former Director of the Subsidiary as to 99% and 1% respectively. Further in April 2017,
Innovation Group acquired the remaining 1% equity interests from the Former Director of the
Subsidiary, and Inner Mongolia Chuangyuan became a wholly-owned subsidiary of Innovation
Group, which was ultimate controlled by Mr. Cui.
On May 22, 2017, to meet the financial needs during the key stage of the construction
period, the general meeting of Inner Mongolia Chuangyuan resolved to approve a capital
increase of RMB1.70 billion, among which RMB1.02 billion was subscribed by Wenzhou
Yikai, an Independent Third Party investor, and RMB680 million was subscribed by Innovation
Group. Upon completion of such capital increase, Inner Mongolia Chuangyuan was held by
Wenzhou Yikai as to 51% and by Innovation Group as to 49%, respectively.
In late 2018, Innovation Group intended to control Inner Mongolia Chuangyuan. In the
meantime, Wenzhou Yikai intended to focus on its other core business and decided to exit.
Therefore, Innovation Group, through its interested entities by proxy, acquired 51% of the
equity interests in Inner Mongolia Chuangyuan from Wenzhou Yikai. The consideration for the
above equity transfer was RMB1.72 billion, which was determined based on arm’s length
negotiation between the parties, taking into account the then rapid operation development and
financial condition of Inner Mongolia Chuangyuan during the period of Wenzhou Yikai’s
shareholding, and has been fully settled. Upon completion of such equity transfer, Inner
Mongolia Chuangyuan had been ultimately controlled by Innovation Group (through
shareholding proxy arrangements for administrative convenience purpose) as to 100% of its
equity interests. In October 2021, the shareholding proxy arrangements were terminated and
Inner Mongolia Chuangyuan was directly wholly owned by Innovation Group. In January
2024, Inner Mongolia Chuangyuan further increased its registered capital from RMB2 billion
to RMB3.2 billion, which was subscribed by Innovation Group.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 159 –


--- page 170 ---
Establishment and major shareholding changes of Shandong Chuangyuan
Shandong Chuangyuan was established in the PRC on November 12, 2018. Upon
incorporation, Shandong Chuangyuan was held as to 49% by Innovation Group and as to 51%
by Bosai Mining Group, an Independent Third Party who had extensive experience in the
alumina industry. Later in February 2019, due to the latest development in business plans and
development focus, Innovation Group acquired the 51% equity interests in Shandong
Chuangyuan from Bosai Mining Group at a consideration of approximately RMB31 million,
which was determined based on arm’s length negotiation and has been fully settled. Upon
completion of the equity transfer, Shandong Chuangyuan was wholly owned by Innovation
Group.
Since its incorporation until June 2023, Shandong Chuangyuan has leased and was
entrusted to operate certain alumina manufacturing facilities and power plant for production
and operation purposes from Wudi Qixing in a reorganization project, which is an Independent
Third Party alumina manufacturer primarily engaged in the production and sales of alumina.
See “Financial Information — Indebtedness — Amounts Due to Independent Third Parties” for
further details. In June 2023, considering the value of such alumina manufacturing facilities
and power plant owned by Wudi Qixing, the general meeting of Shandong Chuangyuan
resolved to approve a capital increase in Shandong Chuangyuan to be subscribed by Wudi
Qixing, by way of injecting the relevant assets of the alumina factory and power plant owned
by Wudi Qixing as valued by an independent valuer (“ Injected Assets ”). Upon completion of
such capital increase, Shandong Chuangyuan was held by Innovation Group and Wudi Qixing
as to 80% and 20%, respectively. In August 2023, based on the promising outlook of the
alumina business and in order to secure complete control of Shandong Chuangyuan, Innovation
Group proposed to repurchase the 20% equity interest in Shandong Chuangyuan from Wudi
Qixing, which was accepted by Wudi Qixing, having considered that a one-off disposal of the
equity interests and Injected Assets provides greater assurance regarding investment returns
compared to receiving dividends as a minority shareholder. Pursuant to the equity transfer
agreement entered into between Innovation Group and Wudi Qixing in August 2023,
Innovation Group acquired the 20% equity interests in Shandong Chuangyuan from Wudi
Qixing at a consideration of approximately RMB439 million. Such consideration was
determined based on arm’s length negotiation between the parties with reference to the
valuation of the Injected Assets as valued by an independent valuer. Upon completion of such
equity transfer, Shandong Chuangyuan became a wholly-owned subsidiary of Innovation
Group.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 160 –


--- page 171 ---
To facilitate the alumina refining and aluminum smelting segments within the upstream
aluminum production stage of the aluminum industry chain and achieve synergy effects, during
the Reorganization, Innovation Group transferred in aggregate 58.5% of the equity interests in
Shandong Chuangyuan to Inner Mongolia Chuangyuan through a series of internal equity
transfers taking into account the asset value of Shandong Chuangyuan as valued by an
independent valuer, and has been fully settled through offsetting the payables owed by
Innovation Group to Inner Mongolia Chuangyuan. The decision to acquire a 58.5%
shareholding was made with the aim of securing a controlling interest in Shandong
Chuangyuan, thereby optimising synergy effects within our Group’s specialisation in the
upstream aluminum industry. This acquisition also accounted for (i) our funds available at that
time, especially given the considerable capital requirements for our green energy power
generation projects and overseas expansion initiatives, and (ii) the benefit of preserving
flexibility for future possible acquisition decisions as negotiated by us and Innovation Group,
depending on our future capital expenditure and the volatility in alumina prices. Similarly,
Innovation Group’s decision to retain a 41.5% shareholding in Shandong Chuangyuan was
made taking into account arm’s length negotiation between parties and the benefit of
preserving flexibility through joint shareholding as a passive investor. Upon completion of
such equity transfers, Shandong Chuangyuan was held by Inner Mongolia Chuangyuan and
Innovation Group as to 58.5% and 41.5%, respectively. Taking into account our funds available
and capital expenditure, we may consider further acquiring the remaining equity interests in
Shandong Chuangyuan in the future. As of the Latest Practicable Date, there was no
overlapping director or senior management between Shandong Chuangyuan and Innovation
Group. Our Directors are of the view that we will be able to operate independently after the
Listing despite the joint shareholding of Shandong Chuangyuan by us and Innovation Group.
See “Relationship with our Controlling Shareholders — Operational Independence” in this
prospectus.
Establishment and shareholding of Chuangyuan Alloy
Chuangyuan Alloy was established in the PRC on January 28, 2019 and has been wholly
owned by Inner Mongolia Chuangyuan since its incorporation.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 161 –


--- page 172 ---
Reorganization
In anticipation of the Listing, our Group carried out the Reorganization, upon which our
Company became the holding company and listing vehicle of our Group. The Reorganization
included the following major steps:
The following chart sets out our shareholding and corporate structure immediately before
the Reorganization:
Mr. Cui
Innovation Group
Inner Mongolia
Chuangyuan
Shandong
Chuangyuan
Chuangyuan
Alloy
Other
Subsidiaries
71.82%
58.5% 100% 100%
28.18%
Other
Shareholders(1)
100%
Note:
(1) The remaining 28.18% equity interests in Innovation Group were held by Ms. Y ang Aimei as to 11.82%, by
Mr. Wang Wei as to 8.18% and by Ms. Geng Hongyu as to 8.18%. Ms. Y ang Aimei is the spouse of Mr. Cui’s
brother, Mr. Wang Wei is the brother of Mr. Cui’s spouse, and Ms. Geng Hongyu is the spouse of Mr. Cui’s
brother.
On June 28, 2023, Mr. Cui incorporated a wholly-owned special purpose vehicle,
Bloomsbury Holding, in the BVI for the purpose of the Reorganization. On the same day,
Bloomsbury Holding allotted and issued one ordinary share to Mr. Cui with a par value of
USD1.00.
On July 4, 2023, our Company was incorporated in the Cayman Islands as an exempted
company with limited liability, with an authorized share capital of USD50,000. Upon
incorporation, our Company allotted and issued one ordinary share with a par value of
USD0.0001 to ICS Corporate Services (Cayman) Limited, and ICS Corporate Services
(Cayman) Limited subsequently transferred such share to Bloomsbury Holding at nominal
value on the same day. Upon completion of such equity transfer, our Company became a wholly
owned subsidiary of Bloomsbury Holding.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 162 –


--- page 173 ---
On September 15, 2023, Phineas Management was incorporated by our Company in Hong
Kong. Upon incorporation, Phineas Management allotted and issued one ordinary share to our
Company at HKD1 and has been wholly owned by our Company.
On May 9, 2024, Phineas Management incorporated a wholly foreign-owned enterprise,
Beijing Chuangyuan, as a limited liability company in the PRC, with an initial registered
capital of RMB5 million.
On August 30, 2024, Carnaby Management Limited (“Carnaby Management”) entered
into a capital subscription agreement with Innovation Group and Inner Mongolia Chuangyuan,
pursuant to which Carnaby Management subscribed for an increased registered share capital of
RMB32,320,000 in Inner Mongolia Chuangyuan at a consideration of RMB32,320,000, which
was determined at the nominal value of the registered capital subscribed by Carnaby
Management based on arm’s length negotiation between the parties. Such consideration has
been fully settled on September 13, 2024. Carnaby Management is a private company
principally investing in the metal business and is wholly owned by Mr. David James Price, who
is an Independent Third Party and primarily focuses on investments in energy and metal sector.
Upon completion of the capital increase, Inner Mongolia Chuangyuan was held by Innovation
Group and Carnaby Management as to 99% and 1%, respectively.
On October 9, 2024, Beijing Chuangyuan entered into an equity transfer agreement with
Innovation Group and Inner Mongolia Chuangyuan, pursuant to which Innovation Group
agreed to transfer 99% of the equity interests in Inner Mongolia Chuangyuan to Beijing
Chuangyuan at a consideration of RMB3 billion, which was determined based on arm’s length
negotiation between the parties with reference to the net asset value of Inner Mongolia
Chuangyuan as of June 30, 2024 as valued by an independent valuer. Such consideration has
been settled in full on October 11, 2024 through offsetting the payables of an equivalent
amount owed by Innovation Group to Beijing Chuangyuan. Upon completion of the capital
increase, Inner Mongolia Chuangyuan was held by Beijing Chuangyuan and Carnaby
Management as to 99% and 1%, respectively.
On October 15, 2024, in view of the cash flow requirements of the investor for pursuing
an investment opportunity in its other businesses and in alignment with the Group’s
Reorganization plan, Beijing Chuangyuan entered into an equity transfer agreement with
Carnaby Management, pursuant to which Beijing Chuangyuan acquired the 1% equity interests
held by Carnaby Management in Inner Mongolia Chuangyuan at a cash consideration of
RMB32,470,000, which was based on arm’s length negotiation. Such consideration has been
fully settled on October 23, 2024. Upon completion of such equity transfer, Inner Mongolia
Chuangyuan is held as to 100% by Beijing Chuangyuan and became an indirect wholly owned
subsidiary of our Company.
According to our PRC legal advisor, all necessary approvals and permits required under
the PRC laws and regulations in connection with the Reorganization that involved our PRC
subsidiaries have been obtained, and the Reorganization has complied with all applicable PRC
laws and regulations in all material respects.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 163 –


--- page 174 ---
The following chart sets out the shareholding and simplified corporate structure of our
Company immediately after completion of the above Reorganization steps:
Other overseas subsidiaries
Beijing Chuangyuan
Offshore
Onshore
Bloomsbury Holding
Mr. Cui
100%
100%
Phineas Management
(HK)
The Company
100%
100%
100% 100%
Other domestic
subsidiaries
100%
Shandong
Chuangyuan
Chuangyuan
Alloy
100%
Inner Mongolia Chuangyuan
58.5%
MAJOR ACQUISITIONS, DISPOSALS AND MERGERS
No Major Acquisitions, Disposals and Mergers
During the Track Record Period and as of the Latest Practicable Date, we have not made
any acquisitions, disposals or mergers that we consider to be material to us.
Investment during Track Record Period
Leveraging our extensive operational experience in the electrolytic aluminum industry
and in order to advance our globalization strategies, our Company, together with the Saudi
Project Co-Investors, co-invested in the Saudi Project, an integrated electrolytic aluminum
industry chain project with expected annual production capacity of 500.0 kt in Saudi Arabia.
To facilitate negotiations with the Saudi government and obtain relevant regulatory
approvals, Red Sea Aluminum Industrial Company LLC (the “ Project Company ”) has been
incorporated solely for purpose of preliminary preparation before launch of the Saudi Project.
For purpose of co-investment into the Saudi Project, Red Sea Aluminium Holdings Pte.
Ltd. (the “ Red Sea JV ”) was incorporated in Singapore in October 2024 as the holding
company of the Saudi Project. The Red Sea JV was initially held by our Company (through our
wholly owned subsidiary Kingston Management Pte. Ltd.) as to 33%, while the remaining
equity interests were held by Innovation Group (through its wholly owned subsidiary) and
Independent Third Parties.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 164 –


--- page 175 ---
On March 7, 2025, the Red Sea JV (through its wholly owned subsidiary) agreed to
acquire 100% of the equity interests in the Project Company from Red Sea Aluminium Holding
Ltd., a subsidiary of Innovation Group (the “ Acquisition ”). The Acquisition was completed on
May 5, 2025, and upon completion of the Acquisition, the Project Company has become a
wholly owned subsidiary of the Red Sea JV . As of the Latest Practicable Date, Red Sea JV was
held by the Company, Innovation Group, Innovation New Material and Independent Third
Parties as to 33.6%, 25.2%, 25.2% and 16%, respectively. Each of our Group, Innovation
Group and Innovation New Material specializes in different stages within the aluminum
industry chain and has different business focus and competitive advantages in the Saudi
Project. Our Directors are of the view that forming a joint venture between our Group,
Innovation Group and Innovation New Material enables each party to leverage their respective
strengths to operate an integrated aluminum project efficiently, and enhances the Project
Company’s prospects of seizing the overseas expansion opportunity. According to the
shareholders’ agreement of Red Sea JV , each of the Company, Innovation Group and
Innovation New Material is entitled to nominate two directors and the Independent Third
Parties are collectively entitled to nominate one director to participate in the decision-making
and operation of Red Sea JV .
As of the Latest Practicable Date, the Project Company has not carried out any
substantive business operation or generated any revenue or profit. The total consideration for
the Acquisition was SAR100,000, which was determined after arm’s length negotiations among
the parties after taking into consideration the pre-operating status of the Project Company. The
total consideration would be borne by the Company and each of the Saudi Project Co-Investors
in proportion to their respective shareholding percentage in the Red Sea JV . The consideration
to be borne by the Company for the Acquisition will be satisfied using the internal resources
of our Group. As of the Latest Practicable Date, the total consideration of SAR100,000 for the
Acquisition has not been fully paid.
The investment into the Saudi Project through the Acquisition represents a valuable and
beneficial endeavor to amplify our global presence and competitive edge. It resonates with the
China Belt and Road initiative and the Vision 2030 plan of Saudi Arabia, and benefits from the
abundant natural resources, favourable energy costs, strategic location and government support
in Saudi Arabia. It is also a collaborative effort among the Group and the Saudi Project
Co-investors to create synergistic relationship by leveraging each party’s respective expertise.
Our Directors are of the view that the Acquisition is conducted in the ordinary course of our
business and in line with our globalization strategy, and the terms of the Acquisition are fair
and reasonable and in the interests of our Company and our Shareholders as a whole.
During the Track Record Period and up to the Latest Practicable Date, we did not conduct
any major acquisition, disposal or merger which would fall within the scope of Rule 4.05A of
the Listing Rules.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 165 –


--- page 176 ---
PUBLIC FLOAT
Rule 8.08 of the Listing Rules requires that there must be an open market in the securities
for which listing is sought. This will normally mean that for a class of securities new to listing,
at least a minimum prescribed percentage of that class of securities must be held by the public
at the time of listing. Where the expected market value of the class of securities at the time of
listing is over HK$6,000,000,000 but not exceeding HK$30,000,000,000, the minimum
prescribed percentage is determined at the higher of: (i) the percentage that would result in the
expected market value of such securities held by the public to be HK$1,500,000,000 at the time
of listing; and (ii) 15%. Assuming that the Over-allotment Option is not exercised, based on
an Offer Price of (i) HK$10.18 per Share (being the minimum Offer Price of the indicative
Offer Price range), the market capitalization of our Shares immediately upon Listing is
expected to be HK$20,360 million; (ii) HK$10.58 per Share (being the mid-point of the
indicative Offer Price range), the market capitalization of our Shares immediately upon Listing
is expected to be HK$21,160 million; and (iii) HK$10.99 per Share (being the maximum Offer
Price of the indicative Offer Price range), the market capitalization of our Shares immediately
upon Listing is expected to be HK$21,980 million. Accordingly, at least 15% of the total
number of issued shares must be held by public upon Listing (based on the minimum Offer
Price and maximum Offer Price of the indicative Offer Price range)
Immediately upon completion of the Global Offering, the 1,500,000,000 Shares held by
Mr. Cui through Bloomsbury Holding will not be counted towards the public float of the
Company, representing approximately 75% of our total issued Shares upon Listing, and the
500,000,000 Offer Shares to be issued pursuant to the Global Offering (assuming the
Over-allotment Option is not exercised) will count towards public float of the Company, which
represents approximately 25% of our total issued Shares upon Listing. The public float of our
Company immediately upon completion of the Global Offering is higher than the prescribed
percentage of Shares required to be held in public hands under Rule 8.08(1) of the Listing
Rules, thereby satisfying Rule 8.08(1) of the Listing Rules.
FREE FLOAT
Each of the Cornerstone Investors has agreed to a lock-up period of six months following
the Listing Date. As such, Shares held by the Cornerstone Investors upon the Listing shall not
be counted towards the free float of the Shares of the Company at the time of Listing. Based
on an Offer Price of HK$10.18 per Offer Share (being the low-end of the Offer Price Range),
the Company will be able to satisfy the free float requirement under Rule 8.08A(2) of the
Listing Rules.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 166 –


--- page 177 ---
CORPORATE STRUCTURE
Corporate structure immediately before completion of the Global Offering
The following chart sets forth our shareholding structure as of the Latest Practicable Date and immediately before completion of the Global
Offering:
100%100%
100%
Brentford
Management(2)
Innovation Global
Industries UK Ltd.
100%
Cedarway Management
Limited
100%
Camden Management
Limited
100%
Innovation Global Oasis
FZ-LLC
Kingston
Management(2)
Beijing Chuangyuan
Offshore
Onshore
100%
Bloomsbury Holding
Mr. Cui
100%
Phineas Management
The Company
100%
100%
100%
Chuangyuan Supply
Chain Management
Keyou
New Energy
100% 100%
Chuangyuan
Alloy
Shandong
Chuangyuan(1)
Chuangyuan
New Material
Chuangyuan
Resources Recycling
Kanghong
New Material
58.5%100%100%100%100%
Chuangyuan
Intelligent Power
Chuangyuan
Wind Power
100%
100%
Inner Mongolia Chuangyuan
Chuangyuan
Xinchuang
100%
Notes:
(1) The remaining 41.5% equity interests in Shandong Chuangyuan is held by Innovation Group.
(2) Each of Brentford Management and Kingston Management is an overseas investment holding company of the Group.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 167 –


--- page 178 ---
Corporate structure immediately following completion of the Global Offering
The following chart sets forth our shareholding structure immediately following completion of the Global Offering (assuming the
Over-Allotment Option is not exercised):
Beijing Chuangyuan
Offshore
Onshore
Bloomsbury Holding
Mr. Cui
100%
75%
Public Shareholders
25%
Phineas Management
The Company
100%
100%
100%
Chuangyuan Supply
Chain Management
Keyou
New Energy
100% 100%
Chuangyuan
Alloy
Shandong
Chuangyuan(1)
Chuangyuan
New Material
Chuangyuan
Resources Recycling
Kanghong
New Material
58.5%100%100%100%100%
Chuangyuan
Intelligent Power
Chuangyuan
Wind Power
100%
100%
Inner Mongolia Chuangyuan
100%100%
100%
Brentford
Management(2)
Innovation Global
Industries UK Ltd.
100%
Cedarway Management
Limited
100%
Camden Management
Limited
100%
Innovation Global Oasis
FZ-LLC
Kingston
Management(2)
Chuangyuan
Xinchuang
100%
Notes:
(1)-(2): Please refer to the corporate structure immediately before completion of the Global Offering.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 168 –


--- page 179 ---
PRC REGULATORY REQUIREMENTS
Regulations on Overseas Listing
On February 17, 2023, the CSRC released the Overseas Listing Trial Measures and five
supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Overseas
Listing Trial Measures, PRC domestic companies that seek to list overseas, both directly and
indirectly, should fulfill the filing procedure and report relevant information to the CSRC.
Specifically, following the principle of substance over form, if an issuer meets both of the
following criteria, its overseas offering and listing will be deemed as an indirect overseas
offering and listing by a domestic enterprise: (i) any of the total assets, net assets, revenues or
profits of the domestic operating entities of the issuer in the most recent accounting year
accounts for more than 50% of the corresponding figure in the issuer’s audited consolidated
financial statements for the same period; and (ii) its major operational activities are carried out
in the PRC or its main places of business are located in the PRC, or a majority of the senior
management in charge of operation and management of the issuer are Chinese citizens or are
domiciled in the PRC. The filing is required to be conducted within three business days after
the submission of the application for initial public offering and listing overseas to the overseas
regulators.
Our PRC Legal Advisor is of the view that we are required to submit the filing materials
to the CSRC within three business days after the submission of listing application to the Stock
Exchange. For details, please see “Regulatory Overview — Regulations related to Overseas
Securities Offering and Listing by Domestic Companies” in this prospectus.
M&A Rules
According to the Regulations on Merger with and Acquisition of Domestic Enterprises by
Foreign Investors () (the “ M&A Rules ”) jointly
issued by the MOFCOM, the State-owned Assets Supervision and Administration Commission
of the State Council, the SA T, the CSRC, SAIC and the SAFE on August 8, 2006, effective as
of September 8, 2006 and amended on June 22, 2009, merger and acquisition of domestic
enterprises by foreign investors means (1) acquiring the equity of a domestic enterprise so as
to convert the domestic enterprise into a foreign-invested enterprise; (2) subscribing the
increased capital of a domestic enterprise so as to convert the domestic enterprise into a
foreign-invested enterprise; (3) establishing a foreign-invested enterprise through which it
purchases the assets of a domestic enterprise and operates these assets; or (4) purchasing the
assets of a domestic enterprise, and then investing such assets to establish a foreign-invested
enterprise. The M&A Rules, among other things, further purport to require that an offshore
special purpose vehicle, formed for purposes of overseas listing of equity interests in PRC
companies and controlled directly or indirectly by PRC companies or individuals, shall obtain
the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s
securities on an overseas stock exchange, especially in the event that the special purpose
vehicle acquires shares of or equity interests in the PRC companies in exchange for the shares
of offshore companies.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 169 –


--- page 180 ---
Our PRC Legal Advisor is of the opinion that, based on its understanding of the currently
effective PRC laws and regulations, the Listing of our Company does not require prior approval
from the CSRC under the M&A Rules. However, uncertainties still exist as to how the M&A
Rules and other PRC laws and regulations will be interpreted and implemented or whether the
relevant authorities would promulgate further requirements.
SAFE Registration in the PRC
Pursuant to the Circular 37, promulgated by SAFE and which became effective on July
14, 2014 and replaced the Circular of the SAFE on Foreign Exchange Administration of Equity
Financing and Round-Trip Investments by Domestic Residents via Special Purpose V ehicles
(the “ SAFE Circular 37 ”ڏ
), (i) a PRC resident must register with the local SAFE
branch in connection with their contribution of offshore or domestic assets or equity interests
in an overseas special purpose vehicle (the “ Overseas SPV ”) that is directly established or
indirectly controlled by the PRC resident for the purpose of conducting overseas investment or
financing, and (ii) following the initial registration, the PRC resident is also required to register
with the local SAFE branch for any major change in respect of the Overseas SPV , including,
among other things, a change of Overseas SPV’s PRC resident shareholder(s), the name of the
Overseas SPV , terms of operation, or any increase or reduction of the Overseas SPV’s capital,
share transfer or swap, and merger or division. Pursuant to SAFE Circular 37, failure to comply
with these registration procedures may result in penalties. In addition, due to such failure to
comply with the registration procedures, the PRC subsidiaries of that Overseas SPV may be
prohibited from distributing their profits and dividends to their offshore parent company or
from carrying out other subsequent cross-border foreign exchange activities, and the Overseas
SPV and its offshore subsidiary may be restricted in their ability to contribute additional capital
to their PRC subsidiaries.
Pursuant to the Notice on Further Simplifying and Improving Foreign Exchange
Administration Policy on Direct Investment (the “ Circular 13 ”,ආɓӉ
), promulgated by SAFE and effective on June 1,
2015, the power to accept SAFE registration was delegated from local SAFE to qualified
banks.
As advised by our PRC Legal Advisor, as at the Latest Practicable Date, Mr. Cui has
completed the foreign exchange registrations under SAFE Circular 37.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
– 170 –


--- page 181 ---
OVERVIEW
Today’s Chuangxin Industries
We focus on alumina refining and aluminum smelting within the upstream of the
aluminum industry chain. The aluminum industry chain mainly consists of upstream aluminum
production and downstream aluminum alloy processing. Upstream aluminum production
primarily comprises three stages: bauxite mining, alumina refining and aluminum smelting.
According to CRU, refining and smelting represent the most value-added segments in the
aluminum industry chain, based on added value per ton of aluminum.
Our business mainly comprises the production and sales of electrolytic aluminum as well
as alumina and other related types of products. In 2022, 2023, 2024 and the five months ended
May 31, 2024 and 2025, the revenue from sales of electrolytic aluminum accounted for 95.5%,
90.5%, 85.0%, 89.7% and 76.6% of our total revenue, respectively, and the revenue from sales
of alumina and other related types of products accounted for 2.0%, 7.1%, 12.2%, 7.6% and
21.1% of our total revenue, respectively.
According to CRU, our aluminum smelter in Huolinguole, Inner Mongolia, was the
fourth-largest production base of electrolytic aluminum in terms of production output in 2024
in North China. We were the twelfth-largest electrolytic aluminum producer in terms of
production output in 2024 in China, according to the same source. Our subsidiary, Inner
Mongolia Chuangyuan, was awarded the accolade of National Green Factory by the MIIT in
2024.
Since 2012, we have strategically established our presence and dedicated in business
development in Huolinguole, Inner Mongolia and Binzhou, Shandong Province, which are
geographically advantageous in terms of the availability for scarce resources. As of December
31, 2024, we had achieved a high rate of self-sufficiency in alumina and electricity supply,
which is strategically and economically critical for the production of electrolytic aluminum and
for maintaining strong results of operations in comparison with some of our peers. In 2022,
2023, 2024 and the five months ended May 31, 2024 and 2025, we had an alumina
self-sufficiency rate of approximately 47%, 90%, 84%, 98% and 70%, respectively, and an
electricity self-sufficiency rate of approximately 81%, 81%, 88%, 84% and 87%, respectively.
We have built a self-sufficient, complementary, synergistic and integrated ecosystem across the
electrolytic aluminum industry chain that covers “energy — alumina refining — aluminum
smelting.”
BUSINESS
– 171 –


--- page 182 ---
Integrated Ecosystem across the Electrolytic
Aluminum Industry Chain
Alumina
Stable supply of core
materials
Quality customers including global leading
aluminum alloy processors worldwide
Self-sufficient
electricity supply
Electrolytic
aluminum
(liquid aluminum
and aluminum
ingots)
Energy
Construction
Our downstream
Lightweight
automotive
Green energy Transportation Industrial materials3C electronics
Activities undertaken by us
We prioritize sustainable development, with a long-term goal of achieving a green
transition in our operations. We are continuously developing an integrated ecosystem across
the electrolytic aluminum industry chain. We are dedicated to consolidating our cost
advantages and investing in research and development to continuously enhance our
competitiveness and market recognition. To realize our long-term goal of achieving a green
transition, we strive to reduce carbon emissions in the electrolytic aluminum industry chain.
BUSINESS
– 172 –


--- page 183 ---
Our Key Milestones
We started our business with the construction planning of our aluminum smelter in
Huolinguole, Inner Mongolia in 2012. We have been focusing on completing our capabilities
across the electrolytic aluminum industry chain and are now an aluminum industry group
covering energy, alumina refining and aluminum smelting. The following table sets forth a
summary of our key milestones in business development:
2012
July 2023
November 2022
We started the construction planning of our aluminum smelter in Huolinguole, Inner Mongolia.
Phase II of the aluminum smelting project, with a designed annual production capacity of 400.0 kt, commenced
operations at our aluminum smelter. This further expands our aluminum smelting capacity.
To increase our proportion of green energy, we started the construction of a green energy power generation project in
Inner Mongolia, constructing a wind power plant with an installed capacity of 400.0 MW and a solar power plant with
an installed capacity of 110.0 MW.
December 2017
Phase I of the aluminum smelting project, with a designed annual production capacity of 400.0 kt, commenced
operations. This marks the beginning of our aluminum smelting.
December 2018
We constructed a coal-fired thermal power plant with six sets of electricity generators, each with an installed capacity
of 330.0 MW, around our aluminum smelter. Since then, this power plant has consistently supplied stable electricity
for our electrolytic aluminum production.
Our alumina refining project commenced operations at our alumina refinery in Binzhou, Shandong Province, with a
designed annual production capacity of 800.0 kt. This marks the beginning of our efforts to achieve high alumina
self-sufficiency.
Our project of aluminum-based new material commenced operations at our alumina refinery, containing designed
annual a production capacity of 400.0 kt of alumina. This further expands our alumina refining capacity.
December 2024
February 2019
October 2020
We commenced the pilot production of our aluminum hydroxide production facility with an annual designed
production capacity of 1,500.0 kt. This further complements our capabilities in alumina refining and adds value to our
integrated ecosystem across the electrolytic aluminum industry chain.
February 2025
We started the construction of an aluminum hydroxide calcination production line with a production capacity of 2,000
kt per year of alumina calcined from aluminum hydroxide, which has been constructed as of the date of this prospectus
and will begin pilot production in November, 2025. This further strengthens our capabilities in alumina refining and
adds value to our integrated ecosystem across the electrolytic aluminum industry chain.
We have conducted feasibility studies and invested in an integrated electrolytic aluminum industry chain project in
Saudi Arabia.
May 2025
BUSINESS
– 173 –


--- page 184 ---
Our Business Model and Products
The aluminum industry chain mainly consists of upstream aluminum production and
downstream aluminum alloy processing. Upstream aluminum production primarily comprises
three stages: bauxite mining, alumina refining and aluminum smelting.
Bauxite Alumina Electrolytic
Aluminum
(liquid and
aluminum ingots)
3C electronic products
Lightweight automotive
Green energy
Transportation
Industry materials
Construction
Aluminum
Alloy
Refining Smelting
Our Business Focus
Melting
and casting
Final
application
Illustration of the Aluminum Industry Chain
We focus on alumina refining and aluminum smelting within the upstream of the
aluminum industry chain. According to CRU, alumina refining and aluminum smelting are the
most value-added segments in the aluminum industry chain in terms of added value per ton of
aluminum. Our business mainly comprises the production and sales of electrolytic aluminum
as well as alumina and other related types of products. In 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, the revenue from sales of electrolytic aluminum accounted for
95.5%, 90.5%, 85.0%, 89.7% and 76.6% of our total revenue, respectively, and the revenue
from sales of alumina and other related types of products accounted for 2.0%, 7.1%, 12.2%,
7.6% and 21.1% of our total revenue, respectively.
Electrolytic Aluminum
Electrolytic aluminum is extracted through the electrolysis of alumina. Our electrolytic
aluminum products include liquid aluminum and aluminum ingots. Aluminum ingots are solid
blocks of aluminum produced by casting liquid aluminum into standardized shapes. Our
electrolytic aluminum products are utilized by aluminum alloy processors and are processed
into aluminum alloy materials, which are widely applied in industries such as 3C electronics,
lightweight automotive, green energy, transportation, industrial materials and construction.
According to CRU, aluminum is the second largest metal consumed in tonnage in the
world since 1980. By the end of 2024, global consumption of electrolytic aluminum reached
approximately 73 mt, with the industry in China leading the growth and accounting for
approximately 45 mt of the global consumption. The global consumption of electrolytic
aluminium is expected to further grow at a CAGR of 1.6% from 2025 to 2028.
BUSINESS
– 174 –


--- page 185 ---
Our aluminum smelting business is operated by Inner Mongolia Chuangyuan, our major
operating entity in China. During the Track Record Period, our aluminum smelting had an
annual designed production capacity of 788.1 kt of electrolytic aluminum. In 2022, 2023, 2024
and the five months ended May 31, 2024 and 2025, we had 744.1 kt, 757.9 kt, 755.4 kt, 315.6
kt and 310.7 kt of electrolytic aluminum output, respectively.
Inner Mongolia, where our aluminum smelter is located, has a unique geographical
advantage. Compared to other major provinces for electrolytic aluminum output in China, such
as Xinjiang and Y unnan, Inner Mongolia is geographically closer to North and East China,
where a large number of downstream aluminum product manufacturers are located, allowing us
to effectively control transportation costs. In addition, driven by the national goals of reaching
peak carbon emissions by 2030 and achieving carbon neutrality by 2060, the demand for green
power aluminum from downstream customers continues to grow. The ample wind and solar
power resources available at low costs in Huolinguole, Inner Mongolia allow us to increase the
utilization of green power in aluminum smelting.We are constructing wind power plants and
solar power plants with a totaling projected installed capacity of 1,750.0 MW. Phase I
comprises (i) a wind power plant with an installed capacity of 540.0 MW, which had been
operational and connected to the grid as of the Latest Practicable Date; and (ii) a solar power
plant with an installed capacity of 110.0 MW, 60.0 MW of which had been installed and some
had been operational and connected to the grid as of the Latest Practicable Date. We expect the
remaining capacity to be fully operational and connected to the grid by the end of 2026. As of
the date of this prospectus, construction of the majority of the above (i) and (ii) under Phase
I, with a total installed capacity of 457.0 MW, had been completed, and the corresponding
electricity generators were operational and connected to the grid. Phase II comprises a wind
power plant with an installed capacity of 1,000.0 MW, 500.0 MW of which had been under
construction since March, 2025 and is expected to be fully operational and connected to the
grid by March 2026, and the other 500.0 MW had been under site preparation for the
construction as of the Latest Practicable Date and is expected to be fully operational and
connected to the grid by October 2026. To further our commitment to green power supply, we
also plan to construct a 100.0 MW distributed solar power plant on-site, for which we had been
designing the construction project as of the Latest Practicable Date. It is expected to commence
its initial operation by the end of 2026.
As the majority of the projected installed capacity of the Phase I wind power plants and
solar power plants were operational as of the date of this prospectus and the remaining capacity
is anticipated to be fully operational by the end of 2026, and as we continue to procure green
electricity from the grid, our proportion of green energy utilized will continue to increase
towards the end of 2025. By the end of 2026 when both the above Phase I and Phase II wind
power plants and solar power plants become fully operational, and with procurement of green
electricity from the grid, we aim to achieve over 50% in the proportion of green energy
utilized. We continually obtain green power aluminum quota that meets the standards for green
power aluminum set by the China Nonferrous Metals Industry Association. Our green power
aluminum products satisfy the requirements of both domestic and international high-end
customers for upstream manufacturers to utilize green energy in aluminum smelting. We
believe our green power aluminum products can help us capture market opportunities driven
by the concept of the green development and propel our business growth.
BUSINESS
– 175 –


--- page 186 ---
According to CRU, the Aluminum Capacity Replacement Scheme (),
issued by the MIIT, imposes an annual electrolytic aluminum production capacity cap of 45 mt.
As a result, China’s aluminum smelting capacity utilization rate reached a historical peak of
96% as of May 31, 2025, and the annual demand gap in the market is expected to exceed one
mt until 2034. Meanwhile, overseas demand continues to grow. To fully capture these market
opportunities, we actively pursue a globalization strategy. We invested in an integrated
electrolytic aluminum industry chain project in Saudi Arabia, with a designed annual
production capacity of 500.0 kt of electrolytic aluminum. See “History, Reorganization and
Corporate Structure — Major Acquisitions, Disposals and Mergers — Investment During Track
Record Period.” As of the Latest Practicable Date, in pursuit of our globalization strategy, we
had conducted relevant market research and commenced collaboration with local third-party
business partners. According to CRU, the demand for electrolytic aluminum in the Middle East
is expected to grow at a CAGR of approximately 4.6% from 2025 to 2028.
Alumina and Other Related Types of Products
Alumina is refined primarily from bauxite and is one of the main raw materials for
aluminum smelting. Our alumina business is mainly operated by Shandong Chuangyuan, a
subsidiary of Inner Mongolia Chuangyuan. We have an alumina refinery in Binzhou, Shandong
Province, with an annual designed production capacity of 1,200.0 kt. Our alumina refinery is
equipped with a thermal power plant that realizes partial electricity self-sufficiency. During the
Track Record Period, our alumina products were primarily used for our proprietary aluminum
smelting.
Our alumina refinery is strategically located in Binzhou, Shandong Province with
geographical advantages. Shandong province is renowned for having the largest annual
alumina production output in terms of volume and Binzhou is the largest import city for bauxite
in terms of volume in China. Our alumina refinery is merely approximately 40 km away from
Huanghua Port, the second largest bauxite logistics transshipment port in the northern port
cluster. Our alumina refinery is approximately 70 km from Binzhou Port, which facilitates
direct land transportation of bauxite from Y antai Port, the world’s leading bauxite import port
and the primary entry point for China’s trade with Africa. The proximity of our alumina
refinery to these ports ensures a stable and sufficient supply of bauxite while allowing us to
effectively control transportation costs.
In addition to alumina, we also produced aluminum hydroxide during the Track Record
Period. Aluminum hydroxide is often produced as an intermediate in the Bayer process and can
be calcined to produce alumina. See “— Our Production Process — Alumina Products.” During
the Track Record Period, our aluminum hydroxide produced was primarily calcined to produce
alumina in-house and was also separately sold to customers. To further add value to our
self-sufficient, complementary, synergistic and integrated ecosystem across the industry chain,
we started to construct an aluminum hydroxide production facility at our alumina refinery with
an annual designed production capacity of 1,500 kt, which commenced pilot production in
December 2024 and had turned into full operations in April 2025. We expect to utilize this
production facility to produce aluminum hydroxide that is further calcined to produce alumina.
We had also secured the regulatory approval for 6,000 kt per year production capacity of
alumina calcined from aluminum hydroxide as of the Latest Practicable Date.
BUSINESS
– 176 –


--- page 187 ---
A Self-sufficient, Complementary, Synergistic and Integrated Ecosystem across the Industry
Chain
We have built an integrated ecosystem across the electrolytic aluminum industry chain,
covering “energy — alumina refining — aluminum smelting.” We have established capabilities
in the upstream supply of alumina and electricity for aluminum smelting. Benefiting from the
synergies between the upstream and downstream of the electrolytic aluminum industry chain,
we effectively mitigate the risk of fluctuations in the market price of certain raw materials. This
enhances our overall risk resilience and ensures the steadiness of our raw material supplies
across economic cycles. To safeguard our capabilities in the upstream supply of electricity and
alumina, we have made the following strategic moves:
For the supply of electricity, our aluminum smelter is equipped with a proprietary
coal-fired thermal power plant with six sets of electricity generators, each with an installed
capacity of 330.0 MW. The proprietary coal-fired thermal power plant is able to realize 100%
electricity self-sufficiency for our aluminum smelting. We also procure electricity, including
green electricity, from the grid. Our rate of electricity self-sufficiency was approximately 88%
in 2024, significantly higher than the industry average of approximately 55% in the same
period, according to CRU. Our rate of electricity self-sufficiency was approximately 87% in
the five months ended May 31, 2025.
For the supply of alumina, our alumina refinery ensures a cost-effective, high-quality,
sufficient and sustainable supply of alumina for aluminum smelting. Our rate of alumina
self-sufficiency reached approximately 84% in 2024. Our ability to produce and calcine
aluminum hydroxide further enhances our capacity to ensure a stable supply of alumina. Our
aluminum hydroxide production facility and calcining capabilities further add value to our
self-sufficient, complementary, synergistic and integrated ecosystem across the industry chain.
Efficiently converting aluminum hydroxide into alumina through calcination allows us to
maintain strict quality standards, reduce costs and minimize waste, ultimately strengthening
our competitive edge and sustainability in the aluminum market.
For the sales of our electrolytic aluminum products, our largest customer since 2023,
Innovation New Material, is a global leading aluminum alloy producer, recognized as the
largest seller of aluminum alloy round ingots, and was founded and controlled by our
Controlling Shareholder, Mr. Cui. Our close cooperation with the global leading aluminum
alloy producer reflects that the high quality of our products are highly recognized by our
customers. Such cooperation in turn allows us to quickly sense the changes in and closely
follow the market demand as well as continuously improve the competitiveness of our
products.
BUSINESS
– 177 –


--- page 188 ---
Our Historical Performance
During the Track Record Period, we achieved a continual and stable improvement in our
revenue. Our revenue increased by 2.4% from RMB13,489.7 million in 2022 to RMB13,814.7
million in 2023, and by 9.8% from RMB13,814.7 million in 2023 to RMB15,163.2 million in
2024. Our revenue further increased by 22.6% from RMB5,883.2 million in the five months
ended May 31, 2024 to RMB7,213.5 million in the five months ended May 31, 2025.
Benefiting from our self-sufficient, complementary, synergistic and integrated ecosystem
across the electrolytic aluminum industry chain, we achieved industry-leading cost advantages
which significantly unleashed our profitability during the Track Record Period. In 2022, 2023,
2024 and the five months ended May 31, 2024 and 2025, our gross profit margin was 15.1%,
16.9%, 28.2%, 28.2% and 19.9%, respectively. In 2022, 2023, 2024 and the five months ended
May 31, 2024 and 2025, our EBITDA margin (non-IFRS measure) was 20.5%, 21.3%, 31.6%,
31.8% and 23.1%. In 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, our
net profit margin was 6.8%, 7.8%, 17.3%, 17.3% and 11.9%. Our net profit increased by 18.4%
from RMB912.9 million in 2022 to RMB1,080.6 million in 2023, and increased significantly
from RMB1,080.6 million in 2023 to RMB2,629.5 million in 2024. Our net profit decreased
by 14.4% from RMB999.4 million in the five months ended May 31, 2024 to RMB855.5
million in the five months ended May 31, 2025. During the Track Record Period, our business
operations and financial condition had not been materially impacted by any public health
incident.
OUR STRENGTHS
Strategic Focus on Geographical Areas with Advantages in Scarce Resources, Building a
Sustainable Competitive Edge in Resources.
With unique geographical advantages, Inner Mongolia is a major province for electrolytic
aluminum output in China, according to CRU. It benefits from abundant conventional and
green energy resources, available at low costs, that enable stable energy supply for electricity
generation. We benefit from the relatively low electricity costs as a result of our ability to
generate electricity and the abundant power resources in Inner Mongolia. The price of
electricity consumption of our current coal-fired thermal power generation, which is RMB0.37
per kWh in 2024, is lower than the nation’s average of RMB0.43/kWh, according to CRU. In
the five months ended May 31, 2025, the price of electricity consumption of our current
coal-fired thermal power generation was RMB0.33 per kWh. In addition, compared to other
major provinces for electrolytic aluminum output in China, such as Xinjiang and Y unnan
Province, Inner Mongolia is geographically closer to North and East China, where a large
number of downstream aluminum product manufacturers are located. As a result, Inner
Mongolia offers smaller transportation radius for supplying electrolytic aluminum to
downstream aluminum product manufacturers located in these areas. In particular, liquid
aluminum can be safely transported up to a 50 km radius. As of the Latest Practicable Date,
there are a number of existing and potential downstream customers within a 25 km radius
around our aluminum smelter in Inner Mongolia with a total production capacity of over 1.9
BUSINESS
– 178 –


--- page 189 ---
mt. This capacity exceeds our annual production capacity of 788.1 kt, indicating a robust
market demand in liquid aluminum from downstream customers in close proximity. According
to CRU, the total aluminum production output in Inner Mongolia increased from approximately
4,500 kt in 2018 to 6,569 kt in 2024, at a CAGR of 7.0%. Inner Mongolia holds more than 40
bt of coal reserves, representing approximately 20% of China’s total coal reserves. The ample
coal resource ensures a sufficient electricity supply while significantly reducing coal
procurement and transportation costs. In addition, Inner Mongolia ranks first and second in
terms of the average utilization hours of wind and solar power in 2022, respectively, among all
provinces in China. It is classified as a Class I resource area with abundant wind energy and
a Class II resource area with abundant solar energy, as well as one of the top provinces for wind
energy development and utilization.
Since 2012, we have strategically established our presence in Huolinguole, Inner
Mongolia, a city renowned for its green power aluminum capabilities. This location has
comprehensive aluminum smelting facilities and infrastructure, enhancing our operational
efficiency. According to CRU, our aluminum smelter in Huolinguole, Inner Mongolia, was the
fourth-largest production base of electrolytic aluminum in terms of production output in 2024
in North China. We were the twelfth-largest electrolytic aluminum producer in terms of
production output in 2024 in China, according to the same source.
Our alumina refinery is strategically located in Binzhou, Shandong Province with
geographical advantages. Shandong province is renowned for having the largest annual
alumina production output in terms of volume and Binzhou is the largest import city for bauxite
in terms of volume in China. Bauxite is a major raw material for alumina refining.
Approximately 80% of bauxite used in China is sourced from abroad, according to CRU. Our
alumina refinery is merely approximately 40 km away from Huanghua Port, the second largest
bauxite logistics transshipment port in the north port cluster. Our alumina refinery is
approximately 70 km from Binzhou Port, which facilitates direct land transportation of bauxite
from Y antai Port, the world’s leading bauxite import port and the primary entry point for
China’s trade with Africa. The proximity of our alumina refinery to these ports ensures a stable
and sufficient supply of bauxite while allowing us to effectively control transportation costs.
Distinct Advantages in Preparing for the Transition to Green Power Aluminum.
Economic moat in our aluminum business proactively preparing for enhanced capabilities
in green energy supply.
By the end of 2025, the proportion of green power consumption in aluminum smelting,
namely the green energy as a proportion to all energy used, is expected to reach above 25% as
mandated by the industrial policies in China. As a result, a green, safe, reliable and
cost-effective electricity supply is critical for the electrolytic aluminum industry in China. In
addition, as carbon neutrality has become an international consensus, aluminum smelting
companies worldwide are reducing their reliance on fossil fuels and increasingly utilizing
green energy during production. According to CRU, using purely green power in electrolytic
aluminum significantly reduces the carbon footprint by approximately 11 tons per ton of
BUSINESS
– 179 –


--- page 190 ---
electrolytic aluminum produced compared to using purely the thermal power in aluminum
smelting. This makes green power aluminum more effective in addressing global market
restrictions on carbon emissions for import and export, thereby better aligning with global
market entry requirements.
To build an economic moat in our aluminum business, we have been proactively preparing
for enhanced capabilities in green energy supply. We are building our own wind and solar
power plants. As of the Latest Practicable Date, we had commenced using green energy
generators. By the end of 2026, we aim to achieve over 50% proportion of green energy
utilized, significantly exceeding the 25% target requirement imposed by industrial policies in
China. Our green power aluminum products, with their clear and traceable carbon footprint, are
expected to attract more high-end customers. These products effectively meet the standards in
green development and integrate into both domestic and overseas markets, thereby enhancing
our market competitiveness.
Potential for profitability improvements, benefiting from the abundant green energy
available at low costs in Inner Mongolia.
Wind power and solar power are natural green electricity. Compared to fossil energy, such
as coal, the costs of wind and solar power resources are more economical, primarily because
they do not need to be procured for power generation. In addition, compared to hydropower,
investment in wind and solar power is typically less costly. Benefiting from the advancements
in productivity and technology within China’s new energy sector, the LCOE for wind and solar
power offers the greatest cost advantages compared to other power sources.
We had started the construction of a 540.0 MW wind power plant and a 110.0 MW solar
power plant near our aluminum smelter in Inner Mongolia, as of May 31, 2025. According to
our feasibility study report for the power plant construction projects, the annual expected
utilization hours for our wind power plant are expected to be 3,778.0 hours and 1,418.0 hours
for our solar power plant. According to the 2023-2024 National Power Supply and Demand
Analysis and Forecast Report, the national average utilization hours for wind power plants
were 2,225.0 hours and 1,286.0 hours for solar power plants in 2023. The delivered electricity
costs of green power generation ranges approximately from RMB0.10 to RMB0.18 per kWh,
based on the estimated total investment in our wind and solar power plants, which is
significantly lower than the price of electricity consumption of current coal-fired thermal
power generation, which is RMB0.37 per kWh in 2024 and RMB0.33 per kWh in the five
months ended May 31, 2025.
Furthermore, in light of the rising carbon price, adhering to the principle of low carbon
emission and striving to become a low carbon emission company, we have huge room for
improving profitability. With our endeavor in the transition to green aluminum, we can
effectively reduce the carbon dioxide emission from electricity production, thus minimizing the
downward pressure from rising carbon price on profitability. According to CRU, in China, the
average carbon dioxide emission per ton of electrolytic aluminum produced from an aluminum
smelter using thermal power was 12.6 tons in 2024, with 10.8 tons from electricity generation
BUSINESS
– 180 –


--- page 191 ---
and 1.8 tons from the electrolysis process. By utilizing wind and solar power for electricity
generation, we aim to achieve zero carbon dioxide emissions from electricity production in the
long term. Along the way towards achieving this aim, we plan to achieve over 50% proportion
of green energy utilized by the end of 2026.
As a result, our endeavor in the transition to green aluminum is both socially and
economically effective. It reduces the carbon emissions during our production process and
enhances our profitability by reducing the costs of electricity.
A Self-sufficient, Complementary, Synergistic and Integrated Ecosystem across the
Electrolytic Aluminum Industry Chain, Ensuring Strong Risk Resilience and Steadiness
of Raw Material Supplies.
Having operated in the electrolytic aluminum industry for 12 years, we have established
capabilities in the upstream supply of alumina and electricity at high self-sufficiency rates. We
also maintain a close cooperation with downstream customers, in particular Innovation New
Material, a global leading aluminum alloy producer, recognized as the largest seller of
aluminum alloy round ingots. Our extensive experience has enabled us to build a self-
sufficient, complementary, synergistic and integrated ecosystem across the electrolytic
aluminum industry chain. This ecosystem reduces the risk of raw material and electricity price
fluctuations, enhances production controllability and allows us to quickly sense and respond to
changes in market demand. By integrating the upstream and downstream processes, we
effectively control multiple stages across the procurement, production and sales, mitigating the
impact of raw material market fluctuations. As a result, we have strong risk resilience and
steadiness of our raw material supplies.
Achieving a high rate of electricity self-sufficiency and accelerating the transition to clean
and low-carbon electricity supply.
Electricity costs represent a major portion of production costs for all electrolytic
aluminum companies. According to CRU, in 2024, electricity costs account for approximately
36% of the total production costs for aluminum smelting companies in China. To secure a
stable and sufficient electricity supply, we utilize the abundant lignite resource in Huolinguole,
Inner Mongolia. Our aluminum smelter is equipped with a proprietary coal-fired thermal power
plant with six sets of electricity generators, each with an installed capacity of 330.0 MW. The
proprietary coal-fired thermal power plant is able to realize 100% electricity self-sufficiency
for our aluminum smelting. We procure electricity, including green electricity, from the grid to
ensure a stable and reliable power supply that mitigate the potential fluctuations in our
self-generated electricity while increasing our green power usage. Our rate of electricity
self-sufficiency was approximately 88% in 2024, significantly higher than the industry average
of approximately 57% in the same period, according to CRU. Our rate of electricity
self-sufficiency was approximately 87% in the five months ended May 31, 2025.
BUSINESS
– 181 –


--- page 192 ---
Along with the increasing awareness on ESG among downstream customers, in particular
the reduction of carbon emissions, and along with the rising carbon price, the adoption of green
power is critical to the sustainable development of aluminum smelting companies. We are
currently accelerating the construction of green power plants and we also procure green power
from external sources for the production of green power aluminum. In the future, our
proprietary green power plants and proprietary coal-fired thermal power plants will effectively
complement each other. By the end of 2026, we aim to achieve over 50% proportion of green
energy utilized. Meanwhile, thermal power will assist in peak adjustment, supply-demand
balancing and stability enhancement. This complementary approach optimizes the foresight
and flexibility of our power supply management, ensuring a stable and sufficient energy
provision.
Achieving high rate of alumina self-sufficiency with long-term stable supply of core raw
materials.
We have quality and guaranteed raw material supply, which is critical to maintain our
self-sufficient, complementary, synergistic and integrated ecosystem across the electrolytic
aluminum industry chain. Our subsidiary, Shandong Chuangyuan, has an alumina production
output that satisfies the need for core raw materials used in our aluminum smelting.
Meanwhile, we obtain stable, high-quality supply of bauxite, carbon anodes and other raw
materials, which support our current and future production needs. We believe that the
self-sufficiency and stable supply of raw materials help us enhance competitiveness and
improve profitability.
Our ability to produce and calcine aluminum hydroxide further enhances our capacity to
ensure a stable supply of alumina. Our aluminum hydroxide production and calcining
capabilities further add value to our self-sufficient, complementary, synergistic and integrated
ecosystem across the industry chain. Efficiently converting aluminum hydroxide into alumina
through the calcination process allows us to uphold strict quality standards, reduce operational
costs and minimize waste throughout our processes. This strategic approach ultimately
strengthens our competitive edge of alumina self-sufficiency.
Capturing opportunities in the global aluminum industry by maintaining a long-term stable
cooperation with Innovation New Material, a global leading aluminum alloy producer.
We mainly produce high precision aluminum products, such as 99.80% aluminum. Our
products are widely recognized and trusted by downstream customers due to the stable supply
and high quality, which meet the stringent requirements of both domestic and overseas
high-end customers for aluminum products.
Innovation New Material is a global leading aluminum alloy producer, recognized as the
largest seller of aluminum alloy round ingots, and was founded and controlled by our
Controlling Shareholder, Innovation New Material has been our largest customer since 2023.
Its products have been extensively utilized across various industries, including 3C electronics,
lightweight automotive, green energy, transportation, industrial materials and construction.
BUSINESS
– 182 –


--- page 193 ---
According to the China Nonferrous Metals Fabrication Industry Association, in 2023,
Innovation New Material sold 3,249.1 kt of aluminum alloy billets, with a domestic market
share of 11.3% and an overseas market share of 8.4%, ranking first in both markets. Since
2018, Innovation New Material has been listed as a supplier by a leading global electronic
device manufacturer. To cater to the requirements of high-end domestic and overseas
customers, including a prominent European automotive manufacturer, Innovation New
Material strategically established an aluminum processing line with an annual capacity of 50.0
kt near our Huolinguole aluminum smelter. This further opens up new business opportunities
that we can leverage through the stable cooperation with Innovation New Material.
Industry-leading Cost Advantages Leading to Swiftly Unleashed Profitability.
We strategically focus on geographic areas with abundant natural resources, such as Inner
Mongolia and Shandong Province. In addition, by continuously transitioning towards green
power supply, we have successfully built a self-sufficient, complementary, synergistic and
integrated ecosystem across the electrolytic aluminum industry chain. As a result, we have
industry-leading cost advantages and swiftly unleashed profitability. Our cash costs of
aluminum per ton amounted to approximately RMB15,112 in 2024, significantly lower than
China’s average cash costs of aluminum per ton of approximately RMB17,700 per ton,
according to CRU. Our Group’s cash cost of aluminum per ton in the five months ended May
31, 2025 was approximately RMB14,791.7. According to CRU, our ability to manage the cash
costs of aluminum per ton was among the top 5% of all aluminum smelting companies in China
and competitive on a global scale, ranking among the top 30%, in 2024 (comparing our cash
costs in 2024 to the industry average cash costs in China and on a global scale in 2024,
respectively). By capitalizing on our cost advantages, we swiftly unleash profitability. During
times of high demand and increasing prices for electrolytic aluminum, our profitability grows
at a faster rate than that of our competitors, primarily due to our lower production costs. Our
total revenue increased by 9.8% from RMB13,814.7 million in 2023 to RMB15,163.2 million
in 2024 and further increased by 22.6% from RMB5,883.2 million in the five months ended
May 31, 2024 to RMB7,213.5 million in the five months ended May 31, 2025. Our gross profit
increased significantly from RMB2,336.3 million in 2023 to RMB4,276.5 million in 2024 and
decreased from RMB1,640.3 million in the five months ended May 31, 2024 to RMB1,432.7
million in the five months ended May 31, 2025. Our net profit increased significantly from
RMB1,080.6 million in 2023 to RMB2,629.5 million in 2024 and decreased from RMB999.4
million in the five months ended May 31, 2024 to RMB855.5 million in the five months ended
May 31, 2025. Our gross profit margin was 16.9%, 28.2%, 28.2% and 19.9%, respectively; our
EBITDA margin (non-IFRS measure) was 21.3%, 31.6%, 31.8% and 23.1%, respectively; and
our net profit margin was 7.8%, 17.3%, 17.3% and 11.9%, respectively, in 2023, 2024 and the
five months ended May 31, 2024 and 2025.
BUSINESS
– 183 –


--- page 194 ---
We emphasize refined management, maintain up-to-date equipment and have a high level
of automation during production. As a result, our electrolytic aluminum annual labor
productivity per capita is significantly higher than the industry average. According to CRU, the
industry average electrolytic aluminum annual labor productivity per capita in China was
between approximately 260 tons and 280 tons during the Track Record Period. Our annual
electrolytic aluminum labor productivity per capita, amounting to approximately 590 tons to
670 tons during the Track Record Period, was approximately 2.2 to 2.6 times that of the
industry average during the same periods, respectively.
By continuously upgrading production techniques relating to aluminum smelting and
minimizing the electricity consumption of aluminum per ton, we continue to deepen our costs
and profitability advantages. Our electricity consumption of aluminum smelting was 13,366.0
kWh per ton in 2024 and 13,314 kWh per ton in the five months ended May 31, 2025.
According to CRU, the industry average of the electricity consumption of aluminum smelting
was 13,670.0 kWh per ton in 2024. To better control carbon emission and energy consumption,
we have planned and implemented several technological transformation projects, which are
expected to be completed by the end of 2025. By then, we anticipate to reduce direct current
electricity consumption of aluminum smelting from 12,814.0 kWh per ton in 2024 to 12,600.0
kWh per ton in 2025, and the overall electricity consumption of aluminum smelting from
13,366.0 kWh per ton in 2024 to 13,290.0 kWh per ton in 2025.
Active Implementation of Globalization Strategies.
We are actively pursuing globalization strategies. The aluminum industry is experiencing
rapid and continuous demand growth, driven by an imbalance between supply and demand.
Globally, regulatory and social trends focused on carbon emission reduction and enhanced
environmental protection have led to a slow growth rate in the overall aluminum smelting
capacity. Developed countries in Europe and the United States are reducing their aluminum
smelting capacity, while production in Russia and Oceania remains stagnant. Despite these
supply constraints, global consumption of electrolytic aluminum is expected to continue
growing, according to CRU. From 2025 to 2028, the global demand for electrolytic aluminum
is expected to grow at a CAGR of 1.6%, including a CAGR of 4.7% for Africa, 3.8% for
regions in the Asia excluding China and the Middle East, 5.5% for North America, 4.6% for
the Middle East (5.9% for Saudi Arabia) and 1.8% for Europe. From a domestic standpoint,
China’s aluminum smelting production constituted approximately 59% of the global aluminum
smelting production in 2024, according to CRU. The Aluminum Capacity Replacement Scheme
(), issued by the MIIT, imposes an annual electrolytic aluminum
production capacity cap of 45 mt. As a result, China’s aluminum smelting capacity utilization
rate reached a historical peak of 96% as of December 31, 2024 and the annual demand gap in
the market is expected to exceed one mt until 2034.
BUSINESS
– 184 –


--- page 195 ---
The rich reserves of petroleum and natural gas in the Middle East provide cost-effective
and stable energy supply to aluminum smelting. According to CRU, in 2024, the cash cost
proportion relative to total revenue for the four recognized aluminum smelters in the Gulf
region ranked among the lowest 25% globally. The average cost of industrial electricity in
Saudi Arabia is significantly lower than that during the non-peak hours in the PRC.
With our extensive operational experience in the electrolytic aluminum industry, we
invested an integrated electrolytic aluminum industry chain project with expected annual
production capacity of 500.0 kt in Saudi Arabia. See “History, Reorganization and Corporate
Structure — Major Acquisitions, Disposals and Mergers — Investment During Track Record
Period.” As of the Latest Practicable Date, we are in the early stages of preparation for
construction design. As of the same date, the Saudi Project had obtained the relevant land use
right and permits.
We aim to capitalize on the investment of the projects in Saudi Arabia. Leveraging our
years of expertise in production techniques, refined management skills and industry experience
in the electrolytic aluminum industry, we aim to enhance our low-cost advantages in our global
operations. This strategy will enable us to attain global industry leadership and stimulate global
business growth, thereby creating new development opportunities. We expect the phased
commencement of these overseas projects to further enhance our operational status and support
our vision to become a green aluminum industry group in the global market.
Our Chairman’s Vision and the Management Team’s Outstanding Operational Expertise
Guide Us Toward Sustainable and Steady Growth.
Our Chairman of the Board, Mr. Cui, possesses a strategic vision characterized by
long-termism. Mr. Cui is devoted into cultivating profound expertise in aluminum production,
continuously delving into the aluminum industry. As the founder of Innovation Group, Mr. Cui
has successfully led the aluminum alloy processing business of Innovation Group to a globally
leading position in the aluminum industry and is committed to realizing the vision of building
a green aluminum industry group in the global market. Mr. Cui holds profound industry
resources and extensive social influence, currently serving as a deputy to the 14th National
People’s Congress (ڌan executive committee member of the All-China
Federation of Industry and Commerce ( Ό਷ʈਠᑌ), vice chairman of the Shandong Federation
of Industry and Commerce (ʈਠᑌ), vice president of the China Nonferrous Metals
Industry Association (᙮ʈุ՘ึ), vice director general of the China Nonferrous
Metals Fabrication Industry Association (᙮̋ʈʈุ՘ึ), executive vice
president of the Shandong Aluminum Industry Association (቙ุ՘ึ), and president of
the Binzhou Aluminum Industry Association ( Ᏽψ̹቙Бุ՘ึ). Mr. Cui has been granted
the award of the Outstanding Entrepreneur of Shandong Province (࢕.)
BUSINESS
– 185 –


--- page 196 ---
Under Mr. Cui’s leadership, our senior management team, based on rich management
experience in the aluminum industry, guides us in implementing our long-term strategic
planning. Our senior management team is dedicated to continuously enhancing refined
management, strengthening the optimization of raw material procurement processes,
continuously upgrading core production facilities and pursing digitalization to optimize core
production processes such as energy generation, alumina refining and aluminum smelting. In
this way, we are able to enhance production efficiency and establish industry-leading cost
advantages.
We believe that Mr. Cui’s vision and our senior management team’s outstanding
operational expertise ensure us to maintain sustainable and steady development of our
business, while keeping pace with future industry trends, seizing global growth opportunities
and achieving our vision of building a green aluminum industry group in the global market.
OUR STRATEGIES
Fully Explore Wind and Solar Energy to Establish a Stable Green Power Aluminum
Business.
We value social responsibility. We are dedicated to aligning with national goals of
reaching peak carbon emissions by 2030 and achieving carbon neutrality by 2060. We integrate
technological innovation, ecological responsibility and environmentally friendly development
into our business model, which we believe is essential for the continuous development of
global aluminum smelting companies. From a social responsibility perspective, our green
production methods significantly cut down on energy consumption and emissions during the
electricity generation process, ensuring our operations are in line with global sustainability
trends. Economically, the adoption of green power reduces our operating costs, thereby
enhancing our profitability. In addition, according to CRU, an increasing number of
multinational companies in sectors such as 3C electronics products and automotive
manufacturing are reducing the reliance on thermal power aluminum in favor of green power
aluminum for their product development. By integrating green principles into our business
operations, we are committed to not only enhancing our corporate image but also attracting
partners and investors who prioritize environmental consciousness, thereby broadening our
growth opportunities and helping us achieve our vision.
As of the Latest Practicable Date, our thermal power plants have a total installed capacity
of 2,110.0 MW, being able to fully cover our demands for electricity. To align with our
long-term strategy for green and sustainable growth, we are reducing the reliance on fossil
fuels and increasingly utilizing green energy for electricity generation. We strategically locate
our aluminum smelter in Inner Mongolia, a Class I resource area with abundant wind and a
Class II resource area with abundant solar energy. With these green energy resources, we aim
to increase the proportion of green power aluminum in our production. We are constructing
wind power plants and solar power plants with a totaling projected installed capacity of 1,750.0
MW. Phase I comprises (i) a wind power plant with an installed capacity of 540.0 MW, which
had been operational and connected to the grid as of the Latest Practicable Date; and (ii) a solar
BUSINESS
– 186 –


--- page 197 ---
power plant with an installed capacity of 110.0 MW, 60.0 MW of which had been installed and
some had been operational and connected to the grid as of the Latest Practicable Date. We
expect the remaining capacity to be fully operational and connected to the grid by the end of
2026. As of the date of this prospectus, construction of the majority of the above (i) and (ii)
under Phase I, with a total installed capacity of 457.0 MW, had been completed, and the
corresponding electricity generators were operational and connected to the grid. Phase II
comprises a wind power plant with an installed capacity of 1,000.0 MW, 500.0 MW of which
had been under construction since March, 2025 and is expected to be fully operational and
connected to the grid by March 2026, and the other 500.0 MW had been under site preparation
for the construction as of the Latest Practicable Date and is expected to be fully operational and
connected to the grid by October 2026. To further our commitment to green power supply, we
also plan to construct a 100.0 MW distributed solar power plant on-site, for which we had been
designing the construction project as of the Latest Practicable Date. It is expected to commence
its initial operation by the end of 2026.
Along with these developments, we plan to build an integrated green energy system with
our proprietary power plants to maximize green power supply, enhance energy efficiency and
reduce both electricity costs and carbon emissions. As the majority of the projected installed
capacity of the Phase I wind power plants and solar power plants were operational as of the
date of this prospectus and the remaining capacity is anticipated to be fully operational by the
end of 2026, and as we continue to procure green electricity from the grid, our proportion of
green energy utilized will continue to increase towards the end of 2025. By the end of 2026
when both the Phase I and Phase II wind power plants and solar power plants become fully
operational, and with procurement of green electricity from the grid, we aim to achieve over
50% proportion of green energy utilized, significantly exceeding the 25.0% requirement for the
electrolytic aluminum industry by 2025 according to China’s 2024-2025 Action Plan for
Energy Saving and Carbon Reduction ( 2024-2025). This transition
allows us to capture the growing demand for green power aluminum in the domestic and
overseas markets.
Proactively Expand into Overseas Markets and Increase Overseas Production Capacities
as a Response to the Belt and Road Initiative (the “BRI”).
We will further implement our globalization strategies. China’s aluminum smelting
capacity is nearing its policy limit, while overseas demand for downstream aluminum products
continues to rise, according to CRU. In 2024, China exported approximately 6,302 kt of
aluminum products, totaling USD21.1 billion, according to CRU. The growing overseas
demand and the limited domestic production capacity create new opportunities for our
globalization strategy. Resonating with these opportunities and the broader context of
globalization, we proactively respond to the BRI and have invested in an integrated electrolytic
aluminum industry chain project in Saudi Arabia.
BUSINESS
– 187 –


--- page 198 ---
China’s bilateral relation with Saudi Arabia is stable and continue to improve.
We plan to capitalize on strong diplomatic relations and close economic cooperation with
both Saudi Arabia. In December 2022, China and Saudi Arabia signed an Implementation Plan
to Align the BRI and Saudi Vision 2030 . The stable bilateral relationship provides a solid
foundation for deepening collaboration across energy, investment and infrastructure.
Saudi Arabia has unique advantages for aluminum smelting investments.
Our plan to expand aluminum smelting capacity in Saudi Arabia is primarily based on
three factors, as confirmed by CRU: (i) Saudi Arabia has substantial energy resources, with
proven natural gas reserves of nearly 10 trillion cubic meters as of the end of 2023. It is the
world’s fifth-largest holder of natural gas reserves. (ii) Saudi Arabia has a comprehensive
transportation network, including roads, railways and air routes, as well as well-established
industrial parks and port facilities. Its stable electricity supply and gas pipeline infrastructure
provide a strong foundation for industrial projects. (iii) Our aluminum smelting project is
located in Y anbu, near King Fahd Industrial Port and enjoys direct access to the Red Sea. This
prime port location facilitates the import of key raw materials such as alumina and enables
efficient transportation of aluminum products to Europe and the United States via the Suez
Canal. Therefore, we plan to establish approximately 500 kt of aluminum smelting capacity in
Saudi Arabia. We plan to commence the construction before the end of 2026, with an estimated
construction period of 18 to 24 months. We intend to develop production capacity in
strategically advantageous locations in Saudi Arabia, such as locations near docks and harbors.
We plan to employ local labor at competitive market rates for the operation of this project. This
project will be overseen by our professional team, which possesses extensive experience in
aluminum smelting and the electrolytic aluminum industry, ensuring safe production and
sustainable operations. Upon commencement of operations of the production sites in Saudi
Arabia, we anticipate an increase in our profit through share of results.
Optimize the Energy Structure and Raw Material Supply and Improve the Production
Techniques to Strengthen Our Costs Advantages.
We have consistently followed a strategy of minimizing costs at every stage of
production, establishing comprehensive and sustainable cost advantages within the industry. To
further strengthen these advantages, we have developed the following targeted strategies,
tailored to both domestic and overseas conditions.
We are constructing larger-scale wind and solar power plants in Huolinguole, Inner
Mongolia and other cities in close proximity. This includes wind power plants with an installed
capacity of 1,540.0 MW and a solar power plant with a capacity of 210.0 MW. With this
optimized energy structure, the comprehensive electricity costs for aluminum smelting is
expected to reduce by 20% by the end of 2026. To enhance our production techniques, we will
advance the use of new cathode materials to improve current efficiency and reduce energy
consumption. These improvements in process are expected to save approximately 435 kWh of
electricity per ton of aluminum, potentially generating annual savings of approximately
BUSINESS
– 188 –


--- page 199 ---
RMB130 million, assuming full production capacity based on current coal-fired electricity
costs. We also plan to further conserve power and enhance equipment efficiency and lifespan
by optimizing average voltage, refining electrolytic cell design and upgrading electrolytic cell
lining materials.
In addition to minimizing costs in our domestic production, we plan to extend the cost
advantages to our overseas operations. Saudi Arabia’s abundant energy resources can be
translated to relatively low electricity costs. We expect the Saudi Arabian aluminum smelter in
which we plan to invest in will benefit from cost advantages once operational, with production
costs below the global average. We aim to expedite our globalization efforts in Saudi Arabia
to further enhance our cost advantages.
Complete Our Capabilities across the Aluminum Industry Chain to Resist Risks and
Maintain Steadiness of Raw Material Supplies during Cyclical Fluctuations.
As of the Latest Practicable Date, we had an annual designed production capacity of 788.1
kt for electrolytic aluminum and 1,200.0 kt for alumina. In recent years, the demand for
aluminum has steadily increased, driven by its expanding applications in 3C electronics,
lightweight automotive, the green energy industry, transportation, industrial materials and
construction. Our alumina produced in-house is used as a critical raw material in our aluminum
smelting. This business model enables us to resist fluctuations during alumina market
downturns and capture opportunities during alumina market upswings. We aim to further
complete our capabilities across the electrolytic aluminum industry chain, with a strategic
focus on achieving a high rate of self-sufficiency in alumina that plays a critical role in the
electrolytic aluminum industry.
The capabilities in alumina refining are critical to our business development and the
completion of the integrated ecosystem across the electrolytic aluminum industry chain. A high
rate of alumina self-sufficiency guarantees a stable supply of raw materials, ensuring the
security of our production and operations. In addition, during periods of high alumina prices,
self-sufficiency of alumina helps mitigate the impact of rising raw material costs for aluminum
smelting. We intend to take advantage of favorable market conditions to expand sales and
increase profits. Conversely, when alumina prices are low, we plan to utilize our alumina
refining to meet the raw material needs of downstream electrolytic aluminum operations, thus
avoiding the pressure of selling alumina at low prices.
Overall, we will maintain a high level of self-sufficiency in alumina to further enhance
our competitiveness and flexibility.
BUSINESS
– 189 –


--- page 200 ---
Improve Environmental and Social Responsibility Performance to Maintain
Sustainability.
We attach significant importance to ESG, which is at the core of our business operations.
Our vision is to become a green aluminum industry group in the global market, committed to
promoting the green transition within the electrolytic aluminum industry by striving to reduce
carbon emissions in the electrolytic aluminum industry chain. To achieve this, we will continue
to prioritize environmental protection, social responsibility and the well-being of our
employees through the following initiatives:
Environmental protection . In addition to reducing the reliance on fossil fuels and
increasingly utilizing green energy for electricity generation mentioned above, we are
dedicated to driving the sustainable transformation of our aluminum smelting processes and the
transition of our energy structure through technological innovation and ongoing facility
upgrades. We have achieved substantial progress across multiple critical domains, with some
examples below:
In energy efficiency, we have successfully commissioned a low-carbon waste heat
recovery and utilization system for electrolytic flue gas. This system captures substantial
thermal energy from the flue gas generated during our core aluminum smelting process and
repurposes it into heat sources required for production and facility operations, thereby fully
replacing traditional steam consumption. This approach has enabled efficient, tiered energy
utilization, resulting in annual savings of approximately 53,100 tons of standard coal
equivalent. Additionally, we have implemented high-efficiency upgrades to our exhaust gas
purification fan systems, incorporating advanced aerodynamic modeling and variable-
frequency drive technology. These improvements have substantially enhanced fan
performance, increased equipment reliability, and significantly reduced operational electricity
consumption. These achievements will empower us to continuously elevate our green
operations. Regarding energy structure, we are integrating power source, grid, load and
storage, adopting advanced technologies for the modern power system. By using cutting-edge
grid-forming control technology, it ensures a more reliable power supply to our plant even
during extreme conditions. It also supports the greater use of renewable energy by reducing
wasted power, and serves as a practical example of how clean energy can be effectively used
and how energy-intensive industries like ours can transition to greener operations within the
evolving electricity framework.
Meanwhile, we are in the process of steadily improving our main aluminum production
processes. This includes applying a special nano-ceramic coating to the carbon anodes used in
smelting, which can greatly reduce carbon loss from oxidation. At the same time, we are
upgrading the inner linings of our 500 kA electrolytic cells and modernizing their control
systems. These improvements are aimed at consistently lowering the amount of electricity
needed to produce each ton of liquid aluminum. In addition, we are actively rolling out a
high-temperature anti-oxidation nano-ceramic coating technology for prebaked carbon anodes
in electrolytic aluminum production. This advanced coating physically shields the anode,
significantly reducing carbon block oxidation inside the electrolytic cell, thereby extending
anode lifespan and cutting carbon emissions. In addition, we will procure carbon anodes with
technical upgrades to external dimensions and slotting, which can effectively lower gross
carbon anode consumption per ton of aluminum produced.
BUSINESS
– 190 –


--- page 201 ---
Looking ahead, we plan to further reduce air emission intensity by 7.49% at the end of
December 31, 2028, with reductions of 2.46%, 2.41%, and 2.97% in 2026, 2027, and 2028,
respectively, through improving the operational efficiency of air emission purification systems.
Furthermore, through continually increasing the proportion of clean energy usage, identifying
and managing carbon emission sources in production processes, and applying appropriate
emission reduction technologies, we plan to reduce GHG emission intensity, including Scope
1 and Scope 2 by 11.36% at the end of December 31, 2028, with reductions of 6.39%, 5.36%,
and 1.20% in 2026, 2027, and 2028, respectively. In addition, we plan to further optimize the
energy management system, upgrade equipment and integrate existing energy utilization
scenarios to systematically reduce energy consumption. Comparing to May 31, 2025, we plan
to reduce our intensity of energy consumption by 1.69% at the end of December 31, 2028, with
reductions of 0.59%, 0.51%, and 0.68% in 2026, 2027, and 2028, respectively. Finally, through
further improving source utilization and process control, we plan to reduce intensity of water
consumption by 5.81% at the end of December 31, 2028, with reductions of 1.55%, 1.66%, and
2.48% in 2026, 2027, and 2028, respectively.
We believe that our achieved and ongoing technological innovations and facility
upgrades, will enable us to continuously strengthen our green operations. This will further
enhance our competitive advantages and leadership in sustainable practices, while positioning
us to capture the growing demand for green aluminum in both domestic and international
markets.
Social responsibility . We will remain deeply committed to public welfare, encouraging
our employees to proactively engage in volunteer activities and striving to remain a responsible
corporation. In addition, we aim to make meaningful contributions to the local community,
foster economic development and prioritize local recruitment. By integrating corporate social
responsibility across initiatives, we will continuously strengthen our brand image and social
impact.
Employee care . To enhance our commitment to employee well-being, we will strengthen
internal talent development by offering targeted training programs. These programs will focus
on improving employees’ skills in global business, green power aluminum technologies and
management practices, helping to build a high-quality talent pool that supports our long-term
strategic goals.
OUR BUSINESS MODEL
We are an industry-leading producer of electrolytic aluminum and alumina, focusing on
the upstream segment of the aluminum industry chain. According to CRU, our aluminum
smelter in Huolinguole, Inner Mongolia, was the fourth-largest production base of electrolytic
aluminum in terms of production output in 2024 in North China. We were the twelfth-largest
electrolytic aluminum producer in terms of production output in 2024 in China, according to
the same source.
BUSINESS
– 191 –


--- page 202 ---
We mainly produce and sell electrolytic aluminum as well as alumina and other related
types of products. We have built an integrated ecosystem across the electrolytic aluminum
industry chain, covering “energy — alumina refining — aluminum smelting.”
Alumina
Refining Green energy
Traditional
energy (coal)
Bauxite
Electricity
Smelting
Electrolytic
Aluminum
Our Integrated Ecosystem
Electrolytic Aluminum . Our aluminum smelter is located in Huolinguole, Inner Mongolia
with an annual designed production capacity of 788.1 kt. Our electrolytic aluminum products
include liquid aluminum and aluminum ingots. Aluminum ingots are solid blocks of aluminum
produced by casting liquid aluminum into standardized shapes. Our electrolytic aluminum
products are utilized by aluminum alloy processors and are processed into aluminum alloy
materials, which are widely applied in industries such as 3C electronics, lightweight
automotive, the green energy industry, transportation, industrial materials and construction.
Leveraging our robust production capabilities, we can produce aluminum products with high
purity which exceeds national standards. Benefiting from the overall growth in market demand
as well as our significant market presence, strategic location, stable supply of raw materials
and electricity, sufficient production capacity, initiatives in green transition and strategy of
globalization, our electrolytic aluminum products have cost advantages, thus enhancing our
overall profitability.
Alumina and Other Related Types of Products . We have an alumina refinery in Binzhou,
Shandong Province, with an annual designed production capacity of 1,200.0 kt. During the
Track Record Period, our alumina products were primarily used for our proprietary aluminum
smelting. Our alumina refinery is strategically located in Binzhou, Shandong Province, with
geographical advantages. The proximity of our alumina refinery to Huanghua Port and Binzhou
Port ensures a stable and sufficient supply of high-quality bauxite while allowing us to
effectively control transportation costs. Our ability to produce and calcine aluminum hydroxide
further enhances our capacity to ensure a stable supply of alumina.
Electricity . We have a proprietary coal-fired thermal power plant with six sets of
electricity generators, each with an installed capacity of 330.0 MW at our aluminum smelter
in Huolinguole, Inner Mongolia. We also have a proprietary coal-fired thermal power plant
with two sets of electricity generators, each with an installed capacity of 25.0 MW at our
alumina refinery in Binzhou, Shandong Province. In aggregate, our proprietary thermal power
BUSINESS
– 192 –


--- page 203 ---
plants have an annual designed capacity to generate a maximum electricity of 17,782,800
MWh. The proprietary coal-fired thermal power plant is able to realize 100% electricity
self-sufficiency for our aluminum smelting. We procure electricity, including green electricity,
from the grid to ensure a stable and reliable power supply that mitigate the potential
fluctuations in our self-generated electricity while increasing our green power usage. Our rate
of electricity self-sufficiency was approximately 88% in 2024, significantly higher than the
industry average of approximately 55% in the same period, according to CRU. Our rate of
electricity self-sufficiency was approximately 87% in the five months ended May 31, 2025.
Benefiting from the strategic location of our aluminum smelter in Inner Mongolia, we are
also proactively constructing green power plants to increase the proportion of green energy
usage in our production.
OUR PRODUCTS
We mainly provide electrolytic aluminum products as well as alumina and other related
types of products. Our electrolytic aluminum products primarily include liquid aluminum and
aluminum ingots. Aluminum is a silvery-white, ductile and corrosion-resistant metal with a
wide range of applications across various industries, such as 3C electronics, lightweight
automotive, green energy, transportation, industrial materials and construction. According to
CRU, China has the largest electrolytic aluminum market globally, with an industry size of
approximately USD125 billion in 2024, representing approximately 71% of global industry
size. Our liquid aluminum and aluminum ingots meet the National Standard GB/T 1196-2023
promulgated by the PRC government.
We also provide alumina, a white crystalline substance that serves as a key raw material
in the production of electrolytic aluminum. According to CRU, approximately 94% of alumina
is consumed in aluminum smelting. Our alumina refining achieved an output of approximately
706.2 kt, 1,546.1 kt, 1,539.9 kt, 665.3 kt and 664.5 kt in 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, respectively, with a rate of alumina self-sufficiency reaching
approximately 84% in 2024. Our alumina meets the national standards promulgated by the PRC
government, namely GB/T 24487-2009 and GB/T 24487-2022. We produce alumina in-house.
After meeting the internal demand for alumina in our aluminum smelting process, we sell
alumina externally as one of our major products. In line with market practice, we also procure
high-lithium salt alumina externally for our aluminum smelting to optimize electrolyte
composition, which improves electrolysis efficiency and extends the lifespan of our
electrolyzers. Compared to such high-lithium salt alumina, the alumina we produce contains
relatively low levels of lithium salt, which is comparable with most alumina commodity in the
market, according to CRU.
BUSINESS
– 193 –


--- page 204 ---
The following table sets forth our revenue breakdown by product for the periods
indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Electrolytic aluminum /H1118/H1118/H111812,881.9 95.5 12,502.3 90.5 12,883.7 85.0 5,276.0 89.7 5,523.2 76.6
– Liquid aluminum /H1118/H1118/H1118/H1118363.2 2.7 10,841.4 78.5 11,579.7 76.4 5,276.0 89.7 4,305.5 59.7
– Aluminum ingots /H1118/H1118/H1118/H111812,518.7 92.8 1,660.9 12.0 1,304.0 8.6 – – 1,217.7 16.9
Alumina and other related
types of products /H1118/H1118/H1118/H1118270.6 2.0 977.4 7.1 1,849.5 12.2 449.5 7.6 1,523.7 21.1
– Alumina /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868.1 0.5 626.6 4.6 1,647.8 10.9 408.4 6.9 1,338.6 18.6
– Other related types of
products (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118202.5 1.5 350.8 2.5 201.7 1.3 41.1 0.7 185.1 2.6
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118337.2 2.5 335.0 2.4 430.0 2.8 157.7 2.7 166.6 2.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,489.7 100.0 13,814.7 100.0 15,163.2 100.0 5,883.2 100.0 7,213.5 100.0
Notes:
(1) Mainly include aluminum hydroxide.
(2) Mainly include scrap and other materials, electricity and steam supply.
Our revenue from aluminum ingots increased significantly from nil in the five months
ended May 31, 2024 to RMB1,217.7 million in the same period of 2025, primarily due to (i)
our increase in sales of aluminum ingots to independent third parties. Such customers were
primarily existing customers; and (ii) our decrease in sales of liquid aluminum to related
parties to reduce the proportion of connected transactions. Our revenue from alumina increased
significantly from RMB408.4 million in the five months ended May 31, 2024 to RMB1,338.6
million in the same period of 2025, primarily due to our increase in sales of alumina to
independent third parties as we increased our procurement of high-lithium salt alumina
externally for our aluminum smelting to optimize electrolyte composition, which improves
electrolysis efficiency and extends the lifespan of our electrolyzers.
We generate electricity at our power plants for electrolytic aluminum production. We sell
surplus self-generated electricity after meeting the internal demand for electricity, while also
procuring electricity, primarily green electricity, from the grid, to ensure a stable and reliable
power supply that mitigates the potential fluctuations in our self-generated electricity while
increasing our green power usage. In addition, the electricity generated by our Binzhou thermal
power plant is not recorded as electricity generated by our proprietary power plant but as
electricity procured from suppliers. This is mainly because our Binzhou thermal power plant
is connected to the grid and, in accordance with applicable PRC laws and regulations, our
BUSINESS
– 194 –


--- page 205 ---
power plant connected to the grid is required to first sell the generated electricity to the grid
before we can subsequently source electricity from the grid for our production needs. See
“Business — Electricity Supply — Our Thermal Power Supply.” The prices at which we sell
our surplus self-generated electricity is primarily benchmarked to the local market prices,
which can be adjusted by the local government authorities.
Steam is produced as a by-product at our power plants during electricity generation and
we also use steam in our production. We sell surplus self-generated steam after meeting the
internal demand for steam, while also procuring a small amount of steam from third parties
during the examination periods of our power plants when steam generation is halted to ensure
continuous production. We determine the pricing at which we sell our surplus self-generated
steam primarily by taking into consideration the cost of sales.
We have obtained the necessary license for selling electricity. See “— Licenses, Permits
and Approvals.” As advised by our PRC Legal Advisor, no license or permit is required for our
sales of steam.
BUSINESS
– 195 –


--- page 206 ---
The following table sets forth the revenue, sales volume and ASP of our major products for the periods indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1)
(kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton)
Electrolytic Aluminum /H1118/H1118/H1118/H1118/H1118/H1118733.1 12,881.9 17,572.3 773.0 12,502.3 16,173.9 752.6 12,883.7 17,119.9 315.4 5,276.0 16,725.6 312.1 5,523.2 17,697.7
– Liquid aluminum /H1118/H1118/H1118/H1118/H1118/H1118/H111819.0 (4) 363.2 (4) 19,110.5 671.3 10,841.4 16,148.8 679.0 11,579.7 17,053.6 315.4 5,276.0 16,725.6 243.6 (3) 4,305.5 17,675.3
– Aluminum ingots /H1118/H1118/H1118/H1118/H1118/H1118/H1118714.1 12,518.7 17,530.1 101.7 1,660.9 16,331.4 73.6 1,304.0 17,717.4 – – – 68.5 1,217.7 17,777.5
Alumina (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118706.3 1,774.9 2,513.0 1,563.7 3,792.9 2,425.6 1,539.6 5,407.8 3,512.5 663.9 1,946.6 2,932.1 660.2 1,939.8 2,938.2
– Sales to independent third parties 27.0 68.1 2,522.2 295.4 626.6 2,121.2 444.5 1,647.8 3,707.1 135.9 408.4 3,005.2 460.7 1,338.6 2,905.6
– Intragroup sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118679.3 1,706.8 2,512.7 1,268.3 3,166.3 2,496.5 1,095.1 3,760.0 3,433.6 528.0 1,538.2 2,913.0 199.5 601.2 3,013.2
Notes:
(1) The ASP is calculated by dividing the revenue (excluding value-added tax) by volume in the indicated period.
(2) Including the volume and revenue for intra-Group sales of alumina. In 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, the volume of a lumina we
sold intra-Group amounted to 679.3 kt, 1,268.3 kt, 1,095.1 kt, 528.0 kt and 199.5 kt, respectively, generating revenue of RMB1,706.8 million, RMB3,1 66.3 million,
RMB3,760.0 million, RMB1,538.2 million and RMB601.2 million, respectively.
(3) The volume of our liquid aluminum sold decreased from 315.4 kt in the five months ended May 31, 2024 to 243.6 kt in the same period in 2025, primarily be cause we
proactively increased the production and sales volume of aluminum ingots to independent third parties to further broaden our customer base, therefo re leading to decreased
sales volume of liquid aluminum.
(4) The volume of liquid aluminum in 2022 was low compared to that in the subsequent years/periods, primarily because we sold liquid aluminum in 2022 as an additional
revenue stream and our main business focus was producing and selling aluminum ingots back in 2022. We have been providing a stable supply of liquid alum inum to
Innovation New Material since its commencement of operation in Inner Mongolia in early 2023. See “Relationship With Our Controlling Shareholders — I ndependence
From Our Controlling Shareholders — Operational Independence.”
BUSINESS
– 196 –


--- page 207 ---
Product Prices during the Track Record Period
We mainly determine the price of our electrolytic aluminum products with reference to
the average price of electrolytic aluminum quoted on the website of Shanghai Metals Market,
which, as confirmed by CRU, indicates the market-assessed price of electrolytic aluminum
traded in China and is the market price indicator typically used by market players in China. See
“— Sales, Marketing and Customer Service — Pricing and Payment” and “Industry Overview
— Electrolytic Aluminum Analysis (Global and China) — Electrolytic Aluminum Price
Analysis.”
During the Track Record Period, the ASP of our products fluctuated in line with the
fluctuations in relevant market prices. Both the global market price of electrolytic aluminum
and the market price of electrolytic aluminum in China decreased in 2023 from 2022, mainly
due to the disruption arising from the Russia-Ukraine war, with Europe experiencing
significant economic headwinds and China experiencing an economic slowdown. The market
prices subsequently increased in 2024 as the global electrolytic aluminum market showed a
deficit of 35 kt, and remained relatively stable in early 2025. Both the global market price of
alumina and the market price of alumina in China remained relatively stable in 2022 and 2023,
and subsequently surged in 2024 due to a global supply deficit mainly attributable to (i) several
alumina production disruption incidents as several refineries in Australia, India and Brazil
faced bauxite and energy supply constraints; (ii) temporary disruption to Guinea bauxite
shipments; and (iii) China’s persistent high demand for alumina. The market prices slightly
decreased in early 2025 due to a shift in market balance from a deficit in 2024 to a surplus in
2025 mainly attributable to (i) the fact that most of the aforementioned disruptions seen in 2024
have been gradually resolved towards the end of 2025 and in early 2025; and (ii) new refinery
capacity is expected to come online in 2025 and 2026. See “Industry Overview — Electrolytic
Aluminum Analysis (Global and China) — Electrolytic Aluminum Price Analysis” and
“Industry Overview — Alumina Analysis (Global and China) — Alumina Price Analysis” for
detailed analyses on the price changes of electrolytic aluminum and alumina. Similar to the
market prices, the ASP of our electrolytic aluminum decreased in 2023 from 2022,
subsequently increased in 2024 and remained relatively stable in early 2025. The ASP of our
alumina remained relatively stable in 2022 and 2023, subsequently surged in 2024 and slightly
decreased in early 2025.
During the Track Record Period, the ASP of our electrolytic aluminum products appeared
to be slightly lower than the SHFE spot price. See “Industry Overview — Electrolytic
Aluminum Analysis (Global and China) — Electrolytic Aluminum Price Analysis” for details.
This discrepancy arises primarily because (i) our ASP excludes the 13% value-added tax, which
is included in the SHFE spot price; and (ii) the SHFE spot price reflects solely aluminum ingot
prices, whereas our ASP takes into consideration both aluminum ingots and liquid aluminum
sold to customers. We mainly determine the price of electrolytic aluminum products with
reference to the average price of electrolytic aluminum quoted on the website of Shanghai
Metals Market as discussed above, and make adjustments taking into account the reasonable
costs, such as the processing cost and transportation costs. Our liquid aluminum is typically
priced lower than our aluminum ingot products due to the comparatively lower processing and
BUSINESS
– 197 –


--- page 208 ---
transportation costs associated with selling liquid aluminum. According to CRU, the price of
liquid aluminum is usually lower than aluminum ingots, primarily because liquid aluminum is
directly released from the aluminum smelter without the need for further casting and cooling.
In addition, its transportation range is limited due to requirements for high temperature during
transportation. In contrast, aluminum ingots undergo processes such as cooling in molds at the
production sites and offer greater market liquidity, justifying a higher price.
The ASP of our liquid aluminum products is higher than that of our aluminum ingot
products in 2022. This is because we only sold a relatively small amount of liquid aluminum
products in 2022, the majority of which were sold in the first quarter in 2022, whereas we sold
a relatively large amount of aluminum ingot products in 2022 in multiple quarters throughout
the year. In 2022, the market prices of electrolytic aluminum generally decreased throughout
the year, as confirmed by CRU, resulting in the ASP of our liquid aluminum products higher
than that of our aluminum ingot products. Similarly, the ASP of our alumina products sold to
independent third parties varied from the ASP of those sold intragroup in 2022, 2023 and 2024.
This variance was primarily because we only sold a small amount of alumina products to
independent third parties at limited times of 2022, 2023 and 2024. The market prices for
alumina fluctuated within 2022 and 2023 and surged in 2024, resulting in the ASP of our
alumina products sold to independent third parties differing from those sold intragroup.
During the Track Record Period, the ASP of our alumina products appeared to be slightly
lower than the average market price of alumina, namely CRU China alumina price, in China.
See “Industry Overview — Alumina Analysis (Global and China) — Alumina Price Analysis.”
This discrepancy is primarily because (i) our ASP excludes the 13% value-added tax, which is
included in the market average; and (ii) CRU China alumina price averages alumina prices in
multiple regions, including Henan, Shanxi, Guangxi, Guizhou and Shandong Provinces.
According to CRU, the market prices in each province, including Shandong Province where we
primarily sold our alumina products is slightly lower than the average prices in other provinces
tracked by CRU, due to regional differences in production costs, transportation expenses as
well as supply and demand dynamics. Market prices in Shandong Province are generally
slightly lower than those in other provinces monitored by CRU China alumina price. This is
mainly because Shandong Province is a key region for alumina production in China, resulting
in a relatively more stable supply, lower transportation expenses due to proximity to alumina
refineries, and lower production costs due to economies of scale.
Electrolytic Aluminum
We produce electrolytic aluminum products at our aluminum smelter in Huolinguole,
Inner Mongolia. See “— Our Production — Our Production Process — Electrolytic Aluminum
Products” for details of production capacity and production process. According to CRU, our
aluminum smelter in Huolinguole, Inner Mongolia, was the fourth-largest production base of
electrolytic aluminum in terms of production output in 2024 in North China. We were the
twelfth-largest electrolytic aluminum producer in terms of production output in 2024 in China,
according to the same source. Leveraging our robust production capabilities, we produce
aluminum products with different purities, such as 99.70% aluminum, 99.80% aluminum and
BUSINESS
– 198 –


--- page 209 ---
99.85% aluminum. Our Huolinguole aluminum smelter achieved an electrolytic aluminum
output of approximately 744.1 kt, 757.9 kt, 755.4 kt, 315.6 kt and 310.7 kt in 2022, 2023, 2024
and the five months ended May 31, 2024 and 2025, respectively. Our revenue generated from
electrolytic aluminum products amounted to RMB12,881.9 million, RMB12,502.3 million,
RMB12,883.7 million, RMB5,276.0 million and RMB5,523.2 million in 2022, 2023, 2024 and
the five months ended May 31, 2024 and 2025, representing 95.5%, 90.5%, 85.0%, 89.7% and
76.6% of our total revenue in the same respective periods.
Our products primarily include electrolytic aluminum, which is sold in the form of liquid
aluminum in molten state and aluminum ingots in solid state. They serve as a primary raw
material for manufacturing various aluminum products and alloys. Liquid aluminum was our
major electrolytic aluminum product during the Track Record Period. Liquid aluminum is
aluminum in its liquid state, produced through the electrolysis of alumina. Liquid aluminum is
convenient for processing, as customers do not need to remelt the aluminum before processing,
making it ideal for casting and alloy production. Liquid aluminum is generally sold to
customers close to the smelter, primarily because it must be stored in specially designed
containers to maintain a temperature of 750°C to 900°C during transportation, using a specially
adapted aluminum-tapping vehicle to ensure safe and efficient transportation of the liquid
aluminum. As such, a short-distance transportation saves the transportation costs, reduces the
loss of liquid aluminum during transportation and reduces the need for customers to remelt the
aluminum ingots for further processing. We sold liquid aluminum mainly to downstream
non-ferrous metal processing and manufacturing enterprises near our aluminum smelter in
Huolinguole, Inner Mongolia, such as Innovation New Material.
We also sell aluminum ingots, which are solid blocks of aluminum, by casting liquid
aluminum into standardized shapes. Aluminum ingots offer several distinct advantages,
primarily due to their solid form, including ease of transport, storage and handling. Their
standardized form makes them ideal for efficient processing in downstream industries. We
mainly sold aluminum ingots to domestic third-party downstream aluminum alloy
manufacturers and trading companies.
The following pictures illustrate the appearance of our electrolytic aluminum product:
BUSINESS
– 199 –


--- page 210 ---
Alumina and Other Related Types of Products
Alumina, also known as aluminum oxide, is a white crystalline substance derived from
refining bauxite ore. Alumina is an essential raw material for electrolytic aluminum. Our
alumina products show significant advantages over the GB/T 24487-2022 standards. Our
alumina has a higher aluminum oxide content than the national standard, leading to higher
product purity. The levels of impurities in our alumina are lower than the national standards,
which effectively reduces the amount of electrolyte required, stabilizes the electrolysis process
and improves quality for downstream electrolytic aluminum. In addition, our alumina has a
better specific surface area and fineness than the national standard, which enhances the
dissolution rate, stabilizes the electrolyte, reduces energy consumption and results in higher
purity electrolytic aluminum. These advantages result from high-quality raw materials, a
reliable supply chain, advanced refining technology and rigorous quality control, all of which
ensure the quality and competitiveness of our alumina products. The alumina we produced is
mainly for our own production of our electrolytic aluminum products, ensuring the high-
quality, stable and prompt supply of key raw material. Our alumina refinery achieved an
alumina output of approximately 706.2 kt, 1,546.1 kt, 1,539.9 kt, 665.3 kt and 664.5 kt in 2022,
2023, 2024 and the five months ended May 31, 2024 and 2025, respectively, with a rate of
alumina self-sufficiency reaching approximately 84% in 2024. We sold alumina to Independent
Third Parties during the Track Record Period. Our revenue generated from alumina and other
related types of products amounted to RMB270.6 million, RMB977.4 million, RMB1,849.5
million, RMB449.5 million and RMB1,523.7 million in 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, representing 2.0%, 7.1%, 12.2%, 7.6% and 21.1% of our total
revenue in the same respective periods.
The following graphic illustrates the appearance of our alumina products:
In addition to alumina, we also produced aluminum hydroxide during the Track Record
Period. Aluminum hydroxide is often produced as an intermediate in the Bayer process and can
be calcined to produce alumina. During the Track Record Period, our aluminum hydroxide
produced was primarily calcined to produce alumina in-house and was also separately sold to
customers.
BUSINESS
– 200 –


--- page 211 ---
OUR PRODUCTION
Our advanced production capabilities, substantial output and sustainable production
practices position us to effectively meet the large-scale demand for our products from
downstream customers. According to CRU, our aluminum smelter in Huolinguole, Inner
Mongolia, was the fourth-largest production base of electrolytic aluminum in terms of
production output in 2024 in North China. We were the twelfth-largest electrolytic aluminum
producer in terms of production output in 2024 in China, according to the same source.
Our Production Capabilities
Our aluminum smelter is located in Huolinguole, Inner Mongolia, and our alumina
refinery is located in Binzhou, Shandong Province. We strategically locate our production
plants to benefit from geographical advantages. According to CRU, the industry average
electrolytic aluminum production per capita in China was between approximately 260 tons and
280 tons. During the Track Record Period, our electrolytic aluminum production per capita was
between approximately 590 tons and 670 tons, being approximately 2.2 to 2.6 times that of the
industry average during the same periods, respectively.
As of the Latest Practicable Date, we had obtained regulatory approvals for (i) production
quota of 788.1 kt per year of electrolytic aluminum, for which the associated production line
had been built and was in use, (ii) production capacity of 1,200 kt per year of alumina, for
which the associated production line had been built and was in use; (iii) production capacity
of 2,980 kt per year of aluminum hydroxide, for which the associated production lines for
1,480 kt had been built and were in use and the other 1,500 kt had commenced pilot production
in December 2024, which had increased into full operations in April 2025, (iv) production
capacity of 2,000 kt per year of alumina calcined from aluminum hydroxide, for which the
associated production line had been constructed as of the date of this prospectus and will begin
pilot production in November 2025, and (v) production capacity of 4,000 kt per year of alumina
calcined from aluminum hydroxide, for which we had no plan to construct the associated
production line as of the same date. Aluminum hydroxide is often produced as an intermediate
in the Bayer process and can be calcined to produce alumina. During the Track Record Period,
our aluminum hydroxide produced was primarily calcined to produce alumina in-house and
was also separately sold to external customers. Our projected total annual production capacity
of alumina, assuming (a) all of the above capacities from (ii) to (iv) are fully operational, and
(b) we calcine aluminum hydroxide to produce alumina as planned, will be at least 3,000 kt.
We obtain production quota for electrolytic aluminum primarily through capacity
replacement. According to relevant PRC laws and regulations, capacity replacement for
electrolytic aluminum shall be strictly implemented. For details of capacity replacement, see
“Regulatory Overview — PRC Laws, Regulations and Policy Documents Related to the
Electrolytic Aluminum and Alumina Industries — Capacity Replacement.” The trading of
production quota indicators is primarily conducted through arm’s length negotiations, with the
consideration primarily determined by market prices. Counterparties involved in the trading of
production quota indicators typically include existing and new producers of electrolytic
BUSINESS
– 201 –


--- page 212 ---
aluminum. As confirmed by our PRC Legal Advisor, we are not required to obtain any licenses
or permits for trading the production quota for electrolytic aluminum. After we sign the
purchase or sales agreement with the seller or buyer of the production quota, we file the
relevant documents for the transfer of such production quota with relevant government
authorities, and subsequently publicly announce the transfer on government-designated
websites. In 2022, we sold the surplus electrolytic aluminum production quota of 47.0 kt that
exceeded the designed capacity of our aluminum smelter to an electrolytic aluminum producer,
an Independent Third Party, as an additional revenue source, at a consideration of RMB354.7
million and deriving a gain (consideration less carrying amount) of RMB180.7 million. See
“Financial Information — Period-to-period Comparison of Results of Operations — Y ear
ended December 31, 2023 Compared with Y ear ended December 31, 2022 — Other Gains.”
During the Track Record Period, we did not complete any purchase production quota for
electrolytic aluminum.
We have in place internal policies for the management of intangible assets, including the
management of the capacity replacement. According to our internal policies, the purchase,
recognition, measurement and sales of electrolytic aluminum production quota must comply
with relevant laws and regulations. The responsible operational department is tasked with
proposing trading plans, implementing the plans and maintaining relevant records. Our legal
department reviews and approves relevant legal documents; our finance department handles
accounting, participates in acceptance of the relevant intangible assets and conducts regular
audits; and our audit department supervises the compliance in the trading of electrolytic
aluminum production quota. We take a strategic approach to acquiring and selling production
quotas, taking into consideration market demand and our production capacity. We ensure that
each transaction aligns with our long-term business objectives.
Huolinguole Aluminum Smelter
Huolinguole, located in Inner Mongolia, possesses significant geographical advantages,
making it a leading region for aluminum smelting in China. It benefits from abundant
conventional and green energy resources, available at low costs, that enable stable energy
supply for aluminum smelting. Inner Mongolia holds more than 40 bt of coal reserves,
representing approximately 20% of China’s total coal reserves, according to CRU. The ample
coal resource ensures a sufficient electricity supply while significantly reducing coal
procurement and transportation costs. Furthermore, it is close to North and East China, where
a large number of downstream aluminum product manufacturers are located. As a result, Inner
Mongolia offers a smaller transport radius for supplying electrolytic aluminum to downstream
aluminum product manufacturers located in these areas. Inner Mongolia’s strategic location has
contributed to a substantial increase in its electrolytic aluminum production, growing from 4.5
mt in 2018 to 6.6 mt in 2024, at a GAGR of 7.0%, according to CRU. In addition, Inner
Mongolia ranks first and second in terms of the annual utilization hours of wind and solar
power among all provinces in China, further enabling the green, stable, cost-effective provision
of power for electricity supply, according to CRU. See “— Electricity Supply — Our Green
Power Supply.”
BUSINESS
– 202 –


--- page 213 ---
Our aluminum smelter commenced operation in December 2017. Our Huolinguole
aluminum smelter is equipped with advanced electrolyzers, holding furnaces and casting
machines. Our aluminum smelter operates with an efficient and cost-effective organizational
structure. It comprises a safety production department and eight workshops. It operates under
a three-tier management system that involves a factory director, workshop heads and team
members. Benefiting from this organizational structure, our facility has high production
efficiency and reduced production costs, thereby establishing a competitive advantage.
Our aluminum smelter adopts a four-team, three-shift production system, which includes
morning, afternoon and night shifts, each lasting approximately eight hours, so as to ensure
24/7 operations without interruption. Employees are divided into four teams and rotate through
these shifts. Employees are required to rotate through different shifts to adapt to varying work
schedules. This production system maximizes our production efficiency through continuous
operation, optimizes the allocation of human resources, and enhances employee well-being and
job enthusiasm through regular breaks and a dynamic work schedule.
Binzhou Alumina Refinery
Our alumina refinery is strategically located in Binzhou, Shandong Province. Shandong
is renowned for having the largest alumina production output in China and Binzhou is the
largest import city for bauxite, which is a major raw material for alumina refining, according
to CRU. Our alumina refinery is only 40 km from Huanghua Port, the second largest bauxite
logistics transshipment port in the north port cluster, and 70 km from Binzhou Port, which
facilitates direct land transportation of bauxite from Y antai Port. This proximity to major ports
ensures a stable and sufficient bauxite supply while enabling effective control over
transportation costs.
Our alumina refinery commenced production in February 2019. We adopt a
comprehensive production management system at our alumina refinery, dedicated to the
standardization of alumina production. To this end, we have established stringent standards for
the alumina refining process, production techniques and safety management, to which our
production personnel is required to adhere. The main production equipment at our alumina
refinery includes bauxite grinders, vertical filters, calcination furnaces, evaporation plants,
precipitation washers, calcination furnaces and decontamination system. Our proprietary
decontamination system leverages the varying solubilities of substances at different
temperatures to eliminate impurities. This system extracts certain liquor from the main system
and removes the impurities by cyclic heat exchange, induced crystallization and solid-liquid
separation. Our decontamination system operates independently from the main system, which
reduces the impurities without disturbing the operation of the main system. Compared to the
ordinary decontamination process using evaporation systems, our system is more sustainable
and cost-effective, requiring fewer human resources while achieving higher energy efficiency.
We emphasize the management of production equipment, regular maintenance and timely
upgrades. In order to further enhance the stability of the alumina refining process and the
quality of our alumina products, we have implemented an emergency response system and a
rigorous quality control framework.
BUSINESS
– 203 –


--- page 214 ---
To further add value to our self-sufficient, complementary, synergistic and integrated
ecosystem across the industry chain, we started to construct an aluminum hydroxide production
facility at our alumina refinery with an annual designed production capacity of 1,500 kt, which
commenced pilot production in December 2024 and had turned into full operations in April
2025. We expect to utilize this production facility to produce aluminum hydroxide which can
be further calcined and transformed into alumina products. We had also started to construct an
aluminum hydroxide calcination production line with a production capacity of 2,000 kt per
year of alumina calcined from aluminum hydroxide in February 2025. As of the date of this
prospectus, this production line has been constructed and will begin pilot production in
November, 2025.
Capitalizing on our production management system and advanced production equipment,
the average annual capacity utilization rate of our aluminum smelting was more than 94% and
the average annual capacity utilization rate of our alumina refining was more than 88% for each
period during the Track Record Period.
BUSINESS
– 204 –


--- page 215 ---
The following table sets forth the details of our production capacity and the relevant metrics of our major products for the periods indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Designed
production
capacity (1)
Actual
production
volume
Capacity
utilization
rate (2)
Regulatory
approvals
for annual
production
quota and
capacity (4)
Designed
production
capacity (1)
Actual
production
volume
Capacity
utilization
rate (2)
Regulatory
approvals
for annual
production
quota and
capacity (3)
Designed
production
capacity (1)
Actual
production
volume
Capacity
utilization
rate (2)
Regulatory
approvals
for annual
production
quota and
capacity (3)
Designed
production
capacity
Actual
production
volume
Capacity
utilization
rate (2)
Regulatory
approvals
for annual
production
quota and
capacity (3)
Designed
production
capacity
Actual
production
volume
Capacity
utilization
rate (2)
Regulatory
approvals
for annual
production
quota and
capacity (3)
(kt) (kt) (%) (kt) (kt) (kt) (%) (kt) (kt) (kt) (%) (kt) (kt) (kt) (%) (kt) (kt) (kt) (%) (kt)
Aluminum smelting /H1118/H1118/H1118/H1118 788.1 744.1 94.4 788.1 788.1 757.9 96.2 788.1 788.1 755.4 95.6 788.1 326.0 315.6 96.8 788.1 326.0 310.7 95.3 788.1
Alumina refining /H1118/H1118/H1118/H1118/H1118800.0 706.2 88.3 800.0 1,200.0 1,546.1 128.8 1,200.0 1,200.0 1,539.9 128.3 7,200.0 518.7 665.3 128.3 1,200.0 515.3 664.5 129.0 7,200.0
Notes:
(1) The designed capacity for the aluminum smelter is the pre-designed production output that may be achieved under normal production conditions and product specifications
specified in the design documents and technical documents. It is calculated based on the assumption that each factory’s main product is produced 24 ho urs a day, 365
days a year and for 151 days for the five months ended May 31, 2024 and 2025. For the alumina refinery, this is calculated based on the assumption that each factory’s
main product is produced 24 hours a day, 347 days a year and for 149 days for the five months ended May 31, 2024 and 2025, deducting the days for the annual
examination of alumina refining equipment, during which production temporarily halts. The annualized designed production volume in the five month s ended May 31,
2025 (namely, the annual designed production capacity in 2025) remained at 788.1 kt and 1,200 kt for aluminum smelting and alumina refining, respecti vely.
(2) The capacity utilization rate is calculated by dividing the actual production volume for the period indicated by the annualized designed product ion capacity for the period
indicated.
(3) Regulatory approval for annual electrolytic aluminum production quota refers to the approved annual cap in production volume for electrolytic a luminum, including liquid
aluminum and aluminum ingots. Regulatory approval for annual alumina production capacity refers to the approved annual cap in production volume for refining alumina.
BUSINESS
– 205 –


--- page 216 ---
The designed capacity for both electrolytic aluminum and alumina is identical with the
regulatory approval for annual production quota and capacity in each period, except for those
for alumina in 2024 and the five months ended May 31, 2025, because (i) the initial design of
the production sites and production lines factored in policy requirements; and (ii) for any
surplus approved production quota that exceeds our designed production quota, we actively
engage in the trading thereof for additional capital. See “Financial Information — Period-to-
period Comparison of Results of Operations — Y ear ended December 31, 2023 Compared with
Y ear ended December 31, 2022 — Other Gains.”
The designed capacity for the aluminum smelter is the pre-designed production output
that may be achieved under normal production conditions and product specifications contained
in the design documents and technical documents. The actual production volume of alumina in
2023 and 2024 exceeded the designed production capacity in the respective periods, primarily
because our alumina refining efficiency improved as we renovated and upgraded the
production equipment and improved our operational efficiency through more refined
management. Specifically, we improved certain operational procedures, equipment and
workflow within the production process, thereby optimizing the processes of material
handling, impurity removal and electrolysis, among other things. We did not obtain regulatory
approval for additional production capacity before exceeding the relevant capacity in 2023.
According to PRC laws and regulations, an increase in production capacity of 30.0% or more
is considered a significant change in the constructed project, which necessitates the submission
of a change application to the original regulatory authorities to obtain re-approval. Companies
who commence construction without re-approval may face penalties such as being ordered to
suspend production and fines. As advised by our PRC Legal Advisor, according to PRC laws
and regulations as well as the written confirmations from the relevant competent regulatory
authorities we obtained during the period from October 2024 to January 2025, including Wudi
Development and Reform Commission (҅), Wudi Sub-branch of Binzhou
Municipal Ecological and Environment Bureau ( Ᏽψ̹͛࿒ᐑྤ҅ೌ಑ʱ҅) and Wudi
Emergency Management Bureau (၍ଣ҅), our increase in actual production
capacity in 2023 and 2024 did not exceed 30.0% in the respective periods, which does not
constitute a significant change; furthermore, since it does not constitute non-compliance, no
relevant administrative penalties can be imposed on our Group.
To more effectively control and manage our production capacity utilization, we
continuously monitor our capacity utilization rate and timely obtain regulatory approval for
additional production capacity in anticipation of potential increases in the demand for our
alumina products. In 2024, we secured the regulatory approval for a total of 6,000 kt per year
production capacity of alumina calcined from aluminum hydroxide, among which (i) we started
the construction of the relevant production line with 2,000 kt of designed production capacity
in February 2025 and were in the process of construction as of the Latest Practicable Date, and
(ii) we had no plan for the construction of the remaining 4,000 kt approved production capacity
as of the same date. This 6,000 kt regulatory approval serves to expand our current production
capabilities and control the utilization rate, and also serves as a strategic reserve for our future
alumina production. This strategic reserve is expected to provide us with a competitive edge
by allowing for increased output in response to market demand spikes, without any delay
BUSINESS
– 206 –


--- page 217 ---
caused by waiting for new approvals. Furthermore, it supports our long-term planning and
stability, giving us the flexibility to expand production in a compliant manner. We expect to
complete the construction of the relevant production line with 2,000 kt of designed production
capacity in the fourth quarter of 2025. We expect to commence the pilot production at this
production line by the end of 2025. In view of our expected increase in alumina production
capacity, we plan to further expand the sales of alumina to downstream customers centered
around our alumina refinery in Binzhou, Shandong Province, rather than purchasing additional
electrolytic aluminum quota and consuming the increased alumina output at our aluminum
smelter.
As confirmed by our PRC Legal Advisor, the approval procedures of production capacity
for alumina and alumina calcined aluminum hydroxide are essentially the same. In terms of
production process, the former allows for the holder of such approval to produce alumina
through the Bayer process all the way from bauxite, while the latter allows for the production
capacity of producing alumina from aluminum hydroxide, an intermediate in the Bayer process.
See “— Our Production — Our Production Process — Alumina Products” for details.
Our Production Process
We produce alumina by refining bauxite through the Bayer process. The produced
alumina undergoes the Hall-Héroult process, where it is electrolyzed in molten cryolite to
produce electrolytic aluminum.
Electrolytic Aluminum Products
As of May 31, 2025, we possess a total of 576 electrolyzers. Each unit consists of a series
of equipment and processes that complete the entire power supply cycle from electricity input
to output, and liquid aluminum is produced through these units. The main production
equipment at our aluminum smelter includes electrolyzers, power supply units, holding
furnaces and casting machines. Our production units feature advanced design and mature
process technology for aluminum electrolyzer.
We produce electrolytic aluminum through the Hall-Héroult Process, a widely adopted
method in the aluminum industry, according to CRU. In this process, alumina and carbon
anodes undergo smelting through electrolytic reduction. Cryolite, a fluoride-based compound,
acts as the solvent, lowering the melting point of alumina, which forms the molten mass. A
strong direct current is passed into the electrolyzer, facilitating an electrochemical reaction at
the cathode and anode. This reaction results in the separation of aluminum from its oxide,
producing liquid aluminum and releasing carbon dioxide as a by-product. The liquid aluminum
is then collected from the bottom of the electrolytic cell for further processing and refinement.
This method is efficient and crucial for large-scale aluminum production.
BUSINESS
– 207 –


--- page 218 ---
The following flowchart illustrates our aluminum smelting process:
Electrolyzer
Ingots Liquid aluminum
Carbon anode Alumina Fluoride salt
Alumina
Fluoride salt
Electrolyzer
Carbon anode
Al
Ingots
Electrolytic aluminum
Aluminum alloy products
Liquid
aluminum
Electrolytic
aluminum
Raw Materials Supply: Alumina, carbon anodes, fluoride salts and direct current are
supplied to the electrolyzers. Alumina is the primary raw material of electrolytic aluminum.
Carbon anodes serve as the electrodes. Fluoride salts are used to lower the melting point of
alumina and improve the electrical conductivity. Direct current is supplied to drive the
electrochemical reactions.
Electrochemical Reactions: These raw materials undergo continuous electrochemical
reactions to produce liquid aluminum. Residual carbon anodes and flue gas are produced as
by-products.
Semi-products and By-products Treatment: The residual anodes are pressed, stripped and
crushed. The liquid aluminum is extracted from the electrolytic cell and transferred to a
holding furnace for purification.
Finished Products Formation and By-product Recycling: The fluorine-enriched alumina
is recycled to the electrolyzers. The residual carbon anodes are sold for recycling. The liquid
aluminum is directly delivered to downstream customers or cast into aluminum ingots for
storage and transportation.
BUSINESS
– 208 –


--- page 219 ---
Alumina Products
We produce alumina products through the Bayer Process, a widely adopted method for
refining bauxite to produce alumina. The following flowchart illustrates the alumina refining
process:
Preparation of slurry
Dissolution of slurry
Separation and filtration of red mud
Decomposition of seed crystals
Alumina
Bauxite Grounding Slurry dissolver
Alumina
Calcining aluminum hydroxide at 1,050°C
Separation and
filtration of red mud
Residue
stockpiling
Calcining aluminum
hydroxide at 1,050°C
Decomposition of
Seed Crystals
Bauxite Slurry Preparation : The bauxite is ground into fine bauxite slurry to increase the
surface area for the subsequent chemical reactions.
Bauxite Slurry Dissolution : The bauxite slurry is mixed with heated caustic soda solution,
dissolving the alumina content in the bauxite and forming a sodium aluminate solution.
Red Mud Separation and Filtration : The insoluble residues, also known as the red mud,
are separated from the sodium aluminate solution. The red mud, which retains sodium
aluminate solution, is cleaned to recover the alumina and caustic soda it contains.
Seed Decomposition : The filtered and cooled sodium aluminate solution is combined with
aluminum hydroxide seed crystals to promote the precipitation of aluminum hydroxide from
the solution.
Calcination of Aluminum Hydroxide : The aluminum hydroxide precipitate is then
calcinated at around 1,050°C to remove the water content and converted into alumina.
BUSINESS
– 209 –


--- page 220 ---
Our Green Production
We embrace green production principles throughout our production process to fulfill our
dedication to sustainability and comply with global sustainable development policies. We
optimize the use of raw materials, improve the capacity utilization rate of resources, such as
bauxite, and proactively explore the reuse of waste residues to achieve resource recycling. We
are committed to clean production, employing advanced technologies to treat wastewater,
exhaust gases and waste residues, ensuring emissions meet national and local environmental
standards. Moreover, we focus on the green concepts of our products, emphasizing green
attributes such as ease of transport, storage and handling from design to research and
development. During the production phase, we strive to manufacture high-quality alumina and
electrolytic aluminum products to reduce resource waste and environmental pollution caused
by product quality issues. Our subsidiary, Inner Mongolia Chuangyuan, was awarded the
accolade of National Green Factory by the MIIT in 2024.
Specifically, our production process strictly complies with national regulations on
pollutant emissions. The emission limits for particulate matter, sulfur dioxide in the production
process of an aluminum smelter are stipulated by national emission standard of pollutants for
aluminum industry, GB 25465-2010. Using an advance limestone-gypsum method for
desulfurization and dust removal, our emissions of pollutants from the aluminum electrolysis
process during aluminum smelting are significantly below the emission limits set by the
national standard. The following table sets forth our emissions as compared to the national
standard:
National Standards Our Company
Electricity
Generation
Electrolytic
Aluminum Alumina
Electricity
Generation
Electrolytic
Aluminum Alumina
(Mg/M 3) (Mg/M 3)
Particulate /H1118/H1118/H1118/H1118/H111830.0 20.0 10.0 1.5 1.5 1.1
Sulfur Dioxide /H1118/H1118100.0 200.0 100.0 21.9 26.7 3.3
In addition, we continuously innovate in the technologies we use in our green production.
For example, we developed a device and method for deep gas purification (ଋʷༀໄ
جwhich reduces the emissions of harmful gas and improves the production efficiency.
Specifically, during the aluminum smelting process, a significant amount of fumes are emitted.
While these fumes are not highly concentrated in pollutants, existing technologies struggle to
further reduce their environmental impact. To overcome this, we developed a wet flue gas
desulfurization technology capable of removing both sulfur and fluorides from the fumes. We
also introduced a state-of-the-art dust removal technology that excels in capturing fine particles
through a process involving cooling, phase change, aggregation and recapture methods. This
innovation was awarded the first prize of China Nonferrous Industry Scientific and
Technological Progress (ҦආӉɓഃᆤ) and was demonstrated among
enterprises in the aluminum smelting industry. This showcases our dedication to green
production and our ability to provide economically viable and advanced solutions for achieving
near-zero emissions for the green development of China’s aluminum smelting industry.
BUSINESS
– 210 –


--- page 221 ---
Furthermore, we proactively explore ways to reuse the materials produced during the
production process, aiming to achieve resource recycling. In 2023, we established a
collaboration with a university for a joint research project for a system for the comprehensive
reuse of red mud. This system aims to improve alkali extraction to achieve an alkali extraction
rate more than 90%, as well as an alumina extraction rate of more than 50%. The treated red
mud is essentially alkali-free and can be directly used for a wide range of application scenarios,
such as soil remediation, iron extraction and production of building materials.
For other measures promoting green production and ensuring compliance with relevant
laws and regulations, see “— Environmental, Social and Corporate Governance.”
Recognizing the increasing global demand for green power aluminum, we are shifting our
energy supply from fossil fuels, specifically coal, to green energy sources such as wind and
solar power. We have set up green energy supply facilities by building our own wind and solar
power plants. As of the Latest Practicable Date, we had commenced using green energy
generators. See “— Electricity Supply — Our Green Power Supply.”
We attach high importance to green production. Our proactive development of green
energy supply capabilities, including the construction of wind and solar power plants, ensures
that our green power aluminum products meet the standards of low carbon emission. This
strategy attracts high-end customers, increases the appeal of our products and enhances market
competitiveness.
ELECTRICITY SUPPLY
The aluminum smelting process requires a continuous and stable electricity supply.
Electricity costs represent a major portion of production costs for all electrolytic aluminum
companies. According to CRU, in 2024, electricity costs accounted for approximately 36% of
the total production costs for aluminum smelting companies in China. Leveraging the abundant
natural resources in Huolinguole, we have established power plants and electricity generation
facilities that utilize thermal power and are in the process of building power plants and
electricity generation facilities that utilize green electricity sources to provide a stable
electricity supply at low cost. Our rate of electricity self-sufficiency was approximately 88%
in 2024, significantly higher than the industry average of approximately 57% in the same
period, according to CRU. Our rate of electricity self-sufficiency was approximately 87% in
the five months ended May 31, 2025. We also procure electricity, including green electricity,
from the grid to ensure a stable and reliable power supply that mitigates the potential
fluctuations in our self-generated electricity while increasing our green power usage.
BUSINESS
–2 1 1–


--- page 222 ---
Our Thermal Power Supply
Our thermal power plants are strategically located next to our Huolinguole aluminum
smelter and Binzhou alumina refinery.
Our Huolinguole thermal power plant had six sets of 330 MW electricity generators and
our Binzhou thermal power plant had two sets of 25 MW electricity generators, as of May 31,
2025. The primary power generation equipment includes boilers, steam turbines and power
generators sourced from top-tier domestic suppliers. Our proprietary thermal power plant in
Huolinguole supplied approximately 8,188 million kWh, 8,350 million kWh, 8,959 million
kWh, 3,592 million kWh and 3,665 million kWh of electricity for our production in 2022,
2023, 2024 and the five months ended May 31, 2024 and 2025, respectively, accounting for
81.3%, 81.4%, 87.8%, 84.2% and 87.4% of our total electricity consumption for the same
period, respectively. The cost of electricity consumption of current coal-fired thermal power
generation in our Huolinguole aluminum smelter was RMB0.37 per kWh in 2024 and RMB0.33
per kWh in the five months ended May 31, 2025. As of the Latest Practicable Date, we had
obtained 1,452 MW of power generation capacity indicators.
During the Track Record Period, we engaged in the trading of power generation capacity
indicators, namely purchasing the power generation capacity indicators from third-parties, to
increase the capacity of electricity generation in our operations. In 2022, we purchased 710.0
MW of power generation capacity indicators from a third-party at an expense of RMB259.0
million. According to the relevant PRC laws and regulations, power generation capacity
indicators may be used on a coordinated basis across provinces, autonomous regions and
municipalities, provided that the consent of competent authorities in the provinces,
autonomous regions and municipalities to which the project is transferred is obtained. For
details, see “Regulatory Overview — Laws and Regulations on Electric Power Business —
Power Generation Capacity Indicators.” As of the Latest Practicable Date, we are in the process
of obtaining approvals from relevant regulatory authority for the transfer of certain power
generation capacity indicators we purchased. See “Risk Factors — Our business operation and
project construction are subject to various permits, licenses, approvals and/or qualifications
and the loss of or failure to obtain or renew any or all of these permits, licenses, approvals
and/or qualifications may materially and adversely affect our business, financial condition and
results of operations.” During the Track Record Period, we did not sell any of our power
generation capacity indicators to third-parties. The trading of power generation capacity
indicators is conducted primarily through negotiation, with the consideration primarily
determined by market prices. We have in place internal policies for the management of
intangible assets, including the management of the trading of power generation capacity
indicators. According to our internal policies, the purchase, recognition, measurement and
sales of power generation capacity indicators must comply with relevant laws and regulations.
The responsible operational department is tasked with proposing trading plans, implementing
the plans and maintaining relevant records. Our legal department reviews and approves
relevant legal documents; our finance department handles accounting, participates in
acceptance of the relevant intangible assets and conducts regular audits; and the audit
department supervises the compliance in the trading of power generation capacity indicators.
BUSINESS
– 212 –


--- page 223 ---
The following table sets forth the details of our electricity generation and usage in each
year/period during the Track Record Period:
Y ear ended December 31,
Five months ended
May 31,
2022 2023 2024 2024 2025
(million kWh)
Huolinguole thermal power plant
Electricity generated by the
proprietary power plant /H1118/H1118/H1118/H1118/H1118/H11188,960 9,132 9,754 3,916 3,983
Electricity generated by the
proprietary power plant and used
for producing electrolytic
aluminum
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,188 8,350 8,959 3,592 3,665
Electricity procured from
suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,970 1,987 1,654 772 629
Electricity consumed in producing
electrolytic aluminum /H1118/H1118/H1118/H1118/H1118/H1118/H11189,679 9,959 9,863 4,133 4,032
Binzhou thermal power plant (2)
Electricity generated by the
proprietary power plant /H1118/H1118/H1118/H1118/H1118/H1118–––––
Electricity procured from
suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118131 278 343 131 220
Electricity consumed in producing
alumina and other related types
of products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118131 273 343 131 220
Notes:
(1) Representing the amount of electricity generated by the proprietary power plant and used for producing
electrolytic aluminum, deducting the amount of electricity consumed by the operation of our proprietary
power plant and aluminum smelter.
(2) The electricity generated by our Binzhou thermal power plant is not recorded as electricity generated
by our proprietary power plant but as electricity procured from suppliers, mainly because our Binzhou
thermal power plant is connected to the grid, as required by the applicable PRC laws and regulations.
Furthermore, in accordance with applicable PRC laws and regulations, our power plant connected to the
grid is required to sell the generated electricity to the grid. We subsequently source electricity from the
grid for our needs at the alumna refinery. Our Huolinguole thermal power plant is not connected to the
grid, nor is it required to be under any PRC laws and regulations.
BUSINESS
– 213 –


--- page 224 ---
Electricity Procurement
We also procure electricity, including green electricity, from the grid. The cost of
electricity procurement amounted to RMB881.3 million, RMB918.5 million, RMB874.5
million, RMB356.9 million and RMB356.1 million in 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, respectively, accounting for 7.7%, 8.0%, 8.0%, 8.4% and 6.3%
of our cost of sales in the same period, respectively. In 2022, 2023. 2024 and the five months
ended May 31, 2024 and 2025, we procured 1,970 million kWh, 1,987 million kWh, 1,654
million kWh, 772 million kWh and 629 million kWh of electricity, for our electrolytic
aluminum production, respectively, accounting for 19.4%, 19.3%, 15.6%, 18.1% and 14.8% of
our total electricity consumption for the same period, respectively. The cost of electricity
procurement was RMB0.38 per kWh in 2024.
Our Green Power Supply
Leveraging the abundant green energy sources in Huolinguole, we are building
large-scale wind power and solar power plants, which are expected to have a 1,750 MW
electricity generation capacity upon completion. The annual expected utilization hours for our
wind power plant are expected to be 3,778.0 hours and 1,418.0 hours for our solar power plant.
According to the 2023-2024 National Power Supply and Demand Analysis and Forecast Report
(2023-2024ཫ಻జѓ), the national average utilization hours for wind
power plants were 2,225.0 hours and 1,286.0 hours for solar power plants in 2023 . Our
transition to green aluminum smelting operations and green power aluminum is both socially
and economically effective. It reduces the carbon emissions during our production process and
enhances our profitability by reducing the costs of electricity as a proportion to our revenue.
We are constructing wind power plants and solar power plants totaling a projected
installed capacity of 1,750.0 MW. Phase I comprises (i) a wind power plant with an installed
capacity of 540.0 MW, which had been operational and connected to the grid as of the Latest
Practicable Date; and (ii) a solar power plant with an installed capacity of 110.0 MW, 60.0 MW
of which had been installed and some had been operational and connected to the grid as of the
Latest Practicable Date. We expect the remaining capacity to be fully operational and
connected to the grid by the end of 2026. As of the date of this prospectus, construction of the
majority of the above (i) and (ii) under Phase I, with a total installed capacity of 457.0 MW,
had been completed, and the corresponding electricity generators were operational and
connected to the grid. Phase II comprises a wind power plant with an installed capacity of
1,000.0 MW, 500.0 MW of which had been under construction since March, 2025 and is
expected to be fully operational and connected to the grid by March 2026, and the other 500.0
MW had been under site preparation for the construction as of the Latest Practicable Date, is
expected to be fully operational and connected to the grid by October 2026. To further our
commitment to green power supply, we also plan to construct a 100.0 MW distributed solar
power plant on-site, for which we had been designing the construction project as of the Latest
Practicable Date. It is expected to commence its initial operation by the end of 2026.
BUSINESS
– 214 –


--- page 225 ---
As the majority of the projected installed capacity of the Phase I wind power plants and
solar power plants were operational as of the date of this prospectus and the remaining capacity
is anticipated to be fully operational by the end of 2026, and as we continue to procure green
electricity from the grid, our proportion of green energy utilized will continue to increase
towards the end of 2025. By the end of 2026 when both the above Phase I and Phase II wind
power plants and solar power plants become fully operational, and with procurement of green
electricity from the grid, we aim to achieve over 50% proportion of green energy utilized. The
delivered electricity costs of green power generation ranges approximately from RMB0.10 to
RMB0.18 per kWh, based on the estimated total investment in our wind and solar power plants.
Upon the full operation of our green power plants, our thermal power plant will be primarily
used to assist in peak adjustment, supply-demand balancing and stability enhancement.
PROCUREMENT AND SUPPLY CHAIN MANAGEMENT
Procurement
Our raw materials primarily include bauxite, coal, carbon anodes and alumina. We have
a dedicated procurement department for the assessment and purchase of raw materials. The
procurement department is composed of the equipment and raw materials division, the
materials division and the bidding division. The procurement decision-making follows a strict
internal approval procedure, where the procurement plan made by each procurement personnel
needs to be approved by the division head and the management team.
Our suppliers can provide high-quality and stable raw materials to maintain the stability
of our production processes. Our procurement department purchases raw materials through
online and offline bidding. We meticulously select our suppliers, taking into account the price
they offer, their credit history, production capacity and quality of raw materials offered. We
maintain long-term collaborative relationships with our suppliers and typically enter into
annual framework procurement agreements for the purchase of raw materials to guarantee a
stable supply. We constantly assess the performance of our suppliers by considering certain
factors, including the quality of raw material and timeliness of supply. The assessment result
affects our future collaboration with them.
The annual framework procurement agreements typically specify the procurement
volume, duration, pricing, transportation methods and payment terms for both the raw
materials and the freight. As confirmed by CRU, the pricing terms in our procurement
agreements are in line with the industry norm.
Procurement of Bauxite
Bauxite is a major raw material in alumina refining. We procured high-quality bauxite
mainly from Guinea and Australia with high alumina level and low silica content at competitive
prices during the Track Record Period. To ensure the quality of our alumina, we conduct a
series of quality control measures on the bauxite. At the loading and unloading ports, quality
reports are issued by internationally recognized third party inspection agencies such as CCIC
and SGS after their standardized sampling and analysis. Samples from the loading port are
BUSINESS
– 215 –


--- page 226 ---
simultaneously mailed to our alumina refinery for testing. When the vessel arrives at the
unloading port and the unloading begins, we conduct sampling and testing at the port, while
supervising the inspection agency’s sampling and testing process to ensure accuracy. During
the transportation of bauxite to our alumina refinery, samples are taken from the transport
vehicles to ensure that the bauxite has not been contaminated or degraded in quality during
transit. We conduct a final sampling and testing when the bauxite enters our alumina refinery.
The test data from the loading port, unloading port, the transport vehicles and alumina refinery
entry are benchmarked to ensure consistent bauxite quality during the whole process of
international freight and local transportation.
The geographical advantage of our Binzhou alumina refinery reduces our cost of
purchasing bauxite. See “— Our Production — Our Production Capabilities.” In addition, to
reduce the procurement costs of bauxite, we have implemented a number of measures. We seek
out superior suppliers and optimize our supplier pool, prioritizing those who maintain
credibility and can ensure the delivery of quality bauxite on schedule. We also establish
long-term cooperative relationships with suppliers to secure more favorable prices and
improved delivery times. The amount of bauxite that we procured was 2,125.7 kt, 4,654.7 kt,
4,993.3 kt, 2,122.6 kt and 2,922.5 kt in 2022, 2023, 2024 and the five months ended May 31,
2024 and 2025, respectively, and the average purchase price of bauxite was approximately
RMB494 per ton, RMB525 per ton, RMB558 per ton, RMB512 per ton and RMB737 per ton
in the same respective periods, within the range of industry average price in China, according
to CRU.
We primarily procure bauxite from bauxite trading companies or through sourcing agents.
We meticulously select bauxite trading companies and sourcing agents based on their
reputation and financial strength. We maintain long-term cooperative relationships with
bauxite trading companies and sourcing agents who have stable relationships with overseas
bauxite mines to ensure a stable supply of bauxite. These bauxite trading companies and
sourcing agents also arrange personnel at overseas mines to coordinate loading, supervise the
loading process and arrange for inspection agencies to inspect the quality of the loaded bauxite.
The salient terms of the agreements with bauxite trading companies or sourcing agents are
set forth below:
Principal obligations of
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
We are generally responsible for import-related costs. The
seller is obligated to deliver the goods to us according to
the agreed-upon volume, delivery terms and product
specifications such as purities of the bauxite.
Risk allocation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Risk generally passes to us once the goods are delivered to
us. When sourcing agents are involved, risk generally
passes to us once they take possession on our behalf.
BUSINESS
– 216 –


--- page 227 ---
Pricing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We generally set a benchmark price in the procurement
agreement, subject to adjustments based on foreign
exchange rate fluctuations from the agreement date to the
time of delivery by the seller. If sourcing agents are
involved, the benchmark price is similarly established,
typically with adjustments for changes in the average
market price and the exchange rate from the agreement
date to the time of payment. Prepayment is typically
required.
Quality warranties and
assurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
In cases of procuring from trading companies, we are
generally entitled to deduct a percentage of the
procurement price for goods that do not conform to the
agreed-upon product specifications.
Termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We may terminate the agreement if, after payment, the
supplier fails to meet the specified volume, goods or
delivery terms. The supplier may terminate the agreement
if we fail to settle agreed payments on time or otherwise
breach the terms.
Procurement of Coal
We procure coal, typically meager lean coal, as fuel to generate electricity from coal
mines and coal trading companies. Our coal procurement costs compose a large proportion of
our total costs in power supply. Leveraging the abundant coal resources in Huolinguole, we
have access to high-quality coal at low costs. The amount of coal that we procured for our
aluminum smelter and alumina refinery was 6,700.2 kt, 7,327.8 kt, 7,849.5 kt, 3,024.7 kt and
2,817.4 kt in 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, respectively,
and the average purchase price of coal was approximately RMB494.6 per ton, RMB439.0 per
ton, RMB398.1 per ton, RMB396.0 per ton and RMB324.9 per ton in the same respective
periods, within the range of industry average price in China, according to CRU. We have a
dedicated team responsible for the procurement of coal. The procurement of coal is managed
by the raw materials division of our procurement department, led by the division chief, and
staffed by one team leader and three officers. We take into account the price, transportation
costs and our inventory level to determine the amount and price of procurement. The prices at
which we procure coal vary according to the pricing strategies of individual coal mines.
BUSINESS
– 217 –


--- page 228 ---
During the Track Record Period, we did not experience any shortage in coal supply. To
effectively manage the costs of coal procurement, we have strategically chosen to partner with
coal mines affiliated with State Power Investment Corporation and China Energy Investment
Corporation, securing annual framework agreements that guarantee both the stability and
economic viability of our coal procurement. We also engage proximate coal mines, reducing
transportation expenses and ensuring sufficient supply that satisfies any increase in demand for
coal.
The salient terms of the supply agreements with our coal suppliers are set forth below:
Duration and termination /H1118The annual framework agreement typically has a term of
12 months. We also enter into ad hoc procurement
agreement. In cases of annual framework agreement, the
supplier is typically entitled to terminate the agreement if
we resell the procured coal without the supplier’s consent
or if we object to the price adjustment according to market
prices. In cases of ad hoc purchase agreement, if the
supplier fails to deliver the goods on time, we are typically
entitled to terminate the agreement. Parties may terminate
the agreement by mutual consent.
Principal obligations of
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The supplier is obligated to deliver the goods to us
according to the agreed-upon volume, delivery terms and
product specifications. In cases of annual framework
agreement, the frequency and volume of each sales order
will typically be mutually agreed upon. We typically bear
the transportation costs. In cases of ad hoc purchase
agreement, the supplier typically bear the transportation
costs.
Pricing and payment /H1118/H1118/H1118/H1118/H1118The prices of the goods are typically determined when
signing the agreement. We are typically required to make
prepayment. In cases of annual framework agreement, we
may re-negotiate the prices where the market price of
goods fluctuates.
Risk allocation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The risk is typically transferred to us once the goods are
delivered to us.
Quality warranties and
assurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The agreement typically specifies the quality standards. If
the supplied coal contains impurities or other quality
issues, we are entitled to claim liquidated damages. In case
of dispute, a qualified third-party inspector may be
involved.
BUSINESS
– 218 –


--- page 229 ---
Procurement of Carbon Anode
We procure and consume a large amount of carbon anode during the production process
of electrolytic aluminum. The amount of carbon anode that we procured was 329.0 kt, 360.1
kt, 370.9 kt, 145.5 kt and 142.2 kt in 2022, 2023, 2024 and the five months ended May 31, 2024
and 2025, respectively, and the average purchase price of carbon anodes was approximately
RMB5,982.0 per ton, RMB4,314.3 per ton, RMB3,407.5 per ton, RMB3,544.1 per ton and
RMB4,084.4 per ton in the same respective periods, within the range of industry average price
in China, according to CRU.
The salient terms of the agreements with our carbon anode suppliers are set forth below:
Term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The agreement typically has a term of 12 months.
Principal obligations of
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The supplier is obligated to deliver the goods to us
according to the agreed-upon frequency and volume of
each delivery, the delivery terms and product
specifications. We may agree to pick up the goods or the
supplier may be responsible for the transportation. We are
typically obligated to promptly inspect the goods and bear
the costs associated with unloading.
Pricing and payment /H1118/H1118/H1118/H1118/H1118The price of the goods is typically determined through
monthly negotiations between both parties benchmarked
on the average market price over a specified period
preceding the delivery. Upon preliminary inspection and
acceptance of the goods, we shall settle the payment.
Risk allocation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The risk is generally transferred to us once the goods are
delivered to us.
Quality warranties and
assurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The supplier shall ensure the quality of the goods. If the
goods are substandard, we generally are entitled to return
the goods or require replacement, and claim liquidated
damages for breach of contract due to substandard goods.
Termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We may generally terminate the agreement if, after
payment, the supplier fails to meet the specified volume,
goods, delivery terms or product specifications. The
supplier generally may terminate the agreement if we fail
to settle agreed payments on time or otherwise breach the
terms.
BUSINESS
– 219 –


--- page 230 ---
Procurement of Alumina
In addition to the alumina we produced, we also procured alumina from third-party
alumina suppliers. We select third-party alumina suppliers primarily based on their production
capacity, business scale and influence within the industry. We typically prioritize alumina
manufacturers, followed by experienced domestic alumina trading companies. The amount of
alumina that we procured was 729.5 kt, 144.3 kt, 213.9 kt, 13.1 kt and 165.0 kt in 2022, 2023,
2024 and the five months ended May 31, 2024 and 2025, respectively, and the average purchase
price of alumina was approximately RMB2,607 per ton, RMB2,619 per ton, RMB4,008 per ton,
RMB2,897 per ton and RMB3,439 per ton in the same respective periods, within the range of
industry average price in China, according to CRU.
We mainly determine the price of our alumina products with reference to the average
monthly prices of alumina in Shandong and Shanxi indicated by Aladdiny (ɕ), Baiinfo
(ѿ) and Antaike (߅.)
The salient terms of the agreements with our alumina suppliers are set forth below:
Term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The annual framework agreement typically has a term of
12 months. We also enter into ad hoc procurement
agreement.
Principal obligations
of parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The supplier is obligated to deliver goods to us according
to the agreed-upon volume, delivery terms and product
specifications. In cases of annual framework agreement,
the frequency and volume of each sales order will typically
be mutually agreed upon. We typically pick up the goods
and bear the transportation costs.
Pricing and payment /H1118/H1118/H1118/H1118/H1118The price of the goods is typically established based on the
average market price, namely arithmetic mean of daily
market prices, from the preceding month at the time of
delivery. We are typically required to make prepayment.
Risk allocation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The risk is generally transferred to us once the goods are
delivered to us.
Quality warranties and
assurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The supplier guarantees that the quality of the goods meets
the GB/T24487-2022 standard for appearance grade -1 and
-2 products. We are generally entitled to require
replacement in cases of substandard goods.
BUSINESS
– 220 –


--- page 231 ---
Inventory Management
Our inventories mainly consist of raw materials, primarily including bauxite, coal, carbon
anodes and alumina. We had inventories of RMB1,761.0 million, RMB1,255.1 million,
RMB1,577.7 million and RMB2,253.3 million as of December 31, 2022, 2023, 2024 and May
31, 2025, and our inventory turnover days were 50.0, 47.3, 46.8 days and 49.7 days in 2022,
2023, 2024 and the five months ended May 31, 2025.
We have implemented stringent inventory management measures to maintain sufficient
levels of raw materials. We generally take into consideration of market demand, our production
plan and production capacity in inventory management. Our inventory management measures
are developed to ensure that the supply of inventory meets our production plans, which, in turn,
are developed to meet customers’ demand. Our inventory management plans guide the
category, volume and time of procurement of the raw materials. In 2024, (i) it on average took
approximately 48 days from the procurement of bauxite to the delivery of alumina products to
the customers, including approximately 45 days from placing the procurement orders to
receiving the bauxite at our Binzhou alumina refinery and approximately three days for
alumina refining and delivery to customers; and (ii) it took between four to 16 days from the
procurement of alumina to the delivery of electrolytic aluminum products to the customers,
with the time variation reflecting the distance and mode of transportation of raw materials and
finished goods. To guarantee the stable and continuous production, we typically maintain
inventory level between 15 to 20 days for bauxite. For carbon anode, we typically maintain
inventory level between five to 15 days. For alumina, we typically maintain inventory level
between three to 10 days. The inventory level is typically lower in summer and higher in winter
in the respective ranges. We have a dedicated team of 24 people responsible for inventory
management, consisting of three inventory management supervisors and 21 inventory
managers. Our inventory management team adopts an alarm system with four warning levels
to monitor our inventories in real time. If the corresponding warning is triggered, our inventory
management team will immediately inform our procurement department to replenish our raw
materials. Our inventory management team and financial department conduct monthly on-site
stocktaking and inventory checks to assess the inventory quality, inventory level and monthly
consumption of inventory. The monthly inspection helps us to determine our procurement plan,
ensuring an accurate supply of raw materials and avoiding obsolete inventory. These
comprehensive practices enable us to maintain high standards of inventory performance and
responsiveness to market needs.
We generally have no inventory of liquid aluminum. We enter into sales agreements with
our customers with reference to our designed and actual production capacity to ensure that our
liquid aluminum products are directly delivered to our customers once produced from our
production sites. For aluminum ingot products, after aluminum smelting and before we ship the
products, we temporarily store finished products by product specifications. Our on-duty
warehousing personnel are responsible for the daily examination of the storage area. In
addition, the warehousing personnel are required to make daily entries of the warehousing and
sales of finished products to ensure traceability of their origin and destination.
BUSINESS
– 221 –


--- page 232 ---
We have a hedging policy, mainly for the trading of futures contracts and options, to
mitigate market price fluctuations in raw materials and finished goods. During the Track
Record Period, we engaged in minimum level of hedging activities. Specifically, we engaged
in the trading of aluminum ingot futures contracts and options in 2022, deriving other gains of
RMB23.7 million in 2022 which accounted for 0.2% of our total revenue in the same year. We
did not engage in hedging activities in 2023 and 2024, primarily because (i) our product prices
are primarily benchmarked against average market prices, which reflect any market price
fluctuations and factor in the market prices of raw materials, and (ii) the price of our liquid
aluminum products, which constituted the majority of our revenue in 2023, 2024 and the five
months ended May 31, 2025, is determined on a weekly basis and therefore largely minimizes
the risk of market price fluctuations. See “— Sales, Marketing and Customer Service —
Pricing and Payment.” Our hedging policy requires that the trading of futures products aligns
with our plans of procurement and product sales, prohibiting speculative tradings. Our
operational personnel raises hedging proposals and provides essential information on the
underlying raw materials or products being procured or sold, such as procurement agreements
and sales contracts, for the approval of our management team. Once approved, the hedging
proposals are executed where the operational personnel liaise with futures brokers and issue
trade instructions. Our finance personnel is tasked with managing the funds, including the
raising, allocation, accounting and supervision of funds. Our risk management department
conducts risk assessments, monitors hedging activities, sets risk limits and devises contingency
plans, while also regularly reporting risk status to management.
As our product prices are primarily benchmarked against average market prices, which
factor in market prices of raw materials, according to CRU, the success of our operations and
financial health relies on our commitment to minimizing costs throughout every stage of
production. See “Financial Information — Major Factors Affecting Our Results of Operations
— Company-specific Factors — Our Changes in Cost Structure and Gross Profit Margin.”
Warehousing and Logistics
Our warehouses in Huolinguole and Binzhou have an aggregated gross floor area of
approximately 114,886.5 sq.m. We have a comprehensive logistics system for the
transportation and delivery of raw materials and products. In line with the market norm,
according to CRU, we are responsible for the delivery of products to our customers or
customers can pick up the products from our production bases. We adopt specially adapted
aluminum-tapping vehicles and store the liquid aluminum in specially designed containers to
maintain a temperature of 750°C to 900°C during transportation. We engaged third-party
warehousing and logistics service providers during the Track Record Period to transport
bauxite, alumina and carbon anodes by road and combined sea-rail transportation.
BUSINESS
– 222 –


--- page 233 ---
RESEARCH AND DEVELOPMENT
We believe that research and development is critical to our long-term competitiveness and
success. Our autonomous region-level research and development center focuses on research
and development activities that improve our manufacturing techniques and enhance product
quality and reduce costs. For example, our exemplary project of near-zero gas pollutant
emissions during aluminum smelting (ͪᇍʈ೻), which features
our proprietarily developed device and method for deep gas purification (ଋʷༀໄʿ
جthat reduce the emissions of harmful gas and improve production efficiency, was awarded
the first prize of China Nonferrous Industry Scientific and Technological Progress ( ʕ਷ϞЍ
ҦආӉɓഃᆤ). As of the Latest Practicable Date, we held 130 patents, including 126
utility model patents and four invention patents.
QUALITY CONTROL
Providing high-quality products is our top priority. We have implemented a stringent
quality control system to ensure the quality of our raw materials and products. We have a
dedicated quality control department responsible for the quality inspection of our raw materials
and products, ensuring their fulfillment of corresponding national quality standards or industry
standards.
Raw Material Inspection
We collect samples once the raw materials are delivered to our production bases. The
collected sample is labeled with a dedicated bar code before sending it directly to our
CNAS-certified laboratory for sample testing. The information about the supplier is hidden
throughout the whole sample testing process to ensure the fairness of our testing results. We
use advanced equipment, including carbon-hydrogen-nitrogen analyzers that determine the
elemental composition of a sample and calorimeters that measure the amount of heat involved
in a chemical reaction, to analyze the quality of raw materials. We have a set of documents,
including the Inspection Process Manual, Inspection Equipment Operation Manual and
Inspection Standards, for our employees to follow during quality control processes. Our
employees are required to study and follow these manuals to ensure product quality. The results
of the raw material inspection are reviewed internally within the quality control department by
the team leader and the department head. Our quality control department compares our testing
results with the testing report provided by suppliers. Our own testing report is sent to our
procurement team for review. When raw materials do not meet the national quality standards
or industry standards, we send the tested sample to the supplier and third-party inspection
agencies for verification. If the raw materials are verified to be substandard, we require
relevant suppliers to make up with qualifying raw materials according to the contract terms.
BUSINESS
– 223 –


--- page 234 ---
Product Inspection
Our aluminum and alumina products are subject to the national standards promulgated by
the PRC government. Our electrolytic aluminum products are subject to the GB/T 1196-2023
standard. Our alumina products are subject to GB/T 24487-2009 and GB/T 24487-2022
standards. To ensure the implementation of our product quality standards, we carry out
stringent testing on our products. Before product inspection, we first affix barcodes to the
samples and enter their data into the Commodity Management System. See “— Information
Technology.” We conduct comprehensive inspections on alumina products, including tests for
purity and fineness, to ensure that the products meet relevant standards and customer
requirements. For the inspection of electrolytic aluminum products, we employ advanced
equipment such as direct reading spectrometers to measure their elemental composition. We
have established detailed standard documents that cover inspection criteria, procedures and
equipment operation guidelines, which must be strictly followed during the inspection process
to ensure product quality. During the inspection, we maintain electronic records, and any
non-conforming items are subject to rework, scrapping or downgrading based on the situation.
The completed inspection report undergoes a tiered review by team leaders, supervisors and
department heads. Leveraging our stringent quality control system, we did not have any
material product return during the Track Record Period and up to the Latest Practicable Date.
SALES, MARKETING AND CUSTOMER SERVICE
Our success is largely built on our long-standing and stable relationship with high-quality
customers. We have a dedicated team responsible for business development, contract
negotiations and customer service. Our team actively conducts market research and analysis to
understand the pain points and demands of target customers and share industry resources with
our business partners to continuously enlarge our customer base. We routinely visit and
communicate with potential downstream customers with respect to their demand for liquid
aluminum and regularly evaluate such potential commercial opportunities.
Our Sales Network and Marketing Strategies
In order to develop customers, we first determine our sales model and positioned our
target market. We adopt a direct sales model. Our sales network and strategies are market
driven. We have established marketing capabilities to focus on building and reinforcing the
brand image and reputation in the industry for a larger market share. Our target market focuses
on high aluminum demand areas in North and East China, with a span of approximately 1,200
km around our Huolinguole production base, reducing the transportation costs and ensuring
prompt supply to our customers.
We attach high importance to our sales network and the relationships with our customers.
We employ a variety of approaches in our sales and marketing strategies to maintain existing
customers and acquire new ones. We have maintained stable relationships with our customers
by entering into sales contracts with them.
BUSINESS
– 224 –


--- page 235 ---
We sell to both our connected person, Innovation New Material, and independent
third-party customers, primarily including trading companies and production companies.
Except for Innovation New Material, there exist a number of potential downstream customers
within a 25 km radius around our aluminum smelter, including in Huolinguole and surrounding
cities, with a total aluminum alloy production capacity of over 1.9 mt. Such demands are far
more than our annual production capacity of 788.1 kt. We have independent access to
independent third-party customers through our marketing network. We utilize all available
channels, including industry connections we accumulated throughout years of operations, to
reach out to potential downstream customers and proactively engage with them to understand
their procurement requirements. We believe that our brand image and reputation in the industry
will help us acquired more independent third-party customers. For example, for the year ended
December 31, 2022, we sold liquid aluminum and aluminum ingots to more than 100
independent third-party customers, the revenue from which accounted for approximately 95%
of our total revenue from sales of electrolytic aluminum in the same year. Some of the
downstream customers within a 25 km radius around our aluminum smelter had previously
purchased liquid aluminum from us prior to 2023. We plan to partner with more electrolytic
aluminum trading companies, further managing and expanding our sales channel, mitigating
the risk of aluminum prices volatility and optimizing our revenue stream and cash inflow.
As of the Latest Practicable Date, we had received letters of intent from independent
third-party customers to purchase liquid aluminum with the total indicated demand of
approximately 0.78 mt. As of the same date, we had entered into sales contracts with
independent third-party customers for our aluminum ingot products, with the total contract
value of approximately RMB2,723.8 million and the total indicated demand of approximately
148.6 kt for the year of 2025. See “Relationship With Our Controlling Shareholders —
Independence From Our Controlling Shareholders — Operational Independence.”
Sales Contract Terms
We usually enter into annual framework sales agreements with our customers for both our
alumina and electrolytic aluminum products, which typically specify the agreed quality,
pricing, settlement, payment and planned monthly or annual sales volume. Our customers
generally provide us with purchase orders on a monthly basis. The actual monthly volume
delivered is negotiated between our customers and us by taking into account the order volume
and our production capacity. For the arrangement of transportation, see “— Procurement and
Supply Chain Management — Warehousing and Logistics” for details. For pricing and
payment, see “— Pricing and Payment” for details. For product quality, see “— Quality
Control — Product Inspection” and “— Customer Service” for details.
BUSINESS
– 225 –


--- page 236 ---
Pricing and Payment
We adopt a standardized pricing policy for products sold to our customers, including both
connected persons and Independent Third Parties. The prices of our products depend primarily
on the market prices of electrolytic aluminum, as well as other factors such as the local market
conditions and transportation costs.
We mainly determine the price of our electrolytic aluminum products with reference to
the average price of electrolytic aluminum quoted on the website of Shanghai Metals Market
(᙮ၣ), which, as confirmed by CRU, indicates the market-assessed price of
electrolytic aluminum traded in China typically used by market players. More specifically, we
mainly determine the price of our electrolytic aluminum products at an agreed date, such as the
date of delivery, with reference to the quoted average price of electrolytic aluminum on the
website of Shanghai Metals Market over a certain preceding period. As confirmed by CRU,
benchmarking sales prices of electrolytic aluminum products against the average price of
electrolytic aluminum quoted on the website of Shanghai Metals Market is in line with industry
norm. For aluminum ingots, we typically use the market average price, namely the arithmetic
mean of daily market prices, over the preceding week or month. For liquid aluminum, we
mainly use the market average price over the preceding week. We mainly determine the price
of our alumina products at an agreed date, with reference to the monthly average price of
alumina in Shandong and Shanxi indicated by Aladdiny (ɕ), Baiinfo (ѿ) and
Antaike (߅.)
In addition to the market indicators, we also consider the cost of production, cost of
transportation, order volume and the relationship with the customer when determining the price
offered to each customer. We typically do not charge any premium on top of the average market
prices. We typically do not provide volume rebate or bulk purchase discount to our customers.
As confirmed by CRU, the pricing terms in our sales agreements are in line with the industry
norm.
For sales of our liquid aluminum, we generally grant our customers with weekly
settlement periods and the weekly amounts of payments are determined in accordance with the
actual amounts of products sold and the current price calculated by our finance department. For
aluminum ingots, we typically require prepayments from our customers before product
delivery. If the prepaid amount is more or less than the monthly market average price, we will
either refund the excess or request additional payments from relevant customers. For sales of
alumina products, we typically require prepayments as in line with market practice.
BUSINESS
– 226 –


--- page 237 ---
The salient terms of our sales contracts with customers are as follows:
Term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We typically enter into annual framework sales agreement
with a term of 12 months for the sales of liquid aluminum.
We enter into annual framework sales agreement with a
term of 12 months and, to a lesser extent, ad hoc sales
contract for the sales of aluminum ingots and alumina
products.
Principle obligations of
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
We are obligated to deliver the goods to customers
according to the agreed-upon volume, delivery terms and
product specifications. In the case of annual framework
sales agreements, the frequency and volume of each sales
order are typically mutually agreed upon.
Pricing and payment /H1118/H1118/H1118/H1118/H1118The price of the goods depends on the type of products
sold. In general, the price is typically established based on
the average market price over a certain preceding period
determined at an agreed date, including the date of
delivery. We either require prepayment or offer credit
terms not exceeding seven days, depending on the type of
products and assessed on a case-by-case basis.
Risk allocation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The risks of the goods are generally transferred to our
customers upon delivery of goods.
Quality warranties and
assurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Customers typically can raise product quality issues within
a specified time frame in writing upon receiving the goods
and we are obligated to respond within a certain time. In
case of dispute, a qualified third-party inspector may be
involved.
Termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Both parties can terminate the agreement upon mutual
agreement. Typically, non-payment or failure to deliver the
goods entitles the non-defaulting party to terminate the
contract in advance.
Customer Service
We value customer experience and are dedicated to offering attentive customer service to
our customers. We employ a comprehensive system and our sales personnel are committed to
ensuring that our customers receive prompt and effective assistance. We offer return and
exchange services in case of quality issues with our products. During the Track Record Period
and up to the Latest Practicable Date, there had been no material returns or exchanges of our
products. We believe that we have provided satisfying products and customer services to our
customers.
BUSINESS
– 227 –


--- page 238 ---
ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE
We recognize the importance of sustainable development for our long-term development.
Our comprehensive ESG policy and governance structure, comprising the Board and an ESG
working group, help us identify and mitigate potential ESG risks. We continuously enhance our
ESG governance capabilities by optimizing production processes, improving energy structures
and enhancing resource utilization. We prioritize green development by conserving energy,
reducing emissions and standardizing waste disposal. We ensure product quality and refine our
supplier evaluation systems, incorporating sustainability as a key criterion to build a
sustainable supply chain. We foster a people-oriented approach, encouraging innovation and
creating a diverse, equal, healthy and safe working environment. We were in compliance in all
material respects with all applicable environmental protection and occupational safety laws and
regulations in respect of the business currently conducted by us during the Track Record Period
and up to the Latest Practicable Date.
ESG Governance
We have established an ESG governance framework led by the Board, laying the
foundation for the compliance of our ESG efforts, and steadily advancing towards achieving
our ESG goals. To ensure the effective progression of ESG work, we have formulated ESG
management policies that define the responsibilities and roles of the Board and the ESG
working group, providing guidance for the comprehensive implementation of ESG initiatives.
Our Board, as the highest responsible body for our ESG efforts, is responsible for reviewing
our ESG strategy and related risks and receives regular detailed reports from the ESG working
group. To further deepen the ESG work, we have established an ESG working group,
comprising employees from relevant departments. The ESG working group is responsible for
the management of ESG daily matters, including: (i) refining and implementing ESG-related
policies and strategies; (ii) identifying, assessing and managing critical ESG issues; (iii) setting
ESG-related targets and indicators; and (iv) tracking the progress and completion of
ESG-related targets and indicators.
Identification and Evaluation of ESG Risks
We promptly identify ESG-related risks and opportunities through regular assessments
and internal reporting. Our Board is responsible for overseeing and identifying ESG-related
risks and opportunities and supervising the implementation of ESG risk management measures.
Our ESG working group will assist the Board in conducting the identification and management
of ESG-related risks, primarily including: (i) assessing the significance of ESG-related risks
and proposing corresponding recommendations based on the assessment results; and (ii)
collecting relevant ESG information to help identify ESG issues and risk matters.
BUSINESS
– 228 –


--- page 239 ---
The following table sets forth a summary of details on ESG-related risks that we consider
significant and potentially impactful on our business, strategy and financial position:
ESG-related Risks Potential Impacts
Use of Resources /H1118/H1118/H1118/H1118/H1118/H1118 Unstable resource supply or supply interruptions may
lead to restrictions on our production capacity or even
potentially cause us to cease operations.
Emissions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 Violation of national laws and regulations related to
pollutant emissions may lead to administrative
penalties, affecting our normal production and
reputation.
Climate change /H1118/H1118/H1118/H1118/H1118/H1118/H1118 In terms of physical risks, extreme weather conditions
or the gradual long-term changes in climate patterns
could have a direct impact on our physical infrastructure
and operating environment.
 In terms of transition risks, we may face political, legal,
technical and market-related risks in our transition to a
lower-carbon economy.
Health and Safety /H1118/H1118/H1118/H1118/H1118 Frontline employees at the production site may be
affected by the working environment and occupational
diseases and could even potentially suffer from work-
related accidents.
In response to the severe challenges of climate change, countries worldwide are
embracing green and sustainable development, reducing the use of traditional fossil fuels. We
have initiated the construction of wind and solar power projects, planning to replace a portion
of thermal power with green power. This increases the proportion of green energy utilized and
mitigates future compliance pressures from the tightening environmental policies. Our
enhanced research and development investment focuses on optimizing product energy
consumption, enhancing production capacity efficiency and reducing production costs through
technological innovation and equipment upgrades. In addition, leveraging our research and
development capabilities, we are committed to introducing high-quality green electrolytic
aluminum products. Our dedication to exploring and developing green products demonstrates
our commitment to environmental protection.
Measures to Address ESG Risks
To mitigate the potential impacts associated with ESG risks, we implemented the
following measures.
BUSINESS
– 229 –


--- page 240 ---
Use of Resources
We consume fossil energy, water and raw materials during the production process. To
enhance resource efficiency, we implemented comprehensive resource management measures,
obtaining the GB/T 23331-2020/ISO 50001:2018 energy management system certification for
our Huolinguole aluminum smelter in 2022 and for our Binzhou alumina refinery in 2023.
 Fossil fuel consumption. We use fossil fuels, including coal, natural gas, gasoline
and diesel, during our production process. To reduce fossil fuel consumption: (i) we
are constructing wind power plants and solar power plants, aiming to reduce fossil
fuel consumption and greenhouse gas emissions; (ii) we continuously advance the
renovation and upgrade our production equipment to reduce coal consumption. In
accordance with the Implementation Plan for Industrial Furnace and Kiln Waste
Heat Recovery and Utilization Project (),
our Binzhou alumina refinery has installed heat recovery equipment for furnace flue
gas waste to reclaim and utilize thermal energy from flue gases. This initiative can
reduce steam consumption by 4.6 tons per hour, thereby decreasing coal usage by
0.4644 tons per hour. As a result, our Binzhou alumina refinery can achieve an
annual reduction of 3,661.4 tons of standard coal. and (iii) we plan to dispose of idle
vehicles to cut down the use of diesel and gasoline vehicles and gradually apply
electric vehicles to replace diesel vehicles.
 Electricity consumption. We manage electricity consumption in accordance with the
Electric Power Law of the PRC. We are taking initiatives in green transition by
reducing electricity consumption. To reduce electricity consumption: (i) we are fully
committed to advancing our green power strategy, actively promoting the
construction of solar and wind power projects and planning for the integration of
green electricity into the grid, to reduce the consumption of traditional fossil fuel
energy; (ii) we conduct regular inspections of electrical lines and equipment to
promptly identify and rectify any inefficient electricity usage, striving to minimize
power loss; and (iii) we upgraded the lighting equipment in our production base and
offices to LED energy-saving lights and assigned specialized personnel to monitor
electricity usage, ensuring that lights are turned off in unoccupied areas to prevent
the waste of electrical resources.
 Water consumption. To reduce water consumption, we adopted scientific usage of
water resources through technological research to increase the water reuse rate. For
example, according to our project evaluation report, we enhanced the boiler cooling
pools at our Huolinguole aluminum smelter in 2024 by adding steel plates in the
cooling pools of five sets of boilers, thereby reducing leakage and saving water.
Each unit can reduce approximately 10 tons of desalinated water per day, conserving
approximately 18,250 tons of desalinated water annually. In addition, we
continuously cultivate the awareness of our employees on water conservation. We
assign specialized personnel to inspect water usage.
BUSINESS
– 230 –


--- page 241 ---
 Raw material consumption. We consume raw materials such as carbon anodes and
bauxite. To manage raw material consumption, we proactively promote technology
transition projects and continuously strengthen daily production management. Our
Huolinguole aluminum smelter optimizes the shape of the anode carbon blocks,
removes portions that are not fully involved in the electrochemical reaction,
extended the anode replacement cycle and increased the height of the anode carbon
blocks to match the anode replacement cycle. Such advancements can reduce the
number of anode replacements, resulting in a reduction of approximately eight kg of
anode carbon blocks consumed per ton of liquid aluminum produced.
Emission
We closely monitor the relevant laws and regulations related to emission requirements.
We strictly comply with the applicable laws and regulations in the regions where we operate.
We pay significant attention to the management of emissions such as air emissions, wastewater
and solid waste, ensuring that all of our emission indicators meet local standards, effectively
reducing the adverse environmental impact. During the Track Record Period and up to the
Latest Practicable Date, we did not experience any environmental accidents or violations and
no administrative action or penalty had been imposed by the relevant regulatory authorities
with respect to our emission.
We formulated robust internal policies to strengthen the management of emissions, which
meticulously stipulate the emission standards and treatment processes for various types of
emissions.
 Waste gas. Our primary air pollutants include sulfur dioxide, particulate matter and
nitrogen oxides, mainly originating from our power plants, aluminum smelter and
alumina refinery. We adhere to governmental and industrial requirements for the
emission of waste gas. To manage waste gas emissions, we employ flue gas
desulphurization devices, electrolytic flue gas purification systems and boiler
denitrification systems to convert harmful substances in the waste gas into harmless
or low-harm substances before emission, ensuring that the emissions meet
environmental standards. As a result, our waste gas emissions are significantly lower
than the standards of national and local governments.
 Wastewater. We have implemented a comprehensive wastewater treatment system,
including a desulfurization wastewater treatment system, coal-containing
wastewater treatment system and industrial wastewater treatment station. These
systems enable the recycling of wastewater generated through neutralization,
sedimentation and flocculation. The recycled wastewater can be used for ash slurry
humidification and coal yard dust suppression. Our domestic sewage is treated with
domestic sewage treatment station, which can be used for landscape irrigation or as
supplementary water for process systems.
BUSINESS
– 231 –


--- page 242 ---
 Solid waste. Our solid waste primarily includes industrial solid waste, construction
waste and domestic garbage. Industrial solid waste mainly includes red mud, anode
and waste carbon blocks. We established a dedicated temporary storage warehouse
for hazardous waste, implementing zoned management with clear signage. We
regularly entrust qualified third-party entities with hazardous waste disposal
capabilities for safe disposal.
We consistently adhere to the principles of resource utilization and harmless treatment
throughout our waste management process. Our Huolinguole aluminum smelter recycles
carbon residue, transforming it into cryolite and carbon powder through harmless treatment.
Our Binzhou alumina refinery also recycled carbon residue by incorporating it into the coal gas
preparation process. In addition, our Binzhou alumina refinery collaborated with universities
on research to develop harmless treatment technologies and explore valuable recovery and
resource utilization methods for red mud.
Climate Change
Following the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD), we identified and analyzed the potential impact of climate change risks
on our business. The primary climate change risks identified can be categorized into physical
risks and transition risks.
Type of risk Potential impact Response measures
Physical risk
Acute risk /H1118/H1118/H1118 Extreme weather events,
such as heavy snowstorms,
extreme heat, strong
typhoons, hail and heavy
rainfall, may lead to power
outages, water shortages and
traffic disruptions, affecting
logistics, transportation and
production, which in turn
could impact our sales
revenue and profits.
 Extreme weather may cause
employees to suffer
unexpected injuries,
affecting their health and
safety, which could result in
a loss of productivity and
ultimately affect our sales
revenue and profits.
Below response measures apply to
both acute risk and chronic risk:
 We have established the
Emergency Rescue Drill Plan
for Snow Disasters, the
Special Emergency Plan for
Snow Disasters and the
Emergency Plan for
Environmental Incidents. We
have organized annual
emergency drills and training
activities to prepare for
natural disasters.
 We conduct training sessions
for employees on emergency
response to enhance their
ability to deal with
emergencies and ensure the
health and safety of
employees.
BUSINESS
– 232 –


--- page 243 ---
Type of risk Potential impact Response measures
Chronic risk /H1118 Climate change increases the
likelihood of extreme
weather events, which may
result in rising temperatures
and sea levels and uneven
distribution of water
resources. This could
potentially result in
increased operating costs,
such as additional heat
subsidies for employees and
the purchase of cooling
equipment.
Transition risk
Policy and
legal risk /H1118/H1118
 The PRC government has
introduced a special action
plan for energy saving and
carbon reduction in the
electrolytic aluminum
industry and plans to
incorporate the electrolytic
aluminum industry into the
national carbon emissions
trading market management.
Local governments have also
issued relevant policies and
implementation plans
focusing on reducing
pollution and carbon
emissions. As carbon
emissions regulation
intensifies, we may need to
allocate more resources to
research and development of
energy-saving and carbon-
reduction technologies or
upgrading the existing
equipment. This could result
in an increase in our
operating costs.
 We closely monitor policies
related to climate change and
promptly assess their impact
on our operation to
implement improvement
measures as soon as possible.
Through regular internal
training and carrying out
carbon investigation
activities, we consistently
enhance our ability to
statistically analyze carbon
emissions and improve the
level of climate information
disclosure. This proactive
approach addresses the
concerns of the government
and regulatory authorities
regarding our response to
climate change.
BUSINESS
– 233 –


--- page 244 ---
Type of risk Potential impact Response measures
Market risk /H1118/H1118 As China continues to
implement a national
strategy for addressing
climate change, low-carbon
awareness is increasing.
Customer demand is
progressively shifting
towards low-carbon and
environmentally friendly
products. This shift may
impact our sales operations,
potentially resulting in a
decrease in sales revenue and
profits.
 We actively promote the use
of green energy sources, such
as wind and solar power,
reducing the consumption of
fossil fuels and producing
green products.
 Our Huolinguole aluminum
smelter has made significant
progress in calculating and
certifying product carbon
footprints, allowing us to
comprehensively understand
the carbon footprint
throughout the product
lifecycle and identify
opportunities for carbon
reduction.
 We employ advanced
production technologies and
implement energy-saving
and consumption-reducing
control measures to minimize
the carbon footprint of our
products. This enhances their
environmentally friendly
attributes and ensures they
meet international carbon
emission standards.
Reputation
risk /H1118/H1118/H1118/H1118/H1118/H1118
 The public is becoming more
concerned about companies’
commitment to green and
low-carbon development.
Any incident that does not
align with national low-
carbon and environmental
protection policies could
harm our reputation,
potentially affecting our
competitiveness.
 We actively adhere to
environmental protection
policies and conduct training
on environmental and low-
carbon practices, fostering
widespread awareness of
environmental protection and
low-carbon living.
BUSINESS
– 234 –


--- page 245 ---
Health and Safety
We emphasize the health and safety of our employees by establishing a comprehensive
production safety management system, implementing safety assurance measures and
continuously optimizing the conditions for safe production to create a healthy and safe working
environment. We have established employee health management, safety management systems
and emergency response plans to enhance our safety and health management on production in
accordance with relevant laws and regulations.
Our employee health management system and measures at our Huolinguole aluminum
smelter and our Binzhou alumina refinery have been certified to the GB/T45001-
2020/ISO45001:2018 occupational health and safety management system in 2024 and 2023,
respectively. During the Track Record Period up to the Latest Practicable Date, we did not
experience any material work safety incidents and no administrative action or penalty had been
imposed by the relevant regulatory authorities with respect to work health and safety.
To further strengthen our safety management and ensure safe production, we have
implemented the following safety production measures to effectively prevent and control the
occurrence of production safety accidents:
 Potential safety hazards investigation. We conduct quarterly investigations on
safety production hazards in aluminum smelter, alumina refinery and power plants,
with enhanced inspection before holidays. Inspection results will be publicized and
rectification progress will be carried out to promptly eliminate the hazards.
 Daily safety inspections. We conduct daily safety inspections, including checking
the use of protection gear by workers in the production site and equipment, such as
boilers and pressure vessels.
 Safety responsibility system. We strictly follow a comprehensive safety
responsibility system, which clearly defines the safety duties of each department,
leader and employee. This ensures all personnel diligently fulfill their
responsibilities for work safety.
In the production process, we focus on the improvement of working environment and the
enhancement of safety awareness of our employees through the following measures:
 Safety training. We have established the Employee Safety Education and Training
Management Standard (ʈτΌ઺ԃ੃৅၍ଣᅺ๟), which outlines the
objectives, content and timing for safety training. An annual training plan is set out,
detailing safety training tasks for the power plant, aluminum smelter, alumina
refinery and relevant departments. This ensures employees fully understand and
comply with safety production requirements.
BUSINESS
– 235 –


--- page 246 ---
 Protection equipment distribution. Employees receive necessary protective gear,
such as earplugs, goggles, masks, helmets, and insulated clothing. Usage is
supervised to ensure safety.
 Occupational health checks. Pre-employment, regular and post-employment
occupational health checks are provided. We restrict employees with metal implants
from working in hazardous areas, such as electromagnetic fields.
 Occupational disease hazards detection. We regularly monitor workplaces for
occupational disease hazards and engage qualified occupational health service
agencies to conduct necessary tests.
Anti-fraud, Anti-corruption, Anti-bribery and Anti-money Laundering
We are committed to fostering a corporate culture of integrity, honesty and
incorruptibility. We strictly adhere to the Anti-Money Laundering Law of China and other laws
and regulations related to anti-corruption, bribery and money laundering. We have
implemented a series of policies against fraud, bribery, corruption and money laundering,
including the Anti-Fraud, Anti-Bribery, Anti-Corruption Reporting and Whistleblower
Protection Policy () and the Anti-Money
Laundering Management Policy (). These policies provide clear
guidelines for the prevention, reporting, investigation and penalization of fraudulent activities.
To further prevent fraudulent activities, we continuously improve our internal control
measures, through the development of business process flowcharts and the establishment of
control mechanisms. In addition, auditors regularly conduct inspections for bribery and
corruption fraud, promptly identifying potential fraudulent situations. During the Track Record
Period up to the Latest Practicable Date, we did not experience any material dispute or any
pending legal proceeding related to business ethics.
We have established multiple reporting channels to facilitate the reporting of actual or
suspected fraud by all employees and certain external parties with direct or indirect economic
transactions with us. Reports can be made through hotlines, emails, and letters. Upon receiving
reports of fraudulent activities, our Audit Department promptly conducts reviews and
investigations. If necessary, we engage third-party professionals to assist in the investigation.
We strictly protect the privacy and information of whistleblowers, ensuring their identity and
information are not disclosed without their consent. Any breach of confidentiality or retaliation
will result in dismissal or contract termination, and legal offenses will be referred to judicial
authorities for action.
We uphold transparency and fairness in procurement by including integrity and
anti-corruption clauses in our contracts with suppliers. In addition, we require suppliers to sign
the Integrity Agreement for Bidding and Commercial Business (՘ᙄ
) before collaboration, to jointly maintain high ethical standards and promote the culture
of integrity.
BUSINESS
– 236 –


--- page 247 ---
Social Responsibility
We recognize our social responsibilities and proactively contribute to the society. We
assist disadvantaged families in Tongliao, Inner Mongolia, through donations and public
welfare projects, particularly for the elderly, orphans and people with disabilities. In addition,
we proactively participate in public welfare, cultural and sports activities, making significant
contributions to society. Our involvement includes sports and cultural sponsorships, where we
collaborate with local governments and public welfare organizations to organize various
activities. For example, we sponsored the Huolinguole International Half Marathon and
supported the development of Huolinguole Wulan Pastoral Cavalry’s cultural industry. We
organize voluntary blood donation, which demonstrates our commitment to fostering unity,
cooperation and mutual assistance. We also regularly donate to the municipal education
foundation to support educational development.
Environmental Protection Performance
To proactively respond to the goals of Carbon Peaking and Carbon Neutrality, we
continue to pay attention to environmental protection and the development of ecological
culture. We are committed to integrating sustainable development into our business operation
and decision-making. We have established environmental protection targets to quantify our
efforts and actively monitor our environmental impact. The following table sets forth our
quantitative data on the environmental protection performance during the Track Record Period:
Five months
ended
May 31,
Category Unit 2022 2023 2024 2025
Air emission /H1118/H1118/H1118/H1118/H1118Intensity of nitrogen
oxides
kg/ton total
output (1)
0.95 (2) 0.64 (2) 0.63 0.52
Intensity of sulfur
dioxide
kg/ton total
output
1.04 0.90 0.87 0.54
Intensity of particulate
matter
kg/ton total
output
0.10 (3) 0.06 (3) 0.06 0.05
Intensity of waste gas kg/ton total
output
2.09 (4) 1.60 (4) 1.55 1.10
Greenhouse gas
(GHG) emission /H1118/H1118
Scop e 1 – Direct
emission
ton 9,796,707 10,681,145 11,606,583 4,804,549
Scop e 2 – Indirect
energy emission
ton 1,287,344 1,383,734 1,219,211 553,217
Scop e 3 – Other
indirect emission (5)
ton 40 47 79 53
Total GHG emission
(Scop e 1 + Scope 2)
ton 11,084,051 12,064,879 12,825,794 5,357,766
Intensity of total
GHG emission
(Scop e 1 + Scope 2)
ton/ton total
output
7.01 4.83 5.04 4.16
BUSINESS
– 237 –


--- page 248 ---
Five months
ended
May 31,
Category Unit 2022 2023 2024 2025
Waste /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Intensity of hazardous
waste
ton/ton total
output
0.011 0.009 0.014 (6) 0.012
Intensity of non-
hazardous waste
ton/ton total
output
2.17 1.71 (7) 1.62 1.47
Energy consumption /H1118Intensity of total
energy consumption
MWh/ton
total output
34.16 23.75 (7) 24.27 19.33
Water consumption /H1118Intensity of total water
consumption
ton/ton total
output
2.83 2.21 (7) 2.50 2.68
PFC emission /H1118/H1118/H1118/H1118Intensity of PFC ton carbon
dioxide
equivalent/ton
total
electrolytic
aluminum
output
0.14481
(8) 0.14481 (8) 0.14481 (8) 0.14481 (8)
Notes:
(1) The intensity ratio uses annual total output during the indicated period. The annual total output includes
the annual output of electrolytic aluminum as well as alumina and other related types of products.
(2) The nitrogen oxide emission standard was tightened from 200 mg/m 3 in 2022 to 100 mg/m 3 in 2023,
leading to a decrease in intensity of nitrogen oxide.
(3) The particulate matter emission standard was tightened from 20 mg/m 3 in 2022 to 10 mg/m 3 in 2023,
leading to a decrease in intensity of particulate matter.
(4) The emission standards for nitrogen oxides and particulate matter was tighten in 2023. As a result, the
intensity of waste gas emissions decreased.
(5) Including the GHG emission from wastepaper disposed of in landfills and our employees’ business trips
by airplane.
(6) Hazardous waste mainly includes overhaul residue, carbon residue and coal tar. The increase in intensity
of hazardous waste in 2024 is mainly due to (i) the replacement of electrolytic cells at the Huolinguole
aluminum smelter, resulting in an increase in overhaul residue; and (ii) the increase in coal consumption
at the Binzhou alumina refinery, leading to increased gas output from the coal gasifiers. At the same
time, the load on the gas generator increased, which led to a higher usage of saturated steam, resulting
in an increase in coal tar production.
(7) In 2023, the production volume of the Binzhou alumina refinery increased, leading to an increase in the
proportion of alumina among our products sold, which in turn resulted in a decrease in the intensity of
non-hazardous waste, total energy consumption and total water consumption.
(8) The intensity of PFC emission remained consistent throughout the Track Record Period because the
national guidelines mandate the use of a fixed, universal emission factor per ton of electrolytic
aluminum produced.
BUSINESS
– 238 –


--- page 249 ---
We will monitor air emission and GHG emission to assess and manage our environmental
impact. We have compared our environmental protection indicators with those of other major
electrolytic aluminum producers in China and considering our operational conditions, reviewed
our environmental protection performance and set emission reduction targets.
Category Unit
Our
Company
2024
Major
electrolytic
aluminum
producer A (1)
2024
Major
electrolytic
aluminum
producer B (2)
2024
Major
electrolytic
aluminum
producer C (3)
2024
Air emission /H1118/H1118Intensity of
nitrogen oxides
kg/ton total
output
0.63 0.31 1.42 0.89
Intensity of sulfur
dioxide
kg/ton total
output
0.87 1.57 1.55 1.39
Intensity of
particulate
matter
kg/ton total
output
0.06 0.13 0.19 0.17
GHG emission /H1118Intensity of total
GHG emission
(Scope 1 +
Scope 2)
ton/ton total
output
5.04 3.09 14.47 5.65
Waste /H1118/H1118/H1118/H1118/H1118/H1118Intensity of
hazardous waste
ton/ton total
output
0.014 0.009 2.983 0.051
Energy
consumption /H1118
Intensity of total
energy
consumption
Megawatthour/
ton total
output
24.27 6.27 33.47 25.11
PFC emission /H1118/H1118Intensity of PFC ton carbon
dioxide
equivalent/ton
total
electrolytic
aluminum
output
0.14481 N/A
(4) N/A(4) N/A(4)
Notes:
(1) The figure of annual total output is sourced from this company’s ESG report and annual report of 2024.
According to such sources, its annual total output contains 7,610,000 tons of electrolytic aluminum,
16,870,000 tons of alumina and 13,160,000 tons of commercial coal.
(2) The figure of annual total output is sourced from this company’s ESG report and annual report of 2024.
According to such sources, its annual total output contains 5,837,000 tons of aluminum alloy and
766,000 tons of aluminum alloy processed products.
(3) The figure of annual total output is sourced from this company’s ESG report and annual report of 2024.
According to such sources, its annual total output contains 408,800 tons of electrolytic aluminum and
607,500 tons of processed aluminum products.
(4) The PFC emission figure is not publicly available.
BUSINESS
– 239 –


--- page 250 ---
For our domestic operations, looking ahead, taking into account our ongoing production
capacity expansion, we plan to further reduce air emission intensity by 7.49% at the end
December 31, 2028, with reductions of 2.46%, 2.41%, and 2.97% in 2026, 2027, and 2028,
respectively, through improving the operational efficiency of air emission purification systems.
Through continually increasing the proportion of clean energy usage, identifying and
managing carbon emission sources in production processes, and applying appropriate emission
reduction technologies, we plan to reduce GHG emission intensity, including Scope 1 and
Scope 2 by 11.36% at the end of December 31, 2028, with reductions of 6.39%, 5.36%, and
1.20% in 2026, 2027, and 2028, respectively.
We plan to further optimize the energy management system, upgrade equipment and
integrate existing energy utilization scenarios to systematically reduce energy consumption.
Comparing to May 31, 2025, we plan to reduce our intensity of energy consumption by 1.69%
at the end of December 31, 2028, with reductions of 0.59%, 0.51%, and 0.68% in 2026, 2027,
and 2028, respectively.
Through further improving source utilization and process control, we plan to reduce
intensity of water consumption by 5.81% at the end of December 31, 2028, with reductions of
1.55%, 1.66%, and 2.48% in 2026, 2027, and 2028, respectively.
We currently do not have specific targets for reducing the intensity of waste, as we believe
our current performance are already at a relatively low level compared with our industry peers.
We anticipate that the intensity of waste generation and effluent discharge will remain
substantially consistent with current levels. However, we remain committed to continuously
improving our practices and ensuring we minimize our environmental impact.
ESG Implication of the Saudi Project
The Saudi Project will procure electricity from the Kingdom of Saudi Arabia’s national
grid, which is pursuing ambitious renewable energy objectives, including a target of 50%
renewable power by 2030 and tendering 100 to 130 gigawatts of renewable energy capacity.
Upon realization of these initiatives, the materially reduced carbon intensity of the national
grid will directly contribute to a corresponding reduction in the Saudi Project’s Scope 1 and
Scope 2 greenhouse gas emissions. Our internal and external evaluation indicates that the
current emissions profile of the Saudi Project is broadly in line with prevailing standards
among producers in the Gulf Cooperation Council (GCC) region. As Saudi Arabia expands its
renewable energy infrastructure, the project is well-positioned to achieve further emissions
reductions over time. We do not anticipate that the project’s emissions profile will adversely
affect the marketability of products of our Saudi Project.
BUSINESS
– 240 –


--- page 251 ---
In addition, we are actively advancing localization of the workforce, with a target of
exceeding 30% local employment, thereby generating meaningful employment opportunities
for Saudi nationals and the surrounding community. Personnel will benefit from competitive
remuneration, stringent health and safety protocols, comprehensive welfare and recreational
amenities, an inclusive and supportive workplace culture, and community-focused engagement
programs, underscoring our commitment to sustainable social impact and corporate citizenship.
OUR CUSTOMERS
We sold liquid aluminum mainly to downstream non-ferrous metal processing and
manufacturing enterprises near our aluminum smelter in Huolinguole, Inner Mongolia, such as
Innovation New Material. We mainly sold aluminum ingots to domestic third-party
downstream aluminum alloy manufacturers and traders. In line with market practice, we sell
our products to traders, who in turn resell our products to downstream aluminum product
manufacturers or other traders. Our alumina and other related types of products are primarily
sold to electrolytic aluminum producers. Our alumina is mainly for our production of our
electrolytic aluminum products. In addition, we have sold alumina to independent third-party
electrolytic aluminum producers and traders during the Track Record Period.
Our transactions with these traders, including pricing terms, were the same as those we
have when dealing directly with downstream aluminum product manufacturers. Our
relationships with these traders were buyer and seller relationships rather than principal-and-
agent relationships. We recognized the sales revenue for the transactions with these commodity
traders in the same manner as we do so with downstream aluminum product manufacturers and
independent third-party electrolytic aluminum producers.
BUSINESS
– 241 –


--- page 252 ---
The following table sets forth the revenue, sales volume and ASP of our sales by product type and by nature of customers, namely aluminum
alloy manufacturers and traders, for the periods indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1)
(kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton)
Electrolytic aluminum /H1118/H1118/H1118/H1118/H1118/H1118733.1 12,881.9 17,572.3 773.0 12,502.3 16,173.9 752.6 12,883.7 17,119.9 315.4 5,276.0 16,725.6 312.1 5,523.2 17,697.7
– Aluminum alloy manufacturers /H1118/H1118 147.5 2,573.2 17,447.5 695.2 11,231.3 16,155.7 696.3 11,888.7 17,073.4 315.4 5,276.0 16,725.6 293.1 5,183.2 17,684.7
– Traders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118585.6 10,308.7 17,603.7 77.8 1,271.0 16,336.8 56.2 995.0 17,704.6 – – – 19.0 340.0 17,893.7
Alumina (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118706.3 1,774.9 2,513.0 1,563.7 3,792.9 2,425.6 1,539.6 5,407.8 3,512.5 663.9 1,946.6 2,932.1 660.2 1,939.8 2,938.2
– Aluminum alloy manufacturers /H1118/H1118 704.4 1,769.5 2,512.1 1,531.8 3,699.1 2,414.9 1,425.4 5,028.7 3,527.9 608.5 1,780.7 2,926.3 474.4 (3) 1,430.4 (3) 3,015.2
– Traders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.9 5.4 2,842.1 31.9 93.8 2,940.4 114.2 379.1 3,321.1 55.3 165.8 2,996.3 185.8 (3) 509.4 (3) 2,741.6 (4)
Notes:
(1) The ASP is calculated by dividing the revenue by volume in the indicated period.
(2) Including the volume and revenue for intra-Group sales of alumina. In 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, the volume of a lumina we
sold intra-Group amounted to 679.3 kt, 1,268.3 kt, 1,095.1 kt, 528.0 kt and 199.5 kt, respectively, generating revenue of RMB1,706.8 million, RMB3,1 66.3 million,
RMB3,760.0 million, RMB1,538.2 million and RMB601.2 million, respectively.
(3) In the five months ended May 31, 2025, to further optimize our revenue stream and cost structure, we actively expanded alumina sales to nearby custo mers, achieving
increased sales volumes to trader customers. During the same time, we actively decreased the amount of intra-Group sales of alumina (which counted as sales to an
aluminum alloy manufacturer) and procured more alumina for our electrolytic aluminum production from nearby suppliers.
(4) The ASP of alumina sold to aluminum alloy manufacturers decreased from RMB2,996.3 in the five months ended May 31, 2024 to RMB2,731.6 in the same per iod in
2025, primarily because of the dynamic changes in the market prices of alumina. The majority volume of alumina we sold to traders in the five months ende d May 31,
2025 was sold after February 2025, where the market price of alumina decreased significantly from the peak in January 2025, according to CRU. In contra st, we sold
alumina to traders throughout the five months ended May 31, 2024, during which the market price of alumina steadily increased, according to the same so urce.
BUSINESS
– 242 –


--- page 253 ---
The following table sets forth a breakdown of our revenue by nature of customers in
absolute amount and as a percentage of our total revenue for the periods indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Aluminum alloy
manufacturers /H1118/H1118/H1118/H1118/H1118/H11183,008.3 22.3 12,251.4 88.7 13,573.7 89.5 5,664.8 96.3 6,199.5 85.9
Traders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,481.4 77.7 1,563.3 11.3 1,589.5 10.5 218.5 3.7 1,014.0 14.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,489.7 100.0 13,814.7 100.0 15,163.2 100.0 5,883.2 100.0 7,213.5 100.0
We mainly sold aluminum ingots to independent third-party customers before 2023. In
early 2023, considering the newly launched manufacturing sites of Innovation New Material,
our connected person, which is close to our production base in Huolinguole, Inner Mongolia
and its large demand for electrolytic aluminum in liquid form, we sold a majority of liquid
aluminum we produced to Innovation New Material for the best interests of both parties. See
“Relationship with Our Controlling Shareholders — Independence From Our Controlling
Shareholders — Operational Independence.”
BUSINESS
– 243 –


--- page 254 ---
The following table sets forth the revenue, sales volume and ASP of our sales by product type and by type of customers, namely connected
persons and Independent Third Parties, for the periods indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1)
(kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton)
Electrolytic aluminum /H1118/H1118/H1118/H1118/H1118/H1118733.1 12,881.9 17,572.3 773.0 12,502.3 16,173.9 752.6 12,883.7 17,119.9 315.4 5,276.0 16,725.6 312.1 5,523.2 17,697.7
– Connected persons /H1118/H1118/H1118/H1118/H1118/H1118/H11184.4 74.1 16,840.9 674.6 10,892.9 16,147.2 679.1 11,580.3 17,052.4 315.4 5,276.0 16,725.6 243.6 (4) 4,305.5 17,675.0
– Independent Third Parties /H1118/H1118/H1118728.7 12,807.8 17,576.2 98.4 1,609.4 16,355.7 73.5 1,303.4 17,733.3 – – – 68.5 1,217.7 17,777.5
Alumina (2)(3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118706.3 1,774.9 2,513.0 1,563.7 3,792.9 2,425.6 1,539.6 5,407.8 3,512.5 663.9 1,946.6 2,932.1 660.2 1,939.8 2,938.2
Notes:
(1) The ASP is calculated by dividing the revenue by volume in the indicated period.
(2) Including the volume and revenue for intra-Group sales of alumina. In 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, the volume of a lumina we
sold intra-Group amounted to 679.3 kt, 1,268.3 kt, 1,095.1 kt, 528.0 kt and 199.5 kt, respectively, generating revenue of RMB1,706.8 million, RMB3,1 66.3 million,
RMB3,760.0 million, RMB1,538.2 million and RMB601.2 million, respectively.
(3) Except for intra-Group sales of alumina, substantially all of our revenue from alumina and related types of products was generated from Independe nt Third Parties during
the Track Record Period.
(4) The volume of our electrolytic aluminum sold to connected persons, which is all liquid aluminum, decreased from 315.4 kt in the five months ended Ma y 31, 2024 to
243.6 kt in the same period in 2025, primarily because we proactively increased the production and sales volume of aluminum ingots to independent thir d parties to further
broaden our customer base, therefore leading to decreased sales volume of liquid aluminum sold to connected persons.
BUSINESS
– 244 –


--- page 255 ---
Our revenue from aluminum ingots increased significantly from nil in the five months
ended May 31, 2024 to RMB1,217.7 million in the same period of 2025, primarily due to (i)
our increase in sales of aluminum ingots to independent third parties. Such customers were
primarily existing customers; and (ii) our decrease in sales of liquid aluminum to related
parties to reduce the proportion of connected transactions. Our revenue from alumina increased
significantly from RMB408.4 million in the five months ended May 31, 2024 to RMB1,338.6
million in the same period of 2025, primarily due to our increase in sales of alumina to
independent third parties as we increased our procurement of high-lithium salt alumina
externally for our aluminum smelting to optimize electrolyte composition, which improves
electrolysis efficiency and extends the lifespan of our electrolyzers.
The following table sets forth the gross profit and gross profit margin of our sales of
electrolytic aluminum products by type of customers for the periods indicated:
Y ear ended December 31, Five months ended May 31,
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
million) (%)
(RMB in
million) (%)
(RMB in
million) (%)
(RMB in
million) (%)
(RMB in
million) (%)
(unaudited)
Connected persons /H1118/H1118 7.6 10.2 1,789.2 16.4 3,149.9 27.2 1,446.5 27.4 1,043.1 24.2
– Liquid aluminum /H1118/H1118 – – 1,783.3 16.4 3,149.7 27.2 1,446.5 27.4 1,043.1 24.2
– Aluminum ingots /H1118/H1118 7.6 10.2 5.9 11.4 0.2 24.0 – – – –
Independent Third
Parties /H1118/H1118/H1118/H1118/H1118/H1118/H11181,729.7 13.5 240.5 14.9 319.3 24.5 – – 267.0 21.9
We recorded a higher gross profit margin for sales of electrolytic aluminum products to
connected persons than to Independent Third Parties in 2023, 2024 and the five months ended
May 31, 2025, primarily because of the different timing of the sales and the fluctuations in
market prices of electrolytic aluminum products as well as raw materials. Our connected
persons, mainly Innovation New Material, purchased electrolytic aluminum products from us
all-year/period-round whereas Independent Third Parties purchased considerably less amount
of electrolytic aluminum products from us and generally did not make purchase all-
year/period-round. As we set our sales price benchmarked against market prices of electrolytic
aluminum which fluctuate from time to time and thus affect our revenue, and as the industry
average prices of our major raw materials fluctuate from time to time which affect our cost of
sales, this would result in differences in the gross profit margins for sales to these different
groups of customers. For example, in 2023, sales of aluminum ingots to Independent Third
Parties occurred primarily in the first quarter, when the average market price of electrolytic
aluminum was relatively lower than the annual average, and the cost of raw materials,
particularly bauxite, was relatively higher than the annual average due to market price
fluctuations. In 2024, we sold aluminum ingots to Independent Third Parties in the second half
BUSINESS
– 245 –


--- page 256 ---
of the year, when the cost of raw materials, particularly alumina and bauxite, was relatively
higher than the annual average due to market price fluctuations. In the five months ended May
31, 2025, the majority of our products sold to Independent Third Parties was sold in the first
quarter, when the cost of raw materials, particularly bauxite, was relatively higher than the
five-month average due to market price fluctuations. These market conditions resulted in a
comparatively lower gross profit margin for sales to Independent Third Parties than to
connected persons in the respective periods.
The following table sets forth the gross profit and gross profit margin by type of
electrolytic aluminum products and by type of customers for the periods indicated:
Y ear ended December 31, Five months ended May 31,
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
million) (%)
(RMB in
million) (%)
(RMB in
million) (%)
(RMB in
million) (%)
(RMB in
million) (%)
(unaudited)
Liquid aluminum
Connected persons /H1118/H1118 – – 1,783.3 16.4 3,149.7 27.2 1,446.5 27.4 1,043.1 24.2
Independent Third
Parties /H1118/H1118/H1118/H1118/H1118/H1118/H111883.5 23.0 – – – – – – – –
Aluminum ingots
Connected persons /H1118 7.6 10.2 5.9 11.4 0.2 24.0 – – – –
Independent Third
Parties /H1118/H1118/H1118/H1118/H1118/H1118/H11181,646.2 13.2 240.5 14.9 319.3 24.5 – – 267.0 21.9
The gross profit margin for liquid aluminum differed from that of aluminum ingots during
the Track Record Period for the reasons discussed above. Aside from the effects of the timing
of sales and fluctuations in market prices of products as well as raw materials, our sales of
liquid electrolytic aluminum generally do not yield a higher gross profit margin than sales of
aluminum ingots. The differences in the gross profit margins for the sales of aluminum ingots
to different types of customers are primarily due to the different timing of the sales and the
fluctuations in market prices. Notably, during the Track Record Period, sales volume of
aluminum ingots to our connected persons were considerably lower than that to Independent
Third Parties. As a result, the gross profit margin for sales to connected persons may exhibit
greater fluctuation and differ from that of sales to Independent Third Parties, depending on the
timing of sales within the periods and the different market prices at the time of sales. See “—
Sales, Marketing and Customer Service — Pricing and Payment.”
BUSINESS
– 246 –


--- page 257 ---
Revenue from our five largest customers in each year/period during the Track Record
Period amounted to RMB5,507.5 million, RMB12,018.8 million, RMB13,132.6 million and
RMB5,751.4 million, respectively, and accounted for 40.8%, 87.0%, 86.6% and 79.7% of our
total revenue for the same respective periods. Revenue from our largest customer in each
year/period during the Track Record Period amounted to RMB1,598.1 million, RMB10,891.8
million, RMB11,608.9 million and RMB4,315.9 million, respectively, and accounted for
11.8%, 78.8%, 76.6% and 59.8% of our total revenue for the same respective periods. See
“Risk Factors — Our success depends on our strong relationships with major customers. A
significant portion of our revenue in 2023 and 2024 and the five months ended May 31, 2025
was derived from a connected person.” All of our five largest customers in each year/period
during the Track Record Period were traders, manufacturers or conglomerates in the aluminum
industry.
The following table sets forth the details of our five largest customers in each year/period
during the Track Record Period by revenue for the respective periods:
Y ear ended December 31, 2022
No. Customers Background Location
Major
Products
Purchased Principal Business Revenue
%o f
Total
Revenue
Y ear of
Commencement of
Business
Relationship
Credit
Term
Payment
Method
(RMB in
million)
1 /H1118/H1118Customer A A private company with
a registered capital of
RMB10.0 million
China Aluminum
ingots
Sales of nonferrous
metal materials and
related products
1,598.1 11.8% 2020 Prepayment Bank transfer
or bank
acceptance
2 /H1118/H1118Customer B A private company with
a registered capital of
RMB20.0 million
China Aluminum
ingots
Sales of aluminum
products
1,482.7 11.0% 2020 Prepayment Bank transfer
or bank
acceptance
3 /H1118/H1118Customer C A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB366,670.6
million in 2024
China Aluminum
ingots
Conglomerate 925.0 6.9% 2019 Prepayment Bank transfer
4 /H1118/H1118Customer D A private company with
a registered capital of
RMB10.0 million
China Aluminum
ingots
Sales of metal
products
795.7 5.9% 2021 Three days Bank transfer
or bank
acceptance
5 /H1118/H1118Customer E A private company with
a registered capital of
RMB16,633.1 million
China Aluminum
ingots
Production of
aluminum and
related products
706.0 5.2% 2022 Prepayment Bank transfer
or bank
acceptance
Total 5,507.5 40.8%
BUSINESS
– 247 –


--- page 258 ---
Y ear ended December 31, 2023
No. Customers Background Location
Major
Products
Purchased Principal Business Revenue
%o f
Total
Revenue
Y ear of
Commencement of
Business
Relationship
Credit
Term
Payment
Method
(RMB in
million)
1 /H1118/H1118Innovation
New
Material
A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB80,941.5 million
in 2024
China Liquid
aluminum
Manufacturing of
metal materials and
nonferrous metal
alloy
10,891.8 78.8% 2023 One week Bank transfer
or bank
acceptance
2 /H1118/H1118Customer F A private company with
a registered capital of
RMB800.0 million
China Alumina Production of
nonferrous metal
560.7 4.1% 2020 Prepayment Bank transfer
3 /H1118/H1118Customer A A private company with
a registered capital of
RMB10.0 million
China Aluminum
ingots
Sales of nonferrous
metal materials and
related products
297.0 2.2% 2020 Three days Bank transfer
or bank
acceptance
4 /H1118/H1118Customer G A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB354,439.6
million in 2024
China Aluminum
ingots
Conglomerate 139.1 1.0% 2022 Two days Bank transfer
5 /H1118/H1118Customer C A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB366,670.6
million in 2024
China Aluminum
ingots
Conglomerate 130.2 0.9% 2019 Prepayment Bank transfer
Total 12,018.8 87.0%
BUSINESS
– 248 –


--- page 259 ---
Y ear ended December 31, 2024
No. Customers Background Location
Major
Products
Purchased Principal Business Revenue
%o f
Total
Revenue
Y ear of
Commencement of
Business
Relationship
Credit
Term
Payment
Method
(RMB in
million)
1 /H1118/H1118Innovation
New
Material
A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB80,941.5 million
in 2024
China Liquid
aluminum
Manufacturing of
metal materials and
nonferrous metal
alloy
11,608.9 76.6% 2023 One week Bank transfer
or bank
acceptance
2 /H1118/H1118Customer F A private company with
a registered capital of
RMB800.0 million
China Alumina Production of
nonferrous metal
582.9 3.8% 2020 Prepayment Bank transfer
3 /H1118/H1118Customer H A private company with
a registered capital of
RMB1,343.8 million
China Alumina Mining and sales of
coals and related
products
431.1 2.8% 2024 Prepayment Bank transfer
or bank
acceptance
4 /H1118/H1118Customer I A private company with
a registered capital of
RMB1.0 million
China Aluminum
ingots
Sales of nonferrous
metal alloy
318.4 2.1% 2023 Prepayment Bank transfer
5 /H1118Customer J A private company with
a registered capital of
RMB20.0 million
China Alumina Sales of nonferrous
metal alloy
191.3 1.3% 2024 Prepayment Bank transfer
Total 13,132.6 86.6%
BUSINESS
– 249 –


--- page 260 ---
Five months ended May 31, 2025
No. Customers Background Location
Major
Products
Purchased Principal Business Revenue
%o f
Total
Revenue
Y ear of
Commencement of
Business
Relationship
Credit
Term
Payment
Method
(RMB in
million)
1 /H1118/H1118Innovation
New
Material
A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB80,941.5 million
in 2024
China Liquid
aluminum
Manufacturing of
metal materials and
nonferrous metal
alloy
4,315.8 59.8 2023 One week Bank transfer
or bank
acceptance
2 /H1118/H1118Customer C A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB366,670.6
million in 2024
China Aluminum
ingots
Conglomerate 692.1 9.6 2019 Prepayment Bank transfer
3 /H1118/H1118Customer H A private company with
a registered capital of
RMB1,343.8 million
China Alumina Mining and sales of
coals and related
products
304.3 4.2 2024 Prepayment Bank transfer
or bank
acceptance
4 /H1118/H1118Customer K A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB24,021.7 million
in 2024
China Aluminum
ingots
Manufacturing of
aluminum materials
270.9 3.8 2019 Prepayment Bank transfer
5 /H1118Customer F A private company with
a registered capital of
RMB800.0 million
China Alumina Production of
nonferrous metal
168.1 2.3 2020 Prepayment Bank transfer
Total 5,751.4 79.7
For salient terms of the sales contracts with our customers, see “— Sales, Marketing and
Customer Service — Pricing and Payment.”
BUSINESS
– 250 –


--- page 261 ---
To the best of our knowledge, except for Innovation New Material, each of our five
largest customers in each year/period during the Track Record Period was an Independent
Third Party. To the best of our knowledge, except for Innovation New Material, none of our
Directors, their associates or any shareholders of our Company, who or which to the knowledge
of the Directors owned more than 5% of our Company’s issued share capital, had any interest
in any of our five largest customers in each year/period during the Track Record Period.
Our Relationship with Innovation New Material
Innovation New Material, a company controlled by Mr. Cui and thus a connected person
of our Company, was our largest customer in 2023, 2024 and the five months ended May 31,
2025. Innovation New Material is a global leading aluminum alloy producer, recognized as the
largest seller of aluminum alloy round ingots. It specializes in the downstream of the aluminum
industry chain, focuses on the research, development, production and processing of aluminum
alloys and products, and provides comprehensive solutions for aluminum alloy processing. The
products of Innovation New Material are widely used in 3C electronics, lightweight
automobiles, renewable energy industry, transport industry, industrial materials industry and
construction industry. Innovation New Material’s business presence covers both domestic and
overseas markets, including Vietnam and Mexico. It has been on Apple’s supplier list since
2014. After processing, its products were further sold to customers including Microsoft,
Xiaomi, HP , Google, BYD, Li Auto, NIO, BMW, Audi, Mercedes-Benz and Nissan. During the
year ended December 31, 2023 and 2024 and three months ended March 31, 2025, it generated
revenue of approximately RMB72,844 million, RMB80,942 million and RMB19,164 million,
respectively, and net profit of approximately RMB958 million, RMB1,005 million, and
RMB205 million, respectively. As of March 31, 2025, the total assets of Innovation New
Material was approximately RMB26,910 million.
Our revenue from Innovation New Material in 2022, 2023, 2024 and the five months
ended May 31, 2025 amounted to RMB0.2 million, RMB10,891.8 million, RMB11,608.9
million and RMB4,315.9 million, respectively, and accounted for 0.0%, 78.8%, 76.6% and
59.8% of our total revenue for the same respective periods. The sales of liquid aluminum to
Innovation New Material and its subsidiaries are conducted in the ordinary and our usual
course of business. Our Directors confirm that the terms of such transactions, including the
pricing, delivery terms, risk transfer, quality assurance and dispute resolution terms, among
others, are determined at arm’s length negotiations and are no less favorable to our Group than
terms offered by independent third-party customers. In addition, as Innovation New Material
is an A-share listed company and is also subject to applicable PRC rules, regulations and
A-share listing rules, this status indirectly ensures that the terms for transactions between
Innovation New Material and us are fair and reasonable. Our Directors believe that the sales
of majority of our liquid aluminum by our Group to Innovation New Material and its
subsidiaries do not indicate any undue reliance by our Group on our Controlling Shareholders
or their close associates, and are beneficial to the Company and our Shareholders. See
“Relationship With Our Controlling Shareholders — Independence From Our Controlling
Shareholders — Operational Independence” for details.
BUSINESS
– 251 –


--- page 262 ---
Despite Innovation New Material being our largest customer in 2023, 2024 and the five
months ended May 31, 2025, we have independent access to customers. We sell to both our
connected person, namely Innovation New Material, and independent third-party customers,
primarily including trading companies and production companies. See “— Sales, Marketing
and Customer Service — Our Sales Network and Marketing Strategies” and “Relationship With
Our Controlling Shareholders — Independence From Our Controlling Shareholders —
Operational Independence” for details.
OUR SUPPLIERS
During the Track Record Period, our suppliers mainly consisted of suppliers of raw
materials such as bauxite, carbon anodes, coals, alumina and electricity. Purchases from our
five largest suppliers in each year/period during the Track Record Period amounted to
RMB4,349.1 million, RMB3,459.7 million, RMB3,928.4 million and RMB2,503.0 million,
respectively, and accounted for 42.2%, 36.0%, 39.9% and 41.8% of our total purchases for the
same respective periods. Purchases from our largest supplier in each year/period during the
Track Record Period amounted to RMB1,259.7 million, RMB914.0 million, RMB1,069.1
million and RMB984.6 million, respectively, and accounted for 12.2%, 9.5%, 10.9% and
16.4% of our total purchases for the same respective periods. See “Risk Factors — We procure
key raw materials, including bauxite, coal, carbon anodes and alumina from suppliers. If we
fail to obtain sufficient raw materials that can meet our quality standards, at reasonable prices
or at all, or if we fail to maintain relationships with major suppliers, our business, financial
condition and results of operation will be materially and adversely affected.” All of our five
largest suppliers in each year/period during the Track Record Period were raw material
suppliers and traders. We entered into certain supplier finance arrangements with banks during
the Track Record Period primarily due to their relatively low interest rates, which can reduce
our finance costs. See “Financial Information — Description of Major Components of Our
Results of Operations — Finance Costs.”
The following table sets forth the details of our five largest suppliers in each year/period
during the Track Record Period by purchase amount for the respective periods:
Y ear ended December 31, 2022
No. Suppliers Background Location
Product
Provided Principal Business
Purchase
Amount
%o f
Total
Purchase
Y ear of
Commencement of
Business
Relationship
Credit
Term
Payment
Method
(RMB in million)
1 /H1118/H1118Supplier A A company listed on
the Hong Kong Stock
Exchange with
revenue of
approximately
RMB156,168.7
million in 2024
China Alumina Production and sales
of alumina, bauxite,
aluminum ingots
1,259.7 12.2% 2021 Prepayment Bank transfer
or bank
acceptance
BUSINESS
– 252 –


--- page 263 ---
Y ear ended December 31, 2022
No. Suppliers Background Location
Product
Provided Principal Business
Purchase
Amount
%o f
Total
Purchase
Y ear of
Commencement of
Business
Relationship
Credit
Term
Payment
Method
(RMB in million)
2 /H1118/H1118Shandong
Suotong
A private company with
a registered capital of
RMB691.6 million
China Carbon
anodes
Production and sales
of carbon anodes
1,093.0 10.6% 2019 60 days Bank transfer
3 /H1118/H1118Supplier B A private company with
a registered capital of
RMB17,563.6 million
China Electricity Electricity supply and
technical services
755.7 7.3% 2018 Prepayment Bank transfer
4 /H1118/H1118Supplier C A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB57,819.3 million
in 2024
China Coals Sales of electricity
and coals
655.7 6.4% 2019 Prepayment Bank transfer
5 /H1118/H1118Supplier D A private company Indonesia Bauxite Production and sales
of bauxite
585.0 5.7% 2020 Prepayment Bank transfer
Total 4,349.1 42.2%
Y ear ended December 31, 2023
No. Suppliers Background Location
Product
Provided Principal Business
Purchase
Amount
%o f
Total
Purchase
Y ear of
Commencement of
Business
Relationship
Credit
Term
Payment
Method
(RMB in million)
1 /H1118/H1118Shandong
Suotong
A private company with
a registered capital of
RMB691.6 million
China Carbon
anodes
Production and sales
of carbon anodes
914.0 9.5% 2019 60 days Bank transfer
2 /H1118/H1118Supplier C A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB57,819.3 million
in 2024
China Coals Sales of electricity
and coals
853.4 8.9% 2019 Prepayment Bank transfer
3 /H1118/H1118Supplier B A private company with
a registered capital of
RMB17,563.6 million
China Electricity Electricity supply and
technical services
758.6 7.9% 2018 Prepayment Bank transfer
4 /H1118/H1118Supplier E A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB366,670.6
million in 2024
China Bauxite Conglomerate 475.2 4.9% 2019 Prepayment Bank transfer
5 /H1118/H1118Supplier D A private company Indonesia Bauxite Production and sales
of bauxite
458.5 4.8% 2020 Prepayment Bank transfer
Total 3,459.7 36.0%
BUSINESS
– 253 –


--- page 264 ---
Y ear ended December 31, 2024
No. Suppliers Background Location
Product
Provided Principal Business
Purchase
Amount
%o f
Total
Purchase
Y ear of
Commencement of
Business
Relationship
Credit
Term
Payment
Method
(RMB in
million)
1 /H1118/H1118Supplier C A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB57,819.3 million
in 2024
China Coals Sales of electricity
and coals
1,069.1 10.9% 2019 Prepayment Bank transfer
2 /H1118/H1118Supplier F A private company with
a registered capital of
USD51.2 million
China Bauxite Manufacturing of
nonferrous metal
alloy
900.2 9.2% 2024 Prepayment Bank transfer
3 /H1118/H1118Supplier
G
(1)
A private company with
a registered capital of
RMB8.0 million
Switzerland Bauxite Mining of bauxite and
other primary
aluminum products
781.8 7.9% 2023 Prepayment Bank transfer
4 /H1118/H1118Shandong
Suotong
A private company with
a registered capital of
RMB691.6 million
China Carbon
anodes
Production and sales
of carbon anodes
623.3 6.3% 2019 60 days Bank transfer
5 /H1118/H1118Supplier B A private company with
a registered capital of
RMB17,563.6 million
China Electricity Electricity supply and
technical services
554.0 5.6% 2018 Prepayment Bank transfer
Total 3,928.4 39.9%
Five months ended May 31, 2025
No. Suppliers Background Location
Product
Provided Principal Business
Purchase
Amount
%o f
Total
Purchase
Y ear of
Commencement of
Business
Relationship
Credit
Term
Payment
Method
(RMB in
million)
1 /H1118/H1118Supplier F A private company with
a registered capital of
USD51.2 million
China Bauxite Manufacturing of
nonferrous metal
alloy
984.6 16.4 2024 Prepayment Bank transfer
2 /H1118/H1118Supplier H A private company with
a share capital of
USD4,000,000
Singapore Bauxite Sales of metal and
mineral
438.6 7.3 2025 Prepayment Bank transfer
BUSINESS
– 254 –


--- page 265 ---
Five months ended May 31, 2025
No. Suppliers Background Location
Product
Provided Principal Business
Purchase
Amount
%o f
Total
Purchase
Y ear of
Commencement of
Business
Relationship
Credit
Term
Payment
Method
(RMB in
million)
3 /H1118Supplier I A private company with
a registered capital of
RMB105 million
China Bauxite Conglomerate
providing
transportation
services and
engaging in the
trading of mineral
436.3 7.3 2024 Prepayment Bank transfer
or bank
acceptance
4 /H1118/H1118Supplier E A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB366,670.6
million in 2024
China Bauxite Conglomerate 333.0 5.6 2019 Prepayment Bank transfer
5 /H1118/H1118Supplier J A company listed on
the Shanghai Stock
Exchange with
revenue of
approximately
RMB101,828 million
in 2024
China Bauxite Provision of power
transmission and
transformation
services, new
energy services as
well as mining and
sales of mineral
310.5 5.2 2022 Prepayment Bank transfer
Total 2,503.0 41.8
Note:
(1) We became acquainted with Supplier G through the introduction by a private company in the aluminum
industry in China, to which Supplier G is a subsidiary. Supplier G invests in bauxite ore in Guinea. As a global
bauxite supplier, Supplier G utilized its industry connections including its relationship with its parent company
to reach out to and connect with downstream customers, including us. It became one of our five largest
suppliers in 2024, primarily because it supplied high-quality bauxite at competitive prices.
For salient terms of the procurement agreements with our suppliers, see “— Procurement
and Supply Chain Management — Procurement.”
To the best of our knowledge, except for Shandong Suotong, our related party, none of our
Directors, their associates or any shareholders of our Company, who or which to the knowledge
of the Directors owned more than 5% of our Company’s issued share capital, had any interest
in any of our five largest suppliers in each year/period during the Track Record Period.
BUSINESS
– 255 –


--- page 266 ---
OVERLAPPING OF CUSTOMERS AND SUPPLIERS
During the Track Record Period, some of our top five customers in each year/period
during the Track Record Period was also our suppliers, and some of our top five suppliers in
each year/period during the Track Record Period was also our customers. Specifically,
customer C, one of our five largest customers in 2022, 2023 and the five months ended May
31, 2025, was our supplier during the Track Record Period and one of our five largest suppliers,
Supplier E, in terms of purchase amounts in 2023 and the five months ended May 31, 2025.
Innovation New Material, our largest customer in 2023, 2024 and the five months ended May
31, 2025, was our supplier in 2024 and the five months ended May 31, 2025. Supplier A, one
of our five largest suppliers in 2022, was our customer in 2022. These overlapping roles arise
because both us and the overlapping customer-suppliers sold commodities critical to each
other’s operations. With the exception of Customer F, we procured products of differing types
from the products we sold to these customer-suppliers. According to CRU, it is an industry
norm for an aluminum industry group like ours to engage in the buying and selling of different
commodities with the same customer-supplier. This is because the industry players trade
different products that are largely exchanged in the market to best meet their distinctive needs.
To a lesser extent, we sold and purchased the same type of products, namely alumina, differing
in grade and characteristics, with Customer F, who was our supplier in 2024. According to
CRU, it is an industry norm for an aluminum industry group like ours to purchase alumina
products from a supplier who also acquires alumina products from that same aluminum
industry group.
Customer C, one of our five largest customers in 2022, 2023 and the five months ended
May 31, 2025, was our supplier during the Track Record Period and one of our five largest
suppliers, Supplier E, in terms of purchase amounts in 2023 and the five months ended May
31, 2025. Customer C/Supplier E is a conglomerate whose business includes the procurement
and supply of commodities. As our customer, Customer C/Supplier E mainly purchased
aluminum ingots from us during the Track Record Period. As our supplier, Customer
C/Supplier E mainly supplied us with bauxite during the Track Record Period.
The table below sets forth the revenue and purchase in absolute amount and as a
percentage to the total revenue and total purchase for transactions between our Group and
Customer C/Supplier E during the Track Record Period:
Y ear/Period Revenue
Percentage to
total revenue Purchases
Percentage
to total
purchase
(RMB in
million) (%)
(RMB in
million) (%)
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118925.0 6.9 226.5 2.2
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130.2 0.9 475.2 4.9
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884.6 0.6 410.6 4.2
Five months ended May 31,
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118692.1 9.6 333.0 5.6
BUSINESS
– 256 –


--- page 267 ---
Innovation New Material, our largest customer in 2023, 2024 and the five months ended
May 31, 2025, was our supplier in 2024 and the five months ended May 31, 2025. During the
Track Record Period, Innovation New Material mainly purchased electrolytic aluminum, in
particular liquid aluminum, from us for its aluminum alloy manufacturing. For details, see
“Relationship with Our Controlling Shareholders — Independence from Our Controlling
Shareholders — Operational Independence — Sales of Electrolytic Aluminum in Liquid Form
to Innovation New Material.” As our supplier, it mainly supplied us with equipment
components and accessories.
The table below sets forth the revenue and purchase in absolute amount and as a
percentage to the total revenue and cost of sales for transactions between our Group and
Innovation New Material during the Track Record Period:
Y ear/Period Revenue
Percentage to
total revenue Purchases
Percentage
to total
purchase
(RMB in
million) (%)
(RMB in
million) (%)
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.2 0.0 \ \
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,891.8 78.8 \ \
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,608.9 76.6 0.9 0.0
Five months ended May 31,
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,315.9 59.8 0.9 0.0
Customer F, one of our five largest customers in 2023, 2024 and the five months ended
May 31, 2025, was our supplier in 2024 and the five months ended May 31, 2025. Customer
F is a producer of nonferrous metal, including alumina and electrolytic aluminum. As our
customer, Customer F mainly purchased alumina from us for its aluminum smelting during the
Track Record Period. As our supplier, Customer F mainly supplied us with alumina with
relatively higher concentration of lithium salt during the Track Record Period. This
arrangement with Customer F was not a bundled or back-to-back trading arrangement, but
allowed us to ensure a stable supply of high-lithium salt alumina which enhances our aluminum
smelting process by lowering melting points, improving electrical conductivity, ensuring
thermal stability and prolonging the useful life of our electrolyzers. According to CRU, it is
an industry norm for an aluminum industry group like ours to buy alumina products from a
supplier who also acquires alumina products from that same aluminum industry group, given
the nature of alumina as an exchanged commodity. An aluminum industry group may require
alumina of specific grades and characteristics for its aluminum smelting operation, differing
from the alumina it produces and sells.
BUSINESS
– 257 –


--- page 268 ---
The table below sets forth the revenue and purchase in absolute amount and as a
percentage to the total revenue and cost of sales for transactions between our Group and
Customer F during the Track Record Period:
Y ear/Period Revenue
Percentage to
total revenue Purchases
Percentage
to total
purchase
(RMB in
million) (%)
(RMB in
million) (%)
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849.2 0.4 \ \
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118560.7 4.1 \ \
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118582.9 3.8 186.7 1.9
Five months ended May 31,
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118168.1 2.3 158.8 2.7
Supplier A, one of our five largest suppliers in 2022, was our customer in 2022. Supplier
A is an alumina producer engaged in the production, processing and sales of alumina, bauxite,
aluminum ingots. As our supplier, Supplier A mainly supplied us with alumina during the Track
Record Period. As our customer, Supplier A mainly purchased aluminum ingots from us during
the Track Record Period.
The table below sets forth the revenue and purchase in absolute amount and as a
percentage to the total revenue and total purchase for transactions between our Group and
Supplier A during the Track Record Period:
Y ear/Period Revenue
Percentage to
total revenue Purchases
Percentage
to total
purchase
(RMB in
million) (%)
(RMB in
million) (%)
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118328.9 2.4 1,259.7 12.2
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118\ \ 304.9 3.2
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118\ \ 169.2 1.7
Five months ended May 31,
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118\\\\
In addition to the above, there were 32 overlapping customer-suppliers during the Track
Record Period.
BUSINESS
– 258 –


--- page 269 ---
The table below sets forth the revenue and purchase in absolute amount and as a
percentage to the total revenue and cost of sales for transactions between our Group and other
overlapping customers and suppliers during the Track Record Period:
Y ear/Period Revenue
Percentage to
total revenue Purchases
Percentage to
total cost of
sales
(RMB’000) (%) (RMB’000) (%)
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667.0 4.9 1,460.1 14.2
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137.7 1.0 1,531.3 15.9
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118440.2 2.9 1,367.7 13.9
Five months ended May 31,
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118176.0 2.4 1,131.7 18.9
Our sales and purchases with these customer-suppliers were not inter-conditional with
each other and were generally of different types of products. As our customers, these
customer-suppliers mainly purchased scraps, aluminum ingots and electricity from us. As our
suppliers, these customer-suppliers mainly supplied us with equipment components and
accessories, coals and logistics services. All of our sales to and purchases from these
customer-suppliers were conducted in the ordinary course of business under normal
commercial terms and on an arm’s length basis. The terms with these customer-suppliers were
generally comparable to those with other customers and suppliers. There was no instance of
set-off trade receivables from these customer-suppliers or trade payables to us during the Track
Record Period. Saved as disclosed above, to the best of our knowledge, none of our five largest
customers in each year/period during the Track Record Period was a supplier of us and none
of our five largest suppliers in each year/period of the Track Record Period was a customer of
us.
INFORMATION TECHNOLOGY
Information technology systems are essential to competitiveness and efficient operations.
We have instituted a systematic information technology system covering all material aspects of
our operations, including research and development, raw material procurement, inventory
management, power supply, production, sales and logistics. Our information technology team
is responsible for developing, upgrading and maintaining information technology (“ IT”)
systems and customizing them to meet our business needs.
Our IT systems primarily consist of the Commodity Management System and the
Enterprise resource planning (the “ ERP”) system. These two systems work in tandem to realize
the information management of all raw materials, products and production processes. This
includes (i) the collection of quality and testing data for raw materials such as coal and alumina
upon their entry into the factory; (ii) the collection of composition testing data for liquid
aluminum or aluminum ingots; and (iii) the transmission of information related to procurement,
inventory and sales. The flow of this data is collected, organized, transmitted and managed
within the Commodity Management System and the ERP system.
BUSINESS
– 259 –


--- page 270 ---
During the Track Record Period and up to the Latest Practicable Date, we had not
experienced any information technology system failure or downtime that had a material
adverse effect on our business operations.
DATA PRIV ACY AND PROTECTION
We have access to and collect certain demographic and transactional information from our
consumers in connection with our business and operations.
During the Track Record Period and up to the Latest Practicable Date, the data that we
collected and stored mainly included operational data on commodity and raw material
inspection and did not involve any personal data.
During the Track Record Period and up to the Latest Practicable Date, we had not
experienced any material violation of any mandatory requirements under applicable laws and
regulations in respect of the collection, storage, use and protection of personal data.
INTELLECTUAL PROPERTY
Intellectual property is fundamental to our success and competitiveness. As of the Latest
Practicable Date, we had 130 patents, 24 trademarks and four domain names in the PRC. For
details, see “Appendix IV — Statutory and General Information — Further Information About
Our Business — Intellectual Property Rights.”
We rely on a combination of patent, trademark, domain name and trade secret protection
laws in the PRC and other jurisdictions, as well as confidentiality procedures and contractual
provisions, to protect our intellectual property rights. We have implemented comprehensive
measures to protect our intellectual properties. For example, we timely apply for trademarks
and patents, conduct employee training on intellectual property awareness and actively monitor
the market for infringements. Moreover, we have also implemented measures in place to
prevent infringement of intellectual properties of other parties, such as conducting regular
audit and research on intellectual property.
We did not have any material disputes or any other pending legal proceedings of
intellectual property rights with third parties during the Track Record Period and up to the
Latest Practicable Date. We believe that we have taken reasonable measures to prevent
infringement of our intellectual property rights.
COMPETITION
We primarily compete with a number of domestic and overseas companies focused on the
aluminum smelting, alumina refining and the sale of electrolytic aluminum and alumina and
other related types of products. According to CRU, the global consumption of electrolytic
aluminum is expected to further grow at a CAGR of 1.6% from 2025 to 2028. China’s annual
demand gap for electrolytic aluminum is expected to exceed one mt and last until 2034,
primarily due to an annual electrolytic aluminum production capacity cap of 45 mt imposed by
the MIIT.
BUSINESS
– 260 –


--- page 271 ---
Market participants compete based on their operational capabilities, production
infrastructure improvement and access to electricity as well as raw materials. According to
CRU, our aluminum smelter in Huolinguole, Inner Mongolia, was the fourth-largest production
base of electrolytic aluminum in terms of production output in 2024 in North China. We were
the twelfth-largest electrolytic aluminum producer in terms of production output in 2024 in
China, according to the same source. According to CRU, our ability to manage cash costs of
aluminum per ton was among the top 5% of all aluminum smelting companies in China and
competitive on a global scale, ranking among the top 30% in 2024 (comparing our cash costs
in 2024 to the industry average cash costs in China and on a global scale in 2024, respectively).
Leveraging our experience in the electrolytic alumina industry, our dedication in green
transition and our relatively lower cost of electricity compared to national average, we believe
we are able to keep seizing the potential in the target market through our access to electricity
and raw materials, quality green power aluminum and globalization strategies.
RISK MANAGEMENT AND INTERNAL CONTROL
We have put in place a set of internal control and risk management procedures to address
various potential operational, financial, legal and market risks identified in relation to our
operations. Our Board of Directors bears the primary responsibility for the effectiveness of our
risk management. Our risk management department leads our risk management and is
responsible for organizing and coordinating various departments in conducting compliance risk
management activities. We also periodically review these procedures to ensure their
effectiveness.
Compliance Risk Management
In order to effectively prevent and control compliance risks and to enhance the standard
of compliance management in accordance with the law, we have formulated stringent internal
compliance measures to clearly define the organizational structure and operational mechanism
of compliance management, and to ensure that our operations are in compliance with laws and
regulations as well as the requirements of relevant rules and systems.
Financial Risk Management
To ensure transparency and compliance in our financial activities, we employ external
audits and an internal authorization and approval system. We have established the Audit
Committee to review and supervise our financial reporting process and internal controls
system. For the qualifications and experience of the committee members of the Audit
Committee, see “Directors and Senior Management”. The Audit Committee is required to meet
with external audits at least twice a year. The management team, finance department and
external audits shall jointly discuss the issues and rectification suggestions raised by the
external audits.
BUSINESS
– 261 –


--- page 272 ---
In July 2024, we engaged an independent internal control consultant to conduct general
internal control review. To prevent re-occurrence of non-compliant bill discounting in the
future, we have adopted enhanced internal control measures as recommended by the internal
control consultant. We have established Management System for the Use of Bank Acceptance
Bills (), guiding our procedures of the issuance, daily management,
transfer and discounting of bank acceptance bills. Since the implementation of the enhanced
internal control measures to the date of this submission, through reviewing the revised bill
management policy, there are no further deficiencies in design aspect of internal control in bill
management. See “— Legal Proceedings and Compliance Matters — Non-compliant Bill
Discounting.”
Anti-fraud, Anti-corruption and Anti-bribery Risk Management
We are committed to fostering a corporate culture of integrity, honesty and
incorruptibility. We have implemented a series of policies against fraud, bribery, corruption and
money laundering, including the Anti-Fraud, Anti-Bribery, Anti-Corruption Reporting and
Whistleblower Protection Policy () and
the Anti-Money Laundering Management Policy (). These policies
provide clear guidelines for the prevention, reporting, investigation and penalization of
fraudulent activities.
We have maintained a whistleblower mechanism for employees to anonymously report
any incidents of fraud, bribery and corruption. Our whistleblower mechanism provides
reporting channels such as reporting hotline, email and suggestion mailboxes, encouraging the
internal report of suspicious activities. In addition, auditors regularly conduct inspections for
bribery and corruption fraud, promptly identifying potential fraudulent situations. See
“— Environmental, Social and Corporate Governance — Measures to Address ESG Risks —
Anti-fraud, Anti-corruption, Anti-bribery and Anti-money Laundering.”
Operational Risk Management
We convene regular meetings both within departments and inter-departmentally to
analyze our business operations and our finance department verifies the operational data
through data reconciliation and inventory checks, facilitating timely information updates.
Moreover, we emphasize the health and safety of our employees by establishing a
comprehensive production safety management system, implementing safety assurance
measures and continuously optimizing the conditions for safe production to create a healthy
and safe working environment. See “— Environmental, Social and Corporate Governance —
Measures to Address ESG Risks- Health and Safety.”
BUSINESS
– 262 –


--- page 273 ---
EMPLOYEES
As of May 31, 2025, we had 3,559 full-time employees primarily located in Huolinguole,
Inner Mongolia and Binzhou, Shandong Province. The following table sets forth a breakdown
of our employees by business function as of the same date:
Business Function
Number of
Employees Percent (%)
Aluminum Smelting /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,252 35.2
Alumina Refining /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,006 28.3
Power Plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118806 22.6
Sales, Marketing and Customer Service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844 1.2
Quality Control /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120 3.4
Administrative /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118331 9.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,559 100.0
The following table sets forth a breakdown of our employees by gender as of May 31,
2025:
Gender
Number of
Employees Percent (%)
Male /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,155 88.7
Female /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/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 11.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,578 100.0
The following table sets forth a breakdown of our employees by age as of May 31, 2025:
Age
Number of
Employees Percent (%)
Below 30 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118817 23.0
30-40 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,460 46.0
Over 40 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,102 31.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,559 100.0
We adhere to the principles of openness, justice and fairness to attract and select
outstanding talents. We combine internal promotions with external recruitments to hire
candidates who meet the requirements.
BUSINESS
– 263 –


--- page 274 ---
In terms of external recruitment, we conduct recruitment through written examinations
and interviews tailored to the requirement of different positions, ensuring that the most suitable
candidates are selected. For internal promotion, we fully respect the opinions of both the
employees and their departments. Through recommendations, competitive applications and
various other methods, we support employees in trying out different positions, fully tapping
into and leveraging their potential.
We respect the career planning of employees and offer a variety of career development
paths, including vertical promotion and horizontal job rotation. With a flat management
structure, we support employees in enhancing their professional and management skills,
building a bridge for personal growth and career advancement.
We are committed to helping employees enhance their work skills by providing a variety
of training programs. We organize onboarding training for new employees, introducing our
development vision and ensuring that new employees fully understand our ESG-related
policies, requirements and actions. We offer a diverse range of job-related training for all
employees, covering areas such as occupational safety and health, sustainable development and
essential skills for their positions. As of May 31, 2025, the total training hours accumulated by
our employees reached 127,595 hours.
Labor unions have been established to protect our employees’ rights, encourage employee
participation in management decisions and assist in mediating disputes between us and union
members, which in turn help facilitate our success. We maintained a good relationship with our
employees and did not have any material labor dispute during the Track Record Period.
We strictly adhere to the Labor Law of the People’s Republic of China, the Provisions on
Prohibiting of Child Labor, the Law of the People’s Republic of China on the Protection of
Rights and Interests of Women, as well as other relevant laws and regulations at the national
and regional levels, ensuring comprehensive compliance in all labor practices. We support
policies such as the Universal Declaration of Human Rights, the International Covenant on
Human Right and the Anti-Modern Slavery and Anti-Human Trafficking Policy, and are
committed to safeguarding the rights and interests of employees.
INSURANCE
We maintain insurance coverage over our daily operations. Our principal insurance
policies primarily include pension insurance, medical insurance, unemployment insurance,
employment injury insurance and employer’s liability insurance, liability insurance of safe
production, all-risk installation insurance and property insurance, which we believe have
covered major risks in our daily operations. We do not maintain certain policies that are not
available in the locations where we operate, or that are not generally required by laws.
BUSINESS
– 264 –


--- page 275 ---
We believe that our insurance coverage is adequate for our business and in line with
general market practice. We will continue to review and assess our risk portfolio and make
necessary and appropriate adjustments to our insurance plans to align with our needs and with
industry practice. During the Track Record Period, we did not make any material insurance
claims in relation to our business.
PROPERTIES
Our business operations are substantially located in Huolinguole, Inner Mongolia and
Binzhou, Shandong Province in China. We own properties and lease properties in China. As of
May 31, 2025, we had no single property with a carrying amount of 15% or more of our
combined total assets. According to section 6(2) of the Companies Ordinance (Exemption of
Companies and Prospectuses from Compliance with Provisions) Notice, this prospectus is
exempt from the requirements of section 342(1)(b) of the Companies (Winding up and
Miscellaneous Provisions) Ordinance to include all interests in land or buildings in a valuation
report as described under paragraph 34(2) of the Third Schedule to the Companies (Winding
up and Miscellaneous Provisions) Ordinance.
Owned Properties
As of the Latest Practicable Date, we owned 54 parcels of land in China with an aggregate
gross site area of approximately 7,710,095 sq.m. As of the same date, we owned 244 buildings
located in the PRC, with an aggregate gross floor area of approximately 902,365 sq.m. These
parcels of land and buildings are mainly used as production, storage and office. As of the Latest
Practicable Date, we had obtained the real estate title certificates for all of our owned parcels
of land.
Leased Properties
As of the Latest Practicable Date, we leased three properties in the PRC with an aggregate
gross floor area of approximately 3,125,410 sq.m., which were primarily used for power
generation. The leases have terms ranging from one to 20 years. As of the Latest Practicable
Date, we had obtained valid title certificates from the relevant landlords of all the properties.
LICENSES, PERMITS AND APPROV ALS
We are required to obtain a number of licenses, permits, approvals and certificates for our
business. As advised by our PRC Legal Advisor, except as otherwise disclosed in this
prospectus, we had duly obtained the requisite licenses, permits, approvals and certificates
from applicable authorities which are material to our operations, and such licenses, permits,
approvals and certificates are valid and subsisting during the Track Record Period and up to
the Latest Practicable Date. See ”— Legal Proceedings and Compliance Matters — Approval
for Projects in Relation to Thermal Electricity Generators” and “Risk Factors — Our business
operation and project construction are subject to various permits, licenses, approvals and/or
qualifications and the loss of or failure to obtain or renew any or all of these permits, licenses,
BUSINESS
– 265 –


--- page 276 ---
approvals and/or qualifications may materially and adversely affect our business, financial
condition and results of operations.” As advised by our PRC Legal Advisor, there is no
substantial legal impediment for us to renew our licenses which are expiring in 2025, provided
that no significant adverse changes in our production and operations.
Meanwhile, the Company has obtained the relevant government approvals and permits for
the construction of its production lines. As advised by our PRC Legal Advisor, these approvals
and permits are not the licenses and certificates required for the Company’s business
operations.
The following table sets forth details of the material licenses, approvals and permits
currently held by us:
Holder License/Permit License/Permit No Issuing Date Expiry Date
Inner Mongolia Chuangyuan /H1118/H1118/H1118Pollutant Discharge
Permit
911505815973313970001P September 14,
2024
September 13,
2029
Shandong Chuangyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Work Safety License (Lu)FM No[2023]00-0110 October 13,
2023
October 7, 2026
Shandong Chuangyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Work Safety License (Lu)FM No[2022]00-0049 October 8, 2023 December 27,
2025
Shandong Chuangyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Pollutant Discharge
Permit
91371623MA3NJE136L001V September 19,
2024
April 8, 2029
Shandong Chuangyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Pollutant Discharge
Permit
91371623MA3NJE136L002P September 19,
2024
September 18,
2029
Shandong Chuangyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Electric Power
Business Licenses
1910625-01301 January 9, 2025 January 8, 2045
Chuangyuan Alloy /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Pollutant Discharge
Permit
91150581MA0Q50LL3A001V July 25, 2022 July 24, 2027
Chuangyuan Resources
Recycling /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Pollutant Discharge
Permit
91150581MA0PYDRN0C001V April 8, 2025 April 7, 2030
Chuangyuan Resources
Recycling /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hazardous Waste
Operating Permit
1505810204 December 18,
2023
December 17,
2028
Chuangyuan New Material /H1118/H1118/H1118/H1118/H1118Pollutant Discharge
Permit
91150581MA7G4TRW9C001P August 27,
2024
August 26,
2029
Inner Mongolia Chuangyuan /H1118/H1118/H1118Electric Power
Business Licenses
1020525-01274 February 27,
2025
February 26,
2045
BUSINESS
– 266 –


--- page 277 ---
LEGAL PROCEEDINGS AND COMPLIANCE MATTERS
During the Track Record Period and up to the Latest Practicable Date, we had not been
and were not a party to any material legal, arbitral or administrative proceedings, and we were
not aware of any pending or threatened legal, arbitral or administrative proceedings against us
or our Directors that could, individually or in the aggregate, have a material adverse effect on
our business, financial condition and results of operations.
During the Track Record Period and up to the Latest Practicable Date, we had not been
and were not involved in any material non-compliance incidents that led to fines, enforcement
actions or other penalties that could, individually or in the aggregate, have a material adverse
effect on our business, financial condition or results of operations. Our Directors are of the
view that we had complied, in all material respects, with all relevant laws and regulations in
the jurisdictions we operate in during the Track Record Period and up to the Latest Practicable
Date. Except for Inner Mongolia Chuangyuan Industry and Trade Co., Ltd. ( ʫႆ̚௴๕ʈ൱
ʮ̡), our former-subsidiaries which were deregistered during the Track Record Period
were not involved in any non-compliance incidents. See Note 43 of the Accountants’ Report in
Appendix I to this prospectus. Inner Mongolia Chuangyuan Industry and Trade Co., Ltd. had
entered into the non-compliant bill discounting in 2023 and had ceased all non-compliant bill
discounting since November 21, 2023. See “— Non-compliant Bill Discounting.”
Non-compliant Bill Discounting
Background
During the Track Record Period, some of our subsidiaries (the “ Bill Issuers ”) (1) entered
into several acceptance agreements with a commercial bank in the PRC (the “ Endorsing
Bank ”) and deposited margin with the Endorsing Bank based on the actual and genuine
underlying intragroup transactions. (2) The Endorsing Bank subsequently issued banker’s
acceptance to our other subsidiaries (the “ Bill Recipients ”). The Bills Recipients then (3a)
discounted the banker’s acceptance to other qualified banks to obtain cash for daily production
and operations; or (3b) transferred the banker’s acceptance to their suppliers for payment of the
procured goods and services. As advised by our PRC Legal Advisor, the situations in (3a) and
(3b) have been in compliance with applicable PRC laws and regulations.
In addition to the above steps to acquire short-term financing and improve cash flow, in
order to reduce finance cost and to expedite the discounting process, the Bills Recipients also
discounted part of the banker’s acceptance to non-bank institutions at a discount rate lower
than that required by qualified banks to obtain cash for daily production and operations, as
illustrated by step 3(c) in the dashed box of the below diagram. As advised by our PRC Legal
Advisor, the “discounter” of a commercial draft, including a banker’s acceptance, shall be a
legal person or any of its branch office that is legally established within the territory of the PRC
and has loan business qualification (the “ Discounter’s Qualification Requirement ”). As the
non-bank institutions mentioned above did not comply with the Discounter’s Qualification
Requirement, the bill discounting transactions to those non-bank institutions did not fully
BUSINESS
– 267 –


--- page 278 ---
comply with the Administrative Measures for Acceptance, Discount and Rediscount of
Commercial Drafts (the “ Non-compliant Bill Discounting ”). However, as advised by the PRC
Legal Advisor, the Discounter’s Qualification Requirement applies to the “discounters” of
commercial draft and does not apply to us, and there are no explicit PRC laws and regulations
to impose administrative or criminal liability on us for Non-compliant Bill Discounting that is
without the purpose to obtain funds by fraudulence. The diagram below sets out the general
mechanics of the bill financing, including the Non-compliant Bill Discounting:
1. Based on the relevant purchase
transaction(s), enter into bank acceptance
agreement(s) and deposit margin
Use the cash for daily
production and operations
Cash from
3a and 3c
3a. Transfer
cash
Bank Suppliers
3c. Transfer
banker’s acceptance
at a relatively lower
discount rate
3b. Transfer banker’s
acceptance for
payment of
the goods
3a. Discount
banker’s
acceptance at
a discount rate
3c. Transfer
 cash
4. Settle the bill with the
Endorsing Bank when it matures,
pay the remaining balance
2. Issue banker’s acceptance
Endorsing Bank
Non-bank
institutions
Members of the
Listco Group (“B”,
Bills Recipient)
Members of the
Listco Group
(“A” Bills Issuer)
Note:
The dashed lines represent flow of cash and the solid lines represent flow of banker’s acceptance.
Under the typical terms of such banker’s acceptance agreements, V A T invoices consistent
with purchase contracts must be presented to support the issuance of such banker’s acceptance.
In addition, initial deposits must be made with the endorsing banks in amounts of at least 50%
of the face amount of the banker’s acceptance to be issued as indicated by step 1 in the above
diagram. The terms of the banker’s acceptance were generally six months. The remaining
balance of the face amount must be repaid on or before the maturity date of the relevant
banker’s acceptance as indicated by step 4 in the above diagram. The Bill Issuers could not
settle the banker’s acceptance with the Endorsing Bank until the banker’s acceptance became
mature. The Non-compliant Bill Discounting is illustrated by step 3(c) in the above diagram
and any further actions of the non-bank institutions are not part of our Non-compliant Bill
Discounting activities.
BUSINESS
– 268 –


--- page 279 ---
We discounted the banker’s acceptance to non-bank institutions to (i) reduce finance
costs, as the discount rate for discounting banker’s acceptances at non-bank institutions is
typically lower than that required by commercial banks and lower discount rates yield higher
amount of cash received upon discounting; and (ii) expedite the process, as non-bank
institutions typically require less time for internal approvals than commercial banks, which
involve more layers of approval and extensive paperwork.
We are of the view, that the Non-compliant Bill Discounting is different from typical
non-compliance bill financing activities as mentioned in the footnote 1 of Chapter 1.2D of the
Guide, the main concern of which being that “a borrower obtains trade financing even if it is
not supported by actual underlying transactions”. The Non-compliant Bill Discounting is void
of such concern because we entered into valid bank acceptance agreements with the Endorsing
Bank and, as the Bill Issuers presented V A T invoices consistent with the purchase contracts of
the underlying transaction before any banker’s acceptance was issued, the banker’s acceptance
was supported by actual and genuine underlying transactions. Therefore, no fraudulent activity
was involved in the Non-compliant Bill Discounting transaction by our shareholders,
Directors, senior management or us. It is the lack of qualifications of the non-bank institutions
that led to the bill discounting transactions being not in full compliance with PRC laws and
regulations.
The last banker’s acceptance discounted with a non-financial institution was on
November 21, 2023 and we ceased to engage in the Non-compliant Bill Discounting as soon
as we became aware of the non-compliance nature of the situation. We have entirely ceased
Non-compliant Bill Discounting since November 21, 2023.
We entered into the Non-compliant Bill Discounting mainly due to the negligence of the
working personnel of the Finance Department who were unfamiliar with the relevant PRC rules
and regulations. The working personnel did not realize that the Non-compliant Bill
Discounting transactions were not fully in compliance with the PRC rules and regulations in
relation to the Discounter’s Qualification Requirement but were of the view that it was a
general practice across private enterprises in the PRC to enter into transaction of a similar
nature to (i) reduce finance costs and (ii) expedite the discounting process because the
discounting of such banker’s acceptance at non-bank institutions was less time-consuming than
at commercial banks. Our Directors or senior management were not involved in the
Non-compliant Bill Discounting.
BUSINESS
– 269 –


--- page 280 ---
No Material Financial Impacts
Y ear ended December 31/ As of December 31,
2022 2023 2024
(RMB in millions)
Key Financial Data
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/H111813,489.7 13,814.7 15,163.2
Cash, deposits and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,909.1 1,886.2 857.5
Unutilized banking facilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118850.5 4,470.9 8,171.2
Face value of the banker’s acceptance (including
those transferred to the bank and suppliers and
the Non-compliant Bill Discounting) /H1118/H1118/H1118/H1118/H1118/H1118/H11184,159.1 4,099.1 1,086.2
Key Financial Data on Non-compliant Bill
Discounting
Face value of the relevant banker’s acceptance /H1118/H1118 720.0 3,065.1 –
Total amount of relevant fund obtained
(1) /H1118/H1118/H1118/H1118/H1118346.7 1,306.5 –
Amount of interest potentially saved (2) /H1118/H1118/H1118/H1118/H1118/H1118/H11181.1 1.7 –
Notes:
(1) Calculated as the difference between (i) the face value of the banker’s acceptance net of the deposits
for issuing bills, and (ii) discount expenses, namely the amount discounted at the relevant discount rates.
(2) Calculated as the difference between, assuming the face value of the banker’s acceptance and the
discount period remain the same in both scenarios, (i) the discount expenses we were to incur if we
discounted the banker’s acceptance with the Endorsing Bank at its bank borrowing rate of 6.0%, and (ii)
the discount expenses we actually incurred for non-compliant bill discounting.
As indicated above, other than the Non-compliant Bill Discounting, we also transfer
and/or discounts the banker’s acceptance in compliant ways. The total amount of interest saved
from the Non-compliant Bill Discounting accounted for less than 0.5% of our net profit in 2022
and 2023, respectively. In addition, we have sufficient borrowings from banks and other
financial institutions, banking facilities, and sufficient cash and cash equivalents for our daily
business operations, which are far more than the total amount of cash obtained and total
amount of finance cost saved from the Non-compliant Bill Discounting. The total amount of
fund obtained from the Non-compliant Bill Discounting in 2022 and 2023 accounted for
approximately 1.8% and 7.0% of the total amount of our borrowing, unutilized banking
facilities and cash and cash equivalents as of December 30, 2022 and 2023, respectively.
Therefore, our financial situation would not be materially affected without the Non-compliant
Bill Discounting.
BUSINESS
– 270 –


--- page 281 ---
Confirmation on Non-compliant Bill Discounting
Confirmation from the Relevant PRC Government Authority. People’s Bank of China
(“PBOC”) is responsible for monitoring issuance and use of bills in the PRC. As confirmed by
our PRC Legal Advisor, Tongliao Central Sub-branch of PBOC (“Tongliao PBOC”) is the
competent and appropriate PRC governmental authority to supervise issuance and use of bills.
According to the written confirmations from Tongliao PBOC on October 31, 2024 and
November 6, 2024, we have not received any notice of investigation of inquiry during the
Track Record Period regarding the Non-compliant Bill Discounting from government
authorities.
Confirmation from the Relevant Endorsing Bank. The Endorsing Bank has confirmed
that, during the Track Record Period, (i) we have complied with all the requirements of the
bank acceptance agreements; and (ii) it has not incurred any loss as a result of overall use of
the bank acceptance bills, and there have been no disputes or controversies with our
shareholders, Directors, senior management and us in relation to overall use of the bank
acceptance bills.
Confirmation from the PRC Legal Advisor. Our PRC Legal Advisor confirmed that,
during the Track Record Period, (i) there is no express provision in the laws, rules and
regulations in the PRC which imposes administrative or criminal liability for Non-compliant
Bill Discounting that is without the purpose of obtaining funds by fraudulence; and (ii) the
relevant Endorsing Bank have not incurred any loss as a result of overall use of the bank
acceptance bills and there have been no disputes or controversies with our shareholders,
Directors, senior management and us with respect to overall use of the bank acceptance.
Rectification Measures
We have further adopted or plan to adopt the following measures to avoid the recurrence
of similar incidents in the future:
Our Training to Directors, Senior Management and Relevant Staff. In September 2024,
training was provided by our PRC Legal Advisor, to our Directors and senior management
covering (i) the introduction of bills and use of bills (including but not limited to bill
discounting); (ii) the relevant PRC laws and regulations; and (iii) case study of bill discounting
non-compliance. In September 2024, training was provided by our Hong Kong legal advisors,
to our Directors and senior management covering (a) the Listing Rules and legal requirements
in Hong Kong, in particular the respective duties and responsibilities of directors and senior
management of a listed company; (b) Hong Kong regulatory requirements on the non-
compliance and internal control; and (c) the Hong Kong regulatory requirements on
non-compliant bill financing.
BUSINESS
– 271 –


--- page 282 ---
Establishment of Regulatory Compliance Committee. We will, prior to our proposed
listing, establish a regulatory compliance committee, comprising independent non-executive
Directors with financial and accounting backgrounds, our chief financial officer and other staff
with strong financial and internal control expertise, to supervise our general compliance in
relation to financial matters, in particular to prevent re-occurrence of non-compliant bill
discounting.
Engagement of Professional Legal and Compliance Advisors. We undertake to appoint
legal advisors as to the laws of Hong Kong and the PRC, respectively, after our proposed listing
to advise on the laws and regulations of Hong Kong (in particular the requirements under the
Listing Rules) and the PRC, respectively. We will also appoint a compliance advisor to assist
us with compliance matters and issues in relation to the Listing Rules and seek external legal
advice where appropriate and necessary on the compliance matters after the proposed listing.
Engagement of Internal Control Consultant. In July 2024, we engaged an independent
internal control consultant to conduct general internal control review with reference to the
“Technical Bulletin — AA TB 1 (Revised) Assistance Options to New Applicants and Sponsors
in connection with Due Diligence Obligation, including Internal Controls over Financing
Reporting”. We have adopted enhanced internal control measures as recommended by the
internal control consultant to prevent re-occurrence of similar incidents in the future. Since the
implementation of the enhanced internal control measures to the date of this submission,
through reviewing the revised bill management policy, there are no further deficiencies in
design aspect of internal control in bill management. The internal control consultant conducted
a follow-up internal control review in September 2024 based on selected samples on bill
discounting, and no further internal control deficiencies were identified.
Periodical Reviews by Internal Audit Department of the Company. Our internal audit
department will conduct periodical reviews and assessment of our financial conditions as an
additional supervision.
Based on the above, we are of the view that the Non-compliant Bill Discounting will not
affect the suitability of our Group’s listing under Rule 8.04 of the Listing Rules or the
suitability of our Directors under Rule 3.08 and 3.09 of the Listing Rules for the proposed
listing.
Based on the due diligence conducted by the Joint Sponsors, nothing has come to the Joint
Sponsors’ attention that would reasonably cause them to disagree with the Directors’ view
above that the Non-compliant Bill Discounting will not affect the suitability of the Group’s
listing under Rule 8.04 of the Listing Rules or the suitability of the Directors under Rule 3.08
and 3.09 of the Listing Rules for the proposed listing.
BUSINESS
– 272 –


--- page 283 ---
Incident Relating to the Former Director of the Subsidiary
The Judgment
According to a court judgment made in 2016 (the “ Judgment ”), Inner Mongolia
Chuangyuan, a wholly-owned subsidiary of the Company (the “ Subsidiary ”), and the Former
Director of the Subsidiary were convicted of bribing a PRC government officer to coordinate
and facilitate regulatory approval for the Subsidiary’s electrolytic aluminum project. The
Former Director of the Subsidiary claimed RMB1,000,000 from its then controlling
shareholder in his capacity as the then person-in-charge of the Subsidiary without disclosing
his actual intended use of the money, on the grounds that the Subsidiary had insufficient project
funds. Upon the Subsidiary receiving the RMB1,000,000, the Former Director of the
Subsidiary withdrew the funds in the name of personal borrowings from the Subsidiary, out of
which RMB200,000 was paid to the government officer and the remaining RMB800,000 was
returned to the Subsidiary. Such withdrawal of fund from the Subsidiary by the Former
Director of the Subsidiary did not obtain any approval from the Subsidiary or its then
controlling shareholder. As a result, the Former Director of the Subsidiary was convicted of the
criminal offence of organizational bribery and sentenced to six months’ imprisonment with one
year’s probation, and as the Former Director of the Subsidiary committed bribery in the
capacity of the representative of the Subsidiary, the Subsidiary was convicted of the criminal
offence of organizational bribery and imposed with a fine of RMB100,000 (the “ Incident ”).
Other than the Former Director of the Subsidiary, no other person of the Subsidiary was
charged with any offence relating to the Incident.
As of the Latest Practicable Date, to the best knowledge of our Company, none of the
current Controlling Shareholders, Directors or senior management of our Company was
involved in the Incident, and the Incident did not and will not have any material adverse effect
on the business, financial condition or results of operation of our Group. As of the Latest
Practicable Date and to the best knowledge of our Company, Innovation Group and its
subsidiaries have not been involved in any previous incidents of bribery.
As advised by Shandong Tianjian Law Firm, the litigation counsel who participated in the
defence during court proceedings related to the Incident (the “ PRC Litigation Counsel ”), as
the Former Director of the Subsidiary committed the act in his capacity as the representative
of the Subsidiary, both the Former Director of the Subsidiary and the Subsidiary were
convicted of the criminal offence of organizational bribery. As advised by the PRC Litigation
Counsel, the court in the Judgement imposed a lenient penalty in accordance with applicable
laws, based on the following facts and circumstances: i) the bribery involved in the Incident
was primarily for expedition of regulatory approval process for the Subsidiary, characterized
by a low level of subjective malice, ii) the amount of money involved marginally reached the
threshold for a criminal case, iii) both the Subsidiary and the Former Director of the Subsidiary
actively cooperated in the investigation related to the Incident, and iv) the offence was
relatively minor under PRC laws which did not cause serious consequences to the society or
substantial economic losses to relevant entities and individuals.
BUSINESS
– 273 –


--- page 284 ---
Rectification Measures and Subsequent Arrangements
Our Group had proactively taken rectification measures (see below for details) after
becoming aware of the Incident. On November 30, 2015, the Subsidiary recompleted the
project filing procedures in a legal and compliant manner. As advised by our PRC Legal
Adviser, the Subsidiary has obtained all government approvals and permits necessary for
investment and construction of the project in compliance with applicable PRC laws and
regulations. Therefore, the Incident did not and will not have any material adverse effect on the
business development and the legality of licenses of our Group.
After becoming aware of the Incident and realizing that the incident was attributable to
the Former Director of the Subsidiary’s lack of compliance awareness, our Group started to
consider new management candidates to replace the Former Director of the Subsidiary. The
new management joined the Subsidiary in November 2016 as the general manager to replace
the Former Director of the Subsidiary to take charge of the production, development and
operation management of the Subsidiary. To ensure a smooth management transition and as an
interim arrangement during the crucial development phase of the Subsidiary in 2016, the
Former Director of the Subsidiary, as a minority shareholder of the Subsidiary, was permitted
to maintain a non-executive role in the board of the Subsidiary. This decision was intended to
support the new management in quickly familiarizing themselves with the operations of the
Subsidiary and ensure a seamless transition. In the meantime, the minority equity interest of
the Former Director of the Subsidiary in the Subsidiary has been gradually diluted to nominal
percentage in December 2016 and he no longer held any beneficial equity interest in the
Subsidiary since April 2017. After formation of the new board of directors of the Subsidiary
in May 2017 and up to the retirement of the Former Director of the Subsidiary in December
2020, the board of directors of the Subsidiary had consistently comprised not less than five
members which was responsible for its overall management and decision-making. According
to the articles of association of the Subsidiary, the resolutions of the board of directors shall
be passed by a simple majority of the directors. Therefore, during this period, the Former
Director of the Subsidiary only participated in the decision-making of the board of directors in
a non-executive role and had no personal decision-making power over the operation and
management of the Subsidiary. With new management and enhanced corporate governance
mechanisms in place, the Subsidiary believes that the Former Director of the Subsidiary’s
continued service in a non-executive capacity would not impair its overall management and
development in a compliant manner. In November 2018, through a series of equity transfer
arrangements, the Subsidiary was held as to 49% by the Former Director of the Subsidiary as
proxy for Innovation Group. To the best knowledge of the Company, the Former Director of
the Subsidiary was following instructions from Innovation Group as proxy during the period
of the shareholding proxy arrangement. The shareholding proxy arrangement conferred no
actual decision-making power or beneficial interests of Innovation Group on the Former
Director of the Subsidiary, and was mainly due to the administrative convenience as certain
corporate procedures required physical presence of the Former Director of the Subsidiary in
Inner Mongolia, where the Subsidiary operated. Such shareholding proxy arrangement by the
Former Director of the Subsidiary was eventually terminated in December 2020 and the Former
Director of the Subsidiary did not hold any equity interests in our Group since then.
BUSINESS
– 274 –


--- page 285 ---
Enhanced Internal Control and Corporate Governance
It is recognised that, the Incident reflected the weakness in the internal control system at
the early stages upon establishment of the Subsidiary, especially in terms of fund management,
anti-bribery and anti-corruption control, and risks relating to the weakness in the corporate
governance.
Therefore, after the Incident, our Group has actively adopted a series of measures to
strengthen our Group’s corporate governance in financial reporting, fund management,
anti-corruption and anti-bribery, in particular:
i. our Group and our Controlling Shareholder took the Incident very seriously and
were committed to make swift and thorough corrective actions. As the Incident was
attributable to the lack of awareness of compliance management, our Group decided
to form new management team to enhance our compliance management. Given that
the Subsidiary was at its preparation stage with limited personnel resources, the
Subsidiary made it its priority to find new leadership to replace the Former Director
of the Subsidiary to ensure that the production and operation of the Subsidiary were
managed with compliance and professionalism;
ii. Since November 2016, new management team has taken charge of the production
and operational management of the Subsidiary;
iii. the Subsidiary has also actively taken rectification actions. On November 30, 2015,
the Subsidiary recompleted project filing procedures in compliance with applicable
PRC laws and regulations;
iv. our Group has developed and implemented anti-corruption and anti-bribery policies
and procedures. Bribery in any form shall be strictly prohibited. Employees shall
not, whether directly or through a third party, offer, give, promise, authorize the
payment of anything of value to any person or entity (including any government
official), to improperly influence or reward any decision or act related to our
Group’s business, including to improperly obtain or maintain business or business
advantages. No bribes shall be accepted, solicited or agreed to be accepted, nor shall
any facilitation payments be accepted, solicited or agreed to be accepted. In
addition, our Group has set up different management approval authority to ensure
approval roles are effectively separated, and expenditures are properly reviewed,
approved and authorized. In general, the compliance officer of our Group is
responsible for the approval of the exceptional cases to our internal procedures and
guidelines, whereas the finance department of our Group is responsible for
scrutinizing and approving any large expenditures. The management monitors the
third-party payments during regular internal audits to identify any non-compliance
incidents. Furthermore, our Group’s anti-corruption and anti-bribery efforts cover
its management and employees, and also extend to third-party intermediaries and
agents, who are strictly prohibited from making improper payments or gifts to any
BUSINESS
– 275 –


--- page 286 ---
entity or individual (including but not limited to government officials) on behalf of
our Group. The strict prohibition of bribery and behaviors sets clear ethical
standards and expectations for employee conduct, and enables early detection and
correction of any deviations from established procedures;
v. our Group has developed and implemented stringent fund management policies and
approval procedures for advances, expenses and reimbursements. The finance
department of our Group has set up stricter approval procedures over advances,
expenses and reimbursements through financial management system, and
strengthened internal controls to detect and prevent abnormal practices related to
bribery, corruption and other similar activities. Before making withdrawals and
reimbursements, all employees are required to complete a request form detailing the
underlying rationale and ensure compliance with relevant laws, regulations and
internal policies of our Group;
In particular, our Group has placed stringent control over providing loans to
employees. Loans to employees are only permitted for business travels and other
exceptional work-related circumstances on a case-by-case basis upon obtaining prior
approval through the Group’s financial management system, thereby ensuring that
such payment is only granted for legitimate business purposes with a clear record of
decision-making.
As advised by our PRC Legal Adviser, the Group providing loans to the employees
does not violate any mandatory provisions of applicable PRC laws and regulations.
Under the current employee loan management system, loans for work related
expenses, regardless of their amounts, will only be permitted if prior written
approval is obtained. The Directors believe that this provides employees with the
financial flexibility to manage work-related expenses without impacting their
personal finances and avoiding unnecessary disruptions of business activities, while
also reducing potential for misuse of the funds by employees, and therefore is in the
interests of our Group.
vi. our Group has strengthened its internal control measures and established an internal
audit department. The internal audit department conducts internal audits and reviews
to evaluate the compliance of departments and individual employees with our
Group’s internal control policies, including anti-corruption policies and procedures.
The internal audit department continuously monitor the implementation of such
measures and procedures, and review and strengthen our Group’s internal control
system on a regular basis. The internal audit department provides independent
oversight and regular evaluation of the implementation of the Group’s internal
control, and facilitates the continuous improvement of the Group’s governance
framework (including anti-corruption policies and procedures);
BUSINESS
– 276 –


--- page 287 ---
vii. our Group provides trainings to its employees on its anti-corruption and anti-bribery
policies and procedures on an annual basis. All employees shall complete the
mandatory comprehensive trainings on the anti-corruption and anti-bribery policies
and procedures of our Group, including an overview of prohibited conducts, relevant
regulatory policies and penalties for violations of such policies and procedures. This
helps to equip employees with knowledge to recognize and report unethical
practices and deter unethical behaviors as employees are aware of the consequences
of violating these policies; and
viii. the Company has also engaged an independent external firm (the “ Internal Control
Consultant ”) to conduct a general assessment of its internal control system in
relation to the Listing in July 2024. As part of the engagement, the Company has
consulted with its Internal Control Consultant to continue to identify factors related
to strengthening its internal control system and measures to be taken. The Internal
Control Consultant has proposed the following recommendations which have been
adopted by the Company:
(a) revised “Funds Management Regulations” to standardize the loan management
process for affiliated companies, pursuant to which loan applications must
follow a standardized approval process, with supporting documentation
attached. After being approved by the requesting company’s primary
responsible person, the loan application request can be submitted to the Group
for decision-making. Once approved by the Group, the funds should be
transferred to the account of the requesting company and must not be deposited
into the borrower’s personal account.
(b) revised “Funds Management Regulations” to standardize the employee loan
management process, pursuant to which personal loans must undergo stringent
approvals based on the loan amount. For loan requests initiated by the
Chairman of the Board, the Company adopt a dual-signature approval process
(e.g., signed off by both the CFO and the general manager). Additionally, the
Company’s finance team will maintain a ledger for employee loans to monitor
and administer the disbursed funds.
(c) establish an anti-fraud and anti-bribery policy and provide regular training
sessions for all employees.
(d) for non-production line employees, the Company requires annual submission
of integrity pledges.
(e) the Company’s internal audit department will conduct annual checks and
supervision on loan disbursements and compliance with integrity obligations
by employees.
BUSINESS
– 277 –


--- page 288 ---
Based on the observations in follow-up reviews in November 2024, no further
deficiencies have been identified by the Internal Control Consultant and as advised
by our Internal Control Consultant, the measures adopted by our Group are adequate
on a general internal control design level to prevent the recurrence of similar
incidents.
Taking into account the above rectification measures adopted by us and the internal
control measures implemented by us in connection with the Incident, the result of
the review conducted by our Internal Control Consultant, the on-going monitoring
and supervision by our management, and the appointment of our independent
non-executive Directors, our Directors are of the view that our enhanced internal
control measures are adequate and effective. Based on, among other things, (i) the
follow-up reviews conducted by, and the discussion with, the Internal Control
Consultant, (ii) review of relevant policies obtained from the Company, including
the revised “Funds Management Regulations”, anti-fraud and anti-bribery policies,
(iii) review of the background search report compiled by an independent search
agent, and (iv) the discussion with the Company, nothing has come to the Joint
Sponsors’ attention that would reasonably cause them to doubt on the Directors’
view.
No Involvement of Current Controlling Shareholders, Directors and Senior Management of
our Company
As of the Latest Practicable Date, to the best of the knowledge of our Company after due
inquiry, when the bribery act related to the Incident occurred, none of the current Controlling
Shareholders, Directors or senior management of our Company was involved in the Incident,
specifically:
i. our Controlling Shareholders did not hold any directorship or any management
position in the Subsidiary, did not participate in the day-to-day management and
operation of the Subsidiary, and was not aware of the appropriation of funds related
to the Incident by the Former Director of the Subsidiary when the Incident occurred;
ii. None of the current Directors and senior management of our Company, served any
position in the Subsidiary, and the Former Director of the Subsidiary was not
accustomed to taking instructions from our current Controlling Shareholders,
Directors or senior management and/or any of their respective close associates when
the Incident occurred;
iii. The Former Director of the Subsidiary was the only personnel responsible for the
operations and management of the Subsidiary when the Incident occurred, and
there’s no personnel currently employed at the Group which were involved in the
Subsidiary’s operations and management at the time of the Incident; and
BUSINESS
– 278 –


--- page 289 ---
iv. None of our current Controlling Shareholders, Directors or senior management are
close associates of the Former Director of the Subsidiary.
In view of the fact that (i) the Incident took place over 10 years ago during the early
preparation stages of the Subsidiary’s development when its internal control system was yet to
be improved; (ii) other than the Former Director of the Subsidiary, no other employee was
involved in the Incident; (iii) none of the current Controlling Shareholders, Directors and
senior management of our Company was involved in the Incident, and (iv) following the
Incident, our Group has actively adopted a series of rectification measures and effectively
enhanced internal control measures to prevent the occurrence of similar incidents in the future,
including but not limited to replacing the suitable management, reobtaining the legal and
effective project filings and improving its internal control system, so as to ensure the business
operation and stable growth of the Subsidiary in a compliant way, and (v) the Incident has not
and will not have any material adverse effect on the business development, qualification and
license compliance status and financial performance and results of operations of the
Subsidiary, the Directors are of the view that the Incident will not affect the eligibility of our
Company for listing on the Stock Exchange under Rule 8.04 of the Listing Rules or the
suitability of our Company’s current Controlling Shareholders, Directors and senior
management under Rules 3.08 and 3.09 of the Listing Rules, and nothing has come to the Joint
Sponsors’ attention that would reasonably cause them to disagree with the Directors’ view.
Social Insurance and Housing Provident Funds
Background and Reasons for Non-compliance
During the Track Record Period, we had not made social insurance and housing provident
fund contributions for some of our employees in full in accordance with the relevant PRC laws
and regulations. See “Risk Factors — Failure to pay social insurance and housing provident
funds for our employees in accordance with applicable laws and regulations may subject us to
penalties.” We were unable to make full social insurance and housing provident fund
contributions for the relevant employees primarily due to our large labor force, relatively high
mobility and the preference of many employees not to contribute in full to such funds. These
employees were unwilling to pay the social insurance and housing provident fund contributions
in full as it requires additional contributions from the employees and they preferred higher
take-home pay.
As of the Latest Practicable Date, no administrative action or penalty had been imposed
by the relevant regulatory authorities with respect to our social insurance and housing
provident fund contributions, nor had we received any order to settle the deficit amount.
Moreover, as of the Latest Practicable Date, we were not aware of any material complaint filed
by any of our employees regarding our social insurance and housing provident fund policy.
BUSINESS
– 279 –


--- page 290 ---
Legal Consequences
As advised by our PRC legal advisor, pursuant to relevant PRC laws and regulations, we
may be subject to the regulatory requirement to make up the under-contribution of social
insurance within a prescribed period and a daily overdue charge of 0.05% of the delayed
payment amount, accruing from the date when the social insurance contributions were due. If
such payment is not made within the stipulated period, the competent authority may further
impose a fine of one to three times the overdue amount. In 2022, 2023 and 2024 and the five
months ended May 31, 2025, the outstanding amount of our social insurance contribution was
RMB26.2 million, RMB25.2 million, RMB18.7 million and RMB8.9 million, respectively. Our
PRC Legal Advisor has further advised us that, pursuant to relevant PRC laws and regulations,
if we fail to pay the full amount of housing provident fund as required, the housing provident
fund management center may order us to make the outstanding payment within a prescribed
time limit. If the payment is not made within such time limit, an application may be made to
the PRC courts for compulsory enforcement. In 2022, 2023 and 2024 and the five months
ended May 31, 2025, the outstanding amount of our housing provident fund contribution was
RMB11.2 million, RMB10.0 million, RMB9.7 million and RMB3.4 million, respectively.
We have consulted with and obtained confirmations from the competent local
governmental authorities in November 2024, including Tongliao Housing Provident Fund
Management Center Huolinguole Branch (ਕ௅),
Huolinguole Human Resources and Social Security Bureau (ღ
҅), Binzhou Housing Provident Fund Management Center Wudi Branch (၍
ଣʕːೌ಑၍ଣ௅) and Wudi Human Resources and Social Security Bureau ( ೌ಑ጤɛɢ༟๕
ღ҅) covering all of our employees that: (i) no administrative penalties had been
imposed on us during the Track Record Period and up to the date of the confirmation, (ii) the
relevant local governmental authorities will not take their own enforcement measures to
compel us to make supplementary contributions for social insurance, and (iii) we are not
subject to the circumstances of being required to make supplementary contributions for
housing provident funds. In addition, we were neither aware of any material employee
complaints filed against us nor involved in any material labor disputes with our employees with
respect to social insurance and housing provident funds during the Track Record Period and up
to the Latest Practicable Date.
As advised by our PRC legal advisor, (i) the relevant local governmental authorities are
the competent authorities in charge of the social insurance and housing provident funds; and
(ii) based on our confirmation, the facts stated above and the confirmations from the relevant
local governmental authorities, the risk that we will be proactively required to settle all
historical social insurance and housing provident funds and be subject to material
administrative penalties is remote, provided that there are no material adverse changes in the
current regulatory policies and environment and no employee complaints occur. As a result, we
had not made any provision for the shortfall in our social insurance and housing provident fund
contributions during the Track Record Period and up to the Latest Practicable Date.
BUSINESS
– 280 –


--- page 291 ---
Pursuant to the Interpretation (II) of the Supreme People’s Court on issues Concerning the
Application of Law in the Trial of Labor Dispute Cases (ࣩ
༆ᙑ(ɚ)) (the “ New Judicial Interpretation ”), which became effective
on September 1, 2025, where the employer and the employee agree, or the employee promises
the employer, that there is no need to make social insurance contributions, the people’s court
shall determine that such agreement or promise is invalid. Where the employer fails to make
social insurance contributions in accordance with the law, and the employee requests to
terminate the labor contract and claim economic compensation in accordance with item (3) of
Article 38 of the Labor Contract Law of the PRC (), the
people’s court shall support such claim. See “Regulatory Overview – Regulations Related to
Employment and Social Securities.” Our PRC Legal Advisor is of the view that (i) the New
Judicial Interpretation does not repeal the social insurance laws and regulations currently in
force of the PRC; and (ii) the New Judicial Interpretation does not expand the Company’s
penalty exposure.
Considering (i) during the Track Record Period and up to the Latest Practicable Date, we
and the relevant employees have never signed any agreement that no payment of social
insurance would be required to be made by the Company; (ii) we were neither aware of any
material employee complaints filed against us nor involved in any material labor disputes with
our employees with respect to social insurance during the Track Record Period and up to the
Latest Practicable Date; and (iii) as advised by our PRC Legal Advisor, the New Judicial
Interpretation will not affect the compliance status of our social insurance contributions, our
Directors believe that the New Judicial Interpretation would not have a material adverse effect
on our business or financial results.
Internal Control and Remedial Measures
We have taken the following internal control rectification measures and plans to prevent
future occurrences of such non-compliance:
 We have been increasing the payment bases for our social insurance and housing
provident fund contributions and plan to further increase the payment bases for our
social insurance and housing provident fund contributions to the level compliant
with the relevant laws and regulations;
 We are in the process of communicating with our employees with a view to seeking
their understanding and cooperation in complying with the applicable payment
bases, which also requires additional contributions from our employees;
 We have updated our employee handbook to specify that the total salary includes
individual income tax, social insurance and housing provident fund and that we
withhold personal income tax and the personal portion of social insurance and
housing provident fund during payment in accordance to relevant PRC laws and
regulations;
BUSINESS
– 281 –


--- page 292 ---
 We will keep abreast of latest developments in PRC laws and regulations in relation
to social insurance and housing provident funds; and
 We will consult our PRC legal counsel on a regular basis for advice on relevant PRC
laws and regulations to keep abreast of relevant regulatory developments, and will
provide relevant employees with legal compliance training relating to the same.
If requested by the competent government authorities, we undertake to fully rectify and
make full contributions of social insurance premiums and housing provident funds for all of our
employees as soon as practicable.
Approval for Projects in Relation to Thermal Electricity Generators
Reasons for Non-compliance and Legal Consequences
Our Huolinguole thermal power plant had six sets of 330 MW electricity generators and
our Binzhou thermal power plant had two sets of 25 MW electricity generators as of May 31,
2025. As of the Latest Practicable Date, two out of six of our thermal electricity generators in
our Huolinguole thermal power plant (the “ Relevant Thermal Electricity Generators ”) had
not obtained the approval from the relevant government authorities, which involve obtaining
power generation capacity indicators, being included in the national plan and obtaining project
approval.
The non-compliance is primarily due to the change of government policy of related
matters. Initially, we received approval from the local government authority, specifically the
Inner Mongolia Autonomous Region Economic and Information Technology Commission ( ʫ
ึ), allowing the construction of the project, which included the
Relevant Thermal Electricity Generators. However, during the construction period of the
aforementioned thermal power plants, policy changes altered the approval procedures for the
electricity generators — most notably, the new requirement stipulates that the plants must first
be included in the national plan before obtaining project approval. Meanwhile, subsequent
policy changes shifted the management of the electricity generators from the Inner Mongolia
Autonomous Region Economic and Information Technology Commission to the Inner
Mongolia Autonomous Region Energy Bureau (ਜঐ๕҅), which classified the
Relevant Thermal Electricity Generators as not being part of the national power planning.
According to our PRC Legal Advisor, failure to obtain such approvals may result in
administrative penalties, such as being ordered to cease operation of the two electricity
generators and fines of an amount ranging from 0.1% to 0.5% of the project’s total investment.
The total investment in the two electricity generators is approximately RMB1 billion, and,
therefore, the maximum penalty is capped at RMB5 million.
BUSINESS
– 282 –


--- page 293 ---
We have obtained a written confirmation issued by Huolinguole Energy Bureau on
October 10, 2024, which is the competent government authority to supervise thermal electricity
generators, and confirmed that it has not imposed any administrative penalties on us. Based on
the aforementioned confirmation and searches of publicly available information, during the
Track Record Period and up to the Latest Practicable Date, we have not been subject to any
administrative penalties in this regard.
Rectification and Enhanced Internal Control
We have proactively taken remedial measures to rectify this incident. As of the Latest
Practicable Date, we were in the process of obtaining approvals from the relevant authorities
for the acquisition of power generation capacity indicators. We were also actively
communicating with third-parties to obtain power generation capacity indicators and
subsequently having the Relevant Thermal Electricity Generators included in the national plan.
The approval is expected to be obtained in the first half of 2026.
Our Directors believe that the likelihood of our business and results of operations being
materially and adversely affected by this incident is remote, on the basis that (i) as of the Latest
Practicable Date, we had not been subject to any administrative penalties imposed by the
competent authorities, nor had we received any penalties or investigation notices from the
competent authorities for such lack of approval; (ii) we received the confirmation from the
competent government authority as discussed above; (iii) we have been proactively taking
actions to obtain the approvals; and (iv) we have been constructing wind power plants and solar
power plants, aiming to increase the use of green power while decreasing the use of thermal
electricity generators in our production. Based on the aforementioned (i) and (ii), we believe
that the likelihood that we are required by the relevant government authority to cease operating
the Relevant Thermal Electricity Generators is remote. Based on the aforementioned (iii) and
(iv), even in the unlikely event that we are required by the relevant government authority to
cease operating the Relevant Thermal Electricity Generators, we expect that our business
operations and results of operations would not be materially and adversely affected.
To prevent similar incidents from occurring in the future and to mitigate potential risks
stemming from this incident, we have taken meaningful steps to enhance our internal control
measures. These include (i) the establishment of a dedicated team to continuously monitor
changes in relevant laws and regulations, ensuring timely compliance with the latest laws and
regulations as well as prompt follow-through on the necessary procedures to obtain
governmental approvals; (ii) consultation with our PRC legal counsels on a regular basis for
advice on relevant PRC laws and regulations to keep abreast of relevant regulatory
developments; and (iii) active communication with relevant government authorities to ensure
we have the most updated information about the relevant laws and regulations. Our Directors
are of the view that the above enhanced internal control measures are sufficient and will
effectively prevent similar incidents from occurring in the future.
BUSINESS
– 283 –


--- page 294 ---
A W ARDS AND RECOGNITIONS
During the Track Record Period, we received a number of awards and accolades in
recognition of our brand and products. The following table sets out major awards and
recognitions we received during the Track Record Period and up to the Date of this prospectus:
Y ear Awards/Recognition Awarding Authority
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118No. Five among the Top 50
Private Manufacturing
Enterprises in Inner Mongolia
Inner Mongolia Federation of
Industry and Commerce ( ʫႆ
ਜʈਠุᑌΥึ)
Inner Mongolia Non-Public
Economic Development
Service Bureau ( ʫႆ̚͏ᐄ຾
ਕ҅)
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Special Contribution Enterprise
for Promoting High-Quality
Development in Small and
Medium-Sized Cities (2025 ϋ
तй
্ᘠΆุ)
Guoxin Small and Medium-Sized
Cities Index Research Institute
(Ӻ৫)
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118National Green Manufacturing
Demonstration Unit (ॴၠ
ЍႡிͪᇍఊЗ)
National Ministry of Industry and
Information Technology (࢕
ʷ௅)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118National Green Factory (ॴ
ၠЍʈᅀ)
National Ministry of Industry and
Information Technology (࢕
ʷ௅)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H11182024 Quality Enterprises in the
Fine Alumina Industry of
China (2024ʕ਷ၚ୚ःʷ
቙БุᎴሯΆุ)
2024 (the Fourth) China Fine
Alumina Industry Summit
(2024 ϋ(֣)ʕ਷ၚ୚ःʷ
ሞእ)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Green Manufacturing
Demonstration Enterprise of
Inner Mongolia ( ʫႆ̚ၠЍႡ
ிͪᇍΆุ)
Inner Mongolia Department of
Industry and Information
Technology (ਜʈุ
ʷᝂ)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Rank 23rd in the Top 100 Private
Enterprises of Inner Mongolia
(ʫႆ̚͏ᐄΆุϵ੶ୋ23З)
Inner Mongolia Federation of
Industry and Commerce ( ʫႆ
ਜʈਠุᑌΥึ)
BUSINESS
– 284 –


--- page 295 ---
Y ear Awards/Recognition Awarding Authority
Development and Reform
Commission of Inner Mongolia
Autonomous Region ( ʫႆ̚І
ึ)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Rank 16th in the Top 50
Manufacturing Private
Enterprises of Inner Mongolia
(ʫႆ̚Ⴁிุ͏ᐄΆุ50੶ୋ
16З)
Inner Mongolia Federation of
Industry and Commerce ( ʫႆ
ਜʈਠุᑌΥึ)
Development and Reform
Commission of Inner Mongolia
Autonomous Region ( ʫႆ̚І
ึ)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Autonomous Region Level
Water-Saving Enterprise and
Autonomous Region Level
Green Manufacturing
Demonstration Units (ਜॴ
ਜॴၠЍႡ
ிͪᇍఊЗ)
Inner Mongolia Autonomous
Region Department of Industry
and Information Technology
(ʷᝂ)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Tongliao City ‘Glory Star’ ( ஷ፱
̹“݋)”
United Front Work Department of
CPC Tongliao Municipal
Committee ( ʕ΍ஷ፱̹։୕኷
௅)
Tongliao Federation of Industry
and Commerce (General
Chamber of Commerce) ( ஷ፱
̹ʈਠุᑌΥึ(ᐼਠึ))
Tongliao Glory Society ( ஷ፱̹
ආึ)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Outstanding Private Enterprises
of the Y ear 2023 (2023Ꮄ
Ӹ͏ᐄΆุ)
Municipal United Front Work
Department of Huolinguole ( ᎍ
ெਔ̹։୕኷௅)
Tongliao Federation of Industry
and Commerce (General
Chamber of Commerce) ( ஷ፱
̹ʈਠุᑌΥึ(ᐼਠึ))
BUSINESS
– 285 –


--- page 296 ---
OVERVIEW
We have, in our ordinary and usual course of business, entered into a number of
transactions with certain entities that will become our connected persons (as defined under
Chapter 14A of the Listing Rules) upon Listing. Such transactions will continue after the
Listing and will therefore constitute our continuing connected transactions under the Listing
Rules.
CONNECTED PERSONS
We have entered into a number of transactions with the following entities that will
become our connected persons (as defined under Chapter 14A of the Listing Rules) upon
Listing:
Connected Persons Connected Relationship
Mr. Cui Dong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brother of Mr. Cui
Innovation Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A company owned as to 71.82% by Mr. Cui
Innovation New Material /H1118/H1118/H1118/H1118A company listed on the Shanghai Stock Exchange
(stock code: 600361.SH) and a subsidiary of Innovation
Group
Shandong Chuangyuan /H1118/H1118/H1118/H1118/H1118/H1118A connected subsidiary of our Company, which is
owned by the Company and Innovation Group as to
58.5% and 41.5%, respectively
CONNECTED TRANSACTIONS
– 286 –


--- page 297 ---
SUMMARY OF OUR CONTINUING CONNECTED TRANSACTIONS
Annual caps
For the years ending
December 31,
Nature of transactions Counterparties 2025 2026 2027
Applicable
Listing Rules Waiver Sought
(RMB million)
Fully exempt continuing connected transaction
Procurement of
Mechanical Spare
Parts and
Operational
Supporting
Services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Mr. Cui Dong N/A N/A N/A 14A.34 and
14A.76(1)(a)
N/A
Partially exempt continuing connected transaction
Operational
Supporting Service
Procurement
Framework
Agreement /H1118/H1118/H1118/H1118/H1118/H1118
Innovation Group 34 34 34 14A.34 to
14A.36,
14A.49,
14A.51 to
14A.59,
14A.71 and
14A.76(2)(a)
Announcement
Non-exempt continuing connected transactions
Provision of Products
and Services /H1118/H1118/H1118/H1118/H1118
Innovation New
Material and its
close associates
12,530 13,055 13,480 14A.34 to
14A.36,
14A.49,
14A.51 to
14A.59 and
14A.71
Announcement and
independent
Shareholders’
approval
requirements
Purchase of Raw
Materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Shandong
Chuangyuan
and its close
associates
4,834 3,857 3,515 14A.34 to
14A.36,
14A.49,
14A.51 to
14A.59 and
14A.71
Announcement and
independent
Shareholders’
approval
requirements
CONNECTED TRANSACTIONS
– 287 –


--- page 298 ---
FULLY EXEMPT CONTINUING CONNECTED TRANSACTION
1. Procurement of Mechanical Spare Parts and Operational Supporting Services
During the Track Record Period, our Group from time to time procured certain
mechanical spare parts used for equipment of our aluminum smelting facilities and power
plant, primarily including valves, gears and axles, as well as certain operational supporting
services primarily including property management services from certain majority-controlled
companies of Mr. Cui Dong that are primarily engaged in the production and sales and
mechanical spare parts and metal materials.
The aforementioned transactions are made in the ordinary and usual course of our
business and are expected to continue after the Listing, therefore constituting continuing
connected transactions of our Company under Chapter 14A of the Listing Rules. As the highest
applicable percentage ratios for the aforementioned transactions for the purpose of Chapter
14A of the Listing Rules will be less than 0.1% on an annual basis, each of such transactions
will constitute a de minimis continuing connected transaction of our Company that will be fully
exempt from reporting, annual review, announcement and independent Shareholders’ approval
requirements under Chapter 14A of the Listing Rules.
PARTIALLY EXEMPT CONTINUING CONNECTED TRANSACTION
2. Operational Supporting Service Procurement Framework Agreement
Parties
Innovation Group (for itself and on behalf of its close associates); and
Our Company (for itself and on behalf of its subsidiaries)
Principal terms
We entered into an operational supporting service procurement framework agreement (the
“Operational Supporting Service Procurement Framework Agreement ”) with Innovation
Group on November 9, 2025, pursuant to which our Group will procure certain operational
supporting services primarily including mechanical cargo handling services.
The initial term of the Operational Supporting Service Procurement Framework
Agreement shall commence on the Listing Date until December 31, 2027, subject to renewal
upon mutual consent by the parties. Separate underlying agreements will be entered into which
will set out the specific scope of services and detailed terms and conditions in accordance with
the Operational Supporting Service Procurement Framework Agreement.
CONNECTED TRANSACTIONS
– 288 –


--- page 299 ---
Pricing terms
The pricing of the operational supporting services procured from Innovation Group will
be based on arm’s length negotiation between the parties taking into account the prevailing
market rate for provision of comparable services and their nature, procurement scale and/or
complexity. When determining the relevant market rates, the management of our Group will
take into account the rates of comparable services provided by Independent Third Parties in the
market to ensure that the terms are fair and reasonable.
Reasons for the transactions
Innovation Group and its subsidiaries have historically supplied operational supporting
services to members of the Group due to its satisfactory service quality and fair market prices.
In addition, through sourcing relevant operational supporting services from Innovation Group,
we can improve production efficiency by leveraging on the resources, expertise and operational
support of the Innovation Group.
Historical amounts
Set out below are the historical transaction amounts for the abovementioned transactions
during the Track Record Period:
For the year ended December 31,
For the
five months
ended
May 31,
2022 2023 2024 2025
(RMB in million)
Transaction amount for
purchase of operational
supporting services by our
Group from Innovation
Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 19 25 17
CONNECTED TRANSACTIONS
– 289 –


--- page 300 ---
Annual caps
The maximum aggregate annual transaction amounts under the Operational Supporting
Service Procurement Framework Agreement for the three years ending December 31, 2027
shall not exceed the caps set out below:
For the year ending December 31,
2025 2026 2027
(RMB in million)
Maximum transaction amount for
purchase of operational supporting
services by our Group from
Innovation Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834 34 34
The above proposed annual caps are determined taking into account:
(a) the increase in demand for mechanical cargo handling services for bauxite due to the
anticipated expansion of the annual designed manufacturing capacity from the
existing 1,480.0 kt to 2,980.0 kt due to the expected launch of our aluminum
hydroxide production facility from 2024 to 2025; and
(b) upon completion of the manufacturing capacity expansion in Shandong Chuangyuan
in 2025, the demand for mechanical cargo handling services is expected to remain
stable from 2025 to 2027.
NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS
3. Provision of Products and Services Framework Agreement
Parties
Innovation New Material (for itself and on behalf of its close associates); and
Our Company (for itself and on behalf of its subsidiaries)
Principal terms
We have entered into a provision of products and services framework agreement (the
“Provision of Products and Services Framework Agreement ”) with Innovation New
Material on November 9, 2025, pursuant to which our Group agreed to provide products and
services to Innovation New Material, including but not limited to electrolytic aluminum in
liquid form, other products including electricity and heat, other ancillary equipment and raw
materials, and other services including logistic services and asset and property leasing services.
CONNECTED TRANSACTIONS
– 290 –


--- page 301 ---
The initial term of the Provision of Products and Services Framework Agreements shall
commence on the Listing Date until December 31, 2027, subject to renewal upon mutual
consent by the parties. Separate underlying agreements will be entered into which will set out
the specific products and/or scope of services and detailed terms and conditions in accordance
with the Provision of Products and Services Framework Agreement.
Pricing terms
The products and services to be provided under the Provision of Products and Services
Framework Agreement will be based on the following pricing policy, which is in line with
market practice:
 The provision of electrolytic aluminum in liquid form and aluminum ingots will be
based on the market prevailing market average price of aluminum over the preceding
week quoted on the website of Shanghai Metals Market ( https://www.metal.com/ ,
“SMM”), which is a transparent market price and will be comparable to the price of
similar products provided by the Group to independent third-party customers, taking
into account the reasonable costs, such as processing cost and transportation costs,
etc.; and
 The provision of other products and services will be determined after arm’s length
negotiation between parties taking into account relevant costs.
Reasons for the transactions
The aluminum value chain is mainly divided into upstream aluminum production and
downstream processing of aluminum alloy. The Company has been mainly engaged in the
upstream production of electrolytic aluminum in liquid form and aluminum ingots, and
Innovation New Material focuses on the downstream processing of aluminum alloy.
In early 2023, Innovation New Material launched new manufacturing sites near the
industry park of the Company in Inner Mongolia, with an annual production capacity of 1.22
mt, and our Group has been providing electrolytic aluminum in liquid form to Innovation New
Material since then. Short-distance transportation of liquid aluminum benefits both the Group
as an upstream electrolytic aluminum manufacturer and Innovation New Material as a
downstream aluminum alloy processor as (a) it saves costs on transportation fees; (b) it reduces
loss of liquid aluminum during transportation; and (c) it also saves energy for
heating/remelting by Innovation New Material. Furthermore, considering that liquid aluminum
is classified as a hazardous material with high temperature, which must be transported via a
specially adapted aluminum-tapping vehicle, short-distance transportation of liquid aluminum
is much safer compared to long-distance ones.
CONNECTED TRANSACTIONS
– 291 –


--- page 302 ---
According to CRU, integrated production is a market trend, and it is an industry norm for
upstream electrolytic aluminum manufacturers to sell a majority of their liquid aluminum to
downstream aluminum alloy processors who are members of the same group or associated with
each other, which are located in proximity to each other, when the production capacities of the
upstream electrolytic aluminum manufacturers and the downstream aluminum alloy processors
within the same group are comparable to each other.
Furthermore, pursuant to the 2024-2025 Energy Conservation and Carbon Reduction
Action Program issued by the State Council of the PRC, it is targeted that by the end of 2025,
at least 90% of the electrolytic aluminum will be directly alloyed (“ Alloy Conversion Rate
Target”). This means at least 90% of the electrolytic aluminum produced by upstream
electrolytic aluminum manufacturers shall be sold to downstream processors in liquid form and
be directly alloyed into aluminum alloy products. The sales of liquid aluminum to Innovation
New Material with short-distance transportation demonstrate the Group’s efforts to echo the
government’s goal to improve production efficiency and reduce carbon emissions.
Therefore, it is the most cost-efficient way and thus to the best interests of the Group and
its shareholders as a whole, to sell the electrolytic aluminum in liquid form to Innovation New
Material.
Historical amounts
Set out below are the historical transaction amounts for the abovementioned transactions
during the Track Record Period:
For the year ended December 31,
For the
five months
ended
May 31,
2022 2023 2024 2025
(RMB in million)
Transaction amount for
provision of electrolytic
aluminum by our Group to
Innovation New Material /H1118/H1118 nil
(1) 10,862 11,580 4,306
Transaction amount for
provision of other products
and services by our Group
to Innovation New
Material /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 87 156
(2) 23
Notes:
(1) Our Group began selling electrolytic aluminum to Innovation New Material since early 2023.
CONNECTED TRANSACTIONS
– 292 –


--- page 303 ---
(2) Including a one-off disposal of manufacturing equipments and machinery used for production of
aluminum poles and aluminum rods, with a transaction amount of approximately RMB96 million
pursuant to the asset purchase agreements entered into between Chuangyuan Alloy and Inner Mongolia
Y uanwang Metal Technology Co., Ltd. (ʮ̡), a subsidiary of Innovation New
Material. The consideration was determined based on arm’s length negotiation between the parties with
reference to the valuation of the assets as valued by an independent valuer.
Annual caps
The maximum aggregate annual transaction amounts under the Provision of Products and
Services Framework Agreement for the three years ending December 31, 2027 shall not exceed
the caps set out below:
For the year ending December 31,
2025 2026 2027
(RMB in million)
Maximum transaction amount for
provision of electrolytic aluminum by
our Group to Innovation New
Material /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,455 12,956 13,381
Maximum transaction amount for
provision of other products and
services by our Group to Innovation
New Material /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111875 99 99
The above proposed annual caps are determined with reference to:
(a) the estimated manufacturing capacity of electrolytic aluminum of the Group is
expected to remain relatively stable at the current level in the next three years;
(b) the historical market price and the estimated rising trend of the market price of the
electrolytic aluminum in liquid form in the next three years with reference to CRU’s
current estimation of the annual average price for electrolytic aluminum per ton for
each of the years ending December 31, 2025, 2026 and 2027;
(c) the demand on electrolytic aluminum and other products and services from
Innovation New Material are expected to remain relatively stable in the next three
years; and
(d) the Company expects that the percentage of provision of electrolytic aluminum to
Innovation New Material in liquid form and to independent third-party customers in
ingots will remain stable at approximately 90% and 10%, respectively, in the next
three years, taking into account the industry target of a 90% alloy conversion rate
by the end of 2025 as mentioned above which the Company endeavors to achieve.
CONNECTED TRANSACTIONS
– 293 –


--- page 304 ---
4. Purchase of Raw Materials Framework Agreement
Parties
Shandong Chuangyuan (for itself and on behalf of its close associates); and
Our Company (for itself and on behalf of its subsidiaries)
Principal terms
We entered into a purchase of raw materials framework agreement (the “ Purchase of Raw
Materials Framework Agreement ”) with Shandong Chuangyuan on November 9, 2025,
pursuant to which our Group will procure raw materials, primarily alumina, from Shandong
Chuangyuan.
The initial term of the Purchase of Raw Materials Framework Agreement shall commence
on the Listing Date until December 31, 2027, subject to renewal upon mutual consent by the
parties. Separate underlying agreements will be entered into which will set out the specific
products and detailed terms and conditions in accordance with the Purchase of Raw Materials
Framework Agreement.
Pricing terms
The pricing of the alumina procured from Shandong Chuangyuan will be based on the
arm’s length negotiation between our Group and Shandong Chuangyuan, with reference to the
average market price of alumina provided by comparable independent third-party suppliers and
the average price from authoritative websites, such as Aladdiny (ɕ), Baiinfo (ѿ)
and Antaike (߅as the settlement price, to ensure the pricing for transactions between our
Group and Shandong Chuangyuan to be fair and reasonable.
Reasons for the transactions
Alumina is one of the main raw materials for aluminum smelting. Shandong Chuangyuan,
is primarily engaged in alumina refinery and sales of alumina and related products. The
Company holds 58.5% of the equity interests in Shandong Chuangyuan and has control over
its operation and management. Shandong Chuangyuan has been supplying alumina to other
subsidiaries within the Group (mainly Inner Mongolia Chuangyuan) for a long period of time
and is familiar with the Company’s requirement on quality standard. Thus, our Group is able
to ensure the sustainable supply of alumina from Shandong Chuangyuan with high-standard
quality to meet the Group’s manufacturing requirement, and thus it is the most cost-efficient
way and to the best interests of the Company and its shareholders as a whole, to purchase
alumina from Shandong Chuangyuan.
CONNECTED TRANSACTIONS
– 294 –


--- page 305 ---
Historical amounts
Set out below are the historical transaction amounts for the abovementioned transactions
during the Track Record Period:
For the year ended December 31,
For the
five months
ended
May 31,
2022 2023 2024 2025
(RMB in million)
Transaction amount for
purchase of raw materials
by our Group from
Shandong Chuangyuan /H1118/H1118/H1118/H11181,707 3,258 4,410 1,526
Annual caps
The maximum aggregate annual transaction amounts under the Purchase of Raw Materials
Framework Agreement for the three years ending December 31, 2027 shall not exceed the caps
set out below:
For the year ending December 31,
2025 2026 2027
(RMB in million)
Maximum transaction amount for
purchase of raw materials by our
Group from Shandong Chuangyuan /H1118/H1118 4,834 3,857 3,515
The above proposed annual caps are determined taking into account:
(a) the estimated manufacturing capacity of electrolytic aluminum is expected to remain
relatively stable at the current level in the next three years and accordingly the
demand on alumina of the Group is expected to maintain stable during the same
period;
(b) the estimated manufacturing capacity of alumina of Shandong Chuangyuan;
(c) the historical market price and future downward trend of the market price of alumina
in the next three years with reference to CRU’s current estimation of the estimated
annual average price for alumina per ton for each of the years ending December 31,
2025, 2026 and 2027; and
(d) the Company expects that the percentage and volume of purchase of alumina from
Shandong Chuangyuan will remain relatively stable at around 84% of our total
demand for alumina in the next three years.
CONNECTED TRANSACTIONS
– 295 –


--- page 306 ---
W AIVER APPLICATION FOR PARTIALLY EXEMPT AND NON-EXEMPT
CONTINUING CONNECTED TRANSACTIONS
In respect of the procurement of operational supporting services by our Group from
Innovation Group as disclosed in the subsection headed “— Partially exempt continuing
connected transaction”, since the highest applicable percentage ratio calculated for the
purposes of Chapter 14A of the Listing Rules for each of the three years ending December 31,
2027 is expected to exceed 0.1% but less than 5% on an annual basis, the transactions
contemplated thereunder are subject to the annual reporting requirement under Rules 14A.49
and 14A.71 of the Listing Rules and the announcement requirement under Rule 14A.35 of the
Listing Rules.
In respect of the transactions as disclosed in the subsection headed “— Non-exempt
continuing connected transactions”, since the highest applicable percentage ratio calculated for
the purposes of Chapter 14A of the Listing Rules for each of the three years ending December
31, 2027 is expected to exceed 5% on an annual basis, the transactions contemplated
thereunder are subject to the annual reporting requirement under Rules 14A.49 and 14A.71 of
the Listing Rules, the announcement requirement under Rule 14A.35 of the Listing Rules and
the independent Shareholders’ approval requirement under Rule 14A.36 of the Listing Rules.
As those partially exempt and non-exempt continuing connected transactions are expected to
continue on a recurring and continuing basis and have been fully disclosed in this prospectus,
our Directors consider that compliance with the announcement and the independent
Shareholders’ approval requirements (as the case may be) would lead to unnecessary
administrative costs and would be unduly burdensome to us.
Accordingly, we have applied to the Hong Kong Stock Exchange for, and the Hong Kong
Stock Exchange has granted, waivers exempting us from strict compliance with the
announcement requirement under Chapter 14A of the Listing Rules in respect of the continuing
connected transactions as disclosed in “— Partially exempt continuing connected transactions”
in this section, and waivers exempting us from strict compliance with the announcement and
independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules in
respect of the continuing connected transactions as disclosed in “— Non-exempt continuing
connected transactions” in this section, subject to the condition that the aggregate amounts of
the continuing connected transactions for each financial year shall not exceed the relevant
amounts set forth in the respective annual caps (as stated above).
In the event of any future amendments to the Listing Rules imposing more stringent
requirements than those applicable as of the Latest Practicable Date on the continuing
connected transactions referred to in this prospectus, we will take immediate steps to ensure
compliance with such new requirements within reasonable time.
CONNECTED TRANSACTIONS
– 296 –


--- page 307 ---
CONFIRMATION FROM OUR DIRECTORS
Our Directors (including our independent non-executive Directors) are of the view that
the partially exempt and non-exempt continuing connected transactions as set out above have
been and will continue to be carried out in our ordinary and usual course of business and on
normal commercial terms or better, and are fair and reasonable and in the interest of our
Company and Shareholders as a whole, and the proposed annual caps for those transactions are
fair and reasonable and in the interest of our Company and Shareholders as a whole.
CONFIRMATION FROM THE JOINT SPONSORS
Having taken into account the view of the Directors and the Joint Sponsors’ participation
in due diligence, the Joint Sponsors are of the view that the partially exempt and non-exempt
continuing connected transactions as set out above have been and will be carried out in the
ordinary and usual course of business of our Company and on normal commercial terms or
better, and are fair and reasonable in the interests of our Company and the Shareholders as a
whole, and the proposed annual caps for those transactions are fair and reasonable and in the
interest of our Company and Shareholders as a whole.
INTERNAL CONTROL MEASURES TO SAFEGUARD SHAREHOLDERS’
INTERESTS
In order to further safeguard the interests of the Shareholders as a whole (including the
minority Shareholders), our Group has implemented the following internal control measures in
relation to the continuing connected transactions:
(a) Our Company has established a Connected Transaction Control Committee, the
chairman and majority being our independent non-executive Directors, to routinely
monitor the continuing connected transactions and potential commercial
opportunities, which is dedicated to and responsible for ensuring the continuing
connected transactions are conducted on normal commercial terms, to mitigate the
risk and safeguard the interests of the shareholders as a whole;
(b) Our Group has approved internal guidelines which provide that if the value of any
proposed connected transaction is expected to exceed certain thresholds, the
relevant staff must report the proposed transactions to the head of the relevant
business unit in order for our Company to commence the necessary additional
assessment and approval procedures and ensure that we will comply with the
applicable requirements under Chapter 14A of the Listing Rules; and
CONNECTED TRANSACTIONS
– 297 –


--- page 308 ---
(c) Our Company will provide information and supporting documents to the
independent non-executive Directors and the auditors in order for them to conduct
an annual review of the continuing connected transactions entered into by our
Company. In accordance with the requirements under the Listing Rules, the
independent non-executive Directors will provide an annual confirmation to the
Board as to whether the continuing connected transactions have been entered into in
the ordinary and usual course of business of our Group, are on normal commercial
terms and are in accordance with the agreement governing them on terms that are
fair and reasonable and in the interests of the Shareholders as a whole, and the
auditors will provide an annual confirmation to the Board as to whether anything has
come to their attention that causes them to believe that the continuing connected
transactions have not been approved by the Board, are not in accordance with the
pricing policies of our Group in all material respects, are not entered into in
accordance with the relevant agreements governing the transactions in all material
respects or have exceeded the cap.
CONNECTED TRANSACTIONS
– 298 –


--- page 309 ---
BOARD OF DIRECTORS
The Board currently consists of eight Directors, including four executive Directors, one
non-executive Director and three independent non-executive Directors. All Directors were
appointed for a term of three years which is renewable upon re-election. The major powers and
functions of the Board include, but are not limited to, convening general meetings, presenting
reports to the general meetings, implementing the resolutions passed at the general meetings,
determining the operational plans and investment plans of the Group, determining the annual
financial budgets and final accounts of the Group, determining the fundamental management
systems of the Group and formulating profit distribution plans and loss recovery plans of the
Group, and exercising other powers and functions as conferred by the Memorandum and
Articles of Association.
The following tables set out information in respect of our Directors as of the Latest
Practicable Date:
Name Age Position/Title
Date of
Appointment
as a Director
Date of
Joining our
Group
Roles and
Responsibilities
Relationship with
other Directors
and Senior
Management
Chairman and non-executive Director
Mr. CUI Lixin
(੦ͭอ) /H1118/H1118/H1118/H1118
56 Chairman of the
Board and
Non-executive
Director
July 4, 2023 May 10, 2012 Responsible for
formulating the
overall strategic
planning and the
decision-making on
important matters
of our Group
None
Executive Directors
Mr. CAO Y ong
(ۇ)H1118/H1118/H1118/H1118/H1118
45 Executive
Director and
general
manager
January 7,
2025
November 5,
2016
Responsible for
the overall
management of the
production and
operation of our
Group and
implementing our
Group’s strategic
planning
None
Mr. ZHANG
Jianxiang
(ඊ) /H1118/H1118/H1118/H1118
39 Executive
Director,
deputy general
manager and
joint company
secretary
January 7,
2025
March 29,
2024
Responsible for the
daily production
and operation of
our Group
None
DIRECTORS AND SENIOR MANAGEMENT
– 299 –


--- page 310 ---
Name Age Position/Title
Date of
Appointment
as a Director
Date of
Joining our
Group
Roles and
Responsibilities
Relationship with
other Directors
and Senior
Management
Ms. ZHANG Y ue
(ࣀ)H1118/H1118/H1118/H1118/H1118
43 Executive
Director and
financial
director
January 7,
2025
June 1, 2024 Responsible for
overall financial
management of our
Group
None
Mr. FU Qian
(Ϳᙛ) /H1118/H1118/H1118/H1118/H1118
49 Executive
Director and
administrative
director
January 7,
2025
November 24,
2016
Responsible for
overall
administrative and
human resources
management of our
Group
None
Independent Non-executive Directors
Mr. LIU Y anzhao
(݇)H1118/H1118/H1118/H1118
52 Independent
Non-executive
Director
November 9,
2025
November 9,
2025
Responsible for
providing
independent
opinion and
judgment to the
Board
None
Ms. ZHENG
Juan (ࢇ)H1118/H1118
50 Independent
Non-executive
Director
November 9,
2025
November 9,
2025
Responsible for
providing
independent
opinion and
judgment to the
Board
None
Ms. SHEN
Lingyan
(ዲ) /H1118/H1118/H1118/H1118
36 Independent
Non-executive
Director
November 9,
2025
November 9,
2025
Responsible for
providing
independent
opinion and
judgment to the
Board
None
Chairman of the Board and Non-executive Director
Mr. Cui Lixin ( ੦ͭอ), aged 56, is the founder of our Group has been our Director since
July 2023 and has been redesignated as the Chairman of the Board and a non-executive
Director of our Company in January 2025. He is primarily responsible for formulating the
overall strategic planning and the decision-making on important matters of our Group.
Mr. Cui has extensive experience in the metal industry and corporate management. Prior
to founding our Group, he has served as the chairman of the board of Shandong Innovation
Metal Technology Co., Ltd. (ʮ̡) since November 2007. From August
DIRECTORS AND SENIOR MANAGEMENT
– 300 –


--- page 311 ---
2013 to December 2020, he served as the executive director of Innovation Group. From May
2018 to July 2024, he served as the director of Shandong Aluminum V alley Commodity
Exchange Centre Co., Ltd. (ʮ̡). Since December 2022, he
has served as a director and the chairman of the board of Innovation New Material, a company
listed on the Shanghai Stock Exchange (stock code: 600361.SH). He has been a director of our
Company since incorporation.
Mr. Cui was granted numerous awards and honours, including the Model Worker of
Shandong Province (௶ਗᅼᇍ), the Outstanding Entrepreneur of Shandong (ᎴӸ
࢕the Leading Entrepreneur on the Top 100 Private Enterprises List of Shandong
Province (࢕the Outstanding Contribution
Entrepreneur of Binzhou City (࢕the Top 10 Innovative Entrepreneurs
of Binzhou City (࢕and the “Golden Lion Award” for Outstanding
Entrepreneur of Binzhou City (๸ᆤ). Mr. Cui also holds various public
positions, including as a deputy to the Fourteenth National People’s Congress (Ό਷
ڌsince February 2023, a member of the Standing Committee of the Eighteenth
People’s Congress of Zouping City (ࡰsince January 2022, and
a member of the Standing Committee of the Twelfth People’s Congress of Binzhou City ( Ᏽψ
ࡰsince February 2022. He has been the vice president of the China
Nonferrous Metals Industry Association (ڗsince March 2025, an
executive committee member of the All-China Federation of Industry and Commerce ( ʕശΌ
ึ) since December 2022, the vice chairman of the Shandong
Federation of Industry and Commerce (ʈਠุᑌΥึ) since June 2022, the vice director
general of the China Nonferrous Metals Fabrication Industry Association (᙮̋ʈ
ڗsince November 2020, the executive vice president of the Shandong
Aluminum Industry Association (቙ุ՘ึ) since March 2019, and the president of the
Binzhou Aluminum Trade Association (ڗsince August 2020.
Mr. Cui obtained his master’s degree in materials engineering from Central South
University (ɽኪ) in Hunan Province, the PRC, in December 2017. He was accredited as
a Senior Engineer by the Senior Review Committee of Engineering Technical Qualifications of
Binzhou City (ึ) in December 2020.
Executive Directors
Mr. Cao Y ong (ۇ)aged 45, was appointed as an executive Director and the general
manager of our Company on January 7, 2025. He is primarily responsible for the overall
management of the production and operation of our Group and implementing our Group’s
strategic planning.
Mr. Cao has over 20 years of experience in the energy industry and corporate
management. Prior to joining our Group, he worked at Chengdu Oriental Hope Enterprise
Management Services Co., Ltd. (ʮ̡) from September 2002
to January 2006. From September 2008 to December 2010, he served as the general manager
and vice president in charge of the chemical business managed by East Hope Group Co., Ltd.
DIRECTORS AND SENIOR MANAGEMENT
– 301 –


--- page 312 ---
(ʮ̡) at Hulunbuir Dongneng Chemical Co., Ltd. (ࠢ
ʮ̡). From September 2011 to October 2016, he served as the general manager and the
president of Xinjiang district at Xinjiang East Hope Nonferrous Metals Co., Ltd. (˙Ҏ
ʮ̡). He joined our Group as the general manager of Inner Mongolia
Chuangyuan in November 2016 and has served as the chairman of the board of Inner Mongolia
Chuangyuan since January 2022.
Mr. Cao was awarded the titles of the National Model Worker ( Ό਷௶ਗᅼᇍ), Xinjiang
Changji Hui Autonomous Prefecture Model Worker (ψ௶ਗᅼᇍ), Xinjiang
Changji Hui Autonomous Prefecture Y outh May Fourth Medal (ϋʞ̬ᆤ௝)
and Xinjiang Uygur Autonomous Region Model Worker (ਜ௶ਗᅼᇍ) from
2015 to 2016. He was a deputy to the Fifth People’s Congress of Tongliao City and a member
of the Standing Committee of the Fifth People’s Congress of Tongliao City (ɛ
ࡰfrom 2018 to 2022. Since 2022, he has served as a vice chairman of
the Tongliao City Federation of Industry and Commerce (ࢩand an
executive committee member of the Inner Mongolia Autonomous Region Federation of
Industry and Commerce (ࡰMr. Cao was awarded
the title of the National Model Worker ( Ό਷௶ਗᅼᇍ) in 2025.
Mr. Cao graduated from Southwest University of Political Science and Law (ɽ
ኪ) with a major in law in Chongqing, the PRC, in June 1999. He graduated from Xinjiang
University ( อᖛɽኪ) with a major in law in Xinjiang, the PRC, in June 2016.
Mr. Zhang Jianxiang (ඊ), aged 39, was appointed as an executive Director, the
deputy general manager and one of the joint company secretaries of our Company on January 7,
2025. He is primarily responsible for the daily production and operation of the Group.
Mr. Zhang has over 18 years of experience in the metal industry and financial
management. Prior to joining our Group, he worked at Shaanxi Huadian Materials Corporation
(ᐼʮ̡) from July 2006 to January 2008. From February 2008 to May 2024, he
served finance and management positions in various subsidiaries of Innovation New Material,
a company listed on the Shanghai Stock Exchange (stock code: 600361.SH), including as a
financial accountant at Shandong Innovation Metal Technology Co., Ltd. (Ҧ
ʮ̡) from February 2008 to May 2009, as the head of financial department at Shandong
Innovation Plate Co., Ltd. (ʮ̡) from June 2009 to July 2013, as the head
of financial department of profile projects (ҿධͦ) at Shandong Innovation Metal
Technology Co., Ltd. (ʮ̡) from August 2013 to June 2015, as the
general manager of Shandong Y uanwang Electrical Technology Co., Ltd. (Ҧ
ʮ̡) from July 2015 to September 2019, as the general manager of Suzhou Chuangtai
Alloy Materials Co., Ltd. (ʮ̡) from October 2019 to December 2023
and as the general manager at Suzhou Chuanghui New Material Co., Ltd. (Ϟ
ʮ̡) from January 2024 to May 2024. He joined our Group in March 2024 and has served
as a director of Shandong Chuangyuan since then. He joined Inner Mongolia Chuangyuan and
has served as the executive deputy general manager in June 2024.
DIRECTORS AND SENIOR MANAGEMENT
– 302 –


--- page 313 ---
Mr. Zhang was honoured as the Outstanding Communist Party Member of the Suzhou
Suxiang Cooperation Zone (ࡰin 2021. In 2024, he was
awarded the May Day Labor Medal of Tongliao City ( ஷ፱̹ʞɓ௶ਗᆤ௝) granted by the
Tongliao City Federation of Trade Unions ( ஷ፱̹ᐼʈึ).
Mr. Zhang graduated from Northwest University ( Г̏ɽኪ) with a major in computerized
accounting in Shaanxi Province, the PRC, in July 2006. He graduated from Shandong
University (ɽኪ) with a major in accounting in Shandong Province, the PRC in July 2012
via online learning. Mr. Zhang is a Certified Intermediate Accountant accredited by the Human
Resources and Social Security Department of Shandong Province (ღ
ᝂ) in October 2013. He is a Certified Safety Engineer certified by the Ministry of Human
Resources and Social Security of the PRC (ღ௅) and the
Ministry of Emergency Management of the PRC (၍ଣ௅) in October
2018. He is also a Senior Engineer certified by the Shanghai Aluminum Trade Association ( ɪ
ऎ቙ุБุ՘ึ) in October 2021.
Ms. Zhang Yue (ࣀ)aged 43, was appointed as an executive Director and the financial
director of our Company on January 7, 2025. She is primarily responsible for overall financial
management of our Group.
Ms. Zhang has over 20 years of experience in financial accounting. Prior to joining our
Group, she worked at Shandong Qixing Cable Co., Ltd. (ʮ̡) from July
2004 to December 2007. From January 2008 to May 2024, she consecutively served as an
accountant, the deputy head of financial department, the head of financial department and
assistant financial director at Shandong Innovation Metal Technology Co., Ltd. (᙮
ʮ̡). She joined our Group in June 2024 and has served as the financial director of
Inner Mongolia Chuangyuan since then.
Ms. Zhang graduated from Dongbei University of Finance and Economics (̏ৌ຾ɽ
ኪ) with a major in accounting in Liaoning Province, the PRC, in January 2019, via online
learning. Ms. Zhang is a Senior Accountant certified by the Human Resources and Social
Security Department of Shandong Province (ღᝂ) in December
2023. She is also a Certified Public Accountant accredited by the Certified Public Accountant
Examination Committee of the Ministry of Finance of the PRC (ࡰ
ึ) in November 2023 and a Certified Tax Agent accredited by Certified Tax Agents
Association of Shandong Province (՘ึ) in December 2016.
Mr. Fu Qian ( Ϳᙛ), aged 49, was appointed as an executive Director and the
administrative director of our Company on January 7, 2025. He is primarily responsible for
overall administrative and human resources management of our Group.
Mr. Fu has over 24 years of experience in corporate management. Prior to joining our
Group, he worked as a sales manager at Qingdao Hope Feed Co., Ltd. (ʮ
̡) (currently known as East Hope (Qingdao) Animal Nutrition Food Co., Ltd. (˙Ҏૐ(ڡ
ࢥ)ʮ̡)) from June 2000 to May 2005. From June 2005 to July 2006, he
DIRECTORS AND SENIOR MANAGEMENT
– 303 –


--- page 314 ---
worked as an office director at Liaocheng Qiangda Feed Co., Ltd. (ப΂ʮ
̡) (currently known as Liaocheng East Hope Qiangda Animal Nutrition Co., Ltd. (˙
ʮ̡)). He also served as the director of administration and human
resources department from August 2006 to March 2012, and as a production plant manager
from April 2012 to August 2015 at Hulunbuir Dongneng Chemical Co., Ltd. (ঐʷ
ʮ̡). From September 2015 to October 2016, he served as the regional director of
administration and human resources department at Xinjiang East Hope Nonferrous Metals Co.,
Ltd. (ʮ̡). He joined our Group in November 2016 and has served
as the deputy director of administration and human resources department of Inner Mongolia
Chuangyuan since January 2017, and the director of administration and human resources
department since April 2018. He has been the director and manager of Chuangyuan Alloy since
September 2023, and he has been the director of Shandong Chuangyuan since March 2024.
Mr. Fu was awarded the titles of May Day Labour Medal of Tongliao City ( ஷ፱̹ʞɓ
௶ਗᆤ௝) and Advanced Individual in Private Economy United Front Work (ெਔ̹͏ᐄ
ɛ) in 2022. He was also recognized as a Model Worker (Advanced
Worker) of Tongliao City ( ஷ፱̹௶ਗᅼᇍ (٫and an Advanced Individual in
Investment Promotion of Inner Mongolia Autonomous Region (ࡈ
ɛ) in 2023.
Mr. Fu graduated from Sichuan Province Dachuan Finance and Trade School (༺
ࣧcurrently known as Sichuan Province Dazhou Finance and Trade School (޲
ࣧwith a major in computerized accounting in Sichuan Province, the PRC, in
July 1999.
Independent Non-executive Directors
Mr. Liu Y anzhao (݇)aged 52, was appointed as an independent non-executive
Director of our Company on November 9, 2025. He is primarily responsible for providing
independent opinion and judgment to the Board.
Mr. Liu has over 28 years of experience in the auditing and accounting industry. He
worked as the head of the capital verification department at Shandong Binzhou Audit Firm ( ʆ
הfrom July 1996 to October 1999. He served as the head of the audit
department at Shandong Huanghe Certified Public Accountants LLP (ࢪࠇ
הfrom October 1999 to January 2005, and has served as the deputy firm director and
deputy chief accountant since January 2005. From May 2018 to July 2024, he served as an
independent non-executive director at Weiqiao Textile Co., Ltd. (ʮ̡).
Since July 2019, he has been serving as an executive director and the general manager at
Shandong Province Binzhou Huanghe Certified Tax Agents Co., Ltd. (ࢪ
ப΂ʮ̡). He has also been serving as an executive director and the general
manager at Hainan Chenxing Hengrui Investment Holdings Co., Ltd. (ٰ
ʮ̡) since April 2024. He joined our Group in November 2025 and has served as an
independent non-executive Director of our Company since then.
DIRECTORS AND SENIOR MANAGEMENT
– 304 –


--- page 315 ---
Mr. Liu was awarded with the Advanced Individual in Asset Appraisal Industry Inspection
(ɛ) by the Ministry of Finance of the PRC and the China Appraisal
Society ( ʕ਷༟ପ൙П՘ึ) in 2004. In 2006, he was honoured as the Outstanding Communist
Party Member (ࡰIn 2012, he was honoured as the Outstanding Certified Public
Accountant of Shandong Province (ࢪࠇby the Shandong Institute of
Certified Public Accountants (՘ึ).
Mr. Liu obtained his bachelor’s degree in auditing from Shandong Institute of Economics
(຾᏶ኪ৫) (currently known as Shandong University of Finance and Economics (ৌ
຾ɽኪ)) in Shandong Province, the PRC, in July 1996. Mr. Liu is a Certified Public
Accountant accredited by the Chinese Institute of Certified Public Accountants (ࠇ
՘ึ). He is a Senior Accountant recognized by the Senior Evaluation Committee for
Accounting Professional Qualification of Shandong Province (৷ॴ൙ᄲ
ึ) in March 2012. He is also a Certified Public V aluer certified by the China Appraisal
Society ( ʕ਷༟ପ൙П՘ึ) in December 2001, and a Certified Tax Agent accredited by the
Certified Tax Agents Management Centre of Shandong Province (၍ଣʕː)
in August 2003.
Ms. Zheng Juan (ࢇ)aged 50, was appointed as an independent non-executive
Director of our Company on November 9, 2025. She is primarily responsible for providing
independent opinion and judgment to the Board.
Ms. Zheng has over 26 years of experience in the legal industry. She worked at the Jining
Zhongqu Judicial Bureau Direct Legal Service Office (ה)
from July 1994 to July 1997. She worked as a lawyer at Shandong Zonghengjia Law Firm ( ʆ
הfrom July 1997 to December 2001. From December 2001 to November
2017, she worked as a lawyer at Shandong Kaiyan Law Firm (הSince
August 2017, she has been a partner at Taihetai (Jinan) Law Firm ( इձइ(ی)ה.)
She joined our Group in November 2025 and has served as an independent non-executive
Director of our Company since then.
Ms. Zheng graduated from Shandong University (ɽኪ) with a major in law in
Shandong Province, the PRC, in December 2001 and her master’s degree in law from Nankai
University (කɽኪ) in Tianjin, the PRC, in July 2005. In December 2015, she completed the
Australia-China Legal Education Program (Shandong) conducted by the Sir Zelman Cowen
Centre, College of Law and Justice, Victoria University. Ms. Zheng was awarded the Lawyer
Qualification Certificate in September 1996 and was consecutively recognized as a Level 4 and
Level 3 Lawyer by the Human Resources and Social Security Department of Shandong
Province (ღᝂ) in 1999 and 2004. She has received numerous
honors, including the Top Ten Female Legal Service Workers (٫)
jointly awarded by the Political and Legal Affairs Commission of Binzhou (ج݁
ึ) and the Women’s Federation of Binzhou ( Ᏽψ̹੉ɾᑌΥึ) in 2005, the March 8th
Red Banner Holder (࿩˓) awarded by the Women’s Federation of Binzhou ( Ᏽψ̹
੉ɾᑌΥึ) in 2005, the Top Ten Female Lawyers of Binzhou (ࢪܛjointly
awarded by the Binzhou Municipal Bureau of Justice (҅) and the Women’s
DIRECTORS AND SENIOR MANAGEMENT
– 305 –


--- page 316 ---
Federation of Binzhou ( Ᏽψ̹੉ɾᑌΥึ) in 2007, the Advanced Individual in Protecting
Women’s Rights Protection of Shandong Province (ɛ) jointly
awarded by the Women’s Federation of Shandong Province (੉ɾᑌΥึ) and the Public
Security Comprehensive Management Commission of Shandong Province (τၝ
܃In 2011 and 2014, she was awarded the Outstanding Legal Counselor
for Teenagers (ࡰby the Ministry of Justice of the PRC, the Central
Public Security Comprehensive Management Commission (܃,)
and the Working Committee for the Care of the Next Generation (ึ).
Ms. Zheng also has served in various social roles and has been the deputy director of the
Artificial Intelligence and Big Data Professional Committee of the Jinan Lawyers Association
(ึ) since 2024.
Ms. Shen Lingyan (ዲ), aged 36, was appointed as an independent non-executive
Director of our Company on November 9, 2025. She is primarily responsible for providing
independent opinion and judgment to the Board.
She has been working at Beijing Antaike Information Co., Ltd. (΅Ϟ
ʮ̡), a leading commodity market research company with an expertise in research on
Nonferrous Metals including aluminum, since August 2016. She has been serving as the deputy
manager and senior expert of the aluminum department at the same company since December
2021, responsible for research related to the aluminum industry. She joined our Group in
November 2025 and has served as an independent non-executive Director of our Company
since then.
Ms. Shen obtained her bachelor’s degree in chemical engineering and technology from
Xinyang Normal University (ᇍɽኪ) in Henan Province, the PRC, in July 2013, and her
master’s degree in material engineering from Central South University (ɽኪ) in Hunan,
the PRC, in June 2016. Ms. Shen is a senior engineer recognized by China Nonferrous Metals
Techno-economic Research Institute Co., Ltd (ப΂ʮ̡)i n
August 2023.
Save as disclosed above, none of our Directors held any other directorship in public
companies, the securities of which are listed on any securities market in Hong Kong or
overseas in the last three years immediately preceding the date of this prospectus, and to the
best knowledge, information and belief of the Directors having made all reasonable inquiries,
there are no other matters with respect to our Directors that need to be brought to the attention
of our Shareholders and there is no information relating to our Directors that is required to be
disclosed pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules.
DIRECTORS AND SENIOR MANAGEMENT
– 306 –


--- page 317 ---
SENIOR MANAGEMENT
Our senior management is responsible for the day-to-day management of our business.
The following table below sets out certain information of the senior management of the Group:
Name Age Position/Title
Date of
Appointment
as Senior
Management
Date of
Joining our
Group
Role and
Responsibility
Relationship with
other Directors
and Senior
management
Mr. CAO Y ong
(ۇ)H1118/H1118/H1118/H1118/H1118
45 Executive
Director and
general
manager
January 7,
2025
November 5,
2016
Responsible for
overall
management of the
production and
operation of our
Group and
implementing our
Group’s strategic
planning
None
Mr. ZHANG
Jianxiang
(ඊ) /H1118/H1118/H1118/H1118
39 Executive
Director,
deputy general
manager and
joint company
secretary
January 7,
2025
March 29,
2024
Responsible for the
daily production
and operation of
the Group
None
Ms. ZHANG Y ue
(ࣀ)H1118/H1118/H1118/H1118/H1118
43 Executive
Director and
financial
director
January 7,
2025
June 1, 2024 Responsible for
overall financial
management of our
Group
None
Mr. FU Qian
(Ϳᙛ) /H1118/H1118/H1118/H1118/H1118
49 Executive
Director and
administrative
director
January 7,
2025
November 24,
2016
Responsible for
overall
administrative and
human resources
management of our
Group
None
Mr. LI Muming
(׼)H1118/H1118/H1118/H1118
59 General manager
of China
alumina
business
January 7,
2025
January 10,
2021
Responsible for
management of the
Group’s alumina
business operations
in China
None
Mr. GUO Wei
(ெਃ) /H1118/H1118/H1118/H1118/H1118
41 Deputy general
manager of
China alumina
business
January 7,
2025
November 12,
2018
Responsible for
implementation of
the Group’s
alumina business
operations in China
None
DIRECTORS AND SENIOR MANAGEMENT
– 307 –


--- page 318 ---
Mr. Cao Y ong (ۇ)is an executive Director and the general manager of our Company.
See “— Directors” in this section for his biographical details.
Mr. Zhang Jianxiang (ඊ) is an executive Director, the deputy general manager and
one of the joint company secretaries of our Company. See “— Directors” in this section for his
biographical details.
Ms. Zhang Yue (ࣀ)is an executive Director and the financial director of our
Company. See “— Directors” in this section for her biographical details.
Mr. Li Muming (׼)aged 59, is the general manager of China alumina business of
our Company. He is primarily responsible for management of the alumina business operations
in China.
Mr. Li has broad experience in the alumina industry and corporate management. Prior to
joining our Group, he consecutively served as an employee, workshop director and factory
director at Weiqiao Textile Co., Ltd. (ʮ̡) from August 1988 to December
2001. From December 2001 to October 2010, he served as the general manager of a branch
company of Shandong Weiqiao Pioneering Group Textile Company (ᕧ዗௴ุණྠ५ᔌʮ
̡). From October 2010 to March 2017, he served as the general manager of Indonesia Hongfa
Weili Alumina Company (ͭःʷ቙ʮ̡). From March 2017 to February 2020, he
served as the general manager of Zouping County Huimao New Material Technology Co., Ltd.
(ʮ̡). He joined our Group in January 2021 as the deputy general
manager of Shandong Chuangyuan. He was further appointed as the general manager of
Shandong Chuangyuan in November 2022, and the chairman of the board of Shandong
Chuangyuan in August 2023.
Mr. Li graduated from Shandong University (ɽኪ) with a major in business
administration in Shandong Province, the PRC, through correspondence courses in July 2019.
Mr. Guo Wei ( ெਃ), aged 41, is the deputy general manager of China alumina business
of our Company. He is primarily responsible for implementation of the Group’s alumina
business operations in China.
Mr. Guo has over 16 years of experience in accounting and corporate management. Prior
to joining our Group, he worked as a financial accountant at Zouping Qixing Industrial
Aluminum Co., Ltd. (ʮ̡) from August 2008 to October 2011. From
November 2011 to November 2018, he consecutively served as the director of the finance
department, deputy general manager and the general manager at Wudi Qixing High-Tech
Aluminum Co., Ltd. (ʮ̡). He joined our Group in November 2018
and has served as the deputy general manager of Shandong Chuangyuan. He has also served
as the director of Shandong Chuangyuan since February 2019.
DIRECTORS AND SENIOR MANAGEMENT
– 308 –


--- page 319 ---
Mr. Guo obtained his bachelor’s degree in statistics from Qingdao University (ɽኪ)
in Shandong Province, the PRC, in June 2008. Mr. Guo was awarded the May Day Labour
Medal (Advanced Individual) (ɛ) in 2021 and the Outstanding
Communist Party Member (ࡰin 2021.
JOINT COMPANY SECRETARIES
Mr. Zhang Jianxiang (ඊ) is one of the joint company secretaries of our Company.
For the biographical details of Mr. Zhang, see “— Directors” in this section.
Ms. Wong Hoi Ting ( ර௱ణ) was appointed as one of our joint company secretaries on
January 7, 2025.
Ms. Wong has more than 10 years of experience in the corporate secretarial field. She is
a manager of the listing services department of TMF Hong Kong Limited, responsible for
providing corporate secretarial and compliance services to listed companies.
Ms. Wong obtained her bachelor’s degree in social sciences from Lingnan University in
Hong Kong in October 2009 and her master of science degree in professional accounting and
corporate governance from City University of Hong Kong in Hong Kong in July 2014. She is
an associate of both The Hong Kong Chartered Governance Institute and The Chartered
Governance Institute in the United Kingdom.
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 on January 7, 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/her independence
as regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules, (ii) he/she
has no past or present financial or other interest in the business of the Company or its
subsidiaries or any connection with any core connected person of the Company under the
Listing Rules as of the Latest Practicable Date, and (iii) that there are no other factors that may
affect his/her independence at the time of his/her appointments.
DIRECTORS AND SENIOR MANAGEMENT
– 309 –


--- page 320 ---
BOARD COMMITTEES
We have established four Board committees in accordance with the relevant laws and
regulations and the corporate governance practice under the Listing Rules, including the Audit
Committee, the Remuneration Committee, the Nomination Committee and the Connected
Transaction Control Committee. The committees operate in accordance with terms of reference
established by the Board.
Audit Committee
We have established an audit committee (the “ Audit Committee ”) in compliance with
Rule 3.21 of the Listing Rules and with written terms of references in compliance with the
Corporate Governance Code set out in Appendix C1 to the Listing Rules. The primary duties
of the Audit Committee are to review and supervise the financial reporting process and internal
controls system of the Group, review and approve connected transactions and to advise the
Board. The Audit Committee consists of three members, including Mr. Liu Y anzhao, Mr. Cui
and Ms. Shen Lingyan. Mr. Liu Y anzhao currently serves as the chairman of the Audit
Committee and is appropriately qualified as required under Rules 3.10(2) and 3.21 of the
Listing Rules.
Remuneration Committee
We have established a remuneration committee (the “ Remuneration Committee ”) in
compliance with Rule 3.25 of the Listing Rules and with written terms of references in
compliance with the Corporate Governance Code set out in Appendix C1 to the Listing Rules.
The primary duties of the Remuneration Committee are to review and make recommendations
to the Board regarding the terms of remuneration packages, bonuses and other compensation
payable to our Directors and senior management. The Remuneration Committee consists of
three members, including Ms. Zheng Juan, Mr. Liu Y anzhao and Ms. Shen Lingyan. Ms. Zheng
Juan currently serves as the chairman of the Remuneration Committee.
Nomination Committee
We have established a nomination committee (the “ Nomination Committee ”) in
compliance with Rule 3.27A of the Listing Rules and with written terms of references in
compliance with the Corporate Governance Code set out in Appendix C1 to the Listing Rules.
The primary duties of the Nomination Committee are to make recommendations to our Board
regarding the appointment of Directors and Board succession. The Nomination Committee will
also consider the candidate(s)’ ability to devote sufficient time to fulfill the duties of the
Directors and members of the special committees of the Board and consider the candidate(s)
of independent non-executive director(s)’ ability to devote sufficient time to the Board if the
candidate(s) will be holding his/her seventh (or more) listed company directorships. The
Nomination Committee consists of three members, including Ms. Shen Lingyan, Mr. Cui and
Ms. Zheng Juan. Ms. Shen Lingyan currently serves as the chairman of the Nomination
Committee.
DIRECTORS AND SENIOR MANAGEMENT
– 310 –


--- page 321 ---
Connected Transaction Control Committee
We have voluntarily established a connected transaction control committee (the
“Connected Transaction Control Committee ”) with written terms of reference. The primary
duties of the Connected Transaction Control Committee are to routinely monitor the continuing
connected transactions and ensure the continuing connected transactions are conducted on
normal commercial terms. The Connected Transaction Control Committee will also review
material connected transactions required to be approved by the Board or Shareholders and
submit recommendations to the Board, and provide information for the independent non-
executive Directors and auditors to perform their periodical review of the connected
transactions. The Connected Transaction Control Committee consists of three members,
including Mr. Liu Y anzhao, Mr. Zhang Jianxiang and Ms. Zheng Juan. Mr. Liu Y anzhao
currently serves as the chairman of the Connected Transaction Control Committee.
BOARD DIVERSITY
The Board has adopted a board diversity policy (the “Board Diversity Policy” ) in order
to enhance the effectiveness of our Board and to maintain a high standard of corporate
governance. The Board Diversity Policy sets out the criteria in selecting candidates to our
Board, including but not limited to gender, age, cultural and educational background, ethnicity,
professional experience, skills, knowledge and length of service. The ultimate decision will be
based on merit and contribution that the selected candidates will bring to the Board. The Board
is of the view that our current Board composition satisfies the Board Diversity Policy. The
Nomination Committee is responsible for reviewing the diversity of the Board. After the
Listing, the Nomination Committee will monitor and evaluate the implementation of the Board
Diversity Policy from time to time to ensure its continued effectiveness.
Our Board currently consists of three female Directors and five male Directors with a
balanced mix of knowledge and skills, including but not limited to the metal and energy
industry, corporate management, financial accounting and auditing, and the legal industry. The
Board will invest more resources in training female staff who have long and relevant
experience in our business, with the aim of promoting them to senior management or
directorship positions within our Group. The Board will also take opportunities to increase the
proportion of female members over time when selecting and making recommendations on
suitable candidates for its appointments. While we recognize that the gender diversity at our
Board level can be improved given the majority of our Directors are male, we will continue to
apply the principle of appointments based on merits with reference to our diversity policy as
a whole. Our Board would also ensure that appropriate balance of gender diversity is achieved
with reference to investors’ expectation, and international and local recommended best
practices. The Company is of the view that the Board satisfies our Board Diversity Policy.
Furthermore, the Nomination Committee will review the Board composition at least once
annually taking into account the benefits of all relevant diversity aspects, and adhering to the
Board Diversity Policy when making a recommendation to the Board on the appointment of
new Directors. The Nomination Committee will also include in successive annual reports a
summary of the Board Diversity Policy, including any measurable objectives set for
implementing the Board Diversity Policy and the progress on achieving these objectives.
DIRECTORS AND SENIOR MANAGEMENT
–3 1 1–


--- page 322 ---
REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT
Our Directors receive compensation in the form of salaries, bonuses, other allowances
and benefits in kind, including our Company’s contribution to the pension scheme on their
behalf. We determine the salaries of our Directors based on each Director’s responsibilities,
qualifications, position and seniority. For details of the service contracts and appointment
letters that we have entered into with our Directors, see “Appendix IV — Statutory and General
Information — C. Further Information about our Directors — 1. Particulars of Directors’
service contracts and appointment letters”.
The aggregate amount of remuneration including salaries, allowances, performance
related bonuses, retirement benefits scheme contributions and benefits in kind we paid to our
Directors in respect of the financial years ended December 31, 2022, 2023, 2024 and the five
months ended May 31, 2025 was approximately RMB4,465 thousand, RMB6,970 thousand,
RMB11,287 thousand and RMB5,896 thousand, respectively. Further information on the
remuneration of each Director during the Track Record Period is set out in the Accountants’
Report in Appendix I to this prospectus.
Under the arrangements currently in force, the aggregate amount of remuneration
(including any discretionary bonus which may be paid) payable by our Group to our Directors
for the financial year ending December 31, 2025 is expected to be approximately RMB15,750
thousand.
The five highest paid individuals of the Group for the years ended December 31, 2022,
2023, 2024 and the five months ended May 31, 2025 include one, one, two and two director
(s) respectively, whose emoluments are included in the aggregate amount of fees, salaries,
discretionary bonuses, share-based payment expenses, pension plan contributions, welfare,
medical and other expenses we paid to the relevant Directors as set out above. For the financial
years ended December 31, 2022, 2023, 2024 and the five months ended May 31, 2025, the
aggregate amount of fees, salaries, allowances, performance related bonuses, retirement
benefits scheme contributions and other benefits paid to the remaining four, four, three and
three individuals were RMB5,740 thousand, RMB6,570 thousand, RMB9,248 thousand, and
RMB2,379 thousand respectively. Further details on the remuneration of the five highest paid
individuals during the Track Record Period is set out in the Accountants’ Report in Appendix
I to this prospectus.
During the Track Record Period, no remuneration was paid to any Director or any of the
five highest paid individuals of our Group as an inducement to join or upon joining our Group.
No compensation was paid to or receivable by any Director or any of the five highest paid
individuals during the Track Record Period for the loss of any office in connection with the
management of the affairs of any member of our Group. None of our Directors waived any
emoluments during the Track Record Period.
Save as disclosed above, no other payments have been paid or are payable in respect of
the Track Record Period to our Directors by our Group.
DIRECTORS AND SENIOR MANAGEMENT
– 312 –


--- page 323 ---
CORPORATE GOVERNANCE
Our Company is committed to achieving high standards of corporate governance with a
view to safeguarding the interests of our Shareholders. To accomplish this, our Company
intends to comply with all corporate governance requirements under the Corporate Governance
Code and Corporate Governance Report set out in Appendix C1 to the Hong Kong Listing
Rules after the Listing.
Our Directors recognize the importance of incorporating elements of good corporate
governance in the management structures and internal control procedures of our Group to
achieve effective accountability. Our Company intends to comply with all code provisions in
the Corporate Governance Code as set out in Appendix C1 to the Hong Kong Listing Rules
after the Listing.
COMPLIANCE ADVISOR
We have appointed Gram Capital Limited as our Compliance Advisor pursuant to Rules
3A.19 of the Listing Rules. The Compliance Advisor 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 Advisor 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 and share repurchases;
(c) where we propose to use the proceeds of the Global Offering in a manner different
from that detailed in this prospectus or where our business activities, developments
or results deviate from any forecast, estimate or other information in this prospectus;
and
(d) where the Hong Kong 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.
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 AND SENIOR MANAGEMENT
– 313 –


--- page 324 ---
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Cui, through his wholly owned subsidiary,
Bloomsbury Holding, is entitled to control the exercise of 100% voting rights of the issued
Shares of the Company.
Immediately following the completion of the Global Offering (assuming the Over-
allotment Option is not exercised), Mr. Cui, through Bloomsbury Holding, will be entitled to
control the exercise of 75% voting rights of the enlarged issued share capital of our Company.
Therefore, Mr. Cui and Bloomsbury Holding will remain as the Controlling Shareholders of our
Company immediately upon completion of the Global Offering.
NO COMPETITION AND CLEAR DELINEATION OF BUSINESS
The aluminum industry chain mainly consists of upstream aluminum production and
downstream aluminum alloy processing. Our Group is primarily engaged in alumina refining
and aluminum smelting within the upstream of the aluminum industry chain. Innovation Group
is a large modern comprehensive enterprise with a diverse range of business portfolios
spanning multiple sectors, including but not limited to aluminum alloy production and
commerce and trade, and mainly conducts aluminum alloys processing business through
Innovation New Material. Innovation New Material is specialized in the downstream of the
aluminum industry chain and focuses on the research, development, production and processing
of aluminum alloys and products, and provides comprehensive solutions for the field of
aluminum alloy processing, the products of which are widely used in 3C electronics,
lightweight automobiles, renewable energy industry, transport industry, industrial materials
industry and construction industry, etc.
There is clear business delineation between our Group and our Controlling Shareholders’
close associates within the aluminum industry chain, considering that:
(a) As of the Latest Practicable Date, Innovation Group is not engaged in any upstream
aluminum smelting business which competes or is likely to compete with our
business. Prior to the Reorganization, Innovation Group conducted both upstream
aluminum smelting business and downstream aluminum alloys processing business,
through Inner Mongolia Chuangyuan and Innovation New Material, respectively.
Upon completion of the Reorganization and as of the Latest Practicable Date, the
upstream aluminum smelting business has been conducted independently by our
Group, and Innovation Group is no longer engaged in the upstream aluminum
smelting business and primarily focuses on the aluminum alloys processing business
conducted through Innovation New Material.
The upstream alumina refining business of our Group is mainly conducted through
Shandong Chuangyuan, our connected subsidiary held by our Group as to 58.5% and
by Innovation Group as to 41.5%, respectively. Considering that Shandong
Chuangyuan is a subsidiary of our Group the operation and management of which
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 314 –


--- page 325 ---
are controlled by us, the minority interests in Shandong Chuangyuan held by
Innovation Group represents a strategic collaboration and there are no competing
interests between Innovation Group and our Group. There will continue to be clear
business delineation and no competition between our Company and Innovation
Group.
(b) As of the Latest Practicable Date, Innovation New Material is not engaged in any
alumina refining business or upstream aluminum smelting business, and is
specialized in the downstream aluminum alloy processing stage of the aluminum
alloy processing, which is clearly delineated from our business focus.
(c) Leveraging our extensive operational experience in the electrolytic aluminum
industry and in order to advance our globalization strategies, our Company, together
with Innovation Group and Innovation New Material, co-invested in the Saudi
Project, an integrated electrolytic aluminum industry chain project with expected
annual production capacity of 500.0 kt in Saudi Arabia. As of the Latest Practicable
Date, the Project Company of the Saudi Project was indirectly held by our Company
as to 33.6%, by Innovation Group and Innovation New Material as to 25.2% each,
and by Independent Third Parties as to 16%, respectively.
The Saudi government seeks to develop an integrated aluminum project within a
single project company, covering both upstream aluminum production and
downstream aluminum alloy processing. However, none of our Group, Innovation
Group and Innovation New Material possesses the full spectrum expertise and
experience required for such integrated aluminum project. Therefore, the Saudi
Project represents a collaborative effort among the Group and our Controlling
Shareholders’ close associates, leveraging each party’s expertise to invest in an
advantageous overseas expansion opportunity. Our Group and our Controlling
Shareholders’ close associates will maintain distinct business focuses on different
segments within the aluminum industrial chain. This co-investment serves as a
strategic collaboration aimed at achieving potentially higher investment returns. As
such, there will continue to be clear business delineation and no substantive
competition between our Group and our Controlling Shareholders’ close associates.
Except for the 71.82% equity interests in Innovation Group and the 15.54% equity
interest in Innovation New Material owned directly by Mr. Cui and the 32.46% equity interest
in Innovation New Material controlled indirectly by Mr. Cui through Innovation Group, which
is held by Mr. Cui as to 71.82%, none of our Directors is interested in Innovation Group or
Innovation New Material as of the Latest Practicable Date.
Each of our Controlling Shareholders confirms that, as of the Latest Practicable Date,
they did not have any interest in a business, apart from the business of our Group, which
competes or is likely to compete, directly or indirectly, with our business.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 315 –


--- page 326 ---
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Having considered the following factors, our Directors are satisfied that we are capable
of carrying on our business independently from our Controlling Shareholders and their
respective close associates upon Listing.
Management Independence
Our business is managed and operated by our Board and senior management, and our
Directors are of the view that our Board and senior management team are able to manage our
business independently from the Controlling Shareholders and their associates for the
following reasons:
(a) our executive Directors and senior management team do not hold any roles in our
Controlling Shareholders and/or their close associates;
(b) despite our chairman of the Board, Mr. Cui, is our Controlling Shareholder and
serves as the director and chairman of the board of Innovation New Material, he is
a non-executive Director and will not be involved in the day-to-day operations of
our business;
(c) according to the Memorandum and Articles of Association, in the event that there is
potential conflict of interest arising out of any transaction between our Company
and another company or entity to which a Director holds office, such Director shall
abstain from voting and shall not be counted towards the quorum for the voting;
(d) we have appointed three independent non-executive Directors to provide a balance
of the number of potentially interested and independent Directors with a view to
promoting the interests of the Company and our Shareholders as a whole. The
independent non-executive Directors will be entitled to engage professional advisers
at our cost for advice on matters relating to any potential conflict of interest arising
out of any transaction to be entered into between our Company and our Directors or
their respective associates;
(e) each of our Directors is aware of his/her fiduciary duties and responsibilities under
the Listing Rules as a director, which require that he/she acts in the best interests of
our Company and our Shareholders as a whole;
(f) where a Shareholders’ meeting is held to consider a proposed transaction in which
any of the Controlling Shareholders has a material interest, the relevant Controlling
Shareholder(s) shall abstain from voting on the resolutions and shall not be counted
towards the quorum for the voting; and
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 316 –


--- page 327 ---
(g) our Company has appointed Gram Capital Limited as our compliance advisor, which
will provide advice and guidance to our Group in respect of compliance with the
applicable laws and Listing Rules including various requirements relating to
Directors’ duties and corporate governance.
Operational Independence
Our Group holds all the relevant material licenses, qualifications and permits required for
conducting our business. Our Group has sufficient capital, facilities and employees to operate
our business independently from the Controlling Shareholders and their close associates. Our
Group also has independent access to our clients. We have our own accounting and financial
department, human resources and administration department, internal control department and
technology department. In addition, we have established our internal organizational and
management structure which includes shareholders’ meetings, our Board and its committees
and formulated the terms of reference of these bodies in accordance with the requirements of
the applicable laws and regulations, the Listing Rules and the Memorandum and Articles of
Association, so as to establish a regulated and effective corporate governance structure with
independent departments, each with specific areas of responsibilities. Our Directors are of the
view that our Group will be able to operate independently from the Controlling Shareholders
and their respective close associates after the Listing.
Procurement of Raw Materials from Shandong Chuangyuan
During the Track Record Period, we have procured certain raw materials, primarily
including alumina from Shandong Chuangyuan, our connected subsidiary held by our Group as
to 58.5% and by Innovation Group as to 41.5%, respectively. Such transactions are expected
to continue upon Listing. We have control over the operation and management of Shandong
Chuangyuan, and Shandong Chuangyuan has been supplying alumina to other subsidiaries
within the Group (mainly Inner Mongolia Chuangyuan) for a long period of time on terms that
are not less favorable than Independent Third Party suppliers, and is familiar with our Group’s
requirement on quality standards. Therefore, our Directors believe that it is the most
cost-efficient way and in the best interests of our Company and our Shareholders as a whole,
to purchase alumina from Shandong Chuangyuan.
Sales of Electrolytic Aluminum in Liquid Form to Innovation New Material
The Company is primarily engaged in the upstream aluminum production industry and
produces aluminum ingots in solid form or liquid aluminum for downstream processing into
various aluminum alloy products. Before 2023, the Group mainly sold aluminum ingots to
Independent Third Parties.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 317 –


--- page 328 ---
Since early 2023, our Group has been selling majority of our electrolytic aluminum in
liquid form to Innovation New Material and its subsidiaries, which are close associates of our
Controlling Shareholders. For the years ended December 31, 2023, 2024, and the five months
ended May 31, 2025 the Group’s sales of liquid aluminum to Innovation New Material
amounted to approximately RMB10,891.8 million, RMB11,579.7 million and RMB4,305.5
million, respectively, which accounted for approximately 78.8%, 76.4% and 59.7% of the total
revenue for the same period, respectively. Such transactions are expected to continue on a
recurring basis after the Listing and will constitute continuing connected transactions of our
Company under the Listing Rules. Details are set out in the section headed “Connected
Transactions — Non-exempt Continuing Connected Transactions — Provision of Products and
Services Framework Agreement” in this prospectus.
The sales of liquid aluminum to Innovation New Material and its subsidiaries are
conducted in the ordinary and usual course of business of our Group and our Directors confirm
that the terms of such transactions are determined at arm’s length negotiations and are no less
favorable to our Group than terms offered by Independent Third Parties. Our Directors believe
that the sales of majority of our liquid aluminum by our Group to Innovation New Material and
its subsidiaries do not indicate any undue reliance by our Group on our Controlling
Shareholders and their close associates, and are beneficial to the Company and our
Shareholders as a whole for the reasons set out below:
(1) Sufficient market demand for electrolytic aluminum and our broad customer base
Electrolytic aluminum is a type of commodity with a unique combination of properties,
high liquidity, standardized product and sufficient market demand.
Unique properties and widespread application of aluminum : Aluminum has unique
combination of properties (weight, strength, malleability, and conductivity). First, aluminum
has the properties of high strength and corrosion resistance but is in general lighter than steel.
Second, it has high electrical and thermal conductivity, making it a valuable alternative to
copper in electrical transmissions, especially when copper prices are high. Third, it is highly
malleable and ductile, allowing it to be easily shaped into various products through rolling,
extrusion, casting, and forging process to meet the various customized downstream uses in
machinery equipment and consumer durables. The unique combination of properties makes
aluminum highly attractive for a wide range of applications, including 3C electronics,
lightweight automotive, green energy industry, transport industry, industrial materials industry
and construction industry, etc.
Consistently rising global market demand for aluminum : According to CRU, aluminum
has experienced significant growth and is the second most widely used metal in the world
economy in tonnage since at least 1980 and continue to be the second largest throughout their
forecast period until 2050. Consumption of electrolytic aluminum reached 73 mt by the end of
2024. To satisfy burgeoning demand, global electrolytic aluminum production has nearly
tripled during the past two decades, increasing from 24 mt in 2000 to 73 mt in 2024,
representing a CAGR of approximately 5%.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 318 –


--- page 329 ---
Steadily growing market demand and trend in China for aluminum : China led the global
aluminum growth in the past two decades. It experienced a significant increase in electrolytic
aluminum consumption from approximately 3 mt in 2000 to approximately 45 mt in 2024,
representing a CAGR of approximately 12%. In 2024, China accounted for approximately 62%
of the global electrolytic aluminum consumption and 59% of the global electrolytic aluminum
production.
However, to optimize production capacity structure, in January 2018, China’s Ministry of
Industry and Information Technology officially introduced the Scheme of Aluminum Capacity
Swap, which keeps China’s total electrolytic aluminum capacity at the 2017 level of
approximately 45 mt per year (the “ aluminum capacity cap ”). Further in 2024, China’s State
Council issued the Special Action Plan for Energy Saving and Decarbonization in Electrolytic
Aluminum (ྌ), which sets the goal to apply at least 25% of
the aluminum capacity with clean power by the end of 2025. In recent years, China has
switched to a persistently net importer of electrolytic aluminum given the increasing market
demand whilst stagnating supply under the “aluminum capacity cap”. In 2024, China produced
approximately 43 mt but consumed approximately 45 mt of electrolytic aluminum, leaving a
deficit of approximately over 1 mt. Supported by bolstering electric vehicle demand and green
energy development, the Chinese electrolytic aluminum market will continue to stay at a deficit
position. According to CRU’s estimate, an annual market deficit above 1 mt will be sustained
throughout 2034.
Considering the reasons above, Chinese aluminum capacity is forecasted to converge to
the “aluminum capacity cap” with the capacity re-allocating to regions with low power costs
and green energy. According to CRU, Inner Mongolia has become one of the largest aluminum
production bases in China, with the fastest aluminum production growth, mainly due to the
advantageous natural condition, competitive power cost and abundant renewable power
resources. The aluminum production in Inner Mongolia increased from 4.5 mt in 2018 to 6.6
mt in 2024, representing a CAGR of 7%. Within Inner Mongolia, Huolinguole is the key
production base. According to CRU, Huolinguole produced 2.7 mt in 2024, representing
approximately 41% of Inner Mongolia’s annual production.
Most produced electrolytic aluminum is served for downstream aluminum alloy products.
According to CRU, China’s demand for downstream aluminum alloy reached 73 mt in 2024.
According to the Huolinguole municipal government, it consumes 65% of its annual
electrolytic aluminum production in 2023. The aluminum alloy produced in Inner Mongolia has
a broad downstream consumer demand nearby and is transported to the industrial bases and
manufacturing hubs in East and North China for downstream applications in various industries.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 319 –


--- page 330 ---
(2) Transparent market price and comparable terms
The price of electrolytic aluminum sold by our Group to Innovation New Material has
been determined based on arms’ length negotiation with reference to the market average price
of aluminum over the preceding week quoted from Shanghai Metals Market
(https://www.metal.com/ ) at the time of delivery, which was the market prevailing transparent
price. According to CRU, such price mechanism is in line with market practice. Other terms
of our Group’s sales of electrolytic aluminum to Innovation New Material are also normal
commercial terms comparable to those transactions between our Group and independent
third-party customers.
In addition, Innovation New Material, as a company listed on the Shanghai Stock
Exchange, is also subject to applicable PRC rules, regulations and A-share listing rules to
ensure that the terms for transactions with our Group under the Provision of Products and
Services Framework Agreement are fair and reasonable.
(3) Best interests to our Group, and mutually beneficial and complementary relationship
between our Group and Innovation New Material
Our cooperation with Innovation New Material is mutually beneficial and
complementary. By selling electrolytic aluminum in liquid form with short-distance
transportation, our Group is able to (i) improve production efficiency, (ii) reduce the cost in
terms of additional solidifying process and the transportation, (iii) reduce loss of electrolytic
aluminum during additional solidifying process and transportation, (iv) endeavor to align with
the PRC government Alloy Conversion Rate Target, which targets at least 90% electrolytic
aluminum produced to be sold in liquid form for further processing into aluminum alloy
products by the end of 2025, and (v) reduce carbon emissions; and Innovation New Material
is able to: (i) improve production efficiency, (ii) reduce the cost in terms of additional melting
process, (iii) reduce loss of electrolytic aluminum during the additional melting process, and
(iv) reduce carbon emissions. Moreover, liquid aluminum is a hazardous material with high
temperatures and can only be transported by special purpose vehicles. Transportation within 10
km is safer and it is usually easier to get approval of the transportation routes from local
authorities than longer-distance ones.
Furthermore, our Group has been providing a stable supply of liquid aluminum to
Innovation New Material since its commencement of operation in Inner Mongolia. There has
been a mutually beneficial relationship between our Group and Innovation New Material and
we expect such relationship to remain stable due to the following reasons:
Liquid aluminum is an industry with high entry barriers and sufficient downstream
demand : according to CRU, the upstream electrolytic aluminum is an industry with high entry
barriers, due to the policy barriers, high capital expenditure and access to energy and raw
materials, etc. As mentioned above, the Chinese electrolytic aluminum market will continue to
stay at a deficit position, and liquid aluminum will continue to have sufficient downstream
demand. According to CRU, the Chinese industry is currently experiencing a tight inventory
of aluminum ingots which leads to an increasing demand for electrolytic aluminum.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 320 –


--- page 331 ---
The Company is the sole supplier to Innovation New Material in Inner Mongolia : the
Company has been the sole supplier of liquid aluminum for Innovation New Material since the
commencement of operation of the manufacturing sites of Innovation New Material in Inner
Mongolia. According to CRU, taking into consideration of the safety and economic efficiency,
liquid aluminum is usually transported within 10 km. The Company is the sole upstream
electrolytic aluminum manufacturer within 10 km from the manufacturing sites of Innovation
New Material. As such, the Inner Mongolian subsidiaries of Innovation New Material have
been purchasing all the electrolytic aluminum they need from the Company in liquid form to
satisfy their production needs in Inner Mongolia. For the year ended December 31, 2024 and
the five months ended May 31, 2025, the total cost of purchases of electrolytic aluminum paid
by Innovation New Material to our Group accounted for approximately 19.02% and 16.60% out
of the total cost of purchases of electrolytic aluminum of Innovation New Material.
The strategic layout in Inner Mongolia by Innovation New Material : Innovation New
Material made a total investment amount of approximately RMB1.31 billion to build the
modern manufacturing sites in Inner Mongolia with annual production capacity of 1.22 mt,
which has been its key and strategic layout in North China region, taking into account that:
(i) the manufacturing sites of Innovation New Material in Inner Mongolia have been
serving an important role to cover its strategic downstream customers in various key
industries, including 3C electronics, lightweight automotive, green energy industry,
transport industry, industrial materials industry and construction industry in
Northeast China and North China, such as BMW China, Xiaomi Corporation ( ʃϷ
ණྠ) (1810.HK), AESC Group ( Ⴣ౻ਗɢ), FAW-Audi Automobile Co., Ltd. (݆ڗ
ʮ̡) and TBEA Co., Ltd. ( तᜊཥʈණྠ) (600089.SH). It is an
economically efficient way for Innovation New Material to cover these strategic
customers with shorter transportation; and
(ii) benefiting from the advantageous natural conditions in Inner Mongolia, upon
completion of construction of our large-scale wind power and solar power plants by
2026, we expect that 50% of our energy consumption will be derived from green
energy. Through purchasing green energy sourced electrolytic aluminum from us,
Innovation New Material will be able to better satisfy its downstream customers’
increasing demands on green energy sourced aluminum alloy products.
Except from the Group, Innovation New Material mainly purchases liquid aluminum from
China Hongqiao Group Limited (ʮ̡, a company listed on Hong Kong
Stock Exchange, stock code: 1378.HK, “ China Hongqiao ”) for its manufacturing sites in
Shandong province and Y unan province, which could not satisfy its business need in Inner
Mongolia. The prices of the liquid aluminum purchased by Innovation New Material from the
Group are not lower than the purchase price from its other supplier, namely, China Hongqiao,
during the Track Record Period.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 321 –


--- page 332 ---
Therefore, our Group is an indispensable supplier of liquid aluminum for Innovation New
Material and our stable supply of liquid aluminum plays a key part in Innovation New
Material’s strategic layout. There has been a mutually beneficial and complementary
relationship between our Group and Innovation New Material, and we reasonably believe that
the possibility of any material adverse change to the above business relationship will be low.
(4) Ability to effectively mitigate risk exposure arising from the reliance
Our Group has established its own marketing development teams to focus on building and
reinforcing our image and reputation in the industry for a larger market share and has
independent access to independent third-party customers through our own marketing network.
For the year ended 31 December 2022, the Group sold liquid aluminum and aluminum ingots
to over 100 independent third-party customers, the revenue from which accounted for
approximately 95% of our total revenue from sales of electrolytic aluminum in the same year.
For the year ended December 31, 2024 and the five months ended May 31, 2025, the Group
sold a total of approximately 73,505.80 tons and 68,505.8 tons of aluminum ingots to
independent third-party customers, generating revenue of approximately RMB1,303.41 million
and RMB1,217.70 million, representing approximately 10.12% and 22.0% of the total revenue
from sales of electrolytic aluminum for the same period. Our profit margin for selling
aluminum ingots is comparable to that of selling liquid aluminum, therefore the sales of
aluminum ingots to independent customers will not materially adversely affect our profitability
and financial positions.
As of the Latest Practicable Date, our Group has also entered into contracts with
independent third-party customers for sales of electrolytic aluminum in the form of aluminum
ingots, with the total contract value of approximately RMB1,424 million and RMB3,361
million for the year ended December 31, 2024 and the year ending December 31, 2025,
respectively. In the meantime, our Group is still under commercial negotiation with other
independent third-party customers for potential sales of electrolytic aluminum in the form of
aluminum ingots. The above have further evidenced the Group’s capability to source and sell
its products to independent third-party customers.
Our marketing development teams will routinely visit and communicate liquid aluminum
demand with potential downstream customers and evaluate such potential commercial
opportunities. As advised by the CRU, liquid aluminum can be safely transported up to a 50
km radius. As of the Latest Practicable Date, other than Innovation New Material, there are a
number of potential downstream customers within a 25 km radius around the Group’s
aluminum smelter in Inner Mongolia with a total production capacity of over 1.9 mt, which
exceeds the Group’s annual production capacity of 788.1 kt and indicates a robust market
demand in liquid aluminum from downstream customers in close proximity. Sales to these
potential customers will be economical with costs comparable to sales to Innovation New
Material. In addition, as of the Latest Practicable Date, the Company had received letters of
intent to purchase liquid aluminum with the total indicated demand of approximately 0.78 mt
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 322 –


--- page 333 ---
liquid aluminum from these independent third-party customers, which demonstrated the actual
sufficient market demand from independent customers in close proximity to purchase liquid
aluminum and to utilize the Group’s production capacity.
In the past, our independent third-party customer types have included commodity trading
companies and production companies. In the future, our Group may consider selling more
electrolytic aluminum to trading companies, which will purchase aluminum ingots before
re-selling to other customers. According to CRU, such third-party sales via trading companies
are not uncommon in China. Trading companies in general offer flexible contract terms,
including spot sales, long-term agreements, and volume commitment. Partnering with trading
companies helps the smelter to manage the sales channel, mitigate the risk of aluminum price
volatility, and optimize the cash flow. Going forward, our Group expects to continue to
strengthen cooperation with independent third-party customers, including trading companies.
Directors and Joint Sponsors’ views
Our Directors are of the view that the sales of the majority of our liquid aluminum to
Innovation New Material and its subsidiaries do not indicate any undue reliance by our Group
on our Controlling Shareholders and their close associates, considering that:
(i) CRU is of the view that it is an industry norm for upstream electrolytic aluminum
manufacturers to sell a majority of their liquid aluminum to downstream aluminum
alloy processors who are members of the same group and located in proximity to
each other with comparable production capacities;
(ii) our Group is able to effectively mitigate its risk exposure arising from its reliance
in light of sufficient demand for liquid aluminum from nearby customers, the
Group’s capability to sell aluminum ingots as evidenced by the successful historical
transactions with Independent Third Parties, and the overall persistent market deficit
in the China electrolytic aluminum industry; and
(iii) our Directors expect no material adverse change to our relationship with Innovation
New Material given (a) Innovation New Material is mutually dependent on the
Group. The Company has been the sole supplier of liquid aluminum for Innovation
New Material in Inner Mongolia given it is the only supplier within 10 km from the
manufacturing site of Innovation New Material; (b) according to CRU, it is an
industry norm for downstream aluminum alloy processors to cooperate with
upstream electrolytic aluminum producers who are members of the same group in a
long-term stable business relationship given they usually make significant
investments to establish industrial parks/factories in proximity with each other for
cooperation, and (c) before Listing, the Company intends to enter into the Provision
of Products/Services Framework Agreements with Innovation New Material for
three years, which will be renewed for another three years upon mutual consent.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 323 –


--- page 334 ---
Based on the due diligence conducted by the Joint Sponsors, nothing has come to the Joint
Sponsors’ attention that would reasonably cause them to disagree with the Directors’ view
above that the sales of the majority of the Company’s liquid aluminum to Innovation New
Material and its subsidiaries do not indicate any undue reliance by the Group on its Controlling
Shareholders and their close associates.
Co-investment into the Saudi Project with Innovation Group and Innovation New Material
Our Directors believe that the co-investment into the Saudi Project with Innovation Group
and Innovation New Material is beneficial to the Company and our Shareholders as a whole and
does not indicate any undue reliance on or direct competition with our Controlling
Shareholders’ close associates, due to the following reasons:
(1) the Saudi Project is a cooperation among the parties to leverage each other’s
expertise and achieve synergy, enhancing the chances of success and sharing risks
in an overseas investment. Therefore, the co-investment in the Saudi Project is
mutually beneficial to our Group and our Controlling Shareholders’ close associates
and reflects a mutual dependency between our Company and our Controlling
Shareholders’ close associates;
(2) each of our Group, Innovation Group and Innovation New Material specializes in
different stages within the aluminum industry chain and has different business focus
and competitive advantages in the Saudi Project. Our Group focuses on alumina
refining and aluminum smelting within the upstream of the aluminum industry
chain. Innovation Group, as a large modern comprehensive enterprise with
considerable influence in the metal industry, has the capability to leverage resources
and business opportunities. Innovation New Material focuses on the downstream
processing of aluminum alloy. Forming a joint venture between our Group,
Innovation Group and Innovation New Material enables each party to leverage their
respective strengths to operate an integrated aluminum project efficiently, and
enhances the Project Company’s prospects of seizing the overseas expansion
opportunity;
(3) according to CRU, the aluminum industry in Saudi Arabia presents a robust demand
with the demand for electrolytic aluminum expected to grow at a CAGR of 5.9%
from 2025 to 2028, which provides sufficient market opportunities for each of our
Group, Innovation Group and Innovation New Material to participate fully while
operating in synergy. Please also see “Business — Our Strategies — Proactively
Expand into Overseas Markets and Increase Overseas Production Capacities as a
Response to the Belt and Road Initiative (the “BRI”) — Saudi Arabia has unique
advantages for aluminum smelting investments” for details of the unique market
opportunities in Saudi Arabia. By combining each party’s distinct capabilities within
the value chain, our Group, Innovation Group and Innovation New Material can
focus on collaborative growth in international markets. This aligned effort increases
the Project Company’s overall competitiveness and ensures shared benefits in Saudi
Arabia market;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 324 –


--- page 335 ---
(4) our Group is able to find independent third-party partners with expertise in
downstream aluminum alloy processing. Nevertheless, considering the extensive
experience and leading positions of Innovation New Material in the aluminum alloy
processing sector, coupled with the long-term cooperation history between the
Group, Innovation Group and Innovation New Material, our Directors believe that
partnering with Innovation Group and Innovation New Material is the most
commercially reasonable choice to mitigate risks in the initial stage of our overseas
expansion and serves the best interests of our Shareholders as a whole; and
(5) considering that the significant investment and time required for the construction of
the Saudi Project, and that this partnership represents the most commercially
reasonable option for each party given their respective industry positions and the
long-term cooperation history, we anticipate this synergistic relationship to be
long-term collaboration and will remain stable and beneficial.
Financial Independence
Our Group has an independent financial system. We make financial decisions according
to our own business needs and neither our Controlling Shareholders nor their close associates
intervene with our use of funds. We have opened accounts with banks independently and do not
share any bank account with our Controlling Shareholders or their close associates. We have
made tax filings and paid tax independently from our Controlling Shareholders and their close
associates pursuant to applicable laws and regulations. We have established an independent
finance department as well as implemented sound and independent audit, accounting and
financial management systems. We have adequate internal resources and credit profile to
support our daily operations.
During the Track Record Period, certain of our Group’s bank and other borrowings
(“Guaranteed Loans ”) were guaranteed by Mr. Cui and/or his close associates (“ CP
Guarantors ”) through their personal or corporate guarantees (“ CP Guarantees ”). Our
Directors confirm that no consideration was payable or will be payable to the CP Guarantors.
As of the Latest Practicable Date, the aggregate outstanding principal amount of our bank,
other borrowings and lease liabilities due to the Independent Third Party lenders under the
Guaranteed Loans is approximately RMB12.49 billion. The Company had been in negotiation
with the lenders of the Guaranteed Loans and other potential Independent Third Party lenders
for refinancing arrangement and potential options to release or replace the CP Guarantees,
including but not limited to replacement of the CP Guarantees with mortgages secured by the
Group’s assets. All CP Guarantees will be fully released or replaced before Listing.
Save for the above, as of the Latest Practicable Date, we did not have any outstanding
loans or non-trade balances granted, guaranteed or pledged by any our Controlling
Shareholders to us.
Based on the above, our Company considers that our business is financially independent
of our Controlling Shareholders and their close associates.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 325 –


--- page 336 ---
CORPORATE GOVERNANCE
Our Company and Directors recognize the importance of protecting the rights and
interests of all Shareholders, including the rights and interests of our minority Shareholders.
We have adopted the following measures to ensure good corporate governance standards
and to avoid potential conflicts of interest between our Group and our Controlling
Shareholders:
(a) where a board meeting or Shareholders’ meeting is to be held for considering
proposed transactions in which any of our Directors or Controlling Shareholders or
any of their respective close associates has a material interest, the relevant Director
or Controlling Shareholder will not vote on the relevant resolutions;
(b) our Company has established internal control mechanisms to identify connected
transactions. Upon Listing, if our Company enters into connected transactions with
our Controlling Shareholders or any of their associates, our Company will comply
with the applicable Listing Rules;
(c) each Director is aware of his/her fiduciary duties as a Director, which require,
among other things, that he/she acts for the benefit of our Company and the
Shareholders as a whole and does not allow any conflict of interests between his/her
duties as a Director and his/her personal interests. A Director with material interests
shall make full disclosure in respect of matters that conflict or potentially conflict
with our interest and abstain from voting at the board meetings on matters in which
such Director or his/her associates have a material interest, unless the attendance or
participation of such Director at such meeting of the Board is specifically requested
by a majority of the independent non-executive Directors;
(d) our Company has established a Connected Transaction Control Committee, the
chairman and majority being our independent non-executive Directors, to routinely
monitor the continuing connected transactions and potential commercial
opportunities, which is dedicated to and be responsible for ensuring the continuing
connected transactions are conducted on normal commercial terms, to mitigate the
risk and safeguard the interests of the shareholders as a whole;
(e) the independent non-executive Directors will review, on an annual basis, whether
there are any conflicts of interests between the Group and our Controlling
Shareholders (the “ Annual Review ”) and provide impartial and professional advice
to protect the interests of our minority Shareholders;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 326 –


--- page 337 ---
(f) our Controlling Shareholders will undertake to provide all information necessary,
including all relevant financial, operational and market information and any other
necessary information as required by the independent non-executive Directors for
the Annual Review to the extent in compliance with all applicable laws, regulations
and rules;
(g) our Company will disclose decisions on matters reviewed by the independent
non-executive Directors either in its annual reports or by way of announcements;
(h) 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;
(i) our audit committee shall be responsible for overseeing the implementation of the
above measures;
(j) our market development teams will routinely visit and communicate liquid
aluminum demand with potential downstream customers and evaluate such potential
commercial opportunities; and
(k) we have appointed Gram Capital Limited as our compliance advisor to provide
advice and guidance to us in respect of compliance with the applicable laws and
regulations, as well as the Listing Rules, including various requirements relating to
corporate governance.
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
Group and our Controlling Shareholders, and to protect our minority Shareholders’ interests
after Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 327 –


--- page 338 ---
SUBSTANTIAL SHAREHOLDERS
So far as our Directors are aware, immediately following completion of the Global
Offering (assuming the Over-Allotment Option is not exercised), the following persons are
expected to have an interest and/or short positions in the Shares or underlying Shares of our
Company which would fall to be disclosed to us pursuant to 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 Nature of Interest
Shares held as
of the Latest
Practicable Date
Shares held immediately
following the completion
of the Global Offering (1)
Number Percentage Number Percentage
Mr. Cui (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Interests in
controlled
corporation
1,500,000,000 100% 1,500,000,000 75%
Bloomsbury
Holding
(2) /H1118/H1118/H1118/H1118/H1118/H1118
Beneficial owner 1,500,000,000 100% 1,500,000,000 75%
Notes:
(1) The calculation is based on the total number of 2,000,000,000 Shares in issue immediately following the
completion of the Global Offering (assuming that the Over-allotment Option is not exercised).
(2) Bloomsbury Holding, which is wholly owned by Mr. Cui, directly held 1,500,000,000 Shares of our
Company as of the Latest Practicable Date. As such, Mr. Cui is deemed to be interested in the Shares
held by Bloomsbury Holding.
Except as disclosed above, our Directors are not aware of any other person who will,
immediately following completion of the Global Offering (assuming the Over-Allotment
Option is not exercised), have any interest and/or short positions in the Shares or underlying
shares of our Company which would fall to be disclosed to us pursuant to 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.
SUBSTANTIAL SHAREHOLDERS
– 328 –


--- page 339 ---
AUTHORIZED AND ISSUED SHARE CAPITAL
The following is a description of the authorized and issued share capital of our Company
in issue and to be issued as fully paid or credited as fully paid as of the date of this prospectus
and immediately following the completion of the Global Offering.
As of the date of this prospectus
(a) Authorized Share Capital
Number Description of Shares
Aggregate nominal
value of Shares
10,000,000,000 Ordinary Shares of US$0.000005 each US$50,000.00
(b) Issued Share Capital
Number Description of Shares
Aggregate nominal
value of Shares
1,500,000,000 Ordinary Shares of US$0.000005 each US$7,500.00
Immediately following completion of the Global Offering (assuming the Over-Allotment
Option is not exercised)
(a) Authorized Share Capital
Number Description of Shares
Aggregate nominal
value of Shares
10,000,000,000 Ordinary Shares of US$0.000005 each US$50,000.00
(b) Issued Share Capital
Number Description of Shares
Aggregate nominal
value of Shares
1,500,000,000 Ordinary Shares of US$0.000005 each US$7,500.00
500,000,000 Ordinary Shares of US$0.000005 each to be
issued pursuant to the Global Offering
assuming the Over-Allotment Option is not
exercised
US$2,500.00
2,000,000,000 Total US$10,000.00
SHARE CAPITAL
– 329 –


--- page 340 ---
Immediately following completion of the Global Offering (assuming the Over-Allotment
Option is fully exercised)
(a) Authorized Share Capital
Number Description of Shares
Aggregate nominal
value of Shares
10,000,000,000 Ordinary Shares of US$0.000005 each US$50,000.00
(b) Issued Share Capital
Number Description of Shares
Aggregate nominal
value of Shares
1,500,000,000 Ordinary Shares of US$0.000005 each US$7,500.00
575,000,000 Ordinary Shares of US$0.000005 each to be
issued pursuant to the Global Offering
assuming the Over-Allotment Option is fully
exercised
US$2,875.00
2,075,000,000 Total US$10,375.00
ASSUMPTIONS
The above tables assume that the Global Offering becomes unconditional and the Shares
are issued pursuant to the Global Offering. The above tables also do not take into account any
Shares which may be issued or repurchased by us under the general mandates granted to our
Directors as referred to below.
RANKING
The Offer Shares will rank pari passu in all respects with all Shares currently in issue or
to be issued as mentioned in this prospectus, and will qualify and rank equally for all dividends
or other distributions declared, made or paid on the Shares on a record date which falls after
the date of this prospectus. Upon Listing, our Company will have one class of issued Shares
and each issued Share shall entitle its holder to one vote at a general meeting of our Company.
CIRCUMSTANCES UNDER WHICH GENERAL MEETINGS ARE REQUIRED
Pursuant to the Cayman Companies Act and the terms of the Memorandum of Association
and Articles, our Company may from time to time by ordinary resolution of shareholders (i)
increase its share capital; (ii) consolidate and divide its share capital into shares of larger
amount; (iii) divide its shares into several classes; (iv) subdivide its shares into shares of
smaller amount; and (v) cancel any shares which have not been taken or agreed to be taken.
In addition, our Company may subject to the provisions of the Cayman Companies Act reduce
SHARE CAPITAL
– 330 –


--- page 341 ---
its share capital or capital redemption reserve by its shareholders passing a special resolution.
See the section headed “Summary of the Constitution of our Company and Cayman Companies
Act — Articles of Association — Alteration of Capital” in Appendix III for further details.
GENERAL MANDATE TO ISSUE SHARES
Subject to the Global Offering becoming unconditional, our Directors have been granted
a general unconditional mandate, to allot, issue and deal with Shares with a total nominal value
of not more than the sum of:
 20% of the total number of Shares in issue immediately following completion of the
Global Offering (excluding any Shares to be issued pursuant to the exercise of the
Over-Allotment Option); and
 the aggregate number of Shares repurchased by our Company (if any) under the
general mandate referred to in the paragraph headed “Statutory and General
Information — Further Information about Our Company — Resolutions of our
Shareholders” in Appendix IV of this prospectus.
This general mandate to issue Shares will expire at the earliest of:
 the conclusion of the next annual general meeting of our Company unless otherwise
renewed by an ordinary resolution of our Shareholders in a general meeting, either
unconditionally or subject to conditions; or
 the expiration of the period within which our Company’s next annual general
meeting is required by the Memorandum of Association and Articles of Association
or any other applicable laws to be held; or
 the date on which it is varied or revoked by an ordinary resolution of our
Shareholders in a general meeting.
See the section headed “Statutory and General Information — Further Information about
Our Company — Resolutions of our Shareholders” in Appendix IV for further details of this
general mandate.
GENERAL MANDATE TO REPURCHASE SHARES
Subject to the Global Offering becoming unconditional, our Directors have been granted
a general unconditional mandate, to exercise all the powers of our Company to repurchase our
own securities with nominal value of up to 10% of the aggregate nominal value of our Shares
in issue immediately following the completion of the Global Offering (excluding any Shares
to be issued pursuant to the exercise of the Over-allotment Option).
SHARE CAPITAL
– 331 –


--- page 342 ---
The repurchase mandate only relates to repurchases made on the Stock Exchange, or on
any other stock exchange on which our Shares are listed (and which are recognized by the SFC
and the Stock Exchange for this purpose), and which are in accordance with the Listing Rules.
A summary of the relevant Listing Rules is set out in the section headed “Statutory and General
Information — Further Information about our Company — Repurchase of our Own Securities”
in Appendix IV .
This general mandate to repurchase Shares will expire at the earliest of:
 the conclusion of the next annual general meeting of our Company unless otherwise
renewed by an ordinary resolution of our Shareholders in a general meeting, either
unconditionally or subject to conditions; or
 the expiration of the period within which our Company’s next annual general
meeting is required by the Memorandum of Association and Articles of Association
or any other applicable laws to be held; or
 the date on which it is varied or revoked by an ordinary resolution of our
Shareholders passed in a general meeting.
See the section headed “Statutory and General Information — Further Information about
Our Company — Resolutions of our Shareholders” in Appendix IV for further details of the
repurchase mandate.
SHARE CAPITAL
– 332 –


--- page 343 ---
You should read the following discussion and analysis with our audited consolidated
financial information, including the notes thereto, included in the Accountants’ Report in
Appendix I to this prospectus. Our consolidated financial information has been prepared
in accordance with IFRSs.
The following discussion and analysis contain forward-looking statements that
reflect our current views with respect to future events and financial performance. These
statements are based on our assumptions and analysis in light of our experience and
perception of historical trends, current conditions and expected future developments, as
well as other factors we believe are appropriate under the circumstances. However ,
whether actual outcomes and developments will meet our expectations and predictions
depends on a number of risks and uncertainties. In evaluating our business, you should
carefully consider the information provided in this prospectus, including but not limited
to the sections headed “Risk Factors” and “Business.”
For the 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 mainly produce and sell electrolytic aluminum and alumina and other related types of
products, focusing on the high value-added upstream segments of the aluminum industry chain.
We focus on alumina refining and aluminum smelting within the upstream of the aluminum
industry chain. Our business mainly comprises the production and sales of electrolytic
aluminum as well as alumina and other related types of products. As of the Latest Practicable
Date, we had an annual production capacity of 788.1 kt of electrolytic aluminum and 1,200.0
kt of alumina. According to CRU, our aluminum smelter in Huolinguole, Inner Mongolia, was
the fourth-largest production base of electrolytic aluminum in terms of production output in
2024 in North China. We were the twelfth-largest electrolytic aluminum producer in terms of
production output in 2024 in China, according to the same source.
During the Track Record Period, we achieved a continual and stable improvement in our
revenue. Our revenue increased by 2.4% from RMB13,489.7 million in 2022 to RMB13,814.7
million in 2023, and by 9.8% from RMB13,814.7 million in 2023 to RMB15,163.2 million in
2024. Our revenue increased by 22.6% from RMB5,883.2 million in the five months ended
May 31, 2024 to RMB7,213.5 million in the same period of 2025.
Benefiting from our self-sufficient, complementary, synergistic and integrated ecosystem
across the electrolytic aluminum industry chain, we achieved industry-leading cost advantages
which significantly unleashed our profitability during the Track Record Period. In 2022, 2023,
2024 and the five months ended May 31, 2024 and 2025, our gross profit margin was 15.1%,
FINANCIAL INFORMATION
– 333 –


--- page 344 ---
16.9%, 28.2%, 27.9% and 19.9%, respectively, with an increase of 11.3 percentage points from
2023 to 2024. In 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, our
EBITDA margin (non-IFRS measure) was 20.5%, 21.3%, 31.6%, 31.8% and 23.1%, with an
increase of 10.3 percentage points from 2023 to 2024. In 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, our net profit margin was 6.8%, 7.8%, 17.3%, 17.0% and
11.9%, with an increase of 9.5 percentage points from 2023 to 2024. Our net profit increased
by 18.4% from RMB912.9 million in 2022 to RMB1,080.6 million in 2023, and increased
significantly from RMB1,080.6 million in 2023 to RMB2,629.5 million in 2024. Our net profit
decreased by 14.4% from RMB999.4 million in the five months ended May 31, 2024 to
RMB855.5 million in the same period of 2025.
BASIS OF PREPARATION
The Historical Financial Information (as defined in Appendix I to this prospectus) has
been prepared in accordance with International Financial Reporting Standards (“IFRSs”)
issued by the International Accounting Standards Board (“IASB”) and the principle of merger
accounting.
For the purpose of preparing and presenting the Historical Financial Information for the
Track Record Period, we have consistently applied all applicable accounting policies which
conform with IFRSs, International Accounting Standards (“IASs”), amendments and the
related interpretations issued by the IASB, which are effective for our accounting period
beginning on January 1, 2025 throughout the Track Record Period.
The Historical Financial Information includes applicable disclosures required by the
Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
(“Listing Rules”) and by the Hong Kong Companies Ordinance.
See Notes 2, 3 and 4 of the Accountants’ Report in Appendix I to this prospectus.
MAJOR FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations have been, and are expected to continue to be, materially
affected by a number of factors, many of which are beyond our control, including the
following:
General Factors
Our business and results of operations are impacted by general factors affecting the
development of our industry, which include:
 Overall economic conditions;
 The growth and competition environment of the electrolytic aluminum and alumina
industry;
FINANCIAL INFORMATION
– 334 –


--- page 345 ---
 Relevant laws and regulations, governmental policies and initiatives; and
 Occurrence of force majeure events, outbreak of pandemics or epidemics, acts of
war, social and economic chaos and natural disasters.
Company-specific Factors
Our business and results of operations are also affected by a number of key factors
specific to our Group, which mainly include:
Fluctuations in the prices of electrolytic aluminum and alumina
Our results of operations are sensitive to fluctuations in the prices of electrolytic
aluminum and alumina. In line with market practice, we adopt a standardized pricing policy for
our electrolytic aluminum and alumina products. Our revenue and cost of sales were affected
by the market prices of electrolytic aluminum and alumina. See “Business — Sales, Marketing
and Customer Service — Pricing and Payment.” According to CRU, the annual average of the
SHFE cash price of electrolytic aluminum per ton was approximately RMB19,945,
RMB18,678, RMB19,949, RMB19,659 and RMB20,270 in 2022, 2023, 2024 and the five
months ended May 31, 2024 and 2025, respectively, and the annual average of the CRU China
alumina price per ton was approximately RMB2,936, RMB2,906, RMB4,030, RMB3,393 and
RMB3,517 in the same respective periods, according to CRU. Our revenue generated from
electrolytic aluminum amounted to RMB12,881.9 million, RMB12,502.3 million,
RMB12,883.7 million, RMB5,276.0 million and RMB5,523.2 million in 2022, 2023, 2024 and
the five months ended May 31, 2024 and 2025, respectively, accounting for 95.5%, 90.5%,
85.0%, 89.7% and 76.6% of our total revenue in the same respective periods. Our revenue
generated from alumina and other related types of products amounted to RMB270.6 million,
RMB977.4 million, RMB1,849.5 million, RMB449.5 million and RMB1,523.7 million in 2022,
2023, 2024 and the five months ended May 31, 2024 and 2025, respectively, accounting for
2.0%, 7.1%, 12.2%, 7.6% and 21.1% of our total revenue in the same respective periods. Our
cost of electrolytic aluminum was RMB11,144.6 million, RMB10,472.6 million, RMB9,414.5
million, RMB3,829.5 million and RMB4,213.1 million in 2022, 2023, 2024 and the five
months ended May 31, 2024 and 2025, respectively, accounting for 97.3%, 91.2%, 86.5%,
90.3% and 72.9% of our total cost of sales in the same respective periods. Our cost of alumina
and other related types of products was RMB253.5 million, RMB916.5 million, RMB1,269.9
million, RMB342.2 million and RMB1,490.6 million in 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, respectively, accounting for 2.2%, 8.0%, 11.7%, 8.1% and
25.8% of our total cost of sales in the same respective periods.
The following table sets forth the sensitivity analysis of hypothetical fluctuation in the
sales price of electrolytic aluminum on gross profit during the Track Record Period, assuming
all other factors remain unchanged.
FINANCIAL INFORMATION
– 335 –


--- page 346 ---
Increase/decrease in the sales price of electrolytic aluminum
+ 5% - 5% + 10% - 10%
(RMB in millions)
Increase/(decrease) in gross
profit
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118644.1 (644.1) 1,288.2 (1,288.2)
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118625.1 (625.1) 1,250.2 (1,250.2)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118644.2 (644.2) 1,288.4 (1,288.4)
Five months ended May 31,
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276.2 (276.2) 552.3 (552.3)
The following table sets forth the sensitivity analysis of hypothetical fluctuation in the
sales price of alumina and other related types of products on gross profit during the Track
Record Period, assuming all other factors remain unchanged.
Increase/decrease in the sales price of alumina and
other related types of products
+ 5% - 5% + 10% - 10%
(RMB in millions)
Increase/(decrease) in gross
profit
2022 (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(101.6) 101.6 (203.2) 203.2
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.0 (5.0) 10.0 (10.0)
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853.3 (53.3) 106.6 (106.6)
Five months ended May 31,
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836.4 (36.4) 72.8 (72.8)
Note:
(1) We have recorded a decrease in gross profit in 2022 when the sales price of alumina and other related
types of products increase in the same year because the amount of outsourcing alumina procured
exceeded the amount of revenue from the sales of alumina and other related types of products in 2022.
The gross profit in 2022 was relatively more sensitive to the change in sales price of alumina and other
related types of products because we had higher proportion of outsourcing alumina this year, which was
more sensitive to the change in market prices of alumina.
Our production capacity and utilization rate
Our results of operations depend on our ability to fulfill customer orders, which partly
depends on our production capacity and utilization rate. We have been expanding our
production capacity during the Track Record Period and plan to further enhance the production
capacity for electrolytic aluminum to meet the increasing demand from downstream customers
for our products. For example, we plan to invest in an integrated electrolytic aluminum
industry chain project with an expected annual production capacity of 500.0 kt in Saudi Arabia.
See “Business — Our Strengths — Active Implementation of Globalization Strategies.” We
FINANCIAL INFORMATION
– 336 –


--- page 347 ---
will continue to plan and monitor the use of our production capacity to capture the increasing
market demand. As of the Latest Practicable Date, our electrolytic aluminum production base
in Huolinguole, Inner Mongolia, had an annual designed production capacity of 788.1 kt, and
our alumina production base in Binzhou, Shandong Province, had an annual designed
production capacity of 1,200.0 kt. The annual actual production volume of our aluminum
smelting was 744.1 kt, 757.9 kt, 755.4 kt, 315.6 kt and 310.7 kt of electrolytic aluminum in
2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, respectively. The annual
actual production volume of our alumina refining was 706.2 kt, 1,546.1 kt, 1,539.9 kt, 665.3
kt and 664.5 kt of alumina in 2022, 2023, 2024 and the five months ended May 31, 2024 and
2025, respectively.
Furthermore, a higher capacity utilization rate results in lower marginal cost of each unit
of products produced. The capacity utilization rate of our aluminum smelting was
approximately 94.4%, 96.2%, 95.6%, 96.8% and 95.3% for the years ended December 31,
2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, respectively. The
capacity utilization rate of our alumina refining was approximately 88.3%, 128.8%, 128.3%,
128.3% and 129.0% for the years ended December 31, 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, respectively. We will constantly monitor our capacity utilization
rate to ensure the effective use of our production capacity.
Our changes in cost structure and gross profit margin
We are dedicated to optimizing our cost advantages. We have consistently followed a
strategy of minimizing costs at every stage of production, establishing comprehensive and
sustainable cost advantages within the industry. Our cost of sales amounted to RMB11,448.6
million, RMB11,478.4 million, RMB10,886.7 million, RMB4,242.9 million and RMB5,780.9
million in 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, respectively,
accounting for 84.9%, 83.1%, 71.8%, 72.1% and 80.1% of our total revenue in the same
respective periods.
During the Track Record Period, our cost of sales primarily consisted of raw materials,
accounting for 78.0%, 77.0%, 73.0%, 73.0% and 75.4% of our total cost of sales in each
respective period. Our raw materials primarily consist of bauxite, coal, carbon anodes and
alumina. Coal, carbon anodes and alumina are the raw materials used to produce electrolytic
aluminum. Bauxite is the raw material used to produce alumina. Our cost of carbon anodes was
RMB2,122.3 million, RMB1,680.1 million, RMB1,254.5 million, RMB534.4 million and
RMB581.0 million in 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025,
respectively. Our cost of alumina was RMB2,302.3 million, RMB877.4 million, RMB783.0
million, RMB219.8 million and RMB795.7 million in 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, respectively. Our cost of bauxite was RMB907.2 million,
RMB2,401.4 million, RMB2,790.2 million, RMB1,066.4 million and RMB1,774.4 million in
2022, 2023, 2024 and the five months ended May 31, 2024 and 2025, respectively.
FINANCIAL INFORMATION
– 337 –


--- page 348 ---
The aluminum smelting process requires continuous and stable electricity supply. We
have established power plants and electricity generation facilities to produce our own
electricity. The cost of coal is the primary expense for our self-generated electricity. We also
procure electricity from the grid. Our cost of outsourced electricity was RMB881.3 million,
RMB918.5 million, RMB874.5 million, RMB356.9 million and RMB365.1 million, accounting
for 7.7%, 8.0%, 8.0%, 8.4% and 6.3% of our cost of sales in 2022, 2023, 2024 and the five
months ended May 31, 2024 and 2025, respectively.
We bear the risk of fluctuations in raw material prices and do not proactively pass on price
fluctuations to customers, as the prices at which we sell our products are primarily
benchmarked against average market prices. The success of our business operation and
financial condition depends on our ability to minimize costs at every stage of production. Our
cash costs of aluminum per ton amounted to approximately RMB15,112 in 2024, significantly
lower than China’s average of approximately RMB17,700 per ton, according to CRU. Our
Group’s cash cost in the five months ended May 31, 2025 was approximately RMB14,791.7 per
ton. According to CRU, our ability to manage the cash costs of aluminum per ton was among
the top 5% of all aluminum smelting companies in China and competitive on a global scale,
ranking among the top 30% in 2024 (comparing our cash costs in 2024 to the industry average
cash costs in China and on a global scale in 2024, respectively). We strive to further
consolidate our industry-leading cost advantage and maintain or improve our gross profit
margin, especially by maintaining long-term collaborative relationships with our suppliers. Our
gross profit margin was 15.1%, 16.9%, 28.2%, 27.9% and 19.9% in 2022, 2023, 2024 and the
five months ended May 31, 2024 and 2025, respectively.
The following table sets forth the sensitivity analysis of hypothetical fluctuation in cost
of raw materials on gross profit during the Track Record Period, assuming all other factors
remain unchanged.
Increase/decrease in the cost of raw materials
+ 5% - 5% + 10% - 10%
(RMB in millions)
(Decrease)/increase in gross
profit
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(572.4) 572.4 (1,144.9) 1,144.9
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(573.9) 573.9 (1,147.8) 1,147.8
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(544.3) 544.3 (1,088.7) 1,088.7
Five months ended May 31,
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(289.0) 289.0 (578.1) 578.1
FINANCIAL INFORMATION
– 338 –


--- page 349 ---
Our construction of green power plants
We proactively adhere to ESG principles to promote sustainable development. Along with
the rising carbon price, the adoption of green power is critical to the sustainable development
of electrolytic aluminum companies. We are committed to aligning with national goals of
reaching peak carbon emissions by 2030 and achieving carbon neutrality by 2060. We are
constructing wind power plants and solar power plants with a total projected installed capacity
of 1,750.0 MW. Phase I comprises (i) a wind power plant with an installed capacity of 540.0
MW, which had been operational and connected to the grid as of the Latest Practicable Date;
and (ii) a solar power plant with an installed capacity of 110.0 MW, 60.0 MW of which had
been installed and some had been operational and connected to the grid as of the Latest
Practicable Date. We expect the remaining capacity to be fully operational and connected to the
grid by the end of 2026. As of the date of this prospectus, construction of the majority of the
above (i) and (ii) under Phase I, with a total installed capacity of 457.0 MW, had been
completed, and the corresponding electricity generators were operational and connected to the
grid. Phase II comprises a wind power plant with an installed capacity of 1,000.0 MW, 500.0
MW of which had been under construction since March, 2025 and is expected to be fully
operational and connected to the grid by March 2026, and the other 500.0 MW had been under
site preparation for construction as of the Latest Practicable Date and is expected to be fully
operational and connected to the grid by October 2026. To further our commitment to green
power supply, we also plan to construct a 100.0 MW distributed solar power plant on-site, for
which we had been designing the construction project as of the Latest Practicable Date. It is
expected to commence its initial operation by the end of 2026.
As the majority of the projected installed capacity of the Phase I wind power plants and
solar power plants were operational as of the date of this prospectus and the remaining capacity
is anticipated to be fully operational by the end of 2026, and as we continue to procure green
electricity from the grid, our proportion of green energy utilized will continue to increase
towards the end of 2025. By the end of 2026 when both the above Phase I and Phase II wind
power plants and solar power plants become fully operational, and with procurement of green
electricity from the grid, we aim to achieve over 50% proportion of green energy utilized.
As of the Latest Practicable Date, we had commenced using green energy generators. Our
transition to green aluminum smelting operations is economically effective and positively
contributes to our financial condition and results of operations. We are constructing
larger-scale wind and solar power plants at our aluminum smelter in Inner Mongolia. This
includes wind power plants with an installed capacity of 1,540.0 MW and a solar power plant
with a capacity of 210.0 MW. With this optimized energy structure, the comprehensive
electricity costs for aluminum smelting is expected to reduce by 20% by the end of 2026. We
also expect to reduce carbon emissions through the construction of green power plants and the
usage of green power. According to CRU, using purely green power in electrolytic aluminum
significantly reduces the carbon footprint by approximately 11 tons per ton of electrolytic
aluminum produced, compared to using purely thermal power in aluminum smelting. Despite
the fact that the construction of green power plants is capital-intensive, by continuously
transitioning towards a green power supply, we prioritize sustainable development and strive
for a green transition in our operations.
FINANCIAL INFORMATION
– 339 –


--- page 350 ---
Our operating cash flow to support our business operation
We have historically funded our cash requirements principally from cash generated from
operations. Our net cash flows generated from operating activities amounted to RMB1,869.1
million, RMB4,554.2 million, RMB3,461.8 million and RMB832.9 million in 2022, 2023,
2024 and the five months ended May 31, 2025, respectively. See “— Liquidity and Capital
Resources — Cash flow.” Our ability to maintain sufficient and healthy operating cash flow is
critical for us to fund production expansion and energy transformation projects without
compromising our financial stability. By continuously monitoring and optimizing our operating
cash flow, we effectively capitalize on market growth opportunities.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
We have identified certain accounting policies that are significant to the preparation of
our Historical Financial Information. Some of our accounting policies require us to apply
estimates and assumptions as well as complex judgments related to accounting items. The
estimates and assumptions we use and the judgments we make in applying our accounting
policies have a significant impact on our financial position and operational results. Our
management continually evaluates such estimates, assumptions and judgments based on past
experience and other factors, including industry practices and expectations of future events that
are deemed to be reasonable under the circumstances. There has not been any material
deviation from our management’s estimates or assumptions and actual results, and we have not
made any material changes to these estimates or assumptions during the Track Record Period.
We do not expect any material changes in these estimates and assumptions in the foreseeable
future.
We set forth below those accounting policies that we believe are of critical importance to
us or involve the most significant estimates, assumptions and judgments used in the preparation
of our financial statements. Our material accounting policies, estimates, assumptions and
judgments, which are important for understanding our financial condition and results of
operations, are set forth in Note 4 of the Accountants’ Report in Appendix I to this prospectus.
Material Accounting Policies
Revenue from contracts with customers
During the Track Record Period, we were engaged in the following two principal
activities:
i. Production and sales of aluminum ingots and liquid aluminum (“Electrolytic
Aluminum Business”); and
ii. Production and sales of alumina and other related types of products (“Alumina
Business”).
FINANCIAL INFORMATION
– 340 –


--- page 351 ---
During the Track Record Period, we principally operated in the PRC. All revenue is
derived from the PRC and our non-current assets are all located in the PRC as well.
Revenue from the sales of electrolytic aluminum, alumina and other related types of products
and scrap and other materials
The performance obligation is satisfied upon delivery of the industrial products.
Transportation and handling activities that occur before customers obtain control are
considered as fulfillment activities. The normal credit term is seven days for liquid aluminum.
For aluminum ingots, alumina and other related types of products and scrap and other
materials, a full advance payment is normally required. Revenue arising from the sales of
electrolytic aluminum, alumina and other related types of products and scrap and other
materials is recognized at a point in time.
Revenue from electricity
Revenue arising from the sales of electricity is recognized at a point in time when
electricity is generated and transmitted. The revenue from sales of electricity is based on the
on-grid benchmark tariff rates of local coal-fired power plants, which can be adjusted by the
government. It is currently settled on a monthly basis.
Revenue from steam supply
Revenue arising from the sales of steam is recognized at a point in time and based on
steam consumption derived from meter readings. Payment is generally due within 30 days.
See Note 6 of the Accountants’ Report in Appendix I to this prospectus.
Property, plant and equipment
Property, plant and equipment are tangible assets that are held for use in the production
or supply of goods or services, or for administrative purposes (other than construction in
progress as described below). Property, plant and equipment are stated in the consolidated
statements of financial position at cost less subsequent accumulated depreciation and
subsequent accumulated impairment losses, if any.
Buildings, plant and machinery in the course of construction for production, supply or
administrative purposes are carried at cost, less any recognized impairment loss. Costs include
any costs directly attributable to bringing the asset to the location and condition necessary for
it to be capable of operating in the manner intended by management, including costs of testing
whether the related assets is functioning properly and, for qualifying assets, borrowing costs
capitalized in accordance with our accounting policy. Sale proceeds of items that are produced
while bringing an item of property, plant and equipment to the location and condition necessary
for it to be capable of operating in the manner intended by management (such as samples
produced when testing whether the asset is functioning properly), and the related costs of
FINANCIAL INFORMATION
– 341 –


--- page 352 ---
producing those items are recognized in the profit or loss. The cost of those items are measured
in accordance with the measurement requirements of IAS2. Depreciation of these assets, on the
same basis as other property assets, commences when the assets are ready for their intended
use.
Depreciation is recognized so as to write off the cost of assets less their residual values
over their estimated useful lives, using the straight-line method. The estimated useful lives,
residual values and depreciation method are reviewed at the end of each reporting period, with
the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognized upon disposal or when no future
economic benefits are expected to arise from the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item of property, plant and equipment is determined
as the difference between the sales proceeds and the carrying amount of the asset and is
recognized in profit or loss.
Our property, plant and equipment are depreciated on a straight-line basis over the
following estimated useful lives after taking into account their residual values:
Useful lives Residual value
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/H111810-50 years 5%
Plant and machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185-20 years 5%
Furniture and fixtures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 years 5%
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/H11184-5 years 5%
See Notes 4 and 15 of the Accountants’ Report in Appendix I to this prospectus.
Intangible assets
Intangible assets with finite useful lives that are acquired separately are carried at costs
less accumulated amortization and any accumulated impairment losses. Amortization for
intangible assets with finite useful lives is recognized on a straight-line basis over their
estimated useful lives. The estimated useful life and amortization method are reviewed at the
end of each reporting period, with the effect of any changes in estimate being accounted for
on a prospective basis.
An intangible asset is derecognized on disposal, or when no future economic benefits are
expected from use or disposal. Gains and losses arising from derecognition of an intangible
asset, measured as the difference between the net disposal proceeds and the carrying amount
of the asset, are recognized in profit or loss when the asset is derecognized.
FINANCIAL INFORMATION
– 342 –


--- page 353 ---
The above intangible assets have finite useful lives. Such intangible assets are amortized
on a straight-line basis over the following estimated useful lives:
Useful lives
Aluminum production quota /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 years
Power generation capacity indicators /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 years
Sewage charges license /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/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
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/H11185 years
See Notes 4 and 17 of the Accountants’ Report in Appendix I to this prospectus.
Right-of-use assets
The cost of right-of-use assets includes:
 the amount of the initial measurement of the lease liability; and
 any lease payments made at or before the commencement date.
Right-of-use assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities. Right-of-use assets
in which we are reasonably certain to obtain ownership of the underlying leased assets at the
end of the lease term are depreciated from the commencement date to the end of the useful life.
Otherwise right-of-use assets are depreciated on a straight-line basis over the shorter of its
estimated useful life and the lease term. When we obtain ownership of the underlying leased
assets at the end of the lease term, upon exercising purchase options, the cost of the relevant
right-of-use assets and the related accumulated depreciation and impairment loss are
transferred to property, plant and equipment. We present right-of-use assets as a separate line
item on the consolidated statements of financial position.
During the Track Record Period, we leased various plant and machinery for our
operations. Lease contracts are entered into for a fixed term ranging from three years to
eight years. Lease terms are negotiated on an individual basis and contain a wide range of
different terms and conditions. In determining the lease term and assessing the length of the
non-cancellable period, we apply the definition of a contract and determine the period for
which the contract is enforceable.
In addition, we have made lump sum payments upfront to government for leasehold lands.
We had obtained the land use right certificates for all such leasehold lands except for leasehold
lands with carrying amount of RMB233,848,000, RMB229,075,000, nil and nil as at December
31, 2022, 2023, 2024 and May 31, 2025, respectively. As of the Latest Practicable Date, we had
obtained such land use right certificates.
FINANCIAL INFORMATION
– 343 –


--- page 354 ---
Certain leaseholds lands of our Group had been pledged as securities for bank borrowings
as at December 31, 2022, 2023, 2024 and May 31, 2025 as summarized in Note 40 of the
Accountants’ Report in Appendix I to this prospectus. We regularly entered into short-term
leases for plant and machinery. As at December 31, 2022, 2023, 2024 and May 31, 2025, the
portfolio of short-term leases was similar to the portfolio of short-term leases to which the
short-term lease expense disclosed in Note 16 of the Accountants’ Report in Appendix I to this
prospectus.
See Notes 4 and 16 of the Accountants’ Report in Appendix I to this prospectus.
Financial instruments
Financial assets and financial liabilities are recognized when a group entity becomes a
party to the contractual provisions of the instrument. All regular-way purchases or sales of
financial assets are recognized and derecognized on a trade date basis. Regular-way purchases
or sales are purchases or sales of financial assets that require delivery of assets within the time
frame established by regulation or convention in the market place.
Financial assets and financial liabilities are initially measured at fair value except for
trade receivables arising from contracts with customers which are initially measured in
accordance with IFRS 15. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other than financial assets at FVTPL) are
added to or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of
financial assets at FVTPL are recognized immediately in profit or loss.
The effective interest method is a method of calculating the amortized cost of a financial
asset or financial liability and of allocating interest income and interest expense over the
reporting period. The effective interest rate is the rate that exactly discounts estimated future
cash receipts and payments (including all fees and points paid or received that form an integral
part of the effective interest rate, transaction costs and other premiums or discounts) through
the expected life of the financial asset or financial liability, or, where appropriate, a shorter
period, to the net carrying amount on initial recognition.
See Note 4 of the Accountants’ Report in Appendix I to this prospectus.
Inventories
Inventories are stated at the lower of cost and net realizable value. Costs of inventories
are determined on a weighted average method. Net realizable value represents the estimated
selling price for inventories less all estimated costs of completion and costs necessary to make
the sale. Costs necessary to make the sale include incremental costs directly attributable to the
sale and non-incremental costs which we must incur to make the sale.
FINANCIAL INFORMATION
– 344 –


--- page 355 ---
Critical Accounting Judgments and Estimate
In the application of our accounting policies, which are described in Note 4 of the
Accountants’ Report in Appendix I to this prospectus, the management of our Group is 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 and underlying
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 ongoing 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 the
revision affects both current and future periods.
Critical accounting judgements
Supplier finance arrangement
As disclosed in Notes 26, 29 and 34(b) of the Accountants’ Report in Appendix I to this
prospectus, we entered into supplier finance arrangements with a finance provider, which is
one of the largest aluminum products trading companies in China with a registered capital of
RMB200.0 million, to procure bauxite from overseas suppliers. To the best of our knowledge,
the finance provider was conducting business as usual as of the Latest Practicable Date. The
company commenced its collaboration with us in 2019 as one of our bauxite suppliers. To the
best knowledge of our Company, the finance provider is an Independent Third Party and does
not have any current or past family, business, employment, trust or financing relationship with
our Group, our substantial shareholders, directors or senior management or any of their
respective associates. The total amounts of financing provided by the finance provider were
RMB833.1 million, RMB1,200.7 million, RMB165.6 million and nil in 2022, 2023, 2024 and
the five months ended May 31, 2025, respectively, representing the payments that the suppliers
have already directly received from the finance provider. Our production activities require a
large volume of bauxite, and procuring large quantities of bauxite places considerable demand
on our working capital. Therefore, we entered into supplier finance arrangements to ensure our
liquidity. The finance provider received interest from us under our supplier finance
arrangement. These arrangements are common industry practice as the electrolytic aluminum
industry involves bulk commodity trading and requires substantial capital for raw material
procurement, according to CRU. Going forward, we will evaluate and decide whether to
continue using supplier financing arrangements based on a number of factors, such as our
liquidity position and finance costs. As advised by our PRC Legal Advisor, the relevant
contracts under such arrangements are in compliance with the applicable PRC laws and
regulations. We also entered into supplier finance arrangements with Bank of Jinzhou to
procure coal and carbon anodes from domestic suppliers and Bank of Qingdao to procure coal
and bauxite from domestic suppliers. During the years ended December 31, 2023 and 2024 and
the five months ended May 31, 2024 and 2025, bank loans under supplier finance arrangements
amounted to RMB77.5 million, RMB87.0 million, RMB83.0 million and RMB100.9 million,
FINANCIAL INFORMATION
– 345 –


--- page 356 ---
respectively, representing the payments to the suppliers by Bank of Jinzhou directly. During the
five months ended May 31, 2025, borrowings under supplier finance arrangements of RMB61.7
million represent the payments to the suppliers by Bank of Qingdao directly. Our obligations
to suppliers are legally extinguished on settlement by the finance provider, Bank of Jinzhou
and Bank of Qingdao. We then settle with the finance provider 90 days after settlement by the
finance provider with fixed interest ranging from 4.8%-5.4% per annum, settle with Bank of
Jinzhou one year after settlement by Bank of Jinzhou with fixed interest ranging from
3.10%-3.80% per annum and settle with Bank of Qingdao approximately one year after
settlement by Bank of Qingdao with fixed interest ranging from 3.95%-4.50% per annum.
These arrangements have extended the payment terms, which may be extended beyond the
original due dates of the respective invoices. In determining whether the liabilities resulting
from such arrangements are presented separately from trade payables, our Directors consider
whether the nature and function of these liabilities are sufficiently different from trade
payables. For liabilities that are part of the working capital used in our normal operating cycle,
they are presented within trade payables. In addition, our Directors determine whether the
arrangement has extinguished the entity’s obligation to suppliers and whether the terms and
conditions in the agreements with the finance provider or Bank of Jinzhou and Bank of
Qingdao are similar to our financing activities. When the liabilities are part of our financing
activities, we present these liabilities within other payables or bank borrowings in the
consolidated statement of financial position.
For the purpose of presenting cash flows statement, cash flows related to the liabilities
arising from supplier finance arrangements that are classified as trade payable are still part of
the working capital used in our principal revenue generating activities. Therefore, the cash
outflows to settle the trade payables under supplier finance arrangement are presented as
arising from operating activities. On the other hand, for the arrangements where the related
liability is not a trade or other payable because the liability represents borrowings of us, we
present cash outflows to settle these liabilities as arising from financing activities in the
consolidated statement of cash flows.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of
estimation uncertainty at the end of each reporting period, that have a significant risk of
causing a material adjustment to the carrying amounts of assets within the next 12 months.
Provision of ECL on trade receivables and other receivables
The credit loss allowance for trade receivables, other receivables and amounts due from
related parties are based on assumptions about the expected loss rates. We use judgment in
making these assumptions and selecting the inputs to the impairment calculation based on our
past history, existing market conditions as well as forward looking estimates at the end of each
reporting period. Changes in these assumptions and estimates could materially affect the result
of the assessment and it may be necessary to make additional impairment charge to the profit
or loss.
FINANCIAL INFORMATION
– 346 –


--- page 357 ---
Useful lives of property, plant and equipment, right-of-use assets and intangible assets
Our management determines the estimated useful lives and the depreciation/amortization
method in determining the related charges for its property, plant and equipment, right-of-use
assets and intangible assets. This estimate is referenced to useful lives of property, plant and
equipment, right-of-use assets and intangible assets of similar nature and functions in the
industry. Management will increase the depreciation charge where useful lives are expected to
be shorter than expected, or will write-off or write-down obsolete assets that have been
abandoned or sold. The carrying amount of property, plant and equipment at December 31,
2022, 2023, 2024 and May 31, 2025 is approximately RMB6,394.2 million, RMB6,686.1
million, RMB9,152.5 million and RMB10,742.0 million, respectively, as disclosed in Note 15
of the Accountants’ Report in Appendix I to this prospectus. The carrying amount of
right-of-use assets at December 31, 2022, 2023, 2024 and May 31, 2025 is approximately
RMB2,262.7 million, RMB2,233.2 million, RMB928.6 million and RMB1,083.7 million,
respectively, as disclosed in Note 16 of the Accountants’ Report in Appendix I to this
prospectus. The carrying amount of intangible assets at December 31, 2022, 2023, 2024 and
May 31, 2025 is approximately RMB3,359.8 million, RMB3,288.5 million, RMB3,217.7
million and RMB3,187.9 million, respectively, as disclosed in Note 17 of the Accountants’
Report in Appendix I to this prospectus.
DESCRIPTION OF MAJOR COMPONENTS OF OUR RESULTS OF OPERATIONS
The following table sets forth a summary of our results of operations in absolute amounts
and as a percentage of revenue for the years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,489.7 100.0 13,814.7 100.0 15,163.2 100.0 5,883.2 100.0 7,213.5 100.0
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,448.6) (84.9) (11,478.4) (83.1) (10,886.7) (71.8) (4,242.9) (72.1) (5,780.9) (80.1)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H11182,041.1 15.1 2,336.3 16.9 4,276.5 28.2 1,640.3 27.9 1,432.7 19.9
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H111893.5 0.7 97.9 0.7 55.2 0.4 19.8 0.3 22.8 0.3
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118(7.5) (0.1) (20.9) (0.1) (11.2) (0.1) (2.5) (0.0) (6.9) (0.1)
Listing expenses /H1118/H1118/H1118/H1118/H1118– – – – (16.4) (0.1) – – (4.7) (0.1)
Other gains and losses /H1118/H1118 206.0 1.5 5.2 0.0 18.5 0.1 10.8 0.2 6.9 0.1
FINANCIAL INFORMATION
– 347 –


--- page 358 ---
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Selling and marketing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2.8) (0.0) (0.3) (0.0) (0.6) (0.0) (0.1) (0.0) (0.9) (0.0)
Administrative expenses /H1118 (218.6) (1.5) (206.0) (1.5) (279.0) (1.9) (101.2) (1.7) (145.6) (2.0)
Impairment losses (gains)
under expected credit
loss model, net of
reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2.1) (0.0) (0.0) (0.0) 0.4 0.0 0.4 0.0 0.8 0.0
Share of results of
joint ventures /H1118/H1118/H1118/H1118/H1118– – – – (0.9) (0.0) – – (7.0) (0.1)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,061.9) (7.9) (939.7) (6.8) (761.6) (5.0) (366.5) (6.2) (262.4) (3.6)
Profit before tax /H1118/H1118/H1118/H1118/H11181,047.7 7.8 1,272.5 9.2 3,280.9 21.6 1,201.1 20.4 1,035.6 14.3
Income tax expenses /H1118/H1118/H1118(134.8) (1.0) (191.9) (1.4) (651.4) (4.3) (201.6) (3.4) (180.2) (2.5)
Profit and total
comprehensive income
for the year/period /H1118/H1118 912.9 6.8 1,080.6 7.8 2,629.5 17.3 999.4 17.0 855.5 11.9
Profit and total
comprehensive income
for the year/period
attributable to:
Owners of the Company /H1118 881.3 6.5 1,003.5 7.2 2,056.2 13.6 879.9 15.0 756.0 10.5
Non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831.6 0.3 77.1 0.6 573.3 3.7 119.5 2.0 99.5 1.4
Non-IFRS Measure
To supplement our consolidated financial statements which are presented in accordance
with IFRS, we also use EBITDA ( Non-IFRS measure ) as an additional financial measure,
which is not required by or presented in accordance with IFRS. We believe that this Non-IFRS
measure facilitates comparisons of operating performance from period to period and company
to company. We believe that this Non-IFRS measure provides useful information to investors
and others in understanding and evaluating our consolidated results of operations in the same
manner as they help our management. However, our presentation of EBITDA ( Non-IFRS
measure ) may not be comparable to similarly titled measures presented by other companies.
The use of such Non-IFRS measure has limitations as an analytical tool, and you should not
consider it in isolation from, or as a substitute for an analysis of, our results of operations or
financial condition as reported under IFRS.
FINANCIAL INFORMATION
– 348 –


--- page 359 ---
We define EBITDA ( Non-IFRS measure ) as profit and total comprehensive income for the
year adjusted for (i) depreciation of property, plant and equipment, (ii) depreciation of
right-of-use assets, (iii) amortization of intangible assets, (iv) net finance costs, and (v) income
tax expenses. The following table reconciles EBITDA ( Non-IFRS measure ) to our profit and
total comprehensive income for the year presented in accordance with IFRS for the years
indicated:
Y ear ended December 31,
Five months ended
May 31,
2022 2023 2024 2024 2025
(RMB in millions)
(unaudited)
Reconciliation of
profit and total
comprehensive
income for the
year to EBITDA
(Non-IFRS
measure)
Profit for the year /H1118/H1118/H1118912.9 1,080.6 2,629.5 999.4 855.5
Add:
– Depreciation of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118462.6 546.9 617.1 233.1 323.5
– Depreciation of
right-of-use assets /H1118 201.8 162.8 71.4 52.5 18.0
– Amortization of
intangible assets /H1118/H1118/H111875.0 71.3 71.6 29.7 29.8
– Net finance costs /H1118/H1118 971.8 890.8 743.1 357.2 260.4
– Income tax
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134.8 191.9 651.4 201.6 180.2
EBITDA (Non-IFRS
measure) /H1118/H1118/H1118/H1118/H1118/H1118/H11182,758.9 2,944.3 4,784.1 1,873.5 1,667.4
Revenue
Our total revenue increased by 2.4% from RMB13,489.7 million in 2022 to RMB13,814.7
million in 2023 and increased by 9.8% from RMB13,814.7 million in 2023 to RMB15,163.2
million in 2024. Our revenue further increased by 22.6% from RMB5,883.2 million in the five
months ended May 31, 2024 to RMB7,213.5 million in the same period of 2025.
FINANCIAL INFORMATION
– 349 –


--- page 360 ---
During the Track Record Period, we generated revenue from the sales of (i) electrolytic
aluminum; (ii) alumina and other related types of products; and (iii) others, mainly including
scrap and other materials, electricity and steam supply. During the Track Record Period, we
generated revenue primarily from electrolytic aluminum. Our revenue from electrolytic
aluminum amounted to RMB12,881.9 million, RMB12,502.3 million, RMB12,883.7 million,
RMB5,276.0 million and RMB5,523.2 million in 2022, 2023, 2024 and the five months ended
May 31, 2024 and 2025, respectively, accounting for 95.5%, 90.5%, 85.0%, 89.7% and 76.6%
of our total revenue in the same respective periods.
The following table sets forth a breakdown of our revenue by product in absolute amount
and as a percentage of our total revenue for the years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Electrolytic aluminum /H1118/H1118/H111812,881.9 95.5 12,502.3 90.5 12,883.7 85.0 5,276.0 89.7 5,523.2 76.6
– Liquid aluminum /H1118/H1118/H1118/H1118363.2 2.7 10,841.4 78.5 11,579.7 76.4 5,276.0 89.7 4,305.5 59.7
– Aluminum ingots /H1118/H1118/H1118/H111812,518.7 92.8 1,660.9 12.0 1,304.0 8.6 – – 1,217.7 16.9
Alumina and other related
types of products /H1118/H1118/H1118/H1118270.6 2.0 977.4 7.1 1,849.5 12.2 449.5 7.6 1,523.7 21.1
– Alumina (1) /H1118/H1118/H1118/H1118/H1118/H1118/H111868.1 0.5 626.6 4.6 1,647.8 10.9 408.4 6.9 1,338.6 18.6
– Other related types of
products (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118202.5 1.5 350.8 2.5 201.7 1.3 41.1 0.7 185.1 2.6
Others (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118337.2 2.5 335.0 2.4 430.0 2.8 157.7 2.7 166.6 2.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,489.7 100.0 13,814.7 100.0 15,163.2 100.0 5,883.2 100.0 7,213.5 100.0
Notes:
(1) Most of our alumina produced was used for the production of electrolytic aluminum.
(2) Mainly include aluminum hydroxide.
(3) Mainly include scrap and other materials, electricity and steam supply.
Our revenue from aluminum ingots increased significantly from nil in the five months
ended May 31, 2024 to RMB1,217.7 million in the same period of 2025, primarily due to (i)
our increase in sales of aluminum ingots to independent third parties. Such customers were
primarily existing customers; and (ii) our decrease in sales of liquid aluminum to related
parties to reduce the proportion of connected transactions. Our revenue from alumina increased
significantly from RMB408.4 million in the five months ended May 31, 2024 to RMB1,338.6
million in the same period of 2025, primarily due to our increase in sales of alumina to
independent third parties as we increased our procurement of high-lithium salt alumina
externally for our aluminum smelting to optimize electrolyte composition, which improves
electrolysis efficiency and extends the lifespan of our electrolyzers.
FINANCIAL INFORMATION
– 350 –


--- page 361 ---
The following table sets forth a breakdown of our revenue by related parties and third
parties in absolute amount and as a percentage of our total revenue for the years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Related parties (1) /H1118/H1118/H1118/H1118/H111876.8 0.6 10,942.8 79.2 11,611.0 76.6 5,290.1 89.9 4,317.7 59.9
Third parties /H1118/H1118/H1118/H1118/H1118/H1118/H111813,412.9 99.4 2,871.9 20.8 3,552.2 23.4 593.1 10.1 2,895.8 40.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,489.7 100.0 13,814.7 100.0 15,163.2 100.0 5,883.2 100.0 7,213.5 100.0
Note:
(1) See Note 41 of the Accountants’ Report in Appendix I to this prospectus for details of related parties.
The following table sets forth a breakdown of our revenue by aluminum alloy
manufacturers and traders in absolute amount and as a percentage of our total revenue for the
years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Aluminum alloy
manufacturers /H1118/H1118/H1118/H1118/H11183,008.3 22.3 12,251.4 88.7 13,573.7 89.5 5,664.8 96.3 6,199.5 85.9
Traders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,251.4 77.7 1,563.3 11.3 1,589.5 10.5 218.4 3.7 1,014.0 14.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,489.7 100.0 13,814.7 100.0 15,163.2 100.0 5,883.2 100.0 7,213.5 100.0
FINANCIAL INFORMATION
– 351 –


--- page 362 ---
The following table sets forth the revenue, sales volume and ASP of our major products
for the years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1)
(kt)
(RMB in
millions) (RMB/ton) (kt)
(RMB in
millions) (RMB/ton) (kt)
(RMB in
millions) (RMB/ton) (kt)
(RMB in
millions) (RMB/ton) (kt)
(RMB in
millions) (RMB/ton)
Electrolytic Aluminum /H1118/H1118/H1118/H1118733.1 12,881.9 17,572.3 773.0 12,502.3 16,173.9 752.6 12,883.7 17,119.9 315.4 5,276.0 16,725.6 312.1 5,523.2 17,697.7
– Liquid aluminum /H1118/H1118/H1118/H1118/H111819.0 363.2 19,110.5 671.3 10,841.4 16,148.8 679.0 11,579.7 17,053.6 315.4 5,276.0 16,725.6 243.6 (3) 4,305.5 17,675.3
– Aluminum ingots /H1118/H1118/H1118/H1118/H1118714.1 12,518.7 17,530.1 101.7 1,660.9 16,331.4 73.6 1,304.0 17,717.4 – – – 68.5 1,217.7 17,777.5
Alumina (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118706.3 1,774.9 2,513.0 1,563.7 3,792.9 2,425.6 1,539.6 5,407.8 3,512.5 663.9 1,946.6 2,932.1 660.2 1,939.8 2,938.2
– Sales to independent third
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827.0 68.1 2,522.2 295.4 626.6 2,121.2 444.5 1,647.8 3,707.1 135.9 408.4 3,005.2 460.7 1,338.6 2,905.6
– Intragroup sales /H1118/H1118/H1118/H1118/H1118679.3 1,706.8 2,512.7 1,268.3 3,166.3 2,496.5 1,095.1 3,760.0 3,433.6 528.0 1,538.2 2,913.0 199.5 601.2 3,013.2
Notes:
(1) The ASP is calculated by dividing the revenue (excluding value-added tax) by volume in the indicated period.
(2) Including the volume and revenue for intra-Group sales of alumina. In 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, the volume of alumina we sold intra-Group amounted to 679.3 kt, 1,268.3 kt,
1,095.1 kt, 528.0 kt and 199.5 kt, respectively, generating revenue of RMB1,706.8 million, RMB3,166.3
million, RMB3,760.0 million, RMB1,538.2 million and RMB601.2 million, respectively.
(3) The volume of our liquid aluminum sold decreased from 315.4 kt in the five months ended May 31, 2024 to
243.6 kt in the same period in 2025, primarily because we proactively increased the production and sales
volume of aluminum ingots to independent third parties to further broaden our customer base, therefore leading
to a decreased sales volume of liquid aluminum.
Product Prices during the Track Record Period
We mainly determine the price of our electrolytic aluminum products with reference to
the average price of electrolytic aluminum quoted on the website of Shanghai Metals Market,
which, as confirmed by CRU, indicates the market-assessed price of electrolytic aluminum
traded in China and is the market price indicator typically used by market players in China. See
“Business — Sales, Marketing and Customer Services — Pricing and Payment” and “Industry
Overview — Electrolytic Aluminum Analysis (Global and China) — Electrolytic Aluminum
Price Analysis.”
During the Track Record Period, the ASP of our products fluctuated in line with the
fluctuations in relevant market prices. Both the global market price of electrolytic aluminum
and the market price of electrolytic aluminum in China decreased in 2023 from 2022, mainly
due to the disruption arising from the Russia-Ukraine war, with Europe experiencing
significant economic headwinds and China experiencing an economic slowdown. The market
prices subsequently increased in 2024 as the global electrolytic aluminum market showed a
deficit of 35 kt, and remained relatively stable in early 2025. Both the global market price of
FINANCIAL INFORMATION
– 352 –


--- page 363 ---
alumina and the market price of alumina in China remained relatively stable in 2022 and 2023,
and subsequently surged in 2024 due to a global supply deficit mainly attributable to (i) several
alumina production disruption incidents as several refineries in Australia, India and Brazil
faced bauxite and energy supply constraints; (ii) temporary disruption to Guinea bauxite
shipments; and (iii) China’s persistent high demand for alumina. The market prices slightly
decreased in early 2025 due to a shift in market balance from a deficit in 2024 to a surplus in
2025 mainly attributable to (i) the fact that most of the aforementioned disruptions seen in 2024
had been gradually resolved towards the end of 2025 and in early 2025; and (ii) new refinery
capacity is expected to come online in 2025 and 2026. See “Industry Overview — Electrolytic
Aluminum Analysis (Global and China) — Electrolytic Aluminum Price Analysis” and
“Industry Overview — Alumina Analysis (Global and China) — Alumina Price Analysis” for
detailed analyses on the price changes of electrolytic aluminum and alumina. Similar to the
market prices, the ASP of our electrolytic aluminum decreased in 2023 from 2022,
subsequently increased in 2024 and remained relatively stable in early 2025. The ASP of our
alumina remained relatively stable in 2022 and 2023, subsequently surged in 2024 and slightly
decreased in early 2025.
During the Track Record Period, the ASP of our electrolytic aluminum products appeared
to be slightly lower than the SHFE spot price. See “Industry Overview — Electrolytic
Aluminum Analysis (Global and China) — Electrolytic Aluminum Price Analysis” for details.
This discrepancy arises primarily because (i) our ASP excludes the 13% value-added tax, which
is included in the SHFE spot price; and (ii) the SHFE spot price reflects solely aluminum ingot
prices, whereas our ASP represents both aluminum ingots and liquid aluminum sold to
customers. We mainly determine the price of electrolytic aluminum products with reference to
the average price of electrolytic aluminum quoted on the website of Shanghai Metals Market
as discussed above, and make adjustments taking into account the reasonable costs, such as the
processing cost and transportation cost. Our liquid aluminum is typically priced lower than our
aluminum ingot products due to the comparatively lower processing and transportation costs
associated with selling liquid aluminum. According to CRU, the price of liquid aluminum is
usually lower than aluminum ingots. This is mainly because liquid aluminum is directly
released from the aluminum smelter without the need for further casting and cooling. In
addition, its transportation range is limited due to the high temperature required during
transportation. In contrast, aluminum ingots undergo processes such as cooling in molds at the
production sites and provide greater market liquidity, justifying a higher price.
The ASP of our liquid aluminum products was higher than that of our aluminum ingot
products in 2022. This is because we only sold a relatively small amount of liquid aluminum
products in 2022, mostly were sold in the first quarter, whereas we sold a relatively large
amount of aluminum ingot products throughout the year. In 2022, the market prices of
electrolytic aluminum generally decreased throughout the year, as confirmed by CRU, resulting
in the ASP of our liquid aluminum products being higher than that of our aluminum ingot
products. Similarly, the ASP of our alumina products sold to independent third parties varied
from the ASP of those sold intragroup in 2022, 2023 and 2024. This variance was primarily
because we only sold a small amount of alumina products to independent third parties at
limited times of 2022, 2023 and 2024. The market prices for alumina fluctuated within 2022
and 2023 and surged in 2024, resulting in the ASP of our alumina products sold to independent
third parties differing from those sold intragroup.
FINANCIAL INFORMATION
– 353 –


--- page 364 ---
During the Track Record Period, the ASP of our alumina products appeared to be slightly
lower than the average market price of alumina, namely the CRU China alumina price, in
China. See “Industry Overview — Alumina Analysis (Global and China) — Alumina Price
Analysis.” This discrepancy is primarily because (i) our ASP excludes the 13% value-added
tax, which is included in the market average; and (ii) the CRU China alumina price averages
alumina prices in multiple regions, including Henan, Shanxi, Guangxi, Guizhou and Shandong
Provinces. According to CRU, the market prices in Shandong Province, where we sold most of
our alumina products, differ from the average prices in other provinces tracked by CRU due
to regional differences in production costs, transportation expenses as well as supply and
demand dynamics. Market prices in Shandong Province are generally slightly lower than those
in other provinces monitored by CRU China alumina price. This is mainly because Shandong
Province is a key region for alumina production in China, resulting in a relatively more stable
supply, lower transportation expenses due to proximity to alumina refineries, and lower
production costs due to economies of scale.
The following table sets forth the revenue, sales volume and ASP of our sales by product
type and by customer type (aluminum alloy manufacturers and traders) for the years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1)
(kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton)
Electrolytic aluminum /H1118/H1118/H1118/H1118733.1 12,881.9 17,572.3 773.0 12,502.3 16,173.9 752.6 12,883.7 17,119.9 315.4 5,276.0 16,725.6 312.1 5,523.2 17,697.7
– Aluminum alloy
manufacturers /H1118/H1118/H1118/H1118/H1118/H1118147.5 2,573.5 17,447.5 695.2 11,231.3 16,155.7 696.3 11,888.7 17,073.4 315.4 5,276.0 16,725.6 293.1 5,183.2 17,684.1
– Traders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118585.6 10,308.7 17,603.7 77.8 1,271.0 16,336.8 56.2 995.0 17,704.6 – – – 19.0 340.0 17,894.7
Alumina (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118706.3 1,774.9 2,513.0 1,563.7 3,792.9 2,425.6 1,539.6 5,407.8 3,512.5 663.9 1,946.6 2,932.1 660.2 1,939.8 2,938.2
– Aluminum alloy
manufacturers /H1118/H1118/H1118/H1118/H1118/H1118704.4 1,769.5 2,512.1 1,531.8 3,699.1 2,414.9 1,425.4 5,028.7 3,527.9 608.5 1,780.7 2,926.3 474.4 (3) 1,430.4 (3) 3,015.2
– Traders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.9 5.4 2,842.1 31.9 93.8 2,940.4 114.2 379.1 3,321.1 55.4 165.9 2,996.3 185.8 (3) 509.4 (3) 2,741.6 (4)
Notes:
(1) The ASP is calculated by dividing the revenue by volume in the indicated period.
(2) Including the volume and revenue for intra-Group sales of alumina. In 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, the volume of alumina we sold intra-Group amounted to 679.3 kt, 1,268.3 kt,
1,095.1 kt, 528.0 kt and 199.5 kt, respectively, generating revenue of RMB1,706.8 million, RMB3,166.3
million, RMB3,760.0 million, RMB1,538.2 million and RMB601.2 million, respectively.
(3) In the five months ended May 31, 2025, to further optimize our revenue stream and cost structure, we actively
expanded alumina sales to nearby customers, achieving increased sales volumes to trader customers. During
the same time, we actively decreased the amount of intra-Group sales of alumina (which counted as sales to
an aluminum alloy manufacturer) and procured more alumina for our electrolytic aluminum production from
nearby suppliers.
(4) The ASP of alumina sold to aluminum alloy manufacturers decreased from RMB2,996.3 in the five months
ended May 31, 2024 to RMB2,731.6 in the same period in 2025, primarily due to the dynamic changes in the
market prices of alumina. The majority volume of alumina we sold to traders in the five months ended May
31, 2025 was sold after February 2025, where the market price of alumina decreased significantly from the
peak in January 2025, according to CRU. In contrast, we sold alumina to traders throughout the five months
ended May 31, 2024, during which the market price of alumina steadily increased, according to the same
source.
FINANCIAL INFORMATION
– 354 –


--- page 365 ---
The following table sets forth the revenue, sales volume and ASP by product type and by
customer type (aluminum alloy manufacturers and traders) for the years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1) Volume Revenue ASP (1)
(kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton) (kt)
(RMB in
million) (RMB/ton)
Electrolytic aluminum /H1118/H1118/H1118/H1118733.1 12,881.9 17,572.3 773.0 12,502.3 16,173.9 752.6 12,883.7 17,119.9 315.4 5,276.0 16,725.6 312.1 5,523.2 17,697.7
– Connected persons /H1118/H1118/H1118/H1118 4.4 74.1 16,840.9 674.6 10,892.9 16,147.2 679.1 11,580.3 17,052.4 315.4 5,276.0 16,725.6 243.6 (4) 4,305.5 17,675.3
– Independent Third Parties /H1118/H1118 728.7 12,807.8 17,576.2 98.4 1,609.4 16,355.7 73.5 1,303.4 17,733.3 – – – 68.5 1,217.7 17,777.5
Alumina (2)(3) /H1118/H1118/H1118/H1118/H1118/H1118706.3 1,774.9 2,513.0 1,563.7 3,792.9 2,425.6 1,539.6 5,407.8 3,512.5 663.9 1,946.6 2,932.1 660.2 1,939.8 2,938.2
Notes:
(1) The ASP is calculated by dividing the revenue by volume in the indicated period.
(2) Including the volume and revenue for intra-Group sales of alumina. In 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, the volume of alumina we sold intra-Group amounted to 679.3 kt, 1,268.3 kt,
1,095.1 kt, 528.0 kt and 199.5 kt, respectively, generating revenue of RMB1,706.8 million, RMB3,166.3
million, RMB3,760.0 million, RMB1,538.2 million and RMB601.2 million, respectively.
(3) Except for intra-Group sales of alumina, substantially all of our revenue from alumina and related types of
products was generated from Independent Third Parties during the Track Record Period.
(4) The volume of our electrolytic aluminum sold to connected persons, which is all liquid aluminum, decreased
from 315.4 kt in the five months ended May 31, 2024 to 243.6 kt in the same period in 2025, primarily because
we proactively increased the production and sales volume of aluminum ingots to independent third parties to
further broaden our customer base, therefore leading to a decreased sales volume of liquid aluminum sold to
connected persons.
Cost of Sales
Our cost of sales was RMB11,448.6 million, RMB11,478.4 million, RMB10,886.7
million, RMB4,242.9 million and RMB5,780.9 million in 2022, 2023, 2024 and the five
months ended May 31, 2024 and 2025, respectively. During the Track Record Period, our cost
of sales primarily comprised (i) the cost of raw materials, mainly representing the procurement
costs for coal, bauxite, carbon anode, alumina and other raw materials; (ii) the cost of
outsourced electricity; (iii) depreciation; and (iv) staff costs.
FINANCIAL INFORMATION
– 355 –


--- page 366 ---
The following table sets forth a breakdown of our cost of sales by product in absolute
amount and as a percentage of our total cost of sales for the years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Electrolytic aluminum /H1118/H1118/H111811,144.6 97.3 10,472.6 91.2 9,414.5 86.5 3,829.5 90.3 4,213.1 72.9
Alumina and other related
types of products /H1118/H1118/H1118/H1118253.6 2.2 916.5 8.0 1,269.9 11.7 342.2 8.1 1,490.6 25.8
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850.4 0.5 89.3 0.8 202.3 1.8 71.2 1.6 77.2 1.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,448.6 100.0 11,478.4 100.0 10,886.7 100.0 4,242.9 100.0 5,780.9 100.0
Note:
(1) Mainly include scrap and other materials, electricity and steam supply.
The following table sets forth a breakdown of our cost of sales by nature in absolute
amount and as a percentage of the total cost of sales for the years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Raw materials (1)
Coal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,122.1 27.3 3,106.9 27.1 2,639.6 24.2 1,071.7 25.3 988.4 17.1
Bauxite /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118907.2 7.9 2,401.4 20.9 2,790.2 25.6 1,066.4 25.1 1,774.4 30.7
Carbon anode /H1118/H1118/H1118/H1118/H11182,122.3 18.5 1,680.1 14.6 1,254.5 11.5 534.4 12.6 581.0 10.1
Alumina /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,302.3 20.1 877.4 7.6 783.0 7.2 219.8 5.2 795.7 13.8
Other materials (2) /H1118/H1118/H1118/H1118476.0 4.2 770.0 6.7 484.0 4.5 204.8 4.8 214.2 3.7
Electricity (outsourcing) /H1118 881.3 7.7 918.5 8.0 874.5 8.0 356.9 8.4 365.1 6.3
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118711.6 6.2 735.4 6.4 643.3 5.9 255.0 6.0 336.8 5.8
Staff cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333.4 2.9 309.5 2.7 347.2 3.2 142.4 3.4 148.6 2.6
Others (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118592.5 5.2 679.1 6.0 1,070.4 9.9 391.5 9.2 576.7 9.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,448.6 100.0 11,478.4 100.0 10,886.7 100.0 4,242.9 100.0 5,780.9 100.0
Notes:
(1) Carbon anodes, coal and alumina are raw materials used to produce electrolytic aluminum. Bauxite is
the raw material to produce alumina.
(2) Mainly include steam, liquid alkali and aluminum fluoride.
(3) Mainly include equipment costs, maintenance costs and environmental protection costs.
FINANCIAL INFORMATION
– 356 –


--- page 367 ---
Gross Profit and Gross Profit Margin
We had gross profit of RMB2,041.1 million, RMB2,336.3 million, RMB4,276.5 million,
RMB1,640.3 million and RMB1,432.7 million in 2022, 2023, 2024 and the five months ended
May 31, 2024 and 2025, respectively. Our gross profit margin was 15.1%, 16.9%, 28.2%,
27.9% and 19.9% in 2022, 2023, 2024 and the five months ended May 31, 2024 and 2025,
respectively.
The following table sets forth a breakdown of our gross profit and gross profit margin by
product type for the years indicated:
Y ear ended December 31, Five months ended May 31,
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
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Electrolytic aluminum (1) /H1118 1,737.3 13.5 2,029.7 16.2 3,469.2 26.9 1,446.5 27.4 1,310.1 23.7
– Liquid aluminum /H1118/H1118/H1118/H111883.5 23.0 1,783.3 16.4 3,149.7 27.2 1,446.5 27.4 1,043.1 24.2
– Aluminum ingots /H1118/H1118/H1118/H11181,653.8 13.2 246.4 14.8 319.5 24.5 – – 267.0 21.9
Alumina and other related
types of products /H1118/H1118/H1118/H111817.0 6.3 60.9 6.2 579.6 31.3 107.3 23.9 33.1 2.2
– Alumina /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(0.1) (0.1) 40.7 5.7 511.4 31.0 97.2 23.8 36.6 2.7
– Other related types of
products (2) /H1118/H1118/H1118/H1118/H1118/H1118/H111817.1 8.4 20.2 7.8 68.2 33.8 10.1 24.6 (3.5) (1.9)
Others (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118286.8 85.1 245.7 73.3 227.7 53.0 86.5 54.9 89.5 53.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,041.1 15.1 2,336.3 16.9 4,276.5 28.2 1,640.3 27.9 1,432.7 19.9
Notes:
(1) The amounts represent the gross profit and gross profit margin corresponding to sales to external
customers for each product. For alumina sold intra-Group, we use it to produce electrolytic aluminum
further sold to customers. Therefore, the gross margin corresponding to the intra-Group sales of alumina
was absorbed in the gross profit of the sales of electrolytic aluminum.
(2) Mainly include aluminum hydroxide.
(3) Mainly include scrap and other materials, electricity and steam supply.
FINANCIAL INFORMATION
– 357 –


--- page 368 ---
The following table sets forth a breakdown of our gross profit and gross profit margin by
aluminum alloy manufacturers and traders for the years indicated:
Y ear ended December 31, Five months ended May 31,
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 millions, except for percentages)
(unaudited)
Electrolytic aluminum (1) /H1118 1,737.3 13.5 2,029.7 16.2 3,469.2 26.9 1,446.5 27.4 1,310.1 23.7
– Aluminum alloy
manufacturers /H1118/H1118/H1118/H1118/H1118331.3 12.9 1,812.8 16.1 3,221.3 27.1 1,446.5 27.4 1,236.7 23.9
– Traders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,406.0 13.6 216.9 17.1 247.9 24.9 – – 73.4 21.6
Alumina and other related
types of products /H1118/H1118/H111817.0 6.3 60.9 6.2 579.6 31.3 107.3 23.9 33.1 2.2
– Aluminum alloy
manufacturers /H1118/H1118/H1118/H1118/H111810.4 7.5 36.7 5.2 421.9 32.4 61.6 24.2 33.6 3.9
– Traders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.6 5.0 24.1 8.8 157.7 28.9 45.7 23.5 (0.5) (0.1)
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118286.8 85.1 245.7 73.3 227.7 53.0 86.5 54.9 89.5 53.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,041.1 15.1 2,336.3 16.9 4,276.5 28.2 1,640.3 27.9 1,432.7 19.9
Notes:
(1) The amounts represent the gross profit and gross profit margin corresponding to sales to external
customers for each product. For alumina sold intra-Group, we use it to produce electrolytic aluminum
further sold to customers. Therefore, the gross margin corresponding to the intra-Group sales of alumina
was absorbed in the gross profit of the sales of electrolytic aluminum.
(2) Mainly include scrap and other materials, electricity and steam supply.
The following table sets forth a breakdown of our gross profit and gross profit margin by
connected persons and Independent Third Parties for the years indicated:
Y ear ended December 31, Five months ended May 31,
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 millions, except for percentages)
(unaudited)
Electrolytic aluminum (1) /H1118 1,737.3 13.5 2,029.7 16.2 3,469.2 26.9 1,446.5 27.4 1,310.1 23.7
– Connected persons /H1118/H1118/H1118 7.6 10.2 1,789.2 16.4 3,149.9 27.2 1,446.5 27.4 1,043.1 24.2
– Independent Third
Parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,729.7 13.5 240.5 14.9 319.3 24.5 – – 267.0 21.9
Alumina and other related
types of products (2) /H1118/H1118/H111817.0 6.3 60.9 6.2 579.6 31.3 107.3 23.9 33.1 2.2
Others (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118286.8 85.1 245.7 73.3 227.7 53.0 86.5 54.9 89.5 53.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,041.1 15.1 2,336.3 16.9 4,276.5 28.2 1,640.3 27.9 1,432.7 19.9
FINANCIAL INFORMATION
– 358 –


--- page 369 ---
Notes:
(1) The amounts represent the gross profit and gross profit margin corresponding to sales to external
customers for each product. For alumina sold intra-Group, we use it to produce electrolytic aluminum
further sold to customers. Therefore, the gross margin corresponding to the intra-Group sales of alumina
was absorbed in the gross profit of the sales of electrolytic aluminum.
(2) Our gross profit from alumina and related types of products was generated solely from third parties
during the Track Record Period.
(3) Mainly include scrap and other materials, electricity and steam supply.
Other Income
We had other income of RMB93.5 million, RMB97.9 million, RMB55.2 million,
RMB19.8 million and RMB22.8 million in 2022, 2023, 2024 and the five months ended May
31, 2024 and 2025, respectively. During the Track Record Period, our other income primarily
consisted of (i) rental income, mainly related to the lending of our equipment; (ii) interest
income, representing bank deposits and amounts due from independent third parties, mainly
representing the interests on our loans to third parties; (iii) government grants; and (iv) others.
The following table sets forth a breakdown of our other income in absolute amount and
as a percentage of our total other income for the years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Rental income /H1118/H1118/H1118/H1118/H1118/H1118– – 37.9 38.7 26.5 48.0 8.5 42.9 12.7 55.7
Interest income:
Bank deposits /H1118/H1118/H1118/H1118/H111885.4 91.3 44.7 45.7 13.3 24.1 7.5 37.9 2.0 8.8
Amounts due from
independent third
parties
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H11184.7 5.0 4.2 4.3 5.2 9.4 1.8 9.1 – –
Government grants /H1118/H1118/H1118/H11183.0 3.2 4.2 4.3 4.7 8.5 1.6 8.1 7.2 31.6
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.4 0.5 6.9 7.0 5.5 10.0 0.4 2.0 0.9 3.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893.5 100.0 97.9 100.0 55.2 100.0 19.8 100.0 22.8 100.0
Note:
(1) As advised by our PRC Legal Advisor, our arrangements under amounts due from independent third parties
may be deemed as a private lending to the independent third parties and the private lending violates the
General Lending Provisions () promulgated by the PBOC in June 1996. However, as advised by
our PRC Legal Advisor, as the latest Judicial Interpretation of Private Lending of the Supreme People’s Court
has confirmed the validity of the private loan under certain circumstances and our Company has not received
any illegal income from the private lending, the risk of our Company being penalized by regulatory authorities
under the General Lending Provisions is remote.
FINANCIAL INFORMATION
– 359 –


--- page 370 ---
Other Expenses
We had other expenses of RMB7.5 million, RMB20.9 million, RMB11.2 million, RMB2.5
million and RMB6.9 million in 2022, 2023, 2024 and the five months ended May 31, 2024 and
2025, respectively. During the Track Record Period, our other expenses consisted of (i)
depreciation of leased assets; and (ii) donation.
Other Gains and Losses
We had net other gains of RMB206.0 million, RMB5.2 million, RMB18.5 million,
RMB10.8 million and RMB6.9 million in 2022, 2023, 2024 and the five months ended May 31,
2024 and 2025, respectively. During the Track Record Period, our other gains and losses
primarily consisted of (i) gain on disposal of intangible assets, mainly representing the gain
from the sales of our aluminum production quota; (ii) net gain on disposal of property, plant
and equipment, mainly representing the loss from the disposal of certain production equipment;
(iii) gain on disposal of derivative financial instruments, mainly relating to the futures products
we held for the purposes of hedging the fluctuations in the market prices of aluminum ingots;
and (iv) loss or gain on disposal of a subsidiary, mainly related to the disposal of a subsidiary
as a result of our change in investment strategy.
The following table sets forth a breakdown of our other gains and losses in absolute
amounts and as a percentage of our total other gains and losses for the years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Gain on disposal of
intangible assets /H1118/H1118/H1118/H1118180.7 87.7 – – – – – – – –
Gain/(loss) on disposal of
property, plant and
equipment, net /H1118/H1118/H1118/H1118/H11182.2 1.1 1.7 32.7 8.7 47.0 8.6 79.6 (0.1) (1.4)
Gain on disposal of
derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H111823.7 11.5 – – – – – – – –
Realized gain from
financial assets at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.1 0.0 0.1 1.9 – – – – 0.1 1.4
(Loss)/gain on disposal of
a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118– – – – (0.7) (3.8) – – 5.2 75.4
Net foreign exchange
(loss) gain /H1118/H1118/H1118/H1118/H1118/H1118/H1118(0.1) (0.0) (0.0) (0.0) (0.3) (1.6) – – 0.5 7.2
Fair value changes of
financial assets at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.0 0.0 (0.0) (0.0) – – – – – –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(0.6) (0.3) 3.4 65.4 10.8 58.4 2.2 20.4 1.2 17.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118206.0 100.0 5.2 100.0 18.5 100.0 10.8 100.0 6.9 100.0
FINANCIAL INFORMATION
– 360 –


--- page 371 ---
Selling and Marketing Expenses
We had selling and marketing expenses of RMB2.8 million, RMB0.3 million, RMB0.6
million, RMB0.1 million and RMB0.9 million in 2022, 2023, 2024 and the five months ended
May 31, 2024 and 2025, respectively. Our selling and marketing expenses primarily consisted
of employee benefit expenses, amounting to RMB2.4 million, RMB0.2 million, RMB0.5
million, RMB0.1 million and RMB0.7 million in 2022, 2023, 2024 and the five months ended
May 31, 2024 and 2025, respectively.
Administrative Expenses
We had administrative expenses of RMB218.6 million, RMB206.0 million, RMB279.0
million, RMB101.2 million and RMB145.6 million in 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, respectively. During the Track Record Period, our
administrative expenses primarily consisted of (i) employee benefit expenses, mainly
representing salaries, bonuses and other benefits relating to our administrative staff; (ii) taxes
and surcharges; (iii) depreciation and amortization expenses, mainly representing the
depreciation of our office buildings, office furniture and devices; (iv) professional fees, mainly
representing the consultancy fees with respect to taxation and project development
consultation; (v) repairs and maintenance; (vi) power and utilities; (vii) business development
and travel expenses; (viii) bank and financial institution charges; and (ix) other expenses.
The following table sets forth a breakdown of our administrative expenses in absolute
amount and as a percentage of our total administrative expenses for the years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Employee benefit
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877.4 35.4 78.2 38.0 89.7 32.2 36.5 36.1 44.4 30.5
Taxes and surcharges /H1118/H1118/H111864.5 29.5 64.1 31.1 62.4 22.4 23.3 23.0 27.2 18.7
Depreciation and
amortization expenses /H1118 19.2 8.8 15.7 7.6 14.1 5.1 5.8 5.7 10.5 7.2
Professional fees /H1118/H1118/H1118/H1118/H111818.3 8.4 13.1 6.4 8.1 2.9 4.2 4.2 7.3 5.0
Repairs and maintenance /H1118 1.6 0.7 4.4 2.1 6.3 2.3 2.5 2.4 4.2 2.9
Power and utilities /H1118/H1118/H1118/H11188.0 3.7 8.6 4.2 7.1 2.6 3.9 3.9 3.8 2.6
Business development and
travel expenses /H1118/H1118/H1118/H1118/H11186.0 2.7 6.2 3.0 10.3 3.7 2.8 2.8 4.3 2.9
Bank and financial
institution charge /H1118/H1118/H1118/H11180.2 0.1 2.1 1.0 3.0 1.1 2.5 2.4 5.8 4.0
Other expenses (1) /H1118/H1118/H1118/H1118/H111823.4 10.7 13.6 6.6 78.0 27.7 19.7 19.5 38.1 26.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118218.6 100.0 206.0 100.0 279.0 100.0 101.2 100.0 145.6 100.0
Note:
(1) Mainly include handling fees, subsidies and expenses in joint research project.
FINANCIAL INFORMATION
– 361 –


--- page 372 ---
Finance Costs
We had finance costs of RMB1,061.9 million, RMB939.7 million, RMB761.6 million,
RMB366.5 million and RMB262.4 million in 2022, 2023, 2024 and the five months ended May
31, 2024 and 2025, respectively. During the Track Record Period, our finance costs primarily
consisted of (i) interests on bank borrowings; (ii) interests on bills discounted; (iii) interest on
payables for acquisition of aluminum production quota; (iv) interests on lease liabilities; (v)
interest on amounts due to related parties; and (vi) interests on bank loans under supplier
finance arrangements.
The following table sets forth a breakdown of our finance costs in absolute amount and
as a percentage of our total finance costs for the years indicated:
Y ear ended December 31, Five months ended May 31,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(unaudited)
Interests on bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118839.1 79.0 765.9 81.5 648.3 85.1 280.8 76.6 285.4 108.8
Interests on bills
discounted /H1118/H1118/H1118/H1118/H1118/H1118/H1118108.1 10.2 50.4 5.4 46.3 6.1 28.9 7.9 5.5 2.1
Interests on payable for
acquisition of aluminum
production quota /H1118/H1118/H1118/H111841.8 3.9 45.0 4.8 48.6 6.4 19.7 5.4 21.1 8.0
Interests on lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869.9 6.6 45.1 4.8 17.5 2.3 16.3 4.5 1.7 0.6
Interests on amounts due
to related parties /H1118/H1118/H1118/H11182.5 0.2 23.1 2.5 7.9 1.0 7.9 2.1 – –
Interests on bank loans
under supplier finance
arrangements
(1) /H1118/H1118/H1118/H1118/H1118– – 3.5 0.4 2.0 0.3 2.0 0.5 5.0 1.9
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.5 0.1 6.7 0.6 10.8 1.4 10.9 3.0 1.5 0.6
Less: amounts capitalized
in the cost of qualifying
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (19.8) (2.6) – – (57.8) (22.0)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,061.9 100.0 939.7 100.0 761.6 100.0 366.5 100.0 262.4 100.0
Note:
(1) We entered into certain supplier finance arrangements with banks in 2023 and 2024. The interest rates
under such supplier finance arrangements range from 3.10%-3.80%. We entered into such supplier
finance arrangements primarily due to their low interest rates, which can reduce our finance costs.
FINANCIAL INFORMATION
– 362 –


--- page 373 ---
Impairment Losses or Gains under Expected Credit Loss Model, Net of Reversal
We recorded impairment losses under expected credit loss model of RMB2.1 million and
RMB14 thousand in 2022 and 2023, respectively. We recorded net impairment gains under
expected credit loss model of RMB0.4 million, RMB0.4 million and RMB0.8 million in 2024
and the five months ended May 31, 2024 and 2025, respectively. Such impairment losses were
primarily related to our receivables.
Income Tax Expenses
We had income tax expenses of RMB134.8 million, RMB191.9 million, RMB651.4
million, RMB201.6 million and RMB180.2 million in 2022, 2023, 2024 and the five months
ended May 31, 2024 and 2025, respectively. During the Track Record Period, one of our
subsidiaries was subject to the applicable preferential income tax rate of 15%. While all other
PRC entities, under the Law of PRC on Enterprise Income Tax (“EIT Law”) and
Implementation Regulation of the EIT Law, their tax rate is 25% during the Track Record
Period. We are exempted from taxation under the laws of the Cayman Islands. During the Track
Record Period, since we had no assessable profit subject to Hong Kong Profit Tax, no provision
of Hong Kong Profit Tax was made. See Note 11 of the Accountants’ Report in Appendix I to
this prospectus.
During the Track Record Period and up to the Latest Practicable Date, we had made all
the required tax filings with the relevant tax authorities in the PRC, and we were not aware of
any outstanding or potential disputes with such tax authorities.
PERIOD-TO-PERIOD COMPARISON OF RESULTS OF OPERATIONS
Five Months Ended May 31, 2025 compared with Five Months Ended May 31, 2024
Revenue
Our revenue increased by 22.6% from RMB5,883.2 million in the five months ended May
31, 2024 to RMB7,213.5 million in the same period of 2025, primarily due to the increases in
revenue from electrolytic aluminum as well as alumina and other related types of products.
Electrolytic aluminum. Our revenue from electrolytic aluminum increased by 4.7% from
RMB5,276.0 million in the five months ended May 31, 2024 to RMB5,523.2 million in the
same period of 2025, primarily related to the increase in ASP of electrolytic aluminum, which
was primarily due to the increase in average market price, driven by the increase in market
demand and the slow down of market supply. The annual average SHFE cash price of
electrolytic aluminum increased from RMB19,659 per ton in the five months ended May 31,
2024 to RMB20,270 per ton in the same period of 2025, according to CRU.
FINANCIAL INFORMATION
– 363 –


--- page 374 ---
Alumina and other related types of products. Our revenue from alumina and other related
types of products increased significantly from RMB449.5 million in the five months ended
May 31, 2024 to RMB1,523.7 million in the same period of 2025, primarily due to (i) an
increase in production and sales volume of aluminum hydroxide in the five months ended May
31, 2025 compared to the same period of 2024; and (ii) an increase in the average market price
of alumina, mainly as a result of the high alumina price in early 2025. The annual average of
CRU China alumina price increased from approximately RMB3,393 per ton in the five months
ended May 31, 2024 to approximately RMB3,517 per ton in the same period of 2025.
Cost of Sales
Our cost of sales increased by 36.2% from RMB4,242.9 million in the five months ended
May 31, 2024 to RMB5,780.9 million in the five months ended May 31, 2025, primarily due
to an increase in the costs of raw materials.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit decreased by 12.7% from RMB1,640.3
million in the five months ended May 31, 2024 to RMB1,432.7 million in the same period of
2025. Our gross profit margin decreased from 27.9% in the five months ended May 31, 2024
to 19.9% in the same period of 2025, primarily due to the increase in prices of certain raw
materials.
Electrolytic aluminum. The gross profit of our electrolytic aluminum decreased by 9.4%
from RMB1,446.5 million in the five months ended May 31, 2024 to RMB1,310.1 million in
the same period of 2025. The gross profit margin of our electrolytic aluminum decreased from
27.4% in the five months ended May 31, 2024 to 23.7% in the same period of 2025, primarily
due to an increase in prices of certain key raw materials, in particular bauxite. The CRU China
Bauxite price increased from approximately RMB528 per ton in the five months ended May 31,
2024 to approximately RMB720 per ton in the same period of 2025, according to CRU. The
CRU China Bauxite price has increased in 2025, primarily due to (i) the strong demand for
bauxite in alumina production in China; and (ii) the reliance on bauxite supply from Guinea in
China. The market price of bauxite from Guinea was relatively high, mainly due to (i) the long
shipping distance; (ii) the high bauxite quality; and (iii) the political and economic instability
in Guinea. See “Industry Overview — Bauxite and Other Raw Material Analysis (Global and
China) — Bauxite Price Analysis.”
Alumina and other related types of products. The gross profit of our alumina and other
related types of products decreased by 69.2% from RMB107.3 million in the five months ended
May 31, 2024 to RMB33.1 million in the same period of 2025. The gross profit margin of our
alumina and other related types of products decreased from 23.9% in the five months ended
May 31, 2024 to 2.2% in the same period of 2025, primarily due to (i) the increase in prices
of certain key materials, in particular bauxite, while the increase in prices cannot be passed on
to alumina customers, mainly as a result of the surplus in alumina supply in the market; and
(ii) the decrease in market price of alumina in 2025. The CRU Global and China alumina prices
declined sharply in 2025, primarily due to a change in market dynamic from supply deficit in
2024 to supply surplus in 2025. See “Industry Overview — Alumina Analysis (Global and
China) — Alumina Price Analysis.”
FINANCIAL INFORMATION
– 364 –


--- page 375 ---
Other Income
Our other income increased by 15.2% from RMB19.8 million in the five months ended
May 31, 2024 to RMB22.8 million in the same period of 2025, primarily due to (i) an increase
in government grants, mainly related to the upgrade of our electrolyzers; and (ii) an increase
in rental income, mainly due to our increased renting of certain equipment and plants in 2025.
Other Expenses
Our other expenses increased significantly from RMB2.5 million in the five months ended
May 31, 2024 to RMB6.9 million in the same period of 2025, primarily due to an increase in
depreciation of leased assets. See “— Other Income” for more details of the rental income.
Other Gains and losses
Our other gains decreased by 36.1% from RMB10.8 million in the five months ended May
31, 2024 to RMB6.9 million in the same period of 2025, primarily because we had net gain on
disposal of property, plant and equipment of RMB8.6 million in the five months end May 31,
2024 compared to net loss on disposal of property, plant and equipment of RMB0.1 million in
the same period of 2025, mainly as a result of the sales of equipment for the postprocessing
of aluminum alloy in 2024. Such increase was partially offset by an increase in gain on disposal
of a subsidiary from nil in the five months ended May 31, 2024 to RMB5.2 million in the same
period of 2025, mainly as a result of our change in investment strategy.
Selling and Marketing Expenses
Our selling and marketing expenses increased from RMB0.1 million in the five months
ended May 31, 2024 to RMB0.9 million in the same period of 2025, primarily as a result of
the expansion of our sales and marketing team and an increase in average salaries of our sales
and marketing staff to increase our efforts in the sales of alumina, aluminum hydroxide and
aluminum ingots.
Administrative Expenses
Our administrative expenses increased by 43.9% from RMB101.2 million in the five
months ended May 31, 2024 to RMB145.6 million in the same period of 2025, primarily due
to (i) an increase in employee benefit expenses resulting from an increase in average salaries
of our administrative staff; and (ii) an increase in other expenses, mainly due to our increased
focus on the joint research project with a university in relation to the research and development
of a system for the comprehensive reuse of red mud in the second half of 2024.
FINANCIAL INFORMATION
– 365 –


--- page 376 ---
Finance Costs
Our finance costs decreased by 28.4% from RMB366.5 million in the five months ended
May 31, 2024 to RMB262.4 million in the same period of 2025, primarily due to (i) a decrease
in interests on bills discounted, mainly as a result of the decrease in bill discounting in 2025;
(ii) a decrease in interests on lease liabilities, mainly as a result of our rental payments. See
“— Indebtedness — Lease Liabilities;” and (iii) the recognition of amounts capitalized in the
costs of qualifying assets of RMB57.8 million in the five months ended May 31, 2025
compared to nil in the same period of 2024, mainly because we had qualifying assets in relation
to the construction of green power plants.
Impairment Gains under Expected Credit Loss Model, Net of Reversal
Our net reversal of impairment losses under expected credit loss model increased from
RMB0.4 million in the five months ended May 31, 2024 to RMB0.8 million in the same period
of 2025, primarily due to the improvement on our customer ratings and the recovery of
long-aging receivables.
Income Tax Expenses
Our income tax expense decreased from RMB201.6 million in the five months ended May
31, 2024 to RMB180.2 million in the same period of 2025, primarily due to a decrease in our
taxable income.
Profit and Total Comprehensive Income for the Period
As a result of the foregoing, our profit for the period decreased by 14.4% from RMB999.4
million in the five months ended May 31, 2024 to RMB855.5 million in the same period of
2025.
Y ear ended December 31, 2024 Compared with Y ear ended December 31, 2023
Revenue
Our revenue increased by 9.8% from RMB13,814.7 million in 2023 to RMB15,163.2
million in 2024, primarily due to increases in revenue from electrolytic aluminum as well as
alumina and other related types of products.
Electrolytic aluminum. Our revenue from electrolytic aluminum increased from
RMB12,502.3 million in 2023 to RMB12,883.7 million in 2024, primarily related to the
increase in ASP of electrolytic aluminum, which was primarily due to the increase in average
market price, driven by the increase in market demand. The annual average SHFE cash price
of electrolytic aluminum increased from RMB18,678 per ton in 2023 to RMB19,949 per ton
in 2024, according to CRU.
FINANCIAL INFORMATION
– 366 –


--- page 377 ---
Alumina and other related types of products. Our revenue from alumina and other related
types of products increased by 89.2% from RMB977.4 million in 2023 to RMB1,849.5 million
in 2024, primarily due to (i) an increase in the average market prices of alumina, mainly as a
result of the deficit in alumina supply. The annual average of CRU China alumina price
increased from approximately RMB2,906 per ton in 2023 to approximately RMB4,030 per ton
in 2024, according to CRU; and (ii) the increase in production and sales volume of alumina in
2024 compared to 2023.
Cost of Sales
Our cost of sales decreased by 5.2% from RMB11,478.4 million in 2023 to RMB10,886.7
million in 2024, primarily due to a decrease in the cost of raw materials.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit increased by 83.0% from RMB2,336.3
million in 2023 to RMB4,276.5 million in 2024. Our gross profit margin increased from 16.9%
in 2023 to 28.2% in 2024, primarily because of (i) an increase in ASP of electrolytic aluminum
and alumina, driven by the increase in their average market prices; and (ii) the decrease in price
of certain raw materials.
Electrolytic aluminum. The gross profit of our electrolytic aluminum increased by 70.9%
from RMB2,029.7 million in 2023 to RMB3,469.2 million in 2024. The gross profit margin of
our electrolytic aluminum increased from 16.2% in 2023 to 26.9% in the same period of 2024,
primarily due to (i) an increase in ASP of electrolytic aluminum, which was primarily driven
by an increase in market price of electrolytic aluminum, driven by the increase in market
demand. The annual average of the SHFE cash price of electrolytic aluminum increased from
RMB18,678 per ton in 2023 to RMB19,949 per ton in 2024, according to CRU; and (ii) a
decrease in price of certain key raw materials, including coal and carbon anodes. Our costs of
coal decreased by 15.0% from RMB3,106.9 million in 2023 to RMB2,639.6 million in 2024,
primarily due to a decrease in the market prices of coal. The annual average of the CRU CFR
South China coal price decreased from RMB801 per ton in 2023 to RMB735 per ton in 2024,
according to CRU. Our cost of carbon anodes decreased by 25.3% from RMB1,680.1 million
in 2023 to RMB1,254.5 million in 2024, primarily due to a decrease in the market prices of
carbon anodes. The annual average CRU China carbon anode price decreased from RMB5,156
per ton in 2023 to RMB4,114 per ton in 2024, according to CRU.
Alumina and other related types of products. The gross profit of our alumina and other
related types of products increased significantly from RMB60.9 million in 2023 to RMB579.6
million in 2024. The gross profit margin of alumina and other related types of products
increased significantly from 6.2% in 2023 to 31.3% in 2024, primarily related to an increase
in ASP of alumina, which was primarily due to the increase in market prices of alumina, mainly
as a result of the deficit in alumina supply. The deficit in alumina supply was attributable to
(i) several alumina production disruption incidents as several refineries in Australia, India and
Brazil faced bauxite and energy supply constraints; (ii) temporary disruption to Guinea bauxite
shipments as discussed above; and (iii) China’s persistent high demand for alumina as its
electrolytic aluminum production reached a new high in 2024. See “Industry Overview —
Alumina Analysis (Global and China) — Alumina Price Analysis.”
FINANCIAL INFORMATION
– 367 –


--- page 378 ---
Other Income
Our other income decreased by 43.6% from RMB97.9 million in 2023 to RMB55.2
million in 2024, primarily due to (i) a decrease in our interest income from bank deposits, in
line with a decrease in our restricted bank deposits. See “— Discussion of Selected Items from
the Consolidated Statements of Financial Position — Restricted Bank Deposits;” and (ii) a
decrease in our rental income after selling certain equipment in 2024 which generated rental
income in 2023.
Other Expenses
Our other expenses decreased by 46.4% from RMB20.9 million in 2023 to RMB11.2
million in 2024, primarily due to a decrease in depreciation of leased assets. See “— Other
Income” for details of changes in rental income.
Other Gains and Losses
Our other gains increased significantly from RMB5.2 million in 2023 to RMB18.5 million
in 2024, primarily due to an increase in gains from disposal of property, plant and equipment,
mainly as a result of the sales of equipment for the post-processing of aluminum alloy in 2024.
Selling and Marketing Expenses
Our selling and marketing expenses increased from RMB0.3 million in 2023 to RMB0.6
million in 2024, primarily as a result of the expansion of our sales and marketing team and an
increase in average salaries of our sales and marketing staff to increase our efforts in the sales
of aluminum ingots.
Administrative Expenses
Our administrative expenses increased by 35.4% from RMB206.0 million in 2023 to
RMB279.0 million in 2024, primarily due to (i) an increase in employee benefit expenses
resulting from an increase in average salaries of our administrative staff; and (ii) an increase
in other expenses, mainly related to the joint research project with a university in relation to
the research and development of a system for the comprehensive reuse of red mud. See
“Business — Our Production — Our Green Production.”
Finance Costs
Our finance costs decreased by 19.0% from RMB939.7 million in 2023 to RMB761.6
million in 2024, primarily due to (i) a decrease in interests on bank borrowings, mainly as a
result of the change in our borrowing structure. See “— Indebtedness — Bank and Other
Borrowings;” and (ii) a decrease in interests on lease liabilities, mainly as a result of the
termination of certain finance lease arrangements. See “— Indebtedness — Lease Liabilities.”
FINANCIAL INFORMATION
– 368 –


--- page 379 ---
Impairment Losses or Gains under Expected Credit Loss Model, Net of Reversal
We recorded impairment losses under expected credit loss model of RMB14 thousand in
2023 and impairment gains under expected credit loss model of RMB0.4 million in 2024,
mainly due to a decrease in amount due from Innovation Group, mainly as a result of the offset
of considerations among related parties as part of the Reorganization.
Income Tax Expense
Our income tax expense increased significantly from RMB191.9 million in 2023 to
RMB651.4 million in 2024, primarily due to a significant increase in our taxable income. See
Note 11 of the Accountants’ Report in Appendix I to this prospectus.
Profit and Total Comprehensive Income for the Period
As a result of the foregoing, our profit for the period increased significantly from
RMB1,080.6 million in 2023 to RMB2,629.5 million in 2024.
Y ear ended December 31, 2023 Compared with Y ear ended December 31, 2022
Revenue
Our revenue remained relatively stable at RMB13,489.7 million in 2022 and
RMB13,814.7 million in 2023, primarily due to an increase in revenue from alumina and other
related types of products, partially offset by a decrease in revenue from electrolytic aluminum
products.
Electrolytic aluminum. Our revenue from electrolytic aluminum slightly decreased from
RMB12,881.9 million in 2022 to RMB12,502.3 million in 2023, primarily related to the
decrease in ASP of electrolytic aluminum, which was primarily due to the decrease in average
market price, driven by the slowdown of growth in market demand. The annual average SHFE
cash price of electrolytic aluminum decreased from RMB19,945 per ton in 2022 to RMB18,678
per ton in 2023, according to CRU.
Alumina and other related types of products. Our revenue from alumina and other related
types of products increased significantly from RMB270.6 million in 2022 to RMB977.4
million in 2023, primarily due to the expansion of production capacity of our alumina and other
related types of products because (i) we commenced the operation of a new production line for
alumina in 2023; and (ii) the capacity utilization of our alumina refinery increased in 2023.
Cost of Sales
Our cost of sales remained relatively stable at RMB11,448.6 million in 2022 and
RMB11,478.4 million in 2023.
FINANCIAL INFORMATION
– 369 –


--- page 380 ---
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit increased by 14.5% from RMB2,041.1
million in 2022 to RMB2,336.3 million in 2023 at a pace exceeding many of our peers. Our
gross profit margin increased from 15.1% in 2022 to 16.9% in 2023, primarily due to a
decrease in market price of certain key raw materials.
Electrolytic aluminum. The gross profit of our electrolytic aluminum increased by 16.8%
from RMB1,737.3 million in 2022 to RMB2,029.7 million in 2023. The gross profit margin of
our electrolytic aluminum increased from 13.5% in 2022 to 16.2% in 2023, primarily due to
a decrease in market price of certain key raw materials, including alumina and carbon anode.
Our cost of alumina decreased significantly from RMB2,302.3 million in 2022 to RMB877.4
million in 2023, primarily due to an expanded production capacity of our self-supplied
alumina, reducing the needs for alumina procurement from third parties. The production
volume of alumina increased from 706.2 kt in 2022 to 1,546.1 kt in 2023. See “Business — Our
Production — Our Production Capabilities.” Our costs of carbon anodes decreased by 20.8%
from RMB2,122.3 million in 2022 to RMB1,680.1 million in 2023, primarily due to a decrease
in the market prices of carbon anodes. The annual average of the CRU China carbon anode
price decreased from RMB6,799 per ton in 2022 to RMB5,156 per ton in 2023, according to
CRU.
Alumina and other related types of products. The gross profit of our alumina and other
related types of products increased significantly from RMB17.0 million in 2022 to RMB60.9
million in 2023. The gross profit margin of our alumina and other related types of products
remained relatively stable at 6.3% in 2022 and 6.2% in 2023. We had gross loss margin of
alumina of 0.1% in 2022, compared to gross profit margin of alumina of 5.7% in 2023,
primarily due to the high market prices of certain key raw materials, including coal and caustic
soda, in 2022. For example, the annual average of the CRU CFR South China coal price
decreased from RMB1,124 per ton in 2022 to RMB801 per ton in 2023, according to CRU. The
caustic soda delivered price decreased from RMB3,645.3 per ton in 2022 to RMB2,886.9 per
ton in 2023, according to CRU.
Other Income
Our other income increased by 4.7% from RMB93.5 million in 2022 to RMB97.9 million
in 2023, primarily due to an increase in rental income from nil in 2022 to RMB37.9 million
in 2023 as we rented out certain equipment and plants in 2023. Such increases were offset by
a decrease in interest income from bank deposits, in line with a decrease in our restricted bank
deposits. See “— Discussion of Selected Items from the Consolidated Statements of Financial
Position — Restricted Bank Deposits.”
Other Expenses
Our other expenses increased significantly from RMB7.5 million in 2022 to RMB20.9
million in 2023, primarily due to an increase in depreciation of leased assets. See “— Other
Income” for details of the rental income.
FINANCIAL INFORMATION
– 370 –


--- page 381 ---
Other Gains
Our other gains decreased significantly from RMB206.0 million in 2022 to RMB5.2
million in 2023, primarily because we had gain on disposal of intangible assets in 2022, related
to the selling of our electrolytic aluminum production quota to other companies in 2022 to
better align our total electrolytic aluminum production quota with our electrolytic aluminum
capacity. As the electrolytic production quota we obtained was higher than the actual
production capacity of our production base, we sold the surplus production quota to obtain
additional capital. See “Business — Our Production — Our Production Capabilities.”
Selling and Marketing Expenses
Our selling and marketing expenses decreased significantly from RMB2.8 million in 2022
to RMB0.3 million in 2023, reflecting decreases in employee benefit expenses and business
development expenses, mainly because we increased our sales to Innovation New Material
which required less sales and marketing activities. See “Relationship with Our Controlling
Shareholders — Independence from Our Controlling Shareholders — Operational
Independence — Sales of electrolytic aluminum in liquid form to Innovation New Material.”
Administrative Expenses
Our administrative expenses remained relatively stable at RMB218.6 million in 2022 and
RMB206.0 million in 2023.
Finance Costs
Our finance costs decreased by 11.5% from RMB1,061.9 million in 2022 to RMB939.7
million in 2023, primarily due to (i) a decrease in interests on bank borrowing, mainly we
continue to repay bank borrowings. See “— Indebtedness — Bank and Other Borrowings;” and
(ii) a decrease in interests on bills discounted, mainly as a result of our decreasing bill
discounted settlements.
Impairment Losses under Expected Credit Loss Model, Net of Reversal
Our impairment losses under expected credit loss model, net of reversal, decreased from
RMB2.1 million in 2022 to RMB14 thousand in 2023, primarily because we made impairment
provision on receivables in 2022.
Income Tax Expense
Our income tax expense increased by 42.4% from RMB134.8 million in 2022 to
RMB191.9 million in 2023, generally in line with our growth in profit, and the change in tax
effect of additional deduction on environment protection equipment expenditure. See Note 11
of the Accountants’ Report in Appendix I to this prospectus.
Profit and Total Comprehensive Income for the Y ear
As a result of the foregoing, our profit for the year increased by 18.4% from RMB912.9
million in 2022 to RMB1,080.6 million in 2023.
FINANCIAL INFORMATION
– 371 –


--- page 382 ---
DISCUSSION OF SELECTED ITEMS FROM THE CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION
The following table sets forth selected information from our consolidated statements of
financial position as of the dates indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Non-current assets
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,394.2 6,686.1 9,152.5 10,742.0
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,262.7 2,233.2 928.6 1,083.7
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,359.8 3,288.5 3,217.7 3,187.9
Prepayments on acquisition
of long-lived assets /H1118/H1118/H1118/H1118/H1118/H111847.7 98.9 1,151.4 746.9
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2.3 2.3
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.1 5.6 83.1 –
Total non-current assets /H1118/H1118/H111812,071.5 12,312.3 14,535.6 15,762.8
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,761.0 1,255.1 1,577.7 2,253.3
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840.2 96.1 39.1 84.8
Receivables at fair value
through other
comprehensive income
(“FVTOCI”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829.1 62.7 485.8 91.0
Prepayments and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118331.3 181.7 823.8 989.3
Financial assets at fair value
through profit or loss
(“FVTPL”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830.0 – – 699.8
Amounts due from related
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,260.1 3,752.4 – –
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 . 9–––
Restricted bank deposits /H1118/H1118/H1118/H11182,798.7 1,309.1 681.4 591.3
Cash and cash equivalents /H1118/H1118/H1118158.9 584.1 176.4 470.9
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H11189,418.2 7,241.2 3,784.2 5,180.4
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,489.7 19,553.5 18,319.8 20,943.2
FINANCIAL INFORMATION
– 372 –


--- page 383 ---
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Current liabilities
Trade, bills and other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,736.1 4,698.5 2,945.4 3,755.9
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826.3 7.0 372.8 344.1
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280.6 346.6 10.7 46.5
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.6 2.7 8.8 12.5
Bank and other borrowings /H1118/H11188,342.3 4,251.0 4,941.6 6,676.5
Amounts due to related
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118317.2 416.1 – –
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 159.5 458.9 66.6
Total current liabilities /H1118/H1118/H1118/H111815,705.1 9,881.4 8,738.2 10,902.1
Net current liabilities /H1118/H1118/H1118/H1118/H1118/H1118(6,286.9) (2,640.2) (4,954.0) (5,721.7)
Total assets less current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,784.6 9,672.1 9,581.6 10,041.1
Non-current liabilities /H1118/H1118/H1118/H1118/H1118
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H111820.5 17.3 – 60.3
Bank and other borrowings /H1118/H11182,488.0 5,030.8 6,006.6 5,844.9
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118656.0 701.0 749.6 702.6
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118674.0 459.8 417.9 172.8
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816.9 14.3 81.2 78.7
Total non-current liabilities /H1118 3,855.4 6,223.2 7,255.3 6,859.3
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,560.5 16,104.6 15,993.5 17,761.4
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,929.2 3,448.9 2,326.3 3,181.8
Capital and reserves /H1118/H1118/H1118/H1118/H1118/H1118
Paid-in/Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H11182,017.9 2,070.6 – 0.1
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(328.0) 879.8 1,254.7 2,010.7
1,689.9 2,950.4 1,254.7 2,010.8
Equity attributable to owners
of the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,689.9 2,950.4 1,254.7 2,010.8
Non-controlling interests /H1118/H1118/H1118/H1118239.3 498.5 1,071.6 1,171.0
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,929.2 3,448.9 2,326.3 3,181.8
FINANCIAL INFORMATION
– 373 –


--- page 384 ---
Property, Plant and Equipment
Our property, plant and equipment consisted of (i) plant and machinery; (ii) buildings;
(iii) construction in progress; (iv) motor vehicles; and (v) furniture and fixtures.
The following table sets forth a breakdown of our property, plant and equipment as of the
dates indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Plant and machinery /H1118/H1118/H1118/H1118/H1118/H1118/H11183,487.5 3,625.5 5,123.6 6,234.4
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,743.2 2,859.9 3,277.9 3,493.3
Construction in progress /H1118/H1118/H1118/H1118140.1 174.6 727.1 985.8
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.8 19.9 14.7 14.8
Furniture and fixtures /H1118/H1118/H1118/H1118/H1118/H11182.6 6.2 9.2 13.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,394.2 6,686.1 9,152.5 10,742.0
We had property, plant and equipment of RMB6,394.2 million, RMB6,686.1 million,
RMB9,152.5 million and RMB10,742.0 million as of December 31, 2022, 2023, 2024 and May
31, 2025, respectively.
Our property, plant and equipment remained relatively stable at RMB6,394.2 million and
RMB6,686.1 million as of December 31, 2022 and 2023.
Our property, plant and equipment increased by 36.9% from RMB6,686.1 million as of
December 31, 2023 to RMB9,152.5 million as of December 31, 2024, primarily because (i) our
plant and machinery increased from RMB3,625.5 million as of December 31, 2023 to
RMB5,123.6 million as of December 31, 2024, primarily due to (a) the reclassification of plant
and machinery from right-of-use assets to property, plant and equipment as a result of the
settlement of finance lease arrangements, and (b) the phased completion of the construction of
the new production line for aluminum hydroxide in 2024; and (ii) our construction in progress
increased significantly from RMB174.6 million as of December 31, 2023 to RMB727.1 million
as of December 31, 2024, mainly as a result of (a) the construction of green power plants in
2024; and (b) the construction of a new production line for aluminum hydroxide in 2024.
Our property, plant and equipment increased by 17.4% from RMB9,152.5 million as of
December 31, 2024 to RMB10,742.0 million as of May 31, 2025, primarily because (i) our
plant and machinery increased from RMB5,123.6 million as of December 31, 2024 to
RMB6,234.4 million as of May 31, 2025, primarily due to (a) the phased completion of
construction of our new production line for aluminum hydroxide, and (b) phased completion
of construction of green power plants in 2025; and (ii) our construction in progress increased
from RMB727.1 million as of December 31, 2024 to RMB985.8 million as of May 31, 2025,
mainly as a result of our continuous construction of our green power plants.
FINANCIAL INFORMATION
– 374 –


--- page 385 ---
Right-of-use Assets
Our right-of-use assets consisted of (i) leased plant and machinery; (ii) leasehold lands;
(iii) aircraft; and (iv) offices. The following table sets forth a breakdown of our right-of-use
assets as of the dates indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Leased plant and machinery /H1118/H11181,503.7 1,443.2 67.6 62.9
Leasehold lands /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118759.0 790.0 861.0 840.5
Aircraft /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 166.4
Offices /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 13.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,262.7 2,233.2 928.6 1,083.7
We had right-of-use assets of RMB2,262.7 million, RMB2,233.2 million, RMB928.6
million and RMB1,083.7 million as of December 31, 2022, 2023, 2024 and May 31, 2025,
respectively. Our right-of-use assets remained relatively stable at RMB2,262.7 million and
RMB2,233.2 million as of December 31, 2022 and 2023. Our right-of-use assets decreased
significantly from RMB2,233.2 million as of December 31, 2023 to RMB928.6 million as of
December 31, 2024, primarily due to the decrease in leased plant and machinery. Our
right-of-use assets increased by 16.7% from RMB928.6 million as of December 31, 2024 to
RMB1,083.7 million as of May 31, 2025, primarily due to an increase in an aircraft from nil
as of December 31, 2024 to RMB166.4 million as of May 31, 2025, mainly attributable to the
purchase of a commercial plane under finance lease arrangement. Our leased plant and
machinery decreased by 4.0% from RMB1,503.7 million as of December 31, 2022 to
RMB1,443.2 million as of December 31, 2023, primarily due to the amortization of
right-of-use assets in relation to plant and machinery we leased. Our leased plant and
machinery decreased significantly from RMB1,443.2 million as of December 31, 2023 to
RMB67.6 million as of December 31, 2024, primarily due to the reclassification of plant and
machinery from right-of-use assets to property, plant and equipment as a result of the
settlement of finance lease arrangements. Our leased plant and machinery remained relatively
stable at RMB67.6 million and RMB62.9 million as of December 31, 2024 and May 31, 2025.
Our leasehold lands increased by 4.1% from RMB759.0 million as of December 31, 2022 to
RMB790.0 million as of December 31, 2023, and further increased by 9.0% to RMB861.0
million as of December 31, 2024, primarily due to the increase in leasehold lands for the
construction of the new production line for aluminum hydroxide, solar power plants and wind
power plants. Our leasehold lands remained relatively stable at RMB861.0 million and
RMB840.5 million as of December 31, 2024 and May 31, 2025.
FINANCIAL INFORMATION
– 375 –


--- page 386 ---
Intangible Assets
Our intangible assets represented (i) aluminum production quota; (ii) power generation
capacity indicators; and (iii) computer software. The following table sets forth a breakdown of
our intangible assets as of the dates indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Aluminum production quota /H1118 3,057.2 2,992.1 2,927.0 2,899.9
Power generation capacity
indicators /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118302.6 296.4 290.2 287.7
Computer software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 0.4 0.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,359.8 3,288.5 3,217.7 3,187.9
We had intangible assets of RMB3,359.8 million, RMB3,288.5 million, RMB3,217.7
million and RMB3,187.9 million as of December 31, 2022, 2023, 2024 and May 31, 2025,
respectively. Our intangible assets decreased slightly throughout the Track Record Period, from
RMB3,359.8 million as of December 31, 2022 to RMB3,288.5 million as of December 31,
2023 and remained relatively stable at RMB3,217.7 million and RMB3,187.9 million as of
December 31, 2024 and May 31, 2025.
Prepayment on Acquisition of Long-lived Assets
Our prepayment on acquisition of long-lived assets primarily consisted of our prepayment
to suppliers for the purchase of equipment and services for project construction in our normal
course of business operations. We had prepayment on acquisition of long-lived assets of
RMB47.7 million, RMB98.9 million, RMB1,151.4 million and RMB746.9 million as of
December 31, 2022, 2023, 2024 and May 31, 2025, respectively.
Our prepayment on acquisition of long-lived assets increased significantly from
RMB47.7 million as of December 31, 2022 to RMB98.9 million as of December 31, 2023,
primarily related to the purchase of land use rights for the construction of red mud disposal
areas in 2023. Our prepayment on acquisition of long-lived assets increased significantly from
RMB98.9 million as of December 31, 2023 to RMB1,151.4 million as of December 31, 2024,
primarily related to (i) the purchase of equipment and materials for the construction of the new
production line for aluminum hydroxide in 2024; (ii) the purchase of power generation
facilities; and (iii) the prepayment to outsourced contractors for the construction of wind power
plants and solar power plants. Our prepayment on acquisition of long-lived assets decreased by
35.1% from RMB1,151.4 million as of December 31, 2024 to RMB746.9 million as of May 31,
2025, primarily due to (i) the acquisition of equipment and materials for the construction of the
new production line for aluminum hydroxide in 2024; and (ii) the termination of our purchase
FINANCIAL INFORMATION
– 376 –


--- page 387 ---
of power generation facilities, mainly as a result of the change in our overseas expansion
strategy as we want to focus our first globalization attempt on the Saudi Project. See “—
Discussion of Selected Items from the Consolidated Statements of Financial Position —
Prepayments and Other Receivables.”
As of September 30, 2025, approximately RMB181.7 million, or 24.3% of our
prepayment on acquisition of long-lived assets as of May 31, 2025, had been settled.
Inventories
Our inventories consisted of (i) raw materials; (ii) work in progress; (iii) finished goods;
and (iv) spare parts and others. The following table sets forth a breakdown of our inventories
as of the dates indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118852.3 627.8 798.1 1,457.4
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118580.4 556.2 666.7 713.9
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118248.4 6.1 48.8 24.9
Spare parts and others /H1118/H1118/H1118/H1118/H111879.9 65.0 64.1 57.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,761.0 1,255.1 1,577.7 2,253.3
We had inventories of RMB1,761.0 million, RMB1,255.1 million, RMB1,577.7 million
and RMB2,253.3 million as of December 31, 2022, 2023, 2024 and May 31, 2025, respectively.
Our inventories decreased by 28.7% from RMB1,761.0 million as of December 31, 2022 to
RMB1,255.1 million as of December 31, 2023 primarily due to decreases in raw materials and
finished goods, mainly because (i) we maintained a high level of raw materials and finished
goods in 2022 to ensure the stable supply of products during the public health incidents; and
(ii) we primarily sold liquid aluminum and reduced the sales of aluminum ingots in 2023,
resulting in the lower inventory level in 2023, since liquid aluminum could not be stored as
inventory. Our inventories increased by 25.7% from RMB1,255.1 million as of December 31,
2023 to RMB1,577.7 million as of December 31, 2024 primarily due to (i) an increase in raw
materials, resulting from the increase in market prices of alumina and bauxite; and (ii) an
increase in work in progress, resulting from an increase in the market price of electrolytic
aluminum. Our inventories increased by 42.8% from RMB1,577.7 million as of December 31,
2024 to RMB2,253.3 million as of May 31, 2025, primarily due to an increase in raw materials,
mainly because (i) our demand for bauxite increased along with our production capacity
expansion on aluminum hydroxide; and (ii) we commenced a new bauxite procurement model
and purchased bauxite directly from suppliers. As a result, the timing of title transfer for raw
materials was shifted earlier. In specific, under the direct procurement model, title to the
bauxite was transferred to us at the loading port, whereas previously, when purchasing through
agents, title to the bauxite was transferred at the destination port. Our direct procurement
model enables us to secure stable bauxite supply with more competitive prices.
FINANCIAL INFORMATION
– 377 –


--- page 388 ---
The following table sets forth an aging analysis of the inventories as of the dates
indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Within 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,730.3 1,205.0 1,536.7 2,202.8
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.8 11.1 8.3 12.7
Over 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822.9 39.0 32.7 37.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,761.0 1,255.1 1,577.7 2,253.3
The following table sets forth the turnover days of our inventories for the years indicated:
Y ear ended December 31,
Five months
ended
May 31,
2022 2023 2024 2025
(days)
Inventory turnover days (1) /H1118/H1118/H111850.0 47.3 46.8 49.7
Note:
(1) Inventory turnover days for a year or period equal the average of the gross value of the opening and
closing inventory balance divided by cost of sales for the relevant year or period and multiplied by the
number of days in the relevant year or period, which is 360 days for each year and 150 days for the five
months ended May 31, 2025.
Our inventory turnover days decreased from 50.0 days in 2022 to 47.3 days in 2023,
primarily because we strategically maintained a high level of raw materials and finished goods
in 2022 to ensure the stable supply of products during the public health incidents. Our
inventory turnover days stayed relatively stable at 47.3 days in 2023 and 46.8 days in 2024.
Our inventory turnover days increased from 46.8 days in 2024 to 49.7 days in the five months
ended May 31, 2025, primarily due to an increase in inventories as of May 31, 2025, mainly
because (i) our demand for bauxite increased along with our production capacity expansion on
aluminum hydroxide; and (ii) we commenced a new bauxite procurement model and purchased
bauxite directly from suppliers. As a result, the timing of title transfer for raw materials was
shifted earlier. In specific, under the direct procurement model, title to the bauxite was
transferred to us at the loading port, whereas previously, when purchasing through agents, title
to the bauxite was transferred at the destination port. Our direct procurement model enables us
to secure stable bauxite supply with more competitive prices.
As of September 30, 2025, approximately RMB1,924.3 million, or 85.4% of our
inventories as of May 31, 2025, had been utilized or sold.
FINANCIAL INFORMATION
– 378 –


--- page 389 ---
Trade Receivables
Our trade receivables represented the outstanding amounts of receivables from (i) our
related parties, primarily for the sales of liquid aluminum; and (ii) third parties, primarily for
the sales of electricity and steam. The following table sets forth a breakdown of our net trade
receivables as of the dates indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Trade receivables
– Related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188.0 77.1 17.1 32.0
– Third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832.8 19.4 22.5 53.6
40.8 96.5 39.7 85.6
Less: allowance for credit
losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(0.6) (0.4) (0.5) (0.8)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840.2 96.1 39.1 84.8
We had trade receivables of RMB40.2 million, RMB96.1 million, RMB39.1 million and
RMB84.8 million as of December 31, 2022, 2023, 2024 and May 31, 2025, respectively. Our
trade receivables increased significantly from RMB40.2 million as of December 31, 2022 to
RMB96.1 million as of December 31, 2023, and subsequently decreased by 59.3% to RMB39.1
million as of December 31, 2024. Such fluctuations were primarily due to an increase in the
trade receivables from related parties as of December 31, 2023, primarily due to certain trade
receivables at year-end falling within the middle of our standard settlement cycle. Our trade
receivables increased significantly from RMB39.1 million as of December 31, 2024 to
RMB84.8 million as of May 31, 2025, primarily due to the increase in sales of aluminum
hydroxide and the increase in monthly settlement for the sales of electricity. See “Business —
Sales, Marketing and Customer Service — Pricing and Payment.”
FINANCIAL INFORMATION
– 379 –


--- page 390 ---
The following table sets forth an aging analysis of our trade receivables (net of
impairment) based on the date of acceptance of goods as of the dates indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Within 1 month /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838.1 80.2 33.1 73.4
1 to 12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.1 15.4 5.2 8.8
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 0.5 0.8 2.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840.2 96.1 39.1 84.8
We seek to maintain strict control over our outstanding trade receivables and have
dedicated credit risk management staff to control and mitigate credit risk. Our senior
management assess the recoverability of trade receivables on a regular basis, taking into
account historical settlement records of customers. Limits and scoring attributed to customers
are reviewed twice a year. Other monitoring procedures are in place to ensure that follow-up
actions are taken to recover overdue debts. In addition, we perform impairment assessments
under the ECL model on trade balances individually. See Note 36(b) of the Accountants’ Report
in Appendix I to this prospectus. During the Track Record Period, a majority of our trade
receivables, being 94.8%, 83.5%, 84.6% and 86.6% as of December 31, 2022, 2023, 2024 and
May 31, 2025, respectively, were aged within one month. The trade receivables aged between
one month to 12 months significantly increased from RMB2.1 million as of December 31, 2022
to RMB15.4 million as of December 31, 2023, primarily due to the increase in monthly
settlements for rent, utilities, heating fees and other related services associated with the renting
of certain equipment and plants in 2023. The trade receivables aged between one month to 12
months significantly decreased from RMB15.4 million as of December 31, 2023 to RMB5.2
million as of December 31, 2024, primarily due to the decrease in monthly settlements for rent,
utilities, heating fees and other related services associated with certain equipment which were
sold in 2024.
FINANCIAL INFORMATION
– 380 –


--- page 391 ---
The following table sets forth the turnover days of our trade receivables for the years
indicated:
Y ear ended December 31,
Five months
ended
May 31,
2022 2023 2024 2025
(days)
Trade receivables turnover
days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.3 1.8 1.6 1.3
Note:
(1) Trade receivables turnover days for a year or period equal the average of opening and closing balance
of trade receivables for the relevant year or period divided by revenue for the relevant year or period
and multiplied by the number of days in the relevant year or period, which is 360 days for each year
and 150 days for the five months ended May 31, 2025.
Our trade receivables turnover days decreased from 2.3 days in 2022 to 1.8 days in 2023,
primarily because we had a high level of trade receivables at the beginning of 2022, primarily
due to the certain receivables at year-end falling within the middle of our standard settlement
cycle.
Our trade receivable turnover days remained relatively stable at 1.8 days in 2023, 1.6 days
in 2024 and 1.3 days in the five months ended May 31, 2025.
As of September 30, 2025, approximately RMB72.6 million, or 85.6% of our trade
receivables as of May 31, 2025, had been settled.
Receivables at Fair Value through Other Comprehensive Income
Our receivables at fair value through other comprehensive income (“FVTOCI”) consisted
of bankers’ acceptance we received. We had receivables at FVTOCI of RMB29.1 million,
RMB62.7 million, RMB485.7 million and RMB91.0 million as of December 31, 2022, 2023,
2024 and May 31, 2025, respectively.
Our receivables at FVTOCI increased significantly from RMB29.1 million as of
December 31, 2022 to RMB62.7 million as of December 31, 2023, and further to RMB485.8
million as of December 31, 2024, primarily due to the increased accepted bills we received in
2023, mainly because certain customers increasingly used accepted bills as a settlement
method in 2023 and 2024. These accepted bills are bills receivables recorded at fair value
through comprehensive income under accounting policies. Our receivables at FVTOCI
decreased by 81.3% from RMB485.7 million as of December 31, 2024 to RMB91.0 million as
of May 31, 2025, primarily due to the settlement of accepted bills and bills receivables upon
maturity. See Note 21 of the Accountants’ Report in Appendix I to this prospectus.
FINANCIAL INFORMATION
– 381 –


--- page 392 ---
Prepayments and Other Receivables
Our prepayments and other receivables primarily consisted of (i) prepayments to
suppliers; (ii) prepaid expense; (iii) value-added tax recoverable; (iv) refundable customs
deposits; (v) amounts due from independent third parties; (vi) deposits, primarily for our
purchase of bauxite; (vii) refundable cultivated land occupation tax; (viii) consideration
receivable for disposal of land; (ix) deferred issue costs; (x) refundable prepayments on
acquisition of long-lived assets; and (xi) others. The following table sets forth a breakdown of
our prepayments and other receivables as of the dates indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Prepayments to suppliers /H1118/H1118/H1118/H1118194.7 95.3 644.6 226.3
Prepaid expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.7 10.2 18.3 27.3
V alue-added tax recoverable /H1118 51.5 8.7 94.2 291.3
Refundable customs deposits /H1118 ––– 8 . 5
Amounts due from
independent third parties /H1118/H1118 50.0 30.7 – –
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823.0 36.9 56.3 23.4
Refundable cultivated land
occupation tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 34.2
Consideration receivable for
disposal of land /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 1 1 . 9
Deferred issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5.2 6.8
Refundable prepayments on
acquisition of long-lived
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 358.3
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821.6 13.4 19.2 14.2
344.5 195.2 837.8 1,002.2
Less: allowance for
impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(13.2) (13.5) (14.0) (12.9)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118331.3 181.7 823.8 989.3
Non-current
Refundable rental deposit /H1118/H1118/H1118 – – 2.3 2.3
331.2 181.7 826.1 991.6
FINANCIAL INFORMATION
– 382 –


--- page 393 ---
We had prepayments and other receivables of RMB331.3 million, RMB181.7 million,
RMB826.1 million and RMB991.6 million as of December 31, 2022, 2023, 2024 and May 31,
2025, respectively. We had allowance for impairment losses of RMB13.2 million, RMB13.5
million, RMB14.0 million and RMB12.9 million as of December 31, 2022, 2023, 2024 and
May 31, 2025, respectively. Our prepayments and other receivables decreased by 45.1% from
RMB331.3 million as of December 31, 2022 to RMB181.7 million as of December 31, 2023,
primarily due to (i) a decrease in prepayments to suppliers from RMB194.7 million as of
December 31, 2022 to RMB95.3 million as of December 31, 2023, mainly because we
increased prepayments to coal suppliers to secure a stable supply of coal in 2022 when the
market prices of coal soared; (ii) the decrease in value-added tax recoverable from RMB51.5
million as of December 31, 2022 to RMB8.7 million as of December 31, 2023, mainly because
we incurred more input tax at the initial stage of construction projects in 2022; and (iii) a
decrease in the amounts due from independent third parties from RMB50.0 million as of
December 31, 2022 to RMB30.7 million as of December 31, 2023, in relation to the loan to be
paid by an independent third party, which was fully repaid in 2024. Our amounts due from
independent third parties have been fully settled and received.
Our prepayments and other receivables increased significantly from RMB181.7 million as
of December 31, 2023 to RMB826.1 million as of December 31, 2024, primarily due to (i) an
increase in prepayments to suppliers from RMB95.3 million as of December 31, 2023 to
RMB644.6 million as of December 31, 2024, mainly because we further increased prepayments
to alumina and coal suppliers to (a) prepare for the pilot production of the new production line
for aluminum hydroxide that commenced in December 2024; and (b) secure a stable supply of
coal; and (ii) an increase in value-added tax recoverable from RMB8.7 million as of December
31, 2023 to RMB94.2 million as of December 31, 2024, mainly because we incurred more input
tax for the construction and the purchase of equipment related to the new production line for
aluminum hydroxide and the green energy projects in 2024. Our prepayments and other
receivables increased by 20.0% from RMB826.1 million as of December 31, 2024 to
RMB991.6 million as of May 31, 2025, primarily because we had refundable prepayments on
acquisition of long-lived assets of RMB358.3 million as of May 31, 2025 compared to nil as
of December 31, 2024, mainly due to the termination of our purchase of power generation
facilities. We made prepayment for the purchase of power generation facilities to construct an
aluminum smelting project in Indonesia. However, we terminated the purchase of power
generation facilities since we decided not to proceed with the aluminum smelting project in
Indonesia due to our change in overseas expansion strategy as we want to focus our first
globalization attempt on the Saudi Project. The prepayment on the acquisition of power
generation facilities will be refunded before December 31, 2025. Such an increase was partially
offset by a decrease in prepayments to suppliers from RMB644.6 million as of December 31,
2024 to RMB226.3 million as of May 31, 2025, mainly because we commenced a new bauxite
procurement model and purchased bauxite directly from suppliers.
As of September 30, 2025, approximately RMB493.9 million, or 49.9% of our
prepayments and other receivables as of May 31, 2025, had been settled.
FINANCIAL INFORMATION
– 383 –


--- page 394 ---
Financial Assets at Fair Value Through Profit or Loss
Our financial assets at fair value through profit or loss (“FVTPL”) consisted of wealth
management products. Our investment in financial assets at FVTPL will be subject to
compliance with Chapter 14 of the Listing Rules after Listing. We had financial assets at
FVTPL of RMB30.0 million, nil, nil and RMB699.8 million as of December 31, 2022, 2023,
2024 and May 31, 2025, respectively.
Our financial assets at FVTPL decreased from RMB30.0 million as of December 31, 2022
to nil as of December 31, 2023, primarily due to the maturity of our wealth management
products in 2022. Our financial assets at FVTPL increased from nil as of December 31, 2024
to RMB699.8 million as of May 31, 2025, primarily due to the purchase of new wealth
management products in the five months ended May 31, 2025.
From time to time, we may purchase wealth management products with the primary
purpose of capital preservation. We primarily invest in short-term and low-risk wealth
management products issued by reputable financial institutions to ensure controllable risk
exposure from our investments. The investment decisions are made on a case-by-case basis
after careful consideration of a number of factors, such as general market conditions, credit of
the commercial banks, our cash flow performance and the expected profit or potential loss of
the investments. Our deputy general manager and our head of financial department are jointly
responsible for the formulation and decision-making of the wealth management products
investment strategy. Our financial department is responsible for the screening of wealth
management products, execution of investment operations, accounting processing and post-
investment tracking and management. Before the purchase of wealth management products, the
financial department is required to conduct a comprehensive assessment covering numerous
factors, such as the risk level of the wealth management products, the credibility of the issuing
institution, market risks and liquidity risks. Based on the assessment results, our financial
department will determine whether the product aligns with the our operational and investment
objectives, thereby providing a basis for subsequent operations. Our head and members of the
financial department have extensive financial expertise and experience.
Amounts Due from Related Parties
We had amounts due from related parties of RMB4,260.1 million, RMB3,752.4 million,
nil and nil as of December 31, 2022, 2023, 2024 and May 31, 2025, respectively. Our amounts
due from related parties primarily consisted of amounts due from Innovation Group, which
were interest free and unsecured with no fixed repayment terms. Our amounts due from related
parties are non-trade in nature. As advised by our PRC Legal Advisor, our arrangements under
amounts due from related parties may be deemed as a private lending to the related parties and
the private lending violates the General Lending Provisions () promulgated by
the PBOC in June 1996. However, as advised by our PRC Legal Advisor, as the latest Judicial
Interpretation of Private Lending of the Supreme People’s Court has confirmed the validity of
the private loan under certain circumstances and the Company has not received any illegal
income from the private lending, the risk of the Company being penalized by regulatory
FINANCIAL INFORMATION
– 384 –


--- page 395 ---
authorities under the General Lending Provisions is remote. Our amounts due from related
parties decreased from RMB4,260.1 million as of December 31, 2022 to RMB3,752.4 million
as of December 31, 2023, and further to nil as of December 31, 2024 and May 31, 2025,
primarily due to the settlement of the amount due from Innovation Group, mainly as a result
of the offset of considerations among related parties as part of the Reorganization. See Note
41(b) of the Accountants’ Report in Appendix I to this prospectus.
Restricted Bank Deposits
Our restricted bank deposits primarily represented funds held as guarantees for bill
payments. We had restricted bank deposits of RMB2,798.7 million, RMB1,309.1 million,
RMB681.4 million and RMB591.3 million as of December 31, 2022, 2023, 2024 and May 31,
2025, respectively. Our restricted bank deposits decreased by 53.2% from RMB2,798.7 million
as of December 31, 2022 to RMB1,309.1 million as of December 31, 2023, and further
decreased significantly to RMB681.4 million as of December 31, 2024, primarily due to the
decreasing issuance of bill payables and letters of credit. Our restricted bank deposits
decreased by 13.2% from RMB681.4 million as of December 31, 2024 to RMB591.3 million
as of May 31, 2025, primarily due to the settlement of accepted bills and bills receivables upon
maturity.
Trade, Bills and Other Payables
Our trade and bills payables represented (i) trade payables; (ii) bills payables; and (iii)
bills payables under note financing arrangement. The maturities of our bill payables are
primarily 180 days and 365 days. See Note 26 of the Accountants’ Report in Appendix I to this
prospectus. Our other payables represented (i) payable for acquisition of property, plant and
equipment; (ii) other taxes payables; (iii) payables to a finance provider; (iv) amounts due to
independent third parties; (v) payroll and welfare payables; (vi) payable for acquisition of
carbon emission rights; (vii) deposits; (viii) outsourced service payables; (ix) advance receipt
of value-added tax from customers; (x) investment deposit received from an independent third
party; (xi) accrued listing expenses; (xii) accrued issued costs; (xiii) advance receipt for
disposal of property, plant and equipment; (xiv) payable to an independent third party under
bankruptcy reorganization; and (xv) payable for the acquisition of aluminum production quota.
The following table sets forth our trade, bills and other payables as of the dates indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,360.2 980.9 1,246.6 1,179.5
Bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118204.3 407.6 72.2 150.0
Bills payables under note
financing arrangement /H1118/H1118/H1118/H1118/H1118/H11183,871.0 2,087.1 110.0 500.0
5,435.5 3,475.6 1,428.8 1,829.5
FINANCIAL INFORMATION
– 385 –


--- page 396 ---
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Other payables – current
Payable for acquisition of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118701.9 721.5 596.1 1,183.8
Other taxes payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118178.4 171.0 196.7 206.4
Payables to a finance
provider /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118163.4 65.1 – –
Amounts due to independent
third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111896.2 60.0 482.8 212.9
Payroll and welfare payables /H1118 69.5 65.7 85.2 48.9
Payable for acquisition of
carbon emissions rights /H1118/H1118/H111823.9 22.4 25.0 23.3
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833.7 14.5 52.3 46.7
Outsourced service payables /H1118 7.9 11.1 6.0 5.6
Advance receipt of value-
added tax from customers /H1118/H1118 3.4 1.0 48.4 44.7
Investment deposit received
from an independent third
party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 80.0 – –
Accrued listing expenses /H1118/H1118/H1118/H1118– – 10.0 6.6
Accrued issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3.3 2.0
Advance receipt for disposal
of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 132.7
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822.3 10.7 10.8 12.8
1,300.6 1,223.0 1,516.6 1,926.4
Other payables – non-current
Payable to an independent
third party under
bankruptcy
reorganization
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868.1 68.1 68.1 –
Payable for acquisition of
aluminum production
quota
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118587.9 632.9 681.5 702.6
656.0 701.0 749.6 702.6
Notes:
(1) Amount represented the payable for acquisition of property, plant and equipment to an independent third party
under a reorganization project. The amount was fully settled in March 2025.
FINANCIAL INFORMATION
– 386 –


--- page 397 ---
(2) Amount represented the consideration payables to an independent third party, which was a related party of the
independent third party under a reorganization project as disclosed in note (1), for purchase of the annual
aluminum production quota in the quantity of 140.0 kt for cash consideration of RMB792.5 million, which was
payable in four installments after July 2026. The annual aluminum production quota of 140.0 kt has been
included in our total production quota of 788.1 kt per year of aluminum quota. Payable for acquisition of
aluminum production quota was measured at amortized cost using the effective interest rate method and
7.375% per annum. In June 2025, a supplementary agreement was entered between Inner Mongolia
Chuangyuan and the independent third party, pursuant to which Inner Mongolia Chuangyuan agreed to change
the repayment terms. RMB594.3 million has been paid in June 2025 and the remaining amount will be paid
after January 1, 2027.
Trade and Bills Payables
We had trade and bills payables of RMB5,435.5 million, RMB3,475.6 million,
RMB1,428.8 million and RMB1,829.5 million as of December 31, 2022, 2023, 2024 and May
31, 2025, respectively. Our trade and bills payables decreased by 36.1% from RMB5,435.5
million as of December 31, 2022 to RMB3,475.6 million as of December 31, 2023, primarily
due to (i) a decrease in bills payables under note financing arrangement from RMB3,871.0
million as of December 31, 2022 to RMB2,087.1 million as of December 31, 2023, resulting
from the settlement of our payables in 2023. See “— Indebtedness — Bills Payables Under
Note Financing Arrangement”; and (ii) a decrease in trade payables from RMB1,360.2 million
as of December 31, 2022 to RMB980.9 million as of December 31, 2023, partially offset by
an increase in bills payables from RMB204.3 million as of December 31, 2022 to RMB407.6
million as of December 31, 2023, mainly due to the change of our settlement method. In
specific, our settlement methods with certain carbon anode suppliers have changed from cash
payments to bill payments.
Our trade and bills payables decreased by 58.9% from RMB3,475.6 million as of
December 31, 2023 to RMB1,428.8 million as of December 31, 2024, primarily due to (i) a
decrease in bills payables under note financing arrangement from RMB2,087.1 million as of
December 31, 2023 to RMB110.0 million as of December 31, 2024, mainly because we reduced
the use of financing arrangement of bill payables. See “— Indebtedness — Bills Payables
under Note Financing Arrangement;” and (ii) a decrease in bills payables from RMB407.6
million as of December 31, 2023 to RMB72.2 million as of December 31, 2024, mainly due
to a decreased use of bills payables, primarily due to the change of our settlement method with
suppliers. In specific, our settlement methods with certain alumina suppliers have changed
from bill payments to cash payments. Such a decrease was partially offset by an increase in
trade payables from RMB980.9 million as of December 31, 2023 to RMB1,246.6 million as of
December 31, 2024, mainly due to our increased settlement period with certain carbon anode
suppliers and a change in settlement method with certain alumina suppliers. Our trade and bills
payables increased by 28.0% from RMB1,428.8 million as of December 31, 2024 to
RMB1,829.5 million as of May 31, 2025, primarily due to an increase in bills payables under
note financing arrangement from RMB110.0 million as of December 31, 2024 to RMB500.0
million as of May 31, 2025, mainly as a result of an increase in use of financing arrangements
of bill payables. See “— Indebtedness — Bills Payables under Note Financing Arrangement.”
FINANCIAL INFORMATION
– 387 –


--- page 398 ---
Our trade payables are non-interest-bearing and are normally settled within 180 days. The
following table sets forth an aging analysis of the trade and bills payables based on the invoice
dates as of the dates indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118879.6 567.8 633.5 691.9
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118294.7 215.6 292.8 247.0
91 days to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H111851.1 66.9 105.2 25.7
Over 181 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134.8 130.6 215.1 214.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,360.2 980.9 1,246.6 1,179.5
The following table sets forth the turnover days of our trade payables for the years
indicated:
For the year ended December 31,
Five months
ended
May 31,
2022 2023 2024 2025
(days)
Trade payables turnover
days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834.3 36.7 36.8 31.5
Note:
(1) Trade payables turnover days for a year or period equal the average of the opening and closing balance
of trade payables for the relevant year or period divided by the cost of sales for the relevant year or
period and multiplied by the number of days in the relevant year or period, which is 360 days for each
year and 150 days for the five months ended May 31, 2025.
Our trade payables turnover days remained relatively stable at 34.3 days, 36.7 days and
36.8 days in 2022, 2023 and 2024, respectively. Our trade payable turnover days decreased
from 36.8 days in 2024 to 31.5 days in the five months ended May 31, 2025, primarily due to
our increase in costs of raw materials, mainly as a result of the increase in average market
prices of bauxite as well as our increase in production volume of aluminum hydroxide.
As of September 30, 2025, approximately RMB785.4 million, or 66.6% of our trade
payables as of May 31, 2025, had been settled.
FINANCIAL INFORMATION
– 388 –


--- page 399 ---
Other Payables
We had other payables of RMB1,956.6 million, RMB1,924.0 million, RMB2,266.2
million and RMB2,629.0 million as of December 31, 2022, 2023, 2024 and May 31, 2025,
respectively. Our other payables remained relatively stable at RMB1,956.6 million as of
December 31, 2022 and RMB1,924.0 million as of December 31, 2023.
Our other payables increased by 17.8% from RMB1,924.0 million as of December 31,
2023 to RMB2,266.2 million as of December 31, 2024 mainly due to an increase in amounts
due to independent third parties from RMB60.0 million as of December 31, 2023 to RMB482.8
million as of December 31, 2024, to meet our business needs. See “— Indebtedness —
Amounts Due to Independent Third Parties.” Our other payables increased by 16.0% from
RMB2,266.2 million as of December 31, 2024 to RMB2,629.0 million as of May 31, 2025,
primarily due to an increase in payables for the acquisition of property, plant and equipment,
mainly attributable to our continuous construction of our green power plants and new
production line for aluminum hydroxide.
As of September 30, 2025, approximately RMB739.5 million, or 28.1% of our other
payables as of May 31, 2025, had been settled.
Contract Liabilities
Our contract liabilities primarily represented advances from customers for purchasing
aluminum ingots and alumina. During the Track Record Period, we had contract liabilities of
RMB26.3 million, RMB7.0 million, RMB372.8 million and RMB344.1 million as of December
31, 2022, 2023, 2024 and the five months ended May 31, 2025. Our contact liabilities
decreased by 73.5% from RMB26.3 million as of December 31, 2022 to RMB7.0 million as of
December 31, 2023, primarily because we did not engage in the sales of aluminum ingots at
the end of 2023. Our contract liabilities increased significantly from RMB7.0 million as of
December 31, 2023 to RMB372.8 million as of December 31, 2024, primarily due to (i) our
increase in sales of aluminum ingots to independent third parties; and (ii) our decrease in sales
of liquid aluminum to related parties to reduce the proportion of connected transactions. Our
contract liabilities decreased by 7.7% from RMB372.8 million as of December 31, 2024 to
RMB344.1 million as of May 31, 2025, primarily due to customer acceptance of aluminum
ingots and alumina in the middle of 2025.
As of September 30, 2025, approximately RMB342.8 million, or 99.6% of our contract
liabilities as of May 31, 2025, had been recognized as revenue.
FINANCIAL INFORMATION
– 389 –


--- page 400 ---
KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios for the years indicated:
Y ear ended December 31,
Five months ended
May 31,
2022 2023 2024 2024 2025
(unaudited)
Gross profit margin (%) (1) /H1118/H1118/H1118/H111815.1 16.9 28.2 27.9 19.9
Net profit margin (%) (2) /H1118/H1118/H1118/H1118/H1118/H11186.8 7.8 17.3 17.0 11.9
EBITDA margin (Non-IFRS
measure) (%) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.5 21.3 31.6 31.8 23.1
Return on equity (%) (4) /H1118/H1118/H1118/H1118/H1118/H111862.0 40.2 91.1 34.6 31.1
Notes:
(1) Gross profit margin equals gross profit for the year or period divided by revenue and multiplied by
100%. See “— Period-to-period Comparison of Results of Operations — Y ear ended December 31, 2023
Compared with Y ear ended December 31, 2022 — Gross Profit and Gross Profit Margin”, “—
Period-to-period Comparison of Results of Operations — Y ear ended December 31, 2024 Compared
with Y ear ended December 31, 2023 — Gross Profit and Gross Profit Margin” and “— Period-to-period
Comparison of Results of Operations — Five Months ended May 31, 2025 Compared with Five Months
ended May 31, 2024 — Gross Profit and Gross Profit Margin” for the discussion on the changes in gross
profit margin during the Track Record Period.
(2) Net profit margin equals profit or total comprehensive income for the year or period divided by revenue
for the year or period and multiplied by 100%.
(3) EBITDA margin (Non-IFRS measure) equals EBITDA (Non-IFRS measure) for the year or period
divided by revenue for the year or period and multiplied by 100%.
(4) Return on equity equals profit or total comprehensive income for the year or period divided by the
average of the beginning and ending total equity for the year or period and multiplied by 100%.
Our net profit margin remained relatively stable at 6.8% and 7.8% in 2022 and 2023,
respectively. Our EBITDA margin (Non-IFRS measure) remained relatively stable at 20.5%
and 21.3% in 2022 and 2023, respectively. Our net profit margin increased significantly from
7.8% in 2023 to 17.3% in 2024. Our EBITDA margin (Non-IFRS measure) increased from
21.3% in 2023 to 31.6% in 2024. Our increases in net profit margin and EBITDA margin
(non-IFRS measure) from 2023 to 2024 were primarily due to an increase in gross profit. See
“— Period-to-period Comparison of Results of Operations — Y ear ended December 31, 2024
Compared with Y ear ended December 31, 2023 — Gross Profit and Gross Profit Margin.” Our
net profit margin decreased from 17.0% in the five months ended May 31, 2024 to 11.9% in
the same period of 2025. Our EBITDA margin (non-IFRS measure) decreased from 31.8% in
the five months ended May 31, 2024 to 23.1% in the same period of 2025. Our decrease in net
profit margin and EBITDA margin (non-IFRS measure) were primarily due to a decreases in
gross profit margin. See “— Period-to-period Comparison of Results of Operations — Five
Months ended May 31, 2025 compared with Five Months ended May 31, 2024 — Gross Profit
and Gross Profit Margin.”
FINANCIAL INFORMATION
– 390 –


--- page 401 ---
Our return on equity decreased from 62.0% in 2022 to 40.2% in 2023, mainly due to the
capital injection from a non-controlling interest to Shandong Chuangyuan of RMB439.0
million. Our return on equity increased from 40.2% in 2023 to 91.1% in 2024, primarily due
to an increase in profit for the period from RMB1,080.6 million in 2023 to RMB2,629.5 million
in 2024, primarily as a result of an increase in gross profit, mainly because of (i) an increase
in ASP of electrolytic aluminum and alumina, driven by the increase in average market price;
and (ii) the decrease in price of certain raw materials. Our return on equity remained relatively
stable at 34.6% in the five months ended May 31, 2024 and 31.1% in the same period of 2025.
LIQUIDITY AND CAPITAL RESOURCES
We have historically funded our cash requirements principally from cash generated from
operations and external financing. Going forward, we believe that our liquidity requirements
will be satisfied by using a combination of operating cash flow, equity and debt financing and
the estimated net proceeds received from the Global Offering.
Cash Flow
The following table sets forth our cash flow for the years indicated:
Y ear ended December 31,
Five months
ended May 31,
2022 2023 2024 2025
(RMB in millions)
Net cash flows generated from
operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,869.1 4,554.2 3,461.8 832.9
Net cash flows (used in)/generated
from investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(664.6) 1,632.1 (2,426.5) (1,942.8)
Net cash flows (used in)/generated
from financing activities /H1118/H1118/H1118/H1118/H1118/H1118(1,434.0) (5,761.1) (1,443.0) 1,404.4
Net increase/(decrease) in cash and
cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(229.5) 425.2 (407.7) 294.5
Cash and cash equivalents at the
beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118388.4 158.9 584.1 176.4
Cash and cash equivalents at end of
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158.9 584.1 176.4 470.9
FINANCIAL INFORMATION
– 391 –


--- page 402 ---
Net Cash Flows Generated from Operating Activities
Our net cash flows generated from operating activities primarily represented our profit
before tax for the period adjusted by: (i) non-cash and non-operating items; and (ii) changes
in working capital.
In the five months ended May 31, 2025, our net cash flows generated from operating
activities were RMB832.9 million, which was primarily attributed to our profit before tax of
RMB1,035.6 million, as adjusted by (i) non-cash and non-operating items, primarily
comprising (a) finance costs of RMB262.4 million, and (b) depreciation of property, plant and
equipment of RMB323.5 million; and (ii) changes in working capital, primarily comprising (a)
an increase in receivables at FVTOCI of RMB38.1 million, and (b) a decrease in prepayments
and other receivables of RMB207.4 million.
In 2024, our net cash flows generated from operating activities were RMB3,461.8 million,
which was primarily attributed to our profit before tax of RMB3,280.9 million, as adjusted by
(i) non-cash and non-operating items, primarily comprising (a) finance costs of RMB761.6
million; and (b) depreciation of property, plant and equipment of RMB617.1 million; and (ii)
changes in working capital, primarily comprising (a) an increase in receivables at FVTOCI of
RMB729.6 million; and (b) an increase in prepayments and other receivables of RMB667.7
million.
In 2023, our net cash flows generated from operating activities were RMB4,554.2 million,
which was primarily attributed to our profit before tax of RMB1,272.5 million, as adjusted by
(i) non-cash and non-operating items, primarily comprising (a) finance costs of RMB939.7
million; (b) depreciation of property, plant and equipment of RMB546.9 million; and (c)
depreciation of right-of-use assets of RMB162.8 million; and (ii) changes in working capital,
primarily comprising (a) an increase in trade and bills payables of RMB1,102.2 million; and
(b) a decrease in inventories of RMB505.9 million.
In 2022, our net cash flows generated from operating activities were RMB1,869.1 million,
which was primarily attributed to our profit before tax of RMB1,047.7 million, as adjusted by
(i) non-cash and non-operating items, primarily comprising (a) finance costs of RMB1,061.9
million; (b) depreciation of property, plant and equipment of RMB462.6 million; and (c)
depreciation of right-of-use assets of RMB201.8 million; and (ii) changes in working capital,
primarily comprising (a) a decrease in trade and bills payables of RMB240.2 million; and (b)
an increase in inventories of RMB347.7 million.
Net Cash Flows Generated from or Used in Investing Activities
In the five months ended May 31, 2025, our net cash flows used in investing activities
were RMB1,942.8 million, which was primarily attributable to (i) payments for acquisition of
property, plant and equipment of RMB1,301.5 million; (ii) placement of restricted bank
deposits of RMB1,330.4 million; and (iii) purchases of financial assets at FVTPL of RMB999.9
million, partially offset by (i) withdrawal of restricted bank deposits of RMB1,421.0 million;
and (ii) proceeds from disposal of property, plant and equipment of RMB2.5 million.
FINANCIAL INFORMATION
– 392 –


--- page 403 ---
In 2024, our net cash flows used in investing activities were RMB2,426.5 million, which
was primarily attributable to (i) payments for acquisition of property, plant and equipment of
RMB3,102.5 million; (ii) placement of restricted bank deposits of RMB2,138.0 million; and
(iii) an advance to a related party of RMB1,983.0 million, partially offset by (i) withdrawal of
restricted bank deposits of RMB2,758.9 million; and (ii) repayment received from a related
party of RMB1,985.1 million.
In 2023, our net cash flows generated from investing activities was RMB1,632.1 million,
which was primarily attributable to (i) withdrawal of restricted bank deposits of RMB3,947.7
million; (ii) repayments received from a related party of RMB1,002.9 million, partially offset
by placement of restricted bank deposits of RMB2,499.5 million.
In 2022, our net cash flows used in investing activities was RMB664.6 million, which was
primarily attributable to (i) placement of restricted bank deposits of RMB2,829.2 million; (ii)
payments for acquisition of property, plant and equipment of RMB956.3 million; (iii)
purchases of financial assets at FVTPL of RMB594.0 million, partially offset by (i) proceeds
from disposal of financial assets at FVTPL of RMB564.1 million; and (ii) proceeds on disposal
of intangible assets of RMB354.7 million.
Net Cash Flows Used in or Generated from Financing Activities
In the five months ended May 31, 2025, our net cash flows generated from financing
activities was RMB1,404.4 million, which was primarily attributable to (i) payments for notes
financing (upon maturity of bill) of RMB110.0 million; and (ii) repayment of borrowings of
RMB2,417.7 million, partially offset by new borrowings raised of RMB4,330.8 million.
In 2024, our net cash flows used in financing activities was RMB1,443.0 million, which
was primarily attributable to (i) payments for notes financing (upon maturity of bill) of
RMB3,237.1 million; and (ii) repayment of borrowings of RMB2,386.5 million, partially offset
by new borrowings raised of RMB4,238.7 million.
In 2023, our net cash flows used in financing activities was RMB5,761.1 million, which
was primarily attributable to (i) repayment of borrowings of RMB6,538.5 million; (ii)
payments for notes financing (upon maturity of bill) of RMB5,534.0 million; (iii) payments to
an outsourcing supplier; and (iv) repayment of loans from related parties of RMB1,194.3
million, partially offset by (i) new borrowings raised of RMB4,918.0 million; and (ii) proceeds
from notes financing of RMB3,704.4 million.
In 2022, our net cash flows used in financing activities was RMB1,434.0 million, which
was primarily attributable to (i) payments for notes financing (upon maturity of bill) of
RMB2,504.0 million; and (ii) repayment of borrowings of RMB1,519.0 million; partially offset
by proceeds from notes financing of RMB3,765.1 million.
FINANCIAL INFORMATION
– 393 –


--- page 404 ---
Current Assets and Liabilities
The following table sets forth our current assets and liabilities as of the dates indicated:
As of December 31,
As of
May 31,
As of
September 30,
2022 2023 2024 2025 2025
(RMB in millions)
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,761.0 1,255.1 1,577.7 2,253.3 2,111.2
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840.2 96.1 39.1 84.8 100.4
Receivables at fair value
through other
comprehensive income
(“FVTOCI”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829.1 62.7 485.8 91.0 38.4
Prepayments and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118331.3 181.7 823.8 989.3 1,685.7
Financial assets at fair value
through profit or loss
(“FVTPL”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830.0 – – 699.8 –
Amounts due from related
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,260.1 3,752.4 – – –
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 . 9––– –
Restricted bank deposits /H1118/H1118/H11182,798.7 1,309.1 681.4 591.3 1,862.2
Cash and cash equivalents /H1118/H1118 158.9 584.1 176.4 470.9 568.7
Total current assets /H1118/H1118/H1118/H1118/H1118/H11189,418.2 7,241.2 3,784.2 5,180.4 6,366.6
Current liabilities
Trade, bills and other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,736.1 4,698.5 2,945.4 3,755.9 4,966.6
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111826.3 7.0 372.8 344.1 355.6
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280.6 346.6 10.7 46.5 59.4
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.6 2.7 8.8 12.5 7.4
Bank and other borrowings /H1118 8,342.3 4,251.0 4,941.6 6,676.5 7,564.2
Amounts due to related
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118317.2 416.1 – – –
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 159.5 458.9 66.6 188.0
Total current liabilities /H1118/H1118/H111815,705.1 9,881.4 8,783.2 10,902.1 13,141.2
Net current liabilities /H1118/H1118/H1118/H1118(6,286.9) (2,640.2) (4,954.0) (5,721.7) (6,774.6)
FINANCIAL INFORMATION
– 394 –


--- page 405 ---
Our net current liabilities decreased significantly from RMB6,286.9 million as of
December 31, 2022 to RMB2,640.2 million as of December 31, 2023. The decrease was
primarily due to (i) a decrease in bank and other borrowings. See “— Indebtedness — Bank
and Other Borrowings;” and (ii) a decrease in trade, bills and other payables. See
“— Discussion of Selected Items from the Consolidated Statements of Financial Position —
Trade, Bills and Other Payables”.
Our net current liabilities increased from RMB2,640.2 million as of December 31, 2023
to RMB4,954.0 million as of December 31, 2024. The increase was primarily due to a decrease
in amounts due from related parties, mainly due to a decrease in amounts due from Innovation
Group, mainly as a result of the offset of considerations among related parties as part of the
Reorganization, which had been settled as of December 31, 2024. See “— Discussion of
Selected Items from the Consolidated Statements of Financial Position — Amounts Due from
Related Parties.” Such a decrease was partially offset by a decrease in trade, bills and other
payables, mainly as a result of a decrease in bills payables under note financing arrangements,
resulting from the settlement of payables. See “— Discussion of Selected Items from the
Consolidated Statements of Financial Position — Trade, Bills and Other Payables.”
Our net current liabilities increased from RMB4,954.0 million as of December 31, 2024
to RMB5,721.7 million as of May 31, 2025. The increase was primarily due to (i) an increase
in bank and other borrowings. See “— Indebtedness — Bank and Other Borrowings;” and (ii)
an increase in trade, bills and other payables. See “— Discussion of Selected Items from the
Consolidated Statements of Financial Position — Trade, Bills and Other Payables.” Such an
increase was partially offset by an increase in inventories. See “— Discussion of Selected
Items from the Consolidated Statements of Financial Position — Inventories.”
Our net current liabilities increased by 18.6% from RMB5,712.7 million as of May 31,
2025 to RMB6,774.6 million as of September 30, 2025. This increase was primarily due to (i)
an increase in trade, bills and other payables, mainly as a result of the increase in financing
activities to obtain capital; (ii) an increase in bank and other borrowings, mainly as a result of
the reclassification from long-term bank borrowings to short-term bank borrowings; (iii) a
decrease in financial assets at FVTPL, mainly as a result of the maturity of our wealth
management products in June 2025; and (iv) a decrease in inventories, mainly as a result of the
consumption of raw materials, primarily attributable to the commencement of production of
our new production line for aluminum hydroxide. Such an increase was partially offset by (i)
an increase in restricted bank deposits, mainly as a result of an increase in issuance of bill
payables; and (ii) an increase in prepayments and other receivables, mainly as a result of the
increase in prepayment for bauxite procurement to ensure stable bauxite supply.
FINANCIAL INFORMATION
– 395 –


--- page 406 ---
We intend to improve our net current liabilities position through the following measures:
(i) We continuously enhance our operations through production expansion and cost
optimization to boost operating profit and net operating cash inflow. We intend to
increase our revenue stream and generate operating cash flow by expanding our
production capacity. For example, we commenced the pilot production of our
aluminum hydroxide production facility with an annual designed production
capacity of 1,500.0 kt. In addition, we continuously boost our profitability by
strengthening our cost advantages. For example, we are constructing larger-scale
wind and solar power plants in Huolinguole, Inner Mongolia and other cities in close
proximity to reduce our electricity costs. We also plan to extend the cost advantages
to our future overseas operations in Saudi Arabia which has lower electricity costs
and raw material costs. See “Business — Our Strategies — Optimize the Energy
Structure and Raw Material Supply and Improve the Production Techniques to
Strengthen Our Costs Advantages.” We anticipate that these measures will further
enhance our operations and encourage higher operating profit and net operating cash
inflow;
(ii) We closely monitor our investment cash flow and capital expenditures and
maintain a healthy cash cycle. We regularly review our investment cash flow and
capital expenditures to ensure that they align with our cash flow surplus, preventing
mismatches between our spending on long-term assets and available cash reserves.
In addition, we prepare cash flow forecasts from time to time to project our liquidity
position for our management to review to ensure the sufficiency of our financial
resources.
(iii) We utilize multiple financing channels, including equity financing and debt
financing. We plan to utilize all financial resources available to us, including the net
proceeds from the Global Offering, capital injection from equity shareholders and
other financing activities to reduce our bank and other borrowings. In addition, we
will continue to maintain a stable relationship with our principal banks to promptly
obtain, renew or extend our bank borrowings, if necessary, on acceptable terms. We
believe that these measures can help us control the current liabilities; and
(iv) We plan to improve our borrowing structure. We intend to improve our borrowing
structure by negotiating with our principal banks and diversifying our borrowing
channels to secure more favorable terms and interest rates. For example, we have
initiated negotiations with other banks to explore borrowing options with more
favorable terms and conditions. We expect that our new borrowing structure will
have longer terms, leading to a significant improvement in our net current liabilities
position.
FINANCIAL INFORMATION
– 396 –


--- page 407 ---
INDEBTEDNESS
As of September 30, 2025, being the indebtedness date for the purpose of the
indebtedness statement, we had a total indebtedness of RMB14,205.7 million. The following
table sets forth the details of our indebtedness as of September 30, 2025:
As of December 31,
As of
May 31,
As of
September 30,
2022 2023 2024 2025 2025
(RMB in millions)
Current
Bills payables under note
financing arrangement /H1118/H1118/H11183,871.0 2,087.1 110.0 500.0 1,038.3
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280.6 346.6 10.7 46.5 59.4
Bank and other borrowings /H1118 8,342.3 4,251.0 4,941.6 6,676.5 7,564.2
Amounts due to related
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118317.2 416.1 – – –
Amounts due to independent
third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111896.2 60.0 482.8 212.9 456.2
12,907.3 7,160.8 5,545.1 7,435.9 9,118.1
Non-current
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118674.0 459.8 417.9 172.8 162.3
Bank and other borrowings /H1118 2,488.0 5,030.8 6,006.6 5,844.9 4,925.3
3,162.0 5,490.6 6,424.6 6,017.7 5,087.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,069.3 12,651.4 11,969.6 13,453.6 14,205.7
FINANCIAL INFORMATION
– 397 –


--- page 408 ---
Lease Liabilities
As of December 31, 2022, 2023, 2024 and May 31, 2025 and September 30, 2025, our
total lease liabilities (including current and non-current portions) amounted to RMB954.6
million, RMB806.4 million, RMB428.6 million, RMB219.3 million and RMB221.7 million,
respectively. As of September 30, 2025, we had no lease commitment.
The following table sets forth our lease liabilities in absolute amount as of the dates
indicated:
As of December 31,
As of
May 31,
As of
September 30,
2022 2023 2024 2025 2025
(RMB in millions)
Non-current lease liabilities /H1118 674.0 459.8 417.9 172.8 162.3
Current lease liabilities /H1118/H1118/H1118/H1118280.6 346.6 10.7 46.5 59.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118954.6 806.4 428.6 219.3 221.7
Our total lease liabilities decreased by 15.5% from RMB954.6 million as of December 31,
2022 to RMB806.4 million as of December 31, 2023, and further decreased to RMB428.6
million as of December 31, 2024, primarily due to our repayment for principals of finance
leasing. Our total lease liabilities decreased by 48.8% from RMB428.6 million as of December
31, 2024 to RMB219.3 million as of May 31, 2025, primarily due to our rental payment. Our
total lease liabilities remained relatively stable at RMB219.3 million and RMB221.7 million as
of May 31, 2025 and September 30, 2025, respectively.
Bank and Other Borrowings
As of December 31, 2022, 2023, 2024 and May 31, 2025 and September 30, 2025, our
bank and other borrowings amounted to RMB10,830.3 million, RMB9,281.8 million,
RMB10,948.2 million, RMB12,521.4 million and RMB12,489.5 million, respectively. Our
bank borrowings primarily comprise bank loans with effective interest rates ranging from
2.80% to 9.00% during the Track Record Period and up to September 30, 2025. See Note 29
of the Accountants’ Report in Appendix I to this prospectus. As of May 31, 2025, the bank
borrowing agreements included certain financial covenants, such as requiring positive
operating cash flows, positive net profits and debt-to-asset ratios of no more than 70%. Our
financial performance as of May 31, 2025 provided us with sufficient headroom with respect
to such financial covenants, including a debt-to-asset ratio of 53.0%, below the requirement of
no more than 70%, recorded by the relevant subsidiary. We were not restricted from
distributing dividends by financial covenants. In addition, certain of our borrowings were
guaranteed by Mr. Cui, Ms. Wang, Mr. Wang Chao, Mr. Guo Wei and Innovation Group. These
guarantees will be released prior to the Listing as represented by management of our Group.
See Note 29 of the Accountants’ Report in Appendix I to this prospectus.
As of September 30, 2025, we had unutilized banking facilities of RMB10,439.7 million,
accounting for 49.7% of our total banking facilities.
FINANCIAL INFORMATION
– 398 –


--- page 409 ---
The following table sets forth our bank and other borrowings in absolute amount as of the
dates indicated:
As of December 31, As of May 31,
As of
September 30,
2022 2023 2024 2025 2025
(RMB in millions)
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,342.3 4,251.0 4,941.6 6,676.5 7,564.2
Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H11182,488.0 5,030.8 6,006.6 5,844.9 4,925.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,830.3 9,281.8 10,948.2 12,521.4 12,489.5
The following table sets forth the breakdown of our bank and other borrowings by nature
in absolute amount as of the dates indicated:
As of December 31, As of May 31,
As of
September 30,
2022 2023 2024 2025 2025
(RMB in millions)
Secured and
guaranteed /H1118/H1118/H1118/H1118/H1118/H111810,839.3 9,201.1 9,503.9 9,907.2 9,868.2
Secured and
unguaranteed /H1118/H1118/H1118/H1118– – 400.0 – 300.6
Unsecured and
guaranteed /H1118/H1118/H1118/H1118/H1118/H1118– 3.2 957.4 2,513.3 2,250.6
Unsecured and
unguaranteed /H1118/H1118/H1118/H1118– 77.5 87.0 100.9 70.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,839.3 9,281.8 10,948.2 12,521.4 12,489.5
Our bank and other borrowings decreased by 14.3% from RMB10,830.3 million as of
December 31, 2022 to RMB9,281.8 million as of December 31, 2023, primarily due to a
decrease in current bank and other borrowings, offset by an increase in non-current bank and
other borrowings, mainly as a result of the change in our borrowing structure.
Our bank and other borrowings increased by 18.0% from RMB9,281.8 million as of
December 31, 2023 to RMB10,948.2 million as of December 31, 2024, primarily due to (i) the
increasingly used accepted bills as a settlement method in 2023 and 2024. These accepted bills,
when recorded at fair value through other comprehensive income, were simultaneously
recorded as other borrowings under accounting policies. See Note 21A of the Accountants’
Report in Appendix I to this prospectus; and (ii) the new borrowings to fund our green power
plants.
Our bank and other borrowings increased by 14.4% from RMB10,948.2 million as of
December 31, 2024 to RMB12,521.4 million as of May 31, 2025, primarily because we scaled
up our bank borrowings for the construction of our green power plants and our new production
line for aluminum hydroxide, as well as our business operation.
Our bank and other borrowings remained relatively stable at RMB12,521.4 million and
RMB12,489.5 million as of May 31, 2025 and September 30, 2025, respectively.
FINANCIAL INFORMATION
– 399 –


--- page 410 ---
Amounts Due to Related Parties
During the Track Record Period, our amounts due to related parties represent our
borrowings from related parties. Our amounts due to related parties are non-trade in nature.
Most of our amounts due to related parties were unsecured and carried at an interest rate of
7.0% per annum. See Note 41(b)(ii) of the Accountants’ Report in Appendix I to this
prospectus. As of December 31, 2022, 2023, 2024 and May 31, 2025 and September 30, 2025,
our amount due to related parties amounted to RMB317.2 million, RMB416.1 million, nil, nil
and nil, respectively. All our amounts due to related parties will be settled before Listing. As
advised by our PRC Legal Advisor, under Article 61 of the General Lending Provisions ( ൲
) promulgated by the PBOC in June 1996, financing arrangements or lending
transactions between non-financial institutions are prohibited. Therefore, as advised by our
PRC Legal Advisor, our transactions under amounts due to related parties do not comply with
the General Lending Provisions. However, there are no explicit provisions in the General
Lending Provisions imposing penalties on a company acting as a borrower. As such, as advised
by our PRC Legal Advisor, the risk of the Company being penalized by regulatory authorities
under the General Lending Provisions is remote.
Our amount due to related parties increased by 31.2% from RMB317.2 million as of
December 31, 2022 to RMB416.1 million as of December 31, 2023, mainly due to an increase
in borrowings from related parties during the initial phase of project construction.
Our amount due to related parties decreased significantly from RMB416.1 million as of
December 31, 2023 to nil as of December 31, 2024 and May 31, 2025, primarily due to our
repayment of borrowing from related parties.
Amounts Due to Independent Third Parties
As of December 31, 2022, 2023, 2024 and May 31, 2025 and September 30, 2025, our
amounts due to independent third parties amounted to RMB96.2 million, RMB60.0 million,
RMB482.8 million, RMB212.9 million and RMB456.2 million, respectively. As advised by our
PRC Legal Advisor, under Article 61 of the General Lending Provisions ()
promulgated by the PBOC in June 1996, financing arrangements or lending transactions
between non-financial institutions are prohibited. Therefore, as advised by our PRC Legal
Advisor, our transactions under amounts due to independent third parties do not comply with
the General Lending Provisions. However, there are no explicit provisions in the General
Lending Provisions imposing penalties on a company acting as a borrower. As such, as advised
by our PRC Legal Advisor, the risk of the Company being penalized by regulatory authorities
under the General Lending Provisions is remote. Based on, among other things, the legal advice
of the Company’s PRC Legal Advisor, and the discussion with the Joint Sponsors’ PRC Legal
Advisor, nothing has come to the Joint Sponsors’ attention that would reasonably case them to
doubt the conclusion that the risk of the Company being penalized by regulatory authorities
under the General Lending Provisions is remote. Our amounts due to independent third parties
decreased by 37.6% from RMB96.2 million as of December 31, 2022 to RMB60.0 million as
of December 31, 2023, mainly due to our repayment of payables to an independent third party.
FINANCIAL INFORMATION
– 400 –


--- page 411 ---
Our amounts due to independent third parties increased significantly from RMB60.0 million as
of December 31, 2023 to RMB482.8 million as of December 31, 2024, primarily due to an
increase in borrowings from independent third parties as a result of our increased bauxite
procurement in preparation for the commencement of operation of the new production line for
aluminum hydroxide. Our amounts due to independent third parties decreased by 55.9% from
RMB482.8 million as of December 31, 2024 to RMB212.9 million as of May 31, 2025,
primarily due to our settlement of amounts due to independent third parties. Our amounts due
to independent third parties increased from RMB212.9 million as of May 31, 2025 to
RMB456.2 million as of September 30, 2025, primarily due to an increase in borrowings from
independent third parties for raw material procurement. During the Track Record Period and
up to September 30, 2025, our amounts due to independent third parties were unsecured with
interest rates ranging from 0% to 6.0%.
The following table sets forth our amounts due to independent third parties as of the dates
indicated:
As of December 31, As of May 31,
As of
September 30,
2022 2023 2024 2025 2025
(RMB in million)
Independent third
party A (1) /H1118/H1118/H1118/H1118/H1118/H1118/H111896.2 60.0 289.5 – –
Independent third
party B (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 100.0 200.7 203.2
Independent third
party C (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 88.3 – –
Independent third
party D (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5.0 12.2 15.8
Independent third
party E (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 237.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111896.2 60.0 482.8 212.9 456.2
Notes:
(1) Independent third party A is a new energy technology service and metal production technology service
provider with a registered capital of RMB1,001 million. To the best of our knowledge, independent third
party A was conducting business as usual as of the Latest Practicable Date. In a reorganization project,
independent third party A was appointed by court as the reorganization investor to provide funding to
another independent third party under bankruptcy reorganization (independent third party F). Shandong
Chuangyuan was entrusted to operate the idle assets of independent third party F in the same project.
Independent third party A commenced its collaboration with us through the reorganization project in
2018 and provided borrowings to Shandong Chuangyuan under the reorganization project as the investor
to provide initial funding to assist in revitalization of the idle assets. As of the Latest Practicable Date,
Shandong Chuangyuan has fully acquired and operated the idle assets from independent third party F.
See “History, Reorganization and Corporate Structure — Major Shareholding Changes of our Group —
Establishment and Major Shareholding Changes of Shandong Chuangyuan.” Our amounts due to
independent third party A have been settled as of the Latest Practicable Date.
FINANCIAL INFORMATION
– 401 –


--- page 412 ---
(2) Independent third party B is a coal supplier with a registered capital of RMB10 million. To the best of
our knowledge, independent third party B was active and conducting business as usual as of the Latest
Practicable Date. Independent third party B commenced its collaboration with us in 2021 as one of our
coal suppliers and provided borrowings to us to settle our payments with other suppliers. Our amounts
due to independent third party B increased from RMB100.0 million as of December 31, 2024 to
RMB200.7 million as of May 31, 2025, primarily due to the increase in borrowings from independent
third party B to obtain capital for our business operation. Our borrowings from independent third parties
were one of our multiple financing channels under our normal course of business operation. Our
amounts due to independent third party B will be settled in December, 2025.
(3) Independent third party C is an aluminum alloy manufacturer with a registered capital of RMB50
million. To the best of our knowledge, independent third party C was active and conducting business as
usual as of the Latest Practicable Date. Independent third party C commenced its collaboration with us
in 2024 as one of our alumina suppliers and provided borrowings to us to settle our payments with other
suppliers. Our amounts due to independent third party C have been settled as of the Latest Practicable
Date.
(4) Independent third party D is an investor in metal business with a registered capital of HKD1. To the best
of our knowledge, independent third party D was active and conducting business as usual as of the
Latest Practicable Date. Independent third party D commenced its collaboration with us in 2024 as one
of our investors and provided borrowings to us to settle our payments with suppliers. Our amounts due
to independent third party D will be settled in December, 2025.
(5) Independent third party E is an investor in nonferrous metal business with a registered capital of
USD10.5 million. To the best of our knowledge, independent third party E was active and conducting
business as usual as of the Latest Practicable Date. Independent third party E commenced its
collaboration with us in 2025 as one of our finance providers and provided borrowings to us to settle
our payments with suppliers. Our amounts due to independent third party E will be settled in December,
2025.
As we maintained good and stable relationships with these independent third parties, we
were able to obtain favorable terms for such borrowings. These independent third parties
provided borrowings to us under favorable terms and conditions because they had confidence
in our operation and had better understanding of our credibility. In particular, one of our
independent third parties provided borrowings to us on an interest free basis, primarily because
we maintained a long-term collaboration and good relationship with it. In addition, certain of
them received interest from us under these arrangements. Therefore, we obtained financing
from these independent third parties as one of our multiple financing channels for our business
operations to support our specific business projects and procurements. These arrangements are
common practice to obtain working capital under our normal course of business. We will not
continue entering into such arrangements going forward to streamline our financial risk
management and as we have newly gained alternative financing channels.
FINANCIAL INFORMATION
– 402 –


--- page 413 ---
Bills Payables under Note Financing Arrangements
During the Track Record Period, our bills payables under note financing arrangements
were primarily related to bills issued by our Group entities in respect of certain intra-group
transactions.
As of December 31, 2022, 2023, 2024 and May 31, 2025 and September 30, 2025, our
bills payables under note financing arrangements amounted to RMB3,871.0 million,
RMB2,087.1 million, RMB110.0 million, RMB500.0 million and RMB1,038.3 million,
respectively. See “— Discussion of Selected Items from the Consolidated Statements of
Financial Position — Trade and Bills Payables.”
Our bills payables under note financing arrangements decreased by 46.1% from
RMB3,871.0 million as of December 31, 2022 to RMB2,087.1 million as of December 31,
2023, primarily because we settled our payables due to the maturity of certain payables. Our
bills payables under note financing arrangements since then decreased by 94.7% from
RMB2,087.1 million as of December 31, 2023 to RMB110.0 million as of December 31, 2024,
mainly because we reduced the use of financing arrangements of bill payables. Most of our
note financing arrangements in 2023 have been concluded upon maturity in 2024. Our bills
payables under note financing arrangements increased significantly from RMB110.0 million as
of December 31, 2024 to RMB500.0 million as of May 31, 2025, and further increased to
RMB1,038.3 million as of September 30, 2025, primarily due to an increase in the use of
financing arrangements of bill payables to obtain capital for business operation.
Our Directors confirm that there was no material covenant on any of our outstanding debt
as of the Latest Practicable Date, and there was no breach of any covenants 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 bank loans and other borrowings or breach of covenants during the Track Record Period and
up to the Latest Practicable Date.
Except as disclosed above, during the Track Record Period and up to September 30, 2025,
we did not have any material mortgages, charges, debentures, loan capital, debt securities,
loans, bank overdrafts or other similar indebtedness, finance lease or hire purchase
commitments, liabilities under acceptances (other than normal trade bills), or acceptance
credits, which were either guaranteed or unguaranteed, secured or unsecured. There has been
no material change in the indebtedness statement since September 30, 2025 up to the date of
the prospectus.
FINANCIAL INFORMATION
– 403 –


--- page 414 ---
CONTINGENT LIABILITIES
As of December 31, 2022, 2023, 2024 and May 31, 2025 and September 30, 2025, we did
not have any material contingent liabilities.
CAPITAL COMMITMENTS
We had capital commitments of RMB277.0 million, RMB252.0 million, RMB2,243.5
million and RMB1,269.8 million as of December 31, 2022, 2023, 2024 and May 31, 2025,
respectively, representing capital expenditure related to acquisition of property, plant and
equipment and intangible assets contracted for but not provided in the Historical Financial
Information.
CAPITAL EXPENDITURES
The following table sets forth the details of our capital expenditures for the years
indicated:
As of December 31,
As of
May 31,
2022 2023 2024 2025
(RMB in millions)
Payments for acquisition of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118956.3 452.5 3,102.5 1,301.5
Payments for acquisition of
right-for-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118268.6 17.6 4.1 36.1
Payments for acquisition of
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118142.9 76.0 0.7 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,367.8 546.1 3,107.3 1,337.6
Our capital expenditures in 2022, 2023, 2024 and the five months ended May 31, 2025
were RMB1,367.8 million, RMB546.1 million, RMB3,107.3 million and RMB1,337.6 million,
respectively, primarily attributable to (i) property, plant and equipment; (ii) other intangible
assets; and (iii) right-of-use assets. We funded our capital expenditure requirements during the
Track Record Period mainly from cash generated from operations and external financing. We
intend to fund our future capital expenditures and long-term investments with a combination
of operating cash flow, equity and debt financing and net proceeds received from the Global
Offering. See “Future Plans and Use of Proceeds.” We may reallocate the fund to be utilized
on capital expenditure based on our ongoing business needs.
FINANCIAL INFORMATION
– 404 –


--- page 415 ---
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet
arrangements.
MATERIAL RELATED PARTY TRANSACTIONS
For details about our related party transactions during the Track Record Period, see
“Connected Transactions” and Note 41 of the Accountants’ Report in Appendix I to this
prospectus.
Our Directors believe that our transactions with related parties during the Track Record
Period were conducted on an arm’s length basis, and they did not distort our results of
operations or make our historical results not reflective of our future performance.
FINANCIAL RISK
We are exposed to a variety of financial risks, such as market risk, credit risk and
impairment assessment and liquidity risk. Our overall risk management program focuses on the
unpredictability of financial markets and seeks to minimize potential adverse effects on our
financial performance. Our management manages and monitors these exposures to ensure
appropriate measures are implemented in a timely and effective manner. See Note 36 of the
Accountants’ Report in Appendix I to this prospectus for a detailed description of our financial
risk management.
Market Risk
Our activities expose us primarily to the financial risks of interest rates.
There has been no change to our exposure to market risk or the manner in which it
manages and measures the risk during the reporting period.
Interest rate risk
We are exposed to fair value interest rate risk in relation to restricted bank deposits,
fixed-rate bank and other borrowings, lease liabilities and amounts due to related parties. We
are also exposed to cash flow interest rates in relation to variable-rate bank balances and
variable-rate bank borrowings. Our cash flow interest rate risk is mainly concentrated on the
fluctuations of the market rates from bank balances and bank borrowings. We currently do not
hedge our exposure to cash flow and fair value interest rate risk; nevertheless, our management
monitors interest rate expenses and will consider hedging significant interest rate risk should
the need arise.
See Note 36 of the Accountants’ Report in Appendix I to this prospectus.
FINANCIAL INFORMATION
– 405 –


--- page 416 ---
Sensitivity analysis
No sensitivity analysis is presented since our management considers the exposure of cash
flow interest rate risk arising from variable-rate bank balances and variable-rate bank
borrowings is insignificant.
Credit Risk and Impairment Assessment
Credit risk refers to the risk that our counterparties will default on their contractual
obligations, resulting in financial loss to us. Our credit risk exposures are primarily attributable
to trade receivables, other receivables, receivables at FVTOCI, restricted bank deposits, cash
and cash equivalents and amounts due from related parties. We do not hold any collateral or
other credit enhancements to cover our credit risks associated with our financial assets.
Trade receivables
In order to minimize the credit risk, the Directors have delegated a team responsible for
determination of credit limits and credit approvals. Before accepting any new customer, we use
an internal credit scoring system to assess the potential customer’s credit quality and define
credit limits by customer. Limits and scoring attributed to customers are reviewed twice a year.
Other monitoring procedures are in place to ensure that follow-up actions are taken to recover
overdue debts. In addition, we perform impairment assessments under the ECL model on trade
balances individually. In this regard, our management considers that our credit risk is
significantly reduced.
We have a concentration of credit risk, as 17.93%, 79.04%, 40.60% and 36.25% of the
total trade receivables were due from our largest customer at December 31, 2022, 2023, 2024
and May 31, 2025, respectively.
We provided an ECL impairment loss of RMB556,000 during the year ended December
31, 2022 and we provided an ECL impairment loss of RMB189,000 and reversed an ECL
impairment loss of RMB349,000 during the year ended December 31, 2023, based on the
individual analysis. We provided an ECL impairment loss of RMB278,000 and reversed an
ECL impairment loss of RMB148,000 during the year ended December 31, 2024, based on the
individual analysis. We provided an ECL impairment loss of RMB375,000 and reversed an
ECL impairment loss of RMB26,000 in the five months ended May 31, 2025, based on the
individual analysis. Details of the quantitative disclosures are set out below in this prospectus.
FINANCIAL INFORMATION
– 406 –


--- page 417 ---
Other receivables
For other receivables, our management makes periodic individual assessments on the
recoverability of other receivables based on historical settlement records, past experience, and
also quantitative and qualitative information that is reasonable and supportive forward-looking
information. Our management believes that there are no significant increase in credit risk of
these amounts since initial recognition and we provided impairment based on 12m ECL. For
the years ended December 31, 2022, 2023, 2024 and the five months ended May 31, 2025, we
provided an ECL impairment loss of RMB335,000, RMB592,000, RMB1,201,000 and
RMB55,000 and reversed nil, RMB261,000, RMB665,000 and RMB1,197,000 for other
receivables, respectively.
Amounts due from related parties
Our management estimates the estimated loss rate of amounts due from related parties
based on financial background and also quantitative and qualitative information that is
reasonable and supportive forward-looking information. For the two years ended December 31,
2022 and 2023, we provided an ECL impairment loss of RMB1,235,000 and reversed an ECL
impairment loss of RMB157,000 for amounts due from related parties, respectively. For the
year ended December 31, 2024, we reversed an ECL impairment loss of RMB1,078,000 for
amounts due from related parties. For the five months ended May 31, 2024, we provided an
ECL impairment loss of RMB44,000 and reversed an ECL impairment loss of RMB315,000 for
amounts due from related parties. For the five months ended May 31, 2025, we provided an
ECL impairment loss of nil and reversed an ECL impairment loss of nil for amounts due from
related parties. Our amounts due from related parties are non-trade in nature.
Restricted bank deposits, cash and cash equivalents and receivables at FVTOCI
The restricted bank deposits, cash and cash equivalents and receivables at FVTOCI are
determined to have low credit risk at the end of each reporting period. The credit risk on
restricted bank deposits, cash and cash equivalents and receivables at FVTOCI is limited
because the counterparties are reputable banks and the risk of inability to pay or redeem at the
due date is low.
See Note 36 of the Accountants’ Report in Appendix I to this prospectus.
Financial guarantee contracts
For financial guarantee contracts, the aggregate amount of outstanding financial
guarantees issued to banks in respect of bank facilities granted to related parties as set out in
Note 41(c) that we could be required to pay amounted to RMB920,000,000 and
RMB100,000,000 as at December 31, 2022 and 2023, respectively. All of the outstanding
financial guarantees have been utilized by the related parties, respectively. The fair value of
these financial guarantees, as at dates of initial recognition, was considered insignificant. At
the end of each reporting period, our management has performed impairment assessments, and
concluded that there has been no significant increase in credit risk since initial recognition of
the financial guarantee contracts. Accordingly, the loss allowance for financial guarantee
contracts issued by us is measured at an amount equal to 12m ECL. No loss allowance was
recognized in the profit or loss as the amount of the loss allowance was not significant.
FINANCIAL INFORMATION
– 407 –


--- page 418 ---
Liquidity Risk
Our Directors have adopted an appropriate liquidity risk management framework for the
management of our short-term and long-term funding and liquidity management requirements.
We manage liquidity risk by closely and continuously monitoring our consolidated financial
position. Our Directors monitor the sufficiency of cash flows with availability of unutilized
banking facilities, internally generated funds and alternative refinancing and extension of due
date of bank and other borrowings. Our Directors also review the forecasted cash flows on an
ongoing basis to ensure that we will be able to meet our financial obligations falling due and
have sufficient capital for operation.
We entered into supplier finance arrangements to ease access to credit for our suppliers
and facilitate early settlement to the suppliers. Only a small portion of our borrowings is
subject to supplier finance arrangements. Therefore, our management does not consider the
supplier finance arrangements to result in significant liquidity risk for our Group. For details
of the arrangements, see Note 29 of the Accountants’ Report in Appendix I to this prospectus.
For details of our remaining contractual maturity for our non-derivative financial
liabilities based on the agreed repayment terms as of December 31, 2022, 2023, 2024 and
May 31, 2025, see Note 36 of the Accountants’ Report in Appendix I to this prospectus.
DIVIDENDS
No dividend was declared or paid by our Company in 2022, 2023 and the five months
ended May 31, 2025. In 2024, one of our subsidiaries declared and paid a cash dividend of
RMB330.0 million.
We are an exempted company incorporated under the laws of the Cayman Islands. Under
the Cayman Companies Act and the Articles of Association, our Company may pay a dividend
out of either the profit or share premium account, provided that in no circumstances may a
dividend be paid if this would result in our Company being unable to pay its debts as they fall
due in the ordinary course of business. We have no fixed dividend policy, and the declaration
and payment of any dividends in the future will be determined by our Board of Directors in its
discretion. In addition, our Shareholders in a general meeting may approve any declaration of
dividends, which must not exceed the amount recommended by our Board. A decision to
declare or to pay any dividends in the future, and the amount of any such dividends, will
depend on a number of factors, including our results of operations, cash flows, financial
condition, payments by our subsidiaries of cash dividends to us, business prospects, statutory,
regulatory and contractual restrictions on our declaration and payment of dividends and other
factors that our Board may consider important. We do not have a pre-determined dividend
payout ratio. There can be no assurance that dividends of any amount will be declared or
distributed in any year.
FINANCIAL INFORMATION
– 408 –


--- page 419 ---
WORKING CAPITAL CONFIRMATION
Taking into account the available cash and cash equivalents on hand, the maturity profile
of the bank and other borrowings, the status of alternative financing, refinancing and/or
extension of due dates of the relevant debts, the anticipated cash flow from the operations, the
net proceeds from the Global Offering, together with the other financial resources available to
us, our Directors are of the view that we have sufficient working capital for our present
requirements and for at least the next 12 months commencing from the date of the prospectus.
After making reasonable inquiries of the Company’s management about its working capital, the
Joint Sponsors concur with the Directors’ view.
DISTRIBUTABLE RESERVES
As of May 31, 2025, we did not have any distributable reserves.
LISTING EXPENSE
Listing expenses consist of professional fees, underwriting commissions and other fees
incurred in connection with the Global Offering. During the Track Record Period, our listing
expenses were nil, nil, RMB16.4 million and RMB4.7 million in 2022, 2023, 2024 and the five
months ended May 31, 2025, respectively. We expect to incur listing expenses of
approximately RMB161.2 million (HK$176.8 million), comprising: (i) underwriting fees of
RMB113.5 million (HK$124.5 million); and (ii) non-underwriting-related expenses of
RMB47.7 million (HK$52.4 million), which are further categorized into: (a) fees and expenses
of legal advisors and accountants of RMB27.6 million (HK$30.2 million); and (b) other fees
and expenses of RMB20.2 million (HK$22.1 million), assuming the Over- allotment Option is
not exercised and based on the Offer Price of HK$10.58 per Offer Share (being the mid-point
of the indicative Offer Price range), approximately RMB32.9 million (HK$36.1 million) of
which is expected to be charged to our consolidated statements of profit or loss, and
approximately RMB128.3 million (HK$140.8 million) of which has been or is expected to be
deducted from equity upon the completion of the Global Offering. The listing expenses are
expected to represent approximately 3.3% of the gross proceeds of the Global Offering,
assuming an Offer Price of HK$10.58 per Offer Share (being the mid-point of the indicative
Offer Price range) and that the Over-allotment Option is not exercised. The listing expenses
above are the latest practicable estimate for reference only, and the actual amount may differ
from this estimate. We do not expect such expenses to have a material adverse impact on our
results of operations in 2025.
FINANCIAL INFORMATION
– 409 –


--- page 420 ---
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS
The following is an illustrative and pro forma statement of our adjusted consolidated net
tangible assets attributable to owners of our Company which has been prepared in accordance
with Rule 4.29 of the Listing Rules and on the basis of the notes set out below for the purpose
of illustrating the effect of the Global Offering on our consolidated net tangible assets
attributed to owners of our Company as of May 31, 2025 as if Global Offering had taken place
on May 31, 2025. The unaudited pro forma statement of adjusted consolidated net tangible
assets has been prepared for illustrative purposes only and, because of its hypothetical nature,
it may not give a true picture of our financial position had the Global Offering been completed
as of May 31, 2025 or at any future date.
Audited
consolidated
net tangible
liabilities of us
attributable to
owners of our
Company as at
May 31, 2025
Estimated
net proceeds
from the
Global
Offering
Unaudited
pro forma
adjusted
consolidated
net tangible
assets of us
attributable to
owners of our
Company as at
May 31, 2025
Unaudited pro forma
adjusted consolidated
net tangible assets of us
attributable to owners
of our Company
per share as at
May 31, 2025
RMB’000 RMB’000 RMB’000 RMB HK$
(note 1) (note 2) (note 3) (note 4)
Based on an Offer Price
of HK$10.18 per Share /H1118(1,177,137) 4,504,334 3,327,197 1.66 1.82
Based on an Offer Price
of HK$10.99 per Share /H1118(1,177,137) 4,863,866 3,686,729 1.84 2.02
Notes:
1. The audited consolidated net tangible liabilities of the Group attributable to owners of the Company as at May
31, 2025 is arrived at after deducting intangible assets attributable to owners of the Company of
RMB3,187,859,000 from the audited consolidated net assets of RMB2,010,722,000 attributable to owners of
the Company at May 31, 2025 as extracted from the Accountants’ Report set out in Appendix I to this
prospectus.
2. The estimated net proceeds from the issue of the new shares pursuant to the Global Offering are based on
500,000,000 Shares at the Offer Price of HK$10.18 (equivalent to RMB9.28) and HK$10.99 (equivalent to
RMB10.02) per Share, being the low-end and high-end of the stated indicated Offer Price Range, respectively,
after deduction of the estimated underwriting fees and commissions and other listing-related expenses not yet
recognized in profit or loss up to May 31, 2025 (excluding the listing expenses that have been charged to profit
or loss during the Track Record Period). It does not take into account of any share (i) which may be allotted
and issued upon the exercise of the Over-allotment Option or any other issuance or repurchase of shares by
the Company; or (ii) which may be issued under the restricted shares schemes.
For the purpose of this unaudited pro forma statement, the estimated net proceeds from the Global Offering
are converted from HK$ into RMB at an exchange rate of HK$1.00 to RMB0.91151, which was the exchange
rate prevailing on November 6, 2025 with reference to the rate published by the People’s Bank of China. No
representation is made that the HK$ amounts have been, could have been or may be converted to RMB, or vice
versa, at that rate or any other rates or at all.
FINANCIAL INFORMATION
– 410 –


--- page 421 ---
3. The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the
Company per share are arrived at on the basis that 2,000,000,000 shares including 1,500,000,000 existing
ordinary shares in issue and 500,000,000 offer Shares were in issue assuming that the Global Offering had been
completed on May 31, 2025, without taking into account any share (i) which may be allotted and issued upon
the exercise of the Over-allotment Option or any other issuance or repurchase of shares by the Company; or
(ii) which may be issued under the restricted shares schemes.
4. The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the
Company per share are converted from RMB into HK$ at an exchange rate of RMB1.00 to HK$1.0971, which
was the exchange rate prevailing on November 6, 2025 with reference to the rate published by the People’s
Bank of China. No representation is made that the RMB amounts have been, could have been or may be
converted to Hong Kong dollars, or vice versa, at that rate or any other rates or at all.
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 at May 31, 2025 to reflect any trading result or other transaction of
the Group entered into subsequent to May 31, 2025.
NO MATERIAL ADVERSE CHANGE
After performing sufficient due diligence work which our Directors consider appropriate
and after due and careful consideration, the Directors confirm that, up to the date of this
prospectus, there had been no material adverse change in our financial or trading position or
prospects since May 31, 2025, being the end date of the periods reported in the Accountants’
Report of Appendix I to this prospectus, and there has been no event since May 31, 2025 that
would materially affect the information as set out in the Accountants’ Report in Appendix I to
this prospectus.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
Our Directors confirm that as of the Latest Practicable Date, there was no circumstance
that would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing
Rules.
FINANCIAL INFORMATION
–4 1 1–


--- page 422 ---
THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a “ Cornerstone
Investment Agreement ” and collectively, the “ Cornerstone Investment Agreements ”) with
the cornerstone investors set out below (each a “ Cornerstone Investor ” and collectively, the
“Cornerstone Investors ”), pursuant to which the Cornerstone Investors have agreed to,
subject to certain conditions, subscribe, or cause their designated entities to subscribe, at the
Offer Price for such number of Offer Shares (rounded down to the nearest whole board lot of
500 Shares) that may be purchased for an aggregate amount of approximately US$336.0
million (or approximately HK$2,612.2 million, calculated based on an exchange rate of
US$1.00 to HK$7.7745) (assuming an Offer Price of HK$10.58 per Share (being the mid-point
of the indicative Offer Price range) and exclusive of brokerage fee, the SFC transaction levy,
the AFRC transaction levy and the Stock Exchange trading fee) (the “ Cornerstone Placing ”).
Based on the Offer Price of HK$10.99 per Share, being the high-end of the indicative
Offer Price range set out in this prospectus, the total number of Offer Shares to be subscribed
by the Cornerstone Investors would be 248,298,000 Offer Shares. The table below reflects the
shareholding percentage immediately after the completion of the Global Offering.
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Approximate % of the
Offer Shares
Approximate % of the
total issued
share capital
Approximate % of the
Offer Shares
Approximate % of the
total issued
share capital
49.66% 12.41% 43.18% 11.97%
Based on the Offer Price of HK$10.58 per Share, being the mid-point of the indicative
Offer Price range set out in this prospectus, the total number of Offer Shares to be subscribed
by the Cornerstone Investors would be 246,896,000 Offer Shares. The table below reflects the
shareholding percentage immediately after the completion of the Global Offering.
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Approximate % of the
Offer Shares
Approximate % of the
total issued
share capital
Approximate % of the
Offer Shares
Approximate % of the
total issued
share capital
49.38% 12.34% 42.94% 11.90%
CORNERSTONE INVESTORS
– 412 –


--- page 423 ---
Based on the Offer Price of HK$10.18 per Share, being the low-end of the indicative
Offer Price range set out in this prospectus, the total number of Offer Shares to be subscribed
by the Cornerstone Investors would be 248,958,000 Offer Shares. The table below reflects the
shareholding percentage immediately after the completion of the Global Offering.
Assuming the Over-allotment Option
is not exercised
Assuming the Over-allotment Option
is exercised in full
Approximate % of the
Offer Shares
Approximate % of the
total issued
share capital
Approximate % of the
Offer Shares
Approximate % of the
total issued
share capital
49.79% 12.45% 43.30% 12.00%
Our Company is of the view that the Cornerstone Investment will help raise the profile
of our Company and to signify that such investors have confidence in our business and
prospect. Further, we believe that we will benefit from the cornerstone investment, taking into
account the business sectors they primarily focus on. Our Company became acquainted with
each of the Cornerstone Investors in its ordinary course of operation through the Group’s
business network or through introduction by the Company’s shareholders, business partners or
Overall Coordinators.
The Cornerstone Placing will form part of the International Offering, and save as
otherwise waived/obtained consent by the Stock Exchange, the Cornerstone Investors will not
subscribe for any Offer Shares under the Global Offering other than pursuant to the
Cornerstone Investment Agreements. The Offer Shares to be subscribed by the Cornerstone
Investors will rank pari passu in all respects with the fully paid Shares in issue and all the
Shares to be subscribed by the cornerstone investors will be counted towards the public float
for the purpose of Rule 8.08 of the Listing Rules. Immediately following the completion of the
Global Offering, (i) none of the Cornerstone Investors and/or their close associates will have
any Board representation in our Company; (ii) none of the Cornerstone Investors and/or their
close associates will become a substantial Shareholder of our Company; and (iii) equity
interests in our Company being beneficially owned by the three largest public Shareholders
will be less than 50% for the purpose of Rule 8.08(3) of the Listing Rules. The Cornerstone
Investors do not have any preferential rights in the Cornerstone Investment Agreements
compared with other public Shareholders, other than a guaranteed allocation of the relevant
Offer Shares at the Offer Price.
As confirmed by each of the Cornerstone Investors, there are no side arrangements or
agreements between the Company, and the Cornerstone Investors, or any benefit, direct or
indirect, conferred on the Cornerstone Investors, by virtue of or in relation to the Listing other
than a guaranteed allocation of the relevant Offer Shares at the Offer Price, following the
principles as set out in Chapter 4.15 of the Guide for New Listing Applicants.
CORNERSTONE INVESTORS
– 413 –


--- page 424 ---
The Cornerstone Investors have agreed to pay for the relevant Offer Shares that they have
subscribed before dealings in the Company’s Shares commence on the Stock Exchange. There
will be no deferred settlement or delayed delivery of the Offer Shares to be subscribed by the
Cornerstone Investors.
To the best of the knowledge, information and belief of our Company, (i) the Cornerstone
Investors and their ultimate beneficial owners are independent of the Company, its connected
persons and their respective associates; (ii) none of the Cornerstone Investor is accustomed to
take and has not taken instructions from the Company, its subsidiaries, our Directors, chief
executive, Controlling Shareholders, substantial Shareholders, existing Shareholders or their
respective close associates in relation to the acquisition, disposal, voting or other disposition
of the Offer Shares; and (iii) none of the subscription of the Offer Shares by the Cornerstone
Investors is directly and indirectly financed by the Company, its subsidiaries, our Directors,
chief executive, Controlling Shareholders, substantial Shareholders, existing Shareholders or
their respective close associates.
To the best knowledge of the Company and the Overall Coordinators, and based on the
indicative interest of investment of the Cornerstone Investors and/or their close associates as
of the date of this prospectus, certain Cornerstone Investors and/or their close associates may
participate in the International Offering as placees and subscribe for further Offer Shares in the
Global Offering. The Company will seek the Stock Exchange’s consent and/or waiver to allow
the Cornerstone Investors and/or their close associates to participate in the International
Offering as placees pursuant to Chapter 4.15 of the Guide for New Listing Applicants. Whether
such Cornerstone Investors and/or their close associates will place orders in the International
Offering are uncertain and will be subject to the final investment decisions of such investors
and the terms and conditions of the Global Offering.
To the best knowledge of our Company, each of the Cornerstone Investor is independent
from each other and makes independent investment decisions, and their subscription under the
Cornerstone Investment Agreements would be financed by their own internal resources or the
assets managed for the investors (in the case of cornerstone investors which are funds or
investment managers) and they have sufficient funds to settle their respective investment under
the Cornerstone Placing. Each of the Cornerstone Investor has confirmed that all necessary
approvals have been obtained with respect to the Cornerstone Placing, and that no specific
approval from any stock exchange (if relevant) or its shareholders is required for the relevant
cornerstone investment.
The total number of Offer Shares to be subscribed for by the Cornerstone Investors under
the Cornerstone Placing may be affected by reallocation of the Offer Shares between the
International Offering and the Hong Kong Public Offering in the event of over-subscription
under the Hong Kong Public Offering, as described in the paragraphs headed “Structure of the
Global Offering — The Hong Kong Public Offering — Reallocation” in this prospectus. The
number of Offer Shares to be acquired by each Cornerstone Investor may be deducted on a pro
rata basis in accordance with the terms of the Cornerstone Investment Agreements to satisfy the
CORNERSTONE INVESTORS
– 414 –


--- page 425 ---
public demands under the Hong Kong Public Offering, after taking into account the
requirements under Appendix F1 to the Listing Rules as well as the discretion of the Sole
Representative (for itself and on behalf of the International Underwriters) to exercise the
Over-allotment Option.
Details of the actual number of Offer Shares to be allocated to the Cornerstone Investors
will be disclosed in the allotment results announcement of our Company to be published on or
around Friday, November 21, 2025.
The table below sets forth the details of the Cornerstone Placing:
Cornerstone Investors
Total
Investment
Amount (1)
Number of
Offer Shares
to be
subscribed (2)
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is fully exercised
Approximate
%o ft h e
Offer Shares
Approximate
% of our total
issued share
capital
immediately
upon
completion of
the Global
Offering
Approximate
% of the
Offer Shares
Approximate
% of our total
issued share
capital
immediately
upon
completion of
the Global
Offering
(in millions)
Based on the Offer Price of HK$10.18 (the low-end of the indicative Offer Price range)
HHLRA (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$75.0 57,277,000 11.46% 2.86% 9.96% 2.76%
China Hongqiao Group
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30.0 22,910,500 4.58% 1.15% 3.98% 1.10%
Taikang Life /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30.0 22,910,500 4.58% 1.15% 3.98% 1.10%
Glencore AG /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30.0 22,910,500 4.58% 1.15% 3.98% 1.10%
Mercuria Holdings
(Singapore) Pte. Ltd. /H1118 US$30.0 22,910,500 4.58% 1.15% 3.98% 1.10%
HK Greenwoods /H1118/H1118/H1118/H1118/H1118/H1118US$8.8 6,697,500 1.34% 0.33% 1.16% 0.32%
Greenwoods OTC Swaps US$6.2 4,757,500 0.95% 0.24% 0.83% 0.23%
Turquoise Hime /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$15.0 11,455,000 2.29% 0.57% 1.99% 0.55%
Investcorp /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$15.0 11,455,000 2.29% 0.57% 1.99% 0.55%
CPIC IMHK /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,636,500 1.53% 0.38% 1.33% 0.37%
GF Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,636,500 1.53% 0.38% 1.33% 0.37%
Fullgoal HK and Fullgoal
Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,636,500 1.53% 0.38% 1.33% 0.37%
Millennium ICSA /H1118/H1118/H1118/H1118/H1118US$10.0 7,636,500 1.53% 0.38% 1.33% 0.37%
Jane Street /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,636,500 1.53% 0.38% 1.33% 0.37%
Polymer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,636,500 1.53% 0.38% 1.33% 0.37%
Pointer Investment /H1118/H1118/H1118/H1118US$10.0 7,636,500 1.53% 0.38% 1.33% 0.37%
Brilliant Partners Fund
LP and China Core
Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,636,500 1.53% 0.38% 1.33% 0.37%
Cephei Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$6.0 4,582,000 0.92% 0.23% 0.80% 0.22%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$326.0 248,958,000 49.79% 12.45% 43.30% 12.00%
CORNERSTONE INVESTORS
– 415 –


--- page 426 ---
Cornerstone Investors
Total
Investment
Amount (1)
Number of
Offer Shares
to be
subscribed (2)
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is fully exercised
Approximate
%o ft h e
Offer Shares
Approximate
% of our total
issued share
capital
immediately
upon
completion of
the Global
Offering
Approximate
% of the
Offer Shares
Approximate
% of our total
issued share
capital
immediately
upon
completion of
the Global
Offering
(in millions)
Based on the Offer Price of HK$10.58 (the mid-point of the indicative Offer Price range)
HHLRA (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$85.0 62,460,000 12.49% 3.12% 10.86% 3.01%
China Hongqiao Group
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30.0 22,044,500 4.41% 1.10% 3.83% 1.06%
Taikang Life /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30.0 22,044,500 4.41% 1.10% 3.83% 1.06%
Glencore AG /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30.0 22,044,500 4.41% 1.10% 3.83% 1.06%
Mercuria Holdings
(Singapore) Pte. Ltd. /H1118 US$30.0 22,044,500 4.41% 1.10% 3.83% 1.06%
HK Greenwoods /H1118/H1118/H1118/H1118/H1118/H1118US$8.8 6,444,000 1.29% 0.32% 1.12% 0.31%
Greenwoods OTC Swaps US$6.2 4,577,500 0.92% 0.23% 0.80% 0.22%
Turquoise Hime /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$15.0 11,022,000 2.20% 0.55% 1.92% 0.53%
Investcorp /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$15.0 11,022,000 2.20% 0.55% 1.92% 0.53%
CPIC IMHK /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,348,000 1.47% 0.37% 1.28% 0.35%
GF Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,348,000 1.47% 0.37% 1.28% 0.35%
Fullgoal HK and Fullgoal
Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,348,000 1.47% 0.37% 1.28% 0.35%
Millennium ICSA /H1118/H1118/H1118/H1118/H1118US$10.0 7,348,000 1.47% 0.37% 1.28% 0.35%
Jane Street /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,348,000 1.47% 0.37% 1.28% 0.35%
Polymer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,348,000 1.47% 0.37% 1.28% 0.35%
Pointer Investment /H1118/H1118/H1118/H1118US$10.0 7,348,000 1.47% 0.37% 1.28% 0.35%
Brilliant Partners Fund
LP and China Core
Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,348,000 1.47% 0.37% 1.28% 0.35%
Cephei Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$6.0 4,408,500 0.88% 0.22% 0.77% 0.21%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$336.0 246,896,000 49.38% 12.34% 42.94% 11.90%
CORNERSTONE INVESTORS
– 416 –


--- page 427 ---
Cornerstone Investors
Total
Investment
Amount (1)
Number of
Offer Shares
to be
subscribed (2)
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is fully exercised
Approximate
%o ft h e
Offer Shares
Approximate
% of our total
issued share
capital
immediately
upon
completion of
the Global
Offering
Approximate
% of the
Offer Shares
Approximate
% of our total
issued share
capital
immediately
upon
completion of
the Global
Offering
(in millions)
Based on the Offer Price of HK$10.99 (the high-end of the indicative Offer Price range)
HHLRA /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$100.0 70,741,000 14.15% 3.54% 12.30% 3.41%
China Hongqiao Group
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30.0 21,222,000 4.24% 1.06% 3.69% 1.02%
Taikang Life /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30.0 21,222,000 4.24% 1.06% 3.69% 1.02%
Glencore AG /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30.0 21,222,000 4.24% 1.06% 3.69% 1.02%
Mercuria Holdings
(Singapore) Pte. Ltd. /H1118 US$30.0 21,222,000 4.24% 1.06% 3.69% 1.02%
HK Greenwoods /H1118/H1118/H1118/H1118/H1118/H1118US$8.8 6,204,000 1.24% 0.31% 1.08% 0.30%
Greenwoods OTC Swaps US$6.2 4,407,000 0.88% 0.22% 0.77% 0.21%
Turquoise Hime /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$15.0 10,611,000 2.12% 0.53% 1.85% 0.51%
Investcorp /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$15.0 10,611,000 2.12% 0.53% 1.85% 0.51%
CPIC IMHK /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,074,000 1.41% 0.35% 1.23% 0.34%
GF Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,074,000 1.41% 0.35% 1.23% 0.34%
Fullgoal HK and Fullgoal
Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,074,000 1.41% 0.35% 1.23% 0.34%
Millennium ICSA /H1118/H1118/H1118/H1118/H1118US$10.0 7,074,000 1.41% 0.35% 1.23% 0.34%
Jane Street /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,074,000 1.41% 0.35% 1.23% 0.34%
Polymer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,074,000 1.41% 0.35% 1.23% 0.34%
Pointer Investment /H1118/H1118/H1118/H1118US$10.0 7,074,000 1.41% 0.35% 1.23% 0.34%
Brilliant Partners Fund
LP and China Core
Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10.0 7,074,000 1.41% 0.35% 1.23% 0.34%
Cephei Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$6.0 4,244,000 0.85% 0.21% 0.74% 0.20%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$351.0 248,298,000 49.66% 12.41% 43.18% 11.97%
Notes:
(1) Exclusive of brokerage, SFC transaction levy, AFRC transaction levy and the Stock Exchange trading fee.
(2) Subject to rounding down to the nearest whole board lot of 500 Shares. Calculated based on the exchange rate
set out in the section headed “Information about this Prospectus and the Global Offering — Exchange Rate
Conversion.”
CORNERSTONE INVESTORS
– 417 –


--- page 428 ---
(3) HHLRA has agreed in its Cornerstone Investment Agreement that the Overall Coordinators and the Company
can reduce the allocation of the number of Offer Shares to HHLRA in their sole and absolute discretion to
ensure that no more than 50% of the total number of the Shares initially offered in the Global Offering are
allocated to all Cornerstone Investors participating in the Global Offering. The Company may adjust the
allocation of the number of Offer Shares to HHLRA where necessary based on the final Offer Price and will
disclose the number of the Offer Shares finally allocated to HHLRA in the allotment results announcement of
the Company to be published on or around Friday, November 21, 2025.
THE CORNERSTONE INVESTORS
The information about our Cornerstone Investors set forth below has been provided by
our Cornerstone Investors in connection with the Cornerstone Placing.
HHLRA
HHLR Advisors, Ltd. (“ HHLRA ”), part of the Hillhouse Group, is an exempted company
incorporated in the Cayman Islands that acts as the investment manager of investment funds
(collectively the “ HHLRA Funds ”), which are limited partnerships formed under the laws of
the Cayman Islands. There is no individual limited partner investor who holds an economic
interest of 30% or more in the HHLRA Funds.
HHLRA collaborates with industry-defining enterprises, aiming to establish alignment
with sustainable, forward-thinking companies across industrial, consumer, healthcare and
business services sectors. HHLRA manages capital for global institutions, including non-profit
foundations, endowments, and pensions. HHLRA is entering the cornerstone investment
agreement with the Company in its capacity as an investment manager and on behalf of the
HHLRA Funds.
China Hongqiao Group Limited
China Hongqiao Group Limited is a company incorporated in the Cayman Islands with
limited liability and listed on the Main Board of the Stock Exchange (Stock Code: 1378.HK).
It is primarily engaged in the manufacturing and sales of aluminum products.
Taikang Life
Taikang Life Insurance Co., Ltd (“ Taikang Life ”), a company incorporated in China, is
a wholly owned subsidiary of Taikang Insurance Group Inc. There is no shareholder holding
30% or more in Taikang Insurance Group Inc. Taikang Life provides a full range of personal
security and investment and wealth management products and services for individuals and
families. The products on offer correspond to the different requirements of customers in terms
of market segments such as the children and teenagers, females and high-income population
groups. They also meet multidimensional demands regarding health care and accident cover,
pensions and wealth management, among others. Taikang Insurance Group Inc. is an insurance
and financial service conglomerate focused on insurance, asset management and health and
elderly care as main businesses. The Beijing-headquartered company consists of several
CORNERSTONE INVESTORS
– 418 –


--- page 429 ---
subsidiaries including Taikang Life, Taikang AMC, Taikang Pension, Taikang Healthcare,
Taikang Health, and TK.CN. Its product offering covers life insurance, internet-based financial
insurance, enterprise annuity, asset management, health and elderly care, health management
and commercial real estate, among others.
Glencore AG
Glencore International AG (“ Glencore AG ”) is a wholly-owned subsidiary of Glencore
plc. Glencore plc is listed on the London Stock Exchange (Stock code: GLEN), with a
secondary listing on the Johannesburg Stock Exchange (Stock code: GLN) and is one of the
world’s largest global diversified natural resource companies and a major producer and
marketer of more than 60 commodities. Through a network of assets, customers and suppliers
that spans the globe, Glencore plc produce, process, recycle, source, market and distribute
commodities that meet current energy needs.
Mercuria Holdings (Singapore) Pte. Ltd.
Mercuria Holdings (Singapore) Pte. Ltd. is a wholly-owned subsidiary of Mercuria
Energy Group, one of the world’s leading independent energy and commodity trading
companies. Headquartered in Geneva, the Mercuria Energy Group operates in over 50 countries
across five continents and is engaged in energy and commodity trading, renewable power
generation, metals and minerals trading, and infrastructure investment. The ultimate beneficial
owners of Mercuria Energy Group are Mr. Marco Dunand and Mr. Daniel Jaeggi.
Mercuria Holdings (Singapore) Pte. Ltd. serves as the Mercuria Energy Group’s Asia
platform, overseeing operations across the Asia-Pacific region and focusing on the
development of sustainable and integrated energy and resource solutions.
HK Greenwoods
Greenwoods Asset Management Hong Kong Limited (“ HK Greenwoods ”) is a private
fund management company incorporated in Hong Kong with limited liability. Established in
2005, HK Greenwoods is one of the largest and earliest China-focused asset managers mainly
specializing in investing into companies in the Greater China region. HK Greenwoods focuses
on fundamental research, value investments, and local due diligence. Investors of funds and
accounts managed by HK Greenwoods includes institutional investors and high-net-worth
individuals professional investors. Mr. Jiang Jinzhi is the Chairman, a major shareholder and
an ultimate beneficial owner of HK Greenwoods.
As confirmed by HK Greenwoods, the subscription of the Offer Shares as a cornerstone
investor will be made by HK Greenwoods in its capacity as the investment manager of Golden
China Master Fund and no single ultimate beneficial owner holds 30% or more interest in the
above fund. HK Greenwoods and Shanghai Greenwoods are affiliate of each other.
CORNERSTONE INVESTORS
– 419 –


--- page 430 ---
Shanghai Greenwoods and CICC Financial Trading Limited (in connection with
Greenwoods OTC Swaps)
CICC FT and China International Capital Corporation Limited will enter into a series of
cross border delta-one OTC swap transactions (collectively, the “ Greenwoods OTC Swaps ”)
with each other and the ultimate clients (the “ CICC FT Ultimate Clients (Greenwoods) ”),
pursuant to which CICC FT will hold the Offer Shares on a non-discretionary basis to hedge
the Greenwoods OTC Swaps while the economic risks and returns of the underlying Offer
Shares are passed to the CICC FT Ultimate Clients (Greenwoods), subject to customary fees
and commissions. The Greenwoods OTC Swaps will be fully funded by the CICC FT Ultimate
Clients (Greenwoods). During the terms of the Greenwoods OTC Swaps, all economic returns
of the Offer Shares subscribed by CICC FT will be passed to the CICC FT Ultimate Clients
(Greenwoods) and all economic loss shall be borne by the CICC FT Ultimate Clients
(Greenwoods) through the Greenwoods OTC Swaps, and CICC FT will not take part in any
economic return or bear any economic loss in relation to the Offer Shares. The Greenwoods
OTC Swaps are linked to the Offer Shares and the CICC FT Ultimate Clients (Greenwoods)
may, after expiration of the lock-up period beginning from the date of the cornerstone
agreement entered into between CICC FT and the Company and ending on the date which is
six months from the Listing Date, request to early terminate the Greenwoods OTC Swaps at
their own discretions, upon which CICC FT may dispose of the Offer Shares and settle the
Greenwoods OTC Swaps in cash in accordance with the terms and conditions of the
Greenwoods OTC Swaps. Despite that CICC FT will hold the legal title of the Offer Shares by
itself, it will not exercise the voting rights attaching to the relevant Offer Shares during the
terms of the Greenwoods OTC Swaps according to its internal policy. To the best of CICC FT’s
knowledge having made all reasonable inquiries, each of the CICC FT Ultimate Clients
(Greenwoods) is an independent third party of CICC FT, CICCHKS and the companies which
are members of the same group of CICCHKS, and no single ultimate beneficial owner holds
30% or more interests in each of the CICC FT Ultimate Clients (Greenwoods).
CICC FT is a wholly-owned subsidiary of China International Capital Corporation
Limited, of which its shares are listed on the Shanghai Stock Exchange (stock code: 601995)
and the Stock Exchange (stock code: 3908). CICC FT is a connected client (as defined under
Appendix F1 to the Listing Rules) of CICCHKS, holding securities on a non-discretionary
basis on behalf of independent third parties. The Company has applied to the Stock Exchange
for, and the Stock Exchange has granted, its consent under paragraph 5(1) of Appendix F1 to
the Listing Rules to permit us to allocate the Offer Shares to CICC FT. See “Waivers from
Strict Compliance with Listing Rules — Consent in Respect of the Proposed Subscription of
Shares by A Cornerstone Investor Who Is A Connected Client.”
The CICC FT Ultimate Clients (Greenwoods) are certain domestic private funds
(includingږ,ږandږmanaged
by Shanghai Greenwoods Asset Management Co., Ltd (ʮ̡)
(“Shanghai Greenwoods ”). Shanghai Greenwoods is a private fund management company
with the registration under AMAC. Shanghai Greenwoods is one of the largest and earliest PRC
domestic asset managers mainly specializing in investing into companies in the Greater China
CORNERSTONE INVESTORS
– 420 –


--- page 431 ---
region. Shanghai Greenwoods focuses on fundamental research, value investments, and local
due diligence. Investors of funds managed by Shanghai Greenwoods include institutional
investors and high-net-worth individuals professional investors. Mr. Jiang Jinzhi is the
Chairman, a major shareholder and an ultimate beneficial owner of Shanghai Greenwoods. No
other shareholder holds 30% or more interest in Shanghai Greenwoods. As confirmed by
Shanghai Greenwoods, the subscription of the Offer Shares as cornerstone investor will be
made by Shanghai Greenwoods in its capacity as the fund manager of domestic private funds
through TRS mechanism.
According to our PRC Legal Advisors, the aforementioned transaction structure does not
violate the PRC laws and regulations.
Turquoise Hime
TURQUOISE HIME, L.P . (“ Turquoise Hime ”) is a Cayman Islands Exempted Limited
Partnership registered as a private fund with the Cayman Islands Monetary Authority. No single
ultimate beneficial owner holds 30% or more interest in the Turquoise Hime.
Hime Investment Limited is a Cayman Islands exempted company and acts as general
partner of Turquoise Hime. Its ultimate beneficiary owner is ORIX Corporation (TYO:8591,
NYSE:IX).
ORIX Asia Asset Management Limited (“ OAAM ”), acts as the investment manager on a
discretionary basis of Turquoise Hime. OAAM is a key investment management platform for
ORIX Corporation in the Asia-Pacific Region.
ORIX Group (ORIX Corporation: TYO:8591, NYSE:IX) was established in 1964 and has
grown from its roots in leasing in Japan to become a global, diverse, and unique corporate
group. Today, it is active around the world in financing and investment, life insurance, banking,
asset management, real estate, concession, environment and energy, automobile-related
services, industrial/ICT equipment, ships and aircraft. Since expanding outside of Japan in
1971, ORIX Group has grown its business globally and now operates in around 30 countries
and regions across the world.
Investcorp
Founded in 1982, Investcorp is a global investment manager headquartered in the
Kingdom of Bahrain specializing in alternative investments across private equity, real assets,
private credit and liquid strategies. Investcorp manages $60 billion in assets (including assets
managed by third party managers) with 14 offices in the US, Europe, China, Saudi Arabia,
UAE, Japan, Singapore and India, employing approximately 500 people from 50 nationalities.
CORNERSTONE INVESTORS
– 421 –


--- page 432 ---
Investcorp V erdant Holdings Limited, an exempted company incorporated in the Cayman
Islands and indirectly controlled by the Investcorp Golden Horizon Cooperation Fund (the
“Golden Horizon Fund ”), is entering into the Cornerstone Investment Agreement with the
Company. The Golden Horizon Fund was established in collaboration with a number of
sovereign wealth funds and leading institutions and other investors from the Middle East and
China, including Investcorp, with the mandate to invest in high growth companies across Saudi
Arabia, the rest of the countries of the Gulf Cooperation Council and China. As of the Latest
Practicable Date, Investcorp (Abu Dhabi) Limited held 80% equity interest in Golden Horizon
Fund, and there is no party that owns 30% or more equity interests in Golden Horizon Fund.
CPIC IMHK
CPIC Investment Management (H.K.) Company Limited (“ CPIC IMHK ”) was
established in Hong Kong, and is principally engaged in asset management and provision of
investment advisory services, including the investment management of CPIC SV Equity
Opportunities Fund SP , a segregated portfolio (“ SP”) of a segregated portfolio company. CPIC
IMHK is a wholly-owned subsidiary of China Pacific Insurance (Group) Co., Ltd. ( ʕ਷˄̻
ᎈ(ණྠ)ʮ̡), a company listed on the Stock Exchange (stock code: 2601) and
the Shanghai Stock Exchange (stock code: 601601). The subscription of the Offer Shares as a
cornerstone investor will be made by CPIC IMHK in its capacity as the discretionary
investment manager for the SP , whose ultimate beneficial owners are the unitholders of the SP .
No single ultimate beneficial owner holds 30% or more interests in CPIC SV Equity
Opportunities Fund SP .
GF Fund
GF Management Co., Ltd. (ʮ̡)( “ GF Fund Management ”) and GF
International Investment Management Limited (ʮ̡)( “GF Fund HK ”,
together with GF Fund Management, “ GF Fund ”) have, respectively, entered into Cornerstone
Investment Agreement with our Company.
GF Fund Management was established on August 5, 2003. GF Fund Management and its
subsidiaries are licensed to conduct business as Qualified Investment Manager of Public Fund,
Entrusted Domestic Investment Manager of National Social Security Fund (NSSF), qualified
investment management institution of Basic Pension Insurance Funds, qualified fund
management company to provide asset management services for specific clients, Qualified
Domestic Institutional Investor (QDII), RMB Qualified Foreign Institutional Investor (RQFII),
Qualified Foreign Institutional Investors (QFII), Qualified Domestic Limited Partner (QDLP),
entrusted insurance Funds investment manager, entrusted investment manager of asset
management for Insurance Security Funds and fund investment advisor, making it a large Fund
management company with comprehensive asset management capabilities and experience. The
controlling shareholder of GF Fund Management is GF Securities Co., Ltd. (΅Ϟ
ʮ̡)( “GF Securities ”), a limited company listed on the Stock Exchange (stock code: 1776)
and Shenzhen Stock Exchange (stock code: 000776), which owns 54.53% shareholding in GF
Fund Management. Apart from GF Securities, no other shareholder has a 30% or more
shareholding in GF Fund Management.
CORNERSTONE INVESTORS
– 422 –


--- page 433 ---
GF Fund HK is a wholly-owned subsidiary of GF Fund Management. GF Fund HK
(central number in the Hong Kong Securities and Futures Commission license: AXL121) was
incorporated in Hong Kong in December 2010. GF Fund HK is licensed by SFC to carry on
Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management)
regulated activities in Hong Kong. GF Fund HK serves as the global investment and business
platform for its parent company, GF Fund Management. As GF Fund Management’s window
company overseas, GF Fund HK strategically connects China and the overseas market. GF
Fund HK capitalizes the investment and research capabilities of GF Management and its
competitive advantage in the overseas market to provide comprehensive quality service to its
clients.
The subscription of the Offer Shares as a cornerstone investor will be made by GF Fund
Management and GF Fund HK in their capacity as the discretionary investment manager of
GUANGFA GLOBAL SELECTIVE EQUITIES, GF GLOBAL ALLOCA TION ELITE NO.1,
GUANGFA QUANXIN ACCOUNT NO.1, GFI Global Select Equity Fund, GF LUMINOUS
Fund SP , and GF VENUS FUND SP . under their management. Based on the best knowledge of
GF Fund Management and GF Fund HK, each fund and/or account is an independent third
party, and no ultimate beneficial owner holds more than 30% interest in each of such funds
and/or account.
Fullgoal HK and Fullgoal Fund
Established in 2012 in Hong Kong, Fullgoal Asset Management (HK) Limited (“ Fullgoal
HK”) is a wholly owned subsidiary of Fullgoal Fund Management Co., Ltd. (“ Fullgoal
Fund ”). Fullgoal HK has Type 1 (Dealing in Securities), Type 4 (Advising on Securities) and
Type 9 (Asset Management) licenses issued by the SFC. The subscription of the Offer Shares
as a cornerstone investor will be made by Fullgoal HK in its capacity as the sole management
shareholder or investment manager of Fullgoal China Small-Mid Cap Growth Fund (Fullgoal
ږunder its management, being one open-ended publicly raised securities
investment fund. As confirmed by Fullgoal HK, no single ultimate beneficial owner holds 30%
or more interest in such funds, and, to the best knowledge of Fullgoal HK, each of such funds
is an Independent Third Party.
Fullgoal Fund is a fund management company established in China in April 1999, and is
one of the first ten fund management companies authorized by the CSRC and other regulatory
authorities to obtain full licenses to provide asset management services in the PRC. Fullgoal
Fund has a registered capital of RMB520 million and its main scope of business includes the
provision of traditional fund management services, fund raising, fund sale and asset
management solutions to both domestic and overseas clients. Fullgoal Fund is a QDII approved
by the relevant PRC authority and is also the first fund management company with foreign
equity participation among the first ten fund management companies in China. The relevant
funds proposed to subscribe for the Offer Shares under the management of Fullgoal Fund are
open-ended publicly raised securities investment funds registered with the CSRC. Each of such
funds has a wide spread of ultimate clients, none of whom holds more than 30% interest
therein, and to the best knowledge of Fullgoal Fund, each fund is an Independent Third Party.
The shareholders of Fullgoal Fund include (i) Guotai Haitong Securities Co., Ltd. ( ਷इऎஷ
ʮ̡) holding 27.775% in Fullgoal Fund; (ii) Shenwan Hongyuan Securities Co.,
Ltd. (ʮ̡) holding 27.775% in Fullgoal Fund; (iii) Bank of Montreal
CORNERSTONE INVESTORS
– 423 –


--- page 434 ---
holding 27.775% in Fullgoal Fund, and (iv) Shandong Financial Asset Management Co., Ltd.
(ʮ̡), holding 16.675% in Fullgoal Fund. The Offer Shares to
be allocated and issued to Fullgoal HK and Fullgoal Fund in their capacity as investment
managers acting as agents on behalf of certain clients, will be held on a discretionary basis for
and on behalf of clients who are Independent Third Parties to the best knowledge of Fullgoal
HK and Fullgoal Fund.
Millennium ICSA
Millennium Capital Management (Singapore) Pte. Ltd. (“ Millennium Capital ”) is the
principal investment manager of Integrated Core Strategies (Asia) Pte. Ltd. (“ Millennium
ICSA ”), the cornerstone investor. Millennium Capital is wholly owned by Millennium
International Management LP (incorporated in Delaware), whose general partner is Millennium
Group Management LLC (incorporated in Delaware). Millennium Capital is one of the
investment management entities in the Millennium Group (Millennium Capital, together with
its affiliated entities, are collectively referred to herein as “ Millennium ”). Millennium is a
global, diversified alternative investment management firm and seeks to pursue a diverse range
of investment strategies across industry sectors, asset classes and geographies. Millennium
ICSA is incorporated in Singapore and Millennium Capital is licensed by the Monetary
Authority of Singapore. No ultimate beneficial owner holds more than 30% interests in
Millennium ICSA.
Jane Street
Jane Street Asia Trading Limited (“ Jane Street ”) is a private company limited by shares
formed in Hong Kong and engages in securities investment and trading activities. Its ultimate
controlling shareholder is Jane Street Group, LLC which is a limited liability company
incorporated in Delaware. There is no individual holding an economic interest of 30% or more
in Jane Street.
Polymer
Polymer Capital Management (HK) Limited (“ Polymer ”) has entered into a cornerstone
investment agreement with our Company in its capacity as the investment manager for and on
behalf of Polymer Asia Fund LP (“ Polymer Asia Fund ”). Polymer Asia Fund is an investment
fund established as an exempted limited partnership under the laws of Cayman Islands.
Polymer Asia Fund, being the investor (as defined under the cornerstone investment
agreement), is managed by its investment manager, Polymer, which is a company incorporated
under the laws of Hong Kong with limited liability and is (i) licensed by the Securities and
Futures Commission to carry out Type 9 (asset management) regulated activities (as defined in
the SFO) (CE Number: BOO295), (ii) registered as a commodity pool operator under the
Commodity Futures Trading Commission of the United States and (iii) approved as a NFA
Member and SW AP Firm by the National Futures Association of the United States (“NFA”)
(NFA ID: 0545181) as of the Latest Practicable Date. As of the Latest Practicable Date, (i)
other than Polymer Asia (Cayman) Fund Ltd, there is no entity/individual who holds 30% or
more ultimate beneficial ownership interest in Polymer Asia Fund; (ii) there is no
entity/individual who holds 30% or more ultimate beneficial ownership interest in Polymer
Asia (Cayman) Fund Ltd.; and (iii) other than Wai Y uk Chi Angus and PAG, there is no entity
or individual who holds 30% or more ultimate beneficial ownership interest in Polymer Capital
Management (HK) Limited.
CORNERSTONE INVESTORS
– 424 –


--- page 435 ---
Pointer Investment
Pointer Investment (H.K.) Ltd. (“ Pointer Investment ”) is a limited company
incorporated in Hong Kong on October 30, 1984 and is primarily engaged in commodities
trading, investment, ship leasing and financial leasing. Pointer Investment is wholly-owned by
Xiamen ITG Group Corp., Ltd. (ʮ̡), a company whose shares are
listed on the Shanghai Stock Exchange (stock code: 600755.SH), primarily engaging in supply
chain management and health technology business, among others.
Brilliant Partners Fund LP and China Core Fund
Brilliant Partners Fund LP is a pooled investment fund with many external investors and
is in form of a limited partnership established in the Cayman Islands in 2013. The general
partner of Brilliant Partners Fund LP is owned as to 100% by Lin Shi who is an Independent
Third Party. None of the beneficial owners of Brilliant Partners Fund LP ultimately holds 30%
or more equity interest therein.
China Core Fund is a pooled investment fund with many external investors and is in form
of a limited company established in the Cayman Islands in 2017. The entire management shares
of China Core Fund are ultimately controlled by Lin Shi who is an Independent Third Party.
None of the beneficial owners of China Core Fund ultimately holds 30% or more equity interest
therein.
Brilliant Partners Fund LP and China Core Fund invest primarily in consumer, leisure and
services, advanced manufacturing, cyclicals and internet, and primarily in China A, Hong Kong
and US.
Cephei Capital
The subscription of the Offer Shares as the cornerstone investor will be made by Cephei
Capital Management (Hong Kong) Limited (“ Cephei Capital ”) in its capacity as the
discretionary investment manager of two cayman funds, namely Cephei QFII China Total
Return Fund Ltd (“ Cephei QFII China Total Return Fund ”) and Cephei China Equity
Relative Return Fund Ltd (“ Cephei Relative Return Fund ”).
Cephei Capital is a private company with limited liability incorporated under the laws of
Hong Kong and is licensed by the SFC to carry on type 9 (asset management) regulated
activity. Cephei Capital’s primary business is provision of discretionary investment
management services to pooled investment vehicles and separately managed accounts with
coverage of investments in the publicly traded securities of issuers that are significantly
connected to China. Mr. Li Gang indirectly holds approximately 39% equity interest in Cephei
Capital and is the ultimate beneficial owner of Cephei Capital. No other single ultimate
beneficial owner holds more than 30% equity interests in Cephei Capital.
CORNERSTONE INVESTORS
– 425 –


--- page 436 ---
Cephei QFII China Total Return Fund is a Cayman Islands exempted company with
limited liability incorporated in February 2013 to operate as a private investment fund. Cephei
QFII China Total Return Fund invests primarily in China related companies listed in the PRC,
Hong Kong and other overseas markets. No single ultimate beneficial owner holds 30% or
more interest in the Cephei QFII China Total Return Fund.
Cephei Relative Return Fund is a Cayman Islands exempted company with limited
liability incorporated in January 2019 as a private investment fund. Cephei Relative Return
Fund invests primarily in China related companies listed in the PRC, Hong Kong and other
overseas markets. Mr. Li Gang indirectly holds approximately 35.7% equity interest in Cephei
Relative Return Fund. No other single ultimate beneficial owner holds more than 30% equity
interests in Cephei Relative Return Fund.
CLOSING CONDITIONS
The obligation of each Cornerstone Investor to subscribe for the Offer Shares under the
respective Cornerstone Investment Agreement is subject to, among other things, the following
closing conditions:
(i) the Hong Kong Underwriting Agreement and the International Underwriting
Agreement being entered into and having become effective and unconditional (in
accordance with their respective original terms or as subsequently waived or varied
by agreement of the parties thereto) by no later than the time and date as specified
in the Hong Kong Underwriting Agreement and the International Underwriting
Agreement, and neither the Hong Kong Underwriting Agreement nor the
International Underwriting Agreement having been terminated;
(ii) the Offer Price having been agreed upon between the Company and the Overall
Coordinators (for themselves and on behalf of the underwriters of the Global
Offering);
(iii) the Listing Committee and Stock Exchange having granted the approval for the
listing of, and permission to deal in, the Shares (including the Shares under the
Cornerstone Placing) as well as other applicable waivers and approvals and such
approval, permission or waiver having not been revoked prior to the commencement
of dealings in the Shares on the Stock Exchange;
(iv) no laws shall have been enacted or promulgated which prohibits the consummation
of the transactions contemplated in the Global Offering or the respective
Cornerstone Investment Agreement, and there being no orders or injunctions from
a court of competent jurisdiction in effect precluding or prohibiting consummation
of such transactions; and
CORNERSTONE INVESTORS
– 426 –


--- page 437 ---
(v) the respective agreements, representations, warranties, undertakings, confirmations
and acknowledgements of the Cornerstone Investors under the respective
Cornerstone Investment Agreement are (as of the date of the Cornerstone Investment
Agreement) and will be (as of the Closing (as defined in the Cornerstone Investment
Agreement)) accurate, true and complete in all respects and not misleading and that
there is no breach of the respective Cornerstone Investment Agreement on the part
of the relevant Cornerstone Investor.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each Cornerstone Investor has agreed that without the prior written consent of our
Company, the Joint Sponsors and the Overall Coordinators, it will not, whether directly or
indirectly, at any time during the period of six months following the Listing Date (the
“Lock-up Period ”), dispose of, in any way, any of the Offer Shares it has purchased, pursuant
to the respective Cornerstone Investment Agreement, save for certain limited circumstances,
such as transfers to any of its wholly-owned subsidiaries who will be bound by the same
obligations of the Cornerstone Investor, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
– 427 –


--- page 438 ---
FUTURE PLANS
See “Business — Our Strategies” for a detailed description of our future plans.
USE OF PROCEEDS
Assuming that the Over-allotment Option is not exercised, after deducting the
underwriting commissions and other estimated offering expenses payable by us in connection
with the Global Offering, and assuming an Offer Price of HK$10.58 per Share (being the
mid-point of the indicative Offer Price range of HK$10.18 and HK$10.99 per Share), we
estimate that we will receive net proceeds of approximately HK$5,113.2 million from the
Global Offering after deducting the underwriting commissions and other estimated offering
expenses payable by us in connection with the Global Offering. In line with our strategies, we
intend to use our proceeds from the Global Offering for the purposes and in the amounts set
forth below:
 approximately 50.0% of the net proceeds, or HK$2,556.6 million, is expected to be
used for expanding overseas production capacity, including the construction of a
aluminum smelter and the purchase and installation of production equipment. We
invested in a joint venture which will operate an integrated electrolytic aluminum
industry chain project with annual production capacity of 500.0 kt of electrolytic
aluminum in Saudi Arabia. As of the Latest Practicable Date, we have not yet
invested in the construction of the Saudi Project. See “History, Reorganization and
Corporate Structure — Major Acquisitions, Disposals and Mergers — Investment
during Track Record Period.” The joint venture involves investment partners who
are independent third party, including investment holding companies and investment
funds. We have investment partners with relevant experience and expertise in the
electrolytic aluminum industry. For example, one of our investment partners is an
investment holding company, focusing on the investment in the energy industry,
high-tech industry as well as metals and mining industry in the Middle East, Africa
and Southeast Asia. Our total estimated capital investment of the Saudi Project is
approximately USD277.45 million (equivalent to HK$2,157.0 million). The
following table sets forth the breakdown of our proceeds to be allocated to the Saudi
Project.
Implementation targets
Estimated investments from
net proceeds after Global Offering
(i) Electrolytic aluminum smelter /H1118/H1118/H1118Approximately USD160.11 million
(equivalent to HK$1,244.7 million)
(ii) Aluminum billets production
plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Approximately USD36.18 million
(equivalent to HK$281.2 million)
(iii) Aluminum foils and flat roll
production plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Approximately USD53.37 million
(equivalent to HK$414.9 million)
(iv) Grid connection /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Approximately USD35.82 million
(equivalent to HK$278.5 million)
FUTURE PLANS AND USE OF PROCEEDS
– 428 –


--- page 439 ---
Implementation targets
Estimated investments from
net proceeds after Global Offering
(v) Slag treatment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Approximately USD5.37 million
(equivalent to HK$41.8 million)
(vi) Other costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Approximately USD38.00 million
(equivalent to HK$295.4 million)
We plan to commence the construction before the end of 2026, with an estimated
construction period of 24 months. As of the Latest Practicable Date, the integrated
electrolytic aluminum industry chain project to be invested in Saudi Arabia had
obtained the relevant land use right and permits. The Overseas Direct Investment
related approval from the National Development and Reform Commission has been
obtained. As we plan to invest in the Saudi Project through joint venture, we
anticipate an increase in our share of results of joint ventures and investment in joint
ventures, affecting our net profit and cash flow, respectively, upon the
commencement of operations of our Saudi Project. We plan to sell the products
produced in Saudi Arabia in the global market, where the specific regions will be
subject to the market conditions.
To achieve our production expansion plan, we will establish a production base
overseen by our professional team with extensive experience in the aluminum
industry in Saudi Arabia. Our Saudi Project focuses on the production of aluminum
sheets and rods, meeting the growing market demand for aluminum in Middle East’s
downstream construction and transportation industries. According to CRU, the
demand for aluminum products in the Middle East from 2020 to 2025 is expected to
grow with a CAGR of 7.3% in the construction industry and a CAGR of 7.0% in the
transportation industry. In addition, leveraging the geographical advantage of Saudi
Arabia, we expect to expand our customer base to Europe, North Africa and the
Middle East. As of the Latest Practicable Date, we have already obtained local
construction permits and essential licenses required for our project construction and
development. We plan to construct the Saudi Project in Y anbu near the Red Sea,
where the largest industrial port in Saudi Arabia is located, facilitating the import
and export of raw materials and products. Furthermore, the well-developed
infrastructure and favorable policies in the area enhance the feasibility of the Saudi
Project. During the construction, the Saudi Project plans to hire approximately 50
local personnel responsible for project development, management, finance,
administration and legal matters. The expected annual salary of our local personnel
will be competitive, determined with reference to the local salary level.
The global electrolytic aluminum production capacity has been decelerating due to
the global trend in decarbonization and environmental protection, according to
CRU. For example, the production capacity of aluminum smelters in Europe and the
U.S. have reflected a reduction trend in recent years. At the same time, the global
demand for electrolytic aluminum continues to rise, according to CRU. From 2025
FUTURE PLANS AND USE OF PROCEEDS
– 429 –


--- page 440 ---
to 2028, the global demand for electrolytic aluminum is expected to grow at a CAGR
of 1.6%, including a CAGR of 4.7% for Africa, 3.8% for regions in the Asia
excluding China and the Middle East, 5.5% for North America, 4.6% for the Middle
East (5.9% for Saudi Arabia) and 1.8% for Europe. Moreover, the low electricity
prices in Saudi Arabia represent a significant advantage for the development of the
electrolytic aluminum industry there. Overall, we believe that the expansion of our
electrolytic aluminum production capacity in Saudi Arabia could help us seize the
business opportunities and meet the increasing market demand globally.
 approximately 40.0% of the net proceeds, or HK$2,045.3 million, is expected to be
used for our green energy projects, including the construction of green power plants,
specifically, Phase II of the construction of our wind power plants and solar power
plants, and the purchase and installation of equipment used therein. The total
estimated cost of the green energy projects is approximately RMB2,699.4 million
(equivalent to HK$2,460.5 million). The following table sets forth the breakdown of
our proceeds to be allocated to the green energy projects.
Implementation targets
Estimated investments from
net proceeds after Global Offering
(i) Wind power plants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Approximately RMB1,552.61 million
(equivalent to HK$1,703.4 million)
(ii) Solar power plants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Approximately RMB200.00 million
(equivalent to HK$219.4 million)
(iii) Power transmission and
transformation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Approximately RMB111.64 million
(equivalent to HK$122.5 million)
We are constructing wind power plants and solar power plants with a totaling
projected installed capacity of 1,750.0 MW. Phase I comprises (i) a wind power
plant with an installed capacity of 540.0 MW, which had been operational and
connected to the grid as of the Latest Practicable Date; and (ii) a solar power plant
with an installed capacity of 110.0 MW, 60.0 MW of which had been installed and
some had been operational and connected to the grid as of the Latest Practicable
Date. We expect the remaining capacity to be fully operational and connected to the
grid by the end of 2026. As of the date of this prospectus, construction of the
majority of the above (i) and (ii) under Phase I, with a total installed capacity of
457.0 MW, had been completed, and the corresponding electricity generators were
operational and connected to the grid. Phase II comprises a wind power plant with
an installed capacity of 1,000.0 MW, 500.0 MW of which had been under
construction since March, 2025 and is expected to be fully operational and
connected to the grid by March 2026, and the other 500.0 MW had been under site
preparation for the construction as of the Latest Practicable Date and is expected to
be fully operational and connected to the grid by October 2026. To further our
commitment to green power supply, we also plan to construct a 100.0 MW
distributed solar power plant on-site, for which we had been designing the
construction project as of the Latest Practicable Date. It is expected to commence its
initial operation by the end of 2026.
FUTURE PLANS AND USE OF PROCEEDS
– 430 –


--- page 441 ---
As the majority of the projected installed capacity of the Phase I wind power plants
and solar power plants were operational as of the date of this prospectus and the
remaining capacity is anticipated to be fully operational by the end of 2026, and as
we continue to procure green electricity from the grid, our proportion of green
energy utilized will continue to increase towards the end of 2025. By the end of 2026
when both the above Phase I and Phase II wind power plants and solar power plants
become fully operational, and with procurement of green electricity from the grid,
we expect to achieve over 50% proportion of green energy utilized. Upon the full
operation of our green power plants, we anticipate a decrease in costs and an
increase in gross profit and gross profit margin.
Driven by the national goals of reaching peak carbon emissions by 2030 and
achieving carbon neutrality by 2060, the demand for green power aluminum
continues to grow. The abundant wind and solar power resources available at low
costs in Huolinguole, Inner Mongolia, where our green energy projects are located,
allow us to increase the utilization of green power in aluminum smelting. As of the
Latest Practicable Date, we had commenced using green energy generators. By the
end of 2026, we expect to achieve over 50% proportion of green energy utilized,
significantly exceeding the 25.0% target requirement imposed by industrial policies
in China. We believe that our green energy projects can capture the growing demand
for green power aluminum in domestic and overseas markets, enhance
environmental protection and reduce our production cost.
 approximately 10.0% of the net proceeds, or HK$511.3 million, is expected to be
used for working capital and general corporate uses.
However, unforeseen factors could hinder us to execute our business plans and
strategies, including unpredictable market developments, increased competition, changes in
macroeconomy and supply chain disruptions. See “Risk Factors — We may not be successful
in executing our business plans and strategies effectively, and our business, financial condition
and results of operations may be materially and adversely affected.”
If the Offer Price is set at the high-end of the indicative Offer Price range or the low-end
of the indicative Offer Price range, the net proceeds of the Global Offering will increase or
decrease to approximately HK$5,312.8 million and HK$4,918.4 million, respectively. If the
Offer Price is higher or lower than the mid-point of the indicative Offer Price Range, we will
adjust our allocation of the net proceeds for the above purposes on a pro rata basis.
The additional net proceeds that we would receive if the Over-allotment Option were
exercised in full would be: (i) HK$802.7 million (assuming an Offer Price of HK$10.99 per
Share, being the maximum Offer Price of the indicative Offer Price range); (ii) HK$772.8
million (assuming an Offer Price of HK$10.58 per Share, being the mid-point of the indicative
Offer Price range); and (iii) HK$743.6 million (assuming an Offer Price of HK$10.18 per
Share, being the minimum Offer Price of the indicative Offer Price range).
FUTURE PLANS AND USE OF PROCEEDS
– 431 –


--- page 442 ---
To the extent that the net proceeds from the Global Offering are either more or less than
expected, we will adjust our allocation of the net proceeds for the above purposes on a pro rata
basis.
To the extent that the net proceeds from the Global Offering are not immediately used for
the above purposes, we will only deposit such 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). In such event, we will comply with the appropriate disclosure requirements
under the Listing Rules.
FUTURE PLANS AND USE OF PROCEEDS
– 432 –


--- page 443 ---
HONG KONG UNDERWRITERS
China International Capital Corporation Hong Kong Securities Limited
Huatai Financial Holdings (Hong Kong) Limited
UOB Kay Hian (Hong Kong) Limited
CMB International Capital Limited
BOCI Asia Limited
A VICT Global Asset Management Limited
South China Securities Limited
Futu Securities International (Hong Kong) Limited
Tiger Brokers (HK) Global Limited
Livermore Holdings 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 Company expects the International Offering to be fully underwritten by
the International Underwriters. If, for any reason, the Offer Price is not agreed between the
Overall Coordinators (for themselves and on behalf of the Underwriters) and the Company, the
Global Offering will not proceed and will lapse.
The Global Offering comprises the Hong Kong Public Offering of initially 50,000,000
Hong Kong Offer Shares and the International Offering of initially 450,000,000 International
Offer Shares, subject, in each case, to reallocation on the basis as described in “Structure of
the Global Offering” in this prospectus as well as to the Over-allotment Option (in the case of
the International Offering).
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
The Hong Kong Underwriting Agreement was entered into on November 13, 2025.
Pursuant to the Hong Kong Underwriting Agreement, the 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 Shares in issue and to be issued pursuant to the Global Offering (including the
Shares which may be issued pursuant to the exercise of the Over-allotment Option) on the Main
Board of the Stock Exchange and such approval not having been withdrawn 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
UNDERWRITING
– 433 –


--- page 444 ---
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.
Grounds for Termination
If any of the events set out below occur at any time prior to 8:00 a.m. on the Listing Date,
the Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters), in their sole and absolute discretion, shall have the right by giving a
notice to the Company to terminate the Hong Kong Underwriting Agreement with immediate
effect:
(a) there shall develop, occur, exist or come into effect:
(i) any event, or series of events, in the nature of force majeure (including,
without limitation, any acts of government, declaration of a local, national,
regional or international emergency or war, calamity, crisis, epidemic,
pandemic, outbreaks, escalation, adverse mutation or aggravation of diseases
(including, without limitation, COVID-19, Severe Acute Respiratory
Syndrome (SARS), swine or avian flu, H5N1, H1N1, H7N9, Ebola virus,
Middle East respiratory syndrome and such related/mutated forms),
comprehensive sanctions, economic sanctions, strikes, labour disputes, lock-
outs, other industrial actions, fire, explosion, flooding, earthquake, tsunami,
volcanic eruption, civil commotion, rebellion, riots, public disorder, acts of
war, outbreak or escalation of hostilities (whether or not war is declared), acts
of God, acts of terrorism (whether or not responsibility has been claimed),
paralysis in government operations, interruptions or delay in transportation) in
or affecting Hong Kong, the PRC, the United States, the Cayman Islands, BVI,
the United Kingdom, the European Union (or any member thereof), Singapore,
Japan, or any other jurisdiction relevant to the Group (each a “ Relevant
Jurisdiction ” and collectively, the “ Relevant Jurisdictions ”);
(ii) any change or development involving a prospective change, or any event or
circumstances or series of events likely to result in any change or development
involving a prospective change, in any local, national, regional or international
financial, economic, political, military, industrial, legal, fiscal, regulatory,
currency, credit or market matters or conditions, equity securities or exchange
control or any monetary or trading settlement system or other financial markets
(including conditions in the stock and bond markets, money and foreign
exchange markets, interbank markets and credit markets), in or affecting any
of the Relevant Jurisdictions;
UNDERWRITING
– 434 –


--- page 445 ---
(iii) the imposition or declaration of any moratorium, suspension or restriction
(including, without limitation, any imposition of or requirement for any
minimum or maximum price limit or price range) in or on (i) trading in
securities generally on the Stock Exchange, the New Y ork Stock Exchange, the
NASDAQ Global Market, the London Stock Exchange, the Shanghai Stock
Exchange, the Shenzhen Stock Exchange, the Tokyo Stock Exchange or the
Singapore 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;
(iv) any general moratorium on commercial banking activities in the PRC (imposed
by the People’s Bank of China), Hong Kong (imposed by the Financial
Secretary or the Hong Kong Monetary Authority or other competent authority),
New Y ork (imposed at the U.S. Federal or New Y ork State level or by any other
competent authority), London, the European Union (or any member thereof) or
any of the other Relevant Jurisdictions (declared by any relevant competent
authority) or any disruption in commercial banking or foreign exchange
trading or securities settlement or clearance services, procedures or matters in
or affecting any of the Relevant Jurisdictions;
(v) any new law or regulation or any change or development involving a
prospective change in existing laws or regulations or any change or
development involving a prospective change in the interpretation or
application thereof by any court or any other competent governmental
authority in or affecting any of the Relevant Jurisdictions;
(vi) the imposition of comprehensive sanctions or export controls under any
sanctions laws or regulations, or the withdrawal of trading privileges which
existed on the date of the Hong Kong Underwriting Agreement, in whatever
form, directly or indirectly, by or for any of the Relevant Jurisdictions or
relevant to the Company or any member of the Group;
(vii) any change or development involving a prospective change or amendment in
or affecting taxation or foreign exchange control, currency exchange rates or
foreign investment regulations (including, without limitation, a devaluation of
the United States dollar, the Hong Kong dollar or RMB against any foreign
currencies or a change in the system under which the value of the Hong Kong
dollar is linked to that of the United States dollar or RMB is linked to any
foreign currency or currencies), or the implementation of any exchange
control, in any of the Relevant Jurisdictions or affecting an investment in the
Offer Shares;
(viii) other than with the prior written consent of the Joint Sponsors and the Overall
Coordinators, the issue or requirement to issue by the Company of a
supplement or an amendment to this prospectus, the offering circular, the
CSRC filing or other documents in connection with the offer and sale of the
UNDERWRITING
– 435 –


--- page 446 ---
Offer Shares pursuant to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance or the Listing Rules or upon any requirement or request
of the Stock Exchange, the CSRC and/or the SFC;
(ix) any demand by any creditors for payment or repayment or payment of any of
the indebtedness of any member of the Group or an order or petition for the
winding up or liquidation of any member of the Group or any composition or
arrangement made by any member of the Group with its creditors or a scheme
of arrangement entered into by any member of the Group or any resolution for
the winding-up of any member of the Group or the appointment of a
provisional liquidator, receiver or manager over all or part of the assets or
undertaking of any member of the Group or anything analogous thereto
occurring in respect of any member of the Group;
(x) any litigation, dispute, proceeding, legal action or claim or regulatory or
administrative investigation or action being threatened, instigated or
announced against any member of the Group or any Director or any member
of the senior management of the Company as named in this prospectus or the
Controlling Shareholders, or announcing an intention to take any such action;
(xi) any contravention by any member of the Group or any Director or any member
of the senior management of the Company as named in this prospectus of any
applicable laws and regulations, including the Listing Rules, the Companies
Ordinance, the Companies (Winding Up and Miscellaneous Provisions)
Ordinance and the Company Law of the PRC;
(xii) the chief executive officer, the chief financial officer, any Director or any
member of the senior management of the Company as named in this prospectus
seeks to retire, or is removed from office or is vacating his or her office;
(xiii) any non-compliance of this prospectus, the formal notice or the CSRC filing
(or any other documents used in connection with the contemplated subscription
and sale of the Offer Shares or any aspect of the Global Offering) with the
Listing Rules or any other applicable laws and regulations (including, without
limitation, the Listing Rules, the Companies Ordinance, the Companies
(Winding Up and Miscellaneous Provisions) Ordinance and the relevant rules
of the CSRC); or
(xiv) any change or development or any event involving a prospective change or
development, or a materialisation of, any of the risks set out in the section
headed “Risk Factors” in this prospectus,
which, individually or in the aggregate, in the sole and absolute opinion of the Joint
Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters):
UNDERWRITING
– 436 –


--- page 447 ---
(1) has or will have or is likely to have a material adverse effect;
(2) has or will have or is likely to have a material adverse effect on the success or
marketability of the Global Offering or the level of applications for or the
distribution of the Offer Shares under the Hong Kong Public Offering or the
level of interest under the International Offering;
(3) makes or will make or is likely to make it inadvisable, inexpedient,
impracticable or incapable for any material part of the Hong Kong
Underwriting Agreement, the Hong Kong Public Offering or the International
Offering to be performed or implemented as envisaged, or for the Hong Kong
Public Offering and/or the International 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 Offer Related Documents (as defined
below); or
(4) has or will have or is likely to have the effect of making any part of the Hong
Kong Underwriting Agreement (including underwriting the Hong Kong Public
Offering) incapable or impracticable of performance in accordance with its
terms or preventing or delaying 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 Joint Sponsors and/or the Overall Coordinators
that:
(i) any statement contained in any of the offering documents, the CSRC filing
and/or any notices, announcements, advertisements, communications or other
documents (including any announcement, circular, document or other
communication pursuant to the Hong Kong Underwriting Agreement) issued or
used by or on behalf of the Company in connection with the Global Offering
(including any supplement or amendment thereto but excluding names and
addresses of the Underwriters) (the “ Offer Related Documents ”) was, when
it was issued, or has become, untrue, incorrect, inaccurate or incomplete in any
material respects or misleading or deceptive, or that any estimate, forecast,
expression of opinion, intention or expectation contained in any of such
documents (including any supplement or amendment thereto) is not fair and
honest and not based on reasonable grounds or, where appropriate, not based
on reasonable assumptions with reference to the facts and circumstances then
subsisting taken as a whole;
(ii) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this prospectus, constitute a material
misstatement in, or material omission from any of the Offer Related
Documents;
UNDERWRITING
– 437 –


--- page 448 ---
(iii) there is a breach of, or any event or circumstance rendering untrue, incorrect,
incomplete or misleading in any respect, any of the representations, warranties
or undertakings given by the Company or any of the Controlling Shareholders
in the Hong Kong Underwriting Agreement or the International Underwriting
Agreement (including any supplement or amendment thereto), as applicable;
(iv) there is a material breach of any of the obligations imposed upon the Company
or any of the Controlling Shareholders under the Hong Kong Underwriting
Agreement or the International Underwriting Agreement (including any
supplement or amendment thereto), as applicable;
(v) there is an event, act or omission which gives or is likely to give rise to any
liability of the Company or any of the Controlling Shareholders pursuant to the
indemnities given by any of them under the Hong Kong Underwriting
Agreement or the International Underwriting Agreement (including any
supplement or amendment thereto), as applicable;
(vi) there is any material adverse change;
(vii) the approval of the Stock Exchange of the listing of, and permission to deal in,
the Shares in issue and to be issued pursuant to the Global Offering (including
pursuant to any exercise of the Over-allotment Option), other than subject to
customary conditions, is refused or not granted on or before the Listing Date,
or if granted, the approval is subsequently withdrawn, cancelled, qualified
(other than by customary conditions), revoked or withheld;
(viii) the notice of acceptance of the CSRC filing issued by the CSRC and/or the
results of the CSRC filing published on the website of the CSRC is rejected,
withdrawn, revoked or invalidated;
(ix) any person named as an expert in this prospectus (other than the Joint
Sponsors) has withdrawn or is subject to withdrawing its consent to the issue
of this prospectus with the inclusion of its reports, letters and/or legal opinions
(as the case may be) and references to its name included in the form and
context in which it respectively appears;
(x) the Company withdraws any of the offering documents or the Global Offering;
(xi) there is a prohibition on the Company for whatever reason from offering,
allotting, issuing or selling any of the Offer Shares (including pursuant to any
exercise of the Over-allotment Option) pursuant to the terms of the Global
Offering;
UNDERWRITING
– 438 –


--- page 449 ---
(xii) any Director or member of senior management of the Company is being
charged with an indictable offence or is prohibited by operation of law or
otherwise disqualified from taking part in the management of a company or
taking a directorship of a company or an announcement by any governmental,
political or regulatory body that it intends to commence any such investigation
or take any such action;
(xiii) there is an order or petition for the winding-up of any member of the Group or
any composition or arrangement made by any member of the Group with its
creditors or a scheme of arrangement entered into by any member of the Group
or any resolution for the winding-up of any member of the Group or the
appointment of a provisional liquidator, receiver or manager over all or part of
the assets or undertaking of any member of the Group or anything analogous
thereto occurring in respect of any member of the Group; or
(xiv) a material portion of the orders placed or confirmed in the bookbuilding
process, or of the investment commitments made by any cornerstone investors
under agreements signed with such cornerstone investors, have been
withdrawn, terminated or cancelled.
Undertakings to the Stock Exchange pursuant to the Listing Rules
(A) Undertakings by the Company
Pursuant to Rule 10.08 of the Listing Rules, the Company has undertaken to the Stock
Exchange that no further Shares or securities convertible into equity securities of the Company
(whether or not of a class already listed) may be issued by the Company or form the subject
of any agreement to such an issue within six (6) months from the Listing Date (whether or not
such issue of Shares or securities will be completed within six (6) months from the Listing
Date), except for: (a) any capitalization issue, capital reduction or consolidation or sub-
division of Shares; or (b) issue of Shares or securities pursuant to the Global Offering and the
Over-allotment Option; or (c) any other applicable circumstances provided under Rule 10.08
of the Listing Rules.
(B) Undertakings by the Controlling Shareholders
Pursuant to Rule 10.07 of the Listing Rules, each of the Controlling Shareholders has
undertaken to the Stock Exchange and the Company that, except pursuant to the Global
Offering (including the Over-allotment Option), it/he will not and will procure that the relevant
registered holder(s) will not without the prior written consent of the Stock Exchange or unless
otherwise in compliance with the applicable requirement of the Listing Rules:
(i) in the period commencing on the date by reference to which disclosure of its
shareholdings in the Company is made in this prospectus and ending on the date
which is six months from the Listing Date, dispose of, nor enter into any agreement
to dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, any of the shares in respect of which it is shown by this prospectus to be
the beneficial owner; and
UNDERWRITING
– 439 –


--- page 450 ---
(ii) in the period of a further six months commencing on the date on which the period
referred to in paragraph (i) above expires, dispose of, nor enter into any agreement
to dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, any of the shares referred to in paragraph (i) above if, immediately
following such disposal or upon the exercise or enforcement of such options, rights,
interests or encumbrances, it would cease to be a controlling shareholder of the
Company.
Pursuant to Note 3 to Rule 10.07(2) of the Listing Rules, each of the Controlling
Shareholders has undertaken to the Stock Exchange and the Company that, within the period
commencing on the date by reference to which disclosure of its shareholding in the Company
is made in this prospectus and ending on the date which is 12 months from the Listing Date,
it/he will and will procure that the relevant registered holder(s) will:
(a) when it pledges or charges any securities of the Company beneficially owned by it
in favor of an authorized institution (as defined in the Banking Ordinance (Chapter
155 of the Laws of Hong Kong)) for a bona fide commercial loan, immediately
inform the Company of such pledge or charge together with the number of securities
so pledged or charged; and
(b) when it receives indications, either verbal or written, from the pledgee or chargee
that any of the pledged or charged shares will be disposed of, immediately inform
the Company of such indications.
The Company will inform the Stock Exchange as soon as it has been informed of the
matters referred to in paragraphs (i) and (ii) above by the Controlling Shareholders and disclose
such matters by way of an announcement which is published in accordance with Rule 2.07C
of the Listing Rules as soon as possible.
Undertakings Pursuant to the Hong Kong Underwriting Agreement
(A) Undertakings by the Company
Pursuant to the Hong Kong Underwriting Agreement, the Company undertakes to each of
the Joint Sponsors and the Underwriters that, except for the issue, offer or sale of the Offer
Shares by the Company pursuant to the Global Offering (including pursuant to any exercise of
the Over-allotment Option), the Company will not, without the prior written consent of the
Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters) and unless in compliance with the Listing Rules, at any time during the period
commencing on the date hereof and ending on, and including, the date falling six months after
the Listing Date (the “ First Six-Month Period ”):
(i) offer, 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, agree to grant or sell any option, warrant, right or contract or right to
UNDERWRITING
– 440 –


--- page 451 ---
subscribe for or purchase, grant, agree to 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 any Shares or other securities of the Company, or
any interests in any of the foregoing (including, but not limited to, any securities that
are convertible into or exercisable or exchangeable for, or that represent the right to
receive, or any warrants or other rights to purchase, any Shares or other securities
of the Company or any interest in any of the foregoing), or deposit any Shares or
other securities of the Company, with a depositary in connection with the issue of
depositary receipts; or
(ii) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of subscription or ownership (legal or
beneficial) of any Shares or other securities of the Company, or any interest therein,
or any interest in any of the foregoing (including, without limitation, any securities
which are convertible into or exchangeable or exercisable for, or that represent the
right to receive, or any warrants or other rights to purchase, any Shares or other
securities of the Company or any interest in any of the foregoing); or
(iii) enter into any transaction with the same economic effect as any transaction
described in (i) or (ii) above; or
(iv) offer to or contract to or agree to announce, or publicly disclose that the Company
will or may enter into any such transaction described in (i), (ii) or (iii) above,
in each case, whether any of the transactions described in (i), (ii) or (iii) above is to be settled
by delivery of any Shares or other securities of the Company or, in cash or otherwise (whether
or not the issue of such Shares or other securities of the Company will be completed within the
First Six-Month Period).
In addition, the Company further undertakes to each of the Joint Sponsors and the
Underwriters, in the event that, at any time during the period of six months immediately
following the expiry of the First Six-Month Period (the “ Second Six-Month Period ”), the
Company enters into any such transactions or offers or agrees or contracts to, or announces, or
publicly discloses, any intention to, enter into any such transactions described in (i), (ii) or (iii)
above, the Company shall take all reasonable steps to ensure that it will not create a disorderly
or false market in the Shares or other securities of the Company.
UNDERWRITING
– 441 –


--- page 452 ---
(B) Undertakings by the Controlling Shareholders
Pursuant to the Hong Kong Underwriting Agreement, each of the Controlling
Shareholders jointly and severally agrees and undertakes to the Company, the Joint Sponsors
and the Underwriters that, without the prior written consent of the Joint Sponsors and the
Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and
unless in compliance with the Listing Rules:
(a) during the First Six-Month Period, it/he will not, and will procure that the relevant
registered holder(s), any nominee or trustee holding on trust for it/him and the
companies controlled by it/him will not,:
(i) offer, pledge, charge, sell, offer to sell, contract or agree to sell, assign,
mortgage, charge, pledge, hypothecate, hedge, lend, grant or sell any option,
warrant, contract or right to purchase or subscribe for, grant or purchase any
option, warrant, contract or right to sell, or otherwise transfer or dispose of or
create an encumbrance over, or agree to transfer or dispose of or create an
encumbrance over, either directly or indirectly, conditionally or
unconditionally, any Shares or other securities of the Company or any interest
in any of the foregoing (including, but not limited to, any securities that are
convertible into or exchangeable or exercisable for, or that represent the right
to receive, or any warrants or other rights to purchase, any Shares or other
securities of the Company, or deposit any share capital or other securities of the
Company with a depository in connection with the issue of depository receipts)
legally or beneficially owned by it/him as at the Listing Date (the “ Locked-up
Securities ”); or
(ii) enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of, any Locked-up
Securities; or
(iii) enter into any transaction with the same economic effect as any transaction
described in (i) or (ii) above; or
(iv) offer to or contract to or agree to or publicly disclose that it/he will or may
enter into any transaction described in (i), (ii) or (iii) above,
in each case, whether any such transaction described in (i), (ii) or (iii) above is to be settled
by delivery of such Shares or other securities of the Company, in cash or otherwise (whether
or not the settlement or delivery of such Shares or other securities will be completed within the
First Six-Month Period);
(b) during the Second Six-Month Period, it/he will not enter into any transaction
described in (a)(i), (a)(ii) or (a)(iii) above or offer, agree or contract to or publicly
announce any intention to enter into any such transaction, if, immediately following
UNDERWRITING
– 442 –


--- page 453 ---
such transaction, it/he will cease, whether individually or collectively with the other
Controlling Shareholder, to be a “controlling shareholder” (as the term is defined
under the Listing Rules) of the Company;
(c) in the event that it/he enters into any of the transactions specified in (a)(i), (a)(ii) or
(a)(iii) above or offer to or agrees to or announce any intention to effect any such
transaction within the Second Six-Month Period, it/he shall take all reasonable steps
to ensure that it/he will comply with all the restrictions and requirements under the
Lising Rules and will not create a disorderly or false market for any Shares or other
securities of the Company;
(d) at any time from the date of the Hong Kong Underwriting Agreement up to and
including the date falling 12 months after the Listing Date, it/he will:
(i) if and when it/he or the relevant registered holder(s) pledges or charges any
Shares or other securities of the Company beneficially owned by it/him,
immediately inform the Company, the Joint Sponsors and the Overall
Coordinators in writing of such pledge or charge together with the number of
Shares or other securities (or interests therein) of the Company so pledged or
charged; and
(ii) if and when it/he or the relevant registered holder(s) receives indications,
either verbal or written, from any pledgee or chargee that any of the pledged
or charged Shares or other securities (or interests therein) of the Company will
be disposed of, immediately inform the Company, the Joint Sponsors, and the
Overall Coordinators in writing of such indications.
Hong Kong Underwriters’ Interests in the 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 Shares or any securities of any member of the Group
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 Shares or any securities of any member
of the Group.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the Shares as a result of fulfilling their
respective obligations under the Hong Kong Underwriting Agreement.
UNDERWRITING
– 443 –


--- page 454 ---
International Offering
International Underwriting Agreement
In connection with the International Offering, the Company expects to enter into the
International Underwriting Agreement with the International Underwriters on or around the
Price Determination Date. Under the International Underwriting Agreement and subject to the
Over-allotment Option, 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 as the Hong Kong
Underwriting Agreement. Potential investors should note that in the event that the International
Underwriting Agreement is not entered into, the Global Offering will not proceed. See
“Structure of the Global Offering — The International Offering.”
Over-allotment Option
The Company is expected to grant to the International Underwriters the Over-allotment
Option, exercisable by the Overall Coordinators (for themselves and on behalf of the
International Underwriters) at any time from the Listing Date until 30 days after the last day
for lodging applications under the Hong Kong Public Offering, pursuant to which the Company
may be required to issue up to an aggregate of 75,000,000 Shares, representing not more than
15% of the number of Offer Shares initially available under the Global Offering, at the Offer
Price, to, among other things, cover over-allocations in the International Offering, if any. See
“Structure of the Global Offering — Over-allotment Option.”
Commissions and Expenses
The Capital Market Intermediaries will receive an underwriting commission of 1.5% of
the aggregate Offer Price of all the Offer Shares (including any Offer Shares to be issued
pursuant to the exercise of the Over-allotment Option), out of which they will pay any
sub-underwriting commissions and other fees (if any).
The Capital Market Intermediaries may receive a discretionary incentive fee of up to
1.0% of the aggregate Offer Price of all the Offer Shares to be issued by the Company under
the Global Offering (including any Offer Shares to be issued pursuant to the exercise of the
Over-allotment Option).
Assuming full payment of the discretionary fees and no exercise of the Over-allotment
Option, and based on the maximum Offer Price of HK$10.99 per Offer Share, the fixed fees
and the discretionary fees payable to the Capital Market Intermediaries represent
approximately 39.2% and 60.8%, respectively, of the aggregate fees payable to the Capital
Market Intermediaries in total in connection with the Global Offering.
UNDERWRITING
– 444 –


--- page 455 ---
For any unsubscribed Hong Kong Offer Shares reallocated to the International Offering,
the underwriting commission will not be paid to the Hong Kong Underwriters but will instead
be paid, at the rate applicable to the International Offering, to the relevant International
Underwriters.
The aggregate underwriting commissions payable to the Capital Market Intermediaries in
relation to the Global Offering (assuming an indicative Offer Price of HK$10.58 per Offer
Share (which is the mid-point of the Offer Price range), the full payment of the discretionary
incentive fee and the exercise of the Over-allotment Option in full) will be approximately
HK$144.3 million representing approximately 2.5% of the estimated gross proceeds from the
Global Offering.
The aggregate underwriting commissions and fees together with the Stock Exchange
listing fees, the SFC transaction levy, the AFRC transaction levy and the Stock Exchange
trading fee, legal and other professional fees and printing and all other expenses relating to the
Global Offering are estimated to be approximately HK$197.5 million (assuming an indicative
Offer Price of HK$10.58 per Offer Share (which is the mid-point of the Offer Price range), the
full payment of the discretionary incentive fee and the exercise of the Over-allotment Option
in full) and will be paid by the Company.
Indemnity
The Company has agreed to indemnify 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 the Company 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, 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
UNDERWRITING
– 445 –


--- page 456 ---
trading activities may involve or relate to assets, securities and/or instruments of the Company
and/or persons and entities with relationships with the Company and may also include swaps
and other financial instruments entered into for hedging purposes in connection with the
Group’s loans and other debt.
In relation to the Shares, the activities of the Syndicate Members and their affiliates could
include acting as agent for buyers and sellers of the Shares, entering into transactions with
those buyers and sellers in a principal capacity, including as a lender to initial purchasers of
the Shares (which financing may be secured by the Shares) in the Global Offering, proprietary
trading in the 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
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 Shares, which may have a negative impact
on the trading price of the 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 Shares, in baskets of securities or indices including the Shares, in units
of funds that may purchase the Shares, or in derivatives related to any of the foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities
having the 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 Shares in most cases.
Such activities may affect the market price or value of the Shares, the liquidity or trading
volume in the Shares and the volatility of the price of the 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:
 the Syndicate Members (other than the Stabilizing Manager or any person acting for it)
must not, in connection with the distribution of the Offer Shares, effect any transactions
(including issuing or entering into any option or other derivative transactions relating to
the Offer Shares), whether in the open market or otherwise, with a view to stabilizing or
maintaining the market price of any of the Offer Shares at levels other than those which
might otherwise prevail in the open market; and
 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.
UNDERWRITING
– 446 –


--- page 457 ---
Certain of the Syndicate Members or their respective affiliates have provided from time
to time, and expect to provide in the future, investment banking and other services to the
Company and each of 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 the Offer Shares in the Global Offering.
UNDERWRITING
– 447 –


--- page 458 ---
THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering.
The listing of the Shares on the Main Board of the Stock Exchange is sponsored by the
Joint Sponsors. The Joint Sponsors have made an application on behalf of the Company to the
Stock Exchange for the listing of, and permission to deal in, the Shares to be issued as
mentioned in this prospectus.
500,000,000 Offer Shares will initially be made available under the Global Offering
comprising:
 the Hong Kong Public Offering of initially 50,000,000 Offer Shares (subject to
reallocation) in Hong Kong as described in “— The Hong Kong Public Offering”
below; and
 the International Offering of initially 450,000,000 Offer Shares (subject to
reallocation and the Over-allotment Option) 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” below.
Investors may either (i) apply for Hong Kong Offer Shares under the Hong Kong Public
Offering; or (ii) 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 25.0% of the enlarged issued share capital
of the Company immediately following the completion of the Global Offering, assuming the
Over-allotment Option is not exercised. If the Over-allotment Option is exercised in full, the
Offer Shares will represent approximately 27.7% of the enlarged issued share capital of the
Company immediately following the 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
The Company is initially offering 50,000,000 Offer Shares 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. 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 2.5% of the enlarged issued share capital of the Company immediately
following the completion of the Global Offering (assuming the Over-allotment Option is not
exercised).
STRUCTURE OF THE GLOBAL OFFERING
– 448 –


--- page 459 ---
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” below.
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 equally into two pools: pool A and pool B with any odd lots being allocated to
pool A. The Hong Kong Offer Shares in pool A will be allocated on an equitable basis to
applicants who have applied for Hong Kong Offer Shares with an aggregate subscription price
of HK$5 million (excluding the brokerage, the SFC transaction levy, the Stock Exchange
trading fee and the AFRC transaction levy payable) or less. The Hong Kong Offer Shares in
pool B will be allocated on an equitable basis to applicants who have applied for Hong Kong
Offer Shares with an aggregate subscription price of more than HK$5 million (excluding the
brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction
levy 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 25,000,000 Hong Kong
Offer Shares (being approximately 50% of the Hong Kong Offer Shares initially available
under the Hong Kong Public Offering) is liable to be rejected.
STRUCTURE OF THE GLOBAL OFFERING
– 449 –


--- page 460 ---
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 Overall Coordinators. Subject to the allocation cap described in the
subsequent paragraph, the Overall Coordinators may in their 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 Overall Coordinators 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 Overall
Coordinators deem 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 undersubscribed and the Hong Kong Offer Shares are fully
subscribed or oversubscribed irrespective of the number of times, then up to 25,000,000 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 75,000,000 Offer Shares, representing approximately 15% of the
number of Offer Shares initially available under the Global Offering (before any exercise of the
Over-allotment Option) and the final Offer Price should be fixed at the lower end of the
indicative Offer Price range (that is, HK$10.18 per Offer Share) stated in this prospectus, 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 Mechanism B set out under paragraph 2 of Chapter 4.14 of the
Guide for New Listing Applicants and 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.
STRUCTURE OF THE GLOBAL OFFERING
– 450 –


--- page 461 ---
Applications
Each applicant under the Hong Kong Public Offering will be required to give an
undertaking and confirmation in the application submitted by him/her that he/she and any
person(s) for whose benefit he/she is making the application has not applied for or taken up,
or indicated an interest for, and will not apply for or take up, or indicate an interest for, any
International Offer Shares under the International Offering. Such applicant’s application under
the International Offering is liable 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 may be required to pay, on application
(subject to application channels), the maximum Offer Price in addition to the brokerage, the
SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy payable
on each Offer Share, amounting to a total of HK$5,550.42 for one board lot of 500 Offer
Shares. If the Offer Price, as finally determined in the manner described in “— Pricing and
Allocation” below, is less than the maximum Offer Price, appropriate refund payments
(including the brokerage, the SFC transaction levy, the Stock Exchange trading fee and the
AFRC transaction levy attributable to the surplus application monies) will be made to
successful applicants (subject to application channels), without interest. Further details are set
out in “How to Apply for Hong Kong Offer Shares.”
THE INTERNATIONAL OFFERING
Number of Offer Shares initially offered
The International Offering will consist of an offering of initially 450,000,000 Offer
Shares offered by the Company (subject to reallocation and the Over-allotment Option),
representing approximately 90.0% of the total number of Offer Shares initially available under
the Global Offering. 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 22.5% of the enlarged issued share
capital of the Company immediately following the completion of the Global Offering
(assuming the Over-allotment Option is not exercised).
STRUCTURE OF THE GLOBAL OFFERING
– 451 –


--- page 462 ---
Allocation
The International Offering will include selective marketing of Offer 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 “— Pricing and Allocation” 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 Shares and/or hold or sell its Shares
after the Listing. Such allocation is intended to result in a distribution of the Shares on a basis
which would lead to the establishment of a solid professional and institutional shareholder base
to the benefit of the Group and the Shareholders as a whole.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may require
any investor who has been offered Offer Shares under the International Offering and who has
made an application under the Hong Kong Public Offering to provide sufficient information to
the Overall Coordinators so as to allow them to identify the relevant applications under the
Hong Kong Public Offering and to ensure that they are excluded from any allocation of Offer
Shares under the International Offering.
Reallocation
The total number of Offer Shares to be issued or sold pursuant to the International
Offering may change as a result of the exercise of the Over-allotment Option in whole or in
part described in the paragraph headed “— Over-allotment Option” in this section, and any
reallocation of unsubscribed Offer Shares originally included in the Hong Kong Public
Offering and/or any Offer Shares from the International Offering to the Hong Kong Public
Offering at the discretion of the Overall Coordinators.
OVER-ALLOTMENT OPTION
In connection with the Global Offering, the Company is expected to grant the
Over-allotment Option to the International Underwriters, exercisable by the Overall
Coordinators (for themselves and on behalf of the International Underwriters).
Pursuant to the Over-allotment Option, the International Underwriters will have the right,
exercisable by the Overall Coordinators (for themselves and on behalf of the International
Underwriters) at any time from the Listing Date until 30 days after the last day for lodging
applications under the Hong Kong Public Offering, to require the Company to issue up to an
aggregate of 75,000,000 additional Offer Shares, representing not more than 15% of the total
number of Offer Shares initially available under the Global Offering, at the Offer Price under
the International Offering to, among other things, cover over-allocations in the International
Offering, if any.
STRUCTURE OF THE GLOBAL OFFERING
– 452 –


--- page 463 ---
If the Over-allotment Option is exercised in full, the additional Offer Shares to be issued
pursuant thereto will represent approximately 3.6% of the enlarged issued share capital of the
Company immediately following the completion of the Global Offering. If the Over-allotment
Option is exercised, an announcement will be made.
STABILIZATION
Stabilization is a practice used by underwriters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the securities
in the secondary market during a specified period of time, to retard and, if possible, prevent
a decline in the initial public market price of the securities below the offer price. Such
transactions may be effected in all jurisdictions where it is permissible to do so, in each case
in compliance with all applicable laws and regulatory requirements, including those of Hong
Kong. In Hong Kong, the price at which stabilization is effected is not permitted to exceed the
offer price.
In connection with the Global Offering, the Stabilizing Manager (or any person acting for
it), on behalf of the Underwriters, may over-allocate or effect transactions with a view to
stabilizing or supporting the market price of the Shares at a level higher than that which might
otherwise prevail for a limited period after the Listing Date. However, there is no obligation
on the Stabilizing Manager (or any person acting for it) to conduct any such stabilizing action.
Such stabilizing action, if taken, (a) will be conducted at the absolute discretion of the
Stabilizing Manager (or any person acting for it) and in what the Stabilizing Manager (or any
person acting for it) reasonably regards as the best interest of the Company, (b) may be
discontinued at any time, and (c) is required to be brought to an end within 30 days after the
last day for lodging applications under the Hong Kong Public Offering.
Stabilization action permitted in Hong Kong pursuant to the Securities and Futures (Price
Stabilizing) Rules of the SFO includes (a) over-allocating for the purpose of preventing or
minimizing any reduction in the market price of the Shares, (b) selling or agreeing to sell the
Shares so as to establish a short position in them for the purpose of preventing or minimizing
any reduction in the market price of the Shares, (c) purchasing, or agreeing to purchase, the
Shares pursuant to the Over-allotment Option in order to close out any position established
under paragraph (a) or (b) above, (d) purchasing, or agreeing to purchase, any of the Shares for
the sole purpose of preventing or minimizing any reduction in the market price of the Shares,
(e) selling or agreeing to sell any Shares in order to liquidate any position established as a
result of those purchases and (f) offering or attempting to do anything as described in
paragraphs (b), (c), (d) or (e) above.
Specifically, prospective applicants for and investors in the Offer Shares should note that:
 the Stabilizing Manager (or any person acting for it) may, in connection with the
stabilizing action, maintain a long position in the Shares;
STRUCTURE OF THE GLOBAL OFFERING
– 453 –


--- page 464 ---
 there is no certainty as to the extent to which and the time or period for which the
Stabilizing Manager (or any person acting for it) will maintain such a long position;
 liquidation of any such long position by the Stabilizing Manager (or any person
acting for it) and selling in the open market may have an adverse impact on the
market price of the Shares;
 no stabilizing action can be taken to support the price of the Shares for longer than
the stabilization period, which will begin on the Listing Date, and is expected to
expire on Friday, December 19, 2025 being the 30th day after the last day for
lodging applications under the Hong Kong Public Offering. After this date, when no
further stabilizing action may be taken, demand for the Shares, and therefore the
price of the Shares, could fall;
 the price of the Shares cannot be assured to stay at or above the Offer Price by the
taking of any stabilizing action; and
 stabilizing bids or transactions effected in the course of the stabilizing action may
be made at any price at or below the Offer Price and can, therefore, be done at a
price below the price paid by applicants for, or investors in, the Offer Shares.
The Company will ensure or procure that an announcement in compliance with the
Securities and Futures (Price Stabilizing) Rules of the SFO will be made within seven days of
the expiration of the stabilization period.
Over-allocation
Following any over-allocation of Shares in connection with the Global Offering, the
Stabilizing Manager (or any person acting for it) may cover such over-allocations by, among
others, exercising the Over-allotment Option in full or in part, using Shares purchased by the
Stabilizing Manager (or any person acting for it) in the secondary market at prices that do not
exceed the Offer Price or a combination of these means.
STOCK BORROWING AGREEMENT
In order to facilitate the settlement of over-allocations, if any, in connection with the
Global Offering, the Stabilizing Manager (or any person acting for it) may choose to borrow
up to 75,000,000 Shares (being the maximum number of Shares which may be issued pursuant
to the Stock Borrowing Agreement, which is expected to be entered into between the
Stabilizing Manager (or any person acting for it) and Bloomsbury Holding on or about the
Price Determination Date.
The same number of Shares so borrowed must be returned to Bloomsbury Holding or its
nominees, as the case may be, on or before the third business day following the earlier of (a)
the last day on which the Over-allotment Option may be exercise and (b) the day on which the
Over-allotment Option is exercised in full.
STRUCTURE OF THE GLOBAL OFFERING
– 454 –


--- page 465 ---
The Shares borrowing arrangement described above will be effected in compliance with
all applicable laws, rules and regulatory requirements. No payment will be made to
Bloomsbury Holding by the Stabilizing Manager (or any person acting for it) in relation to such
Shares borrowing arrangement.
PRICING AND ALLOCATION
Determining the Pricing of the Offer Shares
Pricing for the Offer Shares for the purpose of the various offerings under the Global
Offering will be determined on the Price Determination Date, which is expected to be on or
before Thursday, November 20, 2025 and, in any event, no later than 12:00 noon on Thursday,
November 20, 2025 by agreement between the Overall Coordinators (for themselves and on
behalf of the Underwriters) and the Company, and the number of Offer Shares to be allocated
under the various offerings will be determined shortly thereafter.
The Offer Price will not be more than HK$10.99 per Offer Share and is expected to be
not less than HK$10.18 per Offer Share, unless otherwise announced, as further explained
below. Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the maximum Offer Price plus brokerage of 1.0%, SFC
transaction levy of 0.0027%, Stock Exchange trading fee of 0.00565% and AFRC transaction
levy of 0.00015%, amounting to a total of HK$5,550.42 for one board lot of 500 Offer Shares.
Prospective investors should be aware that the Offer Price to be determined on the Price
Determination Date may be, but is not expected to be, lower than the indicative Offer
Price range stated in this prospectus.
The International Underwriters will be soliciting from prospective investors’ indications
of interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Offering they would be prepared to acquire either at different prices or at a
particular price. This process, known as “book-building,” is expected to continue up to, and to
cease on or about, the last day for lodging applications under the Hong Kong Public Offering.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, where
they deem appropriate, based on the level of interest expressed by prospective 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 below and/or the Offer Price range as
stated in this prospectus at any time on or prior to the morning of the last day for lodging
applications under the Hong Kong Public Offering. In such a case, the Company will, as soon
as practicable following the decision to make such reduction, and in any event not later than
the morning of the last day for lodging applications under the Hong Kong Public Offering,
cause to be published on the websites of the Company and the Stock Exchange at
www.innovationigi.com and www.hkexnews.hk , respectively, notices of the reduction, and
the cancelation of the Global Offering and relaunch of the offer at the revised number of Offer
Shares and/or the revised indicative Offer Price range.
STRUCTURE OF THE GLOBAL OFFERING
– 455 –


--- page 466 ---
The Company will also, as soon as practicable following the decision to make such
change, issue a supplemental or new prospectus updating investors of the change in the number
of Offer Shares and/or the indicative Offer Price range, and giving investors at least three
business days to consider the new information. The supplemental or new prospectus should
include at least the following: (i) updated Offer Price range and market capitalization; (ii)
updated listing timetable and underwriting obligations; (iii) updated price/earnings multiple,
unaudited pro forma and adjusted net tangible assets; and (iv) updated use of proceeds and
confirmation of the working capital adequacy based on the revised estimated proceeds.
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 indicative Offer Price range may not be made until the last day for lodging
applications under the Hong Kong Public Offering. In the absence of any such notice so
published, the number of Offer Shares and the indicative Offer Price range will not be reduced
and/or the Offer Price, if agreed upon by the Overall Coordinators (for themselves and on
behalf of the Underwriters) and the Company, will under no circumstances be set outside the
Offer Price range as stated in this prospectus.
If there is any change to the offer size due to change in the number of Offer Shares offered
in the Global Offering (other than pursuant to the reallocation mechanism as disclosed in this
prospectus), or change to the Offer Price falling outside the indicative Offer Price range as
stated in this prospectus, or if the Company becomes aware that there has been a significant
change affecting any matter contained in this prospectus or a significant new matter has arisen,
the inclusion of information in respect of which would have been required to be in this
prospectus if it had arisen before this prospectus was issued, after the issue of this prospectus
and before the commencement of dealings in our Shares as prescribed under Rule 11.13 of the
Listing Rules, we are required to cancel the Global Offering and relaunch the offer with a
supplemental prospectus or a new prospectus in FINI.
Announcement of Final Pricing of the Offer Shares
The final Offer Price, the level of indications of interest in the International Offering, the
level of applications in the Hong Kong Public Offering, the basis of allocations 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 “How
to Apply for Hong Kong Offer Shares — B. Publication of Results.”
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 Overall Coordinators (for themselves and on behalf of the
Underwriters) and the Company agreeing on the Offer Price.
STRUCTURE OF THE GLOBAL OFFERING
– 456 –


--- page 467 ---
The Company expects to enter into the International Underwriting Agreement relating to
the International Offering on the Price Determination Date.
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:
 the Stock Exchange granting approval for the listing of, and permission to deal in,
the Shares to be issued pursuant to the Global Offering on the Main Board of the
Stock Exchange and such approval not subsequently having been withdrawn or
revoked prior to the Listing Date;
 the Offer Price having been agreed between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and the Company;
 the execution and delivery of the International Underwriting Agreement on or
around the Price Determination Date; and
 the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting
Agreement and the obligations of the International Underwriters under the
International Underwriting Agreement becoming and remaining unconditional and
not having been terminated in accordance with the terms of the respective
Underwriting 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) and, in any event, not later than the date which is 30 days after the date of
this prospectus.
If, for any reason, the Offer Price is not agreed between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and the Company by 12:00 noon on Thursday,
November 20, 2025, the Global Offering will not proceed and will lapse.
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon, among other things, 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 the Company on the websites
of the Company and the Stock Exchange at www.innovationigi.com and www.hkexnews.hk ,
respectively, on the next day following such lapse. In such a situation, all application monies
STRUCTURE OF THE GLOBAL OFFERING
– 457 –


--- page 468 ---
will be returned, without interest, on the terms set out in “How to Apply for Hong Kong Offer
Shares — D. Despatch/Collection of Share Certificates and Refund of Application Monies.” In
the meantime, all application monies will be held in separate bank account(s) with the
receiving banks or other bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter
155 of the Laws of Hong Kong).
Share certificates for the Offer Shares will only become valid evidence of title at 8:00
a.m. on Monday, November 24, 2025, provided that the Global Offering has become
unconditional in all respects at or before that time.
DEALINGS IN THE SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00
a.m. in Hong Kong on Monday, November 24, 2025, it is expected that dealings in the Shares
on the Stock Exchange will commence at 9:00 a.m. on Monday, November 24, 2025.
The Shares will be traded in board lots of 500 Shares each and the stock code of the
Shares will be 02788.
NOTICE TO CAPITAL MARKET INTERMEDIARIES AND PROSPECTIVE
INVESTORS PURSUANT TO PARAGRAPH 21 OF THE SFC CODE OF CONDUCT
Important Notice to CMIs (including private banks)
This notice to CMIs (including private banks) is a summary of certain obligations the
Code of Conduct for Persons Licensed by or Registered with the Securities and Futures
Commission (the “ Code ”) imposes on CMIs, which require the attention and cooperation of
other CMIs (including private banks). Certain CMIs may also be acting as the Overall
Coordinators for this offering and is subject to additional requirements under the Code.
Paragraph 21.3.3(c) of the Code requires that a CMI should take all reasonable steps to
identify whether investors may have any associations with the Company and provide sufficient
information to the Overall Coordinators to enable it to assess whether orders placed by these
investors may negatively impact the price discovery process.
Prospective investors who are the directors, employees or major shareholders of the
Company, a CMI or its group companies would be considered under the Code as having an
association (the “ Association ”) with the Company, the CMI or the relevant group company (as
the case may be). CMIs should specifically disclose whether their investor clients have any
Association when submitting orders for the Offer Shares. In addition, private banks should take
all reasonable steps to identify whether their investor clients may have any Associations with
the Company or any CMI (including its group companies) and inform the Underwriters
accordingly.
STRUCTURE OF THE GLOBAL OFFERING
– 458 –


--- page 469 ---
Prospective investors to whom the allocation of Offer Shares will be subject to
restrictions or require prior consent from the Stock Exchange under the Listing Rules and other
regulatory requirements or guidance issued by the Stock Exchange from time to time (the
“Stock Exchange Requirements ”) (e.g. a connected person of a listed issuer) would be
considered as “Restricted Investors.” Offer Shares may only be allocated to Restricted
Investors in accordance with applicable Stock Exchange Requirements. CMIs should
specifically disclose whether their investor clients are Restricted Investors when submitting
orders for the Offer Shares.
CMIs are informed that the marketing and investor targeting strategy for this offering
includes institutional investors, long-only investors, sovereign wealth funds, pension funds,
hedge funds, in each case, subject to the applicable Stock Exchange Requirements (in the case
of a Stock Exchange listed issuer) and selling restrictions set out elsewhere in this prospectus.
CMIs should ensure that orders placed are bona fide, are not inflated and do not constitute
duplicated orders (i.e. two or more corresponding or identical orders placed via two or more
CMIs). CMIs should inquire with their investor clients regarding any orders which appear
unusual or irregular. CMIs should disclose the identities of all investors when submitting
orders for the Offer Shares (except for omnibus orders where underlying investor information
should be provided to the Overall Coordinators when submitting orders). Failure to provide
underlying investor information for omnibus orders, where required to do so, may result in that
order being rejected. CMIs should not place “X-orders” into the order book.
CMIs should segregate and clearly identify their own proprietary orders (and those of
their group companies, including private banks as the case may be) in the order book and book
messages.
CMIs (including private banks) should not offer any rebates to prospective investors or
pass on any rebates provided by the Company. In addition, CMIs (including private banks)
should not enter into arrangements which may result in prospective investors paying different
prices for the Offer Shares.
The Code requires that a CMI disclose complete and accurate information in a timely
manner on the status of the order book and other relevant information it receives to targeted
investors for them to make an informed decision. In order to do this, those Underwriters in
control of the order book should consider disclosing order book updates to all CMIs.
When placing an order for the Offer Shares, private banks should disclose, at the same
time, if such order is placed other than on a “principal” basis (whereby it is deploying its own
balance sheet for onward selling to investors). Private banks who do not provide such
disclosure are hereby deemed to be placing their order on such a “principal” basis. Private
banks who disclose that they are placing their order other than on a “principal” basis (i.e. they
are acting as an agent) should note that such order may be considered to be an omnibus order
pursuant to the Code. Private banks should be aware that if any of their group companies is a
CMI of this offering, placing an order on a “principal” basis may require the Underwriters to
apply the “proprietary orders” of the Code to such order and will require the Underwriters to
apply the “rebates” requirements of the Code to such order.
STRUCTURE OF THE GLOBAL OFFERING
– 459 –


--- page 470 ---
In relation to omnibus orders, when submitting such orders, CMIs (including private
banks) are requested to provide the underlying investor information, preferably in Excel
Workbook format, in respect of each order constituting the relevant omnibus order (failure to
provide such information may result in that order being rejected). To the extent information
being disclosed by CMIs and investors is personal and/or confidential in nature, CMIs
(including private banks) agree and warrant: (A) to take appropriate steps to safeguard the
transmission of such information to the Overall Coordinators; (B) that they have obtained the
necessary consents from the underlying investors to disclose such information to the Overall
Coordinators. By submitting an order and providing such information to the Overall
Coordinators, each CMI (including private banks) further warrants that they and the underlying
investors have understood and consented to the collection, disclosure, use and transfer of such
information by the Overall Coordinators and/or any other third parties as may be required by
the Code, including to the Company, relevant regulators and/or any other third parties as may
be required by the Code, for the purpose of complying with the Code, during the bookbuilding
process for this offering. CMIs that receive such underlying investor information are reminded
that such information should be used only for submitting orders in this offering. The
Underwriters may be asked to demonstrate compliance with their obligations under the Code,
and may request other CMIs (including private banks) to provide evidence showing compliance
with the obligations above (in particular, that the necessary consents have been obtained). In
such event, other CMIs (including private banks) are required to provide the relevant
Underwriter with such evidence within the timeline requested.
Important Notice to Prospective Investors
Prospective investors should be aware that certain intermediaries in the context of this
offering of the Offer Shares, including certain Underwriters, are CMIs subject to Paragraph 21
of the Code. This notice to prospective investors is a summary of certain obligations the Code
imposes on such CMIs, which require the attention and cooperation of prospective investors.
Certain CMIs may also be acting as the Overall Coordinators for this offering and is subject
to additional requirements under the Code.
Prospective investors who are the directors, employees or major shareholders of the
Company, a CMI or its group companies would be considered under the Code as having an
Association with the Company, the CMI or the relevant group company (as the case may be).
Prospective investors associated with the Company or any CMI (including its group
companies) should specifically disclose this when placing an order for the Offer Shares and
should disclose, at the same time, if such orders may negatively impact the price discovery
process in relation to this offering. Prospective investors who do not disclose their Associations
are hereby deemed not to be so associated. Where prospective investors disclose their
Associations but do not disclose that such order may negatively impact the price discovery
process in relation to this offering, such order is hereby deemed not to negatively impact the
price discovery process in relation to this offering.
STRUCTURE OF THE GLOBAL OFFERING
– 460 –


--- page 471 ---
Prospective investors to whom the allocation of Offer Shares will be subject to
restrictions or require prior consent from the Stock Exchange under the Stock Exchange
Requirements (e.g. a connected person of a listed issuer) would be considered as “Restricted
Investors.” Offer Shares may only be allocated to Restricted Investors in accordance with
applicable Stock Exchange Requirements. Prospective investors who are Restricted Investors
should specifically disclose whether they are Restricted Investors when placing an order for the
Offer Shares. Prospective investors who do not disclose they are Restricted Investors are
hereby deemed not to be Restricted Investors.
Prospective investors should ensure, and by placing an order prospective investors are
deemed to confirm, that orders placed are bona fide, are not inflated and do not constitute
duplicated orders (i.e. two or more corresponding or identical orders placed via two or more
CMIs). If a prospective investor is an asset management arm affiliated with any Underwriter,
such prospective investor should indicate when placing an order if it is for a fund or portfolio
where the Underwriter or its group company has more than 50% interest, in which case it will
be classified as a “proprietary order” and subject to appropriate handling by CMIs in
accordance with the Code and should disclose, at the same time, if such “proprietary order”
may negatively impact the price discovery process in relation to this offering. Prospective
investors who do not indicate this information when placing an order are hereby deemed to
confirm that their order is not such a “proprietary order.” If a prospective investor is otherwise
affiliated with any Underwriter, such that its order may be considered to be a “proprietary
order” (pursuant to the Code), such prospective investor should indicate to the relevant
Underwriter when placing such order and such orders will be subject to applicable
requirements in accordance with the Code. Prospective investors who do not indicate this
information when placing an order are hereby deemed to confirm that their order is not such
a “proprietary order.” Where prospective investors disclose such information but do not
disclose that such “proprietary order” may negatively impact the price discovery process in
relation to this offering, such “proprietary order” is hereby deemed not to negatively impact the
price discovery process in relation to this offering.
Prospective investors should be aware that certain information may be disclosed by CMIs
(including private banks) which is personal and/or confidential in nature to the prospective
investor. By placing an order, prospective investors are deemed to have understood and
consented to the collection, disclosure, use and transfer of such information by the
Underwriters and/or any other third parties as may be required by the Code, including to the
Company, the Overall Coordinators, relevant regulators and/or any other third parties as may
be required by the Code, it being understood and agreed that such information shall only be
used for the purpose of complying with the Code, during the bookbuilding process for this
offering. Failure to provide such information may result in that order being rejected.
STRUCTURE OF THE GLOBAL OFFERING
– 461 –


--- page 472 ---
IMPORTANT NOTICE TO INVESTORS
OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
The Company has adopted a fully electronic application process for the Hong
Kong Public Offering and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “ HKEXnews > New Listings > New Listing Information ”
section, and the Company’s website at www.innovationigi.com.
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
 are 18 years of age or older; and
 have a Hong Kong address (for the White Form eIPO service only) ; and
 are outside the United States (within the meaning of Regulation S) or are a person
described in paragraph (h)(3) of Rule 902 of Regulation S.
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange to the Company, you cannot apply for any Hong Kong Offer Shares if you or
the person(s) for whose benefit you are applying for:
 are an existing Shareholder;
 are a Director or chief executive of the Company and/or a director or chief executive
of any of its subsidiaries;
 are a close associate (as defined in the Listing Rules) of any of the above persons;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 462 –


--- page 473 ---
 are a connected person (as defined in the Listing Rules) of the Company or will
become a connected person of the Company immediately upon the completion of the
Global Offering; or
 have been allocated or have applied for or indicated an interest in any International
Offer Shares or otherwise participate in the International Offering.
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Friday, November 14,
2025 and end at 12:00 noon on Wednesday, November 19, 2025 (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
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, November
14, 2025 until
11:30 a.m. on
Wednesday,
November 19,
2025, Hong Kong
time.
The latest time for
completing full
payment of
application monies
in respect of such
applications will be
12:00 noon on
Wednesday,
November 19,
2025, Hong Kong
time.
HKSCC
EIPO
channel /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
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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 463 –


--- page 474 ---
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.
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 the 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 464 –


--- page 475 ---
Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance
For the avoidance of doubt, the Company and all other parties involved in the preparation
of this prospectus acknowledge that each applicant who gives or causes to give electronic
application instructions is a person who may be entitled to compensation under section 40 of
the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
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
Notes:
1. If you are applying through the White Form eIPO service, you are required to provide a valid e-mail address,
a contact telephone number and a Hong Kong Address. Y ou are also required to declare that the identity
information provided by you follows the requirements as described in Note 2 below. In particular, where you
cannot provide a HKID number, you must confirm that you do not hold a HKID card. The number of joint
applicants may not exceed four. If you are a firm, the applicant must be in the individual members’ names.
2. The applicant’s full name as shown on their identity document must be used and the surname, given name,
middle and other names (if any) must be input in the same order as shown on the identity document. If an
applicant’s identity document contains both an English and Chinese name, both English and Chinese names
must be used. Otherwise, either English or Chinese names will be accepted. The order of priority of the
applicant’s identity document type must be strictly followed and where an individual applicant has a valid
HKID card (including both Hong Kong Residents and Hong Kong Permanent Residents), the HKID number
must be used when making an application to subscribe for Hong Kong Offer Shares in the Hong Kong Public
Offering. Similarly for corporate applicants, a LEI number must be used if an entity has a LEI certificate.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 465 –


--- page 476 ---
3. If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will be
required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID of the
asset management company or the individual fund, as appropriate, which has opened a trading account with
the broker will be required, as above.
4. The maximum number of joint applicants on FINI is capped at 4 in accordance with market practice.
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity document),
the identity document’s issuing country or jurisdiction, the identity document type; and (ii) the identity
document number, for each of the beneficial owners or, in the case(s) of joint beneficial owners, for each joint
beneficial owner. If you do not include this information, the application will be treated as being made for your
benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated as
being for your benefit and you should provide the required information in your application as stated above.
“Unlisted company” means a company with no equity 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 the HKSCC EIPO channel, and making an application under
a power of attorney, the Company and the Overall Coordinators, as the Company’s agents, have
discretion to consider whether to accept it on any conditions the Company thinks fit, including
evidence of the attorney’s authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size : 500 Shares for one board lot
Permitted number of
Hong Kong Offer
Shares for application
and amount payable on
application/successful
allotment
: Hong Kong Offer Shares are available for application
in specified board lot sizes only. Please refer to the
amount payable associated with each specified board
lot size in the table below.
The maximum Offer Price is HK$10.99 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 Offer
Shares you applied for.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 466 –


--- page 477 ---
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, the 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 Hong Kong Offer
Shares you have selected. Y ou must pay the
respective maximum amount payable on application
in full upon application for Hong Kong Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
500 5,550.42 8,000 88,806.67 70,000 777,058.39 1,000,000 11,100,834.16
1,000 11,100.84 9,000 99,907.51 80,000 888,066.73 2,000,000 22,201,668.30
1,500 16,651.25 10,000 111,008.34 90,000 999,075.07 3,000,000 33,302,502.46
2,000 22,201.66 15,000 166,512.51 100,000 1,110,083.41 4,000,000 44,403,336.60
2,500 27,752.08 20,000 222,016.68 200,000 2,220,166.84 5,000,000 55,504,170.76
3,000 33,302.50 25,000 277,520.85 300,000 3,330,250.25 6,000,000 66,605,004.90
3,500 38,852.92 30,000 333,025.02 400,000 4,440,333.65 7,000,000 77,705,839.06
4,000 44,403.34 35,000 388,529.20 500,000 5,550,417.08 8,000,000 88,806,673.20
4,500 49,953.75 40,000 444,033.37 600,000 6,660,500.49 9,000,000 99,907,507.36
5,000 55,504.16 45,000 499,537.53 700,000 7,770,583.90 10,000,000 111,008,341.50
6,000 66,605.01 50,000 555,041.71 800,000 8,880,667.32 20,000,000 222,016,683.00
7,000 77,705.85 60,000 666,050.05 900,000 9,990,750.74 25,000,000
(1) 277,520,853.76
(1) Maximum number of Hong Kong Offer Shares 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).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 467 –


--- page 478 ---
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 “— 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 authorize the Company
and/or the Overall Coordinators, as the Company’s agents, to execute any documents
for you and to do on your behalf all things necessary to register any Hong Kong
Offer Shares allocated to you in your name or in the name of HKSCC Nominees as
required by the Articles of Association, and (if you are applying through the
HKSCC EIPO channel) to deposit the allotted Hong Kong Offer Shares directly
into CCASS for the credit of your designated HKSCC Participant’s stock account on
your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the White Form
eIPO service (or as the case may be, the agreement you entered into with your
broker or custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong
Offer Shares;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 468 –


--- page 479 ---
(iv) confirm that you are aware of the restrictions on offers and sales of Shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
(v) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
(vi) agree that the Company, the Joint Sponsors, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital
Market Intermediaries, the Underwriters, any of their respective directors, officers,
employees, partners, agents, advisers and any other parties involved in the Global
Offering (the “ Relevant Persons ”), the Hong Kong Share Registrar and HKSCC
will not be liable for any information and representations not in this prospectus and
any supplement to it;
(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 the Company, the Relevant Persons, the Hong
Kong Share Registrar, HKSCC, HKSCC Nominees, the Stock Exchange, the SFC
and any other statutory regulatory or governmental bodies or otherwise as required
by laws, rules or regulations, for the purposes under “— 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 Hong Kong Share
Registrar by way of publication of the results at the time and in the manner as
specified in “— B. Publication of Results” in this section;
(x) confirm that you are aware of the situations specified in “— C. Circumstances in
which Y ou Will Not Be Allocated Hong Kong Offer Shares” in this section;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it
and the resulting contract will be governed by and construed in accordance with the
laws of Hong Kong;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 469 –


--- page 480 ---
(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 the
Company nor the Relevant Persons will breach any law inside and/or outside Hong
Kong as a result of the acceptance of your offer to purchase, or any action arising
from your rights and obligations under the terms and conditions contained in this
prospectus;
(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf
is not financed directly or indirectly by the Company, any of the directors, chief
executives, substantial shareholder(s) or existing shareholder(s) of the Company or
any of its subsidiaries or any of their respective close associates; and (b) you are not
accustomed or will not be accustomed to taking instructions from the Company, any
of the directors, chief executives, substantial shareholder(s) or existing
shareholder(s) of the Company or any of its subsidiaries or any of their respective
close associates in relation to the acquisition, disposal, voting or other disposition
of the Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that the Company and the Overall Coordinators will
rely on your declarations and representations in deciding whether or not to allocate
any Hong Kong Offer Shares to you and that you may be prosecuted for making a
false declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated
to you under the application;
(xvii) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(xviii) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirectly or through the application channel of
the White Form eIPO Service Provider or by any one as your agent or by any other
person; and
(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 or the
White Form eIPO Service Provider and (2) you have due authority to give
electronic application instructions on behalf of that other person as its agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 470 –


--- page 481 ---
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 the White Form eIPO service or HKSCC EIPO channel:
Website /H1118/H1118/H1118/H1118The designated results of allocation website
at www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ) with a
“search by ID” function.
24 hours, from 11:00
p.m. on Friday,
November 21, 2025 to
12:00 midnight on
Thursday, November
27, 2025 (Hong Kong
time)
The full list of (i) wholly or partially
successful applicants using the White
Form eIPO service and HKSCC EIPO
channel, and (ii) the number of Hong
Kong Offer Shares conditionally allotted
to them, among other things, will be
displayed on the “Allotment Results” page
of the White Form eIPO service at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ).
The Stock Exchange’s website at
www.hkexnews.hk and
the Company’s website at
www.innovationigi.com which will
provide links to the above mentioned
websites of the Hong Kong Share
Registrar.
No later than 11:00 p.m.
on Friday, November
21, 2025 (Hong Kong
time)
Telephone /H1118/H1118/H1118+852 2862 8555 — the allocation results
telephone enquiry line provided by the
Hong Kong Share Registrar
between 9:00 a.m. and
6:00 p.m. on Monday,
November 24, 2025,
Tuesday, November
25, 2025, Wednesday,
November 26, 2025
and Thursday,
November 27, 2025
(Hong Kong time)
For those applying through the HKSCC EIPO channel, you may also check with your
broker or custodian from 6:00 p.m. on Thursday, November 20, 2025 (Hong Kong
time).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 471 –


--- page 482 ---
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Thursday, November 20, 2025 (Hong Kong time) on a 24-hour basis and should report any
discrepancies on allotments to HKSCC as soon as practicable.
Allocation Announcement
The Company expects to announce the results of the final Offer Price, the level of
indications of interest in the International Offering, the level of applications in the Hong Kong
Public Offering and the basis of allocations of Hong Kong Offer Shares on the
Stock Exchange’s website at www.hkexnews.hk and the Company’s website at
www.innovationigi.com by no later than 11:00 p.m. on Friday, November 21, 2025 (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:
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 the Company or its agents exercise(s) their discretion to reject your application:
The Company, the Overall Coordinators, the Hong Kong Share Registrar and their
respective agents and nominees have full discretion to reject or accept any application, or to
accept only part of any application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not
grant permission to list the Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies the
Company of that longer period within three weeks of the closing date of the
application lists.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 472 –


--- page 483 ---
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to
“— A. Application 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;
 the Company or the Overall Coordinators believe(s) that by accepting your
application, it or the Company would violate applicable securities or other laws,
rules or regulations.
5. If there is money settlement failure for allotted Offer 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
banks 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 Offer 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 the Company, the
Relevant Persons, the Hong Kong Share Registrar and HKSCC is or will be liable if Hong
Kong Offer Shares are not allocated to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the Share certificates will be deposited into CCASS as described
below).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 473 –


--- page 484 ---
No temporary document of title will be issued in respect of the Offer Shares. No receipt
will be issued for sums paid on application.
Share certificates will only become valid evidence of title at 8:00 a.m. on Monday,
November 24, 2025 (Hong Kong time), provided that the Global Offering has become
unconditional and the right of termination described in “Underwriting” has not been exercised.
Investors who trade Shares prior to the receipt of Share certificates or the Share certificates
becoming valid do so entirely at their own risk.
The right is reserved to retain any Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of Share certificate 1
For physical share
certificates of
1,000,000 or
more Offer
Shares issued
under your own
name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Collection in person from the Hong
Kong Share Registrar, Computershare
Hong Kong Investor Services Limited,
at Shops 1712-1716, 17th Floor,
Hopewell Centre, 183 Queen’s Road
East, Wanchai, Hong Kong
Time: from 9:00 a.m. to 1:00 p.m. on
Monday, November 24, 2025
(Hong Kong time), or any other place
or date notified by the Company
If you are an individual, you must not
authorize any other person to collect
for you.
If you are a corporate applicant, your
authorized representative must bear a
letter of authorization from your
corporation stamped with your
corporation’s chop.
Both individuals and authorized
representatives must produce, at the
time of collection, evidence of
identity acceptable to the Hong Kong
Share Registrar.
Share certificate(s) will
be issued in the
name of HKSCC
Nominees, deposited
into CCASS and
credited to your
designated HKSCC
Participant’s stock
account.
No action by you is
required.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 474 –


--- page 485 ---
White Form eIPO service HKSCC EIPO channel
Note: If you do not collect your Share
certificate(s) personally within the
time above, it/they will be sent to the
address specified in your application
instructions by ordinary post at your
own risk
For physical share
certificates of
less than
1,000,000 Offer
Shares issued
under your own
name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y our Share certificate(s) will be sent to
the address specified in your
application instructions by ordinary
post at your own risk.
Date: Friday, November 21, 2025
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Monday, November 24, 2025 Subject to the
arrangement between
you and your broker
or custodian
Responsible party /H1118Hong Kong Share Registrar Y our broker or
custodian
Application
monies paid
through single
bank account /H1118/H1118
White Form e-Refund payment
instructions to your designated bank
account
Y our broker or
custodian will
arrange refund to
your designated
bank account subject
to the arrangement
between you and it.
Application
monies paid
through
multiple bank
accounts /H1118/H1118/H1118/H1118/H1118/H1118
Refund check(s) will be despatched to
the address as specified in your
application instructions by ordinary
post at your own risk.
Note:
(1) Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning
and/or Extreme Conditions in force in Hong Kong in the morning on Friday, November 21, 2025,
rendering it impossible for the relevant share certificates to be dispatched to HKSCC in a timely manner,
in which case the Company shall procure the Hong Kong 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 475 –


--- page 486 ---
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Wednesday, November 19, 2025 if, there
is:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 an “extreme conditions” announcement issued after a super typhoon (“ Extreme
Conditions ”),
(collectively, “ Severe Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Wednesday, November
19, 2025.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on
the next business day which does not have Severe Weather Signals in force at any time between
9:00 a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in “Expected Timetable” in this prospectus, an announcement will be made
and published on the Stock Exchange’s website at www.hkexnews.hk and the Company’s
website at www.innovationigi.com of the revised timetable.
If a Severe Weather Signal is hoisted on Friday, November 21, 2025, the Hong Kong
Share Registrar will make appropriate arrangements for the delivery of the Share certificates
to the CCASS Depository’s service counter so that they would be available for trading on
Monday, November 24, 2025.
If a Severe Weather Signal is hoisted on Friday, November 21, 2025, for physical share
certificates of less than 1,000,000 Offer Shares issued under your own name, the despatch of
physical Share certificate(s) will be made by ordinary post when the post office re-opens after
the Severe Weather Signal is lowered or canceled (e.g. in the afternoon of Friday, November
21, 2025 or on Monday, November 24, 2025).
If a Severe Weather Signal is hoisted on Monday, November 24, 2025, for physical share
certificates of 1,000,000 or more Offer Shares issued under your own name, physical Share
certificate(s) will be available for collection in person at the Hong Kong Share Registrar’s
office after the Severe Weather Signal is lowered or canceled (e.g. in the afternoon of Monday,
November 24, 2025 or on Tuesday, November 25, 2025).
Prospective investors should be aware that if they choose to receive physical Share
certificates issued in their own name, there may be a delay in receiving the Share
certificates.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 476 –


--- page 487 ---
F. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the
Stock Exchange and the Company complies with the stock admission requirements of HKSCC,
the Shares will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the date of commencement of dealings in the Shares on
the Stock Exchange or any other date HKSCC chooses. Settlement of transactions between
Exchange Participants (as defined in the Listing Rules) is required to take place in CCASS on
the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS.
Y ou should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the Hong Kong Share Registrar, the receiving banks and
the Relevant Persons about you in the same way as it applies to personal data about applicants
other than HKSCC Nominees. This personal data may include client identifier(s) and your
identification information. By giving application instructions to HKSCC, you acknowledge
that you have read, understood and agree to all of the terms of the Personal Information
Collection Statement below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Offer Shares, of the policies and practices of the Company and the Hong Kong
Share Registrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter
486 of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure
that personal data supplied to the Company or its agents and the Hong Kong Share Registrar
is accurate and up-to-date when applying for Hong Kong Offer Shares or transferring Hong
Kong Offer Shares into or out of their names or in procuring the services of the Hong Kong
Share Registrar.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 477 –


--- page 488 ---
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of the
Company or the Hong Kong Share Registrar to effect transfers or otherwise render their
services. It may also prevent or delay registration or transfers of Hong Kong Offer Shares
which you have successfully applied for and/or the despatch of Share certificate(s) to which
you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the Hong Kong Share Registrar immediately of any inaccuracies in the personal
data supplied.
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for
the following purposes:
 processing your application and refund check and White Form e-Refund payment
instruction(s), where applicable, verification of compliance with the terms and
application procedures set out in this prospectus and announcing results of
allocation of Hong Kong Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the
Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the Shares and identifying any
duplicate applications for the Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the Shares, such as dividends, rights
issues, bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable the
Company and the Hong Kong Share Registrar to discharge their obligations to
applicants and holders of the Shares and/or regulators and/or any other purposes to
which applicants and holders of the Shares may from time to time agree.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 478 –


--- page 489 ---
4. Transfer of personal data
Personal data held by the Company and the Hong Kong Share Registrar relating to the
applicants for and holders of Hong Kong Offer Shares will be kept confidential but the
Company and the Hong Kong Share Registrar may, to the extent necessary for achieving any
of the above purposes, disclose, obtain or transfer (whether within or outside Hong Kong) the
personal data to, from or with any of the following:
 the Company’s appointed agents such as financial advisers, receiving banks and
overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the Hong Kong Share Registrar, in each case for the purposes of
providing its services or facilities or performing its functions in accordance with its
rules or procedures and operating FINI and CCASS (including where applicants for
the Hong Kong Offer Shares request a deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the
Hong Kong Share Registrar in connection with their respective business operation;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, including for the
purpose of the Stock Exchange’s administration of the Listing Rules and the SFC’s
performance of its statutory functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their bankers, solicitors, accountants or brokers
etc.
5. Retention of personal data
The Company and the Hong Kong Share Registrar will keep the personal data of the
applicants and holders of Hong Kong Offer Shares for as long as necessary to fulfill the
purposes for which the personal data were collected. Personal data which is no longer required
will be destroyed or dealt with in accordance with the Personal Data (Privacy) Ordinance
(Chapter 486 of the Laws of Hong Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether
the Company or the Hong Kong Share Registrar hold their personal data, to obtain a copy of
that data, and to correct any data that is inaccurate. The Company and the Hong Kong Share
Registrar have the right to charge a reasonable fee for the processing of such requests. All
requests for access to data or correction of data should be addressed to the Company and the
Hong Kong Share Registrar, at their registered address disclosed in “Corporate Information”
in this prospectus or as notified from time to time, for the attention of the company secretary,
or the Hong Kong Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 479 –


--- page 490 ---
The following is the text of a report set out on pages I-1 to I-106, received from the
Company’ s reporting accountants, Deloitte Touche Tohmatsu, Certified Public Accountants,
Hong Kong, for the purpose of incorporation in this document.
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF CHUANGXIN INDUSTRIES HOLDINGS LIMITED, CHINA
INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LIMITED
AND HUATAI FINANCIAL HOLDINGS (HONG KONG) LIMITED
Introduction
We report on the historical financial information of Chuangxin Industries Holdings
Limited (the “Company”) and its subsidiaries (together, the “Group”) set out on pages I-4 to
I-106, which comprises the consolidated statements of financial position of the Group as at 31
December 2022, 2023 and 2024, and 31 May 2025, the statements of financial position of the
Company as at 31 December 2023 and 2024, and 31 May 2025, and 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 three years
ended 31 December 2022, 2023 and 2024 and the five months ended 31 May 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-106 forms an integral part of this report, which has been prepared for
inclusion in the prospectus of the Company dated 14 November 2025 (the “Document”) 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
and presentation set out in note 2 to the Historical Financial Information, and for such internal
control as the directors of the Company determine is necessary to enable the preparation of the
Historical Financial Information that is free from material misstatement, whether due to fraud
or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 “Accountants’ Reports on Historical
Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified
Public Accountants (the “HKICPA”). This standard requires that we comply with ethical
standards and plan and perform our work to obtain reasonable assurance about whether the
Historical Financial Information is free from material misstatement.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 491 ---
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material misstatement
of the Historical Financial Information, whether due to fraud or error. In making those risk
assessments, the reporting accountants consider internal control relevant to the entity’s
preparation of the Historical Financial Information that gives a true and fair view in accordance
with the basis of preparation and presentation set out in note 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 of the Company, 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 31 December
2022, 2023 and 2024, and 31 May 2025, of the Company’s financial position as at 31 December
2023 and 2024 and 31 May 2025 and of the Group’s financial performance and cash flows for
the Track Record Period in accordance with the basis of preparation and presentation set out
in note 2 to the Historical Financial Information.
Review of stub period comparative financial information
We have reviewed the stub period comparative 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 five months ended May 31 2024 and other explanatory information (the “Stub Period
Comparative Financial Information”). The directors of the Company are responsible for the
preparation and presentation of the Stub Period Comparative Financial Information in
accordance with the basis of preparation and presentation set out in Note 2 to the Historical
Financial Information. Our responsibility is to express a conclusion on the Stub Period
Comparative Financial Information based on our review. We conducted our review in
accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim
Financial Information Performed by the Independent Auditor of the Entity” issued by the
HKICPA. A review consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Hong Kong Standards
on Auditing and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. Accordingly, we do not
express an audit opinion. Based on our review, nothing has come to our attention that causes
us to believe that the Stub Period Comparative Financial Information, for the purposes of the
accountants’ report, is not prepared, in all material respects, in accordance with the basis of
preparation and presentation set out in Note 2 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 492 ---
Report on matters under the Rules Governing the Listing of Securities on the Stock
Exchange and the Companies (Winding Up and Miscellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to note 13 to the Historical Financial Information which contains information
about the dividends declared and paid by the group entities in respect of the Track Record
Period and states that no dividend was declared or paid by the Company since its incorporation.
Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong
14 November 2025
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 493 ---
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
accountants’ 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 IFRS Accounting Standards issued by the
International Accounting Standards Board (the “IASB”) and were audited by us in accordance
with Hong Kong Standards on Auditing issued by the HKICPA (“Underlying Financial
Statements”).
The Historical Financial Information is presented in Renminbi (“RMB”) and all values
are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 494 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Y ear ended 31 December
Five Months ended
31 May
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/H1118/H1118/H1118/H1118/H11186 13,489,726 13,814,657 15,163,182 5,883,228 7,213,526
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,448,584) (11,478,369) (10,886,722) (4,242,896) (5,780,865)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,041,142 2,336,288 4,276,460 1,640,332 1,432,661
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 93,503 97,948 55,243 19,792 22,807
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,500) (20,947) (11,172) (2,528) (6,863)
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (16,438) – (4,736)
Other gains and losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 205,962 5,245 18,471 10,845 6,888
Selling and marketing expenses /H1118/H1118 (2,834) (313) (563) (120) (861)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118(218,619) (206,009) (279,018) (101,197) (145,594)
Impairment (losses) gains under
expected credit loss (“ECL”)
model, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118(2,126) (14) 412 400 793
Share of results of joint ventures /H1118 – – (851) – (7,005)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 (1,061,869) (939,706) (761,647) (366,468) (262,444)
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 1,047,659 1,272,492 3,280,897 1,201,056 1,035,646
Income tax expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 (134,757) (191,860) (651,377) (201,620) (180,195)
Profit and total comprehensive
income for the year/period /H1118/H1118/H1118 912,902 1,080,632 2,629,520 999,436 855,451
Profit and total comprehensive
income for the year/period
attributable to:
Owners of the Company /H1118/H1118/H1118/H1118/H1118 881,286 1,003,572 2,056,227 879,941 755,955
Non-controlling interests /H1118/H1118/H1118/H1118/H1118 31,616 77,060 573,293 119,495 99,496
912,902 1,080,632 2,629,520 999,436 855,451
Earnings per share 14
– Basic (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.59 0.67 1.37 0.59 0.50
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 495 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
As at
31 May
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H111815 6,394,185 6,686,105 9,152,466 10,741,958
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 2,262,694 2,233,194 928,604 1,083,733
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 3,359,808 3,288,524 3,217,685 3,187,859
Prepayments on acquisition of
long-lived assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,687 98,870 1,151,436 746,964
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 – – 2,303 2,292
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 7,104 5,608 83,126 –
12,071,478 12,312,301 14,535,620 15,762,806
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 1,761,037 1,255,138 1,577,704 2,253,286
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 40,232 96,131 39,140 84,755
Receivables at fair value through
other comprehensive income
(“FVTOCI”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 29,102 62,678 485,699 90,972
Prepayments and other receivables /H1118/H111822 331,176 181,666 823,813 989,316
Financial assets at fair value through
profit or loss (“FVTPL”) /H1118/H1118/H1118/H1118/H1118/H1118/H111823 30,044 – – 699,900
Amounts due from related parties /H1118/H1118/H111824 4,260,136 3,752,415 – –
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,919 – – –
Restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 2,798,680 1,309,070 681,440 591,314
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 158,909 584,126 176,401 470,857
9,418,235 7,241,224 3,784,197 5,180,400
Current liabilities
Trade, bills and other payables /H1118/H1118/H1118/H1118/H111826 6,736,129 4,698,653 2,945,451 3,755,878
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 26,336 6,979 372,807 344,055
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 280,630 346,554 10,698 46,539
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,564 2,677 8,790 12,532
Bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H111829 8,342,273 4,250,981 4,941,606 6,676,496
Amounts due to related parties /H1118/H1118/H1118/H1118/H111830 317,191 416,131 – –
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 159,487 458,908 66,630
15,705,123 9,881,462 8,738,260 10,902,130
Net current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,286,888) (2,640,238) (4,954,063) (5,721,730)
Total assets less current liabilities /H1118/H1118 5,784,590 9,672,063 9,581,557 10,041,076
Non-current liabilities
Deferred tax liabilities
/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 20,465 17,281 – 60,262
Bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H111829 2,488,003 5,030,826 6,006,637 5,844,895
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 655,990 700,982 749,556 702,595
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 673,967 459,842 417,924 172,849
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,939 14,262 81,172 78,702
3,855,364 6,223,193 7,255,289 6,859,303
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,929,226 3,448,870 2,326,268 3,181,773
Capital and reserves
Paid-in/share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 2,017,901 2,070,551 –* 54
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 (327,936) 879,808 1,254,713 2,010,668
Equity attributable to owners of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,689,965 2,950,359 1,254,713 2,010,722
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 239,261 498,511 1,071,555 1,171,051
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,929,226 3,448,870 2,326,268 3,181,773
* Less than RMB1,000.
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 496 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
As at
31 May
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H111815 – – 3,129
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 – – 13,882
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 – 2,303 2,292
– 2,303 19,303
Current assets
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 865 28
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 – 5,789 11,524
Amount due from a related party /H1118/H1118/H1118/H1118/H111841 –* –* –
–* 6,654 11,552
Current liabilities
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 – 18,627 13,695
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 – – 5,465
Amount due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841 – 8,098 26,869
– 26,725 46,029
Net current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–* (20,071) (34,477)
Total assets less current liabilities /H1118/H1118/H1118 –* (17,768) (15,174)
Non-current liability
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 – – 9,378
– – 9,378
Net liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–* (17,768) (24,552)
Capital and reserves
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 –* –* 54
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 – (17,768) (24,606)
Total deficit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–* (17,768) (24,552)
* Less than RMB1,000.
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 497 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Paid-in/
share
capital
Statutory
surplus
reserve
Safety
fund
reserve
Other
reserve
(Accumulated
losses) retained
Earnings Sub-total
Non-
controlling
Interests Total
(note 31) (note 32) (note 32) (note 33)
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 /H1118/H1118/H11182,017,901 156,217 22,438 – (1,387,877) 808,679 207,645 1,016,324
Profit and total
comprehensive
income for the year /H1118 –––– 881,286 881,286 31,616 912,902
Transfer to statutory
surplus reserve /H1118/H1118/H1118 – 3,617 – – (3,617) – – –
Transfer to safety
funds reserve, net of
utilisation /H1118/H1118/H1118/H1118/H1118/H1118– – 29,443 – (29,443) – – –
At 31 December 2022 /H11182,017,901 159,834 51,881 – (539,651) 1,689,965 239,261 1,929,226
Profit and total
comprehensive
income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1,003,572 1,003,572 77,060 1,080,632
Capital injection from
a non-controlling
interest to Shandong
Chuangyuan New
Material Technology
Co., Ltd.* (௴๕
ʮ
̡) (“Shandong
Chuangyuan”)
(note 15) /H1118/H1118/H1118/H1118/H1118/H111852,650 – – 204,172 – 256,822 182,190 439,012
Issue of one ordinary
share by the
Company /H1118/H1118/H1118/H1118/H1118/H1118– * * ––– –– –– * *
Transfer to statutory
surplus reserve /H1118/H1118/H1118 – 11,353 – – (11,353) – – –
Transfer to safety
funds reserve, net of
utilisation /H1118/H1118/H1118/H1118/H1118/H1118– – 16,753 – (16,753) – – –
At 31 December 2023 /H11182,070,551 171,187 68,634 204,172 435,815 2,950,359 498,511 3,448,870
Profit and total
comprehensive
income for the year /H1118 –––– 2,056,227 2,056,227 573,293 2,629,520
Capital injection from
Shandong Innovation
Group Co., Ltd* ( ʆ
ʮ
̡) (“Innovation
Group”) to
Shandong
Chuangyuan
(note a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 192,699 – 192,699 136,701 329,400
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 498 ---
Paid-in/
share
capital
Statutory
surplus
reserve
Safety
fund
reserve
Other
reserve
(Accumulated
losses) retained
Earnings Sub-total
Non-
controlling
Interests Total
(note 31) (note 32) (note 32) (note 33)
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Acquisition of
Shandong
Chuangyuan /H1118/H1118/H1118/H1118(70,551) – – (680,821) – (751,372) – (751,372)
Capital injection to
Inner Mongolia
Chuangyuan Metal
Co., Ltd* ( ʫႆ̚௴
ʮ̡)
(“Inner Mongolia
Chuangyuan”) as
part of the
Reorganisation (as
defined in note 2)
(note 2) /H1118/H1118/H1118/H1118/H1118/H1118/H111832,32 0––– – 32,320 – 32,320
Dividend declared and
paid (note 13) /H1118/H1118/H1118/H1118 –––– (193,050) (193,050) (136,950) (330,000)
Acquisition of 99%
equity interest in
Inner Mongolia
Chuangyuan /H1118/H1118/H1118/H1118(2,000,000) – – (1,000,000) – (3,000,000) – (3,000,000)
Acquisition of 1%
equity interest in
Inner Mongolia
Chuangyuan /H1118/H1118/H1118/H1118/H1118(32,320) – – (150) – (32,470) – (32,470)
Transfer to statutory
surplus reserve /H1118/H1118/H1118 – 214,442 – – (214,442) – – –
Transfer to safety
funds reserve, net of
utilisation /H1118/H1118/H1118/H1118/H1118/H1118– – 27,709 – (27,709) – – –
At 31 December 2024 /H1118 –** 385,629 96,343 (1,284,100) 2,056,841 1,254,713 1,071,555 2,326,268
Profit and total
comprehensive
income for the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 755,955 755,955 99,496 855,451
Issue of ordinary
shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 4––– – 5 4 – 5 4
Transfer to statutory
surplus reserve /H1118/H1118/H1118 – 61,209 – – (61,209) – – –
Transfer to safety
funds reserve, net of
utilisation /H1118/H1118/H1118/H1118/H1118/H1118– – 2,354 – (2,354) – – –
At 31 May 2025 /H1118/H1118/H1118/H111854 446,838 98,697 (1,284,100) 2,749,233 2,010,722 1,171,051 3,181,773
At 31 December 2023 /H11182,070,551 171,187 68,634 204,172 435,815 2,950,359 498,511 3,448,870
Profit and total
comprehensive
income for the
period (unaudited) /H1118/H1118 –––– 879,941 879,941 119,495 999,436
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 499 ---
Paid-in/
share
capital
Statutory
surplus
reserve
Safety
fund
reserve
Other
reserve
(Accumulated
losses) retained
Earnings Sub-total
Non-
controlling
Interests Total
(note 31) (note 32) (note 32) (note 33)
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Capital injection from
Innovation Group to
Shandong
Chuangyuan (note a)
(unaudited) /H1118/H1118/H1118/H1118/H1118– – – 192,699 – 192,699 136,701 329,400
Acquisition of
Shandong
Chuangyuan /H1118/H1118/H1118/H1118/H1118(70,551) – – (680,821) – (751,372) – (751,372)
Dividend declared and
paid (note 13)
(unaudited) /H1118/H1118/H1118/H1118/H1118–––– (193,050) (193,050) (136,950) (330,000)
Transfer to statutory
surplus reserve
(unaudited) /H1118/H1118/H1118/H1118/H1118– 89,331 – – (89,331) – – –
Transfer to safety
funds reserve, net of
utilisation
(unaudited) /H1118/H1118/H1118/H1118/H1118– – 14,696 – (14,696) – – –
At 31 May 2024
(unaudited) /H1118/H1118/H1118/H1118/H11182,000,000 260,518 83,330 (283,950) 1,018,679 3,078,577 617,757 3,696,334
* English name is for identification purpose only
** Less than RMB1,000.
Note:
(a) On 12 January 2024, Innovation Group made capital injection into Shandong Chuangyuan in form of cash.
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 500 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December Five Months ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
OPERATING ACTIVITIES
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,047,659 1,272,492 3,280,897 1,201,056 1,035,646
Adjustments for:
(Gain) loss on disposal of
property, plant and equipment /H1118 (2,167) (1,690) (8,699) (8,582) 56
Gain on disposal of intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(180,749) ––––
Loss on disposal of land use
right /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (10)
Depreciation of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118462,642 546,932 617,124 233,146 323,450
Depreciation of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118201,817 162,849 71,430 52,524 18,021
Amortisation of intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874,981 71,284 71,587 29,700 29,826
Impairment loss on property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H111815,316 19,084 11,246 5,767 9,559
Write-down of inventories /H1118/H1118/H1118/H1118/H11185,440 ––––
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,061,869 939,706 761,647 366,468 262,444
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(90,116) (48,878) (18,526) (9,315) (2,037)
Share of results of joint
ventures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 851 – 7,005
Gain on disposal of derivative
financial instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118(23,702) ––––
Impairment loss under ECL
model, net of reversal /H1118/H1118/H1118/H1118/H1118/H11182,126 14 (412) (400) (793)
Fair value changes of financial
assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(44) 4 4–––
Realised gain from financial
assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(93) (99) – – (83)
Net foreign exchange losses
(gains) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878 11 295 – (496)
Loss (gain) on disposal of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 728 – (5,174)
Operating cash flows before
movements in
working capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,575,057 2,961,749 4,788,168 1,870,364 1,677,414
(Increase) decrease in inventories /H1118/H1118(347,705) 505,899 (322,566) 157,868 (675,582)
Decrease (increase) in trade
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888,052 (55,739) 56,861 45,216 (45,964)
Increase in receivables at FVTOCI /H1118 (13,290) (38,342) (729,629) (281,792) (38,126)
Decrease (increase) in prepayments
and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118131,535 129,919 (667,689) (76,254) 207,416
(Decrease) increase in trade and
bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(240,219) 1,102,211 208,066 166,782 72,951
(Decrease) increase in contract
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(32,735) (19,357) 365,828 312,597 (28,752)
(Decrease) increase in other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(118,799) (4,422) 136,462 (20,369) 91,319
Increase (decrease) in deferred
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,940 (2,564) 73,023 28,762 1,272
Cash generated from operations /H1118 2,052,836 4,579,354 3,908,524 2,203,174 1,261,948
Income taxes refund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,246 53,465 – – –
Income taxes paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(227,943) (78,607) (446,755) (212,262) (429,085)
NET CASH FROM OPERATING
ACTIVITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,869,139 4,554,212 3,461,769 1,990,912 832,863
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 501 ---
Y ear ended 31 December Five Months ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
INVESTING ACTIVITIES
Payments for acquisition of
property, plant and equipment /H1118/H1118(956,322) (452,479) (3,102,539) (519,877) (1,301,498)
Payments for acquisition of
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(142,862) (76,010) (748) – –
Payments for acquisition of
right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(268,620) (17,581) (4,110) (2,281) (36,088)
Payments for rental deposit /H1118/H1118/H1118/H1118/H1118– – (2,303) – –
Proceeds on disposal of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,438 2,441 97,884 97,459 2,472
Proceeds on disposal of intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118354,717 ––––
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111896,865 89,617 25,224 13,152 1,562
Withdrawal of restricted bank
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,942,291 3,947,661 2,758,927 1,780,676 1,421,043
Placement of restricted bank
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,829,166) (2,499,530) (2,137,995) (1,253,750) (1,330,442)
Purchases of financial assets at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(594,000) (65,000) – – (999,900)
Proceeds from disposal of financial
assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118564,093 95,099 – – 300,083
Purchases of derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(30,842) ––––
Proceeds from disposal of
derivative financial instruments /H1118 54,544 ––––
Repayments received from a
related party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118228,551 1,002,927 1,985,146 1,620,616 –
Advance to a related party /H1118/H1118/H1118/H1118/H1118/H1118(246,240) (495,049) (1,983,025) (1,560,214) –
Repayments received from a third
party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118205,000 20,000 75,140 16,550 –
Advance to a third party /H1118/H1118/H1118/H1118/H1118/H1118/H1118(50,000) – (44,400) (21,427) –
Investment deposit received from a
third party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 80,000 (80,000) – –
Net cash outflow on acquisition of
a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (13,557) – –
Net cash outflow on disposal of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (157) – –
NET CASH (USED IN) FROM
INVESTING ACTIVITIES /H1118/H1118/H1118(664,553) 1,632,096 (2,426,513) 170,904 (1,942,768)
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 502 ---
Y ear ended 31 December Five Months ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
FINANCING ACTIVITIES
Dividends paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (330,000) (330,000) –
New borrowings raised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118620,000 4,918,000 4,238,690 695,294 4,330,819
Repayments of borrowings /H1118/H1118/H1118/H1118/H1118/H1118(1,519,018) (6,538,542) (2,386,513) (877,585) (2,417,705)
Proceeds from notes financing /H1118/H1118/H1118/H11183,765,131 3,704,439 1,220,317 430,000 500,000
Payments for notes financing /H1118/H1118/H1118/H1118(2,504,000) (5,534,030) (3,237,060) (1,587,060) (110,000)
Payments of lease liabilities /H1118/H1118/H1118/H1118/H1118(346,948) (232,786) (379,862) (379,862) (359,049)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(899,456) (824,701) (671,772) (322,139) (286,613)
Payments to a finance provider /H1118/H1118/H1118(722,787) (1,298,975) (230,691) (139,293) –
Loans raised from related parties /H1118/H1118320,300 1,276,029 1,012,385 135,179 –
Repayments of loans from related
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(205,267) (1,194,325) (1,428,516) (520,986) –
Loans raised from third parties /H1118/H1118/H111873,000 64,300 471,982 194,109 207,185
Repayments of loans from third
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,000) (100,500) (49,200) (30,800) (457,550)
Capital injection from Innovation
Group to Shandong Chuangyuan /H1118 – – 329,400 329,400 –
Capital injection to Inner Mongolia
Chuangyuan as part of the
Reorganisation (as defined in
Appendix I of this document) /H1118/H1118/H1118 – – 32,320 – –
Acquire 1% of Inner Mongolia
Chuangyuan from Carnaby
Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (32,470) – –
Payments of issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,991) – (2,780)
Proceeds from issue of ordinary
shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 5 4
NET CASH (USED IN) FROM
FINANCING ACTIVITIES /H1118/H1118/H1118(1,434,045) (5,761,091) (1,442,981) (2,403,743) 1,404,361
NET (DECREASE) INCREASE
IN CASH AND CASH
EQUIV ALENTS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(229,459) 425,217 (407,725) (241,927) 294,456
CASH AND CASH
EQUIV ALENTS AT
BEGINNING OF THE
YEAR/PERIOD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118388,368 158,909 584,126 584,126 176,401
CASH AND CASH
EQUIV ALENTS AT END OF
THE YEAR/PERIOD /H1118/H1118/H1118/H1118/H1118/H1118/H1118158,909 584,126 176,401 342,199 470,857
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 503 ---
NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. GENERAL INFORMATION
Chuangxin Industries Holdings Limited (the “Company”) is an exempted limited liability company
incorporated in the Cayman Islands on 4 July 2023. The addresses of the registered office and principal place of
business of the Company are disclosed in the section “Corporate Information” of the Document.
Pursuant to the Reorganisation (as defined and detailed in note 2) completed on 23 October 2024, the Company
became the holding company of the entities now comprising the Group since then.
The Company is an investment holding company. During the Track Record Period, the Company, together with
its subsidiaries as set out in note 43 (collectively referred to as the “Group”) are principally engaged in production
and sales of electrolytic aluminum and alumina in the People’s Republic of China (“PRC”), focusing on alumina
refining and aluminum smelting within the upstream of the aluminum industry chain.
Mr. Cui Lixin, the founder of the Group, as at 31 December 2022 and 2023, owned effectively 71.82% equity
interest of the Group through Innovation Group and owned 100% equity interest of the Company upon completion
of the Reorganisation (as defined in note 2) since October 2024. Accordingly, Mr. Cui Lixin is the ultimate
controlling shareholder (“Mr. Cui” or the “Controlling Shareholder”) of the Group prior to and upon completion of
the Reorganisation (as defined in note 2).
The functional currency of the Company and its subsidiaries is Renminbi (“RMB”), which is the same as the
presentation currency of the Historical Financial Information.
2. GROUP REORGANISATION AND BASIS OF PREPARATION AND PRESENTATION OF
HISTORICAL FINANCIAL INFORMATION
The Historical Financial Information has been prepared based on the accounting policies set out in note 4
which conform with IFRS Accounting Standards and the principle of merger accounting conventions applicable for
group reorganisation (details are set out below).
During the Track Record Period, Innovation Group is owned by Mr. Cui as to 71.82%, while the remaining
minority interests totaling 28.18% were held by 3 individuals.
Historically, the Group’s principal business is carried out by Inner Mongolia Chuangyuan, Shandong
Chuangyuan and other subsidiaries. In preparation for the initial listing of shares of the Company on the Stock
Exchange of Hong Kong Limited (the “Stock Exchange”) (the “Listing”), the Group underwent a series of group
reorganisation (the “Reorganisation”) following the incorporation of the Company as described below.
The major steps of the Reorganisation comprised the following:
On 28 June 2023, Mr. Cui incorporated a wholly-owned special purpose vehicle, Bloomsbury Holding Limited
(“Bloomsbury Holding”), in the British Virgin Islands (“BVI”) for purpose of Reorganisation.
On 4 July 2023, the Company was incorporated in the Cayman Islands as an exempted company with limited
liability. Upon incorporation, the Company allotted and issued one ordinary share with a par value of United States
Dollars (“USD”) 0.0001 to ICS Corporate Services (Cayman) Limited, and ICS Corporate Services (Cayman)
Limited subsequently transferred such share to Bloomsbury Holding at nominal value on the same day. Upon
completion of such share transfer, the Company became a wholly owned subsidiary of Bloomsbury Holding.
On 15 September 2023, Phineas Management Limited (“Phineas Management”) was incorporated by the
Company in Hong Kong. Upon incorporation, Phineas Management allotted and issued one ordinary share to the
Company at HKD1 and has been wholly owned by the Company.
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 504 ---
On 29 January 2024 and 29 March 2024, Inner Mongolia Chuangyuan acquired 58.5% equity interests in
aggregate of Shandong Chuangyuan from Innovation Group in stages at a total consideration of RMB751,372,000.
Such consideration has been settled in full through offsetting the receivables of an equivalent amount owed by Inner
Mongolia Chuangyuan to Innovation Group. The 41.5% equity interest of Shandong Chuangyuan continued to be held
by Innovation Group and was accounted for as the Group’s non-controlling interests.
On 9 May 2024, Phineas Management established a wholly foreign-owned enterprise, Beijing Chuangyuan
Zhixin Trading Co., Ltd.* (ʮ̡) (“Beijing Chuangyuan”), as a limited liability company in
the PRC.
On 30 August 2024, Carnaby Management Limited (“Carnaby Management”), an independent third party,
entered into a capital subscription agreement with Innovation Group and Inner Mongolia Chuangyuan, pursuant to
which Carnaby Management subscribed for an increased registered share capital of RMB32,320,000 in Inner
Mongolia Chuangyuan. Such capital contribution has been fully paid on 13 September 2024. Upon completion of the
capital contribution, Inner Mongolia Chuangyuan was held by Innovation Group and Carnaby Management as to 99%
and 1%, respectively.
On 9 October 2024, Beijing Chuangyuan entered into a share transfer agreement with Innovation Group and
Inner Mongolia Chuangyuan, pursuant to which Innovation Group agreed to transfer 99% equity interest in Inner
Mongolia Chuangyuan to Beijing Chuangyuan at a consideration of RMB3,000,000,000. Such consideration has been
settled in full through offsetting the receivables of an equivalent amount owed by Innovation Group to Beijing
Chuangyuan. Upon completion of the capital increase, Inner Mongolia Chuangyuan was held by Beijing Chuangyuan
and Carnaby Management as to 99% and 1%, respectively.
On 15 October 2024, Beijing Chuangyuan entered into a share transfer agreement with Carnaby Management,
pursuant to which Beijing Chuangyuan acquired the 1% equity interest held by Carnaby Management in Inner
Mongolia Chuangyuan at a cash consideration of RMB32,470,000. Such consideration has been fully settled on 23
October 2024. Upon completion of the share transfer, Inner Mongolia Chuangyuan is held as to 100% by Beijing
Chuangyuan and became an indirect wholly owned subsidiary of the Company.
Details of the Reorganisation has been more fully explained in the section headed “History, Reorganisation and
Corporate Structure” in the Document.
The Reorganisation was in substance a continuation of an existing group before the Reorganisation, which
comprised Inner Mongolia Chuangyuan and its subsidiaries (including Shandong Chuangyuan). Reorganisation
involved insertion of holding companies to Inner Mongolia Chuangyuan and its subsidiaries (including Shandong
Chuangyuan) which were all entities under common control of Mr. Cui before and after the Reorganisation.
Accordingly, the Historical Financial Information before completion of Reorganisation has been prepared on a
combined basis by applying the principle of merger accounting as if the Reorganisation had been completed at the
beginning of the Track Record Period.
The combined statements of profit or loss and other comprehensive income, combined statements of changes
in equity and combined statements of cash flows for the year ended 31 December 2022 and 2023, including the
results, changes in equity and cash flows of the entities now comprising the Group, as if the Company had always
been the holding company of the Group and the group structure upon completion of the Reorganisation had been in
existence throughout the Track Record Period, or since their respective date of establishment, incorporation or
acquisition, where this is a shorter period.
The combined statements of financial position of the Group as at 31 December 2022 and 2023 have been
prepared to present the assets and liabilities of the entities now comprising the Group, as if the Company had always
been the holding company of the Group and the group structure upon completion of the Reorganisation had been in
existence at those dates taking into account the respective dates of establishment, incorporation or acquisition, where
applicable.
No statutory financial statements of the Company has been prepared since its date of incorporate as it is
incorporated in a jurisdiction where there are no statutory audit requirements.
APPENDIX I ACCOUNTANTS’ REPORT
– I-15 –


--- page 505 ---
Going Concern Assumption
The management of the Group have given careful consideration to the going concern of the Group in light of
the fact that as at 31 May 2025, the Group’s current liabilities exceeded its current assets by RMB5,721,730,000. In
addition, as at 31 May 2025, the Group had capital commitments contracted for but not provided in the Historical
Financial Information amounting to RMB1,269,805,000, as disclosed in note 39.
In light of the above, the management of the Group has prepared the cash flow forecast covering the period
for the next twelve months after the date of issue of this Historical Financial Information for the purpose of going
concern assessment. The Group’s cashflow forecast is largely dependent on cashflow to be generated from the
Group’s future operation. However, since the Group’s business is highly sensitive to fluctuations in the prices of its
products (including electrolytic aluminum and alumina) and its raw materials (including bauxite, coal, carbon anodes
and alumina), in any case that the actual selling price and actual purchase price of raw materials which might be lower
or higher than such adopted in the forecast, the actual cashflow generated from its operation might be negatively
affected, causing the Group’s financial pressure, to a certain extent, to repay its debt as they fall due in the foreseeable
future.
Nevertheless, the management of the Group, according to the Group’s level of profitability, together with their
historical successful experience, is confident that they can successfully seek for alternative financing, refinancing,
extension of due dates of the relevant debts and/or drawdown from unutilised credit facilities, which enables the
Group to continue as a going concern. Currently, the Group has been continuously negotiating with banks and
financial institutions to seek for alternative financing, refinancing and/or extension of due dates of the relevant debts,
details and status of which are set out in note 29.
Taking into accounts the available cash and cash equivalents on hand, the maturity profile of the bank and other
borrowings, the status of alternative financing, refinancing and/or extension of due dates of the relevant debts, the
anticipated cash flow from the operations, together with the other financial resources available to the Group; the
Group has sufficient working capital for its present requirements, that is for at least the next twelve months
commencing from the date of issue of the Historical Financial Information. Hence, the Historical Financial
Information have been prepared on a going concern basis.
3. APPLICATION OF NEW AND AMENDMENTS TO IFRS ACCOUNTING STANDARDS
For the purpose of preparing and presenting the Historical Financial Information for the Track Record Period,
the Group has consistently applied the accounting policies which conform with IFRS Accounting Standards, which
are effective for the Group’s accounting period beginning on 1 January 2025, throughout the Track Record Period.
New and amendments to IFRS Accounting Standards in issue but not yet effective
At the date of this report, the following new and amendments to IFRS Accounting Standards have been issued
which are not yet effective:
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
2
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Contracts Referencing Nature-dependent Electricity 2
Amendments to IFRS 10 and IAS 28 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Sale or Contribution of Assets between an Investor
and its Associate or Joint V enture 1
Amendments to IFRS Accounting Standards /H1118/H1118/H1118/H1118/H1118Annual Improvements to IFRS Accounting Standards
– V olume 11 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 3
1 Effective for annual periods beginning on or after a date to be determined
2 Effective for annual periods beginning on or after 1 January 2026
3 Effective for annual periods beginning on or after 1 January 2027
Except for the new IFRS Accounting Standard mentioned below, the directors of the Company anticipate that
the application of all amendments to IFRS Accounting Standards will have no material impact on the Group’s
consolidated financial statements in the foreseeable future.
APPENDIX I ACCOUNTANTS’ REPORT
– I-16 –


--- page 506 ---
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 Presentation and Disclosure in Financial Statements , which sets out requirements on presentation and
disclosures in financial statements, will replace IAS 1 Presentation of Financial Statements . This new IFRS
Accounting Standard, while carrying forward many of the requirements in IAS 1, introduces new requirements to
present specified categories and defined subtotals in the statement of profit or loss; provide disclosures on
management-defined performance measures in the notes to the financial statements and improve aggregation and
disaggregation of information to be disclosed in the financial statements. In addition, some IAS 1 paragraphs have
been moved to IAS 8 and IFRS 7. Minor amendments to IAS 7 Statement of Cash Flows and IAS 33 Earnings per
Share are also made.
IFRS 18, and amendments to other standards, will be effective for annual periods beginning on or after
1 January 2027, with early application permitted. The application of the new standard is expected to affect the
presentation of the statement of profit or loss and disclosures in the future financial statements. The application of
IFRS 18 has no impact on the Group’s financial positions and performance, but has impact on presentation of the
consolidated statement of profit or loss and other comprehensive income.
4. MATERIAL ACCOUNTING POLICY INFORMATION
The Historical Financial Information has been prepared in accordance with the following accounting policies
which conform with IFRS Accounting Standards issued by the IASB. For the purpose of preparation of the Historical
Financial Information, information is considered material if such information is reasonably expected to influence
decisions made by primary users. In addition, the Historical Financial Information includes applicable disclosures
required by the Rules Governing the Listing of Securities on The Stock Exchange and by the Hong Kong Companies
Ordinance.
Basis of consolidation
The Historical Financial Information incorporates the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is achieved when the Company:
 has power over the investee;
 is exposed, or has rights, to variable returns from its involvement with the investee; and
 has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of
during the Track Record Period are included in the consolidated statements of profit or loss and other comprehensive
income from the date the Group gains control until the date when the Group ceases to control the subsidiary.
Profit or loss and each item of other comprehensive income are attributed to the owners of the Company and
to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the
Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit
balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies in line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.
Non-controlling interests in subsidiaries are presented separately from the Group’s equity therein, which
represent present ownership interests entitling their holders to a proportionate share of net assets of the relevant
subsidiaries upon liquidation.
APPENDIX I ACCOUNTANTS’ REPORT
– I-17 –


--- page 507 ---
Merger accounting for business consolidation involving businesses under common control
The Historical Financial Information incorporates the financial statements items of the combining businesses
in which the common control consolidation occurs as if they had been combined from the date when the combining
businesses first came under the control of the controlling party.
The net assets of the combining businesses are consolidated using the existing book values from the controlling
party’s perspective. No amount is recognised in respect of goodwill or bargain purchase gain at the time of common
control consolidation.
Expenditure incurred in relation to a common control consolidation that is to be accounted for by using merger
accounting is recognised as an expense in the period in which it is incurred.
The combined statements of profit or loss and other comprehensive income include the results of each of the
combining businesses from the earliest date presented or since the date when the combining businesses first came
under the common control, where there is a shorter period.
The comparative amounts in the Historical Financial Information are presented as if the businesses had been
combined at the beginning of the previous reporting period or when they first came under common control, whichever
is shorter.
Changes in the Group’s interests in existing subsidiaries
When the Group loses control of a subsidiary, the assets and liabilities of that subsidiary and non-controlling
interests (if any) are derecognised. A gain or loss is recognised in profit or loss and is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest
and (ii) the carrying amount of the assets (including goodwill), and liabilities of the subsidiary attributable to the
owners of the Company. All amounts previously recognised in other comprehensive income in relation to that
subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary
(i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable
IFRS accounting standards).
Business combinations or asset acquisitions
Asset acquisitions
When the Group acquires a group of assets and liabilities that do not constitute a business, the Group identifies
and recognises the individual identifiable assets acquired and liabilities assumed by allocating the purchase price first
to financial assets/financial liabilities at the respective fair values, the remaining balance of the purchase price is then
allocated to the other identifiable assets and liabilities on the basis of their relative fair values at the date of purchase.
Such a transaction does not give rise to goodwill or bargain purchase gain.
Business combinations
A business is an integrated set of activities and assets which includes an input and a substantive process that
together significantly contribute to the ability to create outputs. The acquired processes are considered substantive
if they are critical to the ability to continue producing outputs, including an organised workforce with the necessary
skills, knowledge, or experience to perform the related processes or they significantly contribute to the ability to
continue producing outputs and are considered unique or scarce or cannot be replaced without significant cost, effort,
or delay in the ability to continue producing outputs.
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a
business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of
the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the
equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally
recognised in profit or loss as incurred.
APPENDIX I ACCOUNTANTS’ REPORT
– I-18 –


--- page 508 ---
Investment in a joint venture
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties
sharing control.
The results and assets and liabilities of a joint venture is incorporated in these consolidated financial
statements using the equity method of accounting. The financial statements of a joint venture used for equity
accounting purposes are prepared using uniform accounting policies as those of the Group for like transactions and
events in similar circumstances. Under the equity method, an investment in a joint venture is initially recognised in
the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group’s share of the
profit or loss and other comprehensive income of a joint venture. When the Group’s share of losses of a joint venture
exceeds the Group’s interest in that joint venture (which includes any long-term interests that, in substance, form part
of the Group’s net investment in the joint venture), the Group discontinues recognising its share of further losses.
Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or
made payments on behalf of the joint venture.
An investment in a joint venture is accounted for using the equity method from the date on which the investee
becomes a joint venture.
The Group assesses whether there is an objective evidence that the interest in a joint venture may be impaired.
When any objective evidence exists, the entire carrying amount of the investment (including goodwill) is tested for
impairment in accordance with IAS 36 as a single asset by comparing its recoverable amount (higher of value in use
and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised is not allocated to
any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that
impairment loss is recognised in accordance with IAS 36 to the extent that the recoverable amount of the investment
subsequently increases.
When the Group ceases to have joint control over a joint venture, it is accounted for as a disposal of the entire
interest in the investee with a resulting gain or loss being recognised in profit or loss.
Revenue from contracts with customers
Information about the Group’s accounting policies relating to revenue from contracts with customers is
provided in notes 6 and 27.
Property, plant and equipment
Property, plant and equipment are tangible assets that are held for use in the production or supply of goods or
services, or for administrative purposes (other than construction in progress as described below). Property, plant and
equipment are stated in the consolidated statements of financial position at cost less subsequent accumulated
depreciation and subsequent accumulated impairment losses, if any.
Buildings and plant and machinery in the course of construction for production, supply or administrative
purposes are carried at cost, less any recognised impairment loss. Costs include any costs directly attributable to
bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended
by management, including costs of testing whether the related assets is functioning properly and, for qualifying
assets, borrowing costs capitalised in accordance with the Group’s accounting policy. Depreciation of these assets,
on the same basis as other property assets, commences when the assets are ready for their intended use.
Depreciation is recognised so as to write off the cost of assets less their residual values over their estimated
useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are
reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective
basis.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of
an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-19 –


--- page 509 ---
Intangible assets
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at costs less accumulated
amortisation and any accumulated impairment losses. Amortisation for intangible assets with finite useful lives is
recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation
method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted
for on a prospective basis.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use
or disposal. Gains and losses arising from derecognition of an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is
derecognised.
Leases
The Group assesses whether a contract is or contains a lease based on the definition under IFRS 16 at inception
of the contract. Such contract will not be reassessed unless the terms and conditions of the contract are subsequently
changed.
The Group as lessee
Allocation of consideration to components of a contract
For a contract that contains a lease component and one or more additional lease or non-lease components, the
Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone
price of the lease component and the aggregate stand-alone price of the non-lease components.
Non-lease components are separated from lease component and are accounted for by applying other applicable
standards.
Short-term leases
The Group applies the short-term lease recognition exemption to leases of certain office premises and
equipment that have a lease term of 12 months or less from the commencement date and do not contain a purchase
option. Lease payments on short-term leases are recognised as expense on a straight-line basis over the lease term.
Right-of-use assets
The cost of right-of-use assets includes:
 the amount of the initial measurement of the lease liability;
 any lease payments made at or before the commencement date; and
 any initial direct costs incurred by the Group.
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities.
Right-of-use assets in which the Group is reasonably certain to obtain ownership of the underlying leased
assets at the end of the lease term are depreciated from commencement date to the end of the useful life. Otherwise
Right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease
term.
When the Group obtains ownership of the underlying leased assets at the end of the lease term, upon exercising
purchase options, the cost of the relevant right-of-use assets and the related accumulated depreciation and impairment
loss are transferred to property, plant and equipment.
APPENDIX I ACCOUNTANTS’ REPORT
– I-20 –


--- page 510 ---
The Group presents right-of-use assets as a separate line item on the consolidated statements of financial
position.
Refundable rental deposits
Refundable rental deposits paid are accounted under IFRS 9 and initially measured at fair value. Adjustments
to fair value at initial recognition are considered as additional lease payments and included in the cost of right-of-use
assets.
Lease liabilities
At the commencement date of a lease, the Group recognises and measures the lease liability at the present value
of lease payments that are unpaid at that date. In calculating the present value of lease payments, the Group uses the
incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily
determinable.
The lease payments include:
 fixed payments (including in-substance fixed payments); and
 the exercise price of a purchase option if the Group is reasonably certain to exercise the option.
After the commencement date, lease liabilities are adjusted by interest accretion and lease payments.
The Group remeasures lease liabilities (and makes a corresponding adjustment to the related right-of-use
assets) whenever:
 the lease term has changed or there is a change in the assessment of exercise of a purchase option, in
which case the related lease liability is remeasured by discounting the revised lease payments using a
revised discount rate at the date of reassessment.
 the lease payments change due to changes in market rental rates following a market rent review, in
which cases the related lease liability is remeasured by discounting the revised lease payments using the
initial discount rate.
 a lease contract is modified and the lease modification is not accounted for as a separate lease (see below
for the accounting policy for “lease modifications”).
The Group presents lease liabilities as a separate line item on the consolidated statements of financial position.
Lease modifications
The Group accounts for a lease modification as a separate lease if:
 the modification increases the scope of the lease by adding the right to use one or more underlying
assets; and
 the consideration for the leases increases by an amount commensurate with the stand-alone price for the
increase in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances
of the particular contract.
For a lease modification that is not accounted for as a separate lease, the Group remeasures the lease liability,
based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate
at the effective date of the modification.
The Group accounts for the remeasurement of lease liabilities by making corresponding adjustments to the
relevant right-of-use asset.
APPENDIX I ACCOUNTANTS’ REPORT
– I-21 –


--- page 511 ---
The Group as a lessor
Classification and measurement of leases
Leases for which the Group is a lessor are classified as operating leases.
Rental income from operating leases is recognised in profit or loss on a straight-line basis over the term of the
relevant lease.
Lease modification
Changes in considerations of lease contracts that were not part of the original terms and conditions are
accounted for as lease modifications, including lease incentives provided through forgiveness or reduction of rentals.
Operating leases
The Group accounts for a modification to an operating lease as a new lease from the effective date of the
modification, considering any prepaid or accrued lease payments relating to the original lease as part of the lease
payments for the new lease.
Sale and leaseback transactions
The Group applies the requirements of IFRS 15 to assess whether sale and leaseback transaction constitutes
a sale by the Group.
The Group as a seller-lessee
For a transfer that does not satisfy the requirements as a sale, the Group as a seller-lessee continues to
recognise the assets and accounts for the transfer proceeds as borrowings within the scope of IFRS 9.
Foreign currencies
In preparing the financial statements of each individual group entity, transactions in currencies other than the
functional currency of that entity (foreign currencies) are recognised at the rates of exchanges prevailing on the dates
of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are
retranslated at the rates prevailing at that date. 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 retranslation of monetary items,
are recognised in profit or loss in the period in which they arise.
Impairment on property, plant and equipment, right-of-use assets and intangible assets
At the end of the reporting period, the Group reviews the carrying amounts of its property, plant and
equipment, right-of-use assets and intangible assets with finite useful lives to determine whether there is any
indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount
of the relevant asset is estimated in order to determine the extent of the impairment loss (if any).
The recoverable amount of property, plant and equipment, right-of-use assets and intangible assets are
estimated individually. When it is not possible to estimate the recoverable amount individually, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
In testing a cash-generating unit for impairment, corporate assets are allocated to the relevant cash-generating
unit when a reasonable and consistent basis of allocation can be established, or otherwise they are allocated to the
smallest group of cash generating units for which a reasonable and consistent allocation basis can be established. The
recoverable amount is determined for the cash-generating unit or group of cash-generating units to which the
corporate asset belongs, and is compared with the carrying amount of the relevant cash-generating unit or group of
cash-generating units.
APPENDIX I ACCOUNTANTS’ REPORT
– I-22 –


--- page 512 ---
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset (or a cash-generating unit)
for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or a cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or a cash-generating unit) is reduced to its recoverable amount. For
corporate assets or portion of corporate assets which cannot be allocated on a reasonable and consistent basis to a
cash-generating unit, the Group compares the carrying amount of a group of cash-generating units, including the
carrying amounts of the corporate assets or portion of corporate assets allocated to that group of cash-generating
units, with the recoverable amount of the group of cash-generating units. In allocating the impairment loss, the
impairment loss is allocated to the assets on a pro-rata basis based on the carrying amount of each asset in the unit
or the group of cash-generating units. The carrying amount of an asset is not reduced below the highest of its fair
value less costs of disposal (if measurable), its value in use (if determinable) and zero. The amount of the impairment
loss that would otherwise have been allocated to the asset is allocated pro rata to the other assets of the unit or the
group of cash-generating units. An impairment loss is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit or
a group of cash-generating units) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset (or cash-generating unit or a group of cash-generating units) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which
are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost
of those assets until such time as the assets are substantially ready for their intended use.
Any specific borrowing that remain outstanding after the related asset is ready for its intended use or sale is
included in the general borrowing pool for calculation of capitalisation rate on general borrowings. Investment
income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a
weighted average method. Net realisable value represents the estimated selling price for inventories less all estimated
costs of completion and costs necessary to make the sale. Costs necessary to make the sale include incremental costs
directly attributable to the sale and non-incremental costs which the Group must incur to make the sale.
Financial instruments
Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual
provisions of the instrument. All regular way purchases or sales of financial assets are recognised and derecognised
on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery
of assets within the time frame established by regulation or convention in the market place.
Financial assets and financial liabilities are initially measured at fair value except for trade receivables arising
from contracts with customers which are initially measured in accordance with IFRS 15. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets
at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate,
on initial recognition. Transaction costs directly attributable to the acquisition of financial assets at FVTPL are
recognised immediately in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-23 –


--- page 513 ---
The effective interest method is a method of calculating the amortised cost of a financial asset or financial
liability and of allocating interest income and interest expense over the reporting period. The effective interest rate
is the rate that exactly discounts estimated future cash receipts and payments (including all fees and points paid or
received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts)
through the expected life of the financial asset or financial liability, or, where appropriate, a shorter period, to the
net carrying amount on initial recognition.
Financial assets
Classification and subsequent measurement of financial assets
Financial assets that meet the following conditions are subsequently measured at amortised cost:
 the financial asset is held within a business model whose objective is to collect contractual cash flows;
and
 the contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Debt instruments that meet the following conditions are subsequently measured at FVTOCI:
 the financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling the financial assets; and
 the contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
All other financial assets are subsequently measured at FVTPL.
Amortised cost and interest income
Interest income is recognised using the effective interest method for financial assets measured subsequently
at amortised cost and receivables subsequently measured at FVTOCI. Interest income is calculated by applying the
effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have
subsequently become credit-impaired. For financial assets that have subsequently become credit-impaired, interest
income is recognised by applying the effective interest rate to the amortised cost of the financial asset from the next
reporting period. If the credit risk on the credit-impaired financial instrument improves so that the financial asset is
no longer credit-impaired, interest income is recognised by applying the effective interest rate to the gross carrying
amount of the financial asset from the beginning of the reporting period following the determination that the asset
is no longer credit-impaired.
Receivables classified as at FVTOCI
Subsequent changes in the carrying amounts for receivables classified as at FVTOCI as a result of interest
income calculated using the effective interest method are recognised in profit or loss. All other changes in the
carrying amount of these receivables are recognised in other comprehensive income and accumulated under the
heading of FVTOCI reserve. Impairment allowances are recognised in profit or loss with corresponding adjustment
to other comprehensive income without reducing the carrying amounts of these receivables. When these receivables
are derecognised, the cumulative gains or losses previously recognised in other comprehensive income are
reclassified to profit or loss.
Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI or designated
as FVTOCI are measured at FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value
gains or losses recognised in profit or loss. The net gain or loss recognised in profit or loss includes any dividend
or interest earned on the financial asset and is included in the “other gains and losses” line item.
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 514 ---
Impairment of financial assets subject to impairment assessment under IFRS 9
The Group performs impairment assessment under ECL model on financial assets (including trade receivables,
other receivables, receivables at FVTOCI, restricted bank deposits, cash and cash equivalents and amounts due from
related parties) which are subject to impairment assessment under IFRS 9. The amount of ECL is updated at each
reporting date to reflect changes in credit risk since initial recognition.
Lifetime ECL represents the ECL that will result from all possible default events over the expected life of the
relevant instrument. In contrast, 12-month ECL (“12m ECL”) represents the portion of lifetime ECL that is expected
to result from default events that are possible within 12 months after the reporting date. Assessments are done based
on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic
conditions and an assessment of both the current conditions at the reporting date as well as the forecast of future
conditions.
The Group always recognises lifetime ECL for trade receivables.
For all other instruments, the Group measures the loss allowance equal to 12m ECL, unless there has been a
significant increase in credit risk since initial recognition, in which case the Group recognises lifetime ECL. The
assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk
of a default occurring since initial recognition.
Significant increase in credit risk
In assessing whether the credit risk has increased significantly since initial recognition, the Group compares
the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring
on the financial instrument as at the date of initial recognition. In making this assessment, the Group considers both
quantitative and qualitative information that is reasonable and supportable, including historical experience and
forward-looking information that is available without undue cost or effort.
In particular, the following information is taken into account when assessing whether credit risk has increased
significantly:
 an actual or expected significant deterioration in the financial instrument’s external (if available) or
internal credit rating;
 significant deterioration in external market indicators of credit risk, e.g. a significant increase in the
credit spread, the credit default swap prices for the debtor;
 existing or forecast adverse changes in business, financial or economic conditions that are expected to
cause a significant decrease in the debtor’s ability to meet its debt obligations;
 an actual or expected significant deterioration in the operating results of the debtor;
 an actual or expected significant adverse change in the regulatory, economic, or technological
environment of the debtor that results in a significant decrease in the debtor’s ability to meet its debt
obligations.
Irrespective of the outcome of the above assessment, the Group presumes that the credit risk has increased
significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group
has reasonable and supportable information that demonstrates otherwise.
Despite the foregoing, the Group assumes that the credit risk on a debt instrument has not increased
significantly since initial recognition if the debt instrument is determined to have low credit risk at the reporting date.
A debt instrument is determined to have low credit risk if (i) it has a low risk of default, (ii) the borrower has a strong
capacity to meet its contractual cash flow obligations in the near term and (iii) adverse changes in economic and
business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its
contractual cash flow obligations.
The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a
significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying
significant increase in credit risk before the amount becomes past due.
APPENDIX I ACCOUNTANTS’ REPORT
– I-25 –


--- page 515 ---
Definition of default
For internal credit risk management, the Group considers an event of default occurs when information
developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors,
including the Group, in full (without taking into account any collaterals held by the Group).
Irrespective of the above, the Group considers that default has occurred when a financial asset is more than
90 days past due unless the Group has reasonable and supportable information to demonstrate that a more lagging
default criterion is more appropriate.
Credit-impaired financial assets
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:
(a) significant financial difficulty of the issuer or the borrower;
(b) a breach of contract, such as a default or past due event;
(c) 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; or
(d) it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation.
Write-off policy
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. A
write-off constitutes a derecognition event. Any subsequent recoveries are recognised in profit or loss.
Measurement and recognition of ECL
The measurement of ECL is a function of the probability of default, loss given default (i.e. the magnitude of
the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given
default is based on historical data and forward-looking information. Estimation of ECL reflects an unbiased and
probability-weighted amount that is determined with the respective risks of default occurring as the weights.
Generally, the ECL is the difference between all contractual cash flows that are due to the Group in accordance
with the contract and the cash flows that the Group expects to receive, discounted at the effective interest rate
determined at initial recognition.
Interest income is calculated based on the gross carrying amount of the financial asset unless the financial asset
is credit-impaired, in which case interest income is calculated based on amortised cost of the financial asset.
Except for receivables at FVTOCI, the Group recognises an impairment gain or loss in profit or loss for all
financial instruments by adjusting their carrying amount, with the exception of trade receivables and other
receivables where the corresponding adjustment is recognised through a loss allowance account. For receivables at
FVTOCI, the loss allowance is recognised in other comprehensive income and accumulated in the FVTOCI reserve
without reducing the carrying amount of these receivables. Such amount represents the changes in the FVTOCI
reserve in relation to accumulated loss allowance.
APPENDIX I ACCOUNTANTS’ REPORT
– I-26 –


--- page 516 ---
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset
to another party. If the Group retains substantially all the risks and rewards of ownership of a transferred asset, the
Group continues to recognise the financial asset and also recognises payables or a collateralised borrowing for the
proceeds received.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss.
On derecognition of receivables at FVTOCI, the cumulative gain or loss previously accumulated in the
FVTOCI reserves is reclassified to profit or loss.
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 the Group after deducting
all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct
issue costs.
Financial liabilities
All financial liabilities the Group hold are subsequently measured at amortised cost using the effective interest
method.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged,
cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the
consideration paid and payable is recognised in profit or loss.
Offsetting a financial asset and a financial liability
A financial asset and a financial liability are offset and the net amount presented in the consolidated statements
of financial position when, and only when, the Group currently has a legally enforceable right to set off the
recognised amounts; and intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
Cash and cash equivalents
Cash and cash equivalents presented on the consolidated statements of financial position include:
(a) cash, which comprises of cash on hand and demand deposits, excluding bank balances that are subject
to regulatory restrictions that result in such balances no longer meeting the definition of cash; and
(b) cash equivalents, which comprises of short-term (generally with original maturity of three months or
less), highly liquid investments that are readily convertible to a known amount 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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-27 –


--- page 517 ---
Taxation
Income tax expense represents the sum of the current and deferred income tax expense.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax
because of income or expense that are taxable or deductible in other years and items that are never taxable or
deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in
the Historical Financial Information and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are
generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will
be available against which those deductible temporary differences can be utilised. Such deferred tax assets and
liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in
a transaction that affects neither the taxable profit nor the accounting profit and at the time of the transaction does
not give rise to equal taxable and deductible temporary differences.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in
subsidiaries 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 arising from deductible
temporary differences associated with such investments are only recognised to the extent that it is probable that there
will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are
expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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 asset to
be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset is realised, based on tax rate (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from
the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount
of its assets and liabilities.
For the purposes of measuring deferred tax for leasing transactions in which the Group recognises the
right-of-use assets and the related lease liabilities, the Group first determines whether the tax deductions are
attributable to the right-of-use assets or the lease liabilities.
For leasing transactions in which the tax deductions are attributable to the lease liabilities, the Group applies
IAS 12 Income Taxes requirements to the lease liabilities, and the related assets separately. The Group recognises a
deferred tax asset related to lease liabilities to the extent that it is probable that taxable profit will be available against
which the deductible temporary difference can be utilised and a deferred tax liability for all taxable temporary
differences.
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 taxes levied to the same taxable entity by the same
taxation authority.
Current and deferred tax are recognised in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-28 –


--- page 518 ---
Employee benefits
Retirement benefit costs
Payments to defined contribution retirement benefit plans, including state-managed retirement schemes in the
PRC, are recognised as an expense when employees have rendered service entitling them to the contributions.
Short-term employee benefits
Short-term employee benefits are recognised at the undiscounted amount of the benefits expected to be paid
as and when employees rendered the services. All short-term employee benefits are recognised as an expense unless
another IFRS requires or permits the inclusion of the benefit in the cost of an asset.
A liability is recognised for benefits accruing to employees (such as wages and salaries, annual leave and sick
leave) after deducting any amount already paid.
Government grants
Government grants are not recognised 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 are recognised in profit or loss on a systematic basis over the periods in which the Group
recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government
grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets
are recognised as deferred income in the consolidated statements of financial position and transferred to profit or loss
on a systematic and rational basis over the useful lives of the related assets.
Government grants related to income that are receivable as compensation for expenses or losses already
incurred or for the purpose of giving immediate financial support to the Group with no future related costs are
recognised in profit or loss in the period in which they become receivable. Such grants are presented under “other
income”.
5. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, which are described in note 4, the management of the
Group is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and underlying 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 recognised in the period in which the estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision affects both current and future periods.
Critical judgement in applying accounting policies
The following is the critical judgement, apart from those involving estimations (see below), that the directors
of the Company have made in the process of applying the Group’s accounting policies and that have the most
significant effect on the amounts recognised in the Historical Financial Information.
Supplier finance arrangement
As disclosed in note 26, 29 and 34b, the Group entered into supplier finance arrangements with a procurement
agent, which is one of the largest aluminum products trading company in China, to procure bauxite from overseas
suppliers, Bank of Jinzhou to procure coals and carbon anodes from domestic suppliers and Bank of Qingdao to
procure coals and bauxite from domestic suppliers. During the years ended 31 December 2022, 2023 and 2024 and
the five months ended 31 May 2024 and 2025, payments to a finance provider amounted to RMB833,124,000,
RMB1,200,685,000, RMB165,596,000, RMB106,024,000 (unaudited) and nil, respectively, represent the payments
to suppliers by the finance provider directly. During the year ended 31 December 2023 and 2024 and the five months
ended 31 May 2024 and 2025, bank loans under supplier finance arrangements amounted to RMB77,500,000,
RMB112,490,000, RMB75,520,000 (unaudited) and nil, respectively, represent the payments to the suppliers by Bank
of Jinzhou directly. During the five months ended 31 May 2025, borrowings under supplier finance arrangement of
APPENDIX I ACCOUNTANTS’ REPORT
– I-29 –


--- page 519 ---
RMB61,749,000 represent the payments to the suppliers by Bank of Qingdao directly. Under these arrangements, the
procurement agent, Bank of Jinzhou and Bank of Qingdao settles the prepayments to the sellers on behalf of the
Group. The Group’s obligations to suppliers are legally extinguished on settlement by the procurement agent, Bank
of Jinzhou and Bank of Qingdao. The Group then settles with the procurement agent 90 days after settlement by the
procurement agent with fixed interest ranges from 4.8%-5.4% per annum, settles with Bank of Jinzhou 1 year after
settlement by Bank of Jinzhou with fixed interest ranges from 3.10%-3.80% per annum and settles with Bank of
Qingdao approximately 1 year after settlement by Bank of Qingdao with fixed interest ranges from 3.95%-4.50% per
annum. These arrangements have extended the payment terms, which may be extended beyond the original due dates
of respective invoices. In determining whether the liabilities resulting from such arrangements are presented
separately from trade payables, the directors of the Group consider whether the nature and function of these liabilities
are sufficiently different from trade payables. For liabilities that are part of the working capital used in the Group’s
normal operating cycle, they are presented within trade payable. In addition, the directors of the Group determine
whether the arrangement has extinguished the entity’s obligation to suppliers and whether the terms and conditions
in the agreements with the procurement agent or Bank of Jinzhou and Bank of Qingdao are similar to the Group’s
financing activities. When the liabilities are part of the Group’s financing activities, the Group presents these
liabilities within other payables or bank borrowings in the consolidated statement of financial position.
For the purpose of presenting cash flows statement, cash flows related to the liabilities arising from supplier
finance arrangements that are classified as trade payable are still part of the working capital used in the entity’s
principal revenue generating activities. Therefore, the cash outflows to settle the trade payables under supplier
finance arrangement are presented as arising from operating activities. On the other hand, for the arrangements which
the related liability is not a trade payable because the liability represents borrowings of the Group, the Group presents
cash outflows to settle these liabilities as arising from financing activities in the consolidated statement of cash flows.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty
at the end of each reporting period, that have a significant risk of causing a material adjustment to the carrying
amounts of assets within the next twelve months.
Provision of ECL on trade receivables and other receivables
The credit loss allowance for trade receivables, other receivables and amounts due from related parties are
based on assumptions about the expected loss rates. The Group uses judgement in making these assumptions and
selecting the inputs to the impairment calculation, based on the Group’s past history, existing market conditions as
well as forward looking estimates at the end of each reporting period. Changes in these assumptions and estimates
could materially affect the result of the assessment and it may be necessary to make additional impairment charge
to the profit or loss.
Useful lives of property, plant and equipment, right-of-use assets and intangible assets
The Group’s management determines the estimated useful lives and the depreciation/amortisation method in
determining the related charges for its property, plant and equipment, right-of-use assets and intangible assets. This
estimate is referenced to useful lives of property, plant and equipment, right-of-use assets and intangible assets of
similar nature and functions in the industry. Management will increase the depreciation charge where useful lives are
expected to be shorter than expected, or will write-off or write-down obsolete assets that have been abandoned or
sold. The carrying amount of property, plant and equipment at 31 December 2022, 2023 and 2024 and 31 May 2025
is approximately RMB6,394,185,000, RMB6,686,105,000, RMB9,152,466,000 and RMB10,741,958,000,
respectively, as disclosed in note 15. The carrying amount of right-of-use assets at 31 December 2022, 2023 and 2024
and 31 May 2025 is approximately RMB2,262,694,000, RMB2,233,194,000, RMB928,604,000 and
RMB1,083,733,000, respectively, as disclosed in note 16. The carrying amount of intangible assets at 31 December
2022, 2023 and 2024 and 31 May 2025 is approximately RMB3,359,808,000, RMB3,288,524,000,
RMB3,217,685,000 and RMB3,187,859,000, respectively, as disclosed in note 17.
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 520 ---
6. REVENUE AND SEGMENT INFORMATION
During the Track Record Period, the Company and its subsidiaries (the “Group”) are engaged in the following
two principal activities:
(i) Production and sales of aluminum ingots and liquid aluminum (“Electrolytic Aluminum Business”); and
(ii) Production and sales of alumina and other related types of products (“Alumina Business”).
(a) Disaggregation of revenue from contracts with customers
For the year ended 31 December 2022
For the year ended 31 December 2022
Electrolytic
Aluminum Business Alumina Business Total
RMB’000 RMB’000 RMB’000
Types of goods
Electrolytic aluminum /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,881,870 – 12,881,870
Alumina and other related types of products /H1118/H1118/H1118/H1118 – 270,599 270,599
Scrap and other materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118251,332 14,000 265,332
Electricity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111896 62,902 62,998
Steam supply /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118750 8,177 8,927
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/H111813,134,048 355,678 13,489,726
For the year ended 31 December 2023
For the year ended 31 December 2023
Electrolytic
Aluminum Business Alumina Business Total
RMB’000 RMB’000 RMB’000
Types of goods
Electrolytic aluminum /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,502,317 – 12,502,317
Alumina and other related types of products /H1118/H1118/H1118/H1118 – 977,358 977,358
Scrap and other materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118188,708 14,072 202,780
Electricity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,541 98,617 110,158
Steam supply /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,803 16,241 22,044
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/H111812,708,369 1,106,288 13,814,657
For the year ended 31 December 2024
For the year ended 31 December 2024
Electrolytic
Aluminum Business Alumina Business Total
RMB’000 RMB’000 RMB’000
Types of goods
Electrolytic aluminum /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,883,738 – 12,883,738
Alumina and other related types of products /H1118/H1118/H1118/H1118 – 1,849,457 1,849,457
Scrap and other materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130,191 44,707 174,898
Electricity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,948 95,225 231,173
Steam supply /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,515 11,401 23,916
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/H111813,162,392 2,000,790 15,163,182
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 521 ---
Five months ended 31 May 2024
Five months ended 31 May 2024
Electrolytic
Aluminum Business Alumina Business Total
RMB’000 RMB’000 RMB’000
(unaudited) (unaudited) (unaudited)
Types of goods
Electrolytic aluminum /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,275,979 – 5,275,979
Alumina and other related types of products /H1118/H1118/H1118/H1118 – 449,480 449,480
Scrap and other materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,430 17,282 77,712
Electricity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,327 39,105 70,432
Steam supply /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,150 4,475 9,625
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/H11185,372,886 510,342 5,883,228
Five months ended 31 May 2025
Five months ended 31 May 2025
Electrolytic
Aluminum Business Alumina Business Total
RMB’000 RMB’000 RMB’000
Types of goods
Electrolytic aluminum /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,523,248 – 5,523,248
Alumina and other related types of products /H1118/H1118/H1118/H1118 – 1,523,687 1,523,687
Scrap and other materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,014 21,242 71,256
Electricity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,084 34,567 86,651
Steam supply /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,986 2,698 8,684
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/H11185,631,332 1,582,194 7,213,526
For the year ended 31 December Five months ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Timing of revenue
recognition
A point in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,489,726 13,814,657 15,163,182 5,883,228 7,213,526
(b) Performance obligations for contracts with customers and revenue recognition policies
Revenue from the sales of electrolytic aluminum, alumina and other related types of products and scrap and
other materials
The performance obligation is satisfied upon delivery of the industrial products. Transportation and
handling activities that occur before customers obtain control are considered as fulfilment activities. The
normal credit term is 7 days for liquid aluminum. For aluminum ingots, alumina and other related types of
products and scrap and other materials, a full advance payment is normally required. However, for certain
aluminum ingots and alumina, payment is made after delivery. Revenue arising from the sales of electrolytic
aluminum, alumina and other related types of products and scrap and other materials is recognised at a point
in time.
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 522 ---
Revenue from electricity
Revenue arising from the sales of electricity is recognised at a point in time when electricity is generated
and transmitted. The revenue from sales of electricity is based on the on-grid benchmark tariff rates of local
coal-fired power plants, which can be adjusted by the government. It is currently settled on a monthly basis.
Revenue from steam supply
Revenue arising from the sales of steam is recognised at a point in time and based on steam consumption
derived from meter readings. Payment is generally due within 30 days.
(c) Transaction price allocated to the remaining performance obligation for contracts with customers
The Group applies the practical expedient of not disclosing the transaction price allocated to
performance obligations that were unsatisfied as the Group’s contract has an original expected duration of less
than one year.
Operating Segments
Information reported to Chief Executive Officer (“CEO”), being the chief operating decision maker
(“CODM”), for the purposes of resource allocation and assessment of segment performance focuses on major
types of goods delivered.
The Group’s operating businesses are structured and managed separately according to products. The
principal activities of the Group are production and sales of electrolytic aluminum in Inner Mongolia and
alumina and other related types of products in Shandong. The Group identified an operating segment which
is a component of the Group (a) that engages in business activities from which it may earn revenue and incur
expenses; and (b) whose operating results are reviewed regularly by the CEO, being the CODM, to make
decisions about resources allocation and performance assessment.
Segment revenues and results
The following is an analysis of the Group’s revenue and results by reportable and operating segments.
For the year ended 31 December 2022
For the year ended 31 December 2022
Electrolytic
Aluminum
Business Alumina Business
Adjustments and
elimination Total
RMB’000 RMB’000 RMB’000 RMB’000
Types of goods
External sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,134,048 355,678 – 13,489,726
Inter-segment sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,706,773 (1,706,773) –
13,134,048 2,062,451 (1,706,773) 13,489,726
Segment profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118937,692 101,743 8,224 1,047,659
Group’s profit before tax /H1118/H1118/H1118/H1118 1,047,659
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 523 ---
For the year ended 31 December 2023
For the year ended 31 December 2023
Electrolytic
Aluminum
Business Alumina Business
Adjustments and
elimination Total
RMB’000 RMB’000 RMB’000 RMB’000
Types of goods
External sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,708,369 1,106,288 – 13,814,657
Inter-segment sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,258,345 (3,258,345) –
12,708,369 4,364,633 (3,258,345) 13,814,657
Segment profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,016,793 247,903 7,796 1,272,492
Group’s profit before tax /H1118/H1118/H1118/H1118 1,272,492
For the year ended 31 December 2024
Electrolytic
Aluminum
Business Alumina Business
Adjustments and
elimination Total
RMB’000 RMB’000 RMB’000 RMB’000
Types of goods
External sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,162,392 2,000,790 – 15,163,182
Inter-segment sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,409,511 (4,409,511) –
13,162,392 6,410,301 (4,409,511) 15,163,182
Segment profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,454,498 2,063,442 (207,137) 3,310,803
Central administration costs
and directors’ salaries /H1118/H1118/H1118/H1118 (12,617)
Share of results of joint
ventures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 (851)
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 (16,438)
Group’s profit before tax /H1118/H1118/H1118/H1118 3,280,897
Five months ended 31 May 2024
Five Months ended 31 May 2024
Electrolytic
Aluminum
Business Alumina Business
Adjustments and
elimination Total
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited) (unaudited) (unaudited) (unaudited)
Types of goods
External sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,372,886 510,342 – 5,883,228
Inter-segment sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,623,656 (1,623,656) –
5,372,886 2,133,998 (1,623,656) 5,883,228
Segment profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118777,485 476,468 (48,922) 1,205,031
Central administration costs
and directors’ salaries /H1118/H1118/H1118/H1118 (3,975)
Group’s profit before tax /H1118/H1118/H1118/H1118 1,201,056
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 524 ---
Five Months ended 31 May 2025
Five Months ended 31 May 2025
Electrolytic
Aluminum
Business Alumina Business
Adjustments and
elimination Total
RMB’000 RMB’000 RMB’000 RMB’000
Types of goods
External sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,631,332 1,582,194 – 7,213,526
Inter-segment sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,525,982 (1,525,982) –
5,631,332 3,108,176 (1,525,982) 7,213,526
Segment profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118731,597 94,941 228,856 1,055,394
Central administration costs
and directors’ salaries /H1118/H1118/H1118/H1118 (8,007)
Share of results of joint
ventures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 (7,005)
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 (4,736)
Group’s profit before tax /H1118/H1118/H1118/H1118 1,035,646
The accounting policies of the operating segments are the same as the Group’s accounting policies
described in note 4. Segment profit represents the profit earned by each segment without allocation of
corporate items including central administration costs and directors’ salaries, share of results of joint ventures
and listing expenses. This is the measure reported to the CODM for the purposes of resource allocation and
performance assessment.
Inter-segment sales are charged at prevailing market rates.
Segment assets and liabilities
The following is an analysis of the Group’s assets and liabilities by reportable and operating segments:
Segment assets
31 December
2022
31 December
2023
31 December
2024
31 May
2025
RMB’000 RMB’000 RMB’000 RMB’000
Electrolytic Aluminum
Business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,352,234 16,861,564 13,990,784 13,549,250
Alumina Business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,137,479 2,691,961 4,320,076 7,363,101
Total reportable segment
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,489,713 19,553,525 18,310,860 20,912,351
Unallocated
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 3,129
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 13,882
Cash and cash equivalents /H1118/H1118/H1118 – – 865 28
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 8,092 13,816
Consolidated assets /H1118/H1118/H1118/H1118/H1118/H1118/H111821,489,713 19,553,525 18,319,817 20,943,206
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 525 ---
Segment liabilities
31 December
2022
31 December
2023
31 December
2024
31 May
2025
RMB’000 RMB’000 RMB’000 RMB’000
Electrolytic Aluminum
Business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,391,322 14,347,475 13,413,447 12,730,653
Alumina Business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,169,165 1,757,180 2,561,475 5,002,242
Total reportable segment
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,560,487 16,104,655 15,974,922 17,732,895
Unallocated
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 14,843
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 18,627 13,695
Consolidated liabilities /H1118/H1118/H1118/H1118/H111819,560,487 16,104,655 15,993,549 17,761,433
For the purposes of monitoring segment performance and allocating resources between segments:
 all assets are allocated to reportable and operating segments other than certain property, plant and
equipment, right-of-use assets, cash and cash equivalents and other receivables which are held by
the headquarter and cannot be allocated; and
 all liabilities are allocated to reportable and operating segments other than certain lease liabilities
and other payables incurred by the headquarter.
Other Segment information
For the year ended 31 December 2022
Electrolytic
Aluminum Business Alumina Business Total
RMB’000 RMB’000 RMB’000
Amounts included in the measure of segment profit or loss or segment assets:
Addition to non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118457,653 1,017,889 1,475,542
Impairment of property, plant and equipment /H1118/H1118/H1118 15,316 – 15,316
Depreciation and amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118614,006 125,434 739,440
Impairment losses recognised on trade
receivables, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118230 326 556
Impairment losses recognised on other
receivables, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118236 99 335
Impairment losses recognised on amounts due
from related parties, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,235 – 1,235
Gain on disposal of intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180,749 – 180,749
Gain on disposal 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/H11182,167 – 2,167
Write-down of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,440 5,440
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 526 ---
For the year ended 31 December 2023
Electrolytic
Aluminum Business Alumina Business Total
RMB’000 RMB’000 RMB’000
Amounts included in the measure of segment profit or loss or segment assets:
Addition to non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,556 749,480 992,036
Impairment of property, plant and equipment /H1118/H1118/H1118 19,084 – 19,084
Depreciation and amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118616,649 164,416 781,065
Impairment losses recognised on trade
receivables, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(206) 46 (160)
Impairment losses recognised on other
receivables, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(117) 448 331
Impairment losses recognised on amounts due
from related parties, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(157) – (157)
Gain on disposal 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/H1118167 1,523 1,690
For the year ended 31 December 2024
Electrolytic
Aluminum Business Alumina Business Total
RMB’000 RMB’000 RMB’000
Amounts included in the measure of segment profit or loss or segment assets:
Addition to non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118756,340 1,195,164 1,951,504
Impairment of property, plant and equipment /H1118/H1118/H1118 11,246 – 11,246
Depreciation and amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118599,413 160,728 760,141
Impairment losses recognised on trade
receivables, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118184 (54) 130
Impairment losses recognised on other
receivables, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(110) 646 536
Impairment losses recognised on amounts due
from related parties, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,078) – (1,078)
Gain on disposal 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/H11188,699 – 8,699
Five months ended 31 May 2024
Electrolytic
Aluminum Business Alumina Business Total
RMB’000 RMB’000 RMB’000
(unaudited) (unaudited) (unaudited)
Amounts included in the measure of segment profit or loss or segment assets:
Addition to non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118194,558 121,080 315,638
Impairment of property, plant and equipment /H1118/H1118/H1118 5,767 – 5,767
Depreciation and amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118245,646 69,724 315,370
Impairment losses recognised on trade
receivables, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(367) 15 (352)
Impairment losses recognised on other
receivables, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102 379 481
Impairment losses recognised on amounts due
from related parties, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118315 (44) 271
Gain on disposal 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/H11188,582 – 8,582
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 527 ---
Five months ended 31 May 2025
Electrolytic
Aluminum Business Alumina Business Total
RMB’000 RMB’000 RMB’000
Amounts included in the measure of segment profit or loss or segment assets:
Addition to non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118737,556 1,575,214 2,312,770
Impairment of property, plant and equipment /H1118/H1118/H1118 9,559 – 9,559
Depreciation and amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118260,820 110,477 371,297
Impairment losses recognised on trade
receivables, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(257) (92) (349)
Impairment losses recognised on other
receivables, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 1,138 1,142
Loss on disposal 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(56) – (56)
Information about major customers
Revenue from customers contributing for 10% or more of the Group’s revenue during the Track Record
Period are as follows:
Y ear ended
2022
Y ear ended
2023
Y ear ended
2024
Five Months ended 31 May
2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Customer A (note a) /H1118/H1118/H1118/H11181,598,141 N/A (note c) N/A (note c) N/A (note c) N/A (note c)
Customer B (note a) /H1118/H1118/H1118/H11181,482,735 N/A (note c) N/A (note c) N/A (note c) N/A (note c)
Customer C (note b) /H1118/H1118/H1118/H1118N/A (note c) 10,891,848 11,608,881 5,289,226 4,315,938
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,080,876 10,891,848 11,608,881 5,289,226 4,315,938
Notes:
(a) Revenue from sales of electrolytic aluminum.
(b) Revenue from sales of electrolytic aluminum, electricity, steam supply, and sales of scrap and
other materials.
(c) The corresponding revenue did not contribute over 10% of the revenue of the Group.
Geographical information
During the Track Record Period, the Group principally operates in the PRC. All revenue of the Group
are derived from the PRC and substantially all the Group’s non-current assets are located in the PRC.
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 528 ---
7. OTHER INCOME
Y ear ended
2022
Y ear ended
2023
Y ear ended
2024
Five Months ended 31 May
2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest income
– bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885,373 44,668 13,342 7,542 2,037
– amounts due from independent
third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,743 4,210 5,184 1,773 –
Rental income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 37,911 26,467 8,457 12,651
Government grants (note) /H1118/H1118/H1118/H11182,954 4,210 4,686 1,593 7,176
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118433 6,949 5,564 427 943
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,503 97,948 55,243 19,792 22,807
Notes: During the years ended 31 December 2022, 2023 and 2024 and five months ended 31 May 2024 and
2025, the Group received government subsidies of approximately RMB12,660,000, nil,
RMB75,700,000, RMB30,000,000 (unaudited) and RMB5,900,000, respectively, as to subsidies
certain of the Group’s construction projects. The amount has been treated as deferred income and is
transferred to income over the useful lives of relevant plant and machineries. This policy has resulted
in a credit to income during the years ended 31 December 2022, 2023 and 2024 and five months ended
31 May 2024 and 2025 of RMB1,720,000, RMB2,564,000, RMB2,677,000, RMB1,237,000
(unaudited) and RMB4,628,000, respectively. The other government grants were mainly incentives
provided by local government authorities in the PRC, including various forms of government financial
incentives rewarding the Group’s support and contribution for the development of local economies.
8. OTHER GAINS AND LOSSES
Y ear ended
2022
Y ear ended
2023
Y ear ended
2024
Five Months ended 31 May
2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Gain on disposal of intangible
assets (note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180,74 9––––
Gain (loss) on disposal of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,167 1,690 8,699 8,582 (56)
Gain on disposal of derivative
financial instruments /H1118/H1118/H1118/H1118/H1118/H111823,70 2––––
Realised gain from financial
assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893 99 – – 83
(Loss) gain on disposal of a
subsidiary (note 38) /H1118/H1118/H1118/H1118/H1118/H1118– – (728) – 5,174
Net foreign exchange (loss)
gain /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(78) (11) (295) – 496
Fair value changes of financial
assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844 (44) – – –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(715) 3,511 10,795 2,263 1,191
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118205,962 5,245 18,471 10,845 6,888
Note: During the year ended 31 December 2022, Inner Mongolia Chuangyuan disposed of the annual
aluminum production quota in the quantity of 47,000 tons with carrying amount of RMB173,968,000 to
an independent third party for cash consideration of RMB354,717,000, resulting in gain on disposal of
RMB180,749,000.
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 529 ---
9. FINANCE COSTS
Y ear ended
2022
Y ear ended
2023
Y ear ended
2024
Five Months ended 31 May
2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interests on bank borrowings /H1118/H1118 839,067 765,906 648,320 280,796 285,395
Interests on bills discounted /H1118/H1118/H1118108,080 50,387 46,291 28,920 5,510
Interests on lease liabilities /H1118/H1118/H111869,898 45,087 17,498 16,315 1,654
Interests on payable for
aluminum production quota /H1118/H1118 41,794 44,992 48,574 19,738 21,110
Interests on amounts due to
related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,532 23,082 7,855 7,855 –
Interests on bank loans under
supplier finance
arrangements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,451 1,956 1,956 4,978
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118498 6,801 10,992 10,888 1,589
Total borrowing costs /H1118/H1118/H1118/H1118/H1118/H1118/H11181,061,869 939,706 781,486 366,468 320,236
Less: amounts capitalised in the
cost of qualifying assets /H1118/H1118/H1118/H1118 – – (19,839) – (57,792)
1,061,869 939,706 761,647 366,468 262,444
Note: There was no significant borrowing cost increased directly attributable to the acquisition, construction or
production of qualifying assets, which are necessary to be capitalised during the year ended 31 December 2022
and 2023 and five months ended 31 May 2024.
Borrowing costs capitalised during the year ended 31 December 2024 and five months ended 31 May 2025
arose on the specific borrowing are calculated by applying a capitalization rate of 4.70% to 4.95% and 3.10%
to 5.00% per annum, respectively, and arose on the general borrowing pool are calculated by applying a
capitalisation rate of 4.77% and 4.44% per annum per annum.
10. PROFIT FOR THE YEAR/PERIOD
Profit for the year/period for the Track Record Period has been arrived at after charging (crediting):
Y ear ended
2022
Y ear ended
2023
Y ear ended
2024
Five Months ended 31 May
2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Cost of inventories recognised
as an expense (including
write-down of inventories
amounting to RMB5,440,000
during the year ended
31 December 2022) /H1118/H1118/H1118/H1118/H1118/H1118/H111811,220,124 11,390,946 10,768,394 4,193,329 5,736,243
Depreciation of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118462,642 546,932 617,124 233,146 323,450
Depreciation of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118201,817 162,849 71,430 52,524 18,021
Amortisation of intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874,981 71,284 71,587 29,700 29,826
Total depreciation and
amortisation expenses /H1118/H1118/H1118/H1118/H1118739,440 781,065 760,141 315,370 371,297
Capitalised in inventories /H1118/H1118/H1118/H1118/H1118(720,169) (765,398) (746,039) (309,604) (360,771)
19,271 15,667 14,102 5,766 10,526
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 530 ---
Y ear ended
2022
Y ear ended
2023
Y ear ended
2024
Five Months ended 31 May
2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Analysed as:
– charged in administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,194 15,662 14,102 5,766 10,526
– charged in selling and
marketing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H11187 75–––
19,271 15,667 14,102 5,766 10,526
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 16,438 – 4,736
Auditors’ remuneration /H1118/H1118/H1118/H1118/H1118/H1118– – 2,118 – 1,200
Directors’ remuneration
(note 12) :
Salaries, allowances and other
benefits in kind /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118472 475 763 228 324
Bonus /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,981 6,483 10,492 3,738 5,556
Retirement benefit scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 12 32 9 16
4,465 6,970 11,287 3,975 5,896
Other staff costs:
Salaries, allowances and other
benefits in kind /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118340,684 314,684 353,010 143,223 168,297
Bonus /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,244 34,116 45,664 19,660 17,894
Retirement benefit scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,543 24,936 29,884 12,933 14,772
401,471 373,736 428,558 175,816 200,963
Total staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,936 380,706 439,845 179,791 206,859
Capitalised in inventories /H1118/H1118/H1118/H1118/H1118(326,156) (302,376) (349,639) (143,151) (161,784)
79,780 78,330 90,206 36,640 45,075
Analysed as:
– charged in administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,363 78,167 89,732 36,542 44,425
– charged in selling and
marketing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H11182,417 163 474 98 650
79,780 78,330 90,206 36,640 45,075
Impairment losses recognised on
property, plant and equipment
included in
– cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,316 19,084 11,246 5,767 9,559
Other expense comprised:
– depreciation of leased assets /H1118 – 20,867 10,567 2,523 5,863
– donation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,500 80 605 5 1,000
7,500 20,947 11,172 2,528 6,863
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 531 ---
11. INCOME TAX EXPENSES
Y ear ended
2022
Y ear ended
2023
Y ear ended
2024
Five Months ended 31 May
2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current tax – PRC Enterprise
Income Tax (“EIT”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118120,683 193,350 746,179 241,255 85,578
Under (over) provision in prior
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862 198 (3) (3) (7,320)
Deferred tax (note 18) /H1118/H1118/H1118/H1118/H1118/H111814,012 (1,688) (94,799) (39,632) 101,937
Total income tax expenses /H1118/H1118/H1118/H1118134,757 191,860 651,377 201,620 180,195
During the Track Record Period, Inner Mongolia Chuangyuan was subject to the applicable preferential income
tax rate of 15%. While all other PRC entities, under the Law of PRC on Enterprise Income Tax (“EIT Law”) and
Implementation Regulation of the EIT Law, their tax rate is 25% during the Track Record Period.
The Company is exempted from taxation under the laws of the Cayman Islands.
No provision of Hong Kong Profit Tax was made in the Historical Financial Information as the Group had no
assessable profit subject to Hong Kong Profit Tax during the Track Record Period.
Income tax expenses for the Track Record Period can be reconciled to profit before tax per the consolidated
statements of profit or loss and other comprehensive income as follows:
Y ear ended
2022
Y ear ended
2023
Y ear ended
2024
Five Months ended 31 May
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/H11181,047,659 1,272,492 3,280,897 1,201,056 1,035,646
Tax at PRC EIT rate of 25% /H1118/H1118/H1118261,915 318,123 820,224 300,264 258,912
Preferential income tax rates
applicable to subsidiaries /H1118/H1118/H1118(90,775) (115,869) (153,733) (90,358) (71,532)
Tax effect of expenses not
deductible for
tax purpose /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,983 2,070 5,624 809 2,671
Utilisation of tax losses
previously not recognised /H1118/H1118/H1118 (361) (575) – – –
Tax effect of tax losses not
recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118603 147 769 309 1,521
Tax effect of additional
deduction on environmental
protection equipment
expenditures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(37,236) (11,580) (19,087) (7,953) –
Under (over) provision in prior
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862 198 (3) (3) (7,320)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,434) (654) (2,417) (1,448) (4,057)
Income tax expenses for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,757 191,860 651,377 201,620 180,195
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 532 ---
12. DIRECTORS’, CHIEF EXECUTIVE’S AND EMPLOYEES’ EMOLUMENTS
12.1 Directors’ and the chief executive’s emoluments
Details of the emoluments paid or payable by the entities comprising the Group to the directors and chief
executive of the Company (including emoluments for services as employee/directors of the group entities prior to
their becoming directors of the Company) for their services during the Track Record Period are as follows:
Date of
appointment as
a director of
the Company
Salaries,
allowances and
benefits in kind
Retirement
benefit scheme
contributions Bonus* Total
RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December
2022
Executive directors:
Mr. Cao Y ong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
256 6 3,641 3,903
Mr. Zhang Jianxiang /H1118/H1118/H1118/H11187 January
2025
––––
Ms. Zhang Y ue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
––––
Mr. Fu Qian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
216 6 340 562
Non-executive director:
Mr. Cui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 July 2023 ––––
Independent non-executive
directors:
Mr. Liu Y anzhao /H1118/H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
Ms. Zheng Juan /H1118/H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
Ms. Shen Lingyan /H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
472 12 3,981 4,465
Date of
appointment as
a director of
the Company
Salaries,
allowances and
benefits in kind
Retirement
benefit scheme
contributions Bonus* Total
RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December
2023
Executive directors:
Mr. Cao Y ong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
258 6 5,957 6,221
Mr. Zhang Jianxiang /H1118/H1118/H1118/H11187 January
2025
––––
Ms. Zhang Y ue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
––––
Mr. Fu Qian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
217 6 526 749
Non-executive director:
Mr. Cui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 July 2023 ––––
APPENDIX I ACCOUNTANTS’ REPORT
– I-43 –


--- page 533 ---
Date of
appointment as
a director of
the Company
Salaries,
allowances and
benefits in kind
Retirement
benefit scheme
contributions Bonus* Total
RMB’000 RMB’000 RMB’000 RMB’000
Independent non-executive
directors:
Mr. Liu Y anzhao /H1118/H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
Ms. Zheng Juan /H1118/H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
Ms. Shen Lingyan /H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
475 12 6,483 6,970
Date of
appointment as
a director of
the Company
Salaries,
allowances and
benefits in kind
Retirement
benefit scheme
contributions Bonus* Total
RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December
2024
Executive directors:
Mr. Cao Y ong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
246 10 7,470 7,726
Mr. Zhang Jianxiang /H1118/H1118/H1118/H11187 January
2025
144 6 1,594 1,744
Ms. Zhang Y ue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
149 6 775 930
Mr. Fu Qian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
224 10 653 887
Non-executive director:
Mr. Cui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 July 2023 ––––
Independent non-executive
directors:
Mr. Liu Y anzhao /H1118/H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
Ms. Zheng Juan /H1118/H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
Ms. Shen Lingyan /H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
763 32 10,492 11,287
Date of
appointment as
a director of
the Company
Salaries,
allowances and
benefits in kind
Retirement
benefit scheme
contributions Bonus* Total
RMB’000 RMB’000 RMB’000 RMB’000
Five months ended
31 May 2024
(unaudited)
Executive directors:
Mr. Cao Y ong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
103 4 3,112 3,219
Mr. Zhang Jianxiang /H1118/H1118/H1118/H11187 January
2025
32 1 354 387
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 534 ---
Date of
appointment as
a director of
the Company
Salaries,
allowances and
benefits in kind
Retirement
benefit scheme
contributions Bonus* Total
RMB’000 RMB’000 RMB’000 RMB’000
Ms. Zhang Y ue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
––––
Mr. Fu Qian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
93 4 272 369
Non-executive director:
Mr. Cui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 July 2023 ––––
Independent non-executive
directors:
Mr. Liu Y anzhao /H1118/H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
Ms. Zheng Juan /H1118/H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
Ms. Shen Lingyan /H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
228 9 3,738 3,975
Date of
appointment as
a director of
the Company
Salaries,
allowances and
benefits in kind
Retirement
benefit scheme
contributions Bonus* Total
RMB’000 RMB’000 RMB’000 RMB’000
Five months ended
31 May 2025
Executive directors:
Mr. Cao Y ong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
79 4 3,779 3,862
Mr. Zhang Jianxiang /H1118/H1118/H1118/H11187 January
2025
65 4 1,025 1,094
Ms. Zhang Y ue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
93 4 425 522
Mr. Fu Qian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 January
2025
87 4 327 418
Non-executive director:
Mr. Cui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 July 2023 ––––
Independent non-executive
directors:
Mr. Liu Y anzhao /H1118/H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
Ms. Zheng Juan /H1118/H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
Ms. Shen Lingyan /H1118/H1118/H1118/H1118/H1118/H11189 November
2025
––––
324 16 5,556 5,896
* Bonuses are determined based on the duties and performances of the relevant individuals and the
operating result of the Group.
Mr. Cao Y ong was also appointed as the CEO of the Company on 7 January 2025.
The executive directors’ and chief executive’s emoluments shown above were paid for their services in
connection with the management of the affairs of the Company and the Group during the Track Record Period.
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 535 ---
During the Track Record Period, there was no arrangement under which a director or the chief executive
waived or agreed to waive any emolument.
12.2 Five highest paid employees
The five individuals with the highest emoluments in the Group, included 1, 1, 2, 2 (unaudited) and 2 directors
of the Company whose emoluments are included in the disclosures in note 12.1 above for the years ended 31
December 2022, 2023 and 2024, and 31 May 2024 and 2025. The emoluments of the remaining 4, 4, 3, 3(unaudited)
and 3 individuals for each of the three years ended 31 December 2022, 2023 and 2024 and five months ended 31 May
2024 and 2025 were as follows:
Y ear ended
2022
Y ear ended
2023
Y ear ended
2024
Five Months ended 31 May
2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, allowances and benefits
in kind /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118849 856 501 209 240
Bonus /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,866 5,689 8,718 3,632 2,125
Retirement benefit scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 25 29 12 14
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,740 6,570 9,248 3,853 2,379
The numbers of the five highest paid individuals (including directors of the Company) are within the following
bands (presented in Hong Kong Dollar (“HK$”)):
As at 31 December As at 31 May
2022 2023 2024 2024 2025
No. of
employees
No. of
employees
No. of
employees
No. of
employees
No. of
employees
(unaudited)
Nil to HK$1,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––22
HK$1,000,001 to HK$1,500,000 /H1118/H1118 22–12
HK$1,500,001 to HK$2,000,000 /H1118/H1118 1–11–
HK$2,000,001 to HK$2,500,000 /H1118/H1118 111––
HK$2,500,001 to HK$3,000,000 /H1118/H1118 –1–––
HK$3,000,001 to HK$3,500,000 /H1118 ––11–
HK$4,000,001 to HK$4,500,000 /H1118/H1118 1–––1
HK$4,500,001 to HK$5,000,000 /H1118/H1118 ––1––
HK$6,500,001 to HK$7,000,000 /H1118/H1118 –1–––
HK$8,000,001 to HK$8,500,000 /H1118/H1118 ––1––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855555
During the Track Record Period, no emoluments were paid by the Group to any of the directors, CEO or the
five highest paid individuals of the Company as an inducement to join or upon joining the Group or as compensation
for loss of office.
13. DIVIDENDS
No dividend was declared or paid by the Company and the entities now comprising the Group in respect of
the Track Record Period, except for Shandong Chuangyuan declared and paid cash dividend of RMB330,000,000
during the year ended 31 December 2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 536 ---
14. EARNINGS PER SHARE
The calculation of the basic earnings per share from continuing operations attributable to owners of the
Company is based on the following data:
Y ear ended 31 December Five Months ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit for the year/period
attributable to owners
of the Company, for
the purposes of basic
earnings per share /H1118/H1118/H1118/H1118881,286 1,003,572 2,056,227 879,941 755,955
Number of shares
31/12/2022 31/12/2023 31/12/2024 31/05/2024 31/05/2025
(unaudited)
Weighted average
number of
ordinary shares
for the purpose of
basic earnings per
share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,500,000,000 1,500,000,000 1,500,000,000 1,500,000,000 1,500,000,000
The weighted average number of ordinary shares for the purpose of calculating basic earnings per share has
been determined on the assumption that the Reorganisation, the Share Subdivision (as defined in note 31) and issue
of 1,499,999,980 ordinary shares (details are set out in note 31) are completed on 1 January 2022.
No diluted earnings per share is presented as there were no dilutive potential ordinary shares outstanding
during the year ended 31 December 2022, 2023 and 2024 and five months ended 31 May 2024 (unaudited) and 2025.
15. PROPERTY, PLANT AND EQUIPMENT
The Group
Buildings
Plant and
machinery
Furniture and
fixtures Motor vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
COST
At 1 January 2022 /H1118/H1118/H1118/H1118/H11182,425,636 4,371,833 3,900 59,976 133,902 6,995,247
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 166,736 725 3,095 777,404 947,960
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118650,808 120,389 – – (771,197) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (30,335) – (1,570) – (31,905)
At 31 December 2022 /H1118/H1118/H11183,076,444 4,628,623 4,625 61,501 140,109 7,911,302
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 89,266 4,462 6,931 389,450 490,109
Capital injection from a
non-controlling interest
(note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118141,133 227,44 5––– 368,578
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118126,915 228,014 – – (354,929) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (63,037) – (1,068) – (64,105)
At 31 December 2023 /H1118/H1118/H11183,344,492 5,110,311 9,087 67,364 174,630 8,705,884
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118126,015 184,708 5,049 2,746 1,538,909 1,857,427
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118456,102 531,392 – – (987,494) –
Acquired on acquisition of
a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1,164 1,164
Transfer from right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,645,43 2––– 1,645,432
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (178,693) (35) (1,717) – (180,445)
APPENDIX I ACCOUNTANTS’ REPORT
– I-47 –


--- page 537 ---
Buildings
Plant and
machinery
Furniture and
fixtures Motor vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 31 December 2024 /H1118/H1118/H11183,926,609 7,293,150 14,101 68,393 727,209 12,029,462
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 379,836 5,685 2,940 1,536,568 1,925,029
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118265,426 1,012,515 – – (1,277,941) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (75,056) (277) – – (75,333)
At 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H11184,192,035 8,610,445 19,509 71,333 985,836 13,879,158
DEPRECIATION AND
IMPAIRMENT
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118228,983 803,540 1,374 31,896 – 1,065,793
Provided for the year /H1118/H1118/H1118104,309 347,588 646 10,099 – 462,642
Impairment loss
recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 15,31 6––– 15,316
Eliminated on disposals /H1118/H1118 – (25,331) – (1,303) – (26,634)
At 31 December 2022 /H1118/H1118/H1118333,292 1,141,113 2,020 40,692 – 1,517,117
Provided for the year /H1118/H1118/H1118151,283 387,283 982 7,384 – 546,932
Impairment loss
recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 19,08 4––– 19,084
Eliminated on disposals /H1118/H1118 – (62,710) – (644) – (63,354)
At 31 December 2023 /H1118/H1118/H1118484,575 1,484,770 3,002 47,432 – 2,019,779
Provided for the year /H1118/H1118/H1118164,184 444,024 1,948 6,968 – 617,124
Transfer from right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 320,10 7––– 320,107
Impairment loss
recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 11,24 6––– 1 1,246
Eliminated on disposals /H1118/H1118 – (90,551) (30) (679) – (91,260)
At 31 December 2024 /H1118/H1118/H1118648,759 2,169,596 4,920 53,721 – 2,876,996
Provided for the year /H1118/H1118/H111849,928 269,673 1,070 2,779 – 323,450
Impairment loss
recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 9,55 9––– 9,559
Eliminated on disposals /H1118/H1118 – (72,787) (18) – – (72,805)
At 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118698,687 2,376,041 5,972 56,500 – 3,137,200
CARRYING V ALUES
At 31 December 2022 /H1118/H1118/H11182,743,152 3,487,510 2,605 20,809 140,109 6,394,185
At 31 December 2023 /H1118/H1118/H11182,859,917 3,625,541 6,085 19,932 174,630 6,686,105
At 31 December 2024 /H1118/H1118/H11183,277,850 5,123,554 9,181 14,672 727,209 9,152,466
At 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H11183,493,348 6,234,404 13,537 14,833 985,836 10,741,958
Note: In June 2023, Wudi Qixing High-Tech Aluminum Co., Ltd.* (ʮ̡) (“Wudi
Qixing”), an independent third party, injected certain assets related to an alumina factory and power
plant to Shandong Chuangyuan, and in return to obtain 20% equity interest of Shandong Chuangyuan.
Shandong Chuangyuan was then held by Innovation Group and Wudi Qixing as to 80% and 20%,
respectively.
After a short period in August 2023, Innovation Group acquired from Wudi Qixing the 20% equity
interest in Shandong Chuangyuan at a consideration equivalent to the appraisal value of the injected
assets, including property, plant and equipment of RMB368,578,000, leasehold lands of
RMB32,199,000 (as shown in note 16), together with an input value-added tax recoverable of
RMB38,235,000, totalling RMB439,012,000.
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 538 ---
The above items of property, plant and equipment (except for construction in progress) are depreciated on a
straight-line basis over the following estimated useful lives after taking into account their residual values:
Useful lives Residual value
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810-50 years 5%
Plant and 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/H11185-20 years 5%
Furniture and fixtures /H1118/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 5%
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184-5 years 5%
Certain buildings, plant and machinery and furniture and fixtures of the Group had been pledged as securities
for bank borrowings as at 31 December 2022, 2023 and 2024 as summarised in note 40.
The Group has obtained certificates for all buildings except for certain buildings with carrying amounts of
RMB186,329,000, RMB169,398,000 and RMB198,485,000 and RMB229,257,000 as at 31 December 2022, 2023 and
2024 and 31 May 2025, respectively, in which the Group is in the process of obtaining.
According to the relevant terms of construction agreement entered between Inner Mongolia Chuangyuan Alloy
Co., Ltd. *(ʮ̡)(“Chuangyuan Alloy”) and Group’s related party Shandong Hongjie New
Energy Technology Co., Ltd.* (ʮ̡)(“Shandong Hongjie”), ownership of photovoltaic
power station under the agreement belongs to Shandong Hongjie until the related payables had been settled by the
Group. Shandong Hongjie is a subsidiary of Hainan Fujuanyong trading Co., Ltd.*(ʮ̡)
(“Hainan Fujuanyong”). As at 31 May 2025, certain wind power plants amounting to RMB41,802,000 are treated as
pledged assets.
On 29 April 2025, Chuangyuan Alloy, Inner Mongolia Chuangyuan and Inner Mongolia Chuangyuan Smart
Energy Co., Ltd. * (ʮ̡) (“Chuangyuan Smart Energy”) entered into separate asset
disposal agreements with an independent third party to dispose of an electric power project, which includes an energy
storage project, a converting station and power lines, at considerations of RMB228,118,000, RMB53,742,000 and
RMB48,464,000, respectively. Since the assets attributable to the converting station and power lines have been
pledged as securities for bank borrowings as at 31 May 2025 and the mortgage cannot be released under the current
conditions, these assets are not classified as assets held for sale. Up to 31 May 2025, the Group has received
RMB132,743,000 from the independent third party.
During the year ended 31 December 2022, the directors of the Company conducted a review and determined
to abandon the development plan in relation to silicon business due to the management of the Group’s decision to
focus on the Group’s principal businesses. As a result, certain plant and machinery in relation to a silicon
manufacturing plant were impaired and an impairment of approximately RMB3,989,000 had been recognised in profit
or loss.
During the years ended 31 December 2022, 2023 and 2024 and 31 May 2025, Group wrote off the electrolytic
cell lining materials due to periodic maintenance or use of new cathode materials to improve production efficiency
and reduce energy consumption. The related impairment losses of the electrolytic cell lining materials were
approximately RMB11,327,000, RMB19,084,000, RMB11,246,000 and RMB9,559,000 respectively, which were
recognised in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 539 ---
The Group as lessor
The Group leases out a number of plant, machineries and office rooms under operating leases. The lease
typically run for an initial period of 1 year. The lease does not include variable lease payments. The properties are
held partly for rentals, and partly for the production of goods or administrative purposes. As they could not be sold
(or leased out under a finance lease) separately, and the portion which is held for use in the production of goods or
for administrative purposes is not insignificant, the properties are classified as property, plant and equipment. The
disaggregation of these plant, machineries and office rooms under operating leases included within plant and
machinery and buildings, and the reconciliation of the carrying amount at the beginning and end of the period are
set out as below:
Buildings
Plant and
machinery Total
RMB’000 RMB’000 RMB’000
COST
At 1 January 2022 and 31 December 2022 /H1118/H1118/H1118/H1118/H1118 –––
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/H1118108,947 141,767 250,714
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,947 141,767 250,714
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/H1118138,063 13,699 151,762
Termination of leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(19,771) (139,646) (159,417)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118227,239 15,820 243,059
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/H111821,493 – 21,493
At 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118248,732 15,820 264,552
DEPRECIATION
At 1 January 2022 and 31 December 2022 /H1118/H1118/H1118/H1118/H1118 –––
Provided for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,724 14,143 20,867
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,724 14,143 20,867
Provided for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,430 1,137 10,567
Eliminated on termination of leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,029) (13,607) (15,636)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,125 1,673 15,798
Provided for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,251 613 5,864
At 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,376 2,286 21,662
CARRYING V ALUES
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,223 127,624 229,847
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213,114 14,147 227,261
At 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118229,356 13,534 242,890
The Company
Construction in
progress
RMB’000
COST /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
At 1 January 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/H1118/H1118/H1118–
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/H11183,129
At 31 May 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/H1118/H1118/H1118/H11183,129
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 540 ---
16. RIGHT-OF-USE ASSETS
The Group
Leased plant
and machinery Leasehold lands Aircraft Offices Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H11181,805,275 600,896 – – 2,406,171
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 268,620 – – 268,620
At 31 December 2022 /H1118/H1118/H11181,805,275 869,516 – – 2,674,791
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883,569 17,581 – – 101,150
Capital injection from a
non-controlling interest
(note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 32,199 – – 32,199
Decrease due to
termination of leases /H1118/H1118/H1118(159,843) – – – (159,843)
At 31 December 2023 /H1118/H1118/H11181,729,001 919,296 – – 2,648,297
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 80,120 – – 80,120
Acquired on acquisition of
a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 12,045 – – 12,045
Decrease due to
termination of leases
(note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,645,432) – – – (1,645,432)
At 31 December 2024 /H1118/H1118/H111883,569 1,011,461 – – 1,095,030
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 304 169,251 15,477 185,032
Disposal of leasehold
lands /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (12,044) – – (12,044)
At 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H111883,569 999,721 169,251 15,477 1,268,018
DEPRECIATION
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118116,528 93,752 – – 210,280
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118185,027 16,790 – – 201,817
At 31 December 2022 /H1118/H1118/H1118301,555 110,542 – – 412,097
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118144,053 18,796 – – 162,849
Decrease due to
termination of leases /H1118/H1118/H1118(159,843) – – – (159,843)
At 31 December 2023 /H1118/H1118/H1118285,765 129,338 – – 415,103
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,305 21,125 – – 71,430
Decrease due to
termination of leases /H1118/H1118/H1118(320,107) – – – (320,107)
At 31 December 2024 /H1118/H1118/H111815,963 150,463 – – 166,426
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,693 8,880 2,853 1,595 18,021
Disposal of leasehold
lands /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (162) – – (162)
At 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H111820,656 159,181 2,853 1,595 184,285
Carrying amount
At 31 December 2022 /H1118/H1118/H11181,503,720 758,974 – – 2,262,694
At 31 December 2023 /H1118/H1118/H11181,443,236 789,958 – – 2,233,194
At 31 December 2024 /H1118/H1118/H111867,606 860,998 – – 928,604
At 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118
62,913 840,540 166,398 13,882 1,083,733
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 541 ---
Y ear ended
2022
Y ear ended
2023
Y ear ended
2024
Five Months ended 31 May
2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Expenses relating to short-
term leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118577 279 2,000 257 3,107
Total cash outflow for
leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118302,438 277,136 397,272 395,529 362,939
Note: During the year ended 31 December 2024, due to the early repayment of financing lease payments,
right-of-use assets transferred to plant and machinery.
During the Track Record Period, the Group leased various plant, machinery, offices and an aircraft for its
operations. Lease contracts are entered into for a fixed term ranging from 3 years to 8 years. Lease terms are
negotiated on an individual basis and contain a wide range of different terms and conditions. In determining the lease
term and assessing the length of the non-cancellable period, the Group applies the definition of a contract and
determines the period for which the contract is enforceable.
In addition, the Group has made lump sum payments upfront to government for leasehold lands. The Group
has obtained the land use right certificates for all such leasehold lands except for leasehold lands with carrying
amount of RMB233,848,000, RMB229,075,000, nil and nil at 31 December 2022, 2023 and 2024, and 31 May 2025,
respectively, in which the Group is in the process of obtaining.
Certain leasehold lands of the Group had been pledged as securities for bank borrowings as at 31 December
2022, 2023 and 2024 and 31 May 2025 as summarised in note 40.
The Group regularly entered into short-term leases for plant and machinery. As at 31 December 2022, 2023
and 2024 and 31 May 2025, the portfolio of short-term leases is similar to the portfolio of short-term leases to which
the short-term lease expense disclosed above.
Termination options
The Group has termination options in a number of leases for leased plant, machinery and aircraft. These are
used to maximise operational flexibility in terms of managing the assets used in the Group’s operations.
The Group reassesses whether it is reasonably certain not to exercise a termination option, upon the occurrence
of either a significant event or a significant change in circumstances that is within the control of the lessee. In May
2024, the finance lease contracts were terminated due to the early repayment.
Restrictions or covenants on leases
As at 31 December 2022, 2023 and 2024 and 31 May 2025, lease liabilities of RMB954,597,000,
RMB806,396,000, RMB428,622,000 and RMB219,388,000 are recognised with related right-of-use assets of
RMB1,503,720,000, RMB1,443,236,000, RMB67,606,000 and RMB243,193,000 respectively. The lease agreements
do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased
assets may not be used as security for borrowing purposes. The Group is restricted from assigning and subleasing the
leased assets outside the Group.
Sale and leaseback transactions – seller-lessee
To better manage the Group’s capital structure and financing needs, the Group sometimes enters into sale and
leaseback arrangements in relation to machinery. These legal transfers do not satisfy the requirements of IFRS 15 to
be accounted for as a sale of the machinery. During the years ended 31 December 2022, 2023 and 2024 and 31 May
2025, the Group raised RMB30,000,000, RMB80,000,000, RMB104,000,000 and RMB600,000,000 borrowings in
respect of such sale and leaseback arrangements, respectively.
Details of the borrowings are set out in notes 29 and 36(b).
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 542 ---
The Company
Offices
RMB’000
Cost
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
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/H111815,477
At 31 May 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/H1118/H1118/H1118/H111815,477
DEPRECIATION
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
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/H11181,595
At 31 May 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/H1118/H1118/H1118/H11181,595
Carrying amount
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
At 31 May 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/H1118/H1118/H1118/H111813,882
17. INTANGIBLE ASSETS
Aluminum
production
quota (note i)
Power
generation
capacity
indicators
(note ii)
Sewage charges
license (note iii)
Computer
software Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
COST
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H11183,428,751 50,377 21,900 2,182 3,503,210
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 258,962 – – 258,962
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(173,968) – – – (173,968)
At 31 December 2022 and
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,254,783 309,339 21,900 2,182 3,588,204
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 748 748
At 31 December 2024 and
31 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H11183,254,783 309,339 21,900 2,930 3,588,952
AMORTISATION
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118132,448 1,265 17,520 2,182 153,415
Provided for the year /H1118/H1118/H1118/H111865,095 5,506 4,380 – 74,981
At 31 December 2022 /H1118/H1118/H1118197,543 6,771 21,900 2,182 228,396
Provided for the year /H1118/H1118/H1118/H111865,097 6,187 – – 71,284
At 31 December 2023 /H1118/H1118/H1118262,640 12,958 21,900 2,182 299,680
Provided for the year /H1118/H1118/H1118/H111865,096 6,187 – 304 71,587
At 31 December 2024 /H1118/H1118/H1118327,736 19,145 21,900 2,486 371,267
Provided for the year /H1118/H1118/H1118/H111827,123 2,578 – 125 29,826
At 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118354,859 21,723 21,900 2,611 401,093
CARRYING V ALUES
At 31 December 2022 /H1118/H1118/H11183,057,240 302,568 – – 3,359,808
At 31 December 2023 /H1118/H1118/H11182,992,143 296,381 – – 3,288,524
At 31 December 2024 /H1118/H1118/H11182,927,047 290,194 – 444 3,217,685
At 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H11182,899,924 287,616 – 319 3,187,859
APPENDIX I ACCOUNTANTS’ REPORT
– I-53 –


--- page 543 ---
The above intangible assets have finite useful lives. Such intangible assets are amortised on a straight-line
basis over the following estimated useful lives:
Useful lives
Aluminum production quota /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 years
Power generation capacity indicators /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 years
Sewage charges license /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/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
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/H11185 years
Aluminum production quota of the Group had been pledged as securities for bank borrowings as at 31
December 2022, 2023 and 2024 and 31 May 2025 as summarised in note 40.
Notes:
(i) Historically the Group acquired the annual aluminum production quota from independent third parties
for its aluminum production lines. Aluminum production quota are initially recorded at cost and
subsequently stated at cost less any amortisation. Aluminum production quota do not have a definite
legal or prescribed service life. Amortisation is provided on a straight-line basis over estimated expected
usage of the asset by management of the Group considering the replacement of electrolytic cell and
useful life of related lands and buildings.
(ii) The Group acquired the annual power generation capacity indicators from independent third parties for
providing thermal power to its aluminum production lines. Power generation capacity indicators are
initially recorded at cost and subsequently stated at cost less any amortisation. Power generation
capacity indicators do not have a definite legal or prescribed service life. Amortisation is provided on
a straight-line basis over estimated expected usage of the asset by management of the Group. As the
power generation capacity indicators are obtained for thermal power plant to provide electricity supply
for aluminum smelting process, the management of the Group determined the useful life of power
generation capacity indicators is the same as aluminum production quota.
(iii) The Group acquired sewage charges license from a government authority. Amortisation is provided on
a straight-line basis over 5 years from the commence date of discharge according to the sewage charges
acquisition agreement.
18. DEFERRED TAXATION
For the purpose of presentation in the consolidated statements of financial position, certain deferred tax assets
and liabilities have been offset. The following is the analysis of the deferred tax balances for financial reporting
purposes:
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,104 5,608 83,126 –
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(20,465) (17,281) – (60,262)
(13,361) (11,673) 83,126 (60,262)
APPENDIX I ACCOUNTANTS’ REPORT
– I-54 –


--- page 544 ---
The following are the major deferred tax balances recognised and movements thereon during the Track Record
Period:
Impairment
of assets
Deferred
income
Accrued
expense
Unrealised
profit on
intra-group
sales
Right-of-use
assets
Lease
liabilities
Accelerated
tax
depreciation
Amortisation
of intangible
assets Tax losses ECL
Share of
results of a
joint
venture Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January
2022 /H1118/H1118/H1118/H1118/H1118/H11181,926 1,284 94,914 (9,117) (34,252) 34,397 (108,368) 19,867 – – – 651
Credit (charge) to
profit or loss /H1118/H1118/H1118 3,657 2,907 6,016 (2,101) 22,835 (22,768) (51,663) 9,764 16,979 362 – (14,012)
At 31 December 2022 /H1118 5,583 4,191 100,930 (11,218) (11,417) 11,629 (160,031) 29,631 16,979 362 – (13,361)
Credit (charge) to
profit or loss /H1118/H1118/H1118 1,503 (469) 14,165 7,640 (8,301) 8,201 (25,064) 9,764 (5,802) 51 – 1,688
At 31 December 2023 /H1118 7,086 3,722 115,095 (3,578) (19,718) 19,830 (185,095) 39,395 11,177 413 – (11,673)
Credit (charge) to
profit or loss /H1118/H1118/H1118 1,687 15,897 19,853 59,610 2,817 (2,601) (1,176) 9,764 (11,177) (3) 128 94,799
At 31 December 2024 /H1118 8,773 19,619 134,948 56,032 (16,901) 17,229 (186,271) 49,159 – 410 128 83,126
(Charge) credit to
profit or loss /H1118/H1118/H1118 (1,687) (11,665) 7,591 (55,334) (40,426) 32,606 (70,443) (3,678) – (224) (128) (143,388)
At 31 May 2025 /H1118/H1118/H1118 7,086 7,954 142,539 698 (57,327) 49,835 (256,714) 45,481 – 186 – (60,262)
As at 31 December 2022, 2023 and 2024 and 31 May 2025, the Group had unused tax losses approximately
RMB78,585,000, RMB53,642,000, RMB3,182,000 and RMB9,266,000, respectively, available for offset against
future profits. A deferred tax asset has been recognised in respect of the approximately RMB67,916,000,
RMB44,709,000, nil and nil of such losses. No deferred tax asset has been recognised in respect of the remaining
approximately RMB10,669,000, RMB8,933,000, RMB3,182,000 and RMB9,266,000 due to the unpredictability of
future profit streams with expiry dates as disclosed in the following table.
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
2026 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,254 5,953 – –
2027 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,415 2,391 2 2
2028 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118NA 589 231 231
2029 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118NA NA 2,949 2,949
2030 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118NA NA NA 6,084
10,669 8,933 3,182 9,266
As at 31 December 2022, 2023 and 2024 and 31 May 2025, the Group had no other unrecognised deductible
temporary differences.
APPENDIX I ACCOUNTANTS’ REPORT
– I-55 –


--- page 545 ---
19. INVENTORIES
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118852,321 627,835 798,099 1,457,353
Work-in-progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118580,439 556,186 666,720 713,876
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118248,439 6,138 48,761 24,904
Spare parts and others /H1118/H1118/H1118/H1118/H1118/H1118/H111879,838 64,979 64,124 57,153
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,761,037 1,255,138 1,577,704 2,253,286
As at 31 December 2022, 2023 and 2024 and 31 May 2025, certain raw materials amounting to
RMB163,385,000, RMB65,095,000, nil and nil, although ownership belonged to the Group, had been restricted to
take out from the bonded warehouses until the related payables to a finance provider had been settled by the Group
according to the relevant terms of agreement with the finance provider. The Group had settled all the outstanding
payables in respect of these raw materials subsequently in 2023 and 2024, and the restrictions of these raw materials
had no longer been imposed to the Group, accordingly.
Certain inventories of the Group had been pledged as securities for bank borrowings as at 31 May 2025 as
summarised in note 40.
All inventories are expected to be recovered within 12 months.
20. TRADE RECEIV ABLES
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables
– related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,031 77,086 17,159 32,000
– third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,757 19,441 22,507 53,630
40,788 96,527 39,666 85,630
Less: allowance for credit losses /H1118 (556) (396) (526) (875)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,232 96,131 39,140 84,755
As at 1 January 2022, trade receivables amounted to RMB128,840,000 (net of impairment loss allowance of
nil).
The following is an aged analysis of trade receivables, net of allowance for impairment presented based on the
dates of acceptance of goods, which approximate the respective revenue recognition dates, at the end of the reporting
period:
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 month /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,053 80,243 33,132 73,410
1 to 12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,179 15,410 5,191 8,765
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 478 817 2,580
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,232 96,131 39,140 84,755
Before accepting any new customer, the Group will internally assess the credit quality of the potential
customer and define appropriate credit limits.
Details of impairment assessment of receivables are set out in note 36(b).
As of 31 December 2022, 2023 and 2024 and 31 May 2025, included in the Group’s trade receivables balance
are debtors with aggregate carrying amount of RMB2,179,000, RMB15,888,000, RMB6,008,000 and
RMB11,345,000, respectively, which are past due but not considered as in default because the management of the
Group, according to the historical settlement pattern, industry practice and the Group’s historical actual loss
experience, had assessed that the probability of settlement from their customers was high.
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 546 ---
21. RECEIV ABLES AT FVTOCI
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,102 62,678 485,699 90,972
At the end of each reporting periods, the Group’s bills received by Group with the following maturity.
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
0-180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,102 62,678 485,499 90,972
181-365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 200 –
29,102 62,678 485,699 90,972
RMB430,000,000 of receivables at FVTOCI are pledged as securities for bank borrowings as at 31 December
2024 as summarised in note 40.
The Group considers the credit risk of bank acceptance bills receivables is limited because counterparties are
banks with good credit standing assigned by credit agencies, and the ECL are considered insignificant. For
commercial acceptance bills receivables issued by customers, the Group performed impairment assessment under
ECL model individually.
Details of impairment assessment and fair value measurement are set out in note 36(b).
21A. Transfers of Financial Assets
21A.1 Transferred financial assets that are not derecognised in their entirety
The following were the Group’s financial assets as at 31 December 2022, 2023 and 2024 and 31 May 2025,
that were transferred to suppliers for settlement of trade payables by endorsing or banks to obtain bank loans by
discounting on a full recourse basis. As the Group has not transferred the significant risks and rewards, it continues
to recognise the full carrying amount. These financial assets are carried at amortised cost in the consolidated
statements of financial position.
At 31 December 2022
Bills endorsed to
suppliers with full
recourse
RMB’000
Carrying amount of transferred 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/H111826,687
Carrying amount of associated 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(26,687)
Net position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
At 31 December 2023
Bills endorsed to
suppliers with full
recourse
RMB’000
Carrying amount of transferred 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/H111852,495
Carrying amount of associated 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(52,495)
Net position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/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 ACCOUNTANTS’ REPORT
– I-57 –


--- page 547 ---
At 31 December 2024
Bills discounted to
banks with full
recourse
Bills endorsed to
suppliers with full
recourse Total
RMB’000 RMB’000 RMB’000
Carrying amount of transferred assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118430,000 38,158 468,158
Carrying amount of associated liabilities /H1118/H1118/H1118/H1118/H1118/H1118(430,000) (38,158) (468,158)
Net position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
At 31 May 2025
Bills endorsed to
suppliers with full
recourse
RMB’000
Carrying amount of transferred 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/H111820,487
Carrying amount of associated 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(20,487)
Net position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
21A.2 Transferred financial assets that are derecognised in their entirety but have continuing involvement
As of 31 December 2022, 2023 and 2024 and 31 May 2025, the Group had derecognised bills discounted to
banks or endorsed to certain suppliers, but not expired on a full recourse basis amounting to RMB4,507,966,000,
RMB2,631,551,000, RMB2,066,782,000 and RMB2,182,254,000, respectively. These bills were issued or guaranteed
by reputable PRC banks with high credit ratings, therefore the directors of the Company considered that the
substantial risks in relation to these bills were interest risk as the credit risk arising from these bills were minimal,
the Group had transferred substantially all the risks of these bills to relevant banks or suppliers. However, if the bills
cannot be accepted at maturity, the banks or suppliers have the right to require the Group pay off the outstanding
balance. Therefore, the Group continued the involvement in them, but the amount arising from continuing
involvement is insignificant.
22. PREPAYMENTS AND OTHER RECEIV ABLES
The Group
31 December 31 December 31 December 31 May
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Prepayments to suppliers /H1118/H1118/H1118/H1118/H1118/H1118194,704 95,284 644,578 226,297
Prepaid expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,656 10,182 18,305 27,274
V alue-added tax recoverable /H1118/H1118/H1118/H111851,514 8,686 94,191 291,265
Amount due from an independent
third party (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,000 30,740 – –
Deposits (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,018 36,908 56,274 23,356
Refundable cultivated land
occupation tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 34,230
Consideration receivable for
disposal of land use right /H1118/H1118/H1118/H1118 – – – 11,892
Refundable customs deposits /H1118/H1118/H1118 – – – 8,528
Deferred issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,260 6,778
Refundable prepayments on
acquisition of long-lived assets
(note iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 358,358
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,459 13,372 19,247 14,238
344,351 195,172 837,855 1,002,216
APPENDIX I ACCOUNTANTS’ REPORT
– I-58 –


--- page 548 ---
31 December 31 December 31 December 31 May
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Less: allowance for impairment
losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,175) (13,506) (14,042) (12,900)
331,176 181,666 823,813 989,316
Non-current
Refundable rental deposits /H1118/H1118/H1118/H1118/H1118 – – 2,303 2,292
331,176 181,666 826,116 991,608
Notes:
(i) The amount of RMB50,000,000 represented a short-term advance to an independent third party, with
maturity date on 20 June 2023 and carried at a fixed interest rate of 6% per annum. Upon the maturity
date, as agreed with the counterparty, the amount of RMB30,000,000 was further extended to 31
December 2024. The amount was subsequently settled in full in September 2024.
(ii) The amounts mainly represent the deposits paid to suppliers for the procurement of bauxite. These
deposits are to be offset against with trade payables from purchase orders upon delivery.
(iii) On 31 May 2025, Shandong Chuangyuan terminated the contract for the purchase of power plant
equipment with an independent third-party supplier. Prepayment on acquisition of long-lived assets of
RMB358,358,000 will be refunded within one year.
The Company
31 December 31 December 31 May
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current
Deferred issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,260 6,778
Prepaid expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 529 4,746
– 5,789 11,524
Non-current
Refundable rental deposit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,303 2,292
– 8,092 13,816
23. FINANCIAL ASSETS AT FVTPL
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Wealth management products /H1118/H1118/H1118 30,044 – – 699,900
During the year ended 31 December 2022 and 31 May 2025, the Group entered into several contracts of wealth
management products with reputable banks in the PRC, of which will be matured within 12 months.
Details of its fair value measurement is set out in note 36(b).
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 549 ---
24. AMOUNTS DUE FROM RELATED PARTIES
Amounts due from related parties arose from non-trade transactions, and are interest free, unsecured and
repayable on demand. Details are set out in note 41(b)(i).
25. RESTRICTED BANK DEPOSITS/CASH AND CASH EQUIV ALENTS
Restricted bank deposits
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Deposits for bills payable and
letter of credit (note i) /H1118/H1118/H1118/H1118/H1118/H11182,764,575 1,309,070 666,924 591,309
Deposits for bank borrowing
(note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 14,516 5
Others (note iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,10 5–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,798,680 1,309,070 681,440 591,314
Notes:
(i) The Group’s restricted bank deposits are deposited to banks for the issue of bills payables and letter of credit
by the Group primarily for the purchases of materials. The restricted bank deposits will be released upon the
settlement of relevant bills payables and letter of credit, which are normally within a repayment period of 1
year, and are therefore classified as current assets.
As at 31 December 2022, 2023 and 2024 and 31 May 2025, restrict bank deposits for the issue of bills payables
and letters of credit carried interest at market rates ranging from 1.71% to 3.91%, 1.71% to 2.80%, 0.05% to
1.60% and 0.05% to 1.60% per annum, respectively.
(ii) The use of deposits needs to be reviewed and approved by the bank. The deposits carried interest at market
rates ranging from 0.00% to 1.60%.
(iii) The deposits were restricted by banks pertaining to certain construction contract disputes. Such restricted
deposits were released in 2023.
Details of impairment assessment of restrict bank deposits are set out in the note 36(b).
Cash and cash equivalents
As at 31 December 2022, 2023 and 2024 and 31 May 2025, bank balances carried interest at market rates
ranging from 0.05% to 0.35%, 0.05% to 0.35%, 0.00% to 0.35% and 0.00% to 0.35% per annum, respectively.
Details of impairment assessment of cash and cash equivalents are set out in the note 36(b).
26. TRADE, BILLS AND OTHER PAYABLES
The Group
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,360,244 980,926 1,246,574 1,179,519
Bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118204,279 407,623 72,250 150,000
Bills payables under note
financing arrangements
(note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,871,030 2,087,060 110,000 500,000
5,435,553 3,475,609 1,428,824 1,829,519
APPENDIX I ACCOUNTANTS’ REPORT
– I-60 –


--- page 550 ---
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Other payables – current
Payables for acquisition of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118701,870 721,485 596,102 1,183,798
Other taxes payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118178,362 170,990 196,738 206,375
Payables to a finance provider
(note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118163,385 65,095 – –
Amount due to independent
third parties (note iii) /H1118/H1118/H1118/H1118/H111896,199 59,999 482,781 212,920
Payroll and welfare payables /H1118/H1118 69,464 65,718 85,167 48,881
Payables for acquisition of
carbon emissions rights /H1118/H1118/H1118/H111823,874 22,358 24,991 23,272
Deposits (note iv) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,695 14,466 52,367 46,692
Outsourced service payable /H1118/H1118/H1118 7,858 11,123 6,050 5,638
Advance receipt of value-
added tax from customers /H1118/H1118 3,424 907 48,408 44,656
Investment deposit received
from an independent third
party (note v) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 80,000 – –
Accrued listing expenses /H1118/H1118/H1118/H1118 – – 10,003 6,568
Accrued issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,269 2,007
Advanced receipt for disposal
of property, plant and
equipment (note 15) /H1118/H1118/H1118/H1118/H1118/H1118– – – 132,743
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,445 10,903 10,751 12,809
1,300,576 1,223,044 1,516,627 1,926,359
6,736,129 4,698,653 2,945,451 3,755,878
Other payables – non-current
Payable to an independent
third party under bankruptcy
reorganisation (note vi) /H1118/H1118/H1118/H111868,071 68,071 68,071 –
Payable for acquisition of
aluminum production quota
(note vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118587,919 632,911 681,485 702,595
655,990 700,982 749,556 702,595
Notes:
i. Certain of the Company’s subsidiaries received bills issued by other Group entities in respect of certain
intra-group transactions. The receiving entities of the Group had discounted such bills in full to bank
or non-bank institutions to obtain financing. During the years ended 31 December 2022, 2023 and 2024
and the five months ended 31 May 2025, such internally issued bills which had been discounted to banks
or non-bank institutions amounted to RMB3,871,030,000, RMB2,087,060,000, RMB1,260,000,000 and
RMB500,000,000, respectively, which also represented the aggregate amount of the Group’s underlying
intragroup transactions settled by bills. The cash flows of such transactions have been presented in cash
flow statement as financing activities.
ii. The Group has entered into supplier financing arrangements. Under these arrangements, the finance
provider settles the prepayments to the sellers on behalf of the Group. The Group then settles with the
finance provider within 90 days after settlement by the finance provider with fixed interest ranges from
4.8% to 5.4% per annum. These arrangements have extended the payment terms beyond the original due
dates of respective invoices. Information of the Group’s supplier finance arrangements is set out in note
34b.
APPENDIX I ACCOUNTANTS’ REPORT
– I-61 –


--- page 551 ---
iii. RMB96,199,000, RMB59,999,000, RMB289,499,000 and nil at 31 December 2022, 2023 and 2024 and
31 May 2025, respectively, represent short term advances from an independent third party, the related
party of the independent third party under a reorganisation project disclosed in note vi, which was
unsecured, interest free and repayable on demand. The amount was subsequently settled in full in
January and March 2025.
RMB100,000,000 at 31 December 2024 represent short term advances from two independent third party.
The amount is unsecured, carried at interest rate of 5.7% and repayable within one year, and was
subsequently settled in full in February and March 2025. RMB200,706,000 at 31 May 2025 represent
short term advances from the same independent third party. The amount is unsecured, carried at interest
rate of 2.85% and repayable within one year.
RMB88,250,000 at 31 December 2024 represent short term advances from an independent third party.
The amount is unsecured, carried at interest rate of 5.7% and repayable within one year. Amount of
RMB88,250,000 was subsequently settled in full in April 2025.
RMB5,032,000, RMB12,214,000 at 31 December 2024 and 31 May 2025, respectively, represent short
term advances from Carnaby Management. The amount is unsecured, carried at interest rate of 5% and
repayable within one year.
iv. Amounts represented earnest deposits received by the Group in relation to framework agreements
entered into with suppliers. These earnest deposits received would either be offset with the Group’s
future purchase orders or released to the suppliers upon maturity or termination of the framework
arrangements.
v. In December 2023, the Group entered into a share sale agreement with an independent third party,
pursuant to which Inner Mongolia Chuangyuan conditionally agreed to dispose of and the third party
conditionally agreed to purchase 49% equity interests in Chuangyuan Alloy. RMB80,000,000 had been
received as the investment deposit.
Such transaction has been subsequently terminated in August 2024 since the management of the Group
decided to develop the projects on its own and the amount was repaid in full in June 2024.
vi. Amount represented the payable for acquisition of property, plant and equipment to an independent third
party under a reorganisation project. The amount was fully settled in March 2025.
vii. Amount represented the consideration payables to an independent third party, which was a related party
of the independent third party under a reorganisation project as disclosed in note vi, for purchase of the
annual aluminum production quota in the quantity of 140,000 tons for cash consideration of
RMB792,453,000, which was payable in four instalments after July 2026. Payable for acquisition of
aluminum production quota was measured at amortised cost using the effective interest rate method and
7.375% per annum. In June 2025, a supplementary agreement was entered between Inner Mongolia
Chuangyuan and the independent third party, pursuant to which Inner Mongolia Chuangyuan agreed to
change the repayment terms. RMB594,340,000 has been paid in June 2025 and the remaining amount
will be paid after 1 January 2027. The adjustment to the carrying amount of payable for acquisition of
aluminum production quota is recognised in other loss of RMB65 million at the date of the payment term
modification subsequent to 31 May 2025.
The suppliers generally allow the credit period ranged from 0 to 180 days to the Group over the Track Record
Period.
APPENDIX I ACCOUNTANTS’ REPORT
– I-62 –


--- page 552 ---
The following is an aged analysis of trade payables presented based on the invoice dates at the end of each
reporting period:
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118879,557 567,806 633,473 691,850
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118294,715 215,555 292,816 247,069
91 days to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,103 66,936 105,205 25,720
Over 181 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,869 130,629 215,080 214,880
1,360,244 980,926 1,246,574 1,179,519
The following is an aged analysis of bills payables presented based on maturity date at the end of each
reporting period:
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
0-180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,121,249 2,494,683 182,250 650,000
181-365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118954,06 0–––
4,075,309 2,494,683 182,250 650,000
The Company
31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000
Accrued listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 10,003 6,568
Accrued issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,269 2,007
Amount due to an independent third party /H1118/H1118/H1118/H1118 – 5,032 5,029
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– 323 91
– 18,627 13,695
27. CONTRACT LIABILITIES
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Alumina and other related types
of products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,649 5,748 107,086 67,607
Electrolytic aluminum –
aluminum ingots /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,537 – 264,389 276,192
Scrap and other materials /H1118/H1118/H1118/H1118/H1118150 1,231 1,332 256
26,336 6,979 372,807 344,055
As at 1 January 2022, contract liabilities amounted to RMB59,071,000.
A contract liability represents the Group’s obligation to transfer goods to a customer for which the Group has
received consideration from the customer.
Contract liabilities that are expected to be settled within the Group’s normal operating cycle are classified as
current liabilities based on the Group’s earliest obligation to transfer goods to the customers.
APPENDIX I ACCOUNTANTS’ REPORT
– I-63 –


--- page 553 ---
The following table shows how much of the revenue recognised that was included in the balance of contact
liabilities at the beginning the year.
Y ear ended 2022 Y ear ended 2023 Y ear ended 2024
Five months ended
31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Electrolytic aluminum –
aluminum ingots /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,012 11,537 – 264,389
Alumina and other related types
of products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118373 14,649 5,748 107,086
Scrap and other materials /H1118/H1118/H1118/H1118/H11181,686 150 1,231 1,332
59,071 26,336 6,979 372,807
28. LEASE LIABILITIES
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Lease liabilities payable:
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280,630 346,554 10,698 46,539
Within a period of more than one
year but
not exceeding two years /H1118/H1118/H1118/H1118/H1118336,152 41,481 11,002 42,847
Within a period of more than two
years but
not exceeding five years /H1118/H1118/H1118/H1118337,815 394,095 394,618 122,783
Within a period of more than
five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 24,266 12,304 7,219
954,597 806,396 428,622 219,388
Less: Amount due for settlement
within one year shown under
current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(280,630) (346,554) (10,698) (46,539)
Amount due for settlement after
12 months shown under non-
current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118673,967 459,842 417,924 172,849
As at 31 December 2022, 2023 and 2024 and 31 May 2025, the incremental borrowing rates applied to lease
liabilities ranged from 2.55% to 10.36%, 2.80% to 10.36%, 2.55% to 2.80% and 2.55% to 5.00% per annum,
respectively.
As at 31 May 2025, lease liabilities of RMB134,845,000 were guaranteed by Innovation Group. These
guarantee will be released prior to the Listing as represented by management of the Group.
The Company
31 May 2025
RMB’000
Lease liabilities payable:
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,465
Within a period of more than one year but not exceeding two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,744
Within a period of more than two years but not exceeding five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,634
14,843
Less: Amount due for settlement within one year shown under current liabilities /H1118/H1118/H1118 (5,465)
Amount due for settlement after 12 months shown under non-current liabilities /H1118/H1118/H1118/H1118 9,378
As at 31 May 2025, the incremental borrowing rates applied to lease liabilities was 5.00% per annum.
APPENDIX I ACCOUNTANTS’ REPORT
– I-64 –


--- page 554 ---
29. BANK AND OTHER BORROWINGS
31 December 2022 31 December 2023 31 December 2024 31 May 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,807,661 9,124,307 9,454,926 11,105,395
Bank loans under supplier
finance
arrangements (note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 77,500 86,960 100,892
Other loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,615 80,000 1,406,357 1,315,104
10,830,276 9,281,807 10,948,243 12,521,391
Fixed-rate borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H111810,830,276 9,281,807 9,330,886 10,345,271
V ariable-rate borrowings /H1118/H1118/H1118/H1118/H1118/H1118– – 1,617,357 2,176,120
10,830,276 9,281,807 10,948,243 12,521,391
Secured and guaranteed /H1118/H1118/H1118/H1118/H1118/H111810,830,276 9,201,133 9,503,894 9,907,165
Secured and unguaranteed /H1118/H1118/H1118/H1118/H1118 – – 400,000 –
Unsecured and guaranteed /H1118/H1118/H1118/H1118/H1118 – 3,174 957,389 2,513,334
Unsecured and unguaranteed /H1118/H1118/H1118 – 77,500 86,960 100,892
10,830,276 9,281,807 10,948,243 12,521,391
Carrying amount repayable
(based on scheduled repayment
terms)
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,342,273 4,250,981 4,941,606 6,676,496
More than one year but not
exceeding
two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,021,003 1,958,826 4,663,342 4,166,382
More than two years but not
exceeding
five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118467,000 3,072,000 700,650 883,858
Within a period of more than
five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 642,645 794,655
10,830,276 9,281,807 10,948,243 12,521,391
Less: Amount due for settlement
within one year and shown
under current liabilities /H1118/H1118/H1118/H1118/H1118(8,342,273) (4,250,981) (4,941,606) (6,676,496)
Amounts shown under non-
current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,488,003 5,030,826 6,006,637 5,844,895
Note: bank loans under supplier finance arrangements
The Group has entered into certain supplier finance arrangements with Bank of Jinzhou in 2023, 2024 and
2025, and Bank of Qingdao in 2025. Under these arrangements, Bank of Jinzhou and Bank of Qingdao settle the
prepayments to the sellers on behalf of the Group. The Group’s obligations to suppliers are legally extinguished on
settlement by Bank of Jinzhou and Bank of Qingdao. The Group then settles with Bank of Jinzhou within 1 year after
settlement by Bank of Jinzhou with fixed interest ranges from 3.10%-3.80% per annum and settles with Bank of
Qingdao within 1 year after settlement by Bank of Qingdao with fixed interest ranges from 3.95%-4.50% per annum.
These arrangements have extended the payment terms, which may be extended beyond the original due dates of
respective invoices. Information of the Group’s supplier finance arrangements is set out in note 34b.
APPENDIX I ACCOUNTANTS’ REPORT
– I-65 –


--- page 555 ---
The ranges of effective interest rates (which are also equal to contracted interest rates) per annum on the
Group’s borrowings are as follows:
31 December 2022 31 December 2023 31 December 2024 31 May 2025
Effective interest rate
– fixed-rate borrowings /H1118/H1118/H1118/H1118/H1118/H1118
4.46% to
7.50%
3.65% to
8.64%
3.10% to
9.00%
3.10% to
8.64%
– variable-rate borrowings /H1118/H1118/H1118/H1118/H1118N/A N/A
2.90% to
4.95%
2.90% to
5.64%
Types of borrowings are as follows:
Counter party Types of borrowings Guaranteed/secured by
31 December
2022
31 December
2023
31 December
2024
31 May
2025 Notes
RMB’000 RMB’000 RMB’000 RMB’000
Bank of Jinzhou*
(ᎀψვБ) /H1118/H1118/H1118
Secured and guaranteed
bank loans
Guaranteed by Mr. Cui**
and Ms. Wang Xiaomei
(“Ms. Wang”)**, spouse
of Mr. Cui, Innovation
Group** and certain
subsidiaries of the
Group. Secured by
certain property, plant
and equipment, right-of
use assets and intangible
assets of the Group
3,864,802 9,044,196 7,524,560 6,889,467
Guaranteed by the legal
representative at the
time of signing the
borrowing agreement,
Mr. Cui** and Ms.
Wang**, and certain
subsidiaries of the
Group. Secured by
certain property, plant
and equipment, right-of
use assets and intangible
assets of the Group
6,942,859 – – –
The Group pledged 100%
equity of Inner
Mongolia Chuangyuan
as securities for all of
the above borrowings
Unsecured and
unguaranteed bank
loans under supplier
finance arrangements
N/A – 77,500 86,960 36,970
10,807,661 9,121,696 7,611,520 6,926,437 a
APPENDIX I ACCOUNTANTS’ REPORT
– I-66 –


--- page 556 ---
Counter party Types of borrowings Guaranteed/secured by
31 December
2022
31 December
2023
31 December
2024
31 May
2025 Notes
RMB’000 RMB’000 RMB’000 RMB’000
Bank of Weifang*
(ᐂѥვБ) /H1118/H1118/H1118
Secured and guaranteed
bank loans
Guaranteed by Innovation
Group**. Secured by
certain right-of use
assets of the Group
– 76,937 80,120 –
Guaranteed bank loans Guaranteed by Innovation
Group**
– 3,174 – –
Guaranteed by Mr. Cui**,
Innovation Group**, and
certain subsidiaries of
the Group.
– – – 69,135
– 80,111 80,120 69,135 b
Shandong Wudi
Rural
Commercial
Bank* (ೌ಑
༵ӀਠุვБ) /H1118
Secured and guaranteed
bank loans
Guaranteed by Mr. Wang
Chao**, former
management of
Shandong Chuangyuan.
Secured by certain right-
of-use assets of the
Group
– – 29,029 –
Guaranteed by Mr. Guo
Wei**, management of
Shandong Chuangyuan.
Secured by certain right-
of-use assets of the
Group
– – – 71,064
– – 29,029 71,064 c
Huaxia Bank* ( ശ
ვБ) /H1118/H1118/H1118/H1118
Secured and guaranteed
bank loans
Guaranteed by Mr. Cui**,
Ms. Wang** and
Innovation Group**.
Secured by certain right-
of-use assets and bank
deposits of the Group
– – 400,383 – d
Industrial and
Commercial
Bank of China*
(ʈਠვБ) /H1118/H1118/H1118
Secured and guaranteed
bank loans
Guaranteed by Mr. Cui**,
Ms. Wang**, Innovation
Group** and certain
subsidiaries of the
Group. Secured by
certain property, plant,
right-of-use assets of the
Group, the right to
collect electricity
charges and 100% equity
of Chuangyuan Alloy
– – 600,242 804,576 e
Far East Horizon
Financial
Leasing
(Guangdong)
Ltd.* (ڦ
ፄ༟ॡ༣(؇)
ʮ̡) /H1118/H1118/H1118
Secured and guaranteed
other loans
Guaranteed by Mr. Cui**,
Innovation Group** and
certain subsidiaries of
the Group. Secured by
certain property, and
equipment of the Group
under sale and leaseback
arrangement
– 80,000 42,005 31,905 m
APPENDIX I ACCOUNTANTS’ REPORT
– I-67 –


--- page 557 ---
Counter party Types of borrowings Guaranteed/secured by
31 December
2022
31 December
2023
31 December
2024
31 May
2025 Notes
RMB’000 RMB’000 RMB’000 RMB’000
Far East
International
Financial
Leasing Co.,
Ltd.* (਷ყ
ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118
Secured and guaranteed
other loans
Guaranteed by Mr. Cui**
and certain subsidiaries
of the Group. Secured
by certain property,
plant and equipment of
the Group under sale
and leaseback
arrangement
22,61 5–––
JD International
Financial
Leasing Co.,
Ltd* (਷ყ
ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118
Secured and guaranteed
other loans
Guaranteed by Innovation
Group**. Secured by
certain property, and
equipment of the Group
under sale and leaseback
arrangement
– – 38,351 30,282 i
Bank of Beijing*
(̏ԯვБ) /H1118/H1118/H1118
Secured and guaranteed
bank loans
Guaranteed by Innovation
Group**. Secured by
certain right-of-use
assets of the Group
– – 92,410 – f
China’s Industrial
Bank* ( ጳุვ
Б) /H1118/H1118/H1118/H1118/H1118/H1118
Secured and guaranteed
bank loans
Guaranteed by Mr. Cui**,
Ms. Wang** and
Innovation Group**.
Secured by certain right-
of-use assets, property,
plant and equipment of
the Group
– – 616,732 621,747
Guaranteed bank loans Guaranteed by Mr. Cui**,
Ms. Wang**, Innovation
Group** and certain
subsidiaries of the
Group.
– – 111,389 222,209
– – 728,121 843,956 g
China Merchants
Bank* (ਠვ
Б) /H1118/H1118/H1118/H1118/H1118/H1118
Secured bank loans Secured by certain
receivables at FVTOCI.
– – 400,000 –
Secured and guaranteed
bank loans
Guaranteed by Mr. Cui**,
Ms. Wang** and
Innovation Group**.
Secured by certain
receivables at FVTOCI
– – 30,000 –
Guaranteed bank loans Guaranteed by Mr. Cui**,
Ms. Wang** and
Innovation Group**.
– – – 29,927
– – 430,000 29,927 h
Chongqing Weiqiao
Financial
Factoring Co.,
Ltd.* (ᅅᕧ዗
ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118
Guaranteed other loans Guaranteed by Innovation
Group**
– – 746,000 516,000 k
APPENDIX I ACCOUNTANTS’ REPORT
– I-68 –


--- page 558 ---
Counter party Types of borrowings Guaranteed/secured by
31 December
2022
31 December
2023
31 December
2024
31 May
2025 Notes
RMB’000 RMB’000 RMB’000 RMB’000
Hongqiao
Commercial
Factoring
(Shenzhen) Co.,
Ltd.* ( ҃዗ਠุ
ଣ(ଉέ)ࠢ
ʮ̡) /H1118/H1118/H1118/H1118/H1118
Guaranteed other loans Guaranteed by Innovation
Group**
– – 100,000 – l
SPDB Financial
Leasing Co.,
Ltd.* (ፄ
ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118
Secured and guaranteed
other loans
Guaranteed by Mr. Cui**
and Innovation Group**.
Secured by certain
property, and equipment
of the Group under sale
and leaseback
arrangement
– – 50,062 323,385 j
Bank of Inner
Mongolia* ( ʫႆ
̚ვБ) /H1118/H1118/H1118/H1118
Secured and guaranteed
bank loans
Guaranteed by certain
subsidiaries of the
Group. Secured by
certain property, plant
and equipment, right-of-
use assets of the Group
and the right to collect
electricity charges
– – – 318,483 n
Secured and guaranteed
bank loans
Guaranteed by Mr. Cui**,
Innovation Group and
certain subsidiaries of
the Group. Secured by
inventories of the
Group.
– – – 400,500
718,983 n
Qilu Bank Co.,
Ltd.* ( ᄁኁვ
Б) /H1118/H1118/H1118/H1118/H1118/H1118
Guaranteed bank loans Guaranteed by Innovation
Group**.
– – – 600,750 o
China CITIC
Bank* (ვ
Б) /H1118/H1118/H1118/H1118/H1118/H1118
Guaranteed bank loans Guaranteed by Innovation
Group**.
– – – 374,982 p
CITIC Trust Co.,
Ltd.* (ৄ
ப΂ʮ̡) /H1118
Guaranteed other loans Guaranteed by Mr. Cui**
and Innovation Group**
– – – 100,472 q
China Everbright
Bank* ( Έɽვ
Б) /H1118/H1118/H1118/H1118/H1118/H1118
Guaranteed bank loans Guaranteed by Innovation
Group**.
– – – 100,825 r
Dongying Bank (؇
ᐄვБ) /H1118/H1118/H1118/H1118
Secured and guaranteed
bank loans
Guaranteed by Innovation
Group**. Secured by
certain right-of-use
assets.
– – – 120,096 s
CPI Ronghe
International
Financial
Leasing Co., Ltd.
(ʕཥҳፄձፄ༟
ʮ̡
) /H1118
Secured and guaranteed
other loans
Guaranteed by Innovation
Group**. Secured by
certain right-of-use
assets and property, and
equipment of the Group
under sale and leaseback
arrangement
– – – 93,354 t
APPENDIX I ACCOUNTANTS’ REPORT
– I-69 –


--- page 559 ---
Counter party Types of borrowings Guaranteed/secured by
31 December
2022
31 December
2023
31 December
2024
31 May
2025 Notes
RMB’000 RMB’000 RMB’000 RMB’000
A VIC International
Leasing Co.,
Ltd.* ( ʕঘ਷ყ
ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118
Secured and guaranteed
other loans
Guaranteed by Innovation
Group**. Secured by
certain property, and
equipment of the Group
under sale and leaseback
arrangement
– – – 202,306 u
BQD Financial
Leasing Co., Ltd.
(ፄॡ
ʮ̡) /H1118/H1118
Guaranteed other loans Guaranteed by Mr. Cui**
and Innovation Group**.
– – – 17,400 v
Bank of Qingdao
(ვБ) /H1118/H1118/H1118
Guaranteed bank loans Guaranteed by Mr. Cui**
and Innovation Group**
– – – 221,598
Guaranteed bank loans Guaranteed by Mr. Cui**,
Innovation Group** and
certain subsidiaries of
the Group.
– – – 260,036
Unsecured and
unguaranteed bank
loans under supplier
finance arrangements
N/A – – – 63,922
545,556 w
* English name is for identification purpose only.
** These guarantee will be released prior to the Listing as represented by management of the Group.
Details of the securities pledged in respect of the Group’s bank and other borrowings are set out in note 40.
Notes:
(a) Bank of Jinzhou
As at 31 December 2022, 2023 and 2024 and 31 May 2025, borrowings from Bank of Jinzhou were with the
following maturity and effective interest rates:
As at 31 December 2022 As at 31 December 2023 As at 31 December 2024 As at 31 May 2025
Maturity date RMB’000
Effective
interest
rate RMB’000
Effective
interest
rate RMB’000
Effective
interest
rate RMB’000
Effective
interest
rate
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H11188,319,658 6.00%-7.50%
per annum
4,132,696 3.65%-7.50%
per annum
3,209,520 3.10%-6.55%
per annum
3,449,437 3.10%-6.55%
per annum
More than one year but not
exceeding two years /H1118/H1118/H1118/H1118/H1118
2,021,003 7.38%-7.50%
per annum
1,917,000 7.50%
per annum
4,402,000 6.55%
per annum
3,477,000 6.55%
per annum
More than two years but not
exceeding
five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
467,000 7.50%
per annum
3,072,000 7.50%
per annum
––––
10,807,661 9,121,696 7,611,520 6,926,437
In June 2025, the Group and the Bank of Jinzhou had agreed to adjust the interest rate on all borrowings which
were originally at 6.55% to 5.50%.
APPENDIX I ACCOUNTANTS’ REPORT
– I-70 –


--- page 560 ---
(b) Bank of Weifang
As at 31 December 2023 and 2024 and 31 May 2025, borrowings from Bank of Weifang were with the
following maturity and effective interest rate:
Maturity date
As at 31 December 2023 As at 31 December 2024 As at 31 May 2025
RMB’000
Effective
Interest rate RMB’000
Effective
Interest rate RMB’000
Effective
Interest rate
Within one year /H1118/H1118/H111880,111
5.00%
per annum 80,120
5.00%
per annum 69,135
4.50%
per annum
(c) Shandong Wudi Rural Commercial Bank
As at 31 December 2024 and 31 May 2025, borrowings from Shandong Wudi Rural Commercial Bank were
with the following maturity and effective interest rate:
Maturity date
As at 31 December 2024 As at 31 May 2025
RMB’000
Effective Interest
rate RMB’000
Effective Interest
rate
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,029
3.65%
per annum 64
3.25%
per annum
More than two years but not
exceeding five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 71,000
3.25%
per annum
29,029 71,064
(d) Huaxia Bank
As at 31 December 2024, borrowings from Huaxia Bank were with the following maturity and effective interest
rate:
Maturity date RMB’000 Effective Interest rate
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/H111867,049 4.30% per annum
More than one year but not exceeding two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866,667 4.30% per annum
More than two years but not exceeding five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118200,000 4.30% per annum
More than five 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/H111866,667 4.30% per annum
400,383
(e) Industrial and Commercial Bank of China
As at 31 December 2024 and 31 May 2025, borrowings from Industrial and Commercial Bank of China were
with the following maturity and effective interest rate:
Maturity date
As at 31 December 2024 As at 31 May 2025
RMB’000
Effective Interest
rate RMB’000
Effective Interest
rate
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242
2.90%
per annum 4,576
2.90%
per annum
More than one year but not
exceeding two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,575
2.90%
per annum 76,200
2.90%
per annum
More than two years but not
exceeding five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118171,450
2.90%
per annum 228,600
2.90%
per annum
More than five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118399,975
2.90%
per annum 495,200
2.90%
per annum
600,242 804,576
APPENDIX I ACCOUNTANTS’ REPORT
– I-71 –


--- page 561 ---
(f) Bank of Beijing
As at 31 December 2024, borrowings from Bank of Beijing were with the following maturity and effective
interest rate:
Maturity date RMB’000 Effective Interest rate
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/H111892,410 4.50% per annum
(g) China’s Industrial Bank
As at 31 December 2024 and 31 May 2025, borrowings from China’s Industrial Bank were with the following
maturity and effective interest rate:
Maturity date
As at 31 December 2024 As at 31 May 2025
RMB’000
Effective Interest
rate RMB’000
Effective Interest
rate
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118112,111 4.70%-4.95%
per annum
293,947 4.50%-4.70%
per annum
More than one year but not
exceeding two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
132,002 4.70%-4.95%
per annum
132,002 4.70%
per annum
More than two years but not
exceeding five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
308,005 4.70%-4.95%
per annum
286,005 4.70%
per annum
More than five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118176,003 4.70%-4.95%
per annum
132,002 4.70%
per annum
728,121 843,956
(h) China Merchants Bank
As at 31 December 2024 and 31 May 2025, borrowings from China Merchants Bank were with the following
maturity and effective interest rate:
Maturity date
As at 31 December 2024 As at 31 May 2025
RMB’000
Effective Interest
rate RMB’000
Effective Interest
rate
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118430,000 3.30%-3.50%
per annum
29,927 3.10%
per annum
(i) JD International Financial Leasing Co., Ltd.
As at 31 December 2024 and 31 May 2025, borrowings from JD International Financial Leasing Co., Ltd. were
with the following maturity and effective interest rate:
Maturity date
As at 31 December 2024 As at 31 May 2025
RMB’000
Effective Interest
rate RMB’000
Effective Interest
rate
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,391 6.20%
per annum
16,903 6.20%
per annum
More than one year but not
exceeding two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
17,432 6.20%
per annum
13,379 6.20%
per annum
More than two years but not
exceeding five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
4,528 6.20%
per annum
– 6.20%
per annum
38,351 30,282
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 562 ---
(j) SPDB Financial Leasing Co., Ltd.
As at 31 December 2024 and 31 May 2025, borrowings from SPDB Financial Leasing Co., Ltd. were with the
following maturity and effective interest rate:
Maturity date
As at 31 December 2024 As at 31 May 2025
RMB’000
Effective Interest
rate RMB’000
Effective Interest
rate
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,729 5.60%
per annum
120,475 5.60%
per annum
More than one year but not
exceeding two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
16,666 5.60%
per annum
115,949 5.60%
per annum
More than two years but not
exceeding five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
16,667 5.60%
per annum
86,961 5.60%
per annum
50,062 323,385
(k) Chongqing Weiqiao Financial Factoring Co., Ltd.
As at 31 December 2024 and 31 May 2025, borrowings from Chongqing Weiqiao Financial Factoring Co., Ltd.
were with the following maturity and effective interest rate:
Maturity date
As at 31 December 2024 As at 31 May 2025
RMB’000
Effective Interest
rate RMB’000
Effective Interest
rate
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118746,000 6.50%-8.00%
per annum
516,000 6.50%-7.00%
per annum
(l) Hongqiao Commercial Factoring (Shenzhen) Co., Ltd.
As at 31 December 2024, borrowings from Hongqiao Commercial Factoring (Shenzhen) Co., Ltd. were with
the following maturity and effective interest rate:
Maturity date RMB’000 Effective Interest rate
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/H1118100,000 9.00% per annum
(m) Far East Horizon Financial Leasing (Guangdong) Ltd.
As at 31 December 2023, 2024 and 31 May 2025, borrowings from Far East Horizon Financial Leasing
(Guangdong) Ltd. were with the following maturity and effective interest rate:
Maturity date As at 31 December 2023 As at 31 December 2024 As at 31 May 2025
RMB’000
Effective
Interest rate RMB’000
Effective
Interest rate RMB’000
Effective
Interest rate
Within one year /H1118/H1118/H1118/H1118/H111838,174
8.64%
per annum 42,005
8.64%
per annum 31,905
8.64%
per annum
More than one year but
not exceeding two
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,826
8.64%
per annum – – – –
80,000 42,005 31,905
APPENDIX I ACCOUNTANTS’ REPORT
– I-73 –


--- page 563 ---
(n) Bank of Inner Mongolia
As at 31 May 2025, borrowings from Bank of Inner Mongolia were with the following maturity and effective
interest rate:
Maturity date As at 31 May 2025
RMB’000 Effective Interest rate
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/H1118417,568
3.70%-4.50%
per annum
More than one year but not exceeding two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,490 3.70% per annum
More than two years but not exceeding five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100,472 3.70% per annum
More than five 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/H1118167,453 3.70% per annum
718,983
(o) Qilu Bank Co., Ltd.
As at 31 May 2025, borrowings from Qilu Bank Co., Ltd. were with the following maturity and effective
interest rate:
Maturity date As at 31 May 2025
RMB’000 Effective Interest rate
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/H1118600,750 4.50% per annum
(p) China CITIC Bank
As at 31 May 2025, borrowings from China CITIC Bank were with the following maturity and effective
interest rate:
Maturity date As at 31 May 2025
RMB’000 Effective Interest rate
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/H1118374,982
4.20%-4.50%
per annum
(q) CITIC Trust Co., Ltd.
As at 31 May 2025, borrowings from CITIC Trust Co., Ltd. were with the following maturity and effective
interest rate:
Maturity date As at 31 May 2025
RMB’000 Effective Interest rate
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/H1118100,472 5.00% per annum
APPENDIX I ACCOUNTANTS’ REPORT
– I-74 –


--- page 564 ---
(r) China Everbright Bank
As at 31 May 2025, borrowings from China Everbright Bank were with the following maturity and effective
interest rate:
Maturity date As at 31 May 2025
RMB’000 Effective Interest rate
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/H11184,825 4.50% per annum
More than one year but not exceeding two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111896,000 4.50% per annum
100,825
(s) Dongying Bank
As at 31 May 2025, borrowings from Dongying Bank were with the following maturity and effective interest
rate:
Maturity date As at 31 May 2025
RMB’000 Effective Interest rate
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/H11182,096 4.80% per annum
More than one year but not exceeding two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118118,000 4.80% per annum
120,096
(t) CPI Ronghe International Financial Leasing Co., Ltd.
As at 31 May 2025, borrowings from CPI Ronghe International Financial Leasing Co., Ltd. were with the
following maturity and effective interest rate:
Maturity date As at 31 May 2025
RMB’000 Effective Interest rate
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/H111831,160 5.64% per annum
More than one year but not exceeding two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,097 5.64% per annum
More than two years but not exceeding five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,097 5.64% per annum
93,354
(u) A VIC International Leasing Co., Ltd.
As at 31 May 2025, borrowings from A VIC International Leasing Co., Ltd. were with the following maturity
and effective interest rate:
Maturity date As at 31 May 2025
RMB’000 Effective Interest rate
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/H111866,718 4.70% per annum
More than one year but not exceeding two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,794 4.70% per annum
More than two years but not exceeding five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,794 4.70% per annum
202,306
APPENDIX I ACCOUNTANTS’ REPORT
– I-75 –


--- page 565 ---
(v) BQD Financial Leasing Co., Ltd.
As at 31 May 2025, borrowings from BQD Financial Leasing Co., Ltd. were with the following maturity and
effective interest rate:
Maturity date As at 31 May 2025
RMB’000 Effective Interest rate
More than one year but not exceeding two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,471 5.50% per annum
More than two years but not exceeding five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,929 5.50% per annum
17,400
(w) Bank of Qingdao
As at 31 May 2025, borrowings from Bank of Qingdao were with the following maturity and effective interest
rate:
Maturity date As at 31 May 2025
RMB’000 Effective Interest rate
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/H1118545,556
3.95%-4.50%
per annum
New facilities obtained and new borrowing raised subsequent to end of the reporting period
During June 2025, July 2025, August 2025, September 2025 and October 2025, the Group obtained new
borrowings of RMB23,798,000, RMB14,680,000, RMB10,761,000, RMB2,236,000, and RMB365,000 with Bank of
Inner Mongolia, which is part of the total loan facility of RMB370,000,000, of which RMB370,000,000 has been
drawn down.
During June 2025, July 2025 and September 2025, the Group obtained new borrowings of RMB223,000,000,
RMB7,340,000 and RMB22,785,000 with China’s Industrial Bank, which is part of the total loan facility of
RMB449,280,000, of which RMB253,125,000 has been drawn down.
On 13 June 2025, the Group obtained new borrowings of RMB9,392,000 with China CITIC Bank, which is part
of the total loan facility of RMB800,000,000, of which RMB209,392,000 has been drawn down.
During June 2025, the Group obtained new borrowings with Bank of Qingdao amounting to RMB182,238,000.
On 16 June 2025, the Group obtained new borrowings with Xiamen Xiangyu Commercial Factoring Co., Ltd.*
(ப΂ʮ̡) amounting to RMB300,000,000.
On 9 July 2025, the Group obtained new borrowings with Mengshang Bank* (ʮ̡)
amounting to RMB400,000,000.
On 30 June 2025, 21 August 2025 and 29 September 2025, the Group obtained new borrowings of
RMB17,400,000, RMB85,000,000 and RMB17,400,000 with BQD Financial Leasing Co., Ltd..
During July 2025, the Group obtained new borrowings with China’s Industrial Bank amounting to
RMB129,000,000.
During July 2025, the Group obtained new borrowings with Bank of Qingdao amounting to RMB91,780,000.
On 14 August 2025, the Group obtained new bank facility with China Everbright Bank amounting to
RMB80,000,000, of which RMB50,000,000 has been drawn down.
During September 2025, the Group obtained new borrowings with Bank of Qingdao amounting to
RMB157,900,000.
On 31 October 2025, the Group obtained new borrowings with Shanghai Banghui Commercial Factoring Co.,
Ltd.* (ʮ̡) amounting to RMB30,000,000.
APPENDIX I ACCOUNTANTS’ REPORT
– I-76 –


--- page 566 ---
Loan covenant
(i) Shandong Wudi Rural Commercial Bank
In respect of bank borrowing from Shandong Wudi Rural Commercial Bank with carrying amount of
RMB29,029,000 as at 31 December 2024 and RMB71,064,000 as at 31 May 2025, Shandong Chuangyuan is required
to comply with the following financial covenant which is tested on a yearly basis:
 the ratio of the liabilities to the assets shall not be more than 0.70:1
Shandong Chuangyuan has complied with the relevant covenant at each test date on or before the end of the
reporting period.
30. AMOUNTS DUE TO RELATED PARTIES
Amounts due to related parties are all non-trade in nature. Details are set out in note 41(b)(ii).
31. PAID-IN SHARE CAPITAL
The Group
The Reorganisation has been completed on 23 October 2024. As mentioned in note 2, the Historical Financial
Information has been prepared as if the Group structure after the Reorganisation had been in existence throughout
the years ended 31 December 2022, 2023 and 2024 and the five months ended 31 May 2025.
For the purposes of presentation of the consolidated statements of financial position, the balance of paid-in
capital as at 1 January 2022 and 31 December 2022 represented the paid-in capital of Inner Mongolia Chuangyuan
and 58.5% of paid-in capital of Shandong Chuangyuan, and the balance of paid-in/share capital as at 31 December
2023 represented the share capital of the Company, paid-in capital of Inner Mongolia Chuangyuan and 58.5% of
paid-in capital of Shandong Chuangyuan prior to the completion of the Reorganisation. As at 31 December 2024 and
31 May 2025, the balance of share capital represented the share capital of the Company.
As at 1
January As at 31 December As at 31 May
Name of the entity 2022 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
The Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A N/A –* –* 54
Inner Mongolia
Chuangyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000,000 2,000,000 2,000,000 N/A N/A
Shandong Chuangyuan /H1118/H1118 17,901 17,901 70,551 N/A N/A
2,017,901 2,017,901 2,070,551 –* 54
Details of the share capital of the Company were as follows:
The Company
Par value
per share
Number of
ordinary shares Share capital
Share capital
presented in
RMB
US$ US$000 RMB’000
Authorised
On 4 July 2023 (date of
incorporation), 31 December
2023 and 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.0001 500,000,000 50 360
Share Subdivision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 9,500,000,000 – –
On 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.000005 10,000,000,000 50 360
APPENDIX I ACCOUNTANTS’ REPORT
– I-77 –


--- page 567 ---
Par value
per share
Number of
ordinary shares Share capital
Share capital
presented in
RMB
US$ US$000 RMB’000
Issued
On 4 July 2023 (date of
incorporation), 31 December
2023 and 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.0001 1 –* –*
Share Subdivision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 19 –* –*
Issue of ordinary shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.000005 1,499,999,980 7 54
On 31 May 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.000005 1,500,000,000 7 54
On 6 January 2025, a written resolution of the shareholders of the Company was passed to approve each share
in the issued and unissued share capital was subdivided into 20 shares with a nominal value of USD0.000005 each
(“Share Subdivision”). After the subdivision, the total issued share capital of the Company consisted of 20 shares
with a nominal value of USD0.000005 each. Immediately following the Share Subdivision taking effect, the
Company issued 1,499,999,980 ordinary shares to Bloomsbury Holding, the sole shareholder of the Company at a
consideration of USD7,500.
* Less than RMB1,000.
32. RESERVES
Statutory surplus reserve
In accordance with the PRC Companies Law and the PRC subsidiaries’ articles of association, subsidiaries
registered in the PRC as a domestic companies are required to appropriate 10% of their annual statutory net profit
as determined under PRC Generally Accepted Accounting Practice (“PRC GAAP”) (after offsetting any prior years’
losses) to the statutory surplus fund. When the balance of this fund reaches 50% of the entity’s capital, any further
appropriation is optional. The statutory surplus fund can be utilised to offset prior years’ losses or to increase capital.
However, the balance of the statutory surplus fund must be maintained at a minimum of 25% of the capital after those
usages.
Safety fund reserve
Pursuant to regulation in the PRC, the Group’s subsidiaries, including Inner Mongolia Chuangyuan and
Chuangyuan Alloy, carrying on Electrolytic Aluminum Business, are required to transfer an amount to safety fund
ranging from 0.05%-3% of annual revenue from electrolytic aluminum for the years ended 31 December 2022, 2023
and 2024 and five months ended 31 May 2024 and 2025. Shandong Chuangyuan, another subsidiary of the Group
carrying on Alumina Business, is required to transfer an amount to safety fund ranging from 0.2%-3% of annual
revenue from alumina and other related types of products, ranging from 1.5%-3.0% of annual revenue from
electricity, and at RMB1.5 to RMB4 per ton of red mud, which is generated from the production process, for the years
ended 31 December 2022, 2023 and 2024 and five months ended 31 May 2024 and 2025.
Pursuant to the requirement of PRC government, a portion of retained earning is apportioned to safety fund
reserve which can be used for safety facilities and environment improvement. Upon incurring qualifying safety
expenditure, an equivalent amount should be reclassified out from safety fund reserve to retained earnings. At the
same time, the safety facilities costs or expenditures are recognised as assets or in profit or loss respectively. This
safety fund is not available for distribution to shareholders. During the Track Record Period, safety fund provided,
amounted to RMB51,214,000 and RMB45,794,000, RMB55,072,000, RMB22,525,000 (unaudited) and
RMB21,278,000, utilised amounted to RMB21,771,000, RMB29,041,000, RMB27,363,000, RMB7,829,000
(unaudited) and RMB18,924,000 during the years ended 31 December 2022, 2023 and 2024 and five months ended
31 May 2024 and 2025, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-78 –


--- page 568 ---
The movement of the Company’s reserves has been set forth below:
Accumulated losses
RMB’000
At 4 July 2023 (date of incorporation) and 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Loss and total comprehensive expense for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(17,768)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(17,768)
Loss and total comprehensive expense for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,838)
At 31 May 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/H1118/H1118/H1118/H1118(24,606)
33. NON-CONTROLLING INTERESTS
Non-controlling interests represents the corresponding 41.5% equity interest of Shandong Chuangyuan which
were held by Innovation Group over the Track Record Period.
34. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
34a. Reconciliation of Liabilities Arising from Financing Activities
The table below details changes in the Group’s liabilities arising from financing activities, including both cash
and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash
flows will be, classified in the Group’s consolidated statements of cash flows as cash flows from financing activities.
Bank and
other
borrowings
Bills
payables
under note
financing
arrangements
Payables
to a
finance
provider
Lease
liabilities
Amounts
due to
related
parties
Amounts
due to
independent
third parties
Prepaid/
Accrued
issue costs Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 /H1118/H111811,722,236 2,504,000 53,048 1,299,094 199,626 38,199 – 15,816,203
Net financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,731,027) 1,261,131 (722,787) (414,395) 115,033 58,000 – (1,434,045)
Non-cash changes
Payments to a finance
provider under
supplier finance
arrangement
entered /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 833,124 – – – – 833,124
Interest expenses /H1118/H1118/H1118839,067 105,899 – 69,898 2,532 – – 1,017,396
At 31 December 2022 /H111810,830,276 3,871,030 163,385 954,597 317,191 96,199 – 16,232,678
Net financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,395,326) (1,829,591) (1,298,975) (276,857) 75,858 (36,200) – (5,761,091)
Non-cash changes –
Interest expenses /H1118/H1118/H1118769,357 45,621 – 45,087 23,082 – – 883,147
New lease entered /H1118/H1118/H1118 – – – 83,569 – – – 83,569
Advance under a
finance provider /H1118/H1118 – – 1,200,685 – – – – 1,200,685
New bank borrowings
under supplier
finance arrangement
entered /H1118/H1118/H1118/H1118/H1118/H1118/H111877,500 –––– –– 77,500
At 31 December 2023 /H1118 9,281,807 2,087,060 65,095 806,396 416,131 59,999 – 12,716,488
Net financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,203,670 (2,016,743) (230,691) (395,272) (423,986) 422,782 (1,991) (1,442,231)
APPENDIX I ACCOUNTANTS’ REPORT
– I-79 –


--- page 569 ---
Bank and
other
borrowings
Bills
payables
under note
financing
arrangements
Payables
to a
finance
provider
Lease
liabilities
Amounts
due to
related
parties
Amounts
due to
independent
third parties
Prepaid/
Accrued
issue costs Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Non-cash changes
Expire of bills
discounted to banks
that are not
derecognised in their
entirety /H1118/H1118/H1118/H1118/H1118/H1118/H1118(300,000) –––– –– (300,000)
Issue costs incurred /H1118/H1118 – –––– – 5,260 5,260
Interest expenses /H1118/H1118/H1118650,276 39,683 – 17,498 7,855 – – 715,312
Advance under a
finance provider /H1118/H1118 – – 165,596 – – – – 165,596
New bank borrowings
under supplier
finance arrangement
entered /H1118/H1118/H1118/H1118/H1118/H1118/H1118112,490 –––– –– 1 12,490
At 31 December 2024 /H111810,948,243 110,000 – 428,622 – 482,781 3,269 11,972,915
Net financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,651,026 387,343 – (359,832) – (271,450) (2,780) 1,404,307
Non-cash changes
Issue costs incurred /H1118/H1118 – –––– – 1,518 1,518
Expire of bills
discounted to banks
that are not
derecognised in their
entirety /H1118/H1118/H1118/H1118/H1118/H1118/H1118(430,000) –––– –– (430,000)
New bank borrowings
under supplier
finance arrangement
entered /H1118/H1118/H1118/H1118/H1118/H1118/H111861,749 –––– –– 61,749
New lease entered /H1118/H1118/H1118 – – – 148,944 – – – 148,944
Interest expenses /H1118/H1118/H1118290,373 2,657 – 1,654 – 1,589 – 296,273
At 31 May 2025 /H1118/H1118/H1118/H111812,521,391 500,000 – 219,388 – 212,920 2,007 13,455,706
At 31 December 2023 /H1118 9,281,807 2,087,060 65,095 806,396 416,131 59,999 – 12,716,488
Net financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(463,460) (1,182,620) (139,293) (395,272) (385,807) 163,309 – (2,403,143)
Non-cash changes
Expire of bills
discounted to banks
that are not
derecognised in their
entirety /H1118/H1118/H1118/H1118/H1118/H1118/H111830,000 –––– –– 30,000
Interest expenses /H1118/H1118/H1118282,752 25,560 – 16,315 7,855 – – 332,482
Advance under a
finance provider /H1118/H1118 – – 106,024 – – – – 106,024
New bank borrowings
under supplier
finance arrangement
entered /H1118/H1118/H1118/H1118/H1118/H1118/H111875,520 –––– –– 75,520
At 31 May 2024
(unaudited) /H1118/H1118/H1118/H1118/H11189,206,619 930,000 31,826 427,439 38,179 223,308 – 10,857,371
APPENDIX I ACCOUNTANTS’ REPORT
– I-80 –


--- page 570 ---
34b. Information of Supplier Finance Arrangements
01/01/2022 31/12/2022 31/12/2023 31/12/2024 31/05/2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount of the financial
liabilities that are subject to
supplier finance arrangements
Presented as part of “Trade, bills and
other payables” /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 163,385 65,095 – –
– Of which suppliers have already
received payment from the finance
provider (note 26) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 163,385 65,095 – –
Presented as part of “Bank and other
borrowings” (note 29) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A N/A 77,500 86,960 100,892
– Of which suppliers have already
received payment from the finance
provider /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A N/A 77,500 86,960 100,892
01/01/2022 31/12/2022 31/12/2023 31/12/2024 31/05/2025
Days Days Days Days Days
Range of payment due dates
For liabilities presented as part of
“Trade, bills and other payables”
(note 26) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
– Liabilities that are part of supplier
finance arrangements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 90 90 N/A N/A
– Comparable trade payables that are not
part of supplier finance arrangements /H1118 N/A – – N/A N/A
For liabilities presented as part of “Bank
and other borrowings” (note 29) /H1118/H1118/H1118/H1118
– Liabilities that are part of supplier
finance arrangements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A N/A 365 365 318-365
– Comparable trade payables that are not
part of supplier finance arrangements /H1118 N/A N/A – – –
Changes in liabilities that are subject to supplier finance arrangements are primarily attributable to additions
resulting from purchases of goods and subsequent cash settlements. During the years ended 31 December 2022, 2023
and 2024 and the five months ended 31 May 2024 and 2025, payments to a finance provider of RMB833,124,000,
RMB1,200,685,000, RMB165,596,000, RMB106,024,000 (unaudited) and nil, respectively, represent suppliers have
already received payments from the finance supplier which is the finance provider directly. During the years ended
31 December 2023 and 2024 and the five months ended 31 May 2024, borrowings under supplier finance arrangement
of RMB77,500,000, RMB112,490,000 and RMB75,520,000 (unaudited), respectively, represent the payments to the
suppliers by Bank of Jinzhou directly. During the five months ended 31 May 2025, borrowings under supplier finance
arrangement of RMB61,749,000 represent the payments to the suppliers by Bank of Qingdao directly. There were no
other material non-cash changes in these liabilities.
35. CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that entities now comprising the Group will be able to continue as
a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance.
The Group’s overall strategy remains unchanged during the Track Record Period.
The capital structure of the Group consists of net debt, which includes bank and other borrowings and lease
liabilities disclosed in notes 29 and 28, respectively, net of cash and cash equivalents and equity attributable to
owners of the Company, comprising paid-in capital/share capital (accumulated losses) retained earnings, other
reserves and non-controlling interests.
Management of the Group reviews the capital structure on a regular basis and considers the cost of capital and
the risks associated with each class of capital. The Group will balance its overall capital structure through new share
issues and raise of new borrowings or the redemption of existing debt.
APPENDIX I ACCOUNTANTS’ REPORT
– I-81 –


--- page 571 ---
36. FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
31 December
2022
31 December
2023
31 December
2024
31 May
2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets
Financial assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H111830,044 – – 699,900
Receivables at FVTOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,102 62,678 485,699 90,972
Financial assets at amortised cost
(including cash and cash
equivalents) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,316,241 5,772,348 904,489 1,529,334
7,375,387 5,835,026 1,390,188 2,320,206
Financial liabilities
Amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,291,760 14,860,865 14,299,665 16,538,634
(b) Financial risk management objectives and policies
The Group’s major financial instruments include trade receivables, other receivables, receivables at FVTOCI,
financial assets at FVTPL, restricted bank deposits, cash and cash equivalents, amounts due from related parties,
trade, bills and other payables, bank and other borrowings, amounts due to related parties and lease liabilities. Details
of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments
include market risk (currency risk and interest rate risk), credit risk and liquidity risk. The policies on how to mitigate
these risks are set out below. The management of the Group manages and monitors these exposures to ensure
appropriate measures are implemented in a timely and effective manner.
Market risk
The Group’s activities expose it primarily to the financial risks of currency risk and interest rates.
There has been no change to the Group’s exposure to market risk or the manner in which it manages and
measures the risk during the reporting period.
Currency risk
As at 31 December 2024 and 31 May 2025, the Group has bank balances, restricted deposits, trade and
other receivables and trade and other payables denominated in the USD and HKD, which expose the Group
to foreign currency risk.
For the year ended 31 December 2024 and five months ended 31 May 2025, the impact of HKD is not
presented, since the outstanding monetary items denominated in HKD are not significant and their impact is
immaterial.
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary
liabilities at the end of the reporting periods are as follows:
At 31 December 2024
Assets Liabilities
RMB’000 RMB’000
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118283,300 1,129
At 31 May 2025
Assets Liabilities
RMB’000 RMB’000
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118990 192,747
APPENDIX I ACCOUNTANTS’ REPORT
– I-82 –


--- page 572 ---
The Group currently does not have a foreign exchange hedging policy. However, the management of the
Group monitors foreign exchange exposure and will consider hedging significant foreign exchange exposure
should the need arises.
Sensitivity analysis
The following table details the Group’s sensitivity to a 10% increase and decrease in USD against RMB,
10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel
and represents management’s assessment of the reasonably possible change in foreign exchange rates. The
sensitivity analysis includes only outstanding foreign currency denominated monetary items, and adjusts their
translation at the end of the reporting period for a 10% change in foreign currency rates. A positive number
below indicates an increase in post-tax profit where a USD strengthen 10% against RMB. For a 10%
weakening of USD against RMB, there would be an equal and opposite impact on the post-tax profit and the
balances below would be negative.
Profit for the year
ended 31 December
2024
Profit for the Five
months ended 31 May
2025
RMB’000 RMB’000
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,248 (14,382)
Interest rate risk
The Group is exposed to fair value interest rate risk in relation to restricted bank deposits (see note 25
for details), fixed-rate bank and other borrowings (see note 29 for details), lease liabilities (see note 28 for
details) and amounts due to related parties (see note 41(b)(ii) for details). The Group is also exposed to cash
flow interest rate in relation to variable-rate bank balances and variable-rate bank borrowings. The Group’s
cash flow interest rate risk is mainly concentrated on the fluctuations of the market rates from bank balances
and bank borrowings. The Group currently does not hedge its exposure to cash flow and fair value interest rate
risk; nevertheless, the management monitors interest rate exposure and will consider hedging significant
interest rate risk should the need arise.
Sensitivity analysis
No sensitivity analysis is presented since the management of the Group considers the exposure of cash
flow interest rate risk arising from variable-rate bank balances and variable-rate bank borrowings is
insignificant.
Credit risk and impairment assessment
Credit risk refers to the risk that the Group’s counterparties will default on its contractual obligations
resulting in financial loss to the Group. The Group’s credit risk exposures are primarily attributable to trade
receivables, other receivables, receivables at FVTOCI, restricted bank deposits, cash and cash equivalents and
amounts due from related parties. The Group does not hold any collateral or other credit enhancements to cover
its credit risks associated with its financial assets.
Trade receivables
In order to minimise the credit risk, the Directors have delegated a team responsible for determination
of credit limits and credit approvals. Before accepting any new customer, the Group uses an internal credit
scoring system to assess the potential customer’s credit quality and defines credit limits by customer. Limits
and scoring attributed to customers are reviewed twice a year. Other monitoring procedures are in place to
ensure that follow-up actions are taken to recover overdue debts. In addition, the Group performs impairment
assessment under ECL model on trade balances individually. In this regard, the management consider that the
Group’s credit risk is significantly reduced.
The Group has concentration of credit risk as 17.93%, 79.04%, 40.60% and 36.25% of the total trade
receivables was due from the Group’s largest customer and five largest customers at 31 December 2022, 2023
and 2024 and 31 May 2025, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-83 –


--- page 573 ---
The Group provided an ECL impairment loss of RMB556,000 during the year ended 31 December 2022
while provided an ECL impairment loss of RMB189,000 and reversed an ECL impairment loss of RMB349,000
during the year ended 31 December 2023, provided an ECL impairment loss of RMB278,000 and reversed an
ECL impairment loss of RMB148,000 during the year ended 31 December 2024 and provided an ECL
impairment loss of RMB375,000 and reversed an ECL impairment loss of RMB26,000 during the five months
ended 31 May 2025, based on the individual analysis. Details of the quantitative disclosures are set out below
in this note.
Other receivables
For other receivables, the management makes periodic individual assessment on the recoverability of
other receivables based on historical settlement records, past experience, and also quantitative and qualitative
information that is reasonable and supportive forward-looking information. The management believes that
there are no significant increase in credit risk of these amounts since initial recognition and the Group provided
impairment based on 12m ECL. For the years ended 31 December 2022, 2023 and 2024 and five months ended
31 May 2025, the Group provided an ECL impairment loss of RMB335,000, RMB592,000, RMB1,201,000 and
RMB55,000 and reversed nil, RMB261,000, RMB665,000 and RMB1,197,000 for other receivables,
respectively.
Amounts due from related parties
The management estimates the estimated loss rate of amounts due from related parties based on financial
background and also quantitative and qualitative information that is reasonable and supportive forward-
looking information. For the years ended 31 December 2022, 2023 and 2024 and five months ended 31 May
2025, the Group provided an ECL impairment loss of RMB1,235,000, nil, nil and nil and reversed an ECL
impairment loss of nil, RMB157,000, RMB1,078,000 and nil for amounts due from related parties,
respectively.
Restricted bank deposits, cash and cash equivalents
The restricted bank deposits, cash and cash equivalents are determined to have low credit risk at the end
of each reporting period. The credit risk on restricted bank deposits, cash and cash equivalents is limited
because the counterparties are reputable banks and the risk of inability to pay or redeem at the due date is low.
Receivables at FVTOCI
Bank acceptance bills receivables are determined to have low credit risk at the end of each reporting
period. The credit risk on bank acceptance bills receivables is limited because the counterparties are reputable
banks and the risk of inability to pay or redeem at the due date is low. Commercial acceptance bills receivables
are issued by customers and assessed individually. For the years ended 31 December 2022, 2023 and 2024 and
five months ended 31 May 2025, no loss allowance was recognised in other comprehensive income as the
amount of impairment loss for receivables at FVTOCI was insignificant.
Financial guarantee contracts
For financial guarantee contracts, the aggregate amount of outstanding financial guarantees issued to
banks in respect of bank facilities granted to related parties as set out in note 41(c) that the Group could be
required to pay amounted to RMB920,000,000, RMB100,000,000, nil and nil as at 31 December 2022, 2023
and 2024 and 31 May 2025, respectively. All of the outstanding financial guarantees has been utilised by the
related parties. The fair value of these financial guarantees, as at dates of initial recognition, were considered
insignificant. At the end of each reporting period, the management has performed impairment assessment, and
concluded that there has been no significant increase in credit risk since initial recognition of the financial
guarantee contracts. Accordingly, the loss allowance for financial guarantee contracts issued by the Group is
measured at an amount equal to 12m ECL. No loss allowance was recognised in the profit or loss as the amount
of the loss allowance was not significant.
APPENDIX I ACCOUNTANTS’ REPORT
– I-84 –


--- page 574 ---
The Group’s internal credit risk grading assessment comprises the following categories:
Internal credit
rating Description Trade receivables Other financial assets
Low risk /H1118/H1118/H1118/H1118The counterparty has a low risk of
default and does not have any
past-due amounts
Lifetime ECL – not
credit impaired
12m ECL
Watch list /H1118/H1118/H1118Debtor frequently repays after due
dates but usually settle in full
Lifetime ECL – not
credit impaired
12m ECL
Doubtful /H1118/H1118/H1118/H1118There have been significant
increases in credit risk since
initial recognition through
information developed internally
or external resources
Lifetime ECL – not
credit impaired
Lifetime ECL – not
credit-impaired
Loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118There is evidence indicating the
asset is credit-impaired
Lifetime ECL –
credit impaired
Lifetime ECL –
credit-impaired
Write-off /H1118/H1118/H1118/H1118There is evidence indicating that
the debtor is in severe financial
difficulty and the Group has no
realistic prospect of recovery
Amount is written
off
Amount is written
off
The tables below detail the credit risk exposures of the Group’s financial assets which are subject to
ECL assessment:
31 December 2022 Notes
Internal credit
rating
12m or lifetime
ECL
Gross carrying
amount
Average loss
rate
RMB’000
Financial assets at amortised cost
Trade receivables /H1118/H1118/H1118/H111820 Low risk Lifetime ECL
(not credit
impaired)
40,788 1.36%
Other receivables /H1118/H1118/H1118/H111822 Low risk 12m ECL 71,459 0.47%
Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118
25 Low risk 12m ECL 158,909 –
Restricted bank
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
25 Low risk 12m ECL 2,798,680 –
Amounts due from
related parties /H1118/H1118/H1118/H1118/H1118
24 Low risk 12m ECL 4,261,371 0.03%
7,331,207
Receivables at
FVTOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
21 Low risk 12m ECL 29,102 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-85 –


--- page 575 ---
31 December 2023 Notes
Internal credit
rating
12m or lifetime
ECL
Gross carrying
amount
Average loss
rate
RMB’000
Financial assets at amortised cost
Trade receivables /H1118/H1118/H1118/H111820 Low risk Lifetime ECL
(not credit
impaired)
96,527 0.41%
Other receivables /H1118/H1118/H1118/H111822 Low risk 12m ECL 44,112 1.51%
Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118
25 Low risk 12m ECL 584,126 –
Restricted bank
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
25 Low risk 12m ECL 1,309,070 –
Amounts due from
related parties /H1118/H1118/H1118/H1118/H1118
24 Low risk 12m ECL 3,753,493 0.03%
5,787,328
Receivables at
FVTOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
21 Low risk 12m ECL 62,678 –
31 December 2024 Notes
Internal credit
rating
12m or lifetime
ECL
Gross carrying
amount
Average loss
rate
RMB’000
Financial assets at amortised cost
Trade receivables /H1118/H1118/H1118/H111820 Low risk Lifetime ECL
(not credit
impaired)
39,666 1.33%
Other receivables /H1118/H1118/H1118/H111822 Low risk 12m ECL 19,247 6.25%
Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118
25 Low risk 12m ECL 176,401 –
Restricted bank
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
25 Low risk 12m ECL 681,440 –
916,754
Receivables at
FVTOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
21 Low risk 12m ECL 485,699 –
31 May 2025 Notes
Internal credit
rating
12m or lifetime
ECL
Gross carrying
amount
Average loss
rate
RMB’000
Financial assets at amortised cost
Trade receivables /H1118/H1118/H1118/H111820 Low risk Lifetime ECL
(not credit
impaired)
85,630 1.02%
Other receivables /H1118/H1118/H1118/H111822 Low risk 12m ECL 395,308 0.02%
Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118
25 Low risk 12m ECL 470,857 –
Restricted bank
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
25 Low risk 12m ECL 591,314 –
1,543,109
Receivables at
FVTOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
21 Low risk 12m ECL 90,972 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-86 –


--- page 576 ---
The following table shows the movements in lifetime ECL that have been recognised for trade
receivables under the simplified approach.
Lifetime ECL
(not credit impaired)
RMB’000
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Impairment losses recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118556
As at 31 December 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/H1118556
Impairment losses recognised /H1118/H1118/H1118/H1118/H1118/H1118/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
Impairment losses reversed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(349)
As at 31 December 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/H1118396
Impairment losses recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118278
Impairment losses reversed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(148)
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118526
Impairment losses recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118375
Impairment losses reversed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(26)
As at 31 May 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/H1118875
The following table shows the movement in ECL that has been recognised for other receivables.
12m ECL
RMB’000
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Impairment losses recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118335
As at 31 December 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/H1118335
Impairment losses recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118592
Impairment losses reversed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(261)
As at 31 December 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/H1118666
Impairment losses recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,201
Impairment losses reversed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(665)
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,202
Impairment losses recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855
Impairment losses reversed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,197)
As at 31 May 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/H111860
The following table shows the movements in ECL that have been recognised for amounts due from
related parties.
12m ECL
RMB’000
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Impairment losses recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,235
As at 31 December 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/H11181,235
Impairment losses reversed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(157)
As at 31 December 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/H11181,078
Impairment losses reversed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,078)
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
APPENDIX I ACCOUNTANTS’ REPORT
– I-87 –


--- page 577 ---
Liquidity risk
The directors of the Company have adopted an appropriate liquidity risk management framework for the
management of the Group’s short-term and long-term funding and liquidity management requirements. The
Group manages liquidity risk by closely and continuously monitoring the Group’s consolidated financial
position. The directors of the Company monitor the sufficiency of cash flows with availability of unutilised
banking facilities, internally generated funds and alternative refinancing and extension of due date of bank and
other borrowings. The directors of the Company also review the forecasted cash flows on an on-going basis
to ensure that the Group will be able to meet its financial obligations falling due and have sufficient capital
for operation.
The Group entered into supplier finance arrangement to ease access to credit for its suppliers and
facilitate early settlement to the suppliers. Only small portion of the Group’s borrowings is subject to supplier
finance arrangements. Therefore, the management does not consider the supplier finance arrangement result in
significant liquidity risk of the Group. Details of the arrangements are set out in note 29.
The following table details the Group’s remaining contractual maturity for its non-derivative financial
liabilities and lease liabilities. The table has 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 table includes both interest
and principal cash flows.
Weighted
average
interest rate
On demand
or less than
1 year 1-2 years 2-5 years
More than
5 years
Total
undiscounted
cash flows
Total
carrying
amounts
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2022
Bank and other borrowings
– fixed rates /H1118/H1118/H1118/H1118/H1118/H1118/H11187.42 8,995,865 2,128,904 473,421 – 11,598,190 10,830,276
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,360,244 – – – 1,360,244 1,360,244
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,052,771 – 860,524 – 1,913,295 1,708,740
Bills payables (including
those under note financing
arrangement) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,075,309 – – – 4,075,309 4,075,309
Amounts due to related
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.00 326,059 – – – 326,059 317,191
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H11186.89 319,546 354,438 341,487 – 1,015,471 954,597
Financial guarantee
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 920,000 – – – 920,000 –
17,049,794 2,483,342 1,675,432 – 21,208,568 19,246,357
As at 31 December 2023
Bank and other borrowings
– fixed rates /H1118/H1118/H1118/H1118/H1118/H1118/H11187.46 4,606,052 2,290,764 3,439,110 – 10,335,926 9,281,807
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 980,926 – – – 980,926 980,926
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 986,336 – 860,524 – 1,846,860 1,687,318
Bills payables (including
those under note financing
arrangement) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,494,683 – – – 2,494,683 2,494,683
Amounts due to related
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.00 424,723 – – – 424,723 416,131
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H11186.73 714,334 46,321 51,026 24,983 836,664 806,396
Financial guarantee
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 100,000 – – – 100,000 –
10,307,054 2,337,085 4,350,660 24,983 17,019,782 15,667,261
APPENDIX I ACCOUNTANTS’ REPORT
– I-88 –


--- page 578 ---
Weighted
average
interest rate
On demand
or less than
1 year 1-2 years 2-5 years
More than
5 years
Total
undiscounted
cash flows
Total
carrying
amounts
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2024
Bank and other borrowings
– fixed rates /H1118/H1118/H1118/H1118/H1118/H1118/H11186.55 4,938,697 4,947,179 91,459 – 9,977,335 9,330,886
– variable rates /H1118/H1118/H1118/H1118/H1118/H11183.67 132,222 284,664 791,694 695,698 1,904,278 1,617,357
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,246,574 – – – 1,246,574 1,246,574
Other payables
– interest bearing /H1118/H1118/H1118/H1118/H11180.97 102,645 383,250 – – 485,895 482,781
– non-interest bearing /H1118/H1118/H1118 – 690,261 475,472 385,052 – 1,550,785 1,439,817
Bills payables (including
those under note financing
arrangement) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 182,250 – – – 182,250 182,250
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H11182.80 372,196 12,491 37,474 24,983 447,144 428,622
7,664,845 6,103,056 1,305,679 720,681 15,794,261 14,728,287
As at 31 May 2025
Bank and other borrowings /H1118
– fixed rates /H1118/H1118/H1118/H1118/H1118/H1118/H11185.32 6,715,474 3,747,552 127,759 376,759 10,967,544 10,345,271
– variable rates /H1118/H1118/H1118/H1118/H1118/H11183.77 201,799 390,979 1,243,433 682,786 2,518,997 2,176,120
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H11181,179,519 – – – 1,179,519 1,179,519
Other payables
– interest bearing /H1118/H1118/H1118/H1118/H11183.36 1,591 215,129 – – 216,720 212,920
– non-interest bearing /H1118/H1118/H1118 – 1,272,209 713,208 79,245 – 2,064,662 1,974,804
Bills payables (including
those under note financing
arrangement) /H1118/H1118/H1118/H1118/H1118/H1118/H1118 650,000 – – – 650,000 650,000
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H11183.36 50,880 49,864 138,128 7,406 246,278 219,388
10,071,472 5,116,732 1,588,565 1,066,951 17,843,720 16,758,022
Fair value measurements of financial instruments
Fair value of the Group’ s financial assets that are measured at fair value on a recurring basis
Some of the Group’s financial assets are measured at fair value at the end of each reporting period. The
following table gives information about how the fair values of these financial assets are determined (in
particular, the valuation technique(s) and inputs used).
Fair value as at
Fair value
hierarchy
Valuation technique
and key input
31 December 31 May
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets:
Wealth management
products classified as
financial assets at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
30,044 – – 699,900 Level 2 Discounted cash
flow method
using the
expected
return based
on observable
market inputs.
APPENDIX I ACCOUNTANTS’ REPORT
– I-89 –


--- page 579 ---
Fair value as at
Fair value
hierarchy
Valuation technique
and key input
31 December 31 May
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Receivables at
FVTOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
29,102 62,678 485,699 90,972 Level 2 Discounted cash
flow method
using the
discount rate
that reflected
the credit risk
of the
corresponding
banks which
are observable.
There were no transfers between Level 1 and 2 during the both years.
Fair value of the Group’ s financial assets and financial liabilities that are not measured at fair value on a
recurring basis
Management considers that the carrying amounts of financial assets and financial liabilities recognised
in the consolidated financial statements approximate their fair values.
37. ACQUISITION OF A SUBSIDIARY
In September 2024, Inner Mongolia Chuangyuan acquired a 100% equity interest in Inner Mongolia Kanghong
New Materials Co., Ltd.* (ʮ̡) (“Kanghong New Materials”) for RMB14,000,000.
Following completion of the acquisition, Kanghong New Materials become a wholly owned subsidiary of Inner
Mongolia Chuangyuan.
As the Group acquires a group of assets and liabilities that do not constitute a business, the Group identifies
and recognises the individual identifiable assets acquired and liabilities assumed by allocating the purchase price first
to financial assets/financial liabilities at the respective fair values, with remaining balance of the purchase price
allocated to exploration and evaluation assets at the date of purchase.
Assets and liabilities recognised at the date of acquisition
RMB’000
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,045
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,164
Prepayments and other 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,045
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118443
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(697)
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,000
Net cash outflows arising on acquisition of Kanghong New Materials
RMB’000
Consideration paid in cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,000
Less: cash and cash equivalents acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(443)
13,557
* English name is for identification purpose only
APPENDIX I ACCOUNTANTS’ REPORT
– I-90 –


--- page 580 ---
38. DISPOSAL OF A SUBSIDIARY
(i) Inner Mongolia Chuangyuan Logistics Co., Ltd.* (ʮ̡) (“Inner Mongolia
Chuangyuan Logistics”)
On 30 November 2024, the Group disposed of its subsidiary, Inner Mongolia Chuangyuan Logistics, to its
related party, Zouping Chuangyuan Logistics Co., Ltd.* (ʮ̡) (“Zouping Chuangyuan
Logistics”), for RMB3,820,000. The net assets of Inner Mongolia Chuangyuan Logistics at the date of disposal were
as follows:
Analysis of assets and liabilities over which control was lost:
30 November 2024
RMB’000
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,020
Prepayments and other 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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,850
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,977
Trade and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(19,299)
Net assets disposed of /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,548
Consideration received:
RMB’000
Cash received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,820
Gain on disposal of a subsidiary:
Consideration received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,820
Net assets disposed of /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,548)
Loss on disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(728)
Net cash outflow arising on disposal:
Cash consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,820
Less: cash and cash equivalents disposed of /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,977)
(157)
(ii) Harrington Management Limited
On 30 May 2025, Inner Mongolia Chuangyuan disposed of its 100% interest in Harrington Management
Limited to a third party at a consideration of HKD10,000 (equivalent to RMB9,000). This transaction has resulted
in the recognition of a disposal gain of RMB5,174,000. The consideration has not been received yet.
39. CAPITAL COMMITMENTS
31 December
2022
31 December
2023
31 December
2024
31 May
2025
RMB’000 RMB’000 RMB’000 RMB’000
Capital expenditure in respect of
acquisition of property, plant and
equipment contracted for but not
provided in the Historical
Financial Information /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118277,012 251,967 2,243,511 1,269,805
* English name is for identification purpose only
APPENDIX I ACCOUNTANTS’ REPORT
– I-91 –


--- page 581 ---
40. PLEDGE OF ASSETS
The following assets have been pledged to various banks for securing of the Group’s banking facilities, and
the issue of bills payables or letter of credit at the end of each reporting period were summarised below:
31 December
2022
31 December
2023
31 December
2024
31 May
2025
RMB’000 RMB’000 RMB’000 RMB’000
Property, plant and equipment /H1118/H1118/H1118/H11185,158,400 4,934,408 7,290,813 8,838,852
Receivables at FVTOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 430,000 –
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118415,535 483,108 591,425 686,143
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,057,240 2,992,143 2,927,047 2,899,924
Restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,764,575 1,309,070 681,440 591,314
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 400,000
11,395,750 9,718,729 11,920,725 13,416,233
During the Track Record Period, Innovation Group pledged 100% of equity interests in Inner Mongolia
Chuangyuan in favour of Bank of Jinzhou as security for bank loans, and pledged 100% of equity interests in
Chuangyuan Alloy in favour of Industrial and Commercial Bank of China as security for bank loans. Details of which
are set out in note 29.
41. RELATED PARTY TRANSACTIONS
During the Track Record Period, the directors of the Company are of the view that the following are related
parties of the Group and the Company:
Name of party Relationship
Innovation Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Controlled by Mr. Cui
Innovation New Material Technology Co., Ltd.* (΅
ʮ̡) (“Innovation New Material”) and its subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
Shandong Luyu V alve Co., Ltd.* (ʮ̡) (“Shandong
Luyu”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by family of Mr. Cui
Hainan Fujuanyong and its subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Controlled by family of Mr. Cui
Shandong Suotong Innovation Materials Co., Ltd.* (ҿ
ʮ̡) (formerly known as Shandong Innovation Carbon
Materials Co., Ltd.* (ʮ̡)) (“Shandong
Suotong”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate of Innovation Group
Zouping Minsheng Metal Material Co., Ltd.* (Ϟ
ʮ̡) (“Zouping Minsheng”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by family of Mr. Cui
Zouping Chuangyuan Logistics /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Controlled by Mr. Cui
Zouping Innovation Property Co., Ltd.* (ʮ̡)
(“Zouping Innovation Property”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by family of Mr. Cui
Ms. Cui Jiao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Family of Mr. Cui
Mr. Cui Dong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Family of Mr. Cui
Shandong Innovation Metal Technology Co., Ltd.* (Ҧ
ʮ̡) (“Shandong Innovation Metal Technology”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
Suzhou Chuangtai Alloy Material Co., Ltd.* (ʮ
̡) (“Suzhou Chuangtai”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
Huolingol Qiyuan Aluminum Industry Co., Ltd.* (ெਔ̹ᄁ๕቙ุ
ʮ̡) (“Huolingol Qiyuan”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
Tongliao Smart Mining Co., Ltd.* (ʮ̡)
(“Tongliao Smart Mining”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
Shandong Lide New Energy Technology Co., Ltd.* (߅
ʮ̡) (“Shandong Lide”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate of Innovation New
Material
Shandong Chuangfeng new material Technology Co., Ltd.* (௴ᔮ
ʮ̡)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
Shandong Chuanghui new material Technology Co., Ltd.* (௴ሾอ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
APPENDIX I ACCOUNTANTS’ REPORT
– I-92 –


--- page 582 ---
Name of party Relationship
Shandong Innovation Precision Technology Co., Ltd.* (௴อၚ੗
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
Shandong Y uanwang Electrical Technology Co., Ltd.* (ཥʈ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
Shandong Innovation Plate Co., Ltd.* (ʮ̡) /H1118/H1118/H1118/H1118/H1118Controlled by Mr. Cui
Shandong Innovation Beihai Co., Ltd.* (ʮ̡) /H1118/H1118/H1118/H1118Controlled by Mr. Cui
Binzhou Chuangtai Trading Co., Ltd.* (ʮ̡)
(“Binzhou Chuangtai”) (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
Controlled by Mr. Cui
Shandong Kangtai Ecological Agriculture Park Co., Ltd.* (ੰइ͛
ʮ̡) (“Shandong Kangtai”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by family of Mr. Cui
Shandong Chuangtai New Materials Technology Co., Ltd.* (௴इ
ʮ̡) (“Chuangtai New Materials”) (note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
Inner Mongolia innovation lightweight New Material Co., Ltd.* ( ʫႆ
ʮ̡) (“Innovation Lightweight”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
Inner Mongolia Y uanwang Metal Technology Co., Ltd.* (׶
ʮ̡) (“Y uanwang Metal”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
Inner Mongolia Chuangxin New Material Co., Ltd.* ( ʫႆ̚௴ออҿ
ʮ̡) (“Inner Mongolia Chuangxin New Material”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by Mr. Cui
Note: On 6 February 2025, Innovation Group disposed Binzhou Chuangtai and Chuangtai New Materials to
an independent third party. Thus, transactions between the Group and Binzhou Chuangtai as well as
Chuangtai New Materials after date of disposal are no longer regarded as related party transactions.
The Group
(a) Related party transactions
During the Track Record Period, save as disclosed elsewhere in the historical financial information, the Group
had the following related party transactions:
(i) Revenue from related parties
Nature of transactions
Y ear ended
Five Months
ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Innovation New
Material and its
subsidiaries /H1118/H1118/H1118/H1118
Electrolytic aluminum,
electricity, steam supply,
and scrap and other
materials
195 10,891,848 11,608,881 5,289,226 4,315,938
Shandong Luyu /H1118/H1118/H1118Scrap and other materials 2,474 245 2,119 848 –
Chuangtai New
Materials /H1118/H1118/H1118/H1118/H1118
Electricity, natural gas and
Lime
–––– 9 8
Hainan Fujuanyong
and its
subsidiaries /H1118/H1118/H1118/H1118
Electrolytic aluminum and
scrap and other materials
74,132 50,664 – – 1,654
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 76,801 10,942,757 11,611,000 5,290,074 4,317,690
* English name is for identification purpose only.
APPENDIX I ACCOUNTANTS’ REPORT
– I-93 –


--- page 583 ---
(ii) Purchases of goods
Nature of transactions
Y ear ended
Five Months
ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Shandong Suotong /H1118/H1118Carbon anodes 1,093,033 914,032 623,265 196,526 253,816
Zouping Minsheng /H1118/H1118Spare parts and others 88 949 758 331 169
Shandong Luyu /H1118/H1118/H1118Spare parts and others 277 434 2,430 153 119
Innovation New
Material and its
subsidiaries /H1118/H1118/H1118/H1118
Spare parts and others – 43 890 4 1
Hainan Fujuanyong
and its
subsidiaries /H1118/H1118/H1118/H1118
Spare parts and others – – 498 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 1,093,398 915,458 627,841 197,014 254,105
(iii) Purchases of services
Nature of transactions
Y ear ended
Five Months
ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Zouping Chuangyuan
Logistics /H1118/H1118/H1118/H1118/H1118
Transportation service 27,466 17,348 23,991 9,947 17,298
Zouping Innovation
Property /H1118/H1118/H1118/H1118/H1118/H1118
Property management fee 1,409 222 – – 234
Innovation Group /H1118/H1118Labor cost – 1,923 650 – –
Innovation New
Material and its
subsidiaries /H1118/H1118/H1118/H1118
Testing fee – 91 3–––
Shandong Luyu /H1118/H1118/H1118Repair fee – 10 6–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 28,875 20,512 24,641 9,947 17,532
(iv) Purchases of equipment
Y ear ended Five Months ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Zouping Minsheng /H1118 1,881 14,228 22,226 1,138 8,015
Shandong Luyu /H1118/H1118/H1118 129 6,92 9–––
Innovation New
Material and its
subsidiaries
(Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 134,408 489 465
Hainan Fujuanyong
and its
subsidiaries /H1118/H1118/H1118/H1118 – – 51,079 17,378 42,536
Shandong Kangtai /H1118/H1118 –– 2 6 5––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,010 21,157 207,978 19,005 51,016
APPENDIX I ACCOUNTANTS’ REPORT
– I-94 –


--- page 584 ---
Note: On 28 April 2024, Chuangyuan Mental acquired a plant and an office building under construction from
Innovation Lightweight, a subsidiary of Innovation New Material, at a consideration of
RMB130,625,000 which was determined with reference to an independent valuation report.
(v) Interest expense
Y ear ended Five Months ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Ms. Cui Jiao /H1118/H1118/H1118/H1118/H11181,497 3,28 7–––
Innovation Group /H1118/H1118 828 18,940 7,855 7,855 –
Mr. Cui Dong /H1118/H1118/H1118/H11182 0 7 8 5 5–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,532 23,082 7,855 7,855 –
(vi) Gain on disposal of property, plant and equipment
On 31 October 2022, Chuangyuan Alloy sold machinery equipment to Innovation Lightweight,
subsidiaries of Innovation New Material at a consideration of RMB 2,180,000 respectively, which was
determined with reference to carrying amount of equipment, resulting in a gain on disposal of nil.
On 4 April 2023, Chuangyuan Alloy sold machinery equipment to Shandong Innovation Metal
Technology and Suzhou Chuangtai, subsidiaries of Innovation New Material at a consideration of
RMB11,159,000 and RMB3,729,000 respectively, which was determined with reference to carrying amount of
equipment, resulting in a gain on disposal of nil.
On 1 January 2024, Chuangyuan Alloy sold machinery equipment to Y uanwang Metal and Inner
Mongolia Chuangxin New Material, the subsidiaries of Innovation New Materials, with respective sale prices
of RMB17,848,000 and RMB77,756,000, resulting in gain on disposal of property, plant and equipment of
RMB4,393,000 and RMB4,190,000 respectively.
On 31 March 2025, Inner Mongolia Chuangyuan sold machinery equipment to Inner Mongolia
Chuangxin New Material, the subsidiary of Innovation New Materials, with sale price of RMB80,000,
resulting in loss on disposal of property, plant and equipment of RMB66,000.
(vii) Acquisition of a subsidiary
In November 2024, Inner Mongolia Chuangyuan acquired from Innovation Group a 100% equity interest
of Harrington Management Limited, which in turn holding 55% equity interest of PT Kayong Aluminum
Nusantara at nil consideration.
Harrington Management Limited and PT Kayong Aluminum Nusantara have no material operation since
its establishment in June 2024 and July 2024, respectively, and up to the acquisition date.
(viii) Disposal of a subsidiary
On 30 November 2024, the Group disposed of its subsidiary, Inner Mongolia Chuangyuan Logistics to
its related party, Zouping Chuangyuan Logistics for RMB3,820,000. Details of which are set out in note 38.
APPENDIX I ACCOUNTANTS’ REPORT
– I-95 –


--- page 585 ---
(ix) Other income
(i) Rental income
Y ear ended Five Months ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Huolingol Qiyuan /H1118/H1118 –6–––
Tongliao Smart
Mining /H1118/H1118/H1118/H1118/H1118/H1118/H1118–6–––
Innovation New
Material and
its subsidiaries /H1118/H1118 – 37,158 25,652 8,420 12,557
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 37,170 25,652 8,420 12,557
(ii) Others
Y ear ended Five Months ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Innovation New
Material and
its subsidiaries /H1118/H1118 86 7,410 5,856 2,850 1,359
Shandong Lide /H1118/H1118/H1118/H11182,78 2––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,868 7,410 5,856 2,850 1,359
(b) Outstanding balances with related parties:
Non-trade in nature
As disclosed in the consolidated statements of financial position, the Group had outstanding balances
due from (to) related parties at 31 December 2022 and 2023.
(i) Amounts due from related parties:
Maximum amount outstanding during
As at 31 December
As at
31 May Y ear ended 31 December
Five
Months
ended
31 May
2022 2023 2024 2025 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Innovation Group (note) /H1118 4,261,296 3,753,412 – – 4,385,832 4,285,815 3,753,412 –
Huolingol Qiyuan /H1118/H1118/H1118 75 78 – – 81 78 78 –
Chuangtai New
Materials /H1118/H1118/H1118/H1118/H1118/H1118–––––– 1 1,825 –
Innovation New Material
and its subsidiaries /H1118/H1118 –3–––33–
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,261,371 3,753,493 – –
Less: allowance for
impairment losses /H1118/H1118 (1,235) (1,078) – –
4,260,136 3,752,415 – –
APPENDIX I ACCOUNTANTS’ REPORT
– I-96 –


--- page 586 ---
Note: The amount due from Innovation Group was unsecured, interest-free and has no fixed repayment terms.
As part of the Reorganisation as detailed in note 2, the amount of RMB751,372,000 has been settled
through offsetting the consideration of an equivalent amount for the Group’s acquisition of 58.5% equity
interests, in aggregate, in Shandong Chuangyuan from Innovation Group in stages on 29 January 2024
and 29 March 2024. And the amount of RMB3,000,000,000 has been settled through offsetting the
consideration of an equivalent amount for the Group’s acquisition of 99% equity interest in Inner
Mongolia Chuangyuan from Innovation Group on 9 October 2024.
(ii) Amounts due to related parties:
As at 31 December As at 31 May
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Innovation Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118215,187 416,131 – –
Mr. Cui Dong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,61 7–––
Ms. Cui Jiao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,08 7–––
Tongliao Smart Mining /H1118/H1118/H1118/H1118/H11183 0 0–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118317,191 416,131 – –
Note: The amounts due to Innovation Group, Mr. Cui Dong and Ms. Cui Jiao are unsecured, carried at
interest rate of 7.00% per annum and payable on demand.
Trade in nature
(i) Trade receivables
31 December As at 31 May
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Shandong Luyu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118988 1,112 1,266 1,266
Hainan Fujuanyong and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,04 3–––
Innovation New Material and
its subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 75,974 15,893 30,734
8,031 77,086 17,159 32,000
Less: allowance for credit
losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2) (22) (5) (9)
8,029 77,064 17,154 31,991
The following is an aged analysis of trade receivables with related parties, net of allowance for
impairment presented based on the dates of acceptance of goods, which approximate the respective revenue
recognition dates, at the end of the reporting period:
As at 31 December As at 31 May
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 month /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,041 73,175 16,861 30,726
1 to 12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118988 3,016 293 1,265
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 8 7 3––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,029 77,064 17,154 31,991
APPENDIX I ACCOUNTANTS’ REPORT
– I-97 –


--- page 587 ---
(ii) Trade payables
As at 31 December As at 31 May
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Shandong Suotong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118334,901 250,301 288,100 195,827
Zouping Chuangyuan
Logistics /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,005 6,513 10,363 –
Shandong Luyu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118600 – 1,047 974
Innovation New Material and
its subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 1 2 3 2––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344,517 257,046 299,510 196,801
The following is an aged analysis of trade payables with related parties presented based on the invoice
dates at the end of each reporting period:
As at 31 December As at 31 May
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118200,743 252,930 126,601 152,500
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118139,013 – 116,754 43,373
91 days to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H11184,761 4,116 56,155 928
344,517 257,046 299,510 196,801
(iii) Prepayments and other receivables
As at 31 December As at 31 May
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Shandong Luyu /H1118/H1118/H1118Spare parts and others 4,384 – – 150
Innovation Group /H1118/H1118Labor cost 1,098 – – –
Zouping Minsheng /H1118Spare parts and others 8 3,158 416 918
Binzhou Chuangtai /H1118Alumina and other
related types of
products
– – 1,259 N/A
Innovation New
Material and its
subsidiaries /H1118/H1118/H1118/H1118
Spare parts and others – – 412 –
Hainan Fujuanyong
and its
subsidiaries /H1118/H1118/H1118/H1118
Spare parts and others – – – 740
Zouping
Chuangyuan
Logistics /H1118/H1118/H1118/H1118/H1118/H1118
Transportation service – – – 74
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 5,490 3,158 2,087 1,882
APPENDIX I ACCOUNTANTS’ REPORT
– I-98 –


--- page 588 ---
(iv) Contract liabilities
As at 31 December As at 31 May
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Binzhou Chuangtai /H1118Alumina and other
related types of
products
– – 26,431 N/A
Innovation New
Material and its
subsidiaries /H1118/H1118/H1118/H1118
Primary aluminum – – – 646
– – 26,431 646
(v) Other payables
As at 31 December As at 31 May
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Hainan Fujuanyong and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 39,759
(c) Details of guarantees
During the two years ended 31 December 2022 and 2023, Inner Mongolia Chuangyuan provided financial
guarantees in favor of several banks enabling Shandong Chuangfeng New Material Technology Co., Ltd., Shandong
Chuanghui New Material Technology Co., Ltd., Shandong Innovation Precision Technology Co., Ltd., Shandong
Y uanwang Electrical Technology Co., Ltd., Shandong Innovation Metal Technology, Shandong Innovation Plate Co.,
Ltd. and Shandong Innovation Beihai Co., Ltd., subsidiaries of Innovation New Material, to obtain bank borrowings
for a period of 1 year. The aggregate amount of outstanding financial guarantees granted to related parties that the
Group could be required to pay amounted to RMB920,000,000 and RMB100,000,000 as at 31 December 2022 and
2023, respectively. All of the outstanding financial guarantees has been utilised by the related parties. The financial
guarantees were provided at nil consideration. The fair value of these financial guarantee, as at dates of initial
recognition, were considered insignificant.
The above financial guarantee contracts have all expired by the end of March 2024.
(d) Compensation of key management personnel
The remuneration of directors and other members of key management during the Track Record Period was as
follows:
Y ear ended Five Months ended 31 May
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, allowances and
benefits in kind /H1118/H1118/H1118/H1118/H1118/H1118796 830 1,070 355 472
Bonus /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,191 9,570 17,419 6,624 6,847
Retirement benefit scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 28 42 18 26
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,015 10,428 18,531 6,997 7,345
APPENDIX I ACCOUNTANTS’ REPORT
– I-99 –


--- page 589 ---
The Company
(a) Outstanding balances
Non-trade in nature
(i) Amount due from a related party
As at 31 December As at 31 May
2023 2024 2025
RMB’000 RMB’000 RMB’000
Bloomsbury Holding /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–* –* –
(ii) Amount due to subsidiaries
As at 31 December As at 31 May
2023 2024 2025
RMB’000 RMB’000 RMB’000
Inner Mongolia Chuangyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 8,098 22,915
Phineas Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,954
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– 8,098 26,869
* Less than RMB1,000.
42. MAJOR NON-CASH TRANSACTIONS
The Group has carried out the following major non-cash transactions during the Track Record Period.
i. During the year ended 31 December 2023 and 2024 and the five months ended 31 May 2024, bank loans
under supplier finance arrangements amounted to RMB77,500,000, RMB112,490,000 and
RMB75,520,000 (unaudited), respectively, represent the payments to the suppliers by Bank of Jinzhou
directly. During the five months ended 31 May 2025, borrowings under supplier finance arrangement of
RMB61,749,000 represent the payments to the suppliers by Bank of Qingdao directly.
ii. During the year ended 31 December 2022, 2023 and 2024 and the five months ended 31 May 2024 and
2025, payments to a finance provider amounted to RMB833,124,000, RMB1,200,685,000,
RMB165,596,000, RMB106,024,000 (unaudited) and nil, respectively, represent the payments to
suppliers by the finance provider directly.
iii. During the year ended 31 December 2023, a non-controlling interest made capital injection into
Shandong Chuangyuan in form of property, plant and equipment and leasehold lands, and amounting to
RMB439,012,000. Details of which are set out in notes 15 and 16.
iv. The Group entered into new lease agreements for the use of leased plant and machinery for eight years.
On the lease commencement, the Group recognised right-of-use assets and lease liabilities of
RMB83,569,000 and RMB83,569,000, respectively, during the year ended 31 December 2023. During
the five months ended 31 May 2025, additional lease liabilities amounted to RMB148,944,000
recognised with related right-of-use assets amounted to RMB184,728,000, represents the new lease
entered of aircraft and offices.
v. On 29 January 2024 and 29 March 2024, Inner Mongolia Chuangyuan acquired 58.5% equity interests
in aggregate of Shandong Chuangyuan from Innovation Group in stages at a total consideration of
RMB751,372,000. Such consideration has been settled in full through offsetting the receivables of an
equivalent amount owed by Inner Mongolia Chuangyuan to Innovation Group.
vi. On 9 October 2024, Beijing Chuangyuan entered into a share transfer agreement with Innovation Group
and Inner Mongolia Chuangyuan, pursuant to which Innovation Group agreed to transfer 99% equity
interest in Inner Mongolia Chuangyuan to Beijing Chuangyuan at a consideration of
RMB3,000,000,000. Such consideration has been settled in full through offsetting the receivables of an
equivalent amount owed by Innovation Group to Beijing Chuangyuan. Upon completion of the capital
increase, Inner Mongolia Chuangyuan was held by Beijing Chuangyuan and Carnaby Management as to
99% and 1%, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-100 –


--- page 590 ---
43. PARTICULARS OF SUBSIDIARIES OF THE COMPANY
43.1 General information of subsidiaries
As at 31 December 2022, 2023 and 2024, 31 May 2025 and the date of this report, the Company has direct and indirect equity interests in the following subsi diaries:
Name of subsidiary/consolidated
affiliated entity
Place of
incorporation/
registration/
operations
Date of
incorporation/
registration
Issued and
fully paid
share/
registered
capital
Proportion of ownership interest and voting
power held by the Company
Date of this report Principal activities Notes
31 December 31 May
2022 2023 2024 2025
RMB’000
Directly held:
Phineas Management /H1118/H1118/H1118/H1118/H1118Hong Kong 15 September
2023
–** N/A 100% 100% 100% 100% Investment holding (note c)
Brentford Management Pte.
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Singapore 10 September
2024
– N/A N/A N/A N/A 100% Investment holding
Innovation Global Oasis
FZ-LLC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
United Arab
Emirates
5 April 2025 – N/A N/A N/A 100% 100% Investment holding
Innovation Global Industries
UK Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The United
Kingdom of
Great
Britain and
Northern
Ireland
21 January
2025
– N/A N/A N/A 100% 100% Commodity trading
platform
Cedarway Management
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hong Kong 14 March 2025 – N/A N/A N/A 100% 100% Commodity trading
platform
Camden Management
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hong Kong 14 March 2025 – N/A N/A N/A 100% 100% Commodity trading
platform
Indirectly held:
Inner Mongolia Chuangyuan /H1118PRC 10 May 2012 2,032,320 100% 100% 100% 100% 100% Smelting and selling
electrolytic
aluminum
(note a
and j)
Chuangyuan Alloy /H1118/H1118/H1118/H1118/H1118/H1118PRC 28 January
2019
400,000 100% 100% 100% 100% 100% Providing electricity
transmission services
(note a)
APPENDIX I ACCOUNTANTS’ REPORT
– I-101 –


--- page 591 ---
Name of subsidiary/consolidated
affiliated entity
Place of
incorporation/
registration/
operations
Date of
incorporation/
registration
Issued and
fully paid
share/
registered
capital
Proportion of ownership interest and voting
power held by the Company
Date of this report Principal activities Notes
31 December 31 May
2022 2023 2024 2025
RMB’000
Inner Mongolia Chuangyuan
Industry and Trade Co.,
Ltd.* ( ʫႆ̚௴๕ʈ൱Ϟ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 19 April 2017 – 100% 100% N/A N/A N/A Import and export
trading of metals
(note c, g
and j)
Inner Mongolia Chuangyuan
Wind Power Co., Ltd.*
(ʮ
̡), /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 20 July 2018 100,000 100% 100% 100% 100% 100% Developing wind power
generation
(note c)
Inner Mongolia Chuangyuan
Keyou Energy Co., Ltd.*
(̛อঐ๕Ϟ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 11 November
2022
– 100% 100% 100% 100% 100% Providing electricity
transmission services
(note c)
Inner Mongolia
Hongchuangxin Energy
Co., Ltd.* ( ʫႆ҃̚௴อ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 7 June 2023 – – 100% N/A N/A N/A Providing electricity
transmission services
(note c
and h)
Inner Mongolia Hongshi
New Energy Co., Ltd.*
(ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 8 August 2023 – – 100% N/A N/A N/A Providing electricity
transmission services
(note c
and i)
Inner Mongolia Chuangyuan
Material Recycling Co.,
Ltd.* (༟Ύ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118
PRC 26 July 2018 – 100% 100% 100% 100% 100% Recycling and
processing metals
(note c)
Inner Mongolia Chuangyuan
New Material Co., Ltd.*
(ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 13 January
2022
20,000 100% 100% 100% 100% 100% Manufacturing and
selling eco-
environmental
materials
(note c)
APPENDIX I ACCOUNTANTS’ REPORT
– I-102 –


--- page 592 ---
Name of subsidiary/consolidated
affiliated entity
Place of
incorporation/
registration/
operations
Date of
incorporation/
registration
Issued and
fully paid
share/
registered
capital
Proportion of ownership interest and voting
power held by the Company
Date of this report Principal activities Notes
31 December 31 May
2022 2023 2024 2025
RMB’000
Chuangyuan Smart Energy /H1118/H1118PRC 4 June 2018 20,000 100% 100% 100% 100% 100% Providing electricity
transmission services
(note c)
Huolingol Chuangjin
Aluminum Industry Co.,
Ltd.* (቙
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 12 April 2018 – 100% N/A N/A N/A N/A Smelting non-ferrous
metals
(notes c
and d)
Huolingol Chuangyuan
Faxiang Aluminum
Industry Co., Ltd.* (؍
ࠢ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 13 March 2018 – 100% N/A N/A N/A N/A Smelting non-ferrous
metals
(notes c
and d)
Inner Mongolia Huomei
Chuangyuan Mining Co.,
Ltd.* ( ʫႆ̚ᎍ๩௴๕ᘤ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 30 May 2014 – 100% 100% N/A N/A N/A Selling coal and non-
ferrous metals
(note c
and g)
Inner Mongolia Zhenyuan
Aluminum Industry Co.,
Ltd.* (๕቙ุϞ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 25 May 2018 – 100% N/A N/A N/A N/A Smelting non-ferrous
metals
(notes c
and d)
Shandong Chuangyuan /H1118/H1118/H1118/H1118PRC 12 November
2018
450,000 – – 58.5% 58.5% 58.5% Producing and selling
alumina and other
related types of
products
(note b)
Inner Mongolia Chuangyuan
New Energy Co., Ltd.*
(ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 24 May 2021 – 100% N/A N/A N/A N/A Providing electricity
transmission services
(notes c
and e)
APPENDIX I ACCOUNTANTS’ REPORT
– I-103 –


--- page 593 ---
Name of subsidiary/consolidated
affiliated entity
Place of
incorporation/
registration/
operations
Date of
incorporation/
registration
Issued and
fully paid
share/
registered
capital
Proportion of ownership interest and voting
power held by the Company
Date of this report Principal activities Notes
31 December 31 May
2022 2023 2024 2025
RMB’000
Inner Mongolia Chuangyuan
Supply Chain Management
Co., Ltd.* ( ʫႆ̚௴๕Զ
ʮ̡)
(formerly known as Inner
Mongolia Tengxin
Industry and Trade Co.,
Ltd.* (ʈ൱Ϟ
ʮ̡)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 27 June 2023 – N/A 100% 100% 100% 100% Selling coal and non-
ferrous metals
(note c
and j)
Beijing Chuangyuan /H1118/H1118/H1118/H1118/H1118PRC 9 May 2024 – N/A N/A 100% 100% 100% Investment holding (note c
and f)
Kanghong New Materials /H1118/H1118PRC 25 May 2023 – N/A – 100% 100% 100% Investment holding (note c)
Harrington Management
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hong Kong 20 June 2024 – N/A N/A 100% – – Investment holding (note k)
Kingston Management Pte.
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Singapore 26 September
2024
– N/A N/A 100% 100% 100% Investment holding
Beijing Chuangyuan
Xinchuang Metal
Materials Design &
Research Co., Ltd.* ( ̏ԯ
޼ࠇ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC 23 October
2025
– N/A N/A N/A N/A 100% Designing and
researching of metal
materials
* English name is for identification purpose only.
** Less than RMB1,000.
All entities now comprising the Group are limited liability companies and have adopted 31 December as their financial year end date.
APPENDIX I ACCOUNTANTS’ REPORT
– I-104 –


--- page 594 ---
Notes:
(a) The statutory financial statements of the entities for the years ended 31 December 2022 and 2023 prepared under PRC GAAP were audited by Shandong Ai zhinuo
Accountants (General Partnership)* (ה(౷ஷΥྫ)), certified public accountants registered in the PRC. No statutory financial statements have been
prepared for the year ended 31 December 2024.
(b) The statutory financial statements of the entity for the years ended 31 December 2022, 2023 and 2024 prepared under PRC GAAP were audited by Shandon g Huasheng
Certified Public Accountants Co., Ltd* (ʮ̡), certified public accountants registered in the PRC.
(c) No statutory financial statements have been prepared for other subsidiaries of the Company for each of the three years ended 31 December 2022, 2023 and 2024, as there
were no statutory audit requirements for these subsidiaries.
(d) The subsidiaries were deregistered on 24 August 2023.
(e) The subsidiary was deregistered on 8 June 2023.
(f) The subsidiary was established on 5 May 2024, and is a foreign owned enterprise established in the PRC.
(g) The subsidiaries were deregistered on 15 March 2024.
(h) The subsidiary was deregistered on 18 March 2024.
(i) The subsidiary was deregistered on 30 April 2024.
(j) The subsidiaries had entered into the non-compliant bill discounting in 2023 and ceased all non-compliant bill discounting since 21 November 202 3. Details are set out
in the section headed “Business — Legal Proceedings and Compliance Matters — Non-compliant Bill Discounting.” in the Document.
(k) As disclosed in note 38, the subsidiary was disposed to a third party on 30 May 2025.
None of the subsidiaries had issued any debt securities at the end of each reporting period.
* English name is for identification purpose only.
APPENDIX I ACCOUNTANTS’ REPORT
– I-105 –


--- page 595 ---
44. INVESTMENT IN JOINT VENTURES
(i) PT Kayong Aluminum Nusantara
In November 2024, Inner Mongolia Chuangyuan entered into a joint venture agreement with PT Cipta
Langgeng Kemakmuran to jointly control PT Kayong Aluminum Nusantara.
PT Kayong Aluminum Nusantara is owned by Harrington Management Limited (“Harrington Management”),
a wholly owned subsidiary of the Group, and PT Cipta Langgeng Kemakmuran, an independent third party, as to 55%
and 45%, respectively. PT Kayong Aluminum Nusantara was accounted for as a jointly controlled entity as unanimous
consent from both parties was assessed to be required for key business decisions.
PT Kayong Aluminum Nusantara was located in Indonesia, and will construct an aluminum smelting project
in Indonesia.
As disclosed in note 38, on 30 May 2025, the Group disposed of its entire 100% equity interest in Harrington
Management to an independent third party, while, in turn, the Group’s 45% equity interest in PT Kayong Aluminum
Nusantara was also disposed of, accordingly.
(ii) Red Sea Aluminium Holdings Pte. Ltd. (“Red Sea JV”)
Red Sea JV was incorporated in Singapore in October 2024 for the purpose to acquire a new integrated
electrolytic aluminum industry chain project, which targeted to construct primarily an electrolytic aluminum smelting
facility and an aluminum alloy processing facility in Saudi Arabia (“Saudi Project”). Saudi Project was undertaken
by Red Sea Aluminium Industrial Company LLC (“Red Sea Aluminium Industrial”), a wholly owned subsidiary of
Innovation Group.
On date of incorporation and up to 31 May 2025, Red Sea JV is owned by Kingston Management Pte. Ltd.
(“Kingston Management”), a wholly owned subsidiary of the Group, Innovation Group, and other 2 independent third
parties as to 33%, 32% and 35%, respectively. As at 31 May 2025, Kingston Management has not yet injected capital
into Red Sea JV .
On 5 May 2025, Red Sea JV completed the acquisition of 100% equity interest in Red Sea Aluminium
Industrial from Innovation Group.
Red Sea Aluminum Industrial had not carried out any substantive business operation.
45. RETIREMENT BENEFITS PLANS
The employees of the Group entities in the PRC are members of the state-sponsored retirement benefit scheme
organised by the relevant local government authority in the PRC. The PRC entities are required to contribute, based
on a certain percentage of the payroll costs of its employees, to the retirement benefit scheme and have no further
obligations for the actual payment of pensions or post-retirement benefits beyond the annual contributions.
Contributions to the scheme vest immediately, there is no forfeited contributions that may be used by the Group to
reduce the existing level of contribution.
For the years ended 31 December 2022, 2023 and 2024 and five months ended 31 May 2024 and 2025, the total
amount provided by the Group to the scheme in the PRC and charged to profit or loss are RMB24,555,000,
RMB24,948,000, RMB29,916,000, RMB12,942,000 (unaudited) and RMB14,788,000, respectively.
46. EVENTS AFTER THE REPORTING PERIOD
Save as disclosed in notes 26 and 29, there were no other significant events taken place subsequent to the end
of the five months ended 31 May 2025.
47. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements of the Group, the Company or any of its subsidiaries have been prepared in
respect of any period subsequent to 31 May 2025 and up to the date of this report.
APPENDIX I ACCOUNTANTS’ REPORT
– I-106 –


--- page 596 ---
The information set forth in this Appendix does not form part of the accountants’ report
on the historical financial information of the Group for each of the three years ended 31
December 2024 and the five months ended 31 May 2025 (the “Accountants’ Report”) prepared
by Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, the reporting
accountants of the Company, as set forth in Appendix I to this document, respectively, and is
included herein for information only.
The unaudited pro forma financial information should be read in conjunction with the
section headed “Financial Information” in this document and the Accountants’ Report set forth
in Appendix I to this document, respectively.
A. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF ADJUSTED
CONSOLIDATED NET TANGIBLE ASSETS OF THE GROUP ATTRIBUTABLE
TO OWNERS OF THE COMPANY
The following unaudited pro forma statement of adjusted consolidated net tangible assets
of the Group attributable to owners of the Company which has been prepared in accordance
with paragraph 4.29 of the Listing Rules is for the purpose of illustrating the effect of the
proposed Hong Kong public offering and international offering of the Share of the Company
(the “Global Offering”) on the consolidated net tangible assets of the Group attributable to the
owners of the Company as if the Global Offering had taken place on 31 May 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 purpose only
and, because of its hypothetical nature, it may not give a true picture of the consolidated net
tangible assets of the Group attributable to owners of the Company had the Global Offering
been completed as at 31 May 2025 or at any further dates. It is prepared based on the audited
consolidated net tangible liabilities of the Group attributable to owners of the Company as at
31 May 2025 as derived from the Accountants’ Report set out in Appendix I to this document
and adjusted as described below.
Audited
consolidated
net tangible
liabilities of
the Group
attributable to
owners of the
Company as at
31 May 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 at
31 May 2025
Unaudited pro forma
adjusted consolidated net
tangible assets of the
Group attributable to
owners of the Company
per Share as at
31 May 2025
RMB’000 RMB’000 RMB’000 RMB HK$
(note 1) (note 2) (note 3) (note 4)
Based on an Offer Price
of HK$10.18 per Share /H1118(1,177,137) 4,504,334 3,327,197 1.66 1.82
Based on an Offer Price
of HK$10.99 per Share /H1118(1,177,137) 4,863,866 3,686,729 1.84 2.02
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 597 ---
Notes:
1. The audited consolidated net tangible liabilities of the Group attributable to owners of the Company as at
31 May 2025 is arrived at after deducting intangible assets attributable to owners of the Company of Renminbi
(“RMB”) 3,187,859,000 from the audited consolidated net assets of RMB2,010,722,000 attributable to owners
of the Company at 31 May 2025 as extracted from the Accountants’ Report set out in Appendix I to this
document.
2. The estimated net proceeds from the issue of the new shares pursuant to the Global Offering are based on
500,000,000 Shares at the Offer Price of Hong Kong Dollar (“HK$”) 10.18 (equivalent to RMB9.28) and
HK$10.99 (equivalent to RMB10.02) per Share, being the low-end and high-end of the stated indicated Offer
Price Range respectively, after deduction of the estimated underwriting fees and commissions and other listing
related expenses not yet recognised in profit or loss up to 31 May 2025 (excluding the listing expenses that
have been charged to profit or loss during the Track Record Period). It does not take into account of any share
(i) which may be allotted and issued upon the exercise of the Over-allotment Option or any other issuance or
repurchase of shares by the Company; or (ii) which may be issued under the restricted shares schemes.
For the purpose of this unaudited pro forma statement, the estimated net proceeds from the Global Offering
are converted from HK$ into RMB at an exchange rate of HK$1.00 to RMB0.91151, which was the exchange
rate prevailing on 6 November 2025 with reference to the rate published by the People’s Bank of China. No
representation is made that the HK$ amounts have been, could have been or may be converted to RMB, or vice
versa, at that rate or any other rates or at all.
3. The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the
Company per Share would be RMB1.66 (equivalent to HK$1.82) based on an Offer Price of HK$10.18 per
Share and RMB1.84 (equivalent to HK$2.02) based on an Offer Price of HK$10.99 per Share, respectively, on
the basis that 2,000,000,000 shares including 1,500,000,000 existing ordinary shares in issue and 500,000,000
offer Shares were in issue assuming that the Global offering had been completed on 31 May 2025, without
taking into account of any share (i) which may be allotted and issued upon the exercise of the Over-allotment
Option or any other issuance or repurchase of shares by the Company; or (ii) which may be issued under the
restricted shares schemes.
4. The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the
Company per share, is converted from RMB into HK$ at an exchange rate of RMB1.00 to HK$1.0971, which
was the exchange rate prevailing on 6 November 2025 with reference to the rate published by the People’s
Bank of China. No representation is made that the RMB amounts have been, could have been or may be
converted to Hong Kong dollars, or vice versa, at that rate or any other rates or at all.
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 at 31 May 2025 to reflect any trading result or other transaction of
the Group entered into subsequent to 31 May 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 598 ---
The following is the text of the independent reporting accountants’ assurance report
received from Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, the
reporting accountants of the Company, in respect of the Group’ s unaudited pro forma financial
information prepared for the purpose of incorporation in this document.
B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
To the Directors of Chuangxin Industries Holdings Limited
We have completed our assurance engagement to report on the compilation of unaudited
pro forma financial information of Chuangxin Industries Holdings Limited (the “Company”)
and its subsidiaries (hereinafter collectively referred to as the “Group”) by the directors of the
Company (the “Directors”) for illustrative purposes only. The unaudited pro forma financial
information consists of the unaudited pro forma statement of adjusted consolidated net tangible
assets as at 31 May 2025 and related notes as set out on pages II-1 to II-2 of Appendix II to
the prospectus issued by the Company dated 14 November 2025 (the “Document”). 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 to the Document.
The unaudited pro forma financial information has been compiled by the Directors to
illustrate the impact of the proposed Global offering (as defined in the Document) on the
Group’s financial position as at 31 May 2025 as if the proposed Global offering had taken place
at 31 May 2025. As part of this process, information about the Group’s financial position has
been extracted by the Directors from the Group’s historical financial information for each of
the three years ended 31 December 2024 and the five months ended 31 May 2025, on which
an accountants’ report set out in Appendix I to the Document has been published.
Directors’ Responsibilities 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 599 ---
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 and
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 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 an investment
circular is solely to illustrate the impact of a significant event or transaction on unadjusted
financial information of the Group as if the event had occurred or the transaction had been
undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not
provide any assurance that the actual outcome of the event or transaction at 31 May 2025 would
have been as presented.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 600 ---
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 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’ judgment, having regard to
the reporting accountants’ understanding of the nature of the Group, 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 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.
Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong
14 November 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 601 ---
SUMMARY OF THE CONSTITUTION OF THE COMPANY
1 Memorandum of Association
The Memorandum of Association of the Company was conditionally adopted on
November 9, 2025 and states, inter alia, that the liability of the members of the Company is
limited, that the objects for which the Company is established are unrestricted and the
Company shall have full power and authority to carry out any object not prohibited by the
Cayman Companies Act or any other law of the Cayman Islands.
The Memorandum of Association is available for inspection at the address specified in
Appendix V in the section headed “Documents Delivered to the Registrar of Companies and
Available on Display”.
2 Articles of Association
The Articles of Association of the Company were conditionally adopted on November 9,
2025 and include provisions to the following effect:
2.1 Classes of Shares
The share capital of the Company consists of ordinary shares. The authorized share
capital of the Company at the date of adoption of the Articles is US$50,000.00 divided into
10,000,000,000 shares of US$0.000005 each.
2.2 Directors
(a) Power to allot and issue Shares
Subject to the provisions of the Cayman Companies Act and the Memorandum and
Articles of Association, the unissued shares in the Company (whether forming part of its
original or any increased capital) shall be at the disposal of the Directors, who may offer,
allot, grant options over or otherwise dispose of them to such persons, at such times and
for such consideration, and upon such terms, as the Directors shall determine.
Subject to the provisions of the Articles of Association and to any direction that may
be given by the Company in general meeting and without prejudice to any special rights
conferred on the holders of any existing shares or attaching to any class of shares, any
share may be issued with or have attached thereto such preferred, deferred, qualified or
other special rights or restrictions, whether in regard to dividend, voting, return of capital
or otherwise, and to such persons at such times and for such consideration as the Directors
may determine. Subject to the Cayman Companies Act and to any special rights conferred
on any shareholders or attaching to any class of shares, any share may, with the sanction
of a special resolution, be issued on terms that it is, or at the option of the Company or
the holder thereof, liable to be redeemed.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-1 –


--- page 602 ---
(b) Power to dispose of the assets of the Company or any subsidiary
The management of the business of the Company shall be vested in the Directors
who, in addition to the powers and authorities by the Articles of Association expressly
conferred upon them, may exercise all such powers and do all such acts and things as may
be exercised or done or approved by the Company and are not by the Articles of
Association or the Cayman Companies Act expressly directed or required to be exercised
or done by the Company in general meeting, but subject nevertheless to the provisions of
the Cayman Companies Act and of the Articles of Association and to any regulation from
time to time made by the Company in general meeting not being inconsistent with such
provisions or the Articles of Association, provided that no regulation so made shall
invalidate any prior act of the Directors which would have been valid if such regulation
had not been made.
(c) Compensation or payment for loss of office
Payment to any Director or past Director of any sum by way of compensation for
loss of office or as consideration for or in connection with his retirement from office (not
being a payment to which the Director is contractually entitled) must first be approved by
the Company in general meeting.
(d) Loans to Directors
There are provisions in the Articles of Association prohibiting the making of loans
to Directors or their respective close associates which are equivalent to the restrictions
imposed by the Companies Ordinance.
(e) Financial assistance to purchase Shares
Subject to all applicable laws, the Company may give financial assistance to
Directors and employees of the Company, its subsidiaries or any holding company or any
subsidiary of such holding company in order that they may buy shares in the Company
or any such subsidiary or holding company. Further, subject to all applicable laws, the
Company may give financial assistance to a trustee for the acquisition of shares in the
Company or shares in any such subsidiary or holding company to be held for the benefit
of employees of the Company, its subsidiaries, any holding company of the Company or
any subsidiary of any such holding company (including salaried Directors).
(f) Disclosure of interest in contracts with the Company or any of its subsidiaries
No Director or proposed Director shall be disqualified by his office from contracting
with the Company either as vendor, purchaser or otherwise nor shall any such contract or
any contract or arrangement entered into by or on behalf of the Company with any person,
company or partnership of or in which any Director shall be a member or otherwise
interested be capable on that account of being avoided, nor shall any Director so
contracting or being any member or so interested be liable to account to the Company for
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-2 –


--- page 603 ---
any profit so realized by any such contract or arrangement by reason only of such Director
holding that office or the fiduciary relationship thereby established, provided that such
Director shall, if his interest in such contract or arrangement is material, declare the
nature of his interest at the earliest meeting of the board of Directors at which it is
practicable for him to do so, either specifically or by way of a general notice stating that,
by reason of the facts specified in the notice, he is to be regarded as interested in any
contracts of a specified description which may be made by the Company.
A Director shall not be entitled to vote on (nor shall be counted in the quorum in
relation to) any resolution of the Directors in respect of any contract or arrangement or
any other proposal in which the Director or any of his close associates (or, if required by
the Listing Rules, his other associates) has any material interest, and if he shall do so his
vote shall not be counted (nor is he to be counted in the quorum for the resolution), but
this prohibition shall not apply to any of the following matters, namely:
(i) the giving to such Director or any of his close associates of any security or
indemnity in respect of money lent or obligations incurred or undertaken by
him or any of them at the request of or for the benefit of the Company or any
of its subsidiaries;
(ii) the giving of any security or indemnity to a third party in respect of a debt or
obligation of the Company or any of its subsidiaries for which the Director or
any of his close associates has himself/themselves assumed responsibility in
whole or in part and whether alone or jointly under a guarantee or indemnity
or by the giving of security;
(iii) any proposal concerning an offer of shares, debentures or other securities of or
by the Company or any other company which the Company may promote or be
interested in for subscription or purchase where the Director or any of his close
associates is/are or is/are to be interested as a participant in the underwriting
or sub-underwriting of the offer;
(iv) any proposal or arrangement concerning the benefit of employees of the
Company or any of its subsidiaries including:
(A) the adoption, modification or operation of any employees’ share scheme
or any share incentive scheme or share option scheme under which the
Director or any of his close associates may benefit; or
(B) the adoption, modification or operation of a pension or provident fund or
retirement, death or disability benefits scheme which relates both to
Directors, their close associates and employees of the Company or any of
its subsidiaries and does not provide in respect of any Director or any of
his close associates, as such any privilege or advantage not generally
accorded to the class of persons to which such scheme or fund relates; and
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-3 –


--- page 604 ---
(v) any contract or arrangement in which the Director or any of his close associates
is/are interested in the same manner as other holders of shares or debentures or
other securities of the Company by virtue only of his/their interest in shares or
debentures or other securities of the Company.
(g) Remuneration
The Directors shall be entitled to receive by way of remuneration for their services
such sum as shall from time to time be determined by the Directors, or the Company in
general meeting, as the case may be, such sum (unless otherwise directed by the
resolution by which it is determined) to be divided amongst the Directors in such
proportions and in such manner as they may agree, or failing agreement, equally, except
that in such event any Director holding office for less than the whole of the relevant
period in respect of which the remuneration is paid shall only rank in such division in
proportion to the time during such period for which he has held office. Such remuneration
shall be in addition to any other remuneration to which a Director who holds any salaried
employment or office in the Company may be entitled by reason of such employment or
office.
The Directors shall also be entitled to be paid all expenses, including travel
expenses, reasonably incurred by them in or in connection with the performance of their
duties as Directors including their expenses of traveling to and from board meetings,
committee meetings or general meetings or otherwise incurred whilst engaged on the
business of the Company or in the discharge of their duties as Directors.
The Directors may grant special remuneration to any Director who shall perform any
special or extra services at the request of the Company. Such special remuneration may
be made payable to such Director in addition to or in substitution for his ordinary
remuneration as a Director, and may be made payable by way of salary, commission or
participation in profits or otherwise as may be agreed.
The remuneration of an executive Director or a Director appointed to any other
office in the management of the Company shall from time to time be fixed by the
Directors and may be by way of salary, commission or participation in profits or
otherwise or by all or any of those modes and with such other benefits (including share
option and/or pension and/or gratuity and/or other benefits on retirement) and allowances
as the Directors may from time to time decide. Such remuneration shall be in addition to
such remuneration as the recipient may be entitled to receive as a Director.
(h) Retirement, appointment and removal
The number of Directors shall not be less than two.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-4 –


--- page 605 ---
The Directors shall have power at any time and from time to time to appoint any
person to be a Director, either to fill a casual vacancy or as an addition to the existing
Directors. Any Director so appointed shall hold office only until the first annual general
meeting of the Company after his appointment and shall then be eligible for re-election
at that meeting.
The Company may by ordinary resolution remove any Director (including a
Managing Director or other executive Director) before the expiration of his period of
office notwithstanding anything in the Articles of Association or in any agreement
between the Company and such Director (but without prejudice to any claim for
compensation or damages payable to him in respect of the termination of his appointment
as Director or of any other appointment of office as a result of the termination of this
appointment as Director).
The Company may by ordinary resolution appoint another person in his place. Any
Director so appointed shall hold office during such time only as the Director in whose
place he is appointed would have held the same if he had not been removed. The Company
may also by ordinary resolution elect any person to be a Director, either to fill a casual
vacancy or as an addition to the existing Directors. Any Director so appointed shall hold
office only until the first annual general meeting of the Company after this appointment
and shall then be eligible for re-election but shall not be taken into account in determining
the number of Directors and which Directors who are to retire by rotation at such meeting.
No person shall, unless recommended by the Board, be eligible for election to the
office of Director at any general meeting unless, during the period, which shall be at least
seven days, commencing no earlier than the day after the dispatch of the notice of the
meeting appointed for such election and ending no later than seven days prior to the date
of such meeting, there has been given to the Secretary of the Company notice in writing
by a member of the Company (not being the person to be proposed) entitled to attend and
vote at the meeting for which such notice is given of his intention to propose such person
for election and also notice in writing signed by the person to be proposed of his
willingness to be elected.
There is no shareholding qualification for Directors nor is there any specified age
limit for Directors. The office of a Director shall be vacated:
(i) if he resigns his office by notice in writing to the Company at its registered
office or its principal office in Hong Kong;
(ii) if an order is made by any competent court or official on the grounds that he
is or may be suffering from mental disorder or is otherwise incapable of
managing his affairs and the Directors resolve that his office be vacated;
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-5 –


--- page 606 ---
(iii) if, without leave, he is absent from meetings of the Directors (unless an
alternate Director appointed by him attends) for 12 consecutive months, and
the Directors resolve that his office be vacated;
(iv) if he becomes bankrupt or has a receiving order made against him or suspends
payment or compounds with his creditors generally;
(v) if he ceases to be or is prohibited from being a Director by law or by virtue of
any provision in the Articles of Association;
(vi) if he is removed from office by a notice in writing served upon him signed by
not less than three-fourths in number (or, if that is not a round number, the
nearest lower round number) of the Directors (including himself) for the time
being then in office; or
(vii) if he shall be removed from office by an ordinary resolution of the members
of the Company under the Articles of Association.
At every annual general meeting of the Company one-third of the Directors for the
time being, or, if their number is not three or a multiple of three, then the number nearest
to, but not less than, one-third, shall retire from office by rotation, provided that every
Director (including those appointed for a specific term) shall be subject to retirement by
rotation at least once every three years. A retiring Director shall retain office until the
close of the meeting at which he retires and shall be eligible for re-election thereat. The
Company at any annual general meeting at which any Directors retire may fill the vacated
office by electing a like number of persons to be Directors.
(i) Borrowing powers
The Directors may from time to time at their discretion exercise all the powers of
the Company to raise or borrow or to secure the payment of any sum or sums of money
for the purposes of the Company and to mortgage or charge its undertaking, property and
assets (present and future) and uncalled capital or any part thereof.
(j) Proceedings of the Board
The Directors may meet together for the dispatch of business, adjourn and otherwise
regulate their meetings and proceedings as they think fit in any part of the world.
Questions arising at any meeting shall be determined by a majority of votes. In the case
of an equality of votes, the chairman of the meeting shall have a second or casting vote.
2.3 Alteration to constitutional documents
No alteration or amendment to the Memorandum or Articles of Association may be made
except by special resolution.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-6 –


--- page 607 ---
2.4 V ariation of rights of existing shares or classes of shares
If at any time the share capital of the Company is divided into different classes of shares,
all or any of the rights attached to any class of shares for the time being issued (unless
otherwise provided for in the terms of issue of the shares of that class) may, subject to the
provisions of the Cayman Companies Act, be varied or abrogated either with the consent in
writing of the holders of not less than three-fourths in nominal value of the issued shares of
that class or with the sanction of a special resolution passed at a separate meeting of the holders
of the shares of that class. To every such separate meeting all the provisions of the Articles of
Association relating to general meetings shall mutatis mutandis apply, but so that the quorum
for the purposes of any such separate meeting and of any adjournment thereof shall be a person
or persons together holding (or representing by proxy or duly authorized representative) at the
date of the relevant meeting not less than one-third in nominal value of the issued shares of that
class.
The special rights conferred upon the holders of shares of any class shall not, unless
otherwise expressly provided in the rights attaching to or the terms of issue of such shares, be
deemed to be varied by the creation or issue of further shares ranking pari passu therewith.
2.5 Alteration of capital
The Company may, from time to time, whether or not all the shares for the time being
authorized shall have been issued and whether or not all the shares for the time being issued
shall have been fully paid up, by ordinary resolution, increase its share capital by the creation
of new shares, such new capital to be of such amount and to be divided into shares of such
respective amounts as the resolution shall prescribe.
The Company may from time to time by ordinary resolution:
(a) consolidate and divide all or any of its share capital into shares of a larger amount
than its existing shares. On any consolidation of fully paid shares and division into
shares of larger amount, the Directors may settle any difficulty which may arise as
they think expedient and in particular (but without prejudice to the generality of the
foregoing) may as between the holders of shares to be consolidated determine which
particular shares are to be consolidated into each consolidated share, and if it shall
happen that any person shall become entitled to fractions of a consolidated share or
shares, such fractions may be sold by some person appointed by the Directors for
that purpose and the person so appointed may transfer the shares so sold to the
purchaser thereof and the validity of such transfer shall not be questioned, and so
that the net proceeds of such sale (after deduction of the expenses of such sale) may
either be distributed among the persons who would otherwise be entitled to a
fraction or fractions of a consolidated share or shares ratably in accordance with
their rights and interests or may be paid to the Company for the Company’s benefit;
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-7 –


--- page 608 ---
(b) cancel any shares which at the date of the passing of the resolution have not been
taken or agreed to be taken by any person, and diminish the amount of its share
capital by the amount of the shares so canceled subject to the provisions of the
Cayman Companies Act; and
(c) sub-divide its shares or any of them into shares of smaller amount than is fixed by
the Memorandum of Association, subject nevertheless to the provisions of the
Cayman Companies Act, and so that the resolution whereby any share is sub-divided
may determine that, as between the holders of the shares resulting from such
sub-division, one or more of the shares may have any such preferred or other special
rights, over, or may have such deferred rights or be subject to any such restrictions
as compared with the others as the Company has power to attach to unissued or new
shares.
The Company may by special resolution reduce its share capital or any capital redemption
reserve in any manner authorized and subject to any conditions prescribed by the Cayman
Companies Act.
2.6 Special resolution — majority required
A “special resolution” is defined in the Articles of Association to have the meaning
ascribed thereto in the Cayman Companies Act, for which purpose, the requisite majority shall
be not less than three-fourths of the votes of such members of the Company as, being entitled
to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations,
by their duly authorized representatives, at a general meeting of which notice specifying the
intention to propose the resolution as a special resolution has been duly given and includes a
special resolution signed by all members for the time being entitled to receive notice of and to
attend and vote at general meetings (or being corporations by their duly appointed
representatives), and any such resolution shall be deemed to have been passed at a meeting held
on the date on which it was signed by the last member to sign.
In contrast, an “ordinary resolution” is defined in the Articles of Association to mean a
resolution passed by a simple majority of the votes of such members of the Company as, being
entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of
corporations, by their duly authorized representatives, at a general meeting held in accordance
with the Articles of Association and includes an ordinary resolution approved in writing by all
the members of the Company aforesaid.
2.7 V oting rights
Subject to any special rights, privileges or restrictions as to voting for the time being
attached to any class or classes of shares, at any general meeting on a poll every member
(except the holder of treasury share(s) (as defined under the Companies Act, the “ Treasury
Share(s )”)) present in person (or, in the case of a member being a corporation, by its duly
authorized representative) or by proxy shall have one vote for each share registered in his name
in the register of members of the Company.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-8 –


--- page 609 ---
Where any member is, under the Listing Rules, required to abstain from voting on any
particular resolution or restricted to voting only for or only against any particular resolution,
any votes cast by or on behalf of such member in contravention of such requirement or
restriction shall not be counted.
In the case of joint registered holders of any share, any one of such persons may vote at
any meeting, either personally or by proxy, in respect of such share as if he were solely entitled
thereto; but if more than one of such joint holders be present at any meeting personally or by
proxy, that one of the said persons so present being the most or, as the case may be, the more
senior shall alone be entitled to vote in respect of the relevant joint holding and, for this
purpose, seniority shall be determined by reference to the order in which the names of the joint
holders stand on the register in respect of the relevant joint holding.
A member of the Company in respect of whom an order has been made by any competent
court or official on the grounds that he is or may be suffering from mental disorder or is
otherwise incapable of managing his affairs may vote by any person authorized in such
circumstances to do so and such person may vote by proxy.
Save as expressly provided in the Articles of Association or as otherwise determined by
the Directors, no person other than a member of the Company duly registered and who shall
have paid all sums for the time being due from him payable to the Company in respect of his
shares shall be entitled to be present or to vote (save as proxy for another member of the
Company), or to be reckoned in a quorum, either personally or by proxy at any general
meeting.
At any general meeting a resolution put to the vote of the meeting shall be decided by way
of a poll save that the chairman of the meeting may allow a resolution which relates purely to
a procedural or administrative matter as prescribed under the Listing Rules to be voted on by
a show of hands.
If a recognized clearing house (or its nominee(s)) is a member of the Company it may
authorize such person or persons as it thinks fit to act as its proxy(ies) or representative(s) at
any meeting of the Company (including general meeting and creditors meeting of the
Company) or at any general meeting of any class of members of the Company provided that,
if more than one person is so authorized, the authorization shall specify the number and class
of shares in respect of which each such person is so authorized. A person authorized pursuant
to this provision shall be entitled to exercise the same rights and powers on behalf of the
recognized clearing house (or its nominee(s)) which he represents as that recognized clearing
house (or its nominee(s)) could exercise as if it were an individual member of the Company
holding the number and class of shares specified in such authorization, including, where a show
of hands is allowed, the right to vote individually on a show of hands.
All members for the time being entitled to receive notice of and to attend and vote at
general meetings (or, in the case of a member being a corporation, its duly authorised
representative), shall have the right to speak at any general meetings of the Company.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-9 –


--- page 610 ---
A Treasury Share shall not be voted, directly or indirectly, at any general meeting of the
Company and shall not be counted in determining the total number of issued shares at any
given time, whether for the purposes of the Articles of Association or the Companies Act.
2.8 Annual general meetings and extraordinary general meetings
The Company must hold a general meeting as its annual general meeting each financial
year. Such meeting must be held within six months after the end of the Company’s financial
year. The annual general meeting shall be specified as such in the notices calling it.
Extraordinary general meetings may be convened on the requisition of one or more
shareholders (or any one member which is a recognized clearing house (or its nominee(s))
holding, at the date of deposit of the requisition, not less than one-tenth of the paid up capital
of the Company having the right of voting at general meetings.
2.9 Accounts and audit
The Directors shall cause to be kept such books of account as are necessary to give a true
and fair view of the state of the Company’s affairs and to show and explain its transactions and
otherwise in accordance with the Cayman Companies Act.
The Directors shall from time to time determine whether, and to what extent, and at what
times and places and under what conditions or regulations, the accounts and books of the
Company, or any of them, shall be open to the inspection by members of the Company (other
than officers of the Company) and no such member shall have any right of inspecting any
accounts or books or documents of the Company except as conferred by the Cayman
Companies Act or any other relevant law or regulation or as authorized by the Directors or by
the Company in general meeting.
The Directors shall, commencing with the first annual general meeting, cause to be
prepared and to be laid before the members of the Company at every annual general meeting
a profit and loss account for the period, in the case of the first account, since the incorporation
of the Company and, in any other case, since the preceding account, together with a statement
of financial position as at the date to which the profit and loss account is made up and a
Director’s report with respect to the profit or loss of the Company for the period covered by
the profit and loss account and the state of the Company’s affairs as at the end of such period,
an auditor’s report on such accounts and such other reports and accounts as may be required
by law. Copies of those documents to be laid before the members of the Company at an annual
general meeting shall not less than 21 days before the date of the meeting, be sent in the manner
in which notices may be served by the Company as provided in the Articles of Association to
every member of the Company and every holder of debentures of the Company provided that
the Company shall not be required to send copies of those documents to any person of whose
address the Company is not aware or to more than one of the joint holders of any shares or
debentures.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-10 –


--- page 611 ---
The appointment, removal and remuneration of an auditor or auditors of the Company
shall require the approval of an ordinary resolution of the members in general meeting. The
Company shall at every annual general meeting appoint an auditor or auditors of the Company
who shall hold office until the next annual general meeting and fix the remuneration of such
auditor(s) being appointed. The removal of any auditor before the expiration of his period of
office shall be approved at a general meeting; and the members shall at that meeting appoint
new auditor in its place for the remainder of the term. Subject to compliance with the Listing
Rules, the Board may fill any casual vacancy in the office of auditor, but while any such
vacancy continues, the surviving or continuing Auditor or Auditors, if any, may act.
2.10 Notice of meetings and business to be conducted thereat
An annual general meeting shall be called by not less than 21 days’ notice in writing and
any extraordinary general meeting shall be called by not less than 14 days’ notice in writing.
The notice shall be exclusive of the day on which it is served or deemed to be served and of
the day for which it is given, and shall specify the time, place (except in the case of a virtual
meeting held in accordance with the Articles of Association) and agenda of the meeting,
particulars of the resolutions and the general nature of the business to be considered at the
meeting. The notice convening an annual general meeting shall specify the meeting as such,
and the notice convening a meeting to pass a special resolution shall specify the intention to
propose the resolution as a special resolution. Notice of every general meeting shall be given
to the auditors and all members of the Company (other than those who, under the provisions
of the Articles of Association or the terms of issue of the shares they hold, are not entitled to
receive such notice from the Company).
Notwithstanding that a meeting of the Company is called by shorter notice than that
mentioned above, it shall be deemed to have been duly called if it is so agreed:
(a) in the case of a meeting called as an annual general meeting, by all members of the
Company entitled to attend and vote thereat or their proxies; and
(b) in the case of any other meeting, by a majority in number of the members having a
right to attend and vote at the meeting, being a majority together holding not less
than 95% in nominal value of the shares giving that right.
2.11 Transfer of shares
Transfers of shares may be effected by an instrument of transfer in the usual common
form or in such other form as the Directors may approve which is consistent with the standard
form of transfer as prescribed by the Stock Exchange.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-11 –


--- page 612 ---
The instrument of transfer shall be executed by or on behalf of the transferor and, unless
the Directors otherwise determine, the transferee, and the transferor shall be deemed to remain
the holder of the share until the name of the transferee is entered in the register of members
of the Company in respect thereof. All instruments of transfer shall be retained by the
Company.
The Directors may, in its absolute discretion, and without assigning any reason, refuse to
register any transfer of any share which is not fully paid up or on which the Company has a
lien. The Directors may also decline to register any transfer of any shares unless:
(a) the instrument of transfer is lodged with the Company accompanied by the
certificate for the shares to which it relates (which shall upon the registration of the
transfer be canceled) and such other evidence as the Directors may reasonably
require to show the right of the transferor to make the transfer;
(b) the instrument of transfer is in respect of only one class of shares;
(c) the instrument of transfer is properly stamped (in circumstances where stamping is
required);
(d) in the case of a transfer to joint holders, the number of joint holders to whom the
share is to be transferred does not exceed four;
(e) the shares concerned are free of any lien in favor of the Company; and
(f) a fee of such amount not exceeding the maximum amount as the Stock Exchange
may from time to time determine to be payable (or such lesser sum as the Directors
may from time to time require) is paid to the Company in respect thereof.
If the Directors refuse to register a transfer of any share they shall, within two months
after the date on which the transfer was lodged with the Company, send to each of the transferor
and the transferee notice of such refusal.
The registration of transfers may, on 10 business days’ notice (or on 6 business days’
notice in the case of a rights issue) being given by advertisement published on the Stock
Exchange’s website, or, subject to the Listing Rules, by electronic communication in the
manner in which notices may be served by the Company by electronic means as provided in
the Articles of Association or by advertisement published in the newspapers, be suspended and
the register of members of the Company closed at such times for such periods as the Directors
may from time to time determine, provided that the registration of transfers shall not be
suspended or the register closed for more than 30 days in any year (or such longer period as
the members of the Company may by ordinary resolution determine provided that such period
shall not be extended beyond 60 days in any year).
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-12 –


--- page 613 ---
2.12 Power of the Company to purchase its own shares
The Company is empowered by the Cayman Companies Act and the Articles of
Association to purchase its own shares subject to certain restrictions and the Directors may
only exercise this power on behalf of the Company subject to the authority of its members in
general meeting as to the manner in which they do so and to any applicable requirements
imposed from time to time by the Stock Exchange and the Securities and Futures Commission
of Hong Kong. The holder of the shares being purchased shall be bound to deliver up to the
Company at its principal place of business in Hong Kong or such other place as the Directors
shall specify the certificate(s) thereof, if any, and thereupon the Company shall pay to him the
purchase or redemption monies in respect thereof. The Board shall have the discretion to cancel
such certificate(s).
Subject to the Listing Rules, the Directors may, prior to the purchase, redemption or
surrender of any share, determine that such share shall be held as a Treasury Share or canceled,
and may resolve to cancel a Treasury Share or transfer a Treasury Share on such terms as they
think proper.
2.13 Power of any subsidiary of the Company to own shares
There are no provisions in the Articles of Association relating to the ownership of shares
by a subsidiary.
2.14 Dividends and other methods of distribution
Subject to the Cayman Companies Act and the Articles of Association, the Company in
general meeting may declare dividends in any currency but no dividends shall exceed the
amount recommended by the Directors. No dividend may be declared or paid other than out of
profits and reserves of the Company lawfully available for distribution, including share
premium.
Unless and to the extent that the rights attached to any shares or the terms of issue thereof
otherwise provide, all dividends shall (as regards any shares not fully paid throughout the
period in respect of which the dividend is paid) be apportioned and paid pro rata according to
the amounts paid up on the shares during any portion or portions of the period in respect of
which the dividend is paid. For these purposes no amount paid up on a share in advance of calls
shall be treated as paid up on the share.
The Directors may from time to time pay to the members of the Company such interim
dividends as appear to the Directors to be justified by the profits of the Company. The Directors
may also pay half-yearly or at other intervals to be selected by them any dividend which may
be at a fixed rate if they are of the opinion that the profits available for distribution justify the
payment.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-13 –


--- page 614 ---
The Directors may retain any dividends or other monies payable on or in respect of a
share upon which the Company has a lien, and may apply the same in or towards satisfaction
of the debts, liabilities or engagements in respect of which the lien exists. The Directors may
also deduct from any dividend or other monies payable to any member of the Company all
sums of money (if any) presently payable by him to the Company on account of calls,
installments or otherwise.
No dividend shall carry interest against the Company.
Whenever the Directors or the Company in general meeting have resolved that a dividend
be paid or declared on the share capital of the Company, the Directors may further resolve: (a)
that such dividend be satisfied wholly or in part in the form of an allotment of shares credited
as fully paid up on the basis that the shares so allotted are to be of the same class as the class
already held by the allottee, provided that the members of the Company entitled thereto will
be entitled to elect to receive such dividend (or part thereof) in cash in lieu of such allotment;
or (b) that the members of the Company entitled to such dividend will be entitled to elect to
receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the
dividend as the Directors may think fit on the basis that the shares so allotted are to be of the
same class as the class already held by the allottee. The Company may upon the
recommendation of the Directors by ordinary resolution resolve in respect of any one particular
dividend of the Company that notwithstanding the foregoing a dividend may be satisfied
wholly in the form of an allotment of shares credited as fully paid without offering any right
to members of the Company to elect to receive such dividend in cash in lieu of such allotment.
Any dividend, interest or other sum payable in cash to a holder of shares may be paid by
cheque or warrant sent through the post addressed to the registered address of the member of
the Company entitled, or in the case of joint holders, to the registered address of the person
whose name stands first in the register of members of the Company in respect of the joint
holding or to such person and to such address as the holder or joint holders may in writing
direct. Every cheque or warrant so sent shall be made payable to the order of the holder or, in
the case of joint holders, to the order of the holder whose name stands first on the register of
members of the Company in respect of such shares, and shall be sent at his or their risk and
the payment of any such cheque or warrant by the bank on which it is drawn shall operate as
a good discharge to the Company in respect of the dividend and/or bonus represented thereby,
notwithstanding that it may subsequently appear that the same has been stolen or that any
endorsement thereon has been forged. The Company may cease sending such cheques for
dividend entitlements or dividend warrants by post if such cheques or warrants have been left
uncashed on two consecutive occasions. However, the Company may exercise its power to
cease sending cheques for dividend entitlements or dividend warrants after the first occasion
on which such a cheque or warrant is returned undelivered. Any one of two or more joint
holders may give effectual receipts for any dividends or other monies payable or property
distributable in respect of the shares held by such joint holders.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-14 –


--- page 615 ---
Any dividend unclaimed for six years from the date of declaration of such dividend may
be forfeited by the Directors and shall revert to the Company.
Whenever the Directors or the Company in general meeting have resolved that a dividend
may be paid or declared, the Directors may further resolve that such dividend be satisfied
wholly or in part by the distribution of specific assets of any kind, and in particular of paid up
shares, debentures or warrants to subscribe securities of any other company, and where any
difficulty arises in regard to such distribution the Directors may settle it as they think
expedient, and in particular may disregard fractional entitlements, round the same up or down
or provide that the same shall accrue to the benefit of the Company, and may fix the value for
distribution of such specific assets and may determine that cash payments shall be made to any
members of the Company upon the footing of the value so fixed in order to adjust the rights
of all parties, and may vest any such specific assets in trustees as may seem expedient to the
Directors.
No dividend may be declared or paid, and no other distribution (whether in cash or
otherwise) of the Company’s assets (including any distribution of assets to members on a
winding up) may be declared or paid in respect of a Treasury Share. Notwithstanding the
foregoing, nothing in the Articles of Association prevent an allotment of shares as fully paid
up bonus shares in respect of a Treasury Share and shares allotted as fully paid up bonus shares
in respect of a Treasury Share shall be treated as Treasury Shares.
2.15 Proxies
Any member of the Company entitled to attend and vote at a meeting of the Company
shall be entitled to appoint another person who must be an individual as his proxy to attend and
vote instead of him and a proxy so appointed shall have the same right as the member to speak
at the meeting. A proxy need not be a member of the Company.
Instruments of proxy shall be in common form or in such other form as the Directors may
from time to time approve provided that it shall enable a member to instruct his proxy to vote
in favor of or against (or in default of instructions or in the event of conflicting instructions,
to exercise his discretion in respect of) each resolution to be proposed at the meeting to which
the form of proxy relates. The instrument of proxy shall be deemed to confer authority to vote
on any amendment of a resolution put to the meeting for which it is given as the proxy thinks
fit. The instrument of proxy shall, unless the contrary is stated therein, be valid as well for any
adjournment of the meeting as for the meeting to which it relates provided that the meeting was
originally held within 12 months from such date.
The instrument appointing a proxy shall be in writing under the hand of the appointor or
his attorney authorized in writing or if the appointor is a corporation either under its seal or
under the hand of an officer, attorney or other person authorized to sign the same.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-15 –


--- page 616 ---
The instrument appointing a proxy and (if required by the Directors) the power of
attorney or other authority (if any) under which it is signed, or a notarially certified copy of
such power or authority, shall be delivered at the registered office of the Company (or at such
other place as may be specified in the notice convening the meeting or in any notice of any
adjournment or, in either case, in any document sent therewith) not less than 48 hours before
the time appointed for holding the meeting or adjourned meeting at which the person named
in the instrument proposes to vote or, in the case of a poll taken subsequently to the date of
a meeting or adjourned meeting, not less than 48 hours before the time appointed for the taking
of the poll and in default the instrument of proxy shall not be treated as valid. No instrument
appointing a proxy shall be valid after the expiration of 12 months from the date named in it
as the date of its execution. Delivery of any instrument appointing a proxy shall not preclude
a member of the Company from attending and voting in person at the meeting or poll concerned
and, in such event, the instrument appointing a proxy shall be deemed to be revoked.
2.16 Calls on shares and forfeiture of shares
The Directors may from time to time make calls upon the members of the Company in
respect of any monies unpaid on their shares (whether on account of the nominal amount of the
shares or by way of premium or otherwise) and not by the conditions of allotment thereof made
payable at fixed times and each member of the Company shall (subject to the Company serving
upon him at least 14 days’ notice specifying the time and place of payment and to whom such
payment shall be made) pay to the person at the time and place so specified the amount called
on his shares. A call may be revoked or postponed as the Directors may determine. A person
upon whom a call is made shall remain liable on such call notwithstanding the subsequent
transfer of the shares in respect of which the call was made.
A call may be made payable either in one sum or by installments and shall be deemed to
have been made at the time when the resolution of the Directors authorizing the call was
passed. The joint holders of a share shall be jointly and severally liable to pay all calls and
installments due in respect of such share or other monies due in respect thereof.
If a sum called in respect of a share shall not be paid before or on the day appointed for
payment thereof, the person from whom the sum is due shall pay interest on the sum from the
day appointed for payment thereof to the time of actual payment at such rate, not exceeding
15% per annum, as the Directors may determine, but the Directors shall be at liberty to waive
payment of such interest wholly or in part.
If any call or installment of a call remains unpaid on any share after the day appointed
for payment thereof, the Directors may at any time during such time as any part thereof remains
unpaid serve a notice on the bolder of such shares requiring payment of so much of the call or
installment as is unpaid together with any interest which may be accrued and which may still
accrue up to the date of actual payment.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-16 –


--- page 617 ---
The notice shall name a further day (not being less than 14 days from the date of service
of the notice) on or before which, and the place where, the payment required by the notice is
to be made, and shall state that in the event of non-payment at or before the time and at the
place appointed, the shares in respect of which such call was made or installment is unpaid will
be liable to be forfeited.
If the requirements of such notice are not complied with, any share in respect of which
such notice has been given may at any time thereafter, before payment of all calls or
installments and interest due in respect thereof has been made, be forfeited by a resolution of
the Directors to that effect. Such forfeiture shall include all dividends and bonuses declared in
respect of the forfeited shares and not actually paid before the forfeiture. A forfeited share shall
be deemed to be the property of the Company and may be re-allotted, sold or otherwise
disposed of.
A person whose shares have been forfeited shall cease to be a member of the Company
in respect of the forfeited shares but shall, notwithstanding the forfeiture, remain liable to pay
to the Company all monies which at the date of forfeiture were payable by him to the Company
in respect of the shares, together with (if the Directors shall in their discretion so require)
interest thereon at such rate not exceeding 15% per annum as the Directors may prescribe from
the date of forfeiture until payment, and the Directors may enforce payment thereof without
being under any obligation to make any allowance for the value of the shares forfeited, at the
date of forfeiture.
2.17 Inspection of register of members
The register of members of the Company shall be kept in such manner as to show at all
times the members of the Company for the time being and the shares respectively held by them.
The register may, on 10 business days’ notice (or on 6 business days’ notice in the case of a
rights issue) being given by advertisement published on the Stock Exchange’s website, or,
subject to the Listing Rules, by electronic communication in the manner in which notices may
be served by the Company by electronic means as provided in the Articles of Association or
by advertisement published in the newspapers, be closed at such times and for such periods as
the Directors may from time to time determine either generally or in respect of any class of
shares, provided that the register shall not be closed for more than 30 days in any year (or such
longer period as the members of the Company may by ordinary resolution determine provided
that such period shall not be extended beyond 60 days in any year).
Any register of members kept in Hong Kong shall during normal business hours (subject
to such reasonable restrictions as the Directors may impose) be open to inspection by any
member of the Company without charge and by any other person on payment of a fee of such
amount not exceeding the maximum amount as may from time to time be permitted under the
Listing Rules as the Directors may determine for each inspection.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-17 –


--- page 618 ---
2.18 Quorum for meetings and separate class meetings
No business shall be transacted at any general meeting unless a quorum is present when
the meeting proceeds to business, but the absence of a quorum shall not preclude the
appointment of a chairman which shall not be treated as part of the business of the meeting.
Two members of the Company (excluding the holder of a Treasury Share) present in
person or by proxy shall be a quorum provided always that if the Company has only one
member of record the quorum shall be that one member present in person or by proxy.
A corporation being a member of the Company shall be deemed for the purpose of the
Articles of Association to be present in person if represented by its duly authorized
representative being the person appointed by resolution of the directors or other governing
body of such corporation or by power of attorney to act as its representative at the relevant
general meeting of the Company or at any relevant general meeting of any class of members
of the Company.
The quorum for a separate general meeting of the holders of a separate class of shares of
the Company is described in paragraph 2.4 above.
2.19 Rights of minorities in relation to fraud or oppression
There are no provisions in the Articles of Association concerning the rights of minority
shareholders in relation to fraud or oppression.
2.20 Procedure on liquidation
Subject to the Cayman Companies Act, the Company may by special resolution resolve
that the Company be wound up voluntarily.
If the Company shall be wound up, and the assets available for distribution amongst the
members of the Company as such shall be insufficient to repay the whole of the paid-up capital,
such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the
members of the Company in proportion to the capital paid up, or which ought to have been paid
up, at the commencement of the winding up on the shares held by them respectively. If in a
winding up the assets available for distribution amongst the members of the Company shall be
more than sufficient to repay the whole of the capital paid up at the commencement of the
winding up, the excess shall be distributed amongst the members of the Company in proportion
to the capital paid up at the commencement of the winding up on the shares held by them
respectively. The foregoing is without prejudice to the rights of the holders of shares issued
upon special terms and conditions.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-18 –


--- page 619 ---
If the Company shall be wound up, the liquidator may with the sanction of a special
resolution of the Company and any other sanction required by the Cayman Companies Act,
divide amongst the members of the Company in specie or kind the whole or any part of the
assets of the Company (whether they shall consist of property of the same kind or not) and may,
for such purpose, set such value as he deems fair upon any property to be divided as aforesaid
and may determine how such division shall be carried out as between the members or different
classes of members of the Company. The liquidator may, with the like sanction, vest the whole
or any part of such assets in trustees upon such trusts for the benefit of the members of the
Company as the liquidator, with the like sanction and subject to the Cayman Companies Act,
shall think fit, but so that no member of the Company shall be compelled to accept any assets,
shares or other securities in respect of which there is a liability.
2.21 Untraceable members
The Company shall be entitled to sell any shares of a member of the Company or the
shares to which a person is entitled by virtue of transmission on death or bankruptcy or
operation of law if: (a) all cheques or warrants, not being less than three in number, for any
sums payable in cash to the holder of such shares have remained uncashed for a period of 12
years; (b) the Company has not during that time or before the expiry of the three month period
referred to in (d) below received any indication of the whereabouts or existence of the member;
(c) during the 12 year period, at least three dividends in respect of the shares in question have
become payable and no dividend during that period has been claimed by the member; and (d)
upon expiry of the 12 year period, the Company has caused an advertisement to be published
in the newspapers or subject to the Listing Rules, by electronic communication in the manner
in which notices may be served by the Company by electronic means as provided in the Articles
of Association, giving notice of its intention to sell such shares and a period of three months
has elapsed since such advertisement and the Stock Exchange has been notified of such
intention. The net proceeds of any such sale shall belong to the Company and upon receipt by
the Company of such net proceeds it shall become indebted to the former member for an
amount equal to such net proceeds.
SUMMARY OF CAYMAN ISLANDS COMPANY LA W AND TAXATION
1 Introduction
The Cayman Companies Act is derived, to a large extent, from the older Companies Acts
of England, although there are significant differences between the Cayman Companies Act and
the current Companies Act of England. Set out below is a summary of certain provisions of the
Cayman Companies Act, although this does not purport to contain all applicable qualifications
and exceptions or to be a complete review of all matters of corporate law and taxation which
may differ from equivalent provisions in jurisdictions with which interested parties may be
more familiar.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-19 –


--- page 620 ---
2 Incorporation
The Company was incorporated in the Cayman Islands as an exempted company with
limited liability on 4 July 2023 under the Cayman Companies Act. As such, its operations must
be conducted mainly outside the Cayman Islands. The Company is required to file an annual
return each year with the Registrar of Companies of the Cayman Islands and pay a fee which
is based on the size of its authorized share capital.
3 Share Capital
The Cayman Companies Act permits a company to issue ordinary shares, preference
shares, redeemable shares or any combination thereof.
The Cayman Companies Act provides that where a company issues shares at a premium,
whether for cash or otherwise, a sum equal to the aggregate amount of the value of the premia
on those shares shall be transferred to an account called the “share premium account”. At the
option of a company, these provisions may not apply to premia on shares of that company
allotted pursuant to any arrangement in consideration of the acquisition or cancelation of
shares in any other company and issued at a premium. The Cayman Companies Act provides
that the share premium account may be applied by a company, subject to the provisions, if any,
of its memorandum and articles of association, in such manner as the company may from time
to time determine including, but without limitation:
(a) paying distributions or dividends to members;
(b) paying up unissued shares of the company to be issued to members as fully paid
bonus shares;
(c) in the redemption and repurchase of shares (subject to the provisions of section 37
of the Cayman Companies Act);
(d) writing-off the preliminary expenses of the company;
(e) writing-off the expenses of, or the commission paid or discount allowed on, any
issue of shares or debentures of the company; and
(f) providing for the premium payable on redemption or purchase of any shares or
debentures of the company.
No distribution or dividend may be paid to members out of the share premium account
unless immediately following the date on which the distribution or dividend is proposed to be
paid the company will be able to pay its debts as they fall due in the ordinary course of
business.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-20 –


--- page 621 ---
The Cayman Companies Act provides that, subject to confirmation by the Grand Court of
the Cayman Islands, a company limited by shares or a company limited by guarantee and
having a share capital may, if so authorized by its articles of association, by special resolution
reduce its share capital in any way.
Subject to the detailed provisions of the Cayman Companies Act, a company limited by
shares or a company limited by guarantee and having a share capital may, if so authorized by
its articles of association, issue shares which are to be redeemed or are liable to be redeemed
at the option of the company or a shareholder. In addition, such a company may, if authorized
to do so by its articles of association, purchase its own shares, including any redeemable
shares. The manner of such a purchase must be authorized either by the articles of association
or by an ordinary resolution of the company. The articles of association may provide that the
manner of purchase may be determined by the directors of the company. At no time may a
company redeem or purchase its shares unless they are fully paid. A company may not redeem
or purchase any of its shares if, as a result of the redemption or purchase, there would no longer
be any member of the company holding shares. A payment out of capital by a company for the
redemption or purchase of its own shares is not lawful unless immediately following the date
on which the payment is proposed to be made, the company shall be able to pay its debts as
they fall due in the ordinary course of business.
There is no statutory restriction in the Cayman Islands on the provision of financial
assistance by a company for the purchase of, or subscription for, its own or its holding
company’s shares. Accordingly, a company may provide financial assistance if the directors of
the company consider, in discharging their duties of care and to act in good faith, for a proper
purpose and in the interests of the company, that such assistance can properly be given. Such
assistance should be on an arm’s-length basis.
4 Dividends and Distributions
With the exception of section 34 of the Cayman Companies Act, there are no statutory
provisions relating to the payment of dividends. Based upon English case law which is likely
to be persuasive in the Cayman Islands in this area, dividends may be paid only out of profits.
In addition, section 34 of the Cayman Companies Act permits, subject to a solvency test and
the provisions, if any, of the company’s memorandum and articles of association, the payment
of dividends and distributions out of the share premium account (see paragraph 3 above for
details).
5 Shareholders’ Suits
The Cayman Islands courts can be expected to follow English case law precedents. The
rule in Foss v. Harbottle (and the exceptions thereto which permit a minority shareholder to
commence a class action against or derivative actions in the name of the company to challenge
(a) an act which is ultra vires the company or illegal, (b) an act which constitutes a fraud
against the minority where the wrongdoers are themselves in control of the company, and (c)
an action which requires a resolution with a qualified (or special) majority which has not been
obtained) has been applied and followed by the courts in the Cayman Islands.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-21 –


--- page 622 ---
6 Protection of Minorities
In the case of a company (not being a bank) having a share capital divided into shares,
the Grand Court of the Cayman Islands may, on the application of members holding not less
than one-fifth of the shares of the company in issue, appoint an inspector to examine into the
affairs of the company and to report thereon in such manner as the Grand Court shall direct.
Any shareholder of a company may petition the Grand Court of the Cayman Islands which
may make a winding up order if the court is of the opinion that it is just and equitable that the
company should be wound up.
Claims against a company by its shareholders must, as a general rule, be based on the
general laws of contract or tort applicable in the Cayman Islands or their individual rights as
shareholders as established by the company’s memorandum and articles of association.
The English common law rule that the majority will not be permitted to commit a fraud
on the minority has been applied and followed by the courts of the Cayman Islands.
7 Disposal of Assets
The Cayman Companies Act contains no specific restrictions on the powers of directors
to dispose of assets of a company. As a matter of general law, in the exercise of those powers,
the directors must discharge their duties of care and to act in good faith, for a proper purpose
and in the interests of the company.
8 Accounting and Auditing Requirements
The Cayman Companies Act requires that a company shall cause to be kept proper books
of account with respect to:
(a) all sums of money received and expended by the company and the matters in respect
of which the receipt and expenditure takes place;
(b) all sales and purchases of goods by the company; and
(c) the assets and liabilities of the company.
Proper books of account shall not be deemed to be kept if there are not kept such books
as are necessary to give a true and fair view of the state of the company’s affairs and to explain
its transactions.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-22 –


--- page 623 ---
9 Register of Members
An exempted company may, subject to the provisions of its articles of association,
maintain its principal register of members and any branch registers at such locations, whether
within or without the Cayman Islands, as its directors may from time to time think fit. There
is no requirement under the Cayman Companies Act for an exempted company to make any
returns of members to the Registrar of Companies of the Cayman Islands. The names and
addresses of the members are, accordingly, not a matter of public record and are not available
for public inspection.
10 Inspection of Books and Records
Members of a company will have no general right under the Cayman Companies Act to
inspect or obtain copies of the register of members or corporate records of the company. They
will, however, have such rights as may be set out in the company’s articles of association.
11 Special Resolutions
The Cayman Companies Act provides that a resolution is a special resolution when it has
been passed by a majority of at least two-thirds of such members as, being entitled to do so,
vote in person or, where proxies are allowed, by proxy at a general meeting of which notice
specifying the intention to propose the resolution as a special resolution has been duly given,
except that a company may in its articles of association specify that the required majority shall
be a number greater than two-thirds, and may additionally so provide that such majority (being
not less than two-thirds) may differ as between matters required to be approved by a special
resolution. Written resolutions signed by all the members entitled to vote for the time being of
the company may take effect as special resolutions if this is authorized by the articles of
association of the company.
12 Subsidiary Owning Shares in Parent
The Cayman Companies Act does not prohibit a Cayman Islands company acquiring and
holding shares in its parent company provided its objects so permit. The directors of any
subsidiary making such acquisition must discharge their duties of care and to act in good faith,
for a proper purpose and in the interests of the subsidiary.
13 Mergers and Consolidations
The Cayman Companies Act permits mergers and consolidations between Cayman Islands
companies and between Cayman Islands companies and non-Cayman Islands companies. For
these purposes, (a) “merger” means the merging of two or more constituent companies and the
vesting of their undertaking, property and liabilities in one of such companies as the surviving
company, and (b) “consolidation” means the combination of two or more constituent
companies into a consolidated company and the vesting of the undertaking, property and
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-23 –


--- page 624 ---
liabilities of such companies to the consolidated company. In order to effect such a merger or
consolidation, the directors of each constituent company must approve a written plan of merger
or consolidation, which must then be authorized by (a) a special resolution of each constituent
company and (b) such other authorization, if any, as may be specified in such constituent
company’s articles of association. The written plan of merger or consolidation must be filed
with the Registrar of Companies of the Cayman Islands together with a declaration as to the
solvency of the consolidated or surviving company, a list of the assets and liabilities of each
constituent company and an undertaking that a copy of the certificate of merger or
consolidation will be given to the members and creditors of each constituent company and that
notification of the merger or consolidation will be published in the Cayman Islands Gazette.
Dissenting shareholders have the right to be paid the fair value of their shares (which, if not
agreed between the parties, will be determined by the Cayman Islands court) if they follow the
required procedures, subject to certain exceptions. Court approval is not required for a merger
or consolidation which is effected in compliance with these statutory procedures.
14 Reconstructions
There are statutory provisions which facilitate reconstructions and amalgamations
approved by (i) a majority in number representing 75% in value of creditors, or (ii) a majority
of 75% in value of shareholders or class of shareholders, as the case may be, depending on the
circumstances, as are present at a meeting called for such purpose and thereafter sanctioned by
the Grand Court of the Cayman Islands. Whilst a dissenting shareholder would have the right
to express to the Grand Court his view that the transaction for which approval is sought would
not provide the shareholders with a fair value for their shares, the Grand Court is unlikely to
disapprove the transaction on that ground alone in the absence of evidence of fraud or bad faith
on behalf of management and if the transaction were approved and consummated the dissenting
shareholder would have no rights comparable to the appraisal rights (i.e. the right to receive
payment in cash for the judicially determined value of his shares) ordinarily available, for
example, to dissenting shareholders of United States corporations.
15 Take-overs
Where an offer is made by a company for the shares of another company and, within four
months of the offer, the holders of not less than 90% of the shares which are the subject of the
offer accept, the offeror may at any time within two months after the expiration of the said four
months, by notice require the dissenting shareholders to transfer their shares on the terms of
the offer. A dissenting shareholder may apply to the Grand Court of the Cayman Islands within
one month of the notice objecting to the transfer. The burden is on the dissenting shareholder
to show that the Grand Court should exercise its discretion, which it will be unlikely to do
unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders
of the shares who have accepted the offer as a means of unfairly forcing out minority
shareholders.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-24 –


--- page 625 ---
16 Indemnification
Cayman Islands law does not limit the extent to which a company’s articles of association
may provide for indemnification of officers and directors, except to the extent any such
provision may be held by the Cayman Islands courts to be contrary to public policy (e.g. for
purporting to provide indemnification against the consequences of committing a crime).
17 Liquidation
A company may be placed in liquidation compulsorily by an order of the court, or
voluntarily (a) by a special resolution of its members if the company is solvent, or (b) by an
ordinary resolution of its members if the company is insolvent. The liquidator’s duties are to
collect the assets of the company (including the amount (if any) due from the contributories
(shareholders)), settle the list of creditors and discharge the company’s liability to them,
ratably if insufficient assets exist to discharge the liabilities in full, and to settle the list of
contributories and divide the surplus assets (if any) amongst them in accordance with the rights
attaching to the shares.
18 Stamp Duty on Transfers
No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands
companies except those which hold interests in land in the Cayman Islands.
19 Taxation
Pursuant to section 6 of the Tax Concessions Act (2018 Revision) of the Cayman Islands,
the Company may obtain an undertaking from the Financial Secretary of the Cayman Islands:
(a) that no law which is enacted in the Cayman Islands imposing any tax to be levied
on profits, income, gains or appreciations shall apply to the Company or its
operations; and
(b) in addition, that no tax to be levied on profits, income, gains or appreciations or
which is in the nature of estate duty or inheritance tax shall be payable:
(i) on or in respect of the shares, debentures or other obligations of the Company;
or
(ii) by way of the withholding in whole or in part of any relevant payment as
defined in section 6(3) of the Tax Concessions Act (2018 Revision).
The Cayman Islands currently levy no taxes on individuals or corporations based upon
profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax
or estate duty. There are no other taxes likely to be material to the Company levied by the
Government of the Cayman Islands save certain stamp duties which may be applicable, from
time to time, on certain instruments executed in or brought within the jurisdiction of the
Cayman Islands. The Cayman Islands are not party to any double tax treaties that are applicable
to any payments made by or to the Company.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-25 –


--- page 626 ---
20 Exchange Control
There are no exchange control regulations or currency restrictions in the Cayman Islands.
21 Economic Substance Requirements
Pursuant to the International Tax Cooperation (Economic Substance) Act (As Revised)
(“ES Law ”) that came into force on 1 January 2019, a “relevant entity” is required to satisfy
the economic substance test set out in the ES Law. A “relevant entity” includes an exempted
company incorporated in the Cayman Islands as is the Company; however, it does not include
an entity that is tax resident outside the Cayman Islands. Accordingly, if an exempted company
incorporated in the Cayman Islands is tax resident outside the Cayman Islands, it will not be
required to satisfy the economic substance test set out in the ES Law.
22 General
Campbells, the Company’s legal advisers on Cayman Islands law, have sent to the
Company a letter of advice summarizing aspects of Cayman Islands company law. This letter,
together with a copy of the Cayman Companies Act, is available for inspection as referred to
in the section headed “Documents Delivered to the Registrar of Companies and Available on
Display” in Appendix V . Any person wishing to have a detailed summary of Cayman Islands
company law or advice on the differences between it and the laws of any jurisdiction with
which he/she is more familiar is recommended to seek independent legal advice.
APPENDIX III SUMMARY OF THE CONSTITUTION OF
OUR COMPANY AND CAYMAN COMPANY LA W
– III-26 –


--- page 627 ---
A. FURTHER INFORMATION ABOUT OUR COMPANY
1. Incorporation
Our Company was incorporated in the Cayman Islands on July 4, 2023 as an exempted
company with limited liability. Our registered office address is at Floor 4, Willow House,
Cricket Square, Grand Cayman KY1-9010, Cayman Islands. Accordingly, our Company’s
corporate structure and Memorandum and Articles of Association are subject to the relevant
laws of the Cayman Islands. A summary of our Memorandum and Articles of Association is set
out in the section headed “Summary of the Constitution of Our Company and Cayman
Company Law” in Appendix III to this prospectus.
Our principal place of business in Hong Kong is at Room 3601, East, Cheung Kong
Center II, 10 Harcourt Road, Central, Hong Kong. Our Company was registered as a non-Hong
Kong company under Part 16 of the Companies Ordinance on November 29, 2024. Ms. Wong
Hoi Ting has been appointed as the authorized representative of our Company for the
acceptance of service of process in Hong Kong. The address for service of process is 31/F,
Tower Two, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong.
As at the date of this prospectus, our Company’s head office was located at Zone C,
Southwest Industrial Park, Huolinguole, Inner Mongolia, PRC.
2. Changes in Share Capital
On January 6, 2025, our Company implemented the share subdivision whereby every
ordinary share of a par value of US$0.0001 each in the authorized share capital of our
Company (including issued and unissued share capital) was subdivided into 20 Ordinary Shares
of a par value of US$0.000005 each; such that immediately following the share subdivision,
the authorized share capital of our Company was altered to US$50,000 divided into
10,000,000,000 Ordinary Shares of par value of US$0.000005 each.
3. Changes in Share Capital of our Subsidiary
A summary of the corporate information and the particulars of our subsidiaries are set out
in note 43 to the Accountants’ Report as set out in Appendix I to this prospectus.
The following sets out the changes in the share capital of our subsidiaries during the two
years immediately preceding the date of this prospectus:
Kanghong New Material /H1118/H1118/H1118/H1118/H1118/H1118On May 25, 2023, Kanghong New Material was
established in Huolinguole, Inner Mongolia, the
PRC, with a registered capital of RMB100,000,000.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-1 –


--- page 628 ---
Shandong Chuangyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118On June 21, 2023, the registered capital of Shandong
Chuangyuan was increased from RMB360,000,000 to
RMB450,000,000.
Chuangyuan Supply Chain
Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
On June 27, 2023, Chuangyuan Supply Chain
Management was established in Huolinguole, Inner
Mongolia, the PRC, with a registered capital of
RMB10,000,000.
Phineas Management Limited /H1118On September 15, 2023, Phineas Management
Limited was incorporated in Hong Kong with a share
capital of HK$1.00.
Inner Mongolia Chuangyuan /H1118/H1118On January 19, 2024, the registered capital of Inner
Mongolia Chuangyuan was increased from
RMB2,000,000,000 to RMB3,200,000,000.
On August 30, 2024, the registered capital of Inner
Mongolia Chuangyuan was increased from
RMB3,200,000,000 to RMB3,232,320,000.
Beijing Chuangyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118On May 9, 2024, Beijing Chuangyuan was
established in Beijing, the PRC, with a registered
capital of RMB5,000,000.
Brentford Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118On September 10, 2024, Brentford Management was
established in Singapore with a registered capital of
USD100.
Kingston Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118On September 26, 2024, Kingston Management was
established in Singapore with a registered capital of
USD100.
Innovation Global Industries
UK Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
On January 21, 2025, Innovation Global Industries
UK Ltd. was incorporated in the UK with a share
capital of GBP100.
Cedarway Management
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
On March 14, 2025, Cedarway Management Limited
was incorporated in Hong Kong with a share capital
of HK$10,000.
Camden Management Limited /H1118On March 14, 2025, Camden Management Limited
was incorporated in Hong Kong with a share capital
of HK$10,000.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-2 –


--- page 629 ---
Innovation Global Oasis
FZ-LLC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
On April 5, 2025, Innovation Global Oasis FZ-LLC
was incorporated in The United Arab Emirates with a
share capital of AED50,000.
Chuangyuan Xinchuang /H1118/H1118/H1118/H1118/H1118/H1118On October 23, 2025, Chuangyuan Xinchuang was
established in Beijing, the PRC, with a registered
capital of RMB10,000,000.
4. Resolutions of our Shareholders
On November 9, 2025, resolutions of our Company were passed by the Shareholders that,
among other things, conditional upon the satisfaction (or, if applicable, waiver) of the
conditions set out in “Structure of the Global Offering — Conditions of the Global Offering”
and pursuant to the terms set out therein:
(a) our Company approved and adopted the amended and restated Memorandum and
Articles of Association with effect from the Listing Date;
(b) the Global Offering and the grant of the Over-allotment Option were approved and
any one Director from time to time or (if applicable) any of his/her duly authorized
attorney (the “ Authorized Signatory ”) was authorized to allot and issue new Shares
pursuant to the Global Offering and the exercise of the Over-allotment Option;
(c) the Global Offering was approved and any Authorized Signatory would be
authorized to implement the Global Offering;
(d) subject to the “lock-up” provisions under Rule 10.08 of the Listing Rules, a general
unconditional mandate would be granted to the Directors to allot, issue and deal with
the Shares or securities convertible into Shares or options, warrants or similar rights
to subscribe for the Shares or such convertible securities and to make or grant offers,
agreements or options which would or might require the exercise of such powers
whether during or after the end of the Relevant Period (as defined below), provided
that the aggregate number of Shares allotted or agreed to be allotted by the Directors
other than pursuant to a (i) rights issue, (ii) any scrip dividend scheme or similar
arrangement providing for the allotment of the Shares in lieu of the whole or part
of a dividend on the Shares; or (iii) a specific authority granted by the Shareholders
in general meeting, shall not exceed the aggregate of:
(A) 20% of the total number of Shares in issue immediately following completion
of the Global Offering (excluding any Shares which may be issued pursuant to
the exercise of the Over-Allotment Option); and
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-3 –


--- page 630 ---
(B) the aggregate number of Shares repurchased by our Company (if any) under the
general mandate to repurchase Shares referred to in paragraph below.
Such mandate to remain in effect during the period from the passing of the
resolution until the earliest of (i) the conclusion of the next annual general meeting
of our Company unless otherwise renewed by an ordinary resolution of our
Shareholders in a general meeting, either unconditionally or subject to conditions,
(ii) the expiration of the period within which the next annual general meeting of our
Company is required by the Memorandum and Articles of Association or any
applicable laws to be held, and (iii) the date on which the mandate is varied or
revoked by an ordinary resolution of the Shareholder(s) in general meeting (the
“Relevant Period ”); and
(e) a general unconditional mandate would be granted to the Directors to exercise all the
powers of our Company to repurchase the Shares on the Stock Exchange, or on any
other stock exchange on which the Shares may be listed (and which is recognized
by the SFC and the Stock Exchange for this purpose) not exceeding in aggregate
10% of the total number of Shares in issue immediately following the completion of
the Global Offering but excluding (where applicable) any Shares which may be
issued pursuant to the exercise of the Over-allotment Option of our Company in
accordance with all applicable laws and the requirements of the Listing Rules, such
mandate to remain in effect during the period from the passing of the resolution until
the earliest of (i) the conclusion of the next annual meeting of our Company unless
otherwise renewed by an ordinary resolution of our Shareholders in a general
meeting, either unconditionally or subject to conditions, (ii) the expiration of the
period within which the next annual general meeting of our Company is required by
the Memorandum and Articles of Association or any applicable laws to be held, and
(iii) the date on which the mandate is varied or revoked by an ordinary resolution
of the Shareholder(s) in general meeting.
5. Repurchase of Our Own Securities
The following paragraphs include, among others, certain information required by the
Stock Exchange to be included in this prospectus concerning the repurchase of our own
securities.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-4 –


--- page 631 ---
(a) Provision of the Listing Rules
The Listing Rules permit companies with a primary listing on the Stock Exchange to
repurchase their own securities on the Stock Exchange subject to certain restriction, the most
important of which are summarized below:
(i) Shareholders’ Approval
All proposed repurchases of securities (which must be fully paid up in the case of shares)
by a company with a primary listing on the Stock Exchange must be approved in advance by
an ordinary resolution of the shareholders in general meeting, either by way of general mandate
or by specific approval of a particular transaction.
Pursuant to a resolution passed by our Shareholders on November 9, 2025, the
Repurchase Mandate was given to our Directors authorizing them to exercise all powers of our
Company to repurchase Shares on the Stock Exchange, or on any other stock exchange on
which the securities of our Company may be listed and which is recognized by the SFC and
the Stock Exchange for this purpose, with a total nominal value up to 10% of the aggregate
nominal value of our Shares in issue immediately following the completion of the Global
Offering (excluding any Shares which may be sold, or issued and allotted pursuant to the
exercise of the Over-allotment Option), with such mandate to expire at the earliest of (i) the
conclusion of the next annual general meeting of our Company (unless renewed by an ordinary
resolution of our Shareholders in a general meeting, either unconditionally or subject to
conditions), (ii) the expiration of the period within which our Company’s next annual general
meeting is required by the Memorandum and Articles of Association or any other applicable
laws to be held, and (iii) the date when it is varied or revoked by an ordinary resolution of our
Shareholders in general meeting.
(ii) Source of Funds
Purchases must be funded out of funds legally available for the purpose in accordance
with the Memorandum and Articles of Association and the applicable laws and regulations of
Hong Kong and the Cayman Islands. A listed company may not purchase its own securities on
the Stock Exchange for a consideration other than cash or for settlement otherwise than in
accordance with the trading rules of the Stock Exchange from time to time. As a matter of
Cayman Islands laws, any purchases by our Company may be made out of profits or out of the
proceeds of a new issue of shares made for the purpose of the purchase or from sums standing
to the credit of our share premium account or out of capital, if so authorized by the
Memorandum and Articles of Association and subject to the Cayman Companies Act. Any
premium payable on the purchase over the par value of the shares to be purchased must have
been provided for out of profits or from sums standing to the credit of our share premium
account or out of capital, if so authorized by the Memorandum and Articles of Association and
subject to the Cayman Companies Act.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-5 –


--- page 632 ---
(iii) Trading Restrictions
The total number of shares which a listed company may repurchase on the Stock
Exchange is the number of shares representing up to a maximum of 10% of the aggregate
number of shares in issue. A company may not issue or announce a proposed issue of new
securities for a period of 30 days immediately following a repurchase (other than an issue of
securities pursuant to an exercise of warrants, share options or similar instruments requiring
the company to issue securities which were outstanding prior to such repurchase) without the
prior approval of the Stock Exchange. In addition, a listed company is prohibited from
repurchasing its shares on the Stock Exchange if the purchase price is 5% or more than the
average closing market price for the five preceding trading days on which its shares were
traded on the Stock Exchange. The Listing Rules also prohibit a listed company from
repurchasing its securities if the repurchase would result in the number of listed securities
which are in the hands of the public falling below the relevant prescribed minimum percentage
as required by the Stock Exchange. A company is required to procure that the broker appointed
by it to effect a repurchase of securities discloses to the Stock Exchange such information with
respect to the repurchase as the Stock Exchange may require.
(iv) Status of Repurchased Shares
Under the laws of the Cayman Islands, unless the Directors resolve to hold the shares
purchased by our Company as treasury shares prior to the purchase, shares purchased by our
Company shall be treated as canceled and the amount of our Company’s issued share capital
shall be diminished by the nominal value of those shares. However, the purchase of shares will
not be taken as reducing the amount of the authorized share capital under Cayman Islands law.
Our Company may re-deposit its treasury Shares into CCASS established and operated by
HKSCC only if it has an imminent plan to resell them on the Stock Exchange, and it should
complete the resale as soon as possible. For any treasury Shares deposited with CCASS
pending resale on the Stock Exchange, our Company will have appropriate measures to ensure
that it would not exercise any Shareholders’ rights or receive any entitlements which would
otherwise be suspended under the relevant laws with respect to treasury Shares. These
measures include, for example, an approval by the Board that (i) our Company should procure
its broker not to give any instructions to HKSCC to vote at general meetings for the treasury
Shares deposited with CCASS pending resale; and (ii) in the case of dividends or distributions,
our Company should withdraw the treasury Shares from CCASS, and either re-register them in
our Company’s name as treasury Shares or cancel them, in each case before the record date for
the dividends or distributions.
Holders of treasury Shares (if any) shall abstain from voting on matters that require
Shareholders’ approval at our Company’s general meetings.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-6 –


--- page 633 ---
(v) Suspension of Repurchase
A listed company may not make any repurchase of securities after a price sensitive
development has occurred or has been the subject of a decision until such time as the price
sensitive information has been made publicly available. In particular, during the period of one
month immediately preceding the earlier of (a) the date of the board meeting (as such date is
first notified to the Stock Exchange in accordance with the Listing Rules) for the approval of
a listed company’s results for any year, half-year, quarterly or any other interim period
(whether or not required under the Listing Rules) and (b) the deadline for publication of an
announcement of a listed company’s results for any year or half-year under the Listing Rules,
or quarterly or any other interim period (whether or not required under the Listing Rules), the
listed company may not repurchase its shares on the Stock Exchange other than in exceptional
circumstances. In addition, the Stock Exchange may prohibit a repurchase of securities on the
Stock Exchange if a listed company has breached the Listing Rules.
(vi) Reporting Requirements
Certain information relating to repurchases of securities on the Stock Exchange or
otherwise must be reported to the Stock Exchange not later than 30 minutes before the earlier
of the commencement of the morning trading session or any pre-opening session on the
following business day. In addition, a listed company’s annual report is required to disclose
details regarding repurchases of securities made during the year, including a monthly analysis
of the number of securities repurchased, the purchase price per share or the highest and lowest
price paid for all such repurchases, where relevant, and the aggregate prices paid.
(vii) Core Connected Persons
The Listing Rules prohibit a company from knowingly purchasing securities on the Stock
Exchange from “a core connected person,” that is, a director, chief executive or substantial
shareholder of the company or any of its subsidiaries or a close associate of any of them (as
defined in the Listing Rules) and a core connected person shall not knowingly sell his securities
to the company.
(b) Reasons for Repurchases
Our Directors believe that it is in the best interests of our Company and Shareholders for
our Directors to have a general authority from our Shareholders to enable our Company to
repurchase Shares in the market. Such repurchases may, depending on market conditions and
funding arrangements at the time, lead to an enhancement of the net asset value per Share
and/or earnings per Share and will only be made where our Directors believe that such
repurchases will benefit our Company and Shareholders.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-7 –


--- page 634 ---
(c) Funding of Repurchases
Repurchase of our Shares must be funded out of funds legally available for such purpose
in accordance with the Memorandum and Articles of Association and the applicable laws of the
Cayman Islands. Our Directors may not repurchase our Shares on the Stock Exchange for a
consideration other than cash or for settlement otherwise than in accordance with the trading
rules of the Stock Exchange. Subject to the foregoing, our Directors may make repurchases
with profits of our Company or out of a new issuance of shares made for the purpose of the
repurchase or, if authorized by the Memorandum and Articles of Association and subject to the
Cayman Companies Act, out of capital and, in the case of any premium payable on the
repurchase, out of profits of our Company or from sums standing to the credit of the share
premium account of our Company or, if authorized by the Memorandum and Articles of
Association and subject to the Cayman Companies Act, out of capital.
However, our Directors do not propose to exercise the Repurchase Mandate to such an
extent as would, in the circumstances, have a material adverse effect on the working capital
requirements of our Company or its gearing levels which, in the opinion of the Directors, are
from time to time appropriate for our Company.
(d) General
The exercise in full of the Repurchase Mandate, on the basis of 2,000,000,000 Shares in
issue immediately following the completion of the Global Offering (assuming the Over-
allotment Option is not exercised) could accordingly result in up to approximately 200,000,000
Shares being repurchased by our Company during the period prior to the earliest of:
 the conclusion of the next annual general meeting of our Company unless renewed
by an ordinary resolution of our Shareholders in a general meeting, either
unconditionally or subject to conditions;
 the expiration of the period within which our Company’s next annual general
meeting is required by the Memorandum and Articles of Association or any other
applicable laws to be held; or
 the date when it is varied or revoked by an ordinary resolution of our Shareholders
in general meeting.
Our Directors have undertaken to the Stock Exchange that, so far as the same may be
applicable, they will exercise the Repurchase Mandate in accordance with the Listing Rules
and the applicable laws in the Cayman Islands.
None of our Directors nor, to the best of their knowledge having made all reasonable
enquiries, any of their respective close associates, have any present intention, if the Repurchase
Mandate is exercised, to sell any Shares to our Company.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-8 –


--- page 635 ---
No core connected person (as defined in the Listing Rules) has notified us that he/she or
it has a present intention to sell Shares to us, or has undertaken not to do so, if the Repurchase
Mandate is exercised.
If, as a result of any repurchase of Shares, a Shareholder’s proportionate interest in the
voting rights of our Company increases, such increase will be treated as an acquisition for the
purposes of the Hong Kong Code on Takeovers and Mergers (the “ Takeovers Code ”).
Accordingly, a Shareholder or a group of Shareholders acting in concert, depending on the
level of increase of Shareholders’ interest, could obtain or consolidate control of our Company
and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers
Code. Save as aforesaid, our Directors are not aware of any consequences which would arise
under the Takeovers Code as a consequence of any repurchases pursuant to the Repurchase
Mandate.
Any repurchase of Shares that results in the number of Shares held by the public being
reduced to less than the highest of (i) approximately 25% of our Company’s total issued share
capital; (ii) such percentage of Shares held by the public after completion of the Global
Offering (assuming that the Over-allotment Option is not exercised); and (iii) such percentage
of Shares held by the public after the full or partial exercise of the Over-allotment Option could
only be implemented if the Stock Exchange agreed to waive the Listing Rules requirements
regarding the public shareholding referred to above. It is believed that a waiver of this
provision would not normally be given other than in exceptional circumstances.
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of Material Contracts
We have entered into the following contracts (not being contracts entered into in the
ordinary course of business) within the two years immediately preceding the date of this
prospectus that are or may be material:
(a) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, HHLR ADVISORS, LTD., CHINA INTERNA TIONAL CAPITAL
CORPORA TION HONG KONG SECURITIES LIMITED and HUA TAI
FINANCIAL HOLDINGS (HONG KONG) LIMITED, with respect to a subscription
of Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US dollar 100,000,000;
(b) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, CHINA HONGQIAO GROUP LIMITED (ʮ̡),
CHINA INTERNA TIONAL CAPITAL CORPORA TION HONG KONG
SECURITIES LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG)
LIMITED, with respect to a subscription of Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 30,000,000;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-9 –


--- page 636 ---
(c) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, TAIKANG LIFE INSURANCE CO., LTD (ப΂ʮ
̡), CHINA INTERNA TIONAL CAPITAL CORPORA TION HONG KONG
SECURITIES LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG)
LIMITED, with respect to a subscription of Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 30,000,000;
(d) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, GLENCORE INTERNA TIONAL AG, CHINA INTERNA TIONAL
CAPITAL CORPORA TION HONG KONG SECURITIES LIMITED and HUA TAI
FINANCIAL HOLDINGS (HONG KONG) LIMITED, with respect to a subscription
of Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US dollar 30,000,000;
(e) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, MERCURIA HOLDINGS (SINGAPORE) PTE. LTD., CHINA
INTERNA TIONAL CAPITAL CORPORA TION HONG KONG SECURITIES
LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG) LIMITED, with
respect to a subscription of Shares at the Offer Price in the aggregate amount of the
Hong Kong dollar equivalent of US dollar 30,000,000;
(f) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, GREENWOODS ASSET MANAGEMENT HONG KONG LIMITED,
CHINA INTERNA TIONAL CAPITAL CORPORA TION HONG KONG
SECURITIES LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG)
LIMITED, with respect to a subscription of Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 8,770,000;
(g) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, CICC FINANCIAL TRADING LIMITED, CHINA
INTERNA TIONAL CAPITAL CORPORA TION HONG KONG SECURITIES
LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG) LIMITED,
pursuant to which CICC FINANCIAL TRADING LIMITED has agreed to subscribe
for Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US dollar 6,230,000, and hold such Shares on a non-discretionary
basis to hedge a series of cross-border delta-one OTC swap transactions entered into
by CICC FINANCIAL TRADING LIMITED, CHINA INTERNA TIONAL
CAPITAL CORPORA TION LIMITED and SHANGHAI GREENWOODS ASSET
MANAGEMENT CO., LTD (ʮ̡);
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-10 –


--- page 637 ---
(h) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, TURQUOISE HIME, L.P . (acting by its general partner HIME
INVESTMENT LIMITED), HIME INVESTMENT LIMITED, CHINA
INTERNA TIONAL CAPITAL CORPORA TION HONG KONG SECURITIES
LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG) LIMITED, with
respect to a subscription of Shares at the Offer Price in the aggregate amount of the
Hong Kong dollar equivalent of US dollar 15,000,000 by TURQUOISE HIME, L.P .
(acting by its general partner HIME INVESTMENT LIMITED), where HIME
INVESTMENT LIMITED acts as guarantor of performance by TURQUOISE HIME,
L.P . (acting by its general partner HIME INVESTMENT LIMITED);
(i) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, INVESTCORP VERDANT HOLDINGS LIMITED, INVESTCORP
GOLDEN HORIZON CHINA FUND LP , CHINA INTERNA TIONAL CAPITAL
CORPORA TION HONG KONG SECURITIES LIMITED and HUA TAI
FINANCIAL HOLDINGS (HONG KONG) LIMITED, with respect to a subscription
of Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US dollar 15,000,000 by INVESTCORP VERDANT HOLDINGS
LIMITED, where INVESTCORP GOLDEN HORIZON CHINA FUND LP acts as
guarantor of performance by INVESTCORP VERDANT HOLDINGS LIMITED;
(j) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, CPIC INVESTMENT MANAGEMENT (H.K.) COMPANY
LIMITED, CHINA INTERNA TIONAL CAPITAL CORPORA TION HONG KONG
SECURITIES LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG)
LIMITED, with respect to a subscription of Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 10,000,000;
(k) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, GF FUND MANAGEMENT CO., LTD. (ʮ̡),
CHINA INTERNA TIONAL CAPITAL CORPORA TION HONG KONG
SECURITIES LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG)
LIMITED, with respect to a subscription of Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 4,700,000;
(l) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, GF INTERNA TIONAL INVESTMENT MANAGEMENT LIMITED
(ʮ̡), CHINA INTERNA TIONAL CAPITAL
CORPORA TION HONG KONG SECURITIES LIMITED and HUA TAI
FINANCIAL HOLDINGS (HONG KONG) LIMITED, with respect to a subscription
of Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US dollar 5,300,000;
(m) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, FULLGOAL ASSET MANAGEMENT (HK) LIMITED ( బ਷༟ପ၍
ଣ(ಥ)ʮ̡), CHINA INTERNA TIONAL CAPITAL CORPORA TION HONG
KONG SECURITIES LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG
KONG) LIMITED, with respect to a subscription of Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 5,330,000;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-11 –


--- page 638 ---
(n) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, Fullgoal Fund Management Co., Ltd. (ʮ̡),
CHINA INTERNA TIONAL CAPITAL CORPORA TION HONG KONG
SECURITIES LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG)
LIMITED, with respect to a subscription of Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 4,670,000;
(o) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, INTEGRA TED CORE STRA TEGIES (ASIA) PTE. LTD. (by
Millennium Capital Management (Singapore) Pte. Ltd., its investment manager),
CHINA INTERNA TIONAL CAPITAL CORPORA TION HONG KONG
SECURITIES LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG)
LIMITED, with respect to a subscription of Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 10,000,000;
(p) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, JANE STREET ASIA TRADING LIMITED, CHINA
INTERNA TIONAL CAPITAL CORPORA TION HONG KONG SECURITIES
LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG) LIMITED, with
respect to a subscription of Shares at the Offer Price in the aggregate amount of the
Hong Kong dollar equivalent of US dollar 10,000,000;
(q) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, Polymer Capital Management (HK) Limited (as the investment
manager for and on behalf of POL YMER ASIA FUND LP), CHINA
INTERNA TIONAL CAPITAL CORPORA TION HONG KONG SECURITIES
LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG) LIMITED, with
respect to a subscription of Shares at the Offer Price in the aggregate amount of the
Hong Kong dollar equivalent of US dollar 10,000,000;
(r) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, POINTER INVESTMENT (H.K.) LTD. ( ᘒ༺ҳ༟(ಥ)ʮ̡),
CHINA INTERNA TIONAL CAPITAL CORPORA TION HONG KONG
SECURITIES LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG)
LIMITED, with respect to a subscription of Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 10,000,000;
(s) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, BRILLIANT PARTNERS FUND LP (acting through its general
partner, BRILLIANCE CAPITAL GP , LTD.), China Core Fund, CHINA
INTERNA TIONAL CAPITAL CORPORA TION HONG KONG SECURITIES
LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG) LIMITED, with
respect to a subscription of Shares at the Offer Price in the aggregate amount of the
Hong Kong dollar equivalent of US dollar 10,000,000;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-12 –


--- page 639 ---
(t) a cornerstone investment agreement dated November 12, 2025 entered into among
our Company, CEPHEI CAPITAL MANAGEMENT (HONG KONG) LIMITED (as
the investment manager for and on behalf of CEPHEI QFII CHINA TOTAL
RETURN FUND LTD and CEPHEI CHINA EQUITY RELA TIVE RETURN FUND
LTD), CHINA INTERNA TIONAL CAPITAL CORPORA TION HONG KONG
SECURITIES LIMITED and HUA TAI FINANCIAL HOLDINGS (HONG KONG)
LIMITED, with respect to a subscription of Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 6,000,000; and
(u) the Hong Kong Underwriting Agreement.
2. Intellectual Property Rights
(a) Trademarks
(i) Registered Trademarks
As of the Latest Practicable Date, we had registered the following trademarks which we
consider to be material to our business:
No. Trademark
Place of
Registration
Registered
Owner Class
Registered
Number
Expiry Date
(dd/mm/yyyy)
1. /H1118/H1118
 PRC Inner Mongolia
Chuangyuan
1 26941560 20/10/2028
2. /H1118/H1118
 PRC Inner Mongolia
Chuangyuan
9 26958499 20/10/2028
3. /H1118/H1118
 PRC Inner Mongolia
Chuangyuan
6 26952745 20/10/2028
4. /H1118/H1118
 PRC Inner Mongolia
Chuangyuan
6 26179087 20/03/2029
5. /H1118/H1118
 PRC Chuangyuan New
Material
19 72508326 20/12/2033
6. /H1118/H1118
 PRC Chuangyuan New
Material
19 72490453 20/12/2033
7. /H1118/H1118
 PRC Shandong
Chuangyuan
1, 35,
39
68091842 27/05/2033
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-13 –


--- page 640 ---
No. Trademark
Place of
Registration
Registered
Owner Class
Registered
Number
Expiry Date
(dd/mm/yyyy)
8. /H1118/H1118
 PRC Inner Mongolia
Chuangyuan
6 82155631 20/05/2035
9. /H1118/H1118
 PRC Inner Mongolia
Chuangyuan
6 82163802 20/05/2035
10. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6, 16,
40
306717501AA 06/11/2034
11. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6, 16,
40
306717501AA 06/11/2034
12. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6, 16,
40
306717501AB 06/11/2034
13. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6, 16,
40
306717501AB 06/11/2034
14. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6 306717510 06/11/2034
15. /H1118
 HK Inner Mongolia
Chuangyuan
16, 40 306717510 06/11/2034
16. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6 306717510 06/11/2034
17. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6, 16,
40
306717510 06/11/2034
18. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6, 16,
40
306717529 06/11/2034
19. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6, 16,
40
306717529 06/11/2034
20. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6, 16,
40
306717529 06/11/2034
21. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6, 16,
40
306717529 06/11/2034
22. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6, 16,
40
306717538 06/11/2034
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-14 –


--- page 641 ---
No. Trademark
Place of
Registration
Registered
Owner Class
Registered
Number
Expiry Date
(dd/mm/yyyy)
23. /H1118
 HK Inner Mongolia
Chuangyuan
1, 6, 16,
40
306717538 06/11/2034
24. /H1118
 PRC Inner Mongolia
Chuangyuan
40 26169059 20/03/2029
(ii) Trademarks Applications
As of the Latest Practicable Date, we had applied for the registration of the following
trademark, which we consider to be material to our business:
No. Trademark Applied
Place of
Application Class
Application
Number
Application
Date
(dd/mm/yyyy)
1./H1118/H1118/H1118
 PRC 6 82155706 25/11//2024
2./H1118/H1118/H1118
 PRC 40 82170179 25/11/2024
3. /H1118/H1118
 PRC 6 82163889 25/11/2024
4./H1118/H1118/H1118
 PRC 40 82173883 25/11/2024
5./H1118/H1118/H1118
 PRC 6 79762077 12/07/2024
6. /H1118/H1118
 PRC 40 82152247 25/11/2024
7. /H1118/H1118
 PRC 6 82146141 25/11/2024
8. /H1118/H1118
 PRC 40 82153301 25/11/2024
9. /H1118/H1118
 PRC 6 82157010 25/11/2024
10. /H1118
 PRC 40 82170170 25/11/2024
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-15 –


--- page 642 ---
No. Trademark Applied
Place of
Application Class
Application
Number
Application
Date
(dd/mm/yyyy)
11. /H1118
 PRC 40 82147252 25/11/2024
12. /H1118/H1118
 HK 1, 6, 16,
40
307052823 09/10/2025
13. /H1118/H1118
 HK 1, 6, 16,
40
307052823 09/10/2025
14. /H1118/H1118
 HK 1, 6, 16,
40
307052823 09/10/2025
15. /H1118/H1118
 HK 1, 6, 16,
40
307052823 09/10/2025
(b) Patents
As of the Latest Practicable Date, we have registered the following patents which we
considered to be or may be material to our business:
No. Patent Name Patentee
Place of
Registration Patent Number
Grant Date
(dd/mm/yyyy)
Expiry Date
(dd/mm/yyyy)
1. /H1118/H1118A flap unloader for
bulk alumina
unloading ( ɓ၇౳
͜ᔕ
՝ԓዚ)
Inner Mongolia
Chuangyuan
PRC ZL202122641294.4 19/04/2022 28/10/2031
2. /H1118/H1118An automatic
incoming coal
sampling machine
suitable for use in
extremely cold
weather ( ɓ၇ቇ
฽ఫ˂ंԴ͜
ɝᅀ๩Іਗમᅵ
ዚ)
Inner Mongolia
Chuangyuan
PRC ZL202122793816.2 15/04/2022 14/11/2031
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-16 –


--- page 643 ---
No. Patent Name Patentee
Place of
Registration Patent Number
Grant Date
(dd/mm/yyyy)
Expiry Date
(dd/mm/yyyy)
3. /H1118/H1118A kind of frequency
conversion speed
regulation device
for lifting pump
in aluminum plant
(቙ᅀ౤
ᜊ᎖ሜ஺ༀ
ໄ)
Inner Mongolia
Chuangyuan
PRC ZL202220503636.8 05/07/2022 07/03/2032
4. /H1118/H1118A kind of flue gas
desulfurization
absorption tower
with fire-fighting
facilities ( ɓ၇Ո
๧ं
୭ିіϗ෫)
Inner Mongolia
Chuangyuan
PRC ZL202020436974.5 18/12/2020 29/03/2030
5. /H1118/H1118A kind of aluminum
electrolytic cell
semi-cavity coke
grain roasting
method ( ɓ၇቙ཥ
ഢೊ୐ೈ
ج)
Inner Mongolia
Chuangyuan
PRC ZL201510640060.4 25/07/2017 29/09/2035
6. /H1118/H1118A kind of aluminum
alloy casting
stable core-
pulling device ( ɓ
֛
ༀໄ)
Inner Mongolia
Chuangyuan
PRC ZL201910645191.X 27/04/2021 16/07/2039
7. /H1118/H1118Aluminum
electrolytic cell
blanking system
and aluminum
electrolytic cell
system ( ቙ཥ༆ᅻ
ӻ୕ʿ቙ཥ༆
ᅻӻ୕)
Inner Mongolia
Chuangyuan
PRC ZL201610011169.6 29/09/2017 07/01/2036
8. /H1118/H1118Electrolytic
aluminum flue
gas deep
purification
device and
method ( ɓ၇ཥ༆
ଋʷༀ
ج)
Inner Mongolia
Chuangyuan
PRC ZL201910397245.5 16/04/2024 13/05/2039
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-17 –


--- page 644 ---
(c) Domain Name
As of the Latest Practicable Date, we had registered the following internet domain name
which we consider to be or may be material to our business:
No. Domain Name Registered Owner Registration Number
Expiry Date
(dd/mm/yyyy)
1. /H1118/H1118innovationigi.com Inner Mongolia
Chuangyuan
ႆICP௪17006093 ໮-2 22/11/2026
2. /H1118/H1118nmcyjt.com Inner Mongolia
Chuangyuan
ႆICP௪17006093 ໮-1 05/12/2026
3. /H1118/H1118innovationglobalindustries.com Inner Mongolia
Chuangyuan
ႆICP௪17006093 ໮-3 22/11/2026
C. FURTHER INFORMATION ABOUT OUR DIRECTORS
1. Particulars of Directors’ service contracts and appointment letters
(a) Executive Directors
Each of our executive Directors has entered into a service contract with us pursuant to
which they agreed to act as executive Directors for an initial term of three years with effect
from the date of their appointments. Either party has the right to give not less than three
months’ written notice to terminate the agreement.
(b) Non-executive Director and Independent Non-executive Directors
Each of the non-executive Director and Independent Non-executive Directors has entered
into an appointment letter with our Company. The initial term for their appointment letters
shall be three years from the date of their appointments or until the third annual general
meeting of the Company since the Listing Date, whichever ends earlier, (subject always to
re-election as and when required under the Memorandum and Articles of Association), until
terminated in accordance with the terms and conditions of the appointment letter or by either
party giving to the other not less than three months’ prior notice in writing.
Details of our Company’s remuneration policy is described in section headed “Directors
and Senior Management — Remuneration of Directors and Senior Management.”
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-18 –


--- page 645 ---
2. Remuneration of Our Directors
(a) Saved as disclosed above, none of our Directors has or is proposed to have a service
contract with our Company other than contracts expiring or determinable by the
employer within one year without the payment of compensation (other than statutory
compensation).
(b) During the three years ended December 31, 2022, 2023, 2024 and the five months
ended May 31, 2025, the aggregate amount of fees, salaries, allowances, retirement
benefits scheme contributions and other benefits we paid to our Directors were
RMB4,465 thousand, RMB6,970 thousand, RMB11,287 thousand and RMB5,896
thousand. Further information on the remuneration of each Director during the Track
Record Period is set out in Appendix I to this prospectus.
(c) Under the arrangements currently in force, the aggregate amount of remuneration
(excluding any discretionary bonus which may be paid) payable by our Group to our
Directors for the year ending December 31, 2025, is expected to be approximately
RMB15,750 thousand.
(d) No remuneration was paid to our Directors or the five highest paid individuals as an
inducement to join, or upon joining, our Group. During the Track Record Period, no
compensation was paid to, or has been received by, our Directors, former Directors
or the five highest paid individuals for the loss of office as director of any member
of our Group or of any other office in connection with the management of the affairs
of any member of our Group. None of our Directors waived any emoluments during
the Track Record Period.
(e) Saved as disclosed above, no other payments have been paid or are payable in
respect of the Track Record Period to our Directors by our Group.
3. Disclosure of Interests of Directors and Chief Executive of our Company
(a) Interests and short positions of our Directors and chief executive in the share capital
of our Company and its associated corporations following completion of the Global
Offering
Immediately following completion of the Global Offering (taking no account of any
Shares which may be allotted and issued pursuant to the exercise of the Over-Allotment
Option), the interests or short positions of our Directors and chief executives in our Shares,
underlying shares and debentures of our Company and its associated corporations, within the
meaning of Part XV of the SFO, which will have to be notified to our Company and the Stock
Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short
positions which he is taken or deemed to have under such provisions of the SFO), or which will
be required, pursuant to section 352 of the SFO, to be recorded in the register referred to
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-19 –


--- page 646 ---
therein, or which will be required to be notified to our Company and the Stock Exchange
pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers
contained in the Listing Rules, will be as follows:
(i) Interest in Shares
Name Nature of interest
Number of
Shares held
Approximate
percentage of
shareholding
in the total
issued share
capital of the
Company as
of the Latest
Practicable
Date
Approximate
percentage of
shareholding
in the total
issued share
capital of the
Company
immediately
following
completion
of the Global
Offering
(assuming
the Over-
Allotment
Option is not
exercised)
Approximate
percentage of
shareholding
in the total
issued share
capital of the
Company
immediately
following
completion
of the Global
Offering
(assuming
the Over-
Allotment
Option is
fully
exercised)
Mr. Cui (1) /H1118/H1118/H1118/H1118/H1118/H1118Interests in controlled
corporation
1,500,000,000 100% 75% 72.3%
Note:
(1) Immediately prior to the Global Offering, Bloomsbury Holding, which is wholly owned by Mr. Cui,
directly held 1,500,000,000 Shares of our Company as of the Latest Practicable Date. As such, Mr. Cui
is deemed to be interested in the Shares held by Bloomsbury Holding.
(ii) Interest in Associated Corporations
Name Nature of interest
Name of associated
corporation
Approximate
percentage of
shareholding in
the total share
capital of the
associated
corporation
Mr. Cui (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial Owner Bloomsbury Holding 100%
Mr. Cui (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118Interests in controlled
corporation
Shandong Chuangyuan 41.5%
Notes:
(1) As at the Latest Practicable Date, Bloomsbury Holding was directly wholly owned by Mr. Cui.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-20 –


--- page 647 ---
(2) As at the Latest Practicable Date, Shandong Chuangyuan was owned as to 41.5% by Innovation Group,
which was in turn owned as to 71.82% by Mr. Cui. As such, Mr. Cui is deemed to be interested in the
equity interests in Shandong Chuangyuan held by Innovation Group under the SFO.
(b) Interests and short positions disclosable under Divisions 2 and 3 of Part XV of the SFO
For information on the persons who will, immediately following the completion of the
Global Offering, having or be deemed or taken to have beneficial interests or short position in
our Shares or underlying shares which would fall to be disclosed to our Company under the
provisions of 2 and 3 of Part XV of the SFO, or directly or indirectly be interested in 10% or
more of the nominal value of any class of share capital carrying rights to vote in all
circumstances at general meetings of any other member of our Group, see the section headed
“Substantial Shareholders.”
Save as set out above, as of the Latest Practicable Date, our Directors were not aware of
any persons who would, immediately following the completion of the Global Offering and
assuming the Over-allotment Option is not exercised, be interested, directly or indirectly, in
10% or more of the nominal of any class of share capital carrying rights to vote in all
circumstances at general meetings of any member of our Group or had option in respect of such
capital.
4. Disclaimers
Save as disclosed in this prospectus:
(a) there are no existing or proposed service contracts (excluding contracts expiring or
determinable by the employer within one year without payment of compensation
(other than statutory compensation)) between the Directors and any member of our
Group;
(b) none of the Directors or the experts named in the paragraph headed “Other
Information — Consent of Experts” in this section is materially interested in any
contract or arrangement subsisting at the date of this prospectus which is significant
in relation to the business of our Group taken as a whole;
(c) none of the Directors or the experts named in the paragraph headed “Other
Information — Consent of Experts” in this section has any direct or indirect interest
in the promotion of, or in any assets which have been, within the two years
immediately preceding the date of this prospectus, acquired or disposed of by or
leased to any member of our Group, or are proposed to be acquired or disposed of
by or leased to any member of our Group;
(d) no commissions, discounts, brokerages or other special terms have been granted in
connection with the issue or sale of any Shares in or debentures of our Company
within the two years ended on the date of this prospectus;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-21 –


--- page 648 ---
(e) none of the Directors is materially interested in any contract or arrangement
subsisting at the date of this prospectus which is significant in relation to the
business of our Group taken as a whole;
(f) saved as disclosed in this prospectus, none of the Directors is interested in any
business apart from our Group’s business which competes or is likely to compete,
directly or indirectly, with the business of our Group;
(g) taking no account of any Shares which may be taken up under the Global Offering,
so far as is known to any Director or chief executive of our Company, no other
person (other than a Director or chief executive of our Company) will, immediately
following completion of the Global Offering, have interests or short positions in our
Shares and underlying Shares which would fall to be disclosed to our Company and
the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO
or (not being a member of our Group), be interested, directly or indirectly, in 10%
or more of the nominal value of any class of share capital carrying rights to vote in
all circumstances at general meetings of any member of our Group; and
(h) none of the Directors or chief executive of our Company has any interests or short
positions in our Shares, underlying shares or debentures of our Company or its
associated corporations (within the meaning of Part XV of the SFO) which will have
to be notified to our Company and the Stock Exchange pursuant to Divisions 7 and
8 of Part XV of the SFO (including interests and short positions which he is taken
or deemed to have under such provisions of the SFO) or which will be required,
pursuant to section 352 of the SFO, to be entered into the register referred to therein,
or will be required, pursuant to the Model Code for Securities Transactions by
Directors of Listed Issuers, to be notified to our Company and the Stock Exchange
once our Shares are listed thereon.
D. OTHER INFORMATION
1. Estate Duty
Our Directors have been advised that no material liability for estate duty is likely to fall
on our Company or any of our subsidiaries.
2. Litigation
Save as disclosed in this prospectus and so far as our Directors are aware, no litigation
or claim of material importance is pending or threatened against any member of our Group.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-22 –


--- page 649 ---
3. Joint Sponsors
The Joint Sponsors have made an application on our behalf to the Stock Exchange for the
listing of, and permission to deal in, the Shares in issue, our Shares to be issued pursuant to
the Global Offering (including any Shares which may fall to be issued pursuant to the exercise
of the Over-allotment Option).
Each of the Joint Sponsors satisfy the independence criteria applicable to sponsors as set
out in Rule 3A.07 of the Listing Rules.
The Joint Sponsors’ fee in relation to the Listing is US$1 million, which is payable by our
Company to the Joint Sponsors.
4. Consent of Experts
The following experts have each given and have not withdrawn their respective written
consents to the issue of this prospectus with copies of their reports, letters, opinions or
summaries of opinions (as the case may be) and the references to their names included herein
in the form and context in which they are respectively included.
Name Qualification
China International Capital
Corporation Hong Kong
Securities Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation under the SFO for carrying on
type 1 (dealing in securities), type 2 (dealing in
futures contracts), type 4 (advising on securities),
type 5 (advising on futures contracts) and type 6
(advising on corporate finance) of the regulated
activities as defined under the SFO
Huatai Financial Holdings
(Hong Kong) Limited /H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation under the SFO for carrying on
type 1 (dealing in securities), type 2 (dealing in
futures contracts), type 3 (leveraged foreign
exchange trading), type 4 (advising on securities),
type 6 (advising on corporate finance), type 7
(providing automated trading services) and type 9
(asset management) of the regulated activities as
defined under the SFO
Deloitte Touche Tohmatsu Certified Public Accountants and Registered Public
Interest Entity Auditor
Commerce & Finance Law
Offices /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Legal Advisor to our Company as to PRC laws
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-23 –


--- page 650 ---
Name Qualification
Campbells /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Legal Advisor to our Company as to Cayman Islands
laws
CRU International Limited /H1118/H1118/H1118/H1118Industry consultant
Shandong Tianjian Law Firm /H1118/H1118/H1118PRC Litigation Counsel of the Incident
As of the Latest Practicable Date, none of the experts named above has 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.
5. Binding Effect
This prospectus shall have the effect, if an application is made in pursuance hereof, of
rendering all persons concerned bound by all the provisions (other than the penal provisions)
of sections 44A and 44B of the Companies Ordinance so far as applicable.
6. Bilingual Prospectus
The English language and Chinese language versions of this prospectus are being
published separately in reliance upon the exemption provided by section 4 of the Companies
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice
(Chapter 32L of the Laws of Hong Kong).
7. Compliance Advisor
Our Company has appointed Gram Capital Limited as our compliance advisor in
compliance with Rule 3A.19 of the Listing Rules.
8. Preliminary Expenses
We have not incurred any material preliminary expenses.
9. No Material Adverse Change
The Directors confirm that there has been no material change in our financial or trading
position since May 31, 2025.
10. Miscellaneous
(a) Save as disclosed in this prospectus, within the two years immediately preceding the
date of this prospectus:
(i) no share or loan capital or debenture of our Company or any of our subsidiaries
has been issued or agreed to be issued or is proposed to be issued for cash or
as fully or partly paid other than in cash or otherwise; and
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-24 –


--- page 651 ---
(ii) no commissions, discounts, brokerages or other special terms have been
granted or agreed to be granted in connection with the issue or sale of any share
or loan capital of our Company or any of our subsidiaries.
(b) Save as disclosed in this prospectus:
(i) there are no founder, management or deferred shares nor any debentures in our
Company or any of our subsidiaries; and
(ii) no share or loan capital or debenture of our Company or any of our subsidiaries
is under option or is agreed conditionally or unconditionally to be put under
option.
(c) Save as disclosed in the paragraph head “Further Information about Our Business —
Summary of Material Contracts” in this section, none of our Directors or proposed
Directors or experts (as named in this prospectus), have any interest, direct or
indirect, in any assets which have been, within the two years immediately preceding
the date of this prospectus, acquired or disposed of by or leased to, any member of
our Group, or are proposed to be acquired or disposed of by or leased to any member
of our Group.
(d) We do not have any promoter for the purpose of the Listing Rules. No cash,
securities or other benefit has been paid, allotted or given nor are any proposed to
be paid, allotted or given to any promoters in connection with the Global Offering
and the related transactions described in this prospectus within the two years
immediately preceding the date of this prospectus.
(e) Save as disclosed in this prospectus, no equity or debt securities of any company
within our Group is presently listed on any stock exchange or traded on any trading
system nor is any listing or permission to deal being or proposed to be sought.
(f) Save as disclosed in this prospectus, our Company has no outstanding convertible
debt securities or debentures.
(g) There is no arrangement under which future dividends are waived or agreed to be
waived.
(h) There has not been any interruption in the business of our Group which may have
or has had a significant effect on the financial position of our Group in the 12
months preceding the date of this prospectus.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-25 –


--- page 652 ---
1. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
The documents attached to a copy of this prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were:
(a) a copy of each of the material contracts referred to the section headed “Statutory and
General Information — B. Further Information About Our Business — 1. Summary
of Material Contracts” in Appendix IV to this prospectus; and
(b) the written consents referred to in the section headed “Statutory and General
Information — D. Other Information — 4. Consent of Experts” in Appendix IV to
this prospectus.
2. DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of the
Stock Exchange at www.hkexnews.hk and our website at www.innovationigi.com during a
period of 14 days from the date of this prospectus:
(a) the Memorandum of Association and the Articles of Association;
(b) the Accountants’ Report for the three years ended December 31, 2024 and for the
five months ended May 31, 2025 from Deloitte Touche Tohmatsu, the text of which
is set out in Appendix I to this prospectus;
(c) the report on the unaudited pro forma financial information from Deloitte Touche
Tohmatsu, the text of which is set out in Appendix II to this prospectus;
(d) the audited financial statements of our Group for the three years ended December
31, 2024 and for the five months ended May 31, 2025;
(e) the legal opinions issued by Commerce & Finance Law Offices, our PRC Legal
Adviser, in respect of certain general corporate matters and the property interests of
the Group;
(f) the letter of advice issued by Campbells, our Cayman legal adviser, in respect of
certain of the Cayman Companies Act referred to in Appendix III to this prospectus;
(g) the Cayman Companies Act;
(h) the report issued by CRU, the summary of which is set forth in the section headed
“Industry Overview” in this prospectus;
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR
OF COMPANIES AND A V AILABLE ON DISPLAY
– V-1 –


--- page 653 ---
(i) the legal opinion issued by Shandong Tianjian Law Firm, the PRC Litigation
Counsel, in respect of the Incident;
(j) the material contracts referred to the section headed “Statutory and General
Information — B. Further Information About Our Business — 1. Summary of
Material Contracts” in Appendix IV to this prospectus;
(k) the written consents referred to in the section headed “Statutory and General
Information — D. Other Information — 4. Consent of Experts” in Appendix IV to
this prospectus; and
(l) the service contracts and letters of appointment entered into between our Company
and each of the Directors referred to in “Statutory and General Information —
C. Further Information about our Directors — 1. Particulars of Directors’ service
contracts and appointment letters” in Appendix IV to this prospectus.
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR
OF COMPANIES AND A V AILABLE ON DISPLAY
– V-2 –


--- page 654 ---
創新實業集團有限公司
CHUANGXIN  INDUSTRIES HOLDINGS LIMITED
