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Shanghai FourSemi Semiconductor Co., Ltd.
ʮ̡
Shanghai FourSemi Semiconductor Co., Ltd.
ʮ̡
Shanghai FourSemi Semiconductor Co., Ltd.
ʮ̡
(A joint stock company incorporated in the People's Republic of China with limited liability)
Stock Code : 3625
GLOBAL OFFERING
Joint Sponsors, Joint Sponsor-Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers


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IMPORTANT: If you are in any doubt about any of the contents of this Prospectus you should seek independent professional advice.
Shanghai FourSemi Semiconductor Co., Ltd.
ʮ̡
(A joint stock company incorporated in the People’ s Republic of China with limited liability)
Global Offering
Number of Offer Shares under the Global Offering : 12,000,000 H Shares (subject to the Over-allotment
Option)
Number of Hong Kong Offer Shares : 600,000 H Shares (subject to reallocation)
Number of International Offer Shares : 11,400,000 H Shares (subject to reallocation and
the Over-allotment Option)
Maximum Offer Price : HK$50.00 per H Share, plus brokerage of 1.0%,
SFC transaction levy of 0.0027%, Stock
Exchange trading fee of 0.00565% and AFRC
transaction levy of 0.00015% (payable in full on
application in Hong Kong dollars and subject to
refund)
Nominal value : RMB1.00 per H Share
Stock code : 3625
Joint Sponsors, Joint Sponsor-Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Joint Bookrunner and Joint Lead Manager
Joint Bookrunners
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of
this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever ar ising 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 in Hong Kong and Avai lable on Display” 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 and Miscella neous Provisions) Ordinance
(Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibil ity for the contents of this
prospectus or any of the other documents referred to above. The Offer Price is expected to be fixed by agreement between the Overall Coordinators, on be half of the Underwriters, and our
Company on or before Friday, March 27, 2026 or such later time as may be agreed between the parties, but in any event, no later than 12:00 noon on Friday, Ma rch 27, 2026. If, for any
reason, the Overall Coordinators, on behalf of the Underwriters, and our Company are unable to reach an agreement on the Offer Price by 12:00 noon on Fri day, March 27, 2026, the Global
Offering will not become unconditional and will lapse immediately.
The Overall Coordinators, on behalf of the Underwriters, may, with the consent of our Company, reduce the indicative Offer Price range below that stat ed in this prospectus (being
HK$40.00 per H Share to HK$50.00 per H Share) at any time on or prior to the morning of the last date for lodging applications under the Hong Kong Public Off ering. In such a case,
notices of the reduction in the number of Hong Kong Offer Shares and/or the indicative Offer Price range will be published on the websites of the Stock Ex change at www.hkexnews.hk
and our Company at www.foursemi.com as soon as practicable but in any event not later than the morning of the day which is the last day for lodging applications under the Hong Kong
Public Offering. For further information, see the sections headed “Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares” in t his prospectus.
Pursuant to the termination provisions contained in the Hong Kong Underwriting Agreement in respect of the Hong Kong Offer Shares, the Overall Coordi nators on behalf of the Hong
Kong Underwriters, have the right in certain circumstances, in their absolute discretion, to terminate the obligation of the Hong Kong Underwriters pursuant to the Hong Kong Underwriting
Agreement at any time prior to 8:00 a.m. on the Listing Date. Further details of the terms of the termination provisions are set out in the section headed “Underwriting—Underwriting
Arrangements and Expenses—Hong Kong Public Offering—Grounds for Termination”. It is important that you refer to that section for further details.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States, and may not be of fered, sold, pledged or
transferred, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in accordance with any applicable U.S. state
securities laws. The Offer Shares are being offered and sold only outside of the United States in offshore transactions in reliance on Regulation S.
Our Company is a Specialist Technology Company (as defined in Chapter 18C of the Listing Rules). The securities of Specialist Technology Companies ca rry high investment risks
including risks of share price volatility and inflated valuation due to the difficulty in valuing such companies. Investors should fully understand the investment risks of a Specialist
Technology Company and the risks disclosed by our Company before making their investment decisions.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this prospectus to the p ublic in relation to
the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk and our website at www.foursemi.com .
If you require a printed copy of this prospectus, you may download and print from the website addresses above.
IMPORTANT
March 23, 2026


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IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public Offering.
We will not provide printed copies of this prospectus to the public in relation to the Hong Kong
Public Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk
under
the “ HKEXnews > New Listings > New Listing Information ” section, and our website at
www.foursemi.com . If you require a printed copy of this prospectus, you may download and print
from the website addresses above.
To apply for Hong Kong Offer Shares, you may use one of the following application channels:
Application Channel Platform Target Investors Application Time
White Form eIPO
Service ......
www.eipo.com.hk Investors who would like to
receive a physical Share
certificate. Hong Kong Offer
Shares successfully applied
for will be allotted and issued
in your own name.
You may submit your
application to the White
Form eIPO Service Provider
at www.eipo.com.hk
(24
hours daily, except on the last
application day) from 9:00
a.m. on Monday, March 23,
2026, until 11:30 a.m. on
Thursday, March 26, 2026,
and the latest time for
completing full payment of
application monies in respect
of such applications will be
12:00 noon on Thursday,
March 26, 2026, (Hong Kong
time).
HKSCC EIPO
channel ......
Your broker or custodian who is
a HKSCC Participant will
submit electronic application
instructions on your behalf
through HKSCC’s FINI
system in accordance with
your instruction
Investors who would not like to
receive a physical 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.
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.
We will not provide any physical channels to accept any application for the Hong Kong Offer
Shares by the public. The contents of the electronic version of this prospectus are identical to the
printed prospectus as registered with the Registrar of Companies in Hong Kong pursuant to Section
342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
If you are an intermediary , broker or agent , please remind your customers, clients or principals,
as applicable, that this prospectus is available online at the website addresses above.
Please refer to the section headed “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
electronically.
IMPORTANT


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Your application through the White Form eIPO service or the HKSCC EIPO channel must be
made for a minimum of 100 Hong Kong Offer Shares and in multiples of that number of Hong Kong
Offer Shares as set out in the table below.
If you are applying through the White Form eIPO service, you may refer to the table below for
the amount payable for the number of H Shares you have selected. You 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. You 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.
Shanghai FourSemi Semiconductor Co., Ltd.
(HK$50.00 per Hong Kong Offer Share)
NUMBER OF HONG KONG OFFER SHARES
THAT MAY BE APPLIED FOR AND PAYMENTS
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
100 5,050.43 1,500 75,756.38 8,000 404,034.00 90,000 4,545,382.50
200 10,100.86 2,000 101,008.50 9,000 454,538.26 100,000 5,050,425.00
300 15,151.28 2,500 126,260.63 10,000 505,042.50 125,000 6,313,031.26
400 20,201.70 3,000 151,512.76 20,000 1,010,085.00 150,000 7,575,637.50
500 25,252.13 3,500 176,764.88 30,000 1,515,127.50 175,000 8,838,243.76
600 30,302.56 4,000 202,017.00 40,000 2,020,170.00 200,000 10,100,850.00
700 35,352.98 4,500 227,269.13 50,000 2,525,212.50 225,000 11,363,456.26
800 40,403.40 5,000 252,521.26 60,000 3,030,255.00 250,000 12,626,062.50
900 45,453.83 6,000 303,025.50 70,000 3,535,297.50 275,000 13,888,668.76
1,000 50,504.26 7,000 353,529.76 80,000 4,040,340.00 300,000
(1) 15,151,275.00
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, 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, Stock Exchange trading fee and AFRC transaction levy are paid to the Stock Exchange (in
the case of the SFC transaction levy and in the case of the AFRC transaction levy, collected by the Stock Exchange on
behalf of the SFC and the AFRC respectively).
No application for any other number of Hong Kong Offer Shares will be considered and such an
application is liable to be rejected.
IMPORTANT


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If there is any change in the following expected timetable of the Hong Kong Public Offering,
we will issue an announcement in Hong Kong to be published on the websites of the Stock Exchange
at www.hkexnews.hk
and our website at www.foursemi.com .
Time and date (1)
Hong Kong Public Offering commences ..................................... 9:00 a.m. on
Monday, March 23, 2026
Latest time to complete electronic applications under
White Form eIPO service through the designated
website www.eipo.com.hk (2) ...........................................1 1:30 a.m. on
Thursday, March 26, 2026
Application lists open (3) ................................................1 1:45 a.m. on
Thursday, March 26, 2026
Latest time to (a) give electronic application instructions to HKSCC
and (b) complete payment of White Form eIPO
applications by effecting internet banking transfer(s) or PPS
payment transfer(s)
(4) ............................................... 12:00 noon on
Thursday, March 26, 2026
If you are instructing your broker or custodian who is a HKSCC Participant to give electronic
application instructions via FINI to apply for the Hong Kong Offer Shares on your behalf, you are
advised to contact your broker or custodian for the latest time for giving such instructions which may
be different from the latest time as stated above.
Application lists of the Hong Kong Public Offering close ....................... 12:00 noon on
Thursday, March 26, 2026
Expected Price Determination Date
(5) ...................................b y 12:00 noon on
Friday, March 27, 2026
Announcement of:
 the Offer Price;
 an indication of the level of interest in the International Offering;
 the level of applications in the Hong Kong Public Offering; and
 the basis of allocation of the Hong Kong Offer Shares
to be published and on the websites of the Stock Exchange at
www.hkexnews.hk
and our Company at www.foursemi.com (7)
at or before .......................................................1 1:00 p.m. on
Monday, March 30, 2026
The results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety of channels,
including:
 in the website of the Stock Exchange
at www.hkexnews.hk
and the Company’s website
at www.foursemi.com (7) ................................n o later than 11:00 p.m. on
Monday, March 30, 2026
EXPECTED TIMETABLE
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 in the designated results of allocations website at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ) with
a “search by ID” function .................................... from 11:00 p.m. on
Monday, March 30, 2026
to 12:00 midnight on
Sunday, April 5, 2026
 from the allocation results telephone enquiry line by
calling +852 2862 8555
between 9:00 a.m. and 6:00 p.m. ........................o nT uesday, March 31, 2026,
Wednesday, April 1, 2026,
Thursday, April 2, 2026 and
Wednesday, April 8, 2026
For those applying through HKSCC EIPO channel,
you may also check with your broker or custodian from ....................... 6:00 p.m. on
Friday, March 27, 2026
Dispatch of H Share certificates or deposit of the H Share certificates
into CCASS in respect of wholly or partially successful applications
pursuant to the Hong Kong Public Offering on or before
(6) ............ Monday, March 30, 2026
Dispatch of White Form e-Refund payment
instructions/refund cheques (if applicable) on or before (8)(9)(10) .........T uesday, March 31, 2026
Dealings in H Shares on the Main Board of the
Stock Exchange to commence at ......................................... 9:00 a.m. on
Tuesday, March 31, 2026
(1) All times and dates refer to Hong Kong local time and date, except as otherwise stated. Details of the structure of the
Global Offering, including its conditions, are set out in “Structure of the Global Offering” in this prospectus. If there is
any change in the above expected timetable, we will issue a separate announcement in Hong Kong to be published on our
website at www.foursemi.com
and the website of the Stock Exchange at www.hkexnews.hk .
(2) You will not be permitted to submit your application under the White Form eIPO service through the designated website
at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you have already submitted your
application and obtained an application reference number from the designated website prior to 11:30 a.m., you will be
permitted to continue the application process (by completing payment of application monies) until 12:00 noon on the last
day for submitting applications, when the application lists close.
(3) If there is a tropical cyclone warning signal number 8 or above, a “black” rainstorm warning signal and/or Extreme
Conditions in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, March 26, 2026, the application
lists will not open and close on that day. See “How to Apply for Hong Kong Offer Shares—E. Severe Weather
Arrangements.”
(4) Applicants who apply for the Hong Kong Offer Shares via HKSCC EIPO channel should refer to “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 Friday, March 27, 2026. If, for any reason, the Offer Price is
not agreed between the Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company by
12:00 noon on Friday, March 27, 2026, the Global Offering will not proceed and will lapse.
(6) The H Share certificates are expected to be issued on Monday, March 30, 2026 but will only become valid evidence of
title provided that the Global Offering has become unconditional in all respects and neither of the Underwriting
Agreements has been terminated in accordance with its terms, which is scheduled to be at around 8:00 a.m. on Tuesday,
March 31, 2026. Investors who trade H Shares on the basis of publicly available allocation details before the receipt of H
Share certificates and before they become valid evidence of title do so entirely of their own risk.
(7) None of the websites or any of the information contained on the websites forms part of this prospectus.
EXPECTED TIMETABLE
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(8) Applicants being individuals who are eligible for personal collection must not authorize any other person to make
collection on their behalf. If you are a corporate applicant which is eligible for personal collection, your authorized
representative must bear a letter of authorization from your corporation stamped with your corporation’s chop. Both
individuals and authorized representatives must produce, at the time of collection, evidence of identity acceptable to the H
Share Registrar. Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel should refer
to the paragraph headed “How to Apply for Hong Kong Offer Shares—D. Despatch/Collection of H Share Certificates and
Refund of Application Monies” in this prospectus for details.
(9) Applicants who apply through the White Form eIPO service by paying the application monies through a single bank
account, may have White Form e-Refund payment instructions (if any) dispatched to their application payment bank
account. Applicants who apply through the White Form eIPO service by paying the application monies through multiple
bank accounts, may have refund cheques in favor of the applicant (or, in the case of joint applications, the first-named
applicant) sent to the address specified in their application instructions by ordinary post and at their own risk.
(10) White Form e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially unsuccessful
applications and in respect of wholly or partially successful applications if the Offer Price is less than the price per Offer
Share payable on application.
The H Share certificates will only become valid evidence of title provided that the Global
Offering has become unconditional in all respects and neither of the Hong Kong Underwriting
Agreement nor the International Underwriting Agreement is terminated in accordance with its
respective terms prior to 8:00 a.m. on the Listing Date. The Listing Date is expected to be on or about
Tuesday, March 31, 2026. Investors who trade the H Shares on the basis of publicly available allocation
details prior to the receipt of H Share certificates or prior to the H Share certificates becoming valid
evidence of title do so entirely at their own risk.
The above expected timetable is a summary only. Potential investors should read carefully
“Underwriting,” “Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares”
for details relating to the structure and conditions of the Global Offering, procedures on the
applications for Hong Kong Offer Shares and the expected timetable, including conditions, effect of bad
weather and the dispatch of refund cheques and H Share certificates.
EXPECTED TIMETABLE
– iii –


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This prospectus is issued by our Company solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a solicitation of
an offer to buy any security other than the Hong Kong Offer Shares. This prospectus may not be
used for the purpose of, and does not constitute, an offer or invitation in any other jurisdiction or in
any other circumstances. No action has been taken to permit a public offering of the Offer Shares or
the distribution of this prospectus in any jurisdiction other than Hong Kong. The distribution of this
prospectus for purposes of a public offering and the offering and sale of the Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under applicable
securities laws of such jurisdictions pursuant to registration with, or authorization by, the relevant
securities regulatory authorities or an exemption therefrom.
You should rely only on the information contained in this prospectus to make your investment
decision. 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 Overall
Coordinators, the Joint Global Coordinators, the Joint Sponsors, any of the Underwriters, any of
our or their respective directors, officers, representatives, or affiliates, or any other person or party
involved in the Global Offering. Information contained in our website, located at
www.foursemi.com
, does not form part of this prospectus.
Page
EXPECTED TIMETABLE ................................................ i
CONTENTS ........................................................... i v
SUMMARY ............................................................ 1
DEFINITIONS ......................................................... 2 2
GLOSSARY ........................................................... 3 0
FORW ARD-LOOKING STATEMENTS ....................................... 3 9
RISK FACTORS ........................................................ 4 0
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
AND EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE ............ 6 6
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING ...... 7 2
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING ............ 7 6
CORPORATE INFORMATION ............................................ 8 1
INDUSTRY OVERVIEW ................................................. 8 3
REGULATORY OVERVIEW .............................................. 9 2
HISTORY AND CORPORATE STRUCTURE .................................. 1 0 4
BUSINESS ............................................................ 1 2 8
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS ................. 2 0 1
FINANCIAL INFORMATION .............................................. 2 0 4
CONTENTS
–i v–


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Page
DIRECTORS AND SENIOR MANAGEMENT ................................. 2 4 9
SUBSTANTIAL SHAREHOLDERS .......................................... 2 5 9
SHARE CAPITAL ...................................................... 2 6 1
FUTURE PLANS AND USE OF PROCEEDS .................................. 2 6 5
UNDERWRITING ....................................................... 2 6 8
STRUCTURE OF THE GLOBAL OFFERING ................................. 2 8 1
HOW TO APPLY FOR HONG KONG OFFER SHARES ......................... 2 8 9
APPENDIX I — ACCOUNTANTS’ REPORT .............................. I - 1
APPENDIX IIA — UNAUDITED PRO FORMA FINANCIAL INFORMATION ...... IIA-1
APPENDIX IIB — UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025 ............ IIB-1
APPENDIX III — SUMMARY OF ARTICLES OF ASSOCIATION ............... III-1
APPENDIX IV — STATUTORY AND GENERAL INFORMATION ............... I V - 1
APPENDIX V — DOCUMENTS DELIVERED TO THE
REGISTRAR OF COMPANIES IN HONG KONG AND
A V AILABLE ON DISPLAY ............................. V - 1
CONTENTS
–v–


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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. In particular , we are a
specialist technology company seeking to list on the Main Board of the Hong Kong Stock Exchange
under Chapter 18C of the Listing Rules because we are unable to meet the requirements under Rule
8.05(1), (2) or (3) of the Listing Rules. There are unique challenges, risks and uncertainties
associated with investing in companies such as ours. In addition, we have incurred net losses since
our inception, and we may incur net losses for the foreseeable future. We had net cash used in
operating activities during the Track Record Period. We did not declare or pay any dividends during
the Track Record Period and may not pay any dividends in the foreseeable future. Your investment
decision should be made in light of these considerations.
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
We are a provider of power amplifier audio chips and haptic drivers in China. We specialize in the
design of low-power audio chips, mid/high-power audio chips and haptic drivers under a fabless model
to offer a wide array of solutions for emerging application scenarios. According to the F&S report, by
revenue in 2024, we ranked (1) fourth among power amplifier audio chip providers globally, (2) third
among power amplifier audio chip providers in China, and (3) fifth among haptic driver providers in
China.
Our portfolio of products empowers various industries, including consumer electronics and
intelligent vehicles. We first introduced our power amplifier audio chip products for portable consumer
electronics to optimize audio, create effects and protect speakers using our algorithms. When deployed,
our power amplifier audio chip products receive the electrical signal input, analyze and preprocess the
signal by filtering noise and strengthening the received signal, process the signal by amplifying
electrical power, tunning audio signal based on scenario, convert the signal to code speaker driver
movement while simultaneously enabling the speaker protection technologies. This allows users’
devices to output the highest quality of audio, reduce power consumption, and protect the speakers to
achieve device longevity.
With the success of our first power amplifier audio chip products, we expanded our product
portfolio by adding a more powerful line of power amplifier audio chip products that are primarily for
larger electronics and intelligent vehicles and a new line of chips that process haptic feedback to
provide users with a diverse way of interacting with their devices. Our products are fundamental for
devices to perceive operation scenarios accurately, respond to users dynamically and enhance
human-device interaction. With our products, we have built deep technical expertise in these industries
and believe we will benefit as new application scenarios continue to emerge, including smart displays,
intelligent vehicles, AI-powered consumer electronics, and robotics, all of which present significant
growth potential.
Our product innovation stems from our technological development. We have launched multiple
China-first chip products under the trend of domestic substitution, with breakthroughs in algorithm and
system architecture, low energy consumption, real-time processing, low distortion, and multi-scenario
perception. In particular, we introduced China’s first ASIC DSP-integrated portable power amplifier
audio chips in 2017, China’s first mid/high-power audio chip in 2021, and China’s first
automotive-grade AEC-Q100-certified power amplifier audio chip in 2023, according to the F&S report.
OUR PRODUCT OFFERINGS
Our products primarily consist of power amplifier audio chips. Power amplifier audio chips are
integrated circuit modules based on mixed-signal design that incorporate some, or all of the following
characteristics, including built-in or externally paired audio algorithms, digital input interfaces and
integrated sound processing modules. Power amplifier chips leverage power control algorithms and
audio processing algorithms to efficiently process audio signals and optimize output performance. They
deliver low power consumption, high integration density and capabilities for intelligent control, catering
to customized requirements of downstream industries. Power amplifier chips have extensive
applications (1) in consumer electronics and smart home devices including smartphones, tablets, smart
SUMMARY
–1–


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wearables, smart displays, and smart speakers, and (2) in automotive systems such as automotive audio
systems and displays. Our products are capable of processing in-cabin acoustic data including voice
commands, infotainment system output, A V AS warning sounds, and T-BOX audio system
communications but do not receive voice command inputs.
Our products include (1) low-power audio chips, comprising two major types, namely, our
adaptive power control audio chips and portable power amplifier audio chips; (2) mid/high-power audio
chips; (3) haptic drivers; and (4) others, comprising power management chips. In 2024, we delivered
more than 400 million units of power amplifier audio chips in China, and more than 450 million units
of power amplifier audio chips globally, according to the F&S report.
The following table sets forth a breakdown of our revenue by product line for the years indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount % of total Amount % of total Amount % of total Amount % of total Amount % of total
(RMB in thousands, except for percentages)
(unaudited)
Low-power audio chips ....... 126,370 97.0 140,645 93.5 322,908 90.9 260,760 90.3 255,455 91.0
— Adaptive power control audio chips
82,529 63.3 104,379 69.5 172,329 48.5 146,073 50.6 144,997 51.6
— Portable power amplifier audio
chips ............. 43,841 33.6 36,266 24.1 150,579 42.4 114,687 39.7 110,458 39.3
Mid/high-power audio chips ..... 3,957 3.0 8,662 5.8 26,707 7.5 23,612 8.1 20,596 7.3
Haptic drivers ............ — — 984 0.7 5,332 1.5 4,277 1.5 3,702 1.3
Others (1) .............. ———— 2 4 8 0 . 1 1 8 3 0 . 1 1 ,025 0.4
Total ................ 130,327 100.0 150,291 100.0 355,195 100.0 288,832 100.0 280,778 100.0
(1) Others primarily represent power management chips.
The following table sets forth our sales volume and ASP information by product line for the
period indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
(ASP in RMB; units in thousands for sales volume)
(unaudited)
Low-power audio chips ....... 116,486 1.08 214,323 0.66 451,532 0.72 374,914 0.70 389,128 0.66
— Adaptive power control audio chips
90,628 0.91 186,715 0.56 330,181 0.52 281,538 0.52 296,549 0.49
— Portable power amplifier audio
chips ............. 25,858 1.70 27,608 1.31 121,351 1.24 93,376 1.23 92,580 1.19
Mid/high-power audio chips ..... 1,771 2.23 3,266 2.65 11,739 2.28 10,708 2.21 9,964 2.07
Haptic drivers ............ — — 1,006 0.98 5,845 0.91 4,678 0.91 4,173 0.89
Others (1) .............. ———— 1 , 0 2 6 0.24 726 0.26 1,866 0.55
(1) Others primarily represent power management chips.
The average selling price of low-power audio chips decreased from RMB1.08 per unit in 2022 to
RMB0.66 per unit in 2023, primarily due to (i) the rapid increase in sales volume of adaptive power
control audio chips, which generally have a lower ASP, and (ii) our strategic adoption of a more
competitive pricing approach to prioritize market share expansion. Sales volume of low-power audio
chips increased significantly from 214.3 million units in 2023 to 451.5 million units in 2024, driven by
overall business growth and an enriched product portfolio. The average selling price of mid/high-power
SUMMARY
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amplifier audio chips increased from RMB2.23 per unit in 2022 to RMB2.65 per unit in 2023, primarily
due to significantly increased customer demand for certain higher-priced models of the FS21 series. The
ASP decreased to RMB2.28 per unit in 2024 as demand for other models with lower unit prices
increased.
The following table sets forth a breakdown of our gross profit and gross profit/(loss) margin by
product type for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount
Gross
profit/(loss)
margin (%) Amount
Gross
profit/(loss)
margin (%) Amount
Gross
profit
margin (%) Amount
Gross
profit
margin (%) Amount
Gross
profit
margin (%)
(RMB in thousands, except for percentages)
(unaudited)
Before impairment loss of
inventories
Low-power audio chips ....... 21,526 17.0 3,859 2.7 40,869 12.7 32,342 12.4 49,967 19.6
— Adaptive power control audio
chips ............. 15,651 19.0 1,546 1.5 18,979 11.0 12,482 8.5 25,799 17.8
— Portable power amplifier audio
chips ............. 5,875 13.4 2,313 6.4 21,890 14.5 19,860 17.3 24,168 21.9
Mid/high-power audio chips ..... (29) (0.7) 3,336 38.5 4,832 18.1 6,167 26.1 4,664 22.6
Haptic drivers ............ — — 518 52.6 3,448 64.7 2,789 65.2 2,323 62.7
Others ................ ————3 9 15.7 32 17.5 688 67.1
Subtotal .............. 21,497 16.5 7,713 5.1 49,188 13.8 41,330 14.3 57,642 20.5
Less: impairment losses on
inventories ............ (12,018) (7,837) (2,632) (2,509) (1,585)
Total ................ 9,479 7.3 (124) (0.1) 46,556 13.1 38,821 13.4 56,057 20.0
Note:
(1) We present impairment losses on inventories as a separate line item to provide a clearer view of our gross profit margin by
product type. Inventories are stated at the lower of cost and net realizable value. Net realizable value is based on estimated
selling prices less any estimated costs to be incurred to completion and disposal. Management estimates the net realizable
value for such inventories based primarily on the latest invoice prices and current market conditions. The impairment
losses on inventories requires the use of estimates. Where the expectation is different from the original estimate, such
difference will have an impact on the carrying value of inventories and the write-down of inventory amount in the year in
which such estimates have been changed. By separating impairment losses, we differentiate the impact of these inventory
valuation adjustments—which are estimates inherently subject to market volatility and may not reflect actual future
outcomes—from the underlying operational profitability of our products.
Our gross profit margin demonstrated significant improvement in 2024 and continued to
strengthen in the ten months ended October 31, 2025. In 2024, the improvement in gross profit margin
for our audio chips was primarily attributable to the realization of economies of scale. This was driven
by a substantial increase in our revenue, which grew from RMB150.3 million in 2023 to RMB355.2
million. This enhanced scale and market recognition contributed significantly to improved profitability.
Furthermore, a favorable shift in our product mix towards higher-margin offerings, particularly the
increased revenue contribution from portable power amplifier audio chips within the portable audio
segment, and a rise in the proportion of mid/high-power audio chips, supported the margin expansion.
Concurrently, the realization of economies of scale, strengthened supplier bargaining power, and
product upgrade effectively reduced the per-unit cost of our chips from RMB0.69 in 2023 to RMB0.66
in 2024. In the ten months ended October 31, 2025, the gross profit margin for audio chips saw further
enhancement. This was largely driven by a continued optimization of the product mix, evidenced by the
increased revenue contribution from higher-margin portable power amplifier audio chips within the
portable audio segment.
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The following table sets forth the revenue breakdown by downstream applications and the gross
profit and gross profit margin of each for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2025
Product Category Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin
(RMB in thousands, except for percentages)
Mobile phone ........ 110,759 18,204 16.4% 113,143 5,006 4.4% 212,583 33,197 15.6% 162,738 31,796 19.5%
Tablet .......... 14,216 3,031 21.3% 14,759 1,234 8.4% 87,892 7,911 9.0% 82,926 15,913 19.2%
Speaker .......... 336 127 37.8% — — — 12,427 4,116 33.1% 11,896 3,596 30.2%
Television ......... 2,897 (252) (8.7%) 1,230 175 14.3% 9,992 854 8.5% 7,505 1,183 15.8%
Smart watch ........ 1,485 372 25.1% 3,109 522 16.8% 5,690 1,183 20.8% 6,495 2,522 38.8%
Vehicle .......... ————————— 8 9 9 4 2 6 47.4%
Camera .......... ————————— 2 0 05 6 28.0%
All-in-one PC ........ 159 (118) (74.1%) 585 145 24.7% 147 40 27.1% 80 25 31.3%
Others ........... 475 133 27.8% 17,465 631 3.6% 26,464 1,887 7.1% 8,039 2,125 26.4%
Allowance for impairment ... (12,018) (7,837) (2,632) (1,585)
Total ........... 130,327 9,479 7.3% 150,291 (124) (0.1%) 355,195 46,556 13.1% 280,778 56,057 20.0%
(1): Others primarily includes projectors, dictionary pens, headphones and a small portion of revenue that cannot be accurately
classified.
(2): Above are our estimates of our end customers intended applications based on the chip model’s specifications. We have no
control over, or knowledge of, how end customers ultimately apply these chips.
Our gross profit margin for mobile phone applications decreased from 16.4% in 2022 to 4.4% in
2023, primarily due to our strategic adoption of a more competitive pricing approach to prioritize
market share expansion, which lowered the average selling price of our low-power audio chips. The
margin subsequently recovered to 15.6% in 2024 and further to 19.5% in the ten months ended October
31, 2025, driven by economies of scale, a favorable shift in product mix towards higher-margin portable
power amplifier audio chips, and reduced per-unit costs through product update.
Low-power audio chips
Our low-power audio chips can be classified into two types based on their features, namely
adaptive power control audio chips and portable power amplifier audio chips. Our adaptive power
control audio chips focus on power control by dynamically adjusting input and output signals in real
time using our algorithms to match acoustic environment. Our portable power amplifier audio chips
focus on detecting speaker’s current and voltage in real time using our algorithms to control power
output. Our low-power audio chips deliver a blend of performance, efficiency, and adaptability across a
wide range of applications. As of the Latest Practicable Date, we had three major low-power audio chip
series, forming a robust portfolio that addresses diverse market segments.
Our gross profit from low-power audio chips (before impairment losses on inventories) increased
significantly from RMB3.9 million in 2023 to RMB40.9 million in 2024, and our gross profit margin
for low-power audio chips increased from 2.7% in 2023 to 12.7% in 2024, primarily due to the
increases in gross profit margin of both our adaptive power control audio chips from 1.5% in 2023 to
11.0% in 2024 and portable power amplifier audio chips from 6.4% in 2023 to 14.5% in 2024. Our
gross profit from and gross profit margin for low-power audio chips (before impairment losses on
inventories) decreased significantly from RMB21.5 million and 17.0% in 2022 to RMB3.9 million and
2.7% in 2023, respectively, primarily due to our decreased average selling price of adaptive power
control audio chips from RMB0.91 per unit to RMB0.56 per unit, and our decreased average selling
price of portable power amplifier audio chips from RMB1.70 per unit to RMB1.31 per unit. This
downward was mainly attributable to our strategic adoption of a relatively more competitive pricing
approach to prioritize market share expansion. Our gross profit from low-power audio chips increased
SUMMARY
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by 54.5% from RMB32.3 million for the ten months ended October 31, 2024 to RMB50.0 million for
the ten months ended October 31, 2025, primarily due to a reduction in the cost structure of our
adaptive power control audio chips achieved through product iteration, combined with a higher revenue
contribution from the higher-margin power amplifier (PA) product category, collectively driving an
increase in the overall gross profit margin for our low-power audio chips. Our gross profit margin of
low-power audio chips increased from 12.4% in the ten months ended October 31, 2024 to 19.6% in the
ten months ended October 31, 2025. The gross profit margin improvements were mainly attributable to
(i) economies of scale and enhanced supply chain stability, which lowered our materials and processing
cost; (ii) a higher sales contribution from portable power amplifier audio chips, which had relatively
high gross profit margins compared to adaptive power control audio chips.
Mid/high-power audio chips
Mid/high-power audio chips, including automotive-grade power amplifier audio chips, amplify
and drive audio signals with output power exceeding 10W. Our product design for mid/high-power
audio chips prioritizes heat dissipation and electromagnetic interference mitigation to ensure sustained
performance in compact, power-dense environments. We launched China’s first mid-power amplifier
audio chip, FS2119, in 2021. The FS2119 series has since achieved mass production and has been
widely adopted in multiple branded televisions and audio systems. As of the Latest Practicable Date, we
had three major mid/high-power audio chip series, establishing a comprehensive suite targeting various
industries, such as consumer electronics and intelligent vehicles.
Our gross profit from mid/high-power audio chips increased by 44.8% from RMB3.3 million in
2023 to RMB4.8 million in 2024, primarily due to the rapid increase in sales volume from
approximately 3.3 million in 2023 to 11.7 million in 2024, driven by our overall business growth in
2024. Our gross profit margin for mid/high-power audio chips decreased from 38.5% in 2023 to 18.1%
in 2024. Our mid/high-power audio chips realized a significant increased from a gross loss of RMB29
thousand in 2022 to a gross profit of RMB3.3 million in 2023. Our gross profit margin for
mid/high-power audio chips increased to 38.5% in 2023. Our gross profit from mid/high-power audio
chips decreased by 24.4% from RMB6.2 million for the ten months ended October 31, 2024 to RMB4.7
million for the ten months ended October 31, 2025, primarily due to lower sales volume and
consequently reduced gross profit from the FS2105 series, as we strategically reallocated resources
towards the development and promotion of newer product models, resulting in reduced sales efforts for
the FS2105 series.
The gross profit margin for our mid/high-power audio chips experienced notable fluctuations
during the Track Record Period. The product line achieved a significant turnaround from a gross loss
position in 2022 to a gross profit margin of 38.5% in 2023. This initial surge was largely due to the
product moving beyond its initial trial production phase, which involved relatively high costs that were
not indicative of its ongoing cost structure, combined with successful market entry supported by our
technical advantages. However, the gross profit margin for this product line decreased to 18.1% in
2024. This decrease was primarily a result of a deliberate strategic decision to adopt a more competitive
pricing approach for certain models to accelerate market share expansion, which temporarily
compressed the average selling price and consequently the margin. The margin for specific
high-performance models, such as the FS2105 series developed for speaker applications, remained
robust during the Track Record Period. For the ten months ended October 31, 2025, the FS2105 series
maintained an average selling price of RMB2.02 and a gross profit margin of 23.8%.
Haptic drivers
Our haptic drivers are chips deployed in smartphones, smart wearables, tablets and portable
gaming consoles that operates in reaction to user inputs. When the user operates the device, the haptic
driver receives electrical signal inputs including the user’s pressing speed and force amplitude and
determines the necessary reaction to the user input and converts signal to drive the motor coils which
vibrates to return a tactile sensation using our algorithms, enhancing user-device interaction. We
integrated technologies including temperature detection, over current protection, short-circuit protection
and LRA drive (a drive that uses audio-like waveforms to generate vibration in sync with sound) and
SUMMARY
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diagnostics to protect the motor coil for the longevity of the device. In 2024, we delivered more than
five million units of haptic drivers and ranked fourth in the China’s haptic driver market in terms of
total shipment volume, according to the F&S report. As of the Latest Practicable Date, our haptic driver
product series, FS30, has been widely adopted in smartphones, smart wearables, tablets and gaming
accessories.
Our gross profit from haptic drivers increased significantly from RMB0.5 million in 2023 to
RMB3.5 million in 2024, primarily driven by our overall business growth in 2024. Our gross profit
margin for haptic drivers increased from 52.6% in 2023 to 64.7% in 2024.
The significant increase in the gross profit margin for haptic drivers from 52.6% in 2023 to 64.7%
in 2024 was substantially driven by the effective execution of our cross-selling strategy. We cross-sold
haptic drivers to our customers specializing in smart watch and smart phone manufacturing. Following
their commercial launch in 2023, we leveraged our established customer base and extensive market
coverage in the power amplifier audio chip sector to promote our haptic drivers. This strategic
cross-selling initiative facilitated rapid sales volume growth, which increased from approximately 1.0
million units in 2023 to 5.8 million units in 2024. The increased production volume associated with this
sales growth allowed for better absorption of fixed costs and contributed to the improved margin.
Furthermore, the initial margin in 2023 was not fully indicative of the product’s potential profitability,
as it reflected early-stage launch costs. As sales scaled and operational efficiencies were realized in
2024, the gross profit margin normalized at a higher, more sustainable level, underscoring the success
of integrating haptic drivers into our broader product portfolio and sales strategy.
COMMERCIALIZATION
We primarily engaged in the design and development of semiconductor chips. Our Directors are of
the view that, and as advised by Frost & Sullivan, all of our products fall within an acceptable sector of
a Specialist Technology Industry as defined under Chapter 18C of the Listing Rules, namely paragraph
(b) of the “Advanced hardware and software — Semiconductors” sector as set forth under Chapter 2.5
of the Guide, as we are engaged in the research and development, logic and physical design, validation
and verification of our power amplifier audio chips, haptic drivers and power management chips, which
are all semiconductor chips. We have adopted a transaction-based model for the sales of our products.
COMPETITIVE STRENGTHS
We believe that the following competitive strengths contribute to our success and differentiate us
from our competitors: (1) recognized power amplifier audio chip provider, (2) constant technology
breakthroughs and product innovations driving growth, (3) integration with global customers’ ecosystem
and collaborative relationships, (4) multifaceted quality management and reliable supply chain system,
and (5) seasoned management and research and development team with profound industry expertise.
GROWTH STRATEGIES
We intend to pursue the following key strategies to grow our business sustainably and maintain
our market position: (1) strengthening research and development in power amplifier audio chips, (2)
diversifying product portfolio and broaden customer base in key application scenarios, (3) building an
ATE testing platform to strengthen supply chain stability, (4) fortifying our sales network to expand
global reach, and (5) pursuing strategic alliances, investments and acquisitions to integrate industry
resources.
OUR CORE TECHNOLOGIES
The power amplifier audio chip industry is characterized by rapid technological evolution and
intense market competition. Leveraging our strong R&D capabilities, we continuously launch new
products while necessitating sustained R&D investments to drive innovation, advancing manufacturing
processes, and meeting market demands efficiently. Our core technologies include, among others, (1)
audio processing and protection algorithms, (2) application-specific integrated circuit digital signal
SUMMARY
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processor (ASIC DSP) technology, (3) wide frequency response technology, (4) dynamic range
enhancement technology, and (5) smart amplifier protection control circuits and algorithms. See
“Business—Our Core Technologies” for details.
RESEARCH AND DEVELOPMENT
Through years of R&D efforts, we have built expertise in the field of power amplifier audio chips
and haptic drivers. We continuously expand our product portfolio, updating existing products and
introducing cost-effective new solutions to enhance competitiveness. During the Track Record Period,
our research and development costs were RMB48.7 million, RMB59.3 million, RMB68.1 million,
RMB55.1 million and RMB55.7 million in 2022, 2023, 2024 and the ten months ended October 31,
2024 and 2025, respectively, representing 57.7%, 60.2%, 62.7%, 61.9% and 53.0% of our annual total
operating expenditure in the respective periods.
We have not in-licensed any material intellectual property rights or outsourced any material
research and development processes to third parties. During the Track Record Period and up to the
Latest Practicable Date, we performed all material R&D of our products in house. We had assembled a
research and development team of 91 members, accounting for 61.1% of our workforce, as of the Latest
Practicable Date.
INTELLECTUAL PROPERTY RIGHTS
We believe that our intellectual property rights are critical to our continued success. We have
taken the following key measures to protect our intellectual property rights, including (1) establishing a
set of internal policies to implement effective management over our intellectual property rights, (2)
timely registration, filing and application for the ownership of our intellectual properties, (3) providing
trainings to enhance employees’ intellectual property right awareness and to ensure our intellectual
property protection measures’ long-term effectiveness, and (4) stipulating and emphasizing the
ownership and protection of intellectual properties in the employment agreements and employee
handbook.
As of the Latest Practicable Date, we had 32, two and one registered patents in China, the U.S.
and Europe, respectively, including 32 invention patents and three utility model patents, and filed 21
patent applications in China and one patent application in the U.S. which were pending approval. All of
our patents are self-owned and not licensed by third-parties. Our Directors confirm that we did not have
any material disputes or any other pending material legal proceedings of intellectual property rights
with third parties as of the Latest Practicable Date.
OUR SALES NETWORK
During the Track Record Period, we sold our products in mainland China and Hong Kong. One of
our customers in Hong Kong is a subsidiary of one of the largest consumer electronics multinational
corporations headquartered in South Korea. We sold our products primarily through distributors, and, to
a much lesser extent, through direct sales. We have 11, 9, 13 and 11 distributors as of December 31,
2022, 2023, 2024 and October 31, 2025.
The following table sets forth a breakdown of our revenue by distribution channels for the periods
indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount % of total Amount % of total Amount % of total Amount % of total Amount % of total
(RMB in thousands, except for percentages)
(unaudited)
Distributorship ........... 125,249 96.1 129,558 86.2 324,632 91.4 266,526 92.3% 239,251 85.2%
Direct sales ............. 5,078 3.9 20,733 13.8 30,563 8.6 22,306 7.7% 41,527 14.8%
Total ................ 130,327 100.0 150,291 100.0 355,195 100.0 288,832 100.0% 280,778 100.0%
SUMMARY
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The following table sets forth a breakdown of our gross profit and gross profit margin by
distribution channels for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2025
Gross profit
Gross profit
margin Gross profit
Gross profit
margin Gross profit
Gross profit
margin Gross profit
Gross profit
margin
(RMB in thousands, except for percentages)
Distributor ...... 23,139 18.5% 6,139 4.7% 43,146 13.3% 45,623 19.1%
Direct Sale ...... (1,642) (32.3%) 1,574 7.6% 6,042 19.8% 12,019 28.9%
Impairment losses ... (12,018) (7,837) (2,632) (1,585)
Total ......... 9,479 7.3% (124) (0.1%) 46,556 13.1% 56,057 20.0%
The gross loss from direct sales in 2022 was primarily attributable to the relatively small scale of
our direct sales operations in 2022, and such limited scale resulted in high unit costs.
Our product requires our sales force to possess domain-specific competencies. We prioritize this
requirement during recruitment, for example, by requiring our sales personnel to have relevant
academic backgrounds, such as in electronics. We provide regular training sessions to maintain our
sales team’s technical proficiency and require them to participate in technical discussions alongside
engineers to deepen their understanding of our products. To encourage and incentivize our sales force,
we have implemented a compensation structure that combines a fixed salary with performance-based
assessments and special incentives.
We sell our products primarily through distributors and, to a lesser extent, through direct sales. In
a typical distributor sale, we initially engage with the end customer to conduct technical validation and
negotiate commercial terms. Upon confirming the customer’s requirements, a distributor may be
engaged to fulfill orders upon mutual agreement with the end customers. In other cases, we may supply
our products to distributors where the end customer typically requests standard, mature product models
that require minimal or no customization and thus do not entail significant customization costs. The
distributor purchases products from us, handles logistics and payment settlement, and assumes the
credit risk, allowing us to focus on research and development while ensuring efficient delivery and
stable cash flow. We sell directly to certain end customers to build strategic relationships, facilitate
technical collaboration, and capture opportunities in new application areas. See “Business—Sales and
Marketing—Our Sales Network” for details.
SUPPLIERS
Under our fabless model, we outsource wafer fabrication, chip packaging and all testing activities
for mass production to third-party business partners. Our primary procurement include (1) wafers from
wafer foundry located in China, Japan and South Korea, and (2) chip packaging and testing services
located in China. To a much lesser extent, we also procure certain equipment, such as testing
equipment, and research materials, as well as other services that facilitate the design of our products,
such as tape-out and multi-project wafer services.
Our suppliers primarily consist of (1) foundries and (2) chip packaging and testing service
providers. In 2022, 2023, 2024 and the ten months ended October 31, 2025, purchases from our top five
suppliers for each period during the Track Record Period accounted for 89.1%, 91.9%, 93.9% and
93.5% of our total purchase amount of such period, respectively, and the purchase from our largest
supplier for each period during the Track Record Period accounted for 31.5%, 62.0%, 52.7% and 33.7%
of our total purchase amount in the same periods, respectively.
CUSTOMERS
Our customers include distributors and direct sales customers, including manufacturers for mobile
phones, tablets, wearables, televisions, automotive electronics and vehicles. In 2022, 2023, 2024 and
the ten months ended October 31, 2025, revenue generated from our top five customers for each period
SUMMARY
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during the Track Record Period accounted for 93.0%, 78.6%, 83.0% and 88.2% of our total revenue of
such period, respectively, and revenue generated from our largest customer for each period during the
Track Record Period accounted for 32.7%, 23.7%, 30.3% and 30.5% of our total revenue in the same
periods, respectively. We typically settle payments with our top five customers by bank transfer. See
“Business—Customers” for details.
MARKET OPPORTUNITY AND COMPETITION
The power amplifier audio chip industry is highly competitive and the industry is growing rapidly.
Rapid growth in the industry is primarily driven by rising demand for advanced audio interaction in
consumer electronics and the accelerating upgrade of in-vehicle audio systems in intelligent vehicles.
According to the F&S report, the market size of China’s power amplifier audio chip market has grown
from RMB28.0 billion in 2020 to RMB41.6 billion in 2024, at a CAGR of 10.4%. In the future, as the
level of intelligence in core downstream scenarios increases, the power amplifier audio chip market is
projected to reach RMB48.2 billion in 2025 and grow to RMB87.0 billion by 2029, at a CAGR of
15.9%.
In recent years, the market size of the global power amplifier audio chip industry has continued to
grow. In terms of total revenue, the global power amplifier audio chip market size has grown from
RMB5.3 billion in 2020 to RMB8.9 billion in 2024, with a CAGR of 13.6% during the period,
according to the F&S report. Driven by technological advancements and the further expansion of
downstream applications, the global power amplifier audio chip industry is expected to reach RMB20.4
billion by 2029, with a CAGR of 18.1%. Among which, driven by the strong demand from the
consumer electronics and intelligent vehicle industries, China’s power amplifier audio chip market is
growing faster than the global market. In terms of total revenue, the power amplifier audio chip market
size in China has grown from RMB2.4 billion in 2020 to RMB4.1 billion in 2024, with a CAGR of
14.9% during the period. Driven by technological advancements and the further expansion of
downstream applications, the market size of China’s power amplifier audio chip industry is expected to
grow steadily to RMB9.9 billion by 2029, with a CAGR of 19.4%.
RISKS AND CHALLENGES
We only met the revenue requirement as set out in Rule 18C.03(4) of the Listing Rules in 2024
following our revenue growth during the Track Record Period. In addition, we recorded net losses since
our inception and expect to continue to incur net losses in the short term after the Track Record Period.
We believe there are certain risks and uncertainties involved in our operations, some of which are
beyond our control. We have categorized these risks and uncertainties into (1) risks relating to our
general operations and industry, (2) risks relating to the research and development and intellectual
property rights of our products, (3) risks relating to our financial condition and need for additional
capital, (4) risks relating to doing business in the jurisdictions where we operate, and (5) risks relating
to the Global Offering.
We are also subject to inventory obsolescence risk. As of October 31, 2025, our inventories
amounted to RMB129.6 million, and our inventory turnover days were 163.4 days for the ten months
ended October 31, 2025. Due to the rapid technological evolution and intense market competition in the
semiconductor industry, if we fail to accurately forecast customer demand or if market conditions
change, we may be exposed to the risk of excess or obsolete inventory. This could result in material
inventory write-downs, which would adversely affect our gross profit margin, liquidity, and financial
condition.
International Sanctions
Based on the facts and information provided by us, our Sanction Counsel is of the view that, as of
the Latest Practicable Date, we have not engaged in any activities that, to our knowledge and based on
our assessment, would constitute a violation of applicable U.S. primary or secondary sanctions laws, or
comparable international sanctions regimes. In particular, we do not operate in, nor maintain direct
customer relationships with parties located in, or affiliated with, comprehensively sanctioned
jurisdictions such as Iran, North Korea, or Russia.
SUMMARY
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See “Business — Legal Proceedings and Compliance — International Sanction” for details.
U.S. Tariffs
We currently do not engage in direct export activities to the U.S. market, and therefore our
products are not subject to U.S. tariffs. Although there are potential knock-on effects from U.S.-China
trade frictions and demand fluctuations in sectors like electric vehicles and semiconductors, to date, we
have not experienced material order cancellations, significant revenue shortfalls, or operational
disruptions due to U.S. tariff policy volatility. Therefore, as of the Latest Practicable Date, the overall
impact of U.S. tariff policies on our business operations and financial performance remains limited and
controllable.
U.S. Outbound Investment Program
On October 28, 2024, the Department of the Treasury issued the Provisions Pertaining to U.S.
Investments in Certain National Security Technologies and Products in Countries of Concern (the
“Final Rule ”). Our products do not meet or exceed the performance parameters specified under Export
Control Classification Number 3A090.a in Supplement No. 1 to 15 C.F.R. Part 774, nor are they
designed for operation at or below 4.5 Kelvin, as described in 31C.F.R. § 850.224(c). Based on the
above information, our Sanction Counsel is of the view that, our chip design business constitutes a
“covered activity” under 31C.F.R. § 850.208 and § 850.217(a), which only triggers “Notifiable
Transactions Requirement” and this does not constitute a prohibited transaction under the Final Rule.
Neither we nor our Sanction Counsel are advising investors on compliance with the Final Rule,
any investor that is uncertain about the Final Rule’s application should consult its own counsel.
See “Risk Factors — Risks Relating to our General Operations and Industry — We may be subject
to the risks associated with international trade policies, geopolitics and trade protection measures,
including imposition of trade restrictions and sanctions, and our reputation, business, results of
operations and financial condition could be adversely affected.” for details.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables set forth summary of our financial information for the Track Record Period,
and should be read together with the consolidated financial statements in the Accountants’ Report set
out in Appendix I to this prospectus, including the accompanying notes and the information set forth in
“Financial Information.” Our consolidated financial information was prepared in accordance with IFRS
Accounting Standards.
Summary of Consolidated Statements of Profit or Loss
The following tables set forth summary of our consolidated statements of profit or loss for the
Track Record Period, and should be read together with the consolidated financial statements in the
Accountants’ Report set out in Appendix I to this prospectus, including the accompanying notes and the
information set forth in “Financial Information.” Our consolidated financial information was prepared
in accordance with the IFRS.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount
%o f
Revenue Amount
%o f
Revenue Amount
%o f
Revenue Amount
%o f
Revenue Amount
%o f
Revenue
(RMB in thousands, except for percentages)
(unaudited)
Revenue .............. 130,327 100.0 150,291 100.0 355,195 100.0 288,832 100.0 280,778 100.0
Cost of sales ............ (120,848) (92.7) (150,415) (100.1) (308,639) (86.9) (250,011) (86.6) (224,721) (80.0)
Gross profit/(loss) ......... 9,479 7.3 (124) (0.1) 46,556 13.1 38,821 13.4 56,057 20.0
Loss before tax ........... (65,899) (50.6) (94,130) (62.6) (56,844) (16.0) (46,876) (16.2) (51,776) (18.4)
Income tax expense ......... (3) (0.0) ————————
Loss for the year .......... (65,902) (50.6) (94,130) (62.6) (56,844) (16.0) (46,876) (16.2) (51,776) (18.4)
SUMMARY
–1 0–


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For details on the accounting treatment of redemption rights of pre-IPO investments, see “—
Share Capital and Total Equity” below and note 26 to the Accountants’ Report set out in Appendix I to
this prospectus. See note 28 to the Accountants’ Report in Appendix I to this prospectus for further
details of the financial impacts.
NON-IFRS MEASURE
To supplement our consolidated financial statements, which are presented in accordance with
IFRSs, we also use adjusted loss (non-IFRS measure) as an additional financial measure, which is not
required by, or presented in accordance with, IFRSs.
We define adjusted loss (non-IFRS measure) as loss, excluding share-based payments and listing
expenses. We have made the following adjustment consistently during the Track Record Period.
 Share-based payments represent the non-cash employee benefit expenses incurred in
connection with our award to key employees. Such expenses in any specific period are not
expected to result in future cash payments.
 Listing expenses represent the costs incurred in connection with our initial public offering
on the Hong Kong Stock Exchange. Such expenses in any specific period are not expected to
result in future cash payments after completion of the listing process.
The following table reconciles our loss for the year/period presented in accordance with IFRSs to
adjusted loss (non-IFRS measure).
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Loss for the
year/period ........ (65,902) (94,130) (56,844) (46,876) (51,776)
Add:
Share-based payments .. 7,824 7,843 7,843 6,536 6,079
Listing expenses ...... ———— 12,529
Adjusted loss
(non-IFRS measure) . (58,078) (86,287) (49,001) (40,340) (33,168)
We believe that the adjusted loss (non-IFRS measure) would provide 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 non-IFRS measure does not have a standardized
meaning prescribed by IFRS Accounting Standards, and our presentation of adjusted loss (non-IFRS
measure) may not be comparable to similarly titled measures presented by other companies. The use of
adjusted loss (non-IFRS measure) has limitations as an analytical tool, and you should not consider
them in isolation from, or as a substitute for an analysis of, our results of operations or financial
condition as reported under IFRS Accounting Standards.
Our revenue increased from 2022 to 2024, primarily driven by (1) the increase in revenue from
sales of our adaptive power control audio chips in 2023, mainly resulting from our market share
expansion strategy through more competitive pricing and a diversified product portfolio, and (2) the
overall business growth in 2024, primarily driven by the increases in sales volume across all product
lines. Our revenue remained relatively stable at RMB288.8 million in the ten months ended October 31,
2024 and RMB280.8 million in the ten months ended October 31, 2025.
Our cost of sales increased by 24.5% from RMB120.8 million in 2022 to RMB150.4 million in
2023, primarily due to an increase in material and processing costs driven by the rapid growth in sales
volume of our audio chip products, partially offset by a decrease in impairment loss of inventories. Our
cost of sales increased significantly from RMB150.4 million in 2023 to RMB308.6 million in 2024,
primarily due to an increase in cost of goods sold, which is consistent with our overall business growth
SUMMARY
–1 1–


--- page 21 ---
in 2024. Our cost of sales decreased by 10.1% from RMB250.0 million for the ten months ended
October 31, 2024 to RMB224.7 million for the ten months ended October 31, 2025, which was
primarily due to the improved economies of scale, reductions in chip size achieved through sustained
research and development and the lowered market procurement cost, driven by intense price
competition in the mature-process node segment.
During the Track Record Period, we primarily generated revenue from the sales of low-power
audio chips and mid/high-power audio chips, and to a much lesser extent, from the sales of haptic
drivers. In 2022, 2023, 2024 and the ten months ended October 31, 2024 and 2025, our revenue was
RMB130.3 million, RMB150.3 million, RMB355.2 million, RMB288.8 million and RMB280.8 million,
respectively. Our revenue increased from 2022 to 2024, primarily driven by (i) the increase in sales of
our adaptive power control audio chip in 2023, mainly resulting from our market share expansion
strategy through more competitive pricing and a diversified product portfolio, and (ii) the overall
business growth in 2024, primarily driven by the increases in sales volume across all product lines.
In 2022, 2024 and the ten months ended October 31, 2024 and 2025, our gross profit was RMB9.5
million, RMB46.6 million, RMB38.8 million and RMB56.1 million, representing gross profit margin of
7.3%, 13.1%, 13.4% and 20.0%, respectively. In 2023, we recorded a gross loss of RMB0.1 million.
This temporary decline was primarily attributable to a strategic initiative to accelerate market share
growth through a more competitive pricing strategy in response to intensifying competition in the
power amplifier audio chip sector, successfully driving a notable increase in sales volume, particularly
for our low-power audio chips.
The fluctuations in gross profit margin across our product lines during the Track Record Period
were primarily driven by a combination of factors including economies of scale, product mix
optimization, and strategic pricing initiatives. The overall upward trend in gross profit margin was
consistent across our key product lines, supported by our expanding market presence and operational
efficiencies.
In 2022, 2023, 2024 and the ten months ended October 31, 2024 and 2025, we incurred net loss of
RMB65.9 million, RMB94.1 million, RMB56.8 million, RMB46.9 million and RMB51.8 million,
respectively. The net loss increased significantly in 2023 primarily due to a strategic initiative that
employed competitive pricing to accelerate market share growth, which temporarily compressed gross
profit. The loss narrowed in 2024 as revenue scaled considerably, allowing the Group to benefit from
economies of scale, a more favorable product mix, and improved operational leverage. This trend of
improving gross profit continued into the ten months ended October 31, 2025. However, net loss for the
ten months ended October 31, 2025 increased, as the result of the increased administrative expenses,
which included one-off listing costs, and higher finance costs associated with business expansion. Our
ongoing investment in research and development also continued to impact profitability during the Track
Record Period.
See “Financial Information—Key Components of Our Consolidated Statements of Profit or Loss”
for detailed discussion of our consolidated statements of profit or loss items during the Track Record
Period.
SUMMARY
–1 2–


--- page 22 ---
Summary of Consolidated Statements of Financial Position
The following table sets forth our consolidated statements of financial position as of the dates
indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Total current assets ............... 280,871 243,012 280,549 289,850
Total current liabilities ............. 57,494 106,800 138,887 163,892
Net current assets ............... 223,377 136,212 141,662 125,958
Total assets less current liabilities .... 300,315 214,886 182,540 138,892
Total non-current assets ............ 76,938 78,674 40,878 12,934
Total non-current liabilities ......... 1,976 3,432 20,667 22,531
Net assets ...................... 298,339 211,454 161,873 116,361
For details on the accounting treatment of redemption rights of pre-IPO investments, see “—
Share Capital and Total Equity” below and note 26 to the Accountants’ Report set out in Appendix I to
this prospectus. See note 28 to the Accountants’ Report in Appendix I to this prospectus for further
details of the financial impacts.
During the Track Record Period, the decline in net assets was primarily attributable to
accumulated net losses incurred over the years. The decrease in net current assets during the Track
Record Period, except for from as of December 31, 2023 to as of December 31, 2024, was driven by
our Company’s expanding revenue scale, which necessitated increased operating expense outlays. The
increase in current liabilities exceeded the growth in current assets during the Track Record Period,
except for from as of December 31, 2023 to as of December 31, 2024, resulting in the reduction of net
current assets. Our net current assets increased from RMB136.2 million as of December 31, 2023 to
RMB141.7 million as of December 31, 2024, primarily due to a rise in inventory, trade receivables, and
prepayments, which outweighed the increase in trade payables. This growth consequently led to a rise
in current liabilities, notably trade payables and short-term bank borrowings, to fund working capital
requirements.
See “Financial Information — Discussion of Certain Balance Sheet Items” for detailed discussion
of our consolidated statements of financial position items during the Track Record Period.
Net current assets decreased from RMB141.7 million as of December 31, 2024 to RMB126.0
million as of October 31, 2025. This decrease was primarily driven by an increase in interest-bearing
bank borrowings to fund working capital requirements for business expansion. A decrease in
non-pledged time deposits, resulting from the reclassification of certain deposits to support operations,
also contributed to the reduction. These factors were partially offset by an increase in pledged time
deposits. The overall change reflects the Group’s strategic use of financing to support its growing
operational scale, leveraging favorable credit terms extended by suppliers, and optimizing its accounts
payable position.
Net assets decreased from RMB298.3 million as of December 31, 2022 to RMB211.5 million as of
December 31, 2023, primarily due to the net loss incurred during the year. The decline in net assets
continued to RMB161.9 million as of December 31, 2024, again driven by the net loss for that year,
partially offset by share-based payments. The net loss for the ten months ended October 31, 2025
further reduced equity, although this was substantially offset by a reorganization of reserves resulting
from our conversion into a joint stock company. The cumulative effect of net losses during the Track
Record Period was the primary driver behind the overall decrease in net assets.
SUMMARY
–1 3–


--- page 23 ---
Summary of Consolidated Statements of Cash Flow
The following table sets forth a summary of our cash flows for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Operating loss before changes in
working capital ............. (48,832) (73,914) (42,594) (33,944) (32,157)
Cash used in operations ......... (106,847) (91,382) (84,634) (54,159) (58,238)
Net cash used in operating activities (105,810) (88,557) (82,738) (52,467) (57,267)
Net cash (used in)/from investing
activities .................. (10,416) (23,415) 19,894 19,975 32,322
Net cash from financing activities ... 204,395 32,556 18,676 4,444 34,435
Cash and cash equivalent at beginning
of the year ................. 92,233 182,899 105,325 105,325 66,075
Effects of exchange rate changes on
cash and cash equivalents ....... 2,497 1,842 4,918 2,553 (2,102)
Cash and cash equivalent at end of
year ..................... 182,899 105,325 66,075 79,830 73,463
Net operating cash outflow persisted during the Track Record Period primarily due to operating
losses incurred as we invested heavily in research and development and market expansion. The outflow
was further amplified by continuous increases in working capital, specifically in trade receivables and
inventories, to support our rapid revenue growth. As of October 31, 2025, the net operating cash
outflow reflected these ongoing investments and the strategic maintenance of higher inventory levels to
meet anticipated demand. We can improve our operating cash flow position by implementing more
stringent credit control procedures to accelerate the collection of trade receivables. Furthermore,
optimizing inventory management through enhanced demand forecasting will help reduce the cash
conversion cycle and release working capital.
As of December 31, 2022, 2023, 2024 and October 31, 2025, we had cash and cash equivalents of
RMB182.9 million, RMB105.3 million, RMB66.1 million and RMB73.5 million, respectively. As of
December 31, 2022, 2023 and 2024 and October 31, 2025, our bank facilities available for use were nil,
RMB65.0 million, RMB90.0 million and RMB170.0 million, respectively. As of the same dates, we had
utilized nil, RMB36.6 million, RMB59.7 million and RMB99.9 million, respectively. We do not
anticipate any changes to the availability of financing to fund our operations in the future.
Taking into account the financial resources available to us, including bank facilities, our Directors
are of the view that, and the Joint Sponsors concur, we have sufficient working capital to meet our
present requirements and for the next 12 months from the date of this prospectus. We do not expect
there would be any material increase in our costs or expenses of unusual nature which would materially
and adversely affect our sufficiency of working capital in the same period.
Our cash burn rate refers to the average monthly (1) net cash used in operating activities, (2)
purchases of items of property, plant and equipment, and (3) purchases of other intangible assets and
(4) lease payments. Our historical cash burn rate was RMB10.3 million, RMB8.0 million, RMB7.3
million, RMB5.7 million and RMB6.0 million in 2022, 2023, 2024 and the ten months ended October
31, 2024 and 2025, respectively, mainly representing our investment in R&D activities. We had cash
and cash equivalents, unutilized bank facilities and current non-pledged time deposits of RMB73.5
million, RMB70.1 million, nil as of October 31, 2025, respectively. Assuming that no proceeds from the
global offering are taken into account, that the average cash burn rate going forward will be RMB6.0
million, similar to the rate level in the ten months ended October 31, 2025, we estimate that our cash
and cash equivalents, unutilized bank facilities and current non-pledged time deposits as of October 31,
2025 will be able to maintain our financial viability for 23.7 months, which means we are expected to
maintain sufficient working capital until October, 2027. We estimate that we will receive net proceeds
SUMMARY
–1 4–


--- page 24 ---
of approximately HK$480.3 million after deducting the underwriting fees and expenses payable by us
in the Global Offering, assuming no Over-allotment Option is exercised and assuming an Offer Price of
HK$40.00 per Offer Share, being the low-point of the indicative Offer Price range in this prospectus, if
we also take into account our intended use of proceeds for future expansion plans, including the
establishment of a new R&D center, potential acquisitions, and additional headcount increase, the
estimated net proceeds from the Listing, 29.97 months, which means we are expected to maintain
sufficient working capital until April, 2028. We will continue to monitor our cash flows from operations
closely and expect to raise our next round of financing, if needed, with a minimum buffer of 12
months. As at the Latest Practicable Date, we have no plan for the next round of financing. See
“Financial Information—Liquidity and Capital Resources—Cash Flows” for detailed discussion of our
cash flows and fluctuations during the Track Record Period.
KEY FINANCIAL RATIOS
The following table set forth our key financial ratios as of the dates or for the periods indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
Current ratio (1) .................. 4.9 2.3 2.0 1.8
Quick ratio (2) ................... 3.8 1.7 1.2 1.0
Gearing ratio (3) .................. 11.8% 36.1% 61.3% 120.1%
(1) The calculation of current ratio is based on current assets divided by current liabilities as of period end.
(2) The calculation of quick ratio is based on current assets less inventories divided by current liabilities as of period end.
(3) The calculation of gearing ratio is based on our debt (being our interest-bearing bank borrowings, lease liabilities and
redemption liabilities) divided by our total equity as of the respective dates and multiplied by 100%.
See “Financial Information—Key Financial Ratios” for details.
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, (1) Mr. Xu controlled 32.76% of the voting power at the
general meetings of our Company, comprising (i) 8.86% beneficially owned by him directly, (ii)
12.62% beneficially owned by Shanghai FourSemi Management, where Mr. Xu acted as its general
partner, (iii) 7.07% beneficially owned by Xiamen FourSemi Management, where Mr. Xu acted as its
general partner, and (iv) 4.21% beneficially owned by Xiamen FourSemi Chuangke, where Mr. Xu
acted as its general partner; and (2) Mr. Liu controlled 2.52% of the voting power at the general
meetings of our Company through the interests beneficially owned by him directly. Pursuant to the
Concert Party Agreement, Mr. Liu irrevocably agreed to, among others, act in concert with Mr. Xu and
follow his instructions in exercising his vote at the general meetings of our Company. Upon the Listing,
Mr. Xu and Mr. Liu will control 31.50% of the voting power at the general meetings of our Company
(assuming the Over-allotment Option is not exercised). Accordingly, Mr. Xu and Mr. Liu, together with
Shanghai FourSemi Management, Xiamen FourSemi Management and Xiamen FourSemi Chuangke will
be our controlling shareholders upon the Listing. See “History and Corporate Structure” and
“Relationship with Our Controlling Shareholders” for details.
PRE-IPO INVESTMENTS
To fund our strategic growth and broaden our shareholder base, we have conducted several rounds
of Pre-IPO Investments since the incorporation of our Company. See “History and Corporate Structure
— Pre-IPO Investments” for details of the principal terms of our Pre-IPO Investments and the identity
and background of our Pre-IPO Investors.
SUMMARY
–1 5–


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APPLICATION FOR LISTING ON THE STOCK EXCHANGE UNDER CHAPTER 18C
We primarily engaged in the design and development of semiconductor chips. Our Directors are of
the view that, and as advised by Frost & Sullivan, all of our products fall within an acceptable sector of
a Specialist Technology Industry as defined under Chapter 18C of the Listing Rules, namely paragraph
(b) of the “Advanced hardware and software—Semiconductors” sector as set forth under Chapter 2.5 of
the Guide, as we are engaged in the research and development, logic and physical design, validation
and verification of semiconductor chips. We have adopted a transaction-based model for the sales of our
products. We have applied to the Listing Committee for the listing of, and permission to deal in, the H
Shares in issue and to be issued pursuant to the Global Offering (including any H Shares which may be
issued pursuant to the exercise of the Over-allotment Option) and the Conversion of Domestic Shares
into H Shares, on the basis that, among other things, we satisfy the requirement under Rule 18C.03 of
the Listing Rules as a Commercial Company (as defined in the Listing Rules) with reference to our
expected market capitalization at the time of Listing, which, based on the Offer Price, exceeds HK$4
billion.
W AIVER AND EXEMPTIONS
See “Waivers from Strict Compliance with the Listing Rules and Exemption from Strict
Compliance with the Companies (Winding Up And Miscellaneous Provisions) Ordinance” for details.
LISTING EXPENSES
We expect to incur a total of approximately RMB52.7 million (HK$59.7 million) of listing
expenses in connection with the Global Offering, representing approximately 11.1% of the gross
proceeds from the Global Offering (assuming an Offer Price of HK$45.0, being the mid-point of the
indicative Offer Price range between HK$40.0 and HK$50.0, and assuming that the Over-allotment
Option is not exercised), including (1) underwriting commissions, SFC transaction levy, Stock
Exchange trading fees and AFRC transaction levy for all Offer Shares of approximately RMB19.1
million (HK$21.6 million), and (2) non-underwriting related expenses of approximately RMB33.6
million (HK$38.1 million), which consist of (i) fees and expenses of legal advisors and accountants of
approximately RMB18.4 million (HK$20.8 million), and (ii) sponsor fee and other fees and expenses of
approximately RMB15.2 million (HK$17.3 million). Approximately RMB30.8 million (HK$34.9
million) is expected to be charged to our consolidated statements of profit or loss, and approximately
RMB21.9 million (HK$24.8 million) is expected to be deducted from equity. The listing expenses
above are the best estimate as of the Latest Practicable Date and for reference only. The actual amount
may differ from this estimate.
OFFERING STATISTICS
All statistics in the following table are based on the fact that (1) the Global Offering has been
completed and 112,000,000 Offer Shares are issued pursuant to the Global Offering and (2) the
Over-allotment Option is not exercised.
Based on an Offer
Price of HK$40.00
per
H Share
Based on an Offer
Price of HK$50.00
per
H Share
Market Capitalization of our Shares (1) ....................
HK$4,480.0
million
HK$5,600.0
million
Unaudited pro forma adjusted net tangible asset per Share (2) .... HK$5.46 HK$6.49
(1) The calculation of market capitalization is based on 112,000,000 Shares expected to be in issue immediately upon
completion of the Global Offering (assuming the Over-allotment Option is not exercised).
(2) For the purpose of the unaudited pro forma financial information, considering the estimated impact related to the
reclassification of redemption liabilities upon Listing, the unaudited pro forma adjusted net tangible assets attributable to
the owners of the Company will be increased by RMB38,281,000, being the carrying amount of the redemption liabilities
SUMMARY
–1 6–


--- page 26 ---
as at October 31, 2025. The redemption rights will automatically terminate upon the Listing and the completion of the
Global Offering. The carrying amount of the redemption liabilities is reclassified to equity upon the termination of the
counterparty’s redemption right. The amount that is reclassified to equity will be the carrying amount of the redemption
liabilities on that date of the Global Offering.
(3) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the Company are arrived on the
basis that 112,000,000 shares were in issue assuming that the Global Offering had been completed on October 31, 2025.
FUTURE PLANS AND USE OF PROCEEDS
We estimate that the net proceeds of the Global Offering, after deducting the estimated
underwriting commissions and other fees and expenses payable by us in connection with the Global
Offering, will be approximately HK$480.3 million, assuming an Offer Price of HK$45.00 per Offer
Share (being the mid-point of the indicative range of the Offer Price of HK$40.00 to HK$50.00 per
Offer Share), without the exercise of the Over-allotment Option.
We currently intend to use the net proceeds from the Global Offering for the purposes and in the
amounts as set out below:
 approximately 46.8% of the net proceeds, or HK$224.6 million, will be used for establishing
a new research and development center to enhance our R&D capabilities and technological
competitiveness for power amplifier audio chips over the next five years;
 approximately 17.8% of the net proceeds, or HK$85.5 million, for procurement of automatic
testing equipment and for construction of an in-house automatic testing verification line, as
well as recruiting supply chain managing engineers;
 approximately 17.3% of the net proceeds, or HK$83.3 million, to pursue strategic
acquisitions and partnerships to enhance our industry integration and strengthen our position
in the power amplifier audio chip industry;
 approximately 8.1% of the net proceeds, or HK$38.9 million, for the marketing and sales of
products; and
 approximately 10.0% of the net proceeds, or HK$48.0 million, for working capital and other
general corporate purposes.
See “Future Plans and Use of Proceeds” for further information relating to our future plans and
use of proceeds from the Global Offering, including the adjustment on the allocation of the proceeds in
the event that the Offer Price is fixed at a higher or lower level compared to the midpoint of the
estimated Offer Price range.
DIVIDENDS
We are a company incorporated under the laws of the PRC. During the Track Record Period, we
did not declare or pay any dividends. Any dividends we pay will be at the discretion of our Directors
and will depend on our future operations and earnings, capital requirements and surplus, general
financial condition, contractual restriction and other factors which our Directors consider relevant. Our
shareholders in a general meeting may approve any declaration of dividends, which must not exceed the
amount recommended by our Board. As advised by our PRC Legal Advisor, no dividend shall be
declared or payable except out of our profits and reserves lawfully available for distribution. Any future
net profit that we make will have to be first applied to make up for our historically accumulated losses,
after which we will be obliged to allocate 10% of our net profit to our statutory common reserve fund
until such fund has reached more than 50% of our registered capital. We have not adopted any dividend
policy and do not have predetermined dividend payout ratio. As of October 31, 2025, our Company did
not have any distributable reserves.
SUMMARY
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BUSINESS SUSTAINABILITY AND PATH TO PROFITABILITY
Since our inception, we have developed a comprehensive portfolio of low-power audio chips,
mid/high-power audio chips, and haptic drivers, enhanced by proprietary algorithms and customized
application solutions to ensure optimal chip performance, which have been widely adopted across
downstream sectors with strong demand. During the Track Record Period, we achieved continuous
revenue growth through successful product development and launch, with our proactive efforts in
product commercialization and market expansion significantly contributing to increased sales volume
and revenue. Our revenue increased from RMB130.3 million in 2022 to RMB150.3 million in 2023, and
further to RMB355.2 million in 2024. Our revenue remained relatively stable at RMB288.8 million for
the ten months ended October 31, 2024 and RMB280.8 million for the ten months ended October 31,
2025.
Recognizing the increasing prevalence of power amplifier audio chips, we have strategically focused
on expanding our sales network and enhancing R&D rather than pursuing immediate profitability, laying a
solid foundation to capture future market opportunities. We have established sales and service teams in
Shanghai, Shenzhen, Beijing, Xi’an, and South Korea to accelerate revenue growth. This multi-center
operational structure enhanced operational efficiency, market penetration and client service efficiency,
driving higher revenue. In addition, we have been continuously expanding our customer base into new
sectors. With respect to low-power audio chips, we evolve from our initial focus on the mobile phone
market to penetrate emerging segments such as tablets, smart watches, smart glasses, portable gaming
devices, action cameras, and beyond. We secured collaborations in emerging consumer electronics
segments. We have completed the supplier onboarding process and begun engagements with an enterprise
in the global consumer drone market and a major global provider of walkie-talkies for business and
industry, and a company in the global panoramic camera market, respectively. Further, through the launch
of mid/high power amplifier audio chips, we have further expanded into the smart display market and
automotive markets. We have commenced supplying to automotive electronics manufacturers and have
secured a significant indicative order totaling RMB37.2 million from the world’s leading producer of
NEVs in 2024, with revenue recognition anticipated in 2026. On the other hand, we also established
multi-product bundling services for our portable power amplifier audio chips, adaptive power control
audio chips, mid/high-power audio chips and haptic drivers to our customers to integrate our products
in their ecosystems. According to the F&S report, China’s power amplifier audio chip market reached
RMB41.6 billion in 2024 and is expected to reach RMB48.2 billion in 2025, and further to RMB87.0
billion by 2029, at a CAGR of 15.9%. See “Business — Business Sustainability and Path to
Profitability” for further details of our measures to improve management of costs and expenses.
IMPACT OF COVID-19
Our Directors are of the view that our business operations and financial performance were
unaffected by the COVID-19 outbreak during the Track Record Period. Our fabless operating model
insulated us from pandemic impacts as we do not manage manufacturing facilities or production
processes. In addition, during the Track Record Period, COVID-19 outbreak has not caused any
material delayed delivery of foundries or provision of services. Taking our primary foundry as an
example, in 2022, 2023 and 2024, we recorded 99.2 days, 99.3 days and 98.1 days, respectively, for the
cycle time from order placement to wafer completion, which was relatively stable.
ONGOING LITIGATION
We are currently defending a patent infringement lawsuit initiated by a competitor in the
semiconductor industry (the “ Litigation ”). The lawsuit concerns the competitor’s invention patent titled
“Open-Loop Charge Pump”. On August 22, 2023, the plaintiff filed a lawsuit with the Shanghai
Intellectual Property Court against our Company, alleging that three of our chip models—FS1512N-M,
FS1512N and FS1512GN—infringe its patent rights. The plaintiff sought a declaration of infringement,
an injunction to cease manufacturing, selling and offering for sale the allegedly infringing products,
monetary damages of RMB10 million, and reimbursement of legal fees and expenses of RMB0.5
SUMMARY
–1 8–


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million. The plaintiff voluntarily withdrew this lawsuit. Because the plaintiff withdrew the case before
any court judgment, it is permitted under PRC law to file a new lawsuit on the same matter. On July
28, 2025, the plaintiff recommenced legal proceedings against our Company. The grounds for the
plaintiff’s claim in the new case remain substantially the same, alleging that the same chip models
infringe its patent ZL201810038898.X and seeking similar relief, including an injunction, monetary
damages of RMB10 million, and reimbursement of legal fees and expenses of RMB0.5 million. The
court has scheduled the first hearing of the new case on April 27, 2026.
As part of our litigation strategy, we filed an invalidation request against the plaintiff’s patent
with the China National Intellectual Property Administration (“ CNIPA”). CNIPA issued a decision
maintaining the patent’s validity. On March 5, 2025, we initiated an administrative litigation before the
Beijing Intellectual Property Court seeking to overturn CNIPA’s decision. On December 24, 2025, the
court served us its administrative judgment, which upheld CNIPA’s decision. On January 7, 2026, we
appealed this first-instance judgment to the Supreme People’s Court.
The three implicated chip models are charge pump chips launched during our early stage and are
not our core products. We do not expect to generate significant future revenue or gross profit from
these products, as they are not core products and their gross margins during the Track Record Period
were relatively low. For 2022, 2023, 2024 and the ten months ended October 31, 2025, revenue
generated from these products amounted to RMB11.4 million, RMB14.6 million, RMB32.0 million and
RMB10.4 million, respectively, representing 8.7%, 9.6%, 9.0% and 3.7% of our total revenue for the
respective periods. Gross profit contribution from these products for the same periods was RMB1.6
million, RMB0.1 million, RMB3.2 million and RMB0.5 million, respectively, representing 7.2%, 1.7%,
6.4% and 1.0% of our total gross profit for the respective periods.
We have obtained an appraisal report issued by a qualified judicial appraisal center, which
concludes that the technical features of our implicated products are neither identical nor equivalent to
those covered by the plaintiff’s patent. Our litigation advisor, Fangda Partners, is of the view that,
based on the evidence currently submitted by the parties and information confirmed by us, they have
reasonable grounds to believe the accused products do not fall within the scope of protection of the
plaintiff’s patent, as material technical differences exist between our products’ technical solutions and
the patented claims, so that the likelihood of our non-infringement defense against the claim is high.
Based on the technical information, our own technical analysis, the conclusions of the appraisal report,
and the advice of our litigation advisor, we believe that the technical solutions of our implicated
products are neither identical nor equivalent to the patented claims, and that we have not infringed the
plaintiff’s intellectual property rights. However, we cannot provide assurance regarding the final
judgment of the court. Based on the claims in the plaintiff’s complaint, the maximum amount we may
be liable for is RMB10.5 million, comprising RMB10.0 million for monetary damage and RMB0.5
million for reasonable expenses. In a worst-case scenario where our defense is unsuccessful, we would
be subject to a permanent injunction preventing the manufacture, sale and offer for sale of the three
specific chip models implicated in the litigation. Given the minimal contribution of these early-stage
products to our total revenue and gross profit, we believe this outcome would not materially affect our
overall business or financial condition.
SHARE CAPITAL AND TOTAL EQUITY
Prior to the Relevant Periods and until August 18, 2022, the Company entered into respective
investment agreements for the subscription of Shares with various pre-IPO Investors for total net cash
proceeds of approximately RMB526,500,000. Of these, as of August 18, 2022, 16,907,470 Shares
issued for total net cash proceeds of approximately RMB526,400,000 (collectively the “ Pre-IPO
Investments ”), carried special rights (“ Special Rights ”) granted by the Company.
Pursuant to the aforementioned agreements, including the investment agreement entered among
the Company, Mr. Xu and the Pre-IPO Investors (including Huzhou Zhuosheng) (the “ Pre-IPO
Investors ”) on August 18, 2022 (the “ Investment Agreement ”) and the supplemental agreement to the
SUMMARY
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Investment Agreement entered among the Company, Mr. Xu and the Pre-IPO Investors (including
Huzhou Zhuosheng) on August 18, 2022 (the “ First Supplemental Agreement ”), the Pre-IPO Investors
were granted Special Rights which included redemption rights, anti-dilution rights, information rights,
co-sale rights, right of first refusal and liquidation preferences granted by the Company, as well as
redemption rights granted by Mr. Xu.
Prior to their termination, only certain information rights and director nomination rights among
the Special Rights granted by the Company had been exercised in the ordinary course for governance
and information purposes. There was no exercise of any redemption or other financial Special Rights
granted by the Company throughout the Relevant Periods.
On April 30, 2025, the Company and the Pre-IPO Investors except for Huzhou Zhuosheng Equity
Investment Partnership (Limited Partnership) (“ Huzhou Zhuosheng ”) subsequently entered into a
supplemental agreement (the “ Second Supplemental Agreement ”), pursuant to which the redemption
rights granted by the Company to such Pre-IPO Investors (excluding Huzhou Zhuosheng) were
irrevocably terminated and became void ab initio. Prior to the execution of the Second Supplemental
Agreement, only certain information rights and director nomination rights under the Investment
Agreement and the First Supplemental Agreement had been exercised by the Pre-IPO Investors.
Subsequently, on June 27, 2025, the Company, Mr. Xu and the Pre-IPO Investors (excluding Huzhou
Zhuosheng) entered into a further supplemental agreement (the “ Third Supplemental Agreement ”),
pursuant to which (i) all other remaining Special Rights granted by the Company to such Pre-IPO
Investors (including pre-emptive rights, anti-dilution rights, liquidation preferences and other rights as
listed above) were terminated, effective on the date immediately preceding the Listing, and (ii) the
redemption rights granted by Mr. Xu to such Pre-IPO Investors were terminated, effective on the date
preceding the first submission of the listing application. Taking into account the legal and regulatory
framework of the Company’s jurisdiction and the governing law of the supplemental agreements, the
directors considered that it is appropriate to present the Pre-IPO Investments except for Huzhou
Zhuosheng as equity.
For the details of redemption liabilities recognized related to Huzhou Zhuosheng, please refer to
Note 26 to the Historical Financial Information.
Had the Special Rights granted by the Company to the Pre-IPO Investors been accounted for as
financial liabilities measured at present value of the redemption amount prior to entering into the
supplemental agreements, (i) the redemption financial liabilities, total current liabilities, net current
liabilities and net liabilities would have been:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Redemption financial liabilities ........... 697,684 811,676 876,794
Total current liabilities ................. 724,403 885,232 979,770
Net current liabilities .................. (443,532) (642,220) (699,221)
Net liabilities ........................ (368,570) (566,978) (679,010)
(ii) the changes in the carrying amounts of redemption liabilities, the net loss for the year, basic and
dilutive loss per share would have been:
For the year ended December 31,
For the ten months ended
October 31,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Changes in the carrying amounts of
redemption liabilities ............. (44,575) (59,220) (65,118) (53,914) (34,537)
Total net loss ..................... (109,702) (150,881) (119,295) (98,582) (83,943)
Loss per share
Basic and diluted (RMB) ............ (1.27) (1.51) (1.19) (0.99) (0.84)
SUMMARY
–2 0–


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See note 28 to the Accountants’ Report in Appendix I to this prospectus for further details of the
financial impacts.
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Our Directors confirm that, up to the date of this prospectus, there has been no material adverse
change in our financial or trading position since October 31, 2025 (being the date on which the latest
audited consolidated financial information of our Group was prepared) and there is no event since
October 31, 2025 which would materially affect the information shown in our consolidated financial
statements included in the Accountants’ Report in Appendix I to this prospectus.
Based on the unaudited preliminary financial information as of and for the year ended December
31, 2025 (the “ 2025 Preliminary Financial Information ”), (1) our revenue remained relatively stable,
increasing slightly from RMB355.2 million in 2024 to RMB365.7 million in 2025. This stability
primarily reflects a 60.8% increase in revenue from haptic drivers to RMB8.6 million, offset by a
marginal decline in our mid/high-power audio chip revenue; (2) our gross profit increased significantly
by 63.2% from RMB46.6 million in 2024 to RMB76.0 million in 2025, and our gross profit margin
expanded from 13.1% to 20.8%. These improvements primarily resulted from enhanced economies of
scale, ongoing product iterations that reduced chip size and cost, effective cost control measures that
lowered raw material prices and processing fees, and a favorable shift in product mix toward
higher-margin products; (3) our other income and gains decreased by 51.3% from RMB9.6 million in
2024 to RMB4.7 million in 2025, primarily due to a net foreign exchange gain of RMB4.8 million
recorded in 2024 compared to no such gain in 2025 as a result of exchange rate fluctuations; (4) our
administrative expenses increased significantly from RMB19.7 million in 2024 to RMB42.3 million in
2025, primarily driven by higher listing-related expenses, an increase in employee benefit expenses, and
additional professional service fees relating to our shareholding restructuring. As a result of the
foregoing, our loss for the year increased by 4.1% from RMB56.8 million in 2024 to RMB59.2 million
in 2025. See “Appendix IIB — Unaudited Preliminary Financial Information for the Year Ended
December 31, 2025” for details.
Subsequent to the Track Record Period, we have continued to make progress across our product
lines. In our low-power audio chip portfolio, we successfully launched and commercialized the
FS1977U series, which is currently being shipped primarily to a major player in the global action
camera market. In addition, we launched our 15V high-voltage audio amplifier chip, the FS1986U
series, which is now shipping to a well-known brand in China’s smartphone and tablet market. We also
introduced the 12V FS1985U-S series, which has completed supplier onboarding process with a
consumer electronics company and is currently in order negotiations. Furthermore, we are currently
exploring new applications for our audio chips in the AI toy segment with a global provider of wireless
communication modules and AI solutions.
For our mid/high-power audio chips, we launched the FS2106E series in early 2026 and have
initiated technical validation with a major TV brand and an audio equipment manufacturer. We have
also completed the tape-out of additional models, including the FS2125N and FS2128E, enriching our
mid-power product portfolio and expanding our potential application scenarios. In our haptic driver
product line, the FS3002N series was successfully launched and commercialized at the end of 2025,
generating over RMB4.5 million in revenue as of January 31, 2026. In the automotive-grade segment,
our FS5024E audio chip successfully entered mass production and was commercialized with NEV
manufacturers from late 2025 into early 2026. This product generated RMB0.5 million in revenue for
2025, and we hold purchase orders of RMB5.0 million for this series as of February 28, 2026. Finally,
in January 2026, we achieved a key milestone with the successful tape-out of our FS70 series SAR
sensor chip, which is expected to be formally launched in the second quarter of 2026.
SUMMARY
–2 1–


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In this prospectus, unless the context otherwise requires, the following terms and expressions
have the meanings set forth below.
“Accountants’ Report” the accountants’ report for Track Record Period prepared by
Ernst & Young, the text of which is set out in Appendix I to
this prospectus
“affiliate” any other person, directly or indirectly, controlling or
controlled by or under direct or indirect common control with
such specified person
“AFRC” Accounting and Financial Reporting Council
“Articles of Association” or
“Articles”
the articles of association of our Company, as amended, which
shall become effective on the Listing Date, a summary of
which is set out in Appendix III to this prospectus
“associate” has the meaning ascribed thereto under the Listing Rules
“Audit Committee” audit committee of the Board
“Board” or “Board of Directors” the Board of Directors of our Company
“Business Day” or “business day” any day (other than a Saturday, Sunday or public holiday) on
which banks in Hong Kong are generally open for normal
banking business to the public
“Capital Market
Intermediary(ies)” or “capital
market intermediary(ies)” or
“CMI(s)”
the capital market intermediaries identified in “Directors and
Parties Involved in the Global Offering”
“CCASS” the Central Clearing and Settlement System established and
operated by HKSCC
“close associate(s)” has the meaning ascribed thereto under the Listing Rules
“China” or “PRC” the People’s Republic of China, excluding, for the purpose of
this prospectus only, Hong Kong, Macau and Taiwan province,
China
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified from
time to time
“Companies (Winding Up and
Miscellaneous Provisions)
Ordinance”
the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as
amended, supplemented or otherwise modified from time to
time
“Company” or “our Company” Shanghai FourSemi Semiconductor Co., Ltd. ( ɪऎ௩Ԣ໢̒ኬ
ʮ̡ ) (formerly known as Xiamen FourSemi
Electronics Company Limited (ʮ̡ ) and
Shanghai FourSemi Semiconductor Company Limited ( ɪऎ௩
ʮ̡ )), incorporated under the PRC laws on
May 17, 2016 as a limited liability company and converted
into a joint stock company under the PRC laws on June 12,
2025
DEFINITIONS
–2 2–


--- page 32 ---
“Company Law” or “PRC Company
Law”
Company Law of the People’s Republic of China ( ʕശɛ͏΍
جas amended, supplemented or otherwise modified
from time to time
“Concert Party Agreement” the acting-in-concert agreement dated June 25, 2019 entered
into by, among others, Mr. Xu and Mr. Liu, pursuant to which
Mr. Liu has irrevocably agreed to act in concert with Mr. Xu
and follow his decisions in exercising his vote at the general
meetings of our Company for a term ending upon the expiry
of one year after the Listing
“connected person(s)” has the meaning ascribed thereto under the Listing Rules
“connected transaction(s)” has the meaning ascribed thereto under the Listing Rules
“controlling shareholder(s)” or
“Controlling Shareholder(s)”
has the meaning ascribed thereto under the Listing Rules, and
in the context of our Company, refers to Mr. Xu, Mr. Liu,
Shanghai FourSemi Management, Xiamen FourSemi
Management and Xiamen FourSemi Chuangke
“core connected person(s)” has the meaning ascribed thereto under the Listing Rules
“Conversion of Domestic Shares into
H Shares”
the conversion of 98,889,800 Domestic Shares into H Shares
on a one-for-one basis upon the completion of the Global
Offering. Such conversion of Domestic Shares into H Shares
had been approved by the CSRC on February 6, 2026 and an
application for H Shares to be listed on the Stock Exchange
has been made to the Listing Committee
“CSDC” China Securities Depository and Clearing Corporation Limited
(ப΂ʮ̡ )
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ၍
ึ)
“Director(s)” the director(s) of our Company
“Domestic Shares” ordinary Shares in the share capital of our Company with a
nominal value of RMB1.00 each, which are subscribed for and
paid up in RMB and are unlisted Shares not currently listed or
traded on any stock exchange
“Exchange Participant(s)” a person: (a) who, in accordance with the Listing Rules, may
trade on or through the Stock Exchange; and (b) whose name
is entered in a list, register or roll kept by the Stock Exchange
as a person who may trade on or through the Stock Exchange
“Extreme Conditions” Extreme conditions caused by a super typhoon as announced
by the government of Hong Kong
“F&S report” an independent market research report, commissioned by us
and prepared by Frost & Sullivan
“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
DEFINITIONS
–2 3–


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“Fourier Technology” Fourier Technology Limited (ʮ̡ ), a limited
company incorporated under the laws of Hong Kong on
November 18, 2016 and a wholly-owned subsidiary of our
Company
“Frost & Sullivan” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., an
independent industry consultant commissioned by us to
prepare the F&S report
“General Rules of HKSCC” the General Rules of HKSCC as may be amended or modified
from time to time and where the context so permits, shall
include the HKSCC Operational Procedures
“Global Offering” the Hong Kong Public Offering and the International Offering
“Group,” “our Group,”
“we” or “us”
our Company and its subsidiaries (or our Company and any
one or more of its subsidiaries, as the context may require)
“Guide” Guide for New Listing Applicants issued by the Stock
Exchange in December 2023, as amended from time to time
“H Share(s)” overseas-listed foreign shares in the share capital of our
Company with nominal value of RMB1.00 each, which are to
be subscribed for and traded in HK dollars and are to be listed
on the Stock Exchange
“H Share Registrar” Computershare Hong Kong Investor Services Limited
“HK$” or “HK dollars” Hong Kong dollars, the lawful currency of Hong Kong
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC EIPO” the application for the Hong Kong Offer Shares to be issued in
the name of HKSCC Nominees and deposited directly into
CCASS to be credited to your designated HKSCC Participant’s
stock account through causing HKSCC Nominees to apply on
your behalf, including by instructing your broker or custodian
who is a HKSCC Participant to give electronic application
instructions via HKSCC’s FINI System to apply for the Hong
Kong Offer Shares on your behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary of
HKSCC
“HKSCC Operational Procedures” the operational procedures of HKSCC, containing the
practices, procedures and administrative or other requirements
relating to HKSCC’s services and the operation and functions
of 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
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the PRC
DEFINITIONS
–2 4–


--- page 34 ---
“Hong Kong Offer Shares” the 600,000 H Shares initially offered by our Company for
subscription at the Offer Price pursuant to the Hong Kong
Public Offering (subject to reallocation as described in
“Structure of the Global Offering”)
“Hong Kong Public Offering” the offer of the Hong Kong Offer Shares for subscription by
the public in Hong Kong (subject to reallocation as described
in the section headed “Structure of the Global Offering”) at
the Offer Price (plus brokerage, SFC transaction levies, Stock
Exchange trading fees and AFRC transaction levy), on and
subject to the terms and conditions described in this
prospectus and as further described in “Structure of the Global
Offering—The Hong Kong Public Offering”
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listed in
“Underwriting—Hong Kong Underwriters” in this prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated March 20, 2026 relating to
the Hong Kong Public Offering and entered into by and
among our Company, our Controlling Shareholders, the Joint
Sponsors, the Joint Sponsor-OCs and the Hong Kong
Underwriters, as further described in “Underwriting—
Underwriting Arrangements and Expenses”
“IFRS Accounting Standards” International Financial Reporting Standards, amendments, and
interpretations, as issued from time to time by the
International Accounting Standard Board
“independent third party(ies)” or “
Independent Third Party(ies)”
person(s) or company(ies), who/which, to the best of our
Directors’ knowledge, information and belief, having made all
reasonable enquiries, is/are not connected person(s) of our
Company within the meaning ascribed thereto under the
Listing Rules
“International Offer Shares” the 11,400,000 H Shares initially offered by our Company for
subscription pursuant to the International Offering together
with, where relevant, any additional H Shares which may be
issued by our Company pursuant to the exercise of the
Over-allotment Option (subject to reallocation as described in
“Structure of the Global Offering”)
“International Offering” the offer of the International Offer Shares by the International
Underwriters at the Offer Price to persons outside the United
States in offshore transactions in accordance with Regulation
S, as further described in “Structure of the Global Offering”
“International Sanction
Law”
all applicable laws and regulations, as amended and
supplemented from time to time, related to economic
sanctions, export controls, trade embargoes and wider
prohibitions and restrictions on international trade and
investment related activities, including those adopted,
administered and enforced by the U.S. Government, the
European Union and its member states, the United Nations or
the government of Australia
“International Underwriters” the group of international underwriters that is expected to
enter into the International Underwriting Agreement to
underwrite the International Offering
DEFINITIONS
–2 5–


--- page 35 ---
“International Underwriting
Agreement”
the underwriting agreement expected to be entered into on or
around the Price Determination Date by, among others, our
Company, the Overall Coordinators and the International
Underwriters in respect of the International Offering, as
further described in “Underwriting—Underwriting
Arrangements and Expenses—The International Offering”
“Joint Bookrunners” the joint bookrunners as named in “Directors and Parties
Involved in the Global Offering”
“Joint Global Coordinators” the joint global coordinators as named in “Directors and
Parties Involved in the Global Offering”
“Joint Lead Managers” the joint lead managers as named in “Directors and Parties
Involved in the Global Offering”
“Joint Sponsors” Guotai Junan Capital Limited and Orient Capital (Hong Kong)
Limited
“Joint Sponsor-OCs” or
“Joint Sponsor-Overall
Coordinators”
Guotai Junan Securities (Hong Kong) Limited and Orient
Securities (Hong Kong) Limited
“Latest Practicable Date” March 13, 2026, being the latest practicable date for the
purpose of ascertaining certain information contained in this
prospectus prior to its publication
“Listing” listing of the H Shares on the Main Board of the Stock
Exchange
“Listing Committee” the Listing Committee of the Stock Exchange
“Listing Date” the date, expected to be on or around Tuesday, March 31,
2026, on which H Shares of our Company are listed and from
which dealings therein are permitted to take place on the
Stock Exchange
“Listing Rules” the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (as amended from time to
time)
“Main Board” the stock market (excluding the option market) operated by the
Stock Exchange which is independent from and operated in
parallel with the GEM of the Stock Exchange
“Mr. Liu” Mr. Liu Baoliang (Ԅ), our co-founder, executive
Director, vice president, director of algorithm applications and
a member of our Controlling Shareholders
“Mr. Xu” Mr. Xu Xiaolin (؍our founder, chairman of the Board,
executive Director, president and a member of our Controlling
Shareholders
“Nomination Committee” the nomination committee of our Board
DEFINITIONS
–2 6–


--- page 36 ---
“Offer Price” the final price per H Share in Hong Kong dollars (exclusive of
brokerage fee of 1%, SFC transaction levy of 0.0027%, Stock
Exchange trading fee of 0.00565% and AFRC transaction levy
of 0.00015%) of not less than HK$40.00 and expected to be
not more than HK$50.00, at which Hong Kong Offer Shares
are to be subscribed, to be determined in the manner further
described in “Structure of the Global Offering—Pricing and
Allocation”
“Offer Share(s)” the Hong Kong Offer Shares and the International Offer
Shares, together with, where relevant, any additional H Shares
which may be issued by our Company pursuant to the exercise
of the Over-allotment Option
“Over-allotment Option” the option expected to be granted by our Company to the
International Underwriters, exercisable by the Overall
Coordinators (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 1,800,000 additional H Shares at
the Offer Price to, cover over-allocations in the International
Offering, if any, further details of which are described in
“Structure of the Global Offering”
“Overall Coordinators” the overall coordinators as named in “Directors and Parties
Involved in the Global Offering”
“Pathfinder SII(s)” has the meaning ascribed to it in Chapter 2.5 of the Guide
“PRC Legal Advisor” Commerce & Finance Law Offices, being the legal advisor of
our Company as to the PRC laws
“Pre-IPO Investor(s)” the investor(s) from whom our Company obtained several
rounds of investments, details of which are set out in the
section headed “History and Corporate Structure—Pre-IPO
Investments” in this prospectus
“Price Determination Agreement” the agreement to be entered into by the Overall Coordinators
(for themselves and on behalf of the Underwriters) and our
Company on the Price Determination Date to record and fix
the Offer Price
“Price Determination Date” the date, expected to be on or before Friday, March 27, 2026
(Hong Kong time) on which the Offer Price is determined, or
such later time as the Overall Coordinators (for themselves
and on behalf of the Underwriters) and our Company may
agree, but in any event no later than 12:00 noon on Friday,
March 27, 2026
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration and Appraisal
Committee”
the remuneration and appraisal committee of our Board
“Reporting Accountants” Ernst & Young
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“Sanction Counsel” Commerce & Finance Law Offices LLP
DEFINITIONS
–2 7–


--- page 37 ---
“SFC” the Securities and Futures Commission of Hong Kong
“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or otherwise
modified from time to time
“Shanghai FourSemi” Shanghai FourSemi Electronics Technology Company Limited
(ʮ̡ ), a limited liability company
incorporated under the laws of the PRC on June 17, 2016 and
a wholly-owned subsidiary of our Company
“Shanghai FourSemi Management” Shanghai FourSemi Management Consulting Partnership
(Limited Partnership) ( ɪऎ௩Ԣ໢၍ଣፔ༔ΥྫΆุ (Υ
ྫ)), a limited partnership established under the laws of the
PRC on October 22, 2021 and a member of our Controlling
Shareholders
“Share(s)” ordinary shares in the capital of our Company with a nominal
value of RMB1.00 each, comprising Domestic Shares and H
Shares
“Shareholder(s)” holder(s) of the Share(s)
“Shenzhen FourSemi” Shenzhen FourSemi Electronics Company Limited ( ଉέ̹௩
ʮ̡ ), a limited liability company incorporated
under the laws of the PRC on November 1, 2023 and a
wholly-owned subsidiary of our Company
“Sophisticated Independent
Investor(s)”
has the meaning ascribed thereto under the Listing Rules
“Specialist Technology” has the meaning ascribed thereto under the Listing Rules
“Stabilizing Manager” Guotai Junan Securities (Hong Kong) Limited
“Stock Exchange” The Stock Exchange of Hong Kong Limited, a wholly-owned
subsidiary of Hong Kong Exchanges and Clearing Limited
“subsidiary(ies)” has the meaning ascribed thereto under the Listing Rules
“substantial shareholder(s)” has the meaning ascribed thereto under the Listing Rules
“Takeovers Code” the Code on Takeovers and Mergers issued by the SFC, as
amended, supplemented or otherwise modified from time to
time
“Track Record Period” the three years ended December 31, 2024 and ten months
ended October 31, 2025
“Transfer Pricing Advisor” SHINEWING Tax and Business Advisory Limited
“U.S.” or “United States” the United States of America, its territories, its possessions
and all areas subject to its jurisdiction
“U.S. Securities Act” the United States Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
DEFINITIONS
–2 8–


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“Underwriting Agreements” the Hong Kong Underwriting Agreement and the International
Underwriting Agreement
“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 applications online
through the designated website of the White Form eIPO
Service Provider at www.eipo.com.hk
“White Form eIPO Service Provider” Computershare Hong Kong Investor Services Limited
“Xiamen FourSemi Chuangke” Xiamen FourSemi Chuangke Enterprise Management
Consulting Partnership (Limited Partnership) (߅
Άุ၍ଣፔ༔ΥྫΆุ (Υྫ)), a limited partnership
established under the laws of the PRC on December 9, 2020
and a member of our Controlling Shareholders
“Xiamen FourSemi Management” Xiamen FourSemi Enterprise Management Consulting
Partnership (Limited Partnership) (௩Ԣ໢Άุ၍ଣፔ༔
ΥྫΆุ(Υྫ)), a limited partnership established under
the laws of the PRC on December 29, 2017 and a member of
our Controlling Shareholders
“%” percent
Certain amounts and percentage figures included in this prospectus have been subject to
rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation
of the figures preceding them. Any discrepancies in any table or chart between the total shown and the
sum of the amounts listed are due to rounding.
For ease of reference, the names of the PRC established companies or entities, laws or
regulations have been included in this prospectus in both the Chinese and English languages; in the
event of any inconsistency, the Chinese versions shall prevail.
DEFINITIONS
–2 9–


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This glossary contains certain technical terms used in this prospectus in connection with our
Company and our business. Such terms and their meanings may not correspond to standard industry
definitions or usage.
“90° audio channel flipping” a signal processing technique that swaps the left and right
audio channels while applying a 90-degree phase shift to one
channel. This method is used to enhance stereo imaging,
correct phase misalignment, or create spatial audio effects by
manipulating the perception of sound direction and width
“Acoustic cavity modeling” the computational simulation of sound wave behavior within
an enclosed space, used to optimize speaker placement, audio
clarity, and resonance in audio devices
“Acoustic Vehicle Alerting System”
or “A V AS”
a safety feature in electric and hybrid vehicles that generates
artificial sounds at low speeds to alert pedestrians and cyclists
of the vehicle’s presence, ensuring compliance with regulatory
standards
“Adaptive low-voltage algorithm” An intelligent power management system that dynamically
optimizes audio amplifier performance under low-voltage
conditions (e.g., battery drain) by adjusting gain, bias, and
efficiency parameters in real time
“ADC” analog-to-digital converter, a device used to convert
continuous analog signals into discrete digital signals
“AEC-Q100” a critical reliability testing standard for integrated circuits
used in automotive applications, ensuring performance under
extreme temperatures, vibrations, and other harsh conditions
“AGC” automatic gain control, a feedback-based circuit or algorithm
that dynamically adjusts an audio amplifier’s gain to maintain
a consistent output level despite varying input signal strengths
“AIoT” artificial intelligence internet of things, the integration of
artificial intelligence (AI) with Internet of Things (IoT)
devices, enabling audio systems to process data locally, learn
user preferences, and adapt functionality in real time
“AI PC audio codec” a specialized audio encoder/decoder chip with integrated
artificial intelligence capabilities, designed to enhance
real-time voice processing, noise suppression, and adaptive
sound optimization in AI-powered personal computers
“Amplifier protection control circuits
and algorithms”
systems that monitor and adjust amplifier parameters in real
time to prevent damage and optimize performance
“Analog amplifier” an electronic component used to increase the amplitude of
analog signals without altering their waveform characteristics
“Analog circuit” a circuit used to process continuously variable signals through
components such as resistors, capacitors, and transistors
GLOSSARY
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“ASIC” application-specific integrated circuit, a custom-designed
microchip optimized for a particular function, such as audio
processing in smart devices, offering superior performance,
power efficiency, and miniaturization compared to
general-purpose processors
“ASP” average selling price
“ATE” automatic test equipment, a specialized system used to
validate and calibrate audio amplifier chips during
manufacturing, ensuring performance meets specifications for
parameters
“Audible artifacts” unintended, unnatural sounds introduced during audio signal
processing or amplification, degrading perceived quality
“Audiophile-grade” a designation for audio equipment or components engineered
to achieve the highest measurable and perceptible sound
quality, prioritizing fidelity, dynamic range, and minimal
distortion for discerning listeners
“Automated Test Management
System” or “TMS”
a software platform designed to streamline and standardize the
testing of audio hardware and firmware, enabling efficient test
case execution, defect tracking, and reporting throughout the
product development lifecycle
“Automotive-compliant ATE
engineering platforms”
specialized automated test equipment (ATE) systems designed
to validate and qualify audio components under automotive
reliability and performance standards, such as AEC-Q100 and
ISO 16750
“BCD” Bipolar-CMOS-DMOS process, a semiconductor
manufacturing technology that integrates bipolar, CMOS, and
DMOS transistor types on a single chip. This process enables
the design of power management, analog, and digital circuits
on the same die, supporting high-voltage and high-power
applications
“Boost” the action of an inductive circuit raising the input voltage to a
higher level by storing energy in an inductor and then
releasing it to add to the input voltage
“BPF algorithm” band-pass filter algorithm, a digital or analog processing
technique that isolates a specific frequency range in an audio
signal by attenuating frequencies outside the target band
“Chip packaging” the process of enclosing a semiconductor chip in a protective
housing that facilitates electrical connections and heat
dissipation
“Class AB” a type of analog audio amplifier that combines the low
distortion of Class-A and the efficiency of Class-B designs,
widely used in consumer and professional audio systems
GLOSSARY
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“Class D” a high-efficiency audio amplifier that uses Pulse Width
Modulation to convert analog signals into digital-like pulses,
minimizing power loss and heat generation
“DAC” digital-to-analog, a device used to convert digital signals into
analog signals
“dB” decibel, a logarithmic unit measuring sound intensity or signal
power levels
“DC-DC converter” an electronic circuit or device that converts a direct current
(DC) input voltage to a different DC output voltage level,
either stepping it up (boost), stepping it down (buck), or
inverting it, while regulating power delivery for efficient
energy transfer
“DFM/DFT” design for manufacturability/testability, a set of methodologies
integrated into semiconductor design to optimize audio chips
for high-yield production (DFM) and efficient post-silicon
validation (DFT), reducing costs and time-to-market
“Die size” the physical dimensions (typically in mm
2) of a single
semiconductor chip before packaging, directly impacting cost,
performance, and power efficiency in audio ICs and other
electronics
“Digital circuit” an electronic circuit that processes discrete binary signals
(representing logical 1 or 0) to perform arithmetic, logic, or
control operations, typically implemented using transistors,
gates, and other semiconductor components
“Digital input interface” a hardware or protocol standard that enables digital audio data
transmission between components (e.g., microcontrollers,
DSPs, or DACs), ensuring signal integrity and synchronization
in modern audio systems
“Driver” an electromechanical transducer that converts electrical signals
into sound waves
“DSP” digital signal processor, a specialized microprocessor
optimized for real-time mathematical manipulation of audio
signals, enabling advanced features like immersive sound
effects in consumer, automotive, and professional audio
systems
“Dual-input flexibility” a feature in audio amplifiers that supports two independent
input sources (e.g., analog and digital, or two analog signals),
allowing seamless switching or mixing between them without
external components
“Dynamic power rail switching” an advanced power management technique in audio amplifiers
that automatically switches between multiple voltage rails to
optimize efficiency and performance based on real-time signal
demands
GLOSSARY
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“Dynamic range” the operational range between the maximum undistorted
output signal and the noise floor of an audio system
“Dynamic range enhancement” a signal processing technology that actively monitors and
adjusts the output characteristics of an audio system in
real-time to enhance the operational range between the noise
floor and the maximum undistorted output signal
“EDA” electronic design automation, a suite of software tools used to
design, simulate, and validate audio amplifier circuits and
integrated circuits (ICs) before manufacturing
“Electromagnetic interference
mitigation”
techniques or design practices used to reduce or eliminate
disruptions on electronic systems caused by unwanted
electromagnetic signals
“EMC” electromagnetic compatibility, the ability of an electronic
device to function properly in its electromagnetic environment
without causing or suffering from interference
“EMI” electromagnetic interference, undesired electrical noise
generated by or affecting audio amplifier circuits, disrupting
signal integrity or causing audible/regulatory issues
“Envelope Tracking Boost” a technique used to improve the power efficiency of Audio
Power Amplifiers by dynamically adjusting the supply voltage
of the audio amplifier according to the signal’s envelope
“Equalizer” an audio processing tool that adjusts the balance of frequency
components in a sound signal, enabling precise tonal shaping
for music playback, recording, and real-time communication
systems
“f0 testing and tracking” a testing process based on I/V sensing and ohm’s law,
calculate the speaker’s resonance frequency (f0), and adaptive
attenuate the signal level at this f0
“Fabless” a business model where the entity focuses on R&D and design
of ICs and outsources manufacturing to external parties
“Feedforward modeling” a control system technique that anticipates disturbances or
changes in input to improve output accuracy
“Frequency response curve” a graphical representation showing how a device responds to
different sound frequencies within a specified range
“Haptic feedback” or “tactile
feedback”
physical responses generated by devices to simulate touch or
enhance user interaction
“Hardware-accelerated neural
processing engines”
specialized silicon blocks designed to execute AI/ML audio
algorithms with ultra-low latency and high energy efficiency,
enabling real-time voice, music, and acoustic processing in
edge devices
“High-efficiency PWM modulation” pulse-width modulation techniques designed to maximize
power efficiency in audio amplifiers
GLOSSARY
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“High-fidelity audio reproduction and
capture”
technologies that ensure accurate and detailed sound
reproduction or recording
“Highly Accelerated Stress Test
equipment” or “HAST equipment”
specialized environmental chambers that rapidly age electronic
components by simulating extreme humidity, temperature, and
pressure conditions, ensuring reliability for automotive,
aerospace, and consumer audio applications
“High-Temperature Operating Life”
or “HTOL”
a reliability test that subjects semiconductor devices to
elevated temperatures and continuous electrical operation to
simulate years of use in a compressed timeframe, ensuring
robustness for automotive, industrial, and consumer
applications
“Hz” hertz, a measurement of frequency
“I
2C” Inter-Integrated Circuit, a synchronous, multi-master/
multi-slave, single-ended, serial communication bus, widely
used for attaching lower-speed peripheral integrated circuits
“I/V” current-to-voltage conversion, a process used in analog
circuits to translate current signals into voltage signals for
further processing
“IC” or “integrated circuit” or “chip” a set of electronic circuits on one small plate of semiconductor
material
“Impedance variations” fluctuations in the opposition to alternating current (AC)
within an audio circuit, caused by factors like frequency
shifts, component tolerances, or temperature changes, directly
impacting signal integrity and power transfer efficiency
“Integration density” a measure of how many functional components are packed
into a given area of a semiconductor die or audio system,
directly impacting performance, power efficiency, and
miniaturization
“Intelligent haptic algorithm” a software algorithm that simulates tactile feedback in
response to user interactions
“Intelligent multi-level boost control” an advanced power management system in audio amplifiers
that dynamically selects between multiple voltage rails to
optimize efficiency and performance based on real-time signal
demands
“I/V sense” speaker current sensing and speaker voltage sensing
“ISO 9001” an international standard for quality management systems
“JEDEC JESD22” a Joint Electron Device Engineering Council (JEDEC)
standard for electrostatic discharge (ESD) testing of
semiconductor devices
GLOSSARY
–3 4–


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“Kaiser window” a mathematical function used in digital signal processing to
design finite impulse response filters with controllable
trade-offs between stopband attenuation and transition
bandwidth
“LDO” low dropout regulator, a type of linear voltage regulator that
can operate with a very small voltage difference between its
input and output
“Load impedance” the opposition that a circuit presents to the flow of alternating
current
“LRA drive” linear resonant actuator, a control system for haptic feedback
motors that uses audio-like waveforms to generate precise
vibrations in sync with sound, commonly integrated into
amplifiers for multimedia devices
“mA” a unit of electrical current equal to 1/1000 of an ampere, used
to measure small power flows in audio amplifier circuits
“Membrane excursion” the measurable movement of a membrane (typically in
microphones or speakers) in response to sound waves or
electrical signals, directly affecting acoustic performance,
sensitivity, and distortion in audio devices
“Mixed-signal chip” a semiconductor device that processes both analog and digital
signals within a single integrated circuit
“Mixing consoles” electronic devices used to combine, route, and adjust audio
signals in recording or live sound environments
“NEV” new energy vehicle
“Node” a point in an electrical or electronic circuit where two or more
components are connected, serving as a junction for signal
distribution, power delivery, or measurement
“Noise Gate” an audio processor that reduces or eliminates sounds below a
set threshold, acting as a dynamic range controller
“Non-destructive speaker diagnostics” a feature in audio amplifiers that monitors speaker health in
real time without interrupting playback or risking damage,
using low-level test signals and impedance analysis
“OCP” over-current protection, a crucial safety mechanism designed
to limit or interrupt excessive current flow, preventing damage
to the semiconductor devices
“OSAT” outsourced assembly and test, the practice of hiring a
third-party provider to handle the assembly and testing of its
semiconductors after fabrication
“OTP” one-time programmable, a semiconductor memory device that
can be programmed only once and it cannot be changed or
reused after its initial programming
GLOSSARY
–3 5–


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“Output voltage ripple” unwanted small alternating current fluctuations superimposed
on the DC power supply of an audio amplifier, caused by
switching noise, rectification artifacts, or load changes
“OVP” over-voltage protection, a sub-system designed to protect
electronic circuits from damage caused by excessive voltage
“PA” power amplifier
“Portable power amplifier audio chip” a chip designed to detect the speaker’s current and voltage in
real time to monitor and control the power output and the
speaker itself more accurately
“Peripheral circuit design” the engineering of auxiliary electronic components and
interfaces that support core audio ICs, ensuring optimal signal
integrity, power delivery, and system-level functionality
“PLL” phase-locked loops, a feedback control system that
synchronizes an output signal with an input signal’s frequency
and phase
“PPM” parts per million, a unit that measures precision or tolerance
“Pulse-width modulation signal” or
“PWM”
a digital signal used to encode analog information by varying
the width of pulses in a carrier wave
“R&D” research and development
“RoHS” Restriction of Hazardous Substances, a European Union
directive restricting the use of certain hazardous substances in
electrical and electronic equipment
“Scanning Electron Microscopes” or
“SEM”
high-resolution imaging and analytical tools that use a focused
electron beam to visualize and characterize the microstructure
of audio components at nanometer scales, essential for failure
analysis, process validation, and material science in audio
hardware development
“Scene-adaptive algorithms” real-time signal processing techniques that dynamically adjust
audio parameters based on environmental inputs, user
behavior, or device context, enabling optimized sound quality
across diverse listening scenarios
“Software driver” a specialized program that enables communication between an
operating system (OS) and audio hardware components,
translating high-level commands into low-level control signals
to ensure proper functionality and performance optimization
“SoundWire audio codec” a digital audio interface and codec standard developed by Intel
and MIPI Alliance, designed to streamline audio data
transmission between host processors and peripheral devices
in mobile, automotive, and IoT systems
GLOSSARY
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“Adaptive power control” the process where the audio chip analyzes the customer’s
acoustic cavity structure through modeling and uses
algorithms to dynamically adjust input and output signals in
real time to match the acoustic environment
“Speaker Driver Genius” or “SDG” a protective mechanism or circuit designed to prevent damage
to speaker drivers from electrical, thermal, or mechanical
overload, ensuring longevity and consistent audio performance
“Speaker resonance frequency” the natural vibrational frequency of a speaker’s cone/assembly,
where it moves most freely with minimal electrical input. A
critical parameter for amplifier design and speaker protection
“Specific Absorption Rate” or “SAR” a measure of the rate at which the human body absorbs
radiofrequency energy from wireless devices, expressed in
watts per kilogram (W/kg)
“SoC” system on chips, an integrated circuit that consolidates all core
components of an electronic system onto a single silicon die,
enabling compact, power-efficient designs for audio devices
“Spread-spectrum technology” a technique used in Class-D audio amplifiers to reduce EMI
by dynamically modulating the switching frequency,
preventing concentrated noise at any single frequency
“Studio interfaces” hardware devices facilitating audio signal routing, conversion,
and processing in professional recording environments
“Tape-out” the final stage of IC design where the completed layout is sent
to a semiconductor foundry for fabrication
“Telematics Boxes “ or “T-BOX” vehicle-mounted embedded systems that integrate
telecommunications (4G/5G, GNSS) and informatics (data
processing), serving as the hub for connected car services,
including audio streaming, emergency calls, and over-the-air
(OTA) updates for infotainment systems
“Transmission Electron Microscopes”
or “TEM”
advanced imaging and analytical instruments that use a
high-energy electron beam transmitted through ultra-thin
samples to achieve atomic-scale resolution, critical for
analyzing the microstructure, defects, and material properties
of audio components
“Ultra-low-power circuits” electronic circuits specifically engineered to minimize energy
consumption while maintaining required functionality
“Unidirectional open-loop principles” a control system approach where an audio signal or process
flows in one direction without feedback correction, prioritizing
simplicity, low latency, and deterministic behavior
“UVLO conditions” under voltage lock out, the state where an electronic system,
such as an audio amplifier chip, detects an undervoltage
situation and may shut down or limit its operation to prevent
damage
GLOSSARY
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“UVP” under-voltage protection, a sub-system designed to protect
electrical circuits from damage caused by low voltage levels
“V oice coil” a critical component in dynamic loudspeakers and
microphones, consisting of a wire coil suspended in a
magnetic field that converts electrical audio signals into
mechanical motion (in speakers) or vice versa (in
microphones)
“VR/AR” virtual reality and augmented reality, immersive technologies
used to create immersive digital experiences by overlaying or
replacing real-world environments with virtual elements
“W” watt, the standard unit of power, quantifying the rate of energy
transfer or conversion in audio systems
“Wafer fabrication” the semiconductor manufacturing process producing silicon
wafers for integrated circuits
“Wafer foundry” a facility that manufactures semiconductor wafers for fabless
IC design companies
“Wide frequency response” the ability of an audio system to accurately reproduce a broad
range of frequencies
“µV “ a unit of electrical potential equal to one-millionth of a volt
(10
−6 V), critical for quantifying low-noise performance in
high-fidelity audio systems, sensor interfaces, and precision
analog circuits
GLOSSARY
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We have included in this prospectus forward-looking statements. Statements that are not
historical facts, including statements about our intentions, beliefs, expectations or predictions for the
future, are forward-looking statements.
This prospectus contains forward-looking statements that are, by their nature, subject to
significant risks and uncertainties, including the risk factors described in this prospectus.
Forward-looking statements can be identified by words such as “may”, “will”, “should”, “would”,
“could”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “continue”, “seek”, “estimate”, or the
negative of these terms or other comparable terminology. Examples of forward-looking statements
include, but are not limited to, statements we make regarding our projections, business strategy and
development activities as well as other capital spending, financing sources, the effects of regulation,
expectations concerning future operations, margins, profitability and competition. The foregoing is not
an exclusive list of all forward-looking statements we make.
Forward-looking statements are based on our current expectations and assumptions regarding our
business, the economy and other future conditions. We give no assurance that these expectations and
assumptions will prove to have been correct. Because forward-looking statements relate to the future,
they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to
predict. Our results may differ materially from those contemplated by the forward-looking statements.
They are neither statements of historical fact nor guarantees or assurances of future performance. We
caution you therefore against placing undue reliance on any of these forward-looking statements.
Important factors that could cause actual results to differ materially from those in the forward-looking
statements include regional, national or global political, economic, business, competitive, market and
regulatory conditions and the following:
 our business prospects;
 our business strategies and plans to achieve these strategies;
 future developments, trends and conditions in and competitive environment for the industries
and markets in which we operate;
 general economic, political and business conditions in locations where we operate;
 our financial condition and performance;
 our capital expenditure plans;
 our dividend policy;
 changes to the regulatory environment, policies, operating conditions of and general outlook
in the industries and markets in which we operate;
 our expectations with respect to our ability to acquire and maintain regulatory licenses or
permits;
 the extent and nature of, and potential for, future development of our business;
 the actions of and developments affecting our competitors;
 the actions of and developments affecting our major customers and suppliers; and
 certain statements in the sections headed “Risk Factors”, “Industry Overview”, “Regulatory
Overview”, “Business”, “Financial Information” and “Future Plans and Use of Proceeds”
with respect to trends in interest rates, foreign exchange rates, prices, volumes, operations,
margins, risk management and overall market trends.
Any forward-looking statement made by us in this prospectus speaks only as of the date on which
it is made. Factors or events that could cause our actual results to differ may emerge from time to time,
and it is not possible for us to predict all of them. Subject to the requirements of applicable laws, rules
and regulations, we undertake no obligation to update any forward-looking statement, whether as a
result of new information, future developments or otherwise. All forward-looking statements contained
in this prospectus are qualified by reference to this cautionary statement.
FORW ARD-LOOKING STATEMENTS
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An investment in our H Shares may involve significant risks. Potential investors should read
and consider carefully all the information set out in this prospectus, and, in particular , should
evaluate the following risks and uncertainties before deciding to make any investment in our H
Shares. You should pay particular attention to the fact that we primarily conduct our operations in
China, the legal and regulatory environment of which in some respects may differ from that in Hong
Kong. Any of the risks and uncertainties listed below could have a material adverse effect on our
business, results of operations, financial condition or on the trading price of our H Shares, and
could cause you to lose all or part of your investment. The risks and uncertainties identified below
are not the only ones we face. Additional risks and uncertainties not presently known to us or that
we currently deem immaterial may also affect our business and results of operations.
These factors are contingencies that may or may not occur , and we are not in a position to
express a view on the likelihood of any such contingency occurring. The information given is as of
the Latest Practicable Date unless otherwise stated, will not be updated after the date hereof, and is
subject to the cautionary statements in “Forward-looking Statements.”
We only met the revenue requirement as set out in Rule 18C.03(4) of the Listing Rules in 2024
following our revenue growth during the Track Record Period. In addition, we recorded net losses since
our inception and expect to continue to incur net losses in the short term after the Track Record Period.
We believe there are certain risks and uncertainties involved in our operations, some of which are
beyond our control. We have categorized these risks and uncertainties into (1) risks relating to our
general operations and industry, (2) risks relating to the research and development and intellectual
property rights of our products, (3) risks relating to our financial condition and need for additional
capital, (4) risks relating to doing business in the jurisdictions where we operate, and (5) risks relating
to the Global Offering.
Additional risks and uncertainties that are presently not known to us or not expressed or implied
below or that we currently deem immaterial could also harm our business, results of operations and
financial condition. You should consider our business and prospects in light of the challenges we face,
including those discussed in this section.
RISKS RELATING TO OUR GENERAL OPERATIONS AND INDUSTRY
The industries that we operate in are characterized by constant changes. If we fail to stay abreast
of technology innovation and continuously advance our products to meet the expectations and
needs of our customers and end users, our business, results of operations and financial condition
may be materially and adversely affected.
The industries that we operate in are characterized by constant changes, including rapid
technological evolution, frequent introductions of new products, shifts in customer demands, and the
constant emergence of new industry standards and practices. Specifically, our products are used in a
variety of application sectors and downstream industries. Technological advancement and new industry
standards in these downstream industries may affect the application requirements of our end customers
and their products, and we must develop new products or refine our technologies to match the different
or additional requirements of our end customers. As such, our success will depend, in part, on our
ability to respond to these changes in a cost-effective and timely manner. To remain competitive, we
must continue to stay abreast of the evolving industry trends and rapid technological development. Our
business growth also relies on our ability to identify and anticipate the evolving expectations and needs
of customers and end users in a timely manner, and develop and provide satisfying products
accordingly.
We have invested, and will continue to invest, significant resources to enhance our products and
technologies. Nevertheless, given the fast pace with which our industry has been and will continue to
be developed, we may not be able to timely upgrade our products and technologies in an efficient and
RISK FACTORS
–4 0–


--- page 50 ---
cost-effective manner, or at all. We also may not be able to leverage new technologies effectively or
adapt our offerings to meet customer needs or emerging industry standards, and our technology
approach might not align with our future development plans or even become obsolete if we are unable
to adapt in a cost-effective and timely manner to changing market conditions, whether for technical,
legal, financial or other reasons. In addition, leading industry players continually upgrade their product
portfolios, and we may not be able to match their achievements effectively. Any of the circumstances
would render our existing technologies or products obsolete or unattractive and result in customer
dissatisfaction. As a result, our business, results of operations, financial condition and prospects may be
materially and adversely affected.
Our historical growth may not be indicative of our future performance, and we have a limited
operating history and commercialization record, which makes it difficult to evaluate our business
and prospects.
We have achieved rapid growth during the Track Record Period. Our revenue increased from
RMB130.3 million for 2022 to RMB150.3 million for 2023 and further to RMB355.2 million for 2024.
However, despite our commercialization efforts in recent years, our operations since inception have
primarily focused on research and development activities. We commenced operations in 2016, and we
have a limited operating history compared to some of our competitors. As a result of our limited
operating history, and particularly in light of the rapidly evolving nature of the power amplifier audio
chip industry, it may be difficult to evaluate our current business and reliably predict our future
performance. Our historical results may not provide a meaningful basis for evaluating our business,
results of operations, financial condition and prospects, and we may encounter unforeseen expenses,
difficulties, complications, delays and other known or unknown factors, and may not be able to achieve
promising results in future periods.
In particular, we have a limited track record in the commercialization and sales and marketing of
our products. Our ability to successfully commercialize our future products may involve more inherent
risks, take longer and cost more than it would have if we were a company with a longer track record in
commercialization. In particular, the commercialization of new products requires additional resources,
which may require us to attract, motivate and retain qualified and professional employees who have,
among other things, adequate technological knowledge to communicate effectively with industry
stakeholders, as well as experience in sales and marketing. Due to our limited track record in the
commercialization of our products, there can be no assurance that the sales results of our products will
meet our expectation and forecast, that third parties will purchase and deploy our products, or that we
will be able to fully maintain quality control over our products, which, individually or collectively,
would materially and adversely affect the commercialization of our products.
We are subject to customer concentration risks.
We generated a considerable portion of our revenue from a relatively small number of major
customers during the Track Record Period. Revenue generated from our top five customers of each
period during the Track Record Period accounted for 93.0%, 78.6%, 83.0% and 88.2% of our total
revenue for the same periods, respectively, and revenue generated from our largest customer accounted
for 32.7%, 23.7%, 30.3% and 30.5% of our total revenue for the same periods, respectively. Our
concentration on a few major customers may expose us to the risks of substantial losses if such major
customers significantly reduce orders to us, or stop engaging in business with us at all. Furthermore, we
cannot assure you that there will not be any fluctuation in the transaction amount or dispute between
our major customers and us, or that we will be able to maintain business relationships with our existing
customers. We also cannot assure you that our major customers will continue to generate significant
revenue for us in the future. In the event that the existing major customers cease to engage us for our
products and solutions, and we are unable to expand our customer base and find new customers with
similar attributable revenue within a reasonable period of time or at all, our business and prospects may
RISK FACTORS
–4 1–


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be adversely affected. In addition, if any of such customers default or delay on their payment or
settlement of our trade and bills receivables, our liquidity, financial condition and results of operations
may be adversely affected.
We are exposed to supplier concentration risk due to our reliance on certain major suppliers.
Under our fabless business model, our business operations depend on the continuous service of
certain suppliers, mainly including the suppliers of wafer production, chip packaging and chip testing
services. Purchases from our five largest suppliers in each period during the Track Record Period
accounted for 89.1%, 91.9%, 93.9% and 93.5 of our total purchase amount in the same periods,
respectively. Purchases from our largest supplier in each period during the Track Record Period
accounted for 31.5%, 62.0%, 52.7% and 33.7% of our total purchase amount in the same periods,
respectively. See “Business—Suppliers—Major Suppliers” for more details.
Our reliance on these major suppliers subjects us to the concentration and counterparty risk from
these suppliers. We set up our supply chain in China, South Korea and Japan, but we cannot assure you
that we will be able to maintain our relationships with our major suppliers in the future. If the supply
of wafers or packaging and testing services is disrupted or delayed, we may fail to find replacements
with similar supply capacity on comparable commercial terms within a reasonable period of time, or at
all. To the extent we are unable to manage these risks, our ability to timely supply competitive products
will be harmed, our costs will increase, and our business, results of operations and financial condition
will be adversely affected. Moreover, we cannot guarantee that our major suppliers will not have a
change of business scope or business model or will continue to maintain their market position and
reputation. Any material adverse change to the operation, financial performance, or financial condition
of our major suppliers may result in material adverse impact on their business with us.
Because of the complex proprietary nature of our products, if there was a disaster or other
business disruption at any of our foundry and packaging and testing services partners’ facilities,
procurement of and transition to new partners would take a significant period of time to complete and
would likely adversely affect our inventory, business, results of operations and financial condition.
Further, we are vulnerable to the risk that our current wafer foundry and packaging and testing services
partners may be unable to meet the demand for our products or cease operations altogether. Moreover,
any shortage in the raw materials used by our wafer foundry and packaging and testing services
partners may result in shortage in their supply of our products and delay in their packaging and testing
process. Therefore, we are vulnerable to the risk that our current wafer foundry and packaging and
testing services partners may be unable to meet our demand.
In addition, our ability to receive sufficient supplies of our products could be adversely affected
by events such as natural disasters, including earthquakes, drought and typhoons, and geopolitical
challenges in locations where our suppliers operate. Our ability to receive sufficient supplies of our
products could also be adversely affected by international trade policies, geopolitics and trade
protection measures, including imposition of trade restrictions and sanctions. Moreover, increased
regulation or heightened societal and industrial expectations regarding responsible sourcing practices
could increase our compliance costs. Any failure to comply with such regulations or meet such
expectations as a result of misconduct by our suppliers could result in negative publicity that adversely
affects our reputation. Given that we do not directly control the procurement or employment practices
of our wafer foundry and packaging and testing services partners, we could be subject to financial or
reputational risks as a result of their conducts.
The industry in which we operate is highly competitive. If we fail to compete against other market
players, our business, results of operations and financial condition may be materially and
adversely affected.
The power amplifier audio chip industry in which we operate is highly competitive. Some of our
existing players have a longer operating history, more financial and other corporate resources, more
sophisticated technological capabilities, more robust customer base and greater bargaining power than
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us. Such competitors may develop and launch more attractive products, adapt to downstream demands
or incorporate advanced technologies at a faster pace than us. We may not be able to iterate and
advance our products rapidly enough, and we may fall behind competitors who could offer more
advanced technologies or possess superior product capabilities. As such, we may not be able to respond
as quickly and effectively to new opportunities, technologies, industry standards, customer demand or
regulatory requirements as such competitors. In addition, in the event that these competitors further
lower the prices of their products similar to ours, due to their ability to achieve further cost savings,
changes in market conditions or other reasons, we cannot assure you that we can match their pricing
strategies in a timely manner, if at all, which could render our products less competitive in the market.
We also face competition from new entrants who may offer more competitive products than ours.
Such new entrants may increase industry competition and adversely impact the sales, price, and profit
margins of our products and our market share. Further, we may be required to make substantial
additional investments in research, development, marketing and sales, recruiting and retaining talents,
and acquiring technologies complementary to, or necessary for, our current and future products in order
to respond to such potential competitions, and we cannot assure you that such measures will be
effective.
If we are unable to compete successfully, or if competing successfully requires us to take costly
actions in response to the actions of our competitors, our business, results of operations and financial
condition may be materially and adversely affected.
The size of our addressable markets and the demand for our products may not increase as rapidly
as we anticipate due to a variety of factors, which may materially and adversely affect our
business, results of operations and financial condition.
The power amplifier audio chip industry has been developing rapidly. The future market size of
the power amplifier audio chip industry and the demand for relevant products may, however, be
difficult to anticipate since it depends on a number of variables, most of which are beyond our control.
We cannot assure you that the size of our addressable markets and the demand for our products will
continue to grow as anticipated, if at all. For instance, the future market size may depend on the growth
in the application of such products in various use cases, the changes in the demands of downstream
sectors and technology evolvements. If our products fail to achieve widespread acceptance in any of the
downstream sectors, or if customer demand for our products declines or alters due to weakening
economic conditions, shifts in consumer preferences, technical challenges, enhanced regulations, or the
emergence of alternative technologies or products, our business, results of operations and financial
condition will be materially and adversely affected. We may also not be able to adjust our inventory
level in response to the decline in the demand of our downstream markets and the price of our products
may be adversely affected.
Factors that adversely affect the industries and sectors that our customers operate in may
adversely affect our business, financial condition and results of operations.
Our products are offered to customers across several key industries and sectors, such as consumer
electronics and electronic vehicles, which are incorporated as part of their offerings to their own
customers. Therefore, factors that adversely affect these industries and sectors or the end customer base
could also materially and adversely affect our business, financial condition, results of operations and
prospects. These factors include, among others:
 a decline in demand for, or negative perception of, or publicity about, products of these
industries;
 any operational challenges, decreasing growth, financial difficulties, market share loss, or
reputational harm to the customers that use our products;
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 regulatory restrictions, trade disputes, industry-specific quotas, tariffs, non-tariff barriers and
taxes that may affect the value chain of such customers;
 the reduction or elimination of preferential tax treatments, economic incentives or other
favorable policies for these companies; and
 a downturn in economic conditions in major countries and regions that our customers
operate their business in.
Our business is primarily based in China and is susceptible to any policy changes in China
affecting the power amplifier audio chip industry which may materially and adversely affect our
business.
During the Track Record Period, most of our business operations were based in China and a
majority of our revenue was derived from our sales in China. As such, we are dependent on policies
affecting the power amplifier audio chip industry in China. In recent years, the PRC government has
implemented policies or policy changes to stimulate growth in the power amplifier audio chip industry.
Many power amplifier audio chip companies, including us, have leveraged such favorable policies. Our
success, continuous growth and prospects depend and will continue to depend on policies favorable to
the power amplifier audio chip industry in the foreseeable future. However, we cannot assure you that
the PRC government will implement additional favorable policies to, or maintain the policies currently
in effect with regards to the power amplifier audio chip industry that benefit us. As a result, if such
policies change or terminate in the future, our business, financial condition, results of operations and
future business growth could be materially and adversely affected.
If we fail to attract new customers and/or retain existing customers, our business, financial
conditions and results of operation may be adversely affected.
Our customers usually purchase our products on a case-by-case or project-by-project basis. Given
such practice, there is no assurance that our customers will make repurchases for our products
frequently or at all. There is also no assurance that the industry will be able to continuously attract new
customers to support revenue growth as it depends on a number of factors, including but not limited to
the level of acceptance by customers, the rate of expansion of use cases, and the changing customer
preferences and demands. As such, if we fail to attract new customers or retain existing customers, our
business, results of operations and financial conditions may be adversely affected.
Increases in material and processing costs of our products would adversely affect our business,
results of operations and financial condition.
Significant changes in the markets in which our suppliers purchase materials, components and
supplies for the production of our products may adversely affect our profitability. We may in the future
experience increases in the material and processing costs of our products due to potential fluctuations in
the global semiconductor industry and inflationary pressures. Given the competitive nature and pressure
of the market in which we operate, we may not be able to pass on the cost increase to our customers by
increasing the price of our products. Therefore, any significant increase in the cost of our products may
have an adverse impact on our gross margin, business, results of operations and financial condition. In
addition, our products may have different margin profiles depending on the amount, number, type of
components as well as customized solutions that we deliver according to diverse customer demands. If
we fail to maintain our products mix or maintain our gross margin and operating margin, our business,
results of operations and financial condition would be adversely affected.
If we cannot price our products and solutions effectively, our business, results of operations and
financial condition may be adversely affected.
We may not be able to price our products and solutions effectively. We consider a number of
factors in determining the pricing of our products, including costs such as the price of raw materials,
gross margin, market conditions, competitive landscape, the market positioning of our brand,
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procurement amount and relationship with specific customers. Our pricing is, as a result, affected by
the degree of market competition, our relatively bargaining power with relevant customers and our
commercialization strategies. We may not always be able to offer our existing and new products at the
optimal prices, which may result in them not being profitable or not gaining market share. As our
competitors introduce new products and solutions that compete with ours, we may be unable to attract
new customers at the same price or based on the same pricing models as we have used historically, or
even cause us to lower our price to gain or maintain our market share. We may also price certain
products and solutions in a manner that reduces our profitability, in order to attract certain customers.
For example, we have recorded a gross loss of RMB0.1 million in 2023, primarily attributable to our
strategic initiative to accelerate market share growth through a more competitive pricing strategy.
Moreover, as we launch new products from time to time, our ability to effectively price new products is
subject to uncertainties. If we cannot price our products effectively in the long term, our business,
results of operations and financial condition may be materially and adversely affected.
We are subject to inventory obsolescence risk.
Our inventories were RMB65.1 million, RMB65.5 million, RMB111.9 million and RMB129.6
million as of December 31, 2022, 2023, 2024 and October 31, 2025, respectively. For the same years,
our inventory turnover days were 119.3 days, 158.5 days, 104.9 days and 163.4 days, respectively. We
may not be able to maintain proper inventory levels, especially as we further expanded our business.
We from time to time may adjust our inventory levels based on our internal forecasts of customer
demand. If our forecast demand is higher than actual demand, we may be exposed to increased
inventory risks due to the accumulation of excess inventory. Excess inventory may increase our
inventory holding costs, risk of inventory obsolescence or write-offs. Conversely, if our forecast
demand is lower than actual demand, we may not be able to maintain an adequate inventory level and
may lose sales and market share to our competitors. Therefore, our business, financial condition and
results of operations may be materially and adversely affected.
If we are unable to ensure the manufacturing or delivery of high quality products on schedule and
on an adequate scale to address our customer demand, our business and results of operations may
be materially and adversely affected.
As we operate under the fabless model, our business operations are concentrated on the R&D and
design of chips while outsourcing wafer fabrication to trusted third-party partners. Similar to other
players that operate under the fabless model, our ability to continually and timely arrange for the
manufacturing and delivery of high quality products meeting the market demand is critical to our
viability, performance and prospects.
We may face difficulties meeting our delivery requirements to customers due to a variety of
factors, many of which are related to the supply chain or market demand that are generally beyond our
control. Failure to fulfill customers’ requirements and quality control problems that occur in the
manufacturing process of our suppliers could prevent us from meeting the stipulated delivery deadline.
For example, a decline in yield rates would adversely affect our third-party partners’ production
efficiency and product quality. If any of our third-party partners’ production facilities experiences
interruptions, delays or disruptions in supplying products, our ability to deliver products to customers
would be impeded. Further, if our third-party partners’ production facilities or suppliers experience any
difficulties or shortages of raw materials, or if our suppliers are otherwise unable or unwilling to
continue to supply in required volumes or at all, our supply may be disrupted, and we may be required
to seek alternate sources of supply. The process of seeking replacements would be highly
time-consuming and costly and we cannot assure you that we can locate new suppliers on reasonable or
acceptable commercial terms, or at all. In addition, we may also experience delays in shipments caused
by our third party logistics service providers. Moreover, surges in market demand could arise from time
to time, and we may not be able to arrange for manufacturing and delivery capacity to efficiently
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address such demand. Any such issues could have an immediate and material adverse effect on our
ability to fulfill orders and consummate sales, damage our reputation and brand, and affect our
business, results of operations and financial condition.
We may not be able to fully maintain quality control over our products.
The quality of our products depends on the effectiveness of our quality control and quality
assurance protocol. However, our quality control and quality assurance protocol may not be effective in
preventing and resolving deviations from our quality standards. Any failure to execute our quality
control and quality assurance protocol could render our products unsuitable for use or adversely impact
our market reputation and relationship with business partners.
We have little control over the quality of our products or services provided by our suppliers. We
cannot assure you that the products manufactured by our wafer foundry partners or services provided by
our packaging and testing service providers are safe and free of defects or can meet the relevant quality
standards. We depend on the quality control procedures of our suppliers. In the event of any quality
issues, we could be subject to complaints and product liability claims and we may not be able to seek
indemnification from our suppliers. If we are involved in legal proceedings against our suppliers, such
proceedings may be time-consuming and costly regardless of the outcome. Any such issues may
materially and adversely affect our business, results of operations and financial condition.
If we experience any deterioration in the quality of our products, we will incur higher costs
associated with returns, exchanges and warranties. We may also be required by law to adopt new or
amend existing return, exchange and warranty policies from time to time, subject us to additional costs
and expenses which we may not recoup through increased revenue. We also cannot assure you that our
return, exchange and warranty policy will not be misused by our customers or other third parties. If we
revise these policies to reduce our costs and expenses, our customers maybe dissatisfied, which may
result in loss of existing customers or failure to acquire new users at a desirable pace, which may
materially and adversely affect our results of operations.
Our products may contain defects and we may be subject to product liability claims, which may
incur costs and negatively affect our reputation and business operations.
Products within our industry, such as the ones we develop, are complex and may contain errors,
defects, vulnerabilities or other issues that are difficult to detect and correct, particularly when first
introduced or when new versions or enhancements are released. Despite the verification and testing
procedures in place, our products may contain serious errors, defects, vulnerabilities or other issues
which we are unable to successfully correct in a timely manner or at all. Some errors or defects in our
products may only be discovered after they have been tested, commercialized and deployed by our end
customers. Under these circumstances, we may incur additional remedial costs to recall, repair or
replace and additional development costs to redesign our products. Furthermore, because we are subject
to warranty and indemnification provisions based on certain of our agreements with our customers, we
may be subject to claims or threats of claims by our customers for their financial loss related to defects
in our products. Any such claims would be time-consuming and costly for us to defend and divert our
management attention, thereby adversely affecting our business, financial condition and results of
operations. These customers may terminate the business relationship with us altogether and as a result,
our results of operations may be adversely affected. These disputes, proceedings and deterioration of
customer relationship may generate negative publicity concerning us and adversely impact our business.
If we cannot offer high quality customer support, our reputation and business may be negatively
affected.
Our warranty term is typically 24 months, generally in line with the industry norm, according to
the F&S report. We maintain proactive communication with our customers after sales and diligently
collaborate with them to resolve any quality concerns. As we continue to grow our operations and
support our customer base, we need to provide efficient customer support that meets our customers’
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needs at scale. We may not be able to recruit or retain sufficient qualified support personnel with
experiences in supporting customers of our products and solutions. As a result, we may be unable to
respond quickly enough to accommodate short-term increases in customer demand for technical support
or maintenance assistance. We also may be unable to modify the future scope and delivery of our
technical support to compete with changes in the technical services provided by our competitors. If we
experience increased customer demand for support and maintenance, we may face increased costs that
may harm our results of operations. If we are unable to provide efficient customer maintenance and
support, our business may be harmed.
We depend on the continued services and contributions of our founders, senior management and
other key employees, including senior R&D personnel and skilled engineers.
Our future performance depends on the continued services and contributions of our founders,
senior management and other key employees, to oversee and execute our business plans, identify and
pursue new opportunities and perform effective product design and R&D. We rely on our experienced
senior management team to oversee and conduct our business operations, including maintenance of our
relationships with key business partners, compliance with relevant laws and regulations and facilitation
of the commercialization and production of our products. Any loss of the services of or changes in the
positions of our key personnel could significantly delay or prevent us from achieving our strategic
business objectives, and adversely affect our business, financial condition and operating results. Hiring
and integrating suitable replacements into our team also requires significant amount of time, training
and resources, and may impact our existing corporate culture. Our future success depends, to a
significant extent, on our ability to attract, train and retain qualified personnel, particularly skilled
engineers. However, we cannot assure you that we will be able to develop or retain qualified personnel
that we will need in order to achieve our strategic objectives. If we fail to respond in a timely manner
to the loss of service of or changes in the positions of our key personnel, our business, financial
condition and results of operations may be adversely affected.
If our distributors are not able to operate successfully or we fail to maintain good relationships
with such distributors, our business, financial condition and results of operations could be
adversely affected.
Our revenue from sales to distributors accounted for 96.1%, 86.2%, 91.4%, 92.3% and 85.2% of
our total revenue for 2022, 2023, 2024 and the ten months ended October 31, 2024 and 2025,
respectively. We expect that distributorship will remain an important component of our sales network.
The loss of our distributors, or reduced orders from them, could adversely affect our access to end
customers and our sales volume and revenue. Moreover, our distributors may not be able to market and
sell our products successfully or operate their own business effectively. For example, our distributors
may not be able to maintain good relationship with the end customers or carry out marketing and sales
activities in a satisfactory manner. In addition, if the sales volumes of our products to end customers
are not desirable, our distributors may not place new orders with us, or they may reduce orders or
request discounts on the purchase price, and eventually, they may not renew the distribution agreement
with us. If our distributors fail to operate successfully, either as a result of their own reasons or with
respect to our products, our ability to effectively sell our products could be negatively affected.
As we believe that distributorship is an important component of our sales network, any of the
following events could cause fluctuations or declines in our revenue and could have an adverse effect
on our business, results of operations and financial condition:
 reduction, delay or cancelation of orders from one or more of our distributors;
 failure to renew agreements and maintain relationships with our existing distributors;
 failure to establish relationships with new distributors on favorable or even standard terms;
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 inability to timely identify and appoint additional or replacement distributors upon the loss
of one or more of our distributors.
In addition, we cannot assure you that the expansion of our distributor network will continue to be
successful or will generate revenue as expected. The cost of any consolidation or further expansion of
our distributor network may exceed the revenue generated from these efforts.
We have limited control over our distributors and our distributor management may not be as
effective as we anticipate, which may adversely affect our business and reputation.
While we have implemented a series of internal control procedures and other measures to regulate
our distributors, including through our distributorship agreements with them, our control over
distributors is limited, and we cannot assure you that we can successfully manage our distributors or
they can fully discharge their responsibilities. We may fail to detect incidents of misconduct or
non-compliance on the part of our distributors that violate the terms of our distributorship agreements
or applicable laws and regulations in a timely manner, or at all. Misconducts and violations may occur
in the form of unauthorized misrepresentation to our end customers, misappropriation of third-party
intellectual property and other proprietary rights and bribery or other unlawful payments during the
course of their distribution. Such incidents by any of our distributors could tarnish our brand, disrupt
our sales and damage our relationship with such distributors and end customers. These and similar
actions could also negatively affect our corporate and product image, result in further loss of customers
and decline in sales, or even incur liabilities and claims against us. Moreover, if any of our distributors
sell the same products in overlapping markets, this may result in cannibalization or even competition
among these distributors, which reduces the efficiency of such distribution channels.
Our distributors generally do not need our specific authorization to engage sub-distributors. We
cannot assure you that if our distributors engage any sub-distributors, the sub-distributors will at all
times comply with our overall sales and distribution policies or that they will not compete with each
other for market share in respect of our products. If any sub-distributor fails to distribute our products
to its customers in a timely manner, overstocks or carries out actions inconsistent with our business
strategies, it may affect our future sales, which may in turn materially and adversely affect our
business, results of operations and financial condition.
Our information technology and software systems may encounter malfunction, unexpected system
failure, interruption, insufficiency or security breaches, including cyber-attacks or other privacy
or data security incidents that result in security breaches of these systems.
We rely on our information technology and software systems to effectively manage various
customers’ and suppliers’ data, production and operation data, and financial and human resources data.
Any significant failure in our information technology and software systems could result in transaction
errors, processing inefficiencies and loss of sales and customers, or lead to loss or leakage of
confidential information. We collect and store certain customer contact information necessary to our
business operations. The security of such information is of paramount importance. Any security and
privacy breaches on customer information may damage our customer relations and our reputation and
may expose us to legal liability.
Our information technology and software systems may be subject to damage or interruption,
primarily due to unexpected emergency circumstances beyond our control, including power outages,
computer and telecommunication failures, malware, ransomware or other destructive software, manual
or usage errors, catastrophic events, fire, natural disasters and extreme weather conditions, systems
failures, security breaches, unauthorized access to our data information systems, hackings intended to
cause malfunctions, loss or corruption of data, software, hardware or other computer equipment,
intentional or inadvertent transmission of computer viruses and other similar events. Attacks, including
those targeting IT systems, could severely disrupt business operations and result in significant expense
to repair or remediate system damage. We could not guarantee attacks and security incidents would not
happen in the future. We may also encounter problems when upgrading our systems, which could
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disrupt our operations and adversely affect our results of operations. In addition, our costs to adequately
counter the risk of cyber-attacks and to comply with contractual and regulatory compliance
requirements may increase significantly in the future.
Furthermore, cybersecurity breaches may expose us to a risk of loss or misuse of confidential and
proprietary information. Such theft, loss or fraudulent use of information, or other unauthorized
disclosure of personal or sensitive data, may lead to high costs to notify and protect the impacted
persons. It could also subject us to litigation, losses, liability, fines, or penalties, any of which could
materially and adversely affect our results of operations and reputation.
We have implemented various security measures and procedures to protect our IT systems,
increase security for information, and monitor and mitigate cybersecurity threats. See “Business—Data
Security and Privacy”. As cybersecurity threats are dynamic, evolving, and increasing in sophistication,
magnitude, and frequency, there can be no assurance that such procedures and measures will be
successful or sufficient to prevent security breaches from occurring. If any of these potential
cybersecurity incidents and corresponding regulatory action were to occur, they could adversely impact
our results of operations due to high additional costs, such as penalties, third-party claims, repairs,
increased insurance expense, litigation, remediation, security, and compliance costs.
We may be subject to the risks associated with international trade policies, geopolitics and trade
protection measures, including imposition of trade restrictions and sanctions, and our reputation,
business, results of operations and financial condition could be adversely affected.
Our operations are subject to deterioration in the political and economic relations among countries
and sanctions and export controls administered by government authorities and other geopolitical
challenges, including, but not limited to, economic and labor conditions, increased custom duties,
tariffs, taxes and other costs and political instability. Margins on the sales of products that include
components obtained from certain suppliers from other countries and regions could be materially and
adversely affected by international trade regulations, including custom duties, tariffs, sanctions and
antidumping penalties. In particular, the U.S. government imposed economic and trade sanctions
directly or indirectly affecting China-based technology companies. It is possible that the extent and
scope of such sanctions may escalate. There is no assurance as to how the U.S.-China trade tensions
might develop or whether there will be any changes to the scope and extent of goods that are or will be
subject to such export controls, sanctions, tariffs, or new trade policies introduced by the two countries.
We cannot predict the implications of the ongoing U.S.-China trade tensions and the resulting impact on
our industry and the global economy.
In particular, the U.S. government has imposed, and may continue to impose, economic and trade
sanctions targeting certain entities including Chinese state-owned enterprises and technology
companies, which could be our customers or suppliers. Restrictions which are similar or more
expansive restrictions that may be imposed by the U.S. or other jurisdictions in the future, may be
difficult or costly to comply with and may materially and adversely affect our and our technology
partners’ abilities to acquire technologies, systems, devices or components that may be critical to our
technology infrastructure, service offerings and business operations. If any of us, or our Shareholders,
Directors, management personnel, employees and business partners, as well as our suppliers and
customers, violate such laws, we could become subject to sanctions or other penalties, which could
adversely affect our reputation, business, results of operations and financial condition. If certain of our
customers and suppliers are listed on any sanction list and subject to restrictions from sourcing or
selling technologies, software, or components subject to the EAR from or to us, we may not be able to
obtain, extend or maintain the requisite regulatory permits in relation to our transactions with these
customers and suppliers.
The Final Rule became effective on January 2, 2025. The Final Rule targets investments by U.S.
persons involving persons and entities associated with “countries of concern,” currently including
China, that engaged in activities in certain sectors such as semiconductors and microelectronics,
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quantum information technologies or artificial intelligence (which the Final Rule defines as “covered
activities”). The persons and entities from countries of concern engaged in covered activities defined as
“covered foreign persons”. The Final Rule imposes prohibition or notification requirements on a wide
range of investments by U.S. persons subject to the Final Rule, which are defined as “covered
transactions”, include acquisitions of equity interests, certain debt financing, joint ventures, and certain
investments as a limited partner in a non-U.S. person pooled investment fund. As advised by our
Sanction Counsel, although we engage in activities involving semiconductors, a covered activity of the
Final Rule, our products do not meet or exceed the performance parameters specified under Export
Control Classification Number 3A090.a in Supplement No. 1 to 15 C.F.R. Part 774, nor are they
designed for operation at or below 4.5 Kelvin, as described in 31C.F.R. § 850.224(c). Based on the
above information, our Sanction Counsel is of the view that, our chip design business constitutes a
“covered activity” under 31C.F.R. § 850.208 and § 850.217(a), which only triggers “Notifiable
Transactions Requirement. A U.S. person’s investment into us, including the purchase of H Shares
through the Global Offering, should not constitute a prohibited transaction.
On December 23, 2025, the Treasury published additional frequently asked questions (“ FAQs”) on
the Outbound Investment Rule. One of these FAQs (X. 4) provides that absent additional facts, when a
U.S. person acquires an equity interest in a “covered foreign person”, and at the time of such
acquisition the equity interest is publicly traded, such security falls under the description of a “publicly
traded security” in 31 C.F.R. §850.501(a)(1)(i), regardless of when an agreement to make its
investments is entered into. In light of the FAQs’ guidance, we are of the view, as advised by our
Sanction Counsel and taking into account its view, a U.S. person’s acquisition of our H shares that are
publicly listed and traded in this Global Offering may constitute an “excepted transaction” assuming the
U.S. person would not also be afforded rights beyond “standard minority shareholder protections.”
While neither the Final Rule nor the FAQs define the time of acquisition, as advised by our Sanction
Counsel, it is reasonable to conclude that the acquisition of the H shares by investors occurs upon
settlement with them since the investors will receive our H shares at settlement. As long as the
settlement of the H shares purchased by U.S. persons occurs after 9:00 am on the Listing Date, the H
shares they acquire would be publicly listed and traded securities. However, if settlement occurs before
9:00am on the Listing date when the H shares are not yet publicly listed and traded (for example, this is
the case for settlement for Hong Kong Offer Shares), it remains uncertain whether the publicly traded
securities exception under the Final Rule can be applicable.
Although U.S. persons’ passive investments in publicly traded securities may qualify as “excepted
transactions” under the Final Rule, there remains ambiguity regarding the scope and conditions of this
exception. To the extent that this exception is not available, U.S. persons that purchase our H Shares in
this Global Offering may be required to file notifications with the U.S. Department of Treasury.
Any investors that are U.S. persons should consult their own legal counsel regarding the
applicable compliance requirements. Future changes in the Final Rule and any related policies, laws and
regulations or their interpretations, or any similar or more expansive restrictions imposed by the U.S. or
other jurisdictions, may result in additional costs on our business and/or limit our ability to raise capital
or contingent equity capital from U.S. market and other sources that may otherwise be beneficial to us,
which could adversely affect our performance, financial condition and prospects. Moreover, the Final
Rule may increase the compliance burden of U.S. investors and may cause certain U.S. investors to
adopt a more cautious approach in their investments, affecting the investor sentiment towards us, and
therefore negatively impacting our ability to raise capital.
Throughout 2025, the U.S. government announced several rounds of tariffs on imports from China
under the International Emergency Economic Powers Act (“ IEEPA”). These tariffs were ruled unlawful
by the U.S. Supreme Court on February 20, 2026. In response, the U.S. President suspended collection
of such IEEPA-based duties and imposed a temporary 10 percent ad valorem import surcharge for a
150-day period on goods imported into the United States, effective February 24, 2026, with certain
exceptions. The U.S. tariff policies are subject to continuous and unpredictable evolution, driven by
geopolitical dynamics, economic priorities, and regulatory agendas. In the event that our customers
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reduce their orders, be such due to a decrease in overall demand of our products, replacing us with
other suppliers, downturn of the macro-economy or other reasons, or in the event that we are required
to adjust our pricing strategies due to the changes of competition dynamics, our business, financial
conditions and results of operation will be adversely affected.
During the Track Record Period, our products were offered to our customers in mainland China
and Hong Kong. We cannot assure you that our end customers will not engage in the export of their
goods incorporating our products or solutions into the U.S. or other countries and regions, and that such
export will not be subject to the restrictions introduced by the U.S. or other jurisdictions. If the export
sales of the end customers’ end products are restricted, prohibited or made subject to any trade
conditions under any international policies or international export controls or economic sanctions
imposed by any jurisdictions, the end customers’ demand in our products may drop significantly and, as
a result, our business, financial condition and results of operations may be materially and adversely
affected.
Further, we have no control over the countries to which the downstream customers will sell and/or
export their end products. If the export sales of the downstream customers’ end products are restricted,
prohibited or made subject to any trade conditions under any international policies or international
export controls or economic sanctions imposed by any jurisdictions, the downstream customers’ demand
in our products may drop significantly and, as a result, our business, financial condition and results of
operations may be materially and adversely affected.
We may be involved in litigation, legal or contractual disputes, governmental investigations or
administrative proceedings, which may divert our management’s attention and adversely affect
our business, results of operations and financial condition.
We may be involved in litigation, legal or contractual disputes, governmental investigations or
administrative proceedings in the ordinary course of our business. These may concern issues relating to,
among others, intellectual property rights, tax filings, labor and contract disputes relating to our daily
business operations. See also “—Risks Relating to the Research and Development and Intellectual
Property Rights of Our Products—If third parties claim that we infringe upon their intellectual property
rights, we may incur liabilities and penalties and may have to redesign or suspend the sales of products
involved.” Any such claim or proceeding involving us, with or without merit, may be expensive,
time-consuming and disruptive to our operations and distracting to management. In addition, even if we
ultimately succeed in such disputes or proceedings, negative publicity may arise therefrom and
materially and adversely affect our reputation and business. If one or more legal or administrative
matters were resolved against us, or certain injunctions are granted to prevent us from using certain
technologies in our products, our business, results of operations and financial condition could be
materially and adversely affected. Furthermore, unfavorable outcomes could result in significant
compensatory or punitive monetary damages, disgorgement of revenue or profits, corporate remedial
measures, injunctive relief or specific performance against us that could materially and adversely affect
our results of operations and financial condition.
We are subject to a patent infringement claim which could prevent us from selling certain
products and may require us to pay monetary damages.
We are currently involved in a patent infringement lawsuit initiated by a competitor in the
semiconductor industry. The plaintiff alleges that several of our audio amplifier product models infringe
its invention patent for an “open-loop charge pump” and is seeking, among other remedies, a permanent
injunction against the manufacture, sale, and offer for sale of the implicated products, alongside
monetary damages. An unfavorable outcome, should it occur, could prevent us from selling the specific
product models cited in the litigation. The final resolution of this matter remains subject to judicial
determination. Any adverse ruling could have a negative impact on our business, financial condition,
and results of operations. For further details, see “Business—Legal Proceedings and
Compliance—Legal Proceedings.”
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We may be required to make additional contributions of social insurance fund and/or housing
provident fund and late payments and fines under PRC laws and regulations.
Companies operating in the PRC are required to participate in various employee benefit plans,
including social insurance fund and housing provident fund and contribute to the amounts equal to
certain percentage of salaries, including bonuses and allowances, of their employees up to a maximum
amount specified by the local government from time to time at locations where they operate their
business. During the Track Record Period, we did not make adequate contributions to the social
insurance and housing provident fund for our employees as required by the relevant PRC laws and
regulations. The total shortfall during the Track Record Period was approximately RMB14.1 million,
which we believe would not have a material adverse effect on our business. As a result, we may be
required to make additional contributions of social insurance fund and/or housing provident fund and
late payments and fines under PRC laws and regulations. We estimate that the shortfall of social
insurance and housing provident fund contributions as of December 31, 2022, 2023, 2024 and October
31, 2025 was approximately RMB3.7 million, RMB3.8 million, RMB3.6 million and RMB3.0 million,
respectively. Failure to pay the outstanding social insurance contributions and late payment surcharges
as required by the relevant government authorities within the prescribed time limit may subject us to a
maximum fine of three times the amount in arrears.
As advised by our PRC Legal Advisor, if the competent PRC government authority determines
that the social insurance contributions we made for our employees violate the requirements under the
relevant PRC laws and regulations, we may be required to pay all outstanding social insurance
contributions within a stipulated period, with late fees at a daily rate of 0.05% of the outstanding
amount, accruing from the date when the social insurance contributions were due. In the unlikely event
that we are required to settle the shortfall of social insurance contribution, if this payment is not made
within the stipulated period, the competent authority may further impose a fine of one to three times of
the overdue amount on us. In addition, pursuant to relevant PRC laws and regulations, in case of a
failure to pay the full amount of housing provident fund, the competent PRC government authority may
require us to pay the outstanding amount within a stipulated period. If the payment is not made within
such stipulated period, an application may be made to the PRC courts for compulsory enforcement. As
advised by our PRC Legal Advisor, the risk is remote that relevant local social insurance and housing
provident funds authorities will impose administrative penalty on us, and such that the incident
described above would not have a material adverse effect on our business and results of operations.
We cannot assure that the relevant local government authorities will not require us to pay the
outstanding amount within a specific time limit or impose late or additional fees or fines on us in the
future, nor can we assure you that there are no, or will not be any, employee complaints regarding
payment of the outstanding amount of the social insurance and housing provident fund contributions
against us, or that we will not receive any claims in respect of the outstanding amount of the social
insurance and housing provident fund contributions under national laws and regulations. In addition, we
may incur additional expenses to comply with such laws and regulations promulgated by the PRC
government or relevant local authorities.
Furthermore, during the Track Record Period, we engaged third-party agencies to make such
contributions on our behalf for certain employees, which was not in strict compliance with applicable
PRC laws and regulations. We implemented such arrangements primarily because these employees were
located in cities where we did not have any registered operating entities. As of December 31, 2022,
2023, 2024 and October 31, 2025, we engaged third-party agencies for paying social insurance or
housing provident funds to 18, six, five and seven employees, respectively. During the Track Record
Period, such third-party agencies made a total of RMB2.9 million of social insurance and housing
provident fund contributions on behalf of us. We are in the process of rectifying the non-compliance
with respect to payment of social insurance and housing provident fund contributions through
third-party agencies, including transferring the social insurance and housing provident funds
contributions from such agencies to our subsidiaries and branches. As advised by our PRC Legal
Advisor, if the validity of such arrangements is challenged by competent PRC authorities, we might be
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subject to additional contributions, late payment fees and/or penalties required by relevant PRC laws
and regulations for failing to discharge our obligations in relation to payment of social insurance and
housing provident funds as an employer or be ordered to rectify such practice. We cannot assure you
that relevant competent government authorities will not take the view that such third-party agency
arrangements do not satisfy the requirements under the relevant PRC laws and regulations. We might
also be subject to labor disputes arising from such arrangements with the relevant employees.
Failure to protect our leasehold interests could adversely affect our business operations.
As of the Latest Practicable Date, we were unable to file the lease agreements for registration
with respect to seven of our leased properties in China due to the difficulty of procuring our lessors’
cooperation to register such leases. If these lessors are not the legal owners or have not obtained the
proper authorization from the legal owners of such premises, the legal owners of such premises or
third-party tenants that have leased from the legal owners will have ground to challenge the validity of
our leasehold interest in the affected premises. Under the relevant PRC laws and regulations, the parties
to a lease agreement have the obligation to register and file the executed lease agreement. As advised
by our PRC Legal Advisor, the validity and enforceability of the lease agreements are not affected by
the failure to register or file the lease agreements with the relevant government authorities. According
to the relevant PRC regulations, we may be ordered by the relevant government authorities to register
the relevant lease agreements within a prescribed period, and we may be subject to a fine ranging from
RMB1,000 to RMB10,000 for each non-registered lease if we fail to comply. If any of our leases are
terminated or voided as a result of challenges from third parties or government agencies, we would
need to seek alternative premises and incur relocation costs.
Acquisitions, investments or strategic alliances may fail and materially and adversely affect our
reputation, business and results of operations.
We may in the future enter into strategic alliances with various third parties. Strategic alliances
with third parties could subject us to a number of risks, including risks associated with sharing
proprietary information, non-performance by the counterparty, and an increase in expenses incurred in
establishing new strategic alliances, any of which may materially and adversely affect our business. We
may have little ability to control or monitor their actions. To the extent strategic third parties suffer
negative publicity or harm to their reputation from events relating to their business, we may also suffer
negative publicity or harm to our reputation by virtue of our association with such third parties.
In addition, we may acquire additional assets, technologies or businesses that are complementary
to our existing businesses. Future acquisitions and the subsequent integration of new assets,
technologies and businesses into our own would require significant attention from our management and
could result in a diversion of resources from our existing businesses, which in turn could adversely
affect our business. Acquired assets, technologies or businesses may not generate the financial or
operating results we expect. In addition, acquisitions could result in the use of substantial amounts of
cash, dilutive issuances of equity securities, incurrence of debt, incurrence of significant goodwill
impairment charges, amortization expenses for other intangible assets and exposure to potential
unknown liabilities of the acquired business.
Prolonged cash conversion cycle and elevated inventory levels may materially and adversely affect
our business, results of operations and financial position.
We are subject to risks associated with a prolonged cash conversion cycle, predominantly driven
by extended inventory turnover days, which may adversely affect our liquidity position, increase our
working capital requirements, and potentially strain our operational efficiency. A key component of this
risk is our inventory management. The relatively long inventory holding period, as evidenced by the
historical inventory turnover days, necessitates significant capital to be tied up in unsold stock and
work-in-progress. This inherently elevates the risk of inventory obsolescence, particularly given the
rapid technological evolution and competitive pressures within the industry. Should market demand for
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our products decline unexpectedly or should we inaccurately forecast customer needs, we may be
required to write down the value of our inventory, which would directly and adversely impact our
profitability and financial condition.
Shifts in workforce diversity expectations and demographic trends may impact recruitment,
retention, and brand perception, which would affect our business, results of operations and
financial condition.
Increasing social awareness and stakeholder scrutiny, particularly within the ESG framework,
place greater emphasis on workforce composition, including gender diversity and age demographics.
Failure to adapt human resources strategies effectively to evolving social norms regarding diversity,
equity, and inclusion could potentially hinder the Group’s ability to attract and retain qualified talent
across all demographics. This may affect operational efficiency and innovation capacity. Furthermore,
perceptions regarding the our commitment to these evolving social values could influence our
reputation among customers, investors, and potential employees. While we monitor these trends and
seek to enhance our practices, significant changes in social expectations or related regulations could
necessitate material adjustments to our human capital management approach, potentially increasing
operational costs or impacting employer branding, which could materially and adversely affect our
business, results of operations and financial condition.
Any future occurrence of natural disasters, outbreaks of contagious diseases or other force
majeure events may materially and adversely affect our business, results of operations and
financial condition.
Our business is subject to general economic and social conditions in China and other countries
and regions where we operate. Uncertainties about global economic conditions and regulatory changes
and other factors including fluctuation of interest rates, inflation level, unemployment, labor and
healthcare costs, access to credit, consumer confidence and other macroeconomic factors may pose risks
and materially and adversely affect demand for our products. In addition, natural and man-made
disasters and other force majeure events which are beyond our control may adversely affect the
economy, infrastructure and livelihood of the people there. For instance, typhoons, sandstorms,
snowstorms, fires and droughts, as well as the outbreak of a widespread health epidemic such as
COVID-19, SARS, Ebola or Zika could pose significant risks to the regions where we or our business
partners conduct business operations, including the research and development, manufacturing and
commercialization activities. The potential occurrence or recurrence of any of these events could result
in a slowdown of global economy or cause substantial disruptions to our operations, which could
materially and adversely affect our business, financial condition, results of operations and prospects.
Additionally, acts of war and terrorism may also damage the facilities of our business partners, disrupt
our distribution channels and destroy our markets. The potential for war or terrorist attacks may also
harm or cause uncertainty to our business in ways that we cannot predict.
RISKS RELATING TO THE RESEARCH AND DEVELOPMENT AND INTELLECTUAL
PROPERTY RIGHTS OF OUR PRODUCTS
If we are unable to develop and introduce new products, our future business, results of operations,
financial condition and competitive position would be materially and adversely affected.
Our future business, results of operations, financial condition and competitive position depend on
our ability to develop and introduce new and enhanced products that incorporate the latest technological
advancements. We may encounter unexpected technical and production challenges or delays in
completing the development of new and enhanced products in a cost-efficient manner. Successful
product development and upgrade not only requires us to invest significant resources in research and
development and also require that we:
 design products with better functionality or other benefits that differentiate from those of our
competitors;
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 quickly and cost-effectively adjust to evolving customer demands, market conditions and
industry trends; and
 continuously enhance our current technology stack.
If we are unable to complete the development of new and enhanced products and/or technologies
without delay or at all, we may not be able to satisfy our customers’ demand or achieve broader market
acceptance of our products, and our business, results of operations, financial condition and competitive
position would be materially and adversely affected.
We have been investing, and intend to continue to invest, heavily in research and development,
which may adversely affect our profitability and operating cash flow and may not generate the
results we expect to achieve.
We have been investing, and expect to continue to invest, heavily in our research and development
efforts. Our research and development expenses increased from RMB48.7 million in 2022 to RMB59.3
million in 2023, and further to RMB68.1 million in 2024. Our industry is subject to rapid technological
changes and is quickly evolving in terms of technological innovation. We need to invest significant
resources, including financial resources, in research and development to make technological advances in
order to maintain the competitiveness of our products or expand our product offerings. As a result, we
expect to continue to incur significant research and development expenses in the future.
However, we cannot guarantee that our efforts will achieve the outcomes as we anticipate. The
outcomes of research and development activities are inherently uncertain. Even if we succeed in our
research and development efforts and generate the results as we expect, we may still encounter practical
difficulties in commercializing our products incorporating our research and development outcomes.
New technologies could render our existing technologies and/or products or technologies and/or
products we are developing obsolete or unattractive, thereby rendering us unable to recover research
and development costs, which could materially and adversely affect our business, results of operations
and financial condition.
Our research and development efforts may not translate into contribution to our results of
operations for several years, if at all, and even when they do, such contributions may not meet our
expectations, and we may never recover the costs of such efforts, which would materially and adversely
affect our business, results of operations, financial condition and competitive position.
We may not be able to obtain or maintain adequate intellectual property rights protection for our
products, or the scope of such intellectual property rights protection may not be sufficiently
broad.
Our ability to protect our proprietary technology as well as our product from competition by
obtaining, maintaining and enforcing our intellectual property rights, including patent rights is critical
to our long-term competitiveness. We have been protecting the proprietary technologies that we
consider commercially important by, among others, filing patent applications in China and other
jurisdictions. As of the Latest Practicable Date, we had 32, two and one registered patents in China, the
U.S. and Europe, respectively, including 32 invention patents and three utility model patents, and filed
21 patent applications in China and one patent applications in the U.S. which were pending approval.
All of our patents are self-owned and not licensed by third-parties. See “Business—Intellectual Property
Rights” for more details. The intellectual property application process may be expensive and
time-consuming, and we may not be able to file and prosecute all necessary or desirable intellectual
property applications at a reasonable cost or in a timely manner, if at all. In addition, we may however
fail to identify patentable aspects of our R&D outputs before it is too late to obtain patent protection.
As a result, we may not be able to prevent competitors from developing and commercializing
competitive products in all such fields.
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Even if we have identified, filed and prosecuted our intellectual property applications, our
applications may not be granted or our intellectual property may be invalidated for multiple reasons,
including known or unknown prior deficiencies in the intellectual property application or the lack of
novelty of the underlying technology. Moreover, the patent position of power amplifier audio chip
providers like us may be uncertain because it involves complex legal and factual considerations. As
such, we cannot assure you that we will be able to discern the scope of the intellectual property
protection or obtain adequate intellectual property protection with respect to our products.
Governmental patent agencies also require compliance with a number of procedural, documentary, fee
payment, and other similar provisions during the patent application process and over the lifetime of the
patent. Non-compliance events can result in abandonment or lapse of the relevant patent or patent
application, leading to partial or complete loss of patent rights in the relevant jurisdiction.
Even if our intellectual property applications are approved, they may not be approved in a form
that will provide us with meaningful protection from competition or with any competitive advantage.
For instance, our competitors may be able to circumvent our patents by developing similar or
alternative technologies or products in a non-infringing manner. The issuance of a patent is not
conclusive as to its inventor, scope, validity or enforceability, and our patents may be challenged in the
courts or patent offices in China and other jurisdictions. Further, although various extensions may be
available, the life of a patent and the protection it affords is limited. If we fail to extend the life of our
patents, we may face competition for any approved products or solutions even if we successfully obtain
patent protection once the patent life has expired for the product or solution.
Any of the foregoing could materially and adversely affect our business, results of operations,
financial condition, competitive position and prospects.
We may be involved in lawsuits to protect or enforce our intellectual property rights from time to
time and our rights could be found invalid or unenforceable if being challenged in court or before
any related intellectual property agency in any jurisdiction.
Competitors may infringe, misappropriate or otherwise violate our patent rights or other
intellectual property rights. To counter infringement or unauthorized use, litigation may be necessary to
enforce or defend our intellectual property rights, to protect our trade secrets or to determine the
validity and scope of our own intellectual property rights or the proprietary rights of others. This can be
expensive and time-consuming. Any claims that we assert against perceived infringers could also
provoke these parties to assert counterclaims against us alleging that we infringe their intellectual
property rights. Certain of our current and potential competitors have, and could continue to, dedicate
significant resources to enforce and/or defend their intellectual property rights. Accordingly, despite our
efforts, we may not be able to prevent third parties from infringing upon or misappropriating our
intellectual property. An adverse result in any litigation proceeding could put our patents, as well as any
patents that may be issued in the future from our pending patent applications, at risk of being
invalidated, held unenforceable or interpreted narrowly.
Furthermore, depending on the scope of discovery required in connection with intellectual
property litigation, some of our confidential information could be compromised by disclosure.
Defendant counterclaims alleging invalidity or unenforceability are common, and can be asserted on
numerous grounds. Third parties may also raise similar claims before the administrative bodies in China
or other jurisdictions. Such proceedings could result in revocation or amendment to our patents in such
a way that they no longer cover and protect our products or product and solution candidates. The
outcome following legal assertions of invalidity and unenforceability is unpredictable.
If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would
lose at least part, and potentially all, of the patent protection on our products or product and solution
candidates. Such a loss of patent protection could materially and adversely affect our business.
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If third parties claim that we infringe upon their intellectual property rights, we may incur
liabilities and penalties and may have to redesign or suspend the sales of products involved.
The industry in which we operate is patent-intensive. Companies, including us, in this industry
routinely seek patent protection for their product and solution designs. Some of our competitors have
large patent portfolios with broad rights and may claim that our expected commercial use of our
products or solutions has infringed their patents. Specifically, these competitors could allege that certain
features of our products or solutions fall within the coverage of their patents. Our competitors have
initiated, and may continue to initiate legal proceedings alleging that we are infringing,
misappropriating or otherwise violating their intellectual property rights in connection with the
commercialization of our products.
Whether a product infringes a patent involves an analysis of complex legal and factual issues and
the conclusion of such analysis is often uncertain. Although we intend to identify and avoid intellectual
property infringement activities, (1) we may hire employees who have previously worked for our
competitors and cannot assure that such employees will not use their previous employers’ proprietary
know-how, technology and other proprietary information in their work for us, which could result in
litigation against us; (2) in the case where our employees are obligated to assign any inventions created
during their work to us under assignment agreement, we may not obtain these agreements in all
circumstances and the assignment of intellectual property under such agreements may not be
self-executing; and (3) our competitors may also have filed for patent protection which is not as yet a
matter of public knowledge or claimed rights that have not been revealed through our searches of
relevant public records. Therefore, our efforts to identify and avoid infringing on third parties’
intellectual property rights may not always be successful.
Any claims of patent or other intellectual property infringement, regardless of their merit, could
be expensive and time-consuming. These claims and the relevant proceedings could diverge
management attention and result in substantial financial costs. If our competitors or employees succeed
in raising their claims, we may be required to suspend our sales efforts of the relevant products in
controversy, redesign, reengineer or rebrand such products, pay substantial damages to third parties, or
enter into royalty or licensing agreements which may not be available on terms favorable to us.
We may be unable to protect the confidentiality of our trade secrets, and we may be subject to
claims that we, or our employees or our business partners have wrongfully used or disclosed trade
secrets allegedly owned by others.
In addition to our registered patents and patent applications, we rely on trade secrets, including
unpatented know-how, technology and other proprietary information, to protect our products and thus
maintain our competitive position. We protect these trade secrets, in part, by entering into
non-disclosure and confidentiality agreements, non-compete covenants or include such undertakings in
the agreements with parties that have access to them. We also enter into employment agreements with
our employees that include undertakings regarding assignment of inventions and discoveries.
Nevertheless, there can be no guarantee that an employee or a third party will not make an
unauthorized use or disclosure of our proprietary confidential information. This might happen
intentionally or inadvertently. It is possible that a competitor will gain access to such information and
make use of such information, and that our competitive position will be compromised, despite any legal
action we might take against such persons. In addition, to the extent that our employees or business
partners use intellectual property owned by others in their work for us, disputes may arise as to the
rights in related or resulting know-how and inventions.
Trade secrets are difficult to protect. Our employees or business partners might intentionally or
inadvertently disclose our trade secret information to competitors, or our trade secrets may otherwise be
misappropriated. Enforcing a claim that a third party illegally obtained and/or is using any of our trade
secrets is expensive and time-consuming, and the outcome is unpredictable. While we seek to enter into
agreements with our employees that obligate them to assign any inventions created during their work to
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us, we may not obtain these agreements in all circumstances and the assignment of intellectual property
under such agreements may not be self-executing. It is possible that technology relevant to our business
will be independently developed by a person that is not a party to such agreement. Furthermore, if the
employees who are parties to these agreements breach the terms of these agreements, we may not have
adequate remedies for any such breach, and we could lose our trade secrets and inventions through such
breaches. Any legal proceedings asserting our trade secrets could be time-consuming and costly, and
may not yield successful results.
RISKS RELATING TO OUR FINANCIAL CONDITION AND NEED FOR ADDITIONAL
CAPITAL
We have incurred significant net losses and had incurred gross loss during the Track Record
Period, and may not be able to achieve or subsequently maintain profitability in the near future.
We have incurred net losses in the past. In 2022, 2023, 2024 and the ten months ended October
31, 2024 and 2025, we incurred net loss of RMB65.9 million, RMB94.1 million, RMB56.8 million,
RMB46.9 million and RMB51.8 million, respectively. In 2023, we recorded gross loss of RMB0.1
million. We may continue to incur net losses in the short term, as we are in the stage of expanding our
business and operations in the rapidly growing power amplifier audio chip industry and are
continuously investing in research and development. We may not be able to achieve or subsequently
maintain profitability in the near future. Our net losses during the Track Record Period were primarily
due to our significant investments into our R&D initiatives and the relatively short commercialization
record of our products. Our cost of sales and operating expenses may further increase as we continue to
(1) expand our business in more downstream sectors such as the automotive-grade power amplifier
audio chip industry, (2) invest in our research and development initiatives to maintain our
competitiveness in the market and (3) engage in sales and marketing activities to increase our market
shares in the power amplifier audio chip industry, while we have not yet achieved economies of scale.
Our gross loss in 2023 was primarily attributable to a strategic initiative to accelerate market share
growth through a more competitive pricing strategy in response to the intensifying competition.
Our future profitability will depend on a variety of factors, including (1) sustained R&D
investment and technological breakthroughs that maintain our competitive edge, (2) increased demand
from downstream sectors and such emerging downstream applications where our audio chips are
becoming critical enablers, and (3) continued market expansion of our automotive-grade power
amplifier audio chips. In particular, our ability to improve our gross profit margin by effectively pricing
our products is crucial to our success. Our revenue also may not grow at the rate we expect, if at all,
and it may not increase sufficiently to offset the increase in our costs and expenses. As a result, we may
continue to incur losses in the future and we cannot assure you that we will eventually achieve our
intended profitability. In addition, we expect to incur additional costs and expenses as a result of being
a public company. If we are unable to generate adequate revenues and manage our expenses, we may
continue to incur significant losses and may not be able to achieve or subsequently maintain
profitability.
We recorded net operating cash outflows historically and there can be no assurance that we will
not have net cash outflow from operating activities in the future.
We recorded net cash outflow used in operating activities of RMB105.8 million, RMB88.6
million, RMB82.7 million, RMB52.5 million and RMB57.3 million in 2022, 2023, 2024 and the ten
months ended October 31, 2024 and 2025, respectively. See “Financial Information—Liquidity and
Capital Resources—Cash Flows.” We cannot assure you that we will be able to generate positive cash
flows from operating activities in the future. If we continue to record net operating cash outflows in the
future, our working capital may be constrained, which may adversely affect our financial condition. Our
future liquidity primarily depends on our ability to maintain adequate cash inflows from our operating
activities and adequate external financing such as offering and issuing securities, and/or other sources
such as external debt, which may not be available on terms favorable or commercially reasonable to us
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or at all. If we fail to obtain sufficient funding in a timely manner and on reasonable terms, or at all,
we will be in default of our payment obligations and may not be able to expand our business. As a
result, our business, results of operations and financial condition may be adversely affected.
If we fail to perform our contractual obligations, our liquidity and financial positions may be
materially and adversely affected in the future.
Our contract liabilities primarily represent the advance consideration received from our customers
while the underlying goods are yet to be provided by us. Our contract liabilities were RMB2.4 million,
RMB4.7 million, RMB7.8 million and RMB2.3 million as of December 31, 2022, 2023, 2024 and
October 31, 2025, respectively. If we fail to fulfill our obligations with respect to our contract
liabilities, we may not be able to convert such contract liabilities into revenue as expected.
Furthermore, if we fail to fulfill our obligations with respect to our contract liabilities, our customers
may request not to prepay us in the future. Any of these circumstances could materially and adversely
affect our business, results of operations, cash flow and liquidity condition.
We have granted and may continue to grant share incentives in the future, which may result in
increased share-based payment expenses or shareholder dilution.
We recorded share-based payment expenses of RMB7.8 million, RMB7.8 million, RMB7.8
million, RMB6.5 million and RMB6.1 million in 2022, 2023, 2024 and the ten months ended October
31, 2024 and 2025, respectively. We believe the granting of share-based payment is of significant
importance to our ability to attract and retain key personnel and employees, and we will continue to
grant share-based payment to employees in the future. Issuance of additional Shares with respect to
share-based payment may dilute the shareholding percentage of our existing Shareholders. Our expenses
associated with share-based payment may increase, which may have an adverse effect on our results of
operations.
We are subject to credit risk relating to certain trade receivables, and any significant default on
our trade receivables could materially and adversely affect our liquidity, financial condition and
results of operations.
We are exposed to credit risk relating to delay in payment and defaults of our customers. As of
December 31, 2022, 2023, 2024 and October 31, 2025, our trade receivables before impairment loss
amounted to RMB14.3 million, RMB30.8 million, RMB42.3 million and RMB48.3 million on a gross
basis, respectively, with an allowance for credit losses of trade receivables amounting to RMB0.1
million, RMB0.3 million, RMB0.4 million and RMB0.5 million as of the same dates, respectively. Our
trade receivables turnover days were 22.2 days, 54.2 days, 37.2 days and 48.6 days in 2022, 2023, 2024
and the ten months ended October 31, 2025, respectively. We may not be able to collect all such trade
receivables due to a variety of factors that are beyond our control, such as long payment cycles of
certain customers. If the relationship between us and any of our customers is terminated or deteriorated,
or if any of our customers experience financial difficulties in settling the trade receivables, our
corresponding trade receivables recoverability will be adversely affected. The increase in the amount of
provisions made on our trade receivables will be recorded as expenses on our results of operations. As
such, if we are unable to manage the credit risk associated with our trade receivables effectively, our
results of operations may be materially and adversely affected. Furthermore, substantial defaults or
delays by our customers could materially and adversely affect our cash flow and working capital
conditions, and we may have to terminate our relationships with such customers and third parties.
RISK FACTORS
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RISKS RELATING TO CONDUCTING BUSINESS IN JURISDICTIONS THAT WE OPERATE IN
Changes in the economic, political or social conditions, laws, regulations or government policies in
the jurisdictions where we operate could have a material adverse effect on our business and
operations.
Changes in the economic, political and social conditions as well as government policies in the
jurisdictions where we operate could adversely affect our business and prospects. Most of our
operations and assets are located in China. Accordingly, our business, financial condition and results of
operations could also be influenced by changes political, economic and social conditions in this market.
Any economic downturn, whether actual or perceived, decrease in economic growth rates or an
otherwise uncertain economic outlook in our geographic markets or any other market in which we may
operate, as well as changes in the economic or political environment in such markets, could affect our
business, financial condition and results of operations.
In recent years, the Chinese government implemented a series of laws, regulations and policies
which imposed stricter standards with respect to, among other things, quality and safety control, and
supervision and inspection of enterprises operating in our industries. See “Regulatory Overview.” If the
Chinese government continues to impose stricter regulations on our industries, we could face higher
costs in order to comply with those regulations, which may affect our profitability.
Governmental supervision of currency conversion, and restrictions on the remittance of Renminbi
into and out of China, may limit our ability to pay dividends and other obligations, and adversely
affect the value of your investment.
The PRC government imposes supervision on the convertibility of Renminbi into foreign
currencies. Most of our transactions are denominated in Renminbi. We may convert a portion of our
revenue into other currencies to meet our foreign currency obligations, such as payments to certain
suppliers, if any. Shortages in the availability of foreign currency may restrict our ability to remit
sufficient foreign currency, or otherwise satisfy our foreign currency denominated obligations.
Under the existing PRC foreign exchange regulations, payments of current account items,
including profit distributions, interest payments and trade and service-related foreign exchange
transactions, can be made in foreign currencies without prior SAFE approval by complying with certain
procedural requirements. However, approval from or registration with competent government authorities
is required where Renminbi is to be converted into foreign currency and remitted out of China to pay
capital expenses, such as direct investments, repayment of loans denominated in foreign currencies,
repatriation of investments and investments in securities outside of China. Failure to obtain approval
from or complete registration with competent government authorities related to overseas direct
investments may result in cessation of the implementation of relevant projects, restrictions on the
remittance of Renminbi into or out of China, or even legal of administrative liabilities. If the foreign
exchange regulatory policies prevent us from obtaining sufficient foreign currencies to satisfy our
foreign currency demands, we may not be able to pay dividends in foreign currencies to our
Shareholders. Further, we cannot assure you that new regulations will not be promulgated in the future
that would have the effect of further restricting the remittance of Renminbi into or out of China.
Fluctuations in exchange rates of Renminbi against Hong Kong dollar, U.S. dollar or other foreign
currencies may result in foreign currency exchange losses and may have a material adverse effect
on your investment.
During the Track Record Period, a majority portion of our revenue, expenditures and financial
assets were denominated in Renminbi. 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 gains
of RMB4.7 million, RMB1.4 million, RMB4.8 million and RMB3.1 million in 2022, 2023, 2024 and
the ten months ended October 31, 2024, respectively, and recorded net foreign exchange loss of
RISK FACTORS
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RMB1.9 million in the ten months ended October 31, 2025. The exchange rate of the Renminbi against
the U.S. dollar and other foreign currencies fluctuates and is affected by, among other things, the
policies of the Chinese government and changes in China and in international political and economic
conditions. It is difficult to predict how market forces or government policies may impact the exchange
rate between the Renminbi and the Hong Kong dollar, the U.S. dollar or other currencies in the future.
Any significant change in the exchange rates of the Hong Kong dollar against Renminbi, U.S. dollar or
other foreign currencies may materially and adversely affect our cash flows, earnings and financial
position, and the value of, and any dividends payable on, our H Shares in Hong Kong dollars. For
example, a further appreciation of Renminbi against the Hong Kong dollar would make any new
Renminbi-denominated investments or expenditures more costly to us, to the extent that we need to
convert Hong Kong dollars into Renminbi for such purposes. An appreciation of Renminbi against the
Hong Kong dollar would also result in foreign currency translation losses for financial reporting
purposes when we translate our Hong Kong dollar denominated financial assets into Renminbi,
including proceeds from the Global Offering, as Renminbi is the functional currency of our subsidiaries
inside China. Conversely, if we decide to convert our Renminbi into Hong Kong dollars for the purpose
of making payments for dividends on our H Shares or for other business purposes, appreciation of the
Hong Kong dollar against Renminbi would have a negative effect on the Hong Kong dollar amount
available to us.
Failure to comply with rapidly evolving governmental regulations and other legal obligations
concerning data protection and cybersecurity may materially and adversely affect our business, as
we routinely collect, store and use data during the conduct of our business.
We are subject to various regulatory requirements relating to cybersecurity and data privacy in the
PRC, including the PRC Data Security Law (جand the Cybersecurity Law
of PRC (جWe are required to ensure that our data processing activities are
carried out in a lawful, legitimate, specific and clear manner. In the course of conducting our business,
the data we collect mainly pertains to employee information, customer and supplier contact information,
and other data necessary for operation and management. Due to our business nature, we generally do
not engage in collecting personal information through public channels such as operational websites,
apps, or mini-programs on internet platforms. However, we may still incur expenses to comply with
laws and regulations relating to data privacy, data security and consumer protection, as well as relevant
industry standards and contractual obligations.
Regulatory requirements on cybersecurity and data privacy are constantly evolving and can be
subject to varying interpretations or significant changes, resulting in uncertainties about the scope of
our responsibilities in that regard. We may also be subject to additional or new laws and regulations
regarding the protection of personal information and important data or privacy related matters in
connection with our methods for data collection, analysis, storage and use. If we are unable to comply
with the applicable laws and regulations or effectively address data privacy and protection concerns,
such actual or alleged failure could damage our reputation, discourage customers from purchasing our
products and subject us to significant legal liabilities.
As of the Latest Practicable Date, we are not applicable to the declaration of cybersecurity review,
on the basis that: (1) we had not been notified of being classified as a critical information infrastructure
operator, (2) we have not received any material queries or notifications from any PRC governmental
authorities, have not received any notification with regard to cybersecurity review, and have not been
subject to any material administrative penalties or other sanctions by any competent regulatory
authorities in relation to cybersecurity, data and personal information protection, (3) our business does
not involve the cross-border transfer of personal information and important data, (4) during the Track
Record Period and up to the Latest Practicable Date, there had not been a significant cybersecurity or
data protection incident regarding theft, leakage, damage or loss of data or personal information, and
(5) Hong Kong is not included in the definition of “abroad” hereof and listing in Hong Kong is not in
the scope of “listing abroad” ( ਷̮ɪ̹), which is not explicitly required to apply for a cybersecurity
review.
RISK FACTORS
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Holders of our H Shares may be subject to PRC income tax obligations.
Under the current PRC tax laws and regulations, non-PRC resident individuals and non-PRC
resident enterprises are subject to different tax obligations with respect to the dividends paid to them by
us and the gains realized upon the sale or other disposition of H Shares.
Non-PRC resident individuals are required to pay PRC individual income tax at a 20% rate for the
income derived in China under the Individual Income Tax Law of the PRC (੻
جthe “ IIT Law ”) and its implementation guidelines. Accordingly, we are required to withhold
such tax from dividend payments, unless applicable tax treaties between China and the jurisdiction in
which the foreign individual resides reduce or provide an exemption for the relevant tax obligations.
However, pursuant to the Circular on Certain Policy Questions Concerning Individual Income Tax
issued by the MOF and SAT (ٝCai Shui
Zi [1994] No. 020) on May 13, 1994, the income gained by individual foreigners from dividends and
bonuses of enterprise with foreign investment are exempted from individual income tax for the time
being. In addition, under the IIT Law and its implementation regulations, non-PRC resident individual
holders of H shares are subject to individual income tax at a rate of 20% on gains realized upon the
sale or other disposition of H shares. However, pursuant to Circular of Declaring that Individual Income
Tax Continues to be Exempted over Income of Individuals from the Transfer of Shares (ɛᔷᜫ
ٝCai Shui Zi [1998] No. 61) issued by the MOF and SAT
on March 30, 1998, from January 1, 1997, the income of individuals from the transfer of the shares of
listed enterprises continues to be exempted from individual income tax.
As of the Latest Practicable Date, no aforesaid provisions had expressly provided that individual
income tax shall be levied non-PRC resident individual holders on the transfer of shares in PRC
resident enterprises listed on overseas stock exchanges, and to our knowledge, no such individual
income tax was levied by PRC tax authorities in practice. However, the PRC tax authorities may change
these practices, which could result in levying income tax on non-PRC resident individual holders on
gains from the sale of H shares.
For non-PRC resident enterprises that do not have establishments or premises in China, and for
those have establishments or premises in China but whose income is not related to such establishments
or premises, under the EIT Law and its implementation regulations, dividends paid by us and gains
realized by such foreign enterprises upon the sale or other disposition of H Shares are subject to PRC
enterprise income tax at a rate of 10%. In accordance with the Circular on Issues Relating to
Withholding of Enterprise Income Tax by PRC Resident Enterprises on Dividends Paid to Overseas
Non-PRC Resident Enterprise Shareholders of H Shares (͏ΆุΣྤ̮ H؇ٰ
ٝGuo Shui Han [2008] No. 897) issued by SAT on
November 6, 2008, the withholding tax rate for dividends payable to non-PRC resident enterprise
holders of H Shares will be 10% and we intend to withhold tax at a rate of 10% from dividends paid to
non-PRC resident enterprise holders of our H Shares (including HKSCC Nominees). Non-PRC resident
enterprises that are entitled to be taxed at a reduced rate under an applicable income tax treaty or
arrangement will be required to apply to the PRC tax authorities for a refund of any amount withheld in
excess of the applicable treaty rate, and payment of such refund will be subject to the PRC tax
authorities’ approval. See “Regulatory Overview—Laws and Regulations relating to Tax.”
Despite the arrangements mentioned above, there remain significant uncertainties as to the
interpretation and application of applicable PRC tax laws and regulations by the competent tax
authorities and the PRC tax laws and regulations may also change, which may adversely affect the
value of your investment in our H Shares.
RISK FACTORS
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We may be subject to administrative penalties for our past non-compliance with PRC related
party transactions reporting obligations.
We failed to submit our annual related party transactions reports to the relevant PRC tax
authorities on time for the years 2022, 2023, and 2024. This non-compliance was a result of our
administrative staff’s misunderstanding of the relevant legal requirements. Under the EIT Laws and the
Law of the PRC on the Administration of Tax Collection, the relevant tax authority may impose a
maximum administrative penalty of RMB10,000 for each late report. Consequently, we may be subject
to a maximum aggregate financial penalty of RMB30,000 for these late submissions during the Track
Record Period. While we have retrospectively submitted all outstanding reports and no penalty has been
imposed as of the Latest Practicable Date, the relevant authorities retain the right to take action, which
could result in financial penalties against us.
RISKS RELATING TO THE GLOBAL OFFERING
An active trading market for our H Shares may not develop or be sustained.
Prior to the completion of the Global Offering, there has been no public market for our H Shares.
We cannot assure you that an active trading market for our H Shares with adequate liquidity will
develop or be sustained following the completion of the Global Offering. The initial Offer Price is the
result of negotiations between our Company and the Overall Coordinators (for themselves and on behalf
of the Underwriters), which may not be indicative of the price at which our H Shares will be traded
following the completion of the Global Offering. The market price of our H Shares may drop below the
initial Offering Price at any time following the Global Offering.
We have applied to the Stock Exchange for the listing of, and permission to deal in, the H Shares
(including any H Shares which may be issued pursuant to the exercise of the Over-allotment Option). A
listing on the Stock Exchange, however, does not guarantee that an active and liquid trading market for
the H Shares will develop, or if it does develop, that it will be sustained following the Global Offering,
or that the market price of the H Shares will not decline following the Global Offering. If an active
public market for our H Shares does not develop following the completion of the Global Offering, the
market price and liquidity of our H Shares could be materially and adversely affected.
The price and trading volume of our H Shares may be volatile, which could lead to substantial
losses to investors.
The price and trading volume of our H Shares may be subject to significant volatility in response
to various factors beyond our control, including the general market conditions of the securities in Hong
Kong and elsewhere in the world. In particular, the business and performance and the market price of
the shares of other companies engaging in similar business may affect the price and trading volume of
our H Shares. In addition to market and industry factors, the price and trading volume of our H Shares
may be highly volatile for specific business reasons, such as fluctuations in our revenue, earnings, cash
flows, investments, expenditures, regulatory developments, relationships with our customers and
suppliers, movements or activities of key personnel, or actions taken by competitors. Moreover, shares
of other companies listed on the Stock Exchange with significant operations and assets in China have
experienced price volatility in the past, and it is possible that our H Shares may be subject to changes
in price not directly related to our performance.
Future sales or perceived sales of substantial amounts of our H Shares in the public market could
have a material adverse effect on the price of our H Shares and our ability to raise additional
capital in the future.
The market price of our H Shares could decline as a result of future sales of a substantial number
of our H Shares or other securities relating to our H Shares in the public market, or the issuance of new
shares or other securities, or the perception that such sales or issuances may occur. Future sales, or
anticipated sales, of substantial amounts of our securities, including any future offerings, could also
RISK FACTORS
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materially and adversely affect our ability to raise capital at a specific time and on terms favorable to
us. In addition, our Shareholders may experience dilution in their holdings if we issue more securities
in the future. New shares or shares-linked securities issued by us may also confer rights and privileges
that take priority over those conferred by the H Shares.
While investors subscribing shares in the Global Offering are not subject to any restrictions on the
disposal of the H Shares they subscribed (except as disclosed in “Information about this Prospectus and
the Global Offering—Restrictions on Offers and Sales of the H Shares”), they may have existing
arrangements or agreements to dispose part or all of the H Shares they hold immediately or within
certain period upon completion of the Global Offering for legal and regulatory, business and market, or
other reasons. Such disposal may occur within a short period or any time or period after the Listing
Date.
Any sale of the H Shares subscribed by such investors pursuant to such arrangement or agreement
could adversely affect the market price of our H Shares and any sizeable sale could have a material and
adverse effect on the market price of our H Shares and could cause substantial volatility in the trading
volume of our H Shares.
Y ou will incur immediate and significant dilution and may experience further dilution if we issue
additional Shares in the future.
The Offer Price of the Offer Shares 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. We
cannot assure you that if we were to immediately liquidate after the Global Offering, any assets will be
distributed to Shareholders after the creditors’ claims. To expand our business, we may consider
offering and issuing additional 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.
Certain facts, forecasts and statistics contained in this prospectus are derived from government
sources and may not be accurate, reliable, complete or up to date.
We have derived certain information and statistics in this prospectus, particularly the section
headed “Industry Overview,” from the F&S report, which was commissioned by us, and from publicly
available publications provided by government institutions and other sources. Due to possibly flawed or
ineffective collection methods or discrepancies between published information and market practice and
other problems, the statistics from these government sources may be inaccurate or may not be
comparable with statistics produced for other economies, and you should not place undue reliance on
them. Furthermore, we cannot assure you that they are stated or compiled on the same basis, or with the
same degree of accuracy, as similar statistics presented elsewhere. In all cases, you should consider
carefully how much weight or importance you should attach to or place on such information or
statistics.
We may not be able to pay any dividends on our H Shares.
We have never paid or declared any dividends since our inception. We cannot guarantee when and
in what form dividends will be paid on our H Shares following the Global Offering. The declaration of
dividends is proposed by the Board and is based on, and limited by, various factors, including without
limitation, our business and financial performance, capital and regulatory requirements, and general
business conditions. 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. Therefore, you should not rely on an investment in our H Shares as a
source for any future dividend income. See “Financial Information—Dividends” for details.
RISK FACTORS
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If securities or industry analysts do not publish research or reports about our business, or if they
adversely change their recommendations regarding our H Shares, the market price for H Shares
and trading volume could decline.
The trading market for our H Shares will be influenced by research or reports that industry or
securities analysts publish about our business. If one or more analysts who cover us downgrade our H
Shares, the market price for our H Shares would likely decline.
If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we
could lose visibility in the financial markets, which in turn could cause the market price of or trading
volume for our H Shares to decline.
Y ou should read the entire prospectus carefully and only rely on the information included in this
prospectus to make your investment decision, and we strongly caution you not to rely on any
information contained in press articles or other media coverage relating to us, our H Shares or the
Global Offering.
There had been, prior to the publication of this prospectus, and there may be, subsequent to the
date of this prospectus but prior to the completion of the Global Offering, press and media coverage
regarding us and the Global Offering. We have not authorized the disclosure of any information
concerning the Global Offering in the press or media and do not accept responsibility for the accuracy
or completeness of such press articles or other media coverage. We make no representation as to the
appropriateness, accuracy, completeness or reliability of any of the projections, valuations or other
forward-looking information about us. To the extent such statements are inconsistent with, or conflict
with, the information contained in this prospectus, we disclaim responsibility for them. Accordingly,
prospective investors are cautioned to make their decisions on the basis of the information contained in
this prospectus only and should not rely on any other information.
Forward-looking statements contained in this prospectus are subject to risks and uncertainties.
This prospectus contains forward-looking statements with respect to our business strategies,
operating efficiencies, competitive positions, growth opportunities for existing operations, plans and
objectives of management, certain pro forma information and other matters.
The words “anticipate,” “believe,” “could,” “potential,” “continue,” “expect,” “intend,” “may,”
“plan,” “seek,” “will,” “would,” “should” and the negative of these terms and other similar expressions
identify a number of these forward-looking statements. These forward-looking statements, including,
among others, those relating to our future business prospects, capital expenditure, cash flows, working
capital, liquidity and capital resources are necessary estimates reflecting the best judgment of our
Directors and senior management and involve a number of risks and uncertainties that could cause
actual results to differ materially from those suggested by the forward-looking statements. As a result,
these forward-looking statements should be considered in light of various important factors, including
those set out in “Risk Factors” in this prospectus. Accordingly, such statements are not a guarantee of
future performance, and you should not place undue reliance on any forward-looking information. All
forward-looking statements in this prospectus are qualified by reference to this cautionary statement.
RISK FACTORS
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In preparation for the Global Offering, we have applied to the Stock Exchange for the following
waivers from strict compliance with the relevant provisions of the Listing Rules.
MANAGEMENT PRESENCE IN HONG KONG
According to Rule 8.12 of the Listing Rules, all applicants applying for a primary listing on the
Stock Exchange must have sufficient management presence in Hong Kong. This would normally mean
that at least two of the applicant’s executive directors must be ordinarily resident in Hong Kong.
Our Company’s business operations and assets are primarily located outside Hong Kong. Our
Company’s executive Directors are based in the PRC as our Board believes it is more effective and
efficient for our executive Directors to be based in a location where our substantial operations are
located. Our Company therefore does not, and in the near future will not, maintain management
presence in Hong Kong.
Accordingly, pursuant to Rule 19A.15 of the Listing Rules, we have applied to the Stock
Exchange for, and the Stock Exchange has granted us, a waiver from strict compliance with the
requirements under Rule 8.12 of the Listing Rules, provided that our Company implements the
following arrangements:
(1) We have appointed Mr. Xu, our chairman of the Board, executive Director and president, and
Mr. Gao Wenchao (“ Mr. Gao ”), our joint company secretary as our authorized
representatives for the purpose of Rule 3.05 of the Listing Rules. They will serve as the
principal channel of communication with the Stock Exchange and make themselves readily
available to communicate with the Stock Exchange. Each of Mr. Xu and Mr. Gao can be
readily contactable by phone and email to deal promptly with enquiries from the Stock
Exchange, and will also be available to meet with the Stock Exchange to discuss any matters
within a reasonable period of time upon the request of the Stock Exchange. The contact
details of our authorized representatives have been provided to the Stock Exchange.
(2) All Directors who are not ordinarily resident in Hong Kong possess or can apply for valid
travel documents to visit Hong Kong and can meet with the Stock Exchange within a
reasonable period. In addition, each Director has provided his/her contact details, including
phone numbers and email addresses, to our authorized representatives and to the Stock
Exchange. In the event that a Director expects to be traveling or otherwise be out of office,
he/she will provide the phone number of the place of his/her accommodation or other contact
information to our authorized representatives to ensure that each of our authorized
representatives will be able to contact all our Directors promptly at all times if and when the
Stock Exchange wishes to contact our Directors.
(3) We have appointed Orient Capital (Hong Kong) Limited as our compliance advisor in
accordance with Rule 3A.19 of the Listing Rules, which will serve as an additional and
alternative channel of communication with the Stock Exchange in addition to our authorized
representatives. The compliance advisor will have reasonable access, at all times during the
term of their appointment, to our authorized representatives, Directors and other officers of
our Company, participate in the communication between the Stock Exchange and our
Company and answer inquiries from the Stock Exchange.
(4) Any meeting between the Stock Exchange and our Directors will be arranged through our
authorized representatives or our compliance advisor or directly with our Directors within a
reasonable time frame. We will inform the Stock Exchange promptly in respect of any
changes in our authorized representatives and our compliance advisor.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM STRICT
COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(5) We intend to retain our Hong Kong legal advisors on on-going compliance requirements, any
amendment or supplement to and other issues arising under the Listing Rules and other
applicable laws and regulations in Hong Kong after the Listing.
JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, we must appoint a company secretary who
possesses the necessary academic or professional qualifications or relevant experience, and is therefore
capable to discharge the functions of the company secretary. Note 1 to Rule 3.28 of the Listing Rules
provides that the Stock Exchange considers the following academic or professional qualifications to be
acceptable:
(1) a member of The Hong Kong Chartered Governance Institute;
(2) a solicitor or a barrister as defined in the Legal Practitioners Ordinance (Chapter 159 of the
Laws of Hong Kong); and
(3) a certified public accountant as defined in the Professional Accountants Ordinance (Chapter
50 of the Laws of Hong Kong).
Note 2 to Rule 3.28 of the Listing Rules further sets out the factors that the Stock Exchange will
consider in assessing an individual’s “relevant experience”:
(1) length of employment with the issuer and other issuers and the roles he/she has undertaken;
(2) familiarity with the Listing Rules and other relevant laws and regulations including the SFO,
the Companies Ordinance, the Companies (Winding Up and Miscellaneous Provisions)
Ordinance and the Takeovers Code;
(3) relevant training taken and/or to be taken in addition to the minimum requirement under
Rule 3.29 of the Listing Rules; and
(4) professional qualifications in other jurisdictions.
Our Company has appointed Mr. Gao as one of our joint company secretaries. Mr. Gao joined our
Group in May 2025 and possesses relevant understanding and knowledge relating to the business
operations and corporate culture of our Group. In his capacity as the director of investment and
financing of our Company, Mr. Gao has actively participated in the preparation of the application for
the Listing and possesses experience in matters relating to our Board and corporate governance of our
Company. Having considered Mr. Gao’s expertise and backgrounds, our Directors consider that Mr. Gao
is capable of discharging the functions of a company secretary and is suitable to perform such role.
As Mr. Gao currently does not possess the qualifications under Rule 3.28 of the Listing Rules, and
may not be able to fulfill the requirements of the Listing Rules on his own, we have appointed Mr.
Chow Shing Lung (“ Mr. Chow ”), an associate member of both The Hong Kong Chartered Governance
Institute (formerly known as the Hong Kong Institute of Chartered Secretaries) and The Chartered
Governance Institute in the United Kingdom, who is qualified under Rule 3.28 of the Listing Rules to
act as the other company secretary and to work closely with and provide assistance to Mr. Gao for an
initial period of three years commencing from the Listing Date.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM STRICT
COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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The following arrangements have been, or will be, put in place to assist Mr. Gao in acquiring the
qualifications and experience as the joint company secretaries of our Company required under Rules
3.28 and 8.17 of the Listing Rules:
(1) In the course of the preparation of the application for the Listing, Mr. Gao has been provided
with a memorandum and has attended a training seminar on the respective obligations of our
Directors and senior management and our Company under the relevant Hong Kong laws and
the Listing Rules provided by our Hong Kong legal advisors.
(2) In addition to the minimum training requirements under Rule 3.29 of the Listing Rules, our
Company will ensure that Mr. Gao continues to have access to relevant training and support
to familiarize himself with the Listing Rules and the duties of a company secretary of an
issuer listed on the Stock Exchange, and to receive updates on the latest changes to the
applicable Hong Kong laws, regulations and the Listing Rules. Furthermore, our Company
will ensure that Mr. Gao and Mr. Chow will seek and have access to the advice from our
Hong Kong legal advisors and other professional advisors as and when required.
(3) Mr. Chow will assist Mr. Gao to acquire the “relevant experience” as required under Note 2
to Rule 3.28 of the Listing Rules and to discharge their duties as company secretaries. Mr.
Gao will be assisted by Mr. Chow for an initial period of three years commencing from the
Listing Date. As part of the arrangement, Mr. Chow will act as one of the joint company
secretaries and communicate regularly with Mr. Gao on matters relating to corporate
governance, the Listing Rules as well as other laws and regulations which are relevant to our
Company. He will also assist Mr. Gao in organizing Board meetings and Shareholders’
meetings as well as other matters of our Company which are incidental to the duties of a
company secretary.
(4) Our Company has appointed the compliance advisor pursuant to Rule 3A.19 of the Listing
Rules, which will act as our additional channel of communication with the Stock Exchange
and provide professional guidance and advice to us and our joint company secretaries as to
compliance with the Listing Rules and all other applicable laws and regulations.
We have applied to the Stock Exchange for, and the Stock Exchange has granted us, a waiver
from strict compliance with the requirements of Rules 3.28 and 8.17 of the Listing Rules. Such waiver
will be revoked immediately if and when Mr. Chow ceases to provide such assistance or ceases to meet
the requirements under Rule 3.28 of the Listing Rules, or if there are material breaches of the Listing
Rules by our Company during the three-year period from the Listing Date. We will liaise with the Stock
Exchange before the end of the three-year period to enable it to assess whether Mr. Gao, having had the
benefit of Mr. Chow’s assistance for three years, will have acquired the relevant experience within the
meaning of Rule 3.28 of the Listing Rules so that a further waiver will not be necessary.
See “Directors and Senior Management” for the biographical details of Mr. Gao and Mr. Chow.
W AIVER IN RELATION TO RULE 4.04(1) OF THE LISTING RULES AND EXEMPTION
FROM COMPLIANCE WITH PARAGRAPH 27 OF PART I AND PARAGRAPH 31 OF PART II
OF THE THIRD SCHEDULE TO THE COMPANIES (WINDING UP AND MISCELLANEOUS
PROVISIONS) ORDINANCE
Applicable Listing Rules and legal requirements
Requirements under the Companies (Winding Up and Miscellaneous Provisions) Ordinance
Pursuant to section 342(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, a prospectus shall include the matters specified in Part I of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance and set out the reports specified in
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM STRICT
COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
–6 8–


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Part II of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
Pursuant to paragraph 27 of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, our Company is required to include in this prospectus a statement
as to the gross trading income or sales turnover (as the case may be) of our Company during each of
the three financial years immediately preceding the issue of this prospectus as well as an explanation of
the method used for the computation of such income or turnover and a reasonable breakdown of the
more important trading activities. Pursuant to Paragraph 31 of Part II of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance, our Company is required to include
in this prospectus a report by the auditor of our Company with respect to profits and losses in respect
of each of the three financial years immediately preceding the issue of this prospectus and assets and
liabilities of our Company at the last date to which the financial statements of our Company were
prepared.
Pursuant to section 342A(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, the SFC may issue, subject to such conditions (if any) as the SFC thinks fit, a certificate of
exemption from compliance with the relevant requirements under the Companies (Winding Up and
Miscellaneous Provisions) Ordinance if, having regard to the circumstances, the SFC considers that the
exemption will not prejudice the interests of the investing public and compliance with any or all of
such requirements would be irrelevant or unduly burdensome, or is otherwise unnecessary or
inappropriate.
Listing Rules
Pursuant to Rule 4.04(1) of the Listing Rules, the accountant’s report contained in this prospectus
must include, inter alia, the results of our Company in respect of each of the three financial years
immediately preceding the issue of this prospectus or such shorter period as may be acceptable to the
Stock Exchange.
Rule 13.49(1) of the Listing Rules requires issuers to publish preliminary financial results not
later than three months after the end of each financial year.
Requirements under the Guide for New Listing Applicants
Pursuant to paragraph 19 of Chapter 1.1A of the Guide for New Listing Applicants published by
the Stock Exchange, where an applicant issues its listing document within three months after the latest
year end, the Stock Exchange has provided the conditions for granting waiver from strict compliance
with Rules 4.04(1) of the Listing Rules as follows:
(1) the listing document must include the financial information for the latest financial year and a
commentary on the results for the year. The financial information to be included in the
listing document must (a) follow the same content requirements as for a preliminary results
announcements under Rule 13.49 of the Listing Rules; and (b) be agreed with the reporting
accountants following their review under Practice Note 730 “Guidance for Auditors
Regarding Preliminary Announcements of Annual Results” issued by the Hong Kong
Institute of Certified Public Accountants;
(2) the applicant must list on the Stock Exchange within three months after the latest year end;
and
(3) the applicant must obtain a certificate of exemption from the SFC on compliance with the
Companies (Winding Up and Miscellaneous Provisions) Ordinance requirements.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM STRICT
COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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Grounds for waiver and exemption application
The financial year of the Company ends on December 31. This prospectus contains the
consolidated results of the Group for the three years ended December 31, 2024 and the ten months
ended October 31, 2025, but does not include the consolidated results of the Group in respect of the
full year immediately preceding the proposed date of issue of the Prospectus, being the full year ended
December 31, 2025, as required under Rule 4.04(1) of the Listing Rules, paragraph 27 of Part I and
paragraph 31 of Part II of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
We consider that a strict compliance with the requirements under Rule 4.04(1) of the Listing
Rules and the requirements under Paragraph 27 of Part I and Paragraph 31 of Part II of the Third
Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance would be unduly
burdensome and the waiver and exemption from strict compliance of these requirements would not
prejudice the interests of the investing public for the following reasons:
(1) there would not be sufficient time for our Company and the reporting accountants of our
Company to finalize the audited financial statements for the year ended December 31, 2025
for inclusion in this prospectus. If the financial information for the year ended December 31,
2025 is required to be audited, our Company and the reporting accountants would have to
carry out substantial volume of work to prepare, update and finalize the Accountants’ Report
and this prospectus, and the relevant sections of this prospectus will need to be updated to
cover such additional period. This would involve additional time and costs since substantial
work is required to be carried out for audit purposes. It would be unduly burdensome for the
audited results for the year ended December 31, 2025 to be finalised in a short period of
time. Our Directors consider that the benefits of such work to the existing and prospective
Shareholders of our Company may not justify the additional work and expenses involved and
the delay of the timetable for the Listing;
(2) our Directors and the Joint Sponsors herein confirm that after performing all reasonable due
diligence work which they consider appropriate, up to the date of this prospectus, there has
been no material adverse change to the financial and trading positions or prospects of our
Group since November 1, 2025 (immediately following the date of the latest audited
statement of financial position in the Accountants’ Report set out in Appendix I to this
prospectus) up to date of this prospectus and there has been no event which would materially
adversely affect the information shown in the Accountants’ Report as set out in Appendix I
to this prospectus, the “Financial Information” section, and information regarding our
Company’s recent development subsequent to the Track Record Period and up to the date of
this prospectus, since November 1, 2025;
(3) the Company has included in this prospectus (i) the Accountant’s Report covering the three
years ended December 31, 2024 and the ten months ended October 31, 2025, (ii) the
unaudited preliminary financial information of the Group for the year ended December 31,
2025 and a commentary on the results for the year, which has been agreed with the Group’s
Reporting Accountant, following their review under Practice Note 730 “Guidance for
Auditors Regarding Preliminary Announcements of Annual Results” issued by the Hong
Kong Institute of Certified Public Accountants, and such disclosure is no less than the
content requirements for a preliminary results announcement under Rule 13.49 of the Listing
Rules, and (iii) the information regarding the recent development of our Group subsequent to
the Track Record Period and up to the Latest Practicable Date;
(4) the Company is of the view that the Accountant’s Report covering the three years ended
December 31, 2022, 2023 and 2024 and the ten months ended October 31, 2025, as set out
in Appendix I to this prospectus, the unaudited pro forma financial information as set out in
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM STRICT
COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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Appendix II to this prospectus, unaudited preliminary financial information for the year
ended December 31, 2025 as set out in Appendix IIB to this prospectus, together with other
disclosure in this prospectus, has already provided the potential investors with adequate and
reasonably up-to-date information in the circumstances to form a view on the track record of
our Company; our Directors confirm, and the Joint Sponsors concur, that all information
which is necessary for the investing public to make an informed assessment of the business,
assets and liabilities, financial position, management and prospects has been included in this
prospectus. Therefore, the waiver and the exemption would not prejudice the interests of the
investing public;
(5) the Company will not be in breach of its Articles of Association or laws and regulations of
the PRC or other regulatory requirements as a result of not publishing its preliminary results
announcement for the year ended December 31, 2025 in accordance with Rule 13.49(1) of
the Listing Rules. Pursuant to the Note to Rule 13.49(1) of the Listing Rules, our Company
will publish an announcement after Listing and no later than March 31, 2026 stating that the
relevant financial information has been included in this prospectus; and
(6) the Company will comply with the requirements under Rule 13.46 of the Listing Rules in
respect of the publication of its annual report. The Company currently expects to issue its
annual report for the financial year ended December 31, 2025 on or before April 30, 2026.
In this regard, the Directors consider that the Shareholders, the investing public, as well as
potential investors of the Company, will be kept informed of the financial results of the
Group for the financial year ended December 31, 2025.
The waiver and exemption application
In light of the above, we have applied for, and the Stock Exchange has granted us, a waiver from
strict compliance with the requirements under Rule 4.04(1) of the Listing Rules relating to inclusion in
the Accountant’s Report of the consolidated results of our Group in respect of the full financial year
ended December 31, 2025, on the conditions that: (i) this Prospectus will be issued on or before
Monday, March 23, 2026 and the Listing Date shall not be later than three months after the latest
financial year end of our Company (i.e. on or before March 31, 2026); (ii) we have obtained from the
SFC a certificate of exemption from strict compliance with the requirements under section 342(1) in
relation to paragraphs 27 and 31 of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance; (iii) the preliminary unaudited financial information for the year
ended December 31, 2025 and a commentary on the results for the year shall be included in the
Prospectus; and (iv) the Company is not in breach of its constitutional documents or laws and
regulations of PRC or other regulatory requirements regarding its obligation to publish preliminary
results announcements.
We have also applied for, and the SFC has granted us, a certificate of exemption under section
342A of the Companies (Winding Up and Miscellaneous Provisions) Ordinance from strict compliance
with the requirements under paragraph 27 of Part I and paragraph 31 of Part II of the Third Schedule to
the Companies (Winding Up and Miscellaneous Provisions) Ordinance on the conditions that: (i) the
particulars of this exemption are set out in the Prospectus; (ii) the Prospectus will be issued on or
before Monday, March 23, 2026 and the Company’s H Shares will be listed on or before March 31,
2026, i.e. three months after the latest financial year-end.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM STRICT
COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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DIRECTORS’ RESPONSIBILITY STATEMENT
This prospectus, for which our Directors collectively and individually accept full responsibility,
includes particulars given in compliance with the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules (Chapter 571V of the
Laws of Hong Kong) and the Listing Rules for the purpose of giving information with regard to us. Our
Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief
the information contained in this prospectus is accurate and complete in all material respects and not
misleading or deceptive, and there are no other matters the omission of which would make any
statement herein or this prospectus misleading.
FILING PROCEDURES WITH THE CSRC
We filed with the CSRC for the application to list our H Shares on the Stock Exchange and the
Global Offering on July 1, 2025. The CSRC subsequently confirmed our completion of filing
application procedures on February 6, 2026. In completing such filing, the CSRC accepts no
responsibility for our financial soundness, nor for the accuracy of any of the statements made or
opinions expressed in this prospectus. No other filings are required to be completed before the listing of
the H Shares on the Stock Exchange.
UNDERWRITING AND INFORMATION ON THE GLOBAL OFFERING
This prospectus is published solely in connection with the Hong Kong Public Offering. For
applications under the Hong Kong Public Offering, this prospectus contains the terms and conditions of
the Hong Kong Public Offering.
The listing of our H Shares on the Stock Exchange is sponsored by the Joint Sponsors and the
Global Offering is managed by the Overall Coordinators. Pursuant to the Hong Kong Underwriting
Agreement, the Hong Kong Public Offering is underwritten by the Hong Kong Underwriters on a
conditional basis, with one of the conditions being that the Offer Price is agreed between the Overall
Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and us. The International
Offering is managed by the Overall Coordinators. The International Underwriting Agreement is
expected to be entered into on or about the Price Determination Date, subject to determination of the
pricing of the H Shares and agreement on the Offer Price between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and us. For details of the Underwriters and the
underwriting arrangements, please refer to the section headed “Underwriting” in this prospectus.
The H Shares are offered solely on the basis of the information contained and representations
made in this prospectus and on the terms and subject to the conditions set out herein and therein. No
person is authorized to give any information in connection with the Global Offering or to make any
representation not contained in this prospectus, and any information or representation not contained
herein must not be relied upon as having been authorized by our Company, the Joint Sponsors, the
Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers,
the Underwriters, the Capital Market Intermediaries, any of their respective directors, agents, employees
or advisors or any other party involved in the Global Offering.
Neither the delivery of this prospectus nor any subscription or acquisition made under it shall,
under any circumstances, create any implication that there has been no change in our affairs since the
date of this prospectus or that the information in this prospectus is correct as at any subsequent time.
For details of the structure of the Global Offering, including its conditions, please refer to the
section headed “Structure of the Global Offering” in this prospectus. For the procedures for applying
for our H Shares, please refer to the section headed “How to Apply for Hong Kong Offer Shares” in
this prospectus. For details of the arrangements relating to the Over-allotment Option and stabilization,
please refer to the section headed “Structure of the Global Offering” in this prospectus.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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DETERMINATION OF THE OFFER PRICE
The H Shares are being offered at the Offer Price which will be determined by the Overall
Coordinators (for themselves and on behalf of the Underwriters) and us on or before Friday, March 27,
2026 or such later date as may be agreed upon between the Overall Coordinators (for themselves and
on behalf of the Underwriters) and us, and in any event no later than 12:00 noon on Friday, March 27,
2026. If the Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company
are unable to reach an agreement on the Offer Price on such date, the Global Offering will not proceed.
INFORMATION ABOUT THIS PROSPECTUS
You should rely only on the information contained in this prospectus to make your investment
decision. We have not authorized anyone to provide you with information that is different from what is
contained in this prospectus. Any information or representation not made in this prospectus must not be
relied on by you as having been authorized by us, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Sponsors, the Joint Lead Managers, any of the
Underwriters, any of our or their respective directors, officers or representatives or any other person
involved in the Global Offering. Neither the delivery of this prospectus nor any offering, sale or
delivery made in connection with the H Shares should, under any circumstances, constitute a
representation that there has been no change or development reasonably likely to involve a change in
our affairs since the date of this prospectus or imply that the information contained in this prospectus is
correct as of any date subsequent to the date of this prospectus.
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.
RESTRICTIONS ON OFFERS AND SALES OF THE H SHARES
Each person acquiring the H Shares under the Hong Kong Public Offering will be required to, or
be deemed by his acquisition of the H Shares to, confirm that he is aware of the restrictions on offers
of the H Shares described in this prospectus.
No action has been taken to permit a public offering of the H 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 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 OF THE H SHARES ON THE STOCK EXCHANGE
We have applied to the Listing Committee for the listing of, and permission to deal in, the H
Shares in issue and to be issued pursuant to the Global Offering (including any H Shares which may be
issued pursuant to the exercise of the Over-allotment Option) and the Conversion of Domestic Shares
into H Shares, on the basis that, among other things, we satisfy the requirement under Rule 18C.03 of
the Listing Rules as a Commercial Company (as defined in the Listing Rules) with reference to our
expected market capitalization at the time of Listing, which, based on the Offer Price, exceeds HK$4
billion.
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, if
the permission for the H Shares to be listed on the Stock Exchange pursuant to this prospectus has been
refused before the expiration of three weeks from the date of the closing of the application list or such
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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longer period not exceeding six weeks as may, within the said three weeks, be notified to us by or on
behalf of the Stock Exchange, then any allotment made on an application in pursuance of this
prospectus shall, whenever made, be void.
All the Offer Shares will be registered on our H Share register of members in order to enable
them to be traded on the Stock Exchange. None of our share or loan capital is listed or dealt in on any
other stock exchange and no such listing or permission to list is being or is expected to be sought in the
near future.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, the H Shares (including any H
Shares which may be issued pursuant to the exercise of the Over-allotment Option) on the Stock
Exchange and compliance with the stock admission requirements of HKSCC, the H Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect
from the 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 H 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.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for Hong Kong Offer Shares are set out in the section headed “How
to Apply for Hong Kong Offer Shares”.
H SHARE REGISTER AND STAMP DUTY
Our principal register of members will be maintained in the PRC and our H Share register of
members will be maintained by our H Share Registrar, Computershare Hong Kong Investor Services
Limited in Hong Kong.
All Offer Shares will be registered on our H Share register of members. Dealings in the H Shares
registered on our H Share register of members will be subject to Hong Kong stamp duty.
REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
Persons applying for or purchasing H Shares under the Global Offering are deemed, by their
making an application or purchase, to have represented that they are not close associates (as such term
is defined in the Listing Rules) of any of our Directors or any existing Shareholders or a nominee of
any of the foregoing.
PROFESSIONAL TAX ADVICE RECOMMENDED
You should consult your professional advisors if you are in any doubt as to the taxation
implications of subscribing for, purchasing, holding or disposing of, or dealing in, the H Shares or
exercising any rights attaching to the H Shares. We emphasize that none of our Company, the Joint
Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the Underwriters, the Capital Market Intermediaries, any of our or their respective
directors, officers or representatives or any other person involved in the Global Offering accepts
responsibility for any tax effects or liabilities resulting from your subscription, purchase, holding or
disposing of, or dealing in, the H Shares or your exercise of any rights attaching to the H Shares.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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EXCHANGE RATE CONVERSION
Unless otherwise specified, this prospectus contains certain translations for the convenience
purposes at the following rates:
HK$1.00 : RMB0.88163
US$1.00 : RMB6.9007
No estimation is made that any amounts in HK$, RMB and US$ can be or could have been
converted at the relevant dates at the above rates or any other rates at all.
LANGUAGE
If there is any inconsistency between this prospectus and the Chinese translation of this
prospectus, this prospectus shall prevail unless otherwise stated. However, the translated English names
of the PRC and foreign national, entities, departments, facilities, certificates, titles, laws, regulations
(including certain of our subsidiaries) and the like included in this prospectus are translations of their
Chinese names and are included for identification purpose only. If there is any inconsistency, the names
in their original languages shall prevail.
The English names of companies incorporated in the PRC are translations from their Chinese
names and included for identification purpose only.
COMMENCEMENT OF DEALING IN THE H SHARES
Dealings in the H Shares on the Stock Exchange are expected to commence at 9:00 a.m. on
Tuesday, March 31, 2026. The H Shares will be traded in board lots of 100 H Shares each.
OTHER
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
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DIRECTORS
Name Address Nationality
Executive Directors:
Mr. Xu Xiaolin (؍Room 401, No. 18, Lane 669, Liuying Road,
Shanghai, PRC
Chinese
Mr. Liu Baoliang (Ԅ) Room 1102, No. 2, Lane 591, Donglan Road,
Minhang District, Shanghai, PRC
Chinese
Mr. Qian Shun ( ፺ഭ) Room 202, No. 8, Lane 333, Fangdian Road,
Pudong New Area, Shanghai, PRC
Chinese
Ms. Yu Bingbing (ΏΏ) Room 1604, Building A, 868 Changping Road,
Jing’an District, Shanghai, PRC
Chinese
Non-executive Directors:
Mr. Chen Binglin (؍Room 401, No. 44, Lane 1155, Guanglan Road,
Pudong New Area, Shanghai, PRC
Chinese
Mr. Lin Enfeng (ࢤࢸ؍Room 502, No. 15, Lane 1177, Shangcheng
Road, Pudong New Area, Shanghai, PRC
Chinese
Independent Non-executive Directors:
Mr. Liu Hongcan ( ᄎ҃ᐆ) 17E, Honghui Building, 332 Zhongshan Road,
Siming District, Xiamen, Fujian Province, PRC
Chinese
Ms. Liu Liping ( ᄎᘆറ) Unit 201, Building 55, Phase II, Zhaoshang
Haide Park, Jimei District, Xiamen, Fujian
Province, PRC
Chinese
Mr. Dai Xueguang ( Ꮦ௛Έ) Room A-0531, 8 Hung Luen Road,
Hunghom Bay, Kowloon, Hong Kong
Chinese (Hong
Kong)
For the biographies and other relevant information of our Directors, see “Directors and Senior
Management”.
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors Guotai Junan Capital Limited
26/F−28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Orient Capital (Hong Kong) Limited
28/F−29/F
100 Queen’s Road Central
Central, Hong Kong
Overall Coordinators, Joint Sponsor-OCs
and Joint Global Coordinators
Guotai Junan Securities (Hong Kong) Limited
26/F−28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Orient Securities (Hong Kong) Limited
28/F−29/F
100 Queen’s Road Central
Central, Hong Kong
Joint Bookrunners Guotai Junan Securities (Hong Kong) Limited
26/F−28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Orient Securities (Hong Kong) Limited
28/F−29/F
100 Queen’s Road Central
Central, Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Futu Securities International (Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Y ellow River Securities Limited
Room 2701B, 27/F, Tower 1
Admiralty Center
18 Harcourt Road
Admiralty, Hong Kong
Shenwan Hongyuan Securities (H.K.) Limited
Level 6, Three Pacific Place
1 Queen’s Road East
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road, Kowloon
Hong Kong
Huafu International Securities Limited
Units 2603−2604, 26/F, Infinitus Plaza
199 Des V oeux Road Central, Sheung Wan
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Yuen Meta (International) Securities Limited
2601, 26/F, Wanchai Central Building
89 Lockhart Road
Wanchai, Hong Kong
Zheshang International Financial Holdings Co.,
Limited
1703−1706, 17/F, Infinitus Plaza
199 Des V oeux Road Central, Sheung Wan
Hong Kong
Joint Lead Managers Guotai Junan Securities (Hong Kong) Limited
26/F−28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Orient Securities (Hong Kong) Limited
28/F−29/F
100 Queen’s Road Central
Central, Hong Kong
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Capital Market Intermediaries Guotai Junan Securities (Hong Kong) Limited
26/F−28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Orient Securities (Hong Kong) Limited
28/F−29/F
100 Queen’s Road Central
Central, Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Futu Securities International (Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Y ellow River Securities Limited
Room 2701B, 27/F, Tower 1
Admiralty Center
18 Harcourt Road
Admiralty, Hong Kong
Shenwan Hongyuan Securities (H.K.) Limited
Level 6, Three Pacific Place
1 Queen’s Road East
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road, Kowloon
Hong Kong
Huafu International Securities Limited
Units 2603−2604, 26/F, Infinitus Plaza
199 Des V oeux Road Central, Sheung Wan
Hong Kong
Yuen Meta (International) Securities Limited
2601, 26/F, Wanchai Central Building
89 Lockhart Road
Wanchai, Hong Kong
Zheshang International Financial Holdings Co.,
Limited
1703−1706, 17/F, Infinitus Plaza
199 Des V oeux Road Central, Sheung Wan
Hong Kong
Legal Advisors to our Company As to Hong Kong and U.S. laws:
Baker & McKenzie
14/F, One Taikoo Place
979 King’s Road
Quarry Bay
Hong Kong
As to PRC laws:
Commerce & Finance Law Offices
10/F, Tower 1, Jing An Kerry Centre
1515 West Nanjing Road
Shanghai 200040
PRC
As to International Sanction Law:
Commerce & Finance Law Offices LLP
45 Rockefeller Plaza, Suite 2000
New York, NY 10111
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 89 ---
As to the Litigation:
Fangda Partners
24/F, HKRI Centre Two, HKRI Taikoo Hui
288 Shi Men Yi Road
Shanghai 200041, China
Legal Advisors to the Joint Sponsors and
the Underwriters
As to Hong Kong laws:
Jingtian & Gongcheng LLP
Suites 3203−3209, 32/F, Edinburgh Tower
The Landmark
15 Queen’s Road Central
Hong Kong
As to PRC laws:
Jingtian & Gongcheng
34/F, Tower 3, China Central Place
77 Jianguo Road
Chaoyang District, Beijing
PRC
Auditors and Reporting Accountants Ernst & Y oung
Certified Public Accountants
Registered Public Interest Entity Auditors
27/F, One Taikoo Place
979 King’s Road
Quarry Bay
Hong Kong
Transfer Pricing Advisor SHINEWING Tax and Business Advisory Limited
17/F, Leighton Centre
77 Leighton Road
Causeway Bay
Hong Kong
Independent Industry Consultant Frost & Sullivan (Beijing) Inc., Shanghai Branch
Co.
2504 Wheelock Square
1717 Nanjing West Road
Shanghai 200040
PRC
Receiving Bank 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
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--- page 90 ---
Registered Office and Headquarters Room 303, Building 4
Second Street, Gangcheng Square
No. 88 Yunjuan Road, Lane 11
Lin-gang Special Area
China (Shanghai) Free Trade Pilot Zone
PRC
Principal Place of Business in Hong
Kong
46/F, Hopewell Centre
183 Queen’s Road East
Wan Chai, Hong Kong
Company’s Website www.foursemi.com
(information contained in this website does not form
part of this Prospectus)
Joint Company Secretaries Mr. Gao Wenchao ( ৷˖൴)
9th floor, Building 1
Yuanzhong Industrial Building Phase III
2007 Hongmei Road, Xuhui District
Shanghai
PRC
Mr. Chow Shing Lung ( ཅ፴Ꮂ)
46/F, Hopewell Centre
183 Queen’s Road East
Wan Chai, Hong Kong
Authorized Representatives Mr. Xu Xiaolin (؍)
Room 401, No. 18, Lane 669
Liuying Road
Shanghai
PRC
Mr. Gao Wenchao ( ৷˖൴)
9th floor, Building 1
Yuanzhong Industrial Building Phase III
2007 Hongmei Road, Xuhui District
Shanghai
PRC
Audit Committee Mr. Liu Hongcan ( ᄎ҃ᐆ)( Chairman )
Ms. Liu Liping ( ᄎᘆറ)
Mr. Dai Xueguang ( Ꮦ௛Έ)
Nomination Committee Mr. Xu Xiaolin (؍()Chairman )
Mr. Dai Xueguang ( Ꮦ௛Έ)
Ms. Liu Liping ( ᄎᘆറ)
Remuneration and Appraisal Committee Mr. Liu Hongcan ( ᄎ҃ᐆ)( Chairman )
Ms. Liu Liping ( ᄎᘆറ)
Mr. Xu Xiaolin (؍)
CORPORATE INFORMATION
–8 1–


--- page 91 ---
Compliance Adviser Orient Capital (Hong Kong) Limited
28/F−29/F
100 Queen’s Road Central
Central, Hong Kong
H Share Registrar Computershare Hong Kong Investor Services
Limited
Shop 1712−1716, 17th Floor
Hopewell Centre
183 Queen’s Road East, Wan Chai
Hong Kong
Principal Banks Shanghai Pudong Development Bank Xuhui
Branch
No. 589 Jianguo West Road
Xuhui District, Shanghai
PRC
Industrial Bank Co., Ltd. Shanghai Nanxiang
Branch
Building No. 1, Lane 819, Yinxiang Road
Jiading District, Shanghai
PRC
Industrial and Commercial Bank of China Limited
Shanghai Kaixuan Road Branch
1/F, No. 436 Wuyi Road
Changning District, Shanghai
PRC
CORPORATE INFORMATION
–8 2–


--- page 92 ---
The information and statistics set out in this section and other sections of this prospectus were
extracted from the report prepared by Frost & Sullivan, which was commissioned by us, and from
various official government publications and other publicly available publications. We engaged
Frost & Sullivan to prepare the F&S report, an independent industry report, in connection with the
Global Offering. The information from official government sources has not been independently
verified by us, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Underwriters, the Capital Market Intermediaries
or any of our or their respective directors, senior management, representatives or any other person
involved in the Global Offering and no representation is given as to its accuracy. The relevant
information and statistics may not be consistent with such other information and statistics compiled
within or outside China.
SOURCES OF INFORMATION AND RESEARCH METHODOLOGY
This section includes information from the F&S report, a report commissioned by us from Frost &
Sullivan, as we believe such information imparts a greater understanding of the industry. Frost &
Sullivan is an independent global consulting firm founded in 1961 in New York, and provides market
research on a variety of industries, among other services. We have agreed to pay Frost & Sullivan a fee
of RMB300,000. The F&S report has been prepared by Frost & Sullivan independently without any
influence from us or other interested parties.
In preparing the F&S report, Frost & Sullivan conducted (1) primary research, which involved
discussing the status of the industry with certain leading industry participants, and interviews with
industry experts on a best-effort basis to collect information in aiding in-depth analysis; and (2)
secondary research, which involved reviewing company reports, independent research reports and data
based on its own research database. Frost & Sullivan also assumed that China’s economy is likely to
maintain its steady growth in the forecast period and China’s social, economic and political
environment is likely to remain stable in the forecast period.
DIRECTORS’ CONFIRMATION
Our Directors confirm that they have exercised reasonable care in selecting and identifying the
information sources in this section, compiling, extracting and reproducing such information, and
ensuring no material omission of such information.
OVERVIEW OF CHINA’S POWER AMPLIFIER AUDIO CHIP INDUSTRY
Definition of Power Amplifier Audio Chip
Power amplifier audio chips are chip modules based on mixed-signal design, differing from
traditional audio chips with fixed volume and single mechanical sound output. Power amplifier audio
chips utilize built-in or external audio algorithms, digital interface inputs, gain, equalizers, dynamic
range adjustments, and other audio modules to achieve efficient audio signal processing and optimized
output.
Classification of Power Amplifier Audio Chips
Low-power audio chips
Low-power audio chips enable precise output control within low-power output ranges, and are
therefore widely used in various consumer electronic devices, including smartphones, tablets, smart
wearables, and VR/AR devices, to maximize sound quality and volume within the constraints of
compact speaker designs. With algorithms, low-power audio chips accurately predict or measure the
physical limits of a speaker (such as real-time power, membrane excursion, speaker current and voltage,
INDUSTRY OVERVIEW
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and speaker coil temperature). The chip’s internal signal processing unit adjusts the signal output in real
time to enable the speaker to operate in its optimal state, achieving maximum output without damaging
the speaker and ensuring reliability.
 Adaptive power control audio chips: Adaptive power control audio refers to the process
where the audio chip analyzes the customer’s acoustic cavity structure through modeling and
uses algorithms to dynamically adjust input and output signals in real time to match the
acoustic environment. This enables the speaker to operate in an optimal and safe state.
Meanwhile, the overall audio effect of the system is maximized through audio enhancement
and scene adaptive algorithms.
 portable power amplifier audio chip: Compared to the adaptive power control audio chip
series, portable power amplifier audio chip adds current and voltage sensing. By detecting
the speaker’s current and voltage in real time, the chip can detect and control the speaker
more accurately, thus achieving the complete closed loop of the system. At the same time,
portable power amplifier audio chip usually has higher output power and better analog
performance, generally resulting in better audio effects of speakers.
Mid/high-power audio chips
Audio signal amplification and driver chips with an output power of over 10W convert audio
signals into high-power output by controlling audio effect algorithms (such as dynamic range
enhancement technology, power consumption reduction, and smart audio amplifier control) to drive
speakers, addressing core needs like high-fidelity playback, low distortion, and high-volume output.
Mid/high-power audio chips are mainly used in devices such as smart displays, soundbars, and car
audio systems.
Among them, automotive-grade power amplifier audio chips are special high-power chips
specifically designed for in-vehicle environments. In intelligent vehicles, automotive-grade power
amplifier audio chips are widely used in intelligent cabins, automotive infotainment system, A V AS and
T-BOX, among others.
Analysis of Business Models in the Power Amplifier Audio Chip Market
The power amplifier audio chip industry primarily has two operating models: fabless and IDM:
The fabless model refers to a model where a company focuses on chip design and sales, while
outsourcing production processes like wafer fabrication, packaging and testing to specialized foundries
and packaging/testing companies. This model features strong in-house design capabilities, more flexible
market responses, production collaborations that are not limited by proprietary production lines, and
more flexible production capacity. The IDM model refers to a model where a company handles all
stages of the industry chain, from chip design, manufacturing, packaging, and testing to product sales.
Due to its asset-intensive nature, few companies in the industry adopt this model, and it is more
common among large overseas integrated manufacturers.
The figure below shows a schematic diagram of the two main business models:
Fabless
Model
IDM Model
Chip Design
Company
Vertically Integrated Manufacturer
Chip
Design
Outsourcing to
Wafer Manufacturer
Wafer
Fabrication
Outsourcing to
Packaging Company
Packaging
and Testing
Distributorship/
Direct Sales
Sales Model
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 Prevalence of Distributorship: Due to the wide range of downstream applications, distributors
typically play an important role in the sales process of power amplifier audio chips. Through
distributor networks, power amplifier audio chip companies can reach dispersed end customers
and reduce sales costs. The distributorship system plays an irreplaceable role for power amplifier
audio chip companies in terms of regional coverage, product delivery, logistics optimization,
inventory buffering and responsiveness to small-batch orders.
Analysis of China’s Power Amplifier Audio Chip Market Industry Chain
The upstream of the power amplifier audio chip industry mainly includes wafer fabrication, chip
packaging and testing, and chip design tools, which provide the necessary technological foundation and
manufacturing prerequisites.
The midstream consists of chip design and sales companies, which complete chip R&D, design,
and sales based on their innovative R&D capabilities and accumulated professional knowledge.
Downstream is distributed across application domains, such as consumer electronics, intelligent
vehicles, and robotics. The diversity of downstream demand drives power amplifier audio chip design
and manufacturing companies to establish comprehensive product libraries to meet the needs of
different customers.
Upstream
Power Amplifier Audio Chip Industry Chain
Midstream Downstream
Production and manufacturing
For example, silicon materials,
manufacturing equipment and automated design
Chip packaging and testing
For example, flip-chip packaging,
3D packaging and wafer-level packaging
Chip design tool
Materials and equipment
Chip process R&D
Chip design
Chip sales
Power amplifier audio chip
design and solution providers
Intelligent vehicles
For example, in-vehicle audio systems,
voice interaction control, and
driving assistance sound effects
Consumer electronics
For example, smartphones, tablets,
smart speakers and wearable devices
Robots
Major application
scenarios
Others
Data Source: Frost & Sullivan
Global Power Amplifier Audio Chip Market Size
In terms of total revenue, the global power amplifier audio chip market size has grown from
RMB5.3 billion in 2020 to RMB8.9 billion in 2024, with a CAGR of 13.6% during the period. Driven
by technological advancements and the further expansion of downstream applications, the global power
amplifier audio chip market size is expected to reach RMB20.4 billion by 2029, with a CAGR of
18.1%.
CAGR 2020 -2024 2025E -2029E
Global 13.6% 18.1%
ROW 12.6% 17.0%
China 14.9% 19.4%
2.4 2.7 3.1 3.6 4.1 4.9 5.9 7.0 8.3 9.93.0 3.3 3.8 4.2 4.8 5.6
6.5
7.6
8.9
10.4
0.0
5.0
10.0
15.0
20.0
25.0
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
20.4
17.3
14.6
12.4
10.5
8.97.86.96.05.3
Global Power Amplifier Audio Chip Market Size, 2020-2029E
ROW ChinaRMB Billion
Data Source: Frost & Sullivan
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Size of China’s Power Amplifier Audio Chip Market by Product Type
The market size of low-power audio chips grew from RMB1.1 billion in 2020 to RMB1.9 billion
in 2024, with a CAGR of 14.1% during the period. With the deepening of AI applications in consumer
electronics and the upgrading of audio solutions, the growth of low-power audio chips market size will
accelerate in the future, reaching RMB4.4 billion by 2029, with a CAGR of 18.7% from 2025 to 2029.
Driven by the continuous growth in the use of in-vehicle speakers and the surge in demand for AI
tuning, Mid/high-power audio chips have shown higher growth potential. The market size grew from
RMB1.3 billion in 2020 to RMB2.2 billion in 2024, and is expected to further grow at a CAGR of
19.9% to RMB5.5 billion by 2029.
China’s Power Amplifier Audio Chip Market Size (by Product Type), 2020-2029E
RMB Billion
1.3 1.5 1.7 1.9 2.2 2.7 3.2 3.9 4.6 5.5
1.1 1.3 1.4 1.6 1.9
2.2
2.6
3.1
3.7
4.4
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
2.4 2.7 3.1 3.6
4.1
4.9
5.9
7.0
8.3
9.9
CAGR 2020-2024 2025E-2029E
Total 14.9% 19.4%
14.1% 18.7%
15.6% 19.9%
Low Power Audio Chips
Mid/high Power Audio Chips
Data Source: Frost & Sullivan
Drivers of China’s Power Amplifier Audio Chip Market
 Rapid Upgrade in Demand for Audio Interaction in Consumer Electronics: As the demand for
intelligent voice interaction in consumer electronics increases, there is a need for simultaneous
enhancement of technologies like power amplifier audio chips and audio power control
algorithms.
 Demand in Display Devices: The trend of integrating audio and display is becoming more
prominent. In 2024, the global shipment of power amplifier audio chips used in smart displays
was approximately 90.0 million units. It is projected to continue expanding at a CAGR of 12.0%,
reaching a shipment volume of 160.0 million units by 2029. In 2024, the shipment volume of
China’s domestically produced power amplifier audio chips for smart screens was approximately
45.0 million units. With the wide penetration of smart display devices and domestic substitution
market size of power amplifier audio chips for smart displays will continue expanding at a CAGR
of 15.0%, with shipment volume reaching 90.5 million units by 2029.
 Upgrade of In-vehicle Audio Software and Hardware Configuration: The application of
multi-channel audio systems has become more widespread, including more overhead speakers and
subwoofer configurations. The mainstream in-vehicle speaker configurations in the market have
gradually upgraded from around four speakers to 15 or more in 2024, and it is expected that more
and more vehicle models will be equipped with over 20 speakers in the future. The ability to
automatically adjust audio effects based on user preferences and the current environment through
AI algorithms has become a key area of competition.
 Accelerated Penetration in Emerging Sectors: China’s power amplifier audio chip industry has
achieved broad coverage in mainstream markets such as consumer electronics, intelligent vehicles,
and IoT devices (e.g., smart speaker). However, penetration rates remain relatively low in
emerging application areas like industrial IoT and smart cities. As IoT segments like smart city
and industrial IoT infrastructure accelerate development, these emerging sectors will become key
engines for future industry growth.
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 Cost Trends: The cost structure of power amplifier audio chips is mainly composed of wafer
fabrication, packaging and testing. To reduce overall costs, companies are gradually adopting
various cost-reduction measures, such as implementing tiered wafer cost control through a
mixed-process strategy, which can reduce the cost per transistor by 30%−35%; shortening R&D
cycles and reducing design verification costs by 70% by designing key IP in-house and reusing IP,
ensuring a high success rate for development; amortizing small-batch production costs through
multi-project wafer technology, with single designs costing only 5%−10% of a full mask;
additionally, companies reduce procurement costs by signing long-term agreements with foundries
and packaging and testing vendors to lock in production capacity and prices; in the testing phase,
cooperating with testing vendors to develop automated testing production lines to reduce costs,
and by establishing a pre-verification mechanism and adopting lean testing processes, the
verification cycle is further shortened by 40%.
Major Cost and Price Trends in the Power Amplifier Audio Chip Industry
The main costs of power amplifier audio chips are composed of wafer fabrication, packaging and
testing, and IP design tool licensing among others. Changes in the prices of major raw materials have
driven a downward trend in the historical sales prices of audio chip companies’ final products. The
average unit price of power amplifier audio chips decreased from RMB1.6 per unit in 2020 to RMB1.2
per unit in 2024, a drop of 25%.
Over the past three years, wafer prices in China have shown a downward trend. In 2020, the price
was RMB12,201.0 per wafer. Due to fierce market competition, various wafer manufacturers have
reduced prices. At the same time, technological advancements leading to cost reductions and economies
of scale have also driven wafer prices down, reaching RMB7,232.8 per wafer in 2024.
Average Price Trend of Wafers in China, 2020-2024
RMB/wafer
12,201.0
10,614.9
9,234.9
8,126.8
7,232.8
0.0
2,000.0
4,000.0
6,000.0
8,000.0
10,000.0
12,000.0
14,000.0
2020 2021 2022 2023 2024
Data Source: Frost & Sullivan
As power amplifier audio chips mainly use high-end packaging technology such as wafer-level
packaging (WLP) and flip-chip, the average packaging price rose from RMB0.10 per unit in 2020 to
RMB0.15 per unit in 2022. In 2024, with improved yield rates and process standardization, the average
unit price decreased to RMB0.10 per unit.
The Average Price Trend of Power Amplifier Audio Chips Industry
The average unit price in 2020 was approximately RMB 1.7. From 2020 to 2023, China’s audio
chip prices showed a downward trend, primarily due to the entire industry entering an inventory
adjustment period. Companies were forced to reduce prices to clear inventory, leading to a sustained
decline in the industry-wide average chip price. Concurrent factors included increasingly mature chip
technology, optimized local supply chains, the 2023 semiconductor industry inventory adjustment, and
price wars among manufacturers. By 2023, the average chip price had fallen to approximately RMB 1.0
per unit, representing a 41% decrease from 2020.
After 2024, inventory adjustments among manufacturers will largely conclude. Audio chip prices
are expected to stabilize and begin a gradual recovery starting in 2025. By 2029, the average chip price
is projected to rebound to RMB 1.3 per unit.
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1.7
1.6
1.5
1.0
1.1 1.1
1.2 1.2
1.3 1.3
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
The Average Price Trend of Power Amplifier Audio Chips in China, 2020-2029ERMB/unit
Data Source: Frost & Sullivan
OVERVIEW OF CHINA’S HAPTIC DRIVER INDUSTRY
Definition of Haptic Driver
A Haptic Driver is a specialized electronic component or integrated circuit designed to control and
drive actuators, such as vibration motors, to generate tactile feedback in electronic devices. This
feedback simulates the sense of touch, enhancing the user’s interactive experience with the device. The
core function of a haptic driver is to receive commands from a device’s main processor and translate
them into precise electrical signals that control the actuator’s movements.
China’s Haptic Driver Market Size
China’s haptic drivers market size grew from RMB6.9 billion in 2020 to RMB9.8 billion in 2024,
with a CAGR of 9.0%. Driven by the accelerated domestic substitution and growing demand for
intelligent cabins, the market size of haptic drivers is projected to reach RMB11.4 billion in 2025, and
grow at a CAGR of 17.0% to RMB21.4 billion by 2029. The shipment volume of its core technology,
linear motor drivers, reached 300 million units in 2024 and is projected to grow at a CAGR of 38.0% to
1.5 billion units by 2029.
Market Size of Haptic Driver Industry in China, 2020-2029E
RMB billion
CAGR 2020-2024 2025E-2029E
China 9.0% 17.0%
6.9
7.5 8.2
9.0 9.8
11.4
13.4
15.6
18.3
21.4
Haptic Driver
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
22.0
2029E2028E2027E2026E2025E20242023202220212020
Data Source: Frost & Sullivan
Drivers of China’s Haptic Driver Market
 Surging Demand from Automotive Intelligence: As vehicles become more intelligent, the role of
haptic feedback is evolving from a simple notification tool to a critical component for safety and
an enhanced user experience.
 Proliferation in Consumer Electronics: Consumer expectations for realistic tactile feedback
during typing, gaming, and notifications continue to push technology towards greater refinement
and lower power consumption. The trend is also strong in wearable devices like smartwatches and
emerging AR/VR equipment, which rely on haptics for information delivery and interaction.
 Broadening Applications: The application of haptic technology is expanding into industrial
automation (for precise robotic control) and the medical field (for rehabilitation robotics and
remote surgery with force feedback), indicating significant future growth potential.
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MARKET COMPETITION ANALYSIS
Global and China’s Power Amplifier Audio Chip Market Competitive Landscape and Market
Share
In 2024, the global shipment volume of power amplifier audio chips was approximately 5.0 billion
units. Our Company achieved a total annual global shipment volume of 460 million power amplifier
audio chips, accounting for a global market share of approximately 9.2%, ranked third among power
amplifier audio chip companies globally and holding a leading position.
By revenue, our Company, accounting for a global market share of approximately 4.1%, ranked
fourth among power amplifier audio chip companies globally.
Ranking Company Revenue
(RMB billion)
Market Share
(%) Ranking Company  Shipment Volume
(100 million Units)
Market Share
(%)
1 Company C 2.47 27.8% 1 Company A 6.8 13.5%
2 Company A 0.72 8.2% 2 Company B 6.5 13.0%
3 Company B 0.64 7.2% 3 The Company 4.6 9.2%
4 The Company 0.36 4.1% 4 Company C 4.4 8.8%
5 Company D 0.31 3.5% 5 Company D 2.5 5.0%
Top Five Total 4.50 50.8% Top Five Total 24.8 49.5%
Total 8.87 100.0% Total 50.0 100.0%
Enterprise Ranking in Global Power Amplifier Audio Chip Market, by Revenue / Shipment Volume, 2024
Data Source: Frost & Sullivan, Annual Reports
In 2024, the shipment volume of power amplifier audio chips in the China region was
approximately 2.5 billion units. Our Company achieved a total annual shipment volume of 400 million
power amplifier audio chips in China, accounting for a market share of approximately 15.8%, ranked
second in China and possessing a significant advantage in market position.
By revenue, our Company, accounting for a market share of approximately 8.5%, ranked third
among power amplifier audio chip companies in China market.
Enterprise Ranking in China’s Power Amplifier Audio Chip Market, by Revenue / Shipment Volume, 2024
Ranking Company Revenue
(RMB billion)
Market Share
(%) Ranking Company  Shipment Volume
(100 million Units)
Market Share
(%)
1 Company A 0.54 13.2% 1 Company A 5.1 20.3%
2 Company C 0.48 11.6% 2 The Company 4.0 15.8%
3 The Company 0.35 8.5% 3 Company C 3.1 12.4%
4 Company D 0.31 7.6%
5 Company B 0.22 5.4%
Top Five Total 1.90 46.5% Top Three Total 12.1 48.5%
Total 4.10 100.0% Total 25.0 100.0%
Data Source: Frost & Sullivan, Annual Reports
Global and China’s Smart Display Power Amplifier Audio Chip Market Competitive Landscape
and Market Share
In 2024, the global shipment volume of power amplifier audio chips for use in smart displays was
approximately 90 million units. Our Company achieved a total annual global shipment volume of
10.677 million power amplifier audio chips for smart displays, accounting for a market share of
approximately 11.9%, ranked third among power amplifier audio chip companies for smart displays
globally and possessing a significant advantage in market position.
Ranking Company  Shipment Volume
(10,000 units)
Market Share
(%) (%)Ranking Company Revenue
(RMB billion)
Market Share
1 Company E 1,461.6 16.2% 1 Company C 0.03 15.9%
2 Company C 1,320.0 14.7% 2 The Company 0.03 12.0%
3 The Company 1,067.7 11.9% 3 Company E 0.02 11.5%
4 Company F 960.0 10.7% 4 Company F 0.01 5.8%
5 Company B 0.01 2.3%
Top Four Total 4,809.3 53.4% Top Four Total 0.10 47.6%
Total 9,000.0 100.0% Total 0.22 100.0%
Enterprise Ranking in Global Smart Display Power Amplifier Audio Chip Market, by Global Shipment Volume, 2024
Data Source: Frost & Sullivan, Annual Reports
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China’s Haptic Driver Market Competitive Landscape and Market Share
In 2024, our Company achieved a shipment volume of 5.845 million haptic drivers in China,
accounting for a market share of approximately 1.9%, ranked fourth among haptic driver companies in
China.
Ranking Company Shipment Volume
(10,000 units)
Market Share
(%) Ranking Company Revenue
(RMB billion)
Market Share
(%)
1 Company A 6,768.0 22.6% 1 Company A 0.20 21.8%
2 Company C 1,550.0 5.2% 2 Company C 0.08 8.6%
3 Company B 650.0 2.2% 3 Company B 0.02 2.2%
4 The Company 584.5 1.9% 4 Company G 0.01 0.9%
5 Company G 400.0 1.3% 5 The Company 0.01 0.6%
Top Five Total 9,952.5 33.2% Top Five Total 0.31 34.0%
Total 3,0000.0 100.0% Total 0.90 100.0%
Enterprise Ranking in China's Haptic Driver Market, by Shipment Volume in China, 2024
Data Source: Frost & Sullivan, Annual Reports
Comparison of Technical Capabilities for China’s Power Amplifier Audio Chips
The following table compares the technical parameters for commercialized mainstream products
on the market that compete with those of our Company and shows that our Company has established
significant advantages in four core areas: signal-to-noise ratio, output power, output voltage range, and
noise floor.
Comparison of Technical Capabilities for Power Amplifier Audio Chips, 2024
Key Technical
Metrics
Low-power Audio Chip Mid/high-power Audio Chip Automotive-grade Power Amplifier Audio Chip
Our Company
FS1999 Company A Remarks Our Company
FS2105 Company C Remarks Our Company
FS5024 Company C Remarks
Signal-to-Noise
Ratio 119dB 110dB Higher signal-to-noise
ratio 112dB 111dB Higher signal-to-noise
ratio 95dB 89dB Higher signal-to-noise
ratio
Output Power 5.5W 5.3W
Higher output power,
better sound dynamic
range
2*24W 2*23W
Higher output power,
better sound dynamic
range
4*75W 4*75W /
Operating
Voltage Range 2.7V-5.5V 3.0V-5.5V Wider operating power
supply voltage 4.5V-26.4V 4.5V-26.4V / 4.5V-26.4V 4.5V-26.4V /
Package Type FOWLP-36 WLCSP-42 Smaller package size TSSOP-28 TSSOP-28 / HSSOP-56 HSSOP-56 /
Noise floor 7.5 μV 14μV Lower noise floor 36μV 37μV Lower  noise floor 43μV 70μV Lower noise floor
1. Signal-to-noise ratio: The ratio of signal power to noise power. The higher the signal-to-noise ratio, the smaller the
distortion.
2. Output power: The usable power generated by a device or system. The higher the output power, the better the dynamic
effect of the sound.
3. Operating voltage range: A wider output voltage range allows the voltage regulator to deliver the required performance in
more applications.
4. Package type: Chip package type. FOWLP is an advanced packaging technology featuring miniaturization.
5. Noise floor: The lowest level at which a signal can be distinguished from background noise. A lower noise floor means a
lower noise level in the system.
Notes:
1. All figures in the table above have been rounded.
2. Company A, founded in 2008 and headquartered in China, is listed on the Shanghai Stock Exchange, primarily engaged in
mixed-signal chips, analog chips, and radio frequency chips.
3. Company B, founded in 1984 and headquartered in the United States, is listed on the NASDAQ, primarily engaged in the
development of power amplifier audio chips and other semiconductor products.
4. Company C, founded in 1930 and headquartered in the United States, is listed on the NASDAQ, and a world-leading
company primarily engaged in designing, manufacturing, and sale of analog and embedded semiconductors.
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5. Company D, founded in 2002 and headquartered in China, is listed on the Shanghai Stock Exchange, primarily engaged in
chip design and software development, delivering comprehensive hardware-software solutions.
6. Company E, founded in 2000 and headquartered in South Korea, primarily engaged in the development of power amplifier
audio chips and other semiconductor products.
7. Company F, founded in 1998 and headquartered in Taiwan province, China, is listed on the Taiwan Stock Exchange,
primarily engaged in the chip design, manufacturing, sales, and technical services.
8. Company G, founded in 2006 and headquartered in South Korea, is listed on the Korea Exchange, primarily engaged in the
chips for haptic driver, image stabilization, autofocus control, power management.
Entry Barriers in the Power Amplifier Audio Chip Industry
 Technological Barriers
Power amplifier audio chip products have high performance requirements in terms of
anti-interference capability, detection accuracy, power consumption, and size. Moreover, with the
continuous upgrading of audio effects in various consumer electronics and intelligent vehicles,
new requirements are being brought up, such as tuning technology, customized design and
algorithms technology for power amplifier audio chips. For new market entrants, it requires a long
time and substantial resources to carry out technological R&D and to pass patent applications and
reviews by relevant authorities. Therefore, the industry has high technological barriers.
 Customer Barriers
In the power amplifier audio chip industry, especially for highly customized scenarios in
consumer electronics, intelligent vehicles and robotics, customers have strict audit and
certification systems for suppliers, involving certifications for functional safety (e.g.,
JESD22-A113), and requiring compliance with reliability standards such as automotive-grade
AEC-Q100 and the quality management system standard (ISO9001). After a partnership is
established, high switching costs and strong dependence on major customers make it difficult for
new entrants to break through quickly.
 Supply Chain Barriers
The power amplifier audio chip industry in China requires a stable supply chain system.
Companies must secure a long-term and stable supply of wafer foundry and packaging and testing
capacity by locking in capacity resources through prepayments and long-term agreements;
otherwise, they will face the risks of delays in mass production and cost premiums. Under the
fabless model, companies primarily rely on third-party wafer foundries for chip manufacturing.
While this model inherently exposes the Company to certain supplier concentration and
geopolitical risks, the Company has adopted a diversified sourcing strategy to mitigate such
exposure. In particular, most of the Company’s chip supply is sourced from PRC manufacturers,
with the remaining portion allocated to suppliers in Japan and South Korea. Such arrangement is
consistent with common industry practice, as it enables the Company to avoid over-reliance on
any single jurisdiction and to enhance supply chain resilience. By maintaining a balanced supplier
portfolio across the PRC, Japan and South Korea, the Company is able to mitigate, to a certain
extent, both geopolitical risks relating to Japan and South Korea and potential sanctions or trade
restriction risks relating to the PRC.
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This section sets out a summary of certain aspects of the laws and regulations which are
relevant to the business and operations of our Group. The principal objective of this summary is to
provide potential investors with an overview of the key laws and regulations applicable to us. This
summary does not purport to be a comprehensive description of all the laws and regulations
applicable to our business and operations and/or which may be important to potential investors.
Investors should note that the following summary is based on laws and regulations in force as at the
date of this prospectus, which may be subject to change.
REGULATORY ENVIRONMENT IN THE PRC
Below is a summary of the major PRC laws, regulations and policies relevant to our Company’s
daily business operations currently carried out in the PRC.
LA WS AND REGULATIONS ON THE INTEGRATED CIRCUIT INDUSTRY
From 2010 to 2021, the State Council has issued a series of regulations aimed at promoting the
development of the integrated circuit industry, which includes the Decision of the State Council on
Accelerating the Fostering and Development of Strategic Emerging Industries (̋Ҟ੃ԃ
), the Notice of the State Council on Promulgation of Several Policies
for Further Encouraging the Development of Software and Integrated Circuit Industries (׵
 ), the Outline for Advancing the
National Integrated Circuit Industry (), Made in China (2025) ( ʕ
਷Ⴁி(2025) ), the Notice of the State Council on Promulgation of Several Policies for Promoting the
High-quality Development of Integrated Circuit and Software Industries in the New Era (׵
 ).
In November 2016, the State Council promulgated the “State Council’s Notice on the Issuance of
the Development Plan for the Nation’s Strategic Emerging Industries under the ‘13th Five-Year’ Plan”
(Ι೯ “ɤɧʞ”), with a view to initiate the major
productivity layout and planning project for integrated circuits, and implement a series of high-impact
projects to drive rapid leaps in industrial capabilities.
On January 25, 2017, the National Development and Reform Commission (“ NDRC”) promulgated
Strategic Emerging Industries Key Products and Services Guidance Catalog (ᓃପ
ኬͦ፽), which includes integrated circuit chip design and services as a key product and
service in the strategic emerging industries.
On March 28, 2018, the Ministry of Finance, the State Taxation Administration, the NDRC and
the Ministry of Industry and Information Technology (MIIT) jointly promulgated the Notice on Issues
Concerning Corporate Income Tax Policies for Integrated Circuit Manufacturers (ණϓཥ༩͛ପΆ
), which grants income tax exemptions or reductions to some
integrated circuit manufacturing companies. The next year, the Ministry of Finance and the State
Taxation Administration jointly promulgated the Announcement on Income Tax Policies for Integrated
Circuit Design and Software Enterprises (ʮѓ ).
Pursuant to the foregoing provisions, integrated circuit design enterprises and software enterprises
satisfying the criteria shall enjoy an incentive period with effect from their profit-making year(s) prior
to December 31, 2018, and be exempted from EIT for the first and second years, and pay EIT at half
the statutory 25% tax rate from the third year to the fifth year, until the incentive period expires.
In December 2020, the Ministry of Finance, the State Taxation Administration, NDRC, and MIIT
jointly released the Announcement on Enterprise Income Tax Policy for Promoting High Quality
Development of Integrated Circuit Industry and Software Industry (ආණϓཥ༩ପุձழ΁ପ
ʮѓ). Pursuant to the aforesaid regulations, key integrated circuit
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design enterprises and software enterprises encouraged by the state are exempted from enterprise
income tax for the first to fifth years starting from the profit-making year, and are subject to a reduced
enterprise income tax rate of 10% in the succeeding years.
Pursuant to the Notice of the Ministry of Finance and the State Taxation Administration on the
Weighted Deduction Policy for Value-added Tax on Integrated Circuit Enterprises (௅e೼ਕᐼ҅
 ), which was promulgated on April 20, 2023, from
January 1, 2023 to December 31, 2027, enterprises engaged in the design, production, packaging and
testing, equipment and materials of integrated circuits are allowed to deduct extra 15% of the
deductible input tax in the current period from the V AT payable.
PRC LA WS AND REGULATIONS ON INTELLECTUAL PROPERTY RIGHTS
Patent
Pursuant to the Patent Law of the PRC (the Patent Law) promulgated by the Standing Committee
of the NPC (SCNPC) on 12 March 1984, last revised on 17 October 2020 and effective from 1 June
2021, and the Implementation Rules of the Patent Law of the PRC promulgated by the State Council,
last revised on 11 December 2023 and effective from 20 January 2024, there are three types of patents,
namely invention, utility model and design. Invention patents are valid for 20 years, while utility model
patents are valid for ten years and design patents are valid for 15 years, all starting from the date of
application. After the granting of a patent for an invention or utility model, unless otherwise provided
for in the Patent Law, no entity or individual may exploit the patent without the permission of the
patentee; after the granting of a design patent, no entity or individual shall, without permission of the
patentee, exploit the patent, that is, they shall not make, promise to sell, sell, or import the product
incorporating its or his patented design, for production and business purposes.
Trademark
Pursuant to the Trademark Law of the PRC () promulgated by the
SCNPC on 23 August 1982, last revised on 23 April 2019 and effective on 1 November 2019, and the
Regulation on the Implementation of the Trademark Law of the PRC (ૢ
Է) promulgated by the State Council on 3 August 2002, last revised on 29 April 2014 and effective
on 1 May 2014, trademarks approved and registered by the Trademark Office are registered trademarks,
and the trademark registrant has the exclusive right to use the trademark, which is protected by law.
The validity period of a registered trademark is ten years from the date of approval of registration.
Copyright and Software Copyright
According to the Copyright Law of the PRC () promulgated by the
SCNPC on 7 September 1990, last revised on 11 November 2020 and effective on 1 June 2021, and the
Implementation Regulations of the Copyright Law of the PRC (ૢԷ)
promulgated by the State Council on 2 August 2002, last revised on 30 January 2013 and effective on 1
March 2013, works of PRC citizens, legal persons or unincorporated organizations, whether published
or not, shall enjoy copyright in accordance with law. Works refer to intellectual achievements in the
field of literature, art and science that are original and can be expressed in a certain form. A copyright
holder shall enjoy a number of personal and property rights, including the right of publication, the right
of authorship and the right of amendment.
In addition, internet activities, products disseminated over the internet, and software products also
enjoy copyright. Pursuant to the Regulation on Protection of Computer Software (ᚐૢ
Է) promulgated by the State Council on June 4, 1991, effective on November 1, 1991, last amended
on January 30, 2013 and implemented on March 1, 2013, the software registration authority shall grant
certificates of registration to computer software copyright applicants in compliance with the Regulation
on Protection of Computer Software.
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Design of Integrated Circuit Layouts
Pursuant to the Regulations on the Protection of Layout-Designs of Integrated Circuits (the
“Regulations on the Protection ”) (ᚐૢԷ) issued by the State Council on 2
April 2001, and effective from 1 October 2001, natural persons, legal persons or other organizations in
China who create layout-designs shall have exclusive rights to their designs in accordance with the
Regulations on the Protection. The exclusive rights to the layout design arise upon registration with the
intellectual property administration department of the State Council, and layout designs that have not
been registered are not protected by the Regulations on the Protection. The protection period for the
exclusive rights of a layout design is ten years, starting from the date of application for registration of
the design or from the date of putting it into commercial exploitation somewhere in the world for the
first time, whichever is earlier. However, whether or not the design is registered or commercially used,
it is no longer protected by the Regulations on the Protection 15 years after the date of completion of
the design.
LA WS AND REGULATIONS RELATING TO PRODUCT QUALITY
According to the Law of the People’s Republic of China on Product Quality ( ʕശɛ͏΍ձ਷ପ
), promulgated by the SCNPC on February 22, 1993, and most recently amended on
December 29, 2018, producers and sellers shall establish and improve internal product quality
management systems, strictly implement post-specific quality standards, quality responsibilities, and
corresponding assessment methods. Prohibited actions include: forging or fraudulently using quality
marks such as certification marks; forging a product’s place of origin, or forging or fraudulently using
another manufacturer’s name and address; mixing impurities or counterfeits into products during
production or sale, passing off fake products as genuine ones, or passing off substandard products as
high-quality ones.
LA WS AND REGULATIONS ON FOREIGN INVESTMENT
The establishment, operation and governance of corporate entities in the PRC is governed by the
Company Law of the PRC (), which was issued by the SCNPC on 29
December 1993, last revised on 29 December 2023 and became effective on 1 July 2024. Limited
liability companies and companies limited by shares established in the PRC shall be subject to the PRC
Company Law. A foreign-invested company is also subject to the PRC Company Law unless otherwise
provided by the foreign investment laws.
The Foreign Investment Law of the PRC (), which was
promulgated by the NPC on 15 March 2019 and came into effect on 1 January 2020, specifies that the
state shall implement the management system of pre-entry national treatment and the Negative List for
foreign investment. 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 state. The state
provides national treatment to foreign investments outside the Negative List. In addition, the
Regulations on Implementing the Foreign Investment Law of the PRC (ج
ૢԷ), which were promulgated by the State Council on 26 December 2019 and came into effect
on 1 January 2020, further stipulate that the state shall, in accordance with the needs of the national
economy and social development, formulate a catalog of industries for encouraging foreign investment,
setting out the specific industries, fields and regions in which foreign investors will be encouraged and
induced to invest.
The NDRC and the Ministry of Commerce jointly revised and promulgated the Special
Administrative Measures for the Access of Foreign Investment (Negative List) (2024 Version) ( ̮ਠҳ
݄( ૶ఊ)(2024و)) on 6 September 2024, which came into effect on 1
November 2024, replacing the previous Negative List, pursuant to which, domestic enterprises engaged
in business sectors prohibited under the Negative List that seek to issue shares and list overseas shall be
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subject to review and approval by the relevant national competent authorities, and foreign investors are
not allowed to participate in the operation and management of the enterprise and their shareholding
ratios shall be implemented with reference to the relevant regulations on the management of domestic
securities investment by foreign investors.
REGULATIONS ON OVERSEAS INVESTMENT
Pursuant to the Administrative Measures for Outbound Investment ()
promulgated by the Ministry of Commerce on 6 September 2014 and effective from 6 October 2014, the
Ministry of Commerce and provincial competent commerce departments shall carry out administration
either by record-filing or by verification and approval depending on different circumstances of
outbound investment by enterprises. Outbound investment by enterprises that involves sensitive
countries and regions or sensitive industries shall be subject to administration by verification and
approval. Outbound investment that falls under any other circumstances shall be subject to
administration by record-filing.
Pursuant to the Administrative Measures for Outbound Investment by Enterprises ( Άุྤ̮ҳ༟
) promulgated by NDRC on 26 December 2017 and effective from 1 March 2018, domestic
enterprises (the “ investors ”) in the PRC making an outbound investment shall go through verification
and approval or record-filing or other procedures applicable to outbound investment projects (the
“Projects ”), report relevant information, and cooperate with the supervision and inspection. Sensitive
Projects carried out by the investors directly or through overseas enterprises controlled by them shall be
subject to the management of verification and approval; non-sensitive Projects directly carried out by
the investors, namely, non-sensitive projects involving the investors’ direct contribution of assets or
rights and interests or provision of financing or security, shall be subject to the management of
record-filing. The aforementioned sensitive project means a project involving sensitive countries and
regions or a sensitive industry. The NDRC promulgated the Catalogue of Sensitive Sectors for
Outbound Investment (2018 Edition) ( ྤ̮ҳ༟ઽชБุͦ፽ (2018و)), effective on 1 March
2018, which details the sensitive industries for outbound investment.
REGULATIONS RELATING TO HOUSE LEASING
Pursuant to the Law on Administration of Urban Real Estate of the PRC (̹
), which was promulgated by the SCNPC on 5 July 1994, was last revised on 26 August
2019 and came into effect on 1 January 2020, in case of house leasing, the lessor and lessee are
required to enter into a written lease contract, containing such provisions as the leasing term, usage,
rental and repair liabilities, as well as other rights and obligations of both parties, and go through
registration and filing procedures with the real estate administration department.
In addition, according to the Administrative Measures for Commodity House Leasing (܊גۜ
), which was promulgated by the Ministry of Housing and Urban-Rural Development of
the PRC on 1 December 2010 and came into effect on 1 February 2011, within 30 days after the
conclusion of the house leasing contract, the parties involved in the house leasing shall carry out house
leasing registration and filing procedures with the construction (real estate) administrative department
of the people’s government of a municipality directly under the central government of the PRC, city or
county where the house leased is located. If individuals or entities are in violation of the above
provisions, they may be ordered to make corrections within a specified time limit by the competent
construction (real estate) department of the people’s government of a municipality directly under the
central government, city or county. If any individual fails to do so, a fine of less than RMB1,000 will
be imposed, while if any entity fails to do so, a fine of more than RMB1,000 but less than RMB10,000
will be imposed.
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LA WS AND REGULATIONS RELATING TO IMPORT AND EXPORT TRADE
According to the Customs Law of the PRC () promulgated by the
SCNPC on 22 January 1987 and last revised on 29 April 2021, unless otherwise stipulated, the
declaration of import and export goods and the payment of customs duties may be handled by the
consignees or consignors of imported or exported goods or entrusted customs declaration enterprises.
The consignee or the consignor of imported or exported goods and the customs declaration enterprise
shall go through customs declaration and filing procedures at the relevant customs in accordance with
the law.
According to the Foreign Trade Law of the PRC () promulgated by
the SCNPC on 12 May 1994 and last revised on 30 December 2022, and the Regulation of the People’s
Republic of China on the Administration of the Import and Export of Goods (ආ
̈ɹ၍ଣૢԷ) promulgated by the State Council on 10 December 2001, last revised on 10 March
2024 and became effective on 1 May 2024, goods classified as prohibited imports shall not be
imported, and goods classified as prohibited exports shall not be exported. Goods subject to import
restrictions imposed by the State shall be managed under a quota system, while other goods subject to
import and export restrictions are managed under a licensing system. Goods classified as freely
importable and exportable are not subject to restrictions. The requirement for foreign trade operators
engaged in the import and export of goods or technologies to register with the relevant authorities
under the Ministry of Commerce or its authorized agencies was abolished. Furthermore, except where
laws or administrative regulations explicitly prohibit or restrict imports or exports, no entity or
individual may impose or maintain prohibitive or restrictive measures on the import or export of goods.
Pursuant to the Administrative Provisions of the PRC on the Filing of Customs Declaration
Entities ( ) promulgated by the General Administration
of Customs on 19 November 2021 and became effective on 1 January 2022, consignees, consignors or
customs declaration enterprises of imported or exported goods only need to file with the Customs but
not to register with the General Administration of Customs. The filing information will be publicized
through the China Customs Enterprise Import and Export Credit Information Publicity Platform.
LA WS AND REGULATIONS RELATING TO LABOR AND SOCIAL INSURANCE
Labor Law and Labor Contract Law
Pursuant to the Labor Law of the PRC () last revised by the SCNPC on
29 December 2018 and the Labor Contract Law of the PRC () last
revised by the SCNPC on 28 December 2012 and came into effect on 1 July 2013, a labor contract shall
be concluded when a labor relationship is established. Employers shall establish and improve labor
rules and systems in accordance with the law to safeguard employees’ labor rights and fulfillment of
labor obligations. Employers are forbidden to force employees to work overtime or to do so in a
disguised manner and employers must pay employees overtime wages in accordance with the
regulations of the state. In addition, wages may not be lower than local minimum wage standards and
must be paid to the employees promptly. Employers shall establish and improve a system of labor
safety and sanitation and shall strictly abide by national rules and standards on labor safety and
sanitation as well as educate employees on labor safety and sanitation so as to prevent accidents during
work and reduce occupational hazards. Labor safety and sanitation facilities shall comply with national
standards. The employers must also provide employees with labor safety and sanitation conditions that
comply with national standards and necessary labor protection supplies.
Social Insurance and Housing Provident Fund
According to the Social Insurance Law of the People’s Republic of China (ึ
) passed by the SCNPC on October 28, 2010, effective on July 1, 2011 and amended and
implemented on December 29, 2018, each employer and individual in the PRC shall make social
insurance contributions, including basic pension insurance, basic medical insurance, work injury
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insurance, unemployment insurance and maternity insurance. Contributing entities must register for
social insurance with the local social insurance administrative agencies and participate in social
insurance. Contributing entities and individuals shall pay social insurance premiums in full and on time.
Employer who fail to make adequate social insurance contributions shall be ordered to pay or
supplement within a stipulated period, and are subject to a late fee computed from the date of default at
the rate of 0.05% per day. Where payment is not made within the stipulated period, the relevant
administrative authorities shall impose a fine ranging from one to three times of the overdue amount.
According to the Administrative Regulations on the Housing Provident Fund (၍ଣૢ
Է) passed by the State Council on April 3, 1999, last amended and implemented on March 24, 2019,
each employer and individual in the PRC shall make housing provident fund contributions. Entities
shall register for housing provident fund contributions with the housing provident fund management
center and establish housing provident fund accounts for their employees. Entities shall contribute
housing provident fund in full and on time. Where, in violation of the provisions of the regulations, an
employer is overdue in the contribution of, or underpays, the housing provident fund, the competent
PRC government authority shall order it to make the contribution within a stipulated period. If the
payment is not made within such stipulated period, an application may be made to the People’s Court
for compulsory enforcement.
LA WS AND REGULATIONS RELATING TO TAX
Enterprise Income Tax Law
Enterprise Income Tax Law of the People’s Republic of China ()
was promulgated by the SCNPC on March 16, 2007, implemented on January 1, 2008, and most
recently revised and implemented on December 29, 2018. The Implementing Regulations of the
Enterprise Income Tax Law of the People’s Republic of China (ૢ
Է) were issued by the State Council on December 6, 2007, implemented on January 1, 2008, and
most recently revised and implemented on April 23, 2019. The Measures for the Administration of
Recognition of High and New Technology Enterprises () were issued by
the Ministry of Science and Technology, Ministry of Finance, and the State Taxation Administration on
January 29, 2016, and implemented on January 1, 2016. According to these laws and regulations, both
resident and non-resident enterprises are subject to a uniform EIT rate of 25%. Enterprises certified as
High and New Technology Enterprises are subject to a tax rate of 15%, while qualified small and micro
enterprises are subject to a 20% rate. However, non-resident enterprises without establishments or
places of business in China, or those whose income has no actual connection with their establishments
or places of business in China, shall pay EIT at the rate of 20% on their income sourced from within
China.
Value-added Tax
Pursuant to the Provisional Regulations of the PRC on Value-Added Tax (࠽
೼ᅲБૢԷ), which was promulgated by the State Council, and last revised and became effective on
19 November 2017; the Rules for the Implementation of the Provisional Regulations of the PRC on
Value-added Tax ( ), which was promulgated by the
Ministry of Finance, and last revised on 28 October 2011 and effective on 1 November 2011; the Notice
of the Ministry of Finance and the State Taxation Administration on the Adjustment to V AT Rates ( ৌ
 ) which was promulgated on 4 April 2018 and came into
effect on 1 May 2018, and the Announcement on Policies for Deepening the V AT Reform (ଉʷᄣ
ʮѓ), which was promulgated by the Ministry of Finance, the State Taxation
Administration and the General Administration of Customs on 20 March 2019 and became effective on
1 April 2019, all enterprises and individuals engaging in the sale of goods or providing processing,
repair and maintenance services, sales services, intangible assets, real estate and import of goods in
China are subject to V AT; from April 1, 2019, the generally applicable V AT rates are 13%, 9%, 6% and
0%, with a V AT rate of 3% applicable to small-scale taxpayers.
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Taxation on Dividends
According to the Individual Income Tax Law () promulgated on September 10,
1980, last amended on August 31, 2018 and effective on January 1, 2019, and the Regulations for the
Implementation of the Individual Income Tax Law of the People’s Republic of China ( ʕശɛ͏΍ձ
ૢԷ) last amended on December 18, 2018 and effective on January 1, 2019,
income from interest, dividends, bonuses, property leasing, property transfer and incidental income
shall be subject to a proportional tax rate of 20%. In addition, according to the Notice on Issues
Concerning Differentiated Individual Income Tax Policies for Dividends and Bonuses of Listed
Companies ( ) issued on September 7,
2015 by the Ministry of Finance, the State Taxation Administration and the China Securities Regulatory
Commission (CSRC), where an individual acquires stocks of a listed company from public offering of
the company or from the stock transfer market and holds the stocks for more than one year, the income
from dividends is exempted from individual income tax. If the individual holds the stocks for one
month or less, the income from dividends is fully taxable. If the individual holds the stocks for one
month to one year (one year inclusive), 50% of the income from dividends is taxable. The aforesaid
income is subject to an individual income tax at a flat rate of 20%.
The Circular of the State Taxation Administration on Issues Relating to the Withholding of
Enterprise Income Tax on Dividends Paid by Chinese Resident Enterprises to H Share Shareholders of
Overseas Non-Resident Enterprise (͏ΆุΣྤ̮ H೯
 ), which was issued by the State Taxation Administration on
November 6, 2008, further clarified that a PRC-resident enterprise shall uniformly withhold enterprise
income tax at a rate of 10% on dividends paid to H Share shareholders of overseas non-resident
enterprise for 2008 and subsequent years. After receiving dividends, the shareholder of a non-resident
enterprise may apply to the competent tax authority for the treatment under the tax treaty
(arrangement), and after the examination and verification by the competent tax authority, shall refund
the balance between the tax paid and the tax payable calculated according to the tax rate stipulated in
the tax treaty (arrangement). In addition, the Response to Issues on Levying Enterprise Income Tax on
Dividends Received by Non-resident Enterprise from Holding Stock such as B-shares (೼ਕᐼ҅
͏Άุ՟੻ Bҭᔧ ), which was issued by the SAT on
July 24, 2009, further provides that any PRC-resident enterprise that is listed on overseas stock
exchanges must withhold enterprise income tax at a rate of 10% on dividends 2008 and subsequent
years that it distributes to non-resident enterprises. Such tax rates may be further modified pursuant to
the tax treaty or agreement that China has concluded with a relevant jurisdiction, where applicable.
LA WS AND REGULATIONS IN RELATION TO FOREIGN EXCHANGE
The Foreign Exchange Control Regulations of the PRC ( ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ) last
revised by the State Council on 5 August 2008, are applicable to all activities related to the foreign
exchange receipts and disbursements and transactions of domestic corporations and individuals and to
the said activities of overseas corporations and individuals within the territory of the PRC. International
payments in foreign currencies and transfers of foreign currencies under current account in PRC shall
not be subject to any restriction. Foreign currency transactions under the capital account, such as direct
investment and capital contribution, are still restricted and require approvals from, or registration with,
the foreign exchange administrative authorities.
According to the Circular of the State Administration of Foreign Exchange (SAFE) on Issues
concerning the Administration of Foreign Exchange Involved in Overseas Listing (̮ි၍ଣ҅ᗫ
) announced by the SAFE on December 26, 2014, the SAFE and
its branch offices and administrative offices shall oversee, regulate and inspect domestic companies
regarding their business registration, opening and use of accounts, trans-border payments and receipts,
exchange of funds and other conduct involved in overseas listing. Domestic companies shall, within 15
working days after completion of its public offering overseas, handle registration formalities with the
foreign exchange authority at its place of registration with the required materials.
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LA WS AND REGULATIONS IN RELATION TO OVERSEAS LISTING
The Securities Law of the People’s Republic of China (), which was
last revised by the SCNPC on 28 December 2019 and became effective on 1 March 2020,
comprehensively regulates the activities of the securities market in the PRC, including the issuance and
trading of securities, acquisitions of listed companies, disclosure of information, investor protection,
stock exchanges, securities companies, securities registration and clearing institutions, securities service
agencies, securities associations and securities regulatory authorities. The Securities Law further
stipulates that domestic enterprises that directly or indirectly issue securities abroad or list their
securities abroad shall comply with the relevant provisions of the State Council, and that the specific
provisions for subscription and trading of shares of domestic companies in foreign currencies shall be
separately stipulated by the State Council. The CSRC is a securities regulatory body established by the
State Council, which is responsible for supervising and managing the securities market in accordance
with the law, maintaining market order and safeguarding the legal operation of the market.
On 17 February 2023, the CSRC promulgated the Trial Administrative Measures of Overseas
Securities Offering and Listing by Domestic Companies ( ྤʫΆุྤ̮೯БᗇՎձɪ̹၍ଣ༊Б፬
) (the Trial Measures) and related guidelines, which came into effect on 31 March 2023. Pursuant to
the Trial Measures, where a domestic enterprise in the PRC directly or indirectly issues or lists shares
overseas, it shall file a report with the CSRC within 3 working days after submitting the application
documents for issuance and listing overseas; overseas issuance and listing shall be prohibited under any
of the following circumstances: (i) where the issuance and listing is prohibited by laws, administrative
regulations or the relevant provisions of the state; (ii) where the overseas issuance and listing is
recognized by the relevant competent department of the State Council in accordance with the law as
potentially jeopardizing national security; (iii) where domestic enterprises or their controlling
shareholders or de facto controllers are involved in criminal offenses of corruption, bribery,
misappropriation of property, embezzlement of property, or disruption of the socialist market economy
order within the last three years; (iv) where domestic enterprises suspected of committing crimes or
major violations of laws and regulations are being investigated by the law, and has not yet come to a
definitive conclusion of the opinion; (v) where there are significant ownership disputes over the
shareholdings held by controlling shareholders or shareholders directed by controlling shareholders or
de facto controllers. Additionally, overseas listing regulations stipulate that after an issuer has offered
and listed securities in an overseas market, the issuer shall submit a report to the CSRC within three
working days after the occurrence and public disclosure of (i) a change of control thereof, (ii)
investigations of or sanctions imposed on the issuer by overseas securities regulators or relevant
competent authorities, (iii) changes of listing status or transfers of listing segment, and (iv) a voluntary
or mandatory delisting. Overseas offering and listing by domestic companies shall be made in strict
compliance with relevant laws, administrative regulations and rules concerning national security in the
spheres of foreign investment, cybersecurity, data security etc., and duly fulfill their obligations to
protect national security.
On February 24, 2023, the CSRC and three other relevant government authorities jointly
promulgated the Provisions on Strengthening the Confidentiality and Archives Administration Related
to the Overseas Securities Offering and Listing by Domestic Enterprises (̋੶ྤʫΆุྤ̮೯Б
 ), or the Provisions on Confidentiality. Pursuant to the
Provision on Confidentiality, where a domestic enterprise provides or publicly discloses any document
or material that involves state secrets and working secrets of state agencies to the relevant securities
companies, securities service institutions, overseas regulatory authorities and other entities and
individuals, it shall report to the competent department with the examination and approval authority for
approval in accordance with the law, and submit to the secrecy administration department of the same
level for filing. The working papers formed within the territory of the PRC by the securities companies
and securities service agencies that provide corresponding services for the overseas issuance and listing
of domestic enterprises shall be kept within the territory of the PRC, and cross-border transfers shall go
through the examination and approval formalities in accordance with the relevant State provisions.
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REGULATORY ENVIRONMENT IN HONG KONG
There is no specific statutory requirement for our Group to obtain any licence to carry out our
business in Hong Kong other than the requirement to have a business registration certificate under the
Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong). Our Group does not import
or export any food, dutiable commodities under the Dutiable Commodities Ordinance (Cap. 109) or any
prohibited articles under the Import and Export Ordinance (Cap. 60) in or into Hong Kong. Below is a
summary of the laws and regulations in Hong Kong which are material to our Group’s business.
Sale of Goods Ordinance (Chapter 26 of the Laws of Hong Kong)
The Sale of Goods Ordinance (Chapter 26 of the Laws of Hong Kong) governs the formation,
performance and remedies of contract for the sale of goods in Hong Kong and the transfer of title of
goods sold. The ordinance also sets out certain implied terms or conditions and warranties generally
relating to the safety and suitability of goods supplied under a contract of sale for goods in Hong Kong,
including:
(i) where there is a sale of goods by description, the goods shall correspond with the
description;
(ii) where the seller sells goods in the course of a business, the goods shall be of a merchantable
quality, i.e. (a) as fit for the purpose or purposes for which the goods of that kind are
commonly bought; (b) of such standard of appearance and finish; (c) as free from defects
(including minor defects); (d) as safe; and (e) as durable, as it is reasonable to expect having
regard to any description applied to them, the price (if relevant) and all the other relevant
circumstances; and
(iii) where the seller sells goods in the course of a business and the buyer makes known to the
seller (whether expressly or by implication) any particular purpose for which the goods are
being bought, the goods supplied under the contract shall be reasonably fit for that purpose.
Under section 55 of the Sale of Goods Ordinance, where there is a breach of warranty by the
seller, the buyer is not, by reason only of such breach of warranty, entitled to reject the goods, but he
may set up against the seller the breach of warranty in diminution or extinction of the price, or
maintain an action against the seller for damages for the breach of warranty.
Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong)
The Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong) requires every
person carrying on any business to make application to the Commissioner of Inland Revenue in the
prescribed manner for the registration of that business. The Commissioner of Inland Revenue must
register each business for which a business registration application is made and as soon as practicable
after the prescribed business registration fee and levy are paid, and issue a business registration
certificate or branch registration certificate for the relevant business or the relevant branch as the case
may be. Business registration does not serve to regulate business activities and it is not a licence to
trade. Business registration serves to notify the Inland Revenue Department of the establishment of a
business in Hong Kong. Any person who fails to apply for business registration shall be guilty of an
offence and shall be liable to a fine of HK$5,000 and to imprisonment for one year.
Laws relating to Transfer Pricing
The Inland Revenue Department (“ IRD”) may make transfer pricing adjustments by disallowing
expenses incurred by Hong Kong residents under sections 16(1), 17(1)(b) and 17(1)(c) of the Inland
Revenue Ordinance (Chapter 112 of the Laws of Hong Kong) (“ IRO”) and challenging the entire
arrangement under general anti-avoidance provisions such as sections 61 and 61A of the IRO if the IRD
considers that the related party transactions are not conducted on an arm’s length basis. In December
2009, the IRD released Departmental Interpretation and Practice Notes No. 46 (DIPN 46). DIPN 46
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provides clarifications and guidance on the IRD’s views on transfer pricing and how it intends to apply
the existing provisions of the IRO to establish whether related parties are transacting at arm’s length
prices. In general, the practices followed by the IRD are based on the transfer pricing methodologies
recommended by the OECD Transfer Pricing Guidelines. In April 2009, the IRD released Departmental
Interpretation and Practice Notes No. 45 (DIPN 45). DIPN 45 provides that where double taxation
arises as a result of transfer pricing adjustments made by the tax authorities of another country, a Hong
Kong taxpayer may potentially claim relief under the treaty between Hong Kong and that country
(countries that entered into tax arrangements with Hong Kong includes the PRC). Furthermore, the
Hong Kong Government has gazetted the Inland Revenue (Amendment) (No. 6) Ordinance 2018 (the
Amendment Ordinance) on 13 July 2018. The main objectives of the Amendment Ordinance are to
codify the transfer pricing principles and implement certain measures under the Base Erosion and Profit
Shifting (“ BEPS”) package promulgated by the Organisation for Economic Co-operation and
Development, such as the transfer pricing documentation requirements. The BEPS package seeks to
counter the exploitation of gaps and mismatches in tax rules by multinational enterprises to artificially
shift profits to low or no-tax locations where there are little or no economic activity.
Section 50AAF of the IRO now codifies the arm’s length principle and allows for an adjustment
of a taxpayer’s profits upwards/losses downwards if the taxpayer has entered into transaction(s) with an
associated person, and the pricing of such transaction(s) differs from that between independent persons
and has created a Hong Kong tax advantage. Section 82A of the IRO stipulates that a person is liable to
be assessed for penalties to additional tax of the amount of tax undercharged resulting from transfer
pricing adjustments, unless it is proved that reasonable efforts have been made to determine the arm’s
length price for the transaction(s). Pursuant to section 58C of the IRO, Hong Kong entities engaged in
transactions with associated enterprises will be required to prepare master and local files for accounting
periods beginning on or after 1 April 2018, except where they meet either one of the following
exemptions in respect of business size or relevant transaction volume:
Exemption based on size of business: Taxpayers meeting any two of the following conditions are
not required to prepare the master file and local files:
(i) Total revenue for the accounting period not exceeding HK$400 million;
(ii) Total assets at the end of the accounting period not exceeding HK$300 million;
(iii) No more than 100 employees on average.
Exemption based on related party transactions: If the amount of a type of controlled transactions
for the relevant accounting period is below the threshold set out below, an enterprise will not be
required to prepare a local file for that particular type of transactions:
(i) Transfer of properties (other than financial assets and intangibles): HK$220 million;
(ii) Transaction of financial assets: HK$110 million;
(iii) Transfer of intangibles: HK$110 million;
(iv) Any other transaction (e.g., service income and royalty income): HK$44 million.
If all types of controlled transactions for the relevant accounting period are not required to be
covered in local files, neither of the following is required to be prepared or retained by a taxpayer:
(i) Local file for the accounting period;
(ii) Master file for the corresponding accounting period.
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Trade Description Ordinance (Chapter 362 of the Laws of Hong Kong)
The Trade Descriptions Ordinance (Chapter 362 of the Laws of Hong Kong) aims to prohibit false
trade description, false, misleading or incomplete information, false marks and misstatements in respect
of goods and services provided in the course of trade. The definition of trade description under section
2 of the ordinance covers a broad range of matters including but not limited to: quantity, method of
manufacture, composition, fitness for purpose, availability, compliance with a standard specified or
recognised by any person, price, approval by any person, a person by whom they have been acquired,
the goods being of same kind as goods supplied to a person, place or date of manufacture, etc.
Section 2 also provides that a trade description which is false to a material degree or which,
though not false, is misleading, that is to say, likely to be taken for a trade description of a kind that
would be false to a material degree, would be regarded as a false trade description.
Section 7 provides that it is an offence for any person who, in the course of any trade or business,
applies a false trade description to any goods or supplies or offer to supply any goods to which a false
description is applied. Section 7A provides that it is an offence for a trader who applies a false trade
description to a service supplied or offered to be supplied to a consumer, or supplies or offers to supply
to a consumer a service to which a false trade description is applied. Section 12 further prohibits any
person from importing or exporting any goods to which a false trade description or forged trade mark is
applied.
Sections 13E, 13F, 13G, 13H and 13I of the ordinance provide that a trader commits an offence if
the trader engages, in relation to a consumer, in a commercial practice that is a misleading omission, or
is aggressive, or constitutes bait advertising, or constitutes a bait and switch, or wrongly accepting
payment for a product.
Any person who commits an offence under sections 7, 7A, 13E, 13F, 13G, 13H or 13I shall be
liable, on conviction on indictment, to a fine of HK$500,000 and to imprisonment for 5 years, and on
summary conviction, to a level 6 fine of HK$100,000 and imprisonment for 2 years.
Trade Marks Ordinance (Chapter 559 of the Laws of Hong Kong)
The Trade Marks Ordinance (Chapter 559 of the Laws of Hong Kong) makes provision in respect
of the registration of trade marks and provides for connected matters.
The ordinance provides that a person infringes a registered trade mark if he uses in the course of
trade or business a sign which is:
(a) identical to the registered trade mark in relation to goods or services which are identical to
those for which it is registered;
(b) identical to the registered trade mark in relation to goods or services which are similar to
those for which it is registered and such use is likely to cause confusion on the part of the
public;
(c) similar to the registered trade mark in relation to goods or services which are identical to or
similar to those for which it is registered and such use is likely to cause confusion on the
part of the public; or
(d) identical or similar to the registered trade mark in relation to goods or services which are not
identical or similar to those for which the trademark is registered, and the trade mark is
entitled to protection under the Paris Convention as a well-known trade mark, and such use,
being without due cause, takes unfair advantage of or is detrimental to the distinctive
character or repute of a trade mark.
The ordinance further provides that the owner of a trade mark may bring infringement
proceedings against the infringer for damages, injunction, accounts or any other relief available in law.
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U.S. EXPORT CONTROL AND ECONOMIC SANCTIONS
BIS Entity List Restrictions
According to the EAR § 744.16, in addition to the license requirements for items specified on the
CCL, any entity may not, without a license from BIS, export, reexport, or transfer (in-country) any
items included in the License Requirement column of an entry on the Entity List (supplement no. 4 to
the EAR § 744.16) when an entity associated with that entry or when any person using an address
identified in the Entity List entry as a high-risk diversion address is a party to a transaction as
described in § 748.5(c) through (f) of the EAR.
FN5 FDP Rule
A foreign-produced item is subject to the EAR if it meets the product scope and end-user scope in
Entity List FDP Rule footnote 1, footnote 4 or footnote 5 provisions. The Entity List footnote 5 FDP
Rule (FN5 FDP) applies if foreign-produced item meets both product and end-user conditions.
Product Scope: the foreign-produced commodity is specified in ECCN 3B001 (except 3B001.a.4,
c, d, f.1, f.5, f.6, g, h, k to n, p.2, p.4, r), 3B002 (except 3B002.c), 3B903, 3B991 (except 3B991.b.2.a
through 3B991.b.2.b), 3B992, 3B993, or 3B994, and meets the definition of a “direct product” under
the relevant provisions.
End-user Scope: activities involving Footnote 5 designated entities and for entities located at
“facilities” where the “production” of “advanced-node integrated circuits” occurs; or Footnote 5
designated entities and for “advanced-node integrated circuits” “production” “facilities” as transaction
parties.
SME Foreign Direct Product Rule
A foreign-produced commodity is subject to the EAR if it meets both the product scope and the
destination scope specified in Semiconductor Manufacturing Equipment (SME) FDP Rule.
Product Scope: the product scope applies to a foreign-produced commodity specified in ECCN
3B001.a.4, c, d, f.1, f.5, f.6, k to n, p.2, p.4, r, or 3B002.c which meets the direct product condition as
described in § 734.9(h)(1).
Destination Scope: a foreign-produced item meets the destination scope if there is “knowledge”
that the foreign-produced item is destined to Macau or a destination in Country Group D:5 of
supplement no. 1 to part 740 of the EAR. To be more specific, China is one of the countries designated
in Country Group D:5.
Department of Defense NDAA §1260H List
Amended in 2025, 1260H List mostly prohibits the U.S. Department of Defense (DoD) from
entering into, renewing, or extending contracts for goods, services, or technology with entities on the
Chinese Military Company List or their affiliates. Contracts with companies controlled by these listed
entities are also prohibited.
U.S. Treasury’s Non-SDN CMIC List
Non-SDN Chinese Military-Industrial Complex Companies List, published by the Department of
the Treasury’s Office of Foreign Assets Control (OFAC) is designed as a reference tool that identifies
persons subject to certain sanctions that have been imposed under statutory or other authorities.
A United States person is prohibited from certain purchase or sale of publicly traded securities of
CMIC List entities, and any transaction that evades or avoids, is intended to evade or avoid, causes a
violation of, or attempts to violate any of the prohibitions set forth is prohibited. OFAC published
several new Frequently Asked Questions (“FAQs”) on application of Non-SDN CMIC List, and FAQ
905 clarifies that U.S. Persons are not prohibited from engaging in all activities with CMICs.
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OUR HISTORY AND DEVELOPMENT
Overview
We are a provider of power amplifier audio chips and haptic drivers in China. We specialize in the
design of low-power audio chips, mid/high-power audio chips and haptic drivers under a fabless model
to offer a wide array of solutions for emerging application scenarios. According to the F&S report, we
ranked (1) first among power amplifier audio chip providers in China in terms of total shipment volume
in 2024 of power amplifier audio chips for use in smart displays, (2) second among power amplifier
audio chip providers in China, and third among power amplifier audio chip providers globally, in terms
of total shipment volume of power amplifier audio chips in 2024, and (3) fourth among haptic driver
providers in China in terms of total shipment volume of haptic drivers in 2024.
Our Company was founded in the PRC in May 2016 by our executive Directors, Mr. Xu and Mr.
Liu. See “Directors and Senior Management—Board of Directors—Executive Directors” for the
biographical details of Mr. Xu and Mr. Liu.
Business Milestones
The following table illustrates our major business milestones:
Y ear Milestone
2016 Our Company was incorporated in the PRC
2017 We launched China’s first ASIC DSP-integrated portable power amplifier audio chip
and achieved commercialization
2018 We became part of the ODM supply chain for top-tier smartphone brands ranking
among the top 10 brands in terms of shipment volume
2021 We launched China’s first mid/high-power audio chip and achieved
commercialization
Our accumulated shipment volume exceeded 100 million units
2022 We received the 2022 Annual Pudong New Area Innovation and Entrepreneurship
Award (2022อਜ௴อ௴ุᆤ ) from the Shanghai Pudong New Area
Government
We became a direct supplier of one of the global electronics firms with revenue
reaching more than RMB400 billion in the third quarter of 2025, marking a
significant breakthrough in our globalization strategy
2023 We launched China’s first automotive-grade AEC-Q100-certified power amplifier
audio chip
Our haptic driver achieved commercialization
We were recognized as a Specialized, Refined, Distinctive and Innovative Small and
Medium-sized Enterprise ( ਖ਼ၚतอʕʃΆุ ) by the Shanghai Municipal
Commission of Economy and Informatization
We were Recognized as a Specialized, Refined, Distinctive and Innovative Little
Giant Enterprise ( ਖ਼ၚतอ“ʃ̶ɛ”Άุ) by the Ministry of Industry and
Information Technology of the PRC
2025 We established a contracted partnership with one of the world’s largest renewable
energy vehicle manufacturers with our automotive-grade power amplifier audio chip
HISTORY AND CORPORATE STRUCTURE
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OUR COMPANY
Establishment of Our Company
On May 17, 2016, our Company was established as a limited liability company under the laws of
the PRC with a registered capital of RMB0.5 million. Upon incorporation, our Company was owned by
Mr. Xu and Mr. Liu as to 60% and 40%, respectively.
To fund our strategic growth and broaden our shareholder base, we have conducted several rounds
of pre-IPO investments since the incorporation of our Company. See “—Pre-IPO Investments” for
details.
Joint Stock Reform of Our Company
On May 30, 2025, our then Shareholders, being our promoters, passed resolutions approving,
among others, the conversion of our Company into a joint stock company with limited liability under
the laws of the PRC. In accordance with an audit report of our Company issued by an independent
accountant, as of February 28, 2025, the audited net asset value of our Company was
RMB202,880,229.11, among which, RMB100,000,000 was converted into 100,000,000 Shares with a
nominal value of RMB1.00 each and the remaining RMB102,880,229.11 was converted into capital
reserve. Our Shares upon conversion were subscribed for by our then Shareholders in proportion to
their respective equity interest in our Company immediately before the conversion. The joint stock
reform was completed on June 12, 2025.
OUR PRINCIPAL SUBSIDIARY
The following entity was our subsidiary which made material contribution to our results of
operation during the Track Record Period.
Name Place of incorporation Date of incorporation Principal business activities
Fourier Technology Limited
(ʮ̡ )....
Hong Kong November 18,
2016
Trade of power amplifier
audio chips
MATERIAL ACQUISITIONS AND DISPOSALS
During the Track Record Period and up to the Latest Practicable Date, we did not conduct any
material acquisition or disposal.
PRE-IPO INVESTMENTS
Name of Pre-IPO Investor(s) Date of contract Date of settlement
Registered capital of our
Company subscribed
for/acquired Consideration
Cost per
Share paid (1)
Discount to the
Offer Price (2)
(RMB) (RMB) (RMB)
1st Angel Investment (Pre-money valuation: RMB16.0 million; Post-money valuation: RMB20.0 million)
Equity Subscription
Mr. Liu Changjiang (Ϫ) ........... June 1, 2016 September 9, 2016 1,530,000 4.0 million 0.68 98.29%
Equity Transfer
Mr. Ding Xuexin (ؚ)............ August 10, 2016 April 30, 2017 53,750
(3) 53,750 0.26 99.34%
HISTORY AND CORPORATE STRUCTURE
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Name of Pre-IPO Investor(s) Date of contract Date of settlement
Registered capital of our
Company subscribed
for/acquired Consideration
Cost per
Share paid (1)
Discount to the
Offer Price (2)
(RMB) (RMB) (RMB)
2nd Angel Investment (Pre-money valuation: RMB36.0 million; Post-money valuation: RMB40.0 million)
Equity Subscription
Ms. Jiang Yan ( Ϫዲ) .............. September 30, 2016 April 27, 2017 850,000 4.0 million 1.23 96.90%
Equity Transfer
Mr. Ding Xuexin (ؚ)............ January 3, 2017 April 30, 2017 46,250
(4) 46,250 0.26 99.34%
Pre-Series A Investments (Pre-money valuation: RMB92.0 million; Post-money valuation: RMB100.0 million)
Equity Subscription
Xiamen Weitai Shenghong Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆ
ุ(Υྫ)) (“ Weitai Shenghong ”) .......
May 1, 2017 June 1, 2017 461,956.52 5.0 million 2.83 92.87%
Xiamen Zhongxia Capital Management Co., Ltd. (ʕ
ʮ̡ )( “ Zhongxia Capital ”) .....
May 1, 2017 June 16, 2017 184,782.61 2.0 million 2.83 92.87%
Mr. Deng Tianshun ( ቎˂න)............ May 1, 2017 September 18, 2017 92,391.30 1.0 million 2.83 92.87%
Series A Investments (Pre-money valuation: RMB120.0 million; Post-money valuation: RMB145.0 million)
Equity Subscription
Shenzhen City Vinno Intelligent and Health Venture
Investment Fund (Limited Partnership)
(ږ( Υྫ))
(“Vinno Intelligent and Health ”) .........
December 29, 2017 January 11, 2018 1,509,060.16 19.60 million 3.39 91.46%
Qingdao Xinda Venture Capital Center (Limited
Partnership) (༺౷௴ҳ༟ʕː (Υྫ))
(“Xinda Venture Capital ”) ...........
December 29, 2017 January 11, 2018 30,797.14 0.4 million 3.39 91.46%
Ningbo Junyi Borui Venture Investment Partnership
(Limited Partnership) (ёᑈ௹๿௴ุҳ༟ΥྫΆ
ุ(Υྫ)) (“ Junyi Borui ”) ..........
December 29, 2017 January 11, 2018 384,964.33 5 million 3.39 91.46%
Series A+ Investments (Pre-money valuation: RMB189.0 million; Post-money valuation: RMB195.0 million)
Equity Subscription
Xiamen Zhengchu Venture Capital Partnership (Limited
Partnership) (͍Ꮇ௴ุҳ༟ΥྫΆุ (Υྫ))
(“Zhengchu Venture Capital ”) ..........
November 20, 2018 December 6, 2018 354,411.17 6 million 4.42 88.86%
Series B Investments (Pre-money valuation: RMB200.0 million; Post-money valuation: RMB238.0 million)
Equity Subscription
Shanghai Moqin Intelligent Technology Co., Ltd.
(ʮ̡ )( “ Moqin Intelligent ”) ..
September 25, 2019 September 27, 2019 1,267,019.96 22 million 4.54 88.56%
Xiamen Junyi Kaixiang Venture Capital Partnership
(Limited Partnership) (ёᑈ௱ജ௴ุҳ༟ΥྫΆ
ุ(Υྫ))) (“ Junyi Kaixiang ”) ........
September 25, 2019 October 9, 2019 921,469.06 16 million 4.54 88.56%
HISTORY AND CORPORATE STRUCTURE
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Name of Pre-IPO Investor(s) Date of contract Date of settlement
Registered capital of our
Company subscribed
for/acquired Consideration
Cost per
Share paid (1)
Discount to the
Offer Price (2)
(RMB) (RMB) (RMB)
Equity Transfer
Shanghai Kuanlian Investment Co., Ltd. ( ɪऎᄱᑌҳ༟Ϟ
ʮ̡)( “ Kuanlian Investment ”).........
October 9, 2019 October 18, 2019 345,550 (5) 5 million 3.78 90.47%
Series B+ Investments (Pre-money valuation: RMB292.5 million; Post-money valuation: RMB300.0 million)
Equity Subscription
Furui Chuangxin (Xiamen) Emerging Industries Investment
Partnership (Limited Partnership) (ڦ(ژ)อጳ
ପุҳ༟ΥྫΆุ (Υྫ)) (“ Furui Chuangxin ”) ..
January 3 and March 30,
2020
March 17, 2020 351,457.75 7.5 million 5.57 85.96%
Series B2 Investments (Pre-money valuation: RMB350.0 million; Post-money valuation: RMB450.0 million)
Equity Subscription
Shaoxing Gansheng Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆุ (ࠢ
Υྫ)) (“ Gansheng Investment ”)
(15) ........
June 24, 2020 August 31, 2020 200,833 5 million 6.50 83.62%
Gansheng Investment (15) ............. July 17, 2020 August 28, 2020 1,004,165 25 million 6.50 83.62%
Shenzhen Zhanxiang Information Technology Co., Ltd. ( ଉ
ʮ̡ )( “ Zhanxiang
Information ”) ................
September 15, 2020 November 5, 2020 361,499.40 9 million 6.50 83.62%
Jiaxing Junsheng Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ
(Υྫ)) (“ Junsheng Investment ”)(15) ......
July 17, 2020 August 31, 2020 763,165.40 20 million 6.85 82.73%
Wentianxia Technological Group Co., Ltd. (Ҧණ
ʮ̡ )( “ Wentianxia ”) ...........
December 7, 2020 January 4, 2021 440,752.32 11 million 6.52 83.57%
Wuxi Ark Investment Partnership (Limited Partnership) ( ೌ
፼˙Ћҳ༟ΥྫΆุ (Υྫ)) (“ Ark Investment ”) .
March 23, 2021 May 21, 2021 1,202,051.79 30 million 6.52 83.57%
Equity Transfer
Gansheng Investment .............. June 24, 2020 September 4, 2020 468,610 (6) 9 million 5.02 87.35%
Zhanxiang Information .............. September 15, 2020 November 11, 2020 156,203.44 (7) 3 million 5.02 87.35%
Series C Investments (Pre-money valuation: RMB1,200.0 million; Post-money valuation: RMB1,356.0 million)
Equity Subscription
Shenzhen Fortune Chuanghong Private Equity Investment
Enterprise (Limited Partnership) ( ଉέ̹༺ો௴ᒿӷ෍
ᛆҳ༟Άุ (Υྫ)) (“ Fortune Chuanghong ”) ..
September 6, 2021 December 27, 2021 980,157 62.075 million 16.54 58.31%
Shenzhen Caizhi Chuangying Private Equity Investment
Enterprise (Limited Partnership) ( ଉέ̹ৌ౽௴ᙊӷ෍
ᛆҳ༟Άุ (Υྫ)) (“ Caizhi Chuangying ”) ...
September 6, 2021 December 28, 2021 46,185 2.925 million 16.54 58.31%
Shanghai Chaoyue Moore Equity Investment Fund
Partnership (Limited Partnership) (ᛆҳ
ΥྫΆุ (Υྫ)) (“ Chaoyue Moore ”) ...
September 6, 2021 December 22, 2021 789,494 50 million 16.54 58.31%
HISTORY AND CORPORATE STRUCTURE
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Name of Pre-IPO Investor(s) Date of contract Date of settlement
Registered capital of our
Company subscribed
for/acquired Consideration
Cost per
Share paid (1)
Discount to the
Offer Price (2)
(RMB) (RMB) (RMB)
Jiaxing Junqing Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ (Υྫ))
(“Junqing Investment ”) ............
September 6, 2021 December 15, 2021 236,848 15 million 16.54 58.31%
Suzhou Jicui Meibai Venture Capital Partnership (Limited
Partnership) (௴ุҳ༟ΥྫΆุ (Υ
ྫ)) (“ Jicui Meibai ”) .............
September 6, 2021 January 5, 2022 157,899 10 million 16.54 58.31%
Shanghai Fumiao Investment Management Partnership
(Limited Partnership) ( ɪऎూ↿ҳ༟၍ଣΥྫΆุ (ࠢ
Υྫ)) (“ Fumiao Investment ”) ..........
September 6, 2021 January 5, 2022 94,739 6 million 16.54 58.31%
Fujian Junxin Ruizhi Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆ
ุ(Υྫ)) (“ Junxin Ruizhi ”) .........
September 6, 2021 December 24, 2021 157,899 10 million 16.54 58.31%
Equity Transfer
Fortune Chuanghong .............. September 9, 2021 and
November 26, 2021
September 17, 2021 246,752 (8) 14.325 million 15.17 61.76%
Caizhi Chuangying ............... September 9, 2021 and
November 26, 2021
September 18, 2021 11,627 (8) 675,000 15.17 61.76%
Junqing Investment ............... September 9, 2021 and
November 26, 2021
September 13, 2021 103,352 (8) 6 million 15.17 61.76%
Fumiao Investment ............... September 9, 2021 and
November 26, 2021
September 29, 2021 51,676 (8) 3 million 15.17 61.76%
Junxin Ruizhi ................. September 9, 2021 and
November 26, 2021
September 23, 2021 17,225 (8) 1 million 15.17 61.76%
Series C+ Investments (Pre-money valuation: RMB1,506.0 million; Post-money valuation: RMB1,609.0 million)
Equity Subscription
Guangzhou Chufeng Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆุ (ࠢ
Υྫ)) (“ Chufeng Investment ”) .........
December 29, 2021 January 28, 2022 789,490 50 million 16.54 58.31%
Moqin Intelligent ................ December 29, 2021 February 10, 2022 394,745 25 million 16.54 58.31%
Suzhou Yahe Xinghua Optoelectronics Industry Investment
Partnership (Limited Partnership) (ശΈཥପ
ุҳ༟Υྫ (Υྫ)) (“ Y ahe Xinghua ”) .....
December 29, 2021 February 10, 2022 236,847 15 million 16.54 58.31%
Shanghai Longcheer Smart Technology Co., Ltd. ( ɪऎᎲ
ʮ̡ )( “ Longcheer Intelligence ”) ...
December 29, 2021 February 11, 2022 157,898 10 million 16.54 58.31%
Ningbo Zhiyou Enterprise Management Partnership
(Limited Partnership) (қСΆุ၍ଣΥྫΆุ (ࠢ
Υྫ)) (“ Zhiyou Management ”) .........
December 29, 2021 February 10, 2022 47,369 3 million 16.54 58.31%
HISTORY AND CORPORATE STRUCTURE
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Name of Pre-IPO Investor(s) Date of contract Date of settlement
Registered capital of our
Company subscribed
for/acquired Consideration
Cost per
Share paid (1)
Discount to the
Offer Price (2)
(RMB) (RMB) (RMB)
Equity Transfer
Tianjin Haihe Shunke Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆ
ุ(Υྫ)) (“ Shunke Investment ”) .......
June 14, 2022 March 22, 2023 274,933 (9) 17,412,091 16.54 58.31%
Shenzhen Shunying Private Equity Investment Fund
Partnership (Limited Partnership) (ᛆҳ
Υྫ (Υྫ)) (“ Shunying Investment ”) ...
June 14, 2022 March 22, 2023 195,148 (9) 12,359,138 16.54 58.31%
Series D Investments (Pre-money valuation: RMB2,700.0 million; Post-money valuation: RMB2,775.0 million)
Equity Subscription
Beijing Xingtou Youxuan Venture Capital Fund (Limited
Partnership) (ږ( Υྫ))
(“Xingtou Y ouxuan ”) .............
August 18, 2022 August 29, 2022 282,405 30 million 27.75 30.05%
Huzhou Zhuosheng Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ (Υྫ))
(“Huzhou Zhuosheng ”) ............
August 18, 2022 September 1, 2022 169,443 18 million 27.75 30.05%
Xiamen Innovation Xingke Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆ
ุ(Υྫ)) (“ Xiamen Innovation ”) .......
August 18, 2022 September 5, 2022 84,721 9 million 27.75 30.05%
Sanming Green Innovation Investment Partnership
(Limited Partnership) (ၠЍ௴อҳ༟ΥྫΆุ (ࠢ
Υྫ)) (“ Sanming Innovation ”) .........
August 18, 2022 September 5, 2022 84,721 9 million 27.75 30.05%
Quanzhou Huide Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟Υྫ (Υྫ))
(“Huide Investment ”) .............
August 18, 2022 September 28, 2022 84,721 9 million 27.75 30.05%
Equity Transfer
Xingtou Youxuan ................ August 18, 2022 August 29, 2022 200,942
(10) 20 million 26.00 34.46%
Huzhou Zhuosheng ............... August 18, 2022 September 1, 2022 120,565 (10) 12 million 26.00 34.46%
Xiamen Innovation ............... August 18, 2022 September 2, 2022 60,283 (10) 6 million 26.00 34.46%
Sanming Innovation ............... August 18, 2022 September 2, 2022 60,283 (10) 6 million 26.00 34.46%
Huide Investment ............... August 18, 2022 September 28, 2022 60,283 (10) 6 million 26.00 34.46%
Suzhou Haisheng Xianting Industrial Investment Fund
Partnership (Limited Partnership) (ପุҳ
ΥྫΆุ (Υྫ)) (“ Haisheng Xianting ”) ..
November 29, 2022 January 17, 2023 and
February 23, 2023
150,706 (11) 15 million 26.00 34.46%
Jiaxing Shuimu Xinchi Venture Capital Partnership
(Limited Partnership) (ཱུ௴ุҳ༟ΥྫΆ
ุ(Υྫ)) (“ Shuimu Xinchi ”).........
April 20, 2023 June 16, 2023 and July 4,
2023
100,467 (12) 10 million 26.00 34.46%
(1) The cost per Share presented in the table has been adjusted to take into account the enlarged registered capital of our
Company as a result of the joint stock reform carried out in June 2025. The amount is arrived at by dividing the total
consideration by the total number of Shares to be converted from the registered capital held by the respective investors as
a result of the joint stock reform and their respective subscriptions or purchases. Furthermore, the cost per Share paid by
Mr. Liu Changjiang and Ms. Jiang Yan for Angel investments has taken into account the conversion of capital reserve into
registered capital of our Company in April 2017.
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(2) The discount to the Offer Price is calculated based on the assumption that the Offer Price is HK$45.00 per H Share, being
the mid-point of the indicative Offer Price range of HK$40.00 to HK$50.00 per H Share, and that the Over-allotment
Option is not exercised.
(3) The equity interest was transferred from Mr. Liu.
(4) The equity interest was transferred from Mr. Xu.
(5) The equity interest was transferred from Ms. Jiang Yan and Mr. Liu Changjiang.
(6) The equity interest was transferred from Zhongxia Capital and Mr. Liu Changjiang.
(7) The equity interest was transferred from Ms. Jiang Yan.
(8) The equity interest was transferred from Mr. Xu.
(9) The equity interest was transferred from Chufeng Investment.
(10) The equity interest was transferred from Mr. Xu.
(11) The equity interest was transferred from Furui Chuangxin.
(12) The equity interest was transferred from Furui Chuangxin.
(13) The post-money valuation is calculated by dividing the total consideration of equity subscriptions under the relevant round
of the Pre-IPO Investments by the percentage of the new subscribed equity interest in the total registered capital of our
Company at the relevant time. The pre-money valuation is calculated by excluding the total consideration of equity
subscriptions from the post-money valuation under the relevant round of the pre-IPO investment. The valuation of our
Company has been increasing along with our rapid business development.
(14) Under certain transfers of equity interest between our investors, the relevant investors considered various factors, such as
timing of the transaction, past or present relationships between the parties and their respective bargaining power in the
negotiations when determining the consideration, in addition to the then valuation of our Company, and thus agreed on a
discount to the then valuation.
(15) Gansheng Investment made a total of capital contribution to the Company of RMB30 million in two tranches on June 24
and July 17, 2020, respectively. Subsequently, on July 17, 2020, Junsheng Investment made an additional capital
contribution to the Company of RMB20 million based on a pre-money valuation of RMB385 million, following the
investment from Gansheng Investment.
Basis of determining the consideration paid
The consideration for Pre-IPO Investments was based on arms’ length negotiation between the
Company and the Pre-IPO investors after taking into consideration of a number of factors, including but
not limited to (1) status of milestones and prospects of R&D and commercialization of our chip
products; (2) our realized and projected operating revenue scale; (3) our R&D management system and
execution efficiency and other factors of our Company; and (4) the timing of the investments, the
market value and the prospects of our business.
Strategic benefits the Pre-IPO Investments
At the time of the Pre-IPO Investments, our Directors were of the view that our Company would
benefit from the additional capital provided by the Pre-IPO Investors’ investments in our Company and
their knowledge and experience.
Reasons for Fluctuations in Valuation
The principal reasons for the material increases in our Company’s valuation are as follows:
(1) the increase in valuation from the Angel investments to the Pre-Series A investments was
mainly due to our research and development progress including the launch of China’s first
ASIC DSP-integrated portable power amplifier audio chip FS1601;
(2) the increase in valuation from the Pre-Series A investments to the Series B investments was
mainly due to our successful commercialization of FS1601 and the rapid increase in our
revenue after the launch of FS1601;
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(3) the increase in valuation from the Series B investments to the Series C investments was
mainly due to our research and development progress including the launch of China’s first
mid/high-power audio chip which successfully expanded our product portfolio and customer
coverage, and the significant sales growth in our power amplifier audio chips;
(4) the increase in valuation from the Series C investments to the Series D investments was
mainly due to the significant growth in our revenue and market shares; and
(5) the increase in valuation from the Series D investments to the Listing was mainly due to the
significant growth in our revenue and market shares. At the time of the Series D
investments, the Pre-IPO Investors primarily considered the Company’s unaudited revenue
of RMB103.1 million for the year of 2021 and the Company’s global market shares of power
amplifier audio chips of 1.7% in 2021. By contrast, the valuation for the Global Offering
reflects (i) the Company’s revenue of RMB355.2 million for the year of 2024, representing
an increase of 244.5% over 2021, and (ii) the Company’s global market shares of power
amplifier audio chips of 4.1% in 2024, representing an increase of 141% over 2021.
Use of Proceeds from the Pre-IPO Investments
The proceeds received by us from the Pre-IPO Investments which involved subscriptions of
increased registered capital of our Company amounted to approximately RMB526.5 million. As of the
Latest Practicable Date, the proceeds from the Pre-IPO Investments had been fully utilized for our
general operation and working capital purposes.
Special Rights of Our Pre-IPO Investors
Pursuant to the investment agreement entered among our Company, Mr. Xu and the Pre-IPO
Investors (including Huzhou Zhuosheng) on August 18, 2022 (the “ Investment Agreement ”) and the
supplemental agreement to the Investment Agreement entered among our Company, Mr. Xu and the
Pre-IPO Investors (including Huzhou Zhuosheng) on August 18, 2022 (the “First Supplemental
Agreement”), the Pre-IPO Investors had been granted (i) certain special rights by the Company,
including, among others, redemption rights, pre-emptive rights, anti-dilution rights, information rights,
co-sale rights, right of first refusal and liquidation preferences, and (ii) redemption rights by Mr. Xu.
Special rights granted by the Company to the Pre-IPO Investors (excluding Huzhou Zhuosheng)
As advised by the PRC Legal Advisor, pursuant to a supplemental agreement to the Investment
Agreement entered into among our Company, Mr. Xu and the Pre-IPO Investors (excluding Huzhou
Zhuosheng) on April 30, 2025 (the “ Second Supplemental Agreement ”), the redemption rights granted
to such Pre-IPO Investors (excluding Huzhou Zhuosheng) by the Company shall be irrevocably
terminated and shall be void ab initio and are deemed to have never had any legal effect. Prior to the
execution of the Second Supplemental Agreement, only certain information rights and director
nomination rights under the Investment Agreement and the First Supplemental Agreement had been
exercised by the Pre-IPO Investors. These rights were exercised in the ordinary course for governance
and information purposes and did not result in any financial obligations, liabilities or other financial
implications for the Company nor affect the PRC Legal Advisor’s conclusion above. There was no
exercise of redemption rights granted by the Company during the Track Record Period.
Pursuant to a supplemental agreement to the Investment Agreement entered into among our
Company, Mr. Xu and the Pre-IPO Investors (excluding Huzhou Zhuosheng) on June 27, 2025 (the
“Third Supplemental Agreement ”), all other special rights under the Pre-IPO Investments for such
Pre-IPO Investors (excluding Huzhou Zhuosheng) shall cease to be effective and be terminated on the
date preceding the Listing, which include, among others, pre-emptive rights, information rights,
anti-dilution rights, co-sale rights, right of first refusal and liquidation preferences.
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Accordingly, all of the special rights granted by the Company to the Pre-IPO Investors (excluding
Huzhou Zhuosheng) were terminated under the Second Supplemental Agreement and Third
Supplemental Agreement in compliance with Chapter 4.2 of the Guide.
Article 143 of the Civil Code of the People’s Republic of China (Պ )
stipulates that a civil legal act is valid if it is conducted by parties with the requisite capacity for civil
conduct, is based on genuine intent, and does not contravene mandatory provisions of laws,
administrative regulations, or public order and morals. Adhering to the principle of autonomy of will,
the Company and the Pre-IPO Investors (excluding Huzhou Zhuosheng) explicitly agreed that the
redemption rights were irrevocably terminated and deemed void ab initio . Through the execution of the
Second Supplemental Agreement and the Third Supplemental Agreement, while the clauses concerning
the redemption rights have never been exercised, both parties agreed to terminate these clauses and to
treat them as having no legal effect from the time of their execution, thereby restoring the rights and
obligations of both parties to the status quo ante as if such clauses had never been agreed upon. This
arrangement does not violate any mandatory provisions of laws, administrative regulations, or public
order and morals, and is thus legally valid. Based on the above, the PRC Legal Advisors are of the view
that the redemption rights agreed upon by the Company and the Pre-IPO Investors (excluding Huzhou
Zhuosheng) have been irrevocably terminated and shall be deemed void ab initio .
The Investment Agreement and the First Supplemental Agreement do not contain any clause that
explicitly require consensus from all contracting parties for any subsequent amendments.
In the First Supplemental Agreement, the parties (including the Pre-IPO Investors) agree that
some investors waive relevant rights under this supplemental agreement shall not affect the other
investors to exercise relevant rights. Based on the Article 143 and other relevant laws and regulations,
the PRC Legal Advisor is of the opinion that the aforementioned provisions in the First Supplemental
Agreement do not violate the mandatory provisions of Chinese laws and administrative regulations, nor
do they contravene public order or good morals. Such provisions are legally valid and binding upon the
Pre-IPO Investors.
In the Third Supplemental Agreement, the Pre-IPO Investors other than Huzhou Zhuosheng agree
not to claim the shareholders’ special rights (including but not limited to the redemption rights) under
the Second Supplemental Agreement and the Third Supplemental Agreement that have been suspended
or terminated for them but remain in effect for Huzhou Zhuosheng, on the grounds that Huzhou
Zhuosheng has not executed the Second Supplemental Agreement and the Third Supplemental
Agreement, which shall become effective for the Pre-IPO Investors other than Huzhou Zhuosheng who
executed the Third Supplemental Agreement. Based on the Article 143 and other relevant laws and
regulations, the PRC Legal Advisor is of the opinion that the aforementioned provisions provided in the
Third Supplemental Agreement do not violate the mandatory provisions of Chinese laws and
administrative regulations, nor do they contravene public order or good morals. Such provisions are
legally valid and binding upon the Pre-IPO Investors other than Huzhou Zhuosheng.
Based on the above provisions in the First Supplemental Agreement, the Second Supplemental
Agreement and the Third Supplemental Agreement, the PRC Legal Advisor is of the view that the
Second Supplemental Agreement and the Third Supplemental Agreement are still legally binding upon
the Pre-IPO Investors other than Huzhou Zhuosheng without Huzhou Zhuosheng as a signatory to the
Second Supplemental Agreement and the Third Supplemental Agreement.
Special rights granted by Mr. Xu to the Pre-IPO Investors
Pursuant to the Third Supplemental Agreement, the redemption rights granted by Mr. Xu to the
Pre-IPO Investors (excluding Huzhou Zhuosheng) shall be terminated on the date preceding the first
submission of the listing application to the Stock Exchange for the purpose of the Global Offering,
provided that such special right shall resume automatically in the event that (i) the listing application
has been withdrawn by our Company; (ii) the listing application has been returned or rejected by the
Stock Exchange; (iii) our Company did not pass the hearing of the listing application by the Listing
HISTORY AND CORPORATE STRUCTURE
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Committee; and (iv) the Listing does not take place within 18 months after June 27, 2025. Accordingly,
all of the special rights granted by Mr. Xu to the Pre-IPO Investors (excluding Huzhou Zhuosheng)
were terminated under the Third Supplemental Agreement in compliance with Chapter 4.2 of the Guide.
For the redemption rights granted by Mr. Xu, there were no side agreements or arrangements
between the Company and Mr. Xu, nor had the Company provided any form of guarantee in connection
with any potential default or failure by Mr. Xu to fulfill his obligations relating to such redemption
rights. Although the Company was a signing party to the Investment Agreements and the First
Supplemental Agreement, the Company had no connection or involvement in the arrangements
concerning the redemption rights between the Pre-IPO Investors and Mr. Xu, nor did it bear any
obligation to repurchase any Shares under such terms. For the details of the redemption rights granted
by Mr. Xu, see Note 34 to the Accountants Report in Appendix I.
Special rights granted by the Company to Huzhou Zhuosheng
Although our Company, as advised by the PRC Legal Advisor, has exhausted different means to
liaise with Huzhou Zhuosheng, our Company was not able to liaise with any of the representatives of
Huzhou Zhuosheng. The PRC Legal Advisor is of the view that as of the Latest Practicable Date, in
accordance with the First Supplemental Agreement, all special rights granted to Huzhou Zhuosheng by
the Company and by Mr. Xu have been terminated upon our Company’s listing application to the Stock
Exchange and will automatically resume in the event that (1) our Company’s listing application is
withdrawn, lapsed or rejected; or (2) the Listing has not been completed within 12 months upon
termination of such special rights.
As advised by the PRC Legal Advisor, the arrangement for Huzhou Zhuosheng would not affect
the rights and obligations of other Pre-IPO Investors and it would not have any impact on the PRC
Legal Advisor’s conclusion that the redemption rights granted to the Pre-IPO Investors (excluding
Huzhou Zhuosheng) by the Company shall be irrevocably terminated and shall be void ab initio,
because the Pre-IPO Investors (excluding Huzhou Zhuosheng) agreed in the Third Supplemental
Agreement that they shall not claim the redemption rights as to the Pre-IPO Investors (excluding
Huzhou Zhuosheng) which had been terminated pursuant to the Second Supplemental Agreement on the
grounds that Huzhou Zhuosheng did not execute the Second Supplemental Agreement.
Except for the redemption liabilities recognized related to Huzhou Zhuosheng, no liability
regarding such redemption rights was recorded during the Track Record Period. For the details of
redemption liabilities recognized related to Huzhou Zhuosheng, see Note 26 to the Accountants Report
in Appendix I.
Based on the representations and confirmations given to the Joint Sponsors and the Reporting
Accountants’ opinion as set out in Appendix I to this prospectus, nothing has come to the attention of
the Joint Sponsors that would cause them to cast reasonable doubt on the issue as set out above.
Information regarding Our Principal Pre-IPO Investors
Set out below is a description of our Sophisticated Independent Investors (including Pathfinder
SIIs) and other principal Pre-IPO Investors (being investors that have made meaningful investments in
our Company (each holding more than 1.00% of our total issued and outstanding Shares immediately
upon the Listing)). Among our Pre-IPO Investors, we have seven Sophisticated Independent Investors,
four of which respectively held more than 3.0% of the total issued Shares of our Company as of the
Latest Practicable Date. To the best knowledge of our Directors, each of our Sophisticated Independent
Investors and other principal Pre-IPO Investors is independent from and not connected with any
Director, chief executive or substantial shareholder of our Company, or its subsidiaries, or any of their
respective close associates unless as disclosed otherwise, and each of such Pre-IPO Investors is
independent from each other unless as disclosed otherwise.
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Our Pathfinder SIIs
(1) Huaqin Technology SII (being Moqin Intelligent)
Moqin Intelligent is a limited liability company incorporated in the PRC and principally engaged
in investment management and responsible for industrial investment and synergy. Moqin Intelligent is a
wholly-owned subsidiary of Huaqin Technology Co., Ltd. (ʮ̡ )( “ Huaqin
Technology ”), a company whose shares are listed on the Shanghai Stock Exchange (stock code:
603296) and an Independent Third Party. Huaqin Technology specializes in the R&D, design,
production, manufacturing, and operational services of smart hardware products, with offerings
spanning smart phones, laptops, tablets, smart wearables, AIoT, servers and automotive electronic
products, etc.. The Group became acquainted with Huaqin Technology through industry events. Huaqin
Technology is a subsidiary of Shanghai Aoqin Telecom Technology Co., Ltd. (ࠢ
ʮ̡)( “ Shanghai Aoqin ”), which is ultimately controlled by Qiu Wensheng (˖͛), an Independent
Third Party. During the Track Record Period, Huaqin Technology indirectly purchased audio ICs and
other electronic components from the Group. As of the Latest Practicable Date, Moqin Intelligent held
approximately 6.36% of the total issued shares of our Company. According to Frost & Sullivan, Huaqin
Technology is a key participant in the downstream smart hardware industry in terms of market share by
revenue in the PRC as of June 30, 2019
(1) and December 31, 2024, respectively. According to Frost &
Sullivan, Huaqin Technology achieved revenue exceeding RMB30 billion in 2019 and RMB100 billion
in 2024, ranking among the top 3 companies in the downstream smart hardware industry. In compliance
with Rule 18C.05 of the Listing Rules, Moqin Intelligent held approximately 6.36% and 6.36% of the
total issued share capital of our Company, as of June 29, 2025 (being the date of submission of our
Company’s listing application) and June 29, 2024 (being the commencement date of the pre-application
12-month period), respectively.
(2) Fortune Capital SIIs (being Fortune Chuanghong and Caizhi Chuangying)
Each of Fortune Chuanghong and Caizhi Chuangying is a limited partnership established in the
PRC, with the same general partner, Shenzhen Fortune Caizhi Venture Capital Management Co., Ltd.
(ʮ̡ )( “ Fortune Capital ”), an Independent Third Party and holding
approximately 4.25% and 0.18% partnership interests in Fortune Chuanghong and Caizhi Chuangying,
respectively. All of 49 limited partners of Fortune Chuanghong and 30 limited partners of Caizhi
Chuangying are Independent Third Parties, none of which individually holds more than 30% partnership
interests therein. Fortune Capital is ultimately controlled by Hunan TV & Broadcast Intermediary Co.,
Ltd. (ʮ̡ ) (a company whose A shares are listed on the Shenzhen Stock
Exchange (stock code: 000917)), an Independent Third Party and directly and indirectly holding 55%
equity interests in Fortune Capital. The remaining 12 shareholders of Fortune Capital are Independent
Third Parties, none of which individually holds more than 30% equity interests in Fortune Capital.
Fortune Capital primarily invests in information technology, intelligent manufacturing, healthcare,
defense, cultural media, consumer sectors, and enterprise services. Examples of portfolio companies
include Wuxi NCE Power Co., Ltd. (ʮ̡ ) (a company whose shares are listed on
the Shanghai Stock Exchange (stock code: 605111)) and Chengdu Zhimingda Electronics Co. Ltd. ( ϓே
ʮ̡ ) (a company whose shares are listed on the Shanghai Stock Exchange (stock
code: 688636)).
The Group became acquainted with the Fortune Capital SIIs through the outreach of the latter. As
of the Latest Practicable Date, the Fortune Capital SIIs held approximately 4.92% of the total issued
shares of our Company. The assets under management (“ AUM”) of the Fortune Capital was
approximately RMB36 billion as of June 30, 2021
(1), and approximately RMB60 billion as of December
31, 2024, respectively. As Fortune Capital is ultimately responsible for the investment decisions of the
Fortune Capital SIIs, the different platforms are purely different funds or entities ultimately managed
by the same entity and should be aggregated as one Pathfinder SII pursuant to Chapter 2.5 of the
Guide. In compliance with Rule 18C.05 of the Listing Rules, the Fortune Capital SIIs held
HISTORY AND CORPORATE STRUCTURE
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approximately 4.92% and 4.92% of the total issued share capital of our Company, as of June 29, 2025
(being the date of submission of our Company’s listing application) and June 29, 2024 (being the
commencement date of the pre-application 12-month period), respectively.
(3) Xianyun Management SII (being Gansheng Investment)
Gansheng Investment is a limited partnership established in the PRC, with the general partner,
Xianyun (Shanghai) Investment Management Co., Ltd ( ᜑ⪯(ɪऎ)ʮ̡ )( “ Xianyun
Management ”), an Independent Third Party and holding approximately 1.00% partnership interests
therein, which is respectively owned as to 65%, 25% and 10% by Ye Feng ( ໢ไ), Ma Hongmin (ݳ
ઽ) and Yu Hongbin (ⅳߎeach being an Independent Third Party. All of the limited partners of
Gansheng Investment are Independent Third Parties, none of which individually holds more than 30%
partnership interests in Gansheng Investment. The funds managed by Xianyun Management primarily
invests in companies in the semiconductor, new materials, and high-end manufacturing sectors
including OmniVision Integrated Circuits Group Inc. (ණϓཥ༩ (ණྠ)ʮ̡ ) (a company
whose shares are listed on the Shanghai Stock Exchange (stock code: 603501)).
The Group became acquainted with Gansheng Investment through industry events. As of the
Latest Practicable Date, the Xianyun Management SII held approximately 6.41% of the total issued
shares of our Company. The AUM of Xianyun Management derived primarily from Specialist
Technology investments was approximately RMB12.6 billion as of March 31, 2020
(1), and
approximately RMB9.8 billion as of December 31, 2024, respectively. As the investment decisions of
Gansheng Investment are ultimately managed and controlled by Xianyun Management, whose AUM
meets the threshold set out in Chapter 2.5 of the Guide, Gansheng Investment qualifies as a
Sophisticated Independent Investor. In compliance with Rule 18C.05 of the Listing Rules, Gansheng
Investment held approximately 6.41% and 6.41% of the total issued share capital of our Company, as of
June 29, 2025 (being the date of submission of our Company’s listing application) and June 29, 2024
(being the commencement date of the pre-application 12-month period), respectively.
(4) Wuxi Capital SII (being Ark Investment)
Ark Investment is a limited partnership established in the PRC, with the general partner, Wuxi
Financial Investment Management Co, Ltd. (ʮ̡ )( “ Wuxi
Financial ”), an Independent Third Party and holding 0.01% partnership interest therein. Wuxi Financial
is a wholly-owned subsidiary of Wuxi Capital Group Co., Ltd. (ʮ̡ )( “ Wuxi
Capital ”). Wuxi Capital is owned as to (i) approximately 73.50% by Wuxi Guofa Capital Operation
Co., Ltd. (ʮ̡ ) (wholly owned by the State-owned Assets Supervision and
Administration Commission of the Wuxi Municipal People’s Government); (ii) approximately 18.28%
by Wuxi Fengrun Investment Co., Ltd. (ʮ̡ ), whose actual controller is the
State-owned Assets Supervision and Administration Commission of the Wuxi Municipal People’s
Government; (iii) approximately 4.11% by Jiangsu Guoxin Investment Group Limited (ණྠ
ʮ̡) (wholly owned by the People’s Government of Jiangsu Province); and (iv) approximately
4.11% by Wuxi Urban Construction Development Group Co., Ltd. (ʮ̡ )
(wholly owned by the State-owned Assets Supervision and Administration Commission of the Wuxi
Municipal People’s Government). The largest limited partner of Ark Investment is Shanghai Wenxin
Enterprise Partnership (Limited Partnership) (Άุ၍ଣΥྫΆุ (Υྫ)) (“ Shanghai
Wenxin ”), an Independent Third Party and holding approximately 54.99% partnership interests in Ark
Investment. Wentianxia holds approximately 87.04% partnership interests in Shanghai Wenxin as a
limited partner. The remaining 5 limited partners of Ark Investment are Independent Third Parties, none
of which individually holds more than 30% partnership interests in Ark Investment. Wuxi Capital is a
state-owned venture capital institution that integrates seed, angel, startup, equity, mergers and
acquisitions, and secondary fund (S fund) investments, focusing on strategic emerging industries such
as biopharmaceuticals, integrated circuits, carbon neutrality and energy conservation, and advanced
manufacturing. Examples of portfolio companies include Wuxi NCE Power Co., Ltd. (΅
ʮ̡) (a company whose shares are listed on the Shanghai Stock Exchange (stock code: 605111)),
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Angelalign Technology Inc. (ʮ̡ ) (a company whose shares are listed on the Stock
Exchange (stock code: 6699)) and Zhongjie (Jiangsu) Technology Co., Ltd. (΅Ϟ
ʮ̡) (a company whose shares are listed on the Shenzhen Stock Exchange (stock code: 301072)).
The Group became acquainted with Ark Investment through the outreach of the latter. As of the
Latest Practicable Date, Ark Investment held approximately 4.60% of the total issued shares of our
Company. The AUM of Wuxi Capital was over RMB30.5 billion and approximately RMB270 billion as
of December 31, 2020
(1) and May 31, 2025, respectively. As the investment decisions of Ark
Investment are ultimately managed and controlled by Wuxi Capital, whose AUM meets the threshold set
out in Chapter 2.5 of the Guide, Ark Investment qualifies as a Sophisticated Independent Investor. In
compliance with Rule 18C.05 of the Listing Rules, Ark Investment held approximately 4.60% and
4.60% of the total issued share capital of our Company, as of June 29, 2025 (being the date of
submission of our Company’s listing application) and June 29, 2024 (being the commencement date of
the pre-application 12-month period), respectively.
Our Pathfinder SIIs, in aggregate, held approximately 22.29% and 22.29% of the total issued
share capital of our Company, as of June 29, 2025 (being the date of submission of our Company’s first
listing application) and June 29, 2024 (being the commencement date of the pre-application 12-month
period), respectively.
Our Other Sophisticated Independent Investors
(1) Transsion Holdings SII (being Zhanxiang Information)
Zhanxiang Information is a limited liability company incorporated in the PRC, which is a
wholly-owned subsidiary of Shenzhen Transsion Holdings Co., Ltd. (ʮ̡ )
(“Transsion Holdings ”), a company whose shares are listed on the Shanghai Stock Exchange (stock
code: 688036) and an Independent Third Party. Transsion Holdings primarily engages in the design,
research and development, production, sales, and brand operation of smart terminals centered around
mobile phones. The Group became acquainted with Transsion Holdings through discussions on business
cooperations. During the Track Record Period, Transsion Holdings indirectly purchased power amplifier
audio chips from the Group. According to Frost & Sullivan, Transsion Holdings is a key participant in
the downstream mobile industry in terms of market share by revenue in the PRC as of June 30, 2020
(1)
and December 31, 2024, respectively. According to Frost & Sullivan, Transsion Holdings achieved
revenue exceeding RMB30 billion in 2020 and RMB60 billion in 2024, ranking among the top 10
companies in the downstream mobile industry.
As of the Latest Practicable Date, Zhanxiang Information held approximately 1.98% of the total
issued shares of our Company.
(2) Fujian Investment Development SIIs (being Xiamen Innovation and Sanming Innovation)
Each of Xiamen Innovation and Sanming Innovation is a limited partnership established in the
PRC, with the same general partner, Fujian Province Venture Investment Management Co., Ltd. (޲ܔ
ʮ̡ )( “ Fujian Venture Investment ”), an Independent Third Party, which is
ultimately controlled by Fujian Province Investment Development Group Co., Ltd. (ҳ༟ක೯ණ
ப΂ʮ̡ )( “ Fujian Investment Development ”), an Independent Third Party. Fujian Investment
Development is owned as to (i) approximately 80.58% by the State-owned Assets Supervision and
Administration Commission of the People’s Government of Fujian Province; and (ii) approximately
19.42% by Fujian Industrial Investment Co., Ltd. (ʮ̡ ), whose actual controller
is the State-owned Assets Supervision and Administration Commission of the People’s Government of
Fujian Province. Fujian Venture Investment holds approximately 0.01% and 0.83% partnership interest
in Xiamen Innovation and Sanming Innovation, respectively. The sole limited partner of Xiamen
Innovation is Fujian Investment Development, holding 99.99% partnership interest therein. The limited
partners of Sanming Innovation are Sanming Industrial Investment Group Co., Ltd. (̹ପุҳ༟ණ
ʮ̡ ) and Fujian Huaxing Venture Investment Co., Ltd. (ʮ̡ ) (wholly
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owned by Fujian Investment Development), holding approximately 50.83% and 48.33% partnership
interests therein, respectively. Sanming Industrial Investment Group Co., Ltd. is wholly owned by
Sanming Investment Development Group Co., Ltd. (ʮ̡ ), which is
respectively owned as to 96.55% by the State-owned Assets Supervision and Administration
Commission of Sanming Municipal People’s Government and 3.45% by the Fujian Provincial
Department of Finance. All of the aforementioned limited partners of Xiamen Innovation and Sanming
Innovation are Independent Third Parties. Fujian Investment Development is a provincial-level
state-owned capital investment company. Examples of portfolio companies include Zhongmin Energy
Co., Ltd. (ʮ̡ ) (a company whose shares are listed on the Shanghai Stock
Exchange (stock code: 600163)), Min Xin Holdings Ltd. (ʮ̡ ) (a company whose shares
are listed on the Stock Exchange (stock code: 222)) and Fujian Futou New Energy Investment Co., Ltd.
(΅ʮ̡ ) (a company whose shares are listed on the National Equities Exchange
and Quotations of the PRC (ப΂ʮ̡ ) (stock code: 839351)).
As Fujian Investment Development is ultimately responsible for the major investment decisions of
the Fujian Investment Development SIIs, the different platforms are purely different funds or entities
ultimately managed by the same entity and should be aggregated as one SII pursuant to Chapter 2.5 of
the Guide. As of the Latest Practicable Date, Xiamen Innovation and Sanming Innovation held
approximately 1.11% of the total issued share capital of our Company. The AUM of Fujian Investment
Development was approximately RMB67.5 billion as of June 30, 2022
(1), and approximately RMB88.1
billion as of March 31, 2025, respectively.
(3) CIIT Asset Management SII (being Xingtou Youxuan)
Xingtou Youxuan is a limited partnership established in the PRC, with the general partner Xingtou
(Beijing) Capital Management Company Limited ( ጳҳ(̏ԯ)ʮ̡ )( “ Xingtou Beijing ”),
an Independent Third Party and holding 0.0758% interest therein. Xingtou Beijing is a wholly-owned
subsidiary of CIIT Asset Management Co., Ltd. (ʮ̡ )( “ CIIT Asset
Management ”). CIIT Asset Management is a specialized platform under Industrial Bank Co., Ltd. ( ጳ
ʮ̡ ) (a company whose A shares are listed on the Shanghai Stock Exchange (stock
code: 601166)) for conducting private equity investment and related asset management services.
As of the Latest Practicable Date, Xingtou Youxuan held approximately 1.85% of the total issued
share capital of our Company. As the investment decisions of Xingtou Youxuan are ultimately managed
and controlled by CIIT Asset Management, whose AUM meets the threshold set out in Chapter 2.5 of
the Guide, Xingtou Youxuan qualifies as a Sophisticated Independent Investor. The AUM of CIIT Asset
Management was over RMB46.1 billion as of March 31, 2022
(1), and over RMB30.0 billion as of
December 31, 2024, respectively.
(1) being a date not more than six months prior to the date on which the relevant investor signed the relevant definitive
agreement for their investment in our Company
Our Other Principal Pre-IPO Investors
Mr . Liu Changjiang
Mr. Liu Changjiang is an individual investor. As of the Latest Practicable Date, Mr. Liu was the
general manager of Xiamen Xicheng Graphene Science and Technology Co., Ltd. (Ҧ
ʮ̡) and held 20% equity interests in Xiamen Heyong Investment Management Co., Ltd. (ձ
ʮ̡ ), which managed multiple funds. Mr. Liu served as a Director from January 2018
to May 2025. In order to devote more time to his other business affairs, Mr. Liu resigned as a Director.
Weitai Shenghong
Weitai Shenghong is a limited partnership established in the PRC with the general partner Xiamen
HeYong Capital Management Company Limited (ʮ̡ )( “ HeY ong Capital ”),
HeYong Capital is owned by Cai Weiwei ( ᇹਃਃ), Liu Changjiang (Ϫ), Wang Jing ( ˮཨ), Hong
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Jinlong (Ꮂ), Lai Jinmei (ૠ) and You Lei ( ದᆾ) as to 30%, 20%, 15%, 12.9%, 12.1% and
10%, respectively. Save for Liu Changjiang, all of the foregoing individuals are Independent Third
Parties. The largest limited partner of Weitai Shenghong is Liu Jun (ࠏan Independent Third Party.
The remaining six limited partners of Weitai Shenghong are Independent Third Parties, none of which
individually holds more than 30% partnership interests in Weitai Shenghong.
Vinno Intelligent and Health
Vinno Intelligent and Health is a limited partnership established in the PRC, with the general
partner Vinno Capital Co., Ltd. (ʮ̡ )( “ Vinno Capital ”), holding
approximately 1.78% partnership interests. Vinno Capital is owned by Ding Mingfeng (ࢤ׼Tang
Zujia (ख़Գ), Yu Juan (ऐ), Qian Qiang ( ፺੶) as to 72%, 12%, 8% and 8%, respectively, each
being an Independent Third Party. All of the limited partners of Vinno Intelligent and Health are
Independent Third Parties, none of which individually holds more than 30% partnership interests in
Vinno Intelligent and Health.
Junyi Kaixiang and Junyi Borui
Junyi Kaixiang is a limited partnership established in the PRC with the general partner Xiamen
Junyixing Equity Investment Management Co., Ltd (ʮ̡ ), which holds
approximately 1.96% partnership interests therein and is wholly owned by Shanghai Junyi Boxing
Venture Capital Management Co., Ltd. (ʮ̡ )( “ Junyi Boxing ”). The
limited partner of Junyi Kaixiang is Xiamen Junyi Boyue Venture Capital Partnership (Limited
Partnership) (ёᑈ௹൳௴ุҳ༟ΥྫΆุ (Υྫ)) (“ Junyi Boyue ”), holding approximately
98.04% partnership interests therein. The largest limited partner of Junyi Boyue is Wei Xing (݋an
Independent Third Party, holding 64% partnership interests in Junyi Boyue. The general partner of
Junyi Boyue is Junyi Boxing, holding 1% partnership interest therein. All of the other 18 limited
partners of Junyi Boyue are Independent Third Parties, none of which individually holds more than
30% partnership interests in Junyi Boyue.
Junyi Borui is a limited partnership established in the PRC with the general partner Junyi Boxing,
holding 1% partnership interest, which is ultimately controlled by Guo Peng ( ெᣥ), an Independent
Third Party. The largest limited partner of Junyi Borui is Wei Xing (݋an Independent Third Party,
holding 42% partnership interests in Junyi Borui. None of the other 17 limited partners of Junyi Borui
individually holds more than 30% partnership interests in Junyi Borui.
Chaoyue Moore
Chaoyue Moore is a limited partnership established in the PRC with the general partner Shanghai
Chaoyue Moore Private Equity Fund Management Co., Ltd. (ʮ̡ ), an
Independent Third Party, holding approximately 0.73% partnership interest in Chaoyue Moore. The
largest limited partner of Chaoyue Moore is National Integrated Circuit Industry Investment Fund Co.,
Ltd. (ʮ̡ ), an Independent Third Party, holding approximately
39.16% partnership interests in Chaoyue Moore. All of the other 8 limited partners of Chaoyue Moore
are Independent Third Parties, none of which individually holds more than 30% partnership interests in
Chaoyue Moore.
Zhengchu V enture Capital
Zhengchu Venture Capital is a limited partnership established in the PRC with the general partner
Xiamen Falcon Investment Management Co., Ltd. (ʮ̡ )( “ Xiamen Falcon ”),
an Independent Third Party. Xiamen Falcon is owned by Xie Jianhua (ശ) as to 32%, Chen Meilian
(ᇳ) as to 17.45%, Fu Xiaofeng ( ௩ወไ) as to 17.45%, Huang Danlin ( රʗ೙) as to 13.1%, and
two entities controlled by Jin Xiaoqi (ѽփ) as to 20%, each being an Independent Third Party. The
largest limited partner of Zhengchu Venture Capital is Wang Jiaqiang ( ˮԳ੶), an Independent Third
Party, holding approximately 51.46% partnership interests in Zhengchu Venture Capital. Shenzhen
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Sanshuo Chengshun Investment Co., Ltd. (ʮ̡ ), which is owned as to 50%,
25% and 25% by Huang Xuankai, Huang Heting and Huang Danlin, each being an Independent Third
Party, holds approximately 30.10% partnership interests in Zhengchu Venture Capital. All of the other 5
limited partners of Zhengchu Venture Capital are Independent Third Parties, none of which individually
holds more than 30% partnership interests in Zhengchu Venture Capital.
Kuanlian Investment
Kuanlian Investment is a limited liability company incorporated in the PRC and a wholly owned
subsidiary of Shanghai Aoqin, which is ultimately controlled by Qiu Wensheng (˖͛), an
Independent Third Party.
Junsheng Investment and Junqing Investment
Junsheng Investment is a limited partnership established in the PRC with the general partner
Shanghai Juntong Equity Investment Management Co., Ltd. (ʮ̡ ), which
is owned by Wen Wei (۾Guo Yanfen (ځWeng Yiqing (ࡠYang Bo ( เ௹) and Zhang
Li ( ੵ஁) as to 44.35%, 18.92%, 17.12%, 14.26% and 5.35%, respectively, each being an Independent
Third Party. All of the 8 limited partners of Junsheng Investment are Independent Third Parties, none of
which individually holds more than 30% partnership interests in Junsheng Investment.
Junqing Investment is a limited partnership established in the PRC with the general partner
Shanghai Junlong Enterprise Management Partnership (Limited Partnership) ( ɪऎё⽍Άุ၍ଣΥྫΆ
ุ(Υྫ)), which is owned by Wen Wei (۾and Zhang Yu ( ੵຄ) as to 50% and 50%,
respectively, each being an Independent Third Party. The largest limited partner of Junqing Investment
is Li Le ( ҽᆀ), an Independent Third Party and holding approximately 33.33% partnership interests in
Junqing Investment. All of the other four limited partners of Junqing Investment are Independent Third
Parties, none of which individually holds more than 30% partnership interests in Junqing Investment.
Chufeng Investment
Chufeng Investment is a limited partnership established in the PRC with the general partner
Tianjin Shuncheng Investment Management Partnership (Limited Partnership) (ҳ༟၍ଣΥྫ
Άุ(Υྫ)) (“ Tianjin Shuncheng ”). The general partner of Tianjin Shuncheng is Tianjin
Shunchuang Investment Management Co., Ltd. (ப΂ʮ̡ )( “ Tianjin
Shunchuang ”). Tianjin Shunchuang is owned as to 18% by Lei Jun (ࠏbeing an Independent Third
Party, and 82% by Tianjin Shunyao Enterprise Management Co., Ltd. (ப΂ʮ
̡), which is owned by Ma Wenjing ( ৵˖᎑), Cao Liping ( ૎஁̻) and Cheng Tian ( ೻˂) as to 34%,
33% and 33%, respectively, each being an Independent Third Party. The largest limited partner of
Chufeng Investment is Hainan Lanlan Network Technology Co., Ltd. (ʮ̡ ), an
Independent Third Party, holding approximately 35% partnership interests therein. All of the other 20
limited partners of Chufeng Investment are Independent Third Parties, none of which individually holds
more than 30% partnership interests in Chufeng Investment.
Wentianxia
Wentianxia is a limited liability company incorporated in the PRC, which is ultimately owned by
Zhang Xuezheng (݁as to 99% and Liu Xiaojing ( ᄎʃ᎑) as to 1%, each being an Independent
Third Party.
Meaningful Investment from Sophisticated Independent Investors
We have received investments from four Pathfinder SIIs, namely Moqin Intelligent, Fortune
Capital SIIs, Gansheng Investment and Ark Investment, each having invested in the Group for at least
12 months prior to the first submission of our listing application to the Stock Exchange for the purpose
of the Global Offering. In accordance with Chapter 2.5 of the Guide, each of Moqin Intelligent, Fortune
Capital SIIs, Gansheng Investment and Ark Investment held more than 3%, and in aggregate more than
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10%, of the issued share capital of our Company as of the date of our listing application and throughout
the pre-application 12-months period. For details of the shareholding percentage in our Company’s
share capital of each of the Sophisticated Independent Investors, see “—Capitalization of Our
Company”.
As of the Latest Practicable Date, our Sophisticated Independent Investors held, in aggregate,
approximately 27.23% in the total issued share capital of our Company. Upon the Listing, assuming the
Over-allotment Option is not exercised, Gansheng Investment, Moqin Intelligent, Fortune Chuanghong,
Caizhi Chuangying, Ark Investment, Zhanxiang Information, Xingtou Youxuan, Xiamen Innovation and
Sanming Innovation will hold 5.72%, 5.68%, 4.19%, 0.2%, 4.11%, 1.77%, 1.65%, 0.5% and 0.5% in
the total issued share capital of our Company, respectively. Upon the Listing, such Sophisticated
Independent Investors will hold, in aggregate, no less than 20% in the total issued share capital of our
Company, assuming that our expected market capitalization at the time of Listing will be more than
HK$4 billion but less than HK$15 billion.
Compliance with the Guide
Based on the documents provided by our Company relating to the Pre-IPO Investments, the Joint
Sponsors have confirmed that the Pre-IPO Investments are in compliance with the guidance on pre-IPO
investments in Chapter 4.2 of the Guide.
PRC Legal Advisor’s Confirmation
As advised by our PRC Legal Advisor, the equity transfers and increases in the registered capital
in respect of our Company, as described above have been completed and settled, and all regulatory
approvals, registrations or filings have been granted in accordance with PRC laws and regulations.
LOCK-UP PERIOD
Pursuant to the applicable PRC law, within the 12 months following the Listing Date, all existing
Shareholders (including our Pre-IPO Investors) are prohibited from disposing of any of the Shares held
by them. The following Shares will be subject to disposal restrictions pursuant to Rule 18C.14 of the
Listing Rules at the time of the Listing:
Name Capacity
Aggregate number
of Shares held
immediately
following the
completion of the
Global Offering
Aggregate
ownership
percentage of
shareholding in the
total issued share
capital of our
Company following
the completion of
the Global
Offering (1) Lock-up period
(%)
Key persons and their close associates
Mr. Xu ........ Founder, chairman of our
Board, executive Director
and president
8,859,800 7.91 Commencing on the date of this
prospectus and ending on
expiry of 12 months from the
Listing Date
Mr. Liu ........ Co-founder, executive Director,
vice president, director of
algorithm applications and
core R&D team member
2,518,500 2.25
Shanghai FourSemi
Management
(2) ..
Employee shareholding
platform controlled by Mr.
Xu
12,617,800 11.27
Xiamen FourSemi
Management
(2) ..
Employee shareholding
platform controlled by Mr.
Xu
7,073,700 6.32
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Name Capacity
Aggregate number
of Shares held
immediately
following the
completion of the
Global Offering
Aggregate
ownership
percentage of
shareholding in the
total issued share
capital of our
Company following
the completion of
the Global
Offering (1) Lock-up period
(%)
Xiamen FourSemi
Chuangke (2) ....
Employee shareholding
platform controlled by Mr.
Xu
4,206,100 3.76
Pathfinder SIIs
Moqin Intelligent .. Pathfinder SII 6,361,400 5.68 Commencing on the date of this
prospectus and ending on
expiry of six months from
the Listing Date
Fortune
Chuanghong ....
Pathfinder SII 4,696,800 4.19
Caizhi Chuangying . Pathfinder SII 221,300 0.20
Gansheng
Investment .....
Pathfinder SII 6,406,800 5.72
Ark Investment ... Pathfinder SII 4,601,600 4.11
Note:
(1) Assuming the Over-allotment Option is not exercised.
(2) As of the Latest Practicable Date, each of Shanghai FourSemi Management, Xiamen FourSemi Management and Xiamen
FourSemi Chuangke was controlled by Mr. Xu as the general partner. Therefore, each of Shanghai FourSemi Management,
Xiamen FourSemi Management and Xiamen FourSemi Chuangke is a close associate of Mr. Xu under the Listing Rules
and is subject to the lock-up requirements pursuant to Rule 18C.14 of the Listing Rules.
Certain limited partners of Shanghai FourSemi Management, Xiamen FourSemi Management and Xiamen FourSemi
Chuangke, namely Mr. Qian Shun, Mr. Liu, Mr. Shi Hongxiao, Mr. He Xiuan, Mr. Yang Xiaoming, Mr. Liu Yanhai and Mr.
Zhu Huaping, are also key persons under Rule 18C.14 of the Listing Rules and shall be subject to a lock-up period
commencing from the date of this prospectus and ending on expiry of 12 months from the Listing Date. They undertake
that they will not dispose of their interests in the above partnerships within the aforementioned lock-up period. For details
of these key persons, see “Business—Research and Development—Our Research and Development Team and Core
Member” and “History-Employee Shareholding Platform”.
Pursuant to the respective partnership agreement of Shanghai FourSemi Management, Xiamen FourSemi Management and
Xiamen FourSemi Chuangke, any transfer of partnership interest by limited partners shall be approved by the general
partner, Mr. Xu and the majority of the limited partners. Mr. Xu as the general partner of the aforementioned three
employee shareholding platforms will ensure that the lock-up restriction will be effectively enforced in respect of the
indirect interests held by these key persons as limited partners.
PUBLIC FLOAT
Pursuant to Rule 8.08(1) of the Listing Rules, assuming that the Over-allotment Option is not
exercised, (i) based on an Offer Price of HK$40.00 per Offer Share (being the low end of the indicative
Offer Price range), our expected market capitalization upon the Listing is HK$4,480.0 million, and the
minimum prescribed public float percentage applicable to our Shares is 25% under 19A.13A(1) of the
Listing Rules; (ii) based on an Offer Price of HK$45.00 per Offer Share (being the mid-point of the
indicative Offer Price range), our expected market capitalization upon the Listing is HK$5,040.0
million, and the minimum prescribed public float percentage applicable to our Shares is 25% under
19A.13A(1) of the Listing Rules; and (iii) based on an Offer Price of HK$50.00 per Offer Share (being
the high end of the indicative Offer Price range), our expected market capitalization upon the Listing is
HK$5,600.0 million, and the minimum prescribed public float percentage applicable to our Shares is
25% under 19A.13A(1) of the Listing Rules.
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The 1,110,200 Domestic Shares that will not be converted into H Shares (representing
approximately 0.99% of our total issued Shares upon the Listing (assuming the Over-allotment Option
is not exercised)) will not be considered as part of the public float as such Domestic Shares will not be
converted into H Shares and will not be listed on the Stock Exchange following the completion of the
Global Offering and the Conversion of Domestic Shares into H Shares.
Of the 98,889,800 H Shares to be converted from Domestic Shares and listed on the Stock
Exchange following the Completion of the Global Offering and the Conversion of Domestic Shares into
H Shares:
(a) 35,275,900 H Shares representing approximately 31.50% of our total issued Shares upon the
Listing (assuming that the Over-allotment Option is not exercised) will not be counted
towards the public float for the purpose of Rule 8.08 of the Listing Rules upon the Listing as
such H Shares are held by Mr. Xu, Mr. Liu, Shanghai FourSemi Management, Xiamen
FourSemi Management and Xiamen FourSemi Chuangke, the core connected persons of our
Company; and
(b) the remaining 63,613,900 H Shares (representing approximately 56.80% of our total issued
Shares upon the Listing (assuming the Over-allotment Option is not exercised) will be
counted towards the public float for the purpose of Rule 8.08 of the Listing Rules after the
Listing as such Shareholders are not core connected persons of our Company upon the
Listing nor accustomed to take instructions from our Company’s core connected persons in
relation to the acquisition, disposal, voting or other disposition of their Shares and their
acquisition of Shares were not financed directly or indirectly by our Company’s core
connected persons.
See “Share Capital—Conversion of Domestic Shares into H Shares” for more details of the H
Shares to be converted from Domestic Shares and listed on the Stock Exchange following the
completion of the Global Offering and the Conversion of Domestic Shares into H Shares.
As a result, immediately upon completion of the Global Offering and the Conversion of Domestic
Shares into H Shares, taking into account 12,000,000 H Shares to be offered pursuant to the Global
Offering (assuming the Over-allotment Option is not exercised), an aggregate of 75,613,900 H Shares
will count towards the public float of our Company, representing 67.51% of the total issued Shares of
our Company. Therefore, our Company will be able to meet the minimum public float requirement
under Rule 19A.13A(1) of the Listing Rules.
FREE FLOAT
Rule 19A.13C of the Listing Rules provides that, there must be sufficient shares for which listing
is sought by a new applicant that are held by the public and available for trading upon listing. This will
normally mean that the portion of H shares for which listing is sought that are held by the public and
not subject to any disposal restrictions (whether under contract, the Listing Rules, applicable laws or
otherwise), at the time of listing, must: (a) represent at least 10% of the total number of issued shares
in the class to which H shares belong at the time of listing (excluding treasury shares), with an
expected market value at the time of listing of not less than HK$50,000,000; or (b) have an expected
market value at the time of listing of not less than HK$600,000,000.
Based on an Offer Price of HK$40.00 per Offer Share, being the low-point of the indicative Offer
Price range, our Company will be able to satisfy the free float requirement under Rule 19A.13C(1) of
the Listing Rules.
CONCERT PARTY AGREEMENT
On June 25, 2019, Mr. Xu and Mr. Liu entered into the Concert Party Agreement, pursuant to
which Mr. Liu has irrevocably agreed to act in concert with Mr. Xu and follow his decisions in
exercising his vote at the general meetings of our Company.
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As of the Latest Practicable Date, Mr. Xu and Mr. Liu controlled 35.28% of the voting power at
the general meetings of our Company. Upon the Listing, Mr. Xu and Mr. Liu will control 31.50% of the
voting power at the general meetings of our Company (assuming the Over-allotment Option is not
exercised). Mr. Xu and Mr. Liu are members of our Controlling Shareholders. See “Relationship with
Our Controlling Shareholders” for further details.
EMPLOYEE SHAREHOLDING PLATFORM
In recognition of the contributions of our key employees and to incentivize them to further
promote our development, we award the partnership interest in our employee shareholding platforms to
the employees and adopt the employee stock ownership plan, which is not subject to the provisions of
Chapter 17 of the Listing Rules. As of the Latest Practicable Date, Shanghai FourSemi Management,
Xiamen FourSemi Management and Xiamen FourSemi Chuangke were established as our employee
shareholding platforms. Shanghai FourSemi Management, Xiamen FourSemi Management and Xiamen
FourSemi Chuangke are controlled by the same general partner, Mr. Xu.
According to the employee stock ownership plan and the respective grant agreements, all
management and voting powers of the employee shareholding platforms are exercised by their
respective sole general partner, Mr. Xu, whereas the relevant employees as the limited partners of such
employee shareholding platforms are entitled to the economic interest.
Shanghai FourSemi Management
Shanghai FourSemi Management was established as a limited partnership under the laws of the
PRC on October 22, 2021. As of the Latest Practicable Date, Shanghai FourSemi Management held
12.62% of our Shares, and its partnership structure was as follows:
Name Position
Capacity of
partnership interests
in Shanghai FourSemi
Management
Approximate
percentage of
partnership
interests
(%)
Mr. Xu .............. Chairman of the Board,
executive Director and
president
General partner 75.5816
Mr. Qian Shun ......... Executive Director, vice
president, chief technology
officer and one of the core
research and development
members
#
Limited partner 0.6417
Mr. Shi Hongxiao ....... One of the core research and
development members #
Limited partner 3.6088
Mr. Zhu Huaping ....... One of the core research and
development members #
Limited partner 1.9906
Mr. Yang Xiaoming ..... One of the core research and
development members #
Limited partner 1.3439
Mr. He Xiuan .......... One of the core research and
development members #
Limited partner 0.9535
25 other persons * ....... Existing employees Limited partner 15.8798
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Xiamen FourSemi Management
Xiamen FourSemi Management was established as a limited partnership under the laws of the
PRC on December 29, 2017. As of the Latest Practicable Date, Xiamen FourSemi Management held
7.07% of our Shares, and its partnership structure was as follows:
Name Position
Capacity of
partnership interests
in Xiamen FourSemi
Management
Approximate
percentage of
partnership
interests
(%)
Mr. Xu .............. Chairman of the Board,
executive Director and
president
General partner 1.2672
Mr. Qian Shun ......... Executive Director, vice
president, chief technology
officer and one of the core
research and development
members
#
Limited partner 35.6040
Mr. He Xiuan .......... One of the core research and
development members #
Limited partner 28.9800
Mr. Yang Xiaoming ..... One of the core research and
development members #
Limited partner 20.7000
Mr. Zhu Huaping ....... One of the core research and
development members #
Limited partner 13.4488
Xiamen FourSemi Chuangke
Xiamen FourSemi Chuangke was established as a limited partnership under the laws of the PRC
on December 9, 2020. As of the Latest Practicable Date, Xiamen FourSemi Chuangke held 4.21% of
our Shares, and its partnership structure was as follows:
Name Position
Capacity of
partnership interests
in Xiamen FourSemi
Chuangke
Approximate
percentage of
partnership
interests
(%)
Mr. Xu .............. Chairman of the Board,
executive Director and
president
General partner 28.4070
Ms. Yu Bingbing ....... Executive Director, vice
president and sales director
Limited partner 16.9366
Mr. Liu .............. Executive Director, vice
president, director of
algorithm applications and
one of the core research and
development members
#
Limited partner 9.6248
Mr. Liu Yanhai ......... One of the core research and
development members #
Limited partner 7.4577
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Name Position
Capacity of
partnership interests
in Xiamen FourSemi
Chuangke
Approximate
percentage of
partnership
interests
(%)
18 other persons* ....... Existing employees Limited partner 37.5739
* None of any employee is a key person under Rule 18C.14 of the Listing Rules. Among such employees, Shi Haokai ( ̦ख௱), a
digital design manager (ᐼ္ ) of the Company, and Zhang Lin (؍a senior system expert (࢕o ft h e
Company hold 6.4136% and 5.0429% partnership interests in Xiamen FourSemi Chuangke, respectively. None of such other
employees holds more than 5% of the partnership interests in Xiamen FourSemi Chuangke individually.
# For the composition and other relevant information of our core research and development members each of which is a key
person under Rule 18C.14 of the Listing Rules, see “Business—Research and Development—Our Research and Development
Team and Core Member”.
CAPITALIZATION OF OUR COMPANY
The following table sets forth our shareholding structure as of the Latest Practicable Date and
immediately after the Global Offering and the Conversion of Domestic Shares into H Shares (assuming
the Over-allotment Option is not exercised):
Name of Shareholder
As of the
Latest Practicable Date
Immediately after the Global Offering and
the Conversion of Domestic Shares into H Shares
(assuming the Over-allotment Option
is not exercised)
Number of
Domestic
Shares
Approximate
shareholding
percentage
Number of
Domestic
Shares
Number of
H Shares
Approximate
shareholding
percentage
(%) (%)
Mr. Xu ............. 8,859,800 8.86 — 8,859,800 7.91
Shanghai FourSemi
Management ....... 12,617,800 12.62 — 12,617,800 11.27
Xiamen FourSemi
Management ....... 7,073,700 7.07 — 7,073,700 6.32
Xiamen FourSemi
Chuangke .......... 4,206,100 4.21 — 4,206,100 3.76
Mr. Liu ............. 2,518,500 2.52 — 2,518,500 2.25
Gansheng Investment ... 6,406,800 6.41 — 6,406,800 5.72
Moqin Intelligent ...... 6,361,400 6.36 — 6,361,400 5.68
Vinno Intelligent and
Health ............ 5,776,900 5.78 — 5,776,900 5.16
Fortune Chuanghong ... 4,696,800 4.70 — 4,696,800 4.19
Ark Investment ....... 4,601,600 4.60 — 4,601,600 4.11
Junyi Kaixiang ....... 3,527,500 3.53 — 3,527,500 3.15
Chaoyue Moore ....... 3,022,300 3.02 — 3,022,300 2.70
Junsheng Investment ... 2,921,500 2.92 — 2,921,500 2.61
Mr. Liu Changjiang .... 2,458,100 2.46 — 2,458,100 2.19
Zhanxiang Information .. 1,981,800 1.98 — 1,981,800 1.77
Xingtou Youxuan ...... 1,850,300 1.85 — 1,850,300 1.65
Wentianxia .......... 1,687,300 1.69 — 1,687,300 1.51
Weitai Shenghong ..... 1,680,000 1.68 — 1,680,000 1.50
Junyi Borui .......... 1,473,700 1.47 — 1,473,700 1.32
Zhengchu Venture
Capital ............ 1,356,700 1.36 — 1,356,700 1.21
Kuanlian Investment ... 1,322,800 1.32 — 1,322,800 1.18
Junqing Investment .... 1,302,300 1.30 — 1,302,300 1.16
Chufeng Investment .... 1,222,700 1.22 — 1,222,700 1.09
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Name of Shareholder
As of the
Latest Practicable Date
Immediately after the Global Offering and
the Conversion of Domestic Shares into H Shares
(assuming the Over-allotment Option
is not exercised)
Number of
Domestic
Shares
Approximate
shareholding
percentage
Number of
Domestic
Shares
Number of
H Shares
Approximate
shareholding
percentage
(%) (%)
Huzhou Zhuosheng .... 1,110,200 1.11 1,110,200 — 0.99
Shunke Investment ..... 1,052,500 1.05 — 1,052,500 0.94
Ms. Jiang Yan ........ 950,000 0.95 — 950,000 0.85
Yahe Xinghua ........ 906,700 0.91 — 906,700 0.81
Shunying Investment ... 747,100 0.75 — 747,100 0.67
Junxin Ruizhi ........ 670,400 0.67 — 670,400 0.60
Jicui Meibai ......... 604,500 0.60 — 604,500 0.54
Longcheer Intelligence .. 604,500 0.60 — 604,500 0.54
Haisheng Xianting ..... 576,900 0.58 — 576,900 0.52
Fumiao Investment .... 560,500 0.56 — 560,500 0.50
Xiamen Innovation .... 555,100 0.56 — 555,100 0.50
Sanming Innovation .... 555,100 0.56 — 555,100 0.50
Huide Investment ...... 555,100 0.56 — 555,100 0.50
Shuimu Xinchi ....... 384,600 0.38 — 384,600 0.34
Furui Chuangxin ...... 383,900 0.38 — 383,900 0.34
Mr. Deng Tianshun .... 336,000 0.34 — 336,000 0.30
Caizhi Chuangying .... 221,300 0.22 — 221,300 0.20
Zhiyou Management ... 181,300 0.18 — 181,300 0.16
Xinda Venture Capital .. 117,900 0.12 — 117,900 0.11
Total .............. 100,000,000 100 1,110,200 98,889,800 89.29
CORPORATE STRUCTURE
The following chart sets forth our corporate structure immediately prior to the Global Offering
and the Conversion of Domestic Shares into H Shares:
12.62% 7.07% 4.21% 2.52% 6.41% 6.36% 5.78% 4.70% 4.60% 3.53% 3.02% 30.32%
100% 100% 100%
Other
Shareholders(9)
Shanghai
FourSemi
Management(1)
Xiamen
FourSemi
Management(1)
Xiamen
FourSemi
Chuangke(1)
Mr. Liu(1) Gansheng
Investment(2)
Moqin
Intelligent(3)
Vinno
Intelligent
and Health(4)
Fortune
Chuanghong(5)
Ark
Investment(6)
Junyi
Kaixiang(7)
Chaoyue
Moore(8)
Shanghai FourSemi Electronics Technology
Company Limited(10)
ʮ̡
(PRC)
Shenzhen FourSemi Electronics Company Limited(11)
ʮ̡
(PRC)
Fourier Technology Limited
ʮ̡
(Hong Kong)
8.86%
Mr. Xu(1)
Our Company
(PRC)
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(1) As of the Latest Practicable Date, (1) Mr. Xu controlled 32.76% of the voting power at the general meetings of our
Company, comprising (i) 8.86% beneficially owned by him directly, (ii) 12.62% beneficially owned by Shanghai FourSemi
Management, where Mr. Xu acted as its general partner, (iii) 7.07% beneficially owned by Xiamen FourSemi Management,
where Mr. Xu acted as its general partner, and (iv) 4.21% beneficially owned by Xiamen FourSemi Chuangke, where Mr.
Xu acted as its general partner; and (2) Mr. Liu controlled 2.52% of the voting power at the general meetings of our
Company through the interests beneficially owned by him directly. Pursuant to the Concert Party Agreement, Mr. Liu
irrevocably agreed to, among others, act in concert with Mr. Xu and follow his instructions in exercising his vote at the
general meetings of our Company. See “—Employee Shareholding Platform” and “—Concert Party Agreement” for further
details.
(2) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Pathfinder SIIs—(3) Xianyun
Management SII (being Gansheng Investment)” for the shareholding structure of Gansheng Investment.
(3) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Pathfinder SIIs—(1) Huaqin
Technology SII (being Moqin Intelligent)” for the shareholding structure of Moqin Intelligent.
(4) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Other Principal Pre-IPO
Investors—Vinno Intelligent and Health” for the shareholding structure of Vinno Intelligent and Health.
(5) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Pathfinder SIIs—(2) Fortune
Capital SIIs (being Fortune Chuanghong and Caizhi Chuangying)” for the shareholding structure of Fortune Chuanghong.
(6) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Pathfinder SIIs—(4) Wuxi
Capital SII (being Ark Investment)” for the shareholding structure of Ark Investment.
(7) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Other Principal Pre-IPO
Investors—Junyi Kaixiang and Junyi Borui” for the shareholding structure of Junyi Kaixiang.
(8) See “—Pre-IPO Investments—Information regarding Our Principal Pre-IPO Investors—Our Other Principal Pre-IPO
Investors—Chaoyue Moore” for the shareholding structure of Chaoyue Moore.
(9) As of the Latest Practicable Date, we had 30 other Shareholders who were also our Pre-IPO Investors each holding less
than 3% shareholding of our Company. See “—Capitalization of Our Company” for details.
(10) As of the Latest Practicable Date, it had not commenced any business operations. It is anticipated that it will be principally
engaged in the trading of power amplifier audio chips.
(11) It is principally engaged in trading of power amplifier audio chips.
The following chart sets forth our corporate structure immediately after the completion of the
Global Offering and the Conversion of Domestic Shares into H Shares, without taking into account any
H Shares which may be issued upon the exercise of the Over-allotment Option:
11.27% 6.32% 3.76% 2.25% 5.72% 5.68% 5.16% 4.19% 4.11% 3.15% 2.70% 27.07% 10.71%
100% 100% 100%
Global
Offering
Shareholders
Shanghai
FourSemi
Management(1)
Xiamen
FourSemi
Management(1)
Xiamen
FourSemi
Chuangke(1)
Mr. Liu(1) Gansheng
Investment(2)
Moqin
Intelligent(3)
Vinno
Intelligent
and Health(4)
Fortune
Chuanghong(5)
Ark
Investment(6)
Junyi
Kaixiang(7)
Chaoyue
Moore(8)
Shanghai FourSemi Electronics Technology
Company Limited(10)
ʮ̡
(PRC)
Shenzhen FourSemi Electronics Company Limited(11)
ʮ̡
(PRC)
Our Company
(PRC)
Fourier Technology Limited
ʮ̡
(Hong Kong)
Other
existing
Shareholders(9)
7.91%
Mr. Xu(1)
(1)−(11) See notes to the corporate structure chart above.
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OVERVIEW
Who We Are
We are a provider of power amplifier audio chips and haptic drivers in China. We specialize in the
design of low-power audio chips, mid/high-power audio chips and haptic drivers under a fabless model
to offer a wide array of solutions for emerging application scenarios. According to the F&S report:
 in terms of total shipment volume in 2024 of power amplifier audio chips for use in smart
displays, we ranked first among power amplifier audio chip providers in China;
 in terms of total shipment volume of power amplifier audio chips in 2024, we ranked second
among power amplifier audio chip providers in China, and third among power amplifier
audio chip providers globally; and
 in terms of total shipment volume of haptic drivers in 2024, we ranked fourth among haptic
driver providers in China.
Our power amplifier audio chip products
Our portfolio of products empowers various industries, including consumer electronics and
intelligent vehicles. We first introduced our power amplifier audio chip products for portable consumer
electronics to optimize audio, create effects and protect speakers using our algorithms. When deployed,
our power amplifier audio chip products receive the electrical signal input, analyze and preprocess the
signal by filtering noise and strengthening the received signal, process the signal by amplifying
electrical power, tunning audio signal based on scenario, convert the signal to code speaker driver
movement while simultaneously enabling the speaker protection technologies. This allows users’
devices to output the highest quality of audio, reduce power consumption, and protect the speakers to
achieve device longevity.
With the success of our first power amplifier audio chip products, we expanded our product
portfolio by adding a more powerful line of power amplifier audio chip products that are primarily for
larger electronics and intelligent vehicles and a new line of chips that process haptic feedback to
provide users with a diverse way of interacting with their devices. Our products are fundamental for
devices to perceive operation scenarios accurately, respond to users dynamically and enhance
human-device interaction. With our products, we have built deep technical expertise in these industries
and believe we will benefit as new application scenarios continue to emerge in these industries with
immense growth potential.
Our product innovation stems from our technological development. Through deeply understanding
market needs and leveraging our research and development capabilities, we are able to accelerate
commercialization while deploying our resources strategically in exploring new application scenarios.
For example, we have launched multiple China-first chip products under the trend of domestic
substitution, with breakthroughs in algorithm and system architecture, low energy consumption,
real-time processing, low distortion, and multi-scenario perception. According to the F&S report, we
introduced:
 China’s first ASIC DSP-integrated portable power amplifier audio chip in 2017;
 China’s first mid/high-power audio chip in 2021; and
 China’s first automotive-grade AEC-Q100-certified power amplifier audio chip in 2023.
We have established collaborative relationships with our key customers in the industries through
research and development initiatives. This approach embeds us within their ecosystem, forming
synergistic and strategic alliances that enhance our competitiveness and support long-term sustainable
growth. We have successfully replicated this approach across strategic segments of our customers,
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starting with smartphones, expanding into smart displays and intelligent vehicles. Leveraging our
integration-driven approach, we have also successfully expanded across multiple application domains
and established strong partnerships with customers in each key sector. For instance:
 our power amplifier audio chips have been adopted by nine out of the top ten global
smartphone manufacturers in terms of their shipment volume in 2024, according to the F&S
report;
 our mid/high-power audio chips have been adopted by eight out of the top ten China TV
manufacturers in terms of their shipment volume in 2024, according to the same source; and
 we have established a contracted partnership with one of the world’s largest renewable
energy vehicle manufacturers for our automotive-grade power amplifier audio chips.
Our Financial Performance
We experienced tremendous growth during the Track Record Period. We generate revenue
primarily from the provision of our chips. Our revenue increased from RMB130.3 million in 2022 to
RMB150.3 million in 2023, further to RMB355.2 million in 2024. Our revenue maintained relatively
stable at RMB288.8 million in the ten months ended October 31, 2024 and RMB280.8 million in the
ten months ended October 31, 2025. Backed by our rapid growth and proprietary technologies, we are
strategically positioned to seize opportunities in the emerging markets.
From our Robust Technological Capabilities to our Strong Market Expansion Abilities
Audio perception, being one of the primary senses of the human body, represents one of
humanity’s most fundamental needs, and audio technology has boasted an exceptionally broad range of
application possibilities over the past years. Since our inception in 2016, where our products were
initially designed for power amplifier audio in smartphones, driven by our technological development,
we have progressively extended our product lines and capabilities to cater to different emerging
application scenarios. In 2023, we also launched our haptic drivers which are designed to detect users’
touch inputs and control motor vibrations, primarily manifesting vibration effects at the device level
while different voltages drive different motors to achieve varying haptic feedback. Our marketing
initiatives have strategically focused on delivering industry-tailored solutions for several emerging
industries undergoing fundamental transformation, including consumer electronics, intelligent vehicles
and robotics. We will continue to explore new areas of growth, leveraging our market position,
know-how and competitive advantages. We believe we are well-positioned to capitalize the immense
growth potential of the different industries as set forth below as they become our primary growth
drivers.
Significant Market Opportunities
Consumer Electronics
For consumer electronics, our products support audio applications in scenarios such as
smartphones, smart wearables, smart displays and smart speakers. According to the F&S report, in
terms of total shipment volume of power amplifier audio chips for use in smart displays in 2024, we
ranked first among power amplifier audio chip providers in China and third among power amplifier
audio chip providers globally. According to the same source, our power amplifier audio chips have been
deployed in nine of the top ten smartphone manufacturers in terms of their shipment volume globally.
According to the F&S report, in 2025, global shipments of smart wearable devices are expected to
exceed 1 billion units, with products equipped with power amplifier audio interaction technology
accounting for 45% of the total. For instance, smart speakers require a combination of acoustic design
and sound field calibration technology to maintain high-power audio output. Additionally, noise
reduction algorithms are increasingly used to suppress environmental noise, significantly improving the
user experience in voice interactions.
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Leveraging our market position in this sector, we have emphasized the in-depth development of
customized services to enhance customer stickiness. We believe through innovations and a
customer-centric approach to satisfy customized needs, we can provide better solutions for our
customers. By focusing on customized solutions in this sector, we believe we are able to set up a
relatively high barrier to entry within the industry and continue to grow our market share.
Intelligent V ehicles
In 2023, we entered into the intelligent vehicles industry by launching China’s first
automotive-grade AEC-Q100-certified power amplifier audio chip, according to the F&S report.
AEC-Q100 is a rigorous stress test qualification standard for automotive-grade chips, ensuring they
withstand extreme conditions while powering advanced audio systems with up to 4*75W output and
reliable performance from -40°C to 125°C, which is ideal for application in intelligent vehicles.
Launching the first domestic automotive audio chip to obtain AEC-Q100 certification, we will have a
first-mover advantage in this industry. In addition, we have also established a contracted partnership
with one of the world’s largest renewable energy vehicle manufacturers.
According to the F&S report, by 2024, the adoption rate of in-car audio interaction systems
surpassed 80%, making it the second-largest interaction interface after the vehicle’s central control
screen. As technologies advance and user engagement deepens, the demand for power amplifier audio
chips in different scenarios as well as the expectation for their output performance are expected to
continue to grow. According to the same source, the increasing demands for automotive safety have
also driven market expansion, such as the requirement to install Acoustic Vehicle Alerting System
(A V AS), which emit warning sounds during driving to ensure pedestrian safety, and the integration of
Telematics Boxes (T-BOX) with audio systems to enable vehicle monitoring and intelligent
communication functions.
We believe that, in the field of automotive-grade audio chips applications, future development
trends will include higher power output, increased channel counts, and the integration of new features
such as voice interaction and real-time detection. In this connection, we will work closely with our
customers to align with their needs and develop automotive-grade, cost effective solutions with
algorithm-based tuning. We also expect our haptic drivers to be increasingly deployed in this industry.
COMPETITIVE STRENGTHS
We believe that the following competitive strengths contribute to our success and differentiate us
from our competitors.
Recognized Power Amplifier Audio Chip Provider
We are a provider in power amplifier audio chips and haptic drivers in China. We specialize in the
design of low-power audio chips, mid/high-power audio chips and haptic drivers under a fabless model
to offer a wide array of solutions for emerging application scenarios. According to the F&S report, in
terms of total shipment volume in 2024 for use in smart displays, we ranked first among power
amplifier audio chip providers in China; in terms of total shipment volume in 2024, we ranked second
among power amplifier audio chip providers in China, and third among power amplifier audio chip
providers globally; and in terms of total shipment volume in 2024, we ranked fourth among haptic
driver providers in China. We have achieved continuous product innovation through strong
technological development, rapidly commercialized our solutions by deeply understanding market
needs, and expanded economies of scale through targeted application in various industries.
As an entry point for empowering various industries, including consumer electronics and
intelligent vehicles, we have, since our inception, pioneered innovations in multiple critical aspects of
the design of power amplifier audio chips, with breakthroughs in algorithm and system architecture,
low energy consumption, real-time processing, low distortion, and multi-scenario perception. Power
amplifier chips are high-performance, small-form-factor audio chip modules based on mixed-signal
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design and integrated with algorithms. Equipped with our technologies such as power control
algorithms, speaker protection algorithms, and audio effect algorithms, our power amplifier audio chips
enable efficient processing and optimized output of audio signals, offering low power consumption and
high integration to meet the customized requirements of our customers. By integrating power amplifier
audio chips with advanced self-developed audio algorithms, we are well-positioned to set new industry
benchmarks, transform acoustic experiences and capitalize on opportunities across diverse and emerging
application scenarios. According to the F&S report, the global power amplifier audio chip market
reached RMB8.9 billion in 2024 and is expected to expand to RMB20.4 billion by 2029, representing a
CAGR of 18.1%. According to the same source, the China power amplifier audio chip market reached
RMB4.1 billion in 2024 and is expected to expand to RMB10.0 billion by 2029, representing a CAGR
of 19.4%.
Specifically, we have launched multiple China-first chip products, aligning with the trend of
domestic substitution, including the following:
 In 2017, we launched China’s first ASIC DSP-integrated portable power amplifier audio
chip, marking a pioneering step in the domestic audio technology landscape, according to the
F&S report. This product integrates an ASIC DSP module enabling speaker protection,
dynamic gain adjustment, phase correction, and noise suppression, which offers an
innovative domestic substitution of audio solutions for smartphone manufacturers in China.
This product effectively filled a critical gap within the domestic market, and subsequently
achieved mass production and shipment for our customers, demonstrating our success in
commercialization. Our power amplifier audio chips have been adopted by nine out of the
top ten global smartphone manufacturers in terms of their shipment volume in 2024,
according to the F&S report.
 In 2021, we launched China’s first mid/high-power audio chip, according to the F&S report.
This product delivers a higher power on a more demanding level while maintaining low
distortion and flat frequency response, compared with low-power audio chips. In addition to
its audio performance, this product type stands out due to its stricter requirements in key
areas such as its power amplifier’s high reliability, thermal management and audio algorithm
optimization. Our mid/high-power audio chips have been adopted by eight out of the top ten
China TV manufacturers in terms of their shipment volume in 2024, according to the F&S
report.
 In 2023, we launched China’s first automotive-grade AEC-Q100-certified power amplifier
audio chip, according to the F&S report. AEC-Q100 is a rigorous stress test qualification
standard for automotive-grade chips, ensuring they meet reliability and performance
requirements under harsh automotive environments such as extreme temperatures, vibrations,
and electrical stress. Our automotive-grade power amplifier audio chips can deliver up to
4*75W output per channel and support multi-speaker configurations. With a wide operating
temperature range of -40°C to 125°C, they are ideally suited for diverse intelligent vehicle
audio system applications. Our products have been validated in collaborative tests with
multiple domestic automotive brands. For instance, one of our automotive-grade power
amplifier audio chip products has passed testing and validation by one of the world’s largest
renewable energy vehicle manufacturers, and correspondingly we have received and fulfilled
their purchase orders, and established a contracted partnership with them.
In addition, we are also committed to developing haptic drivers to cater to the rapidly increasing
market demand. According to the F&S report, the growth is fueled by increasing demand for consumer
electronics, along with the expanding adoption in automotive intelligent cabins and robotics, which
drive a significant rise in demand for enhanced user interaction. The haptic driver market is expected to
reach RMB11.4 billion in 2025 and further expand to RMB21.4 billion in 2029, representing a CAGR
of 17.0%, according to the F&S report. According to the same source, in terms of total shipment
volume in 2024, we ranked fourth among providers of haptic drivers in China.
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Constant Technology Breakthroughs and Product Innovations Driving Growth
Our profound expertise in technological development and product innovation position us as a
forerunner in the power amplifier audio chip market. Leveraging our robust technical reserve, we have
established an expanding product portfolio covering comprehensive application scenarios. Our technical
capabilities in algorithm development, ASIC DSP design, high-performance analog engineering, and
ultra-low-power circuit design have contributed to our delivery of several China-first chip products.
Our Algorithms
In our audio algorithm development, we have established three core algorithm series, namely
speaker protection, audio enhancement, and intelligent scene adaptation. These algorithms can be
flexibly deployed across diverse application environments and scenarios on end-user devices. They are
also compatible with major mobile platforms including Qualcomm, MediaTek, and Unisoc, supporting
operating systems such as Android, Linux, and Windows, according to the F&S report. As of the Latest
Practicable Date, over 200 million mobile devices have integrated our audio algorithms.
Relying on our extensive experience, we have created multiple innovative algorithms for specific
application scenarios. For instance, in micro-speaker systems where piano tones frequently cause
distortions and artifacts, we developed a specialized algorithm that actively detects piano sounds during
audio playback. Through real-time signal processing, it is able to eliminate distortion. Separately, for
high-altitude environments where atmospheric pressure induces speaker parameter drift, which could
lead to performance anomalies, we engineered an adaptive altitude compensation algorithm. This
solution continuously tracks parameter variations and dynamically adjusts operational states, assuring
speaker longevity under extreme conditions.
Compared to traditional audio chip companies, we maintain an experienced, highly innovative
algorithm team. By deeply integrating advanced algorithms with software, we significantly enhance our
chips’ intelligence and overall competitiveness. Traditional chip companies often prioritize hardware
design while lacking systematic investment in algorithms and software, making their products
vulnerable to pin-to-pin replacement by competitors due to functional and performance limitations. We
embed algorithms directly into our chips, creating differentiation barriers. This deep integration
effectively increases chip competitiveness and builds high entry barriers for our competitors.
Our Hardware
In our ASIC DSP technology, we pioneered hardware-implemented PA algorithms and became the
first among power amplifier audio chip providers in China, according to the F&S report. Compared to
traditional open-sourced DSP architectures, our ASIC approach delivers lower power consumption,
reduced latency, and smaller die size. Our proprietary ASIC DSP architecture is wholly built upon our
self-owned intellectual property rights, simultaneously reducing costs and strengthening our supply
chain stability. In our flagship ASIC DSP product FS1601, the die size is over 30% smaller, and digital
power consumption is nearly 50% less than comparable solutions, according to the F&S report. As of
the Latest Practicable Date, over 200 million units of our ASIC DSP-enabled power amplifier audio
chips had been shipped.
Our Product Offerings
Audio quality is a critical success metric in many devices, yet subjective preference profiles
exhibit significant individual divergence. This inherent audio perception variability necessitates
substantial investment by our customers in signature sound development, requiring simultaneous
optimization for mass-market acceptance and audiophile-grade scrutiny, in order for them to establish
differentiated acoustic identities, according to the F&S report.
Leveraging our team’s deep expertise in audio technology, we deliver comprehensive support
spanning initial audio chip selection, peripheral circuit design, algorithm integration, driver
implementation, acoustic cavity modeling, and sound tuning. This establishes a complete
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cradle-to-grave solution framework from project inception through mass production. Our specialized
tuning team handles more than 100 tuning projects annually, enabling precise interpretation of clients’
differentiated acoustic requirements. Our tailored sound customization services significantly enhance
client stickiness.
Moreover, our agile customization and innovation capabilities allow us to efficiently customize
product functionality and performance to meet the evolving needs of customers across sectors, as
demonstrated by our deep penetration in the smartphone sector and successful expansion into areas such
as smart wearables, smart displays and intelligent vehicles. Such organic expansion enables us to
efficiently broaden our customer outreach with existing resources, driving operational efficiency.
Our Customization Process
We deliver fully customized power amplifier audio chip products tailored to each customer’s
requirements. Our standard engagement process begins with our customers providing detailed
specifications, including application scenarios, output power, working voltage parameters, operating
temperature ranges, and protection mechanism specifications. Upon receiving these specifications, our
engineering team initiates the development of products designed to meet the customers’ exact technical
demands base on our technology portfolio and development experience on market-ready chips. We
collaborate closely with our fabrication partners to select the optimal manufacturing process matching
the product specifications, followed by prototype production for comprehensive testing and validation.
Following successful prototype verification, we transition to high-volume production to fulfill customer
orders. This development cycle typically requires two to five months to complete, comparing favorably
to the industry standard of three to nine months for similar customized power amplifier audio chip
solutions.
Our Continued Investments in Research and Developments
We have heavily invested in research and development to maintain our competitive advantage.
During the Track Record Period, our research and development costs were RMB48.7 million, RMB59.3
million, RMB68.1 million, RMB55.1 million and RMB55.7 million in 2022, 2023, 2024 and the ten
months ended October 31, 2024 and 2025, respectively, representing 57.7%, 60.2%, 62.7%, 61.9% and
53.0% of our annual total operating expenditure in the respective years. As of the Latest Practicable
Date, we had 35 registered patents in China, the U.S. and Europe, including 32 invention patents and
three utility model patents, and filed 22 patent applications which were pending approval. Our
persistent focus on technological breakthroughs and product innovations allow us to address complex
technical challenges effectively and provide practical solutions for our customers, further strengthening
our market competitiveness.
Integration with Global Customers’ Ecosystem and Collaborative Relationships
Leveraging our strength in delivering customized solutions, we have established collaborative
relationships with our global customers in the industries to enhance customer stickiness through
research and development initiatives. This integration approach embeds us within their ecosystem,
forming synergistic and strategic alliances that enhance our competitiveness and support long-term
sustainable growth.
We are actively involved across all critical stages of customer engagement:
 Early-stage technical alignment : Our differentiated customization capabilities enable us to
engage early in the product development cycle, delivering customer-specific audio tuning
and functionality that help customers craft unique acoustic signatures and create distinctive
acoustic identities in competitive markets;
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 Agile development cycles : According to the F&S report, our project development cycles,
ranging from just two to five months, are among the fastest in China’s power amplifier audio
chip market. This agility enables us to achieve precise control of the development timeline
and capture time-sensitive opportunities in fast-moving application sectors such as the
consumer electronics industry;
 High responsiveness : We maintain exceptional responsiveness to evolving customer needs
and technical changes, which has strengthened our relationships with leading brands amid
intense market competition; and
 Tailored solutions : We offer complimentary tailored solutions, including adaptive sound
enhancement and speaker protection algorithms, as well as customized audio tuning to
optimize acoustic performance across diverse applications.
Our solutions have been embedded in the supply chains of top-tier brands across downstream
sectors, such as smartphones, smart wearables, smart displays and automotive electronics. This not only
enables us to stay at the forefront of latest industry trends but also constantly refine our research and
development efforts to meet evolving market demands.
We have successfully replicated this approach across strategic customer segments, starting with
smartphones, expanding into smart wearables and smart displays, and more recently, intelligent
vehicles. Leveraging our integration-driven approach, we have successfully expanded across multiple
application domains and established strong partnerships with our key customers. In 2022, we became a
direct supplier of one of the largest consumer electronics multinational corporation headquartered in
South Korea, signifying our entry into the international market. This proven scalability positions us to
further penetrate both the local and overseas markets, particularly in the premium segment, and
diversify our revenue streams, underscoring the strength and adaptability of our business model.
Multifaceted Quality Management and Reliable Supply Chain System
We are committed to delivering high-quality, reliable products and have established a multifaceted
quality management framework. Our operations are governed by monitoring and quality control systems
that span from product design and development to procurement, packaging, delivery, and post-sales
services. Our products meet a wide range of industry standards and regulatory requirements, and we
regularly engage independent testing and certification bodies to validate compliance in key target
markets. As a fabless chip company specializing in high-reliability chip design, we implement an
end-to-end “Design-in Quality” system aligned with ISO 9001 requirements. This framework comprises
management protocols across the entire product lifecycle, from architectural design and wafer
fabrication to assembly and test.
In the design phase, we have implemented Design for Manufacturability/Testability (DFM/DFT)
methodologies and integrate qualification standards including AEC-Q100 (automotive-grade) and
JEDEC JESD22 (environmental reliability). These standards are adopted to ensure our long-term
operational stability of chips under extreme conditions.
In the testing phase, our automated Test Management System (TMS) tracks data in real-time and
integrates statistical process control to dynamically optimize yield. This system maintains
industry-leading PPM levels for critical performance parameters. We also conduct testing in
China-accredited laboratories which are compliant with international regulatory requirements, enabling
our ability for market access across North America, Europe, Asia, and other key regions.
In addition, we have established long-term partnerships with both top-tier global foundries and
domestic semiconductor manufacturers, including Semiconductor Manufacturing International
Corporation (਷ყ). Furthermore, we have secured proprietary testing capacity by investing in
high-end testing equipment and cloud-based test platforms. We believe this would enable real-time data
synchronization with foundries, accelerating our quality feedback cycles.
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Seasoned Management and Research and Development Team with Profound Industry Expertise
Our core management team brings over a decade of experience in the semiconductor industry, led
by our founder, Mr. XU, who previously served at the audio product line at a leading semiconductor
company. The core members of our research and development team had held key roles at top-tier
international semiconductor firms, with an average experience in IC design of over 20 years. Their
global perspective, extensive IC design insights, and proven innovation capabilities are instrumental in
driving our product breakthroughs and maintaining our competitive edge.
We have also assembled a stable and high-caliber research and development team as the
cornerstone of our sustainable growth. As of the Latest Practicable Date, our research and development
team consisted of 91 members, accounting for 61.1% of our workforce, with deep expertise across chip
design, chip validation and end-product development. This structure ensures both the productivity and
efficiency of our innovation pipeline and research and development efforts. Notably, our team brings
together individuals from diverse academic and professional backgrounds, spanning engineering,
computer science, materials science, and applied physics, as well as experience across leading
technology firms and research institutions. This diversity fosters a dynamic environment where
cross-disciplinary thinking and the integration of varied perspectives fuel breakthrough innovations. We
also collaborated with prestigious universities, including Xiamen University, to engage in research and
development activities and recruit talents along the way. We have established a strategic collaboration
agreement with Xiamen University School of Physics and Technology. We jointly conduct research and
development initiatives by aligning our business requirements with the University’s academic priorities,
facilitating reciprocal staff exchanges, and co-organizing academic conferences. Additionally, we
developed a comprehensive internship training program for the University’s students to gain practical
industry experience. Furthermore, our employees lead professional seminars and development training
sessions to share specialized knowledge with academic participants. The agreement is silent on the
matter of ownership concerning the relevant intellectual property.
We have implemented a systematic talent management framework for our research and
development team to retain and grow our talent pool. We are committed to building a learning-focused
culture and creating a talent pipeline to support our sustainability with comprehensive employee
development programs across all functions and levels. Our structured and multi-tiered training system
supports all career stages from new hire onboarding to ongoing professional growth for every team
member.
We believe our visionary and experienced management team, together with our talent development
efforts, have been instrumental in our accomplishment and will continue to solidify our market position.
OUR GROWTH STRATEGIES
We intend to pursue the following key strategies to grow our business sustainably and maintain
our market position.
Strengthen Research and Development in Power Amplifier Audio Chips
We plan to increase our research and development investments to drive continuous innovation in
power amplifier audio chip technologies.
Building on our expertise in audio technology, we intend to expand our chip product portfolio
with high-performance, compact, highly integrated, and cost-effective audio chip solutions. These will
feature advanced capabilities in sound optimization and signal processing. We are also closely
monitoring emerging industry opportunities and proactively making preparations in relevant
technologies. For example, with our accumulated haptic driver technology, we plan to develop haptic
driver solutions compatible with humanoid robots and VR/AR devices.
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To enhance our technological competitiveness and accelerate the commercialization of our
innovations, we plan to establish a dedicated research and development platform focused on power
amplifier audio chips. Our key initiatives include:
 Establishing a new research and development center in the Y angtze River Delta ,a
region known for its deep talent pool and robust supply chain ecosystem. This strategic
location is expected to support faster iteration cycles and foster localized innovation in chip
design.
 Constructing an automotive-grade laboratory equipped with advanced automated test
analytics and reliability validation systems, including but not limited to
automotive-compliant ATE engineering platforms, Scanning Electron Microscopes (SEM),
Transmission Electron Microscopes (TEM) and Highly Accelerated Stress Test (HAST)
equipment. This integrated infrastructure will ensure our power amplifier audio chips meet
the most stringent automotive reliability standards, including AEC-Q100 compliance, while
guaranteeing performance integrity under extreme operating conditions.
 Expanding our research and development team by recruiting experienced professionals,
including chip design engineers, chip testing engineers, algorithm engineers, and senior
technical experts. We believe this would directly strengthen our innovation capacity in areas
such as chip design, system architecture, and signal processing.
 Engaging in strategic partnerships with wafer foundries and chip packaging and testing
providers, and developing tailor-made process to optimize efficiency.
 Investing in critical design infrastructure , including EDA software tools and intellectual
property licenses to empower our engineers with the tools needed to efficiently design and
simulate next-generation chips. In addition, we will establish deep collaborations with
upstream wafer factories and OSAT partners to develop tailored customer-owned-technology
process solutions, jointly optimizing performance and cost.
 Upgrading our hardware infrastructure with enterprise-grade servers to better support
research and development of power amplifier audio chip features.
Diversify Product Portfolio and Broaden Customer Base in Key Application Scenarios
We intend to further expand our product portfolio in chips, emphasizing on high efficiency and
multi-functional integration to meet diversified market demands from entry-level to flagship
applications. We will strategically launch a differentiated product line integrating spatial audio
processing, studio-grade DAC implementations (>130dB signal-to-noise ratio), and next-generation AI
PC audio codecs with hardware-accelerated neural processing engines, and deepen our presence in
various application scenarios. Additionally, we are in the process of developing Specific Absorption
Rate (SAR) sensors that can detect human exposure levels to electromagnetic fields from smart devices
and autonomously adjusts output power to maintain compliance with safety thresholds. and serve as key
components for enhancing electromagnetic safety and user experience in smartphones, smart wearables,
and other devices.
Our early involvement in scenario-specific product development enables us to collaborate closely
with our industry customers. Specifically, we intend to broaden our product portfolio for the following
application scenarios:
 Consumer electronics : We plan to offer multi-chip solutions, such as through a combination
of algorithm, audio, haptic and SAR sensor chips, to enhance the value of our consumer
electronics solutions. We intend to further increase our market share in the applications for
smartphones, smart displays, and smart wearables, through the development of
next-generation power amplifier audio chip products.
¾ We are developing next-generation SoundWire audio codecs to serve the evolving AI
and personal computer markets.
¾ We continuously evolve the architecture of next-generation portable audio SoCs
through enhancements to our existing FS15, FS18, and FS19 series, delivering higher
integration and ultra-low power optimizations.
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¾ For the emerging VR/AR market, we are advancing our latest algorithm-integrated
power amplifier audio chips with key customers in China.
¾ In the professional audio market, we are in the process of developing higher-power,
high-performance audio products for premium and flagship products and applications.
 Intelligent Vehicles : We plan to commercialize more automotive-grade chips. We plan to
further the implementation of audio chips in in-car voice interaction and automotive safety
systems, develop multi-channel audio processing chips to improve intelligent cabin
experience. We are in the process of developing higher-power automotive-grade power
amplifier audio chips, leveraging our robust algorithm development and sound tuning
capabilities to strengthen collaborative alliances with our customers. We are also in the
process of accelerating automotive certification for haptic feedback solutions to expand our
market share.
 Robotics : Our core products, power amplifier audio chips, placed us at the forefront of
perception and processing capabilities, particularly in voice interaction. As smart robots
continue to evolve through multiple generations, language-based interaction is expected to
catalyze the demand of audio processing capabilities. We intend to leverage our accumulated
expertise in power amplifier audio chips to expand our offerings for smart robot interactions.
We believe that advancing robotics technology will significantly enhance entertainment
capabilities, creating substantial application opportunities for our products. We have no
current secured orders from the robotics. However, our mid/high-power audio chip series,
the FS21, has successfully completed technical feasibility verification. We are now
advancing engagements with potential customers, including well-known robotics companies
in China.
Build an ATE Testing Platform to Strengthen Supply Chain Stability
To further strengthen our operational resilience and reinforce our position in the industry value
chain, we plan to build an ATE testing platform. This initiative is aimed at optimizing our supply chain,
improving cost efficiency, enhancing product quality control, reducing reliance on third-party testing
providers, and ensuring timely delivery to customers across regions. Key components of this initiative
include:
 Establishing an in-house ATE verification line for semiconductor product testing. This will
allow us to identify and resolve quality issues earlier in the production cycle, improving
yield rates and reducing rework costs.
 Recruiting and training specialized ATE engineers and operators to build a strong
internal testing team. This talent investment will ensure we maintain rigorous testing
standards and can satisfy the automotive-grade certification of AEC-Q100.
 Procuring automated testing equipment to support the testing requirements of our chip
products and ensure that their performances are compliant with automotive standards in all
scenarios, particularly in light of our customized solutions tailored to meet diverse customer
needs. This includes high-precision instruments capable of handling complex signal
processing.
 Enhancing supply chain visibility and control by integrating the ATE platform into our
broader operation systems. This will improve coordination with upstream and downstream
partners and reduce lead times.
 Supporting long-term scalability by designing the platform to accommodate future product
lines and testing needs.
We believe this investment will significantly enhance the stability, flexibility, and responsiveness
of our supply chain, while also supporting our long-term growth and commitment to quality assurance.
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Fortify Our Sales Network to Expand Global Reach
We strive to strengthen our overseas technical support and sales teams to expedite the penetration
of our products in global markets, particularly in (1) the U.S., (2) Taiwan province, China and (3) South
Korea, and deepen engagement with global customers. Our key initiatives include:
 Establishing and expanding localized sales and technical service teams in strategic
markets such as (1) the U.S., (2) Taiwan province, China and (3) South Korea. They will
enhance our ability to deliver timely, on-site support, shorten customer validation cycles,
increase customers’ stickiness and strengthen relationships with industry players. As of the
Latest Practicable Date, we had already had over 50 million of overseas shipment of our
products. We believe this strategy will serve our end overseas customers and strengthen our
relationship with them.
 Investing in marketing initiatives tailored to the unique needs and preferences of specific
customer. This includes localized campaigns designed to increase brand visibility and drive
product adoption. We also plan to expand local distributor networks to reach more customers
through local resources.
 Introducing integrated solutions that combine customized algorithms with our proprietary
chips to meet the specific requirements of overseas customers. These offerings are designed
to enhance customer stickiness and differentiate our value proposition.
 Enhancing local talent capabilities by recruiting, training, and supporting regional service
teams. This investment will improve the overall customer experience and ensure consistent,
high-quality service delivery.
 Executing proactive branding and business development efforts , including targeted
marketing campaigns, participation in major industry conferences and exhibitions, and
sponsorship of relevant competitions. We will also pursue industry-specific business
development initiatives to capture emerging opportunities within key industry verticals.
Pursue Strategic Alliances, Investments and Acquisitions to Integrate Industry Resources
We intend to actively pursue strategic alliance, investment and acquisition opportunities in areas
where we already established distinct advantages. Specifically, we aim to identify high-quality targets
that offer strong synergy potential, particularly companies with complementary technologies or those
that can help extend our market reach, including those specializing in sensor or signal-chain
technologies such as haptic feedback algorithms. These investments are expected to enhance our
technology capabilities, improve product yield rates and quality, and accelerate innovation. In
evaluating our potential strategic partners or investment and acquisition targets, we would also take into
account a number of factors, including but not limited to alignment with our strategic plan, synergy
with our existing business, experience of the management team, valuation of the target, and their track
record. As of the Latest Practicable Date, we had not identified any potential investment or acquisition
targets.
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OUR PRODUCT OFFERINGS
We have been dedicated to the development and design of power amplifier audio chips since our
inception in 2016. Over the years, we have established a comprehensive portfolio of low-power audio
chips, mid/high-power audio chips and haptic drivers, complemented with proprietary algorithms and
customized application solutions enabling optimal chip performance. Our products have been widely
adopted in downstream sectors with robust demand, such as smartphones, smart wearables, smart
displays and automotive systems. As of December 31, 2024, we have launched over 120 products.
Leveraging our cumulative industry experience and profound customer insights, our offerings
integrate our chip products with our complimentary services, primarily including our accompanying
algorithms and tuning services. We believe the provision of the complimentary customized solutions is
a natural extension of our core business, which also enables us to enhance customer experience,
maintain our relationship with them and broaden our commercialization potentials. Complementary
components to our products include our algorithms and application services.
 Algorithms . We have developed complementary adaptive sound enhancement and speaker
protection algorithms that dynamically adjust to diverse customer applications, including
speaker protection, audio enhancement, and intelligent scene adaptation. These algorithms
self-optimize and seamlessly accommodate varying speaker specifications across projects.
See “—Our Core Technologies” for details.
 Application services . We deliver customized audio tuning services that optimize acoustic
performance through parameter optimization on demand to meet the unique requirements of
certain customers for unique sound experience. This empowers our customers to define
unique sonic signatures and establish distinctive audio identities for their devices.
Our Products
Our products primarily consist of power amplifier audio chips. Power amplifier chips are
integrated circuit modules based on mixed-signal design that incorporate some, or all of the following
characteristics, including built-in or externally paired audio algorithms, digital input interfaces and
integrated sound processing modules. Power amplifier chips leverage power control algorithms and
audio processing algorithms to efficiently process audio signals and optimize output performance. They
deliver low power consumption, high integration density and capabilities for intelligent control, catering
to customized requirements of downstream industries. Power amplifier chips have extensive
applications (1) in consumer electronics and smart home devices including smartphones, tablets, smart
wearables, smart displays, and smart speakers, and (2) in automotive systems such as automotive audio
systems and displays. Our products are capable of processing in-cabin acoustic data including voice
commands, infotainment system output, A V AS warning sounds, and T-BOX audio system
communications but do not receive voice command inputs.
Our products include (1) low-power audio chips, comprising two major types, namely, adaptive
power control audio chips and portable power amplifier audio chips; (2) mid/high-power audio chips;
(3) haptic drivers; and (4) others, including power management chips. In 2024, we delivered more than
400 million power amplifier audio chips in China, and more than 450 million power amplifier audio
chips globally, according to the F&S report.
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The following table sets forth a breakdown of our revenue by product line for the years indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount % of total Amount % of total Amount % of total Amount % of total Amount % of total
(RMB in thousands, except for percentages)
(unaudited)
Low-power audio chips ....... 126,370 97.0 140,645 93.5 322,908 90.9 260,760 90.3 255,455 91.0
— Adaptive power control audio chips
82,529 63.3 104,379 69.5 172,329 48.5 146,073 50.6 144,997 51.6
— Portable power amplifier audio
chips ............. 43,841 33.6 36,266 24.1 150,579 42.4 114,687 39.7 110,458 39.3
Mid/high-power audio chips ..... 3,957 3.0 8,662 5.8 26,707 7.5 23,612 8.1 20,596 7.3
Haptic drivers ............ — — 984 0.7 5,332 1.5 4,277 1.5 3,702 1.3
Others (1) .............. ———— 2 4 8 0 . 1 1 8 3 0 . 1 1 ,025 0.4
Total ................ 130,327 100.0 150,291 100.0 355,195 100.0 288,832 100.0 280,778 100.0
(1) Others primarily represent power management chips.
The following table sets forth our sales volume and ASP information by product line for the years
indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
(ASP in RMB; units in thousands for sales volume)
Low-power audio chips ....... 116,486 1.08 214,323 0.66 451,532 0.72 374,914 0.70 389,128 0.66
— Adaptive power control audio
chips ............ 90,628 0.91 186,715 0.56 330,181 0.52 281,538 0.52 296,549 0.49
— Portable power amplifier audio
chips ............ 25,858 1.70 27,608 1.31 121,351 1.24 93,376 1.23 92,580 1.19
Mid/high-power audio chips ..... 1,771 2.23 3,266 2.65 11,739 2.28 10,708 2.21 9,964 2.07
Haptic drivers ............ — — 1,006 0.98 5,845 0.91 4,678 0.91 4,173 0.89
Others (1) ............... ———— 1 , 0 2 6 0.24 726 0.26 1,866 0.55
(1) Others primarily represent power management chips.
See “Financial Information—Key Components of our Consolidated Statements of Profit or
Loss—Revenue” for a discussion of the sales volume and ASP of our products.
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For illustrative purposes, the following table sets forth the revenue attributable to different types
of products during the Track Record Period.
Y ear ended December 31,
Ten months ended
October 31,
2022 2023 2024 2025
Amount
(RMB in
thousands)
Percentage
(%)
Amount
(RMB in
thousands)
Percentage
(%)
Amount
(RMB in
thousands)
Percentage
(%)
Amount
(RMB in
thousands)
Percentage
(%)
(RMB in thousands, except for percentages)
Product type
Smartphone ............ 110,759 85.0% 113,143 75.3% 212,583 59.8% 162,738 58.0%
Tablet ............... 14,216 10.9% 14,759 9.8% 87,892 24.7% 82,926 29.5%
Speaker .............. 336 0.3% — — 12,427 3.5% 11,896 4.2%
Television ............. 2,897 2.2% 1,230 0.8% 9,992 2.8% 7,505 2.7%
Smartwatch ............ 1,485 1.1% 3,109 2.1% 5,690 1.6% 6,495 2.3%
Vehicle .............. —————— 8 9 9 0.3%
PC ................. 159 0.1% 585 0.4% 147 0.0% 80 0.0%
Camera .............. —————— 2 0 0 0.1%
Others ............... 475 0.4% 17,465 11.6% 26,464 7.6% 8,039 2.9%
Revenue .............. 130,327 100.0% 150,291 100.0% 355,195 100.0% 280,778 100.0%
(1): Others primarily includes projectors, dictionary pens, headphones and a small portion of revenue that cannot be accurately
classified.
(2): Above are our estimates of our end customers intended applications based on the chip model’s specifications. We have no
control over, or knowledge of, how end customers ultimately apply these chips.
Low-power audio chips
Low-power audio chips are widely deployed in various consumer devices, including smartphones,
tablets, and smart wearables, to maximize sound quality and volume within the constraints of compact
speaker designs. These chips employ algorithms to precisely predict or measure a speaker’s physical
limits, such as real-time power, current/voltage, and voice coil temperature. Their internal signal
processing units dynamically adjust output signals to operate the speaker at peak performance,
achieving maximum output while preventing damage and ensuring reliability. Furthermore, integrated
audio enhancement algorithms and scene-adaptive algorithms significantly elevate the overall audio
performance of the host device. Compared to traditional audio systems operating on unidirectional
open-loop principles without algorithms, power amplifier audio chips deliver substantially improved
audio performance.
Our algorithms extract audio source features and apply machine learning models to form dynamic
recognition of sound, enabling chips to automatically identify types of audio sources and eliminate
distortion. The process involves real-time audio signal extraction of crucial data including timing and
frequency of different audio types, distortion prediction, and dynamic adjustment of gain control or
adaptive filtering to preserve clean signals. For instance, noise suppression enabled by our algorithm
achieves the elimination of piano-induced distortion during audio playback. Piano signals exhibit highly
concentrated signal frequency, making them particularly susceptible to distortion. Leveraging machine
learning, our algorithm dynamically analyzes and learns the unique signal characteristics of piano tones.
This enables proactive signal processing to identify and mitigate distortion before it occurs, ensuring
pristine audio reproduction.
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In 2017, we launched China’s first ASIC DSP-integrated low-power audio chip product, offering
audio processing and protection features. According to the F&S report, this launch effectively filled a
critical gap within the domestic market. Our ASIC DSP-integrated products subsequently achieved mass
production and were well-received by our customers, as indicated by our cumulative shipments
exceeding 200 million units, as of the Latest Practicable Date.
Our low-power audio chips can be classified into two types based on their features, namely
adaptive power control audio chips and portable power amplifier audio chips.
 Adaptive power control audio chips employ acoustic chamber structure modeling to analyze
customer-specific designs. Their algorithms dynamically adjust input/output signals in
real-time to match the acoustic environment, ensuring speakers operate optimally and safely.
In addition, integrated audio enhancement algorithms and scene-adaptive algorithms
maximize overall system sound quality. Our adaptive power control audio chips primarily
serve smartphones, smart wearables, and tablets.
 Compared to the adaptive power control audio chip series, portable power amplifier audio
chips incorporate current and voltage sensing. By monitoring speaker current and voltage
data in real-time, portable power amplifier audio chips detect and controls the speaker with
greater precision, establishing a complete closed-loop system. portable power amplifier
audio chips typically deliver higher output power and enhanced analog performance,
generally achieving superior audio effects. Our portable power amplifier audio chips
primarily serve smartphones, smart wearables, and tablets.
Our adaptive power control audio chips focus on smart power control by dynamically adjusting
input and output signals in real time using our algorithms to match acoustic environment. Our portable
power amplifier audio chips focus on detecting speaker’s current and voltage in real time using our
algorithms to control power output. Our low-power audio chips deliver a blend of performance,
efficiency, and adaptability across a wide range of applications. As of the Latest Practicable Date, we
had three major low-power audio chip series, forming a robust portfolio that addresses diverse market
segments. The following table sets forth their product types, features and applications.
Product series Product types Features Applications
FS19 ..... Portable power
amplifier audio
chips
FS19 targets premium devices with intelligent
multi-level boost control, dynamic power rail
switching, and ultra-low noise, ensuring high
output with real-time speaker protection.
Smartphones, tablets, and wearables
FS18 ..... Adaptive power
control audio
chips and
portable power
amplifier audio
chips
FS18 balances performance and cost with
dual-input flexibility and integrated
protection algorithms, ideal for mainstream
devices.
Smartphones, tablets, wearables and
VR/AR devices
FS15 ..... Adaptive power
control audio
chips
FS15 offers compact, energy-efficient solutions
with unique features like 90° audio channel
flipping and non-destructive speaker
diagnostics, making it well-suited for
space-constrained, multi-speaker products.
Smartphones and wearables
After introducing the first ASIC DSP chip FS1601U in 2017, we continuously iterate and diversify
our portable power amplifier audio chips and extended our product offering with adaptive power control
audio chips. Below is a detailed timeline of the development of our representative portable power
amplifier audio chip products.
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Y ear of commercialization Product series Major Improvement/diversification
2017 ........... FS1601U We launched our first portable power amplifier audio chip product with a
voltage boost of 6.0V-9.6V and a chip size of 2.8mm × 2.8mm.
2018 ........... FS1601SU We increased the maximum voltage boost to 10.0V and achieved a chip
size of 2.78mm × 2.78mm.
2019 ........... FS1894 series We upgraded the FS16 series to a chip size of 2.77mm × 2.77mm using
180nm BCD process technology.
2020 ........... FS1818U We developed a miniature portable power amplifier audio chip with DSP
and a body size of 1.58mm × 1.98mm.
2022 ........... FS1945 series We introduced our first portable power amplifier audio chip product
utilizing 90nm BCD process technology.
2024 ........... FS1999F We upgraded the FS1894 series as our first portable power amplifier
audio chip product implementing 65nm BCD process technology.
Ongoing development . FS1987U We are refining achieved product series by continuously reducing its chip
size, targeting higher output power and lower noise floor and
introducing more advanced process technology.
We are committed to continuously developing our adaptive power control audio chip products.
Below is a detailed timeline of the development of our representative adaptive power control audio chip
products:
Y ear of commercialization Product series Major improvement/diversification
2019 ........... SPC1910 We launched our first adaptive power control audio chip product
2023 ........... FS1815CN We introduced our first adaptive power control audio chip product
utilizing 65nm BCD process technology.
2024 ........... FS1816N We reduced the noise floor of the FS1815CN from 10.0µV to 1.0µV .
2025 ........... FS1800N We developed an innovative dual-channel stereo output solution by
combining two FS1815CN chips to achieve higher performance and a
smaller body size.
Mid/high-power audio chips
Mid/high-power audio chips, including automotive-grade power amplifier audio chips, amplify
and drive audio signals with output power exceeding 10W. They convert audio signals into high-power
output to drive speakers by controlling audio processing algorithms, such as dynamic range
enhancement, power optimization, and thermal protection, thereby addressing core requirements
including high-fidelity playback, low distortion, and high-volume output. They can optimize energy
efficiency while maintaining signal integrity across more rigorous operating conditions compared with
portable power amplifier audio chips and adaptive power control audio chips, for applications in smart
displays, soundbars, speakers and automotive systems. Our product design prioritizes heat dissipation
and electromagnetic interference mitigation to ensure sustained performance in compact, power-dense
environments. We have significant competitive edge and market presence in certain applications, for
instance, we ranked first in the power amplifier audio chip market for use in smart displays in China by
delivering more than 10 million chips in 2024, capturing a market share of approximately 23.6%,
according to the F&S report.
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Our algorithms are implemented to process audio signals, and are optimized for higher power
applications. The chips dynamically recognize and classify audio sources, apply distortion suppression
through gain control and adaptive filtering, and use the syncing of sound waves for smooth transitions
in high-energy audio scenarios due to higher risk of distortion.
We launched China’s first mid-power amplifier audio chip, FS2119, in 2021. According to the
F&S report, this significant development marks a milestone in breaking the long-standing foreign
dominance in this segment and addressed a critical gap in the domestic market. The FS2119 series has
since achieved mass production and has been widely adopted in multiple branded televisions and audio
systems.
Automotive-grade power amplifier audio chip product series
Automotive-grade power amplifier audio chips are specialized high-power amplification integrated
circuits engineered for vehicular operating environments. Within intelligent vehicles, these chips are
extensively deployed in intelligent cabins, in-vehicle entertainment systems, A V AS and T-BOX.
Automotive-grade power amplifier audio chips require exceptional reliability, fault tolerance, and
operational stability, typically requiring AEC-Q100 product certification to satisfy rigorous and
demanding automotive environment.
We introduced China’s first automotive-grade power amplifier audio chip, the FS5024E, in 2023,
which successfully passed AEC-Q100 certification. This series features higher output power and
flexibly configurable 2/4-channel output, specifically engineered for demanding vehicular applications.
Our automotive-grade products automatically detects the electrical load and irregularities experienced
by the chip without external components and is compliant with automotive-grade testing standards.
Specifically, our automotive-grade product series, namely the FS50 series, integrates
spread-spectrum technology to minimize electromagnetic interference for reliable performance in
automotive electromagnetic environments and simplified EMC compliance, featuring a proprietary
low-power, low-noise architecture. Their adaptive thermal management system maintains critical audio
output during overheating through intelligent power regulation, ensuring both safety and uninterrupted
user experience. For instance, our FS5024E products deliver robust operational stability within the
critical automotive temperature range of -40°C to +125°C. Our FS5024E products also feature
intelligent thermal protection that dynamically reduces gain during overheating, ensuring continuous
audio output and a seamless user experience. Additionally, our FS5024E products introduce low-power
and low-noise architecture that delivers superior acoustic clarity in demanding automotive
environments.
As of the Latest Practicable Date, we had three major mid/high-power audio chip series,
establishing a comprehensive suite targeting multiple industries, such as consumer electronics and
intelligent vehicles. The following table sets forth their features and applications.
Product series Features Applications
FS21 ...... FS21 utilizes integrated audio processing
modules for dynamic range control, intelligent
bass enhancement, automatic power and
volume control, targeting broad consumer and
industrial use cases requiring flexible power
and EMI performance.
Tablets, televisions, smart displays,
personal computers, and
professional audio equipment
FS20 ...... FS20 targets professional audio systems
requiring clean, high-output performance with
flexible input options.
Audio equipment
FS50 ...... FS50 is designed for high-power, low-noise, and
thermally resilient automotive in-cabin audio
systems. It features a custom temperature
protection algorithm tailored for automotive
environments subject to AEC-Q100
certification requirements.
Automotive systems
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We expanded our product offerings to support application scenarios with higher output demand.
Our mid/high-power audio chip include our automotive-grade power amplifier audio chip products,
which are designed for high-output and high-performance scenarios. Below is a detailed timeline of the
development of our major mid/high-power audio chip products.
Y ear of commercialization Product series Major improvement/diversification
2021 ........... FS2105E We launched our first mid/high-power audio chip product.
2023 ........... FS5024E
(automotive-grade)
We launched our first automotive-grade power amplifier audio chip
product.
2024 ........... FS2104E, FS2103E We added stereo intelligent bass enhancement technology, and added
feature supporting external adaptive mode to reduce power
consumption.
2025 ........... FS2180N We decreased chip size from 9.4mm × 4.4mm to 4.0mm × 3.5mm.
Ongoing development . FS5010E
(automotive-grade)
We plan to diversify Class AB chip product.
FS5024LE
(automotive-grade)
We plan to launch higher performance/price ratio version of FS5024E.
Haptic drivers
Our haptic drivers are chips deployed in smartphones, smart wearables, tablets and portable
gaming consoles that operates in reaction to user inputs. When the user operates the device, the haptic
driver receives electrical signal inputs including the user’s pressing speed and force amplitude and
determines the necessary reaction to the user input and converts signal to drive the motor coils which
vibrates to return a tactile sensation using our algorithms, enhancing user-device interaction. We
integrated technologies including temperature detection, over current protection, short-circuit protection
and LRA drive (a drive that uses audio-like waveforms to generate vibration in sync with sound) and
diagnostics to protect the motor coil for the longevity of the device. They are integrated into devices
such as smartphones, smart wearables, tablets and gaming accessories, enhancing user interactions
through context-specific vibrational responses aligned with system inputs. Our haptic drivers can
enhance tactile feedback in gaming and other interactive application scenarios through intelligent haptic
algorithms and motor protection features. They deploy real-time monitoring, calibration, and
rapid-response technology to maintain optimal motor performance and deliver consistent, precise
vibration feedback. In addition, haptic drivers are also being integrated into automotive systems, with
progressive adoption across the industry, according to the F&S report. In 2024, we delivered more than
five million haptic drivers, and ranked fourth in the China haptic driver market in terms of total
shipment volume, according to the same source.
To maintain optimal motor performance, our haptic algorithms deploy real-time technologies
including (1) LRA consistency calibration, which ensures precise feedback generation while
synchronizing with signals; (2) adaptive power amplification that dynamically scales output based on
real-time haptic signal analysis to deliver contextually appropriate feedback; (3) auto-brake engines that
continuously calculate motor movement to regulate force output with millisecond precision; (4) F0
detection and tracking for continuous input signal analysis to enable frequency-responsive haptic
effects; (5) comprehensive overcurrent and overtemperature protection systems that monitor motor
voltage parameters and thermal conditions to prevent electrical faults; and (6) impedance sensing
technology that dynamically modulates motor resistance to simulate realistic tactile interactions. This
integrated suite of technologies ensures reliable, high-fidelity haptic performance across all operating
conditions.
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As of the Latest Practicable Date, our haptic driver product series, FS30, has been widely adopted
in smartphones, smart wearables, tablets and gaming accessories. Our haptic driver series feature,
among others, the followings:
 automatically detects motor resonance frequency and precisely matches motor
characteristics;
 intelligent start-stop technology with activation/deactivation response;
 ultra-low power architecture featuring 1mA static current consumption;
 adaptive low-voltage algorithm enabling operation in UVLO conditions via low-voltage
mode; and
 multi-mode haptic feedback supporting conditional storage, and real-time operation
scenarios.
We expanded our product offerings to haptic drivers to allow haptic feedback to enhance
user-device interaction. The following table sets forth a detailed timeline of the development of our
haptic driver products.
Y ear of commercialization Product series Major improvement/diversification
2023 ........... FS3001U We launched our first haptic driver product.
2025 ........... FS3002N, FS3003U We upgraded FS3001U, increased maximum voltage boost from 5.5V to
11.0V , added feature supporting lower working voltage.
Power management chips
We integrate multiple power management modules for our power amplifier audio chip products.
Leveraging our technical reserve to develop standalone power solutions, we have expanded our product
portfolio for key applications including smartphones, smart wearables, and tablets. We primarily offer
power management chips to our customers as complementary to our power amplifier audio chips for
application in smartphones.
OUR BUSINESS MODEL
We operate under the fabless model and focus on the design of chips. We outsource wafer
fabrication and chip packaging and testing activities for mass production to third-party business
partners. By concentrating our resources on product design and R&D processes, we can swiftly respond
to evolving market demands and continuously innovate our product offerings. According to the F&S
report, the fabless business model is consistent with the increasing trend of specialized division of labor
within the semiconductor industry, allowing fabless companies to focus attention and resources on
design and R&D.
The following diagram illustrates our fabless business model.
Chip Design
Company
Chip
Design
Wafer
Fabrication
Outsourcing to
Packaging Company Distributorship/Direct Sales
Packaging
and Testing Sales Model
Outsourcing to
Wafer Manufacturer
Fabless
Model
Commercialization
We primarily engaged in the design and development of semiconductor chips. Our Directors are of
the view that, and as advised by Frost & Sullivan, all of our products fall within an acceptable sector of
a Specialist Technology Industry as defined under Chapter 18C of the Listing Rules, namely paragraph
(b) of the “Advanced hardware and software—Semiconductors” sector as set forth under Chapter 2.5 of
the Guide, as we are engaged in the research and development, logic and physical design, validation
and verification of our power amplifier audio chips, haptic drivers and power management chips, which
are all semiconductor chips. We have adopted a transaction-based model for the sales of our products.
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We integrate advanced technology directly into each of our Specialist Technology Products to
deliver core functionalities and performance enhancements. This actively applies sophisticated audio
processing techniques to digital and analog signals, significantly improving processing efficiency and
output accuracy through the use of custom DSP chips (ASIC DSP), high-performance audio converters
(DACs and ADCs), and advanced pulse-width modulation (PWM). Furthermore, optimization
technology is deployed to actively enhance audio output quality, achieving improvements in clarity,
noise suppression, and resistance to electronic interference by utilizing wide frequency response
capabilities, dynamic range enhancement ultra-efficient DC-DC power design, and spread-spectrum
techniques. Advanced speaker protection algorithms continuously monitor critical speaker operating
parameters such as temperature, voltage, and current while simultaneously minimizing power
consumption; these algorithms incorporate amplifier protection controls, power management routines,
peak current control, ultra-low power circuitry, and predictive temperature modeling. Finally, integrated
fault detection technology automatically identifies failures within audio components, including chips
and speakers, thereby increasing both the speed and reliability diagnostic process.
Our customers include distributors and direct sales customers, including manufacturers for
smartphones, tablets, smart wearables, smart displays and intelligent vehicles. We primarily take into
account the product differentiation and the competitive landscape of a particular market such as the
pricing of our major competitors in that market in our pricing strategy. We have also adopted tiered
pricing strategies based on our product’s competitiveness, procurement amount and relationship with
specific customers, taking into consideration base factors such as the cost incurred.
The following table illustrates our commercialization timeline, demonstrating our ability to
develop and market new products on a continuous basis.
Y ear Commercialization
2017 We generated revenue from our low-power audio chips, establishing our market
presence
2021 We generated revenue from our mid/high power amplifier audio chips, expanding into
premium audio segments
2023 We generated revenue from our haptic drivers, enabling haptic feedback applications
2024 We generated revenue from our automotive-grade power amplifier audio chips, entering
into a new industry
We generated revenue from our power management chips, further strengthening our
ecosystem
The following table illustrates our milestone for technology advancement achieved and the
respective product(s), demonstrating our ability to advancing technological development on a
continuous basis.
Y ear of
commercialization Product series Representative Core technologies
2017 ....... FS1601U Industry first integration of ASIC DSP algorithms with PA hardware technology and
first-generation audio processing and protection algorithms, along with intelligent
speaker protection algorithms, enable real-time monitoring of speaker membrane
excursion and voice coil temperature.
2018 ....... FS1601SU First-generation dynamic range enhancement technology, enables the speaker to monitor
output signal amplitude in real time based on power supply voltage levels, dynamically
optimizing noise suppression while achieving a signal-to-noise ratio (SNR) of 105dB.
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Y ear of
commercialization Product series Representative Core technologies
2019 ....... FS1894U Second-generation audio processing and protection algorithms, combined with intelligent
speaker protection algorithms, enable multi-level (16-step) adaptive boosting,
delivering significantly more precise power output.
2021 ....... FS2105E First-generation audio processing and protection algorithms implemented in mid-power
amplifier audio chips, delivering enhanced performance and reliability.
2022 ....... FS1945F,
FS1815GN,
FS1816N,
FS2180N
Third-generation intelligent speaker protection algorithm, which includes (1) wider-range
multi-level (256-step) adaptive boosting; (2) an optimized DC-DC converter that
converts unregulated DC input voltage into stable output voltage required by
downstream components.
Second-generation dynamic range enhancement technology, features increased maximum
output power, further reduced noise floor, and improved SNR up to 114dB.
2023 ....... FS3001U The ASIC DSP technology, implemented in haptic drivers, with expanded ASIC DSP
algorithms tailored to vibration frequency, amplitude, and braking response scenarios.
2024 ....... FS1999F Fourth-generation intelligent amplifier protection control circuit and algorithm, including:
(1) Brownout Prevention Engine to prevent operational abnormalities or damage to
electronic devices caused by instantaneous voltage drops; (2) optimized voltage and
power sensors.
2025 ....... FS1985U Third-generation wide-frequency response technology, achieves a flatter frequency
response within +/– 0.1dB across the full audible spectrum (20Hz-20kHz).
Third-generation dynamic range enhancement technology, supports higher output power
through increased rated voltage.
Our product and technological evolution has enabled us to develop a broader and more advanced
portfolio of product models, allowing us to target larger markets. Since our inception, iterative product
enhancements have expanded our application reach from mobile phones to a full range of consumer
electronics, including smartphones, tablets, wearable devices such as smartwatches and smart glasses,
and further into NEVs and IoT applications including smart home displays and speakers. Moreover, the
diversification of our chip types allows us to increase sales revenue per end unit.
For our low-power audio chips, our initial products, the FS1601 and FS1601 SU series, were
adopted in a limited number of mobile phone models. In 2019, the introduction of the FS1894 series
enabled us to expand into the tablet market. The subsequent launch of the FS1818 U in 2020 further
extended our reach into the wearable devices market. Since 2019, our adaptive power control audio
chip has significantly broadened compatibility with a wider range of smartphone models. Additionally,
our FS1945 series, FS1999 F, and the upcoming FS1987 U continue to drive expansion into more
smartphone and tablet models.
For our mid/high-power audio chips, in 2021, we developed and launched the FS2015 E series,
successfully entering the smart display and speaker markets, complementing our presence in consumer
electronics. Our automotive-grade audio chip, one of the first in China to be AEC-Q100 certified,
addressed a gap in the automotive market.
For our haptic drivers, in 2023, we expanded beyond audio chips to introduce haptic feedback
solutions with the FS3001 U series, and are currently developing the FS3002 N and FS3003 U series.
This diversification allows us to increase revenue per end device. For instance, in addition to audio
chips, we have achieved synergistic sales of audio and haptic driver chips in end customers for use in
smartphones, tablets, and smartwatches.
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OUR CORE TECHNOLOGIES
The power amplifier audio chip industry is characterized by rapid technological evolution and
intense market competition. Leveraging our strong R&D capabilities, we continuously launch new
products while necessitating sustained R&D investments to drive innovation, advancing manufacturing
processes, and meeting market demands efficiently. The following paragraphs set forth the details of
our core technologies.
Audio Processing and Protection Algorithms
We have established three core algorithm series with respect to audio, namely speaker protection,
audio enhancement, and intelligent scene adaptation. These algorithms can be flexibly deployed across
diverse application environments and scenarios on end-user devices. They are also compatible with
major mobile platforms including Qualcomm, MediaTek, and Unisoc, supporting operating systems
such as Android, Linux, and Windows, according to the F&S report. In 2024, over 200 million mobile
devices integrated our audio algorithms, according to the same source.
By way of illustration, for instance, in micro-speaker systems where piano tones frequently cause
distortions and artifacts, we developed a specialized algorithm that actively identifies piano sounds
during audio playback. Through on-chip real-time signal processing, it is able to substantially reduce
distortion at the hardware level. Separately, for high-altitude environments where atmospheric pressure
induces speaker parameter drift, which could lead to performance anomalies, we engineered an adaptive
altitude compensation algorithm. This solution continuously tracks parameter variations and
dynamically adjusts operational states, assuring speaker longevity under extreme conditions.
ASIC DSP Technology
Our ASIC DSP architecture enables efficient hardware implementation of algorithms, significantly
boosting operational efficiency while reducing power consumption.
The I
2S input, control, and output interface are used for audio signal transmission. Other key
components include ADC (analog-to-digital conversion), DAC (digital-to-analog conversion), and
envelope tracking boost (adaptive inductive boost for amplified audio output power) are for signal
conversion and amplification. Protection mechanisms such as OVP (over-voltage protection), OCP
(over-current protection), UVP (under-voltage protection), and LDO (low-dropout regulator) are
deployed to safeguard speaker functionality. The processed audio signal then passes through a Noise
Gate to eliminate residual noise before final output.
In ASIC DSP technology, we pioneered hardware-implemented PA algorithms, which is the first
among power amplifier audio chip providers in China, according to the F&S report. Compared to
traditional open-sourced DSP architectures, our ASIC approach delivers lower power consumption,
reduced latency, and smaller die size. Our proprietary ASIC DSP architecture is wholly-built upon our
self-owned intellectual property rights, simultaneously reducing costs and strengthening supply chain
stability. In our flagship ASIC DSP product FS1601, the die size is over 30.0% smaller, and digital
power consumption is nearly 50% less than comparable solutions, according to the F&S report. As of
the Latest Practicable Date, over 200 million units of our ASIC DSP-enabled power amplifier audio
chips had been shipped, according to the same source.
Wide Frequency Response Technology
Our wide frequency response analog circuit architecture delivers an optimized frequency response
curve, achieving a flatter profile within +/- 0.1dB and premium linearity performance better than 0.02%
within the entire audible frequency band from 20Hz to 20kHz. This advancement significantly enhances
bass and treble performance, ensuring superior audio clarity and depth across a broad range of
applications, including ultra-sonic sensing in smartphones.
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Dynamic Range Enhancement Technology
Dynamic range enhancement technology enables audio amplifiers to monitor output signal
amplitude in real time based on supply voltage levels. By dynamically optimizing noise suppression, it
achieves an expanded dynamic range and signal-to-noise ratio better than 117dB. This technology
ensures superior audio fidelity and delivering enhanced performance across varying power conditions.
Amplifier Protection Control Circuits and Algorithms
Amplifier protection control circuits and algorithms integrate advanced real-time monitoring and
protection mechanisms into audio amplifier systems to ensure optimal performance, reliability, and
longevity. This technology employs intelligent circuits and adaptive algorithms to continuously track
critical parameters such as temperature, current, voltage, and load impedance. By dynamically adjusting
operational thresholds and mitigating risks like overheating, overcurrent, or short circuits, it safeguards
both the amplifier and connected audio components (e.g., speakers) from damage under extreme
conditions.
Power Consumption Reduction Algorithm
Designed to address the challenges of shrinking battery space in many compact devices such as
smartphones and smart wearables, our power consumption reduction algorithm optimizes power
consumption by dynamically adjusting energy usage without compromising audio quality, it extends
battery life while maintaining consistent acoustic performance.
Ultra-low-power Circuits
Ultra-low-power circuits minimizes energy consumption in audio amplifier systems while
maintaining robust performance, enabling extended battery life and sustainable operation in
power-constrained environments.
Peak Current Control Technology
We have introduced peak current control technology to mitigate sudden high-current spikes
triggered during the concurrent activation of multiple audio amplifiers which may result in unexpected
shutdowns or operational failures that impair user experience. This technology adaptively regulates the
minimum voltage drop under fluctuating battery states, ensuring consistent device functionality while
optimizing output efficiency. By dynamically adjusting power distribution, the technology sustains
stable operational performance, prevents interruptions, and strengthens system reliability across diverse
application scenarios.
Temperature Prediction Technology
Traditional digital audio amplifiers employ current and voltage (“ I/V”) detection interfaces to
monitor real-time speaker coil temperatures, mitigating overheating risks. However, these solutions
impose higher costs relative to analog amplifiers lacking I/V detection capabilities. To resolve this
trade-off, we pioneer a proprietary temperature prediction technology based on advanced feedforward
modeling. By integrating this innovation into analog amplifiers without I/V interfaces, the technology
ensures robust speaker protection by maintaining safe operating temperatures. This breakthrough
eliminates reliance on costly digital components while delivering equivalent reliability, offering a
cost-effective and scalable solution for audio systems.
Ultra-High-Efficiency DC-DC Design
A DC-DC converter (Direct Current to Direct Current converter) is a power management
integrated circuit that transforms unregulated direct current input voltage into a stabilized, higher or
lower output voltage required by downstream components. The DC-DC converter serves as a critical
power conversion subsystem within audio systems. It efficiently converts the lithium-ion battery voltage
from portable devices (e.g., smartphones, tablets) into the required voltage rails for the audio amplifier.
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This converter dynamically adjusts its boost level and operating modes in response to real-time audio
volume demands. Its conversion efficiency minimizes power losses while sustaining high peak output
power. This results in extended standby time for end-user devices.
Integrated Audio Component Fault Detection Technology
This technology integrates a master control module, driver module, multi-channel current
sampling/comparison modules, detection signal generation module, and intelligent algorithms into a
unified system, addressing the challenge of detecting operational anomalies in audio components. It
automates the entire process, from signal generation and collection to data comparison and result
output, achieving fully integrated fault detection. This innovation significantly enhances the speed and
reliability of audio component diagnostics.
High-Performance Audio DACs and ADCs
This technology encompasses cutting-edge DACs and ADCs engineered to deliver ultra-precise
signal conversion for high-fidelity audio reproduction and capture. The DACs transform digital audio
signals into analog outputs with advanced clarity, while the ADCs accurately digitize analog inputs,
preserving nuanced details across the entire audio spectrum.
This technology powers premium consumer audio devices, such as smartphones, wireless
headphones, and home theater systems, while also enhancing professional audio equipment like studio
interfaces and mixing consoles. Automotive infotainment systems leverage these components to deliver
studio-grade sound quality for critical applications, including music streaming, voice assistant
integration, and immersive surround-sound experiences.
RESEARCH AND DEVELOPMENT
Through years of R&D efforts, we have built expertise in the field of power amplifier audio chips
and haptic drivers. We continuously expand our product portfolio, updating existing products and
introducing cost-effective new solutions to enhance competitiveness. By intensifying R&D
commitments, accelerating market response times, and enhancing operational efficiency, we aim to
solidify and extend our competitive edge in the industry.
We have been committed to investing into our R&D talents and initiatives. During the Track
Record Period, our research and development costs were RMB48.7 million, RMB59.3 million,
RMB68.1 million, RMB55.1 million and RMB55.7 million in 2022, 2023, 2024 and the ten months
ended October 31, 2024 and 2025, respectively, representing 57.7%, 60.2%, 62.7%, 61.9% and 53.0%
of our total operating expenditure in the same periods, respectively.
We have not in-licensed any material intellectual property rights or outsourced any material
research and development processes to third parties. During the Track Record Period and up to the
Latest Practicable Date, we performed all material R&D of our products in house. During the Track
Record Period and up to the Latest Practicable Date, we had not been subject to any material legal
claims or proceedings that may have an influence on the research and development of our products.
Our Research and Development Team and Core Member
We had assembled a research and development team consisting of 91 members, accounting for
61.1% of our workforce, as of the Latest Practicable Date. We have 50, 64, 67 and 83 research and
development personnel, accounted for 50.5%, 54.7%, 57.3% and 61.0% of our total workforce as of
December 31, 2022, 2023, 2024 and October 31, 2025, respectively. Core members of our R&D team
bring extensive experience from globally leading semiconductor companies, including Texas
Instruments and NXP Semiconductors, averaging over 20 years of IC design expertise. They possess an
international industry perspective, profound chip design capabilities, and deep technical R&D
backgrounds, having pioneered multiple China-first chip products that break technological monopolies,
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according to the F&S report. Our dedicated and experienced R&D team is led by Mr. QIAN Shun, who
possesses nearly two decades of profound industry experience. The following table sets forth the details
of our core research and development members.
Profile of Our Core Research and Development Members
QIAN Shun
Mr. QIAN Shun is our executive Director, vice president and Chief Technology Officer. He holds
a bachelor’s degree in Electronics Engineering from Southeast University and a master’s degree of
Engineering (Circuit and System) from Shanghai Jiao Tong University. He joined our Company in 2018
and worked as a key contributor on the architecting and designing of various innovative and successful
audio products. Since 2022, he has served as our Chief Technology Officer and managed the R&D
initiatives. He is responsible for technology strategy planning, collaboration, communication, R&D
team management, talent building and key product development. He has also contributed to the design
and application of multiple core patents held by us, including DC-DC converters for power amplifier
audio chips and haptics drivers. Prior to joining us in 2018, he worked at several leading semiconductor
companies including Texas Instruments Semiconductor Technologies (Shanghai) Co., Ltd., a subsidiary
under Texas Instruments Incorporated, whose shares are listed on the NASDAQ Stock Market (stock
symbol: TXN).
LIU Baoliang
Mr. LIU Baoliang is our co-founder, executive Director, vice president and director of algorithm
applications. He co-founded our Company in 2016 and is the director of algorithm applications and
leads the development of our chip software drivers and algorithms. He holds a bachelor’s degree in
electronics and information technology from China University in Mining and Technology. He
participated in the design of several invention patents, including method for mobile phone speaker for
testing and tracking, speaker fault detection circuit and method, speaker short-circuit/open-circuit
detection method and speaker fault detection system, speaker resonance frequency detection method and
device, speaker fault detection system. Prior to joining our Company, Mr. LIU Baoliang worked at NXP
Semiconductors (Shanghai) Co., Ltd., a subsidiary under NXP Semiconductors N.V ., whose shares are
listed on the NASDAQ Stock Market (stock symbol: NXPI), and Integrated Device Technology
(Shanghai) Co., Ltd. (currently known as Renesas Integrated Circuit (Shanghai) Co., Ltd.).
ZHU Huaping
Mr. ZHU Huaping is an assistant vice president of our R&D department. He holds a bachelor’s
degree in industrial automation from Harbin Engineering University and a master’s degree in
engineering (microelectronics and solid-state electronics) from Shanghai Jiao Tong University. Prior to
joining our Company in 2018, he has worked at several leading semiconductor companies, including
STMicroelectronics, whose shares are listed on, among others, the New York Stock Exchange (stock
symbol: STM), and Integrated Device Technology (Shanghai) Co., Ltd. (currently known as Renesas
Integrated Circuit (Shanghai) Co., Ltd.). With over two decades of industry experience in chip design,
he has been a key contributor to the development of low-power audio chips and mid/high-power audio
chips and has contributed to the development of our FS19, FS21 and FS50 series. He has also
contributed to the design and application of multiple core patents held by us, including speaker fault
detection circuit and method, speaker short-circuit/open-circuit detection method and speaker fault
detection system, and speaker resonance frequency detection method and device, speaker fault detection
system.
HE Xiuan
Mr. HE Xiuan is an assistant vice president of our R&D department and is responsible for digital
IC development. He holds a master’s degree in engineering (circuits and systems) from Shanghai Jiao
Tong University. He has joined us since 2016. With over 20 years of experience in chip design, he has
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worked at several leading semiconductor companies prior to joining us, including NXP Semiconductors
(Shanghai) Co., Ltd., a subsidiary under NXP Semiconductors N.V ., whose shares are listed on the
NASDAQ Stock Market (stock symbol: NXPI). He established our digital audio IC design team and
participated in the design and application of several core patents held by us, including intelligent audio
effect amplifier chip and intelligent audio effect switching method, digital amplifier chip with DC
protection function and its DC protection method, and variable-frequency automatic gain control device
suitable for intelligent amplifier chips.
YANG Xiaoming
Mr. YANG Xiaoming is an assistant vice president of our R&D department. He holds a bachelor’s
degree in computer science and technology from Shandong University of Technology. With nearly 20
years of experience in the semiconductor industry, he has worked at several leading semiconductor
companies prior to joining us, including Qualcomm Incorporated, whose shares are listed on the
NASDAQ Stock Market (stock symbol: QCOM). He founded our software driver team and is
responsible for software driver development and algorithm design. He also participated in the drafting
and application of several core patents held by us, including intelligent audio effect amplifier chip and
intelligent audio effect switching method, multi-channel seamless switching method and speaker fault
detection circuit and method.
SHI Hongxiao
SHI Hongxiao is a senior design director in our R&D department. As a core technical personnel,
he has led the design and development of several industry-leading power amplifier audio chips,
automotive-grade power amplifier audio chips and haptic drivers. He holds a bachelor’s degree in
electronic engineering and a master’s degree in information and communication engineering, both from
Shanghai Jiao Tong University. He has participated in the drafting and filing of several invention
patents, including linear resonant actuator resonance frequency detection method and system and LRA
drive pulse waveform design method based on Kaiser window. SHI Hongxiao has over ten years of
experience in the chip design industry and previously worked at a leading semiconductor company prior
to joining us, including Texas Instruments Semiconductor Technologies (Shanghai) Co., Ltd., a
subsidiary under Texas Instruments Incorporated, whose shares are listed on the NASDAQ Stock
Market (stock symbol: TXN).
LIU Yanhai
Mr. LIU Yanhai is the director of analog design in our R&D department. He holds a bachelor’s
degree in semiconductor physics and devices and a master’s degree in microelectronics and solid-state
electronics from Southeast University. He has over 20 years of experience in chip design and has
worked at several leading semiconductor companies, including Integrated Device Technology
(Shanghai) Co., Ltd. (currently known as Renesas Integrated Circuit (Shanghai) Co., Ltd.). He has
played a pivotal role in the development of power amplifier audio chips and haptic drivers and has
contributed to the development of our FS19 and FS30 series. He also participated in the design and
application of a number of our core patents, including adaptive control device and method for boost
circuits, adaptive boost circuit device suitable for digital audio chips, and linear resonant actuator
resonance frequency detection method and system.
We retain key management and technical staff with competitive remuneration packages, welfare
benefits and share-based incentivizing arrangements. We also invest in training programs to upskill our
key management and technical staff. We also recruit candidates with relevant knowledge and skills by
online recruitment, internal referrals and employment agencies, among others, to avoid the negative
impact that could be caused by the departure of any key staff. In addition, we maintain effective
measures and arrangements to address the departure of key management or technical personnel,
ensuring operational continuity and safeguarding intellectual property. We require all key staff to
provide at least 30 days’ prior written notice of resignation, including reasons for departure. Upon
receiving notice, we proactively initiate good-faith negotiations to address the departing employee’s
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concerns, which may include competitive counter-offers encompassing compensation adjustments, role
modifications, or other feasible arrangements. Designated colleagues may also engage with the
resigning staff member to reinforce the organization’s value proposition and explore potential retention
solutions. We retain exclusive ownership of all intellectual property developed by employees, as
explicitly stipulated within their executed employment agreements. Furthermore, key personnel must
maintain strict confidentiality regarding proprietary information indefinitely following their departure,
in accordance with binding confidentiality undertakings. Additionally, standardized non-compete clauses
are imposed to restrict key staff from joining competitors or engaging in conflicting activities for a
prescribed period post-employment. Collectively, these measures are aimed to reduce the likelihood of
departure among our key personnel and the potential adverse impact on our operations.
The salient terms of the agreements with our management and technical staff are set out below.
 No conflict. During the employment, the employee shall not engage in any other job,
whether full-time or part-time, without our written consent.
 Non-competition. We have the right to unilaterally initiate a non-competition period of up to
two years following the termination of employment. During the term of employment and the
non-competition period initiated by us, the employee shall not engage in any competitive
behavior.
 Non-solicitation. During the employment and for two years thereafter, the employee shall
not, directly or indirectly, solicit or attempt to solicit our current and former employees to
leave their employment or solicit or otherwise influence our relationships with our customers
or suppliers.
 Inventions arrangement. We own all rights, titles and interests (including patent rights,
copyrights, trade secret rights and all other intellectual property rights of any sort throughout
the world) relating to any and all inventions (whether or not patentable), designs, know-how,
ideas and information made, conceived or reduced to practice, in whole or in part, by the
employee during the term of the employment contract to the fullest extent allowed by
applicable laws, and the employee shall promptly disclose all inventions to us.
 Proprietary information arrangement. All inventions and all other business, technical and
financial information (including, without limitation, the identity of and information relating
to customers or employees) the employee develops, learns or obtains during the term of the
employment contract that relate to us or our business or demonstrably anticipated business,
or that are developed in whole or in part during the employment or using our equipment,
supplies, facilities or confidential information, or that are received by or for us in
confidence, constitute proprietary information. The employee shall hold in confidence and
not disclose or, except within the scope of the employment, use any proprietary information.
The employee shall maintain confidentiality obligations indefinitely after the expiration or
termination of employment until we declares such information declassified or that such
information becomes publicly available. The expiration or termination of the employment
agreement shall not release employees from the continued confidentiality obligations.
Our Research and Development Process
Our research and development process involves a framework in which factors such as customers
demand, feasibility analysis, technology developments and application scenarios are taken into
consideration. We have established a comprehensive process to ensure strict control and oversight of
our R&D activities. Our R&D process primarily encompasses the key steps of (1) project initiation, (2)
design, (3) verification and (4) pre-mass production, after which we proceed with mass production
conducted through trusted third parties.
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 At the project initiation stage, we conduct a comprehensive evaluation of new project
feasibility from market, technical, operational and financial perspectives. We consider wafer
fabrication processes, packaging requirements, and cost parameters, refine product
specifications and perform IP searches and analysis to assess potential risks.
 At the design stage, our R&D personnel proceed with chip design which involves technical
process node selection, cost-benefit analysis, competitive benchmarking, system architecture
design, algorithm development and optimization, analog and digital circuit design and
simulation, and physical implementation and verification. At this stage, we focus on
optimizing product performance and quality and achieving innovation and improving our
product to meet technical and market demands.
 At the verification stage, our supply chain personnel coordinate with the wafer foundry and
packaging service providers to produce chip samples. Once the samples are produced, they
will go through functional and performance validation to ensure alignment with design
expectations. Our personnel will evaluate product’s manufacturability and compliance with
production requirements.
 Before entering the mass production stage, we provide ongoing technical support and
optimization, as well as managing quality control. We also develop specific application
solutions aligned with the product characteristics. The product transitions to full-scale mass
production only after it is confirmed that the product meets customer needs and the
application solutions receive formal customer approval.
Our Pipeline Research and Development Projects
The following sets forth our general plan to continue to advance our technology development:
 Next-generation low-power audio chips: continuing our technological iterations based on
the existing FS15, FS18, and FS19 series to expand our low-power audio chip product
portfolio. We are advancing technological iterations of our existing FS15, FS18, and FS19
series by developing higher-voltage PA models, specifically the 12V-rated FS1985 series and
15V-rated FS1986 series. These iterations enable increased output power beyond our current
6.5V−10V portfolio, allowing us to address broader portable audio applications and expand
into new end-product categories requiring enhanced performance.
 Haptic drivers: expanding the product lineup beyond the current FS3001 series to provide
more solution options for our customers that will be deployed in intelligent cabins. We are
expanding our FS3001 series through high-voltage adaptive boost models (FS3002 and
FS3003 series). This technological evolution extends our haptic solutions beyond
smartphones, smartwatches, and gaming devices into automotive smart cabins, positioning us
to capture opportunities in next-generation vehicle human-machine interfaces.
 Automotive-grade power amplifier audio chips: building on the FS5024 (Class D) series
to develop additional variants, including Class AB audio chips and higher-rated voltage
models to meet the rising voltage requirements of renewable energy vehicle infotainment
systems. Building on our FS5024 series, we are developing two variants: the FS5024LE
model for broader vehicle compatibility and the new Class AB audio chip FS5010 series.
These iterations directly address rising voltage requirements in renewable energy vehicle
infotainment systems and diversify our product coverage across automotive segments.
 New products: developing SAR sensor chips, which are used to measure the distance with
human bodies and the electromagnetic energy absorption ratio in smart portable devices such
as smartphones to ensure electromagnetic safety. We believe SAR sensors are transitioning
from optional to standard components in smartphones and other smart devices, creating a
vast market opportunity. We are developing SAR sensor chips to measure human proximity
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and electromagnetic absorption ratios in smart portable devices. This initiative targets the
transition of SAR sensors from optional to increasingly mandatory components in consumer
electronics, establishing our entry into the expanding electromagnetic safety market.
INTELLECTUAL PROPERTY RIGHTS
We believe that our intellectual property rights are critical to our continued success. We have
taken the following key measures to protect our intellectual property rights, including (1) establishing a
set of internal policies to implement effective management over our intellectual property rights, (2)
timely registration, filing and application for the ownership of our intellectual properties, (3) providing
trainings to enhance employees’ intellectual property right awareness and to ensure our intellectual
property protection measures’ long-term effectiveness, (4) stipulating and emphasizing the ownership
and protection of intellectual properties in the employment agreements and employee handbook.
As of the Latest Practicable Date, we had 32, two and one registered patents in China, the U.S.
and Europe, respectively, including 32 invention patents and three utility model patents, and filed 21
patent applications in China and one patent applications in the U.S. which were pending approval. All
of our patents are self-owned and not licensed by third-parties.
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Examples of patents held by us in connection with our core technologies which we consider to be material to our business include the
following:
Patent name Place of registration Patent number Core technology Major function
Method for Calibrating Speaker Impedance
Mismatch (ٙ
ج)....................
China ZL201610626083.4 Temperature Prediction
Technology
Provides a method for calibrating speaker impedance variations,
enabling accurate measurement of each speaker’s coil DC
resistance during production. This calibration facilitates
dynamic monitoring of coil temperature.
Integrated Device and Method for
Micro-Speaker Control and Temperature
Measurement (౮ᑊኜછՓ಻๝዆Υༀ
ج)..................
China ZL201711080667.7 Amplifier Protection Control
Circuits and Algorithms
Provides an integrated control and temperature measurement
solution for micro-speakers, precisely measuring coil
temperature without compromising audio quality.
Intelligent Audio Effect Amplifier Chip and
Intelligent Audio Effect Switching Method
(ࣖࠪ
ج)..................
China ZL2017 11117196.2 High-Performance Audio DACs
and ADCs
Enables millisecond-level lossless switching of scene-specific
audio effects by pre-storing multiple effect parameter sets in
amplifier chip registers, reducing audible artifacts and driver
damage risks.
Digital Amplifier Chip with DC Protection
Function and Its DC Protection Method ( Ո
ڭݴٜ
ج)...................
China ZL201811032992.0 Peak Current Control
Technology
Addresses limitations in existing digital amplifier chips’ data
stream processing by optimizing architecture to implement
DC protection, safeguarding diaphragms and preventing
thermal damage from DC-induced temperature rise.
Adaptive Boost Circuit Device Suitable for
Digital Audio Chips (᎖
ІቇᏐ Boost ཥ༩ༀໄ) ........
China ZL201811072193.6 Wide Frequency Response
Technology
Provides an adaptive Boost circuit solution for digital audio
chips, enhancing power efficiency while preserving audio
quality. Controls voltage transition processes to reduce Boost
output ripple and improve EMI performance.
Variable-Frequency Automatic Gain Control
Device Suitable for Intelligent Amplifier
Chips (ᜊ᎖І
ਗᄣूછՓༀໄ ) ..............
China ZL201811257389.2 High-efficiency PWM
Modulation
Provides a variable-frequency automatic gain control (AGC)
device for smart amplifier chips. It determines whether fast
response is required to select the main clock source, reducing
power consumption while meeting speaker safety and audio
quality requirements, thereby protecting speaker power
handling.
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Patent name Place of registration Patent number Core technology Major function
Method for Mobile Phone Speaker f0 Testing
and Tracking ( ɓ၇˓ዚఆ̪ f0಻༊ձ༧㮴
ج)....................
China ZL202010186763.5 Amplifier Protection Control
Circuits and Algorithms
Applied in speaker technology, this multi-mode intelligent
switching (monitoring/rapid search/precision search) BPF
algorithm dynamically optimizes the speed, accuracy, and
power consumption balance of speaker f0 testing under
streamlined hardware conditions.
Doubler Charge Pump (ݿ) ...China ZL202010207163.2 Ultra-low-power Circuits Provides an area-efficient doubler charge pump achieving
20%-60% area reduction compared to conventional designs.
Multi-Channel Seamless Switching Method
(ج) ...........
China ZL202110626730.2 High-Performance Audio DACs
and ADCs
Provides a multi-channel seamless switching method. By
implementing crossfade algorithms in the chip’s input data
interface module, it achieves uninterrupted left/right channel
switching without output signal interruption.
Adaptive Control Device and Method for
Boost Circuits (ІቇᏐછՓ
ج) ..............
China ZL202110727733.5 Amplifier Protection Control
Circuits and Algorithms
Provides an adaptive control device and method for boost
circuits, enabling dynamic tracking of boost voltage to audio
signals. This improves power efficiency while reducing output
voltage ripple and mitigating electromagnetic interference
(EMI).
Speaker Fault Detection Circuit and Method,
Electronic Device (ღᏨ಻ཥ༩ʿ
eཥɿண௪ ) ..............
China ZL202410176567.8 Integrated Audio Component
Fault Detection Technology
Discloses a speaker fault detection circuit, method, and
electronic device for accurate and rapid malfunction
diagnosis, resolving reliability issues in speaker failure
detection results.
Speaker Short-Circuit/Open-Circuit Detection
Method and Speaker Fault Detection System
(ღᏨ
಻ӻ୕) ...................
China ZL202410176565.9 Integrated Audio Component
Fault Detection Technology
Reveals a speaker short-circuit/open-circuit detection method
and fault detection system, delivering a streamlined approach
to detect speaker shorts/opens and enhance end-product safety.
Speaker Resonance Frequency Detection
Method and Device, Speaker Fault
Detection System (᎖ଟᏨ಻˙
ღᏨ಻ӻ୕ ) ......
China ZL202410176566.3 Integrated Audio Component
Fault Detection Technology
Provides a speaker resonance frequency detection method,
device, and fault detection system to reduce implementation
costs for resonance frequency detection in speaker diagnostic
systems.
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As advised by our PRC Legal Advisor, pursuant to the Patent Law of the PRC ( ʕശɛ͏΍ձ਷ਖ਼
جan invention patent registered in China is valid for a term of 20 years from the date of filing of
the application for the patent, a utility model patent registered in China is valid for a term of ten years
from the date of filing of the application for the patent, and since June 1, 2021, a design patent
registered in China is valid for a term of 15 years from the date of filing of the application for the
patent if the date of filing is on or after June 1, 2021. Despite our precautions, however, third parties
may obtain and use our intellectual property without our consent. Unauthorized use of our intellectual
property by third parties and the expenses incurred in protecting our intellectual property rights from
such unauthorized use may adversely affect our business and results of operations. See “Risk
Factors—Risks Relating to the Research and Development and Intellectual Property Rights of Our
Products.”
SALES AND MARKETING
Our Sales Network
During the Track Record Period, we sold our products in mainland China and Hong Kong. One of
our customers in Hong Kong is a subsidiary of one of the largest consumer electronics multinational
corporations headquartered in South Korea. We sold our products primarily through distributors, and, to
a much lesser extent, through direct sales. The following table sets forth a breakdown of our revenue by
distribution channels for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount % of total Amount % of total Amount % of total Amount % of total Amount % of total
(RMB in thousands, except for percentages)
(unaudited)
Distributorship ........... 125,249 96.1 129,558 86.2 324,632 91.4 266,526 92.3% 239,251 85.2%
Direct sales ............. 5,078 3.9 20,733 13.8 30,563 8.6 22,306 7.7% 41,527 14.8%
Total ................ 130,327 100.0 150,291 100.0 355,195 100.0 288,832 100.0% 280,778 100.0%
We develop new customers by focusing on specific application scenarios. Our customer
acquisition process typically involves four key stages: initial engagement, technical sample validation,
small-batch trial supply, and volume production. For most customers, particularly those requiring highly
customized products, we generally adopt a distributorship model where we directly engage with the end
customers for technical discussions, sample supply and validation, and negotiation of commercial terms
such as volume and pricing. Upon confirming customer requirements, we, in consultation with the end
customer, supply our products through a distributor. In other cases, we may supply our products to
distributors where the end customer typically requests standard, mature product models that require
minimal customization and thus do not entail significant customization costs.
The following sets out the rationale for each sales model. A distributor may be engaged for the
following reasons:
 Delivery efficiency. Distributors bridge the operational gap between our long production
cycle and our end customers’ dynamic, multi-regional production needs. Distributors
purchase in more predictable quantities and maintain localized inventory, enabling flexible
and timely deliveries.
 Credit risk management. Distributors assume the credit risk for sales to end customers,
allowing us to avoid credit risk exposure and reducing the administrative burden of credit
control and collection. Our payment terms with distributors, typically requiring prepayment
or offering only short credit periods, also ensure stable and predictable cash flow.
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 Operational efficiency. Distributors manage high-volume order processing (invoicing,
reconciliation, packing, shipping) and routine after-sales inquiries, tasks that would
otherwise require a substantial customer service team. This allows us to focus our resources
on research and development.
The primary functions of our distributors vary depending on the profile of the end customer. For
major brand customers, distributors primarily handle logistics and payment settlement on our behalf,
which enhances delivery efficiency, reduces our sales-related operational expenses, and shortens our
collection cycle. For small and medium-sized brand customers, distributors additionally assist in market
promotion by introducing our products and facilitating order acquisition, thereby expanding market
coverage.
For direct sales, we fulfill orders directly to the customer following the same initial engagement,
technical validation and trial supply process. We engage directly with certain end customers for the
following reasons:
 Strategic relationship building. Direct engagement allows us to build deeper relationships
with major industry players, which supports long-term collaboration and helps us stay
abreast of evolving market trends.
 Technical collaboration. Direct interaction with end customers’ technical teams enables us
to better understand their specific requirements, adapt our algorithms and optimize product
performance.
 Cross-selling opportunities. Our established direct relationships in the smartphone industry,
for example, enabled us to successfully cross-sell our haptic driver chips to key accounts
following their 2023 launch.
 Expansion into new applications. When entering new sectors such as the automotive
industry, we directly target potential customers and adapt our solutions to their specific
requirements throughout the technical validation phase.
Our product requires our sales force to possess domain-specific competencies. We prioritize this
requirement during recruitment, for example, by requiring our sales personnel to have relevant
academic backgrounds, such as in electronics. We provide regular training sessions to maintain our
sales team’s technical proficiency and require them to participate in technical discussions alongside
engineers to deepen their understanding of our products. To encourage and incentivize our sales force,
we have implemented a compensation structure combines a fixed salary with performance-based
assessments and special incentives.
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Sales through distributors ( ˾ଣਠ)
We have adopted a distributorship model for the majority of our sales. The following table sets
forth the key metrics of our distributors for the periods indicated.
Y ear ended December 31,
Ten months ended
October 31,
2022 2023 2024 2024 2025
Number of distributors at the
beginning of the year/period ... 51 1 9 91 3
Number of new distributors ...... 72442
Number of exiting distributors ... 14004
Number of distributors at the end
of the year/period ........... 1 1 91 31 31 1
Number of transactions with
distributors ................ 580 828 1,607 752 1,389
Average distributor value (1) (RMB
in thousands) .............. 10,437 14,395 24,972 20,502 21,750
Average transaction value of
distributors (2) (RMB in
thousands) ................ 216 156 202 354 172
Distributor retention rate (3) ...... 80.0% 63.6% 100.0% 100.0% 84.6%
Net dollar retention rate of
distributors (4) .............. 110.7% 99.1% 224.1% 219.0% 85.8%
(1) Calculated by dividing the revenue generated from distributorship in a given year/period by the number of distributors who
purchased our products in the same year/period.
(2) Calculated by dividing the revenue generated from distributorship in a given year/period by the number of transactions by
our distributors in the same year/period.
(3) Calculated by dividing the number of distributors of both current and previous periods by the number of distributors of the
previous period, multiplied by 100%.
(4) Calculated by dividing the revenue of a current period from distributors of both current and previous periods by the
revenue of the previous period of such distributors, multiplied by 100%.
According to the F&S report, given the large number of distributors in the market which are often
tied to specific end customers and geographic regions, the number of distributors engaged by chip
providers may vary year-to-year based on sales conditions. Our average distributor value increased
during the Track Record Period as we expanded our business. We recorded a decrease in the average
transaction value of distributors in 2023 as the number of transactions outpaced the increase in revenue
which is not indicative of our business performance or relationship with the distributors.
Our historical sales through distributors were generally recurring, except for circumstances where
we terminated our relationship with certain distributors. During the Track Record Period and up to the
Latest Practicable Date, we did not experience material breach of distribution agreements that had a
significant impact on our business, nor did we have any material disputes with or experience any
material return or exchange of products from our distributors that had a material adverse effect on our
business.
To the best of our knowledge, during the Track Record Period and up to the Latest Practicable
Date, all of our distributors were independent third parties. To the best of our knowledge, except for the
business relationship with us pursuant to the distribution arrangements, there is no other relationship
between the distributors and each of our Company, our subsidiaries, our Shareholders who own 5% or
more of our total issued Shares, Directors or senior management or any of their respective associates.
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Principal terms of distribution agreements
We typically enter into distribution agreements with our distributors. The following paragraphs set
forth a summary of the salient terms of our arrangements with distributors.
 Term. The term of the distribution agreement is typically one to two years. Upon expiration
of the prior term, we will renegotiate with distributors.
 Payment term . We generally require prepayments from our distributors before delivery,
while we may grant credit term to certain distributors with good credit profile and/or
collaborative relationship with us, with a credit term of typically two months.
 Sales amount and sales target . The distributors confirm the purchase amount with us in
written purchase orders specifying product model, specifications, quantity and total amount.
We do not set sales target for distributors.
 Sub-distribution . Our distributors are not allowed to sub-distribute our products to other
parties without our prior consent.
 Return and exchange . We allow returns and/or exchanges only under limited circumstances
as specified in the agreement. We may allow return and/or exchange and bear associated
transportation costs upon distributors’ timely notification of any discrepancy in product
specifications, or compromised packaging rendering products commercially unusable at
delivery, or quality defects verified by a mutually recognized third-party inspection agency.
Distributor management
We have implemented certain measures to monitor and manage our distributors, including those
on distributor selection, distributor training, authorized scope on geographical territories and product
lines, restrictions on transfer, IP protection and measures on competition.
 Distributor selection measures and criteria . We adopt a multi-stage distributor selection
process to ensure that they align with our strategic objectives and comply with certain
industry standards. We first identify potential distributors based on operational requirements,
including technical capabilities, cost efficiency and quality benchmarks, followed by a
review of technical, commercial, and quality documentation.
 Authorized scope on geographical territories and product lines . We unequivocally define
each distributors’ permitted geographic territories and product lines in contractual
agreements, and distributors are not allowed to conduct business beyond the scope.
 Transfer restrictions . We prohibit distributors from transferring, assigning, or delegating
distribution rights to third parties without our prior written consent.
 IP protection. We refrain distributors from reproducing and modifying our products, as well
as reverse-engineering or infringing our intellectual property.
 Measures on competition. We restrict distributors from representing competing or
substantially similar products, or disclosing our product information or technical
specifications to our competitors.
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Direct sales
We sell directly to certain end customers to a lesser extent. The following table sets forth key
metrics of our direct sale customers for the periods indicated.
Y ear ended December 31,
Ten months ended
October 31,
2022 2023 2024 2024 2025
Number of direct sale customers .. 22334
Number of new direct sale
customers ................. 20111
Number of transactions with direct
sale customers ............. 28 112 149 97 264
Average direct sale customer
value (1) (RMB in thousands) ... 2,539 10,366 10,188 7,436 10,382
Average transaction value of direct
sale customers (2) (RMB in
thousands) ................ 181 185 205 230 157
Direct sale customer retention
rate(3) .................... — 100.0% 100.0% 100.0% 100.0%
Net dollar retention rate of direct
sale customers (4) ............ — 408.3% 121.7% 95.5% 145.2%
(1) Calculated by dividing the revenue generated from direct sales in a given year/period by the number of direct sale
customers who purchased our products in the same year/period.
(2) Calculated by dividing the revenue generated from direct sales in a given year/period by the number of transactions by our
direct sales customers in the same year/period.
(3) Calculated by dividing the number of direct sale customers of both current and previous periods by the number of direct
sale customers of the previous period, multiplied by 100%.
(4) Calculated by dividing the revenue of a current period from direct sale customers of both current and previous periods by
the revenue of the previous period of such direct sale customers, multiplied by 100%.
We typically enter into purchase and sales agreements with certain of our customers through direct
sales. Salient terms of our arrangements for direct sales includes: (1) price shall be negotiated in good
faith and shall not increase unless mutually agreed, (2) buyers shall pay the undisputed amount
typically within 45 to 90 days, (3) we are contractually obligated to fulfill product supply in quantities
specified under purchase orders, with formal order acknowledgment issued within five business days of
receipt, (4) products shall be packed and marked so as to reasonably ensure that the products reach our
customers in a secure fashion, or otherwise instructed or requested by our customers, and (5) licensed
software is strictly operated within authorized scopes, while open-source software deployment remains
expressly prohibited without prior written customer approval.
Marketing
We have adopted a systematic marketing strategy. In the product planning and development
process, we communicate with our customers on a continuous basis to identify their needs and pain
points. This enables us to address challenges involved in the product design. Upon successful tape-out
of new products, we conduct targeted promotions to highlight product features, with a specific emphasis
on demonstrating how these features resolve identified customer pain points. We also provide training
programs for our sales and marketing personnel on product features, including cost structure, target
applications, software integration and advantages over legacy products.
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We employ multiple marketing approaches, primarily including on-site visits, telemarketing, client
referrals, and participation in competitive bidding processes. We also engage with the technical and
project personnel of our customers to ensure seamless collaboration and enhance customer relationship.
During such process, we identify and address evolving customer needs and pain points, which provides
critical insights to support our new product development while simultaneously enhancing customer
stickiness.
We have established sales and marketing team in South Korea and China. As of October 31, 2025,
our sales and marketing team consisted of 26 members. We solicit regular feedback from our customers
to assess our sales and marketing team’s responsiveness and technical capabilities.
To further enhance our visibility and customer engagement, we actively share updates through our
official communication channels, including our websites and social media accounts. These platforms
serve as key tools to demonstrate the capabilities of our products, share technical insights, and build
connections with our end customers.
CUSTOMERS
Our customers include distributors and direct sales customers, including manufacturers for mobile
phones, tablets, wearables, televisions, automotive electronics and vehicles. In 2022, 2023, 2024 and
the ten months ended October 31, 2025, revenue generated from our top five customers for each period
during the Track Record Period accounted for 93.0%, 78.6%, 83.0% and 88.2% of our total revenue of
such period, respectively, and revenue generated from our largest customer for each period during the
Track Record Period accounted for 32.7%, 23.7%, 30.3% and 30.5% of our total revenue in the same
periods, respectively. We typically settle payments with our top five customers by bank transfer.
The following tables set forth the details of the five largest customers in each year during the
Track Record Period.
Customer
Revenue
amount
Percentage
of revenue
contribution
Commencement
of
collaboration Credit period Customer background
Products provided
by us
(RMB in
thousands) (%)
For the year ended December 31, 2022
Customer A ... 42,552 32.7 2022 Prepayment/
60 days
A group distributing
semiconductor and other
consumer products
Low-power audio chips
Customer B ... 29,726 22.8 2018 60 days A group distributing electronic
and semiconductor products
Low-power audio chips
Customer C ... 25,924 19.9 2021 Prepayment A group distributing
semiconductor products
Low-power audio chips
and mid/high-power
audio chips
Customer D ... 14,984 11.5 2019 60 days A group distributing electronic
products, sensors, and chips
Low-power audio chips
and mid/high-power
audio chips
Customer E ... 7,998 6.1 2021 Prepayment A group distributing
semiconductor products
Low-power audio chips
Total ....... 121,184 93.0
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Customer
Revenue
amount
Percentage
of revenue
contribution
Commencement
of
collaboration Credit period Customer background
Products provided
by us
(RMB in
thousands) (%)
For the year ended December 31, 2023
Customer A ... 35,618 23.7 2022 Prepayment/
60 days
A group distributing
semiconductor and other
consumer products
Low-power audio chips
Customer F ... 23,341 15.5 2022 60 days A group distributing chips,
computer hardware, and
software
Low-power audio chips
and haptic drivers
Customer D ... 21,369 14.2 2019 60 days A group distributing electronic
products, sensors, and chips
Low-power audio chips
and mid/high-power
audio chips,
Customer B ... 20,655 13.7 2018 60 days A group distributing electronic
and semiconductor products
Low-power audio chips
Customer E ... 17,274 11.5 2021 Prepayment A group distributing
semiconductor products
Low-power audio chips,
mid/high-power audio
chips and haptic
drivers
Total ....... 118,257 78.6
Customer
Revenue
amount
Percentage
of revenue
contribution
Commencement
of
collaboration Credit period Customer background
Products provided
by us
(RMB in
thousands) (%)
For the year ended December 31, 2024
Customer D ... 107,685 30.3 2019 60 days A group distributing electronic
products, sensors, and chips
Low-power audio chips,
mid/high-power audio
chips and haptic
drivers
Customer E ... 67,442 19.0 2021 Prepayment A group distributing
semiconductor products
Low-power audio chips
and mid/high-power
audio chips
Customer G ... 66,342 18.7 2023 Prepayment/
60 days
A group distributing electronic
products and chips
Low-power audio chips
and haptic drivers
Customer F ... 29,206 8.2 2022 60 days A group distributing chips,
computer hardware, and
software
Low-power audio chips
and haptic drivers
Customer B ... 24,253 6.8 2018 60 days A group distributing electronic
and semiconductor products
Low-power audio chips
and haptic drivers
Total ....... 294,928 83.0
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Customer
Revenue
amount
Percentage
of revenue
contribution
Commencement
of
collaboration Credit period Customer background
Products provided
by us
(RMB in
thousands) (%)
For the ten months ended October 31, 2025
Customer D ... 85,586 30.5 2022 Prepayment A group distributing chips and
electronic products
Low-power audio chips,
mid/high-power audio
chips and haptic
drivers
Customer H ... 72,594 25.9 2019 60 days A group distributing electronic
products, sensors, and chips
Low-power audio chips,
mid/high-power audio
chips and haptic
drivers
Customer E ... 40,245 14.3 2021 Prepayment A group distributing
semiconductor products
Low-power audio chips
and mid/high-power
audio chips
Customer F ... 27,714 9.9 2022 60 days A group distributing chips,
computer hardware, and
software
Low-power audio chips
and haptic drivers
Customer I .... 21,359 7.6 2022 60 days A group manufacturing
electronic products
Low-power audio chips
Total ....... 247,498 88.2
— Customer A is a group distributing semiconductor products and other consumer products. Customer A is located in Hong
Kong.
— Customer B is a group distributing semiconductor products and other electronic products. Customer B is located in Suzhou
with a registered capital of RMB6.3 million.
— Customer C is a group distributing semiconductor products and product customization services. Customer C is located in
Shanghai with a registered capital of USD1.0 million.
— Customer D is a group distributing semiconductor products and other electronic products. Customer D is located in
Shenzhen with a registered capital of RMB5.0 million.
— Customer E is a group distributing semiconductor products. Customer E is located in Shanghai.
— Customer F is a group distributing semiconductor products and provides research and development supports. Customer F is
located in Shenzhen with a registered capital of RMB5.0 million.
— Customer G is a group distributing semiconductor products and other electronic products. Customer G is located in
Shenzhen with a registered capital of RMB21.4 million.
— Customer H is a group distributing chips and electronics. Customer H is located in Zhangzhou, Fujian, with a registered
capital of RMB218.3 million.
— Customer I is a group manufacturing electronic products. Customer I is located in Hong Kong and was founded in 1988,
and is a subsidiary of one of the largest consumer electronics multinational corporations headquartered in South Korea.
To the best of our knowledge, all of our five largest customers in each year during the Track
Record Period were independent third parties and except for the sales of chips disclosed in this
prospectus, there are no past or present relationships, including without limitation, business,
employment, family, trust, financing, shareholding or otherwise between our Company and the said
customers, their respective shareholders, directors or senior management, or any of their respective
associates. As of the Latest Practicable Date, none of our Directors, their associates or any of our
Shareholders (who or which to the knowledge of our Directors owned more than 5% of our issued share
capital) had any interest in any of our five largest customers in each year/period during the Track
Record Period.
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Concentration with major customers
During the Track Record Period, we primarily sold our products to our five largest customers,
which are distributors based in China. We have commenced our business relationship with each of them
from two to seven years. According to Frost & Sullivan, it is in line with industry practice for fabless
chip design companies to distribute their products through distributors to manage the credit period,
logistics and market promotions.
In 2022, 2023, 2024 and the ten months ended October 31, 2025, our revenue from our largest
five customers were RMB121.2 million, RMB118.3 million, RMB294.9 million and RMB247.5 million,
respectively, representing 93.0%, 78.6%, 83.0% and 88.2%, respectively, of our total revenue for the
same periods.
We have continued to expand our sales network to reach out to more customers and deployed
different marketing strategies to enlarge our customer base. We also believe that our products are
customized for specific customer segments which has increased customer stickiness. Our Directors are
of the view that our relationship with our largest five customers is unlikely to materially and adversely
change or terminate because we have maintained a long-term and stable business relationship with
them. In the unlikely event that our relationship is terminated, interrupted or modified in any way
adverse to us, there may be material interruptions to our operations and business. See “Risk
Factor—Risks Relating to Our General Operations and Industry—If we fail to attract new customers
and/or retain existing customers, our business, financial conditions and results of operation may be
adversely affected.”
SUPPLIERS
Our Procurement Model and Management
Under our fabless model, we outsource wafer fabrication, chip packaging and all testing activities
for mass production to third-party business partners. Our primary procurement include (1) wafers from
wafer foundry located in China, Japan and South Korea, and (2) chip packaging and testing services
located in China. To a much lesser extent, we also procure certain equipment, such as testing
equipment, and research materials, as well as other services that facilitate the design of our products,
such as tape-out and multi-project wafer services.
We have established a procurement team to arrange and place orders for our major procurements.
For the procurement of wafers and chip packaging and testing services, we also involve our vice
president of operations in making final procurement decisions and our engineering department to
evaluate the procurement from technical perspectives, to ensure our procurement can meet the needs of
our business operations and align with our strategic objectives.
We have adopted a prudent approach to process selection, which prioritizes mature process, to
optimize the cost structure of our products. We have also implemented systematic supplier management
procedures. We generally procure from top suppliers in relevant categories to ensure that they can
address our and our customers’ requirements, prioritizing procurement from suppliers located in China.
We will evaluate supplier candidates based on their technical standards and on-site review results, with
which we are able to maintain a list of qualified suppliers.
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Major Suppliers
Our suppliers primarily consist of (1) foundries and (2) chip packaging and testing service
providers. In 2022, 2023, 2024 and the ten months ended October 31, 2025, purchases from our top five
suppliers for each period during the Track Record Period accounted for 89.1%, 91.9%, 93.9% and
93.5% of our total purchase amount of such period, respectively, and the purchase from our largest
supplier for each period during the Track Record Period accounted for 31.5%, 62.0%, 52.7% and 33.7%
of our total purchase amount in the same periods, respectively. We typically settle payments with our
top five suppliers by bank transfer.
The following tables set forth the details of our top five suppliers in each year during the Track
Record Period.
Supplier
Purchase
amount
Percentage of
purchase
contribution
Commencement
of collaboration Payment term Supplier background
Products and/or
services
purchased
(RMB in
thousands) (%)
For the year ended December 31, 2022
Supplier A .. 52,103 31.5 2020 30 days A company specializes in IC
foundry services and
semiconductor manufacturing
Wafer
Supplier B .. 51,458 31.1 2016 Prepayment A company specializes in IC
foundry services and chip
design services
Wafer
Supplier C .. 17,440 10.5 2022 Prepayment A company that specializes in
IC foundry services and
testing equipment rental
services
Wafer
Supplier D .. 15,777 9.5 2020 30 days A company that specializes in
chip packaging and testing
services
IC packaging
and testing
services
Supplier E .. 10,636 6.4 2019 30 days A company that provides
semiconductor research and
development services and
technical support
IC packaging
and testing
services
Total...... 147,414 89.1
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Supplier
Purchase
amount
Percentage of
purchase
contribution
Commencement
of collaboration Payment term Supplier background
Products and/or
services
purchased
(RMB in
thousands) (%)
For the year ended December 31, 2023
Supplier A .. 89,557 62.0 2020 30 days A company specializes in IC
foundry services and
semiconductor manufacturing
Wafer
Supplier E .. 13,935 9.6 2019 30 days A company that provides
semiconductor research and
development services and
technical support
IC packaging
and testing
services
Supplier D .. 13,234 9.2 2020 30 days A company that specializes in
chip packaging and testing
services
IC packaging
and testing
services
Supplier F ... 10,622 7.3 2022 30 days A company that provides
research and development
services and IC foundry
services
IC packaging
and testing
services
Supplier B .. 5,463 3.8 2016 Prepayment A company specializes in IC
foundry services and chip
design services
Wafer
Total...... 132,811 91.9
Supplier
Purchase
amount
Percentage of
purchase
contribution
Commencement
of collaboration Payment term Supplier background
Products and/or
services
purchased
(RMB in
thousands) (%)
For the year ended December 31, 2024
Supplier A .. 183,545 52.7 2020 30 days A company specializes in IC
foundry services and
semiconductor manufacturing
Wafer
Supplier F ... 47,532 13.6 2022 30 days A company that provides
research and development
services and IC foundry
services
IC packaging
and testing
services
Supplier G .. 47,264 13.6 2023 30 days A company that specializes in
IC foundry services and
provides research and
development platforms
Wafer
Supplier E .. 38,646 11.1 2019 30 days A company that provides
semiconductor research and
development services and
technical support
IC packaging
and testing
services
Supplier D .. 10,180 2.9 2020 30 days A company that specializes in
chip packaging and testing
services
IC packaging
and testing
services
Total...... 327,167 93.9
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Supplier
Purchase
amount
Percentage of
purchase
contribution
Commencement
of collaboration Payment term Supplier background
Products and/or
services
purchased
(RMB in
thousands) (%)
For the ten months ended October 31, 2025
Supplier G .. 79,638 33.7 2023 30 days A company that specializes in
IC foundry services and
provides research and
development platforms
Wafer
Supplier A .. 71,103 30.1 2020 30 days A company specializes in IC
foundry services and
semiconductor manufacturing
Wafer
Supplier E .. 34,502 14.6 2019 30 days A company that provides
semiconductor research and
development services and
technical support
IC packaging
and testing
services
Supplier F ... 24,202 10.3 2022 30 days A company that provides
research and development
services and IC foundry
services
IC packaging
and testing
services
Supplier H .. 11,256 4.8 2016 Prepayment A company specializes in IC
foundry services and chip
design services
Wafer
Total...... 220,701 93.5
— Supplier A is a company specializing in IC foundry services and semiconductor manufacturing. Supplier A is located in
Shanghai with a share capital of USD55,902.0 million.
— Supplier B was a Korean company specializing in semiconductor manufacturing and design. Supplier B was founded in
1997.
— Supplier C is a company specializing in IC foundry services and rental services for semiconductor testing devices. Supplier
C is located in Xiamen with a registered capital of RMB320.0 million.
— Supplier D is a company specializing in chip packaging and semiconductor testing services. Supplier D is located in
Chengdu with a registered capital of RMB770.0 million.
— Supplier E is a company specializing in chip packaging and semiconductor testing services. Supplier E is located in
Nantong with a registered capital of RMB1,517.6 million.
— Supplier F is a company specializing in semiconductor testing and designing services, research and development services
and sales of semiconductor manufacturing hardware. Supplier F is located in Jiangsu with a registered capital of
RMB950.0 million.
— Supplier G is a company specializing in IC foundry services and a provider of research and development platforms.
Supplier G is located in Israel.
— Supplier H is a company specializing in semiconductor testing and designing services, research and development services
and sales of semiconductor manufacturing hardware. Supplier H is located in Zhejiang with a registered capital of
RMB12.0 million.
To the best of our knowledge, all of our five largest suppliers in each year/period during the Track
Record Period were independent third parties. As of the Latest Practicable Date, none of our Directors,
their associates or any of our Shareholders (who or which to the knowledge of our Directors owned
more than 5% of our issued share capital) had any interest in any of our top five suppliers in each
year/period during the Track Record Period.
We enter into framework agreements with our major suppliers and place purchase orders on
case-by-case basis. The following paragraphs set forth a summary of the salient terms of our framework
agreements with suppliers.
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 Term. The framework agreement is usually one-year or on an open-ended term.
 Prices. The agreements generally do not specify quantity and price, which we set out in
separate purchase orders.
 Payments. The purchase orders set out specific payment terms depending on the type of
products and/or services to be procured.
 Principal obligations. Suppliers are normally responsible for timely delivery and quality
assurance of products or services. Generally, our suppliers are required to meet our specified
quality requirements and are responsible for defects resulting from suppliers’ conduct.
 Termination . Either party may terminate with 30 days’ written notice. Active purchase orders
remain valid until fulfillment.
In addition, we enter into quality assurance agreements with certain suppliers to reinforce our
quality control. Our Directors confirm that we had not experienced any material fluctuations in prices
set by our suppliers, material breach of contract on the part of our suppliers or material delay in
delivery of our orders from our suppliers during the Track Record Period and up to the Latest
Practicable Date.
Concentration with Supplier A
During the Track Record Period, we primarily procured foundry-manufactured wafers from
Supplier A. Supplier A is a semiconductor manufacturer based in Shanghai, China. We commenced our
business relationship with Supplier A in 2020. According to Frost & Sullivan, it is in line with industry
practice for fabless chip design companies to rely on a limited number of foundry partners to ensure
consistently quality products and centralize management of manufacturing demands.
In 2022, 2023, 2024 and the ten months ended October 31, 2025, our purchases from Supplier A
were RMB52.1 million, RMB89.6 million, RMB183.5 million and RMB71.1 million, respectively,
representing 31.5%, 62.0%, 52.7% and 30.1%, respectively, of our total purchases for the same periods.
We have expanded our procurement network to include more wafer manufacturers. There are
additional alternative suppliers with similar level of technical knowledge to produce products as
currently supplied by Supplier A with certain variations in prices and specifications to achieve similar
functions under reasonable commercial terms. Our Directors are of the view that we are able to procure
wafers from alternative suppliers with similar level of technical knowledge at comparable terms as
compared to those offered by Supplier A. Our Directors are of the view that our relationship with
Supplier A is unlikely to materially and adversely change or terminate because we have maintained a
long-term and stable business relationship with Supplier A since we commenced collaboration in 2020.
In the unlikely event that our relationship with Supplier A is terminated, interrupted or modified in any
way adverse to us, there may be material interruptions to our operations and business. See “Risk
Factor—Risks Relating to Our General Operations and Industry—We are exposed to supplier
concentration risk due to our reliance on certain major suppliers.”
INVENTORY AND LOGISTICS
We do not have any warehouses, and we implement a vendor-managed inventory, storing all of
our inventories at the facilities of our suppliers. Our inventory consists of raw materials,
work-in-progress items and finished goods. In addition, we typically maintain safety stock of one
month. We also regularly review our inventory health, including having our operations personnel
evaluate the status of our raw materials aging over three and six months. Inventories exceeding three or
six months trigger targeted destocking operations.
We partner with qualified third-party logistics providers to deliver all finished goods from the
locations of our suppliers directly to our or our customers’ specified locations. During the Track Record
Period and up to the Latest Practicable Date, we had not experienced any significant delay or
inappropriate handling of goods that materially and adversely affected our business operations.
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QUALITY CONTROL
Product Quality and Standards
We are committed to maintaining high level of quality for our products. We have designed and
implemented monitoring and quality control systems to manage our operation activities. Our quality
control system encompasses critical aspects of our operations, including product design and
development, procurement, packaging, delivery and supporting services. Our products comply with the
number of industry standards and quality requirements. We have also engaged independent product
testing and certification organizations to test and certify our products on the relevant standards in
certain target markets.
We have established a rigorous and well-structured quality management system that integrates
standards to ensure product reliability and customer satisfaction. As a fabless power amplifier audio
chip company specializing in high-reliability chip design, we implement an end-to-end “Design-in
Quality” system aligned with ISO 9001 requirements across the entire product lifecycle, from
architectural design and wafer fabrication to assembly and testing.
Prior to shipment, we conduct rigorous outgoing inspections aligned with our product quality
standards and require suppliers to perform pre-shipment verifications, including sampling inspections
and examinations. We implement a defective product handling process that handles defective products
based on defect types and confirms the risk exposure of relevant batches. We also adopt a test
management system to monitor testing status of our finished products, and a production yield
monitoring system to validate manufacturing data.
Supply Chain Quality Control
As a fabless company, we work alongside established foundries and packaging and testing
partners for the manufacturing of our chips. Our supply chain team, in coordination with our quality
center and R&D center, conducts thorough evaluations of suppliers based on factors such as their
technical expertise and compliance with quality standards.
We have established supplier qualification procedures. Prior to establishing a partnership, our
Company conducts detailed investigations, including background checks, on-site factory audits, and
sample evaluations. To ensure ongoing quality control during mass production, our suppliers are
required to provide monthly reports to our quality center, including wafer, packaging, and testing yield
reports. Should the yield fall below our control requirements, the supplier must submit an abnormal
analysis report to our quality department. We have also implemented a tiered evaluation system based
on supplier ratings. In principle, we conduct regular on-site evaluations for packaging and testing
partners annually, and for wafer foundries every three years. Our supply chain and engineering
departments conduct these evaluations and assign ratings to facilitate tiered management.
Product Warranty and Returns
Our warranty term is typically 24 months, generally in line with the industry norm, according to
the F&S report. We maintain proactive communication with our customers after sales and diligently
collaborate with them to resolve any quality concerns. In case of product failure within the warranty
period, we will arrange for repair or replacement of products and/or services without extra charge. See
“—Sales and Marketing—Our Sales Network—Sales through distributors” for details of our product
return and exchange policies with distributors.
During the Track Record Period and up to the Latest Practicable Date, we had not received any
material complaints relating to product quality; and we had not experienced any material product
returns, refunds or recalls.
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BUSINESS SUSTAINABILITY AND PATH TO PROFITABILITY
Since our inception, we have developed a comprehensive portfolio of low-power audio chips,
mid/high-power audio chips, and haptic drivers, enhanced by proprietary algorithms and customized
application solutions to ensure optimal chip performance, which have been widely adopted across
downstream sectors with strong demand. During the Track Record Period, we achieved continuous
revenue growth through successful product development and launch, with our proactive efforts in
product commercialization and market expansion significantly contributing to increased sales volume
and revenue. Our revenue increased from RMB130.3 million in 2022 to RMB150.3 million in 2023, and
further to RMB355.2 million in 2024. Our revenue remained relatively stable at RMB288.8 million for
the ten months ended October 31, 2024 and RMB280.8 million for the ten months ended October 31,
2025.
According to the F&S report, in terms of total shipment volume in 2024, we ranked second among
power amplifier audio chip providers in China and third among power amplifier audio chip providers
globally. During the Track Record Period, we had actively expanded our market reach and customer
base through product commercialization and market expansion, driving growth in sales volume and
revenue. We aim to further strengthen our market position by continuing to develop cutting-edge
technologies, enhance customer experience, implement effective commercialization strategies, and
successfully market new products in emerging application scenarios.
During the Track Record Period, we recorded net losses of RMB65.9 million, RMB94.1 million,
RMB56.8 million, RMB46.9 million and RMB51.8 million in 2022, 2023, 2024 and the ten months
ended October 31, 2024 and 2025, respectively, primarily due to our substantial R&D and sales and
marketing expenses invested in product development, market presence enhancement, and brand
visibility. In 2023, we recorded a gross loss of RMB0.1 million, primarily attributable to our strategy to
accelerate market share growth through a more competitive strategy in response to the intensifying
competition. Although we may continue to incur net losses in the short term, we are optimistic about
achieving profitability through business scale expansion and operational efficiency improvements. Our
cash and cash equivalents was RMB182.9 million, RMB105.3 million, RMB66.1 million and RMB73.5
million as of December 31, 2022, 2023, 2024 and October 31, 2025, respectively, primarily used to
fund our working capital requirements and other recurring expenses. During the Track Record Period,
we financed our capital expenditures and working capital requirements principally with funds from
capital contribution from our Shareholders, cash generated from our operations and bank borrowings.
As of December 31, 2022, 2023, 2024 and October 31, 2025, our available bank facilities were nil,
RMB65.0 million, RMB90.0 million and RMB170.0 million, respectively, with utilized facilities of nil,
RMB36.6 million, RMB59.7 million and RMB99.9 million, respectively. Our Directors confirm that we
have sufficient working capital to meet current and next 12 months’ requirements based on our financial
resources including cash reserves, future operating cash flow, financial assets, available credit lines, and
estimated proceeds from the Listing.
Recognizing the increasing prevalence of power amplifier audio chips, we have strategically
focused on expanding our sales network and enhancing R&D rather than pursuing immediate
profitability, laying a solid foundation to capture future market opportunities. We have established sales
and service teams in Shanghai, Shenzhen, Beijing, Xi’an, and South Korea to accelerate revenue
growth. This multi-center operational structure enhanced operational efficiency, market penetration and
client service efficiency, driving higher revenue. In addition, we have been continuously expanding our
customer base into new sectors. With respect to low-power audio chips, we evolve from our initial
focus on the mobile phone market to penetrate emerging segments such as tablets, smart watches, smart
glasses, portable gaming devices, action cameras, and beyond. Further, through the launch of mid/high
power amplifier audio chips, we have further expanded into the smart display market and automotive
markets. We target to further diversify our market reach into robotics. On the other hand, we also
established multi-product bundling services for our portable power amplifier audio chips, adaptive
power control audio chips, mid/high-power audio chips and haptic drivers to our customers to integrate
our products in their ecosystems. According to the F&S report, China’s power amplifier audio chip
BUSINESS
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market reached RMB41.6 billion in 2024 and is expected to reach RMB48.2 billion in 2025, and further
to RMB87.0 billion by 2029, at a CAGR of 15.9%. As we broaden our product offerings and scale our
operations, we anticipate progressive profitability improvements are committed to achieving sustainable
growth and profitability through (1) maintaining our market position through our growth strategies to
address growing market demand in emerging industries, and (2) improving cost efficiency to enhance
net profit margins.
Effectiveness of strategies
Our strategies have demonstrated clear effectiveness, which we quantify through our financial
performance, market share growth, and specific technical advancements.
The expansion of our application scenarios has directly increased our revenue and gross profit
margin. Our revenue grew from RMB130.3 million in 2022 to RMB355.2 million in 2024, and further
to RMB280.8 million for the ten months ended October 31, 2025. Our gross profit margin (before
impairment losses on inventories) increased from 7.3% in 2022 to 13.1% in 2024 and reached 20.0%
for the ten months ended October 31, 2025. The expansion of our chip types has proven successful. In
its second year of launch, our haptic driver generated sales revenue exceeding RMB5.0 million from
multiple KA customers, achieving a gross profit margin of over 50%.
Our audio chip technology iterations are measured by specific technical parameter improvements.
For our low-power audio chips, we increased the signal-to-noise ratio from 105dB (FS1601 series) to
119dB (FS1999 series). We expanded the boost voltage range from 6.0V−9.6V to 10V (FS1987 series)
and 15V (FS1986 series). We reduced the chip area from 2.8mm × 2.8mm to 1.58mm × 1.98mm. We
lowered the noise floor from 15µV−34µV to 7µV (FS1816 series).
These technological advancements directly drove our market share growth. Our global market
share for audio chips increased from 1.9% in 2022 to 4.1% in 2024. Our market share in China
increased from 4.2% in 2022 to 8.5% in 2024. This expansion was supported by our technical upgrades
in custom products like the FS1816 series, which improved the signal-to-noise ratio to 116 dB, boost
voltage to 6.5V , noise floor to 7µV , and output power to 2.4W, compared to the previous generation.
Maintaining our market position through our growth strategies
We will strengthen our position in power amplifier audio chips through R&D investment, product
diversification, supply chain optimization, global expansion, and strategic partnerships. We also intend
to establish a dedicated R&D center with an automotive-grade laboratory featuring testing equipment,
expanding our technical team, and investing in EDA tools and hardware infrastructure to accelerate
innovation.
We aim to expand our product portfolio with differentiated solutions to address different emerging
opportunities across consumer electronics, intelligent vehicles, and robotics applications. In consumer
electronics, we will continue to capitalize on the growing AI adoption in electronic devices, in
intelligent vehicles, we will advance intelligent cabin technologies, and in robotics, we will leverage
our audio chip expertise to meet evolving voice interaction and entertainment demands.
To ensure quality and supply chain resilience, we will build an in-house ATE testing platform with
specialized equipment, talent, and systems integration to reduce reliance on third-party testing, improve
yield rates, and accelerate time-to-market. Our global sales strategy will focus on strengthening
overseas teams and establishing localized centers in key markets such as the U.S. and South Korea. We
will develop customized solutions, enhance local marketing efforts, and invest in talent development to
improve customer experience and market penetration.
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Improving cost efficiency to enhance net profit margins
Achieving long-term profitability hinges on our continuous efforts to improve net profit margin,
which we aim to accomplish through multiple strategic initiatives. We anticipate significant cost
reductions as economies of scale take effect with growing product demand. To enhance efficiency, we
will streamline supply chain management to maintain control over raw material expenses and ensure the
quality of key components. In addition, we will boost customer acquisition through strengthened brand
and product loyalty across distributorship and direct sales channels, optimize sales and marketing costs,
enhance marketing precision, and deepen collaboration with current distributors. Additionally, stable
general and administrative expenses relative to revenue growth, as a result of the economies of scale,
should reinforce our financial position, collectively paving the way toward sustained profitability.
Furthermore, we have implemented Office Automation (OA) administrative system, online working
system and adopted paperless and other working policies to increase administrative efficiency to ensure
revenue growth and the decrease of administrative expenses.
Our implementation of the OA administrative system has significantly enhanced our operational
efficiency across several key areas. The system has streamlined our process transmission and approval,
particularly improving the efficiency of cross-regional collaboration. It eliminates the need for frequent
business travel or physical document transfers for administrative procedures, thereby substantially
reducing processing and review times. Furthermore, the OA system has established a centralized
database. This database aggregates price quotations from various suppliers, enabling our employees to
conduct comparative analysis when initiating new procurement and selecting vendors. This functionality
directly assists us in securing the most favorable supplier quotes. Additionally, the system enables
mobile office capabilities for our staff. It allows employees to initiate and handle administrative
workflows directly from their mobile devices, ensuring operational continuity and responsiveness
regardless of their physical location.
In 2022, 2023, 2024 and the ten months ended October 31, 2025, our administrative expenses
were 14.0%, 13.6%, 5.5% and 7.2% of our revenue for the same periods, respectively, with listing
expenses excluded.
Expanding customer base and commercialization of new products
We have successfully expanded our customer base and commercialized our products across a
broadening range of sectors. Our journey began with low-power audio chips for the mobile phone
market. Since our inception, we have grown into new applications, including tablets and smart watches
in 2018, speakers in 2020, televisions in 2021, AR glasses in 2022, as well as NEVs and action cameras
in 2025.
A significant portion of our revenue is now derived from several of these early expansions which
have reached mass production. Specifically, our products for tablets, smart watches, televisions, and
audio speakers have become substantial contributors, generating over RMB71.0 million and accounting
for over 40% of our total revenue for the ten months ended October 31, 2025. Revenue from these
applications has grown rapidly during the Track Record Period, effectively supporting our overall
revenue growth. The revenue and gross profit margin for these applications are set out in the following
table.
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Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2025
Product Category Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin Revenue Gross profit
Gross profit
margin
(RMB in thousands, except for percentages)
Mobile phone ........ 110,759 18,204 16.4% 113,143 5,006 4.4% 212,583 33,197 15.6% 162,738 31,796 19.5%
Tablet .......... 14,216 3,031 21.3% 14,759 1,234 8.4% 87,892 7,911 9.0% 82,926 15,913 19.2%
Speaker .......... 336 127 37.8% — — — 12,427 4,116 33.1% 11,896 3,596 30.2%
Television ......... 2,897 (252) (8.7%) 1,230 175 14.3% 9,992 854 8.5% 7,505 1,183 15.8%
Smart watch ........ 1,485 372 25.1% 3,109 522 16.8% 5,690 1,183 20.8% 6,495 2,522 38.8%
Vehicle .......... ————————— 8 9 9 4 2 6 47.4%
Camera .......... ————————— 2 0 05 6 28.0%
All-in-one PC ........ 159 (118) (74.1%) 585 145 24.7% 147 40 27.1% 80 25 31.3%
Others ........... 475 133 27.8% 17,465 631 3.6% 26,464 1,887 7.1% 8,039 2,125 26.4%
Allowance for impairment ... (12,018) (7,837) (2,632) (1,585)
Total ........... 130,327 9,479 7.3% 150,291 (124) (0.1%) 355,195 46,556 13.1% 280,778 56,057 20.0%
(1): Others primarily includes projectors, dictionary pens, headphones and a small portion of revenue that cannot be accurately
classified.
(2): Above are our estimates of our end customers intended applications based on the chip model’s specifications. We have no
control over, or knowledge of, how end customers ultimately apply these chips.
We are advancing our commercialization in newer applications, having commenced small-batch
deliveries with orders pending mass production ramp-up.
 In the NEV market, we recognized revenue of RMB1.2 million from deliveries in 2025. We expect
to recognize revenue of approximately RMB0.6 million to RMB1.3 million in the first quarter of
2026. Furthermore, we have begun supplying to a major automotive electronics supplier with over
RMB10 billion in revenue in 2024, a global battery and automotive electronics provider, and other
NEV component manufacturers since October 2025. We are also in preliminary pricing discussions
with a large state-owned automobile manufacturer and have provided samples to another for
product evaluation, with their mass production projects anticipated in 2026.
 For action cameras, we have partnered with a company in the global panoramic camera market.
We recognized revenue of approximately RMB0.6 million from this application in 2025, with a
gross profit margin of 27.8%. Furthermore, we have secured indicative orders totaling
approximately RMB1.1 million for delivery in the first half of 2026.
We are also making progress in applications where specific order quantities are still under
discussion following successful supplier onboarding.
For drones and walkie-talkies, we have completed the supplier onboarding process with an
enterprise in the global consumer drone market and a major global provider of walkie-talkies for
business and industry, respectively. No specific order quantities or values have been secured as of the
Latest Practicable Date.
We continue to target further diversification of our market reach into areas such as robotics. On
the other hand, we also established multi-product bundling services for our portable power amplifier
audio chips, adaptive power control audio chips, mid/high-power audio chips and haptic drivers to our
customers to integrate our products in their ecosystems. Furthermore, we are progressively filling
product gaps in niche markets. For example, the new-generation 12W portable power amplifier audio
chip FS1897U addresses the gap in the high-voltage portable power amplifier audio chip segment, and
the new-generation 30-40W audio chip FS2125N for audio systems addresses the gap in the 30-40W
audio market.
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Improving profitability through product diversification and structural optimization
We are diversifying our product portfolio to expand revenue scale and optimize our revenue
structure by increasing the proportion of products with higher ASPs and gross margins. For instance,
revenue from portable power amplifier audio chips, which have higher ASPs and gross margins
compared to adaptive power control audio chips, was RMB43.8 million, RMB36.3 million, RMB150.6
million and RMB110.5 million for each year/period during the Track Record Period, representing
34.7%, 25.8%, 46.6%, and 43.2% of total revenue, respectively.
Furthermore, revenue from mid/high-power audio chips and haptic drivers, which also have
relatively high ASPs and gross margins, has grown steadily. Revenue from mid/high-power audio chips
was RMB4.0 million, RMB8.7 million, RMB26.7 million, and RMB20.6 million for each year/period
during the Track Record Period, representing 3.0%, 5.8%, 7.5%, and 7.3% of total revenue,
respectively. Revenue from haptic drivers, commercialized in 2023, was RMB1.0 million, RMB5.3
million, and RMB3.7 million for 2023, 2024, and the ten months ended October 31, 2025, representing
0.7%, 1.5%, and 1.3% of total revenue, respectively.
Key account customers expansion
We define key account (“ KA”) customers as important industry players, typically ranked within
the top 10 in their respective sectors by revenue. Our strategy focuses on serving these top customers,
as their large business scale and operational stability enable us to achieve: (1) rapid revenue growth due
to their significant individual procurement volumes; (2) stable revenue streams due to their consistent
operations and ongoing product purchases; and (3) enhanced industry recognition, as partnerships with
such players naturally elevate our market profile. We access and sell our products to our KA customers
via our direct sales force and distributor network. Key account customers comprise both own-brand
customers and ODM customers. Own-brand KA customers typically benefit from higher brand
premiums, allowing us to achieve higher gross margins on sales to them. Major KA own-brand
customers contributing significantly to revenue.
We typically initiate direct engagement with potential KA customers, which involves technical
discussions, sample supply and validation, and negotiation of commercial terms such as volume and
pricing. Upon confirming customer requirements, we, in consultation with the KA customer, determine
the appropriate sales model, either direct supply or distribution through a distributor.
Key account customers carry significance to our business operations.
The revenue and gross profit contributions from key account customers are significant to our
operations. During the Track Record Period, key account customers accounted for over 85% of our total
revenue, contributing the substantial majority of our income. Within this, the revenue proportion from
key account own-brand customers increased from 39.5% in 2022 to 42.8% in the ten months ended
October 31, 2025. These customers generally provide higher average selling prices and gross margins,
which contributed to the overall increase in our gross profit margin.
We maintained a 100.0% retention rate for our key account customers from 2022 to 2024. The
high stability of these key account customers, with no loss of any key account, provides a foundation
for the stability of our revenue. In addition, substantially all of our key account customers are listed
companies, further underpinning the stability of our operations.
Since we access and sell our products to our KA customers via our direct sales force and
distributor network, we do not have access to the full set of sales data of our distributors in respect of
their sales of our products to such KA customers. We prepared the revenue breakdown based on the
sales information collected by our sales representatives from the distributors and the relevant KA
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customers. The following table sets forth our revenue and revenue percentage, and number of key
account brand customers and key account ODM customers during the Track Record Period:
2022 2023 2024 Ten months ended October 31, 2025
Number
Revenue
(RMB in
thousands) Percentage Number
Revenue
(RMB in
thousands) Percentage Number
Revenue
(RMB in
thousands) Percentage Number
Revenue
(RMB in
thousands) Percentage
Key account brand
customer ....... 7 52,040 39.5% 10 67,519 44.4% 15 143,296 40.3% 16 120,269 42.8%
Key account ODM
customer ....... 3 78,256 59.5% 3 74,882 49.2% 3 180,197 50.7% 4 115,086 41.0%
Others ......... 1,287 1.0% 9,736 6.4% 32,245 9.1% 45,423 16.2%
Total .......... 131,583 100.0% 152,137 100.0% 355,739 100.0% 280,778 100.0%
We continue to make progress in securing such industry customers. In the consumer electronics
sector, since becoming a supplier to a major global technology company in 2022, our revenue from this
customer has increased rapidly, from an annual average of approximately RMB5.2 million between
2022 and 2024 to RMB21.4 million in the ten months ended October 31, 2025. For this KA customer,
we recorded gross loss margin of 40.2% and 23.3% in 2022 and 2023, respectively, we recorded gross
profit margin of 34.8% and 42.8% in 2024 and the ten months ended October 31, 2025. Furthermore, in
2025, we completed supplier onboarding for several companies, including an enterprise in the global
consumer drone market, a company in the global panoramic camera market and a major global provider
of walkie-talkies for business and industry, respectively.
In the smart display market, we completed supplier qualification for two of the top five global
television manufacturers in 2025. In the NEV sector, we have recorded initial small-scale sales revenue
to two major automotive manufacturers, one listed on the H-share market and the other on the A-share
market, and secured an indicative order exceeding RMB37.2 million from a A-share listed electric
vehicle maker. We are also conducting sample testing and order discussions with other potential
automotive customers.
KA Customers’ ASP and gross profit margin
Our KA brand customers generally exhibit higher average selling prices and gross profit margins
compared to our KA ODM customers and other customers, based on available data for 2024 and ten
months ended October 31, 2025.
The following table sets forth the gross profit margin and average selling price for KA customers
and other customers.
2024
Ten months ended
October 31, 2025
Gross profit
margin ASP
Gross profit
margin ASP
(RMB, except for percentages)
KA brand customer ................ 17.6% 0.90 25.0% 0.79
KA ODM customer ................ 9.0% 0.68 17.4% 0.65
Other customers .................. 14.3% 0.69 16.6% 0.59
Specific strategies and initiatives for acquiring key account customers
To secure key account customers, we adopt a dual strategy of new customer promotion and
cross-selling to existing customers. Associated personnel and travel expenses are recorded as sales and
marketing expenses. For new application scenarios, we primarily focus on promoting to new customers.
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For instance, for the smart home product market addressed by our mid/high-power audio chips, we
began engaging with smart display manufacturers, as well as top speaker manufacturers from 2022.
These manufacturers have now become our important customers.
Our current and potential orders
As of January 31, 2026, we currently hold orders on hand totaling approximately RMB171.0
million, which comprises approximately RMB46.1 million supported by confirmed customer orders and
approximately RMB124.9 million supported by potential customer demand. We expect to complete
delivery and recognize revenue related to these orders by the end of July 2026.
In the NEV sector, we have engaged in business cooperation with the world’s largest seller of
NEVs in 2024. In September 2025, we recorded revenue of RMB663.7 thousand from this customer,
with the remaining RMB1.54 million expected to be recognized between the fourth quarter of 2025 and
the first quarter of 2026. Furthermore, we have secured aggregate indicative orders of RMB37.2 million
from this customer, which are expected to be formally placed progressively in early 2026 based on the
customer’s production schedule, with corresponding revenue recognition anticipated within 2026. In
addition, we have secured aggregate indicative orders amounting to RMB1.1 million from several
automotive component manufacturers specializing in smart cabin solutions. Delivery and revenue
recognition for these orders are projected to take place between the fourth quarter of 2025 and the first
quarter of 2026.
Gross profit margin and ASP for orders from the world’s largest seller of NEVs in 2024
The automotive-grade power amplifier audio chips supplied by our Company to the world’s
largest seller of NEVs in 2024 have an average selling price of approximately RMB10.68. As the
supply volume remains at a minimal scale, a stabilized gross profit margin has not yet been established.
However, based on gross profit margins of comparable products in the industry, such as the 36.1%
comprehensive gross margin reported by our competitor in China and the 50%−60% gross margin for
analog chips reported by our other global competitor, we anticipate achieving a gross profit margin in
the range of 35% to 40% for these products. Given the significantly higher ASP and anticipated gross
profit margin compared to our historical average, the successful ramp-up of these orders is expected to
contribute positively to the uplift of our overall gross profit margin.
Enhanced R&D efficiency
As our R&D team expands and gains valuable industry experience, we continue to improve our
R&D efficiency. For example, in 2022, 2023, 2024 and the ten months ended October 31, 2025, the
number of new IC design projects that completed tape-out are 15 projects, 18 projects, 24 projects and
19 projects, respectively, and we believe that we will continue to witness the increase in R&D
productivity.
Cost optimization through scale expansion and technological advancement
As our business operations and procurement scale continue to expand, we gained procurement
leverage and minimized costs. During the year ended December 31, 2022, 2023, 2024 and the ten
months ended October 31, 2025, per unit costs of our chips were RMB1.02, RMB0.69, RMB0.66, and
RMB0.55 respectively.
We have consistently reduced our per-unit chip cost through technological iteration and supply
chain optimization. The cost per chip decreased from RMB1.02 in 2022 to RMB0.69 in 2023, RMB0.66
in 2024, and RMB0.55 in the ten months ended October 31, 2025, representing an overall reduction of
over 46%. The cost optimization measures implemented include: (1) we continuously reduce the chip
die size through R&D and process iteration. The size has evolved from 2.8mm × 2.8mm for the
first-generation portable power amplifier audio chip to the current 1.58mm × 1.98mm. Concurrently, we
adopt new chip fabrication processes, transitioning from the initial 180nm BCD process to 90nm BCD,
and to the latest 65nm process adopted in 2024, leading to continuous optimization of the per-unit chip
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cost; and (2) as the primary components of cost of sales are wafers, chip packaging, and testing, we
optimize our supply chain by selecting suppliers based on quality, market position, and price. With
expanding procurement scale, we have recently obtained quotations from a new wafer fab and a new
packaging/testing supplier, which are approximately 35% and 10% lower, respectively, than quotations
from existing suppliers.
We have achieved a consistent reduction in our per-chip production cost through continuous
improvements in our fabrication process. We have accomplished such cost reduction primarily by
advancing our chip technology node and reducing the physical chip area. For instance, by migrating
from 180nm to 90nm and subsequently to 65nm process nodes, we have significantly reduced the size
of our chips. In our PA audio chip product line, the chip area has been reduced by 61%. This allows us
to produce approximately 20,000 chips from a single 12-inch wafer, compared to only about 7,500
chips previously, dramatically lowering the cost per chip. Furthermore, we have updated our wafer
processing technology by reducing the number of required mask layers. While our average selling
prices have remained relatively stable, the consistent reduction in per-unit cost has directly contributed
to the improvement in our gross profit margin. As a direct result of these process optimizations, our
average cost per chip has decreased from RMB1.02 in 2022 to RMB0.59 in the first half of 2025. We
expect these fabrication advancements to continue to support our improving gross margin going
forward.
Efficient sales organization brings breakthroughs in our commercialization progress and robust
potential orders
We established sales and service teams in Shanghai (Headquarters), Shenzhen, Beijing, Xi’an, and
South Korea to accelerate revenue growth. This multi-center operational structure enhanced operational
efficiency, market penetration and client service efficiency, driving higher revenue. Our sales teams
cover specific geographic regions, including South Korea, Northern China, the Pearl River Delta, and
Northwestern China, enabling direct engagement with customers and potential customers to identify
market opportunities and secure new orders. They also provide timely commercial and technical
support, ensuring rapid response to customer needs and enhancing customer retention. For example, we
set up the sales center in South Korea in 2021 to promote the foreign market, and successfully acquired
a key international KA customer with revenue reaching more than RMB400 billion in the third quarter
of 2025 as a direct customer since 2022, with revenue from this customer growing from RMB5.0
million in 2022 to RMB21.4 million for the ten months ended October 31, 2025. Similarly, our sales
team in Shenzhen expanded to seven members in 2021, secured another key KA client, contributing to
revenue growth from RMB0.02 million in 2022 to RMB17.1 million for the ten months ended October
31, 2025. Besides, the international multi-center operational structure reduced selling and marketing
expenses as a percentage of revenue to 13.4% in 2022, 12.6% in 2023, 5.9% in 2024, and 6.0% for the
ten months ended October 31, 2025.
In addition, we have rapidly advanced our commercialization efforts and holds a substantial order
backlog. The number of chips shipped increased from 118.3 million in 2022 to 470.1 million in 2024,
with 405.1 million chips shipped in the ten months ended October 31, 2025. In the NEV market, we
have secured an indicative order exceeding RMB37.2 million from the world’s largest seller of NEVs in
2024.
Efficient administrative operations
We implemented OA administrative system, online working system and adopted paperless and
other working policies to increase administrative efficiency to ensure revenue growth and the decrease
of administrative expenses. In 2022, 2023, 2024 and the ten months ended October 31, 2025, our
administrative expenses were 14.0%, 13.6%, 5.5% and 7.2% of our revenue for the same periods,
respectively, with listing expenses excluded.
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Development of products
We have consistently focused on technological iterations of our power amplifier audio chips to
enhance their performance. Our advancements are demonstrated through key technical parameter
improvements.
For our low-power audio chips, we have upgraded the signal-to-noise ratio from 105 dB in the
initial FS1601 series to 119 dB in the latest FS1999 series. We have expanded the boost voltage range
from 6.0V-9.6V to 10V in the FS1987 series and 15V in the FS1986 series. We have reduced the chip
area from 2.8mm × 2.8mm to 1.58mm × 1.98mm. We have lowered the noise floor from 15µV-34µV to
7µV in the FS1816 series.
These upgrades enable our chips to deliver higher audio quality and efficiency. For example, in
customized products like the FS1816 series for a South Korea technology company with revenue
reaching more than RMB400 billion in the third quarter of 2025, we increased the signal-to-noise ratio
to 116 dB, expanded the boost voltage to 6.5V , reduced the noise floor to 7µV , and raised the output
power to 2.4W, while incorporating an advanced power function to lower energy consumption. This
progress supports the integration of our chips into broader applications and improves their
competitiveness.
Specific initiatives for gross profit margin improvement
During the Track Record Period, excluding the industry-wide impact in 2023, our gross profit per
chip, calculated as the selling price per chip minus the cost per chip, increased steadily. It rose from
RMB0.08 per chip in 2022 to RMB0.10 per chip in 2024 and further to RMB0.14 per chip in the ten
months ended October 31, 2025. This represents an increase of 23.5% in 2024 compared to 2022 and a
further increase of 39.7% in the ten months ended October 31, 2025 compared to the full year 2024.
This trend drove the overall recovery of our gross profit margin. We expect the gross profit per chip to
continue increasing, supported by the optimization of our revenue structure, cost reduction initiatives,
and improvements in operational efficiency.
Concurrently, and synergistic with the increase in gross profit per chip, our chip shipment volume
grew period-on-period during the Track Record Period. Shipments increased from 118.3 million chips in
2022 to 470.1 million chips in 2024, with 405.1 million chips shipped in the ten months ended October
31, 2025. The simultaneous growth in shipment volume and gross profit per chip is expected to drive a
further increase in our total gross profit.
During the Track Record Period, the growth rates of our revenue and chip shipment volume
significantly outpaced the growth rate of our cost of sales, excluding the industry-wide impact in 2023.
This reflects our improving profitability, driven by our expanding operational scale, optimized revenue
mix, and technological iterations.
EMPLOYEES
As of the Latest Practicable Date, we had 141 employees, among them, 134 employees held a
bachelor’s degree or above, accounting for 95.0% of our total employees, and 68 employees held a
master’s degree of above, accounting for 48.2% of our total employees. Most of our employees are
based in China, primarily located at our headquarters in Shanghai. The following table sets forth a
breakdown of our employees by function as of the Latest Practicable Date.
Number of
employees
Research and development .......................................... 88
General administration and management ................................ 16
Sales and marketing ............................................... 26
Procurement, delivery and quality control ............................... 11
Total .......................................................... 141
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Our success deeply rests with our ability to attract, retain and motivate qualified talents, with the
belief that our high-quality talent pool is one of our core strengths and competitive advantages. We
recruit talents, with high standards and rigorous procedures and through various methods, including
online recruitment, internal referrals, and third-party recruiters, to select the best-fit personnel for the
corresponding positions in response to various talent demands. We offer competitive remuneration
package to our employees, which are generally based on their qualifications, industry experience,
position and performance. We regularly evaluate the performance of our employees and reward
well-performing employees with bonus and promotion. In addition, we provide training programs to our
employees, including corporate-wide and department-specific trainings to improve their professional
knowledge and management skills, and keep them abreast with market developments.
As required under PRC labor laws, we enter into individual employment contracts with our
employees covering matters such as wages, bonuses, employee benefits, workplace safety, non-compete
arrangements, and grounds for termination. In addition, we generally enter into standard confidentiality
agreements with our key employees. As required under PRC laws and regulations, we participate in and
make contributions to social insurance, including pension, medical, maternity, work-related injury and
unemployment, and housing provident fund. During the Track Record Period, we did not make adequate
contributions to the social insurance and housing provident funds with respect to certain of our
employees as required by the relevant PRC laws and regulations. Furthermore, during the Track Record
Period, instead of making the contributions to the social insurance and housing provident funds on our
own for certain employees, we engaged third-party agencies to make such contributions, which was not
in strict compliance with applicable PRC laws and regulations. See “Risk Factors—Risks Relating to
Our General Operations and Industry—We may be required to make additional contributions of social
insurance fund and/or housing provident fund and late payments and fines under PRC laws and
regulations.”
We did not make full contributions to the social insurance and housing provident fund for the
relevant employees primarily because (1) many of our employees were not willing to bear the costs
associated with social insurance and housing provident funds and (2) some non-local employees chose
not to participate due to their short-term residency and the difficulty of transferring benefits between
cities. Our Directors believe that the incident described above would not have a material adverse effect
on our business and results of operations, considering that (1) we have obtained written confirmations
issued by certain relevant local social insurance and housing provident funds authorities that as of the
Latest Practicable Date, we were not subject to any administrative action or penalty imposed by the
relevant regulatory authorities with respect to our social insurance and housing provident fund
contributions; (2) as of the Latest Practicable Date, we had not received any notification from the
relevant PRC regulatory authorities requiring us to settle the deficit amount with respect to social
insurance and housing provident funds; (3) during the Track Record Period and up to the Latest
Practicable Date, we had not been subject to any administrative penalties, litigations and legal
proceeding, nor were we aware of any employee complaints or involved in any labor disputes with our
employees, with respect to social insurance and housing provident funds; and (4) we undertake to make
full contributions or to pay the shortfall within a prescribed time period if and when requested by the
competent government authorities. Furthermore, as advised by our PRC Legal Advisor, the risk is
remote that relevant local social insurance and housing provident funds authorities will impose
administrative penalty on us, and such that the incident described above would not have a material
adverse effect on our business and results of operations.
None of our employees are currently represented by labor unions. We believe that we maintain a
good working relationship with our employees, and we had not experienced any material labor dispute
or any difficulty in recruiting staff for our operations during the Track Record Period and up to the
Latest Practicable Date.
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INSURANCE
We consider our insurance coverage to be adequate as we have in place all the mandatory
insurance policies required by PRC laws and regulations and in accordance with the commercial
practice in our industry. Our employee-related insurance includes the social insurance and housing
provident fund as required by PRC laws and regulations.
However, in line with general market practice, we do not maintain any business interruption
insurance or keyman life insurance, which are not mandatory under PRC laws. We do not maintain
insurance policies covering damages to our products or our technological infrastructure. We provide
supplemental commercial insurance to our employees, such as accidental injury protection, medical
expense reimbursement, comprehensive maternity care, death benefits for disease-related fatalities, and
transportation accident coverage. During the Track Record Period and up to the Latest Practicable Date,
we had not made or been the subject of any material insurance claims. Any uninsured occurrence of
business disruption, litigation or natural disaster, or significant damages to our uninsured infrastructure
or facilities could have a material adverse effect on our results of operations. See “Risk Factors—Risks
Relating to Our General Operations and Industry— We may be required to make additional
contributions of social insurance fund and/or housing provident fund and late payments and fines under
PRC laws and regulations.”
PROPERTIES
As of the Latest Practicable Date, we operated our businesses through seven domestic leased
properties in Shanghai, Beijing, Xi’an and Shenzhen, with a total gross floor area of approximately
2,862.8 square meters. We also operated our overseas business through one leased property, with a
gross floor area of approximately 87.4 square meters, in Seongnam City, South Korea. All such
properties have been used for non-property activities as defined under Rule 5.01(2) of the Listing Rules
and are primarily used as office premises for our business operations. Our key lease agreements
generally have expiration dates ranging from July 2025 to July 2026. We plan to renew our leases or
negotiate new terms when the existing leases expire. All lessors are independent third parties. We did
not experience material difficulties in negotiating renewal of our leases with our landlords during the
Track Record Period and up to the Latest Practicable Date.
As of the Latest Practicable Date, none of the properties leased or owned by us had a carrying
amount of 15% or more of our consolidated total assets. Therefore, according to Chapter 5 of the
Listing Rules and section 6(2) of the Companies (Exemption of Companies and Prospectuses from
Compliance with Provisions) Notice (Cap. 32L of the Laws of Hong Kong), this prospectus is exempted
from compliance with the requirements of section 342(1)(b) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance in relation to paragraph 34(2) of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance which requires a valuation report
with respect to all our Group’s interests in land or buildings.
Pursuant to the applicable PRC laws and regulations, property lease agreements must be registered
with the local branch of the Ministry of Housing and Urban-Rural Development of the PRC ( ʕശɛ͏
ண௅ ). The registration of such leases will require the cooperation of our lessors.
As of the Latest Practicable Date, we had not obtained lease registration for seven of our leased
properties in China, primarily due to the difficulty of procuring our lessors’ cooperation to register such
leases. We will take all practicable and reasonable steps to ensure that such leases are registered. As
advised by our PRC Legal Advisor, the lack of the abovementioned registration of the lease agreements
will not affect the validity of such lease agreements, according to applicable PRC laws and regulations
as of the Latest Practicable Date. According to the relevant PRC laws and regulations, we may be
ordered by the relevant government authorities to register the relevant lease agreements within a
prescribed period, failing which we may be subject to a fine ranging from RMB1,000 to RMB10,000
for each non-registered lease. As of the Latest Practicable Date, we had not received any such request
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or suffered any such fine from the relevant government authorities. We undertake to cooperate fully to
facilitate the registration of lease agreements once we receive any requirements from relevant
government authorities.
LICENSES, APPROV ALS AND PERMITS
We are required to maintain various licenses, permits and approvals in order to operate our
business. We continually monitor our compliance with the requirements related to licenses, permits and
approvals in order to ensure that we have all such licenses, permits and approvals which are necessary
to operate our business. Our PRC Legal Advisors have advised us that during the Track Record Period
and up to the Latest Practicable Date, we had obtained all licenses, permits and approvals necessary to
conduct our operations in all material respects from the relevant government authorities in China, and
such licenses, permits and approvals remained in full effect.
The following table sets out a list of material licenses, permits and approvals currently held by us.
License/permit/approval Holder Granting authority Grant date Expiry date
Consignor and
Consignee of Import
and Export Goods ..
Our Company Yangshan
Customs
29 September
2016
Long-term
Consignor and
Consignee of Import
and Export Goods ..
Shanghai
FourSemi
Huxu Customs 26 August 2016 Long-term
Consignor and
Consignee of Import
and Export Goods ..
Shenzhen
FourSemi
Fuzhong Customs 19 July 2024 Long-term
A W ARDS AND RECOGNITIONS
During the Track Record Period and up to the Latest Practicable Date, we received a number of
awards and recognitions in connection with our business. Some of the significant awards and
recognitions we have received are set forth below.
Awards and Recognition Awarding Parties Y ear of Award
High-tech Enterprise ( ৷อҦஔΆุ ) . Shanghai Municipal Science and
Technology Commission (ኪҦ
ึ), State Taxation Administration
Shanghai Municipal Office (೼ਕᐼ
҅ɪऎ̹೼ਕ҅ )dShanghai Municipal
Finance Bureau (҅ )
2022
2022 Annual Pudong New Area
Innovation and Entrepreneurship
Award (2022อਜ௴อ௴
ุᆤ) ......................
Shanghai Pudong New Area Government
(ִ݁)
2022
China IC Power List Annual Award
for Emerging Companies ( ʕ਷IC
อቚʮ̡ᆤ ) ........
China Semiconductor Investment Alliance
(ʕ਷̒ኬ᜗ҳ༟ᑌຑ )
2022
Deep Tech Sector in Venture Capital
Venture 50 (Ҧ Venture
50) ........................
Zero2IPO Group (௴ุ), PEdaily.cn
(ޢ)
2023
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Awards and Recognition Awarding Parties Y ear of Award
National Specialty and New Little
Giant Enterprise (ॴਖ਼ၚतอ
ʃ̶ɛΆุ ) .................
Ministry of Industry and Information
Technology of the PRC ( ʕശɛ͏΍ձ਷
ʷ௅ )
2023
Shanghai Specialized, Refined,
Distinctive and Innovative
Enterprise ( ɪऎ̹ਖ਼ၚतอΆ
ุ) ......................
Shanghai Municipal Commission of
Economy and Informatization ( ɪऎ̹຾
ึ )
2023
Annual Automotive-Grade Chip
Technology Breakthrough Award
(ॎᆤ ) ......
Semiconductor Investment Alliance ( ̒ኬ
᜗ҳ༟ᑌຑ ), Ijiwei ( ฌණฆ)
2024
TRANSFER PRICING
We have engaged in material cross-border related-party transactions during the Track Record
Period, according to the transfer pricing analysis report. Specifically, our Company and Fourier
Technology conducted recurring transactions involving: (1) sales of wafers and chips from our
Company to Fourier Technology, priced either at cost (for wafers) or approximately the final third-party
customer selling price (for chips); and (2) sales of processed chips from Fourier Technology to our
Company under specific circumstances, priced at the cost of wafers plus service fees paid by Fourier
Technology to subcontractors on behalf of our Company.
Our Company performs the core value-creating functions, including research and development,
production oversight, quality control, and sales negotiations, and consequently bears the significant
risks and owns the key intangibles. Fourier Technology performs limited functions, acting as a nominal
contracting party with customers and certain subcontractors, and providing after-sales services, and
bears minimal risk. The pricing of these transactions reflects these functional and risk profiles. Sales of
wafers from our Company to Fourier Technology are priced at cost, while sales of chips are priced at
approximately the final third-party customer selling price, with our Company retaining the substantive
profit or loss from the ultimate sale. Sales of processed chips from Fourier Technology back to our
Company are priced at the cost of wafers plus the service fees paid by Fourier Technology to
subcontractors on our Company’s behalf.
These transactions represented significant revenue streams. In 2022, 2023, 2024 and the ten
months ended October 31, 2025, wafer sales from our Company to Fourier Technology were RMB37.9
million, RMB27.2 million, RMB19.3 million and RMB10.2 million, respectively, and chip sales
amounted to RMB59.0 million, RMB83.7 million, RMB222.6 million and RMB190.9 million in the
same periods, and sales from Fourier Technology back to our Company of processed chips under
specific arrangements amounted to RMB9.1 million, RMB24.9 million, RMB21.0 million and RMB16.3
million in the same periods.
Our transfer pricing advisor is of the view that the risk of these arrangements in violating the
arm’s length principle under Hong Kong and PRC transfer pricing rules is remote, and that the transfer
pricing arrangements fundamentally comply with the arm’s length principle, in accordance with the
below basis.
In accordance with the transfer pricing analysis prepared by our transfer pricing advisor, the
transactional net margin method was selected as the most appropriate transfer pricing method and the
full cost mark-up ratio (“ FCMU ratio ”) were selected as the most appropriate profit level indicator,
respectively, to assess if the related-party transactions conducted between the relevant companies are
carried out on an arm’s length basis. A set of samples with population size of 16 comparable companies
were selected from OSIRIS database, a database generally accepted by tax authorities, and was adopted
for the transfer pricing benchmarking analysis from 2022 to 2024. The sample size and benchmarking
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analysis were generically in line with standard procedures accredited by tax authorities of relevant
jurisdictions. Of these 16 selected comparable companies, 5,10 and 11 companies were loss-making in
2022, 2023 and 2024 respectively. Our transfer pricing advisor specifically reiterate that profitability or
operating performance is not the selection criteria in all dimensions. Based on the benchmarking
analysis performed, (1) the FCMU ratio of our Company computed in 2022 and 2023 were -28% and
-36% respectively, which were below the minimum of the average FCMU ratio for the comparable
independent third parties; and (2) the FCMU ratio of our Company computed in 2024 was -11%, which
was below the lower range, but above the minimum of the average FCMU ratio for the comparable
independent third parties. Having said, our Company bears the (1) core functions in respect of the
transaction, including R&D, production oversight, quality control, sales negotiation, and (2) significant
risks, including R&D failure, quality, inventory, and our Company owns key intangibles. While Fourier
Technology performs limited functions, such as nominal contracting, after-sales service, and bears
minimal risk. Consequently, the pricing model, where our Company records substantial profit or loss on
ultimate sales for the Track Record Period via our transactions with Fourier Technology, aligns with the
economic substance and value creation within our Company. The synchronized losses recorded by both
entities stem directly from actual and genuine economic losses on underlying end-customer sales
instead of any purposefully profit-shifting strategies to be combated by Hong Kong and PRC transfer
pricing rules, and the underlying transfer pricing arrangements are neither tax driven nor for the
purpose of obtaining any tax benefit.
Crucially, however, comparable independent third parties data revealed the entire semiconductor
industry in comparable jurisdictions generally experienced widespread losses from 2022 to 2024, with
the benchmarked average FCMU showing negative values from 2022 to 2024 at the minimum, lower
quartile, and median levels. These overall loss-making industrial contexts critically provide an impartial
and reasonable commercial explanation for our Company’s performance, which was substantially
attributable to high R&D costs, indirect operating expenses, and intense price competition inherent in
our business operations.
Our Company’s losses reflect genuine market conditions and our operational reality rather than
being comprehended as any strategies of shifting any profits to any lower-tax jurisdictions for obtaining
advantage from any tax perspectives. The risk of tax authorities making significant transfer pricing
adjustments to the profits or losses from 2022 to 2024 of either our Company or Fourier Technology
based on these transactions is remote.
In addition, transfer pricing analysis is not applicable for the ten months ended October 31, 2024
and 2025, since (1) the relevant tax authorities generically conduct investigations and impose tax
adjustments, if applicable, on a taxpayer in response to its transfer pricing matters on a yearly basis,
and (2) there might be seasonal fluctuations that could affect the financial performance of Fourier
Technology for the ten months ended October 31, 2024 and 2025, as compared to its full year financial
performance, and thus it would therefore be inappropriate to conduct a formal transfer pricing
benchmark study for Fourier Technology for the subject periods by using data of the comparable
companies which are obtained on a yearly basis.
LEGAL PROCEEDINGS AND COMPLIANCE
Legal Proceedings
We have been and may from time to time continue to be, a party to various legal, arbitration or
administrative proceedings arising in the ordinary course of our business.
Our patent infringement lawsuit
We are currently defending a patent infringement lawsuit initiated by a competitor in the
semiconductor industry. The lawsuit concerns the competitor’s invention patent titled “Open-Loop
Charge Pump”. On August 22, 2023, the plaintiff filed a lawsuit with the Shanghai Intellectual Property
Court against our Company, alleging that three of our chip models—FS1512N-M, FS1512N, and
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FS1512GN—infringe its patent rights. The plaintiff sought a declaration of infringement, an injunction
to cease manufacturing, selling and offering for sale the allegedly infringing products, monetary
damages of RMB10 million, and reimbursement of legal fees and expenses of RMB0.5 million. The
plaintiff voluntarily withdrew this lawsuit on its own initiative. We did not negotiate with the plaintiff
or enter into any settlement agreement regarding this matter. On July 28, 2025, the plaintiff
recommenced legal proceedings against our Company. Under PRC law, because the plaintiff withdrew
the original case before any court judgment, the plaintiff is permitted to file a new lawsuit on the same
matter. The grounds for the plaintiff’s claim in the new case remain substantially the same, alleging that
the same chip models infringe its patent ZL201810038898.X and seeking similar relief, including an
injunction, monetary damages of RMB10 million, and reimbursement of legal fees and expenses of
RMB0.5 million. The court has scheduled the first hearing of the new case on April 27, 2026.
As part of our litigation strategy, we filed an invalidation request against the plaintiff’s patent
with the China National Intellectual Property Administration (“ CNIPA”). CNIPA issued a decision
maintaining the patent’s validity. On March 5, 2025, we initiated an administrative litigation before the
Beijing Intellectual Property Court seeking to overturn CNIPA’s decision. On December 24, 2025, the
court served us its administrative judgment, which upheld CNIPA’s decision. On January 7, 2026, we
appealed this first-instance judgment to the Supreme People’s Court, reiterating our position that the
patent should be invalidated.
The three implicated chip models (FS1512N-M, FS1512N and FS1512GN) are charge pump chips
launched during our early stage and are not our core products. We do not expect to generate significant
future revenue or gross profit from these products, as they are not core products and their gross margins
during the Track Record Period were relatively low. For 2022, 2023, 2024 and the ten months ended
October 31, 2025, revenue generated from these products amounted to RMB11.4 million, RMB14.6
million, RMB32.0 million and RMB10.4 million, respectively, representing 8.7%, 9.6%, 9.0% and 3.7%
of our total revenue for the respective periods. Gross profit contribution from these products for the
same periods was RMB1.6 million, RMB0.1 million, RMB3.2 million and RMB0.5 million,
respectively, representing 7.2%, 1.7%, 6.4% and 1.0% of our total gross profit for the respective
periods. Given the rapid performance iteration of audio chips in consumer electronics applications,
sales volume of these specific models peaked in 2024 and has since declined rapidly as market demand
has shifted to newly iterated products.
We have also obtained an appraisal report issued by a qualified judicial appraisal center, which
concludes that the technical features of our implicated products are neither identical nor equivalent to
those covered by the plaintiff’s patent. Material technical differences exist between our products’
technical solutions and the patented claims. In particular, when the output voltage exceeds a threshold
voltage, our accused chips enter a high-impedance mode, which is functionally distinct from the
“charging phase” described in the patent claims. In addition, our products utilize a single reference
voltage and do not incorporate the “upper threshold voltage” or “lower threshold voltage” as defined in
the patent. A critical difference also exists in the peak current limiting mechanism, as the function in
our chips is an inherent characteristic of the circuit switches and operates independently, unlike the
patent’s described method which involves a control circuit based on an over-voltage protection signal to
activate a peak current control circuit that only limits current during a single pulse signal period. Our
litigation advisor, Fangda Partners, is of the view that, based on the evidence currently submitted by the
parties and information confirmed by us, they have reasonable grounds to believe the accused products
do not fall within the scope of protection of the plaintiff’s patent, so that the likelihood of our
non-infringement defense against the claim is high.
Based on the technical information, our own technical analysis, the conclusions of the appraisal
report, and the advice of our litigation advisor, we believe that the technical solutions of our implicated
products are neither identical nor equivalent to the patented claims, and that we have not infringed the
plaintiff’s intellectual property rights. However, we cannot provide assurance regarding the final
judgment of the court. Based on the claims in the plaintiff’s complaint, the maximum amount we may
be liable for is RMB10.5 million, comprising RMB10.0 million for monetary damage and RMB0.5
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million for reasonable expenses. In a worst-case scenario where our defense is unsuccessful, we would
be subject to a permanent injunction preventing the manufacture, sale and offer for sale of the three
specific chip models implicated in the litigation. Given the minimal contribution of these early-stage
products to our total revenue and gross profit, we believe this outcome would not materially affect our
overall business or financial condition.
Compliance
We are subject to a number of regulatory requirements and guidelines issued by the regulatory
authorities in China. During the Track Record Period and up to the Latest Practicable Date, we did not
commit any material non-compliance of the laws and regulations, or experience any systemic
non-compliance incident which, taken as a whole, in the opinion of our Directors, is likely to have a
material adverse effect on our business, results of operations and financial condition. As advised by our
PRC Legal Advisors, during the Track Record Period and up to the Latest Practicable Date, we had
complied with the relevant PRC laws and regulations in all material respects.
Social Insurance and Housing Provident Fund
As required under PRC laws and regulations, we participate in and make contributions to social
insurance, including pension, medical, maternity, work-related injury and unemployment, and housing
provident fund. During the Track Record Period, we did not make adequate contributions to the social
insurance and housing provident funds with respect to certain of our employees as required by the
relevant PRC laws and regulations. We estimate that the shortfall of social insurance and housing
provident fund contributions as of December 31, 2022, 2023, 2024 and October 31, 2025 was
approximately RMB3.7 million, RMB3.8 million, RMB3.6 million and RMB3.0 million, respectively,
which we believe would not have a material adverse effect on our business. Failure to pay the
outstanding social insurance contributions and late payment surcharges as required by the relevant
government authorities within the prescribed time limit may subject us to a maximum fine of three
times the amount in arrears. However, if we are instructed by the competent authorities to make such
payments, we will comply within three months or a shorter term specified by competent authorities and
do not expect to incur any additional penalties. As a result, our Directors are of the view that the
non-compliance in connection with the inadequate contributions to the social insurance and housing
provident fund would not have a material adverse impact on our business, financial condition or results
of operations.
Furthermore, during the Track Record Period, instead of making the contributions to the social
insurance and housing provident funds on our own for certain employees, we engaged third-party
agencies to make such contributions, which was not in strict compliance with applicable PRC laws and
regulations. We made such arrangement primarily because these employees preferred to have their
social insurance and housing provident fund contributions made in their cities of habitual residence,
which are different from the cities where our operating entities are registered. As of the latest
practicable date, we have, through these third-party agencies, made full and timely social insurance and
housing provident fund payments for these employees in compliance with applicable PRC laws and
regulations during the track record period. If the relevant government authorities determine that the use
of third-party agencies for making these contributions is non-compliant, or if such an agency fails to
make the payments in accordance with PRC laws and regulations, we may be held liable for failing to
fulfill our statutory contribution obligations as an employer. This could result in regulatory orders to
make retroactive payments, late payment surcharges, and administrative fines. Should the competent
authorities require us to rectify the situation within a specified period, we would promptly do so and we
do not anticipate incurring material additional penalties.
To monitor our compliance with relevant laws and regulations in respect of social insurance and
housing provident fund contributions, we have taken and will take the following internal control
measures and actions to rectify the non-compliance:
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 we will immediately provide training to our human resources department to not enter into
any arrangements with our employees for the waiver of social insurance contributions; and
 we will immediately designated our human resources department to review and monitor the
reporting and contributions of social insurance and housing provident funds; and
 we will consult our PRC Legal Advisor on a regular basis for advice on relevant PRC laws
and regulations to keep us abreast of relevant PRC laws and regulatory developments,
including but not limited to PRC laws and regulations in relation to social insurance and
housing provident funds, and will provide relevant employees with legal compliance
trainings relating to the same; and
 in the event that competent government authorities require us to make the contributions to
the social insurance and housing provident funds within a stipulated time period or make
supplementary contributions and late fees, we will duly comply in a timely manner.
As advised by our PRC Legal Advisor, with the current policies, provided that there are no
material changes to the regulatory landscape and enforcement practices of local governments, and under
the circumstances that neither our Company nor our domestic subsidiaries are subject to employee
complaints or reports regarding such matters, the risks of our Company and our domestic subsidiaries
being subject to large-scale retroactive collection or penalties by relevant authorities for underpayment
of social insurance and housing provident fund contributions, as well as third-party payment
arrangements, are remote. Based on the foregoing, our Directors are of the view that no contingent
liabilities have been recognized.
In addition, as advised by our PRC Legal Advisor, we confirm that the Interpretation II by the
Supreme People’s Court of the PRC on Legal Issues in the Trial of Labor Dispute Cases, which took
effect on 1 September 2025, does not impose material obligations on our Company. It reinforces the
existing mandatory requirements under the PRC Labor Law and Social Insurance Law by declaring any
agreement or commitment to waive social insurance contributions as invalid. This interpretation aims to
standardize judicial practice and does not alter the current regulatory framework or local enforcement
priorities.
Our Company and our PRC subsidiaries consistently adhere to applicable laws and regulations.
Given the absence of significant changes in policies or enforcement, and no employee complaints
regarding social insurance or housing fund contributions, we assess the risk of concentrated retroactive
collection or penalties for underpayment or third-party payment of social insurance as low. According
to the opinion of our PRC Legal Advisor, our Reporting Accountant is of the view that the
Interpretation will not lead to the creation of a provision or an increase in our maximum exposure.
International Sanctions
Based on the facts and information provided by us, our Sanction Counsel is of the view that, as of
the Latest Practicable Date, we have not engaged in any activities that, to their knowledge and based on
their assessment, would constitute a violation of applicable U.S. primary or secondary sanctions laws,
or comparable international sanctions regimes. We do not operate in, or maintain direct customer
relationships with parties located in, or affiliated with, comprehensively sanctioned jurisdictions such as
Iran, North Korea, or Russia.
In addition, our Sanction Counsel is of the view that, while certain affiliates of Semiconductor
Manufacturing International Corporation (“SMIC”) are subject to U.S. sanctions and export control
restrictions, against this broader sanctions compliance background, our Sanction Counsel has also
considered whether our historical and ongoing transactions involving certain affiliates of SMIC could
give rise to sanctions or export control risks. Certain SMIC affiliates have been included on (1) the
Bureau of Industry and Security of the U.S. Department of Commerce (“BIS”) Entity List with
Footnote 5 (FN5) designation, (2) the U.S. Department of Defense (now Department of War) List
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pursuant to section 1260H of the National Defense Authorization Act (the “1260H List”), and (3) the
U.S. Treasury’s Non-SDN Chinese Military-Industrial Complex Companies List (the “CMIC List”), and
are therefore subject to specific U.S. sanctions and export control restrictions. The relevant transactions
between us and SMIC or its affiliates, as suppliers to provide wafer to us, are not, under the current
laws and regulations, prohibited, primarily because (1) such transactions do not involve U.S.
Department of Defense procurement, nor do they fall under restrictions associated with the CMIC List
or Section 1260H of the U.S. National Defense Authorization Act; (2) the design files (in GDSII
format) provided by us were developed entirely within mainland China, without the use of U.S.-origin
controlled items or software, and are therefore not considered subject to the U.S. Export Administration
Regulations (“EAR”) under current interpretations; and (3) to the best of our knowledge, the resulting
mature-node wafers (180nm−90nm) produced by SMIC can be classified as EAR99 and not intended for
any prohibited end-users or end-uses under applicable export control laws.
Entity List FN5
Entity List FN5 designated parties are subject to restrictions on the receipt of item that are subject
to the U.S. Export Administration Regulations (“ EAR”). In this context, our Sanctions Counsel has
assessed the relevant transactions between us and SMIC or its affiliates, which act as wafer foundry
suppliers to us. Based on the information provided, such transactions are not prohibited under current
U.S. laws and regulations.
The conclusion is primarily based on the fact that the design files (in GDSII format) provided by
us were developed entirely within mainland China, without the use of U.S.-origin controlled technology
or software, and therefore are not considered items “subject to the EAR” under prevailing regulatory
interpretations. To the best of our knowledge, the resulting mature-node wafers (180nm–90nm)
manufactured by SMIC are classifiable as EAR99 and are not intended for any prohibited end-users or
end-uses under applicable export control laws.
FN5 Foreign Direct Product Rule and SME Foreign Direct Product Rule
Further, our Sanctions Counsel has considered the potential applicability of the FN5 Foreign
Direct Product Rule and the Semiconductor Manufacturing Equipment (“ SME”) Foreign Direct Product
Rule. These rules target certain foreign-produced commodities specified under ECCN Category 3B,
namely “test,” “inspection,” and “production” equipment.
A GDSII file is a standardized data file format that serves as a digital blueprint for integrated
circuit design and does not constitute “equipment,” nor does it fall within the scope of ECCN Category
3B as defined under either the FN5 FDP Rule or the SME FDP Rule. Accordingly, our Sanctions
Counsel is of the view that the provision of such design files does not fall within the scope of the
controlled items covered by these rules.
1260H List and CMIC List
In addition, our Sanctions Counsel has assessed the implications of the 1260H List and the CMIC
List. The 1260H List imposes restrictions on U.S. Department of Defense (now Department of War)
procurement from listed entities, with direct and indirect prohibitions becoming effective on June 30,
2026 and June 30, 2027, respectively. Separately, U.S. persons are restricted from making certain
investments in entities designated on the CMIC List.
Our transactions with SMIC do not involve U.S. Department of Defense procurement, U.S.
persons, or U.S. person investment activities, nor do they otherwise fall within the prohibitions
associated with the 1260H List or the CMIC List.
In light of the foregoing, and based on current applicable laws, regulations and publicly available
guidance, our Sanctions Counsel is of the view that we are not subject to any material sanctions or
export control risks arising from our transactions with certain affiliates of SMIC.
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Our Sanction Counsel is of the view that, based on their review of our representations and
supporting materials, the design files delivered by us are not subject to the EAR because (1) they were
entirely designed in mainland China; (2) they do not incorporate, commingle with, or bundle any
U.S.-origin IP or controlled content; (3) they are not subject to ECCN classification nor any EAR
Foreign Direct Product (FDP) rules, including those under Footnote 5 or the SME FDP rule.
In conclusion, based on the foregoing and the current applicable laws and guidance, our Sanction
Counsel is of the view that no EAR filings are required in respect of the delivery of such files, and that
there is no known penalty risk arising from such transactions under the EAR as currently enforced.
Annual Related Party Transaction Reports
We engaged professional transfer pricing expert to conduct a comprehensive review of our tax
compliance and related party transaction matters, during which we identified that the relevant related
party transaction report had not been submitted in a timely manner. Our administrative staff in the PRC
unintentionally failed to submit our annual related party transactions reports for the years 2022, 2023
and 2024 by the statutory deadlines due to a misunderstanding of the relevant legal requirements and
insufficient staff training, as the relevant personnel were not fully aware of the filing obligation until
advised by the expert. According to our PRC Legal Advisor, the maximum potential administrative
penalty for such late filing is RMB10,000 per report under the EIT Laws and the Law of the PRC on
the Administration of Tax Collection. Consequently, the aggregate potential maximum financial penalty
for this non-compliance during the Track Record Period is RMB30,000.
We have subsequently taken remedial action to rectify this oversight. The annual related party
transactions report for the year 2024 was submitted to the relevant PRC tax authority on August 25,
2025, and the outstanding reports for the years 2022 and 2023 were submitted on November 18, 2025.
As confirmed by our Directors, as of the Latest Practicable Date, no administrative action or penalty
has been imposed, demanded, or is pending against our Company by any regulatory authority in relation
to these late filings.
Given that the late filings were unintentional, all outstanding reports have been retrospectively
submitted, the potential financial penalty is not substantial in the context of our overall financial
condition and operations, and no penalties have been levied to date, we consider this to be an
immaterial non-compliance matter.
To ensure ongoing compliance with the applicable transfer pricing regulations, we have adopted
the following measures to ensure ongoing compliance with the relevant transfer pricing laws and
regulations in Hong Kong and the PRC:
(i) we shall maintain the engagement of an external tax adviser to advise us on transfer pricing
matters annually. The most appropriate transfer pricing method and price and profit level
indicator should be selected according to analysis prepared by the external tax adviser.
(ii) training will be provided to our senior management relating to updates on relevant transfer
pricing laws and regulations in the relevant jurisdictions;
(iii) our financial manager and financial controller should review all reporting forms before
submitting to the relevant tax authority;
(iv) our Directors and financial controller will make sure the transfer pricing arrangement is
aligned with each party’s value contribution;
(v) our Directors and financial controller will review the terms of the material inter-company
transactions and regularly monitor our transfer pricing policy to ensure the transactions are
carried out on arm’s length basis; and
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(vi) our financial manager and financial controller will document and file relevant supporting
documents of value contribution of each party for risk management, including but not
limited to responsibilities planning, correspondences, performance and outcome assessment
of relevant work.
In addition, we have already formulated the Connected Transaction System, which establishes
procedural standards including the definition of connected persons, the definition and management of
connected transactions, as well as the decision-making and disclosure of connected transactions. We
also regulate the management procedures for the ongoing connected transactions and the newly
occurring connected transactions. Our internal control consultant is of the view these internal control
measures are effective.
DATA SECURITY AND PRIV ACY
In the course of our business, we collect, store and process business data and transaction data. We
were not involved in any cross-border transmission of data or provision of data to third parties. As we
only make transactions with enterprises, we do not collect or process personal data. We believe that the
confidentiality, integrity, and availability of data are vital to our business operations. To mitigate data
security risks, we have implemented a comprehensive approach that includes data encryption, secure
data storage protocols, and strict transmission policies to ensure the confidentiality and integrity of
sensitive information.
Our internal data protection framework is designed to manage and control access to confidential
information effectively. We have established clear and detailed protocols that govern the use, storage,
and sharing of corporate data, ensuring that only employees with the appropriate authorization can
access sensitive information on a need-to-know basis. Employees are granted access to data strictly
according to their roles and are required to use this data solely for the performance of their job duties.
We implement specific measures to monitor and prevent unauthorized data access or leakage. We
apply data encryption across all systems and storage facilities to achieve strict control over sensitive
information and restrict access solely to authorized personnel. Our IT department configures automatic
encryption settings on all office computers, and as a result, employees can only access or edit files
using these secured devices, and any file transmission externally requires explicit managerial approval.
In addition, we conduct regular employee training sessions to enhance data privacy awareness.
Our employees are required to sign confidentiality agreements as part of their employment, which
strictly prohibit the unauthorized disclosure of any company-related confidential information. This
policy ensures that our employees understand the critical nature of safeguarding company data and are
held accountable for maintaining confidentiality.
To safeguard against data loss, we have implemented a robust backup system. We ensure that
backup copies are stored both locally and remotely, and regularly test our data restoration processes to
ensure the reliability of our backup system. In addition, we have established a disaster recovery
protocol to protect against potential system failures or catastrophic events. Multiple backup copies of
data are stored, ensuring that data can be quickly restored in the event of any technical issues, natural
disasters, or unforeseen circumstances.
During the Track Record Period and up to the Latest Practicable Date, we did not experience any
material data leakage or data loss, nor did we experience any material unauthorized use of customers’
or distributors’ information. Our PRC Legal Advisor is of the view that we have complied, in all
material aspects, with the relevant PRC laws and regulations in respect of data security and privacy
during the Track Record Period and up to the Latest Practicable Date. In addition, we exclusively focus
our use of AI on algorithm optimization. This application excludes any involvement of third-party data.
Our PRC Legal Advisor is of the view that we have complied, in all material aspects, with all relevant
laws and regulations for our use of AI.
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ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE
We are dedicated to fostering long-term positive impacts on the environment, society, and
governance (“ ESG”) for our stakeholders, including customers, suppliers and the communities
influenced by our operations. Our Board of Directors oversees the ESG strategy, ensuring that we
operate ethically, responsibly and in compliance with all applicable laws. Following the Listing, we will
comply with the requirements of ESG reporting and publish ESG report on an annual basis in
accordance with the requirements of Appendix C2 to the Listing Rules. We will focus on ESG matters,
risk management and key performance indicators that have a significant impact on our business
operations as set out in Appendix C2 to the Listing Rules.
In line with global sustainable development trends, we are committed to creating a comprehensive
ESG governance framework. We integrate ESG factors into our overall strategy, long-term plans, key
decisions, and daily operations. We aim to generate economic value while fulfilling our social
responsibilities, protecting the environment, and ensuring our business growth aligns with sustainable
development goals. We firmly believe that robust ESG governance strengthens our corporate reputation
and market competitiveness, delivers long-term stakeholder value, and creates positive societal and
environmental impact. Through targeted initiatives, we seek to elevate employee environmental
engagement and advance our enterprise-wide contributions to conservation and decarbonization
objectives.
We accord strategic priority to employee professional advancement, delivering multifaceted
professional development pathways. We cultivate a diversely skilled workforce and instill an
intentionally inclusive corporate culture designed to foster synergistic collaboration and innovation
among cross-functional stakeholders.
We have enacted internal control frameworks and compliance architectures to fortify governance
transparency. Concurrently, we sustain proactive and open dialog with employees, customers, suppliers,
investors, and community constituents through deliberative feedback channels, enabling continuous
strategic recalibration of our ESG strategies.
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ESG Governance Structure
We implemented a comprehensive formal ESG governance framework to ensure systematic
oversight, strategic alignment, and effective operational execution. Under this structure:
 We established an integrated ESG management system to provide structured governance,
informed decision-making, and coordinated implementation of relevant work. Our Board
serves as the ultimate leadership and decision-making body for ESG matters. Our ESG team
is responsible for the day-to-day management, coordination, and advancement of ESG
initiatives. All employees are required to implement ESG-related tasks within their
functions.
 The specific responsibilities of the relevant parties are as follows:
(1) Our Board is responsible for reviewing, approving, and overseeing our ESG
management policies and approving our final ESG reports;
(2) Our ESG team is responsible for incorporating the directives and guidance of our
Board, facilitating internal and external collaboration, researching material topics,
managing the daily execution of ESG initiatives, and coordinating the preparation of
ESG reports; and
(3) All employees are responsible for implementing ESG tasks within their respective
scope in accordance with our overall plan and providing regular updates on progress.
 When necessary, we may engage specialized consultants or professional parties in relevant
fields to provide expert recommendations for advancing our ESG initiatives.
 Our Directors are empowered to provide opinions and suggestions regarding the fulfillment
of our ESG responsibilities. Our ESG team shall consolidate such feedback and submit
actionable resolutions to our Board for deliberation.
 We integrate ESG responsibilities into the management and decision-making processes. For
major investment decisions, robust social impact assessments serve as an integral component
of the decision-making framework for our Board.
 We plan to establish structured feedback mechanisms to ensure open and transparent
dialogue with our Shareholders prior to the Listing. Where necessary, specific feedback and
suggestions from our Shareholders may be collected through interviews, meetings, or
surveys to facilitate and enable continuous improvement in our ESG performance.
Potential Impacts of ESG-related Risks
Given the nature of our business, we do not produce any material generation of emissions and
wastes and cause severe pollution. However, we continuously monitor environmental and
climate-related risks that may impact our business, strategy and financial performance. Our Board and
team closely monitor and remain vigilant to identify any ESG-related risks in the short, medium and
long term. We seek to incorporate all relevant ESG related issues into the planning process of our
business and strategies.
We regularly check and analyze the carbon dioxide as a result of our business operations and we
strive to reduce our emissions to achieve a carbon neutral business. As a fabless company, we record
relatively low carbon emissions and no hazardous waste relating in our business operations. Our major
source of carbon emissions is caused by the chip design activities, corporate office and employee
operations and transportation. We strictly comply with laws and regulations, including the
Environmental Protection Law of the People’s Republic of China (جas well
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as other applicable requirements. If we fail to fulfill the aforementioned regulation and other related
policies, we may face legal, financial, operational and reputational consequences and as a result our
business will be affected negatively.
Strategies for Addressing ESG-related Risks
We have adopted various strategies and measures to identify, assess, manage and mitigate ESG
and climate-related risks, including but not limited to:
 reviewing and evaluating ESG reports of our company and comparable companies to identify
potential ESG-related risks in a timely manner.
 hosting meetings with our management team regularly to identify and report relevant ESG
materials.
 setting up warning systems for ESG-related risks, including the monitoring of threshold
numbers in relation to carbon emissions
The following sets forth our ESG-related measures to mitigate negative impact on our business,
strategy and financial planning:
 To mitigate the negative impact of our suppliers’ business operations, we enforce
environmental standards through binding supplier environmental agreements, requiring
suppliers to restrict hazardous substances in all delivered products, remove banned chemicals
from packaging materials, and prohibit controlled additives in manufacturing processes. We
believe such requirements ensure full compliance with the latest environmental regulations
in all of our target markets.
 To mitigate the negative impact of our suppliers’ business operations, we verify
environmental compliance by requiring accredited laboratory test reports for all
supplier-manufactured products. These reports must verify the absence of (1) prohibited
metals, including cadmium (Cd), lead (Pb), mercury (Hg) and hexavalent chromium
(Hex-Cr), (2) restricted halogens, including bromine (Br) and chlorine (Cl), and volatile
organic compounds. This protocol ensures full compliance with environmental protection
standards.
 To mitigate the negative impact of our corporate office and employee operations, we
implement active operational measures to reduce emissions, including (1) encouraging and
enforcing paperless operations, (2) auditing electronics shutdown for unused devices, and (3)
keeping the office temperature within the energy-saving range. In addition, we embed
environmental training into employee onboarding to drive ESG awareness. We plan to hold
information sessions with our employees to promote environmental awareness.
Metrics and Targets
We are committed to minimizing the environmental impact of our operations. Responsible
environmental management can lead to economic and environmental coexistence. Our Board holds
accountability for monitoring and assessing environmental, social, and climate-related risks and
opportunities. It is responsible for setting and approving our ESG policy and targets, conducting annual
performance reviews against these goals, and adjusting ESG strategies if significant deviations are
detected.
Our core business involves the R&D, design and sales of chips under a fabless model. The
primary raw materials we procure are wafers, and we outsource related packaging and testing processes
to external professional processing service providers. Neither our Company nor our subsidiaries are
directly engaged in manufacturing activities.
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The following table sets forth metrics on our electricity consumption during the Track Record
Period:
Metrics 2022 2023 2024
Ten months
ended
October 31, 2025
Electricity consumption . Total electricity
consumption
(kWh)
128,572 212,099 244,356 224,008
Electricity
consumption
per unit of
revenue (kWh
per million
RMB)
986 1411 688 798
Paper Consumption .... Total paper
consumption
(kg)
4,629.4 4,273.2 8,115.5 4,541.9
Paper
consumption
per unit of
revenue
(kg per million
RMB)
35.5 28.4 22.8 16.2
We are committed to implementing green and energy-saving practices and improving energy
efficiency. Based on our data for electricity and paper consumption in 2024, we plan to reduce our
electricity consumption per unit of revenue by 5% by 2027.
We perform a comprehensive corporate risk assessment at least annually, evaluating current and
emerging risks, including but not limited to ESG and strategic risks arising from disruptive factors such
as climate change. Risk mitigation decisions, whether through reduction, transfer, acceptance, or
control, are influenced by multiple considerations. Climate-related factors, including physical and
transition risks, will be integrated into our risk assessment framework and risk appetite determination.
Material risks and opportunities will be factored into our strategic and financial planning
processes. Following an annual review of environmental, social, and climate-related risks, as well as
our performance in addressing them, we may refine our ESG strategies and corporate governance
policies as necessary.
Energy Conservation Initiatives
We actively engage in energy conservation initiatives as part of our commitment to contributing to
societal environmental preservation efforts. Our initiatives include:
 Product Efficiency : we aim to design energy-efficient products to reduce overall power
consumption during use;
 Water Conservation : we enhance water conservation practices by promoting responsible
usage;
 Electricity saving : in the workplace, we implement the principle of “lights off when not in
use” to minimize unnecessary electricity consumption during operations;
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 Paper saving : we promote paper-saving practices by adopting electronic office processes to
reduce paper usage and ensure proper paper recycling;
 Green commuting : we encourage employees to adopt green and low-carbon commuting
practices, such as using public transportation; and
 Facility Optimization : we regulate air-conditioning temperatures in our office space to
minimize energy waste and improve operational efficiency.
Corporate Social Responsibility
We are committed to being responsible corporate citizens, continuously fulfilling corporate social
responsibility. We recognize the size and influence of our company and seek to utilize our influence in
a socially responsible manner. We actively encourage and support socially responsible initiatives and
promote the concept of corporate social responsibility throughout our company.
We are committed to giving back to society in various ways and contributing positively to the
community. We place great importance on talent development and have collaborated with universities to
establish talent training bases, providing practical opportunities for students to inspire their interest and
enthusiasm for technological innovation while nurturing more industry talent for society.
We actively recruit fresh graduates and assign them one-on-one mentors during the onboarding
process. Experienced employees are encouraged to offer guidance and support to new recruits,
providing the next generation of R&D talent with greater opportunities for learning and growth.
Supplier Management
We enforce rigorous and quantifiable environmental standards across our supply chain through a
binding Supplier Environmental Agreement. This agreement mandates that all supplier provided
materials, components, and finished products fully comply with the latest international environmental
regulations.
We require suppliers to adhere to clearly defined substance restriction thresholds, such as
cadmium not exceeding 20 ppm in organic materials and 70 ppm in inorganic materials, lead not
exceeding 100 ppm in organic materials and 800 ppm in inorganic materials, and mercury limited to
500 ppm. Additionally, all packaging materials must maintain total concentrations of lead, cadmium,
hexavalent chromium, and mercury below 80 ppm in accordance with EU Packaging Directive
94/62/EC.
To verify compliance, we mandate that suppliers submit third-party accredited laboratory test
reports for each product prior to sample approval, with each report valid for one year from the date of
issue. We perform routine screening analyzes based on predefined thresholds, for instance, 50 ppm for
cadmium in organic materials and 70 ppm in inorganic materials, to ensure ongoing adherence. Should
any non-conforming products be identified after delivery, suppliers must notify us within 24 hours and
undertake corrective actions within an agreed timeframe.
We maintain the right to conduct random sampling and testing. In cases of non-compliance, we
enforce predefined financial penalties, ranging from RMB1 million to RMB10 million depending on the
severity of the environmental breach, and may suspend procurement until full remediation is achieved.
These measures ensure quantifiable, auditable, and continuous alignment with our ESG objectives and
regulatory requirements across all operational and supply chain activities.
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Employee Well-being
Our employees are integral to our success. We are committed to providing a safe, inclusive, and
empowering workplace. We comply with laws and regulations in relation to labor employment in all
material aspects. We have also formulated internal management systems that stipulate provisions for
employee onboarding, attendance, transfer, performance appraisal, promotion, remuneration, incentives,
benefits and allowances.
We recruit talent based on the needs identified by our human resources department. We adhere to
the principles of openness, fairness, impartiality and transparency in our recruitment process. Through
various channels such as headhunters, online recruitment platforms and campus recruitment, we conduct
comprehensive evaluations of candidates based on their character, qualifications, abilities, experience
and educational background and select the best candidates.
We provide employees with competitive compensation and offer distinct career advancement paths
for technical and functional staff. We implement a performance evaluation system and motivate
employees through various measures, including salary adjustments, performance bonuses and equity
incentive plans.
We place great importance on employee feedback and have established a platform to collect and
process employee suggestions. Feedback is gathered and centrally coordinated by the human resources
administration center.
We have a diverse employee composition, and we prohibit any discrimination against employees
based on factors such as gender, age or educational background during the recruitment, employment,
and management processes. The table below sets forth our employee composition as of the October 31,
2025, in terms of gender, age and education level.
Percentage of
employees
By gender
Male .......................................................... 78.7%
Female ......................................................... 21.3%
By age group
35 and above .................................................... 50.7%
Below 35 ....................................................... 49.3%
By education level
Masters ........................................................ 46.3%
Undergraduates .................................................. 48.5%
Below Undergraduates ............................................. 5.1%
Total .......................................................... 100.0
We actively monitor evolving social expectations regarding workforce diversity and inclusion. Our
current employee profile includes a female representation of approximately 21.3% across the workforce.
The Board of Directors also incorporates gender diversity, featuring two female members. Management
also includes two female executives. We maintain a stable and experienced workforce, with employees
aged 35 years and above constituting 50.7% of the total as of October 31, 2025. We acknowledge
increasing social awareness and stakeholder focus on these demographic factors within corporate ESG
frameworks. We continue to assess these social trends and evaluate their potential influence on talent
acquisition, retention strategies, and workplace culture. We are committed to aligning our human capital
management practices with developing market expectations while leveraging the experience within our
existing workforce.
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IMPACT OF COVID-19
Our Directors are of the view that our business operations and financial performance were
unaffected by the COVID-19 outbreak during the Track Record Period. Our fabless operating model
insulated us from pandemic impacts as we do not manage manufacturing facilities or production
processes.
INTERNAL CONTROL AND RISK MANAGEMENT
Internal Control
We have designated responsible personnel in our Company to monitor the ongoing compliance by
our Company with the relevant PRC laws and regulations that govern our business operations and
oversee the implementation of necessary measures. We have adopted internal rules and policies
governing various aspects of our business operations and management, such as our sales practices,
R&D management, outsourced production, information system, legal compliance, investment and
financing, financial reporting and human resources.
We have engaged an independent internal control consultant to review our risk management and
perform an initial review in May 2025 in selected areas of our internal controls, including, among
others, financial reporting and disclosure controls, sales, accounts receivable and collection,
procurement, accounts payable and payment, cash and treasury management, assets management,
research and development, information technology general controls and compliance management. Our
internal control consultant put forward recommendations based on such review. We have implemented
rectification and improvement measures, as the case may be, in response to their findings and
recommendations. The internal control consultant performed follow-up procedures on our remedial
measures in June 2025 and did not identify any material deficiency in our internal control system.
Having considered the report prepared by our internal control consultant, our Directors confirmed that
all of the major recommendations provided by the internal control consultant have been followed and
corrective actions were taken accordingly to address our internal control deficiencies and weaknesses.
Our Directors are of the view that our enhanced internal control measures are adequate and effective to
ensure compliance with relevant laws and regulations going forward.
Internal control policies relating to intellectual property
We have established and maintained a robust system of enhanced internal control measures
designed to proactively prevent the infringement of intellectual property rights. Our practices are
formalized under our internal policies, including the Intellectual Property Management Procedures and
the Trademark Management Procedures.
At the outset of any new product research and development project, we implement a thorough
front-end screening process. We conduct comprehensive analyzes of competing technologies in the
market and perform detailed intellectual property searches. These steps allow us to compare our
proposed technical approaches and core performance indicators against existing patented technologies
to ensure our development work remains distinct and does not infringe upon the protected scope of
others’ rights. Furthermore, in our recruitment process for technical staff, especially for key R&D
positions, we carry out independent background verifications to confirm that new hires are not subject
to any non-compete obligations that could pose an infringement risk to our Company.
Our Intellectual Property Management Procedures institutionalize these preventive measures. They
mandate that prior to any significant technological innovation activity, such as the development of new
technologies, processes, or products, our legal department must collaborate with the relevant business
units to conduct or commission professional novelty searches and IP screenings. This process is
designed to align our activities with our intellectual property strategy, avoid redundant development,
and prevent potential infringement disputes. Based on the results of these searches and our internal IP
layout analysis, the responsible departments perform an infringement risk assessment to form an early
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warning. All technical solutions are subject to internal review by our Technical Committee, which
meets bi-monthly in patent deliberation sessions to decide on which inventions to submit to external
patent agents for filing.
Separately, our Trademark Management Procedures define clear responsibilities and a controlled
process for trademark management. The Marketing Department is responsible for initiatives related to
trademarks, including design and use; the Legal Department oversees normative usage, protection
strategies, and dispute resolution; and the Human Resources & Administration Department manages all
trademark filings and records. Any application for registration, renewal, or modification of a trademark
is initiated by the Marketing Department with assistance from the Legal Department, and all usage must
be strictly compliant to prevent unauthorized alterations or overreach.
Risk Management
We are exposed to various risks in the ordinary course of our business operations. Key operational
risks faced by us include, among others, our ability to respond to technological changes, competition in
the relevant industries, our ability to retain and grow our customer base and usage, our ability to
enhance or upgrade our existing solutions and introduce new ones, our ability to maintain and expand
our sales and distribution network, and our ability to successfully expand to and develop market
recognition in various industry sectors. See “Risk Factors” for disclosures on various risks we face. In
addition, we also face certain market risks, such as credit risk, liquidity risk and interest rate risk
related to our financials. See “Financial Information—Quantitative and Qualitative Disclosure of
Market Risks” for details. We have implemented policies and procedures for risk management in each
aspect of our operations, including administration of daily operations, data security, financial reporting
procedures, employee conduct and legal compliance. Our Board oversees and manages the overall risks
associated with our operations. We have established an Audit Committee to review and supervise the
financial reporting process and internal control system of our Group. See “Directors and Senior
Management—Board Committees—Audit Committee” for the qualifications and experience of these
committee members as well as a detailed description of the responsibility of our Audit Committee.
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OVERVIEW
As of the Latest Practicable Date, (1) Mr. Xu controlled 32.76% of the voting power at the
general meetings of our Company, comprising (i) 8.86% beneficially owned by him directly, (ii)
12.62% beneficially owned by Shanghai FourSemi Management, where Mr. Xu acted as its general
partner, (iii) 7.07% beneficially owned by Xiamen FourSemi Management, where Mr. Xu acted as its
general partner, and (iv) 4.21% beneficially owned by Xiamen FourSemi Chuangke, where Mr. Xu
acted as its general partner; and (2) Mr. Liu controlled 2.52% of the voting power at the general
meetings of our Company through the interests beneficially owned by him directly. Pursuant to the
Concert Party Agreement, Mr. Liu irrevocably agreed to, among others, act in concert with Mr. Xu and
follow his instructions in exercising his vote at the general meetings of our Company. Upon the Listing,
Mr. Xu and Mr. Liu will control 31.50% of the voting power at the general meetings of our Company
(assuming the Over-allotment Option is not exercised). Accordingly, Mr. Xu and Mr. Liu, together with
Shanghai FourSemi Management, Xiamen FourSemi Management and Xiamen FourSemi Chuangke will
be our controlling shareholders upon the Listing.
NO COMPETITION AND CLEAR DELINEATION OF BUSINESS
Our Controlling Shareholders have confirmed that as of the Latest Practicable Date, none of them
or any of their respective close associates had any interest in a business that competes or is likely to
compete, either directly or indirectly, with our business, which is subject to disclosure pursuant to Rule
8.10 of the Listing Rules.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Management Independence
Our business is primarily managed and conducted by our Board and senior management. Upon the
completion of the Listing, our Board will comprise of four executive Directors, two non-executive
Directors and three independent non-executive Directors. See “Directors and Senior Management” for
more information.
Our Directors believe that our Board and senior management is able to manage our business and
function independently from our Controlling Shareholders based on the following reasons:
(1) each of our Directors is aware of his/her fiduciary duties as a Director of our Company
which require, among other things, that he/she acts for the benefit and in the best interests of
our Company and does not allow any conflict between his/her duties as a Director and
his/her personal interest;
(2) in the event that there is a potential conflict of interest arising out of any transaction to be
entered into between our Group and our Directors or their respective associates, the
interested Directors shall abstain from voting at the relevant board meetings of our Company
in respect of such transactions and shall not be counted in the quorum;
(3) we have three independent non-executive Directors, who have extensive experience in
different areas and have been appointed to ensure that the decisions of our Board are made
after due consideration of independent and impartial opinions. Certain matters of our
Company must always be referred to the independent non-executive Directors for review in
accordance with the Listing Rules, the applicable laws and our Articles of Association and
internal policies;
(4) our daily management and operations are carried out by our senior management team, all of
whom have substantial experience in the industry in which our Company is engaged, and
will therefore be able to make business decisions that are in the best interest of our Group;
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(5) we have adopted a series of corporate governance measures to manage conflicts of interest,
if any, between our Group and our Controlling Shareholders which would support our
independent management. See “—Corporate Governance.”
Operation Independence
We have established our own organizational structure comprised of individual departments, each
with specific areas of responsibilities. We have also established various internal controls procedures to
facilitate the effective operation of our business. Our Group is not operationally dependent on our
Controlling Shareholders. Our Company (through our subsidiaries) holds or enjoys the benefit of all
relevant licenses and owns all relevant intellectual property and R&D facilities necessary to carry on
our business. We have sufficient capital, facilities, equipment and employees to operate our business
independently from our Controlling Shareholders. We also have independent access to our customers
and suppliers.
Based on the above, our Directors believe that we are capable of carrying on our business
independently of our Controlling Shareholders and their close associates.
Financial Independence
We have an independent financial system. Our Group’s accounting and finance functions are
independent of our Controlling Shareholders and their close associates. Our Group makes financial
decisions according to our own business needs. Our Group’s major finance operations are handled by
our financial management department, which operates independently from our Controlling Shareholders
and their close associates. We do not share any other functions or resources with any of our Controlling
Shareholders or their close associates.
During the Track Record Period, we primarily financed our business operations through cash
generated from our business activities and equity financing activities. As of the Latest Practicable Date,
we did not have any outstanding borrowings or guarantees from our Controlling Shareholders or any of
their respective close associates.
Based on the above, our Directors believe that our Group is able to operate with financial
independence from our Controlling Shareholders and their close associates.
CORPORATE GOVERNANCE
We have put in place sufficient corporate governance measures to manage the conflict of interest
and potential competition from our Controlling Shareholders and safeguard the interest of our
Shareholders, including:
(1) where a Shareholders’ meeting is to be held for considering proposed transactions in which
our Controlling Shareholders or any of their close associates has a material interest, our
Controlling Shareholders will not vote on the resolutions and shall not be counted in the
quorum in the voting;
(2) our Company has established internal control mechanism to identify connected transactions.
After the Listing, our Company will comply with the requirements in connection with
connected transactions under the Listing Rules;
(3) where our Directors reasonably request the advice of independent professionals, such as
independent financial advisors, the appointment of such independent professional will be
made at our Company’s expense;
(4) we have appointed Orient Capital (Hong Kong) 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;
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(5) we have established the Audit Committee, Remuneration and Appraisal Committee and
Nomination Committee with written terms of reference in compliance with the Listing Rules
and the Corporate Governance Code;
(6) our Controlling Shareholders will confirm the status of their non-competing interest on an
annual basis and to provide all information necessary, including all relevant financial,
operational and market information and any other necessary information as required by our
Company; and
(7) our Company will disclose decisions (with basis), if any, on matters reviewed by the
independent non-executive Directors either in its annual report or by way of announcements.
Our Directors consider that the above corporate governance measures are sufficient to manage any
potential conflict of interests between our Controlling Shareholders and their respective close associates
and our Group and to protect the interests of our Shareholders, in particular, the minority Shareholders.
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You should read the following discussion and analysis in conjunction with our audited
consolidated financial statements, including the notes thereto included in the Accountants’ Report set
out in Appendix I to this prospectus. You should read the entire Accountants’ Report in Appendix I to
this prospectus and not rely merely on the information contained in this section. The Accountants’
Report has been prepared in accordance with the International Financial Reporting Standards
(“ IFRS Accounting Standards ”), which may differ in material aspects from generally accepted
accounting principles in other jurisdictions.
Our historical results do not necessarily indicate results expected for any future periods. The
following discussion and analysis contain forward-looking statements that reflect our current views
with respect to future events and financial performance that involve risks and uncertainties. These
statements are based on 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
the sections headed “Forward-looking Statements” and “Risk Factors” in this prospectus.
OVERVIEW
We are a provider of power amplifier audio chips and haptic drivers in China. We specialize in the
design of low-power audio chips, mid/high-power audio chips and haptic drivers under a fabless model
to offer a wide array of solutions for emerging application scenarios. According to the F&S report, we
ranked (1) first among power amplifier audio chip providers in China in terms of total shipment volume
in 2024 of power amplifier audio chips for use in smart displays, (2) second among power amplifier
audio chip providers in China, and third among power amplifier audio chip providers globally, in terms
of total shipment volume of power amplifier audio chips in 2024, and (3) fourth among haptic driver
providers in China in terms of total shipment volume of haptic drivers in 2024. As a fabless company
developing and designing power amplifier audio chips and haptic drivers, we offer a comprehensive
portfolio of high-performance and reliable products and solutions for application sectors such as
consumer electronics and intelligent vehicles. During the Track Record Period, we primarily offer three
core product categories: low-power audio chips, mid/high-power audio chips and haptic drivers.
Our revenue was RMB130.3 million, RMB150.3 million, RMB355.2 million, RMB288.8 million
and RMB280.8 million in 2022, 2023 and 2024 and the ten months ended October 31, 2024 and 2025,
respectively. We recorded gross profit of RMB9.5 million in 2022 and RMB46.6 million in 2024 and
RMB38.8 million in the ten months ended October 31, 2024 and RMB56.1 million in the ten months
ended October 31, 2025, and a gross loss of RMB0.1 million in 2023, and loss for the year of RMB65.9
million, RMB94.1 million, RMB56.8 million, RMB46.9 million and RMB51.8 million in 2022, 2023
and 2024 and the ten months ended October 31, 2024 and 2025, respectively.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
We believe that the most significant factors affecting our results of operations and financial
condition include the following.
Development of the Power Amplifier Audio Chip Industry and Changes in Downstream Demand
We operate in the rapidly growing power amplifier audio chip market. Our business, financial
performance, results of operations and future growth are in turn affected by the development of the
power amplifier audio chip industry, including the general factors affecting the global power amplifier
audio chip market, the global economic conditions and regulatory environment, as well as the market
acceptance, adoption and demand of power amplifier audio chip products and related services.
According to the F&S report, China’s power amplifier audio chip industry in terms of revenue increased
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from RMB2.4 billion in 2020 to RMB4.1 billion in 2024, at a CAGR of 14.9%, and is expected to
reach RMB87.0 billion in 2029 at a CAGR of 19.4% from 2024 to 2029. Furthermore, the power
amplifier audio chip industry in China is experiencing trends such as increasing domestic substitution,
higher integration level and development towards more intelligent products. We believe that we are
well-positioned to capture such market opportunities with our power amplifier audio chip product
portfolio that covers the most extensive selections.
In particular, our business performance is in turn affected by the downstream market size and
customer demand for more advanced and effective power amplifier audio chip products. The overall
growth of global and China’s power amplifier audio chip market is mainly driven by growing
downstream industries, the escalating demand for high-efficiency solutions in audio systems for
consumer electronics, such as smartphones, smart wearables and smart displays, and intelligent
vehicles, as well as customized power amplifier audio chip with advanced algorithms. Downstream
market demand could be affected by a number of factors including macroeconomic conditions,
technological advancements and the evolving needs of end customers across various sectors. For
instance, according to the F&S report, benefiting from the booming development of consumer
electronics and the rapid growth in demand for power amplifier audio, the global market total shipment
of power amplifier audio chips for smart displays reached approximately 90.0 million in 2024, and is
expected to further increase to approximately 160.0 million by 2029, with a CAGR of 12.0%. In the
China-manufactured power amplifier audio chip market for smart displays, the total shipment reached
approximately 45.0 million in 2024, and is expected to further increase to approximately 90.5 million,
with a CAGR of 15.0%, according to the same source. Our future performance hinges on our capacity
to innovate and develop products that match latest technological trends and evolving customer
preferences in these downstream sectors.
Our Ability to Enhance and Develop Our Product Portfolio
Our chip products are subject to diversifying application scenarios and rapidly evolving customer
demands, and the global power amplifier audio chip industry that we operate in is characterized by
constant advancements in technology advancements and product innovations. To ensure that we can
maintain our position as a major market player in the power amplifier audio chip market and achieve
sustainable growth, our chip products must keep pace with these changes in a timely and effective
manner. To that end, our ability to efficiently develop and launch new chip products and enhance our
existing chip products is critical to our growth prospects.
We aim to further actively enrich our product portfolio, broaden our customer base and improve
our focus on high-margin product categories. Through ongoing product portfolio optimization and
technological innovation, we are dedicated to achieving robust financial performance and driving
long-term growth. However, fluctuations in product demand, shifts in market dynamics and evolving
competitive pressures may impact our financial performance. Our financial performance could be
affected by fluctuations in product demand, shifts in market dynamics and evolving competitive
pressures.
During the Track Record Period, we primarily generated revenue from the sales of low-power
audio chips and mid/high-power audio chips and to a much lesser extent, from the sales of haptic
drivers. The gross profit margins of different products tend to vary, and the gross profit margins of our
products could change along with competitive landscape, technology, product and manufacturing
upgrades and pricing factors, and, therefore, our product portfolio has an impact on our overall gross
profit margin. For instance, revenue from low-power audio chips accounted for 97.0%, 93.5%, 90.9%,
90.3% and 91.0% of our total revenue in 2022, 2023, 2024 and the ten months ended October 31, 2024
and 2025, respectively, and revenue from mid/high-power audio chips accounted for 3.0%, 5.8%, 7.5%,
8.1% and 7.3% of our total revenue in the same periods, respectively. We recorded gross profit of
RMB21.5 million, RMB3.9 million, RMB40.9 million, RMB32.3 million and RMB50.0 million with
gross profit margin of 17.0%, 2.7%, 12.7%, 12.4% and 19.6% in 2022, 2023, 2024 and the ten months
ended October 31, 2024 and 2025, respectively, for low-power audio chips, while we recognized a gross
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loss of RMB29 thousand in 2022 and gross profit of RMB3.3 million, RMB4.8 million, RMB6.2
million and RMB4.7 million with gross profit margin of 38.5%, 18.1%, 26.1% and 22.6% in 2023, 2024
and the ten months ended October 31, 2024 and 2025, respectively, for mid/high-power audio chips.
As we launch new automotive-grade power amplifier audio chip products, upgrade our power
amplifier audio chip product matrix and adjust our market outreach in the future, we may experience
further fluctuations in the sales contribution of different product lines, which may have an impact on
our results of operations.
Our Research and Development Capabilities
Our research and development capabilities are the foundation of our ability to enhance and
develop our product portfolio and customized solutions to address diverse customer demands. Our
ability to continue R&D activities, develop new technologies, design new products and enhance existing
products is critical to our success. We have invested and expect to continue to invest significant
resources into our research and development efforts.
During the Track Record Period, our research and development costs were RMB48.7 million,
RMB59.3 million, RMB68.1 million, RMB55.1 million and RMB55.7 million in 2022, 2023, 2024 and
the ten months ended October 31, 2024 and 2025, respectively, representing 57.7%, 60.2%, 62.7%,
61.9% and 53.0% of our total operating expenditure in the same periods, respectively. Specifically, the
progress of our technology and product development depends largely on our R&D talents. As of the
Latest Practicable Date, our R&D team consisted of 91 members, representing 61.1% of total
employees as of the same date. Our market success and financial performance hinge on maintaining
technological capabilities. Therefore, we will continue investing in proprietary technology development
and innovation to strengthen our competitive advantage against peers.
In addition, while we strive to achieve efficiency with our research and development efforts, as
similar initiatives in the power amplifier audio chip industry are usually associated with uncertainties in
the process and outcome, we may experience fluctuations in research and development costs and we
may not be able to predict the results of and return on such investment, which may in turn affect our
results of operations.
Our Ability to Manage Our Costs and Achieve Operational Efficiency
Our ability to achieve profitability and sustainable growth depends significantly on our
management of cost of sales. In 2022, 2023, 2024 and the ten months ended October 31, 2024 and
2025, our cost of sales was RMB120.8 million, RMB150.4 million, RMB308.6 million, RMB250.0
million and RMB224.7 million respectively, representing 92.7%, 100.1%, 86.9%, 86.6% and 80.0% of
our revenue for the same periods, respectively. Our cost of sales primarily consists of material and
processing costs, transportation fees and impairment losses on inventories. Changes in any major
component of our cost of sales and our overall cost structure could have an impact on our gross profit
and gross profit margin. For instance, our material and processing costs accounted for 87.4%, 92.6%,
97.8%, 98.4% and 98.6% of our total cost of sales in 2022, 2023, 2024 and the ten months ended
October 31, 2024 and 2025, respectively. The materials and processing cost such as costs for wafer,
chip packaging and testing may fluctuate due to a number of factors beyond our control, such as supply
chain disruptions and inflation, and we are susceptible to significant changes in the availability, price
and standard of critical raw materials and chip packaging and testing. We have implemented risk
management measures against such potential disruptions to our supply chain. In addition, our cost of
sales and gross margin are also affected by the impairment losses of inventories. See “—Key
Components of Our Consolidated Statements of Profit or Loss—Cost of Sales.”
Our business and results of operations are also affected in part by our operating expenses, which
primarily comprised research and development costs, and, to a lesser extent, our administrative
expenses and selling and marketing expenses during the Track Record Period. The absolute amount of
our research and development costs may continue to increase and account for a significant portion of
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our total operating expenses. See also “—Key Factors Affecting Our Results of Operations—Our Sales
and Marketing Capabilities and Ability to Price Effectively” and “—Key Factors Affecting Our Results
of Operations—Our Ability to Enhance and Develop Our Product Portfolio.” We may also incur greater
selling and marketing expenses and administrative expenses in the future along with the growing needs
of our business operations, and our cost and expense structure could further evolve along with our
business expansion. See “Business—Business Sustainability and Path to Profitability” for further details
of our measures to improve management of costs and expenses.
Our Sales and Marketing Capabilities and Ability to Price Effectively
We have made proactive efforts in product commercialization and market expansion, which has
contributed significantly to the expansion of our market reach and customer base, and, as a result, the
growth of our sales volume and revenue. In 2022, 2023, 2024 and the ten months ended October 31,
2024 and 2025, we recognized revenue from distributors of RMB125.2 million, RMB129.6 million,
RMB324.6 million, RMB266.5 million and RMB239.3 million, respectively, representing 96.1%,
86.2%, 91.4%, 92.3% and 85.2% of our total revenue in the same periods. We recognized revenue from
direct sale customers of RMB5.1 million, RMB20.7 million, RMB30.6 million, RMB22.3 million and
RMB41.5 million in 2022, 2023, 2024 and the ten months ended October 31, 2024 and 2025,
respectively, accounted for 3.9%, 13.8%, 8.6%, 7.7% and 14.8% of our total revenue in the same
periods. We believe that our dual approach to sales has enabled us to tap into both the benefits of direct
sales in customer engagement and product enhancements, and the benefits of distributorship in market
outreach, logistics arrangement and delivery.
Our ability to strengthen our customer base, expand market reach, generate sales, and achieve
business growth in the future will continue to rely on the efficiency and breadth of our sales network.
During the Track Record Period, our selling and marketing expenses were RMB17.4 million, RMB18.9
million, RMB20.8 million, RMB17.5 million and RMB16.8 million in 2022, 2023, 2024 and the ten
months ended October 31, 2024 and 2025, representing 13.4%, 12.6%, 5.9%, 6.1% and 6.0% of our
total revenue in the same periods, respectively. We have devoted, and expect to continue to devote,
substantial resources to our sales and marketing initiatives to deepen our penetration and achieve higher
market recognition. As we continue to scale up our business operations and enhanced brand recognition,
we expect to achieve greater cost efficiency with our sales and marketing initiatives.
Moreover, our ability to price our products effectively in light of our cost of sales and competitive
landscape is critical to our profit generation. In 2022, 2024 and the ten months ended October 31, 2024
and 2025, We recorded gross profits of RMB9.5 million, RMB46.6 million, RMB38.8 million and
RMB56.1 million, with our gross profit margin of 7.3%, 13.1%, 13.4% and 20.0%, respectively. We
recorded a gross loss of RMB0.1 million in 2023, primarily attributable to the implementation of a
strategic initiative to accelerate market share growth through a more competitive pricing strategy in
response to intensifying competition in the power amplifier audio chip sector. While the pricing
adjustment temporarily impacted our gross margin, it significantly reinforced our competitive
positioning and strengthened our market presence, as evidenced by our notable increase in sales
volume, particularly for our low-power audio chips in 2024.
BASIS OF PREPARATION
For ordinary shares issued to certain pre-IPO investors, pursuant to the supplemental agreements
entered into between the Company and such pre-IPO investors in relation to the termination of
redemption rights granted by the Company, which are void ab initio as described in note 28 to this
report, having taking into account the legal and regulatory framework of the Company’s jurisdiction
and the governing law of the supplementary agreements, the directors considered that it is appropriate
to present such pre-IPO investments as equity throughout the Relevant Periods. For the details of
financial impacts, see note 28 to the Historical Financial Information.
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The historical financial information has been prepared in accordance with IFRS Accounting
Standards as issued by the International Accounting Standards Board (“ IASB”), which comprise all
standards and interpretations approved by the IASB. All IFRS Accounting Standards effective for the
accounting period commencing from January 1, 2025, together with the relevant transitional provisions,
have been early adopted by us in the preparation of the historical financial information throughout the
Track Record Period.
The historical financial information has been prepared under the historical cost convention, except
for certain financial instruments which have been measured at fair value.
MATERIAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS
We have identified certain accounting policies that are significant to the preparation of our
consolidated financial statements. 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. Results may differ from these estimates under different
assumptions and conditions.
Our management continually evaluates such estimates, assumptions and judgments based on
historical experience and other assumptions which our management believes to be reasonable under the
circumstances.
We set forth below accounting policies that we believe involve the most significant estimates,
assumptions and judgments used in the preparation of our financial statements. Our material accounting
policies, as well as our key source of estimation uncertainties, which are important for understanding
our financial condition and results of operations, are set forth in notes 2.3 and 3 to the Accountants’
Report in Appendix I to this prospectus.
Revenue Recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognized when control of goods is transferred to the
customers at an amount that reflects the consideration to which we expect to be entitled in exchange for
those goods.
When the consideration in a contract includes a variable amount, the amount of consideration is
estimated to which we will be entitled in exchange for transferring the goods to the customer. The
variable consideration is estimated at contract inception and constrained until it is highly probable that
a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the
associated uncertainty with the variable consideration is subsequently resolved.
There are no significant variable consideration and financing component for our revenue from
contracts with customers.
Revenue from the sale of power amplifier audio chips and other chip products
We provide low-power audio chips, mid/high-power audio chips, and haptic drivers, as well as
power management chips. Revenue from the sale of products is recognized at the point in time when
control of the products is transferred to the customer, generally on delivery to the specific locations in
accordance with the contracts, the risks of obsolescence and loss have been transferred to the customer,
and when the customer confirmed the acceptance of the products.
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Other income
Interest income is recognized on an accrual basis using the effective interest method by applying
the rate that exactly discounts the estimated future cash receipts over the expected life of the financial
instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.
Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined on the
weighted average basis and, in the case of work in progress and finished goods, mainly comprises
direct materials and processing expenditures. Net realizable value is based on estimated selling prices
less any estimated costs to be incurred to completion and disposal.
Impairment of non-financial assets (other than goodwill)
We assess whether there are any indicators of impairment for all non-financial assets (including
the right-of-use assets) at the end of each reporting period. Indefinite life intangible assets are tested for
impairment annually and at other times when such an indicator exists. Other non-financial assets are
tested for impairment when there are indicators that the carrying amounts may not be recoverable. An
impairment exists when the carrying value of an asset or a cash-generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its value in use. The calculation
of the fair value less costs of disposal is based on available data from binding sales transactions in an
arm’s length transaction of similar assets or observable market prices less incremental costs for
disposing of the asset. When value in use calculations are undertaken, management must estimate the
expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in
order to calculate the present value of those cash flows.
We assess whether there is any indication of impairment for all non-financial assets (including
PPE, ROU assets and intangible assets) at the end of each reporting period in accordance with IAS 36
Impairment of Assets. Given that we sustained losses throughout the Track Record Period as we were
still in the stage of expanding our business and operations in the rapidly growing
perceptual-intelligence chips market, and we are continuously investing in research and development,
indicating potential impairment of our non-financial assets (including PPE, ROU assets and intangible
assets), we diligently carried out impairment testing at the end of each reporting period.
For the purpose of impairment review, the carrying amount of non-financial assets were compared
to the corresponding recoverable amount, which were based predominantly on value-in-use. Value in
use is the present value of the future cash flows expected to be derived from an asset or cash-generating
unit. Since the asset does not generate cash inflows that are largely independent of those from other
assets or groups of assets, the recoverable amount is determined for the cash-generating unit to which
the asset belongs. Our management estimated the expected future cash flows from the cash-generating
unit and selected the suitable discount rate in order to calculate the present value of those cash flows.
Our management engaged an independent external valuer to assess the recoverable amount of the CGU
and leveraged our management’s extensive experiences in the perceptual-intelligence chips industry and
provided forecast based on past performance and our expectation of future business plans and market
developments. Based on the assessment result, value in use is greater than carrying amounts of PPE,
ROU and intangible assets, hence, no impairment was recognized.
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The following table sets out the key assumptions adopted by management in the impairment
assessment:
As of December 31, As of October 31,
2022 2023 2024 2025
Gross margin rate ......... 5.5%−36.6% 14.4%−36.6% 13.1%−36.6% 20.1%−37.1%
Annual revenue growth rate .. 11%−136% 11%−136% 11%−57% 4%−55%
Discount rate (before tax) .... 17.7% 18.1% 18.2% 18.4%
The forecasted gross margin rate and forecasted annual revenue growth rate used in the
impairment testing were determined by management based on past performance and its expectation for
market development. Discount rates reflect market assessments of the time value and the specific risks
relating to the industry. These estimates and judgments may be affected by unexpected changes in the
future market or economic conditions. The directors of the Company have considered the reasonably
possible changes to the key assumptions as adopted in the impairment assessments and considered will
not result in any impairment charge to be recognized.
Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as payables, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of payables, net of
directly attributable transaction costs.
Our financial liabilities include trade payables, other payables and accruals, redemption liabilities
and interest-bearing bank borrowings.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at amortized cost (trade and other payables and borrowings)
After initial recognition, financial liabilities are subsequently measured at amortized cost, using
the effective interest rate method unless the effect of discounting would be immaterial, in which case
they are stated at cost. Gains and losses are recognized in the statement of profit or loss when the
liabilities are derecognized as well as through the effective interest rate amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the effective interest rate. The effective interest rate
amortization is included in finance costs in the statement of profit or loss.
Redemption liabilities
A contract that contains an obligation to purchase our equity instruments for cash or another
financial asset gives rise to a financial liability for the redemption amount, even if our obligations to
purchase is conditional on the counterparty exercising a right to redeem. The redemption liability is
initially measured at the carrying amount of the redemption amount and subsequently measured at
amortized cost with interest expense being included in change in the carrying amounts of redemption
liabilities.
The redemption liabilities were classified as current liabilities as certain redemption events could
occur anytime. The carrying amount of the redemption liabilities will be reclassified to equity upon a
termination of the counterparty’s redemption right.
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RESULTS OF OPERATIONS
The following table sets forth a summary of our consolidated statements of profit or loss items for
the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount
%o f
Revenue Amount
%o f
Revenue Amount
%o f
Revenue Amount
%o f
Revenue Amount
%o f
Revenue
(RMB in thousands, except for percentages)
(unaudited)
Revenue .............. 130,327 100.0 150,291 100.0 355,195 100.0 288,832 100.0 280,778 100.0
Cost of sales ............ (120,848) (92.7) (150,415) (100.1) (308,639) (86.9) (250,011) (86.6) (224,721) (80.0)
Gross profit/(loss) .......... 9,479 7.3 (124) (0.1) 46,556 13.1 38,821 13.4 56,057 20.0
Other income and gains ....... 10,133 7.8 7,973 5.3 9,582 2.7 6,844 2.4 3,798 1.4
Selling and marketing expenses .... (17,405) (13.4) (18,869) (12.6) (20,847) (5.9) (17,500) (6.1) (16,800) (6.0)
Administrative expenses ....... (18,279) (14.0) (20,382) (13.6) (19,673) (5.5) (16,434) (5.7) (32,629) (11.6)
Research and development costs ... (48,708) (37.4) (59,271) (39.5) (68,060) (19.2) (55,134) (19.1) (55,690) (19.8)
Impairment loss on financial assets,
net ................ (125) (0.1) (165) (0.1) (116) (0.0) (136) (0.0) (59) (0.0)
Other expenses ........... (10) (0.0) (1) (0.0) (226) (0.1) — — (1,928) (0.7)
Finance costs ............ (209) (0.2) (822) (0.5) (1,393) (0.4) (1,129) (0.4) (2,155) (0.8)
Changes in the carrying amounts of
redemption liabilities ........ (775) (0.6) (2,469) (1.7) (2,667) (0.8) (2,208) (0.8) (2,370) (0.8)
Loss before tax ........... (65,899) (50.6) (94,130) (62.6) (56,844) (16.0) (46,876) (16.2) (51,776) (18.4)
Income tax expense ......... (3) (0.0) ————————
Loss for the year/period ....... (65,902) (50.6) (94,130) (62.6) (56,844) (16.0) (46,876) (16.2) (51,776) (18.4)
For details on the accounting treatment of redemption rights of pre-IPO investments, see “—
Share Capital and Total Equity” below and note 26 to the Accountants’ Report set out in Appendix I to
this prospectus. See note 28 to the Accountants’ Report in Appendix I to this prospectus for further
details of the financial impacts.
NON-IFRS MEASURE
To supplement our consolidated financial statements, which are presented in accordance with
IFRSs, we also use adjusted loss (non-IFRS measure) as an additional financial measure, which is not
required by, or presented in accordance with, IFRSs.
We define adjusted loss (non-IFRS measure) as loss, excluding share-based payments and listing
expenses. We have made the following adjustment consistently during the Track Record Period.
 Share-based payments represent the non-cash employee benefit expenses incurred in
connection with our award to key employees. Such expenses in any specific period are not
expected to result in future cash payments.
 Listing expenses represent the costs incurred in connection with our initial public offering
on the Hong Kong Stock Exchange. Such expenses in any specific period are not expected to
result in future cash payments after completion of the listing process.
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The following table reconciles our loss for the year/period presented in accordance with IFRSs to
adjusted loss (non-IFRS measure).
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Loss for the
year/period ........ (65,902) (94,130) (56,844) (46,876) (51,776)
Add:
Share-based payments .. 7,824 7,843 7,843 6,536 6,079
Listing expenses ...... ———— 12,529
Adjusted loss
(non-IFRS measure) . (58,078) (86,287) (49,001) (40,340) (33,168)
We believe that the adjusted loss (non-IFRS measure) would provide 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 non-IFRS measure does not have a standardized
meaning prescribed by IFRS Accounting Standards, and our presentation of adjusted loss (non-IFRS
measure) may not be comparable to similarly titled measures presented by other companies. The use of
adjusted loss (non-IFRS measure) has limitations as an analytical tool, and you should not consider
them in isolation from, or as a substitute for an analysis of, our results of operations or financial
condition as reported under IFRS Accounting Standards.
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KEY COMPONENTS OF OUR CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Revenue
During the Track Record Period, we primarily generated revenue from the sales of low-power audio chips and mid/high-power audio chips,
and to a much lesser extent, from the sales of haptic drivers. In 2022, 2023, 2024 and the ten months ended October 31, 2024 and 2025, our
revenue was RMB130.3 million, RMB150.3 million, RMB355.2 million, RMB288.8 million and RMB280.8 million, respectively. The following
table sets forth a breakdown of our revenue by product line and the sales volume and average selling price of our low-power audio chips,
mid/high-power audio chips, haptic drivers and power management chips during the Track Record Period.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Revenue %
Sales
volume ASP Revenue %
Sales
volume ASP Revenue %
Sales
volume ASP Revenue %
Sales
volume ASP Revenue %
Sales
volume ASP
( RMB in thousands for revenue, except for percentage and ASP; RMB for ASP; units in thousands for sales volume)
(unaudited)
Low-power audio chips 126,370 97.0 116,486 1.08 140,645 93.5 214,323 0.66 322,908 90.9 451,532 0.72 260,760 90.3 374,914 0.70 255,455 91.0 389,128 0. 66
— Adaptive power control audio chips . 82,529 63.3 90,628 0.91 104,379 69.5 186,715 0.56 172,329 48.5 330,181 0.52 146,073 50.6 281,538 0.52 144,997 51.6 296,549 0.49
— Portable power amplifier audio chips . 43,841 33.6 25,858 1.70 36,266 24.1 27,608 1.31 150,579 42.4 121,351 1.24 114,687 39.7 93,376 1.23 110,458 39.3 92,580 1.19
Mid/high-power audio chips ...... 3,957 3.0 1,771 2.23 8,662 5.8 3,266 2.65 26,707 7.5 11,739 2.28 23,612 8.1 10,708 2.21 20,596 7.3 9,964 2.07
Haptic drivers ........... — — — — 984 0.7 1,006 0.98 5,332 1.5 5,845 0.91 4,277 1.5 4,678 0.91 3,702 1.3 4,173 0.89
Others (1) ............. — — — — — — — — 248 0.1 1,026 0.24 183 0.1 726 0.26 1,025 0.4 1,866 0.55
Total .............. 130,327 100.0 150,291 100.0 355,195 100.0 288,832 100.0 280,778 100.0
(1) Others primarily represent power management chips.
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The average selling price of our low-power audio chips, including adaptive power control audio
chips and portable power amplifier audio chips, decreased in 2023, primarily attributable to (1) the
rapid increase in sales volume of adaptive power control audio chips, which generally have a lower
average selling price compared to portable power amplifier audio chips, thereby pulling down the
overall average selling price of low-power audio chips; and (2) the adoption of a relatively more
competitive pricing strategy in response to heightened competition, which, while impacting average
selling price in the short time, is expected to strengthen our long-term market presence and customer
base. The average selling price for mid/high-power audio chips increased from RMB2.23 per unit in
2022 to RMB2.65 per unit in 2023, primarily due to significantly increased customer demand for
certain models of the FS21 series in 2023, which compared to other models, had a higher per unit price.
The average selling price for mid/high-power audio chips decreased from RMB2.65 per unit in 2023 to
RMB2.28 per unit in 2024, primarily because the demand for other models of lower per unit price
increased and hence our average selling price for this product line experienced a decrease.
For illustrative purposes, the following table sets forth the revenue attributable to different types
of products during the Track Record Period.
Y ear ended December 31,
Ten months ended
October 31,
2022 2023 2024 2025
Amount
(RMB in
thousands)
Percentage
(%)
Amount
(RMB in
thousands)
Percentage
(%)
Amount
(RMB in
thousands)
Percentage
(%)
Amount
(RMB in
thousands)
Percentage
(%)
(RMB in thousands, except for percentages)
Product type
Smartphone ............ 110,759 85.0% 113,143 75.3% 212,583 59.8% 162,738 58.0%
Tablet ............... 14,216 10.9% 14,759 9.8% 87,892 24.7% 82,926 29.5%
Speaker .............. 336 0.3% — — 12,427 3.5% 11,896 4.2%
Television ............. 2,897 2.2% 1,230 0.8% 9,992 2.8% 7,505 2.7%
Smartwatch ............ 1,485 1.1% 3,109 2.1% 5,690 1.6% 6,495 2.3%
Vehicle .............. —————— 8 9 9 0.3%
PC ................. 159 0.1% 585 0.4% 147 0.0% 80 0.0%
Camera .............. —————— 2 0 0 0.1%
Others ............... 475 0.4% 17,465 11.6% 26,464 7.6% 8,039 2.9%
Revenue .............. 130,327 100.0% 150,291 100.0% 355,195 100.0% 280,778 100.0%
(1): Others primarily includes projectors, dictionary pens, headphones and a small portion of revenue that cannot be accurately
classified.
(2): Above are our estimates of our end customers intended applications based on the chip model’s specifications. We have no
control over, or knowledge of, how end customers ultimately apply these chips.
Cost of Sales
In 2022, 2023, 2024 and the ten months ended October 31, 2024 and 2025, our cost of sales was
RMB120.8 million, RMB150.4 million, RMB308.6 million, RMB250.0 million and RMB224.7 million,
respectively, representing 92.7%, 100.1%, 86.9%, 86.6% and 80.0% of our revenue for the same
periods, respectively. As a fabless company, our cost of sales primarily consists of (1) materials and
processing cost; (2) transportation costs; (3) provisions; and (4) impairment losses on inventories. The
following table sets forth a breakdown of our cost of sales by nature for the periods indicated.
FINANCIAL INFORMATION
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Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total
(RMB in thousands, except for percentages)
(unaudited)
Costs of sales of goods
Materials and processing cost ..... 105,640 87.4 139,295 92.6 302,001 97.8 245,966 98.4% 221,499 98.6%
Transportation costs ......... 1,397 1.2 2,065 1.4 1,593 0.5 1,201 0.4% 883 0.4%
Provisions .............. 1,793 1.5 1,218 0.8 2,413 0.8 335 0.1% 754 0.3%
Subtotal .............. 108,830 90.1 142,578 94.8 306,007 99.1 247,502 99.0% 223,136 99.3%
Impairment losses on inventories ... 12,018 9.9 7,837 5.2 2,632 0.9 2,509 1.0% 1,585 0.7%
Total ................ 120,848 100.0 150,415 100.0 308,639 100.0 250,011 100.0% 224,721 100.0%
Gross Profit and Gross Profit Margin
In 2022, 2024 and the ten months ended October 31, 2024 and 2025, our gross profit was RMB9.5
million, RMB46.6 million, RMB38.8 million and RMB56.1 million, representing gross profit margin of
7.3%, 13.1%, 13.4% and 20.0%, respectively. The following table sets forth a breakdown of our gross
profit and gross profit/(loss) margin by product type for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount
Gross
profit/(loss)
margin (%) Amount
Gross
profit/(loss)
margin (%) Amount
Gross
profit
margin (%) Amount
Gross
profit
margin (%) Amount
Gross
profit
margin (%)
(RMB in thousands, except for percentages)
(unaudited)
Before impairment loss of
inventories
Low-power audio chips ....... 21,526 17.0 3,859 2.7 40,869 12.7 32,342 12.4 49,967 19.6
— Adaptive power control audio
chips ............. 15,651 19.0 1,546 1.5 18,979 11.0 12,482 8.5 25,799 17.8
— Portable power amplifier audio
chips ............. 5,875 13.4 2,313 6.4 21,890 14.5 19,860 17.3 24,168 21.9
Mid/high-power audio chips ..... (29) (0.7) 3,336 38.5 4,832 18.1 6,167 26.1 4,664 22.6
Haptic drivers ............ — — 518 52.6 3,448 64.7 2,789 65.2 2,323 62.7
Others ................ ————3 9 15.7 32 17.5 688 67.1
Subtotal .............. 21,497 16.5 7,713 5.1 49,188 13.8 41,330 14.3 57,642 20.5
Less: impairment losses on
inventories ............ (12,018) (7,837) (2,632) (2,509) (1,585)
Total ................ 9,479 7.3 (124) (0.1) 46,556 13.1 38,821 13.4 56,057 20.0
Note:
(1) We present impairment losses on inventories as a separate line item to provide a clearer view of our gross profit margin by
product type. Inventories are stated at the lower of cost and net realizable value. Net realizable value is based on estimated
selling prices less any estimated costs to be incurred to completion and disposal. Management estimates the net realizable
value for such inventories based primarily on the latest invoice prices and current market conditions. The impairment
losses on inventories requires the use of estimates. Where the expectation is different from the original estimate, such
difference will have an impact on the carrying value of inventories and the write-down of inventory amount in the year in
which such estimates have been changed. By separating impairment losses, we differentiate the impact of these inventory
valuation adjustments—which are estimates inherently subject to market volatility and may not reflect actual future
outcomes—from the underlying operational profitability of our products.
FINANCIAL INFORMATION
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Other Income and Gains
We recorded other income and gains of RMB10.1 million, RMB8.0 million, RMB9.6 million,
RMB6.8 million and RMB3.8 million in 2022, 2023, 2024 and the ten months ended October 31, 2024
and 2025, respectively. Other income and gains primarily consist of foreign exchange gains, bank
interest income, unconditional government grants, and investment income from structured deposits. The
following table sets forth a breakdown of our other income and gains for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Other income
Bank interest income ............ 2,850 5,273 4,044 3,526 1,481
Government grants ............. 51 1,201 723 211 2,280
Investment income from structured
deposits ................... 2,524 79 2 2 —
Others (1) .................... 92 5——3 7
Gains
Foreign exchange gains, net ....... 4,699 1,395 4,813 3,105 —
Total ...................... 10,133 7,973 9,582 6,844 3,798
(1) Others primarily include non-recurring penalties we received from counterparties arising from their breach of contracts.
Selling and Marketing Expenses
Our selling and marketing expenses primarily consist of (1) employee benefit expenses including
primarily the salaries, wages and bonuses for our selling and marketing personnel; (2) business
development and traveling expenses; (3) share-based payments; and (4) depreciation and amortization
expenses, which were primarily related to our right-of-use assets representing our office leases. The
following table sets forth a breakdown of our selling and marketing expenses for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total
(RMB in thousands, except for percentages)
(unaudited)
Employee benefit expenses ...... 13,470 77.4 13,969 74.0 16,165 77.5 13,757 78.6 12,823 76.3
Business development and traveling
expenses ............. 1,478 8.5 2,469 13.1 2,341 11.2 1,869 10.7 2,064 12.3
Share-based payments ........ 1,573 9.0 1,578 8.4 1,548 7.4 1,290 7.4 1,165 6.9
Depreciation and amortization .... 694 4.0 701 3.7 585 2.8 463 2.6 545 3.2
Others (1) ............... 190 1.1 152 0.8 208 1.1 121 0.7 203 1.3
Total ................ 17,405 100.0 18,869 100.0 20,847 100.0 17,500 100.0 16,800 100.0
(1) Others primarily include utilities and office expenses and communications and courier fees associated with our sales and
marketing initiatives.
Administrative Expenses
Our administrative expenses primarily consist of (1) listing expenses; (2) employee benefit
expenses including primarily the salaries, wages and bonuses for our administrative personnel; (3)
share-based payments; (4) traveling expenses; (5) professional service fees, primarily including
recruitment fees, audit fees, consulting service fees, agency fees and legal fees; (6) depreciation and
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amortization expenses, which were primarily related to our property, plant and equipment and
right-of-use assets representing our office leases; and (7) rental expenses which primarily consist of
property management fees and short-term office rent fees. The following table sets forth a breakdown
of our administrative expenses for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total
(RMB in thousands, except for percentages)
(unaudited)
Listing expenses ........... ———————— 1 2,529 38.4
Employee benefit expenses ...... 9,607 52.6 11,526 56.5 12,078 61.4 9,974 60.7 11,354 34.8
Share-based payments ........ 1,974 10.8 1,974 9.7 1,974 10.0 1,645 10.0 1,239 3.8
Traveling expenses .......... 1,207 6.6 2,132 10.5 1,594 8.1 1,330 8.1 1,409 4.3
Professional service fees ....... 2,886 15.8 1,648 8.1 1,346 6.8 1,234 7.5 4,029 12.3
Depreciation and amortization .... 1,314 7.2 1,519 7.5 1,327 6.7 1,116 6.8 896 2.7
Rental expenses ........... 751 4.1 1,083 5.3 694 3.5 601 3.7 567 1.7
Others (1) ............... 540 2.9 500 2.4 660 3.5 534 3.2 606 2.0
Total ................ 18,279 100.0 20,382 100.0 19,673 100.0 16,434 100.0 32,629 100.0
(1) Others primarily include utilities and office expenses and third-party service fees associated with our administrative
activities, such as conference fees and communication expenses.
Research and Development Costs
Our research and development costs primarily consist of (1) employee benefit expenses including
salaries, wages and bonuses for our research and development personnel; (2) materials and consumables
for our research and development initiatives; (3) share-based payments; (4) professional service fees,
which primarily consist of design and testing fees; (5) depreciation and amortization expenses, which
were primarily related to our property, plant and equipment, and right-of-use assets representing our
office leases. The following table sets forth a breakdown of our costs for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total
(RMB in thousands, except for percentages)
(unaudited)
Employee benefit expenses ...... 24,730 50.8 32,551 54.9 40,907 60.1 33,891 61.5 35,687 64.1
Materials and consumables ...... 13,996 28.7 15,233 25.7 14,898 21.9 11,367 20.6 9,894 17.8
Share-based payments ........ 4,277 8.8 4,291 7.2 4,321 6.3 3,601 6.5 3,674 6.6
Professional service fees ....... 3,648 7.5 3,869 6.5 4,056 6.0 3,211 5.8 2,349 4.2
Depreciation and amortization .... 1,648 3.4 2,105 3.6 2,539 3.7 2,129 3.9 2,139 3.8
Others (1) ............... 409 0.8 1,222 2.1 1,339 2.0 935 1.7 1,947 3.5
Total ................ 48,708 100.0 59,271 100.0 68,060 100.0 55,134 100.0 55,690 100.0
(1) Others primarily include IP licensing fees, traveling and transportation expenses associated with research and development,
and equipment repair and maintenance fees.
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Impairment Losses on Financial Assets, Net
During the Track Record Period, we recorded net impairment losses on financial assets of
RMB0.1 million, RMB0.2 million, RMB0.1 million, RMB0.1 million and RMB0.1 million in 2022,
2023, 2024 and the ten months ended October 31, 2024 and 2025, respectively, primarily in accordance
with the changes in the balances of trade receivables at the end of the respective periods, which
impacted the provisions for expected credit losses.
Other Expenses
Our other expenses primarily consist of foreign exchange currency loss and an interest expense
which arose from a conditional government grant that required us to repay the subsidy with interest
when we relocated from Xiamen to Shanghai. In 2022, 2023, 2024 and the ten months ended October
31, 2024 and 2025, our recorded other expenses of approximately RMB10 thousand, RMB1 thousand,
RMB0.2 million, nil and RMB1.9 million, respectively.
Finance Costs
Our finance costs consist of interest on interest-bearing bank borrowings and interest on lease
liabilities. In 2022, 2023, 2024 and the ten months ended October 31, 2024 and 2025, our finance costs
was RMB0.2 million, RMB0.8 million, RMB1.4 million, RMB1.1 million and RMB2.2 million,
respectively. The table below sets forth details of our finance costs, both in absolute amounts and as
percentages of our total finance costs, for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total
(RMB in thousands, except for percentages)
(unaudited)
Interest-bearing bank borrowings ... — — 619 75.3 1,206 86.6 966 85.6% 2,082 96.6%
Interest on lease liabilities ...... 209 100.0 203 24.7 187 13.4 163 14.4% 73 3.4%
Total ................ 209 100.0 822 100.0 1,393 100.0 1,129 100.0% 2,155 100.0%
Changes in the Carrying Amounts of Redemption Liabilities
In 2022, 2023, 2024 and the ten months ended October 31, 2024 and 2025, we recognized changes
in the carrying amounts of redemption liabilities of RMB0.8 million, RMB2.5 million, RMB2.7 million,
RMB2.2 million and RMB2.4 million, respectively.
During the Track Record Period, the changes in carrying amount of redemption liabilities
represent the amount of changes in our obligations arising from the preferential rights granted to an
investor, and the investor was granted a right to put back to us the registered capital acquired upon
occurrence of certain events which cannot be controlled by us. The redemption liabilities recognized
was solely due to the pre-IPO investment of Huzhou Zhuosheng. The redemption liability was initially
measured at the carrying amounts of the redemption amount and was subsequently measured at
amortized cost, with interest expense included in the changes in the carrying amounts of financial
instruments issued to the investor. Upon the Listing, we expect that our redemption liabilities will
automatically be re-classified to equity and therefore no more changes in carrying amount of the
redemption liabilities will be recognized on our consolidated statement of profit or loss. See note 26 to
the Accountants’ Report in Appendix I to this prospectus.
Income Tax Expense
We recorded income tax expense of approximately RMB3 thousand, nil, nil, nil and nil in 2022,
2023, 2024 and the ten months ended October 31, 2024 and 2025, respectively. Our income tax
comprises current and deferred tax.
FINANCIAL INFORMATION
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During the Track Record Period and up to the Latest Practicable Date, we had paid all relevant
taxes when due and there were no matters in dispute or unresolved with the relevant tax authorities.
Our subsidiaries incorporated in the PRC are subject to tax at the statutory rate of 25% on the
taxable profits determined in accordance with the PRC Corporate Income Tax Law which became
effective on January 1, 2008, except for these subject to tax preferential. Our Company obtained the
“High and New Technology Enterprises” qualification in 2022, and accordingly was entitled to the
preferential tax rate of 15% from 2022 to 2024. We are currently in the process of renewing our “High
and New Technology Enterprise” qualification. Shenzhen FourSemi has applied for the Small-Scaled
Minimal Profit Corporate Income Tax Preferential Policy announced by the SAT. Pursuant to the policy,
during the period from January 1, 2022 to December 31, 2027, the portion of annual taxable income
amount of a Small-Scaled Minimal Profit Corporate shall be eligible for a 75% reduction, and tax shall
be levied at a reduced tax rate of 20%.
Our subsidiary incorporated in Hong Kong is subject to Hong Kong profits tax at the rate of
8.25% for taxable income not exceeding HK$2,000,000, and 16.5% for taxable income exceeding
HK$2,000,000 on any estimated assessable profits arising in Hong Kong during the Track Record
Period. No provision for Hong Kong profits tax has been made as we had no assessable profits derived
from or earned in Hong Kong during the Track Record Period.
See note 10 to the Accountants’ Report in Appendix I to this prospectus.
PERIOD TO PERIOD COMPARISON OF RESULTS OF OPERATIONS
Ten Months Ended October 31, 2025 Compared to Ten Months Ended October 31, 2024
Revenue
Our revenue remained relatively stable at RMB288.8 million for the ten months ended October 31,
2024 and RMB280.8 million for the ten months ended October 31, 2025, primarily due to reasons
below.
 Low-power audio chips . Our revenue from low-power audio chips remained relatively
stable at RMB260.8 million for the ten months ended October 31, 2024 and RMB255.5
million for the ten months ended October 31, 2025, primarily due to a decrease in revenue
from portable power amplifier audio chips from RMB114.7 million in the ten months ended
October 31, 2024 to RMB110.5 million in the ten months ended October 31, 2025, driven by
the lowered sales volume which declined to approximately 92.6 million units in the ten
months ended October 31, 2025 from 93.4 million units in the ten months ended October 31,
2024.
 Mid/high-power audio chips . Our revenue from mid/high-power audio chips decreased by
12.8% from RMB23.6 million for the ten months ended October 31, 2024 to RMB20.6
million for the ten months ended October 31, 2025, primarily due to a decrease in revenue
from our FS2105 series products resulting from a deliberate strategic reallocation of
resources towards the R&D and promotion of newer models.
 Haptic drivers . Our revenue from haptic drivers decreased by 13.4% from RMB4.3 million
for the ten months ended October 31, 2024 to RMB3.7 million for the ten months ended
October 31, 2025, primarily due to a decrease in sales volume. This decline was mainly
because we directed more resources to promoting new haptic driver models, such as the
FS3002 series, to expand our portfolio of available haptic driver models.
FINANCIAL INFORMATION
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Cost of sales
Our cost of sales decreased by 10.1% from RMB250.0 million for the ten months ended October
31, 2024 to RMB224.7 million for the ten months ended October 31, 2025, which was generally due to
the improved economies of scale, reductions in chip size achieved through sustained research and
development and the lowered market procurement cost, driven by intense price competition in the
mature-process node segment.
Gross profit and Gross profit margin
Our gross profit increased by 44.4% from RMB38.8 million for the ten months ended October 31,
2024 to RMB56.1 million for the ten months ended October 31, 2025, primarily due to revenue growth
outpacing the increase in cost of sales, supported by our enhanced market recognition, increasingly
diversified product portfolio, and frequent product upgrade that enables the introduction of products
with a lower cost structure. Our gross profit margin increased from 13.4% for the ten months ended
October 31, 2024 to 20.0% for the ten months ended October 31, 2025, primarily driven by effective
cost control, which reduced raw material prices and processing fees, coupled with a favorable shift in
product metrics towards higher-margin PA audio chip products.
 Low-power audio chips . Our gross profit from low-power audio chips increased by 54.5%
from RMB32.3 million for the ten months ended October 31, 2024 to RMB50.0 million for
the ten months ended October 31, 2025, primarily due to a reduction in the cost structure of
our adaptive power control audio chips achieved through product iteration, declining raw
material and procurement costs, the realization of economies of scale as business expanded,
combined with a higher revenue contribution from the higher-margin PA audio chip product
category, collectively driving an increase in the overall gross profit margin for our
low-power audio chips.
 Mid/high-power audio chips . Our gross profit from mid/high-power audio chips decreased
by 24.4% from RMB6.2 million for the ten months ended October 31, 2024 to RMB4.7
million for the ten months ended October 31, 2025, primarily due to the corresponding
revenue decrease, especially the decrease in revenue generated from the FS2105 series.
 Haptic drivers . Our gross profit for haptic drivers decreased by 16.7% from RMB2.8
million in the ten months ended October 31, 2024 to RMB2.3 million in the ten months
ended October 31, 2025, primarily due to the corresponding revenue decrease.
Other income and gains
Our other income and gains decreased by 44.5% from RMB6.8 million for the ten months ended
October 31, 2024 to RMB3.8 million for the ten months ended October 31, 2025, primarily due to a
foreign exchange gain of RMB3.1 million in the ten months ended October 31, 2024, compared to a
foreign exchange gain of nil in the ten months ended October 31, 2025, as a result of exchange rate
fluctuations.
Selling and marketing expenses
Our selling and marketing expenses remained relatively stable at RMB17.5 million for the ten
months ended October 31, 2024 and RMB16.8 million for the ten months ended October 31, 2025,
primarily due to a consistent marketing headcount alongside rising output.
FINANCIAL INFORMATION
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Administrative expenses
Our administrative expenses increased significantly from RMB16.4 million for the ten months
ended October 31, 2024 and RMB32.6 million for the ten months ended October 31, 2025, primarily
driven by higher listing-related expenses, an increase in employee benefit expenses of RMB1.4 million,
and additional professional service fees of RMB2.8 million. The professional fees included costs of
RMB1.1 million for our shareholding restructuring and RMB0.9 million for recruitment services.
Research and development costs
Our research and development costs remained relatively stable at RMB55.1 million for the ten
months ended October 31, 2024 and RMB55.7 million for the ten months ended October 31, 2025,
primarily due to the effective management and oversight of R&D projects, strict cost control measures,
and the retention of key R&D personnel despite our increased R&D projects.
Impairment losses on financial assets, net
Our recognized net impairment losses on financial assets remained relatively stable at RMB136
thousand for the ten months ended October 31, 2024 and RMB59 thousand for the ten months ended
October 31, 2025.
Other expenses
We did not recognize any other expenses for the ten months ended October 31, 2024. We
recognized other expenses of RMB1.9 million for the ten months ended October 31, 2025, primarily
due to a net foreign exchange loss of RMB1.9 million recognized in other expenses in the ten months
ended October 31, 2025, compared to a net gain of RMB3.1 million recognized in other income and
gains in the ten months ended October 31, 2024, due to exchange rate fluctuations.
Finance costs
Our finance costs increased by 90.9% from RMB1.1 million for the ten months ended October 31,
2024 to RMB2.2 million for the ten months ended October 31, 2025, primarily due to the increased
bank borrowing to support our business operations as we expand our business scale.
Changes in the carrying amounts of redemption liabilities
For the ten months ended October 31, 2024 and 2025, we recognized changes in the carrying
amounts of redemption liabilities of RMB2.2 million and RMB2.4 million, respectively, relating to the
accrued interests on a financial liability of RMB30.0 million arising from one of our Pre-IPO Investors’
redemption rights. Upon the Listing, we expect that our redemption liabilities will automatically be
re-classified to equity and therefore no more changes in carrying amount of the redemption liabilities
will be recognized on our consolidated statements of profit or loss.
Income tax expense
We did not recognize any income tax expense for the ten months ended October 31, 2024 and
2025.
Loss for the period
As a result of the foregoing, our loss for the period increased by 10.5% from RMB46.9 million
for the ten months ended October 31, 2024 and RMB51.8 million for the ten months ended October 31,
2025.
FINANCIAL INFORMATION
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Y ear Ended December 31, 2024 Compared to Y ear Ended December 31, 2023
Revenue
Our revenue increased significantly from RMB150.3 million in 2023 to RMB355.2 million in
2024, primarily due to the increase in revenue from all product lines for the reasons discussed below.
 Low-power audio chips. Our revenue from low-power audio chips increased significantly
from RMB140.6 million in 2023 to RMB322.9 million in 2024, primarily because (i) our
revenue from adaptive power control audio chip increased by 65.1% from RMB104.4 million
in 2023 to RMB172.3 million in 2024, and (ii) our revenue from portable power amplifier
audio chips increased significantly from RMB36.3 million in 2023 to RMB150.6 million in
2024. Both increases were mainly attributable to the overall business growth in 2024,
underpinned by strong sales volume expansion. Specifically, the sales volume of our
adaptive power control audio chips increased from approximately 186.7 million units in
2023 to approximately 330.2 million units in 2024, and the sales volume of our PA audio
chips increased significantly from approximately 27.6 million units in 2023 to approximately
121.4 million units in 2024, with growth primarily fueled by an enriched and diversified
product portfolio under our low-power audio chip series.
 Mid/high-power audio chips. Our revenue from mid/high-power audio chips increased
significantly from RMB8.7 million in 2023 to RMB26.7 million in 2024, primarily, as the sales
volume of mid/high-power audio chips increased from approximately 3.3 million units in 2023
to approximately 11.7 million units in 2024, as our mid/high-power audio chips gradually
gained broader market recognition and momentum following its initial launch in 2021, further
strengthening our market position in the smart display segment.
 Haptic drivers. Our revenue from haptic drivers increased significantly from RMB1.0
million in 2023 to RMB5.3 million in 2024, primarily as the sales volume of haptic drivers
increased from approximately 1.0 million units in 2023 to approximately 5.8 million units in
2024, primarily driven by effective cross-selling through our established customer base and
market coverage in power amplifier audio chips, which generated strong sales momentum for
haptic drivers, following the commercialization in 2023.
 Others. We started to generate revenue from other products in 2024 and recognized revenue
from power management chips of RMB0.2 million in 2024.
Cost of sales
Our cost of sales increased significantly from RMB150.4 million in 2023 to RMB308.6 million in
2024, primarily due to an increase in cost of goods sold, which is consistent with our overall business
growth in 2024.
Gross profit and gross profit margin
We recorded a gross profit of RMB46.6 million for 2024, compared with gross loss of RMB0.1
million for 2023. Our gross loss position for 2023 was primarily attributable to a strategic initiative to
accelerate market share growth through a more competitive pricing strategy in response to intensifying
competition in the power amplifier audio chip sector and successfully drove a notable increase in sales
volume, particularly for our low-power audio chips. While the pricing adjustment temporarily impacted
our gross margin, it significantly reinforced our competitive positioning. Furthermore, due to the
economies of scale, we were able to reduce our unit costs for our chip products. We believe this
approach will deliver long-term value by expanding our customer base and strengthening our market
presence. The significant growth in gross profit in 2024 was primarily driven by our rapidly expanding
market share, an increasingly diversified product portfolio, and frequent product upgrade under which
FINANCIAL INFORMATION
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we are able to provide products with lower cost structure. These factors not only enhanced our
competitiveness but also enabled us to better meet diverse customer needs and capture new market
opportunities.
Our gross profit margin of 13.1% for 2024 was primarily driven by the following factors: (1) we
leveraged economies of scale to optimize supply chain strategy and strengthen supplier bargaining
power, and reduced procurement costs; (2) revenue growth significantly outpaced the increase in cost of
sales, supported by strong sales of portable power amplifier audio chips, which had higher gross profit
margin compared to adaptive power control audio chips; and (3) a richer product portfolio with a higher
proportion of high-margin offerings.
 Low-power audio chips. Our gross profit from low-power audio chips (before
impairment losses on inventories) increased significantly from RMB3.9 million in 2023
to RMB40.9 million in 2024, and our gross profit margin for low-power audio chips
increased from 2.7% in 2023 to 12.7% in 2024, primarily due to the increases in gross
profit margin of both our adaptive power control audio chips from 1.5% in 2023 to
11.0% in 2024 and portable power amplifier audio chips from 6.4% in 2023 to 14.5% in
2024. The margin improvements were mainly attributable to (i) economies of scale and
enhanced supply chain stability, which lowered our materials and processing cost; (ii) a
higher sales contribution from portable power amplifier audio chips, which had
relatively high gross profit margins compared to adaptive power control audio chips.
 Mid/high-power audio chips. Our gross profit from mid/high-power audio chips increased
by 44.8% from RMB3.3 million in 2023 to RMB4.8 million in 2024, primarily due to the
rapid increase in sales volume from approximately 3.3 million in 2023 to 11.7 million in
2024, driven by our overall business growth in 2024. Our gross profit margin for
mid/high-power audio chips decreased from 38.5% in 2023 to 18.1% in 2024, primarily due
to a strategic adoption of a short-term competitive pricing approach, resulting in lower ASP
to accelerate market share expansion. This approach focused on actively promoting our
FS2015 series, which carries a lower ASP. As a result, the revenue contribution from the
FS2015 series increased from 53.1% of our total revenue from mid/high-power audio chips
in 2023 to 86.8% in 2024, while the contribution from the higher-ASP FS2119 series
decreased from 46.9% to 13.2% over the same period. The ASP for the FS2015 series
decreased from RMB2.41 in 2023 to RMB2.19 in 2024, while the ASP for the FS2119 series
remained stable at approximately RMB3.00 and RMB3.05 in 2023 and 2024, respectively.
This deliberate shift in product mix led to a lower overall ASP for this product category.
This competitive pricing strategy was a proactive promotional measure for our product
transition and was not a reaction to intense price competition from rivals in the market.
 Haptic drivers. Our gross profit from haptic drivers increased significantly from RMB0.5
million in 2023 to RMB3.5 million in 2024, primarily driven by our overall business growth
in 2024. Our gross profit margin for haptic drivers increased from 52.6% in 2023 to 64.7%
in 2024, primarily because our haptic drivers were newly launched in 2023 which initial
margin was not indicative.
 Others. We recorded gross profit from power management chip products of RMB39
thousand and gross profit margin of 15.7% in 2024.
Other income and gains
Our other income and gains increased by 20.2% from RMB8.0 million in 2023 to RMB9.6 million
in 2024, primarily due to an increase in the net foreign exchange differences. This was mainly
attributable to an increase in USD-denominated trade receivables, resulting from the depreciation of the
Renminbi against the U.S. dollar during the period.
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Selling and marketing expenses
Our selling and marketing expenses increased by 10.5% from RMB18.9 million in 2023 to
RMB20.8 million in 2024, primarily due to the increase in overall salaries and bonuses to marketing
personnel, driven by our overall business growth in 2024.
Administrative expenses
Our administrative expenses remained relatively stable, and recorded RMB20.4 million in 2023
and RMB19.7 million in 2024.
Research and development costs
Our research and development costs increased by 14.8% from RMB59.3 million in 2023 to
RMB68.1 million in 2024, primarily due to an increase in employee compensation, attributable
primarily to the rising R&D staff headcount and salaries.
Impairment losses on financial assets, net
Our recognized net impairment losses on financial assets amount to RMB0.2 million in 2023 and
RMB0.1 million in 2024.
Other expenses
Our other expenses increased significantly from approximately RMB1 thousand in 2023 to
RMB0.2 million in 2024, primarily due to an interest which arose from a conditional government grant
that required us to repay the subsidy with interest when we relocated from Xiamen to Shanghai.
Finance costs
Our finance costs increased by 69.5% from RMB0.8 million in 2023 to RMB1.4 million in 2024,
primarily because of the growth in interest-bearing bank borrowings to fund our business expansion in
2024.
Changes in the carrying amounts of redemption liabilities
In 2023 and 2024, we recognized changes in the carrying amounts of redemption liabilities of
RMB2.5 million and RMB2.7 million, respectively, relating to the accrued interests on a financial
liability of RMB30.0 million arising from one of our Pre-IPO Investors’ redemption rights. Upon the
Listing, we expect that our redemption liabilities will automatically be re-classified to equity and
therefore no more changes in carrying amount of the redemption liabilities will be recognized on our
consolidated statements of profit or loss.
Income tax expense
We did not recognize any income tax expense in 2023 and 2024.
Loss for the year
In light of our efforts in revenue generation and products commercialization, our loss for the year
decreased by 39.6% from RMB94.1 million in 2023 to RMB56.8 million in 2024.
Y ear Ended December 31, 2023 Compared to Y ear Ended December 31, 2022
Revenue
Our revenue increased by 15.3% from RMB130.3 million in 2022 to RMB150.3 million in 2023,
primarily due to the increase in revenue from all product lines for the reasons discussed below.
FINANCIAL INFORMATION
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 Low-power audio chips. Our revenue from low-power audio chips increased by 11.3% from
RMB126.4 million in 2022 to RMB140.6 million in 2023, primarily because our revenue
from adaptive power control audio chips increased by 26.5% from RMB82.5 million in 2022
to RMB104.4 million in 2023, underpinned by strong sales volume expansion of our
adaptive power control audio chips from approximately 90.6 million in 2022 to 186.7
million in 2023. This increase was partially offset by a decline in revenue from PA audio
chips by 17.3% from RMB43.8 million in 2022 to RMB36.3 million in 2023 mainly due to
the decrease in the average selling price of PA audio chips from RMB1.70 per unit in 2022
to RMB1.31 per unit in 2023. We adopted a strategic initiative in 2023 to accelerate market
share growth through a more competitive pricing strategy in response to intensifying
competition in the power amplifier audio chip sector, successfully driving a notable increase
in sales volume, particularly for our low-power audio chips. While the pricing adjustment
temporarily impacted our gross margin, it significantly reinforced our competitive
positioning indicated by our increased sales volume.
 Mid/high-power audio chips. Our revenue from mid/high-power audio chips increased
significantly from RMB4.0 million in 2022 to RMB8.7 million in 2023, primarily due to the
increases in both our sales volume from approximately 1.8 million units in 2022 to
approximately 3.3 million units in 2023 and the average selling price from RMB2.23 per
unit in 2022 to RMB2.65 per unit in 2023, reflecting our established technical advantages
and enhanced business relationship with brand customers.
 Haptic drivers. We started to generate revenue from haptic drivers in 2023 and recognized
revenue from haptic drivers of RMB1.0 million in 2023.
Cost of sales
Our cost of sales increased by 24.5% from RMB120.8 million in 2022 to RMB150.4 million in
2023, primarily due to an increase in material and processing costs driven by the rapid growth in sales
volume of our audio chip products, partially offset by a decrease in impairment loss of inventories.
Gross profit and gross profit margin
We recorded a gross profit of RMB9.5 million and a gross profit margin of 7.3% for 2022,
compared with gross loss of RMB0.1 million for 2023. This temporary decline was primarily
attributable to a strategic initiative to accelerate market share growth through a more competitive
pricing strategy in response to intensifying competition in the power amplifier audio chip sector. As a
result, our revenue increased from RMB130.3 million in 2022 to RMB150.3 million in 2023, and
further increased to RMB355.2 million in 2024.
 Low-power audio chips. Our gross profit from and gross profit margin for low-power audio
chips (before impairment losses on inventories) decreased significantly from RMB21.5
million and 17.0% in 2022 to RMB3.9 million and 2.7% in 2023, respectively, primarily due
to our decreased average selling price of adaptive power control audio chips from RMB0.91
per unit to RMB0.56 per unit, and our decreased average selling price of portable power
amplifier audio chips from RMB1.70 per unit to RMB1.31 per unit. This downward was
mainly attributable to our strategic adoption of a relatively more competitive pricing
approach to prioritize market share expansion.
 Mid/high-power audio chips. Our mid/high-power audio chips realized a significant
increased from a gross loss of RMB29 thousand in 2022 to a gross profit of RMB3.3 million
in 2023. Our gross profit margin for mid/high-power audio chips increased to 38.5%. The
growth was primarily due to (i) the relatively high cost during the initial trial production
phase in 2022, which was not indicative and (ii) our successful market entry in 2023,
supported by our established technical advantages and enhanced business relationship with
brand customers.
FINANCIAL INFORMATION
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 Haptic drivers. Our gross profit from haptic drivers was RMB0.5 million and gross profit
margin for haptic drivers was 52.6% in 2023.
Other income and gains
Our other income and gains decreased by 21.3% from RMB10.1 million in 2022 to RMB8.0
million in 2023, primarily due to an decrease in the net foreign exchange differences, partially offset by
an increase in government grants and an increase in bank interest income, which resulted from
adjustments to our financing strategies aimed at optimizing deposit structures based on interest rate
differentials across currencies.
Selling and marketing expenses
Our selling and marketing expenses increased by 8.4% from RMB17.4 million in 2022 to
RMB18.9 million in 2023, primarily due to an increase in employee benefit expenses including
primarily the salaries, wages and bonuses for our marketing personnel and an increase in business
development and traveling expenses, representing our increased marketing effort amid the global
economic downturn.
Administrative expenses
Our administrative expenses increased by 11.5% from RMB18.3 million in 2022 to RMB20.4
million in 2023, primarily due to (1) an increase in employee benefit expenses including primarily the
salaries, wages and bonuses for our administrative personnel; and (2) an increase in traveling expenses.
Research and development costs
Our research and development costs increased by 21.7% from RMB48.7 million in 2022 to
RMB59.3 million in 2023, primarily driven by the expansion of our R&D initiatives, which required
additional personnel and resources. As a result, employee compensation rose due to both higher
headcount and increased salaries. Additionally, there was a moderate rise in the cost of materials and
consumables to support the broader scope of R&D activities.
Impairment losses on financial assets, net
We recognized net impairment losses on financial assets of RMB0.1 million in 2022 and RMB0.2
million in 2023, primarily because trade receivable increased from RMB14.2 million as of December
31, 2022 to RMB30.5 million as of December 31, 2023.
Other expenses
Our other expenses decreased from approximately RMB10 thousand in 2022 to RMB1 thousand in
2023, primarily because we donated RMB10 thousand to Xiamen University in 2022.
Finance costs
Our finance costs increased significantly from RMB0.2 million in 2022 to RMB0.8 million in
2023, primarily due to the rise in interest-bearing bank borrowings to support our growing operational
needs to fund the expansion of our business scale and sales volume.
Changes in the carrying amounts of redemption liabilities
In 2022 and 2023, we recognized changes in the carrying amounts of redemption liabilities of
RMB0.8 million and RMB2.5 million, respectively, relating to the accrued interests on a financial
liability of RMB30.0 million arising from aforementioned redemption rights. Upon the Listing, we
expect that our redemption liabilities will automatically be re-classified to equity and therefore no more
changes in carrying amount of the redemption liabilities will be recognized on our consolidated
statements of profit or loss.
FINANCIAL INFORMATION
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Income tax expense
We did not recognize any income tax expense in 2023. We recognized an income tax expense of
approximately RMB3 thousand in 2022, because of the taxation arising from non-recurring interest
income generated by bank deposits held by one of our subsidiary.
Loss for the year
As a result of the foregoing, our loss for the year increased by 42.8% from RMB65.9 million in
2022 to RMB94.1 million in 2023. This temporary decline in 2023 was primarily attributable to a
strategic initiative to accelerate market share growth through a more competitive pricing strategy.
DISCUSSION OF CERTAIN BALANCE SHEET ITEMS
The following table sets forth our consolidated statements of financial position as of the dates
indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Non-current assets
Pledged time deposits .............. — 20,577 21,197 —
Property, plant and equipment ........ 19,988 18,482 14,768 10,789
Right-of-use asset ................. 3,666 6,201 3,648 1,453
Prepayments, deposits and other
receivables ..................... 1,102 829 831 139
Other intangible assets .............. 413 365 434 553
Non-pledged time deposits ........... 51,769 32,220 — —
Total non-current assets ............. 76,938 78,674 40,878 12,934
Current assets
Inventories ...................... 65,143 65,517 111,921 129,554
Trade receivable .................. 14,153 30,457 41,901 47,797
Prepayments, deposits and other
receivables ..................... 18,676 20,288 27,448 17,329
Non-pledged time deposits ........... — 21,420 33,204 —
Restricted cash ................... — 5——
Pledged time deposits .............. — — — 21,707
Cash and cash equivalents ........... 182,899 105,325 66,075 73,463
Total current assets ................. 280,871 243,012 280,549 289,850
Current liabilities
Trade payables ................... 11,557 16,069 35,462 27,597
Other payables and accruals .......... 9,422 10,960 12,704 9,970
Contract liabilities ................. 2,414 4,747 7,761 2,279
Interest-bearing bank borrowings ...... — 36,677 40,030 80,540
Lease liabilities ................... 2,331 2,890 2,559 1,251
Provision ....................... 995 2,213 4,460 3,974
Redemption liabilities .............. 30,775 33,244 35,911 38,281
Total current liabilities .............. 57,494 106,800 138,887 163,892
Net current assets .................. 223,377 136,212 141,662 125,958
Total assets less current liabilities ...... 300,315 214,886 182,540 138,892
Non-current liabilities
Interest-bearing bank borrowings ...... — — 19,696 19,600
Lease liabilities ................... 1,976 3,432 971 60
Deferred income .................. — — — 2,871
Total non-current liabilities ........... 1,976 3,432 20,667 22,531
Net assets ........................ 298,339 211,454 161,873 116,361
FINANCIAL INFORMATION
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As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Equity
Equity attributable to owners of the parent
Paid-in capital .................... 26,122 26,122 26,122 100,000
Reserves ........................ 272,217 185,332 135,751 16,361
Total equity ....................... 298,339 211,454 161,873 116,361
For details on the accounting treatment of redemption rights of pre-IPO investments, see
“—Share Capital and Total Equity” below and note 26 to the Accountants’ Report set out in Appendix I
to this prospectus. See note 28 to the Accountants’ Report in Appendix I to this prospectus for further
details of the financial impacts.
During the Track Record Period, the decline in net assets was primarily attributable to
accumulated net losses incurred over the years. The decrease in net current assets during the Track
Record Period, except for from as of December 31, 2023 to as of December 31, 2024, was driven by
the our Company’s expanding revenue scale, which necessitated increased operating expense outlays.
The increase in current liabilities exceeded the growth in current assets during the Track Record Period,
except for the current liabilities from as of December 31, 2023 to the current liabilities as of December
31, 2024, resulting in the reduction of net current assets. Our net current assets increased from
RMB136.2 million as of December 31, 2023 to RMB141.7 million as of December 31, 2024, primarily
due to a rise in inventories, non-pledged time deposits, trade receivables, and prepayments, which
outweighed the increase in trade payables.
Pledged Time Deposits
Our pledged time deposits during the Track Record Period were primarily related to two RMB10.0
million loans secured by large-denomination certificates of deposit. We recorded pledged time deposits
of nil, RMB20.6 million, RMB21.2 million and RMB21.7 million as of December 31, 2022, 2023, 2024
and October 31, 2025, respectively.
Property, Plant and Equipment
Our property, plant and equipment consist primarily of (1) machinery, mainly including automated
test equipment and acoustic test equipment, (2) office equipment and electronic devices, (3) leasehold
improvements, (4) vehicles and (5) construction in progress. The following table sets forth the carrying
amount of our property, plant and equipment as of the dates indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Machinery ........................ 17,270 17,235 14,013 10,349
Office equipment and electronic devices ... 414 528 298 228
Leasehold improvements .............. 432 451 229 63
Vehicles .......................... 398 268 138 29
Construction in progress .............. 1,474 — 90 120
Total ............................ 19,988 18,482 14,768 10,789
Our property, plant and equipment decreased by 7.5% from RMB20.0 million as of December 31,
2022 to RMB18.5 million as of December 31, 2023 and further decreased by 20.1% to RMB14.8
million as of December 31, 2024 and 26.9% to RMB10.8 million as of October 31, 2025, primarily due
FINANCIAL INFORMATION
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--- page 238 ---
to the depreciation in machinery, in line with standard depreciation schedules and partially offset by the
purchase of new equipment. We recorded construction in progress of RMB1.5 million in 2022,
primarily represent machinery in the process of being installed.
Right-of-use Assets
Our right-of-use assets consist primarily of buildings representing our leased offices. Our
right-of-use assets increased by 69.1% from RMB3.7 million as of December 31, 2022 to RMB6.2
million as of December 31, 2023, primarily due to addition of a newly leased office in Shenzhen and
the renewal of an existing lease in Shanghai, partially offset by depreciation related to the higher rental
expense of the new leased office in Shenzhen. Our right-of-use assets then decreased by 41.2% to
RMB3.6 million as of December 31, 2024, and further to RMB1.5 million as of October 31, 2025,
primarily as a result of normal depreciation in the ordinary course of business.
Prepayments, Deposits and Other Receivables
Our prepayments, deposits and other receivables during the Track Record Period primarily consist
of (1) prepayments to suppliers; (2) other tax recoverable representing input V AT credit carry-forward;
(3) non-current rent deposits and property management fee deposits, (4) current deposits and other
receivables, mainly relating to deposits for our leased offices and bid bond; (5) non-current
prepayments for long-term assets representing decoration expenses; and (6) listing expenses. The
following table sets forth the details of our prepayments, deposits and other receivables as of the dates
indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Current
Prepayments to suppliers .............. 9,329 12,440 7,205 8,783
Other tax recoverable ................ 8,823 7,382 19,798 5,298
Deposits and other receivables .......... 524 466 445 1,151
Listing fee ........................ — — — 2,097
Subtotal .......................... 18,676 20,288 27,448 17,329
Non-current
Rent deposits and property management
fee deposits ...................... 798 829 831 139
Prepayments for long-term assets ........ 304 — — —
Subtotal .......................... 1,102 829 831 139
Total ............................ 19,778 21,117 28,279 17,468
Our prepayments, deposits and other receivables increased by 6.8% from RMB19.8 million as of
December 31, 2022 to RMB21.1 million as of December 31, 2023, primarily due to an increase in
prepayments to suppliers, representing a higher wafer procurement prepayments. Our prepayments,
deposits and other receivables then increased by 33.9% to RMB28.3 million as of December 31, 2024,
primarily due to an increase in V AT recoverable, representing an increase of procurement to satisfy our
customer demand. The increase was partially offset by a reduction in prepayments to suppliers,
reflecting a lower prepayment ratio to our largest supplier as a result of our supply chain integration
efforts. Our prepayments, deposits and other receivables then decreased by 38.2% to RMB17.5 million
as of October 31, 2025, primarily due to the decrease in other tax recoverable from RMB19.8 million as
of December 31, 2024 to RMB5.3 million as of October 31, 2025, primarily attributable to V AT refunds
received related to V AT export declaration. As of October 31, 2025, the majority of unclaimed export
refund declarations had been processed.
FINANCIAL INFORMATION
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Inventories
We had inventories of RMB65.1 million, RMB65.5 million, RMB111.9 million and RMB129.6
million as of December 31, 2022, 2023 and 2024 and October 31, 2025, respectively. The following
table sets forth the details of our inventories as of the dates indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Raw materials ...................... 19,701 14,631 19,726 40,352
Work in process .................... 6,908 33,528 65,846 64,297
Finished goods ..................... 51,564 27,335 34,241 32,135
Less: Provision for inventories ......... (13,030) (9,977) (7,892) (7,230)
Total ............................ 65,143 65,517 111,921 129,554
Our inventories remained relatively stable at RMB65.1 million as of December 31, 2022 and
RMB65.5 million as of December 31, 2023, primarily because of the decreases in finished goods,
mainly relating to our increased sales in low-power audio chips in 2023, partially offset by the increase
in work in progress mainly relating to our increased manufacturing to support anticipated demand
growth for power amplifier audio chip products. Our inventories further increased by 70.8% to
RMB111.9 million as of December 31, 2024, primarily due to the increases in raw materials, work in
process and finished goods, mainly as a result of the overall business growth in 2024 which led to
increased production in order to capture market opportunities and meet anticipated customer demand.
Our inventories further increased to RMB129.6 million as of October 31, 2025, primarily due to our
effort to build up our raw material reserves to prepare for future orders.
We recorded provision for inventories during the Track Record Period, primarily in connection
with (1) the net realizable value of certain inventories fell below cost and (2) specific provisions for
obsolete or unsellable items, such as long-aged products. The provision for inventories decreased by
23.4% from RMB13.0 million as of December 31, 2022 to RMB10.0 million as of December 31, 2023,
and further decreased by 20.9% to RMB7.9 million as of December 31, 2024, primarily due to higher
sales volume and improved market presence, which lowered the required level of inventory provision.
Our provision for inventories remained relatively stable at RMB7.2 million as of October 31, 2025.
The following table sets forth our inventory aging analysis as of the dates indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
Within one year ........................ 78,173 67,244 103,543 120,666
One to two years ....................... — 8,249 10,678 4,948
More than two years ..................... — — 5,592 3,940
Total ................................ 78,173 75,493 119,813 129,554
FINANCIAL INFORMATION
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The following table sets forth our inventory turnover days for the periods indicated.
Y ear ended December 31,
Ten months
ended
October 31,
2022 2023 2024 2025
Inventory turnover days (1) ................. 119.3 158.5 104.9 163.4
(1) The inventory turnover days are calculated by dividing the arithmetic mean of the opening and ending balance of
inventories in that period by cost of sales for the corresponding period and then multiplying by the number of days in that
period (i.e., 365 days for a given year).
We had a prolonged cash conversion cycle, as our inventory turnover days are 119.3, 158.5, 104.9
and 163.4 in 2022, 2023, 2024 and the ten months ended October 31, 2025, primarily due to the long
cycle for raw material stocking and finished goods. According to the Frost & Sullivan, our inventory
turnover days are generally comparable with our competitors. We had relatively long inventory turnover
days in 2023 and the ten months ended October 31, 2025, primarily due to challenges in accurately
forecasting customer demand amid market volatility. We will proactively manage our cash conversion
cycle through a focused set of strategies. We will utilize diversified funding sources, including debt and
equity financing, to support our working capital requirements. Furthermore, we will implement more
refined inventory management controls to enhance our inventory turnover rates and actively negotiate
payment terms with customers to accelerate receivables collection and improve our accounts receivable
turnover ratio.
The successful execution of these strategies is expected to yield significant positive impacts on
our operations and financial performance. By enhancing inventory management, we will increase
operational efficiency and minimize the risk of inventory obsolescence. Consequently, these actions will
generate stronger operating cash flows, providing greater financial flexibility to fund strategic growth
initiatives. A shorter cash conversion cycle will also contribute to reduced interest expenses, thus
improving overall profitability and key financial ratios.
In addition, based on our established policy, inventories are assessed for impairment at the end of
each reporting period by comparing their carrying value with their net realizable value. We perform
such review on a quarterly basis, incorporating the most recent sales data and product cost information
to ensure the net realizable value reflects current market conditions. As of January 31, 2026, RMB81.2
million, or 62.7% of our inventories as of October 31, 2025 had been subsequently sold.
Trade Receivables
We had trade receivables of RMB14.2 million, RMB30.5 million, RMB41.9 million, RMB47.8
million as of December 31, 2022, 2023, 2024 and October 31, 2025, respectively. The following table
sets forth the details of our trade receivables as of the dates indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Trade receivables .................. 14,296 30,765 42,325 48,280
Less: impairment of trade receivables .... (143) (308) (424) (483)
Trade receivables, net ............... 14,153 30,457 41,901 47,797
Our trade receivables increased significantly from RMB14.2 million as of December 31, 2022 to
RMB30.5 million as of December 31, 2023, and further by 37.6% to RMB41.9 million as of December
31, 2024, primarily due to our overall business growth, primarily attributable to the increase in our
direct sales and qualified distributors with credit terms, which led to an increase in trade receivables.
Our trade receivables remained relatively stable at RMB47.8 million as of October 31, 2025.
FINANCIAL INFORMATION
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We provide credit terms to certain customers with satisfied creditworthiness and long-term
relationship. Our credit period with customers for sales on credit generally ranges from 30 to 90 days.
Each customer has a maximum credit limit. The following table sets forth our trade receivables
turnover days for the periods indicated.
Y ear ended December 31,
Ten months
ended
October 31,
2022 2023 2024 2025
Trade receivables turnover days (1) ........... 22.2 54.2 37.2 48.6
(1) The trade receivables turnover days are calculated by dividing the arithmetic mean of the opening and ending balance of
trade receivables in that period by revenue for the corresponding period and then multiplying by the number of days in that
period (i.e., 365 days for a given year).
We had relatively long trade receivables turnover days of 54.2 days in 2023, primarily because we
granted credit periods to more customers.
The following table sets forth an aging analysis of our trade receivables based on invoice date and
net of loss allowance as of the dates indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Within three months ................. 12,521 30,457 41,901 47,607
Three to six months ................. 1,632 — — 190
Total ............................ 14,153 30,457 41,901 47,797
As of January 31, 2026, all of our trade receivables as of October 31, 2025 had been settled.
Trade Payables
We had trade payables of RMB11.6 million, RMB16.1 million, RMB35.5 million and RMB27.6
million as of December 31, 2022, 2023, 2024 and October 31, 2025, respectively. Our trade payables
increased during the Track Record Period, generally in line with our increased procurement to meet the
growing demand of our products.
Our trade payables are non-interest-bearing and are normally settled within 30 to 60 days upon
receipt of the V AT invoice. The following table sets forth our trade payables turnover days for the
periods indicated.
Y ear ended December 31,
Ten months
ended
October 31,
2022 2023 2024 2025
Trade payables turnover days (1) ............. 26.4 33.5 30.5 42.7
(1) The trade payables turnover days are calculated by dividing the arithmetic mean of the opening and ending balance of
trade payables in that period by cost of sales for the corresponding period and then multiplying by the number of days in
that period (i.e., 365 days for a given year).
Our trade payables turnover days remained relatively stable at 26.4 days, 33.5 days, 30.5 days and
42.7 days in 2022, 2023, 2024 and the ten months ended October 31, 2025, respectively.
FINANCIAL INFORMATION
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The following table sets forth an aging analysis of our trade payables based on invoice dates as of
the dates indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Within one year .................... 11,557 15,962 34,748 26,995
One to two years ................... — 107 641 363
Two to three years .................. — — 73 206
Three to four years .................. ———3 3
Total ............................ 11,557 16,069 35,462 27,597
As of January 31, 2026, RMB26.0 million, or approximately 94.3%, of our trade payables as of
October 31, 2025 had been settled.
Other Payables and Accruals
Our other payables and accruals during the Track Record Period primarily consisted of (1) accrued
listing expenses, (2) payroll and welfare payable, (3) government grants subject to conditions, (4)
accrued expenses, (5) other tax payables and (6) others which mainly consisted of employee
reimbursements payable. The following table sets forth the details of our other payables and accruals as
of the dates indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Accrued listing expenses ............. — — — 2,984
Payroll and welfare payable ............ 6,345 7,951 11,202 5,743
Government grants subject to conditions .. 1,600 1,600 — —
Accrued expenses ................... 767 445 276 38
Other tax payables .................. 469 534 850 969
Others ........................... 241 430 376 236
Total ............................ 9,422 10,960 12,704 9,970
Our other payables and accruals increased by 16.3% from RMB9.4 million as of December 31,
2022 to RMB11.0 million as of December 31, 2023, by 15.9% to RMB12.7 million as of December 31,
2024, primarily due to an increase in payroll and welfare payable, representing an increase in employee
compensation in line with our expanding workforce. Our other payables and accruals further decreased
by 21.5% to RMB10.0 million as of October 31, 2025, primarily due to a decrease in payroll and
welfare payable as management anticipated lower bonuses, which was partially offset by an increase in
accrued listing expenses.
Our government grants subject to conditions were RMB1.6 million, RMB1.6 million, nil, and nil
in 2022, 2023, 2024 and the ten months ended October 31, 2025, primarily because we have relocated
from Xiamen to Shanghai in 2021, thus we are required to refund government subsidies from Xiamen
government which were fully refunded in 2024.
Contract Liabilities
Our contract liabilities primarily represent the advance consideration received from our customers
while the underlying goods are yet to be provided by us. Our contract liabilities increased from
RMB2.4 million as of December 31, 2022 to RMB4.7 million as of December 31, 2023 and further, to
FINANCIAL INFORMATION
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RMB7.8 million as of December 31, 2024, primarily due to our business growth during the Track
Record Period, and the corresponding increase in year-end undelivered goods or unaccepted shipments.
Our contract liabilities decreased to RMB2.3 million as of October 31, 2025, primarily due to the
decrease in advances received from customers and more products obligations were satisfied at the end
of October 2025.
Provision
We recorded provision for product warranties that we provided to customers during the warranty
period. Provision is therefore made for the best estimate of the expected settlement under these
agreements in respect of sales made within the warranty periods prior to the end of each reporting
period. The amount of provision takes into account our recent claim experience and is only made where
a warranty claim is probable. We recorded provision of RMB1.0 million, RMB2.2 million and RMB4.5
million as of December 31, 2022, 2023 and 2024, respectively, generally in line with our sales growth
during the Track Record Period. Our provision decreased to RMB4.0 million as of October 31, 2025,
primarily due to certain special warranty provision has been settled or paid.
SHARE CAPITAL AND TOTAL EQUITY
Prior to the Relevant Periods and until August 18, 2022, the Company entered into respective
investment agreements for the subscription of Shares with various pre-IPO Investors for total net cash
proceeds of approximately RMB526,500,000. Of these, as of August 18, 2022, 16,907,470 Shares
issued for total net cash proceeds of approximately RMB526,400,000 (collectively the “ Pre-IPO
Investments ”), carried special rights (“ Special Rights ”) granted by the Company.
Pursuant to the aforementioned agreements, including the investment agreement entered among
the Company, Mr. Xu and the Pre-IPO Investors (including Huzhou Zhuosheng) (the “ Pre-IPO
Investors ”) on August 18, 2022 (the “ Investment Agreement ”) and the supplemental agreement to the
Investment Agreement entered among the Company, Mr. Xu and the Pre-IPO Investors (including
Huzhou Zhuosheng) on August 18, 2022 (the “ First Supplemental Agreement ”), the Pre-IPO Investors
were granted Special Rights which included redemption rights, anti-dilution rights, information rights,
co-sale rights, right of first refusal and liquidation preferences granted by the Company, as well as
redemption rights granted by Mr. Xu.
Prior to their termination, only certain information rights and director nomination rights among
the Special Rights granted by the Company had been exercised in the ordinary course for governance
and information purposes. There was no exercise of any redemption or other financial Special Rights
granted by the Company throughout the Relevant Periods.
On April 30, 2025, the Company and the Pre-IPO Investors except for Huzhou Zhuosheng Equity
Investment Partnership (Limited Partnership) (“ Huzhou Zhuosheng ”) subsequently entered into a
supplemental agreement (the “ Second Supplemental Agreement ”), pursuant to which the redemption
rights granted by the Company to such Pre-IPO Investors (excluding Huzhou Zhuosheng) were
irrevocably terminated and became void ab initio. Prior to the execution of the Second Supplemental
Agreement, only certain information rights and director nomination rights under the Investment
Agreement and the First Supplemental Agreement had been exercised by the Pre-IPO Investors.
Subsequently, on June 27, 2025, the Company, Mr. Xu and the Pre-IPO Investors (excluding Huzhou
Zhuosheng) entered into a further supplemental agreement (the “ Third Supplemental Agreement ”),
pursuant to which (i) all other remaining Special Rights granted by the Company to such Pre-IPO
Investors (including pre-emptive rights, anti-dilution rights, liquidation preferences and other rights as
listed above) were terminated, effective on the date immediately preceding the Listing, and (ii) the
redemption rights granted by Mr. Xu to such Pre-IPO Investors were terminated, effective on the date
preceding the first submission of the listing application. Taking into account the legal and regulatory
framework of the Company’s jurisdiction and the governing law of the supplemental agreements, the
directors considered that it is appropriate to present the Pre-IPO Investments except for Huzhou
Zhuosheng as equity.
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For the details of redemption liabilities recognized related to Huzhou Zhuosheng, please refer to
Note 26 to the Accountants’ Report in Appendix I to this prospectus.
Had the Special Rights granted by the Company to the Pre-IPO Investors been accounted for as
financial liabilities measured at present value of the redemption amount prior to entering into the
supplemental agreements, (i) the redemption financial liabilities, total current liabilities, net current
liabilities and net liabilities would have been:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Redemption financial liabilities ........... 697,684 811,676 876,794
Total current liabilities ................. 724,403 885,232 979,770
Net current liabilities .................. (443,532) (642,220) (699,221)
Net liabilities ........................ (368,570) (566,978) (679,010)
(ii) the changes in the carrying amounts of redemption liabilities, the net loss for the year, basic and
dilutive loss per share would have been:
For the year ended December 31,
For the ten months ended
October 31,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Changes in the carrying amounts of
redemption liabilities ............. (44,575) (59,220) (65,118) (53,914) (34,537)
Total net loss ..................... (109,702) (150,881) (119,295) (98,582) (83,943)
Loss per share
Basic and diluted (RMB) ............ (1.27) (1.51) (1.19) (0.99) (0.84)
See note 28 to the Accountants’ Report in Appendix I to this prospectus for further details of the
financial impacts.
LIQUIDITY AND CAPITAL RESOURCES
Our primary uses of cash are to fund our working capital requirements and other recurring
expenses. During the Track Record Period, we financed our capital expenditures and working capital
requirements principally with funds from capital contribution from our Shareholders, cash generated
from our operations and bank borrowings. After the Global Offering, we believe that our liquidity
requirements will continue to be satisfied with cash generated from our operations, bank borrowings
and net proceeds from the Global Offering. As of December 31, 2022, 2023, 2024 and October 31,
2025, we had cash and cash equivalents of RMB182.9 million, RMB105.3 million, RMB66.1 million
and RMB73.5 million. As of December 31, 2022, 2023, 2024 and October 31, 2025, our bank facilities
available for use were nil, RMB65.0 million, RMB90.0 million and RMB170.0 million, respectively. As
of the same dates, we had utilized nil, RMB36.6 million, RMB59.7 million and RMB99.9 million,
respectively. We do not anticipate any changes to the availability of financing to fund our operations in
the future.
Taking into account the financial resources available to us, including bank facilities, and the
estimated net proceeds from the Global Offering, our Directors are of the view, and the Joint Sponsors
concur, that we have sufficient working capital to meet our present requirements and for the next 12
months from the date of this prospectus.
Our cash burn rate refers to the average monthly (1) net cash used in operating activities, (2)
purchases of items of property, plant and equipment, and (3) purchases of other intangible assets and
(4) lease payments. Our historical cash burn rate was RMB10.3 million, RMB8.0 million, RMB7.3
million, RMB5.7 million and RMB6.0 million in 2022, 2023, 2024 and the ten months ended October
FINANCIAL INFORMATION
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31, 2024 and 2025, respectively, mainly representing our investment in R&D activities. We had cash
and cash equivalents, unutilized bank facilities and current non-pledged time deposits of RMB73.5
million, RMB70.1 million and nil as of October 31, 2025, respectively. Assuming that no proceeds from
the global offering are taken into account, that the average cash burn rate going forward will be
RMB6.0 million, similar to the cash burn rate level in the ten months ended October 31, 2025, we
estimate that our cash and cash equivalents, unutilized bank facilities and current non-pledged time
deposits as of October 31, 2025 will be able to maintain our financial viability for 23.7 months, which
means we are expected to maintain sufficient working capital until October, 2027. We estimate that we
will receive net proceeds of approximately HK$480.3 million after deducting the underwriting fees and
expenses payable by us in the Global Offering, assuming no Over-allotment Option is exercised and
assuming an Offer Price of HK$40.00 per Offer Share, being the low-point of the indicative Offer Price
range in this prospectus, if we also take into account our intended use of proceeds for future expansion
plans, including the establishment of a new R&D center, potential acquisitions, and additional
headcount increase, the estimated net proceeds from the Listing, 29.97 months, which means we are
expected to maintain sufficient working capital until April, 2028. We will continue to monitor our cash
flows from operations closely and expect to raise our next round of financing, if needed, with a
minimum buffer of 12 months. We have no plan for the next round of financing.
Cash Flows
The following table sets forth a summary of our cash flows for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Operating loss before changes in
working capital ............. (48,832) (73,914) (42,594) (33,944) (32,157)
Working capital changes .......... (58,015) (17,468) (42,040) (20,215) (26,081)
Cash used in operations ......... (106,847) (91,382) (84,634) (54,159) (58,238)
Interest received ............... 1,040 2,825 1,896 1,692 971
Income tax paid ............... ( 3 ) ————
Net cash used in operating activities . (105,810) (88,557) (82,738) (52,467) (57,267)
Net cash (used in)/from investing
activities .................. (10,416) (23,415) 19,894 19,975 32,322
Net cash from financing activities ... 204,395 32,556 18,676 4,444 34,435
Cash and cash equivalent at beginning
of the year ................. 92,233 182,899 105,325 105,325 66,075
Effects of exchange rate changes on
cash and cash equivalents ....... 2,497 1,842 4,918 2,553 (2,102)
Cash and cash equivalent at end of
year ..................... 182,899 105,325 66,075 79,830 73,463
Net cash used in operating activities
Net cash used in operating activities was RMB57.3 million in the ten months ended October 31,
2025, primarily due to loss before tax of RMB51.8 million, as adjusted for (1) certain non-cash or
non-operating items, primarily including share-based payment expenses of RMB6.1 million,
depreciation of property, plant and equipment of RMB4.7 million, impairment loss on inventories of
RMB1.6 million and finance costs of RMB2.2 million, (2) changes in working capital that negatively
affected the cash flow from operating activities, primarily including (i) a decrease in contract liabilities
of RMB5.5 million; and (ii) an increase in inventories of RMB19.2 million, partially offset by (3)
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changes in working capital that positively affected the cash flow from operating activities, primarily
including (i) a decrease in prepayments, deposits and other receivables of RMB12.9 million; and (ii) an
increase in deferred income of RMB2.9 million.
Net cash used in operating activities was RMB82.7 million in 2024, primarily due to loss before
tax of RMB56.8 million, as adjusted for (1) certain non-cash or non-operating items, primarily
including share-based payment expenses of RMB7.8 million, and depreciation of property, plant and
equipment of RMB5.7 million, (2) changes in working capital that negatively affected the cash flow
from operating activities, primarily including (i) an increase in inventories of RMB49.0 million; (ii) an
increase in trade receivables of RMB11.6 million; and (iii) an increase in prepayments, deposits and
other receivables of RMB7.8 million, partially offset by (3) net foreign exchange differences of
RMB4.8 million and (4) changes in working capital that positively affected the cash flow from
operating activities, primarily including an increase in trade payables of RMB19.4 million.
Net cash used in operating activities was RMB88.6 million in 2023, primarily due to loss before
tax of RMB94.1 million, as adjusted for (1) certain non-cash or non-operating items, primarily
including share-based payment expenses of RMB7.8 million, impairment losses on inventories of
RMB7.8 million and depreciation of property, plant and equipment of RMB5.0 million, (2) changes in
the working capital that negatively affected the cash flow from operating activities, primarily including
(i) an increase in trade receivables of RMB16.5 million; and (ii) an increase in inventories of RMB8.2
million, partially offset by (3) bank interest income of RMB5.3 million and (4) changes in working
capital that positively affected the cash flow from operating activities, primarily including an increase
in trade payables of RMB4.5 million.
Net cash used in operating activities was RMB105.8 million in 2022, primarily due to loss before
tax of RMB65.9 million minus income tax paid of RMB3 thousand, as adjusted for (1) certain non-cash
or non-operating items, primarily including impairment losses on inventories of RMB12.0 million and
share-based payment expenses of RMB7.8 million, (2) changes in the working capital that negatively
affected the cash flow from operating activities, primarily including (i) an increase in inventories of
RMB63.3 million, (ii) an increase in trade receivables of RMB12.6 million and (iii) a decrease in other
payables and accruals of RMB7.3 million, partially offset by (3) net foreign exchange differences of
RMB4.7 million and (4) changes in working capital that positively affected the cash flow from
operating activities, primarily including a decrease in prepayments, deposits and other receivables of
RMB19.0 million and an increase in trade payables of RMB5.6 million.
We intend to improve our net operating cash flow position by implementing targeted measures to
enhance working capital management. Specifically, we plan to tighten credit control procedures by, for
example, linking distributor payments more closely to sales-to-end-customer data to accelerate the
collection of trade receivables.
Furthermore, we will optimize our inventory management by deploying more sophisticated
demand forecasting tools to align production and procurement more accurately with sales projections,
thereby reducing inventory holding levels. Actively negotiating extended payment terms with key
suppliers will also help to retain cash within the business for a longer period. The successful execution
of these strategies is expected to shorten the cash conversion cycle, thereby generating stronger
operating cash flows to fund future growth.
Net cash (used in)/from investing activities
Net cash from investing activities was RMB32.3 million in the ten months ended October 31,
2025, primarily due to withdrawal of non-pledged time deposits of RMB30.0 million.
Net cash from investing activities was RMB19.9 million in 2024, primarily due to (1) withdrawal
of non-pledged time deposits of RMB20.0 million, partially offset by purchases of items of property,
plant and equipment of RMB2.0 million.
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Net cash used in investing activities was RMB23.4 million in 2023, primarily due to (1) purchase
of structured deposits classified as financial assets at fair value through profit or loss of RMB25.0
million; and (2) placement of pledge deposits of RMB20.0 million, partially offset by redemption of
structured deposits classified as financial assets at fair value through profit or loss of RMB25.1 million.
Net cash used in investing activities was RMB10.4 million in 2022, primarily due to (1) purchase
of structured deposits classified as financial assets at fair value through profit or loss of RMB295.0
million; (2) placement of non-pledged time deposits of RMB30.0 million; and (3) purchases of items of
property, plant and equipment of RMB15.6 million, partially offset by (1) redemption of structured
deposits classified as financial assets at fair value through profit or loss of RMB307.5 million and (2)
withdrawal of non-pledged time deposits of RMB20.0 million.
Net cash from financing activities
Net cash from financing activities was RMB34.4 million in the ten months ended October 31,
2025, primarily due to proceeds from interest-bearing bank borrowings of RMB80.0 million, partially
offset by repayment of interest-bearing bank borrowings of RMB39.7 million.
Net cash from financing activities was RMB18.7 million in 2024, primarily due to proceeds from
interest-bearing bank borrowings of RMB69.0 million, partially offset by (1) repayment of
interest-bearing bank borrowings of RMB46.0 million and (2) lease payments of RMB3.2 million.
Net cash from financing activities was RMB32.6 million in 2023, primarily due to proceeds from
interest-bearing bank borrowings of RMB48.6 million, partially offset by (1) repayment of
interest-bearing bank borrowings of RMB12.0 million and (2) lease payments of RMB3.5 million.
Net cash from financing activities was RMB204.4 million in 2022, primarily due to capital
contribution from shareholders of RMB206.7 million, primarily offset by lease payments of RMB2.3
million.
Current Assets and Current Liabilities
The following table sets forth our current assets and liabilities as of the dates indicated.
As of December 31, As of
October 31, 2025
As of
January 31,
20262022 2023 2024
(RMB in thousands)
(unaudited)
Current assets
Inventories .................. 65,143 65,517 111,921 129,554 105,612
Trade receivable ............... 14,153 30,457 41,901 47,797 37,711
Prepayments, deposits and other
receivables ................. 18,676 20,288 27,448 17,329 14,018
Non-pledged time deposits ......... — 21,420 33,204 — —
Pledged time deposits ............ — — — 21,707 —
Restricted cash ................ —5 — — —
Cash and cash equivalents ......... 182,899 105,325 66,075 73,463 148,755
Total current assets .............. 280,871 243,012 280,549 289,850 306,095
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As of December 31, As of
October 31, 2025
As of
January 31,
20262022 2023 2024
(RMB in thousands)
(unaudited)
Current liabilities
Trade payables ................ 11,557 16,069 35,462 27,597 24,772
Other payables and accruals ........ 9,422 10,960 12,704 9,970 7,517
Contract liabilities .............. 2,414 4,747 7,761 2,279 7,061
Interest-bearing bank borrowings ..... — 36,677 40,030 80,540 96,573
Lease liabilities ............... 2,331 2,890 2,559 1,251 780
Provision ................... 995 2,213 4,460 3,974 3,733
Redemption liabilities ............ 30,775 33,244 35,911 38,281 39,030
Total current liabilities ............ 57,494 106,800 138,887 163,892 179,466
Net current assets ............... 223,377 136,212 141,662 125,958 126,629
Our net current assets decreased by 39.0% from RMB223.4 million as of December 31, 2022 to
RMB136.2 million as of December 31, 2023, primarily due to the increase in our interest-bearing bank
borrowings and the decrease in our cash and cash equivalents, partially offset by the increase in current
non-pledged time deposits. Our net current assets then increased slightly to RMB141.7 million as of
December 31, 2024, primarily due to the increases in our inventories, trade receivable and time
deposits, partially offset by the increase in trade payable and the decrease in cash and cash equivalents.
Our net current assets further decreased slightly to RMB126.0 million as of October 31, 2025, primarily
due to the increase in interest-bearing bank borrowings and decrease in non-pledged time deposits,
partially offset by the increase in pledged time deposits. Our net current assets remained relatively
stable at RMB126.6 million as of January 31, 2026.
CASH OPERATING COSTS
The following table sets forth information relating to our key cash operating costs for the periods
indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Workforce employment (1) ......... 52,019 55,294 65,040 54,118 64,579
Research and development costs (2) ... 18,074 19,553 20,918 17,080 13,222
Direct production costs, including
materials (3) ................. 158,221 163,030 357,836 272,565 265,828
Product marketing (4) ............ 1,609 2,534 2,588 2,214 2,118
(1) Cash operating costs relating to workforce employment represent the sum of employee benefit expenses under research and
development expenses, administrative expenses, costs of sales and selling and distribution expenses (excluding share-based
payments expenses which are non-cash in nature) adjusted by changes in working capital relating to employee benefit
expenses as of previous and current period end under the above operating expenses.
(2) Cash operating costs under research and development costs represent research and development expenses (excluding
employee benefit expenses and non-cash items under research and development expenses) adjusted by changes in working
capital relating to research and development activities as of the previous and current period end.
(3) Cash operating costs relating to direct production costs, including materials, represent the costs of sales (excluding
employee benefit expenses and non-cash items under contract fulfillment costs) adjusted by changes in working capital
relating to service and production as of the previous and current period end.
(4) Cash operating costs relating to product marketing represent the selling and distribution expenses (excluding employee
benefit expenses and non-cash items under selling and distribution expenses) adjusted by changes in working capital
relating to sales and distribution activities as of the previous and current period end.
FINANCIAL INFORMATION
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INDEBTEDNESS
Our indebtedness during the Track Record Period primarily consisted of interest-bearing bank
borrowings, lease liabilities and redemption liabilities. The following table sets forth a breakdown of
our indebtedness as of the dates indicated.
As of December 31, As of
October 31, 2025
As of
January 31,
20262022 2023 2024
(RMB in thousands)
(unaudited)
Current
Interest-bearing bank borrowings ..... — 36,677 40,030 80,540 96,573
Lease liabilities ............... 2,331 2,890 2,559 1,251 780
Redemption liabilities ............ 30,775 33,244 35,911 38,281 39,030
Total current .................. 33,106 72,811 78,500 120,072 136,384
Non-current
Lease liabilities ............... 1,976 3,432 971 60 30
Interest-bearing bank borrowings ..... — — 19,696 19,600 29,580
Total non-current ............... 1,976 3,432 20,667 19,660 29,610
Total indebtedness .............. 35,082 76,243 99,167 139,732 165,994
Interest-bearing bank borrowings
We had interest-bearing bank borrowings of nil, RMB36.7 million, RMB59.7 million and
RMB100.1 million as of December 31, 2022, 2023, 2024 and October 31, 2025, respectively. The
following table sets forth certain information of our interest-bearing bank borrowings as of the dates
indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Current
Bank loans — unsecured .............. — 16,661 20,014 50,109
Bank loans — secured ................ — 20,016 20,016 19,974
Current portion of long-term bank loans —
unsecured ....................... — — — 10,457
Total current ...................... — 36,677 40,030 80,540
Non-current
Bank loans – unsecured ............... — — 19,696 19,600
Total ............................ — 36,677 59,726 100,140
As of October 31, 2025, we had committed unutilized banking facilities of RMB70.1 million.
Lease Liabilities
Our lease liabilities were primarily related to our office leases. We had lease liabilities of RMB4.3
million, RMB6.3 million, RMB3.5 million and RMB1.3 million as of December 31, 2022, 2023, 2024
and October 31, 2025, respectively.
FINANCIAL INFORMATION
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The following table sets forth the current and non-current lease liabilities as of the dates
indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Current lease liabilities ............... 2,331 2,890 2,559 1,251
Non-current lease liabilities ............ 1,976 3,432 971 60
Total ............................ 4,307 6,322 3,530 1,311
Redemption Liabilities
Our redemption liabilities were primarily related to a financial liability of RMB30.0 million
arising from aforementioned redemption rights. The redemption liabilities recognized was solely due to
the pre-IPO investment of Huzhou Zhuosheng. Our redemption liabilities amounted to RMB30.8
million, RMB33.2 million, RMB35.9 million and RMB38.3 million as of December 31, 2022, 2023,
2024 and October 31, 2025, respectively. See note 26 to the Accountants’ Report in Appendix I to this
prospectus.
Statement of Indebtedness
Save as disclosed above, as of December 31, 2022, 2023, 2024, October 31, 2025 and January 31,
2026, we had no bank loans or other borrowings, or any other loan capital issued and outstanding or
agreed to be issued, bank overdrafts, borrowings or similar indebtedness, liabilities under acceptance
(other than normal trade bills) or acceptance credits, debentures, mortgages, charges, hire purchases,
guarantees or other material contingent liabilities. Our Directors confirm that we did not experience any
difficulty in obtaining bank loans and other borrowings, default in payment of bank borrowings or
breach of covenants during the Track Record Period and up to the Latest Practicable Date.
Since January 31, 2026 and up to the Latest Practicable Date, there had not been any material
change in our indebtedness.
CONTINGENT LIABILITIES
During the relevant periods, the Company had been a defendant in a patent dispute lawsuit filed
by a party alleging that the Company infringed its invention patent in Mainland China. The Company’s
PRC litigation advisor is of the view that there are reasonable grounds to believe the court would
dismiss the claims on the basis that the said chip products should not fall under the protection of such
invention patent. The directors, based on the advice from Company’s PRC litigation advisor, believe
that the Company has a valid defense against the allegation and, accordingly, the Group has not
provided for any claim arising from the litigation, other than the related legal and other costs. See note
32 to the Accountants’ Report in Appendix I to this prospectus for details of our contingent liabilities.
RESEARCH AND DEVELOPMENT EXPENDITURE AND TOTAL OPERATING
EXPENDITURE
During the Track Record Period, our research and development expenditure primarily consisted of
research and development costs adjusted by adding back intangible assets related to research and
development software acquired from third parties and capitalized (if any) and deducting amortization
expenses for capitalized intangible assets included in research and development expenditure (if any).
We do not allocate research and development expenditure by product type. The table below sets forth
our annual and total research and development expenditure for the periods indicated.
FINANCIAL INFORMATION
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Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Research and development costs ... 48,708 59,271 68,060 55,134 55,690
Adjustments:
Add: intangible assets acquired from
third parties and capitalized .. —————
Add: internal development costs
capitalized as intangible asset . —————
Less: amortization expense of
capitalized intangible assets
included in research and
development expenditure .... —————
Annual research and development
expenditure ................ 48,708 59,271 68,060 55,134 55,690
Total research and development
expenditure for periods prior to
the Listing ................. 231,729
The table below sets forth our annual and total operating expenditure for the periods indicated:
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Research and development costs ... 48,708 59,271 68,060 55,134 55,690
Selling and marketing expenses .... 17,405 18,869 20,847 17,500 16,800
Administrative expenses ......... 18,279 20,382 19,673 16,434 32,629
Adjustments:
Add: intangible assets acquired from
third parties and capitalized .. —————
Add: internal development costs
capitalized as intangible asset . —————
Less: amortization expense of
capitalized intangible assets
included in research and
development expenditure .... —————
Annual total operating expenditure . 84,392 98,522 108,580 89,068 105,119
Total operating expenditure for
periods prior to the Listing ..... 396,613
The table below sets forth our annual research and development expenditure ratio and total
research and development expenditure ratio for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
Annual research and development
expenditure ratio (1) ........... 57.7% 60.2% 62.7% 61.9% 53.0%
Total research and development
expenditure ratio (2) ........... 58.4%
(1) Calculated by dividing annual research and development expenditure by annual total operating expenditure.
(2) Calculated by dividing annual total research and development expenditure during the Track Record Period prior to the
Listing by total operating expenditure during the Track Record Period prior to the Listing.
FINANCIAL INFORMATION
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CAPITAL EXPENDITURES AND COMMITMENTS
Capital Expenditures
Our capital expenditures during the Track Record Period primarily consisted of expenditures on
purchase of property, plant and equipment and purchase of intangible asset. The following table sets
forth our capital expenditure for the periods indicated.
Y ear ended December 31, Ten months ended October 31,
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Purchases of items of property, plant
and equipment ............... (15,630) (3,494) (1,955) (1,991) (703)
Purchases of other intangible assets .. (257) — (117) — (179)
Total ...................... (15,887) (3,494) (2,072) (1,991) (882)
We may adjust our capital expenditure for any given period according to our ongoing business
needs and in light of market conditions or other factors we believe appropriate. After the Listing, we
expect to finance our capital expenditure through a combination of existing cash, cash flows generated
from our operating activities, bank borrowings and net proceeds from the Global Offering. See “Future
Plans and Use of Proceeds” for the portion of capital expenditures to be funded by the proceeds from
the Global Offering. We may adjust our capital expenditures for any given period according to our
development plans or in light of market conditions, regulatory environment and other factors we believe
to be appropriate.
Capital Commitments
The following table sets forth our capital commitments as of the dates indicated.
As of December 31,
As of
October 31,
2022 2023 2024 2025
(RMB in thousands)
Contracted, but not provided for:
— Purchase of items of property, plant
and equipment ................ 189 1,456 — —
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet transaction.
LISTING EXPENSES
We expect to incur a total of approximately RMB52.7 million (HK$59.7 million) of listing
expenses in connection with the Global Offering, representing approximately 10.3% of the gross
proceeds from the Global Offering (assuming an Offer Price of HK$45.0, being the mid-point of the
indicative Offer Price range between HK$40.0 and HK$50.0, and assuming that the Over-allotment
Option is not exercised), including (1) underwriting commissions, SFC transaction levy, Stock
Exchange trading fees and AFRC transaction levy for all Offer Shares of approximately RMB19.1
million (HK$21.6 million), and (2) non-underwriting related expenses of approximately RMB33.6
million (HK$38.1 million), which consist of (i) fees and expenses of legal advisors and accountants of
approximately RMB18.4 million (HK$20.8 million), and (ii) sponsor fee and other fees and expenses of
approximately RMB15.2 million (HK$17.3 million). Approximately RMB30.8 million (HK$34.9
million) is expected to be charged to our consolidated statements of profit or loss, and approximately
FINANCIAL INFORMATION
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RMB21.9 million (HK$24.8 million) is expected to be deducted from equity. The listing expenses
above are the best estimate as of the Latest Practicable Date and for reference only. The actual amount
may differ from this estimate.
RELATED PARTY TRANSACTIONS
We enter into transactions with our related parties from time to time during our ordinary course of
business and on terms comparable to the terms of transactions with other entities that are not related
parties. See note 34 to the Accountants’ Report included in Appendix I to this prospectus for details.
Our Directors are of the view that our related party transactions during the Track Record Period were
conducted in the ordinary course of business at arm’s length with reference to normal commercial
terms, and would not distort our track record results or make our historical results not reflective of our
future performance.
KEY FINANCIAL RATIOS
As of December 31,
As of
October 31,
2022 2023 2024 2025
Current ratio (1) ..................... 4.9 2.3 2.0 1.8
Quick ratio (2) ...................... 3.8 1.7 1.2 1.0
Gearing ratio (3) ..................... 11.8% 36.1% 61.3% 120.1%
(1) The calculation of current ratio is based on current assets divided by current liabilities as of period end.
(2) The calculation of quick ratio is based on current assets less inventories divided by current liabilities as of period end.
(3) The calculation of gearing ratio is based on our debt (being our interest-bearing bank borrowings, lease liabilities and
redemption liabilities) divided by our total equity as of the respective dates and multiplied by 100%.
Analysis of Key Financial Ratios
Current ratio and quick ratio
Our current ratio and quick ratio decreased from 4.9 and 3.8 as of December 31, 2022,
respectively, to 2.3 and 1.7 as of December 31, 2023, respectively, primarily due to (1) the decrease in
current assets, resulting from the decrease in cash and cash equivalents, and (2) the increase in current
liabilities, resulting from the increases in trade payables and interest-bearing bank borrowings.
Our current ratio and quick ratio decreased from 2.3 and 1.7 as of December 31, 2023,
respectively, to 2.0 and 1.2 as of December 31, 2024, respectively, primarily due to (1) the decrease in
current assets, mainly resulting from the decrease in cash and cash equivalents, and (2) the increase in
current liabilities, mainly resulting from the increases in trade payables and interest-bearing bank
borrowings.
Our current ratio and quick ratio decreased from 2.0 and 1.2 as of December 31, 2024,
respectively, to 1.8 and 1.0 as of October 31, 2025, respectively, primarily due to the increase in
interest-bearing bank borrowings.
Gearing ratio
Our gearing ratio increased from 11.8% as of December 31, 2022, to 36.1% as of December 31,
2023, primarily due to (1) our strategic debt utilization, as our interest-bearing bank borrowings
increased by approximately RMB36.7 million, and (2) the significant decrease in total equity of
RMB86.9 million, principally attributable to a RMB94.1 million net loss in 2023.
FINANCIAL INFORMATION
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Our gearing ratio increased from 36.1% as of December 31, 2023, to 61.3% as of December 31,
2024, primarily due to (1) the increase in interest-bearing bank borrowings of RMB23.0 million and (2)
the significant decrease in total equity of RMB49.6 million, principally attributable to a RMB56.8
million net loss in 2024.
Our gearing ratio increased from 61.3% as of December 31, 2024, to 120.1% as of October 31,
2025, primarily due to the increase in interest-bearing bank borrowings and the decrease in equity due
to the loss for current period.
QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISKS
Our principal financial instruments comprise interest-bearing bank borrowings and cash and bank
balances. The main purpose of these financial instruments is to raise funds to support our operations.
We have various other financial assets and liabilities such as trade receivables and trade payables,
which arise directly from our operations.
The main risks arising from our financial instruments are interest rate risk, foreign currency risk,
credit risk and liquidity risk. Our Directors review and agree with the policies for managing each of
these risks. See note 37 to the Accountants’ Report in Appendix I to this prospectus for details of our
financial risk management.
Interest Rate Risk
Our exposure to the risk of changes in market interest rates relates primarily to our bank
borrowings.
Our policy is to manage the interest cost using a mix of fixed and variable rate debts. As of
December 31, 2022, 2023, 2024 and October 31, 2025, none of our interest-bearing borrowings bore
interest at floating rates. Accordingly, as of December 31, 2022, 2023, 2024 and October 31, 2025, we
did not have any significant exposure to the interest rate risk in the cash flows. See note 37 to the
Accountants’ Report in Appendix I to this prospectus for details.
Foreign Currency Risk
We had transactional currency exposures. Such exposures arose from sales or purchases by
operating units in currencies other than the units’ functional currencies. We principally conducted
business in Renminbi, which is exposed to foreign currency risk with respect to transactions
denominated in currencies other than Renminbi. In addition, the functional currency of our Company’s
subsidiary incorporated in Hong Kong is USD, which is exposed to foreign currency risk with respect
to transactions denominated in currencies other than USD. Foreign exchange risk arises from future
commercial transactions and recognized assets and liabilities denominated in currencies that are not the
functional currencies of the relevant group entities.
The following table demonstrates the sensitivity at the end of the reporting period to a reasonably
possible change in USD/RMB exchange rates, with all other variables held constant, of our loss before
tax (arising from USD/RMB denominated financial instruments) and our equity (due to changes in the
fair value of forward currency contracts).
FINANCIAL INFORMATION
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Increase/(decrease)
in RMB/USD rate
Increase/(decrease)
in loss before tax
(Decrease)/
increase in equity
(%) (RMB in thousands)
Y ear ended December 31, 2022
If RMB weakens against the US$ ......... (1) 109 109
If RMB strengthens against the US$ ....... 1 (109) (109)
Y ear ended December 31, 2023
If RMB weakens against the US$ ......... (1) 827 827
If RMB strengthens against the US$ ....... 1 (827) (827)
Y ear ended December 31, 2024
If RMB weakens against the US$ ......... (1) 404 404
If RMB strengthens against the US$ ....... 1 (404) (404)
Ten months ended October 31, 2025
If RMB weakens against the US$ ......... (1) 656 656
If RMB strengthens against the US$ ....... 1 (656) (656)
Credit Risk
We only offer credit terms to recognized and creditworthy customers. It is our policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. In addition,
receivable balances are monitored on an ongoing basis and our exposure to bad debts is not significant.
For transactions that are not denominated in the functional currency of the relevant operating unit, we
do not offer credit terms without the specific verification procedures.
Maximum exposure and year-end staging
See note 37 to the Accountants’ Report in Appendix I to this prospectus for the credit quality and
the maximum exposure to credit risk based on our credit policy, which is mainly based on past due
information unless other information is available without undue cost or effort, and year-end staging
classification for the Relevant Periods.
Liquidity Risk
We monitor and maintain a level of cash and cash equivalents deemed adequate by our
management to finance the operations and mitigate the effects of fluctuations in cash flows.
See note 37 to the Accountants’ Report in Appendix I to this prospectus for the maturity profile of
our financial liabilities for the Relevant Periods, based on the contractual undiscounted payments.
DIVIDENDS
We are a company incorporated under the laws of the PRC. During the Track Record Period, we
did not declare or pay any dividends. Any dividends we pay will be at the discretion of our Directors
and will depend on our future operations and earnings, capital requirements and surplus, general
financial condition, contractual restriction and other factors which our Directors consider relevant. Our
shareholders in a general meeting may approve any declaration of dividends, which must not exceed the
amount recommended by our Board. As advised by our PRC Legal Advisor, no dividend shall be
declared or payable except out of our profits and reserves lawfully available for distribution. Any future
net profit that we make will have to be first applied to make up for our historically accumulated losses,
after which we will be obliged to allocate 10% of our net profit to our statutory common reserve fund
until such fund has reached more than 50% of our registered capital. We have not adopted any dividend
policy and do not have predetermined dividend payout ratio.
FINANCIAL INFORMATION
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DISTRIBUTABLE RESERVES
As of October 31, 2025, our Company did not have any distributable reserves.
DISCLOSURE REQUIRED UNDER CHAPTER 13 OF THE LISTING RULES
Our Directors have confirmed that, as of the Latest Practicable Date, there were no circumstances
that would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing Rules.
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that, up to the date of this prospectus, there has been no material adverse
change in our financial or trading position since October 31, 2025 (being the date on which the latest
audited consolidated financial information of our Group was prepared) and there is no event since
October 31, 2025 which would materially affect the information shown in our consolidated financial
statements included in the Accountants’ Report in Appendix I to this prospectus.
UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS
The following unaudited pro forma adjusted consolidated net tangible assets attributable to the
owners of our Company has been prepared in accordance with Rule 4.29 of the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited and with reference to Accounting
Guideline 7 Preparation of Pro Forma Financial Information for inclusion in Investment Circulars
issued by the Hong Kong Institute of Certified Public Accountants to illustrate the effect of the Global
Offering on the consolidated net tangible assets attributable to owners of our Company as of October
31, 2025 as if the Global Offering had taken place on that date.
The unaudited pro forma statement of adjusted consolidated net tangible assets attributable to
owners of our Company has been prepared for illustrative purposes only and because of its hypothetical
nature, it may not give a true picture of the consolidated net tangible assets of our Group as of October
31, 2025 or any future dates following the Global Offering.
Consolidated
net tangible
assets of our
Group
attributable to
owners of our
Company as of
October 31,
2025 (1)
Estimated net
proceeds from
the Global
Offering (2)
Estimated
impact related
to the
reclassification
of redemption
liabilities upon
Listing (3)
Unaudited pro
forma adjusted
consolidated net
tangible assets
attributable to
owners of our
Company
Unaudited pro forma
adjusted consolidated net
tangible assets per Share
(RMB in thousands) RMB (4) HK$(5)
Based on an Offer Price of
HK$40.00 per Share ........ 115,808 385,168 38,281 539,257 4.81 5.46
Based on an Offer Price of
HK$45.00 per share ......... 115,808 435,946 38,281 590,035 5.27 5.98
Based on an Offer Price of
HK$50.00 per share ........ 115,808 486,723 38,281 640,812 5.72 6.49
(1) The consolidated net tangible assets attributable to owners of the Company as at October 31, 2025 is arrived at after
deducting other intangible asset of RMB553,000 from the consolidated equity attributable to owners of the Company of
RMB116,361,000 as at October 31, 2025, as shown in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$40.00 per Share, HK$45.00 per
Share and HK$50.00 per Share, after deduction of the underwriting fees and other related expenses payable by our
Company (excluding the listing expenses that have been charged to profit or loss during the Track Record Period) and does
not take into account of any Shares which may be issued upon the exercise of the Over-allotment Option. The estimated
net proceeds from the Global Offering are converted from Hong Kong dollars into Renminbi at an exchange rate of RMB1
to HK$1.1343.
FINANCIAL INFORMATION
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(3) For the purpose of the unaudited pro forma financial information, considering the estimated impact related to the
reclassification of redemption liabilities upon Listing, the unaudited pro forma adjusted net tangible assets attributable to
the owners of our Company will be increased by RMB38,281,000, being the carrying amount of the redemption liabilities
as of October 31, 2025. The redemption rights will automatically terminate upon the Listing and the completion of the
Global Offering. The carrying amount of the redemption liabilities is reclassified to equity upon the termination of the
counterparty’s redemption right. The amount that is reclassified to equity will be the carrying amount of the redemption
liabilities on that date of the Global Offering.
(4) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the Company and the amounts
per share are arrived at after the adjustments referred to in the preceding paragraphs (note 2 and 3) above and on the basis
that 112,000,000 shares were in issue assuming that the Global Offering had been completed on October 31, 2025.
(5) The unaudited pro forma adjusted consolidated net tangible assets per Share are converted into Hong Kong dollars at an
exchange rate of RMB1 to HK$1.1343.
(6) No adjustment has been made to the unaudited pro forma adjusted net tangible assets to reflect any trading results or other
transactions for the Company entered into subsequent to October 31, 2025.
FINANCIAL INFORMATION
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OVERVIEW
Upon the Listing, the Board will consist of nine Directors, including four executive Directors, two
non-executive Directors and three independent non-executive Directors. The Board is responsible, and
has general authority for, the management and operation of our Company. Our Directors are appointed
for a term of three years and are eligible for re-election upon expiry of their term of office.
Our senior management is responsible for the day-to-day operations of our Company.
All of our Directors and senior management have met the qualification requirements under the
relevant PRC laws and regulations and the Listing Rules for their respective positions.
BOARD OF DIRECTORS
The following table sets forth certain information regarding the members of our Board.
Name Age Position
Date of joining
our Group
Date of
appointment as a
Director Responsibility
Relationship with
other Directors
and senior
management
Executive Directors
Mr. Xu Xiaolin
(؍).......
45 Founder, chairman of the Board,
executive Director and
president
May 2016 May 2016 Responsible for the overall
strategic planning, business
direction and management of
our Group
N/A
Mr. Liu Baoliang
(Ԅ).......
45 Co-founder, executive Director,
vice president and director of
algorithm applications
May 2016 January 2018 Responsible for the Systems
Department of our Group
N/A
Mr. Qian Shun
(፺ഭ) ........
43 Executive Director, vice
president and chief technology
officer
July 2018 May 2021 Responsible for the research and
development of our Group
N/A
Ms. Yu Bingbing
(ΏΏ).......
45 Executive Director, vice
president and sales director
January 2017 December
2021
Responsible for the marketing
and sales of our Group
N/A
Non-executive Directors
Mr. Chen Binglin
(؍).......
46 Non-executive Director May 2025 May 2025 Providing guidance on overall
strategic planning, corporate
governance and business
direction of our Group
N/A
Mr. Lin Enfeng
(ࢤࢸ؍).......
53 Non-executive Director January 2018 January 2018 Providing guidance on overall
strategic planning, corporate
governance and business
direction of our Group
N/A
Independent non-executive Directors
Mr. Liu Hongcan
(ᄎ҃ᐆ).......
46 Independent non-executive
Director
May 2025 May 2025 Responsible for providing
independent advice on the
operations and management of
our Group
N/A
Ms. Liu Liping
(ᄎᘆറ).......
60 Independent non-executive
Director
May 2025 May 2025 Responsible for providing
independent advice on the
operations and management of
our Group
N/A
Mr. Dai Xueguang
(Ꮦ௛Έ).......
48 Independent non-executive
Director
May 2025 May 2025 Responsible for providing
independent advice on the
operations and management of
our Group
N/A
DIRECTORS AND SENIOR MANAGEMENT
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Executive Directors
Mr. Xu Xiaolin (؍)aged 45, is the chairman of the Board, executive Director and president
of our Company. Mr. Xu founded our Company in May 2016 and has been the chairman of the Board,
Director and president since May 2016. Mr. Xu is primarily responsible for the overall strategic
planning, business direction and management of our Group. Mr. Xu has also been serving as a director
of Shanghai FourSemi, Shenzhen FourSemi and Fourier Technology.
Mr. Xu has approximately 20 years of experience in the field of power amplifier audio chips.
Prior to founding our Company, from March 2008 to April 2016, Mr. Xu worked in NXP
Semiconductors (Shanghai) Co., Ltd. (౽ऌ̒ኬ᜗ (ɪऎ)ʮ̡), a subsidiary under NXP
Semiconductors N.V ., whose shares are listed on the NASDAQ Stock Market (stock symbol: NXPI).
From February 2007, Mr. Xu served as a product marketing engineer in Apexone Microelectronics
(Shanghai) Co., Ltd. (дಌฆཥɿ (ɪऎ)ʮ̡ ). From March 2006 to February 2007, Mr.
Xu worked in YOSUN Shanghai Corp. Ltd. (ཥɿ(ɪऎ)ʮ̡), a subsidiary of YOSUN
Industrial Corp. (ʮ̡ ), whose shares were previously listed on the Taiwan Stock
Exchange (stock code: 2403).
Mr. Xu obtained a bachelor’s degree in physics and electronic information from Xiamen
University (ɽኪ) in July 2002 and a Master of Business Administration (MBA) from Shanghai
Jiao Tong University ( ɪऎʹஷɽኪ ) in March 2009.
Mr. Liu Baoliang (Ԅ), aged 45, is an executive Director, vice president and director of
algorithm applications of our Company. Mr. Liu co-founded our Company with Mr. Xu in May 2016
and has been serving as the director of algorithm applications. He has been our Director since January
2018 and was appointed as a vice president in May 2025. Mr. Liu is primarily responsible for the
Systems Department of our Group.
Prior to founding our Company, from August 2013 to March 2016, Mr. Liu worked at NXP
Semiconductors (Shanghai) Co., Ltd. (౽ऌ̒ኬ᜗ (ɪऎ)ʮ̡), with the last position being chief
product engineer, a subsidiary under NXP Semiconductors N.V ., whose shares are listed on the
NASDAQ Stock Market (stock symbol: NXPI). From December 2006 to December 2007, Mr. Liu
served as a system engineer in Integrated Device Technology (Shanghai) Co., Ltd. (Ҧ (ɪऎ)Ϟ
ʮ̡) (currently known as Renesas Integrated Circuit (Shanghai) Co., Ltd. ( ๿ᔜණϓཥ༩ (ɪऎ)ࠢ
ʮ̡)).
Mr. Liu obtained a bachelor’s degree in electronics and information technology from China
University of Mining and Technology ( ʕ਷ᘤุɽኪ ) in July 2002.
Mr. Qian Shun ( ፺ഭ), aged 43, is an executive Director, vice president and chief technology
officer of our Company. Mr. Qian joined our Company in July 2018 as a senior research and
development manager. He has been our Director since May 2021, the chief technology officer since
July 2022, and was appointed as a vice president in May 2025. Mr. Qian is primarily responsible for the
research and development of our Group.
Prior to joining our Company, from January 2011 to July 2018, Mr. Qian served as an analog
design manager in Texas Instruments Semiconductor Technologies (Shanghai) Co., Ltd. ( ᅃψᄃኜ̒ኬ
᜗Ҧஔ(ɪऎ)ʮ̡), a subsidiary under Texas Instruments Incorporated, whose shares are listed on
the Nasdaq Stock Market (stock symbol: TXN). From March 2006 to August 2010, Mr. Qian served as
a senior design engineer in Integrated Device Technology (Shanghai) Co., Ltd. (Ҧ (ɪऎ)ࠢ
ʮ̡) (currently known as Renesas Integrated Circuit (Shanghai) Co., Ltd.
(๿ᔜණϓཥ༩ (ɪऎ)ʮ̡)).
Mr. Qian obtained a bachelor’s degree in electronics engineering from Southeast University (
ی؇
ɽኪ) in June 2003 and a master’s degree in engineering (circuit and system) from Shanghai Jiao Tong
University ( ɪऎʹஷɽኪ ) in March 2006.
DIRECTORS AND SENIOR MANAGEMENT
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Ms. Yu Bingbing (ΏΏ), aged 45, is an executive Director, vice president and sales director of
our Company. Ms. Yu joined our Company in January 2017 as the sales director. She has been our
Director since December 2021 and was appointed as a vice president in May 2025. Ms. Yu is primarily
responsible for the marketing and sales of our Company.
Prior to joining our Company, Ms. Yu worked at UHDevice Electronics Jiangsu Co., Ltd. (ڃ
ʮ̡ ). From August 2007 to August 2011, Ms. Yu served as a field application
engineer in Apexone Microelectronics (Shanghai) Co., Ltd. (дಌฆཥɿ (ɪऎ)ʮ̡ ).
Ms. Yu obtained a bachelor’s degree in business administration (engineering management) from
Shanghai Jiao Tong University ( ɪऎʹஷɽኪ ) in July 2009.
Non-executive Directors
Mr. Chen Binglin (؍)aged 46, has been a non-executive Director since May 2025. Mr.
Chen is primarily responsible for providing guidance on overall strategic planning, corporate
governance and business direction of our Group.
Mr. Chen has been serving as the investment director of Huaqin Technology Co., Ltd. ( ശාҦஔ
ʮ̡ ) (a company listed on the Shanghai Stock Exchange, stock code: 603296) since August
2021 and the director of Lianwei Electronics Co., Ltd. (ʮ̡ ), NanchangYingli Precision
Manufacturing Co., Ltd. (ʮ̡ ), DBG Electronics (Investment) Limited (߅
Ҧ(ҳ༟)ʮ̡) and Zheng Hong Electronics Limited (ʮ̡ ) since April 2025.
Mr. Chen also served as a hardware director of Huaqin Technology Co., Ltd. (ࠢ
ʮ̡) (a company listed on the Shanghai Stock Exchange, stock code: 603296) from October 2008 to
August 2021.
Mr. Chen obtained a bachelor’s degree in material forming and control engineering from Wuhan
University of Technology (ဏଣʈɽኪ ) in June 2002.
Mr. Lin Enfeng (ࢤࢸ؍)aged 53, has been a non-executive Director since January 2018. Mr.
Lin is primarily responsible for providing guidance on overall strategic planning, corporate governance
and business direction of our Group.
Mr. Lin has been serving as a partner of Vinno Capital Co., Ltd. (ʮ̡ )
since April 2017.
Mr. Lin obtained a bachelor’s degree in materials science and engineering from Beijing Institute
of Technology ( ̏ԯଣʈɽኪ ) in July 1997.
Mr. Lin was previously a director of ITIBIA Technologies (Hong Kong) Limited (Ҧ (࠰
ಥ)ʮ̡)( “ ITIBIA Technologies ”, a dormant company), which was established in Hong Kong and
dissolved on May 7, 2021 by way of striking-off due to lack of operations. Mr. Lin confirmed that (i)
ITIBIA Technologies was solvent prior to the striking-off; (ii) there was no wrongful act on his part
leading to the striking-off; and (iii) he is not aware of any outstanding claims and/or liabilities as a
result of the striking-off of ITIBIA Technologies.
Independent non-executive Directors
Ms. Liu Liping ( ᄎᘆറ), aged 60, has been an independent non-executive Director since May
2025. Ms. Liu is primarily responsible for providing independent advice on the operations and
management of our Group.
Ms. Liu has been serving as the executive director and general manager in Xiamen Huaren
Qiaozhi Enterprise Management Consulting Co., Ltd. (ʮ̡ ) since
October 2013.
DIRECTORS AND SENIOR MANAGEMENT
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Ms. Liu obtained a bachelor’s degree in public finance from Inner Mongolia Institute of Finance
and Economics ( ʫႆ̚ৌ຾ኪ৫ ) (currently known as Inner Mongolia University of Finance and
Economics ( ʫႆ̚ৌ຾ɽኪ )) in July 1987. In addition, Ms. Liu has obtained the qualification of
Senior Accountant accredited by Xiamen Professional Title Reform Leading Group (ჯ
ኬʃଡ଼) in December 2002.
Ms. Liu was previously a supervisor of Huaqiao Huaren International Health Club (Qingtian) Co.,
Ltd. (ᆀ௅ (͞)ʮ̡)( “ Huaqiao Huaren ”, a company principally engaged
in health management), which was established in the PRC and dissolved on February 1, 2012 by way of
revocation due to the declaration of dissolution by its shareholder and lack of operations. Ms. Liu
confirmed that (i) Huaqiao Huaren was solvent prior to the revocation; (ii) there was no wrongful act
on her part leading to the revocation; and (iii) she is not aware of any outstanding claims and/or
liabilities as a result of the revocation of Huaqiao Huaren.
Mr. Liu Hongcan ( ᄎ҃ᐆ), aged 46, has been an independent non-executive Director since May
2025. Mr. Liu is primarily responsible for providing independent advice on the operations and
management of our Group.
Mr. Liu has been serving as (1) the independent director in Shenzhen Australis Electronic
Technology Co., Ltd. (ʮ̡ ), whose shares are listed on the Shenzhen
Stock Exchange (stock code: 300940), since July 2024, (2) the head of compliance and risk control and
partner in Xiamen Midai Asset Management Partnership (Limited Partnership) (႓ь༟ପ၍ଣΥྫ
Άุ(Υྫ)) since November 2021, and (3) the supervisor in Xiamen Midai Investment
Management Co., Ltd. (ʮ̡ ) since July 2016. Prior to that, from May 2013 to
April 2019, Mr. Liu served as an independent director in Fujian Fynex Textile Science and Technology
Co., Ltd. (ʮ̡ ), whose shares are listed on the Shanghai Stock Exchange
(stock code: 600493). From January 2012 to November 2021, Mr. Liu worked in Pan-China (Xiamen)
Consulting Co., Ltd. (ʮ̡ ) with the last position being partner.
Mr. Liu obtained a bachelor’s degree in accounting from Xiamen University (ɽኪ) in July
2001. In addition, Mr. Liu is a member of the Chinese Institute of Certified Public Accountants
(CICPA).
Mr. Dai Xueguang ( Ꮦ௛Έ), aged 48, has been an independent non-executive Director since May
2025. Mr. Dai is primarily responsible for providing independent advice on the operations and
management of our Group.
Mr. Dai has been serving as a partner in Beijing Anli Partners (Shanghai) ( ̏ԯτଣ(ɪऎ)ԫ
הsince October 2023. He has been simultaneously serving as a member of the internal controls
committee of First Capital Investment Banking Co., Ltd (ப΂ʮ̡ ) since
January 2022, a subsidiary under First Capital Securities Co., Ltd. (ʮ̡ ),
whose shares are listed on the Shanghai Stock Exchange (stock code: 002797). Prior to that, Mr. Dai
served as an independent non-executive director in Shanghai Kinetic Medical Co., Ltd ( ɪऎ௱лइᔼ
ʮ̡ ), whose shares are listed on the ChiNext Market of Shenzhen Stock Exchange
(stock code: 300326), from February 2022 to March 2025.
Mr. Dai obtained a bachelor’s degree in economics from Shandong University of Finance (ৌ
ኪ৫) (currently known as Shandong University of Finance and Economics (ৌ຾ɽኪ )) in July
1999 and a master’s degree in law from Nanjing University (ԯɽኪ) in June 2007. In addition, Mr.
Dai has obtained the qualification of (1) Lawyer’s Practice License accredited by Shanghai Municipal
Bureau of Justice in August 2008 and (2) Legal Profession Qualification Certificate of the People’s
Republic of China accredited by the Ministry of Justice of the People’s Republic of China in February
2006.
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SENIOR MANAGEMENT
The following table sets forth certain information regarding the members of our senior
management.
Name Age Position
Date of joining
our Group
Date of appointment as
senior management Responsibility
Relationship
with other
Directors and
senior
management
Mr. Xu
Xiaolin
(؍)..
45 Founder, chairman of the
Board, executive Director
and president
May 2016 May 2016 Responsible for the overall
strategic planning, business
direction and management of
our Group
N/A
Mr. Liu
Baoliang
(Ԅ) ..
45 Co-founder, executive Director,
vice president and director
of algorithm applications
May 2016 May 2025 Responsible for the Systems
Department of our Group
N/A
Mr. Qian
Shun
(፺ഭ) ...
43 Executive Director, vice
president and chief
technology officer
July 2018 May 2025 Responsible for the research
and development of our
Group
N/A
Ms. Yu
Bingbing
(ΏΏ) ..
45 Executive Director, vice
president and sales director
January 2017 May 2025 Responsible for the marketing
and sales of our Group
N/A
Mr. Pan
Fangsheng
(ᆙᦤ᳅) ..
44 Vice president July 2024 May 2025 Responsible for our operations
department and is our
quality management
representative
N/A
Ms. Zhu
Hongbei
(ႍ) ..
39 Chief financial officer August 2022 August 2022 Responsible for the financial
and accounting affairs of our
Group
N/A
Mr. Xu Xiaolin (؍)aged 45, is the chairman of the Board, executive Director and president
of our Company. See “—Board of Directors—Executive Directors” for his biographical details.
Mr. Liu Baoliang (Ԅ), aged 45, is an executive Director, vice president and director of
algorithm applications of our Company. See “—Board of Directors—Executive Directors” for his
biographical details.
Mr. Qian Shun ( ፺ഭ), aged 43, is an executive Director and vice president of our Company. See
“—Board of Directors—Executive Directors” for his biographical details.
Ms. Yu Bingbing (ΏΏ), aged 45, is an executive Director and vice president of our Company.
See “—Board of Directors—Executive Directors” for her biographical details.
Mr. Pan Fangsheng ( ᆙᦤ᳅), aged 44, is a vice president of our Company. Mr. Pan joined our
Company in July 2024 as an assistant vice president and was appointed as a vice president in May
2025. Mr. Pan is responsible for our operations department and is our quality management
representative.
Mr. Pan (1) served as the deputy general manager of engineering operations in Shanghai
Orient-Chip Technology Co., Ltd. (ʮ̡ ), whose shares are listed on the STAR
Market of the Shanghai Stock Exchange (stock code: 688061), from March 2022 to June 2024, (2)
worked at Texas Instruments Semiconductor Technologies (Shanghai) Co., Ltd. ( ᅃψᄃኜ̒ኬ᜗Ҧ
ஔ(ɪऎ)ʮ̡), which is a subsidiary under Texas Instruments Incorporated, whose shares are listed
on the Nasdaq Stock Market (stock symbol: TXN), from April 2012 to February 2022, (3) served as the
product engineering project manager in VeriSilicon Microelectronics (Shanghai) Co., Ltd. (ฆཥ
ɿ(ɪऎ)ʮ̡ ), whose shares are listed on the Shanghai Stock Exchange (stock code: 688521),
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from November 2008 to March 2012, and (4) served as the chief product engineer in Shanghai Huahong
Group Co., Ltd. (ࠀ(ණྠ)ʮ̡), whose shares are listed on the Shanghai Stock Exchange
(stock code: 688347), from September 2006 to October 2008.
Mr. Pan obtained a bachelor’s degree in electrical engineering and automation from University of
Shanghai for Science and Technology ( ɪऎଣʈɽኪ ) in June 2003 and a master’s degree in
microelectronics from Shanghai Jiao Tong University ( ɪऎʹஷɽኪ ) in February 2007. In addition,
Mr. Pan has obtained the qualification of (1) Director of Standards and (2) Chief Quality Officer, both
accredited by the Shanghai Municipal People’s Government in March 2024.
Ms. Zhu Hongbei (ႍ), aged 39, is the chief financial officer of our Company. Ms. Zhu
joined our Company in August 2022 and has been serving as the chief financial officer since August
2022. Ms. Zhu is responsible for the financial and accounting affairs of our Group.
Prior to joining our Company, Ms. Zhu worked in (1) Genor Biopharma Holdings Limited ( ྗձ͛
ʮ̡ ), whose shares are listed on the Stock Exchange (stock code: 6998), from April 2021
to August 2022, (2) Shanghai Taojing Lihua Information Technology Co., Ltd. (Ҧஔ
ʮ̡) from November 2020 to March 2021, (3) Shanghai Junshi Biosciences Co., Ltd. ( ɪऎёྼ
ʮ̡ ), whose shares are listed on the Stock Exchange (stock code: 1877) and
the Shanghai Stock Exchange (stock code: 688180), from December 2019 to October 2020, (4) Ford
Motor (China) Co., Ltd. ( ၅तӛԓ(ʕ਷)ʮ̡), a subsidiary under Ford Motor Company (਷၅
तӛԓʮ̡ ) whose shares are listed on the New York Stock Exchange (stock symbol: F), from January
2013 to May 2019, (5) Shanghai Office of Bureau Veritas ( ̀ၪ਷ყᏨ᜕ණྠɪऎʱʮ̡ ) from
November 2011 to December 2012, and (6) Shanghai Office of KPMG Huazhen LLP
(הfrom September 2008 to October 2011.
Ms. Zhu obtained a bachelor’s degree in financial management with a focus on international asset
operations from Shanghai Institute of Foreign Trade (ኪ৫ ), which was renamed as
Shanghai University of International Business and Economics ( ɪऎ࿁̮຾൱ɽኪ ), in 2008. In
addition, Ms. Zhu has obtained the qualification of a Non-Practicing Member accredited by The
Chinese Institute of Certified Public Accountants in March 2021.
Save as disclosed above, each of our Directors and senior management members confirms with
respect to himself or herself that (1) he or she had no other relationship with any Director or senior
management of our Company as at the Latest Practicable Date; (2) he or she did not hold any other
directorships in the three years prior to the Latest Practicable Date in any public companies of which
the securities are listed on any stock exchange in Hong Kong and/or overseas; and (3) there are no
other matters concerning our Directors’ appointment that need to be brought to the attention of our
Shareholders and the Stock Exchange or shall be disclosed pursuant to Rule 13.51(2)(h) to (v) of the
Listing Rules. For our Directors’ interests in the Shares within the meaning of Part XV of the SFO, see
“Appendix IV—Statutory and General Information—3. Further Information about Our Directors and
Substantial Shareholders”.
JOINT COMPANY SECRETARIES
Mr. Gao Wenchao ( ৷˖൴), was appointed as the joint company secretary of our Company in
June 2025. He has been the director of investment and financing of our Group since May 2025.
Prior to joining our Company, he worked in the investment banking department of China
International Capital Corporation Limited (ʮ̡ ), whose shares are listed on the
Stock Exchange (stock code: 3908) and Shanghai Stock Exchange (stock code: 601995), from March
2021 to May 2025. Mr. Gao previously worked in Minsheng Securities Co., Ltd. (ʮ
̡). From July 2017 to May 2019, he worked in Beijing Grandway Law Offices (ה.)
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Mr. Gao obtained a bachelor’s degree in law from Tianjin University (ɽኪ) in July 2014 and
a master’s degree in law from Shanghai Jiao Tong University ( ɪऎʹஷɽኪ ) in March 2017. In
addition, Mr. Gao has obtained the qualification of (1) Legal Profession Qualification Certificate of the
People’s Republic of China accredited by the Ministry of Justice of the People’s Republic of China in
August 2014, (2) Type 1 (Dealing in Securities) and (3) Type 6 (Advising on Corporate Finance) both
accredited by the SFC.
Mr. Chow Shing Lung ( ཅ፴Ꮂ), was appointed as the joint company secretary of our Company
in June 2025.
Mr. Chow has more than 14 years of work experience in the company secretarial and legal fields
and is currently Assistant Vice President, Entity Solutions of Computershare Hong Kong Investor
Services Limited (ʮ̡ )( “ Computershare ”). Prior to joining Computershare,
he was Legal Counsel of a major technology conglomerate, responsible for the listing compliance and
corporate governance matters of the group’s listed subsidiaries in Hong Kong. Before that, Mr. Chow
held various corporate governance positions in another major Hong Kong listed company and
professional service firms.
Mr. Chow obtained a Graduate Diploma with Distinction in English and Hong Kong Law
(Common Professional Examination) from the Manchester Metropolitan University and a Master of
Corporate Governance degree from The Hong Kong Polytechnic University.
Mr. Chow was admitted as a solicitor of the High Court of Hong Kong. He is also an associate
member of both The Hong Kong Chartered Governance Institute (formerly known as the Hong Kong
Institute of Chartered Secretaries) and The Chartered Governance Institute in the United Kingdom.
BOARD COMMITTEES
Our Company has established three committees under the Board of Directors, namely the Audit
Committee, the Nomination Committee and the Remuneration and Appraisal Committee.
Audit Committee
The Audit Committee consists of three Directors, namely Mr. Liu Hongcan, Mr. Dai Xueguang
and Ms. Liu Liping, with Mr. Liu Hongcan currently serving as the chairman. Mr. Liu Hongcan has the
appropriate professional qualification and experiences as required under Rules 3.10(2) and 3.21 of the
Listing Rules. The Audit Committee is mainly responsible for reviewing and overseeing the financial
reporting procedures, risk management and internal control systems of our Group and has the terms of
reference in compliance with the relevant laws and regulations of the PRC and Rule 3.21 of the Listing
Rules and paragraph D.3 of part 2 of the Corporate Governance Code, as set out in Appendix C1 to the
Listing Rules.
Nomination Committee
The Nomination Committee consists of three Directors, namely Mr. Xu Xiaolin, Mr. Dai
Xueguang and Ms. Liu Liping, with Mr. Xu Xiaolin currently serving as the chairman. The Nomination
Committee is mainly responsible for identifying, screening and recommending to the Board of Directors
qualified candidates to serve as our Directors and senior management and monitoring the procedures for
evaluating the performance of the Board of Directors and has the terms of reference in compliance with
the relevant laws and regulations of the PRC and paragraph B.3 of part 2 of the Corporate Governance
Code as set out in Appendix C1 to the Listing Rules.
Remuneration and Appraisal Committee
The Remuneration and Appraisal Committee consists of three Directors, namely Mr. Liu Hongcan,
Ms. Liu Liping and Mr. Xu Xiaolin, with Mr. Liu Hongcan currently serving as the chairman. The
Remuneration and Appraisal Committee is mainly responsible for evaluating the remuneration policies
DIRECTORS AND SENIOR MANAGEMENT
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for Directors and senior management of our Group and making recommendations thereon to the Board
of Directors and has the terms of reference in compliance with relevant laws and regulations of the
PRC and paragraph E.1 of part 2 of the Corporate Governance Code as set out in Appendix C1 to the
Listing Rules.
DIVERSITY POLICY OF THE BOARD OF DIRECTORS
The Board of Directors has adopted a board diversity policy (the “ Board Diversity Policy ”) in
order to enhance the effectiveness of our Board of Directors and to maintain high standard of corporate
governance. The Board Diversity Policy sets out the criteria in selecting candidates to our Board of
Directors, 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 our Board of Directors.
Our Directors have a balanced mix of knowledge and skills, including but not limited to overall
business management, finance and accounting and law. The Board of Directors is of the view that our
Board of Directors satisfies the Board Diversity Policy. In addition, our Board of Directors has a wide
range of age, ranging from 43 years old to 60 years old. Two of our Directors are female. Our Board of
Directors will also ensure that appropriate balance of gender diversity is achieved with reference to
investors’ expectation, and international and local recommended best practices.
The Nomination Committee is responsible for reviewing the diversity of the Board of Directors.
After Listing, the Nomination Committee will monitor and evaluate the implementation of the Board
Diversity Policy from time to time to ensure its continued effectiveness. 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.
CORPORATE GOVERNANCE
Our Directors recognize the importance of good corporate governance in management and internal
procedures so as to achieve effective accountability. Save as disclosed below, our Group is expected to
comply with the code provisions of the Corporate Governance Code as set out in Appendix C1 to the
Listing Rules.
Pursuant to code provision C.2.1 of Part 2 of the Corporate Governance Code, companies listed on
the Stock Exchange are expected to comply with, but may choose to deviate from the requirement that
the roles of chairman and chief executive should be separate and should not be performed by the same
individual. We do not have a separate chairman and chief executive and Mr. Xu currently performs
these two roles. Our Board believes that vesting the roles of both the chairman of our Board and the
chief executive officer in the same person has the benefit of (1) ensuring consistent leadership within
our Company, (2) enabling more effective and efficient overall strategic planning for our Company, and
(3) facilitating the flow of information between the management and our Board. Our Board considers
that the balance of power and authority for the present arrangement will not be impaired and this
structure will enable our Company to make and implement decisions promptly and effectively. Our
Board will continue to review and consider splitting the roles of the chairman of our Board and the
chief executive officer of our Company at a time when it is appropriate by taking into account the
circumstances of our Company as a whole.
COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT
The compensation and remuneration of our Directors and members of the senior management of
our Company are determined by the Shareholders’ meetings and Board of Directors as appropriate in
the form of salaries and bonuses. Our Company also reimburses them for expenses which are necessary
and reasonably incurred in providing services to our Company or discharging their duties in relation to
the operations of our Company. When reviewing and determining the specific remuneration packages
DIRECTORS AND SENIOR MANAGEMENT
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for our Directors and members of the senior management of our Company, Shareholders’ meetings and
Board of Directors take into account factors such as the responsibilities, the labor contract, and the
remuneration standards and systems. As required by the relevant PRC laws and regulations, our
Company also participates in various defined contribution plans organized by relevant provincial and
municipal government authorities and welfare schemes for employees of our Company, including
medical insurance, injury insurance, unemployment insurance, pension insurance, maternity insurance
and housing provident fund.
Our Company offers executive Directors and senior management members, who are our
employees, compensation in the form of salaries, bonuses, social security plans, housing provident fund
plans and other benefits. The independent non-executive Directors receive compensation based on their
responsibilities.
The aggregate amounts of remuneration (including salaries, allowances and benefits in kind,
performance related bonuses, share-based payments, and pension scheme contributions and social
welfare) of our Directors for the three years ended December 31, 2022, 2023 and 2024, and the ten
months ended October 31, 2025 were approximately RMB5.2 million, RMB4.9 million, RMB5.8
million and RMB4.5 million, respectively.
The aggregate amounts of remuneration (including salaries, allowances and benefits in kind,
performance related bonuses, share-based payments, and pension scheme contributions and social
welfare) of the five highest paid individuals, excluding Directors and chief executive, for the three
years ended December 31, 2022, 2023 and 2024, and the ten months ended October 31, 2025 were
approximately RMB4.0 million, RMB3.8 million, RMB4.1 million and RMB3.4 million, respectively.
It is estimated that remuneration equivalent to approximately RMB6.4 million in aggregate will be
paid to our Directors by our Company for the year ending December 31, 2025, based on the
arrangements in force as of the date of the prospectus.
No remuneration was paid by our Company to our Directors or the five highest paid individuals as
inducement to join or upon joining the Company or as a compensation for loss of office during the
Track Record Period. Furthermore, none of our Directors had waived or agreed to waive any
remuneration during the Track Record Period.
COMPLIANCE ADVISOR
Our Company appointed Orient Capital (Hong Kong) Limited as the compliance advisor pursuant
to Rule 3A.19 of the Listing Rules, and the compliance advisor will advise our Company in the
following circumstances:
(i) before the publication of any regulatory announcement, circular or financial report;
(ii) where a transaction, which might be a notifiable or connected transaction, is contemplated,
including share issues, sales or transfers of treasury shares and share repurchases;
(iii) where our Company proposes to use the proceeds of the Global Offering in a manner that is
different from that detailed in this prospectus or where our business activities, developments
or results deviate from any forecasts, estimates or other information in this prospectus; and
(iv) where the Stock Exchange makes an inquiry of our Company regarding unusual movements
in the price or trading volume of the Shares, the possible development of a false market in
the Shares or any other matters in accordance with Rule 13.10 of the Listing Rules.
The terms of the appointment of the compliance advisor will commence on the Listing Date and
end on the date when our Company distributes the annual report of its financial results for the first full
financial year commencing after the Listing Date.
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CORE R&D TEAM MEMBERS
For further details of the experience of our core R&D team members, see “Business—Research
and Development—Our Research and Development Team and Core Member” in this prospectus.
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 any business which competes, or is likely to compete, directly or indirectly, with our
business, and requires 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 (1) has obtained the legal advice referred to under
Rule 3.09D of the Listing Rules in June 2025; and (2) 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 confirms (1) his/her independence as regards
each of the factors referred to in Rule 3.13(1) to (8) of the Listing Rules; (2) that he/she has no past or
present financial or other interest in the business of our Company or our subsidiaries or any connection
with any core connected person of our Company under the Listing Rules as of the Latest Practicable
Date; and (3) that there are no other factors that may affect his/her independence at the time of his/her
appointment.
DIRECTORS AND SENIOR MANAGEMENT
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To the best of our Directors’ knowledge and information, the following persons will, immediately
following the completion of the Global Offering and the Conversion of Domestic Shares into H Shares,
have interests or short positions in our Shares or underlying Shares which would be required to be
disclosed to our Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO
or will, 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 any general meeting of our Company:
As of the Latest Practicable Date
Immediately following the completion of the Global Offering
and the Conversion of Domestic Shares into H Shares
(assuming the Over-allotment Option is not exercised)
Shareholder Nature of interest
Number of
Domestic Shares
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company
Number of
Shares
Description
of Shares
Approximate
percentage of
shareholding in
our Domestic
Shares/H Shares
(as applicable)
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company
Mr. Xu ......... Beneficial owner 8,859,800 8.86% 8,859,800 H Shares 7.99% 7.91%
Interest in controlled
corporation (2)
23,897,600 23.90% 23,897,600 H Shares 21.55% 21.34%
Interest held jointly
with other person (3)
2,518,500 2.52% 2,518,500 H Shares 2.27% 2.25%
Mr. Liu ......... Beneficial owner 2,518,500 2.52% 2,518,500 H Shares 2.27% 2.25%
Interest held jointly
with other person (3)
32,757,400 32.76% 32,757,400 H Shares 29.54% 29.25%
Shanghai FourSemi
Management (2) ....
Beneficial owner 12,617,800 12.62% 12,617,800 H Shares 11.38% 11.27%
Xiamen FourSemi
Management (2)(4) ...
Beneficial owner 7,073,700 7.07% 7,073,700 H Shares 6.38% 6.32%
Xiamen FourSemi
Chuangke (2) .....
Beneficial owner 4,206,100 4.21% 4,206,100 H Shares 3.79% 3.76%
Mr. Qian Shun ..... Interest in controlled
corporation (4)
7,073,700 7.07% 7,073,700 H Shares 6.38% 6.32%
Gansheng Investment (5) . Beneficial owner 6,406,800 6.41% 6,406,800 H Shares 5.78% 5.72%
Xianyun Management . Interest in controlled
corporation (5)
6,406,800 6.41% 6,406,800 H Shares 5.78% 5.72%
Ye Feng ........ Interest in controlled
corporation (5)
6,406,800 6.41% 6,406,800 H Shares 5.78% 5.72%
Moqin Intelligent (6) ... Beneficial owner 6,361,400 6.36% 6,361,400 H Shares 5.74% 5.68%
Huaqin Technology ... Interest in controlled
corporation (6)
6,361,400 6.36% 6,361,400 H Shares 5.74% 5.68%
Shanghai Aoqin ..... Interest in controlled
corporation (6)
6,361,400 6.36% 6,361,400 H Shares 5.74% 5.68%
Qiu Wensheng ..... Interest in controlled
corporation (6)
6,361,400 6.36% 6,361,400 H Shares 5.74% 5.68%
Vinno Intelligent and
Health (7) .......
Beneficial owner 5,776,900 5.78% 5,776,900 H Shares 5.21% 5.16%
Vinno Capital ..... Interest in controlled
corporation (7)
5,776,900 5.78% 5,776,900 H Shares 5.21% 5.16%
Ding Mingfeng ..... Interest in controlled
corporation (7)
5,776,900 5.78% 5,776,900 H Shares 5.21% 5.16%
Huzhou Zhuosheng .. Beneficial owner 1,110,200 1.11% 1,110,200 Domestic
Shares
100% 0.99%
SUBSTANTIAL SHAREHOLDERS
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Notes:
(1) The calculation is based on the total number of 98,889,800 H Shares to be converted from Domestic Shares in issue
pursuant to the Conversion of Domestic Shares into H Shares and 12,000,000 H Shares to be issued pursuant to the Global
Offering (assuming that the Over-allotment Option is not exercised). See “Share Capital—Conversion of Domestic Shares
into H Shares” for the respective numbers of Domestic Shares and H Shares held by the relevant Shareholders as of the
Latest Practicable Date and immediately after the completion of the Global Offering and the Conversion of Domestic
Shares into H Shares.
(2) As of the Latest Practicable Date, Mr. Xu acted as the general partner of Shanghai FourSemi Management, Xiamen
FourSemi Management and Xiamen FourSemi Chuangke. Under the SFO, Mr. Xu is deemed to be interested in the entire
Shares held by Shanghai FourSemi Management, Xiamen FourSemi Management and Xiamen FourSemi Chuangke.
(3) Pursuant to the Concert Party Agreement, Mr. Liu irrevocably agreed to, among others, act in concert with Mr. Xu and
follow his instructions in exercising his vote at the general meetings of our Company. Under the SFO, Mr. Xu is deemed to
be interested in the Shares held by Mr. Liu, and Mr. Liu is deemed to be interested in the Shares held by Mr. Xu.
(4) As of the Latest Practicable Date, Xiamen FourSemi Management was owned as to approximately 35.60% by Mr. Qian
Shun as a limited partner. Under the SFO, Mr. Qian Shun is deemed to be interested in the Shares held by Xiamen
FourSemi Management.
(5) As of the Latest Practicable Date, Gansheng Investment was owned as to approximately 1% by Xianyun Management as
the general partner, which in turn was owned as to 65% by Ye Feng. None of the limited partners holds more than
one-third partnership interests in Gansheng Investment. Under the SFO, each of Xianyun Management and Ye Feng is
deemed to be interested in the Shares held by Gansheng Investment.
(6) As of the Latest Practicable Date, Moqin Intelligent was wholly owned by Huaqin Technology, which in turn was a
subsidiary of Shanghai Aoqin. As of the Latest Practicable Date, Shanghai Aoqin was owned as to 51% by Qiu Wensheng
(˖͛). None of other shareholders holds more than one-third equity interests in Huaqin Technology and Shanghai
Aoqin. Under the SFO, each of Huaqin Technology, Shanghai Aoqin and Qiu Wensheng is deemed to be interested in the
Shares held by Moqin Intelligent.
(7) As of the Latest Practicable Date, Vinno Intelligent and Health was owned as to approximately 1.78% by Vinno Capital as
the general partner, which in turn was owned as to 72% by Ding Mingfeng. None of the limited partners holds more than
one-third partnership interests in Vinno Intelligent and Health. Under the SFO, each of Vinno Capital and Ding Mingfeng
is deemed to be interested in the Shares held by Vinno Intelligent and Health.
Save as disclosed above and in “Appendix IV—Statutory and General Information”, our Directors
are not aware of any person who will, immediately following the completion of the Global Offering and
the Conversion of Domestic Shares into H Shares (and the offering of any additional H Shares pursuant
to the Over-allotment Option), have an interest or short position in the Shares or underlying shares of
our Company which would be required to be disclosed to our Company and the Stock Exchange under
Divisions 2 and 3 of Part XV of the SFO or will, 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 our Company or any other members of our Group.
SUBSTANTIAL SHAREHOLDERS
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This section presents certain information regarding our share capital prior to and following the
completion of the Global Offering and the Conversion of Domestic Shares into H Shares.
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date and immediately prior to the Global Offering and the
Conversion of Domestic Shares into H Shares, the registered and issued share capital of our Company
was RMB100,000,000, comprising 100,000,000 Domestic Shares with a nominal value of RMB1.00
each.
UPON COMPLETION OF THE GLOBAL OFFERING AND THE CONVERSION OF
DOMESTIC SHARES INTO H SHARES
Immediately following completion of the Global Offering and the Conversion of Domestic Shares
into H Shares, assuming that the Over-allotment Option is not exercised, the registered and issued share
capital of our Company will be as follows:
Description of Shares Number of Shares
Approximate
percentage of the
enlarged issued
share capital after
the Global
Offering
Domestic Shares .................................... 1,110,200 0.99%
H Shares converted from Domestic Shares ................. 98,889,800 88.29%
H Shares to be issued under the Global Offering ............ 12,000,000 10.71%
Total ........................................... 112,000,000 100.00%
See “—Conversion of Domestic Shares into H Shares” below for details of the identities of our Shareholders whose Shares will
remain as Domestic Shares and whose Shares will be converted into H Shares upon Listing.
Immediately following completion of the Global Offering and the Conversion of Domestic Shares
into H Shares, assuming that the Over-allotment Option is fully exercised, our registered and issued
share capital will be as follows:
Description of Shares Number of Shares
Approximate
percentage of the
enlarged issued
share capital after
the Global
Offering
Domestic Shares .................................... 1,110,200 0.98%
H Shares converted from Domestic Shares ................. 98,889,800 86.90%
H Shares to be issued under the Global Offering ............ 13,800,000 12.13%
Total ........................................... 113,800,000 100.00%
See “—Conversion of Domestic Shares into H Shares” below for details of the identities of our Shareholders whose Shares will
remain as Domestic Shares and whose Shares will be converted into H Shares upon Listing.
OUR SHARES
Upon completion of the Global Offering and the Conversion of Domestic Shares into H Shares,
the Shares will consist of Domestic Shares and H Shares. Domestic Shares and H Shares are all
ordinary Shares in the share capital of our Company. Apart from certain qualified domestic institutional
investors in the PRC, the qualified PRC investors under the Shanghai-Hong Kong Stock Connect and
the Shenzhen-Hong Kong Stock Connect and other persons who are entitled to hold our H Shares
pursuant to relevant PRC laws and regulations or upon approvals of any competent authorities, H
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Shares generally cannot be subscribed for by or traded between legal or natural PRC persons. Domestic
Shares can only be subscribed for by and traded between legal or natural PRC persons, qualified
foreign institutional investors and foreign strategic investors. H Shares may only be subscribed for and
traded in Hong Kong dollars. Domestic Shares, on the other hand, may only be subscribed for and
transferred in Renminbi. Domestic Shares and H Shares are regarded as one class of Shares under our
Articles of Association. Our Domestic Shares are not listed or traded on any stock exchange.
RANKING
Save as described in this prospectus, Domestic Shares and H Shares shall rank pari passu with
each other in all other respects and, in particular, will rank equally for dividends or distributions
declared, paid or made. All dividends in respect of the H Shares are to be paid by us in Hong Kong
dollars whereas all dividends in respect of Domestic Shares are to be paid by us in Renminbi. In
addition to cash, dividends may be distributed in the form of Shares. For holders of H Shares, dividends
in the form of Shares will be distributed in the form of additional H Shares. For holders of Domestic
Shares, dividends in the form of Shares will be distributed in the form of additional Domestic Shares.
CONVERSION OF DOMESTIC SHARES INTO H SHARES
According to stipulations made by the State Council’s securities regulatory authority and the
Articles of Association, our Domestic Shares may be converted into H Shares, and such converted H
Shares may be listed or traded on an overseas stock exchange, provided that prior to the conversion and
trading of such converted Shares, the requisite internal approval processes have been duly completed
and the approvals from the relevant PRC regulatory authorities, including the CSRC, and the relevant
overseas stock exchange have been obtained. In addition, such conversion, trading and listing shall in
all respects comply with the regulations prescribed by the State Council’s securities regulatory
authorities and the regulations, requirements and procedures prescribed by the relevant overseas stock
exchange.
The Conversion of Domestic Shares into H Shares will involve an aggregate of 98,889,800
Domestic Shares held by 41 existing Shareholders (the “ Full Circulation Participating
Shareholders ”), representing 88.29% of total issued Shares of our Company upon completion of the
Conversion of Domestic Shares into H Shares and the Global Offering (assuming the Over-allotment
Option is not exercised).
Name of Shareholder
Number of
Domestic Shares as
of the Latest
Practicable Date
Number of
H Shares to be
converted from
Domestic Shares
upon Listing
Approximate
shareholding
percentage held by
the Full
Circulation
Participating
Shareholders
immediately after
the Global
Offering and the
Conversion of
Domestic Shares
into H Shares
(assuming the
Over-allotment
Option is not
exercised)
(%)
Mr. Xu ............................ 8,859,800 8,859,800 7.91
Shanghai FourSemi Management .......... 12,617,800 12,617,800 11.27
Xiamen FourSemi Management ........... 7,073,700 7,073,700 6.32
Xiamen FourSemi Chuangke ............. 4,206,100 4,206,100 3.76
Mr. Liu ............................ 2,518,500 2,518,500 2.25
Gansheng Investment .................. 6,406,800 6,406,800 5.72
Moqin Intelligent ..................... 6,361,400 6,361,400 5.68
Vinno Intelligent and Health ............. 5,776,900 5,776,900 5.16
Fortune Chuanghong ................... 4,696,800 4,696,800 4.19
SHARE CAPITAL
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Name of Shareholder
Number of
Domestic Shares as
of the Latest
Practicable Date
Number of
H Shares to be
converted from
Domestic Shares
upon Listing
Approximate
shareholding
percentage held by
the Full
Circulation
Participating
Shareholders
immediately after
the Global
Offering and the
Conversion of
Domestic Shares
into H Shares
(assuming the
Over-allotment
Option is not
exercised)
(%)
Ark Investment ....................... 4,601,600 4,601,600 4.11
Junyi Kaixiang ....................... 3,527,500 3,527,500 3.15
Chaoyue Moore ...................... 3,022,300 3,022,300 2.70
Junsheng Investment ................... 2,921,500 2,921,500 2.61
Mr. Liu Changjiang ................... 2,458,100 2,458,100 2.19
Zhanxiang Information ................. 1,981,800 1,981,800 1.77
Xingtou Youxuan ..................... 1,850,300 1,850,300 1.65
Wentianxia .......................... 1,687,300 1,687,300 1.51
Weitai Shenghong ..................... 1,680,000 1,680,000 1.50
Junyi Borui ......................... 1,473,700 1,473,700 1.32
Zhengchu Venture Capital ............... 1,356,700 1,356,700 1.21
Kuanlian Investment ................... 1,322,800 1,322,800 1.18
Junqing Investment .................... 1,302,300 1,302,300 1.16
Chufeng Investment ................... 1,222,700 1,222,700 1.09
Huzhou Zhuosheng .................... 1,110,200 — —
Shunke Investment .................... 1,052,500 1,052,500 0.94
Ms. Jiang Yan ....................... 950,000 950,000 0.85
Yahe Xinghua ........................ 906,700 906,700 0.81
Shunying Investment ................... 747,100 747,100 0.67
Junxin Ruizhi ........................ 670,400 670,400 0.60
Jicui Meibai ......................... 604,500 604,500 0.54
Longcheer Intelligence ................. 604,500 604,500 0.54
Haisheng Xianting .................... 576,900 576,900 0.52
Fumiao Investment .................... 560,500 560,500 0.50
Xiamen Innovation .................... 555,100 555,100 0.50
Sanming Innovation ................... 555,100 555,100 0.50
Huide Investment ..................... 555,100 555,100 0.50
Shuimu Xinchi ....................... 384,600 384,600 0.34
Furui Chuangxin ...................... 383,900 383,900 0.34
Mr. Deng Tianshun .................... 336,000 336,000 0.30
Caizhi Chuangying .................... 221,300 221,300 0.20
Zhiyou Management ................... 181,300 181,300 0.16
Xinda Venture Capital .................. 117,900 117,900 0.11
Total .............................. 100,000,000 98,889,800 88.29
If any other of the Domestic Shares are to be converted, listed and traded as H Shares on the
Stock Exchange, such conversion, listing and trading will need the approval of the relevant PRC
regulatory authorities, including the CSRC, and the approval of the Stock Exchange. We may apply for
the listing of all or any portion of the Domestic Shares on the Stock Exchange as H Shares to ensure
that the conversion process can be completed promptly upon notice to the Stock Exchange and delivery
of Shares for entry on the H Share register. Approval of Shareholders at a general meeting is not
required for the listing and trading of the converted Shares on an overseas stock exchange.
Listing Review and Approval by the CSRC
In accordance with the Guidelines for Applying “Full Circulation” for Domestic Unlisted Shares
of H-share Listed Companies (Hˏ ) and Trial
Administrative Measures and relevant five guidelines announced by the CSRC, H-share listed
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companies which apply for the conversion of domestic unlisted shares into H shares for listing and
circulation on the Stock Exchange shall conform to relevant regulations promulgated by the CSRC, and
authorize the company to file with the CSRC on their behalf.
Our Company applied for a “Full Circulation” with the CSRC on July 1, 2025, and submitted the
application reports, authorization documents of Shareholders of Domestic Shares for which an H-share
“Full Circulation” was applied, commitment about the compliance of share acquisition and other
documents in accordance with the requirements of the CSRC. Our Company received the reply from the
CSRC dated February 6, 2026, in relation to the “Full Circulation”, pursuant to which, a total of
98,889,800 unlisted Domestic shares (with a nominal value of RMB1.00 each) held by the Full
Circulation Participating Shareholders were approved to be converted into H Shares, and the relevant
Shares may be listed on the Stock Exchange upon completion of the conversion. This reply shall remain
effective within 12 months from the date of approval.
Listing Approval by the Stock Exchange
We have applied to the Listing Committee of the Stock Exchange for the granting of listing of,
and permission to deal in, our H Shares to be issued pursuant to the Global Offering (including any H
Shares which may be issued pursuant to the exercise of the Over-allotment Option) and the H Shares to
be converted from 98,889,800 Domestic Shares, which is subject to the approval by the Stock
Exchange.
We will perform the following procedures for the Conversion of Domestic Shares into H Shares
after receiving the approval of the Stock Exchange: (1) giving instructions to our H Share Registrar
regarding the relevant share certificates of the converted H Shares; and (2) enabling the converted H
Shares to be accepted as eligible securities by HKSCC for deposit, clearance and settlement in the
CCASS. The Full Circulation Participating Shareholders may only deal in the H Shares upon
completion of the domestic procedures as disclosed in this section.
TRANSFER OF SHARES ISSUED PRIOR TO THE GLOBAL OFFERING
The PRC Company Law provides that in relation to the public offering of a company, the shares
issued prior to the public offering shall not be transferred within a period of one year from the date on
which the publicly offered shares are listed on any stock exchange. Accordingly, Shares issued by our
Company prior to the Listing Date shall be subject to this statutory restriction and not be transferred
within a period of one year from the Listing Date.
REGISTRATION OF SHARES NOT LISTED ON AN OVERSEAS STOCK EXCHANGE
According to the Guidelines for the “Full Circulation” Program for Domestic Unlisted Shares of
H-share Listed Companies (Hˏ ) announced by the
CSRC, the domestic shareholders of unlisted shares shall handle share transfer registration business in
accordance with the relevant business rules of CSDC. Further, H-share companies should submit the
relevant status reports to the CSRC within 15 days after the transfer registration with the CSDC of the
shares involved in the application is completed.
CIRCUMSTANCES UNDER WHICH GENERAL MEETING IS REQUIRED
For details of circumstances under which our Shareholders’ general meeting is required, please see
“Appendix III—Summary of Articles of Association—Shareholders and Shareholders’
Meetings—General requirements of shareholders’ meetings” in this prospectus.
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FUTURE PLANS
See “Business—Our Growth Strategies” for a detailed description of our future plans.
USE OF PROCEEDS
We estimate that the net proceeds of the Global Offering, after deducting the estimated
underwriting commissions and other fees and expenses payable by us in connection with the Global
Offering, will be approximately HK$480.3 million, assuming an Offer Price of HK$45.00 per Offer
Share (being the mid-point of the indicative range of the Offer Price of HK$40.00 to HK$50.00 per
Offer Share), without the exercise of the Over-allotment Option.
We currently intend to use the net proceeds from the Global Offering for the purposes and in the
amounts as set out below:
 approximately 46.8% of the net proceeds, or HK$224.6 million, will be used for establishing
a new research and development center to enhance our R&D capabilities and technological
competitiveness for power amplifier audio chips over the next five years. Specifically, we
plan to use:
(1) approximately 31.1% of the net proceeds, or HK$149.2 million, to expand our R&D
team by recruiting approximately 200 experienced professionals in total over the next
five years. Specifically,
a) approximately 25.7% of the net proceeds, or HK$123.3 million, will be used to
hire chip design engineers, chip testing engineers and algorithm engineers to
expand our product portfolio on low-power audio chips, mid/high-power audio
chips and haptic drivers. These professionals will focus on (i) the development of
our next generation low-power audio chips, diversifying and enhancing our FS15,
FS18 and FS19 series; (ii) the expansion of our haptic driver product offerings to
provide customers with a broader range of options; and (iii) the development of
our new products, such as SAR sensor product line, which regulates radiation
emitted by mobile devices and enables touchscreen interaction sensing. We plan
to recruit approximately 173 chip design engineers, chip testing engineers and
algorithm engineers over the next four years;
b) approximately 5.4% of the net proceeds, or HK$25.9 million, will be used to hire
senior-level automotive-grade chip design engineers focusing on the development
and expansion of our automotive-grade power amplifier audio chip product
offerings, including diversifying the product offering of our FS5024 series to
provide customers with a broader range of choices. We plan to hire approximately
28 senior-level automotive-grade chip design engineers over the next four years;
(2) approximately 3.6% of the net proceeds, or HK$17.5 million, to invest in critical
design infrastructure, including EDA software tools and necessary intellectual property
rights, to empower our engineers with the tools needed to efficiently design and
simulate next-generation chips. We plan to use EDA and similar software tools for chip
design. We plan to invest in new EDA software tools of RMB1.5 million, RMB3.0
million, RMB3.0 million and RMB3.0 million in 2026, 2027, 2028 and 2029,
respectively;
(3) approximately 3.0% of the net proceeds, or HK$14.2 million, to pay for the lease
agreement of a new R&D center with a lease term of ten years, and a rent of
approximately HKD7.2 million per year. We are still in the progress of selecting the
location of our new R&D center and have not taken any definitive step in regards to
our relocation or expansion;
FUTURE PLANS AND USE OF PROCEEDS
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(4) approximately 5.7% of the net proceeds, or HK$27.3 million, to expand an
automotive-grade laboratory. Specifically,
a) approximately 0.5% of the net proceeds, or HK$2.3 million, will be used for the
renovation and decoration of the laboratory to meet automotive-grade standards;
b) approximately 5.2% of the net proceeds, or HK$25.0 million, will be used for
purchasing equipment for performance test analytics and reliability validation
systems. The equipment to be acquired mainly includes thermal shock testing
chamber, scanning electron microscope (“ SEM”), transmission electron
microscope (“ TEM”), highly accelerated stress test (“ HAST”) equipment,
high-precision power supply, signal frequency analyzer, and automotive-grade
high accuracy operating tables. These investments are intended to build integrated
infrastructure to ensure that our chips meet the highest automotive reliability
standards, including AEC-Q100 certification, while maintaining performance
integrity under extreme operating conditions. Our equipment generally has a
useful life of five years.
(5) approximately 2.7% of the net proceeds, or HK$13.0 million, to procure testing
services from well-known wafer foundries, including the typical cost of consumables
such as photomasks; and
(6) approximately 0.7% of the net proceeds, or HK$3.4 million, to purchase servers and
other hardware infrastructures mainly used for R&D data processing and storage and
for daily business operations, to better support research and development;
 approximately 17.8% of the net proceeds, or HK$85.5 million, for procurement of automatic
testing equipment and for construction of an in-house automatic testing verification line, as
well as recruiting supply chain managing engineers. Specifically, we plan to use:
(1) approximately 16.2% of the net proceeds, or HK$77.9 million, to purchase automatic
testing equipment that we use to conduct functional performance and reliability test on
our chip products before delivery to ensure our products meet quality standards, such
as temperature testing chambers, digital signal wave displayer, heat wave detector,
signal frequency emitter, programmable DC power supply and signal frequency
analyzer. Our equipment generally has a useful life of five years. We currently have
three thermal shock testing chambers with an average remaining useful life of 2.1
years, 12 audio analyzers with an average remaining useful life of 2.1 years, and three
oscilloscopes with an average remaining useful life of 1.1 years. These investments are
intended to improve our supply chain stability, and to build our in-house automatic
testing verification line for semiconductor product testing to ensure our chip products
meet performance standards and maintain high levels of stability. We plan to implement
approximately five, eight, 10 and 15 of the aforementioned devices in 2026, 2027,
2028 and 2029, respectively; and
(2) approximately 1.6% of the net proceeds, or HK$7.6 million, to recruit and train
approximately 12 specialized engineers for our supply chain quality management in
total over the next five years;
 approximately 17.3% of the net proceeds, or HK$83.3 million, to pursue strategic
acquisitions and partnerships to enhance our industry integration and strengthen our position
in the power amplifier audio chip industry. We seek potential investment and acquisition
opportunities in both domestic and international markets, aim to expand our product
portfolio, and enhance our market reach. Through effective industry resource integration, we
will strengthen our competitive positioning and drive sustainable long-term value creation.
In selecting potential targets, we generally will consider factors including but not limited to
FUTURE PLANS AND USE OF PROCEEDS
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alignment with our strategic plan, synergy with our existing business, experience of the
management team, valuation of the target, and past operating performance. As of the Latest
Practicable Date, we have not identified any specific target, or participated in any
commercial negotiation or entered into any memorandum of understanding or letter of intent
with respect to any potential target. We intend to pursue horizontal acquisitions to expand
the range or models of chips available for sale, aiming to achieve cross-selling within our
existing customer base. We plan to acquire a majority stake to secure control in such
transactions;
 approximately 8.1% of the net proceeds, or HK$38.9 million, for the marketing and sales of
products. Specifically, we plan to use:
(1) approximately 4.8%, or HK$22.9 million to hire approximately 32 sales personnel in
total, with a majority of them based in mainland China, over the next four years, to
strengthen our presence in (i) U.S., (ii) Taiwan province, China and (iii) South Korea.
The roles and functions of our new sales personnel include conducting market and
customer research to inform our product development direction, driving product
promotion and acquiring new clients, and managing customer relationships and
providing after-sales services post-delivery; and
(2) approximately 3.3%, or HK$16.0 million for marketing initiatives, including launching
promotion campaigns, and participating in exhibitions and forums to further enhance
our brand awareness; and
 approximately 10.0% of the net proceeds, or HK$48.0 million, for working capital and other
general corporate purposes.
The above allocation of the proceeds will be adjusted on a pro rata basis in the event that the
Offer Price is fixed below or above the mid-point of the indicative price range. We will receive net
proceeds of HK$480.0 million assuming an Offer Price of HK$40.00 (being the low-point of the
indicative range of the Offer Price), and net proceeds of HK$600.0 million assuming an Offer Price of
HK$50.00 (being the high-point of the indicative range of the Offer Price), without the exercise of the
Over-allotment Option. Any additional proceeds received from the exercise of the Over-allotment
Option will also be allocated to the above purposes on a pro rata basis. In the event that the
Over-allotment Option is exercised in full, we will receive net proceeds of HK$480.3 million (after
deducting the estimated underwriting commissions and other fees and expenses payable by us in
connection with the Global Offering and assuming an Offer Price of HK$45.00 per Share, being the
mid-point of our indicative Offer Price range).
To the extent that the net proceeds are not immediately applied to the above purposes, we will
deposit the net proceeds into short-term interest-bearing accounts at licensed commercial banks and/or
other authorized financial institutions as defined under the Securities and Futures Ordinance or the
applicable laws and regulations in other jurisdictions, so long as it is deemed to be in the best interests
of our Company.
FUTURE PLANS AND USE OF PROCEEDS
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HONG KONG UNDERWRITERS
Guotai Junan Securities (Hong Kong) Limited
Orient Securities (Hong Kong) Limited
CCB International Capital Limited
ABCI Securities Company Limited
Futu Securities International (Hong Kong) Limited
Yellow River Securities Limited
Shenwan Hongyuan Securities (H.K.) Limited
Livermore Holdings Limited
Huafu International Securities Limited
Yuen Meta (International) Securities Limited
Zheshang International Financial Holdings Co., Limited
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company is offering 600,000 Hong
Kong Offer Shares (subject to re-allocation described below) for subscription by the public in Hong
Kong on, and subject to, the terms and conditions set out in this prospectus and the Hong Kong
Underwriting Agreement at the Offer Price.
Subject to:
(a) the Listing Committee granting the listing of, and permission to deal in, our H Shares in
issue and to be issued as mentioned in this prospectus and such listing and permission not
subsequently being revoked; and
(b) certain other conditions set out in the Hong Kong Underwriting Agreement (including but
not limited to the Offer Price being agreed upon between the Overall Coordinators (for
themselves and on behalf of the other Underwriters) and our Company),
the Hong Kong Underwriters have agreed severally, and not jointly, to subscribe for, or procure
subscribers for, the Hong Kong Offer Shares which are being offered but 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. If, for any reason, the Offer Price is not agreed between the Overall
Coordinators (for themselves and on behalf of the other Hong Kong Underwriters) and our Company,
the Global Offering will not proceed and will lapse.
The Hong Kong Underwriting Agreement is conditional upon and subject to the International
Underwriting Agreement having been entered into and becoming unconditional and not having been
terminated.
If there is any change to the offer size due to change in the number of Offer Shares initially
offered in the Global Offering (other than pursuant to the exercise of the Over-allotment Option and/or
reallocation mechanism as disclosed in this prospectus), or change to the Offer Price which leads to the
resulting price falling outside the indicative Offer Price range as stated in this prospectus, or if our
UNDERWRITING
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Company becomes aware that there has been a significant adverse change affecting any matter
contained in this prospectus or a significant new matter has arisen, the inclusion of information in
respect of which would have been required to be in this prospectus if it had arisen before this
prospectus was issued, after the issue of this prospectus and before the commencement of dealings in
our H Shares as prescribed under Rule 11.13 of the Listing Rules, we are required to cancel the Global
Offering and relaunch the offer on FINI and issue a supplemental prospectus or a new prospectus.
Grounds for termination
The respective obligations of the Hong Kong Underwriters to subscribe for, or procure subscribers
for, the Hong Kong Offer Shares under the Hong Kong Underwriting Agreement are subject to
termination. The Joint Sponsors, the Sponsor-OCs and the Overall Coordinators (for themselves and on
behalf of the Hong Kong Underwriters) may, in their sole and absolute discretion terminate the Hong
Kong Underwriting Agreement with immediate effect by notice in writing to our Company from the
Joint Sponsors, the Sponsor-OCs and the Overall Coordinators (for themselves and on behalf of the
Hong Kong Underwriters) at any time prior to 8:00 a.m. on the Listing Date (the “ Termination Time ”)
if any of the following events shall occur prior to the Termination Time:
(a) there develops, occurs, exists or comes into force:
(i) any new law or regulation or any change or development involving a prospective
change or any event or series of events or circumstances likely to result in a change or
a development involving a prospective change in existing laws or regulations, or the
interpretation or application thereof by any court or any competent authority in or
affecting Hong Kong, the PRC, the United States, the United Kingdom, the European
Union (or any member thereof), Japan, Singapore or other jurisdictions relevant to our
Group or the Global Offering (each a “ Relevant Jurisdiction ” and collectively, the
“Relevant Jurisdictions ”); or
(ii) any change or development involving a prospective change, or any event or series of
events or circumstances likely to result in a change or prospective change, in any local,
national, regional or international financial, political, military, industrial, economic,
fiscal, legal, regulatory, currency, credit or market conditions or sentiments, taxation,
equity securities or currency exchange rate or controls or any monetary or trading
settlement system, or foreign investment regulations (including, without limitation, a
devaluation of the Hong Kong dollar, United States dollar or Renminbi against any
foreign currencies, a change in the system under which the value of the Hong Kong
dollar is linked to that of the United States dollar or the Renminbi is linked to any
foreign currency or currencies) or other financial markets (including, without
limitation, conditions and sentiments in stock and bond markets, money and foreign
exchange markets, the inter-bank markets and credit markets) in or affecting any
Relevant Jurisdictions, or affecting an investment in the Offer Shares; or
(iii) any event or series of events, or circumstances in the nature of force majeure
(including, without limitation, any acts of government, declaration of a regional,
national or international emergency or war, calamity, crisis, economic sanctions,
strikes, labor disputes, other industrial actions, lock-outs, fire, explosion, flooding,
tsunami, earthquake, volcanic eruption, civil commotion, riots, rebellion, public
disorder, paralysis in government operations, acts of war, epidemic, pandemic, outbreak
or escalation, mutation or aggravation of diseases , accident or interruption or delay in
transportation, local, national, regional or international outbreak or escalation of
hostilities (whether or not war is or has been declared), act of God or act of terrorism
(whether or not responsibility has been claimed)) in or affecting any of the Relevant
Jurisdictions; or
UNDERWRITING
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(iv) the imposition or declaration of any moratorium, suspension or limitation (including
without limitation, any imposition of or requirement for any minimum or maximum
price limit or price range) on (i) the trading in shares or securities generally on the
Stock Exchange, the Shanghai Stock Exchange, the Shenzhen Stock Exchange, the
Tokyo Stock Exchange, the Singapore Stock Exchange, the New York Stock Exchange,
the NASDAQ Global Market or the London Stock Exchange; or (ii) the trading in any
securities of our Company listed or quoted on a stock exchange or an over-the-counter
market; or
(v) the imposition or declaration of any general moratorium on banking activities in or
affecting any of the Relevant Jurisdictions or any disruption in commercial banking or
foreign exchange trading or securities settlement or clearing services, procedures or
matters in or affecting any of the Relevant Jurisdictions; or
(vi) other than with the prior written consent of the Joint Sponsor-OCs, the issue or
requirement to issue by our Company of a supplement or amendment to the Prospectus
or other documents in connection with the offer and sale of the Offer Shares pursuant
to the Companies (Winding up and Miscellaneous Provisions) Ordinance or the Listing
Rules or upon any requirement or request of the Stock Exchange and/or the SFC; or
(vii) the commencement by any authority or other regulatory or political body or
organization of any public action or investigation against our Group or a director or a
senior management member of our Group or announcing an intention to take any such
action; or
(viii) the imposition of sanctions or export controls in whatever form, directly or indirectly,
on our Group or any of the Controlling Shareholders or by or on any Relevant
Jurisdiction, or the withdrawal of trading privileges which existed on the date of the
Hong Kong Underwriting Agreement, in whatever form, directly or indirectly, by, or
for, any Relevant Jurisdiction; or
(ix) a change or development involving a prospective change in or affecting taxes or
exchange control, currency exchange rates or foreign investment regulations (including,
without limitation, a material devaluation of the Hong Kong dollar, United States
dollar, the Renminbi, Euro, British pound or Swiss Franc against any foreign
currencies, a change in the system under which the value of the Hong Kong dollar is
linked to that of the United States dollar or 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; or
(x) any valid demand by creditors for payment or repayment of indebtedness of any
member of our Group or in respect of which any member of our Group is liable prior
to its stated maturity; or
(xi) any non-compliance of the Prospectus (or any other documents used in connection with
the contemplated offering, allotment, issue, subscription or sale of any of the Offer
Shares), the CSRC Filings or any aspect of the Global Offering with the Listing Rules
or any other applicable Laws; or
(xii) any litigation, dispute, legal action or claim or regulatory or administrative
investigation or action being threatened, instigated or announced against any member
of our Group or any Controlling Shareholder or any Director or senior management
members as named in the Prospectus which are not disclosed in the Prospectus; or
(xiii) any contravention by our Company, our Group or any Director of the Listing Rules or
applicable Laws which are not disclosed in the Prospectus; or
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(xiv) any change or prospective change, or a materialization of, any of the risks set out in
the section headed “Risk Factors” in the Prospectus,
which, in any such case individually or in the aggregate, in the sole and absolute opinion of
the Joint Sponsors, the Sponsor-OCs and the Overall Coordinators (for themselves and on
behalf of the Hong Kong Underwriters): (i) has or will or may have a material adverse
effect, whether directly or indirectly, on the assets, liabilities, business, general affairs,
management, prospects, shareholders’ equity, profits, losses, results of operations, position or
condition, financial or otherwise, or performance of our Company or our Group as a whole;
(ii) has or will or may have a material adverse effect on the success of the Global Offering
or the level of applications under the Hong Kong Public Offering or the level of indications
of interest under the International Offering; or (iii) makes or will make or may make it
impracticable, inadvisable, inexpedient or incapable for any material part of the Hong Kong
Underwriting Agreement, the Hong Kong Public Offering or the Global Offering to be
performed or implemented as envisaged, or for the Hong Kong Public Offering and/or the
Global Offering to proceed, or to market the Global Offering or the delivery or distribution
of the Offer Shares on the terms and in the manner contemplated by the Offering Documents
(as defined in the Hong Kong Underwriting Agreement); or (iv) has or will or may have the
effect of making any part of the Hong Kong Underwriting Agreement (including
underwriting) incapable of performance in accordance with its terms or preventing the
processing of applications and/or payments pursuant to the Global Offering or pursuant to
the underwriting thereof; or
(b) any of the Joint Sponsors, the Sponsor-OCs and the Overall Coordinators (for themselves
and on behalf of the Hong Kong Underwriters) shall become aware of the fact that, or have
reasonable cause to believe that:
(i) any statement contained in any of the Hong Kong Public Offering Documents, the
CSRC Filings and/or any notices, announcements, advertisements, communications or
other documents in connection with the Hong Kong Public Offering (including any
supplement or amendment thereto) (the “ Offer Related Documents ”), save and except
for the underwriters’ information, was, when it was issued, or has become untrue,
incorrect, inaccurate in any material respect or misleading; or that any estimate,
forecast, expression of opinion, intention or expectation contained in any such Offer
Related Documents, was, when it was issued, or has become unfair or misleading in
any respect or based on untrue, dishonest or unreasonable assumptions or given in bad
faith; or
(ii) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of the Prospectus, constitute a material
omission or misstatement in any Offer Related Document; or
(iii) any breach of, or any event or circumstance rendering untrue or incorrect or misleading
in any respect, any of the representations, warranties and undertakings given by our
Company or the Controlling Shareholders in the Hong Kong Underwriting Agreement
or the International Underwriting Agreement; or
(iv) any event, act or omission which gives rise or is likely to give rise to any liability of
any of the Indemnifying Parties pursuant to the indemnities in the Hong Kong
Underwriting Agreement; or
(v) any breach of any of the obligations or undertakings imposed upon our Company or
any member of the Controlling Shareholders (as applicable) to the Hong Kong
Underwriting Agreement or the International Underwriting Agreement; or
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(vi) there is any change or development involving a prospective change, constituting or
having a material adverse effect; or
(vii) that the chairman of the Board, any Director or any member of senior management of
our Company named in the Prospectus seeks to retire, or is removed from office or
vacating his/her office; or
(viii) any Director or any member of senior management of our Company named in the
Prospectus is being charged with an indictable offence or prohibited by operation of
law or otherwise disqualified from taking part in the management or taking directorship
of a company or there is the commencement by any governmental, political or
regulatory body of any investigation or other action against any Director or member of
senior management of our Company in his or her capacity as such or any member of
our Group or an announcement by any governmental, political or regulatory body that
it intends to commence any such investigation or take any such action; or
(ix) our Company withdraws the Prospectus (and/or any other documents used in
connection with the subscription or sale of any of the Offer Shares pursuant to the
Global Offering) or the Global Offering; or
(x) that the approval by the Listing Committee of the listing of, and permission to deal in,
the H Shares in issue and to be issued pursuant to the Global Offering (including
pursuant to any exercise of the Over-allotment Option) is refused or not granted, other
than subject to customary conditions, on or before the Listing Date, or if granted, the
approval is subsequently withdrawn, cancelled, qualified (other than by customary
conditions), revoked or withheld; or
(xi) any person (other than any of the Joint Sponsors) has withdrawn its consent to the
issue of the Prospectus with the inclusion of its reports, letters and/or legal opinions
(as the case may be) and references to its name included in the form and context in
which it respectively appears; or
(xii) any prohibition on our Company for whatever reason from offering, allotting, issuing
or selling any of the Offer Shares pursuant to the terms of the Global Offering; or
(xiii) any person (other than the Joint Sponsors) has withdrawn or sought to withdraw its
consent to being named in any of the Offering Documents or to the issue of any of the
Offering Documents; or
(xiv) an order or petition is presented for the winding-up or liquidation of any member of
our Group, or any member of our Group makes any composition or arrangement with
its creditors or enters into a scheme of arrangement or any resolution is passed for the
winding-up of any member of our Group or a provisional liquidator, receiver or
manager is appointed over all or part of the assets or undertaking of any member of
our Group or anything analogous thereto occurs in respect of any member of our
Group; or
(xv) (A) the notice of acceptance of the CSRC Filings issued by the CSRC and/or the
results of the CSRC Filings published on the website of the CSRC is rejected,
withdrawn, revoked or invalidated; or (B) other than with the prior written consent of
the Joint Sponsor-OCs, the issue or requirement to issue by our Company of a
supplement or amendment to the CSRC Filings pursuant to the CSRC Rules or upon
any requirement or request of the CSRC; or (C) any non-compliance of the CSRC
Filings with the CSRC Rules or any other applicable Laws; or
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(xvi) that a material portion of the orders placed or confirmed in the bookbuilding process
have been withdrawn, terminated or cancelled, as a result of the payment of the
relevant investment amount not being received or settled in the stipulated time and
manner or otherwise.
Undertakings given to the Stock Exchange pursuant to the Listing Rules
By our Controlling Shareholders
Pursuant to Rules 10.07 and 18C.13 of the Listing Rules, each of our Controlling Shareholders
has irrevocably and unconditionally undertaken to us and to the Stock Exchange that except pursuant to
the Global Offering, or the Over-allotment Option, it/he shall not and shall procure that the relevant
registered Shareholder(s) controlled by it/him shall not, in the period commencing on the date by
reference to which disclosure of its/his shareholdings in our Company is made in this prospectus and
ending on the date which is 12 months from the Listing Date, dispose of, nor enter into any agreement
to dispose of or otherwise create any options, rights, interests or encumbrances (save as pursuant to a
pledge or charge as security 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) in respect of, any of our
securities that it/he is shown to beneficially own in this prospectus.
Each of our Controlling Shareholders has further irrevocably and unconditionally undertaken to us
and the Stock Exchange that, within the period commencing on the date by reference to which
disclosure of its/his shareholdings in our Company is made in this prospectus and ending on the date
which is 12 months from the Listing Date, it/he will:
(a) when it/he pledges or charges any securities in our Company beneficially owned by it/him 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 pursuant to Note (2) to Rule 10.07(2)
of the Listing Rules, immediately inform us in writing of such pledge or charge together
with the number of our securities so pledged or charged; and
(b) when it/he receives indications, either verbal or written, from the pledgee or chargee that
any of our pledged or charged securities beneficially owned by it/him will be disposed of,
immediately inform us in writing of such indications.
We will also inform the Stock Exchange as soon as we have been informed of the matters
mentioned in the paragraphs (a) and (b) above by any of our Controlling Shareholders and make a
public disclosure in relation to such information by way of an announcement in accordance with the
Listing Rules.
By the Key Persons
Pursuant to Rule 18C.14(1) of the Listing Rules, each of the key persons and their close
associates (the “ Key Persons ”), comprising Mr. Xu, Mr. Liu, Shanghai FourSemi Management, Xiamen
FourSemi Management and Xiamen FourSemi Chuangke, has irrevocably and unconditionally
undertaken to us and to the Stock Exchange that except pursuant to the Global Offering, or the
Over-allotment Option, it/he shall not and shall procure that its/his respective close associates and the
relevant registered Shareholder(s) controlled by it/him shall not, in the period commencing on the date
by reference to which disclosure of its/his shareholdings (or its/his respective close associate’s
shareholdings, if applicable) in our Company is made in this prospectus and ending on the date which
is 12 months from the Listing Date, dispose of, nor enter into any agreement to dispose of or otherwise
create any options, rights, interests or encumbrances (save as (i) pursuant to a pledge or charge as
security 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, or (ii) disposing any interest in such securities
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of our Company in the circumstances provided under Rule 18C.15 of the Listing Rules) in respect of,
any of our securities that it/he/she (or its/his respective close associate, if applicable) is shown to
beneficially own in this prospectus.
In accordance with Note 2 to Rule 18C.14 of the Listing Rules, each of the Key Persons has
further irrevocably and unconditionally undertaken to us and the Stock Exchange, and shall procure
its/his respective close associates, that within the period commencing on the date by reference to which
disclosure of its/his shareholdings (or its/his respective close associate’s shareholdings, if applicable) in
our Company is made in this prospectus and ending on the date which is 12 months from the Listing
Date, it/he will:
(a) when it/he (or its/his respective close associate) pledges or charges any securities in our
Company beneficially owned by it/him (or by its/his respective close associate) in favor of
an authorized institution (as defined in the Banking Ordinance (Chapter 155 of the Laws of
Hong Kong)), immediately inform us in writing of such pledge or charge together with the
number of our securities so pledged or charged; and
(b) when it/he (or its/his respective close associate) receives indications, either verbal or written,
from the pledgee or chargee that any of our pledged or charged securities beneficially owned
by it/him (or by its/his respective close associate) will be disposed of, immediately inform
us in writing of such indications.
We will also inform the Stock Exchange as soon as we have been informed of the matters
mentioned in the paragraphs (a) and (b) above by any of the Key Persons and make a public disclosure
in relation to such information by way of an announcement in accordance with the Listing Rules.
By Pathfinder SIIs
Pursuant to Rule 18C.14(2) of the Listing Rules, each of the Pathfinder SIIs has irrevocably and
unconditionally undertaken to us and to the Stock Exchange that except pursuant to the Global
Offering, or the Over-allotment Option, it shall not, and shall procure that the relevant registered
holder(s) shall not, in the period commencing on the date by reference to which disclosure of its
shareholdings in our Company is made in this prospectus and ending on the date which is 6 months
from the Listing Date, dispose of, nor enter into any agreement to dispose of or otherwise create any
options, rights, interests or encumbrances (save as (i) pursuant to a pledge or charge as security 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, or (ii) disposing any interest in such securities of our Company
in the circumstances provided under Rule 18C.15 of the Listing Rules) in respect of, any of our
securities that it is shown to beneficially own in this prospectus.
In accordance with Note 2 to Rule 18C.14 of the Listing Rules, each of the Pathfinder SIIs has
further irrevocably and unconditionally undertaken to us and the Stock Exchange that, within the period
commencing on the date by reference to which disclosure of its shareholdings in our Company is made
in this prospectus and ending on the date which is 6 months from the Listing Date, it will:
(a) when it pledges or charges any securities in our 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)), immediately inform us in writing of such pledge or charge together with
the number of our securities so pledged or charged; and
(b) when it receives indications, either verbal or written, from the pledgee or chargee that any of
our pledged or charged securities beneficially owned by it will be disposed of, immediately
inform us in writing of such indications.
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We will also inform the Stock Exchange as soon as we have been informed of the matters
mentioned in the paragraphs (a) and (b) above by any of the Pathfinder SIIs and make a public
disclosure in relation to such information by way of an announcement in accordance with the Listing
Rules.
Undertakings given to the Hong Kong Underwriters
Undertakings by our Company
Our Company has undertaken to each of the Joint Sponsors, the Sponsor-OCs, the Overall
Coordinators, the Joint Global Coordinators, the CMIs, the Joint Bookrunners, the Joint Lead Managers
and the Hong Kong Underwriters that except pursuant to the Global Offering (including pursuant to the
Over-allotment Option), at any time after the date of the Hong Kong Underwriting Agreement up to and
including the date falling six months after the Listing Date (the “ First Six Month Period ”), it will not,
without the prior written consent of the Joint Sponsors and the Sponsor-OCs (for themselves and on
behalf of the Hong Kong Underwriters) and unless in compliance with the requirements of the Listing
Rules:
(a) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree to
allot, issue or sell, assign, mortgage, charge, pledge, hypothecate, lend, grant or sell any
option, warrant, contract or right to subscribe for or purchase, grant or purchase any option,
warrant, contract or right to allot, issue or sell, or otherwise transfer or dispose of or create
an encumbrance over, or agree to transfer or dispose of or create an encumbrance over,
either directly or indirectly, conditionally or unconditionally, or repurchase, any legal or
beneficial interest in the share capital or any other securities of our Company or any interest
in any of the foregoing (including, without limitation, any securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any warrants or
other rights to purchase any share capital or other securities of our Company, as applicable),
or deposit any share capital or other securities of our Company, as applicable, with a
depositary in connection with the issue of depositary receipts; or
(b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership (legal or beneficial) of the Shares or any other
securities of our Company, or any interest in any of the foregoing (including, without
limitation, any securities convertible into or exchangeable or exercisable for or that represent
the right to receive, or any warrants or other rights to purchase, any Shares); or
(c) enter into any transaction with the same economic effect as any transaction described in (a)
or (b) above; or
(d) offer to or agree to do any of the foregoing specified in (a), (b) or (c) or announce any
intention to do so,
in each case, whether any of the foregoing transactions is to be settled by delivery of share capital or
such other securities, in cash or otherwise (whether or not the issue of such share capital or other
securities will be completed within the First Six Month Period). Our Company further agrees that, in
the event our Company is allowed to enter into any of the transactions described in (a), (b) or (c) above
or offers to or agrees to or announces any intention to effect any such transaction during the period of
six months commencing on the date on which the First Six Month Period expires (the “Second Six
Month Period”), it will take all reasonable steps to ensure that such an issue or disposal will not, and
no other act of our Company will, create a disorderly or false market for any H Shares or other
securities of our Company.
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Our Controlling Shareholders undertake to each of the Joint Sponsors, the Sponsor-OCs, the
Overall Coordinators, the Joint Global Coordinators, the CMIs, the Joint Bookrunners, the Joint Lead
Managers and the Hong Kong Underwriters that it/he shall procure our Company to comply with the
above undertakings.
Our Company has agreed and undertaken to each of the Joint Sponsors, the Sponsor-OCs, the
Overall Coordinators, the Joint Global Coordinators, the CMIs, the Joint Bookrunners, the Joint Lead
Managers and the Hong Kong Underwriters that we will, and our Controlling Shareholders undertake to
procure that our Company will, comply with the minimum public float requirements (the “ Minimum
Public Float Requirements ”) and the minimum free float requirements (the “ Minimum Free Float
Requirements ”) specified in the Listing Rules, and we will not (a) effect any purchase of the H Shares,
or agree to do so, which may reduce the holdings of the H Shares held by the public (as defined in Rule
8.24 of the Listing Rules) to below the Minimum Public Float Requirements or any waiver granted and
not revoked by the Stock Exchange prior to the expiration of the Second Six Month Period without first
having obtained the prior written consent of the Joint Sponsors and the Sponsor-OCs (for themselves
and on behalf of the Hong Kong Underwriters); or (b) enter into any agreement, arrangement or
transaction which shall cause or have the effect of causing the portion of the H Shares that are held by
the public and that are available for trading and not subject to any disposal restrictions (whether under
contract, the Listing Rules, applicable Laws or otherwise) on the Listing Date to fall below the
Minimum Free Float Requirements under Rule 19A.13C of the Listing Rules.
By our Controlling Shareholders
Each of our Controlling Shareholders hereby undertakes to each of our Company, the Joint
Sponsors, the Sponsor-OCs, the Overall Coordinators, the Joint Global Coordinators, the CMIs, the
Joint Bookrunners, the Joint Lead Managers and the Hong Kong Underwriters that, without the prior
written consent of the Joint Sponsors and the Sponsor-OCs (for themselves and on behalf of the Hong
Kong Underwriters) and unless in compliance with the requirements of the Listing Rules:
(a) 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, at any time
during the First Six Month Period, (i) sell, offer to sell, accept subscription for, contract or
agree to allot, issue or sell, mortgage, charge, pledge, hypothecate, lend, grant or sell any
option, warrant, contract or right to purchase, grant or purchase any option, warrant, contract
or right to sell, or otherwise transfer or dispose of or create an Encumbrance over, or agree
to transfer or dispose of or create an Encumbrance over, either directly or indirectly,
conditionally or unconditionally, any H Shares or other securities of our Company or any
interest therein (including, without limitation, any securities convertible into or exchangeable
or exercisable for or that represent the right to receive, or any warrants or other rights to
purchase, any H Shares or any such other securities, as applicable or any interest in any of
the foregoing), or deposit any H Shares or other securities of our Company with a depositary
in connection with the issue of depositary receipts, or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership (legal or beneficial) of any H Shares or other securities of our Company or any
interest therein (including, without limitation, any securities convertible into or exchangeable
or exercisable for or that represent the right to receive, or any warrants or other rights to
purchase, any H Shares or any such other securities, as applicable or any interest in any of
the foregoing), or (iii) enter into any transaction with the same economic effect as any
transaction specified in (i) or (ii) above, or (iv) offer to or agree to or announce any
intention to effect any transaction specified in (i), (ii) or (iii) above, in each case, whether
any of the transactions specified in (i), (ii) or (iii) above is to be settled by delivery of H
Shares or other securities of our Company or in cash or otherwise, and whether or not the
transactions will be completed within the First Six Month Period;
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(b) it/he will not, during the Second Six Month Period, enter into any of the transactions
specified in (i), (ii) or (iii) above or offer to or agree to contract to or publicly announce any
intention to effect any such transaction if, immediately following any sale, transfer or
disposal or upon the exercise or enforcement of any option, right, interest or Encumbrance
pursuant to such transaction, it will cease to be a member of the Controlling Shareholders or
would together with the other member of the Controlling Shareholders cease to be the
Controlling Shareholders of our Company; and
(c) until the expiry of the Second Six Month Period, in the event that it enters into any of the
transactions specified in (a)(i), (ii) or (iii) or offer to or agrees to or contract to or publicly
announce any intention to effect any such transaction, it/he will take all reasonable steps to
ensure that such a disposal will not create a disorderly or false market in the securities of
our Company.
Subject to compliance with the applicable requirements under the Listing Rules, the restrictions shall
not prevent our Controlling Shareholders from (i) purchasing additional H Shares or other securities of
our Company and disposing of such additional H Shares or securities of our Company in accordance
with the Listing Rules, provided that any such purchase or disposal does not contravene the lock-up
arrangements with the Controlling Shareholders referred to in this prospectus or the compliance by our
Company with the Minimum Public Float Requirements, and (ii) using the H Shares or other securities
of our Company or any interest therein beneficially owned by them as security (including a charge or a
pledge) in favor of an authorized institution (as defined in the Banking Ordinance (Chapter 155 of the
Laws of Hong Kong)) for a bona fide commercial loan, provided that (a) the relevant Controlling
Shareholder will immediately inform our Company and the Sponsor-OCs in writing of such pledge or
charge together with the number of H Shares or other securities of our Company so pledged or charged
if and when it/he or the relevant registered holder(s) pledges or charges any H Shares or other securities
of our Company beneficially owned by it/him, and (b) when the relevant Controlling Shareholder
receives indications, either verbal or written, from the pledgee or chargee of any H Shares that any of
the pledged or charged H Shares or other securities of our Company will be disposed of, it/he will
immediately inform our Company and the Sponsor-OCs of such indications.
Our Company hereby undertakes to the Joint Sponsors, the Sponsor-OCs, the Overall
Coordinators, the Joint Global Coordinators, the CMIs, the Joint Bookrunners, the Joint Lead Managers
and the Hong Kong Underwriters that upon receiving such information in writing from the Controlling
Shareholders, it will, as soon as practicable and if required pursuant to the Listing Rules, the SFO
and/or any other applicable Law, notify the Stock Exchange and/or other relevant Authorities, and make
a public disclosure in relation to such information by way of an announcement.
Underwriters’ interest in our Group
Save for their respective obligations under the Hong Kong Underwriting Agreement and the
International Underwriting Agreement, as of the Latest Practicable Date, none of the Underwriters was
interested directly or indirectly in any of our Shares or securities or any shares or securities of any
other member of our Group or had any right or option (whether legally enforceable or not) to subscribe
for, or to nominate persons to subscribe for, any of our Shares or securities or any shares or securities
of any other member of our Group.
Following the completion of the Global Offering, the Underwriters and their affiliated companies
may hold a certain portion of our H Shares as a result of fulfilling their respective obligations under the
Hong Kong Underwriting Agreement and International Underwriting Agreement.
The Joint Sponsors’ Independence
Each of the Joint Sponsors satisfies the independence criteria set out in Rule 3A.07 of the Listing
Rules.
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The International Offering
International Underwriting Agreement
In connection with the International Offering, we expect to enter into the International
Underwriting Agreement on the Price Determination Date with, among others, the International
Underwriters. Under the International Underwriting Agreement, the International Underwriters would,
subject to certain conditions, severally and not jointly, agree to purchase the International Offer Shares
or procure purchasers for the International Offer Shares initially being offered pursuant to the
International Offering. See “Structure of the Global Offering—The International Offering” in this
prospectus.
Under the International Underwriting Agreement, we intend to grant to the International
Underwriters and the Capital Market Intermediaries the Over-Allotment Option, exercisable in whole or
in part at one or more times, at the sole and absolute discretion of the Overall Coordinators (for
themselves and on behalf of the International Underwriters) from the Listing Date until 30 days from
the last day for the lodging of applications under the Hong Kong Public Offering to require us to issue
and allot up to an aggregate of 1,800,000 additional Offer Shares, representing 15.0% of the Offer
Shares initially available under the Global Offering and at the Offer Price, to cover, among other
things, any over-allocations in the International Offering, if any.
Total Commission and Expenses
The Underwriters and the Capital Market Intermediaries will receive an underwriting commission
equal to 2.5% of the aggregate Offer Price of all the Offer Shares, including Offer Shares to be issued
pursuant to the Over-Allotment Option (the “ Fixed Fees ”). Our Company may, at our sole and absolute
discretion, pay to all the Underwriters and the Capital Market Intermediaries an incentive fee not
exceeding 1.5% of the Offer Price of all the Offer Shares (including Offer Shares to be issued pursuant
to the Over-Allotment Option) (collectively, the “ Discretionary Fees ”).
The ratio of Fixed Fees and Discretionary Fees payable to all Underwriters and the Capital Market
Intermediaries is therefore approximately 62.5:37.5. For unsubscribed Hong Kong Offer Shares
reallocated to the International Offering, we will pay an underwriting commission at the rate applicable
to the International Offering and such commission will be paid to the relevant International
Underwriters (and not the Hong Kong Underwriters). No additional fee will be payable by our
Company to the Underwriters and the Capital Market Intermediaries. The Joint Sponsors will, in
addition, receive a fee acting as the sponsor to the Listing and will be reimbursed for their expenses.
Assuming the Over-Allotment Option, if any, is not exercised and based on an Offer Price of
HK$45.00 (being the mid-point of the stated range of the Offer Price between HK$40.00 and
HK$50.00), the aggregate commissions and estimated expenses, together with the Stock Exchange
listing fee, SFC transaction levy, AFRC transaction levy, Stock Exchange trading fee, legal and other
professional fees, printing and other fees and expenses, payable by our Company relating to the Global
Offering, are estimated to amount in aggregate to approximately HK$59.7 million in total and are
payable by us.
Indemnity
We have undertaken to indemnify and keep indemnified on demand (on an after-tax basis) and
hold harmless each of the Joint Sponsors, the Sponsor-OCs, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the
Capital Market Intermediaries (for themselves and on trust for its directors, supervisors, officers,
employees, agents, assignees and affiliates) from and against certain losses which they may suffer,
including liabilities under the U.S. Securities Act, losses arising from their performance of their
obligations under the Underwriting Agreements and any breach by us of the Underwriting Agreements,
as the case may be.
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Restrictions on the Offer Shares
No action has been taken to permit a public offering of the Offer Shares, other than in Hong
Kong, or the distribution of this prospectus in any jurisdiction other than Hong Kong. Accordingly, this
prospectus may not be used for the purpose of, and does not constitute, an offer or invitation in any
jurisdiction or in any 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.
Over-Allotment and Stabilization
Details of the arrangements relating to the stabilization and Over-allotment Option, if any, are set
forth in “Structure of the Global Offering—Stabilization,” and “Structure and Conditions of the Global
Offering—Over-allotment Option.”
Activities by Syndicate Members
The Hong Kong Underwriters and the International Underwriters (together, the “ Syndicate
Members ”) and their respective 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 respective 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 or their respective affiliates may purchase, sell or hold a broad array
of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default
swaps and other financial instruments for their own account and for the accounts of their customers.
Such investment and trading activities may involve or relate to assets, securities and/or instruments of
our Company and/or persons and entities in relation with our Company and may also include swaps and
other financial instruments entered into for hedging purposes in connection with our Group’s loans and
other debt.
In relation to the H Shares, the activities of the Syndicate Members or their respective affiliates
could include acting as agent for buyers and sellers of the H Shares, entering into transactions with
those buyers and sellers in a principal capacity, including as a lender to initial purchasers of the H
Shares (the financing of which may be secured by the H Shares) in the Global Offering, proprietary
trading in the H Shares, and entering into over the counter or listed derivative transactions or listed or
unlisted securities transactions (including issuing securities such as derivative warrants listed on a stock
exchange) which have as their underlying assets, assets including the H Shares. Such transactions may
be carried out as bilateral agreements or trades with selected counterparties. Those activities may
require hedging activity by those entities involving, directly or indirectly, the buying and selling of the
H Shares, which may have a negative impact on the trading price of the H Shares. All such activities
could occur in Hong Kong and elsewhere in the world and may result in the Syndicate Members or
their affiliates holding long and/or short positions in the H Shares, in baskets of securities or indices
including the H Shares, in units of funds that may purchase the H Shares, or in derivatives related to
any of the foregoing.
In relation to issues by the Syndicate Members or their respective affiliates of any listed securities
having the H Shares as their underlying securities, whether on the Stock Exchange or on any other
stock exchange, the rules of the stock exchange may require the issuer of those securities (or one of its
affiliates or agents) to act as a market maker or liquidity provider in the security, and this will also
result in hedging activity in the H Shares in most cases.
All such activities may occur both during and after the end of the stabilizing period as described
in the section headed “Structure of the Global Offering” in this prospectus. Such activities may affect
the market price or value of the H Shares, the liquidity or trading volume in the H Shares and the
volatility of the price of the H Shares, and the extent to which this occurs from day to day cannot be
estimated.
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It should be noted that when engaging in any of these activities, the Syndicate Members or their
respective affiliates will be subject to certain restrictions, including the following:
(a) the Syndicate Members or their respective affiliates (other than the Stabilizing Manager or
any person acting for it) must not, in connection with the distribution of the Offer Shares,
effect any transactions (including issuing or entering into any option or other derivative
transactions relating to the Offer Shares), whether in the open market or otherwise, with a
view to stabilizing or maintaining the market price of any of the Offer Shares at levels other
than those which might otherwise prevail in the open market; and
(b) the Syndicate Members or their respective affiliates must comply with all applicable laws
and regulations, including the market misconduct provisions of the SFO which includes the
provisions prohibiting insider dealing, false trading, price rigging and stock market
manipulation.
The Syndicate Members or their respective affiliates have provided from time to time, and expect
to provide in the future, investment banking, derivative and other services to us and our affiliates, for
which the Syndicate Members or their respective affiliates have received or will receive customary fees
and commissions.
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THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part of the
Global Offering. The Global Offering comprises:
 the Hong Kong Public Offering of initially 600,000 Offer Shares (subject to reallocation as
mentioned below) in Hong Kong as described below in the paragraph headed “The Hong
Kong Public Offering”; and
 the International Offering of initially 11,400,000 Offer Shares (subject to reallocation and
the Over-Allotment Option as described below) outside the United States (including to
professional, institutional and corporate investors and other investors anticipated to have a
sizeable demand for the Offer Shares in Hong Kong) in offshore transactions in reliance on
Regulation S as described below in the paragraph headed “The International Offering.”
Investors may apply for the Hong Kong Offer Shares under the Hong Kong Public Offering or
indicate an interest, if qualified to do so, for the International Offer Shares under the International
Offering, but may not do both.
The 12,000,000 Offer Shares in the Global Offering will represent 10.71% of our enlarged share
capital immediately after the completion of the Global Offering, without taking into account the
exercise of the Over-allotment Option. If the Over-allotment Option is exercised in full, the Offer
Shares will represent approximately 12.13% of our enlarged share capital immediately following the
completion of the Global Offering.
References to applications, application monies or procedure for applications relate solely to the
Hong Kong Public Offering.
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares initially offered
We are initially offering for subscription by the public in Hong Kong 600,000 Offer Shares,
representing approximately 5.0% of the total number of Offer Shares initially available under the
Global Offering. Subject to the reallocation of Offer Shares between the International Offering and the
Hong Kong Public Offering, the number of Offer Shares offered under the Hong Kong Public Offering
will represent approximately 0.5% of our enlarged issued share capital immediately after completion of
the Global Offering, assuming the Over-allotment Option is not exercised.
The Hong Kong Public Offering is open to members of the public in Hong Kong as well as to
institutional and professional investors. Professional investors generally include brokers, dealers,
companies (including fund managers) whose ordinary business involves dealing in shares and other
securities and corporate entities that regularly invest in shares and other securities.
Completion of the Hong Kong Public Offering is subject to the conditions as set forth below in
“—Conditions of the Global Offering.”
Allocation
Allocation of Hong Kong Offer Shares to investors under the Hong Kong Public Offering will be
based on the level of valid applications received under the Hong Kong Public Offering. The basis of
allocation may vary depending on the number of Hong Kong Offer Shares validly applied for by
applicants. We may, if necessary, allocate the Hong Kong Offer Shares on the basis of balloting, which
would mean that some applicants may receive a higher allocation than others who have applied for the
same number of Hong Kong Offer Shares and those applicants who are not successful in the ballot may
not receive any Hong Kong Offer Shares.
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For allocation purposes only, the total number of Offer Shares available under the Hong Kong
Public Offering is to be divided equally into two pools (subject to the reallocation of the Offer Shares
between the Hong Kong Public Offering and the International Offering referred to below) (with any odd
board lots being allocated to pool A):
 Pool A: The Hong Kong Offer Shares in pool A will be allocated on an equitable basis to
applicants who have applied for the Hong Kong Offer Shares with an aggregate subscription
price of HK$5 million or less (excluding brokerage, SFC transaction levy, AFRC transaction
levy and Stock Exchange trading fee payable); and
 Pool B: The Hong Kong Offer Shares in pool B will be allocated on an equitable basis to
applicants who have applied for the Hong Kong Offer Shares with an aggregate subscription
price of more than HK$5 million and up to the value of pool B (excluding brokerage, SFC
transaction levy, AFRC transaction levy and Stock Exchange trading fee payable).
Investors should be aware that applications in pool A and applications in pool B may receive
different allocation ratios. If the Hong Kong Offer Shares in one (but not both) of the pools are
under-subscribed, the surplus Hong Kong Offer Shares will be transferred to the other pool to satisfy
demand in the pool and be allocated accordingly. For the purpose of this subsection only, the
“subscription price” for the Hong Kong Offer Shares means the price payable on application therefor
(without regard to the Offer Price as finally determined). Applicants can only receive an allocation of
Hong Kong Offer Shares from either pool A or pool B but not from both pools. Multiple or suspected
multiple applications under the Hong Kong Public Offering and any application for more than 300,000
Hong Kong Offer Shares will be rejected.
Reallocation
The allocation of Offer Shares between the Hong Kong Public Offering and the International
Offering is subject to reallocation under the Listing Rules. Paragraph 4.2 of Practice Note 18 of the
Listing Rules (as modified by Rule 18C.09 of the Listing Rules) requires a clawback mechanism to be
put in place which would have the effect of increasing 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 if the International Offer Shares are fully subscribed or over-subscribed and certain
prescribed total demand levels are reached. If the number of Shares validly applied for under the Hong
Kong Public Offering represents (i) 10 times or more but less than 50 times, and (ii) 50 times or more,
of the number of Offer Shares initially available under the Hong Kong Public Offering, the total
number of Offer Shares available under the Hong Kong Public Offering will be increased to 1,200,000
Offer Shares and 2,400,000 Offer Shares, respectively, representing 10% (in the case of (i)) and 20%
(in the case of (ii)), respectively, of the total number of Offer Shares initially available under the
Global Offering (before any exercise of the Over-allotment Option). In each case, the number of Offer
Shares to be allocated to the International Offering will be correspondingly reduced and the additional
Offer Shares will be allocated between Pool A and Pool B in such manner as the Overall Coordinators
deem appropriate.
The Overall Coordinators may, at their discretion, reallocate Offer Shares initially allocated for
the International Offering to the Hong Kong Public Offering to satisfy valid applications in Pool A and
Pool B in accordance with Chapter 4.14 of the Guide as follows: if (i) the International Offer Shares
are undersubscribed and the Hong Kong Offer Shares are fully subscribed or oversubscribed
irrespective of the number of times; or (ii) the International Offer Shares are fully subscribed or
oversubscribed and the Hong Kong Offer Shares are oversubscribed by less than 10 times of the
number of Offer Shares initially available under the Hong Kong Public Offering, provided that the
Offer Price would be fixed at HK$40.00 per Offer Share, the low-end of the Offer Price range stated in
this Prospectus, up to 600,000 Offer Shares may be reallocated to the Hong Kong Public Offering from
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the International Offering, so that the total number of the Offer Shares available under the Hong Kong
Public Offering will be increased to 1,200,000 Offer Shares, representing twice of the number of the
Offer Shares initially available under Hong Kong Public Offering.
The Offer Shares to be offered in the Hong Kong Public Offering and the International Offering
may be reallocated as between these offerings at the discretion of the Overall Coordinators (for
themselves and on behalf of the Underwriters). The Overall Coordinators may reallocate Offer Shares
from the International Offering to the Hong Kong Public Offering to satisfy valid applications under the
Hong Kong Public Offering, in such proportions as the Overall Coordinators may, in their sole and
absolute discretion, determine, subject to the requirements under Chapter 4.14 of the Guide.
If the Hong Kong Public Offering is not fully subscribed, the Overall Coordinators may reallocate
all or any unsubscribed Hong Kong Offer Shares to the International Offering, in such proportions as
the Overall Coordinators may, in their sole and absolute discretion, determine.
Where the International Offer Shares are undersubscribed, if the Hong Kong Offer Shares are also
undersubscribed, the Global Offering will not proceed unless the Underwriters would subscribe or
procure subscribers for their respective applicable proportions of the Offer Shares being offered which
are not taken up under the Global Offering on the terms and conditions of this Prospectus and the
Underwriting Agreements.
Applications
Each applicant under the Hong Kong Public Offering will be required to give an undertaking and
confirmation in the application submitted by him that he and any person(s) for whose benefit he is
making the application has not applied for or taken up, or indicated an interest for, and will not apply
for or take up, or indicate an interest for, any International Offer Shares under the International
Offering, and such applicant’s application under International Offering is liable to be rejected if the said
undertaking and/or confirmation is 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), maximum price of HK$50.00 per Offer Share in addition to brokerage of
1.0%, SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and Stock Exchange
trading fee of 0.00565% on each Offer Share, amounting to a total of HK$5,050.43 for one board lot of
100 H Shares. If the Offer Price, as finally determined on the Price Determination Date in the manner
as described below in “—Pricing and Allocation,” is less than the maximum price of HK$50.00 per
Offer Share, appropriate refund payments (including brokerage, SFC transaction levy, AFRC transaction
levy and Stock Exchange trading fee attributable to the surplus application monies) will be made to
successful applicants, without interest. See “How to Apply for Hong Kong Offer Shares”.
THE INTERNATIONAL OFFERING
Number of Offer Shares Initially Offered
We will be initially offering for subscription under the International Offering 11,400,000 Offer
Shares, representing approximately 95.0% of the Offer Shares under the Global Offering. Subject to the
reallocation of Offer Shares between the International Offering and the Hong Kong Public Offering, the
number of Offer Shares offered under the International Offering will represent approximately 10.2% of
our enlarged issued share capital immediately after completion of the Global Offering, assuming the
Over-allotment Option is not exercised.
Allocation
The International Offer Shares will conditionally be offered to selected professional, institutional
and corporate investors and other investors anticipated to have a sizeable demand for our Offer Shares
in Hong Kong and other jurisdictions outside the United States in offshore transactions in reliance on
Regulation S. Professional investors generally include brokers, dealers, companies (including fund
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managers) whose ordinary business involves dealing in shares and other securities and corporate entities
which regularly invest in shares and other securities. Prospective professional, institutional and other
investors will be required to specify the number of the International 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 the Price Determination
Date.
Allocation of the International Offer Shares pursuant to the International Offering will be
determined by the Overall Coordinators and the Joint Global Coordinators and will be based on a
number of factors including the level and timing of demand, 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, and/or hold or sell its H Shares, after the Listing. Such allocation is
intended to result in a distribution of the International Offer Shares on a basis which would lead to the
establishment of a solid professional and institutional shareholder base to the benefit of our Company
and our Shareholders as a whole.
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 applications of Offer Shares under the
International Offering.
Reallocation
The total number of Offer Shares to be issued pursuant to the International Offering may change
as a result of the clawback arrangement as described above in “—The Hong Kong Public
Offering—Reallocation” or the Over-allotment Option in whole or in part and/or any reallocation of
unsubscribed Offer Shares originally included in the Hong Kong Public Offering.
OVER-ALLOTMENT OPTION
In connection with the Global Offering, it is expected that we will grant the Over-allotment
Option to 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 1,800,000 H Shares,
representing 15.0% of the Offer Shares initially available under the Global Offering, at the Offer Price
under the International Offering to, among other things (such as effecting the permitted stabilizing
actions as set out in the section headed “Stabilization” below), cover over-allocations in the
International Offering, if any.
If the Over-allotment Option is exercised in full, the additional H Shares to be issued pursuant
thereto will represent approximately 1.6% of our enlarged issued share capital immediately following
the completion of the Global Offering. In the event that the Over-allotment Option is exercised, an
announcement will be made.
STABILIZATION
Stabilization is a practice used by underwriters in some markets to facilitate the distribution of
securities. To stabilize, the underwriters may bid for, or purchase, the 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
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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 its affiliates or any person
acting for it), on behalf of the Underwriters, may over-allocate or effect transactions with a view to
stabilizing or supporting the market price of our H Shares at a level higher than that which might
otherwise prevail in the open market for a limited period after the Listing Date. However, there is no
obligation on the Stabilizing Manager (or its affiliates 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 its affiliates or any person acting for it) and in what the Stabilizing
Manager reasonably regards as the best interest of our Company, (b) may be discontinued at any time,
and (c) is required to be brought to an end within 30 days of the last day for lodging applications under
the Hong Kong Public Offering.
Stabilization action permitted in Hong Kong under the Securities and Futures (Price Stabilizing)
Rules of the SFO includes (i) over-allocating for the purpose of preventing or minimizing any reduction
in the market price of our H Shares, (ii) selling or agreeing to sell our H Shares so as to establish a
short position in them for the purpose of preventing or minimizing any reduction in the market price of
our H Shares, (iii) purchasing, or agreeing to purchase, our H Shares pursuant to the Over-allotment
Option in order to close out any position established under (i) or (ii) above, (iv) purchasing, or agreeing
to purchase, any of our H Shares for the sole purpose of preventing or minimizing any reduction in the
market price of our H Shares, (v) selling or agreeing to sell any H Shares in order to liquidate any
position established as a result of those purchases, and (vi) offering or attempting to do anything as
described in (ii), (iii), (iv) or (v) above.
Specifically, prospective applicants for and investors in H Shares should note that:
 the Stabilizing Manager (or its affiliates or any person acting for it) may, in connection with
the stabilizing action, maintain a long position in the H Shares;
 there is no certainty as to the extent to which and the time or period for which the
Stabilizing Manager (or its affiliates or any person acting for it) will maintain such a long
position;
 liquidation of any such long position by the Stabilizing Manager (or its affiliates or any
person acting for it) and selling in the open market may have an adverse impact on the
market price of the H Shares;
 no stabilizing action can be taken to support the price of the H Shares for longer than the
stabilizing period, which will begin on the Listing Date and is expected to expire on
Saturday, April 25, 2026, being the 30th day after the last day for lodging applications under
the Hong Kong Public Offering. After this date, when no further action may be taken to
support the price of the H Shares, demand for the H Shares, and therefore the price of the H
Shares, could fall;
 the price of the H Shares cannot be assured to stay at or above the Offer Price by the taking
of any stabilizing action; and
 stabilizing bids or transactions effected in the course of the stabilizing action may be made
at any price at or below the Offer Price, which means that stabilizing bids or transactions
effected may be made at a price below the price paid by applicants for, or investors in, the
Offer Shares.
In order to effect stabilization actions, the Stabilizing Manager will arrange cover of up to an
aggregate of 1,800,000 H Shares, representing up to 15% of the initial Offer Shares, through delayed
delivery arrangements with investors who have been allocated Offer Shares in the International
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Offering. The delayed delivery arrangements (if specifically agreed by an investor) relate only to the
delay in the delivery of the Offer Shares to such investor and the consideration for the Offer Shares
allocated to such investor will be settled before the Listing Date. Both the size of such cover and the
extent to which the Over-allotment Option can be exercised will depend on whether arrangements can
be made with investors such that a sufficient number of H Shares can be delivered on a delayed basis.
If no investor in the International Offering agrees to the delayed delivery arrangements, no stabilizing
actions will be undertaken by the Stabilizing Manager and the Over-allotment Option will not be
exercised.
Our Company will ensure or procure that an announcement in compliance with the Securities and
Futures (Price Stabilizing) Rules of the SFO will be made within seven days of the expiration of the
stabilization period.
OVER-ALLOCATION
Following any over-allocation of H Shares in connection with the Global Offering, the Stabilizing
Manager (or any person acting for it) may cover such over-allocations by (among other methods)
exercising the Over-allotment Option in full or in part, using H Shares purchased by the Stabilizing
Manager (or any person acting for it) in the secondary market at prices that do not exceed the Offer
Price.
PRICING AND ALLOCATION
Our Company, the Overall Coordinators (for themselves and on behalf of the Underwriters) will
determine the Offer Price and sign an agreement on the Price Determination Date, when market demand
for the Offer Shares will be determined. The Price Determination Date is expected to be on or before
Friday, March 27, 2026.
The Offer Price will not be more than HK$50.00 per Offer Share and is expected to be not less
than HK$40.00 per Offer Share, unless otherwise announced, as further explained below. If you apply
for the Offer Shares under the Hong Kong Public Offering, you may pay the maximum price of
HK$50.00 per Offer Share (subject to application channels), plus brokerage of 1.0%, SFC transaction
levy of 0.0027%, AFRC transaction levy of 0.00015% and Stock Exchange trading fee of 0.00565%,
amounting to a total of HK$5,050.43 for one board lot of 100 H Shares.
If the Offer Price, as finally determined in the manner described below, is lower than HK$50.00,
we will refund the respective difference, including brokerage, SFC transaction levy, AFRC transaction
levy and Stock Exchange trading fee attributable to the surplus application monies. We will not pay
interest on any refunded amounts. See “How to Apply for Hong Kong Offer Shares”.
The International Underwriters will be soliciting from prospective investors indications of interest
in acquiring Offer Shares in the International Offering. Prospective professional and institutional
investors will be required to specify the number of Offer Shares under the International Offering they
would be prepared to acquire either at different prices or at a particular price. This process, known as
“book-building,” is expected to continue up to, and to cease on or around, the last day for lodging
applications under the Hong Kong Public Offering.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, where
considered appropriate, based on the level of interest expressed by prospective professional,
institutional and other investors during the book-building process, and with the consent of our
Company, reduce the number of Offer Shares and/or the Offer Price range below that stated in this
prospectus at any time prior to the morning of the last day for lodging applications under the Hong
Kong Public Offering and publish an announcement or supplemental prospectus on the website of the
Stock Exchange at www.hkexnews.hk
and our website at www.foursemi.com (the contents of the
website do not form a part of this prospectus). Upon issue of such an announcement, the revised
number of Offer Shares and/or offer price range will be final and conclusive and the Offer Price, if
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agreed upon by us, will be fixed within such revised offer price range. Our Company will also, as soon
as practicable following the decision to make such change, issue a supplemental prospectus updating
investors of the change in the number of Offer Shares being offered under the Global Offering and/or
the Offer Price. The Global Offering must first be canceled and subsequently relaunched on FINI
pursuant to the supplemental prospectus.
Before submitting applications for the Hong Kong Offer Shares, applicants should have regard to
the possibility that any announcement of a reduction in the number of Offer Shares and/or the Offer
Price range may not be made until the day which is the last day for lodging applications under the
Hong Kong Public Offering. Such notice will also confirm or revise, as appropriate, the working capital
statement, the use of proceeds, the Global Offering statistics as currently set out in “Summary”, and
any other financial information which may change as a result of such reduction. In the absence of any
such notice so published, the number of Offer Shares will not be reduced and the Offer Price, if agreed
upon with the Company, the Overall Coordinators (for themselves and on behalf of the Underwriters)
will under no circumstances be set outside the Offer Price range as stated in this prospectus.
If you have already submitted an application for the Hong Kong Offer Shares before the last day
for lodging applications under the Hong Kong Public Offering, you will not be allowed to subsequently
withdraw your application.
The final Offer Price, the level of indication of interest in the International Offering, the basis of
allotment of Offer Shares available under the Hong Kong Public Offering and the Hong Kong
identification document numbers of successful applicants under the Hong Kong Public Offering are
expected to be made available in a variety of channels in the manner described in “How to Apply for
Hong Kong Offer Shares—B. Publication of Results”.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares is conditional on:
 the Listing Committee granting approval for the listing of, and permission to deal in our H
Shares in issue and to be issued as described in this prospectus (including the Offer Shares
which may be issued pursuant to the exercise of the Over-allotment Option);
 the Offer Price having been agreed between us and the Overall Coordinators (for themselves
and on behalf of the Underwriters);
 the execution and delivery of the International Underwriting Agreement on or about 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 unconditional and not having been terminated in
accordance with the terms of the respective agreements,
in each case on or before the dates and times specified in the Hong Kong Underwriting Agreement
and/or the International Underwriting Agreement, as the case may be (unless and to the extent such
conditions are validly waived on or before such dates and times) and in any event not later than
Wednesday, April 22, 2026, being the 30th day 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 us on or before 12:00 noon on Friday, March 27, 2026, 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, each other offering becoming unconditional and not having been
terminated in accordance with its respective terms. If the above conditions are not fulfilled or waived
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prior to the times and dates specified, the Global Offering will lapse and the Stock Exchange will be
notified immediately. Notice of the lapse of the Hong Kong Public Offering will be published by the
Company on the website of the Stock Exchange at www.hkexnews.hk
and our website at
www.foursemi.com on the next day following such lapse. In such an event, all application monies will
be returned, without interest, on the terms set out in “How to Apply for Hong Kong Offer Shares — D.
Despatch/Collection of H Share Certificates and Refund of Application Monies”. In the meantime, all
application monies will be held in separate bank account(s) with the receiving bank or other bank(s) in
Hong Kong licensed under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong).
UNDERWRITING AGREEMENTS
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters under the
terms of the Hong Kong Underwriting Agreement and is subject to, among other conditions, the Overall
Coordinators (for themselves and on behalf of the Underwriters) and us agreeing on the Offer Price on
the Price Determination Date. We expect to enter into the International Underwriting Agreement
relating to the International Offering on the Price Determination Date. Certain terms of the underwriting
arrangements, the Hong Kong Underwriting Agreement and the International Underwriting Agreement,
are summarized in “Underwriting”.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee for the listing of, and permission to deal in, the Offer
Shares being offered under the Global Offering.
ADMISSION OF THE H SHARES INTO CCASS
All necessary arrangements have been made enabling the H Shares to be admitted into CCASS. If
the Stock Exchange grants the listing of, and permission to deal in, the H Shares and our Company
complies with the stock admission requirements of HKSCC, the H Shares will be accepted as eligible
securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of
commencement of dealings in the H Shares on the Stock Exchange or any other date HKSCC chooses.
Settlement of transactions between participants of the Stock Exchange is required to take place in
CCASS on the second settlement day after any trading day. All activities under CCASS are subject to
the General Rules of HKSCC and the HKSCC Operational Procedures in effect from time to time.
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m. in
Hong Kong on Tuesday, March 31, 2026, it is expected that dealings in our H Shares on the Stock
Exchange will commence at 9:00 a.m. on Tuesday, March 31, 2026. The H Shares will be traded in
board lots of 100 H Shares each.
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IMPORTANT NOTICE TO INVESTORS OF HONG KONG OFFER SHARES FULLY
ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public Offering
and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk
under the “HKEXnews > New Listings > New Listing Information” section, and our website at
www.foursemi.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
You can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you are
applying for:
 are 18 years of age or older; and
 have a Hong Kong address (for the White Form eIPO service only).
Unless permitted by the Listing Rules, you cannot apply for any Hong Kong Offer Shares if you
or the person(s) for whose benefit you are applying for:
 are an existing Shareholder or close associates; or
 are a Director, supervisor or any of his/her close associates.
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Monday, March 23, 2026 and
end at 12:00 noon on Thursday, March 26, 2026 (Hong Kong time).
To apply for Hong Kong Offer Shares, you may use one of the following application channels:
Application Channel Platform Target Investors Application Time
White Form eIPO
service
www.eipo.com.hk Investors who would like to
receive a physical H Share
certificate. Hong Kong Offer
Shares successfully applied for
will be allotted and issued in
your own name.
From 9:00 a.m. on Monday, March
23, 2026 to 11:30 a.m. on
Thursday, March 26, 2026, Hong
Kong time. The latest time for
completing full payment of
application monies will be 12:00
noon on Thursday, March 26,
2026, Hong Kong time.
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Application Channel Platform Target Investors Application Time
HKSCC EIPO
channel
Your broker or custodian
who is a HKSCC
Participant will submit
electronic application
instructions on your
behalf through HKSCC’s
FINI system in
accordance with your
instruction.
Investors who would not like to
receive a physical H Share
certificate. Hong Kong Offer
Shares successfully applied for
will be allotted and issued in the
name of HKSCC Nominees,
deposited directly into CCASS
and credited to your designated
HKSCC Participant’s stock
account.
Contact your broker or custodian
for the earliest and latest time
for giving such instructions, as
this may vary by broker or
custodian.
The White Form eIPO service and the HKSCC EIPO channel are facilities subject to capacity
limitations and potential service interruptions and you are advised not to wait until the last day of the
application period to apply for Hong Kong Offer Shares.
For those applying through the White Form eIPO service, once you complete payment in respect
of any application instructions given by you or for your benefit through the White Form eIPO service
to make an application for Hong Kong Offer Shares, an actual application shall be deemed to have been
made. If you are a person for whose benefit the electronic 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 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.
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3. Information Required to Apply
You must provide the following information with your application:
For Individual/Joint Applicants For Corporate Applicants
 Full name(s) 2 as shown on your identity
document
 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
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. You are also required to declare that the identity information provided by you
follows the requirements as described in Note 2 below. In particular, where you cannot provide a HKID number, you must
confirm that you do not hold a HKID card. The number of joint applicants may not exceed four. If you are a firm, the
applicant must be in the individual members’ names.
2. The applicant’s full name as shown on their identity document must be used and the surname, given name, middle and
other names (if any) must be input in the same order as shown on the identity document. If an applicant’s identity
document contains both an English and Chinese name, both English and Chinese names must be used. Otherwise, either
English or Chinese names will be accepted. The order of priority of the applicant’s identity document type must be strictly
followed and where an individual applicant has a valid HKID card (including both Hong Kong Residents and Hong Kong
Permanent Residents), the HKID number must be used when making an application to subscribe for Hong Kong Offer
Shares. Similarly for corporate applicants, a LEI number must be used if an entity has a LEI certificate.
3. If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will be required. If the
applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID of the asset management company or
the individual fund, as appropriate, which has opened a trading account with the broker will be required, as above.
4. The maximum number of joint account holders on FINI is capped at 4
(Note) in accordance with market practice.
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity document), the identity
document’s issuing country or jurisdiction, the identity document type; and (ii), the identity document number, for each of
the beneficial owners or, in the case(s) of joint beneficial owners, for each joint beneficial owner. If you do not include
this information, the application will be treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in securities; and (ii)
you exercise statutory control over that company, then the application will be treated as being for your benefit and you
should provide the required information in your application as stated above
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any other stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which carries no right to
participate beyond a specified amount in a distribution of either profits or capital).
For those applying through HKSCC EIPO channel, and making an application under a power of
attorney, we and the Overall Coordinators, as our agent, have discretion to consider whether to accept it
on any conditions we think fit, including evidence of the attorney’s authority.
Note: Subject to change, if our Articles of Association and applicable company law prescribe a lower cap.
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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 ............. 100 H Shares
Permitted number of Hong
Kong Offer Shares for
application and amount
payable on application/
successful allotment .......
Hong Kong Offer Shares are available for application in specified
board lot sizes only. Please refer to the amount payable
associated with each specified board lot size in the table below.
The maximum Offer Price is HK$50.00 per H Share.
If you are applying through the HKSCC EIPO channel, your
broker or custodian may require you to pre-fund your
application in such amount as determined by the broker or
custodian, based on the applicable laws and regulations in Hong
Kong. You are responsible for complying with any such
pre-funding requirement imposed by your broker or custodian
with respect to the Hong Kong Offer Shares you applied for.
By instructing your broker or custodian to apply for the Hong
Kong Offer Shares on your behalf through the HKSCC EIPO
channel, you (and, if you are joint applicants, each of you jointly
and severally) are deemed to have instructed and authorized
HKSCC to cause HKSCC Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange payment of the final
Offer Price, brokerage, SFC transaction levy, the Stock Exchange
trading fee and the AFRC transaction levy by debiting the
relevant nominee bank account at the Designated Bank for your
broker or custodian.
If you are applying through the White Form eIPO service, you
may refer to the table below for the amount payable for the
number of H Shares you have selected. You must pay the
respective maximum amount payable on application in full upon
application for Hong Kong Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
100 5,050.43 1,500 75,756.38 8,000 404,034.00 90,000 4,545,382.50
200 10,100.86 2,000 101,008.50 9,000 454,538.26 100,000 5,050,425.00
300 15,151.28 2,500 126,260.63 10,000 505,042.50 125,000 6,313,031.26
400 20,201.70 3,000 151,512.76 20,000 1,010,085.00 150,000 7,575,637.50
500 25,252.13 3,500 176,764.88 30,000 1,515,127.50 175,000 8,838,243.76
600 30,302.56 4,000 202,017.00 40,000 2,020,170.00 200,000 10,100,850.00
700 35,352.98 4,500 227,269.13 50,000 2,525,212.50 225,000 11,363,456.26
800 40,403.40 5,000 252,521.26 60,000 3,030,255.00 250,000 12,626,062.50
900 45,453.83 6,000 303,025.50 70,000 3,535,297.50 275,000 13,888,668.76
1,000 50,504.26 7,000 353,529.76 80,000 4,040,340.00 300,000
(1) 15,151,275.00
(1) Maximum number of Hong Kong Offer Shares you may apply for.
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(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC transaction
levy. If your application is successful, brokerage will be paid to the Exchange Participants (as defined in the Listing Rules)
and the SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy are paid to the Stock Exchange
(in the case of the SFC transaction levy, collected by the Stock Exchange on behalf of the SFC; and in the case of the
AFRC transaction levy, collected by the Stock Exchange on behalf of the AFRC).
5. Multiple Applications Prohibited
You or your joint applicant(s) shall not make more than one application for your own benefit,
except where you are a nominee and provide the information of the underlying investor in your
application as required under “—A. Application for Hong Kong Offer Shares—3. Information Required
to Apply”. If you are suspected of submitting or cause to submit more than one application, all of your
applications will be rejected.
Multiple applications made either through (i) the White Form eIPO service, (ii) HKSCC EIPO
channel, or (iii) both channels concurrently are prohibited and will be rejected. If you have made an
application through the White Form eIPO service or HKSCC EIPO channel, you or the person(s) for
whose benefit you have made the application shall not apply further for any Offer Shares in the Global
Offering.
6. Terms and Conditions of an Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or HKSCC EIPO
channel, you (or as the case may be, HKSCC Nominees will do the following things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorize us and/or the Overall
Coordinator, as our agents, to execute any documents for you and to do on your behalf all
things necessary to register any Hong Kong Offer Shares allocated to you in your name or in
the name of HKSCC Nominees as required by the Articles of Association, and (if you are
applying through the HKSCC EIPO channel) to deposit the allotted Hong Kong Offer Shares
directly into CCASS for the credit of your designated HKSCC Participant’s stock account on
your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the White Form eIPO
service (or as the case may be, the agreement you entered into with your broker or
custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong Offer
Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out in this
prospectus and they do not apply to you, or the person(s) for whose benefit you have made
the application;
(v) confirm that you have read this prospectus and any supplement to it and have relied only on
the information and representations contained therein in making your application (or as the
case may be, causing your application to be made) and will not rely on any other
information or representations;
(vi) agree that the Relevant Persons
Note, the H Share Registrar and HKSCC will not be liable for
any information and representations not in this prospectus and any supplement to it;
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(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit you have
made the application to us, the Relevant Persons, the H Share Registrar, HKSCC, HKSCC
Nominees, the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, for the purposes under “—G.
Personal Data—3. Purposes” and “—G. Personal Data—4. Transfer of personal data”;
(viii) agree (without prejudice to any other rights which you may have once your application (or
as the case may be, HKSCC Nominees’ application) has been accepted) that you will not
rescind it because of an innocent misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, any application made by you or HKSCC Nominees on your behalf
cannot be revoked once it is accepted, which will be evidenced by the notification of the
result of the ballot by the H Share Registrar by way of publication of the results at the time
and in the manner as specified in “—B. Publication of Results”;
(x) confirm that you are aware of the situations specified in “—C. Circumstances In Which You
Will Not Be Allocated Hong Kong Offer Shares”;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it and the
resulting contract will be governed by and construed in accordance with the laws of Hong
Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any place
outside Hong Kong that apply to your application and that neither we nor the Relevant
Persons will breach any law inside and/or outside Hong Kong as a result of the acceptance
of your offer to purchase, or any action arising from your rights and obligations under the
terms and conditions contained in this prospectus;
(xiii) 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 H Shares registered in your name or otherwise held by
you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the 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
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(xix) (if you are making the application as an agent for the benefit of another person) warrant that
(1) no other application has been or will be made by you as agent for or for the benefit of
that person or by that person or by any other person as agent for that person by giving
electronic application instructions to HKSCC and 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.
Note: The Relevant Persons would include the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Underwriters, any of their or the Company’s respective directors, supervisors,
officers, employees, partners, agents, advisers and any other parties involved in the Global Offering.
B. PUBLICATION OF RESULTS
Results of Allocation
You 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 ..........
The designated results of allocation at
www.iporesults.com.hk
(alternatively:
www.eipo.com.hk/eIPOAllotment )
with a “search by ID Number”
function.
24 hours, from 11:00 p.m. on
Monday, March 30, 2026 to
12:00 midnight on Sunday,
April 5, 2026
The full list of (i) wholly or partially
successful applicants using the White
Form eIPO service and HKSCC
EIPO channel, and (ii) the number of
Hong Kong Offer Shares conditionally
allotted to them, among other things,
will be displayed on the “Allotment
Results” page of the White Form
eIPO service at
www.iporesults.com.hk
(alternatively:
www.eipo.com.hk/eIPOAllotment ).
The Stock Exchange’s website at
www.hkexnews.hk and our website at
www.foursemi.com which will
provide links to the above mentioned
websites of the H Share Registrar.
No later than 11:00 p.m. on
Monday, March 30, 2026
(Hong Kong time)
Telephone .......... +852 2862 8555—the allocation results
telephone enquiry line provided by the
H Share Registrar
between 9:00 a.m. and 6:00
p.m., on Tuesday, March 31,
2026, Wednesday, April 1,
2026, Thursday, April 2, 2026
and Wednesday, April 8, 2026
(Hong Kong time) on a
business day
For those applying through HKSCC EIPO channel, you may also check with your broker or
custodian from 6:00 p.m. on Friday, March 27, 2026 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on Friday,
March 27, 2026 (Hong Kong time) on a 24-hour basis and should report any discrepancies on
allotments to HKSCC as soon as practicable.
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Allocation Announcement
We expect to announce the results of the final Offer Price, the level of indications of interest in
the International Offering, the level of applications in the Hong Kong Public Offering and the basis of
allocations of Hong Kong Offer Shares on the Stock Exchange’s website at www.hkexnews.hk
and our
website at www.foursemi.com by no later than 11:00 p.m. on Monday, March 30, 2026.
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG OFFER
SHARES
You should note the following situations in which Hong Kong Offer Shares will not be allocated
to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Your application or the application made by HKSCC Nominees on your behalf may be revoked
pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and nominees
have full discretion to reject or accept any application, or to accept only part of any application,
without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not grant
permission to list the H Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that longer
period within three weeks of the closing date of the application lists.
4. If:
 you make multiple applications or suspected multiple applications. You may refer to “—A.
Application for Hong Kong Offer Shares—5. Multiple Applications Prohibited” on what
constitutes multiple applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Overall Coordinators believe that by accepting your application, it or we would
violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted H Shares
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC Participants will
be required to hold sufficient application funds on deposit with their Designated Bank before balloting.
After balloting of Hong Kong Offer Shares, the Receiving Bank will collect the portion of these funds
required to settle each HKSCC Participant’s actual Hong Kong Offer Share allotment from their
Designated Bank.
There is a risk of money settlement failure . In the extreme event of money settlement failure by
a HKSCC Participant (or its Designated Bank), who is acting on your behalf in settling payment for
your allotted shares, HKSCC will contact the defaulting HKSCC Participant and its Designated Bank to
determine the cause of failure and request such defaulting HKSCC Participant to rectify or procure to
rectify the failure.
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However, if it is determined that such settlement obligation cannot be met, the affected Hong
Kong Offer Shares will be reallocated to the International Offering. Hong Kong Offer Shares applied
for by you through the broker or custodian may be affected to the extent of the settlement failure. In
the extreme case, you will not be allocated any Hong Kong Offer Shares due to the money settlement
failure by such HKSCC Participant. None of us, the Relevant Persons, the H Share Registrar and
HKSCC is or will be liable if Hong Kong Offer Shares are not allocated to you due to the money
settlement failure.
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
You will receive one H Share certificate for all Hong Kong Offer Shares allotted to you under the
Hong Kong Public Offering (except pursuant to applications made through the HKSCC EIPO channel
where the H Share certificates will be deposited into CCASS as described below).
No temporary document of title will be issued in respect of the H Shares. No receipt will be
issued for sums paid on application.
H Share certificates will only become valid evidence of title at 8:00 a.m. on Tuesday, March 31,
2026 (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 H Shares prior to
the receipt of H Share certificates or the H Share certificates becoming valid do so entirely at their own
risk.
The right is reserved to retain any H Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
For physical share certificates of
250,000 or more Offer Shares
issued under your own name ..
Collection in person at the H Share Registrar,
Computershare Hong Kong Investor Services Limited
at Shops 1712−1716, 17th Floor, Hopewell Centre, 183
Queen’s Road East, Wan Chai, Hong Kong.
Time: 9:00 a.m. to 1:00 p.m. on Tuesday, March 31, 2026
(Hong Kong time)
If you are an individual, you must not authorize any
other person to collect for you. If you are a corporate
applicant, your authorized representative must bear a
letter of authorization from your corporation stamped
with your corporation’s chop.
Both individuals and authorized representatives must
produce, at the time of collection, evidence of identity
acceptable to the H Share Registrar.
Note: If you do not collect your H Share certificate(s)
personally within the time above, it/they will be sent to
the address specified in your application instructions by
ordinary post at your own risk
For physical share certificates of
less than 250,000 Offer Shares
issued under your own name ..
Your H Share certificate(s) will be sent to the address
specified in your application instructions by ordinary
post at your own risk
Date: Monday, March 30, 2026
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White Form eIPO service HKSCC EIPO channel
Refund mechanism for surplus application monies paid by you
Date ................. Tuesday, March 31, 2026 Subject to the arrangement between
you and your broker or custodian
Responsible party .......... H Share Registrar Your broker or custodian
Application monies paid through
single bank account .......
White Form e-Refund payment instructions to your
designated bank account
Your broker or custodian will
arrange refund to your designated
bank account subject to the
arrangement between you and itApplication monies paid through
multiple bank accounts .....
Refund cheque(s) will be despatched to the address as
specified in your application instructions by ordinary
post at your own risk
Note: Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning and/or an
“extreme conditions” announcement issued after a super typhoon in force in Hong Kong in the morning on Monday,
March 30, 2026 rendering it impossible for the relevant H Share certificates to be dispatched to HKSCC in a timely
manner, the Company shall procure the H Share Registrar to arrange for delivery of the supporting documents and H
Share certificates in accordance with the contingency arrangements as agreed between them. You may refer to “—E.
Severe Weather Arrangements”.
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Thursday, March 26, 2026 if, there is/are:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 an “extreme conditions” announcement issued after a super typhoon (“ Extreme
Conditions ”), (collectively, “ Severe Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, March 26, 2026.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on the next
business day which does not have 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”, an announcement will be made and published on the Stock
Exchange’s website at www.hkexnews.hk
and our website at www.foursemi.com .
If a Severe Weather Signal is hoisted on Monday, March 30, 2026, the H Share Registrar will
make appropriate arrangements for the delivery of the H Share certificates to the CCASS Depository’s
service counter so that they would be available for trading on Tuesday, March 31, 2026.
If a Severe Weather Signal is hoisted on Monday, March 30, 2026, the despatch of physical H
Share certificates of less than 250,000 Offer Shares issued under your own name will be made by
ordinary post when the post office re-opens after the Severe Weather Signal is lowered or canceled (e.g.
in the afternoon of Monday, March 30, 2026 or on Tuesday, March 31, 2026).
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 308 ---
If a Severe Weather Signal is hoisted on Tuesday, March 31, 2026, physical H Share certificates
of 250,000 Offer Shares or more issued under your own name are available for collection in person at
the H Share Registrar’s office after the Severe Weather Signal is lowered or canceled (e.g. in the
afternoon of Tuesday, March 31, 2026 or on Wednesday, April 1, 2026).
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share certificates.
F. ADMISSION OF THE H SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the Stock
Exchange and we comply with the stock admission requirements of HKSCC, the H Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect
from the date of commencement of dealings in the H Shares or any other date HKSCC chooses.
Settlement of transactions between Exchange Participants is required to take place in CCASS on the
second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and the HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into CCASS.
You should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data collected
and held by the Company, the H Share Registrar, the receiving banks and the Relevant Persons about
you in the same way as it applies to personal data about applicants other than HKSCC Nominees. This
personal data may include client identifier(s) and your identification information. By giving application
instructions to HKSCC, you acknowledge that you have read, understood and agree to all of the terms
of the Personal Information Collection Statement below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of, Hong
Kong Offer Shares, of the policies and practices of the Company and the H Share Registrar in relation
to personal data and the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure that
personal data supplied to the Company or its agents and the H Share Registrar is accurate and
up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer Shares into or
out of their names or in procuring the services of the H Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in your application
for Hong Kong Offer Shares being rejected, or in the delay or the inability of the Company or the H
Share Registrar to effect transfers or otherwise render their services. It may also prevent or delay
registration or transfers of Hong Kong Offer Shares which you have successfully applied for and/or the
despatch of H Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the Company
and the H Share Registrar immediately of any inaccuracies in the personal data supplied.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 309 ---
3. Purposes
Your personal data may be used, held, processed, and/or stored (by whatever means) for the
following purposes:
 processing your application and refund cheque and White Form e-Refund payment
instruction(s), where applicable, verification of compliance with the terms and application
procedures set out in this prospectus and announcing results of allocation of Hong Kong
Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the H Shares
including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the H Shares and identifying any
duplicate applications for the H Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the H Shares, such as dividends, rights issues,
bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the H Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and holders
of the H Shares and/or regulators and/or any other purposes to which applicants and holders
of the H Shares may from time to time agree.
4. Transfer of personal data
Personal data held by the Company and the H Share Registrar relating to the applicants for and
holders of Hong Kong Offer Shares will be kept confidential but the Company and the H Share
Registrar may, to the extent necessary for achieving any of the above purposes, disclose, obtain or
transfer (whether within or outside Hong Kong) the personal data to, from or with any of the following:
 the Company’s appointed agents such as financial advisers, receiving banks and overseas
principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the personal
data to the H Share Registrar, in each case for the purposes of providing its services or
facilities or performing its functions in accordance with its rules or procedures and operating
FINI and CCASS (including where applicants for the Hong Kong Offer Shares request a
deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the H Share
Registrar in connection with their respective business operation;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental bodies or
otherwise as required by laws, rules or regulations, including for the purpose of the Stock
Exchange’s administration of the Listing Rules and the SFC’s performance of its statutory
functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have or
propose to have dealings, such as their bankers, solicitors, accountants or brokers, etc.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 310 ---
5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants and holders
of Hong Kong Offer Shares for as long as necessary to fulfill the purposes for which the personal data
were collected. Personal data which is no longer required will be destroyed or dealt with in accordance
with the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether the
Company or the H Share Registrar hold their personal data, to obtain a copy of that data, and to correct
any data that is inaccurate. The Company and the H Share Registrar have the right to charge a
reasonable fee for the processing of such requests. All requests for access to data or correction of data
should be addressed to the Company and the H Share Registrar, at their registered address disclosed in
“Corporate information” or as notified from time to time, for the attention of the company secretary, or
the H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 311 ---
The following is the text of a report received from the Company’ s reporting accountants, Ernst &
Young, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this Document.
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
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ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF SHANGHAI FOURSEMI SEMICONDUCTOR CO., LTD., GUOTAI JUNAN
CAPITAL LIMITED AND ORIENT CAPITAL (HONG KONG) LIMITED
Introduction
We report on the historical financial information of Shanghai FourSemi Semiconductor Co., Ltd..
(the “ Company ”) and its subsidiaries (together, the “ Group ”) set out on pages I-3 to I-76, which
comprises the consolidated statements of profit or loss, statements of comprehensive income, statements
of changes in equity and statements of cash flows of the Group for each of the years ended 31
December 2022, 2023 and 2024, and the ten months ended 31 October 2025 (the “ Relevant Periods ”),
and the consolidated statements of financial position of the Group and the statements of financial
position of the Company as at 31 December 2022, 2023, 2024 and 31 October 2025 and material
accounting policy information and other explanatory information (together, the “ Historical Financial
Information ”). The Historical Financial Information set out on pages I-3 to I-76 forms an integral part
of this report, which has been prepared for inclusion in the prospectus of the Company dated 23 March
2026 (the “ Prospectus ”) in connection with the initial listing of the shares of the Company on the Main
Board of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”).
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of the Historical Financial
Information that gives a true and fair view in accordance with the basis of preparation set out in note
2.1 to the Historical Financial Information, and for such internal control as the directors determine is
necessary to enable the preparation of the Historical Financial Information that is free from material
misstatement, whether due to fraud or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to report
our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment
Circular Reporting Engagements 200 Accountants’ Reports on Historical Financial Information in
Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA”).
This standard requires that we comply with ethical standards and plan and perform our work to obtain
reasonable assurance about whether the Historical Financial Information is free from material
misstatement.
Our work involved performing procedures to obtain evidence about the amounts and disclosures in
the Historical Financial Information. The procedures selected depend on the reporting accountants’
judgement, including the assessment of risks of material misstatement of the Historical Financial
Information, whether due to fraud or error. In making those risk assessments, the reporting accountants
consider internal control relevant to the entity’s preparation of the Historical Financial Information that
gives a true and fair view in accordance with the basis of preparation set out in note 2.1 to the
Historical Financial Information, in order to design procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Our work also included evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 312 ---
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the accountants’
report, a true and fair view of the financial position of the Group and the Company as at 31 December
2022, 2023, 2024 and 31 October 2025 and of the financial performance and cash flows of the Group
for each of the Relevant Periods in accordance with the basis of preparation set out in note 2.1 to the
Historical Financial Information.
Review of interim comparative financial information
We have reviewed the interim comparative financial information of the Group which comprises
the consolidated statement of profit or loss, statement of comprehensive income, statement of changes
in equity and statement of cash flows for the ten months ended 31 October 2024 and other explanatory
information (the “ Interim Comparative Financial Information ”). The directors of the Company are
responsible for the preparation of the Interim Comparative Financial Information in accordance with the
basis of preparation set out in note 2.1 to the Historical Financial Information. Our responsibility is to
express a conclusion on the Interim 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 Interim Comparative
Financial Information, for the purposes of the accountants’ report, is not prepared, in all material
respects, in accordance with the basis of preparation set out in note 2.1 to the Historical Financial
Information.
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-3 have been made.
Dividends
We refer to note 11 to the Historical Financial Information which states that no dividends have
been paid by the Company in respect of the Relevant Periods.
Ernst & Y oung
Certified Public Accountants
Hong Kong
23 March 2026
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 313 ---
I HISTORICAL FINANCIAL INFORMATION
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The financial statements of the Group for the Relevant Periods, on which the Historical Financial
Information is based, were audited by Ernst & Young in accordance with Hong Kong Standards on
Auditing issued by the HKICPA (the “ Underlying Financial Statements ”).
The Historical Financial Information is presented in Renminbi (“ RMB”) and all values are
rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 314 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Notes Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
REVENUE 5 130,327 150,291 355,195 288,832 280,778
Cost of sales
Cost of goods and services ...... (108,830) (142,578) (306,007) (247,502) (223,136)
Impairment losses on inventories ... (12,018) (7,837) (2,632) (2,509) (1,585)
Gross profit ................. 9,479 (124) 46,556 38,821 56,057
Other income and gains .......... 5 10,133 7,973 9,582 6,844 3,798
Selling and marketing expenses ..... (17,405) (18,869) (20,847) (17,500) (16,800)
Administrative expenses .......... (18,279) (20,382) (19,673) (16,434) (32,629)
Research and development costs ..... (48,708) (59,271) (68,060) (55,134) (55,690)
Impairment losses on financial assets,
net ...................... (125) (165) (116) (136) (59)
Other expenses ................ (10) (1) (226) — (1,928)
Finance costs ................. 7 (209) (822) (1,393) (1,129) (2,155)
Changes in the carrying amounts of
redemption liabilities .......... 26 (775) (2,469) (2,667) (2,208) (2,370)
LOSS BEFORE TAX ........... 6 (65,899) (94,130) (56,844) (46,876) (51,776)
Income tax expense ............. 10 ( 3 ) ————
LOSS FOR THE YEAR/PERIOD ... (65,902) (94,130) (56,844) (46,876) (51,776)
Loss attributable to:
Owners of the parent .......... (65,902) (94,130) (56,844) (46,876) (51,776)
LOSS PER SHARE
ATTRIBUTABLE TO ORDINARY
EQUITY HOLDERS OF THE
PARENT
Basic and diluted (RMB) .......... 12 (0.76) (0.94) (0.57) (0.47) (0.52)
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 315 ---
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
LOSS FOR THE YEAR/PERIOD ....... (65,902) (94,130) (56,844) (46,876) (51,776)
OTHER COMPREHENSIVE INCOME
Other comprehensive income that may be
reclassified to profit or loss in subsequent
periods:
Exchange differences on translation of
foreign operations ................ (2,723) (598) (580) (37) 185
OTHER COMPREHENSIVE INCOME
FOR THE YEAR/PERIOD, NET OF
TAX .......................... (2,723) (598) (580) (37) 185
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR/PERIOD .......... (68,625) (94,728) (57,424) (46,913) (51,591)
Attributable to:
Owners of the parent ............... (68,625) (94,728) (57,424) (46,913) (51,591)
For the details of pre-IPO investments, please refer to Note 28 to the Historical Financial
Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 316 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
As at
31 October
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment ................ 13 19,988 18,482 14,768 10,789
Right-of-use assets ...................... 14 3,666 6,201 3,648 1,453
Other intangible assets .................... 413 365 434 553
Prepayments, deposits and other receivables ........ 19 1,102 829 831 139
Non-pledged time deposits ................. 20 51,769 32,220 — —
Pledged time deposits ..................... 20 — 20,577 21,197 —
Total non-current assets ................... 76,938 78,674 40,878 12,934
CURRENT ASSETS
Inventories ........................... 17 65,143 65,517 111,921 129,554
Trade receivables ....................... 18 14,153 30,457 41,901 47,797
Prepayments, deposits and other receivables ........ 19 18,676 20,288 27,448 17,329
Non-pledged time deposits .................. 20 — 21,420 33,204 —
Pledged time deposits ..................... 20 — — — 21,707
Restricted cash ......................... 20 — 5——
Cash and cash equivalents .................. 20 182,899 105,325 66,075 73,463
Total current assets ..................... 280,871 243,012 280,549 289,850
CURRENT LIABILITIES
Trade payables ......................... 21 11,557 16,069 35,462 27,597
Other payables and accruals ................. 22 9,422 10,960 12,704 9,970
Contract liabilities ....................... 23 2,414 4,747 7,761 2,279
Interest-bearing bank borrowings .............. 24 — 36,677 40,030 80,540
Lease liabilities ........................ 14 2,331 2,890 2,559 1,251
Provision ............................ 25 995 2,213 4,460 3,974
Redemption liabilities ..................... 26 30,775 33,244 35,911 38,281
Total current liabilities ................... 57,494 106,800 138,887 163,892
NET CURRENT ASSETS .................. 223,377 136,212 141,662 125,958
TOTAL ASSETS LESS CURRENT LIABILITIES ... 300,315 214,886 182,540 138,892
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings .............. 24 — — 19,696 19,600
Lease liabilities ........................ 14 1,976 3,432 971 60
Deferred income ........................ 27 — — — 2,871
Total non-current liabilities ................ 1,976 3,432 20,667 22,531
Net assets ........................... 298,339 211,454 161,873 116,361
EQUITY
Equity attributable to owners of the parent
Paid-in capital/Share capital ................. 28 26,122 26,122 26,122 100,000
Reserves ............................ 30 272,217 185,332 135,751 16,361
Total equity .......................... 298,339 211,454 161,873 116,361
For the details of pre-IPO investments, please refer to Note 28 to the Historical Financial
Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 317 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Y ear ended 31 December 2022
Attributable to owners of the parent
Paid-in capital
Capital
reserve *
Share -based
payment
reserve *
Exchange
fluctuation
reserve *
Accumulated
deficits * Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 28 Note 30 Note 29 Note 30
As at 1 January 2022 ................... 20,368 320,632 127,539 1,189 (287,267) 182,461
Loss for the year ..................... ———— (65,902) (65,902)
Other comprehensive income for the year:
Exchange differences related to foreign operations ... — — — (2,723) — (2,723)
Total comprehensive income for the year ......... — — — (2,723) (65,902) (68,625)
Share-based payments (note 29) .............. — — 7,824 — — 7,824
Contribution from shareholders .............. 5,754 200,925 — — — 206,679
Recognition of redemption liabilities
(note 26) ........................ — (30,000) — — — (30,000)
As at 31 December 2022 ................. 26,122 491,557 135,363 (1,534) (353,169) 298,339
Y ear ended 31 December 2023
Attributable to owners of the parent
Paid-in capital
Capital
reserve *
Share -based
payment
reserve *
Exchange
fluctuation
reserve *
Accumulated
deficits * Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 28 Note 30 Note 29 Note 30
As at 1 January 2023 ................... 26,122 491,557 135,363 (1,534) (353,169) 298,339
Loss for the year ..................... ———— (94,130) (94,130)
Other comprehensive income for the year:
Exchange differences related to foreign operations ... — — — (598) — (598)
Total comprehensive income for the year ......... — — — (598) (94,130) (94,728)
Share-based payments (note 29) .............. — — 7,843 — — 7,843
As at 31 December 2023 ................. 26,122 491,557 143,206 (2,132) (447,299) 211,454
Y ear ended 31 December 2024
Attributable to owners of the parent
Paid-in capital
Capital
reserve *
Share-based
payment
reserve *
Exchange
fluctuation
reserve *
Accumulated
deficits * Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 28 Note 30 Note 29 Note 30
As at 1 January 2024 ................... 26,122 491,557 143,206 (2,132) (447,299) 211,454
Loss for the year ..................... ———— (56,844) (56,844)
Other comprehensive income for the year:
Exchange differences related to foreign operations ... — — — (580) — (580)
Total comprehensive income for the year ......... — — — (580) (56,844) (57,424)
Share-based payments (note 29) .............. — — 7,843 — — 7,843
As at 31 December 2024 ................. 26,122 491,557 151,049 (2,712) (504,143) 161,873
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 318 ---
Ten months ended 31 October 2024
Attributable to owners of the parent
Paid-in capital Capital reserve
Share-based
payment
reserve
Exchange
fluctuation
reserve
Accumulated
deficits Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 28 Note 30 Note 29 Note 30
As at 1 January 2024 .................. 26,122 491,557 143,206 (2,132) (447,299) 211,454
Loss for the period (unaudited) .............. ———— (46,876) (46,876)
Other comprehensive income for the period (unaudited):
Exchange differences related to foreign operations
(unaudited) ...................... — — — (37) — (37)
Total comprehensive income for the period (unaudited) .. — — — (37) (46,876) (46,913)
Share-based payments (note 29) (unaudited) ........ — — 6,536 — — 6,536
As at 31 October 2024 (unaudited) ........... 26,122 491,557 149,742 (2,169) (494,175) 171,077
Ten months ended 31 October 2025
Attributable to owners of the parent
Paid-in
capital/Share
capital
Capital
reserve *
Share-based
payment
reserve *
Exchange
fluctuation
reserve *
Accumulated
deficits * Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 28 Note 30 Note 29 Note 30
As at 1 January 2025 ................... 26,122 491,557 151,049 (2,712) (504,143) 161,873
Loss for the period .................... ———— (51,776) (51,776)
Other comprehensive income for the period:
Exchange differences related to foreign operations ... — — — 185 — 185
Total comprehensive income for the period ........ — — — 185 (51,776) (51,591)
Share-based payments (note 29) .............. — — 6,079 — — 6,079
Conversion into joint stock company ........... 73,878 (411,418) (122,247) — 459,787 —
As at 31 October 2025 .................. 100,000 80,139 34,881 (2,527) (96,132) 116,361
* These reserve accounts represent the total consolidated reserves of RMB272,217,000, RMB185,332,000, RMB135,751,000
and RMB16,361,000 in the consolidated statements of financial position as at 31 December 2022, 2023, 2024 and 31
October 2025, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 319 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Notes Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
CASH FLOWS USED IN OPERATING
ACTIVITIES
Loss before tax .................. (65,899) (94,130) (56,844) (46,876) (51,776)
Adjustments for:
Depreciation of property, plant and
equipment ................... 6, 13 3,649 5,000 5,669 4,721 4,682
Depreciation of right-of-use assets .... 6, 14 2,514 2,779 2,741 2,287 2,195
Amortisation of other intangible assets . 6 26 48 48 39 60
Share-based payment expenses ....... 6, 29 7,824 7,843 7,843 6,536 6,079
Impairment losses on financial assets,
net ....................... 6, 18 125 165 116 136 59
Impairment losses on inventories ..... 6, 17 12,018 7,837 2,632 2,509 1,585
Finance costs .................. 7 209 822 1,393 1,129 2,155
Bank interest income ............. 5 (2,850) (5,273) (4,044) (3,526) (1,481)
Investment income from structured
deposits .................... 5 (2,524) (79) (2) (2) —
Foreign exchange differences, net ..... 6 (4,699) (1,395) (4,813) (3,105) 1,915
Changes in the carrying amounts of
redemption liabilities ........... 26 775 2,469 2,667 2,208 2,370
(48,832) (73,914) (42,594) (33,944) (32,157)
Increase in inventories .............. (63,310) (8,211) (49,036) (29,993) (19,218)
Increase in trade receivables .......... (12,568) (16,469) (11,560) (13,608) (5,584)
Decrease/(increase) in prepayments,
deposits and other receivables ....... 19,044 (2,384) (7,847) (1,264) 12,909
(Increase)/decrease in restricted cash .... —( 5 )5 5 —
Increase/(decrease) in trade payables .... 5,603 4,512 19,393 22,590 (7,865)
(Decrease)/increase in other payables and
accruals ...................... (7,263) 1,538 1,744 2,540 (3,226)
(Decrease)/increase in contract liabilities .. (66) 2,333 3,014 (654) (5,482)
Increase in deferred income .......... ———— 2 , 8 7 1
Increase/(decrease) in provision ........ 545 1,218 2,247 169 (486)
Cash used in operations ............. (106,847) (91,382) (84,634) (54,159) (58,238)
Interest received .................. 1,040 2,825 1,896 1,692 971
Income tax paid .................. ( 3 ) ————
Net cash flows used in operating
activities ..................... (105,810) (88,557) (82,738) (52,467) (57,267)
APPENDIX I ACCOUNTANTS’ REPORT
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Notes Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
CASH FLOWS (USED IN)/FROM
INVESTING ACTIVITIES
Purchases of items of property, plant and
equipment .................... (15,630) (3,494) (1,955) (1,991) (703)
Purchases of other intangible assets ..... (257) — (117) — (179)
Placement of non-pledged time deposits .. (30,000) — — — —
Withdrawal of non-pledged time deposits . 20,000 — 20,000 20,000 30,000
Placement of pledged deposits ........ — (20,000) — — —
Purchase of structured deposits classified
as financial assets at fair value through
profit or loss .................. (295,000) (25,000) (1,000) (1,000) —
Redemption of structured deposits
classified as financial assets at fair
value through profit or loss ......... 307,538 25,079 1,002 1,002 —
Loans repaid by directors ............ 34 2 , 6 4 6————
Interest received .................. 287 — 1,964 1,964 3,204
Net cash flows (used in)/from investing
activities ..................... (10,416) (23,415) 19,894 19,975 32,322
CASH FLOWS FROM FINANCING
ACTIVITIES
New bank loans .................. — 48,647 69,031 39,030 79,960
Repayment of bank loans ............ — (12,000) (46,000) (31,000) (39,687)
Capital contribution from shareholders ... 206,679 — — — —
Payment of listing expense ........... — — — — (1,605)
Interest paid .................... — (589) (1,188) (940) (1,941)
Lease payments .................. 14 (2,284) (3,502) (3,167) (2,646) (2,292)
Net cash flows from financing activities .. 204,395 32,556 18,676 4,444 34,435
NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIV ALENTS .. 88,169 (79,416) (44,168) (28,048) 9,490
Cash and cash equivalents at beginning of
year/period .................... 92,233 182,899 105,325 105,325 66,075
Effect of foreign exchange rate changes,
net ......................... 2,497 1,842 4,918 2,553 (2,102)
Cash and cash equivalents at end of
year/period ................... 182,899 105,325 66,075 79,830 73,463
ANALYSIS OF BALANCES OF CASH
AND CASH EQUIV ALENTS .......
Cash and bank balances ............. 20 234,668 179,547 120,476 133,917 95,170
Less: Non-pledged time deposits ....... 20 51,769 53,640 33,204 33,000 —
Pledged time deposits .......... 20 — 20,577 21,197 21,087 21,707
Restricted cash .............. 20 —5 — — —
Cash and cash equivalents as stated in the
statements of cash flows and statements
of financial position .............. 182,899 105,325 66,075 79,830 73,463
APPENDIX I ACCOUNTANTS’ REPORT
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STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
As at
31 October
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment ............. 13 19,438 18,204 14,620 10,750
Right-of-use assets ................... 14 2,474 5,865 2,998 1,168
Other intangible assets ................. 413 365 434 553
Investments in subsidiaries ............... 15 509 1,598 5,176 11,573
Prepayments, deposits and other receivables ..... 19 593 700 623 10
Non-pledged time deposits ............... 20 51,769 32,220 — —
Pledged time deposits .................. 20 — 20,577 21,197 —
Total non-current assets ................ 75,196 79,529 45,048 24,054
CURRENT ASSETS
Inventories ........................ 17 41,556 47,937 95,966 118,725
Trade receivables .................... 18 2,918 13,929 23,254 20,153
Prepayments, deposits and other receivables ..... 19 18,084 19,622 26,631 15,008
Due from subsidiaries .................. 34 74,096 142,115 152,462 182,096
Non-pledged time deposits ............... 20 — 21,420 33,204 —
Pledged time deposits .................. 20 — — — 21,707
Restricted cash ...................... 20 — 5——
Cash and cash equivalents ............... 20 176,491 52,536 28,851 37,882
Total current assets .................. 313,145 297,564 360,368 395,571
CURRENT LIABILITIES
Trade payables ...................... 21 8,796 14,496 34,824 27,146
Other payables and accruals .............. 22 9,420 10,242 11,591 9,503
Contract liabilities .................... 23 — 83 1,081 725
Due to subsidiaries ................... 34 1,162 25,931 47,589 64,190
Interest-bearing bank borrowings ........... 24 — 36,677 40,030 80,540
Lease liabilities ..................... 14 1,513 2,794 2,094 984
Provision ......................... 25 81 269 537 599
Redemption liabilities .................. 26 30,775 33,244 35,911 38,281
Total current liabilities ................ 51,747 123,736 173,657 221,968
NET CURRENT ASSETS ............... 261,398 173,828 186,711 173,603
TOTAL ASSETS LESS CURRENT
LIABILITIES ..................... 336,594 253,357 231,759 197,657
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings ........... 24 — — 19,696 19,600
Lease liabilities ..................... 14 1,616 3,162 722 —
Deferred income ..................... 27 — — — 2,871
Total non-current liabilities .............. 1,616 3,162 20,418 22,471
Net assets ........................ 334,978 250,195 211,341 175,186
EQUITY
Paid-in capital/Share capital .............. 28 26,122 26,122 26,122 100,000
Reserves ......................... 30 308,856 224,073 185,219 75,186
Total equity ....................... 334,978 250,195 211,341 175,186
APPENDIX I ACCOUNTANTS’ REPORT
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II NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE AND GROUP INFORMATION
Shanghai FourSemi Semiconductor Co., Ltd. (the “ Company ”), formerly named as Xiamen
FourSemi Semiconductor Co., Ltd., was established in the People’s Republic of China (“ PRC”) with
limited liability on 17 May 2016 and was converted into a joint stock company on 12 June 2025. The
registered office of the Company is located at Room 303, Building 4, Second Street, Gangcheng
Square, No. 88 Yunjuan Road, Lane 11, Lin-gang Special Area, China (Shanghai) Pilot Free Trade Pilot
Zone, PRC.
During the Relevant Periods, the Company and its subsidiaries (collectively, the “ Group ”) were
principally engaged in the design, research and development, and sale of perceptual-intelligence chips
focusing on power amplifier audio and haptic driver.
As at the end of the Relevant Periods, the Company had direct interests in its subsidiaries, all of
which are private limited liability companies. The particulars of the major subsidiaries are set out
below:
Name
Place and date of incorporation/
registration and operations
Nominal value
of issued
ordinary/
registered
share capital
Percentage of
equity
attributable
to the
Company
Direct Principal activities
(’000) %
Fourier Technology Limited
ʮ̡ .....
Hong Kong
18 November 2016
HK$10 100 Sale of integrated circuit chips
Shanghai FourSemi Electronics
Technology Company
LimitedҦ
ʮ̡ ............
PRC/Chinese mainland/
17 June 2016
RMB50 100 Research and development,
design and sale of integrated
circuit chips
Shenzhen FourSemi Electronics
Company Limited ଉέ̹௩
ʮ̡ ......
PRC/Chinese mainland/
20 July 2022
RMB10,000 100 Sale of integrated circuit chips
The English names of group companies registered in the PRC represent the best efforts made by
the management of the Company to translate the Chinese names of these companies as they do not have
official English names.
No audited financial statements have been prepared for these entities for the years ended 31
December 2022, 2023 and 2024 as these entities were not subject to any statutory audit requirements
under the relevant rules and regulations.
2.1 BASIS OF PREPARATION
For ordinary shares issued to certain pre-IPO investors, pursuant to the supplemental agreements
entered into between the Company and such pre-IPO investors in relation to the termination of
redemption rights granted by the Company, which are void ab initio as described in note 28 to this
report, having taking into account the legal and regulatory framework of the Company’s jurisdiction
and the governing law of the supplementary agreements, the directors considered that it is appropriate
to present such pre-IPO investments as equity throughout the Relevant Periods. For the details of
financial impacts, see note 28 to the Historical Financial Information.
The Historical Financial Information has been prepared in accordance with IFRS Accounting
Standards as issued by the International Accounting Standards Board (the “ IASB”), which comprise all
standards and interpretations approved by the IASB. All IFRS Accounting Standards effective for the
APPENDIX I ACCOUNTANTS’ REPORT
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accounting period commencing from 1 January 2025, together with the relevant transitional provisions,
have been early adopted by the Group in the preparation of the Historical Financial Information
throughout the Relevant Periods and in the period covered by the Interim Comparative Financial
Information.
The Historical Financial Information has been prepared under the historical cost convention,
except for certain financial instruments which have been measured at fair value.
Basis of consolidation
The Historical Financial Information includes the financial statements of the Group for the
Relevant Periods and in the period covered by the Interim Comparative Financial Information. A
subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee (i.e.,
existing rights that give the Group the current ability to direct the relevant activities of the investee).
Generally, there is a presumption that a majority of voting rights results in control. When the
Company has, directly or indirectly, less than a majority of the voting or similar rights of an investee,
the Group considers all relevant facts and circumstances in assessing whether it has power over an
investee, including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group’s voting rights and potential voting rights.
The financial statements of the subsidiaries are prepared for the same reporting period as the
Company, using consistent accounting policies. The results of subsidiaries are consolidated from the
date on which the Group obtains control, and continue to be consolidated until the date that such
control ceases.
Profit or loss and each component of other comprehensive income are attributed to the owners of
the parent of the Group and to the non-controlling interests, even if this results in the non-controlling
interests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and
cash flows relating to transactions between members of the Group are eliminated in full on
consolidation.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control described above. A change in the
ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including
goodwill), liabilities, any non-controlling interest and the exchange fluctuation reserve; and recognises
the fair value of any investment retained and any resulting surplus or deficit in profit or loss. The
Group’s share of components previously recognised in other comprehensive income is reclassified to
profit or loss or retained profits, as appropriate, on the same basis as would be required if the Group
had directly disposed of the related assets or liabilities.
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2.2 ISSUED BUT NOT YET EFFECTIVE IFRS ACCOUNTING STANDARDS
The Group has not applied the following new and amended IFRS Accounting Standards, that have
been issued but are not yet effective, in the Historical Financial Information. The Group intends to
apply these new and amended IFRS Accounting Standards, if applicable, when they become effective.
IFRS 18 Presentation and Disclosure in Financial Statements
2
IFRS 19 and its amendments Subsidiaries without Public Accountability: Disclosures 2
Amendments to IFRS 9 and IFRS 7 Amendments to the Classification and
Measurement of Financial Instruments 1
Amendments to IFRS 9 and IFRS 7 Contracts Referencing Nature-dependent Electricity 1
Amendments to IFRS 10 and
IAS 28
Sale or Contribution of Assets between an Investor and
its Associate or Joint V enture 3
Amendments to IAS 21 Translation to a Hyperinflationary Presentation Currency 2
Annual Improvements to IFRS
Accounting Standards—V olume 11
Amendments to IFRS 1, IFRS 7, IFRS 9,
IFRS 10 and IAS 7 1
1 Effective for annual periods beginning on or after 1 January 2026
2 Effective for annual/reporting periods beginning on or after 1 January 2027
3 No mandatory effective date yet determined but available for adoption
The Group is in the process of making an assessment of the impact of these new and amended
IFRS Accounting Standards upon initial application. Further information about those IFRS Accounting
Standards that are expected to be applicable to the Group is described below.
IFRS 18 replaces IAS 1 Presentation of Financial Statements . While a number of sections have
been brought forward from IAS 1 with limited changes, IFRS 18 introduces new requirements for
presentation within the statement of profit or loss, including specified totals and subtotals. Entities are
required to classify all income and expenses within the statement of profit or loss into one of the five
categories: operating, investing, financing, income taxes and discontinued operations and to present two
new defined subtotals. It also requires disclosures about management-defined performance measures in
a single note and introduces enhanced requirements on the grouping (aggregation and disaggregation)
and the location of information in both the primary financial statements and the notes. Some
requirements previously included in IAS 1 are moved to IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors , which is renamed as IAS 8 Basis of Preparation of Financial
Statements . As a consequence of the issuance of IFRS 18, limited, but widely applicable, amendments
are made to IAS 7 Statement of Cash Flows , IAS 33 Earnings per Share and IAS 34 Interim Financial
Reporting . In addition, there are minor consequential amendments to other IFRS Accounting Standards.
IFRS 18 and the consequential amendments to other IFRS Accounting Standards are effective for
annual periods beginning on or after 1 January 2027 with earlier application permitted. Retrospective
application is required. Based on a preliminary assessment, the adoption of IFRS 18 is not expected to
have any impact on the Group’s results of operations and financial position but has impact on the
presentation and disclosure of the Group’s financial statements.
The Group has already commenced an assessment of the impact of other new and amended IFRS
Accounting Standards, which are relevant to the Group’s operations. According to the preliminary
assessment made by the directors, no significant impact on the financial performance and financial
position of the Group is expected when these new and amended IFRS Accounting Standards become
effective.
2.3 MATERIAL ACCOUNTING POLICIES
Fair value measurement
The Group measures its structured deposits at fair value at the end of each reporting period. Fair
value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based
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on the presumption that the transaction to sell the asset or transfer the liability takes place either in the
principal market for the asset or liability, or in the absence of a principal market, in the most
advantageous market for the asset or liability. The principal or the most advantageous market must be
accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that
market participants would use when pricing the asset or liability, assuming that market participants act
in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability
to generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements
are categorised within the fair value hierarchy, described as follows, based on the lowest level input
that is significant to the fair value measurement as a whole:
Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or
liabilities
Level 2 — based on valuation techniques for which the lowest level input that is
significant to the fair value measurement is observable, either directly or
indirectly
Level 3 — based on valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the
Group determines whether transfers have occurred between levels in the hierarchy by reassessing
categorisation (based on the lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for an asset is
required (other than inventories, deferred tax assets and financial assets), the asset’s recoverable amount
is estimated. An asset’s recoverable amount is the higher of the asset’s or cash-generating unit’s value
in use and its fair value less costs of disposal, and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of those from other assets or groups of
assets, in which case the recoverable amount is determined for the cash-generating unit to which the
asset belongs.
In testing a cash-generating unit for impairment, a portion of the carrying amount of a corporate
asset (e.g., a headquarters building) is allocated to an individual cash-generating unit if it can be
allocated on a reasonable and consistent basis or, otherwise, to the smallest group of cash-generating
units.
An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable
amount. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset. An impairment loss is charged to the statement of profit or loss in the
period in which it arises in those expense categories consistent with the function of the impaired asset.
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An assessment is made at the end of each reporting period as to whether there is an indication that
previously recognised impairment losses may no longer exist or may have decreased. If such an
indication exists, the recoverable amount is estimated. A previously recognised impairment loss of an
asset other than goodwill is reversed only if there has been a change in the estimates used to determine
the recoverable amount of that asset, but not to an amount higher than the carrying amount that would
have been determined (net of any depreciation/amortisation) had no impairment loss been recognised
for the asset in prior years. A reversal of such an impairment loss is credited to the statement of profit
or loss in the period in which it arises unless the asset is carried at a revalued amount, in which case
the reversal of the impairment loss is accounted for in accordance with the relevant accounting policy
for that revalued asset.
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the
Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary
or fellow subsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the
third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the
Group or an entity related to the Group; and the sponsoring employers of the
post-employment benefit plan;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of
the key management personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of which it is a part, provides key management
personnel services to the Group or to the parent of the Group.
Property, plant and equipment and depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less
accumulated depreciation and any impairment losses. The cost of an item of property, plant and
equipment comprises its purchase price and any directly attributable costs of bringing the asset to its
working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into operation,
such as repairs and maintenance, is normally charged to the statement of profit or loss in the period in
which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a
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major inspection is capitalised in the carrying amount of the asset as a replacement. Where significant
parts of property, plant and equipment are required to be replaced at intervals, the Group recognises
such parts as individual assets with specific useful lives and depreciates them accordingly.
Depreciation is calculated on the straight-line basis to write off the cost of each item of property,
plant and equipment to its residual value over its estimated useful life. The principal annual rates used
for this purpose are as follows:
Machinery 19%
Office equipment and electronic devices 32%
Leasehold improvements 33%
Vehicles 24%
Where parts of an item of property, plant and equipment have different useful lives, the cost of
that item is allocated on a reasonable basis among the parts and each part is depreciated separately.
Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at
least at each financial year end.
An item of property, plant and equipment including any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss on disposal or retirement recognised in the statement of profit or loss in the year the
asset is derecognised is the difference between the net sales proceeds and the carrying amount of the
relevant asset.
Construction in progress is stated at cost less any impairment losses, and is not depreciated. It is
reclassified to the appropriate category of property, plant and equipment when completed and ready for
use.
Intangible assets (other than goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The useful lives
of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are
subsequently amortised over the useful economic life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting
period.
Software
Purchased software is stated at cost less any impairment losses and is amortised on the
straight-line basis over its estimated useful life of 10 years, which is mainly determined by reference to
the licensed period of the purchased software.
Research and development costs
All research costs are charged to the statement of profit or loss as incurred.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is,
or contains, a lease if the contract conveys the right to control the use of an identified asset for a period
of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for
short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease
payments and right-of-use assets representing the right to use the underlying assets.
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(a) Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (that is the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less accumulated
depreciation and any impairment losses, and adjusted for any remeasurement of lease liabilities. The
cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease terms
and the estimated useful lives of the assets as follows:
Buildings 3 to 6 years
If ownership of the leased asset transfers to the Group by the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of
the asset.
(b) Lease liabilities
Lease liabilities are recognised at the commencement date of the lease at the present value of
lease payments to be made over the lease term. The lease payments include fixed payments (including
in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend
on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably certain to be exercised by the
Group and payments of penalties for termination of a lease, if the lease term reflects the Group
exercising the option to terminate the lease. The variable lease payments that do not depend on an
index or a rate are recognised as an expense in the period in which the event or condition that triggers
the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate
at the lease commencement date because the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the lease term, a change in lease
payments (e.g., a change to future lease payments resulting from a change in an index or rate) or a
change in assessment of an option to purchase the underlying asset.
(c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of plant and
properties and electronic devices (that is those leases that have a lease term of 12 months or less from
the commencement date and do not contain a purchase option). It also applies the recognition
exemption for leases of low-value assets to leases of electronic devices and office equipment that are
considered to be of low value.
Lease payments on short-term leases and leases of low-value assets are recognised as an expense
on a straight-line basis over the lease term.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost,
fair value through other comprehensive income, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics and the Group’s business model for managing them. With the
exception of trade receivables that do not contain a significant financing component or for which the
Group has applied the practical expedient of not adjusting the effect of a significant financing
APPENDIX I ACCOUNTANTS’ REPORT
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component, the Group initially measures a financial asset at its fair value plus in the case of a financial
asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a
significant financing component or for which the Group has applied the practical expedient are
measured at the transaction price determined under IFRS 15 in accordance with the policies set out for
“Revenue recognition” below.
In order for a financial asset to be classified and measured at amortised cost or fair value through
other comprehensive income, it needs to give rise to cash flows that are solely payments of principal
and interest (“ SPPI”) on the principal amount outstanding. Financial assets with cash flows that are not
SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages its financial
assets in order to generate cash flows. The business model determines whether cash flows will result
from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified
and measured at amortised cost are held within a business model with the objective to hold financial
assets in order to collect contractual cash flows, while financial assets classified and measured at fair
value through other comprehensive income are held within a business model with the objective of both
holding to collect contractual cash flows and selling. Financial assets which are not held within the
aforementioned business models are classified and measured at fair value through profit or loss.
Purchases or sales of financial assets that require delivery of assets within the period generally
established by regulation or convention in the marketplace are recognised on the trade date, that is, the
date that the Group commits to purchase or sell the asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest method
and are subject to impairment. Gains and losses are recognised in the statement of profit or loss when
the asset is derecognised, modified or impaired.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial
position at fair value with net changes in fair value recognised in the statement of profit or loss.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement of
financial position) when:
 the rights to receive cash flows from the asset have expired; or
 the Group has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under
a “pass-through” arrangement; and either (a) the Group has transferred substantially all the
risks and rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of
ownership of the asset. When it has neither transferred nor retained substantially all the risks and
rewards of the asset nor transferred control of the asset, the Group continues to recognise the
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transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also
recognises an associated liability. The transferred asset and the associated liability are measured on a
basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured
at the lower of the original carrying amount of the asset and the maximum amount of consideration that
the Group could be required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (“ ECLs”) for all debt instruments
not held at fair value through profit or loss. ECLs are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate. The expected cash flows will
include cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
General approach
ECLs are recognised in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12 months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of the exposure, irrespective of
the timing of the default (a lifetime ECL).
At the end of each reporting period, the Group assesses whether the credit risk on a financial
instrument has increased significantly since initial recognition. When making the assessment, the Group
compares the risk of a default occurring on the financial instrument as at the reporting date with the
risk of a default occurring on the financial instrument as at the date of initial recognition and considers
reasonable and supportable information that is available without undue cost or effort, including
historical and forward-looking information. The Group considers that there has been a significant
increase in credit risk when contractual payments are more than 30 days past due.
The Group considers a financial asset in default when contractual payments are 90 days past due.
However, in certain cases, the Group may also consider a financial asset to be in default when internal
or external information indicates that the Group is unlikely to receive the outstanding contractual
amounts in full before taking into account any credit enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of recovering the
contractual cash flows.
Financial assets at amortised cost are subject to impairment under the general approach and they
are classified within the following stages for measurement of ECLs except for trade receivables which
apply the simplified approach as detailed below.
Stage 1 — Financial instruments for which credit risk has not increased significantly
since initial recognition and for which the loss allowance is measured at an
amount equal to 12-month ECLs
Stage 2 — Financial instruments for which credit risk has increased significantly since
initial recognition but that are not credit-impaired financial assets and for
which the loss allowance is measured at an amount equal to lifetime ECLs
Stage 3 — Financial assets that are credit-impaired at the reporting date (but that are
not purchased or originated credit-impaired) and for which the loss
allowance is measured at an amount equal to lifetime ECLs
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Simplified approach
For trade receivables that do not contain a significant financing component or when the Group
applies the practical expedient of not adjusting the effect of a significant financing component, the
Group applies the simplified approach in calculating ECLs. Under the simplified approach, the Group
does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at
each reporting date. The Group has established a provision matrix that is based on its historical credit
loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment.
Classification as equity and financial liabilities
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 financial liability and equity
instrument.
A financial liability is any liability that is (a) a contractual obligation (i) to deliver cash or another
financial asset to another entity; or (ii) to exchange financial assets or financial liabilities with another
entity under conditions that are potentially unfavourable to the entity; or (b) a contract that will or may
be settled in the entity’s own equity instruments and is: (i) a non derivative for which the entity is or
may be obliged to deliver a variable number of the entity’s own equity instruments; or (ii) a derivative
that will or may be settled other than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of the entity’s own equity instruments.
An equity instrument is any contract that evidences a residual interest in the assets of an entity
after deducting all of its liabilities.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as payables, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of payables, net of
directly attributable transaction costs.
The Group’s financial liabilities include trade payables, other payables and accruals, redemption
liabilities and interest-bearing bank borrowings.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at amortised cost (trade and other payables and borrowings)
After initial recognition, financial liabilities are subsequently measured at amortised cost, using
the effective interest rate method unless the effect of discounting would be immaterial, in which case
they are stated at cost. Gains and losses are recognised in the statement of profit or loss when the
liabilities are derecognised as well as through the effective interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the effective interest rate. The effective interest rate
amortisation is included in finance costs in the statement of profit or loss.
Redemption liabilities
A contract that contains an obligation to purchase the Group’s equity instruments for cash or
another financial asset gives rise to a financial liability for the redemption amount, even if the Group’s
obligations to purchase is conditional on the counterparty exercising a right to redeem. The redemption
APPENDIX I ACCOUNTANTS’ REPORT
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liability is initially measured at the carrying amount of the redemption amount and subsequently
measured at amortised cost with interest expense being included in change in the carrying amounts of
redemption liabilities.
The redemption liabilities were classified as current liabilities as certain redemption events could
occur anytime. The carrying amount of the redemption liabilities will be reclassified to equity upon a
termination of the counterparty’s redemption right.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled, or expires.
When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and a recognition of a new liability,
and the difference between the respective carrying amounts is recognised in the statement of profit or
loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement
of financial position if there is a currently enforceable legal right to offset the recognised amounts and
there is an intention to settle on a net basis, or to realise the assets and settle the liabilities
simultaneously.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the
weighted average basis and, in the case of work in progress and finished goods, mainly comprises
direct materials and processing expenditures. Net realisable value is based on estimated selling prices
less any estimated costs to be incurred to completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash on hand and at
banks, and short- term highly liquid deposits with a maturity of generally within three months that are
readily convertible into known amounts of cash, subject to an insignificant risk of changes in value and
held for the purpose of meeting short-term cash commitments.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise
cash on hand and at banks, and short-term deposits as defined above, less bank overdrafts which are
repayable on demand and form an integral part of the Group’s cash management.
Provisions
A provision is recognised when a present obligation (legal or constructive) has arisen as a result
of a past event and it is probable that a future outflow of resources will be required to settle the
obligation, provided that a reliable estimate can be made of the amount of the obligation.
When the effect of discounting is material, the amount recognised for a provision is the present
value at the end of the reporting period of the future expenditures expected to be required to settle the
obligation. The increase in the discounted present value amount arising from the passage of time is
included in finance costs in the statement of profit or loss.
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The Group provides for warranties in relation to the sale of certain products for general repairs of
defects occurring during the warranty period. Provisions for these assurance-type warranties granted by
the Group are initially recognised based on sales volume and past experience of the level of repairs and
returns, discounted to their present values as appropriate. The warranty-related cost is revised annually.
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognised outside
profit or loss is recognised outside profit or loss, either in other comprehensive income or directly in
equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period, taking into consideration interpretations and
practices prevailing in the countries in which the Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of the
reporting period between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
 when the deferred tax liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss and does not give
rise to equal taxable and deductible temporary differences; and
 in respect of taxable temporary differences associated with investments in subsidiaries, when
the timing of the reversal of the temporary differences can be controlled and it is probable
that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, and the carryforward
of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it
is probable that taxable profit will be available against which the deductible temporary differences, and
the carryforward of unused tax credits and unused tax losses can be utilised, except:
 when the deferred tax asset relating to the deductible temporary differences arises from the
initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss and does not give rise to equal taxable and deductible temporary differences; and
 in respect of deductible temporary differences associated with investments in subsidiaries,
deferred tax assets are only recognised to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against
which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the
end of each reporting period and are recognised to the extent that it has become probable that sufficient
taxable profit will be available to allow all or part of the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted by the end of the reporting period.
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Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally
enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and
deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities which intend either to settle current tax liabilities and assets
on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in
which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the
grant will be received and all attaching conditions will be complied with. When the grant relates to an
expense item, it is recognised as income on a systematic basis over the periods that the costs, for which
it is intended to compensate, are expensed.
Where the grant relates to an asset, the fair value is credited to a deferred income account and is
released to the statement of profit or loss over the expected useful life of the relevant asset by equal
annual instalments or deducted from the carrying amount of the asset and released to the statement of
profit or loss by way of a reduced depreciation charge.
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of goods or services is
transferred to the customers at an amount that reflects the consideration to which the Group expects to
be entitled in exchange for those goods or services.
When the consideration in a contract includes a variable amount, the amount of consideration is
estimated to which the Group will be entitled in exchange for transferring the goods to the customer.
The variable consideration is estimated at contract inception and constrained until it is highly probable
that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when
the associated uncertainty with the variable consideration is subsequently resolved.
There are no significant variable consideration and financing component for the Group’s revenue
from contracts with customers.
Revenue from the sale of power amplifier audio chips and other chip products
The Group provides low-power audio chips, Mid/high-power audio chips and haptic drivers as
well as power management chips. Revenue from the sale of products is recognised at the point in time
when control of the products is transferred to the customer, generally on delivery to the specific
locations in accordance with the contracts, the risks of obsolescence and loss have been transferred to
the customer, and when the customer confirmed the acceptance of the products.
Other income
Interest income is recognised on an accrual basis using the effective interest method by applying
the rate that exactly discounts the estimated future cash receipts over the expected life of the financial
instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.
Contract liabilities
A contract liability is recognised when a payment is received or a payment is due (whichever is
earlier) from a customer before the Group transfers the related goods. Contract liabilities are recognised
as revenue when the Group performs under the contract (i.e., transfers control of the related goods to
the customer).
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Share-based payments
The Company operates a restricted stock scheme. Employees (including directors) of the Group
receive remuneration in the form of share-based payments, whereby employees render services in
exchange for equity instruments (“ equity-settled transactions ”). The cost of equity-settled transactions
with employees is measured by reference to the fair value at the date at which they are granted. The
fair value of the restricted stock is determined by an external valuer using back-solve method and
adopting the equity allocation model taking into the recent capital injection price. Further details of
which are given in note 29 to the Historical Financial Information.
The cost of equity-settled transactions is recognised in employee benefit expense, together with a
corresponding increase in equity, over the period in which the performance and/or service conditions
are fulfilled. The cumulative expense recognised for equity-settled transactions at the end of each
reporting period until the vesting date reflects the extent to which the vesting period has expired and
the Group’s best estimate of the number of equity instruments that will ultimately vest. The charge or
credit to the statement of profit or loss for a period represents the movement in the cumulative expense
recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the
grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the
Group’s best estimate of the number of equity instruments that will ultimately vest. Market performance
conditions are reflected within the grant date fair value. Any other conditions attached to an award, but
without an associated service requirement, are considered to be non-vesting conditions. Non-vesting
conditions are reflected in the fair value of an award and lead to an immediate expensing of an award
unless there are also service and/or performance conditions.
For awards that do not ultimately vest because non-market performance and/or service conditions
have not been met, no expense is recognised. Where awards include a market or non-vesting condition,
the transactions are treated as vesting irrespective of whether the market or non-vesting condition is
satisfied, provided that all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised
as if the terms had not been modified, if the original terms of the award are met. In addition, an
expense is recognised for any modification that increases the total fair value of the share-based
payments, or is otherwise beneficial to the employee as measured at the date of modification. Where an
equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and
expense not yet recognised for the award is recognised immediately.
Other employee benefits
Pension schemes
The Group operates a defined contribution Mandatory Provident Fund retirement benefit scheme
(the “ MPF Scheme ”) under the Mandatory Provident Fund Schemes Ordinance for certain of its
employees. Contributions are made based on a percentage of the employees’ basic salaries and are
charged to the statement of profit or loss as they become payable in accordance with the rules of the
MPF Scheme. The assets of the MPF Scheme are held separately from those of the Group in an
independently administered fund. The Group’s employer contributions vest fully with the employees
when contributed into the MPF Scheme.
The employees of the Company and the subsidiaries which operate in Chinese mainland are
required to participate in a central pension scheme operated by the local municipal government. These
subsidiaries are required to contribute a certain percentage of their payroll costs to the central pension
scheme. The contributions are charged to the statement of profit or loss as they become payable in
accordance with the rules of the central pension scheme.
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Housing fund and other social insurances
The Group has participated in defined social security contribution schemes for its employees
pursuant to the relevant laws and regulations of the PRC. These include housing fund, basic medical
insurance, unemployment insurance, injury insurance and maternity insurance. The Group makes
monthly contributions to the housing fund and other social insurances. The contributions are charged to
profit or loss on an accrual basis. The Group’s liability in respect of these funds are limited to the
contributions payable in each reporting period.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or
sale, are capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases
when the assets are substantially ready for their intended use or sale. All other borrowing costs are
expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs
that an entity incurs in connection with the borrowing of funds.
Dividends
Final dividends are recognised as a liability when they are approved by the shareholders in a
general meeting.
Foreign currencies
The Historical Financial Information is presented in RMB, which is the Company’s functional
currency. Each entity in the Group determines its own functional currency and items included in the
financial statements of each entity are measured using that functional currency. Foreign currency
transactions recorded by the entities in the Group are initially recorded using their respective functional
currency rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in
foreign currencies are translated at the functional currency rates of exchange ruling at the end of the
reporting period. Differences arising on settlement or translation of monetary items are recognised in
the statement of profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates at the dates of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rates at the date when the
fair value was measured. The gain or loss arising on translation of a non-monetary item measured at
fair value is treated in line with the recognition of the gain or loss on change in fair value of the item
(i.e., translation difference on the item whose fair value gain or loss is recognised in other
comprehensive income or profit or loss is also recognised in other comprehensive income or profit or
loss, respectively).
In determining the exchange rate on initial recognition of the related asset, expense or income on
the derecognition of a non-monetary asset or non-monetary liability relating to an advance
consideration, the date of initial transaction is the date on which the Group initially recognises the
non-monetary asset or non-monetary liability arising from the advance consideration. If there are
multiple payments or receipts in advance, the Group determines the transaction date for each payment
or receipt of the advance consideration.
The functional currency of the oversea subsidiary is USD rather than RMB. As at the end of the
reporting period, the assets and liabilities of such entity are translated into RMB at the exchange rate
prevailing at the end of the reporting period and its statement of profit or loss is translated into RMB at
the exchange rates that approximate to those prevailing at the dates of the transactions.
APPENDIX I ACCOUNTANTS’ REPORT
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The resulting exchange differences are recognised in other comprehensive income and
accumulated in the exchange fluctuation reserve, except to the extent that the differences are
attributable to non-controlling interests. On disposal of a foreign operation, the cumulative amount in
the reserve relating to that particular foreign operation is recognised in the statement of profit or loss.
For the purpose of the consolidated statement of cash flows, the cash flows of the overseas
subsidiary is translated into RMB at the exchange rates ruling at the dates of the cash flows. Frequently
recurring cash flows of the overseas subsidiary which arise throughout the year are translated into RMB
the weighted at average exchange rate for the year.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s Historical Financial Information requires management to make
judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets
and liabilities, and their accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes that could require a
material adjustment to the carrying amounts of the assets or liabilities affected in the future.
Judgements
In the process of applying the Group’s accounting policies, management has made the following
judgements, apart from those involving estimations, which have the most significant effect on the
amounts recognised in the Historical Financial Information:
Deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that
taxable profit will be available against which the losses can be utilised. Significant management
judgement is required to determine the amount of deferred tax assets that can be recognised, based upon
the likely timing and the level of future taxable profits, together with future tax planning strategies.
The Group has accumulated tax losses carried forward of RMB218,172,000, RMB351,149,000,
RMB450,376,000 and RMB540,404,000 in aggregate as at 31 December 2022, 2023, 2024 and 31
October 2025, respectively. These losses related to subsidiaries that have a history of losses, have not
expired, and may not be used to offset taxable income elsewhere in the Group. On this basis, the Group
has determined that it cannot recognise deferred tax assets on the tax losses carried forward.
If the Group had been able to recognise all unrecognised deferred tax assets, the profit and equity
would have increased by RMB13,187,000, RMB20,515,000, RMB15,096,000 and RMB13,137,000 for
the years ended 31 December 2022, 2023, 2024 and the ten months ended 31 October 2025,
respectively. Further details on deferred taxes are disclosed in note 16 to the Historical Financial
Information.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the
end of the reporting period, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year, are described below.
Provision for expected credit losses on trade receivables
The Group uses a provision matrix to calculate ECLs for trade receivables. The provision rates are
based on ageing of trade receivables for groupings of various customer segments that have similar loss
patterns (i.e., by geography, product type, customer type and rating, and coverage by letters of credit
and other forms of credit insurance).
APPENDIX I ACCOUNTANTS’ REPORT
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The provision matrix is initially based on the Group’s historical observed default rates. The Group
will calibrate the matrix to adjust the historical credit loss experience with forward-looking information.
For instance, if forecast economic conditions (i.e., gross domestic product) are expected to deteriorate
over the next year which can lead to an increased number of defaults, the historical default rates are
adjusted. At each reporting date, the historical observed default rates are updated and changes in the
forward-looking estimates are analysed.
The assessment of the correlation among historical observed default rates, forecast economic
conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in
circumstances and forecast economic conditions. The Group’s historical credit loss experience and
forecast of economic conditions may also not be representative of a customer’s actual default in the
future. The information about the ECLs on the Group’s trade receivables is disclosed in note 18 to the
Historical Financial Information.
Impairment of non-financial assets (other than goodwill)
The Group assesses whether there are any indicators of impairment for all non-financial assets
(including the right-of-use assets) at the end of each reporting period. Indefinite life intangible assets
are tested for impairment annually and at other times when such an indicator exists. Other non-financial
assets are tested for impairment when there are indicators that the carrying amounts may not be
recoverable. An impairment exists when the carrying value of an asset or a cash-generating unit exceeds
its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.
The calculation of the fair value less costs of disposal is based on available data from binding sales
transactions in an arm’s length transaction of similar assets or observable market prices less incremental
costs for disposing of the asset. When value in use calculations are undertaken, management must
estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable
discount rate in order to calculate the present value of those cash flows.
Share-based payments
The Group operates a restricted stock scheme for the purpose of providing incentives to the
Group’s employees (including directors). The grant date fair value of the restricted stock is determined
by an external valuer using back-solve method and adopting the equity allocation model taking into the
recent capital injection price. Further details are contained in note 29 to the Historical Financial
Information.
Provision of inventories
The Group’s inventories are stated at the lower of cost and net realisable value. The Group’s
provision for its inventories based on estimates of the realisable value with reference to the ageing and
conditions of the inventories, together with the economic circumstances on the marketability of such
inventories. Inventories will be reviewed quarterly for provision, if appropriate. Further details of the
inventories are set out in note 17 to the Historical Financial Information.
4. OPERATING SEGMENT INFORMATION
Operating segment information
The board of directors reviews the consolidated results of the Group when making decisions about
resource allocation and assessing the performance of the Group. The board of directors considers that
the Group operates in one business segment and the measurement of segment results is based on the
profit from operations as presented in the consolidated statements of profit or loss and the consolidated
statements of comprehensive income.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 339 ---
Geographical information
(a) Revenue from external customers
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
PRC (including Hong Kong) ............ 130,327 150,291 355,195 288,832 280,778
The revenue information above is based on the locations of the customers.
(b) Non-current assets
Almost all of the Group’s non-current assets were located in Chinese mainland.
Information about major customers
External customers from which the revenue individually amounted to over 10% of total revenue of
the Group for the years ended 31 December 2022, 2023, 2024 and the ten months ended 31 October
2025 were as follows:
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Customer D ....................... 14,984 21,369 107,685 88,503 85,586
Customer E ....................... * 17,274 67,442 46,425 40,245
Customer G ...................... * * 66,342 57,502 *
Customer A ....................... 42,552 35,618 * * *
Customer F ....................... * 23,341 * * *
Customer B ....................... 29,726 20,655 * * *
Customer C ....................... 2 5 , 9 2 4 ****
Customer H ....................... **** 7 2,594
* Less than 10% of the Group’s revenue
5. REVENUE, OTHER INCOME AND GAINS
An analysis of revenue is as follows:
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue from contracts with customers ..... 130,327 150,291 355,195 288,832 280,778
APPENDIX I ACCOUNTANTS’ REPORT
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Revenue from contracts with customers
(a) Disaggregated revenue information
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Types of goods or services
Low-power audio chips ............... 126,370 140,645 322,908 260,760 255,455
Mid/high-power audio chips ............ 3,957 8,662 26,707 23,612 20,596
Haptic drivers ..................... — 984 5,332 4,277 3,702
Others .......................... — — 248 183 1,025
Total ........................... 130,327 150,291 355,195 288,832 280,778
Timing of revenue recognition
Transferred at a point in time ........... 130,327 150,291 355,195 288,832 280,778
The following table shows the amounts of revenue recognised in the Relevant Periods and in the
period covered by the Interim Comparative Financial Information that were included in the contract
liabilities at the beginning of each of the Relevant Periods and recognised from performance obligations
satisfied in previous periods:
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue recognised that was included in
contract liabilities at the beginning of the
reporting period .................. 2,480 2,414 4,747 4,747 7,761
(b) Performance obligations
Information about the Group’s performance obligations is summarised below:
Sales of power amplifier audio chips and other chip products
The Group offers low-power audio chips, Mid/high-power audio chips, as well as other chip
products, including power management chips. The performance obligation is satisfied upon delivery to
the agreed-upon locations in accordance with the contracts, and when the customers confirmed the
acceptance of the products. The Payment is normally received in advance, except for certain customers
with established creditworthiness and a long-standing business relationship, where payment is generally
due within 30 to 90 days from the invoice date.
All amounts of transaction prices allocated to the performance obligations of sales of goods or
services are expected to be recognised as revenue within one year. The Group has no significant
unsatisfied performance obligations arising from revenue contracts that have an original expected
duration more than one year, thus management applied practical expedient under IFRS 15 and is not
disclosing the aggregate amount of the transaction prices allocated to the performance obligations that
are unsatisfied or partially satisfied at the end of each reporting period.
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 341 ---
An analysis of other income and gains is as follows:
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Other income
Government grants .................. 51 1,201 723 211 2,280
Bank interest income ................. 2,850 5,273 4,044 3,526 1,481
Investment income from structured deposits .. 2,524 79 2 2 —
Others .......................... 92 5——3 7
Total other income .................. 5,434 6,578 4,769 3,739 3,798
Gains
Foreign exchange differences, net ........ 4,699 1,395 4,813 3,105 —
Total other income and gains ........... 10,133 7,973 9,582 6,844 3,798
6. LOSS BEFORE TAX
The Group’s loss before tax is arrived at after charging/(crediting):
Notes Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Cost of goods and services* ....... 108,830 142,578 306,007 247,502 223,136
Depreciation of property, plant and
equipment ................. 13 3,649 5,000 5,669 4,721 4,682
Depreciation of right-of-use assets .. 14 2,514 2,779 2,741 2,287 2,195
Amortisation of other intangible
assets .................... 26 48 48 39 60
Research and development costs* ... 48,708 59,271 68,060 55,134 55,690
Listing expenses .............. ———— 1 2,529
Foreign exchange differences, net ... 5 (4,699) (1,395) (4,813) (3,105) 1,915
Investment income from structured
deposits .................. 5 (2,524) (79) (2) (2) —
Bank interest income ........... 5 (2,850) (5,273) (4,044) (3,526) (1,481)
Impairment losses on financial assets,
net ..................... 18 125 165 116 136 59
Impairment losses on inventories ... 17 12,018 7,837 2,632 2,509 1,585
Expenses relating to short-term leases
and low-value assets .......... 14 123 406 149 130 202
Employee benefit expense (including
directors’ and chief executive’s
remuneration (note 8) ):
Wages, salaries and other
allowances ............... 41,066 47,900 58,320 48,665 49,169
Pension scheme contributions and
social welfare ............. 6,082 9,000 9,971 8,414 9,951
Share-based payments ........... 29 7,824 7,843 7,843 6,536 6,079
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 342 ---
* The depreciation of property, plant and equipment, the depreciation of right-of-use assets and the amortisation of other
intangible assets related to manufacturing and research and development for the Relevant Periods and in the period covered
by the Interim Comparative Financial Information are included in “Depreciation of property, plant and equipment”,
“Depreciation of right-of-use assets” and “Amortisation of other intangible assets”, respectively. The labour costs related to
the manufacture and research and development for the Relevant Periods and in the period covered by the Interim
Comparative Financial Information are included in “Employee benefit expense”.
7. FINANCE COSTS
An analysis of finance costs is as follows:
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on interest-bearing bank borrowings . — 619 1,206 966 2,082
Interest on lease liabilities ............. 209 203 187 163 73
Total ........................... 209 822 1,393 1,129 2,155
8. DIRECTORS’ AND CHIEF EXECUTIVE’S REMUNERATION
The remuneration paid or payable to the directors and chief executive of the Company during the
Relevant Periods and in the period covered by the Interim Comparative Financial Information is as
follows:
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Fees ............................ —————
Other emoluments:
Salaries, allowances and benefits in kind .. 3,326 2,924 2,569 2,150 2,694
Performance related bonuses* ......... 259 321 1,638 1,366 469
Share-based payments ............... 1,468 1,468 1,468 1,223 1,223
Pension scheme contributions and social
welfare ....................... 174 171 168 141 142
Subtotal ......................... 5,227 4,884 5,843 4,880 4,528
Total fees and other emoluments ......... 5,227 4,884 5,843 4,880 4,528
* Certain directors of the Company are entitled to bonus payments which are associated with the operating results of the
Group.
During the Relevant Periods and in the period covered by the Interim Comparative Financial
Information, certain directors were granted restricted shares, in respect of their services to the Group,
under the employee stock ownership plan of the Company, further details of which are set out in note
29 to the Historical Financial Information. The difference between the fair value of the shares granted
and the subscription price was recorded in the share-based payment reserve within equity with the
corresponding “share-based payment expenses” in profit or loss over the vesting period. The amounts
during the Relevant Periods and in the period covered by the Interim Comparative Financial
Information are included in the above directors’ and chief executive’s remuneration disclosures.
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 343 ---
The remuneration of each of the directors of the Company paid/payable by the Group (including
emoluments for services as employees of the group entities prior to becoming the directors of the
Company) for the Relevant Periods and in the period covered by the Interim Comparative Financial
Information is set out as follows:
Fees
Salaries,
allowances and
benefits in kind
Performance
Related bonuses
Share-based
payments
Pension scheme
contributions
and social
welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2022
Directors:
Mr. Liu Baoliang ........... — 842 26 6 47 921
Mr. Qian Shun ............ — 897 81 702 47 1,727
Mrs. Yu Bingbing .......... — 743 110 760 33 1,646
Mr. Sang Feng ............ ——————
Mr. Lin Enfeng ............ ——————
Mr. Liu Changjiang ......... ——————
Mr. Yin Yanfeng ........... ——————
Mr. He Shiying ............ ——————
Subtotal ................. — 2,482 217 1,468 127 4,294
Chief executive:
Mr. Xu Xiaolin ............ — 844 42 — 47 933
Total ................... — 3,326 259 1,468 174 5,227
Fees
Salaries,
allowances and
benefits in kind
Performance
Related bonuses
Share-based
payments
Pension scheme
contributions
and social
welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2023
Directors:
Mr. Liu Baoliang ........... — 709 56 6 46 817
Mr. Qian Shun ............ — 863 51 702 46 1,662
Mrs. Yu Bingbing .......... — 642 133 760 33 1,568
Mr. Sang Feng ............ ——————
Mr. Lin Enfeng ............ ——————
Mr. Liu Changjiang ......... ——————
Mr. Yin Yanfeng ........... ——————
Mr. He Shiying ............ ——————
Subtotal ................. — 2,214 240 1,468 125 4,047
Chief executive:
Mr. Xu Xiaolin ............ — 710 81 — 46 837
Total ................... — 2,924 321 1,468 171 4,884
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 344 ---
Fees
Salaries,
allowances and
benefits in kind
Performance
Related bonuses
Share-based
payments
Pension scheme
contributions
and social
welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2024
Directors:
Mr. Liu Baoliang ........... — 640 278 6 45 969
Mr. Qian Shun ............ — 781 219 702 45 1,747
Mrs. Yu Bingbing .......... — 571 719 760 33 2,083
Mr. Sang Feng ............ ——————
Mr. Lin Enfeng ............ ——————
Mr. Liu Changjiang ......... ——————
Mr. Yin Yanfeng ........... ——————
Mr. He Shiying ............ ——————
Subtotal ................. — 1,992 1,216 1,468 123 4,799
Chief executive:
Mr. Xu Xiaolin ............ — 577 422 — 45 1,044
Total ................... — 2,569 1,638 1,468 168 5,843
Fees
Salaries,
allowances and
benefits in kind
Performance
Related bonuses
Share-based
payments
Pension scheme
contributions
and social
welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Ten months ended 31 October
2024
Directors:
Mr. Liu Baoliang ........... — 535 232 5 38 810
Mr. Qian Shun ............ — 653 183 585 38 1,459
Mrs. Yu Bingbing .......... — 477 599 633 27 1,736
Mr. Sang Feng ............ ——————
Mr. Lin Enfeng ............ ——————
Mr. Liu Changjiang ......... ——————
Mr. Yin Yanfeng ........... ——————
Mr. He Shiying ............ ——————
Subtotal ................. — 1,665 1,014 1,223 103 4,005
Chief executive:
Mr. Xu Xiaolin ............ — 485 352 — 38 875
Total ................... — 2,150 1,365 1,223 141 4,880
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 345 ---
Fees
Salaries,
allowances and
benefits in kind
Performance
Related bonuses
Share-based
payments
Pension scheme
contributions
and social
welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Ten months ended 31 October
2025
Directors:
Mr. Liu Baoliang ........... — 608 — 5 38 651
Mr. Qian Shun ............ — 760 — 585 38 1,383
Mrs. Yu Bingbing .......... — 679 469 633 28 1,809
Mr. Sang Feng ............ ——————
Mr. Lin Enfeng ............ ——————
Mr. Liu Changjiang ......... ——————
Mr. Yin Yanfeng ........... ——————
Mr. He Shiying ............ ——————
Mr. Chen Binglin .......... ——————
Mr. Liu Hongcan ........... ——————
Ms. Liu Liping ............ ——————
Mr. Dai Xueguang .......... ——————
Subtotal ................. — 2,047 469 1,223 104 3,843
Chief executive:
Mr. Xu Xiaolin ............ — 647 — — 38 685
Total ................... — 2,694 469 1,223 142 4,528
Mr. Xu Xiaolin was appointed as the chief executive on 10 May 2016.
Mr. Liu Baoliang was appointed as a director on 11 January 2018.
Mr. Qian Shun was appointed as a director on 10 May 2021.
Mrs. Yu Bingbing was appointed as a director on 29 December 2021.
Mr. He Shiying was appointed as a director on 10 May 2021 and resigned from the position of a
director with effect from 30 May 2025.
Mr. Lin Enfeng was appointed as a director on 11 January 2018.
Mr. Sang Feng was appointed as a director on 29 December 2021 and resigned from the position
of a director with effect from 30 May 2025.
Mr. Liu Changjiang was appointed as a director on 11 January 2018 and resigned from the
position of a director with effect from 30 May 2025.
Mr. Yin Yanfeng was appointed as a director on 18 January 2021 and resigned from the position
of a director with effect from 30 May 2025.
Mr. Chen Binglin was appointed as a director on 30 May 2025.
Mr. Liu Hongcan was appointed as a director on 30 May 2025.
Ms. Liu Liping was appointed as a director on 30 May 2025.
Mr. Dai Xueguang was appointed as a director on 30 May 2025.
There was no arrangement under which a director or the chief executive waived or agreed to
waive any remuneration during the Relevant Periods and in the period covered by the Interim
Comparative Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 346 ---
9. FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees during the years ended 31 December 2022, 2023, 2024 and the
ten months ended 31 October 2024 and 2025 included 2 directors, details of whose remuneration are set
out in note 8 above. Details of the remuneration for the remaining 3 highest paid employees who are
neither a director nor chief executive of the Company during the Relevant Periods and in the period
covered by the Interim Comparative Financial Information are as follows:
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, allowances and benefits in kind .... 2,466 2,050 1,991 1,660 2,470
Performance related bonuses ............ 256 175 553 461 —
Share-based payments ................ 1,145 1,341 1,341 1,117 721
Pension scheme contributions and social
welfare ........................ 141 251 258 215 197
Total ........................... 4,008 3,817 4,143 3,453 3,388
The numbers of non-director and non-chief executive highest paid employees whose remuneration
fell within the following bands are as follows:
Number of employees
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
(unaudited)
HK$1,000,001 to HK$1,500,000 ......... 13133
HK$1,500,001 to HK$2,000,000 ......... 2— 2——
Total ........................... 33333
During the Relevant Periods and in the period covered by the Interim Comparative Financial
Information, restricted shares were granted to a non-director and non-chief executive highest paid
employee in respect of his services to the Group, further details of which are included in the disclosures
in note 29 to the Historical Financial Information. The fair value of such restricted shares, which has
been recognised in the statement of profit or loss over the vesting period, was determined as at the date
of grant and the amounts included in the Historical Financial Information for the Relevant Periods are
included in the above non-director and non-chief executive highest paid employees’ remuneration
disclosures.
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 347 ---
10. INCOME TAX
The Group is subject to income tax on an entity basis on profits arising in or derived from the
countries/jurisdictions in which members of the Group are domiciled and/or operate.
Chinese mainland
The subsidiaries established in Chinese mainland are subject to tax at the statutory rate of 25% on
the taxable profits determined in accordance with the PRC Corporate Income Tax Law which became
effective on 1 January 2008, except for these subject to tax preferential set out below:
Shanghai FourSemi Semiconductor Co., Ltd. obtained its “High and New Technology Enterprise”
qualification on 14 December 2022. The Company is currently in the process of renewing its “High and
New Technology Enterprise” qualification. Based on management’s assessment, the Company meets the
qualifying criteria, so it was entitled to the preferential tax rate of 15% during the Relevant Periods.
Certain subsidiary met the criteria as small-scaled and minimal profit enterprise with its annual
taxable income less than RMB3,000,000, its actual income amount subject to tax was calculated at 25%
of its annual taxable income. The aforesaid calculated taxable income of this subsidiary was entitled to
a reduced corporate income tax rate of 20% for the period from 1 January 2022 and expiring on 31
December 2027.
Hong Kong
The subsidiary incorporated in Hong Kong is subject to Hong Kong profits tax at the rate of
8.25% for taxable income not exceeding HKD2,000,000, and 16.5% for taxable income exceeding
HK$2,000,000 on any estimated assessable profits arising in Hong Kong during the Relevant Periods
and in the period covered by the Interim Comparative Financial Information. No provision for Hong
Kong profits tax has been made as the Group had no assessable profits derived from or earned in Hong
Kong during the Relevant Periods and in the period covered by the Interim Comparative Financial
Information.
Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the
jurisdictions in which the Group operates.
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current income tax .................. 3————
Deferred tax expense (note 16) .......... —————
Total tax expense for the year/period ...... 3————
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 348 ---
A reconciliation of the tax expense applicable to loss before tax at the statutory rates for the
jurisdiction in which the Company and its subsidiaries are domiciled and/or operate to the tax expense
at the effective tax rate, is as follows:
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Loss before tax .................... (65,899) (94,130) (56,844) (46,876) (51,776)
Tax at the statutory tax rates of each entities’
jurisdictions ..................... (16,158) (23,426) (13,858) (11,601) (12,662)
Effect of preferential tax rates ........... 6,040 9,246 5,899 5,077 5,455
Expenses not deductible for tax (a) ....... 1,918 2,105 1,935 1,617 1,636
Additional deductible allowance for qualified
research and development costs (b) ...... (4,958) (7,600) (8,617) (6,954) (7,107)
Deductible temporary differences not
recognised ...................... 2,261 497 680 307 115
Deductible temporary differences utilised
from previous years ................ (26) (840) (455) (359) (459)
Tax losses not recognised .............. 10,926 20,018 14,416 11,913 13,022
Tax expense at the Group’s effective tax rate . 3————
(a) Tax effect of non-deductible expenses mainly represent the changes in the carrying amounts of redemption liabilities,
share-based payments expenses and certain other costs and expenses, which all are not deductible in accordance with
relevant tax regulations in the PRC.
(b) Additional deductible allowance was for qualified research and development costs. According to the relevant laws and
regulations promulgated by the State Taxation Administration of the PRC, enterprises engaging in research and
development activities are entitled to claim 175% of their research and development costs so incurred as tax deductible
expenses when determining their assessable profits for the year ended 31 December 2021 and the nine months ended 30
September 2022. According to the relevant laws and regulations, for the period from 1 October 2022, the aforementioned
deduction rate increased to 200%.
11. DIVIDENDS
No dividends have been paid or declared by the Company during the Relevant Periods and in the
period covered by the Interim Comparative Financial Information.
12. LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE
PARENT
The basic loss per share is calculated by dividing the loss attributable to ordinary equity holders
of the Company by the weighted average number of ordinary shares outstanding during the Relevant
Periods and in the period covered by the Interim Comparative Financial Information. The weighted
average number of ordinary shares in issue was determined assuming that the paid-in capital had been
fully converted into share capital at the same conversion ratio of 1:3.83 as upon the Company’s
transformation into a joint-stock company on 12 June 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 349 ---
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Loss
Loss for the year/period attributable to
ordinary equity shareholders of the
Company ....................... (65,902) (94,130) (56,844) (46,876) (51,776)
Shares
Issued ordinary shares at 1 January ....... 77,970,039 100,000,000 100,000,000 100,000,000 100,000,000
Effect of ordinary shares of contribution from
shareholders ..................... 8 , 7 0 6 , 0 8 4————
Weighted average number of ordinary shares . 86,676,123 100,000,000 100,000,000 100,000,000 100,000,000
Loss per share
Basic and diluted (RMB) .............. (0.76) (0.94) (0.57) (0.47) (0.52)
No adjustment has been made to the basic loss per share amounts presented for the Relevant
Periods and in the period covered by the Interim Comparative Financial Information as the impact of
the potential ordinary shares had an anti-dilutive effect on the basic loss per share amounts presented.
For the details of pre-IPO investments, please refer to Note 28 to the Historical Financial
Information.
13. PROPERTY, PLANT AND EQUIPMENT
The Group
Machinery
Office
equipment and
electronic
devices
Leasehold
improvements Vehicles
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022:
Cost .................. 7,725 467 897 551 — 9,640
Accumulated depreciation ..... (851) (148) (308) (22) — (1,329)
Net carrying amount ......... 6,874 319 589 529 — 8,311
At 1 January 2022, net of
accumulated depreciation ...... 6,874 319 589 529 — 8,311
Additions ............... — 257 — — 15,069 15,326
Transfer ................ 13,383 — 212 — (13,595) —
Depreciation provided during the
year ................. (2,987) (162) (369) (131) — (3,649)
At 31 December 2022, net of
accumulated depreciation ...... 17,270 414 432 398 1,474 19,988
At 31 December 2022:
Cost .................. 21,108 724 1,023 551 1,474 24,880
Accumulated depreciation ..... (3,838) (310) (591) (153) — (4,892)
Net carrying amount ......... 17,270 414 432 398 1,474 19,988
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 350 ---
Machinery
Office
equipment and
electronic
devices
Leasehold
improvements Vehicles
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023:
Cost .................. 21,108 724 1,023 551 1,474 24,880
Accumulated depreciation ..... (3,838) (310) (591) (153) — (4,892)
Net carrying amount ......... 17,270 414 432 398 1,474 19,988
At 1 January 2023, net of
accumulated depreciation ...... 17,270 414 432 398 1,474 19,988
Additions ............... — 368 — — 3,126 3,494
Transfer ................ 4,144 — 456 — (4,600) —
Depreciation provided during the
year ................. (4,179) (254) (437) (130) — (5,000)
At 31 December 2023, net of
accumulated depreciation ...... 17,235 528 451 268 — 18,482
At 31 December 2023:
Cost .................. 25,252 1,092 864 551 — 27,759
Accumulated depreciation ..... (8,017) (564) (413) (283) — (9,277)
Net carrying amount ......... 17,235 528 451 268 — 18,482
Machinery
Office
equipment and
electronic
devices
Leasehold
improvements Vehicles
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024:
Cost .................. 25,252 1,092 864 551 — 27,759
Accumulated depreciation ..... (8,017) (564) (413) (283) — (9,277)
Net carrying amount ......... 17,235 528 451 268 — 18,482
At 1 January 2024, net of
accumulated depreciation ...... 17,235 528 451 268 — 18,482
Additions ............... — 34 — — 1,921 1,955
Transfer ................ 1,757 — 74 — (1,831) —
Depreciation provided during the
year ................. (4,979) (264) (296) (130) — (5,669)
At 31 December 2024, net of
accumulated depreciation ...... 14,013 298 229 138 90 14,768
At 31 December 2024:
Cost .................. 27,009 1,126 938 551 90 29,714
Accumulated depreciation ..... (12,996) (828) (709) (413) — (14,946)
Net carrying amount ......... 14,013 298 229 138 90 14,768
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 351 ---
Machinery
Office
equipment and
electronic
devices
Leasehold
improvements Vehicles
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 October 2025
At 1 January 2025:
Cost .................. 27,009 1,126 938 551 90 29,714
Accumulated depreciation ..... (12,996) (828) (709) (413) — (14,946)
Net carrying amount ......... 14,013 298 229 138 90 14,768
At 1 January 2025, net of
accumulated depreciation ...... 14,013 298 229 138 90 14,768
Additions ............... — 96 — — 607 703
Transfer ................ 577 — — — (577) —
Depreciation provided during
the period ............. (4,241) (166) (166) (109) — (4,682)
At 31 October 2025, net of
accumulated depreciation ...... 10,349 228 63 29 120 10,789
At 31 October 2025:
Cost .................. 27,586 1,222 938 551 120 30,417
Accumulated depreciation ..... (17,237) (994) (875) (522) — (19,628)
Net carrying amount ......... 10,349 228 63 29 120 10,789
The Company
Machinery
Office
equipment and
electronic
devices
Leasehold
improvements
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022:
Cost .............. 7,506 467 282 — 8,255
Accumulated depreciation .. (646) (148) (39) — (833)
Net carrying amount ..... 6,860 319 243 — 7,422
At 1 January 2022, net of
accumulated depreciation .. 6,860 319 243 — 7,422
Additions ........... — 257 — 15,069 15,326
Transfer ............ 13,383 — 212 (13,595) —
Depreciation provided
during the year ....... (2,984) (162) (164) — (3,310)
At 31 December 2022, net of
accumulated depreciation .. 17,259 414 291 1,474 19,438
At 31 December 2022:
Cost .............. 20,889 724 408 1,474 23,495
Accumulated depreciation .. (3,630) (310) (117) — (4,057)
Net carrying amount ..... 17,259 414 291 1,474 19,438
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 352 ---
Machinery
Office
equipment and
electronic
devices
Leasehold
improvements
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023:
Cost .............. 20,889 724 408 1,474 23,495
Accumulated depreciation .. (3,630) (310) (117) — (4,057)
Net carrying amount ..... 17,259 414 291 1,474 19,438
At 1 January 2023, net of
accumulated depreciation .. 17,259 414 291 1,474 19,438
Additions ........... — 368 — 3,126 3,494
Transfer ............ 4,144 — 456 (4,600) —
Depreciation provided
during the year ....... (4,178) (254) (296) — (4,728)
At 31 December 2023, net of
accumulated depreciation .. 17,225 528 451 — 18,204
At 31 December 2023:
Cost .............. 25,033 1,092 864 — 26,989
Accumulated depreciation .. (7,808) (564) (413) — (8,785)
Net carrying amount ..... 17,225 528 451 — 18,204
Machinery
Office
equipment and
electronic
devices
Leasehold
improvements
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024:
Cost .............. 25,033 1,092 864 — 26,989
Accumulated depreciation .. (7,808) (564) (413) — (8,785)
Net carrying amount ..... 17,225 528 451 — 18,204
At 1 January 2024, net of
accumulated depreciation .. 17,225 528 451 — 18,204
Additions ........... — 34 — 1,921 1,955
Transfer ............ 1,757 — 74 (1,831) —
Depreciation provided
during the year ....... (4,979) (264) (296) — (5,539)
At 31 December 2024, net of
accumulated depreciation .. 14,003 298 229 90 14,620
At 31 December 2024:
Cost .............. 26,790 1,126 938 90 28,944
Accumulated depreciation .. (12,787) (828) (709) — (14,324)
Net carrying amount ..... 14,003 298 229 90 14,620
APPENDIX I ACCOUNTANTS’ REPORT
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Machinery
Office
equipment and
electronic
devices
Leasehold
improvements
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 October 2025
At 1 January 2025:
Cost .............. 26,790 1,126 938 90 28,944
Accumulated depreciation .. (12,787) (828) (709) — (14,324)
Net carrying amount ..... 14,003 298 229 90 14,620
At 1 January 2025, net of
accumulated depreciation .. 14,003 298 229 90 14,620
Additions ........... — 96 — 607 703
Transfer ............ 577 — — (577) —
Depreciation provided
during the period ...... (4,241) (166) (166) — (4,573)
At 31 October 2025, net of
accumulated depreciation .. 10,339 228 63 120 10,750
At 31 October 2025:
Cost .............. 27,367 1,222 938 120 29,647
Accumulated depreciation .. (17,028) (994) (875) — (18,897)
Net carrying amount ..... 10,339 228 63 120 10,750
14. LEASES
The Group as a lessee
The Group has lease contracts for various items of buildings used in its operations. Leases of
buildings generally have lease terms between 3 and 6 years. Generally, the Group is restricted from
assigning and subleasing the leased assets outside the Group. Other rental agreements generally have
lease terms of 12 months or less or are individually of low value.
APPENDIX I ACCOUNTANTS’ REPORT
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(a) Right-of-use assets
The carrying amounts of the Group’s right-of-use assets and the movements during the Relevant
Periods are as follows:
The Group
Buildings
RMB’000
As at 1 January 2022 .............................................. 5,993
Additions ..................................................... 187
Depreciation charge .............................................. (2,514)
As at 31 December 2022 and 1 January 2023 ............................. 3,666
Additions ..................................................... 5,314
Depreciation charge .............................................. (2,779)
As at 31 December 2023 and 1 January 2024 ............................. 6,201
Additions ..................................................... 188
Depreciation charge .............................................. (2,741)
As at 31 December 2024 and 1 January 2025 ............................ 3,648
Depreciation charge .............................................. (2,195)
As at 31 October 2025 ............................................. 1,453
The Company
Buildings
RMB’000
As at 1 January 2022 .............................................. 3,444
Additions ..................................................... 187
Depreciation charge .............................................. (1,157)
As at 31 December 2022 and 1 January 2023 ............................. 2,474
Additions ..................................................... 5,314
Depreciation charge .............................................. (1,923)
As at 31 December 2023 and 1 January 2024 ............................. 5,865
Additions ..................................................... 188
Depreciation charge .............................................. (2,503)
Decrease arising from lease term termination ........................... (552)
As at 31 December 2024 and 1 January 2025 ............................. 2,998
Depreciation charge .............................................. (1,830)
As at 31 October 2025 ............................................. 1,168
APPENDIX I ACCOUNTANTS’ REPORT
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(b) Lease liabilities
The carrying amounts of lease liabilities (not included those under interest-bearing bank
borrowings) and the movements during the Relevant Periods are as follows:
The Group
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of the
year/period .................... 6,195 4,307 6,322 3,530
New leases ...................... 187 5,314 188 —
Accretion of interest recognised during
the year/period ................. 209 203 187 73
Payments ....................... (2,284) (3,502) (3,167) (2,292)
Carrying amount at the end of the
year/period .................... 4,307 6,322 3,530 1,311
Analysed into:
Current portion ................. 2,331 2,890 2,559 1,251
Non-current portion .............. 1,976 3,432 971 60
The Company
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of the
year/period .................... 3,567 3,129 5,956 2,816
New leases ...................... 187 5,314 188 —
Accretion of interest recognised during
the year/period ................. 135 179 164 54
Decrease arising from lease term
termination .................... — — (604) —
Payments ....................... (760) (2,666) (2,888) (1,886)
Carrying amount at the end of
the year/period ................. 3,129 5,956 2,816 984
Analysed into:
Current portion ................. 1,513 2,794 2,094 984
Non-current portion .............. 1,616 3,162 722 —
The maturity analysis of lease liabilities is disclosed in note 37 to the Historical Financial
Information.
APPENDIX I ACCOUNTANTS’ REPORT
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(c) The amounts recognised in profit or loss in relation to leases are as follows:
The Group
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on lease liabilities ............. 209 203 187 163 73
Depreciation charge of right-of-use assets ... 2,514 2,779 2,741 2,287 2,195
Expenses relating to short-term leases and
low-value assets .................. 123 406 149 130 202
Total amount recognised in profit or loss .... 2,846 3,388 3,077 2,580 2,470
The Company
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on lease liabilities ............. 135 179 164 145 54
Depreciation charge of right-of-use assets ... 1,157 1,923 2,503 2,120 1,830
Expenses relating to short-term leases and
low-value assets .................. 100 196 88 73 193
Gain on a lease term termination ......... — — (52) — —
Total amount recognised in profit or loss .... 1,392 2,298 2,703 2,338 2,077
15. INVESTMENTS IN SUBSIDIARIES
The Company
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Investments in subsidiaries .......... 509 1,598 5,176 11,573
The Company’s outstanding balances with the subsidiaries are disclosed in note 34 to the
Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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16. DEFERRED TAX
The Group
The movements in deferred tax assets and liabilities during the Relevant Periods are as follows:
Deferred tax assets
Losses available
for offsetting
against future
taxable profits Lease liabilities Total
RMB’000 RMB’000 RMB’000
At 1 January 2022 .................... — 1,112 1,112
Deferred tax credited/(charged) to profit or
loss during the year .................. 9 (489) (480)
Gross deferred tax assets at
31 December 2022 .................. 9 623 632
Deferred tax credited/(charged) to profit or
loss during the year .................. (9) 312 303
Gross deferred tax assets at
31 December 2023 .................. — 935 935
Deferred tax credited/(charged) to profit or
loss during the year .................. 29 (452) (423)
Gross deferred tax assets at
31 December 2024 .................. 29 483 512
Deferred tax charged to profit or loss during
the period ......................... (5) (299) (304)
Gross deferred tax assets at 31 October 2025 . 24 184 208
Deferred tax liabilities
Right-of-use assets
RMB’000
At 1 January 2022 ................................................ 1,112
Deferred tax credited to profit or loss during the year ....................... (480)
Gross deferred tax liabilities at 31 December 2022 ......................... 632
Deferred tax charged to profit or loss during the year ....................... 303
Gross deferred tax liabilities at 31 December 2023 ......................... 935
Deferred tax credited to profit or loss during the year ....................... (423)
Gross deferred tax liabilities at 31 December 2024 ......................... 512
Deferred tax credited to profit or loss during the period ..................... (304)
Gross deferred tax liabilities at 31 October 2025 .......................... 208
APPENDIX I ACCOUNTANTS’ REPORT
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For presentation purposes, certain deferred tax assets and liabilities have been offset in the
statement of financial position. The following is an analysis of the deferred tax balances of the Group
for financial reporting purposes:
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets recognised in
the consolidated statement of
financial position ................ ————
Net deferred tax liabilities recognised in
the consolidated statement of
financial position ................ ————
Deferred tax assets have not been recognised in respect of the following items:
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Tax losses ...................... 218,172 351,149 450,376 540,404
Deductible temporary differences ...... 18,707 16,434 17,843 15,462
Total .......................... 236,879 367,583 468,219 555,866
The Group had accumulated tax losses arising in Chinese mainland of RMB190,734,000,
RMB322,060,000, RMB418,221,000 and RMB506,111,000 as at 31 December 2022, 2023, 2024 and 31
October 2025, respectively, that would expire in one to ten years for offsetting against future taxable
profits. The Group had accumulated tax losses in Hong Kong of RMB27,438,000, RMB29,089,000,
RMB32,155,000 and RMB34,293,000 in aggregate as at 31 December 2022, 2023, 2024 and 31 October
2025, respectively, which can be carried forward indefinitely to offset against future taxable profits of
the entity in which the losses were incurred. Deferred tax assets have not been recognised with respect
to tax losses and deductible temporary differences for the Company and certain subsidiaries as it is not
considered probable that taxable profits will be available against which the tax losses can be utilised.
17. INVENTORIES
The Group
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials ................... 19,701 14,631 19,726 40,352
Work in progress ................. 6,908 33,528 65,846 64,297
Finished goods ................... 51,564 27,335 34,241 32,135
78,173 75,494 119,813 136,784
Less: Provision for inventories ....... (13,030) (9,977) (7,892) (7,230)
Total .......................... 65,143 65,517 111,921 129,554
As at 31 December 2022, 2023, 2024 and 31 October 2025, inventories were stated at the lower of
cost and net realisable value.
APPENDIX I ACCOUNTANTS’ REPORT
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The movements in provision
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of
the year/period ................. 3,372 13,030 9,977 7,892
Impairment losses recognised, net ..... 12,018 7,837 2,632 1,585
Amounts written off ............... (2,360) (10,890) (4,717) (2,247)
Carrying amount at the end of the
year/period .................... 13,030 9,977 7,892 7,230
The Company
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials ................... 17,021 11,783 17,753 35,717
Work in progress ................. 5,592 30,681 64,620 60,471
Finished goods ................... 28,505 13,469 20,377 26,961
51,118 55,933 102,750 123,149
Less: Provision for inventories ....... (9,562) (7,996) (6,784) (4,424)
Total .......................... 41,556 47,937 95,966 118,725
As at 31 December 2022, 2023, 2024 and 31 October 2025, inventories were stated at the lower of
cost and net realisable value.
The movements in provision
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of
the year/period ................. 2,328 9,562 7,996 6,784
Impairment/(reversal of impairment)
losses, net ..................... 8,359 5,016 2,658 (549)
Amounts written off ............... (1,125) (6,582) (3,870) (1,811)
Carrying amount at the end of
the year/period ................. 9,562 7,996 6,784 4,424
APPENDIX I ACCOUNTANTS’ REPORT
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18. TRADE RECEIV ABLES
The Group
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables ................. 14,296 30,765 42,325 48,280
Less: Impairment losses ............ (143) (308) (424) (483)
Net carrying amount ............... 14,153 30,457 41,901 47,797
The Group provides credit terms to certain customers with satisfied creditworthiness and
long-term relationship. The credit period is generally around 30 to 90 days. Each customer has a
maximum credit limit. The Group seeks to maintain strict control over its outstanding receivables and
has a credit control department to minimise credit risk. Overdue balances are reviewed regularly by
senior management. As at 31 December 2022, 2023, 2024 and 31 October 2025, the Group had certain
concentrations of credit risk as 46%, 37%, 52%, 61% and 100%, 100%, 100%, 98% of the Group’s
trade receivables were due from the Group’s largest debtor and five largest debtors, respectively. The
Group does not hold any collateral or other credit enhancements over its trade receivable balances.
Trade receivables are non-interest-bearing. As with other customers, the Group normally demands
payment in advance.
An ageing analysis of the Group’s trade receivables, based on the past due information and net of
loss allowance, as at the end of each of the Relevant Periods is as follows:
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months .................. 12,521 30,457 41,901 47,607
3 to 6 months .................... 1,632 — — 190
Total .......................... 14,153 30,457 41,901 47,797
The movements in the impairment of trade receivables are as follows:
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period .......... 18 143 308 424
Impairment losses on financial assets,
net ......................... 125 165 116 59
At end of year/period .............. 143 308 424 483
The Group applies the simplified approach in calculating ECLs for trade receivables. Trade
receivables relating to customers not sharing similar credit risk with others are assessed individually for
impairment allowance, for instance, customers with known financial difficulties or significant doubt on
collection. The remaining trade receivables are grouped and collectively assessed for impairment
allowance. Under the collective approach, an impairment analysis is performed at each reporting date
using a provision matrix to measure expected credit losses. The provision rates are based on ageing
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 361 ---
analysis for grouping of customers that have similar loss patterns. The calculation reflects the age of
the balances, existence of disputes, recent historical payment patterns, any other available information
concerning the creditworthiness of counterparties and influence from macro economy.
Set out below is the information about the credit risk exposure on the Group’s trade receivables
using a provision matrix:
Within 3 months 3 to 6 months Total
As at 31 December 2022
On a collective basis:
Expected credit loss rate ................ 1% 1% 1%
Gross carrying amount (RMB’000) ......... 12,648 1,648 14,296
Expected credit losses (RMB’000) ......... 127 16 143
Within 3 months 3 to 6 months Total
As at 31 December 2023
On a collective basis:
Expected credit loss rate ................ 1% — 1%
Gross carrying amount (RMB’000) ......... 30,765 — 30,765
Expected credit losses (RMB’000) ......... 308 — 308
Within 3 months 3 to 6 months Total
As at 31 December 2024
On collective basis:
Expected credit loss rate ................ 1% — 1%
Gross carrying amount (RMB’000) ......... 42,325 — 42,325
Expected credit losses (RMB’000) ......... 424 — 424
Within 3 months 3 to 6 months Total
As at 31 October 2025
On collective basis:
Expected credit loss rate ................ 1% 1% 1%
Gross carrying amount (RMB’000) ......... 48,088 192 48,280
Expected credit losses (RMB’000) ......... 481 2 483
The Company
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables ................. 2,947 14,070 23,489 20,357
Less: Impairment losses ............ (29) (141) (235) (204)
Total .......................... 2,918 13,929 23,254 20,153
APPENDIX I ACCOUNTANTS’ REPORT
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An ageing analysis of the Company’s trade receivables, based on the past due information and net
of loss allowance, as at the end of each of the Relevant Periods is as follows:
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months .................. 1,286 13,929 23,254 19,963
3 to 6 months .................... 1,632 — — 190
Total .......................... 2,918 13,929 23,254 20,153
The movements in the loss allowance for impairment of trade receivables are as follows:
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period .......... — 29 141 235
Impairment/(reversal of impairment)
losses, net .................... 29 112 94 (31)
At end of year/period .............. 29 141 235 204
Set out below is the information about the Interest rate risk exposure on the Company’s trade
receivables using a provision matrix:
Within 3 months 3 to 6 months Total
As at 31 December 2022
On a collective basis:
Expected credit loss rate ................ 1% 1% 1%
Gross carrying amount (RMB’000) ......... 1,299 1,648 2,947
Expected credit losses (RMB’000) ......... 13 16 29
As at 31 December 2023
On a collective basis:
Expected credit loss rate ................ 1% — 1%
Gross carrying amount (RMB’000) ......... 14,070 — 14,070
Expected credit losses (RMB’000) ......... 141 — 141
As at 31 December 2024
On a collective basis:
Expected credit loss rate ................ 1% — 1%
Gross carrying amount (RMB’000) ......... 23,489 — 23,489
Expected credit losses (RMB’000) ......... 235 — 235
As at 31 October 2025
On a collective basis:
Expected credit loss rate ................ 1% 1% 1%
Gross carrying amount (RMB’000) ......... 20,165 192 20,357
Expected credit losses (RMB’000) ......... 202 2 204
APPENDIX I ACCOUNTANTS’ REPORT
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19. PREPAYMENTS, DEPOSITS AND OTHER RECEIV ABLES
The Group
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current:
Prepayments to suppliers ............ 9,329 12,440 7,205 8,783
Other tax recoverable .............. 8,823 7,382 19,798 5,298
Deposits and other receivables ........ 524 466 445 1,151
Listing expenses .................. — — — 2,097
Subtotal ........................ 18,676 20,288 27,448 17,329
Non-current:
Rent deposits and property management
fee deposits .................... 798 829 831 139
Prepayments for long-term assets ...... 3 0 4———
Subtotal ........................ 1,102 829 831 139
Total .......................... 19,778 21,117 28,279 17,468
At the end of each of the Relevant Periods, the ECLs of the financial assets included in
prepayments, other receivables and other assets were measured based on the 12-month expected credit
loss if they were not past due and there was no information indicating that the financial assets had a
significant increase in credit risk since initial recognition. Otherwise, they were measured based on the
lifetime expected credit loss. An impairment analysis was performed at the end of each of the Relevant
Periods.
The Company
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current:
Prepayments to suppliers ............ 9,329 12,440 7,205 7,457
Other tax recoverable .............. 8,231 6,731 19,003 4,395
Deposits and other receivables ........ 524 451 423 1,059
Listing expenses .................. — — — 2,097
Subtotal ........................ 18,084 19,622 26,631 15,008
Non-current:
Rent deposits and property management
fee deposits .................... 593 700 623 10
Total .......................... 18,677 20,322 27,254 15,018
APPENDIX I ACCOUNTANTS’ REPORT
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20. CASH AND CASH EQUIV ALENTS, TIME DEPOSITS AND PLEDGED DEPOSITS
The Group
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and bank balances ............ 234,668 179,547 120,476 95,170
Less: Non-pledged time deposits with
original maturity of over one year and
will mature within one year* ....... — (21,420) (33,204) —
Non-pledged time deposits with original
maturity of more than one year** .... (51,769) (32,220) — —
Pledged time deposits with original
maturity of more than one year and
will mature within one year*** ..... — — — (21,707)
Pledged time deposits with original
maturity of more than one year*** ... — (20,577) (21,197) —
Restricted cash ................... — (5) — —
Cash and cash equivalents ........... 182,899 105,325 66,075 73,463
* Short-term bank deposits were deposits with original maturity over one year and will mature within one year.
** Long-term bank deposits were deposits with original maturity over one year.
*** As at 31 December 2022, 2023 and 2024 and 31 October 2025, the Group’s and the Company’s time deposits were pledged
for interest-bearing bank borrowings amounting to nil, RMB20,577,000, RMB21,197,000 and RMB21,707,000 (note 24).
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents
Denominated in RMB ............ 174,420 31,796 27,616 28,184
Denominated in USD ............. 8,478 73,528 38,458 45,279
Denominated in HKD ............ 111 —
Total .......................... 182,899 105,325 66,075 73,463
Non-pledged time deposits, pledged
deposits and restricted cash
Denominated in RMB .............. 51,769 74,222 54,401 21,707
APPENDIX I ACCOUNTANTS’ REPORT
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The Company
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and bank balances ............ 228,260 126,758 83,252 59,589
Less: Non-pledged time deposits with
original maturity of over one year and
will mature within one year* ....... — (21,420) (33,204) —
Non-pledged time deposits with original
maturity of more than
one year** .................... (51,769) (32,220) — —
Pledged time deposits with original
maturity of more than one year and
will mature within one year*** ..... — — — (21,707)
Pledged time deposits with original
maturity of more than one year*** ... — (20,577) (21,197) —
Restricted cash ................... — (5) — —
Cash and cash equivalents ........... 176,491 52,536 28,851 37,882
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents
Denominated in RMB .............. 174,226 30,479 23,934 26,499
Denominated in USD .............. 2,265 22,057 4,917 11,383
Total .......................... 176,491 52,536 28,851 37,882
Non-pledged time deposits, pledged
deposits and restricted cash
Denominated in RMB .............. 51,769 74,222 54,401 21,707
21. TRADE PAYABLES
An ageing analysis of the trade payables as at the end of Relevant Periods, based on the invoice
date, is as follows:
The Group
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year .................... 11,557 15,962 34,748 26,995
1 to 2 years ..................... — 107 641 363
2 to 3 years ..................... — — 73 206
3 to 4 years ..................... ———3 3
Total .......................... 11,557 16,069 35,462 27,597
The trade payables are non-interest-bearing and are normally settled within 30 to 60 days upon
receipt of the V AT invoice.
APPENDIX I ACCOUNTANTS’ REPORT
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The Company
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year .................... 8,796 14,389 34,110 26,546
1 to 2 years ..................... — 107 641 361
2 to 3 years ..................... — — 73 206
3 to 4 years ..................... ———3 3
Total .......................... 8,796 14,496 34,824 27,146
22. OTHER PAYABLES AND ACCRUALS
The Group
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Accrued listing expenses ............ — — — 2,984
Payroll and welfare payable ......... 6,345 7,951 11,202 5,743
Accrued expenses ................. 767 445 276 38
Other tax payables ................ 469 534 850 969
Others ......................... 241 430 376 236
Government grants subject to
conditions ..................... 1,600 1,600 — —
Total .......................... 9,422 10,960 12,704 9,970
The Company
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Accrued listing expenses ............ — — — 2,984
Payroll and welfare payable ......... 6,345 7,233 10,237 5,450
Accrued expenses ................. 767 445 276 38
Other tax payables ................ 469 534 785 863
Others ......................... 239 430 293 168
Government grants subject to
conditions ..................... 1,600 1,600 — —
Total .......................... 9,420 10,242 11,591 9,503
Other payables are non-interest-bearing, unsecured and repayable on demand.
APPENDIX I ACCOUNTANTS’ REPORT
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23. CONTRACT LIABILITIES
The Group
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contract liabilities ................ 2,414 4,747 7,761 2,279
The Company
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contract liabilities ................ — 83 1,081 725
Contract liabilities include advances received from customers for delivery of power amplifier
audio chips and other chip products. The increase/decrease in contract liabilities during the Relevant
Periods was mainly due to the increase/decrease in short-term advances received from customers in
relation to the provision of products.
The analysis of the revenue which was included in the contract liabilities balances at the
beginning of the period, recognised during the Relevant Periods, relates to carried-forward contract
liabilities, refer to note 5 to the Historical Financial Information.
24. INTEREST-BEARING BANK BORROWINGS
The Group and the Company
As at 31 December 2023 As at 31 December 2024 As at 31 October 2025
Effective
interest rate
(%) Maturity RMB’000
Effective
interest rate
(%) Maturity RMB’000
Effective
interest rate
(%) Maturity RMB’000
Current
Bank loans—unsecured .... 3.10 2024 16,661 2.60 2025 20,014 2.60−2.85 2025−2026 50,109
Bank loans—secured ..... 2.95 2024 20,016 2.85 2025 20,016 2.60 2026 19,974
Current portion of long-term
bank loans—unsecured ... —————— 2.45−2.70 2026 10,457
Total current ......... 36,677 40,030 80,540
Non-current
Bank loans -unsecured .... — 3.45 2026 19,696 2.70 2027 19,600
Total ............. 36,677 59,726 100,140
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 368 ---
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Analysed into:
Bank loans repayable:
Within one year ............... — 36,677 40,030 80,540
In the second year ............. — — 19,696 19,600
Total .......................... — 36,677 59,726 100,140
Certain of the Group’s interest-bearing bank borrowings are secured by the pledges of the Group’s
time deposits with carrying values at the end of the Relevant Periods of approximately nil,
RMB20,577,000, RMB21,197,000 and RMB21,707,000.
25. PROVISION
The Group
Warranties
RMB’000
As at 1 January 2022 .............................................. 450
Additional provision ............................................. 1,793
Amounts utilised during the year .................................... (1,248)
As at 31 December 2022 and 1 January 2023 ............................. 995
Additional provision ............................................. 1,668
Reversal of unutilised amounts during the year .......................... (450)
As at 31 December 2023 and 1 January 2024 ............................. 2,213
Additional provision ............................................. 2,925
Amounts utilised during the year .................................... (166)
Reversal of unutilised amounts during the year .......................... (512)
As at 31 December 2024 and 1 January 2025 ............................. 4,460
Additional provision ............................................. 1,922
Amounts utilised during the period ................................... (1,240)
Reversal of unutilised amounts during the period ........................ (1,168)
As at 31 October 2025 ............................................. 3,974
APPENDIX I ACCOUNTANTS’ REPORT
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The Company
Warranties
RMB’000
As at 1 January 2022 .............................................. 81
Additional provision ............................................. 1,248
Amounts utilised during the year .................................... (1,248)
As at 31 December 2022 and 1 January 2023 ............................. 81
Additional provision ............................................. 269
Reversal of unutilised amounts during the year .......................... (81)
As at 31 December 2023 and 1 January 2024 ............................. 269
Additional provision ............................................. 434
Amounts utilised during the year .................................... (166)
As at 31 December 2024 and 1 January 2025 ............................. 537
Additional provision ............................................. 600
Amounts utilised during the period ................................... (300)
Reversal of unutilised amounts during the period ........................ (238)
As at 31 October 2025 ............................................. 599
Under the terms of the Group’s sales agreements, the Group offers warranties for its products.
Provision is therefore made for the best estimate of the expected settlement under these agreements in
respect of sales made within the warranty periods prior to the end of each reporting period. The amount
of provision takes into account the Group’s recent claim experience and is only made where a warranty
claim is probable.
26. REDEMPTION LIABILITIES
The Group and the Company
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Redemption liabilities .............. 30,775 33,244 35,911 38,281
The movements of the redemption liabilities during the reporting period are set out below:
Redemption
liabilities on equity
shares
RMB’000
As at 1 January 2022 .............................................. —
Grant of redemption right in financing ................................ 30,000
Changes in the carrying amounts of redemption liabilities .................. 775
As at 31 December 2022 and 1 January 2023 ............................. 30,775
Changes in the carrying amounts of redemption liabilities .................. 2,469
As at 31 December 2023 and 1 January 2024 ............................. 33,244
Changes in the carrying amounts of redemption liabilities .................. 2,667
As at 31 December 2024 and 1 January 2025 ............................. 35,911
Changes in the carrying amounts of redemption liabilities .................. 2,370
As at 31 October 2025 ............................................. 38,281
APPENDIX I ACCOUNTANTS’ REPORT
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A contract that contains an obligation to purchase the equity instruments for cash or another
financial asset gives rise to a financial liability for the redemption amount, even if the obligation to
purchase is conditional on the counterparty exercising a right to redeem. The redemption liability is
initially measured at the carrying amount of the redemption amount and is subsequently measured at
amortised cost, with interest expense included in the changes in the carrying amounts of financial
instruments issued to the investor. The carrying amount of the redemption liabilities is reclassified to
equity upon the termination of the counterparty’s redemption right.
In 2022, the Company conducted financing by issuing registered capital to an investor and the
investor was granted a right to put back to the Company the registered capital acquired upon occurrence
of any of the following events which cannot be controlled by the Company:
(i) The Company failing to achieve a qualified Initial Public Offering (the “ Qualified IPO ”)
before 31 December 2025;
(ii) The Company, the controlling shareholder, core shareholders or the employee shareholding
platform committing material breaches of contract, violating the representations or
warranties, or breaching the covenants and obligations, resulting in material adverse impacts
on the Group or the investor, and failing to effectively remedy such situations (if such
violations are remediable) within 30 working days after receiving a notice from the investor;
(iii) The controlling shareholder violating the non-competition obligation stipulated in the
supplementary agreement; or
(iv) Within three years from 2022, the controlling shareholder and core shareholders prior to the
investment having seriously breached the principle of good faith, or that the information
disclosed by the Group regarding the Group’s assets, business operations, or intellectual
property status being materially inconsistent with the facts, thereby significantly impairing
the investment interests of the investor.
The redemption price is calculated as the higher of (i) the sum of the actual investment amount
paid by the investor and the compound annual interest calculated at a rate of 8% on the investment
amount from the date of investment payment until the date of full redemption payment; and (ii) the net
assets of the Group, as audited by an accounting firm, at the latest accounting period end corresponding
to the equity of the Group held by the investor.
According to the investment agreement and the opinion of Company’s PRC legal counsel, such
redemption rights will be suspended upon the Company’s listing application to the Stock Exchange and
will automatically revive under the following circumstances: (1) if the initial public offering (“ IPO”)
application is withdrawn, becomes invalid, or is rejected; or (2) if the IPO has not been completed
within 12 months after the suspension of such special rights.
The redemption rights will automatically terminate upon the successful Qualified IPO. For the
details of pre-IPO investments, please refer to Note 28 to the Historical Financial Information.
27. DEFERRED INCOME
The Group and the Company
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Government grants ................ — — — 2,871
APPENDIX I ACCOUNTANTS’ REPORT
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The movements in deferred income during the Relevant Periods are as follows:
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period .......... ————
Received during the year/period ...... — — — 3,501
Credited to profit or loss during
the year/period ................. — — — (630)
At end of year/period .............. — — — 2,871
Government grants received related to assets invested in servers and computer equipment were
credited to deferred income and are recognised as income over the expected useful lives of the relevant
assets.
28. PAID-IN CAPITAL/SHARE CAPITAL
The Group and the Company
Shares
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Issued and fully paid:
Paid-in capital/Share capital ........ 26,122 26,122 26,122 100,000
A summary of movements in the Company’s paid-in capital/share capital is as follows:
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year/period .... 20,368 26,122 26,122 26,122
Capital contribution from shareholders .. 5,754 — — —
Conversion into a joint stock company .. — — — 73,878
At the end of the year/period ........ 26,122 26,122 26,122 100,000
In August 2022, the Company issued 5,754,000 paid-in capital with a nominal value of RMB1
each to 11 investors for a cash consideration of an aggregate amount of RMB206,679,000. The total
proceeds were received in 2022, with RMB5,754,000 and RMB200,925,000 credited to the Company’s
paid-in capital and capital reserve, respectively.
On 12 June 2025, the Company was converted into a joint stock limited company with limited
liability under the Company Law of the PRC. The net assets of the Company as at the conversion date
were converted into 100,000,000 shares at RMB1 each. The excess of net assets converted over nominal
value of the ordinary shares of RMB was credited to the Company’s capital reserves.
APPENDIX I ACCOUNTANTS’ REPORT
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Prior to the Relevant Periods and until August 18, 2022, the Company entered into respective
investment agreements for the subscription of Shares with various pre-IPO Investors for total net cash
proceeds of approximately RMB526,500,000. Of these, as of August 18, 2022, 16,907,470 Shares
issued for total net cash proceeds of approximately RMB526,400,000 (collectively the “ Pre-IPO
Investments ”), carried special rights (“ Special Rights ”) granted by the Company.
Pursuant to the aforementioned agreements, including the investment agreement entered among
the Company, Mr. Xu and the Pre-IPO Investors (including Huzhou Zhuosheng) (the “ Pre-IPO
Investors ”) on August 18, 2022 (the “ Investment Agreement ”) and the supplemental agreement to the
Investment Agreement entered among the Company, Mr. Xu and the Pre-IPO Investors (including
Huzhou Zhuosheng) on August 18, 2022 (the “ First Supplemental Agreement ”), the Pre-IPO Investors
were granted Special Rights which included redemption rights, anti-dilution rights, information rights,
co-sale rights, right of first refusal and liquidation preferences granted by the Company, as well as
redemption rights granted by Mr. Xu.
Prior to their termination, only certain information rights and director nomination rights among
the Special Rights granted by the Company had been exercised in the ordinary course for governance
and information purposes. There was no exercise of any redemption or other financial Special Rights
granted by the Company throughout the Relevant Periods.
On 30 April 2025, the Company and the Pre-IPO Investors except for “Huzhou Zhuosheng Equity
Investment Partnership (Limited Partnership) (“ Huzhou Zhuosheng ”) subsequently entered into a
supplemental agreement (the “ Second Supplemental Agreement ”), pursuant to which the redemption
rights granted by the Company to such Pre-IPO Investors (excluding Huzhou Zhuosheng) were
irrevocably terminated and became void ab initio. Subsequently, on June 27, 2025, the Company, Mr.
Xu and the Pre-IPO Investors (excluding Huzhou Zhuosheng) entered into a further supplemental
agreement (the “ Third Supplemental Agreement ”), pursuant to which (i) all other remaining Special
Rights granted by the Company to such Pre-IPO Investors (including pre-emptive rights, anti-dilution
rights, liquidation preferences and other rights as listed above) were terminated, effective on the date
immediately preceding the Listing, and (ii) the redemption rights granted by Mr. Xu to such Pre-IPO
Investors were terminated, effective on the date preceding the first submission of the listing application.
Taking into account the legal and regulatory framework of the Company’s jurisdiction and the
governing law of the supplemental agreements, the directors considered that it is appropriate to present
the Pre-IPO Investments except for Huzhou Zhuosheng as equity.
For the details of redemption liabilities recognised related to Huzhou Zhuosheng, please refer to
Note 26 to the Historical Financial Information.
Had the Special Rights granted by the Company to the Pre-IPO Investors been accounted for as
financial liabilities measured at present value of the redemption amount prior to entering into the
supplemental agreements, (i) the redemption financial liabilities, total current liabilities, net current
liabilities and net liabilities would have been:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Redemption financial liabilities ........... 697,684 811,676 876,794
Total current liabilities ................. 724,403 885,232 979,770
Net current liabilities .................. (443,532) (642,220) (699,221)
Net liabilities ........................ (368,570) (566,978) (679,010)
APPENDIX I ACCOUNTANTS’ REPORT
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(ii) the changes in the carrying amounts of redemption liabilities, the net loss for the year, basic
and dilutive loss per share would have been:
For the year ended 31 December
For the ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Changes in the carrying amounts of
redemption liabilities ............. (44,575) (59,220) (65,118) (53,914) (34,537)
Total net loss ..................... (109,702) (150,881) (119,295) (98,582) (83,943)
Loss per share
Basic and diluted (RMB) ............ (1.27) (1.51) (1.19) (0.99) (0.84)
29. SHARE-BASED PAYMENTS
In recognition of the contributions of the Group’s key employees and to incentivize them to
further promote the Group’s development, the Group awards the partnership interest in the employee
shareholding platforms to the employees and adopts the employee stock ownership plan.
On 10 January 2022 and 28 February 2022, pursuant to the employee stock ownership plan,
19,032 shares and 5,947 shares of the Company were granted to eligible participants through the
employee shareholding platforms, respectively, in the form of restricted shares. The grant date fair
values of these shares were determined by an external valuer taking into the recent capital injection
price from series C+ investors in August 2021 using the back-solve method and adopting the equity
allocation model. The difference between the fair value of the shares granted and the subscription price
was recorded in the share-based payment reserve within equity with the corresponding “share-based
payment expenses” in profit or loss.
Shares granted during the Relevant Periods needs to meet service requirements from the date of
grant to the later of (1) four years or five years since the grant date (the “ Service Period ”) and (2) the
date of successful IPO of the Company (the “ Lock-up Period ”). After taking into consideration of the
best estimation of the IPO, the management determined the vesting period of the relevant shares based
on the above service requirements. As such, the share-based payment expenses are amortised during the
vesting period.
Movements in the number of equity interest shares granted and the respective weighted average
grant date fair values were as follows:
Y ear ended 31 December Ten months ended 31 October
2022 2023 2024 2025
Weighted
average grant
date fair value
Number of
shares
Weighted
average grant
date fair value
Number of
shares
Weighted
average grant
date fair value
Number of
shares
Weighted
average grant
date fair value
Number of
shares
RMB per share RMB per share RMB per share RMB per share
At the beginning of
the year/period .. 23.47 5,791,428 23.57 5,761,565 23.53 5,738,727 23.39 5,656,652
Granted ....... 36.28 24,979 ——————
Forfeited ....... 19.59 (54,842) 31.79 (22,838) 33.61 (82,075) 26.71 (22,600)
At the end of
the year/period .. 23.57 5,761,565 23.53 5,738,727 23.39 5,656,652 23.37 5,634,052
APPENDIX I ACCOUNTANTS’ REPORT
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Share-based payment expenses relating to employees recognised for the Relevant Periods and in
the period covered by the Interim Comparative Financial Information are as follows:
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Administrative expenses ............... 1,974 1,974 1,974 1,645 1,239
Research and development costs ......... 4,277 4,291 4,321 3,601 3,674
Selling and marketing expenses .......... 1,573 1,578 1,548 1,290 1,166
Total ........................... 7,824 7,843 7,843 6,536 6,079
30. RESERVES
The Group
The amounts of the Group’s reserves and the movements therein for the Relevant Periods are
presented in the consolidated statements of changes in equity of the Historical Financial Information.
(i) Capital reserve
The capital reserve consists of premiums in issuing capitals and the amounts in relation to the
recognition of the redemption liabilities as set out in note 26 to the Historical Financial Information.
(ii) Exchange fluctuation reserve
The exchange fluctuation reserve represents exchange differences arising from the translation of
the financial statements of foreign operations whose functional currencies are different from the
Group’s presentation currency.
(iii) Share-based payment reserve
The share-based payment reserve represents the equity-settled share awards as set out in note 29
to the Historical Financial Information.
The Company
Capital reserve
Share-base
payment reserve
Accumulated
deficits Total
RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2022 ................ 320,632 127,539 (260,353) 187,818
Total comprehensive income for the year ... — — (57,711) (57,711)
Contribution from shareholders ......... 200,925 — — 200,925
Recognition of redemption liabilities
(note 26) ...................... (30,000) — — (30,000)
Share-based payments ............... — 7,824 — 7,824
As at 31 December 2022 and
1 January 2023 .................. 491,557 135,363 (318,064) 308,856
Total comprehensive income for the year ... — — (92,626) (92,626)
Share-based payments ............... — 7,843 — 7,843
As at 31 December 2023 and
1 January 2024 .................. 491,557 143,206 (410,690) 224,073
Total comprehensive income for the year ... — — (46,697) (46,697)
Share-based payments ............... — 7,843 — 7,843
APPENDIX I ACCOUNTANTS’ REPORT
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Capital reserve
Share-base
payment reserve
Accumulated
deficits Total
RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2024 and
1 January 2025 .................. 491,557 151,049 (457,387) 185,219
Total comprehensive income for
the period ...................... — — (42,234) (42,234)
Share-based payments ............... —6 , 0 7 9 —6 , 0 7 9
Conversion into a joint stock company .... (411,418) (122,247) 459,787 (73,878)
As at 31 October 2025 ............... 80,139 34,881 (39,834) 75,186
31. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
(a) Major non-cash transactions
During the years ended 31 December 2022, 2023, 2024, and ten months ended 31 October 2025,
the Group had non-cash additions to right-of-use assets and lease liabilities of RMB187,000,
RMB5,314,000, RMB188,000 and nil, respectively, in respect of lease arrangements for buildings.
(b) Changes in liabilities arising from financing activities
Interest- bearing
bank borrowings Lease liabilities
Redemption
liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 .................. —6 , 1 9 5 —6 , 1 9 5
Changes from financing cash flows ....... — (2,284) 30,000 27,716
New leases ....................... — 187 — 187
Interest expense ................... — 209 — 209
Changes in the carrying amounts of
redemption liabilities .............. — — 775 775
At 31 December 2022 ............... — 4,307 30,775 35,082
Changes from financing cash flows ....... 36,058 (3,502) — 32,556
New leases ....................... —5 , 3 1 4 —5 , 3 1 4
Interest expense ................... 619 203 — 822
Changes in the carrying amounts of
redemption liabilities .............. — — 2,469 2,469
At 31 December 2023 ............... 36,677 6,322 33,244 76,243
Changes from financing cash flows ....... 21,843 (3,167) — 18,676
New leases ....................... — 188 — 188
Interest expense ................... 1,206 187 — 1,393
Changes in the carrying amounts of
redemption liabilities .............. — — 2,667 2,667
At 31 December 2024 ............... 59,726 3,530 35,911 99,167
Changes from financing cash flows ....... 38,332 (2,292) — 36,040
Interest expense ................... 2,082 73 — 2,155
Changes in the carrying amounts of
redemption liabilities .............. — — 2,370 2,370
At 31 October 2025 ................. 100,140 1,311 38,281 139,732
APPENDIX I ACCOUNTANTS’ REPORT
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(c) Total cash outflow for leases
The total cash outflow for leases included in the statements of cash flows is as follows:
As at 31 December As at 31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Within operating activities ............. 123 406 149 130 202
Within financing activities ............. 2,284 3,502 3,167 2,646 2,292
Total ........................... 2,407 3,908 3,316 2,776 2,494
32. CONTINGENT LIABILITIES
During the relevant periods, the Company had been a defendant in a patent dispute lawsuit filed
by a party alleging that the Company infringed its invention patent in Chinese mainland. This lawsuit is
still ongoing and has not yet been scheduled for court. The Company had obtained an appraisal report
issued by an authoritative judicial appraisal center. The report concludes that the technical features of
implicated products are neither identical nor equivalent to those covered by the plaintiff’s patent. The
Company’s PRC litigation advisor is of the view that there are reasonable grounds to believe the court
would dismiss the claims on the basis that the said chip products should not fall under the protection of
such invention patent. The directors, based on the advice from Company’s PRC litigation advisor,
believe that the Company has a valid defense against the allegation and, accordingly, the Group has not
provided for any claim arising from the litigation, other than the related legal and other costs.
33. COMMITMENTS
The Group had the following capital commitments at the end of the Relevant Periods:
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contracted, but not provided for:
Properties, plant and equipment ..... 189 1,456 — —
34. RELATED PARTY TRANSACTIONS
The directors are of the opinion that the following parties are related parties that had material
transactions or balances with the Group during the Relevant Periods and in the period covered by the
Interim Comparative Financial Information.
(a) Names of related parties and their relationship with the Group
Name Relationship with the Group
Mr. Xu Xiaolin (“ Mr.
Xu”)
Founder, chairman of the board and director
Mr. Liu Baoliang Co-founder and director
APPENDIX I ACCOUNTANTS’ REPORT
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(b) Transactions with related parties:
As at 31 December As at 31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Loans repaid by directors ............. 2 , 6 4 6————
Interest income from directors .......... 9————
The Group and the Company
The Company granted loans to the directors, with interest rates set at 4.85% and 4.75%
respectively. As of 31 December 2022, the directors had fully repaid the principal amounts and the
accrued interest.
Redemption rights of the Pre-IPO Investors granted by Mr. Xu
Pursuant to the investment agreement entered into on 18 August 2022, the Pre-IPO Investors had
been granted the redemption rights by the Company and/or Mr. Xu. According to the supplemental
agreements entered into on 27 June 2025 by the Company and the Pre-IPO Investors (excluding
“Huzhou Zhuosheng ”). Mr. Xu has been designated as the sole obligor for the redemption rights, and
the Company is no longer a party to the redemption rights. The relevant redemption liabilities shall
automatically terminate one day prior to the Company’s submission of its initial public offering
application to the Hong Kong Stock Exchange (the “ Listing Application ”). However, the provisions
relating to the redemption liabilities shall automatically resume effectiveness, and shall have retroactive
effect from the earliest of the following events:
(1) the Company voluntarily withdraws the Listing Application;
(2) the Listing Application is rejected or returned by the Hong Kong Stock Exchange;
(3) the Listing Application fails to be approved at the hearing by the Hong Kong Stock
Exchange; or
(4) the earlier of the 18-month of the date of signing this agreement and the completion of the
Listing Application.
There were no side agreements or arrangements between the Company and Mr. Xu regarding the
redemption rights of the Pre-IPO Investors, nor had the Company provided any form of guarantee in
connection with any potential default or failure by Mr. Xu to fulfill his obligations relating to such
redemption rights. Although the Company was a signing party to the agreements entered into between
the Pre-IPO Investors and Mr. Xu, the Company had no connection or involvement in the arrangements
concerning redemption rights between the Pre-IPO Investors (excluding “ Huzhou Zhuosheng ”) and Mr.
Xu, nor did it bear any obligation to repurchase any Shares under such terms. Accordingly, no financial
liability pertaining to redemption rights, other than for “Huzhou Zhuosheng”, was recognized during the
Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
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(c) Outstanding balances with related parties:
The Company
As at 31 December
As at
31 October
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Due from subsidiaries
Trade related:
Fourier Technology Limited ......... 65,071 133,815 139,365 168,809
Shenzhen FourSemi Electronics
Company Limited ............... — — 4,997 5,369
Non-trade related:
Fourier Technology Limited ......... 4,322 4,251 4,051 3,869
Shanghai FourSemi Electronics
Technology Company Limited ...... 4,703 4,049 4,049 4,049
Total .......................... 74,096 142,115 152,462 182,096
Due to subsidiaries
Trade related:
Fourier Technology Limited ......... 1,162 25,931 47,496 63,703
Shanghai FourSemi Electronics
Technology Company Limited ...... ——9 3—
Shenzhen FourSemi Electronics
Company Limited ............... ——— 4 8 7
Total .......................... 1,162 25,931 47,589 64,190
As at 31 December 2022, 2023, 2024 and 31 October 2025, all the remaining balances due to
related parties were non-interest-bearing, unsecured and repayable on demand.
(d) Compensation of key management personnel of the Group
Y ear ended 31 December
Ten months ended
31 October
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, bonuses, allowances and
benefits in kind ................... 3,495 3,425 3,529 2,856 4,270
Performance related bonuses ............ 259 356 1,911 1,593 469
Share-based payments ................ 1,468 1,468 1,468 1,223 1,223
Pension scheme contributions and social
welfare ........................ 189 219 287 227 301
Total compensation paid to key management
personnel ....................... 5,411 5,468 7,195 5,899 6,263
Further details of directors’ and the chief executive’s emoluments are included in note 8 to
Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-68 –


--- page 379 ---
35. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments as at the end of each of
the Relevant Periods are as follows:
The Group
As at 31 December 2022
Financial assets
Financial assets at
amortised cost
RMB’000
Financial assets included in prepayments, deposits and other receivables ......... 1,322
Non-pledged time deposits .......................................... 51,769
Trade receivables ................................................. 14,153
Cash and cash equivalents ........................................... 182,899
Total .......................................................... 250,143
Financial liabilities
Financial liabilities
at amortised cost
RMB’000
Trade payables ................................................... 11,557
Financial liabilities included in other payables and accruals .................. 2,608
Redemption liabilities .............................................. 30,775
Total .......................................................... 44,940
As at 31 December 2023
Financial assets
Financial assets at
amortised cost
RMB’000
Financial assets included in prepayments, deposits and other receivables ......... 1,295
Non-pledged time deposits .......................................... 53,640
Trade receivables ................................................. 30,457
Pledged time deposits .............................................. 20,577
Restricted cash ................................................... 5
Cash and cash equivalents ........................................... 105,325
Total .......................................................... 211,299
APPENDIX I ACCOUNTANTS’ REPORT
– I-69 –


--- page 380 ---
Financial liabilities
Financial liabilities
at amortised cost
RMB’000
Trade payables ................................................... 16,069
Financial liabilities included in other payables and accruals .................. 2,475
Interest-bearing bank borrowings ...................................... 36,677
Redemption liabilities .............................................. 33,244
Total .......................................................... 88,465
As at 31 December 2024
Financial assets
Financial assets at
amortised cost
RMB’000
Financial assets included in prepayments, deposits and other receivables ......... 1,276
Non-pledged time deposits .......................................... 33,204
Pledged time deposits .............................................. 21,197
Trade receivables ................................................. 41,901
Cash and cash equivalents ........................................... 66,075
Total .......................................................... 163,653
Financial liabilities
Financial liabilities
at amortised cost
RMB’000
Trade payables ................................................... 35,462
Financial liabilities included in other payables and accruals .................. 652
Interest-bearing bank borrowings ...................................... 59,726
Redemption liabilities .............................................. 35,911
Total .......................................................... 131,751
As at 31 October 2025
Financial assets
Financial assets at
amortised cost
RMB’000
Financial assets included in prepayments, deposits and other receivables ......... 1,290
Pledged time deposits .............................................. 21,707
Trade receivables ................................................. 47,797
Cash and cash equivalents ........................................... 73,463
Total .......................................................... 144,257
APPENDIX I ACCOUNTANTS’ REPORT
– I-70 –


--- page 381 ---
Financial liabilities
Financial liabilities
at amortised cost
RMB’000
Trade payables ................................................... 27,597
Financial liabilities included in other payables and accruals .................. 3,258
Interest-bearing bank borrowings ...................................... 100,140
Redemption liabilities .............................................. 38,281
Total .......................................................... 169,276
For the details of pre-IPO investments, please refer to Note 28 to the Historical Financial
Information.
36. FAIR V ALUE AND FAIR V ALUE HIERARCHY OF FINANCIAL INSTRUMENTS
The carrying amounts and fair values of the Group’s financial instruments, other than those with
carrying amounts that reasonably approximate to fair values, are as follows:
Carrying amounts Fair values
As at 31 December
As at
31 October As at 31 December
As at
31 October
2023 2024 2025 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Financial liability
Interest-bearing bank borrowings —
non-current ................... — 19,696 19,600 — 19,784 19,617
Management has assessed that the fair values of cash and cash equivalents, current portion of time
deposits, pledged deposits, trade receivables, trade payables, financial assets included in prepayments,
deposits and other receivables, short-term interest-bearing bank borrowings, financial liabilities
included in other payables and accruals and redemption liabilities approximate to their carrying
amounts largely due to the short-term maturities of these instruments.
The Group’s finance department headed by the finance manager is responsible for determining the
policies and procedures for the fair value measurement of financial instruments. The finance manager
reports directly to the chief financial officer. At each reporting date, the finance department analyses
the movements in the values of financial instruments and determines the major inputs applied in the
valuation. The valuation is reviewed and approved by the chief financial officer.
The fair values of non-current portion of time deposits, pledged deposits, interest-bearing bank
borrowings have been calculated by discounting the expected future cash flows using rates currently
available for instruments with similar terms, credit risk and remaining maturities. The Group’s own
non-performance risk for interest-bearing bank borrowings as at 31 December 2023 and 2024 and 31
October 2025 was assessed to be insignificant.
37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise interest-bearing bank borrowings and cash
and bank balances. The main purpose of these financial instruments is to raise finance for the Group’s
operations. The Group has various other financial assets and liabilities such as trade receivables, and
trade payables, which arise directly from its operations.
APPENDIX I ACCOUNTANTS’ REPORT
– I-71 –


--- page 382 ---
The main risks arising from the Group’s financial instruments are interest rate risk, foreign
currency risk, credit risk and liquidity risk. The board of directors reviews and agrees policies for
managing each of these risks and they are recognised below.
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the
Group’s bank borrowings.
The Group’s policy is to manage its interest cost using a mix of fixed and variable rate debts. As
at 31 December 2023, 2024 and 31 October 2025, none of the Group’s interest-bearing borrowings bore
interest at floating rates. Accordingly, as at the end of each of the Relevant Periods, the Group did not
have any significant exposure to the interest rate risk in the cash flows.
Foreign currency risk
The Group has transactional currency exposures. Such exposures arise from sales or purchases by
operating units in currencies other than the units’ functional currencies. The Group principally
conducted business in RMB, which is exposed to foreign currency risk with respect to transactions
denominated in currencies other than RMB. In addition, the functional currency of the Company’s
subsidiary incorporated in Hong Kong is USD, which is exposed to foreign currency risk with respect
to transactions denominated in currencies other than USD. Foreign exchange risk arises from future
commercial transactions and recognised assets and liabilities denominated in currencies that are not the
functional currencies of the relevant group entities.
The following table demonstrates the sensitivity at the end of the reporting period to a reasonably
possible change in the USD/RMB exchange rate, with all other variables held constant, of the Group’s
loss before tax (arising from USD/RMB denominated financial instruments) and the Group’s equity
(due to changes in the fair value of forward currency contracts).
Increase/
(decrease) in
RMB/USD rate
Increase/
(decrease) in loss
before tax
Increase/
(decrease) in
equity
% RMB’000 RMB’000
31 October 2025
If RMB weakens against USD ............ (1) 656 656
If RMB strengthens against USD .......... 1 (656) (656)
2024
If RMB weakens against USD ............ (1) 404 404
If RMB strengthens against USD .......... 1 (404) (404)
2023
If RMB weakens against USD ............ (1) 827 827
If RMB strengthens against USD .......... 1 (827) (827)
2022
If RMB weakens against USD ............ (1) 109 109
If RMB strengthens against USD .......... 1 (109) (109)
Credit risk
The Group only offers credit terms to recognised and creditworthy customers. It is the Group’s
policy that all customers who wish to trade on credit terms are subject to credit verification procedures.
In addition, receivable balances are monitored on an ongoing basis and the Group’s exposure to bad
debts is not significant. For transactions that are not denominated in the functional currency of the
relevant operating unit, the Group does not offer credit terms without the specific verification
procedures.
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 383 ---
Maximum exposure and year-end staging
The tables below show the credit quality and the maximum exposure to credit risk based on the
Group’s credit policy, which is mainly based on past due information unless other information is
available without undue cost or effort, and year-end staging classification as at the end of Relevant
Periods.
As at 31 December 2022
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3 Simplified approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables* ........ — — — 14,296 14,296
Financial assets included in
prepayments, deposits and
other receivables
— Normal** .......... 1,322 — — — 1,322
Non-pledged time deposits
— Not yet past due ...... 51,769 — — — 51,769
Cash and cash equivalents
— Not yet past due ...... 182,899 — — — 182,899
Total................ 235,990 — — 14,296 250,286
As at 31 December 2023
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3 Simplified approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables* ........ — — — 30,765 30,765
Financial assets included in
prepayments, deposits and
other receivables
— Normal** .......... 1,295 — — — 1,295
Non-pledged time deposits
— Not yet past due ...... 53,640 — — — 53,640
Pledged time deposits
— Not yet past due ...... 20,577 — — — 20,577
Restricted cash
— Not yet past due ...... 5——— 5
Cash and cash equivalents
— Not yet past due ...... 105,325 — — — 105,325
Total................ 180,842 — — 30,765 211,607
APPENDIX I ACCOUNTANTS’ REPORT
– I-73 –


--- page 384 ---
As at 31 December 2024
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3 Simplified approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables* ........ — — — 42,325 42,325
Financial assets included in
prepayments, deposits and
other receivables
— Normal** .......... 1,276 — — — 1,276
Non-pledged time deposits
— Not yet past due ...... 33,204 — — — 33,204
Pledged time deposits
— Not yet past due ...... 21,197 — — — 21,197
Cash and cash equivalents
— Not yet past due ...... 66,075 — — — 66,075
Total................ 121,752 — — 42,325 164,077
As at 31 October 2025
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3 Simplified approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables* ........ — — — 48,280 48,280
Financial assets included in
prepayments, deposits and
other receivables
— Normal** .......... 1,290 — — — 1,290
Pledged time deposits ......
— Not yet past due ...... 21,707 — — — 21,707
Cash and cash equivalents ...
— Not yet past due ...... 73,463 — — — 73,463
Total................ 96,460 — — 48,280 144,740
* For trade receivables to which the Group applies the simplified approach for impairment, information based on the
provision matrix is disclosed in note 18 to the Historical Financial Information.
** The credit quality of the financial assets included in prepayments, deposits and other receivables is considered to be
“normal” when they are not past due and there is no information indicating that the financial assets had a significant
increase in credit risk since initial recognition. Otherwise, the credit quality of the financial assets is considered to be
“doubtful”.
Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by the
management of the Group to finance the operations and mitigate the effects of fluctuations in cash
flows.
APPENDIX I ACCOUNTANTS’ REPORT
– I-74 –


--- page 385 ---
The maturity profile of the Group’s financial liabilities as at the end of each of the Relevant
Periods, based on the contractual undiscounted payments, is as follows:
31 December 2022
Within 1 year or on
demand 1 to 2 years 2 to 3 years 3 to 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade payables .......... 11,557 — — — 11,557
Financial liabilities included in
other payables and accruals . 2,608 — — — 2,608
Lease liabilities ......... 2,427 1,129 772 160 4,488
Redemption liabilities ...... 30,775 — — — 30,775
Total................ 47,367 1,129 772 160 49,428
31 December 2023
Within 1 year or on
demand 1 to 2 years 2 to 3 years 3 to 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank
borrowings ........... 37,076 — — — 37,076
Trade payables .......... 16,069 — — — 16,069
Financial liabilities included in
other payables and accruals . 2,475 — — — 2,475
Lease liabilities ......... 3,072 2,538 940 41 6,591
Redemption liabilities ...... 33,244 — — — 33,244
Total................ 91,936 2,538 940 41 95,455
31 December 2024
Within 1 year
or on demand 1 to 2 years 2 to 3 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank borrowings ...... 40,963 19,923 — 60,886
Trade payables ................... 35,462 — — 35,462
Financial liabilities included in other
payables and accruals ............ 652 — — 652
Lease liabilities .................. 2,637 942 41 3,620
Redemption liabilities .............. 35,911 — — 35,911
Total .......................... 115,625 20,865 41 136,531
31 October 2025
Within 1 year
or on demand 1 to 2 years 2 to 3 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank borrowings ...... 81,601 20,077 — 101,678
Trade payables ................... 27,597 — — 27,597
Financial liabilities included in other
payables and accruals ............ 3,258 — — 3,258
Lease liabilities .................. 1,268 61 — 1,329
Redemption liabilities .............. 38,281 — — 38,281
Total .......................... 152,005 20,138 — 172,143
APPENDIX I ACCOUNTANTS’ REPORT
– I-75 –


--- page 386 ---
Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability to
continue as a going concern and to maintain healthy capital ratios in order to support its business and
maximise shareholders’ value.
The Group manages its capital structure and makes adjustments to it in light of changes in
economic conditions. To maintain or adjust the capital structure, the Group may issue new shares. The
Group is not subject to any externally imposed capital requirements. No changes were made in the
objectives, policies or processes for managing capital during the Relevant Periods.
The Group monitors capital using a debt-to-asset ratio which is total liabilities divided by total
assets. As at 31 December 2022, 2023, 2024 and 31 October 2025, the Group’s debt-to-asset ratios were
17%, 34%, 50% and 62%, respectively.
38. EVENTS AFTER THE RELEV ANT PERIODS
There are no significant subsequent events undertaken by the Company or by the Group after 31
October 2025.
39. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any of the
companies now comprising the Group in respect of any period subsequent to 31 October 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-76 –


--- page 387 ---
The following information does not form part of the Accountants’ Report from Ernst & Young,
Certified Public Accountants, Hong Kong, the Company’ s reporting accountants, as set out in Appendix
I to this prospectus, and is included herein for illustrative purpose only. The unaudited pro forma
financial information should be read in conjunction with the section headed “Financial Information” in
this prospectus and the Accountants’ Report set out in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma adjusted consolidated net tangible assets attributable to the
owners of the Company has been prepared in accordance with Rule 4.29 of the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited and with reference to Accounting
Guideline 7 Preparation of Pro Forma Financial Information for inclusion in Investment Circulars
issued by the Hong Kong Institute of Certified Public Accountants to illustrate the effect of the Global
Offering on the consolidated net tangible assets attributable to owners of the Company as at 31 October
2025 as if the Global Offering had taken place on that date.
The unaudited pro forma statement of adjusted consolidated net tangible assets attributable to
owners of the Company has been prepared for illustrative purposes only and because of its hypothetical
nature, it may not give a true picture of the consolidated net tangible assets of the Group as at 31
October 2025 or any future dates following the Global Offering.
Consolidated net
tangible assets of
the Group
attributable to
owners of the
Company as at
31 October 2025
Estimated net
proceeds from the
Global Offering
Estimated impact
related to the
reclassification of
redemption
liabilities upon
Listing
Unaudited pro
forma adjusted
consolidated net
tangible assets
attributable to
owners of the
Company
Unaudited pro forma
adjusted consolidated net
tangible assets per Share
RMB’000 RMB’000 RMB’000 RMB’000 RMB HK$
(note 1) (note 2) (note 3) (note 4) (note 5)
Based on an Offer Price of HK$40.00 per
share .................. 115,808 385,168 38,281 539,257 4.81 5.46
Based on an Offer Price of HK$45.00 per
share .................. 115,808 435,946 38,281 590,035 5.27 5.98
Based on an Offer Price of HK$50.00 per
share .................. 115,808 486,723 38,281 640,812 5.72 6.49
Notes:
(1) The consolidated net tangible assets attributable to owners of the Company as at 31 October 2025 is arrived at after
deducting other intangible asset of RMB553,000 from the consolidated equity attributable to owners of the Company of
RMB116,361,000 as at 31 October 2025, as shown in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$40.00 per Share, HK$45.00 per
Share and HK$50.00 per Share, after deduction of the underwriting fees and other related expenses payable by the
Company (excluding the listing expenses that have been charged to profit or loss during the Track Record Period) and does
not take into account of any Shares which may be issued upon the exercise of the Over-allotment Option. The estimated
net proceeds from the Global Offering are converted from Hong Kong dollars into Renminbi at an exchange rate of RMB1
to HK$1.1343.
(3) For the purpose of the unaudited pro forma financial information, considering the estimated impact related to the
reclassification of redemption liabilities upon Listing, the unaudited pro forma adjusted net tangible assets attributable to
the owners of the Company will be increased by RMB38,281,000, being the carrying amount of the redemption liabilities
as at 31 October 2025. The redemption rights will automatically terminate upon the Listing and the completion of the
Global Offering. The carrying amount of the redemption liabilities is reclassified to equity upon the termination of the
counterparty’s redemption right. The amount that is reclassified to equity will be the carrying amount of the redemption
liabilities on that date of the Global Offering.
(4) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the Company and the amounts
per share are arrived at after the adjustments referred to in the preceding paragraphs (note 2 and 3) above and on the basis
that 112,000,000 shares were in issue assuming that the Global Offering had been completed on 31 October 2025.
APPENDIX IIA UNAUDITED PRO FORMA FINANCIAL INFORMATION
– IIA-1 –


--- page 388 ---
(5) The unaudited pro forma adjusted consolidated net tangible assets per Share are converted into Hong Kong dollars at an
exchange rate of RMB1 to HK$1.1343.
(6) No adjustment has been made to the unaudited pro forma adjusted net tangible assets to reflect any trading results or other
transactions for the Company entered into subsequent to 31 October 2025.
APPENDIX IIA UNAUDITED PRO FORMA FINANCIAL INFORMATION
– IIA-2 –


--- page 389 ---
B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of a report, prepared for inclusion in this document, received from the
independent reporting accountants of the Company, Ernst & Young, Certified Public Accountants, Hong
Kong, for the purpose of incorporation in this prospectus.
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
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To the Directors of Shanghai FourSemi Semiconductor Co., Ltd.
We have completed our assurance engagement to report on the compilation of pro forma financial
information of Shanghai FourSemi Semiconductor Co., Ltd. (the “ Company ”) and its subsidiaries
(hereinafter collectively referred to as the “ Group ”) by the directors of the Company (the “ Directors ”)
for illustrative purposes only. The pro forma financial information consists of the pro forma
consolidated net tangible assets as at 31 October 2025 and related notes as set out on pages IIA-1 and
IIA-2 of the prospectus dated 23 March 2026 issued by the Company (the “ Pro Forma Financial
Information ”). The applicable criteria on the basis of which the Directors have compiled the Pro
Forma Financial Information are described in Part A of Appendix IIA to the Prospectus.
The Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of the
global offering of shares of the Company on the Group’s financial position as at 31 October 2025 as if
the transaction had taken place at 31 October 2025. As part of this process, information about the
Group’s financial position has been extracted by the Directors from the Group’s financial statements for
the period ended 31 October 2025, on which an accountants’ report has been published.
Directors’ responsibility for the Pro Forma Financial Information
The Directors are responsible for compiling the Pro Forma Financial Information in accordance
with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong
Kong Limited (the “ Listing Rules ”) and with reference to Accounting Guideline (“ AG”) 7 Preparation
of Pro Forma Financial Information for Inclusion in Investment Circulars issued by the Hong Kong
Institute of Certified Public Accountants (the “ HKICPA”).
Our independence and quality management
We have complied with the independence and other ethical requirements of the Code of Ethics for
Professional Accountants issued by the HKICPA, which is founded on fundamental principles of
integrity, objectivity, professional competence and due care, confidentiality and professional behavior.
Our firm applies Hong Kong Standard on Quality Management 1 Quality Management for Firms
that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services
Engagements which requires the firm to design, implement and operate a system of quality management
including policies or procedures regarding compliance with ethical requirements, professional standards
and applicable legal and regulatory requirements.
Reporting accountants’ responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules,
on the Pro Forma Financial Information and to report our opinion to you. We do not accept any
responsibility for any reports previously given by us on any financial information used in the
compilation of the Pro Forma Financial Information beyond that owed to those to whom those reports
were addressed by us at the dates of their issue.
APPENDIX IIA UNAUDITED PRO FORMA FINANCIAL INFORMATION
– IIA-3 –


--- page 390 ---
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 Pro Forma Financial Information in accordance with paragraph 4.29 of the Listing
Rules and with reference to AG 7 issued by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any reports or
opinions on any historical financial information used in compiling the Pro Forma Financial Information,
nor have we, in the course of this engagement, performed an audit or review of the financial
information used in compiling the Pro Forma Financial Information.
The purpose of the Pro Forma Financial Information included in the Prospectus is solely to
illustrate the impact of the global offering of shares of the Company on unadjusted financial
information of the Group as if the transaction had been undertaken at an earlier date selected for
purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of
the transaction would have been as presented.
A reasonable assurance engagement to report on whether the Pro Forma Financial Information has
been properly compiled on the basis of the applicable criteria involves performing procedures to assess
whether the applicable criteria used by the Directors in the compilation of the Pro Forma Financial
Information provide a reasonable basis for presenting the significant effects directly attributable to the
transaction, and to obtain sufficient appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the Pro Forma Financial Information reflects the proper application of those adjustments to
the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgment, having regard to the
reporting accountants’ understanding of the nature of the Group, the transaction in respect of which the
Pro Forma Financial Information has been compiled, and other relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the Pro Forma Financial
Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Opinion
In our opinion:
(a) the Pro Forma Financial Information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Pro Forma Financial Information as
disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Ernst & Y oung
Certified Public Accountants
Hong Kong
23 March 2026
APPENDIX IIA UNAUDITED PRO FORMA FINANCIAL INFORMATION
– IIA-4 –


--- page 391 ---
The following is the preliminary financial information of our Group as of and for the year ended
December 31, 2025 (the “ 2025 Preliminary Financial Information ”), together with comparative
figures as of and for the year ended December 31, 2024 and a discussion and analysis of our Group’ s
financial condition and results of operations. The 2025 Preliminary Financial Information has not been
audited. Investors should bear in mind that the 2025 Preliminary Financial Information in this
Appendix IIB may be subject to adjustments.
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Notes Y ear ended 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
REVENUE .............................. 4 365,703 355,195
Cost of sales .............................
Cost of goods and services ................. (287,606) (306,007)
Impairment losses on inventories ............. (2,134) (2,632)
Gross profit .............................. 75,963 46,556
Other income and gains ..................... 4 4,667 9,582
Selling and marketing expenses ................ (19,640) (20,847)
Administrative expenses ..................... (42,326) (19,673)
Research and development costs ............... (69,014) (68,060)
Reversal of/(impairment losses) on financial assets,
net ................................... 16 (116)
Other expenses ............................ (3,317) (226)
Finance costs ............................. (2,651) (1,393)
Changes in the carrying amounts of redemption
liabilities .............................. (2,865) (2,667)
LOSS BEFORE TAX ....................... 5 (59,167) (56,844)
Income tax expense ........................ 6 ——
LOSS FOR THE YEAR .................... (59,167) (56,844)
Loss attributable to:
Owners of the parent ...................... (59,167) (56,844)
LOSS PER SHARE ATTRIBUTABLE TO
ORDINARY EQUITY HOLDERS OF THE
PARENT
Basic and diluted (RMB) .................... 8 (0.59) (0.57)
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-1 –


--- page 392 ---
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Y ear ended 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
LOSS FOR THE YEAR ............................. (59,167) (56,844)
OTHER COMPREHENSIVE INCOME
Other comprehensive income that may be reclassified to profit
or loss in subsequent periods:
Exchange differences on translation of foreign operations .... 169 (580)
OTHER COMPREHENSIVE INCOME FOR THE YEAR,
NET OF TAX .................................... 169 (580)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR .... (58,998) (57,424)
Attributable to:
Owners of the parent ............................... (58,998) (57,424)
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-2 –


--- page 393 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
Notes 2025 2024
RMB’000 RMB’000
(unaudited)
NON-CURRENT ASSETS
Property, plant and equipment ................. 9,920 14,768
Right-of-use assets ......................... 1,077 3,648
Other intangible assets ...................... 540 434
Prepayments, deposits and other receivables ....... 139 831
Pledged time deposits ....................... — 21,197
Total non-current assets .................... 11,676 40,878
CURRENT ASSETS
Inventories ............................... 101,426 111,921
Trade receivables .......................... 9 40,310 41,901
Prepayments, deposits and other receivables ....... 23,582 27,448
Non-pledged time deposits ................... — 33,204
Pledged time deposits ....................... 21,811 —
Cash and cash equivalents .................... 118,069 66,075
Total current assets ........................ 305,198 280,549
CURRENT LIABILITIES
Trade payables ............................ 10 23,418 35,462
Other payables and accruals .................. 14,750 12,704
Contract liabilities ......................... 6,537 7,761
Interest-bearing bank borrowings ............... 11 96,472 40,030
Lease liabilities ........................... 931 2,559
Provision ................................ 3,720 4,460
Redemption liabilities ....................... 38,776 35,911
Total current liabilities ..................... 184,604 138,887
NET CURRENT ASSETS ................... 120,594 141,662
TOTAL ASSETS LESS CURRENT LIABILITIES . 131,270 182,540
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings ............... 11 19,600 19,696
Lease liabilities ........................... 40 971
Deferred income ........................... 2,661 —
Total non-current liabilities .................. 22,301 20,667
Net assets ............................... 109,969 161,873
EQUITY
Equity attributable to owners of the parent .....
Paid-in capital/Share capital .................. 100,000 26,122
Reserves ................................ 9,969 135,751
Total equity .............................. 109,969 161,873
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-3 –


--- page 394 ---
NOTES TO THE PRELIMINARY FINANCIAL INFORMATION
1. BASIS OF PREPARATION
This Preliminary Financial Information has been prepared in accordance with the applicable
disclosure requirements of Appendix D2 to the Rules Governing the Listing of Securities on the Main
Board of The Stock Exchange of Hong Kong Limited in relation to annual results announcements.
The consolidated financial statements has been prepared in accordance with IFRS Accounting
Standards as issued by the International Accounting Standards Board (the “ IASB”), which comprise all
standards and interpretations approved by the IASB. They have been prepared under the historical cost
convention, except for certain financial instruments which have been measured at fair value. The
consolidated financial statements are presented in Renminbi (“ RMB”) and all values are rounded to the
nearest thousand except when otherwise indicated.
The Preliminary Financial Information does not include all of the information required for a
complete set of financial statements prepared in accordance with the IFRS Accounting Standards.
Basis of consolidation
The consolidated financial statements includes the financial statements of the Company and its
subsidiaries for the year ended 31 December 2025. A subsidiary is an entity (including a structured
entity), directly or indirectly, controlled by the Company. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement with the investee and has the ability to
affect those returns through its power over the investee (i.e., existing rights that give the Group the
current ability to direct the relevant activities of the investee).
Generally, there is a presumption that a majority of voting rights results in control. When the
Company has, directly or indirectly, less than a majority of the voting or similar rights of an investee,
the Group considers all relevant facts and circumstances in assessing whether it has power over an
investee, including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group’s voting rights and potential voting rights.
The financial statements of the subsidiaries are prepared for the same reporting period as the
Company, using consistent accounting policies. The results of subsidiaries are consolidated from the
date on which the Group obtains control, and continue to be consolidated until the date that such
control ceases.
Profit or loss and each component of other comprehensive income are attributed to the owners of
the parent of the Group and to the non-controlling interests, even if this results in the non-controlling
interests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and
cash flows relating to transactions between members of the Group are eliminated in full on
consolidation.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control described above. A change in the
ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including
goodwill), liabilities, any non-controlling interest and the exchange fluctuation reserve; and recognises
the fair value of any investment retained and any resulting surplus or deficit in profit or loss. The
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-4 –


--- page 395 ---
Group’s share of components previously recognised in other comprehensive income is reclassified to
profit or loss or retained profits, as appropriate, on the same basis as would be required if the Group
had directly disposed of the related assets or liabilities.
2. ISSUED BUT NOT YET EFFECTIVE IFRS ACCOUNTING STANDARDS
The Group has not applied the following new and amended IFRS Accounting Standards, that have
been issued but are not yet effective, in the consolidated financial statements for the year ended 31
December 2025. The Group intends to apply these new and amended IFRS Accounting Standards, if
applicable, when they become effective.
IFRS 18 Presentation and Disclosure in Financial Statements
2
IFRS 19 and its amendments Subsidiaries without Public Accountability: Disclosures 2
Amendments to IFRS 9 and IFRS 7 Amendments to the Classification and Measurement of
Financial Instruments 1
Amendments to IFRS 9 and IFRS 7 Contracts Referencing Nature-dependent Electricity 1
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its
Associate or Joint V enture 3
Amendments to IAS 21 Translation to a Hyperinflationary Presentation Currency 2
Annual Improvements to IFRS
Accounting Standards — V olume 11
Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS10 and
IAS 7 1
1 Effective for annual periods beginning on or after 1 January 2026
2 Effective for annual/reporting periods beginning on or after 1 January 2027
3 No mandatory effective date yet determined but available for adoption
The Group is in the process of making an assessment of the impact of these new and amended
IFRS Accounting Standards upon initial application. Further information about those IFRS Accounting
Standards that are expected to be applicable to the Group is described below.
IFRS 18 replaces IAS 1 Presentation of Financial Statements . While a number of sections have
been brought forward from IAS 1 with limited changes, IFRS 18 introduces new requirements for
presentation within the statement of profit or loss, including specified totals and subtotals. Entities are
required to classify all income and expenses within the statement of profit or loss into one of the five
categories: operating, investing, financing, income taxes and discontinued operations and to present two
new defined subtotals. It also requires disclosures about management-defined performance measures in
a single note and introduces enhanced requirements on the grouping (aggregation and disaggregation)
and the location of information in both the primary financial statements and the notes. Some
requirements previously included in IAS 1 are moved to IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors , which is renamed as IAS 8 Basis of Preparation of Financial
Statements . As a consequence of the issuance of IFRS 18, limited, but widely applicable, amendments
are made to IAS 7 Statement of Cash Flows , IAS 33 Earnings per Share and IAS 34 Interim Financial
Reporting . In addition, there are minor consequential amendments to other IFRS Accounting Standards.
IFRS 18 and the consequential amendments to other IFRS Accounting Standards are effective for
annual periods beginning on or after 1 January 2027 with earlier application permitted. Retrospective
application is required. Based on a preliminary assessment, the adoption of IFRS 18 is not expected to
have any impact on the Group’s results of operations and financial position but has impact on the
presentation and disclosure of the Group’s financial statements.
The Group has already commenced an assessment of the impact of other new and amended IFRS
Accounting Standards, which are relevant to the Group’s operations. According to the preliminary
assessment made by the directors, no significant impact on the financial performance and financial
position of the Group is expected when these new and amended IFRS Accounting Standards become
effective.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-5 –


--- page 396 ---
3. OPERATING SEGMENT INFORMATION
Operating segment information
The board of directors reviews the consolidated results of the Group when making decisions about
resource allocation and assessing the performance of the Group. The board of directors considers that
the Group operates in one business segment and the measurement of segment results is based on the
profit from operations as presented in the consolidated statements of profit or loss and the consolidated
statements of comprehensive income.
Geographical information
(a) Revenue from external customers
Y ear ended 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
PRC (including Hong Kong) ........................... 365,703 355,195
The revenue information above is based on the locations of the customers.
(b) Non-current assets
Almost all of the Group’s non-current assets were located in Chinese mainland.
Information about major customers
External customers from which the revenue individually amounted to over 10% of total revenue of
the Group for the years ended 31 December 2024 and 2025 were as follows:
Y ear ended 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Customer D ....................................... 111,129 107,685
Customer E ....................................... 67,531 67,442
Customer G ....................................... * 66,342
Customer H ....................................... 87,860 *
* Less than 10% of the Group’s revenue
The disclosure regarding the aforementioned major customers is consistent with the information
provided in the prospectus and should be read in conjunction with the prospectus.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-6 –


--- page 397 ---
4. REVENUE, OTHER INCOME AND GAINS
An analysis of revenue is as follows:
Y ear ended 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Revenue from contracts with customers ................... 365,703 355,195
Revenue from contracts with customers
(a) Disaggregated revenue information
Y ear ended 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Types of goods or services
Low-power audio chips ............................... 329,496 322,908
Mid/high-power audio chips ........................... 26,548 26,707
Haptic drivers ...................................... 8,572 5,332
Others ........................................... 1,087 248
Total ............................................ 365,703 355,195
Timing of revenue recognition
Transferred at a point in time .......................... 365,703 355,195
The following table shows the amounts of revenue recognised in the reporting periods that were
included in the contract liabilities at the beginning of each of the reporting periods and recognised from
performance obligations satisfied in previous periods:
Y ear ended 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Revenue recognised that was included in contract liabilities at
the beginning of the reporting period ................... 7,761 4,747
(b) Performance obligations
Information about the Group’s performance obligations is summarised below:
Sales of power amplifier audio chips and other chip products
The Group offers low-power audio chips, mid/high-power audio chips, as well as other chip
products, including power management chips. The performance obligation is satisfied upon delivery to
the agreed-upon locations in accordance with the contracts, and when the customers confirmed the
acceptance of the products. The payment is normally received in advance, except for certain customers
with established creditworthiness and a long-standing business relationship, where payment is generally
due within 30 to 90 days from the invoice date.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-7 –


--- page 398 ---
All amounts of transaction prices allocated to the performance obligations of sales of goods or
services are expected to be recognised as revenue within one year. The Group has no significant
unsatisfied performance obligations arising from revenue contracts that have an original expected
duration more than one year, thus management applied practical expedient under IFRS 15 and is not
disclosing the aggregate amount of the transaction prices allocated to the performance obligations that
are unsatisfied or partially satisfied at the end of each reporting period.
An analysis of other income and gains is as follows:
Y ear ended 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Other income
Government grants .................................. 2,689 723
Bank interest income ................................ 1,845 4,044
Investment income from structured deposits ................ —2
Others ........................................... 133 —
Total other income .................................. 4,667 4,769
Gains
Foreign exchange differences, net ....................... — 4,813
Total other income and gains ........................... 4,667 9,582
5. LOSS BEFORE TAX
The Group’s loss before tax is arrived at after charging/(crediting):
Y ear ended 31 December
Notes 2025 2024
RMB’000 RMB’000
(unaudited)
Cost of goods and services* .................. 287,606 306,007
Depreciation of property, plant and equipment ..... 5,592 5,669
Depreciation of right-of-use assets .............. 2,571 2,741
Amortisation of other intangible assets ........... 73 48
Research and development costs* .............. 69,014 68,060
Listing expenses ........................... 18,766 —
Foreign exchange differences, net .............. 3,239 (4,813)
Investment income from structured deposits ....... 4 — (2)
Bank interest income ....................... 4 (1,845) (4,044)
(Reversal of)/ impairment losses on financial assets,
net ................................... (16) 116
Impairment losses on inventories ............... 2,134 2,632
Expenses relating to short-term leases and low-value
assets ................................. 286 149
Employee benefit expense (including directors’ and
chief executive’s remuneration):
Wages, salaries and other allowances .......... 59,038 58,320
Pension scheme contributions and social welfare .. 12,062 9,971
Share-based payments ..................... 7,094 7,843
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-8 –


--- page 399 ---
* The depreciation of property, plant and equipment, the depreciation of right-of-use assets and the amortisation of other
intangible assets related to manufacturing and research and development for the reporting periods are included in
“Depreciation of property, plant and equipment”, “Depreciation of right-of-use assets” and “Amortisation of other
intangible assets”, respectively. The labour costs related to the manufacturing and research and development for the
reporting periods are included in “Employee benefit expense”.
6. INCOME TAX
The Group is subject to income tax on an entity basis on profits arising in or derived from the
countries/jurisdictions in which members of the Group are domiciled and/or operate.
Chinese mainland
The subsidiaries established in Chinese mainland are subject to tax at the statutory rate of 25% on
the taxable profits determined in accordance with the PRC Corporate Income Tax Law which became
effective on 1 January 2008, except for these subject to tax preferential set out below:
Shanghai FourSemi Semiconductor Co., Ltd. obtained its “High and New Technology Enterprise”
qualification on 14 December 2022. The Company is currently in the process of renewing its “High and
New Technology Enterprise” qualification. The Company’s application for the renewal of “High and
New Technology Enterprise” qualification has successfully passed the review and is now in the public
announcement phase. Based on management’s assessment, the Company meets the qualifying criteria,
so it was entitled to the preferential tax rate of 15% during the reporting periods.
Certain subsidiary met the criteria as small-scaled and minimal profit enterprise with its annual
taxable income less than RMB3,000,000, its actual income amount subject to tax was calculated at 25%
of its annual taxable income. The aforesaid calculated taxable income of this subsidiary was entitled to
a reduced corporate income tax rate of 20% for the period from 1 January 2023 and expiring on 31
December 2027.
Hong Kong
The subsidiary incorporated in Hong Kong is subject to Hong Kong profits tax at the rate of
8.25% for taxable income not exceeding HKD2,000,000, and 16.5% for taxable income exceeding
HK$2,000,000 on any estimated assessable profits arising in Hong Kong during the reporting periods.
No provision for Hong Kong profits tax has been made as the Group had no assessable profits derived
from or earned in Hong Kong during the reporting periods.
Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the
jurisdictions in which the Group operates.
Y ear ended 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Current income tax .................................. ——
Deferred tax expense ................................ ——
Total tax expense for the year .......................... ——
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-9 –


--- page 400 ---
A reconciliation of the tax expense applicable to loss before tax at the statutory rates for the
jurisdiction in which the Company and its subsidiaries are domiciled and/or operate to the tax expense
at the effective tax rate, is as follows:
Y ear ended 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Loss before tax ..................................... (59,167) (56,844)
Tax at the statutory tax rates of each entities’ jurisdictions ..... (14,578) (13,858)
Effect of preferential tax rates .......................... 6,358 5,899
Expenses not deductible for tax (a) ...................... 1,948 1,935
Additional deductible allowance for qualified research and
development costs (b) .............................. (8,926) (8,617)
Deductible temporary differences not recognised ............ 167 680
Deductible temporary differences utilised from previous years ... (416) (455)
Tax losses not recognised ............................. 15,447 14,416
Tax expense at the Group’s effective tax rate ............... ——
(a) Tax effect of non-deductible expenses mainly represent the changes in the carrying amounts of redemption liabilities,
share-based payments expenses and certain other costs and expenses, which all are not deductible in accordance with
relevant tax regulations in the PRC.
(b) Additional deductible allowance was for qualified research and development costs. According to the relevant laws and
regulations promulgated by the State Taxation Administration of the Chinese mainland, enterprises engaging in research
and development activities are entitled to claim 200% of their research and development costs so incurred as tax deductible
expenses when determining their assessable profits for the reporting periods.
The Group had accumulated tax losses arising in Chinese mainland of RMB523,186,000 and
RMB418,221,000 as at 31 December 2025 and 2024, respectively, that would expire in one to ten years
for offsetting against future taxable profits. The Group had accumulated tax losses in Hong Kong of
RMB33,897,000 and RMB32,155,000 in aggregate as at 31 December 2025 and 2024, respectively,
which can be carried forward indefinitely to offset against future taxable profits of the entity in which
the losses were incurred. Deferred tax assets have not been recognised with respect to tax losses and
deductible temporary differences for the Company and certain subsidiaries as it is not considered
probable that taxable profits will be available against which the tax losses can be utilised.
7. DIVIDENDS
No dividends have been paid or declared by the Company during the year ended 31 December
2025 (2024: Nil).
8. LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE
PARENT
The basic loss per share is calculated by dividing the loss attributable to ordinary equity holders
of the Company by the weighted average number of ordinary shares outstanding during the year. The
weighted average number of ordinary shares in issue was determined assuming that the paid-in capital
had been fully converted into share capital at the same conversion ratio of 1:3.83 as upon the
Company’s transformation into a joint-stock company on 12 June 2025.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-10 –


--- page 401 ---
Y ear ended 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Loss
Loss for the year attributable to ordinary equity shareholders of
the Company ..................................... (59,167) (56,844)
Shares
Issued ordinary shares at 1 January ...................... 100,000,000 100,000,000
Effect of ordinary shares of contribution from shareholders ..... ——
Weighted average number of ordinary shares ............... 100,000,000 100,000,000
Loss per share
Basic and diluted (RMB) ............................. (0.59) (0.57)
No adjustment has been made to the basic loss per share amounts presented during the years
ended 31 December 2024 and 2025 as the impact of the potential ordinary shares had an anti-dilutive
effect on the basic loss per share amounts presented.
9. TRADE RECEIV ABLES
As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Trade receivables ................................... 40,718 42,325
Less: Impairment losses .............................. (408) (424)
Net carrying amount ................................. 40,310 41,901
The Group provides credit terms to certain customers with satisfied creditworthiness and
long-term relationship. The credit period is generally around 30 to 90 days. Each customer has a
maximum credit limit. The Group seeks to maintain strict control over its outstanding receivables and
has a credit control department to minimise credit risk. Overdue balances are reviewed regularly by
senior management. The Group does not hold any collateral or other credit enhancements over its trade
receivable balances. Trade receivables are non-interest-bearing. As with other customers, the Group
normally demands payment in advance.
An ageing analysis of the Group’s trade receivables, based on the past due information and net of
loss allowance, as at the end of each of the reporting periods is as follows:
As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Within 3 months .................................... 39,557 41,901
3 to 6 months ...................................... 753 —
Total ............................................ 40,310 41,901
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-11 –


--- page 402 ---
10. TRADE PAYABLES
An ageing analysis of the trade payables as at the end of reporting periods, based on the invoice
date, is as follows:
As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Within 1 year ...................................... 23,226 34,748
1 to 2 years ....................................... 112 641
2 to 3 years ....................................... 80 73
Total ............................................ 23,418 35,462
The trade payables are non-interest-bearing and are normally settled within 30 to 60 days upon
receipt of the V AT invoice.
11. INTEREST-BEARING BANK BORROWINGS
As at 31 December 2025 As at 31 December 2024
Effective
interest rate
(%) Maturity RMB’000
Effective
interest rate
(%) Maturity RMB’000
Current
Bank loans — unsecured ......... 2.20−2.85 2026 66,045 2.60 2025 20,014
Bank loans — secured .......... 2.60−2.85 2026 19,974 2.85 2025 20,016
Current portion of long-term bank
loans — unsecured ........... 2.45−2.70 2026 10,453 — — —
Total current ................ 96,472 40,030
Non-current
Bank loans -unsecured .......... 2.70 2027 19,600 3.45 2026 19,696
Total ..................... 116,072 59,726
As at 31 December
2025 2024
RMB‘000 RMB‘000
(unaudited)
Analysed into:
Bank loans repayable:
Within one year ................................. 96,472 40,030
In the second year ............................... 19,600 19,696
Total ............................................ 116,072 59,726
Certain of the Group’s interest-bearing bank borrowings are secured by the pledges of the Group’s
time deposits with carrying values at 31 December 2024 and 2025 of approximately RMB21,197,000
and RMB21,811,000.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-12 –


--- page 403 ---
12. CONTINGENT LIABILITIES
Since August 2023, the Company had been a defendant in a patent dispute lawsuit filed by a party
alleging that the Company infringed its invention patent in Chinese mainland. The Company had
obtained an appraisal report issued by an authoritative judicial appraisal center. The report concludes
that the technical features of implicated products are neither identical nor equivalent to those covered
by the plaintiff’s patent. The Company’s PRC litigation advisor is of the view that there are reasonable
grounds to believe the court would dismiss the claims on the basis that the said chip products should
not fall under the protection of such invention patent. The directors, based on the advice from
Company’s PRC litigation advisor, believe that the Company has a valid defense against the allegation
and, accordingly, the Group has not provided for any claim arising from the litigation, other than the
related legal and other costs.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Business Review
We are a provider of power amplifier audio chips and haptic drivers in China. We specialize in the
design of low-power audio chips, mid/high-power audio chips and haptic drivers under a fabless model
to offer a wide array of solutions for emerging application scenarios in high-growth industries. Our
portfolio of products empowers high-growth industries including consumer electronics and intelligent
vehicles. We first introduced our power amplifier audio chip products for portable consumer electronics
to optimize audio, create effects and protect speakers using our algorithms. With the success of our first
power amplifier audio chip products, we expanded our product portfolio by adding a more powerful
line of power amplifier audio chip products that are primarily for larger electronics and intelligent
vehicles and a new line of chips that process haptic feedback to provide users with a diverse way of
interacting with their devices. Our products primarily consist of power amplifier audio chips. Power
amplifier audio chips are integrated circuit modules based on mixed-signal design that incorporate
some, or all of the following characteristics, including built-in or externally paired audio algorithms,
digital input interfaces and integrated sound processing modules. Power amplifier chips leverage power
control algorithms and audio processing algorithms to efficiently process audio signals and optimize
output performance. They deliver low power consumption, high integration density and capabilities for
intelligent control, catering to customized requirements of downstream industries.
Future Plans and Prospects
We intend to pursue the following key strategies to grow our business sustainably and maintain
our market position: (1) strengthening research and development in power amplifier audio chips, (2)
diversifying product portfolio and broaden customer base in key application scenarios, (3) building an
ATE testing platform to strengthen supply chain stability, (4) fortifying our sales network to expand
global reach, and (5) pursuing strategic alliances, investments and acquisitions to integrate industry
resources.
Our Directors confirm that there has been no material adverse change in the financial or trading
position or prospects of our Group since December 31, 2025 and up to the date of this document.
Discussion of Certain Key Items of the Consolidated Statement of Profit or Loss
The following table sets forth summary of our consolidated profit or loss items for the years
indicated.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-13 –


--- page 404 ---
Y ear ended 31 December
2025 2024
RMB’000 RMB’000
REVENUE ....................................... 365,703 355,195
Cost of sales
Cost of goods and services .......................... (287,606) (306,007)
Impairment losses on inventories ..................... (2,134) (2,632)
Gross profit ...................................... 75,963 46,556
Other income and gains .............................. 4,667 9,582
Selling and marketing expenses ........................ (19,640) (20,847)
Administrative expenses .............................. (42,326) (19,673)
Research and development costs ........................ (69,014) (68,060)
Reversal of/(impairment losses) on financial assets, net ....... 16 (116)
Other expenses .................................... (3,317) (226)
Finance costs ..................................... (2,651) (1,393)
Changes in the carrying amounts of redemption liabilities ..... (2,865) (2,667)
LOSS BEFORE TAX ............................... (59,167) (56,844)
Income tax expense ................................. ——
LOSS FOR THE YEAR ............................. (59,167) (56,844)
Revenue
Our revenue remained relatively stable at RMB355.2 million in 2024 and RMB365.7 million in
2025, primarily due to the reasons below.
 Low-power audio chips . Our revenue from low-power audio chips increased slightly from
RMB322.9 million in 2024 to RMB329.5 million in 2025, primarily due to an increase in
revenue from adaptive power control audio chips from RMB172.3 million in 2024 to
RMB184.7 million in 2025.
 Mid/high-power audio chips . Our revenue from mid/high-power audio chips decreased
slightly from RMB26.7 million in 2024 to RMB26.5 million in 2025, primarily due to a
decrease in revenue from our FS2105 series products resulting from a deliberate strategic
reallocation of resources towards the R&D and promotion of newer models.
 Haptic drivers . Our revenue from haptic drivers increased by 60.8% from RMB5.3 million
in 2024 to RMB8.6 million in 2025, primarily because the increased sales volume as we
strategically directed more resources to promoting new haptic driver models, such as the
FS3002 series, to expand our portfolio of available haptic driver models.
Cost of sales
Our cost of sales decreased by 6.1% from RMB308.6 million in 2024 to RMB289.7 million in
2025, which was generally due to the improved economies of scale, reductions in chip size achieved
through sustained research and development and the lowered market procurement cost, driven by
intense price competition in the mature-process node segment.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-14 –


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Gross profit and Gross profit margin
Our gross profit increased by 63.2% from RMB46.6 million in 2024 to RMB76.0 million in 2025,
primarily due to revenue growth outpacing the increase in cost of sales, supported by our enhanced
market recognition, increasingly diversified product portfolio, and a product iteration cycle that enables
the introduction of products with a lower cost structure. Our gross profit margin increased from 13.1%
in 2024 to 20.8% in 2025, primarily driven by the improved economies of scale and reductions in chip
size, as well as effective cost control, which reduced raw material prices and processing fees, coupled
with a favorable shift in product metrics towards higher-margin PA audio chip products.
 Low-power audio chips . Our gross profit from low-power audio chips increased by 66.8%
from RMB40.9 million in 2024 to RMB68.2 million in 2025, primarily due to a reduction in
the cost structure of our adaptive power control audio chips achieved through product
iteration, declining raw material and procurement costs, the realization of economies of scale
as business expanded, combined with a higher revenue contribution from the higher-margin
PA audio chip product category, collectively driving an increase in the overall gross profit
margin for our low-power audio chips.
 Mid/high-power audio chips . Our gross profit from mid/high-power audio chips increased
by 42.2% from RMB4.8 million in 2024 to RMB6.8 million in 2025, primarily due to higher
sales volume and consequently increased gross profit from the FS2105 series.
 Haptic drivers . Our gross profit for haptic drivers decreased slightly from RMB3.5 million
in 2024 to RMB2.6 million in 2025.
Other income and gains
Our other income and gains decreased by 51.3% from RMB9.6 million in 2024 to RMB4.7 million
in 2025, primarily due to a foreign exchange gain of RMB4.8 million in 2024, compared to a foreign
exchange gain of nil in 2025, as a result of exchange rate fluctuation.
Selling and marketing expenses
Our selling and marketing expenses remained relatively stable at RMB20.8 million in 2024 and
RMB19.6 million in 2025, primarily due to our consistent marketing headcount.
Administrative expenses
Our administrative expenses increased significantly from RMB19.7 million in 2024 and RMB42.3
million in 2025, primarily driven by higher listing-related expenses, an increase in employee benefit
expenses and additional professional service fees. The professional fees included costs of our
shareholding restructuring and recruitment services.
Research and development costs
Our research and development costs remained relatively stable at RMB68.1 million in 2024 and
RMB69.0 million in 2025, primarily due to the effective management and oversight of R&D projects,
strict cost control measures, and the retention of key R&D personnel.
Impairment losses on financial assets, net
In 2024, we recognized net impairment losses on financial assets of RMB116 thousand. In 2025,
we recorded a net reversal of impairment losses of RMB16 thousand, primarily due to the enhanced
customer credit management and the subsequent recovery of previously impaired receivables.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-15 –


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Other expenses
Our other expenses increased significantly from RMB0.2 million in 2024 to RMB3.3 million in
2025, primarily due to a net foreign exchange loss of RMB3.2 million recognized in other expenses in
2025, compared to a net gain of RMB4.8 million recognized in other income and gains in 2024, due to
exchange rate fluctuations.
Finance costs
Our finance costs increased from RMB1.4 million in 2024 to RMB2.7 million in 2025, primarily
due to the increased bank borrowing to support our business operations as we expanded our business
scale.
Changes in the carrying amounts of redemption liabilities
In 2024 and 2025, we recognized changes in the carrying amounts of redemption liabilities of
RMB2.7 million and RMB2.9 million, respectively, relating to the accrued interests on a financial
liability of RMB30.0 million arising from one of our Pre-IPO Investors’ redemption rights. Upon the
Listing, we expect that our redemption liabilities will automatically be re-classified to equity and
therefore no more changes in carrying amount of the redemption liabilities will be recognized on our
consolidated statements of profit or loss.
Income tax expense
We did not recognize any income tax expense in 2024 and 2025.
Loss for the period
As a result of the foregoing, our loss for the period increased by 4.1% from RMB56.8 million in
2024 and RMB59.2 million in 2025.
Discussion of Certain Key Items of the Consolidated Statement of Financial Position
Net Current Assets
The following table sets forth our current assets and current liabilities as of the dates indicated:
As of December 31,
2025 2024
RMB’000 RMB’000
CURRENT ASSETS
Inventories ....................................... 101,426 111,921
Trade receivables ................................... 40,310 41,901
Prepayments, deposits and other receivables ............... 23,582 27,448
Non-pledged time deposits ............................ — 33,204
Pledged time deposits ............................... 21,811 —
Cash and cash equivalents ............................ 118,069 66,075
Total current assets ................................ 305,198 280,549
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-16 –


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As of December 31,
2025 2024
RMB’000 RMB’000
CURRENT LIABILITIES
Trade payables .................................... 23,418 35,462
Other payables and accruals ........................... 14,750 12,704
Contract liabilities .................................. 6,537 7,761
Interest-bearing bank borrowings ....................... 96,472 40,030
Lease liabilities .................................... 931 2,559
Provision ........................................ 3,720 4,460
Redemption liabilities ............................... 38,776 35,911
Total current liabilities ............................. 184,604 138,887
NET CURRENT ASSETS ............................ 120,594 141,662
Our net current assets decreased from RMB141.7 million as of December 31, 2024 to RMB120.6
million as of December 31, 2025, primarily due to the increased operating costs associated with our
R&D and administrative activities.
Cash and Cash Equivalent, Time Deposits, and Pledged Deposits
As of December 31,
2025 2024
RMB’000 RMB’000
Cash and bank balances .............................. 139,880 120,476
Less: Non-pledged time deposits with original maturity of over
one year and will mature within one year* .............. — (33,204)
Pledged time deposits with original maturity of more than one
year and will mature within one year*** ................ (21,811) —
Pledged time deposits with original maturity of more than one
year** ......................................... — (21,197)
Cash and cash equivalents ............................ 118,069 66,075
* Short-term bank deposits were deposits with original maturity over one year and will mature within one year.
** Long-term bank deposits were deposits with original maturity over one year.
*** As at 31 December 2025, the Group’s time deposits were pledged for interest-bearing bank borrowings amounting to
RMB21,811,000. (2024: nil)
Trade Payables
An ageing analysis of the trade payables as at the end of reporting periods, based on the invoice
date, is as follows:
As of December 31,
2025 2024
RMB’000 RMB’000
Within 1 year ...................................... 23,226 34,748
1 to 2 years ....................................... 112 641
2 to 3 years ....................................... 80 73
Total ............................................ 23,418 35,462
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-17 –


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The trade payables are non-interest-bearing and are normally settled within 30 to 60 days upon
receipt of the V AT invoice. Our trade payable decreased from RMB35.5 million in 2024 to RMB23.4
million in 2025, primarily due to our enhanced inventory control and the subsequent decreased
procurement.
Indebtedness
The following table sets forth the breakdown of our indebtedness as of the dates indicated:
As of December 31,
2024 2025
RMB’000 RMB’000
Current
Interest-bearing bank borrowings ....................... 40,030 96,472
Lease liabilities .................................... 2,559 931
Redemption liabilities ............................... 35,911 38,776
Non-current
Lease liabilities .................................... 971 40
Interest-bearing bank borrowings ........................ 19,696 19,600
Total ............................................ 99,167 155,819
Key Financial Ratio
The following table sets forth the current ratio as of the dates indicated:
As of December 31,
2024 2025
Current ratio (1) .................................... 2.0 1.7
Quick ratio (2) ...................................... 1.2 1.1
Gearing ratio (3) ..................................... 61.3% 141.7%
Note:
(1) Current ratio equals current assets divided by current liabilities as of the same date.
(2) The calculation of quick ratio is based on current assets less inventories divided by current liabilities as of period end.
(3) The calculation of gearing ratio is based on our debt (being our interest-bearing bank borrowings, lease liabilities and
redemption liabilities) divided by our total equity as of the respective dates and multiplied by 100%.
Our current ratio decreased from 2.0 as of December 31, 2024 to 1.7 as of December 31, 2025,
mainly due to an increase in our current liabilities from RMB138.9 million in 2024 to RMB184.6
million in 2025, which was in turn primarily due to an increase of current interest-bearing bank
borrowings from RMB40.0 million in 2024 to RMB96.5 million in 2025, as a result of our financing
activities.
DISCLOSURE ABOUT MARKET RISK
See “Financial Information—Financial Risk Disclosure” in this prospectus for further information.
CODE ON CORPORATE GOVERNANCE PRACTICES
Since we were not yet listed on the Stock Exchange during the year ended December 31, 2025,
the Corporate Governance Code set forth in Appendix C1 to the Listing Rules was not applicable to us
during such period under review. After the Listing, we will comply with all the code provisions set
forth in the Corporate Governance Code.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-18 –


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REVIEW OF OUR PRELIMINARY FINANCIAL INFORMATION
The unaudited financial information in respect of our consolidated statement of financial position,
consolidated statement of profit or loss and consolidated statement of comprehensive income and the
related notes thereto for the year ended December 31, 2025 as set out in the 2025 Preliminary Financial
Information above have been agreed by the Reporting Accountants to the amounts set out in our draft
consolidated financial statements for the year ended December 31, 2025, following their work under
Practice Note 730 “Guidance for Auditors Regarding Preliminary Announcement of Annual Results”
issued by the Hong Kong Institute of Certified Public Accountants. The work performed by the
Reporting Accountants in this respect did not constitute an assurance engagement in accordance with
Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong
Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public
Accountants and consequently no assurance has been expressed by the Reporting Accountants on the
Preliminary Financial Information.
PURCHASE, SALE OR REDEMPTION OF OUR COMPANY’S SHARES
Since we were not yet listed on the Stock Exchange during the year ended December 31, 2025,
this disclosure requirement is not applicable to us.
APPENDIX IIB UNAUDITED PRELIMINARY FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2025
– IIB-19 –


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This appendix contains a summary of the main provision of the Articles of Association of our
Company adopted on June 17, 2025, which will take effect from the date of the Listing of H Shares on
the Stock Exchange. The main purpose of this appendix is to provide potential investors with an
overview of the Articles of Association of our Company, so it may not contain all the information that is
important to potential investors.
SHARES AND REGISTERED CAPITAL
The shares of our Company shall be issued in a transparent, fair and equal manner, and each share
shall rank pari passu with other shares of the same class. Shares of the same class issued at the same
time shall be issued with the same conditions and price per share; any individual shall pay the same
price per share for the subscription of shares.
The domestic unlisted shares issued by our Company shall be registered and deposited at the
domestic securities registration and settlement institution in a centralized manner. H shares issued by
our Company may be kept by custodian companies in accordance with laws, securities regulatory rules
and requirements of securities registration and depository of the place where our Company’s shares are
listed.
All the shares issued by our Company are denominated in Renminbi.
SHARE ADDITIONS, REPURCHASES AND TRANSFERS
Share increase or decrease
Our Company may, pursuant to a resolution passed by a general meeting of shareholders, adopt
the following methods to increase its capital according to its operation and development needs and in
compliance with the provisions of laws and regulations:
(1) share issuance to unspecified parties;
(2) share issuance to specified parties;
(3) distribution of bonus shares to existing shareholders;
(4) conversion of the common reserve fund into additional share capital;
(5) other means as stipulated by laws and administrative regulations and approved by the
relevant regulatory authorities.
When our Company reduces its registered capital, it will prepare a balance sheet and an inventory
of assets. Our Company shall notify its creditors within ten days from the date of making the decision
in a general meeting of shareholders to reduce the registered capital, and make an announcement in
newspapers or the National Enterprise Credit Information Publicity System within 30 days. The
creditors have the right to demand our Company to pay off its debts or provide corresponding
guarantees within 30 days from the date of receipt of the notice, or within 45 days from the date of the
announcement if it has not received the notice.
Share repurchase
Our Company shall not acquire our Company’s shares except in any of the following
circumstances:
(1) reduce the registered capital of our Company;
(2) merger with other companies which hold shares of our Company;
(3) use shares in employee shareholding plans or equity incentives;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
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(4) the shareholder requests our Company to purchase its shares due to objection to the
resolution on the merger or division of our Company made by the shareholders’ meeting;
(5) use the shares for conversion of corporate bonds issued by our Company that are convertible
into shares
(6) necessary for our Company to safeguard our Company’s value and shareholders’ interests;
(7) other circumstances permitted by laws, regulations and rules of the securities regulatory
authorities where our Company’s shares are listed.
Where our Company acquires our Company’s shares due to the circumstances specified in items
(3), (5) and (6) of the above, the acquisition shall be conducted through a public centralized
transactions. Where our Company acquires our Company’s shares due to the circumstances specified in
items (1) and (2) of the above, the acquisition shall be subject to a resolution of our shareholders’
meeting. Where our Company acquires our Company’s shares due to the circumstances specified in
items (3), (5) and (6) of the above, the acquisition shall be resolved by a meeting of the Board of
Directors attended by more than two-thirds of all directors according to the provisions of the Articles of
Association or as authorized by the shareholders’ meeting, provided that it complies with the applicable
securities regulatory rules of the place where our Company’s shares are listed. For the acquisition of
our Company’s shares, our Company shall perform its information disclosure obligation in accordance
with the laws, regulations and rules of the regulatory authorities where our Company’s shares are listed.
For the domestic unlisted shares, after our Company acquires the shares of our Company held by them
pursuant to the above provisions, such shares shall be canceled within ten days from the date of
acquisition in circumstance specified in (1); the shares shall be transferred or canceled within six
months in circumstances specified in (2) and (4); the total number of shares of our Company held by
our Company shall not exceed 10% of the total issued shares of our Company under the circumstances
specified in (3), (5) and (6) and shall be transferred or canceled within three years. Where the laws,
regulations and the securities regulatory authorities of the place where our Company’s shares are listed
have other provisions on the relevant matters involved in the repurchase of shares, such provisions shall
prevail.
Our Company may acquire the shares of our Company by public centralized transaction, or other
methods approved by the laws, administrative regulations, the CSRC and the securities regulatory
authorities where our Company’s shares are listed.
Transfer of shares
The shares issued by our Company prior to the public issuance of shares shall not be transferred
within one year from the date of listing of our Company’s shares on the stock exchange.
Directors and senior management of our Company shall report to our Company the shares of our
Company held by them and their changes. During their term of office as determined at the time of their
appointment, the shares transferred each year shall not exceed 25% of the total number of shares of the
same class they held in our Company. The shares of our Company shall not be transferred within one
year from the date of listing. The above-mentioned personnel shall not transfer the shares of our
Company held by them within half a year after their resignation.
SHAREHOLDERS AND SHAREHOLDERS’ MEETINGS
Shareholders
Our Company shall establish a register of shareholders on the basis of the certificates provided by
the securities depository and clearing institution, and the register of shareholders shall be a sufficient
evidence that shareholders hold the shares of our company. Shareholders shall enjoy rights and assume
obligations according to the class of shares they hold. Shareholders holding shares of the same class
shall enjoy the same rights and assume the same obligations.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-2 –


--- page 412 ---
Shareholders of our Company shall enjoy the following rights:
(1) being entitled to dividends and any other form of distribution of benefits based on the
number of shares held by them;
(2) requesting to hold, convene, preside over, attend or appoint a proxy to attend a shareholders’
meeting pursuant to the law and exercising the corresponding speaking and voting rights;
(3) supervising our Company’s business operations, proposing recommendations or raising
queries;
(4) transferring, donating or pledging shares held by them pursuant to the provisions of laws,
administrative regulations, departmental rules, Listing Rules and the Articles of Association;
(5) consulting and making copies of our Company’s Articles of Association, register of
shareholders, minutes of shareholders’ meetings, resolutions of board meetings and financial
accounting reports;
(6) participating in the distribution of residual property based on their shareholding upon
termination or liquidation of our Company;
(7) requesting by a shareholder who objects to the resolution on merger or division passed by
the shareholders’ meeting that our Company acquire his/her shares; and
(8) other rights stipulated by laws, administrative regulations, departmental rules, securities
regulatory rules of the place where our Company’s shares are listed, Listing Rules or
Articles of Association of our Company.
Shareholders who separately or aggregately hold 3% or more of our Company’s shares for 180
consecutive days or more may request to consult the accounting books and accounting vouchers of our
Company. Where a shareholder requests to access the accounting books or accounting vouchers of our
Company, it shall make a written request and state the purposes therefor. If our Company, with
justifiable reasons, considers that the shareholder’s request to consult the accounting books or
accounting vouchers has any improper purpose and may damage the lawful rights and interests of our
Company, it may refuse to grant inspection, and shall, within 15 days from the date of the shareholder’s
written request, give the shareholder a written reply and state the reasons therefor. If our Company
refuses to provide access, the shareholder may bring a lawsuit to a people’s court.
If the resolutions of the shareholders’ meeting or the Board of our Company violate the laws or
administrative regulations, shareholders shall have the right to request the People’s Court to determine
that the resolutions are invalid. If the procedures for convening the meetings of our shareholders’ or the
Board, or the way of voting violates the provisions of the laws, administrative regulations or the
Articles of Association of our Company, or the content of the resolutions violates the provisions of the
Articles of Association of our Company, shareholders shall have the right to request the People’s Court
to revoke the resolutions within 60 days from the date when the resolutions are made, unless there is
only a minor defect in the procedures for convening a shareholders’ general meeting or the Board
meeting or in the manner of voting thereat, which does not materially affect the resolution.
Shareholders of our Company have the following obligations:
(1) comply with laws, administrative regulations, securities regulatory rules of the place where
our Company’s shares are listed and the Articles of Association;
(2) pay for the shares in accordance with the shares subscribed for and the manner of share
purchase;
(3) shall not withdraw the shares except for the circumstances stipulated by laws and
regulations;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-3 –


--- page 413 ---
(4) not abuse the rights of shareholders to damage the interests of our Company or other
shareholders; not to abuse the independent status of our Company as a legal person and the
limited liability of shareholders to damage the interests of the creditors of our Company;
(5) other obligations stipulated by laws, administrative regulations, Listing Rules, the Articles of
Association and securities regulatory rules of the place where our Company’s shares are
listed.
General requirements of shareholders’ meetings
The shareholders’ meeting is an organization of authority of our Company and exercises the
following powers pursuant to the law:
(1) electing and replacing directors, and deciding the remuneration matters of the directors;
(2) deliberating and approving the reports of the Board of Directors;
(3) deliberating and approving the profit distribution plan and loss recovery plan of our
Company;
(4) making resolution on increasing or decreasing the registered capital of our Company;
(5) making resolution on the issuing of company bonds, and other securities and the plans for
their listing;
(6) making resolution on merger, division, dissolution, liquidation or changing the form of our
Company;
(7) amending the Articles of Association;
(8) making resolution on engagement and dismissal of the accountant firm that undertakes the
auditing of our Company;
(9) deliberating and approving the guarantees under Article 43 of the Articles of Association;
(10) deliberating purchases and sales of significant assets within a year exceeding 30% of the
most recently audited total assets of our Company;
(11) deliberating and approving changes in usage of raised funds;
(12) deliberating equity incentive plans and employee stock ownership plans;
(13) deliberating on matters concerning the acquisition of our Company’s shares that are required
to be considered by the shareholders’ meeting as stipulated by laws, administrative
regulations, the Articles of Association and securities regulatory rules of the place where our
Company’s shares are listed;
(14) deliberating on matters concerning connected transactions that are required to be considered
by the shareholders’ meeting as stipulated by laws, administrative regulations, the Articles of
Association and securities regulatory rules of the place where our Company’s shares are
listed; and
(15) deliberating other matters which shall be decided by the shareholders’ meeting as required
by the laws, administrative regulations, departmental rules, Listing Rules, the Articles of
Association and securities regulatory rules of the place where our Company’s shares are
listed.
A shareholders’ meeting may authorize the board of directors to decide on the issuance of
company bonds.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-4 –


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Unless otherwise provided in these Articles of Association, the functions and powers of the
shareholders’ meeting may not be exercised by the board of directors or other organization or individual
through authorization.
The following external guarantees by our Company must be deliberated and approved by the
shareholders’ meeting:
(1) any external guarantee by our Company or its subsidiary, whose total amount exceeds 50%
of the most recently audited net assets;
(2) any external guarantee by our Company, whose total amount exceeds 30% of the most
recently audited total assets;
(3) any guarantee to other persons provided by our Company within one year, whose total
amount exceeds 30% of the most recently audited total assets;
(4) any guarantee provided to guaranteed objects with asset-liability ratio exceeding 70%;
(5) any guarantee whose single amount exceeds 10% of the most recently audited net assets; or
(6) any guarantee for shareholders, actual controllers and their related parties; and
(7) other circumstances of guarantee which shall be approved by the shareholders’ meeting as
stipulated by laws, administrative regulations, departmental rules the Articles of Association
and securities regulatory rules of the place where our Company’s shares are listed.
Convening of shareholders’ meeting
The Board shall convene the shareholders’ meeting in accordance with the laws and the Chairman
of the Board of Directors shall preside over the meeting.
The independent directors have the right to propose in writing to the Board to convene an
extraordinary general meeting. With regard to the proposal made by the independent directors for
convening an extraordinary general meeting, the Board shall, in accordance with the laws,
administrative regulations and the Articles of Association, provide a written response indicating whether
it agree or disagree to convene the extraordinary general meeting within ten days upon receipt of the
proposal. Where the Board agrees to convene the extraordinary general meeting, a notice of convening
the shareholders’ meeting shall be issued within five days after the resolution of the Board is made.
Where the Board does not agree to convene the extraordinary general meeting, it shall provide reasons
and make an announcement.
The Audit Committee shall propose to the Board to convene an extraordinary general meeting in
writing. The Board shall, in accordance with the laws, administrative regulations and the Articles of
Association, provide a written response indicating whether it agree or disagree to convene the
extraordinary general meeting within ten days upon receipt of the proposal. Where the Board agrees to
convene the extraordinary general meeting, a notice of convening the shareholders’ meeting shall be
issued within five days after the resolution of the Board is made, and the changes to the original
proposal in the notice shall be agreed with the Audit Committee. Where the Board does not agree to
convene the extraordinary general meeting, or fails to give feedback within ten days after receiving the
proposal, the Board shall be deemed to be unable to perform or fail to perform its duties of convening
the shareholders’ meeting, and the Audit Committee may convene and preside over the meeting by
itself.
Shareholders who individually or collectively hold more than 10% of our Company’s shares shall
make a request in writing to the Board to convene an extraordinary general meeting. The Board shall,
in accordance with the provisions of laws, administrative regulations and the Articles of Association,
provide a written response indicating whether it agree or disagree to convene the extraordinary general
meeting within ten days upon receipt of the request. Where the Board agrees to convene the
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-5 –


--- page 415 ---
extraordinary general meeting, a notice of convening the shareholders’ meeting shall be issued within
five days after the resolution of the Board is made, and the changes to the original request in the notice
shall be agreed with relevant shareholders. Where the Board does not agree to convene the
extraordinary general meeting, or fails to give feedback within ten days after receiving the request,
shareholders individually or collectively holding more than 10% of our Company’s shares have the
right to propose to the Audit Committee to convene an extraordinary general meeting in writing.
Where the Audit Committee agrees to convene an extraordinary general meeting, it shall issue a
notice to convene the shareholders’ meeting within five days of receiving the request, and the changes
to the original request in the notice shall be agreed with relevant shareholders. Where the Audit
Committee fails to issue a notice of the shareholders’ meeting within the prescribed period, the Audit
Committee shall be deemed to not convene or preside over the shareholders’ meeting, and the
shareholders who individually or collectively hold more than 10% of our Company’s shares for more
than 90 consecutive days may convene and preside over the meeting on their own.
Notice of shareholders’ meeting
The convener will notify shareholders by announcement 20 days before the annual shareholders’
meeting, and for the extraordinary shareholders’ meeting, shareholders will be notified by
announcement 15 days before the meeting. When calculating the starting period, our Company shall not
include the date of the meeting. Notice of shareholders’ meeting shall be given to shareholders in a
manner consistent with the laws, administrative regulations, the Listing Rules of the Hong Kong Stock
Exchange, securities regulatory rules of the place where our Company’s shares are listed and the
Articles of Association.
The notice of the shareholders’ meeting includes the following:
(1) time, place and duration of the meeting;
(2) matters and proposals submitted to the meeting for consideration;
(3) explain in obvious words: All shareholders have the right to attend the shareholders’ meeting
and can entrust a proxy in writing to attend the meeting and participate in voting. The
shareholder’s proxy does not have to be a shareholder of our Company;
(4) equity registration date of shareholders who have the right to attend the shareholders’
meeting;
(5) name and telephone number of the permanent contact person for conference affairs;
(6) voting time and voting procedures online or by other means;
(7) the time and place for the delivery of the proxy power of attorney for the meeting voting;
and
(8) other requirements stipulated by laws, administrative regulations, departmental rules, Listing
Rules, the Articles of Association and securities regulatory rules of the place where our
Company’s shares are listed.
All specific contents of all proposals shall be fully and completely disclosed in the shareholder
meeting notice and supplementary notice.
Proposals of shareholders’ meeting
The content of the proposal should fall within the scope of functions of the shareholders’ meeting,
have clear topics and specific resolution matters, and comply with the relevant provisions of laws,
administrative regulations, securities regulatory rules of the place where our Company’s shares are
listed and Articles of Association.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-6 –


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When our Company convenes a shareholders’ meeting, the Board, the Audit Committee and
shareholders individually or jointly holding more than 1% of our Company’s shares have the right to
propose proposals to our Company.
Shareholders who individually or collectively hold 1% or more of our Company’s shares may
make a provisional proposal and submit it in writing to the convener ten days before the shareholders’
meeting. The convener shall issue a supplementary notice of the shareholders’ meeting within two days
of receipt of the proposal, announcing the content of the provisional proposal, and the provisional
proposal shall be submitted to the shareholders’ meeting for deliberation, unless the provisional
proposal is in violation of any law, administrative regulation or the Articles of Association or fails to
fall into the scope of functions of the shareholders’ meeting.
Save for the circumstances specified in the preceding paragraph, the convener shall not modify the
proposals listed in the notice of shareholders’ meeting or add new proposals after issuing the notice of
shareholders’ meeting.
Proposals that are not listed in the notice of shareholders’ meeting or do not comply with the
provisions of the Articles of Association shall not be voted on and resolutions made by the
shareholders’ meeting.
Delegations of the shareholders’ meeting
Shareholders may attend the shareholders’ meeting in person or entrust a proxy to attend and vote
on their behalf. Each shareholder has the right to appoint one proxy, but the proxy does not need to be
a shareholder of our Company. The proxy may exercise the following rights in accordance with the
entrustment of such shareholder:
(1) the shareholder’s right to speak at a shareholders’ meeting;
(2) individually, or collectively with others, request to vote by poll;
(3) exercise the right to vote by hands or on a poll, unless otherwise prescribed by relevant
laws, administrative regulations, the Listing Rules of the Hong Kong Stock Exchange or
other securities regulatory rules of the place where our Company’s shares are listed.
If an individual shareholder attends the meeting in person, he/she shall produce his/her identity
card or other valid documents or certificates that can identify him/herself, if a shareholder authorizes a
proxy to attend a meeting on his/her behalf, the proxy shall produce his/her own valid identity card and
the power of attorney from the shareholder.
Legal person shareholders shall be represented by their legal representative or a proxy entrusted
by the legal representative to attend the meeting. If a legal representative attends the meeting, he or she
shall present his or her identity card and a valid certificate proving his or her qualifications as a legal
representative; if a proxy is appointed to attend the meeting, the proxy shall present his or her identity
card and a written power of attorney issued by the legal representative of the legal person shareholder
unit in accordance with the law (except where the shareholder is a recognized clearing house or its
proxy (hereinafter referred to as the “ Recognized Clearing House ”) as defined in the relevant
regulations of Hong Kong law in force from time to time or the securities regulatory rules of the place
where our Company’s shares are listed).
If the shareholder is a Recognized Clearing House (or its proxy), the Recognized Clearing House
may authorize one or more persons it considers appropriate to act as its representative at any
shareholders’ meeting or any creditors’ meeting; however, if more than one person is authorized, the
power of attorney should specify the number and type of shares for each such authorized person. A
person so authorized may exercise rights on behalf of a Recognized Clearing House (without having to
present share certificates, notarized power of attorney, and/or further evidence of due authorization) as
if such person were an individual shareholder in our Company.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-7 –


--- page 417 ---
Voting on the Shareholders’ meeting
Resolutions of shareholders’ meetings are divided into ordinary resolutions and special
resolutions.
Ordinary resolutions made on the shareholders’ meeting shall be passed by more than half of the
voting rights held by shareholders (including shareholders’ proxies) present at the shareholders’
meeting.
Special resolutions made on a shareholders’ meeting shall be passed by more than two-thirds of
the voting rights held by shareholders (including shareholders’ proxies) present at the shareholders’
meeting.
The following matters shall be passed by ordinary resolutions at the shareholders’ meeting:
(1) work reports of the Board;
(2) the profit distribution plan and loss recovery plan drawn up by the Board;
(3) the appointment and removal of members of the Board and their remuneration and payment
methods;
(4) the annual report of our Company;
(5) making resolution on engagement and dismissal of the accountant firm that undertakes the
auditing of our Company;
(6) other matters that shall be passed by special resolutions except those stipulated by laws,
administrative regulations, securities regulatory rules of the place where our Company’s
shares are listed or the Articles of Association.
The following matters shall be passed by special resolutions at the shareholders’ meeting:
(1) our Company increases or decreases its registered capital;
(2) the division, spin-off, merger, dissolution and liquidation of our Company;
(3) modification of the Articles of Association;
(4) our Company purchases or sells major assets within one year or the amount of guarantee
provided to others exceeds 30% of our Company’s latest audited total assets;
(5) equity incentive plan;
(6) making resolution on the issuing of company bonds, securities and listing;
(7) other matters that are stipulated in laws, administrative regulations, securities regulatory
rules of the place where our Company’s shares are listed or the Articles of Association, as
well as those that are determined by the shareholders’ meeting to have a significant impact
on our Company through ordinary resolutions and need to be passed through special
resolutions.
Shareholders (including shareholders’ proxies) exercise their voting rights based on the number of
voting shares they represent, and each share is entitled to one vote. However, our Company’s shares
held by our Company carry no voting rights, and such shares are not included in the total number of
voting shares held by shareholders present.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-8 –


--- page 418 ---
DIRECTORS AND THE BOARD
Directors
Directors are elected or changed by the shareholders’ meeting. The term of directors is three
years. Upon expiration of the term, directors may be re-elected.
The term of office of a director shall be calculated from the date of assuming office until the
expiration of the term of the current Board. If a director’s term of office expires and is not re-elected in
time, until the re-elected director takes office, the original director shall still perform his or her duties
as a director in accordance with the provisions of laws, administrative regulations, departmental rules
and the Articles of Association. Directors may resign before the expiration of their terms of office.
The senior management may concurrently serve as a director, provided that the aggregate number
of the directors who concurrently serve as the senior management, shall not exceed one half of all the
directors of our Company.
No employee representative director in the Board of our Company.
The chairman of the Board
The board of directors shall appoint one chairman, who shall be elected by a majority of all
directors on the board. The chairman of the Board exercises the following functions and powers:
(1) preside over shareholders’ meetings and convene and preside over Board meetings;
(2) supervise and inspect the implementation of Board resolutions;
(3) sign our Company’s share certificates, corporate bonds, and other securities;
(4) sign important board documents;
(5) in the event of force majeure emergencies such as natural disasters, exercising special
disposal rights over company affairs that are consistent with legal regulations and our
Company’s interests, and reporting to our Company’s board of directors and shareholders’
meeting afterward;
(6) other authorities granted by the board of directors, laws, administrative regulations,
securities regulatory rules of the place where our Company’s shares are listed.
The Board
The Board consists of 9 directors, including 3 independent directors.
The Board exercises the following functions and powers:
(1) convening the shareholders’ meeting and reporting its work to the shareholders’ meeting;
(2) executing resolutions of the shareholders’ meeting;
(3) deciding the operational plans and investment plans of our Company;
(4) preparing the profit distribution plans and loss compensation plans of our Company;
(5) preparing plans for our Company to increase or decrease its registered capital, issue bonds or
other securities as well as the listing of our Company;
(6) drafting plans for our Company with respect to significant acquisitions, purchase of shares,
mergers, divisions, dissolution or change of the form of our Company;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-9 –


--- page 419 ---
(7) deciding our Company’s outbound investments, purchase and sale of assets, pledge of assets,
external guarantees, entrusted wealth management, related-party transactions, external
donations and other matters within the scope authorized by the shareholders’ meeting;
(8) deciding to establish the internal management organizations of our Company;
(9) deciding on the appointment or dismissal of the president, and other senior executives, as
well as deciding on their remuneration, reward and disciplinary matters; deciding on the
appointment or dismissal of senior executives such as vice president, financial controller,
and deciding on their remuneration, reward and disciplinary matters based on the president’s
nominations;
(10) preparing the basic management system of our Company;
(11) preparing plans to amend the Articles of Association;
(12) managing the disclosure of information by our Company;
(13) requesting the shareholders’ meeting to engage or replace the accounting firm that provides
audit services to our Company;
(14) listening to the president’s work report and checking the president’s work; and
(15) other powers authorized by the laws, administrative regulations, departmental rules, Listing
Rules, securities regulatory rules of the place where our Company’s shares are listed and the
Articles of Association or the shareholders’ meeting.
Any matters that are beyond the scope of authorization of the shareholders’ meeting shall be
submitted for consideration at the shareholders’ meeting.
The Board shall meet at least 4 times a year, at the call of the chairman of the Board. Regular
meetings of the Board referred to in these Articles of Association shall be notified in writing to all
directors 14 days prior to the meeting.
Shareholders representing more than 1/10 of the voting rights, more than 1/3 of the directors or
the Audit Committee may propose to convene an extraordinary meeting of the Board. The chairman of
the Board shall convene and preside over the Board meeting within ten days after receiving the
proposal.
The notification time limit for the extraordinary meeting of the Board is three days prior to the
meeting. In cases of emergency where an extraordinary meeting of the Board needs to be convened as
soon as possible, the time limit for the delivery of the meeting notice may not be subject to the time
limit stipulated in the preceding paragraph.
Board meetings should be attended by more than half of the directors. Resolutions made by the
Board should be approved by more than half of all directors.
Directors who are related to the corporates or individuals involved in the matters resolved at the
Board meeting may not exercise voting rights on the resolution, nor may they exercise voting rights on
behalf of other directors. The Board meeting may be held if more than half of the unrelated directors
are present, and resolutions made at the Board meeting shall be passed by more than half of the
unrelated directors. If the number of unrelated directors present at the Board is less than 3, the matter
shall be submitted to the shareholders’ meeting for consideration.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-10 –


--- page 420 ---
The Articles of Association do not specifically provide for the manner in which Directors may
own or exercise borrowing rights, but in connection with the issuance of corporate bonds, the Articles
of Association contain an understanding that (1) the Board of Directors will formulate a plan for the
issuance of corporate bonds, and (2) the issuance of corporate bonds will be authorised by a resolution
of the general meeting.
Special committees of the Board
The Board of our Company has an Audit Committee in place to exercise the functions and powers
of the Board of Supervisors as stipulated in our Company Law.
The Board of our Company sets up other special committees, such as the Nomination Committee
and the Remuneration and Appraisal Committee, to perform their duties in accordance with the Articles
of Association and the authorization of the Board, and the proposals of the special committees shall be
submitted to the Board for consideration and decision. The Board shall be responsible for formulating
the working procedures of the special committees. The composition of the special committees shall
comply with the laws, administrative regulations, departmental rules, the Listing Rules of Hong Kong
Stock Exchange and other securities regulatory rules of the place where our Company’s shares are listed
or the relevant requirements stipulated by the relevant regulatory authorities.
Senior Management
Our Company has a president, several vice presidents and a financial controller, all of whom are
appointed or dismissed by the Board.
Our Company’s president is elected for a term of three years, and may be re-appointed.
The president is responsible to the Board and exercises the following functions and powers:
(1) preside over our Company’s production, operation and management work, organize the
implementation of Board resolutions, and report work to the Board;
(2) organize and implement our Company’s annual business plan and investment plan;
(3) formulate a plan for the establishment of our Company’s internal management organization;
(4) formulate our Company’s basic management system;
(5) formulate specific regulations of our Company;
(6) propose to the Board to appoint or dismiss our Company’s vice president, financial
controller;
(7) decide on the appointment or dismissal of management personnel other than those who shall
be appointed or dismissed by the Board;
(8) propose to convene the extraordinary meeting of the Board;
(9) other powers granted by the Articles of Association or by the Board.
The president attends Board meetings.
FINANCIAL ACCOUNTING SYSTEM
Our Company formulates its financial accounting system in accordance with laws, administrative
regulations, securities regulatory rules of the place where our Company’s shares are listed and
regulations of relevant national departments.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-11 –


--- page 421 ---
Our Company shall prepare its annual financial accounting report within four months from the end
of each accounting year and interim financial accounting report within three months from the end of the
first six months of each accounting year.
The aforesaid financial accounting reports are prepared and published in accordance with the
relevant laws, administrative regulations, the China securities regulatory commission and other
securities regulatory rules of the places where our Company’s shares are listed.
Other than the statutory accounting books, our Company will not maintain separate accounting
books. Our Company’s funds are not stored in accounts opened in any individual’s name.
When our Company distributes after-tax profits for the year, it shall withdraw 10% of the profits
and include them in our Company’s statutory reserve fund. If the cumulative amount of our Company’s
statutory reserve fund is more than 50% of our Company’s registered capital, no further withdrawals
may be made.
If our Company’s statutory reserve fund is insufficient to make up for losses in previous years, it
shall first utilize the current year’s profits to make up for the losses before withdrawing the statutory
reserve fund in accordance with the provisions of the preceding paragraph.
After our Company withdraws the statutory reserve fund from the after-tax profits, it can also
withdraw the discretionary reserve fund from the after-tax profits upon resolution of the shareholders’
meeting.
The remaining after-tax profits after our Company has made up for its losses and withdrawn the
reserve fund shall be distributed according to the proportion of shares held by shareholders.
If the shareholders’ meeting violates our Company Law and distributes profits to shareholders,
shareholders shall return the profits distributed in violation of the regulations to our Company. If any
loss is caused to our Company, the shareholders and the responsible directors and senior management
shall be liable for compensation.
Our Company’s shares held by our Company will not participate in the distribution of profits.
Our Company shall appoint one or more collection agents in Hong Kong for H share shareholders.
The collection agent shall collect and keep the dividends distributed by our Company in respect of H
shares and other amounts payable on behalf of the relevant H-share holders, to make payments to such
H-share holders. The collection agent appointed by our Company shall comply with the requirements of
laws, regulations and the securities regulatory rules of the place where our Company’s shares are listed.
Our Company’s reserve fund is used to make up for our Company’s losses, expand our Company’s
production and operations, or increase our Company’s registered capital. However, our Company’s
capital reserve may not be used to cover losses of our company.
When the statutory reserve fund is converted to increase the registered capital, the remaining
reserve fund will not be less than 25% of our Company’s registered capital prior to the conversion.
APPOINTMENT OF ACCOUNTING FIRM
Our Company engages an accounting firm that complies with the provisions of the Securities Law
to conduct accounting statement audits, net asset verification and other related consulting services. The
appointment period is one year and can be renewed.
Our Company’s appointment and dismissal of an accounting firm shall be submitted to the Board
for deliberation and decided by the shareholders’ meeting after being approved by a majority of all the
members of the Audit Committee. The Board may not appoint an accounting firm before a decision is
made at the shareholders’ meeting.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-12 –


--- page 422 ---
Our Company guarantees to provide true and complete accounting vouchers, accounting books,
financial accounting reports and other accounting information to the accounting firm engaged, and shall
not refuse, conceal or make false statements.
MERGERS, DIVISIONS, CAPITAL INCREASES AND CAPITAL REDUCTIONS
Company mergers may take the form of mergers by absorption or mergers by new establishment.
When a company absorbs other companies, it is called a merger by absorption, and the absorbed
company is dissolved. The merger of two or more companies to establish a new company is a merger
by new establishment, and the merging parties are dissolved.
If our Company merges, the merging parties shall sign a merger agreement and prepare a balance
sheet and inventory of assets. Our Company shall notify creditors within ten days from the date of
making the merger resolution, and shall make an announcement within 30 days in newspapers or the
National Enterprise Credit Information Disclosure System.
Creditors may require our Company to pay off debts or provide corresponding guarantees within
30 days from the date of receipt of the notice, or within 45 days from the date of announcement if no
notice is received.
If our Company merges, the claims and debts of the merging parties shall be inherited by the
continuing company or the newly established company after the merger.
If our Company is divided, its property will be divided accordingly.
If our Company is divided, a balance sheet and inventory of assets shall be prepared. Our
Company shall notify its creditors within ten days from the date of making the division resolution, and
shall make an announcement within 30 days in newspapers or the National Enterprise Credit
Information Disclosure System.
The companies resulting from the division shall bear joint and several liability for the debts
incurred by our Company before the division. However, this shall not be the case unless otherwise
agreed upon in a written agreement between our Company and its creditors regarding debt settlement
before the division.
If our Company needs to reduce its registered capital, it must prepare a balance sheet and
inventory of assets.
Our Company shall notify creditors within ten days from the date of making the resolution to
reduce the registered capital at the shareholders’ meeting, and shall make an announcement within 30
days in newspapers or the National Enterprise Credit Information Disclosure System. Creditors have the
right to require our Company to pay off debts or provide corresponding guarantees within 30 days from
the date of receipt of the notice, or within 45 days from the date of announcement if no notice is
received.
If our Company is merged or divided and the registered items are changed, the registration of the
change shall be carried out with our Company registration authority in accordance with the law; if our
Company is dissolved, the registration of the cancelation of our Company shall be carried out in
accordance with the law; if a new company is established, the registration of the establishment of such
company shall be carried out in accordance with the law.
If our Company increases or decreases its registered capital, it shall apply for a registration of the
change with our Company registration authority in accordance with the law.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-13 –


--- page 423 ---
DISSOLUTION AND LIQUIDATION
Our Company will be dissolved for the following reasons:
(1) the business period stipulated in the Articles of Association expires or other reasons for
dissolution stipulated in the Articles of Association occur;
(2) the shareholders’ meeting makes a resolution to dissolve;
(3) dissolution is required due to company merger or division;
(4) the business license has been revoked, ordered to close, or revoked in accordance with the
law;
(5) if our Company encounters serious difficulties in its operation and management, and its
continued existence will cause heavy losses to the interests of shareholders, and cannot be
solved through other means, shareholders holding more than 10% of the voting rights of all
shareholders of our Company may request the People’s Court to dissolve our Company.
If our Company encounters the above-mentioned reasons for dissolution, it shall publicize the
reasons for dissolution through the National Enterprise Credit Information Publicity System within ten
days.
The liquidation team shall exercise the following functions and powers during the liquidation
period:
(1) clean up our Company’s properties and prepare a balance sheet and inventory of assets
respectively;
(2) notify and announce creditors;
(3) handle our Company’s uncompleted businesses related to liquidation;
(4) pay the taxes owed and the taxes incurred during the liquidation process;
(5) clear claims and debts;
(6) distribute our Company’s remaining property after paying off its debts;
(7) participate in civil litigation activities on behalf of our Company.
The liquidation team shall notify creditors within ten days from the date of establishment, and
shall publish an announcement within 60 days in newspapers or the National Enterprise Credit
Information Publicity System. Creditors shall declare their claims to the liquidation team within 30
days from the date of receipt of the notice, or within 45 days from the date of announcement if the
notice is not received.
When a creditor declares claims, he or she shall explain the relevant matters of the claims and
provide supporting materials. The liquidation team shall register the claims.
During the period of reporting claims, the liquidation team shall not make settlements with
creditors.
After cleaning up our Company’s assets and preparing a balance sheet and inventory of assets, the
liquidation team shall formulate a liquidation plan and submit it to shareholders’ meeting or the
People’s Court for confirmation.
Our Company’s remaining property, after paying liquidation expenses, employees’ wages, social
insurance fees, statutory compensation, taxes owed, and our Company’s debts, shall be distributed to
the shareholders in proportion to their shareholdings.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-14 –


--- page 424 ---
During the liquidation period, our Company continues to exist, but it cannot carry out business
activities unrelated to the liquidation. Our Company’s property will not be distributed to shareholders
before it is settled in accordance with the provisions of the preceding paragraph.
After clearing our Company’s property and preparing a balance sheet and inventory of assets, if
the liquidation team finds that our Company’s property is insufficient to pay off its debts, it shall apply
to the People’s Court for liquidation of bankruptcy in accordance with the law.
After the People’s Court accepts the bankruptcy application, the liquidation team shall transfer the
liquidation matters to the bankruptcy administrator designated by the People’s Court.
After our Company’s liquidation is completed, the liquidation team shall prepare a liquidation
report, submit it to the shareholders’ meeting or the People’s Court for confirmation, and submit it to
our Company registration authority to apply for cancelation of our Company registration.
AMENDMENTS TO THE ARTICLES OF ASSOCIATION
Under any of the following circumstances, our Company shall amend the Articles of Association:
(1) after our Company Law or relevant laws, administrative regulations, Listing Rules or
securities regulatory rules of the place where our Company’s shares are listed are amended,
the matters stipulated in the Articles of Association contradict with the provisions of the
revised laws, administrative regulations, Listing Rules or securities regulatory rules of the
place where our Company’s shares are listed;
(2) our Company’s situation changes and is inconsistent with the matters recorded in the Articles
of Association;
(3) the shareholders’ meeting makes a resolution to amend the Articles of Association.
If the amendments to the Articles of Association passed by the resolution of the shareholders’
meeting should be reviewed and approved by the competent authority, they must be reported to the
competent authority for approval;
If such amendments involve Company registration matters, the registration of change shall be
handled in accordance with the law.
The Board amends the Articles of Association in accordance with the resolution of the
shareholders’ meeting to amend the Articles of Association and the approval of the relevant competent
authorities.
If amendments to the Articles of Association constitute information that is required to be disclosed
by laws and regulations, they shall be announced as required.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-15 –


--- page 425 ---
1. FURTHER INFORMATION ABOUT OUR COMPANY
A. Incorporation
Our Company was incorporated as a limited liability company in the PRC on May 17, 2016 and
was converted into a joint stock company with limited liability on June 12, 2025. Our registered
address and principal place of business is at Room 303, Building 4 Second Street, Gangcheng Square,
No. 88 Yunjuan Road, Lane 11, Lin-gang Special Area, China (Shanghai) Free Trade Pilot Zone, PRC.
We have established a place of business in Hong Kong at 46/F, Hopewell Centre, 183 Queen’s
Road East, Wan Chai, Hong Kong and was registered with the Registrar of Companies in Hong Kong as
a non-Hong Kong company under Part 16 of the Companies Ordinance on July 4, 2025. Mr. Chow
Shing Lung, our joint company secretary, is the authorized representative of our Company for the
acceptance of service of process and notices on behalf of our Company in Hong Kong under Part 16 of
the Companies Ordinance. The address for service of process on our Company in Hong Kong is the
same as its principal place of business in Hong Kong as set out above.
As our Company was established in the PRC, we are subject to the relevant laws and regulations
of the PRC. An overview of the relevant aspects of laws and regulations of the PRC is set out in the
section headed “Regulatory Overview” in this prospectus. A summary of our Articles of Association is
set out in Appendix III to this prospectus.
B. Changes in the Share Capital
On June 12, 2025, our Company was converted into a joint stock company with limited liability
under the PRC Company Law. Upon completion of such conversion, the share capital of our Company
was RMB100,000,000 divided into 100,000,000 Shares with a nominal value of RMB1.00 each.
Immediately following the completion of the Global Offering and the Conversion of Domestic
Shares into H Shares, assuming that the Over-allotment Option is not exercised, our registered share
capital will be increased to RMB112,000,000, divided into 1,110,200 Domestic Shares and 110,889,800
H Shares, fully paid up or credited as fully paid up, representing approximately 0.99% and
approximately 99.01% of our enlarged share capital, respectively.
Save as disclosed above, there has been no alteration in the share capital of our Company and its
subsidiaries within two years immediately preceding the date of this prospectus.
C. Resolutions Passed by Our Shareholders’ General Meeting in relation to the Global Offering
At the extraordinary general meeting of the Shareholders held on June 17, 2025, the following
resolutions, among others, were duly passed:
(1) the issue by our Company of H Shares of nominal value of RMB1.00 each and such H
Shares be listed on the Stock Exchange;
(2) the proposed number of H Shares to be offered under the Global Offering and the grant of
the Over-allotment Option. The number of H Shares to be issued pursuant to the exercise of
the Over-allotment Option shall not exceed 15% of the total number of H Shares to be
offered initially pursuant to the Global Offering;
(3) subject to the completion of the Global Offering, the conditional adoption of the revised
Articles of Association, which shall become effective on the Listing Date; and
(4) authorization of our Board and its authorized persons to handle all matters relating to,
among other things, the Global Offering.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-1 –


--- page 426 ---
D. Restriction on Share Repurchases
For details of the restrictions on share repurchases by our Company, see the section headed
“Appendix III—Summary of Articles of Association” in this prospectus.
2. FURTHER INFORMATION ABOUT OUR BUSINESS
A. Summary of Our Material Contract
We have entered into the following contract (not being contract entered into in the ordinary course
of business) within the two years immediately preceding the date of this prospectus that is or may be
material:
(1) the Hong Kong Underwriting Agreement.
B. Our Intellectual Property Rights
As of the Latest Practicable Date, our Company had registered, or has applied for the registration
of the following intellectual property rights which were material to our Group’s business.
Trademarks
As of the Latest Practicable Date, we had registered the following trademarks which we
considered to be material to our business:
No. Trademark Class Owner Place of Registration Registration No. Validity Period
1. ...
 9 Our Company PRC 21688273 December 14, 2017
– December 13,
2027
2. ...
9 Our Company PRC 65626270 March 21, 2023 –
March 20, 2033
3. ...
 9 Our Company PRC 81500298 April 14, 2025 –
April 13, 2035
Patents
As of the Latest Practicable Date, we had registered the following patents which we considered to
be material to our business:
No. Owner Description Patent No. Types of Patents Application Date
Authorization
Announcement
Date
1. ... Our Company Method for Calibrating
Speaker Impedance
Mismatch (ɓ
ج)
ZL201610626083.4 Invention August 3,
2016
June 2, 2020
2. ... Our Company Integrated Device and
Method for
Micro-Speaker Control
and Temperature
Measurement
(౮ᑊኜછՓ಻๝዆
ج)
ZL201711080667.7 Invention November 6,
2017
October 22,
2024
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-2 –


--- page 427 ---
No. Owner Description Patent No. Types of Patents Application Date
Authorization
Announcement
Date
3. ... Our Company Intelligent Audio Effect
Amplifier Chip and
Intelligent Audio Effect
Switching Method ( ౽ঐ
ࣖࠪ
ج)
ZL2017 11117196.2 Invention November 13,
2017
July 3, 2020
4. ... Our Company Digital Amplifier Chip with
DC Protection Function
and Its DC Protection
Method (ᚐ̌
ٜ
ج)
ZL201811032992.0 Invention September 5,
2018
May 28, 2021
5. ... Our Company Adaptive Boost Circuit
Device Suitable for
Digital Audio Chips
(ڃ
ІቇᏐ Boost ཥ༩ༀ
ໄ)
ZL201811072193.6 Invention September 14,
2018
September 8,
2020
6. ... Our Company Variable-Frequency
Automatic Gain Control
Device Suitable for
Intelligent Amplifier
Chips (౽ঐ̌
ᜊ᎖Іਗᄣूછ
Փༀໄ)
ZL201811257389.2 Invention October 26,
2018
April 12,
2022
7. ... Our Company LRA Drive Pulse Waveform
Design Method Based on
Kaiser Window ( ɓ၇ਿ
׵KaiserٙLRAᚨਗএ
ج)
ZL202010186443.X Invention March 17,
2020
April 14,
2023
8. ... Our Company Method for Mobile Phone
Speaker f0 Testing and
Tracking ( ɓ၇˓ዚఆ̪
᎖ଟf0಻༊ձ༧ᔳ˙
ج)
ZL202010186763.5 Invention March 17,
2020
June 18, 2021
9. ... Our Company Double Charge Pump
(ݿ)
ZL202010207163.2 Invention March 23,
2020
March 12,
2021
10. .. Our Company Multi-Channel Seamless
Switching Method
(ج)
ZL202110626730.2 Invention June 4, 2021 August 5,
2022
11. .. Our Company Adaptive Control Device
and Method for Boost
Circuits (Іቇ
ج)
ZL202110727733.5 Invention June 29, 2021 July 7, 2023
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-3 –


--- page 428 ---
No. Owner Description Patent No. Types of Patents Application Date
Authorization
Announcement
Date
12. .. Our Company Linear Resonant Actuator
Resonance Frequency
Detection Method and
System (৵
ʿӻ
୕)
ZL202210626774.X Invention June 5, 2022 October 1,
2024
13. .. Our Company Speaker Short-Circuit/
Open-Circuit Detection
Method and Speaker
Fault Detection System
(౮ᑊኜ೵༩ක༩Ꮸ಻˙
ღᏨ಻ӻ
୕)
ZL202410176565.9 Invention February 8,
2024
July 19, 2024
14. .. Our Company Speaker Resonance
Frequency Detection
Method and Device,
Speaker Fault Detection
System (᎖ଟ
ʿༀໄe౮ᑊኜ
ღᏨ಻ӻ୕ )
ZL202410176566.3 Invention February 8,
2024
June 28, 2024
15. .. Our Company Speaker Fault Detection
Circuit and Method,
Electronic Device ( ౮ᑊ
e
ཥɿண௪)
ZL202410176567.8 Invention February 8,
2024
August 20,
2024
Domain Name
As of the Latest Practicable Date, we had registered the following domain name which we
considered to be material to our business:
No. Domain Name Name of Registered Proprietor Date of Registration
1. foursemi.com .................. Our Company August 23, 2022
Software Copyrights
As of the Latest Practicable Date, we had registered the following software copyrights which we
considered to be material to our business:
No. Software Name Version Owner Registration No. Date of Registration
1. ... SmartPa Operation and Control
Software for MTK Platform (MTK ̻
̨SmartPa ༶БၾછՓழ΁ )
V1.0 Our Company 2023SR0099549 January 17, 2023
2. ... SmartPa Operation and Control
Software for Qcomm Platform
(Qcomm ̨̻SmartPa ༶БၾછՓழ
΁)
V1.0 Our Company 2023SR0099550 January 17, 2023
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-4 –


--- page 429 ---
No. Software Name Version Owner Registration No. Date of Registration
3. ... Fourier Feedforward Function
Intelligent Amplifier Drive Software
(ᚨਗழ΁ )
V1.0 Our Company 2024SR0840492 June 20, 2024
3. FURTHER INFORMATION ABOUT OUR DIRECTORS
A. Particulars of Directors’ Contracts
Each of our Directors has entered into a service contract with our Company. Each service contract
is for an initial term of three years. The service contracts may be renewed in accordance with the
Articles and the applicable laws, rules and regulations.
Save as disclosed above, none of our Directors has or is proposed to enter into a service contract
with any member of our Group, other than contracts expiring or determinable by the relevant employer
within one year without the payment of compensation (other than statutory compensation).
B. Remuneration of Directors
See “Directors and Senior Management” and Note 8 to the Accountants’ Report in Appendix I to
this prospectus for the remuneration or benefits in kind paid to our Directors for each of the three years
ended December 31, 2024 and the ten months ended October 31, 2025.
During the Track Record Period, no fees were paid by our Group to any of our Directors or the
five highest paid individuals as an inducement to join us or as compensation for loss of office.
4. DISCLOSURE OF INTERESTS
A. Disclosure of Interests of Directors
Save as disclosed below, immediately following the completion of the Global Offering and the
Conversion of Domestic Shares into H Shares (assuming that the Over-allotment Option is not
exercised), none of our Directors has any interest and/or short position in the Shares, underlying Shares
and debentures of our Company or our associated corporations (within the meaning of Part XV of the
SFO) which will be required to be notified to our Company and the Stock Exchange pursuant to
Divisions 7 and 8 of Part XV of the SFO (including interest or short position which they were taken or
deemed to have under such provisions of the SFO) or which will be required, pursuant to section 352 of
the SFO, to be entered in the register referred to therein, or which will be required, pursuant to the
Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the
Listing Rules to be notified to our Company, once the H Shares are listed on the Stock Exchange.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-5 –


--- page 430 ---
As of the Latest Practicable Date
Immediately following the completion of
the Global Offering and the Conversion of
Domestic Shares into H Shares (assuming
the Over-allotment Option is not exercised)
Name of Director
Our Company/
associated
corporation
Capacity/ nature of
interest
Number of
Domestic Shares
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company
Number of
H Shares
Approximate
percentage of
shareholding in
our H Shares
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company
Mr. Xu (1)(2) ......... Our Company Beneficial owner,
interest in
controlled
corporation,
interest held
jointly with
other person
35,275,900 35.28% 35,275,900 31.81% 31.50%
Mr. Liu
(2) ......... Our Company Beneficial owner,
interest held
jointly with
other person
35,275,900 35.28% 35,275,900 31.81% 31.50%
Mr. Qian Shun
(3) ...... Our Company Interest in
controlled
corporation
7,073,700 7.07% 7,073,700 6.38% 6.32%
(1) As of the Latest Practicable Date, Mr. Xu acted as the general partner of Shanghai FourSemi Management, Xiamen
FourSemi Management and Xiamen FourSemi Chuangke. Under the SFO, Mr. Xu is deemed to be interested in the entire
Shares held by Shanghai FourSemi Management, Xiamen FourSemi Management and Xiamen FourSemi Chuangke.
(2) Pursuant to the Concert Party Agreement, Mr. Liu irrevocably agreed to, among others, act in concert with Mr. Xu and
follow his instructions in exercising his vote at the general meetings of our Company. Under the SFO, Mr. Xu is deemed to
be interested in the Shares held by Mr. Liu, and Mr. Liu is deemed to be interested in the Shares held by Mr. Xu.
(3) As of the Latest Practicable Date, Xiamen FourSemi Management was owned as to approximately 35.60% by Mr. Qian
Shun as a limited partner. Under the SFO, Mr. Qian Shun is deemed to be interested in the Shares held by Xiamen
FourSemi Management.
Up to the Latest Practicable Date, none of our Directors or their respective spouses and children
under 18 years of age had been granted by our Company or had exercised any rights to subscribe for
shares or debentures of our Company or any of its associated corporations.
B. Substantial Shareholders
Save as disclosed in the section headed “Substantial Shareholders” in this prospectus, our
Directors or chief executive are not aware of any other person, not being a Director or chief executive
of our Company, who has an interest or short position in the Shares and underlying Shares of our
Company, which following the completion of the Global Offering and the Conversion of Domestic
Shares into H Shares, would fall to be disclosed to our Company under the provisions of Divisions 2
and 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10% or more of the issued
voting Shares of our Company or any member of our Group.
C. Disclaimers
(1) None of our Directors has any direct or indirect interest in the promotion of our Company,
or in any assets which have within the two years immediately preceding the date of this
prospectus been acquired or disposed of by or leased to any member of our Group, or are
proposed to be acquired or disposed of by or leased to any member of our Group;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-6 –


--- page 431 ---
(2) None of our 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; and
(3) So far as is known to our Directors, none of our Directors, their respective close associates
(as defined under the Listing Rules) or Shareholders of our Company who are interested in
more than 5% of the issued share capital of our Company has any interests in the five largest
customers or the five largest suppliers of our Group.
5. OTHER INFORMATION
A. Estate Duty
Our Directors have been advised that no material liability for estate duty under the PRC laws is
likely to fall on our Company or its subsidiaries.
B. Litigation
As of the Latest Practicable Date, save as disclosed in this Prospectus, no member of our Group
was engaged in any outstanding material litigation or arbitration which may have material and adverse
effect on the Global Offering and, so far as our Directors are aware, no litigation or claim of material
importance is pending or threatened by or against any member of our Group.
C. Joint Sponsors
The Joint Sponsors have made an application on our behalf to the Listing Committee for the
listing of, and permission to deal in, our H Shares. The Joint Sponsors satisfy the independence criteria
applicable to sponsors set out in Rule 3A.07 of the Listing Rules.
The Joint Sponsors will be paid by our Company a total fee of USD650,000 to act as the sponsors
in connection with the Listing.
D. Compliance Advisor
Our Company has appointed Orient Capital (Hong Kong) Limited as the compliance advisor upon
the Listing in compliance with Rule 3A.19 of the Listing Rules.
E. Preliminary Expenses
We have not incurred any material preliminary expenses.
F. Promoters
The information of our promoters when we were converted into a joint stock company on June 12,
2025 is as follows:
Name of Shareholder Number of Shares
Shareholding
percentage
(%)
Mr. Xu .......................................... 8,859,800 8.86
Shanghai FourSemi Management ........................ 12,617,800 12.62
Xiamen FourSemi Management ......................... 7,073,700 7.07
Xiamen FourSemi Chuangke ........................... 4,206,100 4.21
Mr. Liu .......................................... 2,518,500 2.52
Gansheng Investment ................................ 6,406,800 6.41
Moqin Intelligent ................................... 6,361,400 6.36
Vinno Intelligent and Health ........................... 5,776,900 5.78
Fortune Chuanghong ................................. 4,696,800 4.70
Ark Investment ..................................... 4,601,600 4.60
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-7 –


--- page 432 ---
Name of Shareholder Number of Shares
Shareholding
percentage
(%)
Junyi Kaixiang ..................................... 3,527,500 3.53
Chaoyue Moore .................................... 3,022,300 3.02
Junsheng Investment ................................. 2,921,500 2.92
Mr. Liu Changjiang ................................. 2,458,100 2.46
Zhanxiang Information ............................... 1,981,800 1.98
Xingtou Youxuan ................................... 1,850,300 1.85
Wentianxia ........................................ 1,687,300 1.69
Weitai Shenghong ................................... 1,680,000 1.68
Junyi Borui ....................................... 1,473,700 1.47
Zhengchu Venture Capital ............................. 1,356,700 1.36
Kuanlian Investment ................................. 1,322,800 1.32
Junqing Investment .................................. 1,302,300 1.30
Chufeng Investment ................................. 1,222,700 1.22
Huzhou Zhuosheng .................................. 1,110,200 1.11
Shunke Investment .................................. 1,052,500 1.05
Ms. Jiang Yan ..................................... 950,000 0.95
Yahe Xinghua ...................................... 906,700 0.91
Shunying Investment ................................. 747,100 0.75
Junxin Ruizhi ...................................... 670,400 0.67
Jicui Meibai ....................................... 604,500 0.60
Longcheer Intelligence ............................... 604,500 0.60
Haisheng Xianting .................................. 576,900 0.58
Fumiao Investment .................................. 560,500 0.56
Xiamen Innovation .................................. 555,100 0.56
Sanming Innovation ................................. 555,100 0.56
Huide Investment ................................... 555,100 0.56
Shuimu Xinchi ..................................... 384,600 0.38
Furui Chuangxin .................................... 383,900 0.38
Mr. Deng Tianshun .................................. 336,000 0.34
Caizhi Chuangying .................................. 221,300 0.22
Zhiyou Management ................................. 181,300 0.18
Xinda Venture Capital ................................ 117,900 0.12
Total ............................................ 100,000,000 100
Within the two years immediately preceding the date of this prospectus, no cash, securities or
other benefit has been paid, allotted or given nor is 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.
G. Qualification of Experts
The qualifications of the experts, as defined under the Listing Rules, who have given opinions in
this prospectus, are as follows:
Name Qualification
Guotai Junan Capital Limited A licensed corporation under the SFO for type 6 (advising on
corporate finance) of the regulated activities as defined under
the SFO
Orient Capital (Hong Kong) Limited A licensed corporation under the SFO for type 6 (advising on
corporate finance) of the regulated activities as defined under
the SFO
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-8 –


--- page 433 ---
Name Qualification
Ernst & Young Certified public accountants and public interest entity auditors
Commerce & Finance Law Offices Legal advisor of our Company as to the PRC laws
Commerce & Finance Law Offices
LLP
Legal advisor of our Company as to the International Sanction
Law
Fangda Partners Legal advisor of our Company as to the Litigation
SHINEWING Tax and Business
Advisory Limited
Transfer Pricing Advisor to the Company
Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
Independent industry consultant
H. Consents of Experts
Each of the experts named in “5. Other Information—G. Qualification of Experts” above has
given and has not withdrawn its written consent to the issue of this prospectus with the inclusion of its
report and/or letter and/or opinion and/or the references to its name included herein in the form and
context in which it is respectively included.
As of the Latest Practicable Date, none of the experts named above had any shareholding interests
in any member of our Group or the right (whether legally enforceable or not) to subscribe for or to
nominate persons to subscribe.
I. Taxation of Holders of H Shares
The sale, purchase and transfer of H Shares are subject to Hong Kong stamp duty if such sale,
purchase and transfer is effected on the H Share register of members of our Company, including in
circumstances where such transaction is effect on the Stock Exchange. For further information in
relation to taxation, see “Regulatory Overview”.
J. No Material and Adverse Change
Our Directors confirm that there has been no material and adverse change in the financial or
trading position of our Group since October 31, 2025.
K. Binding Effect
This prospectus shall have the effect, if an application is made in pursuant hereof, of rendering all
persons concerned bound by all the provisions (other than the penal provisions) of sections 44A and
44B of the Hong Kong Companies (Winding Up and Miscellaneous Provisions) Ordinance so far as
applicable.
L. Related Party Transactions
Our Group entered into certain related party transactions within the two years immediately
preceding the date of this prospectus as mentioned in Note 33 to the Accountants’ Report in Appendix I
to this prospectus.
M. Restriction on Share Repurchases
See Appendix III to this prospectus for details.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-9 –


--- page 434 ---
N. Miscellaneous
(1) Within the two years immediately preceding the date of this prospectus:
(i) save as disclosed in the section headed “History and Corporate Structure”, no share or
loan capital of our Group has been issued or agreed to be issued or is proposed to be
fully or partly paid either for cash or a consideration other than cash;
(ii) no share or loan capital of our Group is under option or is agreed conditionally or
unconditionally to be put under option;
(iii) save as disclosed in the section headed “Underwriting”, 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 of our Group; and
(iv) save as disclosed in the section headed “Underwriting”, no commission has been paid
or is payable for subscription, agreeing to subscribe, procuring subscription or agreeing
to procure subscription for any share in or debentures of our Company.
(2) There are no founder, management or deferred shares or any debentures in our Group.
(3) 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.
(4) Our Company has no outstanding convertible debt securities or debentures.
(5) There is no arrangement under which future dividends are waived or agreed to be waived.
(6) Save as disclosed in the section headed “History and Corporate Structure”, none of our
equity and debt securities is listed or dealt with in any other stock exchange nor is any
listing or permission to deal being or proposed to be sought.
(7) All necessary arrangements have been made to enable the H shares to be admitted into
CCASS for clearing and settlement.
(8) No company within our Group is presently listed on any stock exchange or traded on any
trading system.
O. 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).
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-10 –


--- page 435 ---
1. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to the copy of this prospectus delivered to the Registrar of Companies in
Hong Kong for registration were:
(1) copy of the material contract referred to in “2. Further Information about Our Business—A.
Summary of Our Material Contract” in Appendix IV; and
(2) the written consents referred to in “5. Other information—H. Consents of Experts” in
Appendix IV .
2. DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of our Company at
www.foursemi.com and on the website of the Stock Exchange at www.hkexnews.hk up to and
including the date which is 14 days from the date of this prospectus:
(1) the Articles of Association;
(2) the Accountants’ Report from Ernst & Young, the text of which is set out in Appendix I;
(3) the audited consolidated financial statements of our Group for the three years ended
December 31, 2024 and the ten months ended October 31, 2025;
(4) the report from Ernst & Young relating to the unaudited pro forma financial information, the
text of which is set out in Appendix IIA;
(5) the material contract referred to in “2. Further Information about Our Business—A.
Summary of Our Material Contract” in Appendix IV;
(6) the written consents referred to in “5. Other information—H. Consents of Experts” in
Appendix IV;
(7) the contracts referred to in “3. Further Information about Our Directors—A. Particulars of
Directors’ Contracts” in Appendix IV;
(8) the legal opinions issued by Commerce & Finance Law Offices, our legal advisor as to PRC
laws, in respect of certain general corporate matters and our Group’s business operations in
the PRC;
(9) the legal memorandum issued by Commerce & Finance Law Offices LLP, our legal advisor
as to International Sanction Law;
(10) the legal memorandum issued by Fangda Partners, our legal advisor as to the Litigation;
(11) the transfer pricing analysis report issued by SHINEWING Tax and Business Advisory
Limited, our Transfer Pricing Advisor;
(12) the PRC Company Law and the Trial Administrative Measures together with their unofficial
English translations; and
(13) the industry report issued by Frost & Sullivan.
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN
HONG KONG AND A V AILABLE ON DISPLAY
– V-1 –


--- page 436 ---
Shanghai FourSemi Semiconductor Co., Ltd.
ʮ̡
Shanghai FourSemi Semiconductor Co., Ltd.
ʮ̡
Shanghai FourSemi Semiconductor Co., Ltd.
ʮ̡
(A joint stock company incorporated in the People's Republic of China with limited liability)
Stock Code : 3625
GLOBAL OFFERING
Joint Sponsors, Joint Sponsor-Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
