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GLOBAL
OFFERING
Sole Sponsor, Sponsor-Overall Coordinator, Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Stock Code : 3636
(A joint stock company incorporated in the People’s Republic of China with limited liability)
雲南金潯資源股份有限公司
Yunnan Jinxun Resources Co., Ltd.
Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Bookrunners and Joint Lead Managers (in alphabetical order)


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If you are in any doubt about any of the contents in this prospectus, you should obtain independent professional advice.
Yunnan Jinxun Resources 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
: 36,765,600 H Shares (subject to the
Over-allotment Option)
Number of Hong Kong Offer Shares 3,676,600 H Shares (subject to
reallocation)
Number of International Offer Shares 33,089,000 H Shares (subject to
reallocation and the Over-allotment
Option)
Offer Price : HK$30.00 per H Share plus brokerage of
1.0%, SFC transaction levy of
0.0027%, AFRC transaction levy of
0.00015% and Stock Exchange trading
fee of 0.00565% (payable in full on
application in Hong Kong dollars,
subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 3636
Sole Sponsor, Sponsor-Overall Coordinator, Overall Coordinator,
Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Bookrunners and Joint Lead Managers (in alphabetical order)
Joint Lead Managers (in alphabetical order)
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of this prospectus, make no
representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in the section headed “Appendix VII — Documents Delivered to the Registrar of Companies and Available on Display” in this prospectus,
has been registered by the Registrar of Companies in Hong Kong as required by section 342C of the Companies (Winding Up and Miscellaneous Provisions) O rdinance (Chapter 32 of the Laws of Hong Kong). The
Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus or any of the other documents referred to above.
The Offer Price will be HK$30.00 per Offer Share, unless otherwise announced. Investors applying for the Hong Kong Offer Shares must pay, on applicati on, the Offer Price of HK$30.00 for each Hong Kong Offer
Share together with brokerage of 1.0%, SFC transaction levy of 0.0027%, Stock Exchange trading fee of 0.00565% and AFRC transaction levy of 0.00015%.
The Overall Coordinators (for themselves and on behalf of the Underwriters), where considered appropriate and with our consent, may reduce the numbe r of Offer Shares at any time prior to the morning of the last
day for lodging applications under the Hong Kong Public Offering. In such a case, we will, as soon as practicable in any event not later than the morning o f the last day for lodging applications under the Hong
Kong Public Offering on Tuesday, January 6, 2026, cause to be published notices of the reduction in the number of Offer Shares being offered under the Gl obal Offering. Such notices will also be available at our
Company’s website at www.jinxunec.com and the website of the Stock Exchange at www.hkexnews.hk . Further details are set out in the sections headed “Structure and Conditions of the Global Offering” and “How
to Apply for Hong Kong Offer Shares” in this prospectus.
Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, includin g the risk factors set out in the section headed “Risk Factors” in this
prospectus.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States and may not be offe red, sold, pledged or transferred in the United States, except
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in accordance with any a pplicable U.S. securities laws. The Offer Shares are being offered
and sold outside the United States in offshore transactions in reliance on Regulation S.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreements are subject to termination by the Overall Coordinators (fo r themselves and on behalf of the Underwriters) if certain
grounds arise prior to 8:00 a.m. on the Listing Date. Such grounds are set out in the section headed “Underwriting — Underwriting Arrangements and Expe nses — Hong Kong Public Offering — Grounds for
termination” in this prospectus. It is important that you refer to that section for further details.
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 Hong Kong Stock Exchange at www.hkexnews.hk and our website at www.jinxunec.com. If you require a pr inted copy of this prospectus, you may
download and print from the website addresses above.
IMPORTANT
December 31, 2025


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IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering. We will not provide printed copies of this prospectus 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.jinxunec.com. If you require a
printed copy of this prospectus, you may download and print from the website
addresses above.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online through the White Form eIPO service at www.eipo.com.hk ;o r
(2) apply through the HKSCC EIPO channel to electronically cause HKSCC
Nominees to apply on your behalf by instructing your broker or custodian
who is a HKSCC Participant to give electronic application instructions
through HKSCC’s FINI system to apply for the Hong Kong Offer Shares on
your behalf.
We will not provide any physical channels to accept any application for the Hong
Kong Offer Shares by the public. The contents of the electronic version of this
prospectus are identical to the printed prospectus as registered with the Registrar of
Companies in Hong Kong pursuant to Section 342C of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong).
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.
IMPORTANT
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See the section headed “How to Apply for Hong Kong Offer Shares” for further
details of the procedures through which you can apply for Hong Kong Offer Shares.
Y our application through the White Form eIPO service or the HKSCC EIPO
channel must be made for a minimum of 200 Hong Kong Offer Shares and in multiples
of that number of Hong Kong Offer Shares as set out in the table below. No application
for any other number of Hong Kong Offer Shares will be considered and such an
application is liable to be rejected.
If you are applying through the White Form eIPO service, you may refer to the
table below for the amount payable for the number of Hong Kong Offer Shares you have
selected. Y ou must pay the respective amount payable on application in full upon
application for Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, your broker or custodian
may require you to pre-fund your application in such amount as determined by the broker
or custodian, based on the applicable laws and regulations in Hong Kong. Y ou are
responsible for complying with any such pre-funding requirement imposed by your
broker or custodian with respect to the Hong Kong Offer Shares you applied for.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
200 6,060.51 3,000 90,907.66 40,000 1,212,102.00 500,000 15,151,275.00
400 12,121.02 4,000 121,210.20 50,000 1,515,127.50 600,000 18,181,530.00
600 18,181.54 5,000 151,512.76 60,000 1,818,153.00 700,000 21,211,785.00
800 24,242.05 6,000 181,815.30 70,000 2,121,178.50 800,000 24,242,040.00
1,000 30,302.56 7,000 212,117.86 80,000 2,424,204.00 900,000 27,272,295.00
1,200 36,363.05 8,000 242,420.40 90,000 2,727,229.50 1,000,000 30,302,550.00
1,400 42,423.56 9,000 272,722.96 100,000 3,030,255.00 1,200,000 36,363,060.00
1,600 48,484.08 10,000 303,025.50 200,000 6,060,510.00 1,400,000 42,423,570.00
1,800 54,544.59 20,000 606,051.00 300,000 9,090,765.00 1,600,000 48,484,080.00
2,000 60,605.10 30,000 909,076.50 400,000 12,121,020.00 1,838,200
(1) 55,702,147.41
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee
and AFRC transaction levy. If your application is successful, brokerage will be paid to the Exchange
Participants (as defined in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading
fee and AFRC transaction levy are paid to the Stock Exchange (in the case of the SFC transaction levy,
collected by the Stock Exchange on behalf of the SFC; and in the case of the AFRC transaction levy,
collected by the Stock Exchange on behalf of the AFRC).
No application for any other number of Hong Kong Offer Shares will be considered
and any such application is liable to be rejected.
IMPORTANT
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If there is any change in the following expected timetable, our Company will issue
an announcement to be published on the website of the Stock Exchange at
www.hkexnews.hk and the website of our Company at www.jinxunec.com .
Hong Kong Public Offering commences .................... .9:00 a.m. on Wednesday,
December 31, 2025
Latest time for completing electronic applications under
the White Form eIPO service through the designated
website at www.eipo.com.hk (2) ........................... 1 1:30 a.m. on Tuesday,
January 6, 2026
Application lists of the Hong Kong Public Offering open (3) ....... 1 1:45 a.m. on Tuesday,
January 6, 2026
Latest time for (a) completing full payment of
application monies via the White Form eIPO
service, or; (b) giving electronic application
instructions to HKSCC (4) ............................. .12:00 noon on Tuesday,
January 6, 2026
If you are instructing your broker or custodian who is a HKSCC Participant to submit
HKSCC EIPO applications on your behalf through HKSCC’s FINI system in accordance with
your instruction, 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 (3) ..... .12:00 noon on Tuesday,
January 6, 2026
(1) Announcement of the level of indications of interest
in the International Offering, the level of applications
in the Hong Kong Public Offering and the basis of
allocation of the Hong Kong Offer Shares to be
published on the website of the Stock Exchange
at www.hkexnews.hk and our website
at www.jinxunec.com (6) .............................n o later than 11:00 p.m.
on Thursday,
January 8, 2026
EXPECTED TIMETABLE (1)
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(2) Results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety of
channels, including:
 in the announcement to be published on
the website of the Stock Exchange
at www.hkexnews.hk and our website
at www.jinxunec.com ...........................n o later than 11:00 p.m.
on Thursday,
January 8, 2026
 from the designated results of allocations
website at www.iporesults.com.hk
(alternatively: www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function ........................ from 11:00 p.m. on
Thursday,
January 8, 2026
to 12:00 midnight on
Wednesday,
January 14, 2026
 from the allocation results telephone enquiry
by calling +852 2862 8555 between 9:00 a.m.
and 6:00 p.m. on ............................................ Friday,
January 9, 2026,
Monday,
January 12, 2026,
Tuesday,
January 13, 2026 and
Wednesday,
January 14, 2026
Share certificates in respect of wholly or partially successful
applications pursuant to the Hong Kong Public Offering to
be despatched or deposited into CCASS on or before
(7) .................. Thursday,
January 8, 2026
White Form e-Refund payment instructions/refund checks
in respect of (i) wholly or partially successful applications
(if applicable) and (ii) wholly or partially unsuccessful
applications pursuant to the Hong Kong Public Offering
to be despatched on or before
(8)(9) .................................... Friday,
January 9, 2026
Dealings in the Shares on the Stock Exchange
expected to commence ................................... .9:00 a.m. on Friday,
January 9, 2026
EXPECTED TIMETABLE (1)
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Notes:
(1) All times and dates refer to Hong Kong local times and dates, except as otherwise stated.
(2) Y ou will not be permitted to submit your application under the White Form eIPO service through the
designated website at www.eipo.com.hk after 11:30 a.m. on the last day for lodging 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 lodging applications, when the application lists close.
(3) If there is/are a “black” rainstorm warning signal, a tropical cyclone warning signal number eight or above
and/or Extreme Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Tuesday,
January 6, 2026, the application lists will not open and will close on that day. See the section headed “How
to Apply for Hong Kong Offer Shares — E. Severe Weather Arrangements” in this prospectus.
(4) Applicants who apply for the Hong Kong Offer Shares through HKSCC EIPO channel by instructing your
broker or custodian to give electronic application instruction on your behalf to HKSCC via HKSCC’s FINI
system should refer to the section headed “How to Apply for Hong Kong Offer Shares — A. Applications for
Hong Kong Offer Shares — 2. Application Channels” in this prospectus.
(5) None of the websites or any of the information contained on the websites forms part of this prospectus.
(6) Share certificates for the Hong Kong Offer Shares are expected to be issued on Thursday, January 8, 2026 but
will only become valid evidence of title provided that (i) the Global Offering has become unconditional in all
respects, and neither of the Underwriting Agreements has been terminated in accordance with its terms, prior
to 8:00 a.m. on the Listing Date, which is expected to be on or around Friday, January 9, 2026. Investors who
trade Shares on the basis of publicly available allocation details before the receipt of share certificates or
before the share certificates becoming valid certificates of title do so entirely at their own risk, (ii) the right
of termination as described in the paragraph headed “Grounds for Termination” under the section headed
“Underwriting” in this prospectus has not been exercised and has lapsed.
(7) White Form e-Refund payment instruction or refund checks will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering. Part of the applicant’s Hong Kong
identity card number or passport number, or, if the application is made by joint applicants, part of the Hong
Kong identity card number or passport number of the first-named applicant, provided by the applicant(s) may
be printed on the refund check, if any. Such data would also be transferred to a third party for refund purpose.
Banks may require verification of an applicant’s Hong Kong identity card number or passport number before
cashing the refund check. Inaccurate completion of an applicant’s Hong Kong identity card number or passport
number may lead to delay in encashment of or may invalidate the refund check. Further information is set out
in the section headed “How to Apply for Hong Kong Offer Shares” in this prospectus.
(8) Applicants who have applied through the White Form eIPO service by paying the application monies through
single bank accounts may have refund monies (if any) despatched to the bank account in the form of White
Form e-Refund payment instructions. Applicants who apply via the White Form eIPO service by paying the
application monies through multiple bank accounts may have refund monies (if any) despatched to the address
as specified in their application instructions in the form of refund checks by ordinary post and at their own risk.
Share certificates and/or refund checks will be dispatched by ordinary post, at the applicants’ risk, to the
addresses specified in the relevant applications.
Applicants who apply via HKSCC EIPO channel should refer to the section headed “How to Apply for Hong
Kong Offer Shares — D. Despatch/collection of Share Certificates and Refund of Application Monies” in this
prospectus for details.
Further information is set out in the sections headed “How to Apply for Hong Kong Offer Shares — D.
Despatch/collection of Share Certificates and Refund of Application Monies.”
EXPECTED TIMETABLE (1)
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The above expected timetable is a summary only. Y ou should refer to the sections headed
“Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares” in this
prospectus for details of the structure of the Global Offering, including the conditions of the
Global Offering, and the procedures for application for the Hong Kong Offer Shares.
If the Global Offering does not become unconditional or is terminated in accordance with
its terms, the Global Offering will not proceed. In such case, the Company will make an
announcement as soon as practicable thereafter.
EXPECTED TIMETABLE (1)
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IMPORTANT NOTICE TO INVESTORS
This prospectus is issued by our Company solely in connection with the Hong
Kong Public Offering and does not constitute an offer to sell or a solicitation of an
offer to buy any security other than the Hong Kong Offer Shares offered by this
prospectus pursuant to the Hong Kong Public Offering. This prospectus may not be
used for the purpose of, and does not constitute, an offer or a solicitation of an offer
to subscribe for or buy, any security 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 and the offering and sale of the Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under
the applicable securities laws of such jurisdictions pursuant to registration with or
authorization by the relevant securities regulatory authorities or an exemption
therefrom.
Y ou 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 Sole Sponsor, the Sponsor-Overall Coordinator, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead
Managers, any of the Underwriters, any of our or their respective directors, officers or
representatives, or any other person or party involved in the Global Offering.
Page
EXPECTED TIMETABLE ........................................... i v
CONTENTS ...................................................... viii
SUMMARY ....................................................... 1
DEFINITIONS AND ACRONYMS ..................................... 2 2
GLOSSARY OF TECHNICAL TERMS ................................. 3 5
FORW ARD-LOOKING STATEMENTS ................................. 3 6
RISK FACTORS ................................................... 3 8
CONTENTS
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W AIVER FROM STRICT COMPLIANCE WITH THE REQUIREMENTS
UNDER THE LISTING RULES ..................................... 7 7
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL
OFFERING ..................................................... 8 0
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING ..... 8 5
CORPORATE INFORMATION ....................................... 9 0
INDUSTRY OVERVIEW ............................................ 9 2
REGULATORY OVERVIEW ......................................... 1 1 6
HISTORY AND CORPORATE STRUCTURE ............................ 1 5 1
BUSINESS ........................................................ 1 6 3
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS .......... 2 6 6
DIRECTORS AND SENIOR MANAGEMENT ........................... 2 7 0
SHARE CAPITAL .................................................. 2 8 2
SUBSTANTIAL SHAREHOLDERS .................................... 2 8 4
FINANCIAL INFORMATION ........................................ 2 8 6
FUTURE PLANS AND USE OF PROCEEDS ............................ 3 4 8
CORNERSTONE INVESTORS ........................................ 3 5 1
UNDERWRITING ................................................. 3 5 8
STRUCTURE OF THE GLOBAL OFFERING ........................... 3 7 1
HOW TO APPLY FOR HONG KONG OFFER SHARES ................... 3 8 2
APPENDIX I – ACCOUNTANTS’ REPORT ........................ I - 1
APPENDIX II – UNAUDITED PRO FORMA FINANCIAL
INFORMATION ............................... II-1
APPENDIX III – TAXATION AND FOREIGN EXCHANGE ............ III-1
CONTENTS
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APPENDIX IV – SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS .................... I V - 1
APPENDIX V – SUMMARY OF THE ARTICLES OF ASSOCIATION ... V - 1
APPENDIX VI – STATUTORY AND GENERAL INFORMATION ....... VI-1
APPENDIX VII – DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND DOCUMENTS ON DISPLAY ..... VII-1
CONTENTS
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This summary aims to give you an overview of the information contained in this
prospectus. As this is a summary, it does not contain all the information that may be
important to you. Y ou should read this prospectus in its entirety before you decide to
invest in the Offer Shares.
There are risks associated with any investment. Some of the particular risks in
investing in the Offer Shares are set out in the section entitled “Risk Factors” in this
prospectus. Y ou should read that section carefully before you decide to invest in the
Offer Shares.
OVERVIEW
We are a leading manufacturer of high-quality copper cathodes, with a strong presence in
DR Congo and Zambia. According to Frost & Sullivan, as of December 31, 2024, we ranked
fifth among PRC copper cathode producers by production volume in both DR Congo and
Zambia, and were the only PRC company to rank among the top five in both jurisdictions.
Specifically, we produced approximately 16.0 thousand tons and 5.0 thousand tons of copper
cathodes in DR Congo and Zambia in 2024. Among PRC non-state-owned enterprises, we
ranked third in DR Congo with a market share of 0.9% and first in Zambia with a market share
of 0.8% in terms of production volume in 2024.
OUR BUSINESS
Our core business focuses on developing and supplying premium copper resources to
cater China’s substantial copper demand. Leveraging Africa’s rich copper reserves, we have
strategically expanded production capacity and achieved significant integration across the
industrial value chain. We have established advanced copper cathode smelting operations in
DR Congo and Zambia, considerably enhancing our economic efficiency and market position.
Furthermore, capitalizing on the natural coexistence of copper and cobalt within African ore
reserves, we are proactively developing downstream cobalt-related production, strategically
positioning ourselves in the rapidly growing new energy materials sector.
Our Operations
We started from engaging in the trading of non-ferrous metals. After accumulating
experience in the industry, we commenced the business of localized processing and smelting
of copper in Zambia and DR Congo in 2017 and 2023, respectively, and gradually developed
into our current business model that integrates mineral processing, smelting and trading of
non-ferrous metals. We have a stable supply of copper raw materials based on long-term
cooperation with suppliers, and we believe that our more than a decade of experience in the
copper industry and our ability to produce high-quality copper-related products distinguish us
from our competitors.
SUMMARY
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Our operations cover ore processing, smelting, as well as sales of copper products and
trading of non-ferrous metals. The processing and smelting of copper ores are primarily carried
out by our local production facilities located in Zambia and DR Congo, respectively. As of the
Latest Practicable Date, save for the cobalt processing plant under construction in China, we
own four production facilities, which include two copper smelters and one copper concentrate
flotation plant in Zambia, and one copper smelter in DR Congo. Our non-ferrous metal trading
business is conducted primarily through our subsidiaries in Singapore and China. During the
Track Record Period, we generated revenue from (i) the production and sale of copper
cathodes; (ii) the production and sale of copper concentrates; and (iii) the trading of
non-ferrous metal products.
Production and Sale of Copper Cathodes
We produce copper cathodes in Zambia and DR Congo. We operate two copper smelters
in Zambia, namely Zambia copper smelter I and Zambia copper smelter II, and one copper
smelter in DR Congo, namely DR Congo copper smelter I. The Zambia copper smelter I and
Zambia copper smelter II commenced production in September 2019 and March 2022,
respectively, while the DR Congo copper smelter I commenced production in August 2023. Our
copper smelters produce copper cathodes using a hydrometallurgical process that primarily
involves grinding, leaching, extraction and electrowinning utilizing copper ores. During the
Track Record Period, the copper cathodes we produced were primarily sold to a variety of
commodity traders in Chinese Mainland.
Production and Sale of Copper Concentrates
We produce copper concentrates in Zambia. Our Zambian subsidiary operates a copper
concentration flotation plant, namely Zambia flotation plant. The Zambia flotation plant
commenced production in October 2017. We produce copper concentrates by crushing and
grinding the ores and separating metals from waste rocks using a flotation process, and then
classifying and dehydrating. During the Track Record Period, the copper concentrates we
produced were primarily sold to local smelting companies. In addition, we also sold
insignificant amount of copper concentrates to customers operating in Chinese Mainland.
Trading of Non-ferrous Metal Products
We also procure non-ferrous metal products from local suppliers in Peru and China, and
primarily sell to our customers through our subsidiaries in Singapore and China. Non-ferrous
metal products we trade primarily include copper, zinc, lead and silver. We aim to further
enhance our presence in Singapore, leveraging its incomparable attractiveness in providing tax
incentives to foreign investors to build a regional hub that facilitates our overseas financing
and trading activities. We serve both upstream suppliers and downstream customers in trading
non-ferrous metals by leveraging our advantages in: (i) extensive raw material procurement
capabilities in covering both large and mid to small mines with a global reach, especially
serving state-owned enterprises with limited personnel to oversee the raw material procurement
process; (ii) diversified selection criteria among mining sites where single products from the
SUMMARY
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upstream suppliers are unable to fully meet the non-standard quality requirements of
downstream customers in the absence of the value-added services, the downstream customers
are likely to incur additional time and resources to source their desired products, which might
further prolong their overall procurement process; and (iii) flexible and inclusive payment
terms to cater both state-owned enterprises and private companies in facilitating delivery
efficiency. During the Track Record Period, the non-ferrous products we procured were mainly
sold to the commodity traders and producers operating in Chinese Mainland and Peru. The
downstream customers of our non-ferrous metal trading business are considered mainly of
large-scale non-ferrous metal smelting enterprises with considerable demand of non-ferrous
metals in the PRC. In addition, we also received orders on an ad hoc basis from mid- to small
non-ferrous metal trading enterprises in the PRC.
The following table sets out a breakdown of revenue by geographic location
(1) of our
customers for the years/periods indicated:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
(unaudited)
Singapore /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 27,989 4.1 406,455 23.0 169,916 28.5 496,828 51.5
Switzerland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 11,718 1.7 265,917 15.0 106,523 17.9 128,917 13.4
Chinese Mainland /H1118/H1118/H1118/H1118241,754 37.9 350,521 51.9 634,032 35.8 199,705 33.5 120,965 12.6
Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118220,925 34.7 83,610 12.4 25,598 1.4 – – 86,397 9.0
British Virgin Islands /H1118/H1118/H1118107,295 16.8 192,513 28.5 266,201 15.0 98,266 16.5 78,255 8.1
Luxembourg /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 170,167 9.6 20,092 3.4 47,241 4.9
Peru /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,827 1.1 – – 514 0.1 514 0.1 4,003 0.4
Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,502 9.5 9,350 1.4 949 0.1 949 0.1 1,179 0.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118637,303 100.0 675,701 100.0 1,769,833 100.0 595,965 100.0 963,785 100.0
Note:
(1) The geographic location is based on the place of registration of the respective customer.
SUMMARY
–3–


--- page 15 ---
The following table sets out a breakdown of revenue by delivery location of our
customers for the years/periods indicated:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
(unaudited)
DRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 126,370 18.7 877,004 49.6 308,104 51.7 699,681 72.6
Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118388,723 61.0 288,399 42.7 352,912 19.9 141,098 23.7 127,721 13.3
The PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241,754 37.9 260,932 38.6 409,070 23.1 112,465 18.9 84,029 8.7
Peru /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,826 1.1 – – 130,847 7.4 34,298 5.8 52,354 5.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118637,303 100.0 675,701 100.0 1,769,833 100.0 595,965 100.0 963,785 100.0
The following table sets forth our gross profit and gross profit margin by business lines
for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Copper production and
processing
Copper cathodes /H1118/H1118/H1118/H1118/H1118155,250 47.3 121,525 30.0 339,821 27.7 130,140 29.0 208,858 25.2
Copper concentrates /H1118/H1118/H11189,689 15.5 (1,139) (9.4) (2,039) (215.5) (36) (3.7) 508 43.1
Cobalt hydroxide /H1118/H1118/H1118/H1118/H1118– – – – – – – – 2,694 25.1
164,939 42.2 120,386 28.9 337,782 27.5 130,104 29.0 212,060 25.3
Trading of non-ferrous
metal products /H1118/H1118/H1118/H11185,554 2.3 9,757 3.8 29,885 5.5 15,549 10.6 10,620 8.6
Total/Overall /H1118/H1118/H1118/H1118/H1118/H1118/H1118170,493 26.8 130,143 19.3 367,667 20.8 145,653 24.4 222,680 23.1
SUMMARY
–4–


--- page 16 ---
The following table sets out our sales volume and average selling price of copper
cathodes, copper concentrates and cobalt hydroxide for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
Sales
volume ASP (1)
Sales
volume ASP (1)
Sales
volume ASP (1)
Sales
volume ASP (1)
Sales
volume ASP (1)
Tons
RMB’
thousand/
ton Tons
RMB’
thousand/
ton Tons
RMB’
thousand/
ton Tons
RMB’
thousand/
ton Tons
RMB’
thousand/
ton
Copper cathodes /H1118/H1118/H1118/H11185,886.4 55.8 7,384.1 54.8 19,851.1 61.9 7,195 62.3 12,952.9 63.9
Copper concentrates /H1118/H11181,170.3 53.3 229.1 53.1 17.8 53.1 17.8 52.9 21.2 55.6
Cobalt hydroxide /H1118/H1118/H1118/H1118– – – – – – – – 83.7 128.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,056.7 7,613.2 19,868.9 7,213.3 13,057.8
Note:
(1) Representing revenue generated from sales of the respective products divided by the sales volume calculated
in metal ton taking into account the actual metal content.
The following table sets out our production volume of copper cathodes, copper
concentrates and cobalt hydroxide for the years/periods indicated:
Y ear ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
Production volume (tons)
Copper cathodes /H1118/H1118/H1118/H11185,949.8 7,368.1 20,934.8 7,220.6 12,496.2
Copper concentrates /H1118 1,178.4 210.5 32.0 17.8 9.0
Cobalt hydroxide /H1118/H1118/H1118 – – 128.2 – 171.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,128.2 7,578.6 21,095.0 7,238.4 12,676.2
During the Track Record Period, the selling price of our copper products fluctuated in line
with market changes. Our copper cathodes and copper concentrates were actively tracking the
London Metal Exchange (“ LME”) spot copper price quotations quoted on the London Metal
Exchange, with the specific discount levels determined through a tendering process. The
average selling price of our copper products plummeted significantly during second half of
2022 contributed by global concerns on the narrowed copper production in China due to the
impact of COVID-19, before further recovered at the end of 2022 driven by an improved
market sentiment globally. See “Financial Information” for a detailed discussion of the
fluctuations in our financial performance.
SUMMARY
–5–


--- page 17 ---
CUSTOMERS AND SUPPLIERS
During the Track Record Period, we have fostered a large-scale customer base spanning
copper cathodes trading companies, copper concentrates and non-ferrous metal producers and
traders in Chinese Mainland. We serve a broad range of state-owned enterprises in the mining
and metallurgy industries in China. Over the years, our ability to consistently meet and exceed
our customers’ high quality and sophisticated requirements has allowed us to develop and
retain strong relationships with them and attract more globally leading customers. Sales to our
largest customer in each year/period during the Track Record Period amounted to RMB281.4
million, RMB192.5 million, RMB266.2 million and RMB237.2 million, accounting for 44.2%,
28.5%, 15.0% and 24.6% of our total revenue during the respective period. Sales to our five
largest customers for the years/periods ended December 31, 2022, 2023, 2024 and the six
months ended June 30, 2025 accounted for 79.9%, 78.4%, 56.9% and 67.8% of our total
revenue during those years/periods.
During the Track Record Period, our major suppliers consist primarily of commodity
providers covering copper ore, nonferrous and chemical products, with the connection of both
state-owned enterprises and private companies around the world. In the selection of our
suppliers, we consider factors such as price, quality, reliability of supply, lead time, business
scale, production capability, and commercial reputation. Purchases from our largest supplier
and five largest suppliers as a percentage of cost of sales in each year/period during the Track
Record Period showed an increasing trend. Purchases from our largest supplier in each
year/period during the Track Record Period amounted to RMB28.3 million, RMB57.1 million,
RMB296.7 million and RMB269.2 million, accounting for 6.1%, 10.5%, 21.2% and 36.3% of
our cost of sales during the respective year/period. Purchases from our five largest suppliers
for the years/periods ended December 31, 2022, 2023, 2024 and the six months ended June 30,
2025 accounted for 25.1%, 37.6%, 57.8% and 62.1% of our cost of sales during those
years/periods. See “Business — Sales and Marketing — Customers,” “Business — Suppliers
and Contractors — Suppliers” and “Risk Factors — Risks Relating to Our Business and
Industry — We may be exposed to supplier concentration risk” for more detailed discussions.
Due to the nature of our business, certain of our five largest suppliers, or their associates,
were also our customers, which is an industry norm in the copper cathode and non-ferrous
metal industries, as advised by Frost & Sullivan. Our Directors confirm that the transactions
with the overlapping customers and suppliers were conducted in the ordinary course of
business under normal commercial terms. See “Business — Overlapping of Customers and
Suppliers” for details.
SUMMARY
–6–


--- page 18 ---
INTELLECTUAL PROPERTY
We rely on a combination of trademark, trade secret, patent, copyright and other
intellectual property laws, as well as confidentiality agreements with our employees, suppliers,
customers and others, to protect our intellectual property. As of the Latest Practicable Date, we
had 30 registered patents, 31 copyrights and 12 trademarks in China, all of which are material
to our business. See “Business — Intellectual Property” for more detailed discussions in this
regard.
OUR COMPETITIVE STRENGTHS
 Strong Presence in Resource-rich Regions of Africa, particularly DR Congo and
Zambia, with a High Return on Investment
 Strategically Positioned Production Capacity Aligned with the “Going Global”
Strategy in Resource-Rich Regions
 Efficient Raw Material Utilization and Industry-Leading Technical Capabilities
Drive Cost Control
 Strong Service Capabilities Attracting Leading Industry Clients
 Strategic Advantage of Y unnan Headquarters
 Experienced and Skilled Management Team with Extensive Industry Expertise
For more details, see “Business — Competitive Strengths.”
DEVELOPMENT STRATEGY
 Further Expansion of Our Production Capacity
 Expand Cobalt Industry Chain and Strategically Enter the New Energy Materials
Sector
 Extend the Upstream of the Industry Chain and Seek Strategic Acquisition
Opportunities
 Strengthen Talent Recruitment, Staff Training, and Corporate Social Responsibility
Practices
For more information on the competitive landscape of our industry, see “Industry
Overview.” For more information about our competitive strengths, see “Business —
Development Strategy.”
SUMMARY
–7–


--- page 19 ---
RISK FACTORS
There are certain risks and uncertainties involved in our operations and the investing in
our Offer Shares, some of which are beyond our control. We have categorized these risks and
uncertainties into: (i) risks relating to doing business in overseas jurisdictions in which we
have operations; (ii) risks relating to our business and industry; (iii) risks relating to doing
business in the PRC; and (iv) risks relating to the Global Offering. We believe the most
significant risks we face include but are not limited to the following:
 Emerging markets are subject to greater risks than more developed markets, and
financial turmoil in any emerging market could disrupt our business.
 High rates of inflation in the overseas jurisdictions we operate in could have a
material adverse effect on our business, financial condition and results of
operations.
 We are exposed to the market forces in the copper and cobalt industry, including the
current and expected supply and demand dynamics of copper and cobalt.
 We may be exposed to supplier concentration risk.
 Our business and results of operations are highly dependent upon the global prices
of copper and other non-ferrous metals, which may be influenced by various factors
including global economic growth and international supply and demand.
 We may be exposed to customer concentration risk.
 Governmental import or export controls could materially and adversely affect our
business, results of operations, financial condition and prospects.
 Changes in the economic conditions, as well as the interpretation and
implementation of the relevant laws, rules and regulations, may affect our business,
prospects, results of operations, financial condition, and cash flows.
 There has been no prior public market for our H Shares and an active trading market
for our H Shares may not develop. Market performance of our Shares on the NEEQ
may not be indicative of our H Shares.
 The market price and trading volume of our H Shares may be volatile, which could
result in substantial losses for investors who purchase our H Shares in the Global
Offering.
See “Risk Factors” for more detailed discussions in this regard.
SUMMARY
–8–


--- page 20 ---
COMPLIANCE AND LEGAL PROCEEDINGS
During the Track Record Period, we had certain legal proceedings and non-compliance
incidents with respect to the (i) shortfall in contributions to the social insurance and housing
provident funds; (ii) failure to complete the administrative filings of the lease agreements; (iii)
suspension of the plant related to one of our subsidiaries; (iv) environmental restoration order
issued to one of our subsidiaries; and (v) suspension of the mining and non-mining rights of
one of our subsidiaries. See “Business — Compliance and Legal Proceedings” for details. Our
Directors confirm that we had complied with the relevant PRC laws and regulation in all
material respects and save as disclosed in the “Business” section and in the “Risk Factors”
section, we had obtained all requisite licenses, approvals and permits from relevant authorities
in China during the Track Record Period and up to the Latest Practicable Date.
OUR CONTROLLING SHAREHOLDERS
Immediately upon completion of the Global Offering and without taking into account any
Shares which may be issued pursuant to the exercise of the Over-allotment Option, our ultimate
Controlling Shareholder, Mr. Y uan, will, directly or through Heli Investment, hold
approximately 74.94% of the total share capital of our Company. Heli Investment is our share
incentive platform which is controlled by Mr. Y uan, acting as its general partner, by managing
its daily affairs and exercising its voting rights on behalf of Heli Investment as our Shareholder
pursuant to the partnership agreement of Heli Investment. Mr. Y uan will, directly or through
Heli Investment, control the exercise of more than 30% of the voting power at general meetings
of our Company upon Listing. Accordingly, Mr. Y uan and Heli Investment constitute a group
of our Controlling Shareholders under the Listing Rules. For details of our Controlling
Shareholders, see “Relationship with our Controlling Shareholders.”
IMPACT OF THE COVID-19 OUTBREAK
During the COVID-19 outbreak in 2022, we experienced approximately 10 days of
customs clearance delays. However, such delays did not affect customer payment schedules,
and all copper cathode customers fulfilled their payment obligations as stipulated in the
contracts. This was attributable to the adoption of the free carrier terms in our sales model,
under which the seller is responsible for transporting goods to the designated port and
completing export formalities; upon arrival at the designated port, the buyer assumes all related
cost and risks, such as logistics costs and detention risks. Under this model, customers are
required to prepay 95% of the provisional payment in the month of shipment, with the
remaining 5% settled after the quotation period concludes. There was also a logistics delay in
steel supply occurred during the construction of the DR Congo copper smelter I, which was
originally scheduled for dispatch in mid-May 2022, with an expected arrival at the construction
site for deployment in September 2022. Due to the impact of the COVID-19 outbreak, the
shipment was not formally exported until August 4, 2022, and ultimately arrived at the site in
April 2023, resulting in a delay of seven months. However, we promptly addressed the
situation by procuring temporary steel locally and flexibly adjusting the project schedule.
Thus, this incident did not cause significant adverse effects on the construction project.
SUMMARY
–9–


--- page 21 ---
Although global concerns over narrowing copper production from China have pushed up
the selling price of our copper products, the COVID-19 outbreak did not have a substantial
impact on our production and sales of copper products. For example, we produced 5,949.8 tons
and 7,368.1 tons of copper cathodes in 2022 and 2023, respectively, all of which were sold
promptly during the COVID-19 outbreak. Therefore, our Directors are of the view that
COVID-19 had no material adverse effect to our business operations and financial performance
during the Track Record Period.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables set forth a summary of our consolidated financial information for the
Track Record Period, are derived from the Accountants’ Report set out in Appendix I to this
prospectus. The summary consolidated financial information set forth below should be read
together with, and is qualified in its entirety by reference to, the Accountants’ Report set out
in Appendix I to this prospectus, including the related notes. Our consolidated financial
information was prepared in accordance with IFRS Accounting Standards.
Summary of Consolidated Statements of Profit or Loss and Other Comprehensive Income
The following table sets forth a summary of our consolidated statements of profit or loss
and other comprehensive income for the years/periods indicated.
Y ears ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118637,303 675,701 1,769,833 595,965 963,785
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(466,810) (545,558) (1,402,166) (450,312) (741,105)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170,493 130,143 367,667 145,653 222,680----- ----- ----- ----- -----
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,332 3,131 1,865 1,265 818
Other gains and losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,601) (35,255) (7,101) 15,237 11,555
Distribution and selling expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,498) (10,159) (11,626) (5,163) (6,252)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(44,206) (48,175) (81,173) (36,265) (59,552)
Profit from operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,520 39,685 269,632 120,727 169,249
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,811) (13,410) (26,870) (12,218) (8,045)
Share of losses of an associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,823) (252) – – –
Profit before taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,886 26,023 242,762 108,509 161,204
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,382) 3,123 (40,324) (15,425) (26,222)
Profit for the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883,504 29,146 202,438 93,084 134,982
SUMMARY
–1 0–


--- page 22 ---
Y ears ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Other comprehensive income for
the year/period
Item that are or may be reclassified
subsequently to profit or loss:
Exchange differences on translation of
financial statements of overseas
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,941 3,442 3,464 1,197 (1,550)
Other comprehensive income for
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,941 3,442 3,464 1,197 (1,550)-----
----- ----- ----- -----
Total comprehensive income for
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,445 32,588 205,902 94,281 133,432
Non-IFRS Measures
To supplement our consolidated statements of profit or loss and other comprehensive
income presented in accordance with IFRS Accounting Standards, we also use EBITDA
(non-IFRS measure), as additional financial measures, which are not required by, or presented
in accordance with IFRS. We believe that the presentation of such non-IFRS measure facilitate
comparisons of the operating performance from period to period and company to company by
eliminating potential impacts of certain items. We believe that the presentation of such
non-IFRS measure when shown in conjunction with the corresponding IFRS measure provides
useful information to potential investors and management in facilitating a comparison of our
operating performance from period to period by eliminating potential impacts of certain items.
However, the use of non-IFRS measures has limitations as an analytical tool, and you
should not consider them in isolation from, or as a substitute for analysis of, our results of
operations or financial conditions as reported under IFRS. In addition, the non-IFRS financial
measures may be defined differently from similar terms used by other companies.
SUMMARY
–1 1–


--- page 23 ---
We define EBITDA (non-IFRS measure), as profit for the year adjusted by adding back
items including income tax, finance costs, interest income and depreciation and amortization.
The following tables reconcile our EBITDA (non-IFRS measure) for the years/periods
indicated:
Y ear ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
(RMB’000) (RMB’000)
(unaudited)
Profit for the year /H1118/H1118/H1118/H1118/H111883,504 29,146 202,438 93,084 134,982
Add:
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,382 (3,123) 40,324 15,425 26,222
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,811 13,410 26,870 12,218 8,045
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,032) (1,309) (175) (91) (283)
Depreciation and
amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,700 21,519 42,448 18,334 26,120
EBITDA (non-IFRS
measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,365 59,643 311,905 138,970 195,086
Our net profit decreased significantly from RMB83.5 million in 2022 to RMB29.1 million
in 2023, primarily due to (i) the increases in our capital investment and interest expenses in
connection with the construction of the DR Congo copper smelting project; (ii) a decrease in
our gross profit in 2023 as our DR Congo copper smelting project had yet to achieve economies
of scale prior to its commencement of operations in August 2023 and remained in the ramp-up
phase throughout the year; and (iii) the impairment loss recognized on the loans granted to an
associate, Jiangxi Tungsten Jinxun Resources Africa SAS. Our net profit grew significantly
from RMB29.1 million in 2023 to RMB202.4 million in 2024, mainly as a result of the
increases in our revenue and gross profit led by the expansion of our production capacity in
2024. Our net profit further increased from RMB93.1 million in the six months ended June 30,
2024 to RMB135.0 million in the six months ended June 30, 2025, primarily driven by the
growth in our revenue and gross profit supported by the increased production volume in the six
months ended June 30, 2025.
SUMMARY
–1 2–


--- page 24 ---
During the Track Record Period, we generated revenue primarily from (i) production and
sale of copper cathodes; (ii) production and sale of copper concentrates; and (iii) trading of a
variety of non-ferrous metal products. The following table sets forth our revenue by business
line for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
(unaudited)
Copper production and
processing
Copper cathodes /H1118/H1118/H1118/H1118/H1118/H1118/H1118328,220 51.5 404,785 59.9 1,228,967 69.4 448,256 75.2 828,021 85.9
Copper concentrates /H1118/H1118/H1118/H1118/H111862,396 9.8 12,177 1.8 946 0.1 946 0.3 1,179 0.1
Cobalt hydroxide /H1118/H1118/H1118/H1118/H1118/H1118– – – – – – – – 10,739 1.2
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118390,616 61.3 416,962 61.7 1,229,913 69.5 449,202 75.5 839,939 87.2
Trading of non-ferrous
metal products /H1118/H1118/H1118/H1118/H1118/H1118246,687 38.7 258,739 38.3 539,920 30.5 146,763 24.5 123,846 12.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118637,303 100.0 675,701 100.0 1,769,833 100.0 595,965 100.0 963,785 100.0
In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, our revenue
generated from copper production and processing amounted to RMB390.6 million, RMB417.0
million, RMB1,229.9 million, RMB449.2 million and RMB839.9 million, respectively,
accounting for 61.3%, 61.7%, 69.5%, 75.5% and 87.2% of our total revenue in the respective
year/period. The significant increases in our revenue in 2024 and in the six months ended June
30, 2025 were mainly attributed to (i) the increased production of copper cathodes following
the production facilities in DR Congo commenced operation; (ii) a spike of the average selling
price as a result of the higher copper prices quoted on the LME and (iii) the supply shortage
facing by the global copper market. As the global demand for copper is projected to surge in
the next decade, driven by the surge in demand in the renewable energy and electric vehicle
industries and massive infrastructure spending in emerging markets, copper prices are forecast
to rise in light of the emerging copper supply deficit globally, according to Frost & Sullivan.
In view of this, the average selling prices of our cooper cathodes and copper concentrates
demonstrated steady increase, which in turn had a positive impact on our revenue growth
during the Track Record Period. With the expansion of production capacity and the
successfully commissioning of our hydrometallurgical projects in Zambia and DR Congo, our
output of copper cathodes has also increased, enabling us to fully exploit market potentials
driven by the price surge of copper to achieve substantial growth in revenue during the same
periods.
SUMMARY
–1 3–


--- page 25 ---
In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, revenue from
trading of non-ferrous metal products amounted to RMB246.7 million, RMB258.7 million,
RMB539.9 million, RMB146.8 million and RMB123.8 million, respectively, accounting for
38.7%, 38.3%, 30.5%, 24.5% and 12.8% of our total revenue in the respective year or period.
See “Financial Information — Consolidated Statements of Profit or Loss and Other
Comprehensive Income” for more detailed discussions.
Summary of Consolidated Statements of Financial Position
The following table sets forth a summary of our consolidated statements of financial
position as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Total non-current assets /H1118/H1118/H1118/H1118/H1118398,272 592,401 694,451 750,747
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238,724 290,417 679,365 712,212
Total current liabilities /H1118/H1118/H1118/H1118/H1118263,066 466,381 763,688 697,917
Net current
(liabilities)/assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(24,342) (175,964) (84,323) 14,295
Total assets less current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118373,930 416,437 610,128 765,042
Total non-current liabilities /H1118/H1118 13,456 27,164 75,146 96,301
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360,474 389,273 534,982 668,741
We had net current assets of RMB14.3 million as of June 30, 2025, consisting of current
assets of RMB712.2 million and current liabilities of RMB697.9 million, which represented an
increase of RMB98.6 million from our net current liabilities of RMB84.3 million as of
December 31, 2024. The increase was mainly driven by (i) an increase of RMB32.6 million in
prepayments, deposits and other receivables, primarily due to the increased prepayments paid
to suppliers in line with the business expansion and (ii) an increase of RMB3.2 million in trade
receivables measured at FVTPL, mainly in line with our revenue growth in the respective
period, partially offset by (i) an increase of RMB23.6 million in trade payables at amortized
cost following our increased raw materials procurement following our enhanced production
capacity and (ii) an increase of RMB22.0 million in contract liabilities, mainly due to the
increase in our orders from the customers.
SUMMARY
–1 4–


--- page 26 ---
We had net current liabilities of RMB84.3 million as of December 31, 2024, consisting
of current assets of RMB679.4 million and current liabilities of RMB763.7 million, which
represented a decrease of RMB91.6 million from our net current liabilities of RMB176.0
million as of December 31, 2023. Such reduction of net current liabilities as of December 31,
2024 as compared with that as of December 31, 2023 was primarily attributable to (i) an
increase in inventories of RMB249.8 million as the operations of our DR Congo copper smelter
I ramped up during the year; (ii) an increase of cash and cash equivalents of RMB84.0 million,
mainly caused by the cash inflow from operation; (iii) an increase of prepayment, deposits and
other receivables totalled of RMB38.9 million, mainly attributed to the expansion of our
operations in DR Congo. The aforementioned increase of current assets as of December 31,
2024 as compared with that as of December 31, 2023 was partially offset by an increase of
current liabilities of RMB297.3 million primarily caused by the increase in trade payables
(including those recognized at amortized costs and FVTPL) of RMB216.1 million as a result
of the increase in purchases as our production in DR Congo ramped up during the year.
We had net current liabilities of RMB176.0 million as of December 31, 2023, consisting
of current assets of RMB290.4 million and current liabilities of RMB466.4 million, which
represented an increase of RMB151.6 million from our net current liabilities of RMB24.3
million as of December 31, 2022. The increase of the net current liabilities as of December 31,
2023 as compared with that as of December 31, 2022 was primarily attributable to the increase
in our current liabilities of RMB203.3 million, primarily due to (i) an increase in short term
bank and other borrowings of RMB114.0 million for financing the construction of the Anhui
cobalt processing plant project and the DR Congo copper smelter I; and (ii) an increase in trade
payables of RMB80.5 million as a result of the increase in purchases as our DR Congo copper
smelter I commenced operations. The increase in our current liabilities as of December 31,
2023 was partially offset by increase of the current assets of RMB51.7 million as of December
31, 2023 caused by the increase in inventories of RMB125.9 million since the commencement
of operation of our DR Congo copper smelter I in August 2023, partially offset by the decrease
in cash and cash equivalents of RMB39.2 million.
We recorded net assets of RMB360.5 million, RMB389.3 million, RMB535.0 million and
RMB668.7 million as of December 31, 2022, 2023, 2024 and June 30, 2025, respectively. The
significant increase of our net assets in 2022 was primarily driven by (i) the issuance of
additional ordinary shares amounting to RMB48.3 million; (ii) we recorded profit of RMB83.5
million for the year ended December 31, 2022; (iii) we recorded an increase in foreign
exchange reserve of RMB15.9 million due to the a strong U.S. dollar; and (iv) the dividends
distribution being RMB6.9 million. The increase in our net assets in 2023 were contributed by
(i) we recorded profit of RMB29.1 million for the year ended December 31, 2023; (ii) we
recorded an increase in foreign exchange reserve of RMB3.4 million due to a strong U.S.
dollar; and (iii) the dividends distribution being RMB4.4 million. The substantial growth in our
net assets in 2024 was primarily due to (i) we recorded profit of RMB202.4 million for the year
ended December 31, 2024; (ii) we recorded an increase in foreign exchange reserve of RMB3.5
million due to a strong U.S. dollar; and (iii) the dividends distribution being RMB60.7 million.
The significant increase of our net assets as of June 30, 2025 was primarily due to the increase
of RMB135.0 million in net profit.
SUMMARY
–1 5–


--- page 27 ---
Summary of Consolidated Statement of Cash Flows
The following table sets forth selected cash flow statement information for the
years/periods indicated:
Y ear ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
(RMB’000)
Net cash flows from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118202,180 43,329 292,558 111,533
Net cash flows used in
investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(200,686) (192,285) (171,001) (71,718)
Net cash flows from/(used in)
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,496 109,355 (38,406) (36,925)
Net increase/(decrease) in cash
and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H111851,990 (39,601) 83,151 2,890
Cash and cash equivalents at
the beginning of the year /H1118/H1118/H1118/H111827,001 79,062 39,876 123,901
Effect of foreign exchange rate
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871 415 874 (281)
Cash and cash equivalents at
the end of the year/period /H1118/H111879,062 39,876 123,901 126,510
See “Financial Information — Liquidity and Capital Resources — Cash Flows” for
details.
Key Financial Ratio
The following table sets forth certain of our key financial ratios as of the dates or for the
periods indicated:
Y ear ended December 31,
As of
June 30,
2022 2023 2024 2025
Profitability ratios
Gross profit margin (%) (1) /H1118/H1118/H111826.8% 19.3% 20.8% 23.1%
Net profit margin (%) (2) /H1118/H1118/H1118/H111813.1% 4.3% 11.4% 14.0%
Return on equity (%) (3) /H1118/H1118/H1118/H1118/H111828.8% 7.8% 43.8% 22.4%
Return on assets (%) (4) /H1118/H1118/H1118/H1118/H111817.0% 3.8% 17.9% 9.5%
SUMMARY
–1 6–


--- page 28 ---
As of December 31,
As of
June 30,
2022 2023 2024 2025
Liquidity ratios
Current ratio (times) (5) /H1118/H1118/H1118/H1118/H1118/H11180.9 0.6 0.9 1.0
Quick ratio (times) (6) /H1118/H1118/H1118/H1118/H1118/H1118/H11180.7 0.2 0.3 0.4
Capital adequacy ratio
Gearing ratio (%)
(7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824.6% 54.9% 50.2% 36.7%
Notes:
(1) Gross profit margin is calculated based on gross profit divided by revenue and multiplied by 100%.
(2) Net profit margin is calculated based on profit or loss for the period divided by revenue and multiplied
by 100%.
(3) Return on equity is calculated based on profit for the year/period divided by the arithmetic mean of the
opening and closing balances of total equity and multiplied by 100%.
(4) Return on assets is calculated based on profit for the year/period divided by the arithmetic mean of the
opening and closing balances of total assets and multiplied by 100%.
(5) Current ratio is calculated based on total current assets divided by total current liabilities.
(6) Quick ratio is calculated based on total current assets less inventories divided by total current liabilities.
(7) Gearing ratio is calculated based on total borrowings (including borrowings and lease liabilities) divided
by total equity multiplied by 100%.
See “Financial Information — Key Financial Ratio” for details.
In 2022, 2023 and 2024, our gross profit margin was 26.8%, 19.3% and 20.8%,
respectively. Our net profit margin was 13.1%, 4.3% and 11.4% in the corresponding periods.
The decreases in our respective margin ratios were primarily driven by (i) limited production
capacity in 2023 when the production facilities of Jinxun DR Congo were yet to reach the
designed production capacity, which subdued our total annual production capacity in the
corresponding period; (ii) the contraction of raw materials supply in 2023; and (iii) our fixed
costs, comprising of accumulated depreciation, accumulated amortization and labor costs,
continued to incurring. Our gross profit margin further decreased from 24.4% in the six months
ended June 30, 2024 to 23.1% in the six months ended June 30, 2025, primarily due to an
increased proportion of products from DR Congo, where the production costs were relatively
higher than in Zambia, leading to a decrease in gross profit margin of our copper production
and processing business. Our net profit margin increased to 14.0% in the six months ended June
30, 2025, primarily due to the significant increase in our revenue in line with our enhanced
production capacity in the respective period.
SUMMARY
–1 7–


--- page 29 ---
LISTING EXPENSES
Our listing expenses mainly include underwriting commissions, professional fees paid to
legal advisors, the Reporting Accountants and other professional parties for their services
rendered in relation to the Listing and the Global Offering.
Based on the Offer Price of HK$30.0 per Share, the total estimated listing expenses in
relation to the Global Offering are RMB54.8 million (HK$60.4 million), assuming the
Over-allotment Option is not exercised, which constitute approximately 5.5% of the gross
proceeds. Our total listing expenses consist of (i) underwriting-related expenses and fees
(including underwriting commissions, Stock Exchange trading fee, SFC and AFRC transaction
levy) of RMB25.1 million (HK$27.7 million); and (ii) non-underwriting-related expenses of
RMB29.7 million (HK$32.7 million), including (a) fees payable to the Sole Sponsor, legal
advisors and Reporting Accountants of RMB20.0 million (HK$22.1 million) and (b) other fees
and expenses of RMB9.7 million (HK$10.6 million). During the Track Record Period, we
recorded listing expenses as profit and loss of RMB0.2 million and as other receivables of
RMB10.9 million. Among the total listing expenses, approximately HK$6.1 million is expected
to be charged to profit or loss for the year ended December 31, 2025, and approximately
HK$54.1 million directly attributable to the issue of the Shares is expected to be deducted from
equity upon the completion of the Global Offering. Our Directors do not expect that such
expenses will have a material adverse effect on our results of operations for the year ended
December 31, 2025.
OFFERING STATISTICS
Based on an
Offer Price of
HK$30.00 per
Offer Share
Market capitalization of our Shares upon completion of the Global
Offering assuming the Over-allotment Option is not exercised (1) /H1118/H1118
HK$4,412
million
Unaudited pro forma adjusted net tangible assets per Offer
Share (2)(3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$12.03
Notes:
(1) The calculation of the market capitalization is based on 147,062,243 Shares expected to be in issue
immediately after completion of the Global Offering (assuming the Over-allotment Option is not
exercised).
(2) Please refer to Appendix II to this prospectus for the bases and assumptions in calculating this figure.
(3) No adjustment has been made to reflect any trading result or other transactions of our Group entered into
subsequent to June 30, 2025, including but not limited to the interim dividend for the six months ended
June 30, 2025 of RMB0.28 per share, in an aggregate amount of RMB30,883,000 which was approved
by extraordinary general meeting on September 12, 2025. The unaudited pro forma adjusted net tangible
assets attributable to equity shareholders of the Company per Share would have been decreased by
HK$0.23 per Share if the dividend declaration had been accounted for as of June 30, 2025.
SUMMARY
–1 8–


--- page 30 ---
FUTURE PLANS AND USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$1,042.6 million, assuming an Offer Price of HK$30.0 per Offer Share, after deducting the
underwriting commissions and estimated expenses paid or payable by us in connection with the
Global Offering and assuming that the Over-allotment Option is not exercised.
In line with our strategies, we intend to apply the net proceeds from the Global Offering
for the following purposes and in the amounts set forth below:
 approximately 80% of the net proceeds, or HK$834.1 million, will be used to
expand our core operations, including:
(i) approximately 25% of the net proceeds, or HK$260.7 million, will be used for
the upgrade of the hydrometallurgical processing capability of our DR Congo
copper smelter I, as well as the improvement of the production yield of its
cobalt hydroxide production line;
(ii) approximately 20% of the net proceeds, or HK$208.5 million, will be used for
equipment procurement and daily operations of the facility in Anhui Province;
(iii) approximately 20% of the net proceeds, or HK$208.5 million, will be used for
strategic acquisitions. As of the Latest Practicable Date, we had not identified
or committed to any acquisition targets; and
(iv) approximately 15% of the net proceeds, or HK$156.4 million, will be used to
improve and expand our R&D center in Kunming to further enhance our R&D
capabilities, attract local talents and contribute local employment.
 approximately 10% of the net proceeds, or HK$104.3 million, will be used to
repay certain of our interest-bearing bank borrowings with an aggregate
principal amount of approximately HK$105.8 million, which were used as
working capital. The interest rates for such borrowings range from
approximately 1.10% to 9.50%, with maturity dates spanning from February
2026 to September 2026.
 approximately 10% of the net proceeds, or HK$104.3 million, will be used for
working capital and general corporate purposes.
See “Future Plans and Use of Proceeds” for more detailed discussions in this regard.
SUMMARY
–1 9–


--- page 31 ---
DIVIDENDS
We are incorporated under the laws of the PRC. 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.
Under the applicable PRC laws and regulations, a PRC incorporated company is required to set
aside at least 10% of its after-tax profits each year, after making up previous years’
accumulated losses, if any, to contribute to certain statutory reserve funds until the aggregate
amount contributed to such funds reaches 50% of its registered capital. The company may pay
dividends out of after-tax profits after making up for accumulated losses and contributing to
statutory reserve funds as mentioned above.
In May 2022, stock dividends of 0.5 shares per share and cash dividends of RMB0.1 per
share in respect of the year ended December 31, 2021, aggregating to 34,314,511 shares and
RMB6,863,000, were approved by the shareholders of the Company. In May 2023, cash
dividends of RMB0.04 per share in respect of the year ended December 31, 2022, aggregating
to RMB4,412,000, was approved by the shareholders of the Company. In May 2024, cash
dividends of RMB0.05 per share in respect of the year ended December 31, 2023, aggregating
to RMB5,515,000, was approved by the shareholders of the Company. In August 2024, cash
dividends of RMB0.5 per share in respect of the six months ended June 30, 2024, aggregating
to RMB55,148,000 was approved by the shareholders of the Company. Subsequent to June 30,
2025, an interim dividend of RMB0.28 per share, in an aggregate amount of RMB30,883,000,
which was approved by the extraordinary general meeting convened on September 12, 2025.
We expect to pay a dividend no less than 20% of the profit after tax after Listing each
year, subject to our results of operations, cash flows, financial position, statutory and
regulatory restrictions on the dividends paid by us, future prospects and others factors which
we consider relevant. No dividend shall be declared or payable except out of our profits and
reserves lawfully available for distribution. Our Directors have the absolute discretion to
recommend any dividend subject to our constitutional documents and the relevant laws. We
cannot assure you that our Company will be able to declare dividends of any amount each year
or in any year.
SUMMARY
–2 0–


--- page 32 ---
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Recent Development
Subsequent to June 30, 2025, and up to October 31, 2025, our business experienced
steady growth, with all key operational and financial metrics continuing to show robust
improvement. Specifically, the copper cathode production from July to October 2025 increased
by approximately 23.4%, compared to the same period in 2024; and for the ten months ended
October 31, 2025, the copper cathode production increased by approximately 46.0%, compared
to the same period in 2024. Furthermore, the copper cathode sales volume from July to October
2025 increased by approximately 10.3%, compared to the same period in 2024; and for the ten
months ended October 31, 2025, the copper cathode sales volume increased by approximately
42.7%, compared to the same period in 2024. Our revenue from July to October 2025 increased
by more than 10%, compared to the same period in 2024; and for the ten months ended October
31, 2025, our revenue increased by more than 30%, compared to the same period in 2024.
Additionally, the construction of DR Congo copper smelter II commenced as scheduled in
September, and is currently progressing smoothly: site clearance has been completed,
construction of the main production workshops is advancing in an orderly manner, and the
procurement process for large-scale equipment has been initiated and is proceeding according
to our construction plan.
No Material Adverse Change
Our Directors confirm that, up to the date of this prospectus, (i) there had been no
material adverse change in our business, the industry where we operate, or market or regulatory
environment to which we are subject; (ii) there has been no material adverse change in our
financial or trading position or prospects since June 30, 2025, being the date of the latest
audited consolidated financial position of our Group as set out in the Accountants’ Report in
Appendix I to this prospectus; or (iii) there has been no event since June 30, 2025 that would
materially affect the information shown in the Accountants’ Report set forth in Appendix I to
this prospectus.
SUMMARY
–2 1–


--- page 33 ---
In this prospectus, unless the context otherwise requires, the following terms shall
have the meanings set out below. Certain other terms are explained in the section
entitled “Glossary of Technical Terms” in this prospectus.
DEFINITIONS
“Accountants’ Report” the accountants’ report for the Track Record Period
prepared by KPMG, the text of which is set out in
Appendix I to this prospectus;
“ARECOMS” the Strategic Mineral Substances Market Regulation and
Control Authority, the primary regulatory body
overseeing all cobalt export approvals in DR Congo;
“Articles of Association” or
“Articles”
the articles of association of our Company adopted on
May 16, 2025 which shall become effective as of the date
on which the H Shares are listed on the Stock Exchange,
as amended from time to time, a summary of which is set
out in “Appendix V — Summary of Articles of
Association” to this prospectus;
“associate(s)” has the meaning ascribed to it under the Listing Rules;
“Audit Committee” the audit committee of our Board;
“Board” or “Board of Directors” the board of Directors;
“business day” a day on which banks in Hong Kong are generally open
for normal banking business to the public and which is
not a Saturday, Sunday or public holiday in Hong Kong;
“CAGR” compound annual growth rate;
“CAMI” Mining Cadastre/Register;
“Capital Market Intermediaries”
or “capital market
intermediary(ies)”
the capital market intermediaries participating in the
Global Offering and has the meaning ascribed thereto
under the Listing Rules;
DEFINITIONS AND ACRONYMS
–2 2–


--- page 34 ---
“China” or “PRC” The People’s Republic of China, but for the purpose of
this prospectus and for geographical reference only and
except where the context requires otherwise, references
in this prospectus to “China” and the “PRC” do not apply
to Hong Kong, the Macau Special Administrative Region
and Taiwan;
“close associate(s)” has the meaning ascribed to it under the Listing Rules;
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong) as amended, supplemented or otherwise
modified from time to time;
“Companies (Winding Up and
Miscellaneous Provisions)
Ordinance”
the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Chapter 32 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified
from time to time;
“Company” Y unnan Jinxun Resources Co., Ltd. (΅
ʮ̡) (formerly known as Y unnan Jinxun Trading
Co., Ltd. (ʮ̡) and Y unnan Jinxun
E-commerce Co., Ltd. (ʮ
̡)), a company established in the PRC with limited
liability on January 21, 2010 which was converted into a
joint stock company with limited liability on July 15,
2016;
“Company Law” or “PRC
Company Law”
the Company Law of the PRC (ج,)
as amended, supplemented or otherwise modified from
time to time;
“Comprehensively Sanctioned
Country”
any country or territory subject to a general and
comprehensive export, import, financial or investment
embargo under sanctions related law or regulation of the
Relevant Jurisdiction, currently Cuba, Iran, North Korea,
Syria, the Crimea Region of Russia/Ukraine, the self-
proclaimed Luhansk People’s Republic and Donetsk
People’s Republic regions and Zaporizhzhia and Kherson
regions;
“connected person(s)” has the meaning ascribed to it under the Listing Rules;
“connected transaction(s)” has the meaning ascribed to it under the Listing Rules;
DEFINITIONS AND ACRONYMS
–2 3–


--- page 35 ---
“Controlling Shareholders” has the meaning ascribed to it under the Listing Rules
and, unless the context requires otherwise, refers to Mr.
Y uan and Heli Investment, and a Controlling Shareholder
shall mean each or any of them;
“COVID-19” outbreaks of coronavirus disease 2019, an infectious
disease caused by the recently discovered coronavirus
(severe acute respiratory syndrome coronavirus 2,
SARS-CoV-2);
“Designated Bank” HKSCC Participant’s EIPO Designated Bank;
“Director(s)” the director(s) of our Company;
“DR Congo” the Democratic Republic of the Congo;
“EIT Law” the PRC Enterprise Income Tax Law ( ʕശɛ͏΍ձ਷Ά
جas enacted by the NPC on March 16, 2007
and effective on January 1, 2008 and mostly amended on
December 29, 2018, as amended, supplemented or
otherwise modified from time to time;
“Extreme Conditions” the occurrence of “extreme conditions” as announced by
any government authority of Hong Kong due to serious
disruption of public transport services, extensive
flooding, major landslides, large-scale power outage or
any other adverse conditions before Typhoon Signal No.
8 or above is replaced with Typhoon Signal No. 3 or
below;
“Fast Interface for New
Issuance” or “FINI”
an online platform operated by HKSCC that is mandatory
for admission to trading and, where applicable, the
collection and processing of specified information on
subscription in and settlement for all New Listings;
“Frost & Sullivan” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., a
global market research and consulting company, which is
an Independent Third Party;
“Frost & Sullivan Report” an independent market research report commissioned by
us and prepared by Frost & Sullivan for the purpose of
this prospectus;
DEFINITIONS AND ACRONYMS
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“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 Company and all of our subsidiaries or, where the
context so requires, in respect of the period before our
Company became the holding company of our present
subsidiaries, the business operated by such subsidiaries
or their predecessors (as the case may be);
“Guide” The Guide for New Listing Applicants, as published by
the Stock Exchange on November 29, 2023 and effective
on January 1, 2024, as amended or supplemented or
otherwise modified from time to time;
“H Share(s)” shares of our Company for which an application has been
made for listing and permission to trade on the Stock
Exchange;
“H Share Registrar” Computershare Hong Kong Investor Services Limited;
“Heli Investment” Ji’an Heli Investment Management Center (Limited
Partnership) ( ΛτጤΥᎸҳ༟၍ଣʕː(Υྫ)), a
limited partnership established in the PRC on April 18,
2016 and the share incentive platform of our Company,
whose general partner is Mr. Y uan;
“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 or a
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;
DEFINITIONS AND ACRONYMS
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“HKSCC Operational
Procedures”
the operational procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operations and functions of CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as from time
to time in force;
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant;
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the
PRC;
“Hong Kong dollar(s)” or “HK$” Hong Kong dollar(s), the lawful currency of Hong Kong;
“Hong Kong Offer Shares” the 3,676,600 new H Shares initially being offered by our
Company for subscription at the Offer Price pursuant to
the Hong Kong Public Offering, subject to reallocation as
described in the section headed “Structure of the Global
Offering” in this prospectus;
“Hong Kong Public Offering” the offer for subscription of the Hong Kong Offer Shares
to the public in Hong Kong at the Offer Price (plus
brokerage of 1.0%, SFC transaction levy of 0.0027%,
Stock Exchange trading fee of 0.00565% and AFRC
transaction levy of 0.00015%), subject to and in
accordance with the terms and conditions set out in this
prospectus;
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering
whose names are set out in the section headed
“Underwriting — Hong Kong Underwriters” in this
prospectus;
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated December 30, 2025
relating to the Hong Kong Public Offering entered into by
our Company, our Controlling Shareholders, the Sole
Sponsor and the Hong Kong Underwriters;
DEFINITIONS AND ACRONYMS
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“Independent Third Party(ies)” individuals or company(ies), who or which, to the best of
our Directors’ knowledge, information and belief, having
made all reasonable enquiries, is not a connected person
of our Company within the meaning of the Listing Rules;
“International Offer Shares” the 33,089,000 H Shares initially being offered for
subscription under the International Offering, together
with, where relevant, any additional H Shares which may
be issued by our Company pursuant to the Over-allotment
Option (subject to reallocation as described in the section
headed “Structure of the Global Offering”);
“International Offering” the offer of the International Offer Shares at the Offer
Price outside the United States in offshore transactions in
reliance on Regulation S under the U.S. Securities Act
and subject to the terms and conditions of the
International Underwriting Agreement, as further
described in “Structure of the Global Offering” of this
prospectus;
“International Sanctions” all applicable laws and regulation 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 EU and its
member states, UN or Government of Australia;
“International Underwriters” the group of international underwriters expected to enter
into the International Underwriting Agreement relating to
the International Offering;
“International Underwriting
Agreement”
the international underwriting agreement relating to the
International Offering to be entered into by our Company,
our Controlling Shareholders, the Sole Sponsor and the
International Underwriters on or about Wednesday,
January 7, 2026;
“IOSCO MMOU” the International Organization of Securities Commissions
Multilateral Memorandum of Understanding Concerning
Consultation and Cooperation and the Exchange of
Information;
DEFINITIONS AND ACRONYMS
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“Jinxun Anhui” Anhui Jinxun New Energy Material Co., Ltd. (ᆛ
ʮ̡), a company established in the PRC
with limited liability on October 8, 2022 and an indirect
wholly-owned subsidiary of our Company;
“Jinxun DR Congo” Jin Xun Congo Mining SARL, a company incorporated in
DR Congo with limited liability on August 13, 2018 and
an indirect wholly-owned subsidiary of our Company;
“Jinxun Peru” Minera Jinxun Peru S.A.C., a company incorporated in
Peru with limited liability on October 14, 2020 and an
indirect wholly-owned subsidiary of our Company;
“Jinxun Shanghai” Shanghai Jinxun New Energy Co., Ltd. (ᆛอঐ๕
ʮ̡) (formerly known as Shanghai Yikuang
E-Commerce Co., Ltd. (ʮ̡)), a
company established in the PRC with limited liability on
February 3, 2016 and a wholly-owned subsidiary of our
Company;
“Jinxun Singapore” Jinxun (Singapore) International Trade Pte. Ltd., a
company incorporated in Singapore with limited liability
on April 25, 2018 and a wholly-owned subsidiary of our
Company;
“Joint Bookrunners” the joint bookrunners as named in the section headed
“Directors and Parties involved in the Global Offering”;
“Joint Global Coordinators” the joint global coordinators as named in the section
headed “Directors and Parties involved in the Global
Offering”;
“Joint Lead Managers” the joint lead managers as named in the section headed
“Directors and Parties involved in the Global Offering”;
“Latest Practicable Date” December 22, 2025 being the latest practicable date for
the purpose of ascertaining certain information contained
in this prospectus prior to its publication;
“Listing” the listing of our H Shares on the Main Board;
“Listing Committee” the listing sub-committee of the board of directors of the
Stock Exchange;
DEFINITIONS AND ACRONYMS
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--- page 40 ---
“Listing Date” the date, expected to be on or about Friday, January 9,
2026 on which dealings in our H Shares first commence
on the Main Board;
“Listing Rules” the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, as amended or
supplemented or otherwise modified from time to time;
“LME” London Metal Exchange;
“Main Board” the stock exchange (excluding the option market)
operated by the Stock Exchange which is independent
from and operated in parallel with the GEM of the Stock
Exchange;
“Mining Code” the Law No. 007/2002 of 11 July 2002 on the mining
code of DR Congo, as amended and supplemented by
Law No. 18/001 of 09 March 2018;
“Ministry of Commerce” or
“MOFCOM”
the Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷
ਠਕ௅);
“Mr. Y uan” Mr. Y uan Rong ( ঺࿲), our founder, executive Director,
chairman of our Board, our chief executive officer,
general manager, and the ultimate Controlling
Shareholder;
“Nomination Committee” the nomination committee of our Board;
“Non-H Share(s)” ordinary Share(s) with a nominal value of RMB1.00
each, other than our H Shares (namely, the Share(s)
currently quoted on NEEQ);
“Non-IOSCO MMOU Countries” countries or regions whose statutory securities regulator
is not a full signatory to the IOSCO MMOU;
“Offer Price” the final offer price per Offer Share (exclusive of
brokerage fee of 1.0%, SFC transaction levy of 0.0027%,
Stock Exchange trading fee of 0.00565% and AFRC
transaction levy of 0.00015%) of HK$30.00 at which
Hong Kong Offer Shares are to be subscribed in the
manner further described in “Structure of the Global
Offering” in this prospectus;
DEFINITIONS AND ACRONYMS
–2 9–


--- page 41 ---
“Offer Shares” the Hong Kong Offer Shares and the International Offer
Shares;
“Over-allotment Option” the option 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
5,514,800 additional H Shares, representing up to 15% of
the Offer Shares initially being offered under the Global
Offering, at the Offer Price to, among other things, 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 the section headed
“Directors and Parties involved in the Global Offering”
in this prospectus;
“PRC government” the central government of the PRC and all governmental
subdivisions (including provincial, municipal and other
regional or local government entities) and organizations
of such government or, as the context requires, any of
them;
“PRC Legal Advisors” JunHe LLP , our legal advisors as to PRC laws in
connection with the Global Offering;
“Primary Sanctioned Activity” any activities in a Comprehensively Sanctioned Country
or (i) with; or (ii) directly or indirectly benefiting or
involving the property or interests in property of, a
Sanctioned Target by the Company incorporated or
located in a Relevant Jurisdiction or which otherwise has
a nexus with such jurisdiction with respect to the relevant
activity, such that it is subject to the relevant sanctions
law and regulation;
“Regulation S” Regulation S under the U.S. Securities Act;
“Remuneration and Appraisal
Committee”
the remuneration and appraisal committee of our Board;
“Renminbi” or “RMB” the lawful currency of the PRC;
DEFINITIONS AND ACRONYMS
–3 0–


--- page 42 ---
“Rong Xing Investments” Rong Xing Investments Limited, a company established
in Zambia with limited liability on August 16, 2016 and
a wholly-owned subsidiary of our Company;
“Sanctioned Person” certain person(s) and identity(ies) listed on OFAC’s
Specially Designated Nationals and Blocked Persons List
or other restricted parties lists maintained by the U.S.,
EU, UK, UN or Australia;
“Secondary Sanctionable
Activity”
certain activity by the Company that may result in the
imposition of sanctions against the Relevant Person(s) by
a Relevant Jurisdiction (including designation as a
Sanctioned Target or the imposition of penalties), even
though the Company is not incorporated or located in that
Relevant Jurisdiction and does not otherwise have any
nexus sutra that Relevant Jurisdiction;
“Securities and Futures
Commission” or “SFC”
the Securities and Futures Commission of Hong Kong;
“Share(s)” ordinary share(s) with a nominal value RMB1.00 each in
the share capital of our Company, comprising Non-H
Shares and H Shares;
“Shareholder(s)” holder(s) of our Share(s);
“Singapore” the Republic of Singapore;
“S$” Singapore dollars, the lawful currency of the Republic of
Singapore;
“Sole Sponsor” and “Sponsor-
Overall Coordinator”
Huatai Financial Holdings (Hong Kong) Limited;
“State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫);
“Stock Exchange” The Stock Exchange of Hong Kong Limited, a wholly
owned subsidiary of Hong Kong Exchange and Clearing
Limited;
“Strategy Committee” the strategy committee of our Board;
“subsidiary(ies)” has the meaning ascribed to it under the Listing Rules;
DEFINITIONS AND ACRONYMS
–3 1–


--- page 43 ---
“substantial shareholder(s)” has the meaning ascribed to it under the Listing Rules;
“Tibet Huiyi” Tibet Huiyi Information Technology Co., Ltd. ( Гᔛිू
ʮ̡), a company established in the PRC
with limited liability on February 21, 2017 and a wholly-
owned subsidiary of our Company;
“ton” or “tonne” a unit of mass equal to 1,000 kilograms;
“Track Record Period” the period comprising the years ended December 31,
2022 and 2023 and 2024 and the six months ended June
30, 2025;
“Underwriters” the Hong Kong Underwriters and the International
Underwriters;
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement;
“U.S.” or “United States” the United States of America, its territories, its
possessions and all areas subject to its jurisdiction;
“U.S. dollar(s)” or “US$” United States dollar(s), the lawful currency of the United
States;
“U.S. persons” U.S. persons as defined in Regulation S;
“U.S. Securities Act” United States Securities Act of 1933, as amended,
supplemented or otherwise modified from time to time;
“we,” “us” or “our” the Company or the Group, as the context requires;
“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;
“Zambia” the Republic of Zambia; and
“%” percent.
DEFINITIONS AND ACRONYMS
–3 2–


--- page 44 ---
ACRONYMS
“AFRC” the Accounting and Financial Reporting Council of Hong
Kong;
“CAGR” compound annual growth rate, which is calculated by
dividing the amount at the end of the period by the
amount of the beginning of that period, raising the result
to an exponent of one divided by the number of years in
the period, and subtracting one from the subsequent
result;
“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC;
“CNIPA” China National Intellectual Property Administration ( ਷
ᗆପᛆ҅);
“CSRC” China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ
ึ), a regulatory body responsible for the
supervision and regulation of the PRC national securities
markets;
“EAR” United States Export Administration Regulations, 15
C.F.R. Parts 730-774;
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited;
“IASB” International Accounting Standards Board;
“ICSG” International Copper Study Group, an intergovernmental
organization to promote transparency and cooperation in
the global copper market;
“IFRS Accounting Standards” IFRS Accounting Standards as issued by the IASB;
“MOF” Ministry of Finance of the PRC (௅).
“MOFCOM” Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷ਠਕ
௅) or its predecessor, the Ministry of Foreign Trade and
Economic Cooperation of the PRC ( ʕശɛ͏΍ձ਷࿁̮
຾᏶ΥЪ௅);
DEFINITIONS AND ACRONYMS
–3 3–


--- page 45 ---
“NDRC” the National Development and Reform Commission of
the PRC (ึ);
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ), the central
bank of the PRC;
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC;
“SAFE” the State Administration of Foreign Exchange of the PRC
(̮ි၍ଣ҅);
“SAMR” the State Administration for Market Regulation (̹
ఙ္ຖ၍ଣᐼ҅);
“SAIC” the State Administration for Industry and Commerce of
the PRC (၍ଣᐼ҅);
“SFO” the Securities and Futures Ordinance, Chapter 571 of the
Laws of Hong Kong, as amended, supplemented or
otherwise modified from time to time;
“STA” the State Taxation Administration of the PRC ( ʕശɛ͏
೼ਕᐼ҅);
“USGS” the United States Geological Survey; and
“V A T” value-added tax.
For ease of reference, the names of the PRC laws and regulations, governmental
authorities, institutions, natural persons or other entities (including certain of our
subsidiaries) have been included in the prospectus in both the Chinese and English languages
and in the event of any inconsistency, the Chinese versions shall prevail. English translations
of official Chinese names are for identification purpose only.
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.
For the purpose of this prospectus, references to “provinces” of China include provinces,
municipalities under direct administration of the central governmental and provincial-level
autonomous regions.
DEFINITIONS AND ACRONYMS
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In this prospectus, unless the context otherwise requires, explanations and
definitions of certain terms used in this prospectus in connection with our Group and
our business shall have the meanings set out below. The terms and their meanings may
not correspond to standard industry meaning or usage of these terms.
“cobalt hydroxide” a chemical compound that can be used to produce cobalt
sulfates and cobalt chlorides, which are raw materials for
new energy batteries;
“copper cathode” a high-quality copper product that is produced by refining
raw copper ore through the electrolysis process;
“copper concentrates” a type of raw material produced during the process of
extracting copper from ore. The resultant metal is widely
used for its high electrical and heat conductivity,
malleability, ability to form alloys with other metals, and
resistance to corrosion;
“electrowinning” a process used to extract metals from a solution using
electrolysis;
“flotation” a process used in mineral processing to separate valuable
minerals from waste rock by exploiting differences in
their water-repellency;
“hydrometallurgical processing” a process of extracting metals from ores and other
materials using aqueous solutions;
“mineral concentrates” the product generally produced by metal ore mines by
processing raw ores;
“non-ferrous metal” metal or alloy that does not contain iron in appreciable
amounts;
“smelting” a pyrometallurgical process used to extract metals from
their ores; and
“wet smelting” a method of extracting metals from ore by dissolving
them in a liquid, often an acidic solution, rather than
melting them.
GLOSSARY OF TECHNICAL TERMS
–3 5–


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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.
We have included in this prospectus forward-looking statements that are not historical
facts but relate to our intentions, beliefs, expectations or predictions for future events and
conditions which may not occur. Even though these statements have been made by our
Directors after due and careful consideration and on bases and assumptions that we believe are
fair and reasonable at the time, they nevertheless involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance or
achievements to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Some of the risks are listed in the
section entitled “Risk Factors” and elsewhere in this prospectus. In some cases, you can
identify these forward-looking statements by words such as “aim,” “anticipate,” “believe,”
“continue,” “could,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,”
“project,” “propose,” “seek,” “should,” “will,” “would” or similar expressions, or their
negatives. These forward-looking statements include, without limitation, statements relating
to:
 any changes in the laws, rules and regulations of the central and local governments
in the PRC and the rules, regulations and policies of the relevant governmental
authorities relating to all aspects of our business and our business plans;
 our business and operating strategies and our ability to implement such strategies;
 our ability to control or reduce costs;
 expected growth of and changes in the metal processing industry;
 our future business development, results of operations and financial condition;
 the future competitive environment for the metal processing industry;
 determination of the fair value of our Shares;
 our dividend policy;
 capital market development;
 exchange rate fluctuations and restrictions; and
 risks identified under the section entitled “Risk Factors” in this prospectus.
FORW ARD-LOOKING STATEMENTS
–3 6–


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This prospectus also contains market data and projections that are based on a number of
assumptions. The markets may not grow at the rates projected by the market data, or at all. The
failure of the markets to grow at the projected rates may materially and adversely affect our
business and the market price of our Shares. In addition, due to the rapidly changing nature of
the economy in jurisdictions in which we operate and our industry, projections or estimates
relating to the growth prospects or future conditions of the markets are subject to significant
uncertainties. If any of the assumptions underlying the market data prove to be incorrect, actual
results may differ from the projections based on these assumptions. Y ou should not place undue
reliance on these forward looking statements.
We do not guarantee that the transactions and events described in the forward-looking
statements in this prospectus will happen as described, or at all. Actual outcomes may differ
materially from the information contained in the forward-looking statements as a result of a
number of factors, including, without limitation, the risks and uncertainties set forth in the
section entitled “Risk Factors” in this prospectus. Y ou should read this prospectus in its
entirety and with the understanding that actual future results may be materially different from
what we expect. The forward-looking statements made in this prospectus relate only to events
as of the date on which the statements are made or, if obtained from third-party studies or
reports, the dates of the respective studies or reports. Since we operate in an evolving
environment where new risks and uncertainties may emerge from time to time, you should not
rely upon forward-looking statements as predictions of future events. We undertake no
obligation, beyond what is required by law, to update any forward-looking statement to reflect
events or circumstances after the date on which the statement is made, even when our situation
may have changed.
FORW ARD-LOOKING STATEMENTS
–3 7–


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You should carefully consider all of the information in this prospectus and, in
particular , the risks and uncertainties described below, before making an investment in
our H Shares. We are affected materially by requirements and restrictions that arise
under laws, regulations, judicial interpretations and government policies in nearly all
aspects of our businesses in the jurisdictions where we operate.
The risks described below are not the only risks that may affect us or our offering.
Additional risks and uncertainties of which we are not aware or that we currently believe
are immaterial may also adversely affect our business, results of operations, financial
condition and prospects. If any of the possible events described below occur , our
business, results of operations, financial condition and prospects could be materially and
adversely affected. The price of our H Shares could decline owing to any of these risks,
and you may lose all or part of your investment.
RISKS RELATING TO DOING BUSINESS IN OVERSEAS JURISDICTIONS IN
WHICH WE HA VE OPERATIONS
Emerging markets are subject to greater risks than more developed markets, and
financial turmoil in any emerging market could disrupt our business.
During the Track Record Period, we sourced a substantial majority of raw materials from,
and/or operated local processing facilities in, Zambia, DR Congo, and Peru. As a result, our
business and results of operations are impacted by economic, political and social conditions in
Zambia, DR Congo, and Peru. An emerging market such as Zambia, DR Congo, and Peru is
subject to greater risks than more developed markets. These risks include, but are not limited
to, the following:
 greater political risk, and changes in, and the instability of, the political and
economic environment;
 civil strife, ethnic conflict, religious and regional tensions, acts of war, terrorism and
insurrection;
 government interventions;
 the lack of well-developed legal systems, which could make it difficult for us to
enforce contractual rights and intellectual properties;
 controversy in interpretation of laws;
 unpredictable tax systems that could give rise to significant uncertainties and risks
that may complicate our tax planning and business decisions;
RISK FACTORS
–3 8–


--- page 50 ---
 outbreaks of infectious diseases;
 potential adverse changes in laws and regulatory practices, including import and
export license requirements and restrictions, tariffs, legal structures, and
telecommunications and tax laws;
 trade barriers;
 underinvestment in infrastructure, including roads, railways and shipping;
 chronic electricity shortages;
 difficulties in staffing and managing operations;
 the security and safety of employees;
 changes in labor conditions.
 the risk of uncollectible accounts and long collection cycles;
 currency fluctuations and hyperinflation;
 the consequences of corrupt practices on the economy;
 high inflation rate;
 exchange controls; and
 logistical and communications challenges.
Moreover, financial turmoil in any emerging market country tends to adversely affect
prices in the financial markets of other emerging market countries, such as Zambia, DR Congo,
and Peru. Inflationary pressure may lead to (i) increased energy costs in diesel and electricity;
(ii) re-evaluation of salaries among local employees brought by social pressure; (iii) elevated
chemical input expenditures due to the depreciation of the currency and (iv) increased
expenditures related to any prospective expansion projects. As has happened in the past,
financial issues or an increase in the perceived risks associated with investing in other
emerging economies could dampen foreign investment and adversely affect the economies of
Zambia, DR Congo, and Peru. In addition, during such times, companies that operate in
emerging markets can face severe liquidity constraints as foreign funding sources are
withdrawn. Therefore, even if the economies in Zambia, DR Congo, and Peru remain relatively
stable, financial turmoil in any emerging market country could adversely affect our business
in Zambia, DR Congo, and Peru. Companies with operations in countries in an emerging
market such as Zambia, DR Congo, and Peru may be particularly susceptible to disruptions in
the capital markets and the reduced availability of credit or the increased cost of debt, which
RISK FACTORS
–3 9–


--- page 51 ---
could result in them experiencing financial difficulty. In addition, the availability of credit to
entities operating within an emerging market such as Zambia, DR Congo, and Peru is
significantly influenced by levels of investor confidence in such markets as a whole and so any
factors that impact market confidence (for example, a decrease in credit ratings or state or
central bank intervention) could affect the lost or availability of funding for entities within
such market.
Changing economic, social, political and geopolitical conditions could materially and
adversely impact our business and financial results. We have overseas operations in Zambia,
DR Congo and Peru. Our business is therefore subject to constantly changing economic, social,
political and geopolitical conditions in different countries.
Any uncertain economic or social conditions may adversely impact consumer demand for
our products or cause our customers and other business partners to suffer financial hardship,
which in turn could materially and adversely impact our business.
The political relationships between these countries may affect the prospects of our
relationship with third parties, such as customers and suppliers. Any political tensions, import
tariffs and trade frictions between these countries could adversely affect the costs and stability
in supply of raw materials and the sales performance of our products. Any acts of terrorism or
military conflicts can adversely affect the local economy and consumer sentiment, and may
result in damage to our production facilities and inventory and casualties to our staff. As
geopolitical risks continuously increase and structurally escalate, some of the jurisdictions in
which we operate may fall under arms embargoes, or house persons designated on entity lists,
under the sanctions programs administered by the U.S. Office of Foreign Assets Control, the
European Union, or any other relevant sanctions authorities. Any failure in screening our
counter-parties could potentially result in a non-compliance with the relevant sanctions
programs.
Additionally, protectionism trade policies emerging around the world and ongoing trade
disputes between different countries may further affect the costs and stability in supply of raw
materials.
Any of these risks may materially and adversely affect our business, prospects, financial
condition and results of operations.
High rates of inflation in the overseas jurisdictions we operate in could have a material
adverse effect on our business, financial condition and results of operations.
Certain overseas jurisdictions we operate in, such as Zambia and DR Congo, have
historically experienced relatively high rates of inflation. The average annual inflation rate,
indicated by the average annual percentage change in the consumer price index was 9.3%,
19.9% and 17.7% in DR Congo and 11.0%. 10.9% and 15.0% in Zambia in 2022, 2023 and
2024, respectively, according to the World Bank Group.
RISK FACTORS
–4 0–


--- page 52 ---
In general, inflationary pressures can exacerbate existing economic challenges, leading to
higher operational costs and reduced profitability. The cost of labor, energy and tax imposed
by local authorities, as well imported goods and services, may rise significantly in association
with increased inflationary pressures, thereby impacting our ability to maintain competitive
production costs in overseas jurisdictions. In addition, inflation can cause (i) increased interest
rates, affecting our financing costs and capital expenditure plans; (ii) elevated compliance
costs and wage pressures in accordance with local labor laws; (iii) higher costs for equipment
and materials, impacting our capital expenditures and operational budgets; and (iv) currency
inflation, affecting the value of our revenue and financial stability. There can be no assurance
that we can successfully monitor inflation and implement cost-control measures to contain
inflation, or that such strategies will be fully effective, and unforeseen inflationary events
could adversely affect our operations in these jurisdictions.
Since we are unable to control the local labor costs and the market price at which we
purchase our auxiliary materials, it is possible that significantly higher inflation in the future
in such jurisdictions, without a concurrent devaluation of the local currency against U.S. dollar
or an increase in the prices of our products, could have a material adverse effect upon our
business, financial condition and results of operations.
Risk of infectious diseases, underdeveloped healthcare and health epidemics in the
overseas jurisdictions we operate in may adversely affect our ability to maintain a skilled
workforce in these regions.
In jurisdictions such as Zambia and DR Congo where the healthcare infrastructure is less
developed than other developed countries, we face greater challenges in preventing against
contagious diseases, including but not limited to Ebola, yellow fever, African trypanosomiasis,
monkeypox and malaria. An outbreak of such diseases or a public health emergency could have
a substantial impact on our operations in terms of reduced productivity and increased medical
and other costs. These health threats can impair the health of workers and negatively affect our
operations and financial position as a result of workers’ diminished focus or skill, absenteeism,
treatment costs and allocated resources. Further, epidemics threaten people’s lives and could
materially and adversely affect their livelihood as well as their living and consumption
patterns. The occurrence of an epidemic is beyond our control, and there is no assurance that
the outbreak of any epidemics or pandemics will not happen. Any current or future medical
program may not be successful in preventing or reducing the infection rate amongst our
employees or in affecting consequent illness or mortality rates. We may incur significant costs
in addressing these issues in the future and any epidemic or pandemic occurring in areas in
which we operate, or even in areas in which we do not operate, could materially and adversely
affect our business, financial condition and results of operations.
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We face risks associated with our overseas operations.
We have overseas operations and investments such as in DR Congo, Zambia, and Peru.
Our business, financial condition and results of operations are subject to risks and uncertainties
relating to these overseas regions and countries, including but not limited to:
 exposure to risks associated with changes in international, regional and local
economic, trade, financial and political conditions and regulatory policies;
 compliance with the requirements of applicable sanctions, anti-bribery and related
laws and regulations;
 exposure to different legal standards and limitation on ability to enforce contracts in
these overseas regions and countries;
 control of foreign exchange and fluctuations in foreign exchange rate;
 developments in labor law and increase in staff cost;
 failure to negotiate collective labor agreements on satisfactory terms with labor
unions;
 restrictions or requirements relating to foreign investments;
 limitations on repatriation of earnings, including withholding and other taxes on
remittances and other payments by subsidiaries;
 encumbrances on our foreign assets;
 failure to protect our reputation from negative publicity against us;
 limitation on ability of non-nationals to reside and work in these overseas regions
and countries; and
 concerning DR Congo, requirements on the shareholding of the local subsidiary,
such as the Share Transfer Rule which requires transfer of share capital to DR Congo
government or DR Congo nationals. See “Regulatory Overview—Laws and
Regulations Related to Our Business in DR Congo—Mineral Processing and Mining
Operations—Mining Operations—Exploitation Permit” for more details. Although
Jinxun DR Congo currently holds an exploitation permit, there is no assurance that
such permit will not be revoked in the future. In the worst-case scenario where such
permit is revoked, Jinxun DR Congo will be required to transfer 50% of its share
capital to Congolese nationals. See “Business—Certificates, Licenses, Permits and
Approvals” for more details.
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RISKS RELATING TO OUR BUSINESS AND INDUSTRY
We are exposed to the market forces in the copper and cobalt industry, including the
current and expected supply and demand dynamics of copper and cobalt.
We are exposed to the market forces in the copper and cobalt industries, including the
current and expected supply and demand dynamics of copper and cobalt, which are primarily
based on resources availability, discovery of new mines, competitive landscape of the copper
and cobalt industries, end market demands for products in which copper and cobalt are used,
technological developments, government policies and global and regional economic
conditions.
The current or expected supply of copper and cobalt may fluctuate, depending on resource
availability in the copper and cobalt markets. The majority of copper and cobalt raw materials
are produced by only a few suppliers. A number of companies in the copper and cobalt
industries either self-explore raw materials and/or directly purchase and refine raw materials
from suppliers. During the Track Record Period, we primarily purchased raw materials from a
limited number of suppliers. As we are operating in a competitive landscape where copper and
cobalt suppliers are focusing on new sources of copper and cobalt, there is no assurance that
we may continue to be able to secure high-quality copper and cobalt at relatively competitive
costs.
We may also face increasing competition with new market entrants over time. In addition,
the discovery and successful exploration of new copper and cobalt mines by new or existing
competitors may also affect our business. For example, new copper and cobalt mines are being
explored in DR Congo and could provide new or existing competitors with an additional source
of copper and cobalt at competitive cost, which may affect the global copper and cobalt supply,
the global prices of copper and cobalt and in turn our business. Should any of the
aforementioned circumstances occur, our business, financial condition and results of
operations maybe adversely affected.
We may be exposed to supplier concentration risk.
Purchases from our largest supplier and five largest suppliers as a percentage of cost of
sales in each year/period during the Track Record Period showed an increasing trend. In
particular, purchases from our largest supplier as a percentage of cost of sales accounted for
6.1%, 10.5%, 21.2% and 36.3% of our cost of sales in 2022, 2023, 2024 and the six months
ended June 30, 2025, respectively; while purchases from our five largest suppliers as a
percentage of cost of sales accounted for 25.1%, 37.6%, 57.8% and 62.1% of our cost of sales
in the same periods, respectively. We cannot assure you that we will be able to maintain
relationships with our major suppliers in the future. If any of these major suppliers decide to
substantially reduce their supply or terminate their cooperation with us in the future, we may
not be able to find alternative suppliers in a timely manner, or at all, in order to guarantee the
supplies to our business operations. Besides, we cannot guarantee that our major suppliers will
not experience any change in business scope or business model or will continue to maintain
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their market position and reputation. Any material adverse change to the operation or financial
condition of our major suppliers may have negative impacts on the quality of their products and
services supplied to us, which may further affect our business operations and profitability. For
instance, if our major suppliers cease to sell their products, or if the supply is disrupted or
delayed due to natural disasters, geopolitical events, wars and major operational accidents,
there can be no assurance that we will be able to find new suppliers with similar supply
capacity on comparable commercial terms within a reasonable period of time, or at all.
Our business and results of operations are highly dependent upon the global prices of
copper and other non-ferrous metals, which may be influenced by various factors
including global economic growth and international supply and demand.
During the Track Record Period, we derived our revenue primarily from the production
and sales of copper cathodes and copper concentrates. In 2022, 2023, 2024 and the six months
ended June 30, 2024 and 2025, revenue from our copper production and processing business
accounted for 61.3%, 61.7%, 69.5%, 75.5% and 87.2%, respectively, of our total revenue in the
corresponding years/periods. Our revenue generated from the trading of non-ferrous products
accounted for 38.7%, 38.3%, 30.6%, 24.5% and 12.8%, respectively, of our total revenue
during the same years/periods. Fluctuations of global and domestic prices of copper and cobalt
are affected by a number of factors beyond our control, including, among others, (i) the
strength or weakness of U.S. dollar (the currency in which the copper and cobalt prices are
generally quoted) and of other currencies; (ii) the demand of copper and cobalt, including the
demand for copper and cobalt for various uses, primarily use in electrical applications, building
construction, industrial machinery and renewable technologies; (iii) international or regional
political and economic events or trends; (iv) investor confidence in copper and cobalt and their
related business; (v) speculative trading activities in copper and cobalt; (vi) the overall level
of forward sales by copper and cobalt companies; (vii) the overall cost of production of copper
and cobalt; (viii) the global copper and cobalt supplies and demand forecasting; and (ix)
inflation. There is no assurance that the prices of copper or cobalt will increase from or stay
at the current level.
We primarily engaged in copper production and processing during the Track Record
Period, and, to a lesser extent, we also engage in the trading of non-ferrous metals. We are
subject to a number of risks brought by the decreases in copper and cobalt prices. For instance,
if copper or cobalt prices fall near or below our costs to produce copper and cobalt products,
we may experience losses and, should the copper and cobalt prices remain at such levels for
a sustained period, our revenue and profit would be materially and adversely affected.
Moreover, declining commodity prices may impact our operations by requiring a reassessment
of the feasibility of a particular project. Such a reassessment may be the result of a management
decision or may be required under financing arrangements relating to a particular project. In
addition, we cannot offset any increases in our production costs simply by adjusting the selling
price of our copper products primarily because we determine the selling price of our copper
products in accordance with the average LME Cash Settlement Price over quotation period. In
response to the price changes, we may be forced to curtail or suspend some or all of our
projects or operations or reduce operational expenditures in part or completely. Even if a
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particular project is ultimately determined to be commercially viable, the need to conduct such
a reassessment may cause substantial delays or may interrupt operations until the reassessment
can be completed and this may have a material adverse effect on our business, financial
condition and results of operations.
In the event that the prices of copper and cobalt increase significantly, our customers may
reduce the volume of their consumption or seek alternative products or commodities as a
substitute for copper and cobalt, leading to reduced purchasing of our copper and cobalt
products. Should any of the above circumstances occur, our business, financial condition and
results of operations may be materially and adversely affected.
We may be exposed to customer concentration risk.
In 2022, 2023 and 2024 and the six months ended June 30, 2025, the sales to our largest
customer accounted for 44.2%, 28.5%, 15.0% and 24.6% of our total revenue, respectively,
while our five largest customers for the same years/periods accounted for 79.9%, 78.4%, 56.9%
and 67.8% of our total revenue, respectively. Our major customers’ stable relationship with us
and consistent demands are crucial to our business. Their business conditions, liquidity and
solvency may have a significant impact on our business dealings. Any disruption in our
business relationship with major customers could have a material adverse effect on our
business, financial condition and results of operations. While we do not rely on any of these
major customers, in the event that the existing major customers reduce or cease to purchase our
products and we may be unable to find new customers with similar level of demands at
comparable terms within a reasonable period of time or at all, our business and profitability
may be adversely affected.
A downturn in the global economy or disruptions to financial markets could materially
and adversely affect our results of operations and business prospects.
The global economy and financial markets have experienced significant disruptions in
recent years. Economic growth in many countries, particularly in the European Union member
states, continues to be adversely affected. There is considerable uncertainty over the long-term
effects of the expansionary monetary and fiscal policies adopted by the central banks and
financial authorities of the world’s leading economies. More recently, there have been concerns
over the impact of the import tariffs imposed by the U.S. government, which have resulted in
significant market volatility. There have also been concerns about the economic effect of
earthquakes and tsunamis in Japan. Any prolonged slowdown in the global economy would
have a negative impact on our business, financial condition and results of operations.
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A large portion of our copper products are sold to the PRC, and a decrease in demand for
copper worldwide or in the PRC, or a decrease in import of copper by the PRC, could
materially and adversely affect our business, financial condition and results of operations.
Worldwide demand for copper products is affected by a number of factors including
global and regional supply and demand and the political, economic and other conditions of
major copper producing countries that are beyond our control. We cannot provide any
assurance that the demand for copper products throughout the world will not decrease in the
future. A decrease in the worldwide demand for copper products may have material adverse
effect on our business, financial condition and results of operations.
We sell a large portion of our copper cathodes into the PRC. As a large portion of our
copper cathodes are exported to the PRC, a decrease in demand for copper cathode in the PRC
may adversely affect the price of our products exported to the PRC and thus materially and
adversely affect our business, financial condition and results of operations. In addition, if
domestic production of copper cathodes in the PRC increases significantly in the future, the
demand for imports of copper cathodes in the PRC might decrease accordingly even if the
demand for copper cathodes in the PRC remains at the same level or increases which could
materially and adversely affect our business, financial condition and results of operations.
Governmental import or export controls could materially and adversely affect our
business, results of operations, financial condition and prospects.
Our raw materials and products may be subject to governmental import and export
controls, including from the PRC and overseas. Governmental regulations on the import or
export of our products, or our failure to obtain any required import or export authorization for
our raw materials and products, if any, may harm our business and adversely affect our
revenue. Compliance with applicable regulatory requirements regarding the export of our
products may create delays in the introduction of our products in international markets or, in
some cases, prevent the export of our products to some countries altogether. Furthermore, U.S.
export control laws and economic sanctions prohibit the shipment of certain products and
services to countries, governments and persons targeted by U.S. sanctions. The governments of
DR Congo and Zambia have also imposed certain restrictions or requirements on the export of
minerals. For example, the laws of DR Congo grant the Minister of Economy, the Minister of
Mines and the Minister of Foreign Trade the power to prohibit the export of certain commercial
mining products for purposes of policy compliance as defined by the DR Congo government.
In a circular note issued by the Minister of Mines, the Minister of Foreign Trade and the
Minister of Economy dated March 6, 2025, the Ministers suspended the export of commercial
mining products, including the cobalt hydroxides, white alloys, cobalt carbonates, mixed
copper-cobalt concentrates, for a period of four months, renewable after evaluation. The cobalt
export ban was lifted on October 15, 2025, which was subsequently replaced by an export
quota system. The export quota system allows the export of up to 18,125 tons of cobalt for the
rest of 2025, with annual caps of 96,600 tons in 2026 and 2027. It also allows all mining,
industrial, or semi-industrial operators who do not benefit from quotas to apply for quotas by
submitting a quota allocation request to the Strategic Mineral Substances Market Regulation
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and Control Authority (“ ARECOMS ”). In Zambia, all mineral exports require an export permit
issued by the Ministry of Mines and Minerals Development through the Minerals Regulation
Commission (the “ Commission ”) under the Minerals Regulation Commission Act No. 14 of
2024 (the “ MRCA ”). Approval is required from the Commission under section 32 of the
MRCA, which provides that a person shall not import or export a mineral, gemstone, ore or
mineral product without a permit issued to that person by the Commission. Additional approval
is required for the export of radioactive minerals. If we fail to comply with export and import
regulations and such economic sanctions, we may be fined or subject to other penalties,
including a denial of certain export privileges. Moreover, any new import or export restrictions,
new legislation or shifting approaches in the enforcement or scope of existing regulations,
could result in increased operating costs, or our decreased ability to export our products to
existing or potential international customers, which could materially adversely affect our
business, results of operations, financial condition and prospects.
Recent trade tensions, such as the ongoing U.S.-China trade dispute, have led to high
tariffs, export controls and other restrictive measures. During the Track Record Period, we did
not directly sell our products to any customers into the U.S. We cannot assure you that our
customers will not engage in the export of their goods incorporating our products 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 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 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 are subject to extensive environmental, chemical manufacturing, health and safety
laws and regulations and production standards, and our compliance with these laws,
regulations and standards may be onerous and costly.
Our current and future operations are subject to the extensive environmental risks
inherent in the mining and processing industries, such as risks of accidental spills, leaks or
overflows and discharges from tailing dams or other facilities or other unforeseen
circumstances, which could subject us to considerable liability. One of the main environmental
issues in the metal processing industry is waste water and tailings management. Waste water
and tailings can contain substances that are potentially harmful to people and the environment,
especially in large quantities. We may be subject to claims for injury to persons or damage to
property and the environment resulting from waste disposal, improper waste management or
other events, such as water or tailings residue being released or overflowing from our
operations into the environment, particularly any discharge or overflow into rivers, and the
inappropriate and uncontrolled disposal of hazardous waste alongside domestic waste. We may
accordingly receive environmental restoration orders from environmental protection agencies
of the local governments that require cleanup efforts and/or cessation of operations pending
guidance.
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In addition, our operations involve handling and storage of hazardous chemicals and other
dangerous materials. Accidents arising from the mishandling of dangerous materials may occur
during our business operations. The occurrence of any of these risks and hazards could result
in damage to or destruction of production facilities, personal injury, environmental damage,
business interruption, suspension or revocation of exploitation permits, delay in production,
increased production costs, monetary losses and possible legal liability (including
compensatory claims, fines and penalties) to us, which could materially and adversely affect
our business, financial condition and results of operations. See “Business — Compliance and
Legal Proceedings” for our non-compliance incidents during the Track Record Period. Save for
the non-compliance incidents disclosed in this prospectus, we had complied with the relevant
laws and regulations in all material aspects in the jurisdictions where we operate during the
Track Record Period and up to the Latest Practicable Date. Furthermore, the Peruvian, Zambian
and DR Congo governments may impose higher environmental protection standards in the
future, which could increase our costs of compliance. In either event, the costs and liabilities
associated with hazardous materials could have a material adverse effect on our business,
financial condition and results of operations. We cannot assure you that we will not be subject
to environmental non-compliance penalties in the future.
In DR Congo, non-governmental organizations are involved in identifying the
environmental risks associated with metal processing. DR Congo government regularly works
with non-governmental organizations to implement environmental policies. The work of these
various non-governmental organizations complements the numerous environmental laws and
regulations in DR Congo.
In Zambia, the Mines and Minerals Act No. 11 of 2015 (the “ Mines Act ”) as amended by
the Mines and Minerals Development (Amendment) Act, 2022 (the “ Amendment Act ”),
requires holders of mining licences to make cash contributions to the Environmental Protection
Fund (the “ EPF”). The Mines and Minerals Act No. 11 of 2015 has been repealed by the
Mineral Regulation Commission Act No. 14 of 2024. These contributions provide assurance to
the Director of Mines Safety (the “ Director ”) that licence holders shall comply with the
conditions set forth under the licence (in particular, with regards environmental obligations).
The EPF also provides protection to the Government of Zambia against the risk of having the
obligation to rehabilitate a mining area where the holder of a mining licence fails to do so. In
order to establish the rehabilitation cost estimate amount that is required to be contributed to
the EPF by a mining rights holder, the Mines and Minerals (Environmental) Regulations
Statutory Instrument No. 29 of 1997 of the Laws of Zambia (“ SI 29 ”), provides in Regulation
8 that an audit report on the impact of the environment of any exploration or mining operation
should be prepared by two independent competent persons. The first audit should be conducted
within 15 months of commissioning such exploration or mining operations.
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Once the audit is completed, the audit report must be submitted to the Director for
evaluation. The Director shall, in accordance with Regulation 8 and 66 of SI 29, inform the
licence holder of any modifications to the report. Once the report is approved, the amount to
be contributed to the EPF is locked in, and the applicant is required to make cash contributions
to the EPF as directed by the Director, with the unpaid balance secured by way of bank
guarantee. The Director may direct a mining rights holder to conduct subsequent audits in
respect of a mining rights area, in which case the amount to be contributed to the EPF can be
subsequently adjusted. The Director shall inform the developer of the category in which the
prospecting, exploration or mining operation shall fall and the contribution to the Fund, we are
currently classified under category 3 which is the highest category under SI 29.
Failure to obtain a bank guarantee may result in the Director changing the conditions of
obtaining the bank guarantee to a self-guarantee, where the institution will be required to make
their own remissions of the guaranteed sum, terms of payment may be agreed between
ourselves and the Director. As of the Latest Practicable Date, as advised by our legal advisors
as to Zambian laws and based on the clearance letter issued by the Mining Cadastre Department
(now the Minerals Regulation Commission), we had complied with the Mines Act and the
Amendment Act in all material aspects.
The costs associated with compliance with these laws and regulations are substantial and
no assurance can be given that new rules and regulations will not be applied in a manner which
could limit or curtail our smelting, mineral processing or production. Amendments to current
laws and regulations governing mining, smelting, mineral processing or production could have
a material adverse effect on our business, financial condition and results of operations.
Moreover, we cannot assure you that we will be able to comply with all relevant laws and
regulations that are adopted or amended in the future. Failure to comply with, or any change
or difference in the interpretation or enforcement policy of, such laws and regulations, or the
occurrence of any unanticipated effects from our operations, in particular those relating to
environmental, health and safety issues, could subject us to punitive governmental measures,
including forced suspension or closure of operations or revocation of our licenses of operating
activities, which may have a material adverse effect on our business, financial condition and
results of operations. We are also required to comply with the laws, regulations and conditions
which govern our mineral processing licenses, breach of which could ultimately result in
termination of these rights. A violation of environmental laws as well as health and safety laws
relating to operating facilities, or failure to comply with the instructions of the relevant health,
safety or environmental authorities, could lead to, among other things, a temporary shutdown
of all or a portion of the relevant facility; a loss of the right to operate the relevant facility; the
imposition of costly compliance procedures and fines; or serious reputational damage to us.
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Our production businesses are subject to operational and transportation-related risks,
occupational and environmental hazards, production difficulties and other risks, which
could damage our reputation, subject us to liability claims and result in substantial costs.
Our production businesses are subject to various risks, including operational and
transportation-related risks and occupational and environmental hazards. We may experience
various types of operational difficulties in connection with the production of our copper-related
and cobalt-related products. Some of our raw materials and chemicals are hazardous and their
storage and use in the production process involve inherent risks. Accidents could materially
affect our production and may give rise to personal injuries and environmental hazards. At
present, our production business are subject to a relatively high operational and transportation-
related risks and occupational and environmental hazards.
Our operations may also be subject to production difficulties such as capacity constraints,
mechanical and systems failures, construction and upgrade delays and delays in the delivery of
machinery, any of which could cause suspension of production and reduced output. Scheduled
and unscheduled maintenance programs may also affect our production output. Any significant
manufacturing disruption could adversely affect our ability to produce and sell cobalt-related
and copper-related products, which could have a material adverse effect on our business,
financial condition and results of operations.
As part of our production operations, we engage in certain inherently risky and hazardous
activities, including, among other things, use of heavy machinery and handling of hazardous
chemicals. As a result, we are subject to risks associated with these activities, including, among
other things, geological catastrophes, toxic gas and liquid leakages, equipment failures,
industrial accidents, fires, explosions and underground water leakages. These risks and hazards
have in some cases resulted in personal injuries and fatalities, damage to or destruction of
properties or production facilities, and pollution and other environmental damages. Any of
these consequences, if significant, could result in business interruption, legal liability and
damage to our reputation and corporate image. In addition, we may be subject to claims
resulting from subsequent use by the customers or other third parties of the facilities and the
products we produce.
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Failure to achieve our production estimates could have a material adverse effect on our
business, financial condition and results of operations.
Estimates of future production for our smelting and mineral processing operations are
subject to changes and are based on, among other things, assumptions regarding ground
conditions and physical characteristics of ores, utilization of production facilities, costs of
production and conditions of the industry and general economy. Actual production figures from
our smelting and mineral processing operations may vary from estimates for a variety of
reasons, including risks and hazards of the types discussed elsewhere in this prospectus, and
as set out below:
 actual ore varying from estimates in grade, tonnage, and metallurgical and other
characteristics;
 unusual or unexpected geological conditions;
 mining dilution;
 lower than estimated recovery rate;
 industrial accidents;
 equipment failures;
 severe weather conditions and natural disasters;
 changes in power costs and potential power shortages;
 shortages of principal supplies needed for operation, including but not limited to
copper ores, explosives, fuels, sulfuric acid and equipment parts; and
 restrictions imposed by government authorities.
Such occurrences could result in damage to mineral properties, mines or processing
facilities, interruptions in production, injury or death to persons, damage to our property or the
property of others, monetary losses and legal liabilities. These factors may cause an operation
that has been profitable in the past to become unprofitable. Estimates of production from mines
or processing facilities not yet in production or from operations that are to be expanded are
based on similar factors (including, in some instances, feasibility studies prepared by our
personnel and/or external consultants), but it is possible that actual cash operating costs and
economic returns will differ significantly from those currently estimated. We cannot assure you
that we will achieve our production estimates. Our failure to achieve our production estimates
could have a material and adverse effect on our business, financial condition and results of
operations.
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The major capital expenditure projects under our expansion program may not be
completed within the expected time frame and budget, or at all, and may not achieve the
intended economic results. Our expenditure may not be fully recovered.
We intend to invest in projects at our existing operations to increase our production
efficiency, as well as to expand and develop our processing capacities. We are also currently
in the process of making significant capital expenditures in connection with the expansion of
our operations. Capital expenditure projects we plan to undertake encompass Zambia copper
smelter improvement project, DR Congo copper smelter I improvement project, and DR Congo
copper smelter II project. We typically conduct feasibility studies to determine whether to
undertake significant construction projects. Actual results may differ significantly from those
anticipated by our feasibility studies.
Our capital expenditure projects may also be delayed or adversely affected by a variety
of factors, including the failure to obtain the necessary regulatory approvals or sufficient
funding, construction difficulties, technical difficulties and manpower or other resource
constraints. In particular, any disruptions, uncertainty or volatility in the capital and credit
markets may limit our ability to obtain financing to meet our funding requirements and we may
postpone certain construction projects if our Directors determine that doing so would be in the
interest of our Group after taking into consideration the current market conditions, our
financial performance and other relevant factors. Costs of these projects may also exceed our
planned investment budget. Even if we are able to complete the projects without any delay and
within our budget, as a consequence of changes in market circumstances or other factors, we
may not achieve the intended economic benefits of these projects. As a consequence of any
delay in completing our capital expenditure projects, cost overruns, changes in market
circumstances or other factors, the intended economic benefits from these capital expenditure
projects may not materialize, and our business, financial condition and results of operations
may be materially and adversely affected.
Our production expansion plan in DR Congo may result in fluctuations in our
profitability, which may affect our financial condition and results of operations.
During the Track Record Period, the production costs in DR Congo were higher than
those in Zambia, resulting in a slight decrease in our gross profit margin from 24.4% in the six
months ended June 30, 2024 to 23.1% in the six months ended June 30, 2025. This was
primarily due to DR Congo’s higher price levels, stronger financial capacity, higher logistics
costs, heavier tax burden, as well as higher raw material costs resulting from higher ore grades
compared to Zambia. See “Financial Information — Period to Period Comparison of Results
of Operations — Six Months Ended June 30, 2025 Compared to Six Months Ended June 30,
2024 — Gross Profit and Gross Profit Margin” for more details. As we plan to expand our
processing capability in DR Congo, we expect revenue from copper cathodes produced in DR
Congo will continue to increase and account for a larger proportion of our total revenue in the
future, which may impact our overall profit margin.
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Any adjustments to our production capability layout may result in fluctuations in our
profitability. We cannot guarantee that our business adjustments will be consistently
successful, and that we will continue to sustain our gross profit margins and profitability levels
in the future.
We may not achieve optimal results in future acquisitions or may encounter difficulties in
integrating and developing the acquired assets or businesses successfully.
As part of our expansion plan, we plan to pursue strategic acquisitions of suitable
upstream copper and cobalt hydrometallurgical resources or facilities, focusing on
opportunities in Africa, South America and the PRC. We do not have specific timetables for
these plans and we cannot be certain that we will be able to identify additional suitable
acquisition candidates available for sale at reasonable prices to consummate any acquisition.
We may encounter intense competition during the expansion process and we may fail to select
or value targets appropriately. In addition, we must receive various governmental and
regulatory approvals and/or permits in order to develop new reserves, which approval may not
be forthcoming.
Further, acquisitions may involve a number of risks, undisclosed issues or legal liabilities.
For example, future acquisitions may expose us to potential risks such as failure to integrate
any acquired business into our operations successfully; diversion of management attention
from our existing business; potential loss of our key employees or the key employees of any
business that we acquire; unanticipated changes in business, industry or general economic
conditions that affect the assumptions underlying the acquisition; and decline in the value of
acquired assets, companies or assets. These and other risks related to acquiring, integrating and
operating acquired assets and companies could cause us not to realize the benefits anticipated
to result from the acquisition of assets or companies, and could have a material adverse effect
on our ability to grow and on our business, financial condition and results of operations.
We purchase raw materials and commodities from third parties and the unavailability or
increase in price of such raw materials and commodities could materially and adversely
affect our business, financial condition and results of operations.
We currently purchase raw materials, especially copper ores from a number of local
suppliers in DR Congo and Zambia for our copper smelting and processing operations, and
purchase certain commodities involving agents in connection with our non-ferrous metal
trading business in Peru. The increasing demand for copper cathodes globally is fueled by the
expansion of the electrical industry, new energy sectors and renewable energy and
infrastructure projects. To meet the growing demands of copper cathodes, availability of raw
materials and supplies, such as copper ores, has from time to time, over the past several years,
been in short supply and could come into deficiency again if the overall industry demands
continue to scale up in the future. The occurrence of natural disasters can lead to the disruption
of the production by our suppliers and result in a shortage of some of the above raw materials.
Any shortage in the supply of such raw materials could drive up their prices and cause
interruptions in production, which could adversely affect our results of operations. If we are
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unable to purchase sufficient amounts of key raw materials such as copper ores or commodities
from third parties, or the grade of available copper ores decreases, the overall profitability of
our copper smelting and processing operations in DR Congo and Zambia and our non-ferrous
metal trading business in Peru would be materially and adversely affected. Furthermore, we
have limited control over the availability and prices of key raw materials that we may purchase
from our suppliers and we are vulnerable to the risk that our suppliers may be unable to supply
key raw materials to meet our demand, which could materially and adversely affect our
business, financial condition and results of operations. See “Business — Suppliers and
Contractors — Use of Trading Agents in Peru” for details.
An increase in our production costs including costs of raw materials and auxiliary
materials and wages could materially and adversely affect our business, financial
condition and results of operations.
Changes in our production costs have a major impact on our profitability. Our main
production expenses are cost of raw materials and auxiliary materials, salaries and overheads.
Changes in costs of our smelting and processing operations can occur as a result of unforeseen
events, and could result in changes in profitability or reserve estimates. Many of these changes
may be beyond our control. We cannot assure you that our production costs will not increase
in the future, which could materially and adversely affect our business, financial condition and
results of operations.
Our copper and cobalt production depends on a stable, timely and adequate supply of
energy, power and raw materials such as water and chemicals at commercially reasonable
prices.
In addition to copper and cobalt raw materials, we depend on the supply of energy, power
and raw materials such as water and chemicals in order to maintain our production processes.
Our production volume and production costs are dependent on our ability to source such
materials at acceptable prices and maintain a stable supply. The prices for these raw materials
are subject to price volatility attributable to a number of factors which may be beyond our
control, including inflation, supplier capacity constraints, general economic conditions,
commodity price fluctuations, demand from other industries for the same materials, the
availability of complementary and substitute materials, and local and national regulatory
requirements. Furthermore, there can be no assurance that shortages of energy or water will not
occur in the future or that we will be able to pass on any cost increases in raw materials, energy
or water to our customers. Significant fluctuations in such costs may have a material effect on
our profitability if we are unable to adjust the prices of our products accordingly, and may also
harm our competitive advantage with respect to the affected products. In particular, increases
in energy and raw material prices that we are unable to pass onto our consumers will reduce
our profit margins. Moreover, if the supply of such materials is affected by natural disasters,
adverse weather conditions, suppliers’ equipment failures, disruptions in transport or other
inclement factors, we may not be able to locate alternative sources of supply in sufficient
quantities, of suitable quality and/or at acceptable prices. Any such events may have a material
adverse effect on our business, financial condition and results of operations.
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Failure to maintain an effective quality control system could have a material adverse
effect on our business, financial condition and results of operations.
As the quality of our products is critical to the success of our businesses, we must
maintain an effective quality control system for our production and other operational activities.
For example, our quality control system has been certified to ISO 9001:2015 standard.
However, the effectiveness of our quality control system depends significantly on a number of
factors, including the design of the system and the related training programs, as well as our
ability to ensure that our employees adhere to our quality control policies and guidelines.
Any failure or deterioration of our quality control system could result in defects in our
products, which in turn may subject us to contractual, product liability and other claims. Any
such claims, regardless of whether they are ultimately successful, could cause us to incur
significant costs, harm our business reputation and result in significant disruption to our
operations. Furthermore, if any such claims were ultimately successful, we could be required
to pay substantial monetary damages or penalties, which could have a material adverse effect
on our businesses, financial condition, results of operations and reputation.
We may experience a shortage of reliable and adequate inland or seaborne transport
capacity for our raw materials. Any disruption in transportation of our raw materials or
any material increase in transportation costs could have a material adverse effect on our
business, financial condition and results of operations.
We use roadway transportation for raw materials purchased locally. We have not
experienced any roadway transportation or shipping disruptions that had a material adverse
effect on our business, financial condition and results of operations. However, we cannot
assure you that we will not experience any material delay in transporting our raw materials as
a result of insufficient road and sea capacity in the future. Furthermore, natural disasters may
cause interruption to the transportation system which could in turn affect the transportation of
our raw materials. If we are unable to secure the required transportation capacity on terms and
conditions acceptable to us or at all, our business, financial condition and results of operations
could be materially and adversely affected.
Non-ferrous metal markets are highly competitive and we face competition from
international and PRC competitors.
We face increasing competition from both PRC and international copper producers. For
details, see “Industry Overview — Competitive Landscape of Global Copper Cathode Market
Overview.” Our major competitors comprise of both PRC and international copper and
non-ferrous metals producers. Our competitors may have certain advantages, including greater
financial, technical and raw materials resources, greater economies of scale, more well-known
brand names and more established relationships in certain markets. As a result, these
competitors may be able to devote extensive resources to the discovery of new assets in
connection with copper production and acquire new raw material suppliers. Competition could
also have an adverse impact on the demand for, and pricing of, our copper products, which in
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turn affects our business and financial condition. There can be no assurance that we will be able
to continue to compete effectively or maintain or further improve our market position
compared to our major competitors. If we fail to compete effectively, the intensive industry
competition may have a material adverse effect on our business, financial condition and results
of operations.
We may not be able to obtain sufficient funding for our ongoing operations, existing and
future capital expenditure requirements, acquisition and investment plans and other
funding requirements on acceptable terms, or at all, which could limit our ability to
develop our business.
Smelting and processing of mineral resources is capital intensive. To fund our current and
future operations, capital expenditure requirements, acquisition and investment plans and other
funding requirements, we need sufficient internal sources of liquidity or access to financing
from external sources. We currently fund our capital expenditures with bank and other
borrowings and cash flow from our operating activities. Our future liquidity, payment of trade
and other payables and repayment of our outstanding debt obligations as and when they
become due will primarily depend on our ability to maintain adequate cash inflows from our
operating activities and adequate external financing. Our ability to generate adequate cash
inflows from operating activities may be affected by decreasing sales or downward movements
in prices for copper products. Our ability to obtain external financing in the future is subject
to a variety of uncertainties, including: our future financial condition, results of operations and
cash flows, the condition of the global and domestic financial markets, changes in bank interest
rates and lending practices and conditions, ability to renew or refinance our existing short-term
bank loans or secure additional external financing, and, after the Listing we may not be able
to continue obtaining bank loans increasing the cost of our future borrowings. The occurrence
of any of these events may cause us not to have sufficient cash flow to fund our operating costs
and, in that event, our business, financial condition and results of operations may be materially
and adversely affected.
Further, the disruptions, uncertainty or volatility in the capital and credit markets
resulting from the global financial crisis which have resulted in tighter lending policies may
limit our ability to obtain financing to meet our funding requirements. If adequate funding is
not available to us on favorable terms, in time, or at all, it could materially and adversely affect
our ability to fund our existing operations, or develop or expand our business. Additionally, if
we decide to raise additional funds through the incurrence of debt, our interest and debt
repayment obligations will increase, and we may be subject to additional covenants, which
could limit our ability to access cash flows from operations. If we decide to raise additional
funds through the issuance of our Shares or other securities, the interests of our Shareholders
may be substantially diluted.
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We may experience delays in receiving progress payments and trade receivables from our
customers, which could materially and adversely affect our cash flow and working capital,
our business, financial condition and results of operations.
We may receive progress payments from our customers on a delayed basis from time to
time. Delays for progress payments and final payments may result in a large amount of trade
receivables and may affect our cash flow. In 2022, 2023, 2024 and the six months ended June
30, 2024 and 2025, our trade receivables turnover days (being the sum of trade receivables at
amortized costs and FVTPL at the beginning of the period and trade receivables at the end of
the period, divided by two, and then divided by revenue and multiplied by the numbers of days
for the period) were 26 days, 19 days, 6 days, 17 days and 7 days, respectively. As of June 30,
2025, our trade receivables amounted to RMB41.9 million, which accounted for 4.4% of our
total revenue during the six months ended June 30, 2025. In the event that we encounter delays
or default in the payments of our trade receivables or progress payments by customers, we may
be required to obtain additional working capital to continue with our daily operations. We
cannot assure you that the trade receivables or progress payments will be remitted to us by our
customers on a timely basis or that delays or default in payment will not materially and
adversely affect our business, financial condition and results of operations.
We recorded net current liabilities as of December 31, 2022, 2023 and 2024 and we cannot
assure you that we will not record the same in the future.
As of December 31, 2022, 2023 and 2024, we recorded net current liabilities of RMB24.3
million, RMB176.0 million and RMB84.3 million, respectively. See “Financial Information —
Net Current Liabilities” for details of our net current liabilities during the Track Record Period.
The net current liabilities position would expose us to liquidity risk which could restrict our
ability to make necessary capital expenditures or explore business opportunities, and our
business, results of operations and financial condition could be materially and adversely
affected. There can be no assurance that we will not have net current liabilities in the future.
We cannot assure you that we will always be able to raise necessary funding to finance our
current liabilities and other debt obligations. Our ability to arrange financing and the cost of
such financing are both dependent on the macroeconomic conditions, capital and debt market
conditions, lending policies of banks, among other factors. In the event we are unable to obtain
adequate financing to meet our working capital requirements, we may be forced to delay,
adjust, reduce or even abandon our business strategies. Our business, prospects and financial
condition may be materially and adversely affected if our cash flow and capital resources are
insufficient to finance our debt obligations.
Fluctuations in currencies could materially and adversely affect our business, financial
condition and results of operations.
The exchange of RMB against a basket of foreign currencies, including U.S. dollar,
fluctuates and is affected by, among other things, changes in international political and
economic conditions as well as supply and demand in local market. There is no assurance that,
under a certain exchange rate, we will possess sufficient foreign exchange to meet our foreign
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exchange requirements and obligations. It is difficult to predict how market forces or
government policies may impact the exchange rate between RMB and U.S. dollar or other
currencies in the future. We are exposed to foreign currency risk when conducting sales and
purchases in currency other than the functional currencies and are also subject to exchange rate
exposures arising from foreign currency borrowings. During the Track Record Period, we had
certain financial assets/liabilities, intercompany receivables/payables, input V A T receivables
and tax payables denominated in U.S. dollar, RMB, SGD, ZMW, CDF and SOL, which exposed
us to foreign currency risks. See Note 31 in the Accountants’ Report set out in Appendix I to
this prospectus for further details.
As a substantial portion of our revenue derived from overseas markets during the Track
Record Period and our overseas sales were primarily settled in U.S. dollar, any appreciation or
depreciation of U.S. dollar against RMB, ZMW or other currencies of the countries where we
operate may result in fluctuations in the value of U.S. dollar amount, which may adversely
affect our financial condition and results of operations. For instance, we recorded a foreign
exchange loss of RMB19.6 million and RMB1.5 million in 2023 and 2024, primarily due to the
significant depreciation of ZMW-denominated input V A T receivables against U.S. dollar in the
corresponding years. As we expect that U.S. dollar, RMB, ZMW, CDF and SOL will continue
to be used in our business in the foreseeable future, any fluctuation in exchange rates could
materially and adversely affect our business, financial condition and results of operations.
Any termination of, or changes to, the government grants that we enjoy could adversely
affect our profitability.
In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, we received
government grants of RMB4.6 million, RMB0.9 million, RMB0.3 million, RMB13.0 thousand
and RMB0.3 million, respectively. We cannot assure you that we will continue to receive such
government grants at the same level or at all, in which case our business, financial condition
and results of operation may be materially and adversely affected. In addition, in the ordinary
course of our business, we are subject to complex income tax and other tax regulations, and
significant judgment is required in the determination of a provision for income taxes. As such,
the tax authorities in jurisdictions we operate in may successfully challenge our position and
may require us to pay taxes, interest on such taxes, and/or penalties in excess of our tax
provisions. The discontinuation of financial incentives available to us may materially and
adversely affect our financial condition and results of operations.
Our business, financial condition and results of operations may be materially and
adversely affected by labor disputes, labor conflicts and disruptions.
We did not experience any material work stoppages, strikes or other major labor problems
in the Track Record Period. However, there is no assurance that any of such events will not
arise in the future. If our employees were to engage in a strike or other work stoppage, we could
experience significant disruption to our operations and/or incur higher on-going labor costs,
which may have an adverse effect on our businesses and results of operations.
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As of June 30, 2025, we had 901 full-time employees. Our employees in the PRC and
Zambia are currently represented by labor unions. In addition, employees of some of our
suppliers or customers may become unionized in the future or experience labor instability and
we may not be able to predict the outcome of any future labor negotiations. Any conflicts
between us and our employees’ labor unions, or between our suppliers or customers and their
respective unions, could have an adverse effect on our financial condition and results of
operations. Labor costs in regions where we operate have been increasing in recent years and
could continue to increase in the future. If labor costs in these regions continue to increase, our
production costs will increase. We may not be able to fully pass on these increased costs to
customers by increasing the selling prices of our products in light of competitive pressure in
the markets where we operate. In such circumstances, our profit margin may decrease, which
could have an adverse effect on our results of operations.
Our business depends substantially on the continuing efforts of our executive officers and
our ability to attract, retain and train key qualified technical personnel, key senior
management and other personnel for our operations.
Our business depends substantially on the continued services of our executive officers
and, to a significant extent, on our ability to attract, train and retain qualified technical
personnel, particularly those with expertise in copper mining and production. There can be no
assurance that we will be able to attract or retain qualified technical personnel. If one or more
of our executive officers or key employees are unable or unwilling to continue their service
with us, we might not be able to replace them with persons with equivalent expertise and
experience within a reasonable period of time or at all. If any of our executive officers or key
employees joins a competitor or forms a competing company, we may lose customers,
suppliers, know-how and key personnel and staff members. As a result, our business may be
severely disrupted, our business, financial condition and results of operations may be
materially and adversely affected, and we may incur additional expenses to recruit, train and
retain personnel. Furthermore, local supply of highly skilled personnel for copper smelting and
processing operations in Zambia and DR Congo is relatively limited. As our business has
grown and is expected to continue to grow rapidly, our ability to train and integrate new
employees into our operations may not meet the growing demands of our business.
Our operations are exposed to safety risks and the occurrence of industrial accidents.
Our operations are subject to risks related to workplace safety, including damage to, or
destruction of, production equipment and facilities, or operational accidents, and could also
result in personal injury, death, performance delays, monetary losses and legal liability. There
can be no assurance that serious accidents or fatalities will not occur in the future. If we fail
to prevent serious accidents or fatalities, we will be held liable for damages arising out of or
in connection with such incidents or facilities, which could have a material adverse effect on
our results of operations, business, financial condition and prospects.
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We may be subject to adverse publicity which could materially and adversely affect our
reputation and our business, financial condition and results of operations.
As an established brand, our image is sensitive to the public’s perception of us as a
business in entirety, which includes not only the quality of our products, but also our corporate
management and culture. We cannot guarantee that no one will, intentionally or incidentally,
disseminate information about us, including the quality of our products, our internal
management matters and negative information for management, that may result in negative
perception of us by the public. Although we had promptly taken clarification or rectification
measures when we faced negative publicity in the past, we cannot assure you that such
measures will always be effective in the future. In addition, as our Non-H Shares are quoted
on NEEQ, our Company and member of our management or employees are under the
supervision of securities regulatory bodies. Any negative publicity about our Company,
Directors, employees, spokespersons or products, regardless of nature or veracity, could lead
to potential loss of customers or investors’ confidence or difficulty in retaining or recruiting
talents that are essential to our business operations. As a result, our business, financial
condition, results of operations, reputation and prospects may be materially and adversely
affected.
We may be involved in legal or other proceedings arising out of our operations, including
product liability claims, from time to time and may face significant liabilities as a result.
From time to time, we may be involved in claims, disputes and legal proceedings in our
ordinary course of business. These may concern issues relating to, among others, property
ownership, health and safety accidents, environmental matters, breach of contract, employment
or labor disputes and infringement of intellectual property rights. For instance, in Zambia, we
had been involved in a legal proceeding initiated by a third party challenging our title to a
parcel of land due to historical ownership issues. As of the Latest Practicable Date, we were
not involved in any litigations and legal proceedings in DR Congo, Zambia, Singapore and the
PRC that may materially affect our business and results of operations. If we are found liable
on any of the claims, we would have to incur a charge against our current earnings to the extent
that a reserve had not been established for the matter in our accounts, or to the extent the claims
were not sufficiently covered by our insurance coverage. Claims brought by us against our
customers may include claims for additional costs incurred in excess of current contract
provisions arising out of delays and changes in the initial scope of work. Both claims brought
against us and by us, if not resolved through negotiation, are often subject to lengthy and
expensive litigation or arbitration proceedings. Amounts ultimately realized from our
customers or other claims by us could differ materially from the balances included in our
financial statements, resulting in a charge against earnings to the extent profit has already been
accrued on a project or other contract. Charges associated with claims brought against us and
write-downs associated with claims brought by us could have a material adverse impact on our
businesses, financial condition, results of operations and cash flow. Moreover, legal
proceedings resulting in judgments or findings against us may harm our reputation and damage
our prospects to secure contracts in the future.
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We may be unable to obtain, retain or renew governmental concessions, permits,
authorizations, licenses and other approvals required in connection with our operations.
We are required under applicable laws and regulations to seek governmental concessions,
permits, authorizations, mineral processing licenses and other approvals, including in
connection with our operating, producing, trading and development activities. For more details,
see “Business” and “Regulatory Overview.” Obtaining, retaining or renewing the necessary
governmental concessions, permits, authorizations, licenses or approvals can be a complex and
time-consuming process and may involve substantial costs or the imposition of unfavorable
conditions. There can be considerable delay in obtaining the necessary permits and other
authorizations and, in certain cases, the relevant government agency may be unable to issue a
permit or other authorization which is required in a timely manner.
In addition, the duration and success of license applications are contingent on many
factors that are beyond our control (including pressure from local communities, non-
governmental organizations or media). Certain of the concessions, permits, authorizations,
licenses or approvals held by us in respect of our smelting and mineral processing operations
and production and export activities may be terminated under certain circumstances, which
include the following: (i) failure to comply with any of the material, general or special license
conditions (including provision of regular reports and the taking out of appropriate insurance,
payment of surface rights and compliance with social obligations for mining titles in DR
Congo) or gain an extension to the time period required for compliance with such conditions;
(ii) minimum expenditure levels or minimum work commitments are not achieved by us (or a
corresponding penalty is not paid to the appropriate state authority); (iii) environmental, health
and safety standards are not met; (iv) operating in the licensed areas in a manner that violates
the laws of Zambia and DR Congo; (v) failure to provide information required or requested by
authorities; and (vi) liquidation of the immediate license holder. If we are unable to continue
to comply with such laws and regulations, our licenses and permits may be restricted, revoked,
or canceled and we may be subject to penalty. Our operational income derived from such
licenses or permits may also be forfeited. To the extent that these laws, regulations and legal
requirements are evolving, additional licenses and permits may be required or we may be
required to adjust our activities in order to comply with such regulations and in doing so, may
incur substantial costs.
Failure to obtain or renew a necessary concession, permit, authorization, license or
approval or termination by any relevant governmental authority of any one or more of our
concessions, permits, authorizations, licenses, property rights or approvals could result in us
being unable to proceed with the development or continued operation of our facility or project
which, in turn, may have a material adverse effect on our business, financial condition and
results of operations.
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Our business depends on our ability to protect our intellectual property rights, and we
may be exposed to intellectual property infringement and other claims by third parties,
which, if successful, could cause us to pay significant damage awards and incur other
costs.
We rely primarily on a combination of our patents, trademarks, copyrights and employee
and third-party confidentiality agreements to protect our intellectual property rights. As of the
Latest Practicable Date, we had 30 registered patents, 31 copyrights and 12 trademarks in the
PRC, all of which are material to our business. As of the same date, we were not aware of any
material violation or infringement of our patents, trademarks, copyrights and other intellectual
property rights. However, we cannot assure you that infringement of our intellectual property
rights by other parties does not exist now or will not occur in the future. To protect our
intellectual property rights and maintain our competitive advantage, we may engage in legal
proceedings against parties who we believe are infringing upon our intellectual property rights.
Legal proceedings are often costly and may divert management attention and other resources
away from our business. In certain situations, we may have to initiate legal proceedings in
foreign jurisdictions, in which case we are subject to additional risks as to the result of the
proceedings and the amount of damages that we can recover. In addition, we have no insurance
coverage against litigation costs and will have to bear all costs arising from such litigations to
the extent that we are unable to recover from other parties.
Our success also depends on our ability to use, develop and protect our technology and
know-how without infringing the intellectual property rights of third parties. We cannot assure
you that we will not be subject to claims of infringement upon the intellectual property rights
of third parties. The validity and scope of any potential claims relating to our production
technology and know-how involve complex scientific, legal and factual questions and analysis
and, therefore, may be highly uncertain. The defense and prosecution of intellectual property
suits, patent opposition proceedings and related legal and administrative proceedings can be
both costly and time consuming and may significantly divert the efforts and resources of our
technical and management personnel. An adverse determination in any such litigation or
proceedings to which we are a party may subject us to significant liability to third parties,
require us to seek licenses from third parties, pay ongoing royalties, or redesign our products
or subject us to injunctions prohibiting the manufacture and sale of our products or the use of
our technologies. Protracted litigation may also result in our customers or potential customers
deferring or limiting their purchase of our products until resolution of such litigations.
We face risks related to natural disaster, terrorist activities, political unrest, financial or
economic crisis and other force majeure events, which could significantly disrupt our
operations.
Our business is subject to general and social conditions. Natural disasters, acts of war and
terrorism, riots, political regime change after the elections and other disasters that are beyond
our control could materially and adversely affect the economy, infrastructure and livelihoods
of the people of Zambia, DR Congo or elsewhere. If any of these natural disasters happens in
the regions where we operate, our operations may be disrupted and as a result, our business,
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financial condition and results of operations may be materially and adversely affected. In
addition, acts of war and terrorism may cause damage or disruption to us or our employees,
facilities, markets, suppliers or customers, any of which may have a material adverse effect on
our business, financial condition and results of operations or our Share price. Potential riots,
war or terrorist attacks may also cause uncertainty and cause our business to suffer in ways that
we cannot currently predict.
We are subject to various risks relating to third-party payment arrangements.
During the Track Record Period, two of our customers (the “ Relevant Customer(s) ”)
based in the PRC within the same group settled their outstanding payments to us through a third
party payer (such payer(s), the “ Third-party Payer(s) and such arrangement(s), the “ Third-
Party Arrangements ”), which is these customers’ parent company. The aggregate amount that
was settled through third party was insignificant. However, third-party payments may subject
us to various legal risks, including: (i) possible claims for return of funds from the third-party
payor who was not contractually indebted to us; (ii) potential risks arising from the fact that
we have limited knowledge about the source and purpose of the funds utilized by the
third-party payor, such as possible money laundering risks; and (iii) possible claims from
liquidators of the third-party payor. Any such claim, prosecution or investigation against us
may cost us significant time and financial and managerial resources and may materially and
adversely affect our business, financial condition, reputation, results of operations and
prospects.
Our operations may be subject to transfer pricing adjustments by competent authorities.
Our operations may be subject to transfer pricing adjustments by competent authorities.
We have certain intercompany transactions that may be subject to audit or challenge by the
relevant tax authorities. During the Track Record Period, our subsidiaries have engaged in the
following types of intra-group transactions, namely (i) purchases and sales of mineral products;
(ii) purchases and sales of equipment and material; (iii) service provisions and (iv) financing
arrangements. For more details, see “Business — Transfer Pricing Arrangements.” As such, we
could face adverse tax consequences if the relevant tax authorities determine that some of our
intra-group transactions do not represent arm’s length negotiations and consequently adjust any
of those entities’ income in the form of a transfer pricing adjustment. A transfer pricing
adjustment could, among other things, increase our tax liabilities. If we fail to rectify such
incident within the limited timeframe required by the relevant tax authorities, the relevant tax
authorities may impose late payment interest or surcharge and other penalties on us for any
unpaid taxes. In addition, a transfer pricing arrangement may give rise to tax recoverable under
double taxation relief arrangement (if applicable) in certain jurisdictions as a result of tax
adjustments. There is no assurance that we could successfully recover the tax recoverable from
the relevant tax authorities. Our business, financial condition and results of operation may
therefore be materially and adversely affected.
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Further, we expect that the intra-group transactions will continue in the foreseeable future
and we will determine transfer pricing arrangements that we believe to be the same as that
transacted with unrelated third parties on an arms’ length basis. However, there is no assurance
that tax authorities would share the same view, or such transfer pricing laws and regulations
will not be modified. In the event that an authority of any relevant jurisdiction determines that
such intercompany transactions were not on an arm’s length basis that affect taxable income,
such authority could require our relevant subsidiaries to re-determine the transfer prices and
thereby adjust revenue, deduct costs and expenses or adjust taxable income of the relevant
subsidiary in order to accurately reflect the taxable income. Any such adjustment could result
in higher overall tax liability for us, which may adversely affect our business, financial
condition and results of operations.
We could be adversely affected as a result of any transactions we enter into to certain
countries that are, or become subject to, sanctions administered by the U.S., the European
Union, the United Kingdom, the United Nations, Australia and other relevant sanctions
authorities.
The U.S. and other jurisdictions or organisations, including the European Union, the
United Kingdom, the United Nations and Australia, have, through executive order, passing of
legislation or other governmental means, implemented measures that impose economic
sanctions against such countries or against targeted industry sectors, groups of companies or
persons, and/or organisations within such countries.
Jinxun DR Congo sold certain copper cathode to our Singapore subsidiary internally
during the Track Record Period. DR Congo is subject to limited sets of targeted sanctions, with
certain sanctioned entities located in such country, however, it is not a country that is subject
to territorial broad base sanctions (i.e., not a Comprehensively Sanctioned Country).
Transactions with sanctioned entities located in DR Congo or export of export controlled
products to such country could expose us to sanctions risks. On the basis that (i) these
transactions involving DR Congo did not involve any exports or transactions of any items
subject to the EAR to DR Congo; and (ii) our counterparties in DR Congo were not to any
sanctioned entities, we are advised by our legal advisor as to International Sanctions, our
activities with DR Congo did not represent a violation of the International Sanctions.
Sanctions laws and regulations are constantly evolving, and new persons and entities are
regularly added to the list of Sanctioned Persons. Further, new requirements or restrictions
could come into effect which might increase the scrutiny on our business or result in one or
more of our business activities being deemed to have violated sanctions. We cannot provide
any assurance that our future business will be free of sanctions risk or our business will
conform to the expectations and requirements of the authorities of the U.S. or any other
jurisdictions. Our business and reputation could be adversely affected if the authorities of the
U.S., European Union, the United Kingdom, the United Nations, Australia or any other
jurisdictions were to determine that any of our future activities constitutes a violation of the
sanctions they impose or provides a basis for a sanctions designation of us.
RISK FACTORS
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RISKS RELATING TO DOING BUSINESS IN THE PRC
Changes in the economic conditions, as well as the interpretation and implementation of
the relevant laws, rules and regulations, may affect our business, prospects, results of
operations, financial condition, and cash flows.
A portion of our assets are located in the PRC and a portion of our revenue is derived from
our business in the PRC. Accordingly, our business, financial condition, results of operations
and prospects are, to a certain extent, subject to economic, political and legal developments in
the PRC.
In recent years, the PRC Government has implemented measures emphasizing the
utilisation of market forces in economic reform and the establishment of sound corporate
governance practices in business enterprises. These economic reform measures may be
adjusted or modified, or applied inconsistently. If the business environment in the PRC
changes, our business in the PRC may also be certainly affected.
Failure to comply with the PRC labor laws and regulations in relation to social insurance
and housing fund contributions for our employees could subject us to fines and other legal
or administrative sanctions.
We are required to contribute to a number of social insurance funds, including funds for
pension insurance, unemployment insurance, basic medical insurance, work-related injury
insurance, maternity insurance and housing provident fund on behalf of our employees in the
PRC.
According to the Regulation on the Administration of Housing Provident Funds (ג
၍ଣૢԷ), which was promulgated by the State Council and became effective on
April 3, 1999 and latest amended on March 24, 2019, we are required to set up housing
provident fund accounts (ሪ˒) and pay the housing provident fund on time and in
full for our employees. According to the PRC Social Insurance Law (ึ
), which was promulgated by the Standing Committee of the National People’s
Congress on October 28, 2010 and became effective on July 1, 2011 and amended on December
29, 2018, a PRC enterprise is required to obtain social insurance certificates (ᎈ೮াᗇ)
for its employees and to pay the social insurance contributions on time and in full. There is no
assurance that our historical and current practice with respect to the contribution of social
insurance plans will be deemed in full compliance with relevant PRC laws and regulations by
PRC government authorities. In the event of any such non-compliance, we may be required by
the relevant PRC authority to pay the amount of unpaid social insurance within a prescribed
time limit and may be subject to an overdue charge of 0.05% of the delayed payment per day.
If we fail to do so within the period as required by the local social insurance authorities, we
may be subject to a penalty of up to three times of the amount of social insurance premiums
payable, and the relevant authorities may apply to a PRC court for an order to enforce the
payment. Pursuant to relevant PRC laws and regulations, if we fail to pay the full amount of
housing provident fund within as required, the relevant authorities may order us to make the
outstanding payment within a prescribed time limit. If we fail to do so within such prescribed
time limit, the relevant authorities may apply to a PRC court for compulsory enforcement.
RISK FACTORS
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During the Track Record Period, the Company and our PRC subsidiaries did not fully
contribute to social insurance and housing provident funds for their employees. The shortfall
in social insurance contributions for the years/periods 2022, 2023, 2024 and the six months
ended June 30, 2025 amounted to RMB3.0 million, RMB2.2 million, RMB3.5 million and
RMB1.9 million respectively. Correspondingly, the shortfall in housing provident fund
contributions for the same periods were RMB0.8 million, RMB0.8 million, RMB1.0 million
and RMB0.5 million. Pursuant to the aforementioned regulations, the maximum potential
penalty for the shortfall in social insurance contributions is the penalty of up to three times of
the amount of social insurance premiums payable, totaling RMB28.2 million. In addition, the
maximum potential penalty for the shortfall in housing provident fund contributions is the
compulsory enforcement of the shortfalls applied by the PRC court. Considering that (i) as of
the Latest Practicable Date, our Directors confirm that we had not received any notice from any
regulatory authority with respect to potential administrative penalties or enforcement actions
as a result of our failure to fully contribute to social insurance and housing provident funds for
our employees; (ii) we have obtained confirmations from the relevant local government
authorities, which, as confirmed by our PRC Legal Advisors, have the authority and are
competent to provide such confirmations, stating that no administrative penalties had been
imposed on the Company and our PRC subsidiaries with respect to social insurance and
housing provident funds during the Track Record Period; (iii) our Directors confirm that we
will promptly make up the underpaid social insurance and housing provident funds in
accordance with the requirements of the relevant authorities in the future; (iv) Mr. Y uan
confirms that he will undertake the relevant joint liability to make up the social insurance and
housing provident funds, and bear all possible losses caused to us, including any late fees and
fines, our PRC Legal Advisors are of the view that the risk that the relevant government
authorities would impose on us administrative penalties for our historical underpayment to the
social insurance and housing provident funds is remote if we rectify our historical
underpayment within a prescribed period upon our receipt of notice from the relevant local
government authorities.
According to the Interpretation (II) of the Supreme People’s Court on Issues Concerning
the Application of Law in the Trial of Labor Dispute Casesᙄ
༆ᙑ(ɚ) (promulgated by the Supreme People’s Court on July 31,
2025, and came into effect on September 1, 2025, hereinafter “Labor Law Interpretation II”),
any agreement between an employer and an employee, or any commitment by an employee to
an employer, which stipulates that there is no need to pay social insurance premiums, shall be
deemed invalid by the people’s court. Considering that: (i) the shortfall and penalties for
unpaid social insurance and housing provident fund contributions during the Track Record
Period would not be exacerbated by Labor Law Interpretation II; (ii) as of the Latest
Practicable Date, there is no such agreement between us and our employees to not pay social
insurance; and (iii) as of the Latest Practicable Date, we did not experience any material
disputes with our employees, we understand that such promulgation of Labor Law
Interpretation II would not have a material adverse effect on our business and financial
performance.
RISK FACTORS
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According to the Labor Law of the PRC (), which was
promulgated by the Standing Committee of the National People’s Congress on July 5, 1994 and
became effective on January 1, 1995 and was latest amended on December 29, 2018, we are
required to maintain a system of daily working hours for each worker not in excess of eight
hours and average weekly working hours not in excess of 44 hours. In addition, according to
the Provisions of the State Council on the Working Hours of Employees (ᔖʈʈ
), which was promulgated by the State Council on February 3, 1994 and
became effective on March 1, 1994 and was amended on May 1, 1995, the weekly working
hours of an employee shall last 40 hours. However, according to the Notice on Issuing the
Measures for the Examination and Approval of Flexible Working Hours Arrangement and
Comprehensive Working Hours Scheme Adopted by Enterprises (ʈЪ
), which was promulgated by the Ministry of Labor on
December 14, 1994 and became effective on January 1, 1995, enterprises that are not in a
position to maintain a system of daily and weekly working hours under the Labor Law of the
PRC due to particularities of their production may adopt a flexible working hours arrangement
or comprehensive working hours scheme and other measures for work and rest. Local measures
for work and rest such as flexible work hours work systems or comprehensive work hours work
systems shall be formulated by the labor administration department of the various provinces,
and filed with the labor administration department of the State Council. Should any of our
subsidiaries adopt a flexible working hours arrangement in the future, we cannot assure you
that such arrangement will be deemed to have complied with the relevant regulations, or that
the relevant labor administrative departments will not deem the excess working hours as
overtime working hours, and thus order our relevant subsidiaries to pay our employees
overtime wages, which will lead to an increase in our labor costs.
In addition to the above, if we fail to comply with any other relevant PRC labor laws and
regulations, we may be exposed to penalties or be required to pay damages to employees. For
example, if any of our PRC subsidiaries engaging in manufacturing fails to comply with the
relevant laws on prevention and treatment of occupational diseases, then such subsidiary may
be subject to fines and other administrative penalties, and any employees who are deemed to
suffer from occupational diseases may have also rights to seek compensation from us.
Compliance with the relevant PRC labor laws and regulations could substantially increase our
labor costs. Increases in our labor costs and future disputes with our employees could adversely
affect our business, results of operations, financial condition and prospects. In particular, an
increase in labor costs in the PRC could increase our production costs in the future and we
might not be able to pass these increases on to our consumers due to competitive pricing
pressure.
RISK FACTORS
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We may be required to pay administrative fines for our failure to register some of our
lease agreements with housing administration authorities.
As of the Latest Practicable Date, we had not completed the administrative filings of the
lease agreement relating to 12 properties we leased for business and employee dormitory
purposes. According to applicable PRC laws and regulations, the lessor and the lessee of a
lease agreement are required to file the lease agreement with relevant governmental authorities
within 30 days after the execution of the lease agreement. If the filing is not made, the
governmental authorities may require that the filing be made within a stated period of time,
failing which they may impose a fine ranging from RMB1,000 to RMB10,000 for each
agreement that has not been properly filed. As registration of the lease agreement will require
the cooperation of the landlord, we cannot assure you that we can complete the registration of
such lease agreement in a timely manner or at all. If we fail to complete the administrative
filings within the period required by the relevant governmental authorities and the relevant
authorities determine that we shall be liable for failing to complete the administrative filings
of all the relevant lease agreements, we may be subject to a fine of up to RMB120,000 or such
other fine which may be determined for each unregistered lease agreement by relevant
government authorities. As of the Latest Practicable Date, we had not been subject to any
penalties arising from the non-registration of lease agreements.
However, we cannot assure you that we would not be subject to any penalties and/or
requests from the relevant governmental authorities to fulfill the registration requirements,
which may increase our costs in the future.
Changes in international trade policies, and in relationships between the PRC and other
countries, may adversely impact our business and operating results.
Unfavorable government policies related to international trade, including capital controls
or tariffs, or changes in diplomatic relations between the PRC and foreign countries or regions,
have the potential to impact the sales of our products in international markets. These factors
may also influence the import or export of raw materials essential to our international
expansion efforts. The implementation of new tariffs, changes in legislation and regulations, or
the renegotiation of existing trade agreements could result in a certain effect on our business,
prospects, results of operations, financial condition, and cash flows.
Government regulation of currency conversion could certainly affect our business,
financial condition and results of operations.
Current foreign exchange laws and regulations in the PRC permit domestic enterprises in
the PRC to carry out their current account foreign exchange transactions, including dividend
distributions, without obtaining the SAFE’s prior approvals, by complying with certain
procedural requirements. However, foreign exchange transactions for capital account purposes,
including direct overseas investment and various international loans, may require the prior
approval or registration with the SAFE. We cannot assure you that the PRC government will
not regulate access in the future to foreign currencies for current account transactions. If our
trading partners in the PRC may not be able to fund their overseas purchases of our products
and this could certainly affect our business, financial condition and results of operations.
RISK FACTORS
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Our operations are subject to PRC tax laws and regulations.
We are subject to periodic examinations on the fulfillment of our tax obligation under the
PRC tax laws and regulations by PRC tax authorities. Although we believe that in the past, we
have acted in compliance with the requirements under the relevant PRC tax laws and
regulations in all material aspects and established effective internal control measures in
relation to accounting regularities, we cannot assure you that future examinations by PRC tax
authorities would not result in fines, other penalties or actions that could materially and
adversely affect our business, prospects, results of operations, financial condition, and cash
flows.
Holders of H Shares may be subject to PRC income taxes.
Non-PRC resident individual or non-PRC resident enterprise holders of H Shares, whose
names appear on the register of members of H Shares of our Company, are subject to PRC
income tax in accordance with the applicable tax laws and regulations, on dividends received
from us and gains realized through the sale or transfer by other means of H shares by such
shareholders.
According to the Individual Income Tax Law of the PRC (੻೼
) and the Implementation Regulations for the Individual Income Tax Law of the PRC ( ʕ
ૢԷ), both came into effect on January 1, 2019, the tax
applicable to non-PRC resident individuals is proportionate at a rate of 20% for any dividends
obtained from within the PRC or gains on transfer of shares and shall be withheld and paid by
the withholding agent. Pursuant to the Arrangement between the Mainland and the Hong Kong
Special Administrative Region (the “ Hong Kong SAR ”) for the Avoidance of Double Taxation
and the Prevention of Fiscal Evasion with respect to Taxes on Income (݁
τર) (the “ Double Taxation Arrangements ”)
executed on August 21, 2006, the PRC Government may levy taxes on the dividends paid by
PRC companies to Hong Kong residents in accordance with the PRC laws, but the levied tax
(in the case the beneficial owner of the dividends are not companies directly holding at least
25% of the equity interest in the company paying the dividends) shall not exceed 10% of the
total dividends.
According to the Enterprise Income Tax Law of the PRC (੻೼
), which was revised and implemented on December 29, 2018, and the Implementation
Regulations for the Enterprise Income Tax Law of the PRC (ج
ૢԷ), which was latest revised and implemented on January 20, 2025, if a non-resident
enterprise has no presence or establishment within the PRC, or if it has established a presence
or establishment but the income obtained has no actual connection with such presence or
establishment, it shall pay an enterprise income tax on its income derived from within the PRC
with a reduced rate of 10%. Pursuant to the Double Taxation Arrangements, dividends paid by
PRC resident enterprises to Hong Kong residents can be taxed either in Hong Kong or in
accordance with the PRC laws. However, if the beneficial owner of the dividends is a Hong
Kong resident, the tax charged shall not exceed: (i) 5% of the total amount of dividends if the
Hong Kong resident is a company that directly owns at least 25% of the capital of the PRC
resident enterprise paying dividends; or (ii) otherwise, 10% of the total amount of dividends.
RISK FACTORS
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Considering the foregoing, non-PRC resident holders of our H Shares should be aware
that they may be obligated to pay PRC income tax on the dividends and gains realized through
sales or transfers by other means of the H Shares.
Investors may experience difficulties in effecting service of legal process and enforcing
judgments against us, our Directors and senior management in the PRC.
We conduct a significant portion of our operations in Africa and South America and a
significant portion of our non-current assets are located in Africa and South America. In
addition, most of our Directors and senior management reside outside Hong Kong, and most
of their assets are located outside Hong Kong. As a result, it may be difficult or impossible for
you to effect service of process within Hong Kong upon these individuals, or to bring an action
against us or against these individuals in Hong Kong in the event that you believe your rights
have been infringed under the Hong Kong laws or otherwise. Even if you are successful in
bringing an action of this kind, the laws of the various countries in which we have operations
may make it difficult for you to enforce a judgment against our assets or the assets of our
Directors and senior management. Further, in practice, courts hearing foreign judgments
relating to assets in DR Congo that are to be enforced in DR Congo will be subject to long
delays such that it will be impossible for investors to estimate the time necessary to obtain
enforcement of foreign judgments in DR Congo.
Under Zambian law, the Foreign Judgments (Reciprocal Enforcement), Chapter 76 of the
Laws of Zambia (the “ Foreign Judgments Act ”), a foreign judgment can only be enforced in
Zambia if it is registered pursuant to a statutory order that has been made pursuant to section
3 of the Foreign Judgment Act. In this regard:
(a) the President of Zambia is empowered by law to make an order extending the
enforcement of the judgment of courts in jurisdictions that accord to reciprocity of
treatment and in which, the foreign judgment to be enforced, emanates from; and
(b) currently, orders have only been made in respect of Gilbert and Ellice Islands,
British Solomon Islands and Her Britannic Majesty’s dominions. However, a
judgment obtained from a court outside of Zambia may be enforced in Zambia under
common law by commencing an action founded on that judgment as a cause of
action in Zambian court.
Therefore, a judgment obtained from a court outside of Zambia will only be registrable
and enforceable if a Presidential Order has been obtained in respect of the jurisdiction from
which the judgment was obtained. In the case of judgments obtained from the courts of
England and Russia no such Presidential Order exists.
RISK FACTORS
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We however note that Zambia is a signatory to the New Y ork Convention. Subject to
compliance with the New Y ork Convention and the Arbitration Act no 19 of 2000, the Zambian
courts will register an arbitral award without re-examination or re-litigation of the merits of the
case, thereby allowing enforcement of the arbitral award.
All of our executive Directors and senior management reside within the PRC, and a
portion of our company’s assets and part of the assets of those persons are located within the
PRC. It may be uncertain for investors to effect service of process upon us or those persons
inside the PRC or to enforce against us or them in the PRC any judgments obtained from
non-PRC courts.
A judgment of a court of another jurisdiction may only be reciprocally recognized or
enforced if the jurisdiction has a treaty with the PRC or if the judgment complies with the
principle of reciprocity and do not violate the basic principles of the PRC laws, national
sovereignty, security, social interests and public interests, subject to the satisfaction of other
requirements. On January 25, 2024, the Supreme People’s Court issued the Arrangement on
Mutual Recognition and Enforcement of Judgments in Civil and Commercial Matters by Courts
of the Mainland and of the Hong Kong Special Administrative Region (ಥतй
τર) (the “ Arrangement ”), which was
implemented on January 29, 2024. Under the Arrangement, any relevant party may apply to the
relevant PRC court or Hong Kong court for recognition and enforcement of a final court
judgment in civil and commercial cases subject to the conditions set forth in the Arrangement.
Although the Arrangement has come into effect, uncertainties remain as to the outcome and
effectiveness of any action brought under the Arrangement. The recognition and enforcement
of foreign judgments are provided under the PRC Civil Procedures Law. Courts in the PRC may
recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil
Procedures Law on basis of either (i) the treaties between the PRC and the country where the
judgment is made or (ii) on principles of reciprocity between jurisdictions. In addition,
according to the PRC Civil Procedures Law, the courts in the PRC will not enforce a foreign
judgment against us or our Directors and officers if they decide that the judgment violates the
basic principles of PRC law or national sovereignty, security or public interest. As a result, in
case of violation of the above principles, there is no assurance that a judgment rendered by a
court outside the PRC would be recognized and enforced in a court in the PRC.
RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for our H Shares and an active trading market for
our H Shares may not develop. Market performance of our Shares on the NEEQ may not
be indicative of our H Shares.
No public market currently exists for our H Shares. The initial Offer Price for our H
Shares to the public will be the result of negotiations between our Company and the Joint
Representatives (on behalf of themselves and the Underwriters), and the Offer Price may differ
significantly from the market price of the H Shares following the Global Offering. We have
applied to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the H
RISK FACTORS
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Shares. A listing on the Hong Kong Stock Exchange, however, does not guarantee that an active
and liquid trading market for our H Shares will develop, or if it does develop, that it will be
sustained following the Global Offering, or that the market price of the H Shares will rise
following the Global Offering.
Our Shares are currently quoted on NEEQ. The market performance of Shares on NEEQ
may not be indicative of the performance of our H Shares after the Global Offering due to
different characteristics of the PRC capital markets and the Hong Kong capital market. Y ou
should therefore not place undue reliance on our prior trading history on the NEEQ when
evaluating an investment in our Shares.
We have been, and will continue to be, substantially influenced by our Controlling
Shareholders, whose interests may differ from those of other Shareholders.
Immediately after completion of the Global Offering (without taking into account any
Shares which may be issued pursuant to the exercise of the Over-allotment Option), Mr. Y uan
will, directly or through Heli Investment, own in aggregate approximately 74.94% of our
issued share capital, and will continue to be our ultimate Controlling Shareholders pursuant to
the Listing Rules.
Accordingly, Mr. Y uan, being our ultimate Controlling Shareholder, will for the
foreseeable future through his voting power at Shareholders’ meetings and through the persons
he appoint to our Board, be able to exercise influence over our operations and business
strategy, such as matters related to composition of our Board of Directors, selection of our
senior management, amount and timing of dividends and other distributions, formulation and
implementation of our business expansion plans as well as other strategic and investment
decisions, issuance of securities and adjustment to our capital structure, amendment to the
Articles of Association, and other corporate actions requiring approval of our Shareholders,
including merger, consolidation or sale of our assets, or any other change of control event that
may benefit our other Shareholders generally.
The interests of Mr. Y uan may not be the same as, and may conflict with, those of our
public Shareholders. See the sections headed “Relationship with Our Controlling
Shareholders” in this prospectus for further information. We cannot assure you that Mr. Y uan
will not in the future acquire interests in companies or businesses which compete with us. Mr.
Y uan may take direct or indirect actions, including exercising his influence over us as our
Controlling Shareholder, to favor himself or his associates that are detrimental to our interests
and those of our public Shareholders. If this occurs, it may have an adverse effect on the value
of your investment and/or the interests of our public Shareholders.
RISK FACTORS
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The market price and trading volume of our H Shares may be volatile, which could result
in substantial losses for investors who purchase our H Shares in the Global Offering.
The market price and trading volume of our H Shares may be highly volatile. Several
factors beyond our control such as variations in our revenue, earnings and cash flow, strategic
alliances, the addition or departure of key personnel, litigation, the removal of the restrictions
on H share transactions or volatility in market prices and changes in demand for our products
may cause significant and sudden changes to the market price and trading volume of our H
Shares. Furthermore, the market price of our H Shares could also 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. New shares or share-linked securities issued by our Company
may also confer rights and privileges that take priority over those conferred by the H Shares.
The Stock Exchange and other securities markets have, from time to time, experienced
significant price and trading volume volatility that are not related to the operating performance
of any particular company. This volatility may also materially and adversely affect the market
price of our H Shares.
Volatility in the global financial markets could cause significant fluctuations in the price
of our H Shares.
Financial markets around the world have been experiencing heightened volatility and
turmoil since 2008 and may still be vulnerable if the global economy deteriorates again. Upon
the Listing, the price and trading of our H Shares will likely be exposed to the similar market
fluctuations and risk which are irrelevant to our operating performance or prospects. Factors
that may significantly impact the volatility of our stock price include:
 developments in our business or in the financial sector generally, including the
effect of direct governmental actions in the financial markets;
 the operating and share price performance of companies that investors consider to
be comparable to us;
 announcements of strategic developments, acquisitions and other material events by
us or our competitors; and
 changes in global financial markets, global economies and general market
conditions, such as interest or foreign exchange rates as well as stock and
commodity valuations and volatility.
Given the potential market fluctuations described above, the price of our H Shares may
decline significantly, and you may incur losses on your investments.
RISK FACTORS
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Future issuances or sales, or perceived possible issuances or sales, of substantial amounts
of our H Shares in the public market could materially and adversely affect the prevailing
market price of the H Shares and our ability to raise capital in the future.
Sales of our H Shares in the public markets after the Global Offering, or the perception
that these sales may occur, could adversely affect market prices prevailing from time to time.
For more information on the restrictions that may apply to future sales of our H Shares, see
“Underwriting — Underwriting Arrangements and Expenses”. After any of these restrictions
lapse, the market price of our H Shares may decline as a result of future sales of substantial
amounts of our H Shares or other securities relating to our H Shares in the public market, the
issuance of new H Shares or other securities relating to our H Shares, or the perception that
such sales or issuances may occur. This could also materially and adversely affect our ability
to raise capital in the future at a time and at a price acceptable to us and have a material adverse
effect on our business, financial condition and results of operations.
Purchasers of our H Shares will experience immediate dilution and may experience
further dilution if we issue additional H Shares in the future.
The Offer Price of the H Shares is higher than the net tangible asset value per Share
immediately prior to the Global Offering. Therefore, purchasers of our H Shares in the Global
Offering will experience a substantial immediate dilution. There can be no assurance that if we
were to immediately liquidate after the Global Offering, any assets will be distributed to
Shareholders after the creditors’ claims. To expand our business, we may consider offering and
issuing additional H Shares in the future. Purchasers of the H Shares may experience dilution
in the net tangible asset value per Share of their H Shares if we issue additional H Shares in
the future at a price which is lower than the net tangible asset value per Share at that time.
There is no assurance whether and when we will pay dividends, which is subject to
restrictions under PRC law.
We declared and paid dividends during the Track Record Period. Under the applicable
PRC laws, the payment of dividends may be subject to limitations. See “Financial Information
— Dividends” for details of our distribution of dividends during the Track Record Period and
the relevant laws and regulations regarding declaration and payment of dividends of our
Company. The calculation of our profit under applicable accounting standards differs in certain
respects from the calculation under IFRS Accounting Standards. As a result, we may not be
able to pay a dividend in a given year even if we were profitable as determined under IFRS
Accounting Standards. Our Board and Shareholders’ meeting may declare dividends in the
future after taking into account our results of operations, financial condition, cash requirements
and availability and other factors as it may be deemed relevant at such time. Any declaration
and payment as well as the amount of dividends will be subject to our constitutional documents
and the PRC laws and regulations. No dividend shall be declared or payable except out of our
profits and reserves lawfully available for distribution.
RISK FACTORS
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An investment in the H Shares is subject to risks relating to taxation.
The tax rules and their interpretation relating to an investment in us may change during
our life. The levels of, and reliefs from, taxation may also change. The tax reliefs referred to
in this prospectus are those currently available and their value depends on the individual
circumstances of the investors. Any change in our tax status or the tax applicable to holding
H Shares or in taxation legislation or its interpretation, could affect the value of investments
held by us, affect our ability to provide returns to H Shareholders and/or alter the post-tax
returns to H Shareholders. Statements in this prospectus concerning the taxation of us and our
investors are based upon current tax law and practice which is subject to change.
Y ou should read this entire prospectus carefully and should not consider or rely on any
particular statements in published media reports without carefully considering the risks
and other information contained in this prospectus.
We strongly caution you not to rely on any information contained in press articles or other
media regarding us and the Global Offering. Prior to the publication of this prospectus, there
has been press and media coverage regarding us and the Global Offering. Such press and media
coverage may include references to certain information that does not appear in this prospectus,
including certain operating and financial information and projections, valuations and other
information. We have not authorized the disclosure of any such information in the press or
media and do not accept any responsibility for any such press or media coverage or the
accuracy or completeness of any such information or publication. We make no representation
as to the appropriateness, accuracy, completeness or reliability of any such information or
publication. To the extent that any such information is inconsistent or conflicts with the
information contained in this prospectus, we disclaim responsibility for it and you should not
rely on such information.
Forward-looking information in this prospectus is subject to risks and uncertainties.
This prospectus contains certain forward-looking statements and information relating to
us that are based on the beliefs of our management as well as assumptions made by and
information currently available to our management. When used in this prospectus, the words
“aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “going
forward,” “intend,” “ought to,” “may,” “might,” “plan,” “potential,” “predict,” “project,”
“seek,” “should,” “will,” “would” and similar expressions, as they relate to us or our business,
are intended to identify forward-looking statements. Such statements reflect the current views
of our management with respect to future events, business operations, liquidity and capital
resources, some of which may not materialize or may change. These statements are subject to
certain risks, uncertainties and assumptions, including the other risk factors as described in this
prospectus. Should one or more of these risks or uncertainties materialize, or if any of the
underlying assumptions prove incorrect, actual results may diverge significantly from the
forward-looking statements in this prospectus. Whether actual results will conform to our
expectations and predictions is subject to a number of risks and uncertainties, many of which
are beyond our control, and reflect future business decisions that are subject to change. In light
RISK FACTORS
–7 5–


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of these and other uncertainties, the inclusion of forward-looking statements in this prospectus
should not be regarded as representations that our plans or objectives will be achieved, and
investors should not place undue reliance on such forward-looking statements. All forward
looking statements contained in this prospectus are qualified by reference to the cautionary
statements set out in this section. Subject to the ongoing disclosure obligations of the Listing
Rules or other requirements of the Stock Exchange, we do not intend publicly to update or
otherwise revise the forward-looking statements in this prospectus, whether as a result of new
information, future events or otherwise.
RISK FACTORS
–7 6–


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In preparation for the Listing, our Group has sought the following waiver from strict
compliance with the relevant provisions of the Listing Rules:
MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rules 8.12 and 19A.15 of the Listing Rules, an issuer must have sufficient
management presence in Hong Kong and, in normal circumstances, at least two of the issuer’s
executive directors must be ordinarily resident in Hong Kong.
Since our operations are primarily based and conducted in the PRC and multiple
countries, and all of our executive Directors primarily reside in the PRC, we do not, and for
the foreseeable future will not, have executive Directors who are ordinarily resident in Hong
Kong. Our Group’s management headquarter and senior management are primarily located in
the PRC while our business operations and assets are primarily conducted and located in
multiple countries, and it would be practically difficult and commercially unnecessary for us
to relocate two of our executive Directors to Hong Kong, or to appoint additional executive
Directors solely for the purpose of satisfying Rules 8.12 and 19A.15 of the Listing Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted us, a waiver from compliance with Rules 8.12 and 19A.15 of the Listing Rules subject
to, among others, the following conditions:
(a) pursuant to Rule 3.05 of the Listing Rules, we have appointed two authorized
representatives, Ms. Y uan Mei ( ঺ૠ), our executive Director and secretary of our
Board, and Ms. Wan Wing Yi Carol (֝our company secretary, who will act
as our Company’s principal channel of communication with the Stock Exchange.
Ms. Wan is ordinarily resident in Hong Kong. Although Ms. Y uan resides in the
PRC, she possesses valid travel documents and is able to renew such travel
documents when they expire to travel to Hong Kong. Each of our authorized
representatives will be available to meet with the Stock Exchange in Hong Kong
within a reasonable time frame upon the request of the Stock Exchange and will be
readily contactable by telephone, facsimile and/or email (where available). Each of
our authorized representatives is authorized to communicate on our behalf with the
Stock Exchange. Our Company has been registered as a non-Hong Kong company
under Part 16 of the Companies Ordinance and Ms. Wan Wing Yi Carol (֝has
also been authorized to accept service of legal process and notices in Hong Kong on
behalf of our Company;
(b) both of our authorized representatives have means to contact all our Directors
(including our independent non-executive Directors) promptly at all times as and
when the Stock Exchange wishes to contact our Directors for any matters. Our
Directors who are not ordinarily resident in Hong Kong possess or can apply for
valid travel documents to visit Hong Kong and will be able to meet with the Stock
Exchange within a reasonable period of time, when required. Each of our Directors
W AIVER FROM STRICT COMPLIANCE WITH THE REQUIREMENTS
UNDER THE LISTING RULES
–7 7–


--- page 89 ---
has provided his/her respective mobile phone numbers, office phone numbers, fax
numbers and/or email addresses (where available) to our authorized representatives.
In the event that a Director expects to travel, he/she will endeavor to provide the
phone number of the place of his/her accommodation to our authorized
representatives or maintain an open line of communication via his/her mobile phone.
Each of our Directors and authorized representatives has provided his/her mobile
phone numbers, office phone numbers, fax numbers and/or email addresses (where
available) to the Stock Exchange;
(c) pursuant to Rule 3A.19 of the Listing Rules, we have appointed Quam Capital
Limited as our compliance advisor, which shall have access at all times to our
authorized representatives, Directors, senior management and other officers of our
Company, and will act as an additional channel of communication between the Stock
Exchange and us; and
(d) meetings between the Stock Exchange and our Directors could be arranged through
our authorized representatives or the Compliance Advisor, or directly with our
Directors within a reasonable time frame. We will promptly inform the Stock
Exchange of any changes of our authorized representatives and/or the Compliance
Advisor.
CONSENT IN RELATION TO ALLOCATION OF OFFER SHARES TO CONNECTED
CLIENT OF DISTRIBUTOR
Paragraph 1C of Appendix F1 to the Listing Rules provides that no allocation will be
permitted to “connected clients” of the overall coordinator(s), any syndicate member(s) (other
than the overall coordinator(s)) or any distributor(s) (other than syndicate member(s))
(collectively, the “ Distributors ”, and each a “ Distributor ”), without the prior written consent
of the Stock Exchange.
Paragraph 1B of the Appendix F1 to the Listing Rules states that “connected client” in
relation to an exchange participant means any client which is a member of the same group of
companies as such exchange participant.
As further described in the section headed “Cornerstone Investor” in this prospectus,
China Asset Management (Hong Kong) Limited (“ ChinaAMC (HK) ”) has entered into a
cornerstone investment agreement with the Company and the Overall Coordinators to subscribe
for the Offer Shares and will hold the Offer Shares on a discretionary basis for and on behalf
of independent third parties.
ChinaAMC (HK) is a wholly-owned subsidiary of China Asset Management Co., Ltd.,
which is owned as to 62.2% by CITIC Securities Company Limited. CITIC Securities
Company Limited is the holding company of CLSA Limited (“ CLSA ”), one of the Overall
Coordinators and Underwriters of the Global Offering.
W AIVER FROM STRICT COMPLIANCE WITH THE REQUIREMENTS
UNDER THE LISTING RULES
–7 8–


--- page 90 ---
Therefore, ChinaAMC (HK) and CLSA are members of the same group of companies and
ChinaAMC (HK) is a connected client of CLSA and the participation of ChinaAMC (HK) as
a cornerstone investor in the Global Offering would constitute an allocation to a connected
client of the CLSA (the “ Connected Client ”).
ChinaAMC (HK) is a SFC licensed corporation carrying out types 1, 4 and 9 regulated
activities in Hong Kong. As the discretionary fund manager of the fund which will make
cornerstone investment in this Global Offering, ChinaAMC (HK) is fully responsible for the
daily management and investment decision of the fund. All participants in the cornerstone
investment are Hong Kong-based public funds. One of the Hong Kong-based public funds
participating in the cornerstone investment under the management of ChinaAMC (HK) is
distributed by Futu Securities International (Hong Kong) Limited (“ Futu ”) and ultimately
74.29% held by clients of Futu, one of the Underwriters of the Global Offering.
Therefore, the participation of ChinaAMC (HK) as a cornerstone investor would also
constitute an allocation to connected client of Futu.
We have applied to the Stock Exchange for, and the Stock Exchange has granted, its
consent pursuant to paragraph 1C of Appendix F1 to the Listing Rules for ChinaAMC (HK) to
participate as a cornerstone investor in the Global Offering subject to the following conditions:
(a) the Offer Shares to be allocated to ChinaAMC (HK), to the best of the Overall
Coordinators’ knowledge and belief, will be held on a discretionary basis on behalf
of independent third parties, application basis for the consent application and details
of the allocation have been disclosed in this prospectus and will be disclosed in the
allotment results announcement of our Company;
(b) the cornerstone investment agreement does not contain any material term which is
more favourable to ChinaAMC (HK) than those in other cornerstone investment
agreements;
(c) no preferential treatment has been, nor will be, given to ChinaAMC (HK) by virtue
of its relationship with CLSA or Futu (other than the assured entitlement under a
cornerstone investment agreement for ChinaAMC (HK));
(d) CLSA or Futu has not participated and will not participate in the decision-making
process or relevant discussions relating to the allocation of securities to ChinaAMC
(HK); and
(e) each of our Company, the Overall Coordinators, CLSA, Futu and ChinaAMC (HK)
has provided the Stock Exchange a written confirmation in accordance with Chapter
4.15 of the Guide.
W AIVER FROM STRICT COMPLIANCE WITH THE REQUIREMENTS
UNDER THE LISTING RULES
–7 9–


--- page 91 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Companies Ordinance,
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 is neither
misleading nor deceptive, and there are no other matters the omission of which would render
any statement herein or this prospectus misleading.
FILINGS AND APPROV ALS
Our Company submitted the filing documents to the CSRC on June 3, 2025. The CSRC
acknowledged the acceptance of filing application on June 20, 2025. On November 26, 2025,
the CSRC issued the notification of completion of the filing procedures for the Listing and the
Global Offering. As advised by our PRC Legal Advisors, our Company has completed all
necessary filings with the CSRC for the Listing and the Global Offering.
INFORMATION ON THE GLOBAL OFFERING
The Offer Shares are offered solely on the basis of information contained and
representations made in this prospectus, and on and subject to the terms and conditions set out
herein and therein. No person is authorized to give any information in connection with the
Global Offering or make any representation not contained in this prospectus, and any
information or representation not contained herein and therein must not be relied upon as
having been authorized by the Company, the Sole Sponsor, the Sponsor-Overall Coordinator,
the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead
Managers, the Capital Market Intermediaries, the Underwriters, any of their respective
directors, members of senior management, authorized representatives, agents, employees or
advisors or any other party involved in the Global Offering. Neither the delivery of this
prospectus nor any offering, sale or delivery made in connection with the Offer Shares should,
under any circumstances, constitute a representation that there has been no change or
development reasonably likely to involve a change in our affairs since the date of this
prospectus or imply that the information contained in this prospectus is correct as of any date
subsequent to the date of this prospectus.
Details of the structure of the Global Offering, including its conditions, are set out in
“Structure of the Global Offering”.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–8 0–


--- page 92 ---
UNDERWRITING
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,
the application procedure for Hong Kong Offer Shares is set out in “How to Apply for Hong
Kong Offer Shares” of this prospectus.
The Listing is sponsored by the Sole Sponsor. The Hong Kong Public Offering is fully
underwritten by the Hong Kong Underwriters under the terms and conditions of the Hong Kong
Underwriting Agreement. The International Offering is expected to be fully underwritten by the
International Underwriters subject to the terms and conditions of the International
Underwriting Agreement, which is expected to be entered into on or around Wednesday,
January 7, 2026.
For further information about the Underwriters and the underwriting arrangements, see
“Underwriting”.
RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES
Each person acquiring the Offer Shares under the Hong Kong Public Offering will be
required to, or be deemed by his/her acquisition of the Hong Kong Offer Shares to, confirm that
he/she is aware of the restrictions on offer and sale of the Offer Shares described in this
prospectus.
No action has been taken to permit a public offering of the Offer Shares in any
jurisdiction other than in Hong Kong, or the distribution of this prospectus in any jurisdiction
other than in 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. The distribution of this prospectus and the offer and sale of the
Offer Shares in jurisdictions other than in Hong Kong are subject to restrictions and may not
be made except as permitted under the applicable securities laws of such jurisdictions pursuant
to registration with or authorization by the relevant securities regulatory authorities or an
exemption therefrom. In particular, the Offer Shares have not been publicly offered or sold,
directly or indirectly, in the PRC.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–8 1–


--- page 93 ---
APPLICATION FOR LISTING ON THE HONG KONG STOCK EXCHANGE
We have applied to the Listing Committee for the Listing of, and permission to deal in,
the H Shares to be issued pursuant to the Global Offering, including the H Shares which may
be issued pursuant to the exercise of the Over-allotment Option. Save for our non-H Shares
quoted on the NEEQ, no part of the H Share or loan capital of the Company is listed on or dealt
in on any other stock exchange and no such listing or permission to list is being or proposed
to be sought in the near future.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
If the Stock Exchange grants the Listing of, and permission to deal in, the H Shares 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 Listing Date or any other date as determined by HKSCC. Settlement of transactions
between participants of the Stock Exchange is required to take place in CCASS on the second
settlement day after any trading day. All activities under CCASS are subject to the General
Rules of HKSCC and the HKSCC Operational Procedures in effect from time to time. All
necessary arrangements have been made for the H Shares to be admitted into CCASS. Investors
should seek the advice of their stockbroker or other professional advisor for details of the
settlement arrangements as such arrangements may affect their rights and interests.
H SHARE REGISTER AND STAMP DUTY
All of the H Shares issued pursuant to applications made in the Global Offering will be
registered on our H Share register to be maintained in Hong Kong by our H Share Registrar,
Computershare Hong Kong Investor Services Limited. Our principal register of members will
be maintained by us at our headquarters in the PRC. Dealings in the H Shares registered on our
H Share register will be subject to Hong Kong stamp duty. For further details of Hong Kong
stamp duty, please seek professional tax advice.
REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
We have instructed our H Share Registrar, and our H Share Registrar has agreed, not to
register the subscription, purchase or transfer of any H Shares in the name of any particular
holder unless and until such holder delivers a signed form to our H Share Registrar in respect
of those H Shares bearing statements to the effect that the holder:
 agrees with us and each of our Shareholders, and we agree with each Shareholder,
to observe and comply with the Companies Ordinance, the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, the PRC Company Law and our Articles
of Association;
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–8 2–


--- page 94 ---
 agrees with us, each of our Shareholders, Directors, managers and officers, and we,
acting for ourselves and for each of our Directors, managers and officers agree with
each of our Shareholders, to refer all differences and claims arising from our
Articles of Association or any rights or obligations conferred or imposed by the PRC
Company Law or other relevant laws and administrative regulations concerning our
affairs to arbitration in accordance with our Articles of Association, and any
reference to arbitration shall be deemed to authorize the arbitration tribunal to
conduct hearings in open session and to publish its award, which shall be final and
conclusive. For further details, see “Appendix IV — Summary of Principal Legal
and Regulatory Provisions” and “Appendix V — Summary of the Articles of
Association” in this prospectus;
 agrees with us and each of our Shareholders that the H Shares are freely transferable
by the holders thereof according to our Articles of Association; and
 authorizes us to enter into a contract on his or her behalf with each of our Directors,
managers and officers whereby such Directors, managers and officers undertake to
observe and comply with their obligations to our Shareholders as stipulated in our
Articles of Association.
Persons applying for or purchasing H Shares under the Global Offering are deemed, by
their making an application or purchase, to have represented that they are not close associates
(as such term is defined in the Listing Rules) of any of the Directors or an existing Shareholder
of the Company or a nominee of any of the foregoing.
DIVIDENDS PAYABLE TO HOLDERS OF H SHARES
Unless determined otherwise by our Company, dividends payable in Hong Kong dollars
in respect of H Shares will be paid to the Shareholders as recorded in our H Share register, and
sent by ordinary post, at the Shareholders’ own risk, to the registered address of each
Shareholder.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their professional
advisors if they are in any doubt as to the taxation implications of subscribing for, purchasing,
holding or disposal of, dealing in or exercising any rights attached to the H Shares. None of
the Company, the Sole Sponsor, the Sponsor-Overall Coordinator, the Overall Coordinators,
the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital
Market Intermediaries, the Underwriters, any of their respective directors or any other person
or party involved in the Global Offering accepts responsibility for any tax effects on, or
liabilities of, any person resulting from the subscription for, purchase, holding or disposal of,
dealing in or exercising any rights attached to the H Shares.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–8 3–


--- page 95 ---
APPLICATION PROCEDURE FOR THE HONG KONG OFFER SHARES
The application procedure for Hong Kong Offer Shares is set out in “How to Apply for
Hong Kong Offer Shares”.
OVER-ALLOTMENT AND STABILIZATION
Further details of the arrangements relating to stabilization and the Over-allotment Option
are set out in “Structure of the Global Offering — Over-allotment Option” and “Structure of
the Global Offering — Stabilization.” Unless otherwise specified, all relevant information in
this prospectus assumes no exercise of the Over-allotment Option.
CURRENCY TRANSLATIONS
Solely for your convenience, this prospectus contains translations of certain Renminbi
amounts into Hong Kong dollar and of Renminbi amounts into US dollars at specified rates.
Unless indicated otherwise, the translation of Renminbi into Hong Kong dollars and of
Renminbi into US dollars, and vice versa, in this prospectus was made at the following rates:
RMB1.00 to HK$1.1025.
HK$7.7809 to US$1.00.
No representations are made that any amount in Renminbi, Hong Kong dollars or US
dollars can be or could have been at the relevant dates converted at the above rates or any other
rates or at all.
LANGUAGE
If there is any inconsistency between the English version of this prospectus and its
Chinese translation, the English version of this prospectus shall prevail. If there is any
inconsistency between the Chinese names of PRC nationals, entities, departments, facilities,
certificates, titles, laws, regulations and the like mentioned in this prospectus and their English
translations, the Chinese names shall prevail.
ROUNDING
Certain amounts and percentages figures included in this prospectus have been subject to
rounding adjustments. Any discrepancies in any table or chart between totals and sums of
amounts listed therein are due to rounding.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–8 4–


--- page 96 ---
DIRECTORS
Name Address Nationality
Executive Directors
Mr. Y uan Rong ( ঺࿲) Room 2403, 24/F, Unit 1, Block 6
Dingyi Tianjing Community
No. 754 Xuefu Road, Kunming
Y unnan Province
PRC
Chinese
Ms. Y uan Mei ( ঺ૠ) Room 402, Block 10
Xinyu Shengjing Garden
No. 268 Kaike Road
Wuhua District, Kunming
Y unnan Province
PRC
Chinese
Mr. Y ang Y ongchang (׹Room 2-402, Block 3
Xuefu Renjia District
No. 747 Xuefu Road
Wuhua District, Kunming
Y unnan Province
PRC
Chinese
Independent non-executive Directors
Ms. Zheng Dongyu ( ቍ̆ಽ) 502, Unit 3, Block 5
Staff Residential Community
Y unnan University
No. 343 Longquan Road
Kunming
Y unnan Province
PRC
Chinese
Mr. Xia Hongying (Ꮠ) Room 302, Block 3
Rongjin Garden
No. 68 Jiaoyi Road
Wuhua District, Kunming
Y unnan Province
PRC
Chinese
Mr. Wong Hok Bun Mario
(රኪⅳ)
Room A, 11/F
Honiton Building
No. 8 Honiton Road
Hong Kong
Chinese
See “Directors and Senior Management” in this prospectus for further details of our
Directors.
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 5–


--- page 97 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Sole Sponsor and Sponsor-Overall
Coordinator
Huatai Financial Holdings
(Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
Overall Coordinators, Joint Global
Coordinators, Joint Bookrunners
and Joint Lead Managers
Huatai Financial Holdings
(Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Joint Bookrunners, Joint Lead Managers
and Capital Market Intermediaries (in
alphabetical order)
ABCI Capital Limited
(acting as Joint Bookrunner only)
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
ABCI Securities Company Limited
(acting as Joint Lead Manager and Capital
Market Intermediary)
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
TFI Securities and Futures Limited
16/F, Two Pacific Place
88 Queensway
Admiralty
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 6–


--- page 98 ---
UOB Kay Hian (Hong Kong) Limited
6/F Harcourt House
39 Gloucester Road
Hong Kong
Joint Lead Managers and Capital Market
Intermediaries (in alphabetical order)
Futu Securities International (Hong
Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road Central
Hong Kong
Legal advisors to our Company As to Hong Kong and United States laws:
Sidley Austin
Level 39, Two International Finance Centre
8 Finance Street
Central
Hong Kong
As to PRC laws:
JunHe LLP
20/F China Resources Building
8 Jianguomenbei Avenue
Beijing
PRC
As to DR Congo law:
Bennani & Associés RDC SAS
76 Avenue de la Justice Sixth Floor
Kinshasa/Gombe
DR Congo
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 7–


--- page 99 ---
As to Zambian law:
Chibesakunda & Co
CCO House, Stand No. 2374
Kelvin Siwale Road
P .O. Box 30279, Lusaka
Zambia
As to Peruvian laws:
Estudio Muñiz, Olaya, Meléndez, Castro,
Ono & Herrera Abogados
Las Begonias 475
6th Floor
San Isidro
Lima, Peru
As to Singaporean laws:
Shook Lin & Bok LLP
1 Robinson Road
#18-00 AIA Tower
Singapore 048542
As to International Sanctions laws:
Hogan Lovells International LLP
11th Floor, One Pacific Place
88 Queensway
Hong Kong
Legal advisors to the Sole Sponsor and
the Underwriters
As to Hong Kong laws:
Han Kun Law Offices LLP
Rooms 4301-10
43/F., Gloucester Tower
The Landmark
15 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 8–


--- page 100 ---
As to PRC laws:
Han Kun Law Offices
9/F, Office Tower C1
Oriental Plaza
1 East Chang An Avenue
Dongcheng District
Beijing
PRC
As to DR Congo law:
MBM-CONSEIL Sca
60, Avenue Uvira
11ème étage, Imm. Aimée Tower
Gombe — Kinshasa
DR Congo
As to Zambian law:
Musa Dudhia & Co.
2nd Floor, ALN House
1394 Mushemi Road
Rhodes Park, Lusaka
Zambia
Reporting Accountants and Independent
Auditor
KPMG
Certified Public Accountants,
Public Interest Entity Auditor registered
in accordance with the Accounting and
Financial Reporting Council Ordinance
8th Floor, Prince’s Building
10 Chater Road
Central
Hong Kong
Industry Consultant Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
Room 2504, Wheelock Square
1717 West Nanjing Road
Jingan District, Shanghai
PRC
Receiving Bank Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 9–


--- page 101 ---
Registered office 3/F, Block B
No. 1389 Changyuan North Road
Gaoxin District
Kunming
Y unnan Province
PRC
Headquarters 3/F, Block B
No. 1389 Changyuan North Road
Gaoxin District
Kunming
Y unnan Province
PRC
Principal place of business in Hong Kong 40th Floor, Dah Sing Financial Centre
No. 248 Queen’s Road East
Wanchai
Hong Kong
Company’s website www.jinxunec.com
(Information on this website does not form
part of this prospectus)
Company Secretary Ms. Wan Wing Yi Carol (֝)
Associate member of both The Hong Kong
Chartered Governance Institute and The
Chartered Governance Institute)
40th Floor, Dah Sing Financial Centre
No. 248 Queen’s Road East
Wanchai
Hong Kong
Authorized representatives Ms. Y uan Mei ( ঺ૠ)
Room 402, Block 10
Xinyu Shengjing Garden
No. 268 Kaike Road
Wuhua District, Kunming
Y unnan Province
PRC
CORPORATE INFORMATION
–9 0–


--- page 102 ---
Ms. Wan Wing Yi Carol (֝)
40th Floor, Dah Sing Financial Centre
No. 248 Queen’s Road East
Wanchai
Hong Kong
Audit Committee Mr. Wong Hok Bun Mario ( රኪⅳ)
(Chairman)
Ms. Zheng Dongyu ( ቍ̆ಽ)
Mr. Xia Hongying (Ꮠ)
Remuneration and Appraisal Committee Ms. Zheng Dongyu ( ቍ̆ಽ) (Chairman)
Mr. Xia Hongying (Ꮠ)
Ms. Y uan Mei ( ঺ૠ)
Nomination Committee Ms. Zheng Dongyu ( ቍ̆ಽ) (Chairman)
Mr. Y uan Rong ( ঺࿲)
Mr. Wong Hok Bun Mario ( රኪⅳ)
Strategy Committee Mr. Y uan Rong ( ঺࿲) (Chairman)
Ms. Y uan Mei ( ঺ૠ)
Mr. Xia Hongying (Ꮠ)
Compliance advisor Quam Capital Limited
5/F and 24/F (Rooms 2401 and 2412)
Wing On Centre
111 Connaught Road Central
Hong Kong
H Share Registrar Computershare Hong Kong Investor
Services Limited
Shops 1712-1716, 17th Floor, Hopewell
Centre
No. 183 Queens Road East
Wan Chai
Hong Kong
Principal bank Industrial Bank Co., Limited,
Hefei Branch
1 Floor, Huilong Building
No. 1777 Qimen Road
Administrative District
Hefei City
Anhui Province
PRC
CORPORATE INFORMATION
–9 1–


--- page 103 ---
The information and statistics set out in this section and other sections of this
prospectus were extracted from the Frost & Sullivan Report, which was commissioned by
us, and from various official government publications and other publicly available
publications. We engaged Frost & Sullivan to prepare the Frost & Sullivan Report, an
independent industry report, in connection with the Global Offering. We believe that the
sources of this information are appropriate sources for such information. We have no
reason to believe that such information is false or misleading or that any fact has been
omitted that would render such information false or misleading. The information from
official government sources has not been independently verified by us, the Sole Sponsor ,
the Sponsor-Overall Coordinator , the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of
their respective directors and advisors, or any other persons or parties involved in the
Global Offering, and no representation is given as to its accuracy.
SOURCE OF INFORMATION
We commissioned Frost & Sullivan to conduct market research on non-ferrous metal
industry and prepare the Frost & Sullivan Report. Frost & Sullivan is an independent global
consulting firm founded in 1961 in New Y ork that offers industry research and market
strategies. We have contracted to pay RMB380,000 to Frost & Sullivan for compiling the Frost
& Sullivan Report.
In preparing the Frost & Sullivan Report, Frost & Sullivan conducted detailed primary
research which involved discussing the status of the industry with certain leading industry
participants and conducting interviews with relevant parties. Frost & Sullivan also conducted
secondary research which involved reviewing company reports, independent research reports
and data based on its own research database. Frost & Sullivan obtained the figures for the
estimated total market size from historical data analysis plotted against macroeconomic data as
well as considered the above-mentioned industry key drivers. Its market engineering
forecasting methodology integrates several forecasting techniques with the market engineering
measurement-based system and relies on the expertise of the analyst team in integrating the
critical market elements investigated during the research phase of the project. These elements
primarily include expert-opinion forecasting methodology, integration of market drivers and
restraints, integration with the market challenges, integration of the market engineering
measurement trends and integration of econometric variables.
The Frost & Sullivan Report is compiled based on the following assumptions: (i) the
social, economic and political environment of the globe and Chinese Mainland is likely to
remain stable in the forecast period; and (ii) related industry key drivers are likely to drive the
market in the forecast period.
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OVERVIEW OF GLOBAL NON-FERROUS METAL INDUSTRY
Definition and Importance of Non-ferrous Metal
Non-ferrous metals are all metals except iron, manganese and chromium, representing a
category of metals with a wide range of industrial uses. Based on physical and chemical
properties, non-ferrous metals can be divided into base metals (e.g. copper, aluminum, lead,
zinc), precious metals (e.g. gold, silver, platinum group metals) and rare metals (e.g. cobalt,
lithium, tungsten, molybdenum). In addition, they can be classified according to their density
into light metals (e.g. aluminum, magnesium) and heavy metals (e.g. copper, lead). The
diversity of non-ferrous metals makes them widely used in various industrial fields and is an
important pillar of modern industrial production and scientific and technological development.
Non-ferrous metals serve as a fundamental pillar of the modern industrial system, playing
a critical role across sectors such as power generation, construction, transportation, and
manufacturing. They provide essential support for traditional industries and infrastructure
development. For instance, copper is a key material in power transmission and electronic
products due to its excellent electrical and thermal conductivity, while aluminum, known for
its light weight and high strength, is widely used in automotive, aerospace, and construction
applications. Moreover, non-ferrous metals are vital to emerging industries such as new energy,
electronics, and intelligent manufacturing. Lithium and cobalt are core components of lithium
batteries, forming the foundation of the new energy vehicles and energy storage systems, while
rare earth metals are essential in high-performance magnets, lasers, and wind turbines, driving
technological progress and industrial upgrading. Furthermore, the unique properties of
non-ferrous metals make them strategically important in high-tech and defense sectors.
Titanium alloys, valued for their strength and corrosion resistance, are extensively used in
aerospace and naval equipment, and precious metals such as platinum and gold play a crucial
role in catalysts and semiconductor manufacturing, supporting national innovation and
security.
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Market Size of Global Non-ferrous Metal Industry
The global major non-ferrous metals reserve refers to the economically extractable
quantities of major non-ferrous metals, that is, are deemed recoverable under current
technological and economic conditions. The global reserve of major non-ferrous metals have
remained relatively stable over the past year. From 2020 to 2024, global reserve of major
non-ferrous metals decreased from 39.6 billion tons to 38.7 billion tons, with a CAGR of
-0.6%. This reduction may be attributed to accelerated industrial consumption during the
post-pandemic recovery, along with supply chain disruptions and insufficient investment in
mining exploration. Looking ahead, driven by steady investment in global exploration
activities in resource-rich regions such as South America and Africa, as well as advances in
geological exploration technologies such as deep-earth imaging and remote sensing, global
reserve of major non-ferrous metals expect to increase to 39.9 billion tons by 2029, with a
CAGR of 0.7% from 2025 to 2029.
Market Size of Global Major Non-ferrous Metals Reserve, 2020-2029E
0
5
10
15
20
25
30
35
40
45
Billion Tons
CAGR 2020-2024 CAGR 2025E-2029E
-0.6% 0.7%Global Major Non-ferrous Metals Reserve
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
39.6 41.3 39.7 39.8 38.7 38.7 38.9 39.1 39.5 39.9
Source: USGS, Interviews with Industry Experts, Frost & Sullivan
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The global production of major non-ferrous metals has shown a steady upward trend in
recent years, driven by increasing infrastructure investments and rising demand for key metals
in renewable energy technologies. Global production of major non-ferrous metal increased
from 466.5 million tons in 2020 to 524.3 million tons in 2024, with a CAGR of approximately
3.0%. This growth has been fueled by expanding urbanization, the transition to clean energy,
and the growing need for materials such as copper, aluminum, and lithium in electric vehicles
and energy storage systems. In the future, it is projected to reach 611.0 million tons in 2029,
representing a CAGR of 3.2% from 2025.
Market Size of Global Major Non-ferrous Metals Production, 2020-2029E
0
50
100
150
200
250
300
350
400
450
Million Tons
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
466.5 464.1 473.2
512.2 524.3 538.0 553.0 570.0 589.0 611.0
500
550
600
650
CAGR 2020-2024 CAGR 2025E-2029E
3.0% 3.2%Global Major Non-ferrous Metals Production
Source: USGS, Interviews with Industry Experts, Frost & Sullivan
Note: Major non-ferrous metals in the chart refers to copper, aluminum, lead, zinc, nickel, tin, antimony, magnesium,
titanium based on industrial prevalence and data availability.
Market Drivers and Trends Analysis of Global Non-ferrous Metal Industry
Rapid Growth in Demand Driven by the New Energy Industry
The rapid development of the new energy industry, particularly in electric vehicles,
energy storage and photovoltaic sector, has significantly increased the demand for non-ferrous
metals such as copper, cobalt, and aluminum. Copper plays an irreplaceable role in electrical
equipment and batteries; cobalt is a key raw material for lithium battery cathodes; and
aluminum has become an essential material for electric vehicles due to its lightweight and
corrosion-resistant properties. As the global transition to green energy accelerates, the demand
for these metals is expected to continue growing at a high rate.
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Technological Advancements Drive Expansion of High-end Applications
Technological advancements in high-end fields such as 5G communications, artificial
intelligence, and aerospace continuously elevate performance requirements for non-ferrous
metals, thereby expanding their application scope and driving overall demand. Breakthroughs
in these sectors necessitate advanced material properties, for instance, ultra-high-purity copper
for low-loss signal transmission in 5G infrastructure, specialized aluminum alloys for thermal
management in AI servers, and cobalt or rare earths with precise magnetic characteristics for
semiconductor manufacturing and high-efficiency motors. As innovations enable next-
generation applications, such as miniaturized chips, satellite systems, and solid-state batteries,
they simultaneously broaden the consumption of non-ferrous metals across emerging industries
and intensify material specifications. This evolution creates demand for high-value-added
products, which are premium-grade non-ferrous metals or components engineered to meet
extreme technical standards, such as radiation-resistant aluminum for aerospace structures or
nanostructured rare-earth magnets for EV drivetrains. These products command significantly
higher prices due to stringent purity thresholds, specialized processing, and their critical role
in enabling high-margin technologies, thereby transforming raw materials into economically
elevated solutions.
Deepening Global Industrial Chain Collaboration
The non-ferrous metals industry is highly globalized in both production and consumption,
with upstream mineral resources and downstream processing industries increasingly working
in close coordination. For example, the abundant copper and cobalt resources in Africa and
South America complement major manufacturing and processing hubs such as China.
Meanwhile, deeper international cooperation and technological exchange have further
enhanced industry efficiency and resource utilization.
Green and Intelligent Development Becomes the Industry Mainstream
In response to stricter environmental regulations and the growing demand for a
low-carbon economy, the non-ferrous metals industry is accelerating its transition toward
greener and smarter operations. Companies are adopting clean energy, increasing recycling
rates, and optimizing production processes to reduce carbon emissions and environmental
pollution. Additionally, the application of digital technologies and AI in mining, smelting, and
processing is enhancing production efficiency and resource utilization, driving the industry
toward high-efficiency development.
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OVERVIEW OF GLOBAL COPPER CATHODE INDUSTRY
Definition and Importance of Copper and Copper Cathode
Copper is a chemical element with a distinctive rose-red metallic luster. Renowned for its
excellent electrical and thermal conductivity, corrosion resistance, and ductility, it is one of the
earliest metals known to humankind and is widely used in the manufacture of various products,
including electrical and electronic components, construction materials, and machinery.
Copper cathode, is high-purity copper produced through pyrometallurgical or
hydrometallurgical refining method. As a fundamental raw material for global industrial
production due to its exceptional electrical conductivity, thermal conductivity, and ductility,
copper cathode plays a pivotal role in the global industrial landscape, finding extensive
applications across critical sectors such as infrastructure, consumer electronics, construction,
and transport, etc. In the new energy sector, copper cathode plays a crucial role in green energy
applications such as electric vehicles, wind power, and solar energy, due to its high purity.
Further considering its strategic position in the global economic framework, copper cathode,
a vital trading commodity in the international non-ferrous metals market, not only reflects the
global economic landscape through its supply and demand dynamics and price fluctuations but
also profoundly reveals the pulse of industrial upgrading.
Value Chain Analysis of Copper Cathode Industry
Downstream
------------
Upstream
Copper Ores
Manufacturing Equipment
Mineral Concentrates
Chemical Products
------
Smelting or Refining of Copper Concentrates
Pyrometallurgical Method
Hydrometallurgical Method
Midstream
Copper Strips Infrastructure
Copper Foils Transport
Copper Pipes
Consumer Electronics
Construction
Copper Rods
Deep Processing End Applications
Source: Interviews with Industry Experts, Frost & Sullivan
The upstream of copper cathode industry includes copper mining and primary processing
of copper ore resources. Core players in the upstream market primarily include copper mining
companies, copper primary processing enterprises, and manufacturing equipment producers,
such as resource extractors and raw material suppliers (e.g. First Quantum Minerals), refiners
and smelters (e.g. Glencore), and others. The production of copper cathode begins with the
extraction and beneficiation of copper ore resources. The main types of copper ore include
sulfide copper ores and oxide copper ores. Through exploration, mining, and beneficiation,
high-grade copper concentrate is extracted. In addition to resource development and
processing, copper concentrate trading plays a critical role in connecting global supply and
demand. As an intermediate commodity, copper concentrate is often traded internationally
before entering smelting facilities, and its price fluctuations have a direct impact on cost
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control and procurement strategies of smelters. The core value of this stage lies in improving
the ore grade through technical means, providing high-quality raw materials for subsequent
smelting processes. Factors such as resource reserves, ore grade, and geographical location
directly affect supply chain stability and cost structure.
The midstream of copper cathode industry engages in the smelting or refining of copper
concentrate, mainly including pyrometallurgy and hydrometallurgy methods. Core players in
the midstream market primarily include copper concentrate processors. Pyrometallurgy is
mostly used for sulfide ores, removing impurities through high-temperature smelting, and
subsequently requires electrolytic refining to purify it into copper cathode with a purity of
99.95% or higher. Hydrometallurgy is more suitable for oxide ores, directly producing copper
cathode through solvent extraction and electrowinning, without the need for additional
refining. Thus, it offers both environmental and operational advantages, including greater
energy efficiency, reduced emissions, and enhanced flexibility. With ongoing technological
advancements and tightening environmental regulations, low-energy, low-pollution methods
such as hydrometallurgy are increasingly becoming a focus for the sustainable development of
the copper cathode industry.
The downstream associates with deep processing and end-use applications of copper
cathode. Core players in the downstream market primarily include copper deep processing
enterprises, trading companies, as well as enterprises in applications such as NEV and
electronics manufacturers. Copper cathode is the core raw material for copper processing, and
through processing, it is made into copper rods, copper pipes, copper foils, etc., which are
widely used in industries such as consumer electronics, infrastructure, construction, and
transport. In addition, trading companies play a pivotal role in connecting smelters, processors,
and end users by coordinating supply chains, stabilizing prices, managing logistics, and
facilitating global copper flow. They enhance market liquidity, mitigate inventory and price
risks, and accelerate distribution efficiency, especially in cross-border trade. Downstream
demand is driven by the rapid development of those industry, leading to a gradual increase in
the demand for high-performance copper materials. The stringent requirements of the end
market for the quality and functionality of copper materials promote technological innovation
and industrial upgrading in downstream segments.
Market Size of Global Copper Cathode Industry
Copper has become a major industrial metal due to its high ductility, malleability, thermal
and electrical conductivity, and resistance to corrosion. Copper serves as a core material in the
manufacturing of essential products and infrastructure, from electricity transmission and
electronic devices to construction, transportation, and renewable energy technologies. Global
copper reserve has increased from approximately 870.0 million tons in 2020 to approximately
980.0 million tons in 2024, representing at a CAGR of 3.0%. The major countries in global
copper reserves are Chile, Peru, Australia, and the DR Congo, among others. In Africa, copper
reserves are mainly concentrated in the DR Congo and Zambia. As of 2024, the copper reserves
of the DR Congo and Zambia account for approximately 10% of the global copper reserves.
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Market Size and Breakdown of Global Copper Reserve in
Major Countries and Regions Worldwide, 2020-2029E
0
200
400
600
800
1,000
1,200
Million Tons
CAGR 2020-2024 CAGR 2025E-2029E
3.0% 1.3%Global Copper Reserve
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
870.0 880.0 890.0
1,000 980.0 985.0 992.0 1,002.0 1,016.0 1,036.0
19.4%
10.2%
10.2%
41.7%
8.2%8.2%
2.1%
Chile
Peru
Australia
DR Congo
Russia
Zambia
Other
countries
Source: ICSG, Interviews with Industry Experts, Frost & Sullivan
Copper reserves are determined by geological conditions and are concentrated in areas
rich in copper deposits. Production is influenced by factors such as technological capabilities,
industrial infrastructure, policy environment, and market demand, tending to be concentrated
in regions with strong processing capabilities and large consumer markets. This disparity leads
to the difference between copper reserve and production, and drives global copper trade, for
example, resource-rich countries export copper concentrate, while industrialized nations
process it into copper cathodes. It also prompts countries to optimize their production layouts
through technological upgrades and policy adjustments. With the continuous development of
the global economy, demand for copper is experiencing sustained growth, pulling the sustained
increase of global copper production. Global copper production volume has increased from
20.6 million tons in 2020 to 23.0 million tons in 2024, representing at a CAGR of 2.8%. It is
expected that the global copper production volume will increase from 23.0 million tons in 2025
to 27.0 million tons in 2029, representing at a CAGR of 4.1%. The major countries with global
copper production volume are Chile, DR Congo, Peru, and China, among others. In Africa,
copper production volume is also mainly concentrated in DR Congo and Zambia. As of 2024,
the copper production volume of DR Congo and Zambia account for approximately 18% of the
global copper production volume.
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Market Size and Breakdown of Global Copper Production in
Major Countries and Regions Worldwide, 2020-2029E
0
5
10
15
20
25
30
Million Tons
CAGR 2020-2024 CAGR 2025E-2029E
2.8% 4.1%Global Copper Production
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
20.6 21.2 21.9 22.6 23.0 23.0 24.0 25.0 26.0 27.0
23.1%
11.3%
7.8%
35.0%
14.4%
3.6%
Chile
Peru
China
DR Congo
the U.S.
Zambia
ROW
4.8%
Source: ICSG, Interviews with Industry Experts, Frost & Sullivan
Global copper cathode production volume has increased from 19.7 million tons in 2020
to 21.4 million tons in 2024, representing at a CAGR of 2.1%. It is expected that the global
copper cathode production volume will increase from 21.9 million tons in 2025 to 24.7 million
tons in 2029, representing at a CAGR of 3.0%. Meanwhile, primarily driven by surging demand
from renewable energy and electric vehicle sectors, and infrastructure spending in emerging
economies, global copper cathode consumption has demonstrated strong growth from 22.5
million tons in 2020 to 27.0 million tons in 2024, reflecting a CAGR of 4.7%. In 2024, China,
DR Congo, the U.S. and Zambia accounted for market shares of 55.0%, 8.4%, 4.2%, 3.0% in
global cathode production, respectively; while China, the U.S., Germany, and Japan accounted
for market shares of 55.4%, 6.5%, 3.7%, and 3.0% in global cathode consumption,
respectively. In the future, global copper cathode consumption is projected to grow sustainably
and reach 30.5 million tons in 2029 from 27.8 million tons in 2025, with a CAGR of 2.3%. The
persistent trend of demand outpacing supply is anticipated to result in a supply shortage of
approximately 5.8 million tons by 2029, driving up global copper prices. In 2024, by
downstream industry, over 25% of copper cathode consumption was used in building
construction, more than 20% in consumer electronics and general products, around 20% in
infrastructure such as power and telecommunications, and approximately 13% in the
transportation sector.
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Market Size and Breakdown of Global Copper Cathode
Production and Consumption, 2020-2029E
0
5
10
15
20
25
30
35
Million Tons
CAGR 2020-2024 CAGR 2025E-2029E
2.1% 3.0%Global Copper Cathode Production
4.7% 2.3%Global Copper Cathode Consumption
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
19.7
22.5
19.9
22.7
20.3
23.2
20.5
25.0
21.4
27.0
21.9
27.8
22.5
28.6
23.1
29.2
23.9
29.9
24.7
30.5 8.4%
3.0%
55.0%
4.2%
29.4% 31.4%
55.4%
6.5%
3.7%
3.0%
DR Congo
Zambia
China
the U.S.
ROW
China
the U.S.
Germany
Japan
ROW
Source: ICSG, Interviews with Industry Experts, Frost & Sullivan
The major countries with global copper cathode production volume are China, DR Congo,
and Zambia, among others. Driven by rich reserves, rising investment from Chinese companies
and expanding local capacity, the copper cathode production in both DR Congo and Zambia has
achieved 1,800.0 thousand and 640.0 thousand tons in 2024, respectively. As of 2024, the
copper cathode production volume of DR Congo and Zambia account for approximately 11%
of the global copper cathode production volume. Moving forward, it is expected that copper
cathode production in DR Congo will reach over 3,500 thousand tons in 2029 with a CAGR
of 16.7% from 2025. Also, rebounding from prior declines caused by power shortages, Zambia
is expected to produce over 1,000 thousand tons of copper cathode in 2029 with ongoing
infrastructure upgrades and diversified energy investments, with a CAGR of 10.8% from 2025.
Copper cathode production in the DR Congo and Zambia is poised to gain a stronger foothold
in the global market, driven by a combination of structural advantages and evolving market
dynamics.
The average grade of copper ores in the DR Congo and Zambia is significantly higher
than the global average, offering these countries a notable competitive advantage in the global
copper industry. While the global average copper ore grade typically ranges between 0.4% and
0.6%, deposits in DR Congo and Zambia often exceed 2%, particularly in high-quality sulfide
and oxide reserves. This higher ore grade translates into lower unit production costs, higher
metal yield per ton of ore processed, and improved economic viability for mining projects. As
a result, both countries attract strong investment interest and play a vital role in securing stable,
high-grade feedstock for smelters worldwide, reinforcing their strategic importance in the
copper supply chain.
Furthermore, the region enjoys a relatively low-cost production base, supported by
favorable labor and energy costs such as Zambia’s reliance on hydroelectric power. This
positions local producers to offer competitively priced cathodes on the global market.
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With established trade routes to key global consumers and growing interest from
downstream sectors such as EVs and renewable energy, copper cathodes from DR Congo and
Zambia are becoming increasingly strategic. As both countries continue to invest in
infrastructure, compliance, and capacity expansion, their role as competitive, reliable suppliers
of copper cathode is expected to strengthen significantly from 2025 onward.
Market Size of DR Congo and Zambia Copper Cathode Production, 2020-2029E
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Thousand Tons
CAGR 2020-2024 CAGR 2025E-2029E
19.8% 16.7%DR Congo Copper Cathode Production
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
873.0 949.0
1,200.0
1,598.0 1,800.0
2,070.0 2,277.0
2,687.0
3,198.0
3,838.0
0
400
500
600
700
800
900
1,000
1,100
Thousand Tons
CAGR 2020-2024 CAGR 2025E-2029E
1.4% 10.8%Zambia Copper Cathode Production
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
605.0 606.0 601.0 556.0
640.0
730.0
818.0
908.0
999.0
1,099.0
300
200
100
Source: ICSG, Interviews with Industry Experts, Frost & Sullivan
Market Drivers and Trends Analysis of Global Copper Cathode Industry
Rapid Growth of the New Energy Industry
As the global transition to green energy accelerates, the rapid development of the new
energy sectors including electric vehicles, wind power, and PV energy has significantly
increased the demand for copper cathodes. Due to its excellent electrical and thermal
conductivity, copper is a key material in electric vehicles motors, charging stations, PV
systems, and wind power generation equipment. In particular, each electric vehicles requires
approximately 2.5 to 4 times more copper than a conventional internal combustion engine
vehicle, mainly due to the extensive use of copper in batteries, wiring, and power electronics.
The expansion of global electric vehicles production, alongside policies promoting renewable
energy, is expected to drive copper demand steadily. Additionally, large-scale investments in
power grids and energy storage solutions to support the integration of renewables further
contribute to copper consumption growth. Government initiatives, such as tax incentives for
electric vehicles purchases, subsidies for charging infrastructure, and mandates for increased
renewable energy capacity, continue to create a robust demand outlook for copper cathodes.
For example, for NEVs purchased in China between January 1, 2024, and December 31, 2025,
the vehicle purchase tax will be exempted. The tax exemption limit for each new energy
passenger vehicle is RMB30 thousand. For energy storage industry, under the U.S. Inflation
Reduction Act (“ IRA”), energy storage projects can receive an investment tax credit (“ ITC”)
of up to 30%. With these factors in consideration, the copper cathode market is set to remain
a critical enabler of the clean energy transition.
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Urbanization and Infrastructure Development
The ongoing global urbanization process and large-scale infrastructure projects provide
long-term support for copper cathode demand. Copper cathode, known for its excellent
electrical conductivity and corrosion resistance, is widely used in power infrastructure. It’s a
key material in components like cables, transformers, and power distribution equipment,
ensuring efficient and stable electricity transmission. In addition, copper cathode is also used
in construction for pipes, roof waterproofing materials, and communication network
infrastructure, enhancing durability and signal transmission efficiency, thereby contributing to
the development of smart cities. In developing countries, particularly in regions like Africa,
Southeast Asia and Latin America, rapid urbanization is driving the expansion of electricity
grids, water supply systems and transportation networks, all of which require substantial
copper inputs. For example, the electrification of rural areas in emerging markets increases
copper consumption in power lines, transformers, and substations. At the same time, in
developed economies, aging infrastructure necessitates extensive upgrades to power grids,
high-speed rail systems, and broadband networks. Many countries have announced large-scale
infrastructure investment plans, such as the U.S. Infrastructure Investment and Jobs Act and
China’s Belt and Road Initiative, both of which emphasize sustainable infrastructure and smart
cities, further boosting copper demand. Additionally, as buildings adopt more energy-efficient
designs, copper-intensive systems such as HV AC (heating, ventilation and air conditioning)
and smart home wiring are becoming more prevalent, reinforcing copper cathode’s
indispensable role as a key material’s in global urbanization and infrastructure expansion.
Digitalization and Technological Advancements
The adoption of digital technologies and advancements in manufacturing processes are
transforming the copper cathode industry, enhancing efficiency and value creation across the
supply chain. The integration of big data, AI, and the Internet of Things (“ IoT”) has optimized
key processes such as copper ore exploration, smelting control, and logistics management.
AI-driven geological surveys improve the efficiency of mineral exploration, allowing for more
precise identification of copper ore deposits and reducing extraction costs. Smart automation
in copper smelters enhances metallurgical processes, ensuring higher purity cathodes while
reducing energy consumption and emissions. Leading copper cathode companies are
leveraging machine vision and sensor technology to automatically inspect indicators such as
copper cathode plate thickness and surface defects, thus securing product consistency and
reducing manual intervention. Additionally, blockchain technology is increasingly being
adopted in the copper cathode industry to enhance supply chain traceability, allowing for
greater transparency in copper sourcing and ensuring compliance with environmental and
ethical mining standards. For copper cathode producers, this not only supports premium pricing
and access to strategic markets, but also helps build reputational value in a more sustainability-
conscious landscape. Beyond sourcing, technological advancements are also enabling higher-
purity copper cathode production and process innovations such as AI-based process control and
low-carbon refining, improving conductivity and lowering energy intensity. As digitalization
reshapes the non-ferrous metals sector, the copper cathode industry stands to benefit from
enhanced operational efficiency, traceable compliance, and improved product quality,
reinforcing its strategic role in global electrification and clean energy supply chains.
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Industry Barrier Analysis of Global Copper Cathode Industry
Raw Material Supply Barrier
As global copper mining continues to develop, the overall ore grade is declining, leading
to higher extraction costs and increased supply uncertainties, posing challenges for copper
cathode production. Africa, as a key copper-producing region, has attracted significant
investment from major copper companies. Leading enterprises strengthen their control over
high-grade mines by establishing long-term supply chain partnerships, ensuring a stable raw
material supply and effectively reducing procurement costs. This strategic approach enhances
their resilience against market fluctuations, giving them a competitive edge in securing raw
materials.
Capital Barrier
The copper cathode industry requires substantial capital investment, as it involves
multiple capital-intensive processes such as smelting and refining. The construction and
operation of smelting facilities demand billions of dollars in investment, with long payback
periods adding financial pressure. Additionally, large incumbent firms benefit from significant
economies of scale, making it difficult for new entrants to establish a competitive foothold in
the short term. As a result, high financial requirements act as a major barrier to entry, limiting
market access to only well-funded players.
Technological Barrier
The production of copper cathodes involves complex pyrometallurgical and
hydrometallurgical processes, requiring advanced technical expertise and specialized
equipment. Cutting-edge smelting or refining technologies not only improve resource
efficiency but also reduce energy consumption and environmental impact. However, these
technologies are often mastered by a few leading companies. New entrants must invest heavily
in research and development or acquire technology through licensing agreements, significantly
raising the barriers to entry. The high technical threshold makes it difficult for newcomers to
compete with established industry leaders.
Environmental Barrier
Stringent environmental regulations present another significant hurdle for new entrants.
The copper smelting and refining process generates large amounts of waste gas, slag, and
wastewater, posing environmental challenges. Governments worldwide have been tightening
environmental compliance requirements, compelling companies to invest in state-of-the-art
pollution control equipment and sustainable production technologies. These regulatory
demands not only increase initial capital expenditures but also require strong operational
capabilities to maintain compliance. As a result, environmental standards serve as a significant
entry barrier, favoring established players with the resources to meet strict sustainability
requirements.
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Supply Chain Barrier
Strong customer and supply chain relationships further restrict entry into the copper
cathode market. Major downstream industries such as infrastructure, construction, consumer
electronics, and automotive manufacturing place a high priority on supply chain stability.
Established companies often maintain long-term contracts with key suppliers and customers,
securing raw materials and sales channels in advance. New entrants face considerable
challenges in breaking into these entrenched market relationships, making it difficult to
establish a reliable supply chain and customer base in the short term. This entrenched market
structure increases the difficulty for newcomers to gain a competitive position.
COMPETITIVE LANDSCAPE OF GLOBAL COPPER CATHODE MARKET
OVERVIEW
The competitive landscape of the cathode copper industry in the DR Congo is highly
fragmented, featuring both global mining giants such as Glencore and First Quantum Minerals,
which both are publicly listed companies on the London Stock Exchange and the Toronto Stock
Exchange, respectively, and an expanding cohort of Chinese enterprises. Historically,
international companies have secured substantial market share by accessing high-grade copper
reserves and investing heavily in large-scale processing facilities. These operations are
typically structured through long-term mining concessions and joint ventures with Gécamines,
the DR Congo’s state-owned mining company, granting them operational control without direct
ownership of the land.
Following the enactment of the 2002 Mining Code, which lifted restrictions on private
and foreign investment in the mining sector, DR Congo experienced a surge of inbound capital
and project development. Chinese enterprises, in particular, seized this opportunity by
accelerating their overseas expansion through acquisitions, equity investments, and joint
ventures in DR Congo. Leveraging advantages such as relatively low-cost financing, vertically
integrated supply chains, and strong alignment with China’s rising copper demand, Chinese
companies have rapidly increased their operational control over mining and smelting assets.
Moreover, the implementation of the Belt and Road Initiative (“ BRI”) has provided strong
policy and financial momentum for China-Africa industrial cooperation. Through BRI-backed
infrastructure construction, logistics corridors, and financing mechanisms, Chinese companies
have gained enhanced access to transport networks, energy supply, and credit resources in DR
Congo. This has not only reduced project development and logistics costs but also improved
the long-term stability of mining operations. Supported by state-backed financial institutions
such as China Development Bank and Export–Import Bank of China, these enterprises benefit
from sustainable funding channels and favorable loan terms that underpin large-scale capital
deployment in resource projects. In addition, bilateral cooperation frameworks established
under the BRI have promoted regulatory coordination and investment protection, further
reinforcing the competitive position of Chinese companies in DR Congo’s copper sector. These
structural strengths have enabled them to deepen their influence in DR Congo’s copper sector
and increasingly challenge traditional incumbents in both market share and industrial presence.
The annual production volume of copper cathode in DR Congo reached approximately 1,800
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thousand tons in 2024, with the top five China producers accounting for over 20% of the total.
The Company with a production volume of 15.9 thousand tons, ranked fifth in the industry, in
DR Congo. In copper cathode industry measured by production volume in DR Congo, The
Company ranked third among private producers based in China.
Top Five China Copper Cathode Producers by Production Volume in DR Congo, 2024
Ranking Company Name Production V olume in 2024 (Thousand Tons) Market Share (%) State-owned/
Private Company
1
2
3
4
5 The Company 15.9 0.9% Private
30.0
48.0
100.0
200.0Company A
Company B
Company C
Company D
11.1%
5.6%
2.7%
1.7%
State-owned
Private
Private
State-owned
Source: Interviews with Industry Experts, Frost & Sullivan
Similarly, the competitive landscape of the cathode copper industry in Zambia is also
fragmented, with both international mining giants and Chinese enterprises playing key roles.
Major global players such as First Quantum Minerals, Glencore, Barrick, which are all publicly
listed companies on the Toronto Stock Exchange, the London Stock Exchange and the Toronto
Stock Exchange and the New Y ork Stock Exchange, respectively and V edanta, a privately held
company headquartered in the UK have long-established operations, primarily through
large-scale projects like Kansanshi, Sentinel, and Konkola. These companies typically operate
under long-term mining licenses and partnerships with Zambia’s state-owned companies,
allowing them access to high-grade copper reserves and advanced processing facilities.
Government involvement remains significant, both through ownership stakes and regulatory
frameworks aimed at increasing local beneficiation and value capture. Chinese enterprises are
rapidly expanding their presence and influence in Zambia’s copper sector, driven by strategic
investments, cost advantages, and long-term supply commitments aligned with China’s
industrial demand. Benefiting from the BRI, Chinese companies have leveraged enhanced
infrastructure connectivity, preferential financing channels, and strengthened bilateral
economic cooperation to accelerate project development and operational efficiency in Zambia.
BRI-supported transport corridors and power infrastructure have significantly improved
logistics accessibility and production reliability, while policy coordination and financing
support from Chinese policy banks have facilitated large-scale investment and risk mitigation
for resource projects. As Chinese firms continue to deepen their operational footprint and
contribute to national output targets, they are reshaping Zambia’s copper landscape and
emerging as strong competitors. The annual production volume of copper cathode in Zambia
reached approximately 640 thousand tons in 2024, with the top five China producers
accounting for over 25% of the total. The Company with a production volume of 5.0 thousand
tons, ranked fifth in the industry, in Zambia. The Company ranked first among private
producers based in China. The Company is also the sole producer based in China that ranks
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among the top five copper cathode producers in both the DR Congo and Zambia. In the
copper-cathode sector of the DR Congo and Zambia, Chinese companies account for more than
50 % of total cathode production, while the remaining output is produced by international
mining conglomerates that operate across multiple continents and maintain diversified metal
portfolios, with business focuses spanning South America, Africa, and Australia. In contrast,
Chinese enterprises tend to have more concentrated and transparent operations within the
African copper sector.
Top Five China Copper Cathode Producers by Production Volume in Zambia, 2024
Ranking Company Name Production V olume in 2024 (Thousand Tons) Market Share (%) State-owned/
Private Company
1
2
3
4
5 The Company 5.0 0.8% Private
15.0
20.0
60.0
80.0Company E
Company F
Company G
Company H
12.5%
9.4%
3.1%
2.3%
State-owned
State-owned
State-owned
State-owned
Source: Interviews with Industry Experts, Frost & Sullivan
The following sets forth the profile of the companies in the ranking:
Company A, established in 2007 and headquartered in Beijing, is a mining enterprise
engaged in exploration and development of non-ferrous and ferrous mineral resources.
Company B, established in 1992 and headquartered in Xiamen, Fujian, focuses on the
investment, mining, and processing of cobalt, copper , nickel, and zinc resources.
Company C, established in 1969 and headquartered in Luoyang, Henan, is a mining
group involved in molybdenum, copper , cobalt, and other key mineral resources.
Company D, established in 2009 and headquartered in Hong Kong, focuses on the
exploration, mining, and trading of copper and cobalt.
Company E, established in 2004 and headquartered in Beijing, specializes in overseas
copper and cobalt resource development, operating major mining projects in Africa and Asia.
Company F , established in 2001 and headquartered in Hong Kong, focuses on the
investment, mining, and processing of cobalt, copper , nickel, and zinc resources.
Company G, established in 1983 and headquartered in Beijing, is a copper and cobalt
producer operating mainly in Zambia, with a focus on overseas resource development.
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Company H, established in 1979 and headquartered in Nanchang, Jiangxi, engages in the
mining, smelting, and processing of copper and other non-ferrous metals.
PRICE ANALYSIS OF CHINA’S COPPER CATHODE INDUSTRY
As the world’s largest producer and consumer of cathode copper, China has experienced
a long-term upward trend in cathode copper prices. From 2020 to 2024, the average price
increased from RMB48.8 thousand per tonne to RMB74.9 thousand per tonne, representing a
CAGR of 11.3%. Considering the ongoing recovery of the global economy and the expansion
of global downstream demand, it is anticipated that the average price of cathode copper in
China will further increase to RMB77.5 thousand per tonne in 2025.
Average Price of Copper Cathode (China), 2020-2025E
48.8
2020 2021 2022 2023 2024 2025E
68.6 67.4 68.3
74.9 77.5
0
10
20
30
40
50
60
70
80
90
100
Average Price of Copper Cathode 11.3%
CAGR 2020-2024
Thousand RMB/Tonne
RA W MATERIAL PRICE ANALYSIS OF GLOBAL COPPER CATHODE INDUSTRY
The rapid development of clean energy infrastructure, electric vehicles, and digital
technologies has significantly driven up copper demand, given copper’s critical role in power
grids, batteries, and electronic devices. Reflecting this strong and growing demand, the global
price of copper has shown a steady upward trend over the past few years, rising from RMB42.6
thousand per tonne in 2020 to RMB66.5 thousand per tonne in 2024. At present, the copper
market remains in a state of tight supply-demand balance, as supply growth struggles to keep
pace with accelerating consumption. This tension is expected to sustain upward pressure on
prices in the short term.
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Average Price of LME Copper, 2020-2025E
42.6
2020 2021 2022 2023 2024 2025E
60.1 59.2 59.7
66.5 68.8
0
10
20
30
40
50
60
70
80
90
100
Average Price of LME Copper 11.8%
CAGR 2020-2024
Thousand RMB/Tonne
Source: LME, Frost & Sullivan
OVERVIEW OF GLOBAL COBALT INDUSTRY
Definition and Importance of Cobalt
Cobalt is a silvery-white, hard metal that belongs to the ferromagnetic elements. It
possesses excellent high-temperature resistance, corrosion resistance, and magnetic properties.
Cobalt is commonly found in nature in ore form, often coexisting with copper and nickel, and
is considered an important strategic metal. Cobalt is primarily used in battery materials, alloy
manufacturing, catalysts, magnetic materials, and other high-tech fields. It is one of the key
raw materials for modern industry and high-tech industries.
Cobalt plays a vital role across multiple high-tech industries, making it an indispensable
strategic resource. As a core material for lithium-ion batteries, cobalt significantly enhances
battery cathode stability, energy density, and cycle life, which is critical amid the rising
demand driven by electric vehicles and energy storage systems. In addition, cobalt is a key
element in the production of high-performance alloys including superalloys, hard alloys, and
corrosion-resistant alloys, where it boosts mechanical strength and thermal stability, especially
in extreme environments such as aerospace, gas turbines, and nuclear applications. Moreover,
cobalt serves as a core component in various industrial catalysts, particularly in petrochemical,
fertilizer, and synthetic fuel production. Due to its limited and geographically concentrated
supply, especially in the DR Congo, and its broad application across energy, chemical, and
defense sectors, cobalt holds significant strategic importance, with its supply-demand
dynamics influencing global technological and industrial development.
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Value Chain Analysis of Cobalt Industry
Downstream
End Applications
Battery Cathode Materials
Alloys
------
Upstream
Raw Material Suppliers
Equipment Suppliers
Cobalt Ores
Mineral Concentrates
------
Cobalt Refining or Smelting
Cobalt Processing
Pyrometallurgical Method
Hydrometallurgical Method
Midstream
Catalysts Magnetic
Materials
Source: Interviews with Industry Experts, Frost & Sullivan
The upstream segment of the cobalt industry involves the mining and initial processing
of cobalt ores. The majority of global cobalt production is concentrated in Africa, particularly
in the DR Congo, which accounts for over 70% of the world’s cobalt production. After mining,
the ores undergo processes such as crushing and flotation to produce cobalt concentrates,
which serve as raw materials for the midstream refining sector. Due to the uneven distribution
of cobalt resources and the high technological barriers to extraction, the upstream sector holds
significant control over supply, playing a crucial role in global cobalt availability.
The midstream sector consists of refining cobalt concentrates, purification, and the
production of cobalt-based chemical products. Refining processes are categorized into
pyrometallurgical and hydrometallurgical methods, which yield high-purity metallic cobalt or
cobalt compounds (e.g., cobalt hydroxide, cobalt sulfate). This stage requires advanced
technology, strict environmental standards, and complex processing techniques. To enhance
product quality and resource efficiency, companies must continuously innovate and optimize
their production methods.
Cobalt has a wide range of applications in downstream industries, primarily in battery
cathode materials, high-performance alloys, catalysts, and magnetic materials. Among these,
the rapid growth of electric vehicles and energy storage batteries has significantly increased
cobalt consumption in the battery sector. Additionally, cobalt-based high-performance alloys
and catalysts are extensively used in high-value industries such as aerospace and
petrochemicals. Technological advancements in these downstream applications directly drive
the demand for cobalt.
Market Size of Global Cobalt Industry
The development and utilization of cobalt-rich seabed resources remain unfeasible due to
current exploration and extraction technologies as well as economic constraints. Moreover,
land-based cobalt deposits suitable for industrial use are highly unevenly distributed, with most
cobalt reserve concentrated in just a few countries, including the DR Congo, Australia,
Indonesia, Cuba, the Philippines, etc. As a result, cobalt’s strategic importance has been
increasingly recognized by nations worldwide, and many countries have designated it as a
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strategic mineral resource. The global cobalt reserve has steadily increased from 7.1 million
tons in 2020 to 11.0 million tons in 2024 with a CAGR of 11.6%, and it is expected to reach
14.0 million tons in 2029. DR Congo has the largest copper reserves of any country, accounting
for 54.5% of the global cobalt reserve in 2024, which is nearly over three times the reserves
of Australia.
Market Size and Breakdown of Global Cobalt Reserve in
Major Countries and Regions Worldwide, 2020-2029E
0
2
4
6
8
10
14
12
Million Tons
CAGR 2020-2024 CAGR 2025E-2029E
11.6% 6.2%Global Cobalt Reserve
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
7.1 7.6
8.3
11.0 11.0 11.0 11.0
12.0
13.0
14.0
17.3%
15.5%
54.5%5.8%
4.5%
2.4%
DR Congo
Australia
Indonesia
Cuba
Philippines
Other countries
Source: Cobalt Institute, Interviews with Industry Experts, Frost & Sullivan
Between 2020 and 2024, global cobalt production volume grew significantly from 142.0
thousand tons to 290.0 thousand tons, reflecting a robust CAGR of 19.5%. This surge was
primarily driven by the rapid expansion of the electric vehicle and energy storage sectors,
which heavily rely on cobalt-rich batteries. The DR Congo remained the dominant player in the
cobalt supply chain, accounting for 75.9% of global production in 2024, due to its abundant
cobalt reserves and established mining infrastructure. While Zambia accounted for less than
0.5% of global production in 2024, as it largely extracted as a by-product of copper mining.
Looking ahead, global cobalt production volume is projected to reach 307.0 thousand tons in
2025 and 411.0 thousand tons by 2029, indicating a CAGR of 7.6%. As demand for
high-energy-density batteries and energy transition technologies continues, cobalt will remain
a critical raw material, with supply concentration in DR Congo.
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Market Size of Global Cobalt Production and Breakdown in
Major Countries and Regions Worldwide, 2020-2029E and 2024
0
50
100
150
200
250
300
450
400
350
Thousand Tons
CAGR 2020-2024 CAGR 2025E-2029E
19.5% 7.6%Global Cobalt Production
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
142.0
165.0
197.0
230.0
290.0 307.0 327.0
351.0
379.0
411.0 8.6%
3.0%
75.9%
9.7% 1.3%
1.6%
DR Congo
Russia
Indonesia
Canada
Philippines
Other countries
Source: Cobalt Institute, Interviews with Industry Experts, Frost & Sullivan
From 2020 to 2024, driven by booming demand from electric vehicles, energy storage
systems, and consumer electronics, the global refined cobalt market has experienced steady
growth. Refined cobalt production volume rose from 132.0 thousand tons in 2020 to 188.0
thousand tons in 2024, reflecting a CAGR of 9.2%, while consumption volume increased from
140.0 thousand tons to 187.0 thousand tons over the same period at a CAGR of 7.5%. Cobalt’s
wide application across batteries, aerospace, alloys, and the petrochemical industry is
supported by its unique physical and chemical properties such as high hardness, corrosion
resistance, ferromagnetism, and electrochemical performance. In 2024, China, Finland, and
Canada accounted for market shares of 78.6%, 7.2%, and 2.7% in global refined cobalt
production, respectively; while China, Korea, the U.S., and Japan took up market shares of
67.3%, 10.1%, 7.5%, and 6.4% in global refined cobalt consumption, respectively. Looking
ahead, global refined cobalt consumption is projected to reach 274.0 thousand tons in 2029
compared to 226.0 thousand tons of production. This growing gap underscores the risk of
future supply shortages, making cobalt a critical and strategic resource in the global transition
to clean energy.
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Market Size and Breakdown of Global Refined Cobalt
Production and Consumption, 2020-2029E
0
50
Thousand Tonnes
CAGR 2020-2024 CAGR 2025E-2029E
9.2% 3.6%Global Cobalt Production
7.5% 8.3%Global Cobalt Consumption
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
132.0140.0
167.0 170.2 165.0
176.9 179.0176.5
188.0 187.0 196.0199.0 204.0
214.0 212.0
231.0
219.0
251.0
226.0
274.0 2.7%
78.6%
11.5%
7.2% 6.4%
67.3%10.1%
8.6%
7.5%
China
ROW
Finland
Canada
China
Korea
ROW
the U.S.
Japan
100
150
200
250
300
Source: Cobalt Institute, Interviews with Industry Experts, Frost & Sullivan
Market Drivers and Trends Analysis of Global Cobalt Industry
Growing Demand Driven by Electric V ehicles and Energy Storage
The rapid development of electric vehicles and large-scale energy storage systems is a
major driver of cobalt demand. As a critical battery material, cobalt enhances energy density
and battery stability, making it essential for high-performance lithium-ion batteries.
Governments worldwide are promoting carbon neutrality and electric mobility, fueling
sustained demand growth. Cobalt-based batteries are also widely adopted in grid-level energy
storage due to their long cycle life and efficiency, further reinforcing cobalt’s strategic
importance in the global clean energy transition.
Sustainable Development and Advancements in Eco-Friendly Production Technologies
Facing increasing environmental regulations, cobalt producers are shifting toward greener
production methods by adopting low-emission smelting and improved recycling technologies.
These advances help reduce energy consumption and carbon emissions while improving
resource utilization. As sustainability becomes a key factor in industry development and
investor preference, eco-friendly cobalt production not only ensures compliance but also
enhances long-term competitiveness and supports the industry’s environmental credibility.
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Supply Chain Security and Implications for Future Development
Cobalt supply remains highly concentrated in the DR Congo, exposing the market to
geopolitical and operational risks. To mitigate these vulnerabilities, mining companies are
actively diversifying sourcing to other regions like Australia, Canada, and the Philippines. At
the same time, advances in extraction efficiency and supply chain transparency are helping to
stabilize supply. As demand continues to rise, especially from EVs and energy storage,
ensuring a secure and diversified cobalt supply chain will be essential for long-term market
sustainability.
Technological Innovation and Improvements in Production Efficiency
Technological advances in cobalt mining and smelting are improving production yields,
reducing energy consumption, and lowering costs. Breakthroughs in green metallurgy and
high-efficiency refining are enhancing the purity and quality of cobalt and cobalt hydroxide,
which are vital for battery applications. These innovations support a more sustainable and
profitable supply chain while enabling the industry to meet rising global demand across energy,
mobility, and electronics sectors.
Policy Support in Downstream Applications
Government policies supporting electric vehicles, renewable energy, and decarbonization
are directly boosting demand for cobalt. For instance, the U.S. IRA provides up to $7,500 in
tax credits for EV purchases and includes sourcing requirements for critical minerals such as
cobalt from domestic or free-trade partners. This has led to increased investment in local
refining capacity and cobalt supply chain development. In the E.U., new battery regulations
mandate that industrial batteries must include a minimum proportion of recycled cobalt by
2031, directly stimulating cobalt recycling and remanufacturing. In Africa, countries like South
Africa, Zambia, and the DR Congo are promoting EV and battery value chains through local
manufacturing incentives and the development of special economic zones focused on battery
production, with cobalt as a key resource. In Asia, countries are scaling EV adoption through
subsidies and infrastructure investment, indirectly driving cobalt demand through the
expansion of battery usage. These Subsidies, tax incentives, and industrial development
programs are accelerating the adoption of high-performance batteries that rely on cobalt-based
materials. As global green transition policies expand, the cobalt industry particularly cobalt
hydroxide used in batteries is expected to benefit from increased downstream demand and
long-term structural support.
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Competitive Landscape Overview of Global Cobalt Industry
DR Congo hold dominant positions in global cobalt production, driven by their control
over key cobalt assets. The DR Congo remained the dominant player in the cobalt supply chain,
accounting for approximately 75.9% of global production in 2024, supported by its abundant
cobalt reserves and well-established mining infrastructure. Zambia accounted for less than
0.5% of global cobalt output in 2024, as cobalt is largely recovered there as a by-product of
copper mining. The cobalt production market in the DR Congo and Zambia is characterized by
a relatively concentrated competitive landscape, where a few leading producers dominate
overall output. In 2024, China Molybdenum Co., Ltd. (“ CMOC ”), Huayou Cobalt, and
Glencore accounted for approximately 40.0%, 16.9%, and 13.2% of cobalt production,
respectively. Among them, CMOC and Huayou Cobalt are Chinese enterprises, while Glencore
is a Swiss-based multinational, reflecting a market structure jointly led by both Chinese and
international mining groups. A number of Chinese mining companies have actively developed
mineral resources in both countries, leading to a concentration of skilled talent and fostering
the growth of supporting industries such as engineering contracting, equipment supply, trade,
and logistics. These enterprises typically operate integrated mining, beneficiation, and
smelting operations, producing cathode copper as the main product while recovering cobalt as
a valuable by-product. Additionally, they procure copper-cobalt ores from local traders and
mining companies to process into refined copper and intermediate cobalt products like crude
cobalt hydroxide.
Chinese companies’ involvement not only enhances production capacity but also
strengthens local value chains by integrating upstream mining and midstream processing
activities. Leveraging relatively low-cost financing, technological capabilities, and strong
alignment with China’s growing demand for cobalt, these enterprises have become influential
players and their expanding footprint supports regional cobalt supply stability and promotes
broader industrial development in DR Congo and Zambia.
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During the Track Record Period, our headquarters was located at PRC and our principal
business operations and/or our production facilities were located at multiple countries,
including the PRC, DR Congo, Singapore, Peru and Zambia. We are subject to a variety of laws
and regulations across a number of aspects of our business. This section sets forth a summary
of the most significant laws and regulations that are applicable to our current business
activities in the PRC, DR Congo, Singapore, Peru and Zambia.
LA WS AND REGULATIONS RELATED TO OUR BUSINESS IN THE PRC
INDUSTRY CLASSIFICATION
According to the Industry Classification of National Economy Activities
(GB/T4754-2017) jointly issued by the General Administration of Quality Supervision,
Inspection and Quarantine of the People’s Republic of China and the National Standardization
Administration of the People’s Republic of China on June 30, 2017, the industry in which we
are engaged falls within “C3211”, under “C32 Nonferrous metal smelting and rolling
processing industry”.
PRC REGULATIONS RELATED TO SAFE PRODUCTION
Work Safety Law of the People’s Republic of China ()
was promulgated by the SCNPC on June 29, 2002 and latest revised on June 10, 2021.
Production and business entities shall abide by this Law and other laws and regulations
concerning work safety, strengthen work safety management, establish and improve a work
safety responsibility system and work safety rules and systems for all employees, increase
efforts to guarantee the input of funds, materials, technology, and personnel in work safety,
improve work safety conditions, strengthen standardization and informatization of work safety,
construct a dual prevention mechanism consisting of graded management and control of safety
risks and examination and control of potential risks, improve the risk prevention and resolution
mechanism, raise work safety levels, and ensure work safety. The law stipulates provisions on
guarantee of safety by production and business operation entities, rights and obligations of
employees relating to work safety, supervision and administration of work safety, emergency
rescue, investigation, and handling of work safety accidents and legal responsibilities.
Regulations on Work Safety Licenses ( τΌ͛ପ஢̙ᗇૢԷ) was promulgated by the
State Council on January 13, 2004 and latest revised on July 29, 2014. The State applies the
work safety licensing system to enterprises engaged in mining, construction, and the
production of dangerous chemicals, fireworks and crackers, and civil use explosive material.
No enterprise may engage in production activities without a work safety license.
Administrative Regulations on the Safety of Hazardous Chemicals (τΌ၍
ଣૢԷ), which was promulgated on 26 January 2002 and last amended on 7 December 2013,
firstly provides that the State implements the licensing system for the operation of hazardous
chemicals (including storage management, hereinafter the same), and without being licensed,
any units and individuals shall not deal in hazardous chemicals. Secondly, it provides that the
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enterprises dealing in hyper-toxic chemicals or hazardous chemicals to make explosives shall
file applications to the production safety supervision and administration departments of the
local people’s governments at municipality (with districts) level and the enterprises dealing in
other hazardous chemicals shall file applications to the production safety supervision and
administration departments of the local people’s governments at county level (if the enterprise
has storage facilities, it shall file applications to the production safety supervision and
administration department of the local people’s government at municipality (with districts)
level). Thirdly, the authorities mentioned above shall examine such documents pursuant to
laws, conduct on-site verification on the business premises and storage facilities of the
applicants, and make the decision of approval or refusal (if the application is approved, the
licences for dealing in hazardous chemicals shall be issued). At last, the applicants shall not
deal in hazardous chemicals until they hold the licenses for dealing in hazardous chemicals to
handle registration at AICs.
PRC REGULATIONS RELATING TO ENVIRONMENTAL PROTECTION
Environmental Protection Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷ᐑ
) was promulgated by the SCNPC on December 26, 1989, latest revised on April 24,
2014 and took effect on January 1, 2015. For preparation of the relevant development and
utilization plans and construction of environment-affected projects, the environmental impact
assessment shall be conducted according to law. Any development and utilization plan without
the environmental impact assessment conducted according to law may not be organized for
implementation; and any construction project without the environmental impact assessment
conducted according to law may not start construction. The pollution prevention and control
facilities in construction projects shall be designed, constructed and put into operation along
with the principal part of the project at the same time. The pollution prevention and control
facilities shall meet the requirements specified in the approved documents regarding the
environmental impact assessment and shall not be dismantled or left idle without authorization.
Chemicals and materials containing radioactive substances must be produced, stored,
transported, sold, used and disposed of in accordance with the relevant state provisions so as
to prevent environmental pollution. The State implements the pollution discharge license
management system in accordance with the law. Enterprises, public institutions and other
producers and operators that implement the pollution discharge license management shall
discharge pollutants according to the requirements of the pollution discharge license; those that
fail to obtain the pollution discharge license shall not discharge pollutants. Natural resources
shall be developed and utilized properly to protect biodiversity and ecological safety, and the
relevant treatment plan for ecological protection and restoration shall be formulated and
implemented according to law.
Law of the People’s Republic of China on Environmental Impact Assessment ( ʕശɛ
) was promulgated by the SCNPC on October 28, 2002 and latest
revised on December 29, 2018. The State implements a classification-based management on
environmental impact assessment of construction projects according to the impact of the
construction projects on the environment. Construction entity shall prepare the environmental
impact report or environmental impact statement or fill out the environmental impact
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registration form according to the following rules: (i) for projects with potentially serious
environmental impacts, an environmental impact report shall be prepared to provide a
comprehensive assessment of their environmental impacts; (ii) for projects with potentially
mild environmental impacts, an environmental impact statement shall be prepared to provide
an analysis or specialized assessment of their environmental impacts; (iii) for projects with
very small environmental impacts so that an environmental impact assessment is not required,
an environmental impact registration form shall be filled out. The catalogs for the
classification-based management of the environment impact assessment of the construction
projects shall be determined and published by the administrative department of the State
Council in charge of environmental protection. The environmental impact report or
environmental impact statement of a construction project shall be submitted by the
construction entity to the administrative department of ecology and environment with the
approval authority for approval in accordance with the provisions of the State Council. The
State shall implement a record-filing-based management on environmental impact registration
form.
Regulations on the Administration of Construction Project Environmental Protection
(ᚐ၍ଣૢԷ) was promulgated by the State Council on November 29,
1998, latest revised on July 16, 2017 and took effect on October 1, 2017. State standards and
local standards for the discharge of pollutants must be complied with in building construction
projects that generate pollution; requirements for aggregate control of discharge of major
pollutants must be met in areas under aggregate control of discharge of major pollutants.
Industrial construction projects shall adopt clean production techniques with low energy
consumption, low material consumption and low pollutant generation, and rationally exploit
natural resources to prevent environmental pollution and ecological damage. Measures must be
taken in reconstruction, expansion projects and technological transformation projects to treat
original environmental pollution and ecological damage relating to the said projects. The State
implements the construction project environmental impact evaluation system. For a
construction project for which an environmental impact report or environmental impact
statement shall be prepared, the construction entity shall submit, before starting construction,
the environmental impact report or environmental impact statement to the competent
administrative department of environmental protection with the authority of examination and
approval for approval; if the environmental impact evaluation document of the construction
project fails to be examined by the examination and approval department in accordance with
the law or is not approved after examination, the construction unit may not start construction.
For a construction project for which an environmental impact registration form shall be filled
out in accordance with the law, the construction unit shall submit the environmental impact
registration form to the competent administrative department of environmental protection at
the county level of the locality of the construction project for record-filing, according to the
provisions of the competent administrative department of environmental protection under the
State Council. Environmental protection facilities required to be constructed must be designed,
constructed and put into operation parallel to the progress of the principal part of the project.
Construction projects for which the environment impact reports and environmental impact
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statements are prepared must only be put into production or put into use after the
environmental protection facilities are accepted; where such facilities are not accepted or
deemed as disqualified in the acceptance, such projects are not allowed to be put into
production or use.
The Interim Method for Completion Acceptance of Environmental Protection for
Construction Projects () was promulgated by the
former Ministry of Environmental Protection (now Ministry of Ecology and Environment) on
November 20, 2017 and became effect on the same day. This Method specifies the procedures
and standards for construction units to carry out environmental protection acceptance after the
construction of such projects is completed.
Law of the People’s Republic of China on the Prevention and Control of Atmospheric
Pollution () was promulgated by the SCNPC on
September 5, 1987 and latest revised on October 26, 2018. Enterprises, public institutions and
other producers and operators that build projects having impacts on the atmospheric
environment shall conduct environmental impact assessment and disclose the environmental
impact assessment documents to the public in accordance with the law; where pollutants are
discharged to the atmosphere, the discharging units must comply with the discharging standard
for atmospheric pollutants as well as the requirements on control of the total discharging
amount of key atmospheric pollutants. Enterprises, public institution, producers and operators
for the coal heating sources of central heating facilities discharging industrial waste gasses or
discharging toxic and hazardous air pollutants listed in the catalog provided in this Law, as well
as other entities subject to pollution discharge permit management in accordance with the law,
shall obtain the pollution discharge permit. If iron and steel, building materials, non-ferrous
metals, petroleum, chemical and other related enterprises discharge smoke and dust, sulfide
and nitride oxides in the production process, they shall adopt clean production techniques,
install the supporting facilities for dust removal, desulfurization and denitrification, or take
other measures such as technical transformation to control the discharge of air pollutants.
Petroleum and chemical enterprises as well as other enterprises producing and using organic
solvents shall take measures to carry out daily maintenance and repair of the pipelines and
equipment, reduce leakage of materials, and collect or dispose of the materials leaked in a
timely manner.
The Law of the People’s Republic of China on the Prevention and Control of
Environmental Pollution caused by Solid Waste (ط
) was promulgated by the SCNPC on October 30, 1995, and was latest revised on April 29,
2020 and implemented on September 1, 2020. The construction of projects that produce, store,
use, and treat solid wastes shall be performed with environmental impact assessment conducted
as legally required and in compliance with the relevant provisions issued by the state
concerning the management of environmental protection in respect of construction projects.
The facilities for the prevention and control of environmental pollution by solid wastes
required to be built as ancillaries determined in the environmental impact assessment document
of a construction project shall be designed, built and put into operation at the same time as the
main part of the project. The preliminary design of the construction project shall, as required
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by the environmental protection design standards, incorporate the prevention and control of
environmental pollution by solid wastes into the environmental impact assessment document
and implement the measures for the prevention and control of environmental pollution and
ecological damage by solid wastes and the investment estimates for facilities for the prevention
and control of environmental pollution by solid wastes. The construction employer shall, as
required by the relevant laws and regulations, conduct acceptance inspection of the facilities
for the prevention and control of environmental pollution by solid wastes built as ancillaries,
prepare an acceptance inspection report, and disclose it to the public. A mining enterprise shall
adopt scientific mining methods and techniques for mineral separation so as to reduce the
production and storage of tailings, coal gangue, waste rock and other mining solid wastes. The
state shall encourage the use of advanced techniques to comprehensively utilize solid mining
wastes such as tailings, coal gangue, and waste rock. After the facilities for storing tailings,
coal gangue, waste rock, and other mining solid wastes are not used any more, a mining
enterprise shall, according to state provisions on environmental protection, close the fields to
prevent environmental pollution and ecological destroy. The ecology and environment
department of the State Council shall, in conjunction with other relevant departments of the
State Council, formulate a national list of hazardous wastes and lay down unified criteria and
methods for identifying hazardous waste, distinguishing marks, and requirements for the
administration of identification entities. The national list of hazardous wastes shall be adjusted
dynamically. The ecology and environment department of the State Council shall, based on the
harm characteristics and production of hazardous wastes, scientifically assess their
environmental risks, exercise grade and classification-based administration, establish an
informatized regulatory system, and manage and share data and information on the transfer of
hazardous wastes by informatized means. A distinguishing mark of hazardous wastes shall be
put on the containers and packages of hazardous wastes as well as on the facilities and sites
for collection, storage, transportation and treatment of hazardous wastes. An entity that
produces hazardous wastes shall work out a plan for managing hazardous wastes in accordance
with the relevant provisions issued by the state; and keep a hazardous waste management
journal, faithfully recording relevant information, and report the types, production, destination,
storage, treatment and other relevant information to the local ecology and environment
department through the National Hazardous Waste Information Management System.
The Law of the People’s Republic of China on the Prevention and Control of Water
Pollution () was promulgated by the SCNPC on May 11,
1984 and was latest revised on June 27, 2017 and implemented on January 1, 2018.
Environmental Impact Assessment (the “ EIA”) must be carried out according to law for
newly-formed projects and reconstruction, or extensions projects that directly or indirectly
discharge pollutants to water bodies and other installations on water. The water pollution
prevention and control facilities of construction projects shall be simultaneously designed,
constructed and put into use together with main buildings. The water pollution prevention and
control facilities shall meet the requirements of environmental impact assessment documents
approved or filed for the record. Enterprises, institutions and other production and operation
units directly or indirectly discharging industrial waste water and medical sewage to waters and
enterprises, institutions and other production and operation units required to obtain pollutant
discharging permit before discharging waste water and sewage must obtain the pollutant
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discharging permit. The pollutant discharging permit specifies requirements on the types,
concentration, total amount and discharging direction of the water pollutants to be discharged.
Enterprises, public institutions and other manufacturers and operators subject to pollutant
discharge license administration shall carry out self-monitoring of water pollutants discharged
and retain original monitoring records in accordance with the relevant provisions and
monitoring standards of the state and be responsible for the authenticity and accuracy of the
monitoring data. Chemical manufacturers and the operators and entities operating and
managing industrial agglomeration areas, mining areas, tailing ponds, hazardous waste
disposal sites, landfills, etc. shall take anti-seepage and other measures, and construct ground
water quality monitoring wells to carry out monitoring so as to prevent ground water pollution.
When constructing underground facilities or conducting underground exploitation or mining
activities, preventive measures must be taken to prevent groundwater pollution.
The Law of the People’s Republic of China on the Prevention and Control of Noise
Pollution () was promulgated by the SCNPC on
December 24, 2021 and take effect on June 5, 2022. New construction, reconstruction or
expansion projects that may cause noise pollution shall be subject to the environmental impact
assessment in accordance with the law. Facilities for prevention and control of environmental
noise pollution must be designed, built and put into use simultaneously with the main part of
a construction project. Before a construction project is put into production or use, its facilities
for prevention and control of environmental noise pollution must conduct final inspection
according to the standards and procedures prescribed by the state; if such facilities fail to meet
the requirements of the State, the construction project may not be put into production or use.
PRC REGULATIONS RELATING TO LAND
Pursuant to the Land Administration Law of the PRC (),
which was promulgated on 25 June 1986 and was revised on 29 December 1988, 29 August
1998, 28 August 2004 and 26 August 2019 respectively, and the Regulations on the
Implementation of the Land Administration Law of the PRC (ྼ
ૢԷ), which was promulgated on 27 December 1998 and was revised on 8 January 2011,
29 July 2014 and 2 July 2021, land in the PRC is either state-owned or collectively-owned.
Land owned by the state and collectively-owned by villagers may be allocated to units or
individuals for use according to law. Lawfully registered land ownership and land use rights
are protected by law. In the case of temporary use of state-owned land or land collectively-
owned by farmers for construction projects or by geological survey teams, approval shall be
obtained from the land administrative department of the government at or above the county
level. Land users shall sign contracts with relevant land administrative department or rural
economic collective organisations or village committees for the temporary use of land,
depending on the ownership of land and shall pay land compensation fees as stipulated in the
contracts for the temporary use of land. The term for the temporary use of land shall generally
not exceed two years. The state shall establish a territorial spatial planning system, and
territorial spatial plans approved in accordance with the law shall be the primary basis for
various activities of land development, protection, and construction. Where a territorial spatial
plan has been worked out, the comprehensive plan for land utilisation and the urban-rural plan
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shall no longer be effective. Before a territorial spatial plan is determined, the existing overall
plan for land utilisation and urban-rural plan legally approved shall continue to be effective.
The results of land surveys are of great importance in the preparation of territorial spatial plans,
as well as the management, protection and utilisation of natural resources.
PRC REGULATIONS RELATING TO OVERSEAS INVESTMENT, FOREIGN
INVESTMENT AND FOREIGN EXCHANGE
The Measures for the Administration of Overseas Investment of Enterprises ( Άุྤ̮
) were promulgated by the NDRC on December 26, 2017 and came into effect
on March 1, 2018. To make outbound investment, any investor shall go through the formalities
to have a proposed overseas investment project approved or filed on the record, report relevant
information, and cooperate with supervision and inspection. An investor shall, in overseas
investment, neither violate the laws and regulations of China nor threaten or damage the
national interests and national security of China.
Investment activities in China by foreign investors are principally governed by the
Catalog of Industries for Encouraging Foreign Investment ( ོᎸ̮ਠҳ༟ପุͦ፽), or the
Encouraging Catalog, the Special Administrative Measures (Negative List) for Foreign
Investment Access (݄(૶ఊ)), or the Negative List, which
were promulgated and are amended from time to time by the MOFCOM and the NDRC, the
Foreign Investment Law (), or the FIL, which promulgated on
March 15, 2019 and took effect on January 1, 2020, and their respective implementation rules
and ancillary regulations according to the needs for national economic and social development.
The Encouraging Catalog and the Negative List lay out the basic framework for foreign
investment in China, classifying businesses into three categories with regard to foreign
investment: “encouraged”, “restricted”, and “prohibited”. Industries not listed in the Negative
List are generally deemed as falling into a fourth category, “permitted,” unless specifically
restricted by other PRC laws and regulations.
On October 26, 2022, the MOFCOM and the NDRC released the Catalog of Industries for
Encouraging Foreign Investment (2022 V ersion) ( ོᎸ̮ਠҳ༟ପุͦ፽(2022و)),
which became effective on January 1, 2023, to replace the previous Encouraging Catalog. On
December 27, 2021, the MOFCOM and the NDRC released the Special Administrative
Measures (Negative List) for Foreign Investment Access (2021 Edition) (ɝतй
݄(૶ఊ)(2021و)), or the 2021 Negative List, which became effective on
January 1, 2022, to replace the previous Negative List (2020 V ersion). The 2021 Negative List
was further replaced by the Special Administrative Measures (Negative List) for Foreign
Investment Access (2024 Edition) (݄(૶ఊ)(2024و)), or
the 2024 Negative List, which was promulgated on September 6, 2024 and became effective
on November 1, 2024.
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The Implementing Rules of Foreign Investment Law (݄
ૢԷ), which was promulgated by the State Council on December 26, 2019 and became
effective on January 1, 2020, further clarified that the state encourages and promotes foreign
investment, protects the lawful rights and interests of foreign investors, regulates foreign
investment administration, continues to optimize the foreign investment environment, and
advances a higher-level opening. On the same day, the Supreme People’s Court issued an
Interpretation on Certain Issues Concerning the Application of the Foreign Investment Law of
the PRC, or the Interpretation (ቇ͜<ج>ʍਪ
༆ᙑ), which also came into effect on January 1, 2020. The Interpretation provides
guidance on questions relating to the effectiveness and enforceability of agreements relating to
foreign investments, such as shareholder agreements, share transfer agreements, and project
contracts that may arise under the new negative list system for administration of foreign
investment, according to which, investment agreements relating to foreign investment in
violation of the negative list management system may be void.
The Notice of the SAFE on Issues Concerning the Foreign Exchange Administration of
Overseas Listing () was
promulgated by the SAFE on December 26, 2014 and became effective on the same day. SAFE
and its branches with foreign exchange authorities supervise, manage and inspect, among other
things, the business registration, account opening and use, cross-border payments and capital
exchange involved in the overseas listing of domestic companies. A domestic company shall
conduct overseas listing registration with Foreign Exchange Bureaus at the place of its
incorporation with the relevant materials within 15 working days after the completion of the
offering of its overseas listing shares.
The Circular of the State Administration of Foreign Exchange on Reforming and
Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts ( ਷
 , the “ SAFE Circular 16 ”) was
promulgated by the State Administration of Foreign Exchange on June 9, 2016 and came into
effect on the same day. According to the SAFE Circular 16, enterprises registered in PRC could
settle the external debts in foreign currencies to Renminbi at their own discretion. The SAFE
Circular 16 sets a uniform standard for discretionary settlement of foreign currencies under
capital accounts (including but not limited to foreign currency capital, foreign debts and
repatriated funds raised through overseas listing), which is applicable to all enterprises
registered in PRC. On 4 December 2023, the SAFE promulgated the Notice on Further
Deepening the Reform to Facilitate Cross-border Trade and Investment (ආɓӉଉʷҷ
, the “ 2023 SAFE Circular ”), which amended part of
regulations of SAFE Circular 16 and became effective on the same day. According to the SAFE
Circular 16 and 2023 SAFE Circular, the Renminbi funds obtained from the settlement of
foreign currencies shall not be used directly or indirectly for purposes beyond the company’s
scope of business, and shall not be used directly or indirectly for domestic securities
investment or investments and wealth management products other than products and structured
deposit with risk assessment not higher than Level 2, unless otherwise expressly prescribed.
Furthermore, such Renminbi funds shall not be used for disbursing loans to non-affiliated
enterprises, unless the scope of business expressly provides so; and shall not be used to
purchase real estate of residential nature not for self-use (except for enterprises engaged in real
estate development or leasing management).
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The Circular on Optimizing Administration of Foreign Exchange to Support the
Development of Foreign-related Business ()
was promulgated by the SAFE on April 10, 2020 and became effective on the same day.
Eligible enterprises are allowed to make domestic payments by using their capital, foreign
credits and the income under capital accounts of overseas listing, with no need to provide the
evidentiary materials concerning authenticity of such capital for banks in advance, provided
that their capital use shall be authentic and in line with provisions, and conform to the
prevailing administrative regulations on the use of income under capital accounts. The
concerned bank shall conduct spot checking in accordance with the relevant requirements.
PRC REGULATIONS RELATING TO OVERSEAS LISTING
On February 17, 2023, the CSRC published the new regulations for the filing-based
administration of overseas securities offering and listing by domestic companies, which came
into effect on March 31, 2023. The newly released set of regulations consists of 6 documents,
including the Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies () (the “ Trial Overseas
Listing Measures ”) and 5 supporting guidelines, along with the Notice of the Administrative
Arrangements for the Filing of Overseas Securities Offering and Listing by Domestic
Companies (). Pursuant to the Trial
Overseas Listing Measures, a PRC domestic company seeking offering and listing securities in
overseas market, either directly or indirectly as defined in the Overseas Listing Measures, shall
file with the CSRC and report relevant information.
The Trial Overseas Listing Measures also provide that where an issuer submits an
application for initial public offering or listing to the competent overseas authorities, the issuer
shall also file with the CSRC in accordance with the Trial Overseas Listing Measures within
3 business days upon submission of the overseas initial public offering and listing application.
The Guidelines on the Application of Regulatory Rules — Overseas Issuance and Listing
Category No. 7 (ˏ— ྤ̮೯Бɪ̹ᗳୋ7໮) was issued by the CSRC on
May 7, 2024, which sets out the regulatory requirements for the transfer of domestic
enterprises from the offshore OTC market to overseas stock exchanges for the purpose of
overseas issuance and listing. The Guidelines on the Application of Regulatory Rules —
Overseas Issuance and Listing No. 6 (ˏ— ྤ̮೯Бɪ̹ᗳୋ6໮) was
issued by the CSRC on May 16, 2023, which provides guidelines on the application procedures,
rules and material requirements for overseas issuance of GDRs by domestic listed companies.
In addition, pursuant to the Provisions on Strengthening Confidentiality and Archives
Administration in Respect of Overseas Issuance and Listing of Securities by Domestic
Enterprises (), in
the course of overseas issuance and listing of domestic enterprises, domestic enterprises and
securities companies and securities service agencies which provide the corresponding services
shall strictly comply with the relevant laws and regulations of the People’s Republic of China
and the requirements of these Provisions, strengthen legal awareness of confidentiality of State
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secrets and archives administration, establish a sound system for confidentiality and archives
work, adopt the requisite measures to perform the responsibilities of confidentiality and
archives administration, and shall not divulge State secrets and work secrets of State agencies
or harm State and public interests.
PRC REGULATIONS RELATING TO EMPLOYMENT AND SOCIAL W ARFARE
Labor and Labor Contract
According to the Labor Law of the PRC () promulgated on
July 5, 1994 and most recently amended in December 29, 2018 with immediate effect by
SCNPC, enterprises and institutions must establish and improve their system of workplace
safety and sanitation, strictly abide by state rules and standards on workplace safety, educate
laborers in labor safety and sanitation in China. Labor safety and sanitation facilities must
comply with state-fixed standards. Enterprises and institutions must provide laborers with a
safe workplace and sanitation conditions which are in compliance with state stipulations and
the relevant articles of labor protection.
The Labor Contract Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷௶ਗΥΝ
) (promulgated by the SCNPC on June 29, 2007 and latest amended on December 28,
2012) and the Regulations on the Implementation of the Labor Contract Law of the People’s
Republic of China (ૢԷ) (promulgated by the State
Council on September 18, 2008 and came into effect on the same day) stipulate the rights and
obligations of the parties to the labor contract, including the conclusion, performance,
modification, rescission and termination of the labor contract, etc. Employers must enter into
written labor contracts with workers and pay labor remuneration to workers timely and in full
amount in accordance with the provisions of the labor contract and national regulations.
Employers may terminate labor contracts with workers under certain circumstances and pay
economic compensation to workers according to law.
On July 31, 2025, the Supreme People’s Court promulgated the Labor Law Interpretation
II, which came into effect on September 1, 2025. Labor Law Interpretation II aims to unify
legal standards for socially concerning issues such as non-compete agreements, mixed
employment, employment of foreign nationals, and social insurance disputes, thereby
safeguarding the legitimate rights and interests of both employees and employers in accordance
with the law. It stipulates that if an employer and an employee agree or an employee commits
to the employer that there is no need to pay social insurance premiums, the people’s court shall
deem such an agreement or commitment invalid. Additionally, Labor Law Interpretation II
repeals the provision in the Interpretation (I) of the Supreme People’s Court on Issues
Concerning the Application of Law in the Trial of Labor Dispute Cases which classified that
the relationship between rehired retirees and companies as a labor service relationship, thereby
strengthening the protection of rehired retirees’ rights and interests.
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Social Insurance and Housing Provident Fund
In accordance with the Social Insurance Law of the People’s Republic of China ( ʕശ
) which was promulgated by Standing Committee of the National
People’s Congress on October 28, 2010 and was latest amended on December 29, 2018, with
the latest revision effective on the same date, employers are required to contribute, on behalf
of their employees, to a number of social security funds, including funds for basic pension
insurance, unemployment insurance, basic medical insurance, occupational injury insurance,
and maternity insurance. Employers failed to promptly contribute social security premiums in
full amount shall be ordered by the social security premium collection agency to make or
supplement contributions within a stipulated period, and shall be subject to a late payment fine
computed from the due date 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 the amount of the amount in arrears.
In accordance with the Regulations on the Administration of Housing Provident Fund
(၍ଣૢԷ) which was promulgated by the State Council on April 3, 1999, and
was latest amended on March 24, 2019, with the latest revision effective on the same date, an
employer shall make registration of contribution to the housing provident fund with the
housing provident fund management center, and go through the formalities of opening housing
provident fund accounts on behalf of its employees. An employer fails to undertake
contribution registration of housing provident fund or fails to go through the formalities of
opening housing provident fund accounts for its employees, the housing provident fund
management center shall order it to go through the formalities within a prescribed time limit;
where failing to do so at the expiration of the time limit, a fine of not less than RMB10,000
nor more than RMB50,000 shall be imposed. An employer is overdue in the contribution of,
or underpays, the housing provident fund, the housing provident fund management center shall
order it to make the contribution within a prescribed time limit; where the contribution has not
been made after the expiration of the time limit, an application may be made to a people’s court
for compulsory enforcement.
Prevention and control of occupational diseases
According to the Law of the PRC on the Prevention and Control of Occupational Diseases
(), which was promulgated on 27 October 2001 and was
revised on 31 December 2011, 2 July 2016, 4 November 2017 and 29 December 2018
respectively, a construction entity shall conduct the pre-assessment of occupational hazards at
the feasibility study stage if a construction project may cause any occupational hazards. The
protective facilities against occupational diseases of the construction project shall be designed,
constructed, and put to use in production and other operations at the same time as the main
body of the project. Before the acceptance check of a construction project, the construction
entity shall evaluate the effects of occupational hazard control.
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PRC REGULATIONS RELATING TO INTELLECTUAL PROPERTY
According to the Civil Code, intellectual property rights are the proprietary rights enjoyed
by right holders in accordance with the law in respect of the objects, including works,
inventions, utility models, designs, trademarks and trade secrets. China has adopted
comprehensive legislations governing intellectual property rights. China is a signatory to the
primary international conventions on intellectual property rights and has been a member of the
Agreement on Trade-Related Aspects of Intellectual Property Rights (ᗆପ
) since its accession to the World Trade Organization in December 2001.
Patents
The Patent Law of the People’s Republic of China ()
(promulgated by the SCNPC on March 12, 1984 and latest revised on October 17, 2020), the
Implementation Rules of the Patent Law of the People’s Republic of China ( ʕശɛ͏΍ձ
) (promulgated by the State Council on June 15, 2001 and latest revised
on December 11, 2023) and the Interim Measures for the Processing of Patent-Related
Examination Businesses for the Implementation of the Amended Patent Law and its
Implementing Rules (ٙج
ʮѓ) (promulgated by the China National Intellectual Property Administration on December
21, 2023 and effective on January 20, 2024) stipulate that an inventor, a designer, or the
employer of the inventor of a service invention-creation may apply for the grant of an invention
patent, a utility patent or a design patent. Assignment shall take effect as of the date of its
registration. The patent right duration is 20 years for invention, 10 years for utility, and
15 years for design, starting from the date of patent application.
Trademarks
Trademarks are protected by the Trademark Law of the PRC ( ʕശɛ͏΍ձ਷ਠᅺ
) which was promulgated on August 23, 1982, last amended on April 23, 2019, and became
effective on November 1, 2019 by SCNPC as well as the Implementation Regulations of the
Trademark Law of the PRC (ૢԷ), which was promulgated by
the State Council on August 3, 2002 and amended on April 29, 2014 and became effective from
May 1, 2014. In China, registered trademarks include commodity trademarks, service
trademarks, collective marks, and certification marks.
The Trademark Office under the PRC State Administration for Industry and Commerce,
or the Trademark Office, handles trademark registrations and grants a term of ten years to
registered trademarks. Trademarks are renewable every ten years where a registered trademark
needs to be used after the expiration of its validity term. A trademark registrant may license
its registered trademark to another party by entering a trademark license contract. Trademark
license agreements must be filed with the Trademark Office to be recorded. The licensor must
supervise the quality of the commodities on which the trademark is used, and the licensee must
guarantee the quality of such commodities. As for trademarks, the PRC Trademark Law has
adopted a “first come, first file” principle with respect to trademark registration. Where
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trademark for which a registration application has been made is identical or similar to another
trademark which has already been registered or been subject to a preliminary examination and
approval for use on the same kind of or similar commodities or services, the application for
registration of such trademark may be rejected. Any person applying for the registration of a
trademark may not prejudice the existing right first obtained by others, nor may any person
register in advance a trademark that has already been used by another party and has already
gained a “sufficient degree of reputation” through such party’s use.
Copyrights
The Copyright Law of the People’s Republic of China ()
(promulgated by the SCNPC on September 7, 1990 and latest revised on November 11, 2020)
and the Regulations on the Implementation of the Copyright Law of the People’s Republic of
China (ૢԷ) (promulgated by the State Council on August
2, 2002 and latest revised on January 30, 2013) stipulate that for the innovative and intellectual
works that can be presented in certain tangible manners in respect of Chinese citizens, legal
persons or non-legal person organizations, including literature, art and science, regardless of
whether they are published or not, the owners enjoy the copyright. Where the copyright
belongs to a legal entity or unincorporated organisation or in respect of a service work where
the legal entity or unincorporated organisation enjoys the copyright (except the right of
authorship), the protection period of publication right is 50 years, ending on 31 December of
the 50th year after the creation of the work. The right stipulated in Items 5 to 17 of Paragraph
1 under Article 10 of the law shall be protected for a period of 50 years, ending on 31 December
of the 50th year after the date on which the work is first published.
The Regulations on Computer Software Protection (ᚐૢԷ) was
promulgated by the State Council on June 4, 1991 and latest revised on January 30, 2013.
Chinese residents, legal entities or other organizations enjoy copyright in any software which
they have developed, whether published or not, in accordance with the regulations. Software
copyright is created from the date when the development of the software is completed. With
respect to a legal person’s or other organization’s software copyright, the term of protection
shall be 50 years, and shall end on 31 December of the 50th year after the software’s first
release.
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Domain Names
Pursuant to the Measures for the Administration of Internet Domain Names ( ʝᑌၣਹ
) promulgated by the MIIT on August 24, 2017, and effective on November 1,
2017, to replace the 2004 Domain Names Measures, “domain name” shall refer to the character
mark of hierarchical structure, which identifies and locates a computer on the internet and
corresponds to the internet protocol (IP) address of that computer. The principle of “first come,
first serve” is followed for the domain name registration service. After completing the domain
name registration, the applicant becomes the holder of the domain name registered by him/it.
Any organization or individual may file an application for settlement with the domain
names dispute resolution institution or file a lawsuit in the People’s Court in accordance with
the law if such organization or individual consider its/his legal rights and interests to be
infringed by domain names registered or used by others.
Trade Secrets
Pursuant to the PRC Anti-Unfair Competition Law (ن
) latest amended by SCNPC on April 23, 2019 with immediate effect, the term “trade
secrets” refers to technical and business information that is unknown to the public, has utility,
may create business interests or profits for its legal owners or holders, and is maintained as a
secret by its legal owners or holders. Under the PRC Anti-Unfair Competition Law, business
persons are prohibited from infringing others’ trade secrets by: (i) obtaining trade secrets from
the legal owners or holders by any unfair methods, such as theft, bribery, fraud, coercion,
electronic intrusion, or any other illicit means; (ii) disclosing, using, or permitting others to use
the trade secrets obtained illegally under item (i) above; or (iii) disclosing, using, or permitting
others to use the trade secrets, in violation of any contractual agreements or any requirements
of the legal owners or holders to keep such trade secrets in confidence. If a third party knows
or should have known of the above-mentioned illegal conduct but nevertheless obtains, uses or
discloses trade secrets of others, the third party may be deemed to have committed a
misappropriation of the others’ trade secrets. The parties whose trade secrets are being
misappropriated may petition for administrative corrections, and regulatory authorities may
stop any illegal activities and impose fines on the infringing parties.
PRC REGULATIONS RELATING TO TAX
Income Tax
The Law of the PRC on Enterprise Income Tax () was
promulgated on March 16, 2007 and was most recently amended on December 29, 2018 by
SCNPC, and its implementation rules (ૢԷ),
promulgated by the State Council on December 6, 2007 with the latest amendment on
December 6, 2024 (collectively, the “ EIT Laws ”). According to the EIT Laws, enterprises
consist of resident enterprises and non-resident enterprises. Resident enterprises are defined as
enterprises that are established in PRC in accordance with the PRC laws, or that are established
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in accordance with the laws of foreign countries but whose actual or de facto control is
administered from within China. Non-resident enterprises are defined as enterprises that are set
up in accordance with the laws of foreign countries and whose actual administration is
conducted outside China but have established institutions or premises in China, or have no such
established institutions or premises but have income generated from inside the PRC. Under the
EIT Laws a uniform corporate income tax rate of 25% is applicable. However, if non-resident
enterprises have not formed permanent establishments or premises in China, or if they have
formed permanent establishment institutions or premises in China but there is no actual
relationship between the relevant income derived in the PRC and the established institutions
or premises set up by them, the enterprise income tax is, in that case, set at the rate of 10% for
their income sourced from inside the PRC.
Income Tax in Relation to Dividend Distribution
The EIT Laws provide that an income tax rate of 10% will normally be applicable to
dividends payable to investors that are “non-resident enterprises,” and gains derived by such
investors, which (a) do not have an establishment or place of business in China, or (b) have an
establishment or place of business in China, but the relevant income is not effectively
connected with the establishment or place of business to the extent such dividends and gains
are derived from sources within China. Such income tax on the dividends may be reduced
pursuant to a tax treaty between China and the jurisdictions in which our non-PRC shareholders
reside. Pursuant to an Arrangement Between China and the Hong Kong Special Administrative
Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion With
Respect to Tax on Income (ٙ
τર), or the Double Tax Avoidance Arrangement, promulgated by the SA T on August 21,
2006, most recently amended on July 19, 2019 and became effective on December 6, 2019, and
other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent
PRC tax authority to have satisfied the relevant conditions and requirements under such Double
Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the
dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be
reduced to 5% upon receiving approval from in-charge tax authority. However, based on the
Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax
Treaties () promulgated on
February 20, 2009 by the SA T with immediate effect, if the relevant PRC tax authorities
determine, in their discretion, that a company benefits from such reduced income tax rate due
to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust
the preferential tax treatment; and based on the Announcement of the SA T on Issues concerning
“Beneficial Owners” in Tax Treaties (ʕ“Ϟɛ”Ϟᗫਪᕚ
ʮѓ), which was promulgated on February 3, 2018 by the SA T and became effective on
April 1, 2018, conduit companies, which are established for the purpose of evading or reducing
tax, or transferring or accumulating profits, may not be recognized as beneficial owners and
thus, will not be entitled to the above-mentioned reduced income tax rate of 5% under the
Double Tax Avoidance Arrangement.
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Value-added Tax
According to the Temporary Regulations on V alue-added Tax (೼
ᅲБૢԷ), promulgated by the State Council on December 13, 1993, last amended on
November 19, 2017 with immediate effect, and the Detailed Implementing Rules of the
Temporary Regulations on V alue-added Tax (),
promulgated by the MOF on December 25, 1993, last amended on October 28, 2011 and
became effective on November 1, 2011, all taxpayers selling goods, providing processing,
repair or replacement services or importing goods within the PRC shall pay value-added taxes.
Furthermore, according to the Trial Scheme for the Conversion of Business Tax to
V alue-added Tax (), promulgated by the MOF and the SA T on
November 16, 2011, the State Council began to launch taxation reforms in a gradual manner
in January 2012, whereby the collection of value-added tax in lieu of business tax items was
implemented on a trial basis in regions showing significant radiating effects in economic
development and providing outstanding reform examples, beginning with production service
industries such as transportation and certain modern service industries. Pursuant to the Circular
of Taxation on Full Launch of the Pilot Scheme on Levying V alue-added Tax in Place of
Business Tax (), which was jointly issued by
the MOF and the SA T on March 23, 2016, partly amended by the MOF, the SA T and the
General Administration of Customs on March 20, 2019 and took effect on April 1, 2019, upon
approval of the State Council, the pilot program of the collection of value-added tax in lieu of
business tax shall be promoted nationwide in a comprehensive manner starting from May 2016,
and all taxpayers of business tax engaged in the construction industry, the real estate industry,
the financial industry and the life science industry shall be included in the scope of the pilot
program with regard to payment of value-added tax instead of business tax.
The Circular of the MOF and the SA T on Adjustment of V alue-Added Tax Rates (݁
), which was jointly promulgated by the MOF
and the SA T on April 4, 2018 and became effective on May 1, 2018, set forth that (i) for V A T
taxable sales acts or importation of goods originally subject to value-added tax rates of 17%
and 11% respectively, such tax rates shall be adjusted to 16% and 10%, respectively; (ii) for
purchase of agricultural products originally subject to deduction rate of 11%, such deduction
rate shall be adjusted to 10%; (iii) for purchase of agricultural products for the purpose of
production and sales or consigned processing of goods subject to tax rate of 16%, such tax shall
be calculated at the deduction rate of 12%; (iv) for exported goods originally subject to tax rate
of 17% and export tax refund rate of 17%, the export tax refund rate shall be adjusted to 16%;
and (v) for exported goods and cross-border taxable acts originally subject to tax rate of 11%
and export tax refund rate of 11%, the export tax refund rate shall be adjusted to 10%.
The Announcement on Policies for Deepening the V A T Reform (ࠧ
ʮѓ), which was jointly promulgated by the MOF, the SA T and General
Administration of Customs on March 20, 2019 and became effective on April 1, 2019, set forth
that (i) for V A T taxable sales acts or importation of goods originally subject to value-added tax
rates of 16% and 10% respectively, such tax rates shall be adjusted to 13% and 9%,
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respectively; (ii) for purchase of agricultural products originally subject to deduction rate of
10%, such deduction rate shall be adjusted to 9%; (iii) for purchase of agricultural products for
the purpose of production and sales or consigned processing of goods subject to tax rate of
13%, such tax shall be calculated at the deduction rate of 10%; (iv) for exported goods
originally subject to tax rate of 16% and export tax refund rate of 16%, the export tax refund
rate shall be adjusted to 13%; and (v) for exported goods and cross-border taxable acts
originally subject to tax rate of 10% and export tax refund rate of 10%, the export tax refund
rate shall be adjusted to 9%.
LA WS AND REGULATIONS RELATED TO OUR BUSINESS IN DR CONGO
Laws and Regulations relating to manufacturing facilities and manufacturing activities
DR Congo laws contain provisions applicable to the manufacturing facilities and
manufacturing activities, essentially provided by:
 the Law No. 11/009 of 09 July 2011 on the Fundamental Principles of
Environmental Code (the “ Environmental Code ”);
 the Law No. 007/2002 of 11 July 2002 on the mining code, as amended and
supplemented by Law No. 18/001 of 09 March 2018 (the “ Mining Code ”);
 the Decree No. 038/2003 of 26 March 2003 on the mining regulations as amended
and completed by Decree No. 18/024 of 08 June 2018 (the “ Mining Regulations ”);
and
 the ministerial order No. 00131/CAB.MIN/MINES/01/2023 of 19 April 2023
regulating the activities of the smelting entities (the “ Smelting Order ”).
Licensing and authorizations
Under the Smelting Order, the treatment of mineral substances requires a smelting license
(the “ Smelting License ”) issued by the mining minister (the “ Minister ”). The granting of the
smelting license is conditional upon, among other things, the submission by the applicant of
an environmental and social impact assessment (the “ ESIA ”) and an environmental and social
management plan for the project (the “ ESMP ”).
The regime is therefore twofold: it comprises (i) the requirements and technical standards
set out in the Environmental Code, the Mining Code and the Mining Regulations, which apply
to all manufacturing facilities and manufacturing activities in the mining industry; and (ii) the
mitigation measures set out in the ESIA and ESMP to reduce the negative impacts of these
manufacturing facilities and manufacturing activities.
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According to the Decree No. 13/015 of 29 May 2013 regulating classified facilities,
facilities for processing mineral and similar materials are subject to authorization from the
Minister of the Environment.
Environmental and Operational requirements
Under the Environmental Code, the facility must not be located in a protected area. Under
the Mining Code, a protected area is a clearly defined geographical space dedicated to ensure
the long-term conservation of nature, ecosystem services and associated cultural values.
Further, according to the Directive on environmental and social impact assessment
annexed to the Mining Regulations, the design and construction of treatment facilities are
subject to, among other things, the following regulatory obligations:
 Air pollution control devices must be installed in the processing facilities;
 During ore processing, the operator or processing/smelting entity must (i) carry out
tests inside and outside its perimeter analyzing the levels of the contaminants; and
(ii) record the test methods used, the results of these tests and, where applicable, the
corrective measures to be taken in a register for this purpose;
 The operator or treatment entity must maximize the recirculation of mine
wastewater to the plant and minimize the use of fresh water;
 The operator or processing/smelting entity is required to install a groundwater
monitoring network around site components that may affect groundwater,
particularly around the processing workshop or plant/facility and areas where
acid-generating, leachable or high-risk mine discharges accumulate, in order to
verify the safety of mining activities and detect any significant deterioration in
groundwater quality; and
 Each section of the processing plant must have an independent system for collecting
and recirculating wash water and overflow from the processing units in the plant.
Manufacturing activities
Under the Directive on environmental and social impact assessment appended to the
Mining Regulations, the manufacturing activities are subject to, among other things, the
following regulatory obligations:
 It is prohibited to discharge wastewater, mine drainage, mine waste or any other
contaminant into surface water or within 100 meters of a source of drinking water
or water used for human or livestock consumption;
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 Contaminants must be stored and treated in such a way as to eliminate any risk of
water pollution;
 No stream, lake or river may be used for the partial or total treatment of wastewater;
 No dilution of wastewater is permitted;
 Contaminated runoff from the treatment plant must be collected and treated before
discharge at the point of discharge; and
 It is prohibited to mix mining wastewater with other water.
Reporting requirements
The Smelting Order imposes the following reporting requirements on processing/smelting
entities:
 Submit annually its activity report to the Minister and other mining authorities;
 Submit monthly an ad hoc form to the Minister the mining environment protection
department (the “ DPEM ”) and other mining authorities;
 Keep up to date and submit, where applicable, the registers, journals and other
documents; and
 Declare monthly to the mining department the quality, quantity and origin of the
mineral substances purchased.
Penalties for non-compliance
Failure to comply with the above regulatory obligations can lead to the following
penalties:
 reporting and inspection obligations : seven days to one month’s imprisonment (for
the person responsible) and a fine not exceeding the equivalent of US$10,000 in
Congolese francs, or one of these penalties only;
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 other obligations 1: confiscation of the financial security. Under the Mining Code
and Mining Regulations, mining operators and processing entities are required to
establish financial security to ensure or guarantee the cost of environmental
mitigation and rehabilitation measures; and
 irregularities in mandatory documents : suspension of the activities for a period of
three months with a penalty payment equivalent to US$500 per day until the
situation is regularized, if the mining permit owner or the mineral treatment entity
is still not in compliance after the suspension period.
Mineral processing and mining operations
Mining operations
Mining operations are mainly governed by the Mining Code and the Mining Regulation.
Under the Mining Code, underground minerals belong exclusively to DR Congo
Government.
However, any private party may engage in mining activities, provided that the conditions
of eligibility set forth in the Mining Code are met.
 Exploitation Permit
The exploitation permit authorizes its holder to exploit specific mineral substances
within a designated perimeter, for a maximum of 25 years, renewable for periods not
exceeding 15 years each. The exploitation permit may be extended to associated or
non-associated substances.
Further, to obtain the exploitation permit, the applicant must (i) submit a feasibility
study demonstrating an economically exploitable deposit; (ii) provide proof of the
financial resources for the project and a share capital of at least 40% of required financial
resources; (iii) obtain prior approval of an ESIA and ESMP , and (iv) transfer 10 % of the
share capital to DR Congo Government (free and non-dilutable).
Holders of exploitation permits are also required to commence development and
construction work on the plant within three years of the exploitation permit being issued.
1 e.g. obligation to submit the annual report on the implementation of exploitation, mitigation and rehabilitation
works; the report evaluating the mitigation and rehabilitation measures; the environmental audit report on
closure; the obligations of the holder towards the communities affected by the exploitation project; and the
obligation to keep journals and registers, may result in the confiscation of the financial security.
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In addition, the holder of an exploitation permit is liable for surface tax, the amount
of which is subject to annual adjustment by the CAMI upon opinion of the Central Bank
of Congo based on changes in nominal effective exchange rate index, which was
US$2,499.54 and US$2,574.53 per mining square in 2024 and 2025, respectively.
The Mining Code of DR Congo requires (i) 10% of the share capital of DR Congo
subsidiary to be transferred to the State when it obtains an exploitation permit (the “ Share
Transfer Rule ”), and (ii) an additional 5% of the share capital to be transferred to the
State upon each renewal of the exploitation permit. According to the laws of DR Congo,
the CAMI generally sends notifications to the holder of the mining permit requesting it
to provide evidence of compliance with the Share Transfer Rule. Failure to demonstrate
compliance may result in (i) the direct cancellation of the exploitation permit and
therefore affect the subsidiary’s activities in the DR Congo; or (ii) CAMI requesting it to
provide evidence of compliance with the Share Transfer Rule within a specified period
(generally 45 days). Although CAMI’s request is to provide evidence of compliance with
the Share Transfer Rule, our local subsidiary may, following this notification, proceed to
comply with the Share Transfer Rule. As advised by our legal advisors as to DR Congo
laws, the second scenario is more likely to occur in the event of non-compliance with the
Share Transfer Rule, and the risk of receiving a direct cancellation notification from
CAMI is low, given (a) the current government of the DR Congo’s initiatives to improve
the business investment environment, which may prompt it to adopt the second scenario
to comply with the Share Transfer Rule; and (b) the first scenario has not occurred in the
past five years to local companies based on the experience of our legal advisors as to DR
Congo laws, and as of the Latest Practicable Date, CAMI had not given any notice to our
local subsidiary to revoke its exploitation permit.
As of the Latest Practicable Date, Jinxun DR Congo held an exploitation permit
notwithstanding it did not carry out any mining activities. Jinxun DR Congo has chosen
to hold such exploitation permit for the following reasons: (i) an exploitation permit
enables its holder to underground mining right, whereas a smelting permit enables its
holder to surface processing right. Jinxun DR Congo owns and operates surface facilities
in reliance on the surface processing right pursuant to the smelting permit that it holds.
Underground mining activities underneath such premises which Jinxun DR Congo owns
and operates could potentially pose safety risks to the surface facilities of Jinxun DR
Congo. By holding an exploitation permit in respect of the premises which Jinxun DR
Congo operates, Jinxun DR Congo can prevent third parties from obtaining the
underground mining right underneath such premises and ensure the safety of its assets and
operations; and (ii) a holder of exploitation permit could be exempted from the obligation
to transfer 50% of its share capital to Congolese nationals pursuant to the Mining Code
of DR Congo. As advised by our legal advisors as to DR Congo laws, the regulations on
mining operations in DR Congo apply to all holders of exploitation permit. Under the
Mining Code of DR Congo, any legal entity solely engaged in the processing of mineral
substances which does not possess an exploitation permit to engage in mining activities
in parallel must dedicate at least 50% of the share capital to Congolese nationals. In
practice, the Congolese authorities consider that the obligation to dedicate 50% of the
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share capital to Congolese nationals applies only to processing entities that do not hold
an exploitation permit. A processing entity which holds an exploitation permit but which
does not engage in mining activities is not in practice required to comply with the
requirement regarding the 50% transfer of interest to Congolese nationals. To maintain
the exploitation permit, as further advised by our legal advisors as to DR Congo laws,
Jinxun DR Congo is required to (i) pay an annual surface tax, the amount of which is
subject to annual adjustment by the CAMI upon opinion of the Central Bank of Congo
based on changes in the nominal effective exchange rate index, which was US$2,499.54
and US$2,574.53 per mining square in 2024 and 2025, respectively. As Jinxun DR Congo
owns the mining rights of two mining squares under its exploitation period, it paid an
annual surface tax of US$4,999.08 and US$5,149.06 in 2024 and 2025, respectively, (ii)
commence any of the development and construction works, such as initiating operations
for accessing the mineral deposit, mine preparation, mining, transportation, and storage,
and the establishment of mineral processing and metallurgical facilities (including
construction work and any activities directly related to project commissioning), within
three years of the title being issued. Jinxun DR Congo completed the construction of DR
Congo copper smelter I, which commenced production in August 2023 which, as advised
by our legal advisors as to DR Congo laws, was in compliance with this requirement, and
(iii) comply with its environmental and social obligations as a mining permit holder
towards the local communities set forth in the social responsibility plan signed by Jinxun
DR Congo with the local government covering the period from 2025 to 2029. The signed
social responsibility plan includes projects such as agricultural supplies donations, school
construction, and plaza fencing construction, with a total project value of no less than
US$719,909.
Mineral processing
Mineral processing activities are governed by the Mining Code, the Mining Regulation
and the Smelting Order.
Under the Mining Code, the processing of mineral substances may be carried out either
by the holder of an exploitation permit or by a processing entity.
Under the Smelting Order, processing entities are classified into three categories:
 Category A: produce concentrate from mineral and pre-concentrates. They are not
authorized to export pre-concentrates or concentrates and may only sell their
products to Category B processing entities or request custom processing prior to
export.
 Category B: produce refined or refined metal or an alloy from ores, slags,
pre-concentrates or concentrates.
 Category C: clean and polishes precious and colored stones for improved decorative
and lapidary properties.
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Any person who intends to engage solely in the processing of mineral substances must
apply for and obtain a processing license from the Minister of Mines. This license is valid for
a specific mineral substance and in a well-defined geographical area for a period of four years
2.
The granting conditions include (i) being incorporated under DR Congo law, (ii)
demonstrating financial capacity; (iii) submitting an ESIA and ESMP; (iv) providing a project
feasibility study; (v) having qualified personnel (prioritizing DR Congo citizens); (vi) not
being bankrupt; (vii) and guaranteeing a value-added rate of at least 35%.
Export of minerals
In principle, mining permit holders are free to sell their products to their customers at
freely negotiated prices locally or overseas. However, DR Congo law grants the Minister of
Economy, the Minister of Mines and the Minister of Foreign Trade the power to prohibit the
export of certain commercial mining products for purposes of policy compliance as defined by
the DR Congo government. In a circular note issued by the Minister of Mines, the Minister of
Foreign Trade and the Minister of Economy dated March 6, 2025, the Ministers suspended the
export of commercial mining products, including the cobalt hydroxides, white alloys, cobalt
carbonates, mixed copper-cobalt concentrates, for a period of four (4) months, renewable after
evaluation. The cobalt export ban was lifted on October 15, 2025, which was subsequently
replaced by an export quota system. The export quota system allows the export of up to 18,125
tons of cobalt for the rest of 2025, with annual caps of 96,600 tons in 2026 and 2027. It also
allows all mining, industrial, or semi-industrial operators who do not benefit from quotas to
apply for quotas by submitting a quota allocation request to the Strategic Mineral Substances
Market Regulation and Control Authority (“ ARECOMS ”). As of the Latest Practicable Date,
21 mining, industrial, or semi-industrial operators were granted export quotas totaling
approximately 18,125 tons of cobalt for export of cobalt during the fourth quarter of 2025. As
of the Latest Practicable Date, we are subject to such export quota system as advised by our
legal advisors as to DR Congo laws. Although we were not granted export quotas for the rest
of 2025, we plan to submit an application to ARECOMS for quota allocation in 2026.
During the Track Record Period, Jinxun DR Congo primarily sourced copper ores from
upstream suppliers in DR Congo and is principally engaged in local processing of concentrates
for the production of copper cathodes and cobalt hydroxide. Given that (i) we are not currently
focusing on the production of cobalt hydroxide, which is merely a byproduct generated during
our copper smelting process; (ii) we exported only approximately 83.7 tons of cobalt
compounds during the Track Record Period, the revenue generated from such export sales was
insignificant and represented only approximately 1.2% of our total revenue in the six months
ended June 30, 2025; and (iii) we can procure cobalt hydroxide from other 21 suppliers in DR
Congo holding an aggregated export quotas of 18,125 tons for the last quarter of 2025, which
largely exceeds our annual production capacity of 4,500 tons of cobalt(II) hydroxide, or from
other countries such as Australia, Indonesia, Cuba, and the Philippines with a total of
2 Under penalty of forfeiture, the application for renewal must be submitted at the earliest six months and at the
latest three months before the expiry date of the authorization.
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approximately five million tons of cobalt reserves according to Frost & Sullivan, which we
believe can provide stable supply for the operations of the processing plant in Anhui Province,
our Directors are of the view that the aforementioned export restrictions did not have a material
adverse impact on our operations and financial performance.
LA WS AND REGULATIONS RELATED TO OUR BUSINESS IN ZAMBIA
We operate smelting business in Zambia and our business in Zambia consisting of copper
smelting. Below is an overview of the laws and regulations materially relevant to our business
in Zambia.
Laws and Regulations Relating to Mining
A mineral processing licence is granted for a tenure of 25 years. Where a mining right is
set to expire, section 76(1) of the Mines and Minerals Development Act, 2015 (the “ Mines
Act”) allows a holder of a mining licence to renew a mining right in the prescribed manner and
form upon the payment of the prescribed fee. Where the holder of a mining right applies for
renewal of the mining right, the existing mining right shall remain in force until the application
for renewal is either approved or rejected.
Regulation 21(1) (iii) of the The Mines and Minerals Development (General) Regulations,
2016 (the “ Mines Regulations ”) goes further to provide for the renewal of a mining right and
provides that when making an application for the renewal of a large-scale mining licence, the
application must be submitted one year before the expiry date of the licence.
When an application for renewal is made it can either be accepted or rejected and when
it is rejected, reasons for the rejection shall be given by the Ministry of Mines through its
relevant office which allow the applicant to remedy the grounds of rejection where possible.
If the application for renewal is rejected before the current licence expires, the licence will
continue to be valid until the original date of its expiration and when the application for
renewal is eventually accepted the licence will continue to exist until the date of renewal. Thus,
if an application for renewal is submitted before a licence expires, then the holder of the licence
has valid tenure until the outcome of the application is determined. Form XIII of the first
schedule in the Mining Regulations, is the document to be filled out when making an
application for renewal of mining license.
Export of minerals
All mineral exports require an export permit issued by the Ministry of Mines and Minerals
Development through the Minerals Regulation Commission (the “ Commission ”) under the
Minerals Regulation Commission Act No. 14 of 2024 (the “ MRCA ”). Approval is required
from the Commission under section 32 of the MRCA, which provides that a person shall not
import or export a mineral, gemstone, ore or mineral product without a permit issued to that
person by the Commission. Additional approval is required for the export of radioactive
minerals.
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During the Track Record Period, Rongxing Investment primarily sourced copper ores
from upstream suppliers in Zambia. As of the Latest Practicable Date, Rongxing Investments
holds a valid mineral exports permit for the exports of copper cathodes to Jinxun Singapore.
As advised by our legal advisors as to Zambian laws, save as Rongxing Investments is required
to carry out its mineral export activities complying with the mineral exports permit, there are
no other restrictions on the export of minerals affecting Rongxing Investment’s business
operation in all material respects. In addition, our legal advisors as to Zambian laws has
confirmed that Rongxing Investments had been compliant with the requirements under the
mineral exports permit during the Track Record Period and up to the Latest Practicable Date.
Laws and Regulations Relating to Environmental Protection
The Environmental Management Act is the principal statute addressing the protection of
the environment and control of pollution. The Environmental Management Act generally
prohibits the emission of a pollutant or contaminant into the environment without the relevant
licence issued by Zambia Environmental Management Agency (the “ ZEMA ”) under section 32
of the Act.
In terms of Section 29 of the Environmental Management Act a person may not undertake
any project that may have an effect on the environment without the prior written approval of
ZEMA and except in accordance with any conditions imposed in that approval. The
Environmental Protection and Pollution Control (Environmental Impact Assessment)
Regulations No. 28 of 1997 require that anyone conducting mining activities carry out an
environmental impact assessment and are issued a Decision Letter by ZEMA prior to
implementing the activities.
The Environmental Management (Licencing) Regulations 2013 provide for licences to be
issued in respect of water and air pollution, waste management, pesticide and toxic substances
and emission of noise. The Environmental Management Act also provides for certain powers
of ZEMA in respect of the regulation of radioactive contamination of the environment.
Laws and Regulations Relating to Foreign Investment and Foreign Exchange
Foreign Investment
An investor can apply for an investment license with the Zambia Development Agency
(the “ ZDA”) with businesses operating in the sectors including foreign investments, large-scale
businesses, export-oriented businesses, manufacturing and processing businesses, tourism
businesses, agricultural businesses and mining businesses.
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Foreign exchange
There are currently no foreign exchange control regulations applicable in Zambia. The
ITBDA provides that an investor can, subject to compliance with any other written law, can
externalize funds through dividends, principal and loan repayments of any foreign loan,
management fees, royalties and other charges in respect of any agreement; the net proceeds of
sale or liquidation of a business; or any other liabilities.
Laws and Regulations Relating to Taxation
Tax compliance
Corporate Income tax
Income tax is a cornerstone of the taxation in Zambia. Levied on both individuals and
businesses, the corporate tax rate generally stands at 30%. However, different rates may apply
depending on the industry and other factors.
The standard corporate tax rate for companies is 30% on income earned from mineral
processing. Income tax is payable annually by the 21st June of each year.
PAYE
PAYE is a form of income tax deducted from employees’ salaries. Businesses are also
required to register for Pay As Y ou Earn (the “ PAYE”) where they decide to hire employees.
This is a method of deducting tax from employees’ emoluments in proportion to what they earn.
Under this system, the employer is required to calculate tax payable by every employee, deduct
tax due from the emoluments and remit tax deducted to ZRA. It is noteworthy that in 2023 the
exemption threshold for PAYE was increased from ZMW4,500 to ZMW4,800 and therefore
only employees above the prescribed threshold will be required to remit PAYE.
VAT
V A T is a consumption tax added to the value of goods and services at each stage of
production or distribution. The standard rate is 16% as prescribed by the V alue Added Tax.
Businesses are required to register for V A T if their annual taxable turnover exceeds ZMW
800,000. Failure to register can result in penalties.
WITHHOLDING TAX
Withholding tax (WHT) is a system where the payer of certain types of income is required
to deduct tax at the source and remit it to the Zambia Revenue Authority on behalf of the
recipient. It applies to both resident and non-resident companies and individuals, although the
rates and the finality of the tax may differ.
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The following are general WHT rates applicable to various payments made by companies
(residents only):
Category of Payment Rate on Payment to Zambian Resident
(%)
Dividends /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 (0% for mining companies)
Interest /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 (0% in some cases)
Management or Consultancy Fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118 15
Royalties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815
Commodity Royalty /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815
Reinsurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180
Commissions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815
Rent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 (final tax)
NAPSA
The NAPSA Act prescribes that an employer in Zambia must be registered with NAPSA.
All employers are required to register their employees with the National Pensions Scheme
Authority (the “ NAPSA ”). NAPSA requires that social security contributions be made to
NAPSA by both the employee and the employer, at the rate of 5 per cent of the gross
emoluments, each. The employer is required to remit the total amount to NAPSA on a monthly
basis, accompanied by a monthly return. The contributions are applicable to both foreign and
local staff.
NHIMA
The NHIMA Act requires employers to register all employees and to pay to the National
Health Insurance Management Authority, 2 per cent of an employee’s basic salary at the end
of each month.
Laws and Regulations Relating to Employment
Employment regulation
Employer-employee relationships in Zambia are regulated by the Employment Code Act
No. 3 of 2019 (the “ Employment Code ”).
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Expatriate employees
The Employment Code prescribes that an employer shall, in filling an employment
vacancy, employ a citizen except where a citizen does not posses the skills required for that job
or a citizen does not apply for that job. The laws governing the entry into Zambia and departure
from Zambia are contained under the Immigration and Deportation Act No 18 of 2010 as well
as the Immigration and Deportation (Amendment) Act No 19 of 2016 (the “ Immigration
Act”). A foreigner will need both a work permit and residence permit.
Health and safety of employees
The Factories Act, (Chapter 441 of the Laws of Zambia) (the “ Factories Act ”) and the
Occupational Health and Safety Act No. 36 of 2010 and provide laws on the health, welfare and
safety of persons employed in factories, offices and shops and related matters.
Under the Factories Act, a factory is required to be registered with the Labour
Commissioner. A certificate is issued once the commissioner is satisfied that the regulations
have been met. It is also required to notify the chief inspector of the Factories Inspectorate of
any accidents or deaths, ensure that the factory is properly ventilated, clean, well-lit and
generally safe for its employees.
The local government Administration (Fire Services) Regulations of 1991, SI No. 121 of
1991 and the City Council under the oversight of the Local Government Act (Chapter 281 of
the Laws of Zambia) are responsible for the issuance of the fire certificate. A company is
required to apply for a fire certificate to be granted pursuant to an inspection on the premises
by a representative from the city council. The certificate is to be displayed at the business
premises.
Laws and Regulations Relating to Land
Under section 3(1) of the Lands Act, all land in Zambia is vested in the President to be
held by him “in perpetuity for and on behalf of the people of Zambia”. The rationale behind
this is that land is to be administered and controlled by the President “for the use, or common
benefit, direct or indirect, of the people of Zambia”.
Ownership of land in Zambia is governed by the provisions of the Lands Act Cap 184 of
the Laws of Zambia. Land can be held under customary tenure or leasehold tenure (on statutory
lease of either 99 years or 100 years from 1975).
Absolute ownership of land in Zambia is evidenced by virtue of being in possession of
a Certificate of Title indicating the name of the holder of the lease from the President of
Zambia.
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RELEV ANT LA WS AND REGULATIONS TO OUR BUSINESS IN SINGAPORE
We operate trading business in Singapore and our business in Singapore consists of
trading of copper cathodes and non-ferrous metal products. Below is an overview of the laws
and regulations materially relevant to our business in Singapore.
Commodity Trading Act 1992
The Commodity Trading Act 1992 of Singapore (“ CTA”) is the main legislation
governing spot commodity trading in Singapore. The CTA aims to promote bona fide business
activities involving spot commodity trading as well as protects investors and the public against
“bucket shops” in spot commodity trading. Under the CTA, “spot commodity trading” means
the purchase or sale of a commodity at its current market or spot price, where it is intended that
such transaction results in the physical delivery of the commodity.
Before a person or entity may engage in spot commodity trading unless and until the
person or entity obtains a licence for spot commodity trading. However, a person or entity is
exempted from needing a licence for spot commodity trading if the person or entity carries on
spot commodity trading on the person’s or entity’s own account and does not solicit any funds
from any member of the public or any section of the public in connection with the carrying out
of any spot commodity trading.
As of the Latest Practicable Date, our business in Singapore is exempted from needing a
licence for spot commodity trading pursuant to section 14A and the Schedule of the CTA.
Employment Act 1968
The Employment Act 1968 of Singapore (the “ Employment Act ”) is the main legislation
governing employment in Singapore. The Employment Act is administered by the Ministry of
Manpower of Singapore (the “ MOM”) and sets out the basic terms and conditions of
employment and responsibility of employers as well as employees.
Part IV of the Employment Act contains provisions relating to, inter alia , working hours,
overtime, rest days, holidays, annual leave, payment of retrenchment benefit, priority of
retirement benefit, annual wage supplement and other conditions of work or service and apply
to: (a) workmen earning a salary not exceeding S$4,500 a month; and (b) employees (excluding
workmen) earning a salary not exceeding S$2,600 a month. Part X of the Employment Act
provides that paid public holidays and sick leave apply to all employees who are covered by
the Employment Act regardless of salary levels.
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Following the amendments to the Employment Act in effect from 1 April 2016, all
employers must issue key employment terms (the “ KETs”) in writing to employees covered
under the Employment Act. Such employees include employees who: (a) enter into a contract
of service with the company on or after 1 April 2016; (b) are covered by the Employment Act;
and (c) are employed for a continuous period of 14 days or more. KETs include, inter alia , full
names of the employer and employees, job title, duties and responsibilities, start date of
employment, duration of employment, basic salary, fixed allowances, fixed deductions,
overtime pay, leave, medical benefits, probation period and notice period. KETs which are not
applicable to specific employees may be excluded from their contracts.
Employment of Foreign Manpower Act 1990
The Employment of Foreign Manpower Act 1990 of Singapore (the “ EFMA ”) governs the
employment of foreign employees in Singapore. Under Section 5(1) of the EFMA, no person
shall employ a foreign employee unless the foreign employee has a valid work pass issued by
the MOM. Any person who contravenes Section 5(1) of the EFMA, shall be guilty of an offence
and shall (a) be liable on conviction to a fine of not less than S$5,000 and not more than
S$30,000 or to imprisonment for a term not exceeding 12 months or to both; and (b) on a
second or subsequent conviction — (i) in the case of an individual, be punished with a fine of
not less than S$10,000 and not more than S$30,000 and with imprisonment for a term of not
less than one month and not more than 12 months; or (ii) in any other case, be punished with
a fine of not less than S$20,000 and not more than S$60,000.
An employer of foreign workers is also subject to, inter alia , the Employment Act and the
Immigration Act 1959 of Singapore.
Workplace Safety and Health Act 2006
The Workplace Safety and Health Act 2006 of Singapore (the “ WSHA ”) and the
regulations thereunder govern the safety, health and welfare of persons at work in workplaces.
Among other things, the WSHA imposes a duty on employers to take, so far as it is reasonably
practicable, such measures as are necessary to ensure the safety and health of their employees
at work. These measures pursuant to section 12 of WSHA include:
 providing and maintaining for those persons a work environment which is safe,
without risk to health, and adequate as regards facilities and arrangements for their
welfare at work;
 ensuring that adequate safety measures are taken in respect of any machinery,
equipment, plant, article or process used by those persons;
 ensuring that those persons are not exposed to hazards arising out of the
arrangement, disposal, manipulation, organisation, processing, storage, transport,
working or use of things in their workplace, or near their workplace and under the
control of the employer;
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 developing and implementing procedures for dealing with emergencies that may
arise while those persons are at work; and
 ensuring that those persons at work have adequate instruction, information, training
and supervision as is necessary for them to perform their work.
Personal Data Protection Act 2012
The Personal Data Protection Act 2012 of Singapore (the “ PDPA”) governs the
collection, use and disclosure of personal data by organisations. For the purposes of the PDPA,
“personal data” refers to data, whether true or not, about an individual who can be identified
using that data, or from that data and other information to which the organisation has or is
likely to have access to.
The PDPA imposes the following obligations on organisations collecting, using or
disclosing personal data of individuals (the “ relevant persons ”) are summarised as follows: (i)
obligations of obtaining consent, giving notification and access and correction rights to the
relevant persons, purpose limitation in respect of use of, and retention limitation and transfer
limitation in respect of personal data collected, ensuring accuracy and protection of data
collected and openness in making information available on its privacy policies and procedures
relating to protection of personal data.
Laws and Regulations Relating to Taxation
Corporate Income Tax
Corporate taxpayers (both resident and non-resident) are subject to Singapore income tax
on income accrued in or derived from Singapore (i.e. Singapore-sourced) and, subject to
certain exceptions, on income received in Singapore from outside Singapore (i.e. foreign-
sourced income received or deemed received in Singapore) unless specifically exempt from
income tax.
Foreign-sourced income in the form of branch profits, dividends and service fee income
received or deemed received in Singapore by a Singapore tax resident company on or after 1
June 2003 are exempted from Singapore tax provided that the following qualifying conditions
are met:
 such income is subject to tax of a similar character to income tax under the law of
the territory from which such income is received;
 at the time the income is received in Singapore, the highest rate of tax of a similar
character to income tax (by whatever name called) levied under the law of the
territory from which the income is received is at least 15.0%; and
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 the Comptroller of Income Tax is satisfied that the tax exemption would be
beneficial to the recipient of the specified foreign income.
The prevailing corporate income tax rate in Singapore is 17.0%, which applies to both
local and foreign companies. With effect from the year of assessment 2020, 75% of the first
S$10,000, and 50% of the next S$190,000 of a company’s chargeable income (otherwise
subject to normal taxation) is exempt from corporate tax. The remaining chargeable income
that exceeds S$200,000 will be fully taxable at the prevailing corporate tax rate.
For the year of assessment 2025, a corporate income tax rebate of 50% of the corporate
tax payable will be granted to all taxpaying companies, whether tax resident or not, with a
rebate cash grant of S$2000 where applicable. As such, the total maximum benefits of
corporate income tax rebate and rebate cash grant that a company may receive is S$40,000.
Other Taxes
Singapore does not currently impose withholding tax on dividends paid to resident or
non-resident shareholders.
There is also no tax on capital gains in Singapore. Thus, any gains derived from the
disposal of our Shares acquired for long-term investment will not be taxable in Singapore.
Foreign shareholders are advised to consult their own tax advisers to take into account the
tax laws of their respective home countries/countries of residence and the applicability of any
double taxation agreement which their country of residence may have with Singapore.
RELEV ANT LA WS AND REGULATIONS TO OUR BUSINESS IN PERU
We operate trading business in Peru and our business in Peru consists of trading of
non-ferrous metal products. Below is an overview of the laws and regulations materially
relevant to our business in Peru.
General Regulatory Framework
The mining industry in Peru is mainly governed by the Single Ordered Text of the General
Mining Law approved by Supreme Decree N° 014-92-EM (hereinafter, the “TUO of the
LGM”), which establishes the legal framework applicable to the mining activities of
prospecting, exploration, exploitation, general work, beneficiation, commercialization and
mining transportation.
In this regard, it is important to point out that the exercise of mining activities regulated
by the TUO of the LGM, except for exploration, prospecting and commercialization, is carried
out exclusively under the concession system, which is accessed under procedures that are of
public order.
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Regarding the commercialization of minerals, the TUO of the LGM prescribes the
following rules for its development:
i. The commercialization of mineral products is free, both internally and externally,
and this activity is not subject to the concession system.
ii. The buyer is obliged to verify the origin of the mineral substances.
iii. The commercialization of raw or semi-processed gold, as well as gold obtained as
a direct product of a mining or metallurgical process is free. The purchase, sale,
possession, export and import of such products is totally free and without any
restriction whatsoever.
Likewise, although the mining activity of commercialization of minerals is free, the
verification of the origin of mineral substances is a legal obligation in force in the TUO of the
LGM, and has been complemented in 2012, through the provisions of Legislative Decree No.
1107 and its Regulations.
On the other hand, Ministerial Resolution N° 249-2012-MEM-DM created the Special
Registry of Gold Traders and Processors (REPCO), in which all natural or legal persons
engaged in the purchase and sale and/or refining of gold must be registered and are required
to keep a detailed record of their suppliers and the destination of the metallic gold.
Consequently, considering that the Peruvian Subsidiary is engaged in the purchase and sale of
gold, it is duly registered in the REPCO.
The regulatory framework for the operation of companies incorporated in Perú is set in
Law No. 26887 — General Corporations Law, which regulates the requirements, standards and
obligations of such corporations. The Peruvian Subsidiary is duly incorporated, validly existing
and in good standing under the laws and regulations enforced in Peru and it is duly registered
before the Peruvian Superintendency of Public Registries and complies with the applicable
rules detailed in the Unified Text of the Peruvian Public Registry Regulations, approved by
Resolution SUNARP No. 126-2012-SUNARP/SN and the Registry of Corporations
Regulations approved by Resolution SUNARP No. 200-2001-SUNARP-SN.
The Peruvian Subsidiary complies with applicable business licensing requirements for
entities engaged in the marketing and export of mineral products. It does not engage in
activities that require environmental permits, mining concessions, mine closure plans, or
technical operation reports typically associated with mining operators or concession holders.
Due to the fact that its corporate purpose is the commercialization of minerals as precious
metals (gold, silver, etc.) and mineral ores, the Peruvian Subsidiary must comply with Peruvian
Laws related to anti-money laundering and report to the Financial Intelligence Unit (Unidad de
Inteligencia Financiera — UIF) of the SBS (the Peruvian regulatory authority). Resolution SBS
No. 789-2018, amended by Resolution SBS No. 02351-2023, requires that companies which
trade with precious minerals must implement a prevention system against money-laundering
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and terrorism finance (SPLAFT), appoint a Compliance Officer and report suspicious
operations. The UIF operates under Law No. 27693, and it is regulated by Supreme Decree
No. 020-2017-JUS, which main objective is to prevent and detect activities related to
money-laundering and terrorism finance. Therefore, the Peruvian Subsidiary is under the scope
of the supervision of the UIF provided that the high value and risk of operating with precious
minerals and mineral ores may be vulnerable to illegal practices.
The Peruvian Subsidiary has appointed a Compliance Officer, maintains a prevention
system against money-laundering and terrorism finance, reports every year to the UIF and has
not listed unusual or suspicious operations.
Considering that the corporate purpose of the Peruvian Subsidiary is the
commercialization of minerals, it is subject to the general legal framework applicable to
environmental matters, such as Law No. 28611, General Environmental Law, as well as the
legal framework applicable to occupational health and safety, Law No. 29783, Occupational
Health and Safety Law, in order to promote a culture of occupational risk prevention.
Operational Licenses
The Peruvian Subsidiary does not own any real property in Peru. It leases commercial
office spaces located in the cities of Lima, Arequipa, and Trujillo. Each of these leased
premises complies with local regulatory requirements, including having valid operational
licenses (Licencia de Funcionamiento) and Safety Technical Inspections for Buildings
(Certificado de Inspección Técnica de Seguridad en Edificaciones — ITSE), as required under
Peruvian municipal and civil defense regulations
3. These permits confirm that the offices meet
the health, safety, and zoning standards necessary for lawful commercial occupancy.
Labor and Employment Compliance
The Peruvian Subsidiary is subject to the Peruvian Labor Law framework, principally
governed by the Consolidated Text of Legislative Decree No. 728 — the Labor Productivity
and Competitiveness Law approved by Supreme Decree No. 003-97-TR as well as the Law on
Safety and Health at Work (Law No. 29783). The Peruvian Subsidiary maintains formal written
employment contracts for its personnel, provides all mandatory employee benefits (including
health insurance, pensions, vacation, and compensation for time of service — CTS), and
complies with workplace safety obligations. Furthermore, the Peruvian Subsidiary has less
than 20 employees, so it not obligated to create a Committee of Security and Health in the
workplace, it just has to appoint a supervisor of Security and Health in the workplace.
3 This item is subject to further variations according to the review of the Company’s statements and the
information requested in the Request List.
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Tax and Regulatory Compliance
The Peruvian Subsidiary is duly registered with the Peruvian Tax Authority (SUNA T) and
complies with its formal tax obligations, including monthly and annual income tax
declarations, value-added tax (IGV) reporting, withholding obligations for employee-related
payments, the obligation to maintain accounting and/or tax books and records in accordance
with the Texto Único Ordenado de la Ley del Impuesto a la Renta, approved by Supreme
Decree No. 179-2004-EF and the Reglamento de la Ley del Impuesto a la Renta, approved by
Supreme Decree No. 122-94-EF, as well as the submission of all the informative
communications to SUNA T according to such regulations.
Environmental and Sectoral Regulation
As the Peruvian subsidiary is engaged in the commercialization of minerals, it is not
subject to environmental permits or mining occupational health and safety supervision by the
Ministry of Energy and Mines (MINEM) or the relevant regional government. Its business
activities, consisting solely of mineral trading, are deemed low-impact from an environmental
perspective under Peruvian law.
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OVERVIEW
We are a leading manufacturer of high-quality copper cathode, with a strong presence in
DR Congo and Zambia. Our history can be traced back to 2010, when our Company was
established in the PRC by Mr. Y uan, our ultimate Controlling Shareholder, executive Director,
chief executive officer, general manager and chairman of our Board. Being aware since early
days that only by engaging in the core and more influential links of the non-ferrous metals
industrial chain can we be better equipped to face and overcome challenges in the industry such
as market cycles, our Company had been founded with the aspiration of eventually and
ultimately engaging in manufacturing within the non-ferrous metals industry. In the early
stages of our business development, our Group primarily engaged in the trading of non-ferrous
metals. While being engaged in trading, we proactively seized opportunities to accumulate
industry experience, including knowledge in the needs of downstream customers, developing
price discovery abilities and the establishing of business connections. In order to expand our
business coverage leveraging Africa’s extensive copper reserves, our Group began expanding
into localized processing and/or smelting of copper in Zambia and DR Congo in 2017 and
2023, respectively. Such expansion was preceded by a thorough and diligent preparation
process which commenced in 2016 for Zambia and 2018 for DR Congo, spanning over, among
others, areas of legal and regulatory preparation (including the application of relevant licenses
and certificates and the incorporation of local subsidiaries); risk assessment and the drawing
up of risk management measures; the securing of reliable suppliers; and the employment of a
team of experienced and competent staff in the PRC, Zambia and DR Congo. Over time, our
Group has evolved into its current business model, which integrates mineral processing,
smelting and the trading of non-ferrous metals.
KEY BUSINESS DEVELOPMENT MILESTONES
The following sets forth of our Group’s key business development milestones.
Y ear Milestone events
2010 /H1118/H1118/H1118/H1118/H1118Our Company was established in the PRC and commenced the business of
non-ferrous metals.
2016 /H1118/H1118/H1118/H1118/H1118Our first overseas subsidiary, Rong Xing Investments, was incorporated in
Zambia.
2017 /H1118/H1118/H1118/H1118/H1118Our Shares were quoted on the NEEQ and were subsequently selected as
one of the quoted companies in the innovation tier ( ௴อᄴ) of the NEEQ.
We achieved our first overseas production milestone by commencing
operation of our copper concentrate flotation plant in Zambia.
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Y ear Milestone events
2018 /H1118/H1118/H1118/H1118/H1118We launched our international trading platform in Singapore by
incorporating a wholly-owned subsidiary in Singapore to expand our
overseas business and sell our products to overseas third-party customers.
We marked our business footprints in DR Congo by incorporating Jinxun
DR Congo to develop local copper and cobalt resources.
2019 /H1118/H1118/H1118/H1118/H1118Our first copper smelter, namely Zambia copper smelter I, commenced
production.
2020 /H1118/H1118/H1118/H1118/H1118We expanded our business presence to Peru through the trading of
non-ferrous metal products.
2021 /H1118/H1118/H1118/H1118/H1118We commenced construction of our Zambia copper smelter II.
2022 /H1118/H1118/H1118/H1118/H1118We commenced construction of our DR Congo copper smelter I and a
cobalt production line.
Our Zambia copper smelter II commenced production.
We established our wholly-owned subsidiary, Jinxun Anhui, preparing for
our construction of our cobalt processing plant.
We received an AAA credit rating from the China Nonferrous Metals
Association.
2023 /H1118/H1118/H1118/H1118/H1118Our DR Congo copper smelter I commenced operation.
2024 /H1118/H1118/H1118/H1118/H1118Our DR Congo copper smelter I achieved an actual annual production
volume of over 15,000 tons of copper cathodes.
Our cobalt production line in DR Congo commenced production of cobalt
hydroxide products.
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OUR CORPORATE DEVELOPMENTS
Our principal operating subsidiaries
We have carried out our business through our subsidiaries during the Track Record Period
and up to the Latest Practicable Date. Our principal operating subsidiaries comprise entities
that have made a material contribution to our financial results during the Track Record Period
and/or are otherwise material to our business operations. The table below sets out the names,
principal business activities and the place and date of incorporation or establishment of each
of our principal operating subsidiaries are set out below:
Name of company
Place of
incorporation or
establishment Principal business activities
Date of incorporation
or establishment
Jinxun Singapore /H1118/H1118/H1118/H1118Singapore Trading of copper
cathodes and
non-ferrous metal
products
April 25, 2018
Jinxun DR Congo /H1118/H1118/H1118/H1118DR Congo Copper smelting August 13, 2018
Rong Xing
Investments /H1118/H1118/H1118/H1118/H1118/H1118
Zambia Copper smelting August 16, 2016
Jinxun Peru /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Peru Trading of non-ferrous
metal products
October 14, 2020
Tibet Huiyi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC Trading of non-ferrous
metals
February 21, 2017
There have been no subsequent changes in the shareholding of our principal operating
subsidiaries following their incorporation or establishment. Our Company did not conduct any
major acquisition or disposal during the Track Record Period and up to the Latest Practicable
Date.
Our Company
Establishment of our Company and initial shareholding changes
Our Company was established in Y unnan, the PRC, as a limited liability company on
January 21, 2010 with an initial registered capital of RMB1,000,000, which was fully paid in
cash. At the time of its establishment, our Company was owned as to 40% by Mr. Y uan, our
Controlling Shareholder, and 60% by Mr. Wang Jiehua ( ˮ௫ശ), an Independent Third Party.
Our Company was principally engaged in the business of non-ferrous metals since its
establishment and during the early stage of our business development.
HISTORY AND CORPORATE STRUCTURE
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On March 25, 2010, Mr. Wang Jiehua transferred 60% of our registered capital to Mr. Y u
Y abu (Яԭɥ), an Independent Third Party, at a consideration of RMB600,000 for the reason
of focusing on other personal investment. The consideration was determined based on the
paid-up registered capital of our Company and fully settled. Mr. Wang Jiehua ceased to be our
Shareholder upon completion of such transfer.
On March 14, 2011, due to the change of personal expectation on business prospect and
personal investment focus, Mr. Y u Y abu transferred 50% of our registered capital to Mr. Y uan
and 10% of our registered capital to Mr. Chen Weijun (ࠏat a consideration of
RMB500,000 and RMB100,000, respectively. The consideration was determined based on the
paid-up registered capital of our Company and fully settled. Mr. Chen Weijun was our
employee at the time of such transfer acting as Mr. Y uan’s nominee to hold our registered
capital on Mr. Y uan’s behalf. Such share entrustment was ceased 2016. At the material time,
a company established in the PRC with one shareholder was prohibited by the PRC Company
Law from establishing subsidiaries. The nominee arrangement was put in place to enable our
Company to establish wholly-owned subsidiaries for our business expansion contemplated at
the time. Upon completion of such share transfers, our Company was owned as to 90% by Mr.
Y uan and 10% by Mr. Chen Weijun.
Subsequent to a series of capital increases during the period from March 2015 to April
2016, our registered capital was increased to RMB28,000,000. The increased share capital was
contributed by Mr. Y uan and fully paid. Upon completion of such capital increases, our
Company was owned as to 99.64% by Mr. Y uan and 0.36% by Mr. Chen Weijun.
Share Transfers involving our share incentive platform
Heli Investment was established as our share incentive platform to award our employees
for their contributions to our Group and to incentivize them to further promote our
development. See “— Share Incentive Platform” in the section for details of Heli Investment.
For the purpose of implementing our employee share incentive plan, optimizing our
shareholding structure as well as releasing the previous share entrustment arrangement, on
April 28, 2016, Mr. Chen Weijun transferred 0.36% of our registered capital to Heli Investment
at a consideration of RMB100,000. On the same day, Mr. Y uan transferred 4.64% of the equity
interest in our Company to Heli Investment at a consideration of RMB1,300,000. The
consideration of such transfers was determined with reference to the paid up registered capital
of our Company at the time of such transfers and was fully settled on July 11, 2016. Upon
completion of above transfers, our Company was owned as to 95% by Mr. Y uan and 5% by Heli
Investment.
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Quotation on the NEEQ
To improve our corporate image and governance supporting our business expansion as
well as to gain access to the domestic equity capital market preparing for future business
expansion, our Company planned for a potential quotation of our Shares on the NEEQ. On July
15, 2016, in preparation for the quotation of our Shares on the NEEQ, our Company was
converted from a limited liability company into a joint stock company with limited liability.
Our registered capital was subsequently increased to RMB30,000,000, divided into 30,000,000
Shares with a nominal value of RMB1.00 each, which was fully paid as of August 18, 2016.
Upon completion of this capital increase, our Company was owned as to approximately 89%
by Mr. Y uan and 11% by Heli Investment. On January 23, 2017, we received approval for
quoting our Shares on the NEEQ. On February 13, 2017, our Shares were quoted on the NEEQ
under the stock short name “΅” (stock code: 870844).
Our Directors confirm, and our PRC Legal Advisors are also of the view that, from the
date on which our Shares been quoted on the NEEQ and up to the Latest Practicable Date, (i)
our Company had been operating in compliance with the rules and regulations of the NEEQ in
all material respects; and (ii) our Company had not been subject to any material administrative
penalty or measures imposed by NEEQ or other competent securities regulatory authorities.
Based on the independent due diligence conducted by the Sole Sponsor, nothing material
has come to the Sole Sponsor’s attention that would cause it to disagree with the Directors’
confirmation with regard to the compliance records of the Company on the NEEQ.
Given our Directors believe that being quoted on NEEQ and listed on the Hong Kong
Stock Exchange, while meeting the corporate governance requirements of both venues, will
enhance market recognition and benefit our market expansion, and improve our corporate
profile with business presence in multiple jurisdictions presence, our Company expects to
remain listed and quoted on the NEEQ following the Listing.
Subsequent capital increases and Share transfers
Following a series of increases in our registered capital during the period from April 2017
to June 2021, our registered capital was increased to RMB68,629,022, divided into 68,629,022
Shares with a nominal value of RMB1.00 each as of June 10, 2021, which was fully paid.
HISTORY AND CORPORATE STRUCTURE
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On May 31, 2022, our registered capital was further increased to RMB102,943,533,
divided into 102,943,533 Shares with a nominal value of RMB1.00 each, which was fully paid.
Upon completion of such capital increases, the shareholding structure of our Company was as
follows:
Name of the Shareholder Number of Shares
Approximate
percentage of
shareholding
Mr. Y uan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,877,502 91.19%
Heli Investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,973,467 8.72%
Other Non-H Shareholders Note /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111892,564 0.09%
Total: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,943,533 100%
Note: Other Non-H Shareholders included 47 Independent Third Parties and became our Shareholders by their
respective subscription and/or acquisition through the NEEQ.
On December 27, 2022, Chuanghe Xincai subscribed for 7,353,110 Shares, representing
approximately 6.67% of our total issued Shares at a consideration of RMB50,000,000, which
was determined after arm’s length negotiations and with reference to the net assets attributable
to our Company as at December 31, 2021 taking into account previous equity distribution and
the growth prospect of our Company and was fully settled on December 22, 2022. Chuanghe
Xincai, an Independent Third Party prior to the share subscription, is a limited partnership
established in the PRC and principally engaged in equity investment activities.
After completion of the above share subscription, the shareholding structure of our
Company was as follows:
Name of the Shareholder Number of Shares
Approximate
percentage of
shareholding
Mr. Y uan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,877,502 85.11%
Heli Investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,973,467 8.14%
Chuanghe Xincai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,353,110 6.67%
Other Non-H Shareholders Note /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111892,564 0.08%
Total: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,296,643 100%
Note: Other Non-H Shareholders included 32 Independent Third Parties and became our Shareholders by their
respective subscription and/or transfer through the NEEQ.
Due to changes in its own investment arrangements and given that certain divestment
conditions as agreed between Chuanghe Xincai and Mr. Y uan have satisfied on July 29, 2024,
Chuanghe Xincai entered into a share transfer agreement with Mr. Y uan, pursuant to which
Chuanghe Xincai transferred approximately 6.67% of our issued Shares to Mr. Y uan at a
HISTORY AND CORPORATE STRUCTURE
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consideration of RMB56,269,726.95. The consideration was determined based on the net profit
attributable to our Company as of December 31, 2023 taking into account the investment
period and dividends distributed to Chuanghe Xincai after arm’s length negotiations between
the relevant parties and were fully settled on September 13, 2024.
Upon completion of such share transfer and change of shareholder registration on
February 12, 2025, Chuanghe Xincai ceased to be our Shareholder and the shareholding of our
Company is set forth below:
Name of the Shareholder Number of Shares
Approximate
percentage of
shareholding
Mr. Y uan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101,230,612 91.78%
Heli Investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,973,467 8.14%
Other Non-H Shareholders Note /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111892,564 0.08%
Total: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,296,643 100%
Note: Other Non-H Shareholders included 17 individuals who were Independent Third Parties and became our
Shareholders by their respective subscription and/or transfer through the NEEQ.
Share Incentive Platform
For the purpose of awarding our employees for their contributions to our Group and to
incentivize them to further promote our development, Heli Investment was established in the
PRC on April 18, 2016 as our share incentive platform to hold equity interests in our Company.
The general partner of Heli Investment is Mr. Y uan, who held 10% of the partnership interest
in Heli Investment and manages the daily affairs and exercises the voting rights for and on
behalf of Heli Investment as our Shareholder pursuant to its partnership agreement. The
remaining 90% interest in Heli Investment is owned by 19 limited partners, being Ms. Y uan
Mei, our executive Director and Mr. Y uan’s sister, who owns approximately 69.32%, Mr. Y ang
Y ongchang, our executive Director, who owns approximately 4.02%, Mr. Chen Weijun, a
director of Jinxun Anhui, who owns approximately 0.23% and 15 existing employees and one
former employee who collectively owns approximately 16.43% as of the Latest Practicable
Date. As of the Latest Practicable Date, there was no outstanding share option granted by our
Company.
Reasons for the Listing on the Hong Kong Stock Exchange
Our Shares are currently quoted on the NEEQ. We are seeking a listing of our H Shares
on the Hong Kong Stock Exchange in order to utilize the overseas financing platform to
enhance our international profile, enhance our market recognition, attract equity investment
through a recognized international stock exchange, and ultimately to maximize Shareholder
value and support our capital structure optimization. See “Future Plans and Use of Proceeds”
and “Business” for further details.
HISTORY AND CORPORATE STRUCTURE
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Our Directors confirm that we have not experienced any material non-compliance of the
rules and requirements of NEEQ during the Track Record Period and up to the Latest
Practicable Date.
We had not been subject to administrative penalty, administrative supervision measures,
or regulatory measures by the NEEQ or other competent securities regulatory authorities
during the Track Record Period and up to the Latest Practicable Date.
Based on the independent due diligence conducted by the Sole Sponsor, nothing has come
to the Sole Sponsor’s attention that would cause it to disagree with the Directors’ confirmation
with regard to the compliance records of the Company on the NEEQ.
Share Transfer Restrictions and Lock-up Undertakings by our Shareholders
In accordance with the PRC Company Law, the shares issued prior to any public offering
of shares by a company cannot be transferred within one year from the date on which such are
listed publicly offered shares and traded on the relevant stock exchange. As such, the Shares
issued by our Company prior to the issue of H Shares pursuant to the Global Offering
(including the Shares held by our Controlling Shareholders) will be subject to such statutory
restriction on transfer within a period of one year from the Listing Date.
As our Shares are currently quoted on NEEQ, our Non-H Shareholders are subject to the
transfer restrictions in the Business Rules of the NEEQ System (for Trial Implementation)
(ۆ(༊Б)), which provide that our Shares directly or
indirectly held by the controlling shareholders and the actual controllers of our Company prior
to all issued Non-H Shares being quoted on the NEEQ shall be released from transfer
restrictions in three batches on each of the quoting date on the NEEQ and the first and second
anniversaries of the quoting date on the NEEQ, and the number of shares released from transfer
restrictions in each batch is one-third of the shares held before listing. As of the Latest
Practicable Date, all issued Non-H Shares quoted on the NEEQ that are held by the controlling
shareholder and the actual controller of our Company were released from transfer restrictions.
In addition, our Controlling Shareholders will, prior to the Listing, provide a non-disposal
undertaking pursuant to Rule 10.07 of the Listing Rules and the Hong Kong Underwriting
Agreement. See “Underwriting” for further details. In accordance with the PRC Company Law,
our Directors and the senior management members (as defined under the Articles of
Association) of our Company shall declare their shareholdings in our Company and any
changes in their shareholdings. Shares transferred by such Directors and the senior
management members of our Company per annum during their tenure shall not exceed 25% of
their total respective shareholdings in our Company. The Shares that the aforementioned
persons held in our Company cannot be transferred within one year from the date on which the
Shares are listed, nor within half a year after they leave their positions in our Company.
HISTORY AND CORPORATE STRUCTURE
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Public Float
Rule 19A.13A of the Listing Rules requires that there must be an open market in the
securities for which listing is sought. Where a new applicant is a PRC issuer with no other
listed shares at the time of listing, where the expected market value of the class of shares to
which H shares belong at the time of listing does not exceed HK$6,000,000,000, at least 25%
of the total number of shares in the class to which H shares belong must all times be held by
the public.
On the basis that no H Shares will be allocated under the Global Offering to any core
connected person of our Company or person which is not regarded as a member of the public
under Rule 8.24 of the Listing Rules, it is expected that an aggregate of 36,765,600 H Shares,
representing approximately 25.0% of the total number of issued Shares will be counted towards
the public after Listing, which will satisfy the public float requirement under Rule 19A.13A of
the Listing Rules.
Free Float
Rule 19A.13C of the Listing Rules requires 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. Where a new applicant is a PRC issuer with no other listed shares at the time of listing,
this will normally mean that the portion of H shares for which listing is sought that are held
by the public and not subject to any disposal restrictions (whether under contract, the Listing
Rules, applicable laws or otherwise), at the time of listing, must (a) represent at least 10% of
the total number of issued shares in the class to which H shares belong at the time of listing
(excluding treasury shares), with an expected market value at the time of listing of not less than
HK$50,000,000; or (b) have an expected market value at the time of listing of not less than
HK$600,000,000.
Save as an aggregate of 125,923,843 Shares, including (i) 110,296,643 Non-H Shares
(including the Non-H Shares held by our Controlling Shareholders), which will be subject to
such statutory restriction on transfer within a period of one year from the Listing Date in
accordance with the PRC Company Law, and (ii) 15,627,200 Offer Shares to be issued and
subscribed for by our Cornerstone Investors, representing approximately 85.63% of our total
issued Shares immediately after the completion of the Global Offering (assuming the
Over-allotment Option is not exercised), with an expected market capitalization of
approximately HK$3,777.7 million based on the Offer Price of HK$30 per H Share, no other
Shares will be subject to any disposal restrictions (whether under contract, the Listing Rules,
applicable laws or otherwise) at the time of the Listing.
Our Company will satisfy the free float requirement under Rule 19A.13C of the Listing
Rules.
HISTORY AND CORPORATE STRUCTURE
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CORPORATE STRUCTURE IMMEDIATELY BEFORE THE COMPLETION OF THE
GLOBAL OFFERING
The following chart sets forth the corporate structure of our Group immediately before the
completion of the Global Offering:
Rong Xing Investments
(Zambia)
Jinxun Shanghai(3)
(PRC)
Jinxun Singapore
(Singapore)
Tibet Huiyi
(PRC)
Jinxun DR Congo
(DR Congo)
Jinxun Anhui(4)
(PRC)
Jinxun Peru
(Peru)
Our Company
(PRC)
Heli Investment(1)
(PRC)
Other Non-H
Shareholders(2)
Mr. Yuan Limited partners(1)
10% 90%
91.78%
99% 100% 100% 100%
1%
99%1% 100% 99%
1%
8.14% 0.08%
Notes:
1. Limited partners of Heli Investment consist of Ms. Y uan Mei, our executive Director and Mr. Y uan’s sister,
who owns approximately 69.32%, Mr. Y ang Y ongchang, our executive Director, who owns approximately
4.02%, Mr. Chen Weijun, a director of Jinxun Anhui, who owns approximately 0.23% and 15 existing
employees and one former employee who collectively owns approximately 16.43% as of the Latest Practicable
Date. See “— Our Corporate Developments — Share Incentive Platform” in this section for further details.
2. Other Non-H Shareholders refers to 18 individual Shareholders, all of whom are Independent Third Parties,
as of the Latest Practicable Date.
3. Jinxun Shanghai is principally engaged in the trading of non-ferrous metals.
4. Jinxun Anhui has not yet commenced business operation and holds the cobalt processing plant that is currently
under construction.
HISTORY AND CORPORATE STRUCTURE
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CORPORATE STRUCTURE IMMEDIATELY AFTER THE COMPLETION OF THE
GLOBAL OFFERING
The following chart sets forth the corporate structure of our Group immediately after the
completion of the Global Offering (without taking into account any Shares which may be
issued pursuant to the exercise of the Over-allotment Option):
Rong Xing Investments
(Zambia)
Jinxun Shanghai(3)
(PRC)
Jinxun Singapore
(Singapore)
Tibet Huiyi
(PRC)
Jinxun DR Congo
(DR Congo)
Jinxun Anhui(4)
(PRC)
Jinxun Peru
(Peru)
Our Company
(PRC)
Heli Investment(1)
(PRC)
Other Non-H
Shareholders(2)
Mr. Yuan Limited partners(1)
10% 90%
68.84%
99% 100% 100% 100%
1%
99%1% 100% 99%
1%
Holders of H Shares
6.10% 0.06% 25%
Notes:
1 – 4. Please refer to the notes in “— Corporate Structure Immediately before the Global Offering” above.
PRC REGULATORY REQUIREMENTS
Compliance with PRC laws and regulations
Our PRC Legal Advisors has confirmed that the shareholding structure and changes in
respect of our Company in the PRC have been registered with local registration authorities of
the PRC in accordance with applicable PRC laws and regulations.
Regulations on Overseas Listing
On February 17, 2023, the CSRC published the new regulations for the filing-based
administration of overseas securities offering and listing by domestic companies, which came
into effect on March 31, 2023. The newly released set of regulations consists of 6 documents,
including the Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies () (the “Trial Overseas
Listing Measures”) and 5 supporting guidelines, along with the Notice of the Administrative
Arrangements for the Filing of Overseas Securities Offering and Listing by Domestic
Companies (). Pursuant to the Trial
Overseas Listing Measures, a PRC domestic company seeking offering and listing securities in
overseas market, either directly or indirectly as defined in the Overseas Listing Measures, shall
file with the CSRC and report relevant information.
HISTORY AND CORPORATE STRUCTURE
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Our PRC Legal Advisors is of the view that we are required to submit filings with the
CSRC within three business days after we submit the listing application for the Offering.
Our Company submitted the filing documents to the CSRC on June 3, 2025 concerning
the listing application and the Global Offering, in compliance with the Overseas Listing Trial
Measures as considered by our PRC Legal Advisors. The CSRC acknowledged the acceptance
of filing application on June 20, 2025. On November 26, 2025, the CSRC issued the
notification of completion of the filing procedures for the Listing and the Global Offering. As
advised by our PRC Legal Advisors, our Company has completed all necessary filings with the
CSRC for the Listing and the Global Offering.
HISTORY AND CORPORATE STRUCTURE
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OVERVIEW
We are a leading manufacturer of high-quality copper cathodes, with a strong presence in
DR Congo and Zambia. According to Frost & Sullivan, as of December 31, 2024, we ranked
fifth among PRC copper cathode producers by production volume in both DR Congo and
Zambia, and were the only PRC company to rank among the top five in both jurisdictions.
Specifically, we produced approximately 16.0 thousand tons and 5.0 thousand tons of copper
cathodes in DR Congo and Zambia in 2024. Among PRC non-state-owned enterprises, we
ranked third in DR Congo with a market share of 0.9% and first in Zambia with a market share
of 0.8% in terms of production volume in 2024. We have achieved: (i) a year-over-year revenue
growth rate of 161.9% and a return on equity of 43.8% in 2024; and (ii) a gross profit margin
of 20.8% in the same year. These rankings and achievements underscore our strong operational
capabilities, cost competitiveness, and growing international influence, particularly among
PRC producers expanding into resource-rich African markets.
We aspire to be recognized as a global premier supplier of non-ferrous metals and new
energy materials. Aligned with China’s national “Belt and Road” initiative and the “going
global” strategy, we remain committed to overseas expansion, particularly in resource-rich
regions in Africa and complementary market reserves in South America. Tailoring to this
strategic global footprint, our ambition is to establish a renowned international brand.
Our core business focuses on developing and supplying premium copper resources to
cater China’s substantial copper demand. Leveraging Africa’s rich copper reserves, we have
strategically expanded production capacity and achieved significant integration across the
industrial value chain. We have established advanced copper cathode smelting operations in
DR Congo and Zambia, considerably enhancing our economic efficiency and market position.
Furthermore, capitalizing on the natural coexistence of copper and cobalt within African ore
reserves, we are proactively developing downstream cobalt-related production, strategically
positioning ourselves in the rapidly growing new energy materials sector.
China continues to be the world’s largest copper consumer, with long-standing strong
demand stemming from extensive power grid development, construction, and home appliance
manufacturing. The copper market has historically experienced a supply-demand imbalance,
which has been further exacerbated in recent years by the rapid growth of wind and solar
power. The PRC government’s increasing investments in power generation, transmission, and
distribution infrastructure to support renewable energy expansion have further driven copper
consumption. Additionally, the copper intensity in electric vehicles is significantly higher than
in traditional vehicles, and with China being the world’s largest producer, consumer, and
exporter of new energy vehicles, copper demand has surged even further as a material with high
conductivity at a reasonable price. The rise of artificial intelligence (“ AI”) and other emerging
technologies has also fueled copper demand, with data centers and 5G base stations becoming
a new growth driver for the industry. As a result, global copper consumption has remained
strong, increasingly outpacing supply and widening the long-standing gap between demand and
production.
BUSINESS
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As a result of the proliferation of electric vehicles, energy storage systems and consumer
electronics, global refined cobalt consumption is projected to grow significantly, reaching
approximately 274.0 thousand tons by 2029, while global production is expected to be only
approximately 226.0 thousand tons. This projected shortfall highlights a persistent and
intensifying supply-demand imbalance, reinforcing cobalt’s role as a critical and strategic
resource in the ongoing global energy transition.
To capitalize on this widening market gap, we are significantly expanding our production
capacities. The second phase of our DR Congo copper project, designed to expand our total
annual copper cathode production capacity in DR Congo to approximately 55,000 tons, is
scheduled to commence and operations in 2026. Upon completion, complemented by technical
upgrades at existing facilities and our proven record of 100% production-to-sales efficiency,
we expect substantial enhancements in our financial performance, reinforcing our leading
market position.
Our Business Model
Our business model is built upon an integrated approach that encompasses copper ore
procurement, advanced hydrometallurgical processing, and the sale of high-purity copper
cathodes and copper concentrates. We leverage extensive industry experience, technological
innovation, and effective resource management to maintain our competitive edge. Our
operations begin with the procurement of copper ores, primarily sourced from reliable
suppliers in resource-rich regions such as DR Congo and Zambia. These copper ores include
oxide ores, sulfide ores, and oxide-sulfide mixed ores, which we process using advanced
hydrometallurgical techniques. This process is optimal for oxide-rich African ores and ensures
superior product quality and cost-efficiency, according to Frost & Sullivan.
The strength of our integrated model lies in our robust supply chain, underpinned by
broadly sustainable partnerships with reputable suppliers, enabling stable and high-quality raw
material procurement. Additionally, our strategic proximity to resource-rich mining regions
significantly reduces raw material procurement and logistical costs, reinforcing our cost
advantage.
Our advanced and strategically located production facilities are equipped with state-of-
the-art technology, including jaw crusher, semi-autogenous ball grinding mills, thickeners,
leaching agitation tank, extraction box, silicon controlled rectifier, and electrolysis tank,
facilitating efficient mineral processing, smelting, and trading operations. Complemented by
our robust infrastructure, including reliable power supply and advanced water treatment
systems, we consistently achieve efficient, high-quality, and cost-competitive production.
We market and sell our high-purity copper cathodes and our copper concentrates
primarily through our subsidiaries in Singapore and Zambia, respectively, strategically
targeting leading global metal trading firms and non-ferrous metal producers, with a particular
focus on the PRC market, the largest copper market in the world. Our ability to integrate
resource procurement, efficient production, and targeted sales has allowed us to effectively
respond to market demands, maintain operational stability, and sustain financial growth.
BUSINESS
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Our vertically integrated model, combining procurement, processing, technological
innovation, and effective risk management, positions us favorably to capture emerging market
opportunities and navigate fluctuations in global markets. This strategic integration ensures the
continued growth of our business and contributes to enhanced long-term shareholder value.
Our primary products include:
 Copper Cathodes : High-purity copper refined through electrolytic processes,
typically achieving purity levels equal to or exceeding 99.95%. These cathodes are
mainly produced at our copper smelters in DR Congo and Zambia, with total
production reaching 20,934.8 tons in 2024. With planned expansions, our annual
production capacity will significantly increase, positioning us among the top-tier
copper cathode producers in Africa.
 Copper Concentrates : Produced at our Zambia flotation plant, copper concentrates
typically contain 25% to 30% copper and serve as raw materials for electrolytic
copper production. In 2024, we had an output of 32.0 tons of copper concentrates,
primarily sold directly to non-ferrous metal producers in Zambia. As a part of our
strategic shift and our environmental protection initiative, we are in the process of
downsizing our copper concentrate production.
 Non-ferrous Metal Products : We source non-ferrous metal products, including
copper, silver, lead, and zinc, from suppliers in regions such as Peru and China,
selling these primarily through our subsidiaries in Singapore and China to
international metal trading companies and non-ferrous metal producers.
 Cobalt Hydroxide : During our copper smelting process, we produce cobalt(II)
hydroxide as a valuable by-product. Recognizing the rapid growth in global demand
for cobalt — driven by the new energy battery sector — we are constructing a
dedicated processing plant in Anhui Province, China. Scheduled to initiate trial
operations by the end of 2025 and officially commence operations in early 2026, this
plant will produce cobalt sulfates and cobalt chlorides, which are essential raw
materials for new-energy battery manufacturing.
For our trading business, we trade non-ferrous metal products, including copper, silver,
lead, and zinc, both domestically and to international metal trading companies and non-ferrous
metal producers. Our diversified product offerings, strong supplier relationships, and
innovative processing technologies support our resilience against market fluctuations, enabling
sustainable business growth and profitability. Throughout the Track Record Period, our
financial performance demonstrated robust growth, underscoring our strong production
management capabilities and favorable industry dynamics. Our revenue increased significantly
from RMB637.3 million in 2022 to RMB1,769.8 million in 2024, representing a CAGR of
66.6%. Our revenue further increased by 61.7% from RMB596.0 million in the six months of
June 30, 2024 to RMB963.8 million in the six months ended June 30, 2025. In the same
periods, our net profit grew significantly from RMB83.5 million in 2022 to RMB202.4 million
in 2024, reflecting a CAGR of around 55.7%. Our net profit further increased by 45.0% from
RMB93.1 million in the six months ended June 30, 2024 to RMB135.0 million in the six
months ended June 30, 2025. This remarkable financial growth is primarily attributable to
increased production capacity and corresponding sales volume, alongside favorable pricing of
copper cathode driven by heightened market demand. For more details, see “Financial
Information.”
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COMPETITIVE STRENGTHS
Strong Presence in Resource-rich Regions of Africa, particularly DR Congo and Zambia,
with a High Return on Investment
Since our inception, we have strategically grown our international operations, developing
substantial overseas production capabilities in regions rich in copper resources. Currently, our
annual processing capacity of copper cathode smelting capacity exceeding 31,000 tons per
year, primarily at our advanced facilities in DR Congo and Zambia. These operations capitalize
on favorable resource endowments and strategic geographic positioning, significantly
enhancing our cost competitiveness and market influence.
In particular, we were one of the largest PRC copper cathode producers in terms of
production volume in DR Congo and Zambia in 2024. According to Frost & Sullivan, as of
December 31, 2024, we ranked fifth among PRC copper cathode producers by production
volume in both DR Congo and Zambia, and were the only PRC company to rank among the
top five in both jurisdictions. Specifically, we produced approximately 16.0 thousand tons and
5.0 thousand tons of copper cathodes in DR Congo and Zambia in 2024, respectively. Among
PRC non-state-owned enterprises, we ranked third in DR Congo with a market share of 0.9%
and first in Zambia with a market share of 0.8% in terms of production volume in 2024. These
rankings underscore our strong operational capabilities, cost competitiveness, and growing
international influence, particularly among PRC producers expanding into resource-rich
African markets.
Over the years, we have systematically expanded and strengthened our business, creating
an integrated industrial chain that spans mineral processing, smelting, deep processing, and
trading. This integration reduces our reliance on external suppliers, optimizes resource
utilization, enhances production efficiency, and allows us to consistently maintain a high
profitability margin despite market fluctuations. Leveraging our integrated industrial chain, we
have achieved a high return on investment. Our revenue grew significantly from RMB637.3
million in 2022 to RMB1,769.8 million in 2024, representing a CAGR of 66.6% from 2022 to
2024. Additionally, we achieved a year-over-year revenue growth rate of 161.9% from 2022 to
2024, as well as a return on equity of 43.8% and a gross profit margin of 20.8% in 2024. This
exceptional performance reflects our robust integrated industrial chain, high operational
efficiency, disciplined cost control, and sustained investment in process innovation.
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Strategically Positioned Production Capacity Aligned with the “Going Global” Strategy in
Resource-Rich Regions
We strategically position our copper cathode production facilities in resource-rich regions
in Africa, particularly in DR Congo and Zambia. These regions offer abundant high-grade
copper ore reserves, allowing us to leverage substantial resource advantages and cost
efficiencies, significantly strengthening our competitive market position. China remains the
world’s largest copper consumer, accounting for over 60% of global copper demand,
underscoring the strategic importance of our African operations. Our presence in these key
locations directly aligns with China’s “Belt and Road” initiative and national “Going Global”
strategy, supporting our continued international expansion and growth.
In DR Congo, we operate an advanced hydrometallurgical smelter with a designed annual
production capacity of approximately 24,600 tons of copper cathode and 4,500 tons of
cobalt(II) hydroxide. In Zambia, our facilities include two hydrometallurgical smelters with a
combined annual production capacity of approximately 6,600 tons of copper cathode per year.
Additionally, we have established an indirect wholly-owned subsidiary in Peru, further
diversifying our operational footprint and enhancing our capability for global resource
integration.
By leveraging our geographical proximity to rich mineral deposits and our investments in
advanced smelting technologies, we effectively minimize raw material procurement and
transportation costs. This strategic positioning provides us with a distinct competitive
advantage and ensures our sustained growth and profitability.
Efficient Raw Material Utilization and Industry-Leading Technical Capabilities Drive
Cost Control
Our demonstrated industry-leading cost control capabilities are pivotal to differentiate us
from the competitors. With over a decade of specialized experience in hydrometallurgy, we
have established outstanding competitive advantages through advanced technological
innovation and process capabilities. Unlike traditional copper production enterprises, where
copper ore typically accounts for around two-thirds of total production costs, our specialized
ore processing techniques, combining innovative hydrometallurgical methods and advanced
processing technologies, underpinned our competitive edge in cost control measured by the
following:
 the designed grade of acid-soluble copper entering the mill in the first phase of the
project is nearly 2%, lower than the industry average of about 3% and represents a
promising cost advantage when purchasing raw materials;
 the leaching rate of acid-soluble copper in production process is approximately 98%,
surpassing the average rate of nearly 95% among traditional copper production
enterprises;
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 the unit consumption of sulfuric acid is 1.5 tons per ton of copper, which is superior
than that the average sulfuric consumption at nearly 3 tons per ton of copper among
traditional copper production enterprises;
 the power consumption is 2,650kwh per ton of copper, slightly better than that the
average power consumption of 2,700kwh per ton of copper among traditional copper
production enterprises;
 the total recovery rate of acid-soluble copper is roughly 94%, outperforming the
average recover rate of 90% reported by traditional copper production enterprises;
and
 the electrolytic current efficiency is approximately 95%, outperforming the rate of
around 92% among traditional copper production enterprises.
DR Congo and Zambia are widely recognized as a concentrated zone of high-grade copper
deposits, with copper grades generally exceeding 2.0%, far surpassing the global average
copper grade (ranging from approximately 0.4% to 0.6%). According to Frost & Sullivan, the
average copper metal content of ores in DR Congo ranges from approximately 2.0% to 3.5%,
while that of ores in Zambia ranges from approximately 0.8% to 2.5%. In addition to
high-grade sulfide ores, DR Congo and Zambia also possess a certain proportion of oxide ore
resources with relatively lower copper grades. Low-grade ores refer to ores with a copper metal
content below the average copper metal content of a specific region. In Zambia, low-grade ores
denote ores with copper metal content below 0.8%, while in DR Congo, low-grade ores denote
ores with copper metal content below 2.0%. These ores are characterized by ample reserves and
low purchase prices in DR Congo and Zambia. We have seized the advantage and are deeply
involved in the market development of low-grade copper-cobalt oxides, enabling us to
precisely source ore with copper grades between 1.5% and 2.0% to meet the equipment design
and production process requirements of our production facilities.
We excel in our ability to process and utilize different types and grades of ores. In
particular, our continuous commitment to technological innovation and process optimization
has significantly enhanced our capability to efficiently process low-grade copper ores, greatly
improving resource utilization. Leveraging our proprietary process optimization, auxiliary
material consumption control, and metal recovery enhancement technologies, we hold a
competitive edge in processing cost reduction compared to local hydrometallurgical copper
smelting enterprises. To further improve energy efficiency, we employ advanced leaching and
optimized electrolysis technologies, which enhance leaching kinetics and reduce power
consumption during copper extraction. Moreover, through refined management in production
line design, construction planning, and strategic equipment selection, we have successfully
reduced overall investment and associated depreciation costs. We implemented a lean process
layout and engineering design, fully leveraging the natural topographical elevation differences
of the project site to scientifically plan and select locations for core production workshops
(such as the extraction workshop and electrolysis workshop). This approach effectively utilizes
the principle of gravity flow for material and liquid transportation, significantly reducing
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equipment investment in the pumping system and subsequent operational power consumption,
thereby minimizing fixed asset investment and energy costs. We have also equipped our
processing facilities with equipment that are more streamlined, compact, and efficient than
those of our competitors. In selecting core equipment, we prioritized high-efficiency, compact
models. For critical production equipment, we proactively adopt technologically advanced
models with higher efficiency per unit output. For example, while industry-standard equipment
for equivalent processing capacity typically employs traditional thickeners with diameters up
to 30 meters, we utilize high-efficiency thickeners with a diameter of only 22 meters that can
deliver outstanding processing capacity and sedimentation efficiency within the same footprint.
This approach reduces equipment procurement costs and land requirements while laying the
foundation for an overall compact production layout. Consequently, it can reduce capital
investment while achieving equivalent production capacity, and realize lower unit energy
consumption and more resilient operating costs during long-term operation. Our lean personnel
structure further optimizes labor costs, enhancing operational flexibility and enabling swift
execution of management decisions, thus solidifying our cost competitiveness and supporting
sustainable business performance.
Our exceptional cost efficiency is demonstrated by our robust gross profit margin. In
particular, the gross profit margin for our trading of non-ferrous metal product business
reached 2.3%, 3.8%, 5.5% and 8.6% in 2022, 2023, 2024 and the six months ended June 30,
2025, respectively, substantially outperforming the average gross profit margins among our
comparable industry peers of 1.3%, 1.6%, 1.5%, and 2.7% in the same periods, respectively.
This was primarily because comparable industry peers typically source and sell non-ferrous
metal products within the PRC according to Frost & Sullivan, whereas we procure these
non-ferrous metal products directly from the source—namely Peru—through our Peruvian
subsidiary. This approach requires us to bear higher inventory risks, additional logistics time,
and longer working capital occupancy cycles in exchange for lower prices than those obtained
from suppliers in the PRC, thereby achieving a gross profit margin higher than comparable
industry peers. This superior margin clearly illustrates our strategic procurement, regional and
international layout strategies, and operational efficiency.
With global copper mine grades continuously declining since 2015, as noted by S&P
Global, our ability to process lower-grade ores at higher efficiency positions us distinctively
for future resource scenarios. Through stringent quality control and consistent technological
enhancements, we have also significantly increased our product quality, even when dealing
with low-grade ores. For instance, our state-of-the-art smelting facility in DR Congo has the
capability to produce 100% Class A high-purity copper, which is the highest grade of purity in
the industry standard. In contrast, majority of local producers in Zambia and DR Congo deliver
copper with purities ranging from 99.90% to 99.95% according to Frost & Sullivan, positioning
us prominently in the global non-ferrous metals industry. This differentiated technological
strength substantially boosts our market competitiveness and ensures our sustainable
development.
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Moreover, strategically designed for processing lower-grade ores, our DR Congo copper
smelter I has reached an ore recovery rate of 98%, significantly exceeding the industry average
in DR Congo. The ore recovery rate in production refers to the recovery rate of valuable metals,
which represents one of the most crucial technical and economic indicators of metallurgical
enterprises. The recovery rate calculated in our production is usually the total recovery rate,
which is demonstrated in the below formula. Our total recovery rate of acid-soluble copper is
roughly 94%, exceeding the average recover rate of 90% reported by local copper production
enterprises in DR Congo, according to Frost & Sullivan. This superior efficiency reflects our
advanced processing technologies and optimized resource management strategies, further
reinforcing our cost leadership in the industry.
The following formula indicates the calculation of general recover rate:
Total Recovery Rate =
The amount of output of metal products +
The amount of returned metal products ×100%The amount of metal contained in the
raw materials
Specifically, our DR Congo production line is designed with a two-degree feed-grade
standard, significantly differentiating us from local industry peers, who lack a fixed-grade
input strategy or operate at a lower-grade baseline, according to Frost & Sullivan. The
two-degree feed grade standard indicates that the copper purity ingredient of the copper ore
currently purchased by the us is 2%, specifically, two tons of copper metal in every 100 tons
of ore. Our current production line is designed to process two-degree grade ore. Considering
the grade of the ore is in parallel with the purchase cost, we are strategically securing both
technical efficiency and cost predictability. On the procurement side, our production design
enables us to achieve a tighter control over input quality and pricing, thereby reducing the cost
per unit of recovered copper and enhancing our overall competitiveness against industry peers.
From a processing perspective, the two-degree feed-grade standard enables a more optimized
and stable metallurgical flow. By integrating advanced solvent extraction and electrowinning
(“SX-EW ”) processes, which is well-suited to high-grade oxide ores, we strive to achieving
superior metal recovery rates while minimizing reagent consumption, thereby reducing both
operational costs and environmental impact. Additionally, our adoption of high-efficiency
ion-exchange resins enhances the separation of impurities, ensuring consistently high-purity
copper cathodes with minimal waste generation.
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Besides, we have also implemented precise and scientific control measures in copper-
cobalt production and processing, which, in turn, contributed to a number of production-related
indicators spanning (i) comprehensive recovery rate of acid-soluble copper of roughly 94%;
(ii) current efficiency at above 95%; and (iii) A-grade copper compliance rate stands around
95% and other gauges which performed better than local hydrometallurgical copper smelting
enterprises, which are the cornerstone of maintaining our competitive edge in the industry.
Committed to an innovation-driven development strategy, we consistently invest in scientific
research annually. Leveraging established flotation and hydrometallurgical production
technologies, we have successfully secured 30 authorized patents as of the Latest Practicable
Date. Our expert consultancy team meticulously controls and optimizes each process, resulting
in a distinctive and robust technical system.
Strong Service Capabilities Attracting Leading Industry Clients
Our strong market position and exceptional service capabilities have allowed us to
cultivate long-term strategic partnerships with prestigious industry players. These valuable
customer relationships form a solid foundation for our ongoing sustainable development.
Additionally, our rigorous risk management practices and robust operational discipline
have consistently driven our profitability, even amidst significant market volatility and periods
of low copper prices. Through continual optimization of production processes, rigorous cost
management, and enhanced resource utilization efficiency, we have consistently maintained
positive net profits and stable growth.
Our prudent management extends to our international operations, where we proactively
mitigate risks by securing comprehensive overseas investment insurance from China Export
and Credit Insurance Corporation. This strategic initiative ensures complete compensation
coverage against potential country risks, effectively safeguarding our international assets and
operations, strengthening investor confidence, and minimizing potential financial exposure.
Strategic Advantage of Yunnan Headquarters
Y unnan Province, known as the “Kingdom of Metals,” is one of China’s most prominent
hubs for non-ferrous metal production and trading. The region is endowed with abundant
mineral resources, particularly in copper, lead, zinc, and tin, making it a key pillar of China’s
metallurgical industry.
Beyond industrial advantages, Y unnan boasts a rich talent pool, with several leading
universities and research institutes specializing in metallurgy, materials science, and
engineering. As a region with an abundance of talent in our industry, we benefit greatly from
our ability to efficiently recruit graduates and experts in Y unnan, allowing us to enrich our
technological reserves and talent pool, while building a positive relationship with the local
government by providing employment opportunities. Over the years, we have cultivated deep
local expertise, benefitting from access to skilled professionals and cutting-edge research,
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further strengthening our technological innovation capabilities. Our long-standing presence in
Y unnan has allowed us to build a solid foundation, combining local resource advantages with
advanced processing expertise to support our sustainable growth and international expansion.
Experienced and Skilled Management Team with Extensive Industry Expertise
Our management team is characterized by strong coordination and collaboration, with
most team members possessing substantial management experience and deep insights into the
development trends within the non-ferrous metals industry. The stability and effectiveness of
our leadership are significantly bolstered by our founder and chairman, Mr. Y uan Rong. Mr.
Y uan serves as both Chairman and CEO, bringing extensive experience and profound expertise
in the non-ferrous metals sector. Under his visionary leadership, the Company has successfully
implemented strategic expansions, achieving notable industry growth. His deep understanding
of market dynamics and strategic foresight have consistently guided our strategic direction,
ensuring sustainable development and ongoing competitiveness.
Additionally, most members of our management team are our co-founders, each bringing
extensive professional backgrounds in metallurgy, international business management, finance,
and corporate governance. Certain of our management have substantial experience operating in
DR Congo and Zambia, developing deep expertise in local mining operations, regulatory
frameworks, and business networks. Their long-standing presence in the region has been
instrumental in establishing and expanding our African operations, enabling us to effectively
navigate market complexities and optimize production efficiency. This shared depth of
experience and expertise underpins their long-term commitment and ensures robust continuity
in our strategic direction and operational excellence. This collective foundation guarantees
sustained competitiveness and stability for the company’s ongoing growth.
Furthermore, we have assembled a professional consulting team whose substantial
industry knowledge and expertise constitute a significant competitive advantage. This team
comprehensively supports our international operations — from strategic site selection and
project design to construction management, production optimization, and sales strategies —
thus ensuring seamless overseas expansion and robust operational performance.
DEVELOPMENT STRATEGY
Further Expansion of Our Production Capacity
As of June 30, 2025, our effective annual production capacity of copper cathodes stands
at approximately 30,176 tons, with our Zambia and DR Congo projects contributing to this
output. The first and second phases of our Zambia project commenced operations in September
2019 and March 2022, respectively, while the first phase of our DR Congo project began
operations in August 2023.
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Our planned expansion involves progressive scaling to achieve our total effective annual
copper cathodes production capacity, comprising production capacity from both facilities in
Zambia and DR Congo, to nearly 61,200 tons upon completion of our second phase of our DR
Congo project. This capacity increase will be achieved through technological upgrades,
efficiency improvements, and strategic infrastructure investments.
In Zambia, we will enhance the output of our existing smelting facilities by upgrading
processing technologies and optimizing production efficiency. We will invest in new equipment
and automation technologies for use in leaching, solvent extraction, and electrodeposition
processes to improve recovery rates and reduce operational costs by lowering energy
consumption and reducing the manpower required for production, ensuring stable long-term
production growth. The new equipment and automation systems we plan to procure include, but
are not limited to: online pH and redox potential monitors, variable-frequency stirring pump,
and automated cathode peeling unit. In particular, (i) online pH and redox potential monitors
can ensure the leaching process consistently operates under optimal chemical conditions,
thereby maximizing copper leaching rates; (ii) variable-frequency stirring pump can
automatically adjust speed based on load to prevent overload operation, achieving up to 30%
energy savings; and (iii) automated cathode stripping units can transform high-intensity,
high-risk operations that previously required tens of workers into processes requiring only two
to three personnel for monitoring, increasing stripping speed several fold. Additionally, further
capital investment in infrastructure will support the seamless expansion of our Zambian
operations.
DR Congo, with its abundant copper ore reserves and oxide-rich deposits ideally suited
for hydrometallurgical processing, presents a significant growth opportunity. We will invest in
the second phase of our DR Congo project, with an expected effective annual production
capacity to reach 30,000 tons, by leveraging our experience and technological enhancements
in building and operating the first phase project. We estimate that the second phase of this
project to commence in 2026. Upon completion of the second phase, we anticipate that our
total effective annual copper cathodes production capacity in DR Congo will reach
approximately 55,000 tons. We also plan to upgrade the hydrometallurgical processing
capability of our DR Congo copper smelter I, and to improve the production yield of its cobalt
hydroxide production line. We estimate that the DR Congo copper smelter I improvement
project will be completed before 2028. Upon completion of the DR Congo copper smelter I
improvement project, we anticipate that (i) our total effective annual copper cathodes
production capacity in DR Congo will further reach approximately 59,000 tons; and (ii) the
production efficiency and grade of the cobalt hydroxide we produce will be enhanced,
strengthening our position as a leading producer in the region.
To expand our production capabilities, we also aim to strengthen our leading position in
copper cathode and cobalt metal smelting and trading through continued enhancement of our
technological capabilities to expand our production yield.
In terms of hydrometallurgical technology, we plan to significantly increase investment
in research and development, particularly focusing on advanced solvent extraction and
electrolysis processes. Our objectives include enhancing copper and cobalt recovery rates,
reducing energy consumption, and minimizing environmental impacts through cleaner and
more efficient processing techniques.
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For copper-cobalt separation technology, we will emphasize developing highly efficient
and selective separation processes. This will help us effectively address the growing market
demand for high-purity copper and cobalt products, expand our product portfolio, and extend
our industrial value chain, aligning with our broader strategic goals.
This expansion strategy empowered by new facilities and technological advancement
aligns with our long-term goal of enhancing economies of scale, reducing production costs, and
solidifying our competitive edge in the global copper market.
Expand Cobalt Industry Chain and Strategically Enter the New Energy Materials Sector
According to Frost & Sullivan, driven by the rapid expansion of high-performance
lithium-ion power batteries and other new energy applications, global cobalt demand is
projected to grow significantly — from approximately 187,000 tons in 2024 to approximately
274,000 tons in 2029. Based on this trajectory, the global cobalt market could potentially face
a 17.5% supply shortage by 2029.
Leveraging the natural coexistence of copper and cobalt in our primary resource regions
— Zambia and DR Congo — and recognizing the strong growth potential in the new energy
materials market, we are actively developing advanced technologies for the efficient separation
of copper and cobalt from mixed copper-cobalt ores. This strategic initiative includes ongoing
research into enhanced recovery methods for extracting cobalt from copper concentrates, as
well as efficient extraction of both copper and cobalt from metallurgical slags.
In October 2022, we established Jinxun Anhui in Anhui Province and commenced
construction of a high-performance lithium-ion battery raw material project. The establishment
of our cobalt compound facility in Anhui Province offers significant synergies in terms of both
upstream and downstream integration. First, the facility benefits from efficient access to
upstream resources via the Y angtze River, a major logistics artery, allowing us to source raw
materials shipped from overseas through a well-developed transportation network. Second, by
locating the facility within an industrial zone that is deeply integrated into the Y angtze River
Delta Economic Zone (ɧԉ຾᏶ਸ਼) — home to numerous leading battery and new energy
enterprises — we are strategically positioned near key downstream customers. This proximity
has enabled us to reduce logistics and supply chain costs by approximately 30%. The project
focusing on a cobalt compound facility is currently undergoing the final pre-acceptance
checking and is set to begin trial operations within 2025. With the successful completion and
operation of our Anhui subsidiary, we aim to strategically extend our business model beyond
traditional copper manufacturing, establishing a presence in the rapidly expanding new energy
materials sector. Leveraging the proven advantages of high operating voltage, light weight,
high energy, low pollution and prolonged life-cycle, high-performance lithium-ion batteries are
destine for the mainstream products across a spectrum of industries covering mobile phones,
digital products and new energy vehicles. As of now, China has poised to become the largest
producer, consumer and exporter of high-performance lithium-ion battery materials. Given
cobalt sulfate, cobalt chloride and manganese sulfate produced by Jinxun Anhui constitute key
materials of producing high-performance lithium-ion batteries, this initiative further diversifies
our business lines and revenue sources, thereby enabling us to tap into high-growth markets,
and strengthens our overall market position and future revenue potential. We remain firmly
committed to our core copper manufacturing business, given (i) the continued global supply
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shortage in the cathode copper industry; and (ii) our longstanding presence in the sector, which
has allowed us to accumulate extensive industry experience and advance our production
technologies. In view of the potential upward trend in copper prices, our strategic focus on
traditional copper production is expected to remain unchanged. Our expansion into the cobalt
industry chain and the trading of other new energy materials is intended to complement and
extend our existing copper business, rather than replacing it. We do not expect this
diversification to have any material impact on our overall operational or financial performance.
Extend the Upstream of the Industry Chain and Seek Strategic Acquisition Opportunities
To further enhance our copper and cobalt resource base, we will proactively pursue
strategic acquisitions of suitable upstream copper and cobalt hydrometallurgical resources or
facilities, focusing on opportunities in Africa, South America, and China. Our targeted
acquisition approach will involve thorough and careful evaluation of potential targets.
Specifically, we will meticulously assess various factors encompassing compliance with local
regulatory standards, the quality and quantity of mineral reserves, deposit grades, projected
investment returns, and alignment with our long-term strategic objectives and internal
standards. Our strategic acquisitions are expected to take a variety of forms to strengthen our
upstream resource base. These include:
(i) acquiring greenfield land with high mineralization potential, where we would be
entitled to obtain mining rights upon the verification of mineral reserves. According
to Frost & Sullivan, Zambia and DR Congo remain the regions where possessing the
most concentrated copper mineral resources globally. Their combined copper
reverses accounted for over 10% of the total reserves detected in the world.
Characterized by concentrated mineral belts, above-average copper grades and a
high level of exploration advancement, these areas are the foundation of more than
100 target reserves for diversified acquisition approaches covering greenfield
exploration, equity investments and acquisition of mature mining rights;
(ii) continuing to cooperate with existing mining companies by increasing our capital
contributions in relation to equipment upgrades and machinery improvements,
thereby enhancing mining efficiency and ore quality, with access to raw materials
secured post-extraction. There are more than 70 small and medium-sized mining
operators within the region, and almost each of them face challenges including
outdated technology and equipment, inferior production efficiency and limited
financial resources. These mining operators are generally open to external funding
to undergo equipment upgrades or mineral processing optimization, with the aim to
achieve mutually beneficial arrangements through “mineral-for-equity swaps.” For
enterprises which possess extensive local operational experience and capabilities in
smelting or downstream integration, through active collaboration with existing local
mining companies offers ample target resources, adaptable transaction structures
and better liquidity, according to Frost & Sullivan;
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(iii) participating in approximately five mining projects through equity investments in
the next five years, allowing us to secure strategic resource access while minimizing
the operational risks associated with direct ownership. When making equity
investment decisions for mining projects, we will consider the following key factors:
(i) return on investment, we plan to invest in mining projects with a reasonable level
of return on investment; (ii) regional focus, we plan to invest in mining projects
focusing on regions such as Zambia and DR Congo to achieve synergies between
upstream resources and our existing production capacity, while enhancing the
liquidity and monetization efficiency of resource assets; (iii) volume and grade of
resources, we plan to invest in mining projects with mines possessing approximately
100,000 tons of proven copper reserves, with priority given to high-quality projects
exhibiting reserve expansion potential and average copper grades between 1% and
3%; and (iv) equity structure, we typically require to acquire at least 51% of the
equity interest. For mining projects demonstrating significant scale advantages and
long-term development value, a 20% to 30% equity participation model may be
considered on a case-by-case basis. According to Frost & Sullivan, equity
investment has manifested to be a critical strategy for mining companies to optimize
capital allocation. In recent years, a number of mining funds and private equity firms
have weighed on liquidity requirements for their project equity holdings in light of
the rising copper prices and demand for renewable energy. Through equity
investments in mining projects, we are in the position to acquire strategic resources
with proven reserves and stable production capacity, thereby further reducing direct
operational risks; and
(iv) selectively acquiring mining rights through outright purchases of sites with
confirmed reserves, enabling us to quickly scale up resource control in a targeted
and risk-mitigated manner. Given the advancement in exploration technology and
ongoing project development, certain mining areas have completed reserve
exploration and process potentially exploitable resources. Meanwhile, international
mining companies are adjusting their mining rights in corresponding to strategic
shits or capital repatriation, which presents us with opportunities to acquire
high-quality mining rights. By screening for high copper grades and target copper
reserves, we are able to secure premium mining rights through direct acquisitions,
which in turn enables swift upstream resource expansion and cost optimization.
We expect to prioritize in acquiring copper and cobalt reserves of 10,000 tons or above
with an average copper grade higher than 2% in avoidance of the excessive mining costs
associated with low-grade mines. We will focus on selecting mining reserves in Zambia and DR
Congo in light of their possession of rich reserves and our extensive operation history in local
communities. In the meantime, we will also strategically direct our attention to copper-rich
countries such as Peru and Chile in South America. We intend to adopt a phased and
risk-conscious approach to strategic acquisitions, beginning with lower-risk initiatives while
gradually building our internal capabilities in mineral exploitation. Our initial focus will be on
securing stable sources of raw materials, with plans to progressively initiate exploitation
activities at newly identified and underdeveloped mining sites.
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Our Directors are of the view that the aforementioned strategic acquisitions will benefit
us in various aspects. By acquiring upstream mines, we are able to form a lasting and stable
connection between local mining reserves and our production facilities to secure our raw
material supply chains for our smelting operations. Meanwhile, sourcing mineral resources
internally will lessen our dependence on raw material procurement from external suppliers,
thereby achieving purchasing economies. In addition, upstream enterprises typically possess
exceptional profitability due to the scarcity of their resources. Following the acquisitions, we
will gain direct entry to and internalize the high-margin segment, which will progressive
enhance our cash flow, gross profit margin and financial condition. Risks and challenges in
making direct acquisitions in overseas primarily include (i) the substantial upfront acquisition
expenditures and follow-on maintenance costs; (ii) a direct exposure to local operational risks
taking into account of policy, legal and environmental elements; and (iii) other risks relating
to global commodity price volatility. In light of the aforementioned risks and consistent with
our overall acquisition strategy, we aim to pursue acquisitions in a measured and disciplined
manner, prioritizing risk control and sustainable growth. As of the Latest Practicable Date, our
Directors confirm that we do not have any plan to make any acquisition with respect to
downstream resources and facilities.
We remain committed to disciplined acquisitions that contribute significantly to
enhancing our market competitiveness, expanding our resource reserves, and promoting
sustainable growth. As of the Latest Practicable Date, we have not identified any specific
acquisition targets nor entered into any formal acquisition agreements or memorandums of
understanding. However, we continue to actively monitor and evaluate potential opportunities
that can strategically reinforce our industry position and deliver substantial shareholder value.
Strengthen Talent Recruitment, Staff Training, and Corporate Social Responsibility
Practices
We will continue to proactively recruit, train, and retain highly qualified personnel to
effectively meet the growing needs of our expanding operations, particularly in other African
countries and South America. With the ongoing development of our projects in DR Congo and
Zambia, we aim to deepen our international presence and enhance our operational efficiency,
aligning with China’s “going global” and “One Belt, One Road” strategic initiatives. This
approach will substantially strengthen our international competitiveness and sustainable
growth prospects.
To achieve these goals, we plan to expand our workforce strategically, refining our talent
selection processes to attract top-tier management and technical professionals from the
industry. This will significantly enhance our technological and managerial capabilities.
Concurrently, we will optimize our compensation and incentive structures for key personnel
and management teams, ensuring we attract and retain talent effectively. We will provide
ongoing internal training programs to equip our employees with cutting-edge industry
knowledge, advanced technical skills, and essential insights into environmental, social, health,
and safety standards relevant to our international operations, thereby improving our global
operational capacity.
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We place significant emphasis on corporate social responsibility, recognizing its crucial
role in our international operations and corporate reputation. Since establishing our overseas
subsidiaries, we have consistently invested in community-building initiatives, including
educational support, local donations, and infrastructure projects such as well drilling and road
construction. Looking ahead, we remain dedicated to enhancing the social and economic
conditions of the regions in which we operate. For instance, we have entered into a donation
agreement with the local communities in DR Congo. These proactive efforts contribute to local
employment opportunities, improved socio-economic conditions, strengthened brand image,
and robust governmental relationships, ultimately supporting the long-term sustainability and
positive global impact of our business.
OUR OPERATIONS
We started from engaging in the trading of non-ferrous metals. After accumulating
experience in the industry, we commenced the business of localized processing and smelting
of copper in Zambia and DR Congo in 2017 and 2023, respectively, and gradually developed
into our current business model that integrates mineral processing, smelting and trading of
non-ferrous metals. We have a stable supply of copper raw materials based on long-term
cooperation with suppliers, and we believe that our more than a decade of experience in the
copper industry and our ability to produce high-quality copper-related products distinguish us
from our competitors.
Our operations cover ore processing, smelting, as well as sales of copper products and
trading of non-ferrous metals. The processing and smelting of copper ores are primarily carried
out by our local production facilities located in Zambia and DR Congo, respectively. As of the
Latest Practicable Date, save for the cobalt processing plant under construction in China, we
own four production facilities, which include two copper smelters and one copper concentrate
flotation plant in Zambia, and one copper smelter in DR Congo. Our non-ferrous metal trading
business is conducted primarily through our subsidiaries in Singapore and China. During the
Track Record Period, we generated revenue from (i) the production and sale of copper
cathodes; (ii) the production and sale of copper concentrates; and (iii) the trading of
non-ferrous metal products.
Production and Sale of Copper Cathodes
We produce copper cathodes in Zambia and DR Congo. We operate two copper smelters
in Zambia, namely Zambia copper smelter I and Zambia copper smelter II, and one copper
smelter in DR Congo, namely DR Congo copper smelter I. The Zambia copper smelter I and
Zambia copper smelter II commenced production in September 2019 and March 2022,
respectively, while the DR Congo copper smelter I commenced production in August 2023. Our
copper smelters produce copper cathodes using a hydrometallurgical process that primarily
involves grinding, leaching, extraction and electrowinning utilizing copper ores. During the
Track Record Period, the copper cathodes we produced were primarily sold to a variety of
commodity traders in Chinese Mainland. In light of our current production capacity, which
remains below overall market demand, we believe that any short-term fluctuations in
downstream demand are unlikely to materially affect our copper cathode sales volume.
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Production and Sale of Copper Concentrates
We produce copper concentrates in Zambia. Our Zambian subsidiary operates a copper
concentration flotation plant, namely Zambia flotation plant. The Zambia flotation plant
commenced production in October 2017. We produce copper concentrates by crushing and
grinding the ores and separating metals from waste rocks using a flotation process, and then
classifying and dehydrating. During the Track Record Period, the copper concentrates we
produced were primarily sold to local smelting companies. In addition, we also sold
insignificant amount of copper concentrates to customers operating in Chinese Mainland.
Trading of Non-Ferrous Metal Products
We also procure non-ferrous metal products from local suppliers in Peru and China, and
primarily sell to our customers through our subsidiaries in Singapore and China. We aim to
further enhance our presence in Singapore, leveraging its incomparable attractiveness in
providing tax incentives to foreign investors to build a regional hub that facilitates our overseas
financing and trading activities. Non-ferrous metal products we trade primarily include copper,
zinc, lead and silver. We serve both upstream suppliers and downstream customers in trading
non-ferrous metals. Given our substantial procurement volume of non-ferrous metal products
and diversified supply channels, we possess stronger bargaining power, enabling us to offer
these products to downstream customers at competitive prices and favorable commercial terms.
Furthermore, our global procurement network with sourcing channels spanning key resource
regions including China, South America, and Africa not only ensures superior product quality
and stable supply but also provides a wide variety of customized non-standard products
tailored to specific customer requirements. Leveraging our robust creditworthiness and
cross-border capital management capabilities, we can also provide upstream suppliers and
downstream customers with more flexible payment terms and settlement arrangements to meet
their individual needs. During the Track Record Period, the non-ferrous products we procured
were mainly sold to the commodity traders and producers operating in Chinese Mainland and
Peru. The downstream customers of our non-ferrous metal trading business are consisted
mainly of large-scale non-ferrous metal smelting enterprises with considerable demand of
non-ferrous metals in the PRC. In addition, we also received orders on an ad hoc basis from
mid- to small non-ferrous metal trading enterprises in the PRC.
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The following table sets out a breakdown of our revenue by business segment, each
expressed in absolute amounts and as a percentage of our total revenue, for the years/periods
indicated:
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
(unaudited)
Copper production and
processing
Copper cathodes /H1118/H1118/H1118/H1118/H1118/H1118/H1118328,220 51.5 404,785 59.9 1,228,967 69.4 448,256 75.2 828,021 85.9
Copper concentrates /H1118/H1118/H1118/H1118/H111862,396 9.8 12,177 1.8 946 0.1 946 0.3 1,179 0.1
Cobalt hydroxide /H1118/H1118/H1118/H1118/H1118/H1118– – – – – – – – 10,739 1.2
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118390,616 61.3 416,962 61.7 1,229,913 69.5 449,202 75.5 839,939 87.2
Trading of non-ferrous
metal products /H1118/H1118/H1118/H1118/H1118/H1118246,687 38.7 258,739 38.3 539,920 30.5 146,763 24.5 123,846 12.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118637,303 100.0 675,701 100.0 1,769,833 100.0 595,965 100.0 963,785 100.0
The following table sets out a breakdown of revenue by geographic location (1) of our
customers for the years/periods indicated:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
(unaudited)
Singapore /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 27,989 4.1 406,455 23.0 169,916 28.5 496,828 51.5
Switzerland /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 11,718 1.7 265,917 15.0 106,523 17.9 128,917 13.4
Chinese Mainland /H1118/H1118/H1118/H1118241,754 37.9 350,521 51.9 634,035 35.8 199,708 33.5 120,965 12.6
Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H1118220,925 34.7 83,610 12.4 25,598 1.4 – – 86,397 9.0
British Virgin Islands /H1118/H1118107,295 16.8 192,513 28.5 266,201 15.0 98,266 16.5 78,255 8.1
Luxembourg /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 170,167 9.6 20,092 3.4 47,241 4.9
Peru /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,827 1.1 – – 514 0.1 514 0.1 4,003 0.4
Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,502 9.5 9,350 1.4 946 0.1 946 0.1 1,179 0.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118637,303 100.0 675,701 100.0 1,769,833 100.0 595,965 100.0 963,785 100.0
Note:
(1) The geographic location is based on the place of registration of the respective customer.
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The following table sets out a breakdown of revenue by delivery location of our
customers for the years/periods indicated:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
(unaudited)
DRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 126,370 18.7 877,004 49.6 308,104 51.7 699,681 72.6
Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118388,723 61.0 288,399 42.7 352,912 19.9 141,098 23.7 127,721 13.3
The PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241,754 37.9 260,932 38.6 409,070 23.1 112,465 18.9 84,029 8.7
Peru /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,826 1.1 – – 130,847 7.4 34,298 5.8 52,354 5.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118637,303 100.0 675,701 100.0 1,769,833 100.0 595,965 100.0 963,785 100.0
The following table sets forth our gross profit and gross profit margin by business lines
for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Copper production and
processing
Copper cathodes /H1118/H1118/H1118/H1118/H1118155,250 47.3 121,525 30.0 339,821 27.7 130,140 29.0 208,858 25.2
Copper concentrates /H1118/H1118/H11189,689 15.5 (1,139) (9.4) (2,039) (215.5) (36) (3.7) 508 43.1
Cobalt hydroxide /H1118/H1118/H1118/H1118/H1118– – – – – – – – 2,694 25.1
164,939 42.2 120,386 28.9 337,782 27.5 130,104 29.0 212,060 25.3
Trading of non-ferrous
metal products /H1118/H1118/H1118/H11185,554 2.3 9,757 3.8 29,885 5.5 15,549 10.6 10,620 8.6
Total/Overall /H1118/H1118/H1118/H1118/H1118/H1118/H1118170,493 26.8 130,143 19.3 367,667 20.8 145,653 24.4 222,680 23.1
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OUR PRODUCTS
Our main products are copper cathodes and copper concentrates. We also trade
non-ferrous metal products procured from suppliers to other metal trading companies and
non-ferrous metal producers.
The following table sets out our production volume of copper cathodes, copper
concentrates and cobalt hydroxide for the years/periods indicated:
Y ear ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
Production volume (tons)
Copper cathodes /H1118/H1118/H1118/H11185,949.8 7,368.1 20,934.8 7,220.6 12,496.2
Copper concentrates /H1118 1,178.4 210.5 32.0 17.8 9.0
Cobalt hydroxide /H1118/H1118/H1118 – – 128.2 – 171.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,128.2 7,578.6 21,095.0 7,238.4 12,676.2
The following table sets forth the breakdown of our sales volume of copper cathodes,
copper concentrates and cobalt hydroxide for the periods indicated:
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
(tons)
Product
Copper cathodes /H1118/H1118/H1118/H11185,886.4 7,384.1 19,851.1 7,195.5 12,952.9
Copper concentrates /H1118 1,170.3 229.1 17.8 17.8 21.2
Cobalt hydroxide /H1118/H1118/H1118 –––– 83.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,056.7 7,613.2 19,868.9 7,213.3 13,057.8
Copper Cathodes
Copper cathode is pure copper refined through the electrodeposition process, containing
copper greater than or equal to 99.95%.
In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, we produced
5,949.8 tons, 7,368.1 tons, 20,934.8 tons, 7,220.6 tons and 12,946.2 tons, respectively, of
copper cathodes. We plan to significantly increase our total copper cathode effective
production capacity in DR Congo to approximately 25,000 tons by 2025 approximately 55,000
tons upon completion of our second phase of our DR Congo project, and approximately 59,000
tons upon completion of our DR Congo copper smelter I improvement project. Our expansion
plans include increasing production at our Zambia copper smelter II by conducting technology
reform and process optimization, the development of our DR Congo copper smelter II project
for which we have completed the viability study, and increasing production at our DR Congo
copper smelter I by procuring and deploying new equipment.
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We primarily sell our copper cathodes to metal trading companies for onward sale to end
customers.
Copper Concentrates
Copper concentrate is the concentrate obtained from copper ore through beneficiation and
enrichment processes, usually containing 25% to 30% copper, which is one of the raw materials
for electrolytic copper production.
In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, the Zambia
flotation plant had an output of 1,178.4 tons, 210.5 tons, 32.0 tons, 17.8 tons and 9.0 tons of
copper concentrates, respectively, as a result of our decision to downsize our copper
concentrate production.
We primarily sell our copper concentrates to non-ferrous metal producers.
Non-ferrous metal products
We also trade a variety of non-ferrous metal products, such as copper, silver, lead, and
zinc, purchased from our suppliers and sell such metal products to metal trading companies or
other non-ferrous metal producers.
Cobalt Hydroxide
We also use cobalt, which is a by-product generated during the copper smelting process,
to produce and sell cobalt(II) hydroxide. The original ore used in our production facility in DR
Congo contained a mix of copper and cobalt, and we produce cobalt hydroxide as a by product
in the copper smelting process. During the Track Record Period, we produced a total of 299.2
tons of cobalt hydroxide of which approximately 83.7 tons produced by our factory were sold
to third parties located in the PRC in 2025 for revenue generation purpose. As of June 30, 2025,
our effective annual production capacity of cobalt(II) hydroxide was approximately 4,500 tons.
Cobalt(II) hydroxide can be used to produce cobalt sulfates and cobalt chlorides, which are raw
materials for new energy batteries. As such, we plan to expand our product portfolio to include
cobalt sulfates, refined cobalt chlorides and battery-grade manganese sulfates.
PRODUCTION
Copper Resources
We rely on suppliers in Zambia and DR Congo for copper procurement where we
enter into supply agreements with suppliers for copper sourcing. For more details, see
“— Suppliers.”
Production Planning
We typically prepare production plans on a periodic basis based on the anticipated market
trends and discussions with our customers. Pursuant to these plans and existing inventory
levels, we procure raw materials and prepare monthly production schedules.
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Existing Production Facilities
As of the Latest Practicable Date, our production facilities are located in Zambia and DR
Congo. The table below sets forth the location, product categories, year of commencement of
operation and designed annual production capacity for these production facilities:
Facility Name Location
Primary Products
Manufactured
Commencement of
Operation
Designed Annual
Production Capacity (1)
Copper cathodes
Zambia copper
smelter I /H1118/H1118/H1118/H1118/H1118/H1118
Kalulushi District,
Copperbelt
Province,
Zambia
Copper cathodes September 2019 Copper cathodes:
1,800 tons
Zambia copper
smelter II /H1118/H1118/H1118/H1118/H1118/H1118
Kalulushi District,
Copperbelt
Province,
Zambia
Copper cathodes March 2022 Copper cathodes:
4,800 tons
DR Congo copper
smelter I /H1118/H1118/H1118/H1118/H1118/H1118
Kolwezi, Lualaba
Province, DR
Congo
Copper cathodes August 2023 Copper cathodes:
24,600 tons
Copper concentrates
Zambia flotation
plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Kalulushi District,
Copperbelt
Province,
Zambia
Copper
concentrates
October 2017 Copper concentrates:
100 tons
Note:
(1) Calculated by multiplying the average monthly output of each production facility by 12 months.
Production Capacity and Utilization
We have maintained relatively high utilization rates during the Track Record Period. The
following table sets forth a summary of our annual production capacity (in tons) in terms of
effective designed production capacity (in tons), output (in tons) and utilization rates for our
key product lines for the periods indicated.
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Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
Annual
Effective
Production
Capacity (1) Output
Utilization
Rate (2)
Annual
Effective
Production
Capacity (1) Output
Utilization
Rate (2)
Annual
Effective
Production
Capacity (1) Output
Utilization
Rate (2)
Annual
Effective
Production
Capacity (1) Output
Utilization
Rate (2)
Annual
Effective
Production
Capacity (1) Output
Utilization
Rate (2)
(tons) (tons) (%) (tons) (tons) (%) (tons) (tons) (%) (tons) (tons) (%) (tons) (tons) (%)
Copper cathodes (3)
Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,600 5,949.8 78.3 6,485 5,006.9 77.2 6,540 5,041.9 77.1 2,693.2 2,255.0 83.7 2,944 1,862.3 63.3
DR Congo /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 3,215 2,361.1 73.4 24,660 15,892.9 64.4 10,475.9 4,965.6 47.4 12,144 10,633.8 87.6
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H11187,600 5,949.8 78.3 9,700 7,368.1 76.0 31,200 20,934.8 67.1 13,169 7,221 54.8 15,088 12,496.0 82.8
Copper concentrates (4)
Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,200 1,178.4 53.6 1,400 210.5 15.0 100 32.0 32.0 100 17.8 17.8 54 9.0 16.7
Notes:
(1) The annual effective production capacity of each period is calculated by multiplying the maximum monthly output of the corresponding period by th e number of months with
actual production, which could be higher than the designed annual production capacity by enhancing processing technologies and production efficie ncy in actual operations.
For example, assuming stable power output, an efficiency rate of 95%, 30 effective production days per month, our historical maximum monthly output o f approximately 2,600
tons in 2024, and full year operation, our annual effective production capacity 2024 is estimated at approximately 31,200 tons (i.e. 2,600 tons × 12 mo nths). According to Frost
& Sullivan, this calculation method is consistent with market practice. The gap between our annual effective production capacity and our output was p rimarily due to (i) the
stability of local power supply to our production facilities in DR Congo since our production equipment cannot operate during power outages. During t he Track Record Period,
we experienced temporary power outages due to our production facility in DR Congo not being connected to the municipal grid from August 2023 and August 2024, coupled
with insufficient power generation capacity from temporary generators. To enhance production efficiency and achieve maximum production capacity , we subsequently procured
five new generators and entered into a grid power supply agreement with Supplier Q, which is a DR Congo subsidiary of a power supplier in Zambia, and a sta te-owned electricity
company in DR Congo. As of the Latest Practicable Date, we have maintained stable power supply at our production facility in DR Congo; (ii) the stabilit y of raw materials
supply as unstable supply may lead to production interruptions, preventing us from carrying out production activities as planned, thereby resultin g in reduced output and capacity
utilization rates. During the Track Record Period, there was a reduction in market supply of sulfide ore and mixed ore for the production of copper conc entrates in 2023 and
2024. As such, we strategically focused our resources on production of copper cathodes and only produced copper concentrates in small scale. Save for the aforementioned
reduction in sulfide ore and mixed ore market supply, we did not experience other material supply shortages that resulted in prolonged suspension of o ur production operations
during the Track Record Period and up to the Latest Practicable Date; and (iii) the scheduled maintenance of equipment of the production line.
(2) Utilization rates are calculated based on the output for the relevant period divided by the annual effective production capacity for the relevant period.
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(3) During the Track Record Period, the utilization rates of our copper cathode production lines in Zambia were on a downward trend, primarily due to (i ) shutdowns for maintenance
caused by aging equipment; and (ii) a decline in production efficiency after we shifted to procure lower-grade ores in Zambia which contain relativel y low concentrations of
copper. The utilization rate of our copper cathode production line in DR Congo decreased slightly from 73.4% in 2023 to 64.4% in 2024, mainly because (i ) it was still undergoing
a ramp-up phase and process debugging period with unstable production output; and (ii) the relatively unstable power supply in DR Congo in the first ha lf of 2024, and then
the utilization rate increased significantly from 47.4% in the six months ended June 30, 2024 to 87.6% in the six months ended June 30, 2025, primarily a ttributable to (i) the
completion of the production ramp-up phase and process debugging period; and (ii) the addition of five new generators and the signing of a grid power su pply agreement to
support increased production activities.
(4) The annual effective production capacity and output of copper concentrates decreased significantly during the Track Record Period, mainly due t o our strategic allocation of
resources and equipment to the production of copper cathodes, which has a relatively high gross margin.
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Production Expansion Plan
Currently we are improving or expanding the copper cathode production lines in Zambia
and DR Congo. Our production improvement or expansion plans have been determined on the
basis of, among other things, (i) forecast of market demand of the related products; (ii)
prevailing and anticipated prices for relevant products; (iii) utilization of existing
manufacturing facilities; (iv) estimated cost of development; and (v) availability and cost of
capital resources. According to Frost & Sullivan, the consumption of copper cathodes has
demonstrated a robust growth, from 22.5 million tons in 2020 to 27.0 million tons in 2024, with
a CAGR of 4.7%, primarily driven by the surge in demand in the renewable energy and electric
vehicle industries and massive infrastructure spending in emerging markets. The trend of
growth in consumption of copper cathodes is projected to continue, from 27.8 million tons in
2025 to 30.5 million tons in 2029, with a CAGR of 2.3%. Underpinned by the prime use in
power grids, batteries and electronic devices, the average prices of copper have demonstrated
a steady upward trend in the past few years, increasing from approximately RMB42,600 per ton
in 2020 to approximately RMB66,500 per ton in 2024. Given the demand for copper will still
dramatically outstrip supply in the next few years, copper prices will face upward pressure in
the short term. During the Track Record Period, the overall annual effective utilization rate of
our existing copper cathode production lines had yet to reach the desired level. This was
primarily due to the production facilities in Zambia and DR Congo, including Zambia copper
smelters I and II and DR Congo copper smelter I, commenced production at different stages.
When new production lines are put into operation, the overall annual effective utilization rate
may be negatively impacted, as new production lines typically operate at lower output levels
during their initial stages. In particular, production facilities will typically undergo a ramp-up
phase and process debugging period after commissioning. During this time, their utilization
rates will remain at relatively low levels until full integration is achieved and stable operation
is attained, at which point their utilization rates will gradually increase. Our overall annual
effective utilization rate during the Track Record Period varied between 67.1% to 82.8%.
We expect to reach the expected level of around 95% in 2025 assuming an annual
effective production capacity of 30,176 tons, given that (i) since July 2025, our DR Congo
copper smelter I has achieved stable monthly production with 100% utilization rate; (ii) we
maintain sufficient raw material reserves for our DR Congo copper smelter I to cover more than
four months of consumption; (iii) we have established a robust power supply system to ensure
a more stable production; and (iv) we have achieved an overall effective utilization rate of our
existing copper cathode production lines of approximately 92% for the ten months ended
October 31, 2025, based on an effective production capacity of 25,147 tons. Accordingly, our
expansion of production lines in Zambia and DR Congo is in conjunction with our estimates
to the aforementioned contributing factors and is deemed to be reasonable. We confirm that the
status of the expansion and the amount of expenditure incurred remain unchanged as of the
Latest Practicable Date.
We believe our improvement or expansion projects will help us extend product lines to
both upstream and downstream of the copper industry and further enlarge our revenue base. We
may also invest in additional improvement or expansion projects as we continue to grow our
market share and income. The table below sets forth the details of our estimated capital
expenditure, additional planned production capacity and the expected operation
commencement date.
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Production Line Key Products
Additional
Planned
Production
Capacity
Estimated
Capital
Expenditure
Expected Time
of Commencing
Operation
(tons/year) (RMB million)
Zambia copper smelter
improvement project /H1118/H1118
Copper cathodes 1,000 71.5 Within 2027
DR Congo copper smelter
I improvement project /H1118
Copper cathodes 4,000 380.0 Before 2028
DR Congo copper
smelter II project /H1118/H1118/H1118/H1118
Copper cathodes 30,000 576.0 Within 2026
We expect that the Zambia copper smelter improvement project and the DR Congo copper
smelter II project above will be funded primarily by cash generated from our operations, while
the DR Congo copper smelter I improvement project will be funded primarily by the net
proceeds from the Global Offering. See “Future Plans and Use of Proceeds — Use of Proceeds”
for details.
Production Process
Our optimized production process reflects our over a decade of industry experience that
allows us to accelerate the pace of production, implement product requirement modifications
more quickly and maintain relatively low defect rates. The production of copper cathodes
generally involves four key steps, which may vary depending on the composition of the ore:
(i) Leaching : Oxidized copper ore and copper-containing tailings are mixed with
concentrated sulfuric acid in the leaching system. The resulting leaching liquid,
which contains dissolved copper, is separated from the leaching residue and directed
to the next stage. The leaching process at our production facility in the DR Congo
typically takes approximately four to five hours; whereas at our production facilities
in Zambia, it usually takes approximately two and a half to three hours.
(ii) Extraction : The leaching liquid undergoes solvent extraction, where it is mixed
with an organic phase. Copper ions are selectively transferred into the organic
phase, producing a rich-loaded organic solution. The remaining extraction residue is
removed. The extraction process typically takes approximately two and a half to
three minutes.
(iii) Back Extraction : The copper-loaded organic phase then enters a back extraction
process, where copper is stripped into an aqueous solution. The resulting electro-
rich liquid contains high concentrations of copper and is separated from the
unloaded organic phase for reuse. The back extraction process typically takes
approximately two and a half to three minutes.
(iv) Electrodeposition : The electro-rich liquid flows into the electrowinning cell
system, where electric current is applied. Copper ions are reduced and plated
onto cathodes, forming high-purity copper cathodes (typically 99.99%). The
electrodeposition process typically takes approximately five days.
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The following diagrams illustrate the production processes of copper cathodes and copper
concentrates:
Copper Cathodes
Leaching residue Leaching
Leaching liquid
Oxidation
copper ore
Oxidation copper-
containing tailings
after flotation
Concentrated
sulfuric acid
Extraction residue
Electro-poor liquid
Extraction
Rich-loaded organic phase
Back extraction
Electro-rich liquid
Copper cathode
Electrodeposition
Tailings pond
Unloaded organic
phase
Copper Concentrates
Ore
Coarse
crushing
Fine
crushing Belt
conveyor
Belt
conveyor
Coarse
grinding
Feeding Coarse
Lower level
Rough
selection
Fine
selection
Upper
Level Mineral
concentrate
pool
Upper
Level
Lower
level
Coarse
Swirl classification
Spiral
classification
Fine
grinding Scavenging
Lower
level
Tailings pond
Ore pulp
Ore pulp mixing tank
CoarseFine
grain
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Critical Machinery and Equipment
We endeavor to equip our production facilities with state-of-the-art equipment, which we
believe is essential for increasing automation and ensuring reliability, as well as for cost
competitiveness. Many of the machines we utilize require limited human operation, allowing
us to reduce labor costs and focus our manufacturing facility staffing on maintenance and
supervisory personnel. We design, customize and integrate a variety of advanced technologies
into our production processes. We have also internally developed many of the production
technologies and equipment used in our production processes. The critical machinery and
equipment applied in our production processes are set forth below:
 Jaw crusher, which is used to crush large materials to a certain size to improve ore
grinding efficiency;
 Semi-autogenous ball grinding mill, which uses steel grinding balls and ore or rock
fragments as grinding media to crush the ore into smaller particles to improve the
efficiency of acid leaching;
 Ball grinding mill, which is used to further refine the ore rock that is processed by
the semi-autogenous ball grinding mill by breaking the ore rock into millimeter of
even micrometer-level particles, allowing an increased exposure area for reactions
and boosting the leaching efficiency;
 Thickener, which is used to separate solid and liquid of the ore pulp to reduce the
amount of water entering the system to improve water expansion problems;
 Leaching agitation tank, which is used to dissolve copper ions in the ore into
solution by adding sulfuric acid for further extraction;
 Extraction box, which is used to extract and separate copper ions from the leachate
and purify and concentrate them to the electrolyte;
 Silicon controlled rectifier, which is used to convert the alternating current into
direct current to provide electricity for the electrolysis process; and
 Electrolysis tank, which is used in the electrodeposition process to generate an
electrochemical reaction under the action of direct current, converting the copper
ions enriched in the liquid to metallic copper and producing copper cathodes.
Maintenance
We conduct inspections and maintenance work at our production facilities on a periodic
basis, while overhauls are generally carried out on the whole production facilities at a
particular location from time to time. Depending on the specific equipment conditions, we may
incur on average approximately three days of equipment and factory maintenance each month
at our production facilities. We require our equipment suppliers to keep all their machinery and
equipment in good and proper repair and conduct regular safety checks during the term of their
services. For the machinery at our processing facilities and equipment that we own, we also
conduct maintenance and overhaul on a regular basis.
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We have developed and implemented internal procedures regarding maintenance
protocols at our facilities periodically according to the characteristics and requirements of the
specific equipment and machinery in order to ensure their proper function. During the Track
Record Period and up to the Latest Practicable Date, we did not experience any material or
prolonged suspension of operations due to failures of our machinery, equipment or other
facilities.
Delivery and Transportation
For the raw materials we purchased through our local suppliers in Zambia and DR Congo,
they were mostly delivered directly to our production sites by suppliers, though a small portion
of raw ore were delivered to our Zambian factory through our self-arranged transportation.
During the Track Record Period, the equipment and materials purchased locally for our
factories in Zambia and DR Congo factories were transported by certified logistics providers.
We believe that our suppliers and logistics providers have complied with all applicable safety
regulations relating to the transportation of hazardous raw materials.
For sales of our copper products, our customers are typically responsible for
transportation by way of entrusting a third-party logistics service provider with the requisite
qualifications to send trucks to our production facilities to pick up the products, and we are
responsible for customs clearance, including obtaining export licenses and other related
documents. Our customers are typically responsible for bearing the logistics costs.
For trading of non-ferrous metal products, our suppliers are typically responsible for
delivering the products to our customers’ designated location and bearing the logistics costs.
SUPPLIERS AND CONTRACTORS
Raw Materials
The primary raw materials for copper cathodes and copper concentrates are copper ores
including oxide ores, sulfide ores, and oxide-sulfide mixed ores. During the Track Record
Period, we mainly sourced copper ores from upstream suppliers in Zambia, DR Congo, and
Peru.
During the Track Record Period, the prices of our raw materials experienced fluctuations,
and we take into account such fluctuation in raw material costs when pricing our products. Our
raw materials are commodities that can be readily purchased, taking reference of the quotes
from the London Metal Exchange on public markets at all market prices. Save for the reduction
in sulfide ore and mixed ore market supply disclosed in this prospectus, we did not experience
other material supply shortages that resulted in prolonged suspension of our production
operations during the Track Record Period and up to the Latest Practicable Date.
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We closely monitor the quality of all raw materials provided by our suppliers to ensure
they comply with our quality control requirements. Our quality control system covers the
placing of purchase orders, pre-delivery inspections and laboratory tests. For our existing
suppliers, we evaluate them periodically based on a range of factors, including the quality of
raw materials delivered and punctuality of delivery. In addition, we have undertaken other
quality control measures for raw materials. For more details, see “— Quality Controls.”
Utilities
We consume a substantial amount of electricity in all of our business lines. In particular,
electricity serves as the lifeline of our production activities, with its stability forming the
cornerstone of production output and capacity utilization — since our production equipment
cannot operate without power. As our production capabilities increase and our business grows,
our consumption of electricity is expected to grow accordingly. For our production facilities in
Zambia, we purchase electricity primarily from a power supplier in Zambia, and enter into
electricity supply agreement with such power supplier annually. During the Track Record
Period, we experienced temporary power outages due to our production facility in DR Congo
not being connected to the municipal grid from August 2023 and August 2024, coupled with
insufficient power generation capacity from temporary generators. To enhance production
efficiency and achieve maximum production capacity, we began to purchase imported
electricity from Supplier Q, which is a DR Congo subsidiary of a power supplier in Zambia.
Jinxun DR Congo enters into a grid power supply agreement with Supplier Q and a state-owned
electricity company in DR Congo annually, whereby Supplier Q is responsible for electricity
supply and the state-owned electricity company in DR Congo is responsible for electricity
transmission. We have also installed several diesel generators at our DR Congo copper smelter
I as a backup power source in the event of a power outage, which provides sufficient power
to support our normal production operations. As of the Latest Practicable Date, we have
maintained stable power supply at our production facility in DR Congo. Our utilities costs
constituted approximately 1.2%, 5.3%, 7.9%, 9.6% and 9.8% of our total cost of sales for the
years ended December 31, 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025,
respectively.
Suppliers
During the Track Record Period, our major suppliers consist mainly of commodity traders
of copper ore, non-ferrous metals and chemical products, with connection with both
state-owned enterprises and private companies around the world. Our major suppliers operate
across a range of business segments, primarily including metal ore mining and wholesale
distribution. In the selection of our suppliers, we consider factors such as price, quality,
reliability of supply, lead time, business scale, production capability, and commercial
reputation. We adhere to our procedures to properly manage risks associated with local
suppliers and gather necessary information from suppliers before their engagement. We gather
a broad range of information, including health, safety, environment, community relations,
training and previous contracting experience with us, to assess suppliers’ competence and
ensure they meet the relevant regulatory requirements to conduct their activities. In line with
the industry practice, we may also purchase certain commodities involving agents in
connection with our nonferrous metal trading business in Peru.
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For copper ores, we enter into supply contracts with suppliers in Zambia and DR Congo
monthly or annually. The specifics of each order, such as the amount, price and quality of ores,
are set out in each individual sale contract between us and relevant suppliers. We would
typically stipulate the quality of the copper ores which can be measured by copper
concentration and level of impurities, the transportation arrangement, sampling and assaying
procedures, as well as the price determination mechanism which takes into consideration of
factors such as grade of ore in the supply contracts.
Besides copper ores, most of our other raw materials are purchased on a short-term order
basis or monthly basis from suppliers in China, and in overseas jurisdictions including Peru and
DR Congo. under which we specify the product type, unit price, quantity, delivery timeline and
other items in each purchase order. Payment terms granted by our suppliers vary depending on
a number of factors including the size of the order and the raw materials purchased. While
some of our suppliers require us to make payment in advance or do not grant us credit, our
other suppliers generally provide us with a credit term of no more than 30 days. We typically
settle our trade payables by bank transfers with overseas suppliers and by bank transfers or
bank bills with suppliers in China.
Our quality control, procurement, production planning and warehousing departments
periodically determine the amount and specification of raw materials to purchase based on our
production needs. After placing our purchase orders and upon receiving the raw materials, we
conduct sampling, verification and testing to make sure that the products are in line with our
acceptance standards before settling with them. We also require all of our suppliers to ensure
the products comply with the relevant environmental, health, safety and intellectual property
laws and regulations.
The salient terms of a typical agreement with suppliers are illustrated as below:
 Term: For copper ore and non-ferrous metals, we typically enter into purchase
agreements with our suppliers in Chinese Mainland, Zambia, DR Congo and Peru on
a monthly basis in accordance with our production capacity.
 Pricing : For copper ore and other non-ferrous products, prices are subject to the
procurement coefficient as stipulated in the purchase order to account for
fluctuations in material costs. The quotation will adjust in alignment with the prices
quoted on the London Metal Exchange.
 Settlement and Payment : Our suppliers require settlement in accordance with the
spot average monthly price quoted on the London Metal Exchange. Upon receiving
the confirmation from the results of the ore grade test report, the supplier could
proceed to the settlement with the presence of requisite documents. This report is
issued by us based on scientific analysis of specific batches of ore samples, detailing
the content of useful components or minerals within the ore. It serves as the primary
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basis for determining the ore’s value and settlement payments. We will complete the
payment in accordance with the settlement periods stipulated in the contracts upon
receiving the bill from the supplier.
 Quality control (grade requirement) : Our agreements with suppliers will set forth
the quality control and grade requirement clauses, which strictly regulate the
particle size and standard grade of the products. The final settlement grade is
conditional on the test results issued by laboratory. We have the right to reject the
orders if the suppliers failed to meet the agreed criteria. The agreements also
stipulate the legality clause, that the suppliers will guarantee the legality of the
source of the products and shall bear the legal consequences upon any
contravention.
 Transportation : Our suppliers are responsible for transporting and delivering the
orders to the premises and facilities designated by us.
In 2022, 2023, 2024 and the six months ended June 30, 2025, the purchases from our
largest supplier accounted for 6.1%, 10.5%, 21.2% and 36.3% of our cost of sales, respectively,
while our five largest suppliers for the same periods accounted for 25.1%, 37.6%, 57.8% and
62.1% of our cost of sales, respectively. Purchases from our largest supplier and five largest
suppliers as a percentage of cost of sales in each year/period during the Track Record Period
showed an increasing trend. We believe we maintain good business relationships with our cost
of sales, and we have significant bargaining power over our suppliers as a result of our
advantageous market position. While we benefit from a concentrated supplier portfolio, we
believe we are not reliant on any single or any group of suppliers, and we may engage
alternative supplier as needed without significant difficulties. For risks related to our business
relationships with our suppliers, see “Risk Factors — Risks Relating to Our Business and
Industry — We may be exposed to supplier concentration risk” and “Risk Factors — Risks
Relating to Our Business and Industry — Our copper and cobalt production depends on a
stable, timely and adequate supply of energy, power and raw materials such as water and
chemicals at commercially reasonable prices.” To the best of our knowledge, during the Track
Record Period and up to the Latest Practicable Date, all of our five largest suppliers in each
year/period during the Track Record Period were Independent Third Parties. To the best of our
Directors’ knowledge, none of our Directors or their respective close associates or any person
who, to the knowledge of our Directors, owned more than 5% of our issued share capital, had
any interest in any of our five largest suppliers in each year/period as of the Latest Practicable
Date.
During the Track Record Period and up to the Latest Practicable Date, we did not have
any material disputes with our suppliers.
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The following table sets forth the details of our five largest suppliers in each year/period
during the Track Record Period based on purchases from them.
For the year ended December 31, 2022
Ranking Supplier Principal business
Products/
Services purchased
Y ear of
commencement of
business
relationship
with us
Typical
Credit
terms
Payment
method
Purchase
amount
Percentage of
cost of sales
(RMB’000) %
1 /H1118/H1118/H1118/H1118Supplier A A private company
incepted in Zambia
that engages in the
sales of minerals
and conducts its
business in Zambia
Oxidation copper
ore
2020 10 days Bank
transfer
28,282 6.1
2 /H1118/H1118/H1118/H1118Supplier B A private company
incepted in Zambia
that engages in the
sales of minerals
and conducts its
business in Zambia
Oxidation copper
ore
2020 10 days Bank
transfer
25,184 5.4
3 /H1118/H1118/H1118/H1118Supplier C A private company
incepted in Zambia
that engages in the
sales of minerals
and conducts its
business in Zambia
Oxidation copper
ore
2019 10 days Bank
transfer
24,055 5.2
4 /H1118/H1118/H1118/H1118Supplier D A state-owned company
incepted in Qinghai
Province that
engages in mining
and the sales of
minerals and
conducts its
business in Chinese
Mainland
Non-ferrous metal
products
2017 3 days Bank
transfer
21,021 4.5
5 /H1118/H1118/H1118/H1118Supplier E A private company
incepted in Zhejiang
Province that
engages in the sales
of minerals and
conducts its
business in Chinese
Mainland
Trading business
for non-ferrous
metal
2022 5 days Bank
transfer
18,397 3.9
Total 116,939 25.1
Note:
(1) We became acquainted with Suppliers A, B, C, D and E through formal business inquiries and engagement as
part of our efforts to secure and expand our supply chain in response to growing production capacity.
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For the year ended December 31, 2023
Ranking Supplier Principal business
Products/
Services purchased
Y ear of
commencement of
business
relationship
with us
Typical
Credit
terms
Payment
method
Purchase
amount
Percentage of
cost of sales
(RMB’000) %
1 /H1118/H1118/H1118/H1118Supplier F A private company
incepted in DR
Congo that engages
in the sales of oxide
minerals and
conducts its
business in DR
Congo
Oxidation copper
ore
2023 As agreed
upon on
a per
order
basis
Bank
transfer
57,065 10.5
2 /H1118/H1118/H1118/H1118Supplier G A private company
incepted in Zambia
that engages in the
sales of oxide
minerals and
conducts its
business in Zambia
Oxidation copper
ore
2023 10 days Bank
transfer
51,798 9.5
3 /H1118/H1118/H1118/H1118Supplier H A state-owned company
incepted in Y unnan
Province that
engages in the sales
of minerals and
conducts its
business in Chinese
Mainland
Non-ferrous metal
products
2023 1 day Bank
transfer
40,300 7.4
4 /H1118/H1118/H1118/H1118Supplier I A private company
incepted in Zambia
that engages in the
sales of oxide
minerals and
conducts its
business in Zambia
Oxidation copper
ore
2021 10 days Bank
transfer
38,224 7.0
5 /H1118/H1118/H1118/H1118Supplier J A private company
incepted in DR
Congo that engages
in the sales of
sulfuric acid and
conducts its
business in DR
Congo
Sulfuric acid 2023 15 days Bank
transfer
17,652 3.2
Total 205,039 37.6
Notes:
(1) We became acquainted with Suppliers F, G, H and J through formal business inquiries and engagement as part
of our efforts to secure and expand our supply chain in response to growing production capacity.
(2) We have acquainted with Supplier I through introduction by mutual industry customers who had long-standing
cooperation with Supplier I.
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For the year ended December 31, 2024
Ranking Supplier Principal business
Products/
Services purchased
Y ear of
commencement of
business
relationship
with us
Typical
Credit
terms
Payment
method
Purchase
amount
Percentage of
cost of sales
(RMB’000) %
1 /H1118/H1118/H1118/H1118Supplier F A private company
incepted in DR
Congo that engages
in the sales of oxide
minerals and
conducts its
business in DR
Congo
Oxidation copper
ore
2023 As agreed
upon on
a per
order
basis
Bank
transfer
296,694 21.2
2 /H1118/H1118/H1118/H1118Supplier K A private company
incepted in Y unnan
Province that
engages in the sales
of non-ferrous
metals and conducts
its business in
Chinese Mainland
Non-ferrous metal
products
2024 C/C Bank
transfer
173,684 12.4
3 /H1118/H1118/H1118/H1118Supplier L A private company
incepted in DR
Congo that engages
in the sales of oxide
minerals and
conducts its
business in DR
Congo
Oxidation copper
ore
2024 30 days Bank
transfer
144,477 10.3
4 /H1118/H1118/H1118/H1118Supplier M A private company
incepted in Peru
that engages in the
sales of silver ores
and conducts its
business in Peru
Silver mine 2024 Payment in
batches
Bank
transfer
128,966 9.2
5 /H1118/H1118/H1118/H1118Supplier N A private company
incepted in DR
Congo that engages
in the sales of oxide
minerals and
conducts its
business in DR
Congo
Oxidation copper
ore
2024 30 days Bank
transfer
66,227 4.7
Total 810,228 57.8
Note:
(1) We became acquainted with Suppliers K, L, M and N through formal business inquiries and engagement as part
of our efforts to secure and expand our supply chain in response to growing production capacity.
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For the six months ended June 30, 2025
Ranking Supplier Principal business
Products/
Services purchased
Y ear of
commencement of
business
relationship
with us
Typical
Credit
terms
Payment
method
Purchase
amount
Percentage of
cost of sales
(RMB’000) %
1 /H1118/H1118/H1118/H1118Supplier F A private company
incepted in DR
Congo that engages
in the sales of oxide
minerals and
conducts its
business in DR
Congo
Oxidation copper
ore
2023 As agreed
upon on
a per
order
basis
Bank
transfer
269,167 36.3
2 /H1118/H1118/H1118/H1118Supplier O A state-owned company
incepted in Beijing
that engages in the
investment and
operational
management of
mines globally
Sulfuric acid 2017 30 days Bank
transfer
62,102 8.4
3 /H1118/H1118/H1118/H1118Supplier P A private company
incepted in Peru
that engages in
mineral mining
Copper concentrate 2024 30 days Bank
transfer
56,599 7.6
4 /H1118/H1118/H1118/H1118Supplier Q A private company
incepted in DR
Congo that engages
in power supply
Electricity 2023 15 days Bank
transfer
50,223 6.8
5 /H1118/H1118/H1118/H1118Supplier N A private company
incepted in DR
Congo that engages
in the sales of oxide
minerals and
conducts its
business in DR
Congo
Oxidation copper
ore
2024 30 days Bank
transfer
22,076 3.0
Total 460,166 62.1
Note:
(1) We have acquainted with Suppliers O, P , and Q through formal business inquiries and engagement during the
course of our business expansion.
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The composition of our five largest suppliers during the Track Record Period underwent
significant changes. This was primarily due to our strategic arrangements tailored to the
characteristics of the raw material supply market, as well as the stability, compliance, and
quality requirements to meet the commissioning and ramp-up requirements of DR Congo
copper smelter I. In particular, some customers have imposed stringent compliance
requirements on the supply chain, necessitating comprehensive traceability audits and ESG
standard assessments of upstream suppliers. To meet these requirements, we have shifted to
procure more from suppliers that can comply with these standards. Additionally, we regularly
review the quality of raw materials supplied by our suppliers to ensure alignment with
production plans. V ariations in ore characteristics from different sources directly determine the
grade and market value of the final product, thereby impacting profitability. Consequently,
supplier selection and quality control are paramount. Thus, we adjusted our procurement plan
to increase purchases from suppliers capable of providing ore with our preferred
characteristics, thereby enhancing production efficiency. Certain suppliers became our five
largest suppliers shortly after their establishment, primarily because we chose to procure from
these newly established companies after receiving purchase orders from our customers as they
offered more competitive prices. Furthermore, certain suppliers became our five largest
suppliers shortly after their commencement of business relationships with us, as we
strategically shifted to establish partnership with ore suppliers possessing mining experience,
stable supply capabilities, and ore grades that meet our production requirements to maintain
stable raw material supply, considering that most established foreign and state-owned mining
companies tend to operate their own smelters and process their ores internally rather than
selling them externally in recent years.
Use of Trading Agents in Peru
In connection with our non-ferrous metal trading business in Peru, our Peruvian
subsidiary, Jinxun Peru, procures copper concentrates and other non-ferrous metals from local
suppliers. To support the execution of these purchases and to enhance capital efficiency, Jinxun
Peru would first procure products from suppliers (the “ Procurement ”), then the Group would
sell the products procured from suppliers to third-party trading agents (the “ Sale ”), who then
sell the same products to subsidiaries of the Group (the “ Onward Sale ”), typically in the PRC.
In terms of fund flow, the trading agent prepays Jinxun Peru, which in turn pays its suppliers
and subsequently another subsidiary of the Group in the PRC or Singapore pays the trading
agent. The trading agent earns a margin between the two contracts and does not assume
inventory or market risk, which was approximately 10% during the Track Record Period. Such
margin was determined through negotiation between us and the trading agents.
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The following diagram illustrates the flows of goods and funds under the arrangement
with the use of trading agents in Peru:
Peru Supplier Jinxun Peru
Begins procurement upon
receiving payment of goods
from the trading agent
Consolidation of
goods at port
Flow of funds
Flow of goods
Peru
Port
Domestic
Port
Issues bill of lading
upon shipment
Bill of lading
and delivery Our subsidiaries Customers
Shipment
Arrives
at portTrading Agent
Domestic Phase in Peru Export Phase
Payment of goods from
affiliated companies upon arrival of
goods at domestic port
Transaction Phase of Affiliated Companies Final Transaction Phase
Shipment
Prepayment (before
issuance of bill of lading) Cash-and-carry model,
payment of goods
Cash settlement
The primary purpose of engaging trading agents is to leverage the supply chain financing
capabilities of these trading agents, rather than to comply with relevant laws or regulations in
Peru. Under this model, the agents essentially assists Jinxun Peru in paying the Group’s
suppliers, thereby enabling Jinxun Peru to complete more procurement cycles within a shorter
time frame without relying solely on its own working capital. This has allowed Jinxun Peru to
expand its procurement scale in Peru, accelerate inventory turnover, and strengthen its ability
to meet downstream demand in the PRC.
The transaction involves two sequential contracts after the Procurement, which govern:
(i) the Sale by Jinxun Peru to the trading agent; and (ii) the Onward Sale by the trading agent
to a subsidiary of the Group. Title to the goods passes from Jinxun Peru to the agent upon
shipment or delivery for the Sale, and from the trading agent to the subsidiary of the Group at
the point of the Onward Sale. The primary function of the trading agents is to provide interim
funding and enable cross-border settlement. This arrangement does not involve third-party
bank lending or derivative financing structures. We chose to obtain interim funding through the
trading agent arrangements rather than other means of financing after comprehensively
evaluating the feasibility and efficiency of various financing channels, based on the following
considerations: (i) the local financing environment in Peru primarily relies on banking
channels, with relatively limited financing instruments available; (ii) Jinxun Peru lacks
sufficient collateral to meet traditional bank loan guarantee requirements, making it unable to
obtain corresponding bank financing; and (iii) bank credit approval processes are lengthy,
making it difficult to match our operational cycle requirements for timely and efficient capital
utilization. In contrast, the supply chain finance services provided by trading agents facilitate
timely payments to suppliers, effectively supporting procurement cycle operations and
enhancing capital utilization efficiency. Consequently, we believe this arrangement, as a
supplement to traditional financing methods, offers greater flexibility and timeliness, helping
Jinxun Peru maintain operational resilience under capital constraints.
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The fund flow mirrors the transaction structure as described above. The margin between
the aforementioned sequential contracts constitute the agent’s financing cost involved in the
transactions. From an accounting perspective, the sales by Jinxun Peru to the trading agent and
the Onward Sale by the trading agent to a subsidiary of the Group (i.e. purchase from the
trading agent) are eliminated in the consolidated financial statements with the differences (i.e.
the surcharge by the trading agent) recorded as part of cost of sales.
According to Frost & Sullivan, this type of supply-chain-financed, agent-mediated
structure is a widely adopted and commercially mature model in the international non-ferrous
metal trading industry, particularly in markets such as Peru, where procurement volumes are
large and liquidity efficiency is key. During the Track Record Period, we engaged six
independent third-party trading agents, which are commodity trading companies providing
supply chain finance service. These commodity trading companies possess established
operational systems and extensive experience in commodity trading and supply chain finance
services. In 2022, 2023, 2024 and the six months ended June 30, 2025, the purchase amount
through the use of trading agents in relation to the non-ferrous metal trading business amounted
to RMB59.4 million, RMB90.9 million, RMB127.1 million and RMB95.3 million,
respectively, accounting for approximately 12.7%, 16.7%, 9.1% and 12.9% of our cost of sales.
During the Track Record Period, the surcharges charged by the trading agents amounted to
RMB4.1 million, RMB1.6 million, RMB2.6 million and RMB1.6 million in 2022, 2023, 2024
and the six months ended June 30, 2025, respectively, which were recorded in cost of trading
goods under cost of sales to better reflect the gross margin of our trading business. We have
adopted internal control procedures to ensure the commercial rationale, counterparty risk, and
transactional fairness of these arrangements are adequately reviewed and monitored in
accordance with industry standards, including: (i) periodically assessing customers’ and
suppliers’ creditworthiness, operational strength, and potential risks; (ii) reviewing whether
arrangements involving the use of trading agents comply with industry practices and requiring
approvals from both legal and finance departments during the contract approval process; (iii)
requiring that the occupancy cost rates shall not exceed the interest rates we could obtain for
similar financing in the open market and shall adhere to fair transaction principles; (iv) strictly
complying with payment terms specified in the relevant agreements; and (v) requiring payment
requests to be accompanied by supporting documents such as contracts, invoices, and approval
records. As advised by our legal advisors as to Peruvian laws, the Group’s trading agent
arrangement had been in compliance with relevant laws and regulations in Peru in all material
respects during the Track Record Period and up to the Latest Practicable Date.
SALES AND MARKETING
We primarily market and sell our products of copper cathodes and copper concentrates to
customers in China, Hong Kong, Singapore and Europe, and trade non-ferrous metal products
to customers in China. As of June 30, 2025, we had a sales and marketing team of 28 personnel
in China, focusing on business development, customer service and industry coverage. Our sales
and marketing team is responsible for both domestic and overseas markets for each of our
copper cathode and copper concentrate business lines. They analyze the dynamics of existing
customers and trends in key markets to determine where opportunities exist, and implement
strategies across different regions.
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Our sales and marketing team regularly contacts our existing and potential customers
about our current offerings and development plans. They also gather feedback from customers
on our products and assist us in understanding and responding to the customization and other
demands as to our products. Besides maintaining frequent communication with our existing
customers, our sales and marketing team also seeks to expand our customer base through
presenting our strength and showcasing our products and services to potential customers.
In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, our distribution
and selling expenses were RMB9.5 million, RMB10.2 million, RMB11.6 million, RMB5.2
million and RMB6.3 million, respectively, accounting for 1.5%, 1.5%, 0.7%, 0.9% and 0.6%,
of our revenue during the same years/periods, respectively.
Pricing
We price our products based on the quotations listed on the London Metal Exchange, the
Shanghai Futures Exchange, the Shanghai Metals Market and the Shanghai Gold Exchange, as
well as the grade of our products. The prices of our products are also affected by the global and
domestic economic environment and the demand for products as well as market competition in
the relevant industry.
Customers
During the Track Record Period, we have fostered a large-scale customer base spanning
copper cathodes trading companies, copper concentrates and non-ferrous metal producers and
traders in Chinese Mainland. We serve a broad range of state-owned enterprises and private
companies in the mining and metallurgy industries in China. Our customer base was
comparatively limited and stable prior to 2024 in light of our production capacity. Commencing
from 2024, we have started engaging and trading with customers through online and offline
public inquiries. With our production capacity piling up, we have been approached by an
increased number of customers with inquiries of product prices and payment channels. To
diversify and foster our customer base, we took both price quotations and payment methods
into account when selecting new customers. During the Track Record Period, we have
experienced a moderate change of the composition of our major customers, primarily due to an
enlarged volume of inquiries from newly-acquired customers in relation to product prices in the
aftermath of the production capacity enhancement in the DR Congo. Besides, the fluctuations
in rankings among our major customers during the Track Record Period reflect the changes in
supply-demand of products from our major customers. We believe that our customer
composition will stabilize when our production capacity stabilizes.
Over the years, our ability to consistently meet and exceed our customers’ high quality
and sophisticated requirements has allowed us to develop and retain strong relationships with
them and attract more globally leading customers. We typically receive purchase orders from
our customers on a regular basis. Each purchase order sets forth the terms and conditions of
the specified order, including the pricing terms, specifications of our products to be provided,
quantity and date of delivery. We make our production planning based on client demands and
market condition. In general, our customers negotiate the selling prices and confirm the
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product specifications with us after providing us with a forecast, showing the overall volume
of products they expect to order from us during the specified period covered by the forecast.
While these forecasts are not binding, we generally secure and allocate our internal resources
to plan for our production and manage our inventory level in accordance with these forecasts,
subject to any downward or upward revisions that our customers may make. Our sales of
products are usually settled by wire transfer, and we generally require our customers to make
95% payment before the products leave our production facilities and 5% payment within one
to two months after shipment.
A significant amount of revenue was contributed by our top customers in the Track
Record Period. In 2022, 2023, 2024 and six months ended June 30, 2025, the sales to our
largest customer accounted for 44.2%, 28.5%, 15.0% and 24.6% of our total revenue,
respectively, while our five largest customers for the same years/periods accounted for 79.9%,
78.4%, 56.9% and 67.8% of our total revenue, respectively. In addition, sales to our five largest
metal trading customers for the years ended December 31, 2022, 2023, 2024 and the six months
ended June 30, 2024 and 2025 amounted to RMB448.4 million, RMB520.6 million,
RMB1,008.1 million and RMB653.6 million, accounting for 70.4%, 77.1%, 57.0% and 67.8%
of our total revenue in those years/periods, respectively. In the metal processing industry, this
level of concentration is in line with the market, according to Frost & Sullivan. We believe that
we do not rely on any particular customer to maintain our current level of profitability and
would not need to find replacement if any major customer ceases to conduct business with us.
This is evidenced by our shift in customer portfolio in 2024. See “Risk Factors — Risks
Relating to Our Business and Industry — We may be exposed to customer concentration risk.”
The salient terms of a typical agreement with customers relating to copper cathodes and
copper concentrates are set forth as following:
Material and quality clauses : For copper cathodes, we typically enter into sales
agreements with our customers with the incorporation of several material and quality clauses
at the forefront of the agreements, spanning the level of the copper cathodes or concentrates,
origin of the raw materials, dimensions, packaging and quantity descriptions as agreed between
the parties. The customers are entitled to reject the orders if the products contain any excessive
or contaminated elements.
Pricing : For copper cathodes and concentrates, prices will be determined in accordance
with the average LME Cash Settlement Price over quotation period (i.e. M+N
(1)), minus the
applicable discount level stipulated in the agreement (which is determined by the grade
indicated in the test report, logistics costs, insurance expenses, and/or market conditions).
Under the free carrier model, the customer shall bear the logistics costs; whereas under the
direct delivery model, the logistics costs shall be borne by us. This pricing basis is in line with
the industry norm, according to Frost & Sullivan.
Note:
(1) M typically denotes the month of shipment, while N represents the specific number of months after the month
of shipment.
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Delivery and transportation : Our agreements typically prescribe dual ways for delivery:
(i) free carrier model, whereby we provide the information with respect to the pickup location
to the customers and the customers send trucks to the pickup location on time to pick up the
products; and (ii) direct delivery model, whereby we are responsible for delivering copper
concentrates to the customers’ designated port for pickup. For the second method, we normally
entrust qualified third-party logistics providers to complete the delivery. Our customers also
require that all materials purchased from us are duly licensed for exporting from the relevant
jurisdictions.
Payment : We normally require a 95% of provisional value in U.S. dollar to be settled once
we have sent the requisite documents to the customers, including the invoice, packing list and
other certificates. Customers are typically required to pay the remaining 5% upon receipt of the
final invoice issued by us according to the pre-agreed quotation period, which is usually within
one to two months after shipment. Customers are obliged to facilitate the payments within three
to five working days.
The salient terms of a typical agreement with customers in connection with non-ferrous
metals are set forth as following:
Material and quality clauses : For non-ferrous metals, we typically enter into sales
agreements with our customers with the insertion of certain quality and technical standards
clauses. We are subject to payment deductions if the purity of the non-ferrous metals fails to
comply with the pre-agreed standards.
Pricing : For non-ferrous metals, the prices are calculated by reference to the actual
quantity delivered to the customers. Some of our customers may refer to the monthly average
prices published by the authorized metal trading websites
(1) when negotiating prices with us.
Delivery and transportation : We are responsible for delivering the products to the
premises and facilities designated by our customers. We will entrust qualified third-party
logistics providers to complete the delivery.
Payment : We typically require upfront payments upon confirmation of the orders from the
customers. We shall arrange products shipping once the payment has been received.
Note:
(1) For transactions with overseas customers, authorized metal trading websites typically include official websites
of London Metal Exchange, London Bullion Market Association, and Metal Bulletin; while for transactions
with customers in the Chinese Mainland, authorized metal trading websites typically include official websites
of Shanghai Futures Exchange, Shanghai Metals Market, and Shanghai Gold Exchange, as well as
www.ebaiyin.com .
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To the best of our knowledge, during the Track Record Period and up to the Latest
Practicable Date, all of our five largest customers in each year/period during the Track Record
Period were Independent Third Parties. To the best of our Directors’ knowledge, none of our
Directors or their respective close associates or any person who, 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 as of the Latest Practicable Date. Our Directors confirm
that, to the best of our knowledge, after making reasonable inquiries and exercising reasonable
care, save for the sales transactions disclosed in this prospectus, there had been no other or
former relationships between the Group and any of our five largest customers during the Track
Record Period.
During the Track Record Period and up to the Latest Practicable Date, we did not have
any material disputes with our customers.
The following tables set out the details of our five largest customers in each year/period
based on their revenue contribution during the Track Record Period.
For the year ended December 31, 2022
Ranking Customer Principal business
Products sold/
Services provided
Y ear of
commencement
of business
relationship
with us
Typical
credit
terms
Payment
method Revenue
Percentage of
total revenue
(RMB’000) %
1 /H1118/H1118/H1118/H1118/H1118Customer A A state-owned group
incepted in Beijing
in January 1997
with a registered
capital of RMB6.1
billion that
primarily engages in
mining, processing
and trading of non-
ferrous metals.
Copper cathodes
and
concentrates
2017 5 days* Bank transfer 281,428 44.2
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Ranking Customer Principal business
Products sold/
Services provided
Y ear of
commencement
of business
relationship
with us
Typical
credit
terms
Payment
method Revenue
Percentage of
total revenue
(RMB’000) %
2 /H1118/H1118/H1118/H1118/H1118Customer B A private company
incepted in British
Virgin Islands in
November 2003
with a registered
capital of US$20.0
million that
primarily engages in
trading of non-
ferrous metals, with
its principal place of
business being in
Beijing.
Copper cathodes 2022 3 days* Bank transfer 107,295 16.8
3 /H1118/H1118/H1118/H1118/H1118Customer C A state-owned company
incepted in Henan
Province in August
2013 with a
registered capital of
RMB1.5 billion that
primarily engages in
non-ferrous metal
smelting and rolling
processing.
Trading business
for non-ferrous
metal
2022 5 days Bank transfer 74,563 11.7
4 /H1118/H1118/H1118/H1118/H1118Customer D A state-owned company
incepted in
Shanghai in
November 2018
with a registered
capital of
RMB600.0 million
that primarily
engages in trading
of copper and other
non-ferrous metals.
Trading business
for non-ferrous
metal
2019 30 days Bank transfer 24,063 3.8
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Ranking Customer Principal business
Products sold/
Services provided
Y ear of
commencement
of business
relationship
with us
Typical
credit
terms
Payment
method Revenue
Percentage of
total revenue
(RMB’000) %
5 /H1118/H1118/H1118/H1118/H1118Customer E A private company
incepted in Gansu
Province in January
2002 with a
registered capital of
RMB40.0 million
that primarily
engages in
processing of non-
ferrous metals.
Trading business
for non-ferrous
metal
2019 7 days Bank transfer 21,526 3.4
Total 508,875 79.9
Note:
(1) We became acquainted with Customers A, B, C, D and E through ordinary business development activities and
direct commercial engagement.
* Refers to the typical credit terms for the 5% of the price not paid upfront
For the year ended December 31, 2023
Ranking Customer Principal business
Products sold/
Services provided
Y ear of
commencement
of business
relationship
with us
Typical
credit
terms
Payment
method Revenue
Percentage of
total revenue
(RMB’000) %
1 /H1118/H1118/H1118/H1118/H1118Customer B A private company
incepted in British
Virgin Islands in
November 2003
with a registered
capital of US$20.0
million that
primarily engages in
trading of non-
ferrous metals, with
its principal place of
business being in
Beijing.
Copper cathodes 2022 3 days* Bank transfer 192,513 28.5
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Ranking Customer Principal business
Products sold/
Services provided
Y ear of
commencement
of business
relationship
with us
Typical
credit
terms
Payment
method Revenue
Percentage of
total revenue
(RMB’000) %
2 /H1118/H1118/H1118/H1118/H1118Customer D A state-owned company
incepted in
Shanghai in
November 2018
with a registered
capital of
RMB600.0 million
that primarily
engages in trading
of copper and other
non-ferrous metals.
Trading business
for non-ferrous
metal
2019 30 days Bank transfer 124,466 18.4
3 /H1118/H1118/H1118/H1118/H1118Customer A A state-owned group
incepted in Beijing
in January 1997
with a registered
capital of RMB6.1
billion that
primarily engages in
mining, processing
and trading of non-
ferrous metals.
Copper cathodes
and
concentrates
2017 5 days* Bank transfer 92,960 13.8
4 /H1118/H1118/H1118/H1118/H1118Customer C A state-owned company
incepted in Henan
Province in August
2013 with a
registered capital of
RMB1.5 billion that
primarily engages in
non-ferrous metal
smelting and rolling
processing.
Trading business
for non-ferrous
metal
2022 5 days Bank transfer 61,671 9.1
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Ranking Customer Principal business
Products sold/
Services provided
Y ear of
commencement
of business
relationship
with us
Typical
credit
terms
Payment
method Revenue
Percentage of
total revenue
(RMB’000) %
5 /H1118/H1118/H1118/H1118/H1118Customer F A state-owned company
incepted in Hong
Kong in May 2011
with a registered
capital of US$40.0
million that mainly
engages in scientific
instruments, supply
chain management
and commodity
trading and conducts
business in China.
Copper cathodes 2023 10 days* Bank transfer 58,324 8.6
Total 529,934 78.4
Note:
(1) We have acquainted with Customer F following initial contact at an industry conference or forum.
* Refers to the typical credit terms for the 5% of the price not paid upfront
For the year ended December 31, 2024
Ranking Customer Principal business
Products sold/
Services provided
Y ear of
commencement
of business
relationship
with us
Typical
credit
terms
Payment
method Revenue
Percentage of
total revenue
(RMB’000) %
1 /H1118/H1118/H1118/H1118/H1118Customer B A private company
incepted in British
Virgin Islands in
November 2003
with a registered
capital of US$20.0
million that
primarily engages in
trading of non-
ferrous metals, with
its principal place of
business being in
Beijing.
Copper cathodes 2022 3 days* Bank transfer 266,201 15.0
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Ranking Customer Principal business
Products sold/
Services provided
Y ear of
commencement
of business
relationship
with us
Typical
credit
terms
Payment
method Revenue
Percentage of
total revenue
(RMB’000) %
2 /H1118/H1118/H1118/H1118/H1118Customer G A private company
incepted in
Singapore in May
2023 with a
registered capital of
SGD100.0 that
mainly engages in
commodity trading
and conducts
business in many
jurisdictions in the
world.
Copper cathodes 2024 5 days* Bank transfer 233,377 13.2
3 /H1118/H1118/H1118/H1118/H1118Customer H A state-owned company
incepted in Y unnan
Province in January
2014 with a
registered capital of
RMB1.8 billion that
primarily engages in
sales of petroleum
products, minerals
and industrial
chemicals.
Trading business
for non-ferrous
metal
2024 C/C Bank transfer 173,916 9.8
4 /H1118/H1118/H1118/H1118/H1118Traxys Europe S.A. A global commodity
trading firm
incepted in
Luxembourg in
December 2005 with
a registered capital
of US$9.0 million
engaging in
sourcing, marketing,
financing and
logistics of metals
and minerals.
Copper cathodes 2024 3 days* Bank transfer 170,167 9.6
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Ranking Customer Principal business
Products sold/
Services provided
Y ear of
commencement
of business
relationship
with us
Typical
credit
terms
Payment
method Revenue
Percentage of
total revenue
(RMB’000) %
5 /H1118/H1118/H1118/H1118/H1118Customer I A private company
incepted in
Switzerland in June
1996 with a
registered capital of
CHF3.0 million that
mainly engages in
sourcing of metals
and minerals and
conducts business in
many jurisdictions
in the world.
Copper cathodes 2023 3 days* Bank transfer 164,475 9.3
Total 1,008,136 56.9
Notes:
(1) We became acquainted with Customers G and I following initial contact at an industry conference or forum.
(2) We became acquainted with Customer H through ordinary business development activities and direct
commercial engagement.
* Refers to the typical credit terms for the 5% of the price not paid upfront
For the six months ended June 30, 2025
Ranking Customer Principal business
Products sold/
Services provided
Y ear of
commencement
of business
relationship
with us
Typical
Credit
terms
Payment
method Revenue
Percentage of
total revenue
(RMB’000) %
1 /H1118/H1118/H1118/H1118/H1118Customer K A state-owned company
incepted in Xiamen
in November 1995
with a registered
capital of RMB1.8
billion that
primarily engages in
commodity supply
chain and urban
development and
operations.
Copper cathodes 2024 3 days Bank transfer 237,235 24.6
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Ranking Customer Principal business
Products sold/
Services provided
Y ear of
commencement
of business
relationship
with us
Typical
Credit
terms
Payment
method Revenue
Percentage of
total revenue
(RMB’000) %
2 /H1118/H1118/H1118/H1118/H1118Customer G A private company
incepted in
Singapore in May
2023 with a
registered capital of
SGD100.0 that
mainly engages in
commodity trading
and conducts
business in many
jurisdictions in the
world.
Copper cathodes 2024 3 days* Bank transfer 150,760 15.6
3 /H1118/H1118/H1118/H1118/H1118Customer I A private company
incepted in
Switzerland in June
1996 with a
registered capital of
CHF3.0 million that
mainly engages in
sourcing of metals
and minerals and
conducts business in
many jurisdictions
in the world.
Copper cathodes 2023 3 days* Bank transfer 128,917 13.4
4 /H1118/H1118/H1118/H1118/H1118Customer B A private company
incepted in British
Virgin Islands in
November 2003
with a registered
capital of US$20.0
million that
primarily engages in
trading of
nonferrous metals,
with its principal
place of business
being in Beijing.
Copper cathodes 2022 3 days* Bank transfer 78,255 8.1
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Ranking Customer Principal business
Products sold/
Services provided
Y ear of
commencement
of business
relationship
with us
Typical
Credit
terms
Payment
method Revenue
Percentage of
total revenue
(RMB’000) %
5 /H1118/H1118/H1118/H1118/H1118Customer L A private company
incepted in
Singapore in
January 2020 with a
registered capital of
US$1.0 million that
primarily engages in
trading of
nonferrous metals.
Copper cathodes 2024 3 days Bank transfer 58,393 6.1
Total 653,561 67.8
Note:
(1) We became acquainted with Customers K and L through ordinary business development activities and direct
commercial engagement.
* Refers to the typical credit terms for the 5% of the price not paid upfront
OVERLAPPING OF CUSTOMERS AND SUPPLIERS
To expand our production capacity, secure the quality of the raw materials for producing
our copper cathodes and concentrates, we constantly seek procurement of superior raw
materials from renowned domestic and overseas suppliers. Leveraging our enhanced
production capacity and competitive product quality, we have fostered our customer base to
encompass a number of copper and non-ferrous metal traders and producers, which resulted in
overlapping customers and suppliers.
In 2022 and 2023, three and two of our five largest customers, respectively, were also our
suppliers, from whom we procured raw materials. Our purchase amount attributable to these
customer-suppliers accounted for 5.9% and 10.8% of our cost of sales in 2022 and 2023,
respectively. Our sales amount attributable to these supplier-customers accounted for 47.9%
and 22.4% of our total revenue in 2022 and 2023, respectively.
Supplier H, one of our five largest suppliers in 2023, is a wholly-owned subsidiary of
Customer F, which served as one of our five largest customers in 2023. Supplier H contributed
to RMB40.3 million and nil of our cost of sales in years ended December 31, 2023 and 2024
respectively. Customer F, on the other hand, contributed RMB58.3 million and RMB123.5
million of our revenue in the same years, respectively, with gross profit margins of 23.3% and
33.5%, respectively. The volume of raw materials we procured from Supplier H amounted to
598.2 tons and nil tons in years ended December 31, 2023 and 2024, respectively. The amount
BUSINESS
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of copper cathodes purchased by Customer F from us amounted to 1,150.7 tons and 2,055.6
tons in the same years, respectively. Customer F primarily engages in the business of sales of
metal ores, metal materials and non-ferrous alloys. Supplier H, being the wholly-owned
subsidiary of Customer F, engages in the business of wholesaling of oxide mineral products.
In light of our production capacity, we procured raw materials including copper concentrate
from Supplier H. Likewise, Customer F purchased our copper cathodes in the same years. The
overlapping purchases and sales were based on genuine business needs and dealings.
According to Frost & Sullivan, it is an industry norm to have sales and purchases with other
players. The arrangements aforementioned with both Supplier H and Customer F were neither
bundled nor on a back-to-back trading basis. Instead, the arrangements allowed us to maintain
a stable supply chain with respect to the raw materials.
Supplier D, one of our five largest suppliers in 2022, is affiliated to the same ultimate
controlling shareholder of Customer D, which served as one of our five largest customers in
2022 and 2023. Supplier D contributed to RMB21.0 million and nil of our cost of sales in years
ended December 31, 2022 and 2023, respectively. Customer D, on the other hand, contributed
to RMB24.1 million and RMB124.5 million of our revenue in the same years, respectively,
with gross profit margins of 0.1% and negative 1.1%, respectively. We recorded gross loss
margin in 2023 because we did not fully meet the supply volume requested by Customer D in
2023, which led to a reduced sales settlement amount. The amount of copper and zinc
concentrates we procured from Suppliers D amounted to 274.0 tons and 804.8 tons in the year
ended December 31, 2022, respectively. The amount of copper concentrates and silver ores
purchased by Customer D from us amounted to 388.0 tons and 1.0 tons in the year ended
December 31, 2022, respectively, and 2,032.1 tons and 33.3 tons in the year ended December
31, 2023, respectively. Supplie r D a state-owned enterprise mainly engages in the business of
mining and selling of mineral products whilst Customer D is a state-owned enterprise mainly
engages in the sales of metal ores, metal materials and non-ferrous alloys. The overlapping
purchases and sales occurred in the Track Record Period were due to genuine business needs
and dealings. According to Frost & Sullivan, it is an industry norm to have sales and purchases
with other players. The arrangements aforementioned with both Supplier D and Customer D
were neither bundled nor on a back-to-back trading basis. Instead, they were negotiated and
entered through separate processes due to Supplier D and Customer D are under difference
corporate groups.
Customer A, one of our five largest customers in 2022 and 2023, was also one of our five
largest suppliers in the six months ended June 30, 2025, namely Supplier O. During the Track
Record Period, we primarily procured sulfuric acid from Supplier O. Customer A primarily
procured copper cathodes and concentrates from us in 2022 and 2023. Purchases from Supplier
O contributed to RMB6.6 million, RMB18.8 million, RMB63.6 million and RMB62.1 million
of our cost of sales in 2022, 2023, 2024 and the six months ended June 30, 2025, respectively;
while revenue generated from the sales to Customer A contributed to RMB281.4 million,
RMB93.0 million, RMB0.9 million and RMB1.2 million of our revenue in 2022, 2023, 2024
and the six months ended June 30, 2025, respectively, with gross profit margins of 41.3%,
35.5%, negative 215.5% and 43.1% respectively.
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Our aggregate sales to our five largest overlapping customers and suppliers amounted to
RMB305.5 million, RMB151.3 million, nil and nil in years ended December 31, 2022, 2023,
2024 and the six months ended June 30, 2025, accounting for 47.9%, 22.4%, nil and nil of our
total sales in the same years/periods, respectively. Our aggregate purchases from our five
largest overlapping customers and suppliers amounted to RMB27.6 million, RMB59.1 million,
nil and nil in years ended December 31, 2022, 2023, 2024 and the six months ended June 30,
2025, accounting for 5.9%, 10.8%, nil and nil of our cost of sales in the same years/periods,
respectively.
During the Track Record Period, our gross profit margins generated from our overlapping
customers and suppliers were commensurate with those generated from our other customers
Our negotiations of the terms in the sales and purchase agreements in connection with the
overlapping customers and suppliers were conducted on a case-by-case basis and were not
inter-conditional with each other. During the Track Record Period, there were no bundled or
back-to-back trading arrangements and the key terms among overlapping customers and
suppliers are generally not deviated from those of our other customers and suppliers.
Considering that the pricing model and credit policy applied to our overlapping customers and
suppliers, as well as the gross profit margins generated from our overlapping customers and
suppliers, were commensurate with those generated from our other customers, our Directors
are of the view that these arrangements are within our ordinary course of business and under
normal commercial terms. Our Directors further confirm that the terms and transactions were
in conformity with industry norm, namely, certain suppliers or customers are multinational
enterprises or large state-owned enterprises which differentiate business lines through various
of subsidiaries. It is in line with the industry norm for having certain subsidiaries selling raw
materials to us whilst other subsidiaries in the same group may purchase copper cathodes and
non-ferrous metals from us to meet their demand. Our Directors confirm that none of the
products procured by the Group from each of the relevant suppliers were subsequently sold by
the Group to customers within the same overlapping supplier-customer group.
INVENTORY MANAGEMENT
Our inventory primarily consists of raw materials, spare parts and consumables,
work-in-progress and finished goods. We use our system to assist us in planning and managing
our inventory control. We conduct inventory review and aging analysis on a regular basis. Our
team monitors our inventory levels, inventory age, inventory composition and inventory
turnover rate. We also carry out physical stock counts on a regular basis. In 2022, 2023, 2024
and the six months ended June 30, 2024 and 2025, our inventory turnover days were 54 days,
80 days, 80 days, 94 days and 104 days, respectively. To ensure a stable supply of copper raw
materials, as well as a continuous operation, we carry a certain period worth of raw materials
for production at different locations, including at our production facilities. We also purchase
raw materials depending on the market condition and operational needs. For more details, see
“Financial Information.”
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QUALITY CONTROLS
Our commitment to high quality and reliability helps strengthen the recognition and trust
among our customers. As of June 30, 2025, we had a quality control workforce of 15 personnel.
As a result of our commitment to stringent quality control, during the Track Record Period and
up to the Latest Practicable Date, there was no incident of failure in our quality control systems
which had a material impact on us. We implement an internal quality control system to perform
various inspections over the course of the entire manufacturing process.
We have received various certifications from recognized organizations. As of the Latest
Practicable Date, we had obtained ISO 9001:2015 quality management system, ISO
14001:2015 environmental management system and ISO 45001:2018 occupational health and
safety management system certifications, all of which are evidence that our quality control
system is on par with international practices.
We take a holistic approach to quality control and implement high standards in all aspects
of our business, from procurement, production, warehousing and inventory storage to delivery,
to ensure the full compliance with the stringent benchmarks and specifications of our
customers and ourselves. We have robust quality control programs in place at our production
facilities. Our quality control team is responsible for establishing the quality control systems
and inspection guidelines for our production, while our respective teams at our production
facilities are responsible for implementing the quality control standards and procedures. Our
quality control team also carries out regular system audits on production facilities, conducts
performance reviews and statistical analysis and provides training on the concept of quality and
inspection techniques, to ensure the effectiveness of the overall system.
We are required to comply with specific guidelines based on international product safety
and restricted and hazardous materials laws and regulations that are applicable in the
jurisdictions into which our customers sell their products. During the Track Record Period, we
had been in full compliance with our customers’ quality control requirements.
Procurement
We typically procure raw materials from suppliers who have passed our quality and
reliability assessment. We evaluate our suppliers periodically based on a range of factors,
including raw material quality and the ability to meet our delivery timeline. We conduct
random sample tests on incoming raw materials upon delivery to ensure a high-quality,
low-cost and rapid supply chain. We test the raw materials in our internal laboratory and return
raw materials that fail to pass inspection. Our operations department is responsible for the
purchase of raw materials and auxiliary materials. The raw materials we procured for the
production of copper cathodes and copper concentrates are mainly copper ores in Zambia and
DR Congo, which are either directly purchased from third party mining companies and trading
companies. In DR Congo, we require that each batch of raw materials shall be accompanied by
legal documentation and certificates of origin issued by the Minister of Mines of the DR
Congo. Furthermore, the Minister of Mines has stationed dedicated inspectors at our
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production facility since it commenced production to verify the legality of incoming raw
materials. Any raw materials lacking complete compliance documentation are immediately
rejected, preventing illegal materials from entering the production process. In Zambia, we
require our suppliers to ensure all raw materials supplied to us originate from legal sources as
stipulated in the agreements. We only purchase from suppliers holding a mineral trading permit
issued by the Minerals Regulation Commission. To ensure the legality of ore sources, we
require our suppliers to provide their mineral trading permit and issue tax invoices for each
batch of ores. Furthermore, we conduct periodic on-site inspections of ore suppliers to assess
their production and supply operations, as well as the legality of their ore sources. We also
procure non-ferrous metal products for our trading business from third party non-ferrous metal
producers. The main auxiliary materials we purchased are, among others, sulfuric acid,
extractant and diesel fuel, along with spare parts used for product lines and equipment upgrade
and repair.
Production
We strictly follow our customers’ quality requirements and specifications and all relevant
industry standards for the production of our products, including national standards and our
internal quality standards. At designated checkpoint stages on our product lines, our quality
control team conducts periodic tests and inspections of semi-finished products in accordance
with the our internally designed quality control processes. These tests are intended to ensure
that our products meet the quality standards and compliance requirements of both us and our
customers at each stage of the production process. In terms of production safety, we have
employed a safety inspection policy, where our respective production manager, facility
manager and production department staff regularly inspect the production workshop at least
once a week to ensure production safety. Our quality control team prepares quality analysis
reports on a monthly basis that are submitted to our senior management, as well as the relevant
production team, to maintain or refine our production processes as necessary. We have taken
several initiatives in recent years to improve our production efficiency, including developing
new production technologies, installing advanced equipment and machinery, and optimizing
the production processes and techniques. For more details, see “— Research and
Development.”
Warehousing
Our finished products are first packaged in the production facilities and stored at our
warehouses before being transported and delivered. Finished products are stored in designated
zones within our warehouses according to type and production date. Additionally, we take
safety measures to minimize fire hazards, water damage and other similar risks to our products.
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Delivery
We conduct sample checks for every batch of finished products prior to the delivery of
products. Our quality control team collaborates with the relevant production team to ensure
that our packaging is well-designed and sufficient to safeguard the quality of our finished
products during transportation. Packaging thereby tends to vary with the volume, type, and
customer requirements of each product.
RESEARCH AND DEVELOPMENT
We constantly seek breakthroughs in the traditional production processes and techniques
of copper products and strive to enhance product quality, ensure cost efficiency, achieve speed
to market and promote our overall profitability. We have developed a series of innovative
production techniques and installed advanced equipment to optimize the manufacturing
process. For example, we conducted R&D on the salvage and control method of three-phase
and emulsion, we also used box self-absorption and anti-extraction front-end organic pool
bottom circulation suction to reduce entrainment, ensuring better quality of copper cathodes.
For example, we have developed methods to salvage and control the emulsified layer or the
third phase, and also use box self-priming and anti-extraction front-end organic pool bottom
recirculation pumps to reduce entrainment and ensure better copper cathode quality.
In addition, we transformed the original “countercurrent extraction” wet extraction
system of Zambia copper smelter I to “continuous extraction” in January 2025, and to “double
extraction” in February 2025 using our existing equipment, which solves the problems of low
raw material grade, low leaching rate and low leaching efficiency in the current market.
Through such transformation, the processing capacity of such wet extraction system has been
increased from 100 m
3/h to 180 m 3/h, resulting in an 80% increase in production capacity. We
also procured new industrial PH meter online monitoring equipment to replace manual acidity
test paper colorimetric detection method, in order to improve the accuracy of acidity during
leaching process. We have also procured new industrial PH meter online monitoring equipment
to replace the manual acidity paper colorimetric testing method for better control of acidity in
the leaching process.
TRANSFER PRICING ARRANGEMENT
Our intra-group transactions
During the Track Record Period, we have engaged, and are continuing to engage in the
following intra-group transactions which can be broadly categorized into four categories,
namely (i) purchases and sales of mineral products; (ii) purchases and sales of equipment and
material; (iii) service provisions and (iv) financing arrangements.
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Purchases and sales of mineral products
Jinxun Singapore purchases mineral products such as copper cathodes, copper
concentrates, gold and silver ore, and cobalt hydroxide from overseas related parties such as
Jinxun DR Congo, Rong Xing Investments, and Jinxun Peru, and then sells them to overseas
third-party customers and our domestic entities such as our Company and Tibet Huiyi in small
quantities. The production and sale of copper cathode and other concentrates is our main model
of mineral product trading, whereby overseas entities of ours such as Jinxun DR Congo and
Rong Xing Investments act as production plants, responsible for the purchase of raw ore and
the production of cathode copper and other concentrates, which are then sold mainly to
overseas third-party customers through Jinxun Singapore.
Jinxun Peru sells locally purchased refined ore, silver ore and other products to third
parties and related parties in the PRC and abroad. Jinxun Peru is responsible for the local
purchase of copper concentrate, silver ore and other mineral products for trading in non-ferrous
metal ores other than copper cathode, and sells them to our entities in the PRC and abroad.
Purchases and sales of equipment and material
Our PRC entities such as our Company and Jinxun Shanghai purchase equipment and
materials from within the PRC and sell them to overseas related parties such as Jinxun DR
Congo, Rong Xing Investments, and Jinxun Peru for use in their local mineral product
businesses. Some of the equipment and materials purchased domestically are sold to overseas
related parties through Jinxun Singapore.
Service provisions
Tibet Huiyi and our Company provide marketing support services related to mineral
product trading for Jinxun Singapore and assist Jinxun Singapore in mineral product trading
activities.
As Tibet Huiyi offers services to support Jinxun Singapore’s marketing efforts, our
Company provides strategic consulting and business support to Tibet Huiyi.
Our Company sends personnel to our overseas mineral product production entities
(Jinxun DR Congo, Rong Xing Investments, and Jinxun Peru) while Jinxun Singapore
advances the salaries of the expatriate personnel to the overseas mineral product production
entities. The salaries advanced by Jinxun Singapore is then collected from our Company.
Financing agreements
Jinxun Singapore provides loans to Jinxun DR Congo and Jinxun Peru and obtains
interest payments from the loans provided.
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Assessment of our intra-group transactions
We have engaged an independent transfer pricing tax consultant (the “ Transfer Pricing
Consultant ”), to assess the reasonability of the terms of our intra-group transactions described
above during the Track Record Period.
Purchases and sales of mineral products
To assess the terms of Jinxun Singapore’s mineral products transactions with our other
entities, the Transfer Pricing Consultant selected eight comparable companies as references.
The full range of the weighted average operating profit margin before interest and taxes for the
comparable companies from 2021 to 2023 was 1.57% to 9.67%, with a quartile range of 2.28%
to 5.71% and a median value of 2.59%. Jinxun Singapore’s weighted average operating profit
margin before interest and tax during the review period was 3.64%, which was within the
quartile range. Therefore, it can be concluded that the pricing policy for mineral product
purchase and sale transactions between Jinxun Singapore and our other entities during the
Track Record Period was in line with the arm’s length principle.
To assess the terms of Jinxun Peru’s mineral products transactions with our other entities,
the Transfer Pricing Consultant selected six comparable companies as references. The full
range of the weighted average operating profit margin before interest and taxes for comparable
companies from 2021 to 2023 is -3.24% to 7.08%, with a quartile range of -0.87% to 2.22%
and a median value of 0.07%. Jinxun Peru’s weighted average operating profit margin before
interest and taxes during the review period was 0.51%, which was within the quartile range.
Therefore, it can be considered that the pricing policy for mineral product purchase and sale
transactions between Jinxun Peru and our other entities during the review period was in line
with the arm’s length principle.
Purchases and sales of equipment and material
To assess the terms of equipment and material with our other entities, the Transfer Pricing
Consultant selected 10 comparable companies as references. The full range of the weighted
average full cost markup rate for comparable companies from 2021 to 2023 is 0.95% to
12.79%, with a quartile range of 2.00% to 8.46% and a median value of 4.82%. The markup
rate applicable to domestic related parties during the review period was 2.00% to 8.00%,
falling within the quartile range. Therefore, it can be concluded that the pricing policy for
transactions involving the purchase of equipment and materials between our entities during the
review period complies with the arm’s length principle.
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Service provisions
To assess the terms of our PRC entities’ provision of consulting services to Jinxun
Singapore, the Transfer Pricing Consultant selected eight comparable agreements as
references. The full range of comparable agreement service fees is 2.00% to 20.00%, with a
quartile range of 4.00% to 10.00% and a median value of 10.00%. During the reporting period,
Tibet Huiyi received a marketing support service fee rate of 9.83% from Jinxun Singapore, and
our Company received a marketing support service fee rate of 2.80% from Jinxun Singapore,
which were within the full range of marketing support service fee rates stated in the
comparable agreements. Therefore, it can be considered that the pricing policy for marketing
support services provided by our PRC entities to Jinxun Singapore during the review period is
in line with the arm’s length principle.
To assess the terms of our Company provision of consulting services to Tibet Huiyi, the
Transfer Pricing Consultant selected nine comparable agreements as references. The full range
of the weighted average markup rate for fully absorbed costs of comparable companies from
2021 to 2023 is 7.33% to 41.75%, with a quartile range of 14.37% to 28.01% and a median
value of 19.45%. The full cost markup rate applicable to our Company during the review period
was 19.45%, which was within the quartile range. According to China’s transfer pricing
regulations and the OECD Transfer Pricing Guidelines, the cost base for service fees should
include all direct and indirect costs related to the provision of services. During the review
period, the cost base for the service fees charged by our Company included the wage costs of
the personnel providing services to Tibet Huiyi and the corresponding allocated management
expenses. The calculation method of the cost base (i.e., the sum of direct and indirect costs)
is in line with general transfer pricing principles. Therefore, it can be considered that the
transfer pricing policy for the strategic consulting and business support services provided by
our Company to Tibet Huiyi during the review period is in line with the arm’s length principle.
Financing agreements
To assess the terms of Jinxun Singapore’s provision of loans to our other entities, the
Transfer Pricing Consultant selected nine comparable companies as references. The full range
of the borrowing interest rate of comparable borrowing agreements is 2.08% to 13.06%, with
a quartile range of 5.36% to 8.68% and a median value of 6.72%. During the review period,
the borrowing interest rate applicable to Jinxun Singapore was 10%–12%, which was within
the range of interest rates for comparable loan agreements. Therefore, it can be considered that
the pricing policy of loans provided by Jinxun Singapore during the review period was in line
with the arm’s length principle.
After considering the analysis results and reviewing the transfer pricing reports prepared
by the Transfer Pricing Consultant, our Directors are of the view that the transfer pricing
arrangements under the aforementioned intra-group transactions are considered arm’s length in
nature, reasonable and in compliance with the applicable transfer pricing rules, guidance in all
jurisdictions involved.
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Measure to ensure on-going compliance
Our transfer pricing arrangements are part of our normal business operation where an
arm’s length transaction price needs to be established. We have implemented a general pricing
policy to follow the arm’s length principle and to achieve an arm’s length outcome. Our
management had been and will continue to closely monitor our transfer pricing arrangements
including reviewing the reasonableness of the transfer pricing policy of our intra-group
transactions from time to time to ensure compliance with the arm’s length principle.
THIRD-PARTY PAYMENT ARRANGEMENT
Background
During the Track Record Period, two of our customers based in the PRC within the same
group settled their outstanding payments to us through a third party payer, which is these
customers’ parent company. The aggregate amount of third-party payments that was settled
through third party constituted an insignificant proportion of our total revenue for each year
during the Track Record Period. Since December 1, 2024, we have ceased to allow and accept
our customers to settle payments through Third-Party Payers and all new orders thereafter are
only allowed to be settled through our customers’ own accounts. To the best knowledge of our
Directors after making reasonable inquiries, the Group has not been involved in any third-party
payment arrangements since December 1, 2024 and up to the Latest Practicable Date.
Internal Control Measures for Third-Party Payment Arrangements
Our Directors are responsible for formulating and overseeing the implementation of the
internal control measures and the effectiveness of the overall internal control system of the
Group. To safeguard the Group’s interest against potential risks in connection with Third-Party
Payment Arrangements, we have adopted the following internal control measures:
(i) In July 2025, our finance department issued the “Notice on Prohibition of
Third-Party Payment Arrangements on Behalf of Others and Risk Prevention”
(), which stipulates that the
customer’s payment account must be a bank account identical to name of the party
of the contract; and
(ii) Payment or collection by a third-party without any reasonable business reasons is
prohibited.
Considering the revenue generated from Third-Party Payment Arrangements as a
percentage of our total revenue was insignificant and immaterial, our Directors confirm that the
cessation of the Third-Party Payment Arrangements would not cause any material adverse
impact on the business, financial conditions and results of operations of our Group.
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COMPETITION
We compete with a number of Chinese and international copper producers. The
competition in copper cathode in DR Congo and Zambia is fragmented. In either market, no
single competitor occupies more than 15% of market share as of June 30, 2025. The top five
market participants, including us, are all headquartered in the PRC or Hong Kong. For more
information, see “Industry Overview.”
According to Frost & Sullivan, the key barriers to entering into the copper industry
include, among others: material supply barrier, capital barrier, technological barrier,
environmental barrier and supply chain barrier.
We believe the most important competitive factors are price, quality of products, research
and development capabilities, delivery schedule and customer service. We are confident that
we are well positioned to compete against industry peers with our high-quality copper product,
extensive networks and entire industrial chain covering ore procurement, preliminary
processing, and smelting.
PROPERTIES
We occupy certain properties in China, Zambia, DR Congo, Singapore, and Peru in
connection with our business operations. These properties are used for non-property activities
as defined under Rule 5.01(2) of the Listing Rules. They mainly include premises for our
production facilities, warehouses, offices and dormitories.
Pursuant to Rule 5.01A of the Listing Rules, this prospectus is exempt from the
requirement to include valuation on property interests of non-property activities if the carrying
amount of a property interest is less than 15% of our total assets. A similar exemption applies
under section 6 of the Companies (Exemption of Companies and Prospectuses from
Compliance with Provisions) Notice (Chapter 32L of the Laws of Hong Kong), with respect to
the requirement under section 38(1) of, and paragraph 34(2) of the Third Schedule to, the
Companies (Winding Up and Miscellaneous Provisions) Ordinance. As of June 30, 2025, none
of our properties had a carrying amount of 15% or more of our consolidated total assets.
We are required to obtain various of licenses and permits to store the raw materials for
our operations in Zambia and DR Congo. Our DR Congo operations require the permit for the
transport and storage of petroleum products. Our Zambia operations require, among others, fire
certificate, acid storage permit, gas storage permit, diesel storage permit, petroleum storage
permit and pesticide and toxic substance license. During the Track Record Period and up to the
Latest Practicable Date, we have obtained the necessary licenses and permits for warehousing
of the raw materials prescribed by the relevant under the applicable local laws in the respective
place of incorporation or establishment in relation to our current operations.
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Owned Properties
As of the Latest Practicable Date, we owned 21 parcels of land in China, Zambia and DR
Congo with a total site area of 3,648,235 sq.m. The following table sets forth a summary of
certain information regarding our owned lands as of the Latest Practicable Date:
Name of member of the Group Purpose
Approximate
Gross Land Area
(sq.m.)
Jinxun DR Congo /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Production and office 2,473,000
Rong Xing Investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Production and office 1,089,985
Jinxun Anhui /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Production 85,250
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,648,235
As of the Latest Practicable Date, we had obtained all relevant properties title certificates
and other relevant land use rights certificates for such parcels of land and buildings.
Leased Properties
As of the Latest Practicable Date, we had leased properties in China, Singapore, Zambia
and Peru, with an aggregate GFA of 5,394.26 square meters, which are used as offices and
dormitories. Our lease agreements in respect of the abovementioned leased properties generally
have lease terms of one year. As of the Latest Practicable Date, the lease agreements we entered
into are legal and valid, and except for seven properties leased by Jinxun Anhui, which lack
ownership certificates due to their nature as resettlement housing, the lessors have obtained
relevant ownership certificates for such properties and have the right to lease the properties to
us. We have obtained the certification document from the local competent regulatory agency,
Longqiao Community Residents’ Committee, which explicitly states that the aforementioned
seven properties are all resettlement housing units, and therefore do not have property
ownership certificates. As of the Latest Practicable Date, we have not received any
administrative penalties or rectification notices regarding the non-compliance of the leased
properties, nor are there any related disputes or potential disputes. As advised by our PRC
Legal Advisors, we were not subject to any administrative penalties under the PRC laws and
regulations in connection with the lease of such seven properties. Considering that we have not
obtained property ownership certificates for such leased properties, disputes regarding the
ownership of such properties may arise in the future and our actual use of these properties may
be adversely affected if the lessor has not legally obtained ownership of these properties.
However, we consider this risk to be relatively low, as the local competent regulatory agency
has issued the certification document confirming the absence of property ownership
certificates. Furthermore, given that these leased properties are only used as employee
dormitories and are highly substitutable, we believe that even if we cannot continue to occupy
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such properties, it would be relatively easy for us to find alternative properties. Therefore, our
Directors are of the view that the absence of such property ownership certificates would not
have a material adverse impact on our operations.
As of the Latest Practicable Date, we had not completed the administrative filings of the
lease agreement relating to 12 properties we leased for business and employee dormitory
purposes. We were advised by our PRC Legal Advisors that such non-filing of lease agreement
would not affect the validity of such lease, but we might be ordered to rectify this
non-compliance by competent authorities and if we do not rectify within a prescribed period,
a penalty of RMB1,000 to RMB10,000 may be imposed on us as a result of such non-filing.
See “Risk Factors — Risks Relating to Doing Business in the PRC — We may be required to
pay administrative fines for our failure to register some of our lease agreements with housing
administration authorities.” As of the Latest Practicable Date, our Directors confirm that we
had not received any notice from any regulatory authority with respect to potential
administrative penalties or enforcement actions as a result of our failure to file the lease
agreement described above. As such, our Directors are of the view that such non-filing would
not have a material impact on our business operations.
A W ARDS AND ACHIEVEMENTS
As of the Latest Practicable Date, we had received various awards, honors and
recognitions, including the following:
Y ear Awards and recognitions Issuing authorities
2025 /H1118/H1118/H1118/H1118AAA Grade Credit Enterprise
(AAA͜ഃॴ)
China Non-Ferrous Metals Industry
Association (᙮ʈุ
՘ึ)
2022 /H1118/H1118/H1118/H1118Y unnan Provincial specialized and
sophisticated small and medium-
sized enterprise (ॴਖ਼ၚ
तอʕʃΆุ)
Department of Industry and
Information Technology of
Y unnan Province (ʈุձ
ʷᝂ)
2022 /H1118/H1118/H1118/H1118Y unnan Provincial “Golden Seed”
Enterprises (޲ی“၇ɿ”Ά
ุ)
Y unnan Provincial Office of the
Leading Group for Promoting the
Three-year Action of Doubling
the Listing of Enterprises (ی
ᄣɧϋБਗʈ
܃)
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Y ear Awards and recognitions Issuing authorities
2022 /H1118/H1118/H1118/H1118The Ninth Y unnan Provincial
Excellent and Strong Private
Enterprises (Ꮄ੶͏
ᐄΆุ)
Y unnan Provincial Department of
Industry and Information
Technology (ࢹڦ
ʷᝂ); Y unnan Provincial
Department of Human Resources
and Social Security (ɛɢ
ღᝂ)
2020 /H1118/H1118/H1118/H1118Y unnan Provincial Growing Small
and Medium-sized Enterprises
(ʕʃΆุ)
Department of Industry and
Information Technology of
Y unnan Province (ʈุձ
ʷᝂ)
2019 /H1118/H1118/H1118/H1118Y unnan Provincial Science and
Technology Small and Medium-
sized Enterprises (ۨ
ʕʃΆุ)
Y unnan Province Science and
Technology Department (޲ی
ኪҦஔᝂ)
INTELLECTUAL PROPERTY
We rely on a combination of trademark, trade secret, patent, copyright and other
intellectual property laws, as well as confidentiality agreements with our employees, suppliers,
customers and others, to protect our intellectual property. As of the Latest Practicable Date, we
had 30 registered patents, 31 copyrights and 12 trademarks in China, all of which are material
to our business.
For more details, see “Appendix VI — Statutory and General Information — B. Further
Information about Our Business — 2. Intellectual Property Rights of Our Group.”
During the Track Record Period and up to the Latest Practicable Date, our Directors
confirmed that, so far as they were aware, there was no material violation or infringement of
any intellectual property rights owned by us or by any third parties, and we were not aware of
any threatened material proceedings or claims relating to intellectual property rights against us.
Moreover, despite our best efforts, we cannot be certain that third parties will not infringe or
misappropriate our intellectual property rights or that we will not be sued for intellectual
property infringement. See “Risk Factors — Risks Relating to Our Business and Industry —
Our business depends on our ability to protect our intellectual property rights, and we may be
exposed to intellectual property infringement and other claims by third parties, which, if
successful, could cause us to pay significant damage awards and incur other costs.”
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IMPACT OF THE COVID-19 OUTBREAK
During the COVID-19 outbreak in 2022, we experienced approximately 10 days of
customs clearance delays. However, such delays did not affect customer payment schedules,
and all copper cathode customers fulfilled their payment obligations as stipulated in the
contracts. This was attributable to the adoption of the free carrier terms in our sales model,
under which the seller is responsible for transporting goods to the designated port and
completing export formalities; upon arrival at the designated port, the buyer assumes all related
costs and risks, such as logistics costs and detention risks. Under this model, customers are
required to prepay 95% of the provisional payment in the month of shipment, with the
remaining 5% settled after the quotation period concludes. There was also a logistics delay in
steel supply occurred during the construction of the DR Congo copper smelter I, which was
originally scheduled for dispatch in mid-May 2022, with an expected arrival at the construction
site for deployment in September 2022. Due to the impact of the COVID-19 outbreak, the
shipment was not formally exported until August 4, 2022, and ultimately arrived at the site in
April 2023, resulting in a delay of seven months. However, we promptly addressed the
situation by procuring temporary steel locally and flexibly adjusting the project schedule.
Thus, this incident did not cause significant adverse effects on the construction project.
Although global concerns over narrowing copper production from China have pushed up
the selling price of our copper products, the COVID-19 outbreak did not have a substantial
impact on our production and sales of copper products. For example, we produced 5,949.8 tons
and 7,368.1 tons of copper cathodes in 2022 and 2023, respectively, all of which were sold
promptly during the COVID-19 outbreak. Therefore, our Directors are of the view that
COVID-19 had no material adverse effect to our business operations and financial performance
during the Track Record Period.
INSURANCE
During the Track Record Period, we provided social insurance for our employees, such
as pension insurance, unemployment insurance, work injury insurance and medical insurance.
See: “Risk Factors — Risks Relating to Doing Business in the PRC — Failure to comply with
the PRC labor laws and regulations in relation to social insurance and housing fund
contributions for our employees could subject us to fines and other legal or administrative
sanctions.” In addition, we maintain insurances such as overseas investment insurance, group
personal accident insurance, life insurance and property insurance for our business operation
and management. As of the Latest Practicable Date, we had not received any material insurance
claims against us. Consistent with what we believe to be customary practice in our industry,
we generally do not maintain any business interruption insurance. We believe that the existing
insurance coverage of our business is adequate and is in line with the general industry practice.
However, the insurance policies maintained by us may not be sufficient to cover claims in
respect of personal injury or property or environmental damage arising from accidents on our
properties or relating to our operations, or to cover business interruption risks. Such coverage
is not mandatory according to the applicable laws and regulations.
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EMPLOYEES
We place great importance on attracting and retaining qualified employees. We are
committed to investing in our employees’ training and development. As of June 30, 2025, we
had 901 full-time employees worldwide based in China, Zambia, DR Congo, Singapore, and
Peru. The following table sets forth a breakdown of our employees categorized by function as
of June 30, 2025.
Function
Number of
Employees
Percentage of
Total
(%)
Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841 4.6
Research and Development /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 1.6
Sales and Marketing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 3.1
Procurement and Supply Chain /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 2.7
Production /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118593 65.8
Quality Control /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 1.7
Administrative /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118186 20.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118901 100.0
The table below sets forth the breakdown of our employees categorized by gender and
geographic location for the year/periods indicated.
For the year ended December 31,
For the six
months ended
June 30,
2022 2023 2024 2025
Total number of employees /H1118/H1118/H1118/H1118/H1118687 782 826 901
Number of employees by gender /H1118
Male /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118607 716 754 822
Female /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880 66 72 79
Number of employees by region /H1118/H1118
Chinese Mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149 134 152 188
DR Congo /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241 354 273 294
Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118288 286 390 409
Peru /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111898 1 1 1 0
We emphasize the training of our employees in order to enhance their technical and
product knowledge, as well as their personal development, job challenge and satisfaction,
recognition, work environment, work safety and career advancement. We have adopted a
compensation structure and incentive schemes linked to our Group’s performance in order to
further motivate our employees. We typically enter into employment agreements with
intellectual property assignment clauses included, confidentiality agreements and non-
competition agreements with our employees based in China.
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We currently recruit our employees primarily through on-campus recruiting programs,
advertisements on recruitment websites, job fairs, and employee referrals. There are labor
unions for our employees in China and Zambia. During the Track Record Period and up to the
Latest Practicable Date, we had no material disputes with the labor unions.
We focus on employee welfare and maintain constant communications with our
employees. We believe that we generally maintain good working relationship with our
employees. During the Track Record Period and up to the Latest Practicable Date, we did not
experience any material disputes with our employees.
CERTIFICATES, LICENSES, PERMITS AND APPROV ALS
The table below sets forth our material licenses and permits and their corresponding
expiry dates.
Entity
Name of Certificate/
License/Permit/Approval
Issuing
Jurisdiction Expiry Date
Rong Xing Investments /H1118Mineral Processing
License
Zambia November 6,
2044
Emission License
(Flotation Overflow)
Zambia June 12, 2026
Jinxun DR Congo /H1118/H1118/H1118/H1118/H1118/H1118Smelting Permit DR Congo June 4, 2029
Exploitation Permit DR Congo August 31,
2039
The Mining Code of DR Congo requires (i) 10% of the share capital of DR Congo
subsidiary to be transferred to the DR Congo government when it obtains an exploitation
permit (the “ Share Transfer Rule ”), and (ii) an additional 5% of the share capital to be
transferred to the DR Congo government upon each renewal of the exploitation permit.
According to the laws of DR Congo, the CAMI generally sends notifications to the holder of
the mining permit requesting it to provide evidence of compliance with the Share Transfer
Rule. Failure to demonstrate compliance may result in (i) the direct cancellation of the
exploitation permit and therefore affect the subsidiary’s activities in the DR Congo; or (ii)
CAMI requesting it to provide evidence of compliance with the Share Transfer Rule within a
specified period (generally 45 days). Although CAMI’s request is to provide evidence of
compliance with the Share Transfer Rule, our local subsidiary may, following this notification,
proceed to comply with the Share Transfer Rule. As advised by our legal advisors as to DR
Congo laws, the second scenario is more likely to occur in the event of non-compliance with
the Share Transfer Rule, and the risk of receiving a direct cancellation notification from CAMI
is low, given (a) the current government of the DR Congo’s initiatives to improve the business
investment environment, which may prompt it to adopt the second scenario to comply with the
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Share Transfer Rule; and (b) the first scenario has not occurred in the past five years to local
companies based on the experience of our legal advisors as to DR Congo laws, and as of the
Latest Practicable Date, CAMI had not given any notice to our local subsidiary to revoke its
exploitation permit. Notwithstanding that Jinxun DR Congo holds the exploitation permit, it
has never engaged in any mining business. See “Regulatory Overview—Laws and Regulations
Related to Our Business in DR Congo—Mineral Processing and Mining Operations—Mining
Operations—Exploitation Permit” for more details. Our Directors believe that even in the
worst-case scenario, where the exploitation permit held by Jinxun DR Congo is revoked and
Jinxun DR Congo is required to transfer 50% of its share capital to Congolese nationals, this
would not have a material impact on our Group’s financial position, considering: (i) the impact
of transferring 10% of its share capital to Congolese nationals for no consideration (free of
charge): This transfer is estimated to reduce Jinxun DR Congo’s paid-in capital and capital
reserves by RMB0.8 million, while increasing minority interest by RMB0.8 million. However,
this transfer does not involve any cash outflow, and will result in a corresponding 10% decrease
in net profit attributable to owners of the Company in the consolidated financial statements
after this transfer; and (ii) the impact of transferring the remaining 40% of its share capital to
Congolese nationals: We will transfer the 40% share capital to Congolese nationals at a
consideration determined through negotiations. At the transfer date, the difference between the
book value of net assets corresponding to the 40% share capital and the consideration will be
recognized in capital reserves. This transaction involves cash inflow of the aforementioned
consideration and has no impact on profit or loss for the current period, and will result in a
corresponding 40% decrease in net profit attributable to owners of the Company in the
consolidated financial statements after this transaction. Following the completion of the
aforementioned share transfer, our Group will retain a 50% equity interest in Jinxun DR Congo.
According to our legal advisors as to DR Congo laws, our Group may enter into lawful
arrangements with Congolese shareholders to maintain effective control over Jinxun DR
Congo. These may include the right to appoint the majority of directors and the absence of veto
rights for local shareholders over key business matters. As such, Jinxun DR Congo is expected
to remain a controlled entity of the Group following the completion of any such equity
transfers. As advised by our legal advisors as to DR Congo laws, in cases where Congolese
companies were required to transfer 50% of their share capital to Congolese nationals, the DR
Congo government did not take control of or participate in the day-to-day operations of such
Congolese companies.
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INTERNATIONAL SANCTIONS RELEV ANT TO CERTAIN BUSINESS ACTIVITIES
OF THE GROUP
Certain countries or organizations, including the U.S., the European Union, the United
Kingdom, the United Nation, and Australia, maintain economic sanctions and trade restrictions
targeting certain parties, industries or sectors within the countries or territories for which
Relevant Jurisdictions maintain various forms of sanctions programs in place, without having
a comprehensive embargo in place (i.e., without making a particular country/region a
Comprehensively Sanctioned Country).
During the Track Record Period, Jinxun DR Congo sold certain copper cathode to our
Singapore subsidiary internally. DR Congo is subject to limited sets of targeted sanctions, with
certain sanctioned entities located in such country, however, it is not a country that is subject
to territorial broad base sanctions (i.e., not a Comprehensively Sanctioned Country).
Transactions with sanctioned entities located in DR Congo or export of export controlled
products to such country could expose us to sanctions risks. These transactions involving DR
Congo did not involve any exports or transactions of any items subject to the Export
Administration Regulations nor relate to any sanctioned entities.
As advised by our legal advisor as to International Sanctions laws, who has performed the
procedures it considers necessary and has relied on the information provided by the Company
in relation to the sales by Jinxun DR Congo, on the basis that (i) these transactions involving
DR Congo did not involve any exports or transactions of any items subject to the EAR to DR
Congo; and (ii) our counterparties in DR Congo were not sanctioned entities, therefore, our
business operations involving DR Congo during the Track Record Period did not represent a
violation of the International Sanctions, a Primary Sanctioned Activity or a Secondary
Sanctionable Activity. Given that our activities with DR Congo did not represent a violation of
the International Sanctions, our Directors do not believe that such targeted International
Sanctions on DR Congo have any material adverse impact to our business activities or financial
position.
Our Directors confirm that we do not have present intention to undertake any business
involving directly or indirectly the Comprehensively Sanctioned Countries. We will not
knowingly or intentionally conduct any business with any Sanctioned Targets, or any business
in any Comprehensively Sanctioned Countries that will cause us to violate International
Sanctions, and we will not use the proceeds from the Global Offering to finance or facilitate,
directly or indirectly, activities or business with, or for the benefit of, the Comprehensively
Sanctioned Countries or Sanctioned Targets. Our Directors will continuously monitor the use
of proceeds from the Global Offering, as well as any other funds raised through the Stock
Exchange, to ensure that such funds will not be used to finance or facilitate, directly or
indirectly, activities or business with, or for the benefit of, Comprehensively Sanctioned
Countries or Sanctioned Persons where this would be in breach of International Sanctions.
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COMPLIANCE AND LEGAL PROCEEDINGS
We may from time to time become a party to various legal, arbitration or administrative
proceedings arising in the ordinary course of our business. As of the Latest Practicable Date,
there was no material litigation, arbitration or administrative proceedings pending or
threatened against the Company or any of our Directors which could have a material and
adverse effect on our financial condition or results of operations.
Rong Xing Plant Suspension Incident
Background and Reasons for Non-compliance
During the Track Record Period, our Zambian subsidiary, Rong Xing Investments,
received an order dated February 4, 2025 from the Zambia Mines Safety Department (“ MSD”)
ordering an immediate suspension of operations (the “ MSD Suspension Order ”) following an
alleged inappropriate use of acid offloading equipment, which resulted in the demise of a local
employee of Rong Xing Investments (the “ Suspension Incident ”). The subsidiary operated the
Zambia copper smelter I, Zambia copper smelter II and Zambia flotation plant (collectively the
“Zambia Plants ”) and certain local employees of Rong Xing Investments were carrying out
routine testing and cleaning services in avoidance of the damages in relation to any failure of
maintenance in time. When the MSD Suspension Order was in place, local employees were not
aware that the routine maintenance activities were considered as “operations” by the MSD and
therefore were regarded as forbidden under the suspension. The director and operation manager
of Rong Xing Investments were requested by the local police afterwards to assist with the
investigation enquiries surrounding the alleged MSD Suspension Order violation. The MSD
has imposed personal fines of a total sum of ZMW265,000 (approximately RMB77,100) on the
director and operation manager of Rong Xing Investments for allowing the Zambia Plants to
“operate” when the MSD Suspension Order was in effect and a fine of ZMW936,000
(approximately RMB250,000) on Rong Xing Investments in relation to the accident, and
decided that the matter will not proceed further with litigation. No arrest of any personal of
Rong Xing Investments was involved. The fines imposed on Rong Xing Investments were
settled on April 9, 2025, and the fines imposed on its director and operation manager were
settled on April 23, 2025.
Latest Status and Remedial Measures
In April 2025, the MSD confirmed via a letter dated April 2, 2025, that inspections had
been conducted on March 25, 2025 and April 1, 2025 to track the progress of the
implementation of remedial measures following the suspension of the Rong Xing Plant’s
operations. The inspections revealed the following:
(i) the acid transfer pipes (two pipes) were provided on the acid offloading bay for
Leaching Plant No. 2;
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(ii) personal protective equipment for use in acidic conditions were provided, including
gum boots, acid/chemical-resistant suit, chemical-resistant gloves, respirators and
safety goggles;
(iii) copies of the acid offloading safety operating procedures and emergency response
plan were submitted for review and feedback;
(iv) the appointment of the mine manager was not made at the time of visit;
(v) one of the drainage channels at the acid offloading bay of Leaching Plant No. 2 did
not slope towards the spill sump, making overflow management extremely difficult.
Therefore, an additional drainage channel should be constructed in the southern part
of the offloading bay to facilitate easier collection of spilled materials; and
(vi) the tailings dam, containing large quantities of acidic solution and lacking approval
from the Ministry of Environmental Protection, was deemed too risky to continue
operations.
The MSD urged Rong Xing Investments to comply with items (iv), (v) and (vi), which
require that (i) a mine manager must be appointed; (ii) the acid offloading bay must be
constructed to ensure all spilled materials flow into the sumps for controlled management; (iii)
acidic solutions at Tailings Dam No. 11 must undergo neutralization treatment; and (iv)
Tailings Dam No. 13 must undergo assessment. As of the Latest Practicable Date, we have
appointed a mine manager and implemented the necessary measures to complete the
rectification.
On April 7, 2025, we obtained a clearance letter from the MSD authorizing the Rong Xing
Plant to resume operations. The clearance letter certifies that the status of the mineral
processing license has been changed to compliant, indicating that we have completed the
rectification for the aforementioned non-compliance incidents. The suspension had lasted for
three months, from February 2025 to April 2025.
We have taken the following internal control rectification measures to prevent further
occurrence of such non-compliance:
(i) appointed an equipment manager to be responsible for the control and supervision
of all operations at the mine;
(ii) implemented enhanced internal policies and protocols, such as the health and safety
policy, tailings dam closure and post-closure management plan, water management
plan, and environmental and safety action plan. Specifically, (i) the health and safety
policy requires Rong Xing Investments’ management to provide a safe working
environment, including maintaining safe work systems, equipment, and materials, as
well as employee welfare facilities. They shall regularly assess the effectiveness of
internal policies and provide operational guidance, professional training, and on-site
supervision for local employees; (ii) the tailings dam closure and post-closure
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management plan specifies procedures for pre-closure preparation, closure
execution, post-closure monitoring and maintenance, and complete
decommissioning; (iii) the water management plan requires hourly pH monitoring,
daily inspection and recording of tailings pond water levels/overflow conditions,
and weekly sampling and analysis of groundwater/reclaimed water quality; and (iv)
the environmental and safety action plan stipulates procedures related to tailings and
water management, safety facilities and training, monitoring, and compliance;
(iii) conducted trainings to educate employees on pollution prevention and regulatory
requirements, requiring them to comply with our safety and health policies (such as
wearing prescribed personal protective equipment) and adhere to our environmental
management principles to prevent pollution;
(iv) implemented an operational change implementation plan for the installation of the
tailings neutralization system and the refurbishment of the tailings pond;
(v) established emergency response plans for sulfuric acid leaks and tailings pond
incidents, clearly defining procedures for prevention and early warning, emergency
response, and post-incident management; and
(vi) conducted periodic review to assess the effectiveness of the corrective measures.
Based on the foregoing, our Directors believe that such non-compliance would not have
material adverse effect on our business, results of operations and financial condition, having
considered that: (i) the Suspension Incident was a one-off event; (ii) there was no material
adverse impact on Rong Xing Investments ability to satisfy its contractual obligations or
delivery of products to the customers during the period of the MSD Suspension Order; (iii) the
duration of the Suspension Order; and (iv) the amounts of the fine received are immaterial.
Our Directors are of the view that the above measures are effective and adequate in
preventing non-compliance with respect to the Suspension Incident. As advised by our legal
advisors as to Zambian laws, all further claims and liabilities have since been discharged with
respect to the MSD Suspension Order. Our Directors are of the view that the Suspension
Incident does not constitute a material non-compliance, nor a systemic non-compliance.
Rong Xing Plant Environmental Restoration Order
Background and Reasons for Non-compliance
In March 2025, following adverse weather conditions which caused tailing dam damages
and the resulting acid leaking from Rong Xing Investments’ plant into nearby stream (the
“Environmental Incident ”), Rong Xing Investments received an order issued by the Zambia
Environmental Management Agency (“ ZEMA ”) for requiring cleanup efforts and the cessation
of operations pending guidance (the “ Environmental Restoration Order ”) due to incidents of
acid leaking into nearby stream. The Environmental Restoration Order was silent on its
duration applicable to Rong Xing Investments.
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Latest Status and Remedial Measures
In April 2025, ZEMA has issued a conditional approval to Rong Xing Investments to
resume its mineral processing activities, while requiring ongoing environmental restoration
efforts to be implemented. The ongoing measures that were advised by ZEMA (the “ ZEMA
Recommended Measures ”) encompass the following: (i) conduct ongoing environment
restoration work; (ii) submit a work plan issued by a professional environmental assessment
agency to ZEMA in light of Rong Xing Investments’ current situation; (iii) engage with a
qualified environment consultant and carry out cleanup and restoration assignments in Dambo
area and Luela stream, respectively; and (iv) recruit qualified environment staff to monitor and
manage internal environmental compliance of Rong Xing Investments. Our Directors are of the
view that we would incur approximately a total sum of ZMW500,000 with respect to the
aforementioned ongoing rectification measures. We completed items (ii) and (iv) of the ZEMA
Recommended Measures on April 25, 2025 and May 12, 2025, respectively. Regarding items
(i) and (iii), we submitted the work plans of two professional environmental assessment
agencies to ZEMA on April 25, 2025, for review and selection. These plans encompass
environmental assessments, pollutant cleanup, and environmental restoration. As of the Latest
Practicable Date, we were proactively seeking ZEMA ’s guidance regarding the selection of an
environmental assessment agency as the service provider to carry out subsequent work. In a
letter dated April 15, 2025, ZEMA granted us conditional approval, permitting the Rong Xing
Plant to continue operations while implementing the required rectification measures. Our
Directors confirm that although we have yet to receive such guidance from ZEMA, there were
no adverse impact on the ongoing operations of the Rong Xing Plant as of the Latest
Practicable Date. Our Directors are of the view that the rectification and restoration work will
take approximately two months to complete once we receive the guidance from ZEMA.
We have taken the following internal control rectification measures to prevent further
occurrence of such non-compliance:
(i) implemented enhanced measures to ensure that all spilled material should flow into
the slumps for easier control and management;
(ii) implemented enhanced internal policies and protocols, such as the water
management plan which requires the inspection of stormwater facilities within 24
hours after rainfall and on monthly basis during the dry season, as well as the
neutralization of acidic water;
(iii) conducted trainings to educate employees on pollution prevention and regulatory
requirements, requiring them to comply with our safety and health policies (such as
wearing prescribed personal protective equipment) and adhere to our environmental
management principles to prevent pollution;
(iv) implemented an operational change implementation plan for the installation of the
tailings neutralization system and the refurbishment of the tailings pond;
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(v) established emergency response plans for sulfuric acid leaks and tailings pond
incidents, clearly defining procedures for prevention and early warning, emergency
response, and post-incident management; and
(vi) conducted periodic review to assess the effectiveness of the corrective measures.
Based on the foregoing, our Directors believe that such non-compliance would not have
material adverse effect on our business, results of operations and financial condition, having
construing that: (i) the Environmental Incident was a one-off event caused by adverse weather
conditions; (ii) there was no material adverse impact on Rong Xing Investments’ operations
and ability to satisfy its contractual obligations or delivery products to its customers during the
period of cessation of operations under the Environmental Restoration Order and in conducting
the necessary cleanup assignments; and (iii) the cost to Rong Xing Investments on the
implementation of ongoing environmental restoration efforts as requested by ZEMA.
Our Directors are of the view that the above measures are effective and adequate in
preventing non-compliance with respect to the Environmental Incident. As advised by our legal
advisors as to Zambian laws, in accordance with the laws and regulations in Zambia, the risk
of our Group being unable to comply with or satisfy the conditions is low. Our Directors are
of the view that the Environmental Incident does not constitute a material non-compliance, nor
a systemic non-compliance.
Non-compliance Incident in relation to the Mining and Non-mining Rights
(1) of Rong Xing
Investments
Background and Reasons for Non-compliance
The Mining Regulations Commission Act stipulates that a mineral processing license
holder shall (i) submit mineral production returns to the relevant authority on a monthly basis;
(ii) submit annual reports to the relevant authority no later than February 28 of the next
calendar year; (iii) submit a future program of mining operations (“ Program ”) to the relevant
authority, which notifies the relevant authority of the mine plans for the coming year on or
before November 30 of each year; and (iv) commence mineral processing operations within the
timeframe in accordance with the approved Program.
Note:
(1) Non-mining rights refer to (i) mineral processing licenses; (ii) gold panning certificates; (iii) mineral trading
permits; (iv) mineral import permits; and (v) mineral export permits, that are not directly related to mining
operations but pertain to other mineral-related commercial activities.
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Specifically, Rong Xing Investments failed to comply with the above requirements due to
the following reasons:
 Rong Xing Investments had been submitting the mineral production returns to the
local tax authority on a monthly basis through its online system, in accordance with
the requirement of the local tax authority. However, due to misunderstanding of the
requirement to make a dual filing of the mineral production return to both
authorities, Rong Xing Investments had not concurrently submitted the same
mineral production returns to the Mining Cadastre Department (now the Minerals
Regulation Commission) in accordance with the requirement of the Regulations;
 Rong Xing Investments was late in its filing of the annual report for the year 2023
to the Mining Cadastre Department. The late filing was due to the delay on the part
of a local agent engaged by Rong Xing Investments to prepare and submit the
relevant annual report; and
 Rong Xing Investments was late in submitting the Program for the year 2024 on or
before November 30, 2023 pursuant to the Regulations due to an inadvertent
oversight. Without an approved Program, Rong Xing Investments was unable to
commence its mineral processing operations within the timeframe for
commencement of operations as required under the mineral processing license in
time, in breach of the Regulations.
In April 2024, Rong Xing Investments, was notified by the Mining Cadastre Department
on the non-compliance incidents contrary to the Mines and Minerals Development (General)
Regulations as prescribed by the relevant regulations. Due to the aforesaid reasons, the Mining
Cadastre Department has changed the status of Rong Xing Investments’ the Mineral Processing
License (No. 25099-HQ-MPL, the “ License ”) to non-compliance. The Mining Cadastre online
system has generate a letter to Rong Xing Investments with respect to the non-compliance
matter afterwards. Rong Xing Investments has not been aware of the letter nor the alleged
non-compliance matter until the personnel who oversees Rong Xing Investments’ management
system logged in and validated the information on or around April 30, 2025. The portal website
does not indicate the exact dates on which the status of the Licence was changed, i.e. the
cancellation and the restoration.
Latest Status and Remedial Measures
We have contacted the Mining Cadastre Department and submitted the requisite
information both through online portal and onsite visit with the assistance of the cadastre
officer to comply with the requirements of the Mining Cadastre Department. We have also paid
a one-off fine of ZMW270,000 as required by the Mining Cadastre Department on May 28,
2025. As advised by our legal advisors as to Zambian laws, the possibility that Rong Xing
Investments being subject to additional fines or penalties in connection with such non-
compliance incident is remote. On the same day, the status of License on the
portal.miningcastre.com website has been changed to active. Rong Xing Investments also
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received a clearance letter dated June 18, 2025 from the Mining Cadastre Department regarding
the aforementioned non-compliance matter. The cancellation of the mineral processing license
had lasted for approximately 14 months from April 2024 to May 2025.
We have taken the following internal control rectification measures to prevent further
occurrence of such non-compliance:
(i) strengthened oversight and internal controls over our subsidiaries, including
establishing and rigorously implementing a unified internal control system.
(ii) deployed a unified enterprise resource planning (“ ERP”) system, which serves as
the core operational platform integrating real-time critical operational data from
subsidiaries—including financial, procurement, production, sales, and inventory
information. Electronic copies of locally generated source documents, ledgers, and
key business records are regularly uploaded to our Group’s database for centralized
archiving and management; and
(iii) established a tiered and clearly defined authorization framework for ERP system and
database access. This authorization ensures authorized personnel at our headquarters
can directly access data from all operating entities remotely at any time.
Our Directors confirm that we did not derive any revenue from the mining rights during
the Track Record Period, and the revenue generated in association with the non-mining rights
from our Zambian subsidiary during the Track Record Period amounted to RMB388.7 million,
RMB288.4 million, RMB352.9 million and RMB127.7 million, respectively. In particular, the
total revenue of Rong Xing Investments derived from operational activities subject to the
License during the suspension period of the License amounted to RMB202.7 million for the
nine months ended December 31, 2024 and RMB78.6 million for the five months ended May
31, 2025, representing approximately 11.5% and 8.2% of our total revenue in 2024 and the six
months ended June 30, 2025, respectively. As confirmed by our legal advisors as to Zambian
laws, (i) for the reason that the License has become re-instated, there are no implications,
whether future or retrospective, on Rong Xing Investments; and (ii) there is no risk of the
Ministry of Mines perceiving income generated by Rong Xing Investments during the
suspension period of the License as being illegal and ordering confiscation of such income. Our
Directors believe that even if such proportion of revenue is excluded from our total revenue,
we would still be able to meet the relevant profit requirements under the Listing Rules.
As advised by our legal advisors as to Zambian laws, while we breached the Repealed
Mines Act by continuing mineral processing activities during the cancellation period and was
duly fined for the breaches that led to the cancellation of the License, based on the
documentation they have reviewed, we were never penalized for continuing to operate during
the cancellation period. Furthermore, although the reinstatement of the License does not cure
the non-compliance occasioned by us for operating during the cancellation period, which
directly contravened the provisions of the Repealed Mines Act, the risk associated with this
violation is relatively low under Zambian law, for the following reasons: (i) section 12 (3) of
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the Repealed Mines Act which applied during the License cancellation period, suggests that the
penalty of ZMW2,000,000 for carrying out mineral processing activities without a valid license
can only be imposed upon conviction. This implies that for the aforementioned penalty to be
imposed, we would need to be prosecuted in a court of competent jurisdiction and convicted
for the offense of undertaking mineral processing activities without a valid license, which
appears not to be the case presently; (ii) we, as per the clearance letter from the Mining
Cadastre Department, took remedial action to the satisfaction of the Mining Cadastre
Department; and (iii) we were fined for the breaches that led to the cancellation of the License
and regulators in practice usually do not prosecute offenses where a fine has been imposed.
Based on the foregoing, our Directors believe that such non-compliance would not have
material adverse effect on our business, results of operations and financial condition, having
construing that (i) the aforementioned non-compliance incident was a one-off event; (ii) there
was no material adverse impact on Rong Xing Investments’ ability to satisfy its contractual
obligations or delivery of products to the customers during the period of the non-compliance
incident; (iii) the duration of the non-compliance incident and (iv) the amounts being fined are
immaterial. As advised by our legal advisors as to Zambian laws, all further claims and
liabilities have since been discharged with respect to the aforementioned non-compliance
incident relating to the mining and non-mining rights of Rong Xing Investments. Our Directors
are of the view that the aforementioned incident does not constitute a material non-compliance,
nor a systemic non-compliance.
Our Directors confirm that the aforementioned non-compliance incidents were not
interrelated and were one-off in nature. As of the Latest Practicable Date, we had not received
any other suspension orders, administrative warnings, or penalties that have a material impact
on our business operations and financial position.
INTERNAL CONTROL AND RISK MANAGEMENT
We have in place a set of internal control and risk management procedures to address
various potential operational, financial, legal and market risks identified in relation to our
operations, including but not limited to procurement management, sales management,
inventory management, research and development management, investment management,
credit risk, controls on connected transaction, controls on information disclosure, human
resources, IT management and other various financial and operational controls and monitoring
procedures. These internal control and risk management policies set forth procedures for the
relevant reporting hierarchy of risks identified in our operations. Our Board is responsible for
overseeing our overall risk management. After due consideration, our Directors are of the view
that our current internal control measures are adequate and effective.
To ensure that our management can promptly, comprehensively, and effectively access
and review the relevant books and records of operating entities in DR Congo, Zambia and other
jurisdictions, we have established and implemented a systematic and institutionalized internal
control and information management mechanism.
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Specifically, we have established a unified governance framework and policy system,
including a standardized internal control system for financial reporting and information
disclosure, as well as a bookkeeping management policy, and required all subsidiaries to adhere
to the same accounting policies, bookkeeping standards, and reporting procedures. Subsidiaries
are required to submit standardized financial and operational reports according to our
prescribed schedule. We have rolled out and deployed a unified ERP system across our Group.
Serving as the core operational platform, this system can integrates key operational
data—including finance, procurement, production, sales, and inventory—from subsidiaries
across other jurisdictions in real time, ensuring immediate recording and synchronization of
business transactions. Electronic copies of locally generated source documents, ledgers, and
critical business records are regularly uploaded to the database for centralized archival
management. Furthermore, we have established clear access and reporting mechanisms,
authorized personnel can remotely access data from all operating entities at any time. Our
internal audit department conducts regular and ad hoc independent audits and verifications of
subsidiary ledger integrity, local compliance, and ERP system data authenticity across different
jurisdictions. Simultaneously, through collaboration with renowned international accounting
firms and local professional institutions, we leverage their specialized services, such as audit
services, internal control attestation and compliance review services, due diligence services,
and tax compliance services, to further validate and ensure the authenticity and accessibility of
local records. Through the aforementioned measures, we have established a multi-tiered,
cross-regional financial management and access system. This system effectively ensures
management’s timely and comprehensive access to financial and operational information
across our subsidiaries, providing robust support for overall risk management and strategic
decision-making.
In addition, we dispatch Chinese personnel to directly oversee the daily operations of our
overseas subsidiaries, ensuring their activities align with our strategic direction. These
personnel are responsible for implementing our management systems and corporate culture
within the subsidiaries while providing timely updates to our headquarters on the condition of
these subsidiaries. Senior management and other managers conduct periodic overseas business
trips to conduct on-site inspections of the operations of our overseas subsidiaries, engage in
face-to-face communication with local staff and management, identify operational issues and
potential risks, and provide on-site guidance and decision-making support.
Subsidiaries are also required to submit monthly reports on operational conditions and
plans, covering human resource, finance, and other aspects, enabling us to promptly grasp
business progress, financial health, market dynamics, and other information for comprehensive
analysis and decision-making. We have employed an office automation (“ OA”) approval
system internally. The submission of OA approval forms by subsidiaries requires sequential
authorization from relevant personnel and management in the Chinese Mainland to take effect.
This process enables us to exercise strict oversight over major decisions, capital expenditures,
and contract signings by overseas subsidiaries, ensuring their operational activities align with
our overall interests and regulatory framework.
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We have engaged an independent external consultant (“ Internal Control Consultant ”),
to review our internal control and risk management systems, so that we could improve our
overall internal control system. The internal control review covered areas including corporate
governance, financial reporting and information disclosure and operational controls. Our
Internal Control Consultant conducted an initial internal control review in April, 2025, and did
not identify any material internal control risks. In connection with some minor deficiencies
identified by the Internal Control Consultant, we have implemented various measures to
enhance our internal control pursuant to the recommendations of the Internal Control
Consultant, which include establishing robust compliance policies, implementing standard
operational procedures, performing regular risk monitoring, and conducting periodical
employee training. Our Internal Control Consultant also performed a follow-up review in May
2025 and is satisfied that there continues to be no material deficiencies in the adequacy and
effectiveness of our Group’s internal control systems.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ISSUES
We recognize that environmental, social and governance (“ ESG”) issues have become
key to measuring corporate sustainability and long-term value. We pay close attention to the
impact that ESG and climate change may have on our business, proactively identify and
recognize our responsibilities in relation to ESG issues, and are committed to identifying,
assessing, managing and mitigating ESG-related risks by taking comprehensive and effective
measures. We have formulated key ESG-related policies and institutional documents covering
environmental protection, occupational health and safety, and labor rights protection to ensure
that we carry out ESG-related practices in a standardized and effective manner in all aspects.
We are committed to complying with environmental, social and governance reporting
requirements post-listing and proactively communicating our ESG practices and performance
to our stakeholders. Our PRC Legal Advisors and the legal advisors as to DR Congo laws,
Zambian laws, Peruvian laws and Singaporean laws have confirmed that, to the extent of the
local laws that they are qualified to practice and advise, our Group had been in compliance with
health, work safety and environmental laws and regulations in all material respects during the
Track Record Period and up to the Latest Practicable Date.
ESG Governance
We emphasize the importance of ESG management and have established an ESG
governance structure covering the governance, management and executive levels. The Board of
Directors, as the highest decision-making body, is responsible for deciding our ESG strategies,
objectives and related policies.
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Our Directors have rich management experience in the ‘nonferrous metal industry’, and
have been deeply involved in the supervision and management of safety production,
occupational health, environmental protection and other issues in management practice. They
have senior practical experience in key ESG issues related to the nonferrous metal industry. At
the same time, it is important for Director to have a comprehensive understanding of the
company’s business and the latest developments in the industry, and to provide ESG specific
training to the directors of the company, as well as the latest development trends and relevant
code materials related to climate and sustainability, to promote the board members to enhance
their knowledge and insights related to ESG.
The Strategy Committee under the Board of Directors is responsible for reviewing and
discussing major social, environmental and governance issues. The Board of Directors
conducts comprehensive and in-depth evaluation and monitoring of the progress and
effectiveness of our ESG work by regularly reviewing ESG reports, listening to reports from
the ESG Leadership Team, and examining ESG performance indicators.
At a management level, we established our ESG team which is responsible for (i)
developing the company’s ESG strategy, (ii) determining the evaluation framework and
indicator system for the company’s ESG, (iii) reviewing the company’s ESG report, (iv)
determining the content and steps for improving the company’s ESG, and supervise its
implementation.
We have also established an ESG working group comprising different members from our
various departments including, but not limited to, the General Management Department, the
Safety and Environmental Protection Department, the Facilities Management Department, and
each of our production plants. The ESG Working Group has extensive management expertise
in the areas of safety, environmental protection and occupational health.
We conducted a comprehensive materiality topic identification process, which includes:
1) with the assistance of external consultants, referring to the mainstream ESG rating agencies
of SASB Metal Mining’s material topics Map to sort out the ESG related issues that our
company may be involved in; 2) Invite our management and employee representatives to
evaluate the materiality of various ESG issues to the company, and with the assistance of
external consultants to evaluate the importance of the issues to the environment and society;
3) Based on the evaluation opinions of materiality, a matrix of materiality of topics is
constructed, and the ranking of Importance of topics is carried out to obtain the screening
results of materiality topics. We also report ESG evaluation results to management and Board,
and remind board and management to pay more attention to important issues.
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Environmental
management
Energy utilization and
GHG emissions
Water resources
management
Pollutant management
Waste and Hazardous
Materials Management
Chemical management
Addressing climate
change
Ecological Protection
and Biodiversity
Indigenous Peoples and
human rights
Business ethics and
transparency
Safety and
Occupational wellness
Labor rights
protection
Talent cultivation and
development
Responsible
supply chain
Community relations
Importance to the environment and society
Importance to the Company
High
High
ESG risk management
We emphasize the complexity and diversity of ESG risks and have established an ESG
risk identification and management process, which requires all departments and subsidiaries to
focus on environmental and social risks, identify events and corresponding risk factors that
may have an impact, and take appropriate risk mitigation measures in the course of their
operations. When conducting ESG risk assessment, we mainly consider the degree of impact
of ESG related risks, and use “risk severity” and “probability of occurrence” as key indicators
for ESG risk analysis. Based on the company’s past occurrence of relevant risk events, we
invite internal and external expert to conduct ESG risk assessment.
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For key areas such as employment practices, occupational health, and environmental
protection, we clarify the level of incidents/accidents, classification criteria, reporting
procedures, and penalties. We also effectively control ESG risk factors through various
measures such as special training and hidden danger investigation. The company plans to
conduct a comprehensive ESG risk assessment every two years and report through management
to the Board for oversight and guidance. We will also incorporate the management
effectiveness of key ESG risks such as environmental pollution risks and occupational wellness
risks into the management performance evaluation system to promote management to pay more
attention to the company’s sustainable development.
Risk category Risk Factors Our Response
Climate and
natural
disaster risk /H1118/H1118
Climate change may lead to an
increase in the frequency of
extreme weather events, such as
floods and mudslides, which
may result in damage to
production facilities,
transportation disruptions and
shortages in the supply of raw
materials, which may lead to
disruptions in operations,
resulting in a reduction in Our
production capacity, or in harm
to personal safety and
environmental safety issues; the
transition to a low-carbon
economy may also lead to
fluctuations in the price of
energy, which may result in an
increase in the cost of energy
expenditures.
We are committed to
strengthening the reminder
and warning of natural
disasters, strengthening
geological and
environmental monitoring
around the factory area,
continuously carrying out
energy conservation and
emission reduction, and
improving energy efficiency.
We see our own GHG
emissions as an important
indicator of our climate
resilience. We set GHG
emissions targets for base
year in 2024 and plan to
reduce greenhouse gas
emission intensity (in tons
of CO
2 equivalent/RMB
revenue million) by 5% by
2027.
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Risk category Risk Factors Our Response
Environmental
regulation
risk /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The continued increase in
environmental legislation and
enforcement by the government
and regulatory authorities, more
stringent environmental impact
assessments for proposed
projects, and the enhancement of
relevant standards and
enforcement requirements in
respect of air pollutants, solid
waste, natural resources,
biodiversity and land
reclamation and restoration may
result in the us incurring
additional expenditure on
environmental protection matters
accordingly.
We continuously pay attention
to the dynamics of
environmental protection
laws and regulations, and
plan environmental
protection measures for the
project in advance; increase
investment in environmental
protection technology
research and development to
reduce environmental
protection costs.
Environmental
pollution
risks /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Our copper smelting process
involves the discharge of
pollutants into the air, water, soil
and other environments, which
will have a negative impact on
the environment if the treatment
of pollutants is not up to
standard.
We have improved our
pollutant treatment system
and carried out
environmental monitoring.
We are committed to strictly
complying with local
environmental laws and
regulations (for example, in
China, we require
controlling the concentration
of ammonia nitrogen
emissions in wastewater to
not exceed 15mg/L, and the
concentration of sulfur
dioxide emissions in exhaust
gas to not exceed
960mg/m
3) to ensure that
pollutants are discharged in
compliance with standards;
Develop emergency plans
and promptly disposal
sudden environmental
incidents.
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Risk category Risk Factors Our Response
Human rights
risks /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Our overseas operations involve
communicating with and
employing local people, and may
result in business interruptions
in the event of violations of
aboriginal rights, employment
disputes involving child labor
and forced labor, or improper
handling of community relations
due to improper communication
or handling.
Our primary human rights risks in
overseas jurisdictions in which
we operate are related to labor
rights protection, including
potential child labor issues from
hiring underage job seekers,
labor conflicts arising from wage
disputes, work place
discrimination, and health
hazards for employees due to
potential safety risks.
Specifically, in DR Congo, the
local constitution and Code du
Travail (Labor Code, 2002) and
the 2002 Mining Code stipulate
requirements for prohibiting
forced labor and child labor and
ensuring employment for local
people; whereas in Zambia, the
local constitution and
Employment Code Act of 2019
clearly stipulate that companies
should prohibit slavery and
forced labor and strongly
safeguard the equal employment
rights of workers. In Peru, local
labor laws places significant
emphasis on employee
protection, which may lead to
legal disputes arising during
labor conflicts. Relevant
Peruvian legislation, including
but not limited to the
Constitution of Peru, the Labor
Code (2006), and the Labor
Procedure Act (No. 29497,
2010), not only provides basic
human rights protection but also
stipulates requirements such as
working hour limits and the
prevention of sexual harassment.
In Singapore, the Employment
Act provides basic protections
for the employees it covers,
including regulating working
We strictly comply with
human rights-related norms
or standards, fully
communicate and consult
with stakeholders such as
local governments,
communities and indigenous
peoples, and respect
reasonable opinions and
demands.
To ensure compliance with the
laws and regulations of the
overseas jurisdictions in
which we operate, we
partner with local law firms
and specialized institutions
to conduct thorough reviews
of human rights legislation
and monitor regulatory
developments in such
jurisdictions, including
mining-related provisions
concerning land use, labor
practices, and the rights of
indigenous peoples. We have
established dedicated
compliance checklists to
mitigate associated risks
within our operational
processes. Moreover, as
required by the relevant
laws and regulations of DR
Congo, we have completed
the filing of our employee
management policy with the
Ministry of Labor of DR
Congo; whereas in other
overseas jurisdictions where
we operate, local
governments do not require
the filing or signing of
employee management
policies or other related
documents. Additionally, we
have implemented a series
of human rights protection
measures in all overseas
jurisdictions where we
operate to comply with their
respective norms and
standards relating to human
rights, including:
(i) signing labor contracts
with local employees that
explicitly include
requirements such as
providing labor protection
and making timely monthly
payment of compensation;
(ii) strictly prohibiting the
use of child labor, forced
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Risk category Risk Factors Our Response
hours, overtime pay, rest days,
annual leave. It sets the standard
legal workweek at 44 hours and
required employers to apply for
an overtime exception from the
Ministry of Manpower for
employees to work more than
72 hours of overtime per month.
Slavery and forced labor are
prohibited under Singapore’s
Constitution. Furthermore, the
Employment Act and the
Employment of Children and
Y oung Persons Regulations
impose restrictions on the types
of work children and young
persons may undertake in
industrial settings (such as
construction, transport, and
manufacturing) and non-
industrial settings. Specifically,
children aged 13 to under 15
may only work in non-industrial
settings or alongside family
members in industrial settings;
young persons aged 15 to under
16 may work in both
non-industrial and industrial
settings, provided the employer
must notify the Ministry of
Manpower and submit a medical
report within 30 days of starting
work.
labor or other forms of
unlawful labor. During our
recruitment process, job
candidates are required to
provide identity documents
to prove their age. We will
not interview or recruit
anyone below the legal age
of employment;
(iii) offering compensation
packages (including
performance bonuses,
perfect attendance bonuses,
and position allowances)
that exceed local minimum
wage standards in all such
jurisdictions;
(iv) distributing personal
protective equipment to
employees and requiring its
use on the job;
(v) conducting regular
occupational safety training
for employees;
(vi) reviewing employment
practices to ensure that
recruitment and assessment
procedures are free from
discrimination;
(vii) proactively establishing
regular communication
channels with labor unions
to promptly address
employee concerns and
provide benefits such as
medical assistance for our
employees and their family
members and advance salary
payments; (viii) establishing
a labor rights grievance
channel to handle and
proactively resolve disputes
concerning wages, benefits,
sexual harassment, or
other related issues; and
(ix) conducting annual on-
site inspections of overseas
subsidiaries, including
thorough reviews of human
rights-related initiatives
such as labor rights
protection and community
relations, and overseeing the
implementation of necessary
corrective actions by our
headquarters management.
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Risk category Risk Factors Our Response
Occupational
health risks /H1118/H1118
The production process involves
the use of chemicals and other
operations, although we continue
to strengthen the construction of
health, safety and environmental
protection (“ HSE”) system, but
the implementation of the
relevant relies on the behavior of
the personnel, if due to the
operation of the staff errors lead
to major safety accidents, it may
lead to production stoppages and
administrative penalties.
We strengthen the construction
of our occupational health
and safety management
system, timely detection and
elimination of potential
safety hazards; carry out
safety training and education
to improve safety awareness
and operation skills.
Supply Chain
Risks /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Our business is widely distributed,
there are differences in the
management level of suppliers,
and the risk of negative events
such as safety, environmental
protection and labor rights in the
case of some suppliers is not
conducive to the stability of our
supply chain, which will in turn
lead to impacts such as stoppage
of work and production, or
increase in operating costs.
We optimize the selection and
management of suppliers,
establish long-term and
stable cooperative
relationships, and make
good reserves of emergency
supplies; strengthen supply
chain monitoring and early
warning, and identify
potential risks in a timely
manner.
Business ethics
risks /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Our operations may be subject to
damage to the interests of
employees and business partners
resulting from illegal or
unethical behavior, and in the
event of suspected ethical or
legal violations, this may pose a
significant risk to our business
and result in fines or
reputational damage.
We improve the internal
control management system,
promote corporate
compliance and ethical
integrity, strengthen
employee training and
education, enhance legal
awareness and ethical
literacy, and establish a
culture of integrity and
honesty.
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ESG Indicators and Targets
We are aware that risks such as ESG and climate change may have an impact on our
business. We have identified four key ESG areas in relation to the ESG priorities and practices
of our industry, and have established corresponding indicators and targets based on our
business development plans and management base.
We mainly refer to the criteria for Integrated Emission of Air Pollutants (GB
16297-1996), the criteria for Industrial Pollutant Emission of Copper, Cobalt and Nickel (GB
25467-2010) and the Management Measures for Environmental Prevention and Control of
Tailings Pollution when setting pollutant emission targets. Our operations in Zambia also
comply with the Environmental Management Act issued by the local government and DR
Congo. The directive on environmental impact assessment (DIRECTIVE SUR L’ETUDE
D’IMPACT ENVIRONMENT) issued by the government. We have comprehensively referred
to the environmental protection requirements of the above regulations or criteria. For the
emission indicators with differences, we will implement the strictest ‘standards’, such as
striving to control the pH value of wastewater between 6-9, ammonia nitrogen emission
concentration not exceeding 10mg/L, and sulfur dioxide emission concentration not exceeding
960mg/m
3 in the exhaust gas.
Focus Areas Actions Indicators and targets
Greenhouse Gas
(“GHG”)
emission /H1118/H1118/H1118/H1118/H1118
Regular monitoring and
statistics on carbon
emissions, research and
application of energy-saving
and emission reduction
technologies, and
improvement of energy and
resource efficiency.
Target: Reduce greenhouse gas
emissions intensity (in terms of
tons of carbon dioxide
equivalent per RMB million of
revenue) by 5 percent by 2027,
using 2024 as the base year.
Progress: In 2023 and 2024, our
GHG emission intensity was
21.1 tons of CO
2 equivalent
per RMB million of revenue
and 21.0 tons of CO
2
equivalent per RMB million of
revenue, respectively. This
target is expected to be
achieved as we progressively
optimize the share of
electricity in our energy mix,
optimize process and energy
efficiency, and increase
capacity utilization.
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Focus Areas Actions Indicators and targets
Pollutant
management /H1118/H1118
Continuous improvement of
the environmental
management system to
reduce pollutant emissions
and minimize the
environmental impact of
emissions.
Goal: Strive to achieve 100%
compliance with emissions and
wastewater standards.
Progress: During the period from
2022 to June 30, 2025, our
pollutant emission targets
reached the relevant emission
limit values or control targets.
The waste slag and waste
liquid generated are all stored
in environmentally friendly
tailings.
Protection of
labor rights
and interests /H1118/H1118
We have a “zero-tolerance”
attitude towards child labor
and forced labor, and are
determined to eliminate the
use of child labor and all
forms of forced labor.
Objective: To continue to
maintain “zero incidence” of
child and forced labor.
Progress: During the period from
2022 to June 30, 2025, we
strictly verified the true age of
the employees who joined us,
and no violations of laws and
regulations regarding child
labor or forced labor occurred.
Occupational
Health and
Safety /H1118/H1118/H1118/H1118/H1118/H1118
Implementing the concept of
“people-oriented, safe
development”, continuously
improving the occupational
health and safety protection
system, and preventing and
avoiding the occurrence of
work-related accidents and
deaths.
Goal: Strive to achieve the
safety management goal of
“zero workplace fatalities”.
Progress: This target aims to
strengthen our occupational
health and safety management
to safeguard the health of our
employees. Save for one
fatality in February 2025 in
Zambia due to inappropriate
use of acid offloading
equipment, we had not
experienced any other fatality
during the Track Record Period
and up to the Latest
Practicable Date.
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Environmental liability
We actively practice the concept of green and sustainable development, and are
committed to becoming an environmentally friendly enterprise. We continue to improve our
environmental management system, identify environmental risks and take preventive and
control measures on a regular basis in order to minimize negative impacts on the environment.
Environmental management
Our Board of Directors and management attach great importance to environmental
protection, with the chairman of the Board of Directors taking overall leadership responsibility
for environmental protection throughout us, making decisions, supervising and coordinating all
environmental protection tasks, urging the us to take targeted emission reduction action
measures, and promoting us to successfully reach the relevant environmental protection
targets. In order to ensure the effective implementation of environmental management work,
we have set up the Safety and Environmental Protection Department, which is responsible for
day-to-day environmental management and supervision, and has implemented a supervision
and management system with designated personnel and responsibilities to ensure full coverage.
We have established an environmental protection training and assessment system, and carries
out environmental publicity, education and training at least once a year, covering
environmental emergency management, environmental pollution control technology and
monitoring technology, basic theories of clean production and its role, etc. The safety and
environmental protection section of each subsidiary regularly organizes exams for those who
take part in the education and training, and our safety and environmental protection department
regularly checks the results of the exams on a random basis.
At the same time, we strengthen our environmental inspection efforts, with the safety and
environmental protection sections of our subsidiaries responsible for daily monitoring and
management, and our safety and environmental protection department is responsible for
random inspections and supervision. The operation and suspension of our environmental
protection facilities and equipments are in strict compliance with the relevant national and
local policies and laws and regulations, managed and inspected by the safety and
environmental protection department, and maintained and serviced by the responsible units.
Every year, we commission a third party or carry out comprehensive monitoring of “water, gas
and sound”, obtain environmental monitoring reports, and identify problems and make
corrections in a timely manner. We have established an emergency rescue system for
environmental accidents, formulated an emergency rescue plan, equipped with emergency
rescue materials, and conducted regular emergency rescue drills. We carry out rescue
operations scientifically in strict accordance with the principles of “division of labor,
cooperation, timely and effective” to ensure timely response to environmental accidents and
minimize accidental damage, casualties and environmental pollution. We have established a
standardized environmental management system, and have obtained the environmental
management system certification (ISO14001), which is valid until January 4, 2028.
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In February 2025, our Zambian subsidiary experienced an acid leakage incident during
unloading operations, leading to a suspension order from the government. In March 2025, we
received a separate environmental restoration order related to an earlier discharge into nearby
water bodies. Following comprehensive rectification measures, including drainage
improvements, we have resumed operations.
Energy use and greenhouse gas emissions
We have formulated the Energy Resource Management and Energy Conservation System
to promote energy resource management in a comprehensive manner. We regularly collect,
organize and analyze energy resource consumption data and energy conservation work data,
identify potential space for energy conservation, and formulate detailed energy conservation
goals and plans to reduce energy consumption on the operation side. We have established a
supervision and assessment system to encourage employees to supervise the wastefulness of
energy resources, and regularly assess and evaluate the fulfillment of energy-saving goals and
the effectiveness of the implementation of energy-saving measures in each department,
position and individual, so as to continuously strengthen the work of energy conservation and
emission reduction.
The energy saving and emission reduction initiatives we have taken include the following:
 Technical energy-saving measures: Increase the R&D and application of energy-
saving technologies, promote the application of intelligent production technologies
and energy management systems, use energy-saving equipment, use frequency
conversion control for high-power equipment, install shunt capacitor panels next to
the workshop substation or equipment to compensate for reactive power, use
grid-type anode plates, and utilize height difference to realize self-flow of liquids,
among others, to reduce energy consumption and lower the level of carbon
emissions.
 Management of energy-saving measures: strengthening the management of
production plans, optimizing the organization of production, establishing an
energy-saving target responsibility system, carrying out regular energy-saving
education and training activities, and organizing energy-saving competitions.
 Green Office: Double-sided printing is used for all internal documents, lights are
turned off during lunch breaks, and energy-saving slogans are posted in the office
area to remind employees to save energy.
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A breakdown of our major energy consumption during the Track Record Period is set out
below:
For the year ended December 31,
For the six
months ended
June 30,
2022 2023 2024 2025
Total integrated energy
consumption (thousand tons of
coal) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.6 5.2 13.0 5.7
Purchased electricity (GWh) /H1118/H1118/H1118/H1118/H111818.8 17.5 40.1 32.9
Diesel consumption (thousand
tons) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.2 2.3 6.4 1.3
Comprehensive energy
consumption per unit of output
value (tons of standard
coal/RMB million yuan
revenue) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.1 7.3 7.4 5.9
Direct GHG emissions (Scope 1)
(thousand tons of CO
2
equivalent) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.7 7.4 20.4 4.1
Indirect GHG emissions (Scope
2) (thousand tons of CO 2
equivalent) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.8 7.3 16.7 13.7
Total GHG emissions (Scope 1
and Scope 2) (thousand tons of
CO
2 equivalent) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188.5 14.7 37.1 17.8
GHG emission intensity (tons of
CO2 equivalent per RMB
million of revenue) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813.3 21.1 21.0 18.5
Notes:
(1) In view of our current smelting business, which is primarily located in DR Congo and Zambia, the above
figures includes Jinxun DR Congo and Rong Xing Investments. Our subsidiaries in other countries and
regions only have a small number of employees engaged in the administration and sales business that
causes a relatively small impact on overall energy and greenhouse gas (GHG) emissions. Therefore, the
relevant data of such subsidiaries is not included in the statistics at this time.
(2) During the Track Record Period, our consolidated energy consumption and total GHG emissions
increased, generally in line with our business development. This increase was mainly due to our
continued expansion of production capacity. The second phase of the Zambia Project began operating
in March 2022, and the first phase of DR Congo Project began operating in August 2023. These
expansion led to an increase in our energy and GHG emission intensity in 2023 compared to 2022.
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(3) Although our total integrated energy consumption and total GHG emissions have increased between
2023 and 2024, the comprehensive energy consumption per unit of output value and GHG emission
intensity has remained relatively stable as the capacity utilization of new projects has gradually
increased.
(4) In the early stages of commissioning our projects in Jinxun DR Congo, we used diesel generators to
provide electricity for production. As our operations matured, we optimized our energy mix and
increased our purchase of electricity from the local grid. Consequently, our purchased electricity
increased significantly in the six months ended 30 June 2025, compared to the same period in 2024,
while our diesel consumption decreased significantly.
During the record period, our comprehensive energy consumption and total GHG
emissions were primarily affected by new fresh projects and capacity expansion. Between 2023
and 2024, our comprehensive energy consumption per unit of output and GHG emission
intensity remained relatively stable as the capacity utilization of new projects gradually
increased.
We introduced grid anode plate technology in 2023, which increased the current
efficiency from the traditional 93% to 95%, saving approximately 40kWh of electricity per ton
of copper. From 2023 to 2024, this technology achieved a total energy savings of
approximately 730.2 MWh.
According to the GHG Protocol-Corporate V alue Chain (Scope 3) Accounting and
Reporting Standard, we emit Scop e 3 — Other Indirect GHG Emissions (Scope 3 Emissions)
from business travel, employee commuting, waste disposal, transportation and distribution
(upstream and downstream), and processing of products sold. These emissions arise from
activities up and down our value chain and are controlled by other operating entities. Due to
challenges in the availability of relevant data, we are planning to gradually identify statistical
mechanism of Scope 3 emissions and make an appropriate disclosure in the future.
Water Resource Management
Our water resources are mainly used for domestic water for production and water for
production processes. We strictly comply with the laws and regulations of the locations in
which we operate and have formulated internal systems such as the “Energy Resource
Management and Energy Conservation System” to clarify the water resources management
system, water resources risk assessment and water resources usage specifications. The Group’s
water sources are mainly municipal water, surface water and groundwater. We have clearly
defined water resource management in the “Energy Resource Management and Energy
Conservation System”, formulated annual water conservation plans and annual water
conservation targets for equipment and domestic water consumption, reviewed water
consumption on a monthly basis, and conducted inspections of water consumption on-site from
time to time. In 2022, 2023, 2024 and the six months ended June 30, 2025, our water
consumption was 237.6 thousand, 396.1 thousand, 687.3 thousand and 461.4 thousand cubic
meters, respectively. And the corresponding water intensity was 372.7 cubic meters per RMB
million of revenue, 570.3 cubic meters per RMB million of revenue, 388.2 cubic meters per
RMB million of revenue and 478.8 cubic meters per RMB million of revenue, respectively.
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The main water conservation initiatives we have undertaken include the following:
 Strengthening the recycling of water resources: in the smelting process, the
wastewater generated from leaching, washing and other processes is treated and
reused, so as to improve the reuse rate of water resources.
 Installation of water-saving appliances and equipment: Strengthening the
maintenance and management of water-using equipment, regularly checking water
pipes, valves and faucets and other equipment, and repairing leaks in a timely
manner to avoid wasting water resources.
 Establishment of water metering management system: Measuring and counting
water consumption of each production workshop, department and living in the
factory, analyzing the water consumption situation, finding potential points for
water saving and taking corresponding measures to reduce water consumption.
 Water-saving culture construction: carry out water-saving publicity and education
activities to improve the staff’s awareness of water conservation and develop good
habits of water conservation.
Pollutants and emissions
Our smelting production process involves the discharge of pollutants into the atmosphere,
water bodies, soil and other environments. We strictly comply with the Law of the People’s
Republic of China on Prevention and Control of Air Pollution and other laws and regulations
applicable to the locations where we operate, and fully implement the Comprehensive
Emission Standards for Air Pollutants (GB 16297-1996) and Technical Specifications for
Setting Up of Exhaust Gas Monitoring Points for Fixed Pollution Sources (DB 37/T3535-2019)
and other management standards. We have defined the emission targets for each pollutant and
waste and set scientific control limits with reference to industry standards and guidelines.
We strictly follow our environmental impact assessment system, adopt effective measures
for the treatment of waste gas, waste water and solid waste, and monitor the emission of waste
gas through regular and daily testing to strictly ensure that the concentration of waste gas
emissions and the total amount of pollutants comply with the regulatory requirements.
 Exhaust gas and dust management: Our exhaust gas mainly consists of dust and acid
mist, as well as sulfur dioxide generated from the use of diesel fuel. We reduce dust
by setting up two spray cannons in the ore crushing system of the rough crushing
station, timely adopting measures such as sprinkling water and covering thatching
during the loading and transportation of ore; and we suppress the generation of acid
mist by adopting sealing of the tanks in the leaching and cobalt recovery workshop
with a cover, adopting a semi-open plant design for the workshop of the
electrowinning vehicle and adding fiber balls to the electrowinning tank.
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 Wastewater management: We realize solution recycling through closed loop system
in production, and almost no wastewater is discharged externally, among which, the
underflow slurry produced by milling is sent to smelting area, and the magnesium
precipitation liquid from smelting is returned to milling as supplemental water; the
leaching liquid produced by leaching is extracted to get extraction residue, and the
extraction residue is treated in grease traps, and then returned to leaching or used in
leaching washing; the electroprecipitation electro-poor liquid produced by
electroaccumulation gets electro-rich liquid through back-extraction, and then sent
to the electroaccumulation workshop to produce copper cathode; the domestic
wastewater is treated and qualified for use by sprinkling trucks. Our safety and
environmental protection department is responsible for supervising and guiding the
wastewater treatment work, and the ore processing plant is responsible for the daily
management and maintenance of the wastewater treatment station. Employees of the
wastewater treatment station regularly check the operation of the sewage system and
the drainage electrical equipment, and regularly monitor whether the relevant data
meet the standards.
 General solid waste management: We set up garbage bins at industrial sites to collect
domestic garbage, which will be transported by garbage trucks to garbage dumps for
treatment.
 Tailings storage management: We transport all the waste slag generated from the
smelting process to the environmentally friendly tailings storage. The
environmentally friendly tailing pond is surrounded and bottomed with HDPE
anti-seepage membrane, and a seepage conduction system has been set up to avoid
adverse impact on the surrounding environment. After the service period, the tailing
pond will be covered with soil and greened with vegetation. In 2022, 2023, 2024 and
the six months ended June 30, 2025, our tailings volume was 145.6 thousand tons,
636.6 thousand tons, 1,432.0 thousand tons and 758.9 thousand tons, respectively.
Chemicals management
We are engaged in the wet smelting process of copper, which involves the use of sulfuric
acid, copper sulfate, extractants and other related chemicals. Some of these chemicals may
pose potential risks of accidents such as combustion, explosion and poisoning during
transportation and storage. We fully identify and investigate the safety risks associated with
chemicals, make good declaration and registration of chemicals at source, strengthen the safety
management of the whole chain of chemicals, and strictly ensure the safety of chemicals.
We have formulated our safe production management system and our environmental
protection management System, in which the identification of hazardous and harmful factors,
division of management responsibilities, risk evaluation and control management of activities
or scenarios such as the transportation of raw materials, products and the use of the process,
among others, are clearly stipulated, covering the transportation, storage and use of hazardous
chemicals in all aspects. We also conduct professional training for employees involved in the
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use, storage and transportation of chemicals to promote employees’ understanding of the nature
of chemicals, hazards, safe operation procedures and emergency treatment methods, and
formulates comprehensive emergency plans for chemical accidents and organizes emergency
drills on a regular basis; adopts the necessary protective measures, such as protective goggles,
masks and gloves; and is equipped with the necessary emergency rescue equipment and
materials, such as fire extinguishers, eye washers, first-aid medicines, etc., eyewash, first aid
medicines, among others, to prevent potential occupational health hazards.
Responding to Climate Change
We consider it our duty to respond to climate change by proactively identifying and
analyzing the potential impacts of climate-related risk factors, and have begun to carry out
appropriate planning to enhance our capacity to respond to climate risks, and to take
comprehensive action to enhance our resilience to climate risks.
In terms of physical risk, extreme weather events such as floods, typhoons, wildfire,
extreme heat etc. will have a direct impact on mining ‘infrastructure’ and equipment, increase
energy demand, and lead to increased operating costs. We have conducted analysis and
assessment on climate risk, and fully considered climate risk through extreme weather
monitoring and warning, project site selection and feasibility assessment. Our new projects are
all located in inland areas, and we have fully considered the impact of extreme weather events
when selecting sites, and have developed emergency disaster recovery plans to ensure the
stability and safety of operations. In the medium to long term (5-10 years), the impact of
climate related physical risk on us is relatively low.
In terms of transition risk, as regulatory requirements for climate change continue to
strengthen, compliance may incur additional costs and involve other unexpected impacts that
could impact our operations, financial condition and results of operations. The transition to a
low-carbon economy will require appropriate investments and may involve policy, legal,
technological, and market changes to address climate change mitigation and adaptation
requirements, given that mining and mineral processing are energy-intensive businesses. In the
medium to long term (5-10 years), the response to transition risk mainly requires us to collect
carbon emissions data, hire carbon emissions management staff, carry out energy-saving and
carbon reduction projects, etc., and the related costs or inputs will have a minor impact on us
and remain within our estimates. Meanwhile, the increasing demand for renewable energy and
low-carbon technologies is expected to drive demand for energy transition metals, such as
copper and cobalt. This may provide us with certain business opportunities.
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Type of risk Risk Factor Risk Description Potential Impact
Climate-related physical risks
Acute risks /H1118/H1118Extreme weather
events
The occurrence of catastrophic high temperatures,
droughts, heavy rains and other weather events
may cause our production sites and offices to be
exposed to the risks of flooding, damage to
facilities and equipment, and production
interruptions, and may prevent suppliers from
making timely deliveries or deliveries to customers
on time, affecting the stability of deliveries.
Rising operating
costs or business
interruption
Physical risks /H1118Chronic natural
disasters
Rising temperatures and changes in rainfall may affect
our business activities. For example, we may need
to consume electricity and natural gas more
frequently to use refrigeration equipment and
warming facilities in order to maintain appropriate
temperatures and ensure the health of our
employees, resulting in higher operating costs.
Higher operation
and maintenance
costs
Climate-related transition risks
Policy and
legal risks /H1118
Carbon emission
regulatory
requirements
As the global focus on climate change intensifies and
national and local dual-carbon policy requirements
gradually increase, we may face stricter carbon
emission restrictions and green development
policies, resulting in higher environmental
compliance costs.
Declining demand
for products and
services Decline
in sales revenue
Technological
risks /H1118/H1118/H1118/H1118/H1118
Investment in low-
carbon
technologies
With the continuous development of digital
transformation, automation and green technologies
in the metal smelting industry, we are faced with
continuous changes in new technologies, including
investments in the field of low-carbon technologies
in order to carry out low-carbon and energy-saving
related technological upgrades or innovations,
which may result in investment losses due to
mispositioning or mistargeting of the investments
or encountering technological bottlenecks.
Return on
investment not as
good as expected
Market risks /H1118Raw material supply
risk
Raw material suppliers or due to extreme weather,
fluctuations in energy prices, among others,
resulting in an increase in raw material prices,
operating costs, or in severe cases, disruptions in
the supply chain, affecting Our production.
Increased operating
costs
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Type of risk Risk Factor Risk Description Potential Impact
Changes in market
demand
Investors and consumers are paying more attention to
the issue of corporate carbon emissions and low-
carbon transition. Metal smelting companies, as the
companies under focus, may lead to risks such as
divestment and reduced sales if the green transition
fails to meet expectations.
Declining demand
for products and
services
Reputational
risks /H1118/H1118/H1118/H1118/H1118
Increased
stakeholder
concerns and
negative
feedback
If the performance in environmental protection and
carbon reduction does not meet the expectations of
stakeholders or generates negative feedback, it may
lead to damage to the brand image and be
questioned by relevant parties.
damaged goodwill
Climate-related opportunities
Products and
Services /H1118/H1118
Increased demand
for non-ferrous
metals
In the context of global green development, the
demand in the fields of photovoltaic, wind power,
transmission and distribution network expansion
will drive the demand for copper, cobalt and other
non-ferrous metal products to continue to grow. We
are expected to further capitalize on market
opportunities with guaranteed production capacity.
Increased demand
for products
Resource
efficiency /H1118/H1118
Resource and
energy efficiency
improvements
In response to climate change, we are actively
working to improve the efficiency of energy
resource utilization by adopting energy-saving
measures and implementing the “Energy Efficiency
Improvement” program to reduce the use of energy
resources and thus reduce operating costs.
Increased energy
efficiency
In response to the above climate risk factors, we will continue to improve our monitoring
measures, pay attention to weather forecasts in a timely manner, provide advance warnings of
extreme weather, and properly arrange work plans; conduct regular safety training and
emergency drills to enhance the ability of our employees to prevent and deal with natural
disasters and accidents arising from them; and. At the same time, we have increased our efforts
in the research and development and application of green and low-carbon technologies,
focusing on promoting the upgrading of energy-saving and consumption-reducing equipment
and the introduction of innovative technologies, and have continued to improve our coping
mechanisms to minimize the impacts of climate change.
Ecological conservation and biodiversity
We continuously carry out biodiversity and land resource management at all stages of
project design, implementation and completion. For all new projects, we carry out
environmental protection due diligence and environmental impact assessment, and
comprehensively evaluates the potential impact of the project on biodiversity. If significant
ecological risks are found, we will terminate the investment or construction plan.
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We attach great importance to ecological protection, and adopts biological management
measures combined with slope protection and planting a certain width of protective forest belt
around the production plant, so as to minimize the impact of harmful dust generated during the
production process on the surrounding ecological environment. When the discharge site
reaches the expected design elevation, we will carry out the topsoil layered covering work, try
to lay the small grain size, low hardness, easy to weather the rocks and fertile soil on the upper
layer to facilitate crop growth, and plant fast-growing drought-resistant, barren plants, such as
purple flowers, alfalfa, erect milkvetch, etc. to achieve the effect of maintaining soil and water
and increasing the fertilizer. At the same time, the mulching of the production area also plays
the role of water conservation to maintain the soil and water at the periphery of the production
area and to reduce the loss of water and the role of desertification.
Social Responsibility
We have always placed social responsibility at the forefront of its development, actively
assumed social responsibility, committed to sharing the fruits of corporate development with
the community, maintaining friendly, mutually beneficial and win-win relationships with
employees, customers, suppliers and other stakeholders, and promoting our sustainable
development.
Safety and Occupational Health
We are required to comply with workplace safety laws and regulations in the countries
and regions in which we operate. We regard occupational health and safety as an important part
of our responsibilities. We have also adopted and implemented a number of measures relating
to occupational health and safety. We have implemented systems and processes to identify and
prevent accidents and hazardous situations, as well as processes relating to emergencies,
accidents and other hazardous situations.
We have continuously improved the integrity and operational effectiveness of our HSE
management system. We have sorted out and improved the management system, clarified the
management elements that we focus on controlling at the current stage, and designed
management processes and methods for these elements, and built an occupational safety
management system that meets our overall strategy and is in line with the characteristics of
globalized operations. We have formulated and revised the Occupational Safety Management
System, and our subsidiary, Rong Xing Investments, has formulated a series of procedural
documents, such as the Measures for the Management of Safe Operations of Rong Xing
Investments, and the System of Responsibility for Safe Production of Rong Xing Investments,
to ensure the relative completeness of the management system, and implement the
responsibility for safe production to each department. We have established a standardized
safety management system, and We have obtained a certificate of safety management system
certification (ISO45001), and such certification held by us is valid until January 4, 2028.
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We conduct regular safety inspections to help ensure that our manufacturing facilities are
operating properly and that our employees are complying with our safety manual. Any
irregularities noted during regular safety inspections are reflected in our safety records and
subsequent remedial measures are taken by the responsible departments and/or senior staff. In
addition, we continue to strengthen our efforts in identifying and managing potential hazards
by deploying safety management personnel at each of our production sites to conduct regular
hazard inspections at the work sites in accordance with our safety inspection program to ensure
that the work sites are in compliance with safe production conditions.
We provide comprehensive health and safety training for our employees to improve their
safety awareness, prevent production and safety accidents, and mitigate occupational hazards.
We formulate a safety education program every year, and the Integrated Management
Department and the Safety and Environmental Protection Department provide safety education
and training to the persons in charge of each production area and the operators of each position
in a timely manner for the production situation and the position configuration of that year,
covering relevant national laws and regulations, Our safety rules and regulations, the mine’s
safety system and the operation process, among others, with the aim of overall improvement
of the safety skills of the employees engaged in the high-risk industry, and to ensure that the
affiliated companies In-service and newly recruited employees receive full production safety
knowledge and skills upgrading training.
The occupational disease hazards involved in our production process include metal dust,
chemical substances, irritating gases, noise and vibration. In order to reduce the risk of
occupational diseases, improve the level of occupational health protection, we have also taken
a number of safety measures, including: (i) formulating an annual safety education program
every year to provide safety education to the persons in charge of each production area and to
the operators of each position; (ii) carrying out safety inspections on a regular basis; and (iii)
equipping chemical operators with protective goggles, masks, gloves and other materials, and
providing employees with dustproof, anti-static, acid- and alkali-resistant and corrosion-
resistant work clothes and a set of personal protective equipment; (iv) organizing regular
annual medical check-ups for the entire workforce, including our foreign colleagues; (v)
selecting as far as possible non-toxic and non-hazardous advanced production processes in the
formulation of production and construction projects; and (vi) safety inspections are conducted
daily at each plant, weekly production safety meetings are held at each subsidiary, monthly
reports are made by each subsidiary to the headquarter, random safety inspections are
conducted from time to time, and problems are found to be reported, rectified immediately, and
appraisal notifications are made.
During the Track Record Period and as of the Latest Practicable Date, we had not
encountered any safety- or robbery-related incidents. Save for one fatality in February 2025 in
Zambia due to inappropriate use of acid offloading equipment, we had not experienced any
other fatality during the Track Record Period and up to the Latest Practicable Date. See “—
Compliance and Legal Proceedings” for more details. In 2022, 2023, 2024 and the six months
ended June 30, 2025, we recorded nil, one, one and nil work-related injury incidents,
corresponding to nil, 92, 45 and nil days of lost workdays due to work-related injuries. We have
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investigated both work-related. Specifically, the work-related injury incident in 2023 occurred
in the cobalt workshop of our product facility in DR Congo, while the work-related injury
incident in 2024 occurred in the raw material preparation workshop of our production facility
in DR Congo. The two injuries were purely accidental, mainly due to the failure of such
employees to follow our policies and operating practices which resulted in pinch injuries and
arm scratches, all of which were classified as minor injuries. We have comforted and
compensated the injured employees and their families, and comprehensively rectified the
occupational wellness safety hazards. We have taken the following measures to address
potential safety hazards and vulnerabilities, and to improve and strengthen the safety of the
work environment: (i) the raw material workshop prohibiting the use of non compliant tools to
clean the tail wheel; (ii) management personnel strengthening daily inspections and promptly
identify safety hazards; (iii) improving the safety operation procedures for acid loading and
unloading; (iv) providing operators with acid-resistant personal protective equipment; (v)
installing emergency cleaning equipment next to the unloading bay; and (vi) training
employees who handle hazardous substances on safe handling procedures. Following the
implementation of enhanced internal policy, we further consulted with the Internal Control
Consultant, and they had no further recommendations with respect to our work environment
safety internal control.
Protection of labor rights and interests
We comply with the relevant labor standards, laws and regulations of the jurisdictions in
which we operate. Our PRC employees working in the DR Congo and Zambia have obtained
valid work permits, which are renewed annually. The labor contracts of our local employees are
executed in accordance with the local laws of the countries in which they work. During the
Track Record Period and up to the Latest Practicable Date, we have not been involved in any
material labor rights violations or litigation in the DR Congo, Zambia or the PRC.
We strictly implement the laws and regulations applicable to the locations in which we
operate, and we are committed to following and adopting high standards of international labor
conventions and initiatives, and we have formulated our Personnel Management System and
other systems to clearly define our policy on the protection of labor rights and interests. Our
Recruitment Management System clearly states that no one under the age of 18 shall be
employed. During the onboarding process, the true age of employees shall be verified through
information verification; forced labor and any form of discrimination (including but not limited
to gender, ethnicity and religious factors) are prohibited.
Due to the differences in the countries and regions in which our subsidiaries are located
and the content of their work, each subsidiary ensures that the working hours of its employees
do not exceed the legal working hours in accordance with the laws and regulations of the
countries and regions in which they are located. At our copper cathode smelting sites in Zambia
and DR Congo, we adhere to the principle of “six-day work week”, with a maximum of eight
hours of work per day and a maximum of 42 hours of work per week. In addition to statutory
holidays, we also provide our employees with paid leave, including annual leave, sick leave,
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maternity leave, marriage leave and bereavement leave. At the same time, we provide
employees with overtime, night shift and high temperature allowances to further enhance the
level of employee benefits, protect the legitimate rights and interests of employees and
promote work-life balance.
To monitor our compliance with our policies and relevant laws and regulations in relation
to working hours requirements, we require employees to complete attendance sheets to record
daily attendance and working hours. Subsidiaries must report operational outcomes to our
headquarters on a monthly basis, including work hour records, workforce fluctuation analysis,
and labor cost trend analysis. This enables us to identify any staff shortages and overtime. Our
headquarters management also engage in dialogue with labor unions annually to identify any
overtime.
We respect differences, encourage diversity, and do not discriminate against employees
on the basis of gender, age, location, religion, among others, or make it an obstacle to their
development in us. We have established a standardized internal complaint and handling
mechanism and a monitoring organization. Employees who believe that they have been
discriminated against, harassed, or treated unfairly can provide feedback through an
anonymous complaint hotline. We will take strict confidentiality and protection measures for
those who make complaints and grievances, and any form of retaliation is strictly prohibited.
During the Track Record Period, we have not received any cases of discrimination or
harassment against employees.
The composition of our employees by gender, and geographical distribution is shown in
the table below. For details of our employees, including their functions and educational
qualifications, see “— Employees”.
For the year ended December 31,
For the six
months ended
June 30,
2022 2023 2024 2025
Total number of employees /H1118/H1118/H1118/H1118687 782 826 901
Number of employees by gender
Male /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118607 716 754 822
Female /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880 66 72 79
Number of employees by region
Chinese Mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149 134 152 188
DR Congo /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241 354 273 294
Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118288 286 390 409
Peru /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111898 1 1 1 0
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Talent Cultivation and Development
We provide employees with a good office environment, as well as professional training
opportunities, through the establishment of a systematic and perfect talent training system,
continuous attention to the performance of employees, and continue to improve the staff
promotion policy and process, standardize the selection, appointment and training of talents,
and establish a fair, just and open employment mechanism.
In terms of training and development, we will assign or transfer employees to different
positions to arrange occasional vocational training according to business development needs.
Combined with the self-growth and development demands of employees, we focus on key
stages and key groups, and carry out key training specialties in different fields and modules,
covering new employee training, technical training, professional ability training, among others,
to meet the growth and development needs of different stages, different fields and different
forms.
In terms of performance appraisal, we have established a performance appraisal system
covering all employees at home and abroad, and formulated a performance management system
and process, by breaking down the strategic objectives, organizational objectives and
individual objectives layer by layer, to form a closed-loop process from the formulation of
performance objectives, performance implementation and coaching, performance evaluation
and performance feedback.
In terms of career advancement, we have established a professional and management
promotion mechanism based on performance, ability and experience requirements, providing
employees with two development paths: management path and professional path. Every year,
we determine the promotion requirements for the current year based on business and manpower
planning, and carry out promotion nomination, qualification review, employee defense,
approval of results and employee communication in order to identify truly outstanding talents
and give them promotion opportunities.
Responsible Supply Chain
We uphold the principles of openness, fairness and impartiality, emphasize
communication with suppliers, and strive to establish long-term mutually beneficial and
win-win relationships with suppliers. We have formulated the Supplier Management and
Evaluation System to facilitate the purchasing department’s assessment of supplier
qualifications, credit rating, product quality, and suppliers’ daily maintenance measures. We
promote responsible practices with our suppliers by setting clear standards, operational
transparency and continuous improvement. We require suppliers to commit to comply with
relevant laws and regulations in all operational activities, abide by high ethical and moral
requirements, and commit to and comply with the following behavioral standards, such as:
requiring suppliers to provide their employees with safe and healthy living and working
environments that comply with the requirements of laws and regulations, local rules and
regulations, and industry norms; to develop sufficient and effective adequate measures for
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emergency preparedness and response; and to commit to obtaining, update the necessary safety
permits; establish and maintain an effective labor, health and safety, environmental and
business ethics management system and continuously improve it; commit to reducing the
impact on the environment, protecting natural resources, reducing the adverse impact on the
environment during the production process, reducing energy consumption and greenhouse gas
emissions, and prohibiting the illegal discharge of toxic and hazardous pollutants, including
wastewater, waste gas or waste residue.
The agreements we sign with our suppliers include requirements related to integrity,
safety management, and environmental management, and we conduct on-site audits from the
corresponding dimensions during the admission of suppliers. We also include safety
assessment as a demerit item, and will severely deduct points for each vicious incident or
safety accident.
Community relations
We are committed to conducting our business activities in a manner that promotes
positive and open relationships with local communities, communicates with the communities
in which we operate, seeks to understand community feedback and concerns through a variety
of channels, and actively participates in the development of local communities by providing
local employment and supporting local health, safety and education programs. During the
Track Record Period, we provided more than 800 jobs in Zambia and DR Congo and
participated in local infrastructure projects in Africa, including the construction of schools, bus
stations and roads.
Community giveback activities we have undertaken include (i) ongoing donations of
materials and support for the construction of wells for local communities and schools in
Zambia from 2018 to 2020; (ii) a donation for the construction of a bus station/passenger
waiting room in Zambia along the Mufulira Road in May 2022; and (iii) a donation to fund the
construction of three classrooms in the Kalulushi area of Kempisi, Zambia in May 2022.
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OVERVIEW
Immediately upon completion of the Global Offering (without taking into account any
Shares which may be issued pursuant to the exercise of the Over-allotment Option), our
ultimate Controlling Shareholder, Mr. Y uan, will, directly or through Heli Investment, will hold
approximately 74.94% of the total share capital of our Company. Heli Investment is our share
incentive platform which is controlled by Mr. Y uan, acting as its general partner, by managing
its daily affairs and exercising the voting rights on behalf of Heli Investment as our
Shareholder pursuant to the partnership agreement of Heli Investment. Mr. Y uan will, directly
or through Heli Investment, control the exercise of more than 30% of the voting power at
general meetings of our Company upon Listing. See ‘‘History and Corporate Structure — Our
Corporate development — Share Incentive Platform” for further details of Heli Investment.
Accordingly, Mr. Y uan and Heli Investment constitute a group of our Controlling Shareholders
under the Listing Rules.
Mr. Y uan, our ultimate Controlling Shareholder, is our executive Director, chief executive
officer and chairman of our Board. For further background of Mr. Y uan, see “Directors and
Senior Management — Board of Directors — Executive Directors.”
DELINEATION OF BUSINESS
Each of our Directors and our Controlling Shareholders has confirmed that, as of the
Latest Practicable Date, none of them or any of their respective close associates had interests
in any business, other than our business, which competes, or is likely to complete, either
directly or indirectly, with our business which would require disclosure under Rule 8.10 of the
Listing Rules.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS AND THEIR
RESPECTIVE CLOSE ASSOCIATES
Having considered the following factors, we believe that we are capable of carrying on
our business independently of our Controlling Shareholders and their respective close
associates (other than our Group) after the Listing for the following reasons:
Management Independence
Our Board comprises three executive Directors and three independent non-executive
Directors. As of the Latest Practicable Date, save for Mr. Y uan, who is our executive Director
and ultimate Controlling Shareholder and Ms. Y uan Mei, who is our executive Director and Mr.
Y uan’s sister, none of our Directors or members of our senior management team is a close
associate of our Controlling Shareholders. As such, we believe that our Board as a whole and
members of the senior management are able to perform their roles in our Group independently
and that our Group is capable of managing our business independently from our Controlling
Shareholders and their respective close associates.
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Each of our Directors is aware of his/her fiduciary duties as a Director, 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
interests. In the event that there is any potential conflict of interest arising out of any
transaction to be entered into between our Group and any of the Directors or their respective
close associates, the interested Director(s) 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.
Based on the reasons above, our Directors are of the view that our Group is capable of
managing our business independently from our Controlling Shareholders and their respective
close associates after the Listing.
Operational Independence
We have full rights to make all decisions on, and to carry out, our own business operations
independently from our Controlling Shareholders and their respective close associates and will
continue to do so after the Listing. Our Group is able to operate without reliance on our
Controlling Shareholders and their respective close associates.
Licenses required for operation
We hold all relevant licenses necessary to carry on our current business independently
from our Controlling Shareholders and their respective close associates.
Access to customers and suppliers
We have a diversified base of customers that are independent to our Controlling
Shareholders and their respective close associates. During the Track Record Period, our
customers generally included metal trading companies and non-ferrous metal producers, which
are independent from our Controlling Shareholders. In addition, we have independent access
to suppliers and business partners as well.
Operational facilities and administration
As of the Latest Practicable Date, our Company operated and maintained properties,
facilities and equipment necessary to our business operations that are independent from our
Controlling Shareholders and their respective close associates.
Employees
As of the Latest Practicable Date, all of our employees were recruited independently from
our Controlling Shareholders and their respective close associates and primarily through both
internal referrals and external sources such as recruiting websites and third-party recruiters.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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Financial Independence
We have independent financial and internal control systems. We have established our own
finance department with a team of financial staff, who are responsible for financial control,
accounting, reporting, group credit and internal control function of our Company. We can make
financial decisions independently and our Controlling Shareholders does not intervene with our
use of funds. In addition, we have been and are capable of obtaining financing from
Independent Third Parties.
During the Track Record Period, Mr. Y uan and Ms. Y uan Mei had been, individually or
jointly, providing personal guarantees as security for certain of our loans with commercial
banks. As of the Latest Practicable Date, all guarantees provided by Mr. Y uan and Ms. Y uan
on our bank loans were terminated.
Our Company will not have any outstanding loans, advances or balances due to or from
our Controlling Shareholders or their respective close associates upon Listing. We will not
have any share pledge or guarantee provided by or to our Controlling Shareholders and their
close associates on the borrowings of our Group and vice versa upon the Listing.
Accordingly, our Directors are of the view that our Group is capable of maintaining
financial independence from our Controlling Shareholders and their close associates.
CORPORATE GOVERNANCE MEASURES
Our Controlling Shareholders have confirmed that he has fully comprehended his
obligations to act for the benefit and in the best interests of our Shareholders as a whole. Our
Directors recognize the importance of good corporate governance in protecting our
Shareholders’ interests. We would adopt the following measures to safeguard good corporate
governance standards and to avoid potential conflict of interests between our Group and our
Controlling Shareholders:
(a) as part of our preparation for the Global Offering, we have amended our Articles of
Association to comply with the Listing Rules. In particular, our Articles of
Association provided that, unless otherwise provided, a Director shall not vote on
any resolution approving any contract or arrangement or any other proposal in which
such Director or any of his/her associates have a material interest nor shall such
Director be counted in the quorum present at the meeting;
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(b) we are committed that our Board should include a balanced composition with not
less than one-third of independent non-executive Directors to ensure that our Board
is able to effectively exercise independent judgment in its decision-making process
and provide independent advice to our Shareholders. We have appointed three
independent non-executive Directors and we believe our independent non-executive
Directors possess sufficient experience and they are free of any business or other
relationship which could interfere in any material manner with the exercise of their
independent judgment and will be able to provide an impartial, external opinion to
protect the interests of our public Shareholders. For details of our independent
non-executive Directors, see “Directors and Senior Management — Board of
Directors — Independent non-executive Directors” in this prospectus;
(c) we have established internal control mechanisms to identify conflict of interest and
connected transactions. A Director with material interests shall make full disclosure
in respect of matters that may have conflict or potentially conflict with any of our
interest and abstain from the board meetings on matters in which such Director or
his/her associates have a material interest, unless the attendance or participation of
such Director at such meeting of the Board is specifically requested by a majority
of the independent non-executive Directors. In the event that our independent
non-executive Directors are requested to review any conflicts of interests
circumstances between our Group and our Controlling Shareholders, our Controlling
Shareholders and/or our Company shall provide our independent non-executive
Directors with all necessary information and our Company shall disclose the
decisions of our independent non-executive Directors (including why business
opportunities referred to it by our Controlling Shareholders were not taken up) either
in its annual report or by way of announcements;
(d) we have appointed Quam Capital Limited as our compliance advisor, which will
provide advice and guidance to us in respect of compliance with the applicable laws
and the Listing Rules including various requirements relating to Directors’ duties
and corporate governance; and
(e) upon Listing, if our Company enters into connected transactions with our
Controlling Shareholders and their respective associates, our Company will comply
with the Listing Rules. In addition, as required by the Listing Rules, our independent
non-executive Directors shall review any continuing connected transaction annually
and confirm in our annual report that such transactions have been entered into in our
ordinary and usual course of business, are either on normal commercial terms or on
terms no less favorable to us than those available to or from independent third
parties and on terms that are fair and reasonable and in the interests of our
Shareholders as a whole.
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BOARD OF DIRECTORS
Our Board currently consist of six Directors, including three executive Directors and
three independent non-executive Directors . The powers and duties of our Board include
determining our business and investment plans, preparing our annual financial budgets and
final reports, formulating proposals for profit distributions and exercising other powers,
functions and duties as conferred by the Articles. We have entered into a service agreement
with each of our executive Directors and a letter of appointment with each of our independent
non-executive Directors.
The table below sets out the key information of our Directors and senior management:
Our Directors
Name Age
Existing position(s)
in our Group
Date of
joining our
Group
Date of
appointment
as Director
Roles and key
responsibilities in
our Group
Relationship
with other
Directors and
senior
management
Executive Directors
Mr. Y uan Rong
(঺࿲) /H1118/H1118/H1118/H1118
41 Executive Director,
chairman of our
Board, chief
executive officer
and general
manager of our
Company
January 21,
2010
March 10,
2011
Responsible for
providing
guidance and the
formulation of
business strategies
for the overall
management and
business operation
and development
of our Group
Brother of
Ms. Y uan
Ms. Y uan Mei
(঺ૠ) /H1118/H1118/H1118/H1118
40 Executive Director
and secretary of
the Board
February 25,
2016
June 28, 2016 Responsible for the
overall
supervision and
management of
corporate
governance and
company
secretarial matters
of our Group
Sister of
Mr. Y uan
DIRECTORS AND SENIOR MANAGEMENT
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Name Age
Existing position(s)
in our Group
Date of
joining our
Group
Date of
appointment
as Director
Roles and key
responsibilities in
our Group
Relationship
with other
Directors and
senior
management
Mr. Y ang
Y ongchang
(׹)H1118/H1118/H1118
48 Executive Director
and chief financial
officer
November 6,
2016
July 19, 2019 Responsible for the
overall
supervision and
management of
financial and
accounting affairs
of our Group
None
Independent non-executive Directors
Ms. Zheng
Dongyu
(ቍ̆ಽ) /H1118/H1118/H1118
68 Independent non-
executive Director
January 14,
2023
January 14,
2023
Responsible for
providing
independent
advice to our
Board
None
Mr. Xia
Hongying
(Ꮠ) /H1118/H1118/H1118
44 Independent non-
executive Director
January 14,
2023
January 14,
2023
Responsible for
providing
independent
advice to our
Board
None
Mr. Wong Hok
Bun Mario
(රኪⅳ) /H1118/H1118/H1118
46 Independent non-
executive Director
May 16,
2025
May 16, 2025 Responsible for
providing
independent
advice to our
Board
None
Executive Directors
Mr. Yuan Rong ( ঺࿲), aged 41, was appointed as our Director on March 10, 2011 and
was re-designated as our executive Director and chief executive officer on May 16, 2025. He
is primarily responsible for providing guidance and the formulation of business strategies for
the overall management and business operation and development of our Group.
Mr. Y uan has over 15 years of experience in the industry of non-ferrous metals. Mr. Y uan
founded our Company on January 21, 2010 and has been serving as our general manager and
Director since March 2011. He has been serving as our chief executive officer and chairman
of the Board since June 2016. Since December 2018, Mr. Y uan has been serving as the
executive director of Shanghai Yisimai Industrial Co., Ltd (ʮ̡), a
company primarily engaged in business consulting services, where he was responsible for
formulating the company’s business strategies and investment plans.
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Mr. Y uan graduated from Kunming University of Science and Technology (ଣʈɽኪ)
in the PRC with a diploma in economic management in July 2009. He also obtained his
bachelor of laws from Y unnan University (ɽኪ) in the PRC in January 2014 and his
executive master of business administration in finance from Cheung Kong Graduate School of
Business (Ϫਠኪ৫) in the PRC in September 2016.
In addition, Mr. Y uan was honoured as an Outstanding Entrepreneur of Kunming
High-tech Zone (࢕in September 2019 and received the Top Ten
Influential Businessmen Award (ᆤ) in December 2019. He was also
awarded the Y unnan Y outh Entrepreneurship Governor Award (ᆤ)i n
January 2020 and the China Y outh May Fourth Medal (ϋʞ̬ᆤ௝) in April 2023.
Mr. Y uan was a supervisor of the following company which was established in the PRC
prior to its deregistration:
Name of the relevant
company Principal business activity
Status of
company
Reason for
dissolution
Date of
dissolution
Yifeng County Huijin
Trading Co., Ltd. (ᔮ
ʮ̡) /H1118/H1118
Trading in the PRC V oluntarily
deregistered
Not in operation March 4, 2014
Mr. Y uan confirmed that, to the best of his knowledge, (i) the deregistered company above
was solvent immediately prior to its deregistration and had no outstanding claim or liabilities
arising from any material non-compliance incidents; (ii) he has not received any notification
in respect of penalty, action or proceeding from the PRC authorities as a result of the
deregistration; and (iii) he is not aware of any actual or potential claim which has been or will
be made against him as a result of the deregistration.
Ms. Yuan Mei ( ঺ૠ), aged 40, was appointed as our Director and secretary of the Board
on June 28, 2016 and was re-designated as our executive Director on May 16, 2025. Ms. Y uan
joined our Group on February 25, 2016 as the assistant to general manager. She is primarily
responsible for the overall supervision and management of corporate governance and company
secretarial matters of our Group.
Ms. Y uan has over 15 years of experience in the finance and operations. From August
2010 to January 2016, Ms. Y uan held various positions in the group of Y unnanyun Copper and
Zinc Industry Co., Ltd (ʮ̡), a company primarily engaged in
production, processing and sales of zinc and other non-ferrous metals and rare and precious
metals, with her last position as a production operation officer. Since February 2017, Ms. Y uan
has been serving as the director, general manager and financial controller of Tibet Huiyi, where
she is responsible for overall management and execution of the company. Since October 8,
2022, Ms. Y uan has been serving as supervisor of Jinxun Anhui, where she is responsible for
supervising and providing advice to the board of the company’s director.
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Ms. Y uan obtained her bachelor’s degree in communications engineering from Jiangxi
Normal University (ᇍɽኪ) in the PRC in July 2009.
Ms. Y uan was a director of the following company which was established in the PRC prior
to its deregistration:
Name of the relevant
company Principal business activity
Status of
company
Reason for
dissolution
Date of
dissolution
Y unnan Jiu Duo Science
and Technology Ltd ( ථ
ʮ̡) /H1118/H1118
R&D and technical services
for electronic products;
domestic trade, supply
and marketing of
materials; import and
export of goods and
technology
V oluntarily
deregistered
Not in operation February 21,
2024
Ms. Y uan confirmed that, to the best of her knowledge, (i) the deregistered company
above was solvent immediately prior to its deregistration and had no outstanding claim or
liabilities arising from any material non-compliance incidents; (ii) she has not received any
notification in respect of penalty, action or proceeding from the PRC authorities as a result of
the deregistration; and (iii) she is not aware of any actual or potential claim which has been
or will be made against her as a result of the deregistration.
Mr. Y ang Y ongchang (׹)aged 48, was appointed as our Director on July 19, 2019
and was re-designated as our executive Director on May 16, 2025. Mr. Y ang joined our Group
on November 6, 2016 as the treasurer and has been serving as our chief financial officer since
August 2019. He is primarily responsible for the overall supervision and management of
financial and accounting affairs of our Group.
Mr. Y ang has over 25 years of experience in finance. Prior to joining our Group, Mr. Y ang
worked in Y unnan Green A Biology Engineering Co., Ltd. (ၠAʮ̡), a
company primarily engaged in production and sales of health food and Y unnan Lvwei
Biotechnology Co., Ltd (ʮ̡), a company primarily engaged in
biotechnology research and development.
Mr. Y ang obtained his bachelor of economics with a major in accounting from Xi’an
Technological University ( Гτʈุɽኪ) in the PRC in July 2001. He was accredited as a
senior accountant by the Human Resources and Social Security of Y unnan Province (ɛ
ღᝂ ) in July 2023.
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Independent non-executive Directors
Ms. Zheng Dongyu ( ቍ̆ಽ), aged 68, was appointed as our independent Director on
January 14, 2023. Ms. Zheng joined our Group on January 14, 2023 and is primarily
responsible for providing independent opinion and judgment to our Board.
Ms. Zheng has decades of experience in the legal industry. From 1984 to 2012, Ms. Zheng
held various academic positions at the Law School of Y unnan University (ኪ৫),
with her last academic position as a professor prior to her retirement. Ms. Zheng has been
serving as independent director of Kunming Y unnei Power Co., Ltd. (ࠢ
ʮ̡), a company listed on the Shenzhen Stock Exchange (Stock code: 000903) and primarily
engaged in special and general equipment manufacturing, since October 2022 and Kunming
Automation Group Co., Ltd. (ʮ̡), a company primarily
engaged in providing integrated energy system services, shares of which are quoted on the
NEEQ (Stock code: 832848), since December 2020 and an independent non-executive director
of Kunming Dianchi Water Treatment Co., Ltd. (ʮ̡), a wastewater
treatment company, shares of which are listed on the Stock Exchange (Stock code: 3768), since
June 2021, where she was responsible for supervising and providing independent advice to the
board of the company.
Ms. Zheng obtained her bachelor of laws from Southwest University of Political Science
and Law (ɽኪ) in the PRC in July 1984. She obtained her master of laws from Peking
University ( ̏ԯɽኪ) in the PRC in July 2000.
Mr. Xia Hongying (Ꮠ), aged 44, was appointed as our independent Director on
January 14, 2023. Mr. Xia joined our Group on January 14, 2023 and is primarily responsible
for providing independent opinion and judgment to our Board.
Mr. Xia has over 16 years of experience in the industry of non-ferrous metals. Since
November 2009, Mr. Xia has been successively serving as a lecturer, associate professor,
professor and masters and doctoral advisor at the School of Metallurgical and Energy
Engineering of Kunming University of Science and Technology (ၾঐ๕ʈ
೻ኪ৫), where he was engaged in lecturing, academic research and the supervision of masters
and doctoral students. From April 2022 to October 2025, Mr. Xia has been serving as an
independent director of Y unnan Luoping Zinc & Electricity Co., Ltd. (ࠢ
ʮ̡), a company listed on the Shenzhen Stock Exchange (stock code: 002114) and primarily
engaged in hydropower generation, non-ferrous metal mining and zinc smelting, where he was
responsible for supervising and providing independent advice to the board of the company.
Mr. Xia obtained his bachelor’s degree in metallurgical engineering in July 2003, his
master’s degree in non-ferrous metal metallurgy in May 2006 and his doctor’s degree in
non-ferrous metal metallurgy from Kunming University of Science and Technology (ଣʈ
ɽኪ) in the PRC in April 2010.
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Mr. Wong Hok Bun Mario ( රኪⅳ), aged 46, was appointed as our independent
non-executive Director on May 16, 2025. Mr. Wong is primarily responsible for providing
independent opinion and judgment to our Board.
Mr. Wong has over 20 years of experience in auditing, accounting and financial
management. From 2018 to 2023, Mr. Wong has served as the chief financial officer and
company secretary of Jinchuan Group International Resources Company Limited (ʇණྠ਷
ʮ̡), a company listed on the Main Board of the Stock Exchange (stock code:
2362) and principally engaged in mining operations. From May 2017 to May 2022, Mr. Wong
has served as an independent non-executive director of Good Resources Holdings Limited ( ˂
ʮ̡), a company previously listed on the Main Board of the Stock
Exchange (stock code: 0109) and principally engaged in the provision of financial and optical
fibre leasing services. Mr. Wong has been serving as the chief financial officer since July 2023
and the vice president since September 2023 at Chifeng Jilong Gold Mining Co., Ltd. (Λ
ʮ̡), a company listed on the Hong Kong Stock Exchange (stock code:
6693) and Shanghai Stock Exchange (stock code: 600988) and principally engaged in the
mining, processing, and sales of gold. Since December 2024, Mr. Wong has been serving as an
independent non-executive director of Theme International Holdings Limited ( ࿲ฯ਷ყණྠϞ
ʮ̡), a company listed on the Main Board of the Stock Exchange (stock code: 990) and
principally engaged in distribution, trading and processing of metal products, where he was
responsible for supervising and providing independent advice to the board of the company.
Mr. Wong obtained his bachelor’s degree in economics and finance in November 2001
from the University of Hong Kong (ಥɽኪ) in Hong Kong. He was accredited as a certified
public accountant by the Hong Kong Institute of Certified Public Accountants in July 2005, a
chartered financial analyst by the Chartered Financial Analyst Institute in December 2008 and
a member by The Australasian Institute of Mining and Metallurgy in May 2015.
Save as disclosed above, each of our Directors has confirmed that he/she has no other
relationship with any other Directors, senior management, substantial shareholders or
Controlling Shareholders of our Company as of the Latest Practicable Date. Save as disclosed
in this prospectus, none of our Directors has held any other directorships in listed companies
during the three years immediately preceding the date of this prospectus.
Save as disclosed herein, to the best knowledge, information and belief of our Directors
having made all reasonable enquiries, there was no other matters relating to his/her
appointment as our Directors that need to be brought to the attention of our Shareholders and
there is no other information in relation to our Directors which is required to be disclosed
pursuant to Rule 13.51(2) of the Listing Rules.
Each of our Directors has confirmed that he/she (i) obtained the legal advice on May 16,
2025 with regards to the requirements under the Listing Rules that are applicable to him/her
as a director of a listed issuer and the possible consequences of making a false declaration or
giving false information to the Stock Exchange as set out in Rule 3.09D of the Listing Rules
and he/she understood his/her obligations as a director of a listed issuer.
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Each of the independent non-executive Directors has confirmed his/her independence
with regards to each of the factors as set out in Rules 3.13(1) to (8) of the Listing Rules and
that there are no other factors that may affect his/her independence at the time of his/her
appointment.
SENIOR MANAGEMENT
Our executive Directors also act as our senior management responsible for the day-to-day
operations and management of the business of our Group.
For the biographical details of Mr. Y uan, Ms. Y uan and Mr. Y ang, see “— Board of
Directors — Executive Directors.”
COMPANY SECRETARY
Ms. Wan Wing Yi Carol (֝)is the company secretary of our Company. Ms. Wan
is a manager of SWCS Corporate Services Group (Hong Kong) Limited and has over 11 years
of experience in corporate secretarial industry. Ms. Wan is an associate member of both The
Hong Kong Chartered Governance Institute and The Chartered Governance Institute in the
United Kingdom.
Ms. Wan obtained her bachelor of science degree from the University of London in
August 2011 in the United Kingdom. She also obtained her master of corporate governance
degree from the Open University of Hong Kong (ಥʮකɽኪ) (currently known as The Hong
Kong Metropolitan University (ಥேึɽኪ)) in Hong Kong in August 2017.
BOARD COMMITTEES
We have established the Audit Committee, the Remuneration and Appraisal Committee,
the Nomination Committee and the Strategy Committee and has delegated various
responsibilities to these committees, which assist our Board in discharging its duties and
overseeing particular aspects of our Group’s activities.
Audit Committee
We have established the Audit Committee pursuant to Rule 3.21 of the Listing Rules with
written terms of reference in compliance with paragraph D.3 of Part 2 of the Corporate
Governance Code (the “ CG Code ”) as set out in Appendix C1 to the Listing Rules. The Audit
Committee consists of three members, namely Mr. Wong Hok Bun Mario, Ms. Zheng Dongyu
and Mr. Xia Hongying. The chairman of our Audit Committee is Mr. Wong Hok Bun Mario,
who is an independent non-executive Director of our Company and has the appropriate
professional qualifications or related financial management expertise as required under Rule
3.10(2) of the Listing Rules.
DIRECTORS AND SENIOR MANAGEMENT
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The primary duties of the Audit Committee include, but not limited to, (i) reviewing and
monitoring the external auditors’ audit process and giving guidance to our internal audit work;
(ii) making recommendations to our Board on the appointment, reappointment and removal of
the external auditor; (iii) overseeing the effectiveness of our financial reporting system, risk
management and internal control systems; (iv) reviewing and providing advice and comments
on our financial reports; (v) coordination among our management team, internal audit
department and related departments and external auditors; (vi) performing our corporate
governance functions; and (vii) performing other duties and responsibilities as assigned by our
Board and/or required by the relevant laws and regulations.
Remuneration and Appraisal Committee
We have established the Remuneration and Appraisal Committee pursuant to Rule 3.25 of
the Listing Rules with written terms of reference in compliance with paragraph E.1 of Part 2
of the CG Code. The Remuneration and Appraisal Committee consists of three members,
namely Ms. Zheng Dongyu, Mr. Xia Hongying and Ms. Y uan Mei. Ms. Zheng Dongyu is the
chairman of the Remuneration and Appraisal Committee.
The primary duties of the Remuneration and Appraisal Committee include, but not limited
to (i) establishing, reviewing and providing advices to our Board on our policy and structure
concerning remuneration of our Directors and senior management and on the establishment of
a formal and transparent procedure for developing policies concerning such remuneration; (ii)
determining the terms of the specific remuneration package of each Director and senior
management; (iii) reviewing and approving performance-based remuneration by reference to
corporate goals and objectives resolved by our Directors from time-to-time; and (iv) reviewing
and/or approving matters relating to share schemes under chapter 17 of the Listing Rules.
Nomination Committee
We have established the Nomination Committee pursuant to Rule 3.27A of the Listing
Rules with written terms of reference in compliance with paragraph B.3 of Part 2 of the CG
Code. The Nomination Committee consists of three members, namely Mr. Y uan Rong, Ms.
Zheng Dongyu and Mr. Wong Hok Bun Mario. Ms. Zheng Dongyu is the chairman of the
Nomination Committee.
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The primary duties of the Nomination Committee include, but not limited to (i) reviewing
the structure, size and composition of our Board on a regular basis and make recommendations
to our Board regarding any proposed changes to the composition of our Board; (ii) identifying,
selecting or making recommendations to our Board on the selection of individuals nominated
for directorship, and ensure the diversity of our Board members; (iii) assessing the
independence of our independent non-executive Directors; and (iv) making recommendations
to our Board on relevant matters relating to the appointment, re-appointment and removal of
our Directors and succession planning for our Directors.
Strategy Committee
We have established a Strategy Committee with written terms of reference. The Strategy
Committee consists of three members, namely Mr. Y uan Rong, Ms. Y uan Mei and Mr. Xia
Hongying. The chairman of the Strategy Committee is Mr. Y uan Rong.
The primary duties of the Strategy Committee include, but are not limited to (i) reviewing
and commenting on the overall development and strategy planning of our Company and
advising the Board on related matters; (ii) reviewing and commenting on the operational,
investment, financing plans and advising the Board on related matters; and (iii) supervising the
implementation of the plans and the corporate government matters and advising the Board.
BOARD DIVERSITY POLICY
Our Board has adopted a board diversity policy which sets out the approach to achieve
and maintain diversity on our Board. Our Company recognizes and embraces the benefits of
having a diverse Board and sees increasing diversity at our Board level as an essential element
in supporting the attainment of our Company’s strategic objectives and sustainable
development. Our Company seeks to achieve Board diversity through the consideration of a
number of factors, including but not limited to talent, skills, gender, age, cultural and
educational background, ethnicity, professional experience, independence, knowledge. We will
select potential Board candidates based on merit and his/her potential contribution to our Board
while taking into account our board diversity policy and other factors. We will also take into
account our own business model and specific needs from time-to-time. All Board appointments
will be based on meritocracy and candidates will be considered against objective criteria,
having due regard to the benefits of diversity on our Board.
Our Board has a balanced mix of genders, knowledge, skills and experience. Members of
our board have obtained degrees in various majors including business administration,
communication engineering, metallurgical engineering, accounting and law. We have three
independent non-executive Directors from different industry backgrounds, including financial
management and accounting, non-ferrous metals, law and economics and finance. Furthermore,
our Directors are of a wide range of age, from 40 years old to 68 years old.
DIRECTORS AND SENIOR MANAGEMENT
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With regards to gender diversity on our Board, we recognize the particular importance of
gender diversity. Our Board currently comprises two female Directors and four male Directors.
We have taken and will continue to take steps to promote and enhance gender diversity at all
levels of our Company. Our board diversity policy provides that our Board should aim to
increase the proportion of female members over time after Listing where possible when
selecting and making recommendations on suitable candidates for Board appointments. We will
also ensure that there is gender diversity when recruiting staff at mid to senior level so that we
will have a pipeline of female senior management and potential successors to our Board going
forward. It is our objective to maintain an appropriate balance of gender diversity with
reference to the expectations of stakeholders and international and local recommended best
practices.
Our Nomination Committee is responsible for ensuring the diversity of our Board
members. After Listing, our Nomination Committee will review our board diversity policy and
its implementation from time to time to monitor its continued effectiveness and we will
disclose the implementation of our board diversity policy, including any measurable objectives
and the progress on achieving these objectives in our corporate governance report on an annual
basis.
CORPORATE GOVERNANCE
Our Company recognizes the importance of incorporating elements of good corporate
governance in our management structure and internal control procedures so as to achieve
effective accountability. We have adopted the code provisions stated in the CG Code. We are
committed to the view that our Board should include a balanced composition of executive
Directors and independent non-executive Directors so that there is a strong independent
element on our Board that can effectively exercise independent judgment.
According to code provision C.2.1 of Part 2 of the CG Code, the roles of chairman and
chief executive should be separate and should not be performed by the same individual. Mr.
Y uan is currently the chairman of our Board and the chief executive officer of our Company.
In view of the fact that Mr. Y uan is our founder and has been assuming the responsibilities in
the overall management and operation and formulation of business strategies of our Group
since 2011, our Board believes that it is in the best interest of our Group to have Mr. Y uan
taking up both roles for effective management and operations. Therefore, our Directors
consider that the deviation from such code provision is appropriate. Notwithstanding such
deviation, our Directors are of the view that our Board is able to work efficiently and perform
its responsibilities with all key and appropriate issues discussed in a timely manner. In
addition, as all major decisions will be made in consultation with members of our Board and
the relevant committees of the Board, and there are three independent non-executive Directors
on our Board offering independent perspective, our Board is therefore of the view that there
are adequate safeguards in place to ensure sufficient balance of powers within our Board. Our
Board shall nevertheless review the structure and composition of our Board and senior
management from time to time in light of prevailing circumstances to maintain a high standard
of corporate governance practices of our Company.
DIRECTORS AND SENIOR MANAGEMENT
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Our Company strives to achieve the high standards of corporate governance and will
comply with the CG Code. Our Directors will review our corporate governance policies and
compliance with the CG Code each financial year.
COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT
Our Directors and senior management receive compensation from our Group in the form
of salaries allowances, benefit in kind, discretionary bonuses and retirement scheme
contributions.
The remuneration (including salaries, allowances, benefits in kind, discretionary bonuses,
retirement scheme contributions) recorded for our Directors and senior management in respect
of the three years ended December 31, 2024 and the six months ended June 30, 2025 was
approximately RMB1.63 million, RMB1.95 million, RMB2.05 million and RMB1.11 million,
respectively. Save as disclosed above, no other amounts have been paid or are payable by any
member of our Group to our Directors and senior management for each of the three years ended
December 31, 2024 and the six months ended June 30, 2025.
The aggregate amount of salaries, allowances, benefits in kind, discretionary bonuses,
retirement scheme contributions recorded for our Company’s five highest paid individuals in
respect of the three years ended December 31, 2024 and the six months ended June 30, 2025
was approximately RMB4.17 million, RMB5.16 million, RMB5.24 million and RMB2.8
million, respectively.
No remuneration was paid by our Company to, or receivable by our Directors and senior
management or the five highest paid individuals as an inducement to join or upon joining our
Company or as a compensation for loss of office in respect of the three years ended December
31, 2024 and the six months ended June 30, 2025.
Further, none of our Directors or senior management had waived or agreed to waive any
remuneration during the Track Record Period. Under the arrangement currently in force, the
aggregate remuneration (including salaries, allowances, benefits in kind, discretionary
bonuses, retirement scheme contributions) of our Directors and senior management for the year
ending December 31, 2025 is estimated to be no more than approximately RMB2.42 million.
Our Board will review and determine the remuneration and compensation packages of our
Directors and senior management and will, following the Listing, receive recommendation
from the Remuneration Committee which will take into account salaries paid by comparable
companies, time commitment and responsibilities of our Directors and senior management and
performance of our Group.
DIRECTORS AND SENIOR MANAGEMENT
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COMPLIANCE ADVISOR
We have appointed Quam Capital Limited as our compliance advisor pursuant to Rule
3A.19 of the Listing Rules. Pursuant to Rule 3A.23 of the Listing Rules, our compliance
advisor will advise our Company in the following circumstances:
 before the publication of any regulatory announcement, circular and financial
report;
 where a transaction, which might be notifiable or connected transaction, is
contemplated including shares issues, sales or transfers of treasury shares and share
repurchases;
 where our Company proposes to use the proceeds from the Global Offering in a
manner different from that detailed in this prospectus or where our business
activities, developments or results deviate from any forecast, estimate or other
information in this prospectus; and
 where the Stock Exchange makes an inquiry of our Company regarding unusual
movements in the price or trading volume of our Shares.
The term of the appointment shall commence on the Listing Date and end on the date on
which our Company distribute our annual report in respect of our financial results for the first
full financial year commencing after the Listing Date.
DIRECTORS AND SENIOR MANAGEMENT
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As of the Latest Practicable Date, the registered share capital of our Company was
RMB110,296,643 divided into 110,296,643 Shares, with a nominal value of RMB1.00 each.
Immediately after the completion of the Global Offering, the share capital of our
Company will be as follows:
Number of Shares Description of Shares
Approximate
percentage of
total issued
share capital
110,296,643 Non-H Shares 75%
36,765,600 H Shares to be issued under the Global Offering 25%
147,062,243 Total 100%
The above table assumes that the Global Offering has become unconditional and the H
Shares are issued pursuant to the Global Offering (without taking into account any Shares
which may be issued pursuant to the exercise of the Over-allotment Option).
RANKINGS
Upon the completion of the Global Offering, our Shares will consist of Non-H Shares and
H Shares, both of which are ordinary Shares in the share capital of our Company and are
regarded as the same class of Shares.
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 Shares generally
cannot be subscribed by or traded between legal or natural PRC persons.
Non-H Shares and H Shares shall carry the same rights in all other respects and, in
particular, will rank equally for dividends or distributions declared, paid or made. All dividend
for H Shares will be denominated and declared in Renminbi, and paid in Hong Kong dollars
or Renminbi, whereas all dividends for Non-H Shares will be paid in Renminbi. Other than
cash, dividends could also be paid in the form of shares or a combination of cash and shares.
CIRCUMSTANCES UNDER WHICH GENERAL MEETING AND CLASS MEETING
ARE REQUIRED
Our Company will have only one class of Shares upon completion of the Global Offering,
namely ordinary shares, and each carries the same rights as with the other Shares.
For details of circumstances under which our general meetings are required, see
“Appendix V — Summary of Articles of Association” to this prospectus.
SHARE CAPITAL
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TRANSFER OF SHARES ISSUED PRIOR TO THE LISTING DATE
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 Global Offering shall be subject to
such statutory restriction and not be transferred within a period of one year from the Listing
Date.
For details of the lock-up undertaking given by our Controlling Shareholders to the Stock
Exchange, see “Underwriting — Underwriting Arrangements and Expenses — Undertakings
pursuant to the Listing Rules and the Hong Kong Underwriting Agreement — Undertakings by
our Controlling Shareholders” in this prospectus.
SHAREHOLDERS’ APPROV AL FOR THE GLOBAL OFFERING
Approval from holders of the Shares is required for the Company to issue H Shares and
seek the listing of H Shares on the Stock Exchange. The Company has obtained such approval
at the Shareholders’ meeting held on May 16, 2025.
SHARE CAPITAL
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So far as our Directors are aware, the following persons will, immediately prior to and
following the completion of the Global Offering (without taking into account any H Shares
which may be issued pursuant to the exercise of the Over-allotment Option), have interests
and/or short positions in our Shares or underlying Shares, which would be required to be
disclosed to us 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 nominal the issued voting shares of our
Company.
Name of
Shareholder Nature of interest
Shares held as of the date of this
prospectus and immediately prior
to the completion of the
Global Offering (1)
Shares held immediately
following the completion of the
Global Offering (1)
Type of
Shares (2)
Number of
Shares
Percentage of
shareholding
in the total
issued Shares
Number of
Shares
Percentage of
shareholding
in the total
issued Shares
(Approx. %) (Approx. %)
Mr. Y uan(3) /H1118/H1118/H1118/H1118/H1118Beneficial owner Non-H Shares 101,230,612 (L) 91.78% 101,230,612 (L) 68.84%
Interest in a
controlled
corporation
Non-H Shares 8,973,467 (L) 8.14% 8,973,467 (L) 6.10%
Heli Investment
(3) /H1118/H1118Beneficial owner Non-H Shares 8,973,467 (L) 8.14% 8,973,467 (L) 6.10%
Notes:
(1) The letter “L” denotes the person’s long position in our Shares.
(2) Non-H Shares and H Shares are regarded as two different types of Shares. For the avoidance of doubt, both
Non-H Shares and H Shares are ordinary Shares in the share capital of our Company, and are considered as
one class of Shares.
(3) Heli Investment (our share incentive platform) is owned as to 10% by its general partner, Mr. Y uan, who
manages its daily affairs and exercises the voting rights on behalf of Heli Investment as our Shareholder. Heli
Investment has 19 limited partners, including Ms. Y uan Mei, our executive Director and Mr. Y uan’s sister, who
owns approximately 69.32%, Mr. Y ang Y ongchang, our executive Director, who owns approximately 4.02%,
Mr. Chen Weijun, a director of Jinxun Anhui, who owns approximately 0.23% and 15 existing employees and
one former employee who collectively owns approximately 16.43% as of the Latest Practicable Date. For the
purpose of the SFO, Mr. Y uan is deemed to be interested in the interest held by Heli Investment.
If the Over-allotment Option is fully exercised, the beneficial interest of each of Mr. Y uan
and Heli Investment in our H Shares will be approximately 66.35%, 5.88% and 5.88%,
respectively.
SUBSTANTIAL SHAREHOLDERS
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Save as disclosed in this section above and in the paragraph headed “Appendix VI —
Statutory and General Information — C. Further Information about Our Directors and
Substantial Shareholders — 1(a). Disclosure of Interests” to this prospectus, our Directors are
not aware of any person who will, immediately prior to and following the completion of the
Global Offering (without taking into account any H Shares which may be issued pursuant to
the exercise of the Over-allotment Option), have beneficial interests and/or short positions in
any Shares or underlying Shares, which would be required to be disclosed to our Company and
the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who
is, directly or indirectly interested in 10% or more nominal value of any type of our issued
voting shares of our Company. Our Directors are not aware of any arrangement which may at
a subsequent date result in a change of control of our Company.
SUBSTANTIAL SHAREHOLDERS
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You should read the following discussion and analysis in conjunction with our
audited historical consolidated financial information as of and for the years ended
December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025 included in
the Accountants’ Report set out in Appendix I to this prospectus, together with the
accompanying notes. Our consolidated financial information has been prepared in
accordance with IFRS Accounting Standards.
The following discussion and analysis contain forward-looking statements that
reflect our current views with respect to future events and financial performance that
involve risks and uncertainties. These statements are based on assumptions and analysis
made by us in light of our experience and perception of historical events, current
conditions and expected future developments, as well as other factors we believe are
appropriate under the circumstances. In evaluating our business, you should carefully
consider the information provided in the section headed “Risk Factors” in this
prospectus.
OVERVIEW
We are a leading manufacturer of high-quality copper cathodes, with a strong presence in
DR Congo and Zambia. According to Frost & Sullivan, as of December 31, 2024, we ranked
fifth among PRC copper cathode producers by production volume in both DR Congo and
Zambia, and were the only PRC company to rank among the top five in both jurisdictions.
Specifically, we produced approximately 16.0 thousand tons and 5.0 thousand tons of copper
cathodes in DR Congo and Zambia in 2024. Among PRC non-state-owned enterprises, we
ranked third in DR Congo with a market share of 0.9% and first in Zambia with a market share
of 0.8% in terms of production volume in 2024. We have achieved: (i) a year-over-year revenue
growth rate of 161.9% and a return on equity of 43.8% in 2024; and (ii) our gross profit margin
reached 20.8% in the same year. These rankings and achievements underscore our strong
operational capabilities, cost competitiveness, and growing international influence, particularly
among PRC producers expanding into resource-rich African markets. In anticipation of future
rise in the copper demand as a result of the proliferation of electric vehicles, energy storage
systems and consumer electronics, the rise of AI and other emerging technologies which
demand copper, we are significantly expanding our production capacity to capitalize on market
demands.
Our main products are copper cathodes and copper concentrates. We also trade
non-ferrous metal products procured from suppliers to other metal trading companies and
non-ferrous metal producers. In the six months of June 30, 2025, we produced a total of
12,496.2 tons of copper cathodes, 9.0 tons of copper concentrates and 171.0 tons of cobalt
hydroxide, respectively.
In 2022, 2023, 2024, and the six months ended June 30, 2024 and 2025, our revenue was
RMB637.3 million, RMB675.7 million, RMB1,769.8 million, RMB596.0 million and
RMB963.8 million, respectively. Our net profit amounted to RMB83.5 million, RMB29.1
million, RMB202.4 million, RMB93.1 million and RMB135.0 million in 2022, 2023, 2024 and
the six months ended June 30, 2024 and 2025, respectively.
FINANCIAL INFORMATION
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BASIS OF PRESENTATION
Our Company was established in the PRC as a limited liability company on January 21,
2010 and was converted into a joint stock limited liability company on July 15, 2016. The
shares of the Company was quoted on the NEEQ since February 2017 (Stock Code: 870844).
See “History and Corporate Structure.” Our historical financial information has been prepared
in accordance with all applicable IFRS Accounting Standards as issued by the IASB. All new
and revised IFRS Accounting Standards effective for the accounting period beginning on or
before January 1, 2024 have been applied consistently throughout the Track Record Period in
the preparation for the historical financial information. The historical financial information
also complies with the applicable disclosure provisions of the Listing Rules.
The historical financial information has been prepared under the historical cost basis,
except that (i) trade receivables and trade payables under provisional priced sales
arrangements; and (ii) derivative financial instruments are stated at their fair values. See Note
2 to the Accountants’ Report in Appendix I to this prospectus for details.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
We believe our results of operations and financial condition are mainly affected by the
following factors:
Copper Prices and Market Demands
We price our copper products based on quotation listed on the London Metal Exchange,
the Shanghai Futures Exchange, the Shanghai Metals Market and the Shanghai Gold Exchange,
as well as the grade of our products. Over the past few years, the global copper prices have
shown a steady upward trend due to the strong and growing demand for copper driven by the
rapid development of clean energy infrastructure, electric vehicles and digital technologies.
According to Frost & Sullivan, the copper price quoted on the London Metal Exchange
increased from RMB42,600 per tonne in 2020 to RMB66,500 per tonne in 2024 at a CAGR of
11.8%.
Our revenue also tends to fluctuate with the demand for our copper products from the end
markets. Our copper products are widely used in the global industrial landscape, including the
infrastructure, consumer electronics, construction, transport, and new energy sectors.
Accordingly, demand for our copper products is indirectly affected by the growth and
fluctuations of these end markets. which in turn depends upon, among others, the state of the
global economy. According to Frost & Sullivan, the global copper cathode consumption
increased from 22.5 million tons in 2020 to 27.0 million tons in 2024 at a CAGR of 4.7% and
is expected to increase to 30.5 million tons in 2029 at a CAGR of 2.5%. We expect that the
economic growth globally will continue to drive the demand for our copper products.
FINANCIAL INFORMATION
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Our Production Capacity
Growth in our revenue and market share depends to a large extent on our ability to
manage and expand our production capacity. As of the Latest Practicable Date, save for the
cobalt processing plant under construction in China, we own four production facilities,
including two copper smelters and one copper concentrate flotation plant in Zambia, and one
copper smelter in DR Congo. Currently, we are improving or expanding the copper cathode
production lines in Zambia and DR Congo. We believe our improvement or expansion projects
will help us extend product lines to both upstream and downstream of the copper and cobalt
industries and further enlarge our revenue base. We may also invest in additional improvement
or expansion projects as we continue to grow our market share and income. See “Business —
Production — Production Expansion Plan” for details.
Our Ability to Control Cost of Sales and Operating Expenses
Our competitiveness and long-term profitability are dependent upon our ability to control
our cost of sales and operating expenses.
In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, our costs of
trading goods, raw materials and other materials and consumables in aggregate constituted
93.7%, 85.9%, 81.4%, 78.0% and 77.5% of our total cost of sales, respectively. The primary
raw materials for copper cathodes and copper concentrates are copper ores, including oxide
ores, sulfide ores, and oxide-sulfide mixed ores. During the Track Record Period, we mainly
sourced copper ores from upstream suppliers in Zambia, DR Congo and Peru. Our raw
materials and trading goods are commodities that can be readily purchased, taking reference of
the quotes from the London Metal Exchange on public markets at all market prices, which
fluctuate from period to period during the Track Record Period. We take into account such
fluctuation in costs when pricing our products. We also engaged in hedging by using derivative
instruments to manage commodity price risks in connection with our trading business. Our
hedging activities are primarily conducted in the futures market with the aim to utilize the full
use of economic principles of the same trends in the futures and spot markets. By leveraging
the time gaps between futures contracts and spot operations to establish a hedging mechanism
to avoid and reduce any production and operational risks prompted by volatilities of
commodity prices or spot transactions. We have implemented strict measures to prohibit any
direct engagement in speculation or participating in arbitrage transactions. Due to the nature
of our business, we typically determine the prices in relation to our copper ore purchases and
copper product sales based on the prices quoted on the LME. During the Track Record Period,
our Directors assessed the risks with respect to the price fluctuations of copper ore and were
of the view that the copper prices would remain the upward trend in the medium- to long-term.
In addition, given the costs of procuring copper ore
(1) are well below the prevailing market
price of copper products, our Directors are of the view that the overall gross profit of our
copper products would remain relatively stable. Therefore, we did not implement any
Note:
(1) Costs of copper ore procurement are calculated by multiplying the ore volume (dry weight) by copper ore
grade, then multiplying by LME Cash Settlement Price, and finally multiplying by the procurement pricing
coefficient. Procurement pricing coefficients are varied from 16% to 60% among different metal grades.
Accordingly, our costs of copper ore procurement are well below the prevailing market price of copper
products.
FINANCIAL INFORMATION
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--- page 300 ---
systematic futures hedging mechanism to contain the copper price risks in connection with our
production activities and our futures hedging business is confined to non-ferrous metal futures
traded on domestic futures exchanges. Our trading team members have the power to exercise
discretionary judgments in deciding whether and when to perform hedging activities, in a
manner as prescribed by our internal guidance and subject to the approval and ongoing
monitoring by the futures business department. We have incurred a significant exchange loss
of RMB19.7 million in 2023, primarily because we could not identify any suitable
ZMW-denominated hedging instruments for the tax refund amounts included in the trade
receivables of Rong Xing Investments. More specifically, Zambia imposes a 16% V A T on ore
procurement. We paid this 16% V A T when procuring ore from suppliers, but the export of
copper cathode outside Zambia is exempt from V A T. Thus, we cannot offset the corresponding
V A T input tax with output tax. Under local tax regulations in Zambia, these input V A T amounts
are eligible for refunds from the Zambia Revenue Authority. However, since such refunds will
be paid in the local currency, i.e. ZMW, Rong Xing Investments consequently accumulated
receivables denominated in ZMW for the input V A T owed by the Zambia Revenue Authority.
As Rong Xing Investments’ functional currency is U.S. dollar, these ZMW-denominated input
V A T receivables are subject to foreign exchange risk. Given the lengthy processing cycle for
tax refund applications by the Zambia Revenue Authority (potentially lasting six months to one
year), these receivables were impacted by the fluctuations in ZMW-to-U.S. dollar exchange
rate, resulting in a significant exchange loss in 2023. To lower our exposure to foreign
exchange risks and prevent significant foreign exchange loss going forward, we have assigned
dedicated personnel to manage our V A T refund process in Zambia to expedite the tax refund
process and reduce the scale of the corresponding ZMW-denominated receivables. We will also
negotiate cross-tax credit offsets with the relevant tax authority in Zambia.
As we consume a substantial amount of electricity in all of our business lines, utilities
cost (mainly consisting of electricity cost) also accounts for a material portion of our cost of
sales. In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, our utilities cost
constituted 1.2%, 5.3%, 7.9%, 9.6% and 9.8% of our total cost of sales, respectively. As our
production capabilities increase and our business grows, our consumption of electricity is
expected to grow accordingly.
Our ability to maintain and improve our production efficiency also affects our
profitability and results of operations. We have taken several initiatives in recent years to
improve our production efficiency, including developing new production technologies,
installing advanced equipment and machinery, and optimizing the production processes and
techniques. Our ability to rapidly implement new technologies and improve manufacturing
processes allows us the flexibility to optimize the use of our production facilities. See
“Business — Research and Development” for details.
FINANCIAL INFORMATION
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--- page 301 ---
Foreign Currency Exchange Fluctuations
We are exposed to foreign currency risk when they conduct sales and purchase in currency
other than their functional currencies. Our subsidiaries use U.S. dollar or RMB as their
functional currencies. In addition, we have exchange rate exposures arising from foreign
currency borrowings.
During the Track Record Period, we had certain financial assets or liabilities,
intercompany receivables or payables, input V A T receivables and tax payables denominated in
U.S. dollar, RMB, SGD, ZMW, CDF and SOL, which exposed us to foreign currency risks. See
Note 31 in the Accountants’ Report set out in Appendix I to this prospectus for further details.
In view of the foreign currencies used in our operation, fluctuations in exchange rates
among U.S. dollar, RMB, ZMW, CDF and SOL can impact our financial performance. Our
Directors expect that U.S. dollar, RMB, ZMW, CDF and SOL will continue to be used in our
business in the foreseeable future. Therefore, foreign exchange rates fluctuations will continue
to affect our financial condition and results of operations.
IMPACT OF THE COVID-19 OUTBREAK
During the COVID-19 outbreak in 2022, we experienced approximately 10 days of
customs clearance delays. However, such delays did not affect customer payment schedules,
and all copper cathode customers fulfilled their payment obligations as stipulated in the
contracts. This was attributable to the adoption of the free carrier terms in our sales model,
under which the seller is responsible for transporting goods to the designated port and
completing export formalities; upon arrival at the designated port, the buyer assumes all related
costs and risks, such as logistics costs and detention risks. Under this model, customers are
required to prepay 95% of the provisional payment in the month of shipment, with the
remaining 5% settled after the quotation period concludes. There was also a logistics delay in
steel supply occurred during the construction of the DR Congo copper smelter I, which was
originally scheduled for dispatch in mid-May 2022, with an expected arrival at the construction
site for deployment in September 2022. Due to the impact of the COVID-19 outbreak, the
shipment was not formally exported until August 4, 2022, and ultimately arrived at the site in
April 2023, resulting in a delay of seven months. However, we promptly addressed the
situation by procuring temporary steel locally and flexibly adjusting the project schedule.
Thus, this incident did not cause significant adverse effects on the construction project.
Although global concerns over narrowing copper production from China have pushed up
the selling price of our copper products, the COVID-19 outbreak did not have a substantial
impact on our production and sales of copper products. For example, we produced 5,949.8 tons
and 7,368.1 tons of copper cathodes in 2022 and 2023, respectively, all of which were sold
promptly during the COVID-19 outbreak. Therefore, our Directors are of the view that
COVID-19 had no material adverse effect to business operations and financial performance
during the Track Record Period.
FINANCIAL INFORMATION
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--- page 302 ---
MATERIAL ACCOUNTING POLICIES AND ESTIMATES
We have identified certain accounting policies that are material 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. Our
management continually evaluates such estimates, assumptions and judgments based on past
experience and other factors, including industry practices and expectations of future events that
are deemed to be reasonable under the circumstances. There has not been any material
deviation with regard to the procedures and methods used by our management in making
accounting estimates or assumptions and actual results, and we have not made any material
changes to these estimates or assumptions during the Track Record Period. We do not expect
any material changes in these estimates and assumptions in the foreseeable future.
We set forth below those accounting policies that we believe are of critical importance to
us or involve the most significant estimates, assumptions and judgments used in the preparation
of our financial statements. Our material accounting policy information, estimates,
assumptions and judgments, which are important for understanding our financial condition and
results of operations, are set forth in Notes 2 and 3 to the Accountants’ Report in Appendix I
to this prospectus. We set forth below the accounting policies that we believe are the most
significant to our financial information.
Revenue Recognition
We recognize revenue when control of the goods is transferred based on the terms of the
sale contracts. In most cases, such control of goods is transferred upon delivery, when the
goods have been shipped at our premises. In some other cases, the control of goods is
transferred upon delivery at specific destination ports or plants.
We are the principal for our revenue transactions and recognize revenue on a gross basis,
including the sale of products that are sourced externally. In determining whether we act as a
principal or as an agent, we consider whether we obtain control of the products before they are
transferred to the customers. Control refers to our ability to direct the use of and obtain
substantially all of the remaining benefits from the products.
We sell copper products under provisional pricing arrangements where final grades of
copper, gold, silver and cobalt in copper products are agreed based on third-party examination
and final prices are set at a specified date based on market prices. We recognize revenue using
forward prices for the expected date of final settlement. The period between revenue
recognition and final settlement is within one to three months. The contractual cash flows of
trade receivable vary depending on the market price at the date of final settlement, and do not
represent solely payments of principal and interest on the principal amount outstanding.
Consequently, these trade receivables resulted from provisionally priced contracts are
measured at FVTPL.
FINANCIAL INFORMATION
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--- page 303 ---
Property, Plant and Equipment
We state our property, plant and equipment at cost, which includes capitalized borrowing
costs, less accumulated depreciation and any accumulated impairment losses. We recognize
depreciation so as to write off the cost of assets other than construction in progress less their
residual values over their estimated useful lives, using the straight-line method. The estimated
useful lives for the Track Record Period for property, plant and equipment (other than
construction in progress) are as follows:
Estimated useful lives
Building /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810-20 years
Machinery equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 years
Electronic, transportation equipment and others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-5 years
We review depreciation methods, useful lives and residual values at each reporting date
and adjusted if appropriate.
Inventories
We state our inventories at the lower of cost and net realizable value. We determine the
costs of inventories on the following bases:
– Purchased copper related materials and all other materials, including spare parts and
consumables, are valued on weighted average basis.
– Finished products are valued at raw material cost plus costs of conversion,
comprising labor costs and an attributable proportion of manufacturing overheads
based on normal levels of activity.
Net realizable value represents the estimated selling price less any estimated costs of
completion and the estimated costs necessary to make the sale. When inventories are sold, we
recognize the carrying amount of those inventories as cost of sales in the period in which the
related revenue is recognized.
FINANCIAL INFORMATION
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--- page 304 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
The following table sets forth selected consolidated statements of profit or loss and other
comprehensive income for the years/periods indicated:
Y ears ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118637,303 675,701 1,769,833 595,965 963,785
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(466,810) (545,558) (1,402,166) (450,312) (741,105)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170,493 130,143 367,667 145,653 222,680------ ------ ------ ------ ------
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,332 3,131 1,865 1,265 818
Other gains and losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,601) (35,255) (7,101) 15,237 11,555
Distribution and selling expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,498) (10,159) (11,626) (5,163) (6,252)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(44,206) (48,175) (81,173) (36,265) (59,552)
Profit from operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,520 39,685 269,632 120,727 169,249
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,811) (13,410) (26,870) (12,218) (8,045)
Share of losses of an associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,823) (252) – – –
Profit before taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,886 26,023 242,762 108,509 161,204
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,382) 3,123 (40,324) (15,425) (26,222)
Profit for the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883,504 29,146 202,438 93,084 134,982
Other comprehensive income for
the year/period
Item that are or may be reclassified
subsequently to profit or loss:
Exchange differences on translation of
financial statements of overseas
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,941 3,442 3,464 1,197 (1,550)
Other comprehensive income for
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,941 3,442 3,464 1,197 (1,550)------
------ ------ ------ ------
Total comprehensive income for
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,445 32,588 205,902 94,281 133,432
FINANCIAL INFORMATION
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Non-IFRS Measures
To supplement our consolidated statements of profit or loss and other comprehensive
income presented in accordance with IFRS Accounting Standards, we also use EBITDA
(non-IFRS measure), as additional financial measures, which are not required by, or presented
in accordance with IFRS Accounting Standards, we believe that the presentation of such
non-IFRS measure facilitate comparisons of the operating performance from period to period
and company to company by eliminating potential impacts of certain items. We believe that the
presentation of such non-IFRS measure when shown in conjunction with the corresponding
IFRS measure provides useful information to potential investors and management in
facilitating a comparison of our operating performance from period to period by eliminating
potential impacts of certain items.
However, the use of non-IFRS measures has limitations as an analytical tool, and you
should not consider them in isolation from, or as a substitute for analysis of, our results of
operations or financial conditions as reported under IFRS Accounting Standards. In addition,
the non-IFRS financial measures may be defined differently from similar terms used by other
companies.
We define EBITDA (non-IFRS measure), as profit for the year adjusted by adding back
items including income tax, finance costs, interest income and depreciation and amortization.
The following table reconciles our EBITDA (non-IFRS measure) for the years/periods
indicated:
Y ear ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
(RMB’000) (RMB’000)
(unaudited)
Profit for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883,504 29,146 202,438 93,084 134,982
Add:
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,382 (3,123) 40,324 15,425 26,222
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,811 13,410 26,870 12,218 8,045
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,032) (1,309) (175) (91) (283)
Depreciation and
amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,700 21,519 42,448 18,334 26,120
EBITDA (non-IFRS
measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,365 59,643 311,905 138,970 195,086
Revenue
During the Track Record Period, we generated revenue primarily from (i) production and
sale of copper cathodes; (ii) production and sale of copper concentrates; and (iii) trading of a
variety of non-ferrous metal products. Our revenue is principally affected by our total sales
volume, which is influenced by factors such as our production capacity, sourcing of raw ores
and market conditions. Additionally, revenue is impacted by our product sales mix, as average
selling prices differ across business lines, as well as within the same segment and over time.
FINANCIAL INFORMATION
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Revenue by Business Line
The following table sets forth our revenue by business line for the years/periods
indicated:
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
(unaudited)
Copper production and
processing
Copper cathodes /H1118/H1118/H1118/H1118/H1118/H1118/H1118328,220 51.5 404,785 59.9 1,228,967 69.4 448,256 75.2 828,021 85.9
Copper concentrates /H1118/H1118/H1118/H1118/H111862,396 9.8 12,177 1.8 946 0.1 946 0.3 1,179 0.1
Cobalt hydroxide /H1118/H1118/H1118/H1118/H1118/H1118– – – – – – – – 10,739 1.2
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118390,616 61.3 416,962 61.7 1,229,913 69.5 449,202 75.5 839,939 87.2
Trading of non-ferrous
metal products /H1118/H1118/H1118/H1118/H1118/H1118246,687 38.7 258,739 38.3 539,920 30.5 146,763 24.5 123,846 12.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118637,303 100.0 675,701 100.0 1,769,833 100.0 595,965 100.0 963,785 100.0
Copper Production and Processing
We operate two copper smelters in Zambia, which commenced production in September
2019 and March 2022, and one copper smelter in DR Congo, which commenced production in
August 2023. We also operate one copper concentrate flotation plant in Zambia which
commenced production in October 2017.
In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, our revenue
generated from copper production and processing amounted to RMB390.6 million, RMB417.0
million, RMB1,229.9 million, RMB449.2 million and RMB839.9 million, respectively,
accounting for 61.3%, 61.7%, 69.5%, 75.5% and 87.2% of our total revenue in the respective
year/period. The significant increases in our revenue in 2024 and in the six months ended June
30, 2025 were mainly attributed to (i) the increased production of copper cathodes following
the production facilities in DR Congo commenced operation; (ii) a spike of the average selling
price as a result of the higher copper prices quoted on the LME and (iii) the supply shortage
facing by the global copper market. As the global demand for copper is projected to surge in
the next decade, driven by the surge in demand in the renewable energy and electric vehicle
industries and massive infrastructure spending in emerging markets, copper prices are forecast
to rise in light of the emerging copper supply deficit globally, according to Frost & Sullivan.
In view of this, the average selling prices of our cooper cathodes and copper concentrates
demonstrated steady increase, which in turn had a positive impact on our revenue growth
during the Track Record Period. With the expansion of production capacity and the
successfully commissioning of our hydrometallurgical projects in Zambia and DR Congo, our
output of copper cathodes has also increased, enabling us to fully exploit market potentials
driven by the price surge of copper to achieve substantial growth in revenue during the same
periods.
FINANCIAL INFORMATION
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--- page 307 ---
The following table sets out our sales volume and average selling price of copper
cathodes, copper concentrates and cobalt hydroxide for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
Sales
volume ASP (1)
Sales
volume ASP (1)
Sales
volume ASP (1)
Sales
volume ASP (1)
Sales
volume ASP (1)
Tons
RMB’
thousand/
ton Tons
RMB’
thousand/
ton Tons
RMB’
thousand/
ton Tons
RMB’
thousand/
ton Tons
RMB’
thousand/
ton
Copper cathodes /H1118/H1118/H1118/H11185,886.4 55.8 7,384.1 54.8 19,851.1 61.9 7,195 62.3 12,952.9 63.9
Copper concentrates /H1118/H11181,170.3 53.3 229.1 53.1 17.8 53.1 17.8 52.9 21.2 55.6
Cobalt hydroxide /H1118/H1118/H1118/H1118– – – – – – – – 83.7 128.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,056.7 7,613.2 19,868.9 7,213.3 13,057.8
Note:
(1) Representing revenue generated from sales of the respective products divided by the sales volume calculated
in metal ton taking into account the actual metal content.
The following table sets out our production volume of copper cathodes, copper
concentrates and cobalt hydroxide for the years/periods indicated:
Y ear ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
Production volume (tons)
Copper cathodes /H1118/H1118/H1118/H11185,949.8 7,368.1 20,934.8 7,220.6 12,496.2
Copper concentrates /H1118 1,178.4 210.5 32.0 17.8 9.0
Cobalt hydroxide /H1118/H1118/H1118 – – 128.2 – 171.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,128.2 7,578.6 21,095.0 7,238.4 12,676.2
Trading of Non-Ferrous Metal Products
We also procure non-ferrous metal products from suppliers in Peru and China, and mainly
sell to our customers through our subsidiaries in Singapore and China. Non-ferrous metal
products we trade primarily include copper, zinc, lead and silver. We also sell cobalt hydroxide,
which were generated as by products during the copper smelting process, under this business
line.
In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, revenue from
trading of non-ferrous metal products amounted to RMB246.7 million, RMB258.7 million,
RMB539.9 million, RMB146.8 million and RMB123.8 million, respectively, accounting for
38.7%, 38.3%, 30.5%, 24.5% and 12.8% of our total revenue in the respective years/periods.
FINANCIAL INFORMATION
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--- page 308 ---
Revenue by Geographic Location
The following table sets out a breakdown of our revenue by geographic location (1) of our
customers for the years/periods indicated:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
(unaudited)
Singapore /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 27,989 4.1 406,455 23.0 169,916 28.5 496,828 51.5
Switzerland /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 11,718 1.7 265,917 15.0 106,523 17.9 128,917 13.4
Chinese Mainland /H1118/H1118/H1118/H1118241,754 37.9 350,521 51.9 634,035 35.8 199,708 33.5 120,965 12.6
Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H1118220,925 34.7 83,610 12.4 25,598 1.4 – – 86,397 9.0
British Virgin Islands /H1118/H1118107,295 16.8 192,513 28.5 266,201 15.0 98,266 16.5 78,255 8.1
Luxembourg /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 170,167 9.6 20,092 3.4 47,241 4.9
Peru /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,827 1.1 – – 514 0.1 514 0.1 4,003 0.4
Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,502 9.5 9,350 1.4 946 0.1 946 0.1 1,179 0.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118637,303 100.0 675,701 100.0 1,769,833 100.0 595,965 100.0 963,785 100.0
Note:
(1) The geographic location is based on the place of registration of the respective customer.
Revenue by Delivery Location
The following table sets out a breakdown of revenue by delivery location of our
customers for the years/periods indicated:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue RMB’000
%o f
revenue
(unaudited)
DRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 126,370 18.7 877,004 49.6 308,104 51.7 699,681 72.6
Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118388,723 61.0 288,399 42.7 352,912 19.9 141,098 23.7 127,721 13.3
The PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241,754 37.9 260,932 38.6 409,070 23.1 112,465 18.9 84,029 8.7
Peru /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,826 1.1 – – 130,847 7.4 34,298 5.8 52,354 5.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118637,303 100.0 675,701 100.0 1,769,833 100.0 595,965 100.0 963,785 100.0
FINANCIAL INFORMATION
– 297 –


--- page 309 ---
Cost of Sales
Our cost of sales primarily consists of (i) cost of trading goods, representing costs of
non-ferrous metals for our trading business; (ii) cost of raw materials, representing costs of
ores materials for our production; (iii) other materials and consumables, such as sulfuric acid
we used in our production; (iv) utilities; (v) depreciation, mainly arising from our production
facilities; (vi) direct labor costs; (vii) resource tax; and (viii) custom duties. The following
table sets forth a breakdown of our cost of sales by nature for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total
(unaudited)
Cost of trading goods /H1118/H1118/H1118/H1118241,132 51.7 248,980 45.6 510,033 36.4 131,215 29.1 113,226 15.3
Cost of raw materials /H1118/H1118/H1118/H1118178,017 38.1 157,988 29.0 490,323 35.0 174,757 38.8 376,566 50.8
Other materials and
consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,127 3.9 61,667 11.3 140,745 10.0 45,530 10.1 84,211 11.4
Utilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,669 1.2 28,744 5.3 110,093 7.9 43,440 9.6 72,622 9.8
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,067 1.5 19,244 3.5 39,884 2.8 17,142 3.8 24,781 3.3
Direct labor costs /H1118/H1118/H1118/H1118/H1118/H11189,856 2.1 17,536 3.2 36,710 2.6 16,974 3.8 18,947 2.6
Resource tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,737 0.9 35,598 2.5 10,638 2.4 27,287 3.7
Custom duties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 611 0.1 12,202 0.9 2,701 0.6 7,890 1.1
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,942 1.4 6,051 1.2 26,578 1.9 7,915 1.8 15,575 2.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118466,810 100.0 545,558 100.0 1,402,166 100.0 450,312 100.0 741,105 100.0
Note:
(1) Representing costs for inspection and quality control, and other production overheads.
FINANCIAL INFORMATION
– 298 –


--- page 310 ---
Our cost of trading goods remained relatively stable at RMB241.1 million and RMB249.0
million in 2022 and 2023, respectively. Our cost of trading goods grew significantly from
RMB249.0 million in 2023 to RMB510.0 million in 2024, reflecting the increased procurement
of non-ferrous metals from our domestic and international suppliers in 2024. Our cost of
trading goods decreased from RMB131.2 million in the six months ended June 30, 2024 to
RMB113.2 million in the six months ended June 30, 2025, mainly as a result of the decrease
in the domestic trading volume of non-ferrous metals in the six months ended June 30, 2025.
Our cost of raw materials further decreased from RMB178.0 million in 2022 to RMB158.0
million in 2023, primarily due to a decline in raw material procurement costs corresponding to
the lower average copper prices quoted on the LME and an increase in the utilization of tailings
of Rong Xing Investments in Zambia. Copper tailings are solid waste with an inferior copper
content (typically measured at 0.2% to 0.8%) discharged after copper ore processing. They
mainly consist of gangue minerals, unrefined copper minerals, and small amount of other
metallic impurities. They are regarded as one of the major byproducts of copper mining and
processing which usually stored in tailings ponds as slurry. By way of technical upgrades, we
are able to further utilize tailings to extract valuable metals, albeit lower than the original ore,
to reduce our upfront costs associated with mining, stripping, and transportation. Specifically,
tailings can be directly extracted from tailings ponds through simple pretreatment, lowering
costs in resource acquisition compared to conventional ore mining. Furthermore, since tailings
have already undergone preliminary crushing and grinding, they can enter the smelting process
directly, simplifying operational procedures and reducing reagent consumption costs. Our cost
of raw materials surged significantly from RMB158.0 million in 2023 to RMB490.3 million in
2024, mainly driven by a substantial increase in raw material procurement costs resulting from
the increased copper cathode production in DR Congo in 2024, coupled with a steady rise in
average copper prices quoted on the LME. Our cost of raw materials further increased from
RMB174.8 million in the six months ended June 30, 2024 to RMB376.6 million in the six
months ended June 30, 2025, primarily attributable to the continued increase in raw material
procurement costs following the production expansion of copper cathodes in DR Congo.
Gross Profit and Gross Profit Margin
In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, our gross profit
amounted to RMB170.5 million, RMB130.1 million, RMB367.7 million, RMB145.7 million
and RMB222.7 million, respectively. In 2022, 2023, 2024 and the six months ended June 30,
2024 and 2025, our gross profit margin was 26.8%, 19.3%, 20.8%, 24.4% and 23.1%,
respectively. We have incurred gross profit losses in the copper concentrates production and
processing business in 2023 and 2024 primarily due to (i) the shrank of our copper concentrates
output resulting from the contraction in raw material supply in 2023, which in turn advanced
the unit fixed costs of producing copper concentrates, and (ii) the elevated unit fixed costs such
as accumulated depreciation continued to incur in the corresponding periods.
FINANCIAL INFORMATION
– 299 –


--- page 311 ---
Gross Profit and Gross Profit Margin by Business Line
The following table sets forth our gross profit and gross profit margin by business lines
for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
Gross
profit/
(loss)
Gross
profit/
(loss)
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Copper production and
processing
Copper cathodes /H1118/H1118/H1118/H1118/H1118155,250 47.3 121,525 30.0 339,821 27.7 130,140 29.0 208,858 25.2
Copper concentrates /H1118/H1118/H11189,689 15.5 (1,139) (9.4) (2,039) (215.5) (36) (3.7) 508 43.1
Cobalt hydroxide /H1118/H1118/H1118/H1118/H1118– – – – – – – – 2,694 25.1
164,939 42.2 120,386 28.9 337,782 27.5 130,104 29.0 212,060 25.3
Trading of non-ferrous
metal products /H1118/H1118/H1118/H11185,554 2.3 9,757 3.8 29,885 5.5 15,549 10.6 10,620 8.6
Total/Overall /H1118/H1118/H1118/H1118/H1118/H1118/H1118170,493 26.8 130,143 19.3 367,667 20.8 145,653 24.4 222,680 23.1
We incurred a gross loss of RMB1.1 million and RMB2.0 million in 2023 and 2024 for
copper concentrates, respectively, primarily due to (i) a reduction in the market supply of
sulfide ore and mixed ore used for producing copper concentrates in Zambia; (ii) a significant
decrease in our production of copper concentrates from 1,178.4 tons in 2022 to 32.0 tons in
2024; and (iii) an increase in the unit fixed costs in connection with our copper concentrates
production in 2024. As a result of the foregoing, we recorded a gross loss margin of 9.4% and
215.5% in the respective years.
Other Income
Our other income primarily consisted of (i) sale of spare parts and other materials,
primarily arising from incidental sales of inventories that approaching expiry and parts and
components to nearby factories in DR Congo; (ii) government grants, mainly related to
subsidies and fundings awarded by local governments in the PRC to support listing, foreign
investments and other development projects; (iii) interest income arising from bank deposits
and loans granted to an associate, Jiangxi Tungsten Jinxun Resources Africa SAS. The
following table sets forth the breakdown of our other income by nature for the years/periods
indicated:
FINANCIAL INFORMATION
– 300 –


--- page 312 ---
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total
(Unaudited)
Sale of spare parts and
other materials /H1118/H1118/H1118/H1118/H1118/H1118135 2.1 162 5.2 730 39.1 467 36.9 129 15.8
Government grants /H1118/H1118/H1118/H1118/H11184,628 73.1 918 29.3 266 14.3 13 1.0 332 40.6
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H11181,032 16.3 1,309 41.8 175 9.4 91 7.2 283 34.6
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118537 8.5 742 23.7 694 37.2 694 54.9 74 9.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,332 100.0 3,131 100.0 1,865 100.0 1,265 100.0 818 100.0
Other Gains and Losses
Our other gains and losses comprised (i) net gains/losses on disposal of property, plant
and equipment; (ii) impairment losses/reversal of impairment losses of financial assets
measured at amortized costs including our input V A T receivables, financial assets under ECL
and property, plant and equipment; (iii) net foreign exchange gains/losses; and (iv) gains/losses
from changes in fair value of financial assets and liabilities measured at fair value through
profit or loss (“ FVTPL ”) including trade receivables, trade payables and other financial
liabilities, representing certain non-ferrous metal future contracts we purchased. The following
table sets forth the breakdown of our other income by nature for the years/periods indicated:
Y ear ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
(RMB’000) (RMB’000)
Gains/(losses) on disposal
of property, plant and
equipment, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118354 49 (2,062) – (49)
Impairment
(losses)/reversals
recognized in respect
of:
– Input V A T
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,930) (6,780) 3,774 1,887 (8,456)
– Financial assets under
ECL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(144) (12,467) (680) (771) (704)
– Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (4,438) – –
Foreign exchange
gains/(losses), net /H1118/H1118/H1118/H1118/H11184,061 (19,692) (1,482) 2,037 9,328
FINANCIAL INFORMATION
– 301 –


--- page 313 ---
Y ear ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
(RMB’000) (RMB’000)
(Losses)/gains from
changes in fair value
of:
– Trade receivables at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,431) 3,141 2,871 17,021 11,901
– Trade payables at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118528 461 (94) 182 (358)
– Other financial
liabilities at FVTPL /H1118 (39) 33 (4,990) (5,119) (107)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,601) (35,255) (7,101) 15,237 11,555
Distribution and Selling Expenses
Our distribution and selling expenses primarily consisted of (i) staff costs; (ii) traveling
expenses; (iii) depreciation; (iv) materials and consumables; (v) marketing expenses; and (vi)
insurance expenses. The following table sets forth the breakdown of our distribution and
selling expenses by nature for the years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total
(unaudited)
Staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,291 66.2 7,400 72.8 8,562 73.6 4,009 77.6 4,952 79.2
Traveling expenses /H1118/H1118/H1118/H1118/H1118/H1118862 9.1 866 8.5 731 6.3 417 8.1 244 3.9
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118374 3.9 322 3.2 432 3.7 215 4.2 244 3.9
Materials and consumables /H1118/H1118 48 0.5 302 3.0 355 3.1 42 0.8 164 2.6
Marketing expenses /H1118/H1118/H1118/H1118/H1118164 1.7 217 2.1 267 2.3 62 1.2 121 1.9
Insurance expenses /H1118/H1118/H1118/H1118/H1118/H111881 0.9 202 2.0 256 2.2 7 0.1 6 0.1
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,678 17.7 850 8.4 1,023 8.8 411 8.0 521 8.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,498 100.0 10,159 100.0 11,626 100.0 5,163 100.0 6,252 100.0
Note:
(1) Mainly representing office expenses, vehicles and transportation expenses and rental expenses.
FINANCIAL INFORMATION
– 302 –


--- page 314 ---
Administrative Expenses
Our administrative expenses primarily consisted of (i) staff costs; (ii) professional fees,
mainly representing audit fees, legal fees and tax service fees; (iii) materials and consumables
used for R&D purposes; (iv) business development expenses; and (v) bank charges. The
following table sets forth the breakdown of our administrative expenses by nature for the
years/periods indicated:
Y ear ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total
(unaudited)
Staff costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,596 44.3 21,258 44.1 28,598 35.2 14,130 39.0 18,014 30.2
Professional fees /H1118/H1118/H1118/H1118/H1118/H1118/H11185,639 12.8 4,965 10.3 6,792 8.4 2,982 8.2 4,537 7.6
Materials and consumables /H1118 1,539 3.5 2,932 6.1 6,395 7.9 1,758 4.8 6,051 10.2
Business development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,867 4.2 1,394 2.9 5,345 6.6 685 1.9 2,029 3.4
Bank charges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,547 5.8 3,095 6.4 5,297 6.5 2,452 6.8 3,582 6.0
Office expenses /H1118/H1118/H1118/H1118/H1118/H1118/H11182,276 5.1 1,756 3.6 3,470 4.3 1,761 4.9 3,104 5.2
Traveling expenses /H1118/H1118/H1118/H1118/H1118/H11183,410 7.7 2,420 5.0 3,382 4.2 1,683 4.6 3,940 6.6
Insurance expenses /H1118/H1118/H1118/H1118/H1118/H111823 0.1 1,697 3.5 3,167 3.9 1,323 3.6 1,853 3.1
License fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118647 1.5 943 2.0 3,040 3.7 1,488 4.1 2,310 3.9
Depreciation and
amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,259 5.1 1,953 4.1 2,132 2.6 977 2.7 1,095 1.8
Security expenses /H1118/H1118/H1118/H1118/H1118/H1118212 0.5 790 1.6 1,920 2.4 896 2.5 979 1.6
Other taxes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118414 0.9 364 0.8 1,291 1.6 1,023 2.8 3,246 5.5
Property fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873 0.2 494 1.0 1,158 1.4 705 1.9 815 1.4
Technical service fees /H1118/H1118/H1118/H1118877 2.0 931 1.9 1,059 1.3 497 1.4 – –
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,827 6.3 3,183 6.8 8,127 10.0 3,905 10.8 7,997 13.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,206 100.0 48,175 100.0 81,173 100.0 36,265 100.0 59,552 100.0
Note:
* Less than 0.1%
(1) Mainly representing vehicle expenses, repair and maintenance, postal and communication expenses and other
miscellaneous administrative expenses.
FINANCIAL INFORMATION
– 303 –


--- page 315 ---
Finance Costs
Our finance costs consisted of (i) interest on bank and other borrowings; (ii) interest on
lease liabilities; and (iii) unwinding of discount from provision of restoration, rehabilitation
and environment costs in relation to our smelting operations in Zambia and DR Congo. The
nature of the unwinding of discount refers to the discounted interest on the abandonment
obligation, which witnessed an increase in 2023 attributed to the completion and production of
the manufacturing site in DR Congo. See Note 27 to the Accountants’ Report included in
Appendix I to this prospectus. The following table sets forth a breakdown of finance costs for
the years/periods indicated:
Y ear ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,050 13,647 26,472 11,744 8,433
Interest on lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878 75 10 6 14
Unwinding of discount /H1118/H1118/H1118335 916 1,025 499 996
Less: interest expense
capitalised into plant
under construction /H1118/H1118/H1118/H1118(652) (1,228) (637) (31) (1,398)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,811 13,410 26,870 12,218 8,045
Income Tax
We are subject to income tax on an entity basis on profits arising in or derived from the
jurisdictions in which our subsidiaries are domiciled and operate. During the Track Record
Period, we are subject to income tax in the following jurisdictions:
PRC
Pursuant to the Enterprise Income Tax Law of the PRC (੻೼
) and the respective regulations (the “ EIT Law ”), our subsidiaries which operate in China
are subject to the statutory enterprise income tax at a rate of 25% on the taxable income, unless
subject to tax exemption or preferential tax treatment. Tibet Huiyi located in PRC, is eligible
for a 15% income tax rate from January 1, 2021 to December 31, 2030. Meanwhile, Tibet Huiyi
is eligible for additional 6% income tax rate relief from January 1, 2022 to December 31, 2025.
Singapore
Our subsidiary which operates in Singapore is subject to the statutory enterprise income
tax at a rate of 17% on the estimated taxable income, subject to progressive tax relief. Our
subsidiary in Singapore is eligible for 75% income tax relief when the profit before taxation
is less than SGD10,000, 50% income tax relief when the profit before taxation is SGD10,000
or greater but less than SGD200,000. Upon meeting certain requirements for trading businesses
in Singapore, our subsidiary in Singapore is eligible for a 10% income tax rate for profit arising
from certain specified commodities trading revenue from April 1, 2025 to March 31, 2028.
FINANCIAL INFORMATION
– 304 –


--- page 316 ---
Peru
Our subsidiary which operates in Peru is subject to income tax at a rate of 29.5% on the
estimated taxable income.
DR Congo
Our subsidiary which operates in DR Congo is subject to income tax at a rate of 30% on
the estimated taxable income when 30% of the taxable income exceeds 1% of gross sales, or
at 1% of gross sales when 30% of the taxable income does not exceeds 1% of gross sales.
Zambia
Our subsidiary which operates in Zambia is subject to income tax at a rate of 30% on the
estimated taxable profit. Rong Xing Investments was granted to tax waiver on the income tax
for the year ended December 31, 2022 of ZMW27,915,000 (equivalent to RMB10,409,000).
Our income tax consists of current income tax and deferred income tax. The following
table sets forth a breakdown of our income tax expense/credit for the years/periods indicated:
Y ear ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
(RMB’000)
(unaudited)
Current tax
– Income tax in PRC /H1118/H1118/H1118/H11187,119 4,128 14,835 6,529 15,342
– Income tax in
Singapore /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,198 712 4,021 3,190 2,584
– Income tax in Peru /H1118/H1118/H1118/H1118199 – 578 – 712
– Income tax in DR
Congo /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,558 14,517 2,845 5,565
– Income tax in Zambia /H1118/H11182,725 1,948 – 1,457 1,349
Provision for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,241 8,346 33,951 14,021 25,552
Deferred tax
Origination and reversal
of temporary
differences /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,859) (11,469) 6,373 1,404 670
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,382 (3,123) 40,324 15,425 26,222
FINANCIAL INFORMATION
– 305 –


--- page 317 ---
In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, our effective
income tax rate, representing income tax divided by profit before income tax, expressed as a
percentage, was 11.1%, -12.0%, 16.6%, 14.2% and 16.3%, respectively. Our effective income
tax rate during the Track Record Period was lower than our statutory enterprise income tax rate
in different countries ranges from 17% to 30%, primarily as Tibet Huiyi enjoyed preferential
tax rate at 9% during the tax holiday up to the year ended 31 December 2025 and a tax waiver
of RMB10.4 million received in 2022 for Rong Xing Investments.
As of the Latest Practicable Date, we paid all relevant taxes that were due and applicable
to us and had no material disputes or unresolved tax issues with relevant tax authorities.
PERIOD TO PERIOD COMPARISON OF RESULTS OF OPERATIONS
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Revenue
Our total revenue increased by 61.7% from RMB596.0 million in the six months ended
June 30, 2024 to RMB963.8 million in the six months ended June 30, 2025: primarily
attributable to the following:
(i) Copper production and processing : Revenue from copper production and processing
increased significantly by 87.0% from RMB449.2 million in the six months ended
June 30, 2024 to RMB839.9 million in the six months ended June 30, 2025,
primarily due to the significant growth in revenue contribution from the sales of
copper cathodes. The increase was primarily driven by the increased sales volume
of copper cathodes from 7,212.3 tons in the six months ended June 30, 2024 to
12,974.1 tons in the six months ended June 30, 2025 following the stability of
electricity supply at our production facilities in DR Congo.
(ii) Trading of non-ferrous metal and products : Revenue from trading of non-ferrous
metal products decreased by 15.6% from RMB146.8 million in the six months ended
June 30, 2024 to RMB123.8 million in the six months ended June 30, 2025,
primarily due to the shrinkage in the sales volume of our non-ferrous trading
business. The decline was mainly due to we have strategically reduced our exposure
to low profit margin businesses in light of the overall market conditions.
Cost of Sales
Our cost of sales increased by 64.6% from RMB450.3 million in the six months ended
June 30, 2024 to RMB741.1 million in the six months ended June 30, 2025, primarily due to
the increases in our cost of raw materials and other materials and consumables in parallel with
the increment in our production capacity.
FINANCIAL INFORMATION
– 306 –


--- page 318 ---
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit increased by 52.9% from RMB145.7 million
in the six months ended June 30, 2024 to RMB222.7 million in the six months ended June 30,
2025, primarily due to the substantial growth in our revenue. Our gross profit margin decreased
slightly from 24.4% in the six months ended June 30, 2024 to 23.1% in the six months ended
June 30, 2025, mainly as a result of an increased proportion of products from DR Congo, where
the production costs were relatively higher than in Zambia due to its higher price levels and
inflation rates, stronger financial capacity, higher logistics costs, heavier tax burden, as well as
higher raw material costs, including but not limited to, higher mining license fees, mining
royalties for resource extraction, and copper ore prices.
Copper Production and Processing
Our gross profit from the production of copper cathodes and cobalt hydroxide increased
from RMB130.1 million in the six months ended June 30, 2024 to RMB211.6 million in the six
months ended June 30, 2025, primarily attributable to the increases in production capacity and
copper prices. The gross profit margin of our production of copper cathodes decreased from
29.0% in the six months ended June 30, 2024 to 25.2% in the six months ended June 30, 2025,
primarily due to an increased proportion of products from DR Congo, where the production
costs were relatively higher than in Zambia.
Trading of Non-ferrous Metal Products
Our gross profit from the trading of non-ferrous metal products decreased from RMB15.5
million in the six months ended June 30, 2024 to RMB10.6 million in the six months ended
June 30, 2025, primarily attributable to due to we have strategically reduced our exposure to
low profit margin businesses in light of the overall market conditions. The gross profit margin
of our trading of non-ferrous metal products remained relatively stable in the six months ended
June 30, 2025.
Other Income
Our other income decreased by 35.3% of RMB1.3 million and RMB0.8 million in the six
months ended June 30, 2024 and 2025, primarily due to (i) a decrease of RMB0.6 million in
others, mainly due to completion of the one-off equipment lease in the corresponding period
in 2024.
FINANCIAL INFORMATION
– 307 –


--- page 319 ---
Other Gains and Losses
Our other gains decreased by 24.2% from RMB15.2 million in the six months ended June
30, 2024 to RMB11.6 million in the six months ended June 30, 2025, primarily due to (i) an
increase of RMB10.3 million in impairment losses on V A T receivables, primarily due to
prolonged tax refund process in Zambia and (ii) a decrease of RMB5.1 million in gains from
changes in fair value of trade receivables at FVTPL given the reduced volatility in copper
prices during the first half of 2025 compared to the same period in 2024, as we typically
determine copper product pricing based on the average LME Cash Settlement Price over the
quotation period (i.e. M+N) and the applicable discount level stipulated in the agreement,
partially offset by an increase of RMB7.3 million in foreign exchange gains, representing the
fluctuations in exchanges rates of certain currencies.
Distribution and Selling Expenses
Our distribution and selling expenses increased by 21.1% from RMB5.2 million in the six
months ended June 30, 2024 to RMB6.3 million in the six months ended June 30, 2025,
primarily attributable to an increment in staff costs following the increased headcounts of our
sales and marketing staff at our production facilities in Zambia and DR Congo in the
corresponding periods.
Administrative Expenses
Our administrative expenses increased by 64.2% from RMB36.3 million in the six months
ended June 30, 2024 to RMB59.6 million in the six months ended June 30, 2025, mainly driven
by the increases in our staff costs, traveling expenses, office expenses and business and
marketing expenses, in line with our business expansion.
Finance Costs
Our finance costs decreased by 34.2% from RMB12.2 million in the six months ended
June 30, 2024 to RMB8.0 million in the six months ended June 30, 2025, primarily reflecting
a decrease in our borrowings in the corresponding periods.
Income Tax
We recorded income tax expenses of RMB15.4 million and RMB26.2 million in the six
months ended June 30, 2024 and 2025, respectively.
Profit for the Period
As a result of the foregoing, our profit for the period increased from RMB93.1 million in
the six months ended June 30, 2024, to RMB135.0 million in the six months ended June 30,
2025. Our net profit margin increased from 11.4% in 2024 to 14.0% in the six months ended
June 30, 2025, primarily driven by the significant increase in our revenue in line with our
enhanced production capacity in the respective periods.
FINANCIAL INFORMATION
– 308 –


--- page 320 ---
2024 Compared to 2023
Revenue
Our total revenue increased significantly from RMB675.7 million in 2023 to RMB1,769.8
million in 2024, primarily attributable to the following:
(i) Copper production and processing. Revenue from copper production and processing
increased significantly from RMB417.0 million in 2023 to RMB1,229.9 million in
2024, mainly due to an increase in sales of copper cathodes from RMB404.8 million
in 2023 to RMB1,229.0 million in 2024, driven by an increase in sales volume from
7,384.1 tons in 2023 to 19,851.1 tons in 2024 as our DR Congo copper smelter I
ramped up for production during the year. Such increase was partially offset by a
decrease in revenue from sales of copper concentrates by 92.2% from RMB12.2
million in 2023 to RMB0.9 million in 2024. During the Track Record Period, we
strategically focused our resources in the production of copper cathodes.
(ii) Trading of non-ferrous metal products. Revenue trading of non-ferrous metal
products increased significantly from RMB258.7 million in 2023 to RMB539.9
million in 2024, primarily attributable to an increase in revenue from trading of zinc
ingot during the year.
Cost of Sales
Our cost of sales increased significantly from RMB545.6 million in 2023 to RMB1,402.2
million in 2024, primarily due to an increase in cost of raw materials and other production
costs, resulting from an increase in sales volume.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit increased significantly from RMB130.1
million in 2023 to RMB367.7 million in 2024. Our gross profit margin increased slightly from
19.3% in 2023 to 20.8% in 2024.
Copper Production and Processing
Our gross profit from production of copper cathodes increased from RMB121.5 million
in 2023 to RMB339.8 million in 2024, primarily reflecting an increase in sales volume. Our
gross profit margin from production of copper cathodes decreased from 30.0% in 2023 to
27.7% in 2024, primarily attributable to higher production costs incurred in DR Congo.
FINANCIAL INFORMATION
– 309 –


--- page 321 ---
In 2023 and 2024, we incurred gross loss of RMB1.1 million and RMB2.0 million from
production of copper concentrates. As we strategically focused our resources on production of
copper cathodes, we only produced copper concentrates in smaller scale resulting in higher unit
costs and gross loss.
Trading of Non-ferrous Metal Products
We recorded gross profit from trading of non-ferrous metal products of RMB9.8 million
and RMB29.9 million in 2023 and 2024, respectively, achieving a gross profit margin of 3.8%
and 5.5% in the respective years. During the Track Record Period, our gross profit margin from
trading of non-ferrous metal products fluctuated with market prices of the metal products at the
time of both sales and purchases.
Other Income
Our other income decreased by 40.4% from RMB3.1 million in 2023 to RMB1.9 million
in 2024, primarily due to a decrease in interest income upon the write-off of the relevant loan
due from an associate, Jiangxi Tungsten Jinxun Resources Africa SAS, which was considered
unrecoverable, in 2024. Jiangxi Tungsten Jinxun Resources Africa SAS is an associate jointly
established by Jinxun Singapore and Jiangxi Tungsten Trading Hong Kong Co., Ltd. on August
16, 2018 in DR Congo and primarily engages in the sale of mineral products covering copper
and cobalt. To meet the operational needs of Jiangxi Tungsten Jinxun Resources Africa SAS,
the shareholders provided loans in the same proportion to support the business expansion of
Jiangxi Tungsten Jinxun Resources Africa SAS in trading of metal and mineral products. In
2021, Jiangxi Tungsten Jinxun Resources Africa SAS procured and stockpiled a considerable
amount of cobalt ores in advance to support its business expansion. Since late 2022, cobalt ore
prices had plummeted significantly as a result of the market surplus caused by the elevated
production across global major producers. Affected by the fluctuations in cobalt ore prices,
Jiangxi Tungsten Jinxun Resources Africa SAS experienced difficulties in selling its
inventories to overcome its financial hardship and became insolvent afterwards. As a result, the
shareholders’ meeting of Jiangxi Tungsten Jinxun Resources Africa SAS unanimously held that
the company to cease operations from December 31, 2023. A liquidation committee was
established to facilitate the process of liquidating and de-registering of the company. In light
of the fact that the company has ceased its operations on December 31, 2023 and initiated
liquidation procedures in 2024, our Directors are of the view that the possibility to recover the
aforementioned principle and interest is remote. Accordingly, the relevant principle and
interest have been written-off and were excluded from being recognized as relevant interest
income in 2024. During the Track Record Period, we entered into certain transactions with
Jiangxi Tungsten Jinxun Resources Africa SAS from time to time, comprising mainly of (i)
purchasing of property, plant and equipment; (ii) leasing of offices, staff dormitories and
warehouse; and (iii) interest income in connection with the provision a loan. See “Material
Related Party Transactions — Transactions with Related Parties” for details.
FINANCIAL INFORMATION
– 310 –


--- page 322 ---
Other Gains and Losses
In 2023, we recorded other net losses of RMB35.3 million, primarily arising from (i) a
net foreign exchange losses of RMB19.7 million, mainly resulting from the fluctuations
between ZMW and U.S. dollar arising from input V A T recoverable in Zambia; and (ii) an
impairment loss on financial assets under ECL, representing the impairment made to a loan
provided to an associate, Jiangxi Tungsten Jinxun Resources Africa SAS. In 2024, we recorded
other net losses of RMB7.1 million, primarily arising from the loss from other financial
liabilities at FVTPL of RMB5.0 million related to our investments in non-ferrous metal future
contracts.
Distribution and Selling Expenses
Our distribution and selling expenses increased by 14.4% from RMB10.2 million in 2023
to RMB11.6 million in 2024, primarily due to an increase in staff cost in 2024, reflecting the
increase in sales headcount and salary increment.
Administrative Expenses
Our administrative expenses increased by 68.5% from RMB48.2 million in 2023 to
RMB81.2 million in 2024, primarily due to (i) an increase in staff cost in 2024, reflecting
increases in administrative headcount and salary increment due to the shortage of
administrative staff following Jinxun DR Congo commenced its production in August 2023 and
the merit pay to our staff upon improved results of operations; and (ii) an increase in business
development activities.
Finance Costs
Our finance costs increased significantly from RMB13.4 million in 2023 to RMB26.9
million in 2024, primarily due to an increase in our interest on bank and other borrowings as
additional loans had been taken by the Company in 2024. The bank and other borrowing
increased from RMB213.2 million as of December 31, 2023 to RMB268.6 million as of
December 31, 2024.
Income Tax
We recorded income tax credit of RMB3.1 million in 2023 and income tax expense of
RMB40.3 million in 2024. Such change was primarily due to an increase in profit before
taxation in 2024.
Profit for the Y ear
As a result of the foregoing, our profit for the year increased significantly from RMB29.1
million in 2023 to RMB202.4 million in 2024. Our net profit margin increased from 4.3% in
2023 to 11.4% in 2024, primarily due to improvement in our revenue and gross profit margin
as we ramped up our production in DR Congo copper smelter I.
FINANCIAL INFORMATION
–3 1 1–


--- page 323 ---
2023 Compared to 2022
Revenue
Our total revenue increased by 6.0% from RMB637.3 million in 2022 to RMB675.7
million in 2023, primarily attributable to the following:
(i) Copper production and processing. Revenue from copper production and processing
increased by 6.7% from RMB390.6 million in 2022 to RMB417.0 million in 2023,
mainly due to an increase in sales of copper cathodes by 23.3% from RMB328.2
million in 2022 to RMB404.8 million in 2023 driven by an increase in sales volume
from 5,886.4 tons in 2022 to 7,384.1 tons in 2023, following the commencement of
operation of our DR Congo copper smelter I in August 2023. Such increase was
partially offset by a decrease in revenue from sales of copper concentrates by 80.5%
from RMB62.4 million in 2022 to RMB12.2 million in 2023. During the Track
Record Period, we strategically focused our resources in production of copper
cathodes.
(ii) Trading of non-ferrous metal products. Revenue trading of non-ferrous metal
products increased by 4.9% from RMB246.7 million in 2022 to RMB258.7 million
in 2023, primarily attributable to an increase in revenue from trading of copper
products during the year.
Cost of Sales
Our cost of sales increased by 16.9% from RMB466.8 million in 2022 to RMB545.6
million in 2023, primarily attributable to an increase in other materials and consumables and
direct labor costs, mainly reflecting the increased use of auxiliary materials such as sulfuric
acid and extractant, as well as manpower for production due to the use of lower-grade ores with
lower percentage of desired metal content in 2023 since we have strategically shifted toward
utilizing lower-grade ores with abundant reserves, which offer more stable supply advantages
compared to high-grade ores.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our gross profit decreased by 23.7% from RMB170.5 million
in 2022 to RMB130.1 million in 2023. The contraction of our gross profit was primarily
attributed to our limited production capacity in 2023. Jinxun DR Congo initiated its production
in August 2023 and has yet to reach the designed production capacity, which subdued our
annual production capacity. Our gross profit margin decreased from 26.8% in 2022 to 19.3%
in 2023. The decrease in gross profit margin reflects the facts that fixed costs, including
accumulated depreciation, accumulated amortization, and labor costs, continued to incur in the
corresponding period.
FINANCIAL INFORMATION
– 312 –


--- page 324 ---
Copper Production and Processing
Our gross profit from production of copper cathodes decreased from RMB155.2 million
in 2022 to RMB121.5 million in 2023, primarily reflecting an increase in production costs due
to the use of lower-grade ores with lower percentage of desired metal content in 2023, mainly
because (i) the processing of lower-grade ores consumes more auxiliary materials, energy and
manpower, resulting in higher unit processing costs compared to high-grade ores; (ii) the
processing of an equivalent quantity of low-grade ores will result in less output of metal
products compared to high-grade ores, thereby impacting overall production volume; and (iii)
the DR Congo copper smelter I commenced operations in August 2023 and had yet to achieve
economies of scale in 2023. Accordingly, our gross profit margin from production of copper
cathodes decreased from 47.3% in 2022 to 30.0% in 2023.
In 2022 and 2023, we had gross profit of RMB9.7 million and gross loss of RMB1.1
million, respectively, from production of copper concentrates. As we strategically focused our
resources on production of copper cathodes, we only produced copper concentrates in smaller
scale resulting in higher unit costs and lower gross margin or gross loss.
Trading of Non-ferrous Metal Products
We recorded gross profit from trading of non-ferrous metal products of RMB5.6 million
and RMB9.8 million in 2022 and 2023, respectively, achieving a gross profit margin of 2.3%
and 3.8% in the respective years. During the Track Record Period, our gross profit margin from
trading of non-ferrous metal products fluctuated with market prices of the metal products at the
time of both sales and purchases.
Other Income
Our other income decreased by 50.6% from RMB6.3 million in 2022 to RMB3.1 million
in 2023, primarily due to a decrease in government grants in 2023. In 2022, our government
grants were mainly related to a subsidy received from Y unnan government amounting to
RMB3.0 million.
Other Gains and Losses
In 2022, we recorded other net losses of RMB7.6 million, primarily arising from a
decrease in fair value of our trade receivables at FVTPL of RMB10.4 million, reflecting the
decrease in market prices of copper. In 2023, we recorded other net losses of RMB35.3 million,
primarily arising from (i) a net foreign exchange losses of RMB19.7 million, mainly resulting
from the fluctuations between ZMW and U.S. dollar arising from input V A T recoverable in
Zambia; and (ii) an impairment loss on financial assets under ECL, representing the
impairment made to a loan provided to an associate, Jiangxi Tungsten Jinxun Resources Africa
SAS.
FINANCIAL INFORMATION
– 313 –


--- page 325 ---
Distribution and Selling Expenses
Our distribution and selling expenses increased by 7.0% from RMB9.5 million in 2022 to
RMB10.2 million in 2023, primarily due to an increase in staff cost in 2023, reflecting the
increase in sales headcount and salary increment.
Administrative Expenses
Our administrative expenses increased by 9.0% from RMB44.2 million in 2022 to
RMB48.2 million in 2023, primarily due to (i) an increase in staff cost in 2023, reflecting
increase in administrative headcount and salary increment as a consequence of the growing
demand to administrative staff after the commencement of production by Jinxun DR Congo in
August 2023, and the merit pay to our staff upon improved results of operations. We have also
raised the investment in insurance coverage to our staff to mitigate the political, economic and
safety risks in DR Congo; and (ii) an increase in insurance expenses related to new policy to
insure against political, economic and security-related risks for businesses in DR Congo.
Finance Costs
Our finance costs increased significantly from RMB6.8 million in 2022 to RMB13.4
million in 2023, primarily attributable to an increase in our interest on bank and other
borrowings as additional loans had been taken by the Company in 2023. The bank and other
borrowing as of December 31, 2022 increased from RMB87.4 million to RMB213.2 million as
of December 31, 2023.
Income Tax
We recorded income tax expense of RMB10.4 million in 2022 and income tax credit of
RMB3.1 million in 2023. Such change was primarily attributable to a decrease in profit before
tax in 2023. The impact was partially offset by the absence of tax waiver granted to our
subsidiary in Zambia by Zambia Revenue Authority in 2023, whereas tax waiver of RMB10.4
million was granted in 2022. The tax waiver was provided to selected companies which meet
certain criteria in capital investments.
Profit for the Y ear
As a result of the foregoing, our profit for the year decreased by 65.1% from RMB83.5
million in 2022 to RMB29.1 million in 2023. Our net profit margin decreased from 13.1% in
2022 to 4.3% in 2023, primarily due to (i) a decrease in gross profit; and (ii) an increase in
foreign exchange losses in 2023.
FINANCIAL INFORMATION
– 314 –


--- page 326 ---
DISCUSSION OF CERTAIN KEY ITEMS FROM CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
The following table sets forth our consolidated financial position as of the dates
indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
Non-current assets
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118339,428 504,961 617,621 654,834
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 7,608 9,433 9,634
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,046 20,223 20,160 20,333
Interest in an associate /H1118/H1118/H1118/H1118/H11182 5 2–––
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,405 14,459 11,041 12,199
Prepayments, deposits and
other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,141 45,150 36,196 53,747
Total non-current assets /H1118/H1118/H1118398,272 592,401 694,451 750,747
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,417 182,357 432,129 423,557
Trade receivables at
amortized cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,174 491 264 2,204
Trade receivables at FVTPL /H1118 43,161 25,084 36,517 39,743
Prepayments, deposits and
other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,910 42,609 81,554 114,148
Time deposit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,000 6,050
Cash and cash equivalents /H1118/H1118/H111879,062 39,876 123,901 126,510
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118238,724 290,417 679,365 712,212
Current liabilities
Trade payables at amortized
cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,317 56,241 82,868 106,422
Trade payables designated at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,481 82,036 271,527 191,248
Accrued expenses and other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,171 93,439 104,402 99,968
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,495 27,989 62,782 84,735
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,176 10,855 34,848 39,131
Bank and other borrowings /H1118/H1118 81,485 195,505 207,171 176,167
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118695 250 90 139
Financial liabilities at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118246 66 – 107
Total current liabilities /H1118/H1118/H1118/H1118263,066 466,381 763,688 697,917
Net current liabilities /H1118/H1118/H1118/H1118/H1118/H1118(24,342) (175,964) (84,323) 14,295
Total assets less current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118373,930 416,437 610,128 765,042
FINANCIAL INFORMATION
– 315 –


--- page 327 ---
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
Non-current liabilities
Bank and other borrowings /H1118/H1118 5,904 17,706 61,456 69,019
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118529 78 – 401
Provision for restoration,
rehabilitation and
environmental costs /H1118/H1118/H1118/H1118/H1118/H11183,581 9,380 10,746 22,123
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H11183,442 – 2,944 4,758
Total non-current liabilities /H1118 13,456 27,164 75,146 96,301
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276,522 493,545 838,834 794,218
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360,474 389,273 534,982 668,741
Property, Plant and Equipment
Our property, plant and equipment consisted of (i) buildings; (ii) machinery equipment;
(iii) construction in progress, mainly in relation to our construction of production facilities in
DR Congo, Anhui in the PRC and Zambia; and (iv) electronic and transportation equipment and
others. The following table sets forth a breakdown of the net carrying amount of our property,
plant and equipment as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,168 229,744 262,545 266,091
Machinery equipment /H1118/H1118/H1118/H1118/H1118/H111844,873 134,532 194,018 189,844
Construction in progress /H1118/H1118/H1118/H1118203,393 101,608 119,143 157,244
Electronic and transportation
equipment and others /H1118/H1118/H1118/H1118/H111831,994 39,077 41,915 41,655
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118339,428 504,961 617,621 654,834
Our property, plant and equipment increased by 48.8% from RMB339.4 million as of
December 31, 2022 to RMB505.0 million as of December 31, 2023. Such increase was
primarily due to the construction of the DR Congo copper smelter I and Anhui cobalt
processing Plant project and improvement of the cobalt workshop. In 2023, the construction of
the DR Congo copper smelter I completed and being put into operation, thus the related
construction costs had been transferred to buildings and machinery equipment respectively.
FINANCIAL INFORMATION
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Our property, plant and equipment increased by 22.3% from RMB505.0 million to
RMB617.6 million as of December 31, 2024, primarily due to construction work of Anhui
cobalt processing plant project and tailing pond. In 2024, the construction of cobalt workshop
and part of the tailing pond has completed and being put into operation, thus their related
construction costs had been transferred to buildings and machinery equipment respectively.
Our property, plant and equipment further increased by 6.0% to RMB654.8 million as of June
30, 2025, primarily due to an increase of RMB38.1 million in construction in process in
relation to the projects in Anhui Province.
Intangible Assets
Our intangible assets represented exploitation certificate acquired from a third party for
our operations in DR Congo. The transfer of such license were approved by the local
government of DR Congo in 2023 for a period up to August 2039. Our intangible assets
increased by 24.0% from RMB7.6 million as of December 31, 2023 to RMB9.4 million as of
December 31, 2024, primarily due to an additional consideration paid in relation to the
acquisition of such certificate. Our intangible assets further increased by 2.1% to RMB9.6
million as of June 30, 2025, mainly due to the renewal fees paid upon expiration of the
exploitation certificate. As advised by our legal advisors as to DR Congo laws, the regulations
on mining operations in DR Congo apply to all holders of mining rights permits. Further, under
the Mining Code of DR Congo, any legal entity who is not a holder of the mining rights permit
and is solely engaged in the processing of mineral substances must dedicate at least 50% of the
share capital to Congolese nationals. In practice, the relevant Congolese authorities consider
that the obligation to dedicate 50% of the share capital to Congolese nationals applies only to
processing entities that do not hold a mining rights permit. Therefore, holding a mining rights
permit exempts our subsidiary in DR Congo from the obligation to transfer 50% of the share
capital to Congolese nationals.
Right-of-Use Assets
Our right-of-use assets consisted of (i) land use right for leasehold land situated in the
PRC, Zambia and DR Congo; and (ii) the leases of properties for our office premises.
Our right-of-use assets increased significantly from RMB6.0 million as of December 31,
2022 to RMB20.2 million as of December 31, 2023, primarily due to the acquisition of land
use right in Anhui for the Anhui cobalt processing plant project. Our right-of-use assets
remained stable at RMB20.2 million as of December 31, 2024. Our right-of-use assets
remained relatively stable as of June 30, 2025.
Deferred Tax Assets/Liabilities
Our deferred tax primarily arose from temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes, primarily including those arising from the depreciation of property, plant
and equipment as well as intra-group unrealized gains or losses.
FINANCIAL INFORMATION
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The following table sets forth our deferred tax assets and liabilities as of the dates
indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,405 14,459 11,041 12,199
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H11183,442 – 2,944 4,758
Prepayments, Deposits and Other Receivables
The current portion of our prepayments, deposits and other receivables primarily
consisted of (i) input V A T receivables; (ii) tax recoverable; (iii) prepayments for inventories
and others; and (iv) loans granted to an associate. The non-current portion of our prepayments,
deposits and other receivables primarily consisted of (i) prepayments for property, plant and
equipment; and (ii) input V A T receivables.
The following table sets forth our prepayments, deposits and other receivables as of the
dates indicated:
At December 31, At June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current:
Prepayments for property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,123 1,071 4,624 8,682
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 71 301 332
Input V A T receivables /H1118/H1118/H1118/H1118/H1118/H1118/H111839,921 54,980 38,130 59,848
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,903) (10,972) (6,859) (15,115)
46,141 45,150 36,196 53,747------- ------- ------- -------
Current:
Prepayments for inventories and
others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,881 3,041 14,748 10,106
Prepayments for costs incurred
in connection with the
proposed initial public
offering of H shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 10,878
Input V A T receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,827 16,669 30,989 43,854
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,665 16,274 18,795 20,167
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,760 1,547 19,377 31,770
Loans granted to an associate /H1118/H111810,416 11,582 – –
Deposits in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,666 – –
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,151 7,024 180 648
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,790) (19,194) (2,535) (3,275)
58,910 42,609 81,554 114,148------- -- ----- ------- -------
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118105,051 87,759 117,750 167,895
FINANCIAL INFORMATION
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Our prepayments, deposits and other receivables decreased from RMB105.1 million as of
December 31, 2022 to RMB87.8 million as of December 31, 2023, primarily due to the increase
in allowance made to our loans granted to an associate and the decrease of prepayment for
property, plant and equipment due to the transfer of such to property, plant and equipment upon
the delivery of the assets.
Our prepayments, deposits and other receivables increased from RMB87.8 million as of
December 31, 2023 to RMB117.8 million as of December 31, 2024, primarily attributed to the
expansion of our operations in DR Congo. With the production capacity in DR Congo
accumulated rapidly in 2024, the demand of electricity surged to the same direction. The
deposits in connection with electricity reached RMB17.4 million and the prepayments made to
purchasing spare parts to maintain normal production and operation of the factory in DR Congo
also raised, attributed to the increases in our prepayments, deposits and other receivables in the
corresponding periods. Our prepayments, deposits and other receivables further increased to
RMB167.9 million as of June 30, 2025, primarily attributable to (i) an increase in tax refund;
(ii) the increased listing expenses; and (iii) the prepayment in connection with the cobalt
hydroxide projects in Anhui Province.
Inventories
Our inventories comprised (i) raw materials, primarily including copper ore, tailings,
sulfuric acid, diesel, extractants and other auxiliary materials required during the production;
(ii) spare parts and consumables, (iii) work-in-progress, primarily including copper sulfate
solution and cobalt sulfate solution; and (iv) finished goods, primarily including copper
products from our production and non-ferrous metal products for trading purpose. The
following table sets forth our inventories as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,127 78,400 230,502 211,950
Spare parts and consumables /H1118 5,410 7,363 28,396 39,822
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,233 54,768 79,981 71,505
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,647 41,826 93,250 100,280
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,417 182,357 432,129 423,557
FINANCIAL INFORMATION
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--- page 331 ---
Our inventories increased significantly from RMB56.4 million as of December 31, 2022
to RMB182.4 million as of December 31, 2023, primarily due to the gradual increase of
production of copper cathodes since the commencement of production at DR Congo copper
smelter I in August 2023, which pushed up the inventory level as of December 31, 2023.
Our inventories increased significantly from RMB182.4 million as of December 31, 2023
to RMB432.1 million as of December 31, 2024, primarily due to the increase in monthly
production of copper cathodes at the DR Congo copper smelter I from December 2023 to
December 2024, which pushed up the inventory level as of December 31, 2024.
Our inventories remained relatively stable as of June 30, 2025.
We use our system to assist us in planning and managing our inventories. We conduct
inventory review and aging analysis on a regular basis. Our team monitors our inventory levels,
inventory age, inventory composition and inventory turnover rate. We also carry out physical
stock counts on a regular basis. See “Business — Inventory Management” for details of our
inventory management policies.
The following table sets forth a breakdown of aging analysis of our inventories as of the
dates indicated:
Y ear ended December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
Within 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,923 113,367 238,249 317,394
30-90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,587 33,554 164,863 71,067
90-180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,352 21,975 15,266 17,944
180-365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118619 11,314 11,306 14,040
Over 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,936 2,147 2,445 3,112
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,417 182,357 432,129 423,557
We calculate the inventory turnover days using the average of the opening and ending
inventory balances for the period, divided by cost of sales for the relevant period, multiplied
by the number of days in the relevant period (i.e. 365 days for each of the years ended
December 31, 2022, 2023, 2024 and 180 days for the six months ended June 30, 2025). The
following table sets forth the number of our inventory turnover days for the periods indicated:
Y ear ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
Inventory turnover days /H1118/H1118/H1118/H1118/H111854 80 80 104
FINANCIAL INFORMATION
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--- page 332 ---
Our inventory turnover days increased from 54 days in 2022 to 80 days in 2023, primarily
due to the commencement of production at DR Congo copper smelter I in August 2023, which
pushed up the inventory level as of December 31, 2023. Our inventory turnover days remained
stable at 80 days in both 2023 and 2024. Our turnover days further increased to 104 days for
the six months ended June 30, 2025.
As of October 31, 2025, RMB375.6 million, or approximately 89.0% of our inventories
as of June 30, 2025 had been utilized or sold.
Trade Receivables
We generally require our customers of copper products to make 95% payment before the
products leave our production facilities and 5% payment within one to two months after
shipment. When we sell our copper products under provisional pricing arrangements, where
final grades of copper, gold, silver and cobalt in copper products are agreed based on
third-party examination and final prices are set at a specified date based on market prices, we
recognized our trade receivables at fair value through profit or loss (“ FVTPL ”), reflecting the
market price at the date of final settlement, which is usually within one to three months from
the date of revenue recognition.
The following table sets forth our trade receivables as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
Trade receivables at
amortized cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,244 517 278 2,316
Less: allowance for credit
losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(70) (26) (14) (112)
1,174 491 264 2,204
Trade receivables at FVTPL /H1118 43,161 25,084 36,517 39,743
Total trade receivables /H1118/H1118/H1118/H1118/H111844,335 25,575 36,781 41,947
FINANCIAL INFORMATION
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--- page 333 ---
Our trade receivables fluctuate from period to period, generally affected by the timing of
our delivery schedule and settlement from customers. Our trade receivables decreased by
42.3% from RMB44.3 million as of December 31, 2022 to RMB25.6 million as of December
31, 2023, primarily due to settlements from certain customers. Our trade receivables increased
by 43.8% from RMB25.6 million as of December 31, 2023 to RMB36.8 million as of December
31, 2024, primarily due to the increases in our revenue. Our trade receivables further increased
by 14.0% to RMB41.9 million as of June 30, 2025, primarily due to an increase of RMB3.2
million in trade receivables measured at FVTPL, reflecting the increased sales volume of
copper cathodes.
For our trade receivables recognized at amortized costs, we perform an impairment
analysis at the end of each reporting period using the simplified approach in IFRS 9 to measure
the loss allowance at lifetime. See Note 31 of the Accountants’ Report in Appendix I to this
prospectus for details.
The following table sets forth aging analysis of trade receivables at amortized costs, net
of loss allowance and based on invoice date as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118649 422 264 2,204
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–7––
91 to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6 2––
181 to 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 8 7–––
Over one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 3 8–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,174 491 264 2,204
The following table sets forth aging analysis of trade receivables at FVTPL, based on
invoice date as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,963 22,074 32,612 39,656
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,198 3,010 3,905 87
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,161 25,084 36,517 39,743
FINANCIAL INFORMATION
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--- page 334 ---
We calculate the trade receivables turnover days using the average of the opening and
ending trade receivables balances for the period, divided by revenue for the relevant period,
multiplied by the number of days in the relevant period (i.e. 365 days for each of the years
ended December 31, 2022, 2023, 2024 and 180 days for the six months ended June 30, 2025).
The following table sets forth the number of our trade receivables turnover days for the periods
indicated:
Y ear ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
Trade receivables turnover
days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 19 6 7
Our trade receivable turnover days were 26 days, 19 days, 6 days and 7 days, which were
shorter than the credit period we granted to certain of our customers. The gradual decrease in
our trade receivable turnover days during the Track Record Period as we required prepayments
from more customers for better capital management.
As of October 31, 2025, all of our trade receivables as of June 30, 2025 were subsequently
settled.
Trade Payables
Our trade payables primarily arose from purchases of raw materials, such as copper ore,
non-ferrous metal products and chemical products. Trade payables arising from provisional
pricing arrangements of copper concentrates purchase are settled at final prices set at a
specified future period after shipment by suppliers based on prevailing spot prices and are
designated at FVTPL on a contract by contract basis. While some of our suppliers require us
to make payment in advance or do not grant us credit, our other suppliers generally provide us
with a credit term of no more than 30 days.
The following table sets forth our trade payables as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
Trade payables at amortized
cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,317 56,241 82,868 106,422
Trade payables at FVTPL /H1118/H1118/H111828,481 82,036 271,527 191,248
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,798 138,277 354,395 297,670
FINANCIAL INFORMATION
– 323 –


--- page 335 ---
Our trade payables increased significantly from RMB57.8 million as of December 31,
2022 to RMB138.3 million as of December 31, 2023, primarily due to an increase in purchases
for our production in DR Congo since its commencement of operation in August 2023. Our
trade payables further increased significantly from RMB138.3 million as of December 31, 2023
to RMB354.4 million as of December 31, 2024, primarily due to a further increase in purchases
as the production in DR Congo ramped up during the year. Our trade payables further
decreased to RMB297.7 million as of June 30, 2025, primarily due to a decrease of RMB80.3
million in trade payables measured at FVTPL, representing the settlement of majority of trade
receivables in the corresponding periods.
The following table sets forth an aging analysis of our trade payables at amortized costs,
based on invoice dates, as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,871 20,865 58,545 77,088
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118892 9,736 19,505 26,807
91 to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 13,686 2,506 2,017
181 to 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,290 289 208 301
Over one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118264 11,665 2,104 209
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,317 56,241 82,868 106,422
The following table sets forth an aging analysis of our trade payables at FVTPL, based
on invoice dates, as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,025 34,191 254,244 139,100
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,246 43,020 16,272 40,081
91 to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,195 4,632 – 4,045
181 to 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 193 53 8,022
Over one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 958 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,481 82,036 271,527 191,248
FINANCIAL INFORMATION
– 324 –


--- page 336 ---
Our trade payables at amortized costs with aging over one year mainly arose from
purchases of replacement parts settled by instalment.
We calculate the trade payables turnover days using the average of the opening and
ending trade payables balances for the period, divided by cost of sales for the relevant period,
multiplied by the number of days in the relevant period (i.e. 365 days for each of the years
ended December 31, 2022, 2023, 2024 and 180 days for the six months ended June 30, 2025).
The following table sets forth the number of our trade payables turnover days for the periods
indicated:
Y ear ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
Trade payables turnover
days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836 66 64 79
Our trade payables turnover days increased from 36 days in 2022 to 66 days in 2023,
primarily due to an increase in purchases for our production in DR Congo since its
commencement of operation in August 2023. Our trade payables turnover days remained
relatively stable at 66 days and 64 days in 2023 and 2024, respectively. Our trade payables
turnover days further increased to 79 days for the six months ended June 30, 2025.
As of October 31, 2025, RMB293.8 million, or approximately 98.7% of our trade
payables as of June 30, 2025 were subsequently settled.
Accrued Expenses and Other Payables
Accrued expenses and other payables primarily comprise (i) payables for properties, plant
and equipment and intangible assets, mainly relating to the construction of our production
plants; (ii) deposits, mainly representing security deposits received from our customers;
(iii) payroll payables, mainly representing the salaries, bonuses, pension and other social
security payable by us; (iv) other tax payables, mainly representing the withholding individual
income tax and resource tax, value-added tax and other taxes payable by us; and (v) others,
mainly representing accrued fees and other daily operation expenses.
FINANCIAL INFORMATION
– 325 –


--- page 337 ---
The following table sets forth our accrued expenses and other payables as of the dates
indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Payables for properties, plant
and equipment and intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868,120 65,643 62,131 53,652
Payables for costs incurred in
connection with the proposed
initial public offering of
H shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 5,152
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,367 16,084 15,143 15,130
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,926 2,773 11,585 10,934
Financial liabilities measured at
amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,413 84,500 88,859 84,868
Payroll payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,420 4,366 7,490 7,162
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118338 4,573 8,053 7,938
78,171 93,439 104,402 99,968
Our accrued expenses and other payables increased by 19.5% from RMB78.2 million as
of December 31, 2022 to RMB93.4 million as of December 31, 2023, primarily due to the
increase in (i) deposits, relating to security deposits received from customers for their
purchases; and (ii) other tax payables as a result of resource tax levied on our production in
the DR Congo copper smelter I.
Our accrued expenses and other payables increased by 11.7% from RMB93.4 million as
of December 31, 2023 to RMB104.4 million as of December 31, 2024, primarily due to the
general increase in accruals and other payables attributed to the expansion of our operations in
DR Congo.
Our accrued expenses and other payables decreased slightly by 4.2% to RMB100.0
million as of June 30, 2025, primarily attributable to a decrease of RMB8.5 million in payables
for properties, plant and equipment and intangible assets upon completion of the production
facility in DR Congo.
As of October 31, 2025, RMB47.7 million, or approximately 47.7% of our accrued
expenses and other payables as of June 30, 2025 were subsequently settled.
FINANCIAL INFORMATION
– 326 –


--- page 338 ---
Contract Liabilities
Contract liabilities represented advances we received from our customers. As of
December 31, 2022, 2023 and 2024, we had contract liabilities of RMB33.5 million, RMB28.0
million and RMB62.8 million. The significant increase in contract liabilities as of December
31, 2024 as compared to December 31, 2023 was primarily due to the increase in our orders
on hand. Our contract liabilities further increased by 35.0% to RMB84.7 million as of June 30,
2025, primarily driven by our general business expansion and increased orders from our
customers.
As of October 31, 2025, all of our contract liabilities as of June 30, 2025 were
subsequently settled.
Financial Liabilities at Fair Value through Profit or Loss
Financial liabilities at FVTPL represented the non-ferrous futures contracts we held to
hedge against price volatility of metals. As of December 31, 2022, 2023, 2024 and June 30,
2025, we had non-ferrous metal futures contracts amounting to RMB0.2 million, RMB66,000,
nil and RMB0.1 million, respectively.
Provision for Restoration, Rehabilitation and Environmental Costs
Provision for restoration, rehabilitation and environmental costs was related to our
smelting operations in Zambia and DR Congo, representing the accrued costs arising from
facility decommissioning and dismantling, removal or treatment of waste materials and site and
land rehabilitation, discounted to the net present value. As of December 31, 2022, 2023, 2024
and June 30, 2025, we had provision for restoration, rehabilitation and environmental costs of
RMB3.6 million, RMB9.4 million, RMB10.7 million and RMB22.1 million, respectively. The
significant increase in our provision of restoration, rehabilitation and environmental costs was
primarily due to the costs incurred following the environmental incidents of Rong Xing in the
corresponding periods. Such amounts will be settled when rehabilitation is undertaken,
generally at the end of a project life, which ranges from 10 to 15 years.
FINANCIAL INFORMATION
– 327 –


--- page 339 ---
NET CURRENT (LIABILITIES)/ASSETS
The table below sets forth our current assets, current liabilities and net current liabilities
as of the dates indicated:
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
(RMB’000)
(unaudited)
Current assets:
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,417 182,357 432,129 423,557 821,613
Trade receivables at
amortized cost /H1118/H1118/H1118/H1118/H1118/H1118/H11181,174 491 264 2,204 2,568
Trade receivables at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,161 25,084 36,517 39,743 41,681
Prepayments, deposits
and other receivables /H1118 58,910 42,609 81,554 114,148 180,400
Time deposit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,000 6,050 6,050
Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111879,062 39,876 123,901 126,510 144,072
Total current assets /H1118/H1118/H1118/H1118238,724 290,417 679,365 712,212 1,196,384
Current liabilities:
Trade payables at
amortized cost /H1118/H1118/H1118/H1118/H1118/H1118/H111829,317 56,241 82,868 106,422 108,167
Trade payables
designated at FVTPL /H1118 28,481 82,036 271,527 191,248 382,287
Accrued expenses and
other payables /H1118/H1118/H1118/H1118/H1118/H1118/H111878,171 93,439 104,402 99,968 135,712
Contract liabilities /H1118/H1118/H1118/H1118/H111833,495 27,989 62,782 84,735 274,384
Income tax payable /H1118/H1118/H1118/H1118/H111811,176 10,855 34,848 39,131 36,699
Bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881,485 195,505 207,171 176,167 218,104
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118695 250 90 139 113
Financial liabilities at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118246 66 – 107 –
Total current liabilities /H1118 263,066 466,381 763,688 697,917 1,155,466
Net current
(liabilities)/assets /H1118/H1118/H1118/H1118(24,342) (175,964) (84,323) 14,295 40,918
FINANCIAL INFORMATION
– 328 –


--- page 340 ---
We had net current assets of RMB40.9 million as of October 31, 2025, consisting of
current assets of RMB1,196.4 million and current liabilities of RMB1,155.5 million, which
represented an increase of RMB26.6 million from our net current assets of RMB14.3 million
as of June 30, 2025. Such increase was primarily driven by (i) an increase of RMB398.1
million in inventories, mainly because we strategically procured additional raw materials in
preparation for the forthcoming rainy season in Africa; (ii) RMB66.3 million in prepayments,
deposits and other receivables, mainly attributable to the increases in prepayments for
inventories, deposits in transit and input V A T receivables; and (iii) an increase of RMB17.6
million in cash and cash equivalents, partially offset by (i) an increase of RMB191.0 million
in trade payables designated at FVTPL as we procured more raw materials for production; (ii)
an increase of RMB189.6 million in contract liabilities, mainly attributable to the increase in
our copper cathode sales; and (iii) an increase of RMB41.9 million in bank and other
borrowings to support our business expansion; and (iv) an increase of RMB35.7 million in
accrued expenses and other payables, mainly attributable to an increase in dividends payable.
We had net current assets of RMB14.3 million as of June 30, 2025, consisting of current
assets of RMB712.2 million and current liabilities of RMB697.9 million, which represented an
increase of RMB98.6 million from our net current liabilities of RMB84.3 million as of
December 31, 2024. The increase was mainly driven by (i) an increase of RMB32.6 million in
prepayments, deposits and other receivables, primarily due to (a) an increase in tax refund; (b)
the increased listing expenses; and (c) the prepayment in connection with the cobalt hydroxide
projects in Anhui Province; and (ii) an increase of RMB3.2 million in trade receivables
measured at FVTPL, mainly in line with our revenue growth in the respective period, partially
offset by (i) an increase of RMB23.6 million in trade payables at amortized cost following our
increased raw materials procurement corresponding to our enhanced production capacity; and
(ii) an increase of RMB22.0 million in contract liabilities, mainly due to the increase in our
orders from customers.
We had net current liabilities of RMB84.3 million as of December 31, 2024, consisting
of current assets of RMB679.4 million and current liabilities of RMB763.7 million, which
represented a decrease of RMB91.6 million from our net current liabilities of RMB176.0
million as of December 31, 2023. Such reduction of net current liabilities as of December 31,
2024 as compared with that as of December 31, 2023 was primarily attributable to (i) an
increase in inventories of RMB249.8 million as the operations of our DR Congo copper smelter
I ramped up during the year; (ii) an increase of cash and cash equivalents of RMB84.0 million,
mainly caused by the cash inflow from operation; and (iii) an increase of prepayment, deposits
and other receivables totalled of RMB38.9 million, mainly attributed to the expansion of our
operations in DR Congo. The aforementioned increase of current assets as of December 31,
2024 as compared with that as of December 31, 2023 was partially offset by an increase of
current liabilities of RMB297.3 million primarily caused by the increase in trade payables
(including those recognized at amortized costs and FVTPL) of RMB216.1 million as a result
of the increase in purchases as our production in DR Congo ramped up during the year.
FINANCIAL INFORMATION
– 329 –


--- page 341 ---
We had net current liabilities of RMB176.0 million as of December 31, 2023, consisting
of current assets of RMB290.4 million and current liabilities of RMB466.4 million, which
represented an increase of RMB151.6 million from our net current liabilities of RMB24.3
million as of December 31, 2022. The increase of the net current liabilities as of December 31,
2023 as compared with that as of December 31, 2022 was primarily attributable to the increase
in our current liabilities of RMB203.3 million, primarily due to (i) an increase in short term
bank and other borrowings of RMB114.0 million for financing the construction of the Anhui
cobalt processing plant and the DR Congo copper smelter I; and (ii) an increase in trade
payables of RMB80.5 million as a result of the increase in purchases as our DR Congo copper
smelter I commenced operations. The increase in our current liabilities as of December 31,
2023 was partially offset by increase of the current assets of RMB51.7 million as of December
31, 2023 caused by the increase in inventories of RMB125.9 million since the commencement
of operation of our DR Congo copper smelter I in August 2023, partially offset by the decrease
in cash and cash equivalents of RMB39.2 million.
LIQUIDITY AND CAPITAL RESOURCES
Our business operations and expansion plans require a significant amount of capital,
including cash and cash equivalents as well as other working capital requirements. Historically,
we financed our capital expenditure and working capital requirements mainly through cash
generated from operations and bank and other borrowings. As of December 31, 2022, 2023,
2024 and June 30, 2025, we had cash and cash equivalents of RMB79.1 million, RMB39.9
million, RMB123.9 million and RMB126.5 million respectively.
Cash Flows
The following table sets forth a summary of our cash flows during the Track Record
Period:
Y ear ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
(RMB’000)
Net cash flows from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118202,180 43,329 292,558 111,533
Net cash flows used in
investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(200,686) (192,285) (171,001) (71,718)
Net cash flows from/(used in)
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,496 109,355 (38,406) (36,925)
Net increase/(decrease) in cash
and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H111851,990 (39,601) 83,151 2,890
Cash and cash equivalents at
the beginning of the year /H1118/H1118/H1118/H111827,001 79,062 39,876 123,901
FINANCIAL INFORMATION
– 330 –


--- page 342 ---
Y ear ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
(RMB’000)
Effect of foreign exchange rate
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871 415 874 (281)
Cash and cash equivalents at
the end of the year/period /H1118/H111879,062 39,876 123,901 126,510
Operating Activities
Cash flows from operating activities consist of profit before income tax adjusted for
certain non-cash or non-operating activities related items, primarily including depreciation of
property, plant and equipment, finance costs, share of losses of an associate, foreign exchange
differences, impairment losses on financial assets under ECL model. We derive our cash inflow
mainly from operating activities through sales of copper products from production and trading
of non-ferrous metal. Cash outflow from operating activities primarily consisted of payments
for procuring inventories, employee benefit expenses, and other operating expenses incurred
during our daily operations. We recorded net operating cash inflow from operating activities
throughout the Track Record Period.
Our net cash flow from operating activities was RMB111.5 million in the six months
ended June 30, 2025. This net cash inflow was attributable to profit before tax of RMB161.2
million, as adjusted to reflect non-cash or non-operating items, which consisted primarily of (i)
depreciation of property, plant and equipment of RMB25.5 million; (ii) impairment losses on
V A T receivables of RMB8.5 million; and (iii) finance costs of RMB8.0 million, partially offset
by (i) decrease in trade and other payables and accrued expenses of RMB58.2 million and (ii)
an increase in trade receivables and prepayments, deposits and other receivables of RMB22.6
million.
Our net cash from operating activities was RMB292.6 million in 2024. This net cash
inflow was attributable to profit before tax of RMB242.8 million, as adjusted to reflect
non-cash or non-operating items, which primarily consisted of (i) depreciation of property,
plant, equipment and right-of-use assets and amortization of intangible assets totalled
RMB42.4 million; (ii) finance cost of RMB26.9 million; (iii) increase in trade and other
payables and accrued expenses of RMB225.4 million; and (iv) the increase in contract
liabilities of RMB34.8 million. These were partially offset by the increase in inventories of
RMB247.0 million and the increase in trade receivables and prepayments, deposits, other
receivables totalled of RMB31.1 million.
FINANCIAL INFORMATION
– 331 –


--- page 343 ---
Our net cash from operating activities was RMB43.3 million in 2023. This net cash inflow
was attributable to (i) profit before tax of RMB26.0 million, as adjusted to reflect non-cash or
non-operating items, which primarily consisted of (i) depreciation of property, plant,
equipment and right-of-use assets and amortization of intangible assets totalled RMB21.5
million; (ii) net exchange losses of RMB19.7 million; (iii) impairment loss, net of reversal for
the input V A T receivables and financial assets under ECL model totalled RMB19.2 million; (iv)
finance costs of RMB13.4 million; and (v) the increase in trade and other payables and accrued
expenses of RMB98.5 million. These were partially offset by (i) the increase in inventories of
RMB125.8 million; and (ii) the increase in trade receivables and prepayment, deposits and
other receivables totalled RMB10.4 million.
Our net cash from operating activities was RMB202.2 million in 2022. This net cash
inflow was attributable to profit before tax of RMB93.9 million, as adjusted to reflect non-cash
or non-operating items, which primarily consisted of (i) share of losses of an associate of
RMB14.8 million; (ii) loss arising of fair value change of financial asset/liabilities at FVTPL
of RMB9.9 million; (iii) the increase in contract liabilities of RMB29.7 million; (iv) the
increase of trade and other payables and accrued expenses of RMB26.4 million; and (v) the
decrease in inventories of RMB24.8 million.
Investing Activities
Our cash used in investing activities mainly consisted of our cash used in purchases of
items of property, plant and equipment. During the Track Record Period, we have minimal cash
generated from investing activities.
Our net cash used in investing activities was RMB71.7 million in the six months ended
June 30, 2025, primarily attributable to the payment for the purchase of property, plant and
equipment and intangible assets of RMB72.1 million.
Our net cash used in investing activities was RMB171.0 million in 2024. This net cash
outflow was primarily due to the purchases of property, plant and equipment of RMB171.4
million.
Our net cash used in investing activities was RMB192.3 million in 2023. This net cash
outflow was primarily due to the purchases of property, plant and equipment of RMB192.7
million.
Our net cash used in investing activities was RMB200.7 million in 2022. This net cash
outflow was primarily due to the purchases of property, plant and equipment of RMB201.5
million.
FINANCIAL INFORMATION
– 332 –


--- page 344 ---
Financing Activities
Our cash used in financing activities mainly consisted of cash for dividends payment to
the Shareholders, repayment of bank and other borrowings and interest paid on bank and other
borrowings. Cash generated from financing activities mainly consisted of proceeds from bank
borrowings and issue of Shares.
Our net cash used in financing activities was RMB36.9 million in the six months ended
June 30, 2025, primarily due to (i) repayment of bank and other borrowings of RMB168.7
million and (ii) interest paid of RMB8.7 million, partially offset by the proceeds from bank and
other borrowings of RMB147.4 million.
Our net cash used in financing activities was RMB38.4 million in 2024. This net cash
outflow was primarily due to (i) repayment of bank and other borrowings of RMB458.7
million; (ii) dividend of RMB60.7 million paid to the Shareholders; and (iii) interest paid on
bank and other borrowings of RMB26.0 million. This net cash outflow was partially offset by
the proceeds from bank and other borrowings of RMB512.2 million.
Our net cash generated from financing activities was RMB109.4 million in 2023. This net
cash inflow was primarily contributed by the proceeds from bank and other borrowings of
RMB262.5 million, partially offset by the repayment of loans and other borrowings of
RMB137.9 million and interest paid of RMB12.3 million.
Our net cash generated from financing activities was RMB50.5 million in 2022. This net
cash inflow was primarily contributed by the proceeds from bank and other borrowings of
RMB100.2 million and the proceeds of RMB48.3 million received from the issuance of the
Shares, partially offset by the repayment of bank and other borrowings of RMB81.9 million.
WORKING CAPITAL SUFFICIENCY
During the Track Record Period, we met our working capital requirements mainly from
cash generated from operations and bank and other borrowings.
Taking into account the financial resources available to us, including cash flow from
operating activities and the estimated net proceeds from the Global Offering, our Directors are
of the view that we have sufficient working capital to meet our present requirements and for
the next 12 months from the date of this prospectus.
FINANCIAL INFORMATION
– 333 –


--- page 345 ---
INDEBTEDNESS AND CONTINGENT LIABILITIES
Indebtedness
During the Track Record Period, our indebtedness consisted of (i) lease liabilities; and (ii)
bank and other borrowings. The following table sets forth a breakdown of our indebtedness as
of the dates indicated:
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
(RMB’000)
(unaudited)
Included in current
liabilities
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118695 250 90 139 113
Bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881,485 195,505 207,171 176,167 218,104
Sub-total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,180 195,755 207,261 176,306 218,217
Included in non-current
liabilities
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118529 78 – 401 362
Bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,904 17,706 61,456 69,019 83,621
Sub-total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,433 17,784 61,456 69,420 83,983
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888,613 213,539 268,717 245,726 302,200
Bank and Other Borrowings
As of December 31, 2022, we had bank and other borrowings of RMB87.4 million with
annual interest rates ranged from 1.65% to 12%. Our bank and other borrowings increased to
RMB213.2 million as of December 31, 2023, primarily used for the construction of the DR
Congo and Anhui production plants. The annual interest rates of the bank and other borrowings
as of December 31, 2023 ranged from 1.65% to 10%.
Our bank and other borrowings increased by 26.0% to RMB268.6 million as of December
31, 2024 from RMB213.2 million as of December 31, 2023, primarily due to the draw down
of loans for financing our working capital and capital expenditures. The annual interest rates
of the bank and other borrowings as of December 31, 2024 ranged from 1.1% to 9.5%.
FINANCIAL INFORMATION
– 334 –


--- page 346 ---
Our bank and other borrowings further decreased by 8.7% to RMB245.2 million as of
June 30, 2025, primarily due to the decrease in other borrowings of RMB34.3 million. The
annual interest rates of the bank and other borrowings as of June 30, 2025 ranged from 1.1%
to 10%.
The following table sets forth a breakdown of the bank and other borrowings as of the
dates indicated:
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
(RMB’000)
(unaudited)
Bank loans:
Guaranteed by related parties
and/or third parties /H1118/H1118/H1118/H1118/H1118/H1118/H111839,055 61,084 66,098 67,066 21,921
Pledged by bank deposits of a
related party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,50 5––––
Secured by property, plant and
equipment, right-of-use assets
and trade receivables of our
Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,226 33,053 28,754 96,057 108,461
Guaranteed by related parties
and pledged by securities of
related parties, and secured by
property, plant and equipment
and right-of-use assets of our
Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 61,703 – –
Secured by bank deposits of our
Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,503 6,441 4,538
Unguaranteed and unsecured
bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,534 2,002 – 2,336 59,585
60,320 96,139 161,058 171,900 194,505
Other borrowings:
Guaranteed by related parties
and secured by inventories of
our Group from third parties /H1118 21,043 21,46 5–––
Unguaranteed and unsecured
loans from
third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,026 95,607 107,569 73,286 107,220
27,069 117,072 107,569 73,286 107,220
87,389 213,211 268,627 245,186 301,725
FINANCIAL INFORMATION
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--- page 347 ---
Our Directors confirm that there has been no material change in our indebtedness position
since October 31, 2025, being the latest practicable date for the purpose of the indebtedness
statement. As of the Latest Practicable Date, there was no material restrictive covenant in our
indebtedness which could significantly limit our ability to undertake additional debt or equity
financing, nor was there any breach of covenant during the Track Record Period and up to the
Latest Practicable Date. As of the Latest Practicable Date, except for bank borrowings, we did
not have plans for other material external debt financing.
As of October 31, 2025, we had unutilized banking facilities of RMB367.0 million. We
do not anticipate any changes to the availability of bank financing to finance our operations in
the future, although we cannot assure you that we will be able to access bank financing on
favorable terms or at all.
Lease Liabilities
Our lease liabilities mainly represented the amount to be paid by us as the lessee for the
leases of office premises. The following table sets forth the carrying amount of our lease
liabilities as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118529 78 – 401
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118695 250 90 139
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,224 328 90 540
Our lease liabilities as of December 31, 2022, 2023 and 2024 and June 30, 2025 was
RMB1.2 million, RMB0.3 million, RMB90.0 thousand and RMB0.5 million, respectively.
For a maturity analysis of our lease liabilities, see Note 31 to the Accountants’ Report
included in Appendix I to this prospectus.
Contingent Liabilities
As of June 30, 2025, we did not have any material outstanding debt securities, mortgage,
charges, debentures or other loan capital (issued or agreed to be issued), bank overdrafts, loans,
liabilities under acceptance or acceptance credits, or other similar indebtedness, leasing and
financial leasing commitments, hire purchase commitments, guarantees or other material
contingent liabilities.
FINANCIAL INFORMATION
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--- page 348 ---
CAPITAL EXPENDITURES AND CONTRACTUAL COMMITMENTS
Capital Expenditures
Our capital expenditures during the Track Record Period primarily consisted of
expenditures on property, plant and equipment and intangible assets. In 2022, 2023, 2024 and
the six months ended June 30, 2025, we had capital expenditure relating to purchases of
property, plant and equipment and intangible assets of RMB201.5 million, RMB192.7 million,
RMB171.4 million and RMB72.1 million, respectively.
We do not expect to incur additional capital expenditure in the year ended December 31,
2025.
Our actual capital expenditures may differ from the amounts set forth above due to
various factors, including our future cash flows, results of operations and financial conditions,
economic conditions, the availability of financing on terms acceptable to us and development
in the regulatory environment. In addition, we may incur additional capital expenditures from
time to time as we pursue new opportunities to expand our business in the future.
Capital Commitments
The following table sets forth our contractual capital commitments as of the dates
indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB’000)
Contracted, but not provided
for:
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118205,533 123,383 68,914 2,718
OFF-BALANCE SHEET ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet
transactions.
MATERIAL 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 our related parties and the market price during the relevant period. Upon the completion
of this Global Offering, we will comply with the relevant Listing Rules and adopt a more
prudent approach when reviewing and engaging related party transactions.
FINANCIAL INFORMATION
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--- page 349 ---
Transactions with Related Parties
During the Track Record Period, our transactions with related parties mainly comprised
(i) purchases of property, plant and equipment from an associate, Jiangxi Tungsten Jinxun
Resources Africa SAS; (ii) leasing of offices, staff dormitories and warehouse; and (iii) interest
income earned from an associate from provision of a loan. See Note 33 to the Accountants’
Report in Appendix I to this prospectus for details of transactions carried out with our related
parties during the Track Record Period.
It is the view of our Directors that each of the related party transactions set out in Note
33 of the Accountants’ Report in Appendix I to this prospectus (i) were conducted on normal
commercial terms and/or on terms not less favorable than terms available from Independent
Third Parties, which are considered fair, reasonable and in the interest of our Shareholders as
a whole; and (ii) do not distort our Track Record Period results or make our historical results
not reflective of future performance.
The following table sets forth our balances with related parties as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade in nature:
Trade payables at amortised
cost from Jiangwu Jinxun /H1118 230 1,277 – –
Non-trade in nature:
Gross amounts of other
receivables from an
associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,416 11,582 – –
Guarantees provided by Mr.
Y uan Rong, and/or Ms. Liu
Li and/or Ms. Y uan Mei
for bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,584 62,527 110,777 47,156
Our Directors confirm that all the guaranteed bank and other borrowings were released.
FINANCIAL INFORMATION
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--- page 350 ---
KEY FINANCIAL RATIOS
The following table sets forth certain of our key financial ratios as of the dates or for the
periods indicated:
Y ear ended December 31,
As of/For the
six months
ended
June 30,
2022 2023 2024 2025
Profitability ratios
Gross profit margin (%) (1) /H1118/H1118/H111826.8% 19.3% 20.8% 23.1%
Net profit margin (%) (2) /H1118/H1118/H1118/H111813.1% 4.3% 11.4% 14.0%
Return on equity (%) (3) /H1118/H1118/H1118/H1118/H111828.8% 7.8% 43.8% 22.4%
Return on assets (%) (4) /H1118/H1118/H1118/H1118/H111817.0% 3.8% 17.9% 9.5%
As of December 31,
As of/For the
six months
ended
June 30,
2022 2023 2024 2025
Liquidity ratios
Current ratio (times) (5) /H1118/H1118/H1118/H1118/H1118/H11180.9 0.6 0.9 1.0
Quick ratio (times) (6) /H1118/H1118/H1118/H1118/H1118/H1118/H11180.7 0.2 0.3 0.4
Capital adequacy ratio
Gearing ratio (%)
(7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824.6% 54.9% 50.2% 36.7%
Notes:
(1) Gross profit margin is calculated based on gross profit divided by revenue and multiplied by 100%.
(2) Net profit margin is calculated based on profit or loss for the period divided by revenue and multiplied
by 100%.
(3) Return on equity is calculated based on profit for the year/period divided by the arithmetic mean of the
opening and closing balances of total equity and multiplied by 100%.
(4) Return on assets is calculated based on profit for the year/period divided by the arithmetic mean of the
opening and closing balances of total assets and multiplied by 100%.
(5) Current ratio is calculated based on total current assets divided by total current liabilities.
(6) Quick ratio is calculated based on total current assets less inventories divided by total current liabilities.
(7) Gearing ratio is calculated based on total borrowings (including borrowings and lease liabilities) divided
by total equity multiplied by 100%.
FINANCIAL INFORMATION
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--- page 351 ---
Gross Profit Margin and Net Profit Margin
See “— Period to Period Comparison of Results of Operations” for a discussion of the
factors affecting our gross profit margin and net profit or loss margin during the respective
periods.
Return on Equity
Our return on equity decreased from 28.8% in 2022 to 7.8% in 2023, primarily due to a
significant decrease in net profit in 2023, mainly reflecting the decrease in our gross profit and
the increase in other losses, mainly arising from foreign exchange losses and impairment loss
in relation to a loan to an associate in 2023. Our return on equity increased from 7.8% in 2023
to 43.8% in 2024, primarily due to the increase in our net profit in 2024, reflecting an increase
in our revenue and gross profit and a decrease in foreign exchange loss. Our return on equity
further increased to 44.8% as projected in 2025, mainly due to an increase in our net profit in
the six months ended June 30, 2025.
Return on Assets
Our return on assets decreased from 17.0% in 2022 to 3.8% in 2023, primarily due to a
significant decrease in net profit in 2023, mainly reflecting the decrease in our gross profit and
the increase in other losses, mainly arising from foreign exchange losses and impairment loss
in relation to a loan to an associate in 2023. Our return on assets increased from 3.8% in 2023
to 17.9% in 2024, primarily due to the increase in our net profit in 2024, reflecting an increase
in our revenue and gross profit and a decrease in foreign exchange loss. Our return on assets
further increased to 19% as projected in 2025, mainly due to the increased net profit in the six
months ended June 30, 2025.
Current Ratio
Our current ratio decreased from 0.9 times as of December 31, 2022 to 0.6 times as of
December 31, 2023, primarily due to the significant increase in our current liabilities, mainly
reflecting an increase in bank and other borrowings. Our current ratio increased from 0.6 times
as of December 31, 2023 to 0.9 times as of December 31, 2024, primarily as the increase in
our current assets outpaced that for our current liabilities. In 2024, we purchased more
inventories in view of our expanded production capacity. Our current ratio further increased to
1.0 for the six months ended June 30, 2025, mainly due to an increase in prepayments, deposits
and other receivables and a decrease in trade payables measured at FVTPL.
FINANCIAL INFORMATION
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--- page 352 ---
Quick Ratio
Our quick ratio decreased from 0.7 times as of December 31, 2022 to 0.2 times as of
December 31, 2023, primarily due to the significant increase in our current liabilities, mainly
reflecting an increase in bank and other borrowings. Our quick ratio remained stable at 0.2
times and 0.3 times as of December 31, 2023 and 2024, respectively. Our quick ratio further
remained relatively stable at 0.4 times for the six months ended June 30, 2025.
Gearing Ratio
Our gearing ratio increased from 24.6% as of December 31, 2022 to 54.9% as of
December 31, 2023, mainly attributable to the increase in our bank and other borrowings. Our
gearing ratio remained stable at 54.9% and 50.2% as of December 31, 2023 and 2024,
respectively. Our gearing ratio further decreased to 36.7% for the six months ended June 30,
2025, mainly due to a decrease in our bank and other borrowings.
FINANCIAL RISKS
We are exposed to a variety of financial risks, including credit, liquidity, commodity and
currency risks as set out below. We manage and monitor these exposures to ensure appropriate
measures are implemented on a timely and effective manner. For further details, see Note 31
in the Accountants’ Report set out in Appendix I to this prospectus.
Credit Risk
Credit risk refers to the risk that our counterparties default on their contractual
obligations resulting in financial losses to us. Our credit risk exposures are primarily
attributable to trade receivables at amortized cost and trade receivables at FVTPL, other
receivables, time deposit and bank balances. In order to minimize the credit risk, our
management continuously monitors the level of exposure to ensure that follow up action is
taken to recover overdue debts.
Except for trade receivables at FVTPL, we performed impairment assessment for
financial assets and other items under ECL model individually.
As of December 31, 2022, 2023, 2024 and June 30, 2025, our trade receivables at FVTPL
were debtors with an aggregate amount of RMB43,161,000, RMB25,084,000, RMB36,517,000
and RMB39,743,000. As of the same dates, included in our trade receivables at amortized cost
balance were debtors with an aggregate amount of RMB1,244,000, RMB517,000,
RMB278,000 and RMB2,316,000 and were assessed for impairment at an amount equal to
lifetime ECLs. As of December 31, 2022, 2023, 2024 and June 30, 2025, impairment allowance
of RMB70,000, RMB26,000, RMB14,000 and RMB112,000 were made on these debtors.
FINANCIAL INFORMATION
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--- page 353 ---
Our exposure to credit risk is influenced mainly by the individual characteristics of each
customer rather than the industry in which the customers operate. As of December 31, 2022,
2023, 2024 and June 30, 2025, 59%, 27%, 74% and 65% of the total trade receivables at
FVTPL, respectively, was due from our largest debtor from sales of copper products, and
100%, 85%, 98% and 96% of the total trade receivables at FVTPL, respectively, was due from
the five largest debtors from sales of copper products; and 45%, 62%, 100% and 57% of the
total trade receivables at amortized cost, respectively, was due from our largest debtor from
sales of goods other than copper products, and 100%, 100%, 100% and 100% of the total trade
receivables at amortized cost, respectively, was due from the five largest debtors from sales of
goods other than copper products. In order to manage the credit risk, we continuously monitor
the level of exposure by ongoing review of credit records of customers to take follow-up
actions on the balances of trade receivables. These customers are large and reputable in the
market and they have been trading us with good settlement history.
Credit risk on bank balances and the time deposit is limited because the counterparty
banks and financial institutions are with good reputation.
See Note 31 in the Accountants’ Report set out in Appendix I to this prospectus for further
details.
Liquidity Risk
Our policy is to regularly monitor our liquidity requirements and compliance with lending
covenants, to ensure that we maintain sufficient reserves of cash and adequate committed lines
of funding from major financial institutions to meet its liquidity requirements in the short and
longer term. See Note 31 in the Accountants’ Report set out in Appendix I to this prospectus
for further details.
Commodity Risk
Our commodity price risk is mainly the exposure to fluctuations in the prevailing market
price of copper which are the major commodities purchased, produced and sold by us. To
minimize this risk, we enter into copper futures contracts and provisional price arrangement to
manage our exposure in relation to forecasted sales of copper products, forecasted purchases
of copper concentrates, inventories and firm commitments to sell our copper products.
See Note 31 in the Accountants’ Report set out in Appendix I to this prospectus for further
details.
FINANCIAL INFORMATION
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--- page 354 ---
Currency Risk
Our transactional exchange rate risk exposures mainly arising from sales or purchases by
subsidiaries in currencies other than the subsidiaries’ functional currencies. We have
subsidiaries using U.S. dollar and RMB as their functional currencies. These subsidiaries have
transactions in currencies other than their functional currencies. In addition, we have exchange
rate exposures arising from foreign currency borrowings. We adopt an overall management on
our foreign exchange business.
DIVIDENDS
We are incorporated under the laws of the PRC. 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.
Under the applicable PRC laws and regulations, a PRC incorporated company is required to set
aside at least 10% of its after-tax profits each year, after making up previous years’
accumulated losses, if any, to contribute to certain statutory reserve funds until the aggregate
amount contributed to such funds reaches 50% of its registered capital. The company may pay
dividends out of after-tax profits after making up for accumulated losses and contributing to
statutory reserve funds as mentioned above.
In May 2022, stock dividends of 0.5 shares per share and cash dividends of RMB0.1 per
share in respect of the year ended December 31, 2021, aggregating to 34,314,511 shares and
RMB6,863,000, were approved by the shareholders of the Company. In May 2023, cash
dividends of RMB0.04 per share in respect of the year ended December 31, 2022, aggregating
to RMB4,412,000, was approved by the shareholders of the Company. In May 2024, cash
dividends of RMB0.05 per share in respect of the year ended December 31, 2023, aggregating
to RMB5,515,000, was approved by the shareholders of the Company. In August 2024, cash
dividends of RMB0.5 per share in respect of the six months ended June 30, 2024, aggregating
to RMB55,148,000 was approved by the shareholders of the Company. Subsequent to June 30,
2025, an interim dividend of RMB0.28 per share, in an aggregate amount of RMB30,883,000,
which was approved by the extraordinary general meeting convened on September 12, 2025.
We expect to pay a dividend no less than 20% of the profit after tax after Listing each
year, subject to our results of operations, cash flows, financial position, statutory and
regulatory restrictions on the dividends paid by us, future prospects and others factors which
we consider relevant. No dividend shall be declared or payable except out of our profits and
reserves lawfully available for distribution. Our Directors have the absolute discretion to
recommend any dividend subject to our constitutional documents and the relevant laws. We
cannot assure you that our Company will be able to declare dividends of any amount each year
or in any year.
FINANCIAL INFORMATION
– 343 –


--- page 355 ---
DISTRIBUTABLE RESERVES
As of June 30, 2025, our Company had retained profits of RMB134.0 million, which
could be distributed subject to current articles of association of the Company and the PRC
Company Law.
LISTING EXPENSES
Our listing expenses mainly include underwriting commissions, professional fees paid to
legal advisors, the Reporting Accountants and other professional parties for their services
rendered in relation to the Listing and the Global Offering.
Based on the Offer Price of HK$30.0 per Share, the total estimated listing expenses in
relation to the Global Offering are RMB54.8 million (HK$60.4 million), assuming the
Over-allotment Option is not exercised, which constitute approximately 5.5% of the gross
proceeds. Our total listing expenses consist of (i) underwriting-related expenses and fees
(including underwriting commissions, Stock Exchange trading fee, SFC and AFRC transaction
levy) of RMB25.1 million (HK$27.7 million); and (ii) non-underwriting-related expenses of
RMB29.7 million (HK$32.7 million), including (a) fees payable to the Sole Sponsor, legal
advisors and Reporting Accountants of RMB20.0 million (HK$22.1 million) and (b) other fees
and expenses of RMB9.7 million (HK$10.6 million). During the Track Record Period, we
recorded listing expenses as profit and loss of RMB0.2 million and as other receivables of
RMB10.9 million. Among the total listing expenses, approximately HK$6.1 million is expected
to be charged to profit or loss for the year ended December 31, 2025, and approximately
HK$54.1 million directly attributable to the issue of the Shares is expected to be deducted from
equity upon the completion of the Global Offering.
Our Directors do not expect that such expenses will have a material adverse effect on our
results of operations for the year ended December 31, 2025.
FINANCIAL INFORMATION
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--- page 356 ---
UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted net tangible assets prepared in
accordance with Rule 4.29 of the Listing Rules is set out to show the effect of the Global
Offering on our consolidated net tangible assets attributable to equity shareholders of our
Company as of June 30, 2025, as if the Global Offering had taken place on that date. The
unaudited pro forma statement of adjusted net tangible assets has been prepared for illustrative
purpose only and, because of its hypothetical nature, it may not give a true picture of the
financial position of our Group had the Global Offering been completed as of June 30, 2025
or at any future date. The unaudited pro forma statement of adjusted net tangible assets is based
on the unaudited consolidated total net tangible assets of our Group attributable to the owners
of the Company as of June 30, 2025 derived from the Accountants’ Report in set out in
Appendix I to this prospectus, and adjusted as follows:
Consolidated net
tangible assets of the
Company attributable
to the shareholders of
the Company as of
June 30, 2025 (1)
Estimated net
proceeds from the
Global Offering (2)
Unaudited pro
forma adjusted net
tangible assets
attributable to
equity shareholders
of the Company
Unaudited pro forma
adjusted net tangible
assets attributable to
equity shareholders of
the Company per
Share (3)(4)
(RMB’000) (RMB’000) (RMB in million) (RMB) (HK$
equivalent)
Based on an Offer Price
of HK$30.00 per
H Share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118659,107 945,803 1,604,910 10.91 12.03
Notes:
(1) The consolidated net tangible assets attributable to equity shareholders of our Company as of June 30,
2025 is based on the total equity attributable to equity shareholders of our Company of
RMB668,741,000, after deducting intangible assets of RMB9,634,000, which is extracted from the
Accountants’ Report set out in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offering are calculated based on the Offer Price of HK$30
per H Share, and 36,765,600 Shares to be issued under the Global Offering, after deduction of the
underwriting fees and other expenses related to the Global Offering paid or payable by our Group
(excluding the listing expenses that have been charged to profit and loss up to June 30, 2025), and do
not take into account any Shares which may be issued upon the exercise of the Over-allotment Option.
(3) The unaudited pro forma adjusted net tangible assets per Share is arrived at after the adjustments
referred to in the preceding paragraphs and on the basis that 147,062,243 Shares were in issue
immediately following the completion of the Global Offering, and does not take into account any Shares
which may be issued upon the exercise of the Over-allotment Option.
(4) The estimated net proceeds from the Global Offering and the unaudited pro forma adjusted net tangible
assets per Share are converted from or into Hong Kong dollars (“HK$”) at an exchange rate of
RMB1.0000 to HK$1.1025 prevailing on December 22, 2025. No representation is made that US$
amounts have been, could have been or may be converted to HK$, or vice versa, at that rate or at any
other rate.
FINANCIAL INFORMATION
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--- page 357 ---
(5) No adjustment has been made to reflect any trading result or other transactions of our Group entered into
subsequent to June 30, 2025, including but not limited to the interim dividend for the six months ended
June 30, 2025 of RMB0.28 per share, in an aggregate amount of RMB30,883,000 which was approved
by extraordinary general meeting on September 12, 2025. The unaudited pro forma adjusted net tangible
assets attributable to equity shareholders of the Company per Share would have been decreased by
HK$0.23 per Share if the dividend declaration had been accounted for as of June 30, 2025.
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Recent Development
Subsequent to June 30, 2025, and up to October 31, 2025, our business experienced
steady growth, with all key operational and financial metrics continuing to show robust
improvement. Specifically, the copper cathode production from July to October 2025 increased
by approximately 23.4%, compared to the same period in 2024; and for the ten months ended
October 31, 2025, the copper cathode production increased by approximately 46.0%, compared
to the same period in 2024. Furthermore, the copper cathode sales volume from July to October
2025 increased by approximately 10.3%, compared to the same period in 2024; and for the ten
months ended October 31, 2025, the copper cathode sales volume increased by approximately
42.7%, compared to the same period in 2024. Our revenue from July to October 2025 increased
by more than 10%, compared to the same period in 2024; and for the ten months ended October
31, 2025, our revenue increased by more than 30%, compared to the same period in 2024. Our
sales and revenue growth rates were lower than production growth rates from July to October
2025 and the ten months ended October 31, 2025, primarily due to (i) the typical time lag
between product production and sales; and (ii) our increased adoption of the direct delivery
model in which we are responsible for logistics and bear logistics costs, reflecting our efforts
to (a) adapt to domestic market demands by swiftly responding to customers’ immediate needs
and reducing intermediate processing steps; (b) lower overall costs by eliminating the need to
coordinate export customs clearance, short-distance transfers to carriers, and other processes
that may incur additional miscellaneous fees, while adopting a bulk shipping strategy; and (c)
mitigate international trade risks by establishing fixed transportation routes to ship products in
bulk. We anticipate that products produced from July to October 2025 will be gradually sold
and recognized as revenue in the fourth quarter. Additionally, the construction of DR Congo
copper smelter II commenced as scheduled in September, and is currently progressing
smoothly: site clearance has been completed, construction of the main production workshops
is advancing in an orderly manner, and the procurement process for large-scale equipment has
been initiated and is proceeding according to our construction plan.
FINANCIAL INFORMATION
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--- page 358 ---
No Material Adverse Change
Our Directors confirm that, up to the date of this prospectus, (i) there had been no
material adverse change in our business, the industry where we operate, or market or regulatory
environment to which we are subject; (ii) there has been no material adverse change in our
financial or trading position or prospects since June 30, 2025, being the date of the latest
audited consolidated financial position of our Group as set out in the Accountants’ Report in
Appendix I to this prospectus; or (iii) there has been no event since June 30, 2025 that would
materially affect the information shown in the Accountants’ Report set forth in Appendix I to
this prospectus.
DISCLOSURE REQUIRED UNDER THE LISTING RULES
We confirm that, as of the Latest Practicable Date, there were no circumstances that
would give rise to a disclosure requirement under Rules 13.13 to 13.19 in Chapter 13 of the
Listing Rules upon the Listing of the Shares on the Stock Exchange.
FINANCIAL INFORMATION
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--- page 359 ---
FUTURE PLANS
See “Business — Business Strategies” for a detailed description of our future plans.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$1,042.6 million, assuming an Offer Price of HK$30.0 per Offer Share, after deducting the
underwriting commissions and estimated expenses paid or payable by us in connection with the
Global Offering and assuming that the Over-allotment Option is not exercised.
In line with our strategies, we intend to apply the net proceeds from the Global Offering
for the following purposes and in the amounts set forth below:
 approximately 80% of the net proceeds, or HK$834.1 million, will be used to
expand our core operations, including:
(i) approximately 25% of the net proceeds, or HK$260.7 million, will be used for
the upgrade of the hydrometallurgical processing capability of our DR Congo
copper smelter I, as well as the improvement of the production yield of its
cobalt hydroxide production line, including:
(a) approximately 20.0%, or HK$208.5 million, will be allocated for the
procurement of equipment such as processing equipment, electrical
equipment, and environmental protection equipment; and
(b) approximately 5.0%, or HK$52.1 million, will be allocated for the
deployment of new equipment, including installation, construction,
surveying and design, permits, and personnel training.
(ii) approximately 20% of the net proceeds, or HK$208.5 million, will be used for
equipment procurement and daily operations of the facility in Anhui Province.
Specifically, we plan to (a) procure new equipment such as degreasing
machine, product drying system, automated product packaging system,
baghouse dust collection system, and condensate deep purification systems; (b)
make payments for previously acquired equipment and the construction
project; and (c) procure raw materials and auxiliary materials such as cobalt
hydroxide, flocculants, and extractants;
(iii) approximately 20% of the net proceeds, or HK$208.5 million, will be used for
strategic acquisitions. As of the Latest Practicable Date, we had not identified
or committed to any acquisition targets; and
FUTURE PLANS AND USE OF PROCEEDS
– 348 –


--- page 360 ---
(iv) approximately 15% of the net proceeds, or HK$156.4 million, will be used to
improve and expand our R&D center in Kunming to further enhance our R&D
capabilities, attract local talents and contribute local employment. We plan to
purchase or lease new property with a total gross floor area of approximately
15,000 square meters to establish our first comprehensive R&D center in
Kunming. Under the management of our headquarters, the R&D center will
serve as our innovation engine and carry out requisite R&D activities to
support our expanding R&D activities.
The establishment of our first R&D center not only aims to narrow a critical
gap between our production and R&D, but resonates deeply with our strategic
shift from experience-driven to technology-driven approaches. Given our
upstream resource footprint across Zambia, DR Congo and other countries
continues to expand, relying solely on our prior production experience is
insufficient to cater to the evolving technical challenges. Therefore, we believe
that establishing an advanced R&D center and leveraging core technologies
marks an imperative step taken by us to transform our overseas resource
opportunities into sustained industrial and cost advantages.
We plan to leverage the R&D center to achieve: (i) core technology
breakthroughs by focusing primarily on green and efficient mineral processing
and smelting technologies; (ii) R&D of advanced metals such as advanced
copper-based materials. Advanced copper-based materials refer to copper-
based materials that exhibit superior properties including higher strength,
electrical conductivity, thermal conductivity, elasticity, corrosion resistance,
machinability, or overall performance than pure copper materials or traditional
alloys. These advanced copper-based materials primarily include high-
strength, high-conductivity copper alloys, corrosion-resistant copper alloys,
wear-resistant copper alloys, ultra-high-strength elastic copper alloys, high-
performance electronic copper foil, copper-based thermal management
materials, specialty copper products, and copper materials for new energy
applications. As a critical foundational material with extensive applications,
advanced copper-based materials are widely used across sectors including
electronics and information technology, aviation, aerospace, energy and power,
transportation, pharmaceuticals and chemicals, and marine engineering. Thus,
we anticipate that the development of such advanced copper-based materials
could help us to (a) mitigate risks associated with industry cyclical fluctuations
as we believe advanced copper-based materials demonstrate robust demand
growth driven by their extensive applications in emerging industries; and (b)
unlock future growth potential by leveraging rapid technological iteration and
vast market opportunities within these emerging industries; (iii) resources
cycling by way of discovering recovery technologies for valuable metals from
waste residues to tailings to advance circular economy and reduce
environmental impact; and (iv) process optimization and cost-efficiency
through continuous refining end-to-end processes from mining to minerals
through systematic R&D in optimizing production costs.
FUTURE PLANS AND USE OF PROCEEDS
– 349 –


--- page 361 ---
 approximately 10% of the net proceeds, or HK$104.3 million, will be used to
repay certain of our interest-bearing bank borrowings with an aggregate
principal amount of approximately HK$105.8 million, which were used as
working capital. The interest rates for such borrowings range from
approximately 1.10% to 9.50%, with maturity dates spanning from February
2026 to September 2026.
 approximately 10% of the net proceeds, or HK$104.3 million, will be used for
working capital and general corporate purposes.
If the Over-allotment Option is fully exercised, the additional net proceeds that we will
receive will be approximately HK$161.3 million (assuming an Offer Price of HK$30.0 per
Offer Share). In the event that the Over-allotment Option is exercised, we intend to apply the
additional net proceeds to the above purposes on a pro rata basis.
To the extent that our proceeds are not sufficient to fund the purposes set out above, we
intend to fund the balance through a variety of means, including cash generated from
operations, bank loans and other borrowings.
If any part of our plan does not proceed as planned for reasons such as changes in
government policies that would render any of our plans not viable, or the occurrence of force
majeure events, our Directors will carefully evaluate the situation and may reallocate the net
proceeds from the Global Offering. We will issue an appropriate announcement if there is any
material change to the above proposed use of proceeds.
To the extent that the net proceeds of the Global Offering are not immediately used for
the purposes described above, and to the extent permitted by the relevant laws and regulations,
we will only deposit the proceeds in short-term interest-bearing accounts at licensed
commercial banks and/or other authorized financial institutions (as defined under SFO or
applicable laws and regulations in the other jurisdictions).
FUTURE PLANS AND USE OF PROCEEDS
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--- page 362 ---
THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a “ Cornerstone
Investment Agreement ”, and together the “ Cornerstone Investment Agreements ”) with the
cornerstone investors set out below (each a “ Cornerstone Investor ”, and together the
“Cornerstone Investors ”), pursuant to which the Cornerstone Investors have agreed to,
subject to certain conditions, subscribe at the Offer Price for such number of Offer Shares
(rounded down to the nearest whole board lot of 200 Shares) that may be subscribed for with
an aggregate amount of approximately US$60.26 million (equivalent to approximately
HK$468.84 million) (exclusive of brokerage fee, the SFC transaction levy, the AFRC
transaction levy and the Stock Exchange trading fee) (the “ Cornerstone Placing ”).
Based on the Offer Price of HK$30.00 per H Share, the total number of Offer Shares to
be subscribed by the Cornerstone Investors would be 15,627,200 Offer Shares, representing
approximately 42.50% of the Offer Shares pursuant to the Global Offering (assuming the
Over-allotment Option is not exercised) and approximately 36.96% of the Offer Shares
pursuant to the Global Offering (assuming the Over-allotment Option is fully exercised).
Our Company is of the view that, (i) the Cornerstone Placing will ensure a reasonable size
of solid commitment at the beginning of the marketing period of the Global Offering and will
provide confidence to the market; and (ii) by leveraging on the Cornerstone Investors’ industry
reputation and investment experience, the Cornerstone Placing will help raise the profile of our
Company and to signify that such investors have confidence in our business and prospect. Our
Company became acquainted with each of the Cornerstone Investors through the business
network of our Group or through introduction by business partners of our Company or the
Underwriters.
The Cornerstone Placing will form part of the International Offering, and save as
otherwise obtained consent from the Stock Exchange, the Cornerstone Investors will not
subscribe for any Offer Shares under the Global Offering (other than pursuant to the
Cornerstone Investment Agreements). The Offer Shares to be subscribed by the Cornerstone
Investors will rank pari passu in all respects with the fully paid Shares in issue following the
Global Offering and will be counted towards the public float of our Company under Rule
19A.13A of the Listing Rules. Immediately following the completion of the Global Offering,
the Cornerstone Investors will not, by virtue of their cornerstone investments, have any Board
representation in our Company; and none of the Cornerstone Investors will become a
substantial Shareholder of our Company. Other than a guaranteed allocation of the relevant
Offer Shares at the Offer Price, the Cornerstone Investors do not have any preferential rights
under each of their respective Cornerstone Investment Agreements, as compared with other
public Shareholders. There are no side arrangements or agreements between our Company and
the Cornerstone Investors or any benefit, direct or indirect, conferred on the Cornerstone
Investors by virtue of or in relation to the Listing, other than a guaranteed allocation of the
relevant Offer Shares at the Offer Price, following the principles as set out in Chapter 4.15 of
the Guide for New Listing Applicants.
CORNERSTONE INVESTORS
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--- page 363 ---
To the best knowledge of our Company after making reasonable enquiries, (i) save for
Glencore AG which is a customer of the Company, each of the Cornerstone Investors is an
Independent Third Party; (ii) none of the Cornerstone Investors is accustomed to take
instructions from our Company, our Directors, chief executive of our Company, Controlling
Shareholders, substantial Shareholders or existing Shareholders or any of its subsidiaries or
their respective close associates in relation to the acquisition, disposal, voting, or other
disposition of Shares registered in its name or otherwise held by it; and (iii) none of the
subscription of the relevant Offer Shares by any of the Cornerstone Investors is financed by our
Company, our Directors, chief executive of our Company, Controlling Shareholders,
substantial Shareholders or existing Shareholders or any of its subsidiaries or their respective
close associates. As confirmed by each of the Cornerstone Investors, their subscription under
the Cornerstone Placing would be financed by their own internal resources. Each of the
Cornerstone Investors has confirmed that all necessary approvals have been obtained with
respect to the Cornerstone Placing and that no specific approval from any stock exchange (if
relevant) or its shareholders is required for the relevant cornerstone investment.
All of the Cornerstone Investors have confirmed that they have sufficient funds to settle
the investment amounts and they will pay and settle in full for the relevant Offer Shares that
they have subscribed before dealings in the Offer Shares commence on the Stock Exchange.
Certain Cornerstone Investor has agreed that the Company and the Sponsor-Overall
Coordinator in its sole discretion may defer the delivery of all or part of the Offer Shares it will
subscribe to on a date later than the Listing Date. There will be no deferred settlement of the
Offer Shares to be subscribed by the Cornerstone Investors. Where delayed delivery takes
place, such Cornerstone Investor that may be affected by such delayed delivery arrangement
has agreed that it shall nevertheless pay for the relevant Offer Shares in full before the Listing.
Such delayed delivery arrangement is in place to facilitate the over-allocation in the
International Offering. There will be no delayed delivery if there is no over-allocation in the
International Offering.
Details of the actual number of Offer Shares to be allocated to the Cornerstone Investors
will be disclosed in the allotment results announcement of our Company to be published on or
around January 8, 2025.
THE CORNERSTONE INVESTORS
The information about our Cornerstone Investors set forth below has been provided by
our Cornerstone Investors in connection with the Cornerstone Placing.
CORNERSTONE INVESTORS
– 352 –


--- page 364 ---
Glencore AG
Glencore International AG (“ Glencore AG ”) is a wholly-owned subsidiary of Glencore
PLC. Glencore PLC is listed on the London Stock Exchange, with a secondary listing on the
Johannesburg Stock Exchange and is one of the world’s largest global diversified natural
resource companies and a major producer and marketer of more than 60 commodities. Through
a network of assets, customers and suppliers that spans the globe, Glencore PLC produce,
process, recycle, source, market and distribute commodities that meet current energy needs. As
of the Latest Practicable Date, there was no single shareholder who has a beneficial ownership
interest of 30% or more in Glencore PLC.
Glencore AG became our customer in 2025, and entered into multiple transactions with
us in relation to the sale of copper cathodes with an aggregate of transaction amount less than
3% of our total revenue based on our management account for the period of ten months ended
October 31, 2025. To strengthen our business cooperation with Glencore AG, we entered into
an offtake agreement in November 2025 with Glencore AG pursuant to which Glencore AG
will purchase copper cathodes from our Group, which was not conditional upon the Offer
Shares subscription under the International Offering. The price of copper cathodes shall be
determined with reference to the market price by using the applicable copper cathodes pricing
indices, which is in line with our pricing policy as well as the pricing of our sales with our other
customers. Our Directors are of the view that the transactions on the sales of copper cathodes
with Glencore AG were entered into on an arm’s length basis, on normal commercial terms and
in the ordinary course of business of our Group with the benefit of maintaining a long-term and
stable customer.
Stoneylake Global
Stoneylake Global Alpha Fund (“ Stoneylake Global ”) is an exempted company
incorporated in the Cayman Islands with limited liability in September 2020. The principal
investment objective of Stoneylake Global is to maximize long-term capital growth through
active investment in the financial markets, and it maintains a well-distributed shareholder base
with no ultimate beneficial owner holding 30% or more of the ownership interest in Stoneylake
Global. Stoneylake Global is an investment fund managed on a discretionary basis by its fund
manager, Stoneylake Asset (Cayman) Limited, of which Mr. Zhang Fan ( ੵω), an Independent
Third Party, holds more than 30% ownership interests therein. Save for Mr. Zhang, there is no
other beneficial owner holding 30% or more of the ownership interest in Stoneylake Asset
(Cayman) Limited.
North Rock
N R1S P (“NR 1 SP”) is a hedge fund and segregated portfolio of North Rock SPC (the
“North Rock Fund ”), which is an exempted company incorporated in the Cayman Islands and
registered as a segregated portfolio company under the Cayman Companies Act (as amended).
The investment program of the North Rock Fund, including NR 1 SP , is managed with
complete discretion by its investment manager, North Rock Capital Management, LLC (“ North
CORNERSTONE INVESTORS
– 353 –


--- page 365 ---
Rock ”), an Independent Third Party. North Rock is an investment management firm built upon
a global multi-PM investment platform. North Rock deploys capital across a diversified set of
relative value fundamental and quantitative equity focused portfolio manager teams (“ PM
Teams”). They principally seek to partner with sector and regional specialists that possess deep
experience in a defined universe of securities and utilize that specialization and focus to pursue
long term sustainable alpha. The focus of North Rock is to harness and manage the combined
prowess of PM Teams to achieve high quality returns through idiosyncratic risk, with low
dependence on market direction. Since the strategy’s launch in March 2013, North Rock has
grown to approximately US$5.7 billion in assets under management across more than 50
underlying PM Teams today. As of the Latest Practicable Date, there was no ultimate beneficial
owner who has 30% or more beneficial ownership in NR 1 SP .
ChinaAMC (HK)
China Asset Management (Hong Kong) Limited (“ ChinaAMC (HK) ”) is a wholly-owned
subsidiary of China Asset Management Co., Ltd., (“ ChinaAMC ”), which is owned as to 62.2%
by CITIC Securities Company Limited (a company listed on the Shanghai Stock Exchange with
stock code 600030 and on the Hong Kong Stock Exchange with stock code 6030). No other
shareholder holds 30% or more equity interest in ChinaAMC. ChinaAMC (HK) will hold the
Offer Shares subscribed through the Cornerstone Placing in its capacity as the discretionary
fund manager on behalf of underlying clients, each of which is, to the best knowledge and
belief and after due enquiry of ChinaAMC (HK), an Independent Third Party, ChinaAMC
(HK), CLSA Limited and the companies which are members of the same group of CLSA
Limited. No one holds 30% or more interest in any of the underlying funds of ChinaAMC
(HK). As a top Chinese fund management company in Hong Kong, ChinaAMC (HK) is
committed to developing offshore and cross-border asset management businesses by leveraging
the expertise of its experienced investment and research teams and its shareholder companies’
resources, services and connections in Mainland China. ChinaAMC provides a full range of
services to retail and institutional investors home and abroad, covering equity, fixed income,
money markets, etc. ChinaAMC is one of the largest asset managers in China and provides
services to National Social Security Fund, corporate pensions, separate accounts, sovereign
funds in Europe, America, and Asia, central banks, pensions, banks, asset managers, securities
companies and other overseas institutional clients.
CITIC Securities Company Limited is the holding company of CLSA Limited, one of the
Overall Coordinators and Underwriters of the Global Offering. ChinaAMC (HK) is a member
of the same group of companies as CLSA Limited and therefore is a “connected client” (as
defined under Appendix F1 to the Listing Rules) of CLSA Limited. One of the Hong
Kong-based public funds participating in the cornerstone investment under the management of
ChinaAMC (HK) is distributed by Futu Securities International (Hong Kong) Limited and
ultimately 74.29% held by clients of Futu Securities International (Hong Kong) Limited, one
of our Underwriters of the Global Offering. Therefore, the participation of ChinaAMC (HK)
as a cornerstone investor would also constitute an allocation to “connected client” of Futu
Securities International (Hong Kong) Limited. The Company has applied to the Stock
Exchange for, and the Stock Exchange has granted, its consent under paragraph 1C of
CORNERSTONE INVESTORS
– 354 –


--- page 366 ---
Appendix F1 to the Listing Rules to permit ChinaAMC (HK) to participate in the Global
Offering as cornerstone investor subject to certain conditions. Please refer to the sub-section
headed “Waiver From Strict Compliance With The Requirements under The Listing Rules” for
details.
New Asia Ferrell
New Asia Ferrell Asset Management Limited (ʮ̡)( “ New
Asia Ferrell ”) is a Hong Kong-incorporated and internationally oriented, licensed asset
management institution. Based in Hong Kong with an international orientation, it focuses on
global asset allocation and investment opportunities. New Asia Ferrell is licensed by the
Securities and Futures Commission of Hong Kong to carry on Type 4 (Advising on Securities)
and Type 9 (Asset Management) regulated activities. New Asia Ferrell is a wholly-owned
subsidiary of New Asia Ferrell Investment Limited, which is ultimately owned as to 33.51%
by Y ang Qing ( เᅅ), an Independent Third Party. Save for Y ang Qing, there is no other
individual shareholder, each being an Independent Third Party, holding 30% or more beneficial
interest therein. New Asia Ferrell will hold the Offer Shares subscribed through the
Cornerstone Placing in its capacity as the discretionary management account manager on
behalf of underlying individual clients, each of them is, to the best knowledge and belief and
after due enquiry of New Asia Ferrell, an Independent Third Party. No single underlying
individual client holds 30% or more interest in the discretionary management account managed
on a discretionary basis by New Asia Ferrell.
With a long-term perspective, New Asia Ferrell focuses on investment opportunities with
structural growth potential and global competitiveness, spanning, among others, frontier
technology, critical resources linked to strategic supply-demand dynamics and value chains,
and other strategic sectors supported by long-term secular trends.
Bridge Zone Group
Bridge Zone Group Limited (ʮ̡)( “ Bridge Zone Group ”) is a company
incorporated in Hong Kong in July 2024 with limited liability, focusing on cross-border
investment and financing, asset management and consulting services. Bridge Zone Group is
wholly owned by Bi Xuewen ( ଭኪ˖), an Independent Third Party, with extensive experience
in the capital markets and providing solid support to the investment strategies of Bridge Zone
Group.
Zhengxin Group
Zhengxin Group Investment Limited (“ Zhengxin Group ”), an investment holding
company incorporated in the British Virgin Islands with limited liability in July 2020,
specializes in Hong Kong equity investments and trading with a focus on non-ferrous metals,
rare metals, technology, artificial intelligence, and new energy sectors. Zhengxin Group is
wholly owned by Mr. Su Ruitong ( ᘽ๿ஷ)( “ Mr. Su ”), an Independent Third Party. With over
a decade of investment experience, Mr. Su possesses profound expertise in investments in
initial public offerings in Hong Kong, stock investment strategies, and risk management.
CORNERSTONE INVESTORS
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--- page 367 ---
Sunwoda Treasury
Sunwoda Treasury (Hong Kong) Limited (༺ৌ༟(ಥ)ʮ̡)( “ Sunwoda
Treasury ”) is a limited company incorporated under the laws of Hong Kong in September 2024
and is primarily engaged in investment and financing services, supply chain finance and
international trade consulting. Sunwoda Treasury is wholly owned by Sunwoda Electronic Co.,
Ltd. (ʮ̡)( “ Sunwoda Electronic” ), a company established in the PRC
in 1997, shares of which have been listed on the Shenzhen Stock Exchange (stock code:
300207) since 2011 and the GDRs of which have been listed on the SIX Swiss Exchange
(Symbol: SWD) since 2022. Sunwoda Electronic is primarily engaged in research and
development, design, manufacturing and sales of lithium-ion batteries and is a global leading
enterprise in lithium-ion battery. As of the Latest Practicable Date, there was no single
shareholder who has a beneficial ownership interest of 30% or more in Sunwoda Electronic.
The table below sets forth details of the Cornerstone Placing based on the Offer Price of
HK$30.00 per H Share:
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is fully exercised
Cornerstone Investor
Total
investment
amount
(US$) (1)
Number of
Offer Shares
to be
Subscribed (1)(2)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
Shares in issue
completion of
the Global
Offering
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
Shares in issue
completion of
the Global
Offering
Glencore AG /H1118/H1118/H1118/H1118/H1118/H1118/H111830,000,000 7,780,800 21.16% 5.29% 18.40% 5.10%
Stoneylake Global /H1118/H1118/H1118/H111810,000,000 2,593,600 7.05% 1.76% 6.13% 1.70%
North Rock /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,000,000 2,074,800 5.64% 1.41% 4.91% 1.36%
ChinaAMC (HK) /H1118/H1118/H1118/H1118/H11183,000,000 778,000 2.12% 0.53% 1.84% 0.51%
New Asia Ferrell /H1118/H1118/H1118/H1118/H11183,000,000 778,000 2.12% 0.53% 1.84% 0.51%
Bridge Zone Group (3) /H1118/H11182,970,047 770,200 2.09% 0.52% 1.82% 0.50%
Zhengxin Group /H1118/H1118/H1118/H1118/H11182,000,000 518,600 1.41% 0.35% 1.23% 0.34%
Sunwoda Treasury (4)/H1118/H1118/H11181,285,198 333,200 0.91% 0.23% 0.79% 0.22%
Total: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,255,245 15,627,200 42.50% 10.63% 36.96% 10.24%
Notes:
(1) The investment amount excludes brokerage, SFC transaction levy, AFRC transaction levy and Stock
Exchange trading fee, and is calculated based on the exchange rate set out in the section headed
“Information about this Prospectus and the Global Offering — Currency Translations” in this prospectus
for illustrative purpose. The actual number of Offer Shares to be subscribed may change due to the
exchange rate to be used as prescribed in the relevant Cornerstone Investment Agreements.
(2) Subject to rounding down to the nearest whole board lot of 200 Shares.
(3) Calculated based on the investment amount of US$3,000,000 (including brokerage and levies).
(4) Calculated based on the investment amount of HK$10,000,000 (excluding brokerage and levies) using
the exchange rate set out in the section headed “Information about this Prospectus and the Global
Offering — Currency Translations”.
CORNERSTONE INVESTORS
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--- page 368 ---
CLOSING CONDITIONS
The obligation of the Cornerstone Investors to acquire the Offer Shares under the
Cornerstone Investment Agreements is subject to, among other things, the following closing
conditions:
(a) the Underwriting Agreements being entered into and having become effective and
unconditional (in accordance with their respective original terms or as subsequently
waived or varied by agreement of the parties thereto) by no later than the time and
date as specified in the Underwriting Agreements, and neither the Underwriting
Agreements having been terminated;
(b) the Offer Price having been agreed pursuant to the Underwriting Agreements;
(c) the Listing Committee of the Stock Exchange having granted the approval for the
listing of, and permission to deal in, the Shares (including the Shares under the
Cornerstone Placing as well as other applicable waivers and approvals and those in
connection with the subscription of the Shares under the Cornerstone Placing) and
such approval, permission or waiver having not been revoked prior to the
commencement of dealings in the Shares on the Stock Exchange;
(d) no laws shall have been enacted or promulgated by any governmental authority
which prohibits the consummation of the transactions contemplated in the Global
Offering or the Cornerstone Investment Agreements, and there shall be no orders or
injunctions from a court of competent jurisdiction in effect precluding or prohibiting
consummation of such transactions;
(e) the CSRC having accepted the CSRC Filings and published the filing results in
respect of the CSRC Filings on its website, and such notice of acceptance and/or
filing results published not having otherwise been rejected, withdrawn, revoked or
invalidated prior to the commencement of dealings in the Shares on the Stock
Exchange; and
(f) the respective representations, warranties, undertakings, confirmations and
acknowledgements of the Cornerstone Investors under their respective Cornerstone
Investment Agreements are and will be accurate and true in all material respects and
not misleading and that there is no material breach of the Cornerstone Investment
Agreements on the part of the Cornerstone Investors.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed that without the prior written consent of
each of the Company, the Overall Coordinators and the Sole Sponsor, it will not, whether
directly or indirectly, at any time during the period commencing from (and inclusive of) the
Listing Date and ending on (and inclusive of) the date falling six (6) months after the Listing
Date (the “ Lock-up Period ”), directly or indirectly dispose of, in any way, any of the Offer
Shares it has subscribed for or any interest in any company or entity holding any of such Offer
Shares pursuant to the relevant Cornerstone Investment Agreements. Except for the forgoing
lock-up, Glencore AG has also agreed to an additional restriction on disposal of, in any way,
an aggregate more than one third of the Offer Shares it has subscribed for at any time during
the period commencing from (and inclusive of) the last day of the Lock-up Period and ending
on the date falling 30 months after (and inclusive of) the last day of the Lock-up Period.
CORNERSTONE INVESTORS
– 357 –


--- page 369 ---
HONG KONG UNDERWRITERS
Huatai Financial Holdings (Hong Kong) Limited
CLSA Limited
ABCI Securities Company Limited
BOCI Asia Limited
TFI Securities and Futures Limited
UOB Kay Hian (Hong Kong) Limited
Futu Securities International (Hong Kong) Limited
Tiger Brokers (HK) Global Limited
UNDERWRITING
This prospectus is published solely in connection with the Hong Kong Public Offering.
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a
conditional basis. The International Offering is expected to be fully underwritten by the
International Underwriters subject to the terms and conditions of the International
Underwriting Agreement.
The Global Offering comprises the Hong Kong Public Offering of initially 3,676,600
Hong Kong Offer Shares and the International Offering of initially 33,089,000 International
Offer Shares, subject, in each case, to reallocation on the basis as described in the section
headed “Structure of the Global Offering” in this prospectus as well as to the Over-allotment
Option in the case of the International Offering.
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, we are offering the Hong Kong
Offer Shares (subject to reallocation) for subscription by the public in Hong Kong in
accordance with the terms and conditions of this prospectus and the Hong Kong Underwriting
Agreement at the Offer Price.
Subject to (a) the Stock Exchange granting approval for the listing of, and permission to
deal in, the H Shares to be issued pursuant to the Global Offering (including the additional H
Shares which may be issued pursuant to the exercise of the Over-allotment Option) on the Main
Board of the Stock Exchange and such approval not having been withdrawn and (b) certain
other conditions set out in the Hong Kong Underwriting Agreement (including the Overall
Coordinators (on behalf of the Hong Kong Underwriters) and our Company agreeing upon the
Offer Price) being satisfied (or, as the case may be, waived), the Hong Kong Underwriters have
agreed severally but not jointly to procure subscribers for, or themselves to subscribe for, their
respective applicable portions of the Hong Kong Offer Shares in aggregate, now being offered
which are not taken up under the Hong Kong Public Offering on the terms and conditions set
out in this prospectus and the Hong Kong Underwriting Agreement.
UNDERWRITING
– 358 –


--- page 370 ---
The Hong Kong Underwriting Agreement is conditional on and subject to, among other
things, the International Underwriting Agreement having been executed and becoming
unconditional and not having been terminated in accordance with its terms.
Grounds for termination
The Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters)
and the Sole Sponsor shall be entitled by notice (orally or in writing) to our Company to
terminate the Hong Kong Underwriting Agreement with immediate effect if at any time prior
to 8:00 a.m. on the Listing Date:
(a) there develops, occurs, exists or comes into force:
(i) any event, or series of events, in the nature of force majeure (including,
without limitation, any acts of government, declaration of a local, national,
regional or international emergency or war, calamity, crisis, epidemic,
pandemic, outbreaks, escalation, adverse mutation or aggravation of diseases
(including, without limitation, COVID-19, Severe Acute Respiratory
Syndrome (SARS), swine or avian flu, H5N1, H1N1, H7N9, Ebola virus,
Middle East respiratory syndrome and such related/mutated forms), economic
sanctions, strikes, lock-outs, other industrial actions, fire, explosion, flooding,
earthquake, tsunami, volcanic eruption, civil commotion, riots, public disorder,
acts of war, outbreak or escalation of hostilities, acts of God, acts of terrorism
(whether or not responsibility has been claimed), paralysis in government
operations, interruptions) in or affecting Hong Kong, the PRC, Singapore,
Peru, DR Congo, Zambia or other jurisdictions relevant to the Group or the
Global Offering (collectively, the “ Relevant Jurisdictions ”); or
(ii) the imposition of any moratorium, suspension or restriction (including, without
limitation, any imposition of or requirement for any minimum or maximum
price limit or price range but excluding such requirement already in place as
of the date of the Hong Kong Underwriting Agreement) in or on trading in
securities generally on the SEHK, the Shanghai Stock Exchange, the Shenzhen
Stock Exchange, the New Y ork Stock Exchange, the NASDAQ Global Market
or the London Stock Exchange; or
(iii) the imposition of any general moratorium on commercial banking activities in
Relevant Jurisdictions (declared by any relevant competent authority) or any
disruption in commercial banking or foreign exchange trading or securities
settlement or clearance services, procedures or matters in or affecting any of
the Relevant Jurisdictions; or
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(iv) any new laws, or any change or any development involving a prospective
change in existing laws or any event or circumstance likely to result in a
change or a development involving a prospective change in, or in the
interpretation or application by any court or other competent authorities of,
existing laws, in each case, in or affecting any of the Relevant Jurisdictions; or
(v) the imposition of economic sanctions, or the withdrawal of trading privileges,
in whatever form, under any sanction laws, or regulations in, Hong Kong, the
PRC or any of the Relevant Jurisdictions; or
(vi) a change or development involving a prospective change in or affecting
Taxation or exchange control, currency exchange rates or foreign investment
regulations (including, without limitation, a material devaluation of the United
States dollar, Hong Kong dollar or the Renminbi against any foreign currencies
or a change in the system under which the value of the Hong Kong dollar is
linked to that of the United States dollar or Renminbi is linked to any foreign
currency), or the implementation of any exchange control, in any of the
Relevant Jurisdictions; or
(vii) any proceedings of any third party being threatened or instigated against any
Director, member of the Group or any of the Controlling Shareholders; or
(viii) any change or a prospective change, or a materialization of, any of the risk set
out in the section headed “Risk Factors” in this prospectus; or
(ix) save as disclosed in this prospectus, non-compliance of this prospectus, CSRC
filings or any other documents used in connection with the contemplated offer
of the Shares, or any aspect of the Global Offering with the Listing Rules or
any other applicable laws; or
(x) an authority or a political body or organization in any of the Relevant
Jurisdictions commencing any investigation or other action, or announcing an
intention to investigate or take other action, against any member of the Group
or any Director; or
(xi) save as disclosed in this prospectus, a material contravention by the Company,
any member of the Group or any Director of the Listing Rules or applicable
laws; or
(xii) a valid demand by any creditor for repayment or payment of any indebtedness
of any member of the Group or in respect of which any member of the Group
is liable prior to its stated maturity; or
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(xiii) except with the prior written consent of the Overall Coordinators, the issue or
requirement to issue by the Company of a supplement or amendment to this
prospectus or other documents in connection with the offer and sale of the
Offer Shares pursuant to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance or the Listing Rules or upon any requirement or request
of the Stock Exchange and/or the SFC;
which, individually or in the aggregate, in the sole and absolute opinion of the Overall
Coordinators and the Sole Sponsor:
(1) has or will have a material adverse effect on the assets, liabilities, business, general
affairs, management, prospects, shareholders’ equity, profits, losses, results of
operations, position or condition, financial or otherwise, or performance of the
Company or the Group as a whole; or
(2) has or will 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 interest
under the International Offering; or
(3) makes or will make it inadvisable, inexpedient, impracticable or incapable for 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
(4) has or will 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 or delaying the processing of applications and/or payments
pursuant to the Global Offering or pursuant to the underwriting thereof; or
(b) there has come to the notice of the Sole Sponsor and the Overall Coordinators:
(i) an order or petition for the winding up of any member of the Group or any
composition or arrangement made by any member of the Group with its
creditors or a scheme of arrangement entered into by any member of the Group
or any resolution for the winding-up of any member of the Group or the
appointment of a provisional liquidator, receiver or manager over all or part of
the material assets or undertaking of any member of the Group or anything
analogous thereto occurring in respect of any member of the Group; or
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(ii) that any statement contained in any of the Hong Kong Public Offering
Documents (as defined in the Hong Kong Underwriting Agreement), CSRC
filings and/or in any notices or announcements, written communications or
other documents issued or used by or on behalf of the Company in connection
with the Hong Kong Public Offering (including any supplement or amendment
thereto) was, when it was issued, or has become, untrue, incorrect, inaccurate
or misleading in any material respect, or that any forecast, estimate, expression
of opinion, intention or expectation contained in any of the Hong Kong Public
Offering Documents and/or any notices, announcements, communications or
other documents issued or used by or on behalf of the Company in connection
with the Hong Kong Public Offering (including any supplement or amendment
thereto) has become not fair and honest and based on reasonable assumptions;
or
(iii) that any matter has arisen or has been discovered which would, had it arisen
or been discovered immediately before the date of this prospectus, constitute
a material omission or misstatement in any Hong Kong Public Offering
Document; or
(iv) any breach of, or any event or circumstance rendering untrue or incorrect or
misleading in any respect, any of the warranties given by the Company or the
Controlling Shareholder in the Hong Kong Underwriting Agreement or the
International Underwriting Agreement; or
(v) any event, act or omission which gives or is likely to give rise to any liability
of any of the Indemnifying Parties as defined in the Hong Kong Underwriting
Agreement; or
(vi) any material breach of any of the obligations or undertakings imposed upon the
Company or any of the Controlling Shareholders under the Hong Kong
Underwriting Agreement or the International Underwriting Agreement; or
(vii) there is any material adverse change, in or affecting the assets, liabilities,
business, management, prospects, shareholders’ equity, profits, losses, results
of operations, position or condition, financial or otherwise, or performance of
the Company and the other members of the Group, taken as a whole; or
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(viii) a Director or the chairman or the chief executive officer or the chief financial
officer of the Company vacating his/her office, seeking to retire or being
removed from his/her office; or
(ix) that the approval by the Listing Committee of the Stock Exchange of the listing
of, and permission to deal in, the Shares in issue and to be issued pursuant to
the Global Offering (including pursuant to any exercise of the Over-allotment
Option) 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
(x) any prohibition on the Company for whatever reason from offering, allotting,
issuing or selling any of the Offer Shares pursuant to the terms of the Global
Offering; or
(xi) the Company withdraws this prospectus (and/or any other documents issued or
used in connection with the Global Offering) or the Global Offering; or
(xii) any of the experts named in this prospectus (other than the Sole Sponsor) has
withdrawn or is subject to withdrawal of its consent to the inclusion of its
reports, letters and/or opinions (as the case may be) and being named in any of
the Offering Documents (as defined in the Hong Kong Underwriting
Agreement) or to the issue of any of the Offering Documents; or
(xiii) any Director or member of the senior management of the Company named in
this prospectus is being charged with an indictable offence or prohibited by
operation of law or otherwise disqualified from taking part in the management
of a company or taking a directorship of a company; or
(xiv) that a material portion of the orders placed or confirmed in the bookbuilding
process, or of the investment commitments made by any cornerstone investors
under the Cornerstone Investment Agreements, 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.
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Undertakings to the Stock Exchange pursuant to the Listing Rules
Undertakings by our Company
Pursuant to Rule 10.08 of the Listing Rules, we have undertaken to the Stock Exchange
that, no further Shares or securities convertible into equity securities of our Company (whether
or not of a class already listed) may be issued or sold or transferred out of treasury by us or
form the subject of any agreement to such an issue, or sale or transfer out of treasury within
six months from the Listing Date (whether or not such issue of Shares or securities, or transfer
of treasury shares will be completed within six months from the Listing Date), except pursuant
to the Global Offering (including pursuant to the exercise of the Over-allotment Option (if
any)) or any issue of Shares or securities, or transfer of treasury shares in certain circumstances
prescribed by Rule 10.08 of the Listing Rules.
Undertakings by the Controlling Shareholder
Pursuant to Rule 10.07(1) of the Listing Rules, each of the Controlling Shareholders has
undertaken to the Stock Exchange and to our Company that, except in compliance with the
requirements of the Listing Rules or pursuant to the Global Offering (including pursuant to the
exercise of the Over-allotment Option), it/he shall not and shall procure that the relevant
registered holder(s) shall not, without the prior written consent of the Stock Exchange:
(a) in the period commencing on the date by reference to which disclosure of his
shareholding is made in this prospectus and ending on the date which is six months
from the Listing Date, either directly or indirectly, dispose of, enter into any
agreement to dispose of or otherwise create any options, rights, interests or
encumbrances in respect of, any of the Shares or securities of the Company in
respect of which he is shown by this prospectus to be the beneficial owner(s) (the
“Relevant Securities ”) (save for a pledge or charge of any Relevant Securities as
security in favour of an authorized institution (as defined in the Banking Ordinance
(Chapter 155 of the Laws of Hong Kong)) for a bona fide commercial loan); and
(b) in the period of six months commencing on the date on which the period referred to
in the preceding paragraph expires, either directly or indirectly, dispose of, or enter
into any agreement to dispose of or otherwise create, any options, rights, interests
or encumbrances in respect of, any of the Relevant Securities, if immediately
following such disposal or upon the exercise or enforcement of such options, rights,
interests or encumbrances, it/he would cease to be a Controlling Shareholder of our
Company.
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In addition, in accordance with Note 3 to Rule 10.07(2) of the Listing Rules, each of the
Controlling Shareholders has further undertaken to the Stock Exchange and to our Company
that within the period commencing on the date by reference to which disclosure of his
shareholding is made in this prospectus and ending on the date which is 12 months from the
Listing Date, it/he shall:
(a) when it/he pledges or charges any Relevant Securities 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 our Company in writing of such pledge or charge
together with the number of Relevant Securities so pledged or charged; and
(b) when it/he receives indications, either verbal or written, from the pledgee or charge
of any Shares that any of the pledged or charged Shares will be disposed of,
immediately inform our Company in writing of such indications.
Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertakings by our Company
Our Company, has undertaken to each of the Sole Sponsor, the Sponsor-Overall
Coordinator, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers, the Capital Market Intermediaries and the Hong Kong Underwriters
that, except for the offer, allotment and issue of the Offer Shares pursuant to the Global
Offering (including pursuant to any exercise of the Over-allotment Option), at any time during
the period commencing on the date of the Hong Kong Underwriting Agreement and ending on,
and including the date that is six months from the Listing Date (the “ First Six-Month
Period ”), our Company will not, without the prior written consent of Sole Sponsor and the
Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and
unless in compliance with the requirements of the Listing Rules and only after the consent of
any relevant authority (if so required) has been obtained:
(a) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree
to allot, issue or sell, mortgage, charge, pledge, hypothecate, hedge, 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 repurchase or create an encumbrance over, or contract or
agree to transfer or dispose of or repurchase or create an encumbrance over, either
directly or indirectly, conditionally or unconditionally, any Shares or other equity
securities of our Company, or deposit any H Shares or other equity securities of our
Company or any interest in any of the foregoing, with a depositary in connection
with the issue of depositary receipts; or
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(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 any H
Shares or other equity securities of our Company; or
(c) enter into any transaction with the same economic effect as any transaction specified
in sub-paragraph (a) or (b) above; or
(d) offer to, or agree to, or announce any intention to effect any transaction specified in
sub-paragraph (a), (b) or (c) above,
in each case, whether any of the transactions specified in sub-paragraph (a), (b) or (c) above
is to be settled by the delivery of H Shares or such other equity securities of our Company or
in cash or otherwise (whether or not the issue of such H Shares or other securities will be
completed within the First Six-Month Period).
In the event that, at any time during the period of six months immediately following the expiry
of the First Six-Month Period (the “ Second Six-Month Period ”), our Company enters into any
of the transactions specified in sub-paragraph (a), (b) or (c) above or offers to or agrees to or
announces any intention to effect any such transaction, our Company shall take all reasonable
steps to ensure that any such transaction, offer, agreement or announcement will not create a
disorderly or false market in the securities of our Company.
Undertakings by the Controlling Shareholders
Each of the Controlling Shareholders has agreed and undertaken, to each of the Company,
the Sole Sponsor, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries and the Hong Kong
Underwriters that, during the First Six-Month Period, except as pursuant to the Global Offering
(including pursuant to the exercise of the Over-allotment Option) or as permitted by Note 2 and
3 to Rule 10.07 of the Listing Rules, without the prior written consent of the Sole Sponsor and
the Overall Coordinators (for themselves and on behalf of the 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 will not, at any
time during the First Six-Month Period, (i) dispose of, nor enter into any agreement
to dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, either directly or indirectly, conditionally or unconditionally, any H
Shares or other securities of the Company or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of any H Shares or other securities of the 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 (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)
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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 the Company
or in cash or otherwise (whether or not the issue of such H Shares or other securities
will be completed within the First Six-Month Period); and
(b) it/he will not, until the expiry of the Second Six-Month Period, enter into any of the
transactions specified in (a)(i), (a)(ii) or (a)(iii) above or offer to or agree to or
contract to or publicly announce any intention to effect any such transaction if,
immediately following any such transaction, it/he will cease to be a “controlling
shareholder” (as the term is defined in the Listing Rules) of the Company; and
(c) until the expiry of the Second Six-Month Period, in the event that he/she/it enters
into any of the transactions specified in (a)(i), (a)(ii) or (a)(iii) above or offer to or
agrees to or contract to or publicly announce any intention to effect any such
transaction, he/she/it will take all reasonable steps to ensure that such a disposal will
not create a disorderly or false market in the securities of the Company.
Indemnity
Our Company and the Controlling Shareholder have agreed to indemnify the Hong Kong
Underwriters for certain losses which they may suffer, including, amongst others, losses arising
from their performance of their obligations under the Hong Kong Underwriting Agreement and
any breach by our Company of the Hong Kong Underwriting Agreement.
Hong Kong Underwriters’ Interests in our Company
Save for their obligations under the Hong Kong Underwriting Agreement, the Hong Kong
Underwriters do not have any shareholding interest in our Company or any right or option
(whether legally enforceable or not) to subscribe for or nominate persons to subscribe for
securities in our Company or any member of our Group.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the H Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement.
UNDERWRITING
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International Offering
International Underwriting Agreement
In connection with the International Offering, it is expected that the Company will enter
into the International Underwriting Agreement with, inter alia, the International Underwriters.
Under the International Underwriting Agreement, subject to the conditions set forth therein, the
International Underwriters would agree to purchase, or procure subscribers to purchase, the
Offer Shares being offered pursuant to the International Offering (subject to, amongst others,
any reallocation between the International Offering and the Hong Kong Public Offering). It is
expected that the International Underwriting Agreement may be terminated on similar grounds
as the Hong Kong Underwriting Agreement. Potential investors are reminded that in the event
that the International Underwriting Agreement is not entered into, the Global Offering will not
proceed.
Over-allotment Option
Our Company is expected to grant to the International Underwriters, exercisable in whole
or in part by the Overall Coordinators at their sole and absolute discretion (on behalf of the
International Underwriters), the Over-Allotment Option, which will be exercisable from the
Listing Date until 30 days after the last day for the lodging of applications under the Hong
Kong Public Offering, to require our Company to issue and allot, up to an aggregate of
5,514,800 H Shares, representing no more than 15% of the initial Offer Shares, at the Offer
Price under the International Offering, to cover over-allocations in the International Offering,
if any.
Commission and Expenses
Our Company will pay an underwriting commission of 1.5% of the aggregate Offer Price
of all the Offer Shares (the “ Fixed Fees ”). Our Company may also in our sole and absolute
discretion pay any one or all of the Underwriters an additional incentive fee in aggregate of up
to 1.0% of the aggregate Offer Price for all of the Offer Shares (the “ Discretionary Fees ”). The
ratio of Fixed Fees and Discretionary Fees payable is therefore approximately 54:46 (on the
basis that the Discretionary Fees will be fully paid). For any 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.
UNDERWRITING
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The aggregate commissions and fees, together with Stock Exchange listing fees, SFC
transaction levy, Stock Exchange trading fee AFRC transaction levy, legal and other
professional fees and printing and all other expenses payable by us relating to the Global
Offering are currently estimated to amount in aggregate to approximately HK$59.9 million
(assuming an Offer Price of HK$30.0 per Offer Share).
ACTIVITIES BY SYNDICATE MEMBERS
The Underwriters and the Capital Market Intermediaries of the Hong Kong Public
Offering and the International Offering (together, the “ Syndicate Members ”) and their
affiliates may each individually undertake a variety of activities (as further described below)
which do not form part of the underwriting or stabilizing process.
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, funds management, trading, hedging,
investing and other activities for their own account and for the account of others. In the
ordinary course of their various business activities, the Syndicate Members and their respective
affiliates may purchase, sell or hold a broad array of investments and actively trade securities,
derivatives, loans, commodities, currencies, credit default swaps and other financial
instruments for their own account and for the accounts of their customers. Such investment and
trading activities may involve or relate to assets, securities and/or instruments of our Company
and/or persons and entities with relationships with our Company and may also include swaps
and other financial instruments entered into for hedging purposes in connection with the
Group’s loans and other debt.
In relation to the H Shares, those activities of the Syndicate Members and their affiliates
could include acting as agent for buyers and sellers of the H Shares, entering into transactions
with those buyers and sellers in a principal capacity, proprietary trading in the H Shares, and
entering into over the counter or listed derivative transactions or listed and unlisted securities
transactions (including issuing securities such as derivative warrants listed on a stock
exchange) which have as their underlying assets, assets including the H Shares. 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. All such activities could occur in Hong Kong and
elsewhere in the world and may result in the Syndicate Members and their affiliates holding
long and/or short positions in the H Shares, in baskets of securities or indices including the H
Shares, in units of funds that may purchase the H Shares, or in derivatives related to any of the
foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities
having the H Shares as their or part of their underlying securities, whether on the Stock
Exchange or on any other stock exchange, the rules of the exchange may require the issuer of
those securities (or one of its affiliates or agents) to act as a market maker or liquidity provider
in the security, and this will also result in hedging activity in the H Shares in most cases.
UNDERWRITING
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All such activities may occur both during and after the end of the stabilizing period
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.
It should be noted that when engaging in any of these activities, the Syndicate Members
will be subject to certain restrictions, including the following:
(a) the Syndicate Members (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 must comply with all applicable laws and regulations,
including the market misconduct provisions of the SFO, including the provisions
prohibiting insider dealing, false trading, price rigging and stock market
manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time
to time, and expect to provide in the future, investment banking and other services to our
Company and its affiliates for which such Syndicate Members or their respective affiliates have
received or will receive customary fees and commissions.
In addition, the Syndicate Members or their respective affiliates may provide financing to
investors to finance their subscriptions of Offer Shares in the Global Offering.
SOLE SPONSOR’S INDEPENDENCE
The Sole Sponsor satisfies the independence criteria applicable to sponsors set out in Rule
3A.07 of the Listing Rules.
UNDERWRITING
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THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering.
The listing of the H Shares on the Main Board of the Stock Exchange is sponsored by the
Sole Sponsor. The Sole Sponsor have made an application on behalf of the Company to the
Stock Exchange for the listing of, and permission to deal in, the H Shares to be issued and
converted as mentioned in this Prospectus.
The Global Offering comprises:
 the Hong Kong Public Offering of 3,676,600 H Shares (subject to reallocation) in
Hong Kong as described in the paragraph headed “— The Hong Kong Public
Offering” below; and
 the International Offering of 33,089,000 H Shares (subject to reallocation and the
Over-allotment Option) outside the United States in offshore transactions in reliance
on Regulation S.
Investors may apply for the Hong Kong Offer Shares under the Hong Kong Public
Offering or apply for or indicate an interest, if qualified to do so, for the International Offer
Shares under the International Offering, but may not do both.
The Offer Shares will represent approximately 25.0% of the enlarged issued share capital
of our Company immediately after 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 27.7% of the enlarged issued share
capital of our Company immediately after completion of the Global Offering and the exercise
of the Over-allotment Option as set out in “— The International Offering — Over-allotment
Option” below.
References in this prospectus to applications, application monies or the procedure for
application relate solely to the Hong Kong Public Offering.
The number of Offer Shares to be offered under the Hong Kong Public Offering and the
International Offering, respectively, may be subject to reallocation as described in “— The
Hong Kong Public Offering — Reallocation” below.
STRUCTURE OF THE GLOBAL OFFERING
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THE HONG KONG PUBLIC OFFERING
Number of Hong Kong Offer Shares initially offered
We are initially offering 3,676,600 H Shares for subscription by the public in Hong Kong
at the Offer Price, representing approximately 10.0% of the total number of the Offer Shares
initially available under the Global Offering. Subject to the reallocation of the Offer Shares
between the International Offering and the Hong Kong Public Offering, the Hong Kong Offer
Shares will represent approximately 2.5% of the enlarged issued share capital of our Company
immediately after completion of the Global Offering (without taking into account any Shares
which may be issued pursuant to the exercise of the Over-allotment Option).
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, and companies (including fund managers) whose ordinary business involves dealing in
shares and other securities, and corporate entities which regularly invest in shares and other
securities.
Completion of the Hong Kong Public Offering is subject to the conditions as set forth in
“— Conditions of the Global Offering” below.
Allocation
Allocation of the Offer Shares to investors under the Hong Kong Public Offering will be
based solely on the level of valid applications received under the Hong Kong Public Offering.
The basis of allocation may vary, depending on the number of Hong Kong Offer Shares validly
applied for by applicants. Such allocation could, where appropriate, consist of balloting, which
would mean that some applicants may receive a higher allocation than the others who have
applied for the same number of the Hong Kong Offer Shares, and those applicants who are not
successful in the ballot may not receive any Hong Kong Offer Shares.
For allocation purposes only, the total number of Hong Kong Offer Shares available under
the Hong Kong Public Offering (after taking into account any reallocation referred to below)
will be divided equally into two pools: Pool A and Pool B, with any odd board lots being
allocated to Pool A. The Hong Kong Offer Shares in Pool A will be allocated on an equitable
basis to applicants who have applied for Hong Kong Offer Shares with an aggregate price of
HK$5 million (excluding the brokerage, the SFC transaction levy, the AFRC transaction levy
and the Stock Exchange trading fee payable) or less. The Hong Kong Offer Shares in Pool B
will be allocated on an equitable basis to applicants who have applied for Hong Kong Offer
Shares with an aggregate price of more than HK$5 million (excluding the brokerage, the SFC
transaction levy, the AFRC transaction levy and the Stock Exchange trading fee payable) and
up to the total value in pool B.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 384 ---
Investors should be aware that applications in Pool A and applications in Pool B may
receive different allocation ratios. If any Hong Kong Offer Shares in one (but not both) of the
pools are unsubscribed, such unsubscribed Hong Kong Offer Shares will be transferred to the
other pool to satisfy demand in that other pool and be allocated accordingly. Applicants can
only receive an allocation of Hong Kong Offer Shares from either Pool A or Pool B and not
from both pools. Multiple or suspected multiple applications under the Hong Kong Public
Offering and any application for more than 1,838,200 Hong Kong Offer Shares (being 50% of
the Hong Kong Offer Shares initially available under the Hong Kong Public Offering) is liable
to be rejected.
Reallocation
The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the
discretion of the Overall Coordinators. Subject to the allocation cap described in the
subsequent paragraph, the Overall Coordinators may in their discretion reallocate Offer Shares
from the International Offering to the Hong Kong Public Offering to satisfy valid applications
under the Hong Kong Public Offering. In addition, if the Hong Kong Public Offering is not
fully subscribed, the Overall Coordinators will have the discretion (but shall not be under any
obligation) to reallocate to the International Offering all or any unsubscribed Hong Kong Offer
Shares in such amounts as they deem appropriate.
In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering
will be allocated between Pool A and Pool B and the number of Offer Shares allocated to the
International Offering will be correspondingly reduced in such manner as the Overall
Coordinators deem appropriate. In the event of reallocation of Offer Shares between the
International Offering and the Hong Kong Public Offering in the circumstances where (a) the
International Offer Shares are fully subscribed or oversubscribed and the Hong Kong Offer
Shares are fully subscribed or oversubscribed irrespective of the number of times; or (b) the
International Offer Shares are undersubscribed and the Hong Kong Offer Shares are fully
subscribed or oversubscribed irrespective of the number of times, then up to 1,838,200 Offer
Shares may be reallocated from the International Offering to the Hong Kong Public Offering,
so that the total number of Offer Shares available for subscription under the Hong Kong Public
Offering will increase up to 5,514,800 Offer Shares, representing approximately 15% of the
number of Offer Shares initially available under the Global Offering (before exercise of the
Over-allotment Option) in accordance with Chapter 4.14 of the Guide for New Listing
Applicants. In the circumstance where the International Offer Shares are fully subscribed or
oversubscribed and the Hong Kong Offer Shares are undersubscribed, there will be no
reallocation from the International Offering to the Hong Kong Public Offering, and no
over-allocation of H Shares to the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 385 ---
Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and the
International Offering follows Mechanism B set out under paragraph 2 of Chapter 4.14 of the
Guide for New Listing Applicants and the provision of Paragraph 4.2(b) of Practice Note 18
of the Listing Rules, no mandatory clawback or reallocation mechanism is required to increase
the number of Offer Shares under the Hong Kong Public Offering to a certain percentage of the
total number of Offer Shares offered under the Global Offering.
In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering
will be allocated between Pool A and Pool B in equal proportion and the number of Offer
Shares allocated to the International Offering will be correspondingly reduced in such manner
as the Joint Global Coordinators in their discretion consider appropriate.
In the event that both the Hong Kong Public Offering and International Offering are
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.
Details of any reallocation of Offer Shares between the Hong Kong Public Offering and
the International Offering will be disclosed in the results announcement of the Global Offering,
which is expected to be published on Thursday, January 8, 2026.
Applications
Each applicant under the Hong Kong Public Offering will be required to give an
undertaking and confirmation in the application submitted by him/her that he/she and any
person(s) for whose benefit he/she is making the application has not applied for or taken up,
or indicated an interest for, and will not apply for or take up, or indicate an interest for, any
International Offer Shares under the International Offering. Such applicant’s application under
the International Offering is liable to be rejected if the said undertaking and/or confirmation
is breached and/or untrue (as the case may be).
Applicants under the Hong Kong Public Offering are required to pay, on application
(subject to application channel), the Offer Price in addition to the brokerage, the SFC
transaction levy, the AFRC transaction levy and the Stock Exchange trading fee payable on
each Offer Share, amounting to a total of HK$6,060.51 for one board lot of 200 Offer Shares.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 386 ---
THE INTERNATIONAL OFFERING
Number of International Offer Shares initially offered
The International Offering will consist of an initial offering of 33,089,000 Offer Shares
offered by the Company (subject to reallocation and the Over-allotment Option), representing
approximately 90% of the total number of Offer Shares initially available under the Global
Offering. The number of Offer Shares initially offered under the International Offering, subject
to any reallocation of Offer Shares between the International Offering and the Hong Kong
Public Offering, will represent approximately 90.0% of the enlarged issued share capital of the
Company immediately following the completion of the Global Offering (without taking into
account any Shares which may be issued pursuant to the exercise of the Over-allotment
Option).
Allocation
The International Offering will include selective marketing of Offer Shares to
institutional and professional investors and other investors anticipated to have a sizeable
demand for such Offer Shares in Hong Kong and other jurisdictions outside the United States
in reliance on Regulation S. Professional investors generally include brokers, dealers,
companies (including fund managers) whose ordinary business involves dealing in shares and
other securities and corporate entities which regularly invest in shares and other securities.
Allocation of Offer Shares pursuant to the International Offering will be effected in
accordance with the “book-building” process described in the paragraph headed “— Pricing
and Allocation” below and based on a number of factors, including the level and timing of
demand, the total size of the relevant investor’s invested assets or equity assets in the relevant
sector and whether or not it is expected that the relevant investor is likely to buy further H
Shares, and/or hold or sell its H Shares, after the listing of the H Shares on the Stock Exchange.
Such allocation is intended to result in a distribution of the H Shares on a basis which would
lead to the establishment of a solid professional and institutional shareholder base to the
benefit of our Company and the Shareholders as a whole.
The Overall Coordinators (on behalf of the Underwriters) may require any investor who
has been offered Offer Shares under the International Offering, and who has made an
application under the Hong Kong Public Offering, to provide sufficient information to the
Overall Coordinators so as to allow them to identify the relevant applications under the Hong
Kong Public Offering and to ensure that they are excluded from any allocation of Offer Shares
under the International Offering.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 387 ---
Reallocation
The total number of the Offer Shares to be issued or sold pursuant to the International
Offering may change as a result of the reallocation arrangement described in “— The Hong
Kong Public Offering — Reallocation” above, the exercise of 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 to the International Offering.
OVER-ALLOTMENT OPTION
In connection with the Global Offering, our Company is expected to grant the
Over-allotment Option to the International Underwriters, exercisable by the Overall
Coordinators (on behalf of the International Underwriters).
Pursuant to the Over-allotment Option, the International Underwriters will have the right,
exercisable by the Overall Coordinators (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 our Company to issue up to an aggregate of 5,514,800
additional H Shares, representing not more than 15% of the total number of Offer Shares
initially available under the Global Offering, at the Offer Price under the International
Offering, cover over-allocations in the International Offering, if any. If the Over-allotment
Option is exercised in full, the additional Offer Shares to be issued pursuant thereto will
represent approximately 3.6% of the enlarged issued share capital of our Company immediately
following the completion of the Global Offering. If the Over-allotment Option is exercised, an
announcement will be made.
STABILIZATION
Stabilization is a practice used by underwriters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the securities
in the secondary market, during a specified period of time, to retard and, if possible, prevent
any decline in the initial public market price of the securities below the offer price. Such
transactions may be effected in all jurisdictions where it is permissible to do so, in each case
in compliance with all applicable laws and regulatory requirements, including those of Hong
Kong. In Hong Kong, the price at which stabilization is effected is not permitted to exceed the
offer price.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 388 ---
In connection with the Global Offering, the Stabilizing Manager, its affiliates or any
person acting for it, on behalf of the Underwriters, may over-allocate or effect transactions with
a view to stabilizing or supporting the market price of the H Shares at a level higher than that
which might otherwise prevail for a limited period after the Listing Date. However, there is no
obligation on the Stabilizing Manager, its affiliates or any persons acting for it, to conduct any
such stabilizing action. Such stabilizing action, if taken, (a) will be conducted at the absolute
discretion of the Stabilizing Manager (or any person acting for it) and in what the Stabilizing
Manager 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.
Stabilizing action is permitted in Hong Kong pursuant to the Securities and Futures (Price
Stabilizing) Rules (Chapter 571W of the Laws of Hong Kong), as amended, which includes (i)
over-allocating for the purpose of preventing or minimizing any reduction in the market price
of the H Shares, (ii) selling or agreeing to sell the 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 the
H Shares, (iii) purchasing, or agreeing to purchase, the 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 the H Shares for the sole purpose of preventing or minimizing
any reduction in the market price of the 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 paragraph (ii), (iii), (iv) or (v) above.
Specifically, prospective applicants for and investors in the Offer Shares should note that:
 the Stabilizing Manager, its affiliates or any person acting for it may, in connection
with the stabilizing action, maintain a long position in the H Shares;
 there is no certainty as to the extent to which and the time or period for which the
Stabilizing Manager, its affiliates or any person acting for it, will maintain such a
long position;
 liquidation of any such long position by the Stabilizing Manager, its affiliates or any
person acting for it and selling in the open market may have an adverse impact on
the market price of the H Shares;
 no stabilizing action can be taken to support the price of the H Shares for longer than
the stabilization period which will begin on the Listing Date, and is expected to
expire on Thursday, February 5, 2026, being the 30th day after the last date for
lodging applications under the Hong Kong Public Offering. After this date, when no
further stabilizing action may be taken, demand for 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
STRUCTURE OF THE GLOBAL OFFERING
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--- page 389 ---
 stabilizing bids or transactions effected in the course of the stabilizing action may
be made at any price at or below the Offer Price and can therefore, be done at a price
below the price paid by applicants for, or investors in, the Offer Shares.
Our Company will ensure that an announcement in compliance with the Securities and
Futures (Price Stabilizing) Rules (Chapter 571W of the Laws of Hong Kong) 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-allocation by (among
other methods) exercising the Over-allotment Option in full or in part, by using Shares
purchased by the Stabilizing Manager or any person acting for it in the secondary market at
prices that do not exceed the Offer Price as detailed below or a combination of these means.
PRICING AND ALLOCATION
The International Underwriters will be soliciting from prospective investors indications
of interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Offering they would be prepared to acquire either at different prices or at a
particular price. This process, known as “book-building,” is expected to continue up to, and to
cease on or about, the last day for lodging applications under the Hong Kong Public Offering.
The Offer Price will be HK$30.00 per Offer Share, unless otherwise announced, as further
explained below. Applicants under the Hong Kong Public Offering are required to pay, on
application, the Offer Price of HK$30.00 per Offer Share for each Hong Kong Offer Share
together with brokerage of 1%, SFC transaction levy of 0.0027%, Stock Exchange trading fee
of 0.00565% and AFRC transaction levy of 0.00015%.
Reduction in Offer Price and/or number of Offer Shares
The Overall Coordinators (on themselves and behalf of the Underwriters) may, where
considered appropriate, based on the level of interest expressed by prospective professional
and institutional investors during the book-building process in respect of the International
Offering, and with our consent, reduce the number of Offer Shares and/or the Offer Price below
as stated in this prospectus at any time on or prior to the morning of the last day for lodging
applications under the Hong Kong Public Offering.
In such a case, we will, as soon as practicable following the decision to make such
reduction, and in any event not later than the morning of the last day for lodging applications
under the Hong Kong Public Offering, cause there to be published on the website of our
Company ( www.jinxunec.com ) and the website of the Stock Exchange ( www.hkexnews.hk )
notices of the reduction in the number of Offer Shares and/or the Offer Price, the cancelation
STRUCTURE OF THE GLOBAL OFFERING
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--- page 390 ---
of the Global Offering and the relaunch of the offering on FINI at the revised number of Offer
Shares and/or Offer Price. We will also, as soon as practicable following the decision to make
such reduction, issue a supplemental or new prospectus updating investors of the reduction in
the number of Offer Shares and/or the Offer Price, and giving investors at least three business
days to consider the new information. The supplemental or new prospectus shall include at
least the following: (a) updated Offer Price and market capitalization; (b) listing timetable and
underwriting obligations; (c) price/earnings multiple (if applicable), unaudited pro forma and
adjusted net tangible assets; and (d) use of proceeds and working capital adequacy
confirmation based on revised estimated proceeds.
In the event of a reduction in the number of Offer Shares, the Overall Coordinators may,
at their discretion, reallocate the number of Offer Shares to be offered in the Hong Kong Public
Offering and the International Offering.
Save for any subsequent changes in the number of Offer Shares and/or 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 and results of allocations of Offer Shares
under the Hong Kong Public Offering are expected to be announced on Thursday, January 8,
2026 on the website of our Company ( www.jinxunec.com ) and the website of the Stock
Exchange ( www.hkexnews.hk ).
UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms of the Hong Kong Underwriting Agreement and is conditional upon the
International Underwriting Agreement being signed and becoming unconditional.
We expect that we will enter into the International Underwriting Agreement relating to the
International Offering on Wednesday, January 7, 2026.
The underwriting arrangements under the Hong Kong Underwriting Agreement and the
International Underwriting Agreement are summarized in the section headed “Underwriting” in
this prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptances of all applications for Offer Shares will be conditional on:
(a) the Listing Committee granting the approval for the listing of, and permission to
deal in, the H Shares to be issued pursuant to the Global Offering (including the H
Shares which may be issued pursuant to the exercise of the Over-allotment Option)
on the Main Board of the Stock Exchange and such approval not subsequently
having been withdrawn or revoked prior to the Listing Date;
STRUCTURE OF THE GLOBAL OFFERING
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--- page 391 ---
(b) the execution and delivery of the International Underwriting Agreement on or about
Wednesday, January 7, 2026; and
(c) the obligations of the Underwriters under each of the respective Underwriting
Agreements becoming and remaining unconditional and not having been terminated
in accordance with the terms of the respective Underwriting Agreements,
in each case on or before the dates and times specified in the respective Underwriting
Agreements (unless and to the extent such conditions are validly waived on or before such
dates and times).
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon, among other things, the other offering becoming unconditional
and not having been terminated in accordance with its terms.
If the above conditions are not fulfilled or waived prior to the times and dates specified,
the Global Offering will lapse and the Stock Exchange will be notified immediately. We will
as soon as possible publish or cause to be published a notice of the lapse of the Hong Kong
Public Offering on the website of our Company ( www.jinxunec.com ) and the website of the
Stock Exchange ( www.hkexnews.hk ). In such eventuality, all application monies will be
returned, without interest, on the terms set forth in the section headed “How to Apply for Hong
Kong Offer Shares — D. Dispatch/Collection of Share Certificates and Refund of Application
Monies” in this prospectus. In the meantime, all application monies will be held in separate
bank account(s) with the receiving bank or other bank(s) in Hong Kong licensed under the
Banking Ordinance (Chapter 155 of the Laws of Hong Kong), as amended.
Share certificates issued in respect of the Hong Kong Offer Shares will only become valid
evidence of title at 8:00 a.m. on the Listing Date provided that the Global Offering has become
unconditional in all respects (including the Underwriting Agreements not having been
terminated in accordance with their terms) at any time prior to 8:00 a.m. on the Listing Date.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee for the granting of the listing of, and
permission to deal in, the H Shares to be issued pursuant to the Global Offering (including the
H Shares which may be issued pursuant to the exercise of the Over-allotment Option).
Save for the non-H Shares that are quoted on the NEEQ, no part of our Company’s share
or loan capital is listed on or dealt in on any other stock exchange and no such listing or
permission to deal is being or proposed to be sought in the near future.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 392 ---
H SHARES WILL BE ELIGIBLE FOR CCASS
Subject to the granting of the listing of, and permission to deal in, the H Shares 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 to enable 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.
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00
a.m. in Hong Kong on Friday, January 9, 2026, it is expected that dealings in the H Shares on
the Stock Exchange will commence at 9:00 a.m. on Friday, January 9, 2026.
The H Shares will be traded on the Main Board of the Stock Exchange in board lots of
200 H Shares each. The stock code of the H Shares will be 3636.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 393 ---
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.jinxunec.com.
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
 are 18 years of age or older;
 have a Hong Kong address ( for the White Form eIPO service only )
 are outside the United States, and are not a United States Person (as defined in
Regulation S under the U.S. Securities Act); and
 are not a legal or natural person of the PRC.
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the
person(s) for whose benefit you are applying for:
 are an existing Shareholder or close associates;
 are a Director or any of his/her close associates; or
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 394 ---
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 am on Wednesday,
December 31, 2025 and end at 12:00 noon on Tuesday, January 6, 2026 (Hong Kong time).
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application Channel Platform Target Investors Application Time
White Form eIPO
service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
www.eipo.com.hk Applicants who would
like to receive a
physical H Share
certificate. Hong Kong
Offer Shares
successfully applied
for will be allotted
and issued in your
own name.
From 9:00 am on
Wednesday,
December 31, 2025 to
12:00 midnight on
Tuesday, January 6,
2026 (Hong Kong
time).
The latest time for
completing full
payment of application
monies will be 12:00
noon on Tuesday,
January 6, 2026 (Hong
Kong time).
HKSCC EIPO channel /H1118Y our broker or custodian
who is a HKSCC
Participant will submit
electronic application
instruction(s) on your
behalf through
HKSCC’s FINI system
in accordance with
your instruction
Applicants who would
not like to receive a
physical H Share
certificate. Hong Kong
Offer Shares
successfully applied
for will be allotted
and issued in the
name of HKSCC
Nominees, deposited
directly into CCASS
and credited to your
designated HKSCC
Participant’s stock
account.
Contact your broker or
custodian for the
earliest and latest time
for giving such
instructions, as this
may vary by broker or
custodian.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 395 ---
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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 396 ---
3. Information Required to Apply
Y ou must provide the following information with your application:
For Individual/Joint Applicants For Corporate Applicants
 Full name(s) 2 as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority:
i. HKID card; or
ii. National identification
document; or
iii. Passport; and
 Identity document number
 Full name(s)
2 as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority:
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration
certificate; or
iv. Other equivalent document; and
 Identity document number
Notes:
1. If you are applying through the White Form eIPO service, you are required to provide a valid e-mail
address, a contact telephone number and a Hong Kong address. Y ou are also required to declare that the
identity information provided by you follows the requirements as described in Note 2 below. In
particular, where you cannot provide a HKID number, you must confirm that you do not hold a HKID
card.
2. The applicant’s full name as shown on their identity document must be used and the surname, given
name, middle and other names (if any) must be input in the same order as shown on the identity
document. If an applicant’s identity document contains both an English and Chinese name, both English
and Chinese names must be used. Otherwise, either English or Chinese names will be accepted. The
order of priority of the applicant’s identity document type must be strictly followed and where an
individual applicant has a valid HKID card (including both Hong Kong Residents and Hong Kong
Permanent Residents), the HKID number must be used when making an application to subscribe for
shares in a public offer. Similarly for corporate applicants, a LEI number must be used if an entity has
a LEI certificate.
3. If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will
be required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID
of the asset management company or the individual fund, as appropriate, which has opened a trading
account with the broker will be required, as above.
4. The maximum number of joint applicants on FINI is capped at 4 in accordance with market practice.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 397 ---
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 agents, have discretion to consider
whether to accept it on any conditions we think fit, including evidence of the attorney’s
authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: 200 H Shares
Permitted number of Hong
Kong Offer Shares for
application and amount
payable on application/
successful allotment /H1118/H1118/H1118/H1118/H1118
: Hong Kong Offer Shares are available for
application in specified board lot sizes only. Please
refer to the amount payable associated with each
specified board lot size in the table below.
The Offer Price is HK$30.0 per H Share.
If you are applying through the HKSCC EIPO
channel, your broker or custodian may require you
to pre-fund your application in such amount as
determined by the broker or custodian, based on
the applicable laws and regulations in Hong Kong.
Y ou are responsible for complying with any such
pre-funding requirement imposed by your broker
or custodian with respect to the Hong Kong Offer
Shares you applied for.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 398 ---
By instructing your broker or custodian to apply
for the Hong Kong Offer Shares on your behalf
through the HKSCC EIPO channel, you (and, if
you are joint applicants, each of you jointly and
severally) are deemed to have instructed and
authorized HKSCC to cause HKSCC Nominees
(acting as nominee for the relevant HKSCC
Participants) to arrange payment of the final Offer
Price, brokerage, SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction
levy by debiting the relevant nominee bank
account at the Designated Bank for your broker or
custodian.
If you are applying through the White Form eIPO
service, you may refer to the table below for the
amount payable for the number of H Shares you
have selected. Y ou must pay the respective
maximum amount payable on application in full
upon application for Hong Kong Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
200 6,060.51 3,000 90,907.66 40,000 1,212,102.00 500,000 15,151,275.00
400 12,121.02 4,000 121,210.20 50,000 1,515,127.50 600,000 18,181,530.00
600 18,181.54 5,000 151,512.76 60,000 1,818,153.00 700,000 21,211,785.00
800 24,242.05 6,000 181,815.30 70,000 2,121,178.50 800,000 24,242,040.00
1,000 30,302.56 7,000 212,117.86 80,000 2,424,204.00 900,000 27,272,295.00
1,200 36,363.05 8,000 242,420.40 90,000 2,727,229.50 1,000,000 30,302,550.00
1,400 42,423.56 9,000 272,722.96 100,000 3,030,255.00 1,200,000 36,363,060.00
1,600 48,484.08 10,000 303,025.50 200,000 6,060,510.00 1,400,000 42,423,570.00
1,800 54,544.59 20,000 606,051.00 300,000 9,090,765.00 1,600,000 48,484,080.00
2,000 60,605.10 30,000 909,076.50 400,000 12,121,020.00 1,838,200
(1) 55,702,147.41
Note:
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as
defined in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy are paid to the Stock Exchange (in the case of the SFC transaction levy, collected by the Stock
Exchange on behalf of the SFC; and in the case of the AFRC transaction levy, collected by the Stock Exchange
on behalf of the AFRC).
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 399 ---
5. Multiple Applications Prohibited
Y ou or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying investor
in your application as required under the paragraph headed “— A. Applications for Hong Kong
Offer Shares — 3. Information Required to Apply” in this section. If you are suspected of
submitting or cause to submit more than one application, all of your applications will be
rejected.
Multiple applications made either through (i) the White Form eIPO service, (ii) HKSCC
EIPO channel, or (iii) both channels concurrently are prohibited and will be rejected. If you
have made an application through the White Form eIPO service or HKSCC EIPO channel,
you or the person(s) for whose benefit you have made the application shall not apply for any
International Offer Shares.
6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the following
things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorise us and/or the
Overall Coordinators, as our agents, to execute any documents for you and to do on
your behalf all things necessary to register any Hong Kong Offer Shares allocated
to you in your name or in the name of HKSCC Nominees as required by the Articles
of Association, and (if you are applying through the HKSCC EIPO channel) to
deposit the allotted Hong Kong Offer Shares directly into CCASS for the credit of
your designated HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the White Form
eIPO service (or as the case may be, the agreement you entered into with your
broker or custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong
Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 400 ---
(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 Sole Sponsor, the Sponsor-Overall Coordinator, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead
Managers, the Capital Market Intermediaries, the Underwriters, any of their or the
Company’s respective directors, officers, employees, partners, agents, advisers and
any other parties involved in the Global Offering (collectively, the “ Relevant
Persons ”), the H Share Registrar and HKSCC will not be liable for any information
and representations not in this prospectus and any supplement to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit
you have made the application to us, the Relevant Persons, the H Share Registrar,
HKSCC, HKSCC Nominees, the Stock Exchange, the SFC and any other statutory
regulatory or governmental bodies or otherwise as required by laws, rules or
regulations, for the purposes under the paragraph headed “— G. Personal Data —
3. Purposes and 4. Transfer of personal data” in this section;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees’ application) has been
accepted) that you will not rescind it because of an innocent misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, any application made by you or HKSCC
Nominees on your behalf cannot be revoked once it is accepted, which will be
evidenced by the notification of the result of the ballot by the H Share Registrar by
way of publication of the results at the time and in the manner as specified in the
paragraph headed “— B. Publication of Results” in this section;
(x) confirm that you are aware of the situations specified in the paragraph headed “—
C. Circumstances In Which Y ou Will Not Be Allocated Hong Kong Offer Shares” in
this section;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it
and the resulting contract will be governed by and construed in accordance with the
laws of Hong Kong;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 401 ---
(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 White Form eIPO
service or by any one as your agent or by any other person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as agent
for that person by giving electronic application instructions to HKSCC and (2)
you have due authority to give electronic application instructions on behalf of that
other person as its agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 402 ---
B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through White Form eIPO service or HKSCC EIPO channel:
Website /H1118/H1118/H1118/H1118/H1118The designated results of allocation at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ; with
a “search by ID” function.
24 hours, from
11:00 p.m. on
Thursday, January 8,
2026 to 12:00
midnight on
Wednesday,
January 14, 2026
(Hong Kong time)
The full list of (i) wholly or partially
successful applicants using the White
Form eIPO service and HKSCC EIPO
channel, and (ii) the number of Hong
Kong Offer Shares conditionally allotted
to them, among other things, will be
displayed on the “Allotment Results”
page of the White Form eIPO service at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ).
The Stock Exchange’s website at
www.hkexnews.hk and our website at
www.jinxunec.com which will provide
links to the above mentioned websites of
the H Share Registrar.
No later than
11:00 p.m. on
Thursday, January 8,
2026 (Hong Kong
time).
Telephone /H1118/H1118/H1118+852 2862 8555 — the allocation results
telephone enquiry line provided by the
H Share Registrar
Between 9:00 a.m. and
6:00 p.m., on Friday,
January 9, 2026,
Monday, January 12,
2026, Tuesday,
January 13, 2026
and Wednesday,
January 14, 2026
(Hong Kong time)
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 403 ---
For those applying through HKSCC EIPO channel, you may also check with your broker
or custodian from 6:00 p.m. on Wednesday, January 7, 2026 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Wednesday, January 7, 2026 on a 24-hour basis and should report any discrepancies on
allotments to HKSCC as soon as practicable.
Allocation Announcement
We expect to announce the results of the 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.jinxunec.com by no later than 11:00 p.m. on
Thursday, January 8, 2026 (Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
Y ou should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Y our application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 404 ---
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to
the paragraph headed “— A. Applications for Hong Kong Offer Shares — 5.
Multiple Applications Prohibited” in this section on what constitutes multiple
applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Overall Coordinators believe that by accepting your application, they or
we would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
designated bank before balloting. After balloting of Hong Kong Offer Shares, the receiving
bank will collect the portion of these funds required to settle each HKSCC Participant’s actual
Hong Kong Offer Share allotment from their designated bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its designated bank), who is acting on your behalf in
settling payment for your allotted shares, HKSCC will contact the defaulting HKSCC
Participant and its designated bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Offer Shares will be reallocated to the 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 405 ---
D. DESPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one H Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the H Share certificates will be deposited into CCASS as
described below).
No temporary document of title will be issued in respect of the H Shares. No receipt will
be issued for sums paid on application.
H Share certificates will only become valid evidence of title at 8:00 a.m. on Friday,
January 9, 2026 (Hong Kong time), provided that the Global Offering has become
unconditional and the right of termination described in the section headed “Underwriting” has
not been exercised. Investors who trade Shares prior to the receipt of H Share certificates or
the H Share certificates becoming valid evidence of title do so entirely at their own risk.
The right is reserved to retain any H Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of H Share certificate 1
For physical share
certificates of 1,000,000 or
more Offer Shares issued
under your own name /H1118/H1118/H1118
Collection in person : from H
Share Registrar,
Computershare Hong Kong
Investor Services Limited
at Shops 1712-1716, 17th
Floor, Hopewell Centre,
183 Queen’s Road East,
Wan Chai, Hong Kong
Time : from 9:00 a.m. to 1:00
p.m. on Friday, January 9,
2026 (Hong Kong time)
H Share certificate(s) will be
issued in the name of
HKSCC Nominees,
deposited into CCASS and
credited to your designated
HKSCC Participant’s stock
account.
No action by you is required
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 406 ---
White Form eIPO service HKSCC EIPO channel
If you are an individual, you
must not authorise any
other person to collect for
you. If you are a corporate
applicant, your authorised
representative must bear a
letter of authorization from
your corporation stamped
with your corporation’s
chop.
Both individuals and
authorised representatives
must produce, at the time
of collection, evidence of
identity acceptable to the
H Share Registrar.
Note : If you do not collect
your H Share certificate(s)
personally within the time
above, it/they will be sent
to the address specified in
your application
instructions by ordinary
post at your own risk
For physical share
certificates of less than
1,000,000 Offer Shares
issued under your own
name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y our H Share certificate(s)
will be sent to the address
specified in your
application instructions by
ordinary post at your own
risk
Time : Thursday, January 8,
2026
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 407 ---
White Form eIPO service HKSCC EIPO channel
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Friday, January 9, 2026 Subject to the arrangement
between you and your
broker or custodian
Responsible party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118H Share Registrar Y our broker or custodian
Application monies paid
through single bank
account /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
White Form e-Refund
payment instructions to
your designated bank
account
Y our broker or custodian will
arrange refund to your
designated bank account
subject to the arrangement
Application monies paid
between you and itApplication monies paid
between you and it
through multiple bank
accounts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Refund cheque(s) will be
despatched to the address
as specified in your
application instructions by
ordinary post at your own
risk
1 Except in the event of any Severe Weather Signals (as defined below) in force in Hong Kong on the
business day before the Listing Date rendering it impossible for the relevant share certificates to be
dispatched to HKSCC in a timely manner, the Company shall procure the H Share Registrar to arrange
for delivery of the supporting documents and share certificates in accordance with the contingency
arrangements as agreed between them. Y ou may refer to “— E. Severe Weather Arrangements” in this
section.
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Tuesday, January 6, 2026 if, there is/are:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 Extreme Conditions,
(collectively, “ Severe Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Tuesday, January 6,
2026
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 408 ---
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 the section headed “ Expected Timetable ” in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.jinxunec.com of the revised timetable.
If a Severe Weather Signal is hoisted on Thursday, January 8, 2026, the H Share Registrar
will make appropriate arrangements for the delivery of the share certificates to the CCASS
Depository’s service counter so that they would be available for trading on Friday, January 9,
2026.
If a Severe Weather Signal is hoisted on Thursday, January 8, 2026:
 for physical share certificates of less than 1,000,000 offer shares issued under your
own name, despatch will be made by ordinary post when the post office re-opens
after the Severe Weather Signal is lowered or cancelled (e.g. in the afternoon of
Thursday, January 8, 2026 or on Friday, January 9, 2026).
If a Severe Weather Signal is hoisted on Friday, January 9, 2026:
 for physical share certificates of 1,000,000 or more offer shares issued under your
own name, you may pick them up from the H Share Registrar’s office after the
Severe Weather Signal is lowered or cancelled (e.g. in the afternoon of Friday,
January 9, 2026 or on Monday, January 12, 2026).
Prospective investors should be aware that if they choose to receive physical share
certificates issued in their own name, there may be a delay in receiving the share
certificates.
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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 409 ---
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS.
Y ou should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the H Share Registrar, the receiving bank and the Relevant
Persons about you in the same way as it applies to personal data about applicants other than
HKSCC Nominees. This personal data may include client identifier(s) and your identification
information. By giving application instructions to HKSCC, you acknowledge that you have
read, understood and agree to all of the terms of the Personal Information Collection Statement
below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Offer Shares, of the policies and practices of the Company and the H Share
Registrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486
of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure
that personal data supplied to the Company or its agents and the H Share Registrar is accurate
and up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer
Shares into or out of their names or in procuring the services of the H Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of the
Company or the H Share Registrar to effect transfers or otherwise render their services. It may
also prevent or delay registration or transfers of Hong Kong Offer Shares which you have
successfully applied for and/or the despatch of 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 410 ---
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for
the following purposes:
 processing your application and refund cheque and White Form e-Refund payment
instruction(s), where applicable, verification of compliance with the terms and
application procedures set out in this prospectus and announcing results of
allocation of Hong Kong Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the H
Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the 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:
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 399 –


--- page 411 ---
 the Company’s appointed agents such as financial advisers, receiving bank and
overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar for the purposes of providing its services or
facilities or performing its functions in accordance with its rules or procedures and
operating FINI and CCASS (including where applicants for the Hong Kong Offer
Shares request a deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the H
Share Registrar in connection with their respective business operation;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, including for the
purpose of the Stock Exchange’s administration of the Listing Rules and the SFC’s
performance of its statutory functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their bankers, solicitors, accountants or brokers
etc.
5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants and
holders of Hong Kong Offer Shares for as long as necessary to fulfil the purposes for which
the personal data were collected. Personal data which is no longer required will be destroyed
or dealt with in accordance with the Personal Data (Privacy) Ordinance (Chapter 486 of the
Laws of Hong Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether
the Company or the H Share Registrar hold their personal data, to obtain a copy of that data,
and to correct any data that is inaccurate. The Company and the H Share Registrar have the
right to charge a reasonable fee for the processing of such requests. All requests for access to
data or correction of data should be addressed to the Company and the H Share Registrar, at
their registered address disclosed in the section headed “Corporate information” in this
prospectus or as notified from time to time, for the attention of the company secretary, or the
H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 412 ---
The following is the text of a report set out on pages I-1 to I-73, received from the
Company’ s reporting accountants, KPMG, Certified Public Accountants, Hong Kong, for the
purpose of incorporation in this prospectus.
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF YUNNAN JINXUN RESOURCES CO., LTD. AND HUATAI
FINANCIAL HOLDINGS (HONG KONG) LIMITED
Introduction
We report on the historical financial information of Y unnan Jinxun Resources Co., Ltd.*
(ʮ̡) (the “ Company ”) and its subsidiaries (together, the “ Group ”)
set out on pages I-4 to I-73, which comprises the consolidated statements of financial position
of the Group and the statements of financial position of the Company as at 31 December 2022,
2023 and 2024 and 30 June 2025, and the consolidated statements of profit or loss and other
comprehensive income, the consolidated statements of changes in equity and the consolidated
statements of cash flows, for each of the years ended 31 December 2022, 2023 and 2024 and
the six months ended 30 June 2025 (the “ Track Record Period ”), and material accounting
policy information and other explanatory information (together, the “ Historical Financial
Information ”). The Historical Financial Information set out on pages I-4 to I-73 forms an
integral part of this report, which has been prepared for inclusion in the prospectus of the
Company dated 31 December 2025 (the “ Prospectus ”) in connection with the initial listing of
H shares of the Company on the Main Board of The Stock Exchange of Hong Kong Limited.
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of the Historical
Financial Information that gives a true and fair view in accordance with the basis of preparation
and presentation set out in Note 1 to the Historical Financial Information, and for such internal
control as the directors of the Company determine is necessary to enable the preparation of the
Historical Financial Information that is free from material misstatement, whether due to fraud
or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 “Accountants’ Reports on Historical
Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified
Public Accountants (the “ HKICPA ”). This standard requires that we comply with ethical
standards and plan and perform our work to obtain reasonable assurance about whether the
Historical Financial Information is free from material misstatement.
* For identification purposes only
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 413 ---
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material misstatement
of the Historical Financial Information, whether due to fraud or error. In making those risk
assessments, the reporting accountants consider internal control relevant to the entity’s
preparation of the Historical Financial Information that gives a true and fair view in accordance
with the basis of preparation and presentation set out in Note 1 to the Historical Financial
Information in order to design procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our
work also included evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purpose of the
accountants’ report, a true and fair view of the Company’s and the Group’s financial position
as at 31 December 2022, 2023 and 2024 and 30 June 2025, and of the Group’s financial
performance and cash flows for the Track Record Period in accordance with the basis of
preparation and presentation set out in Note 1 to the Historical Financial Information.
Review of stub period corresponding financial information
We have reviewed the stub period corresponding financial information of the Group
which comprises the consolidated statement of profit or loss and other comprehensive income,
the consolidated statement of changes in equity and the consolidated statement of cash flows
for the six months ended 30 June 2024 and other explanatory information (the “ Stub Period
Corresponding Financial Information ”). The directors of the Company are responsible for
the preparation and presentation of the Stub Period Corresponding Financial Information in
accordance with the basis of preparation and presentation set out in Note 1 to the Historical
Financial Information. Our responsibility is to express a conclusion on the Stub Period
Corresponding Financial Information based on our review. We conducted our review in
accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim
Financial Information Performed by the Independent Auditor of the Entity” issued by the
HKICPA. A review consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Hong Kong Standards
on Auditing and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. Accordingly, we do not
express an audit opinion. Based on our review, nothing has come to our attention that causes
us to believe that the Stub Period Corresponding Financial Information, for the purpose of the
accountants’ report, is not prepared, in all material respects, in accordance with the basis of
preparation and presentation set out in Note 1 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 414 ---
Report on matters under the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong limited and the Companies (Winding Up and Miscellaneous
Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to Note 29(c) to the Historical Financial Information which contains information
about the dividends paid by the Company in respect of the Track Record Period.
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
31 December 2025
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 415 ---
HISTORICAL FINANCIAL INFORMATION
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The consolidated financial statements of the Group for the Track Record Period, on which
the Historical Financial Information is based, were audited by KPMG under separate terms of
engagement with the Company in accordance with Hong Kong Standards on Auditing issued
by the HKICPA (the “ Underlying Financial Statements ”).
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 416 ---
Consolidated statements of profit or loss and other comprehensive income
(Expressed in Renminbi (“RMB”))
Y ears ended 31 December
Six months ended
30 June
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 637,303 675,701 1,769,833 595,965 963,785
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(466,810) (545,558) (1,402,166) (450,312) (741,105)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170,493 130,143 367,667 145,653 222,680------ ------ -------- ------ ------
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 6,332 3,131 1,865 1,265 818
Other gains and losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 (7,601) (35,255) (7,101) 15,237 11,555
Distribution and selling expenses /H1118/H1118 (9,498) (10,159) (11,626) (5,163) (6,252)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(44,206) (48,175) (81,173) (36,265) (59,552)
Profit from operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,520 39,685 269,632 120,727 169,249
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187(a) (6,811) (13,410) (26,870) (12,218) (8,045)
Share of losses of an associate /H1118/H1118/H1118/H111815 (14,823) (252) – – –
Profit before taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 93,886 26,023 242,762 108,509 161,204
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 (10,382) 3,123 (40,324) (15,425) (26,222)
Profit for the year/period /H1118/H1118/H1118/H1118/H1118/H111883,504 29,146 202,438 93,084 134,982
Other comprehensive income for
the year/period
Item that are or may be reclassified
subsequently to profit or loss:
Exchange differences on translation
of financial statements of overseas
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,941 3,442 3,464 1,197 (1,550)
Other comprehensive income for
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,941 3,442 3,464 1,197 (1,550)------
------ -------- ------ ------
Total comprehensive income for
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,445 32,588 205,902 94,281 133,432
Earnings per share
Basic and diluted (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H111811 0.81 0.27 1.84 0.84 1.22
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 417 ---
Consolidated statements of financial position
(Expressed in RMB)
At 31 December At 30 June
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H111812 339,428 504,961 617,621 654,834
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 – 7,608 9,433 9,634
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 6,046 20,223 20,160 20,333
Interest in an associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 2 5 2–––
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 6,405 14,459 11,041 12,199
Prepayments, deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 46,141 45,150 36,196 53,747
398,272 592,401 694,451 750,747------- -------- ------- -------
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 56,417 182,357 432,129 423,557
Trade receivables at amortised cost /H1118/H111818 1,174 491 264 2,204
Trade receivables at fair value
through profit or loss (“FVTPL”) /H1118/H111818 43,161 25,084 36,517 39,743
Prepayments, deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 58,910 42,609 81,554 114,148
Time deposit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 – – 5,000 6,050
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 79,062 39,876 123,901 126,510
238,724 290,417 679,365 712,212------- -------- ------- -------
Current liabilities
Trade payables at amortised cost /H1118/H1118/H1118/H111821 29,317 56,241 82,868 106,422
Trade payables designated at FVTPL /H1118 21 28,481 82,036 271,527 191,248
Accrued expenses and other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 78,171 93,439 104,402 99,968
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 33,495 27,989 62,782 84,735
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 11,176 10,855 34,848 39,131
Bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 81,485 195,505 207,171 176,167
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 695 250 90 139
Financial liabilities at FVTPL /H1118/H1118/H1118/H1118/H1118/H111826 246 66 – 107
263,066 466,381 763,688 697,917------- -------- ------- -------
Net current (liabilities)/assets /H1118/H1118/H1118/H1118/H1118(24,342) (175,964) (84,323) 14,295------- -------- ------- -------
Total assets less current liabilities /H1118/H1118 373,930 416,437 610,128 765,042------- -------- ------- -------
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 418 ---
At 31 December At 30 June
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current liabilities
Bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 5,904 17,706 61,456 69,019
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 529 78 – 401
Provision for restoration,
rehabilitation and environmental
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 3,581 9,380 10,746 22,123
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 3,442 – 2,944 4,758
13,456 27,164 75,146 96,301------- -------- ------- -------
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360,474 389,273 534,982 668,741
CAPITAL AND RESERVES
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 110,297 110,297 110,297 110,297
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 250,177 278,976 424,685 558,444
TOTAL EQUITY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360,474 389,273 534,982 668,741
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 419 ---
Statements of financial position of the Company
(Expressed in RMB)
At 31 December At 30 June
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H111812 2,615 2,880 1,001 2,639
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 4 4–––
Investments in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 89,663 124,257 176,814 176,814
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118759 1,649 16 59
Prepayments, deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 – 294 – 7,311
93,981 129,080 177,831 186,823
------- ------- ------- --- ------
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 4,197 23,276 8,089 30,996
Trade receivables at amortised cost /H1118/H111818 63,590 106,609 103,181 143,299
Trade receivables FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 10,867 8,561 882 87
Prepayments, deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 120,507 98,687 38,640 106,176
Time deposit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 – – 5,000 5,000
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 61,428 9,769 25,220 7,614
260,589 246,902 181,012 293,172
------- ------- ------- --- ------
Current liabilities
Trade payables at amortised cost /H1118/H1118/H1118/H111821 9,736 47,685 7,318 25,613
Trade payables designated at FVTPL /H1118 21 217 967 1,093 –
Accrued expenses and other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 82,836 37,249 51,588 82,852
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 869 2,850 169 4,042
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,863 336 2,528 6,600
Bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 49,037 41,062 44,572 42,608
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 3 0 4–––
Financial liabilities at FVTPL /H1118/H1118/H1118/H1118/H1118/H111826 246 66 – 107
145,108 130,215 107,268 161,822
------- ------- ------- ---------
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,481 116,687 73,744 131,350
------- ------- ------- ---------
Total assets less current liabilities /H1118/H1118 209,462 245,767 251,575 318,173
------- ------- ------- --- ------
Non-current liabilities
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 3 3 9–––
------- ------- ------- ---------
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209,123 245,767 251,575 318,173
CAPITAL AND RESERVES
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 110,297 110,297 110,297 110,297
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 98,826 135,470 141,278 207,876
TOTAL EQUITY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209,123 245,767 251,575 318,173
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 420 ---
Consolidated statements of changes in equity
(Expressed in RMB)
Share
capital
Capital
reserve
Statutory
reserve
Exchange
reserve
Retained
profits
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 29(b)) (Note 29(d)) (Note 29(e)) (Note 29(f))
Balance at 1 January 2022 /H1118/H1118 68,629 1,637 7,136 (14,987) 157,129 219,544
Changes in equity for 2022:
Profit and total comprehensive
income for the year /H1118/H1118/H1118/H1118/H1118– – – 15,941 83,504 99,445
Appropriation to statutory
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,459 – (4,459) –
Issuance of ordinary shares,
net of issuance cost
(Note 29(b)(ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,353 40,99 5––– 48,348
Dividends declared
(Note 29(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (6,863) (6,863)
Stock dividends declared
(Note 29(b)(i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,31 5––– (34,315) –
Balance at 31 December
2022 and 1 January 2023 /H1118 110,297 42,632 11,595 954 194,996 360,474
Changes in equity for 2023:
Profit and total comprehensive
income for the year /H1118/H1118/H1118/H1118/H1118– – – 3,442 29,146 32,588
Appropriation to statutory
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,043 – (4,043) –
Employees share-based
payments (Note 30) /H1118/H1118/H1118/H1118/H1118– 6 2 3––– 6 2 3
Dividends declared
(Note 29(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (4,412) (4,412)
Balance at 31 December
2023 and 1 January 2024 /H1118 110,297 43,255 15,638 4,396 215,687 389,273
Balance at 31 December
2023 and 1 January 2024 /H1118 110,297 43,255 15,638 4,396 215,687 389,273
Changes in equity for 2024:
Profit and total comprehensive
income for the year /H1118/H1118/H1118/H1118/H1118– – – 3,464 202,438 205,902
Appropriation to statutory
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 6,600 – (6,600) –
Employees share-based
payments (Note 30) /H1118/H1118/H1118/H1118/H1118– 4 7 0––– 4 7 0
Dividends declared
(Note 29(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (60,663) (60,663)
Balance at 31 December
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,297 43,725 22,238 7,860 350,862 534,982
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 421 ---
Share
capital
Capital
reserve
Statutory
reserve
Exchange
reserve
Retained
profits
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 29(b)) (Note 29(d)) (Note 29(e)) (Note 29(f))
(unaudited)
Balance at 1 January 2024 /H1118/H1118 110,297 43,255 15,638 4,396 215,687 389,273
Changes in equity for
the six months ended
30 June 2024:
Profit and total comprehensive
income for the period /H1118/H1118/H1118/H1118 – – – 1,197 93,084 94,281
Appropriation to statutory
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,648 – (5,648) –
Employees share-based
payments (Note 30) /H1118/H1118/H1118/H1118/H1118– 2 3 6––– 2 3 6
Dividends declared
(Note 29(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (5,515) (5,515)
Balance at 30 June 2024 /H1118/H1118/H1118110,297 43,491 21,286 5,593 297,608 478,275
Balance at 1 January 2025 /H1118/H1118 110,297 43,725 22,238 7,860 350,862 534,982
Changes in equity for
the six months ended
30 June 2025:
Profit and total comprehensive
income for the period /H1118/H1118/H1118/H1118 – – – (1,550) 134,982 133,432
Appropriation to statutory
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 6,627 – (6,627) –
Employees share-based
payments (Note 30) /H1118/H1118/H1118/H1118/H1118– 3 2 7––– 3 2 7
Balance at 30 June 2025 /H1118/H1118/H1118110,297 44,052 28,865 6,310 479,217 668,741
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 422 ---
Consolidated statements of cash flows
(Expressed in RMB)
Y ears ended 31 December
Six months ended
30 June
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Operating activities
Profit before taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,886 26,023 242,762 108,509 161,204
Adjustments for:
Depreciation of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187(c) 8,670 20,495 41,144 17,759 25,465
Depreciation of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187(c) 1,030 989 668 332 332
Amortisation of intangible assets /H11187(c) – 35 636 243 323
Expense for employees share-
based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 – 623 470 236 327
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187(a) 6,811 13,410 26,870 12,218 8,045
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (1,032) (1,309) (175) (91) (283)
Share of losses of an associate /H1118/H1118/H1118 14,823 25 2–––
Net foreign exchange
(gains)/losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 (4,061) 19,692 1,482 (2,037) (9,328)
Impairment losses/(gains):
– input value added tax (“V A T”)
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 1,930 6,780 (3,774) (1,887) 8,456
– other financial assets under
expected credit loss (“ECL”)
model /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 144 12,467 680 771 704
– property, plant and equipment /H1118/H1118 – – 4,438 – –
Losses/(gains) arising on fair
value change of financial
assets/liabilities at FVTPL /H1118/H1118/H1118/H1118 9,942 (3,635) 2,213 (12,084) (11,436)
Net (gains)/losses on disposal of
property, plant and equipment /H1118/H11186 (354) (49) 2,062 – 49
Changes in working capital:
Decrease/(increase) in inventories /H1118/H1118 24,828 (125,835) (247,048) (103,154) 8,572
Increase in trade receivables and
prepayments, deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,150) (10,448) (31,134) (48,515) (22,620)
Increase/(decrease) in trade and
other payables and accrued
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,372 98,538 225,443 94,141 (58,190)
Increase/(decrease) in contract
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,690 (5,506) 34,793 23,010 21,953
Cash generated from operations /H1118/H1118 210,529 52,522 301,530 89,451 133,573
Income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828(a) (8,349) (9,193) (8,972) (4,302) (22,040)
Net cash generated from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118202,180 43,329 292,558 85,149 111,533
------ ------ ------ ------ ------
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 423 ---
Y ears ended 31 December
Six months ended
30 June
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Investing activities
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890 323 175 91 283
Payments for the purchase of
property, plant and equipment and
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(201,465) (192,718) (171,386) (73,695) (72,120)
Proceeds from disposal of property,
plant and equipment, net of
transaction costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118689 110 210 – 119
Net cash used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(200,686) (192,285) (171,001) (73,604) (71,718)
------ ------ ------ ------ ------
Financing activities
Proceeds from issuance of ordinary
shares, net of issuance cost /H1118/H1118/H1118/H1118/H111848,34 8––––
Increase in time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (5,000) (5,000) (1,050)
Payments for costs incurred in
connection with the proposed
initial public offering of H shares /H1118 –––– (5,726)
(Increase)/decrease in deposits to
secure guarantees granted by third
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,000) 2,00 0–––
Dividends paid to shareholders of
the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,863) (4,412) (60,663) (5,515) –
Proceeds from bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820(b) 100,165 262,477 512,170 228,928 147,369
Repayment of bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820(b) (81,861) (137,888) (458,700) (220,607) (168,705)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820(b) (6,284) (12,331) (25,962) (5,582) (8,696)
Capital element of lease rentals
paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820(b) (931) (416) (241) (116) (103)
Interest element of lease rentals
paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820(b) (78) (75) (10) (6) (14)
Net cash generated from/(used in)
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,496 109,355 (38,406) (7,898) (36,925)
------
------ ------ ------ ------
Net increase/(decrease) in cash
and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,990 (39,601) 83,151 3,647 2,890
Cash and cash equivalents at
1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820(a) 27,001 79,062 39,876 39,876 123,901
Effect of foreign exchange rate
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871 415 874 151 (281)
Cash and cash equivalents at
end of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H111820(a) 79,062 39,876 123,901 43,674 126,510
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 424 ---
NOTES TO THE HISTORICAL FINANCIAL INFORMATION
(Expressed in RMB unless otherwise indicated)
1 BASIS OF PREPARATION AND PRESENTATION OF HISTORICAL FINANCIAL INFORMATION
Y unnan Jinxun Resources Co., Ltd. (ʮ̡, the “Company”) was established in the
People’s Republic of China (the “ PRC”) on 21 January 2010 as a limited liability company under the laws of the PRC
and was converted into a joint stock limited liability company on 15 July 2016. Its shares have been quoted on the
National Equities Exchange and Quotations (the “ NEEQ ”) since February 2017 (Stock Code: 870844).
The Company and its subsidiaries (together, the “Group”) are principally engaged in the mineral processing,
smelting and trading of non-ferrous metals.
The statutory financial statements of the Company for the years ended 31 December 2022, 2023 and 2024 were
prepared in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance of
the PRC and audited by RSM China Accounting Firm (Special General Partnership) (ה(౷ஷΥ
ྫ)) (“ RSM China ”).
The Company had direct or indirect interests in the following subsidiaries, all of which are private companies:
Name of company
Place of
establishment
and business
Date of
establishment
Particulars of
registered/
paid-in capital
The
Group’s
effective
interest
Held by the
Company
Held by
subsidiaries
Principal
activities
Shanghai Jinxun New
Energy Co., Ltd.
(Notes (i) and (ii)) ɪ
ʮ̡
(“Jinxun Shanghai”) /H1118/H1118
The PRC 3 February
2016
RMB10,000,000/
RMB10,000,000
100% 100% – Investment
holding and
mining trading
business
Rong Xing Investments
Limited (Notes (iii))
(“Rong Xing
Investments”) /H1118/H1118/H1118/H1118/H1118
Zambia 16 August
2016
Zambian Kwacha
(“ZMW”)20,000/
ZMW20,000
100% 99% 1% Smelting,
processing and
sales of cathode
copper and
copper
concentrate
Tibet Huiyi Information
Technology Co., Ltd.
(Notes (i) and (iv))
(“Tibet Huiyi”) Гᔛි
ʮ̡ /H1118/H1118
The PRC 21 February
2017
RMB20,000,000/
RMB20,000,000
100% 100% – Mining trading
business
Jinxun (Singapore)
International Trade
PTE. Ltd. (Notes (v))
(“ Jinxun Singapore”) /H1118
Singapore 25 April 2018 Singapore Dollar
(“SGD”)14,141,374/
SGD14,141,374
100% 100% – Mining trading
business
Jin Xun Congo Mining
SARL (Notes (vi)) /H1118/H1118/H1118
The
Democratic
Republic of
the Congo
(“DRC”)
13 August
2018
United States
Dollar
(“USD”)10,000/
USD10,000
100% – 100% Smelting and sales
of cathode
copper and
cobalt
Minera Jinxun Peru
S.A.C. (Notes (vii)) /H1118/H1118
Peru 14 October
2020
Peruvian Nuevo Sol
(“SOL”)2,168,054/
SOL2,168,054
100% 1% 99% Mining trading
business
Anhui Jinxun New
Energy Material Co.,
Ltd. (Notes (i) and
(ii)))ᆛอঐ๕
ʮ̡ (“Jinxun
Anhui”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The PRC 8 October
2022
USD10,000,000/
USD5,499,821
100% – 100% Manufacturing and
sale of cobalt
related material
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 425 ---
Notes:
(i) These entities were registered as limited liability companies under the laws and regulations in the PRC. The
official names of the entities are in Chinese. The English translations are for identification only.
(ii) The statutory financial statements of these entities for the years ended 31 December 2022, 2023 and 2024 were
prepared in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of
Finance of the PRC and audited by RSM China.
(iii) The statutory financial statements of the entity for the years ended 31 December 2022, 2023 and 2024 were
prepared in accordance with IFRS Accounting Standards and audited by HLB Zambia Audit Services Limited.
(iv) The statutory financial statements of the entity for the years ended 31 December 2022, 2023 and 2024 were
prepared in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of
Finance of the PRC and audited by Anhui Jinkaicheng Certified Public Accountants (General Partnership) ( τ
ה(౷ஷΥྫ)).
(v) The statutory financial statements of the entity for the years ended 31 December 2022, 2023 and 2024 were
prepared in accordance with Financial Reporting Standards in Singapore and audited by CLA Global TS Public
Accounting Corporation.
(vi) As at the date of this report, no audited financial statements have been prepared for the entity.
(vii) The statutory financial statements of the entity for the fiscal years ended 31 December 2022, 2023 and 2024
were prepared in accordance with IFRS Accounting Standards. Financial statements of the entity for the fiscal
years ended 31 December 2022 and 2023 were audited by P&S Auditores, Consultores and financial statements
of the entity for the year ended 31 December 2024 was audited by ECOVIS Peru.
All companies now comprising the Group have adopted 31 December as their financial year end date.
The Historical Financial Information has been prepared in accordance with all applicable IFRS Accounting
Standards as issued by the International Accounting Standards Board (the “IASB”). Further details of the material
accounting policy information are set out in Note 2.
The IASB has issued a number of new and revised IFRS Accounting Standards. For the purpose of preparing
this Historical Financial Information, the Group has adopted all applicable new and revised IFRS Accounting
Standards to the Track Record Period, except for any new or revised standards or interpretations that are not yet
effective for the accounting period beginning on 1 January 2025. The revised and new accounting standards and
interpretations issued but not yet effective for the accounting period beginning on 1 January 2025 are set out in Note
36.
The Historical Financial Information also complies with the applicable disclosure provisions of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
The accounting policies set out below have been applied consistently to all periods presented in the Historical
Financial Information.
The Stub Period Corresponding Financial Information has been prepared in accordance with the same basis of
preparation and presentation adopted in respect of the Historical Financial Information.
The Historical Financial Information are presented in Renminbi (“ RMB”) and all values are rounded to the
nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 426 ---
2 MATERIAL ACCOUNTING POLICY INFORMATION
(a) Basis of measurement
The measurement basis used in the preparation of the Historical Financial Information is the historical cost
basis except that the following assets and liabilities are stated at their fair value as explained in the accounting
policies set out below:
 Trade receivables and trade payables under provisional priced sales arrangements (see Note 2(d), 2(l)
and 2(n)); and
 derivative financial instruments (see Note 2(d)).
(b) Use of estimates and judgements
The preparation of Historical Financial Information in conformity with IFRS Accounting Standards requires
management to make judgements, estimates and assumptions that affect the application of policies and reported
amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under the circumstances, the results of which
form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRS Accounting Standards that have significant effect
on the Historical Financial Information and major sources of estimation uncertainty are discussed in Note 3.
(c) Subsidiaries and associate
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements
Historical Financial Information from the date on which control commences until the date on which control ceases.
Intra-group balances and transactions, and any unrealised income and expenses (except for foreign currency
transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealised losses resulting from
intra-group transactions are eliminated in the same way as unrealised gains, but only to the extent that there is no
evidence of impairment.
An interest in an associate is accounted for using the equity method. They are initially recognised at cost,
which includes transaction costs. Subsequently, the consolidated financial statements include the Group’s share of the
profit or loss and other comprehensive income (“OCI”) of those investees, until the date on which significant
influence or joint control ceases.
When the Group’s share of losses exceeds its interest in the associate, the Group’s interest is reduced to nil
and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of the investee. For this purpose, the Group’s interest is the carrying amount
of the investment under the equity method together with any other long-term interests that in substance form part of
the Group’s net investment in the associate.
Unrealised gains arising from transactions with equity-accounted investees are eliminated against the
investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent there is no evidence of impairment.
In the Company’s statement of financial position, an investment in a subsidiary is stated at cost less impairment
losses (see Note 2(h)(ii)), unless it is classified as held for sale (or included in a disposal group classified as held
for sale).
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 427 ---
(d) Derivative financial instruments
The Group holds derivative financial instruments to manage its commodity price risk exposures. The Group’s
derivative financial instruments mainly include copper future contracts and those embedded in provisional price
arrangements.
Derivatives are initially measured at fair value. Subsequently, they are measured at fair value with changes
therein recognised in profit or loss (“FVTPL”).
Provisional price arrangements are initially measured at fair value. Subsequently, they are measured at FVTPL
(see Note 2(l) and Note 2(n)).
(e) Property, plant and equipment
Property, plant and equipment are stated at cost, which includes capitalised borrowing costs, less accumulated
depreciation and any accumulated impairment losses (see Note 2(h)(ii)).
If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted for as separate items (major components).
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Depreciation is recognised so as to write off the cost of assets other than construction in progress less their
residual values over their estimated useful lives, using the straight-line method.
The estimated useful lives for the Track Record Period for property, plant and equipment (other than
construction in progress) are as follows:
Estimated useful lives
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810-20 years
Machinery equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 years
Electronic, transportation equipment and others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-5 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
Construction in progress represents property, plant and equipment under construction, which is stated at cost
less accumulated impairment losses (see Note 2(h)(ii)). Capitalisation of construction costs ceases and the
construction in progress is transferred to property, plant and equipment when substantially all of the activities
necessary to prepare the assets for their intended use are completed. No depreciation is provided in respect of
construction in progress until it is substantially completed and ready for its intended use.
(f) Intangible assets
Intangible assets that have finite useful lives are measured at cost less accumulated amortisation and any
accumulated impairment losses (see Note 2(h)(ii)).
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using
the straight-line method over their estimated useful lives, if any, and is generally recognised in profit or loss.
The estimated useful lives of the exploitation certificate are determined based on the validity period of the
exploitation certificate. The estimated useful lives for the exploitation certificate are 16 years.
Amortization methods, useful lives and residual values are reviewed annually and adjusted if appropriate.
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(g) Leased assets
At inception of a contract, the Group assesses whether the 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. Control is conveyed where the customer has both the right to direct the use of the
identified asset and to obtain substantially all of the economic benefits from that use.
(i) As a lessee
Where the contract contains lease component(s) and non-lease component(s), the Group has elected not to
separate non-lease components and accounts for each lease component and any associated non-lease components as
a single lease component for all leases.
At the lease commencement date, the Group recognises a right-of-use asset and a lease liability, except for
short-term leases that have a lease term of 12 months or less and leases of low-value assets. When the Group enters
into a lease in respect of a low-value asset, the Group decides whether to capitalise the lease on a lease-by-lease basis.
The lease payments associated with those leases which are not capitalised are recognised as an expense on a
systematic basis over the lease term.
Where the lease is capitalised, the lease liability is initially recognised at the present value of the lease
payments payable over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot
be readily determined, using a relevant incremental borrowing rate. After initial recognition, the lease liability is
measured at amortised cost and interest expense is calculated using the effective interest method. V ariable lease
payments that do not depend on an index or rate are not included in the measurement of the lease liability and hence
are charged to profit or loss in the accounting period in which they are incurred.
The right-of-use asset recognised when a lease is capitalised is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore
the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is
subsequently stated at cost less accumulated depreciation.
The lease liability is remeasured when there is a change in future lease payments arising from a change in an
index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value
guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination
option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
In the consolidated statements of financial position, the current portion of long-term lease liabilities is
determined as the present value of contractual payments that are due to be settled within twelve months after the
reporting period.
(ii) As a lessor
The Group determines at lease inception whether each lease is a finance lease or an operating lease. A lease
is classified as a finance lease if it transfers substantially all the risks and rewards incidental to the ownership of an
underlying assets to the lessee. Otherwise, the lease is classified as an operating lease.
When a contract contains lease and non-lease components, the Group allocates the consideration in the contract
to each component on a relative stand-alone selling price basis. The rental income from operating leases is recognised
in profit or loss on a straight line basis over the term of the leases.
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(h) Credit losses and impairment of assets
(i) Credit losses from financial instruments
The Group recognises a loss allowance for expected credit losses (“ECLs”) on financial assets measured at
amortised cost (including cash and cash equivalents, trade receivables measured at amortised cost, input V A T
receivables, other receivables, deposits and bank deposit and bank balances).
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present
value of all expected cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance
with the contract and the cash flows that the Group expects to receive).
The expected cash shortfalls are discounted using the following discount rates where the effect of
discounting is material:
– fixed-rate financial assets, trade receivables, deposits and other receivables: effective interest rate
determined at initial recognition or an approximation thereof;
– variable-rate financial assets: current effective interest rate.
The maximum period considered when estimating ECLs is the maximum contractual period over which
the Group is exposed to credit risk.
ECLs are measured on either of the following bases:
– 12-month ECLs: these are losses that are expected to result from possible default events within
the 12 months after the reporting date (or a shorter period if the expected life
of the instrument is less than 12 months); and
– lifetime ECLs: these are losses that are expected to result from all possible default events
over the expected lives of the items to which the ECL model applies.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following,
which are measured at 12-months ECLs:
– financial instruments that are determined to have low credit risk at the reporting date; and
– other financial instruments for which credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables measured at amortised cost are always measured at an amount
equal to lifetime ECLs.
Significant increases in credit risk
When determining whether the credit risk of a financial instrument has increased significantly since
initial recognition and when measuring ECLs, the Group considers reasonable and supportable information that
is relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on the Group’s historical experience and informed credit assessment, that
includes forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than
30 days past due.
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The Group considers a financial asset to be in default when:
– the debtor is unlikely to pay its credit obligations to the Group in full, without recourse by the
Group to actions such as realising security (if any is held); or
– the financial asset is 90 days past due.
The Group considers a financial instrument to have low credit risk when its credit risk rating is
equivalent to the globally understood definition of ‘investment grade’.
ECLs are remeasured at each reporting date to reflect changes in the financial instrument’s credit risk
since initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit
or loss. The Group recognises an impairment gain or loss for all financial instruments with a corresponding
adjustment to their carrying amount through a loss allowance account, except FVOCI (with recycling) financial
assets.
Credit-impaired financial assets
At each reporting date, the Group assesses whether a financial asset is credit-impaired. A financial asset
is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows
of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable events:
– significant financial difficulties of the debtor;
– a breach of contract, such as a default or past due event;
– it becoming probable that the borrower will enter into bankruptcy or other financial
reorganisation;
– significant changes in the technological, market, economic or legal environment that have an
adverse effect on the debtor; or
– the disappearance of an active market for a security because of financial difficulties of the issuer.
Write-off policy
The gross carrying amount of a financial asset, lease receivable or contract asset is written off (either
partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when
the Group determines that the debtor does not have assets or sources of income that could generate sufficient
cash flows to repay the amounts subject to the write-off.
Subsequent recoveries of an asset that was previously written off are recognised as a reversal of
impairment in profit or loss in the period in which the recovery occurs.
(ii) Impairment of non-current assets
At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets (other
than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units
(“CGU”s).
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of
disposal. V alue in use is based on the estimated future cash flows, discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset
or CGU.
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An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of
any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro
rata basis.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or CGU or a group of
CGUs) is increased to the revised estimate of its recoverable amount, but not to an amount exceeding the carrying
amount that would have been determined had no impairment loss been recognised for the asset (or a CGU or a group
of CGUs) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
(i) Inventories
Inventories are stated at the lower of cost and net realisable value.
Costs of inventories are determined on the following bases:
– Purchased copper related materials and all other materials, including spare parts and consumables, are
valued on weighted average basis.
– Finished products are valued at raw material cost plus costs of conversion, comprising labour costs and
an attributable proportion of manufacturing overheads based on normal levels of activity.
Net realisable value represents the estimated selling price less any estimated costs of completion and the
estimated costs necessary to make the sale.
When inventories are sold, the carrying amount of those inventories is recognised as cost of sales in the period
in which the related revenue is recognised.
(j) Environmental rehabilitation
An obligation to incur restoration, rehabilitation and environmental costs arises when environmental
disturbance is caused by the development or ongoing production of the production facilities. Costs arising from
facility decommissioning and dismantling, removal or treatment of waste materials and site and land rehabilitation,
discounted to net present value, are provided for and a corresponding amount is capitalised at the start of each project,
as soon as the obligation to incur such costs arises. These costs are charged to profit or loss over the life of the
operation through the depreciation of the asset and the unwinding of the discount on the provision. The cost estimates
are reviewed periodically and are adjusted to reflect known developments which may have an impact on the cost
estimates or life of operations. The cost of the related asset is adjusted for changes in the provision due to factors
such as updated cost estimates, new disturbance and revisions to discount rates. The adjusted cost of the asset is
depreciated prospectively over the life of the operation. The unwinding of the discount is shown as a finance cost
in profit or loss.
Costs for restoration of subsequent site damage which is caused on an ongoing basis during production are
provided for at their net present values and charged to profit or loss as production progresses. Where the costs of site
restoration are not anticipated to be significant, they are expensed as incurred.
(k) Contract liabilities
A contract liability is recognised when the customer pays non-refundable consideration before the Group
recognises the related revenue (see Note 2(s)). A contract liability is also recognised if the Group has an unconditional
right to receive non-refundable consideration before the Group recognises the related revenue. In such latter cases,
a corresponding receivable is also recognised (see Note 2(l)).
(l) Trade and other receivables
A receivable is recognised when the Group has an unconditional right to receive consideration and only the
passage of time is required before payment of that consideration is due.
Financial assets that do not meet the criteria for being measured at amortised cost or fair value to other
comprehensive income (“FVTOCI”) or designated as FVTOCI are measured at FVTPL.
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Trade receivables under provisional priced sales arrangements are measured at FVTPL. Considering that the
contractual cash flows of trade receivables vary depending on the market price at the date of final settlement, and
do not give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Trade receivables at FVTPL are measured at fair value at the end of each reporting period, with any fair value
gains or losses recognised in profit or loss and is included in the “other gains and losses” line item.
(m) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, time deposits with banks and other financial
institutions that are held for meeting short-term cash commitments, and other short-term, highly liquid investments
that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in
value, having been within three months of maturity at acquisition. Bank overdrafts that are repayable on demand and
form an integral part of the Group’s cash management are also included as a component of cash and cash equivalents
for the purpose of the consolidated cash flow statement. Cash and cash equivalents are assessed for ECL (see Note
2(h)(i)).
(n) Trade and other payables
Trade and other payables are initially recognised at fair value. Subsequent to initial recognition, trade and other
payables are stated at amortised cost or at FVTPL.
Trade payables other than those designated at FVTPL and other payables are subsequently measured at
amortised cost, using the effective interest method.
For purchase contracts containing one or more embedded derivatives, IFRS 9 permits designating the entire
combined contract as FVTPL.
Trade payables arising from provisional pricing arrangements of copper concentrates purchase are settled at
final prices set at a specified future period after shipment by suppliers based on prevailing spot prices. These trade
payables are designated at FVTPL on contract by contract basis.
(o) Interest-bearing borrowings
Interest-bearing borrowings are measured initially at fair value less transaction costs. Subsequently, these
borrowings are stated at amortised cost using the effective interest method. Interest expense is recognised in
accordance with Note 2(u).
(p) Employee benefits
(i) Short-term employee benefits and contributions to defined contribution retirement plans
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the
amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result
of past service provided by the employee and the obligation can be estimated reliably.
Obligations for contributions to defined contribution retirement plans are expensed as the related service is
provided.
(ii) Retirement benefit costs
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have
rendered service entitling them to the contributions.
The employees of the Group’s overseas subsidiaries are members of the state-managed retirement benefit
schemes operated by local government. The subsidiaries are required to contribute a certain percentage of their
payroll to the retirement benefit schemes to fund the benefits.
In addition, certain employees of the Group are members of the state-managed retirement benefit scheme
operated by the PRC government and the Group contributes a certain percentage of their payroll to the retirement
benefit scheme to fund the benefit.
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(iii) Share-based payments
The grant-date fair value of equity-settled share-based payments granted to employees is measured using
market approach. The amount is generally recognised as an expense, with a corresponding increase in equity, over
the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards
for which the related service conditions are expected to be met, such that the amount ultimately recognised is based
on the number of awards that meet the related service conditions at the vesting date. The equity amount is recognised
in the capital reserve.
(iv) Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those
benefits and when the Group recognises costs for a restructuring that involves the payment of termination benefits.
(q) Income tax
Income tax expense comprises current tax and deferred tax. It is recognised in profit or loss except to the extent
that it relates to a business combination, or items recognised directly in equity or in OCI.
Current tax comprises the estimated tax payable or receivable on the taxable income or loss for the year and
any adjustments to the tax payable or receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or received that reflects any uncertainty related
to income taxes. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also
includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised
for:
– temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences;
– temporary differences related to investment in subsidiaries and associates to the extent that the Group
is able to control the timing of the reversal of the temporary differences and it is probable that they will
not reverse in the foreseeable future; and
– those related to the income taxes arising from tax laws enacted or substantively enacted to implement
the Pillar Two model rules published by the Organization for Economic Co-operation and Development.
The Group recognised deferred tax assets and deferred tax liabilities separately in relation to its leases and
decommissioning obligations;
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount
of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits,
adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual
subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability
of future taxable profits improves.
Deferred tax assets and liabilities are offset only if certain criteria are met.
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(r) Provisions and contingent liabilities
Generally provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessment of the time value of money and the risks specific to the liability.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic
benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence
of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic
benefits is remote.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another
party, a separate asset is recognised for any expected reimbursement that would be virtually certain. The amount
recognised for the reimbursement is limited to the carrying amount of the provision.
(s) Revenue and other income
Income is classified by the Group as revenue when it arises from the sale of goods in the ordinary course of
the Group’s business.
Revenue is recognised when control over a product is transferred to the customer at the amount of promised
consideration to which the Group is expected to be entitled, excluding those amounts collected on behalf of third
parties such as value added tax or other sales taxes.
Further details of the Group’s revenue and other income recognition policies are as follows:
(i) Sale of goods
Revenue from the sale of goods is recognised when control of the goods has transferred based on the terms
of the sale contracts. In most cases, the control of goods is transferred upon delivery when the goods have been
shipped from the Group’s premises. In some other cases, the control of goods is transferred upon delivery at specific
destination ports or plants.
The Group is the principal for its revenue transactions and recognises revenue on a gross basis, including the
sale of products that are sourced externally. In determining whether the Group acts as a principal or as an agent, it
considers whether it obtains control of the products before they are transferred to the customers. Control refers to the
Group’s ability to direct the use of and obtain substantially all of the remaining benefits from the products.
The Group sells copper products under provisional pricing arrangements where final grades of copper, gold,
silver and cobalt in copper products are agreed based on third-party examination and final prices are set at a specified
date based on market prices. Revenues are recognised using forward prices for the expected date of final settlement.
The period between revenue recognition and final settlement is within one to three months. The contractual cash
flows of trade receivable vary depending on the market price at the date of final settlement, and do not represent
solely payments of principal and interest on the principal amount outstanding. Consequently, these trade receivables
resulted from provisionally priced contracts are measured at FVTPL.
(ii) Interest income
Interest income is recognised using the effective interest method. The “effective interest rate” is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying
amount of the financial asset. In calculating interest income, the effective interest rate is applied to the gross carrying
amount of the asset (when the asset is not credit-impaired). However, for financial assets that have become
credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate
to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest
income reverts to the gross basis.
(iii) Government grants
Government grants are recognised in the statement of financial position initially when there is reasonable
assurance that they will be received and that the Group will comply with the conditions attaching to them. Grants
that compensate the Group for expenses incurred are recognised as income in profit or loss on a systematic basis in
the same periods in which the expenses are incurred.
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(t) Translation of foreign currencies
Transactions in foreign currencies are translated into the respective functional currencies of group companies
at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated into the functional currency at the exchange rate when the fair value was determined.
Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at
the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or
loss.
The assets and liabilities of foreign operations are translated into RMB at the exchange rates at the reporting
date. The income and expenses of foreign operations are translated into RMB at the exchange rates at the dates of
the transactions.
Foreign currency differences are recognised in OCI and accumulated in the exchange reserve.
When a foreign operation is disposed of in its entirety or partially such that control, significant influence is
lost, the cumulative amount in the exchange reserve related to that foreign operation is reclassified to profit or loss
as part of the gain or loss on disposal. On disposal of a subsidiary that includes a foreign operation, the cumulative
amount of the exchange differences relating to that foreign operation that have been attributed to the NCI shall be
derecognised, but shall not be reclassified to profit or loss. When the Group disposes of only part of an associate
while retaining significant influence, the relevant proportion of the cumulative amount is reclassified to profit or loss.
(u) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset which
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the
cost of that asset. Other borrowing costs are expensed in the period in which they are incurred.
(v) Related parties
(a) A person, or a close member of that person’s family, is related to the Group if that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or the Group’s parent.
(b) An entity is related to the Group if any of the following conditions applies:
(i) The entity and the Group are members of the same group (which means that each parent,
subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of
a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the Group or
an entity related to the Group.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity).
(viii) the entity, or any member of a group of which it is a part, provides key management personnel
services to the Group or to the Group’s parent.
Close members of the family of a person are those family members who may be expected to influence, or be
influenced by, that person in their dealings with the entity.
APPENDIX I ACCOUNTANTS’ REPORT
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(w) Segment reporting
Operating segments, and the amounts of each segment item reported in the Historical Financial Information,
are identified from the financial information provided regularly to the Group’s most senior executive management
for the purposes of allocating resources to, and assessing the performance of, the Group’s various lines of business
and geographical locations.
Individually material operating segments are not aggregated for financial reporting purposes unless the
segments have similar economic characteristics and are similar in respect of the nature of products and services, the
nature of production processes, the type or class of customers, the methods used to distribute the products or provide
the services, and the nature of the regulatory environment. Operating segments which are not individually material
may be aggregated if they share a majority of these criteria.
3 ACCOUNTING JUDGEMENTS AND ESTIMATES
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty
at the end of the reporting period, that may have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
(a) Impairment assessment of property, plant and equipment
Property, plant and equipment is stated at costs less accumulated depreciation and impairment loss, if any. In
determining whether an asset is impaired, the Group has to exercise judgement and make estimation, particularly in
assessing: (i) whether an event has occurred or any indicators that may affect the asset value; (ii) whether the carrying
value of an asset can be supported by the recoverable amount, in the case of value in use, the net present value of
future cash flows which are estimated based upon the continued use of the asset; and (iii) the appropriate key
assumptions to be applied in estimating the recoverable amounts including cash flow projections and an appropriate
discount rate. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the CGU to which the assets are allocated, including allocation of corporate assets when
a reasonable and consistent basis of allocation can be established, otherwise recoverable amount is determined at the
smallest group of CGUs, for which the relevant corporate assets have been allocated. Changing the assumptions and
estimations, including the discount rate or the growth rate in the cash flow projections, could materially affect the
net present value used in the impairment test.
(b) Restoration, rehabilitation and environmental costs
Provision is made for costs associated with restoration and rehabilitation of certain production facilities of the
Group as soon as the obligation to incur such costs arises. Such restoration and closure costs are typical of mining,
leaching and smelting industries and they are normally incurred at the end of the life of the production facilities. The
costs are estimated on the basis of plant closure plans and the estimated discounted costs of dismantling and removing
these facilities and the costs of restoration are capitalised reflecting the Group’s obligations at that time. A
corresponding provision is created on the liability side.
The capitalised asset is charged to profit or loss through depreciation over the life of the operation and the
provision is increased during each reporting period via unwinding the discount on the provision. The management
estimates are mainly based on the local legislation. The actual costs and cash outflows may differ from estimates
because of changes in laws and regulations, changes in prices, analysis of site conditions and changes in restoration
technology.
The Group provides for such costs in accordance with the statutory requirements.
(c) Income taxes
The Group is subject to taxes in a number of jurisdictions. Significant judgement is required in determining
the tax position and the estimates and assumptions in relation to the provision for taxes, having regard to the nature
and timing of their origination and compliance with the relevant tax legislation.
APPENDIX I ACCOUNTANTS’ REPORT
– I-25 –


--- page 437 ---
Deferred tax assets are recognised only if it is probable that future taxable profits will be available to utilise
those temporary differences and losses, and the tax losses continue to be available having regard to the nature and
timing of their origination and compliance with the relevant tax legislation associated with their recoupment. In
addition, the applicable tax rate used in recognising deferred tax assets is determined by the forecast proportion of
assessable income against gross sales and the timing of the usage of tax losses when the entity was granted income
tax incentives.
(d) Impairment for input V AT receivables
In assessing the recoverable amount of input V A T receivables of certain overseas subsidiaries, 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 for which the estimates of future cash flows
have not been adjusted. The amount of the impairment loss recognised is the difference between the asset’s carrying
amount and the present value of estimated future cash flows.
4 REVENUE AND SEGMENT REPORTING
The Group is principally engaged in metal production and processing and trading business. Further details
regarding the Group’s principal activities are disclosed in Note 4(b).
(a) Revenue
(i) Disaggregation of revenue
Disaggregation of revenue from contracts with customers by major products or service lines and by the timing
of revenue recognition is as follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue from contracts with
customers
within the scope of IFRS 15 and
recognised at a point in time
Disaggregated by major products lines
Copper production and processing
– Copper cathodes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118328,220 404,785 1,228,967 448,256 828,021
– Copper concentrate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,396 12,177 946 946 1,179
– Cobalt hydroxide /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 10,739
Trading revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118246,687 258,739 539,920 146,763 123,846
637,303 675,701 1,769,833 595,965 963,785
Disaggregation of revenue from contracts with customers by geographic markets, based on the delivery
location is as follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Disaggregated by delivery location
DRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 126,370 877,004 308,104 699,681
Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118388,723 288,399 352,912 141,098 127,721
The PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241,754 260,932 409,070 112,465 84,029
Peru /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,826 – 130,847 34,298 52,354
637,303 675,701 1,769,833 595,965 963,785
APPENDIX I ACCOUNTANTS’ REPORT
– I-26 –


--- page 438 ---
Disaggregation of revenue from contracts with customers by geographic markets, based on the place of
registration of the customers is as follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Disaggregated by place of
registration
Singapore /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 27,989 406,455 169,916 496,828
Switzerland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 11,718 265,917 106,523 128,917
Chinese Mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241,754 350,521 634,035 199,708 120,965
Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118220,925 83,610 25,598 – 86,397
British Virgin Islands /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107,295 192,513 266,201 98,266 78,255
Luxembourg /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 170,167 20,092 47,241
Peru /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,827 – 514 514 4,003
Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,502 9,350 946 946 1,179
637,303 675,701 1,769,833 595,965 963,785
During the Track Record Period, the Group’s customers with whom transactions have exceeded 10% of the
total revenue of the Group in the respective years are as follows. Details of concentrations of credit risk arising from
largest debtors are set out in Note 31(a).
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Customer A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118281,428 92,960 * * *
Customer B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107,295 192,513 266,201 98,266 *
Customer C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874,563 * * * –
Customer D /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* 124,466 * * –
Customer E /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– * 233,377 126,329 150,760
Customer F /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– * * 62,824 128,917
Customer G /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – * – 237,235
*: The corresponding customer did not contribute over 10% of the total revenue of the Group in the
respective year/period.
The Group applies the practical expedient in paragraph 121(a) of IFRS 15 of not disclosing the transaction
price allocated to the remaining performance obligation as the original expected duration of substantially all the
contracts of the Group are within one year or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-27 –


--- page 439 ---
(b) Segment reporting
The Group manages its businesses by divisions, which are organised by business lines (products and services).
In a manner consistent with the way in which information is reported internally to the Group’s most senior executive
management for the purposes of resource allocation and performance assessment, the Group has presented the
following two reportable segments. No operating segments have been aggregated to form the following reportable
segment.
 Metal production and processing – Production and sale of copper cathodes which are produced using the
solvent extraction electrowinning technology, processing and sale of copper concentrate, and processing
and sale of cobalt and related material.
 Trading business – Trading business for non-ferrous metal.
(i) Segment results
For the purposes of assessing segment performance and allocating resources between segments, the Group’s
senior executive management monitors the results attributable to each reportable segment on the following bases:
Revenue and expenses are allocated to the reportable segments with reference to revenue generated by those
segments and the expenses incurred by those segments. The measure used for reporting segment result is gross profit.
The Group’s other operating income and expenses, such as other income, other gains and losses, distribution
and selling expenses and administrative expenses are not measured under individual segments. The Group’s most
senior executive management monitor the Group’s assets and liabilities as a whole, accordingly, no segment assets
and liabilities is presented.
Disaggregation information regarding the Group’s reportable segments as provided to the Group’s most senior
executive management for the purposes of resource allocation and assessment of segment performance for the Track
Record Period is set out below.
2022
Metal production
and processing Trading business Total
RMB’000 RMB’000 RMB’000
Revenue from external customers and
reportable segment revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118390,616 246,687 637,303
Reportable segment gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118164,939 5,554 170,493
2023
Metal production
and processing Trading business Total
RMB’000 RMB’000 RMB’000
Revenue from external customers and
reportable segment revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118416,962 258,739 675,701
Reportable segment gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,386 9,757 130,143
APPENDIX I ACCOUNTANTS’ REPORT
– I-28 –


--- page 440 ---
2024
Metal production
and processing Trading business Total
RMB’000 RMB’000 RMB’000
Revenue from external customers and
reportable segment revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,229,913 539,920 1,769,833
Reportable segment gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118337,782 29,885 367,667
Six months ended 30 June 2024
Metal production
and processing Trading business Total
RMB’000 RMB’000 RMB’000
(unaudited)
Revenue from external customers and
reportable segment revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118449,202 146,763 595,965
Reportable segment gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130,104 15,549 145,653
Six months ended 30 June 2025
Metal production
and processing Trading business Total
RMB’000 RMB’000 RMB’000
Revenue from external customers and
reportable segment revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118839,939 123,846 963,785
Reportable segment gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118212,060 10,620 222,680
5 OTHER INCOME
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,032 1,309 175 91 283
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,628 918 266 13 332
Sale of spare parts and other materials /H1118 135 162 730 467 129
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118537 742 694 694 74
6,332 3,131 1,865 1,265 818
APPENDIX I ACCOUNTANTS’ REPORT
– I-29 –


--- page 441 ---
6 OTHER GAINS AND LOSSES
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Gains/(losses) on disposal of property,
plant and equipment, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118354 49 (2,062) – (49)
Impairment (losses)/reversals
recognised in respect of
– input V A T receivables (Note 19 ) /H1118/H1118/H1118(1,930) (6,780) 3,774 1,887 (8,456)
– financial assets under ECL /H1118/H1118/H1118/H1118/H1118/H1118/H1118(144) (12,467) (680) (771) (704)
– property, plant and equipment
(Note 12 ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (4,438) – –
Foreign exchange gains/(losses), net /H1118/H1118 4,061 (19,692) (1,482) 2,037 9,328
(Losses)/gains from changes in fair
value of financial liabilities/assets at
FVTPL
– trade receivables at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118(10,431) 3,141 2,871 17,021 11,901
– trade payables designated at FVTPL /H1118 528 461 (94) 182 (358)
– other financial liabilities at FVTPL /H1118 (39) 33 (4,990) (5,119) (107)
(7,601) (35,255) (7,101) 15,237 11,555
7 PROFIT BEFORE TAXATION
Profit before taxation is arrived at after charging/(crediting):
(a) Finance costs
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest on bank and other borrowings /H1118 7,050 13,647 26,472 11,744 8,433
Interest on lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878 75 10 6 14
Unwinding of discount (Note 27) /H1118/H1118/H1118/H1118335 916 1,025 499 996
Less: interest expense capitalised into
plant under construction (Note) /H1118/H1118/H1118/H1118(652) (1,228) (637) (31) (1,398)
6,811 13,410 26,870 12,218 8,045
Note: Interest on bank and other borrowings have been capitalised at a rate of 10.0%, 10.0% and 4.3%, 4.3%
(unaudited) and 4.3% per annum during the years ended 31 December 2022, 2023 and 2024 and the
period ended six months ended 30 June 2024, 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 442 ---
(b) Staff costs
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Salaries, wages and other benefits /H1118/H1118/H111834,100 43,807 70,332 33,613 40,111
Contributions to defined contribution
retirement schemes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,643 2,387 3,538 1,500 1,802
35,743 46,194 73,870 35,113 41,913
(c) Other items
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Depreciation of property, plant and
equipment (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,670 20,495 41,144 17,759 25,465
Amortisation of intangible assets (Note
13) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 35 636 243 323
Depreciation of right-of-use assets
(Note 14) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,030 989 668 332 332
Total amortisation and depreciation /H1118/H1118/H11189,700 21,519 42,448 18,334 26,120
Lease payments not included in the
measurement of lease liabilities /H1118/H1118/H1118/H1118299 531 1,166 708 901
Cost of inventories (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118466,810 545,338 1,402,166 450,312 741,105
Auditor’s remuneration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,283 566 547 519 538
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1 7 5
Notes:
Cost of sales of inventories includes RMB9,856,000, RMB17,536,000, RMB36,710,000, RMB16,974,000
(unaudited) and RMB18,947,000 relating to staff costs during the years ended 31 December 2022, 2023 and
2024, and the periods ended six months ended 30 June 2024, 2025, which are included in the respective total
amounts disclosed separately above or in Note 7(b).
Cost of sales of inventories also includes RMB7,067,000, RMB19,244,000, and RMB39,884,000,
RMB17,142,000 (unaudited) and RMB24,781,000 relating to depreciation and amortisation expenses during
the years ended 31 December 2022, 2023 and 2024 and the periods ended six months ended 30 June 2024,
2025, which are also included in the respective total amounts disclosed separately above.
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 443 ---
8 INCOME TAX IN THE CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
(a) Taxation in the consolidated statements of profit or loss and other comprehensive income represents:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current tax (Note 28(a))
– Income tax in the PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,119 4,128 14,835 6,529 15,342
– Income tax in Singapore /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,198 712 4,021 3,190 2,584
– Income tax in Peru /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118199 – 578 – 712
– Income tax in DRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,558 14,517 2,845 5,565
– Income tax in Zambia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,725 1,948 – 1,457 1,349
Provision for the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H111812,241 8,346 33,951 14,021 25,552
Deferred tax (Note 28(b))
Origination and reversal of temporary
differences /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,859) (11,469) 6,373 1,404 670
10,382 (3,123) 40,324 15,425 26,222
Income tax in the PRC is calculated at 25% on the estimated taxable profit.
Income tax in Singapore is calculated at 17% on the estimated taxable profit.
Income tax in Peru is calculated at 29.5% on the estimated taxable profit.
Income tax in DRC is calculated at 30% on the estimated taxable profit when 30% of the taxable profit exceeds
1% of gross sales, and calculated at 1% of gross sales when 30% of the taxable profit does not exceeds 1% of gross
sales.
Income tax in Zambia is calculated at 30% on the estimated taxable profit.
The Group enjoyed the following income tax incentives:
 Rong Xing Investments was granted a tax waiver on its income tax for the year ended 31 December 2022
of Zambian Kwacha (“ZMW”) 27,915,000 (equivalent to RMB10,409,000).
 Tibet Huiyi located in the PRC, is eligible for a 15% income tax rate from 1 January 2021 to 31
December 2030. Tibet Huiyi is also eligible for an additional 6% income tax rate relief from 1 January
2022 to 31 December 2025.
 Upon meeting certain requirements for trading businesses in Singapore, Jinxun Singapore is eligible for
a 10% income tax rate for profit arising from certain specified commodities trading revenue from 1 April
2025 to 31 March 2028.
 In Singapore, the income tax is eligible for progressive tax relief. The subsidiary of the Company is
eligible for 75% income tax relief when the profit before taxation is less than SGD10,000, 50% income
tax relief when the profit before taxation is SGD10,000 or greater but less than SGD200,000.
Certain dividend income of Jinxun Singapore from subsidiaries in the PRC and DRC is subject to withholding
tax at tax rate of 10%.
Certain dividend income of the Company and Jinxun Singapore from a subsidiary in Peru is subject to
withholding tax at tax rate of 5%.
According to the Convention between the Republic of Zambia and the PRC for the Avoidance of Double
Taxation, certain dividend income of the Company from a subsidiary in Zambia is subject to withholding tax at tax
rate of 5%.
Certain dividend income of the Company from a subsidiary in Singapore is subject to withholding tax at tax
rate of 10%.
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 444 ---
(b) Reconciliation between tax expense and accounting profit at applicable tax rates
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Profit before taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,886 26,023 242,762 108,509 161,204
Tax at income tax rate in the PRC
– for operations at 25% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,722 11,048 36,852 15,464 30,152
Tax at income tax rate in Singapore
– for operations at 17% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(138) 1,706 10,054 4,658 5,103
Tax at income tax rate in Peru
– for operations at 29.5% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118448 (506) 512 269 802
Tax at income tax rate in DRC
– for operations at 30% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,117) (3,551) 6,129 3,088 675
Tax at income tax rate in Zambia
– for operations at 30% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,003 (4,394) 4,215 2,415 1,683
Expected tax on profit before taxation,
calculated at the rate applicable to
profits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,918 4,303 57,762 25,894 38,415
Effect of changes of tax rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118322 (69) (149) – 1
Effect of tax incentives granted to the
Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(20,641) (7,729) (21,414) (10,036) (15,862)
Tax effect of non-deductible expenses /H1118 6,663 2,585 8,225 1,705 5,553
Tax effect of deductible temporary
differences not recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118409 1,134 497 142 428
Tax effect of utilisation of prior years’
unused tax losses previously and
other deductible temporary
differences not recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118(569) (87) (416) (269) –
Tax effect of non-taxable income /H1118/H1118/H1118/H1118(720) (3,260) (4,181) (2,011) (2,313)
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,382 (3,123) 40,324 15,425 26,222
9 DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS
Details of the emoluments of the directors and supervisors of the Company during the Track Record Period are
as follows:
Y ear ended 31 December 2022
Directors’
fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Share option
scheme
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive Directors:
Mr. Y uan Rong Note ((i)) /H1118/H1118 – 539 68 – 63 670
Ms. Y uan Mei Note ((i)) /H1118/H1118/H1118 – 219 149 – 15 383
Mr. Y ang Y ongchang
Note ((i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 269 64 – 15 348
Mr. Lv Jixue
Note ((i)) ((vi)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4 31– 1 1 5 5
Mr. Li Hai Note ((i)) /H1118/H1118/H1118/H1118/H1118– 143 26 – 9 178
– 1,213 308 – 113 1,634- - ---- --- - - --- ----
Supervisors:
Mr. Y an Lei Note ((ii)) /H1118/H1118/H1118/H1118– 145 43 – 9 197
Mr. Zhu Zhiming
Note ((ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 90 128 – 11 229
Ms. Li Jinhua Note ((ii)) /H1118/H1118/H1118 –2 14 2 – 97 2
– 256 213 – 29 498-- ---- --- -- --- ----
– 1,469 521 – 142 2,132
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 445 ---
Y ear ended 31 December 2023
Directors’
fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Share option
scheme
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive Directors:
Mr. Y uan Rong Note ((iii)) /H1118 – 724 37 – 68 829
Ms. Y uan Mei Note ((iii)) /H1118/H1118 – 307 46 – 16 369
Mr. Y ang Y ongchang
Note ((iii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 369 102 86 16 573
Non-executive director:
Mr. Li Mengtao Note ((iii)) /H1118 ––––––
Independent non-executive
directors:
Ms. Zheng Dongyu
Note ((iv)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 0–––– 6 0
Ms. Y ao Ronghui
Note ((iv)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 0–––– 6 0
Mr. Xia Hongying
Note ((iv)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 0–––– 6 0
180 1,400 185 86 100 1,951--- ---- --- --- --- ----
Supervisors:
Mr. Y an Lei Note ((v)) /H1118/H1118/H1118/H1118– 142 40 29 9 220
Mr. Zhu Zhiming Note ((v)) /H1118 – 65 26 6 12 109
Ms. Wang Xiuxuan
Note ((v)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–7 72 6 – 8 1 1 1
– 284 92 35 29 440---
---- --- --- --- ----
180 1,684 277 121 129 2,391
Y ear ended 31 December 2024
Directors’
fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Share option
scheme
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive Directors:
Mr. Y uan Rong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 818 – – 71 889
Ms. Y uan Mei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 315 85 – 12 412
Mr. Y ang Y ongchang /H1118/H1118/H1118/H1118/H1118– 379 86 86 15 566
Non-executive director:
Mr. Li Mengtao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Independent non-executive
directors:
Ms. Zheng Dongyu /H1118/H1118/H1118/H1118/H1118/H11186 0–––– 6 0
Ms. Y ao Ronghui /H1118/H1118/H1118/H1118/H1118/H1118/H11186 0–––– 6 0
Mr. Xia Hongying /H1118/H1118/H1118/H1118/H1118/H1118/H11186 0–––– 6 0
180 1,512 171 86 98 2,047--- ---- --- --- --- ----
Supervisors:
Mr. Y an Lei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 155 79 29 9 272
Mr. Zhu Zhiming /H1118/H1118/H1118/H1118/H1118/H1118/H1118–7 41 9 61 3 1 1 2
Ms. Wang Xiuxuan /H1118/H1118/H1118/H1118/H1118/H1118–8 73 3 – 8 1 2 8
– 316 131 35 30 512--- ---- --- --- --- ----
180 1,828 302 121 128 2,559
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 446 ---
Six months ended 30 June 2024
Directors’
fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Share option
scheme
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Executive Directors:
Mr. Y uan Rong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 388 – – 35 423
Ms. Y uan Mei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 156 54 – 7 217
Mr. Y ang Y ongchang /H1118/H1118/H1118/H1118/H1118– 187 53 43 8 291
Non-executive director:
Mr. Li Mengtao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Independent non-executive
directors:
Ms. Zheng Dongyu /H1118/H1118/H1118/H1118/H1118/H11183 0–––– 3 0
Ms. Y ao Ronghui /H1118/H1118/H1118/H1118/H1118/H1118/H11183 0–––– 3 0
Mr. Xia Hongying /H1118/H1118/H1118/H1118/H1118/H1118/H11183 0–––– 3 0
90 731 107 43 50 1,021-- --- --- -- -- ----
Supervisors:
Mr. Y an Lei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–7 35 61 4 4 1 4 7
Mr. Zhu Zhiming /H1118/H1118/H1118/H1118/H1118/H1118/H1118–3 71 7 3 66 3
Ms. Wang Xiuxuan /H1118/H1118/H1118/H1118/H1118/H1118–4 31 8 – 46 5
– 153 91 17 14 275--
--- --- -- -- ----
90 884 198 60 64 1,296
Six months ended 30 June 2025
Directors’
fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Share option
scheme
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive Directors:
Mr. Y uan Rong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 423 – – 35 461
Ms. Y uan Mei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 179 63 – 8 253
Mr. Y ang Y ongchang /H1118/H1118/H1118/H1118/H11183 194 53 43 8 301
Non-executive director:
Mr. Li Mengtao Note ((vii)) /H1118 ––––––
Independent non-executive
directors:
Ms. Zheng Dongyu /H1118/H1118/H1118/H1118/H1118/H11183 0–––– 3 0
Ms. Y ao Ronghui
Note ((ix)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 0–––– 2 0
Mr. Xia Hongying /H1118/H1118/H1118/H1118/H1118/H1118/H11183 0–––– 3 0
Mr. Wong Hok Bun Mario
Note ((xi)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 8–––– 1 8
107 796 116 43 51 1,113--- --- --- -- -- ----
Supervisors:
Mr. Y an Lei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–8 02 21 4 4 1 2 0
Mr. Zhu Zhiming /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4 0537 5 5
Ms. Wang Xiuxuan
Note ((viii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2 74–2 3 3
Ms. Gao Chang Note ((x)) /H1118/H1118 – 1 43–1 1 8
– 161 34 17 14 226--- --- --- -- -- ----
107 957 150 60 65 1,339
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 447 ---
Notes:
(i) On 19 July 2019, Mr. Y uan Rong, Ms. Y uan Mei, Mr. Y ang Y ongchang, Mr. Lv Jixue and Mr. Li Hai
were appointed as executive directors of the Company for the period from 2 August 2019 to 14 January
2023.
(ii) On 19 July 2019, Mr. Y an Lei was appointed as a supervisor of the Company for the period from 2
August 2019 to 14 January 2023. On 26 July 2021, Mr. Zhu Zhiming was appointed as a supervisor of
the Company for the period from 26 July 2021 to 14 January 2023. Ms. Li Jinhua resigned as a
supervisor of the Company on 31 August 2022.
(iii) On 14 January 2023, Mr. Y uan Rong, Ms. Y uan Mei and Mr. Y ang Y ongchang were appointed as
executive directors of the Company, and Mr. Li Mengtao was appointed as a non-executive director of
the Company for the period from 14 January 2023 to 14 January 2026.
Mr. Li Mengtao assumes a role in Chuanghe Xincai (Xiamen) Manufacturing Industry Transformation
and Upgrading Fund Partnership Enterprise (Limited Partnership) (“ ௴Υ㒥ҿ(ژ)ʺॴਿ
ΥྫΆุ(Υྫ)”, “Chuanghe Xincai”), a shareholder of the Company, and his emoluments for
services rendered by him to the Group commencing from the date of his appointment have been borne
by Chuanghe Xincai.
(iv) On 14 January 2023, Ms. Zheng Dongyu, Ms. Y ao Ronghui and Mr. Xia Hongying were appointed as
independent non-executive directors of the Company for the period from 14 January 2023 to 14 January
2026.
(v) On 14 January 2023, Mr. Y an Lei, Mr. Zhu Zhiming and Ms. Wang Xiuxuan were appointed as
supervisors of the Company for the period from 14 January 2023 to 14 January 2026.
(vi) In March 2022, Mr. Lv Jixue resigned as an executive director of the Company.
(vii) In February 2025, Mr. Li Mengtao resigned as a non-executive director of the Company.
(viii) In March 2025, Ms. Wang Xiuxuan resigned as a supervisor of the Company.
(ix) In April 2025, Ms. Y ao Ronghui resigned as an independent non-executive director of the Company.
(x) On 16 May 2025, Ms. Gao Chang was appointed as a supervisor of the Company for the period from
16 May 2025 to 14 January 2026.
(xi) On 16 May 2025, Mr. Wong Hok Bun Mario was appointed as an independent non-executive director
of the Company for the period from 16 May 2025 to 14 January 2026.
(xii) On 8 August 2025, the board of supervisors was cancelled which was approved by supervisors of the
Company.
No amounts were paid or payable by the Group to the directors as an inducement to join or upon joining the
Group or as compensation for loss of any office in connection with the management of the affairs of any member of
the Group.
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 448 ---
10 INDIVIDUALS WITH HIGHEST EMOLUMENTS
The number of directors, supervisors and other employees included in the five highest paid individuals for the
years ended 31 December 2022, 2023 and 2024 and the periods ended six months ended 30 June 2024, 2025 are set
forth below:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
(Unaudited)
Director /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811–11
Other employees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844544
55555
The emoluments of the directors and supervisors are disclosed in Note 9. The aggregate of the emoluments in
respect of the remaining highest paid individuals during the Track Record Period are as followings:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Salaries, allowances and benefits in
kind /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,195 3,818 4,927 2,280 2,206
Discretionary bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118279 417 210 115 5
Share option scheme /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–5 85 82 9 1 2 3
Retirement scheme contributions /H1118/H1118/H1118/H111830 35 45 23 10
3,504 4,328 5,240 2,447 2,344
The emoluments of the individuals who are not directors or supervisors and who are amongst the five highest
paid individuals of the Group are within the following band:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
(Unaudited)
HK$nil to HK$500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––1
HK$500,001 to HK$1,000,000 /H1118/H1118/H1118/H1118/H1118/H111832142
HK$1,000,001 to HK$1,500,000 /H1118/H1118/H1118/H1118–14–1
HK$1,500,001 to HK$2,000,000 /H1118/H1118/H1118/H111811–––
44544
During the Track Record Period, no emoluments were paid or payable by the Group to these individuals as an
inducement to join or upon joining the Group or as compensation for loss of office in connection with the
management of the affairs of any member of the Group.
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 449 ---
11 EARNINGS PER SHARE
(a) Basic earnings per share
The calculation of the basic earnings per share during the Track Record Period is based on the profit
attributable to ordinary equity shareholders of the Company and the weighted average number of ordinary shares in
issue or deemed to be in issue during the Track Record Period.
As described in Note 29(b), the Company issued an aggregate stock dividend of 34,314,511 shares on 16 May
2022, which for the purpose of computing the weighted average number of ordinary shares, was deemed to be in issue
prior to 1 January 2022.
Weighted average number of ordinary shares
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Number of
shares
Number of
shares
Number of
shares
Number of
shares
Number of
shares
(Unaudited)
Ordinary shares issued at 1 January /H1118/H1118/H1118/H111868,629,022 110,296,643 110,296,643 110,296,643 110,296,643
Effect of ordinary shares issued (Note
29(b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118181,31 0––––
Effect of ordinary shares deemed to be
issued (Note 29(b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,314,511 ––––
Weighted average number of ordinary
shares
in issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,124,843 110,296,643 110,296,643 110,296,643 110,296,643
(b) Diluted earnings per share
There were no dilutive potential shares outstanding during the Track Record Period. Hence, the diluted
earnings per share is the same as basic earnings per share.
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 450 ---
12 PROPERTY, PLANT AND EQUIPMENT
The Group
Buildings
Machinery
equipment
Electronic and
transportation
equipment
and others
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,419 19,812 6,200 51,596 91,027
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,039 30,826 228,910 261,775
Transfer from construction in progress /H1118/H1118 50,009 30,955 1,173 (82,137) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(109) (174) (1,621) – (1,904)
Exchange adjustments
Other adjustments: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118934 2,391 388 5,024 8,737
Provision for restoration, rehabilitation
and environmental costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(950) – – – (950)
At 31 December 2022 and
1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,303 55,023 36,966 203,393 358,685
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,456 10,725 164,687 180,868
Transfer from construction in progress /H1118/H1118 172,622 92,073 5,271 (269,966) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (91) (73) – (164)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,169 1,010 415 3,494 6,088
Other adjustments:
Provision for restoration, rehabilitation
and environmental costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,81 9––– 4,819
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241,913 153,471 53,304 101,608 550,296
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 20,280 16,856 119,457 156,593
Transfer from construction in progress /H1118/H1118 44,719 58,363 – (103,082) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(21) (452) (2,388) (291) (3,152)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,070 2,358 359 1,451 8,238
Other adjustments:
Provision for restoration, rehabilitation
and environmental costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 9 1––– 1 9 1
At 31 December 2024 and 1 January
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118290,872 234,020 68,131 119,143 712,166
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 845 5,856 48,258 54,959
Transfer from construction in progress /H1118/H1118 1,991 7,491 629 (10,111) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (434) (281) – (715)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,276) (1,030) (270) (46) (2,622)
Other adjustments:
Provision for restoration, rehabilitation
and environmental costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,42 8––– 10,428
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118302,015 240,892 74,065 157,244 774,216----- ----- ----- ----- -----
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 451 ---
Buildings
Machinery
equipment
Electronic and
transportation
equipment
and others
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Accumulated depreciation:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,837) (4,376) (2,653) – (8,866)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,155) (5,269) (3,491) – (10,915)
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 163 1,383 – 1,569
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(166) (668) (211) – (1,045)
At 31 December 2022 and
1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,135) (10,150) (4,972) – (19,257)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,859) (8,329) (9,158) – (25,346)
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–2 62 6 –5 2
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(175) (486) (123) – (784)
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,169) (18,939) (14,227) – (45,335)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,251) (17,984) (12,233) – (44,468)
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 316 559 – 880
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(320) (502) (315) – (1,137)
At 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(26,735) (37,109) (26,216) – (90,060)
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,739) (11,350) (6,454) – (25,543)
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 90 138 – 228
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136 202 122 – 460
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(34,338) (48,167) (32,410) – (114,915)----- ----- ----- ----- -----
Accumulated impairment:
At 31 December 2022,
31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Charge for the year (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,576) (2,862) – – (4,438)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(16) (31) – – (47)
At 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,592) (2,893) – – (4,485)
Charge for the period (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 1 2–– 1 8
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,586) (2,881) – – (4,467)-----
----- ----- ----- -----
Net book value:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,168 44,873 31,994 203,393 339,428
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118229,744 134,532 39,077 101,608 504,961
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118262,545 194,018 41,915 119,143 617,621
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118266,091 189,844 41,655 157,244 654,834
As at 31 December 2022, 2023, 2024 and 30 June 2025, the Group pledged property, plant and equipment with
a net carrying amount of RMB21,116,000, RMB86,223,000 and RMB190,665,000 and RMB143,018,000 to secure
loans amounting to RMB14,226,000, RMB33,053,000, RMB90,457,000 and RMB96,057,000, respectively.
Note: In 2024, certain flotation facilities of Rong Xing Investments were not expected to be used in future and
was therefore fully impaired.
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 452 ---
The Company
Machinery
equipment
Electronic and
transportation
equipment and
others
Construction
in Process Total
RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874 2,214 586 2,874
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 306 1,288 1,594
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,087) – (1,087)
At 31 December 2022 and
1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874 1,433 1,874 3,381
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 589 – 589
Transfer from construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,758 (1,758) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (11) – (11)
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874 3,769 116 3,959
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 386 185 571
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2,084) (290) (2,374)
At 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874 2,071 11 2,156
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 271 1,595 1,866
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (123) – (123)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874 2,219 1,606 3,899--- ----- ----- -----
Accumulated depreciation:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(47) (1,536) – (1,583)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7) (189) – (196)
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,013 – 1,013
At 31 December 2022 and
1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(54) (712) – (766)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7) (311) – (318)
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118–5–5
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(61) (1,018) – (1,079)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7) (407) – (414)
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 338 – 338
At 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(68) (1,087) – (1,155)
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2) (155) – (157)
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118–5 2 –5 2
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(70) (1,190) – (1,260)--- ----- ----- -----
Net book value:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 721 1,874 2,615
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 2,751 116 2,880
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 984 11 1,001
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 1,029 1,606 2,639
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 453 ---
13 INTANGIBLE ASSETS
The Group
Exploitation certificate
RMB’000
Cost:
At 31 December 2022 and 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,645
At 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,645
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,358
Exchange adjustment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118113
At 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,116
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118562
Exchange adjustment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(42)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,636-----
Accumulated amortisation:
At 31 December 2022 and 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(35)
Exchange adjustment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2)
At 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(37)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(636)
Exchange adjustment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10)
At 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(683)
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(323)
Exchange adjustment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,002)-----
Net book value:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,608
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,433
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,634
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 454 ---
14 RIGHT-OF-USE ASSETS
The Group
Properties leased
for own use
Interest in
leasehold land held
for own use Total
RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,772 4,433 7,205
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118468 – 468
Expiration of lease term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(834) – (834)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861 410 471
At 31 December 2022 and 1 January 2023 /H1118/H1118/H1118/H1118/H11182,467 4,843 7,310
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118198 15,526 15,724
Expiration of lease term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(411) – (411)
Early termination of lease term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,573) – (1,573)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1) 81 80
At 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118680 20,450 21,130
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 431 431
Expiration of lease term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(225) – (225)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 180 182
At 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H1118457 21,061 21,518
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118553 – 553
Expiration of lease term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(189) – (189)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (52) (52)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118821 21,009 21,830----- - - - - -----
Accumulated depreciation:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(824) (174) (998)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(917) (113) (1,030)
Expiration of lease term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118834 – 834
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(49) (21) (70)
At 31 December 2022 and 1 January 2023 /H1118/H1118/H1118/H1118/H1118(956) (308) (1,264)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(756) (233) (989)
Expiration of lease term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118411 – 411
Early termination of lease term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118944 0 944
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 (10) (9)
At 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118(356) (551) (907)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(241) (427) (668)
Expiration of lease term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118225 – 225
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1) (7) (8)
At 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H1118(373) (985) (1,358)
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(114) (218) (332)
Expiration of lease term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118189 – 189
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(296) (1,201) (1,497)----- - - - - -----
Net book value:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,511 4,535 6,046
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118324 19,899 20,223
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884 20,076 20,160
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118525 19,808 20,333
APPENDIX I ACCOUNTANTS’ REPORT
– I-43 –


--- page 455 ---
Notes:
(i) Property leased for own use represents the right to use properties as its offices through tenancy
agreements. The leases run for an initial period of 2 to 5 years.
(ii) Interest in leasehold land held for own use represented land use right premiums paid by the Group for
land situated in the PRC, Zambia and DRC. Lump sum payments were made upfront for these interests
in leasehold land, and there are no ongoing payments to be made under the terms of the land lease. The
period for these land use rights is no more than 25 to 99 years.
(iii) As at 31 December 2022, 2023, 2024 and 30 June 2025, the Group pledged right-of-use assets with a
net carrying amount of RMB4,535,000, RMB2,588,000, RMB14,493,000 and RMB14,307,000 to secure
loans amounting to RMB14,226,000, RMB33,053,000, RMB90,457,000 and RMB 96,057,000,
respectively.
The Group does not have the option to renew or early terminate the lease and there are no significant
restrictions or covenants imposed to the lease. None of the leases includes variable lease payments.
Details of the maturity analysis of lease liabilities are set out in Note 25.
15 INTEREST IN AN ASSOCIATE
Place of establish
and business
Particulars of
paid-up capital
Proportion of
ownership
interest held by
the Group Principal activity
Name of associate
Jiangxi Tungsten Jinxun
Resources Africa SASږ
ʮ̡
(“Jiangwu Jinxun”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
The DRC USD100,000 49% Trading business
for metals
Jiangwu Jinxun is an unlisted entity whose quoted market price is not available. Jiangwu Jinxun is accounted
for using the equity method in the Historical Financial Information.
Summarised financial information of Jiangwu Jinxun, adjusted for any differences in accounting policies, and
reconciled to the carrying amounts in the Historical Financial Information, are disclosed below:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Gross amounts of the associate
Assets and liabilities:
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,825 3,563 3,435 3,451
Non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,748 257 203 203
Current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(65,058) (48,447) (48,503) (48,719)
Non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118515 (44,627) (44,865) (45,065)
Included in the above assets and
liabilities:
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118340 259 1 1
Profit or loss:
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,645 17,794 – –
(Loss)/gain and total comprehensive
income for the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118(30,251) (44,937) 64 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 456 ---
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Included in the above gains/loss:
Depreciation and amortisation /H1118/H1118/H1118/H1118/H1118/H11182,116 1,101 728 –
Reconciled to the Group’s interests
in the associate
Gross amounts of net assets/(deficit)
of the associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118515 (44,627) (44,865) (45,065)
Group’s interest held by the Company /H1118 49% 49% 49% 49%
Group’s share of net assets of the
associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118252 – – –
Carrying amount in the Historical
Financial Information /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118252 – – –
The directors of the Company considered the Group and the Company has significant influence over Jiangwu
Jinxun through its representative on the board of directors and the voting right of Jiangwu Jinxun.
16 INVESTMENTS IN SUBSIDIARIES
The Company
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Investments in subsidiaries, at cost /H1118/H1118/H1118 89,663 124,257 176,814 176,814
17 INVENTORIES
The Group
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,127 78,400 230,502 211,950
Spare parts and consumables /H1118/H1118/H1118/H1118/H1118/H1118/H11185,410 7,363 28,396 39,822
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,233 54,768 79,981 71,505
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,647 41,826 93,250 100,280
56,417 182,357 432,129 423,557
The Company
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Spare parts and consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118208 204 239 3,624
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,989 23,072 7,850 27,372
4,197 23,276 8,089 30,996
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 457 ---
18 TRADE RECEIV ABLES AT AMORTISED COST AND TRADE RECEIV ABLES AT FVTPL
The Group
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables at amortised
cost-contracts with customers /H1118/H1118/H1118/H1118/H11181,244 517 278 2,316
Less: Allowance for credit losses /H1118/H1118/H1118/H1118 (70) (26) (14) (112)
1,174 491 264 2,204
Trade receivables at FVTPL – contracts
with customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,161 25,084 36,517 39,743
Ageing analysis
The following is an ageing analysis of trade receivables at amortised cost, net of allowance for credit losses,
presented based on the invoice dates:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118649 422 264 2,204
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–7––
91 to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–6 2 – –
181 to 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118387 – – –
Over one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138 – – –
1,174 491 264 2,204
The following is an ageing analysis of trade receivables at FVTPL, presented based on the invoice dates:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,963 22,074 32,612 39,656
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,198 3,010 3,905 87
43,161 25,084 36,517 39,743
The Company
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables at amortised cost –
contracts with customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,597 106,629 103,181 143,345
Less: Allowance for credit losses /H1118/H1118/H1118/H1118 (7) (20) – (46)
63,590 106,609 103,181 143,299
Trade receivables at FVTPL – contracts
with customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,867 8,561 882 87
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 458 ---
Included in the Company’s trade receivables at amortised cost are balances with the following related
parties:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables at amortised cost –
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,462 106,240 103,181 142,429
Ageing analysis
The following is an ageing analysis of trade receivables at amortised cost, net of allowance for credit losses,
presented based on the invoice dates:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,891 3,352 16,795 36,642
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,958 17,837 9,415 21,454
91 to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,250 26,932 10,951 4,918
181 to 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 21,684 20,972 23,738
Over one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,491 36,804 45,048 56,547
63,590 106,609 103,181 143,299
The following is an ageing analysis of trade receivables at FVTPL, presented based on the invoice dates:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,867 8,561 153 –
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 729 87
10,867 8,561 882 87
APPENDIX I ACCOUNTANTS’ REPORT
– I-47 –


--- page 459 ---
19 PREPAYMENTS, DEPOSITS AND OTHER RECEIV ABLES
The Group
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current:
Prepayments for property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,123 1,071 4,624 8,682
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 71 301 332
Input V A T receivables (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H111839,921 54,980 38,130 59,848
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,903) (10,972) (6,859) (15,115)
46,141 45,150 36,196 53,747------ ----- ------ ------
Current:
Prepayments for inventories and others /H1118 4,881 3,041 14,748 10,106
Prepayments for costs incurred in
connection with the proposed initial
public offering of H shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 10,878
Input V A T receivables (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H111825,827 16,669 30,989 43,854
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,665 16,274 18,795 20,167
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,760 1,547 19,377 31,770
Loans granted to an associate /H1118/H1118/H1118/H1118/H1118/H1118/H111810,416 11,582 – –
Deposits in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,666 – –
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,151 7,024 180 648
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,790) (19,194) (2,535) (3,275)
58,910 42,609 81,554 114,148------ ------ -- ---- ------
105,051 87,759 117,750 167,895
The Company
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current:
Prepayments for property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 294 – 7,311------ ------ -- ---- ------
Current:
Prepayments for inventories and others
(to subsidiaries) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,782 21,676 – –
Prepayments for costs incurred in
connection with the proposed initial
public offering of H shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 10,878
Prepayments for inventories and others
(to third parties) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,169 2,330 3,541 3,580
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,873 666 287 1,452
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,466 6,866 3,801 3,449
Amounts due from subsidiaries /H1118/H1118/H1118/H1118/H1118/H111827,737 24,166 31,046 41,793
Dividends receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111875,600 43,000 – 45,000
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,966 4,812 47 126
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,086) (4,829) (82) (102)
120,507 98,687 38,640 106,176
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 460 ---
Note: The gross carrying amount of input V A T receivables are primarily from the subsidiaries in Zambia and
Peru. The impairment provision is estimated based on the present value of the estimated future cash
flows, discounted using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the input V A T receivables for which the estimates of future cash flows
have not been adjusted. As at 31 December 2022, 2023, 2024 and 30 June 2025, impairment provision
amounting to RMB4,508,000, RMB11,288,000, RMB7,514,000 and RMB16,896,000 respectively in
aggregate has been made on input V A T receivables.
20 CASH AND CASH EQUIV ALENTS AND OTHER CASH FLOW INFORMATION
(a) Cash and cash equivalents comprise:
The Group
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash at bank and on hand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111879,062 39,876 128,901 132,560
Less: time deposit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (5,000) (6,050)
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111879,062 39,876 123,901 126,510
The Company
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash at bank and on hand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,428 9,769 30,220 12,614
Less: time deposit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (5,000) (5,000)
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,428 9,769 25,220 7,614
The time deposits carry interest rates at 1.8% and 1.35% per annum during the year ended 31 December 2024
and the period ended 30 June 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 461 ---
(b) Reconciliation of liabilities arising from financing activities
The table below details changes in the Group’s liabilities from financing activities, including both cash and
non-cash changes. Liabilities arising from financing activities are liabilities for which cash flows were, or future cash
flows will be, classified in the Group’s consolidated statements of cash flows as cash flows from financing activities.
Bank and other
borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866,646 1,651 68,297------- ---- -------
Changes from financing cash flows:
Financing cash flows
Proceeds from new loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100,165 – 100,165
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 468 468
Interest expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,398 78 6,476
Repayment of loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(81,861) (931) (82,792)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,284) (78) (6,362)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,325 36 2,361
At 31 December 2022 and 1 January 2023 /H1118/H1118/H1118 87,389 1,224 88,613------- ---- -------
Changes from financing cash flows:
Financing cash flows
Proceeds from new loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118262,477 – 262,477
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 198 198
Early termination of the lease /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (680) (680)
Interest expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,419 75 12,494
Repayment of loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(137,888) (416) (138,304)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,331) (75) (12,406)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,145 2 1,147
At 31 December 2023 and 1 January 2024 /H1118/H1118/H1118 213,211 328 213,539------- ---- -------
Changes from financing cash flows:
Financing cash flows
Proceeds from new loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118512,170 – 512,170
Interest expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,835 10 25,845
Repayment of loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(458,700) (241) (458,941)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(25,962) (10) (25,972)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,073 3 2,076
At 31 December 2024 and 1 January 2025 /H1118/H1118/H1118 268,627 90 268,717------- ---- -------
Changes from financing cash flows:
Financing cash flows
Proceeds from new loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118147,369 – 147,369
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 553 553
Interest expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,035 14 7,049
Repayment of loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(168,705) (103) (168,808)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,696) (14) (8,710)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(444) – (444)
At 30 June 2025
/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118245,186 540 245,726
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 462 ---
Bank and other
borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
(unaudited)
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213,211 328 213,539------- - - - -------
Changes from financing cash flows:
Financing cash flows
Proceeds from new loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118228,928 – 228,928
Interest expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,713 6 11,719
Repayment of loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(220,607) (116) (220,723)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,582) (6) (5,588)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118993 3 996
At 30 June 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118228,656 215 228,871
21 TRADE PAYABLES AT AMORTISED COST AND TRADE PAYABLES AT FVTPL
The Group
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables at amortised cost /H1118/H1118/H1118/H1118/H111829,317 56,241 82,868 106,422
Trade payables at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,481 82,036 271,527 191,248
The following is an ageing analysis of trade payables at amortised cost presented based on the invoice dates:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,871 20,865 58,545 77,088
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118892 9,736 19,505 26,807
91 to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 13,686 2,506 2,017
181 to 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,290 289 208 301
Over one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118264 11,665 2,104 209
29,317 56,241 82,868 106,422
The following is an ageing analysis of trade payables at FVTPL presented based on the invoice dates:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,025 34,191 254,244 139,100
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,246 43,020 16,272 40,081
91 to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,195 4,632 – 4,045
181 to 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 193 53 8,022
Over one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 958 –
28,481 82,036 271,527 191,248
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 463 ---
The Company
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables at amortised cost /H1118/H1118/H1118/H1118/H11189,736 47,685 7,318 25,613
Trade payables at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118217 967 1,093 –
Included in the Company’s trade payables at amortised cost are balances with the following related parties:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables at amortised cost –
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,101 41,079 5,657 24,447
The following is an ageing analysis of trade payables at amortised cost presented based on the invoice dates:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,101 17,605 6,914 19,100
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,635 7,515 259 6,368
91 to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 20,055 145 –
181 to 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,510 – 145
9,736 47,685 7,318 25,613
The following is an ageing analysis of trade payables at FVTPL presented based on the invoice dates:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0 to 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881 967 306 –
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 787 –
91 to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136 – – –
217 967 1,093 –
All trade payables are expected to be settled within one year or are repayable on demand.
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 464 ---
22 ACCRUED EXPENSES AND OTHER PAYABLES
The Group
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Payables for properties, plant and
equipment and intangible assets /H1118/H1118/H1118/H111868,120 65,643 62,131 53,652
Payables for costs incurred in
connection with the proposed initial
public offering of H shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 5,152
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,367 16,084 15,143 15,130
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,926 2,773 11,585 10,934
Financial liabilities measured at
amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,413 84,500 88,859 84,868
Payroll payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,420 4,366 7,490 7,162
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118338 4,573 8,053 7,938
78,171 93,439 104,402 99,968
The Company
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Payables for properties, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118248 1,711 3,449 2,188
Payables for costs incurred in
connection with the proposed initial
public offering of H shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 5,152
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118592 15,309 15,030 15,030
Amounts due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H111877,840 17,693 27,533 57,278
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,576 387 1,503 1,191
Financial liabilities measured at
amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,256 35,100 47,515 80,839
Payroll payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,298 1,626 3,902 1,790
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118282 523 171 223
82,836 37,249 51,588 82,852
23 CONTRACT LIABILITIES
The Group
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Advance from customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,495 27,989 62,782 84,735
During each of years ended 31 December 2022, 2023 and 2024 and the period ended 30 June 2025,
respectively, revenue of RMB3,805,000, RMB33,495,000, RMB27,989,000 and RMB62,782,000 recognised was
related to contract liabilities carried forward.
As at 31 December 2022, 2023 and 2024 and 30 June 2025, all of contract liabilities is expected to be
recognised as revenue within one year.
APPENDIX I ACCOUNTANTS’ REPORT
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The Company
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Advance from customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118869 2,850 169 4,042
24 BANK AND OTHER BORROWINGS
(a) The Group’s and Company’s bank and other borrowings comprise:
The Group
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank loans:
Guaranteed by related parties and/or
third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,055 61,084 66,098 67,066
Pledged by bank deposits of a related
party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,505 – – –
Secured by property, plant and
equipment, right-of-use assets and
trade receivables of the Group /H1118/H1118/H1118/H1118/H111814,226 33,053 28,754 96,057
Guaranteed by related parties, pledged
by securities of the related parties,
and secured by property, plant and
equipment and right-of-use assets of
the Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 61,703 –
Secured by time deposits of the Group /H1118 – – 4,503 6,441
Unguaranteed and unsecured bank
loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,534 2,002 – 2,336
60,320 96,139 161,058 171,900
Other borrowings:
Guaranteed by related parties and
secured by inventories of the Group
from third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,043 21,465 – –
Unguaranteed and unsecured loans from
third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,026 95,607 107,569 73,286
27,069 117,072 107,569 73,286
87,389 213,211 268,627 245,186
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 466 ---
The Company
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank loans:
Guaranteed by related parties and/or
third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,055 41,062 40,069 38,100
Pledged by bank deposits of a related
party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,505 – – –
Secured by bank deposits of the Group /H1118 – – 4,503 4,508
43,560 41,062 44,572 42,608
Other loans
Unguaranteed and unsecured loans from
third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,477 – – –
49,037 41,062 44,572 42,608
(b) The Group’s/Company’s bank and other borrowings are repayable as follows:
As of the end of the reporting period, bank and other borrowings of the Group were repayable as follows:
The Group
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year or on demand /H1118/H1118/H1118/H1118/H1118/H1118/H111881,485 195,505 207,171 176,167----- ------ ------ ------
After 1 year but within 2 years /H1118/H1118/H1118/H1118/H1118/H11185,904 11,804 22,991 18,500
After 2 years but within 3 years /H1118/H1118/H1118/H1118/H1118– 5,902 20,000 20,000
After 3 years but within 4 years /H1118/H1118/H1118/H1118/H1118– – 18,465 20,000
After 4 years but within 5 years /H1118/H1118/H1118/H1118/H1118– – – 10,519
5,904 17,706 61,456 69,019----- ------ ------ ------
87,389 213,211 268,627 245,186
Bank and other borrowings of the Company were repayable within 1 year at the end of each reporting period.
(c) Certain of the Group’s bank and other borrowings are secured by the following assets of the Group:
The Group’s asset
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H111821,116 86,223 190,665 143,018
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,535 2,588 14,493 14,307
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,000 6,050
Trade receivables at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,110 – – –
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,157 50,000 – –
APPENDIX I ACCOUNTANTS’ REPORT
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(d) Certain of the Group’s bank and other borrowings are guaranteed by third parties, where related parties
provide counter-guarantee and/or are secured by time deposits to these third parties:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Counter-guarantee by related parties /H1118/H1118/H1118 16,019 20,022 15,015 19,910
Guarantee deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000 – – –
(e) All of the Group’s banking facilities were utilized as at 31 December 2022, 2023 and 2024. At 30 June 2025,
the Group’s unutilised banking facilities amounted to RMB190,000,000.
(f) Certain of the Group’s bank loans are subject to the fulfilment of covenants commonly found in lending
arrangements with financial institutions. If the Group were to breach the covenants, the loans would become
repayable on demand. The Group regularly monitors its compliance with these covenants. Further details of
the Group’s management of liquidity risk are set out in Note 31(b). At 31 December 2022, 2023 and 2024 and
30 June 2025, none of the covenants relating to the bank loans had been breached.
All of the Group’s bank and other borrowings are interest bearing.
(g) At 31 December 2022, 2023 and 2024 and 30 June 2025, certain bank loans were guaranteed by the
subsidiaries within the Group.
25 LEASE LIABILITIES
At the end of each reporting period, the lease liabilities were repayable as follows:
The Group
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118695 250 90 139---- --- -- ---
After 1 year but within 2 years /H1118/H1118/H1118/H1118/H1118/H1118471 78 – 108
After 2 years but within 5 years /H1118/H1118/H1118/H1118/H111858 – – 293
529 78 – 401---- --- -- ---
1,224 328 90 540
The Company
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118304 – – –- - - --- --- ---
After 1 year but within 2 years /H1118/H1118/H1118/H1118/H1118/H1118319 – – –
After 2 years but within 5 years /H1118/H1118/H1118/H1118/H11182 0–––
339 – – –--- --- --- ---
643 – – –
APPENDIX I ACCOUNTANTS’ REPORT
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26 FINANCIAL LIABILITIES AT FVTPL
Y ears ended 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-ferrous metal futures contracts /H1118/H1118/H1118 246 66 – 107
27 PROVISION FOR RESTORATION, REHABILITATION AND ENVIRONMENTAL COSTS
Y ears ended 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Balance at beginning of year/period /H1118/H1118/H1118 4,184 3,581 9,380 10,746
Provisions for new plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,023 – –
Provisions revision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(950) (204) 191 10,428
Unwinding of discount (Note 7(a)) /H1118/H1118/H1118 335 916 1,025 996
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 64 150 (47)
Balance at end of the year/period /H1118/H1118/H1118/H11183,581 9,380 10,746 22,123
The Group’s provision for restoration, rehabilitation and environmental costs is related to the Group’s
subsidiaries in Zambia and DRC which are involved in smelting operations. The provision represents the accrued cost
required to provide adequate restoration and rehabilitation measured by qualified professionals in Zambia and DRC,
as discounted at rates ranging from 10.65%, 10.67% to 11.23%, 9.36% to 12.04% and 10.72% to 12.04% per annum
during the Track Record Period, upon the completion of their operations. These amounts will be settled when
rehabilitation is undertaken, generally at the end of a project life, which ranges from 10 to 15 years.
The Directors consider that adequate provision has been made at the end of each reporting period.
28 INCOME TAX IN THE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(a) Current taxation in the consolidated statements of financial position represents:
Y ears ended 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Income tax payable at 1 January /H1118/H1118/H1118/H1118/H11185,101 8,993 8,146 33,125
Provision for the year/period
(Note 8(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,241 8,346 33,951 25,552
Income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,349) (9,193) (8,972) (22,040)
Net balance of income tax payable at
end of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,993 8,146 33,125 36,637
Represented by:
Income tax recoverable (included in tax
recoverable) (Note 19) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,183) (2,709) (1,723) (2,494)
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,176 10,855 34,848 39,131
APPENDIX I ACCOUNTANTS’ REPORT
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(b) Deferred tax assets recognised
Movement of each component of deferred tax assets
The components of deferred tax assets recognised in the consolidated statements of financial position and the movements during the year/period are a s follows:
Deferred tax arising from:
Depreciation
of property,
plant and
equipment
Impairment
of property,
plant and
equipment
Credit loss
allowance on
financial
assets
Fair value of
financial
liabilities Tax losses
Leases and
decommissioning
obligations
Unrealised
gains and
losses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,717) – 2,181 57 – 389 1,296 1,206
(Charged)/credited to the consolidated statement of
profit or loss (Note 8(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,037) – (80) 4 2,638 172 1,162 1,859
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(336) – 139 – 93 – 2 (102)
Balance at 31 December 2022 and 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118(5,090) – 2,240 61 2,731 561 2,460 2,963
(Charged)/credited to the consolidated statement of
profit or loss (Note 8(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,290) – 4,342 (45) (727) 578 9,611 11,469
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(146) – 48 – 40 – 85 27
Balance at 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118(7,526) – 6,630 16 2,044 1,139 12,156 14,459
(Charged)/credited to the consolidated statement of
profit or loss (Note 8(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,578) 1,346 (4,074) (21) (1,302) 523 (1,267) (6,373)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(129) 2 54 – 7 – 77 11
Balance at 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118(9,233) 1,348 2,610 (5) 749 1,662 10,966 8,097
(Charged)/credited to the consolidated statement of
profit or loss (Note 8(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(425) – 2,613 27 – 643 (3,528) (670)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840 (6) (18) – – (9) 7 14
Balance at 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,618) 1,342 5,205 22 749 2,296 7,445 7,441
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 470 ---
(d) Reconciliation to the consolidated statement of financial position
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,405 14,459 11,041 12,199
Net deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,442) – (2,944) (4,758)
2,963 14,459 8,097 7,441
(e) Deferred tax assets not recognised
In accordance with the accounting policy set out in Note 2(q), the Group has not recognised deferred tax assets
in respect of cumulative unused tax losses and deductible temporary differences arising from certain subsidiaries of
the Group of RMB1,718,000, RMB9,665,000, RMB3,645,000 RMB4,831,000 as at 31 December 2022, 2023 and
2024 and 30 June 2025, respectively, as it is not probable that future taxable profits against which the losses can be
utilised will be available in the relevant tax jurisdiction and entity.
The year of expiry of unused tax losses not recognised is as follows:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Y ear of expiry:
2027 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,530 1,530 1,438 1,438
2028 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,875 218 218
2029 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,325 1,325
2030 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 8 2 8
No expiry date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,734 – –
1,530 8,139 2,981 3,809
(f) Deferred tax liabilities not recognised
Pursuant to the relevant income tax law, a 10% withholding tax is levied on dividends declared from
subsidiaries in the PRC and DRC to Jinxun Singapore, and from subsidiaries in Singapore and in Zambia to the
Company. In addition, a 5% withholding tax is levied on dividends declared from a subsidiary in Peru to the Company
and Jinxun Singapore. As at 31 December 2022, 2023 and 2024 and 30 June 2025, temporary difference unrecognised
for deferred tax liabilities relating to undistributed profits of subsidiaries amounted to RMB147,385,000,
RMB150,849,000 and RMB255,076,000 and RMB292,411,000, respectively. Deferred tax liabilities of
RMB14,739,000, RMB15,085,000 and RMB22,158,000 and RMB25,501,000, have not been recognised in this
respect as it is probable that such profits will not be distributed in the foreseeable future.
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 471 ---
29 CAPITAL, RESERVES AND DIVIDENDS
(a) Movements in components of equity
The reconciliation between the opening and closing balances of each component of the Group’s consolidated
equity is set out in the consolidated statements of changes in equity. Details of the changes in the Company’s
individual components of equity during the Track Record Period are set out below:
Share capital Capital reserve
Statutory
reserve
Retained
profits Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 29(b)) (Note 29(d)) (Note 29(e))
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H111868,629 460 9,267 44,690 123,046
Changes in equity for 2022:
Profit and total comprehensive
income for the year /H1118/H1118/H1118/H1118/H1118/H1118– – – 44,592 44,592
Appropriation to reserves /H1118/H1118/H1118/H1118 – – 4,459 (4,459) –
Issue of shares, net of issuance
cost (Note 29(b)) /H1118/H1118/H1118/H1118/H1118/H1118/H11187,353 40,995 – – 48,348
Dividends declared
(Note 29(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (6,863) (6,863)
Stock dividends declared
(Note 29(b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,315 – – (34,315) –
At 31 December 2022 and
1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,297 41,455 13,726 43,645 209,123
Changes in equity for 2023
Profit and total comprehensive
income for the year /H1118/H1118/H1118/H1118/H1118/H1118– – – 40,433 40,433
Appropriation to reserves /H1118/H1118/H1118/H1118 – – 4,043 (4,043) –
Employees share-based
payments (Note 30) /H1118/H1118/H1118/H1118/H1118/H1118– 623 – – 623
Dividends declared
(Note 29(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (4,412) (4,412)
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,297 42,078 17,769 75,623 245,767
Changes in equity for 2024:
Profit and total comprehensive
income for the year /H1118/H1118/H1118/H1118/H1118/H1118– – – 66,001 66,001
Appropriation to reserves /H1118/H1118/H1118/H1118 – – 6,600 (6,600) –
Employees share-based
payments (Note 30) /H1118/H1118/H1118/H1118/H1118/H1118– 470 – – 470
Dividends declared
(Note 29(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (60,663) (60,663)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118110,297 42,548 24,369 74,361 251,575
(unaudited)
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118110,297 42,078 17,769 75,623 245,767
Changes in equity for
six months ended
30 June 2024:
Profit and total comprehensive
income for the period /H1118/H1118/H1118/H1118/H1118– – – 56,483 56,483
Appropriation to reserves /H1118/H1118/H1118/H1118 – – 5,648 (5,648) –
Employees share-based
payments (Note 30) /H1118/H1118/H1118/H1118/H1118/H1118– 236 – – 236
Dividends declared
(Note 29(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (5,515) (5,515)
At 30 June 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,297 42,314 23,417 120,943 296,971
APPENDIX I ACCOUNTANTS’ REPORT
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Share capital Capital reserve
Statutory
reserve
Retained
profits Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 29(b)) (Note 29(d)) (Note 29(e))
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118110,297 42,548 24,369 74,361 251,575
Changes in equity for
six months ended
30 June 2025:
Profit and total comprehensive
income for the period /H1118/H1118/H1118/H1118/H1118– – – 66,271 66,271
Appropriation to reserves /H1118/H1118/H1118/H1118 – – 6,627 (6,627) –
Employees share-based
payments (Note 30) /H1118/H1118/H1118/H1118/H1118/H1118– 327 – – 327
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,297 42,875 30,996 134,005 318,173
(b) Share capital
Number of shares Amount
RMB’000
Ordinary shares, issued and fully paid
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868,629,022 68,629
Stock dividends declared (Note (i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,314,511 34,315
Issuance of ordinary shares (Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,353,110 7,353
At 31 December 2022, 31 December 2023 and
31 December 2024 and 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,296,643 110,297
Notes:
(i) On 16 May 2022, stock dividends in respect of the year ended 31 December 2021 of 0.5 stock dividend
per share, in an aggregate 34,314,511 shares stock dividends was approved by the shareholders of the
Company.
(ii) On 22 December 2022, the Company entered into a capital increase agreement with an independent
investor, namely Chuanghe Xincai, pursuant to which the investor made capital injection of
RMB50,000,000 in the Company as consideration for subscription of 7,353,110 shares of the Company.
The proceeds, net of related fees and expenses of RMB1,651,000, from the subscription amounted to
RMB48,349,000, RMB7,353,000 and RMB40,995,000 were credited in the Company’s share capital and
capital reserve account, respectively.
(c) Dividends
In May 2022, stock dividends and cash dividends in respect of the year ended 31 December 2021 of 0.5 stock
dividends per share and RMB0.1 per share, in an aggregate 34,314,511 shares stock dividends and RMB6,863,000
cash dividends were approved by the shareholders of the Company.
In May 2023, cash dividends in respect of the year ended 31 December 2022 of RMB0.04 per share, in an
aggregate RMB4,412,000 was approved by the shareholders of the Company.
In May 2024, cash dividends in respect of the year ended 31 December 2023 of RMB0.05 per share, in an
aggregate RMB5,515,000 was approved by the shareholders of the Company.
In August 2024, cash dividends in respect of the six-months ended 30 June 2024 of RMB0.5 per share, in an
aggregate RMB55,148,000 was approved by the shareholders of the Company.
APPENDIX I ACCOUNTANTS’ REPORT
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(d) Capital reserve
The capital reserve comprises: (i) the difference between the carrying value of the net assets acquired and the
consideration paid for the acquisition of a business under common control; (ii) the differences between the net
proceeds of issuance of ordinary shares and the share capital of the Company; and (iii) share-based payments
expenses.
(e) Statutory reserve
In accordance with the relevant the PRC laws and regulations, the Company and the Company’s subsidiaries
incorporated in the PRC are required to transfer 10% of their net profits each year to the statutory reserve until the
reserve reaches 50% of the registered capital. The statuary reserve can be utilised in setting off accumulated losses
or increase capital and is non-distributable other than in liquidation.
(f) Exchange reserve
The exchange reserve comprises all foreign exchange differences arising from the translation of the financial
statements of the companies comprising the Group into the Group’s presentation currency. The reserve is dealt with
in accordance with the accounting policies set out in Note 2(t).
(g) Capital management
The Group’s primary objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, by
pricing products and services commensurately with the level of risk and by securing access to finance at a reasonable
cost.
The Group actively and regularly reviews and manages its capital structure to maintain a balance between the
higher shareholder returns that might be possible with higher levels of borrowings and the advantages and security
afforded by a sound capital position, and makes adjustments to the capital structure in light of changes in economic
conditions.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements during
the Track Record Period.
30 SHARE-BASED PAYMENTS
Ji’an County Heli Investment Management Center (Limited Partnership) (“ ΛτጤΥᎸҳ༟၍ଣʕː(Υ
ྫ)”) (“Heli Investment”) was established as an investment platform with the purpose of implementing employee
share-based incentives. The general partner of Heli Investment is Mr. Y uan Rong who held 10% shares of Heli
Investment, and the remaining shares of Heli Investment was primarily held by Ms. Y uan Mei.
In January 2023, certain share interests of Heli Investment (equivalent to 1,230,000 shares of the Company)
were transferred from Ms. Y uan Mei to certain employees at a price of RMB3.10 per share to encourage and retain
eligible persons to make contributions in the long-term growth of the Group, which was accounted for as equity
settled share-based payment. The fair value of the shares transferred was RMB6.80 per share which was estimated
with reference to the price of the capital increase of an independent investor in December 2022 (see Note 29(b)(ii)).
The difference with the transfer price is to be recognized in staff costs over the vesting period from January 2023
to June 2029.
In March 2025, certain share interests of Heli Investment (equivalent to 371,000 shares of the Company) were
transferred from Ms. Y uan Mei to certain employees at a price of RMB8.20 per share to encourage and retain eligible
persons to make contributions in the long-term growth of the Group, which was accounted for as equity settled
share-based payment. The fair value of the shares transferred was RMB12.00 per share which was estimated with
reference to the offer price range for the proposed initial public offering of the Company. The difference with the
transfer price is to be recognized in staff costs over the vesting period from March 2025 to April 2030.
APPENDIX I ACCOUNTANTS’ REPORT
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31 FINANCIAL RISK MANAGEMENT AND FAIR V ALUES OF FINANCIAL INSTRUMENTS
Exposure to credit, liquidity, commodity and currency risks arises in the normal course of the Group’s
business. The Group is not exposed to significant interest rate risk.
The Group’s exposure to these risks and the financial risk management policies and practices used by the
Group to manage these risks are described below.
(a) Credit risk
Credit risk refers to the risk that the Group’s counterparties default on their contractual obligations resulting
in financial losses to the Group. The Group’s credit risk exposures are primarily attributable to trade receivables at
amortised cost and trade receivables at FVTPL, other receivables, time deposit and bank balances. In order to
minimise the credit risk, the Group’s management continuously monitors the level of exposure to ensure that follow
up action is taken to recover overdue debts.
Except for trade receivables at FVTPL, the Group performed impairment assessment for financial assets and
other items under ECL model individually. Individual credit evaluations are performed on all customers requiring
credit over a certain amount. These evaluations focus on the customer’s past history of making payments when due
and current ability to pay, and take into account information specific to the customer as well as pertaining to the
economic environment in which the customer operates. After individual credit evaluations, the Directors consider that
the rest of the Group’s credit risk is insignificant.
(i) Trade receivables at FVTPL
As at 31 December 2022, 2023 and 2024 and 30 June 2025, the Group’s trade receivables at FVTPL were
debtors with an aggregate amount of RMB43,161,000, RMB25,084,000 and RMB36,517,000 and RMB39,743,000.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer
rather than the industry in which the customers operate. At 31 December 2022, 2023 and 2024 and 30 June 2025,
59%, 27% and 74% and 65% of the total trade receivables at FVTPL, respectively, was due from the Group’s largest
debtor from sales of copper products, and 100%, 85% and 98% and 96% of the total trade receivables at FVTPL,
respectively, was due from the five largest debtors from sales of copper products. In order to manage the credit risk,
the Group continuously monitor the level of exposure by ongoing review of credit records of customers to take
follow-up actions on the balances of trade receivables. These customers are large and reputable in the market and they
have been trading with the Group with good settlement history.
(ii) Trade receivables at amortised cost
As at 31 December 2022, 2023 and 2024 and 30 June 2025, included in the Group’s trade receivables at
amortised cost balance were debtors with an aggregate amount of RMB1,244,000, RMB517,000 and RMB278,000
and RMB2,316,000 and were assessed for impairment at an amount equal to lifetime ECLs. As at 31 December 2022,
2023 and 2024 and 30 June 2025, impairment allowance of RMB70,000, RMB26,000 and RMB14,000 and
RMB112,000 were made on these debtors.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer
rather than the industry in which the customers operate. At 31 December 2022, 2023 and 2024 and 30 June 2025,
45%, 62% and 100% and 57% of the total trade receivables at amortised cost, respectively, was due from the Group’s
largest debtor from sales of goods other than copper products, and 100%, 100% and 100% and 100% of the total trade
receivables at amortised cost, respectively, was due from the five largest debtors from sales of goods other than
copper products. In order to manage the credit risk, the Group continuously monitor the level of exposure by ongoing
review of credit records of customers to take follow-up actions on the balances of trade receivables. These customers
are large and reputable in the market and they have been trading with the Group with good settlement history.
For trade receivables at amortised cost, the Group has applied the simplified approach in IFRS 9 to measure
the loss allowance at lifetime.
APPENDIX I ACCOUNTANTS’ REPORT
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(iii) Bank balances and the time deposit
Credit risk on bank balances and the time deposit is limited because the counterparty banks and financial
institutions are with good reputation. Thus, the Directors considered that the probability of default is negligible for
the bank balances and the time deposit of the Group and no expected credit loss was recognised as at 31 December
2022, 2023 and 2024 and 30 June 2025.
For all other financial assets including other receivables the Group measures the loss allowance equal to
12-month ECL, unless when there has been a significant increase in credit risk since initial recognition where the
Group recognises lifetime ECL. The Group has assessed and concluded that the risk of default rate for the
aforementioned other financial assets is close to zero based on the Group’s assessment of the financial health of the
counterparties, except for deposits, input V A T receivables, receivables from third parties and related party amounting
to RMB86,075,000, RMB97,539,000 and RMB88,977,000 and RMB136,452,000 as at 31 December 2022, 2023 and
2024 and 30 June 2025 which was credit impaired and assessed individually, and the impairment allowance of
RMB10,693,000, RMB30,166,000 and RMB9,394,000 and RMB18,390,000 was recognised in the Historical
Financial Information as at 31 December 2022, 2023 and 2024 and 30 June 2025.
(iv) Movements in the loss allowance, all of which are relating to trade receivables at amortised cost is as follows:
Y ears ended 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118770 70 26 14
Impairment (reversal)/recognised /H1118/H1118/H1118/H1118/H1118(734) (44) (12) 98
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 4–––
At end of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870 26 14 112
(v) Movements in the loss allowance all of which are relating to other receivables at amortised cost is as follows:
Y ears ended 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,443 10,693 30,166 9,394
Impairment recognised/(reversal) /H1118/H1118/H1118/H1118/H11182,808 19,291 (3,082) 9,062
Amount written off as uncollectible /H1118/H1118/H1118 – – (17,842) –
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118442 182 152 (66)
At end of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,693 30,166 9,394 18,390
APPENDIX I ACCOUNTANTS’ REPORT
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The tables below detail the credit risk exposures of the Group’s financial assets, which are subject to ECL
assessment:
12-month or
lifetime ECL
At 31 December At 30 June
Notes 2022 2023 2024 2025
Financial assets
at amortised
cost
Trade receivables
at amortised
cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118
18 Lifetime ECL 1,174 491 264 2,204
Credit impaired 70 26 14 112
1,244 517 278 2,316
Other
receivables /H1118/H1118/H1118
19 12-month ECL 4,876 7,106 18,591 31,256
Credit impaired 5,035 7,202 1,267 1,494
9,911 14,308 19,858 32,750
Loans granted to
an associate /H1118/H1118
19 12-month ECL 9,423 – – –
Credit impaired 993 11,582 – –
10,416 11,582 – –
Input V A T
receivables /H1118/H1118/H1118
19 12-month ECL 61,083 60,267 60,992 86,806
Credit impaired 4,665 11,382 8,127 16,896
65,748 71,649 69,119 103,702
Bank balances /H1118/H111820 12-month ECL 79,062 39,876 123,901 126,510
Time deposit /H1118/H1118/H111820 12-month ECL – – 5,000 6,050
79,062 39,876 128,901 132,560
166,381 137,932 218,156 271,328
(b) Liquidity risk
The treasury function is centrally managed by the Group, which includes the short-term investment of cash
surpluses and the raising of loans to cover expected cash demands.
The Group’s policy is to regularly monitor its liquidity requirements and its compliance with lending
covenants, to ensure that it maintains sufficient reserves of cash and adequate committed lines of funding from major
financial institutions to meet its liquidity requirements in the short and longer term.
APPENDIX I ACCOUNTANTS’ REPORT
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The following tables show the remaining contractual maturities at the end of reporting period of the Group’s
financial liabilities, which are based on contractual undiscounted cash flows (including interest payments computed
using contractual rates or, if floating, based on rates current at the end of the reporting period) and the earliest date
the Group can be required to pay:
Weighted
average
interest
rate
On demand
or less than
6 months
Over 6
months but
not more
than 1 year 1 to 2 years 2 to 5 years
Total
undiscounted
cash flows
Carrying
amounts
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
Non-derivative
financial liabilities
Trade and other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 101,73 0––– 101,730 101,730
Bank and other
borrowings /H1118/H1118/H1118/H1118/H11185.78% 30,030 55,755 6,080 – 91,865 87,389
Trade payables
designated at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 28,48 1––– 28,481 28,481
160,241 55,755 6,080 – 222,076 217,600
Lease liabilities /H1118/H1118/H1118/H11184.75% 376 375 500 66 1,317 1,224
Financial liabilities
designed at FVTPL
– Copper futures
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H11182 4 6––– 2 4 6 2 4 6
Weighted
average
interest
rate
On demand
or less than
6 months
Over 6
months but
not more
than 1 year 1 to 2 years 2 to 5 years
Total
undiscounted
cash flows
Carrying
amounts
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
Non-derivative
financial liabilities
Trade and other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 140,74 1––– 140,741 140,741
Bank and other
borrowings /H1118/H1118/H1118/H1118/H11185.87% 155,860 44,891 13,136 6,066 219,953 213,211
Trade payables
designated at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,03 6––– 82,036 82,036
378,637 44,891 13,136 6,066 442,730 435,988
Lease liabilities /H1118/H1118/H1118/H11184.75% 130 130 79 – 339 328
Financial liabilities
designed at FVTPL
– Copper futures
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118 6 6–––6 6 6 6
APPENDIX I ACCOUNTANTS’ REPORT
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Weighted
average
interest
rate
On demand
or less than
6 months
Over 6
months but
not more
than 1 year 1 to 2 years 2 to 5 years
Total
undiscounted
cash flows
Carrying
amounts
% RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
Non-derivative
financial liabilities
Trade and other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118171,72 7––– 171,727 171,727
Bank and other
borrowings /H1118/H1118/H1118/H1118/H11185.85% 162,589 49,912 25,405 40,766 278,672 268,627
Trade payables
designated at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118271,52 7––– 271,527 271,527
605,843 49,912 25,405 40,766 721,926 711,881
Lease liabilities /H1118/H1118/H1118/H11184.75% 46 45 – –9 1 9 0
30 June 2025
Non-derivative
financial liabilities
Trade and other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118191,29 0––– 191,290 191,290
Bank and other
borrowings /H1118/H1118/H1118/H1118/H11186.65% 121,351 59,752 21,273 53,124 255,500 245,186
Trade payables
designated at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118191,24 8––– 191,248 191,248
503,889 59,752 21,273 53,124 638,038 627,724
Lease liabilities /H1118/H1118/H1118/H11184.75% 99 62 125 311 597 540
(c) Commodity risk
The Group’s commodity price risk is mainly the exposure to fluctuations in the prevailing market price of
copper which are the major commodities purchased, produced and sold by the Group. To minimise this risk, the
Group enters into copper futures contracts and provisional price arrangement to manage the Group’s exposure in
relation to forecasted sales of copper products, forecasted purchases of copper concentrates, inventories and firm
commitments to sell the Group’s copper products.
Financial assets and liabilities of the Group whose fair value change in line with the fluctuations in the
prevailing market price of copper mainly comprise copper futures contracts and provisional price arrangements. If
all prices of copper futures had been increased by 10%, with all other variables held constant, the impact on the
Group’s total equity apart from retained profits and the potential effect on profit after tax is as would be as follows:
Y ears ended 31 December
Six months
ended 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Increase in profit for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,178 18,839 10,758 17,862
There would be an equal and opposite impact on the profit after tax for the year/period if there had been 10%
decrease in all prices of copper futures.
APPENDIX I ACCOUNTANTS’ REPORT
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(d) Currency risk
The Group has transactional exchange rate risk exposures mainly arising from sales or purchases by
subsidiaries in currencies other than the subsidiaries’ functional currencies. The Group has subsidiaries using USD
and RMB as their functional currencies. These subsidiaries have transactions in currencies other than their functional
currencies. In addition, the Group has exchange rate exposures arising from foreign currency borrowings. The Group
adopts an overall management on its foreign exchange business.
The carrying amounts of the Group’s USD, RMB, ZMW, CDF, SGD and SOL denominated monetary assets
(including financial assets, intercompany receivables and input V A T receivables) and liabilities (including financial
liabilities, intercompany payables and tax payables) which expose the Group to foreign currency risk are as follows:
Y ears ended 31 December
Six months
ended 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
USD denominated monetary assets /H1118/H1118 171,541 204,960 239,483 271,481
USD denominated monetary
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(16,036) (10,835) (16,520) (33,946)
RMB denominated monetary assets /H1118 65 65 1,214 399
RMB denominated monetary
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (14) (57) (57)
SGD denominated monetary assets /H1118/H1118 136 72 76 373
ZMW denominated monetary assets /H1118 61,377 64,354 54,514 75,034
ZMW denominated monetary
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(534) (704) (10,904) (5,282)
CDF denominated monetary assets /H1118/H1118 11 392 5,045 72
CDF denominated monetary
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (3,833) (29,347) (26,769)
SOL denominated monetary assets /H1118/H1118 3,870 2,187 12,415 20,082
SOL denominated monetary
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(378) (392) (1,736) (262)
The Group currently does not have a foreign exchange hedging policy. However, the management of the Group
monitors foreign exchange exposure and will consider hedging significant foreign exchange exposure should the need
arise.
APPENDIX I ACCOUNTANTS’ REPORT
– I-68 –


--- page 480 ---
The sensitivity analysis below has been determined based on the exposure to exchange rates of USD, RMB,
ZMW, CDF and SOL against functional currency. For a 5%, a 10%, and a 15% weakening of USD, ZMW, CDF and
SOL against functional currency and all other variables being held constant, there would have no material impact on
the Group’s total equity apart from the retained profits and the effect on the Group’s profit after tax are as follows:
Y ears ended 31 December
Six months
ended 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(Decrease)/increase in profit for the
year/period
USD
Weakening
–5 % /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,831) (7,280) (8,361) (8,908)
– 10% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,663) (14,559) (16,722) (17,815)
– 15% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(17,494) (21,839) (25,083) (26,723)
RMB
Weakening
–5 % /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2) (2) (43) (13)
– 10% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (4) (87) (26)
– 15% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7) (6) (130) (39)
SGD
Weakening
–5 % /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (3) (3) (14)
– 10% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10) (5) (6) (28)
– 15% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15) (8) (9) (42)
ZMW
Weakening
–5 % /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,282) (2,387) (1,635) (2,616)
– 10% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,563) (4,774) (3,271) (5,231)
– 15% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,845) (7,161) (4,906) (7,847)
CDF
Weakening
–5 % /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 129 911 1,001
– 10% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1) 258 1,823 2,002
– 15% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1) 387 2,734 3,003
SOL
Weakening
–5 % /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(131) (67) (400) (743)
– 10% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(262) (135) (801) (1,487)
– 15% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(393) (202) (1,201) (2,230)
Results of the analysis as presented in the above table represent an aggregation of the instantaneous effects on
each of the Group entities’ profit after tax and retained profits measured in their respective functional currencies,
translated into RMB at the exchange rates ruling at the end of the reporting period for presentation purposes.
The sensitivity analysis assumes that the change in foreign exchange rates had been applied to remeasure those
financial instruments held by the Group which expose the Group to foreign currency risk at the end of the reporting
period, including inter-company payables and receivables within the Group which are denominated in a currency
other than the functional currencies of the lender or the borrower. The analysis excludes differences that would result
from the translation of the financial statements of foreign operations into the Group’s presentation currency.
APPENDIX I ACCOUNTANTS’ REPORT
– I-69 –


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(e) Fair value measurement
The following table presents the fair value of the Group’s financial instruments measured at the end of the
reporting period on a recurring basis, categorised into the three-level fair value hierarchy as defined in IFRS 13, Fair
value measurement. The level into which a fair value measurement is classified is determined with reference to the
observability and significance of the inputs used in the valuation technique as follows:
– Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in active
markets for identical assets or liabilities at the measurement date.
– Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which fail to meet
Level 1, and not using significant unobservable inputs. Unobservable inputs are
inputs for which market data are not available.
– Level 3 valuations: Fair value measured using significant unobservable inputs.
The following table provides an analysis of financial instruments that are measured subsequent to initial
recognition at fair value, grouped into Levels 1 to 3 based on the level to which the fair value is observable:
Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
Financial liabilities – Copper future
contracts (Note (i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118246 – – 246
Trade receivables at FVTPL
(Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 43,161 – 43,161
Trade payables designated at
FVTPL (Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 28,481 – 28,481
31 December 2023
Financial liabilities – Copper future
contracts (Note (i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 6–– 6 6
Trade receivables at FVTPL
(Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 25,084 – 25,084
Trade payables designated at
FVTPL (Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 82,036 – 82,036
31 December 2024
Trade receivables at FVTPL
(Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 36,517 – 36,517
Trade payables designated at
FVTPL (Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 271,527 – 271,527
30 June 2025
Financial liabilities-non-ferrous
metal future contracts (Note (i)) /H1118/H1118 107 – – 107
Trade receivables at FVTPL
(Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 39,743 – 39,743
Trade payables designated at FVTPL
(Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 191,248 – 191,248
Notes:
(i) Calculated based on the initial transaction prices and quoted prices in an active market.
(ii) Calculated based on the quoted prices in an active market and the estimated grades of copper, gold and
silver in Group’s copper products.
There were no transfers between Level 1 and 2 in the year/period.
Except as detailed above, the Directors consider that the carrying amounts of financial assets and financial
liabilities recorded at amortised cost recognised in the Historical Financial Information approximate their fair values.
APPENDIX I ACCOUNTANTS’ REPORT
– I-70 –


--- page 482 ---
32 COMMITMENTS
Capital commitments outstanding at respective reporting period end dates not provided for in the Historical
Financial Information were as follows:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Capital expenditure in respect of the
acquisition of property, plant and
equipment contracted for but not
provided in the Historical Financial
Information /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118205,533 123,383 68,914 2,718
33 MATERIAL RELATED PARTY TRANSACTIONS
(a) Key management personnel remuneration
Remuneration for key management personnel of the Group, including amounts paid to the Company’s directors
and supervisors as disclosed in Note 9 and certain of the highest paid employees as disclosed in Note 10, is as
follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Salaries and other emoluments /H1118/H1118/H1118/H1118/H1118/H11181,469 1,864 2,008 974 1,064
Discretionary bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118521 277 302 198 150
Employees share-based compensation
scheme: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 121 121 60 60
Retirement scheme contributions /H1118/H1118/H1118/H1118142 129 128 64 65
2,132 2,391 2,559 1,296 1,339
Total remuneration is included in “staff costs” (See Note 7(b)).
(b) Names and relationships of the related parties that had material transactions with the Group during the Track
Record Period:
Names of related parties Relationship
Jiangwu Jinxun /H1118/H1118/H1118/H1118/H1118/H1118/H1118An associate of the Group
Mr. Y uan Rong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Ultimate controlling party
Ms. Liu Li /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The spouse of Mr. Y uan Rong
Ms. Y uan Mei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Key management personnel of the Group and sister of Mr. Y uan Rong
APPENDIX I ACCOUNTANTS’ REPORT
– I-71 –


--- page 483 ---
(c) Transactions with related parties during the Track Record Period
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Purchase of property, plant and
equipment from Jiangwu Jinxun /H1118/H1118/H1118 – 1 , 1 1 6–––
Lease charges relating to short-term
leases to Jiangwu Jinxun /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 2 2 1 5 5–––
Interest income from Jiangwu Jinxun /H1118/H1118 9 4 1 9 8 6–––
(d) Balances with related parties
The Group’s balances with related parties as at the end of each reporting period are as follows:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade in nature:
Trade payables at amortised cost from
Jiangwu Jinxun /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118230 1,277 – –
Non-trade in nature:
Gross amounts of other receivables
from Jiangwu Jinxun (Note 19) /H1118/H1118/H1118/H111810,416 11,582 – –
Guarantees provided by Mr. Y uan Rong,
and/or Ms. Liu Li and/or Ms. Y uan
Mei for the Group’s bank and other
borrowings (Note 24) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,584 62,527 110,777 47,156
Subsequent to 30 June 2025, all of guarantees provided by the related parties for the Group’s bank loans were
released.
34 IMMEDIATE AND ULTIMATE CONTROLLING PARTY
At 30 June 2025, the directors consider the immediate and ultimate controlling party of the Group to be Mr.
Y uan Rong.
35 SUBSEQUENT EVENTS
Subsequent to the end of the reporting period, a interim dividend in respect of the six months ended 30 June
2025 of RMB0.28 per share, in an aggregate amount of RMB30,883,000 which was approved by extraordinary
general meeting on 12 September 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 484 ---
36 POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED
BUT NOT YET EFFECTIVE FOR THE ACCOUNTING PERIOD BEGINNING ON 1 JANUARY 2025
Up to date of issue of the Historical Financial Information, the IASB has issued a number of new or amended
standards which are not yet effective for the accounting period beginning on 1 January 2025 and which have not been
adopted in the Historical Financial Information. These include the following:
Effective for
accounting period
beginning on or after
Amendments to IFRS 9 and IFRS 7 – Amendments to the classification and
measurement of financial instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1 January 2026
Amendments to IFRS 9 and IFRS 7, Contracts Referencing Nature-dependent
Electricity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1 January 2026
Annual improvements to IFRS Accounting Standards-V olume 11 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 January 2026
IFRS 18, Presentation and disclosure in financial statements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 January 2027
IFRS 19, Subsidiaries without public accountability: disclosures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 January 2027
Amendments to IFRS 10 and IAS 28, Sale or contribution of assets between an
investor and its associate or joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
To be determined
The Group is in the process of making an assessment of what the impact of these developments is expected
to be in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a
significant impact on the Historical Financial Information.
IFRS 18, Presentation and disclosure in financial statements
IFRS 18 will replace IAS 1 Presentation of financial statements and aims to improve the transparency and
comparability of information about an entity’s financial statements.
IFRS 18 is effective for annual reporting periods beginning on or after 1 January 2027 and is to be applied
retrospectively. Among other changes, under IFRS 18, entities are required to classify all income and expenses into
five categories in the statement of profit or loss, namely the operating, investing, financing, discontinued operations
and income tax categories. Entities are also required to provide specific disclosures about management-defined
performance measures in a single note in the financial statements.
The Group does not plan to early adopt IFRS 18. IFRS 18 will impact the presentation of financial statements
and is not expected to have significant impact on the financial performance and positions of the Group.
SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company and its subsidiaries in respect of any
period subsequent to 30 June 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-73 –


--- page 485 ---
The following information does not form part of the Accountants’ Report received from
the Company’ s reporting accountants, KPMG, Certified Public Accountants, Hong Kong, as set
out in Appendix I to this prospectus, and is included herein for illustrative purposes only.
The unaudited pro forma financial information should be read in conjunction with the
section headed “Financial information” in this prospectus and the historical financial
information included in the Accountants’ Report set out in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE
ASSETS
The following unaudited pro forma statement of adjusted net tangible assets of the Group
is prepared in accordance with Rule 4.29 of the Listing Rules and is set out below to illustrate
the effect of the Global Offering on the consolidated net tangible assets attributable to equity
shareholders of the Company as at 30 June 2025 as if the Global Offering had taken place on
30 June 2025.
The unaudited pro forma statement of adjusted net tangible assets has been prepared for
illustrative purposes only and because of its hypothetical nature, it may not give a true picture
of the financial position of the Group had the Global Offering been completed as at 30 June
2025 or at any future date.
Consolidated
net tangible
assets of the
Company
attributable
to equity
shareholders of
the Company as
at 30 June 2025 (1)
Estimated
net proceeds
from the Global
Offering (2)(4)
Unaudited pro
forma adjusted
net tangible
assets
attributable to
equity
shareholders of
the Company
Unaudited pro forma
adjusted net tangible
assets attributable to
equity shareholders
of the Company
per Share (3)(4)
RMB’000 RMB’000 RMB’000 RMB HK$
Based on an Offer Price of
HK$30 per H Share /H1118/H1118/H1118 659,107 945,803 1,604,910 10.91 12.03
Notes:
(1) The consolidated net tangible assets attributable to equity shareholders of the Company as at 30 June
2025 is based on the total equity attributable to equity shareholders of the Company of
RMB668,741,000, after deducting intangible assets of RMB9,634,000, which is extracted from the
Accountants’ Report set out in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offering are calculated based on the Offer Price of HK$30
per H Share, and 36,765,600 Shares to be issued under the Global Offering, after deduction of the
estimated underwriting fees and other expenses related to the Global Offering paid or payable by the
Group (excluding the listing expenses that have been charged to profit or loss up to 30 June 2025), and
do not take into account any Shares which may be issued upon the exercise of the Over-allotment
Option.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 486 ---
(3) The unaudited pro forma adjusted net tangible assets per Share is arrived at after the adjustments
referred to in the preceding paragraphs and on the basis that 147,062,243 Shares were in issue
immediately following the completion of the Global Offering, and does not take into account any Shares
which may be issued upon the exercise of the Over-allotment Option.
(4) The estimated net proceeds from the Global Offering and the unaudited pro forma adjusted net tangible
assets per Share are converted from or into Hong Kong dollars (“HK$”) at an exchange rate of
RMB1.0000 to HK$1.1025 prevailing on 22 December 2025. No representation is made that US$
amounts have been, could have been or may be converted to HK$, or vice versa, at that rate or at any
other rate.
(5) No adjustment has been made to reflect any trading result or other transactions of the Group entered into
subsequent to 30 June 2025, including but not limited to the interim dividend for the six months ended
30 June 2025 of RMB0.28 per share, in an aggregate amount of RMB30,883,000 which was approved
by extraordinary general meeting on 12 September 2025. The unaudited pro forma adjusted net tangible
assets attributable to equity shareholders of the Company per Share would have been decreased by
HK$0.23 per Share if the dividend declaration had been accounted for as at 30 June 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 487 ---
The following is the text of a report received from the reporting accountants, KPMG,
Certified Public Accountants, Hong Kong, in respect of the Group’ s pro forma financial
information for the purpose in this prospectus.
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
TO THE DIRECTORS OF YUNNAN JINXUN RESOURCES CO., LTD.
We have completed our assurance engagement to report on the compilation of pro forma
financial information of Y unnan Jinxun Resources Co., Ltd.* (ʮ̡)
(the “Company”) and its subsidiaries (collectively the “Group”) by the directors of the
Company (the “Directors”) for illustrative purposes only. The unaudited pro forma financial
information consists of the unaudited pro forma statement of adjusted net tangible assets as at
30 June 2025 and related notes as set out in Part A of Appendix II to the prospectus dated 31
December 2025 (the “Prospectus”) issued by the Company. The applicable criteria on the basis
of which the Directors have compiled the pro forma financial information are described in Part
A of Appendix II to the Prospectus.
The pro forma financial information has been compiled by the Directors to illustrate the
impact of the proposed offering of the H shares of the Company (the “Global Offering”) on the
Group’s financial position as at 30 June 2025 as if the Global Offering had taken place at
30 June 2025. As part of this process, information about the Group’s financial position as at
30 June 2025 has been extracted by the Directors from the Group’s historical financial
information included in the Accountants’ Report as set out in Appendix I to the Prospectus.
Directors’ Responsibilities for the Pro Forma Financial Information
The Directors are responsible for compiling the pro forma financial information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting
Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment
Circulars” (“AG 7”) issued by the Hong Kong Institute of Certified Public Accountants
(“HKICPA”).
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behaviour.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 488 ---
Our firm applies Hong Kong Standard on Quality Management 1 “Quality Management
for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or
Related Services Engagements”, which requires the firm to design, implement and operate a
system of quality management including policies or procedures regarding compliance with
ethical requirements, professional standards and applicable legal and regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the pro forma financial information and to report our opinion to you. We do
not accept any responsibility for any reports previously given by us on any financial
information used in the compilation of the pro forma financial information beyond that owed
to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements (“HKSAE”) 3420 “Assurance Engagements to Report on the Compilation of Pro
Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard
requires that the reporting accountants plan and perform procedures to obtain reasonable
assurance about whether the Directors have compiled the pro forma financial information in
accordance with paragraph 4.29 of the Listing Rules, and with reference to AG 7 issued by the
HKICPA.
For purpose of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the pro forma
financial information, nor have we, in the course of this engagement, performed an audit or
review of the financial information used in compiling the pro forma financial information.
The purpose of pro forma financial information included in an investment circular is
solely to illustrate the impact of a significant event or transaction on unadjusted financial
information of the Group as if the event had occurred or the transaction had been undertaken
at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any
assurance that the actual outcome of events or transactions as at 30 June 2025 would have been
as presented.
A reasonable assurance engagement to report on whether the pro forma financial
information has been properly compiled on the basis of the applicable criteria involves
performing procedures to assess whether the applicable criteria used by the Directors in the
compilation of the pro forma financial information provide a reasonable basis for presenting
the significant effects directly attributable to the event or transaction, and to obtain sufficient
appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the pro forma financial information reflects the proper application of those
adjustments to the unadjusted financial information.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 489 ---
The procedures selected depend on the reporting accountants’ judgement, having regard
to the reporting accountants’ understanding of the nature of the Group, the event or transaction
in respect of which the pro forma financial information has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating the overall presentation of the pro forma
financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Our procedures on the pro forma financial information have not been carried out in
accordance with attestation standards or other standards and practices generally accepted in the
United States of America, auditing standards of the Public Company Accounting Oversight
Board (United States) or any overseas standards and accordingly should not be relied upon as
if they had been carried out in accordance with those standards and practices.
We make no comments regarding the reasonableness of the amount of net proceeds from
the issuance of the Company’s shares, the application of those net proceeds, or whether such
use will actually take place as described in the section headed “Future Plans and Use of
Proceeds” in the Prospectus.
Opinion
In our opinion:
(a) the pro forma financial information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group, and
(c) the adjustments are appropriate for the purposes of the pro forma financial
information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
KPMG
Certified Public Accountants
Hong Kong
31 December 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 490 ---
THE PRC TAXATION
Taxation on Dividends
Individual Investors
Pursuant to the Individual Income Tax Law of the PRC (੻೼
), which was most recently amended on August 31, 2018 and the Implementation
Provisions of the Individual Income Tax Law of the PRC (ྼ
ૢԷ), which was most recently amended on December 18, 2018 (hereinafter collectively
referred to as the “ IIT Law ”), dividends distributed by PRC enterprises are subject to
individual income tax levied at a flat rate of 20%. For a foreign individual who is not a resident
of the PRC, the receipt of dividends from an enterprise in the PRC is normally subject to
individual income tax of 20% unless specifically exempted by the tax authority of the State
Council or reduced by relevant tax treaty.
Pursuant to the Arrangement between Chinese Mainland and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Income (ᅄ೼
τર) (hereinafter referred to as the “ Arrangement for the Avoidance of
Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income
(τર)”) signed by Chinese Mainland and the Hong
Kong Special Administrative Region on August 21, 2006, the PRC government may impose tax
on dividends paid by a PRC company to a Hong Kong resident (including natural person and
legal entity), but such tax shall not exceed 10% of the total amount of dividends payable. If a
Hong Kong resident directly holds 25% or more of equity interest in a PRC company and the
Hong Kong resident is the beneficial owner of the dividends and meets other conditions, such
tax shall not exceed 5% of the total amount of dividends payable by the PRC company. The
Fifth Protocol to the Arrangement between Chinese Mainland and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Income (׵<׵
τર>) (the “ Fifth Protocol ”) issued by the
SA T and became effective on December 6, 2019, provides that such provisions shall not apply
to arrangements or transactions made for one of the primary purposes of obtaining such tax
benefits.
Enterprise Investors
In accordance with the Enterprise Income Tax Law of the PRC ( ʕശɛ͏΍ձ਷Άุ
) issued by NPC on March 16, 2007 and most recently amended on December 29,
2018 and the Implementation Provisions of the Enterprise Income Tax Law of the PRC ( ʕ
ૢԷ) issued by the State Council on December 6, 2007,
came into effect on January 1, 2008 and most recently amended on December 6, 2024
(hereinafter collectively referred to as the “ EIT Law ”), a non-resident enterprise is generally
subject to a 10% enterprise income tax on PRC-sourced income (including dividends received
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-1 –


--- page 491 ---
from a PRC resident enterprise), if it does not have an establishment or premise in the PRC or
has an establishment or premise in the PRC but its PRC-sourced income has no real connection
with such establishment or premise. The aforesaid income tax payable by non-resident
enterprises are withheld at source, where the payer of the income is required to withhold the
income tax from the amount to be paid to the non-resident enterprise. Such withholding tax
may be reduced or exempted pursuant to an applicable treaty for the avoidance of double
taxation.
The Circular of the State Administration of Tax on Issues Relating to the Withholding and
Remitting of Enterprise Income Tax by PRC Resident Enterprises on Dividends Distributed to
Overseas Non-Resident Enterprise Shareholders of H Shares (͏Ά
ุΣྤ̮H), which was
issued and implemented by the SA T on November 6, 2008, further clarified that a PRC-resident
enterprise must withhold corporate income tax at a rate of 10% on the dividends paid to
non-PRC resident enterprise holders of H Shares which are derived out of profit generated
since 2008. Non-PRC resident enterprise shareholders who need to enjoy tax treaty benefits,
the relevant provisions of such tax treaty shall apply.
Pursuant to the Arrangement for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with Respect to Taxes on Income, the PRC government may impose tax on
dividends paid by a PRC company to a Hong Kong resident (including natural person and legal
entity), but such tax shall not exceed 10% of the total amount of dividends payable. If a Hong
Kong resident directly holds 25% or more of equity interest in a PRC company and the Hong
Kong resident is the beneficial owner of the dividends and meets other conditions, such tax
shall not exceed 5% of the total amount of dividends payable by the PRC company. The Fifth
Protocol provides that such provisions shall not apply to arrangements or transactions made for
one of the primary purposes of obtaining such tax benefits.
Although there may be other provisions under the Arrangement for the Avoidance of
Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, the
treaty benefits under the criteria shall not be granted in the circumstance where relevant gains,
after taking into account all relevant facts and conditions, are reasonably deemed to be one of
the main purposes for the arrangement or transactions which will bring any direct or indirect
benefits under this Arrangement, except when the grant of benefits under such circumstance is
consistent with relevant objectives and goals under the Arrangement. The application of the
dividend clause of tax agreements is also subject to the requirements of PRC tax laws and
regulations, such as the Notice of the State Administration of Taxation on the Issues
Concerning the Application of the Dividend Clauses of Tax Agreements (׵
).
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-2 –


--- page 492 ---
Tax Treaties
Non-resident investors residing in jurisdictions which have entered into treaties or
adjustments for the avoidance of double taxation with the PRC might be entitled to a reduction
of the Chinese corporate income tax imposed on the dividends received from PRC companies.
The PRC currently has entered into treaties or adjustments for the avoidance of double taxation
with a number of countries and regions including Hong Kong Special Administrative Region,
Macau Special Administrative Region, Australia, Canada, France, Germany, Japan, Malaysia,
the Netherlands, Singapore, the United Kingdom and the United States. Non-PRC resident
enterprises entitled to preferential tax rates in accordance with the relevant taxation treaties or
arrangements are required to apply to the Chinese tax authorities for a refund of the corporate
income tax in excess of the agreed tax rate, and the refund application is subject to approval
by the Chinese tax authorities.
Taxation on Share Transfer
VAT and Local Additional Tax
Pursuant to the Notice on Fully Implementing the Pilot Reform for the Transition from
Business Tax to V alue-added Tax () (the
“Circular 36 ”), which was implemented on May 1, 2016 and partially repealed on July 1,
2017, January 1, 2018 and April 1, 2019, entities and individuals engaged in the services sale
in the PRC are subject to V A T and “engaged in the services sale in the PRC” means that the
seller or buyer of the taxable services is located in the PRC. Circular 36 also provides that
transfer of financial products, including transfer of the ownership of marketable securities,
shall be subject to V A T at 6% on the taxable revenue (which is the balance of sales price upon
deduction of purchase price), for a general or a foreign V A T taxpayer. However, individuals
who transfer financial products are exempt from V A T, which is also provided in the Notice of
Ministry of Finance and State Administration of Taxation on Several Tax Exemption Policies
for Business Tax on Sale and Purchase of Financial Commodities by Individuals (௅e
) effective on January 1,
2009. According to these regulations, if the holder is a non-resident individual, the PRC V A T
is exempted from the sale or disposal of H shares; if the holder is a non-resident enterprise and
the H-share buyer is an individual or entity located outside the PRC, the holder is not
necessarily required to pay the PRC V A T, but if the H-share buyer is an individual or entity
located in China, the holder may be required to pay the PRC V A T.
However, in view of no clear regulations, it is still uncertain whether the non-Chinese
resident enterprises are required to pay the PRC V A T for the disposal of H shares in practice.
At the same time, V A T payers are also required to pay urban maintenance and
construction tax, education surtax and local education surcharge, which shall be usually subject
to 12% of the actual V A T payable (if any).
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-3 –


--- page 493 ---
Income tax
Individual Investors
According to the IIT Law, gains on the transfer of equity interests in the PRC resident
enterprises are subject to individual income tax at a rate of 20%.
Pursuant to the Circular on Declaring that Individual Income Tax Continues to be
Exempted over Income of Individuals from the Transfer of Shares (੻
) issued by the SA T on March 30, 1998, from January 1,
1997, income of individuals from transfer of the shares of listed enterprises continues to be
exempted from individual income tax. The SA T has not expressly stated whether it will
continue to exempt tax on income of individuals from transfer of the shares of listed enterprises
in the most recently amended IIT Law.
However, on December 31, 2009, the Ministry of Finance, SA T and CSRC jointly issued
the Circular on Related Issues on Levying Individual Income Tax over the Income Received by
Individuals from the Transfer of Listed Shares Subject to Sales Limitation (ɛᔷᜫɪ
), which came into effect on January 1,
2010, which states that individuals’ income from the transfer of listed shares obtained from the
public offering of listed companies and transfer market on the Shanghai Stock Exchange and
the Shenzhen Stock Exchange shall continue to be exempted from individual income tax,
except for the relevant shares which are subject to sales restriction (as defined in the
Supplementary Notice on Related Issues on Levying Individual Income Tax over the Income
Received by Individuals from the Transfer of Listed Shares Subject to Sales Limitation ( ᗫ
) jointly issued and
implemented by such departments on November 10, 2010). Pursuant to the Announcement on
Matters Concerning Further Improving the Individual Income Tax Collection Service for the
Income of Individuals from the Transfer of Restricted Shares of Listed Companies (ආ
ʮѓ) jointly issued
by SA T, the Ministry of Finance and CSRC on December 27, 2024, when an individual pays
individual income tax on his or her income from the transfer of restricted shares of a listed
company, the place of tax payment is the place where the listed company issuing the restricted
shares is located. As of the Latest Practicable Date, no aforesaid provisions have expressly
provided that individual income tax shall be levied from non-PRC resident individuals on the
transfer of shares in PRC resident enterprises listed on overseas stock exchanges.
Enterprise Investors
According to the EIT Law, a non-resident enterprise is generally subject to a 10%
enterprise income tax on PRC-sourced income (including dividends received from a PRC
resident enterprise), if it does not have an establishment or premise in the PRC or has an
establishment or premise in the PRC but its PRC-sourced income has no real connection with
such establishment or premise. The aforesaid income tax payable by non-resident enterprises
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-4 –


--- page 494 ---
are withheld at source, where the payer of the income is required to withhold the income tax
from the amount to be paid to the non-resident enterprise. Such withholding tax may be
reduced or exempted pursuant to an applicable treaty for the avoidance of double taxation.
The Circular of the State Administration of Tax on Issues Relating to the Withholding and
Remitting of Enterprise Income Tax by PRC Resident Enterprises on Dividends Distributed to
Overseas Non-Resident Enterprise Shareholders of H Shares (͏Ά
ุΣྤ̮H), which was
issued and implemented by the SA T on November 6, 2008, further clarified that a PRC-resident
enterprise must withhold corporate income tax at a rate of 10% on the dividends paid to
non-PRC resident enterprise holders of H Shares which are derived out of profit generated
since 2008. Non-PRC resident enterprise shareholders who need to enjoy tax treaty benefits,
the relevant provisions of such tax treaty shall apply.
Stamp Duty
According to the Stamp Duty Law of the PRC (), which
was promulgated on June 10, 2021 and came into effect on July 1, 2022, PRC stamp duty only
applies to specific taxable document executed or received within the PRC, having legally
binding force in the PRC and protected under the PRC laws, thus the requirements of the stamp
duty imposed on the transfer of shares of PRC listed companies shall not apply to the
acquisition and disposal of H Shares by non-PRC investors outside of the PRC.
Estate Duty
As of the Latest Practicable Date, no estate duty has been levied in the PRC under the
PRC laws.
Principal Taxation of the Company in the PRC
Enterprise Income Tax
According to the EIT Law, enterprises and other income-generating organizations
(hereinafter collectively referred to as “ an enterprise ”o r“ enterprises ”) within the territory
of the PRC are the taxpayers of enterprise income tax and shall pay enterprise income tax in
accordance with the provisions of the EIT Law. The Enterprise Income Tax rate is 25%.
VAT
Pursuant to the Interim Regulations on V alue-added Tax of the PRC ( ʕശɛ͏΍ձ਷
೼ᅲБૢԷ) issued on December 13, 1993 by the State Council, came into effect on
January 1, 1994, and revised on November 10, 2008, February 6, 2016 and November 19, 2017,
as well as the Implementation Rules for the Interim Regulations on V alue-Added Tax of the
PRC () issued on December 25, 1993 by the
MOF, came into effect on the same day and revised on December 15, 2008 and October 28,
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-5 –


--- page 495 ---
2011, any entities and individuals engaged in the sale of goods, supply of processing, repair
and replacement services, and import of goods within the territory of the PRC are taxpayers of
V A T and shall pay the V A T in accordance with the law. The rate of V A T for sale of goods is
17% unless otherwise specified, such as the rate of V A T for sale of transportation is 11%. With
the V A T reforms in the PRC, the rate of V A T has been changed several times. The Notice of
the Ministry of Finance and the State Administration of Taxation on the Adjustment to V A T
Rates () which was promulgated by the
Ministry of Finance and the State Administration of Taxation on April 4, 2018 to adjust the tax
rates of 17% and 11% applicable to any taxpayer’s V A T taxable sale or import of goods to 16%
and 10%, respectively, and this adjustment became effective on May 1, 2018. Subsequently, the
Announcement of the Ministry of Finance and the State Administration of Taxation on Relevant
Policies for Deepening the V A T Reform (݁
ʮѓ) which was jointly promulgated by the MOF, the SA T and the General
Administration of Customs on March 20, 2019 to make a further adjustment, which came into
effect on April 1, 2019. The previous tax rate of 16% applicable to the V A T taxable sale
behavior or import of goods shall be adjusted to 13%, and the previous tax rate of 10%
applicable thereto shall be adjusted to 9%.
FOREIGN EXCHANGE ADMINISTRATION IN THE PRC
The lawful currency of the PRC is Renminbi, which is currently subject to foreign
exchange control and cannot be freely converted into foreign currency. The SAFE, with the
authorization of the People’s Bank of China, is empowered with the functions of administering
all matters relating to foreign exchange, including the enforcement of foreign exchange control
regulations.
The Administrative Regulations on Foreign Exchange of the PRC ( ʕശɛ͏΍ձ਷̮
ි၍ଣૢԷ) which was issued by the State Council on January 29, 1996, implemented on
April 1, 1996 and latest amended on August 5, 2008, classifies all international payments and
transfers into current items and capital items. Current items are subject to the reasonable
examination of the veracity of transaction documents and the consistency of the transaction
documents and the foreign exchange receipts and payments by financial institutions engaging
in conversion and sale of foreign currencies and supervision and inspection by the foreign
exchange administrative authorities. For capital items, overseas organizations and overseas
individuals making direct investments in the PRC shall, upon approval by the relevant
authorities in charge, process registration formalities with the foreign exchange administrative
authorities. Foreign exchange income received overseas can be repatriated or deposited
overseas, and foreign exchange and foreign exchange settlement funds under the capital
account are required to be used only for purposes as approved by the competent authorities and
foreign exchange administrative authorities. In the event that international revenues and
expenditure occur or may occur a material misbalance, or the national economy encounters or
may encounter a severe crisis, the State may adopt necessary safeguard and control measures
on international revenues and expenditure.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-6 –


--- page 496 ---
The Regulations for the Administration of Settlement, Sale and Payment of Foreign
Exchange (), which was promulgated by the People’s Bank of
China on June 20, 1996 and implemented on July 1, 1996, removes other restrictions on
convertibility of foreign exchange under current items, while imposing existing restrictions on
foreign exchange transactions under capital account items.
According to the Announcement on Improving the Reform of the Renminbi Exchange
Rate Formation Mechanism (ʮѓ), which was
issued by the People’s Bank of China and implemented on July 21, 2005, the PRC has started
to implement a managed floating exchange rate system in which the exchange rate would be
determined based on market supply and demand and adjusted with reference to a basket of
currencies since July 21, 2005. Therefore, Renminbi exchange rate was no longer pegged to
U.S. dollar. The People’s Bank of China would publish the closing price of the exchange rate
of Renminbi against trading currencies such as U.S. dollar in the interbank foreign exchange
market after the closing of the market on each working day, as the central parity of the currency
against Renminbi transactions on the following working day.
According to the relevant laws and regulations in the PRC, PRC enterprises (including
foreign investment enterprises) which need foreign exchange for current item transactions may,
without the approval of the foreign exchange administrative authorities, effect payment
through foreign exchange accounts opened at the designated foreign exchange bank, on the
strength of valid transaction receipts and proof. Foreign investment enterprises which need
foreign exchange for the distribution of profits to their shareholders and PRC enterprises (such
as our Company) which, in accordance with regulations, are required to pay dividends to their
shareholders in foreign exchange may, on the strength of resolutions of the board of directors
or the shareholders’ meeting on the distribution of profits, effect payment from foreign
exchange accounts at the designated foreign exchange bank, or effect exchange and payment
at the designated foreign exchange bank.
According to the Decisions on Matters including Canceling and Adjusting a Batch of
Administrative Approval Items ()
which was promulgated by the State Council on October 23, 2014, it decided to cancel the
approval requirement of the SAFE and its branches for the remittance and settlement of the
proceeds raised from the overseas listing of the foreign shares into RMB domestic accounts.
According to the Notice of the State Administration of Foreign Exchange on Issues
Concerning the Foreign Exchange Administration of Overseas Listing (׵
) issued by the SAFE and implemented on December 26,
2014, a domestic company shall, within 15 business days from the date of the end of its
overseas listing issuance, register the overseas listing with the local branch office of state
administration of foreign exchange at the place of its establishment; the proceeds from an
overseas listing of a domestic company may be remitted to the domestic account or deposited
in an overseas account, but the use of the proceeds shall be consistent with the content of the
prospectus and other disclosure documents. The SAFE also issued the Guidelines for the
Foreign Exchange Business under the Capital Account (2024) (ˏ(2024
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-7 –


--- page 497 ---
و)), which came into effect on May 6, 2024, which states that the funds raised by
domestic companies through overseas listings shall, in principle, be repatriated to the PRC,
either in RMB or foreign currency. Domestic companies using such funds for overseas direct
investment, overseas securities investment, overseas lending, or other activities shall comply
with the relevant foreign exchange regulations. The use of funds shall be consistent with the
disclosed content in prospectuses, corporate bond offering documents, shareholder circulars,
board or shareholder meeting resolutions, and other publicly disclosed documents.
According to the Notice of the State Administration of Foreign Exchange on
Revolutionizing and Regulating Capital Account Settlement Management Policies (̮ි
) which was promulgated by the SAFE
and implemented on June 9, 2016, and partially revised by Notice of the State Administration
of Foreign Exchange on Further Deepening the Reform to Facilitate Cross-border Trade and
Investment ()o n
December 4, 2023, foreign currency earnings in capital account that relevant policies of
willingness exchange settlement have been clearly implemented on (including the recalling of
raised capital by overseas listing) may undertake foreign exchange settlement in the banks
according to actual business needs of the domestic institutions.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 498 ---
This Appendix sets out summaries of certain aspects of PRC laws and regulations, which
are relevant to the Company’s operations and business. Laws and regulations relating to
taxation in the PRC are discussed separately in “Appendix III – Taxation and Foreign
Exchange” to this Prospectus. The principal objective of this summary is to provide potential
investors with an overview of the principal PRC legal and regulatory provisions applicable to
the Company. This summary is not intended to include all the information which may be
important to potential investors. For more details on laws and regulations which are relevant
to our business, please refer to the section headed “Regulatory Overview” to this Prospectus.
THE PRC LEGAL SYSTEM
The PRC legal system is based on the Constitution of the PRC ()
(the “ Constitution ”) and is made up of written laws, administrative regulations, local
regulations, separate regulations, autonomous regulations, rules and regulations of
departments, rules and regulations of local governments and international treaties of which the
PRC government is a signatory, and other regulatory documents. Court verdicts do not
constitute binding precedents. However, they may be used as judicial reference and guidance.
Pursuant to the Constitution and the Legislation Law of the PRC (2023 amendment) ( ʕ
جج2023͍)) (the “ Legislation Law ”), the NPC and the Standing
Committee of the NPC (SCNPC) are empowered to exercise the legislative power of the State.
The NPC has the power to formulate and amend basic laws governing civil and criminal
matters, state organs and other matters. The SCNPC is empowered to formulate and amend
laws other than those required to be enacted by the NPC and to supplement and amend any
parts of laws enacted by the NPC during the adjournment of the NPC, provided that such
supplements and amendments are not in conflict with the basic principles of such laws.
The State Council is the highest organ of the PRC administration and has the power to
formulate administrative regulations based on the Constitution and laws.
The people’s congresses of provinces, autonomous regions and municipalities and their
respective standing committees may formulate local regulations based on the specific
circumstances and actual requirements of their own respective administrative areas, provided
that such local regulations do not contravene any provision of the Constitution, laws or
administrative regulations.
The ministries and commissions of the State Council, PBOC, National Audit Office of the
PRC as well as the other organs endowed with administrative functions directly under the State
Council may, in accordance with the laws as well as the administrative regulations, decisions
and orders of the State Council and within the limits of their power, formulate rules.
The people’s congresses of cities divided into districts and their respective standing
committees may formulate local regulations in terms of urban and rural development and
management, environmental protection, and historical and cultural protection based on the
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-1 –


--- page 499 ---
specific circumstances and actual requirements of such cities, which will become enforceable
after being reported to and approved by the standing committees of the people’s congresses of
the relevant provinces or autonomous regions but such local regulations shall conform with the
Constitution, laws, administrative regulations, and the relevant local regulations of the relevant
provinces or autonomous regions. People’s congresses of national autonomous areas have the
power to enact autonomous regulations and separate regulations in light of the political,
economic and cultural characteristics of the nationality (nationalities) in the areas concerned.
The people’s governments of the provinces, autonomous regions, and municipalities
directly under the central government and the cities divided into districts or autonomous
prefectures may enact rules, in accordance with laws, administrative regulations and the local
regulations of their respective provinces, autonomous regions or municipalities. The
Constitution has supreme legal authority and no laws, administrative regulations, local
regulations, autonomous regulations or separate regulations may contravene the Constitution.
The authority of laws is greater than that of administrative regulations, local regulations and
rules. The authority of administrative regulations is greater than that of local regulations and
rules. The authority of local regulations is greater than that of the rules of the local
governments at or below the corresponding level. The authority of the rules enacted by the
people’s governments of the provinces or autonomous regions is greater than that of the rules
enacted by the people’s governments of the city divided into districts or autonomous prefecture
within the administrative areas of the provinces and the autonomous regions.
The NPC has the power to alter or annul any inappropriate laws enacted by the SCNPC,
and to annul any autonomous regulations or separate regulations which have been approved by
the SCNPC but which contravene the Constitution or the Legislation Law. The SCNPC has the
power to annul any administrative regulations that contravene the Constitution and laws, to
annul any local regulations that contravene the Constitution, laws or administrative
regulations, and to annul any autonomous regulations or local regulations which have been
approved by the standing committees of the people’s congresses of the relevant provinces,
autonomous regions or municipalities directly under the central government, but which
contravene the Constitution and the Legislation Law. The State Council has the power to alter
or annul any inappropriate ministerial rules and rules of local governments. The people’s
congresses of provinces, autonomous regions or municipalities directly under the central
government have the power to alter or annul any inappropriate local regulations enacted or
approved by their respective standing committees. The people’s governments of provinces and
autonomous regions have the power to alter or annul any inappropriate rules enacted by the
people’s governments at a lower level.
According to the Constitution and the Legislation Law, the power to interpret laws is
vested in the SCNPC. According to the Resolution of the Standing Committee of the NPC
Providing an Improved Interpretation of the Law (ج
Ӕᙄ) passed on June 10, 1981, the Supreme People’s Court of the PRC (the
“Supreme People’s Court ”) has the power to give general interpretation on questions
involving the specific application of laws and decrees in court trials. The State Council and its
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ministries and commissions are also vested with the power to give interpretation of the
administrative regulations and department rules which they have promulgated. At the regional
level, the power to give interpretations of the local laws and regulations as well as
administrative rules is vested in the regional legislative and administrative organs which
promulgate such laws, regulations and rules.
THE PRC JUDICIAL SYSTEM
Under the Constitution and Organic Law of the People’ s Courts of the PRC (2018
revision) (ج2018ࠈࡌ)), the PRC judicial system is
made up of the Supreme People’s Court, the local people’s courts and special people’s courts.
The local people’s courts are comprised of the primary people’s courts, the intermediate
people’s courts and the higher people’s courts. The higher-level people’s courts supervise the
primary and intermediate people’s courts. The Supreme People’s Court is the highest judicial
body in the PRC. It supervises the judicial administration of the people’s courts at all levels.
The Civil Procedure Law of the PRC (2023 amendment) (ج
2023͍)) (the “ Civil Procedure Law ”), which was adopted in 1991 and amended in
2007, 2012, 2017, 2021 and 2023, sets forth the criteria for instituting a civil action, the
jurisdiction of the people’s courts, the procedures to be followed for conducting a civil action
and the procedures for enforcement of a civil judgment or order. All parties to a civil action
conducted within the PRC must comply with the Civil Procedure Law. Generally, a civil case
is initially heard by a local court of the municipality or province in which the defendant
resides. The parties to a contract may, by written agreement, select a judicial court where civil
actions may be brought, provided that the judicial court is either the plaintiff’s or the
defendant’s domicile, the place of execution or implementation of the contract or the place of
the object of the action, provided that such choice shall not violate the requirements of the level
of jurisdiction and exclusive jurisdiction.
A foreign national or enterprise generally has the same litigation rights and obligations as
a citizen or legal person of the PRC. If a foreign country’s judicial system limits the litigation
rights of PRC citizens and enterprises, the PRC courts may apply the same limitations to the
citizens and enterprises of that foreign country within the PRC.
If any party to a civil action refuses to comply with a judgment or ruling made by a
people’s court or an award made by an arbitration panel in the PRC, the other party may apply
to the people’s court for the enforcement of the same. There are time limits of two years
imposed on the right to apply for such enforcement. If a person fails to satisfy a judgment made
by the court within the stipulated time, the court will, upon application by either party, enforce
the judgment in accordance with the law.
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A party seeking to enforce a judgment or ruling of a people’s court against a party who
is not personally or whose property is not within the PRC may apply to a foreign court with
jurisdiction over the case for recognition and enforcement of the judgment or ruling. A foreign
judgment or ruling may also be recognized and enforced by the people’s court according to
PRC enforcement procedures if the PRC has entered into or acceded to an international treaty
with the relevant foreign country, which provides for such recognition and enforcement, or if
the judgment or ruling satisfies the court’s examination according to the principle of
reciprocity, unless the people’s court finds that the recognition or enforcement of such
judgment or ruling will result in a violation of the basic legal principles of the PRC, its
sovereignty or security or against social and public interest.
Pursuant to the Arrangement for Reciprocal Recognition and Enforcement of Judgments
in Civil and Commercial Cases between Courts of the Mainland and Hong Kong Special
Administrative Region (ʝႩ̙ձੂБ͏ਠ
τર), which came into effect on January 29, 2024, a party with an enforceable
final court judgment rendered by any designated people’s court of China or any designated
Hong Kong court requiring payment of money in a civil and commercial case, may apply for
recognition and enforcement of the judgment in the relevant people’s court of China or Hong
Kong court.
THE PRC COMPANY LA W, OVERSEAS LISTING TRIAL MEASURES AND
GUIDANCE FOR ARTICLES OF ASSOCIATION
A joint stock limited company incorporated in the PRC and seeking a listing on the Stock
Exchange is mainly subject to the following laws and regulations in the PRC:
 The Company Law of the PRC () (the “ Company Law ”)
which was promulgated by the Standing Committee of the NPC on December 29, 1993,
came into effect on July 1, 1994, revised on December 25, 1999, August 28, 2004,
October 27, 2005, December 28, 2013, October 26, 2018 and December 29, 2023
respectively and the latest revision of which was implemented on July 1, 2024.
 The Overseas Listing Trial Measures and five relevant guidelines which were
promulgated by the CSRC on February 17, 2023 pursuant to the PRC Securities Law and
are applicable to the direct and indirect overseas share offering or listing of domestic
companies; and
 The Guidelines for Articles of Association of Listed Companies (ˏ)
(the “ Guidance for Articles of Association ”) which was most recently revised on March
28, 2025 by the CSRC. The Articles of Association are formulated based on the Guidance
for Articles of Association on a reference basis, the summary of which is set out in the
section entitled “Appendix V – Summary of the Articles of Association” to this
Prospectus.
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Set out below is a summary of the major provisions of the currently effective Company
Law, the Overseas Listing Trial Measures and the Guidance for Articles of Association which
are applicable to the Company.
General
A joint stock limited company refers to an enterprise legal person incorporated in
accordance with the Company Law with its registered capital divided into shares of equal par
value. The liability of its shareholders is limited to the amount of shares held by them and the
company is liable to its creditors for an amount equal to the total value of its assets.
A joint stock limited company shall conduct its business in accordance with laws and
administrative regulations. It may invest in other limited liability companies and joint stock
limited companies and its liabilities with respect to such invested companies are limited to the
amount invested. If it is prescribed by any law that a company shall not become a capital
contributor that shall bear the joint and several liability for the debts of the enterprises it
invests in, such provisions shall prevail.
Incorporation
A joint stock limited company may be incorporated by promotion or public subscription.
A joint stock limited company may be incorporated by a minimum of one but not more
than 200 promoters, and at least half of the promoters must have residence within the PRC.
Companies incorporated by promotion are companies of which the entire registered capital is
subscribed for by the promoters.
For companies incorporated by way of promotion, the promoters shall subscribe for the
shares required to be subscribed for by them and make full payment for the shares they have
subscribed for prior to the establishment of a joint stock limited company. Procedures relating
to the transfer of titles to non-monetary assets shall be duly completed if such assets are to be
contributed as capital. Promoters who fail to pay up their capital contributions or the actual
value of the non-monetary property used as capital contributions is obviously lower than the
shares subscribed for, other promoters shall bear several and joint liability with such promoter
to the extent of the insufficient capital contributions.
Where companies are incorporated by public subscription, not less than 35% of their total
number of shares must be subscribed for by the promoters, unless otherwise provided for by
laws or administrative regulations. The promoters shall preside over and convene an
inauguration meeting within thirty days from the date of the full payment of subscription
capital. The inauguration meeting shall be formed by the promoters and subscribers. Where the
shares issued are not fully subscribed for within the offer period stipulated in the share offering
prospectus, or where the promoter fails to convene an inauguration meeting within thirty days
of the subscription capital for the shares issued being fully paid up, the subscribers may
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demand that the promoters refund the subscription capital so paid together with the interest
calculated at bank rates of a deposit for the same period. Within thirty days of the conclusion
of the inauguration meeting, the board of directors shall apply to the registration authority for
registration of the establishment of the company. A company is formally established and has
the status of a legal person after the registration with the relevant administration for market
regulation has been completed and a business license has been issued.
REGISTERED CAPITAL
The promoters may make a capital contribution in currencies, or non-monetary assets
such as in kind, intellectual property rights or land use rights which can be appraised with
monetary value and transferred lawfully, except for assets which are prohibited from being
contributed as capital by laws or administrative regulations. If a capital contribution is made
in non-monetary assets, a valuation of the assets contributed must be carried out pursuant to
the provisions of laws or administrative regulations on valuation without any over-valuation or
under-valuation.
The shares of a company are represented by stocks. A stock is a certificate issued by the
company to certify the share held by a shareholder. The stock issued by the company shall be
in the form of registered stock.
All issue of shares of a joint stock limited company shall be based on the principles of
equality and fairness. The same class of shares must carry equal rights. Shares issued at the
same time and within the same class must be issued on the same conditions and at the same
price. It may issue shares at par value or at a premium, but it may not issue shares below the
par value.
Under the Overseas Listing Trial Measures, if a domestic company offers shares overseas,
it may raise funds and dividend distributions in foreign currency or Renminbi.
Under the Company Law, a company issuing registered share certificates shall maintain
a shareholder registry which sets forth the following matters:
 the name and domicile of each shareholder;
 the type of shares and number of shares subscribed by each shareholder;
 the serial numbers of shares held by each shareholder; and
 the date on which each shareholder acquired the shares.
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INCREASE OF REGISTERED CAPITAL AND ISSUE OF SHARES
In light of its operational and development needs and in accordance with laws and
regulations, a company may increase its share capital under any of the following methods,
subject to the resolutions be passed at a general meeting: (i) a public offering of shares; (ii) a
private placement of shares; (iii) offering of bonus shares to existing shareholders; (iv) the
conversion of reserve funds into shares; and (v) any other methods provided in law and
administrative regulations and approved by the CSRC.
Pursuant to the Company Law, a company may, according to its articles of association,
issue the following classified shares, which have different rights from those of the ordinary
shares: (i) shares with priority or inferior rights to profits or remaining property in distribution;
(ii) shares with more or less voting rights per share than those of the ordinary shares; (iii)
shares whose transfer is subject to the consent of the company and other restrictions; and (iv)
other classified shares provided by the State Council. A company making a public offering of
shares shall not issue any of the classified shares as prescribed on items (ii) and (iii), except
those issued prior to the public offering. Where a company is issuing new shares, resolutions
shall be passed at general meeting in accordance with the articles of association in respect of
the class and amount of the new shares, the issue price of the new shares, the commencement
and end dates for the issue of the new shares and when the new shares are proposed to be issued
to existing shareholders, the class and amount of such new shares.
To offer shares overseas, the domestic company shall report the application documents for
offering and listing to the CSRC for record-filing within three business days after submission
of the application documents for offering and listing overseas.
REDUCTION OF REGISTERED CAPITAL
A company may reduce its registered capital in accordance with the following procedures
prescribed by the Company Law:
 the company shall prepare a balance sheet and an inventory of the assets;
 the reduction of registered capital shall be approved by a general meeting;
 the company shall inform its creditors of the reduction in registered capital within
10 days and publish an announcement of the reduction in the newspaper within 30
days after the resolution approving the reduction has been passed;
 creditors shall within 30 days after receiving the notice, or within 45 days of the
public announcement if no notice has been received, require the company to pay its
debts or provide corresponding guarantees covering the debts;
 the company shall apply to the relevant administration of registration for the
registration of the reduction in registered capital.
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REPURCHASE OF SHARES
According to the Company Law, a joint stock limited company may not purchase its
shares other than for one of the following purposes: (i) to reduce its registered capital; (ii) to
merge with another company that holds its shares; (iii) to grant its shares for carrying out an
employee stock ownership plan or equity incentive plan; (iv) to purchase its shares from
shareholders who vote against the resolution regarding the merger or division with other
companies at a general meeting; (v) to apply shares for conversion of convertible corporate
bonds issued by a listed company; and (vi) to maintain the company value and protect the
shareholders’ interests of a listed company as necessary.
Repurchase of its own shares on the grounds set out in (i) and (ii) above shall be subject
to resolution passed by the general meeting; repurchase of its own shares on the grounds set
out in (iii), (v) or (vi) above shall be subject to a resolution of the company’s board of directors
shall be made by a two-third majority of directors attending the meeting in accordance with the
provisions of the company’s articles of association or as authorized by the general meeting.
Following the repurchase of its own shares in accordance with (i) above, such shares shall
be canceled within 10 days from the date of repurchase; the shares shall be transferred or
canceled within six months if the repurchase of its own shares is in accordance with either (ii)
or (iv) above; and the shares repurchased in accordance with (iii), (v) or (vi) above shall not
exceed 10% of the company’s total issued shares, and shall be transferred or canceled within
three years.
A listed company shall perform its obligation of information disclosure according to the
provisions of the Securities Law when repurchasing its own shares. In the event the repurchase
of its own shares is in accordance with (iii), (v) or (vi) above, centralized public trading shall
be adopted.
A company shall not accept its own shares as the subject matter of a mortgage.
TRANSFER OF SHARES
Shares held by shareholders may be transferred in accordance with the relevant laws and
regulations. Pursuant to the Company Law, transfer of shares by shareholders shall be carried
out at a legally established securities exchange or in other ways stipulated by the State Council.
Registered shares may be transferred after the shareholders endorse the back of the share
certificates or in any other manner specified by laws or administrative regulations. Following
the transfer, the company shall enter the names and addresses of the transferees into its share
register. No changes of registration in the share register described above shall be effected
during a period of twenty days prior to convening a general meeting or five days prior to the
record date for the purpose of determining entitlements to dividend distributions, subject to any
legal provisions on the registration of changes in the share register of listed companies.
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According to the Company law, shares issued prior to the public issuance of shares shall
not be transferred within one year from the date of the joint stock limited company’s listing on
a stock exchange. Directors, supervisors and the senior management shall declare to the
company their shareholdings in the company and any changes of such shareholdings; they shall
not transfer more than 25% of all the shares they hold in the company annually during their
tenure; and they shall not transfer the shares they hold within one year from the date on which
the company’s shares are listed and commenced trading on a stock exchange, nor within six
months after their resignation from their positions with the company.
SHAREHOLDERS
According to the Company Law, the rights of holders of ordinary shares of a joint stock
limited company include:
 the right to attend or appoint a proxy to attend general meetings and to vote thereat;
 the right to transfer shares in accordance with laws, administrative regulations and
provisions of the articles of association;
 the right to inspect the company’s articles of association, share register, counterfoil
of company debentures, minutes of general meetings, resolutions of meetings of the
board of directors, resolutions of meetings of the board of supervisors and financial
and accounting reports and to make proposals or enquiries on the company’s
operations;
 the right to bring an action in the people’s court to rescind resolutions passed by
general meetings and board of directors where the articles of association is violated
by the above resolutions;
 the right to receive dividends and other types of interest distributed in proportion to
the number of shares held;
 in the event of the termination or liquidation of the company, the right to participate
in the distribution of residual properties of the company in proportion to the number
of shares held; and
 other rights granted by laws, administrative regulations, other regulatory documents
and the company’s articles of association.
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The obligations of a shareholder include the obligation to abide by the company’s articles
of association, to pay the subscription moneys in respect of the shares subscribed for and in
accordance with the form of making capital contributions, to be liable for the company’s debts
and liabilities to the extent of the amount of his or her subscribed shares and any other
shareholders’ obligation specified in the company’s articles of association.
SHAREHOLDER’S GENERAL MEETINGS
The general meeting is the organ of authority of the company, which exercises its powers
in accordance with the Company Law. According to the Company Law, the general meeting
exercises the following principal powers:
 to elect or remove the directors and supervisors (other than the representative of the
employees of the company) and to decide on matters relating to the remuneration of
directors and supervisors;
 to examine and approve reports of the board of directors;
 to examine and approve reports of the board of supervisors;
 to examine and approve the company’s proposals for profit distribution plans and
loss recovery plans;
 to decide on any increase or reduction of the company’s registered capital;
 to decide on the issue of bonds by the company;
 to decide on issues such as merger, division, dissolution and liquidation of the
company and other matters;
 to amend the company’s articles of association; and
 other powers as provided for in the articles of association.
Annual general meeting is required to be held once every year. Extraordinary general
meeting is required to be held within two months after the occurrence of any of the following:
 the number of directors is less than the number stipulated by the law or less than two
thirds of the number specified in the articles of association;
 the aggregate losses of the company which are not recovered reach one-third of the
company’s total paid-in registered capital;
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 when shareholders individually or in aggregate holding 10% or more of the
company’s shares request the convening of an extraordinary general meeting;
 whenever the board of directors deems necessary;
 when the board of supervisors so requests; or
 other circumstances as provided for in the articles of associations.
According to the Company Law, general meetings shall be convened by the board of
directors, and presided over by the chairman of the board of directors. In the event that the
chairman is incapable of performing or does not perform his/her duties, the meeting shall be
presided over by the vice chairman. In the event that the vice chairman is incapable of
performing or not performing his/her duties, a director nominated by more than half of
directors shall preside over the meeting.
Where the board of directors is incapable of performing or not performing its duties of
convening the general meeting, the board of supervisors shall convene and preside over such
meeting in a timely manner. In case the board of supervisors fails to convene and preside over
such meeting, shareholders alone or in aggregate holding more than 10% of the company’s
shares for 90 days consecutively may unilaterally convene and preside over such meeting.
Where the board of directors is incapable of performing or not performing its duties of
convening the general meeting, the board of supervisors shall convene and preside over such
meeting in a timely manner. In case the board of supervisors fails to convene and preside over
such meeting, shareholders alone or in aggregate holding more than 10% of the company’s
shares for 90 days consecutively may unilaterally convene and preside over such meeting.
According the Company Law, notice of annual general meeting shall state the time and
venue of and matters to be considered at the meeting and shall be given to all shareholders 20
days before the meeting. Notice of extraordinary general meetings shall be given to all
shareholders 15 days prior to the meeting.
There is no specific provision in the Company Law regarding the number of shareholders
constituting a quorum in a general meeting.
According to the Company Law, shareholders present at general meeting have one vote
for each share they hold, save that shares held by the company are not entitled to any voting
rights.
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Pursuant to the provisions of the articles of association or a resolution of the general
meeting, the accumulative voting system may be adopted for the election of directors and
supervisors at the general meeting. Under the accumulative voting system, each share shall be
entitled to vote equivalent to the number of directors or supervisors to be elected at the general
meeting and shareholders may consolidate their voting rights when casting a vote.
Pursuant to the Company Law, resolutions of the general meeting shall be adopted by
more than half of the voting rights held by the shareholders present at the meeting. However,
resolutions of the general meeting regarding the following matters shall be adopted by more
than two-thirds of the voting rights held by the shareholders present at the meeting:
(i) amendments to the articles of association; (ii) the increase or decrease of registered capital;
(iii) the merger, division, dissolution, liquidation or change in the form of the company; and
(iv) other matters considered by the general meeting, by way of an ordinary resolution, to be
of a nature which may have a material impact on the company and should be adopted by a
special resolution.
According to the Company Law, meeting minutes shall be prepared in respect of decisions
on matters discussed at the general meeting. The chairman of the meeting and directors
attending the meeting shall sign to endorse such minutes. The minutes shall be kept together
with the shareholders’ attendance register and the proxy forms.
BOARD OF DIRECTORS
According to the Company Law, a joint stock limited company shall have a board of
directors which shall have at least three members. For a company that has three hundred or
more employees, the board of directors shall include the staff representative unless the board
of supervisors has been established and already included the staff representative supervisor.
The term of a director shall be stipulated in the articles of association, provided that no term
of office shall last for more than three years. A director may serve consecutive terms if
re-elected. A director shall continue to perform his/her duties as a director in accordance with
the laws, administrative regulations and articles of association until a duly re-elected director
takes office, if re-election is not conducted in a timely manner upon the expiry of his/her term
of office, or if the resignation of directors results in the number of directors being less than the
quorum.
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According to the Company Law, the board of directors mainly exercises the following
powers:
 to convene the general meetings and report on its work to the general meetings;
 to implement the resolutions passed in general meetings;
 to decide on the company’s business plans and investment proposals;
 to formulate the company’s profit distribution proposals and loss recovery
proposals;
 to formulate proposals for the increase or reduction of the company’s registered
capital and the issuance of corporate bonds;
 to prepare plans for the merger, division, dissolution and change in the form of the
company;
 to decide on the setup of the company’s internal management organs;
 to appoint or dismiss the company’s manager and decide on his/her remuneration
and, based on the manager’s recommendation, to appoint or dismiss any deputy
manager and financial officer of the company and to decide on their remunerations;
 to formulate the company’s basic management system; and
 to exercise any other power under the articles of association.
MEETINGS OF THE BOARD OF DIRECTORS
According to the Company Law, the board of directors of a joint stock limited company
shall hold at least two meetings per year. The board of directors shall issue a notice of meeting
to all directors and supervisors 10 days before the meeting. Shareholders representing more
than 10% of the voting rights, more than one-third of the directors or the board of supervisors
may propose to convene an extraordinary meeting of the board of directors. The chairman of
the board of directors shall convene and preside over a meeting of the board of directors within
10 days from the receipt of the proposal. A meeting of the board of directors may only be held
if half or more of the directors are present. Resolutions of the board of directors shall be
approved by a majority of all directors. Resolutions approved by the board of directors shall
be by one person, one vote. Directors shall attend meetings of the board of directors in person.
If a director is unable to attend for any reason, he/she may appoint another director to attend
the meeting on his/her behalf by a written power of attorney specifying the scope of
authorization.
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If a resolution of the board of directors violates any laws, administrative regulations or
the articles of association, and as a result of which the company sustains serious losses, the
directors participating in the resolution are liable to compensate the company. However, if it
can be proved that a director expressly objected to the resolution when the resolution was voted
on, and that such objection was recorded in the minutes of the meeting, such director shall be
relieved from that liability.
CHAIRMAN OF THE BOARD OF DIRECTORS
Pursuant to the Company Law, the board of directors shall appoint a chairman and may
appoint a vice chairman. The chairman and the vice chairman shall be elected with approval
of more than half of all the directors. The chairman shall convene and preside over board
meetings and review the implementation of board resolutions. The vice chairman shall assist
the chairman to perform his/her duties. Where the chairman is incapable of performing or is not
performing his/her duties, the duties shall be performed by the vice chairman. Where the vice
chairman is incapable of performing or is not performing his/her duties, a director elected by
more than half of the directors shall perform his/her duties.
QUALIFICATIONS OF DIRECTORS
Under the Company Law, the following person may not serve as a director in a company:
 a person without capacity or restricted capacity to undertake any civil liabilities;
 a person who has been sentenced to any criminal penalty for corruption, bribery,
embezzlement, misappropriation of property or destruction of the socialist economic
order, or who has been deprived of his political rights due to his crimes and such
sentence has expired for no more than five years, or who is granted probation, if no
more than two years have passed since the expiration of the probation period;
 a person who has been a former director, factory manager or manager of a company
or an enterprise that has entered into insolvent liquidation and who was personally
liable for the insolvency of such company or enterprise, where no more than three
years have elapsed since the date of the completion of the bankruptcy and
liquidation of the company or enterprise;
 a person who has been a legal representative of a company or an enterprise that has
had its business license revoked due to violations of the law or has been ordered to
close down by law and the person was personally responsible, where less than three
years have elapsed since the date of such revocation or the order to close down; or
 a person who is listed as a dishonest person subject to enforcement by the people’s
court due to failure to pay off a large amount of unliquidated mature debts.
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BOARD OF SUPERVISORS
A joint stock limited company shall have a board of supervisors composed of not less than
three members. The board of supervisors shall consist of representatives of the shareholders
and an appropriate proportion of representatives of the company’s staff, among which the
proportion of representatives of the company’s staff shall not be less than one-third, and the
actual proportion shall be determined in the articles of association. Representatives of the
company’s staff at the board of supervisors shall be democratically elected by the company’s
staff at the staff representative assembly, general staff meeting or otherwise.
Directors and senior management shall not act concurrently as supervisors.
The board of supervisors shall appoint a chairman and may appoint a vice chairman. The
chairman and the vice chairman of the board of supervisors shall be elected by more than half
of the supervisors. The chairman of the board of supervisors shall convene and preside over
board of supervisors meetings. Where the chairman of the board of supervisors is incapable of
performing or is not performing his/her duties, the vice chairman of the board of supervisors
shall convene and preside over supervisory board meetings. Where the vice chairman of the
board of supervisors is incapable of performing or is not performing his/her duties, a supervisor
nominated by more than half of the supervisors shall convene and preside over meetings of the
board of supervisors.
Each term of office of a supervisor is three years and he/she may serve consecutive terms
if re-elected. A supervisor shall continue to perform his/her duties as a supervisor in accordance
with the laws, administrative regulations and the articles of association until a duly re-elected
supervisor takes office, if re-election is not conducted in a timely manner upon the expiry of
his/her term of office or if the resignation of supervisors results in the number of supervisors
being less than the quorum. The board of supervisors meets at least once every six months. In
accordance with the Company Law, resolutions by the board of supervisors shall be passed by
a majority of all supervisors.
The board of supervisors may exercise its powers:
 to review the company’s financial position;
 to supervise the directors and senior management in their performance of their
duties and to propose the removal of directors and senior management who have
violated laws, regulations, the articles of association or shareholders’ resolutions;
 when the acts of directors or senior management are detrimental to the company’s
interests, to require the director and senior management to correct these acts;
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 to propose the convening of extraordinary general meetings and to convene and
preside over general meetings when the board of directors fails to perform the duty
of convening and presiding over general meetings under the PRC Company Law;
 to submit proposals to the general meetings;
 to bring actions against directors and senior management pursuant to the relevant
provisions of the PRC Company Law; and
 to exercise any other authority stipulated in the articles of association.
Supervisors may be present at board meetings and make inquiries or proposals in respect
of the resolutions of the board. The board of supervisors may investigate any irregularities
identified in the operation of the company and, when necessary, may engage an accounting firm
to assist its work at the cost of the company.
MANAGER AND SENIOR MANAGEMENT
Pursuant to the Company Law, a company shall have a manager who shall be appointed
or removed by the board of directors. The manager shall exercise his/her powers in accordance
with the company’s articles of association or the authorization of the board of directors.
Other provisions in the articles of association on the manager’s powers shall also be
complied with. The manager shall be present at meetings of the board of directors. However,
the manager shall have no voting rights at meetings of the board of directors unless he/she
concurrently serves as a director.
Pursuant to the Company Law, senior management refers to the manager, deputy manager,
financial officer, secretary to the board of directors of a listed company and other personnel as
stipulated in the articles of association.
DUTIES OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
Directors, supervisors and senior management are required under the Company Law to
comply with the relevant laws, regulations and the articles of association, and shall be obliged
to be faithful and diligent towards the company. Where the controlling shareholder or actual
controller of the company who does not serve as a director but actually attends to the
company’s affairs, shall comply with the foregoing provisions.
Directors, supervisors and management personnel are prohibited from abusing their
authority in accepting bribes or other unlawful income and from misappropriating the
company’s property.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-16 –


--- page 514 ---
Directors, supervisors and senior management are prohibited from:
 seizing the assets of the company or misappropriating company funds;
 depositing company funds into accounts under their own names or the names of
other individuals;
 taking advantage of power to accept bribes or other illegal income;
 accepting commissions paid by a third party for transactions conducted with the
company for their own benefit;
 unauthorized divulgence of confidential information of the company; and
 other acts in violation of their duty of loyalty to the company.
Where directors, supervisors and senior management directly or indirectly conclude any
contract or engage in transactions with the company, they shall report to the board of directors
or the shareholders’ meeting and seek approval by resolutions of the board of directors or the
shareholders’ meeting in accordance with the articles of association. The requirement shall also
apply to the conclusion of contracts or engagement in transactions by close relatives of the
directors, supervisors and senior management or enterprises directly or indirectly controlled by
close relatives of the directors, supervisors and senior management as well as persons who are
otherwise related to the directors, supervisors and senior management.
Directors, supervisors and senior management shall not take advantage of duty to seek
business opportunities for themselves or others that would have been directed to the company,
unless such act has been reported to and approved by the board of directors or the shareholders’
meeting in accordance with the articles of association or the company is unable to take the
business opportunity in accordance with applicable laws, administrative regulations, and the
articles of association.
Directors, supervisors and senior management shall not engage in the business similar to
those of the company for themselves or others, unless such act has been reported to and
approved by the board of directors or the shareholders’ meeting in accordance with the articles
of association.
Income generated by directors or senior management in violation of aforementioned shall
be returned to the company.
A director, supervisor or senior management who contravenes any laws, regulations or the
company’s articles of association in the performance of his/her duties resulting in any loss to
the company shall be liable to the company for compensation.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-17 –


--- page 515 ---
The Guidance for Articles of Association provides that a company’s directors and senior
management shall have duties of diligence towards the company, for example, the directors
shall be prudent, serious and diligent in exercising the authority conferred by the company to
ensure that the business activities of the company comply with state’s laws, administrative
regulations and various economic policy requirements and that the business activities do not
go beyond the scope of business activities specified in the company’s business license; the
directors shall treat all shareholders equally; the shareholders shall keep abreast of the
company’s business management status; both the directors and the senior management shall
sign written statements confirming periodic reports of the company and ensure that the
information disclosed by the company is true, accurate and complete; both the directors and the
senior management shall provide accurate information and materials to the board of
supervisors and shall not interfere with the performance of duties by the board of supervisors
or individual supervisors; both the directors and the senior management shall have other
diligence duties prescribed by laws, administrative regulations, departmental rules and the
company’s articles of association.
FINANCE AND ACCOUNTING
Pursuant to the Company Law, a company shall establish its own financial and accounting
systems according to the laws, administrative regulations and the regulations of the competent
financial departments of the State Council. At the end of each financial year, a company shall
prepare a financial report which shall be audited by an accounting firm in accordance with the
laws. The financial and accounting reports shall be prepared in accordance with the laws,
administrative regulations and the regulations of the financial departments of the State Council.
Pursuant to the Company Law, the company shall send the financial accounting report to
all shareholders in accordance with the period stipulated in the articles of association, and the
company’s financial accounting report shall be made available for inspection by shareholders
at least 20 days before the annual general meeting. A company that makes public stock
offerings shall publish its financial reports.
When distributing each year’s profits after taxation, the company shall set aside 10% of
its profits after taxation for the company’s statutory common reserve fund until the fund has
reached more than 50% of the company’s registered capital. When the company’s statutory
common reserve fund is not sufficient to make up for the company’s losses for the previous
years, the current year’s profits shall first be used to make good the losses before any allocation
is set aside for the statutory common reserve fund. After the company has made allocations to
the statutory common reserve fund from its profits after taxation, it may, upon passing a
resolution at a general meeting, make further allocations from its profits after taxation to the
discretionary common reserve fund. After the company has made good its losses and made
allocations to the abovementioned reserve fund, the remaining profits after taxation shall be
distributed in proportion to the number of shares held by the shareholders, except for those
which are not distributed in a proportionate manner as provided by the articles of association.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-18 –


--- page 516 ---
Profits distributed to shareholders in violation of the requirements described above must
be returned to the company. The company shall not be entitled to any distribution of profits in
respect of shares held by it.
The premium over the nominal value of the shares of the company on issue and other
income as required by relevant government authorities to be treated as the capital reserve fund
shall be accounted for as the capital reserve fund. The common reserve fund of a company shall
be applied to make good the company’s losses, expand its business operations or increase its
capital. Where any losses need to be covered with reserve fund of the company, discretionary
reserve fund and statutory common reserve fund shall first be used and if still insufficient,
capital reserve fund can be used in accordance with applicable provisions. Upon the transfer
of the statutory common reserve fund into increasing capital, the balance of the statutory
common fund shall not be less than 25% of the registered capital of the company before such
transfer.
The company shall have no accounting books other than the statutory books. The
company’s capital shall not be deposited in any account opened under the name of an
individual.
APPOINTMENT AND RETIREMENT OF ACCOUNTING FIRM
In accordance with the Company Law, the appointment or dismissal of the accounting
firm responsible for the company’s auditing shall be determined at a general meeting, by the
board of directors, or by the board of supervisors, as stipulated in the articles of association.
The accounting firm should be allowed to make representations when the general meeting, the
board of directors, or the board of supervisors votes on its dismissal. The company should
provide true and complete accounting evidence, accounting books, financial and accounting
reports and other accounting information to the engaged accounting firm without any refusal,
withholding or falsification of information.
The Guidance for Articles of Association provides that a company shall engage an
accounting firm which is qualified with the PRC Securities Law to provide services including
the audit of financial statements, the verification of net assets and other relevant consultancy
services. The engagement term is one year and may be extended. The audit fee for the
accounting firm shall also be determined by shareholders at a general meeting.
PROFIT DISTRIBUTION
According to the Company Law, a company shall not distribute profits before losses are
covered and the statutory common reserve fund is provided.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-19 –


--- page 517 ---
AMENDMENTS TO THE ARTICLES OF ASSOCIATION
Pursuant to the Company Law, the resolution of a general meeting regarding any
amendment to a company’s articles of association requires affirmative votes by more than
two-thirds of the votes held by shareholders attending the meeting.
Pursuant to the Guidance for Articles of Association, the company shall amend its articles
of association under any of the following circumstances: (i) where, after any amendment to the
PRC Company Law or any other applicable law or administrative regulation, the provisions of
the articles of association conflict with the law and/or administrative regulations amended; (ii)
where the company’s circumstances change to such an extent that they are inconsistent with
what is recorded in the articles of association; and (iii) where the general meeting decides to
amend the articles of association.
The Guidance for Articles of Association further provides that where any amendment to
the articles of association adopted by a general meeting is subject to approval by the competent
authorities, such amendment shall be submitted for approval; where any amendment involves
the company’s registration items, the company’s registration with the authority shall also be
amended. In addition, an announcement shall be made in accordance with the applicable
provisions provided that the amendment to the articles of association is required to be disclosed
by any law or regulation.
DISSOLUTION AND LIQUIDATION
Pursuant to the Company Law, a company shall be dissolved for any of the following
reasons: (i) the term of its operation set out in the articles of association has expired or other
events of dissolution specified in the articles of association have occurred; (ii) the shareholders
have resolved at a general meeting to dissolve the company; (iii) the company is dissolved by
reason of its merger or division; (iv) the business license of the company is revoked or the
company is ordered to close down or to be dissolved in accordance with the laws; or (v) the
company is dissolved by a people’s court in response to the request of shareholders holding
shares that represent more than 10% of the voting rights of all shareholders of the company,
on the grounds that the operation and management of the company has suffered serious
difficulties that cannot be resolved through other means, rendering ongoing existence of the
company a cause for significant losses to the shareholders’ interests.
On the occurrence of the abovementioned events, the company shall make an
announcement on the National Enterprise Credit Information Publicity System within ten days.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-20 –


--- page 518 ---
In the event of paragraphs (i) and (ii) above, the company may carry on its existence by
amending its articles of association if no property has been distributed to any shareholder. The
amendments to the articles of association in accordance with the provisions described above
shall require the approval of more than two-thirds of voting rights of shareholders attending a
general meeting.
Where the company is dissolved under the circumstances set forth in paragraph (i), (ii),
(iv) or (v) above, a liquidation group shall be formed to commence the liquidation procedure
within fifteen days of the date on which the dissolution event occurs.
Where the company is dissolved under the circumstances set forth in paragraph (i), (ii),
(iv) or (v) above, the liquidation procedure shall be conducted and directors shall be the
company’s liquidation obligor and it should establish a liquidation group within fifteen days of
the date on which the dissolution event occurs. The liquidation group shall be composed of
directors or any other persons determined by a general meeting. If a liquidation group is not
established within the prescribed period or the liquidation fails to effect after the establishment
of a liquidation group, the interested party may file an application with a people’s court,
requesting that the court appoint relevant personnel to form a liquidation group to administer
the liquidation. The people’s court should accept such application and form a liquidation group
to conduct liquidation in a timely manner.
The liquidation group may exercise following powers during the liquidation:
 to dispose of the company’s assets and to prepare a balance sheet and an inventory
of assets;
 to notify the creditors by notice or announcement;
 to deal with and settle any outstanding business related to the liquidation;
 to pay any outstanding tax together with any tax arising during the liquidation
process;
 to settle the company’s claims and liabilities;
 to distribute the company’s remaining assets after its debts have been paid off; and
 to represent the company in any civil procedures.
The liquidation group shall notify the company’s creditors within ten days from its
establishment, and publish an announcement in newspapers or on the National Enterprise
Credit Information Publicity System within sixty days.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-21 –


--- page 519 ---
A creditor shall lodge his claim with the liquidation group within thirty days of receipt
of the notification or within forty-five days of the date of the announcement if he has not
received any notification.
A creditor shall, in making his claim, state matters relevant to his creditor’s rights and
furnish relevant evidence. The liquidation group shall register such creditor’s rights. The
liquidation group shall not make any settlement to creditors during the period of the claim.
Upon disposal of the company’s property and preparation of the required balance sheet
and inventory of assets, the liquidation group shall draw up a liquidation plan and submit this
plan to a general meeting or a people’s court for endorsement. The remaining assets of the
company, after payment of liquidation expenses, employee wages, social insurance expenses
and statutory compensation, outstanding taxes and the company’s debts, shall be distributed to
shareholders in proportion to shares held by them.
The company shall continue to exist during the liquidation period, although it cannot
engage in operating activities that are not related to the liquidation. The company’s property
shall not be distributed to shareholders before repayments are made in accordance with the
requirements described above.
Upon liquidation of the company’s property and preparation of the required balance sheet
and inventory of assets, if the liquidation group becomes aware that the company does not have
sufficient assets to repay its liabilities, it must apply to a people’s court for a declaration of
bankruptcy in accordance with the laws. Following such declaration by the people’s court, the
liquidation group shall hand over the administration matters to the bankruptcy administrator
designated by the people’s court.
Upon completion of the liquidation, the liquidation group shall prepare a liquidation
report and submit it to the general meeting or a people’s court for confirmation of its
completion, and to the company registration authority to cancel the company’s registration, and
an announcement of its termination shall be published. Members of the liquidation group are
required to discharge their duties in good faith and in compliance with relevant laws.
Members of the liquidation group shall be prohibited from abusing their authority in
accepting bribes or other unlawful income and from misappropriating the company’s
properties. Members of the liquidation group are liable to indemnify the company and its
creditors in respect of any loss arising from their willful or material default.
Liquidation of a company declared bankrupt according to laws shall be processed in
accordance with the laws on corporate bankruptcy.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-22 –


--- page 520 ---
OVERSEAS LISTING
Pursuant to the Overseas Listing Trial Measures, both initial public offerings or listings
in overseas markets shall be filed with the CSRC within three business days after the relevant
application is submitted overseas. Subsequent securities offerings of an issuer in the same
overseas market where it has previously offered and listed securities shall be filed with the
CSRC within three business days after the offering is completed. Moreover, where the filing
documents are complete and in compliance with stipulated requirements, the CSRC will, within
twenty business days after receiving the filing documents, conclude the filing procedure and
publish the filing results on the CSRC website. Where the filing documents are incomplete or
do not conform to stipulated requirements, the CSRC shall request supplementation and
amendment thereto within five business days after receiving the filing documents. The issuer
shall then complete supplementation and amendment within thirty business days.
LOSS OF SHARE CERTIFICATES
A shareholder may, in accordance with the relevant provisions set out in the PRC Civil
Procedure Law, apply to a people’s court if his share certificate(s) in registered form is either
stolen, lost or destroyed, for a declaration that such certificate(s) will no longer be valid. After
a people’s court declares that such certificate(s) are invalid, the shareholder may apply to the
company for the issuance of a replacement certificate(s).
MERGER AND DEMERGER
Merger of companies may be conducted by absorption or consolidation. If companies
adopt the method of absorption, the absorbed company shall be dissolved. If companies are
incorporated in the form of consolidation, the parties to the merger shall be dissolved.
The parties to the merger shall enter into a merger agreement and prepare a balance sheet
and a list of properties. Within ten days of the date on which the resolution on merger is made,
the creditors shall be notified by the company and a public announcement shall be in the press
or on the National Enterprise Credit Information Publicity System within thirty days. The
creditors may require the company to repay its debts or provide guarantees for covering the
debts within thirty days of receipt of the notification or within forty-five days of the date of
the announcement if the creditor has not received any notification; and in case of a merger, the
credits and debts of the merging parties shall be assumed by the surviving or the new company.
Where a company merges with another company in which the former holds not less than
90% of the shares, the acquired company is not required to obtain approval by resolution of its
shareholders’ meeting, but shall notify the other shareholders who have the right to request the
company to buy its equities or shares as a reasonable price. If the price paid for a company’s
merger does not exceed 10% of the company’s net assets, approval by resolution of its
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-23 –


--- page 521 ---
shareholder’s meeting may not be required unless otherwise provided by the company’s articles
of association. Where a company’s merger is exempt from approval by resolution of the
shareholders’ meeting in the previous two cases, it shall be subject to approval by resolution
of the board of directors.
In case of a division, the company’s assets shall be divided and a balance sheet and an
inventory of assets shall be prepared. Within ten days of the date on which the resolution on
division is made, the creditors shall be notified by the company, and a public announcement
shall be made in the press or on the National Enterprise Credit Information Publicity System
within thirty days. The liabilities of the company which have accrued prior to the division shall
be jointly borne by the separated companies, unless otherwise stipulated in the agreement in
writing entered into by the company with creditors in respect of the settlement of debts prior
to division.
SECURITIES LA WS AND REGULATIONS OF PRC
The PRC has promulgated a number of regulations related to the issue and trading of
shares as well as information disclosure. In October 1992, the State Council established the
Securities Committee and the China Securities Regulatory Commission (CSRC). The
Securities Committee is responsible for coordinating the drafting of securities regulations,
formulating securities-related policies, planning the development of securities market, guiding,
coordinating and supervising all securities-related institutions in the PRC, and administering
the CSRC. The CSRC is the regulatory department of the Securities Committee, responsible for
drafting regulatory provisions for the securities market, supervising securities companies,
regulating the public offering of securities by PRC companies at home and abroad, overseeing
securities trading, compiling securities-related statistics, and conducting relevant research and
analysis. In April 1998, the State Council consolidated the two departments and reformed the
CSRC.
The Interim Provisional Regulations on the Administration of Share Issuance and Trading
covers the application and approval procedures for public offerings of equity securities, trading
of equity securities, acquisition of listed companies, custody, clearing and transfer of listed
equity securities, information disclosure, investigation, penalties of listed companies, and
dispute resolution.
On December 25, 1995, the State Council promulgated and implemented the Regulations
of the State Council Concerning Domestic Listed Foreign Shares of Joint Stock Limited
Companies (which was repealed on March 31, 2023). The provisions mainly cover the
issuance, subscription, trading and dividend declaration and other distribution of domestic
listed foreign-invested shares, as well as the information disclosure of joint stock limited
companies holding domestic listed foreign-invested shares.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-24 –


--- page 522 ---
The Securities Law of the People’s Republic of China (the “Securities Law”) took effect
on July 1, 1999, and was revised on August 28, 2004, October 27, 2005, June 29, 2013, August
31, 2014, and December 28, 2019, respectively. The latest revision of the Securities Law came
into effect on March 1, 2020. This is China’s first national securities law, consisting of 14
chapters and 226 articles, regulating, among other things, the issuance and trading of securities,
the acquisition by listed companies, and the obligations and responsibilities of stock
exchanges, securities companies, and the State Council’s securities regulatory authorities. The
Securities Law comprehensively regulates the activities of securities market in PRC. Article
224 of the Securities Law stipulates that domestic enterprises shall comply with relevant
regulations of the State Council to list their shares outside the PRC. Currently, the issuance and
trading of foreign-issued shares (including H shares) are mainly governed by the rules and
regulations promulgated by the State Council and the CSRC.
On November 14, 2019, the CSRC issued the Guidance for the Application for the “Full
Circulation” of Domestic Unlisted Shares of H-Share Companies, which was partially revised
on August 10, 2023 in accordance with the Decision on Revising and Abolishing Part of
Securities and Futures Policy Documents by CSRC. The guideline aims to regulate the listing
and circulation of unlisted domestic shares (including unlisted domestic shares held by
domestic shareholders prior to overseas listing, unlisted domestic shares issued in China after
overseas listing, and unlisted shares held by foreign shareholders) of joint-stock limited
companies listed on the Hong Kong Stock Exchange (hereinafter referred to as H-Share
Companies) (hereinafter referred to as “Full Circulation”).
Unlisted domestic joint-stock companies may submit an application for “Full Circulation”
when applying for overseas initial public offering and listing.
ARBITRATION AND ENFORCEMENT OF ARBITRAL A W ARDS
On August 31, 1994, the SCNPC passed the Arbitration Law of the People’s Republic of
China (the “Arbitration Law”), which came into effect on September 1, 1995, and was amended
on August 27, 2009, and September 1, 2017. According to the Arbitration Law, an arbitration
committee may, before the China Arbitration Association promulgates arbitration rules,
formulate interim arbitration rules in accordance with the Arbitration Law and the Civil
Procedure Law. Where the parties have by agreement provided arbitration as the method for
dispute resolution, the people’s court will refuse to accept the case, unless the arbitration
agreement is deemed invalid.
Where a dispute or claim of rights referred to in the preceding paragraph is referred to
arbitration, the entire claim or dispute must be referred to arbitration, and all persons who have
a cause of action based on the same facts giving rise to the dispute or claim or whose
participation is necessary for the resolution of such dispute or claim, must comply with the
arbitration. Disputes over the definition of shareholders and disputes over the issuer’s register
of shareholders need not be resolved by arbitration.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-25 –


--- page 523 ---
A claimant may elect for arbitration to be carried out at either the China International
Economic and Trade Arbitration Commission (“CIETAC”) in accordance with its arbitration
rules, or at the Hong Kong International Arbitration Centre (“HKIAC”) in accordance with its
Securities Arbitration Rules (the “Securities Arbitration Rules”). Once a claimant refers a
dispute or claim to arbitration, the other party shall submit to the arbitral body elected by the
claimant. If the claimant elects for arbitration to be carried out at the HKIAC, any party to the
dispute or claim may apply for a hearing to take place in Shenzhen in accordance with the
Securities Arbitration Rules. According to the CIETAC Arbitration Rules which was amended
on September 2, 2023 and implemented on January 1, 2024, CIETAC shall deal with economic
and trading disputes over contractual or non-contractual transactions based on the agreement
of the parties, including disputes involving Hong Kong based on the agreement of the parties.
The CIETAC is established in Beijing and its branches and centers have been set up in
Shenzhen, Shanghai, Tianjin, Chongqing, Zhejiang, Hubei, Fujian, Shanxi, Jiangsu, Sichuan,
and Shandong.
Under the Arbitration Law and the Civil Procedure Law, an arbitral award is final and
binding on the parties to the arbitration. If a party to the arbitration fails to comply with an
arbitral award, the other party to the award may apply to the people’s court for its enforcement.
A people’s court may refuse to enforce an arbitral award made by an arbitration commission
if there is any irregularity on the procedures or composition of arbitrators specified by law, or
if the award exceeds the scope of the arbitration agreement or is outside the jurisdiction of the
arbitration commission.
A party seeking to enforce an arbitral award of a PRC arbitration tribunal against a party
who, or whose property, is not within the PRC, may apply to a foreign court with jurisdiction
over the case for enforcement. Similarly, an arbitral award made by a foreign arbitral body may
be recognized and enforced by the PRC courts in accordance with the principle of reciprocity
or any international treaty concluded or acceded to by the PRC. The PRC has acceded to the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New Y ork
Convention”) adopted on June 10, 1958, pursuant to a resolution of the SCNPC passed on
December 2, 1986. The New Y ork Convention provides that all arbitral awards made in a state
which is a party to the New Y ork Convention shall be recognized and enforced by other parties
thereto, subject to their rights to refuse enforcement under certain circumstances, including
where the enforcement of the arbitral award is against the public policy of that state. It was
declared by the SCNPC simultaneously with the accession of the PRC that (i) the PRC will
only recognize and enforce foreign arbitral awards on the principle of reciprocity and (ii) the
PRC will only apply the New Y ork Convention in disputes considered under PRC laws to arise
from contractual and non-contractual mercantile legal relations.
An arrangement was reached between Hong Kong and the Supreme People’s Court for the
mutual enforcement of arbitral awards. On June 18, 1999, the Supreme People’s Court adopted
the Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland
and the Hong Kong Special Administrative Region, which took effect on February 1, 2000. The
above arrangement was amended by the Supplemental Arrangement Concerning the Mutual
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-26 –


--- page 524 ---
Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special
Administrative Region, which was adopted by the Supreme People’s Court and took effect on
November 27, 2020. In accordance with this arrangement, awards made by mainland arbitral
authorities under the Arbitration Law can be enforced in Hong Kong, and Hong Kong arbitral
awards are also enforceable in the mainland.
JUDICIAL JUDGEMENT AND ITS ENFORCEMENT
On January 14, 2019, the Judicial Committee of the Supreme People’s Court adopted the
Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and
Commercial Matters by the Courts of the Mainland and of the Hong Kong Special
Administrative Region, which came into effect on January 29, 2024 and seeks to establish a
mechanism with greater clarity and certainty for recognition and enforcement of judgements in
wider range of civil and commercial matters between Hong Kong and the Chinese Mainland.
The arrangement discontinued the requirement for a choice of court agreement for bilateral
recognition and enforcement. The arrangement further stipulates, among others, the scope and
particulars of judgments, the procedures and methods of the application for recognition and
enforcement, the review of the jurisdiction of the court that issued the original judgement, the
circumstances where the recognition and enforcement of judgement shall be refused, and the
approaches towards remedies for the reciprocal recognition and enforcement of judgements in
civil and commercial matters between the courts in Chinese Mainland and those in Hong Kong.
Upon implementation of this arrangement, the Arrangement on Reciprocal Recognition and
Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and
of the Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements
between Parties Concerned, adopted by the Judicial Committee of the Supreme People’s Court
on June 12, 2006 and effective from August 1, 2008, has been repealed.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-27 –


--- page 525 ---
This Appendix contains a summary of our Articles of Association for the primary purpose
of providing potential investors with an overview of the Articles of Association. As the
information contained below is in summary form, it does not contain any and all information
that may be important to potential investors.
The Articles of Association and amendments thereto shall be adopted or approved by
Shareholders at a general meeting in accordance with applicable laws and regulations
(including the Company Law of the PRC, the Securities Law of the PRC, the Guidelines on
Articles of Association of Listed Companies and the Hong Kong Listing Rules) and shall take
effect on the Listing Date.
SHARES
The shares of the Company shall take the form of registered shares, which are certificates
issued by the Company to certify the shares held by shareholders. The listing of the domestic
shares of the Company on the National Equities Exchange and Quotations shall be centralized
and registered with China Securities Depository and Clearing Corporation Limited. The H
Shares issued by the Company are mainly held in custody by the escrow company under the
Hong Kong Securities Clearing Company Limited.
The Company or its subsidiaries (including the Company’s affiliated enterprises) shall not
provide any financial assistance in the form of gifts, advances, guarantees, compensation or
loans to persons who purchase or intend to purchase the Company’s shares, except when the
Company implements an employee stock ownership plan.
For the benefit of the Company, the Company may provide financial assistance to others
to acquire shares of the Company or its parent company, subject to the resolution of the general
meeting or the resolution of the Board of Directors in accordance with the Company’s Articles
of Association or the authorization of the general meeting, but the cumulative total amount of
financial assistance shall not exceed 10% of the total issued share capital. The resolution of the
Board of Directors shall be passed by more than two-thirds of all directors.
The responsible directors and senior management officers of the Company shall be liable
for compensation of any losses caused to the Company in violation of the provisions.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-1 –


--- page 526 ---
Increase and Reduction and Repurchase of Shares
In accordance with the needs of business development, laws, regulations, the Hong Kong
Listing Rules and other securities regulatory rules of the places where the company’s shares are
listed, and upon respective resolutions passed by the general meeting, the Company may
increase its capital in the following ways:
(1) Public offering of shares in compliance with statutory procedures;
(2) Private offering of shares (including private placement through implementation of
equity incentives);
(3) Distribution of bonus shares to existing shareholders;
(4) Converting capital reserve into share capital;
(5) Other methods prescribed by laws, administrative regulations and approved by the
securities regulatory authority of the places where the Company’s shares are listed,
the China Securities Regulatory Commission and the Hong Kong Stock Exchange.
The Company may reduce its registered capital. The Company reducing its registered
capital shall comply with the Company Law and other relevant provisions and the procedures
stipulated in the Articles of Association. The registered capital of the Company after the capital
reduction shall not be lower than the statutory minimum amount.
The Company may, in accordance with laws, administrative regulations, departmental
regulations, regulatory documents, the Hong Kong Listing Rules, other securities regulatory
rules of the places where the Company’s shares are listed and the provisions of the Articles of
Association, acquire its shares in the following circumstances:
(1) Reducing the Company’s registered capital;
(2) Merging with other companies holding the Company’s shares;
(3) Using shares for employee stock ownership plans or equity incentives;
(4) Shareholders who are against the merger or division resolutions made at the general
meeting requiring the Company to purchase their shares;
(5) Using shares to convert corporate bonds issued by the Company that can be
converted into shares;
(6) Where it is necessary for the safeguard of the value of the Company and the interests
of its shareholders;
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--- page 527 ---
(7) Other circumstances under which the Company’s shares can be acquired in
accordance with laws, administrative regulations, departmental regulations and the
regulatory rules of securities of the places where the Company’s shares are listed.
Apart from the foregoing, the Company shall not engage in trading in its own shares.
Any purchase by the Company of its own shares under the circumstances as required in
(1) and (2) shall be resolved at a general meeting; any purchase by the Company of its own
shares under the circumstances as required in (3), (5) and (6) shall be in accordance with the
authorization of the general meeting and approved by a resolution of the Board meeting where
over two-thirds of the directors are present, unless otherwise provided in the Hong Kong
Listing Rules.
Where the Company has purchased its own Shares according to the above provision, in
the event of (1), the same shall be cancelled within 10 days from the date of purchase; in the
event of (2) or (4) above, the same shall be transferred or cancelled within 6 months; in the
event of (3), (5) and (6), the total Shares of the Company held by the Company itself shall not
exceed 10% of its total Shares in issue and shall be transferred or cancelled within 3 years after
the purchase.
Transfer of Shares
Shares of the Company may be transferred in accordance with the law. If the listed shares
of the Company are approved for public transfer on the National Equities Exchange and
Quotations, the transfer shall be conducted in accordance with relevant laws, administrative
regulations, departmental regulations and the relevant business rules of the National Equities
Exchange and Quotations. The transfer of H Shares of the Company shall be registered with
the local share registrar in Hong Kong entrusted by the Company. All transfers of H Shares
shall be in the form of a written transfer instrument in normal or ordinary form or in any other
form endorsed by the Board of Directors (including such standard transfer form or transfer
form as prescribed by the Hong Kong Stock Exchange from time to time); and such transfer
instrument may only be in the form of hand signature or affixed with the company seal (if the
transferor or transferee is a company). If the transferor or transferee is an authorized clearing
house or its agent within the meaning of the relevant ordinances of the laws of Hong Kong in
force from time to time, the instrument of transfer may be signed by hand or in printed form.
All instruments of transfer shall be deposited at the Company’s legal address or such address
designated by the Board of Directors from time to time.
The Company shall not accept the Company’s shares as the subject of a pledge.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 528 ---
SHAREHOLDERS AND GENERAL MEETINGS
Register of Shareholders
The Company shall keep a register of members at the Company, which shall be sufficient
evidence to prove that a shareholder holds the Shares of the Company, except where there is
evidence to the contrary. Shareholders shall enjoy rights and assume obligations according to
the class of shares held by them; shareholders holding the same class of shares shall enjoy the
same rights and assume the same obligations. The register of members shall be kept by the
secretary to the Board. The register of members shall record the following:
(1) Name and domicile of the shareholder;
(2) The class and number of shares held by each shareholder;
(3) The number of the share certificates held by each shareholder;
(4) The date on which each shareholder obtained the shares.
When the Company convenes a general meeting, distributes dividends, liquidates, or
engages in other acts that require confirmation of the identity of the shareholders, the Board
of Directors or the convener of the general meeting shall determine the shareholding record
date. Shareholders whose names appear on the register after the close of business on the
shareholding record date are the shareholders with relevant rights and interests.
The Hong Kong branch register of shareholders must be available for inspection by
shareholders, but the Company may be allowed to suspend shareholder registration procedures
under conditions equivalent to the following:
(1) After giving notice in accordance with subsection (2), the Company may close its
register of members for one or more periods, but the total period of closure shall not
exceed 30 days within one year;
(2) A notice referred to in subsection (1) shall, if given by the Company, be given in
accordance with the listing rules applicable to the relevant stock market; or shall be
given by advertisement in a newspaper of general circulation in Hong Kong; and, if
given by any other company, shall be given by advertisement in a newspaper of
general circulation in Hong Kong;
(3) In any year, the period of 30 days referred to in subsection (1) may be extended by
resolutions passed by the shareholders of the Company during that year;
(4) The period of 30 days referred to in subsection (1) shall not be extended in any year
by an additional period exceeding 30 days or by more than one additional period the
total of which exceeds 30 days.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 529 ---
Shareholders
Shareholders of the Company shall enjoy the following rights:
(1) To receive dividends and other forms of profit distributions in proportion to their
shareholdings;
(2) To request, convene, preside over, attend or appoint a proxy to attend general
meetings and to exercise voting rights;
(3) To supervise the operations of the Company, and the right to present proposals or to
raise inquiries;
(4) To transfer, gift or pledge the shares held in accordance with laws, administrative
regulations, the Hong Kong Listing Rules and other securities regulatory rules of the
places where the Company’s shares are listed and the Articles of Association;
(5) To inspect the Articles of Association, the register of shareholders, the stubs of
corporate bonds, the minutes of general meetings, the resolutions of the Board of
Directors meetings, and the financial and accounting reports;
(6) To participate in the distribution of remaining assets of the Company in proportion
to its shareholding when the Company is terminated or liquidated;
(7) To require the Company to acquire his/her/its shares for such shareholders who are
against any resolution in relation to a merger or division of the Company;
(8) Shareholders have the right to know and the right to participate in the major issues
of the Company as stipulated by laws, administrative regulations and the Articles of
Association;
(9) Other rights as provided for in laws, administrative regulations, departmental rules,
the Hong Kong Listing Rules and other securities regulatory rules of the places
where the Company’s shares are listed or the Articles of Association.
If a shareholder requests to access the relevant information or materials mentioned in the
preceding article, he shall provide the Company with written documents certifying the class
and number of shares he holds in the Company. The Company shall provide such documents
upon the shareholder’s request after verifying the identity of the shareholder. Shareholders who
access or copy the relevant information described in the preceding article or request materials
shall comply with the laws and administrative regulations on the protection of state secrets,
business secrets, personal privacy and personal information.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 530 ---
General Provisions of General Meetings
The general meeting is the Company’s authority body and exercises the following powers
in accordance with the law:
(1) To elect and replace directors, and decide on matters concerning the remuneration
of directors;
(2) To consider and approve the report of the Board of Directors;
(3) To consider and approve the profit distribution plan and loss recovery plan of the
Company;
(4) To resolve on the increase or decrease in registered capital of the Company;
(5) To resolve on the issuance of corporate bonds;
(6) To resolve on merger, division, dissolution and liquidation of the Company or
alteration on the form of the Company;
(7) To amend the Articles of Association;
(8) To resolve on the Company’s engagement or dismissal of the accounting firm that
undertakes the Company’s auditing services;
(9) To consider and approve the change of use of proceeds;
(10) To consider the equity incentive plan and employee stock ownership plan;
(11) To consider and approve the guarantee matters stipulated in Article 48 of the Articles
of Association;
(12) To consider and approve the repurchase of the Company’s shares;
(13) Reviewing matters concerning the purchase or sale of major assets by the Company
within one year that exceed 30% of the Company’s latest audited total assets;
(14) To consider other matters which shall be decided by the general meeting as required
by laws, administrative regulations, departmental regulations, the Hong Kong
Listing Rules, other securities regulatory rules of the places where the Company’s
shares are listed or the Articles of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 531 ---
The general meeting may authorize the Board of Directors to make resolutions on the
issuance of corporate bonds. Otherwise, the functions and powers of the above-mentioned
general meeting shall not be exercised by the Board of Directors by way of authorization.
Any guarantee provided by the Company shall be submitted to the Board of Directors of
the Company for consideration; any guarantee under any of the following circumstances shall
also be submitted to the general meeting for consideration and approval.
(1) Any guarantee provided by the Company and its controlled subsidiaries after the
total amount of external guarantees exceeds 50% of the latest net assets;
(2) Any guarantee provided by the Company after the total amount of its external
guarantees exceeds 30% of the latest total assets;
(3) Guarantees exceeding 30% of the latest total assets, calculated on the basis of the
cumulative amount of guarantees for twelve consecutive months;
(4) Guarantees provided for the guarantors whose assets-liability ratio exceeds 70%;
(5) A single guarantee amount exceeding 10% of the latest net assets;
(6) Guarantees provided to shareholders, de facto controllers and their affiliates/related
parties;
(7) Other external guarantees that shall be considered and approved by the general
meeting in accordance with national laws, administrative regulations, departmental
regulations, the Hong Kong Listing Rules, other securities regulatory rules of the
places where the Company’s shares are listed or the Articles of Association.
The provision of guarantees for affiliates/related parties by the Company shall have
reasonable business logic and shall be submitted to the general meeting for consideration after
being considered and approved by the Board of Directors. The provision of guarantees by the
Company for shareholders, de facto controllers and their affiliates/related parties shall be
submitted to the general meeting for consideration. The provision of guarantees by the
Company for the controlling shareholders, de facto controllers and their affiliates/related
parties, the controlling shareholders, de facto controllers and their affiliates/related parties
shall provide counter guarantees.
Transactions (other than provision of guarantees) by the Company that meet any of the
following criteria shall be submitted to the general meeting for consideration:
(1) The total assets involved in the transaction (whichever is higher if there are both
book value and appraised value) account for more than 50% of the Company’s latest
total assets;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-7 –


--- page 532 ---
(2) The transaction amount accounts for more than 50% of the market value of the
Company;
(3) The net assets of the transaction subject (such as equity) in the latest fiscal year
account for more than 50% of the market value of the Company;
(4) The relevant operating income of the transaction subject (such as equity) in the most
recent fiscal year accounts for more than 50% of the operating income of the
Company in the most recent fiscal year, and exceeds RMB50 million;
(5) The profits generated from the transactions account for more than 50% of the net
profits of the Company in the latest fiscal year, and exceed RMB7.5 million;
(6) The net profit of the transaction subject (such as equity) in the latest fiscal year
accounts for more than 50% of the net profit of the company in the latest fiscal year,
and exceeds RMB7.5 million.
The aforementioned “transactions” include the following matters:
(1) Purchase or sale of assets;
(2) External investment (including entrusted wealth management, investment in
subsidiaries, etc.);
(3) Provision of guarantee;
(4) Provision of financial assistance;
(5) Leased-in or leased-out assets;
(6) Entering into contracts on management (including entrusted operation and entrusted
operation, etc.);
(7) Donate or receive assets;
(8) Restructuring of claims or debts;
(9) Transfer of research and development projects;
(10) Entering into authorization agreement;
(11) Waiver of rights;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-8 –


--- page 533 ---
(12) Other transactions as determined by the China Securities Regulatory Commission,
the National Equities Exchange and Quotations, the Hong Kong Listing Rules, and
other securities regulatory rules of the places where the Company’s shares are listed.
The above purchases or sales of assets exclude transactions relating to daily operations
such as purchases of raw materials, fuel and power and sales of products or commodities.
Extraordinary general meetings are convened from time to time. Under any of the
following circumstances, the Company shall convene an extraordinary general meeting within
2 months from the date of occurrence:
(1) The number of directors is less than the statutory minimum number prescribed by
the Company Law or less than two-thirds of the number prescribed in the Articles
of Association;
(2) The Company’s unrecovered losses reach one-third of its total share capital;
(3) When a shareholder who individually or collectively holds more than 10% of the
Company’s voting rights (excluding voting proxy rights) (excluding treasury shares)
requests it;
(4) when the Board of Directors deems it necessary;
(5) Any other circumstance stipulated by laws, administrative regulations, departmental
regulations, the Hong Kong Listing Rules or other securities regulatory rules of the
places where the Company’s shares are listed or the Articles of Association.
The number of outstanding shares mentioned in item 3 above shall be based on the
number of shares held by the shareholder on the date when the shareholder makes a written
request.
Convening the General Meetings
Independent directors (mean “independent non-executive directors”, the same below)
have the right to propose to the Board of Directors to convene an extraordinary general
meeting. With the consent of more than half of all independent directors, independent directors
have the right to propose to the Board of Directors to convene an extraordinary general
meeting. Regarding the proposal of independent directors for convening an extraordinary
general meeting, the Board of Directors shall, in accordance with laws, administrative
regulations, the Hong Kong Listing Rules and the Articles of Association, give a written
response within 10 days upon receipt of the proposal on whether it agrees or disagrees to
convene the extraordinary general meeting. If the Board of Directors agrees to convene an
extraordinary general meeting, a notice of convening such general meeting will be given within
5 days after the resolution of the Board of Directors is passed; if the Board of Directors does
not agree to convene an extraordinary general meeting, it will explain the reasons and make an
announcement.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-9 –


--- page 534 ---
The Audit Committee has the right to propose to the Board of Directors to convene an
extraordinary general meeting, and such proposal shall be made in writing to the Board of
Directors. The Board of Directors shall, in accordance with laws, administrative regulations
and the Articles of Association, give a written response on whether it agrees or disagrees to
convene the extraordinary general meeting within 10 days after receipt of the proposal.
If the Board of Directors agrees to convene an extraordinary general meeting, a notice of
convening such general meeting will be issued within 5 days after a resolution is passed by the
Board of Directors. Any changes made to the original proposals contained in the notice shall
be approved by the Audit Committee.
If the Board of Directors does not agree to convene such extraordinary general meeting,
or fails to provide a response within 10 days after receipt of the proposal, the Board of
Directors shall be deemed to be unable or failing to perform its duties of convening a general
meeting of shareholders, and the Audit Committee may convene and preside over the meeting
on its own.
Shareholders individually or in aggregate holding more than 10% of the shares (excluding
treasury shares) of the Company have the right to make a request to the Board of Directors to
convene an extraordinary general meeting, and such proposal shall be made in writing to the
Board of Directors. The Board of Directors shall, in accordance with the requirements of laws,
administrative regulations and the Articles of Association, give a written response within 10
days after receipt of the request on whether it agrees or disagrees to convene the extraordinary
general meeting.
If the Board of Directors agrees to convene an extraordinary general meeting, it shall
issue a notice of such general meeting within 5 days after a resolution is passed by the Board
of Directors. Any change to the original proposal contained in the notice shall be subject to the
consent of the relevant shareholders.
If the Board of Directors does not agree to convene an extraordinary general meeting or
fails to make a response within 10 days upon receipt of the request, the shareholders
individually or in aggregate holding more than 10% of the shares have the right to propose to
the Audit Committee to convene an extraordinary general meeting, and such request shall be
made in writing to the Audit Committee.
If the Audit Committee agrees to convene an extraordinary general meeting, it shall issue
a notice of convening the general meeting within 5 days after receiving the request. Any
changes to the original proposal contained in the notice shall be subject to approval by the
relevant shareholders.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-10 –


--- page 535 ---
If the Audit Committee fails to issue a notice of general meeting within the prescribed
time limit, the Audit Committee shall be deemed not to convene and preside over the general
meeting, and shareholders who individually or in aggregate hold more than 10% of the shares
(excluding treasury shares) of the Company for more than 90 consecutive days may convene
and preside over the meeting by themselves.
Where the shareholders individually or in aggregate holding more than 10% of the shares
(excluding treasury shares) of the Company request to convene an extraordinary general
meeting and the Board of Directors shall, within 10 days from the date of receipt of the request,
make a decision on whether to convene an extraordinary general meeting and provide a written
reply to the shareholders.
For the general meeting convened by Audit Committee the shareholders themselves, the
Board of Directors and the Secretary to the Board of Directors shall cooperate and perform the
obligation of information disclosure in a timely manner. The Board of Directors shall provide
the Company’s register of members as of the record date.
For a general meeting convened by Audit Committee the shareholders themselves, the
Company shall bear the expenses required for the meeting.
Proposals and Notices of General Meetings
When convening a general meeting of the Company, the Board of Directors and the
shareholders individually or in aggregate holding 1% or more of the shares of the Company
shall have the right to put forward proposals to the Company.
Shareholders individually or in aggregate holding 1% or more of the shares of the
Company may put forward ad hoc proposal and submit it in writing to the convener 10 days
before the general meeting. The convener shall, within 2 days after receiving the proposal,
issue a supplementary notice of general meeting to notify the content of the ad hoc proposal
and submit such ad hoc proposal to the general meeting for consideration; except for any ad
hoc proposal that violates the laws, administrative regulations, the Hong Kong Listing Rules,
or requirements of other securities regulatory rules of the places where the shares of the
Company are listed or the Articles of Association, or is not within the scope of the authority
of the general meeting.
Except for the circumstances prescribed in the preceding paragraph, after the convener
has issued the notice of the general meeting, no modification or addition may be made to the
proposals contained in the notice of general meeting.
No voting or resolution may be made by the general meeting on proposals that are not
specified in the notice of general meeting or not in compliance with the requirements of laws
and regulations, the Hong Kong Listing Rules, other securities regulatory rules of the places
where the Company’s shares are listed, and the Articles of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 536 ---
The convener shall issue a notice to all shareholders 21 days before an annual general
meeting, or 15 days before an extraordinary general meeting.
When the Company calculates the periods of “21 days” and “15 days” as mentioned in the
preceding paragraph, the date on which the meeting is convened will be excluded, but the date
on which the notice is issued will be included. With the consent of more than two-thirds of the
voting rights held by the shareholders (including proxies) attending the extraordinary general
meeting of the Company, the advance notice period of meeting may be waived, and it shall be
recorded in the minutes of the meeting such that resolutions passed in that general meeting are
legal and valid.
Holding the General Meetings
All Shareholders whose names appear on the register of members on the record date or
their proxies shall have the right to attend a general meetings and exercise their voting rights
in accordance with relevant laws and regulations, the Hong Kong Listing Rules, other
securities regulatory rules of the places where the Company’s shares are listed and the Articles
of Association. Regardless of the mode of attendance, a shareholder shall have the right to
speak and vote at the general meeting, unless the respective shareholder is required by the
Hong Kong Listing Rules to abstain from voting in any particular matter.
Shareholders may attend and vote in person or by proxy at a general meeting.
If an individual shareholder attends the general meeting in person, he/she shall produce
his/her identity card or other valid documents or certificates that can identify him/herself; if a
proxy is appointed to attend the meeting on behalf of a shareholder, the proxy shall produce
his/her own valid identity document and the instrument of proxy authorized by the relevant
shareholder.
For corporate shareholders, their legal representative or a proxy appointed by the legal
representative shall attend the general meeting. If the legal representative of the corporate
shareholder attends the general meeting, he/she shall produce his/her identity card or a valid
certificate proving his/her qualification as a legal representative; if a proxy attends the general
meeting, the proxy shall produce his/her identity card and a written instrument of proxy
authorized and issued by the legal representative of the corporate shareholder.
For any shareholder who is a recognized clearing house (or its nominee) as defined in the
relevant regulations enacted in Hong Kong from time to time, such shareholder may authorize
one or more persons as it thinks fit to act as its proxy at any general meeting; however if more
than one person is authorized, such power of attorney shall specify the number and class of
shares represented by each of these proxies as authorized and shall be signed by authorized
persons of the recognized clearing house. A person so authorized may attend general meetings
(without the need to produce shareholding credentials, notarized authorization and/or further
evidence to prove that he/she is duly authorized) on behalf of the recognized clearing house (or
its nominee) and exercises its rights (including the rights to speak and vote) as if the person
is an individual shareholder of the Company.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-12 –


--- page 537 ---
Voting and Resolutions of General Meetings
Resolutions of a general meeting are classified into ordinary resolutions and special
resolutions.
The following matters shall be passed by ordinary resolutions of the general meeting:
(1) the work reports of the Board of Directors;
(2) the profit distribution plan and the loss make-up plan proposed by the Board of
Directors;
(3) the appointment and dismissal of directors and their remuneration and payment
methods;
(4) the appointment or removal of the accounting firms or make resolutions on the
remuneration arrangement of the accounting firms;
(5) the annual report of the Company;
(6) Other matters other than those required to be passed by special resolutions as
prescribed by laws and regulations, administrative regulations, the Hong Kong
Listing Rules and other securities regulatory rules of the places where the shares of
the Company are listed or the Articles of Association.
The following matters shall be approved by special resolutions of the general meeting:
(1) to increase or decrease the registered capital of the Company;
(2) the division, merger, dissolution, change of corporate form and liquidation of the
Company;
(3) the amendment to the Articles of Association;
(4) guarantee matters as stipulated in Article 48;
(5) the Company sells, purchases or replaces major assets within one year or the amount
of guarantee exceeds 30% of the Company’s total assets for the latest period;
(6) equity incentive plan;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 538 ---
(7) matters as required by laws, administrative regulations, the Hong Kong Listing
Rules and other securities regulatory rules of the places where the Company’s shares
are listed or these Articles of Association, as well as other matters that may have a
significant impact on the Company as determined by an ordinary resolution at the
general meeting and need to be passed by special resolutions.
Shareholders (including proxies) may exercise their voting rights according to the amount
of voting shares they represent. Except where cumulative voting is adopted, each share shall
have one vote.
Shares of the Company held by the Company have no voting rights, and such shares are
not included in the total number of shares with voting rights present at the general meeting.
If a shareholder is related and/or connected with the matters considered at the general
meeting, he/she shall voluntarily declare the related/connected relationship at the general
meeting and abstain from voting, and the voting shares held by such shareholder shall not be
counted into the total number of shares with voting rights at the general meeting. If a
shareholder fails to voluntarily declare the related/connected relationship and recuses from
participation, other shareholders may require him to explain the situation and recuse from
participation. The Board of Directors shall, before issuing the notice of general meeting,
examine whether such shareholder is a related/connected shareholder and whether such
shareholder should be recused in accordance with laws, regulations, the requirements of
National Equities Exchange and Quotations Co., Ltd. and the Hong Kong Stock Exchange and
disclose the details of the related/connected parties involved in the proposal to be considered
in the notice of general meeting.
When matters on related/connected transactions are considered at the general meeting, the
related/connected shareholders shall attend the meeting. Related/connected shareholders shall
not participate in voting, and the number of voting shares held by them shall not be included
in the total number of valid votes; the resolutions of the general meeting shall fully disclose
the voting results of non-related/non-connected shareholders. The related/connected
shareholders who should recuse may participate in the discussion on the related/connected
transactions involving them, and may provide explanation and clarification to the general
meeting on the reasons for the occurrence of such related/connected transactions, basic
information of the transactions, and whether the transactions are fair and legal.
If all shareholders of the Company are related to/connected with the matters to be
considered, they will not recuse and the general meeting will proceed as usual, provided that
the matters considered and discussed shall be resolved and approved by the voting rights held
by all shareholders.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-14 –


--- page 539 ---
DIRECTORS
A director of the Company is a natural person and may not act as a director of the
Company under any of the following circumstances:
(1) if he/she is incapable or has limited capacity to perform civil conducts;
(2) if he/she is convicted of a criminal offence and imprisoned due to corruption,
bribery, embezzlement, misappropriation of property or disrupting the socialist
market economy order, or is deprived of political rights for criminal offence, less
than 5 years have elapsed after expiration of the sentence, or if suspended sentence
is pronounced, less than 2 years have elapsed from the date of expiration of the
probationary period;
(3) if he/she was a director of a company or an enterprise or a manager of a factory that
declared bankrupt and liquidated, and he/she was personally liable for the
bankruptcy of such company or enterprise, less than three years have elapsed since
the completion of the bankruptcy and liquidation of such company or enterprise;
(4) if he/she was the legal representative of a company or enterprise whose business
license was revoked or which was ordered to close down due to violation of the
laws, and he/she was personally liable, less than 3 years have elapsed since the date
of revocation of the business license or the date of closure order of such company
or enterprise;
(5) if he/she is listed as dishonest person subject to execution by the People’s Court for
a relatively large amount of personal debts that are due and remain outstanding;
(6) if he/she is banned from entering the securities market by the CSRC or is recognized
as an improper person, and the prohibition period has not yet expired;
(7) if he/she has been subject to a disciplinary action as determined by a NEEQ
company or stock exchange that he or she is unsuitable to serve as a director,
supervisor or senior management officer of a company, and the sanction period has
not yet expired;
(8) Under other circumstances as stipulated by the CSRC, the NEEQ company, laws,
administrative regulations, departmental rules, the Hong Kong Listing Rules or the
securities regulatory rules of the places where the Company’s shares are listed.
Any election or appointment of directors in violation of the provisions of this Article shall
be invalid.
If a director falls under any of the circumstances described in this Article during his or
her term of office, the general meeting shall remove him/her from office.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 540 ---
Directors shall abide by laws, administrative regulations, the Hong Kong Listing Rules,
other securities regulatory rules of the places where the Company’s shares are listed and the
Articles of Association and have a duty of loyalty to the Company. Directors shall take
measures to avoid conflict between their own interests and those of the Company and shall not
use their positions and powers to benefit from improper gains. Directors owe the following
fiduciary duties to the Company:
(1) Not to accept bribery or other illegal income, or misappropriate property of the
Company, by taking advantage of his/her position and power;
(2) Not to misappropriate funds of the Company;
(3) Not to allow Company’s assets or funds to be deposited in accounts opened in
his/her own name or in the names of other individuals;
(4) Not to violate the provisions of the Articles of Association by lending the
Company’s funds to others or using the Company’s property to provide security for
others without consent of the general meeting or the Board of Directors;
(5) Not to enter into contracts or conduct transactions with the Company in violation of
the provisions of the Articles of Association or without consent of the general
meeting;
(6) Without consent of the general meeting, not to take advantage of his/her position to
seek for himself/herself or others any business opportunities that should belong to
the Company, except under circumstances where the matter has been reported to the
Board of Directors or the general meeting and has been resolved and approved by
the general meeting, or the Company is forbidden to make use of such business
opportunities pursuant to the laws, administrative regulations or the Articles of
Association;
(7) Not to operate the same kind of business as the Company for himself/herself or
others without consent of the general meeting in violation of the provisions of the
Articles of Association;
(8) Not to accept the commission of transactions with the Company as its own;
(9) Not to disclose the Company’s secrets without authorization;
(10) Not to take advantage of his/her related and/or connected relationship to harm the
interests of the Company;
(11) Other obligations of fiduciary duties as required by laws, administrative regulations,
departmental rules, the Hong Kong Listing Rules, other securities regulatory rules
of the places where the Company’s shares are listed and the Articles of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-16 –


--- page 541 ---
A director and an associate of a director (as defined under the Hong Kong Listing Rules)
entering into a contract or a transaction with the Company shall be conducted in accordance
with the connected transaction requirements under the Hong Kong Listing Rules.
Any income derived by a director in violation of the provisions of this Article shall belong
to the Company. If a director violates any laws, administrative regulations or the Articles of
Association in the performance of his duties and causes losses to the Company, he/she shall be
liable for compensation.
When close family members of the directors and senior management officers, the
enterprises controlled directly or indirectly by the directors, senior management officers or
their close family members, and associates with other related and/or connected relationship
with the directors and senior management officers, enter into contracts or transactions with the
Company, the provisions of item (5) in the first paragraph of this Article are application.
Directors shall abide by laws, administrative regulations, the Hong Kong Listing Rules,
other securities regulatory rules of the places where the Company’s shares are listed and these
Articles of Association, owe a duty of diligence to the Company, shall perform duties in the
best interest of the Company with reasonable attention and care as normally expected from
managing personnel. Directors owe the following duty of diligence to the Company:
(1) to exercise the rights conferred by the Company prudently, conscientiously and
diligently and ensure that the Company’s business conducts comply with the
requirements of national laws, administrative regulations and various national
economic policies, and the business activities do not exceed the business scope as
stipulated in the business license;
(2) to treat all shareholders fairly;
(3) to keep informed of the business operation and management of the Company in a
timely manner;
(4) to sign written confirmation of the periodic reports of the Company and ensure the
truthfulness, accuracy and completeness of the information disclosed by the
Company;
(5) Other duties of diligence as required by laws, administrative regulations,
departmental regulations, the Hong Kong Listing Rules, other securities regulatory
rules of the places where the Company’s shares are listed and these Articles of
Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-17 –


--- page 542 ---
Board of Directors
The Board of Directors consists of 5-9 directors, who are elected by the general meeting
of the Company. The Company shall have a chairman of the Board.
The Board of Directors shall exercise the following functions and powers:
(1) To convene general meetings and reporting its work to the general meeting;
(2) To implement resolutions of the general meetings;
(3) To decide on the business plans and investment proposals of the Company;
(4) To formulate the profit distribution plans and loss make-up plans of the Company;
(5) To prepare periodic reports or summaries of such periodic reports of the Company;
(6) To formulate plans on the increase or decrease of registered capital, repurchase of
the Company’s shares, issuance of bonds, convertible bonds or other securities, and
equity incentive plans;
(7) To formulate plans for material acquisitions, purchase of the Company’s shares,
merger, division, dissolution and change of corporate form;
(8) To make decisions on the Company’s external investments, acquisition and disposal
of assets, asset mortgages, external guarantees, entrusted financial management,
related and/or connected transactions, external donations, etc. within the scope
authorized by the general meeting;
(9) To decide on the establishment of the internal management institutions of the
Company;
(10) To decide on the appointment or dismissal of the Company’s general manager,
deputy general manager and the secretary to the Board of Directors; to appoint or
remove the senior management personnel such as the chief financial officer and the
secretary to the Board of Directors of the Company according to the nominations of
the general manager, and to decide on their remuneration, rewards and punishments;
(11) To formulate the basic management system of the Company;
(12) To formulate the proposal for amendment to the Articles of Association;
(13) To manage information disclosure by the Company;
(14) To propose to the general meeting the appointment or dismissal of the accounting
firm to be the auditor of the Company;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-18 –


--- page 543 ---
(15) To hear work report of the general manager of the Company and inspect the work
of the general manager;
(16) To discuss and evaluate whether the corporate governance mechanism provides all
shareholders with appropriate protection and equal rights, and whether the corporate
governance structure is reasonable and effective;
(17) To perform other functions and powers conferred by laws, administrative
regulations, departmental rules, the Hong Kong Listing Rules, other securities
regulatory rules of the places where the shares of the Company are listed or the
Articles of Association.
Any matters in respect of which the powers exercised by the Board of Directors are
beyond the scope authorized by the general meeting shall be submitted to the general meeting
for consideration.
The Board of Directors of the Company shall establish the Audit Committee, the
Nomination Committee and the Remuneration and Appraisal Committee. These special
committees shall be accountable to the Board of Directors and perform their duties in
accordance with the Articles of Association and the authorization of the Board of Directors.
Proposals shall be submitted to the Board of Directors for consideration and decision. The
Board of Directors is responsible for formulating the working procedures of the special
committees and standardizing the operation of the special committees.
Transactions (other than provision of guarantees) of the Company that meet any of the
following criteria shall be submitted to the Board of Directors for consideration:
(1) The total amount of assets involved in transactions (if both book value and appraised
value are available, whichever is higher) accounts for more than 10% of the total
assets of the Company for the latest period;
(2) The trading amount of transaction accounts for more than 10% of the market
capitalization of the Company;
(3) The net asset value of the subject matter of transaction (such as equity) for the latest
accounting year accounts for more than 10% of the market capitalization of the
Company;
(4) The relevant operating income of the subject matter of transaction (such as equity)
for the latest accounting year accounts for more than 10% of the operating income
of the Company for the latest accounting year, and exceeds RMB10 million;
(5) The profit generated from transaction accounts for more than 10% of the net profit
of the Company for the latest accounting year, and exceeds RMB1.5 million;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-19 –


--- page 544 ---
(6) The relevant net profit of the subject matter (such as equity) of transaction for the
latest accounting year accounts for more than 10% of the net profit of the Company
for the latest accounting year, and exceeds RMB1.5 million.
The Chairman of the Board of Directors shall exercise the following powers:
(1) To preside over the general meetings and to convene and preside over meetings of
the Board of Directors;
(2) To supervise and inspect the implementation of the resolutions of the Board of
Directors;
(3) To sign important documents of the Board of Directors;
(4) To perform other functions and powers as delegated by the Board of Directors;
(5) To exercise the functions and powers of legal representative;
(6) In the event of emergency conditions under force majeure such as extraordinary
natural disasters, exercise the special right to dispose of the Company’s affairs in
compliance with legal requirements and in the interest of the Company, and report
to the Board of Directors and the general meeting of the Company afterwards;
(7) To perform other functions and powers as delegated by the Articles of Association
and the Board of Directors.
Significant matters shall be collectively decided by the Board of Directors, the Board of
Directors shall not delegate statutory functions and powers to individual Directors or other
persons to be exercised by them.
The Board of Directors shall hold at least four meetings per year, approximately one
meeting per quarter, and shall be convened by the Chairman of the Board. All Directors and
the General Manager shall be served with a notice in writing 14 days before the meeting.
Shareholders representing more than one-tenth of the voting rights, more than one-third
of the members of the Board of Directors may propose to convene an extraordinary meeting
of the Board of Directors. The Chairman of the Board of Directors shall convene and preside
over the meeting of the Board of Directors within 10 days after receiving the proposal.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-20 –


--- page 545 ---
Meetings of the Board of Directors should be held only with the presence of more than
one-half of the Directors. Unless otherwise provided by laws, administrative regulations,
departmental rules, the Hong Kong Listing Rules and other securities regulatory rules of the
places where the Company’s shares are listed and the Articles of Association, resolutions of the
Board of Directors must be passed by more than one-half of all the directors. Where there are
special provisions in laws or administrative regulations, such special provisions shall prevail.
V oting on resolutions in the Board of Directors shall be conducted by one person, one
vote.
Special Committee of the Board of Directors
The Company’s Board of Directors establishes the Audit Committee to exercise the
functions and powers of the Board of Supervisors as stipulated in the Company Law. The Audit
Committee is accountable to the Board of Directors and performs its duties in accordance with
this Articles of Association and the authorization of the Board of Directors. Proposals of the
Audit Committee shall be submitted to the Board of Directors for review and decision. The
Board of Directors is responsible for formulating working procedures for special committees
to standardize their operations.
The Audit Committee shall consist of three members, all of whom shall be directors not
serving as senior management of the Company. Among them, there shall be three independent
directors, and the convener shall be an accounting professional from among the independent
directors.
The Audit Committee shall hold meetings at least once each quarter. Interim meetings
may be convened upon the proposal of two or more members or when the convener deems it
necessary. A meeting of the audit committee shall be held only if at least two-thirds of its
members are present.
Resolutions of the Audit Committee shall be adopted by an affirmative vote of more than
half of its members.
Each member of the Audit Committee shall have one vote in voting on resolutions.
Resolutions of the Audit Committee shall be recorded in meeting minutes as required, and the
members of the Audit Committee present at the meeting shall sign the minutes.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-21 –


--- page 546 ---
GENERAL MANAGER AND OTHER SENIOR MANAGEMENT OFFICERS
The Company has one general manager, to be appointed or dismissed by the Board of
Directors.
The Company shall have a chief financial officer, deputy general manager and secretary
to the Board of Directors. The chief financial officer and deputy general manager shall be
nominated by the general manager and to be appointed or dismissed by the Board of Directors;
the secretary to the Board shall be nominated by the Chairman of the Board and to be appointed
or dismissed by the Board of Directors.
The qualifications of candidates for senior management officers shall comply with laws
and regulations, department rules, business rules and the Articles of Association of the
Company. As senior management personnel, the person in charge of finance shall, in addition
to the qualifications prescribed in the Articles of Association, hold the professional and
technical qualifications for accountants or above, or have the professional knowledge
background in accounting and have been engaged in accounting for more than three years.
Each term of office for the general manager is 3 years, and the general manager may be
reappointed for consecutive appointments.
The general manager shall be accountable to the Board of Directors and exercises the
following functions and powers:
(1) To be in charge of the production, operation and management of the Company, to
organize the implementation of the resolutions of the Board of Directors, and to
report to the Board of Directors;
(2) To organize the implementation of the annual business plan and investment plan of
the Company;
(3) To formulate the plan for the establishment of the internal management structure of
the Company;
(4) To formulate the basic management system of the Company;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-22 –


--- page 547 ---
(5) To formulate the specific rules of the Company;
(6) To make proposal to the Board of Directors on the appointment or dismissal of other
senior management officers of the Company;
(7) To decide on the appointment or dismissal of management personnel other than
those whose appointment or dismissal shall be decided by the Board of Directors;
(8) To submit the annual business report of the previous year to the Board of Directors
within three months after the end of each accounting year, and to submit the annual
business plan of the following year to the Board of Directors within three months
before the end of each accounting year and at least one month before the end of each
accounting year;
(9) Other functions and powers as conferred by the Articles of Association or the Board
of Directors.
The general manager shall attend meetings of the Board of Directors as non-voting
attendees.
The Company has a secretary to the Board of Directors, who is responsible for the
preparation of general meetings and meetings of the Board of Directors, keeping documents in
safe custody, managing information of shareholders of the Company and handling information
disclosure affairs.
The secretary to the Board of Directors shall comply with the relevant requirements of the
laws, administrative regulations, departmental rules, the Hong Kong Listing Rules, other
securities regulatory rules of the places where the Company’s shares are listed and the Articles
of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-23 –


--- page 548 ---
FINANCIAL ACCOUNTING SYSTEM, PROFIT DISTRIBUTION AND AUDITING
The Company shall prepare a financial accounting report after the end of each accounting
year. The Company shall prepare its annual financial accounting report within 4 months after
the end of each accounting year and prepare an interim financial accounting report within 2
months after the end of the first 6 months of each accounting year.
The above financial accounting reports shall be prepared in accordance with the relevant
laws, administrative regulations, departmental regulations, the Hong Kong Listing Rules and
the securities regulatory rules of the places where the shares of the Company are listed.
When distributing the after-tax profit of current year, the Company shall appropriate 10%
of the profit for transfer to the statutory reserve of the Company. If the accumulated amount
of the Company’s statutory reserve is more than 50% of the Company’s registered capital,
further appropriation is not necessary.
If the statutory reserve of the Company is insufficient to cover for the losses of the
previous years, the profit for the current year shall be used to cover the losses before making
appropriation to the statutory reserve in accordance with the preceding paragraph.
After making appropriation from the after-tax profit to the statutory reserve, the Company
may also make further appropriation to the discretionary reserve from the after-tax profit upon
approval by a resolution passed at the general meeting.
The remaining after-tax profit of the Company after making up losses and making
appropriations to reserves shall be distributed in accordance with the proportion of shares held
by shareholders.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-24 –


--- page 549 ---
If the general meeting violates the provisions of the preceding paragraph by distributing
profits to shareholders before the Company makes up losses and makes appropriation to the
statutory reserve, the shareholders must return the profit distributed in violation of the
provisions to the Company; if any losses are caused to the Company, the shareholders and the
responsible Directors and senior management personnel shall be liable for compensation.
Shares of the Company held by the Company do not participate in the distribution of
profit.
The reserves of the Company are used to cover the losses of the Company, expand the
production and operation of the Company or increase the capital of the Company. In making
up losses incurred by the Company with the reserves, discretionary reserve and statutory
reserve shall be used first; if the losses cannot be offset, the capital reserve may be used in
accordance with the relevant provisions.
When the statutory reserve is converted into capital, the balance of such reserve shall not
be less than 25% of the registered capital of the Company before the capitalization.
The profit distribution policy of the Company is as follows:
(1) Principles of profit distribution: The Company shall pay attention to the reasonable
investment returns for investors as well as the sustainable development of the
Company in profit distribution. The Board of Directors and the general meeting of
the Company shall give full consideration to the opinions of Directors and public
investors in the decision-making and discussion process of the profit distribution
policy.
(2) Form of profit distribution: The Company may distribute profits in cash, shares or
a combination of cash and shares or in other forms permitted by laws and
regulations.
(3) Interim dividends may be distributed to the extent permitted by the Company’s size
of profit for the current period, cash flow position and capital demand.
(4) Conditions and proportion of cash dividend distribution by the Company: The
Company may distribute dividends in cash when the Company’s profit for the
current year and the accumulated undistributed profit are positive, and there is no
significant investment plan or material cash expenditure event that affects the profit
distribution. Whether the Company will distribute profits in cash and the proportion
of such profit distribution to the distributable profits of the parent company in the
audited financial statements shall be considered and approved by the general
meeting of the Company.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-25 –


--- page 550 ---
(5) Conditions for distribution of share dividends: When the Company is in good
operating condition and the Board of Directors considers that the distribution of
share dividends is beneficial to the interest of all the shareholders of the Company
as a whole, it may propose a distribution plan of share dividends and submit to the
general meeting for consideration and approval.
(6) Principles of use of undistributed profits: The Board of Directors shall explain the
plan for the use of retained undistributed profits in the profit distribution plan
submitted to the general meeting. The undistributed profits, in principle, may be
converted into capital or distributed as dividends according to the resolutions of the
general meeting. The undistributed profits retained by the Company are mainly used
for significant investments such as external investment, acquisition of assets,
purchase of equipment and investment in research and development, as well as
liquidity for daily operations.
The Company may formulate an internal audit system in a timely manner and appoint
full-time auditors to conduct internal audit and supervision over the Company’s financial
income and expenditures and economic activities.
The internal audit system of the Company and the responsibilities of its auditors shall be
implemented after being approved by the Board. The person in charge of auditing shall be
accountable to and report to the Board of Directors.
The Company engages accounting firms that are qualified to engage in securities-related
business in compliance with the Securities Law, the Hong Kong Listing Rules and other
securities regulatory rules of the places where the Company’s shares are listed to conduct,
among other things, auditing of accounting statements, verification of net assets and other
related consulting services. The appointment period is 1 year and renewable.
The appointment and dismissal of an accounting firm by the Company shall be considered
by the Board of Directors and then at the general meeting. The Board of Directors shall not
appoint or dismiss the accounting firm before a decision is made at the general meeting.
NOTICES AND ANNOUNCEMENTS
Notices of the Company shall be issued in the following forms:
(1) Delivery by hand;
(2) By way of a letter (including email) or fax;
(3) Notification by telephone;
(4) Notification by text message;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-26 –


--- page 551 ---
(5) By way of announcement;
(6) Other forms as provided in the Articles of Association.
(7) Other forms as stipulated in laws, administrative regulations or other normative
documents, approval by the securities regulatory authority of the place where the
Company’s shares are listed, or other forms as stipulated in the Articles of
Association.
With respect to the manner in which the Company provides or sends corporate
communications to the H Shareholders in accordance with the requirements of the Hong Kong
Listing Rules, provided in compliance with laws, administrative regulations, departmental
rules and the securities regulatory rules of the places where the Company’s shares are listed and
the Articles of Association, the corporate communications may be provided or sent to the H
Shareholders through the website designated by the Company and/or the website of the Hong
Kong Stock Exchange or through electronic means.
The term “corporate communications” mentioned in the preceding paragraph refers to any
document issued or to be issued by the Company to any H Shareholders of the Company or any
other person required by the Hong Kong Listing Rules for information or for action.
When a notice is given in the form of an announcement by exercising the powers/rights
as set out in the Articles of Association, such announcement shall be published in accordance
with the methods stipulated in the Hong Kong Listing Rules.
If the listing rules of the stock exchange in the place where the shares of the Company
are listed require the Company to send, post, distribute, issue, publish or otherwise provide the
relevant documents of the Company in both English and Chinese versions, and if the Company
has made appropriate arrangements to determine whether its shareholders wish to receive the
English version or the Chinese version only, and to the extent permitted by applicable laws and
regulations and subject to applicable laws and regulations, the Company may (according to the
preference specified by the shareholders) send the English version or the Chinese version only
to the relevant shareholders.
MERGER, DIVISION, CAPITAL INCREASE, CAPITAL REDUCTION, DISSOLUTION
AND LIQUIDATION
Merger, Division, Capital Increase and Capital Reduction
The merger of companies may be through merger by absorption or merger by new
establishment.
A company absorbs another company in a merger by absorption, and the absorbed
company is dissolved. Where two or more companies merge to establish a new company, it is
a merger by new establishment, and both merging parties will be dissolved.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-27 –


--- page 552 ---
In the event of a company merger, the merging parties shall enter into a merger agreement
and prepare a balance sheet and a list of assets. The company shall notify its creditors within
10 days, and make an announcement in a newspaper or on the national enterprise credit
information publicity system within 30 days, from the date when the resolution on the decision
of merger is passed. The creditors may, within 30 days from the date of receipt of the notice,
or within 45 days from the date of the announcement if the creditor fails to receive the notice,
require the company to settle the debts or provide corresponding guarantee.
In the event of a merger of companies, the claims and debts of the merging parties shall
be inherited by the surviving company or the newly established company after the merger.
In the event of a company division, its assets shall be divided accordingly.
In the event of a company division, a balance sheet and a list of assets shall be prepared.
The company shall notify creditors within 10 days, and make an announcement in a newspaper
or on the national enterprise credit information publicity system within 30 days, from the date
when the resolution on the division is passed.
Dissolution and Liquidation
The Company shall be dissolved for the following reasons:
(1) The operation period stipulated in the Articles of Association expires or other causes
for dissolution stipulated in the Articles of Association have arisen;
(2) The resolution on a dissolution is passed by the general meeting;
(3) Dissolution is necessary due to a company merger or division;
(4) Revocation of business license, order on the closure of business or deregistration of
the business in accordance with the law;
(5) Where the Company encounters serious difficulties in its operation and
management, and its continued existence will cause significant losses to the interests
of shareholders and the situation cannot be resolved through other means, the
shareholders who are holding more than 10% of the voting rights of all the
shareholders of the Company may petition to the People’s Court for a ruling to
dissolve the Company.
If the reasons for dissolution prescribed in the preceding paragraph have arisen, the
Company shall publicize the reason for dissolution through the national enterprise credit
information publicity system within 10 days.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-28 –


--- page 553 ---
If the Company is dissolved pursuant to the provisions of items (1), (2), (4) and (5) of the
preceding Article, it shall be liquidated. The Directors shall be the obligors of liquidation of
the Company and shall, within 15 days from the occurrence of the cause of dissolution, set up
a liquidation group to carry out liquidation. The liquidation group shall consist of Directors,
unless it is otherwise provided in the Articles of Association or any other person is elected by
a resolution of the general meeting. If the liquidation obligor fails to perform its liquidation
obligations in a timely manner and causes losses to the Company or its creditors, the obligor
shall be liable for compensation. If a liquidation group is not established to carry out
liquidation within the time limit, or the liquidation group is established but does not carry out
liquidation, the interested parties may apply to the People’s Court for a ruling to designate
relevant personnel to form a liquidation group to implement liquidation.
The liquidation group shall exercise the following functions and powers during the
liquidation period:
(1) To liquidate the properties of the Company, and to prepare a balance sheet and a list
of assets respectively;
(2) To issue notice and public announcement to the creditors;
(3) To handling the outstanding business of the Company relating to the liquidation;
(4) To pay off the taxes in arrears and taxes arising in the course of liquidation;
(5) To liquidate claims and debts;
(6) To dispose of the remaining assets of the Company after the debts are settled;
(7) To participate in civil litigation actions on behalf of the Company.
The liquidation group shall notify creditors within 10 days, and make an announcement
in a newspaper or on the national enterprise credit information publicity system within 60 days,
from the date of its establishment. The creditors shall declare their claims to the liquidation
group within 30 days after receiving the notice, or within 45 days after the date of
announcement if they fail to receive the notice.
When a creditor declares his claims, he shall explain the relevant matters in relation to
his claims and provide supporting materials.
The liquidation group shall register the claims.
During the period of declaring claims by creditors, the liquidation group shall not make
repayment to creditors.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-29 –


--- page 554 ---
After the liquidation group has liquidated the Company’s properties, has prepared the
balance sheet and the list of assets, it shall formulate a liquidation plan and submit it to the
general meeting or the People’s Court for confirmation.
After paying the liquidation expenses, salaries of employees, social insurance premiums
and statutory compensations, overdue taxes and corporate debt repayment respectively from
the Company’s properties, the remaining assets shall be distributed by the Company in
proportion to the shareholdings held by the shareholders.
During the liquidation period, the Company survives, but it cannot carry out business
activities unrelated to the liquidation. Before settlement of payments in accordance with the
provisions of the preceding paragraph, the assets of the Company will not be distributed to the
shareholders.
After the liquidation group has liquidated the Company’s properties and has prepared the
balance sheet and the list of assets, if the liquidation group finds that the Company’s properties
are not sufficient to pay off the debts, it shall apply to the People’s Court for a bankruptcy
liquidation.
After the People’s Court has accepted the bankruptcy application, the liquidation group
shall transfer the liquidation matters to the bankruptcy administrator designated by the People’s
Court.
After liquidation of the Company, the liquidation group shall prepare a liquidation report,
submit it to the general meeting or the People’s Court for confirmation, and also submit it to
the company registration authority to apply for deregistration of the Company, and make an
announcement on the termination of the Company.
AMENDMENT TO THE ARTICLES OF ASSOCIATION
The Company shall amend its articles of association under any of the following
circumstances:
(1) After amendments have been made to the Company Law or relevant laws,
administrative regulations, Hong Kong Listing Rules and other securities regulatory
rules of the places where the Company’s shares are listed, the provisions stipulated
in the Articles of Association are in conflict with the provisions of the amended laws
or administrative regulations;
(2) The particulars of the Company have changed and are inconsistent with the details
recorded in the Articles of Association;
(3) The general meeting has resolved to amend the Articles of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-30 –


--- page 555 ---
Amendments to the Articles of Association approved by a resolution at the general
meeting shall be subject to the approval of the competent authority and must be submitted to
the competent authority for approval; if the amendments involve registration details of the
Company, a change in registration particulars shall be carried out in accordance with the law.
DISPUTE RESOLUTION
The Company and its shareholders, directors and senior management officers shall abide
by the following dispute resolution rules:
Any disputes arising among the Company, shareholders, directors and senior management
officers that involves the provisions of the Articles of Association shall be resolved through
negotiation first. If negotiation fails, it may be resolved through litigation.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-31 –


--- page 556 ---
A. FURTHER INFORMATION ABOUT OUR COMPANY
1. Incorporation of our Company
Our Company was established in the PRC on January 21, 2010 and was converted into a
joint stock company with limited liability under the Company Law with effect from July 15,
2016. Our Company has established a principal place of business in Hong Kong at 40th Floor,
Dah Sing Financial Centre, No. 248 Queen’s Road East, Wanchai, Hong Kong and with the
Registrar of Companies in Hong Kong as a non-Hong Kong company in Hong Kong under Part
16 of the Companies Ordinance on June 10, 2025. Ms. Wan Wing Yi Carol (֝our
company secretary, has been appointed as the authorized representative of our Company for the
acceptance of service of process and notices on behalf of our Company in Hong Kong.
As our Company was established in the PRC, our corporate structure and Articles of
Association are subject to the relevant laws and regulations of the PRC. A summary of the
relevant provisions of our Articles of Association is set out in “Appendix V — Summary of
Articles of Association” to this prospectus.
2. Changes in the share capital of our Company
As of the date of the establishment of our Company, our registered capital was
RMB1,000,000. On July 15, 2016, our Company was converted into a joint stock company with
limited liability under the PRC Company Law. Upon completion of such conversion, the
registered capital of our Company was RMB28,000,000 divided into 28,000,000 Non-H Shares
with a nominal value of RMB1.00 each.
The following sets out the change in the share capital of our Company within the two
years immediately preceding the date of this prospectus:
Immediately following the completion of the Global Offering (without taking into
account any H Shares which may be issued pursuant to the exercise of the Over-allotment
Option), the registered share capital of our Company will be increased to RMB147,062,243
divided into 110,296,643 Non-H Shares and 36,765,600 H Shares fully paid up or credited as
fully paid up. Save as aforesaid and as mentioned in “— 4. Shareholders’ resolutions of our
Company” below, there has been no alteration in our share capital within the two years
immediately preceding the date of this prospectus.
3. Restriction of share repurchase
For details of the restrictions on the share repurchase by our Company, see “Appendix V
— Summary of Articles of Association” to this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-1 –


--- page 557 ---
4. Shareholders’ resolutions of our Company
Pursuant to the general meeting held on May 16, 2025, the following resolutions, among
others, were duly passed by our Shareholders:
(a) the issue by our Company of H Shares with a nominal value of RMB1.00 each and
such H Shares to be listed on the Stock Exchange;
(b) the number of H Shares to be issued shall be no more than 25% of the total issued
share capital of our Company upon completion of the Global Offering;
(c) subject to the completion of the Global Offering, the conditional adoption of the
Articles of Association, which shall become effective on the Listing Date, and our
Board has been authorized to amend the Articles of Association in accordance with
any comments from the Stock Exchange and the relevant PRC regulatory
authorities; and
(d) authorization of our Board and its authorized persons to handle all relevant matters
relating to, among other things, the Global Offering, the issue of H Shares and the
Listing.
5. Particulars of our subsidiaries
Particulars of our subsidiaries are set forth in note 1 of the Accountants’ Report.
Set out below is certain information of our subsidiaries as of the Latest Practicable Date:
No. Name of subsidiaries
Name of
shareholder(s)
Percentage of
ownership of our
Company
1./H1118/H1118/H1118/H1118/H1118/H1118Jinxun Shanghai Our Company 100%
2./H1118/H1118/H1118/H1118/H1118/H1118Rong Xing Investments Jinxun Shanghai
Our Company
1%
99%
3./H1118/H1118/H1118/H1118/H1118/H1118Jinxun Singapore Our Company 100%
4./H1118/H1118/H1118/H1118/H1118/H1118Tibet Huiyi Our Company 100%
5./H1118/H1118/H1118/H1118/H1118/H1118Jinxun DR Congo Jinxun Shanghai
Jinxun Singapore
1%
99%
6./H1118/H1118/H1118/H1118/H1118/H1118Jinxun Peru Jinxun Singapore
Our Company
99%
1%
7./H1118/H1118/H1118/H1118/H1118/H1118Jinxun Anhui Jinxun Singapore 100%
Save as disclosed in “History and Corporate Structure” in this prospectus, there has been
no other alteration in the registered capital of any of our subsidiaries within the two years
immediately preceding the date of this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-2 –


--- page 558 ---
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of material contracts
The following contract (not being contracts in the ordinary course of business) has been
entered into by members of our Group within the two years preceding the date of this
prospectus and is material:
(a) a cornerstone investment agreement dated December 29, 2025 entered into between
our Company, Glencore International AG and Huatai Financial Holdings (Hong
Kong) Limited, pursuant to which Glencore International AG agreed to subscribe for
such number of Offer Shares (rounded down to the nearest whole board lot) which
may be subscribed for in the aggregate amount of US$30,000,000 (excluding
brokerage and levies) at the Offer Price;
(b) a cornerstone investment agreement dated December 29, 2025 entered into between
our Company, Stoneylake Global Alpha Fund and Huatai Financial Holdings (Hong
Kong) Limited, pursuant to which Stoneylake Global Alpha Fund agreed to
subscribe for such number of Offer Shares (rounded down to the nearest whole board
lot) which may be subscribed for in the aggregate amount of US$10,000,000
(excluding brokerage and levies) at the Offer Price;
(c) a cornerstone investment agreement dated December 29, 2025 entered into between
our Company, NR 1 SP , a segregated portfolio of North Rock SPC and Huatai
Financial Holdings (Hong Kong) Limited, pursuant to which NR 1 SP , a segregated
portfolio of North Rock SPC, agreed to subscribe for such number of Offer Shares
(rounded down to the nearest whole board lot) which may be subscribed for in the
aggregate amount of US$8,000,000 (excluding brokerage and levies) at the Offer
Price;
(d) a cornerstone investment agreement dated December 29, 2025 entered into between
our Company, China Asset Management (Hong Kong) Limited, Huatai Financial
Holdings (Hong Kong) Limited and CLSA Limited, pursuant to which China Asset
Management (Hong Kong) Limited agreed to subscribe for such number of Offer
Shares (rounded down to the nearest whole board lot) which may be subscribed for
in the aggregate amount of US$3,000,000 (excluding brokerage and levies) at the
Offer Price;
(e) a cornerstone investment agreement dated December 29, 2025 entered into between
our Company, New Asia Ferrell Asset Management Limited (༟ପ၍ଣϞ
ʮ̡) and Huatai Financial Holdings (Hong Kong) Limited, pursuant to which
New Asia Ferrell Asset Management Limited agreed to subscribe for such number
of Offer Shares (rounded down to the nearest whole board lot) which may be
subscribed for in the aggregate amount of US$3,000,000 (excluding brokerage and
levies) at the Offer Price;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-3 –


--- page 559 ---
(f) a cornerstone investment agreement dated December 29, 2025 entered into between
our Company, Bridge Zone Group Limited (ʮ̡) and Huatai
Financial Holdings (Hong Kong) Limited, pursuant to which Bridge Zone Group
Limited agreed to subscribe for such number of Offer Shares (rounded down to the
nearest whole board lot) which may be subscribed for in the aggregate amount of
US$3,000,000 (including brokerage and levies) at the Offer Price;
(g) a cornerstone investment agreement dated December 29, 2025 entered into between
our Company, Zhengxin Group Investment Limited, Huatai Financial Holdings
(Hong Kong) Limited and CLSA Limited, pursuant to which Zhengxin Group
Investment Limited agreed to subscribe for such number of Offer Shares (rounded
down to the nearest whole board lot) which may be subscribed for in the aggregate
amount of US$2,000,000 (exclusive of brokerage and levies) at the Offer Price;
(h) a cornerstone investment agreement dated December 29, 2025 entered into between
our Company, Sunwoda Treasury (Hong Kong) Limited (༺ৌ༟(ಥ)ʮ
̡) and Huatai Financial Holdings (Hong Kong) Limited, pursuant to which
Sunwoda Treasury (Hong Kong) Limited agreed to subscribe for such number of
Offer Shares (rounded down to the nearest whole board lot) which may be
subscribed for in the aggregate amount of HK$10,000,000 (excluding brokerage and
levies) at the Offer Price; and
(i) the Hong Kong Underwriting Agreement.
2. Intellectual property rights of our Group
(a) Trademarks
As of the Latest Practicable Date, our Group was the registered owner of the following
trademarks which, in the opinion of our Directors, are material to our business:
No. Trademark
Registration
number Class
Registered
proprietor
Place of
registration
Date of
registration
Date of
Expiry
1. /H1118/H1118
 21106759 42 Company PRC October 21,
2018
October 20,
2028
2. /H1118/H1118
 21106758 42 Company PRC October 28,
2017
October 27,
2027
3. /H1118/H1118
 21106493 35 Company PRC October 28,
2017
October 27,
2027
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-4 –


--- page 560 ---
No. Trademark
Registration
number Class
Registered
proprietor
Place of
registration
Date of
registration
Date of
Expiry
4. /H1118/H1118
 21106426 35 Company PRC October 28,
2017
October 27,
2027
5. /H1118/H1118
 21106212 6 Company PRC January 14,
2018
January 13,
2028
6. /H1118/H1118
 21106115 6 Company PRC October 28,
2017
October 27,
2027
7. /H1118/H1118/H1118
 306991110 6, 18,
25,
35,
42
Company Hong Kong August 8,
2025
August 7,
2035
8. /H1118/H1118/H1118
306991129 6, 18,
25,
35,
42
Company Hong Kong August 8,
2025
August 7,
2035
(b) Patents
As of the Latest Practicable Date, our Group had registered the following patents which,
in the opinion of our Directors, are material to our business:
No. Patent Type Patent number Registered owner
Place of
registration
Date of
registration
Validity
period
1 /H1118/H1118/H1118High-performance
lithium-ion power
battery production
method using cobalt
sulfate (ঐ቞
ᕎɿਗɢཥϫԴ͜ି
ج)
Invention 202210644113X Our Company PRC June 9, 2022 20 years
2 /H1118/H1118/H1118High-efficiency vortex
flow feeding system
for thickener ( ɓ၇ዢ
ό
ӻ୕)
Utility
model
202222662034X Y antai Xingsheng
Environmental
Technology
Co. Ltd. ( ๧̨
Ҧ
ʮ̡), Our
Company
PRC October 10,
2022
10 years
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-5 –


--- page 561 ---
No. Patent Type Patent number Registered owner
Place of
registration
Date of
registration
Validity
period
3 /H1118/H1118/H1118Micro-positive pressure
plant for lithium
battery material
production ( ɓ၇቞ཥ
͛ପ͜ฆ͍Ꮐ
ג)
Utility
model
2022218121867 Our Company PRC July 14, 2022 10 years
4 /H1118/H1118/H1118New gaseous organic
phase condensation
recovery device ( ɓ၇
иኑ
Ϋϗༀໄ)
Utility
model
2022218102226 Our Company PRC July 14, 2022 10 years
5 /H1118/H1118/H1118New anti-leakage bagging
device for powder
materials (४
ဍༀ஛ༀ
ໄ)
Utility
model
2022217334387 Our Company PRC July 7, 2022 10 years
6 /H1118/H1118/H1118Copper foil and
aluminum foil mixed
slag drying device ( ɓ
၇ზၓ቙ၓ૿Υಮञ
৻ༀໄ)
Utility
model
2022217334391 Our Company PRC July 7, 2022 10 years
7 /H1118/H1118/H1118Improved organic phase
saponification device
(Ӵ
ʷༀໄ)
Utility
model
2022216257468 Our Company PRC June 28, 2022 10 years
8 /H1118/H1118/H1118An improved air
oxidation tank device
(ंःʷ
ᅻༀໄ)
Utility
model
2022216257472 Our Company PRC June 28, 2022 10 years
9 /H1118/H1118/H1118Ion exchange resin
recycling device ( ɓ၇
ᕎɿʹ౬ዓইృᐑл
͜ༀໄ)
Utility
model
2022215948609 Our Company PRC June 24, 2022 10 years
10 /H1118/H1118Copper-cobalt concentrate
leaching tank self-
circulation defoaming
device ( ɓ၇ზཋၚᘤ
ༀ
ໄ)
Utility
model
2022214226412 Our Company PRC June 9, 2022 10 years
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-6 –


--- page 562 ---
No. Patent Type Patent number Registered owner
Place of
registration
Date of
registration
Validity
period
11 /H1118/H1118Device for recovering
organic phase by
percolation of
interphase filter cake
(ᓩჳသᓩ
ༀໄ)
Utility
model
2022214226427 Our Company PRC June 9, 2022 10 years
12 /H1118/H1118Environmentally friendly
powder packaging bag
breaking and dust
collection integrated
device (४
᜗̍ༀ஛ॎ̍ϗྡྷɓ
᜗ʷༀໄ)
Utility
model
2022214226253 Our Company PRC June 9, 2022 10 years
13 /H1118/H1118Device for salvaging
interphase in large
extraction tank ( ɓ၇
ග
ༀໄ)
Utility
model
2022214225231 Our Company PRC June 9, 2022 10 years
14 /H1118/H1118Extraction and mixing
outdoor hanging
liquid guide box ( യ՟
̮નኬ૰ଷ)
Utility
model
2020204877780 Our Company PRC April 7, 2022 10 years
15 /H1118/H1118Extraction double-layer
clarification chamber
(܃)
Utility
model
2020204885255 Our Company PRC April 7, 2022 10 years
16 /H1118/H1118Silicon rectifier unit for
hydrometallurgy ( ɓ၇
ዚ
ଡ଼)
Utility
model
2019208552094 Our Company PRC June 9, 2019 10 years
17 /H1118/H1118Stirring extraction device
for hydrometallurgy
(യ՟
ༀໄ)
Utility
model
2019208552107 Our Company PRC June 9, 2019 10 years
18 /H1118/H1118Extraction box third
impurity phase
interception
sedimentation
collection device ( ɓ
ᘗ
ϗණༀໄ)
Utility
model
2023230155203 Jinxun Anhui PRC November 8,
2023
10 years
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-7 –


--- page 563 ---
No. Patent Type Patent number Registered owner
Place of
registration
Date of
registration
Validity
period
19 /H1118/H1118Automatic mud removal
device for dust-
containing tail gas
spray tower ( ɓ၇ўྡྷ
إ
ༀໄ)
Utility
model
2023229010699 Jinxun Anhui PRC October 27,
2023
10 years
20 /H1118/H1118Improved cooling
circulating water heat
exchange and
temperature reduction
device (и
๝ༀ
ໄ)
Utility
model
2023228570369 Jinxun Anhui PRC October 24,
2023
10 years
21 /H1118/H1118Improved exhaust gas
demisting device ( ɓ
ᄻंৰ˥ᗯ
ༀໄ)
Utility
model
2023226894166 Jinxun Anhui PRC October 8,
2023
10 years
22 /H1118/H1118Double-chamber high-
efficiency slag
receiving hopper
device for filter press
(ࣖ
ટಮ˗ༀໄ)
Utility
model
202322604674X Jinxun Anhui PRC September 25,
2023
10 years
23 /H1118/H1118Improved steam inner
extension steam pipe
and fixing device ( ɓ
ႋӛʫФ̺
ༀໄ)
Utility
model
2023225874339 Jinxun Anhui PRC September 22,
2023
10 years
24 /H1118/H1118Unattended forklift
driving channel gate
device (ς
ژ
ༀໄ)
Utility
model
2023200809684 Jinxun Anhui PRC January 12,
2023
10 years
25 /H1118/H1118Anti-blocking device for
return pump of
leaching tank ( ɓ၇ऍ
ԣੁ෦ༀ
ໄ)
Utility
model
2023200808681 Jinxun Anhui PRC January 12,
2023
10 years
26 /H1118/H1118Acid and alkali pipeline
leakage protection
device ( ɓ၇ა᜽၍༸
ဍԣᚐༀໄ)
Utility
model
2023200576453 Jinxun Anhui PRC January 9,
2023
10 years
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-8 –


--- page 564 ---
No. Patent Type Patent number Registered owner
Place of
registration
Date of
registration
Validity
period
27 /H1118/H1118Improved self-priming
pump siphon water
tank device ( ɓ၇ҷආ
і˥ᇌༀ
ໄ)
Utility
model
2023200181478 Jinxun Anhui PRC January 5,
2023
10 years
28 /H1118/H1118High-efficiency
clarification device
for iron hydroxide
colloidal suspension
(ɓ၇૫ःʷ᚛ᇭ᜗ᘔ
ᆋ૶ༀໄ)
Utility
model
2023200019657 Jinxun Anhui PRC January 3,
2023
10 years
29 /H1118/H1118An improved extraction
tank ventilation device
(യ՟ᅻஷ
ༀໄ)
Utility
model
202320002025X Jinxun Anhui PRC January 3,
2023
10 years
30 /H1118/H1118Guide mechanism for
submerged arc
welding of thickener
bottom plate ( ɓ၇ዢ
ٙ
ኬΣዚ࿴)
Invention 2022114516725 Y antai Xingsheng
Environmental
Technology
Co. Ltd. ( ๧̨
Ҧ
ʮ̡), ๧
߅ڭ
ʮ̡e
Jinxun Anhui
PRC November 21,
2022
20 years
(c) Copyrights
As of the Latest Practicable Date, our Group was the owner of the following copyrights
which, in the opinion of our Directors, are material to our business:
No. Copyright Version
Registration
number
Registered
owner
Place of
registration
Date of
registration
1 /H1118/H1118/H1118Y unnan Jinxun Shares
Market Price Platform
(΅̹ఙᄆ
̨̻)
V1.0 2019SR0432496 Company PRC May 7, 2019
2 /H1118/H1118/H1118Y unnan Jinxun Co., Ltd.
Role Management
Platform (ٰ
΅ԉЍ၍ଣ̨̻)
V1.0 2019SR0432892 Company PRC May 7, 2019
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-9 –


--- page 565 ---
No. Copyright Version
Registration
number
Registered
owner
Place of
registration
Date of
registration
3 /H1118/H1118/H1118Y unnan Jinxun Co., Ltd.
Settlement
Management Platform
(΅ഐၑ၍
ଣ̨̻)
V1.0 2019SR0432942 Company PRC May 7, 2019
4 /H1118/H1118/H1118Y unnan Jinxun Co., Ltd.
Department
Management Platform
(၍
ଣ̨̻)
V1.0 2019SR0431778 Company PRC May 7, 2019
5 /H1118/H1118/H1118Y unnan Jinxun Co., Ltd.
Contract Management
Platform (ٰ
΅ΥΝ၍ଣ̨̻)
V1.0 2019SR0426900 Company PRC May 6, 2019
6 /H1118/H1118/H1118Y unnan Jinxun Co., Ltd.
Inspection Order
Management Platform
(΅Ꮸ᜕ఊ
၍ଣ̨̻)
V1.0 2019SR0430531 Company PRC May 6, 2019
7 /H1118/H1118/H1118Y unnan Jinxun Shares
Report Management
Platform (ٰ
၍ଣ̨̻)
V1.0 2019SR0429283 Company PRC May 6, 2019
8 /H1118/H1118/H1118Y unnan Jinxun Co., Ltd.
Financial Management
Platform (ٰ
΅ৌਕ၍ଣ̨̻)
V1.0 2019SR0427047 Company PRC May 6, 2019
9 /H1118/H1118/H1118Y unnan Jinxun Stock
Weighing Order
Management Platform
(΅ᆼఊ၍
ଣ̨̻)
V1.0 2019SR0427192 Company PRC May 6, 2019
10 /H1118/H1118Y unnan Jinxun Co., Ltd.
Customer Management
Platform (ٰ
၍ଣ̨̻)
V1.0 2019SR0430542 Company PRC May 6, 2019
11 /H1118/H1118Jinxun Nonferrous Metals
Settlement System (ږ
᙮ഐၑӻ୕)
1.0.12.11 2017SR038305 Company PRC February 10,
2017
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-10 –


--- page 566 ---
(d) Domain names
As of the Latest Practicable Date, our Group had registered the following domain names
which, in the opinion of our Directors, are material to our business:
No. Domain Name
Name of Registered
Proprietor Date of Registration Date of Expiry
1 /H1118/H1118jinxunec.com Our Company July 31, 2016 July 31, 2027
C. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
1. Directors
(a) Disclosure of Interests — Interests and short positions of the Directors and the chief
executive of our Company in the registered capital of our Company and its associated
corporations
Immediately following completion of the Global Offering (without taking into account
any H Shares which may be issued pursuant to the exercise of the Over-allotment Option), the
interests or short positions of our Directors or chief executive of our Company in the Shares,
underlying Shares and debentures of our Company or our associated corporations (within the
meaning of Part XV of the SFO) which will be required to be notified to our Company and the
Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or
short positions which 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, to be notified to our Company and the Stock
Exchange, once our Shares are listed, will be as follows:
Interest in Shares of our Company
Name of Director Nature of interest
Number of
Shares interested (1)
Approximate
percentage
of interest
Mr. Y uan(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner 101,230,612
Shares (L)
68.84%
Interest in a controlled
corporation
8,973,467
Shares (L)
6.10%
Ms. Y uan Mei (3) /H1118/H1118/H1118/H1118/H1118/H1118Interest in a controlled
corporation
6,220,407
Shares (L)
4.23%
Mr. Y ang
Y ongchang(4) /H1118/H1118/H1118/H1118/H1118/H1118
Interest in a controlled
corporation
360,733
Shares (L)
0.25%
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-11 –


--- page 567 ---
Notes:
(1) The letter “L” denotes the person’s long position in our Shares.
(2) Heli Investment (our share incentive platform) is owned as to 10% by its general partner, Mr. Y uan, who
manages its daily affairs and exercises the voting rights on behalf of Heli Investment as our Shareholder.
Heli Investment has 19 limited partners, including Ms. Y uan Mei, our executive Director and Mr. Y uan’s
sister, who owns approximately 69.32%, Mr. Y ang Y ongchang, our executive Director, who owns
approximately 4.02%, Mr. Chen Weijun, a director of Jinxun Anhui, who owns approximately 0.23% and
15 existing employees and one former employee who collectively owns approximately 16.43% as of the
Latest Practicable Date. For the purpose of the SFO, Mr. Y uan is deemed to be interested in the interest
held by Heli Investment.
(3) Ms. Y uan Mei (our executive Director) is a limited partner holding approximately 69.32% in Heli
Investment. For the purpose of the SFO, Ms. Y uan is deemed to be proportionately interested in the
corresponding 6,220,407 Shares held by Heli Investment.
(4) Mr. Y ang Y ongchang (our executive Director) is a limited partner holding approximately 4.02% of
partnership interest in Heli Investment. For the purpose of the SFO, Mr. Y ang is deemed to be
proportionately interested in the corresponding 360,733 Shares held by Heli Investment.
(b) Particulars of Directors’ service agreements and letters of appointment
Each of our Directors has entered into a service agreement or letter of appointment with
our Company. The principal particulars of these service agreements and letters of appointment
comprise (a) the term of the service; (b) termination provisions; and (c) dispute resolution
provision. The service agreements and letters of appointment may be renewed in accordance
with our Articles of Association and the applicable laws, rules and regulations from time to
time.
Save as disclosed above, none of our Directors has or is proposed to have a service
agreement 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)).
(c) Directors’ remuneration
During the three years ended December 31, 2024 and the six months ended June 30, 2025,
the aggregate remuneration (including salaries, allowances and benefits in kind, discretionary
bonuses, retirement scheme contributions) paid to our Directors were approximately RMB1.63
million, RMB1.95 million, RMB2.05 million and RMB1.11 million, respectively. For details,
please refer to note 9 of the Accountants’ Report set out in Appendix I to this prospectus.
Under the arrangement currently in force, the aggregate remuneration (including salaries,
allowances and benefits in kind, discretionary bonuses, retirement scheme contributions) of our
Directors for the year ending December 31, 2025 is estimated to be no more than
approximately RMB2.42 million.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-12 –


--- page 568 ---
2. Substantial Shareholders
Save as disclosed in “Substantial Shareholders” in this prospectus, so far as our Directors
are aware, immediately following the completion of the Global Offering (without taking into
account any H Shares which may be issued pursuant to the exercise of the Over-allotment
Option), no person (other than our Directors and chief executives of our Company) will have
or be deemed or taken to have an interest and/or short position in our Shares or the underlying
Shares which would fall to be disclosed under the provisions of Division 2 and 3 of Part XV
of the SFO, or who will be, directly or indirectly, interested in 10% or more of the issued voting
shares of any member of our Group.
3. Agency fees or commissions received
Save as disclosed in this prospectus, no commissions, discounts, brokerages or other
special terms were granted in connection with the issue or sale of any capital of any member
of our Group within the two years immediately preceding the date of this prospectus.
4. Disclaimers
(a) save as disclosed in this section, none of our Directors or chief executive of our
Company has any interest or short position in our shares, underlying shares or
debentures of our Company or any of its associated corporation (within the meaning
of the SFO) which will have to be notified to our Company and the Stock Exchange
pursuant to Divisions 7 and 8 of Part XV of the SFO or which will be required,
pursuant to section 352 of the SFO, to be entered in the register referred to therein,
or which will be required to be notified to our Company and the Stock Exchange
pursuant to the Model Code for Securities Transactions by Directors of Listed
Issuers once our Shares are listed;
(b) none of our Directors or experts referred to under “— D. Other information — 7.
Qualifications and consents of experts” below 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;
(c) none of our Directors or experts referred to under “— D. Other information — 7.
Qualifications and consents of experts” below 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;
(d) save as disclosed in this section, none of our Directors has any existing or proposed
service contracts with any member of our Group (excluding contracts expiring or
determinable by the employer within one year without payment of compensation
(other than statutory compensation));
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-13 –


--- page 569 ---
(e) save as disclosed in “— C. Further information about our Directors and substantial
shareholders — 2. Substantial Shareholders” above, none of our Directors knows of
any person (not being a Director or chief executive of our Company) who will,
immediately following completion of the Global Offering (without taking into
account any Shares which may be issued pursuant to the exercise of the
Over-allotment Option), have an interest or short position in our Shares or
underlying Shares of our Company which would fall to be disclosed to our Company
under the provisions of Divisions 2 and 3 of Part XV of SFO or be interested,
directly or indirectly, in 10% or more of the issued voting shares of any member of
our Group; and
(f) so far as is known to our Directors as of the Latest Practicable Date, 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 total
number of issued Shares has any interests in the five largest customers or the five
largest suppliers of our Group.
D. OTHER INFORMATION
1. Estate Duty
Our Directors have been advised that currently no material liability for estate duty is
likely to fall on our Company or any of our subsidiaries in the PRC.
2. Litigation
During the Track Record Period and as of the Latest Practicable Date, we had not been
involved in any litigation, arbitration or administrative proceedings which could have a
material adverse impact on our business, financial condition or results of operations. As of the
Latest Practicable Date, we were not aware of any pending or threatened litigation, arbitration
or administrative proceedings against us which may have a material and adverse impact on our
business, financial condition or results of operations.
3. Sole Sponsor
The Sole Sponsor satisfies the independence criteria applicable to sponsor as set out in
Rule 3A.07 of the Listing Rules. The Sole Sponsor will receive an aggregate fee of
HK$2,000,000 for acting as the sponsor for the Listing.
The Sole Sponsor has made an application on our Company’s behalf to the Stock
Exchange for the listing of, and permission to deal in, the H Shares to be issued pursuant to
the Global Offering. All necessary arrangements have been made for the Shares to be admitted
into CCASS.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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4. Preliminary expenses
As of the Latest Practicable Date, our Company has not incurred any material preliminary
expenses.
5. No material adverse change
Our Directors confirm that there has been no material adverse change in our Group’s
financial or trading position since June 30, 2025 (being the date on which the latest audited
consolidated financial information of our Group was prepared).
6. Promoters
The promoters of our Company consist of Mr. Y uan and Heli Investment. Save as
disclosed in the section headed “History and Corporate Structure”, within the two years
immediately preceding the date of this prospectus, no cash, securities or other benefit has been
paid, allotted or given nor are any proposed to be paid, allotted or given to any promoters in
connection with the Global Offering and the related transactions described in this prospectus.
7. Qualifications and consents of experts
The following are the qualifications of the experts who have given opinion or advice
which are contained in this prospectus:
Name Qualifications
Huatai Financial Holdings
(Hong Kong) Limited /H1118/H1118/H1118/H1118/H1118
A licenced corporation under the SFO for type 1
(dealing in securities), type 2 (dealing in futures
contracts), type 3 (leveraged foreign exchange
trading), type 4 (advising on securities), type 6
(advising on corporate finance), type 7 (providing
automated trading services) and type 9 (asset
management) of the regulated activities as defined
under the SFO
KPMG /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Certified Public Accountants
Public Interest Entity Auditor registered in accordance
with the Accounting and Financial Reporting Council
Ordinance
JunHe LLP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Legal advisors to our Company as to PRC laws
Bennani & Associés RDC
SAS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Legal advisors to our Company as to DR Congo laws
Chibesakunda & Co. /H1118/H1118/H1118/H1118/H1118/H1118/H1118Legal advisors to our Company as to Zambian laws
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-15 –


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Name Qualifications
Estudio Muñiz, Olaya,
Meléndez, Castro, Ono &
Herrera Abogados /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Legal advisors to our Company as to Peruvian laws
Shook Lin & Bok LLP /H1118/H1118/H1118/H1118/H1118Legal advisors to our Company as to Singaporean laws
Hogan Lovells
International LLP /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Legal advisor as to International Sanctions laws
Frost & Sullivan (Beijing)
Inc., Shanghai Branch Co. /H1118
Industry consultant
Each of the experts named above has given and has not withdrawn its written consent to
the issue of this prospectus with the inclusion of its reports, letters, opinions, summaries of
opinions and/or references to its name included herein in the form and context in which they
respectively appear.
8. Interests of experts in our Company
Except as disclosed in this prospectus and save for its obligations under the Underwriting
Agreements, none of the persons named in “— 7. Qualifications and consents of experts” above
is interested beneficially or otherwise in any Shares or shares of any member of our Group or
has any right or option (whether legally enforceable or not) to subscribe for or nominate
persons to subscribe for any shares or securities in any member of our Group.
9. Taxation of holders of H Shares
The sale, purchase and transfer of H Shares are subject to Hong Kong stamp duty. The
current rate chargeable on each of the seller and purchaser is 0.1% of the consideration or, if
higher, the fair value of the H Shares being sold or transferred. For further information in
relation to taxation, see “Appendix III — Taxation and Foreign Exchange” to this prospectus.
10. Binding effect
This prospectus shall have the effect, if an application is made in pursuance of it, of
rendering all persons concerned bound by all of the provisions (other than the penal provisions)
of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance so far as applicable.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-16 –


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11. Miscellaneous
(a) Within the two years immediately preceding the date of this prospectus:
(i) save as disclosed in “History and Corporate Structure” in this prospectus, no
share or loan capital of our Company or any of our subsidiaries has been issued
or agreed to be issued fully or partly paid either for cash or for a consideration
other than cash;
(ii) no share or loan capital of our Company or any of our subsidiaries is under
option or is agreed conditionally or unconditionally to be put under option;
(iii) no commissions, discounts, brokerages or other special terms have been
granted or agreed to be granted in connection with the issue or sale of any share
or loan capital of our Company or any of our subsidiaries; and
(iv) no commission has been paid or payable for subscription, agreeing to
subscribe, procuring subscription or agreeing to procure subscription of any
share in our Company or any of our subsidiaries;
(b) no founder, management or deferred Shares nor any debenture in our Company or
any of our subsidiaries have been issued or agreed to be issued;
(c) 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;
(d) there has been no material adverse change in the financial or trading position or
prospects of our Group since June 30, 2025 (being the date to which the latest
audited consolidated financial statements of our Group were prepared);
(e) all necessary arrangements have been made to enable our H Shares to be admitted
to CCASS for clearing and settlement;
(f) no company within our Group is presently listed on any stock exchange or traded on
any trading system and our Group is not seeking or proposing to seek any listing of,
or permission to deal in, the share or loan capital of our Company on any other stock
exchange;
(g) our Company has no outstanding convertible debt securities or debentures;
(h) there is no arrangement under which future dividend are waived or agreed to be
waived; and
(i) there is no restriction affecting the remittance of profits or repatriation of capital
into Hong Kong and from outside Hong Kong.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-17 –


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12. 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).
In case of any discrepancies between the English language version and Chinese language
version of this prospectus, the English language version shall prevail.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-18 –


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A. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
The documents attached to the copy of this prospectus delivered to the Registrar of
Companies in Hong Kong for registration were:
(a) the written consents referred to in “Appendix VI — Statutory and General
Information — D. Other Information — 7. Qualifications and consents of experts”
to this prospectus; and
(b) a copy of each of the material contracts referred to in “Appendix VI — Statutory and
General Information — B. Further Information about Our Business — 1. Summary
of material contracts” to this prospectus.
B. DOCUMENTS ON DISPLAY
Copies of the following documents will be published on the websites of the Stock
Exchange ( www.hkexnews.hk ) and our Company ( www.jinxunec.com ) up to and including
the date which is 14 days from the date of this prospectus:
(a) the Articles of Association;
(b) the Accountants’ Report from the Reporting Accountants, the text of which is set out
in Appendix I to this prospectus;
(c) the report from the Reporting Accountants in respect of the unaudited pro forma
financial information, the text of which is set out in Appendix II to this prospectus;
(d) the audited consolidated financial statements of our Group for the three years ended
December 31, 2024 and the six months ended June 30, 2025;
(e) the legal opinion issued by JunHe LLP , our PRC Legal Advisors, in respect of
certain general corporate matters of our Group;
(f) the legal opinion issued by Bennani & Associés RDC SAS, our legal advisors as to
DR Congo laws, in respect of certain corporate matters of Jinxun DR Congo;
(g) the legal opinion issued by Chibesakunda & Co, our legal advisors as to Zambian
laws, in respect of certain general corporate matters of Rong Xing Investments;
(h) the legal opinion issued by Estudio Muñiz, Olaya, Meléndez, Castro, Ono & Herrera
Abogados, our legal advisors as to Peruvian laws, in respect of certain general
corporate matters of Jinxun Peru;
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND DOCUMENTS ON DISPLAY
– VII-1 –


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(i) the legal opinion issued by Shook Lin & Bok LLP , our legal advisors as to
Singaporean laws, in respect of certain general corporate matters of Jinxun
Singapore;
(j) the memorandum of advice issued by Hogan Lovells International LLP , our legal
advisor as to International Sanctions laws;
(k) the industry report issued by Frost & Sullivan (Beijing) Inc., Shanghai Branch Co.;
(l) the written consents referred to in “Appendix VI — Statutory and General
Information — D. Other Information — 7. Qualifications and consents of experts”
to this prospectus;
(m) the material contracts referred to in “Appendix VI — Statutory and General
Information — B. Further Information about Our Business — 1. Summary of
material contracts” to this prospectus;
(n) the service agreements and letters of appointment entered into between our
Company and each of our Directors referred to in “Appendix VI — Statutory and
General Information — C. Further Information about Our Directors and Substantial
Shareholders — 1(b). Particulars of Directors’ service agreements and letters of
appointment” to this prospectus; and
(o) the PRC Company Law, the PRC Securities Law, the Trial Administrative Measures
of Overseas Securities Offering and Listing by Domestic Companies, together with
their unofficial English translation.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND DOCUMENTS ON DISPLAY
– VII-2 –


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雲南金潯資源股份有限公司
Yunnan Jinxun Resources Co., Ltd.
