--- page 1 ---
ʮ̡
4(.*$30$031
ʮ̡4(.*$30$031
GLOBAL OFFERING
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
(A joint stock company incorporated in the People’s Republic of China with limited liability)
Stock code: 3661


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IMPORTANT
IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain professional
independent advice.
SG Micro Corp
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 : 54,001,200 H Shares (subject to the Over-allotment Option)
Number of Hong Kong Offer Shares : 5,400,200 H Shares (subject to reallocation)
Number of International Offer Shares : 48,601,000 H Shares (subject to reallocation and the Over-
allotment Option)
Maximum Offer Price : HK$85.20 per H Share, plus brokerage of 1.0%, AFRC
transaction levy of 0.00015%, SFC transaction levy of
0.0027% and Stock Exchange trading fee of 0.00565%
(payable in full on application in Hong Kong dollars and
subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 3661
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company
Limited take no responsibility 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 “Documents Delivered to the Registrar of Companies and
Available on Display” in Appendix VII to this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by
section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The
Securities and Futures Commission and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus
or any other documents referred to above.
The Offer Price is expected to be determined by agreement between the Overall Coordinators (for themselves and on behalf of the
Underwriters) and our Company on the Price Determination Date. The Price Determination Date is expected to be on or around Wednesday,
June 24, 2026 (Hong Kong time) and, in any event, not later than 12:00 noon on Wednesday, June 24, 2026 (Hong Kong time). The Offer
Price will not be more than HK$85.20 per Offer Share. If, for any reason, the Offer Price is not agreed by 12:00 noon on Wednesday, June 24,
2026 (Hong Kong time) between the Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company, the Global
Offering will not proceed and will lapse.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, with our consent, reduce the number of Offer
Shares being offered under the Global Offering 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, an announcement will be published on the websites of the Stock Exchange at
www.hkexnews.hk and the Company at www.sg-micro.com as soon as practicable following such decision to make such reduction,
and in any event not later than the morning of the day which is the last day for lodging applications under the Hong Kong Public
Offering. For further details, see “Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares.”
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Overall
Coordinators (for themselves and on behalf of the Hong Kong Underwriters) if certain events occur prior to 8:00 a.m. on the Listing Date. See
“Underwriting—Underwriting Arrangements and Expenses—Hong Kong Public Offering—Grounds for Termination” for further details.
Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus,
including the risk factors set out in the section headed “Risk Factors.”
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States and
may not be offered, sold, pledged or transferred within the United States or to, or for the account or benefit of U.S. persons (as defined in
Regulation S), except in transactions exempt from, or not subject to, the registration requirements of the U.S. Securities Act. The Offer Shares
may be offered, sold or delivered outside the United States in offshore transactions in reliance on Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies
of this prospectus to the public in relation to the Hong Kong Public Offering.
This prospectus is available on the websites of the Stock Exchange (www.hkexnews.hk) and our Company (www.sg-micro.com).
If you require a printed copy of this prospectus, you may download and print from the website addresses above.
June 17, 2026


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IMPORTANT
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 any printed copies of this prospectus in relation to the Hong
Kong Public Offering.
This prospectus is available on the website of the Stock Exchange at www.hkexnews.hk
under the “ HKEXnews > New Listings > New Listing Information ” section, and the website of
our Company at www.sg-micro.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 HK eIPO White Form service at www.hkeipo.hk;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC Nominees to
apply on your behalf by instructing your broker or custodian who is a HKSCC
Participant to give electronic application instructions via HKSCC’s FINI system to
apply for the Hong Kong Offer Shares on your behalf.
We will not provide any physical channels to accept any application for the Hong Kong Offer
Shares by the public. The contents of the electronic version of this prospectus are identical to the
printed prospectus as registered with the Registrar of Companies in Hong Kong pursuant to section
342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (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.
See “How to Apply for Hong Kong Offer Shares” for further details of the procedures
through which you can apply for the Hong Kong Offer Shares electronically.
Your application through the HK eIPO White Form service or the HKSCC EIPO channel
must be for a minimum of 100 Hong Kong Offer Shares and in one of the numbers set out in the
table.
If you are applying through the HK eIPO White Form service, you may refer to the table
below for the amount payable for the number of H Shares you have selected. You must pay the
respective maximum amount payable on application in full upon application for Hong Kong Offer
Shares.
If you are applying through the HKSCC EIPO channel, you are required to prefund your
application based on the amount specified by your broker or custodian, as determined based on the
applicable laws and regulations in Hong Kong.


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IMPORTANT
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount payable(2)
on application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount payable(2)
on application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount payable(2)
on application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount payable(2)
on application/
successful
allotment
HK$ HK$ HK$ HK$
100 8,605.92 2,500 215,148.10 30,000 2,581,777.25 600,000 51,635,545.20
200 17,211.85 3,000 258,177.72 40,000 3,442,369.68 700,000 60,241,469.40
300 25,817.77 3,500 301,207.35 50,000 4,302,962.10 800,000 68,847,393.60
400 34,423.70 4,000 344,236.97 60,000 5,163,554.52 900,000 77,453,317.80
500 43,029.62 4,500 387,266.59 70,000 6,024,146.95 1,000,000 86,059,242.00
600 51,635.55 5,000 430,296.21 80,000 6,884,739.35 1,500,000 129,088,863.00
700 60,241.47 6,000 516,355.45 90,000 7,745,331.78 2,000,000 172,118,484.00
800 68,847.39 7,000 602,414.69 100,000 8,605,924.20 2,700,100
(1) 232,368,559.32
900 77,453.32 8,000 688,473.93 200,000 17,211,848.40
1,000 86,059.24 9,000 774,533.17 300,000 25,817,772.60
1,500 129,088.86 10,000 860,592.42 400,000 34,423,696.80
2,000 172,118.49 20,000 1,721,184.85 500,000 43,029,621.00
Notes:
(1) Maximum number of Hong Kong Offer Shares you may apply for andthis is 50% of the Hong Kong Offer Shares initially offered.
(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 Excha nge Participants (as defined in the Listing Rules) or to the HK eIPO White
Form Service Provider (for applications made through the application channel of the HK eIPO White Form service) while the SFC
transaction levy, the Stock Exchange trading fee and the AFRC transaction levy will be paid to the SFC, the Stock Exchange and the AFRC,
respectively.
No application for any other number of Hong Kong Offer Shares will be considered and any
such application is liable to be rejected.


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EXPECTED TIMETABLE(1)
If there is any change in the following expected timetable of the Hong Kong Public
Offering, we will issue an announcement in Hong Kong to be published on the Company’s website
at www.sg-micro.com and the website of the Stock Exchange at www.hkexnews.hk.
Hong Kong Public Offering commences ..................... Wednesday, June 17, 2026
Latest time for completing electronic applications under the HK
eIPO White Form service through the designated website at
www.hkeipo.hk(2) ....................................... 11:30 a.m. on Tuesday, June 23, 2026
Application lists open (3) .................................. 11:45 a.m. on Tuesday, June 23, 2026
Latest time for (a) completing payment of HK eIPO White Form
applications by effecting internet banking transfer(s) or PPS
payment transfer(s) and (b) giving electronic application
instructions to HKSCC
(4) ................................. 12:00 noon on Tuesday, June 23, 2026
If you are instructing your broker or custodian who is a HKSCC Participant will submit an
EIPO application on your behalf through HKSCC’s FINI system in accordance with your instruction,
you are advised to contact your broker or custodian for the earliest and latest time for giving such
instructions, as this may vary by broker or custodian.
Application lists close (3) .................................. 12:00 noon on Tuesday, June 23, 2026
Expected Price Determination Date ......................... a to r before 12:00 noon on Wednesday, June 24,
2026
Announcement of the Offer Price, the level of indications of
interest in the International Offering, the level of applications in
the Hong Kong Public Offering and the basis of allocation of the
Hong Kong Offer Shares to be published on the website of the
Stock Exchange at www.hkexnews.hk and on the Company’s
website at www.sg-micro.com(5) at or before ................. 11:00 p.m. on Thursday, June 25, 2026
The results of allocations in the Hong Kong Public Offering (with successful applicants’ identification document
numbers, where appropriate) to be available through a variety of channels, including:
 in the announcement to be posted on our website and the
website of the Stock Exchange at www.sg-micro.com and
www.hkexnews.hk, respectively ........................
at or before 11:00 p.m. on Thursday, June 25,
2026
 Results of allocation for the Hong Kong Public Offering will
be available at the “Allotment Results” page from the
designated results of allocations website at
www.hkeipo.hk/IPOResult (or www.tricor.com.hk/ipo/
result) with a “search by ID” function from ...............
11:00 p.m. on Thursday, June 25, 2026 to
12:00 midnight on Wednesday, July 1, 2026
 from the allocation results telephone enquiry line by calling
+852 3691 8488 between 9:00 a.m. and 6:00 p.m. from ......
Friday, June 26, 2026 to
Thursday, July 2, 2026
(except Saturday, Sunday and public holidays in
Hong Kong)
H Share certificates in respect of wholly or partially successful
applications to be dispatched or deposited into CCASS on or
before
(6)(8) .............................................. Thursday, June 25, 2026
HK eIPO White Form e-Auto Refund payment instructions/refund
checks in respect of (i) wholly or partially successful applications if
the final Offer Price is less than the price payable on application (if
applicable) and (ii) wholly or partially unsuccessful application under
the Hong Kong Public Offering to be dispatched on or before
(7)(8) . . . Friday, June 26, 2026
i


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EXPECTED TIMETABLE(1)
Dealings in the H Shares on the Stock Exchange expected to
c o m m e n c ea t ........................................... 9:00 a.m. on Friday, June 26, 2026
Notes:
(1) Unless otherwise stated, all times and dates refer to Hong Kong local times and dates.
(2) You will not be permitted to submit your application under the HK eIPO White Form service through the designated website at
www.hkeipo.hk after 11:30 a.m. on the last day for submitting applications. If you have already submitted your application and obtained
an application reference number from the designated website prior to 11:30 a.m., you will be permitted to continue the application
process (by completing payment of application monies) until 12:00 noon on the last day for submitting applications, when the application
lists close.
(3) If there is/are a “black” rainstorm warning or a tropical cyclone warning signal number 8 or above and/or Extreme Conditions in force in
Hong Kong at any time between 9:00 a.m. and 12:00 noon on Tuesday, June 23, 2026, the application lists will not open or close on that
day. For details, please refer to the paragraph headed “How to Apply for Hong Kong Offer Shares—E. Bad Weather Arrangements” in
this prospectus.
(4) Applicants who apply for Hong Kong Offer Shares by instructing their broker or custodian to give electronic application instructions
to HKSCC via FINI should refer to the paragraph headed “How to Apply for Hong Kong Offer Shares—A. Application 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) H Share certificates will only become valid evidence of title at 8:00 a.m. on the Listing Date provided that the Global Offering has
become unconditional and the right of termination described in “Underwriting—Underwriting Arrangements and Expenses—Hong Kong
Public Offering—Grounds for Termination” has not been exercised. Investors who trade H Shares on the basis of publicly available
allocation details prior to the receipt of H Share certificates or prior to the H Share certificates becoming valid evidence of title do so
entirely at their own risk.
(7) HK eIPO White Form e-Auto Refund payment instructions/refund checks will be issued in respect of wholly or partially unsuccessful
applications pursuant to the Hong Kong Public Offering and also in respect of wholly or partially successful applications in the event that
the final Offer Price is less than the maximum price payable per Offer Share on application.
(8) Applicants being individuals who are eligible for personal collection may not authorize any other person to collect on their behalf. If you
are a corporate applicant which is eligible for personal collection, your authorized representative must bear a letter of authorization from
your corporation stamped with your corporation’s chop. Both individuals and authorized representatives must produce evidence of
identity acceptable to our H Share Registrar at the time of collection.
Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel should refer to the paragraph headed “How
to Apply for Hong Kong Offer Shares—D. Despatch/Collection o f H Share Certificates and Refund of Application Monies” in this
prospectus for details.
Applicants who have applied through the HK eIPO White Form service and paid their applications monies through single bank accounts
may have refund monies (if any) dispatched to the bank account in the form of HK eIPO White Form e-Auto Refund payment
instructions. Applicants who have applied through the HK eIPO White Form service and paid their application monies through multiple
bank accounts may have refund monies (if any) dispatched to the address as specified in their application instructions in the form of refund
checks in favor of the applicant (or, in the case of joint applications, the first-named applicant) by ordinary post at their own risk.
Any uncollected H Share certificates will be disp atched by ordinary post, at the applicants’ risk, to the addresses specified in the relevant
applications.
Further information is set out in the paragraphs headed “How to Apply for the Hong Kong Offer Shares—D. Despatch/Collection of
H Share Certificates and Refund of Application Monies.”
The above-expected timetable is a summary only. For further details of the structure of the
Global Offering, including its conditions, and the procedures for applications for Hong Kong Offer
Shares, please see “Structure of the Global Offering” and “How to Apply for Hong Kong Offer
Shares” in this prospectus, respectively.
If the Global Offering does not become unconditional or is terminated in accordance with its
terms, the Global Offering will not proceed. In such case, the Company will make an announcement as
soon as practicable thereafter.
ii


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CONTENTS
IMPORTANT NOTICE TO PROSPECTIVE INVESTORS
This prospectus is issued by our Company solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a solicitation
of an offer to buy any security other than the Hong Kong Offer Shares offered by this prospectus
pursuant to the Hong Kong Public Offering. This prospectus may not be used for the purpose of
making, and does not constitute, an offer or invitation in any other jurisdiction or in any other
circumstances. No action has been taken to permit a public offering of the Hong Kong Offer
Shares in any jurisdiction other than Hong Kong and no action has been taken to permit the
distribution of this prospectus in any jurisdiction other than Hong Kong. The distribution of this
prospectus for purposes of a public offering and the offering and sale of the Hong Kong Offer
Shares in other jurisdictions are subject to restrictions and may not be made except as permitted
under the applicable securities laws of such jurisdictions pursuant to registration with or
authorization by the relevant securities regulatory authorities or an exemption therefrom.
You should rely only on the information contained in this prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this prospectus. We have not authorized
anyone to provide you with information that is different from what is contained in this prospectus.
Any information or representation not contained nor made in this prospectus must not be relied
on by you as having been authorized by the Company, the Joint Sponsors, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers,
any of the Underwriters and the Capital Market Intermediaries, any of our or their respective
directors, officers, employees, agents, or representatives of any of them or any other parties
involved in the Global Offering. Information contained on our website ( www.sg-micro.com) does
not form part of this prospectus.
Page
Expected Timetable ................................................................... i
Contents ............................................................................ i i i
Summary ............................................................................ 1
Definitions ........................................................................... 1 9
Glossary of Technical Terms ........................................................... 3 0
Forward-looking Statements ............................................................ 3 6
Risk Factors ......................................................................... 3 8
Waivers and Exemptions ............................................................... 6 6
Information about this Prospectus and the Global Offering .................................. 7 7
Directors and Parties Involved in the Global Offering ...................................... 8 1
Corporate Information ................................................................ 8 4
Industry Overview .................................................................... 8 6
Regulatory Overview .................................................................. 1 0 1
History, Development and Corporate Structure ............................................ 1 2 3
Business ............................................................................. 1 2 9
Financial Information ................................................................. 1 7 5
Relationship with Our Controlling Shareholders ........................................... 2 1 3
Share Capital ........................................................................ 2 1 7
Substantial Shareholders ............................................................... 2 2 0
Directors and Senior Management ....................................................... 2 2 2
Future Plans and Use of Proceeds ....................................................... 2 3 5
Cornerstone Investors ................................................................ 2 3 8
Underwriting ........................................................................ 2 5 1
iii


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CONTENTS
Page
Structure of the Global Offering ........................................................ 2 6 1
How to Apply for Hong Kong Offer Shares ............................................... 2 6 9
Appendix I Accountants’ Report ........................................................ I - 1
Appendix IA Unaudited Interim Condensed Consolidated Financial Information ............... I A - 1
Appendix II Unaudited Pro Forma Financial Information ................................... I I - 1
Appendix III Taxation and Foreign Exchange ............................................. III-1
Appendix IV Summary of Principal Legal and Regulatory Provisions ......................... I V - 1
Appendix V Summary of Articles of Association ........................................... V - 1
Appendix VI Statutory and General Information .......................................... V I - 1
Appendix VII Documents Delivered to the Registrar of Companies and Available on Display ..... VII-1
iv


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SUMMARY
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. Moreover, there are risks associated with any investment. Some of the particular risks in
investing in the Offer Shares are set out in the section headed “Risk Factors.” You should read
the entire prospectus carefully before you decide to invest in the Offer Shares.
WHO WE ARE
We are a leading analog integrated circuit (“ IC”) company in China. We design, develop and
sell analog ICs and sensors that sense, amplify, convert and power, forming the fundamental building
blocks of all electronic systems. According to Frost & Sullivan, in terms of revenue in 2025, we ranked
first among domestic companies and eighth among global companies in the China analog IC market,
representing a market share of 1.8%.
Since our founding in 2007, we have developed a comprehensive and expanding product
portfolio that extends the reach of what electronics can achieve. With over 7,200 analog and sensor
products spanning 38 categories as of the Latest Practicable Date, we offer system-ready solutions
backed by robust design and process capabilities that shorten time-to-market. We deliver analog
advances that move customers forward in every generation of their designs and innovations. Having
long been core components in end markets such as industrial, networking and consumer electronics,
our products are also contributing to broader uptake in applications across electric vehicles (“ EVs”),
data centers, robotics, renewable energy and next-generation consumer devices.
OUR PRODUCTS
We offer a wide, differentiated portfolio of general-purpose and application-optimized analog
products, encompassing signal chain and power management, the twin pillars of our product matrix
that define our role as a major provider of analog ICs in China.
Our signal chain ICs help electronic devices interpret the physical world. They take signals that
come from sensors and prepare them for digital processing. Our signal chain ICs capture, condition and
amplify signals from the physical world and convert them into digital data with high accuracy. Our
products maintain data integrity from the point of acquisition to the final output, which is important for
applications that require precise measurement, low noise and minimal error.
Our power management ICs control how energy is delivered within an electronic device. They
determine how much power each part of a device receives, convert power into the levels required by
different components and distribute power safely through the system. They also guard against issues
such as surges or irregular power flow. By keeping power steady and well regulated, these products
help systems operate reliably and use energy efficiently.
Complementing our analog portfolio, we also provide a specialized range of sensors that mark
the entry point of connection between the real and digital worlds, delivering high-precision
measurement and monitoring of key environmental and physical parameters.
1


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SUMMARY
The following diagram illustrates the signal chain, power management and sensor within a
simplified electronic system:
Real World
Analog signal
acquisition
Sensor Amplifier ADC Central Processing Unit
&M e m o r y
Analog signal
amplification,
comparison, filtering,
etc.
Analog signal
converted to
digital signal
Digital signal
converted to
analog signal
Analog signal
amplification,
driving, and output
Continuous Analog Signal
Amplifier
DriverDAC
Digital World Real World
EEPROM
Power Management
Continuous Analog SignalDigital Signal (Discrete Binary Code) Digital Signal (Discrete Binary Code)
Block Diagram of Main Components in Electronic Systems
Our leadership in product offerings rests on several core strengths:
 A Comprehensive, Expanding Portfolio . We provide customers with a breadth of
differentiated analog ICs and sensors engineered to work cohesively out-of-the-box,
simplifying component selection and system-level architecture decisions. Among over
7,200 products, (i) 19 categories are signal chain products that cover the entire signal path
from acquisition and conditioning to conversion and transmission, including amplifiers,
comparators, analog switches, data converters and EEPROM, (ii) 17 categories are power
management products, such as DC/DC converters, low-dropout regulators (“ LDOs”),
AMOLED power supply ICs and lithium battery charging and protection ICs, and (iii) two
categories are sensors including temperature sensors and magnetic sensors. With an agile,
customer-centric innovation cycle, we maintain a rapid product rollout cadence, launching
approximately 3,400 new products during the Track Record Period and up to the Latest
Practicable Date.
 Forward-Leaning Analog Design . Our product development strategy focuses on
differentiated solutions that address critical gaps in high-performance analog markets,
particularly in applications requiring high voltage tolerance, high integration and novel
power delivery architectures. According to Frost & Sullivan, we have introduced a series
of analog products in China that advance performance, efficiency and system-level
capability, such as a 60nA ultra-low quiescent current synchronous buck converter, an
ultra-low-noise op amp with an input voltage noise density of 1.6 nanovolts per square
root hertz, an 18-bit SAR ADC with a sampling rate of 2 MSPS and a signal-to-noise ratio
(“SNR”) of 99 decibels, a high-accuracy Thermo-Electric Cooler (“ TEC”) controller and
Electro-absorption Modulated Laser (“EML”) bias power supply.
 High-Integrity Analog Performance . Our analog innovations achieve high precision,
minimal noise, high-speed response and low power consumption for high-performance
and high-reliability systems. They maintain consistent accuracy across wide operating
conditions, protect signal integrity in sensitive applications and respond swiftly to
time-critical operations. Engineered for energy efficiency, our analog products achieve
peak performance with minimal power draw, making them ideal for demanding
applications.
2


--- page 11 ---
SUMMARY
 System-Level Cost Optimization . Our products are optimized beyond mere datasheet
specifications to deliver lower total cost of ownership. We achieve this through premium
quality, inherent reliability and long lifecycle support, reducing the need for over-design
and mitigating field failure risks.
OUR TECHNOLOGY
Our technological edge derives from proprietary R&D in advanced circuit design and process
technologies, driving analog breakthroughs in signal and power integrity as well as system reliability
and safety across diverse applications.
 Solid Design Capabilities . Our design strengths deliver strong performance in
high-performance signal conditioning, efficient power management and advanced sensor
solutions to power next-generation electronic systems. The signal conditioning suite spans
high-precision, low-noise, high-speed, high-voltage and low-power analog functions,
delivering high fidelity and rapid responsiveness. In power management, we provide battery
charging and protection, display power and driver ICs, and high-efficiency DC/DC and LDO
products engineered for minimal quiescent current and compact footprints. For example, our
60nA ultra-low quiescent current DC/DC converter and 250nA ultra-low quiescent current
LDO, together with sub-millimeter LDO (0.63mm×0.63mm) and operational amplifier (op
amp) and comparator (0.8mm×0.8mm) exemplify leading low-power, high-efficiency and
miniaturized analog design, enabling precise performance in space- and energy-constrained
applications. We elevate the standard of analog integration with 2mm×2mm power modules
that integrate an inductor, capacitor and DC/DC converter to deliver outstanding power
efficiency in a minimal footprint. Our sensor technologies, including high-sensitivity
magnetic and high-precision temperature sensors, integrate signal processing, flexible output
interfaces and built-in calibration to deliver accuracy, stability and operational robustness in
rigorous environments.
 Proprietary Process Technology . We believe our proprietary process technology is a
strategic asset. By adapting foundry process recipes, we have developed processes that
deliver higher performance than standard flows, aligning with our broad product portfolio
and enabling us to serve diverse applications and markets without being tied to a single
process. We operate under a fabless model integrating our proprietary process expertise into
the standard fabless model. By fine-tuning key parameters across performance, yield and
cost, our products achieve the stringent requirements of precision-driven applications,
delivering high-level performance and improved power efficiency while scaling efficiently
from prototyping to high-volume manufacturing.
 Vast IP Repertoire . We have developed an extensive suite of analog products leveraging
proprietary IP and process technologies. For instance, we hold a patent for the single-
inductor, multiple-output (“ SIMO”) topology for power management ICs and AMOLED
displays, delivering multiple supply voltages from a single inductor with high efficiency, a
reduced board footprint and lower power dissipation. As of December 31, 2025, in China
and overseas, we had 588 granted patents, including 497 invention patents, and 401 IC
layout design registrations.
3


--- page 12 ---
SUMMARY
OUR DEMAND-DRIVEN GO-TO-MARKET STRATEGY
We leverage a land-and-expand model that deepens customer engagement through repeated
design wins across customer systems. Our early involvement during customer design-in cycles allows
us to establish technical credibility and commercial trust before securing design-win status. We
maintain disciplined, iterative processes for need capture and requirements translation, which enable us
to accurately interpret nuanced customer demands into precise engineering specifications and
performance benchmarks. Our sales, marketing and field application teams operate at the frontline,
continuously capturing industry trends and delivering a high-frequency stream of ground-level,
actionable insights that directly sharpen our R&D direction. By working alongside customers from
system specification to on-site validation, we accelerate deployment cycles, synchronize our roadmap
with customers’ next-generation systems and compress time-to-market windows. These long-term
engagements enable us to serve over 6,000 end customers in 2025, positioning us as a preferred partner
for end markets such as industrial & energy, automotive, networking & computing and consumer
electronics.
OUR MARKET OPPORTUNITIES
Our ability to bridge the real and digital worlds places us at the center of transformative
discoveries. The intelligence era is characterized by ubiquitous sensing, hyper-scale and edge
computing, artificial general intelligence and pervasive connectivity. These convergent forces are
reshaping the global economic and technological landscape, creating an arena where product
innovation and performance are paramount.
 Industrial & Energy . Emerging technologies such as predictive maintenance, digital
twins, smart grids and embodied AI in robotics and industrial machinery are ushering in a
new industrial era. These developments are driving expansion in the analog IC market for
the industrial & energy sector, which is estimated to reach RMB77.3 billion by 2030,
according to Frost & Sullivan. Our analog portfolio powers these industrial applications
with products continuously optimized on par with evolving demands. High-voltage, high-
current motor driver ICs enable precise, reliable control of robotic actuators and industrial
machinery, supporting greater efficiency, precision and autonomy on the factory floor and
across energy and infrastructure networks.
 Automotive. The automotive industry is shifting beyond electrification toward smart
mobility and connectivity, fueling growth in the automotive analog IC market to reach
RMB105.3 billion by 2030, with a CAGR of 16.9% from 2026 to 2030, according to Frost &
Sullivan. We support leading OEMs with a focused portfolio supporting LiDAR, radar,
camera power management, display drivers and body control modules (“ BCMs”). Our high-
side/low-side driver ICs, electronic fuses (“ eFuses”) and magnetic sensors enable robust
power switching, circuit protection and accurate position sensing for EVs and smart vehicles.
The portfolio meets stringent automotive-grade reliability and functional safety standards,
including ISO 26262 compliance, enabling advanced sensing and centralized E/E
architectures.
 Networking & Computing . Hyperscalers race to build next-generation data centers and
secure critical computing capacity, creating an execution gap where adoption is outpacing
the ability to deploy at scale. According to Frost & Sullivan, the analog IC market for the
networking & computing sector is forecasted to reach RMB132.7 billion by 2030, with a
CAGR of 15.8% from 2026 to 2030. Our eFuses, high-power DC/DC converters, multi-
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SUMMARY
phase DC/DC controllers and DrMOS enable efficient, high-current, fast-transient power
delivery for CPUs and microprocessors, while our high-precision clock management
devices (such as retimers) deliver timing synchronization in servers and high-speed
interconnect equipment.
 Consumer Electronics . The rise of AI-native consumer electronics is propelling the
consumer electronics analog IC market to an estimated RMB74.1 billion by 2030,
according to Frost & Sullivan. We deliver differentiated, high-performance analog
products characterized by ultra-low power and high integration. For example, our 60nA
DC/DC converters and 300nA op amps power wearables and AR/VR devices, such as
smart glasses, extend battery life and enhance immersion, while our low-noise, high-
fidelity op amps and audio digital-to-analog converters (“ DACs”) have become preferred
choices for leading customers in high-performance audio applications.
OUR FINANCIAL ACHIEVEMENTS
In 2023, 2024 and 2025, our revenue amounted to RMB2,615.7 million RMB3,347.0 million
and RMB3,898.1 million, respectively, representing a CAGR of 22.1% from 2023 to 2025. We
maintained sustainable profitability throughout the Track Record Period. Our gross profit margin was
44.9%, 47.2% and 46.2%, respectively. We recorded adjusted net profit (non-IFRS measure) of
RMB388.7 million, RMB576.0 million, and RMB693.5 million, respectively.
OUR STRENGTHS
Our strengths include:
 Comprehensive product portfolio powering wide adoption;
 Customer-centric, tech-powered innovation amplified by strategic synergy;
 Fabless model integrating proprietary process expertise with full-lifecycle quality
management;
 High-touch customer engagement fueling widespread adoption; and
 Expert-led team catalyzing innovation and growth.
See “Business — Our Strengths” for more details.
OUR STRATEGIES
Our strategies include:
 Advance R&D to lead in technology and market;
 Further expand analog portfolio for next-generation applications;
 Optimize our business model leveraging scalable supply chain;
 Deepen customer collaboration to power product innovation; and
 Pursue strategic expansion and alliances and expand overseas market reach.
See “Business — Our Strategies” for more details.
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SUMMARY
OUR BUSINESS MODEL
We operate under a fabless model integrating our proprietary process expertise into the
standard fabless model. This model is a strategic advantage that allows us to channel resources into
circuit design, system-level development and specialized analog processes, without incurring the
capital costs of owning fabrication facilities.
Our business model supports multiple proprietary process technologies for distinct product
families. We build know-how in critical areas such as high-voltage operation, ultra-low power
consumption, wide temperature range and precision analog design. Our know-how and processes also
support a smooth transition from prototyping to high-volume production, stabilizing our supply chain
and ensuring high-quality output. These designs are then produced via selected foundry partners and
OSAT providers. Our engineering samples undergo extensive validation, including performance,
reliability and compliance testing, in order to ensure they meet stringent industry standards before mass
production. Furthermore, as a part of our business model, we have established our own testing base to
develop our specialized testing capabilities and strengthen our technological foundation. Our testing
base is already capable of handling complex processes, such as the testing of high-precision ADC/
DAC products.
The business model enhances operational flexibility and agility and enables us to freely select
diverse process platforms and respond to evolving customer requirements and technology trends. See
“Business—Our Business Model” for more details.
OUR SALES NETWORK
We sell our products through a combination of distribution channels and direct sales. We
primarily rely on professional distributors to promote and sell our products. According to Frost &
Sullivan, engagement of distributors for the sales of products is in line with the industry norm in the
analog IC industry. During the Track Record Period, a majority of our revenue was generated from our
distributors. The table below sets forth a breakdown of revenue contribution by sales channels for the
years indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Distribution sales ................................. 2,388,799 91.3 2,999,044 89.6 3,609,911 92.6
Direct sales ...................................... 226,917 8.7 347,939 10.4 280,648 7.2
Others(1) ........................................ — — — — 7,496 0.2
Total ........................................... 2,615,716 100.0 3,346,983 100.0 3,898,055 100.0
(1) Others primarily include our technology services’ revenue.
See “Business—Our Sales Network” for more details.
OUR CUSTOMERS AND SUPPLIERS
During the Track Record Period, our customers primarily consisted of distributors and direct
sales customers. In 2023, 2024 and 2025, our five largest customers in each year during the Track
Record Period together generated RMB974.2 million, RMB1,190.0 million and RMB1,291.3 million
of revenue, respectively, accounting for 37.3%, 35.6% and 33.1% of our total revenue, respectively.
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SUMMARY
During the Track Record Period, our suppliers primarily consisted of foundries and OSAT
providers. In 2023, 2024 and 2025, purchases from our five largest suppliers in each year amounted to
RMB1,517.5 million, RMB1,919.6 million and RMB2,180.7 million, respectively. Purchases from our
five largest suppliers in each year of the Track Record Period accounted for 92.4%, 92.3% and 91.0%
of our total purchases, respectively.
See “Business—Supply Chain Management—Our Major Suppliers” and “Business—Our
Customers” for more details.
COMPETITION
Due to the wide range of application scenarios and the diversity of product categories, the
analog IC industry has developed into a fragmented market structure characterized by the coexistence
of multiple players. According to Frost & Sullivan, the market size of China’s analog IC market
increased from RMB157.0 billion in 2021 to RMB218.4 billion in 2025, and is expected to continue
expanding at a CAGR of 12.2% from 2026 to 2030, reaching RMB389.4 billion by 2030.
The principal competitive factors in our market include technological accumulation, a
comprehensive product portfolio, stable supply chain partnerships, and brand recognition. We have
demonstrated strong market competitiveness and are recognized as a leading domestic analog IC
company. See “Industry Overview—China’s Analog IC Market Competition Analysis—Rankings and
Market Share Analysis of Analog IC Companies” for more details. We remain focused on leveraging
our R&D capabilities and comprehensive product portfolio to enhance our position in the market.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables set forth summary financial data from our financial information during the
Track Record Period, extracted from the Accountants’ Report set out in Appendix I to this prospectus.
The summary financial data set forth below should be read together with, and is qualified in its entirety
by reference to, our financial statements in this prospectus, including the related notes. Our financial
information was prepared in accordance with IFRS.
Summary of Consolidated Statements of Profit or Loss
The following table sets forth a summary of our consolidated statements of profit or loss for the
years indicated.
Year Ended December 31,
2023 2024 2025
(RMB in thousands)
Revenue ................................................... 2,615,716 3,346,983 3,898,055
Cost of sales ................................................ (1,440,156) (1,766,139) (2,095,593)
Gross profit ................................................ 1,175,560 1,580,844 1,802,462
Other income and gains ........................................ 120,963 108,309 193,378
Selling and marketing expenses ................................. (198,571) (234,184) (258,450)
Administrative expenses ....................................... (91,409) (106,086) (125,874)
Research and development expenses ............................. (737,074) (870,747) (1,045,195)
Impairment losses on financial and contract assets, net ............... (1,677) (1,086) (2,457)
Other expenses .............................................. (3,697) (2,606) (9,527)
Finance costs ................................................ (2,277) (2,242) (11,996)
Share of (losses)/profits of associates ............................. (7,679) 12,581 7,549
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SUMMARY
Year Ended December 31,
2023 2024 2025
(RMB in thousands)
Profit before tax ............................................. 254,139 484,783 549,890
Income tax credit/(expense) .................................... 15,798 6,379 (15,515)
Profit for the year ........................................... 269,937 491,162 534,375
Non-IFRS Measure
To supplement our consolidated financial statements, which are presented in accordance with
IFRS Accounting Standards, we also use adjusted net profit (non-IFRS measure) as an additional
financial measure, which is not required by, or presented in accordance with, IFRS Accounting
Standards.
We define adjusted net profit (non-IFRS measure) as profit for the year, excluding equity-
settled share-based transactions. Equity-settled share-based transactions represent the non-cash
employee benefit expenses incurred in connection with our awards to key employees. Such expenses in
any specific period are not expected to result in future cash payments.
The following table sets forth a reconciliation of our profit for the year to adjusted net profit
(non-IFRS measure) for the years indicated.
Year Ended December 31,
2023 2024 2025
(RMB in thousands)
Profit for the year .................................................. 269,937 491,162 534,375
Add:
Equity-settled share-based transactions .............................. 118,791 84,836 159,113
Adjusted net profit for the year (non-IFRS measure) .................... 388,728 575,998 693,488
We believe that adjusted net profit (non-IFRS measure) provides useful information to
investors and others in understanding and evaluating our consolidated results of operations in the same
manner as they help our management. However, our non-IFRS measure does not have a standardized
meaning prescribed by IFRS Accounting Standards, and our presentation of adjusted net profit
(non-IFRS measure) may not be comparable to similarly titled measures presented by other companies.
The use of adjusted net profit (non-IFRS measure) has limitations as an analytical tool, and you should
not consider them in isolation from, or as a substitute for an analysis of, our results of operations or
financial condition as reported under IFRS Accounting Standards.
Profit for the Year
According to Frost & Sullivan, from 2022 to 2023, the analog IC market in China experienced a
temporary slowdown as weaker macroeconomic conditions led to softer end-market demand. The most
significant impact came from the consumer electronics sector, where shipments of smartphones, PCs and
other personal devices declined materially, resulting in reduced procurement by device manufacturers
and channel partners and moderating overall market growth during the period. In 2024 and 2025,
consumer electronics shipments began to recover, partially supported by AI-related infrastructure
upgrades, and the analog IC market accordingly resumed its growth trajectory. Looking ahead, driven by
the increasing adoption of AI applications, the global analog IC market is expected to reach
RMB927.0 billion by 2030, with a CAGR of 8.5% from 2026 to 2030, according to Frost & Sullivan.
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SUMMARY
During the Track Record Period, we recorded profit of RMB269.9 million, RMB491.2 million
and RMB534.4 million in 2023, 2024 and 2025, respectively. Our profit increased by 82.0% from
RMB269.9 million in 2023 to RMB491.2 million in 2024, mainly due to the market recovery. Our
profit increased by 8.8% from RMB491.2 million in 2024 to RMB534.4 million in 2025, mainly due to
the growth in the sales volume of our products in 2025 as a result of the recovery of the market.
Revenue by Product Type
The following table sets forth a breakdown of our revenue by product type, in absolute amounts
and as a percentage of the total revenue, for the years indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Power management ICs ............................ 1,746,024 66.8 2,181,660 65.2 2,379,834 61.1
Signal chain ICs .................................. 864,242 33.0 1,156,700 34.5 1,471,023 37.7
Others(1) ........................................ 5,450 0.2 8,623 0.3 47,198 1.2
Total ........................................... 2,615,716 100.0 3,346,983 100.0 3,898,055 100.0
(1) Others primarily include our revenue from our sensor products and technology services. Technology services represented the service fees
charged for providing customized development products for customers.
Revenue by Geographic Location
During the Track Record Period, we generated revenue from multiple regions, primarily
including Hong Kong, Chinese Mainland and Taiwan. The following table sets forth a breakdown of
our revenue by geographic market for the years indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Hong Kong ...................................... 1,358,701 51.9 1,484,881 44.4 1,921,049 49.3
Chinese Mainland ................................. 1,042,216 39.8 1,497,608 44.7 1,635,122 41.9
Taiwan ......................................... 91,117 3.5 134,205 4.0 171,691 4.4
Others(1) ........................................ 123,682 4.8 230,289 6.9 170,193 4.4
Total ........................................... 2,615,716 100.0 3,346,983 100.0 3,898,055 100.0
Note:
(1) Others primarily include our revenue from Singapore, Germany, South Korea and Japan.
Our revenue increased by 16.5% from RMB3,347.0 million in 2024 to RMB3,898.1 million in
2025, primarily attributable to an increase in our revenue generated from sales of signal chain ICs and
power management ICs, mainly due to the increased sales volume in line with the increasing demand
from end customers.
Our revenue increased by 28.0% from RMB2,615.7 million in 2023 to RMB3,347.0 million in
2024, primarily attributable to an increase in our revenue generated from sales of our products, mainly
due to the overall recovery of the analog IC industry.
Please see “Financial Information — Discussion of Results of Operations”, and “Financial
Information — Key Components of Our Consolidated Statements of Profit or Loss — Revenue —
Revenue by Product Type” for more details.
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SUMMARY
Gross Profit and Gross Margin
The following table sets forth our gross profit and gross margin for the years indicated.
Year Ended December 31,
2023 2024 2025
Gross
profit
Gross
margin
(%)
Gross
profit
Gross
margin
(%)
Gross
profit
Gross
margin
(%)
(RMB in thousands, except for percentages)
Power Management ICs .................... 804,899 46.1 1,043,112 47.8 1,103,655 46.4
Signal Chain ICs .......................... 490,188 56.7 675,015 58.4 855,738 58.2
Others(1) ................................. 2,408 44.2 4,388 50.9 26,328 55.8
Subtotal ................................. 1,297,495 49.6 1,722,515 51.5 1,985,721 50.9
Impairment loss of Inventories ............... 108,634 128,851 169,828
Tax and others ............................ 13,301 12,820 13,431
Total ................................... 1,175,560 44.9 1,580,844 47.2 1,802,462 46.2
(1) Others primarily include our sensor products and technology services.
During the Track Record Period, we maintained high gross margin primarily driven by our
continuous introduction of new products and high-performance products and keeping cost-effectiveness.
Besides, we continuously invest in R&D and have established a broad product portfolio. Among them,
our signal chain ICs and high-end power management ICs, due to their higher technological barriers,
demonstrated more favorable gross margins in the corresponding business.
Our gross profits and gross margins largely depend on our product mix, the competition we faced,
the supply-demand balance in the analog IC market and general market conditions. Our gross profit and
gross margin improved from 2023 to 2024, primarily due to the overall recovery of the analog IC industry
where there was a rebound in product demand. Our overall gross margin was 47.2% in 2024 and 46.2% in
2025, remaining at a relatively stable level.
Please see “Financial Information — Discussion of Results of Operations” and “Financial
Information — Key Components of Our Consolidated Statements of Profit or Loss — Gross Profit and
Gross Margin” for more details.
Summary of Consolidated Statements of Financial Position
The following table sets forth our consolidated balance sheets as of the dates indicated.
As of December 31,
2023 2024 2025
(RMB in thousands)
Non-current assets
Property, plant and equipment .................................... 545,191 691,094 711,825
Other intangible assets .......................................... 33,743 52,837 85,978
Right-of-use assets ............................................. 61,747 52,060 38,837
Goodwill ..................................................... 80,875 78,692 301,277
Deferred tax assets ............................................. 161,791 175,896 151,264
Investments in associates ........................................ 423,360 508,329 555,364
Time deposits ................................................. 10,182 379,427 371,754
Financial assets at fair value through profit or loss ..................... 109,163 121,849 115,991
Other non-current assets ......................................... 32,336 20,321 23,371
Total non-current assets ........................................ 1,458,388 2,080,505 2,355,661
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SUMMARY
As of December 31,
2023 2024 2025
(RMB in thousands)
Current assets
Inventories .................................................... 901,367 1,164,817 1,448,216
Trade and bills receivables at amortised cost ......................... 166,472 232,764 362,830
Trade and bills receivables at fair value through other comprehensive
income ..................................................... — — 2 6 0
Contract assets ................................................. — — 2,084
Prepayments, other receivables and other assets ....................... 86,236 100,084 137,634
Financial assets at fair value through profit or loss ..................... 769,093 1,378,000 1,340,087
Cash and cash equivalents ........................................ 1,303,007 813,194 1,181,028
Time deposits ................................................. — — 81,810
Restricted cash ................................................. 22,289 1,755 44,540
Total current assets ............................................ 3,248,464 3,690,614 4,598,489
Current liabilities
Trade payables ................................................. 264,141 316,000 400,910
Other payables and accruals ...................................... 321,780 478,419 470,629
Interest-bearing bank borrowings .................................. — 36,579 329,729
Lease liabilities ................................................ 17,884 19,565 12,752
Contract liabilities .............................................. 14,894 18,307 18,389
Total current liabilities ......................................... 618,699 868,870 1,232,409
Net current assets ............................................. 2,629,765 2,821,744 3,366,080
Total assets less current liabilities ................................ 4,088,153 4,902,249 5,721,741
Non-current liabilities
Interest-bearing bank borrowings .................................. — 34,121 67,172
Lease liabilities ................................................ 26,992 14,370 7,767
Deferred tax liabilities ........................................... 50,240 56,726 54,799
Other payables and accruals ...................................... 45,581 72,071 8,703
Deferred income ............................................... 71,516 75,701 68,195
Other non-current liabilities ...................................... 50,000 50,000 187,999
Total non-current liabilities ..................................... 244,329 302,989 394,635
Net assets .................................................... 3,843,824 4,599,260 5,327,106
Equity
Share capital .................................................. 469,487 473,450 620,063
Reserves ..................................................... 3,381,060 4,135,777 4,674,322
Equity attributable to owners of the parent ........................... 3,850,547 4,609,227 5,294,385
Non-controlling interests ......................................... (6,723) (9,967) 32,721
Total equity .................................................. 3,843,824 4,599,260 5,327,106
We recorded net assets of RMB3,843.8 million, RMB4,599.3 million and RMB5,327.1 million
as of December 31, 2023, 2024 and 2025, respectively. We also recorded net current assets of
RMB2,629.8 million, RMB2,821.7 million and RMB3,366.1 million as of December 31, 2023, 2024
and 2025, respectively, which were primarily due to the growth of our business scale.
Our net assets increased from RMB3,843.8 million as of December 31, 2023 to
RMB4,599.3 million as of December 31, 2024, primarily attributable to the combination of (i) our
profit for the year ended December 31, 2024 of RMB491.2 million, and (ii) our equity-settled share-
based payment schemes of RMB214.3 million in 2024. Our net assets increased from
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SUMMARY
RMB4,599.3 million as of December 31, 2024 to RMB5,327.1 million as of December 31, 2025,
primarily due to the combination of (i) our profit for the year of RMB534.4 million, (ii) equity-settled
share-based payment schemes of RMB227.2 million, and (iii) share-based payment of
RMB159.1 million in 2025. Please see the “Consolidated Statements of Changes in Equity” to the
Accountants’ Report included in Appendix I to this prospectus.
Our net current assets increased from RMB2,821.7 million as of December 31, 2024 to
RMB3,366.1 million as of December 31, 2025, primarily due to (i) an increase of RMB283.4 million
in inventories, and (ii) an increase of RMB367.8 million in cash and cash equivalents, partially offset
by (i) an increase of RMB84.9 million in trade payables, and (ii) an increase of RMB293.2 million in
interest-bearing bank borrowings.
Our net current assets increased from RMB2,629.8 million as of December 31, 2023 to
RMB2,821.7 million as of December 31, 2024, primarily due to (i) an increase of RMB263.5 million
in inventories, (ii) an increase of RMB608.9 million in financial assets at fair value through profit or
loss, and (iii) an increase of RMB66.3 million in trade and bills receivables, partially offset by (i) a
decrease of RMB489.8 million in cash and cash equivalents, (ii) an increase of RMB51.9 million in
trade payables, and (iii) an increase of RMB156.6 million in other payables and accruals.
Summary of the Consolidated Statements of Cash Flows
The following table sets forth our selected cash flow data for the years indicated.
Year Ended December 31,
2023 2024 2025
(RMB in thousands)
Net cash flows from operating activities ............................ 161,796 534,149 434,379
Net cash flows used in investing activities .......................... (541,119) (1,248,316) (432,709)
Net cash flows from financing activities ............................ 39,315 214,004 384,746
Net increase/(decrease) in cash and cash equivalents ................ (340,008) (500,163) 386,416
Cash and cash equivalents at beginning of the year ................... 1,638,363 1,303,007 813,194
Effect of foreign exchange rate changes, net ......................... 4,652 10,350 (18,582)
Cash and cash equivalents at end of the year ...................... 1,303,007 813,194 1,181,028
Key Financial Indicators
The following table sets forth our selected financial indicators for the years and as of the dates
indicated.
As of or for the year ended
December 31,
2023 2024 2025
Revenue growth rate ................................................... (17.9)% 28.0% 16.5%
Net debt-to-equity ratio (1) ............................................... (11.4)% 7.8% 8.4%
Current ratio(2) ........................................................ 5 . 3 4 . 2 3 . 7
Quick ratio(3) ......................................................... 3 . 8 2 . 9 2 . 6
(1) Net debt-to-equity ratio equals total liabilities net of cash and cash equivalents at the end of the year divided by total equity at the end of
the year.
(2) Current ratio was calculated based on current assets of the respective year divided by current liabilities.
(3) Quick ratio equals the current assets (excluding inventories) divided by current liabilities as of the date indicated.
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SUMMARY
RISK FACTORS
Our operations and the Global Offering involve certain risks and uncertainties, which are set
out in the section headed “Risk Factors” in this prospectus. You should read that section in its entirety
carefully before you decide to invest in our Shares. Some of the major risks we face include:
 Our business growth and prospects are affected by our ability to continuously innovate and
iterate our existing products and to expand our product mix.
 Our inability to continuously develop our analog IC design and other technological
capabilities could render our products uncompetitive and obsolete, which may impede our
ability to address the requirements in technology segments expected to drive our growth.
 Our business operates in a knowledge-intensive industry, and our failure to attract and
retain talent could weaken our core competitiveness and adversely affect our business.
 We depend on a limited number of third-party suppliers to manufacture our products.
 We have been and intend to continue investing significantly in R&D activities, which may
adversely affect our profitability and operating cash flow and may not generate the results
we expect to achieve.
 The industry in which we operate is highly competitive. If we fail to compete against other
market players, our business, financial condition and results of operations may be
materially and adversely affected.
 Our business and results of operations are subject to general macroeconomic conditions
and the inherent cyclicality of the semiconductor industry.
 The markets for our products may not grow as anticipated, and we may be unable to
capitalize on growth opportunities.
 We may not be able to implement our growth plan and our business and results of
operations may be adversely affected.
 Our failure to obtain, maintain and enforce adequate protection for our intellectual
property and proprietary technology could adversely affect our business, financial
condition, results of operations, competitive position and prospects.
OUR CONTROLLING SHAREHOLDERS
By virtue of the Concert Party Agreement and the Supplemental Agreement to the Concert
Party Agreement, Hongshun Xiangtai, Baoli Hongya, Power Trend, Dr. Zhang, Ms. Zhang, Mr. Lin
Lin and Ms. Wen Li, directly or indirectly, controlled an aggregate of 221,512,150 Shares, representing
approximately 35.67% of the voting rights in our Company as at the Latest Practicable Date.
Immediately after completion of the Global Offering, Hongshun Xiangtai, Baoli Hongya, Power Trend,
Dr. Zhang, Ms. Zhang, Mr. Lin Lin and Ms. Wen Li will in aggregate be entitled to exercise
approximately 32.82% of the voting rights in the Company (assuming that the Over-allotment Option
is not exercised and no other changes are made to the issued share capital of our Company between the
Latest Practicable Date and the Listing). Accordingly, Hongshun Xiangtai, Baoli Hongya, Power
Trend, Dr. Zhang, Ms. Zhang, Mr. Lin Lin and Ms. Wen Li will constitute a group of our Controlling
Shareholders upon the completion of the Global Offering.
For further details about our Controlling Shareholders, please see “Relationship with our
Controlling Shareholders.”
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SUMMARY
DIVIDENDS
During the Track Record Period, we declared and paid cash dividends to our Shareholders as
follows.
Year Ended December 31,
2023 2024 2025
(RMB in thousands)
Dividends declared .................................................... 107,846 47,073 95,062
As of the Latest Practicable Date, we had paid these dividends in full. On April 20, 2026, we
declared dividends of RMB124.1 million, which have not been fully paid.
We do not have formal dividend policy or any pre-determined dividend payout ratio. Pursuant
to the Articles of Association and in accordance with the PRC laws and regulations, such as the PRC
Company Law (
) and the No. 3 Guideline for the Supervision of Listed
Companies—Cash Dividend Distribution of Listed Companies (2025 Revision) (ˏ
ୋ3ߎ2025͍)), we shall, where specific conditions are met, distribute cash
dividends in an amount not less than 10% of the distributable profits recorded in the current year after
making up for losses and making the required appropriations to statutory reserves and surplus reserves.
Any future determination to pay dividends will be made at the discretion of our Directors and
the approval at our Shareholders’ meetings and may be based on a number of factors, including our
future operations and earnings, capital requirements, general financial condition, and other factors that
our Directors may deem relevant.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commissions, and other fees
incurred in connection with the Global Offering. We recorded listing expenses of nil, nil and
RMB20.4 million (including deferred listing expenses) in 2023, 2024 and 2025, respectively, which
were not charged to our consolidated statements of profit or loss during the Track Record Period.
The estimated total listing expenses (based on the maximum Offer Price and assuming that the
Over-allotment Option is not exercised) for the Global Offering are approximately RMB87.9 million
(equivalent to approximately HK$101.0 million), accounting for approximately 2.2% of our gross
proceeds from the Global Offering. The estimated total listing expenses consist of (i) underwriting-
related expenses (including but not limited to commissions and fees) of approximately
RMB48.1 million (approximately HK$55.2 million), and (ii) non-underwriting related expenses of
approximately RMB39.9 million (approximately HK$45.8 million), which consist of fees and expenses
of legal advisers and Reporting Accountants of approximately RMB23.4 million (approximately
HK$26.8 million), and other fees and expenses of approximately RMB16.5 million (approximately
HK$19.0 million). Approximately RMB80.6 million (equivalent to approximately HK$92.6 million) of
the estimated listing expenses is directly attributable to the issue of new Shares to the public and will
be accounted for as a deduction from equity upon completion of the Global Offering. Approximately
RMB7.3 million (equivalent to approximately HK$8.4 million) is expected to be charged in profit or
loss before or upon completion of the Global Offering. This calculation is subject to adjustment based
on the actual amount incurred or to be incurred. The listing expenses above are the best estimate as of
the Latest Practicable Date and are for reference only. The actual amount may differ from such an
estimate.
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SUMMARY
OFFERING STATISTICS
All statistics in the following table are based on the assumptions that (i) the Global Offering has
been completed and 54,001,200 H Shares are issued pursuant to the Global Offering, (ii) the Over-
allotment Option is not exercised, and (iii) 675,015,824 Shares are issued and outstanding following
the completion of the Global Offering:
Based on the maximum Offer Price of
HK$85.20 per H Share
Market capitalization of our Shares upon the completion of the Global
Offering (1) .................................................... H K $ 81,999.4 million
Unaudited pro forma adjusted net tangible asset per Share (2) .............. H K $ 15.04
Notes:
(1) The calculation of market capitalization of our Shares is based on 621,014,624 A Shares in issue as of the Latest Practicable Date and
54,001,200 H Shares expected to be issued immediately following the completion of the Global Offering (assuming the Over-allotment
Option is not exercised). The calculation of market value of the A shares is based on the average closing price of the A Shares of
RMB108.49 per A Share for the five business days immediately preceding the Latest Practicable Date.
(2) The unaudited pro forma adjusted net tangible assets per Share is arrived at after adjustments referred to in “Appendix II — Unaudited
Pro Forma Financial Information” in this prospectus. No other adjustment has been made to the unaudited pro forma adjusted
consolidated net tangible assets to reflect any trading results of the Group from December 31, 2025 to the Latest Practicable Date and the
increase in the Group’s equity arising from the exercise of share options by employees to subscribe 951,610 Shares (the difference
between the 675,015,824 shares used in deriving the market capitalization and 674,064,214 shares used in deriving the pro forma net
tangible asset per share) after December 31, 2025. Had the exercise of the stock options been taken into account, the unaudited pro forma
adjusted consolidated net tangible assets per Share as at December 31, 2025 would have been HK$15.10, respectively, on the basis that
54,001,200 Shares were in issue at indicative Offer Prices of HK$85.20 per Offer Share, assuming that the exercise of share options and
the Offering had been completed on December 31, 2025, without taking into account any shares which may be allotted and issued upon
the exercise of the Over-allotment Option.
(3) No adjustment has been made to reflect any trading results or other transactions of the Group entered into subsequent to December 31,
2025.
OUR LISTING ON THE SHENZHEN STOCK EXCHANGE AND REASONS FOR THE
LISTING ON THE STOCK EXCHANGE
Since the Company’s listing on the ChiNext of the Shenzhen Stock Exchange in 2017 and up to the
Latest Practicable Date, we had not received any notice from the Shenzhen Stock Exchange alleging any
non-compliance incidents on the part of the Company or our subsidiaries, and we had no instances of
material non-compliance with the rules of the Shenzhen Stock Exchange and other applicable securities
laws and regulations of the PRC in any material respects, and, to the best knowledge of our Directors
having made all reasonable enquiries, there was no material matter that should be brought to the investors’
attention in relation to our compliance record on the Shenzhen Stock Exchange.
Our PRC Legal Adviser is of the view that during the Track Record Period, we have not been
subject to any material administrative penalties or regulatory measures imposed by the CSRC or the
Shenzhen Stock Exchange.
Based on the independent due diligence conducted by the Joint Sponsors, nothing has come to
the Joint Sponsors’ attention that would cause them to disagree with the Directors’ confirmation with
regard to the compliance records of the Company on the Shenzhen Stock Exchange in any material
respects.
Our Company seeks to be listed on the Stock Exchange in order to further advance our
globalization strategy, allow better access to the international market, enhance our capabilities to
attract more overseas investors and optimize our international brand image, which in turn may further
enhance our overall competitiveness.
15


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SUMMARY
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$4,499.9 million, after deducting estimated underwriting commissions, fees and expenses payable
by us in connection with the Global Offering, assuming the maximum Offer Price of HK$85.20 per
H Share, and assuming the Over-allotment Option is not exercised.
In line with our strategies, we intend to use the net proceeds for the following purposes, subject
to changes in light of our evolving business needs and changing market conditions:
 Approximately 60.0% of the net proceeds, or HK$2,699.9 million, are expected to be used
to enhance our R&D capabilities and expand our product portfolio over the next five
years.
 Approximately 26.0% of the net proceeds, or HK$1,170.0 million, are expected to be used
for strategic investment and/or acquisitions aimed at integrating industry resources.
 Approximately 6.0% of the net proceeds, or HK$270.0 million, are expected to be used for
expanding overseas sales network, particularly enhancing sales and marketing capabilities
in Europe, Japan, South Korea, and Singapore over the next five years.
 Approximately 8.0% of the net proceeds, or HK$360.0 million, will be allocated to
working capital and general corporate purposes.
See “Future Plans and Use of Proceeds” for more details relating to our future plans and use of
proceeds from the Global Offering.
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Recent Development
We continued to expand our business post December 31, 2025, primarily driven by the overall
improvement in market demand, which led to broad-based growth in the sales of products across our
product categories, as well as a favorable shift in our product mix toward higher-margin products.
In the first quarter of 2026, we launched a number of new high-performance products,
including high-precision low-noise op amps, low-power comparators in CSP packages, multi-channel
ADCs/DACs, high-precision digital power-monitoring AFEs, high-performance clock buffers, high-
speed analog switches, level shifters, interface circuits, various battery management ICs, 65V high-
voltage buck converters, low-power high-efficiency 9A boost converters, 15A load switches,
60V eFuses, 60V N-Channel MOSFETs, highly efficient 8-string white LED driver, highly integrated
PMICs, high-side and low-side driver ICs, motor driver ICs and others. In particular, for the
automotive electronics market, we have continuously launched new signal chain ICs, power
management ICs and sensors products that have obtained automotive-grade certification, thereby
empowering the development of the intelligent automotive industry. These new products, launched in
response to market trends and customer demand, are expected to support the continued growth of our
operating performance.
Unaudited Financial Information for the Three Months Ended March 31, 2026
Our revenue increased by 39.1% from RMB789.6 million for the three months ended
March 31, 2025 to RMB1,098.1 million for the three months ended March 31, 2026. This growth was
16


--- page 25 ---
SUMMARY
primarily attributable to an increase in our revenue generated from sales of signal chain ICs and power
management ICs, mainly due to the continued introduction of new and high-end products, the
expansion of our product applications and our customer base, which drove the growing demand from
end customers.
 Power Management ICs : Our revenue from sales of power management ICs increased by
41.9% from RMB466.6 million for the three months ended March 31, 2025 to
RMB662.1 million for the three months ended March 31, 2026. This increase was
primarily attributable to the rapid growth in the market demand for our power
management ICs.
 Signal Chain ICs : Our revenue from sales of signal chain ICs increased by 33.8% from
RMB316.5 million for the three months ended March 31, 2025 to RMB423.7 million for
the three months ended March 31, 2026. The increase was primarily due to the rapid
growth in the market demand for our signal chain ICs, backed by their premium quality.
Our cost of sales increased from RMB439.8 million for the three months ended March 31, 2025
to RMB600.3 million for the three months ended March 31, 2026, which was generally in line with our
business growth. As a result, our gross profit increased by 42.3% from RMB349.8 million to
RMB497.8 million, and our overall gross margin was 44.3% for the three months ended March 31,
2025 and 45.3% for the three months ended March 31, 2026, remaining at a relatively stable level.
Our profit for the period increased by 109.3% from RMB58.7 million for the three months
ended March 31, 2025 to RMB122.8 million for the same period of 2026, primarily attributable to our
revenue growth driven by increased sales volume in 2026. Our net profit margin was increased from
7.4% for the three months ended March 31, 2025 to 11.2% for the same period of 2026, reflecting our
steady improvement in profitability.
Our total assets increased from RMB6,954.2 million as of December 31, 2025 to
RMB7,187.0 million as of March 31, 2026, in line with our business growth. As our business
expanded, our total liabilities increased from RMB1,627.0 million as of December 31, 2025 to
RMB1,685.7 million as of March 31, 2026. Our net assets increased from RMB5,327.1 million as of
December 31, 2025 to RMB5,501.3 million as of March 31, 2026, primarily attributable to the increase
in net profit.
For the three months ended March 31, 2026, net cash generated from operating activities was
RMB45.4 million, primarily attributable to our profit before tax of RMB124.4 million, as adjusted for
(i) certain non-cash or non-operating items, primarily including (a) depreciation of property, plant and
equipment of RMB40.2 million, and (b) share-based payment expenses of RMB41.7 million; and
(ii) changes in working capital, which primarily consists of (a) an increase in inventories of
RMB143.9 million, and (b) a decrease in other payables and accruals of RMB98.5 million.
Our unaudited condensed consolidated interim financial information for the three months ended
March 31, 2026 has been reviewed by our Reporting Accountant in accordance with International
Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the
Independent Auditor of the Entity” issued by the International Auditing and Assurance Standards
Board. See Appendix I-A to this prospectus for more details.
17


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SUMMARY
No Material Adverse Change
Our Directors have confirmed that there has been no material adverse change in our financial or
trading position or prospects since December 31, 2025, the end date of our latest consolidated financial
statements as set out in “Appendix I—Accountants’ Report” to this prospectus, and up to the date of
this prospectus.
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DEFINITIONS
In this prospectus, unless the context otherwise requires, the following terms and
expressions shall have the meanings set out below. Certain other terms are explained in
“Glossary of Technical Terms.”
“A Share(s)” the ordinary share(s) in the share capital of our Company
with a nominal value of RMB1.00 each, which is/are traded
in Renminbi and listed on the Shenzhen Stock Exchange
“A Shareholder(s)” holder(s) of the A Share(s)
“Accountants’ Report” the accountants’ report of our Company, the text of which
is set out in Appendix I to this prospectus
“affiliate(s)” with respect to any specified person, any other person,
directly or indirectly, controlling or controlled by or under
direct or indirect common control with such specified
person
“AFRC” the Accounting and Financial Reporting Council of
Hong Kong
“Articles of Association” or “Articles” the articles of association of our Company, as amended,
which shall become effective on the Listing Date, a
summary of which is set out in Appendix V to this
prospectus
“associate(s)” has the meaning ascribed to it under the Listing Rules
“Audit Committee” the audit committee of our Board
“Baoli Hongya” Chongqing Baoli Hongya Enterprise Management Co., Ltd.
(
ʮ̡), formerly named as
Beijing Baoli Hongya Investment Management Co., Ltd.
(
ப΂ʮ̡), a limited liability
company established under the Laws of the PRC on
March 17, 2011, and one of our Controlling Shareholders
“Board” or “Board of Directors” the board of Directors of our Company
“business day” a day on which banks in Hong Kong are generally open for
normal business to the public and which is not a Saturday,
Sunday or public holiday in Hong Kong
“Capital Market Intermediary(ies)” the capital market intermediaries as named in “Directors
and Parties Involved in the Global Offering”
“CCASS” the Central Clearing and Settlement System established and
operated by HKSCC
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DEFINITIONS
“China,” “Chinese Mainland” or “PRC” the People’s Republic of China and for the purpose of this
prospectus only, unless the context otherwise requires,
excludes Hong Kong, the Macau Special Administrative
Region of the People’s Republic of China and Taiwan,
China
“Concert Party Agreement” the concert party agreement dated June 10, 2015, which
was entered into by Dr. Zhang, Ms. Wen Li, Hongshun
Xiangtai, Baoli Hongya, Ms. Zhang, Power Trend, Mr. Lin
Lin and Harbin Junlin Investment Consulting Company
Limited (
ʮ̡)
“F&S”, “Frost & Sullivan” or “Industry
Consultant”
Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., our
industry consultant, an independent market research and
consulting company
“close associate(s)” has the meaning ascribed to it under the Listing Rules
“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
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong), as amended, supplemented or otherwise
modified from time to time
“Company,” “our Company” or “the
Company”
SG Micro Corp (
ʮ̡), a joint
stock company incorporated under the laws of the PRC
with limited liability on January 26, 2007, the A Shares of
which have been listed on the Shenzhen Stock Exchange
(stock code: 300661.SZ)
“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
“Controlling Shareholder(s)” has the meaning ascribed to it under the Listing Rules and
unless the context otherwise requires, refers to Hongshun
Xiangtai, Baoli Hongya, Power Trend, Dr. Zhang,
Ms. Zhang, Mr. Lin Lin (
؍؍and Ms. Wen Li, further
details of which are set out in “Relationship with Our
Controlling Shareholders”
“core connected person(s)” has the meaning ascribed to it under the Listing Rules
“Corporate Governance Code” the Corporate Governance Code set out in Appendix C1 to
the Listing Rules
20


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DEFINITIONS
“CSDC” China Securities Depositary and Clearing Corporation
Limited (ப΂ʮ̡)
“CSRC” China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ၍
ึ)
“Director(s)” or “our Director(s)” the director(s) of our Company
“EIT” PRC enterprise income tax
“EIT Law” Enterprise Income Tax Law of the PRC (
ʕശɛ͏΍ձ਷
), as amended, supplemented or otherwise
modified from time to time
“end customer(s)” the final recipients, users, or beneficiaries of the company’s
products or services, distinguished from intermediaries,
distributors, or wholesalers who purchase products for
resale
“Exchange Participant” a person (a) who, in accordance with the Listing Rules of
the Stock Exchange, may trade on or through the Stock
Exchange; and (b) whose name is entered in a list, register
or roll kept by the Stock Exchange as a person who may
trade on or through the Stock Exchange
“Extreme Conditions” 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
“FINI” “Fast Interface for New Issuance,” an online platform
operated by HKSCC that is mandatory for admission to
trading and, where applicable, the collection and processing
of specified information on subscription in and settlement
for all new listings
“General Rules of HKSCC” General Rules of HKSCC published by the Stock Exchange
and as amended from time to time and where the context so
permits, shall include the HKSCC Operational Procedures
“Global Offering” the Hong Kong Public Offering and the International
Offering
“Group,” “our Group,” “we” or “us” our Company and our subsidiary from time to time
21


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DEFINITIONS
“Guide for New Listing Applicants” the Guide for New Listing Applicants issued by the Stock
Exchange, as amended, supplemented or otherwise
modified from time to time
“H Share(s)” the ordinary share(s) in the share capital of our Company
with a nominal value of RMB1.00 each, which will be
subscribed for and traded in Hong Kong dollars and listed
on the Stock Exchange
“H Share Registrar” Tricor Investor Services Limited
“HK eIPO White Form ” the application for Hong Kong Offer Shares to be issued in
the applicant’s own name by submitting applications online
through the designated website at www.hkeipo.hk
“HK eIPO White Form Service
Provider”
the HK eIPO White Form service provider designated by
our Company as specified on the designated website at
www.hkeipo.hk
“HK$” or “Hong Kong dollars” Hong Kong dollars, the lawful currency of Hong Kong
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC EIPO” the application for the Hong Kong Offer Shares to be
issued in the name of HKSCC Nominees and deposited
directly into CCASS to be credited to your 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 an HKSCC
Participant to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer
Shares on your behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary of
HKSCC
“HKSCC Operational Procedures” the Operational Procedures of HKSCC in relation to
CCASS containing the practices, procedures and
administrative requirements relating to operations and
functions of CCASS, 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” the Hong Kong Special Administrative Region of the PRC
22


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DEFINITIONS
“Hong Kong Offer Shares” the 5,400,200 H Shares (subject to reallocation as described
in “Structure of the Global Offering”) initially offered by
our Company for subscription at the Offer Price pursuant to
the Hong Kong Public Offering
“Hong Kong Public Offering” the offering of the Hong Kong Offer Shares for
subscription by the public in Hong Kong at the Offer Price,
on and subject to the terms and conditions described in
“Structure of the Global Offering—The Hong Kong Public
Offering”
“Hong Kong Stock Exchange” or
“Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly-
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“Hong Kong Underwriters” the underwriters listed in “Underwriting—Hong Kong
Underwriters,” being the underwriters of the Hong Kong
Public Offering
“Hong Kong Underwriting Agreement” the underwriting agreement dated June 16, 2026, relating to
the Hong Kong Public Offering entered into by, among
others, our Company, the Joint Sponsors, the Overall
Coordinators and the Hong Kong Underwriters, as further
described in “Underwriting—Underwriting Arrangements
and Expenses—Hong Kong Public Offering—Hong Kong
Underwriting Agreement”
“Hongshun Xiangtai” Chongqing Hongshun Xiangtai Enterprise Management
Co., Ltd. (
ʮ̡), formerly named
as Beijing Hongda Yongtai Investment Management Co.,
Ltd. (
ப΂ʮ̡), a limited
liability company established under the Laws of the PRC
on March 17, 2011, and one of our Controlling
Shareholders
“IFRS” the International Financial Reporting Standards, which
include standards, amendments and interpretations
promulgated by the International Accounting Standards
Board and the International Accounting Standards and
interpretation issued by the International Accounting
Standards Committee
“independent third party(ies)” entity(ies) or person(s) that is/are not connected person(s)
of our Company or its subsidiary
23


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DEFINITIONS
“International Offer Shares” the 48,601,000 H Shares (subject to reallocation and the
exercise of the Over-allotment Option as described in
“Structure of the Global Offering”) initially offered by our
Company pursuant to the International Offering
“International Offering” the conditional placing of the International Offer Shares by
the International Underwriters at the Offer Price outside the
United States in offshore transactions in reliance on
Regulation S, on and subject to the terms and conditions of
the International Underwriting Agreement, as further
described in “Structure of the Global Offering—The
International Offering”
“International Underwriters” the international underwriters that are expected to enter into
the International Underwriting Agreement to underwrite the
International Offering
“International Underwriting Agreement” the underwriting agreement relating to the International
Offering expected to be entered into on or around the Price
Determination Date by, among others, our Company, the
Overall Coordinators and the International Underwriters, as
further described in “Underwriting—Underwriting
Arrangements and Expenses—The International
Offering—International Underwriting Agreement”
“Joint Bookrunners” “Joint Global
Coordinators” “Joint Lead
Managers”
the joint bookrunners, the joint global coordinators and the
joint lead managers as named in “Directors and Parties
Involved in the Global Offering”
“Joint Sponsors” the joint sponsors as named in “Directors and Parties
Involved in the Global Offering”
“Latest Practicable Date” June 8, 2026, being the latest practicable date for the
purpose of ascertaining certain information contained in
this prospectus prior to its publication
“Listing” the listing of the H Shares on the Main Board of the Stock
Exchange
“Listing Committee” the listing committee of the Stock Exchange
“Listing Date” the date expected to be on or about Friday, June 26, 2026,
on which the H Shares are listed and from which dealings
therein are permitted to take place on the Main Board of the
Stock Exchange
“Listing Rules” the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited, as amended,
supplemented or otherwise modified from time to time
24


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DEFINITIONS
“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
“MOF” the Ministry of Finance of the PRC (
݁
௅)
“MOFCOM” the Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷ਠ
ਕ௅)
“Dr. Zhang” Dr. Zhang Shilong ( ੵ˰Ꮂ), chairman of the Board,
executive Director and general manager of the Company
and one of our Controlling Shareholders
“Ms. Zhang” Ms. Zhang Qin (
ੵා), the deputy chairwoman of the
Board, executive Director, deputy general manager and the
secretary to the Board of the Company and one of our
Controlling Shareholders
“NDRC” National Development and Reform Commission of the
PRC (
ึ)
“Nomination Committee” the nomination committee of our Board
“Offer Price” the final price per Offer Share in Hong Kong dollars
(exclusive of brokerage of 1.0%, AFRC transaction levy of
0.00015%, SFC transaction levy of 0.0027% and Stock
Exchange trading fee of 0.00565%) at which the Offer
Shares are to be subscribed for or purchased pursuant to the
Global Offering, to be determined as described in
“Structure of the Global Offering—Pricing and Allocation”
“Offer Share(s)” the Hong Kong Offer Share(s) and/or the International
Offer Share(s), as the context may require, together with
any additional H Shares which may be allotted and issued
pursuant to the exercise of the Over-allotment Option
“Over-allotment Option” the option granted by our Company to the International
Underwriters, exercisable by the Overall Coordinators (for
themselves and on behalf of the International Underwriters)
pursuant to the International Underwriting Agreement, to
require our Company to allot and issue up to an aggregate
of 8,100,100 additional H Shares at the Offer Price,
representing approximately 15% of the Offer Shares
initially available under the Global Offering, to cover,
among other things, over-allocations in the International
Offering, if any, the details of which are described in
“Structure of the Global Offering—Over-allotment Option”
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DEFINITIONS
“Overall Coordinators” the overall coordinators as named in “Directors and Parties
Involved in the Global Offering”
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ), the central
bank of the PRC
“Power Trend” Power Trend International Development Limited (਷ყ
ʮ̡), a private limited company incorporated
under the laws of Hong Kong on February 8, 2011, and one
of our Controlling Shareholders
“PRC Company Law” Company Law of the PRC (
), as
amended, supplemented or otherwise modified from time to
time
“PRC GAAP” Generally accepted accounting principles of the PRC
“PRC Government” or “State” the central government of the PRC, including all
governmental subdivisions (including principal, municipal
and other regional or local government entities) and
instrumentalities
“PRC Legal Adviser” JunHe LLP, our legal adviser as to PRC law
“PRC Securities Law” the Securities Law of the PRC (
ʕശɛ͏΍ձ਷ᗇՎ
), as amended, supplemented or otherwise modified
from time to time
“Price Determination Agreement” the agreement to be entered into by our Company and the
Overall Coordinators (for themselves and on behalf of the
Underwriters) on the Price Determination Date to record
and fix the Offer Price
“Price Determination Date” the date, expected to be on or about Wednesday, June 24,
2026, and in any event no later than 12:00 noon on
Wednesday, June 24, 2026, on which the Offer Price is to
be fixed for the purposes of the Global Offering
“prospectus” this prospectus being issued in connection with the Hong
Kong Public Offering
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration and Appraisal Committee” the remuneration and appraisal committee of our Board
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“SAFE” the State Administration of Foreign Exchange of the PRC
(
̮ි၍ଣ҅)
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DEFINITIONS
“SAMR” State Administration for Market Regulation of the PRC ( ʕ
̹ఙ္ຖ၍ଣᐼ҅)
“ Sanctions Legal Adviser” Jun He Law Offices LLC and JunHe LLP, the legal adviser
as to sanctions law to the Company
“SAT” State Administration of Taxation of the PRC ( ʕശɛ͏΍ձ
೼ਕᐼ҅)
“SFC” Securities and Futures Commission of Hong Kong
“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Shanghai-Hong Kong Stock Connect” a securities trading and clearing links program developed
by the Stock Exchange, Shanghai Stock Exchange, HKSCC
and CSDC for mutual market access between Hong Kong
and Shanghai
“Share(s)” ordinary share(s) in the share capital of our Company with
a nominal value of RMB1.00 each, comprising our
A Share(s) and H Share(s)
“Share Incentive(s)” restricted stock(s) and/or stock option(s) granted under the
Share Incentive Plans (as the case may be)
“Share Incentive Plans” the share incentive plans of our Company currently in
effect, namely, the 2021 Share Incentive Plan, the 2022
Share Incentive Plan, the 2023 Share Incentive Plan, the
2025 Share Incentive Plan and the 2025 Second Tranche
Share Incentive Plan
“Shareholder(s)” holder(s) of the Share(s)
“Shenzhen-Hong Kong Stock Connect” a securities trading and clearing links program to be
developed by the Stock Exchange, Shenzhen Stock
Exchange, HKSCC and CSDC for mutual market access
between Hong Kong and Shenzhen
“Stabilizing Manager” China International Capital Corporation Hong Kong
Securities Limited
“State Council” State Council of the PRC (
ʕശɛ͏΍ձ਷਷ਕ৫)
“subsidiary(ies)” has the meaning ascribed to it under the Listing Rules
“substantial Shareholder(s)” has the meaning ascribed to it under the Listing Rules
27


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DEFINITIONS
“Supplemental Agreement to the
Concert Party Agreement”
the supplemental agreement to the Concert Party
Agreement dated January 21, 2021, which was entered into
by Dr. Zhang, Ms. Wen Li, Hongshun Xiangtai, Baoli
Hongya, Ms. Zhang, Power Trend, Mr. Lin Lin and
Shanghai Shanyu Corporate Management Consulting
Company Limited (
ʮ̡)
(formerly known as Harbin Junlin Investment Consulting
Co., Ltd. (
ʮ̡))
“Takeovers Code” the Codes on Takeovers and Mergers and Share Buy-backs
issued by the SFC, as amended, supplemented or otherwise
modified from time to time
“Track Record Period” the three years ended December 31, 2025
“Trial Measures for Overseas Listing” Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Companies (
ྤʫΆุ
), as amended,
supplemented or otherwise modified from time to time
“U.S.” or “United States” the United States of America, its territories and
possessions, any State of the United States, and the District
of Columbia
“U.S. dollar” or “US$” United States dollar, the lawful currency of the United
States
“U.S. Securities Act” United States Securities Act of 1933 and the rules and
regulations promulgated thereunder, as amended,
supplemented or otherwise modified from time to time
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“VAT” value-added tax
“2021 Share Incentive Plan” the 2021 Restricted Stock Incentive Plan (“2021
׌
ྌ”), the principal terms of which are set out in
“Appendix VI — Statutory and General Information —
Share Incentive Plans” to this prospectus
“2022 Share Incentive Plan” the 2022 Stock Option Incentive Plan (“2022
ୃಂᛆዧ
ྌ”), the principal terms of which are set out in
“Appendix VI — Statutory and General Information —
Share Incentive Plans” to this prospectus
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DEFINITIONS
“2023 Share Incentive Plan” the 2023 Stock Option Incentive Plan (“2023ୃಂᛆዧ
ྌ”), the principal terms of which are set out in
“Appendix VI — Statutory and General Information —
Share Incentive Plans” to this prospectus
“2025 Second Tranche Share Incentive
Plan”
the 2025 Second Tranche Stock Option Incentive Plan
(“2025
ྌ”), the principal terms of
which are set out in “Appendix VI — Statutory and
General Information — Share Incentive Plans” to this
prospectus
“2025 Share Incentive Plan” the 2025 Stock Option Incentive Plan (“2025
ୃಂᛆዧ
ྌ”), the principal terms of which are set out in
“Appendix VI — Statutory and General Information —
Share Incentive Plans” to this prospectus
“%” per cent
For ease of reference, the names of Chinese laws and regulations, governmental authorities,
institutions, natural persons or other entities (including our subsidiaries) have been included in this
prospectus in both the Chinese and English languages and in the event of any inconsistency, the
Chinese versions shall prevail.
Certain amounts and percentage figures included in this prospectus have been subject to
rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation
of the figures preceding them. Any discrepancies in any table or chart between the total shown and the
sum of the amounts listed are due to rounding.
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GLOSSARY OF TECHNICAL TERMS
In this prospectus, unless the context otherwise requires, explanations and definitions of
certain terms used in this prospectus in connection with our Company and our business shall
have the meanings set out below. The terms and their meanings may not always correspond to
standard industry meaning or usage of these terms.
“AC” alternating current, an electrical current that periodically
reverses direction
“ADC” or “analog-to-digital
converter”
a converter that changes analog signals into digital data
“ADAS” advanced driver-assistance systems, electronic systems in a
vehicle that use sensors and software to assist a driver with
driving and parking functions
“AEC-Q100” a failure mechanism-based reliability test qualification for
packaged ICs established by the Automotive Electronics
Council for use in automotive applications
“AI” artificial intelligence
“AMR” anisotropic magnetoresistance, a magnetic field detection
technology based on resistance changes due to electron
alignment
“AMOLED” active-matrix organic light-emitting diode, a display
technology using an organic compound layer that emits
light when an electric current is applied
“amplifier” or “AMP” an electronic device or circuit that increases the power,
voltage, or current of a signal
“analog IC” IC that transmits, transforms, processes, amplifies,
measures and displays analog signals, including analog
signal ICs and mixed-signal ICs
“AR/VR” augmented reality/virtual reality; AR overlays computer-
generated images on a user’s view of the real world, while
VR replaces the user’s real-world environment with a
simulated one
“ASIC” application-specific IC, a type of IC that is customized to
the needs of a specific application
“AspenCore” a global media group serving the electronics industry and
technology community with news, analysis, and data,
whose publications include EE Times and EDN
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GLOSSARY OF TECHNICAL TERMS
“BCD” a monolithic integration process technology that allows for
the integration of Bipolar, CMOS, and DMOS, enabling
robust and power-efficient ICs
“BCM” body control module, an electronic control unit in a vehicle
responsible for controlling various body electronics
functions, such as lighting, power windows, and door locks
“BMS” battery management system, an electronic system
embedded within NEVs that monitors, controls and
optimizes the performance, safety and longevity of the
vehicle’s battery pack
“CAGR” growth rate, referring to the year-over-compound annual
year growth rate, which is calculated by taking the nth root
of the total percentage growth rate over a specified period
of time. The formula for calculating CAGR is: (Ending
Value/Beginning Value)^(1/number of years)-1
“CMOS” complementary metal-oxide-semiconductor, a technology
for manufacturing ICs known for low static power
consumption
“CPU” central processing unit, the central unit in a computer
containing the logic circuitry that performs the instructions
of a computer program
“DAC” or “digital-to-analog
converter”
a converter translating digital signals into analog form
“DC/DC” converts direct current from one voltage level to another
“Delta-Sigma ADC” a type of ADC architecture that uses oversampling and
noise-shaping to achieve high resolution, suited for precise
measurement of low-frequency signals
“DrMOS” driver-MOSFET, a type of highly integrated power device
combining a gate driver and power MOSFETs in a single
package
“E/E Architecture” electrical/electronic architecture, the overall layout of a
vehicle’s electrical and electronic systems, including
ECUs, sensors, and wiring
“ECU” electronic control unit, a generic term for any embedded
system in automotive electronics that controls one or more
electrical systems in a vehicle
“EDA” electronic design automation tools, a category of software
tools used for designing electronic systems such as
integrated circuits and printed circuit boards
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GLOSSARY OF TECHNICAL TERMS
“EEPROM” electrically erasable programmable read-only memory, a
type of non-volatile memory that can be electrically erased
and reprogrammed in-circuit, commonly used for storing
small amounts of data that must be retained without power
“eFuse” electronic fuse, a circuit protection device designed to
protect electronic circuits from overcurrent conditions,
which is resettable
“ESD/TVS” electrostatic discharge/transient voltage suppressor, devices
designed to protect electronic circuits from damage caused by
sudden and momentary electric currents or voltage spikes
“ESS” energy storage system, a system that captures energy for
later use, often referring to battery-based systems that store
electrical energy
“EV” electric vehicle, a vehicle powered by one or more electric
motors, using energy stored in rechargeable batteries
“fabless” a business model where a company designs and sells
semiconductor chips while outsourcing the fabrication to a
specialized foundry
“field effect transistor” a semiconductor component that controls the current in the
output circuit by leveraging the electric field effect in the
input circuit
“foundry” a manufacturer specializing in the manufacture of ICs for
other companies
“frequency” the rate at which a power electronic device, such as a
switch or rectifier, operates. It is a crucial factor
influencing the performance and efficiency of power
systems
“GaN” gallium nitride, a binary III/V direct bandgap
semiconductor well-suited for high-power transistors
capable of operating at high temperatures
“high-performance computing” the practice of aggregating computing power to deliver
much higher performance than a typical desktop computer
“Hz” hertz, a measurement of frequency
“IC” or “integrated circuit” a small electronic device made of semiconductor materials
like silicon that contains multiple interconnected electronic
components such as transistors, resistors, and capacitors on
a single chip
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GLOSSARY OF TECHNICAL TERMS
“IoT” internet of things, the network of physical objects
embedded with sensors and software to connect and
exchange data over the internet
“Iq” quiescent current, the current consumed by an electronic
circuit in a quiet state with no load. A low Iq is critical for
extending battery life in battery-powered devices
“ISO 26262” an international standard for functional safety of electrical
and/or electronic systems in production automobiles
“LCD” liquid crystal display, a flat-panel display technology that
uses the light-modulating properties of liquid crystals,
typically in conjunction with a backlight, to produce
images
“LDO” low dropout regulator, a type of linear voltage regulator
that can operate with a very small input-to-output voltage
differential
“LED” light-emitting diode, a semiconductor diode that emits light
when voltage is applied
“LiDAR” light detection and ranging, a remote sensing method that
uses a pulsed laser to measure ranges to objects
“MOSFET” metal-oxide-semiconductor field-effect transistor, a type of
transistor used for amplifying or switching electronic
signals
“MSCI” Morgan Stanley Capital International, a global provider of
investment decision support tools, including stock market
indices, portfolio analytics, and ESG research and ratings
for companies
“MSPS” mega samples per second, a unit of sampling rate for ADCs
“NEV” new energy vehicle, a term referring to vehicles that are
fully or partially powered by electricity
“on-board charger” a device in an EV that converts AC power from an external
source to DC power to charge the vehicle’s battery
“OEM” original equipment manufacturer, a company that produces
parts and equipment that may be marketed by another
manufacturer
“operational amplifier” or “op
amp”
a DC-coupled electronic voltage amplifier with a
differential input and typically a single-ended output. It
amplifies the voltage difference between its two inputs
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GLOSSARY OF TECHNICAL TERMS
“OSAT” outsourced semiconductor assembly and test
“OSAT provider” or “packaging
and testing provider”
outsourced semiconductor assembly and test provider, a
provider that provides third-party IC packaging and testing
services, abbreviated as packaging and testing provider
“PD/QC” power delivery and quick charge, which are widely adopted
fast-charging protocols that allow for higher power to be
delivered to devices, reducing charging times
“Pipeline ADC” a high-speed ADC with a multi-stage structure that
achieves high-speed data conversion through staged
processing
“PLC” programmable logic controller, an industrial computer used
to automate electromechanical processes by monitoring
inputs from sensors and controlling outputs such as motors
and actuators based on a user program
“power management unit” an IC that consolidates and manages the power supply for
various components within an electronic system
“point-of-load Converter” a DC/DC converter placed very close to the circuit it is
powering to reduce power loss and improve voltage
regulation
“PSRR” power supply rejection ratio, a measure of a circuit’s ability
to reject noise from its power supply voltage
“R&D” research and development
“RF” radio frequency, a range of electromagnetic wave
frequencies used for wireless communication
“SAR ADC” successive-approximation-register ADC, a type of ADC
that converts an analog waveform to a digital
representation via a binary search, offering a balance of
speed, resolution, and power consumption
“semiconductor” a material, such as silicon, which has an electrical
conductivity between that of a conductor and an insulator
“sensor” a component or device that measures or detects the state of
the real world, such as motion, heat or light, and converts
the conditions into analog or digital signals
“SiC” silicon carbide, a wide-bandgap semiconductor composed
of silicon and carbon, ideal for high-power applications
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GLOSSARY OF TECHNICAL TERMS
“signal chain” the path an analog signal takes through a system from
acquisition to processing, typically including components
for signal conditioning and data conversion
“SIMO” single-inductor, multiple-output, a DC/DC converter
architecture that uses a single inductor to generate multiple
regulated output voltages
“SNR” signal-to-noise ratio, a measure that compares the level of a
desired signal to the level of background noise
“SSD” solid-state drive, a data storage device that uses integrated
circuit assemblies to store data persistently
“tape-out” the final stage of the IC design process, where the finalized
design data is sent to a semiconductor foundry for wafer
manufacturing
“TEC” thermoelectric cooler, a solid-state heat pump that transfers
heat from one side of the device to the other when direct
current is applied, used for precise cooling of electronic
components
“TDFN” thin dual flat no leads, a type of small, leadless surface-
mount package for integrated circuits, characterized by its
low profile and contact pads on the underside of the
package
“total harmonic distortion” a measurement of the harmonic distortion present in a
signal
“Tier-1” automotive system integrator(s), company(ies) that
supply(ies) assembled components or systems directly to
OEMs. Tier-1 suppliers need to work closely with OEMs
during the design and development stages of vehicles,
ensuring the integration of their components into the final
product
“V” basic unit of voltage
“voltage” electrical potential difference between two points in a
circuit
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FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements and information that relate to our current
expectations and views of future events. These forward-looking statements are contained principally in
“Summary,” “Risk Factors,” “Industry Overview,” “Business,” “Financial Information” and “Future
Plans and Use of Proceeds.” These statements relate to events that involve known and unknown risks,
uncertainties and other factors, including those listed in “Risk 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.
In some cases, these forward-looking statements can be identified by words or phrases such as
“may,” “might,” “ought to,” “project,” “seek,” “will,” “would,” “expect,” “anticipate,” “aim,”
“estimate,” “intend,” “could,” “should,” “consider,” “plan,” “believe,” “predict,” “project,” “potential,”
“continue,” “outlook,” “schedule,” “going forward,” “is/are likely to” or other similar expressions.
These forward-looking statements include, among other things, statements relating to:
 our operations and business prospects;
 our financial condition and performance;
 our capital expenditure plan;
 our ability to maintain good relationships with our business partners;
 future developments, trends and conditions (including economic, political and business
conditions) in the industries and markets in which we operate or plan to operate;
 changes to the regulatory environment in the industries and markets in which we operate;
 the actions and developments of our competitors;
 the ability of third parties to perform in accordance with contractual terms and
specifications;
 our ability to retain senior management and key personnel and recruit qualified staff;
 our ability to control or reduce costs;
 our ability to control our risks;
 our financial condition and performance, debt levels and capital needs;
 our dividend policy;
 various business opportunities that we may pursue;
 our business strategies, objectives and plans and our ability to achieve these strategies;
 changes or volatility in interest rates, foreign exchange rates, equity prices or other rates or
prices, including those pertaining to the PRC and the industry and markets in which we
operate; and
 capital market developments.
These forward-looking statements are subject to risks, uncertainties and assumptions, some of
which are beyond our control. In addition, these forward-looking statements reflect our current views
with respect to future events and are not a guarantee of future performance. 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 risk factors set out in “Risk Factors.”
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FORWARD-LOOKING STATEMENTS
The forward-looking statements made in this prospectus relate only to events or information as
of the date on which the statements are made in this prospectus. Except as required by law, we
undertake no obligation to update or revise publicly any forward-looking statements, whether as a
result of new information, future events or otherwise, after the date on which the statements are made
or to reflect the occurrence of unanticipated events. You should read this prospectus completely and
with the understanding that our actual future results or performance may be materially different from
what we expect.
In this prospectus, statements of, or references to, our intentions or those of any of our
Directors are made as of the date of this prospectus. Any of these intentions may change in light of
future development.
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RISK FACTORS
An investment in our H Shares involves various risks. You should carefully consider all of
the information in this prospectus, including the risks and uncertainties described below, as well
as our financial statements and the related notes, and the “Financial Information” section, before
deciding to invest in our H Shares. Our operations involve certain risks and uncertainties, some
of which are beyond our control and may cause you to lose all or part of your investments in our
H Shares. The following is a description of what we consider to be our material risks. Any of the
following risks could have a material adverse effect on our business, financial condition, results
of operations and growth prospects. In any such event, the market price of our Shares could
decline, and you may lose all or part of your investment. These factors are contingencies that may
or may not occur, and we are not in a position to express a view on the likelihood of any such
contingency occurring. The information given is as of the Latest Practicable Date unless
otherwise stated, will not be updated after the date hereof, and is subject to the cautionary
statements in “Forward-looking Statements” in this prospectus.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
Our business growth and prospects are affected by our ability to continuously innovate and
iterate our existing products and to expand our product mix.
Our business growth significantly depends on our ability to continue to innovate and improve
our existing products and expand our product mix. To remain competitive, we must maintain and
enhance our core technologies to meet end market needs, technological advancements and industry
standards. Product design, development, innovation and iteration are often a complex, time-consuming
and costly process involving significant investment in R&D with no assurance of return on investment.
There can be no assurance that we will be able to accurately grasp market trends and customer needs
and develop and introduce new and improved products in a timely or efficient manner or that new and
improved products will achieve market acceptance.
Moreover, our products are used in a variety of end markets and applications. Technological
advancements and new industry standards in these end markets may affect the application requirements
of our end customers and their products. If we fail to develop new products or refine our technologies
to match the different or additional requirements of our end customers, the sale of our products may
decrease, and our business, financial condition and results of operations may be adversely affected.
Industry competitors continuously upgrade their product portfolios, which may render our
products less attractive or even obsolete. There can be no assurance that our core technologies and
products will maintain their competitiveness in the future compared to products developed by our
competitors. Our growth is also dependent on our ability, and that of our distributors, to identify and
penetrate new markets where we and our distributors have limited experience, but where significant
investments and technological advancements are required to compete effectively. There can be no
assurance that the markets we serve and/or target based on our business strategy will grow in the
future, and that our existing and new products will meet the requirements of these markets.
Our inability to continuously develop our analog IC design and other technological capabilities
could render our products uncompetitive and obsolete, which may impede our ability to address
the requirements in technology segments expected to drive our growth.
We are committed to continuous R&D for both new and existing products and technologies,
enabling us to timely respond to technological developments in the markets we operate in. The
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RISK FACTORS
development of advanced analog ICs is an inherently complex and lengthy process that involves
significant engineering effort and long development cycles. We believe it is essential to continue to
invest a significant amount of time and resources in our design and R&D efforts, including retaining a
sufficient and number of experienced R&D talent, to maintain and improve our competitive position. If
the anticipated benefits of these investments are not realized, or are delayed, our revenue and operating
results may be adversely affected.
Furthermore, if we are unable to respond quickly and effectively to technological
developments, we may lose our competitive position, and our products or technologies may become
obsolete. If we fail to develop new products or refine our technologies to match evolving or additional
requirements of our end customers, the sale of our products may decrease, and our business, financial
condition and results of operations may be adversely affected.
Our business operates in a knowledge-intensive industry, and our failure to attract and retain
talent could weaken our core competitiveness and adversely affect our business.
As our business operates in a knowledge-intensive industry, our talent is a cornerstone of our
core competitiveness. Our ability to maintain continuous innovation, operational efficiency and market
advantage depends on the collective expertise of our integrated teams across R&D, operations and
sales. The market for qualified personnel is highly competitive.
If we fail to establish and maintain effective incentive systems, clear career development paths,
or a positive corporate culture, we may be unable to attract or retain the talent necessary for our
operations. The loss of key personnel or difficulty in recruiting new talent could weaken our
competitive position and disrupt our operations. Furthermore, a significant increase in employee
turnover could result in increased recruitment and training costs, and may harm the productivity of our
remaining employees. Finding suitable replacements and integrating them into our operations and
corporate culture requires significant time and resources, and there is no guarantee that we can do so
effectively or in a timely manner.
We cannot assure you that we will be able to retain existing employees or attract sufficient
qualified personnel to meet our business needs. Failure to do so could adversely affect our business,
financial condition and results of operations.
We depend on a limited number of third-party suppliers to manufacture our products.
During the Track Record Period, we relied on a limited number of third-party suppliers,
including foundries and OSAT providers, to manufacture our products. Purchases from our five largest
suppliers in each year during the Track Record Period accounted for 92.4%, 92.3% and 91.0% of our
total purchase amount for the years ended December 31, 2023, 2024 and 2025, respectively. See
“Business—Supply Chain Management—Our Major Suppliers” for more details.
Our reliance on these major suppliers subjects us to concentration and counterparty risks. We
cannot assure you that we will maintain our relationships with our major suppliers in the future.
Moreover, we cannot guarantee that our major suppliers will not have a change of business scope or
business model or will continue to maintain their market position and reputation. Any material adverse
change to the financial condition and results of operations of our major suppliers may result in a
material adverse impact on their business with us.
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RISK FACTORS
If a disaster or other business disruption were to occur at any of our foundries’ or OSAT
providers’ facilities, procuring and transitioning to new suppliers would take a significant period of
time to complete and would likely adversely affect our inventory, business, financial condition and
results of operations. Moreover, any shortage of raw materials used by our foundries and OSAT
providers may result in a shortage in the supply of our products. Therefore, we are vulnerable to the
risk that our current foundries and OSAT providers may be unable to meet our demand.
Moreover, increased regulation or stakeholder expectations regarding responsible sourcing
practices could raise our compliance costs. Any failure by our foundries and OSAT providers to
comply with such regulations or meet these expectations could generate negative publicity that
adversely affects our reputation. Given that we do not directly control the procurement or employment
practices of our suppliers, we could be subject to financial or reputational risks arising from their
conduct. To the extent we are unable to manage these risks, our ability to timely supply competitive
products will be compromised, our costs will increase, and our business, financial condition and results
of operations will be adversely affected.
We have been and intend to continue investing significantly in R&D activities, which may
adversely affect our profitability and operating cash flow and may not generate the results we
expect to achieve.
We invest in R&D activities to develop and introduce new and enhanced products. For the
years ended December 31, 2023, 2024 and 2025, our R&D expenses amounted to RMB737.1 million,
RMB870.7 million and RMB1,045.2 million, respectively, accounting for 28.2%, 26.0%, and 26.8% of
our total revenue for the respective years. The industry in which we operate is subject to rapid
technological innovations. To expand our product portfolio and to remain competitive in the industry,
we need to continue investing significant resources in R&D activities. As a result, we may continue to
incur significant R&D expenses in the future.
However, we cannot guarantee that our efforts will be successful or deliver the effects,
functions or benefits we expect. R&D activities are inherently uncertain. We may not be able to obtain
sufficient resources, including R&D personnel and R&D equipment, to support the R&D of new or
enhanced products. Even if we succeed in our R&D efforts and generate the results we expect, we may
still encounter practical difficulties in commercializing our R&D outcomes. R&D activities are time-
consuming and by the time our products are due for commercialization, new technologies could render
our products obsolete, in which case we may not be able to recover related R&D costs, which could
result in a decline in our revenue, profitability and market share.
Even if our R&D efforts successfully result in the development and commercialization of new
products, these efforts may not contribute to our future results of operations within our expected time
frame, or at all. The success and profitability of our new products are subject to various factors such as
market demand, macroeconomic conditions or the pace of technological advancement, which are
beyond our control. Therefore, the contributions from our R&D efforts may not meet our expectations
or even cover the costs of such efforts, which would materially and adversely affect our business,
financial condition, results of operations and competitive position.
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RISK FACTORS
The industry in which we operate is highly competitive. If we fail to compete against other
market players, our business, financial condition and results of operations may be materially and
adversely affected.
The analog IC industry in which we operate is highly competitive. We primarily compete with
other companies that focus on developing and commercializing analog ICs. If we compete with players
that have a longer operating history than we do, or if we do not have or in the future gain more
financial resources and sophisticated technological capabilities and broader customer base and
relationships than our competitors, we may not be able to respond as quickly and effectively to new
opportunities, technologies, industry standards, customer demand or regulatory requirements as our
competitors.
We may also face competition from new entrants who may offer competitive products at lower
prices in the future. Such new entrants may increase industry competition and adversely influence the
sales, prices, and profit margins of our products and our market share. Further, we may be required to
make substantial additional investments in research, development, marketing and sales, recruiting and
retaining talent, and acquiring technologies complementary to, or necessary for, our current and future
products in order to respond to such potential competition, and we cannot assure you that such
measures will be effective.
If we are unable to compete successfully, or if competing successfully requires us to take costly
actions in response to the actions of our competitors, our business, financial condition and results of
operations may be materially and adversely affected.
Our business and results of operations are subject to general macroeconomic conditions and the
inherent cyclicality of the semiconductor industry.
Our business and results of operations are susceptible to fluctuations in general macroeconomic
conditions. Our customers’ demand for our products is dependent on overall economic activity and
consumer and business sentiment. Unfavorable economic conditions could reduce overall consumer
purchasing power and business investment. A sustained economic downturn could therefore lead to a
reduction in demand for our products, which would materially and adversely affect our revenue and
profitability. In addition, adverse changes in trade policy may also affect our performance.
Furthermore, the analog IC industry, in which we operate, is characterized by significant
cyclical fluctuations. These cycles are driven by a variety of factors, including shifts in end-market
demand, the timing of major technological advancements, fluctuations in capital expenditure by
industry participants, and inventory adjustments throughout the supply chain.
A downturn in the broader economy could coincide with or exacerbate a cyclical trough in the
semiconductor industry, creating a compounded negative effect on our sales volumes and margins. We
cannot assure you that we can effectively manage these risks. Any prolonged or significant downturn
in the general economy or our industry could have a material and adverse effect on our business,
financial condition and results of operations.
The markets for our products may not grow as anticipated, and we may be unable to capitalize
on growth opportunities.
Our business, financial condition, results of operations and prospects depend in part on our
ability to make timely investments in the correct market opportunities. We are pursuing opportunities
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RISK FACTORS
primarily in the analog IC market where it is difficult to predict the timing and size of the opportunities
for each of our products, particularly in end markets such as industrial & energy, automotive,
networking & computing and consumer electronics.
Even if the end markets grow substantially, we cannot assure you that we will be able to pursue
these opportunities. The markets in which we operate are constantly evolving. If one or more of these
markets undergo a shift in customer demand, or if we fail to meet evolving technological developments
and industry standards, our products may not be able to compete effectively or be integrated into our
end customers’ commercialized products.
Any deterioration in, or a slowdown in the growth of, such end markets could result in a
substantial decrease in the demand for our products. If we fail to accurately predict market trends and
effectively capitalize on growth opportunities, our business, financial condition, results of operations
and prospects could be materially and adversely affected.
We may not be able to implement our growth plan and our business and results of operations
may be adversely affected.
The success of our business expansion depends on our ability to efficiently execute our growth
plan. We plan to continue our independent innovation and R&D, extend the end markets and
applications of our products, expand into overseas markets and cultivate our talent team. Diversifying
our product portfolio requires significant R&D efforts and expenses, and we may not be able to
successfully upgrade our existing or develop new products.
To effectively manage our growth, we need to:
 monitor and control our expenses and investments in anticipation of expanded operations;
 improve our supply chain to support our growth;
 enhance our administrative infrastructure and systems;
 refine our talent management structure and recruit additional key personnel;
 improve our operational, financial and management internal controls and reporting
systems;
 comply with different or additional laws and regulations; and
 timely address unforeseen challenges as they arise.
Our current and planned structures, systems and policies may not be adequate to support the
long-term growth of our operations. If we fail to effectively and successfully manage our growth, our
expenses may increase and we may not respond to challenges or execute our business strategies in a
timely manner due to factors beyond our control.
We may not be able to develop business relationships with potential customers in our industry.
If we or our distributors fail to identify and leverage new business opportunities, we may not be able to
establish and expand our presence in additional end markets on our own or through our distributors.
In addition, developing overseas markets requires significant investment, which may adversely
impact our current performance. We may not be able to identify profitable overseas markets. Even if
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we identify profitable overseas markets, we may not be able to enter into or compete effectively due to
factors including, but not limited to:
 our or our distributors’ limited business experience in the overseas markets;
 competition from local competitors with greater resources and more favorable market
positions;
 different demand dynamics for our products;
 the diversity of end-customer preferences and demand, and our ability to anticipate or
respond to them;
 compliance with applicable laws and regulations; and
 potentially adverse tax consequences.
Any of such circumstances could adversely affect our reputation, business, financial condition
and results of operations.
Our failure to obtain, maintain and enforce adequate protection for our intellectual property and
proprietary technology could adversely affect our business, financial condition, results of
operations, competitive position and prospects.
Our success depends in a large part on our ability to protect our proprietary technology as well
as our products from competition by obtaining, maintaining and enforcing our intellectual property
rights, including patent rights. We have been protecting the proprietary technologies that we consider
commercially important by, among others, filing patent applications in China and other jurisdictions.
As of December 31, 2025, we had 588 granted patents in China and overseas, including 497 invention
patents, as well as several other intellectual properties including but not limited to IC layout design
registrations in China and overseas. See “Business—Intellectual Property Rights” for more details. The
intellectual property application process may be expensive and time-consuming, and we may not be
able to file and prosecute all necessary or desirable intellectual property applications at a reasonable
cost or in a timely manner, if at all. In addition, we may, however, fail to identify patentable aspects of
our R&D outputs before it is too late to obtain patent protection. As a result, we may not be able to
prevent competitors from developing and commercializing competitive products in all such fields.
Even if we have identified, filed and prosecuted our intellectual property applications, our
applications may not be granted or our intellectual property may be invalidated for multiple reasons,
including known or unknown prior deficiencies in the intellectual property application or the lack of
novelty of the underlying technology. Moreover, the patent position of analog IC providers like us may
be uncertain because it involves complex legal and factual considerations. As such, we cannot assure
you that we will be able to discern the scope of the intellectual property protection or obtain adequate
intellectual property protection with respect to our products.
In addition to patents, we rely on proprietary information (such as trade secrets, know-how and
confidential information) to protect intellectual property that we believe is best protected by means that
do not require public disclosure. We seek to protect this information by entering into confidentiality
agreements with our employees, consultants, and other third parties. However, these agreements may
be breached or otherwise fail to prevent disclosure or misappropriation of our proprietary information,
and may not provide an adequate remedy in the event of unauthorized use. Moreover, our proprietary
information may otherwise become known or be independently developed by our competitors.
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Defending our intellectual property and proprietary technology can be challenging. We may
face claims of infringement or misappropriation of other parties’ proprietary rights. Whether or not
these claims are successfully asserted, we would likely incur significant costs and diversion of our
resources with respect to the defense of these claims.
Any of the foregoing could materially and adversely affect our business, financial condition,
results of operations, competitive position and prospects.
We may be involved in intellectual property litigation and disputes, which could be costly and
time-consuming, and an adverse outcome could materially and adversely affect our business,
financial condition and results of operations.
Competitors may infringe our patent rights or misappropriate or otherwise violate our
intellectual property rights. To counter such infringement or unauthorized use, litigation may be
necessary to enforce or defend our intellectual property rights, to protect our trade secrets or to
determine the validity and scope of our own intellectual property rights. This can be expensive and
time-consuming. Any claims that we assert against perceived infringers could also result in these
parties asserting counterclaims against us alleging that we infringe their intellectual property rights. An
adverse result in any such litigation proceeding could put our patents at risk of being invalidated, held
unenforceable or interpreted narrowly.
Separately, as the industry in which we operate is patent-intensive, third parties may claim that
we infringe upon their intellectual property rights and initiate legal proceedings against us. Our efforts
to identify and avoid infringement on third parties’ intellectual property rights may not always be
successful, as we may hire employees who previously worked for competitors, or competitors may
have filed for patent protection which is not as yet a matter of public knowledge. Any claims of patent
or other intellectual property infringement, regardless of their merit, could be expensive, time-
consuming and divert our management’s attention.
If we are found to infringe on the rights of others, we may be required to suspend our sales
efforts for the relevant products, redesign such products, pay substantial damages, or enter into royalty
or licensing agreements which may not be available on terms favorable to us. Conversely, if a
defendant in a proceeding initiated by us were to prevail on a legal assertion of invalidity and/or
unenforceability, we would lose at least part, and potentially all, of the patent protection on our
products or product candidates. Any such outcome could materially and adversely affect our business.
We are subject to risks associated with potential acquisitions and investments, and any
investments or future acquisitions may have a material adverse effect on our business,
reputation, financial condition and results of operations.
We expect to continue to evaluate and consider a wide array of investment and acquisition
opportunities that we believe can extend and solidify our leading market position as part of our overall
business strategy. In particular, as we intend to use a portion of the net proceeds from the Global
Offering for such strategic investments and/or acquisitions to achieve our long-term growth strategies,
we are exposed to the inherent risks associated with these transactions, especially significant valuation
risks. See “Future Plans and Use of Proceeds” for details. While the cost of identifying and
consummating such acquisitions may be significant, the ultimate value and valuation of these
transactions are subject to high degrees of uncertainty, particularly within the semiconductor industry
which is characterized by rapid technological advancements and volatile market sentiment.
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We may also have to obtain shareholders’ approval as well as approvals and licenses from the
government authorities for the acquisitions and comply with applicable laws and regulations.
Obtaining such approvals and licenses may delay, if not halt, our acquisition efforts.
Future acquisitions and the subsequent integration of new assets and businesses into our own
may entail a number of risks, including:
 difficulties in accurately assessing the fair value of potential targets, particularly those
with significant intangible assets that derive value from novel tools or operate in niche
markets, which may result in overpayment or impairment of goodwill;
 inability to realize the anticipated synergies, cost savings or efficiencies, which may lead
to lower-than-anticipated returns;
 difficulties in integrating the acquired personnel, operations, and solutions into our
operations;
 disruptions of our ongoing business, distractions of the attention of our management and
employees and increases in our expenses;
 potential issues with technology, internal controls and financial reporting of the companies
we acquire or invest in;
 actual or alleged misconduct or noncompliance by any company we acquire or invest in
(or by its affiliates) that occurred prior to our acquisition or investment, which may lead to
negative publicity, government inquiry or investigations against such company or against
us;
 unforeseen or hidden liabilities or costs that may adversely affect us following our
acquisition of such targets; and
 compliance matters including the anti-monopoly and competition laws, rules and
regulations of the PRC and other countries in connection with any proposed investments
and acquisitions.
If we overestimate the value of a target company, rely on flawed valuation methodologies, or
fail to identify key financial and operational risks during our due diligence process, we may overpay
for such investments or acquisitions. If we fail to effectively manage these valuation uncertainties and
other risks related to our future acquisitions and investments, we may not be able to realize the
anticipated benefits of such acquisitions and our reputation, business, financial condition and results of
operations may be adversely affected.
Any failure to offer high-quality support services for our customers may harm our relationships
with them and, consequently, our business.
As we expand our business, we need to be able to continue to provide efficient customer
support. We may not be able to recruit enough customer support specialists with sufficient experience
in customer support service or enhance our infrastructure to efficiently process and respond to our
customers’ requests. As a result, we may not be able to respond to our customers’ requests for
technical support or maintenance assistance in a timely manner. Under such circumstances, we may
fail to compete with changes and updates in the technical services provided by our competitors.
If we experience increased customer demand for support and maintenance, our operational
expenses may increase and adversely impact our financial condition and results of operations. Our
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ability to attract new customers is highly dependent on our business reputation and on positive
recommendations from our existing customers. If we are unable to provide efficient maintenance and
support services with results satisfactory to our customers, our reputation and business may be harmed.
Increases in costs of the raw materials and other components used in our products would
adversely affect our business, financial condition and results of operations.
The semiconductor industry has experienced a very large expansion of fabrication capacity and
production worldwide over time. As a result of the increasing demand from semiconductors and other
manufacturers, certain basic materials and supplies used in production and manufacturing have from
time to time, over the past several years, been in short supply or experienced price fluctuations, and
could be in short supply or experience price fluctuations again if overall industry demand continues to
increase in the future. Therefore, we may in the future experience increases in the cost of our products.
We price our products based on a variety of factors, including but not limited to, costs, gross
margin and market conditions. Given the competitive nature and pressure of the market in which we
operate, we may not be able to pass on the cost increase to our customers by increasing the price of our
products. Therefore, a significant increase in the cost of our products may have an adverse impact on
our gross margin, business, financial condition and results of operations. In addition, as our prices vary
across our products, our products have different margin profiles depending on the amount, number, and
type of components that we deliver. If we fail to maintain our product mix or maintain our gross
margin and operating margin, our business, financial condition and results of operations would be
adversely affected.
We generated a substantial portion of our revenue through our distribution network. Any
decrease in sales from, or loss of, our distributors would have adverse impacts on our business,
financial condition and results of operations.
During the Track Record Period, a substantial portion of our revenue was derived from sales to
our distributors. For the years ended December 31, 2023, 2024 and 2025, our total sales to distributors
amounted to RMB2,388.8 million, RMB2,999.0 million and RMB3,609.9 million, respectively,
accounting for 91.3%, 89.6% and 92.6% of our revenue for the corresponding years, respectively. See
“Business—Our Sales Network—Our Distribution Channels” for more details.
Our revenue and sales volumes depend on our ability to maintain and expand our distribution
networks. The effective management and expansion of our distribution network depend on our ability
to (i) enter into renewal agreements with existing distributors on terms favorable to us and (ii) develop
new relationships with additional distributors. We may not be able to enter into new or renewal
agreements with our distributors as we cannot guarantee that we are able to offer more favorable
commercial terms as compared to our competitors. The loss of our distributors could adversely affect
our sales volume. There is no assurance that our current or future contracts with our distributors can be
renewed or negotiated on terms and prices equivalent to or better than current terms and prices.
The effectiveness of our distributors in selling and distributing our products may also be
affected by a number of factors, many of which are out of our control, including:
 our distributors’ strategies in promoting our products;
 our distributors’ own business and financial performance;
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 our distributors’ abilities to expand end customer base and penetrate new markets;
 our distributors’ strategies to extend geographical coverage of our products; and
 our ability to maintain and expand our distribution network.
In the event our distributors fail to effectively sell and distribute our products, or prioritize
promotion of competing product lines over our products, it could result in a significant decrease in our
sales volume, which may materially and adversely affect our business, financial condition and results
of operations.
We may fail to maintain and predict inventory levels in line with demand for our products,
which could cause us to face the risk of obsolescence for our inventories or lose sales.
Our inventories consist primarily of raw materials, finished goods and work in progress. We
have taken measures to optimize our inventory level and conduct regular inventory checks to reduce
the risk of inventory obsolescence. See “Business—Logistics and Inventory Management—Inventory
Management” for more details.
Our inventories were RMB901.4 million, RMB1,164.8 million and RMB1,448.2 million as of
December 31, 2023, 2024 and 2025, respectively. As of December 31, 2023, 2024 and 2025, our
provision for inventories was RMB219.0 million, RMB266.6 million and RMB310.4 million,
respectively. In 2023, 2024 and 2025, our inventory turnover days were 203 days, 214 days and 228
days, respectively. As our business expands, our inventory obsolescence risk may also increase with
the increase in our inventories. We cannot guarantee that we will be able to maintain proper inventory
levels for our raw materials, outsourced processing materials and finished products. We manage our
inventory levels taking into consideration, among others, internal forecasts of customer demand. If our
forecast demand is higher than actual demand, we may be exposed to increased inventory risks due to
the accumulation of excess inventory. Excess inventory may increase our inventory holding costs, risk
of inventory obsolescence or write-offs. Conversely, if our forecast demand is lower than actual
demand, we may not be able to maintain an adequate inventory level and may lose sales and market
share to our competitors. Therefore, our business prospects, financial condition and results of
operations may be materially and adversely affected.
We may not be able to fully maintain quality control over our products. Any undetected defects
contained in our products could result in accidents, reduce market adoption, damage our brand
image, subject us to product recalls or expose us to product liability and other claims that could
materially and adversely affect our business.
The quality of our products depends on the effectiveness of our quality control and quality
assurance protocol, which in turn depends on factors such as the quality and reliability of equipment
used, the quality of related training programs and our ability to ensure that our employees adhere to our
quality control and quality assurance protocol. Despite our efforts to implement stringent quality
assurance protocols throughout our supply chain, we cannot assure you that our products will be free
from defects. Any failure to execute our quality control and quality assurance protocol could render our
products unsuitable for use or adversely impact our market reputation and relationship with business
partners. Product defects may even lead to recalls.
Furthermore, product defects, whether actual or perceived, could harm our brand image and
undermine customer trust, especially as we scale our presence across different markets and industries.
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Even isolated incidents may receive heightened scrutiny or negative publicity, particularly in sectors
where reliability and stability are paramount. If we are unable to detect and address such issues
promptly, or if our remedies fail to meet customer expectations, we may suffer a loss of reputation,
reduced customer retention and diminished competitive positioning, which could materially and
adversely affect our business, financial condition, results of operations and growth prospects.
Our products are primarily used by end customers across sectors and applications. Factors that
adversely affect these industries and sectors or our end customer base therein may adversely
impact our business, financial condition and results of operations.
Our products are primarily offered to end customers across end markets and sectors, including
industrial & energy, automotive, networking & computing and consumer electronics. Therefore,
factors that adversely affect these industries and sectors or our end customer base therein could also
materially and adversely affect our business, financial condition, results of operations and prospects.
These factors include, among others:
 a decline in demand for, or negative perception of, or publicity about, products of these
industries;
 rising material and labor costs relating to the design and production of analog ICs in these
industries;
 the reduction or elimination of preferential tax treatments and economic incentives for
manufacturers in these industries;
 regulatory restrictions, trade disputes, industry-specific quotas, tariffs, non-tariff barriers
and taxes that may have the effect of limiting exports of these industries from China;
 a downturn in general economic conditions or major countries and regions that import
products of these industries;
 increasing level of competition from analog IC providers in these industries in other
countries and regions; and
 any financial difficulties, market share loss, or reputational harm to end customers that use
our products.
We have limited control over the operations of our distributors. Our business may be adversely
affected due to risks relating to the acts of our distributors and their potential breach of
distributorship agreements or applicable laws and regulations.
We rely on distributors for the marketing and sales of our products. We enter into
distributorship agreements with our distributors to regulate their conduct in the marketing and sales of
our products. However, there can be no assurance that we will be successful in detecting any
non-compliant activities by our distributors violating the provisions of our distributorship agreements
or the applicable laws and regulations. Specifically, we may be exposed to the risks of misconduct and
violations committed by our distributors. Misconduct and violations may occur in the form of
unauthorized misrepresentation to our end customers and bribery or other unlawful payments during
the course of their distribution.
In any such event, we may, as a result, incur liability to our end customers for claims of
misconduct committed by such distributor. Any such claim could subject us to litigation and impose a
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significant strain on our financial resources and divert the management attention, regardless of whether
the claims have merit. Additionally, such an event could result in complaints from our end customers
and subsequent adverse impact on our business and reputation.
We may have limited control over the quality and availability of our suppliers.
We primarily partner with third-party foundries and OSAT providers for the production of our
core products. The stability of operations and business strategies of these third-party providers are
beyond our control. The lack of necessary materials, equipment, or services can disrupt the supply of
our products. Additionally, we cannot assure you that we will be able to maintain good relationships or
renew our agreements with these third-party providers on commercially reasonable terms, if at all.
If we fail to continue our cooperation with these companies, or if their business or operations
are interrupted or fail due to factors beyond our control, including natural disasters such as
earthquakes, drought and typhoons, and geopolitical challenges in locations where they operate, and
we fail to find comparable alternatives on reasonable terms, our business and results of operations may
be materially and adversely affected. Given that we do not directly control the procurement or
employment practices of our foundries and OSAT providers, we could be subject to financial or
reputational risks as a result of their conduct violating applicable laws and regulations. To the extent
we are unable to manage these risks, our ability to timely supply competitive products will be harmed,
our costs will increase, and our business, financial condition and results of operations will be adversely
affected.
We cannot assure you that the products and services provided by our foundries and OSAT
providers are safe and free of defects or can meet the relevant quality standards. We depend on the
quality control procedures of our suppliers. In the event of any quality issues, we could be subject to
complaints and product liability claims and we may not be able to seek indemnification from our
suppliers. If we engage in legal proceedings against our suppliers, such proceedings may be time-
consuming and costly regardless of the outcome. Any such issues may materially and adversely affect
our business, financial condition and results of operations.
We are exposed to credit risks related to defaults of our customers and the recoverability of our
trade receivables. If we fail to collect trade receivables from our customers in a timely manner, our
business, financial condition and results of operations may be materially and adversely affected.
During the Track Record Period, our trade receivables primarily represent receivables from
customers for sales of our products. As of December 31, 2023, 2024 and 2025, our trade and bills
receivables amounted to RMB166.5 million, RMB232.8 million and RMB362.8 million, respectively.
See “Financial Information—Discussion of Certain Key Items on Consolidated Statements of Financial
Position—Assets” for more details.
We may not be able to collect any, if not all, such trade receivables due to a variety of factors
that are beyond our control, including long payment cycle, adverse operating condition or financial
condition of our customers, and our customers’ inability to pay caused by their end customers’ delay in
payment.
We are subject to risks related to the prolonged cash conversion cycle.
During the Track Record Period, we experienced fluctuations in turnover days of inventories,
which were 203 days, 214 days and 228 days in 2023, 2024 and 2025, respectively. In addition, our
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trade and bills receivables turnover days were 20 days, 22 days and 29 days in 2023, 2024 and 2025,
respectively. However, our trade payables turnover days were 70 days, 60 days and 62 days in 2023,
2024 and 2025, respectively. The mismatch between our cash inflows and outflows may impact our
liquidity and financial stability, resulting in the need to seek additional financing or use of working
capital to cover operational expenses, potentially leading to increased financial costs or strain on our
resources.
The extension of the cash conversion cycle was primarily driven by an increase in our
inventory turnover days. The underlying reason for the longer inventory turnover days is mainly that
we increased our inventory in order to better ensure stable supply for our customers. If our inventory
turnover days and our trade receivables turnover days continue to increase or remain relatively high, it
may increase the risks of inventory impairment and lead to a longer cash conversion cycle, which
could further add pressure to our cash flow and working capital. Our financial position, business and
results of operations might be adversely and materially impacted.
If we are unable to ensure the mass production or delivery of high-quality products on schedule,
our business may be materially and adversely affected.
Mass production of our products is crucial to our future financial prospects. As an analog IC
company, we operate under the fabless model, focusing on the R&D and design of ICs while
outsourcing wafer fabrication to trusted third-party partners. We may face difficulties meeting our
delivery deadlines when there is a surge in customer demand. If any of our third-party partners’
production facilities experiences interruptions, delays or disruptions in supplying products, our ability
to deliver products to customers would be impeded. Failure to fulfill customers’ requirements and
quality control problems that occur in the manufacturing process could prevent us from meeting the
stipulated delivery deadline. For example, a decline in yield rates would adversely affect our
third-party partners’ production efficiency and product quality. We may also experience delays in
shipments caused by our third-party logistics service providers. These delays or product quality issues
could have an immediate and material adverse effect on our ability to fulfill orders and damage our
reputation and brand, affecting our business, financial condition and results of operations.
Further, if our third-party partners’ suppliers experience any difficulties or shortages of raw
materials, or if our suppliers are otherwise unable or unwilling to continue to supply in required
volumes or at all, our supply may be disrupted, and we may be required to seek alternate sources of
supply. The process would be time-consuming and could be costly and impracticable. Interruptions to
supply will have an adverse effect on our ability to meet scheduled product deliveries and subsequently
lead to the loss of sales.
We may be subject to product liability claims if our products contain defects. We could incur
significant expenses remediating such defects, and, as a result, our reputation and market share
may be adversely affected.
Products within the industry, such as the ones we develop, are complex and may contain
defects. Despite the verification and testing procedures in place, our products may contain serious
errors, defects, security vulnerabilities or software issues which we are unable to successfully correct
in a timely manner or at all. Some errors or defects in our products may only be discovered after they
have been tested, commercialized and deployed by our end customers. Under these circumstances, we
may incur additional remedial costs to recall or replace, and additional development costs to redesign,
our products.
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Furthermore, because we may be subject to warranty and indemnification provisions based on
certain of our agreements with our customers, we may be subject to claims or threats of claims by our
customers for their financial loss related to defects in our products. Any such claims would be time-
consuming and costly for us to defend and divert our management’s attention, thereby adversely
affecting our business, financial condition and results of operations. Additionally, our customers may
terminate the business relationship with us altogether and as a result, our business and prospects may
be adversely affected. These claims and terminations by our customers may generate negative publicity
about us and adversely impact our reputation, business and results of operations.
Failure to fulfill our contractual obligations could adversely affect our liquidity and financial
condition.
Our contract liabilities primarily arise from advance payments made by our customers to us
before we fulfill our performance obligations. Our contract liabilities were RMB14.9 million,
RMB18.3 million and RMB18.4 million as of December 31, 2023, 2024 and 2025. See “Financial
Information—Discussion of Certain Key Items on Consolidated Statements of Financial
Position—Liabilities” for more details. There is no assurance that we will be able to fulfill our
obligations in respect of contract liabilities as the fulfillment of our performance obligations is subject
to various factors that are beyond our control. If we are not able to fulfill our obligations with respect
to our contract liabilities, the amount of contract liabilities will not be recognized as revenue and we
may have to refund the advance payment made by our customers. As a result, our liquidity and
financial condition may be adversely affected.
Our transfer pricing arrangements may be subject to scrutiny by the relevant tax authorities in
the countries and regions where we operate.
Under the laws and regulations in the Chinese Mainland and Hong Kong, arrangements and
transactions among related parties may be subject to audit or challenge by the relevant tax authorities.
During the Track Record Period, we carried out our operations mainly in the Chinese Mainland and
Hong Kong. We could face material and adverse tax consequences if the relevant tax authorities
determine that certain intra-group transactions of ours 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 time frame required by the relevant tax authorities, the relevant tax
authorities may impose late payment tax or surcharge and other penalties on us for any unpaid taxes. In
addition, a transfer-pricing arrangement may give rise to tax recoverable 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 operations may
therefore be materially and adversely affected.
We may be subject to the risks associated with international trade policies, export controls,
economic or trade sanctions, investment restrictions, geopolitics and trade protection measures
such as unreasonable tariff arrangements, and our business, financial condition and results of
operations could be adversely affected.
Our operations are subject to deterioration in the political and economic relations among
countries and sanctions and export controls administered by government authorities and other
geopolitical challenges, including, but not limited to, economic and labor conditions, increased customs
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duties, tariffs, taxes and other costs and political instability. Margins on the sales of products that
include components obtained from certain suppliers from other countries and regions could be
materially and adversely affected by international trade regulations, including customs duties, tariffs
and antidumping penalties. In particular, the U.S. government imposed economic and trade sanctions
directly or indirectly affecting China-based technology companies. It is possible that the extent and
scope of such sanctions may escalate. There is no assurance as to how the U.S.-China trade tensions
might develop or whether there will be any changes to the scope and extent of goods that are or will be
subject to such export controls, sanctions, tariffs, or new trade policies introduced by the two countries.
We cannot predict the implications of the ongoing U.S.-China trade tensions and the resulting impact on
our industry and the global economy.
In recent years, the U.S. has increased export control restrictions on China through the Export
Administration Regulations (the “ EAR”), administered by the Bureau of Industry and Security of the
U.S. Department of Commerce (“ BIS”). The export, re-export and/or transfer (in-country) of items
subject to the EAR to restricted end users or end uses is generally prohibited unless the specified
license requirements are met. For example, BIS has recently strengthened export controls on China,
including designating certain Chinese entities or individuals onto its Entity List and other restricted
lists that limit their access to certain goods, software, or technologies subject to the EAR. Our
Sanctions Legal Adviser is of the view that, during the Track Record Period, our Company (i) did not
purchase any items that are subject to EAR license requirements, (ii) did not experience any
procurement restrictions as a result of U.S. export control restrictions, and (iii) did not sell any item
that is subject to the U.S. export control. Nevertheless, these restrictions or regulations, and similar or
more expansive restrictions or regulations that may be imposed by the U.S. or other jurisdictions in the
future, may affect our ability to acquire goods, software, or technologies that may be critical to our
technology infrastructure, product offerings and business operations. Any uncertainties and changes in
these current or future restrictions or regulations may have a negative impact on our reputation and
business.
In addition, on August 9, 2023, the Biden Administration issued Executive Order 14105 on
Addressing United States Investments in Certain National Security Technologies and Products in
Countries of Concern granting the U.S. government the authority to establish a program to prohibit or
require notification of certain types of outbound investments by U.S. persons into certain entities
located in or subject to the jurisdiction of a country of concern, and certain other entities owned by
persons of a country of concern, involved in specific categories of advanced technologies and products.
On October 28, 2024, the Department of the Treasury issued the Provisions Pertaining to U.S.
Investments in Certain National Security Technologies and Products in Countries of Concern (the
“Outbound Investment Rule ”), which became effective on January 2, 2025. The Outbound
Investment Rule targets investments by U.S. persons involving persons associated with “countries of
concern,” currently including China (including Hong Kong and Macau), that engage in activities in
certain sectors such as semiconductors and microelectronics, quantum information technologies or
artificial intelligence (the “covered activities”). Persons of countries of concern that engage in covered
activities are defined as “covered foreign persons.” The Outbound Investment Rule imposes
prohibition or notification requirements on a wide range of investments by U.S. persons subject to the
Outbound Investment Rule, which are defined as “covered transactions,” including acquisitions of
equity interests (including purchases of shares in an initial public offering or contingent equity), certain
debt financing, joint ventures, and certain investments as a limited partner in a non-U.S. person pooled
investment fund. See “Regulatory Overview—Outbound Investment Rule by the U.S. Department of
the Treasury” for more details of the Outbound Investment Rule. As we are registered and have our
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principal place of business in China, we are considered a “person of a country of concern.” We do not
engage in any “covered activities” subject to investment prohibitions as our business involving the
design of ICs does not meet the standard of the design of advanced ICs under the “prohibited
transaction” criteria. However, our design of ICs constitutes “covered activities” subject to notification
requirements. Therefore, we are a covered foreign person and investments by U.S. persons in us would
constitute “notifiable transactions” under the Outbound Investment Rule. However, an investment by a
U.S. person in a publicly traded security is exempted under the Outbound Investment Rule. Therefore,
U.S. investors who acquire publicly traded shares in our H Shares are excepted from the notification
requirements as long as the investment does not afford the U.S. persons rights beyond standard
minority shareholder protections. As such, our Directors are of the view that the Outbound Investment
Rule has no material adverse impact on our Global Offering. Based on the factors mentioned above,
nothing has come to the Joint Sponsors’ attention that would reasonably cause them to disagree with
the Directors. However, there has been no enforcement action taken under the Outbound Investment
Rule and it remains unclear how it will be enforced. There is no assurance that the U.S. Department of
the Treasury will take the same view as ours. Further, on February 21, 2025, the U.S. President issued
a memo titled the “America First Investment Policy” (hereinafter the “ America First Memo ”),
indicating that Executive Order 14105 is under review and the Trump Administration will consider
new or expanded restrictions. The Outbound Investment Rule, the America First Memo and any related
policies, laws and regulations may be changed and updated from time to time, which may increase the
compliance burden of U.S. investors and may cause certain U.S. investors to adopt a more cautious
approach in their investments, affecting the investor sentiment towards us, and therefore negatively
impacting our ability to raise capital.
Recently, the U.S. has implemented a series of tariff measures, including reciprocal tariffs on
numerous trading partners. In response, countries including China adopted retaliatory measures.
Following a period of escalated tensions, including temporary reciprocal tariff rates as high as 125% on
Chinese goods, the U.S. and China announced a 90-day suspension of certain tariff measures in May
2025, which was extended in August 2025. Such agreements lowered the additional U.S. tariffs on
Chinese goods from approximately 145% (125% for reciprocal tariffs and 20% for fentanyl-related
tariffs) to a combined rate of 30%, while China reduced its additional tariff rates on U.S. imports to
10%. On November 4, 2025, the U.S. officially announced a reduction of fentanyl-related tariffs from
20% to 10% and maintained the suspension of heightened reciprocal tariffs on imports from China
until November 10, 2026. These rapidly evolving trade policies, along with associated geopolitical
uncertainties, have created a challenging global environment that could lead to reduced international
trade, market volatility, and increased costs. As of the Latest Practicable Date, it remained uncertain
how the Sino-U.S. and the global trade tension will develop. We cannot assure you that our trade with
the U.S. in the future will remain unaffected in light of the uncertainties relating to the geopolitical
landscape and the development of the trade tension and tariff imposition.
If we fail to obtain and maintain the requisite licenses and approvals required in any jurisdiction
where we operate, our business, financial condition and results of operations may be materially
and adversely affected.
We are required to obtain and maintain the requisite licenses and approvals required in China
and in other jurisdictions where we operate. See “Regulatory Overview” and “Business—Licenses,
Approvals and Permits” for more details. Compliance with the relevant regulations may require
substantial expense and non-compliance may expose us to sanctions and penalties. Moreover, we
cannot assure you that we can successfully update or renew the licenses required for our business in a
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timely manner as the licenses may only be valid for a limited period of time. Neither can we assure you
that these licenses are sufficient to conduct all of our present or future business. Considerable
uncertainties exist regarding the interpretation and implementation of existing and future laws,
regulations and policies governing our business activities. We cannot assure you that we will not be
found in violation of any future laws, regulations and policies or any of the laws, regulations and
policies currently in effect due to changes in the relevant authorities’ interpretation of these laws,
regulations and policies.
If we fail to complete, obtain or maintain any of the required licenses or approvals or make the
necessary filings in any of the jurisdictions where we operate, we may be subject to various penalties,
such as confiscation of the revenue that was generated through unlicensed activities, or the suspension
or revocation of our licenses and approvals. Any such penalties may disrupt our business operations
and materially and adversely affect our business, financial condition and results of operations.
We have granted, and may continue to grant, certain awards under our share incentive plans,
which may result in increased share-based compensation expenses.
We adopted share incentive plans including share-based compensation for the benefit of our
Directors and employees to incentivize and reward the eligible persons who have contributed to our
success. In 2023, 2024 and 2025, we incurred share-based payments of RMB118.8 million,
RMB84.8 million and RMB159.1 million, respectively. We believe the granting of share-based
compensation is of significant importance to our ability to attract and retain key personnel and
employees. Nevertheless, share-based compensation expenses would potentially dilute the
shareholdings of existing shareholders. We may continue to grant share-based compensation awards to
employees in the future. As a result, our expenses associated with share-based compensation may
increase, which may affect our financial condition and results of operations. We may re-evaluate the
vesting schedules, lock-up period, or other key terms applicable to the grants under the share incentive
plan from time to time. If we choose to do so, we may experience a substantial change in our
share-based compensation expenses in the reporting periods following this offering.
Our insurance coverage may not be sufficient to cover all losses or potential claims by our
customers, which would affect our business, financial condition and results of operations.
We have maintained insurance policies to cover major aspects of our business, including
property loss and product liability to secure our business continuity. However, the amount of coverage,
depending on the insurance policies to which we subscribe, may not be adequate to fully compensate
for all types of loss, damage and liability we may suffer in the future. For example, insurance covering
loss from acts of war, terrorism, or natural disasters may be unavailable or cost prohibitive. In addition,
we cannot guarantee that our policies can be renewed on similar or acceptable terms, or at all. If we
suffer unexpected severe losses or losses that far exceed the policy limits, it could materially and
adversely affect our business, financial condition, results of operations and prospects.
Failure to obtain or maintain any of the government grants or preferential tax treatments could
adversely affect our business, financial condition and results of operations.
During the Track Record Period, we recorded government grants of RMB50.5 million,
RMB37.8 million and RMB101.1 million in 2023, 2024 and 2025, respectively, which mainly consist
of subsidies received from the government in support of our R&D projects and activities carried out in
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the IC industry and high-technology advancement. In addition, we benefited from preferential tax
treatments from the PRC government during the Track Record Period. Furthermore, we are an IC
enterprise covered by the “Notice on Additional VAT Credit Policies for Integrated Circuit
Enterprises” (
) issued by the Ministry of Finance and
the State Administration of Taxation. Under this provision, IC design, production, packaging and
testing, equipment, and materials companies may deduct 15% of their current deductible input VAT
against their payable VAT.
If we cease to be entitled to such government grants or preferential tax treatment or if the
relevant PRC laws and regulations change, our tax expenses may increase, which could adversely
affect our business, financial condition, results of operations and prospects. As these government
grants are provided typically on a one-off basis, there is no guarantee that we will continue receiving or
benefiting from them in the future. In addition, we may not be able to successfully or timely obtain the
government grants or preferential tax treatment that may become available to us in the future, and such
failure could adversely affect our business, financial condition, results of operations and prospects.
We may not be able to obtain additional capital when desired, on favorable terms or at all;
therefore, we may not be able to implement our planned growth or development if we are unable
to obtain sufficient financial resources.
Capital requirements are difficult to plan in the highly dynamic, cyclical and rapidly changing
semiconductor industry. From time to time and increasingly so for the next few years, we will continue
to need significant capital to fund our operations and manage our capacity in accordance with market
demand. Our continued ability to obtain sufficient external financing is subject to a variety of
uncertainties, including but not limited to our future financial condition, results of operations and cash
flow, general market conditions for financing activities, market conditions for financing activities of
semiconductor companies, and social, economic, financial, political and other conditions in the PRC
and elsewhere. Sufficient external financing may not be available to us on a timely basis, on reasonable
market terms, or at all. As a result, we may be forced to curtail our expansion and modification plans or
delay the deployment of new or expanded product lines until we obtain such financing.
Our ability to obtain additional capital depends on factors, including, but not limited to:
 our market position and competitiveness in the analog IC industry;
 our overall financial condition, results of operations and future profitability;
 general market conditions for financing activities in China; and
 general economic and political conditions in China and internationally.
If our capital needs are materially different from that currently planned, we may initiate
financing activities for additional capital sooner than anticipated. Such financing may not be available
on favorable terms on a timely basis, or at all. If we cannot obtain adequate capital on terms favorable
to us, or at all, we may not be able to continue our operations, R&D and sales and marketing efforts,
take advantage of future opportunities or respond to competitive pressures. Under these circumstances,
our business, financial condition, results of operations and prospects may be adversely affected.
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Our business and prospects depend on our ability to build our brand and reputation, which
could be harmed by negative publicity regarding us, our Directors, employees, branding or
products. Any negative publicity, whether warranted or not, could adversely affect our business.
We believe that our brand is integral to the success of our business. Since we operate in a
highly competitive market, brand maintenance directly affects our ability to maintain our market
position. The successful maintenance of our brand depends on our ability to provide competitive
products and to strengthen business relationships with our customers. The successful promotion of our
brand depends on the effectiveness of our marketing efforts and the amount of word-of-mouth referrals
by our customers. We may incur extra expenses in promoting our brand. However, we cannot assure
you that these activities will be successful or effective as expected. In addition, any negative publicity
about our Company, Directors, employees, branding or products, whether warranted or not, may
adversely affect our reputation and business. If our brand and reputation are damaged, we may face
challenges in maintaining our current business relationships with our customers and in entering into
new markets, which may adversely affect our business, financial condition, results of operations and
prospects.
Our information technology networks and systems may encounter malfunction, unexpected
system failure, interruption, insufficiency or security breaches.
We rely on our and third-party information technology systems to facilitate communications
among our employees and with suppliers and customers and other aspects of our business operations.
These information technology systems may be susceptible to damage, disruptions or shutdowns due to
failures during maintenance, power outages, hardware failures, malware attacks or catastrophic events.
If the information technology systems suffer damage, disruption or shutdown, we may incur substantial
costs in repairing or replacing these systems. If we do not effectively resolve the issues in a timely
manner, our business, financial condition and results of operations may be materially and adversely
affected. In addition, if the information technology systems fail to satisfy additional requirements
related to our business expansion, our future growth may be adversely affected.
Security breaches and other disruptions could compromise our confidential and proprietary
information, which could cause our business and reputation to suffer.
We collect and store business data and transaction data generated during or in connection with
our business operations, as well as basic contact information of contact persons from our distributors,
customers, suppliers and other business partners. See “Business—Data Security” for more details. The
secure maintenance of such data is critical. Despite our data security and protection measures, our
information technology and infrastructure may be vulnerable to breaches by hackers, employee errors,
malfeasance or other disruptions such as natural disasters, power losses or telecommunication failures.
Any such breach could compromise our networks and the information stored therein, possibly resulting
in legal and regulatory actions, disruption of operations and customer services, and otherwise harming
our business, reputation and future operations.
Failure to detect or prevent fraudulent or illegal activities or other misconduct by our employees,
suppliers, customers or other third parties may materially and adversely affect our business.
We are exposed to fraudulent, corrupt, or illegal activities or other misconduct by our
employees, suppliers, customers or other third parties, that could subject us to liabilities, fines and
other penalties imposed by government authorities or negative publicity. Although we have established
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internal control policies and relevant contractual covenants, we cannot assure you that we will be able
to prevent fraud or illegal activity by such persons or that similar incidents will not occur in the future.
Any illegal, fraudulent, corrupt or collusive activity by our employees, suppliers, customers or other
third parties, including, but not limited to, those in violation of anti-corruption, anti-bribery, anti-
money laundering, financial and economic sanctions and similar laws, could also subject us to negative
publicity that could severely damage our brand and reputation and subject us to significant financial
and other liabilities to third parties and fines and other penalties imposed by government authorities.
Accordingly, our failure to detect and prevent fraudulent or illegal activities or other misconduct by our
employees, suppliers, customers or other third parties could materially and adversely affect our
business.
We are subject to risks relating to litigation and disputes, which could adversely affect our
business, financial condition, results of operations and prospects.
We may be subject to disputes or claims of various types brought by our competitors,
employees, suppliers, customers, business partners or governmental entities against us relating to
contractual disputes, labor disputes, intellectual property infringements or disputes involving
misconduct of our employees. Such claims and disputes may evolve into litigations and damage our
reputation and goodwill, thereby adversely affecting our customer base. We cannot guarantee that we
will not be subject to legal proceedings in the ordinary course of business. Litigation is distracting and
expensive as it may cause us to incur defense costs, utilize a significant portion of our resources and
divert the management’s attention from our day-to-day operations, any of which could harm our
business. In addition, we may need to spend a significant amount to settle claims or pay damages if we
lose a lawsuit, which could have a material and adverse effect on our business, financial condition and
results of operations. If there were adverse determinations in legal proceedings against us, we could be
required to pay substantial monetary damages or adjust our business practices, which could have a
material and adverse effect on our business, financial condition and results of operations.
We are subject to potential adverse effects in respect of defects in our existing properties owned
and leased in China.
We may be exposed to potential adverse effects due to defects in our existing properties held
and leased in China. Pursuant to the Measures for Administration of Lease of Commodity Properties
(
), which was promulgated by the Ministry of Housing and Urban-Rural
Development of the PRC on December 1, 2010, and became effective on February 1, 2011, lease
agreements in general are required to be registered with the local land and real estate administration
bureau. As of the Latest Practicable Date, we had not obtained the registration of lease agreements for
13 of our leased properties in the PRC, two of which were in the process of registration. We cannot
assure you that the lessors will cooperate and complete the registration in a timely manner. In
accordance with the relevant PRC laws and regulations, a failure to complete the registration and filing
of lease agreements will not affect the validity of the lease agreements, but we may be subject to a
penalty ranging from RMB1,000 to RMB10,000 for each non-registered lease if we fail to rectify such
non-compliance within the prescribed time frame after receiving notice from the relevant competent
authorities.
We may be subject to additional contributions of social insurance and housing provident fund
and late payments and fines imposed by relevant governmental authorities.
Under PRC laws and regulations, we are required to open social insurance registration accounts
and housing provident fund accounts and make contributions for the social insurance and housing
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provident funds for the benefit of our employees. The relevant competent authorities may examine
whether an employer has made adequate payments of the requisite employee benefit payments;
employers who fail to make adequate payments as required may be subject to late payment fees, fines
and/or other penalties.
During the Track Record Period, we engaged third-party human resource agencies to pay social
insurance premium and housing provident funds for some of our employees. The third-party agencies
have confirmed that they have paid such full contributions in accordance with the relevant regulations
of the working region of these employees. During the Track Record Period, a certain PRC subsidiary
we acquired had not made adequate contributions to social insurance and housing provident fund for a
few of its employees in strict accordance with the relevant PRC laws and regulations. As of the end of
September 2025, such PRC subsidiary had completed the rectification.
We cannot assure you that the competent government authorities will not require us to pay the
outstanding amount and impose late payment fees or fines on us. If we are subject to investigations or
significant administrative penalties or incur significant legal fees related to non-compliance with
relevant PRC laws and regulations, our business, financial condition and results of operations may be
adversely affected.
Our PRC Legal Adviser is of the opinion that, provided that there are no significant changes in
the current policies, regulations and local government enforcement and supervision requirements
related to the social insurance and housing provident fund, and no employee collective complaints,
reports or related lawsuits or arbitrations are filed, we face a remote risk of being subject to centralized
collection of contributions payment or significant administrative penalties for the above issues by the
relevant competent authorities.
Our business growth and results of operations may be adversely affected by changes in global
and regional macroeconomic conditions, natural disasters, health epidemics and pandemics, and
social disruption and other outbreaks.
Uncertainties about global and regional macroeconomic conditions including fluctuation of
interest rates, inflation level, conditions in the industries in which we operate, unemployment, labor
and healthcare costs, access to credit, consumer confidence and other factors beyond our control may
pose risks and materially and adversely affect the demand for our products. In addition, natural
disasters such as floods, earthquakes, sandstorms, snowstorms, fire or drought, the outbreak of a
widespread health epidemic, acts of war, terrorism or other force majeure events beyond our control
may disrupt our R&D, manufacturing and commercialization activities and business operations, all of
which could adversely affect our business, financial condition, results of operations and prospects.
RISKS RELATING TO CONDUCTING BUSINESS IN CHINA
Our business is affected by changes in China’s economic, political or social conditions or
government policies.
The majority of our business assets are located in China and the vast majority of our sales and
revenue were derived from China during the Track Record Period. Accordingly, our business, financial
condition, results of operations and prospects are subject to the economic, political and legal conditions
in China. Political and economic policies of the PRC government could affect our business and
financial condition. These changes in political and economic policies may affect our growth. In recent
years, the PRC government implemented a series of laws, regulations and policies which imposed
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stricter standards with respect to, among other things, quality and safety control, and supervision and
inspection of companies in our industry. See “Regulatory Overview” for more details. Laws,
regulations and policies related to our industries will continue to evolve and undergo changes or
adjustments, complying with which may incur additional costs for us. If we cannot fully comply with
these laws, regulations and policies, our business, financial condition, results of operations and
prospects may be affected.
Uncertainties embedded in the legal systems of certain geographic markets where we operate
could materially and adversely affect us.
We conduct business in multiple geographic markets that adopt different legal systems. These
jurisdictions in which we operate adopt either the civil law system or the common law system. In the
civil law system, prior court decisions may be cited for reference and may have limited precedential
value. For example, in recent years, the PRC government has passed reformative laws and regulations
related to economic affairs such as those in protection of various forms of foreign investments in
China. However, many of these laws and regulations are relatively new with few published cases and
judicial interpretations. The legal systems of some geographic markets where we operate are
consistently evolving. Laws and regulations that have recently been enacted may not sufficiently cover
all aspects of economic activities in such markets. In particular, the interpretation and enforcement of
these laws and regulations are subject to future implementations, and the application of some of these
laws and regulations to our businesses is not settled. Therefore, it may be difficult to evaluate the level
of legal protection we have in many of the geographic markets in which we operate. Any failure to
comply with these laws and regulations may result in substantial costs and the diversion of resources
and management attention, thereby adversely affecting our business, financial condition and results of
operations.
Regulations on currency exchange may limit our foreign exchange transactions, including our
ability to pay dividends and other obligations, and may affect the value of your investment.
The conversion of Renminbi is subject to applicable laws and regulations in China. We cannot
guarantee that under a certain exchange rate, we will have sufficient foreign exchange to meet our
foreign exchange needs. Under the current PRC foreign exchange administration system, foreign
exchange transactions under the current account conducted by us, including the payment of dividends,
do not require advance approval from SAFE. We are required to present documentary evidence of such
transactions and conduct such transactions at banks that have the licenses to carry out foreign exchange
business. Foreign exchange transactions under the capital account conducted by us, however, must be
registered in advance by SAFE or its designated banks.
Under existing foreign exchange regulations, following the completion of the Global Offering,
we will be able to pay dividends in foreign currencies without prior approval from SAFE by complying
with certain procedural requirements. However, any change in these foreign exchange policies or any
insufficiency of foreign exchange may restrict our ability to obtain sufficient foreign exchange for
dividend payments to shareholders or to satisfy any other foreign exchange requirements, or to
capitalize our capital expenditure plans, and even our business, financial condition and results of
operations may be affected.
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Fluctuations in exchange rates could result in foreign currency exchange losses.
Most of our revenue and expenditures were denominated in Renminbi. We recorded net foreign
exchange gains of RMB0.4 million and RMB6.2 million in 2023 and 2024, respectively, and net
foreign exchange loss of RMB8.9 million in 2025. Any significant revaluation of the Renminbi may
adversely affect our financial condition and results of operations.
Additionally, the proceeds from the Global Offering will be in Hong Kong dollars. Fluctuations
in the exchange rates among the Renminbi, the Hong Kong dollar, the U.S. dollar and other foreign
currencies will affect the relative purchasing power in Renminbi in terms of the proceeds from the
Global Offering. Fluctuations in the exchange rate may also incur foreign exchange losses and affect
the relative value of any dividend issued by us, thereby adversely affecting our business, financial
condition and results of operations.
Our operations are subject to PRC tax laws and regulations.
As a company incorporated in China, we are subject to PRC tax laws and regulations. We
cannot assure you that we are able to fully comply with such laws and regulations. Any violation of
such laws and regulations may result in fines, other penalties, actions or proceedings that could
adversely affect our business, financial condition and results of operations.
Holders of our H Shares may be subject to PRC income tax obligations.
According to the Individual Income Tax Law of the PRC (
جand its
implementation regulations, 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. According to the Enterprise Income Tax Law of the PRC (
جand its implementation regulations, 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 Arrangement between the Chinese Mainland and Hong Kong for the Avoidance of Double
Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (
ਜ
τર), 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. 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. See “Appendix III — Taxation and Foreign
Exchange — PRC Taxation — Taxation Regarding Dividends” for more details.
Failure to comply with relevant regulations regarding the registration requirements for
employee share incentive plans may subject our share incentive plan participants or us to fines
and other legal or administrative sanctions.
In February 2012, SAFE promulgated the Notices on Issues Concerning the Foreign Exchange
Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly
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Listed Company (), replacing
earlier rules promulgated in 2007. Pursuant to these rules, PRC citizens and non-PRC citizens who reside
in China for a continuous period of not less than one year and participate in any stock incentive plan of an
overseas publicly listed company, subject to a few exceptions, are required to register with SAFE through
a domestic qualified agent and complete certain other procedures. In addition, an overseas-entrusted
institution must be retained to handle matters in connection with the exercise or sale of stock options and
the purchase or sale of shares and interests. We, our executive officers and other employees who are PRC
citizens or who reside in China for a continuous period of not less than one year and who have been
granted options of H Shares will be subject to these regulations when we become an H Share listed
company upon the completion of the Global Offering. Failure to complete SAFE registrations may
subject them to fines and legal sanctions. In light of the above, we cannot assure you that we will
continuously adopt additional H Shares incentive plans for our directors, executive officers and
employees under PRC law. In addition, the STA has issued certain circulars concerning employee share
options and restricted shares. Under these circulars, our employees working in China who exercise share
options or are granted restricted shares will be subject to PRC individual income tax. We have
obligations to file documents related to employee share options or restricted shares with relevant tax
authorities and to withhold individual income taxes of those employees who exercise their share options.
If our employees fail to pay or we fail to withhold their income taxes according to relevant laws and
regulations, we may face sanctions imposed by the tax authorities.
We may be subject to additional regulatory requirements relating to new laws and regulations in
connection with overseas securities offering and listing issued by PRC government authorities.
On February 17, 2023, the CSRC issued the Trial Measures for the Administration on Overseas
Securities Offering and Listing by Domestic Companies (
ج
) and five supporting guidelines, which became effective on March 31, 2023 (the “ Overseas Listing
Regulations”). The Overseas Listing Regulations are applicable to overseas securities offering and
listing conducted by issuers that are (i) companies incorporated in the PRC (“ PRC domestic
companies”) and (ii) companies incorporated overseas with substantial operations in the PRC. The
Overseas Listing Regulations lay out the arrangements for regulatory filings for both direct and indirect
overseas offerings, and clarify the determination criteria for indirect overseas offerings in overseas
markets. See “Regulatory Overview—Laws and Regulations Relating to the Issuance and Listing of
Securities Overseas by Domestic Enterprises” for more details. The Overseas Listing Regulations, or
any pertinent rules or regulations promulgated in the future, may subject us, or our financing activities,
to additional compliance requirements in the future. Any failure on our part to fully comply with the
new regulatory requirements may significantly limit or completely hinder our future financing
activities.
You may experience difficulties in effecting service of legal process and enforcing judgments
against us, most of our Directors and senior management.
We are a company incorporated under the PRC laws and a majority of our assets and
subsidiaries are located in China. The majority of our Directors and senior management reside within
China. The assets of these Directors and senior management also may be located within China. As a
result, it may be complex and difficult to effect service of process upon or to enforce judgments against
us, most of our Directors and senior management outside China.
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RISKS RELATING TO THE GLOBAL OFFERING
We will be concurrently subject to listing and regulatory requirements of Chinese Mainland and
Hong Kong.
As our A Shares are listed on the Shenzhen Stock Exchange and our H Shares will be listed on
the Stock Exchange, we will be required to comply with the applicable listing rules and other
regulatory regimes of both jurisdictions unless an exemption is available or a waiver has been
obtained. Accordingly, we may incur additional costs and allocate resources to ensure our compliance
with the listing rules of both jurisdictions.
The characteristics of the A Share and H Share markets may differ.
Our A Shares are listed and traded on the Shenzhen Stock Exchange. Following the Global
Offering, our A Shares will continue to be traded on the Shenzhen Stock Exchange and our H Shares
will be traded on the Hong Kong Stock Exchange. Under current laws and regulations in China,
without approval from the relevant regulatory authorities, our H Shares and A Shares are neither
interchangeable nor fungible, and there is no trading or settlement between the H Share and A Share
markets. With different trading characteristics, the H Share and A Share markets have divergent
trading volumes, liquidity and investor bases, as well as different levels of retail and institutional
investor participation. As a result, the trading performance of our H Shares and A Shares may not be
comparable. Nonetheless, fluctuations in the price of our A Shares may adversely affect the price of
our H Shares, and vice versa. Due to the different characteristics of the H Share and A Share markets,
the historical prices of our A Shares may not be indicative of the performance of our H Shares.
Therefore, you should not place undue reliance on the trading history of our A Shares when making
your investment decision in our H Shares.
An active trading market for our H Shares may not develop or be sustained.
Prior to the Global Offering, there was no public market for our H Shares. We cannot assure
you that a public market for our H Shares with adequate liquidity and trading volume will develop and
be sustained following the completion of the Global Offering. In addition, the Offer Price of our H
Shares is expected to be fixed by agreement between the Overall Coordinators and us, and may not be
an indication of the market price of our H Shares following the completion of the Global Offering. If
an active public market for our H Shares does not develop following the completion of the Global
Offering, the market price and liquidity of our H Shares may be materially and adversely affected.
The price and trading volume of our H Shares may be volatile in response to various factors
beyond our control, including the general market conditions of securities in Hong Kong and
elsewhere in the world which could result in substantial losses to investors.
The Hong Kong 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 listed company. The business and performance and the market price of
the shares of other listed companies engaging in similar business may also affect the price and trading
volume of our Shares. In addition to market and industry factors beyond our control, the price and
trading volume of our Shares may be highly volatile for specific business reasons, such as fluctuations
in our revenue, earnings, cash flows, investments, expenditures, regulatory developments, relationships
with our suppliers, movements or activities of key personnel, or actions taken by competitors.
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Moreover, shares of other companies listed on the Hong Kong Stock Exchange have experienced price
volatility in the past, and it is possible that our H Shares may be subject to changes in price not directly
related to our performance.
You will incur immediate and significant dilution and may experience further dilution as a result
of the Global Offering.
As the Offer Price of our H Shares is higher than the net tangible book value per H Share of our
H Shares immediately prior to the Global Offering, purchasers of our H Shares in the Global Offering
will experience an immediate dilution in pro forma net tangible book value. If we issue additional H
Shares in the future, purchasers of our H Shares in the Global Offering may experience further dilution
in their shareholding percentage. Our historical dividends may not be indicative of our future dividend
policy, and there can be no assurance that we will declare and distribute any dividends in the future.
The interests of our Controlling Shareholders may not be aligned with the interests of other
Shareholders.
Our Controlling Shareholders have substantial influence over our business, including matters
related to our management, policies and decisions regarding acquisitions, mergers, expansion plans,
consolidations and sales of all or substantially all of our assets, election of directors and other
significant corporate actions. This concentration of ownership may discourage, delay or prevent a
change in control of our Company, which could deprive other Shareholders of an opportunity to
receive a premium for their Shares as part of a sale of our Company and might reduce the price of our
H Shares. In addition, the interests of our Controlling Shareholders may differ from the interests of our
other Shareholders. It is possible that our Controlling Shareholders may exercise their substantial
influence over us and cause us to enter into transactions or take, or fail to take, actions or make
decisions that conflict with the best interests of our other Shareholders.
Our historical dividends may not be indicative of our future dividend policy, and there can be no
assurance whether and when we will pay dividends in the future.
We have declared dividends in the past. We protect our Shareholders’ interest by ensuring a
consistent dividend policy. However, there is no assurance that we will be able to declare or distribute
dividends of any amount in any year in the future. Under the applicable PRC laws and regulations, the
payment of dividends may be subject to certain limitations, and the calculation of our profit under the
Accounting Standards for Business Enterprises may differ in certain respects from the calculation
under IFRS Accounting Standards. The declaration, payment and amount of any future dividends are
subject to the discretion of our Directors, after taking into account various factors, including but not
limited to our results of operations, financial condition, cash flows, capital expenditure requirements,
market conditions, our strategic plans and prospects for business development, regulatory restrictions
on the payment of dividends and other factors as our Directors may deem relevant, and subject to the
approval at Shareholders’ meeting. Any declaration and payment as well as the amount of dividends
will be subject to our constitutional documents and the applicable PRC laws and regulations. See
“Financial Information—Dividends” for more details of our dividend policy. No dividend shall be
declared or payable except out of our profits and reserves lawfully available for distribution. Our
historical dividends should not be taken as indicative of our dividend policy in the future.
Under the existing PRC foreign exchange regulations, payments of current account items,
including profit distributions, interest payments and trade and service-related foreign exchange
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transactions, can be made in foreign currencies without prior SAFE approval by complying with
certain procedural requirements. However, approval from or registration with competent government
authorities is required where Renminbi is to be converted into foreign currency and remitted out of
China to pay capital expenses such as the repayment of loans denominated in foreign currencies. If the
foreign exchange administration system prevents us from obtaining sufficient foreign currencies to
satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our
Shareholders. Further, we cannot assure you that new regulations will not be promulgated in the future
that would have the effect of further restricting the remittance of Renminbi into or out of China.
You should not place any reliance on any information released by us in connection with the
listing of our A Shares on the Shenzhen Stock Exchange.
As our A Shares are listed on the Shenzhen Stock Exchange, we have been subject to periodic
reporting and other information disclosure requirements in China. As a result, from time to time, we
publicly release information relating to us on the Shenzhen Stock Exchange or other media outlets
designated by the CSRC. However, the information announced by us in connection with our A Shares
listing is based on regulatory requirements of the securities authorities, industry standards and market
practices in China, which are different from those applicable to the Global Offering. The presentation
of financial and operational information for the Track Record Period disclosed on the Shenzhen Stock
Exchange or other media outlets may not be directly comparable to the financial and operational
information contained in this prospectus. Therefore, prospective investors in our H Shares should be
reminded that, in making their investment decisions as to whether to purchase our H Shares, they
should rely only on the financial, operating and other information included in this prospectus. By
applying to purchase our H Shares in the Global Offering, you will be deemed to have agreed that you
will not rely on any information other than that contained in this prospectus and any formal
announcements made by us in Hong Kong with respect to the Global Offering.
You should read the entire document carefully and only rely on the information included in this
prospectus to make your investment decision, and we strongly caution you not to rely on any
information contained in press articles or other media coverage relating to us, our Shares or the
Global Offering.
We strongly caution our investors not to rely on any information contained in press articles or
other media regarding us, our Shares and the Global Offering. Prior to the publication of this
prospectus, there may be press and media coverage regarding the Global Offering and us. 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 our investors should not rely on such information.
Certain facts, forecasts and other statistics in this prospectus obtained from publicly available
sources have not been independently verified and may not be reliable.
Certain facts, forecasts and other statistics in this prospectus are derived from various
government and official resources. Nevertheless, information from official government sources has not
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been independently verified by us, the Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners or any of their respective affiliates or advisers and, therefore, we
make no representation as to the accuracy of such facts and statistics.
Forward-looking statements contained in this prospectus are subject to risks and uncertainties.
This prospectus contains forward-looking statements with respect to our business strategies,
operating efficiencies, competitive positions, growth opportunities for existing operations, plans and
objectives of management, certain pro forma information and other matters. The words “aim,”
“anticipate,” “believe,” “could,” “predict,” “potential,” “continue,” “expect,” “intend,” “may,”
“might,” “plan,” “seek,” “will,” “would,” “should” and the negative of these terms and other similar
expressions identify a number of these forward-looking statements. These forward-looking statements,
including those relating to our future business prospects, capital expenditure, cash flows, working
capital, liquidity and capital resources, are estimates reflecting the best judgment of our Directors and
management and involve a number of risks and uncertainties that could cause actual results to differ
materially from those suggested by the forward-looking statements. Consequently, these forward-
looking statements should be considered in light of various important factors, including those set out in
this section. Accordingly, such statements are not a guarantee of future performance and investors
should not place undue reliance on them. See “Forward-looking Statements” for more details.
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WAIVERS AND EXEMPTIONS
In preparation for the Global Offering, we have sought the following waivers from strict
compliance with the relevant provisions of the Listing Rules and exemptions from the Companies
(Winding up and Miscellaneous Provisions) Ordinance:
MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rule 8.12 of the Listing Rules, we must have a sufficient management presence in
Hong Kong. This normally means that at least two of our executive Directors must be ordinarily
resident in Hong Kong. Rule 19A.15 of the Listing Rules further provides that the requirement in Rule
8.12 of the Listing Rules may be waived by having regard to, among other considerations, the
arrangements for maintaining regular communication with the Stock Exchange.
Our management, business operations and assets are primarily based outside Hong Kong. Our
headquarters and our business operations are primarily based, managed and conducted in the PRC. As
our executive Directors play very important roles in our business operation, it is in our best interest for
them to be based in the places where the Group has significant operations. We consider it practicably
difficult and commercially unreasonable for us to arrange for two executive Directors to be ordinarily
reside in Hong Kong, either by means of relocation of our executive Directors to Hong Kong or
appointment additional executive Directors. Therefore, we do not have, and in the foreseeable future
will not have, sufficient management presence in Hong Kong for the purpose of satisfying the
requirements under the Listing Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has granted
us, a waiver from strict compliance with Rule 8.12 and Rule 19A.15 of the Listing Rules. The
Company has made the following arrangements to maintain effective communication between the
Stock Exchange and us:
(i) pursuant to Rule 3.05 of the Listing Rules, we have appointed and will continue to
maintain two authorized representatives (the “ Authorized Representatives ”), namely
Ms. Zhang, one of our executive Directors, and Ms. Yeung Siu Wai Kitty (
เʃᅆ)( “Ms
Yeung”), who will act as the Company’s principal channel of communication with the
Stock Exchange. The Authorized Representatives will be readily contactable by phone and
email to promptly deal with enquiries from the Stock Exchange, and will also be available
to meet with the Stock Exchange to discuss any matter within a reasonable period of time
upon request of the Stock Exchange;
(ii) when the Stock Exchange wishes to contact our Directors on any matter, each of the
Authorized Representatives will have all necessary means to contact all of our Directors
(including our independent non-executive Directors) promptly at all times. In the event
that any Director expects to travel or otherwise be out of office, he/she will provide a
contactable phone number to the Authorized Representatives. Pursuant to Rule 3.20 of the
Listing Rules, each of our Directors shall provide their telephone number, mobile phone
number, facsimile number (if available), email address (if available), residential address
and correspondence address to the Stock Exchange. To the best of our knowledge and
information, each Director who does not ordinarily reside in Hong Kong possesses or can
apply for valid travel documents to visit Hong Kong and can meet with the Stock
Exchange within a reasonable period upon request of the Stock Exchange;
(iii) we have appointed Red Solar Capital Limited as our compliance adviser (the
“Compliance Adviser ”) upon Listing pursuant to Rule 3A.19 of the Listing Rules for a
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period commencing on the Listing Date and ending on the date on which the Company
complies with Rule 13.46 of the Listing Rules in respect of its financial results for the first
full financial year commencing after the Listing Date. The Compliance Adviser will serve
as the additional channel of communication with the Stock Exchange when the Authorized
Representatives are not available and will have access at all times to the Authorized
Representatives, the Directors and the senior management who will provide such
information and assistance as our Compliance Adviser may reasonably request in
connection with the performance of its duties as set out in Chapter 3A of the Listing Rules;
and
(iv) we will appoint other professional advisers (including legal adviser in Hong Kong) after
the Listing to assist us in dealing with any questions which may be raised by the Stock
Exchange and to ensure that there will be prompt and effective communication with the
Stock Exchange.
We will inform the Stock Exchange as soon as practicable in respect of any change in the
Authorized Representatives and/or the Compliance Adviser in accordance with the Listing Rules.
APPOINTMENT OF JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, we must appoint a company secretary
who, by virtue of his/her academic or professional qualifications or relevant experience, is, in the
opinion of the Stock Exchange, capable of discharging the functions of the company secretary.
Note 1 to Rule 3.28 of the Listing Rules further provides that the Stock Exchange considers the
following academic or professional qualifications to be acceptable:
(i) a member of The Hong Kong Chartered Governance Institute;
(ii) a solicitor or barrister as defined in the Legal Practitioners Ordinance (Chapter 159 of the
Laws of Hong Kong); and
(iii) a certified public accountant as defined in the Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong).
Note 2 to Rule 3.28 of the Listing Rules further sets out the factors that the Stock Exchange
will consider in assessing an individual’s “relevant experience”:
(i) length of employment with the issuer and other issuers and the roles he or she played;
(ii) familiarity with the Listing Rules and other relevant law and regulations including the
Securities and Futures Ordinance, the Companies Ordinance, the Companies (Winding Up
and Miscellaneous Provisions) Ordinance and the Takeovers Codes;
(iii) relevant training taken and/or to be taken in addition to the minimum requirement under
Rule 3.29 of the Listing Rules; and
(iv) professional qualifications in other jurisdictions.
Pursuant to Chapter 3.10 of the Guide for New Listing Applicants, the Stock Exchange will
consider a waiver application in relation to Rules 3.28 and 8.17 of the Listing Rules based on the
specific facts and circumstances. Factors that will be considered by the Stock Exchange include:
(i) whether the applicant has principal business activities primarily outside Hong Kong;
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WAIVERS AND EXEMPTIONS
(ii) whether the applicant is able to demonstrate the need to appoint a person who does not
have the acceptable qualification nor relevant experience as a company secretary; and
(iii) why the directors consider the proposed company secretary to be suitable to act as the
issuer’s company secretary.
Further, pursuant to Chapter 3.10 of the Guide for New Listing Applicants, such waiver, if
granted, will be for a fixed period of time (the “ Waiver Period”) and on the following conditions:
(i) the proposed company secretary must be assisted by a person who possesses the
qualifications or experience as required under Rule 3.28 of the Listing Rules and is
appointed as a joint company secretary throughout the Waiver Period; and
(ii) the waiver will be revoked if there are material breaches of the Listing Rules by the
applicant.
Our Group’s principal business operations are in the PRC. We consider that apart from being
able to meet the professional qualification or the relevant experience requirements under the Listing
Rules, its company secretary also needs to have (i) experience relevant to our Company’s operations;
(ii) nexus to the Board; and (iii) close working relationship with the management of our Company, in
order to perform the function of a company secretary and to take the necessary actions in the most
effective and efficient manner. It is for the benefit of our Company to appoint a person who is familiar
with our business and affairs as a company secretary.
Our Company has appointed Ms. Zhang, who also serves as the secretary to the Board, as one
of the joint company secretaries. Our Company believes that it would be in the best interests of our
Company and the corporate governance of our Group to appoint Ms. Zhang who has extensive
experience of the Group’s board and corporate management matters as a joint company secretary.
Since Ms. Zhang presently does not possess any of the qualifications under Rules 3.28 and 8.17 of the
Listing Rules, she may not be able to solely fulfill the requirements of the Listing Rules. Therefore, we
have appointed Ms. Yeung, who fully meets the requirements stipulated under Rules 3.28 and 8.17 of
the Listing Rules to act as the other joint company secretary and to provide assistance to Ms. Zhang for
an initial period of three years from the Listing Date to enable Ms. Zhang to acquire the “relevant
experience” under Note 2 to Rule 3.28 of the Listing Rules so as to fully comply with the requirements
set forth under Rules 3.28 and 8.17 of the Listing Rules. For biographical details of Ms. Zhang and
Ms. Yeung, see “Directors and Senior Management.”
Given Ms. Yeung’s professional qualification and experience, she will be able to explain to
both Ms. Zhang and our Company the relevant requirements under the Listing Rules and other
applicable Hong Kong laws and regulations. Ms. Yeung will also assist Ms. Zhang in organizing Board
meetings and Shareholders’ general meetings as well as other matters of our Company which are
incidental to the duties of a company secretary. Ms. Yeung is expected to work closely with Ms. Zhang
and will maintain regular contact with Ms. Zhang, the Directors and the senior management of the
Company. Ms. Zhang will comply with the annual professional training requirement under Rule 3.29
of the Listing Rules and will enhance his knowledge of the Listing Rules during the three-year period
from the Listing Date. We will further ensure that Ms. Zhang will also be assisted by our Compliance
Adviser and our legal adviser as to Hong Kong law on matters in relation to our ongoing compliance
with the Listing Rules and the applicable laws and regulations.
Since Ms. Zhang does not possess the formal qualifications required of a company secretary
under Rule 3.28 of the Listing Rules, we have applied to the Stock Exchange for, and the Stock
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Exchange has granted, a waiver from strict compliance with the requirements under Rules 3.28 and
8.17 of the Listing Rules such that Ms. Zhang may be appointed as a joint company secretary of our
Company. The waiver is valid for an initial period of three years from the Listing Date on the
conditions that (i) Ms. Zhang must be assisted by Ms. Yeung, who possesses the qualifications and
experience required under Rule 3.28 of the Listing Rules and is appointed as a joint company secretary
throughout the Waiver Period; and (ii) the waiver will be revoked immediately if and when Ms. Yeung,
during the Waiver Period, ceases to provide such assistance to Ms. Zhang as a joint company secretary
or if there are material breaches of the Listing Rules by our Company.
Before the expiration of the initial three-year period, the qualifications of Ms. Zhang will be
re-evaluated to determine whether the requirements as stipulated in Rules 3.28 and 8.17 of the Listing
Rules can be satisfied and whether the need for ongoing assistance will continue. We will liaise with
the Stock Exchange to enable it to assess whether Ms. Zhang, having benefited from the assistance of
Ms. Yeung for the preceding three years, will have acquired the skills necessary to carry out the duties
of a company secretary and the relevant experience within the meaning of Note 2 to Rule 3.28 of the
Listing Rules so that a further waiver will not be necessary.
ALLOCATION OF H SHARES TO EXISTING MINORITY SHAREHOLDERS AND THEIR
CLOSE ASSOCIATES
Rule 10.04 of the Listing Rules requires that a person who is an existing shareholder of the
issuer may only subscribe for or purchase any securities for which listing is sought which are being
marketed by or on behalf of the issuer either in his or its own name or through nominees if the
conditions in Rules 10.03(1) and (2) of the Listing Rules are fulfilled. Rule 10.03(1) of the Listing
Rules provides that no securities may be offered to existing shareholders on a preferential basis and no
preferential treatment may be given to them in the allocation of the securities, and Rule 10.03(2) of the
Listing Rules provides that the minimum prescribed percentage of public shareholders required by
Rule 8.08(1) of the Listing Rules must be achieved.
Paragraph 1C(2) of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to the existing shareholders of the applicant or their close associates, whether in their own
names or through nominees, in the Global Offering unless the conditions set out in Rules 10.03 and
10.04 of the Listing Rules are fulfilled.
Chapter 4.15 of the Guide for New Listing Applicants provides that the Stock Exchange will
consider giving consent and granting waiver from Rule 10.04 of the Listing Rules to an applicant’s
existing shareholders or their close associates to participate in an initial public offering if any actual or
perceived preferential treatment arising from their ability to influence the applicant during the
allocation process can be addressed.
Prior to the Listing, our Company’s share capital comprises entirely A Shares listed on the
Shenzhen Stock Exchange. We have a large and widely dispersed public A Shareholder base, thus it
would be unduly burdensome for us to seek the prior consent of the Stock Exchange for each of our
minority existing Shareholders or their close associates who subscribe for the H Shares in the Global
Offering.
We have applied to the Stock Exchange for, and the Stock Exchange has granted to us, a waiver
from strict compliance with the requirements under Rule 10.04 and consent under Paragraph 1C(2) of
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Appendix F1 to the Listing Rules to permit H Shares in the International Offering to be placed to
certain existing minority Shareholders who (i) hold less than 5% of the total number of A Shares in
issue of our Company prior to the completion of the Global Offering and (ii) are not and will not
become (upon the completion of the Global Offering) core connected persons of our Company or the
close associates of any such core connected person (together, the “ Existing Minority Shareholders ”),
subject to the conditions as follows:
(i) each Existing Minority Shareholder to whom our Company may allocate the H Shares in
the International Offering holds less than 5% of the voting rights of our Company prior to
the completion of the Global Offering;
(ii) each Existing Minority Shareholder is not, and will not be, a core connected person of
our Company or any close associate of any such core connected person immediately prior
to or following the Global Offering;
(iii) none of the Existing Minority Shareholders have the right to appoint a Director and/or
have any other special rights in our Company;
(iv) allocation to the Existing Minority Shareholders and/or their close associates will not
affect our ability to satisfy the public float requirement as prescribed by the Stock
Exchange under Rule 8.08(1) (as amended and replaced by Rule 19A.13A(2) when
applied to PRC issuers with other listed shares) of the Listing Rules or otherwise
approved by the Stock Exchange;
(v) the Joint Sponsors will confirm to the Stock Exchange in writing that based on (a) their
discussions with our Company and the Overall Coordinators and (b) the confirmations
provided to the Stock Exchange by our Company and the Overall Coordinators
(confirmations as mentioned in (vi) and (vii) below), and to the best of their knowledge
and belief, they have no reason to believe that any of the Existing Minority Shareholders
and/or their close associates received any preferential treatment, or is in a position to
exert influence on the Company to obtain actual or perceived preferential treatment in the
allocation either as a cornerstone investor or as a placee by virtue of their relationship
with our Company, other than, in the case of participation as cornerstone investors, the
preferential treatment of assured entitlement under a cornerstone investment following
the principles set out in Chapter 4.15 of the Guide for New Listing Applicants, the
Existing Minority Shareholders or their close associates’ cornerstone investment
agreements do not contain any material terms which are more favorable to the Existing
Minority Shareholders or their close associates than those in other cornerstone
investment agreement, and the details of allocation to the Existing Minority Shareholders
holding more than 1% in the issued share capital of the Company immediately prior to
the completion of the Global Offering and/or their close associates will be disclosed in
this prospectus and/or the allotment results announcement, as the case may be;
(vi) our Company will confirm to the Stock Exchange in writing that based on (a) its
discussions with the Overall Coordinators and (b) the confirmations provided by to the
Stock Exchange by the Joint Sponsors (confirmations as mentioned in (v) above), and to
the best of its knowledge and belief:
(a) in the case of participation as cornerstone investors, no preferential treatment has
been, nor will be, given to the Existing Minority Shareholders and/or their close
associates by virtue of their relationship with our Company, other than the
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preferential treatment of assured entitlement under a cornerstone investment
following the principles set out in Chapter 4.15 of the Guide for New Listing
Applicants, nor is the Existing Minority Shareholder in a position to exert influence
on the Company to obtain actual or perceived preferential treatment, and the
Existing Minority Shareholders or their close associates’ cornerstone investment
agreements do not contain any material terms which are more favorable to the
Existing Minority Shareholders and/or their close associates than those in other
cornerstone investment agreements; or
(b) in the case of participation as placees, no preferential treatment has been, nor will
be, given to the Existing Minority Shareholders or their close associates, nor is the
Existing Minority Shareholder in a position to exert influence on the Company to
obtain actual or perceived preferential treatment, by virtue of their relationship with
our Company in any allocation in the placing tranche;
(vii) in the case of participation as cornerstone investors, the Overall Coordinators will
confirm to the Exchange that no preferential treatment has been, nor will be, given to the
Existing Minority Shareholders and/or their close associates by virtue of their
relationship with our Company, other than the preferential treatment of assured
entitlement under a cornerstone investment following the principles set out in Chapter
4.15 of the Guide for New Listing Applicants, and the Existing Minority Shareholders or
their close associates’ cornerstone investment agreements do not contain any material
terms which are more favorable to the Existing Minority Shareholders or their close
associates than those in other cornerstone investment agreement;
(viii) in the case of participation as placees, the Overall Coordinators will confirm to the Stock
Exchange that, to the best of their knowledge and belief, no preferential treatment has
been, nor will be, given to the Existing Minority Shareholders and/or their close
associates by virtue of their relationship with our Company in any allocation in the
International Offering
DISCLOSURE REQUIREMENTS IN RESPECT OF OUTSTANDING SHARE INCENTIVES
The Listing Rules and the Companies (Winding Up and Miscellaneous Provisions) Ordinance
prescribe certain disclosure requirements in relation to the restricted stocks and the share options
granted by our Company (the “ Share Incentives Disclosure Requirements ”):
(i) Rule 17.02(1)(b) of the Listing Rules stipulates that all material terms of a share scheme
must be clearly set out in this prospectus. Our Company is also required to disclose in
this prospectus full details of all outstanding Share Incentives and their potential dilution
effect on the shareholdings upon the Listing as well as the impact on the earnings per
share arising from the issue of shares in respect of such outstanding Share Incentives;
(ii) paragraph 27 of Appendix D1A to the Listing Rules requires our Company to set out in
this prospectus particulars of any capital of any member of our Group that is under
option, or agreed conditionally or unconditionally to be put under option, including the
consideration for which the option was or will be granted and the price and duration of
the option, and the name and address of the grantee; and
(iii) paragraph 10 of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance requires that our Company shall disclose in this prospectus the
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WAIVERS AND EXEMPTIONS
number, description and amount of any shares in or debentures of our Company which
any person has or is entitled to be given, an option to subscribe for, together with the
following particulars of the option, that is to say, (a) the period during which it is
exercisable; (b) the price to be paid for shares or debentures subscribed for under it;
(c) the consideration (if any) given or to be given for it or for the right to it; (d) the names
and addresses of the persons to whom it or the right to it was given or, if given to existing
shareholders or debenture holders as such, the relevant shares or debentures.
Paragraph 6 of Chapter 3.6 of the Guide for New Listing Applicants provides that in general,
the Stock Exchange would grant waivers from disclosing the names and addresses of certain grantees
in the listing document.
Paragraph 7 of Chapter 3.6 of the Guide for New Listing Applicants further provides that a
waiver from the Share Incentives Disclosure Requirements is at least subject to the following
conditions (the “Waiver Conditions”):
(i) demonstrating that the disclosure required under the relevant Listing Rules would be
irrelevant or unduly burdensome;
(ii) disclosing the following in this prospectus:
(a) for each of the grantees who is (1) a director, (2) a member of the senior
management, or (3) a connected person, all the particulars required under the Share
Incentives Disclosure Requirements;
(b) for the remaining grantees, on an aggregate basis, (1) the aggregate number of
grantees and the number of shares underlying the outstanding Share Incentives;
(2) the vesting period for the restricted stocks or the exercise period of each option;
(3) the consideration paid for the options; and (4) the grant price of the restricted
stocks or the exercise price of the options; and
(c) the aggregate number of underlying shares required to be under the Share Incentive
Plans; the percentage of such aggregate number of underlying shares to the issued
share capital; and the dilution effect and impact on earnings per share upon full
vesting of the restricted stocks or full exercise of the options under the Share
Incentive Plans; and
(iii) making available for public inspection a full list of all grantees under the Share Incentive
Plans with all the particulars required under Share Incentives Disclosure Requirements.
Our Company, from time to time, adopted the Share Incentive Plans, details of which are set out
in “Appendix VI — Statutory and General Information — Share Incentive Plans” to this prospectus. As
of the Latest Practicable Date, each of the 2021 Share Incentive Plan (the “ Restricted Stock Incentive
Plan”), the 2022 Share Incentive Plan, the 2023 Share Incentive Plan, the 2025 Share Incentive Plan and
the 2025 Second Tranche Share Incentive Plan (the “ Stock Option Incentive Plans ”) was in effect, to
which the Share Incentives Disclosure Requirements are applicable.
As of the Latest Practicable Date, the total number of A Shares underlying all outstanding
Share Incentives under the Share Incentive Plans amounted to 29,363,143, accounting for
approximately 4.35% of the total issued Shares upon completion of the Global Offering (assuming the
Over-allotment Option is not exercised and no other changes are made to the issued share capital of our
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Company between the Latest Practicable Date and the Listing), among which the total number of A
Shares underlying all outstanding restricted stocks and options under the Restricted Stock Incentive
Plan and the Stock Option Incentive Plans amounted to 397,948 and 28,965,195, accounting for
approximately 0.06% and 4.29% of the total issued Shares, respectively, upon completion of the
Global Offering (assuming the Over-allotment Option is not exercised and no other changes are made
to the issued share capital of our Company between the Latest Practicable Date and the Listing).
We have applied to (i) the Stock Exchange for a waiver from strict compliance with the
disclosure requirements under Rule 17.02(1)(b) of, and paragraph 27 of Appendix D1A to, the Listing
Rules, and (ii) the SFC for a certificate of exemption under section 342A of the Companies (Winding
Up and Miscellaneous Provisions) Ordinance, exempting our Company from strict compliance with
paragraph 10(d) of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, respectively, on the grounds that strict compliance with the Share Incentives Disclosure
Requirements would be unduly burdensome for our Company and the waiver and exemption would not
prejudice the interest of the investing public, taking into account the following reasons:
(i) given that 1,674 grantees (other than director, senior management or connected persons
of the Company) (“ Other Grantees”) are involved in the Share Incentive Plans as of the
Latest Practicable Date, strict compliance with such disclosure requirements in setting
out full details of all the grantees under the Share Incentive Plans in this prospectus
would be costly and unduly burdensome for our Company in light of a significant
increase in cost and time for information compilation and prospectus preparation. For
example, the disclosure of personal information of each grantee may require the consent
of all grantees to comply with personal information privacy laws and principles. Given
the number of grantees, obtaining their consent would cause an unnecessary burden on
our Company;
(ii) full disclosure of the restricted stocks or stock options granted to each grantee could
provide our employees with access to information about the remuneration of their peers
or other employees, which may have a negative impact on employee morale, lead to
negative internal competition and result in increased costs of recruiting and retaining
talents. On the contrary, not disclosing such details in full will allow us more flexibility
in determining our remuneration policies and details;
(iii) full disclosure of the details of the grantees and the respective restricted stocks or stock
options granted to them will provide competitors with details of our employee
remuneration and facilitate their recruitment activities, which may affect our Group’s
ability to recruit and retain valuable personnel;
(iv) the grant and exercise in full of the restricted stocks or stock options under the Share
Incentive Plans will not cause any material adverse impact to the financial position of our
Group;
(v) there will not be any new H Shares issued under the Share Incentive Plans as such plans
are A-Share incentive plans;
(vi) not fully compliant with the Share Incentives Disclosure Requirements would not prevent
our Company from providing our potential investors with an informed assessment of the
activities, assets, liabilities, financial position, management and prospects of our
Company; and
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WAIVERS AND EXEMPTIONS
(vii) material information relating to the Share Incentives, including most of the information
required under the Waiver Conditions, has been disclosed in this prospectus to provide
prospective investors with sufficient information to make an informed decision.
Therefore, we have applied for, and the Stock Exchange has granted us, a waiver from strict
compliance with Rule 17.02(1)(b) of, and paragraph 27 of Appendix D1A to, the Listing Rules in
relation to the Share Incentive Plans on the conditions that:
(i) a summary of the terms of the Share Incentive Plans is disclosed in “Appendix VI —
Statutory and General Information — Share Incentive Plans” to this prospectus;
(ii) on an individual basis, full details of the Share Incentives granted by our Company under
the Share Incentive Plans to each of our Directors, senior management and connected
persons are disclosed in this prospectus, such details to include all the particulars
required under Rule 17.02(1)(b) of, and paragraph 27 of Appendix D1A to, the Listing
Rules, and paragraph 10 of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance;
(iii) in respect of the Share Incentives granted by our Company under the Share Incentive
Plans to employees other than those referred to in (ii) above, disclosures are made in the
prospectus, on an aggregate basis, by band based on the number of A Shares underlying
each individual grantees, being (a) 1 to 29,999; (b) 30,000 to 99,999; and (c) 100,000 and
above. For each lot of A Shares under the Share Incentive Plans, the following details are
disclosed in the prospectus: (a) the aggregate number of grantees and the number of A
Shares subject to the Share Incentives, (b) the consideration paid for the grant of the
Share Incentives, and (c) vesting/ exercise period and grant/ exercise price for the Share
Incentives;
(iv) the total number of A Shares underlying the outstanding Share Incentive Plans and the
percentage to our total issued Shares represented by such number of A Shares upon
Listing are disclosed in “Appendix VI — Statutory and General Information — Share
Incentive Plans” to this prospectus;
(v) the dilutive effect and impact on earnings per share upon the full vesting of the restricted
stocks or full exercise of the stock options upon completion of the Global Offering
(assuming the Over-allotment Option is not exercised and no other changes are made to
the issued share capital of our Company between the Latest Practicable Date and the
Listing) are disclosed in “Appendix VI — Statutory and General Information — Share
Incentive Plans” to this prospectus;
(vi) a full list of all the grantees (including the persons referred to in (ii) above) who have
been granted Share Incentives to subscribe for A Shares under the Share Incentive Plans,
containing all the particulars as required under Rule 17.02(1)(b) of, and paragraph 27 of
Appendix D1A to, the Listing Rules and paragraph 10 of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance, is made available for
public inspection in accordance with the section headed “Documents Delivered to the
Registrar of Companies and Available on Display” in Appendix VII to this prospectus;
(vii) the particulars of the waiver and the exemption will be disclosed in this prospectus; and
(viii) the grant of a certificate of exemption under the Companies (Winding Up and
Miscellaneous Provisions) Ordinance from the SFC exempting our Company from strict
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WAIVERS AND EXEMPTIONS
compliance with paragraph 10(d) of the Third Schedule to the Companies (Winding Up
and Miscellaneous Provisions) Ordinance.
We have applied for, and the SFC has granted us, a certificate of exemption under section 342A
of the Companies (Winding Up and Miscellaneous Provisions) Ordinance from strict compliance with
paragraph 10(d) of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance on the conditions that:
(i) full details of the Share Incentives granted by our Company under the Share Incentive
Plans to each of our Directors, senior management and connected persons are disclosed
in this prospectus, such details to include all the particulars required under paragraph 10;
(ii) in respect of the Share Incentives granted by our Company under the Share Incentive
Plans to employees other than those referred to in (i) above, disclosures are made in the
prospectus, on an aggregate basis, categorized into lots based on the number of A Shares
underlying each individual grantees, being (a) 1 to 29,999; (b) 30,000 to 99,999; and
(c) 100,000 and above. For each lot of A Shares under the Share Incentive Plans, the
following details are disclosed in the prospectus: (a) the aggregate number of grantees
and the number of A Shares subject to the Share Incentives, (b) the consideration paid for
the grant of the Share Incentives, and (c) the exercise period and exercise price for the
Share Incentives;
(iii) a full list of all the grantees (including the persons referred to in (i) above) who have
been granted Share Incentives to subscribe for A Shares under the Share Incentive Plans,
containing all the particulars as required under paragraph 10 of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance, be made available
for public inspection in accordance with the section headed “Documents Delivered to the
Registrar of Companies and Available on Display” in Appendix VII to this prospectus;
and
(iv) the particulars of the exemption are disclosed in this prospectus and the prospectus will
be issued on or before June 17, 2026.
DISCLOSURE OF OFFER PRICE
Paragraph 15(2)(c) of Appendix D1A to the Listing Rules provides that the issue price or offer
price of each security must be disclosed in the prospectus. Pursuant to Paragraph 12 of Chapter 4.14 of
the Listing Guide, the Stock Exchange also allows an indicative offer price range to be included in the
prospectus, as an alternative to the disclosure of a fixed offer price.
We have applied to the Stock Exchange a waiver from strict compliance with paragraph
15(2)(c) of Appendix D1A to the Listing Rules so that the Company will only disclose the maximum
Offer Price in this prospectus on the below basis:
(a) the Offer Price will be determined with reference to, among other factors, the closing price
of the Company’s A Shares on the Shenzhen Stock Exchange on the last trading day on or
before the Price Determination Date. Our Company is unable to control the trading price
of our A Shares on the Shenzhen Stock Exchange;
(b) setting a fixed offer price or an offer price range with a low-end may adversely affect
(i) the market price of our A Shares, (ii) our ability to price the Offer Shares given
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WAIVERS AND EXEMPTIONS
potential price fluctuations of our A Shares during the period from the date of this
prospectus until the pricing of the Global Offering; and (iii) our ability to price our
H Shares in the best interests of our Shareholders and the market price of the A Shares and
the Hong Kong Offer Shares;
(c) pursuant to paragraphs 9 and 10(b) of Part A under the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance, the amount payable on
application and allotment on each share, and the price to be paid for shares subscribed for,
shall be specified in the prospectus, respectively. Disclosure of a maximum offer price
complies with the requirements prescribed under paragraphs 9 and 10(b) of Part A under
the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance by providing a clear indication of the maximum subscription consideration a
potential investor shall pay for the Offer Shares; and
(d) a maximum Offer Price will be disclosed in this prospectus. This alternative disclosure
approach would not prejudice the interests of the investing public in Hong Kong.
The Stock Exchange has granted, a waiver from strict compliance with paragraph 15(2)(c) of
Appendix D1A to the Listing Rules on the conditions that this prospectus will disclose:
(a) the maximum Offer Price;
(b) the time for the determination of the Offer Price and the form of its publication;
(c) the historical prices of our A Shares and trading volume on the Shenzhen Stock Exchange
during the Track Record Period and up to the Latest Practicable Date;
(d) the determinants of the final Offer Price;
(e) the source for investor to access the latest market price of the Company’s A Shares; and
(f) in no circumstances will the final Offer Price be greater than the maximum Offer Price as
stated in this prospectus.
See “Structure of the Global Offering — Pricing and Allocation” for the historical prices of our
A Shares and trading volume on the Shenzhen Stock Exchange.
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INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors (including any proposed Director who is named as
such in this prospectus) collectively and individually accept full responsibility, includes particulars
given in compliance with the 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 to the public with regard to our Group. Our
Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief,
the information contained in this prospectus is accurate and complete in all material respects and not
misleading or deceptive, and there are no other matters the omission of which would make any
statement herein or this prospectus misleading.
CSRC FILING
According to the Trial Measures for Overseas Listing, we are required to complete the filing
procedures with the CSRC in connection with the proposed Listing. We have submitted a filing to the
CSRC for application for the Listing on September 29, 2025. The CSRC confirmed completion of such
filing on March 26, 2026.
INFORMATION ON THE GLOBAL OFFERING
This prospectus is published solely in connection with the Hong Kong Public Offering, which
forms part of the Global Offering. For applications under the Hong Kong Public Offering, this
prospectus contains the terms and conditions of the Hong Kong Public Offering.
The Hong Kong Offer Shares are offered solely on the basis of the information contained and
representations made in this prospectus and on the terms and subject to the conditions set out herein
and therein. No person is authorized to give any information in connection with the Global Offering or
to make any representation not contained in this prospectus, and any information or representation not
contained herein must not be relied upon as having been authorized by our Company, the Joint
Sponsors, the Capital Market Intermediaries, the Overall Coordinators, the Joint Global Coordinators,
the Joint Bookrunners, the Joint Lead Managers, any of the Underwriters, any of our or their respective
affiliates or any of our or their respective directors, officers, employees, advisers, agents or
representatives, or any other persons or parties involved in the Global Offering.
Neither the delivery of this prospectus nor any offering, sale, delivery, subscription or
acquisition made in connection with the Offer Shares shall, under any circumstances, constitute a
representation or create any implication that there has been no change in our affairs since the date of
this prospectus or that the information in this prospectus is correct as of any date subsequent to the date
of this prospectus.
For details of the structure of the Global Offering, including its conditions and the
arrangements relating to the Over-allotment Option and stabilization, see “Structure of the Global
Offering.”
RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering will
be required to, or be deemed by his/her/its acquisition of the Hong Kong Offer Shares to, confirm that
he/she/it is aware of the restrictions on the offer and sale of the Hong Kong Offer Shares described in
this prospectus.
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INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
No action has been taken to permit a public offering of the Offer Shares outside Hong Kong or
the distribution of this prospectus in any jurisdiction other than Hong Kong. Accordingly, and without
limitation to the following, this prospectus may not be used for the purpose of, and does not constitute,
an offer or invitation in any jurisdiction or in any circumstances where such an offer or invitation is not
authorized or to any person to whom it is unlawful to make such an offer or invitation for subscription.
The distribution of this prospectus and the offering and sale of the Offer Shares in other jurisdictions
are subject to restrictions and may not be made except as permitted under the applicable securities laws
of such jurisdictions pursuant to registration with or authorization by the relevant securities regulatory
authorities or an exemption therefrom. In particular, the Offer Shares have not been offered and sold,
and will not be offered and sold, directly or indirectly, in the PRC.
UNDERWRITING
The Listing is sponsored by the Joint Sponsors and the Global Offering is managed by the
Overall Coordinators. Pursuant to the Hong Kong Underwriting Agreement, the Hong Kong Public
Offering is 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 and subject to the terms and conditions of the International
Underwriting Agreement. For further details on the Underwriters and the underwriting arrangements,
see “Underwriting.”
APPLICATION FOR LISTING OF THE H SHARES ON THE STOCK EXCHANGE
We have applied to the Stock Exchange for the listing of, and permission to deal in, the H
Shares to be issued pursuant to the Global Offering (including any H Shares which may be issued
pursuant to the exercise of the Over-allotment Option).
Dealings in the H Shares on the Stock Exchange are expected to commence on Friday, June 26,
2026. Except for the A Shares that have been listed on the Shenzhen Stock Exchange and our pending
application to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the H
Shares, no part of our share capital or debt securities is listed on or dealt in on the Hong Kong Stock
Exchange or any other stock exchange, and no such listing or permission to list is being or proposed to
be sought in the near future.
Under Section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any application will be invalid if the listing of, and
permission to deal in, the H Shares on the Stock Exchange is refused before the expiration of three
weeks from the date of the closing of the application lists, or such longer period (not exceeding six
weeks) as may, within the said three weeks, be notified to our Company by or on behalf of the Stock
Exchange.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of listing of, and permission to deal in, the H Shares on the Stock
Exchange and our compliance with the stock admission requirements of HKSCC, the H Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect
from the Listing Date or any other date as determined by HKSCC. Settlement of transactions between
participants of the Stock Exchange is required to take place in CCASS on the second Business Day
after any trading day. All activities under CCASS are subject to the General Rules of CCASS and
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INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
CCASS Operational Procedures in effect from time to time. All necessary arrangements have been
made for the H Shares to be admitted in to CCASS. Investors should seek the advice of their
stockbrokers or other professional advisers for details of the settlement arrangements as such
arrangements may affect their rights and interests.
H SHARE REGISTER OF MEMBERS AND STAMP DUTY
All H Shares issued pursuant to applications made in the Global Offering will be registered on
our H Share register of members to be maintained in Hong Kong by our H Share Registrar, Tricor
Investor Services Limited. Our principal register of members will be maintained by us at our
headquarters in the PRC.
Dealings in the H Shares registered in our H Share register of members will be subject to Hong
Kong stamp duty.
DIVIDENDS PAYABLE TO HOLDERS OF H SHARES
Unless determined otherwise by our Company, dividends payable in Hong Kong dollars in
respect of our H Shares will be paid to the Shareholders as recorded on our H Share register of
members of our Company in Hong Kong and sent by ordinary post, at the Shareholders’ risk, to the
registered address of each Shareholder.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their professional
advisers if they are in any doubt as to the taxation implications of subscribing for, purchasing, holding,
disposal of, dealing in or the exercise of any rights in relation to the H Shares. None of our Company,
the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the
Joint Lead Managers, the Underwriters, any of our or their respective affiliates or any of our or their
respective directors, officers, employees, advisers, agents or representatives, or any other persons or
parties involved in the Global Offering accepts responsibility for any tax effects on, or liabilities of,
any person resulting from the subscription, purchase, holding, disposal of, dealing in, or the exercise of
any rights in relation to, the H Shares.
LANGUAGE
If there is any inconsistency between the English version of this prospectus and the Chinese
translation of this prospectus, the English version of this prospectus shall prevail unless otherwise
stated. For ease of reference, the names of the Chinese laws and regulations, government authorities,
institutions, natural persons or other entities have been included in this prospectus in both the Chinese
and English languages. In the event of any inconsistency, the Chinese version shall prevail.
ROUNDING
Certain amounts and percentage figures, such as share ownership and operating data, included
in this prospectus may 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.
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INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
EXCHANGE RATE CONVERSION
Solely for your convenience, this prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars at specified rates. Unless otherwise
specified, the translation of Renminbi into Hong Kong dollars, of Renminbi into U.S. dollars and of
Hong Kong dollars into U.S. dollars, and vice versa, in this prospectus was made at the following rates:
RMB0.8705 to HK$1.00
RMB6.8198 to US$1.00
HK$7.8345 to US$1.00
The RMB to HK$ and US$ to RMB exchange rates are quoted by the PBOC for foreign
exchange transactions prevailing on June 8, 2026. No representation is made that any amounts in
Renminbi, Hong Kong dollars or U.S. dollars can be or could have been at the relevant dates converted
at the above rates or any other rates or at all.
OTHER
Unless otherwise specified, all references to any shareholdings in our Company following the
completion of the Global Offering assume that the Over-allotment Option is not exercised.
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DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
DIRECTORS
Name Address Nationality
Executive Directors
Dr. Zhang Shilong ( ੵ˰Ꮂ) No. 6, Door 2
No. 1 Jingouhe Road
Haidian District
Beijing
PRC
Chinese
Ms. Zhang Qin (
ੵා) No. 608, Door 6
No. 11 Fucheng Road
Haidian District
Beijing
PRC
Chinese
Non-executive Directors
Mr. Lin Lin (
؍؍No. 4, 3/F
No. 70 Jilin Street
Nangang District
Harbin City
Heilongjiang Province
PRC
Chinese
Ms. Liu Ming (
׼No. 6, Unit 121
No.5 Zhongguancun South Street
Haidian District
Beijing
PRC
Chinese
Independent Non-executive Directors
Dr. Du Meijie (
௫) No. 205, 21/F
No. 15 Xueyuan Road
Haidian District
Beijing
PRC
Chinese
Ms. Tang Chunlin (
؍݆ࡥRoom 1703, Unit 5, Building 46
Fucheng Fulianyuan
Yanjiao Development Zone
Sanhe City
Hebei Province
PRC
Chinese
Mr. Chan Yik Pun (
ⅳۯFlat G, Floor 24, Tower 25
South Horizons
Hong Kong
Chinese
(Hong Kong)
See “Directors and Senior Management” for further details.
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DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors, Sponsor-Overall
Coordinators, Overall
Coordinators, Joint Global
Coordinators, Joint
Bookrunners, Joint Lead
Managers and Capital Market
Intermediaries
China International Capital Corporation Hong Kong
Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road
Central
Hong Kong
Legal Advisers to our Company As to Hong Kong and United States law:
Cooley HK
35/F, Two Exchange Square
8 Connaught Place
Central
Hong Kong
As to PRC law:
JunHe LLP
20/F, China Resources Building
8 Jianguomenbei Aveue
Dongcheng District
Beijing
PRC
As to international sanctions laws:
Jun He Law Offices LLC
Suite 1919
630 Fifth Avenue, 45 Rockefeller Plaza
New York, NY 10111
United States
As to PRC sanctions laws:
JunHe LLP
20/F, China Resources Building
8 Jianguomenbei Aveue
Dongcheng District
Beijing
PRC
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DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
Legal Advisers to the Joint
Sponsors and the Underwriters
As to Hong Kong and United States law:
Clifford Chance
27/F, Jardine House
One Connaught Place
Central
Hong Kong
As to PRC law:
Shihui Partners
42/F, Tower C, Beijing Yintai Center
No. 2 Jianguomenwai Avenue
Chaoyang District
Beijing
PRC
Reporting Accountants and
Independent Auditor
Ernst & Young
Certified Public Accountants
Registered Public Interest Entity Auditor
27/F, One Taikoo Place
979 King’s Road Quarry Bay
Hong Kong
Industry Consultant Frost & Sullivan (Beijing) Inc., Shanghai Branch Co.
Room 2504, Wheelock Square
1717 Nanjing West Road
Jing’an District
Shanghai
PRC
Receiving Banks Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
CMB Wing Lung Bank Limited
45 Dex Voeux Road Central
Hong Kong
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CORPORATE INFORMATION
Registered Office, Headquarters and
Principal Place of Business in the
PRC
4-1106, 11/F
No. 87 West Third Ring Road North
Haidian District
Beijing
PRC
Principal Place of Business in
Hong Kong
Room 1910, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Company’s Website www.sg-micro.com
(The information contained on this website does not form
part of this prospectus)
Joint Company Secretaries Ms. Zhang Qin (
ੵා)
No. 11 Fucheng Road
Haidian District
Beijing
PRC
Ms. YEUNG Siu Wai Kitty (
เʃᅆ)
(ACG, HKACG)
Room 1910, 19/F, Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Authorized Representatives Ms. Zhang Qin (
ੵා)
No. 11 Fucheng Road
Haidian District
Beijing
PRC
Ms. YEUNG Siu Wai Kitty (
เʃᅆ)
(ACG, HKACG)
Room 1910, 19/F, Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Audit Committee Dr. Du Meijie (
௫)( Chairperson)
Ms. Tang Chunlin (؍݆ࡥ)
Mr. Lin Lin (؍؍)
Nomination Committee Ms. Tang Chunlin (؍݆ࡥ()Chairperson)
Dr. Du Meijie (௫)
Dr. Zhang Shilong ( ੵ˰Ꮂ)
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CORPORATE INFORMATION
Remuneration and Appraisal
Committee
Dr. Du Meijie (௫)( Chairperson)
Ms. Tang Chunlin (؍݆ࡥ)
Mr. Lin Lin (؍؍)
Strategy Committee Dr. Zhang Shilong ( ੵ˰Ꮂ)( Chairperson)
Ms. Tang Chunlin (؍݆ࡥ)
Dr. Du Meijie (௫)
Compliance Adviser Red Solar Capital Limited
(A licensed corporation under the SFO to engage in type 1
(dealing in securities) and type 6 (advising on corporate
finance) regulated activities)
402B, 4/F China Insurance Group Building
141 Des Voeux Road Central
Central
Hong Kong
H Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
Principal Banks China Merchants Bank Co., Ltd. Beijing West Third
Ring Road Sub-branch
1st & 2nd Floors
No. 67 Fushi Road
Haidian District
Beijing
PRC
Industrial and Commercial Bank of China Limited,
Beijing Yuhaiyuan Sub-branch
No. 12A
Yuquan Road
Haidian District
Beijing
PRC
China Minsheng Bank Co., Ltd., Beijing Wanliu
Sub-branch
Room 101, Building 2, Courtyard 6
Wanliu Middle Road
Haidian District
Beijing
PRC
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INDUSTRY OVERVIEW
The information and statistics set out in this section and other sections of this prospectus
were extracted from official government publications and other publicly available sources as well
as from the independent industry report prepared by Frost & Sullivan (the “Frost & Sullivan
Report”). The Company engaged Frost & Sullivan to prepare the Frost & Sullivan Report in
connection with the Global Offering. The information from official government sources has not
been independently verified by us, any of the Joint Sponsors, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of
their respective directors and advisers, or any other persons or parties involved in the Global
Offering. For discussion of risks related to the Group’s industry, see “Risk Factors—Risks
Relating to Our Business and Industry” for more details.
GLOBAL SEMICONDUCTOR INDUSTRY OVERVIEW
Classification and Market Overview of the Global Semiconductor Industry
The global semiconductor market demonstrated significant growth between 2021 and 2025,
with market size expanding from RMB3.6 trillion in 2021 to RMB4.8 trillion in 2025, representing a
CAGR of 7.8%. From 2025 to 2029, the market is projected to grow at a CAGR of 9.2%, reaching
RMB7.7 trillion by 2030.
In terms of product mix, the global semiconductor market is primarily comprised of four major
categories: ICs, discrete devices, sensors, and optoelectronic products. Among them, ICs represent the
largest segment, accounting for 88.1% of total market value. Sensors, as the core units at the sensing
layer of electronic systems, convert physical quantities from the real world into electrical signals and
account for 3.4% of the market. ICs can be further divided into logic ICs, memory ICs, analog ICs and
microprocessors. Analog ICs perform critical functions in signal acquisition, signal transmission, and
power management, and serve as the fundamental infrastructure for the proper operation of all
electronic systems. In 2025, analog ICs accounted for approximately 13.9% of the IC market.
Semiconductor Market Size (by Revenue), Global,
2021–2030E
Semiconductor Market Structure by Product
Category, Global, 2025
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2021 2022 2023 2024 2025 2026E 2027E 2028E 2029E 2030E
3,586.7
3,791.1
3,664.9
4,228.3
4,837.0
5,424.1
5,999.1
6,567.8
7,137.2
7,725.1
RMB Billion
34%Memory IC :
34.3%Analog IC :
13.9%
Logic IC :
41.5%
Micro :
10.3%
IC : 88.1%
Discrete : 3.2%
Sensor : 3.4%
Optoelectronic : 5.3%
Source: Frost & Sullivan, World Semiconductor Trade Statistics, Semiconductor Industry Association
Analysis of the Unique Value of Analog ICs in the Semiconductor Industry
Analog ICs, including analog signal ICs and mixed signal ICs, hold a critical position within
the semiconductor value chain, serving as the core bridge between the real and digital worlds. Analog
ICs convert continuous analog signals such as sound, light, temperature, pressure, and current into
digital signals for processing by digital ICs, or transform digital outputs back into analog signals to
drive physical devices. Unlike digital ICs, which operate on binary logic, analog ICs directly process
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real-world continuous signals and provide irreplaceable functional attributes. Analog ICs’ applications
span sensing and detection, signal processing, power management, and actuation and driving, making
them indispensable for the stable, efficient, and reliable operation of nearly all electronic systems.
From the perspective of downstream applications, analog ICs are embedded throughout the
operating chain of electronic systems and are used in a wide range of sectors. In the industrial and
energy sector, analog ICs with high precision, wide temperature and voltage ranges, low noise, and
strong anti-interference characteristics enable the acquisition and conditioning of sensor signals and
drive power devices to achieve energy conversion and execution control. Specifically, signal chain ICs
such as amplifiers, comparators, and ADC/DACs perform precision sensing, conditioning, converting
and feedback control functions, which are essential to motion control and automation systems.
Meanwhile, power management ICs and driver ICs regulate and control voltage and current to operate
power components such as MOSFETs, GaN FETs or IGBTs, ensuring efficient energy transformation,
stable power delivery, and safe switching in applications such as photovoltaic inverters, power
supplies, and industrial equipment. In the automotive sector, analog ICs provide automotive-grade
precision signal acquisition, power management, and control driving for powertrain systems, BMS,
ADAS, and in-vehicle infotainment. In the networking and computing sector, analog ICs ensure stable
IC operation under heavy workloads through high-speed signal conditioning, efficient power
conversion, and multiphase voltage regulation. In the consumer electronics sector, analog ICs,
including signal chain and power management, enable long battery life, miniaturization, and multi-
functional experiences, as signal chain ICs enable diverse sensing and interactive functions through
high-precision and low-power signal processing, while power management ICs enhance energy
conversion efficiency, reduce power consumption and optimize battery usage to extend operating time.
Compared with discrete solutions, the higher level of integration of analog ICs also contributes to
miniaturization by reducing overall component count and system footprint.
From a product and technology perspective, analog ICs are generally characterized by broad
product diversity, long life cycles, multi-dimensional performance metrics, high design barriers,
diverse manufacturing processes, and relatively long-term talent development. The mainstream
processes for analog ICs are concentrated on mature process nodes, with stringent requirements for
reliability and stability. Analog ICs have high design thresholds and complex performance parameters,
with characteristics such as strong reliance on experience, non-standardization, and cross-disciplines.
During design, engineers are required to carefully consider the alignment between system architecture
and device parameters, as well as their mutual interactions. Moreover, due to the diversity of
manufacturing and packaging processes, designers not only master the characteristics of various
components but also are proficient in different manufacturing and packaging techniques. Therefore,
designing analog ICs demands a high level of experience.
As the global semiconductor industry advances toward higher performance, lower power
consumption, and greater reliability, the system-level value of analog ICs has become increasingly
prominent. The expansion of AI-driven computing infrastructure, the rising penetration of electric and
intelligent vehicles, and the ongoing upgrade of industrial and energy systems all place simultaneous
demands on both the volume and performance of analog ICs. Therefore, analog ICs are not only
essential components that support downstream technology iteration but also one of the core forces
driving growth across the semiconductor industry.
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ANALOG IC MARKET ANALYSIS
Introduction to Analog ICs
In terms of functionality in circuits, analog ICs can be broadly categorized into two major
types: signal chain ICs and power management ICs. Signal chain ICs are designed to receive, transmit,
convert, amplify, and condition analog signals, enabling high-precision interaction between the real
world and digital processing systems. Power management ICs are responsible for power conversion,
distribution, detection, and monitoring across an entire electronic system, ensuring stable operation
under varying conditions.
Classification of Analog ICs
Signal Chain
Power Management
Analog ICs
Amplifier &
Comparator
LDO
AC/DC
Analog Switches
Interface
Driver IC
DC/DC
Audio Amplifier
Battery
Management IC
Others
ADC/DAC
Others
Source: Frost & Sullivan
Analog IC Industry Value Chain
The value chain of the analog IC industry can be divided into three major segments: upstream
suppliers of EDA tools, IP, equipment, and materials; midstream participants including analog IC
companies, wafer fabrication, packaging, and testing providers; and downstream distributors, system
integrators, and end markets. Within the midstream segment, analog IC companies may adopt the IDM
model, which integrates IC design, wafer fabrication, packaging, testing, and product sales, or the
fabless model, which focuses on IC design and sales while outsourcing manufacturing. Analog ICs
have a wide range of applications across end markets such as industrial and energy, automotive,
networking and computing, and consumer electronics.
Industry Value Chain of Analog ICs
EDA
Software
Providers
IP Vendors
Equipment
Suppliers
Material
Suppliers
Fabless Model Analog IC Companies
Outsourced
Fabrication Plants
IDM Model Analog IC Companies Distributors
ODMs
Brands
End Markets :
Industrial and
Energy,
Automotive,
Networking and
Computing,
Consumer
Electronics
…
Wafer manufacturing
service
IC packaging and
test service
Design
service
End
products
Upstream Midstream Downstream
Outsourced Assembly
and Test Vendors
Design Service
Company
Equipment& Material
Company
Analog IC Companies
System
Integrators
Equipment
and materials
Source: Frost & Sullivan
Analog IC Market Size
From a market size perspective, the global analog IC market expanded from RMB478.1 billion
in 2021 to RMB617.9 billion in 2025, driven by rapid growth in industrial and energy, automotive,
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networking and computing and consumer electronics. From 2022 to 2023, however, the analog IC
market in China experienced a temporary slowdown as weaker macroeconomic conditions led to softer
end-market demand. The most significant impact came from the consumer electronics sector, where
shipments of smartphones, PCs and other personal devices declined materially, resulting in reduced
procurement by device manufacturers and channel partners and moderating overall market growth
during the period. In 2024, consumer electronics shipments began to recover, partially supported by
AI-related infrastructure upgrades, and the analog IC market accordingly resumed its growth trajectory.
Looking ahead, driven by the increasing adoption of AI applications, along with the rising penetration
of ADAS and NEVs, the global analog IC market is expected to reach RMB927.0 billion by 2030.
China, as one of the world’s largest consumption markets for analog ICs, recorded significant
expansion between 2021 and 2025. Market size increased from RMB158.0 billion in 2021 to
RMB218.4 billion in 2025, and is expected to reach RMB 389.4 billion by 2030.
By product category, the signal chain IC market expanded from RMB57.1 billion in 2021 to
RMB79.3 billion in 2025, and is projected to reach RMB133.0 billion by 2030, driven by industrial
automation, NEVs, and the growing adoption of embodied AI. China’s power management IC market
grew from RMB99.9 billion in 2021 to RMB139.0 billion in 2025. Driven by demand for high-
efficiency power solutions in AI infrastructure, NEV power systems, and smart devices, China’s power
management IC market is expected to continue its growth and reach RMB256.4 billion by 2030.
Analog IC Market Size (by Revenue), by Product Type, China, 2021-2030E
0
100
200
300
400
2021
61.1
2022
62.7
2023
70.7
2024
79.3
2025
88.4
2026E
97.1
2027E
106.8
2028E
117.8
2029E
133.0
2030E
157.0 168.4 175.1 195.3
218.4
245.9
274.0
306.5
344.4
389.4
57.1
107.2 112.4 124.6 139.099.9
176.9 199.7 226.5 256.4
157.5
Signal Chain IC
PMIC
RMB Billion Signal Chain IC
CAGR 2021-2025 2026E-2030E
8.6% 10.8%
8.6% 13.0%
Total 8.6% 12.2%
Source: Frost & Sullivan, China Semiconductor Industry Association
From a downstream perspective, China’s analog IC market exhibits differentiated growth
across major application sectors. The automotive sector is expected to be the fastest-growing segment,
while the networking and computing sector remains the largest downstream market. Meanwhile,
industrial and energy applications continue to grow, and consumer electronics provide a stable demand
base.
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Analog IC Market Size (by Revenue), by Downstream Application, China, 2021-2030E
CAGR 2021-2025 2026E-2030E
4.6% 8.4%
0.9% 5.5%
25.2% 16.9%
12.0% 15.8%
Total 8.6% 12.2%
RMB Billion
0
50
100
150
200
250
300
350
400
19.2
40.4
2021
44.3
52.8
24.2
47.1
2022
43.2
50.4
30.6
50.9
2023
48.3
54.1
37.1
55.8
2024
51.6
56.2
47.1
63.5
2025
56.0
59.7
56.4
73.8
2026E
60.2
63.3
64.9
85.7
2027E
64.9
66.8
75.4
99.4
2028E
70.2
70.4
89.1
114.7
2029E
43.2
74.1
105.3
132.7
157.0 168.4 175.1
195.3
77.3
245.9
274.0
306.5
344.4
389.4
2030E
54.3
218.4
Industrial and Energy
Consumer Electronics
Automotive
Communication, Networking,
and High-Performance Computing
Source: Frost & Sullivan, China Semiconductor Industry Association
Downstream Applications and Market Outlook for Analog ICs
Analog ICs play a foundational role across a wide range of industries, driving technological
progress in industrial and energy, automotive, networking and computing and consumer electronics.
Their unique capability to serve as the interface between the real and digital worlds makes them
indispensable components of nearly all modern technology ecosystems. At present, China’s analog IC
market remains dominated by overseas providers. From the perspective of downstream applications, in
the consumer electronics sector, domestic enterprises have gradually caught up with leading
international manufacturers and have secured a share of the market. However, in other critical sectors
such as industrial and energy, automotive, networking and computing, domestic enterprises still lag
behind leading international players. The primary reason lies in the high technical barriers of core
products. For example, products such as ADC/DAC impose extremely demanding requirements across
multiple parameters, including sampling rate, resolution, signal-to-noise ratio, and power consumption.
Similarly, power management ICs for servers have to deliver high current capacity, fast transient
response, and long-term stability, all of which depend on years of technological accumulation and
extensive application validation. Nevertheless, supported by sustained R&D and technological
breakthroughs, Chinese companies are steadily expanding their presence and market share in the
analog IC industry.
Overview of Major Downstream Applications of Analog ICs
Industrial and Energy
• High-precision ADC/DACs
 Precision operational amplifiers
 High-speed comparators
 …
Product
 Capture and convert
micro-volt sensor signals
into high-resolution digital
signals;
 Provide low-noise
amplification, filtering and
level shifting to preserve
signal integrity;
 Enable fast threshold
detection and protection
loops for motor drives,
power supplies and safety
circuits.
Product
Function
Consumer Electronics
 Display power supply ICs
 Battery charger ICs
 LDOs
 …
 Provide multiple regulated voltage rails (e.g.,
AVDD, VGH, VGL, VCI) required by
AMOLED displays, ensuring stable
brightness and color performance;
 Manage mobile device charging with voltage
conversion, current regulation, and
protection for safe and efficient battery
charging.
 Offer ultra-low-dropout, high-PSRR voltage
regulation to supply noise-sensitive circuits
such as camera sensors, and audio systems,
etc., ensuring stable operation and extended
battery life.
Automotive
 Automotive-grade operational amplifiers
 BMS
 Motor drivers
 High-Side drivers
 …
 Condition and amplify sensor signals in ECUs, ADAS,
and infotainment units to ensure accurate system
performance;
 Manage 12 V/48 V batteries and high-phase motors in
EV power-train, body, and chassis systems.
 Drive and control traction or auxiliary motors in electric
vehicles with integrated gate drivers, current sensing,
and comprehensive protection features for high-
efficiency and reliable operation.
 Provide robust high-voltage load switching and short-
circuit protection, enabling safe and efficient power
distribution across automotive power-train, body, and
chassis systems.
Networking and Computing
 Multiphase controllers and DrMOS
 High-current DC/DC converters
 SerDes
 …
 Deliver sub-microsecond transient response
and tight voltage regulation for CPUs / ASICs.
 Provide high-efficiency, large-current power
delivery for servers, high-performance
computing systems, and networking
equipment.
 Enable multi-gigabit high-speed serial data
transmission and clock recovery for data-
center interconnects, 5G infrastructure, and
optical network backbones, supporting low-
latency and low-jitter links required by CPUs,
and ASICs.
Source: Frost & Sullivan
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Industrial and Energy
With the continued advancement of industrial automation and the energy transition sector, the
role of analog ICs in enabling precise signal processing, efficient energy conversion, and stable
equipment operation has become increasingly prominent. For example, amplifiers and ADC/DACs
acquire and convert sensor signals, ensuring accuracy and real-time performance in motion control.
Power management ICs, such as LDOs and DC/DC converters, provide a stable power supply for
industrial equipment, medical devices, household appliances, and embodied AI. In addition, these ICs
enable efficient energy transfer and regulation across different voltage platforms. In the energy sector,
analog ICs serve as critical components in photovoltaic inverters and energy storage systems, helping
to improve energy efficiency and reduce losses.
In the industrial sector, diverse applications such as manufacturing automation, medical
equipment, and household appliances impose higher requirements on analog ICs. These demands are
driving continuous upgrades in precision, speed, power efficiency, noise immunity, and long-term
reliability. Motion control in manufacturing, as well as embodied AI and CNC machine tools, requires
real-time and highly accurate signal acquisition and processing, which drives ADC/DACs toward
higher resolution and lower latency. Large power devices used in factories, such as motors and
inverters, generate significant electromagnetic interference, which requires analog ICs to feature high
signal-to-noise ratios and strong resistance to interference. In medical equipment and household
appliances, LDOs and DC/DC converters are required to deliver stable performance across wide
temperature ranges and long operating lifetimes, while achieving high energy efficiency and low noise
to safeguard diagnostic accuracy and household energy efficiency.
In the energy sector, including photovoltaic, wind power, and energy storage systems, analog
ICs are essential for ensuring efficient and secure system operation. Photovoltaic inverters and wind
converters are evolving toward higher power density, greater conversion efficiency, and larger system
scale, which requires power management ICs with higher efficiency, superior transient response, and
strong long-term stability to enable safe and low-loss energy conversion under high voltage and large
current fluctuation conditions. The intelligence and digitalization of new energy systems have
advanced significantly, placing higher requirements on signal chain ICs for high-accuracy sampling,
low-noise conditioning, fast data conversion, and robustness under strong electromagnetic interference
to ensure real-time monitoring and control of key parameters such as voltage, current, and temperature.
At the same time, with the large-scale deployment of energy storage systems, increasingly stringent
standards are imposed on battery safety and lifespan management, driving continuous upgrades of
power management ICs in precise power control, long cycle reliability, and safety redundancy design.
Automotive
In the automotive sector, analog ICs are widely deployed across systems such as ADAS, intelligent
cockpits, body electronics, lighting, infotainment and instrument displays. Specifically, in BMS, high-
precision signal-chain ICs and power-management ICs monitor and condition battery voltage, current, and
temperature in real time. Working together with analog driver ICs, they provide cell balancing and safety
protection, which are critical to ensuring the driving range and operational safety of NEVs. In perception
systems such as LiDAR and in-vehicle cameras, high-performance power-management ICs supply low-
noise, stable power, while high-speed ADC/DAC and signal-amplifier ICs enable rapid data acquisition,
conversion, and processing to support ADAS decisions. In intelligent cockpit and body-control systems,
switching and driver ICs manage multi-channel signal control and actuator driving, improving
human-machine interaction and overall vehicle control precision.
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From a market perspective, China’s automotive industry is undergoing profound structural
transformation: sales of traditional vehicles declined from 22.8 million units in 2021 to 18.0 million
units in 2025, while sales of NEVs surged from 3.5 million to 16.5 million units over the same period,
representing a CAGR of 47.2%, and it is projected to reach 36.6 million units by 2030. China has
become a microcosm of the global automotive shift toward electrification and intelligence, creating
sustained growth opportunities for analog ICs.
Networking and Computing
In the networking and computing sector, the surge in AI model training, cloud computing and
data traffic is driving rapid expansion and performance upgrades in computing infrastructure. Taking
servers as an example, shipments in China increased from 4.1 million units in 2021 to 4.7 million units
in 2025 and are expected to reach 5.4 million units by 2030. Among them, AI servers are the primary
growth engine, with shipments rising from 233.3 thousand units in 2021 to 657.4 thousand units in
2025 and projected to reach 2.0 million units by 2030.
Meanwhile, following the gradual completion of 5G deployment, the construction of
communication base stations is progressing toward high-speed optical networks, driving continuous
upgrades of key equipment such as optical modules and switches. The continuous rise in data
transmission rates and the sharp increase in power consumption have made signal-chain ICs and power
management ICs increasingly critical in computing infrastructure. High-current DC/DC converters,
multiphase power controllers, and DrMOS enable efficient power delivery to CPU, microprocessor,
memory, and network-interconnect devices, meeting the requirements for high power density and
intelligent power control. High-speed ADCs/DACs, interface ICs, and high precision clock ICs support
optical-electrical conversion, signal amplification, data acquisition, and conditioning, thereby ensuring
low latency and high signal integrity. At the same time, eFuses, as key components for server power
protection, are capable of rapidly disconnecting circuits under overcurrent or short-circuit conditions to
prevent damage to critical ICs and modules. With the accelerating demand for servers, optical
modules, and communication base stations, the analog IC market is expected to see continuous and
rapid growth.
Consumer Electronics
In smartphones, wearable devices, personal computers, televisions and other consumer
electronics, analog ICs are used in critical functions such as power management, display driving, audio
amplification, charging and protection, ensuring stable operation under the demands of
multifunctionality, high performance, high reliability, and portability. Power management ICs deliver
efficient voltage regulation, power control and battery-charging and discharging management. Display
driver ICs convert digital signals into analog signals recognizable by display panels, enabling high-
resolution and low-power visual performance. Charging and protection ICs ensure safety and
compatibility in fast-charging environments.
From a market perspective, China is the world’s largest producer of consumer electronic
products, accounting for more than 70% of global output and holding a central position in the global
supply chain with production volumes growing from 1.7 billion units in 2021 to 1.8 billion units in
2025. Looking ahead, as consumer electronics increasingly adopt edge-AI capabilities and evolve
toward product diversification, portability, fast-charging, high power, and low power consumption,
next-generation devices will impose higher requirements on analog ICs. AI smartphones and AI PCs
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deploying large models locally will raise inference power consumption, accelerate load fluctuations,
and increase the number of voltage domains, requiring power management ICs to deliver high current
output within limited space, manage multiple power rails, and schedule them efficiently. AR/VR
interactive devices will demand lower power consumption and more complex signal processing.
Wearable devices will place greater emphasis on miniaturization and longer battery life. High-
performance audio applications will pursue lower distortion and wider dynamic range. These trends are
expected to further increase demand and value of analog ICs.
Critical Success Factors in the Analog IC Market
From the product dimension, companies are required to establish a comprehensive product
portfolio spanning both signal chain and power management, while continuously expanding part
numbers to address diverse application requirements across multiple end markets. Such a broad
product line layout not only provides long-term, stable and predictable growth potential and business
resilience across specific products and application cycles, but also enhances resilience against risks,
creates cross-selling opportunities and enhances customer stickiness.
From the customer dimension, demand typically spans multiple product categories, making
cross-product-line supply chain capabilities critical for delivering overall solutions and improving
procurement efficiency. At the same time, stringent qualification and verification processes, together
with long product life cycles in downstream applications, reinforce customer stickiness and switching
costs, making continuous customer accumulation and long-term relationship maintenance key to
sustained growth.
From the technology dimension, companies need to respond efficiently to diverse and evolving
application requirements in terms of performance, interface standards and power optimization,
requiring strong coordination across R&D, verification and delivery. In addition, capabilities in
ensuring product reliability, safety and compatibility under complex operating environments, as well as
early-stage participation in customer design processes, enable deeper integration with end systems and
strengthen long-term technical advantages.
From the industry collaboration dimension, close cooperation across the value chain,
particularly with downstream customers and foundries, enables companies to better capture end-market
demand, secure process technology support and production capacity, and improve yield and product
iteration efficiency. Such collaboration helps companies shorten development cycles, align product
launches with market trends and maintain competitiveness in a rapidly-evolving industry.
Drivers and Development Trends of China’s Analog IC Market
Demand Side. The rapid development of AI, automotive, as well as industrial and energy
sectors is driving both volume growth and higher performance requirements for analog ICs. In AI,
demand is increasing for high-performance signal chain and power management solutions across both
cloud and edge deployments. In automotive, electrification, intelligence and connectivity are increasing
semiconductor value per vehicle and driving greater adoption of analog ICs. In industrial and energy
applications, stringent requirements on reliability, operating conditions and system stability are further
supporting growth in both the quantity and performance of analog ICs.
Product Side. Ongoing technological iteration and sustained R&D investment are intensifying
industry competition. High-precision signal chain products—including low-noise operational
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amplifiers, low-drift references, high-resolution and high-speed ADCs, low-RON analog switches and
high-PSRR LDOs—are being continually optimized to support high-quality signal acquisition and
processing in complex environments. High-efficiency power architectures, such as multiphase power,
DrMOS, digital power control, PoL, and GaN drivers, are rapidly upgrading, significantly improving power
supply efficiency and energy management levels. In the analog IC market, companies that pursue platform-
based and series-based development together with large-scale part number layout can meet the
differentiated requirements of various terminals in terms of power consumption, speed, precision,
temperature range, and interface compatibility. These companies are also able to establish deep binding and
technical barriers in high-value applications, thereby further strengthening overall competitiveness.
Policy Side. Government initiatives are increasingly focused on integrated circuit self-sufficiency,
domestic substitution in industrial and automotive-grade equipment, energy transition, and carbon neutrality
goals. On the supply side, policies such as the Several Policies to Promote the High-quality Development of
the Integrated Circuit Industry and Software Industry in the New Era (
ආණϓཥ༩ପุձழ΁ପ
ഄ) support domestic semiconductor enterprises, including analog IC
manufacturers, through tax incentives, R&D support, facilitation of investment and financing, and
encouragement of market-oriented application and verification. On the demand side, policies promoting
downstream industries, such as the Outline of the 15th Five-Year Plan for National Economic and Social
Development
, drive the expansion and upgrading of
industrial automation, smart equipment and intelligent production systems. As analog ICs, including signal
chain ICs and power management ICs, are core components in industrial control, sensing, signal processing
and power conversion, the expansion and upgrading of these downstream application scenarios directly
increase demand for analog ICs, thereby supporting sustained growth of the analog IC industry.
CHINA’S ANALOG IC MARKET COMPETITION ANALYSIS
Overview of China’s Analog IC Market Landscape
The analog IC industry, given its broad application coverage and diverse product categories,
has developed into a fragmented market characterized by the coexistence of multiple players.
International leaders, supported by long-term technological accumulation and comprehensive product
portfolios, continue to dominate the China analog IC market. In recent years, however, driven by rising
demand and continuous technological progress, Chinese companies have been steadily narrowing the
gap with global leaders, gradually reshaping the competitive landscape.
Rankings and Market Share Analysis of Analog IC Companies
The global and China’s analog IC markets have long exhibited relatively stable yet fragmented
competitive landscapes. In the China market, we continue to hold a leading position, while steadily
moving up the rankings in the global market.
In 2025, in the China analog IC market, the top eight companies together accounted for 37.3%
of market share, with our company ranking first among domestic companies and eighth among global
companies. In the global analog IC market, we ranked among the top fifteen worldwide.
In the China signal chain IC market, we ranked first among domestic companies and sixth
among global companies, while in the global market we ranked twelfth worldwide. In the China power
management IC market, we ranked second among domestic companies and seventh among global
companies, while in the global market we ranked tenth worldwide.
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It is noteworthy that we are the only company ranked among the top three domestic players in
the analog IC market, the signal chain IC market, and the power management IC market.
In terms of specific products, in the China signal chain IC market we ranked first among
domestic companies and the top four among global companies in the amplifier & comparator and
ADC/DAC market. In the China power management IC market, we ranked first among domestic
companies and the top three among global companies in the LDO market, and first among domestic
companies and the top four among global companies in the AMOLED power supply IC market.
Our core rankings in 2025 in terms of revenue are as follows:
 In the China analog IC market

 we ranked first among domestic companies and eighth
among global companies.
 In the China signal chain IC market, we ranked first among domestic companies and sixth
among global companies.
 In the China power management IC market, we ranked second among domestic companies
and seventh among global companies.
 In the China market for amplifier & comparator, ADC/DAC, AMOLED power supply IC,
and LDO, we ranked first among all domestic companies.
Ranking of Analog IC Companies by Revenue, China, 2025
Rank Company Name Revenue (RMB bn) Market Share (%)
1 Company A 21.4 9.8
2 Company B 16.3 7.5
3 Company C 11.0 5.0
4 Company D 11.0 5.0
5 Company E 7.4 3.4
6 Company F 6.3 2.9
7 Company G 4.1 1.9
8 Our Company 3.9 1.8
Subtotal 81.4 37.3
Source: Frost & Sullivan
Notes:
1. Company A is a listed company on Nasdaq, established in 1930 and headquartered in Texas, United States, with major business operations
in North America, Europe and Asia-Pacific. It specializes in the provision of analog and embedded processing ICs for the end market such as
industrial and energy, automotive, networking and computing.
2. Company B is a listed company on Nasdaq, established in 1965 and headquartered in Massachusetts, United States, with global business
coverage across North America, Europe and Asia. It focuses on manufacturing high-performance analog and digital signal processing
integrated circuits for the end market of industrial and energy, automotive, networking and computing.
3. Company C is a listed company on Nasdaq, established in 1997 and headquartered in Florida, United States, with sales mainly
concentrated in Asia and North America. It manufactures high-efficiency power management integrated circuits used in end markets such as
networking and computing and consumer electronics.
4. Company D is a listed company on the FSE, established in 1999 and headquartered in Neubiberg, Germany, with major revenue
contributions from the automotive and industrial markets in Europe, Asia-Pacific and North America. It focuses on providing MCUs, sensors,
analog ICs and other semiconductors and system solutions for the automotive, networking and computing markets.
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5. Company E is a listed company on Euronext Paris, Borsa Italiana, and the NYSE, established in 1987 and headquartered in Geneva,
Switzerland, with major business presence in Europe and significant operations in Asia-Pacific and the Americas. It provides a wide range of
semiconductors including microcontrollers, analog ICs and MEMS used in industrial and energy, automotive, networking and computing
applications.
6. Company F is a listed company on Nasdaq, established in 2006 and headquartered in Eindhoven, Netherlands, with key business
operations in Europe, Asia-Pacific and North America. It specializes in providing semiconductor solutions for the end market of industrial
and energy, automotive, networking and computing.
7.Company G is a listed company on the TWSE, established in 2008 and headquartered in California, United States, with business focus in
Greater China and Asia-Pacific. It develops and produces power management ICs for the end market of consumer electronics, industrial and
energy, networking and computing.
In the signal chain IC market, the top six companies together accounted for 50.0% of total
market share in 2025. In this market, we ranked first among Chinese companies and sixth among
global companies, with a revenue of RMB1.5 billion and a market share of 1.9%.
Ranking of Signal Chain IC Companies by Revenue, China, 2025
Rank Company Name Revenue (RMB bn) Market Share (%)
1 Company B 15.5 19.5
2 Company A 9.0 11.3
3 Company F 5.7 7.2
4 Company E 4.2 5.3
5 Company D 3.9 4.8
6 Our Company 1.5 1.9
Subtotal 39.7 50.0
Source: Frost & Sullivan
In the power management IC market, the top seven companies together accounted for 30.3% of
total market share in 2025, reflecting a more fragmented structure compared with the signal chain IC
market. In this market, we ranked second among Chinese companies and seventh among global
companies, with a revenue of RMB2.4 billion and a market share of 1.7%.
Ranking of Power Management IC Companies by Revenue, China, 2025
Rank Company Name Revenue (RMB bn) Market Share (%)
1 Company A 12.4 8.9
2 Company C 9.9 7.1
3 Company D 7.1 5.1
4 Company G 3.9 2.8
5 Company H 3.2 2.3
6 Company E 3.2 2.3
7 Our Company 2.4 1.7
Subtotal 42.1 30.3
Source: Frost & Sullivan
Note:
1. Company H is a listed company on the SSE STAR Market, established in 2015 and headquartered in Shanghai, China, with business
operations primarily in Chinese Mainland and Asia-Pacific. It designs power management ICs mainly used in the end market of consumer
electronics.
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Wafer Pricing Analysis
Semiconductor silicon wafers are one of the raw materials used in the production of analog ICs
and constitute a key raw material procured by the Company. The pricing of semiconductor silicon
wafers is primarily driven by supply-demand fundamentals and inventory changes across the
semiconductor supply chain. Unlike wafer foundry pricing, which is more directly affected by foundry
utilization and downstream chip production demand, the price of semiconductor silicon wafers as an
upstream material tends to move more moderately and is more influenced by capacity expansion and
inventory normalization. As shown in the chart above, the average selling price of semiconductor
silicon wafers per square inch declined from US$0.99 in 2021 to US $0.88 in 2025, with only limited
fluctuations during the period. This was mainly because global silicon wafer supply gradually became
more sufficient following capacity expansion, while inventory digestion at downstream customers in
certain periods further softened procurement demand, thereby exerting downward pressure on pricing.
The slight rebound in certain years mainly reflected short-term restocking and procurement rhythm
adjustments, rather than a reversal of the overall trend. Looking ahead, given the relatively ample
global production capacity and the gradual normalization of supply-demand and inventory levels,
semiconductor silicon wafer prices are expected to remain broadly stable in the long term.
The Price of Semiconductor Silicon Wafers
0.99 0.94 0.96 0.94 0.88
0.0
0.2
0.4
0.6
0.8
1.0
2021 2022 2023 2024 2025
USD per square inch
Source: Frost & Sullivan, SEMI
Barriers to Entry in the Analog IC Industry
The analog IC industry is subject to technology and product development barriers, supply chain
barriers, brand barriers and talent barriers. Technology and product development barriers arise from the
complexity of analog IC design across circuit architecture, process parameters, power management and
signal integrity, as well as stringent requirements on precision, power efficiency and reliability, which
necessitate long-term R&D accumulation and continuous product iteration. Supply chain barriers stem
from the reliance on stable collaboration with high-quality foundries and OSAT providers for wafer
fabrication, packaging and testing, as well as the need to secure capacity and delivery stability across
market cycles and, in some cases, develop proprietary processes through deep manufacturing
partnerships. Brand barriers are driven by strict requirements from downstream customers on product
reliability and long-term supply capability, where product validation and adoption lead to high
customer stickiness and switching costs, reinforcing the advantages of companies with established
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track records. Talent barriers result from the industry’s dependence on experienced analog IC design
engineers with capabilities in circuit design, process integration and system-level understanding,
combined with a long talent cultivation cycle that makes it difficult for new entrants to build
competitive R&D teams.
OVERVIEW OF CHINA’S SENSOR MARKET
Definition and Classification of Sensors
Sensors are core devices that convert physical or chemical quantities, such as temperature, pressure,
acceleration, light, electricity, magnetism, and gases, into processable electrical signals, while performing
signal amplification, conditioning, and analog-to-digital conversion within the IC. The core components of
sensors include sensing elements, signal processing circuits, and packaging structures. The sensing elements
are responsible for converting external stimuli into initial electrical signals. The integrated signal processing
circuits, such as amplifier & comparator and ADC/DAC analog or mixed-signal ICs, amplify, filter, and
digitize weak signals for output. The packaging structures provide protection, interconnection, and heat
dissipation, ensuring reliable system integration and application interfaces.
From a functional perspective, sensors can be broadly categorized into physical sensors,
chemical and biological sensors, optical and imaging sensors, and magnetoelectric and special sensors.
Physical sensors measure temperature, pressure, humidity, vibration, displacement, and other
parameters, making them essential components in industrial and energy, automotive, networking and
computing, and consumer electronics. Chemical and biological sensors detect gas concentrations,
chemical compositions, or biomolecules, with applications in environmental monitoring, healthcare,
and food safety. Optical and imaging sensors, such as CMOS image sensors and LiDAR receivers,
provide core imaging and distance data for smartphones, autonomous driving, and AR/VR. Magnetic
and special sensors, such as Hall-effect or magnetoresistive sensors and Radio Frequency Identification
ICs, are used in position detection, current measurement, motion control, and security IoT scenarios.
Overall, sensors are evolving toward integration, miniaturization, and low power consumption. These
trends not only support the upgrading of traditional applications in smart devices, automotive, and
industrial control, but also provide indispensable sensing capabilities for emerging fields such as IoT,
smart healthcare, and ADAS.
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Market Size of Sensors
In 2025, the China sensor market reached RMB79.5 billion. With the rise of new energy and
intelligent vehicles, industrial automation, and edge AI-enabled smart devices, the China sensor market
is expected to maintain steady growth. By 2030, the market size is projected to reach
RMB130.3 billion.
Sensor Market Size (by Revenue), China, 2021–2030E
64.9
79.1
70.9 75.4 79.5
85.7
94.6
105.0
116.8
130.3
0
30
60
90
120
150
20252024202320222021 2026E 2027E 2028E 2029E 2030E
RMB Billion
CAGR 2021-2025 2026E-2030E
Sensor Chip Market 5.2% 11.0%
Source: Frost & Sullivan, China Semiconductor Industry Association
Drivers of the Sensor Market
Accelerating automotive electrification and intelligence. As the automotive industry shifts
toward electrification and intelligence, both the demand for sensors and the technical thresholds are
rising significantly. Compared with traditional fuel vehicles, the number of sensors used in new energy
and intelligent vehicles has more than doubled. The “three electric systems” of new energy vehicles,
which replace traditional engines, are driving rapid growth in demand for current sensors. Motor
control, as the core technology of electric vehicles, requires angle sensors with higher accuracy, lower
power consumption, and wider operating temperature ranges to ensure efficient and stable operation
under extreme conditions. Applications such as electric power steering, electronic throttle pedals, and
electric seats are also creating additional demand for magnetic sensors. At the same time, temperature
sensors play a critical role in real-time monitoring of BMS and motor power units, which is essential
for ensuring driving safety and system reliability.
AI infrastructure expansion. The rapid construction of computing power centers is generating
sustained incremental demand for sensors. AI data centers integrate massive volumes of servers,
networking, and storage equipment, and the prolonged full-load operation of these facilities produces
substantial heat that requires real-time monitoring and dynamic adjustment. Temperature sensors
enable high-precision monitoring and early warning of core component temperatures, serving as a
critical safeguard for cooling systems and stable equipment operation. Current sensors, pressure
sensors, and position sensors support power management, cabinet safety, and operations optimization,
forming indispensable underlying hardware in AI data centers.
Breakthroughs in embodied AI and accelerating industrialization are also driving
demand. Embodied AI depends on high-precision motion control and real-time feedback. Magnetic
sensors, leveraging non-contact operation, high sensitivity, and strong interference immunity can
amplify, filter, and perform analog-to-digital conversion on minute joint position changes, and, in
coordination with the accelerometer and gyroscope within the inertial measurement unit (“ IMU”),
enable autonomous navigation, dynamic balance, and complex motion control. Under micrometer-level
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precision requirements, a single joint typically requires multiple magnetic sensors together with signal-
conditioning circuits to ensure real-time feedback and stable system operation.
Source of Information:
We commissioned Frost & Sullivan to conduct market research on global and China’s analog
IC industry and prepare the Frost & Sullivan Report. Frost & Sullivan is an independent global
consulting firm founded in 1961 in New York that offers industry research and market strategies. We
have contracted to pay RMB500,000 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 and considered the key industry 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
critical market elements investigated during the research phase of the project. These elements primarily
include forecasting methodology based on expert opinions, integration of market drivers and restraints,
market challenges, market engineering measurement trends and econometric variables.
There has been no adverse change in the market information since December 31, 2025, that
may qualify, contradict, or impact the information disclosed.
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REGULATORY OVERVIEW
THE PRC LAWS, REGULATIONS AND POLICIES
We are subject to various Chinese laws, rules and regulations that affect many aspects of our
business. This section provides an overview of the main Chinese laws, regulations and important
policies that we consider to be relevant to our business and operations.
MAJOR REGULATORS
Our implementation of business activities within the industry are mainly supervised and
managed by the Ministry of industry and Information Technology of the People’s Republic of China
(the “ MIIT”). The MIIT is responsible for the national industrialization and informatisation,
formulating and organizing the implementation of industrial planning, industrial policies and standards,
monitoring the daily operation of the industries, and promoting the development and independent
innovation of major technology.
LAWS AND REGULATIONS RELATING TO ESTABLISHMENT OF COMPANIES AND
FOREIGN INVESTMENT
In accordance with the Company Law of the PRC (
جpromulgated by the
Standing Committee of the National People’s Congress (the “ SCNPC”) on December 29, 1993, last
amended on December 29, 2023 and implemented as of July 1, 2024, the Law applies to the
establishment, operation and administration of domestic companies and foreign-invested enterprises in
the PRC; where the laws regarding foreign investment provide otherwise, such provisions shall prevail.
The Foreign Investment Law of the PRC (
جthe “FIL”) promulgated
by the NPC, and the Implementation Regulations for the Foreign Investment Law of the PRC ( ʕശɛ
ૢԷ) (the “Implementation Regulations for FIL ”), promulgated by the State
Council, are the principal laws and regulations governing foreign investment in the PRC. Pursuant to
the FIL and the Implementation Regulations for FIL, the PRC adopts a foreign investment
administration system of national treatment plus negative list management. Foreign investment and
domestic investment in industries outside the scope of the Negative List issued or approved by the
State Council shall be treated equally.
The Measures on Reporting of Foreign Investment Information (
جwas
released by the Ministry of Commerce of the PRC (the “ MOFCOM”) and the State Administration for
Market Regulation (the “ SAMR”) on December 30, 2019, and became effective on January 1, 2020.
Foreign investors directly or indirectly conducting investment activities within the territory of China
shall submit the investment information through submission of initial reports, change reports,
deregistration reports, annual reports etc. to the competent commerce authorities in accordance with
the measures.
Investment activities in the PRC by foreign investors were principally governed by the Special
Administrative Measures (Negative List) for Access of Foreign Investment (2024 version)(
̮ਠҳ
݄(૶ఊ)(2024وthe “ Negative List ”), and the Catalog of Industries for
Encouraging Foreign Investment ( ོᎸ̮ਠҳ༟ପุͦ፽(2025وthe “ Encouraging List ”)
promulgated by the MOFCOM and the National Development and Reform Commission (the
“NDRC”) in December 2025. The Negative List, which came into effect on November 1, 2024, sets
out special administrative measures (restricted or prohibited) in respect of the access of foreign
investments in a centralized manner, and the Encouraging List, which came into effect on February 1,
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2026, sets out the encouraged industries for foreign investment. The Negative Lists cover 11 industries,
and any field not falling in the Negative Lists shall be administered under the principle of equal
treatment for domestic and foreign investment. Our business as currently conducted does not fall
within the confines of the Negative Lists and is not subject to special administrative measures.
POLICIES RELATING TO THE INTEGRATED CIRCUIT INDUSTRY
In June 2014, the State Council of the PRC (the “ State Council”) promulgated the Outline for
Promoting the Development of the National Integrated Circuit Industry (
પආၤ
ࠅwhich stated that the development goal of the IC industry is to reach an advanced international
standard in the major links of the IC industry chain by 2030, with a number of enterprises entering the
international first tier and achieving leapfrog development. The main tasks and development priorities
are to focus on the development of IC design industry, centering on key areas of the industry chain,
strengthening IC design, software development, system integration, content and service collaborative
innovation, and driving the development of the manufacturing industry with the rapid growth of the
design sector.
In November 2016, the State Council promulgated the “Notice on the Issuance of the
Development Plan for the Nation’s Strategic Emerging Industries under the ‘13th Five-Year’ Plan” (
ᗫ
ٝwith a view to initiate the major productivity
layout and planning project for ICs, and implement a series of high-impact projects to drive rapid leaps
in industrial capabilities, as well as accelerate the construction of production lines for advanced
manufacturing processes, storage devices and specialty technologies, enhance the design and
development capability and application level of key products such as safe and reliable CPUs,
ADC/DAC chips and digital signal processing chips, and promote the rapid development of industries
such as packaging and testing, key equipment and materials.
In November 2017, the State Council promulgated the Guiding Opinions of the State Council
on Deepening “Internet + Advanced Manufacturing” and Developing Industrial Internet (
ଉ
ʷ¨ʝᑌၣ+ኬจԈ), encouraging domestic and foreign enterprises to
cooperate in tackling technical problems for weak links such as big data analysis, industrial data
modeling, key software systems, and chips; it is recommended to implement relevant preferential tax
policies, promote preferential enterprise income tax for software and IC industries, and encourage
relevant enterprises to accelerate the development and application of industrial Internet.
In July 2020, the State Council announced Several Policies to Promote the High-quality
Development of the IC Industry and the Software Sectors in the New Era (
ආණϓཥ༩ପุ
ഄ), in order to further optimize the development environment of the IC
industry and software sectors, deepen international cooperation in the industry, and enhance the
industrial innovation capability and development quality, launch a series of supporting fiscal and
taxation, investment and financing, research and development, import and export, talents, intellectual
property rights, market application and international cooperation policies.
In March 2021, the NPC approved the Outline of the 14th Five-Year Plan for National
Economic and Social Development and the Long-Range Objectives through the Year 2035 of the PRC
(
ʞϋ஝ྌձ2035ࠅproposing to foster
advanced manufacturing clusters and promote industrial innovation and development of ICs, aerospace
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equipment, ship and ocean engineering equipment, robots, advanced rail transit equipment, advanced
power equipment, construction machinery, high-end CNC machine tools, medicine, and medical
equipment.
In December 2021, the State Council promulgated the Circular of “14th Five-Year Plan” for the
Development of Digital Economy (
ٝwhich clarified that during
the “14th Five-Year Plan” period, the promotion of digital industrialization should be accelerated to
make up for key technical shortcomings. Optimizing and innovating organizational methods such as
“selecting the best candidates via open competition mechanism”, focusing on breakthroughs in key
core technologies in the fields of high-end chips, operating systems, industrial software, core
algorithms and frameworks, and strengthening the integrated research and development of general-
purpose processors, cloud computing systems, and key software technologies. In addition, the
competitiveness of key links in the industrial chain should be improved, and the supply chain systems
of key industries such as 5G, ICs, NEVs, AI, and industrial Internet should be improved.
In December 2023, the NDRC promulgated the “Industrial Structure Adjustment Guidance
Catalog (2024 Edition)” (
ኬͦ፽(2024ϋ͉)) (the “ Catalog”), which stated ICs was
categorized as information industry, the 28th in the first category of Encouragement Catalog. The
industry of main business of the Company is IC design (I6520), which was categorized as the first
category and the Encouraged Project of the Catalog.
LAWS AND REGULATIONS RELATING TO CYBERSECURITY, DATA SECURITY AND
PRIVACY PROTECTION
Pursuant to the National Security Law of the PRC (
جissued by the
SCNPC on and effective from July 1, 2015, the term “national security” is defined as “the status of national
regime, sovereignty, unity and territorial integrity, people’s well-being, sustainable economic and social
development, and other major national interests that are relatively safe and free from any internal and
external threat, as well as the ability to ensure continuous security”. The state shall establish the rules and
mechanisms for national security review and supervision, and conduct national security review of foreign
investment, particular materials and key technologies, network information technology products and
services that affect or may affect national security, construction projects that involve national security
matters, and other major matters and activities to effectively prevent and resolve national risks.
The Administrative Measures for the Graded Protection of Information Security (
τΌഃॴ
جwhich were jointly issued and implemented by the Ministry of Public Security, the
National Administration of State Secrets Protection, the State Cipher Code Administration and the
Informatization Office of the State Council (now revoked) on June 22, 2007, divide the security
protection of information systems into five grades based on the degree of harm caused by the
destruction of such information system to the legitimate rights and interests of citizens, legal entities
and other organizations, public order of the society, other public interests and national security. It
further requires the operators of information systems ranking Grade Il or above to file an application
with the local competent public security authorities within 30 days from the date when its security
protection grade is determined, or its information system starts operation.
According to the Cybersecurity Law of the PRC (
جpromulgated by
the SCNPC on November 7, 2016 ,last revised on October 28, 2025, and became effective on January
1, 2026, network operators who build, operate or provide services through networks shall take
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REGULATORY OVERVIEW
technical measures and other necessary measures according to laws, administrative regulations and
compulsory national standards to safeguard the safe and stable operation of the networks, respond to
network security incidents effectively, prevent illegal and criminal activities, and maintain the
integrity, confidentiality and usability of network data. Network operators are subject to various
security protection-related obligations, including: (i) complying with security protection obligations in
accordance with tiered cybersecurity system’s protection requirements, which include formulating
internal security management systems and operation instructions, appointing responsible personnel for
cybersecurity, adopting technical measures to prevent computer viruses and cybersecurity endangering
activities, adopting technical measures to monitor and record network operation status and events
relating to cybersecurity, taking data security measures such as data classification, backups and
encryption; (ii) formulating cybersecurity emergency response plans, timely handling of security risks,
initiating emergency response plans, taking appropriate remedial measures and reporting to regulatory
authorities in case of any incident endangering cybersecurity; and (iii) providing technical assistance
and support for public security authorities and national security authorities for protection of national
security and criminal investigations in accordance with applicable laws.
Pursuant to the Data Security Law of the PRC, which was promulgated by the SCNPC on
June 10, 2021 and came into effect on September 1, 2021, the state shall establish a data classification
and tiered protection system to implement categorized and tiered safeguards for data. Entities carrying
out data processing activities shall establish a sound data security management system, organize data
security education and training, and take corresponding technical measures and other necessary
measures to ensure data security, in accordance with the provisions of laws and regulations.
The PRC Civil Code (
Պ)(the “ Civil Code ”), which was promulgated by
the NPC on May 28, 2020 and implemented on January 1, 2021, stipulates that the personal
information of a natural person shall be protected and provides main legal basis for privacy and
personal information infringement claims. On August 20, 2021, the SCNPC promulgated the PRC
Personal Information Protection Law (
جwhich became effective on
November 1, 2021. The PRC Personal Information Protection Law mandates that personal information
processors fulfill various personal information protection obligations, including, among others,
(i) informing the individuals of the rules and purposes of personal information processing, impacts of
personal information processing and how the individual can exercise their rights, (ii) obtaining
consents from individuals for personal information processing or having other applicable legal basis to
process personal information, (iii) establishing internal policies and procedures in terms of personal
information processing and taking appropriate technical measures, (iv) providing channels for
individuals to exercise their personal information rights and respond to their requests; and (v) conduct
personal information protection impact assessment under certain personal information processing
activities.
According to the Cybersecurity Review Measures, which were jointly promulgated by the
Cyberspace Administration of China and several PRC regulatory authorities on December 28, 2021,
and came into force on February 15, 2022, purchases of network products and services by critical
information infrastructure operators and data processing activities by network platform operators,
which affect or may affect national security, shall be subject to a cybersecurity review. Network
platform operators possessing the personal information of more than 1 million users who intend to list
abroad must apply to the Cybersecurity Review Office for a cybersecurity review. Where any member
of the Cybersecurity Review working mechanism believes that the network products and services and
data processing activities affect or may affect national security, the Cybersecurity Review Office shall
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REGULATORY OVERVIEW
report to the Central Cyberspace Affairs Commission for approval under procedures, and then conduct
the review in accordance with relevant regulations.
On March 22, 2024, the CAC issued the Provisions on the Promotion and Regulation of Cross-
border Data Flows (֛According to these provisions, the transfer of data
collected and generated during specific activities such as international trade, cross-border transport,
transnational manufacturing, and marketing, which do not involve personal information or important
data, is exempted from the requirements to undergo data export security assessment, the need to enter
into standard contracts for the transfer of personal information abroad, or obtaining personal
information protection certification. These provisions also stipulate that, if a data processor, who is not
a critical information infrastructure operator, transfers personal information of less than 100,000
individuals cumulatively as of January 1 of the current year, it may be exempted from the requirement
to undergo a data export security assessment, entering into a standard contract for transferring personal
information abroad, or obtaining personal information protection certification.
On September 24, 2024, the State Council promulgated the Regulations on the Security
Management of Network Data (
ၣഖᅰኽτΌ၍ଣૢԷ), or the Network Data Regulations, which came
into effect on January 1, 2025. The Network Data Regulations provide detailed implementing rules and
guidance on various aspects of data compliance requirements under the existing data protection
framework pillars of the PRC Cybersecurity Law, the PRC Data Security Law and the PRC Personal
Information Protection Law. The Network Data Regulations supplement the requirements on several
aspects of the PRC Personal Information Protection Law regarding notification, consent, and the
exercise of data subject right, provide more detail on compliance requirements for processors of
important data, and also provide more guidance to streamline cross-border data transfers.
On December 8, 2022, the MIIT promulgated the Administrative Measures for Data Security
in Industry and Information Technology Sectors (for Trial Implementation) (
ʷჯਹᅰኽτ
ج(༊Б)), or the Data Security Measures, which became effective on January 1, 2023. The
data processors in the industry and information technology sectors are required by the Data Security
Measures to establish a full life-circle data secu rity management systems, designate data security
management personnel, reasonably manage operation authorization and formulate responses plan
and conduct emergency drills and relevant trainings.
LAWS AND REGULATIONS RELATING TO OUTBOUND DIRECT INVESTMENT
Pursuant to the Measures for the Administration of Overseas Investment (
ج)
which was issued by the MOFCOM on September 6, 2014 and came into effect on October 6, 2014,
outbound investment by enterprises is subject to approval or filing administered by MOFCOM and its
provincial counterparts. Investment in sensitive countries, regions or industries requires approval; all
other outbound investment is subject to filing.
Pursuant to the Administrative Measures for Outbound Investment by Enterprises (
Άุྤ̮ҳ
جpromulgated by the NDRC on December 26, 2017 and came into effect on March 1, 2018,
the investing activities of enterprises in Chinese Mainland such as acquiring overseas ownerships,
controlling rights, operating and management rights and other relevant interests by way of investing
assets and interests or providing financing and guarantees to control its overseas enterprises, either
directly or indirectly, are required to obtain approval or filing with the NDRC in accordance with the
relevant conditions of the overseas investment projects. Outbound investment projects involving
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sensitive countries, regions or sectors are subject to NDRC approval. Non-sensitive projects are subject
to filing: those with Chinese Mainland investment of US$300 million or above are filed with NDRC,
while those below such threshold are filed with provincial counterpart of the NDRC.
Pursuant to the Notice on Further Simplify and Enhance Foreign Exchange Policy on Direct
Investment (
ٝissued by the State Administration of
Foreign Exchange (the “ SAFE”) on February 13, 2015 and implemented on June 1, 2015, to cancel the
administrative approval for foreign exchange registration for foreign direct investment and grant banks
the rights to directly review and handle foreign exchange registration for foreign direct investment. The
SAFE and its branches shall carry out indirect supervision over foreign exchange registration for
overseas direct investment through the banks.
LAWS AND REGULATIONS RELATING TO IMPORT AND EXPORT TRADE
According to the Customs Law of the PRC (
جwhich was promulgated by
the SCNPC on January 22, 1987 and last revised on April 29, 2021, unless otherwise stipulated, the
declaration of import and export goods and the payment of customs duties may be handled by the
consignees or consignors of imported or exported goods or entrusted customs declaration enterprises.
The consignee or the consignor of imported or exported goods and the customs declaration enterprise
shall go through customs declaration and filing procedures at the relevant customs in accordance with
the law.
According to the Foreign Trade Law of the PRC (
ج׸promulgated by
the SCNPC on May 12, 1994, last revised on December 27, 2025, and became effective on March 1,
2026, and the Regulation of the People’s Republic of China on the Administration of the Import and
Export of Goods (
ආ̈ɹ၍ଣૢԷ) promulgated by the State Council on
December 10, 2001, last revised on March 10, 2024 and became effective on May 1, 2024, unless it is
clearly provided in laws or administrative regulations to forbid or restrict the import or export of
goods, no entity or individual may establish or maintain prohibitive or restrictive measures over the
import or export of goods.
Pursuant to the Administrative Provisions of the PRC on the Filing of Customs Declaration
Entities (
֛promulgated by the General Administration of
Customs on November 19, 2021 and became effective on January 1, 2022, consignees, consignors or
customs declaration enterprises of imported or exported goods only need to file with the Customs, and
no longer need to register with the General Administration of Customs. The filing information will be
publicized through the credit publicity platform of import and export business of Customs of the PRC.
LAWS AND REGULATIONS ON INTELLECTUAL PROPERTY RIGHTS
Patent
Pursuant to the Patent Law of the PRC (the “ Patent Law ”) (
ج)
promulgated by the SCNPC on March 12, 1984, last revised on October 17, 2020 and effective from
June 1, 2021, and the Implementation Rules of the Patent Law of the PRC (
݄
ۆpromulgated by the State Council on June 15, 2001, last revised on December 11, 2023 and
effective from January 20, 2024, there are three types of patents, namely invention, utility model and
design. Invention patents are valid for 20 years, while utility model patents are valid for 10 years and
design patents are valid for 15 years, all starting from the date of application. After the granting of a
patent for an invention or utility model, unless otherwise provided for in the Patent Law, no entity or
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REGULATORY OVERVIEW
individual may exploit the patent without the permission of the patentee; after the granting of a design
patent, no entity or individual shall, without permission of the patentee, exploit the patent, that is, they
shall not make, promise to sell, sell, or import the product incorporating its or his patented design, for
production and business purposes.
Trademark
Pursuant to the Trademark Law of the PRC (
جpromulgated by the
SCNPC on August 23, 1982, last revised on April 23, 2019 and effective on November 1, 2019, and
the Regulation on the Implementation of the Trademark Law of the PRC (
ૢ
Է) promulgated by the State Council on August 3, 2002, last revised on April 29, 2014 and effective
on May 1, 2014, trademarks approved and registered by the Trademark Office are registered
trademarks, and the trademark registrant shall have the exclusive right to use the trademark, which is
protected by law. The validity period of a registered trademark is 10 years, counting from the date of
approval of registration.
Copyright
According to the Copyright Law of the PRC (
جpromulgated by the
SCNPC on September 7, 1990, last revised on November 11, 2020 and effective on June 1, 2021, and
the Implementation Regulations of the Copyright Law of the PRC (
ૢԷ)
promulgated by the State Council on August 2, 2002, last revised on January 30, 2013 and effective on
March 1, 2013, works of PRC citizens, legal persons or unincorporated organizations, whether
published or not, shall enjoy copyright in accordance with law. Works refer to intellectual
achievements in the field of literature, art and science that are original and can be expressed in a certain
form. A copyright holder shall enjoy a number of personal and property rights, including the right of
publication, the right of authorship and the right of amendment.
According to the Regulations on the Protection of Computer Software (
ᚐૢԷ)
promulgated by the State Council on December 20, 2001, last revised on January 30, 2013 and
effective on March 1, 2013, and the Measures for the Registration of Computer Software Copyright (
ࠇ
جpromulgated by the National Copyright Administration of the PRC on
February 20, 2002, Chinese citizens, legal persons or other units shall enjoy the copyright for software
they develop, regardless of whether it has been published. Software copyright arises from the date of
completion of software development. The protection period of the software copyright of legal persons
or other units shall be 50 years, ending on December 31, of the fiftieth year after the first publication of
the software.
Design of IC Layouts
Pursuant to the Regulations on the Protection of Layout-Designs of Integrated Circuits (
ණϓཥ
ᚐૢԷ) (the “ Regulations on the Protection ”) issued by the State Council on April 2,
2001, and effective from October 1, 2001, natural persons, legal persons or other organizations in
China who create layout-designs shall have exclusive rights to their designs in accordance with the
Regulations on the Protection. The exclusive rights to the layout design arise upon registration with the
intellectual property administration department of the State Council, and layout designs that have not
been registered are not protected by the Regulations on the Protection. The protection period for the
exclusive rights of a layout design is 10 years, starting from the date of application for registration of
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the design or from the date of putting it into commercial exploitation somewhere in the world for the
first time, whichever is earlier. However, whether or not the design is registered or commercially used,
it is no longer protected by the Regulations on the Protection 15 years after the date of completion of
the design.
Domain Names
According to the Measures for the Administration of Internet Domain Names (
ʝᑌၣਹΤ၍ଣ
جpromulgated by the MIIT on August 24, 2017, which came into effect on November 1, 2017, the
MIIT is responsible for the supervision and management of China’s domain name services. No
organization or individual shall impede the safe and stable operation of the Internet domain name
system.
LAWS AND REGULATIONS ON PRODUCT LIABILITY
Pursuant to the PRC Product Quality Law (
جlatest amended by the
SCNPC on December 29, 2018, a manufacturer is prohibited from producing or selling products that
do not meet applicable standards and requirements for safeguarding human health and ensuring human
and property safety. Products must be free from unreasonable dangers threatening human and property
safety. Where a defective product causes personal injury or property damage, the aggrieved party may
make a claim for compensation from the manufacturer or the seller of the product. Manufacturers and
sellers of non-compliant products may be ordered to cease the production or sale of the products and
could be subject to confiscation of the products and fines. Earnings from sales in violation of such
standards or requirements may also be confiscated, and in severe cases, an offender’s business license
may be revoked.
LAWS AND REGULATIONS RELATING TO ENVIRONMENTAL PROTECTION AND
FIRE PREVENTION
Environment Impact Assessment
According to the Environmental Protection Law of the PRC (
ڭ
promulgated by the SCNPC on December 26, 1989, last revised on April 24, 2014 and implemented
as of January 1, 2015, and the Environmental Impact Assessment Law of the PRC (ʕശɛ͏΍ձ਷ᐑྤᅂ
جlast revised and implemented by the SCNPC as of December 29, 2018, for any construction
projects that have an impact on the environment, an entity is required to produce either a report, or a
statement, or a registration form of such environmental impacts depending on the seriousness of effect that
may be exerted on the environment.
According to the Administrative Regulations on the Environmental Protection of Construction
Project (
ᚐ၍ଣૢԷ), promulgated by the State Council on November 29, 1998 and
amended on July 16, 2017, upon completion of construction for which an environmental impact report
or environmental impact statement is formulated, the constructor shall conduct an acceptance
inspection of the environmental protection facilities pursuant to the standards and procedures stipulated
by the environmental protection administrative authorities of the State Council, formulate the
acceptance inspection report, and announce the acceptance inspection report pursuant to the law except
for circumstances where there is a need to keep confidentiality pursuant to the provisions of the State.
Where the environmental protection facilities have not undergone acceptance inspection or do not pass
acceptance inspection, the construction project shall not be put into production or use.
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Completion and Acceptance
The Interim Measures for Acceptance of Environmental Protection upon Completion of
Construction Projects (جwhich is promulgated and implemented
by the former Ministry of Environmental Protection (now the Ministry of Ecology and Environment)
on November 20, 2017, regulates the procedures and standards for environmental protection
independent acceptance by construction units upon the completion of construction projects.
Water Pollution and Pollutant Discharge
According to the Catalog of Classified Administration of Pollutant Discharge License for
Stationary Pollution Sources (2019 Version)(
๕રϮ஢̙ʱᗳ၍ଣΤ፽(2019وissued by
the Ministry of Ecology and Environment on December 20, 2019, key management, simplified
management and registration management of pollutant discharge permits are implemented according to
factors such as the amount of pollutants generated, the amount of emissions, the degree of impact on
the environment, etc., and only pollutant discharge entities that implement registration management do
not need to apply for a pollutant discharge permit.
Fire Protection Design Approval and Filing
The Fire Prevention Law of the PRC (
جthe “ Fire Prevention Law ”)
was adopted on April 29, 1998 and latest amended on April 29, 2021. According to the Fire Prevention
Law and other relevant laws and regulations of the PRC, the Emergency Management Authority of the
State Council and its local counterparts at or above county level shall monitor and administer the fire
prevention affairs. The Fire and Rescue Department of the People’s Government are responsible for
implementation. The Fire Prevention Law provides that the fire prevention design or construction of a
construction project must conform to the national fire prevention technical standards (as the case may
be). According to the Interim Provisions on the Administration of Fire Protection Design Review and
Final Inspection of Construction Projects (
֛issued by the
Ministry of Housing and Urban-Rural Development on August 21, 2023 and effective on October 30,
2023, special construction projects as defined under such Interim Provisions shall conduct fire
protection design review and fire protection final inspection, construction projects other than such
special construction projects shall fill acceptance of the project with competent authority.
LAWS AND REGULATIONS RELATING TO REAL ESTATES
Pursuant to the Land Administration Law of the PRC (
جpromulgated
by the SCNPC on June 25, 1986, latest amended on August 26, 2019 and became effective on
January 1, 2020, Registration of the ownership and the right to the use of land shall be governed by the
laws and administrative regulations relating to real estate registration and the legally registered
ownership and right to the use of land shall be protected by law and may not be infringed upon by any
entities or individuals.
Pursuant to the Law on Administration of Urban Real Estate of the PRC (
̹
جwhich was promulgated by the SCNPC on July 5, 1994, was last revised on August 26,
2019 and came into effect on January 1, 2020, in case of house leasing, the lessor and lessee are
required to enter into a written lease contract, containing such provisions as the leasing term, usage,
rental and repair liabilities, as well as other rights and obligations of both parties, and go through
registration and filing procedures with the real estate administration department.
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According to the Administrative Measures for Commodity House Leasing (ॡ༣၍ଣ፬
جwhich was promulgated by the Ministry of Housing and Urban-Rural Development of the PRC on
December 1, 2010 and came into effect on February 1, 2011, within 30 days after the conclusion of the
house leasing contract, the parties involved in the house leasing shall carry out house leasing
registration with the construction (real estate) administrative department of the people’s government of
a municipality directly under the central government of the PRC, city or county where the house leased
is located. In the case of a violation of the above provisions, they may be ordered to make corrections
within a specified time limit by the competent construction (real estate) department of the people’s
government of a municipality directly under the central government, city or county. If fails to do so, a
fine of more than RMB1,000 but less than RMB10,000 will be imposed.
According to the Civil Code, failure of the parties to the lease contract to complete the
formalities for registration in accordance with the laws and administrative regulations shall not affect
the validity of the contract.
LAWS AND REGULATIONS RELATING TO LABOR AND SOCIAL INSURANCE
Pursuant to the Labor Law of the PRC (
جlast revised by the SCNPC on
December 29, 2018 and the Labor Contract Law of the PRC (جlast revised
by the SCNPC on December 28, 2012 and came into effect on July 1, 2013, a labor contract shall be
concluded when a labor relationship is established. Employers shall establish and improve labor rules
and systems in accordance with the law to safeguard employees’ labor rights and fulfillment of labor
obligations.
In accordance with the Social Insurance Law of the PRC (
جlast
revised and put into effect by the SCNPC on December 29, 2018, the Provisional Regulations on
Collection and Payment of Social Insurance Premiums (
ᎈ൬ᅄᖮᅲБૢԷ) last revised and put
into effect by the State Council on March 24, 2019, the social insurance system has been established
for basic pension insurance, basic medical insurance, work-related injury insurance, unemployment
insurance and maternity insurance. Enterprises shall register social insurance with the local social
insurance agency and participate in social insurance. Enterprises and employees shall pay their social
insurance premiums in full and in a timely manner.
In accordance with the Regulations on the Administration of Housing Provident Funds (
ʮ
၍ଣૢԷ) which was last revised and put into effect by the State Council on March 24, 2019,
enterprises shall register at the housing provident fund management center to pay housing provident
funds and open housing provident fund accounts for their employees. Enterprises are required to pay
housing provident funds on behalf of their employees in full and in a timely manner.
Pursuant to the Interpretation II of the Supreme People’s Court of Issues Concerning the
Application of Law in the Trial of Labor Dispute Cases (
ج
༆ᙑ(ɚ)) enacted by the Supreme People’s Court on July 31, 2025 and implemented on
September 1, 2025, any agreement between an employer and an employee for the non-payment of
social insurance or any employee undertaking to waive such payment shall be determined as void by
the people’s court. The Company has not entered into any agreement with the relevant employees to
waive such payment.
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LAWS AND REGULATIONS ON TAXATION
Enterprise Income Tax
According to the Enterprise Income Tax (the “ EIT”) Law (جpromulgated by the
NPC on March 16, 2007, which was revised on February 24, 2017 and December 29, 2018, and the
Regulations on the Implementation of the EIT Law of the PRC (
ૢԷ)
promulgated by the State Council on December 6, 2007 and the latest revision will be on December 6,
2024, the “resident enterprises” are enterprises which are set up in China in accordance with law, or
which are set up in accordance with the law of a foreign country (region) but which are actually under
the administration of institutions in China. The rate of enterprise income tax shall be 25%; the high-
tech enterprises that need key support from the PRC government will enjoy a tax rate reduction to 15%
for EIT.
In December 2020, the Ministry of Finance, the General Administration of Taxation, the
NDRC, and the MIIT jointly released the “Announcement on Enterprise Income Tax Policy for
Promoting High Quality Development of Integrated Circuit Industry and Software Industry”, key IC
design enterprises and software enterprises encouraged by the state are exempted from enterprise
income tax for the first to fifth years starting from the profit-making year, and are subject to a reduced
enterprise income tax rate of 10% in the succeeding years.
Value-added Tax
Pursuant to the Value-Added Tax Law of the PRC (
جpromulgated by
the NPCSC on December 25, 2024, came into effect on January 1, 2026 and simultaneously repealed
the Provisional Regulations on Value-added Tax of the PRC (
೼ᅲБૢԷ), all
entities and individuals (including individual industrial and commercial households) that sell goods,
services, intangible assets, immovables or import goods in the PRC shall be VAT taxpayers and pay
VAT in accordance with the law. Unless otherwise provided for by the state, the VAT rate is 13% for
the sale of goods, processing, repair and maintenance services, and leasing services of tangible
movables; 9% for the sale of transportation, postal, basic telecommunications, construction and
immovable leasing services, sale of immovables, the transfer of land use rights, and the sale or import
of prescribed goods; and 6% for the sale of other services and intangible assets. The VAT rate for
exported goods is zero, unless otherwise provided for by the State Council.
LAWS AND REGULATIONS RELATING TO FOREIGN EXCHANGE
According to the Administrative Regulations on Foreign Exchange of the PRC (
ʕശɛ͏΍ձ਷
̮ි၍ଣૢԷ), which was promulgated by the State Council on January 29, 1996 and was amended
and implemented on August 5, 2008, domestic entities and domestic individuals making overseas
direct investments or engaging in issuance and trading of overseas securities and derivatives shall
process registration formalities pursuant to the provisions of the foreign exchange administration
department of the State Council.
According to the Guidelines for Foreign Exchange Operations under the Capital Account (2024
Edition) (
ˏ2024), promulgated by State Administration of Foreign
Exchange (the “ SAFE”) on April 3, 2024, and came into effect on May 6, 2024, for domestic
companies listed overseas, the raised funds shall in principle be repatriated to China in a timely manner
in either Renminbi or foreign currency. The use of such funds shall be consistent with the content of
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the public disclosure documents such as this Document, corporate bonds issuance documents, circulars
to shareholders and resolutions of board of directors and shareholders’ meetings. Domestic companies
utilizing funds raised overseas for overseas direct investment, overseas securities investment, or cross-
border lending shall comply with the relevant foreign exchange regulations.
Pursuant to the Notice on Issues Concerning Capital Management for Overseas Listing of
Domestic Enterprises (
ٝjointly promulgated by the
People’s Bank of China and the SAFE on December 26, 2025 and will come into effect on April 1,
2026, a domestic enterprise shall complete the registration with the competent banks within
30 working days after the date of its initial overseas listing or the completion of the over-allotment. In
principle, the proceeds raised shall be repatriated in a timely manner. Domestic shareholders that
increase or reduce their overseas shareholdings shall also comply with the relevant registration and
account management requirements.
LAWS AND REGULATIONS RELATING TO THE ISSUANCE AND LISTING OF
SECURITIES OVERSEAS BY DOMESTIC ENTERPRISES
On February 17, 2023, the CSRC promulgated the Overseas Listing Regulations and related
guidelines, which came into effect on March 31, 2023. Pursuant to the Overseas Listing Regulations,
the PRC domestic companies (whether conducting overseas securities offerings/listings directly or
indirectly) shall complete the filing formalities with the CSRC within three working days after
submitting an initial public offering or listing application to the overseas regulatory authority. Non-
compliance (such as failing to complete filings, concealing material facts or forging filing documents)
may result in administrative penalties (including orders to rectify, warnings and fines) being imposed
on the company, as well as its controlling shareholders, actual controllers and directly responsible
persons-in-charge.
Pursuant to the Provisions on Strengthening the Confidentiality and Archives Administration of
Overseas Securities Issuance and Listing by Domestic Companies (
ᗫɲ̋䅎ྤʫΆุྤ̮೯БᗇՎձɪ
֛which was jointly issued by the CSRC together with other relevant
authorities on February 24, 2023 and became effective on March 31, 2023, where a domestic enterprise
provides or publicly discloses any document or material that involving state secrets and working
secrets of state agencies to the relevant securities companies, securities service institutions, overseas
regulatory authorities and other entities and individuals, it shall report to the competent department
with the examination and approval authority for approval in accordance with the law, and submit to the
secrecy administration department of the same level for filing. The working papers formed within the
territory of Chinese Mainland by the securities companies and securities service agencies that provide
corresponding services for the overseas issuance and listing of domestic enterprises shall be kept
within the territory of Chinese Mainland. Cross-border transfer shall go through the examination and
approval formalities in accordance with the relevant provisions of the State.
LAWS AND REGULATIONS RELATING TO PRC SANCTIONS REGIME
On June 10, 2021, the SCNPC promulgated the Anti-Foreign Sanctions Law (
ʕശɛ͏΍ձ਷ˀ
جIt is the governing law of China’s sanctions regime, and its main purpose is to counteract
“foreign discriminatory restrictive measures” imposed by foreign governments that infringe on China’s
national security and the lawful rights and interests of Chinese citizens and organizations.
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On January 9, 2021, the MOFCOM introduced the Rules on Counteracting Unjustified
Extraterritorial Application of Foreign Laws and Measures (the “ Blocking Rules”)ၾણ
. As indicated in Article 2, the Blocking Rules aims to block the unjustified
extraterritorial application of foreign laws and measures that prohibit or restrict transactions between
Chinese persons and third country persons.
On September 19, 2020, the MOFCOM issued the Provisions on the Unreliable Entity List(
ʔ̙
֛According to Article 2 of the Provisions, foreign entities may be placed on the
Unreliable Entity List for the following reasons: 1) endangering the national sovereignty, security or
development interests of China; 2) suspending normal transactions with Chinese companies,
organizations and individuals, or applying discriminatory measures against them in violation of normal
market transaction principles, thereby causing serious damage to the lawful rights and interests of
Chinese persons.
LAWS AND REGULATIONS RELATING TO U.S. EXPORT CONTROLS, SANCTIONS AND
INVESTMENT POLICIES
U.S. EXPORT CONTROLS
Pursuant to the Export Administration Act of 1979 and the Export Control Reform Act of 2018,
the Export Administration Regulation (the “ EAR”) governs the export, reexport, and in-country
transfer of items subject to the EAR. Items subject to the EAR include all items in the United States, all
U.S. origin items wherever located, and certain non-U.S. made items pursuant to de minimis rule and
foreign direct product rule. Any persons may not, without a license, knowingly export, reexport, or
transfer (in-country) any item subject to the EAR to an embargoed country/region, an end user or end
use that is prohibited by part 744 of the EAR.
U.S. SANCTIONS
Under the authorities granted by the International Emergency Economic Powers Act and the
Trading with the Enemy Act, the U.S. President can create and enforce sanctions programs through
Executive Orders to deal with any unusual and extraordinary threat to the national security, foreign
policy, or economy of the United States. In practice, the Office of Foreign Assets Control (the
“OFAC”) under the Department of the Treasury is tasked with implementing and enforcing sanctions
measures in accordance with relevant Executive Orders. Currently, Iran, North Korea, Cuba, the
Crimea Region, Luhansk Region and Donetsk Region are subject to comprehensive sanctions imposed
by the U.S. government. Besides comprehensive sanctions against certain countries, the U.S.
government also imposes sanctions on certain individuals or entities for endangering the national
security and foreign policy of the U.S. The main sanctions lists administered by OFAC (and other
departments, e.g. Department of Defense) include the Specially Designated Nationals List
(“SDN List ”), the Non-SDN Military Industrial Complex List (“ NS-CMIC List ”), and the Chinese
Military Companies List (“CMC List”).
OUTBOUND INVESTMENT RULE BY THE U.S. DEPARTMENT OF THE TREASURY
On August 9, 2023, the U.S. President issued Executive Order No. 14105, directing the
Secretary of Treasury to establish a program to prohibit or require notification of certain types of
outbound investments by U.S. persons into certain entities located in or subject to the jurisdiction of
countries of concern (currently means China, including Hong Kong and Macau) that are engaged in
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activities in certain sectors (currently include semiconductors and microelectronics, quantum
information technologies or AI). On January 2, 2025, the Provisions Pertaining to U.S. Investments in
Certain National Security Technologies and Products in Countries of Concern became effective (the
“Outbound Investment Rules ”). Under the Outbound Investment Rules, U.S. persons are subject to
notification requirements or prohibitions if they engage in “covered transactions” involving “covered
foreign persons”.
LAWS AND REGULATIONS RELATING TO OUR BUSINESS AND OPERATIONS IN
HONG KONG
Regulations Relating to Business Registration
Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong) (“ BRO”)
Every person, (a company or individual), who carries on a business in Hong Kong is required
under the BRO to apply for a business registration certificate from the Inland Revenue Department
within one month from the date of commencement of the business, and to display a valid business
registration certificate at the place of business. Business registration does not serve to regulate business
activities and it is not a license to trade. Business registration serves to notify the Inland Revenue
Department of the establishment of a business in Hong Kong. Business registration certificate will be
issued on submission of the necessary document(s) together with payment of the relevant fee. A
business registration certificate is renewable every year or every three years (if business operators elect
for issuance of business registration certificate that is valid for three years). Any person who fails to
apply for business registration shall be guilty of an offense and shall be liable to a fine of HK$5,000
and to imprisonment for one year.
Regulations Relating to Sale of Goods
Sale of Goods Ordinance (Chapter 26 of the Laws of Hong Kong) (“ SOGO”)
The SOGO governs the formation, performance and remedies of contract for the sale of goods
in Hong Kong and the transfer of title of goods sold. The ordinance also sets out certain implied terms
or conditions and warranties generally relating to the safety and suitability of goods supplied under a
contract of sale for goods in Hong Kong, including:
(i) where there is a sale of goods by description, the goods shall correspond with the
description;
(ii) where the seller sells goods in the course of a business, the goods shall be of a
merchantable quality, i.e. (a) as fit for the purpose or purposes for which the goods of that
kind are commonly bought; (b) of such standard of appearance and finish; (c) as free from
defects (including minor defects); (d) as safe; and (e) as durable, as it is reasonable to
expect having regard to any description applied to them, the price (if relevant) and all the
other relevant circumstances; and
(iii) where the seller sells goods in the course of a business and the buyer makes known to the
seller (whether expressly or by implication) any particular purpose for which the goods are
being bought, the goods supplied under the contract shall be reasonably fit for that
purpose.
Under section 55 of the SOGO, where there is a breach of warranty by the seller, the buyer is not, by
reason only of such breach of warranty, entitled to reject the goods, but he may set up against the seller
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the breach of warranty in diminution or extinction of the price, or maintain an action against the seller
for damages for the breach of warranty.
Trade Descriptions Ordinance (Chapter 362 of the Laws of Hong Kong) (“ TDO”)
Under the TDO, (a) use of false trade descriptions; (b) false, misleading or incomplete
information, (c) false marks and misstatements in respect of products, and (d) false trade descriptions
in respect of services supplied are prohibited. In addition, the TDO makes certain trade practices
criminal offense, namely: (a) misleading omission; (b) aggressive commercial practices; (c) bait
advertising; (d) bait and switch; and (e) wrongful acceptance of payment. The TDO also provides for
offenses relating to forged trade mark, and falsely applying of trade mark or resembling marks.
Supply of Services (Implied Terms) Ordinance (Chapter 457 of the Laws of Hong Kong) (“ SSITO”)
Under the SSITO, certain terms are implied in the contracts with customers for the supply of
services, including: (a) that the supplier will carry out the service with reasonable care and skill;
(b) that the supplier will carry out the service within a reasonable time (if the time of service is not
fixed or fixed in a manner agreed); (c) that the party contracting with the supplier will pay a reasonable
charge (if the consideration is not determined by the contract or left to be determined in a manner
agreed or by course of dealing between the parties).
Unconscionable Contracts Ordinance (Chapter 458 of the Laws of Hong Kong) (“ UCO”)
Under the UCO, if the Hong Kong court finds that a contract for sale of goods or supply of
services (in which one of the parties deals as consumer) to have been unconscionable in the
circumstances relating to the contract at the time it was made, the court may: (a) refuse to enforce the
contract; (b) enforce the remainder of the contract without the unconscionable part; (c) limit the
application of, or revise or alter, any unconscionable part to avoid unconscionable result.
Control of Exemption Clauses Ordinance (Chapter 71 of the Laws of Hong Kong) (“ CECO”)
The CECO limits the extent to which civil liability for breach of contract, or for negligence or
other breach of duty, can be avoided by means of contract terms and otherwise.
Under section 7 of the CECO, a person cannot by reference to any contract term or to a notice
given to persons generally or to particular persons exclude or restrict his liability for death or personal
injury resulting from negligence. Further, in the case of other loss or damage, a person cannot so
exclude or restrict his liability for negligence except in so far as the term or notice satisfies the
requirement of reasonableness.
Under section 8 of the CECO, as between contracting parties where one of them deals as
consumer or on the other’s written standard terms of business, as against that party, the other cannot by
reference to any contract term (i) when himself in breach of contract, exclude or restrict any liability of
his in respect of the breach; (ii) claim to be entitled to render a contractual performance substantially
different from that which was reasonably expected of him; or (iii) claim to be entitled in respect of the
whole or any part of his contractual obligation, to render no performance at all, except in so far as the
contract term satisfies the requirement of reasonableness.
Under section 9 of the CECO, a person dealing as consumer cannot by reference to any contract
term be made to indemnify another person (whether a party to the contract or not) in respect of liability
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that may be incurred by the other for negligence or breach of contract, except in so far as the contract
term satisfies the requirement of reasonableness.
In relation to a contract term, the requirement of reasonableness for the purposes of the CECO
is satisfied only if the court or arbitrator determines that the term was a fair and reasonable one to be
included having regard to the circumstances which were, or ought reasonably to have been, known to
or in the contemplation of the parties when the contract was made.
Misrepresentation Ordinance (Chapter 284 of the Laws of Hong Kong) (“ MO”)
The MO imposes a statutory liability for misrepresentation and controls the use of provisions
excluding liability for misrepresentation in contracts. Liability may arise under the MO where a party
to a contract is induced to enter into that contract by a misrepresentation of a material fact made by the
other party. If the action is successful, the party who relied on the misrepresentation will be entitled to
rescind the contract. Damages may also be granted if the misrepresentation was made fraudulently or
negligently.
Regulations Relating to Importation and Exportation of Goods
The Import and Export Ordinance (Chapter 60 of the Laws of Hong Kong) (the “ Import and
Export Ordinance”) provides for the regulation and control of the import of articles into Hong Kong,
the export of articles from Hong Kong, the handling and carriage of articles within Hong Kong which
have been imported into Hong Kong or which may be exported from Hong Kong, and any matter
incidental to or connected with the foregoing.
The import and export of certain articles are prohibited unless with the relevant licenses issued
by the Director-General of Trade and Industry. If the goods to be imported or exported are “prohibited
articles” or “reserved commodities” under the Import and Export Ordinance and the Reserved
Commodities (Control of Imports, Exports and Reserve Stocks) Regulations (Chapter 296A of the
Laws of Hong Kong), shipping companies, airlines and transportation companies are required to
deliver within 14 days to the Director-General of Trade and Industry the import/export licenses
together with the relevant manifests of the vessel, aircraft or vehicle.
Pursuant to the Import and Export (Registration) Regulations (Chapter 60E of the Laws of
Hong Kong), every person who imports/exports any article other than an exempted article shall lodge
with the Commissioner an accurate and complete import/export declaration relating to such article
using services provided by a specified body, in accordance with the requirements that the
Commissioner of Customs and Excise may specify. Every declaration required to be lodged shall be
lodged within 14 days after the importation/exportation of the article to which it relates.
Hong Kong is a free port and does not levy any customs tariff on imports and exports.
Regulations Relating to Employment
Occupational Safety and Health Ordinance (Chapter 509 of the Laws of Hong Kong) (“ OSHO”)
The OSHO provides for the safety and health protection to employees in workplace, both
industrial and non-industrial. Under section 6 of the OSHO, every employer must, so far as reasonably
practicable, ensure the safety and health at work of all the employer’s employees by:
 providing and maintaining plant and systems of work that are safe and without risks to
health;
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 making arrangements for ensuring safety and absence of risks to health in connection with
the use, handling, storage or transport of plant and substances;
 providing information, instruction, training and supervision as may be necessary to ensure
the safety and health at work of the employees;
 as regards any workplace under the employer’s control, maintaining the workplace in a
condition that is safe and without risks to health or providing or maintaining means of
access to and egress from the workplace that are safe and without any such risks; and
 providing or maintaining a working environment for the employees that is safe and
without risks to health.
Failure to comply with the above provisions constitutes an offense and the employer is liable on
conviction to a fine of HK$200,000. An employer who fails to do so intentionally, knowingly or
recklessly commits an offense and is liable on conviction to a fine of HK$200,000 and to
imprisonment for six months.
The Commissioner for Labor may serve an improvement notice on an employer against
contravention of the OSHO or the FIUO, or a suspension notice against activity or condition or use of
workplace or of any plant or substance located on the workplace which may create an imminent risk of
death or serious bodily injury to the employees. Failure to comply with a requirement of an
improvement notice or contravenes a suspension notice without reasonable excuse constitutes an
offense and the employer is liable on conviction to a fine of HK$200,000 and HK$500,000,
respectively, and to imprisonment for 12 months.
Occupiers Liability Ordinance (Chapter 314 of the Laws of Hong Kong) (“ OLO”)
The OLO regulates the obligations of a person occupying or having control of premises on
injury resulting to persons or damage caused to goods or other property lawfully on the land. The
Occupiers Liability Ordinance imposes a common duty of care on an occupier of premises to take such
care as in all the circumstances of the case is reasonable to see that the visitors will be reasonably safe
in using the premises for the purposes for which he is invited or permitted by the occupier to be there.
Employment Ordinance (Chapter 57 of the Laws of Hong Kong) (“ EO”)
The EO regulates the general conditions of employment and matters connected therein in Hong
Kong. It provides for various employment-related benefits and entitlements to employees. All
employees covered by the EO, irrespective of their hours of work, are entitled to protection including
payment of wages, restrictions on wages deductions and the granting of statutory holidays. Employees
who are employed under a continuous contract are further entitled to such benefits as rest days, paid
annual leave, sickness allowance, severance payment and long service payment.
Employee’s Compensation Ordinance (Chapter 282 of the Laws of Hong Kong) (“ ECO”)
The ECO establishes a no-fault and non-contributory employee compensation system for work
injuries and lays down the rights and obligations of employers and employees in respect of injuries or
deaths caused by accidents arising out of and in the course of employment, or by prescribed
occupational diseases. Under the ECO, if an employee sustains an injury or dies as a result of an
accident arising out of and in the course of his employment, his employer is in general liable to pay
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compensation even if the employee might have committed acts of faults or negligence when the
accident occurred. Similarly, an employee who suffers incapacity or dies arising from an occupational
disease is entitled to receive the same compensation as that payable to employees injured in
occupational accidents.
According to section 40 of the ECO, all employers are required to take out insurance policy to
cover their liabilities both under the ECO and at common law for injuries at work in respect of all
employees (including full-time and part-time employees) for an amount not less than the applicable
amount specified under the ECO. An employer who fails to comply with the ECO to secure an
insurance cover is liable on conviction upon indictment to a fine at level 6 (currently at HK$100,000)
and to imprisonment for two years, and on summary conviction to a fine at level 6 (currently at
HK$100,000) and to imprisonment for one year.
Minimum Wage Ordinance (Chapter 608 of the Laws of Hong Kong) (“ MWO”)
The MWO provides for a prescribed minimum hourly wage rate (as at the Latest Practicable
Date, HK$42.1 per hour) during the wage period for every employee engaged under a contract of
employment under the EO (except those specified under section 7 of the MWO). A provision of a
contract of employment that purports to extinguish or reduce any right, benefit or protection conferred
on the employee by the MWO is void.
Mandatory Provident Fund Scheme Ordinance (Chapter 485 of the Laws of Hong Kong) (“ MPFSO”)
The MPFSO provides for, inter alia, the establishment of a system of privately managed,
employment related mandatory provident fund schemes for members of the workforce to accrue
financial benefits for retirement. Subject to the minimum and maximum relevant income levels, it is
mandatory for both employers and their employees to contribute 5% of the employee’s relevant income
to the mandatory provident fund scheme. Currently, the minimum and maximum relevant income
levels for employees who are paid monthly are HK$7,100 and HK$30,000 respectively. Further,
employers are obliged to enroll their employees aged 18 to 65 to a Mandatory Provident Fund Scheme
within 60 days of his or her employment.
Immigration Ordinance (Chapter 115 of the Laws of Hong Kong) (“ IO”)
Generally speaking, under the IO, a person is required to hold a visa/entry permit to work in Hong
Kong unless he has the right of abode or right to land in Hong Kong. Section 17I of the IO stipulates that
any person who is the employer of an employee who is not lawfully employable commits an offense and
is liable to a fine of HK$350,000 and to imprisonment for three years if the employee is not a prohibited
employee, and if the employee is a prohibited employee, to a fine of HK$500,000 and to imprisonment
for 10 years.
Regulations Relating to Taxes
Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong) (“ IRO”)
As our Group carry out business in Hong Kong, the Company are subject to the profits tax regime
under the IRO. The IRO is an ordinance for the purposes of imposing taxes on property, earnings and
profits in Hong Kong. The IRO provides, among others, that persons, which include corporations,
partnerships, trustees and bodies of person, carrying on any trade, profession or business in Hong Kong are
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chargeable to tax on all profits (excluding profits from the sale of capital assets) arising in or derived from
Hong Kong from such trade, profession or business. As at the Latest Practicable Date, the standard profits
tax rate for corporations is currently at 8.25% on assessable profits up to HK$2,000,000; and 16.5% on any
part of assessable profits over HK$2,000,000. The IRO also contains provisions relating to, among others,
permissible deductions for outgoings and expenses, set-offs for losses and allowance for depreciation.
Section 51(1) of the IRO requires every person, upon receipt of a written notice from the Inland
Revenue Department, to submit a return within a reasonable time as stated in such notice. In relation to
(i) any tax computation containing incorrect information (the “ Incorrect Information ”); and (ii) the
filing of tax return containing the Incorrect Information, a person may be subject to prosecution under
section 80(2) or 82(1) of the IRO pursuant to which:
(a) Any person who without reasonable excuse files an incorrect return commits an offense
under section 80(2) of the IRO and is liable on conviction to a fine at level 3 (i.e.
HK$10,000) and a further fine of treble the amount of tax which has been undercharged as
a result of the incorrect return, statement or information or omission, or would have been
so undercharged if the return, statement or information had been accepted as correct or the
omission had not been detected.
(b) Any person who willfully with intent to evade or to assist any other person to evade tax
omits from a return any sum which should be included commits an offense under
section 82(1) of the IRO is liable:
(i) on summary conviction to a fine at level 3 (i.e. HK$10,000), a further fine of treble
the amount of tax which has been undercharged in consequence of the offense or
which would have been undercharged if the offense has not been detected and
imprisonment for 6 months; and
(ii) on indictment to a fine at level 5 (i.e. HK$50,000), a further fine of treble the amount
of tax which has been undercharged in consequence of the offense or which would
have been undercharged if the offense has not been detected and imprisonment for 3
years.
(c) Under sections 80(5) and 82(2) of the IRO, the Commissioner of Inland Revenue may
compound any offense in lieu of prosecution.
(d) Under section 82A of the IRO, any person who without reasonable excuse makes an
incorrect return by omitting or understating anything in respect of which he is required to
make a return, shall, if no prosecution under section 80(2) or 82(1) has been instituted in
respect of the same facts, be liable to be assessed to additional tax of an amount not
exceeding treble the amount of tax undercharged as a result of the filing of the incorrect
tax return.
Additionally, section 51C of the IRO provides that any person carrying on a trade, profession or
business in Hong Kong shall keep sufficient records in the English or Chinese language of his income
and expenditure to enable the assessable profits of such trade, profession or business to be readily
ascertained and shall retain such records for a period of not less than seven years after the completion
of the transactions, acts or operations to which they relate. The section sets out general requirement of
records that should be kept. Any person who without reasonable excuse fails to comply with section
51C is liable on conviction to a maximum fine at level 6 (i.e. HK$100,000).
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Regulations Relating to Data Protection
Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) (“ PDPO”)
The PDPO imposes a statutory duty on data users to comply with the requirements of the six
data protection principles (the “ Data Protection Principles ”) contained in Schedule 1 to the PDPO.
The PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a Data
Protection Principle unless the act or practice, as the case may be, is required or permitted under the
PDPO.
The Data Protection Principles are summarized as follows:
(1) Adequate personal data should be collected (i) for a lawful purpose, which is necessary for
and directly related to a function or activity of the data user, (ii) by fair and lawful means.
The person whose data is being collect is informed (a) that whether he is obligatory or
voluntary for him to supply the data, (b) the purpose of the collection and the class of
persons to whom the data may be transferred, (c) on or before, his right to access and
correct the data collected and the information of the person who might handle such
requests.
(2) All practicable steps shall be taken to ensure the accuracy of the person data collected, and
kept not long than is necessary.
(3) Personal data should not be used for the purposes outside of the person’s consent.
(4) All practicable steps shall be taken to ensure that any personal data held by a data user is
protected against unauthorized or accidental access, processing, erasure, loss or use.
(5) All practicable steps shall be taken to ensure that a person can (a) ascertain a data user’s
policies and practices in relation to personal data; (b) be informed of the kind of personal
data held by a data user; (c) be informed of the main purposes for which personal data held
by a data user is or is to be used.
(6) A data subject shall be entitled to ascertain whether a data user holds personal data of
which he is the data subject and request access to personal data. The data subject should be
given reasons if the request is refused and right to object to the refusal.
Contravention with the Data Protection Principles may entitle the Privacy Commissioner for
Personal Data to issue a written notice directing the data user to remedy and prevent recurrence of
contravention. Contravention with the above notice is an offense and the offender is liable on (a) first
conviction to a fine HK$50,000 and to imprisonment for two years, and if the offense continues after
the conviction, to a daily penalty of HK$1,000; and (b) second or subsequent conviction to a fine at
HK$100,000 and to imprisonment for two years, and if the offense continues after the conviction, to a
daily penalty of HK$2,000. It is a defense to the above offense if the data user shows that he exercised
all due diligence to comply with the enforcement notice.
The PDPO also gives data subjects certain rights, inter alia:
 the right to be informed by a data user whether the data user holds personal data of which
the individual is the data subject;
 if the data user holds such data, to be supplied with a copy of such data; and
 the right to request correction of any data they consider to be inaccurate.
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The PDPO criminalizes, including but not limited to, the misuse or inappropriate use of
personal data in direct marketing activities, non-compliance with a data access request and the
unauthorized disclosure of personal data obtained without the relevant data user’s consent. An
individual who suffers damage, including injured feelings, by reason of a contravention of the PDPO in
relation to his or her personal data may seek compensation from the data user concerned.
Regulations Relating to Intellectual Properties
Trade Marks Ordinance (Chapter 559 of the Laws of Hong Kong)
The Trade Mark Ordinance protects registered trademarks. The duration of the registered
trademarks is for ten years, which can be further renewed for ten years per renewal. A registered trade
mark may be challenged in revocation proceedings if it is not used in Hong Kong for a continuous
period of three years.
A person infringes a registered trade mark if he uses in the course of trade or business a sign:
(1) which is identical to the trade mark in relation to goods or services which are identical to
those for which it is registered;
(2) which is identical to the trade mark in relation to goods or services which are similar to
those for which it is registered, and the use of the sign in relation to those goods or
services is likely to cause confusion on the part of the public;
(3) which is similar to the trade mark in relation to goods or services which are identical or
similar to those for which it is registered and the use of the sign in relation to those goods
or services is likely to cause confusion on the part of the public; or
(4) which is identical or similar to the well-known trade mark in relation to any goods or
services, and the use of the sign, being without due cause, takes unfair advantage of, or is
detrimental to, the distinctive character or repute of the trade mark.
Regulations Relating to Anti-money Laundering and Counter-terrorist financing
Drug Trafficking (Recovery of Proceeds) Ordinance (Chapter 405 of the Laws of Hong Kong)
(“DTROP”)
Among other things, the DTROP contains provisions for the investigation of assets suspected to
be derived from drug trafficking activities, the freezing of assets on arrest and the confiscation of the
proceeds from drug trafficking activities by the competent authorities. It is an offense under the
DTROP for a person to deal with any property knowing or having reasonable grounds to believe it to
represent the proceeds from drug trafficking. The DTROP requires a person to report to an authorized
officer if he/she knows or suspects that any property (in whole or in part directly or indirectly)
represents the proceeds of drug trafficking or is intended to be used or was used in connection with
drug trafficking, and failure to make such disclosure constitutes an offense under the DTROP.
Organized and Serious Crimes Ordinance (Chapter 455 of the Laws of Hong Kong) (“ OSCO”)
Among other things, the OSCO empowers officers of the Hong Kong Police Force and the
Hong Kong Customs & Excise Department to investigate organized crime and triad activities, and
confers jurisdiction on the Hong Kong courts to confiscate the proceeds of organized and serious
crimes, to issue restraint orders and charging orders in relation to the property of defendants of
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REGULATORY OVERVIEW
specified offenses under the OSCO. The OSCO extends the money laundering offense to cover the
proceeds from all indictable offenses in addition to drug trafficking.
United Nations (Anti-Terrorism Measures) Ordinance (Chapter 575 of the Laws of Hong Kong)
(“UNATMO”)
Among other things, the UNATMO stipulates that it is a criminal offense to: (1) provide or
collect property (by any means, directly or indirectly) with the intention or knowledge that the property
will be used to commit, in whole or in part, one or more terrorist acts; or (2) make any property or
financial (or related) services available, by any means, directly or indirectly, to or for the benefit of a
person knowing that, or being reckless as to whether, such person is a terrorist or terrorist associate, or
collect property or solicit financial (or related) services, by any means, directly or indirectly, for the
benefit of a person knowing that, or being reckless as to whether, the person is a terrorist or terrorist
associate. The UNATMO also requires a person to disclose his knowledge or suspicion of terrorist
property to an authorized officer, and failure to make such disclosure constitutes an offense under the
UNATMO.
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HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
OVERVIEW
Our history can be traced back to 2007 when the predecessor of the Company, SG Micro Co.,
Ltd. (ʮ̡), was established under the laws of the PRC. Over the years of
development, we have become a leading analog IC company in China.
In May 2012, the Company was converted into a joint stock limited company. In June 2017,
our A Shares were listed on the Shenzhen Stock Exchange with the stock code of 300661. As of the
Latest Practicable Date, the issued share capital of the Company was RMB621,014,624 comprising
621,014,624 A Shares of nominal value of RMB1.00 each.
OUR KEY MILESTONES
The following is a summary of our Group’s key business development milestones:
Year Milestone
2007 Founded in Beijing;
Released op amp, analog switch, and LDO.
2008 Released microprocessor supervisory circuit.
2009 Released audio power amplifier, video buffer, and charge-pump boost converter.
2010 Released flash LED driver.
2011 Released white LED driver.
2012 Released DC/DC boost converter and DC/DC buck converter.
2013 Released lithium-battery charger and load switch.
2014 Released level shifter and negative charge-pump converter.
2015 Released OVP IC, dual-channel white LED driver.
2016 Released 5µV Vos high precision op amp and highly integrated lithium battery protection IC.
2017 Listed on the ChiNext of the Shenzhen Stock Exchange (stock code: 300661.SZ);
Released 1.6 nV/ √Hz ultra-low noise op amp and LCD & AMOLED display bias power supply ICs.
2018 Released APD power supply for optical modules applications.
2019 Released Delta-Sigma ADC, high-precision DAC, motor driver, and EML bias power supply ICs for
800G optical module.
2020 Released temperature sensor, high precision voltage references, 5V/3A switching lithium battery charger,
and TEC drivers for optical module.
2021 Released SAR ADC and 36V instrumentation amplifier;
Cumulative shipments exceeded 20 billion units.
2022 Annual revenue exceeded RMB3 billion;
Released automotive-grade (AEC-Q100 qualified) precision voltage supervisory with integrated
watchdog timer, low-side driver, and buck-boost DC/DC converter.
2023 Number of R&D staff surpassed 1,000;
Opened Japan subsidiary;
Released pipeline ADC and GaN gate driver.
2024 Opened Germany subsidiary;
Passed Siemens ESA WCA Assessment (Grade 1);
Released automotive-grade (AEC-Q100 qualified) 32-bit audio DAC and Sub-1G RF power amplifier.
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HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
Year Milestone
2025 Jiangyin testing base put into operation;
Released automotive-grade (AEC-Q100 qualified) high-side drivers, 16A eFuse, power management ICs
for SSD and AMR-based magnetic encoder;
Released integrated power module series;
Cumulative automotive-grade products shipments exceeded 100 million units;
Total cumulative shipments exceeded 40 billion units.
OUR MAJOR SUBSIDIARY
As of the Latest Practicable Date, SG MICRO (HK) LIMITED, a wholly-owned subsidiary of
the Company, was our major subsidiary which had made a material contribution to our results of
operation during the Track Record Period. SG MICRO (HK) LIMITED was incorporated in Hong
Kong, and primarily engaged in development of semiconductor technology, technology transfer, sales
and trade. During the Track Record Period, SG MICRO (HK) LIMITED contributed approximately
20% to the Group’s consolidated revenue, with all other subsidiaries each contributing less than 5%.
For further information about the Company’s subsidiaries, please refer to Note 1 to the
Accountants’ Report in Appendix I to this prospectus.
CORPORATE DEVELOPMENT AND MAJOR SHAREHOLDING CHANGES
Establishment of the Company
On January 26, 2007, the predecessor of our Company, SG Micro Co., Ltd., was established in
Beijing.
Conversion into a Joint Stock Limited Company and Listing on the Shenzhen Stock Exchange
On May 24, 2012, the Company was converted from a limited liability company to a joint stock
limited company, with a registered capital of RMB45,000,000.
On June 6, 2017, the Company completed the initial public offering and listing of A Shares on
the ChiNext of the Shenzhen Stock Exchange (stock code: 300661) (the “ A-share Offering ”). We
offered a total of 15,000,000 A Shares under the A-share Offering. Upon the completion of the A-share
Offering, the registered capital of the Company was increased to RMB60,000,000.
Repurchase of A Shares and Capital Increase Relating to the A-share Incentive Schemes
For the purpose to attract, retain and motivate the employees of the Company, and to align the
interests of the Company, the Shareholders and the employees of the Company, the Company adopted
the A-share Incentive Schemes. As part of the arrangement in relation to the A-share Incentive
Schemes, during the period from September 2017 to May 2026, the Company completed rounds of
capital increase due to exercise or vesting of options or restricted Shares as well as repurchase and
cancellation of restricted Shares due to certain employees’ becoming ineligible under the A-share
Incentive Schemes. For details of the Share Incentive Plans, see “Appendix VI - Statutory and General
Information – Share Incentive Plans.”
Capitalization Issue
Our capital reserve was converted into paid-in capital from time to time for the purpose of
dividend distribution to our Shareholders. During the Track Record Period and up to the Latest
Practicable date,
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HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
(i) on June 16, 2023, our capital reserve was converted into paid-in capital on the basis of
three new Shares for every 10 Shares, and consequently the Company issued a total of
107,846,485 A Shares to our then existing Shareholders;
(ii) on June 20, 2025, our capital reserve was converted into paid-in capital on the basis of
three new Shares for every 10 Shares, and consequently the Company issued a total of
142,592,409 A Shares to our then existing Shareholders.
CONCERT PARTY ARRANGEMENT
Pursuant to the Concert Party Agreement dated June 10, 2015, as amended and supplemented
by the Supplemental Agreement to the Concert Party Agreement dated January 21, 2021, Hongshun
Xiangtai (wholly owned by Dr. Zhang), Baoli Hongya (wholly owned by Ms. Zhang) , Power Trend
(indirectly wholly owned by Ms. Wen Li), Ms. Zhang and Mr. Lin Lin agreed that, among others, for
so long as Hongshun Xiangtai remains a Shareholder, they would act in concert with Hongshun
Xiangtai in respect of matters related to business decisions, including exercising voting rights at the
Shareholders’ meetings, the right to submit proposals to the Board and the Shareholders’ meetings, and
the right to nominate Directors, independent Directors, and supervisors. By virtue of the Concert Party
Agreement and the Supplemental Agreement to the Concert Party Agreement, Hongshun Xiangtai,
Baoli Hongya, Power Trend, Dr. Zhang, Ms. Zhang, Mr. Lin Lin and Ms. Wen Li directly or indirectly
controlled an aggregate of 221,512,150 Shares, representing approximately 35.67% of the voting rights
in our Company as at the Latest Practicable Date.
MATERIAL ACQUISITIONS, DISPOSALS AND MERGERS
During the Track Record Period and up to the Latest Practicable Date, we did not conduct any
acquisitions, disposals and mergers that we consider to be material to us.
OUR LISTING ON THE SHENZHEN STOCK EXCHANGE AND REASONS FOR THE
LISTING ON THE STOCK EXCHANGE
Since the Company’s listing on the ChiNext of the Shenzhen Stock Exchange on June 6, 2017
and up to the Latest Practicable Date, we had not received any notice from the Shenzhen Stock
Exchange alleging any non-compliance incidents on the part of the Company or our subsidiaries, and
we had no instances of material non-compliance with the rules of the Shenzhen Stock Exchange and
other applicable securities laws and regulations of the PRC in any material respects, and, to the best
knowledge of our Directors having made all reasonable enquiries, there was no material matter that
should be brought to the investors’ attention in relation to our compliance record on the Shenzhen
Stock Exchange.
Our PRC Legal Adviser is of the view that during the Track Record Period, we have not been
subject to any material administrative penalties or regulatory measures imposed by the CSRC or the
Shenzhen Stock Exchange.
Based on the independent due diligence conducted by the Joint Sponsors, nothing has come to
the Joint Sponsors’ attention that would cause them to disagree with the Directors’ confirmation with
regard to the compliance records of the Company on the Shenzhen Stock Exchange in any material
respects.
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HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
Our Company seeks to be listed on the Stock Exchange in order to further advance our
globalization strategy, allow better access to the international market, enhance our capabilities to
attract more overseas investors and optimize our international brand image, which in turn may further
enhance our overall competitiveness.
PUBLIC FLOAT
Rules 8.08 and 19A.13A of the Listing Rules require that there must be an open market in the
securities for which listing is sought. Where a new applicant is a PRC issuer with other listed shares at
the time of listing, this will normally mean that the portion of H shares for which listing is sought that
are held by the public, at the time of listing, must: (a) represent at least 10% of the issuer’s total
number of issued shares in the class to which H shares belong (excluding treasury shares); or (b) have
an expected market value of not less than HK$3,000,000,000.
Our A Shares are listed on the Shenzhen Stock Exchange. Immediately following the
completion of the Global Offering, the total market value of the H Shares to be held by the public is
expected to be above HK$4,601 million, calculated on the maximum Offer Price of HK$85.20 per
H Share, which is higher than the prescribed expected market value of H Shares required to be held in
public hands of not less than HK$3,000,000,000 under Rule 19A.13A(2)(b) of the Listing Rules,
thereby satisfying Rule 19A.13A of the Listing Rules. To the best knowledge and belief of our
Directors and on the basis of the current shareholding structure, none of the H Shares is expected to be
held by our core connected person, and the 54,001,200 H Shares representing approximately 8.00% of
our total issued share capital immediately following completion of the Global Offering (assuming that
the Over-allotment Option is not exercised and no other changes are made to the issued share capital of
our Company between the Latest Practicable Date and the Listing) will be counted towards the public
float, which is higher than the minimum prescribed public float percentage under Rule 19A.13A(2)(b)
of the Listing Rules. Based on the above, it is expected that our Company will be able to comply with
the public float requirement under Rule 19A.13A(2) of the Listing Rules at the time of Listing.
FREE FLOAT
Under Rule 19A.13C of the Listing Rules, a PRC issuer with other listed shares at the time of
listing must ensure that the portion of H shares for which listing is sought that are held by the public
and that are not subject to any disposal restrictions (whether under contract, the Listing Rules,
applicable laws or otherwise) at the time of listing (a) represent at least 5% of the total number of
issued shares in the class to which H shares belong at the time of listing (excluding treasury shares),
with an expected market value at the time of listing of not less than HK$50,000,000, or (b) have an
expected market capitalization of not less than HK$600,000,000.
It is expected that immediately following completion of the Global Offering, the market
capitalization of the H Shares listed on the Stock Exchange that are held by the public and are not
subject to any disposal restrictions at the time of the Listing is not less than HK$600 million (based on
the maximum Offer Price of HK$85.20 per H Share and assuming the Over-allotment Option is not
exercised). Accordingly, our Company will be able to comply with the requirement under
Rule 19A.13C of the Listing Rules at the time of Listing.
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HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
OUR SHAREHOLDING AND CORPORATE STRUCTURE
The following chart illustrates a simplified shareholding structure of our Group immediately
prior to the completion of the Global Offering (assuming no other changes are made to the issued share
capital of our Company between the Latest Practicable Date and the Listing):
Our Controlling Shareholders
4.64%3.81%0.14%8.17% 64.33%
Hongshun
Xiangtai Power Trend Other A
Shareholders
18.91%
100% 100% 100%
Ms. Wen Li
Baoli Hongya Mr. Lin Lin
100%
The Company
(PRC)
SG MICRO (HK)
LIMITED Other subsidiaries (1)
Dr. Zhang (2) Ms. Zhang (2)
(1) Our other subsidiaries include two subsidiaries incorporated outside the PRC and 18 subsidiaries incorporated in the PRC. Details of our
non-wholly-owned subsidiaries are set out below.
As of the Latest Practicable Date, the Company held 56% equity interest in SHEN AN MICRO CO., LTD. (ʮ̡)
and the remaining equity interest was held as to 14.4% by Hangzho u Lixin Enterprise Management C onsulting Partnership (Limited
Partnership) (Υྫ), 10% by Harmonious Surpassing Sm all and medium-sized Enterprise
Development Fund (Yixing) Partne rship (Limited Partnership) (Υྫ), 10% by
Hangzhou Lixing Enterprise Management Partnership (Limited Partnership) (Υྫ), and 9.6% by
Hangzhou Kuangzhi Technology Co., Ltd. (ʮ̡), each an independent third party.
As of the Latest Practicable Date, the Company held approximately 68.9918% equity interest in GANRUI TECH (CHANGZHOU) CO.,
LTD. (ʮ̡) and the remaining equity interest was held as to 22.6872% by GLW Technology Limited (Ҧ
ʮ̡) and 8.3210% by Changzhou Changfeng Enterprise Management Partnership (Limited Partnership) ( ੬ψ੬ᔮΆุ၍ଣΥྫΆ
Υྫ), respectively, both being independent third parties.
As of the Latest Practicable Date, the Company held approximately 77.5418% equity interest in TeraDevices Inc. (ࠢ
ʮ̡) and the remaining equity interest was held as to 22.4582% by Yuan Qingpeng ( ঺ᅅᘄ), an independent third party.
(2) Dr. Zhang and Ms. Zhang are cousins.
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HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
The following chart illustrates a simplified shareholding structure of our Group immediately
following the completion of the Global Offering (assuming that the Over-allotment Option is not
exercised and no other changes are made to the issued share capital of our Company between the
Latest Practicable Date and the Listing):
Our Controlling Shareholders
Hongshun
Xiangtai Power Trend Other A
Shareholders
17.40% 7.51% 0.13% 3.51% 4.27% 59.18% 8.00%
Dr. Zhang
100%
Ms. Zhang
100% 100%
Ms. Wen Li
Baoli Hongya Mr. Lin Lin
100%
The Company
(PRC)
SG MICRO (HK)
LIMITED Other subsidiaries (1)
Investors taking
part in the Global
Offering
(1) Please see the details contained in the preceding pages.
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BUSINESS
OVERVIEW
Who We Are
We are a leading analog IC company in China. We design, develop and sell high-performance
analog ICs and sensors that sense, amplify, convert and power, forming the fundamental building blocks
of all electronic systems. According to Frost & Sullivan, in terms of revenue in 2025, we ranked first
among domestic companies and eighth among global companies in the China analog IC market,
representing a market share of 1.8%.
Since our founding in 2007, we have developed a comprehensive and expanding product
portfolio that extends the reach of what electronics can achieve. With over 7,200 analog and sensor
products spanning 38 categories as of the Latest Practicable Date, we offer system-ready solutions
backed by robust design and process capabilities that shorten time-to-market. We deliver analog
advances that move customers forward in every generation of their designs and innovations. Having
long been core components in end markets such as industrial, networking and consumer electronics,
our products are also contributing to broader uptake in applications across EVs, data centers, robotics,
renewable energy and next-generation consumer devices.
Our Products
We offer a wide, differentiated portfolio of general-purpose and application-optimized analog
products, encompassing signal chain and power management, the twin pillars of our product matrix
that define our role as a major provider of analog ICs in China.
Our signal chain ICs help electronic devices interpret the physical world. They take signals that
come from sensors and prepare them for digital processing. Our signal chain ICs capture, condition and
amplify signals from the physical world and convert them into digital data with high accuracy. Our
products maintain data integrity from the point of acquisition to the final output, which is important for
applications that require precise measurement, low noise and minimal error.
Our power management ICs control how energy is delivered within an electronic device. They
determine how much power each part of a device receives, convert power into the levels required by
different components and distribute power safely through the system. They also guard against issues
such as surges or irregular power flow. By keeping power steady and well regulated, these products
help systems operate reliably and use energy efficiently.
Complementing our analog portfolio, we also provide a specialized range of sensors that mark
the entry point of connection between the real and digital worlds, delivering high-precision
measurement and monitoring of key environmental and physical parameters.
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The following diagram illustrates the signal chain, power management and sensor within a
simplified electronic system:
Real World
Analog signal
acquisition
Sensor Amplifier ADC Central Processing Unit
&M e m o r y
Analog signal
amplification,
comparison, filtering,
etc.
Analog signal
converted to
digital signal
Digital signal
converted to
analog signal
Analog signal
amplification,
driving, and output
Continuous Analog Signal
Amplifier
DriverDAC
Digital World Real World
EEPROM
Power Management
Continuous Analog SignalDigital Signal (Discrete Binary Code) Digital Signal (Discrete Binary Code)
Block Diagram of Main Components in Electronic Systems
Our leadership in product offerings rests on several core strengths:
 A Comprehensive, Expanding Portfolio . We provide customers with a breadth of
differentiated analog ICs and sensors engineered to work cohesively out-of-the-box,
simplifying component selection and system-level architecture decisions. Among over
7,200 products, (i) 19 categories are signal chain products that cover the entire signal path
from acquisition and conditioning to conversion and transmission, including amplifiers,
comparators, analog switches, data converters and EEPROM, (ii) 17 categories are power
management products, such as DC/DC converters, LDOs, AMOLED power supply ICs
and lithium battery charging and protection ICs, and (iii) two categories are sensors,
including temperature sensors and magnetic sensors. With an agile, customer-centric
innovation cycle, we maintain a rapid product rollout cadence, launching approximately
3,400 new products during the Track Record Period and up to the Latest Practicable Date.
 Forward-Leaning Analog Design . Our product development strategy focuses on
differentiated solutions that address critical gaps in high-performance analog markets,
particularly in applications requiring high voltage tolerance, high integration and novel
power delivery architectures. According to Frost & Sullivan, we have introduced a series
of analog products in China that advance performance, efficiency and system-level
capability, such as a 60nA ultra-low quiescent current synchronous buck converter, an
ultra-low-noise op amp with an input voltage noise density of 1.6 nanovolts per square
root hertz, an 18-bit SAR ADC with a sampling rate of 2 MSPS and an SNR of 99
decibels, a high-accuracy TEC controller and EML bias power supply.
 High-Integrity Analog Performance . Our analog innovations achieve high precision,
minimal noise, high-speed response and low power consumption for high-performance
and high-reliability systems. They maintain consistent accuracy across wide operating
conditions, protect signal integrity in sensitive applications and respond swiftly to time-
critical operations. Engineered for energy efficiency, our analog products achieve peak
performance with minimal power draw, making them ideal for demanding applications.
 System-Level Cost Optimization . Our products are optimized beyond mere datasheet
specifications to deliver lower total cost of ownership. We achieve this through premium
quality, inherent reliability and long lifecycle support, reducing the need for over-design
and mitigating field failure risks.
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Our Technology
Our technological edge derives from proprietary R&D in advanced circuit design and process
technologies, driving analog breakthroughs in signal and power integrity as well as system reliability
and safety across diverse applications.
 Solid Design Capabilities . Our design strengths deliver strong performance in high-
performance signal conditioning, efficient power management and advanced sensor solutions
to power next-generation electronic systems. The signal conditioning suite spans high-
precision, low-noise, high-speed, high-voltage and low-power analog functions, delivering
high fidelity and rapid responsiveness. In power management, we provide battery charging and
protection, display power and driver ICs, and high-efficiency DC/DC and LDO products
engineered for minimal quiescent current and compact footprints. For example, our 60nA
ultra-low quiescent current DC/DC converter and 250nA ultra-low quiescent current LDO,
together with sub-millimeter LDO (0.63mm×0.63mm) and op amp and comparator
(0.8mm×0.8mm) exemplify leading low-power, high-efficiency and miniaturized analog
design, enabling precise performance in space- and energy-constrained applications. We
elevate the standard of analog integration with 2mm×2mm power modules that integrate an
inductor, capacitor and DC/DC converter to deliver outstanding power efficiency in a minimal
footprint. Our sensor technologies, including high-sensitivity magnetic and high-precision
temperature sensors, integrate signal processing, flexible output interfaces and built-in
calibration to deliver accuracy, stability and operational robustness in rigorous environments.
 Proprietary Process Technology . We believe our proprietary process technology is a
strategic asset. By adapting foundry process recipes, we have developed processes that
deliver higher performance than standard flows, aligning with our broad product portfolio
and enabling us to serve diverse applications and markets without being tied to a single
process. We operate under a fabless model integrating our proprietary process expertise
into the standard fabless model. By fine-tuning key parameters across performance, yield
and cost, our products achieve the stringent requirements of precision-driven applications,
delivering high-level performance and improved power efficiency while scaling efficiently
from prototyping to high-volume manufacturing.
 Vast IP Repertoire . We have developed an extensive suite of analog products leveraging
proprietary IP and process technologies. For instance, we hold a patent for the SIMO
topology for power management ICs and AMOLED displays, delivering multiple supply
voltages from a single inductor with high efficiency, a reduced board footprint and lower
power dissipation. As of December 31, 2025, in China and overseas, we had 588 granted
patents, including 497 invention patents, and 401 IC layout design registrations.
Our Demand-Driven Go-to-Market Strategy
We leverage a land-and-expand model that deepens customer engagement through repeated
design wins across customer systems. Our early involvement during customer design-in cycles allows
us to establish technical credibility and commercial trust before securing design-win status. We
maintain disciplined, iterative processes for need capture and requirements translation, which enable us
to accurately interpret nuanced customer demands into precise engineering specifications and
performance benchmarks. Our sales, marketing and field application teams operate at the frontline,
continuously capturing industry trends and delivering a high-frequency stream of ground-level,
actionable insights that directly sharpen our R&D direction. By working alongside customers from
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system specification to on-site validation, we accelerate deployment cycles, synchronize our roadmap
with customers’ next-generation systems and compress time-to-market windows. These long-term
engagements enable us to serve over 6,000 end customers in 2025, positioning us as a preferred partner
for end markets such as industrial & energy, automotive, networking & computing and consumer
electronics.
Our Market Opportunities
Our ability to bridge the real and digital worlds places us at the center of transformative
discoveries. The intelligence era is characterized by ubiquitous sensing, hyper-scale and edge
computing, artificial general intelligence and pervasive connectivity. These convergent forces are
reshaping the global economic and technological landscape, creating an arena where product
innovation and performance are paramount.
 Industrial & Energy . Emerging technologies such as predictive maintenance, digital
twins, smart grids and embodied AI in robotics and industrial machinery are ushering in a
new industrial era. These developments are driving expansion in the analog IC market for
the industrial & energy sector, which is estimated to reach RMB77.3 billion by 2030,
according to Frost & Sullivan. Our analog portfolio powers these industrial applications
with products continuously optimized on par with evolving demands. High-voltage, high-
current motor driver ICs enable precise, reliable control of robotic actuators and industrial
machinery, supporting greater efficiency, precision and autonomy on the factory floor and
across energy and infrastructure networks.
 Automotive. The automotive industry is shifting beyond electrification and toward smart
mobility and connectivity, fueling growth in the automotive analog IC market to reach
RMB105.3 billion by 2030, with a CAGR of 16.9% from 2026 to 2030, according to
Frost & Sullivan. We support leading OEMs with a focused portfolio supporting LiDAR,
radar, lighting, camera power management, display drivers, audio systems, battery packs,
on-board chargers, BCMs and e-driver systems. Our DC/DC converters, LDOs, LED
lighting and backlight power devices, high-side/low-side driver ICs, eFuses and magnetic
sensors enable robust power switching, circuit protection and accurate position sensing for
EVs and smart vehicles. In addition, our amplifiers, data converters, interface ICs and
battery management ICs deliver high-performance signal conditioning and monitoring
across vehicle systems. The portfolio meets stringent automotive-grade reliability and
functional safety standards, including ISO 26262 compliance, enabling advanced sensing
and centralized E/E architectures.
 Networking & Computing . Hyperscalers race to build next-generation data centers and
secure critical computing capacity, creating an execution gap where adoption is outpacing
the ability to deploy at scale. According to Frost & Sullivan, the analog IC market for the
networking & computing sector is forecasted to reach RMB132.7 billion by 2030, with a
CAGR of 15.8% from 2026 to 2030. Our eFuses, high-power DC/DC converters,
multi-phase DC/DC controllers and DrMOS devices enable efficient, high-current, fast-
transient power delivery for CPUs and microprocessors, while our high-precision clock
management devices (such as retimers) deliver timing synchronization in servers and
high-speed interconnect equipment.
 Consumer Electronics . The rise of AI-native consumer electronics is propelling the
consumer electronics analog IC market to an estimated RMB74.1 billion by 2030,
according to Frost & Sullivan. We deliver differentiated, high-performance analog
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products characterized by ultra-low power and high integration. For example, our 60nA
DC/DC converters and 300nA op amps power wearables and AR/VR devices, such as
smart glasses, while extending battery life and enhancing immersion, and our low-noise,
high-fidelity op amps and audio DACs have become preferred choices for leading
customers in high-performance audio applications.
Our Financial Achievements
In 2023, 2024 and 2025, our revenue amounted to RMB2,615.7 million, RMB3,347.0 million
and RMB3,898.1 million, representing a CAGR of 22.1% from 2023 to 2025. We maintained
sustainable profitability throughout the Track Record Period. Our gross profit margin was 44.9%,
47.2% and 46.2% for the same years, respectively. We recorded adjusted net profit (non-IFRS
measure) of RMB388.7 million, RMB576.0 million and RMB693.5 million for the same years,
respectively.
OUR STRENGTHS
Comprehensive Product Portfolio Powering Wide Adoption
We have engineered the most comprehensive and broad product portfolio in China, according
to Frost & Sullivan, with over 7,200 products across 38 categories, providing our customers with
distinctive breadth and depth to address complex design challenges across industries. With our dual
focus on impactful technology and real-world applications, our product innovation engine remains
highly agile, delivering approximately 3,400 new products during the Track Record Period and up to
the Latest Practicable Date. Our vast selection of products grants design engineers a comprehensive
suite of critical analog products, which allows them to meet any application requirement without the
complexity and risk of multi-vendor sourcing. Furthermore, our broad coverage across voltage ranges,
applications and performance tiers allows us to capture more design wins and expand customer
engagements from single-product opportunities to multi-product or system-level solutions.
As an analog IC powerhouse, we are pushing the technical boundaries and setting benchmarks
in signal chain and power management technologies. Our signal chain portfolio delivers a complete,
high-fidelity path from signal acquisition to conversion, supporting reliable signal integrity and precise
system performance in demanding environments. Our power management portfolio provides end-to-
end energy control, from battery charging ICs and protection circuits to system-level power conversion
and distribution, delivering high efficiency, ultra-low power consumption, fast transient response and
robust safety performance across applications. Our comprehensive coverage is exemplified through
several key product families:
 High-Performance Op Amps . We offer a broad range of op amps featuring low-noise,
high-precision, low-power, high-speed and zero-drift variants, rivaling the bandwidth and
performance of global industry leaders, according to Frost & Sullivan. Specifically, our
high-precision variants achieve internationally advanced levels in critical parameters such
as input bias current, offset voltage and temperature drift, enabling their successful
adoption in sophisticated markets such as industrial automation and medical devices.
 Analog-to-Digital Converters . Our ADC platform combines multiple architectures to
tackle diverse design challenges. Our 24-bit, 16-channel ADC achieves a remarkably low
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input-referred noise, capturing extremely weak signals for breakthroughs in medical
imaging, industrial automation and test & measurement. Our 18-bit, single-channel SAR
ADC delivers outstanding signal fidelity, making it optimal for widespread use in
industrial automation, communications and automotive.
 Digital-to-Analog Converters . Complementing our high-performance ADCs, our DAC
portfolio includes general-purpose DACs and specialized audio DACs, providing
comprehensive signal chain solutions for both precision instrumentation and high-fidelity
audio applications, ensuring complete digital-to-analog output capability.
 Full-Stack Charge Guard . We deliver a power pathway from advanced battery charging
ICs and protection circuits to optimized BMS, providing superior safety and an extended
lifespan for smartphones, tablets, wearables and EVs. Features such as high integration,
support for rapid charging protocols (“ PD/QC”), superior efficiency and ultra-low standby
power make these solutions preferred choices for top-tier global brands, particularly in the
lithium battery-charging IC segment.
 Pixel-Perfect Display Power & Drivers . Our display power and driver ICs for liquid
crystal display (“ LCD”) and OLED panels power immersive visuals in smart devices,
automotive infotainment and high-end industrial displays. Characterized by ultra-low
noise, high efficiency, minimal power consumption and compact integration, these
products have positioned us as a strategic partner to top global consumer electronics
brands.
 High-Efficiency DC/DC Converters . Covering buck, boost, buck-boost and multi-phase
architectures, our DC/DC converters deliver extreme efficiency, fast transient response,
high-voltage/current capability and robust thermal performance, well-suited for servers
and next-generation automotive systems.
 Ultra-Low-Power LDOs . Defined by rock-bottom quiescent current, high Power Supply
Rejection Ratio (“PSRR”) and minimal noise, our LDOs are the go-to for power-sensitive
applications in consumer electronics, wearables, high-end audio and networking. Our
AEC-Q100-qualified, automotive-grade LDOs are already achieving volume shipments in
automotive applications.
 Intelligent Load Switches / eFuse s. Our high-voltage, high-current load switches and eFuse
products have achieved volume adoption in applications such as portable devices, personal
computing and data centers, delivering robust protection and precise power distribution and
enhancing system safety and reliability in space-constrained, power-dense environments.
Backed by an elite team of analog experts and standardized cross-functional playbooks
covering product development, sales and technical support, we accelerate customer time-to-market and
enforce best practices. Our robust design resources, including in-depth technical documentation,
training programs and simulation tools, enable customers to achieve higher integration, functionality
and performance in their final products. The combination of broad selection, proven performance and
engineer-focused value defines our product portfolio, making us the trusted and high-value partner for
analog and sensing solutions.
Customer-Centric, Tech-Powered Innovation Amplified by Strategic Synergy
Innovation is the core of our business and the engine of our growth. We strategically
concentrate our resources and expertise on what we do best: tech-driven R&D and proprietary process
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technologies. Our development is governed by holistic lifecycle management, featuring rigorous
discipline from initial product definition and IC design through simulation, validation and rigorous
reliability testing. Our structured process not only ensures execution excellence but also cultivates a
growing repository of leading-edge technologies, including high-precision analog design,
ultra-low-power circuit architecture, and high-voltage process optimization.
Our R&D is intensely market-driven and closely aligned with real-world customer demands.
This synergy is facilitated by our marketing, sales and technical support teams, who work side by side
with customers throughout the product definition, performance validation and application testing
phases. Embedded within customer ecosystems, these teams provide critical frontline insights that
directly inform our development priorities. Additionally, we simplify system design with our
comprehensive library of sub-circuit ideas that include step-by-step instructions, basic formulas and
schematic diagrams. This deep collaboration allows us to engage in early co-creation projects during
the product definition and planning stages for our customers’ next-generation systems, resulting in a
technology roadmap synchronized with future market needs and effectively reducing time-to-market.
Furthermore, our strategic acquisitions serve as a powerful force multiplier for our innovation
engine, which has been instrumental in expanding our reach into pivotal growth areas. The integration
of acquired technologies and talent has fortified our R&D capabilities and overall market
competitiveness.
Fabless Model Integrating Proprietary Process Expertise with Full-Lifecycle Quality
Management
We operate under a fabless model integrating our proprietary process expertise into the
standard fabless model. This model is a strategic advantage that allows us to channel resources into
circuit design, system innovation and differentiated analog processes while avoiding the massive
capital expenditure required to build and maintain semiconductor fabrication plants. We build
application-optimized know-how in critical areas such as high-voltage operation, ultra-low power
consumption, wide temperature range and precision analog design. Our know-how and processes also
support a smooth transition from prototyping to high-volume production, reducing exposure to supply
chain volatility and securing a stable, high-quality output. To scale effectively, we orchestrate
manufacturing through collaboration with leading global foundries and top-tier OSAT providers.
Through early-stage joint development with our partners focusing on process selection, material
science and advanced test methodologies, we continuously optimize yield and final product
performance.
Our quality management system is architected on a world-class assurance framework,
implemented with uniform rigor across all product categories throughout the entire product lifecycle,
from product definition and tape-out to wafer fabrication, assembly, testing and post-sales support. We
hold ourselves to rigorous benchmarks that often exceed industry standards for product reliability,
longevity, interference immunity, manufacturing yield and lot-to-lot consistency. For example, all our
automotive-grade products are developed in full compliance with ISO 26262 for functional safety and
have achieved AEC-Q100 certification, securing reliability for the most demanding road applications.
Our industrial-grade product lines meet functional safety standards and undergo complete reliability
verification at third-party laboratories.
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High-Touch Customer Engagement Fueling Widespread Adoption
Our growth is fueled by design-in partnerships with global industry leaders. We engage at the
early stages of product definition, employing a co-creation model to develop general-purpose and
application-specific products that become integral to our customers’ flagship and volume-driven
product lines. Our products are engineered into high-value systems and mission-critical applications
globally. In the automotive sector, we are among the few China-based analog product providers
capable of mass-producing a variety of automotive-grade analog ICs, with a product portfolio that has
successfully passed over 100 sets of AEC-Q100 qualification tests and comprises more than 600
automotive-grade products available in the market. In industrial automation, our high-precision ADCs,
isolation amplifiers and motor drivers are integral to the systems of renowned brands, enabling high-
accuracy control in medical imaging, PLCs and automated manufacturing. We foster continuous
customer engagement on market needs, technology shifts and future product planning through high-
level dialogs, joint workshops and collaborative development efforts, which enable us to anticipate
technology transitions and capture new opportunities in high-growth markets.
We blend local expertise with a globally scaled support network to deliver customer
responsiveness. Dedicated technical sales teams in each region provide deep regional application
knowledge and direct, in-person support. Our local force is amplified through strategic alliances with
leading global distributors, extending our channel reach and responsiveness worldwide, which we
believe is instrumental in driving consistent and robust overseas expansion.
Expert-Led Team Catalyzing Innovation and Growth
Behind SG MICRO’s growth story is a recognized team of semiconductor experts. Our
leadership combines nearly three decades of experience in analog design, semiconductor operations
and global market execution. Senior management brings deep expertise in cross-border leadership and
long-term strategic planning.
We foster a people-centric culture that champions innovation, collaboration and accountability.
We invest in people through structured training, cross-functional development and international
collaboration. The result is a unified, high-performance organization geared toward technology
leadership and market impact.
We are powered by talent. We have established a group-level mentorship program, which
creates a formal framework designed to build a well-structured talent echelon. As of December 31,
2025, approximately 72.8% of our employees are dedicated to R&D, with 56.3% holding master’s or
doctoral degrees. Furthermore, more than 31% of our R&D team have accrued more than ten years of
domain expertise, including a core group of approximately 100 personnel with over two decades of
expertise in their fields.
OUR STRATEGIES
Advance R&D to Lead in Technology and Market
Building on our extensive experience in analog IC development, we are accelerating R&D and
core IP expansion in critical analog domains to drive technological breakthroughs across our entire
product portfolio. We will develop a robust and highly adaptable suite of high-reliability signal chain
and high-voltage, high-power power management solutions that meet evolving market demands and
strengthen our leading position in high-growth sectors. We also aim to broaden the application of our
proprietary process technologies, covering over one-third of our new products in the coming years.
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To maximize R&D efficacy and time-to-market, we intend to employ cross-functional, project-
based management methodologies that streamline development cycles and enhance the translation of
advanced research into scalable, market-ready products. Our strategy is reinforced by our deep
commitment to nurturing R&D talent through equity incentives and an open innovation culture,
ensuring that we attract and retain industry-leading engineers who provide a sustainable foundation for
long-term technology leadership and innovation.
Further Expand Analog Portfolio for Next-Generation Applications
We are strategically expanding our analog portfolio to deliver a comprehensive suite of
general-purpose and application-specific solutions that extend beyond signal chain and power
management products into highly specialized domains, including the development of sensor
technologies to capture, process and transmit critical environmental and operational data with high
precision and reliability.
Our development roadmap is sharply aligned with emerging application demands, focusing on
enhancing performance benchmarks, reducing power consumption and optimizing form-factor
efficiency to set new industry standards. We intend to further expand our product range, focusing on
automotive-grade ICs, server power management ICs, sensors, BMS, high-performance audio ICs,
high-speed interface ICs and driver ICs.
We will continue to be deeply embedded in the technological evolution of various sectors,
including computing, ADAS, renewable energy equipment and power photovoltaics, while continuing to
discover opportunities in automotive intelligence and electrification, networking, computing, industrial
applications, embodied AI and edge AI.
Optimize Our Business Model Leveraging Scalable Supply Chain
We are strategically committed to our fabless model integrating our proprietary process
expertise, which allows us to concentrate our resources and expertise on our core competencies. On the
one hand, we will continue to optimize and develop our proprietary process technologies to strengthen
product differentiation and competitiveness. On the other hand, we will further orchestrate
manufacturing through expertise-driven collaboration with leading foundries and OSAT providers,
building a resilient, high-quality supply chain characterized by deep collaboration on process node
selection, test optimization and yield improvement. By leveraging the intrinsic synergies between our
technical expertise and fabless structure, we expect to efficiently scale our business, broaden our
product portfolio and application reach, and respond with agility to fragmented and evolving market
demands, positioning us to capture emerging opportunities in next-generation industries.
Deepen Customer Collaboration to Power Product Innovation
Our growth is fueled by long-term, stable relationships with high-profile customers across
different sectors to guide our product planning and development. We believe that our customer-centric
product innovation is critical to establishing competitive advantages across markets and gaining a
deeper understanding of real-world application challenges and emerging market needs. We will further
expand our global sales network to gain profound, real-time insight into customer demands and
technical requirements. Such frontline insights will ensure our product iterations are precisely aligned
with market needs, enabling rapid optimization of critical parameters such as current capability, power
efficiency and signal accuracy.
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Beyond responsive support, we will actively engage in co-creation initiatives and joint
development projects with end customers, which allow us to co-define and incubate next-generation
products directly with industry innovators. We believe our strategy not only addresses immediate,
application-specific challenges but also allows us to crystallize successful custom developments into
standardized products. These products can subsequently be generalized for broader market
applications, accelerating our time-to-market and enhancing our growth potential. By evolving in
lockstep with our customers’ most advanced projects, we will drive continuous innovation together,
cementing our leadership in delivering products with performance and reliability.
Pursue Strategic Expansion and Alliances and Expand Overseas Market Reach
We plan to actively pursue investment opportunities and identify high-quality acquisition
targets. We intend to focus on both domestic and overseas markets to identify potential strategic
investment and acquisition opportunities, aiming to integrate high-quality assets, broaden our
technology boundaries, extend our product categories and expand into new and emerging markets and
sectors. Through prudent evaluation and targeted acquisitions across the industry, we aim to further
strengthen our competitive position and drive long-term growth.
We are committed to expanding our global footprint by establishing and strengthening our
R&D capabilities, sales networks, and field application support across regions. We believe our unique
business model allows us to closely monitor emerging technology trends, respond swiftly to diverse
customer needs, achieve global resource synergy and technology adoption, continuously improve
product competitiveness and customer service capabilities, and further consolidate our comprehensive
strength in overseas markets.
OUR PRODUCTS
Our product strategy is built on a foundation of deep portfolio breadth and rapid innovation
cycles, positioning us to capitalize on high-growth market trends and address the complex demands of
modern electronics. We have continuously expanded and refined our product families through
significant R&D investment, achieving breakthroughs in core IP and proprietary processes. Our
extensive portfolio spans 38 categories and over 7,200 products, delivering solutions across a wide
range of end markets such as industrial & energy, automotive, networking & computing and consumer
electronics.
We have a comprehensive analog portfolio comprising signal chain ICs and power
management ICs. We are also strategically expanding into sensor products, enhancing our ability to
provide sensing and processing solutions for diverse applications.
 Signal chain ICs are designed to sense, condition and process real-world analog signals
(such as temperature, pressure, sound and light) and convert them into precise digital data
for further processing. These ICs perform critical functions including signal amplification
(using op amps and instrumentation amplifiers), filtering, data conversion (both ADC and
DAC) and signal conditioning. By accurately translating continuous physical phenomena
into digital information, they form the foundation for measurement and control in a wide
array of applications.
 Power management ICs are designed to regulate, distribute and optimize electrical power
within electronic systems. They enhance energy efficiency, promote operational reliability
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and extend battery life in portable and embedded devices. A typical power management IC
integrates multiple power-related functions, such as DC/DC conversion (including
synchronous buck and boost regulators), LDOs, battery charging and management, power
sequencing, supervision (featuring power-on reset and under-/overvoltage protection) and
load switching. This high degree of integration results in a compact, efficient and
thermally optimized power solution that simplifies overall system design and improves
performance.
 Sensors are designed to perceive and measure real-world physical phenomena, such as
temperature, magnetic fields, position and pressure, and convert them into electrical
signals for processing by electronic systems. They serve as the bridge between the
physical and digital domains, providing critical input data for measurement, monitoring,
and automated control systems. Typical sensor products range from discrete sensing
elements to highly integrated sensor products that combine sensing elements with signal
conditioning circuitry. This approach can provide a calibrated digital output, which not
only significantly simplifies system design but also enhances overall performance and
reliability by reducing external interference.
The following table sets forth a breakdown of our revenue by product category for the years
indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Power management ICs ............................ 1,746,024 66.8 2,181,660 65.2 2,379,834 61.1
Signal chain ICs .................................. 864,242 33.0 1,156,700 34.5 1,471,023 37.7
Others(1) ........................................ 5,450 0.2 8,623 0.3 47,198 1.2
Total ........................................... 2,615,716 100.0 3,346,983 100.0 3,898,055 100.0
(1) Others primarily include our revenue from our sensor products and technology services. Technology services represented the service fees
charged for providing customized development products for customers.
The following table sets forth a breakdown of the sales volume and average selling price (ASP)
of our major products by product category for the years indicated. During the Track Record Period, the
ASP of our products decreased, which was primarily due to changes in our product mix.
Year Ended December 31,
2023 2024 2025
Sales
volume ASP
Sales
volume ASP
Sales
volume ASP
(Units in
millions)
(RMB/
unit)
(Units in
millions)
(RMB/
unit)
(Units in
millions)
(RMB/
unit)
Power management ICs ......................... 3,060.6 0.5705 3,934.6 0.5545 5,022.8 0.4738
Signal chain ICs ............................... 1,427.4 0.6055 2,012.7 0.5747 2,792.6 0.5268
Signal Chain ICs
Our signal chain ICs comprise ADC/DAC, amplifiers and comparators, analog switches, audio
and video amplifiers, logic and interface circuits, radio frequency (“ RF”) devices and voltage
references.
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The following table sets forth our major signal chain ICs, description and features:
Product Category Product Description Application Scenarios
ADCs/DACs ADCs/DACs are critical components enabling
bidirectional conversion between analog and digital
domains, each employing distinct architecture suited to
different performance requirements.
Among ADCs, Delta-Sigma ADCs achieve high
resolution by using oversampling and noise-shaping
techniques. Pipeline ADCs are designed to emphasize
high sampling rates through multi-stage and parallel
conversion stages. Successive Approximation Register
(“SAR”) ADCs offer a balance of speed, resolution and
power consumption, making them well-suited for power-
sensitive systems.
Among DACs, Voltage-output DACs are designed to
directly drive loads and are widely used in audio
equipment, while current-output DACs provide the high-
speed performance required in communication systems.
They are also classified by input method as either
parallel or serial. DACs are widely used in audio
equipment and communication systems.
Industrial control
Communication equipment
Measurement instruments
Medical devices
Data acquisition systems
Optical communications
Automotive electronics
Consumer electronics
Amplifiers and
comparators
Amplifiers and comparators are core components in the
signal chain, primarily used for signal amplification and
voltage comparison. This product category encompasses
a comprehensive range of types, including high-speed op
amps, precision op amps, low-noise op amps, low-power
op amps, precision instrumentation amplifiers, high-
voltage op amps, high-speed comparators and low-power
comparators.
Industrial automation
Test equipment
Medical devices
Sensor systems
Notebooks
Automotive electronics
Consumer electronics
Analog switches Analog switches fac ilitate the routing of analog signals with
high speed, low distortion and minimal crosstalk. Key
product variations include high-speed switches,
low-on-resistance switches, high-fidelity audio switches and
switch matrices.
Audio and video systems
Communication systems
Data acquisition systems
Test equipment
Industrial control
Consumer electronics
Audio and video
amplifiers
Audio and video amplifiers comprise a range of
specialized ICs engineered for the conditioning and
amplification of audio and video signals. This product
category includes audio amplifiers, audio power
amplifiers, video buffers and audio DACs, among other
signal-path components. These ICs have demanding
performance requirements, including high precision,
low-noise operation, minimal total harmonic distortion,
low power consumption and multi-channel support.
Audio and video systems
Consumer electronics
Automotive electronics
Medical devices
Surveillance systems
Logic and interface
circuits
Logic and interface circuits include a wide range of basic
logic components, such as inverters, buffers and simple
gates like AND, OR and NAND, as well as level shifters
and interface circuits. These ICs help handle signal
Industrial control
Networking and
communication systems
Consumer electronics
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Product Category Product Description Application Scenarios
integrity and support communication between parts of a
system that may use different voltage levels or logic
standards.
Automotive electronics
PCs and Notebooks
RF devices RF devices are designed to work with high-frequency
wireless signals, commonly referred to as RF signals.
This product category typically includes components
such as RF switches, low-noise amplifiers, power
amplifiers, RF tuners and Wi-Fi transceivers. Their main
tasks include sending and receiving RF signals, as well
as handling tasks like modulation, demodulation, power
amplification and filtering to help build reliable wireless
connections.
Wireless communications
IoT
Radar and navigation
Automotive electronics
Medical devices
Consumer electronics
Voltage references Voltage reference ICs are designed to provide accurate
and stable voltage outputs. Their main function is to
create a dependable voltage reference point inside
electronic systems. These ICs use specialized circuit
methods, such as bandgap and Zener-based designs, to
maintain consistent performance across temperature
changes and to reduce noise.
Data acquisition systems
Test equipment
Industrial control
Consumer electronics
Automotive electronics
Power Management ICs
Our power management ICs encompass AMOLED power supply ICs and LED drivers, DC/DC
converters, driver ICs, LDOs, lithium battery-charging and protection ICs, load switches and protection
circuits, MOSFETs and electrostatic discharge/transient voltage suppressor (“ ESD/TVS”) devices,
power management units and ASICs and system monitoring ICs.
The following table sets forth certain major power management ICs, descriptions and features:
Product Category Product Description Application Scenarios
AMOLED power
supply ICs and LED
drivers
AMOLED power supply ICs and LED drivers are a
family of highly efficient, low-power ICs for a variety of
display and lighting applications. This product category
includes solutions for driving LED backlights and
camera flashes, supplying bias power to LCD panels and
powering AMOLED displays, featuring a range of
devices such as backlight drivers with high dynamic
range, multi-channel backlight drivers, high-current LED
flash drivers, LCD bias power ICs and AMOLED power
supply ICs that use a proprietary power architecture with
a single inductor to support multiple outputs.
Smartphones and
smartwatches
Tablets and notebooks
TVs
AR/VR devices
AMOLED displays
Wearable devices displays
Automotive lighting and
displays
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Product Category Product Description Application Scenarios
DC/DC converters DC/DC converters change one DC voltage level into
another, generating the specific voltage levels required in
electronic systems. These ICs support several conversion
methods including step down (buck), step up (boost),
step up and step down (buck boost) and charge pump
architectures. This product category includes a full range
of high-efficiency, low-power DC/DC converters,
covering the common conversion types and working with
a broad spectrum of voltage and current levels ranging
from high-voltage, high-current systems to low-voltage,
ultra-small current designs.
Consumer electronics
Industrial control
Portable electronic devices
IoT
Communication equipment
Automotive electronics
Driver ICs Driver ICs comprise a range of devices. LED driver ICs
adjust LED brightness by regulating the drive current.
Motor driver ICs are primarily used to drive inductive
loads like DC motors and stepper motors. High-side and
low-side drivers regulate the current in a circuit by
controlling the load’s connection to the positive power
supply and ground, respectively. Gate drivers perform
the function of driving and controlling power
semiconductor devices.
Industrial control
Automotive electronics
Consumer electronics
Robotics
Medical devices
LDOs LDOs are linear voltage regulators that provide stable
DC output by continuously and linearly adjusting the
input voltage. Their key characteristic is the ability to
maintain a regulated output even when the difference
between the input voltage and the output voltage is
minimal, typically less than one volt. We offer a
comprehensive portfolio of high-precision LDO
products, including low-noise LDOs, ultra-low-power
LDOs with Iq as low as 0.25 microamperes, high-voltage
LDOs and multi-output LDO solutions.
Portable electronic devices
Consumer electronics
Automotive electronics
Industrial control
Medical devices
Lithium battery
charging and
protection ICs
We offer a range of high-efficiency battery charging ICs
based on multiple circuit architectures, including linear,
switching and switched-capacitor topologies. Our battery
charging management ICs are typically placed on the
device mainboard, supporting multiple circuit
architectures such as linear, switching, and
switched-capacitor to enable charging modes from
standard to high-voltage fast charging.
Our battery protection ICs include both dedicated
protection controllers for smartphones, which serve as a
core component of the Protection Circuit Module placed
directly on the battery cell, and highly integrated
protector solutions for wearables, which co-package the
control circuitry and MOSFETs to provide an ideal
solution for space-constrained designs.
Battery-powered equipment
Portable electronic devices
Consumer electronics
Automotive electronics
Industrial control
Energy storage systems
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Product Category Product Description Application Scenarios
Load switches and
protection circuits
Load switches and protection circuits are essential
components used to manage power delivery and protect
electronic systems from faults. This product category
includes a variety of ICs such as load switches, eFuses,
overvoltage protection (“OVP”) circuits and overcurrent
protection (“OCP”) circuits. These ICs are typically
manufactured using a highly reliable BCD process
technology, an advanced fabrication approach that
integrates bipolar, CMOS and DMOS devices.
Consumer electronics
Industrial control
Communication equipment
Battery-powered equipment
Automotive electronics
Energy storage systems
MOSFETs and ESD/
TVS devices
MOSFETs, along with ESD and TVS devices, are
classified as discrete devices, with key performance
parameters heavily influenced by specific fabrication
processes, circuit design methodologies and layout
strategies. This product category encompasses
N-Channel MOSFETs, P-Channel MOSFETs, GaN
MOSFETs, as well as dedicated ESD and TVS devices.
Power systems
Motor drive systems
Industrial control
Automotive electronics
Mobile devices
PMUs and ASICs PMUs are highly integrated power management ICs
primarily used for monitoring, regulating and distributing
power supply in electronic systems. These ICs are
offered as both general-purpose and special-purpose
solutions. They typically integrate multiple power rails,
deliver a high level of integration and support advanced
functionality.
ASICs include specialized solutions for optical modules,
such as bias power controllers for Avalanche
Photodiodes (“APDs”) and Electroabsorption Modulated
Lasers (“EMLs”), as well as drivers for Thermoelectric
Coolers (“TECs”). This product category encompasses a
variety of PMUs addressing diverse application
requirements, alongside a series of special-purpose
power ICs catering to optical module power needs.
Portable electronic products
IoT
Optical modules
Communications equipment
Consumer electronics
Automotive electronics
Industrial control
Energy storage systems
System monitoring
ICs
System monitoring ICs include microprocessor power
supply monitoring circuits, voltage detection circuits,
current monitoring circuits and power sequencers.
Among these, microprocessor power supply monitoring
circuits further include ICs featuring watchdog timers
and timing functions.
Industrial control
Consumer electronics
Automotive electronics
Smart grids and security
equipment
Medical devices
Energy storage systems
Sensors
Our sensor portfolio primarily includes temperature sensors and magnetic sensors, and is
designed to provide a broad portfolio of reliable sensing solutions for a wide range of applications.
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The following table sets forth certain major sensor products, descriptions and features:
Product Category Product Description Application Scenarios
Temperature sensors Our temperature sensor products are designed for the
precise measurement of ambient or object temperatures.
These products efficiently convert temperature
information into digital or analog signals for system
processing.
Industrial control
Medical devices
Consumer electronics
Automotive electronics
Energy storage systems
Magnetic sensors Our magnetic sensors are used to detect the magnitude,
direction, or presence of a magnetic field and are widely
used in various position sensing, angle measurement,
and current sensing applications. Our product line covers
both coaxial and off-axis types.
Consumer electronics
Automotive electronics
Medical devices
Industrial control
IoT
Energy storage systems
MARKETS FOR OUR PRODUCTS
The global analog IC market is experiencing significant growth driven by industrial upgrading
and continuous innovation in analog IC technology. We are well positioned to capture the booming
market opportunities, fueled by rising demand across key markets such as industrial & energy,
automotive, networking & computing and consumer electronics, creating vast opportunities for
efficient and cost-effective analog solutions. We are strategically positioned to capitalize on these
trends with a diverse portfolio of analog ICs adapting to the evolving needs of end customers in these
markets.
The table below lists the major end markets for our products:
Market Application
Industrial & Energy Industrial automation
Measurement and test
Robotics
IoT
Medical devices
Energy infrastructure
Automotive ADAS
Body electronics & lighting
Infotainment & cluster
Hybrid, electric & powertrain systems
Networking & Computing AI-driven imaging and audio systems
High-bandwidth networking equipment
Communications equipment
Computing systems
Consumer Electronics Smartphones
PCs & notebooks
Tablets
Portable electronics
Wearables
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Industrial & Energy
Industrial & energy includes industrial automation, measurement and test, robotics, IoT,
medical devices and energy infrastructure. The core objectives across these applications are to enhance
operational efficiency, system reliability and energy sustainability, often through the integration of
digital and smart technologies.
Analog ICs are a fundamental “bridge” and “control system” within these industrial and energy
application scenarios, enabling precise data acquisition, signal conditioning, data conversion, detection,
drive control, and efficient power management.
In industrial automation equipment, analog ICs perform the core functions of signal acquisition
and conversion. Such ICs must possess high precision and low distortion to ensure the operational
stability of the equipment. In industrial motor control, analog ICs are responsible for functions like
current sensing and power regulation. Our high-performance amplifiers and high-speed comparators,
such as precision op amps with microvolt-level input offset voltage, and high-speed comparators with
microsecond-level propagation delay, ensure accurate sensor signal amplification and high-speed
voltage comparison in demanding environments such as industrial control and instrumentation
systems. For critical analog-to-digital and digital-to-analog conversion, our high-precision ADCs and
DACs provide measurement capabilities essential for closed-loop control, battery monitoring and
energy system synchronization.
Our power management ICs, including high-efficiency DC/DC converters, battery charging
management ICs with multiple topology architectures, high-power motor driver ICs, and high-
immunity LDOs, are widely deployed in the process control and power management of industrial
automation equipment, motor control, solar MPPT controllers, and bidirectional ESS to optimize
power conversion efficiency and extend battery life. Additionally, our driver ICs and GaN-based gate
drivers enhance switching efficiency in inverters and motor control units, reducing energy loss and
supporting higher power densities.
Automotive
Automotive covers ADAS, body electronics and lighting, infotainment & cluster and hybrid,
electric & powertrain systems. The architecture of automotive is undergoing a significant
transformation, evolving from traditional distributed ECUs towards more integrated domain control
and centralized compute architectures, which enhances functionality and simplifies system complexity.
Analog ICs function as the central nervous system in modern automotive applications, enabling
critical functions in sensing, power management, actuation and signal chains.
Automotive-grade analog ICs have a wide range of applications across the four major systems
of a vehicle: the powertrain system, body electronics and lighting system, ADAS, and infotainment
system. For instance, in the powertrain system, analog ICs are used to implement high-voltage power
conversion in applications such as motor control systems and on-board chargers, while battery
management ICs enable precision measurement and protection for high-voltage batteries in EVs, which
contributes to extended range and safety. In the body electronics system, analog ICs are utilized in
BCMs and lighting systems; for example, BCMs use analog ICs to manage electrical components like
air conditioning and wipers, and lighting systems rely on LED drivers to achieve pixelated, scalable
and efficient lighting solutions. In ADAS, analog signals from sensing systems like cameras and radars
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require signal conditioning ICs to enhance signal integrity and noise immunity, while high-resolution
ADCs (including Delta-Sigma and SAR ADCs) enable precise conversion of these signals to digital for
real-time analysis by digital processors. In the infotainment system, analog ICs such as display drivers
and audio/video amplifiers are essential for the smooth playback and interactive response of
multimedia content.
In power management, power management ICs deliver stable, efficient and low-noise power to
safety-critical domains (such as ADAS, braking, steering) and complex infotainment systems. For
example, display power solutions integrate buck converters and LDOs to support high-resolution TFT
panels, while camera power management ICs enable reliable operation of ADAS camera modules with
stable, low-noise power supplies.
Networking & Computing
Networking & computing encompasses the core infrastructure that underpins the operation of
modern digital society. This includes communication systems such as 5G base stations and fiber-optic
networks, which are responsible for the high-speed transmission of massive amounts of data;
networking equipment such as switches and routers, which form the backbone of the internet and data
centers; and computing and AI infrastructure, which provide immense computational power through
centralized clusters of CPUs and ASICs for tasks ranging from scientific computing and big data
analytics to AI model training. Collectively, these systems face a continuous demand for higher
bandwidth, lower latency, greater computational power, and improved energy efficiency. The core
function of this infrastructure is to ensure reliability, efficiency, and scalability in handling
exponentially growing data and computational demands.
Analog ICs are pivotal in networking and computing, primarily addressing power management,
timing control and signal integrity.
In timing control and signal integrity, RF devices such as low-noise amplifiers and RF
switches, and PAs, along with logic and interface circuits, enable precise synchronization and robust
signal transmission across high-speed SerDes, PCIe and Ethernet interfaces, which is critical to
maintaining coordination in high-bandwidth networking equipment. In signal conditioning and
conversion, ADCs/DACs (including pipeline, SAR and Delta-Sigma ADCs) and amplifiers (such as
high-speed and precision op amps) enable accurate translation between analog and digital domains,
which are vital for tasks such as sensor data acquisition, analog preprocessing and signal fidelity
maintenance in AI-driven imaging or audio systems.
In power management, DC/DC converters (including multi-phase controllers and DrMOS
solutions and point-of-load Converters) and PMUs are engineered for highly efficient, high-current,
fast-transient power delivery systems for core computing units such as CPUs and ASICs. Additionally,
our power management ICs provide bias power for high-speed optical communication modules, TEC
drivers, and power for memory.
Consumer Electronics
Consumer electronics mainly includes augmented/virtual reality (“ AR/VR”) devices, high-end
audio equipment, smart devices, wearables and AI-enabled portable electronics. These devices are
continually engineered to deliver more immersive user experiences, to extend battery life and to
incorporate stronger on-device intelligence, moving beyond basic functionality to become integrated
parts of the connected lifestyle.
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Analog ICs are instrumental in striking the balance between performance, power consumption
and integration in future-proof consumer devices. Power management is achieved through
new-generation, higher-efficiency, low-power, and small-footprint power management ICs, multi-output
LDOs, ultra-low-quiescent-current DC/DC converters and other products, which are vital for maintaining
the sleek form factors of portable electronic devices and extending battery longevity. The audio signal
chain is enhanced by high SNR op amps, audio amplifiers and audio DACs, which work together to
deliver low-distortion, high-definition sound output. Furthermore, colorful displays and fast, precise
sensing interfaces, such as AMOLED display power supply ICs, LED backlight and flash drivers, and
temperature sensors, significantly enhance the visual fidelity and interactive experience of these gadgets.
OUR BUSINESS MODEL
We operate under a fabless model integrating our proprietary process expertise into the
standard fabless model. This model is a strategic advantage that allows us to channel resources into
circuit design, system-level development and specialized analog processes without incurring the capital
costs of owning fabrication facilities.
We partner with foundries to develop custom, specialized fabrication processes tailored
specifically to our designs, rather than using the standard foundry libraries. This collaboration enables
closer partnerships with our foundry partners and greater control over our production and quality
control processes. Our business model supports multiple proprietary process technologies for distinct
product families. We build know-how in critical areas such as high-voltage operation, ultra-low power
consumption, wide temperature range and precision analog design. Our know-how and processes also
support a smooth transition from prototyping to high-volume production, stabilizing our supply chain
and ensuring high-quality output. These designs are then produced via selected foundry partners and
OSAT providers. Our engineering samples undergo extensive validation, including performance,
reliability and compliance testing, in order to ensure they meet stringent industry standards before mass
production.
Furthermore, as a part of our business model, we have established our own testing base located
in Jiangsu Province, PRC, with a floor area of approximately 2,200 square meters. The testing base
enables us to develop specialized testing capabilities and strengthen our technological foundation. Our
testing base is strategically positioned to focus on high-precision and high-complexity products that
require specialized testing procedures, such as high-precision ADC/DAC products. Prior to relocating
to a new facility at the beginning of 2025, we operated a testing base in a leased facility from 2022 to
2024. The utilization rate of the testing base was 59.7%, 71.1% and 76.6% in 2023, 2024 and 2025,
respectively. The utilization rate is measured based on machine hours, calculated as actual equipment
operating hours divided by theoretical available operating hours. Fluctuations in utilization rates were
primarily driven by the timing and intensity of our product development cycles.
Our business model enhances operational flexibility and agility and enables us to freely select
diverse process platforms and respond to evolving customer requirements and technology trends.
RESEARCH AND DEVELOPMENT
R&D is the lifeblood of our business and the cornerstone of our competitive advantage. We are
committed to a market-driven and customer-centric R&D approach, focusing on the development of
high-performance and high-reliability analog IC products. Our continuous investment in R&D enables
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us to stay at the forefront of technological innovation, expand our product portfolio and address the
evolving needs of our customers.
We believe our strong and experienced R&D team is one of our key competitive strengths. As
of December 31, 2025, our R&D team comprised 1,335 research and engineering personnel,
accounting for approximately 72.8% of our total number of employees. Our R&D team members
possess profound professional expertise, with 56.3% holding a master’s degree or above. More than
31% of our R&D team have accrued more than ten years of domain expertise, including a core group
of approximately 100 personnel with over two decades of expertise in their fields.
Our R&D activities are led by our senior management and core technical experts, who possess
decades of experience in the analog IC industry. Our team is composed of experienced returnees from
overseas, seasoned talent recruited from leading domestic and international semiconductor companies,
and a core group of talent who we have cultivated internally over many years.
Leveraging our deep technical expertise and commitment to industry advancement, we actively
participate in the formulation and revision of key national standards within the industry. Our
contributions include key national standards such as GB/T 4377-2018 Semiconductor Integrated
Circuits—Measuring Methods for Voltage Regulators (
̒ኬ᜗ණϓཥ༩—جwhich
provides critical methodologies for testing voltage regulator parameters, and GB/T 14028-2018
Semiconductor Integrated Circuits—Measuring Methods for Analog Switches (
̒ኬ᜗ණϓཥ༩— ᅼᏝ
جwhich defines test procedures for analog switch performance.
We have invested, and will continue to invest, significant resources in our R&D activities. In
2023, 2024 and 2025, our R&D expenses amounted to RMB737.1 million, RMB870.7 million and
RMB1,045.2 million, accounting for 28.2%, 26.0% and 26.8% of our total revenue for the respective
years.
Our R&D Process
We have established a systematic and structured R&D process to ensure stringent quality
control and project management across all our R&D activities. This process enables us to efficiently
translate market needs into high-quality, commercially viable products.
Project Initiation Stage
Conduct final
validation in their
end applications
Develop mass
production test
programs
Mass Production Stage
Circuit and Layout Design Stage
Conduct architecture
design and extensive
circuit simulation
Transform the verified
schematic into a
physical layout
Engineering Verification Stage
Test Tape out
Establish a detailed
design specification
Complete feasibility
analysis and internal
committee approval
R&D Process
Our R&D process consists of four key stages. First, during project initiation, we establish a
detailed design specification based on market and customer needs, following a comprehensive, multi-
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departmental feasibility analysis and internal committee approval. Subsequently, in the circuit and
layout design stage, our teams conduct architecture design and extensive circuit simulation based on
the approved specifications, transforming the verified schematic into a physical layout. Then, during
engineering verification, the finalized layout data is delivered to our foundry partners for tape-out, and
the resulting engineering samples undergo testing to ensure their performance and long-term reliability
under demanding conditions. Finally, in the mass production introduction stage, we develop mass
production test programs, and collaborate with customers to conduct final validation in their end-
applications. When all the verifications are successfully completed, the product will pass the quality
review and obtain mass production approval.
Our Technology
Our technology strategy is fundamentally market-driven and customer-centric, enabling our
innovation pipeline to remain closely aligned with real-world applications and high-growth
commercial opportunities. We focus on two parallel growth pathways: (i) the continuous performance
enhancement and technological upgrading of our established product lines to sustain their competitive
edge, and (ii) the strategic expansion into new and emerging application fields to diversify our
portfolio and capture future growth vectors.
Our R&D investments are concentrated on three foundational technology domains: signal chain
ICs, power management ICs, and sensor products. Through sustained commitment and capability-
building in these pillars, we have developed a robust suite of core technologies that not only address
evolving customer requirements but also align with industry trends:
 High-Performance Signal Conditioning and Other Key Technologies.Our high-performance
signal conditioning technology platform includes technologies for high-precision op amps,
low-noise op amps, high-speed op amps, high-voltage op amps, low-power op amps, high-
speed comparators, low-power comparator s, high-precision and high-speed ADCs and
DACs, high-end audio ICs, high-fidelity analog switches, and fast level-shifting and
high-speed interface ICs, providing a complete range of high-fidelity signal conditioning
functions. In addition, our RF team is continuously developing a range of RF products to
meet the needs of the wireless communication market.
 Automotive Electronics Technology. We believe the rapid development of China’s EV
market has provided us with a significant opportunity to collaborate directly with
automakers and Tier-1 suppliers. We are dedicated to developing a wide range of
automotive-grade analog ICs that meet the stringent industry requirements for wide
operating temperature ranges and high reliability, including high-side and low-side
switches, gate drivers, LDOs, DC/DC converters, load switches, eFuses, LED drivers,
voltage references, amplifiers, comparators, audio DACs, analog switches, ADCs, voltage
and current monitoring ICs, small logic ICs, and magnetic sensors. As of the Latest
Practicable Date, we had over 600 automotive-grade IC products in mass production and
nearly 200 automotive-grade IC projects in our R&D pipeline, with a particular focus on
applications within the core systems of EVs.
 Efficient, Low-Power Power Management Technology. We are dedicated to providing
advanced power management solutions. These include: (i) battery charging and protection,
where we address the substantial demand from portable electronics by developing innovative
technologies such as switched-capacitor chargers for faster and more efficient charging;
(ii) display power and driver ICs, where we offer a comprehensive range of power supply
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solutions for advanced displays like AMOLED, and various high-efficiency driver solutions
for LED backlights and flashlights; and (iii) high-efficiency, low-power DC/DC converters
and LDOs for various power conversion needs. These products are widely used in
applications ranging from wearables to smartphones and tablets.
 Sensor Technology. This includes high-sensitivity magnetic sensors and high-precision
temperature sensors that deliver excellent performance and can be widely used in
consumer electronics, industrial automation, and automotive applications. For example,
our AMR-based magnetic encoder for off-axis mounting is housed in a compact
3mm×3mm package and highly integrates the magnetic sensor with an ASIC through an
excellent signal processing circuit. It outputs angle data with an effective resolution of
14 bits and an absolute angular accuracy of ±0.3°. It also offers multiple output options,
including SPI, ABZ, and UVW, for customer selection. User-friendly features such as
one-key zeroing and one-key auto-calibration significantly improve motor accuracy and
production efficiency for our customers. Its built-in functions for offset compensation,
amplitude compensation, and temperature compensation provide excellent vibration
resistance and low temperature drift characteristics, making it suitable for various
demanding operating environments.
 Small Form Factor and High-Density Integration Technology. As portable devices and
various space-constrained applications demand increasingly smaller footprints, the ability
to achieve miniaturization without compromising performance has become a core
competitive advantage. We have established miniaturization as a key R&D focus,
continuously pushing physical limits through a combination of advanced circuit design,
efficient and compact layout and routing and proprietary process capabilities. Our
accumulated know-how enables us to integrate complex functionalities within
exceptionally small packages while maintaining excellent performance. Our expertise in
this area is demonstrated in various products: for instance, we offer LDOs in packages as
small as 0.63mm×0.63mm, amplifiers and comparators in 0.8mm×0.8mm footprints, and
power modules that integrate an inductor, capacitor, and DC/DC converter within a
2mm×2mm TDFN package. Furthermore, our 3.1 milliohm MOSFET products can
achieve ultra-compact dimensions of 2mm×2mm. This capability to strike an optimal
balance between size, power consumption, and performance allows us to empower our
customers to develop more compact and efficient end-products.
 Technological and Process Advantage of Our Portfolio. The majority of our product
portfolio is comprised of active products developed using newer-generation process
technologies. We have established a proprietary process team and developed them rapidly,
building a complete process device development system and device testing laboratories.
Our proprietary process devices have already been utilized across multiple product lines,
demonstrating clear performance advantages.
SUPPLY CHAIN MANAGEMENT
We operate a business model centered on our core competencies in R&D and sales. We
outsource our major manufacturing processes, including wafer fabrication, packaging, and testing, to
third-party suppliers. We believe this model allows us to optimize our operational efficiency and focus
our resources on innovation.
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We typically engage reputable suppliers to ensure the quality of our products. We exercise
strict control over the quality and performance of each product. On the one hand, we select foundries
and OSAT providers with high reliability, consistency, and product yield as suppliers; on the other
hand, we subject every new product to a full suite of high-standard tests, and only after passing these
tests do we commence mass production, thereby expanding our product portfolio while ensuring
product quality, reliability and consistency. To further enhance our quality control and oversight, we
station our quality management personnel on-site at our key suppliers to conduct regular quality audits
and oversee the manufacturing process.
Raw Materials and Procurement
Our procurement activities primarily consist of securing (i) foundry-manufactured wafers and
(ii) chip packaging and testing services, which constitute the core components of our products. In
addition, we procure a range of non-production materials and services, including R&D consumables
and equipment, to support our daily operations.
We have implemented a structured procurement process tailored to different types of needs. For
high-volume, long-term procurement such as wafers, we typically enter into framework agreements with
our key suppliers. For project-based or engineering needs, we may conduct a tendering process. For
infrequent, non-production-related purchases, we adopt a spot purchase approach on a case-by-case basis.
Supplier Selection and Management
We have implemented a rigorous and multifaceted process for the selection and ongoing
management of our suppliers to ensure the quality and reliability of our supply chain.
Our selection criteria prioritize technical capability, including process technology
compatibility, quality performance, and the supplier’s scale and reputation in the industry. Importantly,
we have fully integrated ESG considerations into our selection process. We require potential suppliers
to have obtained key management system certifications, such as ISO 14001 (Environmental
Management) and ISO 45001 (Occupational Health and Safety), as a prerequisite for partnership. See
“— Environmental, Social and Governance — Social Responsibility — Supply Chain Management”
for more details.
Our procurement department collaborates with our quality, engineering, and R&D teams to
conduct comprehensive due diligence on all new suppliers. Once approved, suppliers are subject to our
continuous management. Furthermore, we require our suppliers to sign our Code of Conduct and
Integrity and Anti-corruption Commitment Letter, ensuring their alignment with our standards on labor
practices, health and safety, business ethics, and responsible sourcing, including the prohibition of
conflict minerals.
Our Major Suppliers
During the Track Record Period, our suppliers primarily consisted of foundries and OSAT
providers. In 2023, 2024 and 2025, purchases from our five largest suppliers in each year amounted to
RMB1,517.5 million, RMB1,919.6 million and RMB2,180.7 million, respectively. Purchases from our
five largest suppliers in each year of the Track Record Period accounted for 92.4%, 92.3% and 91.0%
of our total purchases, respectively. All of our five largest suppliers in each year during the Track
Record Period were Independent Third Parties.
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The following table sets forth the details of our five largest suppliers in each year during the
Track Record Period.
Year Ended December 31, 2025
No. Supplier
Products/ services
provided Purchase amount
%o f
total
purchase
Year of
commencement of
business relationship
with us
(RMB in thousand)
1 Supplier A (1) Wafer 949,187 39.6 2007
2 Supplier B (2) Packaging and testing services 379,679 15.8 2007
3 Supplier C (3) Wafer 345,303 14.4 2019
4 Supplier D (4) Packaging and testing services 284,597 11.9 2007
5 Supplier E (5) Packaging and testing services 221,910 9.3 2007
Total ............................................. 2,180,676 91.0
Notes:
(1) Founded in 1987, Supplier A is a public company originated and located in Taiwan, China and listed on the Taiwan Stock Exchange,
engaging in the manufacturing of semiconductor products.
(2) Founded in 1998, Supplier B is a public company originated and located in Jiangsu, China and listed on the Shanghai Stock Exchange,
engaging in the provision of OSAT services.
(3) Founded in 2000, Supplier C is a public company originated and located in Shanghai, China and listed on the Hong Kong Stock
Exchange and the Shanghai Stock Exchange, engaging in the manufacturing of semiconductor products.
(4) Founded in 2003, Supplier D is a public company originated and located in Gansu, China and listed on the Shenzhen Stock Exchange,
engaging in the provision of OSAT services.
(5) Founded in 1994, Supplier E is a public company originated and located in Jiangsu, China and listed on the Shenzhen Stock Exchange,
engaging in the provision of OSAT services.
Year Ended December 31, 2024
No. Supplier
Products/ services
provided Purchase amount
%o f
total
purchase
Year of
commencement of
business relationship
with us
(RMB in thousand)
1 Supplier A Wafer 1,104,277 53.1 2007
2 Supplier B Packaging and testing services 258,472 12.4 2007
3 Supplier C Wafer 192,531 9.3 2019
4 Supplier D Packaging and testing services 190,389 9.2 2007
5 Supplier E Packaging and testing services 173,906 8.3 2007
Total ............................................. 1,919,575 92.3
Year Ended December 31, 2023
No. Supplier
Products/ services
provided Purchase amount
%o f
total
purchase
Year of
commencement of
business relationship
with us
(RMB in thousand)
1 Supplier A Wafer 905,878 55.2 2007
2 Supplier B Packaging and testing services 212,301 12.9 2007
3 Supplier D Packaging and testing services 159,733 9.7 2007
4 Supplier C Wafer 125,426 7.6 2019
5 Supplier E Packaging and testing services 114,179 7.0 2007
Total ............................................. 1,517,517 92.4
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To the best of our knowledge and as of the Latest Practicable Date, we were not aware of any
information or arrangement that would lead to the termination of our relationships with any of our
major suppliers. Save for the equity interests previously held by one of our executive Directors, in
Supplier E and Supplier B, which were fully divested in 2022 and 2023, respectively, none of our
Directors and their respective associates, or Shareholders who own 5% or more of the total issued
Shares had any interest in any of our five largest suppliers in each year during the Track Record
Period.
Salient terms of our agreements with major suppliers typically include:
 Duration. The duration of our agreement typically spans at least two years.
 Price. The price is specified in the purchase orders.
 Transfer of Risk. The risk transfers to us after we complete inspection and confirm receipt
of the products.
 Product Return or Exchange. We have the right to return or exchange products if there are
reasonable grounds, such as product defects.
 Termination. We are entitled to terminate the purchase order when the supplier fails to
perform and does not make timely corrections after receipt of our written notice.
Supplier Concentration
During the Track Record Period, we procured wafers and packaging and testing services from
our suppliers. According to Frost & Sullivan, supplier concentration is in line with the industry norm in
the analog IC industry. We have developed long-term and stable cooperative relationships with our
major suppliers to ensure quality consistency of our products and centralized management of
manufacturing demands. Our familiarity with the suppliers’ technical parameters not only supports the
smooth launch and continuity of R&D projects, but also helps us quickly resolve any issues that may
arise during the R&D and manufacturing processes. As we source a significant portion of wafers and
packaging and testing services from our major suppliers, if our relationships with our major suppliers
are terminated, interrupted, or modified in any way adverse to us, there may be material interruptions to
our operations and business. See “Risk Factors — Risks Relating to Our Business and Industry — We
depend on a limited number of third-party suppliers to manufacture our products” for more details.
We have implemented several measures to mitigate the potential risks associated with supplier
concentration. We have expanded our procurement network to include more foundries and OSAT
providers, to strengthen our collaborative relationships with existing suppliers. We dynamically allocate
order volumes among our major suppliers to avoid over-reliance on any single entity. We proactively
identify and qualify second sources for our key products and process technologies as part of our risk
management strategy to ensure supply continuity. We maintain a safety stock of key materials and
finished goods to buffer against unforeseen supply fluctuations or disruptions.
We have maintained long-term and stable relationships with our major suppliers. We have
implemented a supply chain diversification strategy and collaborate with multiple leading foundries
and are continuously qualifying alternative suppliers for our key processes. This strategy enhances our
supply chain resilience and provides us with the flexibility to reallocate production orders if necessary.
The proportion of our total purchases from our largest supplier has decreased during the Track Record
Period. Furthermore, a significant portion of our products utilize mature process technologies for
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which there is ample and available capacity from a wide range of foundries. This reduces our
dependence on any single supplier and ensures supply continuity.
During the Track Record Period, Supplier A was our largest supplier but not our exclusive
supplier for raw materials. We selected Supplier A based on a comprehensive assessment of its
technical capabilities, process technologies and quality performance. We have maintained a business
relationship with Supplier A since our inception and have established a long-term and stable
collaboration. We have maintained a constructive working relationship and did not experience any
material disputes with Supplier A during the Track Record Period and up to the Latest Practicable
Date. Based on the foregoing factors, our Directors are of the view that our relationship with Supplier
A is unlikely to have any material adverse change or be terminated.
OUR SALES NETWORK
We sell our products through a combination of distribution channels and direct sales. We
primarily rely on professional distributors to promote and sell our products. According to Frost &
Sullivan, engagement of distributors for the sales of products is in line with the industry norm in the
analog IC industry. During the Track Record Period, a majority of our revenue was generated from our
distributors. The table below sets forth a breakdown of revenue contribution by sales channels for the
years indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Distribution sales ................................. 2,388,799 91.3 2,999,044 89.6 3,609,911 92.6
Direct sales ...................................... 226,917 8.7 347,939 10.4 280,648 7.2
Others(1) ........................................ — — — — 7,496 0.2
Total ........................................... 2,615,716 100.0 3,346,983 100.0 3,898,055 100.0
Notes:
(1) Others primarily include our technology services’ revenue.
Our Distribution Channels
For analog IC companies with a wide variety of products and a widely distributed customer
base, adopting a distribution model is a common practice. The distribution model can efficiently cover
end markets and satisfy fragmented industry demand. Distributor networks provide localized service
capabilities, handling orders, settlement, and delivery, thereby reducing our operating costs. In
addition, distributors have advantages in the accumulation of customer resources and cross-regional
services, helping us acquire new customers. Through the distribution model, we are also able to
leverage our distributors’ local presence and market knowledge to effectively acquire new customers
and penetrate new regional markets.
Our cooperation model with distributors is a buyout model: distributors purchase our products
and then resell them to end customers, and bear most of the inventory risk themselves. During the
Track Record Period, we identified no material outstanding non-compliance incidents involving
distributors.
As of December 31, 2025, we had 169 distributors. Our distributors are primarily located in the
Chinese Mainland, Hong Kong, Taiwan (China), Singapore, Germany, South Korea, Japan and other
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regions, supplemented by cross-regional distributors operating across multiple areas. The following
table sets forth the movement in the number of our distributors during the years indicated.
Year Ended December 31,
2023 2024 2025
Distributor at the beginning of year .......................................... 9 6 1 0 5 1 0 6
Addition of new distributors ................................................ 9 7 7 0
Terminated distributors .................................................... 0 6 7
Distributors at the end of year ............................................. 105 106 169
We engaged nine, seven and 70 new distributors in 2023, 2024 and 2025, and terminated zero,
six and seven distributors during the years indicated, respectively. The increase in 2025 was primarily
due to the acquisition and integration of two companies primarily engaged in distribution, whose
distributor networks were subsequently consolidated into our own as part of our efforts to broaden our
distribution reach. During the Track Record Period, we did not engage any sub-distributors. Given the
broad and fragmented customer base typical of the analog IC industry, our distribution agreement does
not strictly prohibit distributors from selling products to sub-distributors. Some practitioners engaged
in IC trading will purchase goods from our distributors with smaller order volumes. These businesses
are very small, scattered, and not long-term, so there is no need for them to report to us. According to
Frost & Sullivan, this model aligns with the industry norm. Our transparent management system
safeguards the stability of our distribution network. During the Track Record Period and up to the
Latest Practicable Date, we had no material outstanding disputes or litigation with our distributors.
To the best of our knowledge, during the Track Record Period and up to the Latest Practicable
Date, all of our distributors were Independent Third Parties. To the best of our knowledge, besides the
distribution arrangement with us, there is no other relationship between the distributors and each of our
Company, our subsidiaries, our shareholders who own 5% or more of the total issued Shares, Directors
or senior management or any of their respective associates.
Principal Contractual Terms with Distributors
The key terms of the contracts we entered into with distributors are as follows:
 Term. The duration of our agreement spans a period of two years.
 Purchase. Purchases are made through individual purchase orders placed by our
distributors. Our agreements do not include a minimum purchase commitment.
 Selling Price. The purchase price for our products is confirmed in each individual
purchase order.
 Product Return or Exchange. Generally, we allow product returns or exchanges for
distributors under specific circumstances. Distributors are generally entitled to a certain
return quota provided that the returned products have not been damaged or altered and
remain in a resalable condition. If the products were purchased directly from us within the
past year, the product return request must be approved by us in advance. The return
process is as follows: the distributor submits a return application; our customer service
department verifies the return amount and whether the product satisfies the
aforementioned conditions; upon successful verification, our vice president must grant
final approval before the return can be executed.
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 Termination. Generally, the contract may be terminated if the distributor fails to perform
its obligations. We are entitled to unilaterally terminate the agreement under the
circumstances including (i) there is a material adverse change in the distributor’s
management or ownership; (ii) the distributor violates applicable laws and regulations; or
(iii) the distributor enters into bankruptcy or liquidation.
During the Track Record Period, the product return rates from our distributors remained at a
low level, accounting for less than 2% of our total distribution revenue during the Track Record Period.
According to Frost & Sullivan, our return policy with distributors is consistent with the industry norm.
Distributor Management
An effective management system has been set up for our distributors to maintain the long-term
and stable relationships with our distributors.
 Selection. We are prudent in selecting our distribution partners, seeking to establish
long-term relationships based on mutual trust.
 Performance Review. We achieve mutually agreed-upon sales targets with distributors.
 Price Management. We manage the price range for their resale to end customers. This
strategy is designed to maintain a stable and consistent pricing structure, ensuring
consistent price management across our entire distribution channel.
 Cannibalization Management . We have established and strictly enforce a channel
management system to prevent unauthorized sales and other forms of cannibalization,
ensuring that our pricing system and market order will not be disrupted.
 Distributor Inventory Management. Distributors are responsible for managing their own
inventory. To enhance supply flexibility, our distributors typically maintain a reasonable
level of safety stock to better service the end customers.
 Channel Stuffing Management. We operate on a buyout model, meaning our distributors
purchase products for resale and bear the primary inventory risk.
Our Direct Sales
We have adopted a direct sales model, which serves as an effective complement to our
distribution network. This approach allows us to address the specific needs of different customer types.
Our direct sales customers are primarily distributed across sectors such as consumer electronics,
automotive, networking & computing and industrial, comprising enterprises engaged in manufacturing,
research and development, and sales operations within their respective industries. Under this model,
we enter into sales agreements directly with these end customers and are responsible for the entire
sales process, including order processing, product delivery and payment settlement. This allows for a
streamlined transaction and service workflow managed entirely by us.
Pricing
We adopt a market-based pricing approach. Our pricing takes into account a comprehensive set
of factors, including market conditions in application fields, transaction volume, growth potential, the
competitive landscape, and cost considerations. In our pricing strategy, we adopt a long-term, stable,
and sustainable pricing model. Our pricing is based on the product’s long-term value, quality and
customers’ recognition of the brand.
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MARKETING
As of December 31, 2025, our sales team totaled over 200 people, including sales and field
application engineering teams. We have overseas sales teams in Germany and Japan, and our distributors
cover Europe and other regions worldwide. After product release, we develop the market through routine
methods such as website updates, advertising, technical seminars, and distributor promotion. We focus on
customer needs to continuously strengthen our comprehensive development capabilities for new
products. This enables us to gradually establis h a market position as a comprehensive supplier with
complementary multi-product lines and broad market support capabilities.
OUR CUSTOMERS
During the Track Record Period, our customers primarily consisted of distributors and direct
sales customers. In 2023, 2024 and 2025, our five largest customers in each year during the Track
Record Period together generated RMB974.2 million, RMB1,190.0 million and RMB1,291.3 million
of revenue, respectively, accounting for 37.3%, 35.6% and 33.1% of our total revenue, respectively.
All of our five largest customers in each year during the Track Record Period were Independent Third
Parties.
The following table sets forth the details of our five largest customers each year during the
Track Record Period. In each year during the Track Record Period, our five largest customers
consisted of distributors.
Year Ended December 31, 2025
No. Customer Products sold Revenue
%o f
total
revenue
Year of
commencement of
business relationship
with us
(RMB in thousand)
1 Customer A (1) Signal chain ICs and power management ICs 303,593 7.8 2015
2 Customer B (2) Signal chain ICs and power management ICs 263,998 6.8 2019
3 Customer C (3) Signal chain ICs and power management ICs 243,063 6.2 2008
4 Customer D (4) Signal chain ICs and power management ICs 242,796 6.2 2007
5 Customer E (5) Signal chain ICs and power management ICs 237,808 6.1 2007
Total .................................................. 1,291,258 33.1
Notes:
(1) A public company originated and located in Guangdong, China and listed on the Shenzhen Stock Exchange, engaged in the sales of
semiconductor products.
(2) A public company originated and located in Taiwan, China and listed on the Taiwan Stock Exchange, engaged in the sales of
semiconductor products.
(3) A private company originated and located in Guangdong, China, engaged in the sales of semiconductor products.
(4) A private company originated and located in Guangdong, China, engaged in the sales of semiconductor products.
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Year Ended December 31, 2024
No. Customer Products sold Revenue
%o f
total
revenue
Year of
commencement of
business relationship
with us
(RMB in thousand)
1 Customer C See above 312,564 9.3 2008
2 Customer A See above 268,954 8.0 2015
3 Customer F
(1) Signal chain ICs and power management ICs 218,554 6.5 2007
4 Customer B See above 201,142 6.0 2019
5 Customer G
(2) Signal chain ICs and power management ICs 188,820 5.8 2007
Total .................................................. 1,190,034 35.6
Notes:
(1) A private company originated and located in Guangdong, China, engaged in the sales of semiconductor products.
(2) A private company originated and located in Hong Kong, engaged in the sales of semiconductor products.
Year Ended December 31, 2023
No. Customer Products sold Revenue
%o f
total
revenue
Year of
commencement of
business relationship
with us
(RMB in thousand)
1 Customer C See above 251,420 9.6 2008
2 Customer H (1) Signal chain ICs and power management ICs 195,355 7.5 2017
3 Customer F See above 191,132 7.3 2007
4 Customer A See above 175,020 6.7 2015
5 Customer B See above 161,290 6.2 2019
Total .................................................. 974,217 37.3
Note:
(1) A public company originated and located in the United States and listed on the NASDAQ Stock Exchange, engaged in the sales of
semiconductor products.
To the best of our knowledge and as of the Latest Practicable Date, we were not aware of any
information or arrangement that would lead to the termination of our relationships with any of our
major customers. None of our Directors and their respective associates, or Shareholders who own 5%
or more of the total issued Shares had any interest in any of our five largest customers in each year
during the Track Record Period.
INTELLECTUAL PROPERTY RIGHTS
Intellectual property rights are important to our business. Our future commercial success
depends, in part, on our ability to obtain and maintain patents, IC layouts and other intellectual
property rights related to our business, defend and enforce our patents, preserve the confidentiality of
our trade secrets, and operate without infringing, misappropriating or otherwise violating the
intellectual property rights of third parties.
As of December 31, 2025, we had 588 granted patents in China and overseas, including 497
invention patents. As of the same date, we had 401 registered IC layouts and 156 registered trademarks
in China and overseas.
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DATA SECURITY
We attach the greatest importance to data security and protection. We categorize our data
management systems into business, office, and R&D data. Our information architecture is centered on
SAP ERP, complemented by PLM for R&D management, MES for manufacturing, OA for office
management, distributor management and sales, and WMS for warehousing and logistics systems,
covering key processes such as product and R&D management, sales and customer management,
procurement and supply chain collaboration, inventory and cost control, and quality oversight. We
have established a distributor management database to record and manage information on distributors,
but we do not collect sensitive personal information from distributors or customers. We collect basic
contact information of contact persons from our suppliers, distributors and customers for the purposes
of contract performance and business communication.
To strengthen data protection, we have formulated an information security management scheme
that sets out overall guidance and principles, under which we have established policies and procedures
for system operations management and confidentiality. We have adopted our standard protective
measures including network attack monitoring and prevention, confidentiality categorization, access
control and data backup to prevent unauthorized access, leakage, improper use or modification of,
damage to or loss of data. Our IT Department oversees our digital development and maintains data
security. Together, these measures form a robust security framework that protects our data and upholds
strict information security standards.
LOGISTICS AND INVENTORY MANAGEMENT
Logistics
For the delivery of all finished goods from our warehouse to locations specified by our
customers, we engage qualified third-party logistics service providers. To ensure compliance and
efficient delivery, we set strict standards for the transportation of our products and conduct regular
evaluations. In the supply chain, for wafer procurement, we typically arrange for our designated freight
forwarder to collect the goods from the foundry. For packaging and testing services, our major
suppliers are generally responsible for delivering the finished goods to our designated locations. As of
the Latest Practicable Date, our business operations have not been materially or adversely affected by
any significant delay or inappropriate handling of goods.
Inventory Management
Our main inventories include raw materials, work-in-progress and finished goods. We
emphasize inventory management and implement various policies to ensure effective inventory
management, including continuous monitoring of safety stock and continuous attention to inventory
turnover. Our warehouse specialists regularly perform periodic stock counts and evaluations. Our
production planning specialists refer to inventory levels when formulating procurement plans. The
production planning manager performs inventory analysis based on inventory conditions and
formulates new production plans.
QUALITY MANAGEMENT
We are committed to providing our customers with high-performance and high-quality
products. We have established a rigorous and comprehensive quality assurance system that is guided
by our quality policy. Our commitment to quality is embedded throughout our entire product lifecycle,
from R&D to supply chain management to post-sales service.
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Supply Chain Quality Management
Since we operate under a fabless model, the quality of our products is dependent on the
performance of our third-party supply chain partners. We have implemented a stringent and systematic
quality control framework to manage our key suppliers, primarily foundries and OSAT providers.
Foundries
We procure wafers from world-leading foundries. Before a foundry can be added to our
approved vendor list, it must undergo a rigorous factory process audit conducted by our quality and
technology teams. We require our foundry partners to adhere to foundry quality management
specifications. To ensure quality consistency, we conduct periodic on-site audits of our foundry
partners, after which they are required to submit corrective action plans as required. The agreements
we enter into with our foundry partners reserve us with the right to claim compensation for or return
wafers that fail to meet agreed-upon specifications.
Packaging and Testing Providers (OSAT Providers)
We engage leading OSAT providers to provide packaging and testing services. Similar to our
foundry partners, each OSAT provider must pass a comprehensive on-site audit and reliability
verification to be included in our approved list. We issue our Packaging and Testing Quality Control
Requirements to our packaging and testing providers and require their strict adherence.
Product Returns
We have established a customer complaint handling procedure to ensure that quality issues
reported by customers are addressed in a timely, efficient, and professional manner. We allow product
returns or exchanges for our customers under reasonable circumstances. During the Track Record
Period and up to the Latest Practicable Date, we had not received any material complaints relating to
product quality that had a material or adverse effect on our business, operations or financial condition.
Certifications
Our quality management system is established in accordance with the requirements of
internationally recognized standards, including ISO 9001 and the automotive industry standard IATF
16949. We also adhere to stringent industry-specific standards such as ISO 26262 for automotive
functional safety, as well as standards set by JEDEC and the Automotive Electronics Council
(“AEC”).
COMPETITION
Due to the wide range of application scenarios and the diversity of product categories, the
analog IC industry has developed into a fragmented market structure characterized by the coexistence
of multiple players. According to Frost & Sullivan, the market size of China’s analog IC market
increased from RMB157.0 billion in 2021 to RMB218.4 billion in 2025, and is expected to continue
expanding at a CAGR of 12.2% from 2026 to 2030, reaching RMB389.4 billion by 2030.
The principal competitive factors in our market include technological accumulation, a
comprehensive product portfolio, stable supply chain partnerships, and brand recognition. We have
demonstrated strong market competitiveness and are recognized as a leading domestic analog IC
company. See “Industry Overview — China’s Analog IC Market Competition Analysis — Rankings
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and Market Share Analysis of Analog IC Companies” for more details. We remain focused on
leveraging our R&D capabilities and comprehensive product portfolio to enhance our position in the
market.
AWARDS AND RECOGNITIONS
During the Track Record Period and up to the Latest Practicable Date, we received awards and
recognition in respect of our products, technology and innovation, significant ones of which are set
forth below:
Award/Recognition Award Authority Award Year
China Patent Excellence Award China National Intellectual
Property Administration and the
World Intellectual Property
Organization
2024
National Intellectual Property
Demonstration Enterprise
China National Intellectual
Property Administration
2025, 2024, 2023
Beijing Invention Patent Award Beijing Intellectual Property
Office
2024, 2023
Top 10 China IC Design Companies AspenCore 2025, 2024, 2023
Innovative Product of the Year
Award at the Global Electronic
Achievement Awards
AspenCore 2025, 2024, 2023
Best Power Management IC of the
Year
AspenCore 2023
EMPLOYEES
As of December 31, 2025, we had 1,835 full-time employees. The following table sets forth the
number of our employees by function:
Employee Function Number of Employees % of Total
Technology ....................................................... 1,359 74.06
Sales and Marketing ................................................ 2 5 9 14.11
Production ....................................................... 1 1 8 6.43
Administration .................................................... 9 9 5.40
Total ............................................................ 1,835 100.00
To conduct human resource management, we established a comprehensive set of internal
management measures, outlining the procedures and criteria for recruitment and training, among
others. See “ — Environmental, Social and Governance — Social Responsibility — Employment and
Labor Practices” for more details. We enter into standard labor contracts and confidentiality
agreements with our full-time employees.
As required under PRC laws and regulations, we participate in various employee social security
plans that are organized by applicable local municipal and provincial governments, including housing,
pension, medical, work-related injury, maternity and unemployment benefit plans, under which we
make contributions at specific percentages of the salaries of our employees.
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We believe we maintain a good working relationship with our employees, and we have not
experienced any material labor dispute or any difficulty in recruiting staff for our operations during the
Track Record Period.
INSURANCE
We maintain insurance policies to cover various aspects of our business, including import and
export cargo property insurance, domestic cargo property insurance and product liability insurance to
secure our business continuity. Our product liability insurance generally covers our legal liability in
respect of personal injury or property damage caused by accidents that occurred directly in connection
with products we supplied. According to Frost & Sullivan, the coverage of our product liability
insurance is in line with the market practice. We review our insurance policies timely to ensure their
compliance with the statutory PRC laws and regulations. We believe that our existing insurance
coverage is adequate for our business operation and is in line with the general market practice.
During the Track Record Period, we were not subject to any material claim of insurance.
Nevertheless, we may be exposed to claims and liabilities which exceed our insurance coverage. See
“Risk Factors — Our insurance coverage may not be sufficient to cover all losses or potential claims
by our customers, which would affect our business, financial condition and results of operations” for
more details.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
We are committed to fostering sustainable practices, promoting social responsibility, and
maintaining strong governance standards, reflecting our dedication to Environmental, Social, and
Governance (“ESG”) principles. Our Board oversees our ESG strategy and is responsible for ensuring
that we operate ethically, responsibly, and in compliance with all applicable laws and regulations.
During the Track Record Period, we had not been subject to significant administrative penalties due to
non-compliance with social, health, safety or environmental laws and regulations.
To demonstrate our commitment, we have established comprehensive management systems
structured in accordance with or certified to internationally recognized standards, including ISO 9001,
ISO 14001, ISO 45001, and ISO 26262. Our efforts and performance in the ESG field have also
received widespread recognition. Our MSCI ESG rating has maintained at “BBB” for the past two
years. Furthermore, in 2025, in recognition of our continuous innovation and practices in green and
energy-saving technologies, we were honored with the “Annual Decarbonization & Energy Efficiency
Leadership Award” by the Elexcon Shenzhen International Electronics Exhibition.
Looking forward, and to proactively address climate change, we have set clear long-term
carbon reduction targets with 2025 as the baseline year: we aim to reduce our Scope 1 and Scope 2
carbon emissions per million RMB of revenue from our own operating sites by 50% by 2030, and by
90% by 2050. We have also extended our reduction goals to our value chain, aiming to reduce carbon
emissions from purchased goods and services per million RMB of purchases by 25% by 2030, hoping
to achieve these targets through continuous improvements in our ESG practices.
ESG Governance Structure
We attach great importance to ESG governance and believe that a robust governance structure
is fundamental to the effective integration of ESG considerations into our strategy and operations. We
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have implemented an ESG management organizational structure to ensure the effective execution of
our ESG strategies and policies. This structure is designed to provide clear lines of responsibility and
facilitate both top-down oversight and bottom-up implementation. The structure is organized as
follows:
 Our Board Office takes the lead in our ESG management system, responsible for the
overall coordination and planning of our ESG initiatives and steering the relevant
functional departments. Our Board has the ultimate responsibility for our ESG strategy
and performance. The Board provides overall leadership and direction for our ESG
initiatives, ensuring that they are aligned with our corporate strategy and the long-term
interests of our shareholders and other stakeholders. The Board’s responsibilities include,
among others, reviewing and approving our material ESG policies and targets, overseeing
the implementation of our ESG management systems, and monitoring our performance
against our ESG objectives.
 Our various functional departments, including human resources, operations, quality,
internal control, and information technology, are responsible for the implementation of
specific ESG-related tasks and initiatives that fall within their respective areas of
expertise.
 We have established an ESG Working Group to coordinate day-to-day ESG management,
communication, and information disclosure. The ESG Working Group is also responsible
for tracking progress against our ESG goals and reporting such progress and results to the
Board on a regular basis.
We commenced issuing our ESG report in 2022. We release our ESG report on an annual basis
in the first half of the year. We plan to continue disclosing relevant information on our ESG strategy,
progress and performance in accordance with the requirements of the Stock Exchange and good
international industry practice.
ESG Risk Management
We place a high priority on the identification, assessment, and management of ESG-related
risks. We have established a systematic risk management framework to evaluate the potential impact of
ESG issues on our business operations and financial performance and to formulate corresponding
mitigation measures.
Potential Impacts of ESG-related Risks
We assessed the actual and potential climate-related and social impact on our business and
identified the following risks and opportunities:
Climate-related Risks and Opportunities
We recognize that climate change poses both risks and opportunities to our business. Our
operations and those of our key suppliers in the value chain could be susceptible to the following
climate-related risks:
 Transition Risks . These risks arise from the transition to a lower-carbon economy, which
may entail extensive policy, legal, technology, and market changes. These include (i) risks
associated with increasingly stringent environmental laws and regulations, such as those
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related to carbon emissions and energy consumption, which could increase our compliance
costs; and (ii) market risks related to shifts in customer preferences towards products with
a smaller environmental footprint. Failure to align our products and operations with these
trends could adversely affect our market competitiveness.
 Physical Risks . Our global operations and supply chain may be exposed to physical risks
from climate change, such as extreme weather events. Such events could potentially
disrupt our operations, interrupt our supply chain, and adversely impact our business.
 Opportunities. Concurrently, we believe the transition to a low-carbon economy presents
opportunities for our business. Our strategic focus on “green R&D” and the development
of high-efficiency, low-power consumption products positions us to meet the growing
market demand for green and energy-saving technologies. We have generally optimized
the design of analog ICs in various categories to reduce their own energy consumption,
improve product competitiveness, provide customers with lower power consumption,
more energy-saving and environmentally-friendly solutions, and promote end-products in
the direction of green and low-carbon. We believe our commitment to sustainability and
our portfolio of energy-efficient products enhance our brand reputation and provide us
with a competitive advantage.
Social Risks
We face social risks primarily related to our supply chain and labor practices. Risks in our
supply chain could arise from the failure of our suppliers to comply with applicable laws and our
standards concerning environmental protection, labor rights, and health and safety. Such failures could
lead to supply chain disruptions and reputational damage. See “ — Social Responsibility — Supply
Chain Management” for more details.
Risk Identification, Assessment and Management Process
Our risk identification and management process involves the following key steps:
 Risk Identification. We identify and analyze potential risks from internal and external
sources by taking into account our development strategy, the characteristics of the
industry, and the macroeconomic environment.
 Risk Assessment . We assess the identified risks based on their nature, likelihood of
occurrence, and the potential severity of their impact on our operations and strategy.
 Risk Response. Based on the assessment results, we formulate and implement targeted risk
mitigation measures, which include continuously monitoring risks, updating our response
plans, allocating necessary resources to ensure business continuity, and conducting
relevant compliance training to enhance the risk management awareness of our employees.
We have also established emergency response procedures to ensure that effective
measures can be taken promptly in the event of an incident.
Environmental Protection
We are committed to operating our business in an environmentally responsible manner and
minimizing our environmental footprint. We have implemented a comprehensive environmental
management system and various initiatives to conserve energy, reduce emissions, and manage waste.
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We pay close attention to resource consumption and greenhouse gas (“ GHG”) emissions in our
operations, and we strive to optimize our routine practices to manage the environmental and climate-
related risks arising from our business and production activities.
Metrics and Targets
We monitor our environmental performance by tracking key metrics related to our GHG
emissions and resource consumption.
GHG Emissions
Our primary operations focus on R&D and sales of products under a fabless model. We mainly
source wafers as our key raw materials, while delegating most of the associated packaging and testing
procedures to external professional processing service providers. In addition to a testing base for
product testing, neither our Company nor our subsidiaries are directly engaged in manufacturing
activities. During the Track Record Period, we experienced an increase in GHG emissions as our
number of employees and offices increased. The following table sets forth metrics on our GHG
emissions during the Track Record Period.
Year Ended December 31,
2023 2024 2025
Scope 1 GHG emissions (1) (tCO2e ) .................................... 11.23 12.59 11.35
Scope 2 GHG emissions (2) (tCO2e ) .................................... 3,840.40 4,235.59 6,276.17
Total GHG emissions ............................................. 3,851.63 4,248.18 6,287.52
Notes:
1. Scope 1 GHG emissions are calculated based on natural gas consumption, gasoline consumption, diesel consumption and corresponding
emission factors.
2. Scope 2 GHG emissions are calculated based on purchased electricity, purchased steam and corresponding emission factors.
We deeply recognize the importance of identifying and reducing Scope 3 GHG emissions as an
integral part of our climate actions. Given the complexity of data collection within the value chain, we
are currently enhancing our data gathering mechanism to ensure future compliance with relevant
emission reporting requirements. We have initiated the assessment of our Scope 3 emissions at the
beginning of 2025. As the data-collecting process from our key upstream partners matures, we intend
to progressively disclose our Scope 3 GHG emissions in our future ESG reporting and, in due course,
establish corresponding reduction targets.
To support this initiative, we will strengthen our collaboration with value chain partners to
improve the availability and accuracy of carbon footprint data. Furthermore, we plan to implement
specific measures to reduce Scope 3 emissions, including collaborating with suppliers who
demonstrate lower carbon emissions intensity while maintaining product standards, and encouraging
employees to opt for low-carbon transportation methods.
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Resource Consumption
We primarily utilize resources such as electricity, water, natural gas and fuel in our daily
operations. We actively promote energy saving and consumption reduction to optimize resource usage.
The following table sets forth metrics on our greenhouse gas emissions, electricity and water
consumption during the Track Record Period.
Year Ended December 31,
2023 2024 2025
Natural gas consumption (m 3) ............................ 4,217.00 4,913.82 4,104.03
Fuel consumption (L) ................................... 970.00 889.49 1,081.80
Water consumption (m 3) ................................ 10,148.00 12,630.16 26,562.80
Electricity consumption (kWh) ........................... 6,734,013.00 7,893,380.47 11,615,082.65
Carbon Reduction Targets
To proactively address climate change and align with national and global decarbonization
goals, we have set long-term carbon reduction targets. With 2025 as the baseline year, we aim to
reduce our Scope 1 and Scope 2 carbon emissions per million RMB of revenue from our own operating
sites by 10% by 2026, 20% by 2027, 30% by 2028, 50% by 2030, and 90% by 2050. With 2023 as the
baseline year, we aim to reduce carbon emissions per million RMB of purchases by 5% by 2026, 10%
by 2027, 15% by 2028, and by 25% by 2030. We aim to achieve these targets through continuous
improvements in energy efficiency, promotion of green R&D, and other emission reduction initiatives.
Energy Conservation and Climate Actions
We established and implemented an environmental management system certified to the ISO
14001 standard. We have formulated our Environmental Management Manual to guide our daily
operations. Our key initiatives to conserve energy and address climate change include:
 Energy-efficient Operations. We have implemented various energy-saving measures in our
offices, such as utilizing energy-efficient LED lighting systems and promoting energy and
water conservation awareness among our employees. We also encourage paperless
operations by leveraging our online meeting systems and smart conference tablets. We use
inverter air conditioners and strictly control the air conditioning temperature in accordance
with company regulations. In the next three years, we plan to continuously optimize our
energy usage structure. Specifically, we intend to utilize photovoltaic power generated
from our own rooftops and purchase renewable electricity to reduce our reliance on
traditional energy sources and lower our carbon footprint.
 Green R&D. We have integrated the concept of “Green R&D” into our product
development process. We have accumulated a batch of core technologies, intellectual
properties, and products in areas such as reducing chip power consumption, improving
power conversion efficiency, optimizing processes, and minimizing chip area. Examples
include ultra-low power series op amps, comparators, LDOs, boost and buck DC/DC
converters, and more. We are dedicated to designing and developing products with low
power consumption, smaller form factors, and high efficiency, thereby helping to reduce
the energy consumption of end-user electronic devices.
 Responsible Sourcing. In the processes of raw material selection, wafer manufacturing,
packaging and testing, we strictly require our supply chain partners to adhere to green
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environmental standards. Our products strictly follow the RoHS directive to complete the
corresponding investigation, confirmation, and testing work. Our products meet the EU
REACH regulation’s requirement that the content of SVHC substances is less than 0.1%.
Our partners provide us with the latest third-party testing reports for raw materials and
products, ensuring full compliance with environmental protection laws, regulations, and
certification standards, thereby reducing the environmental impact during chip production,
use, and after failure and disposal.
Waste Management
In addition to a testing base for product testing, neither our Company nor our subsidiaries are
directly engaged in manufacturing activities. As a result, we do not generate large amounts of waste
directly in the operational process. We have established procedures for proper management and
disposal of waste generated from our daily operations. Our approach includes 100% source separation
and clear labeling of all waste. We engage qualified and licensed third-party vendors for the collection
and disposal of electronic waste, such as used cartridges and IT equipment, to ensure compliant and
responsible handling.
Social Responsibility
Employment and Labor Practices
We believe that our employees are our most valuable asset and the core driver of our
sustainable growth. We are committed to protecting the rights and interests of our employees,
providing a safe and healthy work environment, and offering competitive remuneration and
comprehensive development opportunities.
 Employee Health and Occupational Safety. We place the utmost importance on the health
and safety of our employees. We have established a robust occupational health and safety
management system, guided by our Occupational Health and Safety Manual and
structured in accordance with the requirements of the ISO 45001 standard. We have
implemented a range of measures to ensure a safe working environment, including
providing regular safety training to all employees, conducting emergency drills such as
fire drills, and performing routine safety inspections of our facilities and equipment. As a
result of our efforts, during the Track Record Period, no major work-related accidents or
work-related fatalities were recorded, our rate of recordable incidents was zero and our
employee health checkup coverage rate was 100%.
 Remuneration, Welfare and Employee Care. We offer competitive compensation packages
linked to corporate and individual performance. We are firmly committed to the principle
of equal pay for equal work, irrespective of gender. In addition to statutory social
insurance and housing provident funds, which cover 100% of our employees, we provide a
comprehensive range of supplementary benefits, including annual health checkups, group
accident insurance, paid sick leave, and festive allowances. We foster a caring and
supportive corporate culture through various employee activities, including regular sports
clubs and team-building events. Notably, we organize Women’s Development Forum to
support the personal and professional growth of our female employees.
 Employee Development and Training. We are committed to fostering the professional
growth of our employees and have established a comprehensive training and development
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system. We offer dual-track career development pathways, thereby catering to diverse
career aspirations. Our training system is designed to empower employees at all stages of
their careers, featuring various technical training and programs for managers and new
graduates. In 2025, our training initiatives covered 100% of our employees, with an
average of 78.7 training hours per person.
 Diversity and Equal Opportunity. We are committed to creating a diverse, equitable, and
inclusive workplace. We have established policies that ensure equal opportunity in all
aspects of employment, including recruitment, promotion, and remuneration, strictly
prohibiting discrimination based on race, gender, religion, age, disability, or any other
personal characteristic. Furthermore, our policies explicitly forbid any form of harassment.
We have a zero-tolerance policy towards child labor and forced labor. In furtherance of
our commitment to diversity, we actively hire disabled persons to offer them employment
opportunities. As of December 31, 2025, we employed 15 individuals with disabilities.
We have a diverse employee composition. The table below sets forth our employee
composition as of December 31, 2025, in terms of gender, age and education level:
Number of
Employees
By Gender
Male ............................................................................. 1,211
Female ........................................................................... 6 2 4
By Age
50 and above ....................................................................... 6 6
4 0t o4 9 ........................................................................... 3 1 5
3 0t o3 9 ........................................................................... 6 7 2
Below 30 .......................................................................... 7 8 2
By Education
Doctorate ......................................................................... 2 3
Master’s .......................................................................... 8 7 0
Bachelor’s and below ................................................................ 9 4 2
Total ............................................................................. 1,835
Supply Chain Management
We recognize that a responsible and resilient supply chain is critical to our business. We have
implemented a rigorous supply chain management system to ensure that our suppliers adhere to the
same high standards of environmental, social, and ethical conduct that we uphold.
 Supplier ESG Management. Our supplier management process integrates comprehensive
ESG criteria. When onboarding new suppliers, we conduct a multi-dimensional
assessment that includes their environmental and social responsibility performance. We
require our suppliers to obtain and maintain key management system certifications,
including ISO 14001 and ISO 45001. We encourage and support suppliers in
implementing sustainable development, prioritizing those with low energy consumption
and low emissions. We conduct regular performance evaluations of our suppliers, and
those who fail to meet our standards are required to implement corrective actions or risk
termination of our business relationship.
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 Responsible Sourcing and Conflict Minerals Management. We are highly committed to
responsible sourcing of minerals. We have a zero-tolerance policy for conflict minerals.
We utilize the Conflict Minerals Reporting Template developed by the Responsible
Minerals Initiative to survey our suppliers and ensure the traceability of minerals such as
tin, tantalum, tungsten, and gold. We have also incorporated conflict-free sourcing
requirements into our agreements with suppliers.
Product Responsibility
We are committed to providing our customers with high-performance, high-quality products.
We have established a comprehensive quality assurance system that has been certified to
internationally recognized standards, including ISO 9001 quality management system and ISO 26262
for automotive functional safety. Our quality control measures are embedded throughout the entire
product lifecycle, from design and development to production to post-sales service. To ensure that we
consistently meet and exceed customer expectations, we have implemented a customer complaint
handling procedure, which ensures that all customer feedback is addressed in a timely and effective
manner. We continuously monitor customer satisfaction, and for the year 2025, we achieved a
weighted customer satisfaction score of 92.88%.
Anti-corruption
We are resolutely committed to upholding the highest standards of business ethics and integrity
in all our operations. We strictly prohibit any form of bribery, corruption, extortion, and fraud. To
ensure adherence to this principle, we have established and rigorously implemented our Integrity and
Anti-corruption Management Regulations, which apply to all employees and business partners. Our
Audit Committee is responsible for the oversight of matters concerning commercial ethics and anti-
corruption. We conduct regular anti-corruption training for all employees to enhance their awareness of
and compliance with our ethical standards. Furthermore, all employees in sensitive roles, such as
marketing and procurement, are required to sign an Integrity and Anti-corruption Commitment Letter,
reinforcing their obligation to conduct business ethically.
During the Track Record Period and up to the Latest Practicable Date, we were not involved in
any material legal proceedings or subject to any penalties in relation to bribery, extortion, fraud, and
money laundering.
Community Investment
We believe that our long-term success is intrinsically linked to the well-being of the communities
in which we operate. We are committed to being responsible corporate citizens and actively seek
opportunities to make positive contributions to society. Our community investment strategy is primarily
focused on supporting education and nurturing future talent for the industry, which we believe creates
shared value for both society and our Company. We actively collaborate with charitable foundations to
carry out public welfare activities. Our initiatives include programs aimed at supporting the educational
pursuits of students. We have provided scholarships and teaching awards to multiple universities to
encourage academic excellence and support faculty development. We also engage with the next
generation of engineers by sponsoring events such as student chip design competitions, providing a
platform for them to innovate and apply their knowledge to real-world challenges.
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PROPERTY
Our headquarters is in Beijing, China. According to section 6(2) of the Companies (Exemption of
Companies and Prospectuses from Compliance with Provisions) Notice, this prospectus is exempted from
compliance with the requirements of section 342(1)(b) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance in relation to paragraph 34(2) of the Third Schedule to the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, which requires a valuation report with respect to all our interests
in land or buildings, for the reason that, as of the Latest Practicable Date, none of the properties leased by us
had a carrying amount of 15% or more of our consolidated total assets.
Owned Property
As of the Latest Practicable Date, we owned two properties in Harbin and Jiangyin City,
corresponding to nine real estate ownership certificates, with an aggregate gross floor area of
approximately 43,786.61 sq. m., which were mainly used in our business operations.
Leased Property
As of the Latest Practicable Date, we primarily leased 25 properties in China with an aggregate
gross floor area of 21,405.82 sq.m. mainly as our offices. We believe that there is sufficient supply of
properties in Chinese Mainland, and we do not rely on the existing leases for our business operations.
We believe that our current facilities are adequate to meet our current needs.
As of the Latest Practicable Date, we did not obtain title documents for certain leased properties
from lessors. In addition, we had not obtained the registration of lease agreements for 13 of our leased
properties in the PRC, two of which were in the process of registration as of the Latest Practicable
Date. In accordance with the relevant PRC laws and regulations, failure to complete the registration
and filing of lease agreements will not affect the validity of the lease agreements, but we may be
subject to a penalty ranging from RMB 1,000 to RMB10,000 for each non-registered lease if we fail to
rectify such non-compliance within the prescribed time frame after receiving notice from the relevant
competent authorities.
LICENSES, APPROVALS AND PERMITS
During the Track Record Period and up to the Latest Practicable Date, we had obtained all
requisite licenses, permits, approvals, and certificates from the relevant government authorities that are
material for our business operations. We continually monitor our compliance with these requirements
in order to ensure that we have all such approvals, licenses and permits as are necessary to operate our
business.
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The following table sets forth certain material licenses, approvals and permits:
License/Approval/Permit Granting Authority Registration Date Expiration Date
Customs Broker Registration
Certificate .................... Zhongguancun Customs, PRC June 26, 2012 N/A
Customs Broker Registration
Certificate .................... Pudong Customs, PRC August 31, 2018 N/A
Customs Broker Registration
Certificate ....................
Wujin Office, Changzhou Customs,
PRC June 1, 2021 N/A
Customs Broker Registration
Certificate .................... Pudong Customs, PRC August 31, 2021 N/A
Customs Broker Registration
Certificate .................... Jiangyin Customs, PRC March 15, 2022 N/A
Customs Broker Registration
Certificate ....................
Xiaoran Office, Qianjiang
Customs, PRC December 5, 2022 N/A
Customs Broker Registration
Certificate .................... Shanghai-Xuhui Customs, PRC March 28, 2023 N/A
Customs Broker Registration
Certificate .................... Bingcheng Customs, PRC March 7, 2024 N/A
Customs Broker Registration
Certificate .................... Fuzhong Customs, PRC April 7, 2026 N/A
LEGAL PROCEEDINGS AND COMPLIANCE
During the Track Record Period and up to the Latest Practicable Date, we had not been
involved in any actual or pending legal, arbitration or administrative proceedings (including any
bankruptcy or receivership proceedings) that we believe would have a material adverse effect on our
business, results of operations and financial condition.
During the Track Record Period and up to the Latest Practicable Date, we had not been
involved in any non-compliance matters that have led to significant administrative penalties that we
believe would have a material adverse effect on our business, results of operations and financial
condition. During the Track Record Period and up to the Latest Practicable Date, to the best knowledge
of our Directors, the Group had complied with the applicable Listing Rules and securities laws, and the
applicable laws and regulations in all material respects. Based on the due diligence conducted by the
Joint Sponsors, nothing has come to the Joint Sponsors’ attention that would reasonably cause them to
disagree with the Directors.
THE IMPACT OF COVID-19
Since the first quarter of 2020, the global economy has been disrupted by the onset of the
COVID-19 pandemic. To contain the spread, the PRC government and authorities worldwide enforced
various containment protocols, including travel restrictions, quarantines, remote working policies, and
temporary business closures. However, by January 2023, substantially all restrictive measures within
the PRC had been rescinded or relaxed.
During the pandemic, customs controls impeded the cross-border flow of raw materials, which
contributed to the industry-wide wafer shortage and raw material price inflation witnessed in 2021 and
2022. Nevertheless, the implications of COVID-19 on our general business operations and R&D
progress remained manageable. During the Track Record Period and up to the Latest Practicable Date,
we encountered no significant suspension of operations, nor were our product delivery capabilities
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materially impaired by the pandemic. We have maintained a stable financial performance over the
Track Record Period and have not been significantly impacted by the pandemic. We adopted strict
health and safety protocols in compliance with government guidelines to maintain our daily operations.
Accordingly, our Directors are of the view that the COVID-19 outbreak has not had, and will not have,
any material adverse impact on our business, financial condition or results of operations.
IMPACT OF THE OUTBOUND INVESTMENT RULE
Our Sanctions Legal Adviser is of the view that the Outbound Investment Rule will not have
any material impact on the Global Offering, the operations, financial performance, or investment
prospects of our Company for the reasons outlined below:
 We are a Covered Foreign Person. Our business constitutes “covered activities,” and
investments by U.S. persons in us constitute “notifiable transactions” under the Outbound
Investment Rule. However, they do not constitute “prohibited transactions” because our
integrated circuits do not meet the criteria of advanced ICs or any other parameters under
“prohibited transactions”.
 An investment by a U.S. person in a publicly traded security is exempted under the
Outbound Investment Rule. Therefore, U.S. investors who acquire publicly traded shares
in us are excepted from the notification requirements as long as the investment does not
afford the U.S. persons rights beyond standard minority shareholder protections.
 Should the investments by U.S. persons be considered “notifiable transactions,” the
obligation to report the “notifiable transactions” to the U.S. Department of the Treasury
falls on the U.S. persons if they subscribe for the Shares in the Global Offering, but not on
us. Investments by persons other than U.S. persons are not subject to the Outbound
Investment Rule.
Based on the factors above, nothing has come to the Joint Sponsors’ attention that would
reasonably cause them to disagree with the Directors’ view above. Nonetheless, the Outbound
Investment Rule may increase the compliance burden on U.S. investors if any U.S. investors intend to
purchase shares before the initial public offering or if future U.S. investors intend to make other types
of “covered transactions.” See “Risk Factors — Risks Relating to Our Business and Industry — We
may be subject to the risks associated with international trade policies, export controls, economic or
trade sanctions, investment restrictions, geopolitics and trade protection measures such as unreasonable
tariff arrangements, and our business, financial condition and results of operations could be adversely
affected” for more details. See “Regulatory Overview — Outbound Investment Rule by the U.S.
Department of the Treasury” for details of the Outbound Investment Rule.
RISK MANAGEMENT AND INTERNAL CONTROL
We have established and currently maintain risk management and internal control systems
consisting of policies and procedures that we consider to be appropriate for our business operations.
We are dedicated to continuously improving these systems. We have adopted and implemented risk
management policies in various aspects of our business operations. We have formulated and
implemented our Procedures for the Control of Risks and Opportunities to guide our risk management
efforts. Our Board is responsible for the establishment and updating of our internal control systems,
while our audit committee monitors the daily implementation of the internal control procedures and
measures with respect to each subsidiary and functional department.
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Operational Risk Management
We are faced with operational risks relating to our daily operations, which primarily arise from
inadequate or failed internal controls and systems, human errors, IT system failures or external events.
We consider these operational risks to be the key risks in our business and believe that, with adequate
operational policies and procedures, these inherent risks can be controlled and mitigated. To ensure
effective risk management, we have put in place a detailed risk management policy which sets out the
main operational risks and risk control measures of each department within our Group. We conduct
risk management evaluations on an annual basis, and our internal audit department will report the
evaluation results to our Directors for further improvement.
Financial Reporting Risk Management
We have in place a set of accounting policies in connection with our financial reporting risk
management, including an accounting manual, budget management policies, treasury management
policies, expense management policies, and employee reimbursement policies. We have various
procedures and IT systems in place to implement our accounting policies, and our finance department
reviews our management accounts based on such procedures. For example, we implement our budget
plan through the IT system and continuously track various operating expenses for effective monitoring.
We also provide regular training to our finance department employees to ensure that they understand
our financial management and accounting policies and implement them during daily operations.
Compliance Risk Management
We are subject to evolving regulatory requirements in the PRC, including requirements to
obtain and renew certain licenses, permits, approvals and certificates for our business operations in
different regions. In order to manage our ongoing compliance with the laws and regulations applicable
to our business effectively, we have implemented several internal control measures. In particular, we
designated personnel to regularly monitor changes in laws, regulations and policies issued by the
relevant government authorities in the regions we operate to ensure we obtain requisite licenses to
operate our business, and we have an up-to-date understanding of the applicable requirements. In
addition, we monitor and review the status of our licenses and permits on a regular basis. We
continually improve our internal policies according to changes in laws, regulations and industry
standards, and update our internal protocols accordingly.
Intellectual Property Risk Management
To ensure proper management of our intellectual property and avoid litigation concerning
intellectual property infringement, we have implemented various internal policies and established an
internal intellectual property management system. As a technology-intensive company, we have been
and may continue to be subject to claims from companies holding patents or other intellectual property
rights, alleging infringement of such rights or otherwise asserting their rights and urging us to obtain
licenses in the course of our operations. See “Risk Factors—We may be involved in intellectual
property litigation and disputes, which could be costly and time-consuming, and an adverse outcome
could materially and adversely affect our business, financial condition and results of operations” for
more details.
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Human Resources Risk Management
We have put in place a series of human resources policies and codes of conduct, which contains
internal rules and guidelines regarding anti-corruption, conflicts of interest, confidentiality and
intellectual property protection, work ethics, and fraud prevention mechanisms. We provide employees
with regular training and guide employees to work in accordance with the policies and codes of
conduct.
We have in place an anti-bribery and corruption policy to safeguard against any corruption
within our Group. The policy explains potential bribery and corruption conduct and our anti-bribery
and corruption measures. We make our internal reporting channel open and available for our
employees to report any bribery and corruption acts to the head of internal audit on an anonymous
basis.
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FINANCIAL INFORMATION
The following discussion and our analysis should be read in conjunction with our
consolidated financial statements included in the Accountants’ Report in Appendix I, together
with the accompanying notes. Our consolidated financial statements have been prepared in
accordance with IFRS.
The following discussion and analysis contain forward-looking statements that reflect our
current views with respect to future events and financial performance. These statements are based
on our assumptions and analysis in light of our experience and perception of historical trends,
current conditions and expected future developments, as well as other factors we believe are
appropriate under the circumstances. However, whether actual outcomes and developments will
meet our expectations and predictions depends on a number of risks and uncertainties, and our
actual results may differ materially from those anticipated in these forward-looking statements as
a result of certain factors. In evaluating our business, you should carefully consider the
information provided in this prospectus, including but not limited to the sections headed “Risk
Factors” and “Business.”
For the purposes of this section, unless the context otherwise requires, references to 2023,
2024 and 2025 refer to our fiscal years ended December 31 of such years, respectively.
OVERVIEW
We are a leading analog IC company in China. We design, develop and sell analog ICs and
sensors that sense, amplify, convert and power, forming the fundamental building blocks of all
electronic systems. Since our founding in 2007, we have developed a comprehensive and expanding
product portfolio that extends the reach of what electronics can achieve. With over 7,200 analog and
sensor products spanning 38 categories as of the Latest Practicable Date, we offer system-ready
solutions backed by robust design and process capabilities that shorten time-to-market. We deliver
analog advances that move customers forward in every generation of their designs and innovations.
Having long been core components in end markets such as industrial, networking and consumer
electronics, our products are also contributing to broader uptake in applications across EVs, data
centers, robotics, renewable energy and next-generation consumer devices.
We offer a wide, differentiated portfolio of general-purpose and application-optimized analog
products, encompassing signal chain and power management, the twin pillars of our product matrix
that define our role as a major provider of analog ICs. Our signal chain ICs help electronic devices
interpret the physical world. They take signals that come from sensors and prepare them for digital
processing. Our signal chain ICs capture, condition and amplify signals from the physical world and
convert them into digital data with high accuracy. Our products maintain data integrity from the point
of acquisition to the final output, which is important for applications that require precise measurement,
low noise and minimal error. Our power management ICs control how energy is delivered within an
electronic device. They determine how much power each part of a device receives, convert power into
the levels required by different components and distribute power safely through the system. They also
guard against issues such as surges or irregular power flow. By keeping power steady and well
regulated, the products help systems operate reliably and use energy efficiently. Complementing our
analog portfolio, we also provide a specialized range of sensors that mark the entry point of connection
between the real and digital worlds, delivering high-precision measurement and monitoring of key
environmental and physical parameters.
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FINANCIAL INFORMATION
In 2023, 2024 and 2025, our revenue amounted to RMB2,615.7 million, RMB3,347.0 million
and RMB3,898.1 million, representing a CAGR of 22.1% from 2023 to 2025. We maintained
sustainable profitability throughout the Track Record Period. Our gross profit margin was 44.9%,
47.2%, and 46.2%, respectively. We recorded adjusted net profit (non-IFRS measure) of
RMB388.7 million, RMB576.0 million, and RMB693.5 million, respectively.
BASIS OF PREPARATION AND PRESENTATION
The historical financial information of our Group has been prepared in accordance with IFRS
Accounting Standards which comprise all standards and interpretations approved by the International
Accounting Standards Board. The preparation of the historical financial information in conformity with
IFRS Accounting Standards requires the use of certain material accounting policy information. It also
requires management to make judgments, estimates and assumptions in the process of applying our
accounting policies. Judgments 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 the Accountants’ Report included in Appendix I to this prospectus.
MAJOR FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business, results of operations and financial condition have been, and are expected to
continue to be, materially affected by the following factors.
Company-specific Factors
General market conditions in our industry
We primarily engage in designing, developing and selling analog ICs, and our business and
financial condition are affected by the global and China’s analog IC market conditions. These market
conditions are further substantially influenced by supply-demand dynamics, which are subject to
various factors beyond our control. Such factors include competition, technological advancements, as
well as shifting downstream market preferences. If the supply of analog ICs exceeds demand, the
market dynamics for our products could be adversely affected. According to Frost & Sullivan, China’s
analog IC industry experienced a cyclical downturn in 2023, primarily due to macroeconomic
challenges and weak overall semiconductor demand. Our revenue in 2023 declined compared to the
prior year.
Notably, the industry began to show signs of recovery in 2024 and we have achieved growth
and outperformed industry cycles by delivering high-performance solutions that meet specific industry
and customer demands. We are deeply embedded in the technological evolution of high-growth sectors
and we will continue to leverage our technological capabilities, deepen customer insights and
strengthen our market position to drive steady growth and enhance profitability.
Our ability to diversify and expand our product offerings
Our competitive strength lies in our diverse and adaptable product offerings that cater to a wide
range of needs, and our comprehensive analog portfolio strengthens our operational resilience against
cyclical fluctuations. The ability to offer diversified analog ICs is one of the most important factors
affecting our results of operations and financial condition. We have engineered the most
comprehensive analog and sensor portfolio in China, according to Frost & Sullivan, with over 7,200
products across 38 categories, providing our customers with distinctive breadth and depth to address
complex design challenges across industries. In 2023, 2024 and 2025, we achieved sales volume of
4,498.1 million units, 5,964.1 million units, and 7,862.7 million units, respectively.
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The mix of analog IC products and the price of each product we provide are also among the
primary factors that affect our revenue and profitability. During the Track Record Period, we
primarily derived our revenue from the sale of signal chain ICs and power management ICs. We
maintained sustainable profitability throughout the Track Record Period despite the industry
downturn in 2023. In 2023, 2024 and 2025, our revenue was RMB2,615.7 million,
RMB3,347.0 million and RMB3,898.1 million, respectively, and our adjusted net profit (non-IFRS
measure) was RMB388.7 million, RMB576.0 million and RMB693.5 million, respectively. Our
product mix may fluctuate in response to the technological changes in the industries and markets to
which our products are sold, and the changes in market demand. We aim to further enrich our
product portfolio in the future.
Continuous investment in R&D talent and technologies
To maintain our competitiveness in the global and China’s analog IC industry and achieve
sustainable growth, we must continuously integrate new technologies into our products in a timely and
effective manner to meet the ever-changing needs of our customers. Building on our extensive R&D
expertise in analog ICs, we are accelerating R&D and core IP expansion in critical analog domains to
drive technological breakthroughs across our entire product portfolio.
Leveraging our proprietary technologies, our analog ICs have achieved reliability and stability
in accordance with industry standards, and we are able to supply end customers with a highly
dependable and diverse product offering. To extend our technology leadership in the analog IC
industry, we have made significant investments in upgrading our technology capabilities and R&D
infrastructure. In 2023, 2024 and 2025, we incurred R&D expenses of RMB737.1 million,
RMB870.7 million and RMB1,045.2 million, respectively. Going forward, we will continue to invest
resources in R&D to support the long-term growth of our business.
The growth of our business also depends largely on our R&D talent pool. We have established
a comprehensive R&D system and training mechanism to cultivate our R&D team. As of
December 31, 2025, our R&D team comprised 1,335 research and engineering personnel, accounting
for approximately 72.8% of our total number of employees. Our R&D team members possess profound
professional expertise, with 56.3% holding a master’s degree or above. More than 31% of our R&D
team have accrued more than ten years of domain expertise, including a core group of approximately
100 personnel with over two decades of expertise in their fields. As we believe our success will
significantly depend on our ability to maintain a leading R&D team in our industry, we will continue to
invest additional resources to attract more R&D talent.
Our ability to efficiently manage our sales network and enhance the market acceptance of our
products
During the Track Record Period, we strategically collaborated with distributors to expand our
market reach and effectively serve the needs of customers in various regions. We have made proactive
efforts in product promotion and global market expansion, which have contributed significantly to the
expansion of our market reach and customer base, and, as a result, the growth of our sales volume and
revenue. During the Track Record Period, we primarily sold and marketed our products and provided
services through distribution channels. In 2023, 2024 and 2025, our revenue generated from sales to
distributors amounted to RMB2,388.8 million, RMB2,999.0 million and RMB3,609.9 million,
respectively, accounting for 91.3%, 89.6% and 92.6%, respectively, of our revenue for the
corresponding years. Our distributors amplify our market presence through their established networks
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and deep local insights. As a result, our ability to expand and efficiently manage our sales and
distribution network remains critical to our business and financial performance.
In addition, we leverage our comprehensive product portfolio to meet the varied needs of
customers across different industries. We monitor changes in market demand and leverage our strong
technical capabilities to meet the escalating requirements of our customers for the performance and
stability of analog IC products. This breadth in capabilities helps foster customer loyalty, enhance the
market acceptance of our products and therefore increase our revenue. Our strategic partnerships with
major customers further established us as a trusted provider in the market, while our reputation for
reliability and innovation attracts new end customers across additional regions and sectors. In the
future, we will continue to deepen our relationship with existing distributors, direct sales customers and
our end customers, and expand sales channels to attract new customers in critical end markets.
Relationship with our major suppliers
We operate under a fabless model centered on our core competencies in R&D and sales. We
outsource our major manufacturing processes, including wafer fabrication, packaging, and testing, to
third-party suppliers. During the Track Record Period, we established strong and long-term
cooperation with several major suppliers for wafer fabrication, packaging and testing. See
“Business—Our Business Model” and “Business—Supply Chain Management” for more details.
Therefore, our ability to maintain long-term stable business relationships with our major suppliers to
provide us with qualified wafers and packaging and testing services on a timely basis is crucial for our
business development and results of operations. We believe our efficient supply chain management
enables us to quickly launch and upgrade our product mix in response to customer demand. We also
seek to enhance our bargaining power in supply purchases by leveraging our growing procurement
scale.
However, supply chain disruptions and manufacturing capacity limitations may result in
delayed delivery. See “Risk Factors—Risks Relating to Our Business and Industry—We depend on a
limited number of third-party suppliers to manufacture our products” for more details. During the
Track Record Period, we were not subject to shortages in the supply of raw materials or services from
our suppliers. We do not anticipate any supply chain constraints that would materially and adversely
affect our business and results of operations.
General Factors
In addition, our results of operations and financial position have been and are expected to be
affected by the following general factors:
 global and China’s macroeconomic conditions;
 technology advancements and competition in the analog IC industry; and
 relevant laws and regulations, and governmental policies and initiatives.
MATERIAL ACCOUNTING POLICIES AND ESTIMATES
We have identified certain accounting policies that are significant to the preparation of our
financial statements. In the application of our accounting policies, our management is required to make
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judgments, estimates and assumptions that affect the application of accounting policies and reported
amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are
based on historical experience and other factors that are considered to be reasonable under the
circumstances, the results of which form the basis of making the judgments about the 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 recognized in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision and future periods if the revision
affects both current and future periods.
Our material accounting policies, as well as our key source of estimation uncertainties, which
are important for understanding our financial condition and results of operations, are set forth in
Notes 2.3 and 3 to the Accountants’ Report in Appendix I to this prospectus.
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RESULTS OF OPERATIONS
The following table sets forth a summary of our consolidated statements of profit or loss for the
years indicated.
Year Ended December 31,
2023 2024 2025
(RMB in thousands)
Revenue ................................................... 2,615,716 3,346,983 3,898,055
Cost of sales ................................................ (1,440,156) (1,766,139) (2,095,593)
Gross profit ................................................ 1,175,560 1,580,844 1,802,462
Other income and gains ........................................ 120,963 108,309 193,378
Selling and marketing expenses ................................. (198,571) (234,184) (258,450)
Administrative expenses ....................................... (91,409) (106,086) (125,874)
Research and development expenses ............................. (737,074) (870,747) (1,045,195)
Impairment losses on financial assets and contract assets, net .......... (1,677) (1,086) (2,457)
Other expenses .............................................. (3,697) (2,606) (9,527)
Finance costs ................................................ (2,277) (2,242) (11,996)
Share of (losses)/profits of associates ............................. (7,679) 12,581 7,549
Profit before tax ............................................. 254,139 484,783 549,890
Income tax credit/(expense) .................................... 15,798 6,379 (15,515)
Profit for the year ........................................... 269,937 491,162 534,375
Non-IFRS Measure
To supplement our consolidated financial statements, which are presented in accordance with
IFRS Accounting Standards, we also use adjusted net profit (non-IFRS measure) as an additional
financial measure, which is not required by, or presented in accordance with, IFRS Accounting
Standards.
We define adjusted net profit (non-IFRS measure) as profit for the year, excluding equity-
settled share-based transactions. Equity-settled share-based transactions represent the non-cash
employee benefit expenses incurred in connection with our award to key employees. Such expenses in
any specific period are not expected to result in future cash payments.
The following table sets forth a reconciliation of our profit for the year to adjusted net profit
(non-IFRS measure) for the years indicated.
Year Ended December 31,
2023 2024 2025
(RMB in thousands)
Profit for the year .................................................. 269,937 491,162 534,375
Add:
Equity-settled share-based transactions .............................. 118,791 84,836 159,113
Adjusted net profit for the year (non-IFRS measure) .................... 388,728 575,998 693,488
We believe that adjusted net profit (non-IFRS measure) provides useful information to
investors and others in understanding and evaluating our consolidated results of operations in the same
manner as they help our management. However, our non-IFRS measure does not have a standardized
meaning prescribed by IFRS Accounting Standards, and our presentation of adjusted net profit
(non-IFRS measure) may not be comparable to similarly titled measures presented by other companies.
The use of adjusted net profit (non-IFRS measure) has limitations as an analytical tool, and you should
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not consider it in isolation from, or as a substitute for an analysis of, our results of operations or
financial condition as reported under IFRS Accounting Standards.
KEY COMPONENTS OF OUR CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Revenue
Revenue by Product Type
During the Track Record Period, we primarily generated revenue from the sales of our signal
chain ICs and power management ICs. We generally recognize revenue when our products have been
delivered to our customers. For the years ended December 31, 2023, 2024 and 2025, our revenue
amounted to RMB2,615.7 million, RMB3,347.0 million and RMB3,898.1 million, respectively. The
following table sets forth a breakdown of our revenue by product type, in absolute amounts and as a
percentage of total revenue, for the years indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Power management ICs ............................ 1,746,024 66.8 2,181,660 65.2 2,379,834 61.1
Signal chain ICs .................................. 864,242 33.0 1,156,700 34.5 1,471,023 37.7
Others(1) ........................................ 5,450 0.2 8,623 0.3 47,198 1.2
Total ........................................... 2,615,716 100.0 3,346,983 100.0 3,898,055 100.0
(1) Others primarily include our revenue from our sensor products and technology services. Technology services represented the service fees
charged for providing customized development products for customers.
The following table sets forth the sales volume of our major products during the Track Record
Period.
Year Ended December 31,
2023 2024 2025
(Units in millions)
Power management ICs ................................................ 3,060.6 3,934.6 5,022.8
Signal chain ICs ..................................................... 1,427.4 2,012.7 2,792.6
Revenue generated from sales of power management ICs amounted to RMB1,746.0 million,
RMB2,181.7 million and RMB2,379.8 million, in 2023, 2024 and 2025, respectively, accounting for
66.8%, 65.2% and 61.1% of our total revenue for the same years, respectively. In 2023, despite the
downturn in the analog IC market, the sales volume of our power management ICs still reached over
3,000 million units, primarily because our products have gained market recognition with a growing
customer base. Besides, in response to market dynamics, our product portfolio was adjusted
accordingly. The sales volume of our power management ICs increased to 3,934.6 million units in
2024, and further increased to 5,022.8 million units in 2025, which was mainly driven by the rapid
growth in the market demand for our power management ICs in recognition of the premium quality
and overall recovery of the analog IC industry.
Revenue generated from sales of signal chain ICs amounted to RMB864.2 million,
RMB1,156.7 million, and RMB1,471.0 million, in 2023, 2024 and 2025, respectively, accounting for
33.0%, 34.5%, and 37.7% of our total revenue for the same years, respectively. From 2024, consumer
electronics shipments began to recover, and the analog IC market accordingly resumed its growth
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trajectory. The sales volume of our signal chain ICs then increased significantly to 2,012.7 million
units in 2024, and further increased to 2,792.6 million units in 2025, which was mainly driven by the
rapid growth in the market demand for our signal chain ICs in recognition of the premium quality and
overall recovery of the analog IC industry.
Revenue by Geographic Location
During the Track Record Period, we generated revenue from multiple regions primarily
including Hong Kong, the Chinese Mainland and Taiwan. The following table sets forth a breakdown
of our revenue by geographic market for the years indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Hong Kong ...................................... 1,358,701 51.9 1,484,881 44.4 1,921,049 49.3
Chinese Mainland ................................. 1,042,216 39.8 1,497,608 44.7 1,635,122 41.9
Taiwan ......................................... 91,117 3.5 134,205 4.0 171,691 4.4
Others(1) ........................................ 123,682 4.8 230,289 6.9 170,193 4.4
Total ........................................... 2,615,716 100.0 3,346,983 100.0 3,898,055 100.0
Note:
(1) Others primarily include our revenue from Singapore, Germany, South Korea and Japan.
Revenue by Sales Channel
During the Track Record Period, we operated through two main sales channels: (i) distribution
sales, and (ii) direct sales. We strategically collaborated with distributors to expand our market reach
and effectively serve the needs of customers in various regions. In our direct sales model, we sell
products directly to end customers, providing products that meet their specific operational needs.
The following table sets forth a breakdown of our revenue by sales channel, in absolute
amounts and as a percentage of our revenue, for the years indicated:
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Distribution sales ................................. 2,388,799 91.3 2,999,044 89.6 3,609,911 92.6
Direct sales ...................................... 226,917 8.7 347,939 10.4 280,648 7.2
Others(1) ........................................ — — — — 7,496 0.2
Total ........................................... 2,615,716 100.0 3,346,983 100.0 3,898,055 100.0
(1) Others primarily include our technology services’ revenue.
Cost of Sales
Our cost of sales consists primarily of costs of wafers, costs of packaging and testing, other
costs, and impairment loss of inventories. For the years ended December 31, 2023, 2024 and 2025, our
cost of sales amounted to RMB1,440.2 million, RMB1,766.1 million, and RMB2,095.6 million,
respectively.
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The following table sets forth a breakdown of our cost of sales by nature, in absolute amounts
and as percentages of total cost of sales, for the years indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Costs of wafers ................................... 656,690 45.6 861,037 48.8 964,819 46.0
Costs of packaging and testing ....................... 589,127 40.9 687,553 38.9 837,955 40.0
Other costs of sales ................................ 72,404 5.0 75,878 4.3 109,560 5.3
Subtotal ........................................ 1,318,221 91.5 1,624,468 92.0 1,912,334 91.3
Impairment loss of inventories ....................... 108,634 7.5 128,851 7.3 169,828 8.1
Tax and others ................................... 13,301 1.0 12,820 0.7 13,431 0.6
Total ........................................... 1,440,156 100.0 1,766,139 100.0 2,095,593 100.0
We operate under a fabless model centered on our core competencies in R&D and sales. We
outsource our major manufacturing processes, including wafer fabrication, packaging, and testing, to
third-party suppliers. For the years ended December 31, 2023, 2024 and 2025, cost of wafers
accounted for 45.6%, 48.8%, and 46.0% of our cost of sales, respectively.
For the years ended December 31, 2023, 2024 and 2025, our cost of packaging and testing
accounted for 40.9%, 38.9%, and 40.0% of our cost of sales, respectively.
The table below sets forth a breakdown of impairment loss of inventories by types of our
products for the years indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Power management ICs ................................. 22,041 20.3 79,095 61.4 80,750 47.5
Signal chain ICs ...................................... 81,577 75.1 49,336 38.3 87,776 51.7
Others(1) ............................................. 5,016 4.6 420 0.3 1,302 0.8
Total ............................................... 108,634 100.0 128,851 100.0 169,828 100.0
(1) Others primarily include impairment loss of inventories relating to our sensor products.
Our impairment loss of inventories increased from RMB108.6 million in 2023 to
RMB128.9 million in 2024, primarily because we proactively increased and maintained steady
inventory levels to ensure timely delivery of our products to customers in 2024, and against the
backdrop of continuous inventory growth, the reduced sales volume in 2023 directly affected the aging
of inventory for each product. Our impairment loss of inventories further increased to
RMB169.8 million in 2025, also primarily because we proactively increased inventory levels to ensure
timely delivery of our products to customers in 2025, and the increase in the impairment loss of
inventories was in line with the growth of inventory levels, and there is a time lag before our sales
volumes further ramped up.
Gross Profit and Gross Margin
Our gross profit represents our revenue less our cost of sales, and our gross margin represents
our gross profit divided by our revenue, expressed as a percentage. Our gross profit was
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RMB1,175.6 million, RMB1,580.8 million, and RMB1,802.5 million for the years ended
December 31, 2023, 2024 and 2025, respectively. Our gross margin was 44.9%, 47.2% and 46.2% for
the same years, respectively.
The following table sets forth our gross profit and gross margin for the years indicated.
Year Ended December 31,
2023 2024 2025
Gross
profit
Gross
margin
(%)
Gross
profit
Gross
margin
(%)
Gross
profit
Gross
margin
(%)
(RMB in thousands, except for percentages)
Power management ICs ....................................... 804,899 46.1 1,043,112 47.8 1,103,655 46.4
Signal chain ICs ............................................. 490,188 56.7 675,015 58.4 855,738 58.2
Others(1) ................................................... 2,408 44.2 4,388 50.9 26,328 55.8
Subtotal ................................................... 1,297,495 49.6 1,722,515 51.5 1,985,721 50.9
Impairment loss of inventories .................................. 108,634 128,851 169,828
Tax and others .............................................. 13,301 12,820 13,431
Total ..................................................... 1,175,560 44.9 1,580,844 47.2 1,802,462 46.2
(1) Others primarily include our sensor products and technology services.
The table below sets forth a breakdown of our gross profit and gross profit margin by product
type, after taking into account the impairment loss of inventories and tax and others, for the years
indicated.
Year Ended December 31,
2023 2024 2025
Gross
profit
RMB
Gross
margin
%
Gross
profit
RMB
Gross
margin
%
Gross
profit
RMB
Gross
margin
%
(RMB in thousands, except for percentages)
Power management ICs .................. 774,607 44.4 956,254 43.8 1,015,440 42.7
Signal chain ICs ....................... 403,586 46.7 620,655 53.7 762,174 51.8
Others(1) .............................. (2,633) (48.3) 3,935 45.6 24,848 52.6
Total ................................ 1,175,560 44.9 1,580,844 47.2 1,802,462 46.2
(1) Others primarily include our sensor products and technology services.
During the Track Record Period, we maintained a high gross margin primarily driven by our
continuous introduction of new products and high-performance products and our cost-effectiveness.
Besides, we continuously invest in R&D and have established a broad product portfolio. Among them,
our signal chain ICs and high-end power management ICs, due to their higher technological barriers,
demonstrated more favorable gross margins in the corresponding business.
Our gross profits and gross margins largely depend on our product mix, the competition we
faced, the supply-demand balance in the analog IC market and general market conditions. Our gross
profit and gross margin improved from 2023 to 2024, primarily due to the overall recovery of analog
IC industry where there was a rebound in product demand. Our gross profit increased by 14.0% from
RMB1,580.8 million in 2024 to RMB1,802.5 million in 2025, primarily due to the growth in the sales
volume of our products in 2025. Our overall gross margin was 47.2% in 2024 and 46.2% in 2025,
remaining at a relatively stable level.
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Other Income and Gains
We recorded other income and gains of RMB121.0 million, RMB108.3 million and
RMB193.4 million for the years ended December 31, 2023, 2024 and 2025, respectively. Our other
income consists of (i) government grants, and (ii) bank interest income. Our other gains consist of
(i) foreign exchange income, net, (ii) gains on disposal of investments at fair value through profit or
loss, (iii) gains on disposal of items of property, plant and equipment and right-of-use assets, and
(iv) fair value gains derived from wealth management products and equity investments at fair value
through profit or loss.
The following table sets forth a breakdown of our other income and gains for the years
indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Other income
Government grants .................................... 50,541 41.8 37,844 34.9 101,072 52.3
Bank interest income ................................... 34,720 28.7 31,687 29.3 30,061 15.5
Subtotal ............................................. 85,261 70.5 69,531 64.2 131,133 67.8
Gains
Foreign exchange income, net ............................ 4 1 5 0 . 3 6,204 5.7 — —
Gains on disposal of investments at:
Wealth management products ............................ 18,230 15.1 18,286 16.9 6,521 3.4
Equity investments at fair value through profit or loss .........
{{ 311 0.3 12,095 6.2
Gains on disposal of items of property, plant and equipment and
right-of-use assets ................................... 6 2 0 . 1 3,283 3.0 1,009 0.5
Fair value gains on:
Wealth management products ............................ 1,602 1.3 7,407 6.8 16,030 8.3
Equity investments at fair value through profit or loss .........
{{ 3,147 2.9 26,479 13.7
Others .............................................. 15,393 12.7 140 0.2 111 0.1
Subtotal ............................................. 35,702 29.5 38,778 35.8 62,245 32.2
Total ............................................... 120,963 100.0 108,309 100.0 193,378 100.0
Selling and Marketing Expenses
Our selling and marketing expenses consist primarily of (i) employee compensation for our
selling and marketing personnel, (ii) promotion expenses in relation to marketing campaigns, brand-
building activities, and public relations, and (iii) equity-settled share-based payment expenses
associated with equity incentive granted to sales and marketing personnel.
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The following table sets forth a breakdown of our selling and marketing expenses in absolute
amount and as a percentage of our total selling and marketing expenses for the years indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Employee compensation ................................ 140,485 70.7 181,071 77.3 188,213 72.8
Promotion expenses .................................... 17,583 8.9 20,506 8.8 20,273 7.8
Equity-settled share-based transactions .................... 24,866 12.5 13,644 5.8 30,712 11.9
Others(1) ............................................. 15,637 7.9 18,963 8.1 19,252 7.5
Total ............................................... 198,571 100.0 234,184 100.0 258,450 100.0
(1) Consists primarily of rental and utilities expenses, depreciation and amortization, and other miscellaneous items.
For the years ended December 31, 2023, 2024 and 2025, our selling and marketing expenses
were RMB198.6 million, RMB234.2 million, and RMB258.5 million, respectively, representing 7.6%,
7.0%, and 6.6% of our total revenue, respectively.
Administrative Expenses
Our administrative expenses consist primarily of (i) employee compensation for our
administrative and management personnel, (ii) depreciation and amortization, (iii) professional services
fees incurred in relation to legal, audit, consulting services, (iv) equity-settled share-based transactions
expenses in relation to equity incentives granted to management and administrative staff, (v) travel
expenses primarily for management and support personnel business trips, and (vi) rental and utilities
expenses mainly for office spaces.
The following table sets forth a breakdown of our administrative expenses in absolute amount
and as a percentage of our total administrative expenses for the years indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Employee compensation ................................. 49,055 53.7 63,392 59.8 68,410 54.4
Depreciation and amortization ............................ 5,673 6.2 7,845 7.4 12,978 10.3
Professional service fees ................................. 9,339 10.2 7,487 7.1 8,692 6.9
Equity-settled share-based transactions ..................... 10,887 11.9 6,165 5.8 11,580 9.2
Travel expenses ........................................ 2,143 2.3 2,495 2.4 2,669 2.1
Rental and utilities expenses .............................. 2,200 2.4 1,265 1.2 2,773 2.2
Others(1) .............................................. 12,112 13.3 17,437 16.3 18,772 14.9
Total ................................................ 91,409 100.0 106,086 100.0 125,874 100.0
(1) Consists primarily of office expenses, business entertainment expenses and other miscellaneous items.
For the years ended December 31, 2023, 2024 and 2025, our administrative expenses were
RMB91.4 million, RMB106.1 million and RMB125.9 million, respectively, representing 3.5%, 3.2%
and 3.2% of our total revenue, respectively.
Research and Development Expenses
Our research and development expenses consist primarily of (i) employee compensation for our
research and development personnel, (ii) materials, expenses, including raw materials and consumables
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used in product designs during research and development process, (iii) depreciation and amortization,
mainly in relation to R&D equipment and facilities, and (iv) equity-settled share-based transaction
expenses in relation to equity incentives granted to our R&D personnel.
The following table sets forth a breakdown of our research and development expenses in
absolute amount and as a percentage of our total research and development expenses for the years
indicated.
Year Ended December 31,
2023 2024 2025
Amount % Amount % Amount %
(RMB in thousands, except for percentages)
Employee compensation .............................. 457,336 62.0 599,839 68.9 676,125 64.7
Materials expenses ................................... 77,342 10.5 85,454 9.8 124,697 11.9
Depreciation and amortization .......................... 66,351 9.0 74,837 8.6 88,812 8.5
Equity-settled share-based transactions ................... 81,560 11.1 64,616 7.4 115,537 11.1
Others(1) ........................................... 54,485 7.4 46,001 5.3 40,024 3.8
Total .............................................. 737,074 100.0 870,747 100.0 1,045,195 100.0
(1) Consists primarily of rental and utilities expenses and other miscellaneous items.
For the years ended December 31, 2023, 2024 and 2025, our research and development
expenses were RMB737.1 million, RMB870.7 million and RMB1,045.2 million, respectively,
representing 28.2%, 26.0% and 26.8% of our total revenue, respectively.
Impairment Losses on Financial and Contract Assets, Net
Our impairment losses on financial and contract assets, net consist primarily of impairment
losses for movement in loss allowance for trade and bills receivables at amortized cost, and movement
in loss allowance for other receivables and contract assets. We recorded impairment losses on financial
and contract assets, net of RMB1.7 million, RMB1.1 million, and RMB2.5 million for the years ended
December 31, 2023, 2024 and 2025, respectively.
Other Expenses
Our other expenses consist primarily of (i) foreign exchange losses, and (ii) fair value losses on
equity investment and wealth management products. We recorded other expenses of RMB3.7 million,
RMB2.6 million and RMB9.5 million for the years ended December 31, 2023, 2024 and 2025,
respectively.
Finance Costs
Our finance costs consist primarily of amortization of interest expense on redemption financial
liabilities, interest expenses on lease liabilities and borrowings. We recorded finance costs of
RMB2.3 million, RMB2.2 million and RMB12.0 million for the years ended December 31, 2023, 2024
and 2025, respectively.
Share of (Losses)/Profits of Associates
We recorded share of (losses)/profits of associates of RMB(7.7) million, RMB12.6 million and
RMB7.5 million for the years ended December 31, 2023, 2024 and 2025, respectively.
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Income Tax Credit/(Expense)
Our income tax credit/(expense) primarily consists of (i) current income tax charged for the
year, (ii) deferred income tax. We recorded income tax credit of RMB15.8 million and
RMB6.4 million, respectively, in 2023 and 2024. We recorded income tax expense of
RMB15.5 million in 2025. We recorded tax credits in 2023 and 2024 primarily due to significant
R&D deductions, notwithstanding our profitable status. In 2025, despite a further expansion in our
profit scale, the deductible R&D expenses declined compared to the preceding years, resulting in the
recognition of income tax expenses.
In 2023, 2024 and 2025, our effective tax rates, calculated as our income tax expense/(credit)
divided by our profit before tax, were (6.2)%, (1.3)%, and 2.8%, respectively, which were lower than
the 25% statutory rate primarily because we and certain subsidiaries enjoyed preferential tax
treatments.
Chinese Mainland
Our income tax provision in respect of our operations in the Chinese Mainland was calculated
at a tax rate of 25% during the Track Record Period, based on the existing legislation, interpretation
and practices in respect thereof.
Certain of our subsidiaries in the Chinese Mainland were approved as High-tech enterprises,
and they were subject to a preferential corporate income tax rate of 15% during the Track Record
Period. See Note 11 to the Accountants’ Report included in Appendix I to this prospectus for more
details.
Hong Kong
The first HKD2,000,000 of assessable profits of Hong Kong subsidiaries are taxed at 8.25%
and the remaining assessable profits are taxed at 16.5% on the estimated assessable profits.
SG MICRO (HK) LIMITED was entitled to enjoy offshore tax exemption from the Hong Kong Inland
Revenue Department due to its offshore transaction nature for the Relevant Periods.
See Note 11 to the Accountants’ Report included in Appendix I to this prospectus.
During the Track Record Period and up to the Latest Practicable Date, we had made all the
required tax filings with the relevant tax authorities in jurisdictions we operate in, and we had no
disputes or unresolved tax issues with the relevant tax authorities.
DISCUSSION OF RESULTS OF OPERATIONS
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Revenue
We generated substantially all of our revenue from sales of products. Our revenue increased by
16.5% from RMB3,347.0 million in 2024 to RMB3,898.1 million in 2025, primarily attributable to an
increase in our revenue generated from sales of signal chain ICs and power management ICs, mainly
due to the increased sales volume in line with the increasing demand from end customers. Specifically,
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the analog IC market has begun to recover since 2024, and driven by the continued adoption of AI
applications, the demand for analog ICs expanded, according to Frost & Sullivan.
 Power Management ICs . Our revenue generated from sales of power management ICs
increased by 9.1% from RMB2,181.7 million in 2024 to RMB2,379.8 million in 2025,
primarily due to an increase in our sales volume of power management ICs from
3,934.6 million units in 2024 to 5,022.8 million units in 2025, which was due to an
increasing demand from end customers.
 Signal Chain ICs. Our revenue generated from sales of signal chain ICs increased by
27.2% from RMB1,156.7 million in 2024 to RMB1,471.0 million in 2025, primarily due
to an increase in our sales volume of signal chain ICs from 2,012.7 million units in 2024 to
2,792.6 million units in 2025, mainly due to (i) growing demand from end customers, in
particular, the strong demand from the industrial applications sector; and (ii) the
continuous expansion of our customer base and product portfolio through continuous
market expansion and the launch of new products.
Cost of Sales
Our cost of sales increased by 18.7% from RMB1,766.1 million in 2024 to
RMB2,095.6 million in 2025, which was generally in line with our sales expansion and business
growth.
Gross Profit and Gross Margin
As a result of the foregoing, our gross profit increased by 14.0% from RMB1,580.8 million in
2024 to RMB1,802.5 million in 2025, primarily due to the growth in the sales volume of our products
in 2025 as the result of the recovery of the market. Our overall gross margin was 47.2% in 2024 and
46.2% in 2025, remaining at a relatively stable level.
Other Income and Gains
Our other income and gains increased by 78.5% from RMB108.3 million in 2024 to
RMB193.4 million in 2025, primarily attributable to (i) an increase in government grants from
RMB37.8 million in 2024 to RMB101.1 million in 2025, and (ii) an increase in fair value gains on
equity investments at fair value through profit or loss of RMB23.3 million.
Selling and Marketing Expenses
Our selling and marketing expenses increased by 10.4% from RMB234.2 million in 2024 to
RMB258.5 million in 2025, primarily due to an increase in employee compensation, driven by the
expansion of our sales team.
Administrative Expenses
Our administrative expenses increased by 18.7% from RMB106.1 million in 2024 to
RMB125.9 million in 2025, primarily due to an increase in employee compensation for our
administrative and management personnel due to the growing headcount and salaries.
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Research and Development Expenses
Our research and development expenses increased by 20.0% from RMB870.7 million in 2024
to RMB1,045.2 million in 2025, primarily due to (i) an increase in employee compensation as a result
of the increased compensation standards for our R&D team and the expansion of our R&D team, (ii) an
increase in R&D materials expenses in line with our business growth, and (iii) an increase in
depreciation and amortization expenses mainly due to the increases in electronic design automation
tools and increases in depreciation of right-of-use assets and R&D-related equipment.
Impairment Losses on Financial and Contract Assets, Net
Our impairment losses on financial and contract assets, net increased from RMB1.1 million in
2024 to RMB2.5 million in 2025, primarily due to the credit loss provided for contract assets and trade
and bills receivables.
Other Expenses
Other expenses increased by 265.4% from RMB2.6 million in 2024 to RMB9.5 million in
2025, primarily due to changes in exchange losses.
Finance Costs
Our finance costs increased by 445.5% from RMB2.2 million in 2024 to RMB12.0 million in
2025, primarily due to an increase in our amortization of interest expense on redemption financial
liabilities in 2025.
Share of Profits of Associates
We recorded share of profits of associates of RMB12.6 million, and RMB7.5 million in 2024
and 2025, respectively. The changes in share of profits of associates were due to the changes in the
operational and financial performance of our investees.
Income Tax Credit/(Expense)
We recorded income tax credit of RMB6.4 million in 2024 and income tax expense of
RMB15.5 million in 2025. Our effective tax rate slightly increased from (1.3)% in 2024 to 2.8% in
2025, primarily due to growth in our revenue and profit in 2025.
Profit for the Year
As a result of the foregoing, our profit for the year increased by 8.8% from RMB491.2 million
in 2024 to RMB534.4 million in 2025.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Revenue
Our revenue increased by 28.0% from RMB2,615.7 million in 2023 to RMB3,347.0 million in
2024, primarily attributable to an increase in our revenue generated from sales of our products, mainly due
to the increased sales volume in line with our growing business scale. Besides, according to Frost &
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Sullivan, consumer electronics shipments began to recover in 2024, partially supported by AI-related
infrastructure upgrades, and the analog IC market accordingly resumed its growth trajectory in 2024.
 Power Management ICs . Our revenue generated from sales of power management ICs
increased by 25.0% from RMB1,746.0 million in 2023 to RMB2,181.7 million in 2024,
primarily due to an increase in our sales volume of power management ICs from
3,060.6 million units in 2023 to 3,934.6 million units in 2024, which was due to growing
demand from end customers in the consumer electronics sector, driven by the recovery of
the analog IC market in 2024.
 Signal Chain ICs. Our revenue generated from sales of signal chain ICs increased by
33.8% from RMB864.2 million in 2023 to RMB1,156.7 million in 2024, primarily due to
an increase in our sales volume of signal chain ICs from 1,427.4 million units in 2023 to
2,012.7 million units in 2024, mainly due to (i) the gradual recovery of the analog IC
market; (ii) growing demand from end customers, with recovery in application areas such
as industrial & energy, networking & computing, and consumer electronics sectors; and
(iii) our continuous efforts to expand our customer base and product offerings.
Cost of Sales
Our cost of sales increased by 22.6% from RMB1,440.2 million in 2023 to RMB1,766.1 million
in 2024, which was generally in line with our sales expansion and business growth.
Gross Profit and Gross Margin
As a result of the foregoing, our gross profit increased by 34.5% from RMB1,175.6 million in
2023 to RMB1,580.8 million in 2024, and our overall gross margin was 44.9% in 2023 and 47.2% in
2024, mainly due to the market recovery in 2024 and the change of our product mix.
Other Income and Gains
Our other income and gains decreased by 10.5% from RMB121.0 million in 2023 to
RMB108.3 million in 2024, primarily attributable to the decrease in government grants from
RMB50.5 million in 2023 to RMB37.8 million in 2024.
Selling and Marketing Expenses
Our selling and marketing expenses increased by 17.9% from RMB198.6 million in 2023 to
RMB234.2 million in 2024, primarily due to an increase in employee compensation, driven by the
expansion of our sales team.
Administrative Expenses
Our administrative expenses increased by 16.1% from RMB91.4 million in 2023 to
RMB106.1 million in 2024, primarily due to an increase in employee compensation for our
administrative and management personnel due to the growing headcount.
Research and Development Expenses
Our research and development expenses increased by 18.1% from RMB737.1 million in 2023
to RMB870.7 million in 2024, primarily due to (i) an increase in employee compensation primarily
attributable to the rising R&D staff headcounts, and (ii) an increase in R&D materials expenses in line
with our R&D development and business growth.
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Impairment Losses on Financial and Contract Assets, Net
We recorded impairment losses on financial and contract assets, net of RMB1.7 million in
2023, compared to RMB1.1 million in 2024, respectively.
Other Expenses
Other expenses decreased by 29.5% from RMB3.7 million in 2023 to RMB2.6 million in 2024,
primarily due to changes in fair value gains and losses.
Finance Costs
Our finance costs were RMB2.3 million in 2023 and RMB2.2 million in 2024, remaining at a
relatively stable level.
Share of (Losses)/Profits of Associates
We recorded share of losses of associates of RMB7.7 million in 2023. In 2024, we recorded
share of profits of associates of RMB12.6 million. The changes in share of (losses)/profits of associates
were due to the changes in the operational and financial performance of our investees.
Income Tax Credit
Our income tax credit decreased by 59.6% from RMB15.8 million in 2023 to RMB6.4 million
in 2024, and our effective tax rate increased from (6.2)% in 2023 to (1.3)% in 2024, primarily
attributable to the market recovery and substantial growth in our revenue and profit in 2024, and the
growth in our profit outpaced the growth in our research and development expenses in 2024.
Profit for the Year
As a result of the foregoing, our profit for the year increased by 82.0% from RMB269.9 million
in 2023 to RMB491.2 million in 2024.
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DISCUSSION OF CERTAIN KEY ITEMS ON CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
The following table sets forth our consolidated balance sheets as of the dates indicated.
As of December 31,
2023 2024 2025
(RMB in thousands)
Non-current assets
Property, plant and equipment .................................... 545,191 691,094 711,825
Other intangible assets .......................................... 33,743 52,837 85,978
Right-of-use assets ............................................. 61,747 52,060 38,837
Goodwill ..................................................... 80,875 78,692 301,277
Deferred tax assets ............................................. 161,791 175,896 151,264
Investments in associates ........................................ 423,360 508,329 555,364
Time deposits ................................................. 10,182 379,427 371,754
Financial assets at fair value through profit or loss ..................... 109,163 121,849 115,991
Other non-current assets ......................................... 32,336 20,321 23,371
Total non-current assets ........................................ 1,458,388 2,080,505 2,355,661
Current assets
Inventories .................................................... 901,367 1,164,817 1,448,216
Trade and bills receivables at amortised cost ......................... 166,472 232,764 362,830
Trade and bills receivables at fair value through other comprehensive
income ..................................................... — — 2 6 0
Contract assets ................................................. — — 2,084
Prepayments, other receivables and other assets ....................... 86,236 100,084 137,634
Financial assets at fair value through profit or loss ..................... 769,093 1,378,000 1,340,087
Cash and cash equivalents ........................................ 1,303,007 813,194 1,181,028
Time deposits ................................................. — — 81,810
Restricted cash ................................................. 22,289 1,755 44,540
Total current assets ............................................ 3,248,464 3,690,614 4,598,489
Current liabilities
Trade payables ................................................. 264,141 316,000 400,910
Other payables and accruals ...................................... 321,780 478,419 470,629
Interest-bearing bank borrowings .................................. — 36,579 329,729
Lease liabilities ................................................ 17,884 19,565 12,752
Contract liabilities .............................................. 14,894 18,307 18,389
Total current liabilities ......................................... 618,699 868,870 1,232,409
Net current assets ............................................. 2,629,765 2,821,744 3,366,080
Total assets less current liabilities ................................ 4,088,153 4,902,249 5,721,741
Non-current liabilities
Interest-bearing bank borrowings .................................. — 34,121 67,172
Lease liabilities ................................................ 26,992 14,370 7,767
Deferred tax liabilities ........................................... 50,240 56,726 54,799
Other payables and accruals ...................................... 45,581 72,071 8,703
Deferred income ............................................... 71,516 75,701 68,195
Other non-current liabilities ...................................... 50,000 50,000 187,999
Total non-current liabilities ..................................... 244,329 302,989 394,635
Net assets .................................................... 3,843,824 4,599,260 5,327,106
Equity
Share capital .................................................. 469,487 473,450 620,063
Reserves ..................................................... 3,381,060 4,135,777 4,674,322
Equity attributable to owners of the parent ........................... 3,850,547 4,609,227 5,294,385
Non-controlling interests ......................................... (6,723) (9,967) 32,721
Total equity .................................................. 3,843,824 4,599,260 5,327,106
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We recorded net assets of RMB3,843.8 million, RMB4,599.3 million and RMB5,327.1 million
as of December 31, 2023, 2024 and 2025, respectively. We also recorded net current assets of
RMB2,629.8 million, RMB2,821.7 million and RMB3,366.1 million as of December 31, 2023, 2024
and 2025, respectively, which were primarily due to the growth of our business scale.
Assets
Property, Plant and Equipment
Our property, plant and equipment primarily consist of buildings, special tooling, electronic
equipment and others, construction in progress and leasehold improvements.
The following table sets forth a breakdown of our property, plant and equipment as of the dates
indicated.
As of December 31,
2023 2024 2025
(RMB in thousands)
Buildings ......................................................... 154,071 327,150 317,909
Electronic equipment and others ....................................... 185,546 213,776 216,819
Special tooling ..................................................... 109,225 135,152 168,118
Office furniture ..................................................... 5,878 5,495 4,564
Construction in progress .............................................. 76,119 — —
Leasehold improvements ............................................. 14,291 9,491 4,409
Motor vehicles ..................................................... 6 1 3 0 6
Total ............................................................. 545,191 691,094 711,825
Our property, plant and equipment increased from RMB545.2 million as of December 31, 2023
to RMB691.1 million as of December 31, 2024, primarily due to (i) additions of buildings of
RMB173.1 million in relation to the expansion of our R&D center and office buildings, and
(ii) additions of electronic equipment and others and special tooling of RMB28.2 million and
RMB25.9 million, respectively.
Our property, plant and equipment increased from RMB691.1 million as of December 31, 2024
to RMB711.8 million as of December 31, 2025, primarily due to additions of special tooling of
RMB33.0 million, and partially offset by the decrease in buildings of RMB9.2 million.
Right-of-Use Assets
The right-of-use assets primarily represent our buildings, land use rights, and parking space use
rights. Our right-of-use assets decreased from RMB61.7 million as of December 31, 2023 to
RMB52.1 million as of December 31, 2024, and further to RMB38.8 million as of December 31, 2025,
mainly attributable to the depreciation of right-of-use assets.
Goodwill
Our goodwill slightly decreased from RMB80.9 million as of December 31, 2023 to
RMB78.7 million as of December 31, 2024, mainly due to the recognition of an impairment loss on the
RMB2.2 million goodwill. Our goodwill significantly increased from RMB78.7 million as of
December 31, 2024 to RMB301.3 million as of December 31, 2025, primarily due to our acquisitions
in 2025.
We determine whether goodwill is impaired at least on an annual basis. This requires an
estimation of the value in use of the cash-generating units to which the goodwill is allocated. See
Note 18 to the Accountants’ Report included in Appendix I to this prospectus for more details.
Goodwill acquired through business combinations is allocated to the group of Cash-Generating Units
(“CGU”o r“ CGUs”) for impairment testing.
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The carrying amount of goodwill allocated to each of the cash-generating units is as follows:
As of December 31
2023 2024 2025
RMB’000 RMB’000 RMB’000
Suzhou Qingxinfang ................................................. 49,851 49,851 49,851
Shanghai Fangtai .................................................... 16,555 16,555 16,555
Dalian Alpha ....................................................... 7,929 7,929 7,929
Hangzhou Shenan ................................................... 4,357 4,357 4,357
Shanghai Pingsheng ................................................. 2,183 {{
Changzhou Ganrui ................................................... {{ 151,360
TeraDevices Inc ..................................................... {{ 71,225
Total .............................................................. 80,875 78,692 301,277
Impairment reviews on the goodwill of our Group have been conducted by the management as
of December 31, 2023, 2024 and 2025, according to IAS 36 “Impairment of assets”. For the purposes
of impairment review, the recoverable amounts of CGU or group of CGUs are determined based on
value in use (“VIU”) calculations by using the discounted cash flow method covering a 5-year period.
Our management has assessed that Suzhou Qingxinfang, Changzhou Ganrui and TeraDevices
Inc. were material CGUs. Assumptions were used in the value in use calculation. The following
describes each key assumption on which management has based its cash flow projections to undertake
impairment testing of goodwill.
Revenue growth rate—The basis used to determine the budgeted revenue is based on our
management’s expectation and also expectations of the future market.
Gross profit margin—Estimated based on our historical experience and forecast of the
semiconductor markets.
Pre-tax discount rate—Estimated by using the weighted average cost of capital (“ WACC”)
method. The WACC was calculated by referring to public market data including risk-free rate, market
return, beta of comparable public companies etc. and the specific risk of the business.
(a) Suzhou Qingxinfang
The pre-tax discount rates used for VIU calculation for the impairment test as of December 31,
2023, 2024 and 2025 are 16.83%, 16.23%, and 14.31%, respectively.
The gross profit margin used for VIU calculation for the impairment test as of December 31,
2023, 2024 and 2025 are 47.07%, 35.68%, and 41.07%, respectively.
The revenue growth rate used for VIU calculation for the impairment test as of December 31,
2023, 2024 and 2025 are 268.38%, 331.83%, and 224.46%, respectively.
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For the sensitivity analysis conducted during the impairment review for material CGUs, Suzhou
Qingxinfang, had there been reasonably possible changes with an increase in pre-tax discount rate by
1%, a decrease in gross profit margin by 2% or a decrease in revenue growth rate by 5%, if one of the
key assumptions was to change while other variables held constant, the recoverable amount would
decrease by:
As of December 31
2023 2024 2025
RMB’000 RMB’000 RMB’000
Pre-tax discount rate increases by 1% .................................... 8,186 9,330 12,600
Gross profit margin decreases by 2% .................................... 8,297 12,365 15,100
Revenue growth rate decrease by 5% .................................... 9,142 8,248 21,800
Based on management’s assessment on the recoverable amounts, the headroom of material
CGUs is as follows:
As of December 31
2023 2024 2025
RMB’000 RMB’000 RMB’000
Suzhou Qingxinfang ................................................. 51,171 61,377 41,089
As disclosed above, the management has considered and assessed reasonably possible
changes for the key assumptions and has not identified any instances that would cause the carrying
amounts of the CGUs to exceed their recoverable amounts as of December 31, 2023, 2024 and 2025,
respectively.
(b) Changzhou Ganrui
The pre-tax discount rate used for VIU calculation for the impairment test as of December 31,
2025 is 12.51%.
The gross profit margin used for VIU calculation for the impairment test as of December 31,
2025 is 48.65%.
The revenue growth rate used for VIU calculation for the impairment test as of December 31,
2025 is 50.80%.
For the sensitivity analysis conducted during the impairment review for material CGUs,
Changzhou Ganrui, had there been reasonably possible changes with an increase in pre-tax discount
rate by 1%, a decrease in gross profit margin by 2% or a decrease in revenue growth rate by 2%, if one
of the key assumptions was to change while other variables held constant, the recoverable amount
would decrease by:
December 31 2025
RMB’000
Pre-tax discount rate increases by 1% .............................................. 37,000
Gross profit margin decreases by 2% ............................................... 36,900
Revenue growth rate decreases by 2% .............................................. 29,000
Based on management’s assessment on the recoverable amounts, the headroom of material
CGUs as follows:
December 31 2025
RMB’000
Changzhou Ganrui ............................................................. 64,825
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As disclosed above, the management has considered and assessed reasonably possible changes
for the key assumptions and has not identified any instances that would cause the carrying amounts of
the CGUs to exceed their recoverable amounts as of December 31, 2025.
(c) TeraDevices Inc
The pre-tax discount rate used for VIU calculation for the impairment test as of December 31,
2025 is 16.91%.
The gross profit margin used for VIU calculation for the impairment test as of December 31,
2025 is 55.48%.
The revenue growth rate used for VIU calculation for the impairment test as of December 31,
2025 is 11.96%.
For the sensitivity analysis conducted during the impairment review for material CGUs,
TeraDevices Inc, had there been reasonably possible changes with an increase in pre-tax discount rate
by 0.5%, a decrease in gross profit margin by 0.5% or a decrease in revenue growth rate by 1%, if one
of the key assumptions was to change while other variables held constant, the recoverable amount
would decrease by:
December 31, 2025
RMB’000
Pre-tax discount rate increases by 0.5% ............................................ 3,620
Gross profit margin decreases by 0.5% ............................................. 2,420
Revenue growth rate decreases by 1% ............................................. 4,030
Based on management’s assessment on the recoverable amounts, the headroom of material
CGUs is as follows:
December 31, 2025
RMB’000
TeraDevices Inc. .............................................................. 4,377
As disclosed above, the management has considered and assessed reasonably possible changes
for the key assumptions and has not identified any instances that would cause the carrying amounts of
the CGUs to exceed their recoverable amounts as of December 31, 2025.
Deferred Tax Assets
Our deferred tax assets primarily consist of share-based payments, losses available for
offsetting against future taxable profits, accruals and provisions and impairment of assets. Our deferred
tax assets increased from RMB161.8 million as of December 31, 2023 to RMB175.9 million as of
December 31, 2024, primarily due to the significant R&D investment in 2024, and the amount of
additional deduction for R&D expenses deductible before tax was substantial, resulting in an increase
in deductible tax losses. Our deferred tax assets decreased to RMB151.3 million as of December 31,
2025, primarily due to the increase in our profit in 2025 and a decrease in tax losses available for
offsetting against future taxable profits.
Investments in Associates
Our investments in associates as of December 31, 2023, 2024 and 2025 mainly relate to our
investment in our associate companies. As of December 31, 2023 and 2024, our investments in
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associates increased from RMB423.4 million to RMB508.3 million, mainly attributable to our
increased investment in our associates. Our investments in associates further increased to
RMB555.4 million as of December 31, 2025, mainly attributable to the operational and financial
performance of our investees.
Financial Assets at Fair Value through Profit or Loss
We had financial assets at fair value through profit or loss of RMB878.3 million,
RMB1,499.8 million and RMB1,456.1 million, as of December 31, 2023, 2024 and 2025, respectively.
As of December 31,
2023 2024 2025
(RMB in thousands)
Non-current:
Listed equity investments, at fair value ............................... 31,916 35,257 11,424
Other unlisted investments, at fair value .............................. 77,247 86,592 104,567
Current:
Wealth management products ...................................... 769,093 1,378,000 1,340,087
Total .......................................................... 878,256 1,499,849 1,456,078
Our financial assets at fair value through profit or loss consisted of our investments in
redeemable short-term wealth management products. The wealth management products were issued by
banks in the Chinese Mainland and were classified as our financial assets at fair value through profit or
loss as their contractual cash flows are not solely payments of principal and interest. The changes in
our financial assets at fair value through profit or loss during the Track Record Period were primarily
due to our redemption of certain wealth management products according to our cash management
strategies aimed at optimizing liquidity and returns.
We follow a prudent investment approach for wealth management products, focusing on capital
preservation and stable returns. We strictly control risks in accordance with relevant regulations,
conduct strict evaluations of wealth management products, and we purchase low-risk wealth
management products with high safety and liquidity. These products mainly include bank wealth
management products issued by commercial banks. The investment in these assets will be subject to
compliance with Chapter 14 of the Listing Rules after the Listing.
Specifically, we exclusively invest in low-risk (PR1 or PR2), high-liquidity wealth
management products with tenors not exceeding 12 months, issued by reputable financial institutions.
Each investment is preceded by stringent due diligence, including analysis of underlying assets, to
align with our funding needs and risk appetite.
Governance of the short-term investment activities is centrally managed. The annual investment
quota of wealth management products is approved by the Board meeting and Shareholders’ general
meeting, with funds usable on a revolving basis within the approved period. The chairman of the Board
is authorized to make investment decisions within this quota. Our finance department is responsible for
the management of our wealth management products’ subscriptions and provides continuous
monitoring and proactive risk mitigation. Our finance department is equipped with professionals who
possess the necessary expertise to assess investment risks and potential returns. Furthermore, the
internal audit department conducts regular independent audits to ensure the integrity of the process.
Our financial assets measured at fair value through profit or loss as of December 31, 2023,
2024 and 2025, also included our equity investment in certain unlisted and listed companies. We make
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investment decisions on a case-by-case basis based on the consideration of a number of factors,
including the investee’s operating history, the growth potential of the investee as well as the investee’s
potential to generate synergies with our existing operations. We closely monitor the operational and
financial performance of our investee companies.
Inventories
Our inventories mainly consist of (i) raw materials, including untested foundry-manufactured
wafers, (ii) work in progress, and (iii) finished goods. The following table sets forth our inventories as
of the dates indicated.
As of December 31,
2023 2024 2025
(RMB in thousands)
Raw materials .................................................. 597,642 745,999 836,639
Finished goods ................................................. 372,175 521,099 686,946
Work in progress ................................................ 150,555 164,305 234,568
Contract costs .................................................. — — 4 9 3
Less: Provision for impairment ..................................... (219,005) (266,586) (310,430)
Total ......................................................... 901,367 1,164,817 1,448,216
Our inventories increased from RMB901.4 million as of December 31, 2023 to
RMB1,164.8 million as of December 31, 2024, and further to RMB1,448.2 million as of December 31,
2025, primarily due to the inventories held in stock to meet the increasing demands.
As of December 31, 2023, 2024 and 2025, our provision for inventories was
RMB219.0 million, RMB266.6 million and RMB310.4 million, respectively. Our Directors consider
that sufficient provision for inventories had been made. During the Track Record Period, we had not
encountered any material impairment loss that has materially and adversely affected our business
operations. We believe maintaining appropriate levels of inventories dynamically helps us fully
address our customers’ demand and achieve customer satisfaction without adversely affecting our
liquidity. We have in place a set of policies and procedures to manage our inventories. See
“Business—Logistics and Inventory Management—Inventory Management” for more details.
The following table sets forth our inventory turnover days for the years indicated.
For the
Year Ended
December 31,
2023 2024 2025
Inventory turnover days (1) ...................................................... 2 0 3 2 1 4 2 2 8
Note:
(1) The inventory turnover days are calculated by dividing the arithmetic mean of the opening and ending balance of our inventory balances
of a period divided by cost of sales for the corresponding period and then multiplying by the number of days in that period (i.e., 365 days
for a given year).
Our inventory turnover days were primarily affected by production cycles and other related
factors that we take into consideration in ensuring timely supply. Generally, the entire production cycle
for our ICs takes approximately 75 days to 105 days. According to Frost & Sullivan, our length of
production cycle is in line with market practice. The inventory turnover days increased slightly from
203 days in 2023 to 214 days in 2024, and further increased to 228 days in 2025, primarily due to an
increase in inventory in anticipation of an increase in customers’ demand.
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To effectively manage our inventory levels, we employ strict control policies and an inventory
management system that allows for timely monitoring so that we can adjust our inventory level based
on existing orders and projected sales. This framework is underpinned by our integrated SAP and
WMS platforms, which provide robust capabilities for inventory oversight. In addition, our
management, procurement, sales, and financial departments collaborate closely to enhance our
inventory management system. We disseminate the latest inventory updates to the sales and marketing
team regularly, ensuring alignment with market demands to mitigate inventory obsolescence, prevent
production surpluses, and optimize inventory turnover days. Additionally, we closely monitor the level
of finished goods inventory. Specifically, our warehouse specialists regularly perform periodic stock
counts and evaluations. Our production planning specialists refer to inventory levels when formulating
procurement plans. The production planning manager performs inventory analysis based on inventory
conditions and formulates new production plans. We conduct regular follow-ups with sales personnel
to evaluate the sales performance of aged inventory items and also hold regular interdepartmental
discussions to review sales orders alongside procurement activities, promoting a coordinated approach
to inventory management.
The following table sets forth an aging analysis of our inventories as of the date indicated. The
inventories aging within one year were RMB756.9 million, RMB984.2 million and
RMB1,304.0 million as of December 31, 2023, 2024 and 2025, respectively, representing 84.0%,
84.5% and 90.0% of the total inventories, respectively.
As of December 31,
2023 2024 2025
(RMB in thousands)
Within one year ................................................. 756,855 984,212 1,303,997
Over one year ................................................... 144,512 180,605 144,219
Total .......................................................... 901,367 1,164,817 1,448,216
As of April 30, 2026, RMB796.2 million, or 55.0% of our inventories outstanding as of
December 31, 2025, had been sold or utilized. We do not foresee any material impairment issues with
the balance of our inventories, considering that (i) we have established a systematic inventory risk
management and internal control system, leveraging the WMS system to achieve full-lifecycle
inventory control. We continuously refine our inventory management processes to prevent and mitigate
various operational risks associated with inventory; (ii) during the Track Record Period, the long-aged
inventories were at a relatively low level; and (iii) we monitor our inventories carefully, and we
comprehensively consider factors such as aging, estimated selling prices, historical sales volume, and
stock quantities. We believe we have made adequate provisions for inventory impairment.
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Trade and Bills Receivables
Our trade and bills receivables mainly consist of outstanding amounts from customers for the
sale of our products. The following table sets forth the details of our trade and bills receivables as of
the dates indicated.
As of December 31,
2023 2024 2025
(RMB in thousands)
Trade receivables ................................................... 169,576 237,093 372,289
Bills receivables .................................................... — — 1,118
Less: Impairment ................................................... (3,104) (4,329) (10,577)
Total ............................................................. 166,472 232,764 362,830
Our trade and bills receivables increased from RMB166.5 million as of December 31, 2023 to
RMB232.8 million as of December 31, 2024, and further to RMB362.8 million as of December 31,
2025, as a result of our business expansion and sales growth.
As of December 31, 2023, 2024 and 2025, we made provisions for the impairment of our trade
and bills receivables of RMB3.1 million, RMB4.3 million and RMB10.6 million, respectively. During
the Track Record Period, we did not experience any significant losses associated with our trade and
bills receivables and the increase in our trade and bills receivables did not have any material adverse
impact on our liquidity or cash flows.
The following table sets forth our trade and bills receivables turnover days for the years
indicated.
For the Year Ended
December 31,
2023 2024 2025
Trade and bills receivables turnover days (1) ........................................ 2 0 2 2 2 9
(1) The trade and bills receivables turnover days are calculated by dividing the arithmetic mean of the opening and ending balance of our
trade and bills receivables in that period by revenue for the corresponding period and then multiplying by the number of days in that
period (i.e., 365 days for a given year).
Our trade and bills receivables turnover days remained relatively stable at 20 days in 2023,
22 days in 2024 and 29 days in 2025.
The following table sets forth an aging analysis of our trade and bills receivables as of the dates
indicated.
As of December 31,
2023 2024 2025
(RMB in thousands)
Not due and within one year .......................................... 166,472 232,764 359,716
Over one year ...................................................... — — 1,996
Total ............................................................. 166,472 232,764 361,712
As of April 30, 2026, approximately RMB347.1 million, or 93.0% of our trade and bills
receivables outstanding as of December 31, 2025, had been subsequently settled.
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Prepayments, Other Receivables, and Other Assets
Our prepayments, other receivables and other assets primarily consist of prepayments for the
purchase of raw materials and products, value-added tax recoverable, prepaid income tax, deposits and
dividend receivables. The following table sets forth the details of our prepayments and other
receivables as of the dates indicated.
As of December 31,
2023 2024 2025
(RMB in thousands)
Prepaid income tax ................................................... 8,406 18,013 29,885
Rights of return assets ................................................ 22,883 34,536 17,018
Deductible input value-added tax (“ VAT” ) ................................ 39,839 24,804 36,131
Deposits ........................................................... 10,961 10,713 8,871
Prepayment for raw materials and products ................................ 1,510 1,653 5,280
Dividend receivable .................................................. — 2,158 —
Listing fees ......................................................... — — 20,371
Prepayments for packaging and testing ................................... — — 10,050
Others ............................................................. 4,579 10,032 11,769
Less: Impairment allowance ........................................... (1,942) (1,825) (1,741)
Total .............................................................. 86,236 100,084 137,634
Our prepayments and other receivables increased from RMB86.2 million as of December 31,
2023 to RMB100.1 million as of December 31, 2024, primarily due to the increase in prepaid income
tax and rights of return assets.
Our prepayments and other receivables increased from RMB100.1 million as of December 31,
2024 to RMB137.6 million as of December 31, 2025, primarily due to the increase in prepaid income
tax, deductible input value-added tax and prepayment for raw materials and products.
As of April 30, 2026, approximately RMB54.6 million, or 39.7% of our prepayments, other
receivables, and other assets as of December 31, 2025, had been subsequently settled.
Cash and Cash Equivalents
Our cash and cash equivalents were RMB1,303.0 million, RMB813.2 million and
RMB1,181.0 million, respectively, as of December 31, 2023, 2024 and 2025. Our cash and cash
equivalents primarily consist of cash held at banks and other financial institutions, and the fluctuation
of our cash and cash equivalents positions at each period end was primarily due to the use of cash to
support operating activities and cash outflows from investing activities.
Liabilities
Trade Payables
Our trade payables primarily include payments to our suppliers for raw materials and packaging
and testing services during the ordinary course of our business.
Our trade payables increased from RMB264.1 million as of December 31, 2023 to
RMB316.0 million as of December 31, 2024, and further increased to RMB400.9 million as of
December 31, 2025, primarily due to the increase in procurement of raw materials, and packaging and
testing services to support our expanding production and business operations.
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The following table sets forth our trade payables turnover days for the years indicated.
For the Year Ended
December 31,
2023 2024 2025
Trade payables turnover days (1) .................................................. 7 0 6 0 6 2
(1) The trade payables turnover days are calculated by dividing the arithmetic mean of the opening and ending balance of trade payables in
that period by cost of sales for the corresponding period and then multiplying by the number of days in that period (i.e., 365 days for a
given year).
Our trade payables turnover days decreased from 70 days in 2023 to 60 days in 2024, primarily
because the proportion of purchases with shorter payment terms in 2024 increased compared to 2023,
and these purchases with shorter payment terms primarily consist of raw material purchases. Our trade
payables turnover days remained relatively stable at 60 days in 2024 and 62 days in 2025.
Our Directors confirm that we did not have any material defaults on payments of trade payables
during the Track Record Period and up to the Latest Practicable Date.
The following table sets forth an aging analysis of our trade payables as of the date indicated.
As of December 31,
2023 2024 2025
(RMB in thousands)
Within one month ................................................... 213,586 277,101 308,775
Over one month but less than two months ................................ 46,517 38,783 71,211
Over two months but less than three months .............................. 4,038 112 20,869
Over three months .................................................. — 4 5 5
Total ............................................................. 264,141 316,000 400,910
As of April 30, 2026, approximately RMB393.7 million, or 98.2% of our trade payables
outstanding as of December 31, 2025, had been subsequently settled.
Other Payables and Accruals
Our other payables and accruals primarily consist of payroll and welfare payable, provision for
expected sales return, payables for additions property, plant and equipment and other tax payables.
The following table sets forth a breakdown of our other payables and accruals as of the dates
indicated.
As of December 31,
2023 2024 2025
(RMB in thousands)
Payroll and welfare payables .......................................... 247,163 358,261 348,522
Liabilities for expected sales return and warranty .......................... 45,581 72,071 65,867
Other tax payable ................................................... 20,967 16,246 13,856
Payable for technological development .................................. 24,572 18,427 7,516
Payables for additions of property, plant and equipment ..................... 1,344 58,676 14,543
Others ............................................................ 27,734 26,809 29,028
Total ............................................................. 367,361 550,490 479,332
Our other payables and accruals increased from RMB367.4 million as of December 31, 2023 to
RMB550.5 million as of December 31, 2024, primarily due to (i) an increase in payroll and welfare
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payables driven by the increase in the number of our employees, and (ii) an increase in payables for
additions of property, plant and equipment to support our expanding business operations.
Our other payables and accruals decreased from RMB550.5 million as of December 31, 2024 to
RMB479.3 million as of December 31, 2025, primarily due to the decrease in payables for additions of
property, plant and equipment as the relevant projects were completed in 2025.
As of April 30, 2026, approximately RMB303.3 million, or 63.3% of our other payables and
accruals as of December 31, 2025, had been subsequently settled.
Interest-bearing Bank Borrowings
Interest-bearing bank borrowings consist primarily of loans from commercial banks in China.
Our interest-bearing bank borrowings increased from nil as of December 31, 2023 to RMB70.7 million
as of December 31, 2024, and further to RMB396.9 million as of December 31, 2025, indicating that
we have broadened our financing channels. See “—Indebtedness—Interest-bearing Bank Loans” for
more details.
Lease Liabilities
Lease liabilities represent the present value of outstanding lease payments under our lease
agreements. We recorded non-current lease liabilities of RMB27.0 million, RMB14.4 million and
RMB7.8 million, respectively, as of December 31, 2023, 2024 and 2025. We recorded current lease
liabilities of RMB17.9 million, RMB19.6 million and RMB12.8 million, as of December 31, 2023,
2024 and 2025, respectively.
Contract Liabilities
Our contract liabilities primarily represent the prepayments we received from certain customers
for sales of our products. Our contract liabilities amounted to RMB14.9 million as of December 31,
2023, RMB18.3 million as of December 31, 2024, and RMB18.4 million as of December 31, 2025.
As of April 30, 2026, approximately RMB17.4 million, or 94.7% of our total contract liabilities
as of December 31, 2025, had been recognized as revenue.
LIQUIDITY AND CAPITAL RESOURCES
Our primary uses of cash are to fund our procurement of raw materials, research and
development, sales and marketing activities, and other operational needs. During the Track Record
Period, we financed our capital expenditures and working capital requirements principally with funds
from cash generated from our operations and bank borrowings. After the Global Offering, we believe
that our liquidity requirements will continue to be satisfied with a combination of these sources and net
proceeds from the Global Offering. As of December 31, 2023, 2024 and 2025, and April 30, 2026, we
had cash and cash equivalents of RMB1,303.0 million, RMB813.2 million, RMB1,181.0 million and
RMB914.1 million, respectively. We do not anticipate any material changes to the availability of
financing to fund our operations in the future.
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Cash Flows
The following table sets forth our selected cash flow data for the years indicated.
Year Ended December 31,
2023 2024 2025
(RMB in thousands)
Net cash flows from operating activities ............................ 161,796 534,149 434,379
Net cash flows used in investing activities .......................... ( 541,119) (1,248,316) (432,709)
Net cash flows from financing activities ............................ 39,315 214,004 384,746
Net increase/(decrease) in cash and cash equivalents ................ (340,008) (500,163) 386,416
Cash and cash equivalents at beginning of the year ................... 1,638,363 1,303,007 813,194
Effect of foreign exchange rate changes, net ......................... 4,652 10,350 (18,582)
Cash and cash equivalents at end of the year ...................... 1,303,007 813,194 1,181,028
Net Cash from Operating Activities
Our net cash generated from operating activities was RMB434.4 million in 2025, primarily due
to our profit before tax of RMB549.9 million, which was further adjusted for (i) certain non-cash or
non-operating items, primarily including (a) depreciation of property, plant and equipment of
RMB150.1 million, and (b) share-based payment expenses of RMB159.1 million, and (ii) changes in
working capital that negatively affected the cash flow from operating activities, primarily including
(a) an increase in inventories of RMB270.9 million, and (b) an increase in trade and bills receivables at
amortised cost of RMB116.1 million.
Our net cash generated from operating activities was RMB534.1 million in 2024. This was
primarily attributable to our profit before tax of RMB484.8 million, which was further adjusted for
(i) certain non-cash or non-operating items, primarily including (a) depreciation of property, plant and
equipment of RMB125.2 million, and (b) share-based payment expenses of RMB84.8 million, and
(ii) changes in working capital that negatively affected the cash flow from operating activities,
primarily including (a) an increase in inventories of RMB263.5 million, and (b) an increase in trade
and bills receivables of RMB67.5 million, which was partially offset by changes in working capital
that positively affected the cash flow from operating activities, primarily including an increase in other
payables and accruals of RMB119.9 million.
Our net cash generated from operating activities was RMB161.8 million in 2023. This was
primarily attributable to our profit before tax of RMB254.1 million, which was further adjusted for
(i) certain non-cash or non-operating items, primarily including (a) depreciation of property, plant and
equipment of RMB101.6 million, and (b) share-based payment expenses of RMB118.8 million, and
(ii) changes in working capital that negatively affected the cash flow from operating activities,
primarily including (a) an increase in inventories of RMB199.4 million, (b) an increase in trade and
bills receivables of RMB56.5 million, (c) a decrease in other payables and accruals of
RMB42.1 million, and (d) a decrease in trade payables of RMB22.8 million.
Net Cash Used in Investing Activities
Our net cash used in investing activities was RMB432.7 million in 2025, primarily due to
purchases of wealth management products of RMB5,080.0 million, purchase of subsidiaries for
RMB254.1 million, and purchases of items of property, plant and equipment of RMB232.6 million,
which were partially offset by proceeds from the disposal of wealth management products of
RMB5,107.0 million.
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Our net cash used in investing activities was RMB1,248.3 million in 2024, primarily due to
purchases of wealth management products of RMB3,165.0 million, purchase of time deposits of
RMB363.0 million, and purchases of items of property, plant and equipment of RMB209.0 million,
which were partially offset by proceeds from the disposal of wealth management products of
RMB2,563.5 million.
Our net cash used in investing activities was RMB541.1 million in 2023, primarily due to
purchases of wealth management products of RMB2,332.0 million, and purchases of items of property,
plant and equipment of RMB204.0 million, which were partially offset by proceeds from the disposal
of wealth management products of RMB2,092.5 million.
Net Cash from Financing Activities
Our net cash from financing activities was RMB384.7 million in 2025, primarily due to new
bank loans of RMB362.6 million and proceeds from the issue of shares of RMB227.2 million, which
was partially offset by the payment of dividends of RMB95.1 million, and payment of bank and other
borrowings of RMB62.6 million.
Our net cash from financing activities was RMB214.0 million in 2024, primarily due to
proceeds from the issue of shares of RMB214.3 million and proceeds from new bank loans of
RMB70.6 million, which was partially offset by the payment of dividends of RMB47.1 million.
Our net cash from financing activities was RMB39.3 million in 2023, primarily due to proceeds
from the issue of shares of RMB130.4 million, which was partially offset by the payment of dividends
of RMB107.8 million.
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Current Assets and Current Liabilities
The following table sets forth our current assets and current liabilities as of the dates indicated.
As of December 31,
As of
April 30,
2023 2024 2025 2026
(RMB in thousands)
(unaudited)
Current assets
Inventories .......................................... 901,367 1,164,817 1,448,216 1,607,016
Trade and bills receivables at amortised cost ............... 166,472 232,764 362,830 356,705
Trade and bills receivables at fair value through other
comprehensive income .............................. — — 2 6 0 4 5 4
Contract assets ....................................... — — 2,084 1,356
Prepayments, other receivables and other assets ............. 86,236 100,084 137,634 141,622
Financial assets at fair value through profit or loss ........... 769,093 1,378,000 1,340,087 1,735,066
Cash and cash equivalents .............................. 1,303,007 813,194 1,181,028 914,129
Time deposits ....................................... — — 81,810 226,126
Restricted cash ....................................... 22,289 1,755 44,540 44,571
Total current assets .................................. 3,248,464 3,690,614 4,598,489 5,027,045
Current liabilities
Trade payables ....................................... 264,141 316,000 400,910 453,509
Other payables and accruals ............................ 321,780 478,419 470,629 463,687
Interest-bearing bank borrowings ........................ — 36,579 329,729 503,309
Lease liabilities ...................................... 17,884 19,565 12,752 9,144
Contract liabilities .................................... 14,894 18,307 18,389 22,241
Total current liabilities ............................... 618,699 868,870 1,232,409 1,451,890
Net current assets ................................... 2,629,765 2,821,744 3,366,080 3,575,155
Our net current assets increased to RMB3,575.1 million as of April 30, 2026 from
RMB3,366.1 million as of December 31, 2025, primarily due to (i) an increase of RMB158.8 million
in inventories, (ii) an increase of RMB395.0 million in financial assets at fair value through profit or
loss, and (iii) an increase of RMB144.3 million in time deposits, partially offset by (i) a decrease of
RMB266.9 million in cash and cash equivalents and (ii) increases of RMB52.6 million in trade
payables and RMB173.6 million in interest-bearing bank borrowings.
Our net current assets increased to RMB3,366.1 million as of December 31, 2025 from
RMB2,821.7 million as of December 31, 2024, primarily due to (i) an increase of RMB283.4 million
in inventories, and (ii) an increase of RMB367.8 million in cash and cash equivalents, and partially
offset by (i) an increase of RMB84.9 million in trade payables, and (ii) an increase of
RMB293.2 million in interest-bearing bank borrowings.
Our net current assets increased to RMB2,821.7 million as of December 31, 2024, from
RMB2,629.8 million as of December 31, 2023, primarily due to (i) an increase of RMB263.5 million
in inventories, (ii) an increase of RMB608.9 million in financial assets at fair value through profit or
loss, and (iii) an increase of RMB66.3 million in trade and bills receivables, partially offset by (i) a
decrease of RMB489.8 million in cash and cash equivalents, (ii) an increase of RMB51.9 million in
trade payables, and (iii) an increase of RMB156.6 million in other payables and accruals.
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INDEBTEDNESS
The following table sets forth a breakdown of our indebtedness as of the dates indicated.
As of December 31,
As of
April 30,
2023 2024 2025 2026
(RMB in thousands)
(unaudited)
Current
Interest-bearing bank borrowings .............................. — 36,579 329,729 503,309
Lease liabilities ............................................ 17,884 19,565 12,752 9,144
Non-current
Interest-bearing bank borrowings .............................. — 34,121 67,172 34,997
Lease liabilities ............................................ 26,992 14,370 7,767 17,673
Total .................................................... 44,876 104,635 417,420 565,123
Interest-bearing Bank Loans
We had interest-bearing bank borrowings of nil, RMB70.7 million, RMB396.9 million and
RMB538.3 million as of December 31, 2023, 2024, 2025 and April 30, 2026, respectively. The
effective interest rate of our interest-bearing bank loans ranged between 2.11% and 2.76% during the
Track Record Period.
Among the interest-bearing bank borrowings as of December 31, 2024 and 2025, the bank
borrowings amounting to RMB70.7 million and RMB396.9 million, respectively, were guaranteed by
our Company and a non-controlling shareholder of a subsidiary. The guarantee provided by a
non-controlling shareholder of a subsidiary has been fully released in December 2025.
As of April 30, 2026, we had banking facilities of RMB1,100.0 million, of which
RMB548.1 million had not been utilized.
Lease Liabilities
Our lease liabilities including current and non-current portions, primarily relate to our leased
buildings. Our lease liabilities were RMB44.9 million, RMB33.9 million, RMB20.5 million, and
RMB26.8 million as of December 31, 2023, 2024 and 2025 and April 30, 2026, respectively, the
changes in which were primarily due to our new or renewed office leases.
Indebtedness Statement
Our Directors confirm that as of the Latest Practicable Date, there was no material covenant on
any of our outstanding debt and that our Group did not experience any difficulty in obtaining bank
loans and other borrowings, material default in payment of trade and non-trade payables, bank loans
and other borrowings or breach of covenants during the Track Record Period and up to the date of this
prospectus.
Except as disclosed above, as of April 30, 2026, being the most recent practicable date for
determining our indebtedness, we did not have any outstanding mortgages, charges, debentures, other
issued debt capital, bank overdrafts, borrowings, liabilities under acceptance or other similar
indebtedness, hire purchase commitments, guarantees or other material contingent liabilities. Our
Directors have confirmed that there had been no material change in our indebtedness since April 30,
2026, and up to the date of this prospectus.
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CONTINGENT LIABILITIES
As of the Latest Practicable Date, we did not have any contingent liabilities or guarantees.
CAPITAL EXPENDITURE
Our capital expenditures during the Track Record Period were primarily related to the purchase
of property, plant, equipment and intangible assets. Our capital expenditures were RMB233.3 million,
RMB240.3 million and RMB256.2 million, respectively, in 2023, 2024 and 2025. We intend to fund
our future capital expenditures with net proceeds from equity and debt financings and the cash on our
consolidated statements of financial position.
CAPITAL COMMITMENT
The table below sets forth the capital commitments as of the dates indicated.
As of December 31,
2023 2024 2025
(RMB in thousands)
Property, plant and equipment ............................................ 86,257 22,910 36,717
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
During the Track Record Period and up to the Latest Practicable Date, we did not have any
material off-balance sheet commitments or arrangements.
KEY FINANCIAL INDICATORS
The following table sets forth our selected financial indicators for the years and as of the dates
indicated.
As of or for the year ended
December 31,
2023 2024 2025
Revenue growth rate ................................................... (17.9)% 28.0% 16.5%
Net debt-to-equity ratio (1) ............................................... (11.4)% 7.8% 8.4%
Current ratio(2) ........................................................ 5 . 3 4 . 2 3 . 7
Quick ratio(3) ......................................................... 3 . 8 2 . 9 2 . 6
(1) Net debt-to-equity ratio equals total liabilities net of cash and cash equivalents at the end of the year divided by total equity at the end of
the year.
(2) Current ratio was calculated based on current assets of the respective year, divided by current liabilities.
(3) Quick ratio equals the current assets (excluding inventories) divided by current liabilities as of the date indicated.
FINANCIAL RISKS
Our activities expose us to a variety of financial risks, including interest rate risk, foreign
currency risk, credit risk and liquidity risk. Our overall risk management procedures focus on the
unpredictability of financial markets and seek to minimize potential adverse effects on our financial
performance.
Interest Rate Risk
Interest-bearing financial instruments at variable rates and at fixed rates expose us to cash flow
interest rate risk and fair value interest rate risk, respectively. We determine the appropriate weightings
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FINANCIAL INFORMATION
of the fixed and floating rate interest-bearing instruments based on the current market conditions and
perform regular reviews and monitoring to achieve an appropriate mix of fixed and floating rate
exposure. The cash flow interest rate risk and fair value interest rate risk that we are exposed to are not
significant.
Foreign Exchange Risk
We are exposed to foreign exchange risk arising from export sales denominated in foreign
currencies. Foreign exchange risk arises when future commercial transactions or recognized assets and
liabilities are denominated in a currency that is not the respective functional currency of our
subsidiaries. Further quantitative data in respect of our exposure to foreign exchange risk arising are
disclosed in Note 43 to the Accountants’ Report included in Appendix I to this prospectus.
Credit Risk
The carrying amounts of cash and cash equivalents, time deposits, trade and bills receivables,
and other financial assets at amortized cost included in the consolidated statements of financial
position represent our maximum exposure to credit risk in relation to our financial assets. We do not
provide any guarantees which would expose us to credit risk.
Cash and cash equivalents, time deposits and restricted cash are primarily held with state-
owned or listed banks and subject to the impairment requirements of IFRS 9, and the identified
impairment loss was immaterial as of December 31, 2023, 2024 and 2025.
We apply the IFRS 9 simplified approach to measuring expected credit losses (“ECLs”), which
uses a lifetime expected loss allowance for all trade receivables. To measure the ECLs, trade and bills
receivables have been grouped based on shared credit risk characteristics and aging. We have therefore
concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss
rates for the contract assets. We also made an individual assessment on the recoverability of our trade
and bills receivables for certain customers based on historical settlement records. For further details of
credit risk, see Note 43 to the Accountants’ Report included in Appendix I to this prospectus.
Liquidity Risk
Our approach to managing liquidity risk is to ensure sufficient capital liquidity to meet our
debts without incurring unacceptable losses or causing damage to our reputation. We regularly analyze
our liability structure and maturity dates to ensure the maintenance of ample liquidity. Our
management monitors the utilization of bank borrowings and ensures compliance with borrowing
agreements. At the same time, we maintain close cooperation with financial institutions to maintain
sufficient credit lines and effectively prevent and control liquidity risks. For further details of liquidity
risk, see Note 43 to the Accountants’ Report included in Appendix I to this prospectus.
DIVIDENDS
During the Track Record Period, we declared and paid cash dividends to our Shareholders as
follows.
Year Ended December 31,
2023 2024 2025
(RMB in thousands)
Dividends declared .................................................... 107,846 47,073 95,062
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FINANCIAL INFORMATION
As of the Latest Practicable Date, we had paid these dividends in full. On April 20, 2026, we
declared dividends of RMB124.1 million, which have not been fully paid.
We do not have a formal dividend policy or any pre-determined dividend payout ratio. Pursuant
to the Articles of Association and in accordance with the PRC laws and regulations, such as the PRC
Company Law (
) and the No. 3 Guideline for the Supervision of Listed
Companies—Cash Dividend Distribution of Listed Companies (2025 Revision) (ˏ
ୋ3ߎ2025͍)), we shall, where specific conditions are met, distribute cash
dividends in an amount not less than 10% of the distributable profits recorded in the current year after
making up for losses and making the required appropriations to statutory reserves and surplus reserves.
Any future determination to pay dividends will be made at the discretion of our Directors and
the approval at our Shareholders’ meetings and may be based on a number of factors, including our
future operations and earnings, capital requirements, general financial condition, and other factors that
our Directors may deem relevant.
WORKING CAPITAL SUFFICIENCY
Our Directors are of the opinion that, taking into account the financial resources available to the
Group, including the estimated net proceeds from the Global Offering and the expected cash generated
from operating activities, we have sufficient working capital for our current requirements and for the
next 12 months from the date of this prospectus.
DISTRIBUTABLE RESERVES
As of December 31, 2025, our consolidated retained profits amounted to RMB2,875.6 million,
available for distribution to our shareholders.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commissions, and other fees
incurred in connection with the Global Offering. We recorded listing expenses of nil, nil and
RMB20.4 million (including deferred listing expenses) in 2023, 2024 and 2025, respectively, which
were not charged to our consolidated statements of profit or loss during the Track Record Period. The
estimated total listing expenses (based on the maximum Offer Price and assuming that the
Over-allotment Option is not exercised) for the Global Offering are approximately RMB87.9 million
(equivalent to approximately HK$101.0 million), accounting for approximately 2.2% of our gross
proceeds from the Global Offering. The estimated total listing expenses consist of (i) underwriting-
related expenses (including but not limited to commissions and fees) of approximately
RMB48.1 million (approximately HK$55.2 million), and (ii) non-underwriting-related expenses of
approximately RMB39.9 million (approximately HK$45.8 million), which consist of fees and expenses
of legal advisers and Reporting Accountants of approximately RMB23.4 million (approximately
HK$26.8 million), and other fees and expenses of approximately RMB16.5 million (approximately
HK$19.0 million). Approximately RMB80.6 million (equivalent to approximately HK$92.6 million) of
the estimated listing expenses is directly attributable to the issue of new Shares to the public and will
be accounted for as a deduction from equity upon completion of the Global Offering. Approximately
RMB7.3 million (equivalent to approximately HK$8.4 million) is expected to be charged in profit or
loss before or upon completion of the Global Offering. This calculation is subject to adjustment based
on the actual amount incurred or to be incurred. The listing expenses above are the best estimate as of
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FINANCIAL INFORMATION
the Latest Practicable Date and are for reference only. The actual amount may differ from such an
estimate.
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS
See “Appendix II—Unaudited Pro Forma Financial Information” for more details.
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Our Directors have confirmed that there has been no material adverse change in our financial or
trading position or prospects since December 31, 2025, being the end date of our latest consolidated
financial statements as set out in “Appendix I—Accountants’ Report” to this prospectus, and up to the
date of this prospectus.
Unaudited Financial Information for the Three Months Ended March 31, 2026
For a description of our unaudited financial information for the three months ended March 31,
2026, please see “Summary—Recent Development and No Material Adverse Change—Unaudited
Financial Information for the Three Months Ended March 31, 2026” for more details.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
Our Directors confirm that, as of the Latest Practicable Date, there are no circumstances that
would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing Rules.
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RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
OUR CONTROLLING SHAREHOLDERS
Pursuant to the Concert Party Agreement dated June 10, 2015, as amended and supplemented
by the Supplemental Agreement to the Concert Party Agreement dated January 21, 2021, Hongshun
Xiangtai (wholly owned by Dr. Zhang), Baoli Hongya (wholly owned by Ms. Zhang), Power Trend
(indirectly wholly owned by Ms. Wen Li), Ms. Zhang and Mr. Lin Lin agreed that, among others, for
so long as Hongshun Xiangtai remains a Shareholder, they would act in concert with Hongshun
Xiangtai in respect of matters related to business decisions, including exercising voting rights at the
Shareholders’ meetings, the right to submit proposals to the Board and the Shareholders’ meetings, and
the right to nominate Directors, independent Directors, and supervisors.
As of the Latest Practicable Date, (i) Dr. Zhang was entitled to exercise approximately 18.91% of
the voting rights in the Company through 117,449,624 Shares held by Hongshun Xiangtai,
(ii) Ms. Zhang was entitled to exercise approximately 8.31% of the voting rights in our Company
through 50,712,118 Shares held by Baoli Hongya and 896,461 Shares directly held by her, (iii) Mr. Lin
Lin was entitled to exercise approximately 3.81% of the voting rights in the Company through
23,661,452 Shares directly held by him, and (iv) Ms. Wen Li, the spouse of Dr. Zhang, was entitled to
exercise approximately 4.64% of the voting rights in the Company through 28,792,495 Shares held by
Power Trend. By virtue of the Concert Party Agreement and the Supplemental Agreement to the Concert
Party Agreement, Hongshun Xiangtai, Baoli Hongya, Power Trend, Dr. Zhang, Ms. Zhang, Mr. Lin Lin
and Ms. Wen Li directly or indirectly controlled an aggregate of 221,512,150 Shares, representing
approximately 35.67% of the voting rights in our Company as at the Latest Practicable Date.
Immediately after completion of the Global Offering, Hongshun Xiangtai, Baoli Hongya,
Power Trend, Dr. Zhang, Ms. Zhang, Mr. Lin Lin and Ms. Wen Li will in aggregate be entitled to
exercise approximately 32.82% of the voting rights in the Company (assuming that the Over-allotment
Option is not exercised and no other changes are made to the issued share capital of our Company
between the Latest Practicable Date and the Listing). Accordingly, Hongshun Xiangtai, Baoli Hongya,
Power Trend, Dr. Zhang, Ms. Zhang, Mr. Lin Lin and Ms. Wen Li will constitute a group of our
Controlling Shareholders upon the completion of the Global Offering.
COMPETITION
Each of our Controlling Shareholders has confirmed that he/she/it does not have any interest in
a business, apart from the business of the Group, which competes or is likely to compete, directly or
indirectly, with our business, which would require disclosure under Rule 8.10 of the Listing Rules.
INDEPENDENCE FROM THE CONTROLLING SHAREHOLDERS
Having considered the following factors, the Directors are satisfied that we are capable of
carrying out our business independently of our Controlling Shareholders and their respective close
associates (other than the Group) after the Listing.
Management Independence
Our business is managed and conducted by our Board and senior management. Upon the
Listing, the Board will consist of two executive Directors, two non-executive Directors and three
independent non-executive Directors. See “Directors and Senior Management” for more details of our
Directors and senior management.
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RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
Save as disclosed below, none of our Directors or members of our senior management serves as
a director or member of senior management in our Controlling Shareholders or their close associates
(other than members of our Group):
Major positions held in our Controlling
Shareholders and their close associates
(other than members of our Group)
Name Positions held in the Group Name of company Position
Dr. Zhang Executive Director, chairman of the
Board and general manager
Hongshun Xiangtai Executive director
and general manager
Ms. Zhang Executive Director, deputy chairwoman
of the Board, deputy general manager
and secretary to the Board
Baoli Hongya Executive director
and general manager
Our Directors are of the view that the Company is able to carry on business independently from
our Controlling Shareholders and their respective close associates from a management perspective for
the following reasons:
(i) each of Hongshun Xiangtai and Baoli Hongya is an investment holding company and had
no actual business operation as of the Latest Practicable Date. Dr. Zhang and Ms. Zhang
will have sufficient time and resources to serve on our Board or as senior management
members, and their positions in the aforementioned companies will not affect their
discharge of duties and responsibilities to our Group;
(ii) each of the Directors is aware of his/her fiduciary duties as a Director which require,
among other things, that he/she must act for the benefit and in the best interest of the
Group and must not allow any conflict between his/her duties as a Director and his/her
personal interest;
(iii) in the event that there is a potential conflict of interests arising out of any transaction to be
entered into between the Group and the Directors and/or their respective associates, the
interested Director(s) will abstain from voting at the relevant meeting of the Board in
respect of such transactions and shall not be counted in the quorum;
(iv) we will have three independent non-executive Directors, and certain matters of the
Company must always be referred to the independent non-executive Directors for review;
and
(v) the Company is an A-share listed company and has adopted a series of corporate
governance measures to manage conflicts of interest, if any, between the Group and our
Controlling Shareholders which would support our independent management.
Based on the above, the Directors are of the view that the Board as a whole is able to perform
the management role in the Group independently from our Controlling Shareholders and their
respective close associates (other than the Group) after the Listing.
Operational Independence
We have independent operating capabilities and management systems. We do not rely on any
operational or administrative resources of our Controlling Shareholders or their respective close
associates (other than the Group) for research and development, manufacturing, business development,
staffing and administration (including financial and accounting management, human resources and
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RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
information technology). We have independent access to suppliers and customers. We also possess the
necessary licenses, certificates, facilities and intellectual property rights to carry on and operate our
business, and we have sufficient operational capacity in terms of capital and employees to operate
independently.
Based on the above, the Directors are of the view that we are able to operate independently
from our Controlling Shareholders and their respective close associates (other than the Group) after the
Listing.
Financial Independence
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 functions of
the Company. We make financial decisions and determine our use of funds according to our own
business needs. We open and manage our bank accounts independently, and have not shared any bank
account with our Controlling Shareholders and their respective close associates. We have also
established an independent audit system, a standardized financial and accounting system and a
complete financial management system. As of the Latest Practicable Date, there was no outstanding
loan, advance, balance of non-trade nature due to or from, or pledge or guarantee provided by our
Controlling Shareholders or their respective associates, and we do not intend to rely on any member of
our Controlling Shareholders in the future.
Based on the above, the Directors are of the view that we are capable of carrying on our
business independently of, and do not place undue reliance on our Controlling Shareholders and their
respective close associates after the Listing.
CORPORATE GOVERNANCE MEASURES
The Company will comply with the provisions of the Corporate Governance Code, which sets
out principles of good corporate governance. The Directors recognize the importance of good corporate
governance in protecting the Shareholders’ interests. We would adopt the following measures to
promote good corporate governance and to avoid potential conflict of interests between the Group and
our Controlling Shareholders:
(i) where a general meeting is to be held for considering proposed transactions in which our
Controlling Shareholders or any of their respective associates has a material interest, our
Controlling Shareholders will not vote on the resolutions and shall not be counted in the
quorum in the voting;
(ii) as part of our preparation for the Listing, we have amended our Articles of Association to
comply with the Listing Rules which will become effective upon Listing. In particular,
our Articles of Association provides that, a Director shall abstain from voting on any
resolution approving any contract, transaction or arrangement in which such Director or
any of his/her associates has a material interest nor shall such Director be counted in the
quorum present at the Board meeting;
(iii) the Company has established internal control mechanisms to identify connected
transactions. Upon the Listing, if the Company enters into connected transactions with
our Controlling Shareholders or any of their respective associates, the Company will
comply with the applicable requirements under the Listing Rules;
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RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
(iv) we are committed that the Board shall include a balanced composition of executive
Directors and non-executive Directors (including independent non-executive Directors).
We have appointed three independent non-executive Directors, and we believe our
independent non-executive Directors (a) possess sufficient experience, (b) are free of any
business or other relationship which could interfere in any material manner with the
exercise of their independent judgment, and (c) will be able to provide an impartial and
external opinion to protect the interests of our Shareholders as a whole;
(v) the independent non-executive Directors will review, on an annual and independent
basis, whether there is any conflict of interests between the Group and our Controlling
Shareholders (the “ Annual Review ”) and provide impartial and professional advice to
protect the interests of minority Shareholders;
(vi) our Controlling Shareholders will undertake to provide all information necessary,
including all relevant financial, operational and market information and any other
necessary information as required by the independent non-executive Directors for the
Annual Review;
(vii) the Company will disclose decisions (with basis) on matters reviewed by the independent
non-executive Directors either in its annual report or by way of announcements;
(viii) where the Directors reasonably request the advice of independent professionals, such as
financial advisers, the appointment of such independent professionals will be made at the
Company’s expenses; and
(ix) we have appointed Red Solar Capital Limited as our Compliance Adviser to provide
advice and guidance to us in respect of compliance with the Listing Rules, including
various requirements relating to corporate governance.
Based on the above, the Directors are satisfied that sufficient corporate governance measures
have been put in place to manage conflict of interests that may arise between the Group and our
Controlling Shareholders, and to protect minority Shareholders’ interests after the Listing.
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SHARE CAPITAL
BEFORE THE COMPLETION OF THE GLOBAL OFFERING
As of the Latest Practicable Date, the total issued share capital of our Company was
RMB621,014,624 comprising 621,014,624 A Shares of nominal value of RMB1.00 each, all of which
are listed on the Shenzhen Stock Exchange.
UPON THE COMPLETION OF THE GLOBAL OFFERING
Immediately following the completion of the Global Offering, assuming that the Over-
allotment Option is not exercised and no other changes are made to the issued share capital of our
Company between the Latest Practicable Date and the Listing, the share capital of our Company will
be as follows:
Description of Shares Number of Shares
Approximate
percentage of the total
share capital of our
Company
A Shares in issue ............................................. 621,014,624 92.00%
H Shares to be issued under the Global Offering .................... 54,001,200 8.00%
Total ...................................................... 675,015,824 100.00%
Immediately following the completion of the Global Offering, assuming that the Over-
allotment Option is fully exercised and no other changes are made to the issued share capital of our
Company between the Latest Practicable Date and the Listing, the share capital of our Company will
be as follows:
Description of Shares Number of Shares
Approximate
percentage of the total
share capital of our
Company
A Shares in issue ............................................. 621,014,624 90.91%
H Shares to be issued under the Global Offering .................... 62,101,300 9.09%
Total ...................................................... 683,115,924 100.00%
OUR SHARES
Our H Shares in issue upon completion of the Global Offering and our A Shares are ordinary
Shares in the share capital of our Company and are considered as one class of Shares. However, apart
from qualified domestic institutional investors and persons who are entitled to hold our H Shares
pursuant to relevant PRC laws and regulations or upon approval of any competent authority, or (if our
H Shares are eligible securities for that purpose) through Shenzhen-Hong Kong Stock Connect or
Shanghai-Hong Kong Stock Connect pursuant to relevant PRC laws and regulations, our H Shares may
not be subscribed by or traded between legal or natural persons of the PRC.
Shenzhen-Hong Kong Stock Connect has established a stock connect mechanism between the
PRC and Hong Kong. Our A Shares can be subscribed for and traded by PRC investors, qualified
foreign institutional investors or qualified foreign strategic investors and must be traded in RMB. As
our A Shares are eligible securities under the Northbound Trading Link, they can also be subscribed
for and traded by Hong Kong and other overseas investors pursuant to the rules and limits of
Shenzhen-Hong Kong Stock Connect. If our H Shares are eligible securities under the Southbound
Trading Link, they can also be subscribed for and traded by PRC investors in accordance with the rules
and limits of Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect.
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SHARE CAPITAL
RANKING
Our H Shares and our A Shares are regarded as one class of Shares under our Articles of
Association and will rank pari passu with each other in all other respects and, in particular, will rank
equally for all dividends or distributions declared, paid or made after the date of this prospectus. All
dividends in respect of our H Shares are to be paid by us in Hong Kong dollars whereas all dividends
in respect of our A Shares are to be paid by us in Renminbi. In addition to cash, dividends may also be
distributed in the form of Shares. Holders of our H Shares will receive share dividends in the form of H
Shares, and holders of our A Shares will receive share dividends in the form of A Shares.
NO CONVERSION OF OUR A SHARES INTO H SHARES FOR LISTING AND TRADING
ON THE HONG KONG STOCK EXCHANGE
Our A Shares and our H Shares are generally neither interchangeable nor fungible, and the
market prices of our A Shares and our H Shares may be different after the Global Offering. The
Guidelines on Application for “Full Circulation” of Domestic Unlisted Shares of H-share Companies
(
H΅͡ሗ“ஷ”ˏ) announced by the CSRC are not applicable to
companies dual listed in the PRC and on the Stock Exchange. As of the Latest Practicable Date, there
were no relevant rules or guidelines from the CSRC providing that A Shareholders may convert A
Shares held by them into H Shares for listing and trading on the Stock Exchange.
APPROVAL FROM A SHAREHOLDERS REGARDING THE GLOBAL OFFERING
Approval from A Shareholders is required for our Company to issue H Shares and seek the
listing of H Shares on the Stock Exchange. Such approval was obtained by us at the shareholders’
general meeting of our Company held on September 19, 2025 and is subject to the following
conditions:
(a) Size of the offer. The proposed number of H Shares to be offered initially shall not exceed
15% of the total issued share capital as enlarged by the H Shares to be issued pursuant to
the Global Offering (before the exercise of the Over-allotment Option). The number of H
Shares to be issued pursuant to the full exercise of the Over-allotment Option shall not
exceed 15% of the total number of H Shares to be offered initially under the Global
Offering.
(b) Method of offering. The method of offering shall be by way of an international offering
to institutional investors and a public offer for subscription in Hong Kong.
(c) Target investors. The H Shares shall be issued to public investors in Hong Kong under
the Hong Kong Public Offering, and international investors, qualified domestic
institutional investors in Chinese Mainland and other investors who are approved by
mainland Chinese regulatory bodies to invest abroad in the International Offering.
(d) Price determination basis. The issue price of the H Shares will be determined, among
others, after due consideration of the interests of existing Shareholders of our Company,
acceptance of investors and issuance risks and in accordance with international practices
through the demands for orders and book building process, subject to the domestic and
overseas capital market conditions and by reference to the valuation level of comparable
companies in domestic and overseas markets.
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SHARE CAPITAL
(e) Validity period. The issue of H Shares and listing of H Shares on the Hong Kong Stock
Exchange shall be completed within 24 months from the date when the shareholders’
general meeting was held on September 19, 2025.
There is no other approved offering plan for our Shares except the Global Offering.
SHAREHOLDERS’ GENERAL MEETING
For details of circumstance under which our shareholders’ general meeting is required, see
“Summary of Articles of Association – Shareholders and General Meetings” in Appendix V to this
prospectus.
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SUBSTANTIAL SHAREHOLDERS
As far as our Directors are aware, immediately following the completion of the Global
Offering, the following persons will have an interest and/or short position (as applicable) in our Shares
or underlying Shares which will be required to be disclosed to our Company pursuant to the provisions
of Divisions 2 and 3 of Part XV of the SFO, or will be, directly or indirectly, interested in 10% or more
of the nominal value of any class of our share capital carrying rights to vote in all circumstances at
general meetings of our Company:
Immediately following the completion of the Global
Offering
As of the Latest Practicable Date
Assuming the Over-allotment
Option is not
exercised and no other
changes are made to the
issued share capital of our
Company between the
Latest Practicable Date and
the Listing
Assuming the Over-allotment
Option is fully exercised and
no other
changes are made to the
issued share capital of our
Company between the
Latest Practicable Date and
the Listing
Shareholder Nature of interest
Number and
description of
Shares (1)
Approximate
percentage
of interest in
the
Company
Approximate
percentage
of interest in
the A Shares /
H Shares
Approximate
percentage
of interest in
the
Company
Approximate
percentage
of interest in
the A Shares /
H Shares
Approximate
percentage
of interest in
the
Company
Hongshun
Xiangtai .......
Beneficial owner;
interest held
jointly with other
persons
(2)
221,512,150
A Shares 35.67% 35.67% 32.82% 35.67% 32.43%
Baoli Hongya .... Beneficial owner;
interest held
jointly with other
persons
(2)
221,512,150
A Shares 35.67% 35.67% 32.82% 35.67% 32.43%
Power Trend ..... Beneficial owner;
interest held
jointly with other
persons
(2)
221,512,150
A Shares 35.67% 35.67% 32.82% 35.67% 32.43%
Dr. Zhang ....... Interest in
controlled
corporation
(3);
interest held
jointly with other
persons
(2); interest
of spouse (4)
221,512,150
A Shares 35.67% 35.67% 32.82% 35.67% 32.43%
Ms. Zhang ....... Beneficial owner;
interest in
controlled
corporation
(5);
interest held
jointly with other
persons
(2)
221,512,150
A Shares 35.67% 35.67% 32.82% 35.67% 32.43%
M r .L i nL i n ...... Beneficial owner;
interest held
jointly with other
persons
(2)
221,512,150
A Shares 35.67% 35.67% 32.82% 35.67% 32.43%
M s .W e nL i ...... Interest in
controlled
corporation
(6);
interest held
jointly with other
persons
(2); interest
of spouse (4)
221,512,150
A Shares 35.67% 35.67% 32.82% 35.67% 32.43%
GIC Private
Limited .......
Beneficial
Owner
(7) — — 8.51% 0.68% 7.40% 0.67%
JPMAMAPL ..... Investment
manager (8) — — 8.34% 0.67% 7.26% 0.66%
CPE Ginkgo ..... Beneficial
Owner(9) — — 6.47% 0.52% 5.63% 0.51%
HHLRA ......... Investment
manager (10) — — 8.34% 0.67% 7.26% 0.66%
Notes:
(1) All interests stated are long positions.
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SUBSTANTIAL SHAREHOLDERS
(2) Pursuant to the Concert Party Agreement dated June 10, 2015, as amended and supplemented by the Supplemental Agreement to the
Concert Party Agreement dated January 21, 2021, Hongshun Xiangtai (wholly owned by Dr. Zhang), Baoli Hongya (wholly owned by
Ms. Zhang) , Power Trend (indirectly wholly owned by Ms. Wen Li), Ms. Zhang and Mr. Lin Lin agreed that, among others, for so long
as Hongshun Xiangtai remains a Shareholder, they would act in concert with Hongshun Xiangtai in respect of matters related to business
decisions, including exercising voting rights at the Shareholders’ meetings, the right to submit proposals to the Board and the
Shareholders’ meetings, and the right to nominate Directors, independent Directors, and supervisors, and (ii) they would ensure that
Directors nominated by them vote in alignment with Dr. Zhang at Board meetings. As a result, each of Hongshun Xiangtai, Baoli
Hongya, Power Trend, Dr. Zhang, Ms. Zhang, Mr. Lin Lin and Ms. Wen Li was deemed to be interested in all the Shares in which each
of them is interested under the SFO.
(3) As of the Latest Practicable Date, Hongshun Xiangtai was wholly owned by Dr. Zhang. As a result, Dr. Zhang is deemed to be interested
in the 117,449,624 A Shares held by Hongshun Xiangtai.
(4) Ms. Wen Li is the spouse of Dr. Zhang. Therefore, each of Ms. Wen Li and Dr. Zhang is deemed to be interested in the Shares held by
each other under the SFO.
(5) As of the Latest Practicable Date, Baoli Hongya was wholly owned by Ms. Zhang. As a result, Ms. Zhang is deemed to be interested in
the 50,712,118 A Shares held by Baoli Hongya.
(6) As of the Latest Practicable Date, Power Trend was indirectly wholly owned by Ms. Wen Li. As a result, Ms. Wen Li is deemed to be
interested in the 28,792,495 A Shares held by Power Trend.
(7) GIC Private Limited is a cornerstone investor of the Company and will subscribe for 4,597,700 H Shares based on Offer Price of
HK$85.20, being the maximum Offer Price set out in this Prospectus. For further information about GIC Private Limited, please refer to
the section headed “Cornerstone Investors”.
(8) JPMAMAPL is a cornerstone investor of the Company and will subscribe for 4,505,700 H Shares based on Offer Price of HK$85.20,
being the maximum Offer Price set out in this Prospectus, in its capacity as the investor advisor or investment manager for and on behalf
of funds. For further information about JPMAMAPL, please refer to the section headed “Cornerstone Investors”.
(9) CPE Ginkgo is a cornerstone investor of the Company and will subscribe for 3,494,200 H Shares based on Offer Price of HK$85.20,
being the maximum Offer Price set out in this Prospectus. For further information about CPE Ginkgo, please refer to the section headed
“Cornerstone Investors”.
(10) HHLRA is a cornerstone investor of the Company and will subscribe for 4,505,700 H Shares based on Offer Price of HK$85.20, being
the maximum Offer Price set out in this Prospectus, in its capacity as the investment manager and on behalf of the investment funds and
segregated management accounts. For further information about HHLRA, please refer to the section headed “Cornerstone Investors”.
For those who are directly and/or indirectly interested in 10% or more of the nominal value of
any class of share capital carrying rights to vote in all circumstances at general meeting of any other
member of our Group, see “Appendix VI—Statutory and General Information—Further Information
about Our Directors and Substantial Shareholders.”
Save as disclosed herein, our Directors are not aware of any person who will, immediately
following the completion of the Global Offering (assuming that the Over-allotment Option is not
exercised and no other changes are made to the issued share capital of our Company between the
Latest Practicable Date and the Listing), have any interest and/or short position in the Shares or
underlying Shares of our Company which will be required to be disclosed to our Company and the
Stock Exchange pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is,
directly or indirectly interested in 10% or more of the nominal value of any class of share capital
carrying rights to vote in all circumstances at general meeting of our Company or any other member of
our Group.
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OVERVIEW
The Board will consist of seven Directors, including two executive Directors, two
non-executive Directors and three independent non-executive Directors. The Directors serve for a term
of three years and shall be subject to re-election upon retirement. The independent non-executive
Directors shall not hold office for more than six consecutive years pursuant to the relevant PRC laws
and regulations. The Board is responsible for and has the general power over the management and
operation of our business, including determining our business strategies and investment plans,
implementing resolutions passed at our general meetings, and exercising other powers, functions and
duties as conferred by the Articles of Association. The Board also assumes the responsibilities for
developing and reviewing the policies and practices of the Company on corporate governance, risk
management, internal control and compliance with legal and regulatory requirements.
The senior management currently consists of three members who are responsible for our
day-to-day management and operation.
DIRECTORS
Name Age Position Responsibilities
Date of first
appointment as a
Director
Date of joining
the Group
Dr. Zhang Shilong
(ੵ˰Ꮂ) ............. 6 0 Executive Director,
Chairman of the
Board and General
Manager
Responsible for the
overall strategic
planning of our Group
and supervising and
overseeing the
management of our
business operations
January 2007 January 2007
Ms. Zhang Qin
(
ੵා) ............... 5 6 Executive Director,
Deputy Chairwoman
of the Board, Deputy
General Manager
and Secretary to the
Board
Responsible for the
overall management
and participating in
major decisions on
our Group’s business
operations
January 2007 January 2007
Mr. Lin Lin
(
؍؍5 3 Non-executive
Director
Responsible for
providing advice and
making
recommendations to
the Board
January 2007 January 2007
Ms. Liu Ming (
׼5 6 Non-executive
Director
Responsible for
providing advice and
making
recommendations to
the Board
September 2025 January 2007
Dr. Du Meijie
(
௫) ............. 5 0 Independent
Non-executive
Director
Responsible for
supervising and
offering independent
judgment to the Board
September 2024 September
2024
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DIRECTORS AND SENIOR MANAGEMENT
Name Age Position Responsibilities
Date of first
appointment as a
Director
Date of joining
the Group
Ms. Tang Chunlin
(؍݆ࡥ4 2 Independent
Non-executive
Director
Responsible for
supervising and
offering independent
judgment to the Board
September 2024 September
2024
Mr. Chan Yik Pun
(
ⅳۯ4 3 Independent
Non-executive
Director
Responsible for
supervising and
offering independent
judgment to the Board
September 2025
(1) Listing Date
(1) The appointment will become effective upon the Listing Date.
The following table sets forth the key information about the Directors as at the Latest
Practicable Date.
Executive Directors
Dr. Zhang Shilong ( ੵ˰Ꮂ), aged 60, has served successively as a Director and the chairman
of the Board, while concurrently holding the position of general manager of the Company since
January 2007. He is responsible for the overall strategic planning and supervising and overseeing the
management of our business operations. Dr. Zhang currently holds various positions in our
subsidiaries. He has almost 30 years of experience in the analog IC industry. Dr. Zhang is also a cousin
of Ms. Zhang.
Dr. Zhang obtained a doctorate degree with a major in mechanical engineering and a minor in
electrical and computer engineering from the University of Arizona in the United States in May 1999.
Ms. Zhang Qin (
ੵා), aged 56, has served successively as a Director and deputy chairwoman
of the Board, while concurrently holding the position of deputy general manager of the Company since
January 2007. She has also been serving as the secretary to the Board since April 2012. Ms. Zhang
primarily assists Dr. Zhang in the overall management and participating in major decisions on our
Group’s business operations. Ms. Zhang currently holds various positions in our subsidiaries. She has
approximately 30 years of experience in electronic and electrical technology and enterprise
management. Ms. Zhang is also a cousin of Dr. Zhang.
Ms. Zhang obtained a bachelor’s degree of engineering from Beijing Technology and Business
University (
̏ԯʈਠɽኪ) (formerly known as Beijing Institute of Light Industry ( ̏ԯჀʈุኪ৫)) in
the PRC in July 1993. In September 2013, Ms. Zhang obtained the board secretary qualification
certificate from the Shenzhen Stock Exchange.
On May 22, 2019, the spouse of Ms. Zhang mistakenly sold 2,000 A Shares of the Company at
RMB97.01 per Share through centralized bidding while placing an unrelated sell order from a
securities account in which Ms. Zhang’s personal holdings of the Company’s Shares were maintained
together with her other securities. Immediately upon realizing the error, he repurchased the same
number of Shares on the same day at RMB97.02 per Share to restore the original holding position.
While the subsequent purchase technically constitutes short-swing trading, such transaction was made
solely for the purpose of rectifying the initial inadvertent sale and did not involve any intent to profit
from short-term market movement. Upon becoming aware of the incident, Ms. Zhang promptly
reported the matter to the Company, and the Company published an explanation and apology
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DIRECTORS AND SENIOR MANAGEMENT
announcement on May 22, 2019, following which the ChiNext Companies Supervision Department of
the SZSE issued a supervision letter to her on May 27, 2019 in relation to the aforementioned incident.
Considering (i) as advised by the PRC Legal Adviser, the supervision letter issued to Ms. Zhang did
not constitute an administrative penalty or public censure under the applicable securities laws and
regulations of the PRC, and would not affect the suitability of Ms. Zhang to serve as an executive
Director and a senior management under the PRC Company Law; (ii) the incident did not involve any
intentional misconduct or fraudulent intent by Ms. Zhang; and (iii) as of the Latest Practicable Date,
Ms. Zhang has not been imposed any other administrative penalties or involved in any investigation,
hearing or proceeding brought or instituted by CSRC or SZSE in connection with the above incident,
nothing has come to the Joint Sponsors’ attention that would reasonably cause them to cast doubt on
suitability of Ms. Zhang to serve as a Director pursuant to Rules 3.08 and 3.09 of the Listing Rules.
Non-executive Directors
Mr. Lin Lin (
؍؍)aged 53, has been serving as a Director of the Company since January
2007 and is primarily responsible for providing advice and making recommendations to the Board. He
is currently also a director of SG MICRO (HK) LIMITED.
Mr. Lin graduated with a major in tourism economics and management from Beijing
International Studies University (
̏ԯୋɚ̮਷Ⴇኪ৫) in June 1992.
In October 2025, Mr. Lin filed a pre-disclosure share reduction plan in respect of up to
7,887,125 A Shares. During the period from November 10, 2025 to January 28, 2026, he disposed of
an aggregate of 7,930,745 A Shares, inadvertently exceeding the disclosed maximum by 43,620
A Shares as a result of his failure to verify the then-available reduction quota in his securities account
prior to effecting the relevant trades. Upon becoming aware of the excess disposal on January 28,
2026, Mr. Lin promptly notified the Company, voluntarily repurchased 43,700 A Shares on
January 30, 2026 and remitted the corresponding price difference to the Company on February 2, 2026,
following which the Beijing Bureau of the CSRC issued a caution letter to him on February 11, 2026 in
relation to the aforementioned incident. Considering (i) as advised by the PRC Legal Adviser, the
caution letter issued to Mr. Lin did not constitute an administrative penalty or public censure under the
applicable securities laws and regulations of the PRC, and would not affect the suitability of Mr. Lin to
serve as a non-executive Director under the PRC Company Law; (ii) the incident did not involve any
intentional misconduct or fraudulent intent by Mr. Lin; and (iii) as of the Latest Practicable Date,
Mr. Lin has not been imposed any other administrative penalties or involved in any investigation,
hearing or proceeding brought or instituted by CSRC or SZSE in connection with the above incident,
nothing has come to the Joint Sponsors’ attention that would reasonably cause them to cast doubt on
suitability of Mr. Lin to serve as a Director pursuant to Rules 3.08 and 3.09 of the Listing Rules.
In response to the non-compliance incident involving Ms. Zhang in May 2019, the Company
implemented internal control measures comprising: (a) regulatory training on securities trading rules
and compliance obligations; (b) enhanced reporting requirements for key personnel to report securities
account details and shareholding changes; and (c) monitoring of shareholding changes through the
system of China Securities Depository and Clearing Corporation (“ CSDC”). These measures were
designed to ensure awareness of regulatory requirements and facilitate post-trade monitoring, but did
not incorporate a mandatory pre-trade verification mechanism. Mr. Lin’s non-compliance in January
2026 arose from his personal failure to verify the then-available reduction quota in his securities
account prior to effecting the relevant trades, which constituted an individual operational oversight that
the then existing internal control measures could not fully eliminate.
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DIRECTORS AND SENIOR MANAGEMENT
Following this incident and since January 30, 2026, the Company has further enhanced these
measures by (a) requiring Directors and senior management to report to the Company prior to effecting
any Share transactions, which may only be executed after the Company has verified and confirmed the
available quota; (b) providing supplementary compliance training specifically focusing on pre-trade
verification procedures; and (c) conducting regular inquiries through the CSDC system to monitor the
shareholdings and changes in tradable Shares of Directors and senior management, and maintaining
adequate communication with them.
The Company is of the view that the enhanced internal control measures are adequate and
effective in preventing the recurrence of similar incidents. The Company will continue to review these
measures to ensure their ongoing effectiveness. The internal control consultant has reviewed the
securities trading policy and internal control corrective measures implemented by the Company, and no
major defects have been identified.
Ms. Liu Ming (
׼)aged 56, has been serving as a customer service representative of the
Company since January 2007. She served as an employee representative supervisor in the Company
from August 2018 to September 2025 and was appointed as the non-executive Director of the
Company in September 2025. Ms. Liu is primarily responsible for providing advice and making
recommendations to the Board.
Ms. Liu obtained a bachelor’s degree of engineering from Beijing Institute of Technology (
̏ԯ
ଣʈɽኪ) in the PRC in July 1993.
Independent Non-executive Directors
Dr. Du Meijie (௫), aged 50, was appointed as the independent Director in
September 2024. She is primarily responsible for supervising and offering independent judgment to the
Board.
From September 2015 to August 2018, Dr. Du served as an independent director of Fujian Start
Group Co., Ltd. (
ʮ̡)( “ Fujian Start ”), a company listed on the Shanghai
Stock Exchange (stock code: 600734). From December 2015 to February 2023, Dr. Du served as an
independent director of BWT Beijing Ltd. (
ʮ̡). From September 2017
to September 2023, she served as an independent director of BeiJing Certificate Authority Co., Ltd. ( ̏
ʮ̡), a company listed on the Shenzhen Stock Exchange (stock code: 300579).
From November 2019 to March 2023, Dr. Du served as an independent director of Beijing Shendao
Technology Co., Ltd. (
ʮ̡). From June 2020 to July 2023, she served as an
independent director of Greatsoft Co., Ltd. (ʮ̡). She subsequently took the
position of independent director of Shandong Bestcomm Pharmaceutical Company Limited. (ϵፕ
ʮ̡) from August 2022 to April 2024. Dr. Du has also been serving as an independent
director in Maigao Securities Co., Ltd. (ப΂ʮ̡) since January 2023. Additionally,
Dr. Du has been working at Beijing Language University ( ̏ԯႧԊɽኪ), serving as the head of the
Accounting Department and associate professor.
Dr. Du obtained a bachelor’s degree of economics from Renmin University of China ( ʕ਷ɛ͏
ɽኪ) in the PRC in July 1997 and a master’s degree of management from Beijing Technology and
Business University in March 2000, respectively. She also obtained a doctorate degree of management
from Renmin University of China in June 2004 and completed her postdoctoral fellowship at Peking
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DIRECTORS AND SENIOR MANAGEMENT
University ( ̏ԯɽኪ) in January 2013. Dr. Du obtained the qualifications of a PRC Certified Public
Accountant (ࢪࠇfrom the Ministry of Finance Certified Public Accountant Examination
Committee (ึ) in May 2000, a Certified Internal Auditor in the
United States in November 2000, and a Certified Management Accountant in the United States in
March 2020, respectively. Dr. Du was recognized as a National Accounting Leading Talent (Academic
Category) by the Ministry of Finance in November 2016.
In October 2021, the Fujian Bureau of the CSRC issued a regulatory warning letter to Fujian
Start regarding inaccuracies in its 2017 annual report, which primarily arose from revenue and cost
misstatements by its subsidiary Shenzhen Xingfei Technology Co., Ltd. (
ʮ̡)
(“Shenzhen Xingfei”). Specifically, Shenzhen Xingfei acted as a pass-through intermediary in mobile
phone resale transactions without assuming principal risks, taking physical custody of, or inspecting
the products, and improperly recognized the full transaction amount as revenue. The chairman, two
presidents, and CFO of Fujian Start were held primarily responsible for such violations. In
February 2023, the Shanghai Stock Exchange issued a regulatory warning letter to Dr. Du and two
other former directors in connection with the same incident, determining that they failed to take
effective measures to ensure compliance, while Dr. Du had resigned from her directorship in 2018. She
confirmed that she received no benefit from the misstatements and resigned due to concerns over
corporate governance and information transparency, as she lacked access to conduct on-site
verification of subsidiary operations.
Our Directors consider that Dr. Du remains competent to fulfil her duties of care and diligence
and is suitable to serve as an independent non-executive Director, based on the following: (i) the PRC
Legal Adviser has confirmed that the regulatory warning letter does not constitute an administrative
penalty or public censure under the applicable laws, regulations or rules on the PRC, and does not
disqualify Dr. Du from acting as a director under the PRC Company Law; (ii) Dr. Du served in a
non-executive capacity without involvement in day-to-day management and had no prior knowledge of
the misstatements given her limited access to subsidiary information; (iii) the incident did not involve
any integrity concerns, dishonesty or fraud on the part of Dr. Du; (iv) no regulatory authority has
disqualified Dr. Du from acting as an independent director of Fujian Start or any other listed issuers
because of this incident; and (v) Dr. Du has not experienced any similar incident since then. Based on
the independent due diligence conducted by the Joint Sponsors and the PRC Legal Adviser’s view
above, nothing has come to the Joint Sponsors’ attention that would cause them to disagree with the
Directors’ view above.
Ms. Tang Chunlin (
؍݆ࡥ)aged 42, was appointed as the independent Director in
September 2024. She is primarily responsible for supervising and offering independent judgment to the
Board.
Ms. Tang has over 15 years of experience in law. From April 2009 to May 2020, she served as
a trainee lawyer and lawyer at Rongbo Law Firm in Beijing (
הFrom June 2020
to June 2023, she served as a partner at Zeguan Law Firm in Beijing (הSince
2023, Ms. Tang has been serving as a partner at Zhihong Law Firm in Beijing (ה.)
She has also been serving as an independent director at Joyvio Food Co., Ltd. (ʮ̡)
(a company listed on the Shenzhen Stock Exchange (stock code: 300268)) since February 2024.
Ms. Tang obtained a bachelor’s degree in law from University of Science and Technology
Beijing (Ҧɽኪ) in January 2008 and a master’s degree in business administration from China
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DIRECTORS AND SENIOR MANAGEMENT
University of Political Science and Law (ɽኪ) in December 2024 in the PRC, respectively.
Ms. Tang obtained the legal professional qualification certificate issued by the Ministry of Justice in
February 2009 and the lawyer’s practice certificate issued by the Beijing Municipal Bureau of Justice
(
҅) in March 2015, respectively. She was awarded the title of Advanced Individual of
Beijing Judicial Administration System (ӻ䕠΋ࣉ㽗ɛ) for the years from 2018 to 2022
jointly issued by the Beijing Municipal Bureau of Justice and the Beijing Municipal Human Resources
and Social Security Bureau (
ღ҅) in November 2022.
Mr. Chan Yik Pun(ⅳۯ)aged 43, was appointed as the independent non-executive Director
in September 2025, with effect from the Listing. He is primarily responsible for supervising and
offering independent judgment to the Board.
Mr. Chan is currently the head of finance of Tianfang Jincheng (HK) Limited. Since February
2024, he has been serving as an independent non-executive director of China Suntien Green Energy
Corporation Limited (
ʮ̡) (a company listed both on the Shanghai Stock
Exchange (stock code: 600956) and the Hong Kong Stock Exchange (stock code: 00956)). He has also
been serving as the company secretary of Beijing Biostar Pharmaceuticals Co., Ltd. (
ي
ʮ̡) (a company listed on the Hong Kong Stock Exchange (stock code: 02563)) since
October 2024. He has been serving as an independent non-executive director of Yunhong Guixin
Group Holdings Limited (
ʮ̡) (a company listed on the Hong Kong Stock
Exchange (stock code: 08349)) since January 26, 2026 and as the joint company secretary of
Homeland Interactive Technology Ltd. (
ʮ̡) (a company listed on the Hong Kong
Stock Exchange (stock code: 03798)) since February 28, 2026. Mr. Chan has over 19 years of
experience in financial accounting. He successively served as the financial controller of Tianfang
Hospitality Management Pte. Ltd., company secretary of Natural Food International Holding Limited,
the financial controller in the hotel division of Sun Hung Kai Real Estate Agency Limited, the financial
controller and the company secretary of Zall Group Ltd., the deputy audit manager of Ernst & Young
(Shanghai)/Ernst & Young (Australia), and the senior auditor of Grant Thornton LLP.
Mr. Chan obtained a bachelor’s degree in accounting from Monash University in Australia in
December 2004. He is a certified public accountant in both Hong Kong and Australia.
SENIOR MANAGEMENT
The following table sets forth the key information about the senior management of the Company.
Name Age Position Responsibilities
Date of first
appointment as a
senior management
member
Date of joining
the Group
Dr. Zhang Shilong
(ੵ˰Ꮂ) ............. 6 0 Executive Director,
Chairman of the
Board and General
Manager
Responsible for the
overall strategic
planning of our Group
and supervising and
overseeing the
management of our
business operations
January 2007 January 2007
Ms. Zhang Qin
(
ੵා) ............... 5 6 Executive Director,
Deputy Chairwoman
of the Board, Deputy
General Manager
and Secretary to the
Board
Responsible for the
overall management
and participating in
major decisions on
our Group’s business
operations
January 2007 January 2007
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DIRECTORS AND SENIOR MANAGEMENT
Name Age Position Responsibilities
Date of first
appointment as a
senior management
member
Date of
joining
the
Group
Ms. Zhang Xuan ( ੵഘ) ........ 5 0 Finance Director Responsible for
overseeing the
financial management
of our Group and
providing support for
the Board
August 2011 August
2011
For the biographical details of Dr. Zhang and Ms. Zhang, see “—Directors” above.
Ms. Zhang Xuan ( ੵഘ), aged 50, joined the Group in August 2011 and currently served as the
finance director of the Company, responsible for overseeing the financial management of our Group.
Ms. Zhang currently serves as the head of finance or director across a number of our
subsidiaries. Prior to joining our Group, Ms. Zhang worked at Beijing Jingdu Tianhuahui Accountant
Firm Co., Ltd. (
ʮ̡) from July 1998 to March 2011, where she served as a
senior audit manager. She then worked as a senior financial consultant at Hongyi Investment Co., Ltd.
(
ʮ̡) from April 2011 to July 2011.
Ms. Zhang obtained a bachelor’s degree of economics from the Central University of Finance
and Economics ( ʕ̯ৌ຾ɽኪ) in the PRC in July 1998. She obtained the qualification of PRC
Certified Public Accountant from the Chinese Institute of Certified Public Accountants in January
2012 and was recognized as a senior accountant by the Beijing Senior Professional Qualification
Evaluation Committee (
ึ) in October 2018.
GENERAL
As of the Latest Practicable Date, to the best of the knowledge, information and belief of the
Directors after having made all reasonable enquiries,
(i) save as disclosed above, none of the Directors or members of the senior management has
held any directorship in any public company the securities of which are listed on any
securities market in Hong Kong or overseas during the three years immediately preceding
the date of this prospectus;
(ii) save as disclosed above, none of the Directors or members of the senior management was
related to any other Directors and members of the senior management;
(iii) save as disclosed in “Statutory and General Information” set out in Appendix VI to this
prospectus, none of the Directors or general manager of the Company held any interest in
the Shares which would be required to be disclosed pursuant to Part XV of the Securities
and Futures Ordinance; and
(iv) there was no additional matter with respect to the appointment of the Directors that needs
to be brought to the attention of the Shareholders, and there was no additional information
relating to the Directors that is required to be disclosed pursuant to Rules 13.51(2)(h) to
(v) of the Listing Rules.
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DIRECTORS AND SENIOR MANAGEMENT
CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Listing Rules
As of the Latest Practicable Date, none of our Directors and their respective close associates
had any interest in any business which competes or is likely to compete, either directly or indirectly
with our Group’s business which would require disclosure under Rule 8.10 of the Listing Rules.
Rule 3.09D of the Listing Rules
Each of our Directors confirmed that he or she (i) had obtained the legal advice referred to
under Rule 3.09D of the Listing Rules in September 2025, and (ii) understood his or her obligations as
a director of a listed issuer under the Listing Rules.
Rule 3.13 of the Listing Rules
Each of our independent non-executive Directors had confirmed (i) his or her independence as
regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules; (ii) that he or she had
no past or present financial or other interest in the business of the Company or its subsidiary or any
connection with any core connected person of the Company under the Listing Rules as of the Latest
Practicable Date; and (iii) that there were no other factors that may affect his or her independence at
the time of his or her appointments. Each of our independent non-executive Directors will inform us
and the Stock Exchange as soon as practicable if there is any subsequent change of circumstances
which may affect his or her independence.
JOINT COMPANY SECRETARIES
The Company has appointed Ms. Zhang and Ms. Yeung Siu Wai Kitty (
เʃᅆ) as our joint
company secretaries.
Ms. Yeung Siu Wai Kitty ( เʃᅆ), is a senior manager of company secretarial services of
Tricor Services Limited (a member of Vistra group). Ms. Yeung has over 15 years of experience in the
corporate secretarial field. She has been providing professional corporate services to Hong Kong listed
companies as well as private and offshore companies. Ms. Yeung currently serves as the company
secretary of Phancy Group Co., Ltd. (
ʮ̡) (formerly known as Beijing
Fourth Paradigm Technology Co., Ltd. (ʮ̡)) (a company listed on the
Hong Kong Stock Exchange (stock code: 06682)), and the joint company secretary of each of Deepexi
Technology Co., Ltd. (
ʮ̡) (a company listed on the Hong Kong Stock Exchange
(stock code: 01384)), Shanghai Able Digital Science&Tech Co., Ltd. (ࠢ
ʮ̡) (a company listed on the Hong Kong Stock Exchange (stock code: 2687)), China Everbright
Bank Company Limited (ʮ̡) (a company listed on the Hong Kong Stock
Exchange (stock code: 06818)), Shanghai Xizhi Technology Co., Ltd. (ʮ̡)( a
company listed on the Hong Kong Stock Exchange (stock code: 01879)) and China CITIC Bank
Corporation Limited (
ʮ̡) (a company listed on the Hong Kong Stock Exchange
(stock code: 00998)). Ms. Yeung is a chartered secretary, a chartered governance professional and an
associate of both The Hong Kong Chartered Governance Institute and The Chartered Governance
Institute in the United Kingdom.
Ms. Yeung received her bachelor’s degree of social science in administration and public
management from City University of Hong Kong (
̹ɽኪ) in November 2006 and her master’s
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DIRECTORS AND SENIOR MANAGEMENT
degree in corporate governance from Hong Kong Metropolitan University (ಥேึɽኪ) (formerly
known as The Open University of Hong Kong (ಥʮකɽኪ)) in August 2017.
BOARD COMMITTEES
We have established four Board Committees in accordance with the relevant PRC laws and
regulations, the Articles of Association and the Corporate Governance Code, namely the Audit
Committee, the Nomination Committee, the Remuneration and Appraisal Committee and the Strategy
Committee.
Audit Committee
We have established an Audit Committee with written terms of reference in compliance with
Rule 3.21 of the Listing Rules and paragraph D.3 of the Corporate Governance Code. The Audit
Committee consists of three Directors, namely Dr. Du Meijie, Ms. Tang Chunlin and Mr. Lin Lin, with
Dr. Du Meijie currently serving as the chairperson. Dr. Du Meijie has the appropriate professional
experiences as required under Rules 3.10(2) and 3.21 of the Listing Rules. The primary duties of the
Audit Committee include, but are not limited to, the following:
(i) proposing the appointment or change of external auditors to the Board, monitoring the
independence of external auditors and evaluating their performance;
(ii) examining the financial information of the Company and reviewing financial reports and
statements of the Company;
(iii) examining the financial reporting system, the risk management and internal control system
of the Company, overseeing their rationality, efficiency and implementation and making
recommendations to the Board; and
(iv) dealing with other matters that are authorized by the Board.
Nomination Committee
We have established a Nomination Committee with written terms of reference in compliance
with Rule 3.27A of the Listing Rules and paragraph B.3 of the Corporate Governance Code. The
Nomination Committee consists of three Directors, namely Ms. Tang Chunlin, Dr. Du Meijie and
Dr. Zhang, with Ms. Tang Chunlin currently serving as the chairperson. The primary duties of the
Nomination Committee include, but are not limited to, the following:
(i) conducting extensive search and providing the Board with suitable candidates for the
Directors, general managers and other members of the senior management;
(ii) reviewing the structure, size and composition of the Board (including but not limited to,
gender, age, cultural and educational background, ethnicity, skills, knowledge and
experience) at least annually, assisting the Board in maintaining a board skills matrix and
making recommendations on any proposed changes to the Board to complement the
Company’s corporate strategy;
(iii) researching and developing standards and procedures for the election of the Board
members, general managers and members of the senior management, and making
recommendations to the Board;
(iv) assessing the independence of the independent non-executive Directors;
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DIRECTORS AND SENIOR MANAGEMENT
(v) supporting the Company’s regular evaluation of the Board’s performance; and
(vi) dealing with other matters that are authorized by the Board.
Remuneration and Appraisal Committee
We have established a Remuneration and Appraisal Committee with written terms of reference
in compliance with Rule 3.25 of the Listing Rules and paragraph E.1 of the Corporate Governance
Code. The Remuneration and Appraisal Committee consists of three Directors, namely Dr. Du Meijie,
Ms. Tang Chunlin and Mr. Lin Lin, with Dr. Du Meijie currently serving as the chairperson. The
primary duties of the Remuneration and Appraisal Committee include, but are not limited to, the
following:
(i) advising the Board on the overall remuneration plan and structure of the Directors and
senior management and the establishment of transparent and formal procedures for
determining the remuneration policy of the Company;
(ii) monitoring the implementation of the remuneration system of the Company;
(iii) making recommendations on the remuneration packages of the Directors and senior
management; and
(iv) dealing with other matters that are authorized by the Board.
Strategy Committee
We have established the Strategy Committee with written terms of reference. The Strategy
Committee consists of three Directors, namely Dr. Zhang, Ms. Tang Chunlin and Dr. Du Meijie, with
Dr. Zhang currently serving as the chairperson. The primary duties of the Strategy Committee include,
but are not limited to, the following:
(i) reviewing the Company’s long-term development strategies, major investment decisions
and other important matters affecting the Company’s development;
(ii) providing recommendations with respect to key strategic initiatives;
(iii) assisting the Board in establishing the strategic planning process, identifying and
addressing organizational challenges and evaluating strategic alternatives; and
(iv) dealing with other matters that are authorized by the Board.
CORPORATE GOVERNANCE CODE
The Company is committed to achieving a high standard of corporate governance with a view
to safeguarding the interests of our Shareholders. To accomplish this, the Company intends to comply
with the Corporate Governance Code set out in Appendix C1 to the Listing Rules and the Model Code
for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 to the Listing Rules
after the Listing.
Pursuant to code provision C.2.1 of Part 2 of the Corporate Governance Code, companies listed
on the Stock Exchange are expected to comply with, but may choose to deviate from the requirement
that the responsibilities between the chairman of the board and the general manager should be
segregated and should not be performed by the same individual. We do not have a separate chairman
of the board and general manager, and Dr. Zhang currently performs these two roles. The Board
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DIRECTORS AND SENIOR MANAGEMENT
believes that vesting the roles of both the chairman of the board and general manager in the same
person has the benefit of ensuring consistent leadership within the Group and enables more effective
and efficient overall strategic planning for the Group. The Board considers that the balance of power
and authority for the present arrangement will not be impaired and this structure will enable the
Company to make and implement decisions promptly and effectively. The Board will continue to
review and consider splitting the roles of the chairman of the board and the general manager of the
Company if and when it is appropriate taking into account the circumstances of the Group as a whole.
Save as disclosed above, the Company intends to comply with all code provisions under the
Corporate Governance Code after the Listing.
BOARD DIVERSITY POLICY
We have adopted the board diversity policy which sets out the objective and approach for
achieving and maintaining the diversity of the Board in order to enhance its effectiveness. In
accordance with the board diversity policy, the Company seeks to achieve board diversity by taking
into account a number of factors, including but not limited to gender, age, cultural and educational
background, professional experience, skills, knowledge and/or length of service. The ultimate selection
of Board candidates will be based on merit and potential contribution to the Board having due regard
to the benefits of diversity on the Board and also the specific needs of the Company without focusing
on a single diversity aspect. The Directors have a balanced mix of knowledge and skills, including
overall management and strategic development as well as knowledge and experience in different areas.
They obtained degrees in various areas including engineering, management, accounting and law.
Furthermore, the Board has a diverse age and gender representation. Our Board comprises four female
Directors and three male Directors, ranging from 41 years old to 59 years old.
With regards to gender diversity on the Board, we recognize the particular importance of
gender diversity. We have taken and will continue to take steps to promote and enhance gender
diversity at all levels of the Company, including but without limitation at the Board and senior
management levels. We will maintain a focus on gender diversity when recruiting staff at the mid to
senior level so as to develop a pipeline of potential female successors to the Board. The Group will
also identify and select several female individuals with a diverse range of skills, experience and
knowledge in different fields from time to time, and maintain a list of such female individuals who
possess qualities to become the Board members, which will be reviewed by our nomination committee
periodically to maintain gender diversity of the Board. Taking into account our existing business model
and specific needs as well as the different background of the Directors, the composition of the Board
satisfies our board diversity policy.
Upon the Listing, the Nomination Committee will from time to time discuss and agree on
expected goals to ensure board diversity, and review and, where necessary, update the board diversity
policy to ensure that the policy remains effective. The Company will disclose the biographical details
of each Director and report on the implementation of the board diversity policy (including whether we
have achieved board diversity) in its annual corporate governance report.
DIRECTORS’ REMUNERATION AND REMUNERATION OF THE FIVE HIGHEST-PAID
INDIVIDUALS
The Directors and senior management members who receive remuneration from the Company
are paid in the forms of salaries, wages, bonus, pension scheme contributions and share based
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DIRECTORS AND SENIOR MANAGEMENT
compensation. The independent non-executive Directors receive compensation based on their
responsibilities. The remuneration of the Directors and senior management members is determined
with reference to the remuneration paid by comparable companies and the achievement of major
operating indicators of the Company.
The aggregate amount of remuneration (including salaries, wages, bonus, pension scheme
contributions and share based compensation) paid to the Directors for the three years ended
December 31, 2023, 2024 and 2025 amounted to RMB2.3 million, RMB2.6 million and
RMB2.7 million, respectively.
The aggregate amount of remuneration (including salaries, wages, bonus, pension scheme
contributions and share based compensation) incurred by the five highest-paid individuals of the Group
(excluding Directors) for the three years ended December 31, 2023, 2024 and 2025 amounted to
RMB20.8 million, RMB20.0 million and RMB23.0 million, respectively .
Under the current compensation arrangement, we estimate the total compensation before
taxation to be accrued to the Directors for the year ending December 31, 2026 to be approximately
RMB2.2 million. The actual remuneration of Directors in 2026 may be different from the expected
remuneration.
We confirm that during the Track Record Period, no remuneration was paid by the Company
to, or receivable by, our Directors or the five highest paid individuals as an inducement to join or upon
joining the Company or as compensation for loss of office in connection with the management
positions of the Company or any subsidiary of the Company.
During the Track Record Period, none of our Directors waived any remuneration. Save as
disclosed above, no other payments have been paid, or are payable, by the Company or our subsidiary
to our Directors or the five highest-paid individuals during the Track Record Period.
COMPLIANCE ADVISER
The Company has appointed Red Solar Capital Limited as our Compliance Adviser in
compliance with Rules 3A.19 of the Listing Rules. The Compliance Adviser will provide us with
guidance and advice as to compliance with the Listing Rules and other applicable laws, rules, codes
and guidelines. Pursuant to Rule 3A.23 of the Listing Rules, the Compliance Adviser will advise the
Company in certain circumstances including:
(i) before the publication of any regulatory announcement, circular or financial report;
(ii) where a transaction, which might be a notifiable or connected transaction, is contemplated,
including share issues, sales or transfers of treasury shares and share repurchases;
(iii) where we propose to use the proceeds from the Global Offering in a manner different from
that detailed in this prospectus or where our business activities, developments or results
deviate from any forecast, estimate or other information in this prospectus; and
(iv) where the Stock Exchange makes an inquiry to the Company in accordance with
Rule 13.10 of the Listing Rules.
Pursuant to Rule 3A.24 of the Listing Rules, the Compliance Adviser will, on a timely basis,
inform the Company of any amendment or supplement to the Listing Rules that are announced by the
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DIRECTORS AND SENIOR MANAGEMENT
Stock Exchange. The Compliance Adviser will also inform the Company of any new or amended law,
regulation or code in Hong Kong applicable to us, and advise us on the continuing requirements under
the Listing Rules and applicable laws and regulations.
The term of the appointment will commence on the Listing Date and is expected to end on the
date on which the Company complies with Rule 13.46 of the Listing Rules in respect of our financial
results for the first full financial year commencing after the Listing.
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FUTURE PLANS AND USE OF PROCEEDS
FUTURE PLANS
See “Business—Our Strategies” for more details of our future business plans and strategies.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$4,499.9 million, after deducting estimated underwriting commissions, fees and expenses payable
by us in connection with the Global Offering, assuming the maximum Offer Price of HK$85.20 per H
Share, and assuming the Over-allotment Option is not exercised.
In line with our strategies, we intend to use the net proceeds for the following purposes, subject
to changes in light of our evolving business needs and changing market conditions:
 Approximately 60.0% of the net proceeds, or HK$2,699.9 million, is expected to be used
to enhance our R&D capabilities and expand our product portfolio over the next five
years. We believe such investment will enable us to capture the core trends and application
scenarios driving the evolution and value growth of analog semiconductor technologies,
such as automotive intelligence and electrification, networking & computing, industrial
applications, embodied AI, and edge AI. We will continue to develop our product
offerings covering the automotive, server, industrial energy, and consumer electronics
sectors, further enrich our product portfolio, and strengthen our proprietary process R&D
and iteration capabilities. Specifically, we will focus on R&D of automotive-grade ICs,
server power management ICs, sensors, BMS, high-performance audio ICs, high-speed
interface ICs, and driver ICs, while continuously advancing the development and
upgrading of our proprietary process technologies.
In particular, over the next five years, our strategic R&D roadmap is aligned with the key
focus areas and the net proceeds will be allocated accordingly. We will significantly
expand our portfolio of automotive-grade ICs, targeting the development of approximately
800 new automotive-grade ICs. Concurrently, we will bolster R&D investment in our
server power management ICs, focusing on R&D of multiphase power architecture,
controllers, and DrMOS devices. We will continue to grow our existing sensor product
portfolios while diversifying into new categories. Building on our existing battery
management and ADC/DAC products, we will also develop multiple series of high-
performance BMS ICs to address a wide range of application requirements, including
electric vehicles, energy storage systems, industrial, networking & computing, and
consumer electronics. We will also intensify R&D investment in our proprietary process
technologies. Our goal is for over 30% of our new products to adopt these optimized
process technologies within this five-year period. Furthermore, we will accelerate the
development and iteration of high-performance audio ICs, high-speed interface ICs, and
driver ICs tailored for various application scenarios.
(i) approximately 48.0% of the net proceeds, or HK$2,159.9 million will be used to
retain, expand and strengthen our R&D team. According to Frost & Sullivan, the
semiconductor industry is a talent-intensive industry. As of December 31, 2025, our
R&D team comprised 1,335 research and engineering personnel, accounting for
approximately 72.8% of our total number of employees. In response to the growing
demand from downstream applications adopting our products and the ongoing
advancement of analog semiconductor technologies, we plan to attract and retain over
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FUTURE PLANS AND USE OF PROCEEDS
500 R&D professionals annually with expertise in chip design and process
development, thereby continuously enhancing our R&D capabilities as well as our
proprietary process development capabilities. Specifically, we require our candidates
to have a master’s degree or above, with at least five years of rich experience in R&D
of automotive-grade ICs, server power management ICs, sensors, BMS, high-
performance audio ICs, high-speed interface ICs, and driver ICs and process
development;
(ii) approximately 7.0% of the net proceeds, or HK$315.0 million, will be used to cover
wafer fabrication, packaging and testing costs and related expenses associated with
R&D; and
(iii) approximately 5.0% of the net proceeds, or HK$225.0 million, will be used to invest
in R&D infrastructure. Specifically, we plan to purchase (i) R&D software tools, such
as EDA software, and (ii) R&D-related equipment such as testing equipment and
probe stations.
 Approximately 26.0% of the net proceeds, or HK$1,170.0 million, is expected to be used
for strategic investment and/or acquisitions aimed at integrating industry resources. We
seek potential investment and acquisition opportunities worldwide to invest in or acquire
companies in signal chain ICs, power management ICs, sensors and other synergistic
companies to further enrich our product portfolio.
Our acquisition strategy primarily targets companies within the analog and mixed-signal
IC sectors. We are seeking targets with expertise in areas that include, but are not limited
to, (i) signal chain analog ICs, such as OPA, comparators, audio/video ICs, analog
switches, AD/DA converters, small logic, AFE, RF, Clocks, PLLs, and high-speed
interfaces, SerDes; (ii) power management ICs, such as AC/DC, DC/DC, LDOs, drivers,
MOSFET, GaN/SiC, ESD/TVS, battery charger & protection ICs, and AMOLED power
supplies; and (iii) temperature, pressure, magnetic, and other related sensors. According to
Frost & Sullivan, it is estimated that there are over 50 available targets in the markets.
Beyond the targets’ product portfolio and technology, we place a critical emphasis on the
core competence and stability of the targets’ R&D team and their corporate culture. Over
the next five years, we will be actively pursuing investment and acquisition opportunities.
We believe that such industry resource integration would strengthen our competitive edge,
accelerate our growth and enhance our market position. As of the Latest Practicable Date,
we have not negotiated with any specific acquisition targets nor identified any such
targets.
 Approximately 6.0% of the net proceeds, or HK$270.0 million, is expected to be used for
expanding overseas sales network, particularly enhancing sales and marketing capabilities
in Europe, Japan, South Korea, and Singapore over the next five years. Specifically:
(i) approximately 5.0% of the net proceeds, or HK$225.0 million, will be used to
strengthen our sales and marketing capabilities, expand our overseas customer base
by enhancing overseas sales and operation teams. This includes investing in sales and
service efforts to deepen relationships with existing customers and expand our
customer base overseas. We plan to recruit over 50 professionals for our sales and
operation teams in Europe, Japan, South Korea, and Singapore. Additionally, in
overseas markets, our overseas sales team will execute promotional campaigns to
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FUTURE PLANS AND USE OF PROCEEDS
directly connect with customers and participate in exhibitions, expos, and forums to
directly engage with potential customers; and
(ii) approximately 1.0% of the net proceeds, or HK$45.0 million, will be used to expand
and establish sales centers in Europe, Japan, South Korea, and Singapore to enhance
our localized development and customer service capabilities.
 Approximately 8.0% of the net proceeds, or HK$360.0 million, will be allocated to
working capital and general corporate purposes.
If the Over-allotment Option is exercised in full, the net proceeds that we will receive will be
approximately HK$5,181.7 million, assuming the maximum Offer Price of HK$85.20 per H Share. In
the event that the Over-allotment Option is exercised, we intend to apply the additional net proceeds to
the above purposes in the proportions stated above.
To the extent that our net proceeds are not sufficient to fund the purposes set out above, we
intend to fund the balance through a variety of means, including cash available on hand, bank loans
and other borrowings.
If the net proceeds of the Global Offering are not immediately used for the purposes described
above, to the extent permitted by the relevant laws and regulations, we will only deposit the net
proceeds into short-term interest-bearing accounts at licensed commercial banks and/or other
authorized financial institutions as defined under the Securities and Futures Ordinance or applicable
laws and regulations in other jurisdictions, as long as it is deemed to be in the best interests of the
Company. We will comply with all disclosure requirements under the Listing Rules if there is any
change to the above-proposed use of proceeds.
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CORNERSTONE INVESTORS
THE CORNERSTONE INVESTMENTS
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 for
or cause their designated entities (including qualified domestic institutional investor(s) (“ QDII(s)”) in
respect of GF Fund Management Co., Ltd., Harvest Global Investments Limited, ICBC Wealth
Management Co., Ltd., PSBC Wealth Management Co., Ltd. and Taikang Life Insurance Co., Ltd, as
approved by the relevant PRC authorities) to subscribe for such number of Offer Shares (rounded
down to the nearest whole board lot of 100 H Shares) which may be purchased at the Offer Price with
an aggregate amount of US$293.0 million (or approximately HK$2,295.5 million, calculated based on
the exchange rate set out in the section headed “Information about this Prospectus and the Global
Offering — Exchange Rate Conversion” in this prospectus) (exclusive of brokerage, SFC transaction
levy, AFRC transaction levy and Stock Exchange trading fee) (the “ Cornerstone Investment”).
Based on the Offer Price of HK$85.20 per Offer Share, being the maximum Offer Price, the
total number of Offer Shares to be subscribed for by the Cornerstone Investors (including those to be
subscribed through QDII(s)) would be 26,941,300. The table below reflects the shareholding
percentage immediately after the completion of the Global Offering assuming there is no other change
made to the issued share capital of the Company between the Latest Practicable Date and the Listing
(or the date of exercise of Over-allotment Option (where applicable)).
Assuming
the Over-allotment Option is not exercised Assuming the Over-allotment Option is exercised in full
Approximate % of the Offer
Shares
Approximate % of the total
issued share capital
Approximate % of the Offer
Shares
Approximate % of the total
issued share capital
49.89% 3.99% 43.38% 3.94%
The Company is of the view that, (i) the Cornerstone Investment 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) the Cornerstone Investment demonstrates our Cornerstone Investors’
confidence in the Company and its business prospect and it will help raise the profile of the Company.
The Company became acquainted with each of the Cornerstone Investors in its ordinary course of
operation through the business network of the Group, the Overall Coordinators or the other Capital
Market Intermediaries.
The Cornerstone Investment will form part of the International Offering, and save as otherwise
obtained consent from the Stock Exchange, the Cornerstone Investors and their respective close
associates 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 for by the Cornerstone
Investors (including those to be subscribed through QDII(s)) will rank pari passu in all respects with
the fully paid H Shares in issue following the completion of the Global Offering and to be listed on the
Stock Exchange. The Offer Shares to be subscribed for by the Cornerstone Investors (including those
to be subscribed through QDII(s)) will be counted towards the public float of the Company under
Rule 8.08 of the Listing Rules.
Immediately following the completion of the Global Offering, (i) none of the Cornerstone
Investors or their close associates will become a substantial shareholder of the Company; (ii) none of
the Cornerstone Investors or their close associates will have any Board representation in the Company
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CORNERSTONE INVESTORS
solely by virtue of its cornerstone investment, and (iii) equity interests in the Company being
beneficially owned by the three largest public Shareholders will be less than 50% for the purpose of
Rule 8.08(3) of the Listing Rules.
To the best knowledge of the Company, other than GIC Private Limited, First Sentier Investors
(Hong Kong) Limited, Ninety One Asia Pte. Limited, JPMorgan Asset Management (Asia Pacific)
Limited, Dajia Life Insurance Co., Ltd. and Harvest Global Investments Limited (collectively, the
“Relevant Investors”), each of which is either an existing minority Shareholder or its respective close
associates, with each of the Relevant Investors (and/or their close associates) respectively holding 1%
or less than 1% of the total issued share capital of the Company as of the Latest Practicable Date,
(i) each of the Cornerstone Investors is an independent third party and is not an existing shareholder or
close associate of the Group; (ii) none of the Cornerstone Investors is accustomed to taking instructions
from the Company, the Directors, chief executive of the Company, the 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 H Shares registered in
its name or otherwise held by it; and (iii) none of the subscription for the relevant Offer Shares by the
Cornerstone Investors is financed by the Company, the Directors, chief executive of the Company, the
Controlling Shareholders, substantial Shareholders or existing Shareholders or any of its subsidiaries or
their respective close associates for the purpose of subscription of the Offer Shares. The Stock
Exchange has granted a waiver from strict compliance with the requirements under Rule 10.04 and
consent under Paragraph 1C(2) of Appendix F1 to the Listing Rules to permit H Shares in the
International Offering to be placed to certain existing minority Shareholders. For further details, please
refer to “Waivers and Exemptions — Allocation of H Shares to Existing Minority Shareholders and
their Close Associates”.
To the best knowledge of the Company and as confirmed by each of the Cornerstone Investors,
they made their own independent decisions to enter into the Cornerstone Investment Agreements, and
their subscriptions under the Cornerstone Investment would be financed by their own internal
resources or (in the case of the Cornerstone Investor which is funds or investment manager) the assets
managed for its investors. Save for JPMorgan Asset Management (Asia Pacific) Limited, First Sentier
Investors (Hong Kong) Limited, GF Fund Management Co., Ltd., GF International Investment
Management Limited, Harvest Global Investments Limited, HQ TELECOM SINGAPORE PTE.
LTD., Sungrow Power (Hong Kong) Co., Limited, ICBC Wealth Management Co., Ltd., iSoftStone
Hong Kong Limited, Ocean Fine Industrial Limited, PSBC Wealth Management Co., Ltd., Value
Partners Hong Kong Limited and Value Partners Limited, none of the Cornerstone Investors or their
shareholder(s) are listed on any stock exchanges. The Cornerstone Investors have also confirmed that
all necessary approvals have been obtained with respect to the Cornerstone Investment and that no
specific approval from any stock exchange (if relevant) or their shareholders is required for the
Cornerstone Investment. Other than a guaranteed allocation of the relevant Offer Shares pursuant to the
principals as set out in Chapter 4.15 of the Guide for New Listing Applicants at the final Offer Price,
the Cornerstone Investors do not have any preferential rights in the Cornerstone Investment
Agreements compared with other public Shareholders. Other than the Cornerstone Investment
Agreements, as confirmed by each of the Cornerstone Investors, there are no side agreements or
arrangements between us 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.
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CORNERSTONE INVESTORS
The total number of Offer Shares to be subscribed for by the Cornerstone Investors (including
those to be subscribed through QDII(s)) under the Cornerstone Investment may be affected by
reallocation of the Offer Shares between the International Offering and the Hong Kong Public Offering
as described in the paragraphs headed “Structure of the Global Offering — The Hong Kong Public
Offering — Reallocation” in this prospectus. Further, the Overall Coordinators and the Company can
adjust the number of Offer Shares on a pro rata basis to be acquired by each Cornerstone Investor in
their sole and absolute discretion for the purpose of compliance with Rules 8.08(3), 19A.13A and
19A.13C of the Listing Rules, Practice Note 18 to the Listing Rules and Appendix F1 (Placing
Guidelines for Equity Securities) to the Listing Rules. Details of the actual number of Offer Shares to
be allocated to each of the Cornerstone Investors will be disclosed in the allotment results
announcement to be issued by the Company on or around June 25, 2026.
Pursuant to the Cornerstone Investment Agreements, the Overall Coordinators (for themselves
and on behalf of the International Underwriters) has the discretion to effect a delayed delivery of the
Offer Shares to be subscribed for by certain Cornerstone Investors (including those to be subscribed
through QDII(s)) on a date later than the Listing Date, subject to the conditions contained therein. 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. Where
delayed delivery takes place, each of the Cornerstone Investor has agreed that it shall nevertheless pay
for the relevant Offer Shares before the Listing. As such, there will be no deferred settlement of the
investment amount for the Offer Shares to be subscribed for by the Cornerstone Investors (including
those to be subscribed through QDII(s)) pursuant to the Cornerstone Investment Agreements.
To the best knowledge of the Company and the Overall Coordinators, and based on the
indicative interest of investment of the Cornerstone Investors and/or their close associates as of the
date of this prospectus, certain Cornerstone Investors and/or their close associates may participate in
the International Offering as placees and subscribe for further Offer Shares in the Global Offering. The
Company will seek the Stock Exchange’s consent and/or waiver to allow the Cornerstone Investors
and/or their close associates to participate in the International Offering as placees pursuant to Chapter
4.15 of the Guide for New Listing Applicants. Whether such Cornerstone Investors and/or their close
associates will place orders in the International Offering is uncertain and will be subject to the final
investment decisions of such investors and the terms and conditions of the Global Offering.
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CORNERSTONE INVESTORS
The table below sets out details of the Cornerstone Investment (based on the Offer Price of
HK$85.20):
Assuming the Over-
allotment Option is not
exercised
Assuming the Over-
allotment Option is fully
exercised
Cornerstone Investor
Subscription
amount
(in USD
million)
Number of
Offer Shares
to be
acquired(1)(2)
Approximate
% of the
Offer Shares
Approximate
% of the
issued share
capital
Approximate
% of the
Offer Shares
Approximate
% of the
issued share
capital
GIC Private Limited ........ 50.0 4,597,700 8.51% 0.68% 7.40% 0.67%
JPMAMAPL .............. 49.0 4,505,700 8.34% 0.67% 7.26% 0.66%
CPE Ginkgo ............... 38.0 3,494,200 6.47% 0.52% 5.63% 0.51%
Da Cheng International ...... 3 . 0 275,800 0.51% 0.04% 0.44% 0.04%
Dajia Life ................. 3 . 0 275,800 0.51% 0.04% 0.44% 0.04%
DAMSIMF ............... 3 . 0 275,800 0.51% 0.04% 0.44% 0.04%
First Sentier Investors ....... 20.0 1,839,000 3.41% 0.27% 2.96% 0.27%
GF Fund Management ....... 10.0 919,500 1.70% 0.14% 1.48% 0.13%
GF Fund HK .............. 2 . 0 183,900 0.34% 0.03% 0.30% 0.03%
Golden Continent .......... 3 . 0 275,800 0.51% 0.04% 0.44% 0.04%
H G I ..................... 3 . 0 275,800 0.51% 0.04% 0.44% 0.04%
HHLRA .................. 39.0 3,586,200 6.64% 0.53% 5.77% 0.52%
HHLRA (as the investment
manager of an SMA
managed for CPP
Investments) ............ 10.0 919,500 1.70% 0.14% 1.48% 0.13%
Huadeng Technology ....... 5 . 0 459,700 0.85% 0.07% 0.74% 0.07%
Huaqin Singapore .......... 7 . 0 643,600 1.19% 0.10% 1.04% 0.09%
Sungrow Power ............ 4 . 0 367,800 0.68% 0.05% 0.59% 0.05%
ICBC Wealth .............. 3 . 0 275,800 0.51% 0.04% 0.44% 0.04%
iSoftStone HK ............. 3 . 0 275,800 0.51% 0.04% 0.44% 0.04%
LMR Master Fund .......... 3 . 0 275,800 0.51% 0.04% 0.44% 0.04%
Millennium Capital ......... 5 . 0 459,700 0.85% 0.07% 0.74% 0.07%
Ninety One Asia ........... 3 . 0 275,800 0.51% 0.04% 0.44% 0.04%
Ocean Fine Industrial ....... 4 . 0 367,800 0.68% 0.05% 0.59% 0.05%
PSBC Wealth .............. 3 . 0 275,800 0.51% 0.04% 0.44% 0.04%
Taikang Life .............. 8 . 0 735,600 1.36% 0.11% 1.18% 0.11%
Value Partners Hong Kong
Limited ................ 10.1 928,700 1.72% 0.14% 1.50% 0.14%
Value Partners Limited ...... 1 . 9 174,700 0.32% 0.03% 0.28% 0.03%
Total .................... 293.0 26,941,300 49.89% 3.99% 43.38% 3.94%
(1) Calculated based on the exchange rate set out in the section headed “Information about this Prospectus and the Global Offering —
Exchange Rate Conversion” in this prospectus.
(2) Rounded down to the nearest whole board lot of 100 H Shares.
(3) Assuming no other changes are made to the issued share capital of our Company between the Latest Practicable Date and the date of
exercise of Over-allotment Option.
THE CORNERSTONE INVESTORS
The information about our Cornerstone Investors set forth below has been provided by the
Cornerstone Investors in connection with the Cornerstone Investment.
GIC Private Limited
GIC Private Limited is a leading global investment firm established in 1981 to secure
Singapore’s financial future. As the manager of Singapore’s foreign reserves, it takes a long-term,
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CORNERSTONE INVESTORS
disciplined approach to investing. Its asset allocation strategy spans three asset groups — Equities,
Fixed Income, and Real Assets. These include investments in developed and emerging market equities,
nominal and inflation-linked bonds, private equity, real estate, alternatives, and infrastructure. It is
headquartered in Singapore, with a global presence including a talent force of over 2,300 people in 11
key financial cities and investments in over 40 countries. It seeks to add meaningful value to its
investments and be an investor of choice by leveraging its long-term approach, multi-asset capabilities,
and global connectivity.
JPMAMAPL
JPMorgan Asset Management (Asia Pacific) Limited (“ JPMAMAPL”), a company
incorporated in Hong Kong in November 1974, has entered into a cornerstone investment agreement
with the Company and the Joint Sponsors, in its capacity as the investment advisor or investment
manager for and on behalf of the following funds: (i) JPMorgan Funds-China A-share Opportunities,
(ii) JPMorgan China Pioneer A-share Funds, (iii) JPMorgan China A-share Opportunities,
(iv) JPMorgan Funds — China Fund, (v) JPMorgan China Growth and Income, and (vi) certain other
pooled funds, segregated accounts and mandates.
To the best of JPMAMAPL’s knowledge, no single ultimate beneficial owner holds 30% or
more interest in those funds. JPMAMAPL is a wholly-owned subsidiary of JPMorgan Asset
Management (Asia) Inc., an investment management company, which is ultimately wholly owned by
JPMorgan Chase & Co., which is a company organized under United States, Delaware law as a
corporation that has issued shares of common stock to investors. JPMC’s shares are listed on the
New York Stock Exchange (stock code: JPM). JPMAMAPL is licensed by the Securities and Futures
Commission (SFC) Hong Kong.
CPE Ginkgo
CPE Ginkgo Investment Limited (“ CPE Ginkgo ”) is a business company incorporated under
the laws of the BVI and its primary business activity is investment holding. It is a subsidiary of CPE
Global Opportunities Fund II, L.P. (“ CPE GOF II ”), an exempted limited partnership formed under
the laws of the Cayman Islands. CPE GOF II focuses on investments in companies with high growth
potentials, such as healthcare, consumer, technology and industrial sectors across China. Apart from
CPE GOF II, no other shareholder holds 30% or more interest in CPE Ginkgo. The general partner of
CPE GOF II is CPE GOF GP Limited, a company incorporated in the Cayman Islands with limited
liability. CPE GOF GP Limited is directly and wholly owned by CPE Management International
Limited, which is in turn wholly owned by CPE Management International II Limited, both of which
are companies incorporated in the Cayman Islands with limited liability. CPE Management
International II Limited is an investment holding company. CPE Management International II Limited
is owned by a number of shareholders that are natural persons who are independent third parties and
none of whom holds 30% or more interest in CPE Management International II Limited. CPE GOF II’s
investor base comprises both corporate and entrepreneurial investors, and none of the limited partners
hold 30% or more interest in CPE GOF II.
Da Cheng International
Established in Hong Kong on March 19, 2009 with registered capital of HK$200 million, Da
Cheng International Asset Management Company Limited (“ Da Cheng International ”), a wholly-
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CORNERSTONE INVESTORS
owned subsidiary of Dacheng Fund Management Company Limited (“ Dacheng Fund ”), strives to
provide comprehensive and integrated asset management and investment consultancy services for its
clients. No single ultimate beneficial owner holds 30% or more interest in Dacheng Fund. Pursuant to
the SFO, Da Cheng International was licensed to carry out Type 1 (dealing in securities), Type 4
(advising on securities) and Type 9 (asset management) regulated activities, and it obtained the
qualification as an investment manager of the National Social Security Fund in 2015 to serve as an
investment manager of the National Council for Social Security Fund of the People’s Republic of
China (
ଣԫึ). Da Cheng International acts as the investment manager or
investment advisor, with discretionary investment power for Da Cheng China Balanced Fund which is
managed or sub-managed by Da Cheng International. No single ultimate beneficial owner holds 30%
or more interests in Da Cheng China Balanced Fund. Da Cheng International has a mature product
line, which consists of public funds (including investments in China’s securities markets and overseas
securities markets), private funds and portfolios of discretionary accounts. Da Cheng International is
one of the eleven Hong Kong subsidiaries with QFII/RQFII qualifications issued by CSRC and one of
the only four holders of the National Social Security Fund Overseas Investment Manager qualification.
In October 2018, Da Cheng International became one of the first batch to obtain the Hong Kong Stock
Connect Overseas Investment Consultant Qualification.
Dajia Life
Dajia Life Insurance Co., Ltd. (
ʮ̡)( “Dajia Life”) is a professional life
insurance company which is a subsidiary of Dajia Insurance Group, which is ultimately controlled by
China Insurance Security Fund Company Limited (“ China Insurance Company ”). China Insurance
Company is wholly owned by the Ministry of Finance of the People’s Republic of China. Established
in June 2010 and headquartered in Beijing, Dajia Life has a registered capital of RMB30.79 billion and
mainly engages in various personal insurance businesses such as life insurance, health insurance,
accident insurance, reinsurance business of the above-mentioned businesses, and other businesses
approved by the National Financial Regulatory Administration. Currently Dajia Life has a total of 19
provincial-level branches in operation.
DAMSIMF
Dymon Asia Multi-Strategy Investment Master Fund (“ DAMSIMF”) is an investment fund
established in the Cayman Islands. The investors in DAMSIMF are Dymon Asia Multi-Strategy
Investment Fund and Dymon Asia Multi-Strategy Investment (US) Fund. DAMSIMF is a multi-
manager, multi-asset class fund which seeks to generate absolute consistent uncorrelated returns with
minimal volatility. Asset classes traded are: FX, Fixed Income/Rates, Equities, Credit and
Commodities. DAMSIMF is managed by Dymon Asia Capital (Singapore) Pte. Ltd. (“ DACS”). DACS
is a wholly-owned subsidiary of and directly controlled by Dymon Asia Capital Ltd, whose
shareholders Danny Yong and Keith Tan each holds more than 10% interests therein, with Danny
Yong having the controlling stake of Dymon Asia Capital Ltd. Apart from Danny Yong, no other
shareholder holds 30% or more interest in Dymon Asia Capital Ltd. DACS is headquartered in
Singapore with an affiliate in Hong Kong that is licensed by the SFC to carry out type 9
(asset management) and type 1 (dealing in securities) regulated activities. Save for an Australian
sovereign wealth fund who holds 30% or more interest in DAMSIMF, no other single ultimate
beneficial owner holds 30% or more interest in DAMSIMF.
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CORNERSTONE INVESTORS
First Sentier Investors
First Sentier Investors (Hong Kong) Limited (“ First Sentier Investors ”) is a private company
incorporated in Hong Kong and is a SFC licensed asset manager. It is a discretionary asset manager
that has assets under management of at least HK$200 billion (as of December 31, 2025) and has an
investment track record of at least 15 years.
First Sentier Investors is an indirect wholly-owned subsidiary of First Sentier Group Limited.
First Sentier Group Limited is in turn , a wholly-owned indirect subsidiary of Mitsubishi UFJ Financial
Group, Inc., a company listed on the Tokyo Stock Exchange (stock code: 8306), the Nagoya Stock
Exchange (stock code: 8306) and the New York Stock Exchange (stock code: MUFG).
First Sentier Investors will subscribe for the Offer Shares as cornerstone investors in its
capacity as the discretionary asset manager for and on behalf of certain funds.
GF Fund
GF Fund Management Co., Ltd. (
ʮ̡)( “GF Fund Management ”) and GF
International Investment Management Limited (ʮ̡)( “GF Fund HK ”, together
with GF Fund Management, “ GF Fund ”) have respectively entered into cornerstone investment
agreements with our Company. GF Fund Management was established on August 5, 2003. As of
December 31, 2025, its assets under management exceeded RMB 2 trillion. It offers a comprehensive
range of product offerings, covering active equity, bonds, money market, overseas investments, passive
investments, FOF, and quantitative hedging, among others, to meet the diversified investment needs of
domestic and international clients. The controlling shareholder of GF Fund Management is GF
Securities Co., Ltd. (“ GF Securities ”), a limited company listed on the Stock Exchange (stock code:
1776) and the Shenzhen Stock Exchange (stock code: 000776), holding a 54.53% equity interest in GF
Fund Management. Apart from GF Securities, no other shareholder holds 30% or more of the equity in
GF Fund Management.
GF Fund HK is a wholly-owned subsidiary of GF Fund Management. GF Fund HK (central
entity number of its Hong Kong Securities and Futures Commission license: AXL121) was
incorporated in Hong Kong in December 2010. It is licensed by the SFC to carry on Type 1 (dealing in
securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities in Hong
Kong. GF Fund HK serves as the global investment and business platform for its parent company, GF
Fund Management. Acting as GF Fund Management’s overseas window company, GF Fund HK
strategically connects the Chinese and overseas markets. Leveraging the investment and research
capabilities of GF Fund Management and its competitive advantages in the overseas market, GF Fund
HK provides comprehensive and high-quality services to its clients.
GF Fund Management and GF Fund HK will subscribe for the Offer Shares as cornerstone
investors in their capacity as the discretionary investment managers of certain funds under their
management. To the best knowledge of GF Fund Management and GF Fund HK, each fund is an
independent third party, and no ultimate beneficial owner holds 30% or more interest.
Golden Continent
Golden Continent Global Vision Open-ended Fund Company-Value Opportunity Fund N0.2
(“Golden Continent ”) is an open-ended fund company authorized by the Securities and Futures
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CORNERSTONE INVESTORS
Commission of Hong Kong (SFC) under Section 104 of the Securities and Futures Ordinance
(Cap. 571) of the Laws of Hong Kong (SFC Authorization Number: BUF704), with Golden Continent
Asset Management Co., Limited (holding Type 4 and Type 9 asset management licenses issued by the
SFC, Central Entity Number: BTE516) acting as its manager. The entire share capital of Golden
Continent Asset Management Co., Limited is wholly owned by an independent third party, Mr. Qi
Mingyang. Golden Continent primarily invests in high-quality listed company securities in global
capital markets, aiming to achieve long-term capital appreciation through proactive investment
management.
HGI
Harvest Global Investments Limited (
ʮ̡)( “HGI”) was established in
Hong Kong in 2008 and is licensed by the SFC to conduct the regulated activities of asset
management, advising on securities, and dealing in securities. HGI has nearly two decades of
experience in discretionary asset management serving institutional and retail clients.
HGI is the wholly-owned subsidiary of Harvest Financial Group Limited (“ HFG”) since July
2024, and HFG is the wholly-owned subsidiary of Harvest Fund Management Co., Ltd (“ HFM”).
HFM is owned as to 40% by China Credit Trust Co. Ltd (which is in turn held as to 32.9% by The
People’s Insurance Company (Group) of China Limited, a company listed on the Shanghai Stock
Exchange (stock code: 601319) and the Stock Exchange (stock code: 1339)), 30% by Lixin Investment
Co., Ltd and 30% by DWS Investments Singapore Limited. HFM was established as one of the first
asset management companies in China in 1999. Since then, HFM has grown into one of the largest
asset managers in China. The Harvest group (namely HFM and HGI) had approximately USD
265 billion of assets under management as of end of December 2025.
HGI’s on-the-ground team understands how policy decisions impact local markets, the
complexities of risk on-shore and off-shore and have their finger on the pulse of companies primed for
quantum growth. HGI’s investment and management teams combine top-pedigree international
experience with intimate knowledge of Chinese markets. At the investment level, as the forefront of
Harvest Fund’s overseas investments, HGI has always adhered to HFM’s progressive and steady
investment philosophy, embracing the resource sharing of the integrated investment research system
and the investment management process centered on “research-driven investment”, and built an
investment management team with comprehensive management capabilities.
HGI will subscribe for the Offer Shares as cornerstone investor in its capacity as the
discretionary investment manager for and on behalf of certain funds and mandate accounts. To the best
of HGI’s knowledge, no single ultimate beneficial owner holds 30% or more interest in the
participating funds or accounts, and each of such fund or account is an independent third party.
HHLRA
HHLR Advisors, Ltd. (‘‘ HHLRA’’) is an exempted company incorporated in the Cayman
Islands that acts as the investment manager of investment funds (collectively the ‘‘ HHLRA Funds’’),
which are limited partnerships formed under the laws of the Cayman Islands. There is no individual
limited partner investor who holds an economic interest of 30% or more in the HHLRA Funds.
HHLRA intends to hold the Offer Shares through one of the HHLRA Funds, namely HACF, L.P.
HHLRA also acts as the investment manager of segregated management accounts (“ SMAs”).
HHLRA intends to hold the Offer Shares through an SMA managed for CPP Investments.
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CORNERSTONE INVESTORS
HHLRA collaborates with industry-defining enterprises, aiming to establish alignment with
sustainable, forward-thinking companies across industrial, consumer, healthcare and business services
sectors. HHLRA manages capital for global institutions, including non-profit foundations,
endowments, and pensions. HHLRA is entering the Cornerstone Investment Agreement with the
Company in its capacity as an investment manager and on behalf of the HHLRA Funds and SMAs.
Huadeng Technology
Huadeng Tech Ace Investment Ltd (“ Huadeng Technology”) is a company incorporated in the
British Virgin Islands. Huadeng Technology and its affiliates have a solid industrial and investment
background in the semiconductor and Al industries. There is no shareholder holding 30% or more of
the shareholding interests in Huadeng Technology.
Huaqin Singapore
HQ TELECOM SINGAPORE PTE. LTD. (“ Huaqin Singapore ”) is a limited company
incorporated under the laws of Singapore in 2019 primarily engaged in electronic product sales and
equity investment business. Huaqin Singapore is wholly owned by Huaqin Co., Ltd. (
ࠢ
ʮ̡)( “ Huaqin”), a company listed on the Shanghai Stock Exchange (stock code: 603296) and the
Stock Exchange (stock code: 3296). Huaqin is a globally leading, technology-driven smart product
platform company. It provides smart products covering mobile terminals, computing and data center
business, AIoT, and innovative business fields to the world’s leading technology companies, offering
customers end-to-end solutions across the entire value chain. As a globally leading full-stack ODM
platform for smart products, Huaqin has achieved the world’s No. 1 position in multiple smart product
categories. Huaqin is a customer of the Company.
Sungrow Power
Sungrow Power (Hong Kong) Co., Limited (“ Sungrow Power ”) is a limited company
established in Hong Kong. Sungrow Power is a wholly-owned subsidiary of Sungrow Power Supply
Co., Ltd. (“ Sungrow”), a company listed on the Shenzhen Stock Exchange (stock code: 300274)
specialized in R&D, production and sales of new energy equipment including PV inverter, energy
storage system, wind power converters, charging equipment and hydrogen energy equipment. Sungrow
is a customer of the Company.
ICBC Wealth
ICBC Wealth Management Co., Ltd. (
ப΂ʮ̡)( “ ICBC Wealth ”) was
established in May 2019 in Beijing, with a registered capital of RMB16 billion. It is a wholly-owned
subsidiary of Industrial and Commercial Bank of China Limited, a company listed on the Shanghai
Stock Exchange (stock code: 601398) and the Stock Exchange (stock code: 1398). The business scope
of ICBC Wealth is public issuance of wealth management products to the general public, investment
and management of entrusted assets for investors; non-public issuance of wealth management products
to qualified investors, investment and management of entrusted assets for investors; wealth
management advisory and consulting services; and other businesses as approved by the banking
regulatory authority under the State Council.
As confirmed by ICBC Wealth, the subscription of the Offer Shares as a Cornerstone Investor
will be made by ICBC Wealth in its capacity as the discretionary investment manager of certain wealth
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CORNERSTONE INVESTORS
management products under its discretionary management, and no single ultimate beneficial owner
holds 30% or more interests in such products.
iSoftStone HK
iSoftStone Hong Kong Limited (“ iSoftStone HK”) is a wholly-owned subsidiary of iSoftStone
Information Technology (Group) Co., Ltd. (“ iSoftStone”), a company listed on the Shenzhen Stock
Exchange (stock code: 301236). iSoftStone is the leading full-stack intelligent products and services
provider in China, committed to becoming a globally influential technology company.
LMR Master Fund
LMR Multi-Strategy Master Fund Limited (“ LMR Master Fund ”) is established in the
Cayman Islands and managed by LMR Partners LLP (“ LMR Partners ”, together with its affiliates,
“LMR”), a global multi-strategy investment firm founded in 2009, specializing in liquid, market-
neutral trading strategies with a focus on relative value. LMR employs both systematic and
discretionary approaches to construct a diversified portfolio designed to generate uncorrelated returns.
LMR currently manages over US$11 billion in assets on behalf of a global institutional client base.
LMR has over 350 employees across offices in London, New York, Hong Kong, Zurich, Dubai,
Dublin, and Glasgow. Mr. Benjamin Levine, who is an Independent Third Party, is the only individual
that owns 30% or more interest in LMR Partners. There is no individual underlying investor that has
30% beneficial ownership or more in the LMR Master Fund.
Millennium Capital
Millennium Capital Management (Singapore) Pte. Ltd. (“ Millennium Capital”) is the principal
investment manager of Integrated Core Strategies (Asia) Pte. Ltd. (“ Millennium ICSA ”), the
cornerstone investor. Millennium Capital is one of the investment management entities in the
Millennium Group (Millennium Capital, together with its affiliated entities, are collectively referred to
herein as “ Millennium”). Millennium is a global, diversified alternative investment management firm
and seeks to pursue a diverse range of investment strategies across industry sectors, asset classes and
geographies. Millennium ICSA is incorporated in Singapore and Millennium Capital is licensed by the
Monetary Authority of Singapore. Apart from Mr. Israel Englander, no ultimate beneficial owner holds
30% or more in Millennium Capital, and Mr. Israel Englander is an independent third party. No
ultimate beneficial owner holds 30% or more interests in Millennium ICSA.
Ninety One Asia
Ninety One Asia Pte. Limited (“ Ninety One Asia ”) is a fund management company registered
in Singapore and regulated by the Monetary Authority of Singapore (“ MAS”). The company holds an
Accredited/Institutional Licensed Fund Management Company (A/I LFMC) license, authorized to
manage investment funds exclusively for accredited and institutional investors. The company focuses
on asset management, with its core business being the management of equity investment funds. Ninety
One Asia has a market-renowned investment team, focusing on investments in industries such as AI,
TMT, consumer, healthcare, and advanced manufacturing, aiming to identify outstanding companies
that transform industry business models and the most forward-thinking entrepreneurs through in-depth
industry analysis and accurate grasp of emerging technology and consumer trends. Ninety One Asia
serves as the discretionary investment manager for Enreal China Master Fund and Forreal China Value
Fund, both of which are Great China focused long-only funds investing in Hong Kong and Chinese
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CORNERSTONE INVESTORS
Mainland stock markets as well as Chinese ADRs. The ultimate beneficial owner of Enreal China
Master Fund and Forreal China Value Fund holding 30% or more of its interest is a global institutional
investor with several hundred billion USD in assets under management rather than an individual
investor.
Ocean Fine Industrial
Ocean Fine Industrial Limited (“ Ocean Fine Industrial ”) is a company incorporated in
Hong Kong in 2003, principally engaged in the provision of import and export of semiconductor and
electronic component testing services. It is a wholly-owned subsidiary of Tongfu Microelectronics Co.,
Ltd. (
ʮ̡)( “ Tongfu”), a company listed on Shenzhen Stock Exchange (stock
code: 002156). Tongfu is an integrated circuit packaging and testing service provider, offering global
customers a one-stop service from design simulation to packaging and testing. Tongfu is a supplier of
the Company.
PSBC Wealth
PSBC Wealth Management Co., Ltd. (
ப΂ʮ̡)( “ PSBC Wealth ”) was
established on December 18, 2019, with a registered capital of RMB8.0 billion, in which Postal
Savings Bank of China Co., Ltd. (
ʮ̡), a company listed on the Stock
Exchange (stock code: 1658), holds a 100% stake and is ultimately controlled by China Post Group
Corporation Limited (
ʮ̡). Its business scope is public issuance of wealth
management products to the general public, investment and management of entrusted assets for
investors; non-public issuance of wealth management products to eligible investors, investment and
management of entrusted assets for investors; financial advisory and consulting services, etc. PSBC
Wealth remained firmly committed to balanced development of scale, quality and profitability, aimed
at fostering core competitiveness, deepened investment analysis, marketing, internal control,
operational reforms and digital transformation, and continued to improve the rule-based, specialized
and market-oriented development of wealth management business.
Taikang Life
Taikang Life Insurance Co., Ltd (“ Taikang Life ”), a company incorporated in China, is a
wholly-owned subsidiary of Taikang Insurance Group Inc. There is no shareholder holding 30% or
more in Taikang Insurance Group Inc. Taikang Life provides a full range of personal security and
investment and wealth management products and services for individuals and families. The products
on offer correspond to the different requirements of customers in terms of market segments such as the
children and teenagers, females and high-income population groups. They also meet multidimensional
demands regarding health care and accident cover, pensions and wealth management, among others.
Taikang Insurance Group Inc. is an insurance and financial service conglomerate focused on insurance,
asset management and health and elderly care as main businesses. The Beijing-headquartered company
consists of several subsidiaries including Taikang Life, Taikang AMC, Taikang Pension, Taikang
Healthcare, Taikang Health, and TK.CN. Its product offering covers life insurance, internet-based
financial insurance, enterprise annuity, asset management, health and elderly care, health management
and commercial real estate, among others.
Value Partners
Each of Value Partners Hong Kong Limited (incorporated in Hong Kong in 1999) and Value
Partners Limited (incorporated in the British Virgin Islands in 1991) (together with other subsidiaries
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CORNERSTONE INVESTORS
under Value Partners Group Limited (“ Value Partners ”)), acts as investment manager or investment
advisor to the following investment funds: (i) Value Partners China Greenchip Fund Limited, (ii)
Value Partners Intelligent Funds — China Convergence Fund, (iii) Value Partners Intelligent Funds —
Chinese Mainland Focus Fund, (iv) Value Partners Intelligent Funds — JA-VP China New Century
Fund, (v) Value Partners Classic Fund, (vi) Value Partners High-Dividend Stocks Fund, (vii) Value
Partners Fund Series — Value Partners Asian Income Fund, (viii) Value Partners Fund Series — Value
Partners Asian Innovation Opportunities Fund, (ix) Value Partners Multi — Asset Fund, (x) Value
Partners Funds SPC — Value Partners China A-Share Innovation Fund SP, (xi) Value Partners Ireland
Fund ICAV — Value Partners Asia Ex-Japan Equity Fund, and (xii) Value Partners Ireland Fund
ICAV — Value Partners China A Shares High Dividend Fund.
Both Value Partners Hong Kong Limited and Value Partners Limited are wholly-owned
subsidiaries of Value Partners Group Limited, a company listed on the Stock Exchange (stock
code:0806). Value Partners is one of Asia’s largest independent asset management firms. It is
headquartered in Hong Kong and operates in Shanghai, Shenzhen and Singapore. Value Partners’
investment strategies cover equities, fixed income, multi-asset, quantitative investment solutions and
alternatives for institutional and individual clients in the Asia Pacific and Europe. As of December 31,
2025, it has asset under management of approximately US$6.2 billion.
CLOSING CONDITIONS
The subscription obligation of each of the Cornerstone Investors under the Cornerstone
Investment Agreements is subject to, among other things, the following closing conditions:
(a) the underwriting agreements for the Hong Kong Public Offering and the International
Offering being entered into and having become effective and unconditional (in accordance
with their respective original terms or as subsequently waived or varied by agreement of
the parties thereto) by no later than the time and date as specified in these underwriting
agreements, and neither of the aforesaid underwriting agreements having been terminated;
(b) the Offer Price having been agreed upon and the price determination agreement having
been agreed to be signed between the Company and the Overall Coordinators (for
themselves and on behalf of the underwriters of the Global Offering);
(c) the Listing Committee of the Stock Exchange having granted the listing of, and permission
to deal in, the H Shares (including the Investor Shares) as well as other applicable waivers
and approvals and such approval, permission or waiver having not been revoked prior to
the commencement of dealings in the H Shares on the Stock Exchange;
(d) 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 H Shares on the Stock Exchange;
(e) no Laws shall have been enacted or promulgated by any Governmental Authority which
prohibits the consummation of the transactions contemplated in the Global Offering or in
the respective Cornerstone Investment Agreements and there shall be no orders or
injunctions from a court of competent jurisdiction in effect precluding or prohibiting
consummation of such transactions; and
(f) the representations, warranties, undertakings, acknowledgements and confirmations of the
Cornerstone Investor under the Cornerstone Investment Agreement are true, accurate and
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CORNERSTONE INVESTORS
complete in all respects and not misleading and that there is no material breach of such
Cornerstone Investment Agreement on the part of the Cornerstone Investor.
RESTRICTIONS ON DISPOSALS BY THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed that it will not, whether directly or indirectly, at
any time during the period of six months from and including the Listing Date (the “ Lock-up Period”),
dispose of any of the Offer Shares they have subscribed for pursuant to the relevant Cornerstone
Investment Agreement, save for in certain limited circumstances, such as transfers to any of its wholly-
owned subsidiaries who will be bound by the same obligations of such Cornerstone Investor, including
the Lock-up Period restriction.
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UNDERWRITING
HONG KONG UNDERWRITERS
China International Capital Corporation Hong Kong Securities Limited
Huatai Financial Holdings (Hong Kong) Limited
UNDERWRITING
This prospectus is published solely in connection with the Hong Kong Public Offering. The
Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a conditional
basis. The Company expects the International Offering to be fully underwritten by the International
Underwriters. If, for any reason, the Offer Price is not agreed between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and the Company, the Global Offering will not proceed
and will lapse.
For details of the structure of the Global Offering, see the section headed “Structure of the
Global Offering” in this prospectus.
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, the Company is offering the Hong Kong Offer
Shares for subscription on the terms and conditions set out in this prospectus and the Hong Kong
Underwriting Agreement at the Offer Price.
Subject to (a) the Stock Exchange granting approval for the listing of, and permission to deal in,
the 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 having been withdrawn and (b) certain other conditions set out in the Hong Kong
Underwriting Agreement, the Hong Kong Underwriters have agreed severally but not jointly to procure
subscribers for, or themselves to subscribe for, their respective applicable proportions of the
Hong Kong Offer Shares being offered which are not taken up under the Hong Kong Public Offering
on the terms and conditions set out in this prospectus and the Hong Kong Underwriting Agreement.
The Hong Kong Underwriting Agreement is conditional on, among other things, the
International Underwriting Agreement having been executed and becoming unconditional and not
having been terminated in accordance with its terms.
Grounds for Termination
If any of the events set out below occur at any time prior to 8:00 a.m. on the Listing Date, the
Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters) in their sole and absolute discretion, shall have the right by giving a notice to the
Company to terminate the Hong Kong Underwriting Agreement with immediate effect:
(i) there develops, occurs, exists or comes into force:
(a) any new law or regulation or any change or development involving a prospective
change or any event or series of events or circumstances likely to result in a change
or a development involving a prospective change in existing laws or regulations, or
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UNDERWRITING
the interpretation or application thereof by any court or any competent Authority in or
affecting Hong Kong, the PRC, the United States, the United Kingdom, the European
Union (or any member thereof), Japan, Singapore, or other jurisdictions relevant to
the Group or the Global Offering (each a “ Relevant Jurisdiction ” and collectively,
the “Relevant Jurisdictions”); or
(b) any change or development involving a prospective change, or any event or series of
events or circumstances likely to result in a change or prospective change, in any
local, national, regional or international financial, political, military, industrial,
economic, fiscal, legal, regulatory, currency, credit or market conditions or
sentiments, Taxation, equity securities or currency exchange rate or controls or any
monetary or trading settlement system, or foreign investment regulations (including,
without limitation, a devaluation of the Hong Kong dollar, United States dollar or
Renminbi against any foreign currencies, a change in the system under which the
value of the Hong Kong dollar is linked to that of the United States dollar or the
Renminbi is linked to any foreign currency or currencies) or other financial markets
(including, without limitation, conditions and sentiments in stock and bond markets,
money and foreign exchange markets, the inter-bank markets and credit markets) in
or affecting any Relevant Jurisdictions, or affecting an investment in the Offer
Shares; or
(c) any event or series of events, or circumstances in the nature of force majeure
(including, without limitation, any acts of government, declaration of a regional,
national or international emergency or war, calamity, crisis, economic sanctions,
strikes, labor disputes, other industrial actions, lock-outs, fire, explosion, flooding,
tsunami, earthquake, volcanic eruption, civil commotion, riots, rebellion, public
disorder, paralysis in government operations, acts of war, epidemic, pandemic,
outbreak or escalation, mutation or aggravation of diseases , accident or interruption
or delay in transportation, local, national, regional or international outbreak or
escalation of hostilities (whether or not war is or has been declared), act of God or act
of terrorism (whether or not responsibility has been claimed)) in or affecting any of
the Relevant Jurisdictions; or
(d) the imposition or declaration of any moratorium, suspension or limitation (including
without limitation, any imposition of or requirement for any minimum or maximum
price limit or price range) on (i) the trading in shares or securities generally on the
Stock Exchange, the Shanghai Stock Exchange, the Shenzhen Stock Exchange, the
New York Stock Exchange , the NASDAQ Global Market or the London Stock
Exchange; or (ii) the trading in any securities of the Company listed or quoted on a
stock exchange or an over-the-counter market; or
(e) the imposition or declaration of any general moratorium on banking activities in or
affecting any of the Relevant Jurisdictions or any disruption in commercial banking
or foreign exchange trading or securities settlement or clearing services, procedures
or matters in or affecting any of the Relevant Jurisdictions; or
(f) other than with the prior written consent of the Overall Coordinators, the issue or
requirement to issue by the Company of a supplement or amendment to the
Prospectus or other documents in connection with the offer and sale of the Offer
Shares pursuant to the Companies (Winding Up and Miscellaneous Provisions)
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Ordinance or the Listing Rules or upon any requirement or request of the Stock
Exchange and/or the SFC; or
(g) the commencement by any Authority or other regulatory or political body or
organization of any public action or investigation against a Group Company or a
director or a senior management member of the Company or announcing an intention
to take any such action; or
(h) the imposition of sanctions or export controls in whatever form, directly or indirectly,
on any Group Company or the Controlling Shareholders or on any Relevant
Jurisdiction, or the withdrawal of trading privileges which existed on the date of the
Hong Kong Underwriting Agreement, in whatever form, directly or indirectly, by, or
for, any Relevant Jurisdiction; or
(i) any valid demand by creditors for payment or repayment of indebtedness of any
member of the Group or in respect of which any member of the Group is liable prior
to its stated maturity; or
(j) any non-compliance of the Prospectus (or any other documents used in connection
with the contemplated offering, allotment, issue, subscription or sale of any of the
Offer Shares), the CSRC Filings or any aspect of the Global Offering with the Listing
Rules or any other applicable Laws; or
(k) any litigation, dispute, legal action or claim or regulatory or administrative
investigation or action being threatened, instigated or announced against any member
of the Group or the Controlling Shareholders or any Director or senior management
members as named in the Prospectus; or
(l) any contravention by any Group Company or any Director of the Listing Rules or
applicable Laws; or
(m) any change or prospective change, or a materialization of, any of the risks set out in
the section headed “Risk Factors” in the Prospectus,
which, in any such case individually or in the aggregate, in the sole and absolute opinion
of the Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the
Hong Kong Underwriters):
(1) has or will or may have a material adverse effect;
(2) has or will or may have a material adverse effect on the success of the Global
Offering or the level of applications under the Hong Kong Public Offering or the
level of indications of interest under the International Offering; or
(3) makes or will make or may make it impracticable, inadvisable, inexpedient or
incapable for any material part of the Hong Kong Underwriting Agreement, the Hong
Kong Public Offering or the Global Offering to be performed or implemented as
envisaged, or for the Hong Kong Public Offering and/or the Global Offering to
proceed, or to market the Global Offering, or the delivery or distribution of the Offer
Shares on the terms and in the manner contemplated by the Offering Documents; or
(4) has or will or may have the effect of making any part of the Hong Kong Underwriting
Agreement (including underwriting) incapable of performance in accordance with its
terms or preventing the processing of applications and/or payments pursuant to the
Global Offering or pursuant to the underwriting thereof; or
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(ii) there has come to the notice of the Joint Sponsors and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) that:
(a) any statement contained in any of the Offering Documents, the CSRC Filings and/or
any notices, announcements, advertisements, communications or other documents
issued or used by or on behalf of the Company in connection with the Hong Kong
Public Offering (including any supplement or amendment thereto but excluding
names, logos, addresses and qualifications of the Joint Sponsors, the Sponsor-OCs,
the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the
Joint Lead Managers, the CMIs and the Underwriters) (the “ Global Offering
Documents”) was, when it was issued, or has become untrue, incorrect, inaccurate in
any material respect or misleading; or that any estimate, forecast, expression of
opinion, intention or expectation contained in any such documents, was, when it was
issued, or has become unfair or misleading in any respect or based on untrue,
dishonest or unreasonable assumptions or given in bad faith; or
(b) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of the Prospectus, constitute a material
omission or misstatement in any Global Offering Document; or
(c) any breach of, or any event or circumstance rendering untrue or incorrect or
misleading in any respect, any of the representations, warranties and undertakings
given by the Company or the Controlling Shareholders in the Hong Kong
Underwriting Agreement or the International Underwriting Agreement; or
(d) any event, act or omission which gives rise or is likely to give rise to any liability of
any of the Indemnifying Parties pursuant to the indemnities in the Hong Kong
Underwriting Agreement; or
(e) any breach of any of the obligations or undertakings imposed upon the Company to
the Hong Kong Underwriting Agreement, the International Underwriting Agreement;
or
(f) there is any change or development involving a prospective change, constituting or
having a Material Adverse Effect; or
(g) that the Chairman of the Board, any Director or any member of senior management
of the Company named in the Prospectus seeks to retire, or is removed from office or
vacating his/her office; or
(h) any Director or any member of senior management of the Company named in the
Prospectus is being charged with an indictable offence or prohibited by operation of
law or otherwise disqualified from taking part in the management or taking
directorship of a company; or
(i) the Company withdraws the Prospectus (and/or any other documents used in
connection with the subscription or sale of any of the Offer Shares pursuant to the
Global Offering) or the Global Offering; or
(j) that the approval by the Listing Committee of the listing of, and permission to deal in,
the H Shares in issue and to be issued pursuant to the Global Offering (including
pursuant to any exercise of the Over-allotment Option) is refused or not granted,
other than subject to customary conditions, on or before the Listing Date, or if
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granted, the approval is subsequently withdrawn, cancelled, qualified (other than by
customary conditions), revoked or withheld; or
(k) any person (other than any of the Joint Sponsors) has withdrawn its consent to the
issue of the Prospectus with the inclusion of its reports, letters and/or legal opinions
(as the case may be) and references to its name included in the form and context in
which it respectively appears; or
(l) 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
(m) an order or petition is presented for the winding-up or liquidation of any member of
the Group, or any member of the Group makes any composition or arrangement with
its creditors or enters into a scheme of arrangement or any resolution is passed for the
winding-up of any member of the Group or a provisional liquidator, receiver or
manager is appointed over all or part of the assets or undertaking of any member of
the Group or anything analogous thereto occurs in respect of any member of the
Group; or
(n) (A) the notice of acceptance of the CSRC Filings issued by the CSRC and/or the
results of the CSRC Filings published on the website of the CSRC is rejected,
withdrawn, revoked or invalidated; or (B) other than with the prior written consent of
the Overall Coordinators, the issue or requirement to issue by the Company of a
supplement or amendment to the CSRC Filings pursuant to the CSRC Rules or upon
any requirement or request of the CSRC; or (C) any non-compliance of the CSRC
Filings with the CSRC Rules or any other applicable Laws; or
(o) that a material portion of the orders placed or confirmed in the bookbuilding process
have been withdrawn, terminated or cancelled, or with respect to which the payment
of the relevant orders and/or investment commitment has not been received or settled
in the stipulated time and manner or otherwise.
Undertakings by the Company to the Stock Exchange pursuant to the Listing Rules
Pursuant to Rule 10.08 of the Listing Rules, the Company has undertaken to the Stock
Exchange that it will not exercise its power to issue any further Shares, or securities convertible into
Shares (whether or not of a class already listed) or enter into any agreement to such an issue within six
months from the Listing Date (whether or not such issue of Shares or securities will be completed
within six months from the Listing Date), except (a) pursuant to the Global Offering (including any
H Shares which may be issued pursuant to the exercise of the Over-allotment Option); or (b) under the
circumstances provided under Rule 10.08 of the Listing Rules.
Undertakings by the Controlling Shareholders to the Stock Exchange pursuant to the Listing Rules
Pursuant to Rule 10.07 of the Listing Rules, the Controlling Shareholders have undertaken to
the Stock Exchange and our Company that:
(a) at any time in the period commencing on the date by reference to which disclosure of their
shareholding in the Company is made in this prospectus and ending on the date which is
six months from the Listing Date, they shall not and shall procure that the relevant
registered holder(s) shall not dispose of, nor enter into any agreement to dispose of or
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UNDERWRITING
otherwise create any options, rights, interests or encumbrances in respect of, any of the
Shares in respect of which they are shown by the Prospectus to be the beneficial owner(s)
(the “Relevant Securities”); and
(b) at any time in the period of six months commencing on the date on which the period
referred to in paragraph (a) above expires, they shall not and shall procure that the relevant
registered holder(s) shall not dispose of, nor enter into any agreement to dispose of or
otherwise create any options, rights, interests or encumbrances in respect of, any of the
Shares referred to in paragraph (a) above if, immediately following such disposal or upon
exercise or enforcement of such options, rights, interests or encumbrances, they would
cease to be the Controlling Shareholders (as defined in the Listing Rules) of the Company.
Pursuant to Note (3) to Rule 10.07(2) of the Listing Rules, the Controlling Shareholders have
undertaken to the Stock Exchange and our Company that, within the period commencing on the date
by reference to which disclosure of their shareholding in our Company is made in this prospectus and
ending on the date which is 12 months from the Listing Date, they will:
(i) when any of them pledges or charges any Relevant Securities or interests in any of the
Relevant Securities, whether directly or indirectly, in favor of any 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 of the Listing Rules, immediately
inform our Company of such pledge or charge together with the number of Relevant
Securities so pledged or charged; and
(ii) when any of them receives indications, either verbal or written, from the pledgee or
chargee of any Relevant Securities that any of the pledged or charged securities of our
Company will be disposed of, immediately inform our Company of such indications.
Our Company will inform the Stock Exchange as soon as we have been informed of the matters
referred to in paragraphs (i) and (ii) above by the Controlling Shareholders and disclose such matters
by way of an announcement which is published in accordance with Rule 2.07C of the Listing Rules as
soon as possible.
Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertakings by the Company
Pursuant to the Hong Kong Underwriting Agreement, the Company has undertaken to each of
the Joint Sponsors, the Overall Coordinators, and the Underwriters that, except for the issue, offer or
sale of the Offer Shares by the Company pursuant to the Global Offering (including pursuant to any
exercise of the Over-allotment Option), the Company will not, without the prior written consent of the
Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters) and unless in compliance with the Listing Rules, at any time during the period
commencing on the date hereof and ending on, and including, the date falling six months after the
Listing Date (the “First Six-Month Period”):
(i) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree to
allot, issue or sell, assign, mortgage, charge, pledge, hypothecate, lend, grant or sell any
option, warrant, contract or right to subscribe for or purchase, grant, or purchase any
option, warrant, contract or right to allot, issue or sell, or otherwise transfer or dispose of
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UNDERWRITING
or create an encumbrance over, or agree to transfer or dispose of or create an encumbrance
over, either directly or indirectly, conditionally or unconditionally, or repurchase any legal
or beneficial interest in the share capital or any other securities of the Company, or any
interests in any of the foregoing (including, but not limited to, any securities that are
convertible into or exercisable or exchangeable for, or that represent the right to receive, or
any warrants or other rights to purchase, any such share capital or other securities of the
Company, as applicable), or deposit any share capital or other securities of the Company
as applicable, with a depositary in connection with the issue of depositary receipts);
(ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any
of the economic consequences of ownership (legal or beneficial) of H Shares or any other
securities of the Company, or any interest in any of the foregoing (including, without
limitation, any securities which are convertible into or exchangeable or exercisable for, or
that represent the right to receive, or any warrants or other rights to purchase, any
H Shares);
(iii) enter into any transaction with the same economic effect as any transaction described in
(i) or (ii) above; or
(iv) offer to or agree to any such transaction described in (i), (ii) or (iii) above or announce any
intention to do so,
in each case, whether any of the transactions described in (i), (ii) or (iii) above is to be settled by
delivery of any such share capital or other securities of the Company or, in cash or otherwise (whether
or not the issue of such share capital or other securities of the Company will be completed within the
First Six-Month Period). For the avoidance of doubt, the lock-up undertaking above shall not apply to
any issue of debt securities by the Company which are not convertible into equity securities of the
Company or of any securities of other member of the Group.
In addition, the Company has further undertaken to each of the Joint Sponsors and the
Underwriters, in the event that, at any time during the period of six months immediately following the
expiry of the First Six-Month Period (the “ Second Six-Month Period ”), the Company enters into any
such transactions or offers or agrees or contracts to, or announces, or publicly discloses, any intention
to, enter into any such transactions described in (i), (ii) or (iii) above, the Company has undertaken to
take all reasonable steps to ensure that it will not create a disorderly or false market in the Shares or
other securities of the Company.
Hong Kong Underwriters’ Interests in the Company
Save for their respective obligations under the Hong Kong Underwriting Agreement, as of the
Latest Practicable Date, none of the Hong Kong Underwriters was interested, legally or beneficially,
directly or indirectly, in any Shares or any securities of any member of the Group or had any right or
option (whether legally enforceable or not) to subscribe for or purchase, or to nominate persons to
subscribe for or purchase, any Shares or any securities of any member of the Group. Following the
completion of the Global Offering, the Hong Kong Underwriters and their affiliated companies may
hold a certain portion of the Company’s H Shares as a result of fulfilling their respective obligations
under the Hong Kong Underwriting Agreement.
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International Offering
International Underwriting Agreement
In connection with the International Offering, the Company expects to enter into the
International Underwriting Agreement with, among others, the International Underwriters on or around
the Price Determination Date. Under the International Underwriting Agreement, on or around the Price
Determination Date, and subject to the Over-allotment Option, the International Underwriters would,
subject to certain conditions set out therein, agree severally but not jointly to procure subscribers for, or
themselves to subscribe for, their respective applicable proportions of the International Offer Shares
initially being offered pursuant to the International Offering. It is expected that the International
Underwriting Agreement may be terminated on similar grounds as the Hong Kong Underwriting
Agreement. Potential investors should note that in the event that the International Underwriting
Agreement is not entered into or is terminated, the Global Offering will not proceed. See “Structure of
the Global Offering — The International Offering.”
Over-allotment Option
The Company is expected to grant to the International Underwriters the Over-allotment Option,
exercisable by the Overall Coordinators (for themselves and on behalf of the International
Underwriters) at any time from the Listing Date until 30 days after the last day for lodging applications
under the Hong Kong Public Offering, pursuant to which the Company may be required to issue up to
an aggregate of 8,100,100 H Shares, representing not more than 15% of the number of Offer Shares
initially available under the Global Offering, at the Offer Price, to cover over-allocations in the
International Offering, if any. See “Structure of the Global Offering — Over-allotment Option.”
Commissions and Expenses
The Underwriters and the Capital Market Intermediaries will receive an underwriting
commission of 0.7% of the aggregate Offer Price of all the Offer Shares (including any Offer Shares to
be issued pursuant to the exercise of the Over-allotment Option) (the ‘‘ Fixed Fees ’’), out of which
they will pay any sub-underwriting commissions and other fees. The Underwriters and the Capital
Market Intermediaries may receive a discretionary incentive fee of up to 0.5% of the aggregate Offer
Price of all the Offer Shares (including any Offer Shares to be issued pursuant to the exercise of the
Over-allotment Option) (the “ Discretionary Fees ”). Assuming the Discretionary Fees are paid in full,
the ratio of the Fixed Fees and the Discretionary Fees paid or payable to all Underwriters and all
Capital Market Intermediaries is approximately 52.5:47.5. For any unsubscribed Hong Kong Offer
Shares reallocated to the International Offering, the underwriting commission will not be paid to the
Hong Kong Underwriters but will instead be paid, at the rate applicable to the International Offering, to
the relevant International Underwriters.
The aggregate underwriting commissions and fees together with the Stock Exchange listing
fees, the SFC transaction levy, the AFRC transaction levy and the Stock Exchange trading fee, legal
and other professional fees and printing and all other expenses relating to the Global Offering are
estimated to be approximately HK$109.4 million (assuming an indicative Offer Price of HK$85.20 per
Offer Share, the full payment of the discretionary incentive fee and the exercise of the Over-allotment
Option in full) and will be paid by the Company.
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Indemnity
The Company has agreed to indemnify the Hong Kong Underwriters for certain losses which
they may suffer or incur, including losses arising from their performance of their obligations under the
Hong Kong Underwriting Agreement and any breach by the Company of the Hong Kong Underwriting
Agreement.
ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offering and the International Offering (together,
the “Syndicate Members ”) and their affiliates may each individually undertake a variety of activities
(as further described below) which do not form part of the underwriting or stabilizing process.
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of commercial and
investment banking, loan financing, brokerage, funds management, trading, hedging, investing and
other activities for their own account and for the account of others. In the ordinary course of their
various business activities, the Syndicate Members and their respective affiliates may purchase, sell or
hold a broad array of investments and actively trade securities, derivatives, loans, commodities,
currencies, credit default swaps and other financial instruments for their own account and for the
accounts of their customers. Such investment and trading activities may involve or relate to our assets,
securities and/or instruments and/or persons and entities with relationships with the Company and may
also include swaps and other financial instruments entered into for hedging purposes in connection
with the Group’s loans and other debt.
In relation to the H Shares, the activities of the Syndicate Members and their affiliates could
include acting as agent for buyers and sellers of the H Shares, entering into transactions with those
buyers and sellers in a principal capacity, including as a lender to initial purchasers of the H Shares
(which financing may be secured by the H Shares) in the Global Offering, proprietary trading in the H
Shares, and entering into over the counter or listed derivative transactions or listed or unlisted
securities transactions (including issuing securities such as derivative warrants listed on a stock
exchange) which have as their underlying assets, assets including the H Shares. Such transactions may
be carried out as bilateral agreements or trades with selected counterparties. Those activities may
require hedging activity by those entities involving, directly or indirectly, the buying and selling of the
H Shares, which may have a negative impact on the trading price of the H Shares. All such activities
could occur in Hong Kong and elsewhere in the world and may result in the Syndicate Members and
their affiliates holding long and/or short positions in the H Shares, in baskets of securities or indices
including the H Shares, in units of funds that may purchase the H Shares, or in derivatives related to
any of the foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities having the
H Shares as their underlying securities, whether on the Stock Exchange or on any other stock
exchange, the rules of the stock exchange may require the issuer of those securities (or one of its
affiliates or agents) to act as a market maker or liquidity provider in the security, and this will also
result in hedging activity in the H Shares in most cases.
All such activities may occur both during and after the end of the stabilizing period described in
“Structure of the Global Offering.” Such activities may affect the market price or value of the H
Shares, the liquidity or trading volume in the H Shares and the volatility of the price of the H Shares,
and the extent to which this occurs from day to day cannot be estimated.
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It should be noted that when engaging in any of these activities, the Syndicate Members will be
subject to certain restrictions, including the following:
 the Syndicate Members (other than the Stabilizing Manager or any person acting for it)
must not, in connection with the distribution of the Offer Shares, effect any transactions
(including issuing or entering into any option or other derivative transactions relating to
the Offer Shares), whether in the open market or otherwise, with a view to stabilizing or
maintaining the market price of any of the Offer Shares at levels other than those which
might otherwise prevail in the open market; and
 the Syndicate Members must comply with all applicable laws and regulations, including
the market misconduct provisions of the SFO, including the provisions prohibiting insider
dealing, false trading, price rigging and stock market manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time to time,
and expect to provide in the future, investment banking, loan financing and other services to the
Company and certain of its affiliates for which such Syndicate Members or their respective affiliates
have received or will receive customary fees and commissions.
In addition, the Syndicate Members or their respective affiliates may provide financing to
investors to finance their subscriptions of the Offer Shares in the Global Offering.
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STRUCTURE OF THE GLOBAL OFFERING
THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part of the
Global Offering. China International Capital Corporation Hong Kong Securities Limited and Huatai
Financial Holdings (Hong Kong) Limited are the Overall Coordinators of the Global Offering.
The listing of the H Shares on the Stock Exchange is sponsored by the Joint Sponsors. The
Joint Sponsors have made an application on behalf of our Company to the Listing Committee of the
Stock Exchange for the listing of, and permission to deal in, the H Shares in issue and to be issued as
mentioned in this prospectus.
54,001,200 Offer Shares will initially be made available under the Global Offering comprising:
(a) the Hong Kong Public Offering of initially 5,400,200 H Shares (subject to reallocation) in
Hong Kong as described in the sub-section ‘‘ — The Hong Kong Public Offering’’ in this
section below; and
(b) the International Offering of initially 48,601,000 H Shares (subject to reallocation and the
Over-allotment Option) outside the United States (including to professional and institutional
investors within Hong Kong) in offshore transactions in reliance on Regulation S or any other
available exemption from registration under the U.S. Securities Act, as described in the
sub-section headed “— The International Offering” in this section below.
Investors may either:
(i) apply for Hong Kong Offer Shares under the Hong Kong Public Offering; or
(ii) apply for or indicate an interest for International Offer Shares under the International
Offering,
but may not do both.
The Offer Shares will represent approximately 8.0% of the total Shares in issue immediately
following the completion of the Global Offering, assuming the Over-allotment Option is not exercised.
If the Over-allotment Option is exercised in full, the Offer Shares (including H Shares issued pursuant
to the full exercise of the Over-allotment Option) will represent approximately 9.1% of the total Shares
in issue immediately following the completion of the Global Offering and the issue of Offer Shares
pursuant to the Over-allotment Option.
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares initially offered
Our Company is initially offering 5,400,200 H Shares (subject to reallocation) for subscription
by the public in Hong Kong at the Offer Price, representing approximately 10% of the total number of
Offer Shares initially available under the Global Offering and approximately 0.8% of the total Shares
in issue immediately following the completion of the Global Offering (subject to the reallocation of
Offer Shares between the International Offering and the Hong Kong Public Offering and assuming the
Over-allotment Option is not exercised).
Allocation
Allocation of Offer Shares to investors under the Hong Kong Public Offering will be based
solely on the level of valid applications received under the Hong Kong Public Offering. The basis of
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allocation may vary, depending on the number of Hong Kong Offer Shares validly applied for by
applicants. Such allocation could, where appropriate, consist of balloting, which could mean that some
applicants may receive a higher allocation than others who have applied for the same number of
Hong Kong Offer Shares, and those applicants who are not successful in the ballot may not receive any
Hong Kong Offer Shares.
For allocation purposes only, the total number of Hong Kong Offer Shares available under the
Hong Kong Public Offering (after taking into account any reallocation referred to below) will be
divided equally into two pools (with any odd lots being allocated to pool A): pool A and pool B. The
Hong Kong Offer Shares in pool A and pool B will be allocated respectively on an equitable basis to
valid applicants who have applied for Hong Kong Offer Shares with an aggregate subscription price of
HK$5 million (excluding the brokerage, the SFC transaction levy, 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 valid applicants who have applied for Hong Kong Offer Shares with an
aggregate subscription price of more than HK$5 million (excluding the brokerage, the SFC transaction
levy, AFRC transaction levy and the Stock Exchange trading fee payable) and up to the total value in
pool B.
Applicants should be aware that applications in pool A and applications in pool B may receive
different allocation ratios. If any Hong Kong Offer Shares in one (but not both) of the pools are
unsubscribed, such unsubscribed Hong Kong Offer Shares will be transferred to the other pool to
satisfy demand in that other pool and be allocated accordingly. For the purpose of the immediately
preceding paragraph only, the ‘‘price’’ for Hong Kong Offer Shares means the price payable on
application therefor (without regard to the Offer Price as finally determined). Applicants can only
receive an allocation of Hong Kong Offer Shares from either pool A or pool B and not from both
pools. Multiple or suspected multiple applications under the Hong Kong Public Offering and any
application for more than 50% of the 5,400,200 Offer Shares initially comprised in the Hong Kong
Public Offering (that is 2,700,100 Offer Shares) 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 2,699,900 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
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STRUCTURE OF THE GLOBAL OFFERING
the Hong Kong Public Offering will increase up to 8,100,100 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.
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 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.
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, June 25, 2026.
Where the International Offer Shares are undersubscribed, if the Hong Kong Offer Shares are
also undersubscribed, the Global Offering will not proceed unless the Underwriters would subscribe or
procure subscribers for their respective applicable proportions of the Offer Shares being offered which
are not taken up under the Global Offering on the terms and conditions of this prospectus and the
Underwriting Agreements.
Applications
For details of the information, undertaking and confirmation that each applicant under the
Hong Kong Public Offering will be required to give and the price that applicants under the Hong Kong
Public Offering are required to pay, see the section headed “How to Apply for Hong Kong Offer
Shares” in this prospectus.
THE INTERNATIONAL OFFERING
Number of Offer Shares initially offered
The International Offering will consist of an offering of initially 48,601,000 H Shares,
representing approximately 90% of the total number of Offer Shares initially available under the
Global Offering (subject to reallocation and the Over-allotment Option). 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 7.2% of
the total Shares in issue immediately following the completion of the Global Offering (assuming the
Over-allotment Option is not exercised).
Allocation
Pursuant to the International Offering, the International Offer Shares will be conditionally
placed on behalf of our Company by the International Underwriters or through selling agents appointed
by them. The International Offering will include selective marketing of Offer Shares to institutional
and professional investors and other investors anticipated to have a sizable demand for such Offer
Shares. Professional investors generally include brokers, dealers, companies (including fund managers)
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STRUCTURE OF THE GLOBAL OFFERING
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 under the International Offering will be effected in accordance with
the ‘‘book-building’’ process described in the subsection headed ‘‘— Pricing — Determining the Offer
Price’’ in this section and based on a number of factors, including the level and timing of demand, total
size of the relevant investor’s invested assets or equity assets in the relevant sector and whether or not
it is expected that investor is likely to buy further H Shares, and/or hold or sell its H Shares, after the
Listing. This basis of allocation is intended to result in a distribution of the Offer Shares which is likely
to lead to the establishment of a solid and stable professional and institutional shareholder base to the
benefit of our Group and our Shareholders as a whole.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may require an
investor who has been offered (or has indicated an interest for) 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.
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 (for themselves and
on behalf of the International Underwriters).
Pursuant to the Over-allotment Option, the International Underwriters will have the right,
exercisable by the Overall Coordinators (for themselves and on behalf of the International
Underwriters) at any time from the Listing Date until 30 days after the last day for lodging applications
under the Hong Kong Public Offering, to require our Company to issue up to an aggregate of
8,100,100 additional H Shares, representing not more than 15% of the total number of Offer Shares
under the Global Offering, at the Offer Price under the International Offering to, cover over-allocations
(if any) in the International Offering. If the Over-allotment Option is exercised in full, the additional
Offer Shares to be issued pursuant thereto will represent approximately 1.2% of our issued share
capital immediately following the completion of the Global Offering and the exercise of the Over-
allotment Option. If the Over-allotment Option is exercised, an announcement will be made.
STABILIZATION
Stabilization is a practice used by underwriters in some markets to facilitate the distribution of
securities. To stabilize, the underwriters may bid for, or purchase, the securities in the secondary
market during a specified period of time, to retard and, if possible, prevent a decline in the initial
public market price of the securities below the offer price. Such transactions may be effected in all
jurisdictions where it is permissible to do so, in each case in compliance with all applicable laws and
regulatory requirements, including those of Hong Kong. In Hong Kong, the price at which stabilization
is effected is not permitted to exceed the offer price.
In connection with the Global Offering, the Stabilizing Manager (or its affiliates or any person
acting for it), on behalf of the Underwriters, may over-allocate or effect transactions with a view to
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STRUCTURE OF THE GLOBAL OFFERING
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 (or its affiliates or any person acting for it) to conduct any such stabilizing action.
Such stabilizing action, if taken, (a) will be conducted at the absolute discretion of the Stabilizing
Manager (or its affiliates or any person acting for it) and in what the Stabilizing Manager reasonably
regards as the best interest of our Company, (b) may be discontinued at any time and (c) is required to
be brought to an end within 30 days of the last day for lodging applications under the Hong Kong
Public Offering, being Thursday, July 23, 2026.
Stabilization action permitted in Hong Kong pursuant to the Securities and Futures (Price
Stabilizing) Rules of the SFO includes (a) over-allocating for the purpose of preventing or minimizing
any reduction in the market price of the H Shares, (b) 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, (c) purchasing, or agreeing to purchase, the H Shares pursuant to the
Over-allotment Option in order to close out any position established under paragraph (a) or (b) above,
(d) purchasing, or agreeing to purchase, any of the H Shares for the sole purpose of preventing or
minimizing any reduction in the market price of the H Shares, (e) selling or agreeing to sell any
H Shares in order to liquidate any position established as a result of those purchases and (f) offering or
attempting to do anything as described in paragraph (b), (c), (d) or (e) above.
Specifically, prospective applicants for and investors in the Offer Shares should note that:
(a) the Stabilizing Manager (or its affiliates or any person acting for it) may, in connection
with the stabilizing action, maintain a long position in the H Shares;
(b) there is no certainty as to the extent to which and the time or period for which the
Stabilizing Manager (or its affiliates or any person acting for it) will maintain such a long
position;
(c) liquidation of any such long position by the Stabilizing Manager (or its affiliates or any
person acting for it) and selling in the open market may have an adverse impact on the
market price of the H Shares;
(d) 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 the
30th day after the last day for lodging applications under the Hong Kong Public Offering,
being Thursday, July 23, 2026. 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;
(e) 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
(f) 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.
In order to effect stabilization actions, the Stabilizing Manager will arrange cover of up to an
aggregate of 8,100,100 H Shares representing up to approximately 15% of the number of Offer Shares
being offered initially under the Global Offering), thr ough delayed delivery arrangements with investors
who have been allocated Offer Shares in the International Offering. The delayed delivery arrangements (if
specifically agreed by an investor) relate only to the delay in the delivery of the Offer Shares to such
investor and the Offer Price for the Offer Shares allocated to such investor will be paid on the Listing Date.
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STRUCTURE OF THE GLOBAL OFFERING
Our Company will ensure or procure that an announcement in compliance with the Securities
and Futures (Price Stabilizing) Rules of the SFO will be made within seven days of the expiration of
the stabilization period.
Over-allocation
Following any over-allocation of H Shares in connection with the Global Offering, the
Stabilizing Manager (or its affiliates or any person acting for it) may cover such over-allocations by
exercising the Over-allotment Option in full or in part, by using H Shares purchased by the Stabilizing
Manager (or its affiliates or any person acting for it) in the secondary market at prices that do not
exceed the Offer Price, or by a combination of these methods.
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. Pricing for the Offer Shares for the
purpose of the various offerings under the Global Offering will be agreed on the Price Determination
Date, which is expected to be on Wednesday, June 24, 2026, by agreement between the Overall
Coordinators (for themselves and on behalf of the Underwriters) and our Company and the number of
Offer Shares to be allocated under the various offerings will be determined shortly thereafter.
The Offer Price will not be more than HK$85.20 per Offer Share, unless otherwise announced
by the Company no later than the morning of the last day for lodging applications under the Hong
Kong Public Offering, as further explained below.
A Shares on the Shenzhen Stock Exchange on the last trading day on or before the Price
Determination Date (which is accessible to the Shareholders and potential investors at ), and the Offer
Price will not be more than HK$85.20. Applicants under the Hong Kong Public Offering may be
required to pay, on application (subject to application channels), the maximum Offer Price of
HK$85.20 per Offer 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%, amounting to a total of
HK$8,605.92 for one board lot of 100 Shares.
The historical prices of our A Shares and trading volume on Shenzhen Stock Exchange are set
out below.
Period
High
(RMB)
Low
(RMB)
ADTV(1)
(A Shares)
Year ended December 31, 2023 ......................................... 193.2 68.8 2,985,226
Year ended December 31, 2024 ......................................... 119.9 58.4 4,144,039
Year ended December 31, 2025 ......................................... 126.6 63.1 14,043,315
Year of 2026 (up to the Latest Practicable Date) ............................ 127.8 62.0 25,935,444
Note:
(1) Average daily trading volume (“ ADTV”) represents daily average number of our A Shares traded over the relevant period.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, where
considered appropriate, based on the level of interest expressed by prospective professional and
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STRUCTURE OF THE GLOBAL OFFERING
institutional investors during the book-building process, and with the consent of our Company, reduce
the number of Offer Shares at any time on or prior to the morning of the last day for lodging
applications under the Hong Kong Public Offering. In such case, we will, as soon as practicable
following the decision to make such reduction, and in any event not later than the morning of the day
which is the last day for lodging applications under the Hong Kong Public Offering, cause to be
published on the websites of the Stock Exchange at www.hkexnews.hk and the Company at
www.sg-micro.com, notices of the reduction. Upon issue of such a notice, the revised number of Offer
Shares will be final and conclusive. Such notice will also include confirmation or revision, as
appropriate, of the working capital statement and the Global Offering statistics as currently set out in
the prospectus and any other financial information which may change materially as a result of such
reduction. Our Company will also, as soon as practicable following the decision to make such change,
issue a supplemental prospectus updating investors of the change in the number of Offer Shares being
offered under the Global Offering. The Global Offering must first be canceled and subsequently
relaunched on FINI pursuant to the supplemental prospectus.
Before submitting applications for the Hong Kong Offer Shares, applicants should have regard
to the possibility that any announcement of a reduction in the number of Offer Shares may not be made
until the day which is the last day for lodging applications under the Hong Kong Public Offering. In
the absence of any such notice so published, the number of Offer Shares will not be reduced.
The final Offer Price, the level of indications of interest in the Global Offering, the results of
allocations and the basis of allotment of the Hong Kong Offer Shares are expected to be announced on
Thursday, June 25, 2026 on the website of the Stock Exchange at www.hkexnews.hk and on the
website of our Company at www.sg-micro.com.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares will be conditional on:
(a) the Listing Committee granting approval for the listing of, and permission to deal in, the H
Shares to be issued pursuant to the Global Offering (including any additional H Shares that
may be issued pursuant to the exercise of the Over-allotment Option) on the Main Board
of the Stock Exchange and such approval and permission not subsequently having been
withdrawn or revoked prior to the Listing Date;
(b) the execution and delivery of the International Underwriting Agreement on or about
Wednesday, June 24, 2026; and
(c) the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting
Agreement and the obligations of the International Underwriters under the International
Underwriting Agreement becoming and remaining unconditional and not having been
terminated in accordance with the terms of the respective agreements,
in each case on or before the dates and times specified in the respective Underwriting Agreements
(unless and to the extent such conditions are validly waived on or before such dates and times) and, in
any event, not later than the date which is 30 days after the date of this prospectus.
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.
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STRUCTURE OF THE GLOBAL OFFERING
If the above conditions are not fulfilled or waived prior to the dates and times specified, the
Global Offering will lapse and the Stock Exchange will be notified immediately. Notice of the lapse of
the Hong Kong Public Offering will be published by our Company on the websites of our Company
and the Stock Exchange at www.sg-micro.com and www.hkexnews.hk, respectively, on the next day
following such lapse. In such a situation, all application monies will be returned, without interest, on
the terms set out in the section headed ‘‘How to Apply for Hong Kong Offer Shares – D. Dispatch/
Collection of H Share Certificates and Refund of Application Monies’’ in this prospectus. In the
meantime, all application monies will be held in separate bank account(s) with the receiving banks or
other bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter 155 of the Laws of
Hong Kong).
H Share certificates for the Offer Shares will only become valid evidence of title at 8:00 a.m.
on Friday, June 26, 2026, provided that the Global Offering has become unconditional in all respects at
or before that time.
DEALINGS IN THE H SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m. in
Hong Kong on Friday, June 26, 2026, it is expected that dealings in the H Shares on the Stock
Exchange will commence at 9:00 a.m. on Friday, June 26, 2026. The H Shares will be traded in board
lots of 100 H Shares each and the stock code of the H Shares will be 3661.
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HOW TO APPLY FOR HONG KONG OFFER SHARES
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
You can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you are
applying:
 are 18 years of age or older;
 have a Hong Kong address ( for the HK eIPO White Form service only); and
 are outside the United States, and are not a United States Person (as defined in
Regulation S under the U.S. Securities Act).
Unless permitted by the Listing Rules, you cannot apply for any Hong Kong Offer Shares if
you or the person(s) for whose benefit you are applying:
 are an existing Shareholder or its/his/her close associates;
 are a Director or any of his/her close associates;
 are a core connected person (as defined in the Listing Rules) of the Company or will
become a core connected person of the Company immediately upon completion of the
Global Offering; or
 have been allocated or have applied for any International Offer Shares or otherwise
participated in the International Offering.
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Wednesday, June 17,
2026 and end at 12:00 noon on Tuesday, June 23, 2026 (Hong Kong time).
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HOW TO APPLY FOR HONG KONG OFFER SHARES
To apply for Hong Kong Offer Shares, you may use one of the following application channels:
Application Channel Platform Target Investors Application Time
HK eIPO White Form
service
www.hkeipo.hk Applicants who would like
to receive a physical H Share
certificate. Hong Kong Offer
Shares successfully applied
for will be allotted and
issued in your own name.
From 9:00 a.m. on
Wednesday, June 17,
2026, to 11:30 a.m. on
Tuesday, June 23, 2026,
(Hong Kong time).
The latest time for
completing full payment
of application monies will
be 12:00 noon on
Tuesday, June 23, 2026
(Hong Kong time).
HKSCC EIPO
channel
Your 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 instructions.
Applicants who would not
like to receive a physical H
Share certificate. Hong Kong
Offer Shares successfully
applied for will be allotted
and issued in the name of
HKSCC Nominees,
deposited directly into
CCASS and credited to your
designated HKSCC
Participant’s stock account.
Contact your broker or
custodian for the earliest
and latest time for giving
such instructions, as this
may vary by broker or
custodian.
The HK eIPO White Form 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 for applications to apply for Hong Kong Offer Shares.
For those applying through the HK eIPO White Form service, once you complete payment in
respect of any application instruction given by you or for your benefit through the HK eIPO White
Form 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 application instructions are given,
you shall be deemed to have declared that only one set of 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 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 HK eIPO White Form
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 HK eIPO White Form service, you are deemed to have authorized
the HK eIPO White Form Service Provider to apply on the terms and conditions in this prospectus, as
supplemented and amended by the terms and conditions of the HK eIPO White Form service.
By instructing your broker or custodian to apply for Hong Kong Offer Shares on your behalf
through the HKSCC EIPO channel, you (and, if you are joint applicants, each of you jointly and
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severally) are deemed to have instructed and authorized HKSCC to cause HKSCC Nominees (acting as
nominee for the relevant HKSCC Participants) to apply for Hong Kong Offer Shares on your behalf
and to do on your behalf all the things stated in this prospectus and any supplement to it.
For those applying through the HKSCC EIPO channel, an actual application will be deemed to
have been made for any application instruction given by you or for your benefit to HKSCC (in which
case an application will be made by HKSCC Nominees on your behalf) provided such application
instruction has not been withdrawn or otherwise invalidated before the closing time of the Hong Kong
Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor HKSCC
Nominees shall be liable to you or any other person in respect of any actions taken by HKSCC or
HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any breach of the terms
and conditions of this prospectus.
3. Information Required to Apply
You must provide the following information with your application:
For Individual/Joint Applicants For Corporate Applicants
 Full name(s) (2) as shown on your identity document  Full name(s) (2) as shown on your identity
document
 Identity document’s issuing country or jurisdiction  Identity document’s issuing country or jurisdiction
 Identity document type, with order of priority:  Identity document type, with order of priority:
i. Hong Kong identity card (“ HKID”); or i. Legal Entity Identifier (“ LEI”) registration
document; or
ii. National identification document; or ii. Certificate of incorporation; or
iii. Passport; and iii. Business registration certificate; or
iv. Other equivalent document; and
 Identity document number  Identity document number
Notes:
(1) If you are applying through the HK eIPO White Form service, you are required to provide a valid e-mail address, a contact telephone
number and a Hong Kong address. You are also required to declare that the identity information provided by you follows the
requirements as described in Note 2 below. In particular, where you cannot provide a HKID number, you must confirm that you do not
hold a HKID card. The number of joint applicants may not exceed four. If you are a firm, the applicant must be in the individual
members’ names.
(2) The applicant’s full name as shown on their identity document must be used and the surname, given name, middle and other names (if
any) must be input in the same order as shown on the identity document. If an applicant’s identity document contains both an English and
Chinese name, both English and Chinese names must be used. Otherwise, either English or Chinese names will be accepted. The order of
priority of the applicant’s identity document type must be strictly followed and where an individual applicant has a valid HKID card
(including both Hong Kong Residents and Hong Kong Permanent Residents), the HKID number must be used when making an
application to subscribe for 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.
(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 of the joint beneficial owners. If you do not include this information, the application will
be treated as being made for your benefit
(6) If an application is made by 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.
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“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any other stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which carries no right to participate beyond
a specified amount in a distribution of either profits or capital).
For those applying through the HKSCC EIPO channel and making an application under a
power of attorney, the Overall Coordinators may accept it at their discretion and on any conditions they
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 : 100 H Shares
Permitted number of Hong Kong Offer
Shares for application and amount payable
on application/ successful allotment
: Hong Kong Offer Shares are available for application in
specified board lot sizes only. Please refer to the amount
payable associated with each specified board lot size in
the table below.
The maximum Offer Price is HK$85.20 per Offer Share,
plus brokerage of 1.0%, SFC transaction levy of
0.0027%, AFRC transaction levy of 0.00015% and the
Stock Exchange trading fee of 0.00565%.
If you are applying through the HKSCC EIPO channel,
your broker or custodian may require you to pre-fund
your application in such amount as determined by the
broker or custodian, based on the applicable laws and
regulations in Hong Kong. You are responsible for
complying with any such pre-funding requirement
imposed by your broker or custodian with respect to the
Hong Kong Offer Shares you applied for.
By instructing your broker or custodian to apply for
Hong Kong Offer Shares on your behalf through the
HKSCC EIPO channel, you (and, if you are joint
applicants, each of you jointly and severally) are
deemed to have instructed and authorized HKSCC to
cause HKSCC Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange payment of the
Offer Price, brokerage, SFC transaction levy, AFRC
transaction levy and the Stock Exchange trading fee by
debiting the relevant nominee bank account at the
designated bank for your broker or custodian.
If you are applying through the HK eIPO White Form
service, you may refer to the table below for the amount
payable for the number of H Shares you have selected.
You must pay the respective maximum amount payable
on application in full upon application for Hong Kong
Offer Shares.
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HOW TO APPLY FOR HONG KONG OFFER SHARES
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable(2)
on application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum Amount
payable(2) on
application/
successful allotment
No. of
Hong Kong
Offer
Shares
applied for
Maximum
Amount payable(2)
on application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount payable(2)
on application/
successful
allotment
HK$ HK$ HK$ HK$
100 8,605.92 2,500 215,148.10 30,000 2,581,777.25 600,000 51,635,545.20
200 17,211.85 3,000 258,177.72 40,000 3,442,369.68 700,000 60,241,469.40
300 25,817.77 3,500 301,207.35 50,000 4,302,962.10 800,000 68,847,393.60
400 34,423.70 4,000 344,236.97 60,000 5,163,554.52 900,000 77,453,317.80
500 43,029.62 4,500 387,266.59 70,000 6,024,146.95 1,000,000 86,059,242.00
600 51,635.55 5,000 430,296.21 80,000 6,884,739.35 1,500,000 129,088,863.00
700 60,241.47 6,000 516,355.45 90,000 7,745,331.78 2,000,000 172,118,484.00
800 68,847.39 7,000 602,414.69 100,000 8,605,924.20 2,700,100
(1) 232,368,559.32
900 77,453.32 8,000 688,473.93 200,000 17,211,848.40
1,000 86,059.24 9,000 774,533.17 300,000 25,817,772.60
1,500 129,088.86 10,000 860,592.42 400,000 34,423,696.80
2,000 172,118.49 20,000 1,721,184.85 500,000 43,029,621.00
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong Kong Offer Shares initially offered.
(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) or to the HK eIPO White
Form Service Provider (for applications made through the application channel of the HK eIPO White Form service) while the SFC
transaction levy, the Stock Exchange trading fee and the AFRC transaction levy will be paid to the SFC, the Stock Exchange and the
AFRC, respectively.
5. Multiple Applications Prohibited
You or your joint applicant(s) shall not make more than one application for your own benefit,
except where you are a nominee and provide the information of the underlying investor in your
application as required under the paragraph headed “— A. Application for Hong Kong Offer Shares —
3. Information Required to Apply” in this section. If you are suspected of submitting or causing to be
submitted more than one application, all of your applications will be rejected.
Multiple applications made either through (i) the HK eIPO White Form service, (ii) the
HKSCC EIPO channel or (iii) both channels concurrently are prohibited and will be rejected. If you
have made an application through the HK eIPO White Form service or the HKSCC EIPO channel,
you or the person(s) for whose benefit you have made the application shall not apply for any International
Offer Shares.
The H Share Registrar would record all applications into its system and identify suspected
multiple applications with identical names and identification document numbers according to the Best
Practice Note on Treatment of Multiple / Suspected Multiple Applications (“ Best Practice Note ”)
issued by the Federation of Share Registrars Limited.
Since applications are subject to personal information collection statements, identification
document numbers displayed are redacted.
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6. Terms and Conditions of an Application
By applying for Hong Kong Offer Shares through the HK eIPO White Form service or the
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the following things
on your behalf):
(i) undertake to execute all relevant documents and instruct and authorize us and/or the
Overall Coordinators (or their agents or nominees), 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 understood the terms and conditions and application
procedures set out in this prospectus and the designated website of the HK eIPO White
Form 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 the Hong Kong Public Offering set out
in this prospectus and they do not apply to you or the person(s) for whose benefit you
have made the application;
(v) confirm that you have read this prospectus and any supplement to it, and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made), and will not
rely on any other information or representations;
(vi) agree that we, the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall
Coordinators, the Joint Global Coordinators, the Capital Market Intermediaries, the
Joint Bookrunners, the Joint Lead Managers, the Underwriters, our and their respective
directors, officers, employees, partners, agents, advisers and other parties involved in
the Global Offering (the “ Relevant Persons ”), the H Share Registrar, the HK eIPO
White Form Service Provider and HKSCC will not be liable for any information and
representations not in this prospectus and any supplement to it;
(vii) undertake and confirm that you or the person(s) for whose benefit you have made the
application have not applied for or taken up, or indicated an interest in, and will not
apply for or take up, or indicate an interest in, any International Offer Shares nor
participated in the International Offering;
(viii) 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 specified under the paragraph headed “— G. Personal Data” in this section;
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(ix) 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;
(x) 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;
(xi) confirm that you are aware of the situations specified in the paragraph headed “— C.
Circumstances in Which You Will Not Be Allocated Hong Kong Offer Shares” in this
section;
(xii) 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;
(xiii) agree and warrant that you have complied with the Companies Ordinance, the
Companies (Winding Up and Miscellaneous Provisions) Ordinance, the PRC Company
Law, 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;
(xiv) represent, warrant and undertake that (a) you understand that the Hong Kong Offer
Shares have not been and will not be registered under the U.S. Securities Act; and
(b) you and the person(s) for whose benefit you have made the application are outside
the United States (as defined in Regulation S) or are a person described in paragraph
(h)(3) of Rule 902 of Regulation S;
(xv) confirm that (a) your application or HKSCC Nominees’ application on your behalf is
not financed directly or indirectly by the Company, any of the directors, chief
executives, substantial shareholder(s) or existing shareholder(s) of the Company or any
of its subsidiaries or any of their respective close associates; and (b) you are not
accustomed or will not be accustomed to taking instructions from the Company, any of
the directors, chief executives, substantial shareholder(s) or existing shareholder(s) of
the Company or any of its subsidiaries or any of their respective close associates in
relation to the acquisition, disposal, voting or other disposition of the Shares registered
in your name or otherwise held by you;
(xvi) warrant that the information you have provided is true and accurate;
(xvii) 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;
(xviii) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated to
you under the application;
(xix) authorize us to place your name(s) or the name of HKSCC Nominees on our register of
members as the holder(s) of any Hong Kong Offer Shares allocated to you and such
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other registers as may be required under the Memorandum and Articles of Association,
and we and/or our agents to send any H Share certificate(s) and/or any HK eIPO
White Form e-Auto Refund payment instructions and/or any refund check(s) to you or
the first-named applicant for joint application to the address specified in your
application instructions by ordinary post at your own risk, unless you are eligible to
collect the H Share certificate(s) and/or refund check(s) in person;
(xx) 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;
(xxi) (if the application is made for your own benefit) warrant that no other application has
been or will be made for your benefit by giving electronic application instructions to
HKSCC directly or indirectly or through the application channel of the HK eIPO
White Form service or by anyone as your agent or by any other person; and
(xxii) (if you are making the application as an agent for the benefit of another person) warrant
that (a) 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 application instructions to HKSCC or the HK eIPO White Form Service
Provider and (b) you have due authority to give electronic application instructions on
behalf of that other person as its agent.
B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successfully allocated any Hong Kong Offer Shares through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel
Website The designated results of allocations website at
www.tricor.com.hk/ipo/result or www.hkeipo.hk/IPOResult
with a “search by ID” function.
24 hours, from 11:00 p.m.
on Thursday, June 25,
2026 to 12:00 midnight on
Wednesday, July 1, 2026
(Hong Kong time).
The full list of (i) wholly or partially successful applicants using the
HK eIPO White Form service and HKSCC EIPO channel, and
(ii) the number of Hong Kong Offer Shares conditionally allotted to
them, among other things, will be displayed at www.tricor.com.hk/
ipo/result or www.hkeipo.hk/IPOResult.
The Stock Exchange’s website at www.hkexnews.hk and our
website at www.sg-micro.com, which will provide links to the
above-mentioned websites of the H Share Registrar.
No later than 11:00 p.m.
on Thursday, June 25,
2026 (Hong Kong time).
Telephone +852 3691 8488
- the allocation results telephone enquiry line provided by the
H Share Registrar
Between 9:00 a.m. and
6:00 p.m., from Friday,
June 26, 2026 to
Thursday, July 2, 2026
(except Saturday, Sunday
and public holidays in
Hong Kong)
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For those applying through the HKSCC EIPO channel, you may also check with your broker
or custodian from 6:00 p.m. on Wednesday, June 24, 2026 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Wednesday, June 24, 2026 (Hong Kong time) 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 final Offer Price, the level of indications of interest in
the International Offering, the level of applications in the Hong Kong Public Offering and the basis of
allocations of the Hong Kong Offer Shares on the Stock Exchange’s website at www.hkexnews.hk
and our website at www.sg-micro.com by no later than 11:00 p.m. on Thursday, June 25, 2026
(Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
You should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying:
1. If your application is revoked:
Your application or the application made by HKSCC Nominees on your behalf may be revoked
pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and nominees
have full discretion to reject or accept any application, or to accept only part of any application,
without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not grant
permission to list the Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that longer
period within three weeks of the closing date of the application lists.
4. IF:
 you make multiple applications or suspected multiple applications. For details, see “— A.
Application for Hong Kong Offer Shares 5. — Multiple Applications Prohibited” in this
section;
 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; or
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 the Company or the Overall Coordinators believe that by accepting your application, it or
they 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.
D. DISPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
You will receive one H Share certificate for all Hong Kong Offer Shares allotted to you under
the Hong Kong Public Offering (except pursuant to applications made through the HKSCC EIPO
channel where the H Share certificates will be deposited into CCASS as described below).
No temporary document of title will be issued in respect of the H Shares. No receipt will be
issued for sums paid on application.
H Share certificates will only become valid evidence of title at 8:00 a.m. on the Listing Date,
which is expected to be Friday, June 26, 2026 (Hong Kong time), provided that the Global Offering
has become unconditional in all respects and the right of termination described in the section headed
“Underwriting” in this prospectus has not been exercised. Investors who trade H Shares prior to the
receipt of H Share certificates or prior to 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.
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The following sets out the relevant procedures and time:
HK eIPO White Form service HKSCC EIPO channel
Despatch/collection of H Share certificate
For application of
1,000,000 Hong
Kong Offer Shares
or more
Collection in person from the H Share
Registrar, Tricor Investor Services
Limited at 17/F, Far East Finance Centre,
16 Harcourt Road, Hong Kong
H Share certificate(s) will be issued in
the name of HKSCC Nominees,
deposited into CCASS and credited to
your designated HKSCC Participant’s
stock account.
Time: from 9:00 a.m. to 1:00 p.m. on
Friday, June 26, 2026 (Hong Kong time)
No action by you is required.
If you are an individual, you must not
authorize any other person to collect for
you. If you are a corporate applicant,
your authorized representative must bear
a letter of authorization from your
corporation stamped with your
corporation’s chop.
Both individuals and authorized
representatives must produce, at the time
of collection, evidence of identity
acceptable to the H Share Registrar.
Note: If you do not collect your H Share
certificate(s) personally within the time
above, it/they will be sent to the address
specified in your application instructions
by ordinary post at your own risk.
For application of less
than 1,000,000
Hong Kong Offer
Shares
Your H Share certificate(s) will be sent to
the address specified in your application
instructions by ordinary post at your own
risk.
Date: Thursday, June 25, 2026
Refund mechanism for surplus application monies paid by you
Date Friday, June 26, 2026 Subject to the arrangement between you
and your broker or custodian.
Responsible party H Share Registrar Your broker or custodian.
Application monies
paid through single
bank account
HK eIPO White Form e-Auto Refund
payment instructions to your designated
bank account.
Your broker or custodian will arrange
refund to your designated bank account
subject to the arrangement between you
and it.
Application monies
paid through
multiple bank
accounts
Refund check(s) will be dispatched to the
address specified in your application
instructions by ordinary post at your own
risk.
Except in the event of any Severe Weather Signals (as defined below) in force in Hong Kong in
the morning on Thursday, June 25, 2026 rendering it impossible for the relevant H Share certificates
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to be dispatched to HKSCC in a timely manner, we shall procure the H Share Registrar to arrange for
delivery of the supporting documents and H Share certificates in accordance with the contingency
arrangements as agreed between them. For details, see “— E. Severe Weather Arrangements” in this
section.
E. SEVERE WEATHER ARRANGEMENTS
The application lists will not open or close on Tuesday, June 23, 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, June 23,
2026 (Hong Kong time).
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 (Hong Kong time).
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.sg-micro.com of the revised timetable.
If a Severe Weather Signal is hoisted on Thursday, June 25, 2026, the H Share Registrar will make
appropriate arrangements for the delivery of the H Share certificates to the CCASS Depository’s service
counter so that they would be available for trading on Friday, June 26, 2026, and for application of less than
1,000,000 Hong Kong Offer Shares, despatch of physical H Share certificate(s) will be made by ordinary
post when the post office re-opens after the Severe Weather Signal is lowered or canceled (e.g. in the
afternoon of Thursday, June 25, 2026 or on Friday, June 26, 2026).
If a Severe Weather Signal is hoisted on Friday, June 26, 2026, for application of 1,000,000
Hong Kong Offer Shares or more, physical H Share certificate(s) will be available for collection in
person at the H Share Registrar’s office after the Severe Weather Signal is lowered or canceled (e.g. in
the afternoon of Friday, June 26, 2026 or on Monday, June 29, 2026).
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share certificates.
F. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the Stock
Exchange and we comply with the stock admission requirements of HKSCC, the Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect
from the date of commencement of dealings in the Shares on the Stock Exchange or any other date
HKSCC chooses. Settlement of transactions between Exchange Participants is required to take place in
CCASS on the second settlement day after any trading day.
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All activities under CCASS are subject to the General Rules of HKSCC and the HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into CCASS.
You should seek the advice of your broker or other professional advisers for details of those
settlement arrangements 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. Such
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 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.
3. Purposes
Your personal data may be used, held, processed and/or stored (by whatever means) for the
following purposes:
 processing your application and refund check and HK eIPO White Form e-Auto 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;
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 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 Company’s register of members;
 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 for and
holders of the H Shares and/or regulators and/or any other purposes to which applicants
for and holders of the H Shares may from time to time agree.
4. Transfer of Personal Data
Personal data held by the Company and the H Share Registrar relating to the applicants for and
holders of Hong Kong Offer Shares will be kept confidential but the Company and the H Share
Registrar may, to the extent necessary for achieving any of the above purposes, disclose, obtain or
transfer (whether within or outside Hong Kong) the personal data to, from or with any of the following:
 the Company’s appointed agents such as financial advisers, receiving 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, in each case for the purposes of providing its
services or facilities or performing its functions in accordance with its rules or procedures
and operating FINI and CCASS (including where applicants for the Hong Kong Offer
Shares request a deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the H Share
Registrar in connection with their respective business operations;
 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 purposes 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 for and
holders of Hong Kong Offer Shares for as long as necessary to fulfill the purposes for which the
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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, at the Company’s registered address disclosed in the section
headed “Corporate Information” in this prospectus or as notified from time to time, for the attention of
the joint company secretaries, or the H Share Registrar for the attention of the privacy compliance
officer.
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APPENDIX I ACCOUNTANTS’ REPORT
Ernst & Young Group Limited
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
979
27
Tel : +852 2846 9888
Fax : +852 2868 4432
ey.com
The following is the text of a report received from the independent reporting accountants, Ernst &
Young, Certified Public Accountants, Hong Kong, prepared for the purpose of incorporation in this
Prospectus.
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF SG MICRO CORP AND CHINA INTERNATIONAL CAPITAL
CORPORATION HONG KONG SECURITIES LIMITED AND HUATAI FINANCIAL
HOLDINGS (HONG KONG) LIMITED
Introduction
We report on the historical financial information of SG Micro Corp (the “Company”) and its
subsidiaries (together, the “Group”) set out on pages I-3 to I-104, which comprises the consolidated
statements of profit or loss, the consolidated statements of comprehensive income, the consolidated
statements of changes in equity and the consolidated statements of cash flows of the Group for each of
the years ended 31 December 2023, 2024 and 2025 (the “Relevant Periods”), and the consolidated
statements of financial position of the Group and the statements of financial position of the Company
as at 31 December 2023, 2024 and 2025 and material accounting policy information and other
explanatory information (together, the “Historical Financial Information”). The Historical Financial
Information set out on pages I-15 to I-104 forms an integral part of this report, which has been
prepared for inclusion in the prospectus of the Company dated 17 June 2026 (the “Prospectus”) in
connection with the initial listing of the shares of the Company on the Main Board of The Stock
Exchange of Hong Kong Limited (the “Stock Exchange”).
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of the Historical Financial
Information that gives a true and fair view in accordance with the basis of preparation set out in note
2.1 to the Historical Financial Information, and for such internal control as the directors determine is
necessary to enable the preparation of the Historical Financial Information that is free from material
misstatement, whether due to fraud or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to report
our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment
Circular Reporting Engagements 200 Accountants’ Reports on Historical Financial Information in
Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).
This standard requires that we comply with ethical standards and plan and perform our work to obtain
reasonable assurance about whether the Historical Financial Information is free from material
misstatement.
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the reporting
I-1


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APPENDIX I ACCOUNTANTS’ REPORT
accountants’ judgment, including the assessment of risks of material misstatement of the Historical
Financial Information, whether due to fraud or error. In making those risk assessments, the reporting
accountants consider internal control relevant to the entity’s preparation of the Historical Financial
Information that gives a true and fair view in accordance with the basis of preparation set out in
note 2.1 to the Historical Financial Information, in order to design procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Our work also included evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the accountants’
report, a true and fair view of the financial position of the Group and the Company as at 31 December
2023, 2024 and 2025, and of the financial performance and cash flows of the Group for the years then
ended in accordance with the basis of preparation set out in note 2.1 to the Historical Financial
Information.
Report on matters under the Rules Governing the Listing of Securities on the Stock Exchange
and the Companies (Winding Up and Miscellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying Financial
Statements as defined on page I-3 have been made.
Dividends
We refer to note 12 to the Historical Financial Information which contains information about
the dividends paid by the Company in respect of the Relevant Periods.
Ernst & Young
Certified Public Accountants
Hong Kong
17 June 2026
I-2


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


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APPENDIX I ACCOUNTANTS’ REPORT
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Year ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue .............................................. 5 2,615,716 3,346,983 3,898,055
Cost of sales ........................................... (1,440,156) (1,766,139) (2,095,593)
Gross profit .......................................... 1,175,560 1,580,844 1,802,462
Other income and gains .................................. 6 120,963 108,309 193,378
Selling and marketing expenses ........................... (198,571) (234,184) (258,450)
Administrative expenses ................................. (91,409) (106,086) (125,874)
Research and development expenses ........................ (737,074) (870,747) (1,045,195)
Impairment losses on financial assets and contract assets, net .... 7 (1,677) (1,086) (2,457)
Other expenses ......................................... (3,697) (2,606) (9,527)
Finance costs .......................................... 8 (2,277) (2,242) (11,996)
Share of (losses)/profits of associates ....................... (7,679) 12,581 7,549
PROFIT BEFORE TAX ................................ 7 254,139 484,783 549,890
Income tax credit/(expense) .............................. 1 1 15,798 6,379 (15,515)
PROFIT FOR THE YEAR .............................. 269,937 491,162 534,375
Attributable to:
Owners of the parent ................................ 280,768 500,249 547,060
Non-controlling interests ............................. (10,831) (9,087) (12,685)
EARNINGS PER SHARE FOR PROFIT ATTRIBUTABLE
TO OWNERS OF THE PARENT:
Basic ............................................ 1 3 0.46 0.82 0.89
Diluted ........................................... 1 3 0.46 0.81 0.88
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APPENDIX I ACCOUNTANTS’ REPORT
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS ........ 269,937 491,162 534,375
Other comprehensive income that may be reclassified to profit or loss in
subsequent periods:
Exchange differences on translation of foreign operations ............... 4,205 4,783 (9,641)
Others ....................................................... 3 5 2 3 ( 118)
Other comprehensive income/(loss) for the year, net of tax .................. 4,240 4,806 (9,759)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR ............... 274,177 495,968 524,616
Attributable to:
Owners of the parent ............................................ 285,008 505,055 537,301
Non-controlling interests ......................................... (10,831) (9,087) (12,685)
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APPENDIX I ACCOUNTANTS’ REPORT
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment ............................... 1 4 545,191 691,094 711,825
Other intangible assets ..................................... 1 7 33,743 52,837 85,978
Right-of-use assets ........................................ 1 6 61,747 52,060 38,837
Goodwill ............................................... 1 8 80,875 78,692 301,277
Deferred tax assets ........................................ 1 9 161,791 175,896 151,264
Investments in associates ................................... 2 0 423,360 508,329 555,364
Time deposits ............................................ 2 6 10,182 379,427 371,754
Financial assets at fair value through profit or loss, non current ..... 2 1 109,163 121,849 115,991
Other non-current assets ................................... 2 2 32,336 20,321 23,371
Total non-current assets .................................. 1,458,388 2,080,505 2,355,661
CURRENT ASSETS
Inventories .............................................. 2 3 901,367 1,164,817 1,448,216
Trade and bills receivables at amortised cost ................... 2 4 166,472 232,764 362,830
Trade and bills receivables at fair value through other
comprehensive income .................................. — — 2 6 0
Contract assets ........................................... {{ 2,084
Prepayments, other receivables and other assets ................. 2 5 86,236 100,084 137,634
Financial assets at fair value through profit or loss ............... 2 1 769,093 1,378,000 1,340,087
Cash and cash equivalents .................................. 2 6 1,303,007 813,194 1,181,028
Time deposits ............................................ 2 6 — — 81,810
Restricted cash ........................................... 2 6 22,289 1,755 44,540
Total current assets ...................................... 3,248,464 3,690,614 4,598,489
CURRENT LIABILITIES
Trade payables ........................................... 2 7 264,141 316,000 400,910
Other payables and accruals ................................ 2 8 321,780 478,419 470,629
Interest-bearing bank borrowings ............................ 2 9 { 36,579 329,729
Lease liabilities .......................................... 1 6 17,884 19,565 12,752
Contract liabilities ........................................ 3 0 14,894 18,307 18,389
Total current liabilities ................................... 618,699 868,870 1,232,409
NET CURRENT ASSETS ................................ 2,629,765 2,821,744 3,366,080
TOTAL ASSETS LESS CURRENT LIABILITIES ........... 4,088,153 4,902,249 5,721,741
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings ............................ 2 9 — 34,121 67,172
Lease liabilities .......................................... 1 6 26,992 14,370 7,767
Deferred tax liabilities ..................................... 1 9 50,240 56,726 54,799
Other payables and accruals ................................ 2 8 45,581 72,071 8,703
Deferred income ......................................... 3 1 71,516 75,701 68,195
Other non-current liabilities ................................ 3 2 50,000 50,000 187,999
Total non-current liabilities ............................... 244,329 302,989 394,635
NET ASSETS ........................................... 3,843,824 4,599,260 5,327,106
I-6


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APPENDIX I ACCOUNTANTS’ REPORT
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION—continued
As at 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
EQUITY
Equity attributable to owners of the parent
Share capital ............................................ 3 3 469,487 473,450 620,063
Reserves ................................................ 3 5 3,381,060 4,135,777 4,674,322
3,850,547 4,609,227 5,294,385
Non-controlling interests ................................... (6,723) (9,967) 32,721
Total equity ............................................ 3,843,824 4,599,260 5,327,106
I-7


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APPENDIX I ACCOUNTANTS’ REPORTCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to owners of the parent
Notes
Share
capital
Capital
reserves*
Share-
based
payment
reserve*
Reserve
funds*
Exchange
fluctuation
reserve*
Other
reserves*
Retained
profits* Total
Non-controlling
interests
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2023 ............ 358,061 499,653 416,369 179,031 20,800 82,594 1,909,950 3,466,458 (15,779) 3,450,679
Profit for the year ................. { {{{ {{ 280,768 280,768 (10,831) 269,937
Other comprehensive income for the
year:
Share of OCI of associates ....... { {{{ { 35 { 35 { 35
Exchange differences on translation
of the financial statements ...... { {{{ 4,205 {{ 4,205 { 4,205
Total comprehensive income for the
year ........................... { {{{ 4,205 35 280,768 285,008 (10,831) 274,177
Equity-settled share-based payment
schemes ........................ 3,580 199,513 (72,678) {{ { { 130,415 { 130,415
Tax effect from equity-settled
share-based payment schemes ....... {{ (14,404) {{ { { (14,404) { (14,404)
Share-based payment compensation .... 3 4 {{ 116,860 {{ { { 116,860 1,931 118,791
Acquisition of non-controlling
interests ........................ { (17,581) {{ {{ { (17,581) (935) (18,516)
Capital contribution from
non-controlling shareholders ........ { (18,891) {{ {{ { (18,891) 18,891 {
Transfer from retained profits ......... {{ { 30,736 {{ (30,736) {{ {
2022 final dividend settled by cash ..... 1 2 { {{{ {{ (107,846) (107,846) { (107,846)
Capital reserve converted to capital .... 3 5 107,846 (107,846) { { { {{{ {{
Share of capital reserve of associates . . . { {{{ { 10,528 { 10,528 { 10,528
Balance at 31 December 2023 ........ 469,487 554,848 446,147 209,767 25,005 93,157 2,052,136 3,850,547 (6,723) 3,843,824
I-8


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APPENDIX I ACCOUNTANTS’ REPORTCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—continued
Attributable to owners of the parent
Notes
Share
capital
Capital
reserves*
Share-
based
payment
reserve*
Reserve
funds*
Exchange
fluctuation
reserve*
Other
reserves*
Retained
profits* Total
Non-controlling
interests
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2024 ............ 469,487 554,848 446,147 209,767 25,005 93,157 2,052,136 3,850,547 (6,723) 3,843,824
Profit for the year .................. {{{{ {{ 500,249 500,249 (9,087) 491,162
Other comprehensive income for the
year:
Share of OCI of associates ........ {{{{ { 23 { 23 { 23
Exchange differences on translation
of the financial statements ...... {{{{ 4,783 {{ 4,783 { 4,783
Total comprehensive income for the
year ........................... {{{{ 4,783 23 500,249 505,055 (9,087) 495,968
Equity-settled share-based payment
schemes ........................ 3,963 271,533 (61,152) {{ { { 214,344 { 214,344
Tax effect from equity-settled
share-based payment schemes ....... {{ 949 {{ { { 949 { 949
Share-based payment compensation .... 3 4 {{ 81,468 {{ { { 81,468 3,368 84,836
Capital contribution from non-controlling
shareholders ..................... { (2,275) {{ {{ { (2,275) 2,475 200
Transfer from retained profits ......... {{{ 26,958 {{ (26,958) {{ {
2023 final dividend settled by cash ..... 1 2 {{{{ {{ (47,073) (47,073) { (47,073)
Share of capital reserve of associates .... {{{{ { 6,212 { 6,212 { 6,212
Balance at 31 December 2024 ........ 473,450 824,106 467,412 236,725 29,788 99,392 2,478,354 4,609,227 (9,967) 4,599,260
I-9


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APPENDIX I ACCOUNTANTS’ REPORTCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—continued
Attributable to owners of the parent
Notes
Share
capital
Capital
reserves*
Share-
based
payment
reserve*
Reserve
funds*
Exchange
fluctuation
reserve*
Other
reserves*
Retained
profits* Total
Non-controlling
interests
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2025 .................. 473,450 824,106 467,412 236,725 29,788 99,392 2,478,354 4,609,227 (9,967) 4,599,260
Profit for the year ........................ { {{{ {{ 547,060 547,060 (12,685) 534,375
Other comprehensive income for the year:
Share of OCI of associates ............. { {{{ { (118) { (118) { (118)
Exchange differences on translation of the
financial statements ................. { {{{ (9,641) {{ (9,641) { (9,641)
Total comprehensive income for the year .... { {{{ (9,641) (118) 547,060 537,301 (12,685) 524,616
Equity-settled share-based payment schemes . . . 4,021 292,866 (69,643) {{ { { 227,244 { 227,244
Tax effect from equity-settled share-based
payment schemes ....................... {{ (5,840) {{ { { (5,840) { (5,840)
Share-based payment compensation .......... 3 4 {{ 152,411 {{ { { 152,411 6,702 159,113
Acquisition of non-controlling interests ........ { (39,920) {{ {{ { (39,920) 36,578 (3,342)
Effect on non-controlling interests of the
acquisition of a subsidiary ................. { {{{ {{ { { 12,093 12,093
To acquire non-controlling interests obligations
arising from acquisitions of subsidiaries** . . . { (130,580) {{ {{ { (130,580) { (130,580)
Capital reserve converted to capital ........... 3 5 142,592 (142,592) { { { {{{ {{
Transfer from retained profits ............... — — — 54,706 — — (54,706) — — —
2024 final dividend settled by cash ........... { {{{ {{ (95,062) (95,062) { (95,062)
Share of capital reserve of associates .......... { {{{ { 39,604 { 39,604 { 39,604
Balance at 31 December 2025 .............. 620,063 803,880 544,340 291,431 20,147 138,878 2,875,646 5,294,385 32,721 5,327,106
* These reserve accounts comprise the consolidated reserves of RMB3,381,060,000, RMB4,135,777,000 and RMB4,674,322,000 in the consolidated stat ement of financial position as at 31 December
2023, 2024 and 2025, respectively.
** When certain subsidiaries meet specific performance criteria, the non-controlling shareholders of the corresponding subsidiaries have the rig ht to demand the Company to purchase their remaining
shares. In response, the Company recognized this obligation as a financial liability, with the corresponding amount charged to equity.
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--- page 302 ---
APPENDIX I ACCOUNTANTS’ REPORT
CONSOLIDATED STATEMENTS OF CASH FLOWS
Notes Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax ............................................ 254,139 484,783 549,890
Adjustments for:
Finance costs ........................................... 8 2,277 2,242 11,996
Listing expense ......................................... — — —
Foreign exchange differences, net .......................... 6 ,7 (415) (6,204) 8,869
Share of losses/(profits) of associates ........................ 7,679 (12,581) (7,549)
Gains on disposal of items of property, plant and equipment,
intangible assets and right-of-use assets, net ................ 6 ,7 (62) (3,283) (1,009)
Depreciation of property, plant and equipment ................ 7,14 101,555 125,154 150,120
Depreciation of right-of-use assets .......................... 7,16 22,599 23,788 22,047
Amortization of intangible assets ........................... 7,17 13,932 19,172 25,678
Amortization of deferred income ........................... 3 1 (7,303) (11,005) (39,447)
Impairment losses on goodwill ............................. 7,18 { 2,183 —
Impairment of contract assets .............................. 7 — — 4 1 0
Impairment losses on financial assets, net .................... 1,677 1,086 2,047
Fair value losses/(gains), net:
Equity investments at fair value through profit or loss ...... 7 3,134 (3,147) (26,479)
Wealth management products ......................... 6 , 7 (1,602) (7,407) (16,030)
Interest income ......................................... 6 (34,720) (31,687) (30,061)
Gains on disposal of investments at fair value through profit or
loss ................................................ 7 (18,230) (18,597) (18,616)
Share-based payment expenses ............................ 7,34 118,791 84,836 159,113
Increase in inventories ................................... (199,443) (263,450) (270,924)
Increase in trade and bills receivables at amortised cost ......... (56,546) (67,517) (116,057)
Increase in trade and bills receivables at fair value through other
comprehensive income ................................. — — (260)
Increase in contract assets .................................... {{ (122)
(Increase)/decrease in prepayments, other receivables and other
assets ................................................... (31,011) (1,966) 18,335
Increase/(decrease) in trade payables ............................ (22,781) 51,859 81,944
Increase/(decrease) in contract liabilities ......................... (4,667) 3,413 (1,668)
Increase/(decrease) in other payables and accruals ................. (42,113) 119,863 (27,672)
Increase in deferred government grants .......................... 1,600 — —
(Increase)/decrease in restricted cash ............................ (7,616) 20,534 (43,975)
Cash generated from operations ................................ 100,874 512,069 430,580
Interest received ............................................ 34,720 31,687 15,671
Income tax paid ............................................ 26,202 (9,607) (11,872)
Net cash flows from operating activities ......................... 161,796 534,149 434,379
I-11


--- page 303 ---
APPENDIX I ACCOUNTANTS’ REPORT
CONSOLIDATED STATEMENTS OF CASH FLOWS—continued
Notes Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of wealth management products .......... 2,092,500 2,563,500 5,107,000
Proceeds from disposal of items of property, plant and equipment,
intangible assets and other non-current assets ................ 4 { 2,154
Proceeds from disposal of time deposits upon maturity ........... {{ 160,000
Proceeds of the income from time deposits .................... {{ 9,511
Purchases of items of property, plant and equipment ............. (204,032) (209,026) (232,643)
Purchase of time deposits .................................. (10,000) (362,979) (229,258)
Additions to other intangible assets .......................... (29,218) (31,287) (23,523)
Purchases of investments in associates ........................ (19,867) (68,000) {
Dividend from equity investments at fair value through profit or
loss ................................................. {{ 311
Dividend from associates .................................. {{ 1,847
Proceeds of the income from wealth management products ....... 18,230 18,286 33,464
Purchases of wealth management products .................... (2,332,000) (3,165,000) (5,080,000)
Proceeds from disposal of equity investments at fair value through
profit or loss .......................................... {{ 59,432
Purchase of subsidiaries ................................... {{ (254,135)
Intentional deposit of the purchase of an investment ............. {{ (5,000)
Payment the performance guarantee for project funds ............ (1,190) (1,190) {
Refund the performance guarantee for project funds ............. { 1,190 1,190
Purchases of equity investments at fair value through profit or
loss ................................................. (64,420) (9,000) (15,000)
Receipt of government grants for property, plant and equipment . . . 8,874 15,190 31,941
Net cash flows used in investing activities ..................... (541,119) (1,248,316) (432,709)
I-12


--- page 304 ---
APPENDIX I ACCOUNTANTS’ REPORT
CONSOLIDATED STATEMENTS OF CASH FLOWS—continued
Notes Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares ................................. 130,415 214,344 227,244
Contributions from non-controlling shareholders of subsidiaries ..... 50,000 200 {
New bank loans ............................................ { 70,646 362,554
Interest paid ............................................... { (451) (3,258)
Payment of lease payments ................................... 1 6 (23,780) (22,537) (22,543)
Prepayments for the right of use assets .......................... (550) (1,125) {
Payment of bank and other borrowings ......................... {{ (62,585)
Payment of listing expense ................................... {{ (18,262)
Acquisition of non-controlling interests ......................... ( 8,924) { (3,342)
Dividends paid ............................................ (107,846) (47,073) (95,062)
Net cash flows from financing activities ........................ 39,315 214,004 384,746
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS ........................................ (340,008) (500,163) 386,416
Cash and cash equivalents at beginning of year ................... 1,638,363 1,303,007 813,194
Effect of foreign exchange rate changes, net ..................... 4,652 10,350 (18,582)
CASH AND CASH EQUIVALENTS AT END OF YEAR ......... 1,303,007 813,194 1,181,028
ANALYSIS OF BALANCES OF CASH AND CASH
EQUIVALENTS
Cash and bank balances ..................................... 1,325,296 814,949 1,225,568
Restricted cash ............................................ (22,289) (1,755) (44,540)
Cash and cash equivalents as stated in the consolidated statement of
financial position ......................................... 1,303,007 813,194 1,181,028
Cash and cash equivalents as stated in the consolidated statement of
cash flows .............................................. 1,303,007 813,194 1,181,028
I-13


--- page 305 ---
APPENDIX I ACCOUNTANTS’ REPORT
STATEMENT OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment ........................................... 1 4 396,191 277,038 278,679
Investment properties .................................................. 1 5 { 148,739 143,407
Right-of-use assets .................................................... 1 6 39,674 26,112 11,959
Other intangible assets ................................................. 1 7 24,750 45,351 44,173
Goodwill ............................................................ 1 8 24,484 24,484 24,484
Investment in subsidiaries .............................................. 4 5 422,989 513,940 947,203
Investments in associates ............................................... 2 0 423,360 508,329 555,364
Financial assets at fair value through profit or loss, non current ................. 2 1 77,247 86,592 104,567
Deferred tax assets .................................................... 1 9 164,713 180,067 171,255
Time deposits ........................................................ 2 6 { 368,915 371,754
Other non-current assets ................................................ 2 2 30,366 15,924 18,286
Total non-current assets .............................................. 1,603,774 2,195,491 2,671,131
CURRENT ASSETS
Inventories .......................................................... 2 3 774,098 969,934 1,226,959
Trade and bills receivables at amortised cost ................................ 2 4 79,335 160,423 273,686
Prepayments, other receivables and other current assets ....................... 2 5 63,239 56,946 93,052
Financial assets at fair value through profit or loss, current .................... 2 1 704,344 1,338,813 1,242,018
Due from subsidiaries .................................................. 4 5 213,855 267,157 192,823
Restricted cash ....................................................... 2 6 21,099 565 44,250
Time deposits ........................................................ 2 6 — — 65,309
Cash and cash equivalents .............................................. 2 6 952,636 387,516 758,757
Total current assets .................................................. 2,808,606 3,181,354 3,896,854
CURRENT LIABILITIES
Trade payables ....................................................... 2 7 193,650 267,490 330,871
Contract liabilities .................................................... 3 0 5,489 7,908 7,899
Due to subsidiaries .................................................... 4 5 11,818 91,149 283,371
Interest-bearing bank borrowings-current liabilities .......................... 2 9 — — 300,928
Other payables and accruals ............................................. 2 8 214,209 263,521 202,632
Lease liabilities ....................................................... 1 6 13,037 11,860 3,926
Total current liabilities ............................................... 438,203 641,928 1,129,627
NET CURRENT ASSETS ............................................. 2,370,403 2,539,426 2,767,227
TOTAL ASSETS LESS CURRENT LIABILITIES ........................ 3,974,177 4,734,917 5,438,358
NON-CURRENT LIABILITIES
Lease liabilities-non current ............................................. 1 6 21,726 8,387 1,670
Other payables and accruals ............................................. 2 8 42,224 31,521 —
Deferred income ...................................................... 3 1 68,545 59,281 47,842
Deferred tax liabilities ................................................. 1 9 14,965 16,802 —
Total non-current liabilities ............................................ 147,460 115,991 49,512
Net assets ........................................................... 3,826,717 4,618,926 5,388,846
EQUITY
Share capital ......................................................... 3 3 469,487 473,450 620,063
Reserves ............................................................ 3 5 3,357,230 4,145,476 4,768,783
TOTAL EQUITY .................................................... 3,826,717 4,618,926 5,388,846
I-14


--- page 306 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE INFORMATION
SG Micro Corp (hereinafter referred to as “the Company”) is a limited company registered in
Beijing, Chinese Mainland on 26 January 2007. The registered address of the Company is Room
4-1106, 11th Floor, No. 87, Xisanhuan North Road, Haidian District, Beijing, the People’s Republic of
China (the “PRC”). On 6 June 2017, the Company’s A shares were listed on the Shenzhen Stock
Exchange.
During the Relevant Periods, the Company and its subsidiaries (hereinafter collectively referred
to as “the Group” ) are principally engaged in designing, developing and selling analog ICs and sensors
that sense, amplify, convert and power

 forming the fundamental building blocks of all electronic
systems. These products are widely applied in Industrial & Energy, Automotive, Networking &
Computing and Consumer Electronics.
As at 31 December 2025, the Company had direct and indirect interests in its subsidiaries, all of
which are private limited liability companies (or, if incorporated outside Hong Kong, have
substantially similar characteristics to a private company incorporated in Hong Kong). The particulars
of the Company’s principal subsidiaries are as follows:
Name* Notes
Place and date of
incorporation/
registration and place
of operations
Registered
share capital
Percentage of equity
attributable to the
Company
Principal activitiesDirect Indirect
(in thousand)
SG MICRO (HK) LIMITED ..... a
Hong Kong
05 December 2005 HKD10 100.00% —
Development of
semiconductor
technology,
technology
transfer, sales
and trade
SHANGHAI SG MICRO CO.,
LTD. ...................... b
PRC/Shanghai
13 October 2016 RMB30,000 100.00% —
R&D and sales
service
SHANGHAI PINGSHENG
MICRO CO., LTD. .......... b
PRC/Shanghai
26 November 2018 RMB2,450 100.00% — R&D
SHEN AN MICRO CO., LTD. . . . b
PRC/Hangzhou
19 August 2019 RMB16,000 56.00% — R&D
SG MICRO SUZHOU CO.,
LTD. ...................... d
PRC/Suzhou
09 February 2021 RMB15,683 100.00% —
R&D and sales
services
SG MICRO JIANGYIN CO.,
LTD. ...................... b
PRC/Wuxi
27 October 2021 RMB150,000 100.00% —
R&D and
testing services
SG MICRO HANGZHOU CO.,
LTD. ...................... c
PRC/Hangzhou
22 December 2021 RMB2,000 100.00% —
R&D and sales
services
SHENZHEN SHENAN MICRO
CO., LTD. ................. c
PRC/Shenzhen
01 December 2023 RMB2,000 — 56.00%
R&D and sales
services
SG MICRO HARBIN CO.,
LTD. ...................... b
PRC/Harbin
29 June 2023 RMB100,000 100.00% — R&D and sales
SG MICRO JAPAN K.K. ....... c
Japan
16 November 2023 JPY10,000 — 100.00% Sales services
SG MICRO GMBH ............ c
Germany
6 March 2024 EUR100 — 100.00% Sales services
SG MICRO SHANGHAI CO.,
LTD. ...................... e
PRC/Shanghai
16 December 2024 RMB30,000 100.00% — R&D and sales
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1. CORPORATE INFORMATION—continued
Name* Notes
Place and date of
incorporation/
registration and place
of operations
Registered
share capital
Percentage of equity
attributable to the
Company
Principal activitiesDirect Indirect
(in thousand)
GANRUI TECH (CHANGZHOU)
CO., LTD. ................. f
PRC/Changzhou
21 October 2016 RMB3,322 68.9918% —
Controlling
Stake
VTRAN TECH (CHANGZHOU)
CO., LTD. ................. f
PRC/Changzhou
16 January 2017 RMB80,000 — 68.9918%R&D and sales
SG MICRO SHENZHEN CO.,
L T D ...................... g
PRC/Shenzhen
21 January 2025 RMB60,000 100.00% —
R&D and sales
services
SG MICRO DALIAN CO.,
L T D ...................... g
PRC/Dalian
24 July 2025 RMB20,000 100.00% — R&D
TeraDevices Inc. .............. f
PRC/Shanghai
29 March 2018 RMB5,697 77.5418% — R&D and sales
SG MICRO CHENGDU CO.,
L T D ...................... g
PRC/Chengdu
29 December 2025 RMB30,000 100.00% — R&D and sales
Notes:
(a) The statutory financial statements for the entity were prepared in accordance with IFRS Accounting Standards. The statutory auditor is
Raymond Yeung & Co. for the year ended 31 December 2023 and 2024. No audited financial statements have been prepared for the
entity for the year ended 31 December 2025 as at the date of this report.
(b) The statutory financial statements for these entities were prepared in accordance with PRC Generally Accepted Accounting Principles
(“PRC GAAP”). The statutory auditor is Grant Thornton Zhitong Certified Public Accountants LLP for the year ended 31 December
2023 and 2024. No audited financial statements have been prepared for these entities for the year ended 31 December 2025 as at the date
of this report.
(c) No audited financial statements have been prepared for the entity for the year ended 31 December 2023, 2024 and 2025 as these entities
were not subject to any statutory audit requirements under the relevant rules and regulations in their jurisdictions of registration.
(d) The statutory financial statements for the entity were prepared in accordance with PRC GAAP. The statutory auditor for the year ended
31 December 2023 and 2024 were Suzhou Genhood Certified Public Accountants Co., Ltd. and Suzhou Genhood Certified Public
Accountants Co., Ltd.. No audited financial statements have been prepared for the entity for the year ended 31 December 2025 as at the
date of this report.
(e) No audited financial statements have been prepared for the year 2023 as the entity was registered in 2024. And no audited financial
statements have been prepared for the entity for the year ended 31 December 2024 and 2025 as the entity was not subject to any statutory
audit requirements under the relevant rules and regulations in its jurisdictions of registration.
(f) These entities were acquired in 2025, and no audited financial statements have been prepared since the acquisition date.
(g) No audited financial statements have been prepared for these entities for the year ended 31 December 2023 and 2024 as these entities
was registered in 2025. And no audited financial statements have been prepared for the year ended 31 December 2025 as these entities
were not subject to any statutory audit requirements under the relevant rules and regulations in their jurisdictions of registration.
* The English names of these entities registered in Chinese Mainland represent the best efforts made by the management of the Company
to directly translate their Chines names as they did not register any official English names.
The above table lists the subsidiaries of the Company which, in the opinion of the directors,
principally affected the results for the Relevant Periods or formed a substantial portion of the net assets
of the Group.
2.1 BASIS OF PREPARATION
The Historical Financial Information has been prepared in accordance with IFRS Accounting
Standards, which comprise all standards and interpretations approved by the International Accounting
Standards Board.
All IFRS Accounting Standards effective for the accounting period commencing from
1 January 2025 together with the relevant transitional provisions, have been early adopted by the
Group in the preparation of the Historical Financial Information throughout the Relevant Periods.
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II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
2.1 BASIS OF PREPARATION—continued
The Historical Financial Information has been prepared under the historical cost basis, except
for financial assets at fair value through profit or loss (“FVTPL”), financial assets at fair value through
other comprehensive income(“FVTOCI”) and derivative financial instruments, which have been
measured at fair value.
Basis of consolidation
The historical financial information include the financial statements of the Company and its
subsidiaries for the Relevant Periods. A subsidiary is an entity (including a structured entity), directly
or indirectly, controlled by the Company. Control is achieved when the Group is exposed, or has rights,
to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee (i.e., existing rights that give the Group the current ability to direct
the relevant activities of the investee).
Generally, there is a presumption that a majority of voting rights results in control. When the
Company has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group’s voting rights and potential voting rights.
The financial statements of the subsidiaries are prepared for the same reporting period as the
Company, using consistent accounting policies. The results of subsidiaries are consolidated from the
date on which the Group obtains control, and continue to be consolidated until the date that such
control ceases.
Profit or loss and each component of other comprehensive income are attributed to the owners
of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling
interests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and
cash flows relating to transactions between members of the Group are eliminated in full on
consolidation.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control described above. A change in the
ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognizes the related assets (including
goodwill), liabilities, any non-controlling interest and the exchange fluctuation reserve; and recognizes
the fair value of any investment retained and any resulting surplus or deficit in profit or loss. The
Group’s share of components previously recognized in other comprehensive income is reclassified to
profit or loss or retained profits, as appropriate, on the same basis as would be required if the Group
had directly disposed of the related assets or liabilities.
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II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
2.2 ISSUED BUT NOT YET EFFECTIVE IFRS ACCOUNTING STANDARDS
The Group has not applied the following new and revised IFRS Accounting Standards, that
have been issued but are not yet effective in the Historical Financial Information. The Group intends to
apply these new and revised IFRS Accounting Standards, if applicable, when they become effective:
IFRS 18 Presentation and Disclosure in Financial Statements 2
IFRS 19 and its
amendments
Subsidiaries without Public Accountability: Disclosures 2
Amendments to IFRS 9
and IFRS 7
Amendments to the Classification and Measurement of Financial Instruments 1
Amendments to IFRS 9
and IFRS 7
Contracts Referencing Nature-dependent Electricity 1
Amendments to IFRS
10 and IAS 28
Sale or Contribution of Assets between an Investor and its Associate 3
Amendments to IAS 21 Translation to a Hyperinflationary Presentation Currency 2
Annual Improvements
to IFRS Accounting
Standards – Volume
11
Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7
1
1 Effective for annual periods beginning on or after 1 January 2026
2 Effective for annual/reporting period beginning on or after 1 January 2027
3 No mandatory effective date yet determined but available for adoption
The Group is in the process of making a detailed assessment of the impact of these new and
revised IFRS Accounting Standards upon initial application. So far, the Group considers that these new
and revised IFRS Accounting Standards, except for IFRS 18, no significant impact on the Group’s
financial performance and financial position is expected in the period of initial application. The
application of IFRS 18 is not expected to have material impact on the financial position of the Group
but is expected to affect the presentation of the statements of profit or loss and other comprehensive
income and statement of cash flows and disclosures in the future financial information. The Group will
continue to assess the impact of IFRS 18 on the Group’s financial information.
2.3 MATERIAL ACCOUNTING POLICIES
Investments in associates
An associate is an entity in which the Group has significant influence. Significant influence is
the power to participate in the financial and operating policy decisions of the investee, but is not
control or joint control over those policies.
The Group’s investments in associates is stated in the consolidated statement of financial
position at the Group’s share of net assets under the equity method of accounting, less any impairment
losses.
The Group’s share of the post-acquisition results and other comprehensive income of associates
is included in the consolidated statement of profit or loss and consolidated statements of
comprehensive income, respectively. In addition, when there has been a change recognized directly in
the equity of the associate, the Group recognizes its share of any changes in the consolidated statement
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2.3 MATERIAL ACCOUNTING POLICIES—continued
of changes in equity. Unrealized gains and losses resulting from transactions between the Group and its
associates are eliminated to the extent of the Group’s investments in the associates, except where
unrealized losses provide evidence of an impairment of the assets transferred. Goodwill arising from
the acquisition of associates is included as part of the Group’s investments in associates.
The criteria for determining a material associate are that its book value accounts for more than
5% of the total assets in the consolidated financial statements, or that the investment income (losses
calculated in absolute amounts) from the associate accounts for more than 10% of the net profit in the
consolidated financial statements.
Investments in subsidiaries
The results of subsidiaries are included in the Company’s statements of profit or loss to the
extent of dividends received and receivable. The Company’s investments in subsidiaries are stated at
cost less any impairment losses.
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The consideration
transferred is measured at the acquisition date fair value which is the sum of the acquisition date fair
values of assets transferred by the Group, liabilities assumed by the Group to the former owners of the
acquiree and the equity interests issued by the Group in exchange for control of the acquiree. For each
business combination, the Group elects whether to measure the non-controlling interests in the
acquiree that are present ownership interests and entitle their holders to a proportionate share of net
assets in the event of liquidation at fair value or at the proportionate share of the acquiree’s identifiable
net assets. All other components of non-controlling interests are measured at fair value. Acquisition-
related costs are expensed as incurred.
The Group determines that it has acquired a business when the acquired set of activities and
assets includes an input and a substantive process that together significantly contribute to the ability to
create outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts of the acquiree.
Any contingent consideration to be transferred by the acquirer is recognized at fair value at the
acquisition date. Contingent consideration classified as an asset or liability is measured at fair value
with changes in fair value recognized in profit or loss. Contingent consideration that is classified as
equity is not remeasured and subsequent settlement is accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred, the amount recognized for non-controlling interests and any fair value of the Group’s
previously held equity interests in the acquiree over the identifiable net assets acquired and liabilities
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2.3 MATERIAL ACCOUNTING POLICIES—continued
assumed. If the sum of this consideration and other items is lower than the fair value of the net assets
acquired, the difference is, after reassessment, recognized in profit or loss as a gain on bargain
purchase.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is tested for impairment annually or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired. The Group performs its annual impairment test of
goodwill as at 31 December. For the purpose of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or
groups of cash-generating units, that are expected to benefit from the synergies of the combination,
irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of
units.
Impairment is determined by assessing the recoverable amount of the cash-generating unit
(group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the
cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment
loss is recognized. An impairment loss recognized for goodwill is not reversed in a subsequent period.
Where goodwill has been allocated to a cash-generating unit (or group of cash-generating units)
and part of the operation within that unit is disposed of, the goodwill associated with the operation
disposed of is included in the carrying amount of the operation when determining the gains or losses on
the disposal. Goodwill disposed of in these circumstances is measured based on the relative value of
the operation disposed of and the portion of the cash-generating unit retained.
Fair value measurement
The Group measures its, financial assets at fair value through profit or loss and financial assets
at fair value through other comprehensive income at the end of each reporting period. Fair value is the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either in the
principal market for the asset or liability, or in the absence of a principal market, in the most
advantageous market for the asset or liability. The principal or the most advantageous market must be
accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that
market participants would use when pricing the asset or liability, assuming that market participants act
in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s
ability to generate economic benefits by using the asset in its highest and best use or by selling it to
another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs.
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II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
2.3 MATERIAL ACCOUNTING POLICIES—continued
All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorized within the fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a whole:
Level 1 – based on quoted prices (unadjusted) in active markets for identical assets or
liabilities
Level 2 – based on valuation techniques for which the lowest level input that is significant
to the fair value measurement is observable, either directly or indirectly
Level 3 – based on valuation techniques for which the lowest level input that is significant
to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the
Group determines whether transfers have occurred between levels in the hierarchy by reassessing
categorisation (based on the lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for an asset is
required (other than deferred tax assets, inventories, and financial assets), the asset’s recoverable
amount is estimated. An asset’s recoverable amount is the higher of the asset’s or cash-generating
unit’s value in use and its fair value less costs of disposal, and is determined for an individual asset,
unless the asset does not generate cash inflows that are largely independent of those from other assets
or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to
which the asset belongs.
An impairment loss is recognized only if the carrying amount of an asset exceeds its
recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. An impairment loss is charged to profit or loss in the period
in which it arises in those expense categories consistent with the function of the impaired asset.
An assessment is made at the end of the Relevant Periods as to whether there is an indication
that previously recognized impairment losses may no longer exist or may have decreased. If such an
indication exists, the recoverable amount is estimated. A previously recognized impairment loss of an
asset other than goodwill is reversed only if there has been a change in the estimates used to determine
the recoverable amount of that asset, but not to an amount higher than the carrying amount that would
have been determined (net of any depreciation/amortization) had no impairment loss been recognized
for the asset in prior years. A reversal of such an impairment loss is credited to profit or loss in the
period in which it arises.
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II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
2.3 MATERIAL ACCOUNTING POLICIES—continued
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate of the other entity (or of a parent, subsidiary or fellow
subsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the
third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the
Group or an entity related to the Group; and the sponsoring employers of the post-
employment benefit plan;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the
key management personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of which it is a part, provides key management
personnel services to the Group or to the parent of the Group.
Property, plant and equipment and depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less
accumulated depreciation and any impairment losses. When an item of property, plant and equipment
is classified as held for sale or when it is part of a disposal group classified as held for sale, it is not
depreciated and is accounted for in accordance with IFRS 5. The cost of an item of property, plant and
equipment comprises its purchase price and any directly attributable costs of bringing the asset to its
working condition and location for its intended use.
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II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
2.3 MATERIAL ACCOUNTING POLICIES—continued
Expenditure incurred after items of property, plant and equipment have been put into operation,
such as repairs and maintenance, is normally charged to profit or loss in the period in which it is
incurred. In situations where the recognition criteria are satisfied, the expenditure for a major
inspection is capitalized in the carrying amount of the asset as a replacement. Where significant parts
of property, plant and equipment are required to be replaced at intervals, the Group recognizes such
parts as individual assets with specific useful lives and depreciates them accordingly.
Depreciation is calculated on the straight-line basis to write off the cost of each item of
property, plant and equipment to its residual value over its estimated useful life. The annual
depreciation rates used for this purpose are as follows:
Useful lives (year) Residual value rate Annual depreciation rate
Motor vehicles .............................. 4 { 25.00%
Office furniture .............................. 5 { 20.00%
Electronic equipment and others ................ 3-10 { 33.33%-10.00%
Buildings .................................. 3 0 { 3.33%
Leasehold improvements ...................... 3 - 5 { 33.33%-20.00%
Special Tooling ............................. 2 { 50.00%
Leasehold improvements shall be amortized over the lease term or their useful lives, whichever
is shorter, with no residual value.
Where parts of an item of property, plant and equipment have different useful lives, the cost of
that item is allocated on a reasonable basis among the parts and each part is depreciated separately.
Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at
least at each financial year end.
An item of property, plant and equipment including any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from its use or disposal.
Any gains or losses on disposal or retirement recognized in the statement of profit or loss in the year
the asset is derecognized is the difference between the net sales proceeds and the carrying amount of
the relevant asset.
Construction in progress is stated at cost less any impairment losses, and is not depreciated. It is
reclassified to the appropriate category of property, plant and equipment when completed and ready for
use.
Investment properties
Investment properties are interests in land and buildings (including right-of-use assets) held to
earn rental income or for capital appreciation. Such properties are measured initially at cost, including
transaction costs. Subsequent to initial recognition, the Group chooses the cost model to measure all of
its investment property.
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2.3 MATERIAL ACCOUNTING POLICIES—continued
Depreciation is calculated on the straight-line basis to write off the cost of each item of
investment properties to its residual value over its estimated useful life. The annual depreciation rates
used for this purpose are as follows:
Useful lives (year) Residual value rate Annual depreciation rate
Buildings .................................. 3 0 — 3.33%
Any gains or losses on the retirement or disposal of an investment property are recognized in
the statement of profit or loss in the year of the retirement or disposal.
Intangible assets (other than goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is the fair value at the date of acquisition. The
useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite
lives are subsequently amortized over the useful economic life and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortization period and the
amortization method for an intangible asset with a finite useful life are reviewed at least at each
financial year end.
Patents, non-patented technology, certificate of layout rights for integrated circuits, software copyright
and software
Patents, non-patented technology, certificate of layout rights for integrated circuits, software
copyright and software are stated at cost less any impairment losses. Patents is generally amortized on
the straight-line basis over its estimated useful lives of 10 to 20 years. Non-patented technology is
generally amortized on the straight-line basis over its estimated useful lives of 5 to 10 years. Certificate
of layout rights for integrated circuits is generally amortized on the straight-line basis over its
estimated useful lives of 10 years. Software copyright is generally amortized on the straight-line basis
over its estimated useful lives about 10 years. Software is generally amortized on the straight-line basis
over its estimated useful lives less than 5 years.
Research and development expenses
All research costs are charged to the statement of profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalized and deferred only when
the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be
available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset
will generate future economic benefits, the availability of resources to complete the project and the
ability to measure reliably the expenditure during the development. Product development expenditure
which does not meet these criteria is expensed when incurred.
Deferred development costs are stated at cost less any impairment losses and are amortized
using the straight-line basis over the commercial lives of the underlying products, commencing from
the date when the products are put into commercial production.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
2.3 MATERIAL ACCOUNTING POLICIES—continued
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration.
Group as lessee
The Group applies a single recognition and measurement approach for all leases, except for
short-term leases and low-value assets. The Group recognizes lease liabilities to make lease payments
and right-of-use assets representing the right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognized at the commencement date of the lease (that is the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and any impairment losses, and adjusted for any remeasurement of lease liabilities. The
cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives
received. If the lease transfers ownership of the underlying asset to the Group by the end of the lease
term, or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option,
right-of-use assets are depreciated on a straight-line basis over the estimated useful life of the
underlying asset. Otherwise, right-of-use assets are depreciated on a straight-line basis over the shorter
of the lease terms and the estimated useful lives of the assets as follows:
Land use rights 50 years
Parking space use rights 31.67 years
Buildings 1.17 to 6 years
(b) Lease liabilities
Lease liabilities are recognized at the commencement date of the lease at the present value of
lease payments to be made over the lease term. The lease payments include fixed payments (including
in substance fixed payments) less any lease incentives receivable, variable lease payments that depend
on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably certain to be exercised by the
Group and payments of penalties for termination of a lease, if the lease term reflects the Group
exercising the option to terminate the lease. The variable lease payments that do not depend on an
index or a rate are recognized as an expense in the period in which the event or condition that triggers
the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing
rate at the lease commencement date because the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the lease term, a change in lease
payments (e.g., a change to future lease payments resulting from a change in an index or rate) or a
change in assessment of an option to purchase the underlying asset.
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II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
2.3 MATERIAL ACCOUNTING POLICIES—continued
(c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of buildings
and electronic equipment (that is those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also applies the recognition exemption for
leases of low-value assets to leases of office equipment that are considered to be of low value.
Lease payments on short-term leases are recognized as an expense on a straight-line basis over
the lease term.
Group as a lessor
When the Group acts as a lessor, it classifies at lease inception (or when there is a lease
modification) each of its leases as either an operating lease or a finance lease.
Leases in which the Group does not transfer substantially all the risks and rewards incidental to
ownership of an asset are classified as operating leases. 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. Rental income is accounted for on a straight-line basis over the lease
term and is included in revenue in the statement of profit or loss due to its operating nature. Initial
direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount
of the leased asset and recognized over the lease term on the same basis as rental income. Contingent
rents are recognized as revenue in the period in which they are earned.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortized
cost, fair value through other comprehensive income, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics and the Group’s business model for managing them. With the
exception of trade and bills receivables that do not contain a significant financing component or for
which the Group has applied the practical expedient of not adjusting the effect of a significant
financing component, the Group initially measures a financial asset at its fair value plus in the case of a
financial asset not at fair value through profit or loss, transaction costs. Trade and bills receivables that
do not contain a significant financing component or for which the Group has applied the practical
expedient are measured at the transaction price determined under IFRS 15 in accordance with the
policies set out for “Revenue recognition” below.
In order for a financial asset to be classified and measured at amortized cost or fair value
through other comprehensive income, it needs to give rise to cash flows that are solely payments of
principal and interest (“SPPI”) on the principal amount outstanding. Financial assets with cash flows
that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the
business model.
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The Group’s business model for managing financial assets refers to how it manages its financial
assets in order to generate cash flows. The business model determines whether cash flows will result
from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and
measured at amortized cost are held within a business model with the objective to hold financial assets in
order to collect contractual cash flows, while financial assets classified and measured at fair value
through other comprehensive income are held within a business model with the objective of both holding
to collect contractual cash flows and selling. Financial assets which are not held within the
aforementioned business models are classified and measured at fair value through profit or loss.
Purchases or sales of financial assets that require delivery of assets within the period generally
established by regulation or convention in the marketplace are recognized on the trade date, that is, the
date that the Group commits to purchase or sell the asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortized cost (debt instruments)
Financial assets at amortized cost are subsequently measured using the effective interest
method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset
is derecognized, modified or impaired.
Financial assets at fair value through other comprehensive income (debt instruments)
For debt investments at fair value through other comprehensive income, interest income,
foreign exchange revaluation and impairment losses or reversals are recognized in the statement of
profit or loss and computed in the same manner as for financial assets measured at amortised cost. The
remaining fair value changes are recognized in other comprehensive income. Upon derecognition, the
cumulative fair value change recognized in other comprehensive income is recycled to the statement of
profit or loss.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial
position at fair value with net changes in fair value recognized in the statement of profit or loss.
This category includes derivative instruments and equity investments which the Group had not
irrevocably elected to classify at fair value through other comprehensive income. Dividends on the
equity investments are also recognized as other income in the statement of profit or loss when the right
of payment has been established.
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is
separated from the host and accounted for as a separate derivative if the economic characteristics and
risks are not closely related to the host; a separate instrument with the same terms as the embedded
derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair
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value through profit or loss. Embedded derivatives are measured at fair value with changes in fair
value recognized in the statement of profit or loss. Reassessment occurs if there is a change in the
terms of the contract that significantly modifies the cash flows.
A derivative embedded within a hybrid contract containing a financial asset host is not
accounted for separately. The financial asset host together with the embedded derivative is required to
be classified in its entirety as a financial asset at fair value through profit or loss.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognized (i.e., removed from the Group’s consolidated statement of
financial position) when:
 the rights to receive cash flows from the asset have expired; or
 the Group has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party
under a “pass-through” arrangement; and either (a) the Group has transferred substantially
all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and rewards
of ownership of the asset. When it has neither transferred nor retained substantially all the risks and
rewards of the asset nor transferred control of the asset, the Group continues to recognize the
transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also
recognizes an associated liability. The transferred asset and the associated liability are measured on a
basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is
measured at the lower of the original carrying amount of the asset and the maximum amount of
consideration that the Group could be required to repay.
Impairment of financial assets
The Group recognizes an allowance for expected credit losses (“ECLs”) for all debt instruments
not held at fair value through profit or loss. ECLs are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate. The expected cash flows will
include cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
General approach
ECLs are recognized in two stages. For credit exposures for which there has not been a
significant increase in credit risk since initial recognition, ECLs are provided for credit losses that
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result from default events that are possible within the next 12 months (a 12-month ECL). For those
credit exposures for which there has been a significant increase in credit risk since initial recognition, a
loss allowance is required for credit losses expected over the remaining life of the exposure,
irrespective of the timing of the default (a lifetime ECL).
At each reporting date, the Group assesses whether the credit risk on a financial instrument has
increased significantly since initial recognition. When making the assessment, the Group compares the
risk of a default occurring on the financial instrument as at the reporting date with the risk of a default
occurring on the financial instrument as at the date of initial recognition and considers reasonable and
supportable information that is available without undue cost or effort, including historical and forward-
looking information.
The Group may consider a financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking
into account any credit enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of recovering the
contractual cash flows.
Financial assets at amortized cost are subject to impairment under the general approach and
they are classified within the following stages for measurement of ECLs except for trade and bills
receivables which apply the simplified approach as detailed below.
Stage 1 – Financial instruments for which credit risk has not increased significantly since initial
recognition and for which the loss allowance is measured at an amount equal to 12-month
ECLs
Stage 2 – Financial instruments for which credit risk has increased significantly since initial
recognition but that are not credit-impaired financial assets and for which the loss allowance
is measured at an amount equal to lifetime ECLs
Stage 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased or
originated credit-impaired) and for which the loss allowance is measured at an amount equal
to lifetime ECLs
Simplified approach
For trade and bills receivables and contract assets that do not contain a significant financing
component or when the Group applies the practical expedient of not adjusting the effect of a significant
financing component, the Group applies the simplified approach in calculating ECLs. Under the
simplified approach, the Group does not track changes in credit risk, but instead recognizes a loss
allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix
that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the
debtors and the economic environment.
For trade and bills receivables and contract assets that contain a significant financing
component, the Group chooses as its accounting policy to adopt the simplified approach in calculating
ECLs with policies as described above.
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2.3 MATERIAL ACCOUNTING POLICIES—continued
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings, payables, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs.
The Group’s financial liabilities include trade payables, financial liabilities at fair value through
profit or loss, financial liabilities included in other payables and other non-current liabilities, interest-
bearing bank borrowings.
For option arrangement to purchase the Group’s subsidiary’s share capital from non-controlling
shareholders and redemption financial liabilities which are the redeemable preferred shares invested by
non-controlling shareholders of a subsidiary, the Group initially recognizes a financial liability
measured at amortised cost and at the present value of the redemption amount with a corresponding
amount debited to equity. Changes in the amortised cost during the Relevant Periods were recognised
in profit or loss.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading.
Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes derivative financial instruments entered into
by the Group that are not designated as hedging instruments in hedge relationships as defined by
IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are
designated as effective hedging instruments. Gains or losses on liabilities held for trading are
recognized in the statement of profit or loss. The net fair value gain or loss recognized in the statement
of profit or loss does not include any interest charged on these financial liabilities.
Financial liabilities at amortized cost (trade and other payables, and borrowings)
After initial recognition, trade payables, financial liabilities included in other payables and
other non-current liabilities, and interest-bearing bank borrowings are subsequently measured at
amortized cost, using the effective interest rate method unless the effect of discounting would be
immaterial, in which case they are stated at cost. Gains and losses are recognized in the statement of
profit or loss when the liabilities are derecognized as well as through the effective interest rate
amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the effective interest rate. The effective interest rate
amortization is included in finance costs in the statement of profit or loss.
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Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or
cancelled, or expires.
When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and a recognition of a new liability, and
the difference between the respective carrying amounts is recognized in the statement of profit or loss.
Derivative financial instruments
Initial recognition and subsequent measurement
The Group uses derivative financial instruments, such as foreign currency agreements, to hedge
its foreign currency risk. Such derivative financial instruments are initially recognized at fair value on
the date on which a derivative contract is entered into and are subsequently remeasured at fair value.
Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is
negative.
Any gains or losses arising from changes in fair value of derivatives are taken directly to the
statement of profit or loss, except for the effective portion of cash flow hedges.
Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is mainly determined
on a weighted average basis and, in the case of work in progress and finished goods, comprises direct
materials, direct labor and an appropriate proportion of overheads. Net realizable value is based on
estimated selling prices less any estimated costs to be incurred to completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash on hand and at
banks, and short term highly liquid deposits with a maturity of generally within three months that are
readily convertible into known amounts of cash, subject to an insignificant risk of changes in value and
held for the purpose of meeting short-term cash commitments.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents
comprise cash on hand and at banks, time deposits and assets similar in nature to cash, which are not
restricted as to use.
Provisions
A provision is recognized when a present obligation (legal or constructive) has arisen as a result
of a past event and it is probable that a future outflow of resources will be required to settle the
obligation, provided that a reliable estimate can be made of the amount of the obligation.
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2.3 MATERIAL ACCOUNTING POLICIES—continued
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognized outside
profit or loss is recognized outside profit or loss, either in other comprehensive income or directly in
equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period, taking into consideration interpretations and
practices prevailing in the countries in which the Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of
the reporting period between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
 when the deferred tax liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss and does not
give rise to equal taxable and deductible temporary differences; and
 in respect of taxable temporary differences associated with investments in subsidiaries and
associates, when the timing of the reversal of the temporary differences can be controlled
and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, and the
carryforward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the
extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carryforward of unused tax credits and unused tax losses can be utilized, except:
 when the deferred tax asset relating to the deductible temporary differences arises from the
initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss and does not give rise to equal taxable and deductible temporary differences; and
 in respect of deductible temporary differences associated with investments in subsidiaries
and associates, deferred tax assets are only recognized to the extent that it is probable that
the temporary differences will reverse in the foreseeable future and taxable profit will be
available against which the temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at the end of the reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at the
end of the reporting period and are recognized to the extent that it has become probable that sufficient
taxable profit will be available to allow all or part of the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted by the end of the reporting period.
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Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally
enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and
deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities which intend either to settle current tax liabilities and assets
on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in
which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Government grants
Government grants are recognized at their fair value where there is reasonable assurance that
the grant will be received and all attaching conditions will be complied with. When the grant relates to
an expense item, it is recognized as income on a systematic basis over the periods that the costs, for
which it is intended to compensate, are expensed.
Where the grant relates to an asset, the fair value is credited to a deferred income account and is
released to the statement of profit or loss over the expected useful life of the relevant asset by equal
annual installments or deducted from the carrying amount of the asset and released to the statement of
profit or loss by way of a reduced depreciation charge.
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognized when control of goods or services is
transferred to the customers at an amount that reflects the consideration to which the Group expects to
be entitled in exchange for those goods or services.
When the consideration in a contract includes a variable amount, the amount of consideration is
estimated to which the Group will be entitled in exchange for transferring the goods or services to the
customer. The variable consideration is estimated at contract inception and constrained until it is highly
probable that a significant revenue reversal in the amount of cumulative revenue recognized will not
occur when the associated uncertainty with the variable consideration is subsequently resolved.
When the contract contains a financing component which provides the customer with a
significant benefit of financing the transfer of goods or services to the customer for more than one year,
revenue is measured at the present value of the amount receivable, discounted using the discount rate
that would be reflected in a separate financing transaction between the Group and the customer at
contract inception. When the contract contains a financing component which provides the Group with a
significant financial benefit for more than one year, revenue recognized under the contract includes the
interest expense accreted on the contract liability under the effective interest method. For a contract
where the period between the payment by the customer and the transfer of the promised goods or
services is one year or less, the transaction price is not adjusted for the effects of a significant financing
component, using the practical expedient in IFRS 15.
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2.3 MATERIAL ACCOUNTING POLICIES—continued
(a) Sale of products
Revenue from the sale of products (mainly power management ICs and signal chain ICs) is
recognized at the point in time when control of the asset is transferred to the customer, generally on
delivery of the products or customer’s acceptance of the products.
For contracts which provide a customer with a right to return the goods within a specified period,
the Group bases its estimates of sales return on historical results. The requirements in IFRS 15 on
constraining estimates of variable consideration are applied in order to determine the amount of variable
consideration that can be included in the transaction price. For goods that are expected to be returned,
instead of revenue, a refund liability is recognized. A right-of-return asset (and the corresponding
adjustment to cost of sales) is also recognized for the right to recover products from a customer.
(b) Rendering of services
Revenue of other services is recognized when the customer passes the acceptance and the
development results are submitted.
Revenue from other sources
Rental income is recognized on a time proportion basis over the lease terms.
Other income
Interest income is recognized on an accrual basis using the effective interest method by
applying the rate that exactly discounts the estimated future cash receipts over the expected life of the
financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial
asset.
Dividend income is recognized when the shareholders’ right to receive payment has been
established, it is probable that the economic benefits associated with the dividend will flow to the
Group and the amount of the dividend can be measured reliably.
Contract assets
If the Group performs by transferring goods or services to a customer before being
unconditionally entitled to the consideration under the contract terms, a contract asset is recognized for
the earned consideration that is conditional. Contract assets are subject to impairment assessment,
details of which are included in the accounting policies for impairment of financial assets. They are
reclassified to trade receivables when the right to the consideration becomes unconditional.
Contract liabilities
A contract liability is recognized when a payment is received or a payment is due (whichever is
earlier) from a customer before the Group transfers the related goods or services. Contract liabilities
are recognized as revenue when the Group performs under the contract (i.e., transfers control of the
related goods or services to the customer).
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2.3 MATERIAL ACCOUNTING POLICIES—continued
Contract costs
Other than the costs which are capitalized as inventories, property, plant and equipment and
intangible assets, costs incurred to fulfill a contract with a customer are capitalized as an asset if all of
the following criteria are met:
(a) The costs relate directly to a contract or to an anticipated contract that the entity can
specifically identify.
(b) The costs generate or enhance resources of the entity that will be used in satisfying (or in
continuing to satisfy) performance obligations in the future.
(c) The costs are expected to be recovered.
The capitalized contract costs are amortized and charged to the statement of profit or loss on a
systematic basis that is consistent with the transfer to the customer of the goods or services to which
the asset relates. Other contract costs are expensed as incurred.
Right-of-return assets
A right-of-return asset is recognized for the right to recover the goods expected to be returned
by customers. The asset is measured at the former carrying amount of the goods to be returned, less
any expected costs to recover the goods and any potential decreases in the value of the returned goods.
The Group updates the measurement of the asset for any revisions to the expected level of returns and
any additional decreases in the value of the returned goods.
Refund liabilities
A refund liability is recognized for the obligation to refund some or all of the consideration
received (or receivable) from a customer and is measured at the amount the Group ultimately expects it
will have to return to the customer. The Group updates its estimates of refund liabilities (and the
corresponding change in the transaction price) at the end of the reporting period.
Share-based payments
The Group operates share award schemes for the purpose of providing incentives and rewards
to eligible participants who contribute to the success of the Group’s operations. Employees of the
Group receive remuneration in the form of share-based payments, whereby employees render services
as consideration for equity instruments (“equity-settled transactions”).
The cost of equity-settled transactions with employees is measured by reference to the fair
value at the date on which they are granted. The fair value of share awards is determined by an external
valuer using the Black-Scholes formula. Since there are no cash settlement alternatives, the Group
accounts for the share-based payment schemes as equity-settled share-based schemes, further details
are included in note 34 to the Historical Financial Information.
The cost of equity-settled transactions is recognized in employee benefit expense, together with
a corresponding increase in equity, over the period in which the performance and/or service conditions
are fulfilled. The cumulative expense recognized for equity-settled transactions at the end of each of
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2.3 MATERIAL ACCOUNTING POLICIES—continued
the Relevant Periods until the vesting date reflects the extent to which the vesting period has expired
and the Group’s best estimate of the number of equity instruments that will ultimately vest. The charge
or credit to profit or loss for a period represents the movement in the cumulative expense recognized as
at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining
the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of
the Group’s best estimate of the number of equity instruments that will ultimately vest. Market
performance conditions are reflected within the grant date fair value. Any other conditions attached to
an award, but without an associated service requirement, are considered to be non-vesting conditions.
Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing
of an award unless there are also service and/or performance conditions.
For awards that do not ultimately vest because non-market performance and/or service conditions
have not been met, no expense is recognized. Where awards include a market or non-vesting condition,
the transactions are treated as vesting irrespective of whether the market or non-vesting condition is
satisfied, provided that all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is
recognized as if the terms had not been modified, if the original terms of the award are met. In
addition, an expense is recognized for any modification that increases the total fair value of the share-
based payments, or is otherwise beneficial to the employee as measured at the date of modification.
Where an equity-settled award is canceled, it is treated as if it had vested on the date of cancelation,
and any expense not yet recognized for the award is recognized immediately.
Other Employee benefits
Pension scheme
The employees of the Group’s subsidiaries which operate in Chinese Mainland are required to
participate in a central pension scheme operated by the local municipal government. These subsidiaries
are required to contribute a certain percentage of their payroll costs to the central pension scheme. The
contributions are charged to the statement of profit or loss as they become payable in accordance with
the rules of the central pension scheme.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or
sale, are capitalized as part of the cost of those assets. The capitalization of such borrowing costs
ceases when the assets are substantially ready for their intended use or sale. All other borrowing costs
are expensed in the period in which they are incurred. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the borrowing of funds.
Dividends
Dividends distributed to the shareholders is recognized as a liability in the period when the
dividends are approved by the entities’ shareholders or directors, where appropriate.
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2.3 MATERIAL ACCOUNTING POLICIES—continued
Foreign currencies
These financial statements are presented in RMB, which is the Company’s functional currency.
Each entity in the Group determines its own functional currency and items included in the financial
statements of each entity are measured using that functional currency. Foreign currency transactions
recorded by the entities in the Group are recorded using an exchange rate determined by a systematic
and reasonable method that approximates the spot exchange rate on the transaction date for conversion.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional
currency rates of exchange ruling at the end of the reporting period. Differences arising on settlement
or translation of monetary items are recognized in the statement of profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates at the dates of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rates at the date when the
fair value was measured. The gain or loss arising on translation of a non-monetary item measured at
fair value is treated in line with the recognition of the gain or loss on change in fair value of the item
(i.e., translation difference on the item whose fair value gain or loss is recognized in other
comprehensive income or profit or loss is also recognized in other comprehensive income or profit or
loss, respectively).
The functional currencies of certain overseas subsidiaries are currencies other than the RMB.
As at the end of the reporting period, the assets and liabilities of these entities are translated into RMB
at the exchange rates prevailing at the end of the reporting period and their statements of profit or loss
are translated into RMB at the average exchange rates during the reporting period.
The resulting exchange differences are recognized in other comprehensive income and
accumulated in the exchange fluctuation reserve, except to the extent that the differences are
attributable to non-controlling interests. On disposal of a foreign operation, the cumulative amount in
the reserve relating to that particular foreign operation is recognized in the statement of profit or loss.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to
the carrying amounts of assets and liabilities arising on acquisition are treated as assets and liabilities
of the foreign operation and translated at the closing rate.
For the purpose of the combined statement of cash flows, the cash flows of overseas
subsidiaries are translated into RMB. Frequently recurring cash flows of overseas subsidiaries which
arise throughout the year are translated into RMB at the weighted average exchange rates for the year.
3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES
The preparation of the Historical Financial Information requires management to make
judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets
and liabilities, and their accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes that could require a
material adjustment to the carrying amounts of the assets or liabilities affected in the future.
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3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES—continued
Judgments
In the process of applying the Group’s accounting policies, management has made the
following judgments, apart from those involving estimations, which have the most significant effect on
the amounts recognized in the Historical Financial Information:
Deferred tax assets
Deferred tax assets are recognized for unused tax losses and deductible temporary differences
to the extent that it is probable that taxable profit will be available against which the losses or
temporary differences can be utilized. Significant management judgment is required to determine the
amount of deferred tax assets that can be recognized, based upon the likely timing and level of future
taxable profits together with future tax planning strategies.
Business model
The classification of financial assets upon initial recognition depends on the Groups business
model for managing financial assets. In determining the business model, the Group considers the ways
in which the Company evaluates and reports the performance of financial assets to key management
personnel, the risks that affect the performance of financial assets and their management, and the way
in which relevant business management personnel are remunerated. When evaluating whether to target
the collection of contractual cash flows, the Group needs to analyse and judge the reasons, timing,
frequency and value of the financial assets sold before the maturity date.
Contractual cash flow characteristics
The classification of financial assets at initial recognition depends on the contractual cash flow
characteristics of the financial assets. When it is necessary to judge whether the contractual cash flows
are only payments of principal and interest based on outstanding principal, it is necessary to judge
whether the contractual cash flows are significantly different from the benchmark cash flows when the
valuation includes amendments to the time value of money.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at
the end of the Relevant Periods, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year, are described below.
Variable consideration arising from price adjustments or sales returns
For contracts with similar characteristics, the Group estimates price adjustments and sales
return rates based on historical performance, evolving customer demand, prevailing market conditions,
and the product lifecycle stage, using the most reliable available information. Due to inherent
uncertainties, the estimated amounts may differ from the actual outcomes. The Group reassesses the
estimated price adjustments or return rates at least as of each balance sheet date, and determines the
accounting treatment based on the revised estimates.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES—continued
Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires
an estimation of the value in use of the cash-generating units to which the goodwill is allocated.
Estimating the value in use requires the Group to make an estimate of the expected future cash flows
from the cash-generating units and also to choose a suitable discount rate in order to calculate the
present value of those cash flows. The carrying amounts of goodwill at 31 December 2023, 2024 and
2025 were RMB80,875,000, RMB78,692,000 and RMB301,277,000. Further details are given in
note 18.
Provision for expected credit losses on trade and bills receivables
The Group assesses impairment of trade and bills receivables using the expected credit loss
model. The application of the expected credit loss model requires significant judgment and estimation,
and all reasonable and supportable information, including forward-looking information, must be
considered. When making these judgments and estimations, the Group infers the expected changes in
the credit risk of debtors based on historical repayment data in combination with economic conditions,
macroeconomic indicators, industry risks and other factors. Different estimates may affect the amount
of impairment provisions recognized, and the impairment provisions already recognized may not equal
the actual impairment losses in the future.
The information about the ECLs on the Group’s trade and bills receivables is disclosed in
note 24 to the Historical Financial Information, respectively.
Impairment of non-financial assets (other than goodwill)
The Group assesses whether there are any indicators of impairment for all non-financial assets
(including the right-of-use assets) at the end of the reporting period. Non-financial assets are tested for
impairment when there are indicators that the carrying amounts may not be recoverable. An
impairment exists when the carrying value of an asset or a cash-generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its value in use. The calculation
of the fair value less costs of disposal is based on available data from binding sales transactions in an
arm’s length transaction of similar assets or observable market prices less incremental costs for
disposing of the asset. When value in use calculations are undertaken, management must estimate the
expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in
order to calculate the present value of those cash flows.
Impairment of inventories
The Group measures inventories at the lower of cost and net realizable value. For inventories
where the cost exceeds the net realizable value, a write-down of inventories is recognized. At the end
of each reporting period, the Company reassesses whether the inventories is obsolete or slow-moving
and whether the net realizable value is lower than the inventory cost. If the reassessment results differ
from the existing estimates, such differences will impact the carrying value of the inventories in the
period in which the estimates are revised.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES—continued
Fair value of unlisted equity investments
The unlisted equity investments have been valued net asset value of underlying investments as
detailed in note 42 to the financial statements.
The Group classifies the fair value of these investments as Level 3. Further details are included
in note 21 to the financial statements.
4. OPERATING SEGMENT INFORMATION
(a) Description of segments and principal activities
Management monitors the operating results of the Group as a whole for the purpose of making
decision on resources allocation and preformation assessment. On this basis, the Group has determined
that it only has one operating segment which is the sales of ICs products.
(b) Segment information
There was no single customer from which the revenue amounted to 10% or more of the
Group’s revenue for the Relevant Periods.
The Group’s non-current assets excluding financial instruments and deferred taxes were
primarily located in Chinese Mainland as at the end of each of the Relevant Periods.
5. REVENUE
An analysis of revenue is as follows:
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue from contracts with customers:
Disaggregated by major products or service lines
- Power management ICs .................................... 1,746,024 2,181,660 2,379,834
- Signal chain ICs .......................................... 864,242 1,156,700 1,471,023
- Others .................................................. 5,450 8,623 47,198
Total revenue .................................................. 2,615,716 3,346,983 3,898,055
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
5. REVENUE—continued
Revenue from contracts with customers
(a) Disaggregated revenue information
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Geographical information
Hong Kong ................................................... 1,358,701 1,484,881 1,921,049
Chinese Mainland .............................................. 1,042,216 1,497,608 1,635,122
Taiwan ....................................................... 91,117 134,205 171,691
Others ....................................................... 123,682 230,289 170,193
Total revenue .................................................. 2,615,716 3,346,983 3,898,055
Timing of revenue recognition
Goods and services transferred at a point in time ...................... 2,615,716 3,346,983 3,898,055
Total revenue .................................................. 2,615,716 3,346,983 3,898,055
The following table shows the amounts of revenue recognized during the Relevant Periods that
were included in the contract liabilities at the beginning of each of the respective period:
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue recognized that was included in contract liabilities at the beginning of
the year
Sale of products .................................................... 17,675 12,913 13,245
Rendering of services ............................................... — — 4,151
Total ............................................................ 17,675 12,913 17,396
(b) Performance obligations
Information about the Group’s performance obligations is summarized below:
Sale of products
The performance obligation is satisfied when the products are delivered or accepted by the
customer, and payment is generally due within certain days upon delivery or after acceptance, except
for new customers, where payment in advance is normally required.
Rendering of services
The performance obligation is satisfied upon completion and acceptance of the services and
payment is generally due upon completion of the services.
For the above contracts with customers, they are rendered in a short period of time, which is
generally less than one year.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
6. OTHER INCOME AND GAINS
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Other income
Government grants* ................................................ 50,541 37,844 101,072
Bank interest income ................................................ 34,720 31,687 30,061
Subtotal .......................................................... 85,261 69,531 131,133
Gains
Foreign exchange income, net ......................................... 4 1 5 6,204 {
Gains on disposal of investments at fair value through profit or loss:
Wealth management products ..................................... 18,230 18,286 6,521
Equity investments at fair value through profit or loss .................. { 311 12,095
Gains on disposal of items of property, plant and equipment and right-of-use
assets .......................................................... 6 2 3,283 1,009
Fair value gains on:
Wealth management products ..................................... 1,602 7,407 16,030
Equity investments at fair value through profit or loss .................. { 3,147 26,479
Others ........................................................... 15,393 140 111
Subtotal .......................................................... 35,702 38,778 62,245
Total other income and gains ......................................... 120,963 108,309 193,378
* The government grants were mainly incentives provided by local government authorities in Chinese Mainland, including various forms
of government financial incentives and preferential tax treatments. There were no unfulfilled conditions or contingencies relating to these
government grants.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
7. PROFIT BEFORE TAX
The Group’s profit before tax is arrived at after charging/(crediting):
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cost of raw materials consumed ...................................... 656,690 861,037 964,819
Cost of packaging testing ........................................... 589,127 687,553 837,955
Research and development expenses .................................. 737,074 870,747 1,045,195
Equity-settled share-based payment expense* ........................... 118,791 84,836 159,113
Depreciation of property, plant and equipment* ......................... 101,555 125,154 150,120
Depreciation of right-of-use assets* ................................... 22,599 23,788 22,047
Amortization of intangible assets* .................................... 13,932 19,172 25,678
Lease payments not included in the measurement of lease liabilities* ........ 2,002 3,510 3,210
Staff costs (excluding directors’ remuneration (note 9))*:
Salaries, wages and bonus ...................................... 582,372 761,676 831,688
Pension scheme contributions** ................................. 47,959 60,602 72,484
Total ........................................................... 630,331 822,278 904,172
Impairment of goodwill ............................................ { (2,183) {
Impairment of financial assets and contract assets, net:
Impairment/(reversal of impairment losses) of other receivables, net ..... 7 6 6 (122) (126)
Impairment of trade and bills receivables, net ....................... 9 1 1 1,208 2,173
Impairment of contract assets, net ................................ — { 410
Impairment of Inventories .......................................... 108,634 128,851 169,828
Gains on disposal of items of property, plant, and equipment, intangible assets
and right-of-use assets, net ........................................ (62) (3,283) (1,009)
Gains on disposal of investments at fair value through profit or loss ......... (18,230) (18,597) (18,616)
Foreign exchange (income)/loss, net .................................. ( 415) (6,204) 8,869
Fair value losses/(gains), net:
Wealth management products ................................... (1,602) (7,407) (16,030)
Equity investments at fair value through profit or loss ................ 3,134 (3,147) (26,479)
* The amounts of these accounts are partially included in the cost of packaging testing and research and development expenses.
** There are no forfeited contributions that may be used by the Group as the employer to reduce the existing level of contributions.
8. FINANCE COSTS
An analysis of finance costs is as follows:
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Amortization of interest expense on redemption financial liabilities ........... — — 7,418
Interest on borrowings ............................................... — 3 4 1 3,431
Interest on lease liabilities ............................................ 2,277 1,901 1,147
Total ............................................................ 2,277 2,242 11,996
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
9. DIRECTORS’ AND THE CHIEF EXECUTIVE’ REMUNERATION
The remuneration of the directors and the chief executive for the Relevant Periods is as follows:
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Fees ............................................................. 1 2 0 1 2 4 1 2 0
Other emoluments:
Salaries, wages and bonus ............................................ 2,046 2,304 2,417
Pension scheme contributions ......................................... 1 2 6 1 3 2 1 3 6
Total ............................................................ 2,292 2,560 2,673
(a) Independent non-executive directors
The fees paid to independent non-executive directors during the Relevant Periods is as follows:
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Ms. Chen Jingshan (i) ............................................... 6 0 4 5 —
Ms. Sheng Qinghui (i) ............................................... 6 0 4 5 —
Dr. Du Meijie (ii) .................................................. — 1 7 6 0
Ms. Tang Chunlin (ii) ............................................... — 1 7 6 0
Total ............................................................ 1 2 0 1 2 4 1 2 0
There were no other emoluments payable to the independent non-executive directors as at
31 December 2023, 2024 and 2025.
(b) Executive directors and the chief executive and non-executive directors
Year ended 31 December 2023
Salaries,
wages
and bonus
Pension
scheme
contributions Total
RMB’000 RMB’000 RMB’000
Executive directors and the chief executive
Dr. Zhang Shilong ........................................... 1,137 63 1,200
Ms. Zhang Qin .............................................. 9 0 9 6 3 9 7 2
Non-executive directors
M r .L i nL i n ................................................ — — —
Total .......................................................... 2,046 126 2,172
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
9. DIRECTORS’ AND THE CHIEF EXECUTIVE’ REMUNERATION—continued
Year ended 31 December 2024
Salaries,
wages
and bonus
Pension
scheme
contributions Total
RMB’000 RMB’000 RMB’000
Executive directors and the chief executive
Dr. Zhang Shilong ........................................... 1,283 66 1,349
Ms. Zhang Qin .............................................. 1,021 66 1,087
Non-executive directors
M r .L i nL i n ................................................ — — —
Total .......................................................... 2,304 132 2,436
Year ended 31 December 2025
Salaries,
wages
and bonus
Pension
scheme
contributions Total
RMB’000 RMB’000 RMB’000
Executive directors and the chief executive
Dr. Zhang Shilong ........................................... 1,302 68 1,370
Ms. Zhang Qin .............................................. 1,053 68 1,121
Non-executive directors
Ms. Liu Ming (iii) ............................................. 6 2 — 6 2
M r .L i nL i n ................................................ — — —
Total .......................................................... 2,417 136 2,553
Notes:
(i) Ms. Chen Jingshan and Ms. Sheng Qinghui resigned as independent non-executive directors as they had served for the Company for six
consecutive years, with effect from 19 September 2024.
(ii) Dr. Du Meijie and Ms. Tang Chunlin were appointed as independent non-executive directors on 19 September 2024.
(iii) Ms. Liu Ming was appointed as non-executive director on 19 September 2025.
There was no arrangement under which a director or the chief executive waived or agreed to
waive any remuneration during the Relevant Periods.
10. FIVE HIGHEST PAID EMPLOYEES
During the Relevant Periods, details of the remuneration for the five highest paid employees
who is neither a director nor chief executive of the Company during that periods, are as follow:
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Share based compensation ........................................... 12,043 9,443 11,323
Salaries, wages and bonus ............................................ 8,613 10,385 11,490
Pension scheme contributions ......................................... 1 7 7 1 6 3 1 7 3
Total ............................................................ 20,833 19,991 22,986
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
10. FIVE HIGHEST PAID EMPLOYEES—continued
The numbers of non-director and non-chief executive highest paid employees whose
remuneration fell within the following bands are as follows:
Year ended 31 December
2023 2024 2025
HKD1,500,001 to HKD2,000,000 ............................................ — — —
HKD2,000,001 to HKD2,500,000 ............................................ — — —
HKD2,500,001 to HKD3,000,000 ............................................ — — —
HKD3,000,001 to HKD3,500,000 ............................................ — — —
HKD3,500,001 to HKD4,000,000 ............................................ 1 — —
HKD4,000,001 to HKD4,500,000 ............................................ 1 3 —
HKD4,500,001 to HKD5,000,000 ............................................ 2 2 1
HKD5,000,001 to HKD5,500,000 ............................................ 1 — 3
HKD5,500,001 to HKD6,000,000 ............................................ — — —
HKD6,000,001 to HKD6,500,000 ............................................ — — —
HKD6,500,001 to HKD7,000,000 ............................................ — — 1
Total ................................................................... 5 5 5
11. INCOME TAX
Income tax expense is recognized based on management’s best knowledge of the income tax
rates expected for the financial year.
(i) PRC corporate income tax
The income tax provision of the Group in respect of its operations in Chinese Mainland was
calculated at tax rate of 25% on the assessable profits for the periods presented, based on the existing
legislation, interpretation and practices in respect thereof.
Pursuant to the Notice of the Ministry of Industry and Information Technology, the Ministry of
Finance, the State Taxation Administration and National Development Reform Commission on
Relevant Issues Concerning the Preferential Policies on Enterprise Income Tax to promote high quality
development of integrated circuit industry and software industry in December 2020, the Company was
entitled to apply a reduced tax rate of 10% after passing the qualification verification of Key Integrated
Circuit Design Enterprise by relevant authorities during the Relevant Periods.
Certain subsidiaries of the Company in Chinese Mainland were approved as High-tech
enterprises, and they were subject to a preferential corporate income tax rate of 15% for the Relevant
Periods.
(ii) Hong Kong profits tax
The first HKD2,000,000 of assessable profits of Hong Kong subsidiaries are taxed at 8.25%
and the remaining assessable profits are taxed at 16.5% on the estimated assessable profits.
SG MICRO (HK) LIMITED was entitled to enjoy offshore tax exemption from the Hong Kong Inland
Revenue Department due to its offshore transaction nature for the Relevant Periods.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
11. INCOME TAX—continued
(iii) Corporate income tax in other jurisdictions
The income tax rates of the subsidiaries in Japan and Germany are 22.39% and 27.9%,
respectively.
The major components of income tax (credit)/expense of the Group are as follows:
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current tax ........................................................ 1 5 2 9 1 2 9 8
Deferred tax (note 19) ............................................... (15,813) (6,670) 15,217
Total tax charge for the year .......................................... (15,798) (6,379) 15,515
A reconciliation of the tax (credit)/expense applicable to profit before tax at the applicable tax
rate for the jurisdiction in which the major operating subsidiaries are domiciled and/or operate to the
tax expense at the effective tax rate is as follows:
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Profit before tax .................................................... 254,139 484,783 549,890
Tax at the applicable tax rate of 10% ................................... 25,414 48,478 54,989
Tax losses and temporary difference not recognized ....................... 5,771 8,427 16,485
Effect of different tax rates of subsidiaries operating in different jurisdiction .... 8 7 8 2,084 2,885
The impact of tax rate changes on the beginning deferred income tax balance . . . — (224) (224)
Expenses not deductible for tax ....................................... 1,047 645 490
Loss/(profit) attributable to associates .................................. 7 3 4 (1,333) (410)
Additional deductible expenses for research and development expenditure ..... (49,642) (64,456) (58,700)
Income tax (credit)/expense .......................................... (15,798) (6,379) 15,515
12. DIVIDENDS
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Dividends declared by the Company ................................... 107,846 47,073 95,062
The final dividends of RMB3.00, RMB1.00, RMB2.00 per 10 shares (tax inclusive) in respect
of the years ended 31 December 2022, 2023 and 2024 were approved by the shareholder in the Annual
General Meetings of the Company. In addition, 3 shares per 10 shares, nil shares per 10 shares and 3
shares per 10 shares were transferred to the all shareholders from the Company’s capital reserves into
share capital in respect of the years ended 31 December 2022, 2023, 2024.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
12. DIVIDENDS—continued
The final cash dividend distribution of RMB107,846,000 (tax inclusive) and the conversion of
capital reserve into share capital in respect of the year ended 31 December 2022 approved by the
Annual General Meeting on 12 May 2023 was subsequently paid in June 2023.
The final cash dividend distribution of RMB47,073,000 (tax inclusive) in respect of the year
ended 31 December 2023 approved by the Annual General Meeting on 17 May 2024 was subsequently
paid in June 2024.
The final cash dividend distribution of RMB95,062,000 (tax inclusive) and the conversion of
capital reserve into share capital in respect of the year ended 31 December 2024 approved by the
Annual General Meeting on 23 May 2025 was subsequently paid in July 2025.
The cash dividend distribution plan of RMB124,101,000 (tax inclusive) in respect of the year
ended 31 December 2025 has been approved by the Annual General Meeting on 20 April 2026, and
has not been fully paid.
13. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF
THE PARENT
The calculation of the basic earnings per share amounts is based on the profit for the years
attributable to ordinary equity holders of the parent, and the weighted average numbers of ordinary
shares outstanding during the Relevant Periods.
The share option and restricted stock granted by the Company have potential dilutive effect on
the earnings per share. The calculation of the diluted earnings per share amounts is based on the profit
for the year attributable to ordinary equity holders of the parent. The weighted average number of
ordinary shares used in the calculation is the number of ordinary shares in outstanding during the year,
as used in the basic earnings per share calculation, and the weighted average number of ordinary shares
assumed to have been issued at no consideration on the deemed exercise or conversion of all dilutive
potential ordinary shares into ordinary shares.
The calculations of basic and diluted earnings per share are based on:
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Earnings
Profit attributable to ordinary equity holders of the parent ................... 280,768 500,249 547,060
Shares
Weighted average number of ordinary shares outstanding during the year,
used in the basic earnings per share calculation ..................... 607,240 612,400 617,366
Effect of dilution - weighted average number of ordinary shares:
Share options .................................................. 8,404 2,930 5,733
Total ............................................................ 615,644 615,330 623,099
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
14. PROPERTY, PLANT AND EQUIPMENT
The Group
Buildings
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements
Office
furniture
Special
Tooling
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2023 .......... 72,881 1,418 253,858 26,558 6,145 151,515 64,962 577,337
Additions ................. — — 79,265 10,175 3,288 55,297 98,247 246,272
Transfers from construction in
progress ................ 87,090 — — — — — (87,090) —
Disposals ................. — — (2,803) — — (1,610) — (4,413)
At 31 December 2023 ....... 159,971 1,418 330,320 36,733 9,433 205,202 76,119 819,196
Depreciation:
At 1 January 2023 .......... 8 1 0 1,130 92,706 13,733 1,980 64,894 — 175,253
Provided during the year ..... 5,090 227 54,871 8,709 1,575 31,083 — 101,555
Disposals ................. — — (2,803) — — — — (2,803)
At 31 December 2023 ....... 5,900 1,357 144,774 22,442 3,555 95,977 — 274,005
Impairment:
At 1 January 2023 .......... — — — — — — — —
At 31 December 2023 ....... — — — — — — — —
Net carrying amount as at
31 December 2023 ........ 154,071 61 185,546 14,291 5,878 109,225 76,119 545,191
Net carrying amount as at
1 January 2023 ........... 72,071 288 161,152 12,825 4,165 86,621 64,962 402,084
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
14. PROPERTY, PLANT AND EQUIPMENT—continued
Buildings
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements
Office
furniture
Special
Tooling
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2024 ......... 159,971 1,418 330,320 36,733 9,433 205,202 76,119 819,196
Additions ................ {{ 97,591 4,581 1,432 65,633 102,292 271,529
Transfers from construction
in progress ............. 178,411 {{{ { { (178,411) {
Disposals ................ {{ { { { (834) { (834)
At 31 December 2024 ...... 338,382 1,418 427,911 41,314 10,865 270,001 { 1,089,891
Depreciation:
At 1 January 2024 ......... 5,900 1,357 144,774 22,442 3,555 95,977 { 274,005
Provided during the year .... 5,332 31 69,361 9,381 1,815 39,234 { 125,154
Disposals ................ {{ { { { (362) { (362)
At 31 December 2024 ...... 11,232 1,388 214,135 31,823 5,370 134,849 { 398,797
Impairment:
At 1 January 2024 ......... {{ { { { { { {
At 31 December 2024 ...... {{ { { { { { {
Net carrying amount as at
31 December 2024 ...... 327,150 30 213,776 9,491 5,495 135,152 { 691,094
Net carrying amount as at
1 January 2024 ......... 154,071 61 185,546 14,291 5,878 109,225 76,119 545,191
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
14. PROPERTY, PLANT AND EQUIPMENT—continued
Buildings
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements
Office
furniture
Special
Tooling
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2025 ......... 338,382 1,418 427,911 41,314 10,865 270,001 { 1,089,891
Additions ............... 5 8 3 { 82,894 1,065 1,147 87,259 1,317 174,265
Transfers from construction
in progress ............. 1,317 — — — — — (1,317) —
Acquisition of
subsidiaries ............ — 1 2,648 41 117 3,538 — 6,345
Disposals ................ {{ (265) (639) (150) (7,945) { (8,999)
At 31 December 2025 ...... 340,282 1,419 513,188 41,781 11,979 352,853 { 1,261,502
Depreciation:
At 1 January 2025 ......... 11,232 1,388 214,135 31,823 5,370 134,849 { 398,797
Provided during the year .... 11,141 25 80,637 6,096 2,015 50,206 { 150,120
Acquisition of
subsidiaries ............ {{ 1,751 17 103 {{ 1,871
Disposals ................ {{ (154) (564) (73) (320) { (1,111)
At 31 December 2025 ...... 22,373 1,413 296,369 37,372 7,415 184,735 { 549,677
Impairment:
At 1 January 2025 ......... {{ { { { { { {
At 31 December 2025 ...... {{ { { { { { {
Net carrying amount as at
31 December 2025 ...... 317,909 6 216,819 4,409 4,564 168,118 { 711,825
Net carrying amount as at
1 January 2025 ......... 327,150 30 213,776 9,491 5,495 135,152 { 691,094
I-51


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
14. PROPERTY, PLANT AND EQUIPMENT—continued
The Company
Buildings
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements
Office
furniture
Special
Tooling
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January
2023 ......... 72,881 1,395 188,267 14,065 4,693 134,450 59,779 475,530
Additions ....... {{ 54,144 6,693 2,788 47,802 27,311 138,738
Transfers from
construction in
progress ...... 87,090
{{{ { { (87,090) {
Disposals ....... {{ (2,262) {{ (1,610) { (3,872)
At 31 December
2023 ......... 159,971 1,395 240,149 20,758 7,481 180,642 { 610,396
Depreciation:
At 1 January
2023 ......... 8 1 0 1,128 75,262 8,879 1,477 49,325 { 136,881
Provided during
the year ...... 5,090 221 39,384 3,137 1,215 30,539 { 79,586
Disposals ....... {{ (2,262) {{{{ (2,262)
At 31 December
2023 ......... 5,900 1,349 112,384 12,016 2,692 79,864 { 214,205
Impairment:
At 1 January
2023 ......... {{ { { { { { {
At 31 December
2023 ......... {{ { { { { { {
Net carrying
amount as at
31 December
2023 ......... 154,071 46 127,765 8,742 4,789 100,778
{ 396,191
Net carrying
amount as at
1 January
2023 ......... 72,071 267 113,005 5,186 3,216 85,125 59,779 338,649
I-52


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
14. PROPERTY, PLANT AND EQUIPMENT—continued
Buildings
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements
Office
furniture
Special
Tooling Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2024 ......... 159,971 1,395 240,149 20,758 7,481 180,642 610,396
Additions ............... {{ 81,209 1,873 625 59,770 143,477
Disposals ................ { (89) (30,053) { (4,634) (834) (35,610)
Transfers to investment
properties ............. (159,971) {{{{ { (159,971)
At 31 December 2024 ...... { 1,306 291,305 22,631 3,472 239,578 558,292
Depreciation:
At 1 January 2024 ......... 5,900 1,349 112,384 12,016 2,692 79,864 214,205
Provided during the year . . . { 18 43,403 4,487 564 37,444 85,916
Disposals ................ { (61) (11,414) { (1,130) (362) (12,967)
Transfers to investment
properties ............. (5,900) {{{{ { (5,900)
At 31 December 2024 ...... { 1,306 144,373 16,503 2,126 116,946 281,254
Impairment:
At 1 January 2024 ......... {{ { { { { {
At 31 December 2024 ...... {{ { { { { {
Net carrying amount as at
31 December 2024 ...... {{ 146,932 6,128 1,346 122,632 277,038
Net carrying amount as at
1 January 2024 ......... 154,071 46 127,765 8,742 4,789 100,778 396,191
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements
Office
furniture
Special
Tooling Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2025 .................... 1,306 291,305 22,631 3,472 239,578 558,292
Additions ........................... { 38,821 812 361 76,054 116,048
Disposals ........................... { (20,550) { (927) (7,945) (29,422)
At 31 December 2025 ................. 1,306 309,576 23,443 2,906 307,687 644,918
Depreciation:
At 1 January 2025 .................... 1,306 144,373 16,503 2,126 116,946 281,254
Provided during the year ............... { 49,422 4,203 430 45,186 99,241
Disposals ........................... { (13,280) { (656) (320) (14,256)
At 31 December 2025 ................. 1,306 180,515 20,706 1,900 161,812 366,239
Impairment:
At 1 January 2025 .................... {{{ { { {
At 31 December 2025 ................. {{{ { { {
Net carrying amount as at 31 December
2025 ............................ { 129,061 2,737 1,006 145,875 278,679
Net carrying amount as at 1 January
2025 ............................. { 146,932 6,128 1,346 122,632 277,038
I-53


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
15. INVESTMENT PROPERTIES
The Company
As at 31 December
2024 2025
RMB’000 RMB’000
At 1 January
Cost ...................................................................... { 159,971
Accumulated depreciation .................................................... { (11,232)
Net carrying amount ......................................................... { 148,739
Cost at 1 January, net of accumulated depreciation and impairment .................... { 148,739
Transfers from property, plant and equipment ..................................... 154,071 {
Depreciation provided during the year ........................................... ( 5,332) (5,332)
Net carrying amount as at 31 December ......................................... 148,739 143,407
The properties are leased to a subsidiary and recorded as investment properties on the statement
of financial position of the Company. At the Group level, they are classified as property, plant and
equipment as it is self-used within the Group.
16. LEASES
The Group as a lessee
(a) Right-of-use assets
The carrying amounts of the Group’s right-of-use assets and the movements are as follows:
Land use
rights
Parking
space use
rights Buildings Total
RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2023 ....................................... 12,773 7,030 55,120 74,923
Additions ................................................ {{ 10,242 10,242
Lease cancellation ......................................... {{ (819) (819)
Depreciation charge ........................................ (259) (225) (22,115) (22,599)
As at 31 December 2023 .................................... 12,514 6,805 42,428 61,747
As at 31 December 2023 and 1 January 2024 .................... 12,514 6,805 42,428 61,747
Additions ................................................ {{ 35,653 35,653
Lease cancellation ......................................... {{ (21,552) (21,552)
Depreciation charge ........................................ (259) (225) (23,304) (23,788)
As at 31 December 2024 .................................... 12,255 6,580 33,225 52,060
As at 31 December 2024 and 1 January 2025 .................... 12,255 6,580 33,225 52,060
Additions ................................................ {{ 16,154 16,154
Lease cancellation ......................................... {{ (7,159) (7,159)
Revision of lease payments .................................. {{ (1,140) (1,140)
Acquisition of subsidiaries ................................... {{ 969 969
Depreciation charge ........................................ ( 259) (227) (21,561) (22,047)
As at 31 December 2025 .................................... 11,996 6,353 20,488 38,837
I-54


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
16. LEASES—continued
(b) Lease liabilities
The carrying amounts of the Group’s leases liabilities and the movements are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Carrying amount at 1 January ......................................... 57,560 44,876 33,935
New leases ........................................................ 9,692 34,528 16,154
Acquisition of subsidiary ............................................ {{ 1,100
Accretion of interest recognized during the year .......................... 2,277 1,901 1,147
Exchange realignment ............................................... ( 1 ) 1 6 1 3 4
Revision of lease payments ........................................... {{ (1,140)
Lease cancellation .................................................. (872) (24,994) (8,168)
Payments ......................................................... (23,780) (22,537) (22,543)
Carrying amount at 31 December ...................................... 44,876 33,935 20,519
Analyzed into:
Current portion ................................................ 17,884 19,565 12,752
Non-current portion ............................................. 26,992 14,370 7,767
The maturity analysis of lease liabilities is disclosed in note 43 to the Historical Financial
Information.
(c) The amounts recognized in profit or loss in relation to leases are as follows:
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Depreciation charge of right-of-use assets ............................... 22,599 23,788 22,047
Interest on lease liabilities ............................................ 2,277 1,901 1,147
Expense relating to short-term leases ................................... 2,002 3,510 3,210
Total amount recognized in profit or loss ................................ 26,878 29,199 26,404
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
16. LEASES—continued
The Company as a lessee
(a) Right-of-use assets
The carrying amounts of the Company’s right-of-use assets and the movements are as follows:
Parking space
use rights Building Total
RMB’000 RMB’000 RMB’000
As at 1 January 2023 ............................................. 7,030 45,101 52,131
Additions ...................................................... — 3,095 3,095
Depreciation charge .............................................. (225) (15,327) (15,552)
As at 31 December 2023 .......................................... 6,805 32,869 39,674
As at 31 December 2023 and 1 January 2024 .......................... 6,805 32,869 39,674
Additions ...................................................... — 19,022 19,022
Depreciation charge .............................................. (225) (15,175) (15,400)
Lease cancellation ............................................... — (17,184) (17,184)
As at 31 December 2024 .......................................... 6,580 19,532 26,112
As at 31 December 2024 and 1 January 2025 .......................... 6,580 19,532 26,112
Additions ...................................................... — 3,412 3,412
Depreciation charge .............................................. ( 227) (10,591) (10,818)
Lease cancellation ............................................... — (5,607) (5,607)
Revision of lease payments ........................................ — (1,140) (1,140)
As at 31 December 2025 .......................................... 6,353 5,606 11,959
(b) Lease liabilities
The carrying amounts of the Company’s leases liabilities and the movements are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Carrying amount at 1 January ......................................... 46,928 34,763 20,247
New leases ........................................................ 3,097 18,090 3,412
Accretion of interest recognized during the year .......................... 1,872 1,283 419
Payments ......................................................... (17,134) (14,020) (10,833)
Revision of lease payments ........................................... — — (1,140)
Lease cancellation .................................................. — (19,869) (6,509)
Carrying amount at 31 December ...................................... 34,763 20,247 5,596
Analysed into:
Current portion ................................................ 13,037 11,860 3,926
Non-current portion ............................................. 21,726 8,387 1,670
The Company as a lessor
The Company leases its investment properties under operating lease arrangements. The terms
of the leases generally require the tenants to pay security deposits and provide for periodic rent
adjustments according to the prevailing market conditions. Rental income recognized by the Company
for the years ended 31 December 2023, 2024 and 2025 was nil, RMB5,313,000 and RMB5,313,000,
respectively.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
16. LEASES—continued
As at 31 December 2023, 2024 and 2025, the undiscounted lease payments receivable by the
Company in future periods under operating leases with its tenants are as follows:
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within one year .................................................... — 5,313 5,313
After one year but within two years .................................... — — 5,313
Total ............................................................ — 5,313 10,626
17. OTHER INTANGIBLE ASSETS
The Group
Non-patented
technology Software Total
RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2023 ............................................... 17,132 39,342 56,474
Additions ...................................................... 6 9 18,357 18,426
At 31 December 2023 ............................................ 17,201 57,699 74,900
Amortisation:
At 1 January 2023 ............................................... 4,735 22,490 27,225
Provided during the year .......................................... 1,793 12,139 13,932
At 31 December 2023 ............................................ 6,528 34,629 41,157
Impairment:
At 1 January 2023 ............................................... — — —
At 31 December 2023 ............................................ — — —
Net carrying amount as at 31 December 2023 .......................... 10,673 23,070 33,743
Net carrying amount as at 1 January 2023 ............................. 12,397 16,852 29,249
I-57


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
17. OTHER INTANGIBLE ASSETS—continued
Non-patented
technology Software Total
RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2024 ............................................... 17,201 57,699 74,900
Additions ...................................................... 6 2 38,204 38,266
At 31 December 2024 ............................................ 17,263 95,903 113,166
Amortisation:
At 1 January 2024 ............................................... 6,528 34,629 41,157
Provided during the year .......................................... 1,806 17,366 19,172
At 31 December 2024 ............................................ 8,334 51,995 60,329
Impairment:
At 1 January 2024 ............................................... — — —
At 31 December 2024 ............................................ — — —
Net carrying amount as at 31 December 2024 .......................... 8,929 43,908 52,837
Net carrying amount as at 1 January 2024 ............................. 10,673 23,070 33,743
Software
copyright
Certificate of
layout rights
for
integrated
circuits
Patented
technology
Non-patented
technology Software Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2025 .................. — — — 17,263 95,903 113,166
Additions ......................... — — — — 22,465 22,465
Acquisition of subsidiaries ............ 8 9 8 1,483 34,024 — — 36,405
Disposal .......................... — — — (93) (4) (97)
At 31 December 2025 ............... 8 9 8 1,483 34,024 17,170 118,364 171,939
Amortisation:
At 1 January 2025 .................. — — — 8,334 51,995 60,329
Provided during the year ............. 7 0 1 5 5 2,613 1,684 21,156 25,678
Disposal .......................... — — — (45) (1) (46)
At 31 December 2025 ............... 7 0 1 5 5 2,613 9,973 73,150 85,961
Impairment:
At 1 January 2025 .................. — — — — — —
At 31 December 2025 ............... — — — — — —
Net carrying amount as at 31 December
2025 ........................... 8 2 8 1,328 31,411 7,197 45,214 85,978
Net carrying amount as at 1 January
2025 ........................... — — — 8,929 43,908 52,837
I-58


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
17. OTHER INTANGIBLE ASSETS—continued
The Company
Non-patented
technology Software Total
RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2023 ............................................... 9,377 37,186 46,563
Additions ...................................................... — 16,315 16,315
At 31 December 2023 ............................................ 9,377 53,501 62,878
Amortisation:
At 1 January 2023 ............................................... 3,288 22,419 25,707
Provided during the year .......................................... 9 3 8 11,483 12,421
At 31 December 2023 ............................................ 4,226 33,902 38,128
Impairment:
At 1 January 2023 ............................................... — — —
At 31 December 2023 ............................................ — — —
Net carrying amount as at 31 December 2023 .......................... 5,151 19,599 24,750
Net carrying amount as at 1 January 2023 ............................. 6,089 14,767 20,856
Non-patented
technology Software Total
RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2024 ............................................... 9,377 53,501 62,878
Additions ...................................................... — 37,111 37,111
At 31 December 2024 ............................................ 9,377 90,612 99,989
Amortisation:
At 1 January 2024 ............................................... 4,226 33,902 38,128
Provided during the year .......................................... 9 3 8 15,572 16,510
At 31 December 2024 ............................................ 5,164 49,474 54,638
Impairment:
At 1 January 2024 ............................................... — — —
At 31 December 2024 ............................................ — — —
Net carrying amount as at 31 December 2024 .......................... 4,213 41,138 45,351
Net carrying amount as at 1 January 2024 ............................. 5,151 19,599 24,750
I-59


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
17. OTHER INTANGIBLE ASSETS—continued
Non-patented
technology Software Total
RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2025 ............................................... 9,377 90,612 99,989
Additions ...................................................... — 19,731 19,731
At 31 December 2025 ............................................ 9,377 110,343 119,720
Amortisation:
At 1 January 2025 ............................................... 5,164 49,474 54,638
Provided during the year .......................................... 9 3 8 19,971 20,909
At 31 December 2025 ............................................ 6,102 69,445 75,547
Impairment:
At 1 January 2025 ............................................... — — —
At 31 December 2025 ............................................ — — —
Net carrying amount as at 31 December 2025 .......................... 3,275 40,898 44,173
Net carrying amount as at 1 January 2025 ............................. 4,213 41,138 45,351
18. GOODWILL
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At beginning of year
Cost ............................................................. 80,875 80,875 80,875
Accumulated impairment ............................................ {{ (2,183)
Net carrying amount ................................................ 80,875 80,875 78,692
Cost at beginning of year, net of accumulated impairment .................. 80,875 80,875 78,692
Acquisition of subsidiaries ........................................... {{ 222,585
Impairment during the year ........................................... { (2,183) {
Cost and carrying amount at end of year ................................ 80,875 78,692 301,277
At end of year
Cost ............................................................. 80,875 80,875 303,460
Accumulated impairment ............................................ { (2,183) (2,183)
Net carrying amount ................................................ 80,875 78,692 301,277
Impairment testing of goodwill
Goodwill acquired through business combinations is allocated to the group of Cash-Generating
Units (“CGU” or “CGUs”) for impairment testing as below:
 Suzhou Qingxinfang
 Shanghai Fangtai
 Dalian Alpha
 Hangzhou Shenan
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
18. GOODWILL—continued
 Shanghai Pingsheng
 Changzhou Ganrui
 TeraDevices Inc
The carrying amount of goodwill allocated to each of the cash-generating units is as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Suzhou Qingxinfang ................................................ 49,851 49,851 49,851
Shanghai Fangtai ................................................... 16,555 16,555 16,555
Dalian Alpha ...................................................... 7,929 7,929 7,929
Hangzhou Shenan .................................................. 4,357 4,357 4,357
Shanghai Pingsheng ................................................ 2,183 {{
Changzhou Ganrui .................................................. {{ 151,360
TeraDevice Inc .................................................... {{ 71,225
Total ............................................................ 80,875 78,692 301,277
Impairment reviews on the goodwill of the Group have been conducted by the management as
at 31 December 2023, 2024 and 2025, according to IAS 36 “Impairment of assets”. For the purposes of
impairment review, the recoverable amounts of CGU or group of CGUs are determined based on value
in use (“VIU”) calculations by using the discounted cash flow method covering a 5-year period.
Management has assessed that the Suzhou Qingxinfang, Changzhou Ganrui, TeraDevices Inc.
were material CGUs. Assumptions were used in the value in use calculation. The following describes
each key assumption on which management has based its cash flow projections to undertake
impairment testing of goodwill:
Revenue growth rate-The basis used to determine the budgeted revenue is based on
management’s expectation and also expectation of the future market.
Gross profit margin-Estimated based on the Group’s historical experience and forecast of the
semiconductor markets.
Pre-tax discount rate -Estimated by using the weighted average cost of capital (“WACC”)
method. The WACC was calculated by referring to public market data including risk-free rate, market
return, beta of comparable public companies etc. and the specific risk of the business.
(a) Suzhou Qingxinfang
The pre-tax discount rates used for VIU calculation for the impairment test as at 31 December
2023, 2024 and 2025 are 16.83%, 16.23%, and 14.31%, respectively.
The gross profit margin used for VIU calculation for the impairment test as at 31 December
2023, 2024 and 2025 are 47.07%, 35.68%, and 41.07%, respectively.
The revenue growth rate used for VIU calculation for the impairment test as at 31 December
2023, 2024 and 2025 are 268.38%, 331.83%, and 224.46%, respectively.
I-61


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
18. GOODWILL—continued
For the sensitivity analysis conducted during the impairment review for material CGUs, Suzhou
Qingxinfang, had there been reasonably possible changes with an increase in pre-tax discount rate by
1%, a decrease in gross profit margin by 2% or a decrease in revenue growth rate by 5%, if one of the
key assumptions was to change while other variable held constant, the recoverable amount would
decrease by:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Pre-tax discount rate increases by 1% ................................... 8,186 9,330 12,600
Gross profit margin decreases by 2% ................................... 8,297 12,365 15,100
Revenue growth rate decrease by 5% ................................... 9,142 8,248 21,800
Based on management’s assessment on the recoverable amounts, the headroom of material
CGUs as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Suzhou Qingxinfang .............................................. 51,171 61,377 41,089
As disclosed above, the management has considered and assessed reasonably possible
changes for the key assumptions and has not identified any instances that would cause the carrying
amounts of the CGUs to exceed their recoverable amounts as at 31 December 2023, 2024 and 2025,
respectively.
(b) Changzhou Ganrui
The pre-tax discount rates used for VIU calculation for the impairment test as at 31 December
2025 is 12.51%, respectively.
The gross profit margin used for VIU calculation for the impairment test as at 31 December
2025 is 48.65%.
The revenue growth rate used for VIU calculation for the impairment test as at 31 December
2025 is 50.80%.
For the sensitivity analysis conducted during the impairment review for material CGUs,
Changzhou Ganrui, had there been reasonably possible changes with an increase in pre-tax discount
rate by 1%, a decrease in gross profit margin by 2% or a decrease in revenue growth rate by 2%, if one
of the key assumptions was to change while other variable held constant, the recoverable amount
would decrease by:
31 December 2025
RMB’000
Pre-tax discount rate increases by 1% .............................................. 37,000
Gross profit margin decreases by 2% ............................................... 36,900
Revenue growth rate decreases by 2% .............................................. 29,000
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
18. GOODWILL—continued
Based on management’s assessment on the recoverable amounts, the headroom of material
CGUs as follows:
31 December 2025
RMB’000
Changzhou Ganrui ............................................................. 64,825
As disclosed above, the management has considered and assessed reasonably possible changes
for the key assumptions and has not identified any instances that would cause the carrying amounts of
the CGUs to exceed their recoverable amounts as at 31 December 2025 respectively.
(c) TeraDevices Inc
The pre-tax discount rates used for VIU calculation for the impairment test as at 31 December
2025 is 16.91%, respectively.
The gross profit margin used for VIU calculation for the impairment test as at 31 December
2025 is 55.48%.
The revenue growth rate used for VIU calculation for the impairment test as at 31 December
2025 is 11.96%.
For the sensitivity analysis conducted during the impairment review for material CGUs,
TeraDevices Inc, had there been reasonably possible changes with an increase in pre-tax discount rate
by 0.5%, a decrease in gross profit margin by 0.5% or a decrease in revenue growth rate by 1%, if one
of the key assumptions was to change while other variable held constant, the recoverable amount
would decrease by:
31 December 2025
RMB’000
Pre-tax discount rate increases by 0.5% ............................................. 3,620
Gross profit margin decreases by 0.5% ............................................. 2,420
Revenue growth rate decreases by 1% .............................................. 4,030
Based on management’s assessment on the recoverable amounts, the headroom of material
CGUs as follows:
31 December 2025
RMB’000
TeraDevices Inc. .............................................................. 4,377
As disclosed above, the management has considered and assessed reasonably possible changes
for the key assumptions and has not identified any instances that would cause the carrying amounts of
the CGUs to exceed their recoverable amounts as at 31 December 2025 respectively.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
18. GOODWILL—continued
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Goodwill ......................................................... 24,484 24,484 24,484
Less: Impairment .................................................. .———
Total ............................................................ 24,484 24,484 24,484
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Shanghai Fangtai ................................................... 16,555 16,555 16,555
Dalian Alpha ...................................................... 7,929 7,929 7,929
Total ............................................................ 24,484 24,484 24,484
19. DEFERRED TAX
For presentation purposes, certain deferred tax assets and liabilities have been offset in the
statement of financial position.
The Group
The gross amounts of deferred tax assets and liabilities of the Group before offsetting are as
follows:
(a) Gross deferred tax assets:
2023
At
1 January
2023
Deferred tax
credited/(charged)
to the statement
of profit or loss
during the year
Deferred tax
charged to the
statement of
equity during the
year
As at
31 December
2023
RMB’000 RMB’000 RMB’000 RMB’000
Losses available for offsetting against future taxable
profits ................................... 49,597 20,662 { 70,259
Share-based payment ......................... 48,228 (13,471) (14,404) 20,353
Accruals and provision ........................ 21,625 1,326 { 22,951
Impairment of assets .......................... 19,873 710 { 20,583
Payroll payables ............................. 8,447 7,155 { 15,602
Deferred income ............................. 6,834 21 { 6,855
Lease liabilities .............................. 4,819 (1,184) { 3,635
Depreciation and amortization .................. 1,169 384 { 1,553
Changes in fair value ......................... 7 6 (76) {{
Total ...................................... 160,668 15,527 (14,404) 161,791
I-64


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
19. DEFERRED TAX—continued
2024
At
1 January
2024
Deferred tax
credited/(charged)
to the statement
of profit or loss
during the year
Deferred tax
credited to the
statement of
equity during the
year
As at
31 December
2024
RMB’000 RMB’000 RMB’000 RMB’000
Losses available for offsetting against future taxable
profits ................................... 70,259 16,303 { 86,562
Accruals and provision ........................ 22,951 3,336 { 26,287
Impairment of assets .......................... 20,583 3,277 { 23,860
Share-based payment ......................... 20,353 (4,976) 949 16,326
Payroll payables ............................. 15,602 (3,400) { 12,202
Deferred income ............................. 6,855 (927) { 5,928
Lease liabilities .............................. 3,635 (1,571) { 2,064
Depreciation and amortization .................. 1,553 1,036 { 2,589
Others ..................................... { 78 { 78
Total ...................................... 161,791 13,156 949 175,896
2025
At
1 January
2025
Deferred tax
credited/(charged)
to the statement
of profit or loss
during the year
Deferred tax
charged to the
statement of
equity during the
year
As at
31 December
2025
RMB’000 RMB’000 RMB’000 RMB’000
Losses available for offsetting against future taxable
profits ................................... 86,562 (18,615) — 67,947
Accruals and provision ........................ 26,287 926 — 27,213
Impairment of assets .......................... 23,860 4,735 — 28,595
Share-based payment ......................... 16,326 13,694 (5,840) 24,180
Payroll payables ............................. 12,202 (2,457) — 9,745
Deferred income ............................. 5,928 (1,144) — 4,784
Depreciation and amortisation .................. 2,589 (913) — 1,676
Lease liabilities .............................. 2,064 (1,441) — 623
Others ..................................... 7 8 (78) — —
Total ...................................... 175,896 (5,293) (5,840) 164,763
I-65


--- page 357 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
19. DEFERRED TAX—continued
(b) Gross deferred tax liabilities
2023
At
1 January
2023
Deferred tax
credited/(charged)
to the statement
of profit or loss
during the year
As at
31 December
2023
RMB’000 RMB’000 RMB’000
Withholding taxes .......................................... 34,222 401 34,623
Depreciation and amortization ................................ 11,050 569 11,619
Right-of-use assets ......................................... 4,510 (1,223) 3,287
Fair value adjustments arising from acquisition of subsidiaries ...... 7 4 4 (92) 652
Changes in fair value ....................................... { 59 59
Total .................................................... 50,526 (286) 50,240
2024
At
1 January
2024
Deferred tax
credited/(charged)
to the statement
of profit or loss
during the year
As at
31 December
2024
RMB’000 RMB’000 RMB’000
Withholding taxes .......................................... 34,623 4,965 39,588
Depreciation and amortization ................................ 11,619 2,389 14,008
Right-of-use assets ......................................... 3,287 (1,334) 1,953
Fair value adjustments arising from acquisition of subsidiaries ...... 6 5 2 (316) 336
Changes in fair value ....................................... 5 9 7 8 2 8 4 1
Total .................................................... 50,240 6,486 56,726
2025
At
1 January
2025
Deferred tax
credited/(charged)
to the statement
of profit or loss
during the year
The impact
of acquiring
a subsidiary
As at
31 December
2025
RMB’000 RMB’000 RMB’000 RMB’000
Withholding taxes ............................... 39,588 13,593 — 53,181
Depreciation and amortisation ...................... 14,008 (1,794) — 12,214
Right-of-use assets ............................... 1,953 (1,392) — 561
Fair value adjustments arising from acquisition of
subsidiaries ................................... 3 3 6 (366) 1,648 1,618
Changes in fair value ............................. 8 4 1 (352) — 489
Others ......................................... — 2 3 5 — 2 3 5
Total .......................................... 56,726 9,924 1,648 68,298
I-66


--- page 358 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
19. DEFERRED TAX—continued
(c) Offsetting
The net amounts of deferred tax assets and liabilities after offsetting are as follows:
As at 31 December
2023 2024 2025
Offsetting
Net carrying
amount Offsetting
Net carrying
amount Offsetting
Net carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Deferred tax assets ................... { 161,791 { 175,896 13,499 151,264
Deferred tax liabilities ................ { 50,240 { 56,726 13,499 54,799
(d) Deferred tax assets not recognized
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Deductible temporary difference ..................................... 43,460 56,019 142,168
Tax losses ....................................................... 577,914 736,276 1,165,029
Total ........................................................... 621,374 792,295 1,307,197
The above tax losses are available in one to ten years for offsetting against future taxable profits
of the companies in which the losses arose. Deferred tax assets have not been recognized in respect of
the above items as it is not considered probable that taxable profits will be available against which the
above items can be utilized.
At 31 December 2023, 2024 and 2025, other than the amount recognized in the consolidated
financial statements, deferred tax has not been recognized for withholding taxes that would be payable
on the unremitted earnings that are subject to withholding taxes of the Group’s subsidiaries established
in Chinese Mainland. In the opinion of the directors, it is not probable that these subsidiaries will
distribute such earnings in the foreseeable future. The aggregate amount of temporary differences
associated with investments in subsidiaries in Chinese Mainland for which deferred tax liabilities have
not been recognized approximately RMB621,374,000, RMB792,295,000 and RMB1,307,197,000,
respectively at 31 December 2023, 2024 and 2025.
There are no income tax consequences attaching to the payment of dividends by the Company
to its shareholders.
I-67


--- page 359 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
19. DEFERRED TAX—continued
The Company
The gross amounts of deferred tax assets and liabilities of the Company before offsetting are as
follows:
(a) Gross deferred tax assets
2023
At
1 January
2023
Deferred tax
credited/(charged)
to the statement
of profit or loss
during the year
Deferred tax
charged to
the statement of
equity during the
year
As at
31 December
2023
RMB’000 RMB’000 RMB’000 RMB’000
Losses available for offsetting against future taxable
profits ................................... 49,597 20,662 — 70,259
Share-based payment ......................... 48,228 (13,471) (14,404) 20,353
Accruals and provision ........................ 21,625 1,326 — 22,951
Impairment of assets .......................... 19,873 3,632 — 23,505
Payroll payables ............................. 8,447 7,155 — 15,602
Deferred income ............................. 6,834 21 — 6,855
Lease liabilities .............................. 4,819 (1,184) — 3,635
Depreciation and amortization .................. 1,169 384 — 1,553
Changes in fair value ......................... 7 6 (76) — —
Total ...................................... 160,668 18,449 (14,404) 164,713
2024
At
1 January
2024
Deferred tax
credited/(charged)
to the statement
of profit or loss
during the year
Deferred tax
credited
to the statement
of equity
during the year
As at
31 December
2024
RMB’000 RMB’000 RMB’000 RMB’000
Losses available for offsetting against future taxable
profits .................................... 70,259 16,303 — 86,562
Impairment of assets ........................... 23,505 4,526 — 28,031
Accruals and provision ......................... 22,951 3,336 — 26,287
Share-based payment .......................... 20,353 (4,976) 949 16,326
Payroll payables .............................. 15,602 (3,400) — 12,202
Deferred income .............................. 6,855 (927) — 5,928
Lease liabilities ............................... 3,635 (1,571) — 2,064
Depreciation and amortization ................... 1,553 1,036 — 2,589
Others ...................................... — 7 8 — 7 8
Total ....................................... 164,713 14,405 949 180,067
I-68


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
19. DEFERRED TAX—continued
The Company—continued
The gross amounts of deferred tax assets and liabilities of the Company before offsetting are as
follows—continued:
(a) Gross deferred tax assets—continued
2025
At
1 January
2025
Deferred tax
credited/(charged)
to the statement
of profit or loss
during the year
Deferred tax
charged to
the statement of
equity during
the year
As at
31 December
2025
RMB’000 RMB’000 RMB’000 RMB’000
Losses available for offsetting against future taxable
profits .................................... 86,562 (18,615) — 67,947
Impairment of assets ........................... 28,031 20,555 — 48,586
Accruals and provision ......................... 26,287 926 — 27,213
Share-based payment .......................... 16,326 13,694 (5,840) 24,180
Payroll payables .............................. 12,202 (2,457) — 9,745
Deferred income .............................. 5,928 (1,144) — 4,784
Lease liabilities ............................... 2,064 (1,441) — 623
Depreciation and amortisation ................... 2,589 (913) — 1,676
Others ...................................... 7 8 (78) — —
Total ....................................... 180,067 10,527 (5,840) 184,754
(b) Gross deferred tax liabilities
2023
At
1 January
2023
Deferred tax
credited/(charged)
to the statement
of profit or loss
during the year
As at
31 December
2023
RMB’000 RMB’000 RMB’000
Depreciation and amortization ................................ 11,050 569 11,619
Right-of-use assets ......................................... 4,510 (1,223) 3,287
Changes in fair value ....................................... — 5 9 5 9
Total .................................................... 15,560 (595) 14,965
2024
At
1 January
2024
Deferred tax
credited/(charged)
to the statement
of profit or loss
during the year
As at
31 December
2024
RMB’000 RMB’000 RMB’000
Depreciation and amortization ................................ 11,619 2,389 14,008
Right-of-use assets ......................................... 3,287 (1,334) 1,953
Changes in fair value ....................................... 5 9 7 8 2 8 4 1
Total .................................................... 14,965 1,837 16,802
I-69


--- page 361 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
19. DEFERRED TAX—continued
The Company—continued
The gross amounts of deferred tax assets and liabilities of the Company before offsetting are as
follows—continued:
(b) Gross deferred tax liabilities—continued
2025
At
1 January
2025
Deferred tax
credited/(charged)
to the statement
of profit or loss
during the year
As at
31 December
2025
RMB’000 RMB’000 RMB’000
Depreciation and amortization ................................ 14,008 (1,794) 12,214
Right-of-use assets ......................................... 1,953 (1,392) 561
Changes in fair value ....................................... 8 4 1 ( 352) 489
Others ................................................... — 2 3 5 2 3 5
Total .................................................... 16,802 (3,303) 13,499
(c) Offsetting
The net amounts of deferred tax assets and liabilities of the Company after offsetting are as
follows:
As at 31 December
2023 2024 2025
Offsetting
Net carrying
amount Offsetting
Net carrying
amount Offsetting
Net carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Deferred tax assets ....................... — 164,713 — 180,067 13,499 171,255
Deferred tax liabilities .................... — 14,965 — 16,802 13,499 —
20. INVESTMENTS IN ASSOCIATES
The Group and the Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Share of net assets .................................................. 283,834 338,817 408,358
Goodwill on acquisition ............................................. 139,526 169,512 147,006
Total ............................................................ 423,360 508,329 555,364
The Group considered ETA Semiconductor Limited as a material associate as of 31 December
2023 and 2024, and there was no material associate according to the Group’s criteria as of 31
December 2025.
I-70


--- page 362 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
20. INVESTMENTS IN ASSOCIATES—continued
Particulars of the material associate as of 31 December 2023 and 2024 is as follows:
Name
Particulars
of issued
shares held
Place of
registration and
business Principal activities
ETA Semiconductor Limited ..................... Ordinary
shares
PRC/
Chinese Mainland
Design and sales of
semiconductor chips
The above investment is directly held by the Company, which is an unlisted corporate entity
whose quoted market price is not available. The following table illustrates the summarized financial
information in respect of ETA Semiconductor Limited adjusted for any differences in accounting
policies and reconciled to the carrying amount in the consolidated financial statements:
As at 31 December
2023 2024
RMB’000 RMB’000
Current assets .............................................................. 735,504 751,897
Non-current assets, excluding goodwill .......................................... 189,096 232,635
Current liabilities ........................................................... 66,796 81,309
Non-current liabilities ........................................................ 7,016 3,834
Net assets ................................................................. 850,788 899,389
Reconciliation to the Group’s interest in the associate:
Proportion of the Group’s ownership ........................................ 25.02% 25.02%
Group’s share of net assets of the associate, excluding goodwill .................. 212,842 225,000
Goodwill on acquisition (less cumulative impairment) .......................... 89,145 89,145
Carrying amount of the investment ......................................... 301,987 314,145
Revenue .................................................................. 602,794 653,411
Profit/(loss) for the year ...................................................... (44,561) 20,043
Other comprehensive income .................................................. 1 3 2 9 1
Total comprehensive income for the year ........................................ (44,429) 20,134
The following table illustrates the aggregate financial information of the Group’s associates that
are not individually material:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Share of the associates’ profit for the year ............................... 3,512 7,475 7,549
Other comprehensive income ......................................... — — 39,604
Total comprehensive income for the year ................................ 3,512 7,475 47,153
Aggregate carrying amount of the Group’s investments in the associates ....... 121,373 194,184 555,364
I-71


--- page 363 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
21. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current:
Listed equity investments, at fair value ........................... 31,916 35,257 11,424
Other unlisted investments, at fair value .......................... 77,247 86,592 104,567
Subtotal ....................................................... 109,163 121,849 115,991
Current:
Wealth management products .................................. 769,093 1,378,000 1,340,087
Total .......................................................... 878,256 1,499,849 1,456,078
The above equity investments in unlisted entities were classified as financial assets at fair value
through profit or loss as the Group has not designated it as financial assets at fair value through other
comprehensive income.
The above wealth management products were issued by banks in Chinese Mainland. They were
mandatorily classified as financial assets at fair value through profit or loss as their contractual cash
flows are not solely payments of principal and interest.
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current:
Other unlisted investments, at fair value .......................... 77,247 86,592 104,567
Current:
Wealth management products .................................. 704,344 1,338,813 1,242,018
Total .......................................................... 781,591 1,425,405 1,346,585
22. OTHER NON-CURRENT ASSETS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayments for packaging and testing .................................. 11,850 11,850 1,800
Prepayments for software ............................................ 10,951 3,972 4,160
Prepayments for property, plant and equipment ........................... 9,535 4,499 16,830
Others ........................................................... — — 5 8 1
Subtotal .......................................................... 32,336 20,321 23,371
Less: Impairment ................................................... — — —
Total ............................................................ 32,336 20,321 23,371
I-72


--- page 364 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
22. OTHER NON-CURRENT ASSETS—continued
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayments for packaging and testing .................................. 11,850 11,850 1,800
Prepayments for software ............................................ 10,951 3,972 4,160
Prepayments for property, plant and equipment ........................... 7,565 102 12,120
Others ........................................................... — — 2 0 6
Subtotal .......................................................... 30,366 15,924 18,286
Less: Impairment ................................................... — — —
Total ............................................................ 30,366 15,924 18,286
23. INVENTORIES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Raw materials .................................................. 597,642 745,999 836,639
Finished goods ................................................. 372,175 521,099 686,946
Work in progress ................................................ 150,555 164,305 234,568
Contract costs .................................................. — — 4 9 3
Less: Provision for impairment ..................................... (219,005) (266,586) (310,430)
Total ......................................................... 901,367 1,164,817 1,448,216
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Raw materials ................................................... 549,289 640,998 696,779
Finished goods .................................................. 312,058 427,520 612,560
Work in progress ................................................ 115,593 134,938 195,251
Contract costs ................................................... — — 4 9 3
Less: Provision for impairment ..................................... (202,842) (233,522) (278,124)
Total .......................................................... 774,098 969,934 1,226,959
I-73


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
24. TRADE AND BILLS RECEIVABLES AT AMORTISED COST
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade receivables ................................................... 169,576 237,093 372,289
Bills receivables ................................................... — — 1,118
Less: Impairment ................................................... (3,104) (4,329) (10,577)
Total ............................................................ 166,472 232,764 362,830
The Group’s trading terms with its customers are mainly on credit, except for certain
customers, where payment in advance is normally required. The credit period is generally one month.
The Group seeks to maintain strict control over its outstanding receivables. Overdue balances are
reviewed regularly by management.
Significant concentrations of credit risk primarily arise when the Group has significant
exposure to individual customers. As at 31 December 2023, 2024 and 2025, 67.31%, 44.27% and
30.68% of the total trade receivables, respectively, was due from the Group’s five largest customers.
Trade and bills receivables are non-interest-bearing.
An aging analysis of the trade receivables as at the end of each of the Relevant Period, based on
the past due date and net of loss allowance, is as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Not due and within one year .......................................... 166,472 232,764 359,716
Over one year ..................................................... — — 1,996
total ............................................................. 166,472 232,764 361,712
The movements in the loss allowance for impairment of trade receivables are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At the beginning of the year .......................................... 2,182 3,104 4,329
Impairment losses, net ............................................... 9 1 1 1,208 2,173
Exchange realignment ............................................... 1 1 1 7 ( 3 7 )
Acquisition of a subsidiary ........................................... — — 4,112
At the end of the year ............................................... 3,104 4,329 10,577
The Group applies the simplified approach to providing for expected credit losses at the end of
the reporting period. In addition, the provision rates are based on aging for groupings of various
customer segments with similar loss patterns on a collective basis. The calculation reflects the
probability-weighted outcome, the time value of money and reasonable and supportable information
that is available at the reporting date about past events, current conditions and forecasts of future
I-74


--- page 366 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
24. TRADE AND BILLS RECEIVABLES AT AMORTISED COST—continued
economic conditions. Generally, trade and bills receivables are written off if a customer discontinues
operation with no reasonable expectation of recovering the contractual cash flows and are not subject
to enforcement activity.
Set out below is the information about the credit risk exposure on the Group’s trade receivables
using a provision matrix:
As at 31 December
2023 2024 2025
Gross
carrying
amount
Expected
credit
losses
Gross
carrying
amount
Expected
credit
losses
Gross
carrying
amount
Expected
credit
losses
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Assessment of expected credit losses by credit
risk portfolio ........................ 169,576 3,104 237,093 4,329 368,888 7,176
Total ................................ 169,576 3,104 237,093 4,329 368,888 7,176
31 December 2023
Gross carrying
amount
Expected credit
losses Expected loss rate
RMB’000 RMB’000
Not due and within one year ............................. 169,576 3,104 1.83%
31 December 2024
Gross carrying
amount
Expected credit
losses Expected loss rate
RMB’000 RMB’000
Not due and within one year ............................. 237,093 4,329 1.83%
31 December 2025
Gross carrying
amount
Expected credit
losses Expected loss rate
RMB’000 RMB’000
Individual evaluation of expected credit losses: .............. 3,401 3,401 100.00%
Assessment of expected credit losses by credit risk portfolio:
Not due and within one year ............................. 366,274 6,558 1.79%
From one year to two years ............................. 1,043 97 9.30%
From two years to three years ............................ 4 1 7 6 2 14.87%
From three years to four years ........................... 7 0 1 2 2 1 31.53%
From four years to five years ............................ 4 5 3 2 3 8 52.54%
Total ............................................... 372,289 10,577 2.84%
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade receivables ................................................... 80,962 163,507 278,717
Less: Impairment ................................................... (1,627) (3,084) (5,031)
Total ............................................................ 79,335 160,423 273,686
I-75


--- page 367 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
24. TRADE AND BILLS RECEIVABLES AT AMORTISED COST—continued
An ageing analysis of the trade receivables of the Company as at the end of each of the
Relevant Periods, based on the past due date and net of loss allowance, is as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Not due and within one year .......................................... 79,335 160,423 273,686
Total ............................................................ 79,335 160,423 273,686
The movements in the loss allowance for impairment of the Company’s trade receivables are as
follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At the beginning of the year .......................................... 1,909 1,627 3,084
Impairment (reversal)/losses, net ...................................... (282) 1,457 1,947
At the end of the year ............................................... 1,627 3,084 5,031
Set out below is the information about the credit risk exposure on the Company’s trade
receivables using a provision matrix:
31 December 2023
Gross carrying
amount
Expected credit
losses Expected loss rate
RMB’000 RMB’000
Not due and within one year ............................. 80,962 1,627 2.01%
31 December 2024
Gross carrying
amount
Expected credit
losses Expected loss rate
RMB’000 RMB’000
Not due and within one year ............................. 163,507 3,084 1.89%
31 December 2025
Gross carrying
amount
Expected credit
losses Expected loss rate
RMB’000 RMB’000
Not due and within one year ............................. 278,717 5,031 1.81%
I-76


--- page 368 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
25. PREPAYMENTS, OTHER RECEIVABLES AND OTHER ASSETS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Deductible input value-added tax (“VAT”) .............................. 39,839 24,804 36,131
Rights of return assets ............................................... 22,883 34,536 17,018
Deposits .......................................................... 10,961 10,713 8,871
Prepaid income tax ................................................. 8,406 18,013 29,885
Prepayment for raw materials and products .............................. 1,510 1,653 5,280
Dividend receivable ................................................. — 2,158 —
Listing fees ....................................................... — — 20,371
Prepayments for packaging and testing .................................. — — 10,050
Others ........................................................... 4,579 10,032 11,769
Less: Impairment allowance .......................................... (1,942) (1,825) (1,741)
Total ............................................................ 86,236 100,084 137,634
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Deductible input value-added tax (“VAT”) .............................. 26,652 8,429 15,966
Rights of return assets ............................................... 21,188 15,105 5,266
Prepaid income tax ................................................. 8,406 18,013 29,885
Deposits .......................................................... 3,565 4,555 3,440
Dividend receivable ................................................. — 2,158 —
Prepayment for raw materials and products .............................. — — 9 9 2
Listing fees ....................................................... — — 20,371
Prepayments for packaging and testing .................................. — — 10,050
Others ........................................................... 4,321 9,334 7,866
Less: Impairment allowance .......................................... (893) (648) (784)
Total ............................................................ 63,239 56,946 93,052
26. CASH AND CASH EQUIVALENTS, TIME DEPOSITS AND RESTRICTED CASH
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Time deposits:
Current ........................................................ {{ 81,810
Non-current .................................................... 10,182 379,427 371,754
Current:
Cash and bank balances ........................................... 1,325,296 814,949 1,225,568
Less: Restricted cash ............................................. (22,289) (1,755) (44,540)
Cash and cash equivalents ......................................... 1,303,007 813,194 1,181,028
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
26. CASH AND CASH EQUIVALENTS, TIME DEPOSITS AND RESTRICTED
CASH—continued
As at 31 December 2023 and 2024, the restricted cash mainly consisted of restricted time
deposits relating to the bank guarantee. As at 31 December 2025, the restricted cash mainly consisted
of property preservation freeze.
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Time deposits:
Current ........................................................... {{ 65,309
Non-current ....................................................... { 368,915 371,754
Current:
Cash and bank balances .............................................. 973,735 388,081 803,007
Less: Restricted cash ................................................ (21,099) (565) (44,250)
Cash and cash equivalents ............................................ 952,636 387,516 758,757
27. TRADE PAYABLES
The Group
An aging analysis of the trade payables of the Group as at the end of each of the Relevant
Periods, based on the invoice date, is as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 month .................................................... 213,586 277,101 308,775
1 to 2 months ...................................................... 46,517 38,783 71,211
2 to 3 months ...................................................... 4,038 112 20,869
Over 3 months ..................................................... { 45 5
Total ............................................................ 264,141 316,000 400,910
The trade payables are non-interest-bearing and are normally settled on 60-day terms.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
27. TRADE PAYABLES—continued
The Company
An aging analysis of the trade payables of the Company as at the end of each of the Relevant
Periods, based on the invoice date, is as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 month .................................................... 154,385 234,191 252,959
1 to 2 months ...................................................... 36,744 33,187 60,339
2 to 3 months ...................................................... 2,521 112 17,566
Over 3 months ..................................................... — — 7
Total ............................................................ 193,650 267,490 330,871
28. OTHER PAYABLES AND ACCRUALS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Payroll and welfare payables ......................................... 247,163 358,261 348,522
Liabilities for expected sales return and warranty ......................... 45,581 72,071 65,867
Payables for technological development ................................. 24,572 18,427 7,516
Other tax payable .................................................. 20,967 16,246 13,856
Payables for additions of property, plant and equipment .................... 1,344 58,676 14,543
Others ........................................................... 27,734 26,809 29,028
Total ............................................................ 367,361 550,490 479,332
Analyzed into:
Non-current portion ............................................. 45,581 72,071 8,703
Current portion ................................................ 321,780 478,419 470,629
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Payroll and welfare payables ......................................... 172,679 217,757 155,849
Liabilities for expected sales return and warranty ......................... 42,224 31,521 15,645
Payables for additions of property, plant and equipment .................... 1,072 18,011 7,378
Other tax payable .................................................. 15,304 5,529 3,890
Others ........................................................... 25,154 22,224 19,870
Total ............................................................ 256,433 295,042 202,632
Analysed into:
Non-current portion ............................................. 42,224 31,521 —
Current portion ................................................ 214,209 263,521 202,632
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
29. INTEREST-BEARING BANK BORROWINGS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current:
Bank loans - Secured ................................................ — 36,579 —
Bank loans - Unsecured .............................................. — — 300,928
Current portion of long-term bank loans - Secured ........................ — — 28,801
Total ............................................................ — 36,579 329,729
Non-current:
Bank loans - Secured ................................................ — 34,121 95,973
Less: Due within one year ............................................ — — (28,801)
Total ............................................................ — 34,121 67,172
(a) As at 31 December 2024, the annual interest rate of short-term borrowings was 2.70%.
(b) As at 31 December 2024, the annual interest rates of long-term borrowings ranged from 2.75%
to 2.76%.
(c) As at 31 December 2024, secured bank borrowings were guaranteed by the Company.
(d) As at 31 December 2025, the annual interest rate of short-term borrowings was 2.11%.
(e) As at 31 December 2025, the annual interest rates of long-term borrowings ranged from 2.65%
to 2.76%.
(f) As at 31 December 2025, secured bank borrowings were guaranteed by the Company.
At 31 December 2023, 2024 and 2025, the Group’s bank loans were repayable as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year ...................................................... — 36,579 329,729
1 to 2 years ....................................................... — 10,264 67,172
2 to 3 years ....................................................... — 23,857 —
Total ............................................................ — 70,700 396,901
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current:
Bank loans - Unsecured ............................................ — — 300,928
I-80


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
30. CONTRACT LIABILITIES
An analysis of the contract liabilities arising from short-term advances received from customers
are as follows:
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Receipt in advance
-Sales of products .................................................. 13,007 13,556 13,167
-Rendering of services ............................................... 1,887 4,751 5,222
Total ............................................................ 14,894 18,307 18,389
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Receipt in advance
-Sales of products .................................................. 3,602 3,757 3,330
-Rendering of services ............................................... 1,887 4,151 4,569
Total ............................................................ 5,489 7,908 7,899
31. DEFERRED INCOME
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At beginning of year ................................................ 68,345 71,516 75,701
Additions during the year ............................................ 10,474 15,190 31,941
Released to profit or loss ............................................. (7,303) (11,005) (39,447)
At end of year ..................................................... 71,516 75,701 68,195
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At beginning of year ................................................ 68,345 68,545 59,281
Additions during the year ............................................ 4,984 — 26,411
Released to profit or loss ............................................. (4,784) (9,264) (37,850)
At end of year ..................................................... 68,545 59,281 47,842
Deferred income is mainly government grants deferred. Government grants will be recognized
into profit or loss when conditions attached are fulfilled or on a straight-line basis over the expected
lives of the property, plant and equipment.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
32. OTHER NON-CURRENT LIABILITIES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Redemption financial liabilities* ...................................... 50,000 50,000 43,916
Financial liabilities related to abligations to acquire non-controlling interests
arising from acquisitions of subsidiaries** ............................. — — 144,083
Total ............................................................ 50,000 50,000 187,999
* Redemption financial liabilities are the redeemable preferred shares invested by non-controlling shareholders of a subsidiary, and these
are recognized initially at the present value of the redemption amount and subsequently measured at amortised cost. The management
assessed the impact of discounting and concluded that its financial effect was immaterial; accordingly, the financial liabilities are
measured at cost both at initial recognition and subsequent measurement in 2023 and 2024. In 2025, the management re-evaluated the
impact of discounting and recognized the cumulative effect of discounting as of 31 December 2025 in the current year.
** As part of the purchase agreements for certain acquisitions completed by the Group in 2025, put options were granted to the non-
controlling shareholders, giving them the right to require the Group to purchase their remaining equity interests at a price determined in
accordance with the agreed formulas when certain performance criteria are met. Accordingly, the Group recognized the corresponding
obligations as financial liabilities.
33. SHARE CAPITAL
Shares
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Issued and fully paid ordinary shares ................................... 469,487 473,450 620,063
A summary of movements in the Company’s share capital is as follows:
Number of
shares in issue
Share
capital
RMB’000 RMB’000
At 1 January 2023 ........................................................ 358,061 358,061
Converted from capital reserve (Note (a)) ..................................... 107,846 107,846
Shares issued under share-based payment schemes .............................. 3,580 3,580
At 31 December 2023 ..................................................... 469,487 469,487
At 1 January 2024 ........................................................ 469,487 469,487
Shares issued under share-based payment schemes .............................. 3,963 3,963
At 31 December 2024 ..................................................... 473,450 473,450
At 1 January 2025 ........................................................ 473,450 473,450
Converted from capital reserve (Note (b)) ..................................... 142,592 142,592
Shares issued under share-based payment schemes .............................. 4,021 4,021
At 31 December 2025 ..................................................... 620,063 620,063
Notes:
(a) As approved in the Annual General Meeting held on 12 May 2023, the Company has transferred capital reserve of RMB107,846,000 to
share capital with a nominal value of RMB1 per share.
(b) As approved in the Annual General Meeting held on 23 May 2025, the Company has transferred capital reserve of RMB142,592,000 to
share capital with a nominal value of RMB1 per share.
I-82


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
34. SHARE-BASED PAYMENT
(a) Share-based payment expenses during the Track Record Period are as follows:
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Equity settled share-based payment .................................... 118,791 84,836 159,113
(b) Share Option Incentive Plans
According to the Company’s performance evaluation and individual performance evaluation, stock
options granted to certain senior management personnel, key management personnel, and key technical
personnel in 2018, 2022, 2023 and 2025 can be exercised in four installments, with the highest feasible
percentage for each exercise period being 22%, 24%, 26%, and 28%, respectively. The first tranche
becomes exercisable 12, 15, or 18 months after the grant date; the second tranche, 24, 27, or 30 months after
the grant date; the third tranche, 36, 39, or 42 months after the grant date; and the fourth tranche, within 48,
51, or 54 months after the grant date.
(i) The number and weighted average exercise prices of share options are as follows:
Weighted average
exercise price Number of options
RMB ‘000
per share
At 1 January 2023 ............................................... 7,593
Granted during the year ........................................... 66.25 10,310
Forfeited during the year .......................................... 101.68 (1,310)
Exercised during the year ......................................... 20.33 (2,732)
At 31 December 2023 ............................................ 13,861
At 1 January 2024 ............................................... 13,861
Granted during the year ........................................... 58.00 2,066
Forfeited during the year .......................................... 98.83 (2,579)
Exercised during the year ......................................... 48.63 (2,824)
At 31 December 2024 ............................................ 10,524
At 1 January 2025 ............................................... 10,524
Granted during the year ........................................... 66.35 16,468
Forfeited during the year .......................................... 76.14 (498)
Exercised during the year ......................................... 51.64 	2,818)
At 31 December 2025 ............................................ 23,676
I-83


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
34. SHARE-BASED PAYMENT—continued
(ii) The exercise prices and exercise periods of the share options outstanding as at the end of the
reporting period are as follows:
31 December 2023
Number of options
‘000
Exercise price*
RMB per share Exercise period
786 12.86 2020-2024
1,120 55.24 2021-2025
3,696 102.08 2023-2027
8,259 66.00 2024-2028
13,861
31 December 2024
Number of options
‘000
Exercise price*
RMB per share Exercise period
414 55.14 2021-2025
1,329 101.98 2023-2027
6,716 65.90 2024-2028
2,065 58.00 2025-2029
10,524
31 December 2025
Number of options
‘000
Exercise price*
RMB per share Exercise period
1,336 78.29 2023-2027
6,494 50.54 2024-2028
2,302 44.46 2025-2029
337 73.69 2026-2030
13,207 55.69 2026-2030
23,676
* The exercise price of the share options is subject to adjustment in the case of rights or bonus issues, or other similar changes in the
Company’s share capital.
During the period of January 1, 2026 to June 8, 2026
 951,610 share options have been
exercised. As of the reporting date, employees are still exercising their share options gradually.
(iii) Fair value of share options and assumptions
The fair value at grant date is independently determined using an adjusted form of the Black
Scholes Model that takes into account the exercise price, the term of the option, the impact of dilution
(where material), the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield, the risk-free interest rate for the term of the option and the correlations and
volatilities of the peer group companies.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
34. SHARE-BASED PAYMENT—continued
Key assumptions used in determining the fair value of share options granted are as follows:
As at 31 December
2023 2024 2025
Fair value at grant date (RMB per share) ................... 5.72-78.24 12.55-78.24 12.55-62.74
Dividend yield (%) .................................... 0.1642-0.3807 0.1192-0.3224 0.1192-0.2692
Expected volatility (%) ................................. 18.3348-33.3167 18.3348-33.0200 18.3348-40.0925
Risk-free interest rate (%) ............................... 1.7199-2.9730 1.4963-2.9730 1.4077-2.4156
Expected life of options (year) ........................... 1-4.5 1-4.5 1-4.5
Weighted average share price (RMB per share) .............. 71.74 68.48 55.04
(c) Class II Restricted Stock Incentive Plans
The Company operates 2021 Class II restricted stock incentive plan. According to the
Company’s performance appraisal and individual performance appraisal, the restricted stock granted to
certain senior management personnel, key management personnel and key technical personnel are
exercisable in four exercise periods commencing after 12 months from the grant date and ends on a
date which is not later than five years from the date of offer of the share options or the expiry date of
the Scheme, if earlier, with the maximum exercisable percentage for each period being 24%, 26% and
28%, respectively.
(i) The number and weighted average subscription prices of restricted stocks are as follows:
Weighted average
exercise price
Number of
restricted stocks
RMB ‘000
per share
At 1 January 2023 ................................................. 3,856
Granted during the year ............................................ 78.71 844
Forfeited during the year ........................................... 98.73 (197)
Exercised during the year ........................................... 88.33 (848)
At 31 December 2023 .............................................. 3,655
At 1 January 2024 ................................................. 3,655
Granted during the year ............................................ {{
Forfeited during the year ........................................... 91.88 (393)
Exercised during the year ........................................... 67.62 (1,139)
At 31 December 2024 .............................................. 2,123
At 1 January 2025 ................................................. 2,123
Granted during the year ............................................ 78.29 186
Forfeited during the year ........................................... 95.77 (339)
Exercised during the year ........................................... 67.78 (1,203)
At 31 December 2025 .............................................. 7 6 7
I-85


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
34. SHARE-BASED PAYMENT—continued
(ii) The exercise prices and exercise periods of the restricted stocks outstanding as at the end of the
reporting period are as follows:
31 December 2023
Number of options
‘000
Exercise price*
RMB per share Exercise period
2,486 67.72 2022-2026
1,169 102.08 2023-2027
3,655
31 December 2024
Number of options
‘000
Exercise price*
RMB per share Exercise period
1,230 67.62 2022-2026
893 101.98 2023-2027
2,123
31 December 2025
Number of options
‘000
Exercise price*
RMB per share Exercise period
767 78.29 2023-2027
767
* The exercise price of the share options is subject to adjustment in the case of rights or bonus
issues, or other similar changes in the Company’s share capital.
(iii) Fair value of restricted stock and assumptions
The fair value at grant date is independently determined using an adjusted form of the Black
Scholes Model that takes into account the exercise price, the term of the restricted stock, the impact of
dilution (where material), the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield, the risk-free interest rate for the term of the restricted stock and the
correlations and volatilities of the peer group companies.
As at 31 December
2023 2024 2025
Fair value at grant date (RMB per share) ............... 56.11-114.22 56.11-114.22 89.30-114.22
Dividend yield (%) ................................ 0.1348-0.2817 0.1348-0.2817 0.1487-0.2817
Expected volatility (%) ............................. 24.0418-28.3768 24.0418-28.3768 24.0418-27.2970
Risk-free interest rate (%) ........................... 2.0521-2.9048 2.0521-2.9048 2.0521-2.4732
Expected life of restricted stock (year) ................. 1 - 4 1 - 4 1 - 4
Weighted average share price (RMB per share) .......... 78.71 82.06 78.29
35. RESERVES
The amounts of the Group’s reserves and the movements therein for the current and prior years
are presented in the consolidated statement of changes in equity on pages I-8 to I-10 of the financial
statements.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
35. RESERVES—continued
(a) Capital reserve
The capital reserve represents (i) the excess of capital contributions from the equity holders of
the Company over the share capital; (ii) the acquisition of minority interest of the Group’s subsidiaries
and the acquisition obligation of minority shareholders; (iii) the increase in capital reserve arising from
the exercise of share-based payment schemes. Details of the movement in capital reserve are set out in
the consolidated statements of changes in equity of the Historical Financial Information.
(b) Reserve funds
In accordance with the Company Law of the PRC, companies registered in Chinese Mainland
are required to allocate 10% of the profits after tax to the statutory reserve until the cumulative total of
the reserve reaches 50% of the companies’ registered capital. Subject to certain restrictions set out in
the Company Law of the PRC, part of the reserve funds may be converted to registered capital,
provided that the remaining balance after the conversion is not less than 25% of the registered capital.
(c) Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the
translation of the financial information of entities of which the functional currency is not RMB.
(d) Reserves movement of the Company
Year ended 31 December 2023
Capital
reserves
Share-
based
payment
reserves
Reserve
funds
Other
reserves
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2023 .............. 514,522 423,980 179,031 82,556 1,828,015 3,028,104
Profit for the year ..................... {{{ { 307,356 307,356
Other comprehensive income for the year:
Share of OCI of associates ..............
{{{ 35 { 35
Total comprehensive income for the year . . . {{{ 35 307,356 307,391
Equity-settled share-based payment
schemes ........................... 179,770 (52,934) {{ { 126,836
Tax effect from equity-settled share-based
payment schemes ................... { (14,404) {{ { (14,404)
Share-based payment compensation ....... { 114,467 {{ { 114,467
Transfer from retained profits ............ {{ 30,736 { (30,736) {
2022 final dividend settled by cash ........ {{{ { (107,846) (107,846)
Capital reserve converted to capital ....... (107,846) {{ { { (107,846)
Share of capital reserve of associates ...... {{{ 10,528 { 10,528
Balance at 31 December 2023 ........... 586,446 471,109 209,767 93,119 1,996,789 3,357,230
I-87


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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
35. RESERVES—continued
Year ended 31 December 2024
Capital
reserves
Share-
based
payment
reserves
Reserve
funds
Other
reserves
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2024 ............... 586,446 471,109 209,767 93,119 1,996,789 3,357,230
Profit for the year ...................... {{{ { 539,416 539,416
Other comprehensive income for the year:
Share of OCI of associates ...............
{{{ 23 { 23
Total comprehensive income for the year . . . {{{ 23 539,416 539,439
Equity-settled share-based payment
schemes ........................... 251,705 (41,326) {{ { 210,379
Tax effect from equity-settled share-based
payment schemes ................... { 949 {{ { 949
Share-based payment compensation ....... { 78,340 {{ { 78,340
Transfer from retained profits ............ {{ 26,958 { (26,958) {
2023 final dividend settled by cash ........ {{{ { (47,073) (47,073)
Share of capital reserve of associates ...... {{{ 6,212 { 6,212
Balance at 31 December 2024 ............ 838,151 509,072 236,725 99,354 2,462,174 4,145,476
Year ended 31 December 2025
Capital
reserves
Share-based
payment
reserves
Reserve
funds
Other
reserves
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2025 ............. 838,151 509,072 236,725 99,354 2,462,174 4,145,476
Profit for the year ................... {{{ { 461,730 461,730
Other comprehensive income for the
year: ............................ — — — — — —
Share of OCI of associates ............ {{{ (118) { (118)
Total comprehensive income for the
year ............................ {{{ (118) 461,730 461,612
Equity-settled share-based payment
schemes ........................ 223,223 — {{ { 223,223
Tax effect from equity-settled share-based
payment schemes .................. { (5,840) {{ { (5,840)
Share-based payment compensation .... { 142,362 {{ { 142,362
Transfer from retained profits .......... — — 54,706 — (54,706) —
Capital reserve converted to capital ..... (142,592) {{ { { (142,592)
2024 final dividend settled by cash ..... {{{ { (95,062) (95,062)
Share of capital reserve of associates .... {{{ 39,604 { 39,604
Balance at 31 December 2025 ......... 918,782 645,594 291,431 138,840 2,774,136 4,768,783
36. PARTLY-OWNED SUBSIDIARY WITH MATERIAL NON-CONTROLLING
INTERESTS
During the Relevant Periods, the Company didn’t have any subsidiary that has material
non-controlling interests individual or in the aggregate material to the Company.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
37. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
(a) Major non-cash transactions
During the years ended 31 December 2023, 2024 and 2025, the Group had non-cash additions
to right-of-use assets and lease liabilities of RMB9,692,000, RMB34,528,000 and RMB16,154,000
respectively, in respect of lease arrangements.
(b) Changes in liabilities arising from financing activities
Interest-bearing
bank borrowings
Finance leases/
Lease liabilities
RMB’000 RMB’000
At 1 January 2023 ............................................ { 57,560
Changes from financing cash flows ............................... { (23,780)
Lease cancelation ............................................. { (872)
New lease liabilities arising from additional leases during the year ...... { 9,692
Interest element of lease liabilities ............................... { 2,277
Exchange realignment ......................................... { (1)
At 31 December 2023 ......................................... { 44,876
At 1 January 2024 ............................................ { 44,876
Changes from financing cash flows ............................... 70,195 (22,537)
Lease cancelation ............................................. { (24,994)
Interest on borrowings (Note 8) .................................. 5 0 5 {
New lease liabilities arising from additional leases during the year ...... { 34,528
Interest element of lease liabilities ............................... { 1,901
Exchange realignment ......................................... { 161
At 31 December 2024 ......................................... 70,700 33,935
At 1 January 2025 ............................................ 70,700 33,935
Changes from financing cash flows .............................. 296,711 (22,543)
Lease cancelation ............................................ { (8,168)
Interest on borrowings (Note 8) .................................. 3,431 —
Revision of lease payments ..................................... — (1,140)
Increase arising from acquisition of subsidiaries .................... 26,059 1,100
New lease liabilities arising from additional leases during the year ...... { 16,154
Interest element of lease liabilities ............................... — 1,147
Exchange realignment ........................................ { 34
At 31 December 2025 ......................................... 396,901 20,519
(c) Total cash outflow for leases
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within operating activities ........................................... 2,002 3,510 3,210
Within financing activities ........................................... 23,780 22,537 22,543
Total ............................................................ 25,782 26,047 25,753
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
38. COMMITMENTS
Capital commitments
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Property, plant and equipment ........................................ 86,257 22,910 36,717
39. BUSINESS COMBINATION
Acquisition of a 67.0018% interest in GANRUI TECH (CHANGZHOU) CO., LTD.
GANRUI TECH (CHANGZHOU) CO., LTD. is engaged in the geomagnetic sensor. In
March 2025, the Group acquired 67.0018% interest in GANRUI TECH (CHANGZHOU) CO., LTD.
from the original shareholders, several independent third parties. The acquisition was made to improve
the Group’s production capacity. The purchase consideration for the acquisition was RMB160,800,000
in cash.
The fair values of the identifiable assets and liabilities of GANRUI TECH (CHANGZHOU)
CO., LTD. as at the date of acquisition were as follows:
Total
RMB’000
Cash and cash equivalents ............................................................ 1,061
Trade and bills receivables at amortised cost ............................................. 5,631
Contract assets ..................................................................... 2,372
Inventories ........................................................................ 5,925
Prepayments, other receivables and other assets ........................................... 6,496
Property, plant and equipment ......................................................... 2,203
Right-of-use assets .................................................................. 9 6 9
Other Intangible assets ............................................................... 29,811
Other non-current assets ............................................................. 2,000
Trade and bills payables .............................................................. (2,710)
Other payables and accruals ........................................................... ( 10,228)
Contract liabilities .................................................................. (1,750)
Interest-bearing bank borrowings ...................................................... ( 26,059)
Lease liabilities .................................................................... (1,100)
Other non-current liabilities ........................................................... (532)
Total identifiable net assets at fair value ................................................. 14,089
Non-controlling interests ............................................................. (4,649)
9,440
Goodwill ......................................................................... 151,360
Satisfied by
Cash consideration paid during the year ended 31 December 2025 ............................ 160,800
Since the acquisition, GANRUI TECH (CHANGZHOU) CO., LTD. contributed RMB23,428,000 to
the Group’s revenue and a loss of RMB16,104,000 to the Group’s profit for the year ended 31 December
2025.
Had the combination taken place at the beginning of the year ended 31 December 2025, the
revenue of the Group and the profit of the Group for the year ended 31 December 2025 would have
been RMB3,900,799,000 and RMB525,783,000, respectively.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
39. BUSINESS COMBINATION—continued
The transaction costs for this acquisition is not material. These transaction costs have been
expensed and are included in administrative expenses in the consolidated statement of profit or loss.
An analysis of the cash flows in respect of the acquisition of the subsidiary is as follows:
RMB’000
Cash consideration ................................................................. (160,800)
Cash and bank balances acquired ...................................................... 1,061
Net outflow of cash and cash equivalents included in cash flows used in investing activities . . . (159,739)
Acquisition of a 77.5418% interest in TeraDevices Inc.
TeraDevices Inc. is engaged in the research and development services. In September 2025, the
Group acquired 77.5418% interest in TeraDevices Inc. from the original shareholders, several
independent third parties. The acquisition was made to improve the Group’s production capacity. The
purchase consideration for the acquisition was RMB96,927,000 in cash.
The fair values of the identifiable assets and liabilities of TeraDevices Inc. as at the date of
acquisition were as follows:
Total
RMB’000
Cash and cash equivalents ............................................................ 8,420
Trade and bills receivables at amortised cost ............................................. 9,095
Inventories ........................................................................ 6,550
Prepayments, other receivables and other assets ........................................... 4,058
Property, plant and equipment ......................................................... 2,271
Other Intangible assets ............................................................... 6,594
Trade and bills payables .............................................................. (257)
Other payables and accruals ........................................................... (1,937)
Other non-current liabilities ........................................................... (1,648)
Total identifiable net assets at fair value ................................................. 33,146
Non-controlling interests ............................................................. (7,444)
25,702
Goodwill 71,225
Satisfied by
Cash consideration paid during the year ended 31 December 2025 ............................ 96,927
Since the acquisition, TeraDevices Inc. contributed RMB12,854,000 to the Group’s revenue
and a loss of RMB3,569,000 to the Group’s profit for the year ended 31 December 2025.
Had the combination taken place at the beginning of the year ended 31 December 2025, the
revenue of the Group and the profit of the Group for the year ended 31 December 2025 would have
been RMB3,933,397,000 and RMB544,933,000, respectively.
The transaction costs for this acquisition is not material. These transaction costs have been
expensed and are included in administrative expenses in the consolidated statement of profit or loss.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
39. BUSINESS COMBINATION—continued
An analysis of the cash flows in respect of the acquisition of the subsidiary is as follows:
RMB’000
Cash consideration .................................................................. (96,927)
Cash and bank balances acquired ...................................................... 8,420
Net outflow of cash and cash equivalents included in cash flows used in investing activities ........ (88,507)
40. RELATED PARTY
(a) Controlling entity
Name Type
Place of
incorporation Ownership interest
As at 31 December
2023 2024 2025
Chongqing Hongshun Xiangtai Enterprise Management Co.,
L t d............................................
Controlling
shareholder
Chongqing,
PRC 19.24% 19.08% 18.94%
The Company’s controlling shareholder entity is Chongqing Hongshun Xiangtai Enterprise
Management Co., Ltd, and the ultimate controlling person is Dr. Zhang Shilong.
(b) Names and relationships with related parties
Related parties are those parties that have the ability to control, jointly control or exercise
significant influence over the other party in holding power over the investee; exposure or rights, to
variable returns from its involvement with the investee; and the ability to use its power over the
investee to affect the amount of the investor’s returns. Parties are also considered to be related if they
are subject to common control or joint control. Related parties maybe individuals or other entities.
The directors of the Company are of the view that the there had no significant related parties of
the Group that had transactions or balances with the Group for the years ended 31 December 2023,
2024 and 2025.
(c) Compensation of key management personnel of the Group
Year ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Salaries, wages and bonus ............................................ 3,357 3,710 3,837
Share based compensation ........................................... 1,494 1,416 1,507
Pension scheme contributions ......................................... 1 8 9 1 9 8 2 0 5
Total ............................................................ 5,040 5,324 5,549
Further details of directors’ and the chief executive’s emoluments are included in note 9 to the
financial statements.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
41. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments as at the end of the
Relevant Periods are as follows:
2023
Financial asset
Financial
assets at
FVTPL
Financial
assets at
amortised
cost Total
RMB’000 RMB’000 RMB’000
Financial assets at fair value through profit or loss ...................... 878,256 { 878,256
Cash and cash equivalents ......................................... — 1,303,007 1,303,007
Trade and bills receivables ........................................ { 166,472 166,472
Financial assets included in prepayments, deposits and other receivables .... { 10,277 10,277
Time deposits ................................................... { 10,182 10,182
Restricted cash .................................................. { 22,289 22,289
Total .......................................................... 878,256 1,512,227 2,390,483
Financial liabilities
Financial
liabilities at
FVTPL
Financial
liabilities at
amortised
cost Total
RMB’000 RMB’000 RMB’000
Trade payables .................................................. { 264,141 264,141
Financial liabilities included in other payables and accruals ............... { 12,782 12,782
Financial liabilities included in other non-current liabilities ............... { 50,000 50,000
Total .......................................................... { 326,923 326,923
2024
Financial asset
Financial
assets at
FVTPL
Financial
assets at
amortised
cost Total
RMB’000 RMB’000 RMB’000
Financial assets at fair value through profit or loss ..................... 1,499,849 { 1,499,849
Cash and cash equivalents ........................................ — 813,194 813,194
Time deposits ................................................. — 379,427 379,427
Trade and bills receivables ....................................... { 232,764 232,764
Financial assets included in prepayments, deposits and other receivables . . . { 9,523 9,523
Restricted cash ................................................. { 1,755 1,755
Total ........................................................ 1,499,849 1,436,663 2,936,512
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
41. FINANCIAL INSTRUMENTS BY CATEGORY—continued
Financial liabilities
Financial
liabilities at
FVTPL
Financial
liabilities at
amortised
cost Total
RMB’000 RMB’000 RMB’000
Trade payables .................................................. { 316,000 316,000
Interest-bearing bank borrowings ................................... { 70,700 70,700
Financial liabilities included in other payables and accruals ............... { 69,067 69,067
Financial liabilities included in other non-current liabilities ............... { 50,000 50,000
Total .......................................................... { 505,767 505,767
2025
Financial asset
Financial
assets at
FVTPL
Financial
assets at
FVTOCI
Financial
assets at
amortised
cost Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at fair value through profit or loss ............ 1,456,078 {{ 1,456,078
Trade and bills receivables .............................. { 260 362,830 363,090
Cash and cash equivalents ............................... {{ 1,181,028 1,181,028
Time deposits ......................................... {{ 453,564 453,564
Restricted cash ........................................ {{ 44,540 44,540
Financial assets included in prepayments, deposits and other
receivables ......................................... {{ 13,686 13,686
Total ................................................ 1,456,078 260 2,055,648 3,511,986
Financial liabilities
Financial
liabilities
at
FVTPL
Financial
liabilities at
amortised
cost Total
RMB’000 RMB’000 RMB’000
Trade payables .................................................. { 400,910 400,910
Interest-bearing bank borrowings ................................... { 396,901 396,901
Financial liabilities included in other payables and accruals ............... { 51,088 51,088
Financial liabilities included in other non-current liabilities ............... { 187,999 187,999
Total .......................................................... { 1,036,898 1,036,898
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
42. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS
The carrying amounts and fair values of the Group’s financial instruments, other than those
with carrying amounts that reasonably approximate to fair values, are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial assets:
Non-current time deposits
Carrying amount ............................................... 10,182 379,427 371,754
Fair value ..................................................... 10,410 382,193 373,851
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial liabilities:
Non-current portion of interest-bearing bank borrowings
Carrying amount ............................................... { 34,121 67,172
Fair value ..................................................... { 34,104 67,861
Financial liabilities included in other non-current liabilities
Carrying amount ............................................... 50,000 50,000 187,999
Fair value ..................................................... 48,333 48,497 188,150
Management has assessed that the fair values of cash and cash equivalents, restricted cash,
trade and bills receivables, trade payables, financial assets included in prepayments, other receivables
and other assets, current portion of interest-bearing bank borrowings, and financial liabilities included
in other payables and accruals, approximate to their carrying amounts largely due to the short term
maturities of these instruments.
The Group’s management is responsible for determining the policies and procedures for the fair
value measurement of financial instruments. At each reporting date, the management analyzes the
movements in the values of financial instruments and determines the major inputs applied in the
valuation.
The fair values of the financial assets included in time deposits and the financial liabilities
included in other non-current liabilities and interest-bearing bank borrowings have been calculated by
discounting the expected future cash flows using rates currently available for instruments with similar
terms, credit risk and remaining maturities. The changes in fair value as a result of the Group’s own
non-performance risk for non-current liabilities and interest-bearing bank borrowings as at
31 December 2023, 2024 and 2025 were assessed to be insignificant.
The fair values of listed equity investments are based on quoted market prices. The fair values
of unlisted investments designated at fair value through profit or loss have been estimated using a
valuation technique based on assumptions that are not supported by observable market prices or rates.
The directors believe that the estimated fair values resulting from the valuation technique, which are
recorded in the consolidated statements of financial position, and the related changes in fair values,
which are recorded in profit or loss, are reasonable, and that they were the most appropriate values at
the end of each Relevant Periods.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
42. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL
INSTRUMENTS—continued
The Group invests in financial products, which represent wealth management products issued
by banks in Chinese Mainland. The Group has estimated the fair value of these unlisted investments by
using a discounted cash flow valuation model based on the market interest rates of instruments with
similar terms and risks.
Below is a summary of significant unobservable input to the valuation of a financial instrument
together with a quantitative sensitivity analysis as at 31 December 2023, 2024 and 2025:
Financial assets Valuation technique
Significant
unobservable
input Sensitivity of fair value to the input
-Unlisted equity
investments
Net asset value of
underlying
investments
Net assets 5% increase/decrease in net assets would result in
an increase/decrease in fair value by
RMB3,862,000/ RMB3,862,000,
RMB4,330,000/RMB4,330,000, and
RMB5,228,000/RMB5,228,000 as at 31 December
2023, 2024 and 2025
-Wealth management
products
Discounted cash
flow method
Interest
rates
5% increase/decrease in interest rates would result
in an increase/decrease in fair value by
RMB230,000/RMB230,000,
RMB600,000/RMB600,000, and
RMB54,000/RMB54,000 as at 31 December 2023,
2024 and 2025
Fair value hierarchy
The following tables illustrate the fair value measurement hierarchy of the Group’s financial
instruments:
Assets measured at fair value:
As at 31 December 2023
Fair value measurement using
Quoted prices Significant Significant
in active observable unobservable
markets inputs inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Listed equity investments ............................. 31,916 {{ 31,916
Unlisted equity investments ............................ {{ 77,247 77,247
Wealth management products .......................... {{ 769,093 769,093
Total .............................................. 31,916 { 846,340 878,256
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
42. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL
INSTRUMENTS—continued
As at 31 December 2024
Fair value measurement using
Quoted prices Significant Significant
in active observable unobservable
markets inputs inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Listed equity investments ............................ 35,257 {{ 35,257
Unlisted equity investments .......................... {{ 86,592 86,592
Wealth management products ......................... {{ 1,378,000 1,378,000
Total ............................................ 35,257 { 1,464,592 1,499,849
As at 31 December 2025
Fair value measurement using
Quoted prices Significant Significant
in active observable unobservable
markets inputs inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at fair value through profit or loss: ........
Listed equity investments ........................ 11,424 {{ 11,424
Unlisted equity investments ...................... {{ 104,567 104,567
Wealth management products ..................... {{ 1,340,087 1,340,087
Trade and bills receivables at fair value through other
comprehensive income ............................ { 260 { 260
Total ............................................ 11,424 260 1,444,654 1,456,338
The movements in fair value measurements within Level 3 during the reporting period are as
follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial assets at fair value through profit or loss
At 1 January ................................................ 576,237 846,340 1,464,592
Purchase ................................................... 2,361,000 3,174,000 5,095,000
Fair value gains .............................................. 1,603 7,752 29,829
Disposal .................................................... (2,092,500) (2,563,500) (5,144,767)
At 31 December ............................................. 846,340 1,464,592 1,444,654
During the Relevant Periods, there were no transfers of fair value measurements between
Level 1 and Level 2 and no transfers into or out of Level 3 for both financial assets and financial
liabilities.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
42. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL
INSTRUMENTS—continued
Liabilities for which fair values are disclosed:
As at 31 December 2023
Fair value measurement using
Quoted prices Significant Significant
in active observable unobservable
markets inputs inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial liabilities included in other non-current liabilities . . . { 48,333 { 48,333
As at 31 December 2024
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Non-current portion of interest-bearing bank borrowings ..... — 34,104 — 34,104
Financial liabilities included in other non-current liabilities . . . — 48,497 — 48,497
Total .............................................. — 82,601 — 82,601
As at 31 December 2025
Fair value measurement using
Quoted prices Significant Significant
in active observable unobservable
markets inputs inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Non-current portion of interest-bearing bank borrowings ..... { 67,861 { 67,861
Financial liabilities included in other non-current liabilities . . . { 188,150 { 188,150
Total .............................................. { 256,011 { 256,011
43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise bank loans, and cash and time deposits.
The main purpose of these financial instruments is to raise finance for the Group’s operations. The
Group has various other financial assets and liabilities such as trade and bills receivables and trade and
payables, which arise directly from its operations.
The Group also enters into derivative transactions, including forward currency contracts. The
purpose is to manage the currency risks arising from the Group’s operations and its sources of finance.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign
currency risk, credit risk and liquidity risk. The board of directors reviews and agrees policies for
managing each of these risks and they are summarized below. The Group’s accounting policies in
relation to derivatives are set out in note 2.3 to the financial statements.
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—continued
Interest rate risk
Interest-bearing financial instruments at variable rates and at fixed rates expose the Group to
cash flow interest rate risk and fair value interest risk, respectively. The Group determines the
appropriate weightings of the fixed and floating rate interest-bearing instruments based on the current
market conditions and performs regular reviews and monitoring to achieve an appropriate mix of fixed
and floating rate exposure. The cash flow interest rate risk and fair value interest rate risk that the
Group exposed to are not significant.
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from export sales denominated in
foreign currencies. Foreign exchange risk arises when future commercial transactions or recognized
assets and liabilities are denominated in a currency that is not the respective functional currency of the
Group’s subsidiaries.
The following table demonstrates the sensitivity to a reasonably possible change in foreign
exchange risk, with all other variables held constant, of the Group’s profit after tax (through the impact
on floating rate borrowings) and the Group’s equity.
Increase/
(decrease)
in basis
point
Increase/
(decrease)
in profit
after tax
Increase/
(decrease)
in equity
% RMB’000 RMB’000
31 December 2023
If the RMB weakens against the USD .................................. 5.00% 14,135 14,135
If the RMB strengthens against the USD ............................... - 5.00% (14,135) (14,135)
If the RMB weakens against the HKD ................................. 5.00% 45 45
If the RMB strengthens against the HKD ............................... - 5.00% (45) (45)
If the RMB weakens against the EUR .................................. 5.00% 2 2
If the RMB strengthens against the EUR ............................... - 5 . 0 0 % ( 2 ) ( 2 )
31 December 2024
If the RMB weakens against the USD .................................. 5.00% 18,848 18,848
If the RMB strengthens against the USD ............................... - 5.00% (18,848) (18,848)
If the RMB weakens against the HKD ................................. 5.00% 39 39
If the RMB strengthens against the HKD ............................... - 5.00% (39) (39)
If the RMB weakens against the EUR .................................. 5.00% (93) (93)
If the RMB strengthens against the EUR ............................... - 5.00% 93 93
If the RMB weakens against the JPY .................................. 5.00% 45 45
If the RMB strengthens against the JPY ................................ - 5.00% (45) (45)
31 December 2025
If the RMB weakens against the USD ................................. 5.00% 35,451 35,451
If the RMB strengthens against the USD ............................... - 5.00% (35,451) (35,451)
If the RMB weakens against the HKD ................................. 5.00% 1,280 1,280
If the RMB strengthens against the HKD ............................... - 5.00% (1.280) (1,280)
If the RMB weakens against the EUR ................................. 5.00% (114) (114)
If the RMB strengthens against the EUR ............................... - 5.00% 114 114
If the RMB weakens against the JPY .................................. 5.00% 78 78
If the RMB strengthens against the JPY ................................ - 5.00% (78) (78)
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—continued
Credit risk
The carrying amounts of cash and cash equivalents, time deposits, trade and bills receivables,
and other financial assets at amortized cost included in the consolidated statements of financial
position represent the Group’s maximum exposure to credit risk in relation to its financial assets. The
Group does not provide any guarantees which would expose the Group to credit risk.
Cash and cash equivalents, time deposits and restricted cash are primarily held with state-
owned or listed banks and subject to the impairment requirements of IFRS 9, and the identified
impairment loss was immaterial as at 31 December 2023, 2024 and 2025.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses
(“ECLs”), which uses a lifetime expected loss allowance for all trade and bills receivables. To measure
the ECLs, trade and bills receivables have been grouped based on shared credit risk characteristics and
aging. The Group has therefore concluded that the expected loss rates for trade and bills receivables are
a reasonable approximation of the loss rates for the contract assets. The Group also made individual
assessment on the recoverability of its trade and bills receivables for certain customers based on
historical settlement records.
Maximum exposure and year-end staging
The tables below show the credit quality and maximum exposure to credit risk based on
Group’s credit policy, which is mainly based on past due information unless other information is
available without undue cost or effort, and year-end staging classification as at the end of each of the
Relevant Periods.
The amounts presented are gross carrying amounts for financial assets.
As at 31 December 2023
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents ....................... 1,303,007 — — — 1,303,007
Time deposits ................................. 10,182 — — — 10,182
Restricted cash ................................ 22,289 — — — 22,289
Trade and bills receivables at amortised cost* ........ — — — 169,576 169,576
Financial assets included in prepayments, other
receivables and other assets
-Normal** ................................ 12,219 — — — 12,219
-Doubtful** .............................. — — — — —
Total ........................................ 1,347,697 — — 169,576 1,517,273
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APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—continued
As at 31 December 2024
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents ....................... 813,194 — — — 813,194
Time deposits ................................. 379,427 — — — 379,427
Restricted cash ................................ 1,755 — — — 1,755
Trade and bills receivables at amortised cost* ........ — — — 237,093 237,093
Financial assets included in prepayments, other
receivables and other assets
-Normal** ................................ 11,348 — — — 11,348
-Doubtful** .............................. — — — — —
Total ........................................ 1,205,724 — — 237,093 1,442,817
As at 31 December 2025
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents ....................... 1,181,028 — — — 1,181,028
Time deposits ................................. 453,564 {{ { 453,564
Restricted cash ................................ 44,540 {{ { 44,540
Trade and bills receivables at amortised cost* ........ — {{ 373,407 373,407
Trade and bills receivables at fair value through other
comprehensive income ........................ {{ { 260 260
Financial assets included in prepayments, other
receivables and other assets
-Normal** .................................... 15,427 {{ { 15,427
-Doubtful** .................................. { — {{ —
Total ........................................ 1,694,559 — { 373,667 2,068,226
* For trade and bills receivables to which the Group applies the simplified approach for impairment, information based on the provision
matrix is disclosed in note 24 to the Historical Financial Information.
** The credit quality of financial assets included in prepayments, other receivables and other assets, financial assets included in other
non-current assets is considered to be “normal” when they are not past due and there is no information indicating that the financial assets
had a significant increase in credit risk since initial recognition. Otherwise, the credit quality of the financial assets is considered to be
“doubtful”.
Further quantitative data in respect of the Group’s exposure to credit risk arising from trade and
bills receivables are disclosed in note 24 to the financial statements.
The Group had certain concentrations of credit risk as 22.65% and 67.31%, 12.90% and
44.27%, 7.17% and 30.68% of the Group’s trade receivables were due from the Group’s largest
customer and five largest for customers, during the years ended 31 December 2023, 2024 and 2025,
respectively.
I-101


--- page 393 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—continued
Liquidity risk
The Group’s approach to managing liquidity risk is to ensure sufficient capital liquidity to meet
its due debts without incurring unacceptable losses or causing damage to the Group’s reputation. The
Group regularly analyzes its liability structure and maturity dates to ensure the maintenance of ample
liquidity. The Group’s management monitors the utilization of bank borrowings and ensures
compliance with borrowing agreements. At the same time, it maintains close cooperation with financial
institutions to maintain sufficient credit lines and effectively prevent and to control liquidity risks.
The maturity profile of the Group’s financial liabilities as at the end of each of the Relevant
Periods, based on the contractual undiscounted payments, is as follows:
As at 31 December 2023
On demand for
less than
one year
One to
five years Total
RMB’000 RMB’000 RMB’000
Trade payables ................................................. 264,141 { 264,141
Financial liabilities included in other payable and accruals .............. 12,782 { 12,782
Lease liabilities ................................................ 19,415 28,465 47,880
Other non-current liabilities ...................................... { 50,000 50,000
Total ......................................................... 296,338 78,465 374,803
As at 31 December 2024
On demand for
less than
one year
One to
five years Total
RMB’000 RMB’000 RMB’000
Trade payables ................................................. 316,000 { 316,000
Interest-bearing bank borrowings .................................. 38,200 35,161 73,361
Financial liabilities included in other payable and accruals .............. 69,067 { 69,067
Lease liabilities ................................................ 20,599 14,890 35,489
Other non-current liabilities ...................................... { 50,000 50,000
Total ......................................................... 443,866 100,051 543,917
As at 31 December 2025
On demand for
less than one
year
One to
five years Total
RMB’000 RMB’000 RMB’000
Trade payables ............................................... 400,910 { 400,910
Interest-bearing bank borrowings ................................. 337,319 67,847 405,166
Financial liabilities included in other payable and accruals ............. 51,088 { 51,088
Lease liabilities ............................................... 13,272 8,035 21,307
Other non-current liabilities ..................................... — 203,621 203,621
Total ....................................................... 802,589 279,503 1,082,092
I-102


--- page 394 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—continued
Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability
to continue as a going concern and to maintain healthy capital ratios in order to support its business
and maximize shareholders’ value.
The Group manages its capital structure and makes adjustments to it in light of changes in
economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the
capital structure, the Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. The Group is not subject to any externally imposed capital
requirements. No change was made in the objectives, policies or processes for managing capital during
the Relevant Periods.
The Group monitors capital using debt-to-asset ratio, which is total liabilities divided by total
assets. The ratios as at 31 December 2023 and 2024 and 2025 were as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Total assets ................................................... 4,706,852 5,771,119 6,954,150
Total liabilities ................................................ 863,028 1,171,859 1,627,044
Debt-to-asset ratio .............................................. 1 8 % 2 0 % 2 3 %
44. CONTINGENCIES
Guarantee
As at 31 December 2023 and 2024 and 2025 no guarantee was provided by the Group to third
parties.
As at 31 December 2025, the Company was involved as defendant in one outstanding
contractual dispute litigation, with a claimed amount of RMB44,000,000, along with overdue payment
interest and other expenses. A court hearing was held on 5 February 2026. As at the date of approval of
this report, the court had not yet rendered its first-instance judgment. The Company represented that
the likelihood of an outflow of economic benefits arising from this matter is remote.
45. INVESTMENTS IN SUBSIDIARIES AND BALANCES WITH SUBSIDIARIES
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Investments, at cost ................................................. 422,989 513,940 947,203
I-103


--- page 395 ---
APPENDIX I ACCOUNTANTS’ REPORT
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION—continued
45. INVESTMENTS IN SUBSIDIARIES AND BALANCES WITH
SUBSIDIARIES—continued
Particulars of the Company’s principal subsidiaries, which are directly owned by the Company,
are included in note 1 to the Historical Financial Information.
The Company’s due from subsidiaries mainly comprise dividends receivables, trade and bills
receivables and loan receivables. The Company’s due to subsidiaries mainly comprise trade payables.
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Due from subsidiaries ............................................... 213,855 267,157 192,823
Due to subsidiaries ................................................. 11,818 91,149 283,371
46. SUBSEQUENT FINANCIAL STATEMENT
No audited financial statements have been prepared by the Company, the Group or any of the
companies comprising the Group in respect of any period subsequent to 31 December 2025.
47. EVENTS AFTER THE RELEVANT PERIODS
The cash dividend distribution plan of RMB124,101,000 (tax inclusive) in respect of the year
ended 31 December 2025 has been approved by the Annual General Meeting on 20 April 2026, and
has not been fully paid.
Save as disclosed in note 34 to the Historical Financial Information and the dividend
distribution mentioned above, there were no other significant events that may affect the Group
subsequent to 31 December 2025.
I-104


--- page 396 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
The following is the text of a report set out on page IA-1 received from the Company’s reporting
accountants, Ernst & Young, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this
document. The information set out below is the unaudited interim financial information of the Group for the three
months ended 31 March 2026, and does not form part of the Accountants’ Report from the Company’s reporting
accountants, Ernst & Young, Certified Public Accountants, Hong Kong, as set out in Appendix I, and is included
herein for information purpose only.
Ernst & Young Group Limited
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
979
27
Tel : +852 2846 9888
Fax : +852 2868 4432
ey.com
REVIEW REPORT ON UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
INFORMATION TO THE DIRECTORS OF SG MICRO CORP
Introduction
We have reviewed the interim financial information set out on page IA-3 to IA-45, which
comprises the condensed consolidated statement of financial position of SG Micro Corp (the
“Company”) and its subsidiaries (the “ Group”) as at 31 March 2026 and the related condensed
consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for
the three-month period ended 31 March 2026, and explanatory notes. The directors of the Company are
responsible for the preparation and presentation of this interim financial information in accordance
International Accounting Standard 34 Interim Financial Reporting (“IAS 34 ”) as issued by the
International Accounting Standards Board. Our responsibility is to express a conclusion on this interim
financial information based on our review. Our report is made solely to you, as a body, in accordance
with our agreed terms of engagement, and for no other purpose. We do not assume responsibility
towards or accept liability to any other person for the contents of this report.
Scope of 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
(“HKSRE 2410”) as issued by the Hong Kong Institute of Certified Public Accountants. A review of
interim financial information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Hong Kong Standards on
Auditing and consequently does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the
interim financial information is not prepared, in all material respects, in accordance with IAS 34.
IA-1


--- page 397 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
Other Matter
We draw attention to the fact that the condensed consolidated statements of profit or loss,
comprehensive income, changes in equity and cash flows for the three-month period ended 31 March
2025 and the related explanatory notes disclosed in the interim financial information have not been
reviewed in accordance with HKSRE 2410.
Ernst & Young
Certified Public Accountants
Hong Kong
17 June 2026
IA-2


--- page 398 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Three months ended
31 March
Notes 2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Revenue .......................................................... 3 1,098,131 789,561
Cost of sales ....................................................... (600,329) (439,766)
Gross profit ....................................................... 497,802 349,795
Other income and gains .............................................. 4 37,005 53,840
Selling and marketing expenses ........................................ (74,746) (62,452)
Administrative expenses ............................................. (30,502) (28,797)
Research and development expenses .................................... (293,594) (245,723)
Reversal of impairment losses on financial assets and contract assets, net ....... 5 8 1 4 2,022
Other expenses ..................................................... (12,698) —
Finance costs ...................................................... 6 (4,026) (899)
Share of profits of associates .......................................... 4,391 701
PROFIT BEFORE TAX ............................................ 5 124,446 68,487
Income tax expense ................................................. 7 (1,678) (9,829)
PROFIT FOR THE PERIOD .......................................... 122,768 58,658
Attributable to:
Owners of the parent ............................................ 123,693 59,767
Non-controlling interests ......................................... (925) (1,109)
EARNINGS PER SHARE FOR PROFIT ATTRIBUTABLE TO OWNERS
OF THE PARENT:
Basic ......................................................... 9 0.20 0.10
Diluted ....................................................... 9 0.20 0.10
IA-3


--- page 399 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Three months ended
31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS ................ 122,768 58,658
Other comprehensive income that may be reclassified to profit or loss in subsequent
periods:
Exchange differences on translation of foreign operations ..................... (6,797) (357)
Others .............................................................. (63) (21)
Other comprehensive loss for the period, net of tax .............................. (6,860) (378)
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ...................... 115,908 58,280
Attributable to:
Owners of the parent .................................................. 116,833 59,389
Non-controlling interests ............................................... (925) (1,109)
IA-4


--- page 400 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March As at 31 December
Notes 2026 2025
RMB’000 RMB’000
(Unaudited)
NON-CURRENT ASSETS
Property, plant and equipment ................................. 1 0 754,541 711,825
Other intangible assets ....................................... 1 2 78,367 85,978
Right-of-use assets .......................................... 1 1 34,672 38,837
Goodwill .................................................. 1 3 301,277 301,277
Deferred tax assets .......................................... 1 4 155,129 151,264
Investments in associates ..................................... 1 5 561,204 555,364
Time deposits .............................................. 2 1 373,739 371,754
Financial assets at fair value through profit or loss, non current ....... 1 6 121,463 115,991
Other non-current assets ...................................... 1 7 29,154 23,371
Total non-current assets ..................................... 2,409,546 2,355,661
CURRENT ASSETS
Inventories ................................................ 1 8 1,592,087 1,448,216
Trade and bills receivables at amortized cost ...................... 1 9 325,277 362,830
Trade and bills receivables at fair value through other comprehensive
income .................................................. 6 9 5 2 6 0
Contract assets ............................................. 1,994 2,084
Prepayments, other receivables and other assets ................... 2 0 122,430 137,634
Financial assets at fair value through profit or loss ................. 1 6 1,479,318 1,340,087
Cash and cash equivalents .................................... 2 1 1,183,697 1,181,028
Time deposits .............................................. 2 1 27,159 81,810
Restricted cash ............................................. 2 1 44,820 44,540
Total current assets ......................................... 4,777,477 4,598,489
CURRENT LIABILITIES
Trade payables ............................................. 2 2 416,482 400,910
Other payables and accruals ................................... 2 3 363,884 470,629
Interest-bearing bank borrowings ............................... 2 4 502,404 329,729
Lease liabilities ............................................. 1 1 9,780 12,752
Contract liabilities ........................................... 2 5 26,430 18,389
Total current liabilities ...................................... 1,318,980 1,232,409
NET CURRENT ASSETS ................................... 3,458,497 3,366,080
TOTAL ASSETS LESS CURRENT LIABILITIES .............. 5,868,043 5,721,741
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings ............................... 2 4 34,920 67,172
Lease liabilities ............................................. 1 1 6,764 7,767
Deferred tax liabilities ....................................... 1 4 60,342 54,799
Other payables and accruals ................................... 2 3 12,142 8,703
Deferred income ............................................ 2 6 63,234 68,195
Other non-current liabilities ................................... 2 7 189,307 187,999
Total non-current liabilities .................................. 366,709 394,635
NET ASSETS ............................................. 5,501,334 5,327,106
IA-5


--- page 401 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION—continued
As at 31 March As at 31 December
Notes 2026 2025
RMB’000 RMB’000
(Unaudited)
EQUITY
Equity attributable to owners of the parent
Share capital ............................................... 2 8 620,361 620,063
Reserves .................................................. 3 0 4,848,181 4,674,322
5,468,542 5,294,385
Non-controlling interests .................................... 32,792 32,721
Total equity ............................................... 5,501,334 5,327,106
IA-6


--- page 402 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the parent
Notes
Share
capital
Capital
reserves*
Share-
based
payment
reserve*
Reserve
funds*
Exchange
fluctuation
reserve*
Other
reserves*
Retained
profits* Total
Non-controlling
interests
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2026 ............ 620,063 803,880 544,340 291,431 20,147 138,878 2,875,646 5,294,385 32,721 5,327,106
Profit for the period (unaudited) ........ ———— —— 123,693 123,693 (925) 122,768
Other comprehensive income for the
period:
Share of OCI of associates
(unaudited) .................. ———— — (63) — (63) — (63)
Exchange differences on translation
of the financial statements
(unaudited) .................. ———— (6,797) — — (6,797) — (6,797)
Total comprehensive income for the
period (unaudited) ................ ———— (6,797) (63) 123,693 116,833 (925) 115,908
Equity-settled share-based payment
schemes (unaudited) ............... 2 9 8 20,539 (5,767) — — — — 15,070 — 15,070
Share-based payment compensation
(unaudited) ...................... 2 9 — — 40,742 — — — — 40,742 996 41,738
Share of capital reserve of associates
(unaudited) ...................... ———— — 1,512 — 1,512 — 1,512
Balance at 31 March 2026 (unaudited) . . 620,361 824,419 579,315 291,431 13,350 140,327 2,999,339 5,468,542 32,792 5,501,334
IA-7


--- page 403 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY—continued
Attributable to owners of the parent
Notes
Share
capital
Capital
reserves
Share-
based
payment
reserve
Reserve
funds
Exchange
fluctuation
reserve
Other
reserves
Retained
profits Total
Non-controlling
interests
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2025 ............ 473,450 824,106 467,412 236,725 29,788 99,392 2,478,354 4,609,227 (9,967) 4,599,260
Profit for the period (unaudited) ....... — — — — — — 59,767 59,767 (1,109) 58,658
Other comprehensive income for the
period:
Share of OCI of associates
(unaudited) .................. — — — — — (21) — (21) — (21)
Exchange differences on translation
of the financial statements
(unaudited) .................. — — — — (357) — — (357) — (357)
Total comprehensive income for the
period (unaudited) ................ — — — — (357) (21) 59,767 59,389 (1,109) 58,280
Equity-settled share-based payment
schemes (unaudited) .............. 2 2 5 15,187 (1,314) — — — — 14,098 — 14,098
Share-based payment compensation
(unaudited) ...................... 2 9 — — 10,007 — — — — 10,007 752 10,759
Effect on non-controlling interests of the
acquisition of a subsidiary
(unaudited) ...................... — — — — — — — — 4,649 4,649
To acquire non-controlling interests
obligations arising from acquisitions
of a subsidiary (unaudited) ......... — (129,851) — — — — — (129,851) — (129,851)
Share of capital reserve of associates
(unaudited) ...................... — — — — — 2,909 — 2,909 — 2,909
Balance at 31 March 2025
(unaudited) ...................... 473,675 709,442 476,105 236,725 29,431 102,280 2,538,121 4,565,779 (5,675) 4,560,104
* These reserve accounts comprise the consolidated reserves of RMB4,848,181,000 in the condensed consolidated statement of financial position as a t 31 March 2026..
IA-8


--- page 404 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Notes Three months ended 31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax ................................................. 124,446 68,487
Adjustments for:
Finance costs ............................................... 6 4,026 899
Listing expense ............................................. — —
Foreign exchange differences, net ............................... 4 ,5 12,116 (481)
Share of profits of associates ................................... (4,391) (701)
Gains on disposal of items of property, plant and equipment and
right-of-use assets, net ...................................... 4 ,5 (94) (903)
Depreciation of property, plant and equipment ..................... 5 40,246 37,446
Depreciation of right-of-use assets .............................. 5 5,486 5,785
Amortization of intangible assets ............................... 5 7,217 5,344
Amortization of deferred income ............................... (7,211) (2,201)
Impairment of contract assets .................................. 5 6 —
Impairment losses on financial assets, net ......................... (820) (2,022)
Fair value gains, net:
Equity investments at fair value through profit or loss ........... 4 , 5 (5,658) (19,156)
Wealth management products .............................. 4 , 5 (6,617) (2,725)
Interest income ............................................. 4 (8,380) (6,004)
Gains on disposal of investments at fair value through profit or loss .... 4 , 5 (1,260) (4,343)
Share-based payment expenses ................................. 5,29 41,738 10,759
(Increase)/decrease in inventories ................................... (143,871) 649
Decrease in trade and bills receivables at amortized cost ................. 38,498 93,498
Increase in trade and bills receivables at fair value through other
comprehensive income ......................................... (435) —
Decrease in contract assets ........................................ 8 4 —
Decrease/(increase) in prepayments, other receivables and other assets ..... 12,445 (40,052)
Increase in trade payables ......................................... 22,681 25,203
Increase/(decrease) in contract liabilities ............................. 8,041 (2,732)
Decrease in other payables and accruals .............................. (98,522) (79,089)
Increase in restricted cash ......................................... (280) (61)
Cash generated from operations .................................... 39,491 87,600
Interest received ................................................. 5,950 3,607
Net cash flows from operating activities .............................. 45,441 91,207
IA-9


--- page 405 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS—continued
Notes Three months ended 31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of wealth management products .................. 1,340,000 898,000
Proceeds from disposal of time deposits upon maturity ................... 50,000 —
Proceeds of the income from time deposits ............................ 5,096 —
Purchases of items of property, plant and equipment ..................... (96,542) (68,448)
Additions to other intangible assets .................................. (160) (1,928)
Dividend from equity investments at fair value through profit or loss ........ — 3 1 1
Dividend from associates .......................................... — 1,847
Proceeds of the income from wealth management products ................ 4,646 4,343
Purchases of wealth management products ............................. (1,476,000) (750,000)
Proceeds from disposal of equity investments at fair value through profit or
loss .......................................................... — 5 9 5
Purchase of subsidiaries ........................................... — (123,969)
Withdrawal of intentional deposit of the purchase of an investment ......... 5,000 —
Receipt of government grants for property, plant and equipment ........... 2,250 500
Net cash flows used in investing activities ............................. (165,710) (38,749)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares ....................................... 15,070 14,098
New bank loans .................................................. 155,256 21,396
Interest paid ..................................................... (2,340) (520)
Payment of lease payments ......................................... (5,633) (5,425)
Payment of bank and other borrowings ............................... (14,966) —
Payment of listing expense ......................................... (2,003) —
Acquisition of non-controlling interests ............................... (3,703) —
Net cash flows from financing activities ............................... 141,681 29,549
NET INCREASE IN CASH AND CASH EQUIVALENTS ............. 21,412 82,007
Cash and cash equivalents at beginning of period ....................... 1,181,028 813,194
Effect of foreign exchange rate changes, net ........................... (18,743) 402
CASH AND CASH EQUIVALENTS AT END OF PERIOD .............. 1,183,697 895,603
ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS
Cash and bank balances ............................................ 1,228,517 897,419
Restricted cash .................................................. (44,820) (1,816)
Cash and cash equivalents as stated in the consolidated statement of financial
position ...................................................... 1,183,697 895,603
Cash and cash equivalents as stated in the consolidated statement of cash
flows ........................................................ 1,183,697 895,603
IA-10


--- page 406 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
1. CORPORATE INFORMATION AND BASIS OF PREPARATION
SG Micro Corp (hereinafter referred to as “the Company”) is a limited company registered in
Beijing, Chinese Mainland on 26 January 2007. The registered address of the Company is Room
4-1106, 11th Floor, No. 87, Xisanhuan North Road, Haidian District, Beijing, the People’s Republic of
China (the “PRC”). On 6 June 2017, the Company’s A shares were listed on the Shenzhen Stock
Exchange.
During the reporting period, the Company and its subsidiaries (hereinafter collectively referred
to as “the Group” ) are principally engaged in designing, developing and selling analog ICs and sensors
that sense, amplify, convert and power
dforming the fundamental building blocks of all electronic
systems. These products are widely applied in Industrial & Energy, Automotive, Networking &
Computing and Consumer Electronics.
As of 31 March 2026, there have been no material changes to the Company’s principal
subsidiaries since 31 December 2025.
The interim condensed consolidated financial information for the three months ended 31 March
2026 has been prepared in accordance with IAS 34 Interim Financial Reporting.
The condensed consolidated interim financial information has been prepared in accordance
with the same basis of preparation and accounting policies adopted in the historical financial
information for the years ended 31 December 2023, 2024 and 2025 (the “Historical Financial
Information”) as disclosed in Appendix I to the document dated 17 June 2026 (the “Document”) issued
by the Company. The condensed consolidated interim financial statements and notes thereon do not
include all of the information required for a full set of financial statements prepared in accordance with
IFRS Accounting Standards.
2. OPERATING SEGMENT INFORMATION
(a) Description of segments and principal activities
Management monitors the operating results of the Group as a whole for the purpose of making
decision on resources allocation and preformation assessment. On this basis, the Group has determined
that it only has one operating segment which is the sales of ICs products.
(b) Segment information
There was no single customer from which the revenue amounted to 10% or more of the
Group’s revenue for the reporting period. The Group’s non-current assets excluding financial
instruments and deferred taxes were primarily located in Chinese Mainland as at the end of the
reporting period.
IA-11


--- page 407 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
3. REVENUE
An analysis of revenue is as follows:
Three months ended 31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Revenue from contracts with customers:
Disaggregated by major products or service lines
- Power Management ICs ........................................... 662,115 466,578
- Signal Chain ICs ................................................. 423,691 316,547
- Others ......................................................... 12,325 6,436
Total revenue ......................................................... 1,098,131 789,561
Revenue from contracts with customers
(a) Disaggregated revenue information
Three months ended 31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Geographical information
Hong Kong .......................................................... 514,712 406,418
Chinese Mainland ..................................................... 515,603 307,422
Taiwan .............................................................. 35,168 31,670
Others ............................................................... 32,648 44,051
Total revenue ......................................................... 1,098,131 789,561
Timing of revenue recognition
Goods and services transferred at a point in time ............................. 1,098,131 789,561
Total revenue ......................................................... 1,098,131 789,561
The following table shows the amounts of revenue recognized during the reporting period that
were included in the contract liabilities at the beginning of each of the respective period:
Three months ended 31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Revenue recognized that was included in contract liabilities at the beginning of the
period:
Sale of products ....................................................... 12,840 13,224
Rendering of services .................................................. — 3,396
Total ............................................................... 12,840 16,620
IA-12


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
3. REVENUE—continued
(b) Performance obligations
Information about the Group’s performance obligations is summarized below:
Sale of products
The performance obligation is satisfied when the products are delivered or accepted by the
customer, and payment is generally due within certain days upon delivery or after acceptance, except
for new customers, where payment in advance is normally required.
Rendering of services
The performance obligation is satisfied upon completion and acceptance of the services and
payment is generally due upon completion of the services.
For the above contracts with customers, they are rendered in a short period of time, which is
generally less than one year.
4. OTHER INCOME AND GAINS
Three months ended 31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Other income
Government grants* ................................................... 14,899 20,192
Bank interest income ................................................... 8,380 6,004
Subtotal ............................................................. 23,279 26,196
Gains
Foreign exchange income, net ............................................ — 4 8 1
Gains on disposal of investments at fair value through profit or loss:
Wealth management products ........................................ 1,260 4,343
Gains on disposal of items of property, plant and equipment and right-of-use
assets ............................................................. 9 4 9 0 3
Fair value gains on:
Wealth management products ........................................ 6,617 2,725
Equity investments at fair value through profit or loss ..................... 5,658 19,156
Others .............................................................. 9 7 3 6
Subtotal ............................................................. 13,726 27,644
Total other income and gains ............................................ 37,005 53,840
* The government grants were mainly incentives provided by local government authorities in Chinese Mainland, including various forms
of government financial incentives and preferential tax treatments. There were no unfulfilled conditions or contingencies relating to these
government grants. IA-13


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
5. PROFIT BEFORE TAX
The Group’s profit before tax is arrived at after charging/(crediting):
Three months ended
31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Cost of raw materials consumed ............................................. 247,799 204,354
Cost of packaging testing ................................................... 251,978 175,098
Research and development expenses .......................................... 293,594 245,723
Equity-settled share-based payment expense* ................................... 41,738 10,759
Depreciation of property, plant and equipment* ................................. 40,246 37,446
Depreciation of right-of-use assets* .......................................... 5,486 5,785
Amortization of intangible assets* ............................................ 7,217 5,344
Lease payments not included in the measurement of lease liabilities* ................ 7 2 3 7 6 3
Staff costs (excluding directors’ remuneration)*:
Salaries, wages and bonus .............................................. 237,890 219,157
Pension scheme contributions** ......................................... 19,476 16,883
Total ................................................................... 257,366 236,040
Impairment of financial assets and contract assets, net: ...........................
Impairment/ (reversal of impairment losses) of other receivables, net 134 (284)
Reversal of impairment losses of trade and bills receivables, net ................ (954) (1,738)
Impairment of contract assets, net ........................................ 6 —
Impairment of Inventories .................................................. 66,197 33,298
Gains on disposal of items of property, plant and equipment, intangible assets and
right-of-use assets, net ................................................... (94) (903)
Gains on disposal of investments at fair value through profit or loss ................. (1,260) (4,343)
Foreign exchange loss/(income), net .......................................... 12,116 (481)
Fair value gains, net j ....................................................
Wealth management products ........................................... (6,617) (2,725)
Equity investments at fair value through profit or loss ........................ (5,658) (19,156)
* The amounts of these accounts are partially included in the cost of packaging testing and research and development expenses.
** There are no forfeited contributions that may be used by the Group as the employer to reduce the existing level of contributions.
6. FINANCE COSTS
An analysis of finance costs is as follows:
Three months ended
31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Amortization of interest expense on redemption financial liabilities ................. 1,308 —
Interest on borrowings ..................................................... 2,473 535
Interest on lease liabilities .................................................. 2 4 5 3 6 4
Total ................................................................... 4,026 899
IA-14


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
7. INCOME TAX
Income tax expense is recognized based on management’s best knowledge of the income tax
rates expected for the reporting period.
(i) PRC corporate income tax
The income tax provision of the Group in respect of its operations in Chinese Mainland was
calculated at tax rate of 25% on the assessable profits for the periods presented, based on the existing
legislation, interpretation and practices in respect thereof.
Pursuant to the Notice of the Ministry of Industry and Information Technology, the Ministry of
Finance, the State Taxation Administration and National Development Reform Commission on
Relevant Issues Concerning the Preferential Policies on Enterprise Income Tax to promote high quality
development of integrated circuit industry and software industry in December 2020, the Company was
entitled to apply a reduced tax rate of 10% after passing the qualification verification of Key Integrated
Circuit Design Enterprise by relevant authorities during the reporting period.
Certain subsidiaries of the Company in Chinese Mainland were approved as High-tech
enterprises, and they were subject to a preferential corporate income tax rate of 15% for the reporting
period.
(ii) Hong Kong profits tax
The first HKD2,000,000 of assessable profits of Hong Kong subsidiaries are taxed at 8.25%
and the remaining assessable profits are taxed at 16.5% on the estimated assessable profits.
SG MICRO (HK) LIMITED was entitled to enjoy offshore tax exemption from the Hong Kong Inland
Revenue Department due to its offshore transaction nature for the reporting period.
(iii) Corporate income tax in other jurisdictions
The income tax rates of the subsidiaries in Japan and Germany are 22.39% and 27.9%,
respectively.
The major components of income tax expense of the Group are as follows:
Three months ended
31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Current tax .............................................................. — —
Deferred tax (note 14) ..................................................... 1,678 9,829
Total tax charge for the period ............................................... 1,678 9,829
IA-15


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
8. DIVIDENDS
There was no record of cash dividend distribution for the three months ended 31 March 2026.
The final cash dividend distribution of RMB124,101,000 (tax inclusive) in respect of the year
ended 31 December 2025 has been approved by the Annual General Meeting on 20 April 2026.
9. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF
THE PARENT
The calculation of the basic earnings per share amounts is based on the profit for the periods
attributable to ordinary equity holders of the parent, and the weighted average numbers of ordinary
shares outstanding during the reporting period.
The share option and restricted stock granted by the Company have potential dilutive effect on
the earnings per share. The calculation of the diluted earnings per share amounts is based on the profit
for the period attributable to ordinary equity holders of the parent. The weighted average number of
ordinary shares used in the calculation is the number of ordinary shares in outstanding during the
period, as used in the basic earnings per share calculation, and the weighted average number of
ordinary shares assumed to have been issued at no consideration on the deemed exercise or conversion
of all dilutive potential ordinary shares into ordinary shares.
The calculations of basic and diluted earnings per share are based on:
Three months ended
31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Earnings
Profit attributable to ordinary equity holders of the parent ......................... 123,693 59,767
Shares
Weighted average number of ordinary shares outstanding during the period, used in
the basic earnings per share calculation .................................. 620,159 615,566
Effect of dilution - weighted average number of ordinary shares:
Share options ........................................................ 5,985 3,920
Total ................................................................... 626,144 619,486
IA-16


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
10. PROPERTY, PLANT AND EQUIPMENT
Buildings
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements
Office
furniture
Special
Tooling Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2026
Cost ............................. 340,282 1,419 513,188 41,781 11,979 352,853 1,261,502
Depreciation ....................... (22,373) (1,413) (296,369) (37,372) (7,415) (184,735) (549,677)
Impairment ........................ — — — — — — —
Net carrying amount as at 1 January
2026 ........................... 317,909 6 216,819 4,409 4,564 168,118 711,825
Cost changes (unaudited) ............. 56,984 22 34,843 4,144 23 (13,065) 82,951
Depreciation changes (unaudited) ...... (2,838) (5) (21,458) (1,235) (489) (14,210) (40,235)
At 31 March 2026
Cost (unaudited) ................... 397,266 1,441 548,031 45,925 12,002 339,788 1,344,453
Depreciation (unaudited) ............. (25,211) (1,418) (317,827) (38,607) (7,904) (198,945) (589,912)
Impairment (unaudited) .............. — — — — — — —
Net carrying amount as at 31 March
2026 (unaudited) ................. 372,055 23 230,204 7,318 4,098 140,843 754,541
11. LEASES
(a) Right-of-use assets
The carrying amounts of the Group’s right-of-use assets and the movements are as follows:
Land use
rights
Parking
space use
rights Buildings Total
RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2026 ....................................... 11,996 6,353 20,488 38,837
Additions (unaudited) ...................................... — — 2,888 2,888
Lease cancelation (unaudited) ................................ — — (1,561) (1,561)
Revision of lease payments (unaudited) ........................ — — ( 6 ) ( 6 )
Depreciation charge (unaudited) .............................. (65) (56) (5,365) (5,486)
As at 31 March 2026 (unaudited) ............................. 11,931 6,297 16,444 34,672
IA-17


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
11. LEASES—continued
(b) Lease liabilities
The carrying amounts of the Group’s leases liabilities and the movements are as follows:
As at 31 March
2026
RMB’000
Carrying amount at 1 January ...................................................... 20,519
New leases (unaudited) ........................................................... 2,888
Accretion of interest recognized during the period (unaudited) ............................ 2 4 5
Exchange realignment (unaudited) .................................................. ( 2 )
Revision of lease payments (unaudited) .............................................. ( 6 )
Lease cancelation (unaudited) ...................................................... (1,467)
Payments (unaudited) ............................................................. (5,633)
Carrying amount at 31 March(unaudited) ............................................. 16,544
Analyzed into:
Current portion(unaudited) ..................................................... 9,780
Non-current portion (unaudited) ................................................ 6,764
The maturity analysis of lease liabilities is disclosed in note 37 to the Interim Financial
Information.
(c) The amounts recognized in profit or loss in relation to leases are as follows:
Three months ended 31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Depreciation charge of right-of-use assets .................................. 5,486 5,785
Interest on lease liabilities ............................................... 2 4 5 3 6 4
Expense relating to short-term leases ...................................... 7 2 3 7 6 3
Lease cancelation ..................................................... 9 4 9 0 3
Total amount recognized in profit or loss ................................... 6,548 7,815
IA-18


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
12. OTHER INTANGIBLE ASSETS
Software
copyright
Certificate
of layout
rights for
integrated
circuits
Patented
technology
Non-patented
technology Software Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2026 .................... 8 9 8 1,483 34,024 17,170 118,364 171,939
Additions (unaudited) ................. — — — — 1 6 0 1 6 0
Disposal (unaudited) .................. (539) — — (64) — (603)
At 31 March 2026 (unaudited) .......... 3 5 9 1,483 34,024 17,106 118,524 171,496
Amortization:
At 1 January 2026 .................... 7 0 1 5 5 2,613 9,973 73,150 85,961
Provided during the period (unaudited) . . . 9 34 1,024 381 5,769 7,217
Disposal (unaudited) .................. (49) — — — — (49)
At 31 March 2026 (unaudited) .......... 3 0 1 8 9 3,637 10,354 78,919 93,129
Impairment:
At 1 January 2026 .................... — — — — — —
At 31 March 2026 (unaudited) .......... — — — — — —
Net carrying amount as at 31 March 2026
(unaudited) ....................... 3 2 9 1,294 30,387 6,752 39,605 78,367
Net carrying amount as at 1 January
2026 ............................. 8 2 8 1,328 31,411 7,197 45,214 85,978
13. GOODWILL
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
At beginning of period/year
Cost ............................................................ 303,460 80,875
Accumulated impairment ........................................... (2,183) (2,183)
Net carrying amount ............................................... 301,277 78,692
Cost at beginning of period/year, net of accumulated impairment ........... 301,277 78,692
Acquisition of subsidiaries .......................................... — 222,585
Cost and carrying amount at end of period/year ......................... 301,277 301,277
At end of period/year
Cost ............................................................ 303,460 303,460
Accumulated impairment ........................................... (2,183) (2,183)
Net carrying amount ............................................... 301,277 301,277
IA-19


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
13. GOODWILL—continued
Impairment testing of goodwill
Goodwill acquired through business combinations is allocated to the group of Cash-Generating
Units (“CGU” or “CGUs”) for impairment testing as below:
Š Suzhou Qingxinfang
Š Shanghai Fangtai
Š Dalian Alpha
Š Hangzhou Shenan
Š Shanghai Pingsheng
Š Changzhou Ganrui
Š TeraDevices Inc
The carrying amount of goodwill allocated to each of the cash-generating units is as follows:
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Suzhou Qingxinfang ............................................... 49,851 49,851
Shanghai Fangtai ................................................. 16,555 16,555
Dalian Alpha ..................................................... 7,929 7,929
Hangzhou Shenan ................................................. 4,357 4,357
Changzhou Ganrui ................................................ 151,360 151,360
TeraDevice Inc ................................................... 71,225 71,225
Total ........................................................... 301,277 301,277
As at 31 March 2026, the management assessed and concluded that there was no impairment
indicator was identified. Accordingly, no quantitative impairment test was performed as at 31 March
2026, as a result that no further loss was recognized.
Impairment reviews on the goodwill of the Group have been conducted by the management as
at 31 December 2025, according to IAS 36 “Impairment of assets”. For the purposes of impairment
review, the recoverable amounts of CGU or group of CGUs are determined based on value in use
(“VIU”) calculations by using the discounted cash flow method covering a 5-year period.
IA-20


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
14. DEFERRED TAX
The gross amounts of deferred tax assets and liabilities of the Group before offsetting are as
follows:
(a) Gross deferred tax assets
At
1 January
2026
Deferred tax
(charged)/credited
to the statement
of profit or loss
during the period
As at
31 March
2026
RMB’000 RMB’000 RMB’000
(Unaudited) (Unaudited)
Losses available for offsetting against future taxable profits ........ 67,947 (712) 67,235
Accruals and provision ..................................... 27,213 3,632 30,845
Impairment of assets ....................................... 28,595 2,265 30,860
Share-based payment ...................................... 24,180 1,218 25,398
Payroll payables .......................................... 9,745 1,387 11,132
Deferred income .......................................... 4,784 (655) 4,129
Depreciation and amortization ............................... 1,676 (626) 1,050
Lease liabilities ........................................... 6 2 3 (120) 503
Total ................................................... 164,763 6,389 171,152
(b) Gross deferred tax liabilities
At
1 January
2026
Deferred tax
charged/(credited)
to the statement
of profit or loss
during the period
As at
31 March
2026
RMB’000 RMB’000 RMB’000
(Unaudited) (Unaudited)
Withholding taxes ........................................... 53,181 5,616 58,797
Depreciation and amortization ................................. 12,214 1,520 13,734
Right-of-use assets .......................................... 5 6 1 (121) 440
Fair value adjustments arising from acquisition of subsidiaries ....... 1,618 (73) 1,545
Changes in fair value ........................................ 4 8 9 1,159 1,648
Others .................................................... 2 3 5 (34) 201
Total ..................................................... 68,298 8,067 76,365
(c) Offsetting
The net amounts of deferred tax assets and liabilities after offsetting are as follows:
As at 31 March As at 31 December
2026 2025
Offsetting
Net carrying
amount Offsetting
Net carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited) (Unaudited)
Deferred tax assets .................................... 16,023 155,129 13,499 151,264
Deferred tax liabilities ................................. 16,023 60,342 13,499 54,799
IA-21


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
14. DEFERRED TAX—continued
(d) Deferred tax assets not recognized
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Deductible temporary difference ..................................... 164,999 142,168
Tax losses ....................................................... 1,240,798 1,165,029
Total ........................................................... 1,405,797 1,307,197
The above tax losses are available in one to ten years for offsetting against future taxable profits
of the companies in which the losses arose. Deferred tax assets have not been recognized in respect of
the above items as it is not considered probable that taxable profits will be available against which the
above items can be utilized.
At 31 March 2026 and 31 December 2025, other than the amount recognized in the
consolidated financial statements, deferred tax has not been recognized for withholding taxes that
would be payable on the unremitted earnings that are subject to withholding taxes of the Group’s
subsidiaries established in Chinese Mainland. In the opinion of the directors, it is not probable that
these subsidiaries will distribute such earnings in the foreseeable future.
There are no income tax consequences attaching to the payment of dividends by the Company
to its shareholders.
15. INVESTMENTS IN ASSOCIATES
As at
31 March
As at
31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Share of net assets ....................................................... 414,198 408,358
Goodwill on acquisition ................................................... 147,006 147,006
Total .................................................................. 561,204 555,364
The following table illustrates the aggregate financial information of the Group’s associates that
are not individually material:
As at
31 March
As at
31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Share of the associates’ profit for the period/year ............................... 4,391 7,549
Aggregate carrying amount of the Group’s investments in the associates ............ 561,204 555,364
IA-22


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
16. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Non-current:
Listed equity investments, at fair value ............................ 8,290 11,424
Other unlisted investments, at fair value ........................... 113,173 104,567
Subtotal ......................................................... 121,463 115,991
Current:
Wealth management products ................................... 1,479,318 1,340,087
Total ........................................................... 1,600,781 1,456,078
The above equity investments in unlisted entities were classified as financial assets at fair value
through profit or loss as the Group has not designated it as financial assets at fair value through other
comprehensive income.
The above wealth management products were issued by banks in Chinese Mainland. They were
mandatorily classified as financial assets at fair value through profit or loss as their contractual cash
flows are not solely payments of principal and interest.
17. OTHER NON-CURRENT ASSETS
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Prepayments for packaging and testing ................................ 1,800 1,800
Prepayments for software ........................................... 3,894 4,160
Prepayments for property, plant and equipment ......................... 22,854 16,830
Others .......................................................... 6 0 6 5 8 1
Subtotal ......................................................... 29,154 23,371
Less: Impairment ................................................. — —
Total ........................................................... 29,154 23,371
18. INVENTORIES
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Raw materials .................................................... 969,547 836,639
Finished goods ................................................... 712,552 686,946
Work in progress ................................................. 246,169 234,568
Contract costs .................................................... 4 9 3 4 9 3
Less: Provision for impairment ...................................... (336,674) (310,430)
Total ........................................................... 1,592,087 1,448,216
IA-23


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
19. TRADE AND BILLS RECEIVABLES AT AMORTIZED COST
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Trade receivables ................................................. 334,230 372,289
Bills receivables .................................................. 6 5 4 1,118
Less: Impairment ................................................. (9,607) (10,577)
Total ........................................................... 325,277 362,830
The Group’s trading terms with its customers are mainly on credit, except for certain
customers, where payment in advance is normally required. The credit period is generally one month.
The Group seeks to maintain strict control over its outstanding receivables. Overdue balances are
reviewed regularly by management.
Significant concentrations of credit risk primarily arise when the Group has significant
exposure to individual customers. As at 31 March 2026 and 31 December 2025, 32.53% and 30.68% of
the total trade receivables, respectively, were due from the Group’s five largest customers.
Trade and bills receivables are non-interest-bearing.
An ageing analysis of the trade receivables as at the end of each of the reporting period, based
on the past due date and net of loss allowance, is as follows:
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Not due and within one year ......................................... 322,343 359,716
Over one year .................................................... 2,280 1,996
total ............................................................ 324,623 361,712
The movements in the loss allowance for impairment of trade receivables are as follows:
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
At the beginning of the period/year ................................... 10,577 4,329
(Reversal of impairment losses)/ impairment losses , net .................. (954) 2,173
Exchange realignment ............................................. (16) (37)
Acquisition of a subsidiary .......................................... — 4,112
At the end of the period/year ........................................ 9,607 10,577
IA-24


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
19. TRADE AND BILLS RECEIVABLES AT AMORTIZED COST—continued
The Group applies the simplified approach to providing for expected credit losses at the end of
the reporting period. In addition, the provision rates are based on aging for groupings of various
customer segments with similar loss patterns on a collective basis. The calculation reflects the
probability-weighted outcome, the time value of money and reasonable and supportable information
that is available at the reporting date about past events, current conditions and forecasts of future
economic conditions. Generally, trade and bills receivables are written off if a customer discontinues
operation with no reasonable expectation of recovering the contractual cash flows and are not subject
to enforcement activity.
Set out below is the information about the credit risk exposure on the Group’s trade receivables
using a provision matrix:
As at 31 March As at 31 December
2026 2025
Gross
carrying
amount
Expected
credit
losses
Gross
carrying
amount
Expected
credit
losses
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited) (Unaudited)
Individual evaluation of expected credit losses ................. 3,073 3,073 3,401 3,401
Assessment of expected credit losses by credit risk portfolio ...... 331,157 6,534 368,888 7,176
Total .................................................. 334,230 9,607 372,289 10,577
31 March 2026
Gross
carrying
amount
Expected
credit
losses
Expected
loss
rate
RMB’000 RMB’000
(Unaudited) (Unaudited) (Unaudited)
Individual evaluation of expected credit losses: ....................... 3,073 3,073 100.00%
Assessment of expected credit losses by credit risk portfolio:
Not due and within one year ....................................... 328,190 5,847 1.78%
From one year to two years ....................................... 1,343 125 9.31%
From two years to three years ..................................... 4 6 7 6 9 14.78%
From three years to four years ..................................... 5 4 7 1 7 2 31.44%
From four years to five years ...................................... 6 1 0 3 2 1 52.62%
Total ......................................................... 334,230 9,607 2.87%
IA-25


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
20. PREPAYMENTS, OTHER RECEIVABLES AND OTHER ASSETS
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Deductible input value-added tax (“VAT”) ............................. 40,087 36,131
Prepaid income tax ................................................ 11,872 29,885
Listing fees ...................................................... 22,741 20,371
Rights of return assets ............................................. 16,067 17,018
Prepayments for packaging and testing ................................ 10,050 10,050
Deposits ........................................................ 9,491 8,871
Prepayment for raw materials and products ............................. 3,755 5,280
Others .......................................................... 10,242 11,769
Less: Impairment allowance ......................................... (1,875) (1,741)
Total ........................................................... 122,430 137,634
21. CASH AND CASH EQUIVALENTS, TIME DEPOSITS AND RESTRICTED CASH
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Time deposits:
Current ......................................................... 27,159 81,810
Non-current ...................................................... 373,739 371,754
Current:
Cash and bank balances ............................................ 1,228,517 1,225,568
Less: Restricted cash .............................................. (44,820) (44,540)
Cash and cash equivalents .......................................... 1,183,697 1,181,028
As at 31 March 2026 and 31 December 2025, the restricted cash mainly consisted of property
preservation freeze.
22. TRADE PAYABLES
An aging analysis of the trade payables of the Group as at the end of each of the reporting
period, based on the invoice date, is as follows:
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Within 1 month ................................................... 310,095 308,775
1 to 2 months .................................................... 88,024 71,211
2 to 3 months .................................................... 18,203 20,869
Over 3 months ................................................... 1 6 0 5 5
Total ........................................................... 416,482 400,910
The trade payables are non-interest-bearing and are normally settled on 60-day terms.
IA-26


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
23. OTHER PAYABLES AND ACCRUALS
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Payroll and welfare payables ........................................ 251,082 348,522
Liabilities for expected sales return and warranty ........................ 71,030 65,867
Payables for technological development ............................... 3,936 7,516
Other tax payable ................................................. 11,223 13,856
Payables for additions of property, plant and equipment ................... 15,340 14,543
Others .......................................................... 23,415 29,028
Total ........................................................... 376,026 479,332
Analyzed into:
Non-current portion ........................................... 12,142 8,703
Current portion ............................................... 363,884 470,629
24. INTEREST-BEARING BANK BORROWINGS
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Current:
Bank loans - Unsecured ............................................ 452,476 300,928
Current portion of long-term bank loans - Secured ....................... 49,928 28,801
Total ........................................................... 502,404 329,729
Non-current:
Bank loans - Secured .............................................. 84,848 95,973
Less: Due within one year .......................................... (49,928) (28,801)
Total ........................................................... 34,920 67,172
(a) As at 31 March 2026, the annual interest rate of short-term borrowings was 2.11%.
(b) As at 31 March 2026, the annual interest rates of long-term borrowings was 2.65%.
(c) As at 31 March 2026, secured bank borrowings were guaranteed by the Company.
At 31 March 2026 and 31 December 2025, the Group’s bank loans were repayable as follows:
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Within 1 year .................................................... 502,404 329,729
1 to 2 years ...................................................... 34,920 67,172
Total ........................................................... 537,324 396,901
IA-27


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
25. CONTRACT LIABILITIES
An analysis of the contract liabilities arising from short-term advances received from customers
are as follows:
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Receipt in advance
-Sales of products ................................................. 21,240 13,167
-Rendering of services ............................................. 5,190 5,222
Total ........................................................... 26,430 18,389
26. DEFERRED INCOME
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
At beginning of period/year ......................................... 68,195 75,701
Additions during the period/year ..................................... 2,250 31,941
Released to profit or loss ........................................... (7,211) (39,447)
At end of period/year .............................................. 63,234 68,195
Deferred income is mainly government grants deferred. Government grants will be recognized
into profit or loss when conditions attached are fulfilled or on a straight-line basis over the expected
lives of the property, plant and equipment.
27. OTHER NON-CURRENT LIABILITIES
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Redemption financial liabilities ...................................... 44,388 43,916
Financial liabilities related to obligations to acquire non-controlling interests
arising from acquisitions of subsidiaries ............................. 144,919 144,083
Total ........................................................... 189,307 187,999
28. SHARE CAPITAL
Shares
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Issued and fully paid ordinary shares .................................. 620,361 620,063
IA-28


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
28. SHARE CAPITAL—continued
A summary of movements in the Company’s share capital is as follows:
Number of
shares in issue
Share
capital
RMB’000 RMB’000
At 1 January 2026 ........................................................ 620,063 620,063
Shares issued under share-based payment schemes (unaudited) .................... 2 9 8 2 9 8
At 31 March 2026 (unaudited) .............................................. 620,361 620,361
29. SHARE-BASED PAYMENT
(a) Share-based payment expenses during the reporting period are as follows:
Three months ended
31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Equity settled share-based payment ........................................... 41,738 10,759
(b) Share Option Incentive Plans
According to the Company’s performance evaluation and individual performance evaluation,
stock options granted to certain senior management personnel, key management personnel, and key
technical personnel in 2026 can be exercised in four installments, with the highest feasible percentage
for each exercise period being 22%, 24%, 26%, and 28%, respectively. The first tranche becomes
exercisable within 12 to 24 months after the grant date; the second tranche, 24 to 36 months after the
grant date; the third tranche, 36 to 48 months after the grant date; and the fourth tranche, within 48 to
60 months after the grant date.
(i) The number and weighted average exercise prices of share options are as follows:
Weighted average
exercise price Number of options
RMB ‘000
per share
At 1 January 2026 ............................................... 23,676
Granted during the period (unaudited) ............................... 58.00 6,552
Forfeited during the period (unaudited) .............................. 51.21 (312)
Exercised during the period (unaudited) .............................. 50.20 (295)
At 31 March 2026 ............................................... 29,621
At 1 January 2025 ............................................... 10,524
Exercised during the period (unaudited) .............................. 61.55 (220)
At 31 March 2025 ............................................... 10,304
IA-29


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
29. SHARE-BASED PAYMENT—continued
(ii) The exercise prices and exercise periods of the share options outstanding as at the end of the
reporting period are as follows:
31 March 2026
(Unaudited)
Number of options
‘000
Exercise price*
RMB per share Exercise period
1,336 78.29 2023-2027
6,150 50.54 2024-2028
2,191 44.46 2025-2029
337 73.69 2026-2030
13,055 55.69 2026-2030
6,552 58.00 2027-2031
29,621
31 March 2025
(Unaudited)
Number of options
‘000
Exercise price*
RMB per share Exercise period
325 55.14 2021-2025
1,329 101.98 2023-2027
6,585 65.90 2024-2028
2,065 58.00 2025-2029
10,304
* The exercise price of the share options is subject to adjustment in the case of rights or bonus issues, or other similar changes in the
Company’s share capital.
(iii) Fair value of share options and assumptions
The fair value at grant date is independently determined using an adjusted form of the Black
Scholes Model that takes into account the exercise price, the term of the option, the impact of dilution
(where material), the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield, the risk-free interest rate for the term of the option and the correlations and
volatilities of the peer group companies.
Key assumptions used in determining the fair value of share options granted are as follows:
As at 31 March
2026
(Unaudited)
Fair value at grant date (RMB per share) .......................................... 12.55-62.74
Dividend yield (%) ............................................................ 0.1192-0.2692
Expected volatility (%) ........................................................ 18.3348-40.0925
Risk-free interest rate (%) ...................................................... 1.2568-2.4156
Expected life of options (year) ................................................... 1-4.25
Weighted average share price (RMB per share) ..................................... 55.53
IA-30


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
29. SHARE-BASED PAYMENT—continued
(c) Class II Restricted Stock Incentive Plans
The Company operates 2021 Class II restricted stock incentive plan. According to the
Company’s performance appraisal and individual performance appraisal, the restricted stock granted to
certain senior management personnel, key management personnel and key technical personnel are
exercisable in four exercise periods commencing after 12 months from the grant date and ends on a
date which is not later than five years from the date of offer of the share options or the expiry date of
the Scheme, if earlier, with the maximum exercisable percentage for each period being 22%, 24%,
26% and 28%, respectively.
(i) The number and weighted average subscription prices of restricted stocks are as follows:
Weighted average
exercise price
Number of
restricted stocks
RMB ‘000
per share
At 1 January 2026 ................................................. — 7 6 7
Exercised during the period (unaudited) ............................... 78.29 (3)
At 31 March 2026 (unaudited) ....................................... 7 6 4
At 1 January 2025 ................................................. — 2,123
Exercised during the period (unaudited) ............................... 101.98 (6)
At 31 March 2025 (unaudited) ....................................... 2,117
(ii) The exercise prices and exercise periods of the restricted stocks outstanding as at the end of
the reporting period are as follows:
31 March 2026
(unaudited)
Number of options
‘000
Exercise price*
RMB per share Exercise period
764 78.29 2023-2027
764
31 March 2025
(unaudited)
Number of options
‘000
Exercise price*
RMB per share Exercise period
1,230 67.62 2022-2026
887 101.98 2023-2027
2,117
* The exercise price of the share options is subject to adjustment in the case of rights or bonus issues, or other similar changes in the
Company’s share capital.
IA-31


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
30. RESERVES
The amounts of the Group’s reserves and the movements therein for the current and prior
periods are presented in the consolidated statement of changes in equity on pages IA-6 to IA-7 of the
financial statements.
(a) Capital reserve
The capital reserve represents (i) the excess of capital contributions from the equity holders of
the Company over the share capital; (ii) the acquisition of minority interest of the Group’s subsidiaries
and the acquisition obligation of minority shareholders; (iii) the increase in capital reserve arising from
the exercise of share-based payment schemes. Details of the movement in capital reserve are set out in
the consolidated statements of changes in equity.
(b) Reserve funds
In accordance with the Company Law of the PRC, companies registered in Chinese Mainland
are required to allocate 10% of the profits after tax to the statutory reserve until the cumulative total of
the reserve reaches 50% of the companies’ registered capital. Subject to certain restrictions set out in
the Company Law of the PRC, part of the reserve funds may be converted to registered capital,
provided that the remaining balance after the conversion is not less than 25% of the registered capital.
(c) Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the
translation of the financial information of entities of which the functional currency is not RMB.
31. PARTLY-OWNED SUBSIDIARY WITH MATERIAL NON-CONTROLLING
INTERESTS
During the reporting period, the Company didn’t have any subsidiary that has material
non-controlling interests individual or in the aggregate material to the Company.
32. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
(a) Major non-cash transactions
During the three months ended 31 March 2026, the Group had non-cash additions to
right-of-use assets and lease liabilities of RMB2,888,000 and RMB2,888,000 respectively, in respect
of lease arrangements.
IA-32


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
32. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS—continued
(b) Changes in liabilities arising from financing activities
Interest-bearing
bank borrowings
Finance leases/
Lease liabilities
RMB’000 RMB’000
At 1 January 2026 ............................................ 396,901 20,519
Changes from financing cash flows (unaudited) ..................... 137,950 (5,633)
Lease cancelation (unaudited) ................................... — (1,467)
Interest on borrowings (Note 6) (unaudited) ........................ 2,473 —
Revision of lease payments (unaudited) ........................... — ( 6 )
New lease liabilities arising from additional leases during the period
(unaudited) ................................................ — 2,888
Interest element of lease liabilities (unaudited) ...................... — 2 4 5
Exchange realignment (unaudited) ............................... — ( 2 )
At 31 March 2026 (unaudited) .................................. 537,324 16,544
(c) Total cash outflow for leases
Three months ended 31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Within operating activities .............................................. 7 2 3 7 6 3
Within financing activities .............................................. 5,633 5,425
Total ............................................................... 6,356 6,188
33. COMMITMENTS
Capital commitments
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Property, plant and equipment ....................................... 132,025 36,717
34. RELATED PARTY
(a) Controlling entity
Name Type
Place of
incorporation Ownership interest
As at 31 March As at 31 December
2026 2025
(Unaudited)
Chongqing Hongshun Xiangtai Enterprise
Management Co., Ltd .....................
Controlling
shareholder
Chongqing,
PRC 18.93% 18.94%
IA-33


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
34. RELATED PARTY—continued
The Company’s controlling shareholder entity is Chongqing Hongshun Xiangtai Enterprise
Management Co., Ltd, and the ultimate controlling person is Dr. Zhang Shilong.
(b) Names and relationships with related parties
Related parties are those parties that have the ability to control, jointly control or exercise
significant influence over the other party in holding power over the investee; exposure or rights, to
variable returns from its involvement with the investee; and the ability to use its power over the
investee to affect the amount of the investor’s returns. Parties are also considered to be related if they
are subject to common control or joint control. Related parties maybe individuals or other entities.
The directors of the Company are of the view that the there had no significant related parties of
the Group that had transactions or balances with the Group for three months ended 31 March 2026 and
2025.
(c) Compensation of key management personnel of the Group
Three months ended
31 March
2026 2025
RMB’000 RMB’000
(Unaudited) (Unaudited)
Salaries, wages and bonus .................................................. 8 8 1 9 6 2
Share based compensation .................................................. 3 3 9 2 1 7
Pension scheme contributions ............................................... 5 2 5 1
Total ................................................................... 1,272 1,230
IA-34


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
35. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments as at 31 March 2026
and 31 December 2025 are as follows:
31 March 2026
Financial asset
Financial
assets at
FVTPL
Financial
assets at
FVTOCI
Financial
assets at
amortized
cost Total
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Financial assets at fair value through profit or loss ........... 1,600,781 — — 1,600,781
Cash and cash equivalents .............................. — — 1,183,697 1,183,697
Time deposits ........................................ — — 400,898 400,898
Trade and bills receivables ............................. — 6 9 5 325,277 325,972
Restricted cash ....................................... — — 44,820 44,820
Financial assets included in prepayments, deposits and other
receivables ........................................ — — 8,620 8,620
Total ............................................... 1,600,781 695 1,963,312 3,564,788
Financial liabilities
Financial
liabilities at
amortized
cost
RMB’000
(Unaudited)
Trade payables ..................................................................... 416,482
Interest-bearing bank borrowings ...................................................... 537,324
Financial liabilities included in other payables and accruals ................................. 42,691
Financial liabilities included in other non-current liabilities ................................. 189,307
Total ............................................................................ 1,185,804
IA-35


--- page 431 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
35. FINANCIAL INSTRUMENTS BY CATEGORY—continued
The carrying amounts of each of the categories of financial instruments as at 31 March 2026
and 31 December 2025 are as follows: (continued)
31 December 2025
Financial asset
Financial
assets at
FVTPL
Financial
assets at
FVTOCI
Financial
assets at
amortized
cost Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at fair value through profit or loss ............ 1,456,078 — — 1,456,078
Cash and cash equivalents ............................... — — 1,181,028 1,181,028
Time deposits ......................................... — — 453,564 453,564
Trade and bills receivables .............................. — 2 6 0 362,830 363,090
Restricted cash ........................................ — — 44,540 44,540
Financial assets included in prepayments, deposits and other
receivables ......................................... — — 13,686 13,686
Total ................................................ 1,456,078 260 2,055,648 3,511,986
Financial liabilities
Financial
liabilities at
amortized
cost
RMB’000
Trade payables ..................................................................... 400,910
Interest-bearing bank borrowings ...................................................... 396,901
Financial liabilities included in other payables and accruals ................................. 51,088
Financial liabilities included in other non-current liabilities ................................. 187,999
Total ............................................................................ 1,036,898
36. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS
The carrying amounts and fair values of the Group’s financial instruments, other than those
with carrying amounts that reasonably approximate to fair values, are as follows:
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
Financial assets:
Non-current time deposits
Carrying amount .............................................. 373,739 371,754
Fair value ................................................... 384,202 373,851
IA-36


--- page 432 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
36. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL
INSTRUMENTS—continued
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Financial liabilities:
Non-current portion of interest-bearing bank borrowings
Carrying amount .............................................. 34,920 67,172
Fair value ................................................... 35,284 67,861
Financial liabilities included in other non-current liabilities
Carrying amount .............................................. 189,307 187,999
Fair value ................................................... 189,453 188,150
Management has assessed that the fair values of cash and cash equivalents, restricted cash,
trade and bills receivables, trade payables, financial assets included in prepayments, other receivables
and other assets, current portion of interest-bearing bank borrowings, and financial liabilities included
in other payables and accruals, approximate to their carrying amounts largely due to the short term
maturities of these instruments.
The Group’s management is responsible for determining the policies and procedures for the fair
value measurement of financial instruments. At each reporting date, the management analyzes the
movements in the values of financial instruments and determines the major inputs applied in the
valuation.
The fair values of the financial assets included in time deposits and the financial liabilities
included in other non-current liabilities and interest-bearing bank borrowings have been calculated by
discounting the expected future cash flows using rates currently available for instruments with similar
terms, credit risk and remaining maturities. The changes in fair value as a result of the Group’s own
non-performance risk for non-current liabilities and interest-bearing bank borrowings as at 31 March
2026 and 31 December 2025 were assessed to be insignificant.
The fair values of listed equity investments are based on quoted market prices. The fair values
of unlisted investments designated at fair value through profit or loss have been estimated using a
valuation technique based on assumptions that are not supported by observable market prices or rates.
The directors believe that the estimated fair values resulting from the valuation technique, which are
recorded in the consolidated statements of financial position, and the related changes in fair values,
which are recorded in profit or loss, are reasonable, and that they were the most appropriate values at
the end of each reporting period.
The Group invests in financial products, which represent wealth management products issued
by banks in Chinese Mainland. The Group has estimated the fair value of these unlisted investments by
using a discounted cash flow valuation model based on the market interest rates of instruments with
similar terms and risks.
IA-37


--- page 433 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
36. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL
INSTRUMENTS—continued
Below is a summary of significant unobservable input to the valuation of a financial instrument
together with a quantitative sensitivity analysis as at 31 March 2026 and 31 December 2025:
Financial assets Valuation technique
Significant
unobservable
input Sensitivity of fair value to the input
-Unlisted equity
investments
Net asset value of
underlying
investments
Net assets 5% increase/decrease
in net assets would result in an increase/decrease in
fair value by RMB5,659,000/RMB5,659,000 and
RMB5,228,000/RMB5,228,000
as at 31 March 2026 and
31 December 2025
-Wealth
management
products
Discounted cash
flow method
Interest
rates
5% increase/decrease
in interest rates would result in an increase/
decrease in fair value by
RMB216,000/RMB216,000 and
RMB54,000/RMB54,000
as at 31 March 2026 and
31 December 2025
Fair value hierarchy
The following tables illustrate the fair value measurement hierarchy of the Group’s financial
instruments:
Assets measured at fair value:
As at 31 March 2026
Fair value measurement using
Quoted prices Significant Significant
in active observable unobservable
markets inputs inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Financial assets at fair value through profit or loss:
Listed equity investments ........................ 8,290 — — 8,290
Unlisted equity investments ...................... — — 113,173 113,173
Wealth management products .................... — — 1,479,318 1,479,318
Trade and bills receivables at fair value through other
comprehensive income ............................ — 6 9 5 — 6 9 5
Total ............................................ 8,290 695 1,592,491 1,601,476
IA-38


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
36. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL
INSTRUMENTS—continued
As at 31 December 2025
Fair value measurement using
Quoted prices Significant Significant
in active observable unobservable
markets inputs inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at fair value through profit or loss:
Listed equity investments ........................ 11,424 — — 11,424
Unlisted equity investments ...................... — — 104,567 104,567
Wealth management products ..................... — — 1,340,087 1,340,087
Trade and bills receivables at fair value through other
comprehensive income ............................ — 2 6 0 — 2 6 0
Total ............................................ 11,424 260 1,444,654 1,456,338
The movements in fair value measurements within Level 3 during the reporting period are as
follows:
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Financial assets at fair value through profit or loss
At 1 January ..................................................... 1,444,654 1,464,592
Purchase ........................................................ 1,476,000 5,095,000
Fair value gains ................................................... 15,223 29,829
Disposal ........................................................ (1,343,386) (5,144,767)
At 31 March/31 December .......................................... 1,592,491 1,444,654
During the reporting period, there were no transfers of fair value measurements between
Level 1 and Level 2 and no transfers into or out of Level 3 for both financial assets and financial
liabilities.
Liabilities for which fair values are disclosed:
As at 31 March 2026
Fair value measurement using
Quoted prices Significant Significant
in active observable unobservable
markets inputs inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Non-current portion of interest-bearing bank borrowings . . . — 35,284 — 35,284
Financial liabilities included in other non-current
liabilities ....................................... — 189,453 — 189,453
Total ............................................ — 224,737 — 224,737
IA-39


--- page 435 ---
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
36. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL
INSTRUMENTS—continued
As at 31 December 2025
Fair value measurement using
Quoted prices Significant Significant
in active observable unobservable
markets inputs inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Non-current portion of interest-bearing bank borrowings ..... — 67,861 — 67,861
Financial liabilities included in other non-current liabilities . . . — 188,150 — 188,150
Total .............................................. — 256,011 — 256,011
37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise bank loans, and cash and time deposits.
The main purpose of these financial instruments is to raise finance for the Group’s operations. The
Group has various other financial assets and liabilities such as trade and bills receivables and trade and
payables, which arise directly from its operations.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign
currency risk, credit risk and liquidity risk. The board of directors reviews and agrees policies for
managing each of these risks and they are summarized below.
Interest rate risk
Interest-bearing financial instruments at variable rates and at fixed rates expose the Group to
cash flow interest rate risk and fair value interest risk, respectively. The Group determines the
appropriate weightings of the fixed and floating rate interest-bearing instruments based on the current
market conditions and performs regular reviews and monitoring to achieve an appropriate mix of fixed
and floating rate exposure. The cash flow interest rate risk and fair value interest rate risk that the
Group exposed to are not significant.
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from export sales denominated in
foreign currencies. Foreign exchange risk arises when future commercial transactions or recognized
assets and liabilities are denominated in a currency that is not the respective functional currency of the
Group’s subsidiaries.
IA-40


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—continued
The following table demonstrates the sensitivity to a reasonably possible change in foreign
exchange risk, with all other variables held constant, of the Group’s profit after tax (through the impact
on floating rate borrowings) and the Group’s equity.
Increase/
(decrease)
in basis
point
Increase/
(decrease)
in profit
after tax
Increase/
(decrease)
in equity
% RMB’000 RMB’000
31 March 2026 (unaudited)
If the RMB weakens against the USD (unaudited) ........................ 5.00% 31,670 31,670
If the RMB strengthens against the USD (unaudited) ...................... -5.00% (31,670) (31,670)
If the RMB weakens against the HKD (unaudited) ........................ 5.00% 987 987
If the RMB strengthens against the HKD (unaudited) ..................... -5.00% (987) (987)
If the RMB weakens against the EUR (unaudited) ........................ 5.00% 238 238
If the RMB strengthens against the EUR (unaudited) ...................... -5.00% (238) (238)
If the RMB weakens against the JPY (unaudited) ......................... 5.00% 96 96
If the RMB strengthens against the JPY (unaudited) ...................... -5.00% (96) (96)
31 December 2025
If the RMB weakens against the USD .................................. 5.00% 36,370 36,370
If the RMB strengthens against the USD ............................... -5.00% (36,370) (36,370)
If the RMB weakens against the HKD ................................. 5.00% 1,280 1,280
If the RMB strengthens against the HKD ............................... -5.00% (1,280) (1,280)
If the RMB weakens against the EUR .................................. 5.00% 52 52
If the RMB strengthens against the EUR ............................... -5.00% (52) (52)
If the RMB weakens against the JPY .................................. 5.00% 81 81
If the RMB strengthens against the JPY ................................ -5.00% (81) (81)
Credit risk
The carrying amounts of cash and cash equivalents, time deposits, trade and bills receivables,
and other financial assets at amortized cost included in the consolidated statements of financial
position represent the Group’s maximum exposure to credit risk in relation to its financial assets. The
Group does not provide any guarantees which would expose the Group to credit risk.
Cash and cash equivalents, time deposits and restricted cash are primarily held with state-
owned or listed banks and subject to the impairment requirements of IFRS 9, and the identified
impairment loss was immaterial as at 31 March 2026 and 31 December 2025.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses
(“ECLs”), which uses a lifetime expected loss allowance for all trade and bills receivables. To measure
the ECLs, trade and bills receivables have been grouped based on shared credit risk characteristics and
aging. The Group has therefore concluded that the expected loss rates for trade and bills receivables are
a reasonable approximation of the loss rates for the contract assets. The Group also made individual
assessment on the recoverability of its trade and bills receivables for certain customers based on
historical settlement records.
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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—continued
Maximum exposure and period/year-end staging
The tables below show the credit quality and maximum exposure to credit risk based on
Group’s credit policy, which is mainly based on past due information unless other information is
available without undue cost or effort, and period/year-end staging classification as at the end of each
of the reporting period.
The amounts presented are gross carrying amounts for financial assets.
As at 31 March 2026
3-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash and cash equivalents .................... 1,183,697 — — — 1,183,697
Time deposits .............................. 400,898 — — — 400,898
Restricted cash ............................. 44,820 — — — 44,820
Trade and bills receivables at amortized cost* ..... — — — 334,884 334,884
Trade and bills receivables at fair value through
other comprehensive income ................ — — — 6 9 5 6 9 5
Financial assets included in prepayments, other
receivables and other assets — — — — —
-Normal** ............................ 10,495 — — — 10,495
-Doubtful** ........................... — — — — —
Total ..................................... 1,639,910 — — 335,579 1,975,489
As at 31 December 2025
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents ....................... 1,181,028 — — — 1,181,028
Time deposits ................................. 453,564 — — — 453,564
Restricted cash ................................ 44,540 — — — 44,540
Trade and bills receivables at amortized cost* ........ — — — 373,407 373,407
Trade and bills receivables at fair value through other
comprehensive income ........................ — — — 2 6 0 2 6 0
Financial assets included in prepayments, other
receivables and other assets
-Normal** ................................ 15,427 — — — 15,427
-Doubtful** .............................. — — — — —
Total ........................................ 1,694,559 — — 373,667 2,068,226
* For trade and bills receivables to which the Group applies the simplified approach for impairment, information based on the provision
matrix is disclosed in note 19 to the financial statements.
** The credit quality of financial assets included in prepayments, other receivables and other assets is considered to be “normal” when they
are not past due and there is no information indicating that the financial assets had a significant increase in credit risk since initial
recognition. Otherwise, the credit quality of the financial assets is considered to be “doubtful”.
IA-42


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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—continued
Further quantitative data in respect of the Group’s exposure to credit risk arising from trade and
bills receivables are disclosed in note 19 to the financial statements.
The Group had certain concentrations of credit risk as 7.74% and 32.53%, 7.17% and 30.68%
of the Group’s trade receivables were due from the Group’s largest customer and five largest for
customers, during the three months ended 31 March 2026 and year ended 31 December 2025,
respectively.
Liquidity risk
The Group’s approach to managing liquidity risk is to ensure sufficient capital liquidity to meet
its due debts without incurring unacceptable losses or causing damage to the Group’s reputation. The
Group regularly analyzes its liability structure and maturity dates to ensure the maintenance of ample
liquidity. The Group’s management monitors the utilization of bank borrowings and ensures
compliance with borrowing agreements. At the same time, it maintains close cooperation with financial
institutions to maintain sufficient credit lines and effectively prevent and to control liquidity risks.
The maturity profile of the Group’s financial liabilities as at the end of each of the reporting
period, based on the contractual undiscounted payments, is as follows:
As at 31 March 2026
On demand for
less than
one year
One to
five years Total
RMB’000 RMB’000 RMB’000
(Unaudited) (Unaudited) (Unaudited)
Trade payables .............................................. 416,482 — 416,482
Interest-bearing bank borrowings ................................ 510,813 35,276 546,089
Financial liabilities included in other payable and accruals ............ 42,691 — 42,691
Lease liabilities .............................................. 10,251 6,922 17,173
Other non-current liabilities .................................... — 203,621 203,621
Total ...................................................... 980,237 245,819 1,226,056
As at 31 December 2025
On demand for
less than
one year
One to
five years Total
RMB’000 RMB’000 RMB’000
Trade payables ............................................... 400,910 — 400,910
Interest-bearing bank borrowings ................................. 337,319 67,847 405,166
Financial liabilities included in other payable and accruals ............. 51,088 — 51,088
Lease liabilities ............................................... 13,272 8,035 21,307
Other non-current liabilities ..................................... — 203,621 203,621
Total ....................................................... 802,589 279,503 1,082,092
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APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION—continued
37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES—continued
Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability
to continue as a going concern and to maintain healthy capital ratios in order to support its business
and maximize shareholders’ value.
The Group manages its capital structure and makes adjustments to it in light of changes in
economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the
capital structure, the Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. The Group is not subject to any externally imposed capital
requirements. No change was made in the objectives, policies or processes for managing capital during
the reporting period.
The Group monitors capital using debt-to-asset ratio, which is total liabilities divided by total
assets. The ratios as at 31 March 2026 and 31 December 2025 were as follows:
As at 31 March As at 31 December
2026 2025
RMB’000 RMB’000
(Unaudited)
Total assets ...................................................... 7,187,023 6,954,150
Total liabilities ................................................... 1,685,689 1,627,044
Debt-to-asset ratio ................................................ 2 3 % 2 3 %
38. CONTINGENCIES
Guarantee
As at 31 March 2026 and 31 December 2025 no guarantee was provided by the Group to third
parties.
As at 31 March 2026, the Company was involved as defendant in one outstanding contractual
dispute litigation, with a claimed amount of RMB 44,000,000, along with overdue payment interest
and other expenses. A court hearing was held on 5 February 2026. As at the date of approval of this
report, the court had not yet rendered its first-instance judgment. The Company represented that the
likelihood of an outflow of economic benefits arising from this matter is remote.
39. SUBSEQUENT FINANCIAL STATEMENT
No audited financial statements have been prepared by the Company, the Group or any of the
companies comprising the Group in respect of any period subsequent to 31 March 2026.
IA-44


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APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following information does not form part of the Accountants’ Report from Ernst & Young,
Certified Public Accountants, Hong Kong, the Company’s Reporting Accountants, as set out in
Appendix I to this prospectus, and is included herein for information purpose only. The unaudited pro
forma financial information should be read in conjunction with the section headed “Financial
Information” in this prospectus and the Accountants’ Report set out in Appendix I to this prospectus.
A. ILLUSTRATION UNAUDITED PRO FORMA STATEMENT OF ADJUSTED
CONSOLIDATED NET TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets of the Group
has been prepared in accordance with Rule 4.29 of the Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited and with reference to Accounting Guideline 7 Preparation
of Pro Forma Financial Information for inclusion in Investment Circulars issued by the Hong Kong
Institute of Certified Public Accountants for illustration purposes only, and is set out here to illustrate
the effect of the Global Offering on the consolidated net tangible assets of the Group attributable to
owners of the Company as of December 31, 2025 as if the Global Offering had taken place on that
date.
The unaudited pro forma statement of adjusted consolidated net tangible assets of the Group
attributable to owners of the Company has been prepared for illustrative purposes only and because of
its hypothetical nature, it may not give a true picture of the consolidated net tangible assets of the
Group had the Global Offering been completed as of December 31, 2025 or any future dates.
Consolidated net
tangible assets of
the Group
attributable to
owners of the
Company as at
December 31, 2025
Estimated
net proceeds
from the
Global
Offering
Unaudited pro forma
adjusted consolidated
net tangible assets of
the Group attributable
to owners of the
Company as at
December 31, 2025
Unaudited pro forma
adjusted consolidated
net tangible assets of
the Group attributable
to owners of the
Company per share as
at December 31, 2025
RMB’000 RMB’000 RMB’000 RMB HK$
(note 1) (note 2) (note 3) (note 4)
Based on an Offer Price of HK$85.20
per Share .................... 4,907,130 3,917,055 8,824,185 13.09 15.04
Notes:
1. The consolidated net tangible assets attributable to owners of the Company as at December 31, 2025 was equal to the consolidated net
assets attributable to owners of the Company as at December 31, 2025 of RMB5,294,385,000 with adjustment for the goodwill of
RMB301,277,000 and other intangible assets of RMB85,978,000 set out in the Accountants’ Report in Appendix I to this prospectus.
2. The estimated net proceeds from the Global Offering are based on the offer price of HK$85.20 per Share after deduction of the
underwriting fees and other related expenses payable by the Company (excluding the listing expense that have been charged to profit or
loss during the Track Record Period) and do not take into account any shares which may be issued upon exercise of the Over-allotment
Option.
3. The unaudited pro forma adjusted consolidated net tangible assets per Share is calculated after making the adjustments referred to in the
preceding paragraphs and on the basis that 674,064,214 Shares are in issue assuming that the Global Offering had been completed on
December 31, 2025, without taking into account of any shares which may be allotted and issued upon the exercise of the Over-allotment
Option.
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APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
4. For the purpose of this unaudited pro forma adjusted net tangible assets, the balance stated in RMB are converted into HK$ at an
exchange rate of HK$1.00 to RMB0.87048. No representation is made that the Hong Kong dollar amounts have been, could have been or
may be converted to Renminbi, or vice versa, at that rate or any other rates or at all.
5. No other adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets to reflect any trading results or
other transactions of the Group entered into subsequent to December 31, 2025.
6. No other adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets to reflect any trading results of
the Group from December 31, 2025 to the Latest Practicable Date and the increase in the Group’s equity arising from the exercise of
share options by employees to subscribe 951,610 Shares (the difference between the 675,015,824 shares used in deriving the market
capitalization and 674,064,214 shares used in deriving the pro forma net tangible asset per share) after December 31, 2025. The exercise
of share options did not have any P&L impact, as the Group had already fully recognized the share-based payment expenses over the
vesting period in accordance with IFRS 2—Share-based Payment. Accordingly, no further expense was recognized upon exercise. The
cash received for this exercise was RMB47,593,000. Had the exercise of the stock options been taken into account, the unaudited pro
forma adjusted consolidated net tangible assets per Share as at December 31, 2025 would have been HK$15.10, respectively, on the basis
that 54,001,200 Shares were in issue at indicative Offer Prices of HK$85.20 per Offer Share, assuming that the exercise of share options
and the Offering had been completed on December 31, 2025, without taking into account any shares which may be allotted and issued
upon the exercise of the Over-allotment Option.
7. The Proposal of “2025 Annual Dividend Plan” was approved in the Annual General Meeting of shareholders. It was agreed that the
Company will distribute cash dividends amounting to RMB124,101,000

 based on the total share capital of 620,507,403 shares as of the
date of issuance of the profit distribution plan. A cash dividend of RMB2.0 (tax inclusive) per 10 shares will be distributed to all
shareholders. No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets to reflect this subsequent
event.
B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
The following is the text of a report received from the independent reporting accountants of the
Company, Ernst & Young, Certified Public Accountants, Hong Kong, prepared for the purpose of
incorporation in this prospectus, in respect of the pro forma financial information of the Group.
Ernst & Young Group Limited
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
979
27
Tel : +852 2846 9888
Fax : +852 2868 4432
ey.com
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
To the Directors of SG Micro Corp
We have completed our assurance engagement to report on the compilation of unaudited pro
forma financial information of SG Micro Corp (the “Company”) and its subsidiaries (hereinafter
collectively referred to as the “Group”) by the directors of the Company (the “Directors”) for
illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro
forma consolidated net tangible assets as at December 31, 2025, and related notes as set out on
pages II-1 to II-2 of the prospectus dated 17 June 2026 (the “Prospectus”) issued by the Company (the
“Unaudited Pro Forma Financial Information”). The applicable criteria on the basis of which the
Directors have compiled the Unaudited Pro Forma Financial Information are described in Part A of
Appendix II to the Prospectus.
II-2


--- page 442 ---
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
The Unaudited Pro Forma Financial Information has been compiled by the Directors to
illustrate the impact of the global offering of shares of the Company on the Group’s financial position
as at December 31, 2025 as if the transaction had taken place at December 31, 2025. As part of this
process, information about the Group’s financial position has been extracted by the Directors from the
Group’s financial statements for the period ended December 31, 2025, on which an accountants’ report
has been published.
Directors’ responsibility for the Unaudited Pro Forma Financial Information
The Directors are responsible for compiling the Unaudited Pro Forma Financial Information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline
(“AG”) 7 Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars
issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).
Our independence and quality management
We have complied with the independence and other ethical requirements of the Code of Ethics
for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of
integrity, objectivity, professional competence and due care, confidentiality and professional behavior.
Our firm applies Hong Kong Standard on Quality Management 1 Quality Management for
Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services
Engagements which requires the firm to design, implement and operate a system of quality
management including policies or procedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory requirements.
Reporting accountants’ responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing
Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not
accept any responsibility for any reports previously given by us on any financial information used in
the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom
those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial
Information Included in a Prospectus issued by the HKICPA. This standard requires that the reporting
accountants plan and perform procedures to obtain reasonable assurance about whether the Directors
have compiled the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of
the Listing Rules and with reference to AG 7 issued by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any reports or
opinions on any historical financial information used in compiling the Unaudited Pro Forma Financial
Information, nor have we, in the course of this engagement, performed an audit or review of the
financial information used in compiling the Unaudited Pro Forma Financial Information.
The purpose of the Unaudited Pro Forma Financial Information included in the Prospectus is
solely to illustrate the impact of the global offering of shares of the Company on unadjusted financial
II-3


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APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
information of the Group as if the transaction had been undertaken at an earlier date selected for
purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of
the transaction would have been as presented.
A reasonable assurance engagement to report on whether the Unaudited Pro Forma Financial
Information has been properly compiled on the basis of the applicable criteria involves performing
procedures to assess whether the applicable criteria used by the Directors in the compilation of the
Unaudited Pro Forma Financial Information provide a reasonable basis for presenting the significant
effects directly attributable to the transaction, and to obtain sufficient appropriate evidence about
whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the Unaudited Pro Forma Financial Information reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgment, having regard to the
reporting accountants’ understanding of the nature of the Group, the transaction in respect of which the
Unaudited Pro Forma Financial Information has been compiled, and other relevant engagement
circumstances.
The engagement also involves evaluating the overall presentation of the Unaudited Pro Forma
Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Unaudited Pro Forma Financial
Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Ernst & Young
Certified Public Accountants
Hong Kong
17 June 2026
II-4


--- page 444 ---
APPENDIX III TAXATION AND FOREIGN EXCHANGE
TAXATION IN HONG KONG
Tax on Dividends
Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable
in Hong Kong in respect of dividends paid by us.
Capital Gains and Profit Tax
No tax is imposed in Hong Kong in respect of capital gains from the sale of H Shares.
However, trading gains from the sale of H Shares by persons carrying on a trade, profession or
business in Hong Kong, where such gains are derived from or arise in Hong Kong from such trade,
profession or business will be subject to Hong Kong profits tax, which is currently imposed at the
maximum rate of 16.5% on corporations and at the maximum rate of 15% on unincorporated
businesses. Certain categories of taxpayers (for example, financial institutions, insurance companies
and securities dealers) are likely to be regarded as deriving trading gains rather than capital gains
unless these taxpayers can prove that the investment securities are held for long-term investment
purposes.
Trading gains from sales of H Shares effected on the Stock Exchange will be considered to be
derived from or arise in Hong Kong. Liability for Hong Kong profits tax would thus arise in respect of
trading gains from sales of H Shares effected on the Stock Exchange realized by persons carrying on a
business of trading or dealing in securities in Hong Kong.
Taxes for Securities Holders
The income tax and the capital gains tax for holders of H Shares shall be subject to the laws and
practices of PRC and the jurisdictions in which the holders of H Shares are residents or subject to taxes
for other reasons. The following summary of relevant tax provisions is based on current laws and
practices, and does not take into account anticipated changes in or amendments to the relevant laws
and policies or constitute any opinions or suggestions. The discussion does not address all of the
possible tax consequences associated with H-Shares, nor does it take into account the particular
circumstances of any individual investor, some of which may be subject to special rules. Accordingly,
you should consult your own tax adviser as to the tax implications of the H Shares. The discussion is
based on the laws and the relevant interpretations in force as of the Latest Practicable Date. All the
laws and relevant interpretations are subject to changes and may have retrospective effect.
The discussion does not address any PRC tax issues other than income tax, capital gains tax,
value-added tax, stamp duty and estate duty. Prospective investors should consult their tax advisers
regarding the Chinese and other tax implications of holding and disposing of H-shares.
PRC Taxation
Taxation Regarding Dividends
Individual Investors
Pursuant to the Individual Income Tax Law of the People’s Republic of China (
ʕശɛ͏΍ձ
), as last amended by the Standing Committee of the National People’s Congress
(“NPCSC”) on August 31, 2018 and effective on January 1, 2019 (the “Individual Income Tax Law”),
and the Regulations for the Implementation of the Individual Income Tax Law of the People’s
III-1


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APPENDIX III TAXATION AND FOREIGN EXCHANGE
Republic of China, as last amended by the State Council on December 18, 2018 and effective on
January 1, 2019, dividends distributed by PRC enterprises are subject to a flat tax rate of 20% for
individual income tax. For foreign individuals who are not Chinese residents, if they receive dividends
from Chinese enterprises, they are normally subject to 20% individual income tax, unless they obtain a
special exemption from the tax authorities of the State Council or a reduction or exemption under the
relevant tax treaties.
Pursuant to the Arrangement between the 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 (
τ
ર) signed on August 21, 2006 (the “Arrangement for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion” ), the Chinese government may impose a tax on dividends payable by a
Chinese company to a Hong Kong resident (including the natural person and legal entity), but such tax
shall not exceed 10% of the total dividends payable. If a Hong Kong resident directly holds 25% or
more of the equity in a PRC company, and such Hong Kong resident is the beneficial owner of the
dividends and other conditions are satisfied, the relevant tariff shall not exceed 5% of the total
dividends payable by the PRC company. The Fifth Protocol on the Arrangement between the 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 (the “Fifth Protocol”), which became
effective on December 6, 2019, provides that such provisions shall not apply to any arrangements or
transactions entered into with the primary purpose of obtaining such tax benefits.
Corporate Investors
According to the Enterprise Income Tax Law of the People’s Republic of China (
ʕശɛ͏΍ձ
) last amended by the NPCSC and effective on December 29, 2018 (the “Enterprise
Income Tax Law”) and the Implementing Regulations of the Enterprise Income Tax Law of the People’s
Republic of China last amended by the State Council on December 6, 2024 and effective on January 20,
2025, non-resident enterprises which do not have establishments or offices in China, or even if they have
a branch or offices in China but their China-sourced income is not effectively connected with their
establishments or offices, shall pay a 10% enterprise income tax on their China-sourced income
(including income from dividends and bonus paid by Chinese resident enterprises whose shares are
issued and listed in Hong Kong). The withholding tax may be waived under the applicable treaty to avoid
double taxation. The income tax payable by a non-resident enterprise shall be withheld at source, and the
payer shall be the withholding agent. The tax shall be withheld by the withholding agent from the amount
paid to the non-resident enterprise on each payment or due payment.
Pursuant to the Notice of the State Administration of Taxation on Issues Relating to
Withholding and Payment of Enterprise Income Tax on Dividends Distributed by Chinese Resident
Enterprises to Overseas H-share Non-resident Enterprises Shareholders (
͏ΆุΣྤ̮
H) (Guo Shui Han [2008] No. 897)
issued and implemented by the State Administration of Taxation (the “SAT”) on November 6, 2008,
when distributing dividends for the year 2008 and the subsequent years to overseas H -share
non-resident enterprises shareholders, PRC resident enterprises shall be subject to a uniform 10% tax
rate for withholding and paying enterprise income tax on behalf of their shareholders. According to the
Official Reply of the State Administration of Taxation on Imposition of Enterprise Income Tax on
B-share Dividends of Non-resident Enterprises (
͏Άุ՟੻B੻೼
ҭᔧ) (Guo Shui Han [2009] No. 394) issued and implemented by the SAT on July 24, 2009,
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APPENDIX III TAXATION AND FOREIGN EXCHANGE
any Chinese resident enterprise that publicly lists on overseas stock exchange shall withhold and pay
enterprise income tax at a uniform rate of 10% when distributing dividends for 2008 and subsequent
years to non-resident enterprises shareholders. The above tax rates may be further changed in
accordance with tax treaties or agreements entered into between the PRC and the relevant jurisdictions,
as applicable.
Pursuant to the Arrangement for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion, the Chinese government may impose a tax on dividends payable by a Chinese
company to a Hong Kong resident (including the natural person and legal entity), but such tax rate
shall not exceed 10% of the total dividends payable by the Chinese company. If the Hong Kong
resident directly holds 25% or more of the equity in the Chinese company, the tax rate shall not exceed
5% of the total dividends payable. The Fifth Protocol provides that such provision shall not apply to
any arrangement or transaction entered into with the primary purpose of obtaining such tax benefits.
Tax Treaties
Non-Chinese resident investors residing in countries that have entered into treaties with China
for the avoidance of double taxation may be entitled to the relief from withholding tax on dividends
received from Chinese companies. China has entered into arrangements on the avoidance of double
taxation with a number of countries and regions, including but not limited to Hong Kong, Macao,
Australia, Canada, France, Germany, Japan, Malaysia, the Netherlands, Singapore, the United
Kingdom, and the United States. Non-Chinese resident enterprises entitled to preferential tax rates
under the relevant income tax treaties or arrangements shall apply to the Chinese tax authorities for a
refund of the withholding tax in excess of the agreed tax rate, and the refund payment shall be
approved by the Chinese tax authorities.
Taxation Related to Share Transfer
Income tax
Individual Investors
Individual Chinese residents shall pay individual income tax at a rate of 20% on the income
derived from the transfer of equity of Chinese resident enterprises in accordance with the Individual
Income Tax Law and its implementation regulations. Pursuant to the Notice on the Continued
Provisional Exemption of Individual Income Tax on Income from the Transfer of Stocks by
Individuals (Cai Shui Zi [1998] No. 61) jointly issued and implemented by the Ministry of Finance
(“MOF”) and the SAT on March 30, 1998, since January 1, 1997, the income from the transfer of
shares in listed companies by individuals continues to be subject to temporary exemption of individual
income tax. The SAT did not explicitly specify in the newly amended Enterprise Income Tax Law and
Individual Income Tax Law of the PRC and their implementation regulations whether the individual
income tax on gains from the transfer of shares held by a listed company shall continue to be
exempted.
Corporate Investors
In accordance with the Enterprise Income Tax Law and its implementing regulations, non-PRC
resident enterprises that have no establishments or offices in China, or that have establishments or
offices but the incomes obtained by the enterprises have no actual connection with the establishments
or offices, shall pay enterprise income tax in relation to their incomes generated in China (including
gains from the sale of shares held by a PRC resident enterprise) at the tax rate of 10%. The income tax
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APPENDIX III TAXATION AND FOREIGN EXCHANGE
payable by non-PRC resident enterprises shall be withheld at the source, with the payer as the
withholding agent. The tax payable shall be withheld from each payment or amount due at the time of
payment or when the payment becomes due. The withholding tax can be reduced or exempted pursuant
to the applicable tax treaties or agreements.
Tax Policies of Shenzhen-Hong Kong Stock Connect
On November 5, 2016, the MOF, the SAT and the CSRC jointly issued the Notice on Tax
Policy of the Pilot Program for the Shenzhen-Hong Kong Stock Connect Scheme (
ୃ̹ఙ
) (Cai Shui [2016] No. 127). According to this document,
income from transfer price differences and dividends and bonus income obtained by PRC corporate
investors through the Shenzhen-Hong Kong Stock Connect when investing in stocks listed on the
Hong Kong Stock Exchange shall be included in their total income, and shall be subject to enterprise
income tax in accordance with the law. Specifically, gains from dividends and bonus derived by a
Chinese resident enterprise for holding H shares for at least 12 consecutive months will be exempted
from enterprise income tax in accordance with the law. H-share companies are not required to withhold
and pay taxes on dividends and bonus income paid to Chinese corporate investors on their behalf. The
taxes payable shall be declared and paid by the relevant corporate.
For dividends received by PRC individual investors investing in H-shares listed on the Hong
Kong Stock Exchange through the Shenzhen-Hong Kong Stock Connect, the H-share company shall
apply to China Securities Depository & Clearing Corporation Limited (“CSDC”), which shall provide
the H-share company with the roster of PRC individual investors, and then the H-share company shall
withhold and pay the individual income tax according to the tax rate of 20% on their behalf. Individual
investors who have paid withholding tax outside China may apply to the competent tax authority of
CSDC for a tax credit by presenting valid tax reduction certificates. Dividends and bonus income
derived from shares listed on the Hong Kong Stock Exchange that are invested in through the
Shenzhen-Hong Kong Stock Connect by Chinese securities investment funds shall be subject to
individual income tax in accordance with the aforementioned regulations.
Stamp Duty
According to the Stamp Tax Law of the People’s Republic of China (
೼
) promulgated on June 10, 2021 and effective as of July 1, 2022, disposal of H shares outside
China by non-PRC investors will not be subject to the Stamp Tax Law of the People’s Republic of
China.
Estate Duty
As of the Latest Practicable Date, no estate duty has been introduced in the PRC.
Major Taxes of the Company in China
Enterprise Income Tax
According to the Enterprise Income Tax Law and its implementation regulations, enterprises
established within China, or those established outside China but with their place of effective
management within China, are deemed “resident enterprises”. Resident enterprises shall pay enterprise
income tax on their income derived both within and outside China. A “non-resident enterprise” refers
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to an enterprise established under the laws of a foreign country (or region) with its place of effective
management outside China, but which either has an establishment or place of business within China, or
does not have an establishment or place of business within China but derives income from sources
within China. The enterprise income tax rate is 25%. High-tech enterprises that require key support
from the state shall be subject to a reduced enterprise income tax rate of 15%.
According to the Announcement on Policies of Enterprise Income Tax for Promoting High-
Quality Development of the Integrated Circuit Industry and Software Industry (
ආණϓཥ༩ପ
ʮѓ) (Announcement No. 45 of 2020 by the Ministry of
Finance, the State Taxation Administration, the National Development and Reform Commission, and
the Ministry of Industry and Information Technology) issued by the Ministry of Finance, the State
Taxation Administration, the National Development and Reform Commission, and the Ministry of
Industry and Information Technology on December 11, 2020 and implemented on January 1, 2020, key
integrated circuit design enterprises and software enterprises encouraged by the state shall be exempt
from enterprise income tax for the first five years starting from the year they become profitable, and
shall be subject to a reduced enterprise income tax rate of 10% for subsequent years.
Value-Added Tax
Pursuant to the Notice of the Ministry of Finance and the State Taxation Administration on
Adjusting Value-Added Tax Rates (
), which was
jointly issued by the Ministry of Finance and the State Taxation Administration on April 4, 2018 and
effective as of May 1, 2018, for taxpayers engaged in VAT-taxable transactions or importing goods
that were previously subject to 17% or 11% tax rates, the applicable rates have been adjusted to 16%
and 10% respectively.
Pursuant to the Announcement on Policies Concerning the Deepening of Value-Added Tax
Reform (
ʮѓ) jointly issued by the Ministry of Finance, the State
Taxation Administration, and the General Administration of Customs on March 20, 2019 and effective
as of April 1, 2019, for general VAT taxpayers engaged in VAT-taxable transactions or importing
goods that were previously subject to 16% or 10% tax rates, the applicable rates have been adjusted to
13% and 9% respectively.
According to the Value-Added Tax Law of the People’s Republic of China (
ʕശɛ͏΍ձ਷
) promulgated by the Standing Committee of the National People’s Congress on
December 25, 2024, and effective as of January 1, 2026 (the “Interim Regulations on Value-Added
Tax of the People’s Republic of China” were repealed simultaneously), entities and individuals
(including individual industrial and commercial households) engaged in the sale of goods, services,
intangible assets, and real estate within China, as well as the importation of goods, shall be taxpayers
of value-added tax and shall pay value-added tax in accordance with the provisions of this Law.
Taxpayers selling goods, providing processing, repair, and maintenance services, leasing tangible
movable property, as well as importing goods, shall be subject to a 13% tax rate, except where
otherwise specified. In certain specific circumstances, the tax rate may be 9%, 6%, or 0%.
Foreign Exchange Administration
Renminbi (“RMB”), the legal tender of China, is subject to foreign exchange administration
and cannot be freely convertible into foreign currencies. The State Administration of Foreign
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Exchange, authorized by the People’s Bank of China, is responsible for the administration of all
matters related to foreign exchange, including the implementation of applicable foreign exchange
administration regulations.
According to the Regulations of the People’s Republic of China on Foreign Exchange
Administration (
ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ) promulgated by the State Council on January 29,
1996, and last amended and implemented on August 5, 2008, domestic institutions and individuals
making direct investments abroad or engaging in the issuance and trading of overseas securities and
derivative products shall register in accordance with the provisions of the foreign exchange
administrative department of the State Council.
Pursuant to the Notice of the State Administration of Foreign Exchange on Reforming and
Regulating the Administrative Policies over Foreign Exchange Settlement under the Capital Account
(
) issued and implemented by the
SAFE on June 9, 2016, the relevant policies have made it clear that domestic institutions may settle
their foreign exchange incomes under the capital account (including foreign exchange capital, foreign
debt funds and funds transferred from overseas listing) based on discretionary settlement according to
the actual business operation needs of domestic institutions. Where existing regulations impose
restrictive provisions on the conversion of foreign exchange income under the capital account by
domestic institutions, such provisions shall prevail.
According to the Circular of the State Administration of Foreign Exchange on Optimizing
Foreign Exchange Management Service in Support of Foreign Business Development (
̮ි၍ଣ
) issued by the SAFE on April 10, 2020 and
implemented effective on June 1, 2020, enterprises meeting the prescribed requirements are allowed to
use income under the capital accounts such as capital funds, external debts and overseas listings for
domestic payment without providing banks with authenticity certification materials case by case in
advance, to the extent that funds are used for true and law-compliant purposes and such enterprises
comply with the in-force administrative provisions on the use of income under the capital accounts.
According to the Notice of the State Administration of Foreign Exchange on Further Deepening
Reforms to Promote Cross-border Trade and Investment Facilitation (
ආɓӉଉʷ
) issued by the SAFE on December 4, 2023, foreign exchange
funds raised by domestic enterprises through overseas listings may be directly remitted into capital
account settlement accounts. Funds held in such accounts may be freely converted and utilized.
According to the Notice of the State Administration of Foreign Exchange on Issuing the
Guidelines for Foreign Exchange Operations under the Capital Account (2024 Edition) (
̮ ි၍
ˏ2024) (Hui Fa [2024] No. 12), promulgated
by the State Administration of Foreign Exchange on April 3, 2024 and implemented on May 6, 2024,
for domestic companies listed overseas, the raised funds shall in principle be repatriated to China in a
timely manner in either Renminbi or foreign currency. The use of such funds shall be consistent with
the content of the public disclosure documents such as this Document, corporate bonds issuance
documents, circulars to shareholders and resolutions of board of directors and shareholders’ meetings.
Domestic companies utilizing funds raised overseas for overseas direct investment, overseas securities
investment, or cross-border lending must comply with the relevant foreign exchange regulations.
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This appendix summarizes certain aspects of PRC laws and regulations relevant to the
Company’s operations and business. The PRC tax laws and regulations are discussed separately in
Appendix III—“Taxation and Foreign Exchange” to this Document. The primary purpose of this
appendix is to provide prospective investors with an overview of the principal legal and regulatory
provisions that are applicable to the Company. This appendix is not intended to contain all information
that may be important to prospective investors. For the discussion of the laws and regulations that are
relevant to the business of the Company, please refer to the “Regulatory Overview” for details.
PRC Laws and Regulations
PRC Legal System
The PRC legal system is based on the Constitution of the People’s Republic of China (
ʕശɛ
) (the “Constitution”), which was enacted by the National People’s Congress on
December 4, 1982, and last amended and implemented on March 11, 2018, and is made up of written
laws, administrative regulations, local regulations, separate regulations, departmental regulations of the
State Council, local government regulations, autonomous regulations, separate regulations of the
autonomous region, laws of special administrative regions, and international treaties to which the
Chinese Government is a signatory and other regulatory documents. Court decisions do not constitute
binding precedents, but can be used as judicial reference and guidance.
Pursuant to the Constitution and the Legislation Law of the People’s Republic of China (
ʕശ
) (promulgated by the National People’s Congress on March 15, 2000, and became
effective on July 1, 2000, and most recently amended and implemented on March 15, 2023) (the
“Legislation Law”), the National People’s Congress and its Standing Committee exercise the
legislative power of the state. The National People’s Congress has the power to enact and amend
criminal, civil, and other fundamental laws. The NPCSC is empowered to enact 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 shall
not be in conflict with the basic principles of such laws.
The State Council is the highest state administrative authority and has the authority to enact
administrative regulations in accordance with the Constitution and laws. On the premise of not
conflicting with the Constitution, laws, or administrative regulations, the people’s congresses and their
standing committees of provinces, autonomous regions, and municipalities directly under the central
government may enact local regulations based on the specific conditions and practical needs of their
respective administrative regions; the people’s congresses and their standing committees of the cities
divided into districts may, in light of the specific local conditions and actual needs, enact local
regulations regarding urban and rural development and management, ecological civilization
construction, historical and cultural protection, grassroots governance and other matters. Where there
are other legal provisions on the enactment of local regulations by cities divided into districts, such
provisions shall prevail. The 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 ethnic groups in the areas concerned.
The ministries and commissions of the State Council, the People’s Bank of China, and other
institutions prescribed by law may formulate rules within their respective authorities in accordance
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APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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with laws and the administrative regulations, decisions, and orders of the State Council. The people’s
governments of provinces, autonomous regions, municipalities directly under the central government,
cities divided into districts and autonomous regions may formulate rules in accordance with laws,
administrative regulations, and the relevant local regulations of the province, autonomous region, or
municipality directly under the central government.
According to the Resolution of the Standing Committee of the National People’s Congress on
Strengthening Legal Interpretation Work (
Ӕ
ᙄ), promulgated and implemented by the NPCSC on June 10, 1981, any provisions in laws or decrees
requiring further clarification of boundaries or supplementary regulations shall be interpreted by the
Standing Committee of the National People’s Congress or stipulated by decrees. The Supreme People’s
Court shall interpret all the issues concerning the specific application of laws in the judicial work of the
courts. The Supreme People’s Procuratorate shall interpret all the issues concerning the specific
application of laws in the procuratorial work of the procuratorate. Matters concerning the application of
other laws and decrees not pertaining to judicial or prosecutorial work shall be interpreted by the State
Council and the competent authorities. The State Council and its ministries and commissions are also
vested with the power to give interpretations of the administrative regulations and department rules which
they have promulgated. At the local level, the authority to interpret local laws and regulations rests with
the local legislative and administrative bodies that enact such laws and regulations.
PRC Judicial System
According to the Constitution and the Organic Law of the People’s Courts of the People’s
Republic of China (
) (promulgated by the Standing Committee of
the National People’s Congress on September 21, 1954, and most recently amended and implemented
on January 1, 2019), and the Organic Law of the People’s Procuratorates of the People’s Republic of
China (
) (promulgated by the Standing Committee of the
National People’s Congress on September 21, 1954, and most recently amended on October 26, 2018
and implemented on January 1, 2019), the People’s Courts of China are divided into the Supreme
People’s Court, local people’s courts at various levels, and other specialized people’s courts. Local
people’s courts are divided into three tiers: basic-level people’s courts, intermediate people’s courts,
and higher people’s courts. Basic-level people’s courts may establish several people’s tribunals based
on regional, population, and case circumstances. The Supreme People’s Court is the highest judicial
organ, responsible for supervising the judicial proceedings of local people’s courts at all levels and
specialized people’s courts. Higher-level people’s courts supervise the judicial proceedings of lower-
level people’s courts. The People’s Procuratorates of China are divided into the Supreme People’s
Procuratorate, local people’s procuratorates at various levels, and specialized people’s procuratorates
such as military procuratorates. The Supreme People’s Procuratorate is the highest procuratorial organ,
responsible for directing the work of local people’s procuratorates at all levels and specialized people’s
procuratorates. Higher-level people’s procuratorates direct the work of lower-level people’s
procuratorates.
The People’s Courts adopt the two-tier trial system, which means that the judgment or ruling of
the People’s Court of second instance is final. The People’s Procuratorate may file a protest with the
higher-level People’s Court according to law. If the parties concerned have not filed any appeals and
the People’s Procuratorate has not filed any protest within the stipulated period of time, the judgment
or ruling of the people’s court shall be final. Second-instance judgments or rulings rendered by the
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APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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Intermediate People’s Court, the Higher People’s Court and the Supreme People’s Court are final. The
first instance judgment or ruling of the Supreme People’s Court is also final. However, if the Supreme
People’s Court or a higher-level people’s court discovers that a final and binding judgment or ruling of
a lower-level people’s court that has already taken legal effect is indeed erroneous, or if the presiding
judge of a people’s court at any level believes that such a final and binding judgment or ruling is
indeed erroneous, it may be retried through judicial supervision procedures.
The Civil Procedure Law of the People’s Republic of China (
)
(the “Civil Procedure Law”), promulgated by the Standing Committee of the National People’s
Congress on March 8, 1982, and most recently amended on September 1, 2023 and implemented on
January 1, 2024, stipulates the provisions concerning the initiation of civil litigation, the jurisdiction of
people’s courts, the procedures to be followed in civil litigation, and the enforcement procedures for
civil judgments or rulings. Civil cases are generally heard by the local court in the province or
municipality where the defendant resides. The court with jurisdiction over civil litigation may be
explicitly agreed upon by the parties, but the court must be located in a place with a real connection to
the dispute, such as the domicile of the plaintiff or defendant, the place of contract performance or
execution, or the location of the subject matter of the litigation.
Foreign nationals and foreign enterprises shall have the same rights and obligations in litigation
as Chinese citizens and legal persons. Where the judicial system of a foreign court imposes restrictions
on the civil litigation rights of Chinese citizens and enterprises, Chinese courts shall apply the principle
of reciprocity to the civil litigation rights of citizens and enterprises of that country within Chinese
territory. Foreigners, stateless persons, foreign-invested enterprises or foreign organizations filing a
lawsuit or making a defense at a people’s court that are required to engage a lawyer to participate in
proceedings shall engage a Chinese lawyer. Where a request by a foreign court for assistance is
prejudicial to the sovereignty, security or public interest of China, the people’s court shall refuse the
request.
Civil judgments and rulings that have the force of law must be fulfilled by the parties
concerned. Where one party refuses to comply with the ruling or judgment, the other party may apply
to the People’s Court for enforcement. There are time limits of two years imposed on the right to apply
for such enforcement. The termination or suspension of the limitation period for applying for
enforcement of a judgment shall be governed by the provisions concerning the termination or
suspension of the limitation period for litigation.
Where a party applies for the enforcement of a legally binding judgment or ruling issued by a
People’s Court, and the person subject to enforcement or their property under the judgment are not
located within the territory of China, the applicant may directly apply to a foreign court with
jurisdiction for recognition and enforcement. Where the People’s Court, upon examination, finds that
the judgment or ruling neither violates the fundamental legal principles of Chinese law nor harms the
sovereignty, security, or public interests of the state, it shall rule to recognize its validity.
The Company Law, Trial Measures and Guidelines for the Articles of Association
A joint stock company incorporated in the PRC and seeking a listing on the Hong Kong Stock
Exchange is mainly subject to the following laws and regulations in the PRC:
The Company Law of the People’s Republic of China (
) (“the
Company Law”), promulgated by the Standing Committee of the National People’s Congress on
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APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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December 29, 1993 and came into effect on July 1, 1994. It was amended on December 25, 1999,
August 28, 2004, October 27, 2005, December 28, 2013, October 26, 2018, and December 29, 2023.
The newly amended Company Law was implemented on July 1, 2024.
The Trial Measures (
) and five supporting guidelines, which were promulgated by
the CSRC on February 17, 2023 and came into effect on March 31, 2023, applicable to direct or
indirect offshore share offering and listing of domestic companies.
Pursuant to the Trial Measures and its supporting guidelines, a domestic company that directly
issues shares for listing overseas shall formulate its articles of association in accordance with the
Guidelines for the Articles of Association of Listed Companies (
ˏ) (the
“Guidelines for the Articles of Association”), which shall replace the Mandatory Provisions for
Articles of Association of Companies to be Listed Overseas, which were no longer applicable as of
March 31, 2023. The Guidelines for the Articles of Association were promulgated by the CSRC on
December 16, 1997 and last revised on March 28, 2025.
The summary of the main clauses of the Company Law, the Trial Measures and the Guidelines
for the Articles of Association that are applicable to the Company is set out below.
General Provisions
A joint stock company is an enterprise legal person incorporated in accordance with the
Company Law, whose registered capital is divided into shares of equal par value. Shareholders are
liable to the company only to the extent of their shareholdings, while the company is liable for its debts
only to the extent of its entire assets.
A joint-stock company must comply with laws and administrative regulations when conducting
business operations. A company may invest in other companies with limited liabilities and companies
limited by shares and shall be liable only to the extent of the investment contribution to those
companies. Where laws stipulate that a company shall not be a contributor liable for the debts of its
invested enterprises on a joint and several basis, such provisions shall prevail.
Incorporation
A joint stock company may be incorporated by way of promotion or fund-raising. A joint-stock
company may be incorporated by a minimum of one and a maximum of 200 promoters, at least half of
whom must have their domicile in Chinese Mainland.
The subscription promoters of a joint-stock company shall convene the inaugural meeting
within 30 days after the capital is fully paid up, and shall notify all subscribers of the meeting date or
publish an announcement to that effect at least 15 days prior to the meeting. The inaugural meeting
may only be convened if subscribers holding at least 50% of the voting rights are present. The
procedures for convening and voting at the inaugural meeting of a joint-stock limited company
founded by means of promotion shall be stipulated in the agreement among the promoters.
Within 30 days after the conclusion of the inaugural meeting, the Board of Directors shall apply
to the registration authority for registration of the establishment of the joint stock company. Upon
issuance of the business license by the relevant registration authority, the company is formally
established and acquires legal person status.
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Registered Shares
According to the Company Law, shareholders may make capital contributions in cash, or in
kind, or with intellectual property rights, land use rights, equity or creditors’ rights, and other
non-monetary property that can be valued in money and can be transferred in accordance with the law.
According to the Trial Measures, domestic enterprises listing overseas may raise funds and
distribute dividends in foreign currency or RMB.
Pursuant to the Company Law, a joint stock company shall maintain a register of shareholders
detailing the following information: (1) the name or designation and domicile of each shareholder;
(2) the class and number of shares subscribed by each shareholder; (3) the serial number of the shares
(if issued in paper form); and (4) the date on which each shareholder acquired the shares.
Allocation and Issuance of Shares
A joint stock company shall issue shares under the principles of fairness and equality. Each
share of the same class shall have equal rights. Shares of the same class issued at the same time shall
be issued under the same condition and at the same price. The issue price of shares may be equal to, or
exceed, the par value, but shall not be less than the par value.
Domestic enterprises issuing shares and listing overseas shall file with the CSRC in accordance
with the Trial Measures, submitting materials such as filing reports and legal opinions, and providing
true, accurate, and complete information regarding shareholders and other relevant circumstances.
Increase of Share Capital
According to the Company Law, if a joint stock company issues new shares, the general
meeting shall pass a resolution on the class and amount of new shares, the issue price of the new
shares, the starting and ending dates of the issuance of the new shares and the class and amount of new
shares to be issued to existing shareholders. A company issuing shares to the public shall register with
the securities regulatory authority of the State Council and publish the relevant documents. Upon full
payment of the subscription price for shares issued by the company, a corresponding announcement
must be published.
Reduction of Share Capital
A company shall reduce its registered capital in accordance with the following procedures
prescribed by the Company Law:
(1) the company shall prepare a balance sheet and a list of property;
(2) a resolution to reduce the registered capital shall be adopted by the general meeting;
(3) the company shall inform its creditors within 10 days from the date on which the
resolution to reduce the registered capital is adopted and publish an announcement on the
newspaper or the National Enterprise Credit Information Publicity System within 30 days.
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(4) the creditors, within 30 days of receipt of the relevant notice, or within 45 days of the
announcement for those who have not received the relevant notice, shall have the right to
require the company to repay its debts in full or to provide corresponding security for such
debts; and
(5) the company shall apply for registration of changes with the company registration
authority.
When a company reduces its registered capital, it shall reduce the amount of capital
contribution or shares accordingly based on the proportion of capital contributions or shares held by
shareholders, unless otherwise provided by law or its Articles of Association.
Repurchase of Shares
Pursuant to the provisions of the Company Law, a company shall not acquire its own shares,
except in any of the following circumstances:
(1) to reduce the registered capital of the company;
(2) to merge with another company holding the company’s shares;
(3) to use the shares for employee stock ownership plan or share incentive plan;
(4) request by any shareholder of the company to acquire their shares due to their objection to
the general meeting resolution on the merger or division of the company;
(5) to use the shares for the conversion of corporate bonds issued by the company that are
convertible into shares; and
(6) necessary for the listed company to safeguard the value of the company and shareholders’
rights and interests.
The company’s acquisition of its own shares under the circumstances stipulated in items (1) or
(2) above shall be resolved by the general meeting; the acquisition of the company’s shares by the
company under the circumstances stipulated in items (3), (4) or (5) above may be resolved by the
Board meeting attended by at least two-thirds of the Directors in accordance with the Articles of
Association or the authorization of the general meeting.
After the company acquires its own shares in accordance with the above provisions, in the case
of item (1), the shares shall be canceled within 10 days from the date of acquisition; in the case of
items (2) or (4), the shares shall be transferred or canceled within 6 months; in the case of items (3), (5)
or (6), the company shall not hold its own shares in the aggregate in a number that exceeds 10% of the
total number of the issued shares of the company, and shall transfer or cancel such shares within 3
years.
Transfer of Shares
Shares held by shareholders are legally transferable. Pursuant to the Company Law, transfer of
shares by shareholders of a joint stock company shall be carried out at a legally established securities
exchange or in other ways stipulated by the State Council. If the laws, administrative regulations or the
securities regulatory authorities under the State Council provide otherwise for the registration of
changes in the register of shareholders of a listed company, the relevant provisions shall apply.
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Pursuant to the Company Law, shares that have been issued before the public offering shall not
be transferred for a period of one year commencing from the date on which the company’s shares are
listed and traded on a stock exchange. The directors and senior management shall declare to the
company the shares they hold and any changes therein. The shares transferred each year during the
term of office determined when they take up their posts shall not exceed 25% of the total shares they
hold in the company. The shares of the company held by directors and senior officers shall not be
transferred within 1 year as of the listing date of the shares of the company, and the above-mentioned
persons are not allowed to transfer their shares in the company within six months after their departure.
If the shares are pledged within the period of restriction on transfer prescribed by laws and
administrative regulations, the pledgee shall not exercise the pledge right within such period.
Shareholders
According to the Company Law and the Guidelines for the Articles of Association, the rights of
shareholders include:
(1) to receive dividends and other distributions of interests in proportion to the number of
shares held;
(2) to request to hold, convene, preside over a general meeting, attend the general meeting in
person or by proxy, and exercise the corresponding voting rights in accordance with the
laws;
(3) to supervise the operation of the company and to make suggestions or inquiries;
(4) to transfer, donate or pledge the shares held by them in accordance with laws,
administrative regulations and the Articles of Association;
(5) to inspect and copy the Articles of Association, register of shareholders, minutes of
general meetings, resolutions of meetings of the board of directors, financial and
accounting reports, and eligible shareholders may inspect the company’s accounting books
and accounting vouchers;
(6) to participate in the distribution of the remaining property of the company according to the
proportion of shares they hold when the company is terminated or liquidated;
(7) to request the company to purchase shares held by shareholders who raise objection to the
resolution on the merger or division of the company as adopted by the general meeting;
(8) other rights stipulated by laws, administrative regulations, departmental rules, and the
Articles of Association.
The obligations of shareholders include abiding by the Articles of Association, paying the share
capital for the shares they have subscribed for, being liable to the company to the extent of the shares
they have purchased, and fulfilling other obligations of shareholders as stipulated in the Articles of
Association.
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General Meeting
The general meeting is the organ of authority of the company, which exercises its powers in
accordance with the Company Law. The general meeting may exercise the following powers:
(1) to elect and replace Directors and decide matters relating to the remuneration of Directors;
(2) to examine and approve reports of the Board;
(3) to examine and approve the company’s profit distribution plan and loss recovery plan;
(4) to resolve on the increase or reduction of the company’s registered capital;
(5) to resolve on the issuance of corporate bonds;
(6) to resolve on the merger, division, dissolution, liquidation of the company or change of
company form;
(7) to amend the Articles of Association;
(8) other powers as stipulated by the Articles of Association.
The general meeting can authorize the board of directors to make resolutions on the issuance of
corporate bonds.
Pursuant to the Company Law and the Guidelines for the Articles of Association, general
meetings are classified into annual general meetings and extraordinary general meetings. The annual
general meetings shall be convened once a year, and shall be held within six months after the prior
fiscal year ends.
In the event of any of the following circumstances, the company shall convene an extraordinary
general meeting within two months from the date of occurrence of the fact:
(1) the number of directors is less than two-thirds of the number prescribed in the Company
Law or the Articles of Association;
(2) the company’s losses which are not covered amount to one-third of the total share capital;
(3) shareholders holding individually or collectively at least 10% of the company’s shares
(including preferred shares with restored voting rights, etc.) make a request;
(4) the board of directors considers it necessary;
(5) the audit committee proposes to convene the meeting;
(6) other circumstances set out in the relevant laws, administrative regulations, department
rules or the Articles of Association.
According to the Company Law and the Guidelines for the Articles of Association, a general
meeting shall be convened by the board of directors and shall be presided over by the chairman of the
board. Where the chairman is unable to or does not perform his duties, the meeting shall be presided
over by the vice-chairman. Where the vice chairman is unable to or does not perform his duties, the
meeting shall be presided over by one director jointly appointed by a majority of all the directors. If the
board of directors is unable or fails to convene the general meeting, the audit committee shall convene
and preside over the meeting in a timely manner. If the audit committee does not convene and preside
over the meeting, the shareholders who individually or together hold at least 10% of the shares for
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at least 90 consecutive days may convene and preside over the meeting by themselves. In the event that
shareholders who individually or collectively hold at least 10% of the company’s shares request to
convene an extraordinary general meeting, the Board of Directors or the audit committee shall make a
decision on whether or not to convene an extraordinary general meeting within 10 days from the date
of receipt of the request, and shall reply to the shareholders in writing.
Pursuant to the Company Law and the Guidelines for the Articles of Association, a general
meeting shall be convened by notifying the shareholders of the time and place of the meeting and the
matters to be considered 20 days prior to the meeting, and an extraordinary general meeting shall be
convened by notifying the shareholders 15 days prior to the meeting. The shareholders holding at least
1% of the shares of the company individually or collectively may raise a provisional proposal and
submit it to the Board in writing 10 days before the general meeting is held. The Board shall notify the
shareholders within 2 days after the receipt of the proposal and submit the provisional proposal to the
general meeting for deliberation, except that the provisional proposal is in violation of the provisions of
the laws, administrative regulations or the Articles of Association of the company or does not fall
within the terms of reference of the general meeting. The company shall not increase the percentage of
shares held by a shareholder required to make a provisional proposal. The company that makes a
public offering of its shares shall give the notice stipulated in the preceding paragraph by means of a
public announcement. The general meeting shall not make resolutions on matters not specified in the
notice.
According to the Company Law, each share held by shareholders attending a general meeting
shall carry one voting right, except for shareholders holding other classes of shares. The company’s
own shares held by the company shall not have the voting right.
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 at the general meeting.
Under the accumulative voting system, in the election of Directors at the general meeting, each share
shall be entitled to vote equivalent to the number of Directors to be elected at the general meetings and
shareholders may consolidate their voting rights when casting a vote.
Pursuant to the Company Law, resolutions adopted by the general meeting shall be passed by a
majority of the voting rights held by shareholders present at the meeting. However, resolutions
concerning amendments to the Articles of Association, increases or decreases in registered capital, as
well as resolutions on company’s mergers, divisions, dissolution, or changes in corporate form shall be
passed by a majority of two-thirds or more of the voting rights held by shareholders present at the
meeting.
The general meeting shall prepare minutes regarding the decisions on matters considered at the
meeting, which shall be signed by the chairman of the meeting and directors attending the meeting.
The minutes shall be kept together with the shareholders’ attendance register and the proxy forms.
Board of Directors
A joint stock company shall have a board of directors. However, a joint-stock company that is
relatively small in scale or has a limited number of shareholders may choose not to establish a board of
directors. Instead, it may appoint a single director to exercise the powers and duties of the board of
directors as stipulated in the Company Law. Where the board of directors of a company consists of
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three or more members, its membership may include the employee representatives. The employee
representatives in the board shall be democratically elected by the workers and staff members of the
company through the congresses or assemblies of the staff and workers or other forms.
The term of office of the directors is stipulated by the Articles of Association, but shall not
exceed 3 years. A director may continue to serve his post if he is re-elected upon the expiration of his
term. Where a new elect is not yet available upon expiration of a director’s term, or the number of the
directors on the board is less than the quorum due to the resignation of a director within his term, such
director, before the newly-elected director takes his office, shall continue the performance of his duties
in accordance with laws, administrative regulations and the Articles of Association. A director who
resigns shall notify the company in writing, and the resignation shall take effect on the date the
company receives the notice. However, where the circumstances specified in the preceding paragraph
exist, the director shall continue to perform his duties.
Pursuant to the Company Law, the Board of Directors may exercise the following powers:
(1) to convene the general meeting and report to the general meeting on its work;
(2) to implement the resolutions of the general meeting;
(3) to decide on the company’s operating plan and investment plan;
(4) to formulate the profit distribution plan and loss recovery plan of the company;
(5) to formulate the plan for the company’s increase or reduction of registered capital and the
issuance of corporate bonds;
(6) to formulate the plan for the company’s merger, division, dissolution or change of the
company form;
(7) to decide on the establishment of the internal management organization of the company;
(8) to decide on the appointment or dismissal of the manager of the company and his
remuneration, and decide on the appointment or dismissal of the deputy manager and the
chief financial officer of the company based on the nomination of the manager and their
remunerations;
(9) to formulate the basic management system of the company; and
(10) other powers as stipulated in the Articles of Association or as conferred by the general
meeting.
Limitations on the powers of the board of directors in the Articles of Association shall not be
imposed against a bona fide counterparty.
Under the Company Law, a company may establish an audit committee composed of directors
within its board of directors in accordance with the provisions of its Articles of Association to exercise
the powers of the supervisory committee. The company may choose not to establish a supervisory
committee or appoint supervisors. The company may establish other committees within the board of
directors in accordance with the provisions of the Articles of Association.
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The board of directors shall hold meetings at least twice a year, and notice shall be given to all
directors and members of the audit committee 10 days in advance. Shareholders holding at least
one-tenth of the voting rights, at least one-third of directors, or the audit committee may propose to
convene an extraordinary meeting of the board of directors. The chairman of the Board shall convene
and preside over a Board meeting within 10 days after receiving the proposal. Where an extraordinary
meeting of the Board of Directors is to be held, the method and time limit for notification for
convening the extraordinary meeting may be prescribed separately.
A board meeting shall not be held unless more than half of the directors are present. A
resolution made by the Board shall be approved by more than half of all the Directors. In the voting
process, one director shall represent one vote. The board of directors shall prepare minutes regarding
the decisions on matters considered at the meeting, which shall be signed by the directors attending the
meeting.
Directors shall attend the Board meeting in person. If a director is unable to attend the meeting
for some reason, he may entrust another director in writing to attend the meeting on his behalf,
provided that the power of attorney shall specify the scope of authorization. Directors shall be liable
for the resolutions of the Board.
In accordance with the Company Law, none of the following persons may serve as a director of
a company:
(1) a person without civil capacity or with restricted civil capacity;
(2) a person who was sentenced for corruption, bribery, embezzlement, misappropriation, or
disruption of socialist market economic order, or who was deprived of his political rights
due to a criminal offense, and not more than five years has elapsed since the completion of
the sentence, or where a suspension of sentence is granted, not more than two years has
elapsed since the expiry date of the suspension period;
(3) a person who acted as a director, or factory director or manager of a bankrupt or liquidated
company or enterprise and bore personal liability for the bankruptcy or liquidation of such
company or enterprise, where three years have not lapsed following the date of completion
of such bankruptcy or liquidation;
(4) a person who was the legal representative of a company or enterprise which had its
business license revoked and had been ordered to shut down due to violation of the laws
and who was personally liable, where three years have not lapsed following the date of the
revocation of business license or the date of order for shutdown; and
(5) a person who has been listed as a dishonest person subject to enforcement by the people’s
court because he incurred debts of a large amount that have not been settled by the due
date.
Elections, delegation or appointments of Directors who fall into any of the above circumstances
shall be invalid. In the event that the circumstances as stipulated above arise during the term of office
of any director, the company shall dismiss the relevant director.
In addition, the Guidelines for the Articles of Association further stipulate other circumstances
under which individuals may not serve as directors of a company, including: (1) persons subject to a
securities market ban imposed by the CSRC whose ban period has not yet expired; or (2) persons
prohibited from serving as directors under other laws, administrative regulations, or departmental rules.
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According to the Company Law, the board of directors shall have one chairman and may have a
vice-chairman. The chairman and the vice chairman shall be elected by a majority of all the Directors.
The chairman shall convene and preside over Board meetings and examine the implementation of
Board resolutions. The vice chairman shall assist the chairman in his duties.
Audit Committee
Pursuant to the Company Law, where a joint stock company does not establish a supervisory
committee, the audit committee shall consist of three or more members. A majority of its members
shall not hold any position in the company other than that of director, and shall not have any
relationship with the company that may affect their independent and objective judgment.
Employee representatives on the board of directors may serve as members of the audit
committee. Resolutions of the Audit Committee shall be adopted by a majority vote of all members.
Voting on resolutions of the Audit Committee shall be conducted on a one-person-one-vote basis.
Except as otherwise provided for in the Company Law, the rules of deliberation and voting procedures
of the Audit Committee shall be stipulated by the Articles of Association.
Manager and Senior Officers
In accordance with the Company Law, a company shall have a manager, who shall be
appointed or dismissed by the board of directors. The manager shall be accountable to the Board and
exercise his powers in accordance with the provisions of the Articles of Association or as delegated by
the Board. The manager may attend board meetings but does not have voting rights.
In accordance with the Company Law, senior officers shall refer to the manager, deputy
manager, chief financial officer, the secretary of the board of directors of a listed company and any
other personnel specified in the Articles of Association.
Duties of Directors, General Managers, and Other Senior Officers
Directors and senior officers shall comply with laws, administrative regulations, and the
Articles of Association.
Directors and senior officers have a duty of loyalty to the company; they shall take measures to
avoid conflicts between their own interests and the interests of the company, and they shall not make
use of their powers to gain undue benefits. Directors and senior officers have a duty of diligence to the
company, and shall perform their duties with the reasonable care normally expected of a manager in
the best interests of the company.
If the controlling shareholders or actual controllers do not serve as directors of the company but
actually execute the affairs of the company, the provisions of the preceding paragraph shall apply.
If a director or senior officer causes detriment to the company while performing his duties in
violation of laws, administrative regulations or the Articles of Association, he shall be liable for the
loss so caused.
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Directors or senior officers shall attend general meetings and respond to shareholders’
inquiries.
In the event of a violation of laws, administrative regulations or the provisions under the
Articles of Association by a director or senior officer in performing his duties resulting in loss to the
company, the shareholders that solely or collectively hold 1% or more shares of the company for a
continuous period of 180 days have the right to make a written request to the Audit Committee to file a
litigation with a people’s court. Upon receipt of the written request made by the shareholders as
stipulated in the preceding paragraph, in case the Audit Committee or the Board of Directors refuses to
file a lawsuit or fails to file a lawsuit within 30 days from receipt of such request, or under urgent
circumstances that failure in filing a lawsuit immediately will have the company suffer from
irreparable damages, the aforesaid shareholders shall have the right to file a lawsuit to a people’s court
directly in their own name for protection of the company’s interests. In the event that any other person
infringes upon the legal rights and interests of the company and causes losses thereto, the aforesaid
shareholders may file a lawsuit to a people’s court in accordance with the provisions of the preceding
paragraph. In the event of violation of laws, administrative regulations or provisions under the Articles
of Association by Directors or senior officers in performing their duties resulting in damage to the
shareholders’ interest, the shareholders may file a litigation with a people’s court.
If the directors or senior officers of a wholly-owned subsidiary of the company violate laws,
administrative regulations, or the Articles of Association in performing their duties and cause losses to
the company, or if others infringe upon the legitimate rights and interests of the wholly-owned
subsidiary of the company and cause losses, shareholders of the limited liability company or
shareholders of the joint stock company who have held, individually or jointly, at least 1% of the
company’s shares for 180 or more consecutive days may submit a written request to the audit
committee or the board of directors of the wholly-owned subsidiary to file a lawsuit with the people’s
court or to file a lawsuit directly with the people’s court in their own name.
Finance, Accounting and Profit Distribution
According to the Company Law, the company shall, in accordance with the provisions of laws,
administrative regulations and rules of the financial department under the State Council, establish its
financial and accounting systems.
When the company distributes the after-tax profits of the current year, it shall allocate 10% of
the profits into the statutory surplus reserve. However, no further allocation is required if the aggregate
amount of the statutory surplus reserve exceeds 50% of the registered capital of the company. If the
company’s statutory surplus reserve is not sufficient to cover the company’s losses in the previous
year, such losses shall first be covered with the profit of the current year before any allocation is made
to the statutory surplus reserve. After the company has allocated the statutory surplus reserve from its
after-tax profits, it may, upon a resolution made by the general meeting, allocate a discretionary surplus
reserve from its after-tax profits. After the company has made up for its losses and set aside its
reserves, the balance of the after-tax profits shall be distributed to the shareholders in proportion to
their respective capital contributions, unless the Articles of Association provide otherwise. The
company’s own shares held by the company shall not be entitled to any distribution of profit.
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If the company distributes profits to shareholders in violation of the provisions of the Company
Law, the shareholders shall return the profits distributed in violation of the provisions to the company.
If any loss is caused to the company, the shareholders and the responsible directors and senior officers
shall be liable for compensation.
If the general meeting resolves to distribute profits, the board of directors shall do so within six
months from the date of the general meeting resolution. The reserves of the company shall be used to
cover the company’s losses, expand its production and operation or to increase its registered capital. To
make up for the company’s losses, the company shall first use the discretionary surplus reserve and
statutory surplus reserve; if they are insufficient, the capital reserve can be used in accordance with the
regulations. Where the statutory surplus reserve is converted to increase the registered capital of the
company, the remainder of the statutory surplus reserve shall not be less than 25% of the registered
capital of the company before the conversion is conducted.
The company shall not establish separate accounting books other than the statutory ones. The
company’s funds shall not be deposited in any accounts opened in the name of any individual.
After the company reduces its registered capital in accordance with the provisions of the
Company Law, it may not distribute profits until the accumulated amount of the statutory surplus
reserve and discretionary surplus reserve reaches 50% of its registered capital.
Engagement and Dismissal of Accounting Firms
Pursuant to the Company Law, the appointment or dismissal of accounting firms responsible
for the auditing of the company shall be determined by the general meeting, the Board or the Audit
Committee in accordance with the Articles of Association. The accounting firm should be allowed to
make representations when the general meeting, board of directors or audit committee conducts a vote
on the dismissal of the accounting firm. The company shall provide to the accounting firm appointed
true and complete accounting vouchers, accounting books, financial accounting reports and other
accounting materials, and shall not refuse to provide, hide or falsely report such materials.
Amendment to the Articles of Association
Pursuant to the Company Law, a resolution to amend the Articles of Association at a general
meeting of the company shall be passed by at least two-thirds of the voting rights held by the
shareholders present at the meeting. According to the Guidelines for the Articles of Association, where
any amendment to the Articles of Association resolved by the general meeting is subject to
examination and approval by the competent authority, such amendment shall be submitted to the
competent authority for approval; where matters concerning company registration are involved,
registration of the changes shall be processed in accordance with the law. Where amendments to the
Articles of Association constitute information required to be disclosed under laws and regulations, they
shall be announced in accordance with the relevant provisions.
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Dissolution and Liquidation
According to the Company Law, a company shall be dissolved if:
(1) the business term as specified in the Articles of Association expires or any other
dissolution event occurs as specified in the Articles of Association;
(2) the general meeting resolves to dissolve the company;
(3) the company is required to be dissolved due to merger or division of the company;
(4) the business license of the company is revoked, or the company is ordered to be closed or
canceled in accordance with law; or
(5) shareholders holding at least 10% of the voting rights of the company request the people’s
court to dissolve the company, on the grounds that the company suffers significant
hardship in its operation and management that cannot be resolved through other means,
and the ongoing existence of the company would bring significant losses to the interests of
shareholders.
If the company has the reasons for dissolution specified in the above paragraph, it shall
publicize the reasons for dissolution through the National Enterprise Credit Information Publicity
System within 10 days.
If the company is in the situations of the above item (1) or (2) and has not yet distributed its
property to its shareholders, it may survive by amending the Articles of Association or by a resolution
of the general meeting.
Amendments to the Articles of Association or resolutions of general meeting made in
accordance with the provisions of the preceding paragraph shall be approved by at least two-thirds of
the voting rights held by the shareholders attending the general meeting.
If the company is dissolved under item (1), (2), (4) or (5) above, it shall be liquidated. The
directors shall be the liquidation obligors of the company, and shall form a liquidation committee to
liquidate the company within 15 days from the date of occurrence of any event leading to dissolution.
The liquidation committee shall be composed of the directors, except as otherwise provided in the
Articles of Association or as otherwise elected by the resolution of the general meeting.
Where the liquidation obligors fail to perform their liquidation obligations in a timely manner,
thereby causing losses to the company or the creditors, they shall be liable for compensation.
The liquidation committee shall exercise the following powers during liquidation:
(1) to liquidate the company’s assets, and prepare a balance sheet and a schedule of assets,
respectively;
(2) to notify creditors by notice or announcement;
(3) to deal with and liquidate any outstanding business of the company;
(4) to pay all outstanding taxes as well as taxes arising during the liquidation process;
(5) to clear the claims and debts;
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(6) to distribute the company’s remaining assets after paying off all debts; and
(7) to participate in civil litigation on behalf of the company.
The liquidation committee shall, within 10 days of its establishment, notify the company’s
creditors, and make an announcement on the newspapers or the National Enterprise Credit Information
Publicity System within 60 days.
The creditors shall, within 30 days of the receipt of the notice, or within 45 days following the
announcement if the creditors have not received such notice, declare their claims to the liquidation
committee.
When declaring the claims, the creditors shall specify the relevant matters about the claims and
provide evidences. The liquidation committee shall register the claims. During the period of
declaration of claims, the liquidation committee shall not repay any debts to the creditors.
After the liquidation committee has thoroughly examined the company’s assets and prepared a
balance sheet and schedule of assets, it shall formulate a liquidation plan and submit such plan to the
general meeting or the people’s court for confirmation. The remaining property of the company after
paying the liquidation expenses, wages owed to employees, social security fees and statutory
compensation, outstanding taxes and debts of the company shall be distributed in proportion to the
shares held by shareholders. During the liquidation period, the company still exists but shall not carry
out any business activities not related to liquidation. The property of the company shall not be
distributed to its shareholders before it has made the payments as specified in the provisions of the
preceding paragraph.
Where the liquidation committee discovers upon examination of the company’s assets and
preparation of the balance sheet and schedule of assets that the company’s assets are insufficient to
repay its debts, an application shall be made to the People’s Court for bankruptcy liquidation. After the
people’s court accepts the bankruptcy application, the liquidation committee shall hand over the
liquidation affairs to the bankruptcy administrator appointed by the people’s court.
The liquidation committee members shall perform the duties of liquidation and bear the
obligations of loyalty and diligence. Where a member of the liquidation committee causes losses to the
company due to his/her failure in performing the liquidation duties, he/she shall be liable for
compensation; where losses are caused to the creditors due to intent or gross negligence, he/she shall
be liable for compensation.
After the liquidation of a company is completed, the liquidation committee shall prepare a
liquidation report and submit the report to the general meeting or the people’s court for confirmation,
and shall submit it to the company registration authority to apply for cancellation of the registration of
the company.
If the company has not incurred any debts during its existence or has paid off all its debts, it
may, upon the commitment of all the shareholders, be deregistered through simple procedures in
accordance with relevant regulations. If the company is deregistered through simple procedures, it shall
be announced through the national enterprise credit information publicity system, and the
announcement period shall not be less than 20 days. If there is no objection upon the expiration of the
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period of announcement, the Company may apply to the company registration authority for
cancellation of the company registration within 20 days.
Where the company is deregistered through simple procedures and the shareholders make an
untruthful commitment, they shall bear joint and several liability for the debts incurred before the
cancellation of registration.
Where the company is revoked of its business license, ordered to close down or canceled, and
fails to apply to the company registration authority for cancellation of company registration within
three years, the company registration authority may make a public announcement through the national
enterprise credit information publicity system, and the announcement period shall not be less than 60
days. If there is no objection upon the expiration of the announcement period, the company registration
authority may cancel the registration of the company. Where the registration of the company is
canceled in accordance with the provisions of the preceding paragraph, the liability of the original
shareholders and liquidation obligors of the company shall not be affected.
Overseas Listing
According to the Trial Measures, the securities refer to shares, depository receipts, corporate
bonds convertible into shares or other securities of equity nature issued and listed directly or indirectly
outside China by domestic enterprises. Direct Overseas Issuance and Listing of domestic enterprises
refers to the overseas issuance and listing by joint stock companies registered and established in China.
Indirect Overseas Issuance and Listing of domestic enterprises refers to the overseas issuance and
listing by enterprises that conduct principal business activities in China, in the name of enterprises
registered overseas, based on the equity, assets, income or other similar interests of the domestic
enterprises.
The Trial Measures also stipulate the conditions for overseas issuance and listing. Under any of
the following circumstances, overseas issuance and listing are not allowed:
(1) Laws, administrative regulations, or relevant national provisions expressly prohibit listing
and raising capital;
(2) Overseas Issuance and Listing may endanger national security, as reviewed and
determined by the relevant competent departments under the State Council according to
law;
(3) The domestic enterprise or its controlling shareholder or actual controller(s) have
committed a crime of corruption, bribery, embezzlement or misappropriation of property
or disrupting the order of the socialist market economy within the last three years;
(4) The domestic enterprise is under investigation for suspected crimes or major violations of
laws or regulations, and there is no clear conclusion;
(5) There is a major dispute over the ownership of the equity held by the controlling
shareholder(s) or the shareholder(s) controlled by the controlling shareholder(s) or the
actual controller(s).
In addition, according to the Trial Measures, when Chinese domestic enterprises apply to the
competent overseas regulatory authorities or overseas stock exchanges for an initial public offering, the
issuer must file with the CSRC within three working days after submitting the application.
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The issuer shall report the following major events that occur after overseas issuance and listing
to the CSRC within 3 working days from the date of the occurrence and announcement of the relevant
events:
(1) change of control;
(2) being investigated or punished by overseas securities regulatory authorities or the relevant
competent authorities;
(3) change of listing status or the board of listing;
(4) voluntary or forced termination of the listing.
According to the Provisions on Strengthening Confidentiality and Archives Administration of
Overseas Securities Offering and Listing by Domestic Companies (
̋੶ྤʫΆุྤ̮೯БᗇՎձ
) promulgated by the CSRC, the Ministry of Finance, the
National Administration of State Secrets Protection, and the National Archives Administration on
February 24, 2023, and effective as of March 31, 2023, where a domestic enterprise provides or
publicly discloses documents and materials involving State secrets or work secrets of State organs to
relevant securities firms, securities service institutions, overseas regulatory authorities, or other entities
and individuals, the enterprise in question shall report to the competent authorities with the power of
examination and approval for approval according to law, and file with the confidentiality
administrative authorities at the same level. Working papers generated within China by securities
companies and securities service providers that provide corresponding services for domestic
enterprises issuing securities and listing overseas shall be stored within China. Cross-border transfers
must undergo approval procedures in accordance with relevant national regulations.
Loss of Share Certificates
If the registered share certificate is stolen, lost or destroyed, the shareholder may request the
people’s court to declare the share certificate invalid in accordance with the public notice procedure as
stipulated in the Civil Procedure Law. After the people’s court has declared the share certificate
invalid, the shareholder may apply to the company for a replacement of the share certificate.
Merger and Division
According to the Company Law, in the case of a merger, the parties to the merger shall enter
into a merger agreement and prepare a balance sheet and a schedule of assets. The company shall
inform its creditors within 10 days and publish an announcement on the newspaper or the National
Enterprise Credit Information Publicity System within 30 days after the resolution approving the
merger has been adopted. Creditors shall, within 30 days since the date of receiving the notice, or
creditors who do not receive the notice shall, within 45 days since the date of the public announcement,
be entitled to require the company to pay off its debts in full or to provide a corresponding guarantee.
When companies merge, the claims and debts of all the parties to the merger shall be succeeded
to by the company that continues to exist after the merger or by the newly established company. In the
case of division of a company, its property shall be divided accordingly, and a balance sheet and a
schedule of assets shall be prepared. The company shall inform its creditors within 10 days and publish
an announcement on the newspaper or the National Enterprise Credit Information Publicity System
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APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
within 30 days after the resolution approving the division has been adopted. Debts owed by the
company prior to the division shall be assumed by the companies in existence after the division jointly
and severally, except as otherwise stated in the agreement entered into between creditors and the
company for debt service prior to the division.
Securities Laws, Regulations, and Regulatory Framework of China
A series of regulations relating to the issuance and trading of shares and information disclosure
have been enacted in China. In October 1992, the State Council set up the Securities Committee of the
State Council and the CSRC. The Securities Committee is responsible for coordinating the drafting of
securities regulations, formulating securities-related policies, planning the development of securities
markets, directing, coordinating and supervising all securities-related institutions in the PRC and
administering the CSRC. The CSRC serves as the regulatory enforcement body of the Securities
Committee. It is responsible for drafting securities market regulations, supervising securities firms,
regulating public offerings of Chinese companies’ securities domestically or overseas, standardizing
securities trading, collecting securities-related statistical data, and conducting relevant research and
analysis. In April 1998, the State Council consolidated the two departments and reorganized the CSRC.
The State Council promulgated and implemented the Interim Regulations on the Administration
of Stock Issuance and Trading(
၍ଣᅲБૢԷ) on April 22, 1993. These regulations
stipulate the procedures for applying for and obtaining approval for public offerings of stocks, the
issuance and trading of stocks, the acquisition of listed companies, the custody, settlement, and transfer
of stocks, the disclosure of information by listed companies, investigations, penalties, and dispute
resolution.
The Securities Law was promulgated by the Standing Committee of the National People’s
Congress on December 29, 1998, and came into effect on July 1, 1999. It was subsequently amended
on August 28, 2004; October 27, 2005; June 29, 2013; August 31, 2014; and December 28, 2019. The
newly amended Securities Law was implemented on March 1, 2020. The Securities Law is China’s
first securities law, implementing centralized and unified supervision and management over securities
market activities in China. The Securities Law consists of 14 chapters and 226 articles, covering
securities issuance, securities trading, acquisitions of listed companies, stock exchanges, securities
firms, securities registration and settlement institutions, and the responsibilities of securities regulatory
authorities. Article 224 of the Securities Law provides that domestic enterprises that directly or
indirectly issue securities overseas or list and trade their securities overseas shall comply with the
relevant provisions of the State Council. At present, the issuance and trading of overseas issued
securities (including shares) are mainly regulated by rules and regulations promulgated by the State
Council and the CSRC.
Arbitration and Enforcement of Arbitration Awards
The Arbitration Law of the People’s Republic of China (the “Arbitration Law”) was
promulgated by the Standing Committee of the National People’s Congress on August 31, 1994, and
came into effect on September 1, 1995. It was subsequently amended on August 27, 2009,
September 1, 2017, and September 12, 2025. The newly amended Arbitration Law will be
implemented on March 1, 2026. The Arbitration Law applies to foreign economic disputes where the
parties have entered into a written agreement to submit the matter to arbitration before an arbitration
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APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
commission constituted in accordance with the Arbitration Law. Before the China Arbitration
Association formulates its arbitration rules, the Arbitration Commission may formulate provisional
rules for arbitration in accordance with the relevant provisions of the Arbitration Law and the Civil
Procedure Law. If the parties choose to resolve disputes through arbitration, and either party files a
lawsuit with the court, the court will not accept it.
According to the Arbitration Law, the arbitration award shall be final and binding on the parties to
the arbitration. The parties shall comply with the arbitration award. Where one party fails to comply with an
arbitration award, the other party may apply to the people’s court for enforcement in accordance with the
relevant provisions of the Civil Procedure Law. The People’s Court may refuse to enforce an arbitration
award made by an arbitration commission if it involves procedural irregularities (including irregularities in
the composition of the arbitration commission or the award ruling on matters beyond the scope of the
arbitration agreement or the jurisdiction of the arbitration commission). Where a legally binding arbitration
award rendered by a foreign-related arbitration commission is sought to be enforced by the parties, and the
person subject to enforcement or its property is not within the territory of China, the parties shall apply
directly to the competent foreign court for recognition and enforcement.
Pursuant to the Arrangement of the Supreme People’s Court Concerning Reciprocal Enforcement
of Arbitral Awards between the Chinese Mainland and the Hong Kong Special Administrative
Region(
τર) promulgated by the
Supreme People’s Court on January 24, 2000, which came into effect on February 1, 2000, and the
Supplementary Arrangement of the Supreme People’s Court Concerning Reciprocal Enforcement of
Arbitral Awards between the Chinese Mainland and the Hong Kong Special Administrative
Region(
໾̂τર) promulgated on
November 26, 2020 and coming into force on November 27, 2020, awards made by arbitral institutions in
Chinese Mainland are enforceable in Hong Kong and Hong Kong arbitral awards are enforceable in
Chinese Mainland.
Pursuant to the Arrangement of the Supreme People’s Court 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(
ʝႩ̙ձ
τર), promulgated by the Supreme People’s Court on January 25, 2024, and
effective as of January 29, 2024, except for judgments in civil and commercial cases that are not
applicable under Article 3 of the Arrangement, judgments that may be recognized and enforced in both
places are those rendered in the Mainland and Hong Kong on or after January 29, 2024. The judgment
content subject to mutual recognition and enforcement includes monetary and non-monetary awards.
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
This appendix contains a summary of the principal provisions of the Articles of Association
that will apply following the issuance and listing. This Appendix is mainly designed to provide
prospective investors with an overview of the Articles of Association of the Company, therefore, it
may not contain all the information that is important to prospective investors.
Issuance of Shares
The Shares of the Company shall be issued based on the principle of openness, fairness and
impartiality, and shall rank pari passu in all respects with the Shares of the same class. Shares of the
same class issued at the same time shall be issued under the same condition and at the same price; the
same price shall be paid for each share subscribed for by any entities or individuals.
Share Increase, Decrease, Repurchase and Transfer
Increase and Decrease of Shares
In accordance with laws and regulations, the Company may, based on its operating and
development needs and the resolution of the general meeting, increase its capital through the following
methods:
(I) issuing Shares to non-specific investors;
(II) issuing Shares to specific investors;
(III) distributing bonus Shares to its existing Shareholders;
(IV) converting capital reserve into share capital;
(V) other methods prescribed by laws, administrative regulations, and the securities
regulatory authorities of the place where the Company’s Shares are listed.
The Company may decrease its registered capital. The Company may decrease its registered
capital in accordance with the procedures prescribed in the Company Law, other relevant regulations,
and its Articles of Association.
Repurchase of Shares
The Company shall not acquire its own Shares, except in any of the following circumstances:
(I) to reduce the registered capital of the Company;
(II) to merge with other companies that hold the Shares of the Company;
(III) to use the Shares for Employee Stock Ownership Plan or as equity incentive;
(IV) to request the Company to acquire their Shares held by the Shareholders who raise
objection to the resolution on the merger or division of the Company as adopted by the
general meeting;
(V) to use the Shares to satisfy the conversion of corporate bonds which are convertible into
Shares issued by the listed company;
(VI) to safeguard the value of the Company and Shareholders’ equity as the listed company
deems necessary.
Where the Company acquires its own Shares, a public and centralized trading method or other
methods recognized by laws, administrative regulations and the securities regulatory authorities at the
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
place where the Company’s Shares are listed shall be adopted. If the Company acquires its own Shares
due to circumstances described in Item (III), (V) or (VI) above, such acquisition shall be conducted
through public centralized trading.
Where the Company acquires its own Shares under the circumstances set out in preceding
item (I) or (II), it shall be resolved at the general meeting. Where the Company acquires its own Shares
under the circumstances set out in preceding item (III), (V) or (VI) in the Articles of Association, it
shall be resolved at a board meeting attended by at least two-thirds of the Directors, subject to the
securities regulatory rules of the place where the Company’s Shares are listed. Following the
acquisition of its own Shares, the Company shall fulfill its information disclosure obligations in
accordance with the Securities Law and the regulations stipulated by the securities regulatory
authorities and stock exchanges where the Company’s Shares are listed. After the Company acquires
its own Shares in accordance with the above provisions, if it falls under the circumstances of Item (I),
such Shares shall be canceled within 10 days from the date of acquisition; if it falls under the
circumstances of Item (II) or (IV), such Shares shall be transferred or canceled within 6 months; if it
falls under the circumstances of Item (III), (V) or (VI), the total number of its own Shares held by the
Company shall not exceed 10% of the Company’s total Shares issued. In addition, such Shares shall be
transferred or canceled within 3 years.
Transfer of Shares
Shares issued by the Company prior to its public offering of A-Shares shall not be transferred
within one year from the date of listing and trading of the Company’s Shares on the Shenzhen Stock
Exchange.
Directors and senior officers of the Company shall declare to the Company the number of the
Company’s Shares held by them and the changes therein, and shall not transfer more than 25% of the
total number of the Company’s Shares held by them in each year of their term of office as determined
at the time of their assumption of office; and the above-mentioned persons are not allowed to transfer
their Shares in the Company within six months from the date of submission of their resignation. If any
of the aforementioned individuals submit their resignation within 6 months (including the sixth month)
from the date of the Company’s initial public offering and listing, they shall not transfer any Shares of
the Company held directly by them for a period of 18 months from the date of submission of their
resignation; if they submit their resignation within 7 to 12 months (including the 7th month and the
12th month) from the date of the Company’s initial public offering and listing, they shall not transfer
any Shares of the Company held directly by them for a period of 12 months from the date of
submission of their resignation; if they submit their resignation 1 year after the date of the Company’s
initial public offering and listing, they shall not transfer their Shares in the Company within six months
from the date of submission of their resignation. Where changes occur in the direct shareholdings of
the aforementioned individuals due to equity distributions or similar actions by the Company, the
aforementioned provisions shall still apply.
Where the securities regulatory rules of the place where the Company’s Shares are listed
stipulate otherwise on transfer of Shares of the Company, such provisions shall prevail.
If a Shareholder holding at least 5% of the Company’s Shares (excluding Hong Kong Securities
Clearing Company Limited and HKSCC Nominees Limited), director or senior officer sells the
Company’s Shares or other securities of an equity nature held by them within six months from the date
of purchase, or buys again within six months from the date of sale, the proceeds therefrom shall
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
belong to the Company, and the Board of Directors of the Company shall reclaim the proceeds
therefrom. However, securities companies holding at least 5% of the Shares due to the purchase of the
remaining Shares after underwriting, and other circumstances stipulated by the CSRC are excluded.
Shares or other securities with the nature of equity held by the Directors, senior officers and
natural person Shareholders as mentioned in the preceding paragraph include Shares or other securities
with the nature of equity held by their spouses, parents or children, and held by using others’ accounts.
If the Board of Directors of the Company fails to execute in accordance with the provisions of
paragraph 1 of this article, Shareholders shall have the right to request the Board to do so within 30 days.
If the Board of Directors fails to act within the aforementioned time frame, Shareholders shall have the
right to directly file a lawsuit with the People’s Court in their own name for the benefit of the Company.
If the Board of Directors fails to execute in accordance with the provisions of paragraph 1 of
this article, the responsible Directors shall be jointly and severally liable in accordance with law.
Shareholders and General Meetings
Shareholders
The Company shall make a register of Shareholders based on the vouchers provided by the
securities registration and settlement institution. The register of Shareholders shall be the sufficient
evidence proving the Shareholders’ holding of the Company’s Shares. The Shareholders shall enjoy the
rights and assume the obligations according to the class of Shares they hold. The Shareholders holding
the same class of Shares shall enjoy the same rights and assume the same obligations.
The Shareholders of the Company shall be entitled to the following rights:
(I) to receive dividends and other distributions in proportion to the number of Shares held
by them;
(II) to request to hold, convene, preside over a general meeting, attend the general meeting
in person or by proxy, and exercise the corresponding voting rights in accordance with
the laws;
(III) to supervise the operation of the Company and to make suggestions or inquiries;
(IV) to transfer, bestow or pledge the Shares they hold according to laws, administrative
regulations and the Articles of Association;
(V) to inspect and copy the Articles of Association, register of Shareholders, minutes of
general meetings, resolutions of meetings of the Board of Directors, financial and
accounting reports, and eligible Shareholders may inspect the Company’s accounting
books and accounting vouchers;
(VI) to participate in the distribution of the remaining property of the Company according to
the proportion of Shares they hold when the Company is terminated or liquidated;
(VII) to request the Company to purchase Shares held by Shareholders who raise objection to
the resolution on the merger or division of the Company as adopted by the general
meeting;
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
(VIII) other rights conferred by the laws, administrative regulations, departmental rules,
security regulation rules of the place where the Company’s Shares are listed and the
Articles of Association.
Shareholders requesting access to or copying of relevant materials of the Company shall
comply with the provisions of the Company Law, the Securities Law and other laws and administrative
regulations.
Shareholders of the Company shall assume the following obligations:
(I) to comply with the laws, administrative regulations and the Articles of Association;
(II) to make payment in accordance with the Shares subscribed for and the method of
subscription;
(III) not to withdraw the share capital except as provided under laws and regulations;
(IV) not to abuse the Shareholder’s rights to damage the interests of the Company or other
Shareholders; not to abuse the independent legal person status of the Company and the
limited liability of the Shareholders to damage the interests of the creditors of the
Company;
If any Shareholder of the Company abuses the Shareholder’s rights and causes losses to
the Company or other Shareholders, he/she shall be liable for the compensation.
Where any Shareholder of the Company abuses the independent legal person status of
the Company and the limited liability of Shareholders to evade debts and severely
damages the interests of the creditors of the Company, such Shareholder shall bear joint
and several liability for the debts of the Company.
(V) other obligations required by the laws, administrative regulations, securities regulatory
rules of the place where the Company’s Shares are listed and the Articles of
Association.
General Provisions on the General Meeting
The general meeting of the Company shall be composed of all the Shareholders. The general
meeting shall be the organ of authority of the Company and shall exercise the following powers
according to law:
(I) to elect and replace the Directors who are not the representatives of the staff and
workers, and determine the remuneration of the Directors;
(II) to examine and approve reports of the Board;
(III) to review and approve the profit distribution plans and loss recovery plans of the
Company;
(IV) to make resolutions on the increase or reduction of the Company’s registered capital;
(V) to make resolutions on the issuance of bonds of the Company;
(VI) to make resolutions on the merger, division, dissolution, liquidation of the Company or
change in the organizational form of the Company;
(VII) to amend the Articles of Association;
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
(VIII) to make resolutions on the engagement or removal of accounting firm that undertakes
the audit business of the Company and determine its remuneration;
(IX) to examine and approve the transactions specified in the Articles of Association;
(X) to examine and approve the guarantees specified in the Articles of Association;
(XI) to review and approve connected transactions between the Company and related persons
with a transaction amount of more than RMB30 million and accounting for at least 5%
of the absolute value of the Company’s audited net assets for the latest period (except
for the provision of guarantees);
(XII) to examine the Company’s purchase or disposal of major assets with an amount
exceeding 30% of the total assets as presented in the latest audited total assets of the
Company within one year;
(XIII) to examine and approve matters concerning changes in the use of proceeds;
(XIV) to examine the equity incentive scheme and Employee Stock Ownership Plan;
(XV) to examine other matters that shall be decided by the general meeting as stipulated by
laws, administrative regulations, departmental rules, securities regulatory rules of the
place where the Company’s Shares are listed or the Articles of Association.
The general meeting may authorize the Board of Directors to make resolutions on the issuance
of corporate bonds.
Unless otherwise provided by laws, administrative regulations, the regulations of the securities
regulatory authorities or the securities regulatory rules of the place where the Company’s Shares are
listed, the aforesaid powers of the general meeting shall not be exercised by the Board of Directors or
any other body or individual by way of authorization.
General meetings are categorized into annual general meetings and extraordinary general
meetings. The annual general meeting, which shall be held once a year, shall be held within six months
after the end of the preceding fiscal year.
In the event of any of the following circumstances, the Company shall convene an
extraordinary general meeting within two months from the date of occurrence of the fact:
(I)
the number of Directors is less than the number specified in the Company Law or
two-thirds of the number required by the Articles of Association;
(II) the Company’s losses which are not covered amount to one-third of the total share
capital;
(III) a request is made by Shareholders individually or collectively holding at least 10% of
the Company’s Shares;
(IV) the Board considers it necessary;
(V) the Audit Committee proposes to convene the meeting;
(VI) other circumstances required by the laws, administrative regulations, departmental rules,
securities regulatory rules of the place where the Company’s Shares are listed or the
Articles of Association.
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
Convening of General Meeting
The independent Directors are authorized to propose to the Board of Directors to convene an
extraordinary general meeting with the approval of a majority of all independent Directors. In response
to a proposal from an independent director requesting the convening of an extraordinary general
meeting, the Board of Directors shall, in accordance with the provisions of laws, administrative
regulations, the securities regulatory rules of the place where the Company’s Shares are listed and the
Articles of Association, provide written feedback on whether it agrees or disagrees with the convening
of the extraordinary general meeting within 10 days upon the receipt of the proposal. Where the Board
of Directors agrees to convene an extraordinary general meeting, it shall issue a notice of the general
meeting within 5 days after the board resolution is made.
The Audit Committee shall have the right to propose to the Board to convene an extraordinary
general meeting, and shall make such proposal in writing. The Board of Directors shall, in accordance
with the provisions of laws, administrative regulations, the securities regulatory rules of the place
where the Company’s Shares are listed and the Articles of Association, provide written feedback on
whether it agrees or disagrees with the convening of the extraordinary general meeting within 10 days
upon the receipt of the proposal. Where the Board agrees to convene the extraordinary general
meeting, it shall issue a notice of the general meeting within 5 days after the decision is made. Any
changes made to the original request in the notice shall be agreed by the Audit Committee. If the Board
of Directors does not agree to convene an extraordinary general meeting or fails to provide feedback
within 10 days after receiving the proposal, it is deemed that the Board of Directors is unable to fulfill
or does not fulfill its duty to convene the general meeting, and the Audit Committee may convene and
preside over the meeting on its own.
The Shareholders who individually or collectively hold at least 10% of the Shares of the
Company shall have the right to request the Board to convene an extraordinary general meeting, and
shall make such request to the Board in writing. The Board of Directors shall, in accordance with the
provisions of laws, administrative regulations, the securities regulatory rules of the place where the
Company’s Shares are listed and the Articles of Association, provide written feedback on whether it
agrees or disagrees with the convening of the extraordinary general meeting within 10 days upon the
receipt of the proposal. Where the Board agrees to convene the extraordinary general meeting, it shall
issue a notice of the general meeting within 5 days after the board resolution is made. Any changes
made to the original request in the notice shall be agreed by the relevant Shareholders.
If the Board of Directors disapproves to convene an extraordinary general meeting, or fails to
provide feedback within 10 days upon the receipt of such proposal, the Shareholders holding at least
10% of the Company’s Shares, individually or collectively, have the right to propose to the Audit
Committee to convene an extraordinary general meeting, and such proposal shall be presented to the
Audit Committee in writing.
Where the Audit Committee agrees to convene the extraordinary general meeting, it shall issue
a notice of the general meeting within 5 days upon receipt of such proposal. Any changes made to the
original request in the notice shall be agreed by the relevant Shareholders.
If the Audit Committee fails to give notice of a general meeting within the prescribed period, it
shall be deemed that the Audit Committee does not convene and preside over the general meeting, and
the Shareholders who have individually or collectively held at least 10% of the Company’s Shares
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
for at least 90 consecutive days may convene and preside over the meeting on their own. Before the
announcement of the resolution of the general meeting, the shareholding ratio of convening
Shareholders shall be not less than 10%.
Proposals and Notices of General Meetings
When the Company holds a general meeting, the Board of Directors, the Audit Committee, and
Shareholders who individually or collectively hold at least 1% of the Company’s Shares have the right
to submit proposals to the Company.
Shareholders who individually or collectively hold at least 1% of the Company’s Shares may
propose a provisional proposal and submit it in writing to the convener 10 days prior to the general
meeting. The convener shall issue a supplementary notice of the general meeting within 2 days after
the receipt of the proposal, announcing the contents of the provisional proposal and submitting the
provisional proposal to the general meeting for deliberation, except that the provisional proposal is in
violation of the provisions of the laws, administrative regulations, the securities regulatory rules of the
place where the Company’s Shares are listed or the Articles of Association or does not fall within the
terms of reference of the general meeting.
Save as specified above, the convener shall neither revise the proposals set out in the notice of
general meetings nor add new proposals after issuing the notice of general meeting.
The general meeting shall not vote or pass resolutions on proposals not listed in the notice of
the general meeting or resolutions not in conformity with the Articles of Association.
The convener shall notify Shareholders by way of announcement 21 days prior to the Annual
General Meeting and 15 days prior to the Extraordinary General Meeting. In determining the
commencement date and the period, the Company shall not include the date on which the meeting is
held, but shall include the date on which the notice is given.
The notice of the general meeting shall include the following particulars:
(I) the time, venue and duration of the meeting;
(II) the matters and proposals to be considered at the meeting;
(III) clear words specifying that all Shareholders of ordinary shares shall have the right to
attend the general meeting, and that they may appoint a proxy in writing to attend the
meeting and vote on their behalf. The proxy is not necessarily a Shareholder of the
Company;
(IV) the record date for Shareholders who are entitled to attend the general meeting;
(V) the name and telephone number of the regular contact person for the meeting;
(VI) the voting time and voting procedures of the meeting for the online voting or other
means of voting.
After the notice of the general meeting is given, without good reason, the general meeting shall
not be postponed or canceled, and the proposals set out in the notice shall not be canceled. In the event
of a delay or cancellation, the convener shall give a notice and explanations at least 2 working days
before the scheduled meeting date.
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
Holding of General Meeting
All Shareholders of ordinary shares recorded in the register as at the record date or their proxies
shall have the right to attend the general meeting, and to speak at the general meeting and exercise their
voting rights in accordance with relevant laws, regulations, securities regulatory rules of the place where
the Company’s Shares are listed, and the Articles of Association.
The Shareholders may attend the general meeting and vote in person, or entrust one or more
proxies to attend on their behalf and exercise the voting rights within the scope of authorization. The
proxy needs not be a Shareholder of the Company.
If the general meeting requests the Directors and senior officers to attend the meeting, the
Directors and senior officers shall attend the meeting and be questioned by the Shareholders.
The general meeting shall be presided over by the chairman of the board. If the chairman of the
Board of Directors is unable or fails to perform his duties, the vice chairman shall act in his stead.
When both the chairman and vice chairman are unable or fail to perform their duties, one director
jointly elected by a majority of the Directors shall preside.
A general meeting convened by the Audit Committee shall be chaired by the convener of the
Audit Committee. In the event that the convener of the Audit Committee is unable or fails to perform
his duties, a member of the Audit Committee jointly elected by a majority of the members of the Audit
Committee shall preside.
A general meeting convened by the Shareholders themselves shall be presided over by the
convener or their elected representative.
During the course of a general meeting, if the meeting presider violates the procedural rules
such that the general meeting cannot continue, the general meeting may elect a person to act as the
meeting presider and continue the meeting with the consent of the majority of the Shareholders entitled
to vote present at the general meeting.
The Company shall formulate rules of procedure for the general meeting, stipulating in detail
the convening and voting procedures of the meeting, including notification, consideration of proposals,
voting, counting of votes, announcement of voting results, formation of resolutions of the meeting,
minutes of the meeting and their signatures, announcements, etc., as well as the principle of
authorization by the general meeting to the Board. The content of the authorization shall be clear and
specific. The rules of procedure for the general meeting, which shall be drawn up by the Board and
approved by the general meeting, shall be annexed to the Articles of Association.
Voting and Resolutions of General Meetings
The resolutions of general meetings are classified into ordinary ones and special ones.
Ordinary resolutions of the general meeting shall be adopted by more than half of the voting
rights held by the Shareholders (including their proxies) present at the meeting.
Special resolutions of the general meeting shall be adopted by at least two-thirds of the voting
rights held by the Shareholders (including their proxies) present at the meeting.
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
The following matters shall be resolved by way of ordinary resolution of the general meeting:
(I) work report of the Board of Directors;
(II) profit distribution plans and loss recovery plans formulated by the Board of Directors;
(III) appointment and removal of Directors, and determination of the remuneration of the
Directors and method of payment;
(IV) Other matters other than those which should be decided by special resolution as
provided by law, administrative regulation, securities regulatory rules where the
Company’s Shares are listed or the Articles of Association.
The following matters shall be resolved by way of special resolution of the general meeting:
(I) amendment of the Articles of Association and its appendices (including the Rules of
Procedure for General Meetings and the Rules of Procedure for Board Meetings);
(II) increase or reduction of the Company’s registered capital;
(III) separation, division, merger, dissolution and liquidation of the Company;
(IV) spinning off subsidiaries for listing;
(V) the purchases or sales of material assets by the Company or the guarantee amount
provided to others exceeding 30% of the latest audited total assets of the Company
within one year;
(VI) issuance of share, convertible corporate bonds, preferred shares, and other types of
securities approved by the CSRC;
(VII) repurchase of shares to reduce the registered capital;
(VIII) restructuring of major assets;
(IX) the equity incentive scheme;
(X) the general meeting resolves to voluntarily withdraw the Company’s Shares from listing
and trading on the Shenzhen Stock Exchange, and decides to cease trading on the
exchange or instead apply for trading or transfer on other trading venues;
(XI) other matters required to be approved by special resolutions under the laws,
administrative regulations, securities regulatory rules of the place where the Company’s
Shares are listed or the Articles of Association, and matters which, according to an
ordinary resolution of the general meeting, may have a significant impact on the
Company and shall be adopted by way of a special resolution.
Shareholders (including proxies) shall exercise their voting rights by the number of Shares with
voting rights they represent, and each Share shall have one vote.
When material issues affecting the interests of minority Shareholders are considered at the
general meeting, the votes of minority Shareholders shall be counted separately, and the results of such
separate vote counting shall be disclosed promptly.
The Company’s Shares held by itself have no voting right, and such Shares shall not be
included in the total number of shares with voting rights present at the general meeting.
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Where a Shareholder’s purchase of the Company’s Shares with voting rights violates the
provisions of paragraphs 1 and 2 of Article 63 of the Securities Law, the voting rights of the Shares
exceeding the prescribed proportion shall not be exercised within 36 months after the purchase, and
such Shares shall not be included in the total number of Shares with voting rights of the Shareholders
attending the general meeting.
If in accordance with the applicable laws and regulations and the Hong Kong Listing Rules,
any Shareholder is required to abstain from voting or is restricted to voting for (or against) any
individual resolution, any vote by the shareholder or his/her proxies in contravention thereof shall not
be counted into the total number of Shares with voting rights.
The Board, independent Directors, and Shareholders holding at least 1% of the voting Shares or
the investor protection agency established in accordance with laws, administrative regulations or
provisions of the securities regulatory agency under the State Council can publicly solicit the voting
rights from the Shareholders. When soliciting voting rights from Shareholders, the specific voting
intention and other information shall be fully disclosed to the solicitation targets. It is prohibited to
solicit Shareholders’ voting rights through paid or disguised paid means. Except for the statutory
conditions, the Company shall not impose restrictions on the minimum shareholding proportion against
the solicitation of Shareholders’ voting rights.
Directors and Board of Directors
Directors
The Directors of the Company include executive Directors, non-executive Directors, and
independent Directors (i.e., independent non-executive Directors). A non-executive Director refers to a
director who does not hold an operation management position within the Company.
Directors shall be elected or replaced by the general meeting and may be removed from office
by the general meeting before the expiration of their term of office. The term of office for Directors is
three years. Upon expiration of their term, they may be re-elected for consecutive terms in accordance
with the securities regulatory rules of the place where the Company’s Shares are listed.
The term of office of a Director shall start from the date on which the said director assumes
office to the expiry of the current term of the Board of Directors. If the term of office of a Director
expires but re-election is not made responsively, the said director shall continue fulfilling the duties as
a Director pursuant to relevant laws, administrative regulations, departmental rules, securities
regulatory rules of the place where the Company’s Shares are listed and the Articles of Association
until the newly elected director takes office.
A Director may be the general manager or other senior officer concurrently, provided that the
total number of Directors who concurrently serve as the general manager or other senior officers and
Directors who are employee representatives shall not exceed half of the total number of Directors of
the Company.
Directors shall comply with the provisions of laws, administrative regulations, securities
regulatory rules of the place where the Company’s Shares are listed and the Articles of Association,
and have a duty of loyalty to the Company; they shall take measures to avoid conflicts between their
own interests and the interests of the Company, and they shall not make use of their powers to gain
undue benefits.
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Directors shall comply with the provisions of laws, administrative regulations, securities
regulatory rules of the place where the Company’s Shares are listed and the Articles of Association,
and shall have a duty of diligence to the Company, and shall perform their duties with the reasonable
care normally expected of a manager in the best interests of the Company.
Independent Directors
The Company has independent Directors. An independent non-executive Director is a Director
who does not hold any position in the Company other than as a Director, and who does not have any
direct or indirect interest in the Company, its major Shareholders, or its actual controllers, or any other
relationship that may affect his/her ability to make independent and objective judgments. In addition,
independent Directors shall also meet the relevant requirements for “independent non-executive
directors” as stipulated in the Hong Kong Listing Rules.
The proportion of independent Directors on the board of directors shall not be less than
one-third. At least one independent Director shall possess appropriate professional qualifications as
specified by the securities regulatory rules of the place where the Company’s Shares are listed, or be an
accounting professional with appropriate accounting or related financial management expertise.
Board of Directors
The Board of Directors of the Company consists of seven Directors, including three
independent Directors. The Board of Directors shall have one chairman and one vice chairman, both
elected by a majority vote of all Directors on the Board.
The Board shall exercise the following powers:
(I) to convene a general meeting and report to the general meeting on the work of the
Board;
(II) to implement resolutions adopted by the general meeting;
(III) to decide on the Company’s business plan and investment program;
(IV) to formulate the profit distribution plan and loss recovery plan of the Company;
(V) to formulate plans of the Company regarding increase or reduction of the registered
capital, issuance of bonds or other securities and listing;
(VI) to formulate plans for substantial acquisition, repurchase of Shares, or merger, division,
dissolution and change of corporate form of the Company;
(VII) to determine the outbound investment, acquisition and disposal of assets, asset
mortgage, external guarantee, consigned financial management, connected transactions,
external donations of the Company within the authority granted by the general meeting;
(VIII) to decide on the establishment of the internal management organization of the
Company;
(IX) to appoint or dismiss the general manager, secretary to the Board and other senior
officers of the Company, and decide on matters of their remuneration, rewards and
punishments; to appoint or dismiss senior officers such as deputy general manager and
CFO according to the nomination of the general manager, and decide on matters of their
remuneration, rewards and punishments;
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
(X) to formulate the basic management system of the Company;
(XI) to formulate the proposals for any amendment to the Articles of Association;
(XII) to manage the information disclosure of the Company;
(XIII) to request the general meeting to engage or replace the accounting firm that provides
audit service for the Company;
(XIV) to debrief the work report of the general manager of the Company and check the works
of the general manager;
(XV) to resolve matters concerning the acquisition of the Company’s Shares under the
circumstances specified in item (III), (V) or (VI) of Article 24 of the Articles of
Association. The exercise of this authority shall be subject to approval by a resolution of
the Board meeting attended by at least two-thirds of the Directors;
(XVI) other powers granted by the laws, administrative regulations, departmental rules,
securities regulatory rules of the place where the Company’s Shares are listed or the
Articles of Association.
Matters beyond the scope authorized by the general meeting shall be submitted to the general
meeting for consideration.
The Board of Directors shall formulate the rules of procedures for the Board to ensure the
proper implementation of the resolutions of the general meeting, improvement of work efficiency and
scientific decision-making. The rules of procedure for the Board meeting, which shall be drawn up by
the Board and approved by the general meeting, shall be annexed to the Articles of Association.
The Board of Directors shall determine the scope of authorization in respect of outbound
investment, acquisition and disposal of assets, asset mortgages, external guarantee, consigned financial
management, connected transactions and external donations, and set up strict inspection and decision-
making procedures; for important investment projects, the Board of Directors shall organize the
relevant experts and professionals for review and report to the general meeting for approval.
The chairman of the Board of Directors shall exercise the following powers:
(I) to preside over the general meetings and to convene and preside over meetings of the
Board of Directors;
(II) to supervise and inspect the execution of the resolutions of the Board of Directors;
(III) other powers granted by the Board.
When the chairman of the Board exercises his powers within the scope of his authority
(including authorization), he shall make a prudent decision on matters that may have a significant
impact on the operation of the Company and, if necessary, submit it to the Board of Directors for
collective decision-making.
The Board of Directors shall meet at least four times a year. For regular board meetings, written
notices bearing the board’s official seal shall be delivered to all Directors, the general manager, and the
board secretary via personal delivery, mail, or fax at least 14 days prior to the meeting date.
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
Shareholders representing at least one-tenth of the voting rights, at least one-third of the
Directors, the Audit Committee, more than half of the independent Directors, the general manager or
chairman may propose an extraordinary Board meeting when considering it necessary. The chairman
of the Board shall convene and preside over a Board meeting within 10 days after receiving the
proposal.
For extraordinary board meetings, written notices bearing the board’s official seal shall be
delivered to all Directors, the general manager, and the Board secretary via personal delivery, mail, or
fax at least 5 days prior to the meeting date. In case of emergency and it is necessary to convene an
extraordinary Board meeting as soon as possible, the meeting notice may be sent by telephone or other
oral means at any time, provided that the convener shall make explanations at the meeting.
A Board meeting shall be held only if more than half of the Directors are present. The general
manager and the board secretary who do not concurrently serve as Directors shall attend Board
meetings. If the meeting presider deems it necessary, other relevant persons can be notified to attend
the meeting.
Unless otherwise specified in the Articles of Association and its appendices, a resolution made
by the Board must be approved by more than half of all the Directors.
A guarantee within the scope of authority of the Board shall be approved by more than half of
all the Directors and approved by at least two-thirds of the Directors present at the Board meeting.
Each Director shall have one vote for the resolutions of the Board of Directors.
Special Committees under the Board of Directors
The Board of Directors of the Company has set up an Audit Committee to exercise the powers
and functions of the supervisory committee as stipulated in the Company Law.
The Audit Committee consists of three members, all of whom shall be non-executive Directors.
Among them, two are independent Directors, with the convener (chairperson) being an independent
Director who is also an accounting professional.
In addition to the Audit Committee, the Board of Directors has established a Strategy
Committee, a Nomination Committee, and a Remuneration and Appraisal Committee. These
committees perform their duties in accordance with the Articles of Association and the authority
delegated by the Board of Directors. Proposals from the special committees shall be submitted to the
Board of Directors for deliberation and decision. The working rules of the special committees should
be prepared by the Board of Directors.
Board Secretary
The Company shall have a Board secretary to take charge of the preparation of general
meetings and Board meetings, the safekeeping of documents, the management of the information of
Shareholders, the handling of information disclosure affairs, etc. The Board secretary is a senior officer
of the Company. The relevant provisions of laws, regulations and the Articles of Association on the
senior officers of the Company are applicable to the Board secretary.
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
General Manager and Other Senior Officers
The Company shall have a general manager who shall be appointed or removed by the Board.
The Company shall have several deputy general managers who shall be appointed or dismissed
by the Board.
The general manager, deputy general managers, the Board secretary, and chief financial officer
are senior officers of the Company.
The general manager shall be accountable to the Board and exercise the following powers:
(I) to be in charge of the production, operation and management of the Company, to
organize the implementation of the resolutions of the Board, and to report on his work
to the Board;
(II) to arrange for the implementation of the Company’s annual business plans and
investment plans;
(III) to draw out the plan of the internal management structure of the Company;
(IV) to draft the Company’s basic management system;
(V) to formulate the specific rules and regulations of the Company;
(VI) to propose to the Board of Directors the appointment or dismissal of the deputy general
manager and the chief financial officer;
(VII) to decide to employ and dismiss the responsible management personnel other than those
to be employed and dismissed by the Board of Directors;
(VIII) other powers granted by the Articles of Association or the Board.
The general manager who does not serve as a Director concurrently shall attend the Board
meeting.
The senior officers of the Company shall faithfully perform their duties and safeguard the best
interests of the Company and all Shareholders. If the senior officers fail to faithfully perform their
duties or violate their fiduciary duties, causing damage to the interests of the Company and
Shareholders of public shares, they shall be liable for compensation in accordance with the law.
Financial and Accounting Systems
The Company shall lay down its financial and accounting system according to laws,
administrative regulations and requirements of relevant government departments.
The Company shall, at the end of each fiscal year, prepare a financial and accounting report,
which shall be audited by an accounting firm as required by law. The financial and accounting report
shall be prepared in accordance with provisions of the laws, administrative regulations and the
regulations of the financial department of the State Council.
Disclosure of A-Share periodic reports: The Company shall submit and disclose its annual
report to the local offices of CSRC and Shenzhen Stock Exchange within four months as of the end of
each fiscal year, and its interim report to the local offices of the CSRC and Shenzhen Stock Exchange
within two months as of the end of the first half of each fiscal year.
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
Disclosure of H-Share periodic reports: The H-Share periodic reports include annual reports
and interim reports. The Company shall disclose a preliminary announcement of its annual results
within three months from the end of each fiscal year, and shall prepare and disclose its annual report
within four months from the end of each fiscal year and at least 21 days prior to the date of the annual
general meeting. The Company shall disclose a preliminary announcement of its interim results within
two months after the end of the first six months of each fiscal year, and shall prepare and disclose the
interim report within three months after the end of the first six months of each fiscal year.
The above-mentioned annual report and interim report shall be prepared in accordance with
relevant laws, administrative regulations, securities regulatory rules of the place where the Company’s
Shares are listed and rules of the stock exchange.
The Company shall not establish separate accounting books other than the statutory ones. The
assets of the Company shall not be deposited into an account established in the name of any individual.
When the Company distributes the after-tax profits of the current year, it shall allocate 10% of the
profits into the statutory surplus reserve. When the cumulated amount of the statutory surplus reserve of
the Company has reached 50% or more of its registered capital, no further allocations is required.
Where the statutory surplus reserve of the Company is not sufficient to recover its losses in the
previous years, the profits of the current year shall be used to cover the loss before the withdrawing of
the statutory surplus reserve in accordance with the above provisions.
After the company has allocated the statutory surplus reserve from its after-tax profits, it may,
upon a resolution made by the general meeting, allocate a discretionary surplus reserve from its
after-tax profits.
The remaining after-tax profits of the Company after making up for the losses and withdrawing
the reserves may be distributed according to the proportion of Shares held by the Shareholders, except
it is specified in the Articles of Association that the distribution is not made based on the shareholding
proportions.
If the general meeting distributes profits to Shareholders in violation of the provisions of the
preceding paragraph and before the Company covers the losses and withdraws statutory surplus
reserve, the Shareholders shall return the profits distributed in violation of the provisions to the
Company. If any loss is caused to the Company, the Shareholders and the responsible Directors and
senior officers shall be liable for compensation.
No profits shall be distributed in respect of the Company’s Shares held by the Company.
The reserves of the Company shall be used to cover the Company’s losses, expand its
production and operation or to increase its registered capital. However, the capital reserve shall not be
used to cover the loss of the Company. To make up for the Company’s losses, the Company shall first
use the discretionary surplus reserve and statutory surplus reserve; If they are insufficient, the capital
reserve can be used in accordance with the regulations.
Where the statutory surplus reserve is converted to capital, the remainder of the statutory
surplus reserve shall not be less than 25% of the registered capital of the Company before the
conversion is conducted.
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
When a resolution is made by general meeting on the profit distribution scheme, or the Board
of Directors has formulated a specific plan based on the conditions and upper limit of the next year’s
interim dividend approved at the annual general meeting, the Board shall complete the dividend (or
Share) distribution in two months after the general meeting.
Internal Audit
The Company has implemented an internal audit system, which specifies the leadership system,
responsibility and authority, staffing, financial security, use of audit results and accountability for
internal audit work. The Company’s internal audit system shall be implemented upon approval by the
Board of Directors and disclosed externally.
The Company’s internal audit organization supervises and inspects the Company’s business
activities, risk management, internal control, financial information and other matters.
Employment of Accounting Firm
The Company shall engage an accounting firm that complies with the provisions of the
Securities Law and Hong Kong Listing Rules to audit financial reports, verify the net assets, and
provide other relevant consulting services. The term of employment of the accounting firm shall be one
year, which is renewable.
The appointment or removal of an accounting firm by the Company must be decided by the
general meeting, and the Board of Directors shall not appoint an accounting firm before the decision is
made by the general meeting.
The Company shall ensure to provide true and complete accounting vouchers, accounting
books, financial accounting reports and other accounting information to the engaged accounting firm,
and shall not refuse, conceal or make false reports.
The audit fee or method of determining the audit fee of an accounting firm shall be decided by
the general meeting.
When the Company dismisses or decides not to renew the employment of an accounting firm, it
shall give a 20-day prior notice to the accounting firm, and the accounting firm shall have the right to
state its opinions at the general meeting where a voting process concerning the dismissal of such
accounting firm is carried out.
Where an accounting firm tenders its resignation, it shall inform the general meeting of whether
there is any irregularity in the Company.
Merger, Division, and Capital Increase and Reduction
The merger of the Company may take the form of a merger by absorption or a merger by new
establishment.
In the case of a merger by absorption, a company absorbs another company and the absorbed
company shall be dissolved. In the case of a merger by new establishment, two or more companies
merge together for the establishment of a new company and the companies to the merger shall be
dissolved.
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
If the price paid for a company merger does not exceed 10% of the Company’s net assets, it
does not require a resolution by the general meeting, unless otherwise stipulated in the Articles of
Association.
A merger of the Company in accordance with the provisions of the above two paragraphs shall
be resolved by the Board of Directors if the merger is not resolved by the general meeting.
In the case of a merger, parties to the merger shall execute a merger agreement, and shall
prepare the balance sheets and a schedule of assets. The Company shall inform its creditors within
10 days and publish an announcement on the newspaper or the National Enterprise Credit Information
Publicity System within 30 days after the resolution approving the merger has been adopted. Creditors
shall, within 30 days since the date of receiving the notice, or creditors who do not receive the notice
shall, within 45 days since the date of the public announcement, be entitled to require the Company to
pay off its debts in full or to provide a corresponding guarantee.
The surviving company or the newly established company of a merger shall assume the claims
and debts of the parties to the merger.
If the Company is divided, its property shall be divided accordingly.
In the case of a division, a balance sheet and a schedule of assets shall be prepared. The
Company shall inform its creditors within 10 days and publish an announcement on the newspaper or
the National Enterprise Credit Information Publicity System within 30 days after the resolution
approving the division has been adopted.
Debts owed by the Company prior to the division shall be assumed by the companies in
existence after the division jointly and severally, except as otherwise stated in the agreement entered
into between creditors and the Company for debt service prior to the division.
Where the Company needs to reduce its registered capital, a balance sheet and a schedule of
assets must be prepared.
The Company shall inform its creditors of the reduction in registered capital within 10 days and
publish an announcement on the newspaper or the National Enterprise Credit Information Publicity
System within 30 days after the resolution approving the reduction has been adopted. Creditors shall,
within 30 days since the date of receiving the notice, or creditors who do not receive the notice shall,
within 45 days since the date of the public announcement, be entitled to require the Company to pay
off its debts in full or to provide a corresponding guarantee.
Where the merger or division of the Company results in a change in its registration particulars,
such change shall be registered with the Company registration authority according to law. Where the
Company is dissolved, it shall cancel its registration according to law. Where a new company is
established, its establishment shall be registered according to law.
Where the Company increases or reduces its registered capital, it shall amend its registration
with the Company registration authority in accordance with the law.
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
Dissolution and Liquidation
The Company shall be dissolved if:
(I) the dissolution event occurs as specified in the Articles of Association;
(II) the general meeting resolves to dissolve the Company;
(III) the Company is dissolved as a result of merger or division;
(IV) the Company is revoked of business license, ordered to close or canceled according to
law;
(V) Shareholders holding 10% or more of the voting rights of the Company request the
people’s court to dissolve the Company, on the grounds that the company suffers
significant hardship in its operation and management that cannot be resolved through
other means, and the ongoing existence of the Company would bring significant losses
to the interests of Shareholders. If the Company has the reasons for dissolution specified
in the above paragraphs, it shall publicize the reasons for dissolution through the
National Enterprise Credit Information Publicity System within 10 days.
If the Company is in the situations of the above items (I) or (II) and has not yet distributed its
property to its Shareholders, it may survive by amending the Articles of Association or by a resolution
of the general meeting. Amendments to the Articles of Association or resolutions of general meeting
made in accordance with the provisions of the preceding paragraph shall be approved by at least
two-thirds of the voting rights held by the Shareholders attending the general meeting.
If the Company is dissolved under items (I), (II), (IV) or (V), it shall be liquidated. The
Directors shall be the liquidation obligors of the Company, and shall form a liquidation committee to
liquidate the Company within 15 days of occurrence of any event leading to dissolution. The
liquidation committee shall be composed of the Directors, except as otherwise provided in the Articles
of Association or as otherwise elected by the resolution of the general meeting. Where the liquidation
obligors fail to perform their liquidation obligations in a timely manner, thereby causing losses to the
Company or the creditors, they shall be liable for compensation.
Where the liquidation committee discovers upon examination of the Company’s assets and
preparation of the balance sheet and schedule of assets that the Company’s assets are insufficient to
repay its debts, an application shall be made to the people’s court for bankruptcy liquidation.
After the people’s court accepts the bankruptcy application, the liquidation committee shall
hand over the liquidation affairs to the bankruptcy administrator appointed by the people’s court.
Following the completion of liquidation, the liquidation committee shall formulate a liquidation
report, submit it to the general meeting or the people’s court for confirmation, and submit it to the
Company registration authority, apply for cancellation of the Company’s registration, and announce
the Company’s termination.
Amendment to the Articles of Association
The Company shall amend its Articles of Association in any of the following circumstances:
(I)
following amendment of the Company Law or other relevant laws, administrative
regulations and securities regulatory rules of the place where the Company’s Shares are
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APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
listed, the provisions of the Articles of Association contradict with the relevant
provisions of the amended laws, administrative regulations and securities regulatory
rules of the place where the Company’s Shares are listed;
(II) there has been a change to the Company, resulting in inconsistency with the contents in
the Articles of Association;
(III) the general meeting decides to amend the Articles of Association.
Where any amendment to the Articles of Association resolved by the general meeting is subject
to examination and approval by the competent authority, such amendment shall be submitted to the
competent authority for approval; where any amendment to the Articles of Association involves the
Company’s registration, the Company’s registration shall be amended in accordance with the law.
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APPENDIX VI STATUTORY AND GENERAL INFORMATION
FURTHER INFORMATION ABOUT OUR GROUP
Establishment of Our Company
Our Company was established in the PRC as a limited liability company on January 26, 2007.
On May 24, 2012, it was converted into a joint stock company with limited liability under the PRC
Company Law. Since June 6, 2017, our A Shares have been listed on the Shenzhen Stock Exchange
with the stock code of 300661. Our registered office is located at 4-1106, 11/F, No. 87 West Third
Ring Road North, Haidian District, Beijing, PRC.
We have established a principal place of business in Hong Kong at Room 1910, 19/F, Lee
Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong, and has been registered as a
non-Hong Kong company under Part 16 of the Companies Ordinance on under the same address.
Ms. YEUNG Siu Wai Kitty (
เʃᅆ) has been appointed as our authorized representative for the
acceptance of service of process and notices on our behalf in Hong Kong. The address for service of
process on the Company in Hong Kong is the same as its principal place of business in Hong Kong as
set out above.
As we were 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 aspects of laws and
regulations of the PRC and the Articles of Association is set out in Appendices IV and V to this
prospectus, respectively.
Changes in the Share Capital of Our Company
Save as disclosed below, there has been no change in the share capital of our Company within
the two years immediately preceding the date of this prospectus.
On November 4, 2024, our Company’s total registered capital increased from
RMB467,414,602 to RMB470,284,194, due to the exercise of stock options under the 2018 Stock
Option Incentive Plan.
On November 11, 2024, our Company’s total registered capital increased from
RMB470,284,194 to RMB471,980,615, due to (i) the exercise of stock options under the 2018 Stock
Option Incentive Plan; and (ii) the vesting of restricted stocks under the 2021 Share Incentive Plan.
On June 2, 2026, our Company’s total registered capital increased from RMB471,980,615 to
RMB473,745,179, due to (i) the exercise of stock options under the 2018 Stock Option Incentive Plan,
the 2022 Share Incentive Plan and the 2023 Share Incentive Plan; and (ii) the vesting of restricted
stocks under the 2021 Share Incentive Plan.
On September 19, 2025, following approval by the third extraordinary general meeting of 2025,
the Company’s total share capital increased from RMB473,745,179 to RMB618,011,149, due to (i) the
exercise of stock options under the 2018 Stock Option Incentive Plan and the 2023 Share Incentive
Plan; (ii) the vesting of restricted shares under the 2021 Share Incentive Plan; and (iii) the
capitalization of capital reserve into share capital in connection with the 2024 profit distribution.
On April 20, 2026, following approval by the annual general meeting of 2025, the Company’s
total share capital increased from RMB618,011,149 to RMB620,507,403, due to the exercise of stock
options under the 2023 Share Incentive Plan.
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APPENDIX VI STATUTORY AND GENERAL INFORMATION
Changes in the Share Capital of Our Subsidiaries
Details of our subsidiaries are set out in Note 1 to the Accountants’ Report in Appendix I to this
prospectus.
Save as disclosed below, there has been no change in the share capital of any of our
subsidiaries within the two years immediately preceding the date of this prospectus.
SHEN AN MICRO CO., LTD. (ʮ̡)
On December 18, 2024, the registered share capital of SHEN AN MICRO CO., LTD. increased
from RMB2,000,000 to RMB16,000,000.
SG MICRO SUZHOU CO., LTD. (ʮ̡)
On June 14, 2024, the registered share capital of SG MICRO SUZHOU CO., LTD. increased
from RMB14,200,000 to RMB15,683,383.61.
GANRUI TECH (CHANGZHOU) CO., LTD. (ʮ̡)
On November 27, 2024, the registered share capital of GANRUI TECH (CHANGZHOU) CO.,
LTD. increased from RMB3,304,500 to RMB3,321,700.
VTRAN TECH (CHANGZHOU) CO., LTD. (ʮ̡)
On December 12, 2024, the registered share capital of VTRAN TECH (CHANGZHOU) CO.,
LTD. increased from RMB60,000,000 to RMB80,000,000.
SHANGHAI SG MICRO CO., LTD. (ʮ̡)
On July 17, 2024, the registered share capital of SHANGHAI SG MICRO CO., LTD. increased
from RMB2,000,000 to RMB30,000,000.
SHANGHAI PINGSHENG MICRO CO., LTD. (ʮ̡)
On October 22, 2025, the registered share capital of SHANGHAI PINGSHENG MICRO CO.,
LTD. increased from RMB2,450,000 to RMB183,450,000.
SHANGHAI FANHUIZHI TECH CO., LTD. (ʮ̡)
On December 2, 2025, SHANGHAI FANHUIZHI TECH CO., LTD. was deregistered under
the laws of the PRC with a registered capital of RMB5,000,000.
SG MICRO DALIAN CO., LTD. (ʮ̡)
On December 22, 2025, SG MICRO DALIAN CO., LTD. was deregistered under the laws of
the PRC with a registered capital of RMB10,000,000.
SG MICRO CHENGDU CO., LTD. (ʮ̡)
On December 29, 2025, SG MICRO CHENGDU CO., LTD. was established under the laws of
the PRC with a registered capital of RMB30,000,000.
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APPENDIX VI STATUTORY AND GENERAL INFORMATION
SG MICRO WUHAN CO., LTD. (ʮ̡)
On February 6, 2026, SG MICRO WUHAN CO., LTD. was established under the laws of the
PRC with a registered capital of RMB30,000,000.
SG MICRO QIANHAI CO., LTD. (ʮ̡)
On February 14, 2026, SG MICRO QIANHAI CO., LTD. was established under the laws of the
PRC with a registered capital of US$10,000,000.
SG MICRO XIAN CO., LTD. (ʮ̡)
On May 20, 2026, SG MICRO XIAN CO., LTD. was established under the laws of the PRC
with a registered capital of RMB5,000,000.
Resolutions of Our Shareholders
At the Shareholders’ general meeting held on September 19, 2025, among other things, the
following resolutions were passed by the Shareholders:
(a) the issuance by our Company of H Shares with a nominal value of RMB1.00 each and
such H Shares being listed on the Stock Exchange;
(b) the number of H Shares to be issued shall not be more than 15% of the total issued share
capital of our Company upon completion of the Global Offering and before any exercise
of the Over-allotment Option, and the grant of the Over-allotment Option in respect of no
more than 15% of the number of H Shares initially available under the Global Offering;
(c) subject to the completion of the Global Offering, the adoption of the Articles of
Association which shall become effective on the Listing Date, and authorization to our
Board to amend the Articles of Association to the extent necessary in accordance with the
requirements of the relevant laws and regulations for the purpose of the Listing; and
(d) authorization of our Board or its authorized individual(s) to handle all matters relating to, among
other things, the Global Offering, the issue and the listing of H Shares on the Stock Exchange.
Restriction on Share Repurchase
For details of the restrictions on share repurchase by our Company, see “Summary of Articles
of Association” in Appendix V to this prospectus.
FURTHER INFORMATION ABOUT OUR BUSINESS
Summary of Material Contracts
We have entered into the following contracts (not being contract entered into in the ordinary
course of business) within the two years immediately preceding the date of this prospectus that are or
may be material:
(a) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, GIC Private Limited, China International Capital Corporation Hong Kong
Securities Limited and Huatai Financial Holdings (Hong Kong) Limited, pursuant to
which GIC Private Limited agreed to subscribe for such number of H Shares at the Offer
VI-3


--- page 492 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
Price in the aggregate amount of the Hong Kong dollar equivalent of US$50.0 million
(excluding the brokerage, SFC transaction levy, AFRC transaction levy and Stock
Exchange trading fee in respect of such number of H Shares);
(b) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, JPMorgan Asset Management (Asia Pacific) Limited, China International
Capital Corporation Hong Kong Securities Limited and Huatai Financial Holdings
(Hong Kong) Limited, pursuant to which JPMorgan Asset Management (Asia Pacific)
Limited agreed to subscribe for such number of H Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US$49.0 million (excluding the
brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange trading fee
in respect of such number of H Shares);
(c) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, CPE Ginkgo Investment Limited, China International Capital Corporation
Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited,
pursuant to which CPE Ginkgo Investment Limited agreed to subscribe for such number
of H Shares at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent
of US$38.0 million (excluding the brokerage, SFC transaction levy, AFRC transaction
levy and Stock Exchange trading fee in respect of such number of H Shares);
(d) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Da Cheng International Asset Management Company Limited, China
International Capital Corporation Hong Kong Securities Limited and Huatai Financial
Holdings (Hong Kong) Limited, pursuant to which Da Cheng International Asset
Management Company Limited agreed to subscribe for such number of H Shares at the
Offer Price in the aggregate amount of the Hong Kong dollar equivalent of US$3.0 million
(excluding the brokerage, SFC transaction levy, AFRC transaction levy and Stock
Exchange trading fee in respect of such number of H Shares);
(e) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Dajia Life Insurance Co., Ltd., China International Capital Corporation
Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited,
pursuant to which Dajia Life Insurance Co., Ltd. agreed to subscribe for such number of
H Shares at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of
US$3.0 million (excluding the brokerage, SFC transaction levy, AFRC transaction levy
and Stock Exchange trading fee in respect of such number of H Shares);
(f) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Dymon Asia Multi-Strategy Investment Master Fund, China International
Capital Corporation Hong Kong Securities Limited and Huatai Financial Holdings
(Hong Kong) Limited, pursuant to which Dymon Asia Multi-Strategy Investment Master
Fund agreed to subscribe for such number of H Shares at the Offer Price in the aggregate
amount of the Hong Kong dollar equivalent of US$3.0 million (excluding the brokerage,
SFC transaction levy, AFRC transaction levy and Stock Exchange trading fee in respect of
such number of H Shares);
(g) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, First Sentier Investors (Hong Kong) Limited, China International Capital
Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong)
Limited, pursuant to which First Sentier Investors (Hong Kong) Limited agreed to
VI-4


--- page 493 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
subscribe for such number of H Shares at the Offer Price in the aggregate amount of the
Hong Kong dollar equivalent of US$20.0 million (excluding the brokerage, SFC
transaction levy, AFRC transaction levy and Stock Exchange trading fee in respect of such
number of H Shares);
(h) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, GF Fund Management Co., Ltd. (
ʮ̡), China International
Capital Corporation Hong Kong Securities Limited and Huatai Financial Holdings
(Hong Kong) Limited, pursuant to which GF Fund Management Co., Ltd. agreed to
subscribe for such number of H Shares at the Offer Price in the aggregate amount of the
Hong Kong dollar equivalent of US$10.0 million (excluding the brokerage, SFC
transaction levy, AFRC transaction levy and Stock Exchange trading fee in respect of such
number of H Shares);
(i) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, GF International Investment Management Limited (
ʮ
̡), China International Capital Corporation Hong Kong Securities Limited and Huatai
Financial Holdings (Hong Kong) Limited, pursuant to which GF International Investment
Management Limited agreed to subscribe for such number of H Shares at the Offer Price
in the aggregate amount of the Hong Kong dollar equivalent of US$2.0 million (excluding
the brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange trading
fee in respect of such number of H Shares);
(j) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Golden Continent Global Vision Open-ended Fund Company-Value
Opportunity Fund No.2, China International Capital Corporation Hong Kong Securities
Limited and Huatai Financial Holdings (Hong Kong) Limited, pursuant to which Golden
Continent Global Vision Open-ended Fund Company-Value Opportunity Fund No.2
agreed to subscribe for such number of H Shares at the Offer Price in the aggregate
amount of the Hong Kong dollar equivalent of US$3.0 million (excluding the brokerage,
SFC transaction levy, AFRC transaction levy and Stock Exchange trading fee in respect of
such number of H Shares);
(k) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Harvest Global Investments Limited, China International Capital Corporation
Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited,
pursuant to which Harvest Global Investments Limited agreed to subscribe for such
number of H Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US$3.0 million (excluding the brokerage, SFC transaction levy, AFRC
transaction levy and Stock Exchange trading fee in respect of such number of H Shares);
(l) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, HHLR Advisors, Ltd., China International Capital Corporation Hong Kong
Securities Limited and Huatai Financial Holdings (Hong Kong) Limited, pursuant to
which HHLR Advisors, Ltd. agreed to subscribe for such number of H Shares at the Offer
Price in the aggregate amount of the Hong Kong dollar equivalent of US$49.0 million
(US$10.0 million of which is held as the investment manager of segregated management
accounts managed for CPP Investments) (excluding the brokerage, SFC transaction levy,
AFRC transaction levy and Stock Exchange trading fee in respect of such number of
H Shares);
VI-5


--- page 494 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
(m) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Huadeng Tech Ace Investment Ltd, China International Capital Corporation
Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited,
pursuant to which Huadeng Tech Ace Investment Ltd agreed to subscribe for such number
of H Shares at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent
of US$5.0 million (excluding the brokerage, SFC transaction levy, AFRC transaction levy
and Stock Exchange trading fee in respect of such number of H Shares);
(n) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, HQ TELECOM SINGAPORE PTE. LTD., China International Capital
Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong)
Limited, pursuant to which HQ TELECOM SINGAPORE PTE. LTD. agreed to subscribe
for such number of H Shares at the Offer Price in the aggregate amount of the Hong Kong
dollar equivalent of US$7.0 million (excluding the brokerage, SFC transaction levy,
AFRC transaction levy and Stock Exchange trading fee in respect of such number of
H Shares);
(o) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Sungrow Power (Hong Kong) Co., Limited, China International Capital
Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong)
Limited, pursuant to which Sungrow Power (Hong Kong) Co., Limited agreed to subscribe
for such number of H Shares at the Offer Price in the aggregate amount of the Hong Kong
dollar equivalent of US$4.0 million (excluding the brokerage, SFC transaction levy,
AFRC transaction levy and Stock Exchange trading fee in respect of such number of
H Shares);
(p) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, ICBC Wealth Management Co., Ltd. (
ப΂ʮ̡), China
International Capital Corporation Hong Kong Securities Limited and Huatai Financial
Holdings (Hong Kong) Limited, pursuant to which ICBC Wealth Management Co., Ltd.
agreed to subscribe for such number of H Shares at the Offer Price in the aggregate
amount of the Hong Kong dollar equivalent of US$3.0 million (excluding the brokerage,
SFC transaction levy, AFRC transaction levy and Stock Exchange trading fee in respect of
such number of H Shares);
(q) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, iSoftStone Hong Kong Limited, China International Capital Corporation Hong
Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited, pursuant to
which iSoftStone Hong Kong Limited agreed to subscribe for such number of H Shares at
the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of
US$3.0 million (excluding the brokerage, SFC transaction levy, AFRC transaction levy
and Stock Exchange trading fee in respect of such number of H Shares);
(r) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, LMR Multi-Strategy Master Fund Limited, China International Capital
Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong)
Limited, pursuant to which LMR Multi-Strategy Master Fund Limited agreed to subscribe
for such number of H Shares at the Offer Price in the aggregate amount of the Hong Kong
dollar equivalent of US$3.0 million (excluding the brokerage, SFC transaction levy, AFRC
transaction levy and Stock Exchange trading fee in respect of such number of H Shares);
VI-6


--- page 495 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
(s) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Integrated Core Strategies (Asia) Pte. Ltd., China International Capital
Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong)
Limited, pursuant to which Integrated Core Strategies (Asia) Pte. Ltd. agreed to subscribe
for such number of H Shares at the Offer Price in the aggregate amount of the Hong Kong
dollar equivalent of US$5.0 million (excluding the brokerage, SFC transaction levy,
AFRC transaction levy and Stock Exchange trading fee in respect of such number of
H Shares);
(t) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Ninety One Asia Pte. Limited, China International Capital Corporation
Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited,
pursuant to which Ninety One Asia Pte. Limited agreed to subscribe for such number of
H Shares at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of
US$3.0 million (excluding the brokerage, SFC transaction levy, AFRC transaction levy
and Stock Exchange trading fee in respect of such number of H Shares);
(u) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Ocean Fine Industrial Limited, China International Capital Corporation
Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited,
pursuant to which Ocean Fine Industrial Limited agreed to subscribe for such number of
H Shares at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of
US$4.0 million (excluding the brokerage, SFC transaction levy, AFRC transaction levy
and Stock Exchange trading fee in respect of such number of H Shares);
(v) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, PSBC Wealth Management Co., Ltd. (
ப΂ʮ̡), China
International Capital Corporation Hong Kong Securities Limited and Huatai Financial
Holdings (Hong Kong) Limited, pursuant to which PSBC Wealth Management Co., Ltd.
agreed to subscribe for such number of H Shares at the Offer Price in the aggregate
amount of the Hong Kong dollar equivalent of US$3.0 million (excluding the brokerage,
SFC transaction levy, AFRC transaction levy and Stock Exchange trading fee in respect of
such number of H Shares);
(w) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Taikang Life Insurance Co., Ltd, China International Capital Corporation
Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited,
pursuant to which Taikang Life Insurance Co., Ltd agreed to subscribe for such number of
H Shares at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of
US$8.0 million (excluding the brokerage, SFC transaction levy, AFRC transaction levy
and Stock Exchange trading fee in respect of such number of H Shares);
(x) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Value Partners Hong Kong Limited, China International Capital Corporation
Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited,
pursuant to which Value Partners Hong Kong Limited agreed to subscribe for such
number of H Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US$10.1 million (excluding the brokerage, SFC transaction levy, AFRC
transaction levy and Stock Exchange trading fee in respect of such number of H Shares;
VI-7


--- page 496 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
(y) the cornerstone investment agreement dated June 15, 2026 entered into among the
Company, Value Partners Limited, China International Capital Corporation Hong Kong
Securities Limited and Huatai Financial Holdings (Hong Kong) Limited, pursuant to
which Value Partners Limited agreed to subscribe for such number of H Shares at the
Offer Price in the aggregate amount of the Hong Kong dollar equivalent of US$1.9 million
(excluding the brokerage, SFC transaction levy, AFRC transaction levy and Stock
Exchange trading fee in respect of such number of H Shares; and
(z) the Hong Kong Underwriting Agreement
VI-8


--- page 497 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
Intellectual Property Rights
Trademarks
As of the Latest Practicable Date, we had registered the following trademarks which we
consider to be material to our business:
No. Owner Trademark Registration No. Class Date of Registration Expiry Date
Place of
Registration
1. the Company
 62733945 9 January 14, 2023 January 13, 2033 PRC
2. the Company
 57924545 9 April 14, 2023 April 13, 2033 PRC
3. the Company
 56280718 9 D ecember 21, 2022 December 20, 2032 PRC
4. the Company
 57924548 9 A ugust 7, 2022 August 6, 2032 PRC
5. the Company
 57933792 9 July 21, 2022 July 20, 2032 PRC
6. the Company
 49829632 9 October 14, 2021 October 13, 2031 PRC
7. the Company
 49828369 42 September 14, 2021 September 13, 2031 PRC
8. the Company
 49235559 9 April 7, 2021 April 6, 2031 PRC
9. the Company
 31837749 9 February 7, 2020 February 6, 2030 PRC
10. the Company
 31690516 37 March 21, 2019 March 20, 2029 PRC
11. the Company
 31693179 35 March 21, 2019 March 20, 2029 PRC
12. the Company
 31695296 38 March 21, 2019 March 20, 2029 PRC
13. the Company
 31680787 42 March 21, 2019 March 20, 2029 PRC
14. the Company
 25043557 9 June 28, 2018 June 27, 2028 PRC
15. the Company
 24415392 35 May 28, 2018 May 27, 2028 PRC
16. the Company
 24414729 42 May 28, 2018 May 27, 2028 PRC
17. the Company
 24219927 9 May 14, 2018 May 13, 2028 PRC
18. the Company
 6522791 9 April 7, 2010 April 6, 2030 PRC
19. the Company
 6522788 9 April 7, 2010 April 6, 2030 PRC
VI-9


--- page 498 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
No. Owner Trademark Registration No. Class Date of Registration Expiry Date
Place of
Registration
20. the Company
 304167685 9 A ugust 17, 2018 June 8, 2027 Hong Kong
21. the Company
 4738202 9 May 19, 2015 May 18, 2035 USA
22. the Company
 40-1316810 9 D ecember 28, 2017 December 28, 2027 South Korea
23. the Company
 2017-77128 9 March 23, 2018 March 22, 2028 Japan
24. the Company
 302017105765 9 July 6, 2017 July 5, 2027 Germany
25. the Company
 304579976 9 November 26, 2018 June 27, 2028 Hong Kong
26. the Company
 302019105422 9 April 24, 2019 April 24, 2029 Germany
27. the Company
 305224842 9 A ugust 14, 2020 March 18, 2030 Hong Kong
28. the Company
 02195824 9 January 16, 2022 January 15, 2032 Taiwan,
China
29. the Company
 02195852 9 January 16, 2022 January 15, 2032 Taiwan,
China
30. the Company
 305719113 9 February 14, 2022 August 15, 2031 Hong Kong
31. the Company
 305719104 9 February 14, 2022 August 15, 2031 Hong Kong
Patents
As of the Latest Practicable Date, we had registered the following patents which we consider to
be material to our business:
No. Owner Patent Name
Patent
Type Patent No.
Date of
Registration
Place of
Registration
1. the Company A multi-phase DC-DC converter ( ɓ၇ε
ЗDC-DCᔷ౬ኜ)
Invention
patent
ZL202011553761.1 May 23, 2025 PRC
2. the Company Over-current protection circuit and over-
current protection method for DC power
supply (DC
ڭݴ
ج)
Invention
patent
ZL202011398532.7 May 9, 2025 PRC
3. the Company Power conversion circuit of multi-phase
power supply as well as multi-phase
power supply and control method thereof
(
ཥ๕ʿՉ
ج)
Invention
patent
ZL202110383005.7 April 11, 2025 PRC
4. the Company Power supply monitoring circuit and
switching power supply ( ཥ๕္છཥ༩ʿ
කᗫཥ๕)
Invention
patent
ZL202011574949.4 January 10, 2025 PRC
5. the Company Switching converter and control circuit
thereof (කᗫᜊ౬ኜʿՉછՓཥ༩)
Invention
patent
ZL202011009456.6 January 10, 2025 PRC
6. the Company Oscillator for switching converter, and
switching converter (ࣈٙ
ጺኜձකᗫᜊ౬ኜ)
Invention
patent
ZL202011601971.3 January 10, 2025 PRC
7. the Company Device module, manufacturing method
thereof, and inductor-capacitor array ( ኜ
৬ΐ)
Invention
patent
ZL202110383001.9 January 3, 2025 PRC
VI-10


--- page 499 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
No. Owner Patent Name
Patent
Type Patent No.
Date of
Registration
Place of
Registration
8. the Company The method, apparatus, computer-
readable storage medium and terminal for
triggering of a flash lamp (
৪Έዱˏ৪˙
ၑዚ̙ᛘπᎷʧሯʿ୞၌)
Invention
patent
ZL202010083970.8 December 10, 2024 PRC
9. the Company

Guangdong
Xintaochip
Microelectronics
Co., LTD
Power module and packaging integration
method thereof (
ༀණϓ˙
ج)
Invention
patent
ZL201811288902.4 December 10, 2024 PRC
10. the Company Linear regulator and power management
chip (˪)
Invention
patent
ZL202110095761.X December 6, 2024 PRC
11. the Company Power converter and control circuit
thereof (̌ଟᜊ౬ኜʿՉછՓཥ༩)
Invention
patent
ZL202010636386.0 November 12, 2024 PRC
12. the Company Polling detection circuit and method
based on battery protection chip and
battery protection chip (
˪
˪)
Invention
patent
ZL202011163786.0 November 12, 2024 PRC
13. the Company Low dropout linear regulator (׌
ᖢᏀኜ)
Invention
patent
ZL202110640833.4 November 12, 2024 PRC
14. the Company Switching converter, control circuit and
control method thereof ( කᗫᜊ౬ኜʿՉછ
ج)
Invention
patent
ZL202011130920.7 October 18, 2024 PRC
15. the Company Operational amplifier, integrated circuit,
and method for generating internal power
supply of operational amplifier (
ɽ
ʫ௅ཥ๕ପ
ج
)
Invention
patent
ZL202011398531.2 October 18, 2024 PRC
16. the Company Envelope synthetic power and RF power
module with envelope synthetic power
(
᎖
̌ଟᅼ෯)
Invention
patent
ZL202011626961.5 October 18, 2024 PRC
17. the Company Output stage circuit and Class AB
amplifier (፩̈ॴཥ༩ձABɽኜ)
Invention
patent
ZL202011451032.5 October 15, 2024 PRC
18. the Company Multi-phase switching converter and
control circuit thereof (කᗫᜊ౬ኜʿ
ՉછՓཥ༩)
Invention
patent
ZL202111261865.X October 15, 2024 PRC
19. the Company Reference voltage generating circuit and
generating method thereof ( ਞϽཥᏀପ͛
ج)
Invention
patent
ZL202011450867.9 August 30, 2024 PRC
20. the Company Battery protection circuit (ᚐཥ༩) Invention
patent
ZL201911423242.0 August 30, 2024 PRC
21. the Company Analog-to-digital converter and analog-
to-digital conversion method ( ᅼᅰᔷ౬ኜ
ج)
Invention
patent
ZL202011592183.2 August 30, 2024 PRC
22. the Company Battery protection chip, short circuit retry
protection control circuit and method
thereof (
ᚐછ
ج)
Invention
patent
ZL202011163787.5 August 30, 2024 PRC
23. the Company Test device for low dropout linear
regulator (಻༊ༀໄ)
Invention
patent
ZL202110235868.X July 12, 2024 PRC
24. the Company An analog-to-digital converter and
operation method thereof ( ɓ၇ᅼᅰᔷ౬
ج)
Invention
patent
ZL202111617749.7 June 28, 2024 PRC
25. the Company Charge pump circuit (ཥ༩) Invention
patent
ZL202011575690.5 June 21, 2024 PRC
26. the Company Driving circuit, load switching circuit and
power supply module of power transistor
(
༱කᗫཥ༩˸
ʿཥ๕ᅼ෯)
Invention
patent
ZL202311352706.X June 18, 2024 PRC
27. the Company Motor drive circuit ( ཥዚᚨਗཥ༩) Invention
patent
ZL202011538311.5 June 18, 2024 PRC
28. the Company Detection circuit and power supply circuit
for DC-DC converter (׵DC-DCᔷ౬ኜ
Ꮸ಻ཥ༩ձԶཥཥ༩)
Invention
patent
ZL202210814789.9 May 14, 2024 PRC
29. the Company DC-DC converter (DC-DC ᜊ౬ኜ) Invention
patent
ZL202210983558.0 May 14, 2024 PRC
VI-11


--- page 500 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
No. Owner Patent Name
Patent
Type Patent No.
Date of
Registration
Place of
Registration
30. the Company Power supply circuit, display panel and
display device (ʿᜑ
ͪༀໄ)
Invention
patent
ZL202110145442.5 May 10, 2024 PRC
31. the Company Circuit for beam splitting protection of
power input and output ( ࿁ཥ๕፩ɝ፩̈
ཥ༩)
Invention
patent
ZL201710172963.3 April 16, 2024 PRC
32. the Company Resistance circuit and variable gain
amplification circuit (ཥ༩ձ̙ᜊᄣू
ɽཥ༩)
Invention
patent
ZL201811042171.5 September 12, 2023 PRC
33. the Company Controller and control method of
thermoelectric cooler/heater (ߧ
ج)
Invention
patent
ZL202010929394.4 August 22, 2023 PRC
34. the Company LED drive circuit and control circuit
thereof (LEDᚨਗཥ༩ʿՉછՓཥ༩)
Invention
patent
ZL201910785173.1 May 26, 2023 PRC
35. the Company Signal processing circuit (໮ஈଣཥ༩) Invention
patent
ZL202010910031.6 April 7, 2023 PRC
36. the Company DC trimming module and bandgap
reference circuit with DC trimming (ݴٜ
ཥ༩)
Invention
patent
ZL201911419599.1 October 14, 2022 PRC
37. the Company Output stage circuit and Class AB
amplifier (፩̈ॴཥ༩ձABɽኜ)
Invention
patent
ZL201911415378.7 October 14, 2022 PRC
38. the Company THD reduction output stage circuit of low
voltage operational amplifier based on
CMOS technology (
׵CMOSЭ
ЭTHD፩̈ॴཥ༩)
Invention
patent
ZL201910743261.5 September 30, 2022 PRC
39. the Company Startup or anti-stalling method of direct
current brush motor (ٙ
ج)
Invention
patent
ZL201911401634.7 July 12, 2022 PRC
40. the Company Low dropout linear regulator with high
power supply rejection ratio ( ৷ཥ๕ҵՓ
ᖢᏀኜ)
Invention
patent
ZL201910995503.X April 1, 2022 PRC
41. the Company Switching power supply, ringing
cancellation circuit and ringing canceling
method thereof (
ཕऊৰཥ
ج)
Invention
patent
ZL201910705901.3 October 15, 2021 PRC
42. the Company A method for generating PWM signal for
driving LED ( ɓ၇ᚨਗ LEDٙPWMڦ
ج)
Invention
patent
ZL201810264085.2 September 24, 2021 PRC
43. the Company Low temperature-drift precision current
generation circuit (ପ͛ཥ
༩)
Invention
patent
ZL201611215678.7 January 23, 2018 PRC
44. the Company;
SG MICRO
SUZHOU CO.,
LTD. (
ᘽψ໋Ԟ
ʮ̡)
Single inductor positive and negative
voltage output device (ཥᏀ፩
̈ༀໄ)
Invention
patent
ZL201410429174.X January 18, 2017 PRC
45. the Company Single inductor positive and negative
voltage output device (ཥᏀ፩
̈ༀໄ)
Invention
patent
KR10-1845337 March 29, 2018 South
Korea
46. the Company Single inductor positive and negative
voltage output device (ཥᏀ፩
̈ༀໄ)
Invention
patent
US9960682 May 1, 2018 USA
47. the Company Switching power supply, control circuit
and control method thereof ( කᗫཥ๕ʿՉ
ج)
Invention
patent
US11990828 B2 May 21, 2024 USA
48. the Company Switching converter and low voltage
startup circuit thereof ( කᗫᜊ౬ኜʿՉЭ
Ꮐ઼ਗཥ༩)
Invention
patent
US11929667 B2 March 12, 2024 USA
49. the Company Low dropout linear regulator with high
power supply rejection ratio ( ৷ཥ๕ҵՓ
ᖢᏀኜ)
Invention
patent
US11994887 B2 May 28, 2024 USA
50. the Company A low dropout linear voltage regulator
and control circuit thereof (ᇞ
ᖢᏀኜʿՉછՓཥ༩)
Invention
patent
US11971734 B2 April 30, 2024 USA
51. the Company Polling detection circuit and method
based on battery protection chip and
battery protection chip (
˪
˪)
Invention
patent
US12174261 B2 December 24, 2024 USA
VI-12


--- page 501 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
No. Owner Patent Name
Patent
Type Patent No.
Date of
Registration
Place of
Registration
52. the Company Reading circuit for differential OTP
memory (ۨOTPᛘ՟ཥ
༩)
Invention
patent
US12249382 B2 March 11, 2025 USA
53. the Company Monostable circuit ( ఊᖢ࿒ཥ༩) Invention
patent
US12334927 B2 June 17, 2025 USA
54. the Company Voltage Regulation Control Circuit for
Voltage Regulator Circuit and Voltage
Regulator Circuit (
ሜ
ᏀછՓཥ༩ʿᖢᏀཥ๕ཥ༩)
Invention
patent
ZL202310436594.X December 30, 2025 PRC
55. the Company Short-Circuit Protection Circuit for Power
Transistor (ᚐཥ༩)
Invention
patent
ZL202411997632.X December 9, 2025 PRC
56. the Company Chip with Fully Wrapped Isolation for
Signal Lines, Method and Chip
Manufacturing Method (
໮ᇞΌ̍
ج)
Invention
patent
ZL202110546229.5 December 2, 2025 PRC
57. the Company Low-Voltage Differential Signaling
(LVDS) Communication System and
Driver Thereof (
ӻ୕ʿ
Չᚨਗኜ)
Invention
patent
ZL202411718771.4 November 14, 2025 PRC
58. the Company Sigma-Delta Analog-to-Digital Converter
and Quantization Circuit Thereof (Sigma-
Delta
ᅼᅰᔷ౬ኜʿՉඎʷཥ༩)
Invention
patent
ZL202311511362.2 November 14, 2025 PRC
59. the Company Integrated Circuit Assembly and
Packaging Assembly Thereof ( ණϓཥ༩ଡ଼
ༀଡ଼΁)
Invention
patent
ZL202011555288.0 November 14, 2025 PRC
60. the Company IPD Filter Based on 5G Communication
N79 Frequency Band and Manufacturing
Method Thereof (
׵5GڦN79᎖
ٙݬIPDج)
Invention
patent
ZL202310146621.X October 17, 2025 PRC
61. the Company Soft Turn-Off Control Circuit and
Method in Isolated Driver Chip, and
Isolated Driver Chip (
ழ
˪)
Invention
patent
ZL202411639163.4 September 30, 2025 PRC
62. the Company Integrated Circuit, Digital-to-Analog
Converter and Driving Method Thereof
(
ج)
Invention
patent
ZL202011515687.4 September 5, 2025 PRC
63. the Company Testing Apparatus and Method for High-
Precision Analog-to-Digital Conversion
Chip (
಻༊ༀໄձ಻
ج)
Invention
patent
ZL202010935169.1 September 5, 2025 PRC
64. the Company Control Circuit and Control Method with
Current-Limiting Protection for
Switching Converter (
ٙ
ج)
Invention
patent
ZL202110794994.9 July 18, 2025 PRC
65. the Company Switching Converter and Control Circuit
Thereof (කᗫᜊ౬ኜʿՉછՓཥ༩)
Invention
patent
ZL202110789542.1 July 18, 2025 PRC
66. the Company LDO Circuit with Switchable Power
Supply Terminal (ٙ
LDOཥ༩)
Invention
patent
ZL202111500920.6 July 18, 2025 PRC
67. the Company Switching Converter, Control Circuit and
Control Method Thereof ( කᗫᜊ౬ኜʿՉ
ج)
Invention
patent
ZL202011538413.7 June 13, 2025 PRC
68. the Company Temperature Detection Circuit (Ꮸ಻
ཥ༩)
Invention
patent
ZL202111661395.6 June 13, 2025 PRC
69. SG MICRO
SUZHOU CO.,
LTD.
Power Supply Voltage Switching Circuit
and Power Supply Voltage Switching
Method (
ཥ๕ཥᏀʲ౬ཥ༩ʿཥ๕ཥᏀʲ
ج)
Invention
patent
ZL202210848418.2 August 1, 2025 PRC
70. SG MICRO
SUZHOU CO.,
LTD.
Short-Circuit Recovery Soft-Start Circuit
for DC-DC Converter and DC-DC
Converter (
׵DC-DCܨ
ూழ઼ਗཥ༩˸ʿDC-DCᜊ౬ኜ)
Invention
patent
ZL202210887671.9 July 11, 2025 PRC
71. SHANGHAI
SG MICRO
CO., LTD. (
ޮ
̒ኬ᜗ɪऎ
ʮ̡
)
Inductor Current Reuse Detection Circuit
for DC-DC Converter and DC-DC
Converter (
׵DC-DCݴ
ል͜Ꮸ಻ཥ༩e˸ʿDC-DCᜊ౬ኜ)
Invention
patent
ZL202211216083.9 November 14, 2025 PRC
VI-13


--- page 502 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
No. Owner Patent Name
Patent
Type Patent No.
Date of
Registration
Place of
Registration
72. SHANGHAI
SG MICRO
CO., LTD.
Digital-to-Analog Conversion Circuit,
Chip and Electronic Equipment for
PWM-to-Analog Output Conversion
(PWM
ڃ
˪ʿཥɿண௪)
Invention
patent
ZL202211700884.2 September 9, 2025 PRC
73. the Company Controller and Control Method for
Thermoelectric Cooler-Heater (и
ج)
Invention
patent
US12449167 B2 October 21, 2025 USA
Integrated Circuit Layout Designs
As of the Latest Practicable Date, we had registered the following integrated circuit layout
designs which we consider to be material to our business:
No. Layout Owner Layout Design Name
Registration No.
of Layout Design
Date of
Registration
1. the Company High-speed dual-channel single-pole double-throw switch
(৷஺ᕐஷ༸ఊɠᕐᓓකᗫ)
BS.245010114 February 11,
2025
2. the Company Audio power amplifier (ɽኜ) BS.245011714 February 5,
2025
3. the Company High voltage, high precision, low noise rail-to-rail
operational amplifier (༶
ɽኜ)
BS.245009604 November 19,
2024
4. the Company Small-size, low-voltage comparator ( ʃˉʂdЭཥᏀˢ༰
ኜ)
BS.245009590 November 19,
2024
5. the Company Ultra-low noise, high PSRR linear regulator ( ൴Эኛᑊd
৷PSRRᖢᏀኜ)
BS.245009183 November 19,
2024
6. the Company High precision, low noise, low difference linear regulator
(ᖢᏀኜ)
BS.245009558 November 19,
2024
7. the Company Buck-Boost Charge Controller (Buck-Boost ̂ཥછՓኜ) BS.245009256 November 19,
2024
8. the Company Microprocessor monitoring circuit ( ฆஈଣኜ္છཥ༩) BS.245009353 November 19,
2024
9. the Company Microprocessor monitoring circuit ( ฆஈଣኜ္છཥ༩) BS.245009264 November 20,
2024
10. the Company Buck DC/DC Converter (ᏀDC/DCᔷ౬ኜ) BS.245008713 November 12,
2024
Domain Name
As of the Latest Practicable Date, we had registered the following internet domain name which
we consider to be material to our business:
No. Domain Name Registered Owner Place of Registration Registration Number
1. sg-micro.com the Company PRC Beijing Public Security
Network Security Record
No. 11010802046258;
Beijing ICP
Filing No. 08010133-2
VI-14


--- page 503 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
Particulars of Directors’ Service Contracts and Letters of Appointment
We have entered into a service contract or letter of appointment with each of our Directors in
respect of, among others, (i) term of service, (ii) termination, and (iii) dispute resolution mechanism.
Save as disclosed above, none of our Directors has or is proposed to have a service contract
with any member of our Group (other than contracts expiring or determinable by the relevant employer
within one year without the payment of compensation (other than statutory compensation)).
Remuneration of Directors
Save as disclosed in “Directors and Senior Management” in this prospectus and Note 9 to the
Accountants’ Report in Appendix I to this prospectus, none of our Directors received other
remuneration or benefits in kind from our Company in respect of the years ended December 31, 2023,
2024 and 2025.
Agency Fees or Commissions Received
The Underwriters will receive an underwriting commission in connection with the
Underwriting Agreements. See “Underwriting — Underwriting Arrangements and Expenses.” Save in
connection with the Underwriting Agreements, no commissions, discounts, agency fee, brokerages or
other special terms have been paid or is payable by the Group to any person (including the Directors,
promoters and experts referred to in the paragraph headed “— Other Information — Qualifications of
Experts” below in connection with the issue or sale of any capital or security of any member of our
Group within the two years immediately preceding the date of this prospectus.
Disclosure of Interests
Disclosure of Interests of Directors and Chief Executive of the Company
Save as disclosed below, immediately following the completion of the Global Offering
(assuming no exercise of the Over-allotment Option and no other changes are made to the issued share
capital of our Company between the Latest Practicable Date and the Listing), so far as our Directors
are aware, none of our Directors or chief executive of our Company will have any interest and/or short
position (as applicable) in the Shares, underlying Shares or debentures of our Company or our
associated corporation (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 are taken or deemed to have under such provisions of
the SFO) or which will be required, pursuant to Section 352 of the SFO, to be entered in the register
referred to therein, or which will be required, pursuant to the Model Code for Securities Transactions
by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules to be notified to our
Company and the Stock Exchange, once the H Shares are listed on the Stock Exchange.
VI-15


--- page 504 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
Name Position
Nature of
interest
Number and
description of
Shares(1)
Approximate
percentage of
interest in the
total issued
share capital of
our Company as
of the Latest
Practicable Date
Approximate
percentage of
interest in the
A Shares
immediately
following the
completion of
the Global
Offering(2)
Approximate
percentage of
interest in the
total issued
share capital of
our Company
immediately
following the
completion of
the Global
Offering(2)
Dr. Zhang ...... Executive
Director, Chairman
of the Board and
General Manager
Interest in
controlled
corporation
(3);
interest held jointly
with other persons
(4); interest of
spouse(5)
221,512,150
A Shares
35.67% 35.67% 32.82%
Ms. Zhang ..... Executive
Director, Deputy
Chairwoman of the
Board, Deputy
General Manager
and Secretary to
the Board
Beneficial owner;
interest in
controlled
corporation
(6);
interest held jointly
with other
persons
(4)
221,512,150
A Shares
35.67% 35.67% 32.82%
M r .L i nL i n .... Non-executive
Director
Beneficial owner;
interest held jointly
with other
persons
(4)
221,512,150
A Shares
35.67% 35.67% 32.82%
Ms. Liu Ming . . . Non-executive
Director
Interest in
controlled
corporation
(7)
43,648
A Shares
0.01% 0.01% 0.01%
Notes:
(1) All interests stated are long positions.
(2) The calculation is based on the total number of 675,015,824 Shares in issue immediately following the completion of the Global Offering
(assuming that the Over-allotment Option is not exercised and no other changes are made to the issued share capital of our Company
between the Latest Practicable Date and the Listing).
(3) As of the Latest Practicable Date, Hongshun Xiangtai was wholly owned by Dr. Zhang. As a result, Dr. Zhang is deemed to be interested
in the 117,449,624 A Shares held by Hongshun Xiangtai.
(4) Pursuant to the Concert Party Agreement dated June 10, 2015, as amended and supplemented by the Supplemental Agreement to the
Concert Party Agreement dated January 21, 2021, Hongshun Xiangtai (wholly owned by Dr. Zhang), Baoli Hongya (wholly owned by
Ms. Zhang) , Power Trend (indirectly wholly owned by Ms. Wen Li), Ms. Zhang and Mr. Lin Lin agreed that, among others, for so long
as Hongshun Xiangtai remains a Shareholder, they would act in concert with Hongshun Xiangtai in respect of matters related to business
decisions, including exercising voting rights at the Shareholders’ meetings, the right to submit proposals to the Board and the
Shareholders’ meetings, and the right to nominate Directors, independent Directors, and supervisors. As a result, each of Hongshun
Xiangtai, Baoli Hongya, Power Trend, Dr. Zhang, Ms. Zhang, Mr. Lin Lin and Ms. Wen Li was deemed to be interested in all the Shares
in which each of them is interested under the SFO.
(5) As of the Latest Practicable Date, Dr. Zhang’s spouse, Ms. Wen Li, indirectly held 28,792,495 A Shares in the Company. By virtue of
the SFO, Dr. Zhang is deemed to be interested in the Shares held by his spouse.
(6) As of the Latest Practicable Date, Baoli Hongya was wholly owned by Ms. Zhang. As a result, Ms. Zhang is deemed to be interested in
the 50,712,118 A Shares held by Baoli Hongya.
(7) As of the Latest Practicable Date, Ms. Liu Ming was the general partner of Beijing Gaodi Datian Investment Management Center
(Limited Partnership) (
༺˂ҳ༟၍ଣʕː(Υྫ)). As a result, Ms. Liu is deemed to be interested in the 43,648 A Shares held
by Beijing Gaodi Datian Investment Management Center (Limited Partnership).
Disclosure of Interests of Substantial Shareholders
(a) Interests in our Company
Save as disclosed in “Substantial Shareholders,” immediately following the completion of the
Global Offering (assuming no exercise of the Over-allotment Option and no other changes are made to
the issued share capital of our Company between the Latest Practicable Date and the Listing), our
Directors are not aware of any other person (not being a Director or chief executive of our Company)
VI-16


--- page 505 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
who will have interest and/or short position (as applicable) in the Shares or the underlying Shares
which would fall to be disclosed to us and the Stock Exchange under the provisions of Divisions 2
and 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10% or more of the issued
voting shares of our Company.
(b) Interests of the Substantial Shareholders of Other Members of Our Group
As of the Latest Practicable Date, so far as our Directors are aware, the following persons
(other than our Directors or chief executive of our Company) were interested in 10% or more of the
nominal value of any class of share capital carrying rights to vote in all circumstances at general
meetings of other member of our Group:
Name of Members of our Group Name of Shareholder(s)
Percentage of
Shareholding
SHEN AN MICRO CO., LTD. (ψଉፚฆ
ʮ̡)
Hangzhou Lixin Enterprise Management
Consulting Partnership (Limited
Partnership) (
ψᎸอΆุ၍ଣፔ༔ΥྫΆ
Υྫ)
14.40%
SHEN AN MICRO CO., LTD. (ψଉፚฆ
ʮ̡)
Harmonious Surpassing Small and
medium-sized Enterprise Development
Fund (Yixing) Partnership (Limited
Partnership) (
ږ
Υྫ)
10.00%
SHEN AN MICRO CO., LTD. (ψଉፚฆ
ʮ̡)
Hangzhou Lixing Enterprise Management
Partnership (Limited Partnership) (ψᎸ
Υྫ)
10.00%
GANRUI TECH (CHANGZHOU) CO.,
LTD. (ʮ̡)
GLW Technology Limited (ࠢ
ʮ̡)
22.6872%
TeraDevices Inc. (ࠢ
ʮ̡)
Yuan Qingpeng ( ঺ᅅᘄ) 22.4582%
Disclaimers
(i) Save as disclosed in “History, Development and Corporate Structure,” none of our Directors
nor any of the experts referred to under the paragraph headed “— Other Information —
Qualifications 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.
(ii) Save in connection with the Underwriting Agreements, none of our Directors is materially
interested in any contract or arrangement subsisting at the date of this prospectus which is
significant in relation to the business of our Group taken as a whole.
(iii) Save in connection with the Underwriting Agreements, none of the experts referred to
under the paragraph headed “— Other Information — Qualifications of Experts” below is
interested legally or beneficially in any shares in any member of the Group, or has any
right (whether legally enforceable or not) to subscribe for or to nominate persons to
subscribe for any securities in any member of the Group.
VI-17


--- page 506 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
(iv) Save as disclosed in “Relationship with our Controlling Shareholders,” none of our
Directors is a director or employee of a company that has an interest in the share capital of
our Company which, once the H Shares are listed on the Stock Exchange, would have to
be disclosed pursuant to Divisions 2 and 3 of Part XV of the SFO.
(v) Save as disclosed in “Business,” so far as is known to our Directors, none of our Directors
or their respective close associates (as defined under the Listing Rules) or our
Shareholders who are interested in more than 5% of the issued share capital of our
Company has any interest in the five largest customers or the five largest suppliers of our
Group during the Track Record Period.
SHARE INCENTIVE PLANS
The following is a summary of the key terms of the Share Incentive Plans currently being
implemented by our Company, including the 2021 Share Incentive Plan, the 2022 Share Incentive
Plan, the 2023 Share Incentive Plan, the 2025 Share Incentive Plan and the 2025 Second Tranche Share
Incentive Plan. The terms of Share Incentive Plans do not involve any grant of Share Incentives by our
Company after the Listing and are not subject to the provisions of Chapter 17 of the Listing Rules. The
terms of the Share Incentive Plans are summarized below.
Purpose
The purposes of the Share Incentive Plans are to further establish and improve our long-term
incentive mechanism, attract and retain outstanding talents, and fully motivate their enthusiasm and
innovation to enhance cohesion and core competitiveness of our Company. The Share Incentive Plans
are implemented to align the interests of our Shareholders, our Company and our core team members,
which is beneficial to the sustainable development of our Group and ensures the realization of our
development strategy and business objectives.
Type of Share Incentives
The Share Incentives are granted in two forms: (i) restricted stocks and (ii) stock options. Under
the 2021 Share Incentive Plan, we may grant restricted stocks to eligible participants. Under the 2022
Share Incentive Plan, the 2023 Share Incentive Plan, the 2025 Share Incentive Plan and the 2025
Second Tranche Share Incentive Plan, we may grant stock options to eligible participants.
The A Shares underlying the restricted stocks or the stock options under the Share Incentive
Plans can only be issued after the vesting or exercise thereof.
Administration
Each of the Share Incentive Plans is subject to the approval of our Company’s general meeting,
administration of the Board and the supervision of the Company’s supervisory committee and
independent non-executive Directors.
Participants
Participants under the Share Incentive Plans include (as the case may be), (i) core management
personnels, (ii) core technical/business employees, and (iii) senior management members of our
VI-18


--- page 507 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
Company, but do not include (i) independent non-executive Directors, (ii) supervisors, and
(iii) Shareholders who, individually or in aggregate, holding 5% or more of the Shares of our
Company, or actual controller(s) and their respective spouse, parents and children.
Source and Maximum Number of Shares
The underlying Shares for the Share Incentives are new A Shares to be issued by our Company.
The number of Shares granted to any individual grantee under all the share incentive plans of our
Company currently in effect shall not exceed 1% of our Company’s total share capital.
Subject to the adjustment mechanisms set out in the section headed “— Adjustment” below, the
maximum number of Share Incentives initially available to be granted under each Share Incentive Plan
is as follows:
Share Incentive Plan
Maximum number of
Shares corresponding to
initial Share Incentives
that may be granted
2021 Share Incentive Plan ............................................. 2,100,000 A Shares
2022 Share Incentive Plan ............................................. 4,760,000 A Shares
2023 Share Incentive Plan ............................................. 10,325,000 A Shares
2025 Share Incentive Plan ............................................. 12,500,000 A Shares
2025 Second Tranche Share Incentive Plan ............................... 12,700,000 A Shares
Save for the Share Incentives that have already been granted under the Share Incentive Plans
and disclosed in this prospectus, there are no additional Share Incentives available for grant under the
Share Incentive Plans.
Date of Grant and Term of the Plan
The grant date of Share Incentives shall be determined by the Board after the approval of the
Share Incentive Plans by the Shareholders at a general meeting. Unless otherwise stipulated by laws
and regulations, the grant date must be a trading day of the Shenzhen Stock Exchange. The grant of
Share Incentives is subject to the approval of the Board and shall be registered and announced within
60 days after the approval of the Share Incentive Plans at a general meeting.
The term of the Share Incentive Plans shall commence from the date of the completion of the
first tranche of the grant of Share Incentives under the relevant plans and continue until the Share
Incentives are fully exercised, canceled, vested, or lapsed, whichever is earlier. This term shall not
exceed 72 months or 75 months, as applicable.
Conditions to the Grant of Share Incentives
Share Incentives will only be granted to eligible participants if the following conditions are
fulfilled:
(i) With respect to our Company, none of the following circumstances having occurred:
(a) an audit report with an adverse opinion or a disclaimer of opinion has been issued by
the certified public accountant with respect to our accountant’s report for the most
recent fiscal year;
(b) an audit report with an adverse opinion or a disclaimer of opinion has been issued by
the certified public accountant with respect to the internal control report contained in
accountant’s report for the most recent fiscal year;
VI-19


--- page 508 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
(c) our Company has failed to distributed profits in accordance with the laws and
regulations, our Articles of Association or our public commitment within the last
36 months after its listing on the Shenzhen Stock Exchange;
(d) implementation of any share incentive plan is prohibited under applicable laws and
regulations; or
(e) any other circumstances determined by the CSRC.
(ii) With respect to a grantee, none of the following circumstances having occurred:
(a) he or she has been regarded as an inappropriate participant by a stock exchange
within the last 12 months;
(b) he or she has been regarded as an inappropriate participant by the CSRC or its local
office within the last 12 months;
(c) he or she has been punished or prohibited from entering into the securities market by
the CSRC or its local office due to material non-compliance of laws and regulations
within the last 12 months;
(d) he or she is not qualified to serve as a director or senior management according to the
PRC Company Law;
(e) he or she is prohibited from participating in any share incentive plans of listed
companies according to applicable laws and regulations; or
(f) any other circumstances determined by the CSRC.
No consideration is paid/payable for the eligible participants to be granted Share Incentives
under the Share Incentive Plans.
Lock-up Arrangements
The lock-up arrangements under the Share Incentive Plans are determined according to the
Articles of Association and applicable PRC laws and regulations:
(i) if the grantee is a Director or a senior management of our Company, the Shares to be
transferred each year during his or her tenure shall not exceed 25% of the total Shares he
or she holds. No Shares held by such Director or senior management may be transferred
within six months after termination of his or her employment;
(ii) if the grantee is a Director or senior management of our Company, income gained through
sale of Shares within six months of the purchase or repurchase of Shares of our Company
within six months of the sale, shall belong to our Company and be reclaimed by the Board;
and
(iii) if there is any change in the applicable laws and regulations or the relevant provisions of
the Articles of Association on the foregoing lock-up requirements within the term of the
Share Incentive Plan, the grantee shall comply with the amended laws and regulations and
the Articles of Association.
VI-20


--- page 509 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
Vesting/Exercise of Share Incentives
The Share Incentives will be vested or exercised when (i) the conditions set out in the section
headed “— Conditions to the Grant of Share Incentives” above are fulfilled; and (ii) the performance
targets of our Company and the grantees as set out under the relevant plans are achieved. The granted
Share Incentives will be vested/exercised in accordance with the schedules under the relevant plans
after the lock-up period as follows:
Share Incentive Plan Type of Share Incentives
Vesting schedule (for restricted
stock) and exercise schedule
(for stock options)
2021 Share Incentive Plan Restricted stocks The restricted stocks may be vested in four tranches of
22%, 24%, 26% and 28% during the respective 12-month
periods between the first trading date after the 12 months
from the date of grant and the last trading day within the
60 months of the date of grant.
2022 Share Incentive Plan Stock options The stock options, may be exercised in four tranches of
22%, 24%, 26% and 28% during the respective 12-month
periods between the first trading date after the 15 or 12
months (as the case may be) from the date of grant and the
last trading day within the 63 or 60 months (as the case
may be) of the date of grant.
2023 Share Incentive Plan,
2025 Share Incentive Plan
and 2025 Second Tranche
Share Incentive Plan
Stock options The stock options may be exercised in four tranches of
22%, 24%, 26% and 28% during the respective 12-month
periods between the first trading date after the 12 months
from the date of grant and the last trading day within the
60 months of the date of grant.
Grant Price or Exercise Price
The grant/exercise price of each Share Incentive shall not be lower than the nominal value of
each A Share and, in principle, shall not be lower than (as the case may be stipulated in the relevant
Share Incentive Plans):
Share Incentive Plan
Type of Share
Incentives
Grant price (for restricted stock) and
exercise price (for stock options)
2021 Share Incentive Plan Restricted stocks (i) RMB200 per Share; or
(ii) should be no less than 50% of the average trading
price of the A Shares over the following periods prior to
the announcement of the Share Incentive Plans: (A) one
trading day or (B) 20, 60 or 120 trading days
2022 Share Incentive Plan Stock options (i) RMB133 per Share; or
(ii) should be no less than 75% of the average trading
price of the A Shares over the following periods prior to
the announcement of the Share Incentive Plans: (A) one
trading day or (B) 20, 60 or 120 trading days
2023 Share Incentive Plan Stock options (i) RMB66 per Share; or
(ii) should be no less than 75% of the average trading
price of the A Shares over the following periods prior to
the announcement of the Share Incentive Plans: (A) one
trading day or (B) 20, 60 or 120 trading days
VI-21


--- page 510 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
Share Incentive Plan
Type of Share
Incentives
Grant price (for restricted stock) and
exercise price (for stock options)
2025 Share Incentive Plan Stock options (i) RMB96 per Share; or
(ii) should be no less than 75% of the average trading
price of the A Shares over the following periods prior to
the announcement of the Share Incentive Plans: (A) one
trading day or (B) 20, 60 or 120 trading days
2025 Second Tranche Share
Incentive Plan
Stock options (i) RMB72.6 per Share; or
(ii) should be no less than 75% of the average trading
price of the A Shares over the following periods prior to
the announcement of the Share Incentive Plans: (A) one
trading day or (B) 20, 60 or 120 trading days
Adjustment
Subject to the other terms and conditions contained in the Share Incentive Plans, the number
and/or exercise price of granted Share Incentives may be adjusted upon the occurrence of certain
events from the date of the announcement of the relevant Share Incentive Plan to the completion of
relevant registration or exercise by the grantee. These events include, as the case may be,
(i) capitalization of reserves, (ii) distribution of stock dividends, (iii) distribution of cash dividends,
(iv) share subdivision, and (v) share issuance or share consolidation.
Outstanding Share Incentives
As of the Latest Practicable Date, the number of the outstanding Share Incentives granted under
the Share Incentive Plans was 29,363,143, representing approximately 4.35% of the issued Shares
immediately following the completion of the Global Offering (assuming the Over-allotment Option is
not exercised and no other changes are made to the issued share capital of our Company between the
Latest Practicable Date and the Listing). If all outstanding Share Incentives granted under the Share
Incentive Plans (including both the restricted stocks and the stock options) are fully vested or
exercised, assuming the Over-allotment Option is not exercised and no other changes are made to the
issued share capital of our Company between the Latest Practicable Date and the Listing, the issued
and outstanding Shares held by Shareholders following completion of the Global Offering will be
diluted by approximately 4.17%. The dilutive effect on our earnings per share will be
approximately 4.17%.
VI-22


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APPENDIX VI STATUTORY AND GENERAL INFORMATION
The following table sets forth the details of outstanding Share Incentives granted to all grantees
(including Directors, senior management members, other connected persons and employees of our
Company) under the Share Incentive Plans as of the Latest Practicable Date.
Grantee
Position in
our Group Address
Date of
grant
Type of
Share
Incentives
Number of
outstanding
Share
Incentives
Grant/
Exercise
price (per
Share)(2)
Vesting
period
(for
restricted
stocks) /
Exercise
period
(for stock
options)
Approximately
% of the
issued Shares
immediately
after the
Global
Offering(1)
Director or senior management members
Ms. Zhang
Xuan .........
Finance
Director of the
Company
Room 402
Building 1
Xinfeng North
Street
Xicheng District
Beijing
PRC
August 17, 2022 Stock options 22,714 RMB78.09 15 months 0.00%*
September 13, 2023 Stock options 56,160 RMB50.34 12 months 0.01%
June 11, 2025 Stock options 104,000 RMB55.49 12 months 0.02%
March 27, 2026 Stock options 50,000 RMB57.80 12 months 0.01%
Other grantees
Employees ......— — — Stock options/
restricted
stocks
29,130,269 — — 4.32%
Total .......... 29,363,143 4.35%
(1) Assuming (i) the Over-allotment Option is not exercised and (ii) no other changes are made to the issued share capital of our Company
between the Latest Practicable Date and the Listing.
(2) Adjusted from the initial grant/exercise price due to distribution of dividends by the Company pursuant to the terms of the relevant Share
Incentive Plans.
* Denotes less than 0.005%
VI-23


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APPENDIX VI STATUTORY AND GENERAL INFORMATION
The following table sets forth the details of outstanding Share Incentives granted to other
grantees (excluding Directors, senior management members and other connected persons of our
Company) under the Share Incentive Plans, categorized by the number of underlying A Shares, as of
the Latest Practicable Date:
Range of outstanding Share Incentives
Number of
grantees
Number of
outstanding Share
Incentives
Grant/Exercise
price (per Share)
Vesting Period (for
restricted stocks)/
Exercise period
(for stock options)
Approximately %
of the issued
Shares
immediately after
the Global
Offering(1)
1 to 29,999 ........... 1,438 12,343,835 RMB78.09 12 months 1.83%
RMB78.09 15 months
RMB50.34 12 months
RMB44.26 12 months
RMB73.49 12 months
RMB55.49 12 months
RMB57.80 12 months
30,000 to 99,999 ......... 2 0 1 10,155,699 RMB78.09 12 months 1.50%
RMB78.09 15 months
RMB50.34 12 months
RMB44.26 12 months
RMB73.49 12 months
RMB55.49 12 months
RMB57.80 12 months
100,000 and above ........ 3 5 6,630,735 RMB78.09 12 months 0.98%
RMB78.09 15 months
RMB50.34 12 months
RMB44.26 12 months
RMB73.49 12 months
RMB55.49 12 months
RMB57.80 12 months
Total ................. 1,674 29,130,269 4.32%
(1) Assuming (i) the Over-allotment Option is not exercised and (ii) no other changes are made to the issued share capital of our Company
between the Latest Practicable Date and the Listing.
VI-24


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APPENDIX VI STATUTORY AND GENERAL INFORMATION
The following table sets forth the details of outstanding Share Incentives granted to other
grantees (excluding our Directors, senior management members and connected persons) under each
Share Incentive Plan as of the Latest Practicable Date:
Share Incentive Plans
Date of
grant
Type of
Share
Incentives
Number
of
grantees(2)
Number of
A Shares
underlying
the
outstanding
Share
Incentives
Grant/
Exercise
price (per
Share)(3)
Vesting Period
(for restricted
stocks)/
Exercise
period (for
stock options)
Approximately
% of the
issued Shares
immediately
after the
Global
Offering (1)
2021 Share Incentive
Plan ............ April 14, 2022 Restricted stocks 255 397,948 RMB78.09 12 months 0.06%
2022 Share Incentive
Plan ............ August 17, 2022 Stock options 582 1,312,884 RMB78.09 15 months 0.19%
2023 Share Incentive
Plan ............
September 13, 2023 Stock options 1,028 5,618,488 RMB50.34 12 months 0.83%
August 29, 2024 Stock options 454 2,033,529 RMB44.26 12 months 0.30%
2025 Share Incentive
Plan ............M a y6 , 2025 Stock options 15 314,340 RMB73.49 12 months 0.05%
2025 Second Tranche
Share Incentive
Plan ............ June 11, 2025 Stock options 1,440 12,951,380 RMB55.49 12 months 1.92%
2025 Share Incentive
Plan ............ March 27, 2026 Stock options 434 3,199,900 RMB57.80 12 months 0.47%
2025 Second Tranche
Share Incentive
Plan ............ March 27, 2026 Stock options 496 3,301,800 RMB57.80 12 months 0.49%
Total ......... 29,130,269 4.32%
(1) Assuming (i) the Over-allotment Option is not exercised and (ii) no other changes are made to the issued share capital of our Company
between the Latest Practicable Date and the Listing.
(2) The individual grantees may have Share Incentives granted in one or more of the Share Incentive Plans.
(3) Adjusted from the initial grant/exercise price due to distribution of dividends by the Company pursuant to the terms of the relevant Share
Incentive Plans.
OTHER INFORMATION
Estate Duty
Our Directors have been advised that no material liability for estate duty is likely to fall on our
Company or any of our subsidiaries.
Litigation
As of the Latest Practicable Date, no member of our Group was involved in any litigation,
arbitration, administrative proceedings or claims of material importance, and so far as we are aware, no
litigation, arbitration, administrative proceedings or claims of material importance are pending or
threatened against any member of our Group.
Joint Sponsors
Each of the Joint Sponsors satisfy the independence criteria applicable to sponsors set out in
Rule 3A.07 of the Listing Rules. A fee of US$600,000 is payable by our Company to the Joint
Sponsors to act as the sponsors to our Company in connection with the Listing.
VI-25


--- page 514 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
Preliminary Expense
Our Company did not incur any material preliminary expense.
Promoters
The promoters of our Company as of May 24, 2012 before our conversion into a joint stock
company with limited liability are as follows:
No. Name of promoters of our Company
1. . Hongshun Xiangtai
2. . Baoli Hongya
3. . Harbin Junlin Investment Consulting Co., Ltd. (
ʮ̡)
4. . IPV Capital I HK Limited (ʮ̡)
5. . CV VI Holding, Limited (ʮ̡)
6. . Power Trend
7. . Honor Base (Hong Kong) Holdings Limited (
ʮ̡)
8. . Beijing Jinhua Tianda Investment Management Center (Limited Partnership) (ശ૴༺ҳ༟၍ଣʕː
Υྫ)
9. . SPM Capital, LLC (ʮ̡)
10. Beijing Yinghua Ruishi Investment Management Center (Limited Partnership) (ҳ༟၍ଣʕ
Υྫ)
11. Beijing Gaodi Datian Investment Management Center (Limited Partnership) (༺˂ҳ༟၍ଣʕː
Υྫ)
12. Grand Fame International Limited (ʮ̡)
13. Qingdao Hengsheng Guangmao Investment Management Co., Ltd. (ʮ̡)
14. Bloom China Corporation Limited (ʮ̡)
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 or the related transactions described in this
prospectus.
Qualifications of Experts
The qualifications of the experts who have given opinions or advice in this prospectus are as
follows:
Name Qualification
China International Capital Corporation Hong Kong
Securities Limited
A licensed corporation under the SFO for carrying on
type 1 (dealing in securities), type 2 (dealing in
futures contracts), type 4 (advising on securities),
type 5 (advising on futures contracts) and type 6
(advising on corporate finance) of the regulated
activities as defined under the SFO
Huatai Financial Holdings (Hong Kong) Limited A licensed corporation under the SFO for carrying on
type 1 (dealing in securities), type 2 (dealing in
futures contracts), type 3 (leveraged foreign
exchange trading), type 4 (advising on securities),
type 6 (advising on corporate finance), type 7
(providing automated trading services) and type 9
(asset management) of the regulated activities as
defined under the SFO
VI-26


--- page 515 ---
APPENDIX VI STATUTORY AND GENERAL INFORMATION
Name Qualification
Ernst & Young Certified Public Accountants and Registered Public
Interest Entity Auditor
JunHe LLP PRC Legal Adviser
Jun He Law Offices LLC Sanctions Legal Adviser as to international sanctions
laws
JunHe LLP Sanctions Legal Adviser as to PRC sanctions laws
Frost & Sullivan (Beijing) Inc., Shanghai Branch Co. Independent Industry Consultant
Consents of Experts
Each of the experts referred to in the paragraph headed “— Qualifications of Experts” above
has given and has not withdrawn its written consent to the issue of this prospectus with the inclusion of
its reports, letters or opinions (as the case may be) and the references to its name included herein in the
form and context in which they are included.
As of the Latest Practicable Date, none of the experts named above had any shareholding
interest in our Company or our subsidiary or rights (whether legally enforceable or not) to subscribe for
or to nominate persons to subscribe for securities in any member of our Group.
Taxation of Holders of H Shares
The sale, purchase and transfer of H Shares are subject to Hong Kong stamp duty. The current
rate charged 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. See “Taxation and Foreign Exchange — Taxation in
Hong Kong” in Appendix III to this prospectus.
No Material Adverse Change
Our Directors confirm that, there has been no material adverse change in our business, financial
condition and results of operations since December 31, 2025, being the latest balance sheet date of our
consolidated financial statements as set out in the Accountants’ Report in Appendix I to this
prospectus.
Binding Effect
This prospectus shall have the effect, if any application is made pursuant hereto, of rendering
all persons concerned bound by all the provisions (other than the penal provisions) of Sections 44A and
44B of the Companies (Winding Up and Miscellaneous Provisions) Ordinance as far as applicable.
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 Ordinance
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of
the Laws of Hong Kong).
VI-27


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APPENDIX VI STATUTORY AND GENERAL INFORMATION
Miscellaneous
(i) Save as disclosed herein, within the two years immediately preceding the date of this
prospectus:
(a) no share or loan capital or debenture of our Company or our subsidiary has been
issued or agreed to be issued or is proposed to be issued for cash or as fully or
partially paid other than in cash or otherwise; and
(b) no commissions, discounts, brokerages or other special terms have been granted in
connection with the issue or sale of any share or loan capital of our Company or
our subsidiary.
(ii) No share or loan capital of our Company is under option or is agreed conditionally or
unconditionally to be put under option.
(iii) There are no founder, management or deferred shares, convertible debt securities nor any
debentures in our Company or any of our subsidiaries.
(iv) Our Company has no outstanding convertible debt securities or debentures.
(v) There have been no interruptions in our business which may have or have had a
significant effect on our financial position in the last 12 months.
(vi) There are no arrangements under which future dividends are waived or agreed to be
waived.
(vii) All necessary arrangements have been made to enable our H Shares to be admitted into
CCASS for clearing and settlement.
(viii) Save for the A Shares of our Company that are listed on the Shenzhen Stock Exchange,
and save for the H Shares to be issued in connection with the Global Offering, none of
the equity or debt securities of our Company, if any, are listed or dealt with in any other
stock exchange nor is any listing or permission being or proposed to be sought.
VI-28


--- page 517 ---
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND AVAILABLE ON DISPLAY
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to the copy of this prospectus delivered to the Registrar of Companies
in Hong Kong for registration were:
(i) the written consents referred to in the paragraph headed “Statutory and General Information
— Other Information — Consents of Experts” in Appendix VI to this prospectus; and
(ii) a copy of the material contract referred to in the paragraph headed “Statutory and General
Information — Further Information about Our Business — Summary of Material
Contract” in Appendix VI to this prospectus.
DOCUMENTS AVAILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of the Stock
Exchange at www.hkexnews.hk and our website at www.sg-micro.com during a period of 14 days
from the date of this prospectus:
(i) the Articles of Association;
(ii) the Accountants’ Report prepared by Ernst & Young, the text of which is set out in
Appendix I to this prospectus;
(iii) the audited consolidated financial statements of our Group for the years ended
December 31, 2023, 2024 and 2025;
(iv) the report on review of the unaudited interim condensed consolidated financial
information of our Group for the three months ended March 3l, 2026 from Ernst &
Young, the text of which is set out in the section headed “Unaudited Interim Condensed
Consolidated Financial Information” in Appendix IA to this prospectus;
(v) the report prepared by Ernst & Young on the unaudited pro forma financial information
of our Group, the text of which is set out in Appendix II to this prospectus;
(vi) the written consents referred to in the paragraph headed “Statutory and General
Information — Other Information — Consents of Experts” in Appendix VI to this
prospectus;
(vii) the material contract referred to in the paragraph headed “Statutory and General
Information — Further Information about Our Business — Summary of Material
Contract” in Appendix VI to this prospectus;
(viii) the service contracts and the letters of appointment referred to in the paragraph headed
“Statutory and General Information — Further Information about Our Directors and
Substantial Shareholders — Particulars of Directors’ Service Contracts and Letters of
Appointment” in Appendix VI to this prospectus;
(ix) the PRC legal opinion issued by JunHe LLP, our PRC Legal Adviser, in respect of,
among other things, the general corporate matters and property interests of our Group
under PRC law;
(x) the legal memorandum issued by Jun He Law Offices LLC and JunHe LLP, our
Sanctions Legal Adviser;
VII-1


--- page 518 ---
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND AVAILABLE ON DISPLAY
(xi) the industry report issued by Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., the
summary of which is set forth in “Industry Overview”; and
(xii) the PRC Company Law, the PRC Securities Law and the Trial Measures for Overseas
Listing, together with their unofficial English translations.
DOCUMENT AVAILABLE FOR INSPECTION
A copy of a full list of grantees under the Share Incentive Plans, containing all the particulars as
required under Rule 17.02(1)(b) of, and paragraph 27 of Appendix D1A to, the Listing Rules and
paragraph 10 of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, will be available for inspection at the office of Cooley HK at 35/F, Two Exchange Square,
8 Connaught Place, Central, Hong Kong, during normal business hours up to and including the date
which is 14 days from the date of this prospectus.
VII-2


--- page 519 ---
聖邦微電子( 北京) 股份有限公司
SG MICRO CORP
聖邦微電子(北京)股份有限公司   SG MICRO CORP
GLOBAL OFFERING
Joint Sponsors, [Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers]
(A joint stock company incorporated in the People’s Republic of China with limited liability)
Stock code: 3661
